UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 20-F

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

[X]
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 
For the fiscal year ended December 31, 2015

OR

[_]
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from _______ to _______

OR

[_]
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 
Date of event requiring this shell company report: Not applicable

Commission file number: 001-34848

SEANERGY MARITIME HOLDINGS CORP.
(Exact name of Registrant as specified in its charter)
 
 
(Translation of Registrant's name into English)
 
 
Republic of the Marshall Islands
(Jurisdiction of incorporation or organization)
 
16 Grigoriou Lambraki Street, 2 nd Floor, 166 74 Glyfada, Athens, Greece
(Address of principal executive offices)
 
Stamatios Tsantanis, Chairman & Chief Executive Officer
Seanergy Maritime Holdings Corp.
16 Grigoriou Lambraki Street, 2 nd Floor, 166 74 Glyfada, Athens, Greece
Telephone: +30 210 8913507, Fax: +30 210 9638404
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)



Securities registered or to be registered pursuant to Section 12(b) of the Act:
Title of class
Name of exchange on which registered
Shares of common stock, par value $0.0001 per share
NASDAQ Capital Market
   
Securities registered or to be registered pursuant to Section 12(g) of the Act: None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None
Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report: As of December 31, 2015, there were 97,612,971 shares of the registrant's common stock, $0.0001 par value, outstanding.
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. [_] Yes  [X] No
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. [_] Yes [X] No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. [X] Yes [_] No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months. [X] Yes [_] No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See the definitions of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer [_]
Accelerated filer [_]
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:
U.S. GAAP [X]
 
International Financial Reporting Standards as issued by the International Accounting Standards Board [_]
 
Other [_]
         
If "Other" has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.
 
[_] Item 17
 
[_] Item 18
 
         
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
 
[_] Yes
 
[X] No
 
         

TABLE OF CONTENTS

Page
 
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
1
 
 
 
PART I
 
2
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
22
ITEM 4A.
UNRESOLVED STAFF COMMENTS
36
ITEM 5.
OPERATING AND FINANCIAL REVIEW AND PROSPECTS
36
ITEM 6.
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
49
ITEM 7.
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
51
ITEM 8.
FINANCIAL INFORMATION
54
ITEM 9.
THE OFFER AND LISTING
54
ITEM 10.
ADDITIONAL INFORMATION
55
ITEM 11.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
64
ITEM 12.
DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
64
 
 
 
PART II
 
64
ITEM 13.
DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
64
ITEM 14.
MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
65
ITEM 15.
CONTROLS AND PROCEDURES
65
ITEM 16A.
AUDIT COMMITTEE FINANCIAL EXPERT
66
ITEM 16B.
CODE OF ETHICS
66
ITEM 16C.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
66
ITEM 16D.
EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
66
ITEM 16E.
PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
66
ITEM 16F.
CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT
66
ITEM 16G.
CORPORATE GOVERNANCE
67
ITEM 16H.
MINE SAFETY DISCLOSURE
67
 
 
 
PART III
 
67
ITEM 17.
FINANCIAL STATEMENTS
67
ITEM 18.
FINANCIAL STATEMENTS
67
ITEM 19.
EXHIBITS
67

 


CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This annual report contains certain forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Our forward-looking statements include, but are not limited to, statements regarding our or our management's expectations, hopes, beliefs, intentions or strategies regarding the future and other statements that are other than statements of historical fact. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "might," "plan," "possible," "potential," "predict," "project," "should," "would" and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.
The forward-looking statements in this report are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management's examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections. As a result, you are cautioned not to rely on any forward-looking statements.
In addition to these important factors, important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include among other things:
· shipping industry trends, including charter rates and factors affecting vessel supply and demand;
· the number of newbuildings under construction in the drybulk industry;
· future charter hire rates and vessel values;
· future, pending or recent acquisitions and disposition, business strategy, areas of possible expansion or contraction, and expected capital spending or operating expenses;
· the useful lives and changes in the value of our vessels and their impact on our compliance with loan covenants;
· availability of crew, number of off-hire days, classification survey requirements and insurance costs;
· global and regional economic and political conditions;
· our ability to leverage the relationships and reputation in the drybulk shipping industry of V.Ships Limited, or V.Ships, and Fidelity Marine Inc., or Fidelity;
· changes in seaborne and other transportation patterns;
· changes in governmental rules and regulations or actions taken by regulatory authorities;
· potential liability from future litigation and incidents involving our vessels;
1
· acts of terrorism and other hostilities;
· loss of our customers, charters or vessels;
· the aging of our fleet and increases in operating costs;
· damage to our vessels;
· our ability to continue as a going concern;
· our future operating or financial results;
· our financial condition and liquidity, including our ability to pay amounts that we owe, obtain additional financing in the future to fund capital expenditures, acquisitions and other general corporate activities; and
· other factors discussed in "Item 3.D. Risk Factors."
Should one or more of the foregoing risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
PART I
References in this annual report to "Seanergy," "we," "us," "our company" or "Company" refer to Seanergy Maritime Holdings Corp. and its subsidiaries, but, if the context otherwise requires, may refer only to Seanergy Maritime Holdings Corp. References in this annual report to "Seanergy Maritime" refer to our predecessor, Seanergy Maritime Corp. References in this annual report to "BET" refer to our former wholly-owned subsidiary Bulk Energy Transport (Holdings) Limited. References in this annual report to "MCS" refer to our wholly-owned subsidiary Maritime Capital Shipping Limited.
We use the term deadweight tons, or dwt, expressed in metric tons, each of which is equivalent to 1,000 kilograms, in describing the size of our vessels. Unless otherwise indicated, all references to "U.S. dollars," "dollars," "U.S. $" and "$" in this annual report are to the lawful currency of the United States of America. References in this annual report to our common shares are adjusted to reflect the consolidation of our common shares through a one-for-five reverse stock split, which became effective as of January 8, 2016.
ITEM 1.
IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
   
Not applicable.
ITEM 2.
OFFER STATISTICS AND EXPECTED TIMETABLE
   
Not applicable.
ITEM 3.
KEY INFORMATION
   
A.             Selected Financial Data
The following table sets forth our selected consolidated financial data. The selected consolidated financial data in the table as of December 31, 2015, 2014, 2013, 2012 and 2011 are derived from our audited consolidated financial statements and notes thereto which have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP"). The following data should be read in conjunction with Item 5. "Operating and Financial Review and Prospects", the consolidated financial statements and related notes included elsewhere in this annual report.
2

Amounts in the tables below are in thousands of U.S. dollars, except for share and per share data.
   
Year Ended December 31,
 
   
2015
   
2014
   
2013
   
2012
   
2011
 
Statement of Income Data:
                   
Vessel revenue, net
   
11,223
     
2,010
     
23,079
     
55,616
     
104,060
 
Direct voyage expenses
   
(7,496
)
   
(1,274
)
   
(8,035
)
   
(13,587
)
   
(2,541
)
Vessel operating expenses
   
(5,639
)
   
(1,006
)
   
(11,086
)
   
(26,983
)
   
(34,727
)
Voyage expenses - related party
   
-
     
(24
)
   
(313
)
   
(532
)
   
(661
)
Management fees - related party
   
-
     
(122
)
   
(743
)
   
(1,625
)
   
(2,415
)
Management fees
   
(336
)
   
-
     
(194
)
   
(588
)
   
(576
)
General and administration expenses
   
(2,804
)
   
(2,987
)
   
(3,966
)
   
(6,337
)
   
(8,070
)
General and administration expenses - related party
   
(70
)
   
(309
)
   
(412
)
   
(402
)
   
(603
)
Loss on bad debts
   
(30
)
   
(38
)
   
-
     
(327
)
   
-
 
Amortization of deferred dry-docking costs
   
(38
)
   
-
     
(232
)
   
(3,648
)
   
(7,313
)
Depreciation
   
(1,865
)
   
(3
)
   
(982
)
   
(15,606
)
   
(28,856
)
Loss on sale of vessels
   
-
     
-
     
-
     
(15,590
)
   
-
 
Impairment loss for goodwill
   
-
     
-
     
-
     
(4,365
)
   
(12,910
)
Impairment loss for vessels and deferred charges
   
-
     
-
     
(3,564
)
   
(147,143
)
   
(188,995
)
Gain on disposal of subsidiaries
   
-
     
-
     
25,719
     
-
     
-
 
Gain on restructuring
   
-
     
85,563
     
-
     
-
     
-
 
Operating (loss) / income
   
(7,055
)
   
81,810
     
19,271
     
(181,117
)
   
(183,607
)
Interest and finance costs
   
(1,460
)
   
(1,463
)
   
(8,389
)
   
(12,480
)
   
(13,482
)
Interest and finance costs - related party
   
(399
)
   
-
     
-
     
-
     
-
 
Interest income
   
-
     
14
     
13
     
59
     
60
 
Loss on interest rate swaps
   
-
     
-
     
(8
)
   
(189
)
   
(641
)
Foreign currency exchange (losses) gains, net
   
(42
)
   
(13
)
   
19
     
(43
)
   
(46
)
Total other expenses, net
   
(1,901
)
   
(1,462
)
   
(8,365
)
   
(12,653
)
   
(14,109
)
Net (loss) / income before taxes
   
(8,956
)
   
80,348
     
10,906
     
(193,770
)
   
(197,716
)
Income taxes
   
-
     
-
     
1
     
2
     
(40
)
Net (loss) / income
   
(8,956
)
   
80,348
     
10,907
     
(193,768
)
   
(197,756
)
Net (loss) / income per common share
                                       
Basic and diluted
   
(0.83
)
   
30.06
     
4.56
     
(83.69
)
   
(135.18
)
Weighted average common shares outstanding
                                       
Basic
   
10,773,404
     
2,672,945
     
2,391,628
     
2,315,315
     
1,462,927
 
Diluted
   
10,773,404
     
2,672,950
     
2,391,885
     
2,315,315
     
1,462,927
 
                                         
Dividends declared per share
   
-
     
-
     
-
     
-
     
-
 

   
As of December 31,
 
   
2015
   
2014
   
2013
   
2012
   
2011
 
Balance Sheet Data:
                   
Total current assets
   
8,278
     
3,207
     
66,350
     
52,086
     
43,432
 
Vessels, net
   
199,840
     
-
     
-
     
68,511
     
381,129
 
Total assets
   
209,352
     
3,268
     
66,350
     
120,960
     
436,476
 
Total current liabilities, including current portion of long-term debt
   
9,250
     
592
     
157,045
     
222,577
     
58,697
 
Long-term debt, net of current portion
   
186,068
     
-
     
-
     
-
     
300,586
 
Common stock
   
2
     
-
     
-
     
-
     
-
 
Total equity / (deficit)
   
23,284
     
2,676
     
(90,695
)
   
(101,617
)
   
76,923
 
Shares issued and outstanding as at December 31,
   
19,522,413
     
3,977,854
     
2,391,854
     
2,391,856
     
1,463,532
 

3


 
Year Ended December 31,
 
 
2015
 
2014
 
2013
 
2012
 
2011
 
Cash Flow Data:
         
Net cash (used in) provided by operating activities
   
(4,737
)
   
(14,858
)
   
1,030
     
2,418
     
26,439
 
Net cash (used in) provided by investing activities
   
(201,684
)
   
105,895
     
993
     
55,402
     
-
 
Net cash provided by (used in) financing activities
   
206,852
     
(91,239
)
   
(3,246
)
   
(71,256
)
   
(62,492
)

B.             Capitalization and Indebtedness
Not applicable.
C.             Reasons for the Offer and Use of Proceeds
Not applicable.
D.             Risk Factors
Some of the following risks relate principally to the industry in which we operate and others relate to our business in general or our common stock. If any of the following risks occur, our business, financial condition, operating results and cash flows could be materially adversely affected and the trading price of our securities could decline.
Risks Relating to Our Industry
The market values of our vessels may decrease, which could limit the amount of funds that we can borrow or trigger certain financial covenants under our loan agreements, and we may incur an impairment or, if we sell vessels following a decline in their market value, a loss.
The fair market values of our vessels are related to prevailing freight charter rates. While the fair market value of vessels and the freight charter market have a very close relationship as the charter market moves from trough to peak, the time lag between the effect of charter rates on market values of ships can vary. A decrease in the market value of our vessels could require us to raise additional capital in order to remain compliant with our loan covenants, and could result in the loss of our vessels and adversely affect our earnings and financial condition.
The fair market value of our vessels may increase or decrease, and we expect the market values to fluctuate depending on a number of factors including:
· prevailing level of charter rates;
· general economic and market conditions affecting the shipping industyr;
· types and sizes of vessels;
· supply and demand for vessels;
· other modes of transportation;
· cost of newbuildings;
· governmental and other regulations; and
· technological advances;
4

In addition, as vessels grow older, they generally decline in value. If the fair market value of our vessels declines, we may not be in compliance with certain covenants in our loan agreements, and our lenders could accelerate our indebtedness or require us to pay down our indebtedness to a level where we are again in compliance with our loan covenants.  If any of our loans are accelerated, we may not be able to refinance our debt or obtain additional funding.  We expect that we will enter into more loan agreements in connection with the future acquisitions of vessels. For more information regarding our current loan facilities, please see "Item 5. Operating and Financial Review and Prospects–B. Liquidity and Capital Resources–Credit Facilities."
In addition, if vessel values decline, we may have to record an impairment adjustment in our financial statements which could adversely affect our financial results.  Furthermore, if we sell vessels at a time when vessel prices have fallen and before we have recorded an impairment adjustment to our financial statements, the sale may be at less than the vessel's carrying amount in our financial statements, resulting in a loss and a reduction in earnings.
Charter hire rates for drybulk carriers are highly volatile and remain significantly below the highs of 2008, which had and may continue to have an adverse effect on our revenues, earnings and profitability.
The abrupt and dramatic downturn in the drybulk charter market, from which we have derived substantially all of our revenues, has severely affected the drybulk shipping industry and has harmed our business. The Baltic Dry Index, or BDI, declined from a high of 11,793 in May 2008 to a low of 290 in February 10, 2016, which represents a decline of 98%.  In 2015, the BDI ranged from a low of 471 on December 16, 2015 to a high of 1,222 on August 5, 2015, and to date in 2016, has ranged from a low of 290 on February 10, 2016, to a high of 671 on April 19, 2016. The decline and volatility in charter rates has been due to various factors, including the over-supply of drybulk vessels, the lack of trade financing for purchases of commodities carried by sea, which resulted in a significant decline in cargo shipments, and trade disruptions caused by natural disasters. Drybulk charter rates are at depressed levels and may decline further. These circumstances, which result from the economic situation worldwide and the multiple disruptions to the operation of global credit markets, have had a number of adverse consequences for drybulk shipping, including, among other developments:
· decrease in available financing for vessels;
· no active secondhand market for the sale of vessels,;
· charterers seeking to renegotiate the rates for existing time charters;
· widespread loan covenant defaults in the drybulk shipping industry due to the substantial decrease in vessel values; and
· declaration of bankruptcy by some operators, charterers and ship owners.
The degree of charter hire rate volatility among different types of drybulk carriers has varied widely. If we enter into a charter when charter hire rates are low, our revenues and earnings will be adversely affected and we may not be able to successfully charter our vessels at rates sufficient to allow us to operate our business profitably or meet our obligations.  Further, if low charter rates in the drybulk market continue or decline further for any significant period, this could have an adverse effect on our vessel values and ability to comply with the financial covenants in our loan agreements. In such a situation, unless our lenders were willing to provide waivers of covenant compliance or modifications to our covenants, our lenders could accelerate our debt and we could face the loss of our vessels.
An over-supply of drybulk carrier capacity may prolong or further depress the current low charter rates and, in turn, adversely affect our profitability.
The market supply of drybulk carriers has been increasing due to the high level of new deliveries in the last few years. Drybulk newbuildings were delivered in significant numbers starting at the beginning of 2006 and continued to be delivered in significant numbers through the end of 2015. An over-supply of drybulk carrier capacity could prolong the period during which low charter rates prevail.
5

Factors that influence the supply of vessel capacity include:
· number of new vessel deliveries;
· scrapping rate of older vessels;
· vessel casualties;
· price of steel;
· number of vessels that are out of service;
· changes in environmental and other regulations that may limit the useful life of vessels; and
· port or canal congestion.
If global vessel capacity increases in the drybulk shipping market, but the demand for vessel capacity does not increase or increases at a slower rate, charter rates could materially decline, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.
If economic conditions throughout the world do not improve, it will impede our results of operations, financial condition and cash flows, and could cause the market price of our common shares to decline.
Negative trends in the global economy that emerged in 2008 continue to adversely affect global economic conditions. In addition, the world economy continues to face a number of new challenges, including recent turmoil and hostilities in the Middle East, North Africa and other geographic areas and countries and continuing economic weakness in the European Union. The deterioration in the global economy has caused, and may continue to cause, a decrease in worldwide demand for certain goods and, thus, shipping. We cannot predict how long the current market conditions will last.
The European Union and other parts of the world have recently been or are currently in a recession and continue to exhibit weak economic trends. Moreover, there is uncertainty related to certain countries' ability to refinance their sovereign debt, such as Greece, Spain, Portugal, Ireland, and Italy.  As a result, the credit markets in the United States and Europe have experienced significant contraction, deleveraging and reduced liquidity, and the U.S. federal and state governments and European authorities have implemented a broad variety of governmental action and new regulation of the financial markets and may implement additional regulations in the future.  As a result, global economic conditions and global financial markets have been, and continue to be, volatile. Further, credit markets and the debt and equity capital markets have been distressed and the uncertainty surrounding the future of the global credit markets has resulted in reduced access to credit worldwide.
In addition, continued economic slowdown in the Asia Pacific region, particularly in China, may exacerbate the effect of the weak economic trends in the rest of the world. Before the global economic financial crisis that began in 2008, China had one of the world's fastest growing economies in terms of gross domestic product, or GDP, which had a significant impact on shipping demand. The quarterly year-over-year growth rate of China's GDP decreased to approximately 6.8% for the year ended December 31, 2015, as compared to approximately 7.2% for the year ended December 31, 2014, and continues to remain below pre-2008 levels. It is possible that China and other countries in the Asia Pacific region will continue to experience slowed or even negative economic growth in the near future. Moreover, the current economic slowdown in the economies of the European Union and in certain Asian countries may further adversely affect economic growth in China and elsewhere. Our results of operations and ability to grow our fleet could be impeded by a continuing or worsening economic downturn in any of these countries.
We face risks attendant to the trends in the global economy, changes in interest rates, and instability in the banking and securities markets around the world, among other factors. Major market disruptions and the current adverse changes in market conditions and regulatory climate worldwide may adversely affect our business or impair our ability to borrow under our loan agreements or any future financial arrangements. We cannot predict how long the current market conditions will last. However, these recent and developing economic and governmental factors, together with the concurrent decline in charter rates and vessel values, may have a material adverse effect on our results of operations, financial condition or cash flows, and the trading price of our common stock. In the absence of available financing, we also may be unable to take advantage of business opportunities or respond to competitive pressures.
6

The instability of the euro or the inability of Eurozone countries to refinance their debts could have a material adverse effect on our revenue, profitability and financial position.
As a result of the credit crisis in Europe, in particular in Greece, Cyprus, Italy, Ireland, Portugal and Spain, the European Commission created the European Financial Stability Facility, or the EFSF, and the European Financial Stability Mechanism, or the EFSM, to provide funding to Eurozone countries in financial difficulties that seek such support. In March 2011, the European Council agreed on the need for Eurozone countries to establish a permanent stability mechanism, the European Stability Mechanism, or the ESM, which was established in September 2012 to assume the role of the EFSF and the EFSM in providing external financial assistance to Eurozone countries. Furthermore, in July 2012, the European Central Bank stated its commitment to take necessary action within its mandate in order to save the Euro. Despite these measures, concerns persist regarding the debt burden of certain Eurozone countries and their ability to meet future financial obligations and the overall stability of the euro. An extended period of adverse development in the outlook for European countries could reduce the overall demand for drybulk cargoes and for our services. These potential developments, or market perceptions concerning these and related issues, could affect our financial position, results of operations and cash flow.
We maintain cash with a limited number of financial institutions including financial institutions that may be located in Greece, which will subject us to credit risk.
We maintain all of our cash with a limited number of financial institutions, including institutions that are located in Greece. These financial institutions located in Greece may be subsidiaries of international banks or Greek financial institutions. Economic conditions in Greece have been, and continue to be, severely disrupted and volatile, and as a result of sovereign weakness, Moody's Investor Services Inc. has downgraded the bank financial strength ratings, as well as the deposit and debt ratings, of several Greek banks to reflect their weakening stand-alone financial strength and the anticipated additional pressures stemming from the country's challenged economic prospects.
Risks associated with operating ocean-going vessels could affect our business and reputation, which could adversely affect our revenues and expenses.
The operation of an ocean-going vessel carries inherent risks. These risks include the possibility of:
· crew strikes and/or boycotts;
· marine disaster;
· piracy;
· environmental accidents;
· cargo and property losses or damage; and
· business interruptions caused by mechanical failure, human error, war, terrorism, political action in various countries, labor strikes or adverse weather conditions.
Any of these circumstances or events could increase our costs or lower our revenues.
Rising fuel prices may adversely affect our profits.
The cost of fuel is a significant factor in negotiating charter rates. As a result, an increase in the price of fuel beyond our expectations may adversely affect our profitability. The price and supply of fuel is unpredictable and fluctuates based on events outside our control, including geopolitical developments, supply and demand for oil and gas, actions by members of the Organization of the Petroleum Exporting Countries and other oil and gas producers, war and unrest in oil producing countries and regions, regional production patterns and environmental concerns and regulations. Further, fuel may become much more expensive in the future, which may reduce the profitability and competitiveness of our business versus other forms of transportation, such as truck or rail.
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Upon redelivery of vessels at the end of a period time or voyage time charter, we may be obligated to repurchase bunkers on board at prevailing market prices, which could be materially higher than fuel prices at the inception of the charter period. In addition, fuel is a significant, if not the largest, expense that we would incur with respect to vessels operating on voyage charter.
Our vessels are chartered on the spot charter market, either through trip charter contracts or voyage charter contracts.  Voyage charter contracts generally provide that the vessel owner bears the cost of fuel in the form of bunkers, which is a material operating expense. We do not intend to hedge our fuel costs, thus an increase in the price of fuel beyond our expectations may affect in a negative way our profitability and our cash flows.
We are dependent on spot charters and any decrease in spot charter rates in the future may adversely affect our earnings.
We currently operate all of our vessels in the spot market, exposing us to fluctuations in spot market charter rates. Further, we may employ any additional vessels that we acquire in the spot market.
Although the number of vessels in our fleet that participate in the spot market will vary from time to time, we anticipate that a significant portion of our fleet will participate in this market. As a result, our financial performance will be significantly affected by conditions in the drybulk spot market and only our vessels that operate under fixed-rate time charters may, during the period such vessels operate under such time charters, provide a fixed source of revenue to us.
Historically, the drybulk markets have been volatile as a result of the many conditions and factors that can affect the price, supply of and demand for drybulk capacity. The weak global economic trends may further reduce demand for transportation of drybulk cargoes over longer distances, which may materially affect our revenues, profitability and cash flows. The spot charter market may fluctuate significantly based upon supply of and demand of vessels and cargoes. The successful operation of our vessels in the competitive spot charter market depends upon, among other things, obtaining profitable spot charters and minimizing, to the extent possible, time spent waiting for charters and time spent traveling unladen to pick up cargo. The spot market is very volatile, and, in the past, there have been periods when spot rates have declined below the operating cost of vessels. If future spot charter rates decline, then we may be unable to operate our vessels trading in the spot market profitably, or meet our obligations, including payments on indebtedness. Furthermore, as charter rates for spot charters are fixed for a single voyage, which may last up to several weeks, during periods in which spot charter rates are rising, we will generally experience delays in realizing the benefits from such increases.
Our revenues are subject to seasonal fluctuations, which could affect our operating results and ability to service our debt or pay dividends.
We operate our vessels in markets that have historically exhibited seasonal variations in demand and, as a result, in charter hire rates.  This seasonality may result in quarter-to-quarter volatility in our operating results. The drybulk carrier market is typically stronger in the fall and winter months in anticipation of increased consumption of coal and other raw materials in the northern hemisphere during the winter months. In addition, unpredictable weather patterns in these months tend to disrupt vessel schedule and supplies of certain commodities. As a result, our revenues may be weaker during the fiscal quarters ending June 30 and September 30, and, conversely, our revenues may be stronger in fiscal quarters ending December 31 and March 31.  This seasonality should not affect our operating results if our vessels are employed on period time charters, but since all of our vessels are employed in the spot market, seasonality may materially affect our operating results.
Our vessels may call on ports located in or may operate in countries that are subject to restrictions imposed by the United States, the European Union or other governments that could adversely affect our reputation and the market price of our common stock.
During the year ended December 31, 2015, none of our vessels called on ports located in countries subject to sanctions and embargoes imposed by the U.S. government and other authorities or countries identified by the U.S. government or other authorities as state sponsors of terrorism, such as Iran, Sudan and Syria; however our vessels may call on ports in these countries from time to time in the future on our charterers' instructions. The U.S. sanctions and embargo laws and regulations vary in their application, as they do not all apply to the same covered persons or proscribe the same activities, and such sanctions and embargo laws and regulations may be amended or strengthened over time.
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In 2010, the U.S. enacted the Comprehensive Iran Sanctions Accountability and Divestment Act, or CISADA, which amended the Iran Sanctions Act. Among other things, CISADA introduced limits on the ability of companies and persons to do business or trade with Iran when such activities relate to the investment, supply or export of refined petroleum or petroleum products. In 2012, President Obama signed Executive Order 13608 which prohibits foreign persons from violating or attempting to violate, or causing a violation of any sanctions in effect against Iran or facilitating any deceptive transactions for or on behalf of any person subject to U.S. sanctions. Any persons found to be in violation of Executive Order 13608 will be deemed a foreign sanctions evader and will be banned from all contacts with the United States, including conducting business in U.S. dollars. Also in 2012, President Obama signed into law the Iran Threat Reduction and Syria Human Rights Act of 2012, or the Iran Threat Reduction Act, which created new sanctions and strengthened existing sanctions. Among other things, the Iran Threat Reduction Act intensifies existing sanctions regarding the provision of goods, services, infrastructure or technology to Iran's petroleum or petrochemical sector. The Iran Threat Reduction Act also includes a provision requiring the President of the United States to impose five or more sanctions from Section 6(a) of the Iran Sanctions Act, as amended, on a person the President determines is a controlling beneficial owner of, or otherwise owns, operates, or controls or insures a vessel that was used to transport crude oil from Iran to another country and (1) if the person is a controlling beneficial owner of the vessel, the person had actual knowledge the vessel was so used or (2) if the person otherwise owns, operates, or controls, or insures the vessel, the person knew or should have known the vessel was so used. Such a person could be subject to a variety of sanctions, including exclusion from U.S. capital markets, exclusion from financial transactions subject to U.S. jurisdiction, and exclusion of that person's vessels from U.S. ports for up to two years.
On November 24, 2013, the P5+1 (the United States, United Kingdom, Germany, France, Russia and China) entered into an interim agreement with Iran entitled the Joint Plan of Action, or JPOA. Under the JPOA it was agreed that, in exchange for Iran taking certain voluntary measures to ensure that its nuclear program is used only for peaceful purposes, the U.S. and EU would voluntarily suspend certain sanctions for a period of six months.
On January 20, 2014, the U.S. and E.U. indicated that they would begin implementing the temporary relief measures provided for under the JPOA. These measures include, among other things, the suspension of certain sanctions on the Iranian petrochemicals, precious metals, and automotive industries from January 20, 2014 until July 20, 2014. The JPOA was subsequently extended twice.
On July 14, 2015, the P5+1 and the EU announced that they reached a landmark agreement with Iran titled the Joint Comprehensive Plan of Action Regarding the Islamic Republic of Iran's Nuclear Program, or the JCPOA, which is intended to significantly restrict Iran's ability to develop and produce nuclear weapons for 10 years while simultaneously easing sanctions directed toward non-U.S. persons for conduct involving Iran, but taking place outside of U.S. jurisdiction and does not involve U.S. persons.  On January 16, 2016, the United States joined the EU and the UN in lifting a significant number of their nuclear-related sanctions on Iran following an announcement by the International Atomic Energy Agency, or the IAEA, that Iran had satisfied its respective obligations under the JCPOA.
U.S. sanctions prohibiting certain conduct that is now permitted under the JCPOA have not actually been repealed or permanently terminated at this time.  Rather, the U.S. government has implemented changes to the sanctions regime by: (1) issuing waivers of certain statutory sanctions provisions; (2) committing to refrain from exercising certain discretionary sanctions authorities; (3) removing certain individuals and entities from the Office of Foreign Assets Control's sanctions lists; and (4) revoking certain Executive Orders and specified sections of Executive Orders.  These sanctions will not be permanently "lifted" until the earlier of "Transition Day," set to occur on October 20, 2023, or upon a report from the IAEA stating that all nuclear material in Iran is being used for peaceful activities.
Although it is our intention to comply with the provisions of the JPOA, there can be no assurance that we will be in compliance in the future as such regulations and U.S. Sanctions may be amended over time, and the U.S. retains the authority to revoke the aforementioned relief if Iran fails to meet its commitments under the JPOA.
We believe that we are currently in compliance with all applicable sanctions and embargo laws and regulations. In order to maintain compliance, we monitor and review the movement of our vessels on a frequent basis. During 2015, none of our vessels made port calls to Iran.
All or most of our future charters shall include provisions and trade exclusion clauses prohibiting the vessels from calling on ports where there is an existing U.S embargo. Furthermore as of the date hereof, neither the Company nor its subsidiaries have ever entered into or have any future plans to enter into, directly or indirectly, any contracts, agreements or other arrangements with the governments of Iran, Syria, Sudan or Cuba or any entities controlled by the governments of these countries, including any entities organized in these countries.
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Due to the nature of our business and the evolving nature of the foregoing sanctions and embargo laws and regulations, there can be no assurance that we will be in compliance at all times in the future, particularly as the scope of certain laws may be unclear and may be subject to changing interpretations. Any such violation could result in fines, penalties or other sanctions that could severely impact our ability to access U.S. capital markets and conduct our business, and could result in some investors deciding, or being required, to divest their interest, or not to invest, in us. In addition, certain institutional investors may have investment policies or restrictions that prevent them from holding securities of companies that have contracts with countries identified by the U.S. government as state sponsors of terrorism. The determination by these investors not to invest in, or to divest from, our common stock may adversely affect the price at which our common stock trades. Moreover, our charterers may violate applicable sanctions and embargo laws and regulations as a result of actions that do not involve us or our vessels, and those violations could in turn negatively affect our reputation. In addition, our reputation and the market for our securities may be adversely affected if we engage in certain other activities, such as entering into charters with individuals or entities in countries subject to U.S. sanctions and embargo laws that are not controlled by the governments of those countries, or engaging in operations associated with those countries pursuant to contracts with third parties that are unrelated to those countries or entities controlled by their governments. Investor perception of the value of our common stock may be adversely affected by the consequences of war, the effects of terrorism, civil unrest and governmental actions in these and surrounding countries.
We are subject to regulation and liability under environmental laws that could require significant expenditures and affect our cash flows and net income.
Our business and the operation of our vessels are materially affected by government regulation in the form of international conventions, national, state and local laws and regulations in force in the jurisdictions in which the vessels operate, as well as in the country or countries of their registration, including those governing oil spills, discharges to air and water, ballast water management, and the handling and disposal of hazardous substances and wastes. These requirements include, but are not limited to, European Union Regulations, the U.S. Oil Pollution Act of 1990, the U.S. Comprehensive Environmental Response, Compensation and Liability Act of 1980,  the U.S. Clean Air Act, the U.S. Clean Water Act, the U.S. Marine Transportation Security Act of 2002, and regulations of the International Maritime Organization, or the IMO, including but not limited to, the International Convention for the Prevention of Pollution from Ships of 1975, the International Convention for the Prevention of Marine Pollution of 1973, the IMO International Convention for the Safety of Life at Sea of 1974 and the International Convention on Load Lines of 1966. We may also incur additional costs in order to comply with other existing and future regulatory obligations, including, but not limited to, costs relating to air emissions including greenhouse gases, the management of ballast water, maintenance and inspection, development and implementation of emergency procedures and insurance coverage or other financial assurance of our ability to address pollution incidents. These costs could have a material adverse effect on our business, results of operations, cash flows and financial condition and our available cash. Because such conventions, laws and regulations are often revised, we cannot predict the ultimate cost of complying with such conventions, laws and regulations or the impact thereof on the resale price or useful life of vessels we may acquire in the future. Additional conventions, laws and regulations may be adopted which could limit our ability to do business or increase the cost of our doing business and which may materially adversely affect our operations.
Increased inspection procedures, tighter import and export controls and new security regulations could increase costs and disrupt our business.
International shipping is subject to security and customs inspection and related procedures in countries of origin, destination and trans-shipment points. Since the events of September 11, 2001, there have been a variety of initiatives intended to enhance vessel security, such as the Maritime Transportation Security Act of 2002, or MTSA. To implement certain portions of the MTSA, in July 2003, the U.S. Coast Guard issued regulations requiring the implementation of certain security requirements aboard vessels operating in waters subject to the jurisdiction of the United States. These security procedures can result in delays in the loading, discharging or trans-shipment and the levying of customs duties, fines or other penalties against exporters or importers and, in some cases, carriers. Future changes to the existing security procedures may be implemented that could affect the drybulk sector. These changes have the potential to impose additional financial and legal obligations on carriers and, in certain cases, to render the shipment of certain types of goods uneconomical or impractical. These additional costs could reduce the volume of goods shipped, resulting in a decreased demand for vessels and have a negative effect on our business, revenues and customer relations.
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Acts of piracy on ocean-going vessels have recently increased in frequency, which could adversely affect our business.
Acts of piracy have historically affected ocean-going vessels trading in regions of the world such as the South China Sea, Strait of Malacca, Arabian Sea, Red Sea, Gulf of Aden off the coast of Somalia, Indian Ocean and Gulf of Guinea. Sea piracy incidents continue to occur, particularly in the South China Sea, the Indian Ocean, and increasingly in the Gulf of Guinea and Strait of Malacca, with drybulk vessels particularly vulnerable to such attacks.  If piracy attacks result in regions in which our vessels are deployed being characterized as "war risk" zones by insurers, as the Gulf of Aden temporarily was in May 2008, or Joint War Committee "war and strikes" listed areas, premiums payable for such coverage could increase significantly and such insurance coverage may be more difficult to obtain. In addition, crew and security equipment costs, including costs which may be incurred to employ onboard security armed guards, could increase in such circumstances.  Furthermore, while we believe the charterer remains liable for charter payments when a vessel is seized by pirates, the charterer may dispute this and withhold charter hire until the vessel is released. A charterer may also claim that a vessel seized by pirates was not "on-hire" for a certain number of days and is therefore entitled to cancel the charter party, a claim that we would dispute. We may not be adequately insured to cover losses from these incidents, which could have a material adverse effect on us. In addition, any detention hijacking as a result of an act of piracy against our vessels, or an increase in cost, or unavailability, of insurance for our vessels, could have a material adverse impact on our business, financial condition and results of operations.
The operation of drybulk carriers has particular operational risks.
The operation of drybulk carriers has certain unique risks. With a drybulk carrier, the cargo itself and its interaction with the vessel can be an operational risk. By their nature, drybulk cargoes are often heavy, dense, easily shifted, and react badly to water exposure. In addition, drybulk carriers are often subjected to battering treatment during discharging operations with grabs, jackhammers (to pry encrusted cargoes out of the hold) and small bulldozers. This treatment may cause damage to the vessel. Vessels damaged due to treatment during discharging procedures may affect a vessel's seaworthiness while at sea. Hull fractures in drybulk carriers may lead to the flooding of the vessels' holds. If a drybulk carrier suffers flooding in its forward holds, the bulk cargo may become so dense and waterlogged that its pressure may buckle the vessel's bulkheads, leading to the loss of a vessel. If we are unable to adequately maintain our vessels, we may be unable to prevent these events. Any of these circumstances or events could negatively impact our business, financial condition, and results of operations.
If any of the vessels we may acquire in the future fails to maintain its class certification or fails any annual survey, intermediate survey, or special survey, or if any scheduled class survey takes longer or is more expensive than anticipated, this could have a material adverse impact on our financial condition and results of operations.
The hull and machinery of every commercial vessel must be certified by a classification society authorized by its country of registry. The classification society certifies that a vessel is safe and seaworthy in accordance with the applicable rules and regulations of the country of registry of the vessel and the International Convention for the Safety of Life at Sea.
A vessel must undergo annual, intermediate and special surveys. The vessel's machinery may be on a continuous survey cycle, under which the machinery would be surveyed periodically over a five-year period. At the beginning, in between and in the end of this cycle, every vessel is required to undergo inspection of her underwater parts that usually includes dry-docking. These surveys and dry-dockings can be costly and can result in delays in returning a vessel to operation.
If any vessel does not maintain its class, the vessel will not be allowed to carry cargo between ports and cannot be employed or insured. Any such inability to carry cargo or be employed, or any such violation of covenants, could have a material adverse impact on our financial condition and results of operations.
Because seafaring employees we employ are covered by industry-wide collective bargaining agreements, failure of industry groups to renew those agreements may disrupt our operations and adversely affect our earnings.
We employ a large number of seafarers. All of the seafarers employed on the vessels in our fleet are covered by industry-wide collective bargaining agreements that set basic standards. We cannot assure you that these agreements will prevent labor interruptions. Any labor interruptions could disrupt our operations and harm our financial performance.
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Maritime claimants could arrest one or more of our vessels.
Crew members, suppliers of goods and services to a vessel, shippers of cargo and other parties may be entitled to a maritime lien against a vessel for unsatisfied debts, claims or damages. In many jurisdictions, a maritime lien holder may enforce its lien by arresting a vessel through foreclosure proceedings. The arresting or attachment of one or more of our vessels could interrupt our cash flow and require us to pay large sums of funds to have the arrest lifted, which would have a material adverse effect on our financial condition and results of operations.
In addition, in some jurisdictions, such as South Africa, under the "sister ship" theory of liability, a claimant may arrest both the vessel which is subject to the claimant's maritime lien and any "associated" vessel, which is any vessel owned or controlled by the same owner. Claimants could try to assert "sister ship" liability against one of our vessels for claims relating to another of our vessels.
Governments could requisition our vessels during a period of war or emergency, resulting in loss of earnings.
A government could requisition for title or hire one or more of our vessels. Requisition for title occurs when a government takes control of a vessel and becomes the owner.  Also, a government could requisition a vessel for hire. Requisition for hire occurs when a government takes control of a vessel and effectively becomes the charterer at dictated charter rates. Generally, requisitions occur during a period of war or emergency. Government requisition of one or more of our vessels could have a material adverse effect on our financial condition and results of operations.
The shipping industry has inherent operational risks that may not be adequately covered by our insurance.
We procure insurance for our fleet against risks commonly insured against by vessel owners and operators. Our current insurance includes hull and machinery insurance, war risks insurance and protection and indemnity insurance (which includes environmental damage and pollution insurance). We may not be adequately insured against all risks or our insurers may not pay a particular claim. Even if our insurance coverage is adequate to cover our losses, we may not be able to timely obtain a replacement vessel in the event of a loss. Furthermore, in the future, we may not be able to obtain adequate insurance coverage at reasonable rates for our fleet. We may also be subject to calls, or premiums, in amounts based not only on our own claim records but also the claim records of all other members of the protection and indemnity associations through which we receive indemnity insurance coverage for tort liability. Our insurance policies also contain deductibles, limitations and exclusions which, although we believe are standard in the shipping industry, may nevertheless increase our costs.
Risk Relating to Our Company
We are a recently restructured company with a limited history of recent operations on which investors may assess our performance.
In March 2014, we completed a financial restructuring, following which we did not own any vessels.  During 2015 we acquired our current fleet of eight vessels.  As a result, we have a limited operating history since our financial restructuring, and therefore limited historical financial results upon which you can evaluate our restructured operations.  We cannot assure you that we will be successful in operating our fleet.
Our independent auditors have expressed doubt about our ability to continue as a going concern. The existence of such report may adversely affect our stock price, our business relationships and our ability to raise capital. There is no assurance that we will not receive a similar report for the year ended December 31, 2016.
Our financial statements have been prepared assuming that we will continue as a going concern and do not include any adjustments that might be necessary if we are unable to continue as a going concern. Accordingly, the financial statements did not include any adjustments relating to the recoverability and classification of recorded asset amounts, the amounts and classification of liabilities, or any other adjustments that might result in the event we are unable to continue as a going concern, except for the current classification of debt. However, there are material uncertainties related to events or conditions which raise substantial doubt on our ability to continue as a going concern and, therefore, we may be unable to realize our assets and discharge our liabilities in the normal course of business.
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Our independent registered public accounting firm has issued their opinion with an explanatory paragraph in connection with our audited financial statements included in this annual report that expresses substantial doubt about our ability to continue as a going concern. In 2015 we acquired eight vessels in accordance with our business plan to grow the fleet on a sustainable basis. Based on our cash flow projections, cash on hand and cash provided by operating activities might not be sufficient to cover the liquidity needs that become due in the twelve-month period ending December 31, 2016. We have relied on Jelco Delta Holding Corp., or Jelco, a company affiliated with Claudia Restis, who is also our major shareholder, for further funding during 2015 and 2016, for our vessel acquisitions and general corporate purposes. Given these facts we cannot provide any assurance that we will in fact operate our business profitably, generate sufficient revenue and operating cash flow. Accordingly, there can be no assurance that our independent registered public accounting firm's report on our future financial statements for any future period will not include a similar explanatory paragraph. Ernst & Young's, or any successor's expression of such doubt or our inability to overcome the factors leading to such doubt could have a material adverse effect on our stock price, our business relationships and ability to raise capital and therefore could have a material adverse effect on our business and financial prospects.
If we fail to manage our planned growth properly, we may not be able to successfully expand our market share.
We acquired our fleet during 2015, and we intend to acquire vessels in the future. Our ability to manage our growth will primarily depend on our ability to:
· generate excess cash flow so that we can invest without jeopardizing our ability to cover current and foreseeable working capital needs, including debt service;
· raise equity and obtain required financing for our existing and new operations;
· locate and acquire suitable vessels;
· identify and consummate acquisitions or joint ventures;
· integrate any acquired businesses or vessels successfully with our existing operations;
· hire, train and retain qualified personnel and crew to manage and operate our growing business and fleet;
· enhance our customer base; and
· manage expansion.
Growing any business by acquisition presents numerous risks such as undisclosed liabilities and obligations, difficulty in obtaining additional qualified personnel, managing relationships with customers and suppliers and integrating newly acquired operations into existing infrastructures. We may not be successful in executing our growth plans and we may incur significant additional expenses and losses in connection therewith.
Purchasing and operating secondhand vessels, such as our fleet, may result in increased operating costs and vessel off-hire, which could adversely affect our financial condition and results of operations.
During 2015 we purchased our fleet of secondhand vessels.  Our inspection of these or other secondhand vessels prior to purchase does not provide us with the same knowledge about their condition and the cost of any required or anticipated repairs that we would have had if these vessels had been built for and operated exclusively by us. We have not received in the past, and do not expect to receive in the future, the benefit of warranties on any secondhand vessels we acquire.
As the vessels in our fleet or other secondhand vessels we may acquire age, they may become less fuel efficient and more costly to maintain and will not be as advanced as recently constructed vessels due to improvements in design, technology and engineering.  Rates for cargo insurance, paid by charterers, also increase with the age of a vessel, making older vessels less desirable to charterers.
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Charterers actively discriminate against hiring older vessels. For example, Rightship, the ship vetting service founded by Rio Tinto and BHP-Billiton which has become the major vetting service in the drybulk shipping industry, ranks the suitability of vessels based on a scale of one to five stars. All of our vessels have a five stars rating from Rightship except from the Leadership as she is currently in lay up.  Most major carriers will not charter a vessel that Rightship has vetted with fewer than three stars. Therefore, as our vessels age, we may not be able to operate them profitably during the remainder of their useful lives.
Governmental regulations, safety or other equipment standards related to the age or condition of vessels may require expenditures for alterations, or the addition of new equipment, to our vessels and may restrict the type of activities in which the vessels may engage. As our vessels age, market conditions may not justify those expenditures or enable us to operate our vessels profitably during the remainder of their useful lives.
In addition, unless we maintain cash reserves for vessel replacement, we may be unable to replace the vessels in our fleet upon the expiration of their useful lives. We estimate the useful life of our vessels to be 25 years from the date of initial delivery from the shipyard. Our cash flows and income are dependent on the revenues we earn by chartering our vessels to customers. If we are unable to replace the vessels in our fleet upon the expiration of their useful lives, our business, financial condition and results of operations will be materially adversely affected. Any reserves set aside for vessel replacement would not be available for other cash needs or dividends.
Newbuilding projects are subject to risks that could cause delays.
We may enter into newbuilding contracts in connection with our vessel acquisition strategy.  Newbuilding construction projects are subject to risks of delay inherent in any large construction project from numerous factors, including shortages of equipment, materials or skilled labor, unscheduled delays in the delivery of ordered materials and equipment or shipyard construction, failure of equipment to meet quality and/or performance standards, financial or operating difficulties experienced by equipment vendors or the shipyard, unanticipated actual or purported change orders, inability to obtain required permits or approvals, design or engineering changes and work stoppages and other labor disputes, adverse weather conditions or any other events of force majeure. A shipyard's failure to complete a project on time may result in the delay of revenue from the vessel. Any such failure or delay could have a material adverse effect on our operating results as we will continue to incur other costs to operate our business.
We may acquire additional drybulk carriers, and if those vessels are not delivered on time or are delivered with significant defects, our earnings and financial condition could suffer.
We may acquire additional vessels in the future.  The delivery of these vessels could be delayed or certain events may arise which could result in us not taking delivery of a vessel, such as a total loss of a vessel, a constructive loss of a vessel, or substantial damage to a vessel prior to delivery. A delay in the delivery of any vessels to us, the failure of the contract counterparty to deliver a vessel at all, or us not taking delivery of a vessel could cause us to breach our obligations under a related time charter or could otherwise adversely affect our financial condition and results of operations. In addition, the delivery of any vessel with substantial defects could have similar consequences.
Substantial debt levels could limit our flexibility to obtain additional financing and pursue other business opportunities.
As of December 31, 2015, we had $178.5 million of outstanding bank debts, excluding unamortized financing fees and the shareholder's notes.  Moreover, we anticipate that we may incur significant future indebtedness in connection with the acquisition of additional vessels, although there can be no assurance that we will be successful in identifying such vessels or securing such debt financing. Significant levels of debt could have important consequences to us, including the following:
· our ability to obtain additional financing, if necessary, for working capital, capital expenditures, acquisitions or other purposes may be impaired or such financing may be unavailable on favorable terms;
· we may need to use a substantial portion of our cash from operations to make principal and interest payments on our debt, reducing the funds that would otherwise be available for operations, future business opportunities and any future dividends to our shareholders;
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· our debt level could make us more vulnerable than our competitors with less debt to competitive pressures or a downturn in our business or the economy generally; and
· our debt level may limit our flexibility in responding to changing business and economic conditions.
Our ability to service our indebtedness will depend upon, among other things, our future financial and operating performance, which will be affected by prevailing economic conditions and financial, business, regulatory and other factors, some of which are beyond our control, as well as the interest rates applicable to our outstanding indebtedness. If our operating income is not sufficient to service our indebtedness, we will be forced to take actions, such as reducing or delaying our business activities, acquisitions, investments or capital expenditures, selling assets, restructuring or refinancing our debt or seeking additional equity capital. We may not be able to effect any of these remedies on satisfactory terms, or at all. In addition, a lack of liquidity in the debt and equity markets could hinder our ability to refinance our debt or obtain additional financing on favorable terms in the future.
If LIBOR is volatile, it could affect our profitability, earnings and cash flow.
LIBOR has been volatile in the past, with the spread between LIBOR and the prime lending rate widening significantly at times. Because the interest rates borne by most of our outstanding indebtedness fluctuates with changes in LIBOR, significant changes in LIBOR would have a material effect on the amount of interest payable on our debt, which in turn, could have an adverse effect on our financial condition.
Furthermore, historically interest in most loan agreements in our industry has been based on published LIBOR rates. Recently, however, lenders have insisted on provisions that entitle the lenders, in their discretion, to replace published LIBOR as the base for the interest calculation with their cost-of-funds rate. If we are required to agree to such a provision in future loan agreements, our lending costs could increase significantly, which would have an adverse effect on our profitability, earnings and cash flow.
Our loan agreements contain, and we expect that other future loan agreements will contain, restrictive covenants that may limit our liquidity and corporate activities, which could limit our operational flexibility and have an adverse effect on our financial condition and results of operations.
Our loan agreements contain, and we expect that other future loan agreements will contain, customary covenants and event of default clauses, financial covenants, restrictive covenants and performance requirements, which may affect operational and financial flexibility. Such restrictions could affect, and in many respects limit or prohibit, among other things, our ability to pay dividends, incur additional indebtedness, create liens, sell assets, or engage in mergers or acquisitions. These restrictions could limit our ability to plan for or react to market conditions or meet extraordinary capital needs or otherwise restrict corporate activities. There can be no assurance that such restrictions will not adversely affect our ability to finance our future operations or capital needs.
As a result of these restrictions, we may need to seek permission from our lenders and other financing counterparties in order to engage in some corporate actions. Our lenders' and other financing counterparties' interests may be different from ours and we may not be able to obtain their permission when needed. This may prevent us from taking actions that we believe are in our best interests, which may adversely impact our revenues, results of operations and financial condition.
A failure by us to meet our payment and other obligations, including our financial covenants and any security coverage requirements, could lead to defaults under our financing arrangements. Likewise, a decrease in vessel values or adverse market conditions could cause us to breach our financial covenants or security requirements (the market values of drybulk vessels have generally experienced high volatility). In the event of a default that we cannot remedy, our lenders and other financing counterparties could then accelerate their indebtedness and foreclose on the respective vessels in our fleet. The loss of any of our vessels could have a material adverse effect on our business, results of operations and financial condition.
The failure of our counterparties to meet their obligations under our charter agreements could cause us to suffer losses or otherwise adversely affect our business.
The ability and willingness of each of our counterparties to perform its obligations under charter agreements with us will depend on a number of factors that are beyond our control and may include, among other things, general economic conditions, the condition of the drybulk shipping industry and the overall financial condition of the counterparties. From time to time, those counterparties may account for a significant amount of our chartering activity and revenues.   In addition, in challenging market conditions, there have been reports of charterers, including some of our charterers, renegotiating their charters or defaulting on their obligations under charter agreements and our customers may fail to pay charter hire or attempt to renegotiate charter rates. Should a counterparty fail to honor its obligations under agreements with us, it may be difficult to secure substitute employment for such vessel, and any new charter arrangements we secure in the spot market or on time charters could be at lower rates. If our charterers fail to meet their obligations to us or attempt to renegotiate our charter agreements, we could suffer significant losses, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.
15

Rising crew costs may adversely affect our profits.
Crew costs are expected to be a significant expense for us. Recently, the limited supply of and increased demand for qualified crew, due to the increase in the size of the global shipping fleet, has created upward pressure on crewing costs. Increases in crew costs may adversely affect our profitability.
Our vessels may suffer damage and we may face unexpected repair costs, which could adversely affect our cash flow and financial condition.
If our vessels suffer damage, they may need to be repaired at a shipyard facility. The costs of repairs are unpredictable and can be substantial. The loss of earnings while our vessels are being repaired and repositioned, as well as the actual cost of these repairs, would decrease our earnings and reduce the amount of dividends in the future. We may not have insurance that is sufficient to cover all or any of these costs or losses and may have to pay repair costs not covered by our insurance.
We are exposed to U.S. Dollar and foreign currency fluctuations and devaluations that could harm our reported revenue and results of operations.
We generate all of our revenues and incur the majority of our operating expenses in U.S. Dollars, but we currently incur many of our general and administrative expenses in currencies other than the U.S. Dollar, primarily the Euro. Because such portion of our expenses is incurred in currencies other than the U.S. Dollar, our expenses may from time to time increase relative to our revenues as a result of fluctuations in exchange rates, particularly between the U.S. Dollar and the Euro, which could affect the amount of net income that we report in future periods. We may use financial derivatives to operationally hedge some of our currency exposure. Our use of financial derivatives involves certain risks, including the risk that losses on a hedged position could exceed the nominal amount invested in the instrument and the risk that the counterparty to the derivative transaction may be unable or unwilling to satisfy its contractual obligations, which could have an adverse effect on our results.
We are a holding company, and we depend on the ability of our subsidiaries to distribute funds to us in order to satisfy financial obligations or to pay dividends.
We are a holding company and our subsidiaries, which are all wholly-owned by us either directly or indirectly, conduct all of our operations and own all of our operating assets. We have no significant assets other than the equity interests in our wholly-owned subsidiaries. As a result, our ability to make dividend payments depends on our subsidiaries and their ability to distribute funds to us. The ability of a subsidiary to make these distributions could be affected by the covenants in our loan agreements, a claim or other action by a third party, including a creditor, and the laws of Bermuda, the British Virgin Islands, Hong Kong, Liberia, Malta and the Republic of the Marshall Islands, where our vessel-owning subsidiaries are incorporated, which regulate the payment of dividends by companies. If we are unable to obtain funds from our subsidiaries, we may not be able to satisfy our financial obligations.
We face strong competition, and we may not be able to compete for charters with new entrants or established companies with greater resources, which may adversely affect our results of operations.
We employ our vessels in a highly competitive market that is capital intensive and highly fragmented. Competition arises primarily from other vessel owners, some of whom have substantially greater resources than we do. Competition for the transportation of drybulk cargoes by sea is intense and depends on price, location, size, age, condition and the acceptability of the vessel and its operators to the charterers. Due in part to the highly fragmented market, competitors with greater resources could enter the drybulk shipping industry and operate larger fleets through consolidations or acquisitions and may be able to offer lower charter rates and higher quality vessels than we are able to offer. Although we believe that no single competitor has a dominant position in the markets in which we compete, we are aware that certain competitors may be able to devote greater financial and other resources to their activities than we can, resulting in a significant competitive threat to us. We cannot give assurances that we will continue to compete successfully with our competitors or that these factors will not erode our competitive position in the future.
Due to our limited fleet diversification, adverse developments in the maritime drybulk shipping industry would adversely affect our business, financial condition, and operating results.
We depend primarily on the transportation of drybulk commodities. Our relative lack of diversification could make us vulnerable to adverse developments in the maritime drybulk shipping industry, which would have a significantly greater impact on our business, financial condition and operating results than it would if we maintained more diverse assets or lines of business.
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We may not be able to attract and retain key management personnel and other employees in the shipping industry, which may negatively affect the effectiveness of our management and our results of operations.
Our success will depend to a significant extent upon the abilities and efforts of our management team.  Our success will depend upon our ability to retain key members of our management team and the ability of our management to recruit and hire suitable employees. The loss of any of these individuals could adversely affect our business prospects and financial condition. Difficulty in hiring and retaining personnel could adversely affect our results of operations.
Because we obtain some of our insurance through protection and indemnity associations, we may also be subject to calls or premiums in amounts based not only on our own claim records, but also on the claim records of all other members of the protection and indemnity associations.
We may be subject to calls, or premiums, in amounts based not only on our claim records but also on the claim records of all other members of the protection and indemnity associations through which we receive insurance coverage for tort liability, including pollution-related liability. Our payment of these calls could result in significant expenses to us, which could have a material adverse effect on our business, results of operations and financial condition and our ability to pay dividends in the future.
We may not have adequate insurance to compensate us if we lose the use any of our vessels, which may have a material adverse effect on our financial condition and results of operations.
We have procured hull and machinery insurance and protection and indemnity insurance, which includes environmental damage and pollution insurance coverage and war risk insurance, for our fleet. We do not expect to maintain for all of our vessels insurance against loss of hire, which covers business interruptions that result from the loss of use of a vessel. We may not be adequately insured against all risks.  We may not be able to obtain adequate insurance coverage for our fleet in the future. Our insurers may not pay particular claims. Our insurance policies may contain deductibles for which we will be responsible and limitations and exclusions which may increase our costs or lower our revenue. Moreover, insurers may default on claims they are required to pay. Furthermore, in the future, we may not be able to obtain adequate insurance coverage at reasonable rates for vessels we may acquire in the future. If our insurance is not enough to cover claims that may arise, the deficiency may have a material adverse effect on our financial condition and results of operations.
We may be subject to litigation that, if not resolved in our favor and not sufficiently insured against, could have a material adverse effect on us.
We may be, from time to time, involved in various litigation matters. These matters may include, among other things, contract disputes, personal injury claims, environmental claims or proceedings, asbestos and other toxic tort claims, employment matters, governmental claims for taxes or duties, and other litigation that arises in the ordinary course of our business. Although we intend to defend these matters vigorously, we cannot predict with certainty the outcome or effect of any claim or other litigation matter, and the ultimate outcome of any litigation or the potential costs to resolve them may have a material adverse effect on us. Insurance may not be applicable or sufficient in all cases or insurers may not remain solvent, which may have a material adverse effect on our financial condition.
Failure to comply with the U.S. Foreign Corrupt Practices Act could result in fines, criminal penalties, and an adverse effect on our business.
We operate throughout the world, including countries known to have a reputation for corruption. We are committed to doing business in accordance with applicable anti-corruption laws and have adopted a code of business conduct and ethics which is consistent and in full compliance with the U.S. Foreign Corrupt Practices Act of 1977. We are subject, however, to the risk that we, our affiliated entities or our or their respective officers, directors, employees and agents may take action determined to be in violation of such anti-corruption laws, including the U.S. Foreign Corrupt Practices Act.  Any such violation could result in substantial fines, sanctions, civil and/or criminal penalties, curtailment of operations in certain jurisdictions, and might adversely affect our business, results of operations or financial condition. In addition, actual or alleged violations could damage our reputation and ability to do business. Furthermore, detecting, investigating, and resolving actual or alleged violations is expensive and can consume significant time and attention of our senior management.
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We depend on our commercial and technical managers to operate our business and our business could be harmed if our managers fail to perform their services satisfactorily.
Pursuant to our management agreements, V.Ships provides us with technical, general administrative and support services (including vessel maintenance, crewing, purchasing, shipyard supervision, assistance with regulatory compliance, accounting related to vessels and provisions) and Fidelity provides us with commercial management services for our vessels. Our operational success depends significantly upon V.Ships and Fidelity's satisfactory performance of these services. Our business would be harmed if V.Ships or Fidelity failed to perform these services satisfactorily. In addition, if the management agreements were to be terminated or if its terms were to be altered, our business could be adversely affected, as we may not be able to immediately replace such services, and even if replacement services were immediately available, the terms offered could be less favorable than those under our management agreement.
Our ability to compete for and enter into new period time and spot charters and to expand our relationships with our existing charterers for vessels will depend largely on our relationship with our commercial manager, Fidelity, and its reputation and relationships in the shipping industry. If Fidelity suffers material damage to its reputation or relationships, it may harm our ability to:
· renew existing charters upon their expiration;
· obtain new charters;
· obtain financing on commercially acceptable terms;
· maintain satisfactory relationships with our charterers and suppliers; and
· successfully execute our business strategies.
If our ability to do any of the things described above is impaired, it could have a material adverse effect on our business, financial condition and results of operations.
Our commercial and technical managers are each privately held companies and there is little or no publicly available information about them.
Our commercial and technical managers' ability to render management services will depend in part on their own financial strength. Circumstances beyond our control could impair their financial strength, and because each is a privately held company, information about their financial strength is not available. As a result, we and our shareholders might have little advance warning of financial or other problems affecting them even though their financial or other problems could have a material adverse effect on us.
Management fees will be payable to our technical manager regardless of our profitability, which could have a material adverse effect on our business, financial condition and results of operations.
Pursuant to our technical management agreements with V.Ships, we pay a monthly fee of $9,650 to $10,800 per vessel in exchange for V.Ships providing technical, support and administrative services. The management fees do not cover expenses such as voyage expenses, vessel operating expenses, maintenance expenses, crewing costs, insurance premiums and commissions, which are reimbursed by us to the technical manager. The management fees are payable whether or not our vessels are employed and regardless of our profitability, and we have no ability to require our technical managers to reduce the management fees if our profitability decreases, which could have a material adverse effect on our business, financial condition and results of operations.
The majority of the members of our shipping committee are appointees nominated by Jelco, which could create conflicts of interest detrimental to us.
Our board of directors has created a shipping committee, which has been delegated exclusive authority to consider and vote upon all matters involving shipping and vessel finance, subject to certain limitations. Jelco has the right to appoint two of the three members of the shipping committee and as a result such affiliates will effectively control all decisions with respect to our shipping operations that do not involve a transaction with an affiliate of Jelco, our major shareholder. Mr. Stamatios Tsantanis, Ms. Christina Anagnostara and Mr. Elias Culucundis currently serve on our shipping committee.
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We may be classified as a passive foreign investment company, or PFIC, which could result in adverse U.S. federal income tax consequences to U.S. holders of our common stock.
A foreign corporation will be treated as a "passive foreign investment company," or PFIC, for U.S. federal income tax purposes if either (1) at least 75% of its gross income for any taxable year consists of certain types of "passive income" or (2) at least 50% of the average value of the corporation's assets produce or are held for the production of those types of "passive income." For purposes of these tests, "passive income" includes dividends, interest, and gains from the sale or exchange of investment property and rents and royalties other than rents and royalties which are received from unrelated parties in connection with the active conduct of a trade or business. For purposes of these tests, income derived from the performance of services does not constitute "passive income." U.S. shareholders of a PFIC are subject to a disadvantageous U.S. federal income tax regime with respect to the income derived by the PFIC, the distributions they receive from the PFIC and the gain, if any, they derive from the sale or other disposition of their shares in the PFIC.
Based upon our current and anticipated method of operations, we do not believe that we should be a PFIC with respect to any taxable year. In this regard, we intend to treat our gross income from time charters as active services income, rather than rental income. Accordingly, our income from our time chartering activities should not constitute "passive income," and the assets that we own and operate in connection with the production of that income should not constitute passive asset. There is substantial legal authority supporting this position consisting of case law and U.S. Internal Revenue Service, or IRS, pronouncements concerning the characterization of income derived from time charters and voyage charters as services income for other tax purposes. However, it should be noted that there is also authority which characterizes time charter income as rental income rather than services income for other tax purposes. Accordingly, no assurance can be given that the IRS or a court of law will accept this position, and there is a risk that the IRS or a court of law could determine that we are a PFIC. Moreover, no assurance can be given that we would not constitute a PFIC for any future taxable year if the nature and extent of our operations changed.
If the IRS were to find that we are or have been a PFIC for any taxable year, our U.S. shareholders would face adverse U.S. federal income tax consequences and certain information reporting requirements. Under the PFIC rules, unless those shareholders make an election available under the United States Internal Revenue Code of 1986 as amended, or the Code (which election could itself have adverse consequences for such shareholders, such shareholders would be liable to pay U.S. federal income tax at the then prevailing income tax rates on ordinary income plus interest upon excess distributions and upon any gain from the disposition of their shares of our common stock, as if the excess distribution or gain had been recognized ratably over the shareholder's holding period of the shares of our common stock. See Item 10.E "Taxation – U.S. Federal Income Tax Consequences – U.S. Federal Income Taxation of U.S. Holders - Passive Foreign Investment Company Rules" for a more comprehensive discussion of the U.S. federal income tax consequences to U.S. shareholders if we are treated as a PFIC.
We may have to pay tax on U.S. source income, which would reduce our earnings.
 Under the Code, 50% of the gross shipping income of a vessel owning or chartering corporation, such as us and our subsidiaries, that is attributable to transportation that begins or ends, but that does not both begin and end, in the United States, exclusive of certain U.S. territories and possessions, ("U.S. source gross shipping income") may be subject to a 4% U.S. federal income tax without allowance for deduction, unless that corporation qualifies for exemption from tax under Section 883 of the Code and the applicable Treasury Regulations promulgated thereunder.
For our 2015 taxable year, we did not have any U.S. source gross shipping income and consequently we were not subject to the 4% U.S. federal income tax.
We may, however, realize U.S. source gross shipping income in our 2016 or subsequent taxable year. If we realize U.S. source gross shipping income in our 2016 or subsequently taxable year, we may qualify for exemption from the 4% tax under Section 883 for such taxable year only if we satisfy one of the ownership tests described in Item 10.E "Taxation – U.S. Federal Income Tax Consequences – Exemption of Operating Income from United States Federal Income Taxation" for such taxable year. The ownership tests would require us, inter alia, to establish or substantiate sufficient ownership of our common shares by one or more "qualified" shareholders. These substantiation requirements are onerous and therefore there can be no assurance that we will be able to satisfy them.
Due to the factual nature of the issues involved, we can give no assurances on the tax-exempt status of ourselves or that of any of our subsidiaries for our 2016 or subsequent taxable year. If we or our subsidiaries are not entitled to exemption under Section 883 for any such taxable year, we or our subsidiaries could be subject for those years to a 4% U.S. federal income tax on any shipping income such companies derived during the year that is attributable to the transport of cargoes to or from the United States. The imposition of this taxation would have a negative effect on our business and would result in decreased earnings available for distribution to our shareholders.
A cyber-attack could materially disrupt our business.

We rely on information technology systems and networks in our operations and administration of our business. Our business operations could be targeted by individuals or groups seeking to sabotage or disrupt our information technology systems and networks, or to steal data. A successful cyber-attack could materially disrupt our operations, including the safety of our operations, or lead to unauthorized release of information or alteration of information in our systems. Any such attack or other breach of our information technology systems could have a material adverse effect on our business and results of operations.
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Risks Relating to Our Common Stock
The market price of our common stock has been and may in the future be subject to significant fluctuations.
The market price of our common stock has been and may in the future be subject to significant fluctuations as a result of many factors, some of which are beyond our control. Among the factors that have in the past and could in the future affect our stock price are:
· quarterly variations in our results of operations;
· changes in market valuations of similar companies and stock market price and volume fluctuations generally;
· changes in earnings estimates or the publication of research reports by analysts;
· speculation in the press or investment community about our business or the shipping industry generally;
· strategic actions by us or our competitors such as acquisitions or restructurings;
· the thin trading market for our common stock, which makes it somewhat illiquid;
· the ineligibility of our common stock to be the subject of margin loans from time to time because of a low market price;
· regulatory developments;
· additions or departures of key personnel;
· general market conditions; and
· domestic and international economic, market and currency factors unrelated to our performance.
The stock markets in general, and the markets for drybulk shipping and shipping stocks in particular, have experienced extreme volatility that has sometimes been unrelated to the operating performance of individual companies. These broad market fluctuations may adversely affect the trading price of our common stock.
The declaration and payment of dividends will always be subject to the discretion of our board of directors and will depend on a number of factors. Our board of directors may not declare dividends in the future.
The declaration, timing and amount of any dividend is subject to the discretion of our board of directors and will be dependent upon our earnings, financial condition, market prospects, capital expenditure requirements, investment opportunities , restrictions in our loan agreements, the provisions of Marshall Islands law affecting the payment of dividends to shareholders, overall market conditions and other factors . Our board of directors may not declare dividends in the future.
Marshall Islands law generally prohibits the payment of dividends if the company is insolvent or would be rendered insolvent upon payment of such dividend and dividends may be declared and paid out of our operating surplus. Dividends may also be declared or paid out of net profits for the fiscal year in which the dividend is declared and for the preceding fiscal year. We may be unable to pay dividends in the anticipated amounts or at all.
Anti-takeover provisions in our amended and restated articles of incorporation and by-laws could make it difficult for shareholders to replace or remove our current board of directors or could have the effect of discouraging, delaying or preventing a merger or acquisition, which could adversely affect the market price of our common stock.
Several provisions of our amended and restated articles of incorporation and by-laws could make it difficult for shareholders to change the composition of our board of directors in any one year, preventing them from changing the composition of our management. In addition, the same provisions may discourage, delay or prevent a merger or acquisition that shareholders may consider favorable.
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These provisions include those that:
· authorize our board of directors to issue "blank check" preferred stock without shareholder approval;
· provide for a classified board of directors with staggered, three-year terms;
· require a super-majority vote in order to amend the provisions regarding our classified board of directors with staggered, three-year terms;
· permit the removal of any director from office at any time, with or without cause, at the request of the shareholder group entitled to designate such director;
· allow vacancies on the board of directors to be filled by the shareholder group entitled to name the director whose resignation or removal led to the occurrence of the vacancy; and
· prevent our board of directors from dissolving the shipping committee or altering the duties or composition of the shipping committee without an affirmative vote of not less than 80% of the board of directors.
These anti-takeover provisions could substantially impede the ability of shareholders to benefit from a change in control and, as a result, may adversely affect the market price of our common stock and your ability to realize any potential change of control premium.
Issuance of preferred stock may adversely affect the voting power of our shareholders and have the effect of discouraging, delaying or preventing a merger or acquisition, which could adversely affect the market price of our common stock.
Our amended and restated articles of incorporation currently authorize our Board to issue preferred shares in one or more series and to determine the rights, preferences, privileges and restrictions, with respect to, among other things, dividends, conversion, voting, redemption, liquidation and the number of shares constituting any series subject to prior shareholders' approval. If our Board determines to issue preferred shares, such issuance may discourage, delay or prevent a merger or acquisition that shareholders may consider favorable. The issuance of preferred shares with voting and conversion rights may also adversely affect the voting power of the holders of common shares. This could substantially impede the ability of public shareholders to benefit from a change in control and, as a result, may adversely affect the market price of our common stock and your ability to realize any potential change of control premium.
Jelco and Comet Shipholding Inc., are able to control the outcome of all matters requiring a shareholder vote, and their interests could conflict with the interests of our other shareholders.
Based on documents publicly filed with the U.S. Securities and Exchange Commission, or the Commission, Jelco and Comet Shipholding Inc., or Comet, both companies affiliated with Claudia Restis, who is also our principal shareholder, or our Sponsor, own approximately 85.9% of our outstanding common stock as of April 20, 2016. As a result, they will be able to control the outcome of all matters requiring a shareholder vote.   This concentration of ownership may delay, deter or prevent acts that would be favored by our other shareholders or deprive shareholders of an opportunity to receive a premium for their shares as part of a sale of our business, and it is possible that the interests of our Sponsor may in some cases conflict with our interests and the interests of our other holders of shares. For example, conflicts of interest may arise between us, on one hand, and our Sponsor or affiliated entities, on the other hand, which may result in the transactions on terms not determined by market forces. Any such conflicts of interest could adversely affect our business, financial condition and results of operations, and the trading price of our common shares. In addition, this concentration of share ownership may adversely affect the trading price of our shares because investors may perceive disadvantages in owning shares in a company with controlling shareholders.
We may issue additional common shares or other equity securities without stockholder approval, which would dilute our stockholder's ownership interests and may depress the market price of our common stock.

We may issue additional common shares or other equity securities of equal or senior rank in the future without shareholder approval in connection with, among other things, future vessel acquisitions, the repayment of outstanding indebtedness, and the conversion of any convertible financial instruments we may issue in the future.
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Our issuance of additional common shares or other equity securities of equal or senior rank in these situations would have the following effects:
· our existing shareholders' proportionate ownership interest in us will decrease;
· the proportionate amount of cash available for dividends payable on our common shares may decrease;
· the relative voting strength of each previously outstanding common share may be diminished; and
· the market price of our common shares may decline.
In addition, we may issue additional common shares upon any conversion of our outstanding convertible promissory notes.  Our issuance of additional common shares in that instance would cause the proportionate ownership interest in us of our existing shareholders, other than the converting noteholder, to decrease; the relative voting strength of each previously outstanding common share held by our existing shareholders, other than the converting noteholder, to decrease; and the market price of our common shares could decline.
We are incorporated in the Republic of the Marshall Islands, which does not have a well-developed body of corporate law, which may negatively affect the ability of shareholders to protect their interests.
Our corporate affairs are governed by our amended and restated articles of incorporation, our amended and restated by-laws and by the Marshall Islands Business Corporations Act, or the BCA. The provisions of the BCA resemble provisions of the corporation laws of a number of states in the United States. However, there have been few judicial cases in the Republic of the Marshall Islands interpreting the BCA. The rights and fiduciary responsibilities of directors under the laws of the Republic of the Marshall Islands are not as clearly established as the rights and fiduciary responsibilities of directors under statutes or judicial precedent in existence in certain U.S. jurisdictions. Shareholder rights may differ as well. While the BCA does specifically incorporate the non-statutory law, or judicial case law, of the State of Delaware and other states with substantially similar legislative provisions, shareholders may have more difficulty in protecting their interests in the face of actions by the management, directors or controlling shareholders than would shareholders of a corporation incorporated in a U.S. jurisdiction.
ITEM 4.
 
INFORMATION ON THE COMPANY
     
A.             History and Development of the Company
Incorporation of Seanergy and Seanergy Maritime
We were incorporated under the laws of the Republic of the Marshall Islands, pursuant to the Marshall Islands BCA, on January 4, 2008, originally under the name Seanergy Merger Corp. We changed our name to Seanergy Maritime Holdings Corp. on July 11, 2008. Our executive offices are located at 16 Grigoriou Lambraki Street, 2 nd Floor, 166 74 Glyfada, Athens, Greece and our telephone number is + 30 210 8913507.
Restructuring
In August 2012, we began restructuring discussions with our former lenders to finalize the satisfaction and release of our obligations under certain of our former loan facility agreements and the amendment of the terms of certain of our loan facility agreements. Between January 2012 and March 2014, we sold all 20 of our former vessels, in some cases by transferring ownership of certain of our vessel-owning subsidiaries to third parties nominated by our former lenders in connection with our restructuring.  In March 2014, we completed our restructuring, following which we did not own any vessels and did not have any long-term debt obligations.
Sale of MCS subsidiaries
On January 29, 2013, we closed the sale of the four MCS subsidiaries which owned the vessels Fiesta , Pacific Fantasy , Pacific Fighter and Clipper Freeway , financed under a facility agreement with DVB Bank AG, or DVB, to a third party entity nominated by DVB. In exchange for the sale, $31.9 million of outstanding debt as of December 31, 2012 and all the liabilities and obligations under our former facility agreement with DVB were discharged and the guarantee provided by MCS was fully released. In connection with the sale of these subsidiaries, our board of directors obtained a fairness opinion from an independent third party.
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On July 19, 2013, MCS sold its 100% ownership interest in the three subsidiaries that owned the Handysize drybulk carriers African Joy , African Glory and Asian Grace . The buyer was a third-party nominee of the lenders under our former senior and the subordinated credit facility with United Overseas Bank Limited, or UOB. MCS had provided a guarantee under this facility.  In exchange for the sale, $39.5 million of outstanding debt, accrued interest and swap liabilities were discharged. In addition, the guarantee provided by MCS was released. In connection with the sale of these subsidiaries, our board of directors obtained a fairness opinion from an independent third party.
Sale of African Oryx
On April 10, 2013, we sold the African Oryx . Gross proceeds amounted to $4.1 million and were used to repay debt.
Sale of Piraeus Bank vessels
On February 12, 2014, we entered into a delivery and settlement agreement with Piraeus Bank for the sale of our four remaining vessels, to a nominee of the lender, in exchange for a nominal cash consideration and full satisfaction of the underlying loan. During March 2014 we sold the Davakis G ., Hamburg Max , Bremen Max and Delos Ranger . Following the closing of the transaction, approximately $146 million of outstanding debt and accrued interest were discharged and the guarantee provided by the Company was released. Furthermore, shortly prior to the closing, the Company entered into an agreement with its former technical management company, EST, and its former commercial manager, Safbulk Pty, providing a full and complete release of all their claims against the Company upon the completion of the delivery of the last four remaining vessels and settlement agreement with Piraeus Bank. The transaction was completed successfully on March 11, 2014 and total liabilities amounting to $9.8 million were released.  Following the transaction, our restructuring was complete.
Share Purchase Agreements
On March 12, 2015 we entered into a share purchase agreements with Jelco and Stamatios Tsantanis, our Chairman, Chief Executive Officer and Interim Chief Financial Officer, under which we sold 5,000,100 of our common shares to Jelco for $4.5 million and 333,400 of our common shares to Mr. Tsantanis for $0.3 million. As part of the transaction, the purchasers received customary registration rights.
On September 7, 2015, the Company entered into a share purchase agreement with Jelco under which we agreed to sell Jelco 10,022,240 of our common shares in three tranches for $9.0 million, or the Share Purchase Agreement. The common shares were sold at a price of $0.90 per share. On September 11, 2015, the first tranche of 3,889,980 common shares was sold for $3.5 million. On September 29, 2015, the second tranche of 2,655,740 common shares was sold for $2.4 million. On October 21, 2015, the third tranche of 3,476,520 common shares was sold for $3.1 million.  As part of the transaction, the purchaser received customary registration rights.
Acquisition of Eight Vessels
On March 19, 2015, we acquired a 2001 Capesize, 171,199 DWT vessel, which was renamed M/V Leadership , from an unaffiliated third party. The acquisition of the vessel was financed with proceeds from (i) a convertible promissory note dated March 12, 2015 for $4 million issued to Jelco, (ii) a loan agreement dated March 06, 2015 for $8.75 million with Alpha Bank A.E., or Alpha Bank, and (iii) a share purchase agreement dated March 12, 2015 with Jelco for the issuance of 5,000,100 shares of our common stock in exchange for $4.5 million. This acquisition was made pursuant to of a memorandum of agreement between our vessel-owning subsidiary and the seller, dated December 23, 2014.
On August 6, 2015, we entered into a purchase agreement and seven memoranda of agreement with entities affiliated with certain of our principal shareholders to acquire seven secondhand drybulk vessels, consisting of five Capesize and two Supramax vessels, for an aggregate purchase price of $183.4 million. These included all of the vessels in our current fleet other than Leadership .  We took delivery of the seven vessels between September and December 2015.   The acquisition costs of the seven vessels were funded with proceeds from a $44.4 million senior secured loan facility with HSH Nordbank AG to finance the acquisition of the Geniuship and Gloriuship , a $52.7 million secured term loan facility with Unicredit Bank AG to partly finance the acquisition of the Premiership , Gladiatorship and Guardianship , a $33.8 million secured loan facility with Alpha Bank A.E. to partly finance the acquisition of the Squireship , a $39.4 million secured term loan facility with Natixis to partly finance the acquisition of the Championship , the Share Purchase Agreement and an unsecured revolving convertible promissory note issued to Jelco initially for an amount up to $6.8 million.  For more information regarding our current loan facilities and convertible promissory notes, please see "Item 5. Operating and Financial Review and Prospects–B. Liquidity and Capital Resources."
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Reverse Stock Split
On January 7, 2016, we effected a 1-for-5 reverse split of our common stock, which was approved at a special meeting of our shareholders on September 16, 2014 . The reverse stock split became effective and the common stock began trading on a split-adjusted basis on the NASDAQ Capital Market at the opening of trading on January 8, 2016. When the reverse stock split became effective, every five shares of the our issued and outstanding common stock was automatically combined into one issued and outstanding share of common stock without any change in the par value per share or the total number of authorized shares. This reduced the number of outstanding shares of our common stock from 97,612,971 shares on January 7, 2016, to 19,522,413 shares on January 8, 2016, after adjusting for fractional shares.  On January 27, 2016, we received a letter from Nasdaq confirming that we had regained compliance with Nasdaq's minimum bid price requirement.
B.             Business Overview
We are an international shipping company specializing in the worldwide seaborne transportation of drybulk commodities. We currently own six Capesize and two Supramax vessels.
We believe we have established a reputation in the international ocean transport industry for operating and maintaining vessels with high standards of performance, reliability and safety. We have assembled a management team comprised of executives who have extensive experience operating large and diversified fleet, and who have strong ties to a number of international charterers.
Our Former Fleet
In August 2012, we began restructuring discussions with our former lenders, and in connection with our restructuring we sold all 20 of our former vessels, in some cases by transferring ownership of certain of our vessel-owning subsidiaries to third parties nominated by our former lenders.  In March 2014, we completed our restructuring, following which we did not own any vessels.
Our Current Fleet
During 2015, we acquired the eight vessels in our current fleet.  The following table lists the vessels in our fleet as of April 20, 2016:
Vessel Name
 
Year Built
 
Dwt
 
Flag
 
Type of Employment
 
Leadership
 
2001
 
171,199
 
BA
 
N/A*
Gloriuship
 
2004
 
171,314
 
MI
 
Spot
Geniuship
 
2010
 
170,057
 
MI
 
Spot
Premiership
 
2010
 
170,024
 
IoM
 
Spot
Squireship
 
2010
 
170,018
 
LIB
 
Spot
Championship
 
2011
 
179,238
 
LIB
 
Spot
Gladiatorship
 
2010
 
56,819
 
BA
 
Spot
Guardianship
 
2011
 
56,884
 
MI
 
Spot

* This vessel has been in lay up since March 20, 2016. Management's decision to lay up the vessel was based on the fact that current charter rates, which are at depressed levels, could not recoup the capital expenditure of this vessel's special survey that was due in April 2016.

Key to Flags:
BA – Bahamas, IoM – Isle of Man, LIB – Liberia, MI – Marshall Islands

Our Business Strategy
We currently own six Capesize and two Supramax vessels. We intend to continue to review the market in order to identify potential acquisition targets which will be accretive to our earnings per share. Our acquisition strategy focuses on newbuilding or secondhand drybulk carriers, although we may acquire vessels in other sectors which we believe offer attractive investment opportunities.
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Management of Our Fleet
We manage our vessel's operations, insurances and bunkering and have the general supervision of our third-party technical and commercial managers.  
V.Ships, an independent third party, provides technical management for our vessels that includes general administrative and support services necessary for the operation of such vessel, such as crewing and other technical management, accounting related to vessels, provisions, and, subject to our instructions, operation and sale and purchase of vessels.  Pursuant to our management agreements with V.Ships, we pay a monthly fee of $9,650 to $10,800 per vessel in exchange for V.Ships providing these technical, support and administrative services. The management fees do not cover expenses such as voyage expenses, vessel operating expenses, maintenance expenses, crewing costs, insurance premiums and commissions, which are reimbursed by us to V.Ships. Pursuant to our technical management agreement with V.Ships for the vessel Leadership , if the vessel is laid up for a period of more than two months, we are not obligated to pay a management fee to V.Ships for the period exceeding the two months until we give written notice to re-activate the vessel.  However, we are obligated to reimburse V.Ships for any costs that have been approved by us that may arise while Leadership is laid up following the two months. The technical management agreements are for an indefinite period until terminated by either party, giving the other notice in writing, in which event the applicable agreement shall terminate after one month from the date upon which such notice is received.
Seanergy Management Corp., or Seanergy Management, one of our wholly-owned subsidiaries, has entered into a commercial management agreement with Fidelity, an independent third party, pursuant to which Fidelity provides commercial management services for all of the vessels in our fleet. Under the commercial management agreement, we have agreed to reimburse Fidelity for all reasonable running and/or out of pocket expenses, including but not limited to, telephone, fax, stationary and printing expenses, as well as any pre-approved travelling expenses. In addition, we have agreed to  pay commission fees to Fidelity equal to 0.5% calculated on the collected gross hire/freight/demurrage payable when the relevant hire/freight/demurrage are collected.  The commercial management agreement may be terminated by either party upon giving one month prior written notice to the other party.
Employment of Our Fleet
Our vessels are chartered on the spot charter market, either through trip charter contracts or voyage charter contracts.  A spot market voyage charter is generally a contract to carry a specific cargo from a load port to a discharge port for an agreed freight per ton of cargo or a specified total amount. Under spot market voyage charters, we pay specific voyage expenses such as port, canal and bunker costs. Spot charter rates are volatile and fluctuate on a seasonal and year-to-year basis.  Fluctuations derive from imbalances in the availability of cargoes for shipment and the number of vessels available at any given time to transport these cargoes. Vessels operating in the spot market generate revenue that is less predictable than those under time charters, but may enable us to capture increased profit margins during periods of improvements in drybulk vessel charter rates. Downturns in the drybulk industry would result in a reduction in profit margins.
In the future, our vessels may be employed on period time charters.  Period time charters provide a fixed and stable cash flow for a known period of time. Period time charters also mitigate in part the volatility and seasonality of the spot market business, which is generally weaker in the second and third quarters of the year.  In the future, we may opportunistically look to employ our vessels under time charter contracts should rates become more attractive.
Shipping Committee
We have established a shipping committee. The purpose of the shipping committee is to consider and vote upon all matters involving shipping and vessel finance in order to accelerate the pace of our decision making in respect of shipping business opportunities, such as the acquisition of vessels or companies. The shipping industry often demands very prompt review and decision-making with respect to business opportunities. In recognition of this, and in order to best utilize the experience and skills that our directors bring to us, our board of directors has delegated all such matters to the shipping committee. Transactions that involve the issuance of our securities or transactions that involve a related party, however, shall not be delegated to the shipping committee but instead shall be considered by the entire board of directors. The shipping committee consists of three directors. In accordance with the Amended and Restated Charter of the Shipping Committee, two of the directors on the shipping committee are nominated by Jelco and one of the directors on the shipping committee is nominated by a majority of our board of directors and is an independent member of the board of directors. The members of the shipping committee are Mr. Stamatios Tsantanis and Ms. Christina Anagnostara, who are Jelco's nominees, and Mr. Elias Culucundis, who is the Board's nominee.
In order to assure the continued existence of the shipping committee, our board of directors has agreed that the shipping committee may not be dissolved and that the duties or composition of the shipping committee may not be altered without the affirmative vote of not less than 80% of our board of directors. In addition, the duties of our chief executive officer, who is currently Mr. Tsantanis, may not be altered without a similar vote. These duties and powers include voting the shares of stock that Seanergy owns in its subsidiaries. In addition to these agreements, we have amended certain provisions in its articles of incorporation and by-laws to incorporate these requirements.
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As a result of these various provisions, in general, all shipping- related decisions will be made by Jelco's appointees to our board of directors unless 80% of the board members vote to change the duties or composition of the shipping committee.
The Drybulk Shipping Industry
The global drybulk carrier fleet is divided into four categories based on a vessel's carrying capacity. These categories are:
Capesize. Capesize vessels have a carrying capacity of exceeding 100,000 dwt. Only the largest ports around the world possess the infrastructure to accommodate vessels of this size. Capesize vessels are primarily used to transport iron ore or coal and, to a much lesser extent, grains, primarily on long-haul routes.
Panamax . Panamax vessels have a carrying capacity of between 60,000 and 100,000 dwt. These vessels are designed to meet the physical restrictions of the Panama Canal locks (hence their name "Panamax" — the largest vessels able to transit the Panama Canal, making them more versatile than larger vessels). These vessels carry coal, grains, and, to a lesser extent, minerals such as bauxite/alumina and phosphate rock.
Handymax/Supramax . Handymax vessels have a carrying capacity of between 30,000 and 60,000 dwt. These vessels operate on a large number of geographically dispersed global trade routes, carrying primarily grains and minor bulks. The standard vessels are usually built with 25-30 ton cargo gear, enabling them to discharge cargo where grabs are required (particularly industrial minerals), and to conduct cargo operations in countries and ports with limited infrastructure. This type of vessel offers good trading flexibility and can, therefore, be used in a wide variety of bulk and neobulk trades, such as steel products. Supramax are a sub-category of this category typically having a cargo carrying capacity of between 50,000 and 60,000 dwt.
Handysize . Handysize vessels have a carrying capacity of up to 30,000 dwt. These vessels are almost exclusively carrying minor bulk cargo. Increasingly, vessels of this type operate on regional trading routes, and may serve as trans-shipment feeders for larger vessels. Handysize vessels are well suited for small ports with length and draft restrictions. Their cargo gear enables them to service ports lacking the infrastructure for cargo loading and discharging.
The supply of drybulk carriers is dependent on the delivery of new vessels and the removal of vessels from the global fleet, either through scrapping or loss. The level of scrapping activity is generally a function of scrapping prices in relation to current and prospective charter market conditions, as well as operating, repair and survey costs.
The demand for drybulk carrier capacity is determined by the underlying demand for commodities transported in drybulk carriers, which in turn is influenced by trends in the global economy. Demand for drybulk carrier capacity is also affected by the operating efficiency of the global fleet, with port congestion, which has been a feature of the market since 2004, absorbing tonnage and therefore leading to a tighter balance between supply and demand. In evaluating demand factors for drybulk carrier capacity, we believe that drybulk carriers can be the most versatile element of the global shipping fleets in terms of employment alternatives.
Charter Hire Rates
Charter hire rates fluctuate by varying degrees among drybulk carrier size categories. The volume and pattern of trade in a small number of commodities (major bulks) affect demand for larger vessels. Therefore, charter rates and vessel values of larger vessels often show greater volatility. Conversely, trade in a greater number of commodities (minor bulks) drives demand for smaller drybulk carriers. Accordingly, charter rates and vessel values for those vessels are subject to less volatility.
Charter hire rates paid for drybulk carriers are primarily a function of the underlying balance between vessel supply and demand, although at times other factors may play a role. Furthermore, the pattern seen in charter rates is broadly mirrored across the different charter types and the different drybulk carrier categories. However, because demand for larger drybulk vessels is affected by the volume and pattern of trade in a relatively small number of commodities, charter hire rates (and vessel values) of larger ships tend to be more volatile than those for smaller vessels.
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In the time charter market, rates vary depending on the length of the charter period and vessel specific factors such as age, speed and fuel consumption.
In the voyage charter market, rates are influenced by cargo size, commodity, port dues and canal transit fees, as well as commencement and termination regions. In general, a larger cargo size is quoted at a lower rate per ton than a smaller cargo size. Routes with costly ports or canals generally command higher rates than routes with low port dues and no canals to transit. Voyages with a load port within a region that includes ports where vessels usually discharge cargo or a discharge port within a region with ports where vessels load cargo also are generally quoted at lower rates, because such voyages generally increase vessel utilization by reducing the unloaded portion (or ballast leg) that is included in the calculation of the return charter to a loading area.
Within the drybulk shipping industry, the charter hire rate references most likely to be monitored are the freight rate indices issued by the Baltic Exchange. These references are based on actual charter hire rates under charters entered into by market participants as well as daily assessments provided to the Baltic Exchange by a panel of major shipbrokers.
Competition
We operate in markets that are highly competitive and based primarily on supply and demand. We compete for charters on the basis of price, vessel location, size, age and condition of the vessel, as well as on its reputation. Fidelity negotiates the terms of our charters (whether voyage charters, period time charters, bareboat charters or pools) based on market conditions. We compete primarily with other owners of drybulk carriers, many of which may have more resources than us and may operate vessels that are newer, and therefore more attractive to charterers than vessels we may operate. Ownership of drybulk carriers is highly fragmented and is divided among publicly listed companies, state controlled companies and independent drybulk carrier owners. We compete primarily with owners of drybulk vessels in the Supramax and Capesize class sizes. Some of our publicly listed competitors include Diana Shipping Inc. (NYSE:DSX), Genco Shipping & Trading Limited (NYSE: GNK) Safe Bulkers Inc. (NYSE: SB), Scorpio Bulkers Inc. (NYSE: SALT), Star Bulk Carriers Corp. (NASDAQ: SBLK).
Customers
Our customers include national, regional and international companies, such as Rio Tinto, BHP Billiton and Fortescue. Customers individually accounting for more than 10% of our revenues during the years ended December 31, 2015, 2014 and 2013 were:
Customer
 
2015
 
2014
 
2013
A
 
47%
 
-
 
-
B
 
15%
 
-
 
-
C
 
12%
 
-
 
-
 D
 
10%
 
-
 
-
E
 
-
 
59%
 
18%
F
 
-
 
29%
 
-
G
 
-
 
-
 
16%
H
 
-
 
-
 
12%
I
 
-
 
-
 
10%
Total
 
84%
 
88%
 
56%
 
Seasonality
Coal, iron ore and grains, which are the major bulks of the drybulk shipping industry, are somewhat seasonal in nature. The energy markets primarily affect the demand for coal, with increases during hot summer periods when air conditioning and refrigeration require more electricity and towards the end of the calendar year in anticipation of the forthcoming winter period. The demand for iron ore tends to decline in the summer months because many of the major steel users, such as automobile makers, reduce their level of production significantly during the summer holidays. Grains are completely seasonal as they are driven by the harvest within a climate zone. Because three of the five largest grain producers (the United States of America, Canada and the European Union) are located in the northern hemisphere and the other two (Argentina and Australia) are located in the southern hemisphere, harvests occur throughout the year and grains require drybulk shipping accordingly.
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Environmental and Other Regulations
Government regulation significantly affects the ownership and operation of the vessels we may acquire. We are subject to international conventions and treaties, national, state and local laws and regulations in force in the countries in which the vessels we may acquire may operate or are registered relating to safety and health and environmental protection including the storage, handling, emission, transportation and discharge of hazardous and non-hazardous materials, and the remediation of contamination and liability for damage to natural resources. Compliance with such laws, regulations and other requirements entails significant expense, including vessel modifications and implementation of certain operating procedures.
A variety of government and private entities subject vessels to both scheduled and unscheduled inspections. These entities include the local port authorities (United States Coast Guard, harbor master or equivalent), classification societies, flag state administrations (country of registry) and charterers, particularly terminal operators. Certain of these entities require us to obtain permits, licenses, certificates or approvals for the operation of the vessels. Failure to maintain necessary permits, licenses, certificates or approvals could require us to incur substantial costs or temporarily suspend the operation of one or more of the vessels we may acquire.
We believe that the heightened level of environmental and operational safety concerns among insurance underwriters, regulators and charterers have led to greater inspection and safety requirements on all vessels and may accelerate the scrapping of older vessels throughout the drybulk shipping industry. Increasing environmental concerns have created a demand for vessels that conform to the stricter environmental standards. We are required to maintain operating standards for all of the vessels we may acquire that emphasize operational safety, quality maintenance, continuous training of our officers and crews and compliance with United States and international regulations. However, because such laws and regulations are frequently changed and may impose increasingly stricter requirements, we cannot predict the ultimate cost of complying with these requirements, or the impact of these requirements on the resale value or useful lives of the vessels we may acquire. In addition, a future serious marine incident that causes significant adverse environmental impact, such as the 2010 Deepwater Horizon   oil spill, could result in additional legislation or regulation that could negatively affect our profitability.
International Maritime Organization
The United Nations' International Maritime Organization (the "IMO") has adopted the International Convention for the Prevention of Pollution from Ships, 1973, as modified by the Protocol of 1978 relating thereto (collectively referred to as MARPOL 73/78 and herein as "MARPOL"). MARPOL entered into force on October 2, 1983. It has been adopted by over 150 nations, therefore it may include jurisdictions in which the vessels we may acquire operate. MARPOL sets forth pollution-prevention requirements applicable to drybulk carriers, among other vessels, and is broken into six Annexes, each of which regulates a different source of pollution. Annex I relates to oil leakage or spilling; Annexes II and III relate to harmful substances carried, in bulk, in liquid or packaged form, respectively; Annexes IV and V relate to sewage and garbage management, respectively; and Annex VI, lastly, relates to air emissions. Annex VI was separately adopted by the IMO in September of 1997.
Air Emissions
In September of 1997, the IMO adopted Annex VI to MARPOL to address air pollution. Effective May 2005, Annex VI sets limits on nitrogen oxide emissions from ships whose diesel engines were constructed (or underwent major conversions) on or after January 1, 2000. It also prohibits "deliberate emissions" of "ozone depleting substances," defined to include certain halons and chlorofluorocarbons. "Deliberate emissions" are not limited to times when the ship is at sea; they can for example include discharges occurring in the course of the ship's repair and maintenance. Emissions of "volatile organic compounds" from certain tankers, and the shipboard incineration (from incinerators installed after January 1, 2000) of certain substances (such as polychlorinated biphenyls (PCBs)) are also prohibited. Annex VI also includes a global cap on the sulfur content of fuel oil and allows for special areas to be established with more stringent controls on sulphur emissions, known as Emission Control Areas ("ECAs") (see below).
The IMO's Maritime Environment Protection Committee, or MEPC, adopted amendments to Annex VI on October 10, 2008, which entered into force on July 1, 2010. The amended Annex VI seeks to further reduce air pollution by, among other things, implementing a progressive reduction of the amount of sulphur contained in any fuel oil used on board ships. As of January 1, 2012, the amended Annex VI requires that fuel oil contain no more than 3.50% sulfur (from the previous cap of 4.50%). By January 1, 2020, sulfur content must not exceed 0.50%, subject to a feasibility review to be completed no later than 2018.
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Sulfur content standards are even stricter within certain "Emission Control Areas" ("ECAs"). As of July 1, 2010, ships operating within an ECA were not permitted to use fuel with sulfur content in excess of 1.0% (from 1.50%), which was further reduced to 0.10% on January 1, 2015. Amended Annex VI establishes procedures for designating new ECAs. Currently, the Baltic Sea and the North Sea have been so designated. Effective August 1, 2012, certain coastal areas of North America were also designated ECAs. Effective January 1, 2014, applicable areas of the United States Caribbean Sea, including the coastal waters around Puerto Rico and the U.S. Virgin Islands were also designated ECAs. Ocean-going vessels in these areas will be subject to stringent emissions controls and may cause us to incur additional costs. If other ECAs are approved by the IMO or other new or more stringent requirements relating to emissions from marine diesel engines or port operations by vessels are adopted by the EPA or the states where we operate, compliance with these regulations could entail significant capital expenditures or otherwise increase the costs of our operations. We cannot assure you that the jurisdictions in which the vessels we may acquire vessels operate will not adopt more stringent emissions standards independent of the IMO.
As of January 1, 2013, MARPOL made mandatory certain measures relating to energy efficiency for ships. This included the requirement that all new ships utilize the Energy Efficiency Design Index (EEDI) and all ships use the Ship Energy Efficiency Management Plan (SEEMP).
As of January 1, 2013, MARPOL made mandatory certain measures relating to energy efficiency for ships. It makes the Energy Efficiency Design Index for new ships mandatory and the Ship Energy Efficiency Management Plan apply to all ships.
Amended Annex VI also establishes new tiers of stringent nitrogen oxide emissions standards for new marine engines, depending on their date of installation. The U.S. Environmental Protection Agency promulgated equivalent (and in some senses stricter) emissions standards in late 2009.
Safety Management System Requirements
The IMO also adopted the International Convention for the Safety of Life at Sea, or SOLAS, and the International Convention on Load Lines, or the LL Convention, which impose a variety of standards that regulate the design and operational features of ships. The IMO periodically revises the SOLAS and LL Convention standards. May 2012 SOLAS amendments entered into force as of January 1, 2014. Recent amendments to the Convention on Limitation of Liability for Maritime Claims (LLMC) went into effect on June 8, 2015. The amendments alter the limits of liability for loss of life or personal injury claims and property claims against ship owners.
The operation of our ships is also affected by the requirements set forth in Chapter IX of SOLAS, which sets forth the IMO's International Management Code for the Safe Operation of Ships and Pollution Prevention, or the ISM Code. The ISM Code requires ship owners and bareboat charterers to develop and maintain an extensive "Safety Management System" that includes the adoption of a safety and environmental protection policy setting forth instructions and procedures for safe operation and describing procedures for dealing with emergencies. We rely upon the safety management system that our technical manager has developed for compliance with the ISM Code. The failure of a ship owner or bareboat charterer to comply with the ISM Code may subject such party to increased liability, may decrease available insurance coverage for the affected vessels and may result in a denial of access to, or detention in, certain ports.
The ISM Code requires that vessel operators obtain a safety management certificate, or SMC, for each vessel they operate. This certificate evidences compliance by a vessel's operators with the ISM Code requirements for a safety management system, or SMS. No vessel can obtain an SMC under the ISM Code unless its manager has been awarded a document of compliance, or DOC, issued in most instances by the vessel's flag state.
Noncompliance with the ISM Code or other IMO regulations may subject the ship owner or bareboat charterer to increased liability, may lead to decreases in available insurance coverage for affected vessels and may result in the denial of access to, or detention in, some ports.
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Pollution Control and Liability Requirements
The IMO adopted the International Convention for the Control and Management of Ships' Ballast Water and Sediments, or the BWM Convention, in February 2004. The BWM Convention's implementing regulations call for a phased introduction of mandatory ballast water exchange requirements, to be replaced in time with mandatory concentration limits. The BWM Convention will not enter into force until 12 months after it has been adopted by 30 states, the combined merchant fleets of which represent not less than 35% of the gross tonnage of the world's merchant shipping tonnage. As of late March 2016, 49 states had adopted the BWM Convention, coming close to the 35% threshold. Notwithstanding the foregoing, the BWM Convention has not been ratified. Proposals regarding implementation have recently been submitted to the IMO, but we cannot predict the ultimate timing for ratification. Many of the implementation dates originally written into the BWM Convention have already passed, so that once the BWM Convention enters into force, the period for installation of mandatory ballast water exchange requirements would be extremely short, with several thousand ships a year needing to install ballast water management systems (BWMS).  For this reason, on December 4, 2013, the IMO Assembly passed a resolution revising the application dates of the BWM Convention so that they are triggered by the entry into force date and not the dates originally in the BWM Convention.  This in effect makes all vessels constructed before the entry into force date 'existing' vessels, and allows for the installation of a BWMS on such vessels at the first renewal survey following entry into force of the Convention. Furthermore, in October 2014 the MEPC met and adopted additional resolutions concerning the BWM Convention's implementation. If mid-ocean ballast exchange or ballast water treatment requirements become mandatory, the cost of compliance could increase for ocean carriers and the costs of ballast water treatments may be material. However, many countries already regulate the discharge of ballast water carried by vessels from country to country to prevent the introduction of invasive and harmful species via such discharges. The United States, for example, requires vessels entering its waters from another country to conduct mid-ocean ballast exchange, or undertake some alternate measure, and to comply with certain reporting requirements. Although we do not believe the costs of compliance with mandatory mid-ocean ballast exchange would be material, it is difficult to predict the overall impact of such a requirement on our operations.
The IMO adopted the International Convention on Civil Liability for Bunker Oil Pollution Damage, or the Bunker Convention, to impose strict liability on ship owners for pollution damage in jurisdictional waters of ratifying states caused by discharges of bunker fuel. The Bunker Convention requires registered owners of ships over 1,000 gross tons to maintain insurance for pollution damage in an amount equal to the limits of liability under the applicable national or international limitation regime (but not exceeding the amount calculated in accordance with the Convention on Limitation of Liability for Maritime Claims of 1976, as amended). With respect to non-ratifying states, liability for spills or releases of oil carried as fuel in ship's bunkers typically is determined by the national or other domestic laws in the jurisdiction where the events or damages occur.
In March 2006, the IMO amended Annex I to MARPOL, including a new regulation relating to oil fuel tank protection, which became effective August 1, 2007. The new regulation applies to various ships delivered on or after August 1, 2010. It includes requirements for the protected location of the fuel tanks, performance standards for accidental oil fuel outflow, a tank capacity limit and certain other maintenance, inspection and engineering standards.
The IMO continues to review and introduce new regulations. It is impossible to predict what additional regulations, if any, may be passed by the IMO and what effect, if any, such regulations might have on our operations. We believe that we are in substantial compliance with all applicable existing IMO requirements. In addition, we intend to comply with all future applicable IMO requirements.
The U.S. Oil Pollution Act of 1990 and Comprehensive Environmental Response, Compensation and Liability Act
OPA established an extensive regulatory and liability regime for the protection and cleanup of the environment from oil spills. OPA affects all "owners and operators" whose vessels trade with the United States, its territories and possessions or whose vessels operate in United States waters, which includes the United States' territorial sea and its 200 nautical mile exclusive economic zone around the United States. The United States has also enacted the Comprehensive Environmental Response, Compensation and Liability Act, or CERCLA, which applies to the discharge of hazardous substances other than oil, whether on land or at sea. OPA and CERCLA both define "owner and operator" in the case of a vessel as any person owning, operating or chartering by demise, the vessel. Both OPA and CERCLA impact our operations.
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Under OPA, vessel owners and operators are "responsible parties" and are jointly, severally and strictly liable (unless the spill results solely from the act or omission of a third party, an act of God or an act of war) for all containment and clean-up costs and other damages arising from discharges or threatened discharges of oil from their vessels. OPA defines these other damages broadly to include:
(i) injury to, destruction or loss of, or loss of use of, natural resources and related assessment costs;
(ii) injury to, or economic losses resulting from, the destruction of real and personal property;
(iii) 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.
OPA contains statutory caps on liability and damages; such caps do not apply to direct cleanup costs. Effective December 21, 2015, the U.S. Coast Guard adjusted the limits of OPA liability for non-tank vessels (e.g. drybulk) to the greater of $1,100 per gross ton or $939,800 (subject to periodic adjustment for inflation). These limits of liability do not apply if an incident was proximately caused by the violation of an applicable U.S. federal safety, construction or operating regulation by a responsible party (or its agent, employee or a person acting pursuant to a contractual relationship), or a responsible party's gross negligence or willful misconduct. The limitation on liability similarly does not apply if the responsible party fails or refuses to (i) report the incident where the responsibility party knows or has reason to know of the incident; (ii) reasonably cooperate and assist as requested in connection with oil removal activities; or (iii) without sufficient cause, comply with an order issued under the Federal Water Pollution Act (Section 311 (c), (e)) or the Intervention on the High Seas Act.
CERCLA contains a similar liability regime whereby owners and operators of vessels are liable for cleanup, removal and remedial costs, as well as damage for injury to, or destruction or loss of, natural resources, including the reasonable costs associated with assessing same, and health assessments or health effects studies. There is no liability if the discharge of a hazardous substance results solely from the act or omission of a third party, an act of God or an act of war. Liability under CERCLA is limited to the greater of $300 per gross ton or $5.0 million for vessels carrying a hazardous substance as cargo and the greater of $300 per gross ton or $500,000 for any other vessel. These limits do not apply (rendering the responsible person liable for the total cost of response and damages) if the release or threat of release of a hazardous substance resulted from willful misconduct or negligence, or the primary cause of the release was a violation of applicable safety, construction or operating standards or regulations. The limitation on liability also does not apply if the responsible person fails or refused to provide all reasonable cooperation and assistance as requested in connection with response activities where the vessel is subject to OPA.
OPA and CERCLA both require owners and operators of vessels to establish and maintain with the U.S. Coast Guard evidence of financial responsibility sufficient to meet the maximum amount of liability to which the particular responsible person may be subject. Vessel owners and operators may satisfy their financial responsibility obligations by providing a proof of insurance, a surety bond, qualification as a self-insurer or a guarantee.
The 2010 Deepwater Horizon oil spill in the Gulf of Mexico may also result in additional regulatory initiatives or statutes, including the raising of liability caps under OPA. For example, on August 15, 2012, the U.S. Bureau of Safety and Economic Enforcement (BSEE) issued a final drilling safety rule for offshore oil and gas operations that strengthens the requirements for safety equipment, well control systems, and blowout prevention practices. The Final Rule took effect on October 22, 2012. On August 21, 2013, BSEE proposed a rule to revise existing federal regulations regarding oil and gas production safety systems to address technological advances. A new rule issued by the U.S. Bureau of Ocean Energy Management ("BOEM") that increased the limits of liability of damages for offshore facilities under OPA based on inflation took effect in January 2015. In April 2015, it was announced that new regulations are expected to be imposed in the United States regarding offshore oil and gas drilling. In December 2015, the BSEE announced a new pilot inspection program for offshore facilities. Compliance with any new requirements of OPA may substantially impact our cost of operations or require us to incur additional expenses to comply with any new regulatory initiatives or statutes. Additional legislation or regulations applicable to the operation of the vessels we may acquire that may be implemented in the future could adversely affect our business. If the damages from a catastrophic spill were to exceed our insurance coverage it could have an adverse effect on our business and results of operation.
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OPA specifically permits individual states to impose their own liability regimes with regard to oil pollution incidents occurring within their boundaries, provided they accept, at a minimum, the levels of liability established under OPA, and some states have enacted legislation providing for unlimited liability for oil spills. In some cases, states which have enacted such legislation have not yet issued implementing regulations defining vessel owners' responsibilities under these laws. We intend to comply with all applicable state regulations in the ports where our vessels may call. We believe that we are in substantial compliance with all applicable existing state requirements. In addition, we intend to comply with all future applicable state regulations in the ports where our vessels may call.
Other Environmental Initiatives
The CWA prohibits the discharge of oil, hazardous substances and ballast water in U.S. navigable waters unless authorized by a duly-issued permit or exemption, and imposes strict liability in the form of penalties for any unauthorized discharges. The CWA also imposes substantial liability for the costs of removal, remediation and damages and complements the remedies available under OPA and CERCLA. In addition, many U.S. states that border a navigable waterway have enacted environmental pollution laws that impose strict liability on a person for removal costs and damages resulting from a discharge of oil or a release of a hazardous substance. These laws may be more stringent than U.S. federal law.
The EPA regulates the discharge of ballast water and other substances in U.S. waters under the CWA. EPA regulations require vessels 79 feet in length or longer (other than commercial fishing and recreational vessels) to comply with a Vessel General Permit authorizing ballast water discharges and other discharges incidental to the operation of vessels. The Vessel General Permit imposes technology and water-quality based effluent limits for certain types of discharges and establishes specific inspection, monitoring, recordkeeping and reporting requirements to ensure the effluent limits are met. On March 28, 2013, the EPA re-issued the VGP for another five years, which took effect December 19, 2013. The 2013 VGP contains numeric ballast water discharge limits for most vessels to reduce the risk of invasive species in US waters, more stringent requirements for exhaust gas scrubbers and the use of environmentally acceptable lubricants.
U.S. Coast Guard regulations adopted under the U.S. National Invasive Species Act, or NISA, also impose mandatory ballast water management practices for all vessels equipped with ballast water tanks entering or operating in U.S. waters. In 2009 the Coast Guard proposed new ballast water management standards and practices, including limits regarding ballast water releases. As of June 21, 2012, the U.S. Coast Guard implemented revised regulations on ballast water management by establishing standards on the allowable concentration of living organisms in ballast water discharged from ships in U.S. waters. The revised ballast water standards are consistent with those adopted by the IMO in 2004. Compliance with the EPA and the U.S. Coast Guard regulations could require the installation of equipment on vessels we may acquire to treat ballast water before it is discharged or the implementation of other port facility disposal arrangements or procedures at potentially substantial cost, and/or otherwise restrict vessels from entering U.S. waters.
Notwithstanding the foregoing, as of January 1, 2014, vessels are technically subject to the phasing-in of these standards. As a result, the USCG has provided waivers to vessels which cannot install the as-yet unapproved technology. The EPA, on the other hand, has taken a different approach to enforcing ballast discharge standards under the VGP. On December 27, 2013, the EPA issued an enforcement response policy in connection with the new VGP in which the EPA indicated that it would take into account the reasons why vessels do not have the requisite technology installed, but will not grant any waivers.
It should also be noted that in October 2015, the Second Circuit Court of Appeals issued a ruling that directed the EPA to redraft the sections of the 2013 VGP that address ballast water. However, the Second Circuit stated that 2013 VGP will remains in effect until the EPA issues a new VGP. It presently remains unclear how the ballast water requirements set forth by the EPA, the USCG, and IMO BWM Convention, some of which are in effect and some which are pending, will co-exist.
The U.S. Clean Air Act of 1970 (including its amendments of 1977 and 1990) (the "CAA") requires the EPA to promulgate standards applicable to emissions of volatile organic compounds and other air contaminants. Vessels we may acquire will subject to vapor control and recovery requirements for certain cargoes when loading, unloading, ballasting, cleaning and conducting other operations in regulated port areas. Vessels that operate in such port areas with restricted cargoes are equipped with vapor recovery systems that satisfy these requirements. The CAA also requires states to draft State Implementation Plans ("SIPs") designed to attain national health-based air quality standards in each state. Although state-specific, SIPs may include regulations concerning emissions resulting from vessel loading and unloading operations by requiring the installation of vapor control equipment.
32

European Union Regulations
In October 2009, the European Union amended a directive to impose criminal sanctions for illicit ship-source discharges of polluting substances, including minor discharges, if committed with intent, recklessly or with serious negligence and the discharges individually or in the aggregate result in deterioration of the quality of water. Aiding and abetting the discharge of a polluting substance may also lead to criminal penalties. Member States were required to enact laws or regulations to comply with the directive by the end of 2010. Criminal liability for pollution may result in substantial penalties or fines and increased civil liability claims.
The European Union has adopted several regulations and directives requiring, among other things, more frequent inspections of high-risk ships, as determined by type, age, and flag as well as the number of times the ship has been detained. The European Union also adopted and then extended a ban on substandard ships and enacted a minimum ban period and a definitive ban for repeated offenses. The regulation also provided the European Union with greater authority and control over classification societies, by imposing more requirements on classification societies and providing for fines or penalty payments for organizations that failed to comply.
Greenhouse Gas Regulation
Currently, the emissions of greenhouse gases from international shipping are not subject to the Kyoto Protocol to the United Nations Framework Convention on Climate Change, which entered into force in 2005 and pursuant to which adopting countries have been required to implement national programs to reduce greenhouse gas emissions. The 2015 United Nations Convention on Climate Change Conference in Paris did not result in an agreement that directly limited greenhouse gas emissions from ships.
However, in January 2013 the MEPC's two new sets of mandatory requirements that address greenhouse gas emissions from ships entered into force. Currently operating ships will be required to develop Ship Energy Efficiency Management Plans, and minimum energy efficiency levels per capacity mile, outlined in the Energy Efficiency Design Index, will apply to new ships. In April 2015, a regulation was adopted requiring that large ships (over 5,000 gross tons) calling at European ports from January 2018 collect and publish data on carbon dioxide omissions. The MEPC is also considering market-based mechanisms to reduce greenhouse gas emissions from ships. For 2020, the EU made a unilateral commitment to reduce overall greenhouse gas emissions from its member states by 20% of 1990 levels.  The EU also committed to reduce its emissions by 20% under the Kyoto Protocol's second period, from 2013 to 2020.  In December 2013 the European Union environmental ministers discussed draft rules to implement monitoring and reporting of carbon dioxide emissions from ships.  In the United States, the EPA has issued a finding that greenhouse gases endanger the public health and safety and has adopted regulations to limit greenhouse gas emissions from certain mobile sources and large stationary sources. Although the mobile source emissions regulations do not apply to greenhouse gas emissions from vessels, such regulation of vessels is foreseeable, and the EPA has in recent years received petitions from the California Attorney General and various environmental groups seeking such regulation. Any passage of climate control legislation or other regulatory initiatives by the IMO, European Union, the U.S. or other countries where we operate, or any treaty adopted at the international level to succeed the Kyoto Protocol, that restrict emissions of greenhouse gases could require us to make significant financial expenditures which we cannot predict with certainty at this time.
International Labour Organization
The International Labour Organization (ILO) is a specialized agency of the UN with headquarters in Geneva, Switzerland. The ILO has adopted the Maritime Labor Convention 2006 (MLC 2006). A Maritime Labor Certificate and a Declaration of Maritime Labor Compliance is required to ensure compliance with the MLC 2006 for all ships above 500 gross tons in international trade. On August 20, 2013, MLC 2006 entered into force. The MLC 2006 requires us to develop new procedures to ensure full compliance with its requirements.
Vessel Security Regulations
Since the terrorist attacks of September 11, 2001 in the United States, there have been a variety of initiatives intended to enhance vessel security such as the Maritime Transportation Security Act of 2002, or MTSA. To implement certain portions of the MTSA, in July 2003, the U.S. Coast Guard issued regulations requiring the implementation of certain security requirements aboard vessels operating in waters subject to the jurisdiction of the United States. The regulations also impose requirements on certain ports and facilities, some of which are regulated by the U.S. Environmental Protection Agency (EPA).
33

Similarly, in December 2002, amendments to SOLAS created a new chapter of the convention dealing specifically with maritime security. The new Chapter XI-2 became effective in July 2004 and imposes various detailed security obligations on vessels and port authorities, and mandates compliance with the International Ship and Port Facilities Security Code, or the ISPS Code. The ISPS Code is designed to enhance the security of ports and ships against terrorism. To trade internationally, a vessel must attain an International Ship Security Certificate, or ISSC, from a recognized security organization approved by the vessel's flag state. Among the various requirements are:
· 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;
Ships operating without a valid certificate may be detained at port until it obtains an ISSC, or it may be expelled from port, or refused entry at port.
Furthermore, additional security measures could be required in the future which could have a significant financial impact on us. The U.S. Coast Guard regulations, intended to be aligned with international maritime security standards, exempt non-U.S. vessels from MTSA vessel security measures, provided such vessels have on board a valid ISSC that attests to the vessel's compliance with SOLAS security requirements and the ISPS Code.
Inspection by Classification Societies
Every seagoing vessel must be "classed" by a classification society. The classification society certifies that the vessel is "in class," signifying that the vessel has been built and maintained in accordance with the rules of the classification society and complies with applicable rules and regulations of the vessel's country of registry and the international conventions of which that country is a member. In addition, where surveys are required by international conventions and corresponding laws and ordinances of a flag state, the classification society will undertake them on application or by official order, acting on behalf of the authorities concerned.
The classification society also undertakes on request other surveys and checks that are required by regulations and requirements of the flag state. These surveys are subject to agreements made in each individual case and/or to the regulations of the country concerned.
For maintenance of the class certification, regular and occasional surveys of hull, machinery, including the electrical plant, and any special equipment classed are required to be performed as follows:
Annual Surveys . For seagoing ships, annual surveys are conducted for the hull and the machinery, including the electrical plant, and where applicable for special equipment classed, within three months before or after each anniversary date of the date of commencement of the class period indicated in the certificate.
Intermediate Surveys . Extended annual surveys are referred to as intermediate surveys and typically are conducted two and one-half years after commissioning and each class renewal. Intermediate surveys are to be carried out at or between the occasion of the second or third annual survey.
34

Class Renewal Surveys . Class renewal surveys, also known as special surveys, are carried out for the ship's hull, machinery, including the electrical plant and for any special equipment classed, at the intervals indicated by the character of classification for the hull. At the special survey the vessel is thoroughly examined, including audio-gauging to determine the thickness of the steel structures. Should the thickness be found to be less than class requirements, the classification society would prescribe steel renewals. Substantial amounts of money may have to be spent for steel renewals to pass a special survey if the vessel experiences excessive wear and tear. In lieu of the special survey, a ship owner has the option of arranging with the classification society for the vessel's hull or machinery to be on a continuous survey cycle, in which every part of the vessel would be surveyed within a five year cycle. At an owner's application, the surveys required for class renewal may be split according to an agreed schedule to extend over the entire period of class. This process is referred to as continuous class renewal.
All areas subject to survey as defined by the classification society are required to be surveyed at least once per class period, unless shorter intervals between surveys are prescribed elsewhere. The period between two subsequent surveys of each area must not exceed five years. Vessels under five years of age can waive dry-docking in order to increase available days and decrease capital expenditures, provided the vessel is inspected underwater.
Most vessels are usually dry-docked every 30 to 36 months for inspection of the underwater parts and for repairs related to inspections. If any defects are found, the classification surveyor will issue a "recommendation" which must be rectified by the ship owner within prescribed time limits.
Most insurance underwriters make it a condition for insurance coverage and lending that a vessel be certified as "in class" by a classification society which is a member of the International Association of Classification Societies, or the IACS.  All our vessels are certified as being "in class" by American Bureau of Shipping, Bureau Veritas or Nippon Kaiji Kyokai, major classification societies.  All new and secondhand vessels that we purchase must be certified prior to their delivery under our standard purchase contracts and memorandum of agreement. If the vessel is not certified on the date of closing, we have no obligation to take delivery of the vessel.
Risk of Loss and Liability Insurance Generally
The operation of any cargo vessel includes risks such as mechanical failure, collision, property loss, cargo loss or damage and business interruption due to political circumstances in foreign countries, hostilities and labor strikes. In addition, there is always an inherent possibility of marine disaster, including oil spills and other environmental mishaps, and the liabilities arising from owning and operating vessels in international trade. OPA, which imposes virtually unlimited liability upon owners, operators and demise charterers of any vessel for oil pollution accidents in the United States Exclusive Economic Zone, has made liability insurance more expensive for ship owners and operators trading in the United States market. While we maintain hull and machinery insurance, war risks insurance, protection and indemnity cover and freight, demurrage and defense cover for our fleet in amounts that we believe will be prudent to cover normal risks in our operations, we may not be able to achieve or maintain this level of coverage throughout a vessel's useful life. Furthermore, while we believe that our insurance coverage is adequate, not all risks can be insured, and there can be no guarantee that any specific claim will be paid, or that we will always be able to obtain adequate insurance coverage at reasonable rates.
Hull & Machinery and War Risks Insurance
We maintain marine hull and machinery and war risks insurance, which includes the risk of actual or constructive total loss, for all of our vessels. Each of our vessels is covered up to at least fair market value with deductibles of $150,000 per vessel per incident. We also maintain increased value coverage for our vessels. Under this increased value coverage, in the event of total loss of a vessel, we will be able to recover the sum insured under the increased value policy in addition to the sum insured under the hull and machinery policy. Increased value insurance also covers excess liabilities which are not recoverable under our hull and machinery policy by reason of under insurance.
Protection and Indemnity Insurance
Protection and indemnity insurance is provided by mutual protection and indemnity associations, or P&I Associations, which insure liabilities to third parties in connection with our shipping activities. This includes third-party liability and other related expenses resulting from the injury or death of crew, passengers and other third parties, the loss or damage to cargo, claims arising from collisions with other vessels, damage to other third-party property, pollution arising from oil or other substances and salvage, towing and other related costs, including wreck removal. Our P&I coverage will be subject to and in accordance with the rules of the P&I Association in which the vessel is entered. Protection and indemnity insurance is a form of mutual indemnity insurance, extended by protection and indemnity mutual associations, or "clubs." Our coverage is limited to approximately $7.5 billion, except for pollution which is limited to $1 billion.
35

Our protection and indemnity insurance coverage for pollution will be $1 billion per vessel per incident. The thirteen P&I Associations that comprise the International Group insure approximately 90% of the world's commercial tonnage and have entered into a pooling agreement to reinsure each association's liabilities. Each P&I Association has capped its exposure to this pooling agreement at approximately $7.5 billion. As a member of a P&I Association which is a member of the International Group, we are subject to calls payable to the associations based on the group's claim records as well as the claim records of all other members of the individual associations and members of the pool of P&I Associations comprising the International Group.
Permits and Authorizations
We are required by various governmental and quasi-governmental agencies to obtain certain permits, licenses and certificates with respect to our vessels. The kinds of permits, licenses and certificates required depend upon several factors, including the commodity transported, the waters in which the vessel operates, the nationality of the vessel's crew and the age of a vessel. We believe that we have obtained all permits, licenses and certificates currently required to permit our vessels to operate. Additional laws and regulations, environmental or otherwise, may be adopted which could limit our ability to do business or increase the cost of us doing business.
C.             Organizational Structure
We are the parent company of the following wholly-owned subsidiaries as of the date of this annual report:
Subsidiary
 
Jurisdiction of Incorporation
Seanergy Management Corp.
 
Republic of the Marshall Islands
Seanergy Shipmanagement Corp.
 
Republic of the Marshall Islands
Leader Shipping Co.
 
Republic of the Marshall Islands
Sea Glorius Shipping Co.
 
Republic of the Marshall Islands
Sea Genius Shipping Co.
 
Republic of the Marshall Islands
Guardian Shipping Co.
 
Republic of the Marshall Islands
Gladiator Shipping Co.
 
Republic of the Marshall Islands
Premier Marine Co.
 
Republic of the Marshall Islands
Squire Ocean Navigation Co.
 
Liberia
Champion Ocean Navigation Co.
 
Liberia
Pembroke Chartering Services Limited
 
Malta
Amazons Management Inc.
 
Republic of the Marshall Islands
Lagoon Shipholding Ltd.
 
Republic of the Marshall Islands
Cynthera Navigation Ltd.
 
Republic of the Marshall Islands
Martinique International Corp.
 
British Virgin Islands
Harbour Business International Corp.
 
British Virgin Islands
Waldeck Maritime Co.
 
Republic of the Marshall Islands
Maritime Capital Shipping Limited
 
Bermuda
Maritime Capital Shipping (HK) Limited
 
Hong Kong
Maritime Grace Shipping Limited
 
British Virgin Islands
Maritime Glory Shipping Limited
 
British Virgin Islands
Atlantic Grace Shipping Limited
 
British Virgin Islands
 
D.             Property, Plants and Equipment
We do not own any real estate property. We lease our executive office space in Athens, Greece from a third party entity for a term which was renewed on January 11, 2016 up to and including January 11, 2018, and for MCS we lease office space in Hong Kong from a third party entity.
ITEM 4A.
UNRESOLVED STAFF COMMENTS

None.
ITEM 5.
OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The following management's discussion and analysis of the results of our operations and our financial condition should be read in conjunction with the financial statements and the notes to those statements included in "Item 18. Financial Statements." This discussion contains forward-looking statements that involve risks, uncertainties, and assumptions. Actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those set forth in "Item 3 Key Information–D. Risk Factors."
36

A.             Operating Results
Factors Affecting our Results of Operations Overview
We are an international shipping company specializing in the worldwide seaborne transportation of drybulk commodities.  In March 2014, we completed our financial restructuring by the sale of our then existing fleet and cancelling of all our financial obligations, while in 2015 we acquired our fleet of eight drybulk carriers.
Due to economic conditions and operational difficulties, in 2013 we began our restructuring discussions and settlement agreements with each of our lenders under our prior loan facility agreements. On March 11, 2014, we completed our financial restructuring when our outstanding debt and accrued interest with the final lender under our prior loan facility agreements, Piraeus Bank, was discharged and the corporate guarantee provided by us was fully released.
On December 23, 2014, we entered into an agreement with an unaffiliated third party for the purchase of a secondhand Capesize vessel for $17.1 million. The acquisition was funded with proceeds from a senior secured loan, an unsecured convertible promissory note issued to our principal shareholder, who we refer to as our Sponsor, and the sale of common stock to our Sponsor. The vessel was delivered in March 2015.
On August 6, 2015, we entered into a purchase agreement with entities affiliated with our Sponsor to acquire seven secondhand drybulk vessels, consisting of five Capesize and two Supramax vessels for an aggregate purchase price of $183.4 million. The acquisitions were funded with proceeds from senior secured loans, a revolving convertible promissory note issued to our Sponsor, and the sale of common stock to our Sponsor. We took delivery of all seven vessels between September and December 2015.
On January 7, 2016, we effected a 1-for-5 reverse split of our common stock. The reverse stock split became effective and the common stock began trading on a split-adjusted basis on the NASDAQ Capital Market at the opening of trading on January 8, 2016. There was no change in the number of authorized shares or the par value of our common stock. All share and per share amounts disclosed herein give effect to this reverse stock split retroactively, for all periods presented.
Important Measures for Analyzing Results of Operations
We use a variety of financial and operational terms and concepts. These include the following:
Ownership days. Ownership days are the total number of calendar days in a period during which we owned each vessel in our fleet. Ownership days are an indicator of the size of the fleet over a period and affect both the amount of revenues and the amount of expenses recorded during that period.
Available days. Available days are the number of ownership days less the aggregate number of days that our vessels are off-hire due to major repairs, drydockings or special or intermediate surveys. The shipping industry uses available days to measure the number of ownership days in a period during which vessels should be capable of generating revenues.
Operating days. Operating days are the number of available days in a period less the aggregate number of days that vessels are off-hire for any reason, including off-hire days between successive voyages, as well as other unforeseen circumstances. The shipping industry uses operating days to measure the aggregate number of days in a period during which vessels actually generate revenues.
Fleet utilization. Fleet utilization is the percentage of time that our vessels were generating revenue, and is determined by dividing operating days by ownership days for the relevant period.
Fleet utilization excluding drydocking off-hire days. Fleet utilization excluding drydocking off-hire days is calculated by dividing the number of the fleet's operating days during a period by the number of available days during that period. The shipping industry uses fleet utilization excluding drydocking off-hire days to measure a Company's efficiency in finding suitable employment for its vessels and excluding the amount of days that its vessels are off-hire for reasons such as scheduled repairs, vessel upgrades, or dry dockings or special or intermediate surveys.
37

Off-hire. The period a vessel is unable to perform the services for which it is required under a charter.
Drydocking.   We periodically drydock each of our vessels for inspection, repairs and maintenance and any modifications to comply with industry certification or governmental requirements.
Time charter. A time charter is a contract for the use of a vessel for a specific period of time during which the charterer pays substantially all of the voyage expenses, including port costs, canal charges and fuel expenses. The vessel owner pays the vessel operating expenses, which include crew wages, insurance, technical maintenance costs, spares, stores and supplies and commissions on gross voyage revenues. The vessel owner is also responsible for each vessel's drydocking and intermediate and special survey costs.  Time charter rates are usually fixed during the term of the charter. Prevailing time charter rates do fluctuate on a seasonal and year-to-year basis and may be substantially higher or lower from a prior time charter agreement when the subject vessel is seeking to renew the time charter agreement with the existing charterer or enter into a new time charter agreement with another charterer. Fluctuations in time charter rates are influenced by changes in spot charter rates.
Voyage charter.  A voyage charter is generally a contract to carry a specific cargo from a load port to a discharge port for an agreed-upon total amount. Under voyage charters, voyage expenses such as port charges, bunker (fuel oil and diesel oil) expenses, canal charges and other commissions are paid by the vessel owner.
TCE.  Time charter equivalent, or TCE, rate is defined as our net revenue less voyage expenses during a period divided by the number of our operating days during the period. Voyage expenses include port charges, bunker (fuel oil and diesel oil) expenses, canal charges and other commissions.
Principal Factors Affecting Our Business
The principal factors that affect our financial position, results of operations and cash flows include the following:
· number of vessels owned and operated;
· voyage charter rates;
· the nature and duration of our voyage charters;
· vessels repositioning;
· vessel operating expenses and direct voyage costs;
· maintenance and upgrade work;
· the age, condition and specifications of our vessels;
· amount of debt obligations and restructuring of debt obligations; and
· financing costs related to vessels indebtedness.
We are also affected by the types of charters we enter into.  Vessels operating on period time charters and bareboat time charters provide more predictable cash flows, but can yield lower profit margins than vessels operating in the spot charter market for single voyages during periods characterized by favorable market conditions.
Vessels operating in the spot charter market generate revenues that are less predictable, but can yield increased profit margins during periods of improvements in drybulk rates. Spot charters also expose vessel owners to the risk of declining drybulk rates and rising fuel costs. All of our vessels in 2014 and 2015 operated in the spot charter market.
38

Results of Operations
Year ended December 31, 2015 as compared to year ended December 31, 2014
(In thousands of U.S. Dollars, except for share and per share data)
   
Year ended December 31,
   
Change
 
   
2015
   
2014
   
Amount
   
%
 
 Revenues:
               
Vessel revenue, net
   
11,223
     
2,010
     
9,213
     
458
%
                                 
Expenses:
                               
Direct voyage expenses
   
(7,496
)
   
(1,298
)
   
(6,198
)
   
478
%
Vessel operating expenses
   
(5,639
)
   
(1,006
)
   
(4,633
)
   
461
%
Management fees
   
(336
)
   
(122
)
   
(214
)
   
175
%
General and administrative expenses
   
(2,874
)
   
(3,296
)
   
422
     
(13
)%
Depreciation and amortization
   
(1,903
)
   
(3
)
   
(1,900
)
   
63,333
%
Gain on restructuring
   
-
     
85,563
     
85,563
     
(100
)%
Loss on bad debts
   
(30
)
   
(38
)
   
8
     
(21
)%
Operating (loss) / income
   
(7,055
)
   
81,810
     
(88,865
)
   
(109
)%
Other income / (expense):
                               
Interest and finance costs
   
(1,859
)
   
(1,463
)
   
(396
)
   
27
%
Other, net
   
(42
)
   
1
     
(43
)
   
(4,300
)%
Total other expenses, net:
   
(1,901
)
   
(1,462
)
   
(439
)
   
30
%
Net (loss) / income
   
(8,956
)
   
80,348
     
(89,304
)
   
(111
)%
                                 
Net (loss) income per common share, basic and diluted
   
(0.83
)
   
30.06
                 
Weighted average number of common shares outstanding, basic
   
10,773,404
     
2,672,945
                 
Weighted average number of common shares outstanding, diluted
   
10,773,404
     
2,672,950
                 

Vessel Revenue, Net - The increase was attributable to the increase in operating days.  We had 546 operating days in 2015 as compared to 142 operating days in 2014.  In accordance with our financial restructuring plan, our four remaining vessels were sold in March 2014. By comparison, in 2015 we acquired eight vessels, with the first vessel delivered on March 19, 2015 and the remaining seven vessels delivered between September 11, 2015 and December 7, 2015.
Direct Voyage Expenses - The increase was attributable to the increase in operating days.
Vessel Operating Expenses - The increase was attributable to the increase in ownership days.
Management Fees - The increase was attributable to the increase in ownership days.
Depreciation - The increase was attributable to our acquiring our fleet of eight drybulk carriers in 2015. By comparison we effectively had no depreciation charges in 2014 for the four vessels we then owned until their disposal in March 2014, as those assets were classified as held for sale as of June 30, 2013, and thus the four vessels were no longer depreciated.
Gain on restructuring - In 2014 we recognized a gain of $85.6 million from the sale of our then four remaining vessels related to the loan facility agreement with Piraeus Bank.  We had no similar gain in 2015.
Interest and Finance Costs - The increase was primarily attributable to our five new loan agreements entered into 2015 for the acquisition of our new vessels as well as the two convertible promissory notes with our Sponsor for general corporate purposes and to partially finance the acquisition of our new vessels.  The weighted average interest rate on our outstanding debt for the years ended 2015 and 2014 was approximately 3.6% and 4.9%, respectively.
39

Year ended December 31, 2014 as compared to year ended December 31, 2013
(In thousands of U.S. Dollars, except for share and per share data)

 
   
Year ended December 31,
   
Change
 
   
2014
   
2013
   
Amount
   
%
 
Revenues:
               
Vessel revenue, net
   
2,010
     
23,079
     
(21,069
)
   
(91
)%
                                 
Expenses:
                               
Direct voyage expenses
   
(1,298
)
   
(8,348
)
   
7,050
     
(84
)%
Vessel operating expenses
   
(1,006
)
   
(11,086
)
   
10,080
     
(91
)%
Management fees
   
(122
)
   
(937
)
   
815
     
(87
)%
General and administrative expenses
   
(3,296
)
   
(4,378
)
   
1,082
     
(25
)%
Depreciation and amortization
   
(3
)
   
(1,214
)
   
1,211
     
(100
)%
Impairment loss for vessels and deferred charges
   
-
     
(3,564
)
   
3,564
     
(100
)%
Gain on disposal of subsidiaries
   
-
     
25,719
     
(25,719
)
   
(100
)%
Gain on restructuring
   
85,563
     
-
     
85,563
     
-
 
Loss on bad debts
   
(38
)
   
-
     
(38
)
   
-
 
Operating income
   
81,810
     
19,271
     
62,539
     
325
%
Other income / (expense):
                               
Interest and finance costs
   
(1,463
)
   
(8,389
)
   
6,926
     
(83
)%
Other, net
   
1
     
25
     
(24
)
   
(96
)%
Total other expenses, net:
   
(1,462
)
   
(8,364
)
   
6,902
     
(83
)%
Net income
   
80,348
     
10,907
     
69,441
     
637
%
                                 
Net income per common share, basic and diluted
   
30.06
     
4.56
                 
Weighted average number of common shares outstanding, basic
   
2,672,945
     
2,391,628
                 
Weighted average number of common shares outstanding, diluted
   
2,672,950
     
2,391,885
                 

Vessel Revenue, Net - The decrease was attributable to the decrease in operating days.  We had 142 operating days in 2014 compared to 1,840 operating days in 2013.  This is as a result of the sale of our then four remaining vessels in March 2014 in accordance with our financial restructuring plan.
Direct Voyage Expenses - The decrease was attributable to the decrease in operating days.
Vessel Operating Expenses - The decrease was attributable to the decrease in operating days.
Management Fees - The decrease was attributable to the decrease in operating days.
General and Administrative Expenses -  The decrease is mainly attributable to expense cutting efforts initiated during 2012, the cost savings resulting from the restructuring of our Hong Kong office and the increased costs in 2013 associated with the debt restructuring as compared to 2014.
Depreciation - The decrease was attributable to the no depreciation charges in 2014 for the four vessels we then owned until their disposal in March 2014, as those assets were classified as held for sale as of June 30, 2013, and thus the four vessels were no longer depreciated.
Impairment Loss for Vessels and Deferred Charges –During 2013, we recorded an impairment loss of $0.9 million for a vessel that was sold in April 2013 and $10.7 million for two vessels which were measured at their fair values upon classification of the vessels financed by the Piraeus Bank loan facilities to current assets as of June 30, 2013, as per the Company's restructuring plan. This was partially offset with the impairment re-measurement gain of $1.0 million relating to the vessels financed by United Overseas Bank Limited and the impairment re-measurement gain of $7.0 million of the two vessels by the Piraeus Bank loan facilities which were impaired as of June 30, 2013. We had no similar impairment in 2014.
Gain on disposal of subsidiaries - We recorded a gain of $25.7 million on the disposal of seven subsidiaries in 2013. In January 2013, we recognized a gain of $5.5 million from the sale of four subsidiaries related to the facility agreement with DVB Bank AG. In July 2013, we recognized a gain of $20.2 million from the sale of the three subsidiaries related to the facility agreement with United Overseas Bank Limited.  We had no similar gain in 2014.
40

Gain on restructuring - In 2014 we recognized a gain of $85.6 million from the sale of our then four remaining vessels related to the loan facility agreement with Piraeus Bank.  We had no similar gain in 2013.
Interest and Finance Costs - The was mainly attributable to lower loan debt balances in 2014 compared to those in 2013 as a result of our restructuring plan. In 2014, we closed on the delivery and settlement agreement with our remaining lender, Piraeus Bank, for the sale of our four remaining vessels. In exchange for the sale, approximately $145.6 million of outstanding debt and accrued interest were discharged. In 2013 we sold seven vessel owning subsidiaries, and in exchange for the sale, $69.8 million of outstanding debt, accrued interest and swap liabilities were discharged.  In addition to this, proceeds from a vessel sale in April 2013 were used to reduce outstanding debt. Total debt outstanding was $134.9 million at the end of 2013 and was discharged in 2014. The weighted average interest rate on our outstanding debt for the years ended December 31, 2014 and 2013 was approximately 4.9% and 4.4%, respectively.
Performance Indicators
The figures shown below are non-GAAP statistical ratios used by management to measure performance of our vessels. For the "Fleet Data" figures, there are no comparable US GAAP measures.
   
Year Ended December 31,
 
Fleet Data:
 
2015
   
2014
   
2013
 
           
Ownership days(1)
   
776
     
268
     
2,275
 
Available days(2)
   
724
     
268
     
2,218
 
Operating days(3)
   
598
     
142
     
1,840
 
Fleet utilization(4)
   
77
%
   
53
%
   
81
%
Fleet utilization excluding drydocking off hire days (5)
   
83
%
   
53
%
   
83
%
                         
Average Daily Results:
                       
TCE rate(6)
 
$
6,232
   
$
5,014
   
$
8,006
 
Daily Vessel Operating Expenses(7)
 
$
5,428
   
$
3,754
   
$
4,873
 
                         
(1) Ownership days are the total number of calendar days in a period during which we owned each vessel in our fleet. Ownership days are an indicator of the size of the fleet over a period and affect both the amount of revenues and the amount of expenses recorded during that period.
(2) Available days are the number of ownership days less the aggregate number of days that our vessels are off-hire due to major repairs, drydockings or special or intermediate surveys. The shipping industry uses available days to measure the number of ownership days in a period during which vessels should be capable of generating revenues. During the year ended December 31, 2015, the Company incurred 52 off-hire days for vessel surveys.
(3) Operating days are the number of available days in a period less the aggregate number of days that vessels are off-hire for any reason, including off-hire days between successive voyages, as well as other unforeseen circumstances. The shipping industry uses operating days to measure the aggregate number of days in a period during which vessels actually generate revenues. In the twelve months ended December 31, 2015, the company incurred 126 off-hire days between voyages and zero off-hires due to other unforeseen circumstances.
(4) Fleet utilization is the percentage of time that our vessels were generating revenue, and is determined by dividing operating days by ownership days for the relevant period.
(5) Fleet utilization excluding drydocking off-hire days is calculated by dividing the number of the fleet's operating days during a period by the number of available days during that period. The shipping industry uses fleet utilization excluding drydocking off-hire days to measure a Company's efficiency in finding suitable employment for its vessels and excluding the amount of days that its vessels are off-hire for reasons such as scheduled repairs, vessel upgrades, or dry dockings or special or intermediate surveys.
41

(6) TCE rate is defined as our net revenue less voyage expenses during a period divided by the number of our operating days during the period. Voyage expenses include port charges, bunker (fuel oil and diesel oil) expenses, canal charges and other commissions.  We include TCE rate, a non-GAAP measure, as we believe it provides additional meaningful information in conjunction with net revenues from vessels, the most directly comparable US GAAP measure, because it assists our management in making decisions regarding the deployment and use of our vessels and in evaluating their financial performance.  Our calculation of TCE rate may not be comparable to that reported by other companies. The following table reconciles our net revenues from vessels to TCE rate.
(In thousands of US Dollars, except operating days and TCE rate)
   
2015
   
2014
   
2013
 
             
Net revenues from vessels*
 
$
11,223
   
$
2,010
   
$
23,079
 
Voyage expenses
   
(7,496
)
   
(1,298
)
   
(8,348
)
Net operating revenues
 
$
3,727
   
$
712
   
$
14,731
 
Operating days
   
598
     
142
     
1,840
 
Daily time charter equivalent rate
 
$
6,232
   
$
5,014
   
$
8,006
 

* Our TCE rate is calculated as the weighted average of the daily rate earned under time charter contracts and of the daily rate earned by bareboat agreements after deducting the relevant fixed operating expense allowance. Net revenue from vessels under bareboat agreements is net of operating expense allowance.
(7) Vessel operating expenses include crew costs, provisions, deck and engine stores, lubricants, insurance, maintenance and repairs. Vessel operating expenses before pre-delivery expenses exclude one-time pre-delivery and pre-joining expenses associated with initial crew manning and supply of stores of Company's vessels upon delivery. Daily Vessel Operating Expenses are calculated by dividing vessel operating expenses before pre-delivery expenses by ownership days for the relevant time periods.  We include daily vessel operating expenses, a non-GAAP measure, as we believe it provides additional meaningful information in conjunction with vessel operating expenses, the most directly comparable US GAAP measure, because it assists our management in making decisions regarding the deployment and use of our vessels and in evaluating their financial performance.  Our calculation of daily vessel operating expenses may not be comparable to that reported by other companies. The following table reconciles our vessel operating expenses to daily vessel operating expenses.
(In thousands of US Dollars, except ownership days and Daily Vessel Operating Expenses)
    Year Ended December 31,  
   
2015
   
2014
   
2013
 
             
Vessel operating expenses
 
$
5,639
   
$
1,006
   
$
11,086
 
Less: Pre-delivery expenses
   
(1,427
)
   
-
 
   
-
 
Vessel operating expenses before pre-delivery expenses
 
$
4,212
   
$
1,006
   
$
11,086
 
Ownership days
   
776
     
268
     
2,275
 
Daily Vessel Operating Expenses
 
$
5,428
   
$
3,754
   
$
4,873
 
 
Recent Accounting Pronouncements
Refer to Note 2 of the consolidated financial statements included in this annual report.
Critical Accounting Policies and Estimates
Critical accounting policies are those that reflect significant judgments or uncertainties and potentially result in materially different results under different assumptions and conditions. We have described below what we believe are our most critical accounting policies, because they generally involve a comparatively higher degree of judgment in their application.
 
42
 

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

In "Critical Accounting Policies and Estimates – Impairment of long-lived assets," we discuss our policy for impairing the carrying values of our vessels. During the past few years, the market values of vessels have experienced particularly high volatility, with substantial declines in many vessel classes. As a result, the charter-free market value, or basic market value, of certain of our vessels may have declined below those vessels' carrying value, even though we would not impair those vessels' carrying value under our accounting impairment policy, due to our belief that future undiscounted cash flows expected to be earned by such vessels over their operating lives would exceed such vessels' carrying amounts. The table set forth below indicates (i) the carrying value of each of our vessels as of December 31, 2015 and (ii) which of our vessels we believe had a basic market value below their carrying value.  This aggregate difference between the carrying value of our vessels and their market value of $61.8 million, represents the amount by which we believe we would have had to reduce our net income if we sold all of such vessels in the current environment, on industry standard terms, in cash transactions, and to a willing buyer where we are not under any compulsion to sell, and where the buyer is not under any compulsion to buy as of December 31, 2015. For purposes of this calculation, we assumed that the vessels would be sold at a price that reflects our estimate of their charter-free market values as of December 31, 2015.

Our estimates of basic market value assume that our vessels are all in good and seaworthy condition without need for repair and if inspected would be certified in class without notations of any kind. Our estimates are based on information available from various industry sources, including:
 
· reports by industry analysts and data providers that focus on our industry and related dynamics affecting vessel values;
 
· news and industry reports of similar vessel sales;
 
· 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.
 
As we obtain information from various industry and other sources, our estimates of basic market value are inherently uncertain. In addition, vessel values are highly volatile; as such, our estimates may not be indicative of the current or future basic market value of our vessels or prices that we could achieve if we were to sell them.

Vessel
Dwt
Year purchased
Carrying Value as of December 31, 2015
 (in million of U.S. dollars)
     
Leadership
171,199
2001
16.6*
Gloriuship
171,314
2004
16.7*
Geniuship
170,057
2010
27.4*
Premiership
170,024
2010
29.6*
Squireship
170,018
2010
34.7*
Championship
179,238
2011
41.7*
Gladiatorship
56,819
2010
16.1*
Guardianship
56,884
2011
17.0*
TOTAL DWT
1,145,553
 
199.8

*    Indicates dry bulk carrier vessels for which we believe, as of December 31, 2015, the basic charter-free market value is lower than the vessel's carrying value.

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

 
43

Impairment of long-lived assets
We review our long-lived assets for impairment whenever events or changes in circumstances, such as undiscounted projected operating cash flows, business plans to dispose a vessel earlier than the end of its useful life and prevailing market conditions, indicate that the carrying amount of the assets may not be recoverable. The current conditions in the drybulk market with decreased charter rates and decreased vessel market values are conditions that we consider indicators of a potential impairment for our vessels. We determine undiscounted projected operating cash flows, for each vessel and compare it to the vessel's carrying value. When the undiscounted projected operating cash flows, excluding interest charges, expected to be generated by the use of the vessel and its eventual disposition are less than its carrying amount, we impair the carrying amount of the vessel. Measurement of the impairment loss is based on the fair value of the asset as determined by independent valuators. The undiscounted projected operating cash inflows are determined by considering the charter revenues from existing time charters for the fixed fleet days and an estimated daily time charter equivalent for the non-fixed days (based on a combination of 2-year forward freight agreements and the median of the trailing 10-year historical charter rates available for each type of vessel) adjusted for brokerage commissions and expected outflows for scheduled vessels' maintenance. The undiscounted projected operating cash outflows are determined by reference to our actual vessel operating expenses, assuming an average annual inflation rate of 2%. Fleet utilization excluding dry-docking off-hire days is determined by reference to the actual utilization rate of the Company's fleet in the recent years. We recorded a net impairment loss of $NIL, $NIL and $3.6 million for the years ended December 31, 2015, 2014 and 2013, respectively.  For the year ended December 31, 2015, the results of the impairment testing were sensitized assuming the 10-year historical charter rates.  The sensitivity analysis revealed that, even if the 10-year historical charter rates decline by 20% and 32% for Capesize and Supramax vessels, respectively, we would not be required to recognize additional impairment.
Vessel depreciation
Depreciation is computed using the straight-line method over the estimated useful life of the vessels, after considering the estimated salvage value. Up to September 30, 2015, management estimated the useful life of the Company's vessels to be 30 years from the date of initial delivery from the shipyard. On October 1, 2015, the Company changed that estimate to 25 years. This change increased depreciation expense by $0.3 million (approximately $0.03 per share) for the year ended December 31, 2015 . Salvage value is estimated by taking the cost of steel times the weight of the ship noted in lightweight ton. Salvage values are periodically reviewed and revised to recognize changes in conditions, new regulations or other reasons. Revisions of salvage values affect the depreciable amount of the vessels and affects depreciation expense in the period of the revision and future periods. On October 1, 2015, the Company revised the salvage value of its vessels. This change increased depreciation expense by $0.2 million for the year ended December 31, 2015 .
Survey costs
There are two methods that are primarily used by the shipping industry to account for dry-dockings; first, the deferral method, whereby specific costs associated with a dry-docking are capitalized when incurred and amortized on a straight-line basis over the period to the next scheduled dry-dock; and second, the direct expensing method, whereby dry-docking costs are expensed in the period incurred. We use the deferral method of accounting for dry-dock expenses. Under the deferral method, dry-dock expenses are capitalized and amortized on a straight-line basis until the date that the vessel is expected to undergo its next dry-dock. We believe the deferral method better matches costs with revenue. We use judgment when estimating the period between dry-docks performed, which can result in adjustments to the estimated amortization of dry-dock expense, the duration of which depends on the age of the vessel and the nature of dry-docking repairs the vessel will undergo. We expect that our vessels will be required to be dry-docked approximately every 2 to 3 years in accordance with class requirements for major repairs and maintenance. Costs capitalized as part of the dry-docking include actual costs incurred at the dry-dock yard and parts and supplies used in undertaking the work necessary to meet class requirements.
Variable interest entities
We evaluate our relationships with other entities to identify whether they are variable interest entities and to assess whether we are the primary beneficiary of such entities. If it is determined that we are the primary beneficiary, that entity is included in our consolidated financial statements. We do not participate in any variable interest entity.
B.              Liquidity and Capital Resources
Our principal source of funds has been our operating cash flow, long-term borrowings from banks and our shareholders, and equity provided by the capital markets and our shareholders. Our principal use of funds has primarily been capital expenditures to establish our fleet, maintain the quality of our drybulk carriers, comply with international shipping standards and environmental laws and regulations, fund working capital requirements, and make principal repayments and interest payments on our outstanding debt obligations.
44

As of December 31, 2015, we had cash and cash equivalents of $3.3 million, as compared to $2.9 million as of December 31, 2014.
Working capital is equal to current assets minus current liabilities, including the current portion of long-term debt. As of December 31, 2015, we had a working capital deficit of $1.0 million, as compared to $2.6 million surplus as of December 31, 2014. Our working capital decreased primarily due to our new loan agreements entered into 2015.
As of December 31, 2015, we had total indebtedness of $178.5 million, excluding unamortized financing fees and the shareholder's notes, as compared to $NIL million as of December 31, 2014. Our total indebtedness increased due to our new loan agreements and convertible promissory notes entered into 2015 and described further below.

Since December 31, 2014, significant transactions impacting our liquidity and capital resources include:
We entered into five new loan agreements and drew an aggregate amount of $179 million under them as of December 31, 2015 in order to partially finance the acquisition of our new vessels.  Please see "Descrip tion of Indebtedness―Credit Facilities" below.
We entered into two convertible promissory notes with our Sponsor for general corporate purposes as well as to partially finance the acquisition of our new vessels. As of December 31, 2015, we had drawn $15.8 million under the convertible promissory notes. Please see Please see "Description of Indebtedness―Convertible Promissory Notes" below.
We raised $13.8 million through the sale of 15,355,559 common shares to our Sponsor and our Chief Executive Officer for general corporate purposes as well as to partially finance the acquisition of our new vessels.
Given the current drybulk charter rates, our cash flow projections indicate that cash on hand and cash provided by operating activities might not be sufficient to cover the liquidity needs that become due in the twelve-month period ending December 31, 2016. We have relied on Jelco Delta Holding Corp., or Jelco, a company affiliated with Claudia Restis, who is also our major shareholder, for both vessel acquisitions and general corporate purposes during 2015 and for further funding during 2016. We also intend to apply additional measures to reduce potential cash flow shortfall if current drybulk charter rates remain at today's historical low levels. We have undertaken a cost-cutting initiative to decrease our daily vessel operating expenses. We are also exploring raising additional equity from both capital markets and private investors.
Given these facts we cannot provide any assurance that we will in fact operate our business profitably, generate sufficient revenue and operating cash flow.
Cash Flows
 
Year ended December 31,
 
 
2015
 
2014
 
2013
 
Cash Flow Data:
     
Net cash (used in) / provided by operating activities
   
(4,737
)
   
(14,858
)
   
1,030
 
Net cash (used in) / provided by investing activities
   
(201,684
)
   
105,895
     
993
 
Net cash provided by / (used in) financing activities
   
206,852
     
(91,239
)
   
(3,246
)

Year ended December 31, 2015, as compared to year ended December 31, 2014
Operating Activities : Net cash used in operating activities amounted to $4.7 million in 2015, consisting of net loss after non-cash items of $6.6 million plus a decrease in working capital of $1.9 million. Net cash used in operating activities amounted to $14.9 million in 2014, consisting of net loss after non-cash items of $5.2 million less an increase in working capital of $9.7 million.
Investing Activities : The 2015 cash outflow resulted from the acquisition of eight vessels during the year. The 2014 cash inflow resulted from the sale of the then four remaining vessels in March 2014 in connection with the delivery and settlement agreement with Piraeus Bank to unwind the related credit facility.
Financing Activities : The 2015 cash inflow resulted from proceeds obtained from loan agreements, common stock issuance and issuance of convertible promissory notes for the acquisition of vessels. The 2014 cash outflow resulted mainly from $94.4 million of principal repayments of our debt that was partially offset by $3.2 million in proceeds from issuance of our common stock.
45

Year ended December 31, 2014, as compared to year ended December 31, 2013
Operating Activities : Net cash used in operating activities amounted to $14.9 million in 2014, consisting of net loss after non-cash items of $5.2 million less an increase in working capital of $9.7 million. Net cash provided by operating activities amounted to $1.0 million in 2013, consisting of net loss after non-cash items of $8.9 million plus a decrease in working capital of $9.9 million.
Investing Activities : The 2014 cash inflow resulted from the sale of the then four remaining vessels in March 2014 in connection with the delivery and settlement agreement with Piraeus Bank to unwind the related credit facility.  The 2013 cash inflow resulted from proceeds of $4 million from the disposal of a vessel, offset by $3 million of cash paid and disposed of upon the disposal of the vessel owning subsidiaries financed by the DVB and the UOB loan facilities.
Financing Activities : The 2014 cash outflow resulted mainly from $94.4 million of principal repayments of our debt that was partially offset by $3.2 million in proceeds from issuance of our common stock.  The 2013 cash outflow resulted from $5.2 million of principal repayments of our debt that was partially offset by the decrease of $2 million in restricted cash upon the disposal of the vessel owning subsidiaries financed by the DVB loan facility.
Loan Arrangements
Credit Facilities
March 2015 Alpha Bank A.E. Loan Facility
On March 6, 2015, we entered into a $8.75 million secured loan facility with Alpha Bank A.E. to partly finance the acquisition of the Leadership . The facility was amended on December 23, 2015. The facility bears interest at LIBOR plus a margin of 3.75% and is repayable in twenty consecutive quarterly installments, the first four installments being $0.2 million each and the next sixteen quarterly installments being $0.25 million each, with a final balloon payment of $3.95 million due on March 17, 2020. The borrower under the facility is our applicable vessel-owning subsidiary, and the facility is guaranteed by Seanergy Maritime Holdings Corp. The facility is secured by a first preferred mortgage over the vessel, a general assignment covering earnings, insurances, charter parties and requisition compensation, an account pledge agreement, and technical and commercial managers' undertaking. The facility also imposes certain operating and financing covenants. Some of these covenants may significantly limit or prohibit, among other things, our ability to incur additional indebtedness, create liens, sell capital shares of subsidiaries, engage in mergers, or sell the vessel without the consent of the lender. Certain other covenants require ongoing compliance, including requirements that we, on a consolidated basis generally maintain from June 30, 2018 a percentage ratio of net debt to total assets that does not exceed 75%, from June 30, 2018 a ratio of EBITDA to net interest expense that is not less than 2:1, and liquidity in a specified amount. In addition, from January 1, 2017 the borrower shall ensure that the market value of the vessel plus any additional security to total facility outstanding shall not be less than 125%. The lender may accelerate the maturity of the facility and foreclose upon the collateral securing the indebtedness upon the occurrence of certain events of default, including a failure to comply with any of the covenants contained in the facility. The facility also places a restriction on our ability to distribute dividends to our shareholders, that is the amount of the dividends so declared shall not exceed 50% of our net income except in case that cash and marketable securities are equal or greater than the amount required to meet our debt service for the following eighteen-month period. In addition, the facility places a restriction on the borrower's ability to make loans or advances to any person, firm, corporation, joint venture or other entity, including Seanergy Maritime Holdings Corp., without the prior written consent of the lender. As of December 31, 2015, $8.2 million was outstanding under the facility, excluding the unamortized financing fees.
HSH Nordbank AG Loan Facility
On September 1, 2015, we entered into a $44.4 million senior secured loan facility with HSH Nordbank AG to finance the acquisition of the Geniuship and Gloriuship . The facility bears interest at LIBOR plus a margin between 3.25% and 3.6% and is repayable in twelve consecutive quarterly instalments of $1.0 million each, commencing on September 30, 2017, with a final balloon payment of $31.8 million due on June 30, 2020.  The borrowers under the facility are the two applicable vessel-owning subsidiaries, and the facility is guaranteed by Seanergy Maritime Holdings Corp. The facility was made available in two advances, each advance comprised of two tranches.  On October 13, 2015, we drew the first advance of $27.6 million in order to the finance the acquisition of the Geniuship.  On November 3, 2015, we drew the second advance of $16.8 million in order to finance the acquisition of the Gloriuship.  The facility is secured by a first priority mortgage over each of the vessels, a general assignment covering earnings, charterparties, insurances and requisition compensation for each of the vessels, an earnings account pledge agreement for each of the vessels, technical and commercial managers' undertaking, a shares security deed of the two borrowers' shares and a master agreement assignment.  The facility also imposes certain operating and financing covenants.  Some of these covenants may significantly limit or prohibit, among other things, our ability to incur additional indebtedness, sell capital shares of subsidiaries, make certain investments, engage in mergers and acquisitions, or sell the vessels without the consent of the lender.  Certain other covenants require ongoing compliance, including requirements that we, on a consolidated basis generally maintain from September 30, 2017 a percentage ratio of total liabilities to total assets that does not exceed 75%, commencing on September 30, 2017 a ratio of EBITDA to interest payments that is not less than 2:1, and liquidity in a specified amount. In addition, from September 30, 2017 the borrowers shall ensure that the market value of the vessels plus any additional security to total facility outstanding shall not be less than 120%. The facility also places a restriction on the borrowers' ability to distribute dividends to Seanergy Maritime Holdings Corp., in case the market values of Geniuship and Gloriuship plus any additional security is less than 145% of total facility outstanding and the cash balance of the borrowers post distribution of dividends is less than $3 million. The latter restriction applies not later than December 31, 2016. As of December 31, 2015, $44.4 million was outstanding under the facility, excluding the unamortized financing fees.
46

Unicredit Bank AG Loan Facility
On September 11, 2015, we entered into a $52.7 million secured term loan facility with Unicredit Bank AG to partly finance the acquisition of the Premiership , Gladiatorship and Guardianship .  The facility bears interest at LIBOR plus a margin of between 2.75% and 3.20% and is repayable in fifteen consecutive quarterly instalments of $1.6 million each, commencing on June 26, 2017, with a final balloon payment of $29.4 million due on December 28, 2020. The borrowers under the facility are the three applicable vessel-owning subsidiaries, and the facility is guaranteed by Seanergy Maritime Holdings Corp.  The facility was made available in three tranches.  On September 11, 2015, we drew the first tranche of $25.4 million to partly finance the acquisition of the Premiership.  On September 29, 2015, we drew the second tranche of $13.6 million to partly finance the acquisition of the Gladiatorship.  On October 21, 2015, we drew the third tranche of $13.6 million to partly finance the acquisition of the Guardianship. The facility is secured by a first preferred mortgage over each of the relevant vessels, a general assignment covering earnings, charterparties, insurances and requisition compensation for each of the vessels, an account pledge agreement for each of the vessels, technical and commercial managers' undertaking, a shares security deed of the three applicable vessel owning subsidiaries' shares and a hedging agreement assignment.  The facility also imposes certain operating and financing covenants.  Some of these covenants may significantly limit or prohibit, among other things, our ability to incur additional indebtedness, create liens, engage in mergers, or sell the vessels without the consent of the lender.  Certain other covenants require ongoing compliance, including requirements that we, on a consolidated basis generally maintain from September 30, 2017 a percentage ratio of total liabilities to total assets that does not exceed 75%, from September 30, 2017 a ratio of EBITDA to net interest expense that is not less than 2:1, and liquidity in a specified amount. In addition, from September 11, 2016 and from September 11, 2017 the borrowers shall ensure that the market value of the vessels plus any additional security and minimum liquidity to total facility outstanding shall not be less than 100% and 120%, respectively.  As of December 31, 2015, $52.7 million was outstanding under the facility, excluding the unamortized financing fees.
November 2015 Alpha Bank A.E. Loan Facility
On November 4, 2015, we entered into a $33.8 million secured loan facility with Alpha Bank A.E. to partly finance the acquisition of the Squireship .  The facility bears interest at LIBOR plus a margin of 3.50% and is repayable in sixteen consecutive quarterly instalments of $0.8 million each, commencing on February 12, 2018, with a final balloon payment of $20.3 million due on November 10, 2021. The borrower under the facility is our applicable vessel-owning subsidiary, and the facility is guaranteed by Seanergy Maritime Holdings Corp.  The facility is secured by a first preferred mortgage over the vessel, a general assignment covering earnings, insurances, charterparties and requisition compensation, an account pledge agreement, and technical and commercial managers' undertaking. The facility also imposes certain operating and financing covenants.  Some of these covenants may significantly limit or prohibit, among other things, our ability to incur additional indebtedness, create liens, sell capital shares of subsidiaries, engage in mergers, or sell the vessel without the consent of the lender. Certain other covenants require ongoing compliance, including requirements that we, on a consolidated basis generally maintain from June 30, 2018 a percentage ratio of net debt to total assets that does not exceed 75%, from June 30, 2018 a ratio of EBITDA to net interest expense that is not less than 2:1, and liquidity in a specified amount. In addition, from January 1, 2018 the borrower shall ensure that the market value of the vessel plus any additional security to total facility outstanding shall not be less than 125%.  The facility also places a restriction on our ability to distribute dividends to our shareholders, that is the amount of the dividends so declared shall not exceed 50% of our net income except in case that cash and marketable securities are equal or greater than the amount required to meet our debt service for the following eighteen-month period.  In addition, the facility places a restriction on the borrower's ability to make loans or advances to any person, firm, corporation, joint venture or other entity, including Seanergy Maritime Holdings Corp., without the prior written consent of the lender. As of December 31, 2015, $33.8 million was outstanding under the facility, excluding the unamortized financing fees.
Natixis Loan Facility
On December 2, 2015, we entered into a $39.4 million secured term loan facility with Natixis to partly finance the acquisition of the Championship .  The facility bears interest at LIBOR plus a margin of 2.50% and is repayable in fifteen consecutive quarterly instalments of $1.0 million each, commencing on June 30, 2017, with a final balloon payment of $24.6 million due on February 26, 2021. The borrower under the facility is our applicable vessel-owning subsidiary, and the facility is guaranteed by Seanergy Maritime Holdings Corp. The facility is secured by a first priority mortgage over the vessel, a general assignment covering earnings, insurances and requisition compensation, an account pledge agreement, a commercial manager undertaking and a technical manager undertaking.  The facility also imposes certain operating and financing covenants.  Some of these covenants may significantly limit or prohibit, among other things, our ability to incur additional indebtedness, create liens, engage in mergers, or sell the vessel without the consent of the lender.  Certain other covenants require ongoing compliance, including requirements that we maintain from January 1, 2018 a percentage ratio of total liabilities to total assets that does not exceed  75%, from January 1, 2018 a ratio of EBITDA to net interest expense that is not less than 2:1, and cash and cash equivalents in a specified amount. In addition, from February 1, 2017 the borrower shall ensure that the market value of the vessel plus any additional security to total facility outstanding shall not be less than 120%. As of December 31, 2015, $39.4 million was outstanding under the facility, excluding the unamortized financing fees.
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Convertible Promissory Notes

On March 12, 2015, we issued an unsecured convertible promissory note for $4.0 million to Jelco. The note is repayable in ten consecutive semi-annual installments of $0.2 million, along with a balloon installment of $2.0 million payable on the final maturity date, March 19, 2020. The note bears interest at three month LIBOR plus a margin of 5% with interest payable quarterly. The Company has the right to defer up to three consecutive installments to the balloon installment. As of the date of this annual report the Company has deferred the installment due for payment on March 19, 2016 to the balloon installment. At Jelco's option, the principal amount under the convertible note may be paid at any time in common shares at a conversion price of $0.90 (adjusted for the reverse stock split discussed above according to the terms of the convertible note) per share.  The holder also received customary registration rights with respect to any shares received upon conversion of the note.  As of December 31, 2015, $3.8 million was outstanding under the note.
On September 7, 2015, we issued an unsecured revolving convertible promissory note to Jelco for an amount up to $6.8 million, or the Applicable Limit. Following four amendments to the note between December 2015 and March 2016, the Applicable Limit was raised to $16.3 million. The Applicable Limit will be reduced by $2.5 million each year after the second year following September 10, 2015. The aggregate outstanding principal is repayable on September 10, 2020, however, principal is also repayable earlier to the extent that the aggregate outstanding principal exceeds the Applicable Limit (as it may be reduced from time to time). The note bears interest at three month LIBOR plus a margin of 5% with interest payable quarterly. At Jelco's option, the Company's obligation to repay the principal amount under the revolving convertible note is payable in common shares at a conversion price of $0.90 (adjusted for the reverse stock split discussed above according to the terms of the convertible note) per share. The holder also received customary registration rights with respect to any shares received upon conversion of the note.  As of December 31, 2015, $11.8 million was outstanding under the note.
Capital Requirements
In addition to principal repayments and interest payments on outstanding debt obligations described above, capital expenditures relate to the routine drydocking of our vessels. The expected cost of the scheduled maintenance that will take place in 2016 is $0.5 million.
C.              Research and development, patents and licenses, etc.
Not applicable.
D.              Trend Information
Our results of operations depend primarily on the charter hire rates that we are able to realize for our owned vessels, which depend on the demand and supply dynamics characterizing the drybulk freight market at any given time. The BDI has long been viewed as the main benchmark to monitor the movements of the drybulk vessel charter market and the performance of the entire drybulk shipping market. In 2013, the BDI ranged from a low of 698 in January to a high of 2,337 in December 2013. In 2014, the BDI ranged from a high of 2,113 in January to a low of 723 in July. In 2015, the BDI ranged from a high of 1,222 in August to a low of 471 in December. The BDI recorded a record low of 290 in February 2016.
The decline and volatility in charter hire rates in the drybulk market reflects in part the fact that the supply of drybulk vessels in the market has been increasing. Demand for drybulk vessel services is influenced by global financial conditions. Global financial conditions remain volatile and demand for drybulk services may decrease in the future. The combination of increasing drybulk capacity (both current and expected) and decreasing demand or demand which is not offset by the increase in drybulk capacity may result in reductions in charter hire rates and, as a consequence, adversely affect our operating results.
E.              Off-balance Sheet Arrangements
We do not have any off-balance sheet arrangements.
F.              Tabular Disclosure of Contractual Obligations
The following table sets forth our contractual obligations as of December 31, 2015 (in thousands of U.S. Dollars):
Contractual Obligations
 
Total
   
less than 1 year
   
1-3 years
   
3-5 years
   
more than 5 years
 
Long-term debt
 
$
178,447
   
$
950
   
$
29,431
   
$
99,804
   
$
48,262
 
Convertible promissory notes
   
15,565
     
400
     
4,800
     
10,365
     
-
 
Interest expense - long term debt
   
32,386
     
6,897
     
13,539
     
10,556
     
1,394
 
Interest expense - convertible  promissory notes
   
3,924
     
994
     
1,790
     
1,140
     
-
 
Total
 
$
230,322
   
$
9,241
   
$
49,560
   
$
121,865
   
$
49,656
 
                                         

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G.              Safe Harbor
See the section titled "Cautionary Statement Regarding Forward-Looking Statements" at the beginning of this annual report.
ITEM 6.
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A.              Directors and Senior Management
Set forth below are the names, ages and positions of our current directors and executive officers. Members of our board of directors are elected annually on a staggered basis, and each director elected holds office for a three-year term. Officers are elected from time to time by vote of our board of directors and hold office until a successor is elected. The business address of each of our directors and executive officers listed below is 16 Grigoriou Lambraki Street, 166 74 Glyfada, Athens, Greece.
  Name
 
Age
   
Position
 
Director Class
Stamatios Tsantanis
 
43
   
Chairman, Chief Executive Officer, Interim Chief Financial Officer & Director
 
A (term expires in 2016)
Christina Anagnostara
 
44
   
Director
 
B (term expires in 2017)
Elias Culucundis
 
73
   
Director
 
A (term expires in 2016)
Dimitris Anagnostopoulos
 
68
   
Director
 
C (term expires in 2018)

Biographical information with respect to each of our directors and our executive officer is set forth below.
Stamatios Tsantanis has been a member of our board of directors and our chief executive officer since October 1, 2012. Mr. Tsantanis has also been the Chairman of our Board of Directors since October 1, 2013 and our Interim Chief Financial Officer since November 1, 2013. Mr. Tsantanis brings more than 17 years of experience in shipping and finance and held senior management positions in prominent shipping companies. Prior to joining us, from September 2008 he served as Group Chief Financial Officer of Target Marine S.A. and was responsible for its corporate and financial strategy. Mr. Tsantanis previously served as the Chief Financial Officer and as a Director of Top Ships Inc. from its initial public offering and listing on NASDAQ in 2004 until September 2008. Prior to that, he was an investment banker at Alpha Finance, a member of the Alpha Bank Group, with active role in a number of shipping corporate finance transactions. Mr. Tsantanis holds a Masters degree in Shipping Trade and Finance from the City University Business School in London, and a Bachelors degree in Shipping Economics from the University of Piraeus.
Christina Anagnostara served as our chief financial officer from November 17, 2008 until October 31, 2013 and has served as a member of our board of directors since December 2008. From February 2007 to November 2008, she served as chief financial officer and a board member for Global Oceanic Carriers Ltd, a drybulk shipping company listed on the Alternative Investment Market of the London Stock Exchange, or AIM. Between 1999 and 2006, she was a senior manager at EFG Audit & Consulting Services, the auditors of the Geneva-based EFG Group, an international banking group specializing in global private banking and asset management. Prior to working at EFG Group, she worked from 1998 to 1999 in the internal audit group of Eurobank EFG, a bank with a leading position in Greece; and between 1995 and 1998 as a senior auditor at Ernst & Young Hellas, SA, Greece, the international auditing firm. Ms. Anagnostara studied Economics in Athens and has been a Certified Chartered Accountant since 2002.
Elias Culucundis has been a member of our board of directors since our inception. Since 2006, Mr. Culucundis has been an executive member of the board of directors of Hellenic Duty Free Shops S.A. Since 1999, Mr. Culucundis has been president, chief executive officer and director of Equity Shipping Company Ltd., a company specializing in starting, managing and operating commercial and technical shipping projects. From 2002 until 2010, Mr. Culucundis was a member of the board of directors of Folli Follie S.A. Additionally, from 1996 to 2000, he was a director of Kassian Maritime Shipping Agency Ltd., a vessel management company operating a fleet of ten bulk carriers. During this time, Mr. Culucundis was also a director of Point Clear Navigation Agency Ltd, a marine project company. From 1981 to 1995, Mr. Culucundis was a director of Kassos Maritime Enterprises Ltd., a company engaged in vessel management. While at Kassos, he was initially a technical director and eventually ascended to the position of chief executive officer, overseeing a large fleet of Panamax, Aframax and VLCC tankers, as well as overseeing new vessel building contracts, specifications and the construction of new vessels. From 1971 to 1980, Mr. Culucundis was a director and the chief executive officer of Off Shore Consultants Inc. and Naval Engineering Dynamics Ltd. Off Shore Consultants Inc. He worked in Floating Production, Storage and Offloading vessel, or FPSO, design and construction and responsible for the technical and commercial supervision of a pentagon-type drilling rig utilized by Royal Dutch Shell plc. Seven FPSOs were designed and constructed that were subsequently utilized by Pertamina, ARCO, Total and Elf-Aquitaine. Naval Engineering Dynamics Ltd. was responsible for purchasing, re-building and operating vessels that had suffered major damage. From 1966 to 1971, Mr. Culucundis was employed as a Naval Architect for A.G. Pappadakis Co. Ltd., London, responsible for tanker and bulk carrier new buildings and supervising the technical operation of our fleet. He is a graduate of Kings College, Durham University, Great Britain, with a degree in Naval Architecture and Shipbuilding. He is a member of several industry organizations, including the Council of the Union of Greek Shipowners and American Bureau of Shipping. Mr. Culucundis is a fellow of the Royal Institute of Naval Architects and a Chartered Engineer.
49

Dimitris Anagnostopoulos has been a member of our board of directors since May 2009. Mr. Anagnostopoulos has over forty years of experience in shipping and ship finance. His career began in the 1970's at Athens University of Economics followed by four years with the Onassis Group in Monaco. Mr. Anagnostopoulos has also held various posts at the National Investment Bank of Industrial Development (ETEBA), Continental Illinois National Bank of Chicago, the Greyhound Corporation, and with ABN AMRO, where he has spent nearly two decades with the Bank as Senior Vice-President and Head of Shipping. In June 2010 he was elected a board member of the Aegean Baltic Bank S.A. Mr. Anagnostopoulos has been a speaker and panelist in various shipping conferences in Europe, and a regular guest lecturer at the City University Cass Business School in London and the Erasmus University in Rotterdam. He is a member (and ex-vice chairman) of the Association of Banking and Financial Executives of Greek Shipping. In 2008 he was named by the Lloyd's Organization as Shipping Financier of the Year.
No family relationships exist among any of the directors and executive officers.
B.              Compensation
For the year ended December 31, 2015, we paid our executive officers and directors aggregate compensation of $0.3 million. Our executive officers are employed by us pursuant to employment and consulting contracts.
Each member of our board of directors receives a fee of $20,000 per year. The Shipping Committee fee has been suspended from July 1, 2013 until the Board of Directors decides otherwise. The aggregate director fees paid by us for the years ended December 31, 2015, 2014 and 2013 totaled $80,000, $80,000 and $263,500, respectively.
On January 12, 2011 our board of directors adopted the Seanergy Maritime Holdings Corp. 2011 Equity Incentive Plan, or the Plan. The Plan was amended and restated on July 2, 2015, to increase the aggregate number of shares of our common stock reserved for issuance under the Plan from 583,334 shares to 4,283,334 shares. The Plan is administered by the Compensation Committee of our board of directors. Under the Plan, our officers, key employees, directors, consultants and service providers may be granted incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, unrestricted stock, restricted stock units, and unrestricted stock at the discretion of our Compensation Committee. Any awards granted under the Plan that are subject to vesting are conditioned upon the recipient's continued service as an employee or a director of the Company, through the applicable vesting date.
On October 1, 2015, the Compensation Committee granted an aggregate of 189,000 restricted shares of common stock, pursuant to the Plan. Of the total 189,000 shares issued, 36,000 shares were granted to Seanergy's board of directors and the other 153,000 shares were granted to certain of Seanergy's other employees. The fair value of each share on the grant date was $3.70 and will be expensed over three years. The shares to Seanergy's board of directors will vest over a period of two years commencing on October 1, 2015. On October 1, 2015, 12,000 shares vested, 12,000 shares will vest on October 1, 2016 and 12,000 shares will vest on October 1, 2017. All the shares granted to certain of Seanergy's employees will vest over a period of three years, commencing on October 1, 2015. On October 1, 2015, 25,000 shares vested, 33,000 shares will vest on October 1, 2016, 44,000 shares will vest on October 1, 2017 and 51,000 shares will vest on October 1, 2018.
C.              Board Practices
Our directors do not have service contracts and do not receive any benefits upon termination of their directorships. Our board of directors has an audit committee, a compensation committee, a nominating committee and a shipping committee. Our board of directors has adopted a charter for each of these committees.
Audit Committee
Our audit committee consists of Messrs. Dimitris Anagnostopoulos and Elias Culucundis. Our board of directors has determined that the members of the audit committee meet the applicable independence requirements of the Commission and the NASDAQ Stock Market Rules. Our board of directors has determined that Mr. Dimitris Anagnostopoulos is an "Audit Committee Financial Expert" under the Commission's rules and the corporate governance rules of the NASDAQ Stock Market.
The audit committee has powers and performs the functions customarily performed by such a committee (including those required of such a committee by NASDAQ and the Commission). The audit committee is responsible for selecting and meeting with our independent registered public accounting firm regarding, among other matters, audits and the adequacy of our accounting and control systems.
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Compensation Committee
Our compensation committee consists of Messrs. Dimitris Anagnostopoulos and Elias Culucundis, each of whom is an independent director. The compensation committee reviews and approves the compensation of our executive officers.
Nominating Committee
Our nominating committee consists of Messrs. Elias Culucundis and Dimitris Anagnostopoulos, each of whom is an independent director. The nominating committee is responsible for overseeing the selection of persons to be nominated to serve on our board of directors.
Shipping Committee
We have established a shipping committee. The purpose of the shipping committee is to consider and vote upon all matters involving shipping and vessel finance in order to accelerate the pace of our decision making in respect of shipping business opportunities, such as the acquisition of vessels or companies. The shipping industry often demands very prompt review and decision-making with respect to business opportunities. In recognition of this, and in order to best utilize the experience and skills that our directors bring to us, our board of directors has delegated all such matters to the shipping committee. Transactions that involve the issuance of our securities or transactions that involve a related party, however, shall not be delegated to the shipping committee but instead shall be considered by the entire board of directors. The shipping committee consists of three directors. In accordance with the Amended and Restated Charter of the Shipping Committee, two of the directors on the shipping committee are nominated by Jelco and one of the directors on the shipping committee is nominated by a majority of our board of directors and is an independent member of the board of directors. The members of the shipping committee are Mr. Stamatios Tsantanis and Ms. Christina Anagnostara, who are Jelco's nominees, and Mr. Elias Culucundis, who is the Board's nominee.
In order to assure the continued existence of the shipping committee, our board of directors has agreed that the shipping committee may not be dissolved and that the duties or composition of the shipping committee may not be altered without the affirmative vote of not less than 80% of our board of directors. In addition, the duties of our chief executive officer, who is currently Mr. Tsantanis, may not be altered without a similar vote. These duties and powers include voting the shares of stock that Seanergy owns in its subsidiaries. In addition to these agreements, we have amended certain provisions in its articles of incorporation and by-laws to incorporate these requirements.
As a result of these various provisions, in general, all shipping-related decisions will be made by Jelco's appointees to our board of directors unless 80% of the board members vote to change the duties or composition of the shipping committee.
D.              Employees
We currently have one executive officer, Mr. Stamatios Tsantanis. In addition, we employ Ms. Theodora Mitropetrou, our general counsel, and a support staff of sixteen employees.
E.              Share Ownership
The shares of our common stock beneficially owned by our directors and executive officers are disclosed below in "Item 7. Major Shareholders and Related Party Transactions."
ITEM 7.
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

A.             Major Shareholders
The following table sets out information, of which we are aware as of the date of this annual report, regarding the beneficial ownership of our common shares by (i) the owners of more than five percent of our outstanding common shares and (ii) our directors and executive officers. All of the shareholders, including the shareholders listed in this table, are entitled to one vote for each common share held.
Title of Class
Identity of Person or Group
 
Number of
Shares Owned
   
Percent of Class
 
Claudia Restis (1) 
   
39,058,220
     
93.4
%
All directors and executive officers as a group (4 individuals) 
   
369,533
     
1.9
%

51

All shares owned by the shareholders listed in the table above have the same voting rights as other shares of our common stock.
(1)             Claudia Restis is the beneficial owner of 38,427,008 of these shares through Jelco and of 853,434 of these shares through Comet, each of which is controlled through a revocable trust of which she is beneficiary.  The shares she may be deemed to beneficially own through Jelco include (i) 4,222,223 shares of which Jelco may be deemed to beneficially own, issuable upon exercise of a conversion option pursuant to the Convertible Promissory Note dated March 12, 2015, issued by the Company to Jelco and (ii) 18,072,223 shares which Jelco may be deemed to beneficially own, issuable upon exercise of a conversion option pursuant to the Convertible Promissory Note dated September 7, 2015, as amended on December 1, 2015, December 14, 2015, January 27, 2016 and March 7, 2016, issued by the Company to Jelco. This beneficial ownership represents an increase from the 87.5% beneficial ownership reported in the Company's annual report on Form 20-F for the year ended December 31, 2014, filed with the Commission on April 21, 2015.   
As disclosed in the Schedule 13D/A filed September 9, 2014 and the Schedule 13D filed June 10, 2015, United Capital Investments Corp., Atrion Shipholding S.A. and Plaza Shipholding Corp., affiliates of members of the Restis family, previously reported beneficial ownership of more than five percent of our outstanding common shares.  However based on the current number of our outstanding common shares and the share ownership reported in such Schedule 13D/A and Schedule 13D (as adjusted for the 1-for-5 reverse stock split discussed elsewhere), we believe that United Capital Investments Corp., Atrion Shipholding S.A. and Plaza Shipholding Corp. each currently beneficially owns less than five percent of our outstanding common shares.
B.              Related Party Transactions
Agreement for the Acquisition of Seven Vessels
On August 6, 2015, we entered into a purchase agreement with entities affiliated with certain of our principal shareholders to acquire seven secondhand drybulk vessels, consisting of five Capesize and two Supramax vessels, for an aggregate purchase price of $183.4 million. These included all of the vessels in our current fleet other than Leadership .  We took delivery of the seven vessels between September and December 2015.  The acquisition costs of the seven vessels were funded with proceeds from a $44.4 million senior secured loan facility with HSH Nordbank AG to finance the acquisition of the Geniuship and Gloriuship , a $52.7 million secured term loan facility with Unicredit Bank AG to partly finance the acquisition of the Premiership , Gladiatorship and Guardianship , a $33.8 million secured loan facility with Alpha Bank A.E. to partly finance the acquisition of the Squireship , a $39.4 million secured term loan facility with Natixis to partly finance the acquisition of the Championship , the Share Purchase Agreement and an unsecured revolving convertible promissory note issued to Jelco initially for an amount up to $6.8 million.  For more information regarding our current loan facilities and convertible promissory notes, please see "Item 5. Operating and Financial Review and Prospects–B. Liquidity and Capital Resources."
Share Purchase Agreements
On June 24, 2014 we entered into a share purchase agreement with Plaza and Comet, which are all companies affiliated with the Restis family, under which we sold 378,000 of our common shares for $1.134 million and on the same date we entered into a registration rights agreement in connection with a share purchase agreement discussed above, under which we sold 378,000 of our common shares to each of Plaza and Comet. Our Board of Directors obtained a fairness opinion from an independent third party for the share price. The price was determined using a build-up method, combining the our net asset value with the cost that a private company would incur to be listed on a U.S. stock exchange and with an additional option value to existing shareholders upon the consummation of the Asset Contribution calculated from the Black-Scholes options pricing model. On June 27, 2014, we completed the equity injection plan with the two abovementioned entities. The shares to the two entities were issued on June 27, 2014.
On September 29, 2014 we entered into a share purchase agreement with Plaza and Comet, which are all companies affiliated with the Restis family, under which we sold 320,000 of our common shares for $0.96 million and on the same date we entered into a registration rights agreement in connection with a share purchase agreement discussed above, under which we sold 320,000 of our common shares to each of Plaza and Comet. Our Board of Directors obtained an updated fairness opinion from an independent third party for the share price. The price was determined using a build-up method, combining the our net asset value with the cost that a private company would incur to be listed on a U.S. stock exchange and with an additional option value to existing shareholders upon the consummation of the Asset Contribution calculated from the Black-Scholes options pricing model.  On September 30, 2014, we completed the equity injection plan with the two abovementioned entities. The shares to the two entities were issued on September 30, 2014.
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On December 19, 2014 we entered into a share purchase agreement with Jelco, an entity affiliated with one of our major shareholders, under which we sold 888,000 of our common shares for $1.11 million and on the same date we entered into a registration rights agreement in connection with a share purchase agreement discussed above, under which we sold 888,000 of our common shares to each of Plaza and Comet. Our Board of Directors obtained a fairness opinion from an independent third party for the share price. The price was determined using a build-up method, combining our net asset value with the cost that a private company would incur to be listed on a U.S. stock exchange. On December 30, 2014, we completed the equity injection plan with the abovementioned entity. The shares to the entity were issued on December 30, 2014.
On March 12, 2015 we entered into a share purchase agreements with Jelco, an entity affiliated with one of our major shareholders, and Stamatios Tsantanis, our Chairman, Chief Executive Officer and Interim Chief Financial Officer, under which we sold 5,000,100 of our common shares to Jelco, for $4.5 million and 333,400of our common shares Mr. Tsantanis, for $0.3 million and on the same date we entered into registration rights agreements with Jelco and Mr. Tsantanis with respect to these common shares. Our Board of Directors obtained fairness opinions from an independent third party for the share price. The price was determined using a build-up method, combining our net asset value with the cost that a private company would incur to be listed on a U.S. stock exchange.
On September 7, 2015, the Company entered into a share purchase agreement under which the Company sold 10,022,240 of its common shares in three tranches to Jelco for $9.0 million. The common shares were sold at a price of $0.90 per share. The Company's Board of Directors obtained a fairness opinion from an independent third party for the share price. The price was determined using the capital market multiples and the discounted cash flow methods. On September 11, 2015, the first tranche of 3,889,980 common shares was sold for $3.5 million. On September 29, 2015, the second tranche of 2,655,740 common shares was sold for $2.4 million. On October 21, 2015, the third tranche of 3,476,520 common shares was sold for $3.1 million. The transaction was approved by an independent committee of the Company's Board of Directors.
Convertible Promissory Notes
On March 12, 2015, we issued an unsecured convertible promissory note for $4.0 million to Jelco. The note is repayable in ten consecutive semi-annual installments of $0.2 million, along with a balloon installment of $2.0 million payable on the final maturity date, March 19, 2020. The note bears interest at three month LIBOR plus a margin of 5% with interest payable quarterly. The Company has the right to defer up to three consecutive installments to the balloon installment. As of the date of this annual report the Company has deferred the installment due for payment on March 19, 2016 to the balloon installment. At Jelco's option, the principal amount under the convertible note may be paid at any time in common shares at a conversion price of $0.90 (adjusted for the reverse stock split discussed above according to the terms of the convertible note) per share.  The holder also received customary registration rights with respect to any shares received upon conversion of the note.  As of December 31, 2015, $3.8 million was outstanding under the note.
On September 7, 2015, we issued an unsecured revolving convertible promissory note to Jelco for an amount up to $6.8 million, or the Applicable Limit. Following four amendments to the note between December 2015 and March 2016, the Applicable Limit was raised to $16.3 million. The Applicable Limit will be reduced by $2.5 million each year after the second year following September 10, 2015. The aggregate outstanding principal is repayable on September 10, 2020, however, principal is also repayable earlier to the extent that the aggregate outstanding principal exceeds the Applicable Limit (as it may be reduced from time to time). The note bears interest at three month LIBOR plus a margin of 5% with interest payable quarterly. At Jelco's option, the Company's obligation to repay the principal amount under the revolving convertible note is payable in common shares at a conversion price of $0.90 (adjusted for the reverse stock split discussed above according to the terms of the convertible note) per share. The holder also received customary registration rights with respect to any shares received upon conversion of the note.  As of December 31, 2015, $11.8 million was outstanding under the note.
Commercial Real Estate Sublease Agreement
We previously leased our executive office space in Athens, Greece pursuant to the terms of a sublease agreement between Seanergy Management and Waterfront S.A., a company affiliated with a member of the Restis family. The initial sublease was subsequently amended, including on January 1, 2015 to provide that for the remaining term of the sublease agreement the sublease fee would be EUR 25,000 and that the term of the agreement was extended to January 31, 2015, on February 1, 2015 to extend the sublease term to February 28, 2015, and on March 13, 2015 to extend the sublease term to March 15, 2015, at a lease payment of EUR 12,500, following which we relocated our executive office space to premises owned by an unaffiliated third party.
53

C.              Interests of Experts and Counsel
Not applicable.
ITEM 8.
 
FINANCIAL INFORMATION

A.             Consolidated Statements and Other Financial Information
See Item 18.
Legal Proceedings
We have previously reported that in 2010, certain of our then shareholders, including George Koutsolioutsos, who was also the former Chairman of the Board of the Company, brought suit in Greece against certain other shareholders of the Company, our former Chief Financial Officer, and the immediate successor to Mr. Koutsolioutsos as our Chairman. The suit seeks damages from the defendants for alleged willful misconduct that purportedly caused the plaintiffs damage both by way of diminution of the value of their shares in the Company and harm to their reputations. The defendants have advised us that they do not believe the action has merit, and that they intend vigorously to defend it. The next hearing date in this action is currently scheduled for May 26, 2016.
Mr. Koutsolioutsos also commenced three actions in Greece during 2014 against his immediate successor as our Chairman, on substantially the same or related set of grounds. The plaintiff seeks money damages in two of these cases. The next hearing date in these actions is also currently scheduled for May 26, 2016. The third case, in which the plaintiff sought an injunction, was discontinued by the plaintiff in September 2014.
Neither we nor our current Chairman is named in any of these actions. We have notified our insurance underwriters of these actions, and our underwriters are advancing a portion of the defendants' legal expenses.
Dividend Policy
The declaration, timing and amount of any dividend is subject to the discretion of our board of directors and will be dependent upon our earnings, financial condition, market prospects, capital expenditure requirements, investment opportunities , restrictions in our loan agreements, the provisions of Marshall Islands law affecting the payment of dividends to shareholders, overall market conditions and other factors. Our board of directors may review and amend our dividend policy from time to time in light of our plans for future growth and other factors.  In addition, since we are a holding company with no material assets other than the shares of our subsidiaries and affiliates through which we conduct our operations, our ability to pay dividends will depend on our subsidiaries and affiliates distributing to us their earnings and cash flow. Some of our loan agreements limit our and our subsidiaries' and affiliates' ability to make distributions to us.
B.              Significant Changes
There have been no significant changes since the date of the consolidated financial statements included in this annual report.
ITEM 9.
 
THE OFFER AND LISTING

A.              Offer and Listing Details
Our common shares trade on the NASDAQ Capital Market under the symbol "SHIP."  The following table sets forth the high and low closing prices for each of the periods indicated for our shares of common stock, as adjusted for the 5-for-1 reverse stock split effective January 8, 2016 and for 15-for-1 reverse stock split effective June 24, 2011.
   
 
   
 
 
For the Year Ended   December 31,
 
High
   
Low
 
2015
 
$
6.75
   
$
2.75
 
2014
 
$
9.95
   
$
4.13
 
2013
 
$
12.30
   
$
4.00
 
2012
 
$
21.15
   
$
5.20
 
2011
 
$
74.18
   
$
10.31
 
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For the Quarter Ended
 
High
   
Low
 
March 31, 2016
 
$
5.54
   
$
1.58
 
December 31, 2015
 
$
4.35
   
$
3.00
 
September 30, 2015
 
$
6.75
   
$
3.02
 
June 30, 2015
 
$
4.10
   
$
2.75
 
March 31, 2015
 
$
4.50
   
$
3.25
 
December 31, 2014
 
$
8.80
   
$
4.13
 
September 30, 2014
 
$
9.15
   
$
6.75
 
June 30, 2014
 
$
8.70
   
$
6.40
 
March 31, 2014
 
$
9.95
   
$
6.55
 

For the Month Ended
 
High
   
Low
 
April 1, 2016 through April 19, 2016
  $ 3.01     $ 2.36  
March 2016
 
$
3.87
   
$
2.52
 
February 2016
 
$
4.72
   
$
2.41
 
January 2016
 
$
5.54
   
$
1.58
 
December 2015
 
$
3.45
   
$
3.00
 
November 2015
 
$
3.65
   
$
3.16
 
October 2015
 
$
4.35
   
$
3.35
 

B.              Plan of Distribution
Not applicable.
C.              Markets
Our common stock trades on the NASDAQ Capital Market under the symbol "SHIP."
D.              Selling Shareholders
Not applicable.
E.              Dilution
Not applicable.
F.              Expenses of the Issue
Not applicable.
ITEM 10.
 
ADDITIONAL INFORMATION

A.              Share Capital
Not applicable.
B.              Memorandum and Articles of Incorporation
Our amended and restated articles of incorporation have been filed in the Annex to Seanergy Maritime's proxy statement filed with the Commission on Form 6-K on July 31, 2008. Those amended and restated articles of incorporation contained in such Annex are incorporated by reference. Our second amended and restated bylaws have been filed with the Commission on Form 6-K on July 20, 2011, which we incorporate by reference.  We also incorporate by reference, the section titled "Description of Capital Stock" in our Registration Statement on Form F-3 (Registration No. 333-205301), declared effective by the Commission on August 17, 2015.
C.              Material contracts
Attached as exhibits to this annual report are the contracts we consider to be both material and outside the ordinary course of business during the two-year period immediately preceding the date of this annual report. We refer you to "Item 4. Information on the Company–A. History and Development of the Company,"  "Item 4. Information on the Company–B. Business Overview," "Item 5. Operating and Financial Review and Prospects–B. Liquidity and Capital Resources–Loan Arrangements," and "Item 7. Major Shareholders and Related Party Transactions–B. Related Party Transactions" for a discussion of these contracts.  Other than as discussed in this annual report, we have no material contracts, other than contracts entered into in the ordinary course of business, to which we are a party.
55

D.              Exchange controls
Under Marshall Islands law, there are currently no restrictions on the export or import of capital, including foreign exchange controls, or restrictions that affect the remittance of dividends, interest or other payments to non-resident holders of shares of our common stock.
E. Taxation
The following is a summary of the material U.S. federal income tax and Marshall Islands tax consequences of the ownership and disposition of our common stock as well as the material U.S. federal and Marshall Islands income tax consequences applicable to us and our operations. The discussion below of the U.S. federal income tax consequences to "U.S. Holders" will apply to a beneficial owner of our common stock that is treated for U.S. federal income tax purposes as:
· an individual citizen or resident of the United States;
· a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) that is created or organized (or treated as created or organized) in or under the laws of the United States, any state thereof or the District of Columbia; or
· an estate whose income is includible in gross income for U.S. federal income tax purposes regardless of its source; or a trust if (i) a U.S. court can exercise primary supervision over the trust's administration and one or more U.S. persons are authorized to control all substantial decisions of the trust, or (ii) it has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.
If you are not described as a U.S. Holder and are not an entity treated as a partnership or other pass-through entity for U.S. federal income tax purposes, you will be considered a "Non-U.S. Holder." The U.S. federal income tax consequences applicable to Non-U.S. Holders is described below under the heading "United States Federal Income Taxation of Non-U.S. Holders."
This discussion does not consider the tax treatment of partnerships or other pass-through entities or persons who hold our common stock through such entities. If a partnership (or other entity classified as a partnership for U.S. federal income tax purposes) is the beneficial owner of our common stock, the U.S. federal income tax treatment of a partner in the partnership generally will depend on the status of the partner and the activities of the partnership.
This summary is based on the U.S. Internal Revenue Code of 1986. as amended, or the Code, its legislative history, Treasury Regulations promulgated thereunder, published rulings and court decisions, all as currently in effect. These authorities are subject to change, possibly on a retroactive basis.
This summary does not address all aspects of U.S. federal income taxation that may be relevant to any particular holder based on such holder's individual circumstances. In particular, this discussion considers only holders that will own and hold our common stock as capital assets within the meaning of Section 1221 of the Code and does not address the potential application of the alternative minimum tax or the U.S. federal income tax consequences to holders that are subject to special rules, including:
· financial institutions or "financial services entities";
· broker-dealers;
· taxpayers who have elected mark-to-market accounting;
· tax-exempt entities;
· governments or agencies or instrumentalities thereof;
· insurance companies;
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· regulated investment companies;
· real estate investment trusts;
· certain expatriates or former long-term residents of the United States;
· persons that actually or constructively own 10% or more of our voting shares;
· persons that hold our warrants;
· persons that hold our common stock or warrants as part of a straddle, constructive sale, hedging, conversion or other integrated transaction; or
· persons whose functional currency is not the U.S. dollar.
This summary does not address any aspect of U.S. federal non-income tax laws, such as gift or estate tax laws, or state, local or non-U.S. tax laws.
We have not sought, nor will we seek, a ruling from the Internal Revenue Service, or the IRS, as to any U.S. federal income tax consequence described herein. The IRS may disagree with the description herein, and its determination may be upheld by a court.
Because of the complexity of the tax laws and because the tax consequences to any particular holder of our common stock may be affected by matters not discussed herein, each such holder is urged to consult with its tax advisor with respect to the specific tax consequences of the ownership and disposition of our common stock, including the applicability and effect of state, local and non-U.S. tax laws, as well as U.S. federal tax laws.
United States Federal Income Tax Consequences
Taxation of Operating Income: In General
Unless exempt from United States federal income taxation under the rules discussed below, a foreign corporation is subject to United States federal income taxation in respect of any income that is derived from the use of vessels, from the hiring or leasing of vessels for use on a time, voyage or bareboat charter basis, from the participation in a shipping pool, partnership, strategic alliance, joint operating agreement, code sharing arrangements or other joint venture it directly or indirectly owns or participates in that generates such income, or from the performance of services directly related to those uses, which we refer to as "shipping income," to the extent that the shipping income is derived from sources within the United States. For these purposes, 50% of the gross shipping income that is attributable to transportation that begins or ends, but that does not both begin and end, in the United States, exclusive of certain U.S. territories and possessions, constitutes income from sources within the United States, which we refer to as "U.S. source gross shipping income."
Shipping income attributable to transportation that both begins and ends in the United States is considered to be 100% from sources within the United States. We are prohibited by law from engaging in transportation that produces income considered to be 100% from sources within the United States.
Shipping income attributable to transportation exclusively between non-U.S. ports will be considered to be 100% derived from sources outside the United States. Shipping income derived from sources outside the United States will not be subject to any United States federal income tax.
For our 2015 taxable year, we did not have any U.S. source gross shipping income and consequently we were not subject to the 4% U.S. federal income tax.
We may, however, realize U.S. source gross shipping income in our 2016 or subsequent taxable years. If we realize U.S. source gross shipping income in our 2016 or subsequent taxable year, we would be subject to a 4% tax imposed without allowance for deductions for such taxable year, as described in " – Taxation in the Absence of Exemption," unless we qualify for exemption from tax under Section 883 of the Code, the requirements of which are described in detail below.
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Exemption of Operating Income from United States Federal Income Taxation
Under Section 883 of the Code and the regulations thereunder, we will be exempt from United States federal income taxation on our U.S.-source shipping income if:
· we are organized in a foreign country (our "country of organization") that grants an "equivalent exemption" to corporations organized in the United States; and
either
· more than 50% of the value of our stock is owned, directly or indirectly, by "qualified shareholders," that are persons (i) who are "residents" of our country of organization or of another foreign country that grants an "equivalent exemption" to corporations organized in the United States, and (ii) we satisfy certain substantiation requirements, which we refer to as the "50% Ownership Test;" or
· our stock is "primarily" and "regularly" traded on one or more established securities markets in our country of organization, in another country that grants an "equivalent exemption" to United States corporations, or in the United States, which we refer to as the "Publicly-Traded Test."
The jurisdictions where we and our ship-owning subsidiaries are incorporated grant "equivalent exemptions" to United States corporations. Therefore, we will be exempt from United States federal income taxation with respect to our U.S. source shipping income if we satisfy either the 50% Ownership Test or the Publicly-Traded Test.
50% Ownership Test
Under the regulations, a foreign corporation will satisfy the 50% Ownership Test for a taxable year if (i) for at least half of the number of days in the taxable year, more than 50% of the value of its stock is owned, directly or constructively through the application of certain attribution rules prescribed by the regulations, by one or more shareholders who are residents of foreign countries that grant "equivalent exemption" to corporations organized in the United States and (ii) the foreign corporation satisfies certain substantiation and reporting requirements with respect to such shareholders.
These substantiation requirements are onerous and therefore there can be no assurance that we would be able to satisfy them. Even if we were not able to satisfy the 50% Ownership Test for a taxable year, we may nonetheless qualify for exemption from tax under Section 883 if we are able to satisfy the Publicly-Traded Test, which is described below.
Publicly-Traded Test
The regulations provide that the stock of a foreign corporation will be considered to be "primarily traded" on an established securities market in a country if the number of shares of each class of stock that is traded during the taxable year on all established securities markets in that country exceeds the number of shares in each such class that is traded during that year on established securities markets in any other single country.
Under the regulations, the stock of a foreign corporation will be considered "regularly traded" if one or more classes of its stock representing 50% or more of its outstanding shares, by total combined voting power of all classes of stock entitled to vote and by total combined value of all classes of stock, are listed on one or more established securities markets (such as NASDAQ Capital Market), which we refer to as the "listing threshold."
The regulations further require that with respect to each class of stock relied upon to meet the listing requirement: (i) such class of the stock is traded on the market, other than in minimal quantities, on at least sixty (60) days during the taxable year or one-sixth (1/6) of the days in a short taxable year; and (ii) the aggregate number of shares of such class of stock traded on such market is at least 10% of the average number of shares of such class of stock outstanding during such year or as appropriately adjusted in the case of a short taxable year. Even if a foreign corporation do not satisfy both tests, the regulations provide that the trading frequency and trading volume tests will be deemed satisfied by a class of stock if such class of stock is traded on an established market in the United States and such class of stock is regularly quoted by dealers making a market in such stock.
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Notwithstanding the foregoing, the regulations provide, in pertinent part, that a class of stock will not be considered to be "regularly traded" on an established securities market for any taxable year in which 50% or more of the vote and value of the outstanding shares of such class of stock are owned, actually or constructively under specified attribution rules, on more than half the days during the taxable year by persons who each own directly or indirectly 5% or more of the vote and value of such class of stock, who we refer to as "5% Shareholders." We refer to this restriction in the regulations as the "Closely-Held Rule."
For purposes of being able to determine our 5% Shareholders, the regulations permit a foreign corporation to rely on Schedule 13G and Schedule 13D filings with the Commission. The regulations further provide that an investment company that is registered under the Investment Company Act of 1940, as amended, will not be treated as a 5% Shareholder for such purposes.
The Closely-Held Rule will not disqualify a foreign corporation, however, if it can establish or substantiate that qualified shareholders own, actually or constructively under specified attribution rules, sufficient shares in the closely-held block of stock to preclude the shares in the closely-held block that are owned by non-qualified 5% Shareholders from representing 50% or more of the value of such class of stock for more than half of the days during the tax year. These substantiation requirements are onerous and consequently there can be no assurance that we would be able to satisfy them.
Due to the factual nature of the issues involved, there can be no assurance that we or any of our subsidiaries will qualify for the benefits of Section 883 of the Code for our 2016 or subsequent taxable year.
Taxation in Absence of Exemption
To the extent the benefits of Section 883 are unavailable, our U.S. source gross shipping income, to the extent not considered to be "effectively connected" with the conduct of a U.S. trade or business, as described below, would be subject to a 4% tax imposed by Section 887 of the Code on a gross basis, without the benefit of deductions, otherwise referred to as the "4% Tax." Since under the sourcing rules described above, no more than 50% of our shipping income would be treated as being derived from U.S. sources, the maximum effective rate of U.S. federal income tax on our shipping income would never exceed 2% under the 4% Tax.
To the extent the benefits of the Section 883 exemption are unavailable and our U.S. source gross shipping income is considered to be "effectively connected" with the conduct of a U.S. trade or business, as described below, any such "effectively connected" U.S. source gross shipping income, net of applicable deductions, would be subject to the U.S. federal corporate income tax currently imposed at rates of up to 35%. In addition, we may be subject to the 30% "branch profits" tax on earnings effectively connected with the conduct of such trade or business, as determined after allowance for certain adjustments, and on certain interest paid or deemed paid attributable to the conduct of our U.S. trade or business.
Our U.S. source gross shipping income would be considered "effectively connected" with the conduct of a U.S. trade or business only if:
· we have, or are considered to have, a fixed place of business in the United States involved in the earning of shipping income; and
· substantially all of our U.S. source gross shipping income is attributable to regularly scheduled transportation, such as the operation of a vessel that follows a published schedule with repeated sailings at regular intervals between the same points for voyages that begin or end in the United States.
We do not intend to have, or permit circumstances that would result in having, any vessel operating to the United States on a regularly scheduled basis. Based on the foregoing and on the expected mode of our shipping operations and other activities, we believe that none of our U.S. source gross shipping income will be "effectively connected" with the conduct of a U.S. trade or business.
United States Taxation of Gain on Sale of Vessels
Regardless of whether we qualify for exemption under Section 883, we will not be subject to United States federal income taxation with respect to gain realized on a sale of a vessel, provided the sale is considered to occur outside of the United States under United States federal income tax principles. In general, a sale of a vessel will be considered to occur outside of the United States for this purpose if title to the vessel, and risk of loss with respect to the vessel, pass to the buyer outside of the United States. It is expected that any sale of a vessel by us will be considered to occur outside of the United States.
59

United States Federal Income Taxation of U.S. Holders
Taxation of Distributions Paid on Common Stock
Subject to the passive foreign investment company, or PFIC, rules discussed below, any distributions made by us with respect to common shares to a U.S. Holder will generally constitute dividends, which may be taxable as ordinary income or "qualified dividend income" as described in more detail below, to the extent of our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Distributions in excess of our earnings and profits will be treated first as a non-taxable return of capital to the extent of the U.S. Holder's tax basis in his common shares on a dollar-for-dollar basis and thereafter as capital gain. Because we are not a U.S. corporation, U.S. Holders that are corporations will not be entitled to claim a dividends-received deduction with respect to any distributions they receive from us.
Dividends paid on common shares to a U.S. Holder which is an individual, trust, or estate (a "U.S. Non-Corporate Holder") will generally be treated as "qualified dividend income" that is taxable to such shareholders at preferential U.S. federal income tax rates provided that (1) the common shares are readily tradable on an established securities market in the United States (such as the NASDAQ Global Market on which the common shares were listed and the Nasdaq Capital Market on which the common shares are currently listed); (2) we are not a passive foreign investment company, or PFIC, for the taxable year during which the dividend is paid or the immediately preceding taxable year (which we do not believe we are, have been or will be); (3) the U.S. Non-Corporate Holder has owned the common shares for more than 60 days in the 121-day period beginning 60 days before the date on which the common shares become ex-dividend; and (4) certain other conditions are met.
Any dividends paid by us which are not eligible for these preferential rates will be taxed as ordinary income to a U.S. Holder.
Special rules may apply to any ''extraordinary dividend''—generally, a dividend in an amount which is equal to or in excess of 10% of a shareholder's adjusted basis in a common share—paid by us. If we pay an "extraordinary dividend" on our common stock that is treated as "qualified dividend income," then any loss derived by a U.S. Non-Corporate Holder from the sale or exchange of such common stock will be treated as long-term capital loss to the extent of such dividend.
Sale, Exchange or other Disposition of Common Shares
Assuming we do not constitute a PFIC for any taxable year, a U.S. Holder generally will recognize taxable gain or loss upon a sale, exchange or other disposition of our common shares in an amount equal to the difference between the amount realized by the U.S. Holder from such sale, exchange or other disposition and the U.S. Holder's tax basis in such stock. Such gain or loss will be treated as long-term capital gain or loss if the U.S. Holder's holding period in the common shares is greater than one year at the time of the sale, exchange or other disposition. A U.S. Holder's ability to deduct capital losses is subject to certain limitations.
Passive Foreign Investment Company Rules
Special U.S. federal income tax rules apply to a U.S. Holder that holds stock in a foreign corporation classified as a PFIC for U.S. federal income tax purposes. In general, we will be treated as a PFIC with respect to a U.S. Holder if, for any taxable year in which such holder held our common shares, either:
· at least 75% of our gross income for such taxable year consists of passive income (e.g., dividends, interest, capital gains and rents derived other than in the active conduct of a rental business); or
· at least 50% of the average value of the assets held by the corporation during such taxable year produce, or are held for the production of, passive income.
For purposes of determining whether we are a PFIC, we will be treated as earning and owning its proportionate share of the income and assets, respectively, of any of its subsidiary corporations in which it owns at least 25% of the value of the subsidiary's stock. Income earned, or deemed earned, by us in connection with the performance of services would not constitute passive income. By contrast, rental income, which includes bareboat hire, would generally constitute "passive income" unless we are treated under specific rules as deriving rental income in the active conduct of a trade or business.
60

Based on our current operations and future projections, we do not believe that we are, nor do we expect to become, a PFIC with respect to any taxable year. Although there is no legal authority directly on point, our belief is based principally on the position that, for purposes of determining whether we are a PFIC, the gross income we derive or are deemed to derive from the time chartering and voyage chartering activities of our wholly-owned subsidiaries should constitute services income, rather than rental income. Correspondingly, we believe that such income does not constitute passive income, and the assets that we or our wholly-owned subsidiaries own and operate in connection with the production of such income, in particular, the vessels, do not constitute passive assets for purposes of determining whether we are a PFIC. We believe there is substantial legal authority supporting its position consisting of case law and Internal Revenue Service pronouncements concerning the characterization of income derived from time charters and voyage charters as services income for other tax purposes. However, there is also authority which characterizes time charter income as rental income rather than services income for other tax purposes. It should be noted that in the absence of any legal authority specifically relating to the statutory provisions governing PFICs, the Internal Revenue Service or a court could disagree with this position. In addition, although we intend to conduct its affairs in a manner to avoid being classified as a PFIC with respect to any taxable year, there can be no assurance that the nature of our operations will not change in the future.
As discussed more fully below, if we were to be treated as a PFIC for any taxable year, a U.S. Holder would be subject to different taxation rules depending on whether the U.S. Holder makes an election to treat us as a "Qualified Electing Fund," which election is referred to as a "QEF election." As an alternative to making a QEF election, a U.S. Holder should be able to make a "mark-to-market" election with respect to the common shares, as discussed below. In addition, if we were to be treated as a PFIC for any taxable year ending on or after December 31, 2013, a U.S. Holder would be required to file an IRS Form 8621 for the year with respect to such holder's common stock.
Taxation of U.S. Holders Making a Timely QEF Election
If a U.S. Holder makes a timely QEF election, which U.S. Holder is referred to as an "Electing Holder," the Electing Holder must report each year for U.S. federal income tax purposes his pro rata share of the our ordinary earnings and its net capital gain, if any, for our taxable year that ends with or within the taxable year of the Electing Holder, regardless of whether or not distributions were received from us by the Electing Holder. The Electing Holder's adjusted tax basis in the common shares will be increased to reflect taxed but undistributed earnings and profits. Distributions of earnings and profits that had been previously taxed will result in a corresponding reduction in the adjusted tax basis in the common shares and will not be taxed again once distributed. An Electing Holder would generally recognize capital gain or loss on the sale, exchange or other disposition of the common shares. A U.S. Holder would make a QEF election with respect to any year that we are a PFIC by filing IRS Form 8621 with his, her or its U.S. federal income tax return. After the end of each taxable year, we will determine whether we were a PFIC for such taxable year. If we determine or otherwise become aware that we are a PFIC for any taxable year, we will provide each U.S. Holder with all necessary information, including a PFIC Annual Information Statement, in order to enable such holder to make a QEF election for such taxable year.
Taxation of U.S. Holders Making a "Mark-to-Market" Election
Alternatively, if we were to be treated as a PFIC for any taxable year and, as anticipated, our common stock is treated as "marketable stock," a U.S. Holder would be allowed to make a "mark-to-market" election with respect to our common shares. If that election is made, the U.S. Holder generally would include as ordinary income in each taxable year the excess, if any, of the fair market value of the common shares at the end of the taxable year over such U.S. Holder's adjusted tax basis in the common shares. The U.S. Holder would also be permitted an ordinary loss in respect of the excess, if any, of the U.S. Holder's adjusted tax basis in the common shares over its fair market value at the end of the taxable year, but only to the extent of the net amount previously included in income as a result of the mark-to-market election. A U.S. Holder's tax basis in his common shares would be adjusted to reflect any such income or loss amount. Gain realized on the sale, exchange or other disposition of the common shares would be treated as ordinary income, and any loss realized on the sale, exchange or other disposition of the common shares would be treated as ordinary loss to the extent that such loss does not exceed the net mark-to-market gains previously included by the U.S. Holder.
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Taxation of U.S. Holders Not Making a Timely QEF or Mark-to-Market Election
Finally, if we were to be treated as a PFIC for any taxable year, a U.S. Holder who does not make either a QEF election or a "mark-to-market" election for that year, whom we refer to as a "Non-Electing Holder," would be subject to special rules with respect to (1) any excess distribution (i.e., the portion of any distributions received by the Non-Electing Holder on our common stock in a taxable year in excess of 125 percent of the average annual distributions received by the Non-Electing Holder in the three preceding taxable years, or, if shorter, the Non-Electing Holder's holding period for the common stock), and (2) any gain realized on the sale, exchange or other disposition of our common stock. Under these special rules:
· the excess distribution or gain would be allocated ratably over the Non-Electing Holders' aggregate holding period for the common stock;
· the amount allocated to the current taxable year and any taxable year before we became a passive foreign investment company would be taxed as ordinary income; and
· the amount allocated to each of the other taxable years would be subject to tax at the highest rate of tax in effect for the applicable class of taxpayer for that year, and an interest charge for the deemed deferral benefit would be imposed with respect to the resulting tax attributable to each such other taxable year.
These penalties would not apply to a pension or profit sharing trust or other tax-exempt organization that did not borrow funds or otherwise utilize leverage in connection with its acquisition of our common stock. If a Non-Electing Holder who is an individual dies while owning our common stock, such Non-Electing Holder's successor generally would not receive a step-up in tax basis with respect to such stock.
United States Federal Income Taxation of Non-U.S. Holders
Dividends paid to a Non-U.S. Holder with respect to our common stock generally should not be subject to U.S. federal income tax, unless the dividends are effectively connected with the Non-U.S. Holder's conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, are attributable to a permanent establishment or fixed base that such holder maintains in the United States).
In addition, a Non-U.S. Holder generally should not be subject to U.S. federal income tax on any gain attributable to a sale or other disposition of our common stock unless such gain is effectively connected with its conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, is attributable to a permanent establishment or fixed base that such holder maintains in the United States) or the Non-U.S. Holder is an individual who is present in the United States for 183 days or more in the taxable year of sale or other disposition and certain other conditions are met (in which case such gain from United States sources may be subject to tax at a 30% rate or a lower applicable tax treaty rate).
Dividends and gains that are effectively connected with the Non-U.S. Holder's conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, are attributable to a permanent establishment or fixed base in the United States) generally should be subject to tax in the same manner as for a U.S. Holder and, if the Non-U.S. Holder is a corporation for U.S. federal income tax purposes, it also may be subject to an additional branch profits tax at a 30% rate or a lower applicable tax treaty rate.
Backup Withholding and Information Reporting
In general, information reporting for U.S. federal income tax purposes should apply to distributions made on our common stock within the United States to a non-corporate U.S. Holder and to the proceeds from sales and other dispositions of our common stock to or through a U.S. office of a broker by a non-corporate U.S. Holder. Payments made (and sales and other dispositions effected at an office) outside the United States will be subject to information reporting in limited circumstances.
62

In addition, backup withholding of U.S. federal income tax, currently at a rate of 28%, generally should apply to distributions paid on our common stock to a non-corporate U.S. Holder and the proceeds from sales and other dispositions of our common stock by a non-corporate U.S. Holder, who:
· fails to provide an accurate taxpayer identification number;
· is notified by the IRS that backup withholding is required; or
· fails in certain circumstances to comply with applicable certification requirements.
A Non-U.S. Holder generally may eliminate the requirement for information reporting and backup withholding by providing certification of its foreign status, under penalties of perjury, on a duly executed applicable IRS Form W-8 or by otherwise establishing an exemption.
Backup withholding is not an additional tax. Rather, the amount of any backup withholding generally should be allowed as a credit against a U.S. Holder's or a Non-U.S. Holder's U.S. federal income tax liability and may entitle such holder to a refund, provided that certain required information is timely furnished to the IRS.
Individuals who are U.S. Holders (and to the extent specified in applicable Treasury regulations, certain individuals who are Non-U.S. Holders and certain U.S. entities) who hold "specified foreign financial assets" (as defined in Section 6038D of the Code) are required to file IRS Form 8938 with information relating to the asset for each taxable year in which the aggregate value of all such assets exceeds $75,000 at any time during the taxable year or $50,000 on the last day of the taxable year (or such higher dollar amount as prescribed by applicable Treasury regulations). Specified foreign financial assets would include, among other assets, the common shares, unless the shares held through an account maintained with a U.S. financial institution. Substantial penalties apply to any failure to timely file IRS Form 8938, unless the failure is shown to be due to reasonable cause and not due to willful neglect. Additionally, in the event an individual U.S. Holder (and to the extent specified in applicable Treasury regulations, an individual Non-U.S. Holder or a U.S. entity) that is required to file IRS Form 8938 does not file such form, the statute of limitations on the assessment and collection of U.S. federal income taxes of such holder for the related tax year may not close until three years after the date that the required information is filed. U.S. Holders (including U.S. entities) and Non-U.S. Holders are encouraged consult their own tax advisors regarding their reporting obligations under this legislation.
Marshall Islands Tax Consequences
We are incorporated in the Marshall Islands. Under current Marshall Islands law, we are not subject to tax on income or capital gains, no Marshall Islands withholding tax will be imposed upon payment of dividends by us to its shareholders, and holders of our common stock that are not residents of or domiciled or carrying on any commercial activity in the Marshall Islands will not be subject to Marshall Islands tax on the sale or other disposition of our common stock.
F.              Dividends and paying agents
Not applicable.
G.              Statement by experts
Not applicable.
H.              Documents on display
We file annual reports and other information with the Commission. You may inspect and copy any report or document we file, including this annual report and the accompanying exhibits, at the Commission's public reference facilities located at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. You may obtain information on the operation of the public reference facilities by calling the Commission at 1-800-SEC-0330, and you may obtain copies at prescribed rates. Our SEC filings are also available to the public at the website maintained by the Commission at http://www.sec.gov, as well as on our website at http://www.seanergymaritime.com. Information on our website does not constitute a part of this annual report.
63

We will also provide without charge to each person, including any beneficial owner of our common stock, upon written or oral request of that person, a copy of any and all of the information that has been incorporated by reference in this annual report. Please direct such requests to Investor Relations, Seanergy Maritime Holdings Corp., 16 Grigoriou Lambraki Street, 166 74 Glyfada, Athens, Greece, telephone number +30 210 8913507 or facsimile number +30 210 9638450.
I.              Subsidiary information
Not applicable.
ITEM 11.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk
We are exposed to risks associated with changes in interest rates relating to our unhedged variable–rate borrowings, according to which we pay interest at LIBOR plus a margin; as such increases in interest rates could affect our results of operations and ability to service our debt. As of December 31, 2015, we had aggregate variable-rate borrowings, including the shareholders' notes, of $194.0 million. An increase of 1% in the interest rates of our variable-rate borrowings as of December 31, 2015 would increase our interest payments $0.4 million per year. We have not entered into any hedging contracts to protect against interest rate fluctuations. We expect to manage any exposure in interest rates through our regular operating and financing activities.

Foreign Currency Exchange Rate Risk
We generate all of our revenue in U.S. dollars. The minority of our operating expenses (approximately 4% in 2015) and the majority of our general and administrative expenses (approximately 68% in 2015) are in currencies other than the U.S. dollar, primarily the Euro. For accounting purposes, expenses incurred in other currencies are converted into U.S. dollars at the exchange rate prevailing on the date of each transaction. We do not consider the risk from exchange rate fluctuations to be material for our results of operations, as during 2015, these non-US dollar expenses represented 23% of our revenues. However, the portion of our business conducted in other currencies could increase in the future, which could expand our exposure to losses arising from exchange rate fluctuations. We have not hedged currency exchange risks associated with our expenses.
Inflation Risk
We do not consider inflation to be a significant risk to direct expenses in the current and foreseeable future. However, in the event that inflation becomes a significant factor in the global economy, inflationary pressures would result in increased operating, voyage and financing costs.

ITEM 12.
DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

Not applicable.
PART II
ITEM 13.
DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

None.
ITEM 14.
MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

Both of our loan facilities with Alpha Bank A.E. place restrictions on our ability to distribute dividends to our shareholders, specifically that the amount of the dividends so declared shall not exceed 50% of our net income except in case that cash and marketable securities are equal or greater than the amount required to meet our debt service for the following eighteen-month period.
64


ITEM 15.
CONTROLS AND PROCEDURES

a)              Disclosure Controls and Procedures
Management (our Chief Executive Officer / Interim Chief Financial Officer) has evaluated the effectiveness of the design and operation of the Company's disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) under the U.S. Securities Exchange Act of 1934, as amended, or the Exchange Act, as of the end of the period covered by this annual report (as of December 31, 2015). The term disclosure controls and procedures is defined under SEC rules as controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company's management (our Chief Executive Officer / Interim Chief Financial Officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives.
Based on that evaluation, our Chief Executive Officer / Interim Chief Financial Officer has concluded that our disclosure controls and procedures are effective as of the evaluation date.
b)              Management's Annual Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as such term is identified in Exchange Act Rule 13a-15(f). Our internal control over financial reporting is a process designed under the supervision of our Chief Executive Officer / Interim Chief Financial Officer and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for external reporting purposes in accordance with U.S. GAAP.
Internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that receipts and expenditures are being made only in accordance with the authorization of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company's assets that could have a material effect on the consolidated financial statements.
Management (our Chief Executive Officer / Interim Chief Financial Officer), has assessed the effectiveness of our internal control over financial reporting as of December 31, 2015, based on the framework established in Internal Control - Integrated Framework (2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission.. Based on this assessment, management has determined that the Company's internal control over financial reporting is effective as of December 31, 2015.
However, it should be noted that because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements with certainty even when determined to be effective and can only provide reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate / obsolete because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.
c)              Attestation Report of the Registered Public Accounting Firm
Not applicable.
65

d)              Changes in Internal Control over Financial Reporting
During the year covered by this annual report, there have been the following significant changes in the Company's internal control over financial reporting in comparison with last year's annual report: a) the provision of technical management services to all of our vessels by an independent third party, namely V. Ships, b) in-house establishment of an Insurance & Claims Department to handle and monitor all relevant tasks, c) in-house establishment of an Operations Department to handle and monitor all relevant tasks and d) in-house establishment of a Technical Department to monitor all relevant tasks performed by V. Ships and also perform internally certain relevant tasks.
ITEM 16A.
AUDIT COMMITTEE FINANCIAL EXPERT

Our board of directors has determined that Mr. Dimitris Anagnostopoulos, an independent director and a member of our audit committee, is an "Audit Committee Financial Expert" under Commission rules and the corporate governance rules of the NASDAQ Capital Market.
ITEM 16B.
CODE OF ETHICS

We have adopted a Code of Business Conduct and Ethics that applies to our employees, officers and directors. Our Code of Business Conduct and Ethics is available on the Corporate Governance section of our website at www.seanergymaritime.com. We will also provide a hard copy of our Code of Business Conduct and Ethics free of charge upon written request. We intend to disclose any waivers to or amendments of the Code of Business Conduct and Ethics for the benefit of any of our directors and executive officers, within 5 business days of such waiver or amendment. Shareholders may direct their requests to the attention of Investor Relations, Seanergy Maritime Holdings Corp., 16 Grigoriou Lambraki Street, 16674 Glyfada, Athens, Greece, telephone number +30 210 8913507 or facsimile number +30 210 9638450.
ITEM 16C.
PRINCIPAL ACCOUNTANT FEES AND SERVICES

Our principal accountants are Ernst & Young (Hellas) Certified Auditors-Accountants S.A., or EY. EY has billed us for audit, audit-related and non-audit services as follows:
   
2015
   
2014
 
Audit fees
 
$
170,000
   
$
146,000
 
Audit related fees
   
-
     
-
 
Tax fees
   
-
     
-
 
All other fees
   
-
     
-
 
Total fees
 
$
170,000
   
$
146,000
 

Audit fees for 2015 and 2014 of $170,000 and $146,000, respectively, related to professional services rendered for the audit of our financial statements for the years ended December 31, 2015 and 2014, respectively. As per the audit committee charter, our audit committee pre-approves all audit, audit-related and non-audit services not prohibited by law to be performed by our independent registered public accounting firm and associated fees prior to the engagement of the independent registered public accounting firm with respect to such services.
ITEM 16D.
EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

Not applicable.
ITEM 16E.
PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

Please see "Item 7. Major Shareholders and Related Party Transactions–B. Related Party Transactions–Share Purchase Agreements" for a description of our recent sales of our common stock to certain of our affiliates.
ITEM 16F.
CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT

None.
66


ITEM 16G.
CORPORATE GOVERNANCE

As a foreign private issuer, as defined in Rule 3b-4 under the Exchange Act, the Company is permitted to follow certain corporate governance rules of its home country in lieu of NASDAQ's corporate governance rules. The Company's corporate governance practices deviate from NASDAQ's corporate governance rules in the following two ways:
· In lieu of obtaining shareholder approval, under specified circumstances, prior to the issuance of securities in connection with: (i) the acquisition of the stock or assets of another company, (ii) equity-based compensation of officers, directors, employees or consultants, (iii) a change of control, or (iv) private placements, the Company complies with provisions of the BCA providing that the board of directors may approve share issuances.
· The Company's Board is not required to be composed of a majority of independent directors.
Other than as noted above, we are in full compliance with all other applicable NASDAQ corporate governance standards.
ITEM 16H.
MINE SAFETY DISCLOSURE

Not applicable.
PART III
ITEM 17.
FINANCIAL STATEMENTS

See Item 18.
ITEM 18.
FINANCIAL STATEMENTS
 
The financial information required by this item, together with the report of Ernst & Young (Hellas) Certified Auditors-Accountants S.A., is set forth on pages F-1 through F-28 and are filed as part of this annual report.
      Item 18.1
 
 
The Schedule I, beginning on page F-25, is filed as part of this report.
ITEM 19.
EXHIBITS

Exhibit
Number
Description
1.1
Amended and Restated Articles of Incorporation of the registrant (1)
1.2
Second Amended and Restated Bylaws of the registrant (2)
1.3
Amendment to Amended and Restated Articles of Incorporation of the registrant (3)
1.4
Second Amendment to Amended and Restated Articles of Incorporation of the registrant (4)
1.5
Third Amendment to Amended and Restated Articles of Incorporation of the registrant (5)
1.6
Fourth Amendment to Amended and Restated Articles of Incorporation of the registrant (6)
1.7
Fifth Amendment to Amended and Restated Articles of Incorporation of the registrant (7)
2.1
Specimen Common Stock Certificate of the registrant (8)
4.1
Amended and Restated 2011 Equity Incentive Plan of the registrant
4.2
Share Purchase Agreement dated June 24, 2014 between the registrant, Comet Shipholding Inc. and Plaza Shipholding Corp. (9)
4.3
Registration Rights Agreement dated June 24, 2014 between the registrant, Comet Shipholding Inc. and Plaza Shipholding Corp. (10)
4.4
Share Purchase Agreement dated September 29, 2014 between the registrant, Comet Shipholding Inc. and Plaza Shipholding Corp. (11)
4.5
Registration Rights Agreement dated September 29, 2014 between the registrant, Comet Shipholding Inc. and Plaza Shipholding Corp. (12)
4.6
Share Purchase Agreement dated December 19, 2014 between the registrant and Jelco Delta Holding Corp. (13)
4.7
Registration Rights Agreement dated December 19, 2014 between the registrant and Jelco Delta Holding Corp. (14)
4.8  Memorandum of Agreement dated December 23, 2014 with respect to Leadership   
4.9
Ship Technical Management Agreement dated as of February 11, 2015 between Leader Shipping Co. and V.Ships Greece Ltd. (15)
4.10
Novation Agreement to Ship Technical Management Agreement dated July 27, 2015, among V.Ships Greece Ltd., Leader Shipping Co. and V.Ships Limited
4.11
Addendum No. 1 to Technical Management Agreement dated March 18, 2016, between Leader Shipping Co. and V.Ships Limited
4.12
Form of Ship Technical Management Agreement with V.Ships Limited
4.13
Commercial Management Agreement dated as of March 2, 2015 between the registrant and Fidelity Marine Inc. (16)
4.14
Amendment No. 1 dated September 11, 2015 to Commercial Management Agreement dated as of March 2, 2015 between the registrant and Fidelity Marine Inc.
4.15
Amendment No. 2 dated February 24, 2016 to Commercial Management Agreement dated as of March 2, 2015 between the registrant and Fidelity Marine Inc.
4.16
Loan Agreement dated March 6, 2015 between Leader Shipping Co. and Alpha Bank A.E. (17)
4.17  First Supplemental Agreement dated December 23, 2015 between Leader Shipping Co. and Alpha Bank A.E. related to the Loan Agreement dated March 6, 2015 
4.18
Convertible Promissory Note dated March 12, 2015 of the registrant to Jelco Delta Holding Corp. (18)
4.19
Share Purchase Agreement dated March 12, 2015 between the registrant and Jelco Delta Holding Corp. (19)
4.20
Registration Rights Agreement dated March 12, 2015 between the registrant and Jelco Delta Holding Corp. (20)
4.21
Share Purchase Agreement dated March 12, 2015 between the registrant and Stamatios Tsantanis. (21)
4.22
Registration Rights Agreement dated March 12, 2015 between the registrant and Stamatios Tsantanis. (22)
4.23
Convertible Promissory Note dated September 7, 2015 of the registrant to Jelco Delta Holding Corp. (23)
4.24
Share Purchase Agreement dated September 7, 2015 between registrant and Jelco Delta Holding Corp. (24)
4.25
Registration Rights Agreement dated September 7, 2015 between registrant and Jelco Delta Holding Corp. (25)
4.26
Amendment dated December 1, 2015 to Convertible Promissory Note dated September 7, 2015 between the registrant and Jelco Delta Holding Corp. (26)
4.27
Amendment dated December 14, 2015 to Convertible Promissory Note dated September 7, 2015 between the registrant and Jelco Delta Holding Corp.  (27)
4.28
Amendment dated January 27, 2016 to Convertible Promissory Note dated September 7, 2015 between the registrant and Jelco Delta Holding Corp.  (28)
4.29
Amendment dated March 7, 2016 to Convertible Promissory Note dated September 7, 2015 between the registrant and Jelco Delta Holding Corp.  (29)
4.30
Purchase Agreement dated August 6, 2015 between the registrant and the Sellers listed on Schedule I thereto
 
 
67


4.31
Memorandum of Agreement dated August 6, 2015 with respect to Geniuship
4.32
Memorandum of Agreement dated August 6, 2015 with respect to   Gloriuship
4.33
Memorandum of Agreement dated August 6, 2015 with respect to   Premiership
4.34
Memorandum of Agreement dated August 6, 2015 with respect to   Gladiatorship
4.35
Memorandum of Agreement dated August 6, 2015 with respect to Guardianship
4.36
Memorandum of Agreement dated August 6, 2015 with respect to   Squireship
4.37
Memorandum of Agreement dated August 6, 2015 with respect to   Championship
4.38
Loan Agreement dated September 1, 2015 between Sea Glorius Shipping Co., Sea Genius Shipping Co., HSH Nordbank AG and the Banks and Financial Institutions listed in Schedule 1 thereto
4.39
Facility Agreement dated September 11, 2015 between Premier Marine Co., Gladiator Shipping Co., Guardian Shipping Co., Seanergy Maritime Holdings Corp. and UniCredit Bank AG
4.40
Loan Agreement dated November 4, 2015 between Squire Ocean Navigation Co. and Alpha Bank A.E.
4.41
Facility Agreement dated December 2, 2015 between  Champion Ocean Navigation Co., Seanergy Maritime Holdings Corp. and Natixis
8.1
List of Subsidiaries
12.1
Certificate of Principal Executive Officer pursuant to Rule 13a-14(a) of the Exchange Act
12.2
Certificate of Principal Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act
13.1
Certificate of Principal Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
13.2
Certificate of Principal Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
15.1
Consent of Ernst & Young (Hellas) Certified Auditors-Accountants S.A.
101
The following financial information from the registrant's annual report on Form 20-F for the fiscal year ended December 31, 2015, formatted in Extensible Business Reporting Language (XBRL)
 
(1) Consolidated Balance Sheets as of December 31, 2015 and 2014;
 
(2) Consolidated Statements of Income/(loss) for the years ended December 31, 2015, 2014 and 2013;
 
(3) Consolidated Statements of Shareholders' (Deficit) / Equity for the years ended December 31, 2015, 2014 and 2013;
 
(4) Consolidated Statements of Cash Flows for the years ended December 31, 2015, 2014 and 2013;
 
(5) Notes to Consolidated Financial Statements.

(1)
Incorporated herein by reference to Annex M to Exhibit 99.1 to Seanergy Maritime Corp.'s report on Form 6-K filed with the Commission on July 31, 2008 (File No. 001-33690).
(2)
Incorporated herein by reference to Exhibit 99.1 to the registrant's report on Form 6-K filed with the Commission on July 20, 2011.
(3)
Incorporated herein by reference to Exhibit 3.3 to the registrant's registration statement on Form F-1MEF filed with the Commission on August 28, 2009 (File No. 333--161595).
(4)
Incorporated herein by reference to Exhibit 3.4 to the registrant's report on Form 6-K  filed with the Commission on September 16, 2010 (File No. 001-34848).
(5)
Incorporated herein by reference to Exhibit 1 to the registrant's report on Form 6-K filed with the Commission on June 27, 2011.
(6)
Incorporated herein by reference to Exhibit 1 to the registrant's report on Form 6-K filed with the Commission on August 5, 2011.
(7)
Incorporated herein by reference to Exhibit 3.7 to the registrant's report on Form 6-K filed with the Commission on January 7, 2016.
(8)
Incorporated herein by reference to Exhibit 4.1 to the registrant's report on Form 6-K filed with the Commission on January 7, 2016.
(9)
Incorporated herein by reference to Exhibit B to the Schedule 13D/A related to the registrant filed with the Commission on September 12, 2014.
(10)
Incorporated herein by reference to Exhibit C to the Schedule 13D/A related to the registrant filed with the Commission on September 12, 2014.
(11)
Incorporated herein by reference to Exhibit B to the Schedule 13D related to the registrant filed with the Commission on March 12, 2015.
(12)
Incorporated herein by reference to Exhibit D to the Schedule 13D related to the registrant filed with the Commission on March 12, 2015.
(13)
Incorporated herein by reference to Exhibit C to the Schedule 13D related to the registrant filed with the Commission on March 12, 2015.
(14)
Incorporated herein by reference to Exhibit E to the Schedule 13D related to the registrant filed with the Commission on March 12, 2015.
(15)
Incorporated herein by reference to Exhibit 4.51 to the registrant's annual report on Form 20-F filed with the Commission on April 21, 2015.
(16)
Incorporated herein by reference to Exhibit 4.52 to the registrant's annual report on Form 20-F filed with the Commission on April 21, 2015.
(17)
Incorporated herein by reference to Exhibit 4.53 to the registrant's annual report on Form 20-F filed with the Commission on April 21, 2015.
(18)
Incorporated herein by reference to Exhibit B to the Schedule 13D/A related to the registrant filed with the Commission on April 13, 2015.
(19)
Incorporated herein by reference to Exhibit C to the Schedule 13D/A related to the registrant filed with the Commission on April 13, 2015.
(20)
Incorporated herein by reference to Exhibit D to the Schedule 13D/A related to the registrant filed with the Commission on April 13, 2015.
(21)
Incorporated herein by reference to Exhibit 4.57 to the registrant's annual report on Form 20-F filed with the Commission on April 21, 2015.
(22)
Incorporated herein by reference to Exhibit 4.58 to the registrant's annual report on Form 20-F filed with the Commission on April 21, 2015.
(23)
Incorporated herein by reference to Exhibit B to the Schedule 13D/A related to the registrant filed with the Commission on October 29, 2015.
(24)
Incorporated herein by reference to Exhibit C to the Schedule 13D/A related to the registrant filed with the Commission on October 29, 2015.
(25)
Incorporated herein by reference to Exhibit D to the Schedule 13D/A related to the registrant filed with the Commission on October 29, 2015.
(26)
Incorporated herein by reference to Exhibit C to the Schedule 13D/A related to the registrant filed with the Commission on December 29, 2015.
(27)
Incorporated herein by reference to Exhibit D to the Schedule 13D/A related to the registrant filed with the Commission on December 29, 2015.
(28)
Incorporated herein by reference to Exhibit A to the Schedule 13D/A related to the registrant filed with the Commission on February 11, 2016.
(29)
Incorporated herein by reference to Exhibit A to the Schedule 13D/A related to the registrant filed with the Commission on March 14, 2016.

68
SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

 
SEANERGY MARITIME HOLDINGS CORP.
   
   
By:
/s/ Stamatios Tsantanis
   
Name:
Stamatios Tsantanis
   
Title:
Chairman & Chief Executive Officer
 
Date: April 20, 2016


Seanergy Maritime Holdings Corp.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
   
Page
     
R eport of Independent Registered Public Accounting Firm Ernst & Young (Hellas) Certified Auditors-Accountants S.A.
 
F-2
     
Consolidated Balance Sheets as of December 31, 2015 and 2014
 
F-3
     
Consolidated Statement of Income/(Loss) for the years ended December 31, 2015, 2014 and 2013
 
F-4
     
Consolidated Statements of Stockholders' Equity for the years ended December 31, 2015, 2014 and 2013
 
F-5
     
Consolidated Statements of Cash Flows for the years ended December 31, 2015, 2014 and 2013
 
F-6
     
Notes to Consolidated Financial Statements
 
F-7
     
     
     
     
     
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders of Seanergy Maritime Holdings Corp.

We have audited the accompanying consolidated balance sheets of Seanergy Maritime Holdings Corp. as of December 31, 2015 and 2014, and the related consolidated statements of income/(loss), stockholders' equity and cash flows for each of the three years in the period ended December 31, 2015. Our audits also included the financial statement schedule listed in Item 18.1. These financial statements and schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Seanergy Maritime Holdings Corp. at December 31, 2015 and 2014, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2015, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

The accompanying consolidated financial statements and schedule have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1d to the consolidated financial statements, the Company reports a working capital deficit and estimates that it may not be able to generate sufficient cash flow to meet its obligations and sustain its continuing operations for a reasonable period of time, that in turn raise substantial doubt about the Company's ability to continue as a going concern. Note 1d describes management's plans to address this issue. The consolidated financial statements and schedule do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Ernst & Young (Hellas) Certified Auditors-Accountants S.A.
April 20, 2016
Athens, Greece
 
 
 
 

 
F-2

Seanergy Maritime Holdings Corp.
Consolidated Balance Sheets
December 31, 2015 and 2014
 (In thousands of US Dollars, except for share and per share data)

   
Notes
   
2015
   
2014
 
ASSETS
           
Current assets:
           
     Cash and cash equivalents
       
3,304
     
2,873
 
     Restricted cash
       
50
     
-
 
     Accounts receivable trade, net
       
1,287
     
30
 
     Inventories
   
5
     
2,980
     
-
 
     Other current assets
   
6
     
657
     
304
 
Total current assets
           
8,278
     
3,207
 
                         
Fixed assets:
                       
     Vessels, net
   
7
     
199,840
     
-
 
     Office equipment, net
           
40
     
61
 
Total fixed assets
           
199,880
     
61
 
                         
Other assets:
                       
     Deferred charges
   
2
     
1,194
     
-
 
  TOTAL ASSETS
           
209,352
     
3,268
 
                         
LIABILITIES AND STOCKHOLDERS EQUITY
                       
Current liabilities:
                       
     Current portion of long-term debt, net of deferred finance costs
   
8
     
718
     
-
 
     Current portion of convertible promissory notes
   
3
     
103
     
-
 
     Trade accounts and other payables
   
9
     
5,979
     
264
 
     Due to related parties
   
4
     
-
     
105
 
     Accrued liabilities
           
2,296
     
223
 
     Deferred revenue
           
154
     
-
 
Total current liabilities
           
9,250
     
592
 
                         
Non-current liabilities:
                       
     Long-term debt, net of current portion and deferred finance costs
   
8
     
176,787
     
-
 
     Long-term portion of convertible promissory notes
   
3
     
31
     
-
 
Total liabilities
           
186,068
     
592
 
                         
Commitments and contingencies
   
11
     
-
     
-
 
                         
STOCKHOLDERS EQUITY
                       
     Preferred stock, $0.0001 par value; 25,000,000 shares authorized; none issued
           
-
     
-
 
Common stock, $0.0001 par value; 500,000,000 authorized shares as at December 31, 2015 and 2014; 19,522,413 and 3,977,854 shares issued and outstanding as at  December 31, 2015 and 2014, respectively
   
12
     
2
     
-
 
     Additional paid-in capital
   
3
     
337,121
     
307,559
 
     Accumulated deficit
           
(313,839
)
   
(304,883
)
Total Stockholders' equity
           
23,284
     
2,676
 
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
           
209,352
     
3,268
 

The accompanying notes are an integral part of these consolidated financial statements.
F-3

Seanergy Maritime Holdings Corp.
Consolidated Statements of Income / (Loss)
For the years ended December 31, 2015, 2014 and 2013
(In thousands of US Dollars, except for share and per share data)

   
Notes
   
2015
   
2014
   
2013
 
Revenues:
               
Vessel revenue
       
11,661
     
2,075
     
23,838
 
Commissions
       
(438
)
   
(65
)
   
(759
)
Vessel revenue, net
       
11,223
     
2,010
     
23,079
 
Expenses:
                           
Direct voyage expenses
       
(7,496
)
   
(1,274
)
   
(8,035
)
Vessel operating expenses
       
(5,639
)
   
(1,006
)
   
(11,086
)
Voyage expenses - related party
   
3
     
-
     
(24
)
   
(313
)
Management fees - related party
   
3
     
-
     
(122
)
   
(743
)
Management fees
           
(336
)
   
-
     
(194
)
General and administration expenses
           
(2,804
)
   
(2,987
)
   
(3,966
)
General and administration expenses - related party
   
3
     
(70
)
   
(309
)
   
(412
)
Loss on bad debts
           
(30
)
   
(38
)
   
-
 
Amortization of deferred dry-docking costs
           
(38
)
   
-
     
(232
)
Depreciation
           
(1,865
)
   
(3
)
   
(982
)
Impairment loss for vessels and deferred charges
   
2
     
-
     
-
     
(3,564
)
Gain on disposal of subsidiaries
   
1
     
-
     
-
     
25,719
 
Gain on restructuring
   
1
     
-
     
85,563
     
-
 
Operating (loss) / income
           
(7,055
)
   
81,810
     
19,271
 
Other income / (expenses), net:
                               
Interest and finance costs
   
13
     
(1,460
)
   
(1,463
)
   
(8,389
)
Interest and finance costs - related party
   
3 & 13
     
(399
)
   
-
     
-
 
Interest income
           
-
     
14
     
13
 
Loss on interest rate swaps
           
-
     
-
     
(8
)
Foreign currency exchange (losses) / gains, net
           
(42
)
   
(13
)
   
19
 
Total other expenses, net
           
(1,901
)
   
(1,462
)
   
(8,365
)
(Loss) / income before taxes
           
(8,956
)
   
80,348
     
10,906
 
Income tax benefit
           
-
     
-
     
1
 
Net (loss) / income
           
(8,956
)
   
80,348
     
10,907
 
Net (loss) / income per common share
                               
Basic and diluted
   
14
     
(0.83
)
   
30.06
     
4.56
 
Weighted average common shares outstanding
                               
Basic
   
14
     
10,773,404
     
2,672,945
     
2,391,628
 
Diluted
   
14
     
10,773,404
     
2,672,950
     
2,391,885
 

The accompanying notes are an integral part of these consolidated financial statements.
F-4

Seanergy Maritime Holdings Corp.
Consolidated Statements of Stockholders Equity
For the years ended December 31, 2015, 2014 and 2013
 (In thousands of US Dollars, except for share data)

   
Common stock
           
Total stockholders'
 
   
# of Shares
   
Par Value
   
Additional paid-in capital
   
Accumulated deficit
   
equity / (deficit)
 
                     
Balance, January 1, 2013
   
2,391,856
     
-
     
294,520
     
(396,138
)
   
(101,618
)
Cancellation of equity incentive plan shares
   
(2
)
   
-
     
-
     
-
     
-
 
Stock based compensation (Note 15)
   
-
     
-
     
15
     
-
     
15
 
Net income for the year ended December 31, 2013
   
-
     
-
     
-
     
10,907
     
10,907
 
Balance, December 31, 2013
   
2,391,854
     
-
     
294,535
     
(385,231
)
   
(90,696
)
Related parties liabilities released (Note 3)
   
-
     
-
     
9,819
     
-
     
9,819
 
Issuance of common stock (Note 12)
   
1,586,000
     
-
     
3,205
     
-
     
3,205
 
Net income for the year ended December 31, 2014
   
-
     
-
     
-
     
80,348
     
80,348
 
Balance, December 31, 2014
   
3,977,854
     
-
     
307,559
     
(304,883
)
   
2,676
 
Issuance of common stock (Note 12)
   
15,355,559
     
2
     
13,819
     
-
     
13,821
 
Issuance of convertible promissory notes (Note 3)
   
-
     
-
     
15,765
     
-
     
15,765
 
Gain on extinguishment of convertible promissory notes (Note 3)
   
-
     
-
     
(200
)
   
-
     
(200
)
Stock based compensation (Note 15)
   
189,000
     
-
     
178
     
-
     
178
 
Net loss for the year ended December 31, 2015
   
-
     
-
     
-
     
(8,956
)
   
(8,956
)
Balance, December 31, 2015
   
19,522,413
     
2
     
337,121
     
(313,839
)
   
23,284
 
                                         

The accompanying notes are an integral part of these consolidated financial statements.
F-5

Seanergy Maritime Holdings Corp.
Consolidated Statements of Cash Flows
For the years ended December 31, 2015, 2014 and 2013
 (In thousands of US Dollars)

   
2015
   
2014
   
2013
 
Cash flows from operating activities:
           
Net (loss) / income
   
(8,956
)
   
80,348
     
10,907
 
Adjustments to reconcile net (loss) / income to net cash (used in) / provided by operating activities:
                       
Depreciation
   
1,865
     
3
     
982
 
Amortization of deferred dry-docking costs
   
38
     
-
     
232
 
Amortization of deferred finance charges
   
72
     
-
     
1,090
 
Amortization of convertible promissory note beneficial conversion feature
   
334
     
-
     
-
 
Gain on extinguishment of convertible promissory notes
   
(200
)
   
-
     
-
 
Stock based compensation
   
178
     
-
     
15
 
Loss on bad debt
   
30
     
38
     
-
 
Gain on restructuring
   
-
     
(85,563
)
   
-
 
Impairment of vessels and deferred charges
   
-
     
-
     
3,564
 
Gain on disposal of subsidiaries
   
-
     
-
     
(25,719
)
Change in fair value of financial instruments
   
-
     
-
     
8
 
Changes in operating assets and liabilities:
                       
Accounts receivable trade, net
   
(1,287
)
   
1,188
     
1,025
 
Inventories
   
(2,980
)
   
61
     
(1,005
)
Other current assets
   
(353
)
   
661
     
1,113
 
Deferred charges
   
(1,232
)
   
-
     
(1,041
)
Other non-current assets
   
-
     
-
     
141
 
Trade accounts and other payables
   
5,715
     
(1,884
)
   
(658
)
Due to related parties
   
(105
)
   
875
     
2,914
 
Accrued liabilities
   
1,990
     
(10,380
)
   
7,147
 
Deferred revenue
   
154
     
(205
)
   
315
 
Net cash (used in) / provided by operating activities
   
(4,737
)
   
(14,858
)
   
1,030
 
Cash flows from investing activities:
                       
Acquisition of vessels
   
(201,684
)
   
-
     
-
 
Net proceeds from sale of vessels
   
-
     
105,959
     
3,998
 
Additions to office furniture & equipment
   
-
     
(64
)
   
-
 
Cash disposed of upon disposal of subsidiaries
   
-
     
-
     
(2,005
)
Cash paid at subsidiary disposal
   
-
     
-
     
(1,000
)
Net cash (used in) / provided by investing activities
   
(201,684
)
   
105,895
     
993
 
Cash flows from financing activities:
                       
Net proceeds from issuance of common stock
   
13,820
     
3,204
     
-
 
Proceeds from long term debt
   
179,047
     
-
     
-
 
Proceeds from convertible promissory notes
   
15,765
     
-
     
-
 
Payments of financing costs
   
(930
)
   
-
     
-
 
Repayments of long term debt
   
(600
)
   
(94,443
)
   
(5,246
)
Repayments of convertible promissory notes
   
(200
)
   
-
     
-
 
Restricted cash (retained)/released
   
(50
)
   
-
     
2,000
 
Net cash provided by / (used in) financing activities
   
206,852
     
(91,239
)
   
(3,246
)
Net increase / (decrease) in cash and cash equivalents
   
431
     
(202
)
   
(1,223
)
Cash and cash equivalents at beginning of period
   
2,873
     
3,075
     
4,298
 
Cash and cash equivalents at end of period
   
3,304
     
2,873
     
3,075
 
SUPPLEMENTAL CASH FLOW INFORMATION
                       
Cash paid for interest
   
855
     
10,557
     
-
 
                         
The accompanying notes are an integral part of these consolidated financial statements.
F-6
Seanergy Maritime Holdings Corp.

Notes To The Consolidated Financial Statements

(All amounts in footnotes in thousands of US Dollars, except for share and per share data, unless otherwise stated)

1. Basis of Presentation and General Information:
Seanergy Maritime Holdings Corp. (the "Company" or "Seanergy") was formed under the laws of the Republic of the Marshall Islands on January 4, 2008, with executive offices located in Athens, Greece. The Company provides global transportation solutions in the drybulk shipping sector through its vessel-owning subsidiaries.
On January 8, 2016, the Company effected a one-to-five reverse stock split on its issued and outstanding common stock (Note 16). In connection with the reverse stock split 181 fractional shares were issued. All share and per share amounts disclosed in the consolidated financial statements and notes give effect to this reverse stock split retroactively, for all periods presented.
The accompanying consolidated financial statements include the accounts of Seanergy Maritime Holdings Corp. and its subsidiaries (collectively, the "Company" or "Seanergy").
a. Disposal of Subsidiaries:
On January 29, 2013, Maritime Capital Shipping Limited ("MCS"), a wholly owned subsidiary of the Company, sold its 100% ownership interest in the four subsidiaries that owned the Handysize drybulk carriers Fiesta, Pacific Fantasy, Pacific Fighter and Clipper Freeway. During the year ended December 31, 2013, the Company recognized a gain from the sale of the four MCS subsidiaries, of $5,538.
On July 19, 2013, MCS sold its 100% ownership interest in the three subsidiaries that owned the Handysize drybulk carriers African Joy, African Glory and Asian Grace. During the year ended December 31, 2013, the Company recognized a gain from the sale of the three MCS subsidiaries of $20,181.
b. Disposal of Vessels :
On March 11, 2014, the Company closed on its delivery and settlement agreement with its then remaining lender, Piraeus Bank, for the sale of its then four remaining vessels, to a nominee of the lender, in exchange for a nominal cash consideration and full satisfaction of the underlying loan facilities. The Company provided a corporate guarantee for these facilities. The four vessels were the drybulk carriers M/V Bremen Max, M/V Hamburg Max, M/V Davakis G. and M/V Delos Ranger. In exchange for the sale, approximately $145,597 of outstanding debt and accrued interest were discharged and the Company's guarantee was fully released.
For the year ended December 31, 2014, the Company recognized a gain from the sale of the four remaining vessels under the facility agreements with Piraeus Bank of $85,563.

c. Vessels Acquisitions:
On December 23, 2014 the Company entered into an agreement with an unaffiliated third party for the purchase of a second hand Capesize vessel, the 2001, 171,199 DWT vessel M/V Leadership. The acquisition was funded by secured senior bank debt, as well as financing by one of the Company's major shareholders. The transaction was approved by the Board of Directors. The vessel was delivered on March 19, 2015 (Note 7).
On August 6, 2015, the Company entered into a purchase agreement with entities affiliated with certain of the Company's major shareholder to acquire seven secondhand drybulk vessels (Notes 3 and 7).
d. Going Concern:
The Company acquired eight vessels in 2015 in accordance with its business plan to grow the fleet on a sustainable basis.
As of December 31, 2015, the Company was in compliance with all its financial covenants and asset coverage ratios contained in its debt agreements. Most financial covenants and asset coverage ratios will be tested commencing in 2017. Scheduled debt installment payments for 2016 amount to only $1,000, related to the Alpha Bank AE facility associated with the vessel Leadership. For the other facility agreements, debt repayments will commence in 2017 at the earliest.
F-7

Seanergy Maritime Holdings Corp.

Notes To The Consolidated Financial Statements

(All amounts in footnotes in thousands of US Dollars, except for share and per share data, unless otherwise stated)

Given the current drybulk charter rates, the Company's cash flow projections indicate that cash on hand and cash provided by operating activities might not be sufficient to cover the liquidity needs that become due in the twelve-month period ending December 31, 2016.
The Company has relied on Jelco Delta Holding Corp., or Jelco, a company affiliated with Claudia Restis, who is also the Company's major shareholder, for both vessel acquisitions and general corporate purposes during 2015 and for further funding during 2016.
The Company also intends to apply additional measures to reduce potential cash flow shortfall if current drybulk charter rates remain at today's historical low levels. The Company has undertaken a cost-cutting initiative to decrease its daily vessel operating expenses. The Company is also exploring raising additional equity from both capital markets and private investors.
These consolidated financial statements have been prepared assuming that the Company will continue as a going concern. Accordingly, they do not include any adjustments relating to the recoverability and classification of recorded asset amounts, the amounts and classification of liabilities, or any other adjustments that might result in the event the Company is unable to continue as a going concern.
e. Subsidiaries in Consolidation:
Seanergy's subsidiaries included in these consolidated financial statements as of December 31, 2015 are as follows:
Company
 
Country of Incorporation
 
Date of Incorporation
 
Vessel name
 
Date of Delivery
 
Date of Sale/Disposal
 
Financed by
Seanergy Management Corp.(1) (3)
 
Marshall Islands
 
May 9, 2008
 
N/A
 
N/A
 
N/A
 
N/A
Seanergy Shipmanagement Corp.(1) (3)
 
Marshall Islands
 
September 16, 2014
 
N/A
 
N/A
 
N/A
 
N/A
Sea Glorius Shipping Co.(1)
 
Marshall Islands
 
September 16, 2014
 
Gloriuship
 
November 3, 2015
 
N/A
 
HSH Nordbank AG
Sea Genius Shipping Co.(1)
 
Marshall Islands
 
September 16, 2014
 
Geniuship
 
October 13, 2015
 
N/A
 
HSH Nordbank AG
Leader Shipping Co.(1)
 
Marshall Islands
 
January 15, 2015
 
Leadership
 
March 19, 2015
 
N/A
 
Alpha Bank A.E.
Premier Marine Co.(1)
 
Marshall Islands
 
July 9, 2015
 
Premiership
 
September 11, 2015
 
N/A
 
UniCredit Bank AG
Gladiator Shipping Co.(1)
 
Marshall Islands
 
July 9, 2015
 
Gladiatorship
 
September 29, 2015
 
N/A
 
UniCredit Bank AG
Guardian Shipping Co.(1)
 
Marshall Islands
 
July 9, 2015
 
Guardianship
 
October 21, 2015
 
N/A
 
UniCredit Bank AG
Champion Ocean Navigation Co.(1)
 
Liberia
 
August 6, 2015
 
Championship
 
December 7, 2015
 
N/A
 
Natixis
Squire Ocean Navigation Co.(1)
 
Liberia
 
August 6, 2015
 
Squireship
 
November 10, 2015
 
N/A
 
Alpha Bank A.E.
Pembroke Chartering Services Limited (4)
 
Malta
 
December 2, 2015
 
N/A
 
N/A
 
N/A
 
N/A
Amazons Management Inc.(1)
 
Marshall Islands
 
April 21, 2008
 
Davakis G.
 
August 28, 2008
 
March 6, 2014
 
Piraeus Bank
Lagoon Shipholding Ltd.(1)
 
Marshall Islands
 
April 21, 2008
 
Delos Ranger
 
August 28, 2008
 
March 11, 2014
 
Piraeus Bank
Cynthera Navigation Ltd.(1)
 
Marshall Islands
 
March 18, 2008
 
African Oryx
 
August 28, 2008
 
April 10, 2013
 
Piraeus Bank
Martinique International Corp.(1)
 
British Virgin Islands
 
May 14, 2008
 
Bremen Max
 
September 11, 2008
 
March 7, 2014
 
Piraeus Bank
Harbour Business International Corp.(1)
 
British Virgin Islands
 
April 1, 2008
 
Hamburg Max
 
September 25, 2008
 
March 10, 2014
 
Piraeus Bank
Waldeck Maritime Co.(1)
 
Marshall Islands
 
April 21, 2008
 
African Zebra
 
September 25, 2008
 
February 15, 2012
 
Piraeus Bank
Maritime Capital Shipping Limited (1)
 
Bermuda
 
April 30, 2007
 
N/A
 
May 21, 2010
 
N/A
 
N/A
Maritime Capital Shipping (HK) Limited (3)
 
Hong Kong
 
June 16, 2006
 
N/A
 
May 21, 2010
 
N/A
 
N/A
Maritime Glory Shipping Limited (2)
 
British Virgin Islands
 
April 8, 2008
 
Clipper Glory
 
May 21, 2010
 
December 4, 2012
 
HSBC
Maritime Grace Shipping Limited (2)
 
British Virgin Islands
 
April 8, 2008
 
Clipper Grace
 
May 21, 2010
 
October 15, 2012
 
HSBC
Atlantic Grace Shipping Limited (5)
 
British Virgin Islands
 
October 9, 2007
 
N/A
 
May 21, 2010
 
N/A
 
N/A

(1) Subsidiaries wholly owned
(2) Vessel owning subsidiaries owned by MCS
(3) Management company
(4) Chartering services company
(5) Dormant company
F-8

Seanergy Maritime Holdings Corp.

Notes To The Consolidated Financial Statements

(All amounts in footnotes in thousands of US Dollars, except for share and per share data, unless otherwise stated)

2. Significant Accounting Policies:
(a) Principles of Consolidation
The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP) and include the accounts and operating results of Seanergy and its wholly-owned subsidiaries where Seanergy has control. Control is presumed to exist when Seanergy through direct or indirect ownership retains the majority of voting interest. In addition, Seanergy evaluates its relationships with other entities to identify whether they are variable interest entities and to assess whether it is the primary beneficiary of such entities. If the determination is made that the Company is the primary beneficiary, then that entity is included in the consolidated financial statements. The Company deconsolidates a subsidiary or derecognizes a group of assets when the Company no longer controls the subsidiary or group of assets, and a gain or loss is recognized. When the Company does not have a controlling interest in an entity, but exerts a significant influence over the entity, the Company applies the equity method of accounting. All significant intercompany balances and transactions and any intercompany profit or loss on assets remaining with the Group have been eliminated in the accompanying consolidated financial statements.
A parent company deconsolidates a subsidiary or derecognizes a group of assets when that parent company no longer controls the subsidiary or group of assets specified in ASC 810-10-40-3A. When control is lost, the parent-subsidiary relationship no longer exists and the parent derecognizes the assets and liabilities of the qualifying subsidiary or group of assets. The Financial Accounting Standards Board ("FASB") concluded that the loss of control and the related deconsolidation of a subsidiary or derecognition of a group of assets specified in ASC 810-10-40-3A is a significant economic event that changes the nature of the investment held in the subsidiary or group of assets. Based on this consideration, a gain or loss is recognized upon the deconsolidation of a subsidiary or derecognition of a group of assets.
(b) Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates include evaluation of relationships with other entities to identify whether they are variable interest entities, determination of vessel useful lives, allocation of purchase price in a business combination, determination of vessels impairment and determination of goodwill impairment.
(c) Foreign Currency Translation
Seanergy's functional currency is the United States dollar since the Company's vessels operate in international shipping markets and therefore primarily transact business in US Dollars. The Company's books of accounts are maintained in US Dollars. Transactions involving other currencies are translated into the United States dollar using exchange rates, which are in effect at the time of the transaction. At the balance sheet dates, monetary assets and liabilities, which are denominated in other currencies, are translated to United States dollars at the foreign exchange rate prevailing at year-end. Gains or losses resulting from foreign currency translation are reflected in the consolidated statement of income/(loss).
(d) Concentration of Credit Risk
Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist principally of cash and cash equivalents and trade accounts receivable. The Company places its cash and cash equivalents, consisting mostly of deposits, with high credit qualified financial institutions. The Company performs periodic evaluations of the relative credit standing of the financial institutions in which it places its deposits. The Company limits its credit risk with accounts receivable by performing ongoing credit evaluations of its customers' financial condition. Customers individually accounting for more than 10% of the Company's revenues during the years ended December 31, 2015, 2014 and 2013 were:
Customer
 
2015
 
2014
 
2013
A
 
47%
 
-
 
-
B
 
15%
 
-
 
-
C
 
12%
 
-
 
-
 D
 
10%
 
-
 
-
E
 
-
 
59%
 
18%
F
 
-
 
29%
 
-
G
 
-
 
-
 
16%
H
 
-
 
-
 
12%
I
 
-
 
-
 
10%
Total
 
84%
 
88%
 
56%
F-9

Seanergy Maritime Holdings Corp.

Notes To The Consolidated Financial Statements

(All amounts in footnotes in thousands of US Dollars, except for share and per share data, unless otherwise stated)

(e) Cash and Cash Equivalents
Seanergy considers time deposits and all highly liquid investments with an original maturity of three months or less to be cash equivalents. Restricted cash is excluded from cash and cash equivalents. Restricted cash represents minimum cash deposits or cash collateral deposits required to be maintained with certain banks under the Company's borrowing arrangements or in relation to bank guarantees issued on behalf of the Company. In the event that the obligation relating to such deposits is expected to be terminated within the next twelve months, these deposits are classified as current assets; otherwise they are classified as non-current assets.
(f) Accounts Receivable Trade, Net
Accounts receivable trade, net at each balance sheet date, includes receivables from charterers for hire, freight and demurrage billings, net of a provision for doubtful accounts. At each balance sheet date, all potentially uncollectible accounts are assessed individually for purposes of determining the appropriate provision for doubtful accounts. The provision for doubtful accounts at December 31, 2015 and 2014 amounted to $43 and $13, respectively.
(g) Inventories
Inventories consist of lubricants and bunkers which are stated at the lower of cost or market value. Cost is determined by the first in, first out method.
(h) Insurance Claims
The Company records insurance claim recoveries for insured losses incurred on damage to fixed assets and for insured crew medical expenses and for legal fees covered by directors' and officers' liability insurance. Insurance claim recoveries are recorded, net of any deductible amounts, at the time the Company's fixed assets suffer insured damages or when crew medical expenses are incurred, recovery is probable under the related insurance policies, the claim is not subject to litigation and the Company can make an estimate of the amount to be reimbursed. The classification of the insurance claims into current and non-current assets is based on management's expectations as to their collection dates.
(i) Vessels
Vessels acquired as a part of a business combination are recorded at fair market value on the date of acquisition. Vessels acquired as asset acquisitions are stated at historical cost, which consists of the contract price less discounts, plus any material expenses incurred upon acquisition (delivery expenses and other expenditures to prepare for the vessel's initial voyage). Vessels acquired from entities under common control are recorded at historical cost. Subsequent expenditures for conversions and major improvements are capitalized, when they appreciably extend the life, increase the earning capacity or improve the efficiency or safety of the vessels. Expenditures for routine maintenance and repairs are expensed as incurred.
(j) Vessel Depreciation
Depreciation is computed using the straight-line method over the estimated useful life of the vessels, after considering the estimated salvage value. Up to September 30, 2015, management estimated the useful life of the Company's vessels to be 30 years from the date of initial delivery from the shipyard. On October 1, 2015, the Company changed that estimate to 25 years. This change increased depreciation expense by $289 (approximately $0.03 per share) for the year ended December 31, 2015. Salvage value is estimated by the Company by taking the cost of steel times the weight of the ship noted in lightweight ton ("LWT"). Salvage values are periodically reviewed and revised to recognize changes in conditions, new regulations or other reasons. Revisions of salvage values affect the depreciable amount of the vessels and affects depreciation expense in the period of the revision and future periods. On October 1, 2015, the Company revised the salvage value of its vessels. This change increased depreciation expense by $235 (approximately $0.02 per share) for the year ended December 31, 2015.
F-10

Seanergy Maritime Holdings Corp.

Notes To The Consolidated Financial Statements

(All amounts in footnotes in thousands of US Dollars, except for share and per share data, unless otherwise stated)

(k) Impairment of Long-Lived Assets (Vessels)
The Company reviews its long-lived assets for impairment whenever events or changes in circumstances, such as undiscounted projected operating cash flows, business plans to dispose a vessel earlier than the end of its useful life and prevailing market conditions, indicate that the carrying amount of the assets may not be recoverable. The current conditions in the drybulk market with decreased charter rates and decreased vessel market values are conditions that the Company considers indicators of a potential impairment for its vessels.
The Company determines undiscounted projected operating cash flows, for each vessel and compares it to the vessel's carrying value. When the undiscounted projected operating cash flows expected to be generated by the use of the vessel and its eventual disposition are less than its carrying amount, the Company impairs the carrying amount of the vessel. Measurement of the impairment loss is based on the fair value of the asset as determined by independent valuators. The undiscounted projected operating cash inflows are determined by considering the charter revenues from existing time charters for the fixed fleet days and an estimated daily time charter equivalent for the non-fixed days (based on a combination of 2-year forward freight agreements and the median of the trailing 10-year historical charter rates available for each type of vessel) adjusted for brokerage commissions and expected outflows for scheduled vessels' maintenance. The undiscounted projected operating cash outflows are determined by reference to the Company's actual vessel operating expenses, assuming an average annual inflation rate of 2%. Fleet utilization excluding dry-docking off-hire days is determined by reference to the actual utilization rate of the Company's fleet in the recent years.
The Company recorded net impairment loss of $NIL, $ NIL and $3,564 for the years ended December 31, 2015, 2014 and 2013, respectively.
During the year ended December 31, 2013, the Company recorded an impairment loss of $867 for the vessel African Oryx that was sold on April 10, 2013 and $10,697 for the vessels Davakis G. and Delos Ranger, which were measured at their fair values, upon classification of the vessels financed by the Piraeus Bank loan facilities to current assets as of June 30, 2013, as per the Company's restructuring plan. This was partially offset with the impairment re measurement of $1,000 relating to the UOB vessels, and the impairment re measurement of $7,000 of Davakis G. and Delos Ranger as of December 31, 2013. The impairment loss was measured as the amount by which the carrying amount of the vessel exceeded its fair value less cost to sell, which was determined using the valuation derived from market data available at December 31, 2013.

 (l) Office equipment, net
Equipment consists of computer software and hardware. The useful life of the computer software and hardware is 3 years. Depreciation is calculated on a straight-line basis.
 (m) Dry-Docking and Special Survey Costs
The Company follows the deferral method of accounting for dry-docking costs and special survey costs whereby actual costs incurred are deferred and are amortized on a straight-line basis over the period through the expected date of the next dry-docking which is scheduled to become due in 2 to 3 years. Dry-docking costs which are not fully amortized by the next dry-docking period are expensed. In 2015, the Company changed the presentation of dry-docking and special survey costs on its consolidated statement of cash flows. Payments for dry-docking, shown as an adjustment to reconcile net income / (loss) to net cash provided by / (used in) operating activities was eliminated, and a new line "Deferred charges" under Changes in operating assets and liabilities was added to show gross additions for dry-docking and special survey costs.
(n) Commitments and Contingencies
Liabilities for loss contingencies, arising from claims, assessments, litigation, fines and penalties, environmental and remediation obligations and other sources are recorded when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated.
F-11

Seanergy Maritime Holdings Corp.

Notes To The Consolidated Financial Statements

(All amounts in footnotes in thousands of US Dollars, except for share and per share data, unless otherwise stated)

(o) Revenue Recognition
Voyage revenues are generated from time charters, bareboat charters and voyage charters. A time charter is a contract for the use of a vessel for a specific period of time and a specified daily charter hire rate, which is generally payable in advance. Some of the time charters also include profit sharing provisions, under which additional revenue can be realized in the event the spot rates are higher than the base rates under the time charters. A bareboat charter is a contract in which the vessel is provided to the charterer for a fixed period of time at a specified daily rate, which is generally payable in advance. Voyage charter agreements are charter hires, where a contract is made in the spot market for the use of a vessel for a specific voyage at a specified charter rate per ton of cargo.
Time charter revenue, including bareboat hire, is recorded over the term of the charter agreement as the service is provided and collection of the related revenue is reasonably assured. Under a time charter, revenue is adjusted for a vessel's off hire days due to major repairs, dry dockings or special or intermediate surveys. Voyage charter revenue is recognized on a pro-rata basis over the duration of the voyage, when a voyage agreement exists, the price is fixed or determinable, service is provided and the collection of the related revenue is reasonably assured. A voyage is deemed to commence upon signing the charter party or completion of previous voyage, whichever is later, and is deemed to end upon the completion of the discharge of the delivered cargo.
Deferred revenue represents cash received prior to the balance sheet date and is related to revenue applicable to periods after such date.
(p) Commissions
Commissions, which include address and brokerage commissions, are recognized in the same period as the respective charter revenues. Address commissions to third parties are included in Commissions. Brokerage commissions to third parties are included in Direct voyage expenses.
(q) Vessel Voyage Expenses
Vessel voyage expenses primarily consist of port, canal, bunker expenses and brokerage commissions that are unique to a particular charter and are paid for by the charterer under time charter agreements and other non-specified voyage expenses.
(r) Repairs and Maintenance
All repair and maintenance expenses, including major overhauling and underwater inspection expenses are expensed in the year incurred. Such costs are included in Vessel operating expenses.
(s) Financing Costs
Underwriting, legal and other direct costs incurred with the issuance of long-term debt or to refinance existing debt are deferred and amortized to interest expense over the life of the related debt using the effective interest method. Unamortized fees relating to loans repaid are expensed in the period the repayment is made.
Following the early adoption of Accounting Standards Update ("ASU") 2015-03 "Interest – Imputation of Interest" to simplify the presentation of debt issuance costs, effective December 31, 2015, the Company presents unamortized deferred financing costs as a reduction of long term debt in the accompanying balance sheets. There was no retrospective effect as the Company had neither debt nor debt issuance costs at December 31, 2014.
(t) Income Taxes
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized, when applicable, for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records interest related to unrecognized tax benefits in interest expense and penalties in general and administration expenses.
F-12

Seanergy Maritime Holdings Corp.

Notes To The Consolidated Financial Statements

(All amounts in footnotes in thousands of US Dollars, except for share and per share data, unless otherwise stated)

Maritime Capital Shipping (HK) Limited, the Company's management office in Hong Kong, is subject to Hong Kong profits tax at a rate of 16.5% on the estimated assessable profit for the year.
Seanergy Management Corp. ("Seanergy Management"), the Company's management company, established in Greece under Greek Law 89/67 (as amended to date), is subject to an annual contribution calculated on the total amount of foreign exchange annually imported and converted to Euros during 2012-2015 according to a tax bill passed in 2013 under the laws of the Republic of Greece. The tax bill was retroactive to 2012. The contribution to be paid in 2016 by Seanergy Management for 2015 is estimated at approximately $32.
Pursuant to the Internal Revenue Code of the United States (the "Code"), U.S. source income from the international operations of ships is generally exempt from U.S. tax if the company operating the ships meets both of the following requirements: (a) the Company is organized in a foreign country that grants an equivalent exception to corporations organized in the United States and (b) either (i) more than 50% of the value of the Company's stock is owned, directly or indirectly, by individuals who are "residents" of the Company's country of organization or of another foreign country that grants an "equivalent exemption" to corporations organized in the United States (50% Ownership Test) or (ii) the Company's stock is "primarily and regularly traded on an established securities market" in its country of organization, in another country that grants an "equivalent exemption" to United States corporations, or in the United States (Publicly-Traded Test).
Notwithstanding the foregoing, the regulations provide, in pertinent part, that each class of the Company's stock will not be considered to be "regularly traded" on an established securities market for any taxable year in which 50% or more of the vote and value of the outstanding shares of such class are owned, actually or constructively under specified stock attribution rules, on more than half the days during the taxable year by persons who each own 5% or more of the value of such class of the Company's outstanding stock ("5 Percent Override Rule").
The Company and each of its subsidiaries expects to qualify for this statutory tax exemption for the 2015 taxable year, and the Company takes this position for United States federal income tax return reporting purposes. However, there are factual circumstances beyond the Company's control that could cause it to lose the benefit of this tax exemption in future years and thereby become subject to United States federal income tax on its United States source income such as if, for a particular taxable year, other shareholders with a five percent or greater interest in the Company's stock were, in combination with the Company's existing 5% shareholders, to own 50% or more of the Company's outstanding shares of its stock on more than half the days during the taxable year.
The Company estimates that since no more than the 50% of its shipping income would be treated as being United States source income, the effective tax rate is expected to be 2% and accordingly it anticipates that the impact on its results of operations will not be material. The Company has assessed that it satisfies the Publicly-Traded Test and all of its United States source shipping income is exempt from U.S. federal income tax for the years ended December 31, 2015, 2014, and 2013. Based on its U.S. source Shipping Income for 2015, 2014 and 2013, the Company would be subject to U.S. federal income tax of approximately $NIL, $NIL and $25, respectively, in the absence of an exemption under Section 883.
(u) Stock-based Compensation
Stock-based compensation represents vested and non-vested common stock granted to directors and employees for their services. The Company calculates stock-based compensation expense for the award based on its fair value on the grant date and recognizes it on an accelerated basis over the vesting period.
(v) Earnings (Losses) per Share
Basic earnings (losses) per common share are computed by dividing net income (loss) available to Seanergy's shareholders by the weighted average number of common shares outstanding during the period. Diluted earnings (losses) per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted at the beginning of the periods presented, or issuance date, if later. Potential common shares that have an anti-dilutive effect (i.e. those that increase income per share or decrease loss per share) are excluded from the calculation of diluted earnings per share.
(w) Segment Reporting
Seanergy reports financial information and evaluates its operations by total charter revenues and not by the length of vessel employment, customer, or type of charter. As a result, management, including the chief operating decision maker, reviews operating results solely by revenue per day and operating results of the fleet and thus, Seanergy has determined that it operates under one reportable segment. Furthermore, when Seanergy charters a vessel to a charterer, the charterer is free to trade the vessel worldwide and, as a result, disclosure of geographic information is impracticable.
(x) Financial Instruments
Derivative instruments (including certain derivative instruments embedded in other contracts) are recorded in the balance sheet as either an asset or liability measured at its fair value, with changes in the derivatives' fair value recognized currently in earnings unless specific hedge accounting criteria are met. The Company was party to interest swap agreements where it received a floating interest rate and paid a fixed interest rate for a certain period in exchange. These contracts did not qualify for hedge accounting and as such changes in their fair values were reported to earnings. The fair value of those agreements equated to the amount that would be paid by the Company if the agreements were cancelled at the reporting date, taking into account current interest rates.
(y)        Fair Value Measurements
The Company follows the provisions of ASC 820 "Fair Value Measurements and Disclosures", which defines fair value and provides guidance for using fair value to measure assets and liabilities. The guidance creates a fair value hierarchy of measurement and describes fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the market in which the reporting entity transacts. In accordance with the requirements of accounting guidance relating to Fair Value Measurements, the Company classifies and discloses its assets and liabilities carried at the fair value in one of the following categories:
· Level 1: Quoted market prices in active markets for identical assets or liabilities;
· Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data;
· Level 3: Unobservable inputs that are not corroborated by market data.
 
F-13
Seanergy Maritime Holdings Corp.

Notes To The Consolidated Financial Statements

(All amounts in footnotes in thousands of US Dollars, except for share and per share data, unless otherwise stated)

(z)       Troubled Debt Restructurings
A restructuring of a debt constitutes a troubled debt restructuring if the lender or creditor for economic or legal reasons related to the Company's financial difficulties grants a concession to the Company that it would not otherwise consider. Troubled debt that is fully satisfied by foreclosure, repossession, or other transfer of assets or by grant of equity securities by the Company is included in the term troubled debt restructuring and is accounted as such.
The Company, when issuing or otherwise granting an equity interest to a lender or creditor to settle fully a payable or debt, accounts for the equity interest granted at its fair value. The difference between the fair value of the equity interest granted and the carrying amount of the payable or debt settled is recognized as a gain on restructuring of payables or debt. Legal fees and other direct costs incurred in granting an equity interest to a creditor reduce the fair value of the equity interest issued. All other direct costs incurred in connection with a troubled debt restructuring are charged to expense as incurred.
(aa)     Convertible Promissory Notes and related Beneficial Conversion Features
The convertible promissory notes are accounted in accordance with ASC 470-20 "Debt with Conversion and Other Options." The terms of each convertible promissory note included an embedded conversion feature which provided for a conversion at the option of the holder into shares of common stock at a predetermined rate.  The Company determined that the conversion features were beneficial conversion features ("BCF") pursuant to ASC 470-20. The Company considered the BCF guidance only after determining that the features did not need to be bifurcated under ASC 815 "Derivatives and Hedging" or separately accounted for under the cash conversion literature of ASC 470-20 "Debt, Debt with Conversion and Other Options".
Accounting for an embedded BCF in a convertible instrument requires that the BCF be recognized separately at issuance by allocating a portion of the proceeds equal to the intrinsic value of the BCF to additional paid-in capital, resulting in a discount on the convertible instrument. This discount is accreted from the date on which the BCF is first recognized through the stated maturity date of the convertible instrument using the effective yield method. If the intrinsic value of the BCF is greater than the proceeds allocated to the convertible instrument, the amount of the discount assigned to the BCF is limited to the amount of the proceeds allocated to the convertible instrument.
(ab)     Recent Accounting Pronouncements
In May 2014, the FASB issued Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers (Topic 606). The FASB and the International Accounting Standards Board ("IASB") jointly issued a standard that will supersede virtually all of the existing revenue recognition guidance in U.S. GAAP and is effective for annual periods beginning on or after December 15, 2016. The standard establishes a five-step model that will apply to revenue earned from a contract with a customer (with limited exceptions), regardless of the type of revenue transaction or the industry. The standard's requirements will also apply to the recognition and measurement of gains and losses on the sale of some non-financial assets that are not an output of the entity's ordinary activities (e.g., sales of property, plant and equipment or intangibles). Extensive disclosures will be required, including disaggregation of total revenue; information about performance obligations; changes in contract asset and liability account balances between periods and key judgments and estimates. Management is in the process of accessing the impact of the new standard on Company's financial position and performance. In August 2015, the FASB issued ASU No. 2015-14 "Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date", which defers the effective date of ASU 2014-09 ("Revenue from Contracts with Customers (Topic 606)")" for public business entities to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. Presently, the Company is assessing what effect the adoption of these ASUs will have on its financial statements and accompanying notes.
In August 2014, the FASB issued ASU 2014-15 – Presentation of Financial Statements - Going Concern. ASU 2014-15 provides guidance about management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures. ASU 2014-15 requires an entity's management to evaluate at each reporting period based on the relevant conditions and events that are known at the date when financial statements are issued, whether there are conditions or events, that raise substantial doubt about the entity's ability to continue as a going concern within one year after the date that the financial statements are issued and to disclose the necessary information. The guidance is effective for annual periods ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. Management is in the process of assessing the impact of the new standard on the Company's consolidated financial position and performance.
In February 2015, the FASB issued ASU 2015-02, "Consolidation (Topic 810) - Amendments to the Consolidation Analysis", which provides guidance for reporting entities that are required to evaluate whether they should consolidate certain legal entities. In accordance with ASU 2015-02, all legal entities are subject to reevaluation under the revised consolidation model. ASU 2015-02 is effective for public business entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted. The Company is currently in the process of evaluating the impact of the adoption of ASU 2015-02 on the consolidated financial statements.
In July 2015, the FASB issued ASU 2015-11, "Inventory (Topic 330): Simplifying the Measurement of Inventory". Topic 330, Inventory, currently requires an entity to measure inventory at the lower of cost or market. Market could be replacement cost, net realizable value, or net realizable value less an approximately normal profit margin. The amendments in this update require an entity to measure inventory within the scope of this update at the lower of cost and net realizable value.  For public business entities, the amendments in this update are effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The amendments in this update should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period.  While the Company has not yet adopted this ASU, its adoption is not expected to have a material effect on the Company's financial statements and accompanying notes.

F-14
Seanergy Maritime Holdings Corp.

Notes To The Consolidated Financial Statements

(All amounts in footnotes in thousands of US Dollars, except for share and per share data, unless otherwise stated)

In August 2015, the FASB issued ASU 2015-15 "Interest—Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements—Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting (SEC Update)" to add to the FASB's Accounting Standards Codification SEC staff guidance that the SEC staff will not object to an entity presenting the costs of securing line-of-credit arrangements as an asset, regardless of whether there are any outstanding borrowings. This updated does not have any effect on the Company's financial statements and accompanying notes presented herein.
In February 2016, the FASB issued ASU 2016-02 Leases (Topic 842) which provides new guidance related to accounting for leases and supersedes existing U.S. GAAP on lease accounting. The ASU will require organizations that lease assets to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases, unless the lease is a short term lease. Public business entities should apply the amendments in ASU 2016-02 for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted for all public business entities upon issuance. Lessees (for capital and operating leases) and lessors (for sales-type, direct financing, and operating leases) must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Lessees and lessors may not apply a full retrospective transition approach. Management is in the process of assessing the impact of the new standard on the Company's consolidated financial position and performance.
3. Transactions with Related Parties:
a.             Release from related parties liabilities:
On March 5, 2014, the Company entered into an agreement with Enterprises Shipping and Trading SA ("EST") and Safbulk Pty Ltd ("Safbulk Pty"), both affiliates, in exchange of a full and complete release of all their claims upon the completion of the delivery of the then last four remaining vessels and settlement agreement with Piraeus Bank.  The transaction was completed successfully on March 11, 2014 and total liabilities amounting to approximately $9,819 were released and recorded in additional paid-in capital.

b.             Convertible Promissory Notes:
On March 12, 2015 ("commitment date"), the Company issued an unsecured convertible promissory note of $4,000 to Jelco for general corporate purposes. The convertible note is repayable in ten consecutive semi-annual installments of $200, along with a balloon installment of $2,000 payable on the final maturity date, March 19, 2020. The note bears interest of Libor plus a margin with quarterly interest payments. At Jelco's option, the principal amount under the convertible note may be paid at any time in common shares at a conversion price of $0.90 (adjusted for the reverse stock split discussed in Note 1 above according to the terms of the convertible note) per share. The Company has the right to defer up to three consecutive installments to the balloon installment.
The Company accounted for the issuance of the convertible promissory note in accordance with the BCF guidance of ASC 470-20. The intrinsic value of the BCF was determined as the number of shares times the positive difference between the fair value of the stock on the commitment date and the contractual conversion price. Since the intrinsic value of the BCF at the commitment date was greater than the proceeds allocated to the convertible instrument, the amount of the discount assigned to the BCF was limited to the amount of the proceeds allocated to the convertible instrument. The Company has paid the first installment as of December 31, 2015, with the entire payment recorded as a reduction to Additional paid-in capital. The gain or loss on the extinguishment of the convertible debt instrument is the difference between the carrying amount and the consideration allocated to the debt instrument. The partial extinguishment of debt as a result of the payment is being shown as a gain on extinguishment (Note 13).
The movement of the debt and equity during the year ended December 31, 2015 is presented below:
   
December 31, 2015
 
Debt
   
Convertible promissory notes
   
4,000
 
Debt discount
   
(4,000
)
Amortization of debt discount (Note 13)
   
303
 
Partial extinguishment of debt
   
(200
)
Balance convertible promissory note
   
103
 
Short term portion
   
103
 
Long term portion
   
-
 
         
Additional paid-in capital
       
Intrinsic value of BCF
   
4,000
 
Consideration allocated to repurchase BCF
   
(200
)
Balance of intrinsic value of BCF
   
3,800
 

F-15
Seanergy Maritime Holdings Corp.

Notes To The Consolidated Financial Statements

(All amounts in footnotes in thousands of US Dollars, except for share and per share data, unless otherwise stated)

On September 7, 2015 ("commitment date"), the Company issued an unsecured revolving convertible promissory note of up to $6,765 (the "Applicable Limit") to Jelco for general corporate purposes. The revolving convertible promissory note has a tenor of up to five years after the first drawdown and the Applicable Limit is reduced by $1,000 each year after the second year following the first drawdown. The note bears interest of Libor plus a margin with quarterly interest payments. At Jelco's option, the Company's obligation to repay the principal amount under the revolving convertible note may be paid in common shares at a conversion price of $0.90 (adjusted for the reverse stock split discussed in Note 1 above according to the terms of the convertible note) per share. On December 1, 2015, the unsecured revolving convertible promissory note was amended, increasing the maximum principal amount available to be drawn to $9,765. On December 14, 2015, the unsecured revolving convertible promissory note was further amended, increasing the maximum principal amount available to be drawn to $11,765, while also increasing the amount by which the Applicable Limit will be reduced from $1,000 to $2,000. The Company has drawn down the entire $11,765 as of December 31, 2015.
The Company accounted for the issuance of the revolving convertible promissory note in accordance with the BCF guidance of ASC 470-20. The intrinsic value of the BCF was determined as the number of shares times the positive difference between the fair value of the stock on the commitment date and the contractual conversion price. Since the intrinsic value of the BCF at the commitment date was greater than the proceeds allocated to the convertible instrument, the amount of the discount assigned to the BCF was limited to the amount of the proceeds allocated to the convertible instrument.
The movement of the debt and equity during the year ended December 31, 2015 is presented below:
   
December 31, 2015
 
Debt
   
Convertible promissory notes
   
11,765
 
Debt discount
   
(11,765
)
Amortization of debt discount (Note 13)
   
31
 
Balance convertible promissory note
   
31
 
Short term portion
   
-
 
Long term portion
   
31
 
         
Additional paid-in capital
       
Intrinsic value of BCF
   
11,765
 
Balance of intrinsic value of BCF
   
11,765
 

c.             Vessel Acquisitions:
On August 6, 2015, the Company entered into a purchase agreement with entities affiliated with certain of the Company's major shareholders to acquire seven secondhand drybulk vessels, consisting of five Capesize and two Supramax vessels. The acquisition cost of the vessels was funded by senior secured loans, a shareholder's revolving convertible promissory note by Jelco and equity injections by Jelco. The transaction was completed on December 7, 2015, with the delivery of the last vessel. The transactions were approved by the independent committee of the Company's Board of Directors and the Company's Board of Directors. Below is a list of the vessels under the purchase agreement:
Vessel name
Date of Delivery
Vessel Class
DWT
Year Built
Premiership
September 11, 2015
Capesize
170,024
2010
Gladiatorship
September 29, 2015
Supramax
56,819
2010
Geniuship
October 13, 2015
Capesize
170,057
2010
Guardianship
October 21, 2015
Supramax
56,884
2011
Gloriuship
November 3, 2015
Capesize
171,314
2004
Squireship
November 10, 2015
Capesize
170,018
2010
Championship
December 7, 2015
Capesize
179,238
2011
         

d.             Technical Management Agreement:
A management agreement had been signed between the Company and EST for the provision of technical management services relating to certain vessels previously owned by Seanergy. The fixed daily fee per vessel for the years ended December 31, 2014 and 2013, was $0.45 . The technical management agreement was automatically terminated with the sale of Seanergy's fleet in March 2014 and EST has released the Company from all its claims relating thereto.
The related expense for the years ended December 31, 2015, 2014 and 2013, amounted to $NIL, $122 and $743, respectively, and is included under management fees - related party.
e.             Brokerage Agreement:
Under the terms of the brokerage agreements, Safbulk Pty and Safbulk Maritime S.A., both affiliates, together referred to as "Safbulk," provided commercial brokerage services for certain vessels previously owned under the Company's fleet in accordance with the instructions of Seanergy Management. Safbulk was entitled to receive a commission of 1.25% calculated on the collected gross hire/freight/demurrage payable when such amounts were collected. The brokerage agreements were automatically terminated with the sale of Seanergy's fleet in March 2014 and Safbulk has released the Company from all its claims relating thereto.
The fees charged by Safbulk amounted to $NIL, $24 and $313 for the years ended December 31, 2015, 2014 and 2013, respectively, and are separately reflected as voyage expenses — related party .
f.             Property Lease Agreement:
Until March 15, 2015, the Company's executive offices were at premises leased from Waterfront S.A., a company affiliated with a member of the Restis family. On March 16, 2015, the Company relocated its executive offices to premises owned by an unaffiliated third party. A three month rent guarantee of $55 is included in other current assets at December 31, 2014.
The rent charged by Waterfront S.A. for the years ended December 31, 2015, 2014 and 2013, amounted to $70, $309 and $412, respectively, and is included under general and administration expenses - related party.


F-16
Seanergy Maritime Holdings Corp.

Notes To The Consolidated Financial Statements

(All amounts in footnotes in thousands of US Dollars, except for share and per share data, unless otherwise stated)

4. Due to Related Parties:
As of December 31, 2015, due to related parties was $NIL. As of December 31, 2014, due to related parties of $105 consists of liabilities to Waterfront S.A. for common expenses for the leasehold property.
5. Inventories:
The amounts in the accompanying consolidated balance sheets are analyzed as follows:
   
December 31, 2015
   
December 31, 2014
 
Lubricants
   
739
     
-
 
Bunkers
   
2,241
     
-
 
Total
   
2,980
     
-
 
                 

6. Other Current Assets:
The amounts in the accompanying consolidated balance sheets are analyzed as follows:
   
December 31, 2015
   
December 31, 2014
 
         
Prepaid expenses
   
476
     
78
 
Insurance claims
   
14
     
22
 
Other
   
167
     
204
 
Total
   
657
     
304
 

7. Vessels, Net:
The amounts in the accompanying consolidated balance sheets are analyzed as follows:
   
December 31, 2015
   
December 31, 2014
 
Cost:
       
Beginning balance
   
-
     
-
 
- Additions
   
201,684
     
-
 
Ending balance
   
201,684
     
-
 
                 
Accumulated depreciation:
               
Beginning balance
   
-
     
-
 
- Additions
   
(1,844
)
   
-
 
Ending balance
   
(1,844
)
   
-
 
                 
Net book value
   
199,840
     
-
 

On March 19, 2015, the Company acquired the 2001 Capesize, 171,199 DWT vessel M/V Leadership from an unaffiliated party, for a net purchase price of $17,127, of which $8,750 was financed through a loan with Alpha Bank A.E., $3,827 was financed through a shareholder's convertible promissory note by Jelco and $4,550 was financed through an equity injection on March 18, 2015 by Jelco in exchange for the issuance of 5,000,100 newly issuance shares of common stock.

F-17
Seanergy Maritime Holdings Corp.

Notes To The Consolidated Financial Statements

(All amounts in footnotes in thousands of US Dollars, except for share and per share data, unless otherwise stated)

On August 6, 2015, the Company entered into a purchase agreement with entities affiliated with certain of the Company's major shareholder to acquire seven secondhand drybulk vessels, consisting of five Capesize and two Supramax vessels. These seven vessels were acquired as follows:
· On September 11, 2015, the Company acquired the vessel M/V Premiership for a purchase price of $29,951, of which $25,420 was financed through a loan with UniCredit Bank AG, $1,030 was financed through a shareholder's revolving convertible promissory note by Jelco and $3,501 was financed through an equity injection on September 11, 2015 by Jelco in exchange for the issuance of 3,889,980 newly issuance shares of common stock .
· On September 29, 2015, the Company acquired the vessel M/V Gladiatorship for a purchase price of $16,336, of which approximately $13,643 was financed through a loan with UniCredit Bank AG, $303 was financed through a shareholder's revolving convertible promissory note by Jelco and $2,390 was financed through an equity injection on September 29, 2015 by Jelco in exchange for the issuance of 2,655,740 newly issuance shares of common stock .
· On October 13, 2015, the Company acquired the vessel M/V Geniuship for a purchase price of $27,597, which was financed through a loan with HSH Nordbank AG.
· On October 21, 2015, the Company acquired the vessel M/V Guardianship for a purchase price of $17,168, of which approximately $13,642 was financed through a loan with UniCredit Bank AG, $397 was financed through a shareholder's revolving convertible promissory note by Jelco and $3,129 was financed through an equity injection on October 21, 2015 by Jelco in exchange for the issuance of 3,476,520 newly issuance shares of common stock .
· On November 3, 2015, the Company acquired the vessel M/V Gloriuship for a purchase price of $16,833, which was financed through a loan with HSH Nordbank AG.
· On November 10, 2015, the Company acquired the vessel M/V Squireship for a purchase price of $34,922, of which $33,750 was financed through a loan with Alpha Bank A.E. and $1,172 was financed through a shareholder's revolving convertible promissory note by Jelco.
· On December 7, 2015, the Company acquired the vessel M/V Championship for a purchase price of $41,750, of which $39,412 was financed through a loan with Natixis and $2,338 was financed through a shareholder's revolving convertible promissory note by Jelco.
All vessels are mortgaged to secured loans (Note 8).
8. Long-Term Debt:
The amounts in the accompanying consolidated balance sheets are analyzed as follows:
   
December 31, 2015
   
December 31, 2014
 
Secured loan facilities
   
178,447
     
-
 
Less: Deferred financing costs
   
(942
)
   
-
 
Total
   
177,505
     
-
 
Less - current portion
   
(718
)
   
-
 
Long-term portion
   
176,787
     
-
 
 
Secured credit facilities
On March 6, 2015, as amended, the Company entered into a loan agreement with Alpha Bank A.E., for a secured loan facility in an amount of $8,750. The loan was used to partially finance the acquisition of the M/V Leadership. On March 17, 2015, the Company drew down the $8,750. The loan is repayable in twenty consecutive quarterly installments, the first four installments being $200 each and the next sixteen quarterly installments being $250 each, along with a balloon installment of $3,950 payable on the final maturity date, March 17, 2020. The loan bears interest of Libor plus a margin of 3.75% with quarterly interest payments. The loan is secured by a first priority mortgage over the vessel. The facility places a restriction on the Company's ability to distribute dividends to its shareholders. The amount of the dividends so declared shall not exceed 50% of Seanergy's net income except in case the cash and marketable securities are equal or greater than the amount required to meet Seanergy's consolidated installment and debt interest payments for the following eighteen-month period. The Company has paid the first three installments as of December 31, 2015.

F-18
Seanergy Maritime Holdings Corp.

Notes To The Consolidated Financial Statements

(All amounts in footnotes in thousands of US Dollars, except for share and per share data, unless otherwise stated)

On September 1, 2015, the Company entered into a loan agreement with HSH Nordbank AG, for a secured loan facility in an amount of $44,430. The loan was used to pay for the acquisition of the vessels M/V Geniuship and M/V Gloriuship. The loan was available in two advances, each advance comprised of two tranches. On October 13, 2015, the Company drew the first advance of $27,597 in order to finance the acquisition of the M/V Geniuship. On November 3, 2015, the Company drew the second advance of $16,833 in order to finance the acquisition of the M/V Gloriuship. The loan is repayable in twelve consecutive quarterly installments being approximately $1,049 each, commencing on September 30, 2017, along with a balloon installment of $31,837 payable on the final maturity date, June 30, 2020. The loan bears interest of Libor plus margins between 3.25% and 3.6% with quarterly interest payments. The loan facility is secured by a first priority mortgage over the two vessels.
On September 11, 2015, the Company entered into a facility agreement with UniCredit Bank AG, for a secured loan facility in an amount of $52,705. The loan was made available in three tranches to partially finance the acquisition of the vessels M/V Premiership, M/V Gladiatorship and M/V Guardianship. On September 11, 2015, the Company drew the first tranche of $25,420 in order to partly finance the acquisition of the M/V Premiership. On September 29, 2015, the Company drew the second tranche of $13,643 in order to partly finance the acquisition of the M/V Gladiatorship. On October 21, 2015, the Company drew the third tranche of $13,642 in order to partly finance the acquisition of the M/V Guardianship. The loan is repayable in fifteen consecutive quarterly installments being $1,552 each, commencing on June 26, 2017, along with a balloon installment of $29,425 payable on the final maturity date, December 28, 2020. The loan bears interest of Libor plus a margin of 3.20% if the value to loan ratio is lower than 125%, 3.00% if the value to loan ratio is between 125% and 166.67% and 2.75% if the value to loan is higher than 166.67% with quarterly interest payments. The loan bore a commitment fee of 1.00% calculated on the balance of the undrawn loan amount and amounted to $22. The loan is secured by a first priority mortgage over the three vessels.
On November 4, 2015, the Company entered into a loan agreement with Alpha Bank A.E., for a secured loan facility in an amount of $33,750. The loan was used to partially finance the acquisition of the M/V Squireship. On November 10, 2015, the Company drew down the $33,750. The loan is repayable in sixteen consecutive quarterly installments being approximately $844 each, commencing on February 12, 2018, along with a balloon installment of $20,250 payable on the final maturity date, November 10, 2021. The loan bears interest of Libor plus a margin of 3.50% with quarterly interest payments. The loan is secured by a first priority mortgage over the vessel. The facility places a restriction on the Company's ability to distribute dividends to its shareholders. The amount of the dividends so declared shall not exceed 50% of Seanergy's net income except in case the cash and marketable securities are equal or greater than the amount required to meet Seanergy's consolidated installment and debt interest payments for the following eighteen-month period.
On December 2, 2015, the Company entered into a facility agreement with Natixis, for a secured loan facility in an amount of $39,412. The loan was used to partially finance the acquisition of the M/V Championship. On December 7, 2015, the Company drew down the $39,412. The loan is repayable in fifteen consecutive quarterly installments being $985 each, commencing on June 30, 2017, along with a balloon installment of $24,637 payable on the final maturity date, February 26, 2021. The loan bears interest of Libor plus a margin of 2.50% with quarterly interest payments. The loan is secured by a first priority mortgage over the vessel.
All of the above five facilities are guaranteed by Seanergy Maritime Holdings Corp., the Corporate Guarantor.

The annual principal payments required to be made after December 31, 2015 are as follows:
Year ended December 31,
 
Amount
 
2016
   
950
 
2017
   
10,710
 
2018
   
18,721
 
2019
   
18,721
 
2020
   
81,083
 
Thereafter
   
48,262
 
Total
   
178,447
 
         

F-19

Seanergy Maritime Holdings Corp.

Notes To The Consolidated Financial Statements

(All amounts in footnotes in thousands of US Dollars, except for share and per share data, unless otherwise stated)

9. Trade Accounts and Other Payables:
The amounts in the accompanying consolidated balance sheets are analyzed as follows:
   
December 31, 2015
   
December 31, 2014
 
Creditors
   
5,710
     
184
 
Insurances
   
162
     
3
 
Other
   
107
     
77
 
Total
   
5,979
     
264
 

10. Financial Instruments:
 (a) Significant Risks and Uncertainties, including Business and Credit Concentration
The Company places its temporary cash investments, consisting mostly of deposits, primarily with high credit qualified financial institutions. The Company performs periodic evaluations of the relative credit standing of those financial institutions that are considered in the Company's investment strategy. The Company limits its credit risk with accounts receivable by performing ongoing credit evaluations of its customers' financial condition and generally does not require collateral for its accounts receivable and does not have any agreements to mitigate credit risk.
 (b) Interest Rate Risk
Fair Value of Financial Instruments
The fair values of the financial instruments shown in the consolidated balance sheets as of December 31, 2015 and 2014 represent management's best estimate of the amounts that would be received to sell those assets or that would be paid to transfer those liabilities in an orderly transaction between market participants at that date. Those fair value measurements maximize the use of observable inputs. However, in situations where there is little, if any, market activity for the asset or liability at the measurement date, the fair value measurement reflects the Company's own judgments about the assumptions that market participants would use in pricing the asset or liability. Those judgments are developed by the Company based on the best information available in the circumstances.
The following methods and assumptions were used to estimate the fair value of each class of financial instruments:
a. Cash and cash equivalents, restricted cash, accounts receivable trade, other current assets, trade accounts and other payables and due to related parties: the carrying amounts approximate fair value because of the short maturity of these instruments.
b. Long-term debt: The carrying value approximates the fair market value as the long-term debt bears interest at floating interest rate.
11. Commitments and Contingencies:
Various claims, lawsuits, and complaints, including those involving government regulations and product liability, arise in the ordinary course of the shipping business. In addition, losses may arise from disputes with charterers, agents, insurance and other claims with suppliers relating to the operations of the Company's vessels. Currently, management is not aware of any such claims or contingent liabilities, which should be disclosed, or for which a provision should be established in the accompanying consolidated financial statements.

F-20
Seanergy Maritime Holdings Corp.

Notes To The Consolidated Financial Statements

(All amounts in footnotes in thousands of US Dollars, except for share and per share data, unless otherwise stated)

The Company accrues for the cost of environmental liabilities when management becomes aware that a liability is probable and is able to reasonably estimate the probable exposure. Currently, management is not aware of any such claims or contingent liabilities, which should be disclosed, or for which a provision should be established in the accompanying consolidated financial statements. The Company is covered for liabilities associated with the individual vessels' actions to the maximum limits as provided by Protection and Indemnity (P&I) Clubs, members of the International Group of P&I Clubs.
12. Capital Structure:
(a)  Common Stock
On June 24, 2014, the Company had entered into a share purchase agreement under which the Company sold 378,000 of its common shares to Plaza Shipholding Corp. and Comet Shipholding Inc., companies affiliated with certain members of the Restis family, for $1,134. The common shares were sold at a price of $3.00 per share. The Company's Board of Directors obtained a fairness opinion from an independent third party for the share price. The price was determined using a build-up method, combining the Company's net asset value with the cost that a private company would incur to be listed on a U.S. stock exchange and with an additional option value to existing shareholders upon the consummation of the Asset Contribution calculated from the Black-Scholes options pricing model. On June 27, 2014, the Company completed the equity injection plan with the two abovementioned entities. The shares to the two entities were issued on June 27, 2014.
On September 29, 2014, the Company had entered into a share purchase agreement under which the Company sold 320,000 of its common shares to Plaza Shipholding Corp. and Comet Shipholding Inc., companies affiliated with certain members of the Restis family, for $960. The common shares were sold at a price of $3.00 per share. The Company's Board of Directors obtained an updated fairness opinion from an independent third party for the share price. The price was determined using a build-up method, combining the Company's net asset value with the cost that a private company would incur to be listed on a U.S. stock exchange and with an additional option value to existing shareholders upon the consummation of the Asset Contribution calculated from the Black-Scholes options pricing model.  On September 30, 2014, the Company completed the equity injection plan with the two abovementioned entities. The shares to the two entities were issued on September 30, 2014.
On December 19, 2014, the Company had entered into a share purchase agreement under which the Company sold 888,000 of its common shares to Jelco for $1,110. The common shares were sold at a price of $1.25 per share. The Company's Board of Directors obtained a fairness opinion from an independent third party for the share price. The price was determined using a build-up method, combining the Company's net asset value with the cost that a private company would incur to be listed on a U.S. stock exchange. On December 30, 2014, the Company completed the equity injection plan with the abovementioned entity. The shares to the entity were issued on December 30, 2014.
On March 12, 2015, the Company entered into a share purchase agreement under which the Company sold 5,000,100 of its common shares to Jelco for $4,500. The common shares were sold at a price of $0.90 per share. The Company's Board of Directors obtained a fairness opinion from an independent third party for the share price. The price was determined using the adjusted book value method. On March 16, 2015, the Company completed the equity injection plan with the abovementioned entity. The shares to the entity were issued on March 18, 2015.
On March 12, 2015, the Company entered into a share purchase agreement under which the Company sold 333,400 of its common shares to its Chief Executive Officer, or CEO, for $300. The common shares were sold at a price of $0.90 per share. The Company's Board of Directors obtained a fairness opinion from an independent third party for the share price. The price was determined using the adjusted book value method. On March 16, 2015, the Company completed the equity injection plan with the abovementioned entity. The shares to the CEO were issued on March 18, 2015. The funds were contributed for general corporate purposes.
On September 7, 2015, the Company entered into a share purchase agreement under which the Company sold 10,022,240 of its common shares in three tranches to Jelco for $9,020. The common shares were sold at a price of $0.90 per share. The Company's Board of Directors obtained a fairness opinion from an independent third party for the share price. The price was determined using the capital market multiples and the discounted cash flow methods. On September 11, 2015, the first tranche of $3,501 was contributed in exchange for 3,889,980 common shares of the Company, which were issued on September 11, 2015. On September 29, 2015, the second tranche of $2,390 was contributed in exchange for 2,655,740 common shares of the Company, which were issued on September 29, 2015. On October 21, 2015, the third tranche of $3,129 was contributed in exchange for 3,476,520 common shares of the Company, which shares were issued on October 21, 2015. The transaction was approved by an independent committee of the Company's Board of Directors.

F-21
Seanergy Maritime Holdings Corp.

Notes To The Consolidated Financial Statements

(All amounts in footnotes in thousands of US Dollars, except for share and per share data, unless otherwise stated)

The purchasers of all above issued shares have received customary registration rights.
(b) Warrants and Unit Purchase Option
In connection with the public offering of January 28, 2010, the Company granted 1,041,667 warrants with an exercise price of $19.80 each on February 3, 2010 and on March 19, 2010, Seanergy granted 97,250 additional warrants. The fair value of these warrants amounted to $1,053. The warrants were exercisable beginning on August 3, 2010 and expired on January 28, 2015. No expenses were recorded in connection with these warrants which were classified in equity.
Following the Company's reverse stock split in June 2011, with respect to the warrants from the Company's 2010 secondary offering, as a result of the reverse stock split, each warrant reflected an increase in the per share exercise price and a decrease in the number of warrant shares at the same proportion as the reverse stock split. Accordingly, each warrant was exercisable for one-fifteenth of a share, following the reverse stock split at an exercise price of $19.80 for each such warrant share.
As of December 31, 2015 and 2014, the Company had outstanding underwriters' warrants exercisable to purchase an aggregate of approximately NIL and 15,185 shares of Seanergy's common stock, respectively.
(c) Preferred Stock
As of December 31, 2015 and 2014, no shares of preferred stock have been issued.
(d) Dividends
The declaration and payment of any dividend is subject to the discretion of Seanergy's board of directors and is dependent upon its earnings, financial condition, cash requirements and availability and restrictions in any applicable loan agreements. No dividends were declared for the years ended December 31, 2015, 2014 and 2013.
13. Interest and Finance Costs:
Interest and finance costs are analyzed as follows:
   
Year ended December 31
 
   
2015
   
2014
   
2013
 
Interest on long-term debt
   
1,353
     
811
     
5,075
 
Interest on revolving credit facility
   
-
     
396
     
2,144
 
Amortization of debt issuance costs
   
72
     
-
     
1,090
 
Arrangement fees on undrawn facilities
   
-
     
246
     
-
 
Other
   
35
     
10
     
80
 
Total
   
1,460
     
1,463
     
8,389
 

Interest and finance costs-related party are analyzed as follows:
   
Year ended December 31
 
   
2015
   
2014
   
2013
 
Convertible notes interest expense
   
265
     
-
     
-
 
Convertible notes amortization of debt discount
   
334
     
-
     
-
 
Gain on extinguishment of convertible notes
   
(200
)
   
-
     
-
 
Total
   
399
     
-
     
-
 


F-22
Seanergy Maritime Holdings Corp.

Notes To The Consolidated Financial Statements

(All amounts in footnotes in thousands of US Dollars, except for share and per share data, unless otherwise stated)

14. Earnings per Share:
The calculation of net earnings per common share is summarized below:
   
For the years ended December 31
 
   
2015
   
2014
   
2013
 
Basic:
           
Net (loss) / income
   
(8,956
)
   
80,348
     
10,907
 
                         
Weighted average common shares outstanding – basic
   
10,773,404
     
2,672,945
     
2,391,628
 
Net (loss) / income per common share – basic
 
$
(0.83
)
 
$
30.06
   
$
4.56
 
                         
Diluted:
                       
Net (loss) / income
   
(8,956
)
   
80,348
     
10,907
 
                         
Weighted average common shares outstanding – basic
   
10,773,404
     
2,672,945
     
2,391,628
 
Non-vested equity incentive shares
   
-
     
5
     
227
 
Weighted average common shares outstanding – diluted
   
10,773,404
     
2,672,950
     
2,391,885
 
                         
Net (loss) / income per common share – diluted
 
$
(0.83
)
 
$
30.06
   
$
4.56
 
                         

As of December 31, 2015, 2014 and 2013, securities that could potentially dilute basic EPS in the future that were not included in the computation of diluted EPS as mentioned above are:
   
2015
   
2014
   
2013
 
Non-vested equity incentive plan shares (Note 15)
   
152,000
     
-
     
-
 
Convertible promissory note shares (Note 3)
   
17,294,444
     
-
     
-
 
Private shares under warrants (Note 12)
   
-
     
15,185
     
15,185
 
Total
   
17,446,444
     
15,185
     
15,185
 

15. Equity Incentive Plan:
On January 12, 2011, the Board adopted the Seanergy Maritime Holdings Corp. 2011 Equity Incentive Plan ("Plan"). A total of 8,750,000 shares of common stock were reserved for issuance under the Plan, which is administered by the Compensation Committee of the Board of Directors. Under the Plan, officers, key employees, directors, consultants and service providers may be granted incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, unrestricted stock and restricted stock units at the discretion of the Compensation Committee. In May 2012, the total number of shares originally reserved under the Plan was adjusted to 583,334 shares to reflect the one-for-fifteen reverse stock split of June 24, 2011.
On February 16, 2011, the Compensation Committee granted an aggregate of 666 restricted shares of common stock, pursuant to the Plan. Of the total 666 shares issued, 533 shares were granted to Seanergy's two executive directors and the other 133 shares were granted to certain of Seanergy's other employees. The fair value of each share on the grant date was $66.40 and was expensed over three years. All the shares vested proportionally over a period of three years, commencing on January 10, 2012. 223 shares vested on January 10, 2012, 222 shares vested on January 10, 2013 and 219 shares vested on January 10, 2014.
On July 2, 2015, the total number of shares originally reserved under the Plan was increased to 856,667.

F-23
Seanergy Maritime Holdings Corp.

Notes To The Consolidated Financial Statements

(All amounts in footnotes in thousands of US Dollars, except for share and per share data, unless otherwise stated)

On October 1, 2015, the Compensation Committee granted an aggregate of 189,000 restricted shares of common stock, pursuant to the Plan. Of the total 189,000 shares issued, 36,000 shares were granted to Seanergy's board of directors and the other 153,000 shares were granted to certain of Seanergy's other employees. The fair value of each share on the grant date was $3.70 and will be expensed over three years. The shares to Seanergy's board of directors will vest over a period of two years commencing on October 1, 2015. On October 1, 2015, 12,000 shares vested, 12,000 shares will vest on October 1, 2016 and 12,000 shares will vest on October 1, 2017. All the other shares granted to certain of Seanergy's other employees will vest over a period of three years, commencing on October 1, 2015. On October 1, 2015, 25,000 shares vested, 33,000 shares will vest on October 1, 2016, 44,000 shares will vest on October 1, 2017 and 51,000 shares will vest on October 1, 2018.
The related expense for the years ended December 31, 2015, 2014 and 2013, amounted to $178, $NIL and $15, respectively, and is included under general and administration expenses. The unrecognized cost for the non-vested shares as of December 31, 2015 and 2014 amounted to $521 and $NIL, respectively.
On January 8, 2016, we effected a one-for-five reverse stock split of our issued common stock (Note 16). The reverse stock split ratio and the implementation and timing of the reverse stock split were determined by our Board of Directors. The reverse stock split did not change the authorized number of shares or par value of our common stock or preferred stock, but did effect a proportionate adjustment to the number of shares of common stock issuable upon the vesting of restricted stock awards, and the number of shares of common stock eligible for issuance under our Plan. All applicable outstanding equity awards discussed above have been adjusted retroactively for the one-for-five reverse stock split.
16. Subsequent Events:
The Company has evaluated subsequent events that occurred after the balance sheet date but before the issuance of these consolidated financial statements and, where it was deemed necessary, appropriate disclosures have been made.
a) On January 8, 2016, the Company's common stock began trading on a split-adjusted basis, following a December 22, 2015 approval from the Company's Board of Directors to reverse split the Company's common stock at a ratio of one-for-five. There was no change in the number of authorized shares or the par value of the Company's common stock.
b) On January 27, 2016, the unsecured revolving convertible promissory note was further amended, increasing the maximum principal amount available to be drawn to $13,765. On January 29, 2016, the Company drew down the additional undrawn balance of $2,000.
c) On January 27, 2016 the Company received a letter from The Nasdaq Stock Market confirming that it has regained compliance with the minimum bid price requirement.
d) On March 7, 2016, the unsecured revolving convertible promissory note was further amended, increasing the maximum principal amount available to be drawn to $16,265, while also increasing the amount by which the Applicable Limit will be reduced from $2,000 to $2,500. On March 8, 2016, the Company drew down the additional undrawn balance of $2,500.
 
 
F-24
Schedule I- Condensed Financial Information of Seanergy Maritime Holdings Corp. (Parent Company Only)
Balance Sheets
December 31, 2015 and 2014
(In thousands of US Dollars, except for share and per share data)

   
2015
   
2014
 
ASSETS
       
Current assets:
       
Cash and cash equivalents
   
2,078
     
2,578
 
Restricted cash
   
50
     
-
 
Other current assets
   
24
     
42
 
Total current assets
   
2,152
     
2,620
 
                 
Non-current assets:
               
Investments in subsidiaries*
   
21,613
     
271
 
Total non-current assets
   
21,613
     
271
 
                 
TOTAL ASSETS
   
23,765
     
2,891
 
                 
                 
LIABILITIES AND STOCKHOLDERS EQUITY
               
Current liabilities:
               
Current portion of convertible promissory notes
   
103
     
-
 
Trade accounts and other payables
   
171
     
100
 
Accrued liabilities
   
176
     
115
 
Total current liabilities
   
450
     
215
 
                 
Non-current liabilities:
               
Long-term portion of convertible promissory notes
   
31
     
-
 
Total liabilities
   
481
     
215
 
                 
Commitments and contingencies
   
-
     
-
 
                 
STOCKHOLDERS EQUITY
               
Preferred stock, $0.0001 par value; 25,000,000 shares authorized; none issued
   
-
     
-
 
Common stock, $0.0001 par value; 500,000,000 authorized shares as at December 31,
2015 and 2014; 19,522,413 and 3,977,854 shares issued and outstanding as
at December 31, 2015 and 2014, respectively
   
2
     
-
 
Additional paid-in capital
   
337,121
     
307,559
 
Accumulated deficit
   
(313,839
)
   
(304,883
)
Total Stockholders' equity
   
23,284
     
2,676
 
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
   
23,765
     
2,891
 

* Eliminated in consolidation
F-25

Schedule I- Condensed Financial Information of Seanergy Maritime Holdings Corp. (Parent Company Only)
 
Statements of Income / (Loss)
 
For the years ended December 31, 2015, 2014 and 2013
 
(In thousands of US Dollars, except for share and per share data)

 
2015
   
2014
   
2013
 
Expenses:
 
   
   
 
General and administration expenses
   
(1,256
)
   
(1,123
)
   
(1,958
)
Operating loss
   
(1,256
)
   
(1,123
)
   
(1,958
)
                         
Other (expenses) / income, net:
                       
Interest and finance cost – related party
   
(399
)
   
-
     
-
 
Other, net
   
(9
)
   
8
     
1
 
Total other (expenses) / income, net
   
(408
)
   
8
     
1
 
                         
Equity in (loss)/earnings of subsidiaries*
   
(7,292
)
   
81,463
     
12,864
 
                         
Net (loss) / income
   
(8,956
)
   
80,348
     
10,907
 
                         
Net (loss) / income per common share
                       
Basic and diluted
   
(0.83
)
   
30.06
     
4.56
 
Weighted average common shares outstanding
                       
Basic
   
10,773,404
     
2,672,945
     
2,391,628
 
Diluted
   
10,773,404
     
2,672,950
     
2,391,885
 

       
* Eliminated in consolidation
     
 

F-26

 
Schedule I- Condensed Financial Information of Seanergy Maritime Holdings Corp. (Parent Company Only)
Statements of Cash Flows
For the years ended December 31, 2015, 2014 and 2013
(In thousands of US Dollars)
 
   
2015
   
2014
   
2013
 
Net cash used in operating activities
   
(1,202
)
   
(1,195
)
   
(2,806
)
                         
Cash flows used in investing activities:
                       
Investments in subsidiaries
   
(28,633
)
   
(2,198
)
   
-
 
Net cash used in investing activities
   
(28,633
)
   
(2,198
)
   
-
 
                         
Cash flows from financing activities:
                       
Net proceeds from issuance of common stock
   
13,820
     
3,204
     
-
 
Proceeds from convertible promissory notes
   
15,765
     
-
     
-
 
Repayments of convertible promissory notes
   
(200
)
   
-
     
-
 
Restricted cash retained
   
(50
)
   
-
     
-
 
Due to subsidiaries
   
-
     
-
     
5,198
 
Net cash provided by financing activities
   
29,335
     
3,204
     
5,198
 
                         
Net (decrease) / increase in cash and cash equivalents
   
(500
)
   
(189
)
   
2,392
 
Cash and cash equivalents at beginning of period
   
2,578
     
2,767
     
375
 
Cash and cash equivalents at end of period
   
2,078
     
2,578
     
2,767
 
                         
SUPPLEMENTAL CASH FLOW INFORMATION
                       
    Cash paid for interest
   
222
     
-
     
-
 


F-27

Schedule I- Condensed Financial Information of Seanergy Maritime Holdings Corp. (Parent Company Only)
Notes To The Condensed Financial Statements
(All amounts in footnotes in thousands of US Dollars)
 
 
1.              Basis of Presentation
In the parent-company-only condensed financial statements, the Parent Company's (the "Company") investment in subsidiaries is stated at cost plus equity in undistributed earnings of subsidiaries. The Parent Company did not receive cash dividends from its subsidiaries during the years ended December 31, 2015, 2014 and 2013.
The parent-company-only condensed financial statements should be read in conjunction with the Company's consolidated financial statements.
2.              Convertible Promissory Notes
On March 12, 2015 ("commitment date"), the Company issued an unsecured convertible promissory note of $4,000 to Jelco Delta Holding Corp., or Jelco, a company affiliated with Claudia Restis, for general corporate purposes. The convertible note is repayable in ten consecutive semi-annual installments of $200, along with a balloon installment of $2,000 payable on the final maturity date, March 19, 2020. The note bears interest of Libor plus a margin with quarterly interest payments. At Jelco's option, the principal amount under the convertible note may be paid at any time in common shares at a conversion price of $0.90 (adjusted for the reverse stock split discussed in Note 1 of the consolidated financial statements according to the terms of the convertible note) per share. The Company has the right to defer up to three consecutive installments to the balloon installment. As of the date of this annual report the Company has deferred the installment due for payment on March 19, 2016 to the balloon installment.
On September 7, 2015 ("commitment date"), the Company issued an unsecured revolving convertible promissory note of up to $6,765 (the "Applicable Limit") to Jelco for general corporate purposes. The revolving convertible promissory note has a tenor of up to five years after the first drawdown and the Applicable Limit is reduced by $1,000 each year after the second year following the first drawdown. The note bears interest of Libor plus a margin with quarterly interest payments. At Jelco's option, the Company's obligation to repay the principal amount under the revolving convertible note may be paid in common shares at a conversion price of $0.90 (adjusted for the reverse stock split discussed in Note 1 of the consolidated financial statements according to the terms of the convertible note) per share. On December 1, 2015, the unsecured revolving convertible promissory note was amended, increasing the maximum principal amount available to be drawn to $9,765. On December 14, 2015, the unsecured revolving convertible promissory note was further amended, increasing the maximum principal amount available to be drawn to $11,765, while also increasing the amount by which the Applicable Limit will be reduced from $1,000 to $2,000. The Company has drawn down the entire $11,765 as of December 31, 2015.
See Note 3 "Transactions with Related Parties" to the consolidated financial statements for further information.
3.              Guarantee
All of the Company's vessel-owning subsidiaries have long-term facilities. Under the terms of the loan agreements, the Company has guaranteed the payment of all principal and interest. In the event of a default under the loan agreements, the Company will be directly liable to the lenders. The facilities mature at various times between 2020 and 2021. The maximum potential amount that the Company could be liable for under the guarantee as of December 31, 2015 is $178,447.
See Note 8 "Long-Term Debt" to the consolidated financial statements for further information.


 
F-28
Exhibit 4.1
 
 
AMENDED AND RESTATED
 
SEANERGY MARITIME HOLDINGS CORPORATION
2011 EQUITY INCENTIVE PLAN
 
ADOPTED ON JULY 2, 2015
 
 
ARTICLE I.
General
 
1.1.              Purpose
 
The Seanergy Maritime Holdings Corporation 2011 Equity Incentive Plan (the "Plan") is designed to provide certain Key Persons (as defined below), whose initiative and efforts are deemed to be important to the successful conduct of the business of Seanergy Maritime Holdings Corporation (the "Company"), with incentives to (a) enter into and remain in the service of the Company or its Affiliates (as defined below), (b) acquire a proprietary interest in the success of the Company, (c) maximize their performance and (d) enhance the long-term performance of the Company.
 
1.2.              Administration
 
(a)              Administration .  The Plan shall be administered by the Compensation Committee of the Company's Board of Directors (the "Board") or such other committee of the Board as may be designated by the Board to administer the Plan (the "Administrator"); provided that (i) in the event the Company is subject to Section 16 of the U.S. Securities Exchange Act of 1934, as amended (the "1934 Act"), the Administrator shall be composed of two or more directors, each of whom is a "Non-Employee Director" (a "Non-Employee Director") under Rule 16b-3 (as promulgated and interpreted by the Securities and Exchange Commission (the "SEC") under the 1934 Act, or any successor rule or regulation thereto as in effect from time to time ("Rule 16b-3")), and (ii) the Administrator shall be composed solely of two or more directors who are "independent directors" under the rules of any stock exchange on which the Company's Common Stock (as defined below) is traded; provided   further , however , that, (A) the requirement in the preceding clause (i) shall apply only when required to exempt an Award intended to qualify for an exemption under the applicable provisions referenced therein, (B) the requirement in the preceding clause (ii) shall apply only when required pursuant to the applicable rules of the applicable stock exchange and (C) if at any time the Administrator is not so composed as required by the preceding provisions of this sentence, that fact will not invalidate any grant made, or action taken, by the Administrator hereunder that otherwise satisfies the terms of the Plan.  Subject to the terms of the Plan and applicable law, and in addition to other express powers and authorizations conferred on the Administrator by the Plan, the Administrator shall have the full power and authority to: (1) designate the Persons (as defined below) to receive Awards (as defined below) under the Plan; (2) determine the types of Awards granted to a participant under the Plan; (3) determine the number of shares to be covered by, or with respect to which payments, rights or other matters are to be calculated with respect to, Awards; (4) determine the terms and conditions of any Awards; (5) determine whether, and to what extent, and under what circumstances, Awards may be settled or exercised in cash, shares, other securities, other Awards or other property, or cancelled, forfeited or suspended, and the methods by which Awards may be settled, exercised, cancelled, forfeited or suspended; (6) determine whether, to what extent, and under what circumstances cash, shares, other securities, other Awards, other property and other amounts payable with respect to an Award shall be deferred, either automatically or at the election of the holder thereof or the Administrator; (7) construe, interpret and implement the Plan and any Award Agreement (as defined below); (8) prescribe, amend, rescind or waive rules and regulations relating to the Plan, including rules governing its operation, and appoint such agents as it shall deem appropriate for the proper administration of the Plan; (9)  correct any defect, supply any omission and reconcile any inconsistency in the Plan or any Award Agreement; and (10) make any other determination and take any other action that the Administrator deems necessary or desirable for the administration of the Plan.  Unless otherwise expressly provided in the Plan, all designations, determinations, interpretations and other decisions under or with respect to the Plan or any Award shall be within the sole discretion of the Administrator, may be made at any time and shall be final, conclusive and binding upon all Persons.
 
(b)              General Right of Delegation .  Except to the extent prohibited by applicable law, the applicable rules of a stock exchange or any charter, by-laws or other agreement governing the Administrator, the Administrator may delegate all or any part of its responsibilities to any Person or Persons selected by it; provided , however , that in no event shall an officer of the Company be delegated the authority to grant Awards to, or amend Awards held by, the following individuals: (i) individuals who are subject to Section 16 of the 1934 Act, or (ii) officers of the Company (or directors of the Company) to whom authority to grant or amend Awards has been delegated hereunder; provided , further , that any delegation of administrative authority shall only be permitted to the extent it is permissible under applicable securities laws (including, without limitation, Rule 16b-3, to the extent applicable) and the rules of any applicable stock exchange.  Any delegation hereunder shall be subject to the restrictions and limits that the Administrator specifies at the time of such delegation, and the Administrator may at any time rescind the authority so delegated or appoint a new delegate.  At all times, the delegatee appointed under this Section 1.2(b) shall serve in such capacity at the pleasure of the Administrator.
 
(c)              Indemnification .  No member of the Board, the Administrator or any employee of the Company or an Affiliate (each such Person, a "Covered Person") shall be liable for any action taken or omitted to be taken or any determination made in good faith with respect to the Plan or any Award hereunder.  Each Covered Person shall be indemnified and held harmless by the Company against and from (i) any loss, cost, liability or expense (including attorneys' fees) that may be imposed upon or incurred by such Covered Person in connection with or resulting from any action, suit or proceeding to which such Covered Person may be a party or in which such Covered Person may be involved by reason of any action taken or omitted to be taken under the Plan or any Award Agreement and (ii) any and all amounts paid by such Covered Person, with the Company's approval, in settlement thereof, or paid by such Covered Person in satisfaction of any judgment in any such action, suit or proceeding against such Covered Person; provided that the Company shall have the right, at its own expense, to assume and defend any such action, suit or proceeding and, once the Company gives notice of its intent to assume the defense, the Company shall have sole control over such defense with counsel of the Company's choice.  The foregoing right of indemnification shall not be available to a Covered Person to the extent that a court of competent jurisdiction in a final judgment or other final adjudication, in either case not subject to further appeal, determines that the acts or omissions of such Covered Person giving rise to the indemnification claim resulted from such Covered Person's bad faith, fraud or willful criminal act or omission or that such right of indemnification is otherwise prohibited by law or by the Company's articles of incorporation or by-laws (in each case, as amended and/or restated).  The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which Covered Persons may be entitled under the Company's articles of incorporation or by-laws (in each case, as amended and/or restated), as a matter of law, or otherwise, or any other power that the Company may have to indemnify such Persons or hold them harmless.
 
 
(d)              Delegation of Authority to Senior Officers .  The Administrator may, in accordance with and subject to the terms of Section 1.2(b), delegate, on such terms and conditions as it determines, to one or more senior officers of the Company the authority to make grants of Awards to employees of the Company and its Subsidiaries (as defined below)(including any such prospective employee) and consultants of the Company and its Subsidiaries.
 
(e)              Award Grants .  Notwithstanding anything to the contrary contained herein, the Board may, in its sole discretion, at any time and from time to time, grant Awards to Non-Employee Directors or administer the Plan with respect to such Awards, in which event the Board shall have all the authority and responsibility granted to the Administrator herein with respect to such Awards.  In determining Awards to be granted under the Plan, the Administrator shall take into account such factors as it deem advisable, which may include taking into account the Company's performance, the Award recipient's performance, and/or the satisfaction of any performance goals or targets as may established from time to time.
 
1.3.              Persons Eligible for Awards
 
The Persons eligible to receive Awards under the Plan are those directors, officers and employees (including any prospective officer or employee) of the Company and its Subsidiaries and Affiliates and consultants and service providers (including individuals who are employed by or provide services to any entity that is itself such a consultant or service provider) to the Company and its Subsidiaries and Affiliates (collectively, "Key Persons") as the Administrator shall select.
 
1.4.              Types of Awards
 
Awards may be made under the Plan in the form of (a) "incentive stock options" that are intended to qualify for special U.S. federal income tax treatment pursuant to Sections 421 and 422 of the Code (as defined below), as may be amended from time to time, or pursuant to a successor provision of the Code, and which is so designated in the applicable Award Agreement, (b) non-qualified stock options (i.e., any stock options granted under the Plan that are not "incentive stock options"), (c) stock appreciation rights, (d) restricted stock, (e) restricted stock units and (f) unrestricted stock, all as more fully set forth in the Plan.  The term "Award" means any of the foregoing that are granted under the Plan. No incentive stock option (other than an incentive stock option that may be assumed or issued by the Company in connection with a transaction to which Section 424(a) of the Code applies) may be granted under the Plan to a Person who is not eligible to receive an incentive stock option under the Code.
 
1.5.              Shares Available for Awards; Adjustments for Changes in Capitalization
 
(a)              Maximum Number .  Subject to adjustment as provided in Section 1.5(c), the aggregate number of shares of common stock of the Company, par value $.0001 ("Common Stock"), with respect to which Awards may at any time be granted under the Plan shall be 4,283,334.  The following shares of Common Stock shall again become available for Awards under the Plan: (i) any shares that are subject to an Award under the Plan and that remain unissued upon the cancellation or termination of such Award for any reason whatsoever; (ii) any shares of restricted stock forfeited pursuant to the Plan or the applicable Award Agreement; provided that any dividend equivalent rights with respect to such shares that have not theretofore been directly remitted to the grantee are also forfeited; and (iii) any shares in respect of which an Award is settled for cash without the delivery of shares to the grantee.  Any shares tendered or withheld to satisfy the grant or exercise price or tax withholding obligation pursuant to any Award shall again become available to be delivered pursuant to Awards under the Plan.
 
(b)              Source of Shares .  Shares issued pursuant to the Plan may be authorized but unissued Common Stock or treasury shares.  The Administrator may direct that any stock certificate evidencing shares issued pursuant to the Plan shall bear a legend setting forth such restrictions on transferability as may apply to such shares.
 
(c)              Adjustments .  (i)  In the event that any dividend or other distribution (whether in the form of cash, Company shares, other securities or other property), stock split, reverse stock split, reorganization, merger, consolidation, split-up, combination, repurchase or exchange of Company shares or other securities of the Company, issuance of warrants or other rights to purchase Company shares or other securities of the Company, or other similar corporate transaction or event, other than an Equity Restructuring (as defined below), affects the Company shares such that an adjustment is determined by the Administrator to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan or with respect to an Award, then the Administrator shall, in such manner as it may deem equitable, adjust any or all of the number of shares or other securities of the Company (or number and kind of other securities or property) with respect to which Awards may be granted under the Plan, including the maximum number of shares issuable to an individual as set forth in Section 1.5(d).
 
(ii)              The Administrator is authorized to make adjustments in the terms and conditions of, and the criteria included in, Awards in recognition of unusual or nonrecurring events (including the events described in Section 1.5(c)(i) or the occurrence of a Change in Control (as defined below), other than an Equity Restructuring) affecting the Company, any Affiliate, or the financial statements of the Company or any Affiliate, or of changes in applicable rules, rulings, regulations or other requirements of any governmental body or securities exchange, accounting principles or law, whenever the Administrator determines that such adjustments are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan or with respect to an Award, including providing for (A) adjustment to (1) the number of shares or other securities of the Company (or number and kind of other securities or property) subject to outstanding Awards or to which outstanding Awards relate and (2) the Exercise Price (as defined below) with respect to any Award and (B) a substitution or assumption of Awards, accelerating the exercisability or vesting of, or lapse of restrictions on, Awards, or accelerating the termination of Awards by providing for a period of time for exercise prior to the occurrence of such event, or, if deemed appropriate or desirable, providing for a cash payment to the holder of an outstanding Award in consideration for the cancellation of such Award (it being understood that, in such event, any option or stock appreciation right having a per share Exercise Price equal to, or in excess of, the Fair Market Value (as defined below) of a share subject to such option or stock appreciation right may be cancelled and terminated without any payment or consideration therefor); provided , however , that with respect to options and stock appreciation rights, unless otherwise determined by the Administrator, such adjustment shall be made in accordance with the provisions of Section 424(h) of the Code.
 
 
2
 
(iii)              In the event of (A) a dissolution or liquidation of the Company, (B) a sale of all or substantially all the Company's assets or (C) a merger, reorganization or consolidation involving the Company or one of its Subsidiaries (as defined below), the Administrator shall have the power to:
 
(1)                    provide that outstanding options, stock appreciation rights and/or restricted stock units (including any related dividend equivalent right) shall either continue in effect, be assumed or an equivalent award shall be substituted therefor by the successor corporation or a parent corporation or subsidiary corporation;
 
(2)                    cancel, effective immediately prior to the occurrence of such event, options, stock appreciation rights and/or restricted stock units (including each dividend equivalent right related thereto) outstanding immediately prior to such event (whether or not then exercisable) and, in full consideration of such cancellation, pay to the holder of such Award a cash payment in an amount equal to the excess, if any, of the Fair Market Value (as of a date specified by the Administrator) of the shares subject to such Award over the aggregate Exercise Price of such Award (it being understood that, in such event, any option or stock appreciation right having a per share Exercise Price equal to, or in excess of, the Fair Market Value of a share subject to such option or stock appreciation right may be cancelled and terminated without any payment or consideration therefor); or
 
(3)                     notify the holder of an option or stock appreciation right in writing or electronically that each option and stock appreciation right shall be fully vested and exercisable for a period of 30 days from the date of such notice, or such shorter period as the Administrator may determine to be reasonable, and the option or stock appreciation right shall terminate upon the expiration of such period (which period shall expire no later than immediately prior to the consummation of the corporate transaction).
 
(iv)              In connection with the occurrence of any Equity Restructuring, and notwithstanding anything to the contrary in this Section 1.5(c):
 
(A)              The number and type of securities or other property subject to each outstanding Award and the Exercise Price or grant price thereof, if applicable, shall be equitably adjusted; and
 
(B)              The Administrator shall make such equitable adjustments, if any, as the Administrator may deem appropriate to reflect such Equity Restructuring with respect to the aggregate number and kind of shares that may be issued under the Plan (including, but not limited to, adjustments of the limitations set forth in Sections 1.5(a) and 1.5(d)).  The adjustments provided under this Section 1.5(c)(iv) shall be nondiscretionary and shall be final and binding on the affected participant and the Company.
 
(d)              Individual Limit .  Except for the limits set forth in this Section 1.5, no provision of this Plan shall be deemed to limit the number or value of shares of Common Stock with respect to which the Administrator may make Awards to any Key Person.  Subject to adjustment as provided in Section 1.5(c), the total number of shares of Common Stock with respect to which incentive stock options may be granted under the Plan to any one employee of the Company or a "parent corporation" or "subsidiary corporation" (as such terms are defined in Section 424 of the Code) of the Company during any one calendar year shall not exceed 3,125,000.  Incentive stock options granted and subsequently cancelled or deemed to be cancelled ( e.g. , as a result of re-pricing) in a calendar year count against the limit in the preceding sentence even after their cancellation.
 
1.6.              Definitions of Certain Terms
 
(a)              "Affiliate" shall mean (i) any entity that, directly or indirectly, is controlled by, controls or is under common control with, the Company and (ii) any entity in which the Company has a significant equity interest, in either case as determined by the Administrator.
 
(b)              Unless otherwise set forth in the applicable Award Agreement, in connection with a termination of employment or consultancy/service relationship or a dismissal from Board membership, for purposes of the Plan, the term "for Cause" shall be defined as follows:
 
(i)      if there is an employment, severance, consulting, service, change in control or other agreement governing the relationship between the grantee, on the one hand, and the Company or an Affiliate, on the other hand, that contains a definition of "cause" (or similar phrase), for purposes of the Plan, the term "for Cause" shall mean those acts or omissions that would constitute "cause" under such agreement; or
 
(ii)      if the preceding clause (i) is not applicable to the grantee, for purposes of the Plan, the term "for Cause" shall mean any of the following:
 
 
3
 
(A)                                any failure by the grantee substantially to perform the grantee's employment or consulting/service or Board membership duties;
 
(B)                                any excessive unauthorized absenteeism by the grantee;
 
(C)                                any refusal by the grantee to obey the lawful orders of the Board or any other Person to whom the grantee reports;
 
(D)                                any act or omission by the grantee that is or may be injurious to the Company or any Affiliate, whether monetarily, reputationally or otherwise;
 
(E)                                any act by the grantee that is inconsistent with the best interests of the Company or any Affiliate;
 
(F)                                the grantee's gross negligence that is injurious to the Company or any Affiliate, whether monetarily, reputationally or otherwise;
 
(G)                                the grantee's material violation of any of the policies of the Company or an Affiliate, as applicable, including, without limitation, those policies relating to discrimination or sexual harassment;
 
(H)                                the grantee's material breach of his or her employment or service contract with the Company or any Affiliate;
 
(I)                                the grantee's unauthorized (1) removal from the premises of the Company or an Affiliate of any document (in any medium or form) relating to the Company or an Affiliate or the customers or clients of the Company or an Affiliate or (2) disclosure to any Person of any of the Company's, or any Affiliate's, confidential or proprietary information;
 
(J)                                the grantee's being convicted of, or entering a plea of guilty or nolo contendere to, any crime that constitutes a felony or involves moral turpitude; and
 
(K)                                the grantee's commission of any act involving dishonesty or fraud.
 
Any rights the Company or its Affiliates may have under the Plan in respect of the events giving rise to a termination or dismissal "for Cause" shall be in addition to any other rights the Company or its Affiliates may have under any other agreement with a grantee or at law or in equity.  Any determination of whether a grantee's employment, consultancy/service relationship or Board membership is (or is deemed to have been) terminated "for Cause" shall be made by the Administrator.  If, subsequent to a grantee's voluntary termination of employment or consultancy/service relationship or voluntarily resignation from the Board or involuntary termination of employment or consultancy/service relationship without Cause or removal from the Board other than "for Cause", it is discovered that the grantee's employment or consultancy/service relationship or Board membership could have been terminated "for Cause", the Administrator may deem such grantee's employment or consultancy/service relationship or Board membership to have been terminated "for Cause" upon such discovery and determination by the Administrator.
 
(c)              "Code" shall mean the Internal Revenue Code of 1986, as amended.
 
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(d)              Unless otherwise set forth in the applicable Award Agreement, "Disability" shall mean the grantee's being unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or the grantee's, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the grantee's employer.  The existence of a Disability shall be determined by the Administrator.
 
(e)              "Equity Restructuring" shall mean a non-reciprocal transaction between the Company and its stockholders, such as a stock dividend, stock split, spin-off, rights offering or recapitalization through a large, nonrecurring cash dividend, that affects the shares of Common Stock (or other securities of the Company) or the share price thereof and causes a change in the per share value of the shares underlying outstanding Awards.
 
(f)              "Exercise Price" shall mean (i) in the case of options, the price specified in the applicable Award Agreement as the price-per-share at which such share can be purchased pursuant to the option or (ii) in the case of stock appreciation rights, the price specified in the applicable Award Agreement as the reference price-per-share used to calculate the amount payable to the grantee.
 
(g)              The "Fair Market Value" of a share of Common Stock on any day shall be the closing price on the Nasdaq Global Market, or such other primary stock exchange upon which such shares are then listed, as reported for such day in The Wall Street Journal, or, if no such price is reported for such day, the average of the high bid and low asked price of Common Stock as reported for such day.  If no quotation is made for the applicable day, the Fair Market Value of a share of Common Stock on such day shall be determined in the manner set forth in the preceding sentence for the next preceding trading day.  Notwithstanding the foregoing, if there is no reported closing price or high bid/low asked price that satisfies the preceding sentences, or if otherwise deemed necessary or appropriate by the Administrator, the Fair Market Value of a share of Common Stock on any day shall be determined by such methods and procedures as shall be established from time to time by the Administrator.  The "Fair Market Value" of any property other than Common Stock shall be the fair market value of such property determined by such methods and procedures as shall be established from time to time by the Administrator.
 
(h)              "Person" shall mean any individual, firm, corporation, partnership, limited liability company, trust, incorporated or unincorporated association, joint venture, joint stock company, governmental body or other entity of any kind.
 
(i)              "Repricing" shall mean (i) lowering the Exercise Price of an option or a stock appreciation right after it has been granted, (ii) the cancellation of an option or a stock appreciation right in exchange for cash or another Award when the Exercise Price exceeds the Fair Market Value of the underlying shares subject to the Award and (iii) any other action with respect to an option or a stock appreciation right that is treated as a repricing under (A) generally accepted accounting principles or (B) any applicable stock exchange rules.
 
(j)              Unless otherwise set forth in the applicable Award Agreement, "Retirement" shall mean a grantee's resignation of employment or consultancy/service relationship or dismissal from the Board, with the Company's or its applicable Affiliate's prior consent, on or after (i) his or her 65th birthday, (ii) the date on which he or she has attained age 60 and completed at least five years of service with the Company or one or more of its Affiliates (using any method of calculation the Administrator deems appropriate) or (iii) if approved by the Administrator, on or after his or her having completed at least 20 years of service with the Company or one or more of its Affiliates (using any method of calculation the Administrator deems appropriate).
 
(k)              "Subsidiary" shall mean any entity in which the Company, directly or indirectly, has a 50% or more equity interest.
 
 
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ARTICLE II.
Awards Under The Plan
 
2.1.              Agreements Evidencing Awards
 
Each Award granted under the Plan shall be evidenced by a written certificate ("Award Agreement"), which shall contain such provisions as the Administrator may deem necessary or desirable and which may, but need not, require execution or acknowledgment by a grantee.  The Award shall be subject to all of the terms and provisions of the Plan and the applicable Award Agreement.
 
2.2.              Grant of Stock Options and Stock Appreciation Rights
 
(a)              Stock Option Grants .  The Administrator may grant non-qualified stock options and/or incentive stock options (collectively, "options") to purchase shares of Common Stock from the Company to such Key Persons, and in such amounts and subject to such vesting and forfeiture provisions and other terms and conditions, as the Administrator shall determine, subject to the provisions of the Plan.  Except to the extent otherwise specifically provided in the applicable Award Agreement, no option will be treated as an "incentive stock option" for purposes of the Code.  Incentive stock options may be granted to employees of the Company and any "parent corporation" or "subsidiary corporation" (as such terms are defined in Section 424 of the Code) of the Company.  In the case of incentive stock options, the terms and conditions of such Awards shall be subject to such applicable rules as may be prescribed by Sections 421, 422 and 424 of the Code and any regulations related thereto, as may be amended from time to time.  If an option is intended to be an incentive stock option, and if for any reason such option (or any portion thereof) shall not qualify as an incentive stock option for purposes of Section 422 of the Code, then, to the extent of such non-qualification, such option (or portion thereof) shall be regarded as a non-qualified stock option appropriately granted under the Plan; provided that such option (or portion thereof) otherwise complies with the Plan's requirements relating to option Awards.  It shall be the intent of the Administrator to not grant an Award in the form of stock options to any Key Person who is then subject to the requirements of Section 409A of the Code with respect to such Award if the Common Stock (as defined below) underlying such Award does not then qualify as "service recipient stock" for purposes of Section 409A.  Furthermore, it shall be the intent of the Administrator, in granting options to Key Persons who are subject to Section 409A and/or 457 of the Code, to structure such options so as to comply with the requirements of Section 409A and/or 457 of the Code, as applicable.
 
(b)              Stock Appreciation Right Grants; Types of Stock Appreciation Rights .  The Administrator may grant stock appreciation rights to such Key Persons, and in such amounts and subject to such vesting and forfeiture provisions and other terms and conditions, as the Administrator shall determine, subject to the provisions of the Plan.  The terms of a stock appreciation right may provide that it shall be automatically exercised for a payment upon the happening of a specified event that is outside the control of the grantee and that it shall not be otherwise exercisable.  Stock appreciation rights may be granted in connection with all or any part of, or independently of, any option granted under the Plan.  It shall be the intent of the Administrator to not grant an Award in the form of stock appreciation rights to any Key Person (i) who is then subject to the requirements of Section 409A of the Code with respect to such Award if the Common Stock underlying such Award does not then qualify as "service recipient stock" for purposes of Section 409A or (ii) if such Award would create adverse tax consequences for such Key Person under Section 457A of the Code.
 
(c)              Nature of Stock Appreciation Rights .  The grantee of a stock appreciation right shall have the right, subject to the terms of the Plan and the applicable Award Agreement, to receive from the Company an amount equal to (i) the excess of the Fair Market Value of a share of Common Stock on the date of exercise of the stock appreciation right over the Exercise Price of the stock appreciation right, multiplied by (ii) the number of shares with respect to which the stock appreciation right is exercised.  Each Award Agreement with respect to a stock appreciation right shall set forth the Exercise Price of such Award and, unless otherwise specifically provided in the Award Agreement, the Exercise Price of a stock appreciation right shall equal the Fair Market Value of a share of Common Stock on the date of grant; provided that in no event may such Exercise Price be less than the greater of (A) the Fair Market Value of a share of Common Stock on the date of grant and (B) the par value of a share of Common Stock.  Payment upon exercise of a stock appreciation right shall be in cash or in shares of Common Stock (valued at their Fair Market Value on the date of exercise of the stock appreciation right) or any combination of both, all as the Administrator shall determine.  Repricing of stock appreciation rights granted under the Plan shall not be permitted (1) to the extent such action could cause adverse tax consequences to the grantee under Sections 409A or 457A of the Code or (2) without prior shareholder approval, to the extent such approval would be required to be obtained by the Company pursuant to the applicable rules of any applicable stock exchange on which the Common Stock is then listed, and any action that would be deemed to result in a Repricing of a stock appreciation right shall be deemed null and void if it would cause such adverse tax consequences or if any requisite shareholder approval related thereto is not obtained prior to the effective time of such action.  Upon the exercise of a stock appreciation right granted in connection with an option, the number of shares subject to the option shall be reduced by the number of shares with respect to which the stock appreciation right is exercised.  Upon the exercise of an option in connection with which a stock appreciation right has been granted, the number of shares subject to the stock appreciation right shall be reduced by the number of shares with respect to which the option is exercised.
 
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(d)              Option Exercise Price .  Each Award Agreement with respect to an option shall set forth the Exercise Price of such Award and, unless otherwise specifically provided in the Award Agreement, the Exercise Price of an option shall equal the Fair Market Value of a share of Common Stock on the date of grant; provided that in no event may such Exercise Price be less than the greater of (i) the Fair Market Value of a share of Common Stock on the date of grant and (ii) the par value of a share of Common Stock.  Repricing of options granted under the Plan shall not be permitted (1) to the extent such action could cause adverse tax consequences to the grantee under Sections 409A or 457A of the Code or (2) without prior shareholder approval, to the extent such approval would be required to be obtained by the Company pursuant to the applicable rules of any applicable stock exchange on which the Common Stock is then listed, and any action that would be deemed to result in a Repricing of an option shall be deemed null and void if it would cause such adverse tax consequences or if any requisite shareholder approval related thereto is not obtained prior to the effective time of such action.
 
2.3.              Exercise of Options and Stock Appreciation Rights
 
Subject to the other provisions of this Article II and the Plan, each option and stock appreciation right granted under the Plan shall be exercisable as follows:
 
(a)              Timing and Extent of Exercise .  Options and stock appreciation rights shall be exercisable at such times and under such conditions as determined by the Administrator and set forth in the corresponding Award Agreement, but in no event shall any portion of such Award be exercisable subsequent to the tenth anniversary of the date on which such Award was granted.  Unless the applicable Award Agreement otherwise provides, an option or stock appreciation right may be exercised from time to time as to all or part of the shares as to which such Award is then exercisable.
 
(b)              Notice of Exercise .  An option or stock appreciation right shall be exercised by the filing of a written notice with the Company or the Company's designated exchange agent (the "Exchange Agent"), on such form and in such manner as the Administrator shall prescribe.
 
(c)              Payment of Exercise Price .  Any written notice of exercise of an option shall be accompanied by payment for the shares being purchased.  Such payment shall be made: (i) by certified or official bank check (or the equivalent thereof acceptable to the Company or its Exchange Agent) for the full option Exercise Price; (ii) with the consent of the Administrator, which consent shall be given or withheld in the sole discretion of the Administrator, by delivery of shares of Common Stock having a Fair Market Value (determined as of the exercise date) equal to all or part of the option Exercise Price and a certified or official bank check (or the equivalent thereof acceptable to the Company or its Exchange Agent) for any remaining portion of the full option Exercise Price; or (iii) at the sole discretion of the Administrator and to the extent permitted by law, by such other provision, consistent with the terms of the Plan, as the Administrator may from time to time prescribe (whether directly or indirectly through the Exchange Agent), or by any combination of the foregoing payment methods.
 
(d)              Delivery of Certificates Upon Exercise .  Subject to Sections 3.2, 3.4 and 3.13, promptly after receiving payment of the full option Exercise Price, or after receiving notice of the exercise of a stock appreciation right for which the Administrator determines payment will be made partly or entirely in shares, the Company or its Exchange Agent shall (i) deliver to the grantee, or to such other Person as may then have the right to exercise the Award, a certificate or certificates for the shares of Common Stock for which the Award has been exercised or, in the case of stock appreciation rights, for which the Administrator determines will be made in shares or (ii) establish an account evidencing ownership of the stock in uncertificated form.   If the method of payment employed upon an option exercise so requires, and if applicable law permits, an optionee may direct the Company or its Exchange Agent, as the case may be, to deliver the stock certificate(s) to the optionee's stockbroker.
 
(e)              No Stockholder Rights .  No grantee of an option or stock appreciation right (or other Person having the right to exercise such Award) shall have any of the rights of a stockholder of the Company with respect to shares subject to such Award until the issuance of a stock certificate to such Person for such shares.  Except as otherwise provided in Section 1.5(c), no adjustment shall be made for dividends, distributions or other rights (whether ordinary or extraordinary, and whether in cash, securities or other property) for which the record date is prior to the date such stock certificate is issued.
 
2.4.              Termination of Employment; Death Subsequent to a Termination of Employment
 
(a)              General Rule .  Except to the extent otherwise provided in paragraphs (b), (c), (d), (e) or (f) of this Section 2.4 or Section 3.5(b)(iii), a grantee who incurs a termination of employment or consultancy/service relationship or dismissal from the Board may exercise any outstanding option or stock appreciation right on the following terms and conditions: (i) exercise may be made only to the extent that the grantee was entitled to exercise the Award on the date of termination of employment or consultancy/service relationship or dismissal from the Board, as applicable; and (ii) exercise must occur within three months after termination of employment or consultancy/service relationship or dismissal from the Board but in no event after the original expiration date of the Award.
 
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(b)              Dismissal "for Cause" .  If a grantee incurs a termination of employment or consultancy/service relationship or dismissal from the Board "for Cause", all options and stock appreciation rights not theretofore exercised shall immediately terminate upon the grantee's termination of employment or consultancy/service relationship or dismissal from the Board.
 
(c)              Retirement .  If a grantee incurs a termination of employment or consultancy/service relationship or dismissal from the Board as the result of his or her Retirement, then any outstanding option or stock appreciation right shall, to the extent exercisable at the time of such Retirement, remain exercisable for a period of three years after such Retirement; provided that in no event may such option or stock appreciation right be exercised following the original expiration date of the Award.
 
(d)              Disability .  If a grantee incurs a termination of employment or consultancy/service relationship or a dismissal from the Board by reason of a Disability, then any outstanding option or stock appreciation right shall, to the extent exercisable at the time of such termination or dismissal, remain exercisable for a period of one year after such termination or dismissal; provided that in no event may such option or stock appreciation right be exercised following the original expiration date of the Award.
 
(e)              Death .
 
(i)      Termination of Employment as a Result of Grantee's Death .  If a grantee incurs a termination of employment or consultancy/service relationship or leaves the Board as the result of his or her death, then any outstanding option or stock appreciation right shall, to the extent exercisable at the time of such death, remain exercisable for a period of one year after such death; provided that in no event may such option or stock appreciation right be exercised following the original expiration date of the Award.
 
(ii)     Restrictions on Exercise Following Death .  Any such exercise of an Award following a grantee's death shall be made only by the grantee's executor or administrator or other duly appointed representative reasonably acceptable to the Administrator, unless the grantee's will specifically disposes of such Award, in which case such exercise shall be made only by the recipient of such specific disposition.  If a grantee's personal representative or the recipient of a specific disposition under the grantee's will shall be entitled to exercise any Award pursuant to the preceding sentence, such representative or recipient shall be bound by all the terms and conditions of the Plan and the applicable Award Agreement which would have applied to the grantee.
 
(f)              Administrator Discretion .  The Administrator may, in writing, waive or modify the application of the foregoing provisions of this Section 2.4.
 
2.5.              Transferability of Options and Stock Appreciation Rights
 
Except as otherwise specifically provided in this Plan or the applicable Award Agreement evidencing an option or stock appreciation right, during the lifetime of a grantee, each such Award granted to a grantee shall be exercisable only by the grantee, and no such Award may be sold, assigned, transferred, pledged or otherwise encumbered or disposed of other than by will or by the laws of descent and distribution.  The Administrator may, in any applicable Award Agreement evidencing an option or stock appreciation right, permit a grantee to transfer all or some of the options or stock appreciation rights to (a) the grantee's spouse, children or grandchildren ("Immediate Family Members"), (b) a trust or trusts for the exclusive benefit of such Immediate Family Members or (c) other parties approved by the Administrator.  Following any such transfer, any transferred options and stock appreciation rights shall continue to be subject to the same terms and conditions as were applicable immediately prior to the transfer.
 
2.6.              Grant of Restricted Stock
 
(a)              Restricted Stock Grants .  The Administrator may grant restricted shares of Common Stock to such Key Persons, in such amounts and subject to such vesting and forfeiture provisions and other terms and conditions as the Administrator shall determine, subject to the provisions of the Plan.  A grantee of a restricted stock Award shall have no rights with respect to such Award unless such grantee accepts the Award within such period as the Administrator shall specify by accepting delivery of a restricted stock Award Agreement in such form as the Administrator shall determine and, in the event the restricted shares are newly issued by the Company, makes payment to the Company or its Exchange Agent by certified or official bank check (or the equivalent thereof acceptable to the Administrator) in an amount at least equal to the par value of the shares covered by the Award (which payment may be waived at the time of grant of the restricted stock Award to the extent the restricted shares granted hereunder are otherwise deemed to be fully paid and non-assessable).
 
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(b)              Issuance of Stock Certificate .  Promptly after a grantee accepts a restricted stock Award in accordance with Section 2.6(a), subject to Sections 3.2, 3.4 and 3.13, the Company or its Exchange Agent shall issue to the grantee a stock certificate or stock certificates for the shares of Common Stock covered by the Award or shall establish an account evidencing ownership of the stock in uncertificated form.  Upon the issuance of such stock certificates, or establishment of such account, the grantee shall have the rights of a stockholder with respect to the restricted stock, subject to: (i) the nontransferability restrictions and forfeiture provisions described in the Plan (including paragraphs (d) and (e) of this Section 2.6); (ii) in the Administrator's sole discretion, a requirement, as set forth in the Award Agreement, that any dividends paid on such shares shall be held in escrow and, unless otherwise determined by the Administrator, shall remain forfeitable until all restrictions on such shares have lapsed; and (iii) any other restrictions and conditions contained in the applicable Award Agreement.
 
(c)              Custody of Stock Certificate .  Unless the Administrator shall otherwise determine, any stock certificates issued evidencing shares of restricted stock shall remain in the possession of the Company until such shares are free of any restrictions specified in the applicable Award Agreement.  The Administrator may direct that such stock certificates bear a legend setting forth the applicable restrictions on transferability.
 
(d)              Nontransferability .  Except as otherwise specifically provided in this Plan or the applicable Award Agreement evidencing a restricted stock Award, shares of restricted stock granted under the Plan may not be sold, assigned, transferred, pledged or otherwise encumbered or disposed of prior to the lapsing of all restrictions thereon.  The Administrator at the time of grant shall specify the date or dates (which may depend upon or be related to the attainment of performance goals and other conditions) on which the nontransferability of the restricted stock shall lapse.  The Administrator may, in any applicable Award Agreement evidencing a restricted stock Award, permit a grantee to transfer all or some of the shares of restricted stock prior to the lapsing of all restrictions thereon to (i) the grantee's Immediate Family Members, (ii) a trust or trusts for the exclusive benefit of such Immediate Family Members or (iii) other parties approved by the Administrator.  Following any permitted transfer prior to the lapsing of all restrictions on the restricted stock, any transferred shares of restricted stock shall continue to be subject to the same terms and conditions as were applicable immediately prior to the transfer.
 
(e)              Consequence of Termination of Employment .  Unless otherwise set forth in the applicable Award Agreement, (i) a grantee's termination of employment or consultancy/service relationship or dismissal from the Board for any reason other than death, Disability or Retirement shall cause the immediate forfeiture of all shares of restricted stock that have not yet vested as of the date of such termination of employment or consultancy/service relationship or dismissal from the Board and (ii) if a grantee incurs a termination of employment or consultancy/service relationship or dismissal from the Board as the result of his or her death, Disability or Retirement, all shares of restricted stock that have not yet vested as of the date of such termination or departure from the Board shall immediately vest as of such date.  Unless otherwise determined by the Administrator, all dividends paid on shares forfeited under this Section 2.6(e) that have not theretofore been directly remitted to the grantee shall also be forfeited, whether by termination of any escrow arrangement under which such dividends are held or otherwise.  The Administrator may, in writing, waive or modify the application of the foregoing provisions of this Section 2.6(e).
 
2.7.              Grant of Restricted Stock Units
 
(a)              Restricted Stock Unit Grants .  The Administrator may grant restricted stock units to such Key Persons, and in such amounts and subject to such vesting and forfeiture provisions and other terms and conditions, as the Administrator shall determine, subject to the provisions of the Plan.  A restricted stock unit granted under the Plan shall confer upon the grantee a right to receive from the Company, conditioned upon the occurrence of such vesting event as shall be determined by the Administrator and specified in the Award Agreement, the number of such grantee's restricted stock units that vest upon the occurrence of such vesting event multiplied by the Fair Market Value of a share of Common Stock on the date of vesting.  Payment upon vesting of a restricted stock unit shall be in cash or in shares of Common Stock (valued at their Fair Market Value on the date of vesting) or both, all as the Administrator shall determine, and such payments shall be made to the grantee at such time as provided in the Award Agreement, which the Administrator shall intend to be (i) if Section 409A of the Code is applicable to the grantee, within the period required by Section 409A such that it qualifies as a "short-term deferral" pursuant to Section 409A and the Treasury Regulations issued thereunder, unless the Administrator shall provide for deferral of the Award intended to comply with Section 409A, (ii) if Section 457A of the Code is applicable to the grantee, within the period required by Section 457A(d)(3)(B) such that it qualifies for the exemption thereunder, or (iii) if Sections 409A and 457A of the Code are not applicable to the grantee, at such time as determined by the Administrator.
 
(b)              Dividend Equivalents .  The Administrator may include in any Award Agreement with respect to a restricted stock unit a dividend equivalent right entitling the grantee to receive amounts equal to the ordinary dividends that would be paid, during the time such Award is outstanding and unvested, on the shares of Common Stock underlying such Award if such shares were then outstanding.  In the event such a provision is included in a Award Agreement, the Administrator shall determine whether such payments shall be (i) paid to the holder of the Award, as specified in the Award Agreement, either (A) at the same time as the underlying dividends are paid, regardless of the fact that the restricted stock unit has not theretofore vested, or (B) at the time at which the Award's vesting event occurs, conditioned upon the occurrence of the vesting event, (ii) made in cash, shares of Common Stock or other property and (iii) subject to such other vesting and forfeiture provisions and other terms and conditions as the Administrator shall deem appropriate and as shall be set forth in the Award Agreement.
 
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(c)              Consequence of Termination of Employment .  Unless otherwise set forth in the applicable Award Agreement, (i) a grantee's termination of employment or consultancy/service relationship or dismissal from the Board for any reason other than death, Disability or Retirement shall cause the immediate forfeiture of all restricted stock units that have not yet vested as of the date of such termination of employment or consultancy/service relationship or dismissal from the Board and (ii) if a grantee incurs a termination of employment or consultancy/service relationship or dismissal from the Board as the result of his or her death, Disability or Retirement, all restricted stock units that have not yet vested as of the date of such termination or departure from the Board shall immediately vest as of such date.  Unless otherwise determined by the Administrator, any dividend equivalent rights on any restricted stock units forfeited under this Section 2.7(c) that have not theretofore been directly remitted to the grantee shall also be forfeited, whether by termination of any escrow arrangement under which such dividends are held or otherwise.  The Administrator may, in writing, waive or modify the application of the foregoing provisions of this Section 2.7(c).
 
(d)              No Stockholder Rights .  No grantee of a restricted stock unit shall have any of the rights of a stockholder of the Company with respect to such Award unless and until a stock certificate is issued with respect to such Award upon the vesting of such Award (it being understood that the Administrator shall determine whether to pay any vested restricted stock unit in the form of cash or Company shares or both), which issuance shall be subject to Sections 3.2, 3.4 and 3.13.  Except as otherwise provided in Section 1.5(c), no adjustment to any restricted stock unit shall be made for dividends, distributions or other rights (whether ordinary or extraordinary, and whether in cash, securities or other property) for which the record date is prior to the date such stock certificate, if any, is issued.
 
(e)              Transferability of Restricted Stock Units .  Except as otherwise provided in an applicable Award Agreement evidencing a restricted stock unit, no restricted stock unit granted under the Plan shall be assignable or transferable.  The Administrator may, in any applicable Award Agreement evidencing a restricted stock unit, permit a grantee to transfer all or some of the restricted stock units to (i) the grantee's Immediate Family Members, (ii) a trust or trusts for the exclusive benefit of such Immediate Family Members or (iii) other parties approved by the Administrator.  Following any such transfer, any transferred restricted stock units shall continue to be subject to the same terms and conditions as were applicable immediately prior to the transfer.
 
2.8.              Grant of Unrestricted Stock
 
The Administrator may grant (or sell at a purchase price at least equal to par value) shares of Common Stock free of restrictions under the Plan to such Key Persons and in such amounts and subject to such forfeiture provisions as the Administrator shall determine.  Shares may be thus granted or sold in respect of past services or other valid consideration.
 
 
ARTICLE III.
Miscellaneous
 
3.1.              Amendment of the Plan; Modification of Awards
 
(a)              Amendment of the Plan .  The Board may from time to time suspend, discontinue, revise or amend the Plan in any respect whatsoever, except that no such amendment shall materially impair any rights or materially increase any obligations under any Award theretofore made under the Plan without the consent of the grantee (or, upon the grantee's death, the Person having the right to exercise the Award).  For purposes of this Section 3.1, any action of the Board or the Administrator that in any way alters or affects the tax treatment of any Award shall not be considered to materially impair any rights of any grantee.
 
(b)              Stockholder Approval Requirement .  If (1) required by applicable rules or regulations of a national securities exchange or the SEC, the Company shall obtain stockholder approval with respect to any amendment to the Plan that (i) expands the types of Awards available under the Plan, (ii) materially increases the aggregate number of shares which may be issued under the Plan, except as permitted pursuant to Section 1.5(c), (iii) materially increases the benefits to participants under the Plan, including any material change to (A) permit, or that has the effect of, a Repricing of any outstanding Award, (B) reduce the price at which shares or options to purchase shares may be offered or (C) extend the duration of the Plan, or (iv) materially expands the class of Persons eligible to receive Awards under the Plan, or (2) the Administrator determines that it desires to retain the ability to grant incentive stock options under the Plan thereafter, the Company shall obtain stockholder approval with respect to any amendment to the Plan that (i) increases the number of shares that may be issued under the Plan or the individual limit set forth under Section 1.5(d) of the Plan (except, in each case, as permitted pursuant to Section 1.5(c)) or (ii) expands the class of Persons eligible to receive incentive stock options under the Plan.
 
(c)              Modification of Awards .  The Administrator may cancel any Award under the Plan.  The Administrator also may amend any outstanding Award Agreement, including, without limitation, by amendment which would: (i) accelerate the time or times at which the Award becomes unrestricted, vested or may be exercised; (ii) waive or amend any goals, restrictions or conditions set forth in the Award Agreement; or (iii) waive or amend the operation of Sections 2.4, 2.6(e) or 2.7(c) with respect to the termination of the Award upon termination of employment or consultancy/service relationship or dismissal from the Board; provided , however , that no such amendment shall be made without shareholder approval if such approval is necessary to comply with any tax or regulatory requirement applicable to the Award.  However, any such cancellation or amendment (other than an amendment pursuant to Section 1.5, 3.5 or 3.16) that materially impairs the rights or materially increases the obligations of a grantee under an outstanding Award shall be made only with the consent of the grantee (or, upon the grantee's death, the Person having the right to exercise the Award).  In making any modification to an Award ( e.g. , an amendment resulting in a direct or indirect reduction in the Exercise Price or a waiver or modification under Section 2.4(f), 2.6(e) or 2.7(c)), the Administrator may consider the implications, if any, of such modification under the Code with respect to incentive stock options granted under the Plan and/or Sections 409A and 457A of the Code with respect to Awards granted under the Plan to individuals subject to such provisions of the Code.
 
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3.2.              Consent Requirement
 
(a)              No Plan Action Without Required Consent .  If the Administrator shall at any time determine that any Consent (as defined below) is necessary or desirable as a condition of, or in connection with, the granting of any Award under the Plan, the issuance or purchase of shares or other rights thereunder, or the taking of any other action thereunder (each such action being hereinafter referred to as a "Plan Action"), then such Plan Action shall not be taken, in whole or in part, unless and until such Consent shall have been effected or obtained to the full satisfaction of the Administrator.
 
(b)              Consent Defined .  The term "Consent" as used herein with respect to any Plan Action means (i) any and all listings, registrations or qualifications in respect thereof upon any securities exchange or under any federal, state or local law, rule or regulation, (ii) any and all written agreements and representations by the grantee with respect to the disposition of shares, or with respect to any other matter, which the Administrator shall deem necessary or desirable to comply with the terms of any such listing, registration or qualification or to obtain an exemption from the requirement that any such listing, qualification or registration be made and (iii) any and all consents, clearances and approvals in respect of a Plan Action by any governmental or other regulatory bodies.
 
3.3.              Nonassignability
 
Except as provided in Sections 2.4(e), 2.5, 2.6(d) or 2.7(e),   (a) no Award or right granted to any Person under the Plan or under any Award Agreement shall be assignable or transferable other than by will or by the laws of descent and distribution and (b) all rights granted under the Plan or any Award Agreement shall be exercisable during the life of the grantee only by the grantee or the grantee's legal representative or the grantee's permissible successors or assigns (as authorized and determined by the Administrator).  All terms and conditions of the Plan and the applicable Award Agreements will be binding upon any permitted successors or assigns.
 
3.4.              Taxes
 
(a)              Withholding .  A grantee or other Award holder under the Plan shall be required to pay, in cash, to the Company, and the Company and its Affiliates shall have the right and are hereby authorized to withhold from any Award, from any payment due or transfer made under any Award or under the Plan or from any compensation or other amount owing to such grantee or other Award holder, the amount of any applicable withholding taxes in respect of an Award, its grant, its exercise, its vesting, or any payment or transfer under an Award or under the Plan, and to take such other action as may be necessary in the opinion of the Company to satisfy all obligations for payment of such taxes.  Whenever shares of Common Stock are to be delivered pursuant to an Award under the Plan, with the approval of the Administrator, which the Administrator shall have sole discretion whether or not to give, the grantee may satisfy the foregoing condition by electing to have the Company withhold from delivery shares having a value equal to the amount of minimum tax required to be withheld.  Such shares shall be valued at their Fair Market Value as of the date on which the amount of tax to be withheld is determined.  Fractional share amounts shall be settled in cash.  Such a withholding election may be made with respect to all or any portion of the shares to be delivered pursuant to an Award as may be approved by the Administrator in its sole discretion.
 
(b)              Liability for Taxes .  Grantees and holders of Awards are solely responsible and liable for the satisfaction of all taxes and penalties that may arise in connection with Awards (including, without limitation, any taxes arising under Sections 409A and 457A of the Code) and the Company shall not have any obligation to indemnify or otherwise hold any such Person harmless from any or all of such taxes.  The Administrator shall have the discretion to organize any deferral program, to require deferral election forms, and to grant or, notwithstanding anything to the contrary in the Plan or any Award Agreement, to unilaterally modify any Award in a manner that (i) conforms with the requirements of Sections 409A and 457A of the Code (to the extent applicable), (ii) voids any participant election to the extent it would violate Sections 409A or 457A of the Code (to the extent applicable) and (iii) for any distribution event or election that could be expected to violate Section 409A of the Code, make the distribution only upon the earliest of the first to occur of a "permissible distribution event" within the meaning of Section 409A of the Code or a distribution event that the participant elects in accordance with Section 409A of the Code.  The Administrator shall have the sole discretion to interpret the requirements of the Code, including, without limitation, Sections 409A and 457A, for purposes of the Plan and all Awards.
 
3.5.              Change in Control
 
(a)              Change in Control Defined .  Unless otherwise set forth in the applicable Award Agreement, for purposes of the Plan, "Change in Control" shall mean the occurrence of any of the following:
 
(i)      any "person" (as defined in Section 13(d)(3) of the 1934 Act), company or other entity (other than (A) the Company, (B) any trustee or other fiduciary holding securities under an employee benefit plan of the Company or an Affiliate, (C) any company or other entity owned, directly or indirectly, by the holders of the voting stock of the Company in substantially the same proportions as their ownership of the aggregate voting power of the capital stock ordinarily entitled to elect directors of the Company or (D) United Capital Investments Corp., Atrion Shipholding S.A., Comet Shipholding Inc., Plaza Shipholding Corp., Bella Restis, Claudia Restis, Katia Restis or Victor Restis, or any entity which United Capital Investments Corp., Atrion Shipholding S.A., Comet Shipholding Inc., Plaza Shipholding Corp., Bella Restis, Claudia Restis, Katia Restis or Victor Restis directly or indirectly "controls" (as defined in Rule 12b-2 under the 1934 Act)) acquires "beneficial ownership" (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of more than 50% of the aggregate voting power of the capital stock ordinarily entitled to elect directors of the Company;
 
(ii)      the sale of all or substantially all the Company's assets in one or more related transactions to any "person" (as defined in Section 13(d)(3) of the 1934 Act), company or other entity, other than such a sale (A) to a Subsidiary which does not involve a material change in the equity holdings of the Company, (B) to an entity which has acquired all or substantially all the Company's assets or (C) to United Capital Investments Corp., Atrion Shipholding S.A., Comet Shipholding Inc., Plaza Shipholding Corp., Bella Restis, Claudia Restis, Katia Restis or Victor Restis or any entity which United Capital Investments Corp., Atrion Shipholding S.A., Comet Shipholding Inc., Plaza Shipholding Corp., Bella Restis, Claudia Restis, Katia Restis or Victor Restis directly or indirectly "controls" (as defined in Rule 12b-2 under the 1934 Act) (any such entity described in clause (A), (B) or (C), the "Acquiring Entity") if, immediately following such sale, 50% or more of the aggregate voting power of the capital stock ordinarily entitled to elect directors of the Acquiring Entity (or, if applicable, the ultimate parent entity that directly or indirectly has beneficial ownership of more than 50% of the aggregate voting power of the capital stock ordinarily entitled to elect directors of the Acquiring Entity) is beneficially owned by the holders of the voting stock of the Company, and such voting power among the persons who were holders of the voting stock of the Company immediately prior to such sale is, immediately following such sale, held in substantially the same proportions as the aggregate voting power of the capital stock ordinarily entitled to elect directors of the Company immediately prior to such sale;
 
11
(iii)              any merger, consolidation, reorganization or similar event of the Company or any Subsidiary as a result of which the holders of the voting stock of the Company immediately prior to such merger, consolidation, reorganization or similar event do not directly or indirectly hold 50% or more of the aggregate voting power of the capital stock of the surviving entity ordinarily entitled to elect directors of the surviving entity (or, if applicable, the ultimate parent entity that directly or indirectly has beneficial ownership of more than 50% of the aggregate voting power of the capital stock ordinarily entitled to elect directors of the surviving entity) and such voting power among the persons who were holders of the voting stock of the Company immediately prior to such sale is, immediately following such sale, held in substantially the same proportions as the aggregate voting power of the capital stock ordinarily entitled to elect directors of the Company immediately prior to such sale;
 
(iv)              the approval by the Company's stockholders of a plan of complete liquidation or dissolution of the Company; or
 
(v)              during any period of 12 consecutive calendar months, individuals:
 
(A) who were directors of the Company on the first day of such period, or
 
(B) whose election or nomination for election to the Board was recommended or approved by at least a majority of the directors then still in office who were directors of the Company on the first day of such period, or whose election or nomination for election were so approved,
 
shall cease to constitute a majority of the Board.
 
Notwithstanding the foregoing, unless otherwise set forth in the applicable Award Agreement, for each Award subject to Section 409A of the Code, a Change in Control shall be deemed to have occurred under this Plan with respect to such Award only if a change in the ownership or effective control of the Company or a change in the ownership of a substantial portion of the assets of the Company shall also be deemed to have occurred under Section 409A of the Code, provided that such limitation shall apply to such Award only to the extent necessary to avoid adverse tax effects under Section 409A of the Code.
 
(b)              Effect of a Change in Control .  Unless the Administrator provides otherwise in an Award Agreement, upon the occurrence of a Change in Control:
 
(i)  notwithstanding any other provision of this Plan, any Award then outstanding shall become fully vested and any restriction and forfeiture provisions thereon imposed pursuant to the Plan and the Award Agreement shall lapse and any Award in the form of an option or stock appreciation right shall be immediately exercisable;
 
(ii)  to the extent permitted by law and not otherwise limited by the terms of the Plan, the Administrator may amend any Award Agreement in such manner as it deems appropriate;
 
(iii)  a grantee who incurs a termination of employment or consultancy/service relationship or dismissal from the Board for any reason, other than a termination or dismissal "for Cause", concurrent with or within one year following the Change in Control may exercise any outstanding option or stock appreciation right, but only to the extent that the grantee was entitled to exercise the Award on the date of his or her termination of employment or consultancy/service relationship or dismissal from the Board, until the earlier of (A) the original expiration date of the Award and (B) the later of (x) the date provided for under the terms of Section 2.4 without reference to this Section 3.5(b)(iii) and (y) the first anniversary of the grantee's termination of employment or consultancy/service relationship or dismissal from the Board.
 
(c)              Miscellaneous .  Whenever deemed appropriate by the Administrator, any action referred to in paragraph (b)(ii) of this Section 3.5 may be made conditional upon the consummation of the applicable Change in Control transaction.  For purposes of the Plan and any Award Agreement granted hereunder, the term "Company" shall include any successor to Seanergy Maritime Holdings Corporation .
 
12
3.6.              Operation and Conduct of Business
 
Nothing in the Plan or any Award Agreement shall be construed as limiting or preventing the Company or any Affiliate from taking any action with respect to the operation and conduct of their business that they deem appropriate or in their best interests, including any or all adjustments, recapitalizations, reorganizations, exchanges or other changes in the capital structure of the Company or any Affiliate, any merger or consolidation of the Company or any Affiliate, any issuance of Company shares or other securities or subscription rights, any issuance of bonds, debentures, preferred or prior preference stock ahead of or affecting the Common Stock or other securities or rights thereof, any dissolution or liquidation of the Company or any Affiliate, any sale or transfer of all or any part of the assets or business of the Company or any Affiliate, or any other corporate act or proceeding, whether of a similar character or otherwise.
 
3.7.              No Rights to Awards
 
No Key Person or other Person shall have any claim to be granted any Award under the Plan.
 
3.8.              Right of Discharge Reserved
 
Nothing in the Plan or in any Award Agreement shall confer upon any grantee the right to continue his or her employment with the Company or any Affiliate, his or her consultancy/service relationship with the Company or any Affiliate, or his or her position as a director of the Company or any Affiliate, or affect any right that the Company or any Affiliate may have to terminate such employment or consultancy/service relationship or service as a director.
 
3.9.              Non-Uniform Determinations
 
The Administrator's determinations and the treatment of Key Persons and grantees and their beneficiaries under the Plan need not be uniform and may be made and determined by the Administrator selectively among Persons who receive, or who are eligible to receive, Awards under the Plan (whether or not such Persons are similarly situated).  Without limiting the generality of the foregoing, the Administrator shall be entitled, among other things, to make non-uniform and selective determinations, and to enter into non-uniform and selective Award Agreements, as to (a) the Persons to receive Awards under the Plan, (b) the types of Awards granted under the Plan, (c) the number of shares to be covered by, or with respect to which payments, rights or other matters are to be calculated with respect to, Awards and (d) the terms and conditions of Awards.
 
3.10.              Other Payments or Awards
 
Nothing contained in the Plan shall be deemed in any way to limit or restrict the Company from making any award or payment to any Person under any other plan, arrangement or understanding, whether now existing or hereafter in effect.
 
3.11.              Headings
 
Any section, subsection, paragraph or other subdivision headings contained herein are for the purpose of convenience only and are not intended to expand, limit or otherwise define the contents of such subdivisions.
 
3.12.              Effective Date and Term of Plan
 
(a)              Adoption; Stockholder Approval .  The Plan was adopted by the Board on             January 12, 2011.  The Board may, but need not, make the granting of any Awards under the Plan subject to the approval of the Company's stockholders.
 
(b)              Termination of Plan .  The Board may terminate the Plan at any time.  All Awards made under the Plan prior to its termination shall remain in effect until such Awards have been satisfied or terminated in accordance with the terms and provisions of the Plan and the applicable Award Agreements.  No Awards may be granted under the Plan following the tenth anniversary of the date on which the Plan was adopted by the Board.
 
 
13
3.13.              Restriction on Issuance of Stock Pursuant to Awards
 
The Company shall not permit any shares of Common Stock to be issued pursuant to Awards granted under the Plan unless such shares of Common Stock are fully paid and non-assessable under applicable law.  Notwithstanding anything to the contrary in the Plan or any Award Agreement, at the time of the exercise of any Award, at the time of vesting of any Award, at the time of payment of shares of Common Stock in exchange for, or in cancellation of, any Award, or at the time of grant of any unrestricted shares under the Plan, the Company and the Administrator may, if either shall deem it necessary or advisable for any reason, require the holder of an Award (a) to represent in writing to the Company that it is the Award holder's then-intention to acquire the shares with respect to which the Award is granted for investment and not with a view to the distribution thereof or (b) to postpone the date of exercise until such time as the Company has available for delivery to the Award holder a prospectus meeting the requirements of all applicable securities laws; and no shares   shall be issued or transferred in connection with any Award unless and until all legal requirements applicable to the issuance or transfer of such shares have been complied with to the satisfaction of the Company and the Administrator.  The Company and the Administrator shall have the right to condition any issuance of shares to any Award holder hereunder on such Person's undertaking in writing to comply with such restrictions on the subsequent transfer of such shares as the Company or the Administrator shall deem necessary or advisable as a result of any applicable law, regulation or official interpretation thereof, and all share certificates delivered under the Plan shall be subject to such stop transfer orders and other restrictions as the Company or the Administrator may deem advisable under the Plan, the applicable Award Agreement or the rules, regulations and other requirements of the SEC, any stock exchange upon which such shares are listed, and any applicable securities or other laws, and certificates representing such shares may contain a legend to reflect any such restrictions.  The Administrator may refuse to issue or transfer any shares or other consideration under an Award if it determines that the issuance or transfer of such shares or other consideration might violate any applicable law or regulation or entitle the Company to recover the same under Section 16(b) of the 1934 Act, and any payment tendered to the Company by a grantee or other Award holder in connection with the exercise of such Award shall be promptly refunded to the relevant grantee or other Award holder.  Without limiting the generality of the foregoing, no Award granted under the Plan shall be construed as an offer to sell securities of the Company, and no such offer shall be outstanding, unless and until the Administrator has determined that any such offer, if made, would be in compliance with all applicable requirements of any applicable securities laws.
 
3.14.              Requirement of Notification of Election Under Section 83(b) of the Code or Upon Disqualifying Disposition Under Section 421(b) of the Code
 
(a)              Notification of Election Under Section 83(b) of the Code .  If an Award recipient, in connection with the acquisition of Company shares under the Plan, makes an election under Section 83(b) of the Code (to include in gross income in the year of transfer the amounts specified in Section 83(b) of the Code), the grantee shall notify the Administrator of such election within ten days of filing notice of the election with the U.S. Internal Revenue Service, in addition to any filing and notification required pursuant to regulations issued under Section 83(b) of the Code.
 
(b)              Notification of Disqualifying Disposition of Incentive Stock Options .  If an Award recipient shall make any disposition of Company shares delivered pursuant to the exercise of an incentive stock option under the circumstances described in Section 421(b) of the Code (relating to certain disqualifying dispositions) or any successor provision of the Code, the grantee shall notify the Company of such disposition within ten days thereof.
 
3.15.              Severability
 
If any provision of the Plan or any Award is or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to any Person or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Administrator, such provision shall be construed or deemed amended to conform to the applicable laws or, if it cannot be construed or deemed amended without, in the determination of the Administrator, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, Person or Award and the remainder of the Plan and any such Award shall remain in full force and effect.
 
3.16.              Sections 409A and 457A
 
To the extent applicable, the Plan and Award Agreements shall be interpreted in accordance with Sections 409A and 457A of the Code and Department of Treasury regulations and other interpretive guidance issued thereunder.  Notwithstanding any provision of the Plan or any applicable Award Agreement to the contrary, in the event that the Administrator determines that any Award may be subject to Section 409A or 457A of the Code, the Administrator may adopt such amendments to the Plan and the applicable Award Agreement or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Administrator determines are necessary or appropriate to (i) exempt the Plan and Award from Sections 409A and 457A of the Code and/or preserve the intended tax treatment of the benefits provided with respect to the Award, or (ii) comply with the requirements of Sections 409A and 457A of the Code and related Department of Treasury guidance and thereby avoid the application of penalty taxes under Sections 409A and 457A of the Code.
 
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3.17.              Forfeiture; Clawback
 
The Administrator may, in its sole discretion, specify in the applicable Award Agreement that any realized gain with respect to options or stock appreciation rights and any realized value with respect to other Awards shall be subject to forfeiture or clawback, in the event of (a) a grantee's breach of any non-competition, non-solicitation, confidentiality or other restrictive covenants with respect to the Company or any Affiliate or (ii) a financial restatement that reduces the amount of bonus or incentive compensation previously awarded to a grantee that would have been earned had results been properly reported.
 
3.18.              No Trust or Fund Created
 
Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company or any Affiliate and an Award recipient or any other Person.  To the extent that any Person acquires a right to receive payments from the Company or any Affiliate pursuant to an Award, such right shall be no greater than the right of any unsecured general creditor of the Company or its Affiliate.
 
3.19.              No Fractional Shares
 
No fractional shares shall be issued or delivered pursuant to the Plan or any Award, and the Administrator shall determine whether cash, other securities, or other property shall be paid or transferred in lieu of any fractional shares or whether such fractional shares or any rights thereto shall be canceled, terminated, or otherwise eliminated.
 
3.20.              Governing Law
 
The Plan will be construed and administered in accordance with the laws of the State of New York, without giving effect to principles of conflict of laws.
 
15
Exhibit 4.8
 
 

MEMORANDUM OF AGREEMENT
Norwegian Shipbrokers' Association's
Memorandum of Agreement for sale and purchase
of ships. Adopted by The Baltic and International
Maritime Council (BIMCO) in 1956.
Code-name
SALEFORM 1993
Revised 1966, 1983 and 1986/87.


Dated: 23 December 2014

Dampskibsselkabet NORDEN A/S, 52 Strandvejen, DK-2900 Hellerup, Denmark hereinafter called the Sellers, have agreed to sell, and Seanergy Maritime Holdings Corp., of the Marshall Islands or fully guaranteed nominee to be nominated by an Addendum to this Agreement to be signed by the Sellers and the Buyers
1

hereinafter called the Buyers, have agreed to buy the
2

Name: M/V Nordstramp
3

Classification Society/Class:
DnV-GL
4
Built:   2001
By: Koyo Dockyard Co., Ltd., Japan
5
Flag: Danish
Place of Registration:   Copenhagen
6
Call sign: OVRF2
Grt/Nrt: 85379/56701
7
Register IMO Number: 9233923
8
hereinafter called the Vessel, on the following terms and conditions:
9
Definitions
10

" Banking days " are days on which banks are open in the country of the currency
11
Stipulated for the Purchase Price in Clause 1 , and in the place of closing stipulated in Clause 8, in the country of the Vessel's flag ,   Greece, Norway, USA and the UK .
12

" in writing " or " written " means a letter handed over from the Sellers to the Buyers or vice versa,
13
a registered letter, telefax or other modern form of written communication .
14

" Classification Society " or " Class " means the Society referred to in line 4.
 
15
1.
Purchase Price:
USD 17,300,000 (United States Dollars Seventeen Million Three Hundred Thousand only) in cash including 2pct total commissions.
16

2.              Deposit
17

As security for the correct fulfilment of this Agreement  the  Buyers shall pay a deposit of 1 0 %
18
(ten per cent) of the Purchase Price within   3 (three)   banking days from the date of fax/email signing of this
19
Agreement. and lifting of Sellers and Buyers subject as per clause 17 and the deposit holder has confirmed in writing to the parties that the account has been opened.  This deposit shall be placed with Nordea Bank, Denmark A/S, Copenhagen Head Office.
20
and   held  by them in a joint  account  for the  Sellers  and  the  Buyers, to be released in accordance
21
with joint written instructions of the  Sellers  and   the  Buyers.  Interest, if any, to  be  credited to  the
22
Buyers. Any fee charged  for holding  the said deposit  shall  be  borne  equally  by  the  Sellers  and  the
23
Buyers.
24

3.              Payment
25

The balance 90 % (ninety percent) of the said Purchase Price   shall be paid in full free of bank charges to Sellers' account at Nordea Bank, Denmark A/S, Copenhagen Head Office.  (Sellers to advise full account details within 2 days from signing this Agreement.
26


on delivery of the Vessel, but not later than 3 (three) Banking days after the Vessel is in every respect
27
physically ready for delivery in accordance with the terms and conditions of this Agreement and
28
Notice of Readiness "NOR" has been given in accordance with Clause 5.
 
29

4              Inspections
30

a)*
The Buyers have inspected and accepted the Vessel's classification records. The Buyers
31
 
have also inspected the Vessel at / in   Kaohsiung, Taiwan on   Friday, December 5 th 2014
32
 
and have accepted the Vessel following this inspection and   the sale is outright and definite,
33
 
subject only to the terms and conditions of this Agreement.
34

b)*
The  Buyers  have inspected the Vessel's DNV Class records and have accepted same at the time of inspection under Clause 4a). shall   have  the right  to   inspect  the  Vessel's     classification  records   and   declare
35
 
whether same are accepted  or  not   within
36

The Sellers shall provide for   inspections of the Vessel at/in
37

The  Buyers  shall  undertake  the  inspection   without  undue  delay  to  the  Vessel.   Should  the
38
Buyers  cause  undue  delay  they  shall  compensate  the  Sellers  for the losses thereby incurred.
39
The  Buyers  shall  inspect  the  Vessel without opening up   and without    cost  to  the  Sellers
40
During  the  inspection,  the  Vessel's  deck  and  engine  log  books  shall  be  made  available for
41
examination  by  the  Buyers. If the  Vessel  is  accepted  after  such  inspection,  the  sale shall
42
become outright and definite, subject  only  to  the  terms  and  conditions  of  this  Agreement,
43
provided the  Sellers receive   written notice  of  acceptance  from  the  Buyers  within  72 hours
44
after  completion  of  such  inspection.
45
Should  notice  of  acceptance  of   the  Vessel's classification  records  and  of  the Vessel not be
46
received  by  the  Sellers  as  aforesaid, the deposit together  with   interest earned   shall  be
47
released  immediately to the  Buyers, whereafter  this  Agreement shall be   null and void.
48

*
4 a) and 4b) are alternatives; delete whichever is not applicable. In the absence of deletions,
49
 
alternative 4a) to apply.
50

5.              Notices, time and place of delivery
51

a)
The Sellers shall keep the Buyers well informed of the Vessel's itinerary   and shall
52
 
provide the Buyers with 30 / 20 / 15 / 13 /10 / 7 / 5 / 3   approximate             , and 2 and 1 definite days notice s of the estimated time and place of arrival at the
53
 
intended place of drydocking/underwater inspection/ delivery. When the Vessel is at the place
54
 
of delivery and in every respect physically ready for delivery in accordance with this
55
 
Agreement, the Sellers shall give the Buyers a written Notice of Readiness for delivery.
 
56
b)
The Vessel shall be delivered and taken over safely afloat at a safe and accessible berth or
57
 
anchorage at/ in Singapore-China range .
58
     
 
In the Sellers' option.
59
     
 
Expected time of delivery:  15 February 2015 – 15 April 2015
60
     
 
Date of cancelling (see Clauses 5 c), 6 b) (iii) and 14): 15 April 2015 at Buyers' option.
61

c)
If the Sellers anticipate that, notwithstanding the exercise of due diligence by them, the
62
 
Vessel will not be ready for delivery by the cancelling date they may notify the Buyers in
63
 
writing stating the date when they anticipate that the Vessel will be ready for delivery and
64
 
propose a new cancelling date. Upon receipt of such notification the Buyers shall have the
65
 
option of either cancelling this Agreement in accordance with Clause 14 within   7   4 running
66
 
days of receipt of the notice or of accepting the new date as the new cancelling date. If the
67
 
Buyers have not declared their option within 7   4 running days of receipt of the Sellers'
68
 
notification or if the Buyers accept the new date, the date proposed in the Sellers' notification
69
 
shall be deemed to be the new cancelling date and shall be substituted for the cancelling
70

 
date stipulated in line 61.
71

 
If this Agreement is maintained with the new cancelling date all other terms and conditions
72
 
hereof including those contained in Clauses 5 a) and 5 c) shall remain unaltered and in full
73
 
force and effect. Cancellation or failure to cancel shall be entirely without prejudice to any
74
 
claim for damages the Buyers may have under Clause 14 for the Vessel not being ready by
75
 
the original cancelling date.
76

d)
Should the Vessel become an actual, constructive or compromised total loss before delivery
77
 
the deposit together  with  interest  earned shall be released immediately to the Buyers
78
 
whereafter this Agreement shall be null and void.
79

6.              Drydocking / Divers Inspection .   See Clause 19
80

a)**
The Sellers shall place the Vessel in drydock at the port of delivery for inspection by the
81
 
Classification Society of the Vessel's underwater parts below the deepest load line, the
82
 
extent of the inspection being in accordance with the Classification Society's rules.  If the
83
 
rudder, propeller, bottom or other underwater parts below the deepest load line are found
84
 
broken, damaged or defective so as to affect the Vessel's class, such defects shall be made
85
 
good at the Sellers' expense to the satisfaction of the Classification Society without
86
 
condition/recommendation*.
87

b)**
(i)              The Vessel is to be delivered without drydocking.  However, the Buyers shall
88
 
have the right at their expense to arrange for an underwater inspection by a diver approved
89
 
by the Classification Society   prior to the delivery of the Vessel.  The Sellers shall at their
90
 
cost make the Vessel available for such inspection. The extent of the inspection and the
91
 
conditions under which it is performed shall be to the satisfaction of the Classification
92
 
Society. If the conditions at the port of delivery are unsuitable for such inspection, the
93
 
Sellers shall make the Vessel available   at a suitable alternative place near to the delivery
94
 
port.
95

 
ii)              If the rudder, propeller, bottom or other underwater parts below the deepest load line
96
 
are found broken, damaged or defective so as to affect the Vessel's class, then unless
97
 
repairs can be carried out afloat to the satisfaction of the Classification Society, the Sellers
98
 
shall arrange for the Vessel to be drydocked at their expense for inspection by the
99
 
Classification Society of the Vessel's underwater parts below the deepest load line, the
100
 
extent of the inspection being in accordance with the Classification Society's rules.  If the
101
 
rudder, propeller, bottom or other underwater parts below the deepest load line are found
102
 
broken, damaged or defective so as to affect the Vessel's class, such defects shall be made
103
 
good by the Sellers at their expense to the satisfaction of the Classification Society
104
 
without condition/recommendation*. In such event the Sellers are to pay also for the cost of
105
 
the underwater inspection and the Classification Society's attendance.
106

 
(iii)              If the Vessel is to be drydocked pursuant to Clause 6 b) (ii) and no suitable dry-
107
 
docking facilities are available at the port of delivery, the Sellers shall take the Vessel
108
 
to a port where suitable drydocking facilities are available, whether within or outside the
109
 
delivery range as per Clause 5 b). Once drydocking has taken place the Sellers shall deliver
110
 
the Vessel at a port within the delivery range as per Clause 5 b) which shall, for the
111
 
purpose of this Clause, become the new port of delivery. In such event the cancelling date
112
 
provided for in Clause 5 b) shall be extended by the additional time required for the
113
 
drydocking and extra steaming, but limited to a maximum of 14 running days.
114

c)
If the Vessel is drydocked pursuant to Clause 6 a) or 6 b) above
115

 
(i)              the Classification Society may require survey of the tailshaft system, the extent of
116
 
the survey being to the satisfaction of the Classification surveyor. If such survey is not
117
 
required by the Classification Society, the Buyers shall have the right to require the tailshaft
118
 
to be drawn and surveyed by the Classification Society, the extent of the survey being in
119
 
accordance with the Classification Society's rules for tailshaft survey and consistent with
120
 
the current stage of the Vessel's survey cycle. The Buyers shall declare whether they
121
 
require the tailshaft to be drawn and surveyed not later than by the completion of the
122
 
inspection by the Classification Society. The drawing and refitting of the tailshaft shall be
123
 
arranged by the Sellers. Should any parts of the tailshaft system be condemned or found
124
 
defective so as to affect the Vessel's class, those parts shall be renewed or made good at
125
 
the Sellers' expense to the satisfaction of the Classification Society without
126
 
condition/recommendation*.
127


 
(ii)              the expenses relating to the survey of the tailshaft system shall be borne
128
 
by the Buyers unless the Classification  Society requires such survey to be carried out, in
129
 
which case the Sellers shall pay these expenses. The Sellers shall also pay the expenses
130
 
if the Buyers require the survey  and  parts of the system are condemned or found defective
131
 
or broken so as to affect the Vessel's class*.
132

 
(iii)              the expenses in connection with putting the Vessel in and taking her out of
133
 
drydock, including the drydock dues and the Classification Society's fees shall be paid by
134
 
the Sellers if the Classification Society issues any condition/recommendation* as a result
135
 
of the survey or if it requires survey of the tailshaft system. In all other cases the Buyers
136
 
shall pay the aforesaid expenses, dues and fees.
137

 
(iv)              the Buyers' representative shall have the right to be present in the drydock, but
138
 
without interfering with the work or decisions of the Classification surveyor.
139

 
(v)              the Buyers shall have the right to have the underwater parts of the Vessel
140
 
cleaned and painted at their risk and expense without interfering with the Sellers' or the
141
 
Classification surveyor's work, if any, and without affecting the Vessel's timely delivery. If,
142
 
however, the Buyers' work in drydock is still in progress when the Sellers have
143
 
completed the work which the Sellers are required to do, the additional docking time
144
 
needed to complete the Buyers' work shall be for the Buyers' risk and expense. In the event
145
 
that the Buyers' work requires such additional time, the Sellers may upon completion of the
146
 
Sellers' work tender Notice of Readiness for delivery whilst the Vessel is still in drydock
147
 
and the Buyers shall be obliged to take delivery in accordance with Clause 3, whether
148
 
the Vessel is in drydock or not and irrespective of Clause 5 b).
149

*
Notes, if any, in the surveyor's report which are accepted by the Classification Society
150
 
without condition/recommendation are not to be taken into account.
151

**
6 a) and 6 b) are alternatives; delete whichever is not applicable. In the absence of deletions,
152
 
alternative 6 a) to apply
153

7.
Spares/bunkers, etc.
154

The Sellers shall deliver the Vessel to the Buyers with everything belonging to her on board and on
155
shore , including broached/unbroached stores and provisions and spares on order without extra payment . All spare parts and spare equipment including spare tail-end shaft(s) and/or spare
156
propeller(s)/propeller blade(s), if any, belonging to the Vessel at the time of inspection used or
157
unused, whether on board or not shall become the Buyers' property but spares on order are to be
158
excluded. Forwarding charges, if any, shall be for the Buyers' account. The Sellers are not required to
159
replace spare parts including spare tail-end shaft(s) and spare propeller(s)/propeller blade(s) which
160
are taken out of spare and used as replacement prior to delivery, but the replaced items shall be the
161
property of the Buyers. The radio installation, GMDSS , ECDIS and navigational equipment shall be included in the sale
162
without extra payment if they are the property of the Sellers. Unused stores and provisions shall be
163
included in the sale and be taken over by the Buyers without extra payment.
164

The Sellers have the right to take ashore crockery, plates, cutlery, linen and other articles bearing the
165
Sellers' flag or name, provided they replace same with similar unmarked items. Library, forms, etc .,
166
exclusively for use in the Sellers' vessel(s), shall be excluded without compensation. Captain's,
167
Officers' and Crew's personal belongings including the slop chest are to be excluded from the sale,
168
as well as the following additional items (including items on hire):
 
The below listed items shall be off landed prior to handling over M/V Nordtramp to buyers
 
1.  Gas bottles. (12 x Ox and 5 x Ac) ex Drew Marine.
 
2.  One Nitrogen Bottle ex Drew Marine
 
3.  One Tool Box from Marco Marine.
 
4.  One box containing spares on exchange all a property of Marco Marine.
 
5. Two boxes connecting Rods from auxiliary engine overhaul.
 
6. One box containing used turbo charger ex engine #2. Sea a. below
 
169



7.  ECDIS dongle
 
8.  One Seagull computer (CBT Training on rent front Seagull of Norway)
 
9.  One Consultas computer.
 
10. Various deck and engine log books, Contingency Plans (VGP and VRP), including but not limit to Danish Publications. See b. below.
 
11. Various software e.g. SMS installed on computers, sea health, Docontrol, Amosconnect, Omega etc. shall be removed as this is licensed to Dampskibsselskabet Norden.
 
12. Scrape down equipement.
 
13. Mobile phone.
 
14. Ship Security Plan.
 
15. Hydro Blaster and spares rented frond Den Ship, Singapore.
 
a.  6 above. The turbo charger is overhaulded with bearings and balanced.
b.  Expired an current Oil Record Books and Garbage Record Books shall remain on hoard.
 
 

The Buyers shall take over the remaining bunkers and unused lubricating oils in storage tanks and
170
sealed drums and pay the current net market  price (excluding  barging  expenses) at the port and date
171
of delivery of the Vessel
172
   
Buyers shall take over the bunkers remaining on board with cost as per Platts prices for Singapore published one (1) Banking day prior to the Vessel's delivery. Buyers shall also take over the remaining unbroached lubricants respectively in sealed drums or in designated storage tanks not having passed to the engines/equipment through Vessel's system at Sellers' net contract prices
excluding barge costs of last supply as evidenced by the relevant copies of invoices. Exact quantities
of remaining bunkers and lubricating oils shall be measured and agreed by and between the Sellers' and the Buyers' representatives latest by one (1) Banking day prior to expected date of delivery of the Vessel.
 
   
Payment under this Clause shall be made at the same time and place and in the same currency as
173
the Purchase Price.
174

8.
Documentation
175

The place of closing: Copenhagen, Denmark at Sellers' nominated bank (Nordea Bank Denmark A/S, Copenhagen Head Office).
176

In exchange for payment of the Purchase Price the Sellers shall furnish the Buyers with delivery
documents namely :  At the closing meeting, in exchange for the purchase money and all other money due under this Agreement by the Buyers to the Sellers, the Sellers shall hand over to the Buyers all delivery documents necessary for legal transfer of title and flag. All delivery documentation, including the documents which will be necessary to cover the legal transfer of ownership and Buyers new flag requirements, to be incorporated in this Agreement in the form of an addendum to be signed by the Sellers and the Buyers.
 
Agreement to said Addendum not to form a subject to the signing of this MOA by Sellers and the Buyers.
177
178

a)
Legal Bill of Sale in a form recordable in           (the country in  which  the Buyers  are
179
 
to register the Vessel),  warranting that  the  Vessel  is  free  from  all  encumbrances,  mortgages
180




 
and  maritime   liens  or  any  other  debts   or  claims  whatsoever,  duly  notarially  attested  and
181
 
legalized by the consul of such country or other competent  authority.
182

b)
Current Certificate of  Ownership  issued  by  the  competent  authorities  of  the  flag  state  of
183
 
the Vessel.
184

c)
Confirmation of Class issued within 72 hours prior to delivery.
185

d)
Current Certificate issued by the competent  authorities  stating  that  the  Vessel  is  free  from
186
 
registered encumbrances
187

e)
Certificate of Deletion of the Vessel from the  Vessel's  registry  or  other  official  evidence  of
188
 
deletion appropriate to the Vessel's registry at the time of delivery, or,  in  the  event  that  the
189
 
registry does not  as  a  matter  of  practice  issue  such  documentation  immediately,  a  written
190
 
undertaking by the Sellers to effect deletion from the Vessel's  registry  forthwith  and  furnish  a
191
 
Certificate or other official evidence of deletion to  the  Buyers  promptly  and  latest  within  4
192
 
(four) weeks after the  Purchase  Price  has  been paid and the  Vessel has been delivered.
193

f)
Any  such  additional  documents  as  may  reasonably  be  required  by  the  competent  authorities
194
 
for  the purpose of  registering  the  Vessel, provided  the   Buyers  notify  the  Sellers  of  any  such
195
 
documents as soon as possible after the date of this Agreement
196

At the time of delivery the Buyers and Sellers shall sign and deliver to each other a Protocol of
197
Delivery and Acceptance confirming the date and time of delivery of the Vessel from the Sellers to the
198
Buyers.
199

At the time of delivery the Sellers shall hand over   to the Buyers the classification certificate(s) as well as all
200
Plans etc., which are on board the Vessel. Other certificates which are on board the Vessel shall also
201
be handed over to the Buyers unless the Sellers are required to retain same, in which case the
202
Buyers to have the right to take copies. Other technical documentation which may
203
be in the Sellers' possession shall be promptly forwarded to the Buyers at their expense, if they so
204
request. The Sellers may keep the Vessels log books but the Buyers to have the right to take
205
copies of same
 
206
9.       Encumbrances
207

The Sellers warrant that the Vessel, at the time of delivery, is free from all charters, encumbrances,
208
mortgages, taxes, levies, duties and maritime liens or any other debts whatsoever and is not subject to port state or administrative detentions . The Sellers hereby undertake
209
to indemnify the Buyers against all consequences of claims made against the Vessel which have
210
been incurred prior to the time of delivery or arising out of or with respect to events occurring prior to the time of delivery .
211

10.      Taxes, etc.
212

Any taxes, fees and expenses in connection with the purchase and registration under the Buyers' flag
213
shall be for the Buyers' account, whereas similar charges in  connection with the closing of the Sellers'
214
register shall be for the Sellers' account.
215

11.      Condition on delivery
216

The Vessel with everything belonging to her shall be at the Sellers' risk and expense until she is
217
delivered to the Buyers, but subject to the terms and conditions of this Agreement she shall be
218
delivered and taken over as she was at the time of inspection, fair wear and tear excepted.
219
However, the Vessel shall be delivered   free of stowaways, free of cargo   with her class maintained
without condition/recommendation*,
220
free of average damage affecting the Vessels class, and with her classification certificates and
221
national/ international/trading certificates and Continuous Survey of Machinery (CSM) – (it is clearly understood that CSM/ESP is part of DNV's Class Certificate and is not a separate document) , as
well as all other certificates of the Vessel had at the time of   inspection, clean , valid and
222
unextended for a minimum period of three (3)   months from the time of the delivery without condition/recommendation* by Class or the relevant authorities at the time of
223
delivery.
224


"Inspection" in this Clause 11, shall mean the Buyers' inspection according to Clause 4 a) or 4 b), if
225
applicable, or the Buyers' inspection prior to the signing of this Agreement. If the Vessel is taken over
226
without inspection, the date of this Agreement shall be the relevant date.
227

*          Notes, if any, in the surveyor's report  which are accepted by the Classification Society
228
            without condition/recommendation are not to be taken into account.
229

12.      Name / markings
230

Upon delivery the Buyers undertake to   change the name of the Vessel and alter funnel markings.
 
231
13.      Buyers' default
232

Should the deposit not be paid in accordance with Clause 2, the Sellers have the right to cancel  this
233
Agreement, and  they shall be entitled to claim  compensation for their losses and for all expenses
234
incurred together with interest.
235
Should the Purchase Price not be paid in accordance with Clause 3, the Sellers have the right to
236
cancel the Agreement, in which case the deposit  together  with interest  earned  shall  be released  to  the
237
Sellers.  If the  deposit  does  not  cover  their  loss,  the Sellers shall be entitled to claim further
238
compensation for their losses and for all expenses incurred together with interest.
239

14.      Sellers' default
240

Should the Sellers fail to give Notice of Readiness in accordance with Clause 5 a) or fail to be ready
241
to validly complete a legal transfer by the date stipulated in line 61 the Buyers shall have
242
the option of cancelling this Agreement provided always that the Sellers shall be granted a
243
maximum of 3 banking days after the Notice of Readiness has been given to make arrangements
244
for the documentation set out in Clause 8 and in the Addendum to this Agreement.   If after Notice of
Readiness has been given out before
245
the Buyers have taken delivery, the Vessel ceases to be physically ready for delivery and is not
246
made physically ready again in every respect by the date stipulated in line 61 and new Notice of
247
Readiness given, the Buyers shall retain their option to cancel. In  the  event  that  the  Buyers  elect
248
to  cancel this Agreement  the deposit together with interest earned shall be released to them
249
immediately.
250
Should the Sellers fail to give Notice of Readiness by the date stipulated in line 61 or fail to be ready
251
to validly complete a legal transfer as aforesaid they shall make due compensation to the Buyers for
252
their loss and for all expenses together with interest if their failure is due to proven
253
negligence and whether or not the Buyers cancel this Agreement.
254

15.      Buyers' representatives
255

After this Agreement has been signed by both parties and  the deposit  has  been  lodged, the Buyers
256
have the right to place 2  (two)   representatives on board the Vessel at their sole risk and expense upon
257
arrival at  ________ on or about   on the last laden leg prior to delivery for which Sellers will promptly (minimum 5 Banking days) notify the Buyers in writing.
258
These representatives shall remain on board until delivery of the Vessel to, and acceptance of the Vessel by the Buyers   are on board for the purpose of familiarisation and in the capacity of
259
observers only, and they shall not interfere in any respect with the operation of the Vessel. The
260
Buyers' representatives shall sign the Sellers' letter of indemnity prior to their embarkation.
261
 
16.      Arbitration
262

a)*            This Agreement (and any non-contractual obligations connected with this Agreement) shall be governed by and construed in accordance with English law and
263
any dispute arising out of this Agreement a shall be referred to arbitration in London in
264
accordance with the Arbitration Acts 1996   1950 and 1979 or any statutory modification or
265
re-enactment thereof for the time being in force, one arbitrator being appointed by each
266
party. The arbitrators shall be full members of the London Maritime Arbitrators Association ("LMAA"). On the receipt by one party of the nomination in writing of the other party's
arbitrator,
267


that party shall appoint their arbitrator within fourteen days, failing which the decision of the
268
single arbitrator appointed shall apply. If two arbitrators are properly appointed shall not agree
269
they shall appoint an umpire whose decision shall be final   a third arbitrator failing which the third arbitrator shall be appointed by the President of the LMAA at the time within 21 days of the two arbitrators being appointed .
270


b)*              This  Agreement  shall  be  governed  by  and  construed  in  accordance  with  Title  9  of   the
271
United States Code and the Law of the State of New York  and  should  any  dispute  arise  out  of
272
this Agreement, the matter in dispute shall be referred to three  persons  at  New  York,  one  to
273
be appointed by each  of  the  parties  hereto,  and  the  third  by  the  two  so  chosen;  their
274
decision or that of any two of them shall be final, and for purpose of enforcing any  award,  this
275
Agreement may be made a rule of the Court.
276
The proceedings shall be conducted in accordance  with  the  rules  of  the  Society  of  Maritime
277
Arbitrators, Inc.  New York.
278

c)*              Any dispute arising out of this Agreement shall be referred to arbitration at
279
                                                                     , subject to the procedures applicable there.
280
The laws of                              shall govern this Agreement.
281

*              16 a), 16 b) and 16 c) are altematives; delete whichever is not applicable.  In the absence of
282
deletions, altemative 16 a) to apply .
283

Additional Clauses 17, 18, 19, 20, 21, 22, 23, 24 and 25, inclusive as below, are deemed to be fully
incorporated into and form an integral part of this Agreement.

17. Sellers' and Buyers' Subjects

This MOA is subject to approval by the Sellers and Buyers Board of Directors which subject is to be declared latest by 1700 hours Copenhagen, Denmark time on Tuesday December 23rd after receipt of this MOA duly signed by fax or email by duly authorized representatives of the Sellers and the Buyers. Should the Sellers or the Buyers not lift their subject as aforesaid then this MOA shall be null and void and the parties shall have no claims against each other.

18.  Confidentiality

This Agreement shall he confidential between the Parties including the broker involved.
No detailed information concerning this Agreement may be released by either Party, however, Buyers appreciate that Sellers are listed on the Copenhagen Stock Exchange and may be required to report a sale under the stock exchange rules. If so required, Sellers will not mention any names of Buyers. Also nothing in this clause shall preclude the Parties from giving information relating to this Agreement to their professional advisors and bankers. Sellers also appreciate that Buyers are a stock listed company and agree all terms and Conditions of this Agreement to be kept strictly private and confidential by all parties involved, save as required otherwise by the Securities and Exchange Commission and/or US stock listed exchange rules applicable to the Buyers.

19.  In replacement of NSF 93 Clause 6 (Drydocking/Divers Inspection)

No drydocking clause to apply and Clause 6 of Salesform 1993 is deleted.
However, at the Vessel's arrival at the delivery port and prior to the vessel's delivery the Buyers have the right to carry out an inspection of the vessel's underwater (below summer loadline) parts by class approved divers with video link to the attending class surveyor, such divers inspection to be at Buyers' risk and expense.
Buyers to advise Sellers five (5)days prior to expected delivery if they intend to carry out underwater inspection. If the declared by Sellers delivery port is not feasible for an underwater inspection Buyers shall promptly advise Sellers of an alternative place near to the delivery port, to be mutually agreed, where Sellers are to make available, at Sellers' cost, for such an inspection. The extent of the inspection amid conditions under which is performed shall be to the satisfaction of the classification society.


The divers' inspection to be carried out in a manner and under conditions considered suitable by the attending class surveyor for such underwater inspection. Attendance arrangements and fees for the attending class surveyor shall he for the Sellers account and the cost of the divers for the Buyers' account.

A)  If any damage is found to the Vessel's underwater parts which leads to imposing recommendation(s) against the Vessel, and requires same to be repaired prior to the Vessel's next due drydocking date, then the Sellers shall repair such damage to the satisfaction of classification society at the Sellers' time and expense, prior to the Vessel's delivery to the Buyers. Should the Vessel be required to drydock to effect such repairs to class satisfaction, then the Buyers shall have the right to scrape/paint the Vessel's underwater parts at Buyers risk and expense whilst the Vessel is in drydock. All costs and materials associated with the Buyers works and any extra drydocking time required for the Buyers to carry out/complete their works shall always be for the Buyers account. Such Buyers works shall not interfere with the Sellers works and not to delay the delivery of the Vessel. In the event that the Sellers have completed their works in the drydock to the satisfaction of class and the Buyers works are not yet completed, then the Sellers have the right to tender NOR for delivery to the Buyers whilst the Vessel is in drydock. In the event of the Vessel being required to drydock for repairs and there are no suitable drydocking facilities available at the delivery port, then the Sellers shall take the vessel in ballast to the nearest port/place where suitable drydocking facilities are available, and a new delivery port to be agreed between the parties. It is hereby mutually agreed by the Sellers and the Buyers, that in the event of damage affecting class being found during the divers inspections as mentioned above, then the agreed cancelling date shall automatically be extended by the additional time required for the drydocking, repairs and extra steaming, but limited to a maximum of 14 running days. Class attendance fees and divers costs to be for Sellers' account.

B)  If any damage(s) to the Vessel's underwater parts is found which leads to class imposing a recommendation(s) against the Vessel but agree to postpone permanent repairs to same until the Vessel's next due drydocking date then, in lieu of the Sellers repairing such damage(s), the Sellers to compensate the Buyers by way of reduction from the agreed purchase price of this Agreement and the Buyers shall take delivery of the Vessel as she is with such recommendation(s) outstanding. The Sellers and the Buyers shall each obtain a quotation for the repair of such damage(s) from two (2) reputable ship repair yards in the area, and the compensation amount to the Buyers shall be the average of the two repair quotations received by the Buyers and Sellers respectively as mentioned above. Class attendance fees and divers costs to be for the Sellers' account.

20:              Blacklisting
The Sellers to confirm to the Buyers in writing on delivery that to the best of their knowledge and belief the Vessel is not blacklisted by the Arab boycott League in Damascus or any other nation or authority.

21:              Gypsy Moth
A certificate showing the Vessel is free of gypsy moth to be handed to the Buyers at delivery.

22:              Clean Holds
The Vessel to he delivered with clean swept holds.

23:              Chinese tonnage tax Certificate
If Sellers have in their possession a latest Certificate for Chinese Tonnage Tax dues that the
Vessel/Sellers owes, then Sellers undertake to deliver at no cost to the Buyers on delivery.

24:              Contracts (Rights of Third Parties) Act 1999
Nothing contained in this Agreement confers or purports to confer on any third party benefit or any
right to enforce any term hereof pursuant to the Contracts (Rights of Third Parties) Act 1999.

25. Notices
Any and all notices and communication in connection with this Agreement shall be in English
in writing and shall be sent,
(a)  if to the Sellers at:





Attention: Mads Pilgaard
Telephone: Office +45 33 42 05 34 //mobile +45 28448452
Fax:
E-mail: projects@ds-norden.com // mpl@ds-norden.com
or such other address as the Sellers may notify the Buyers.

(b)  If to the Buyers an:
Attention: Stamatis Tsantanis
Telephone: +30 210 8931507
Fax: +30 210 9638450
E-mail: snt@seanergy.gr // kgalanis@seanergy.gr
or such other address as the Buyers mop notify the Sellers.



     
     
/s/Eirini Kritikou
 
/s/Stamatios Tsantanis
For Dampskibsselskabet NORDEN A/S
 
For Seanergy Maritime Holdings Corp.
Name: Ejner Kiel Bonderup
 
Name: Stamatios Tsantanis
Title: Executive Vice President
 
Title: Director

Exhibit 4.10
Novation Agreement
Date: 27 July 2015
PARTIES:
1 V . Ships Greece Ltd., of Bermuda, with registered address at Par la ville place 14, Par la ville road, Hamilton HM 08, Bermuda, c/o Agiou Dionisiou 3, (herein referred to as the " Existing Manager ")
2 Leader Shipping Co . , of the Marshall Islands, with registered address at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH96960 Marshall Islands (herein referred to as the " Owner ")
3 V . Ships Limited, of Limassol Cyprus, with registered address at Zenas Gunther, 16-18, Agia Triada, 3035 Limassol, Cyprus (herein referred to as the " New Manager ")
WHEREAS:
A. This Novation Agreement is supplemental to a Ship Management Agreement dated 11 February 2015 made between the Existing Manager and the Owner in respect of the vessel " LEADERSHIP "   registered in the name of the Owner under the Bahamas flag with IMO no. 9233923 (the " Management Agreement ").
B. In accordance with Clause 17 of the Management Agreement, the Existing Manager and the Owner have agreed that the Management Agreement may be novated by the Owners to the New Manager at any time from the Date of Commencement (as defined in the Management Agreement) by a sole written notice of the Owners to the Managers.
C. The Owners have notified the Existing Manager on the novation of the Management Agreement and it has been agreed that the Existing Manager be released and discharged from the Management Agreement as from 27 July 2015 (the "Effective Date") and that the Owner releases and discharges the Existing Manager with respect to the Management Agreement from the Effective Date upon the terms of the New Manager undertaking to perform in all respects the Management Agreement and be bound by all the terms of the Management Agreement in place of the Existing Manager.
D. The Management Agreement, as Annexed hereto, has not been amended, varied, cancelled, novated or terminated and represents the entire agreement between the Existing Manager and the Owner.
NOW THEREFORE, in consideration of the premises and the mutual covenants herein set out, it is hereby agreed as follows:-
1 . Novation and Release
1.1 With effect from the Effective Date as defined in paragraph "C" above and by mutual agreement between the parties and in consideration of the mutual undertakings and releases herein contained, the New Manager shall substitute the Existing Manager under the Management Agreement and the New Manager shall as from the Effective Date assume all rights and obligations of the Existing Manager arising out of or in connection with the Management Agreement and agrees to be bound in all respects In place of the

Existing Manager by the terms of the Management Agreement, which shall hereafter be construed and treated in all respects as if the New Manager had been originally named as a party to the Management Agreement.
1.2 The Owner hereby agrees to continue to be bound by the Management Agreement in all respects vis-a-vis the New Manager from the Effective Date and further agrees to release the Existing Manager from any further liability under the Management Agreement that may arise or be incurred from events after the Effective Date,
1.3 Any issues or disputes arising between the Existing Manager and the New Manager in connection with the Management Agreement shall be resolved between themselves without involving or prejudicing the Owner.
1.4 Nothing in this Novation Agreement shall affect or prejudice any claim or demand whatsoever which either the Owner or the Existing Manager may have against the other relating to matters arising prior to the Effective Date.
2 . Amendments to the Management Agreement
From the Effective Date, the following amendments are agreed to the Management Agreement:
(a) all references to the "Managers" in the Management Agreement shall be deemed to mean the New Manager and not the Existing Manager; and
(b) In Box 3 of Part I of the Management Agreement will be replaces as of the Effective Date with the following:
 
3. Managers
 
     
 
Name: V . SHIPS LIMITED, of Limassol Cyprus
 
 
Registered Office: Zenas Gunther, 16-18, Agia Triada, 3035 Limassol, Cyprus
 
 
Country of Incorporation: Cyprus
 
     
 
Telephone Number: +357 25848400
Fax Number: +357 255601700
 
 
Contact Name: Capt. Alex Halavins
Position: General Manager
 
       
 
Email address: alex.halavins@vships.com
 

3 . Law and Jurisdiction
This Agreement is governed by and shall be construed in accordance with English law. Each party agrees with the others that, In the event of a dispute between them or any of them, such disputes shall be referred to arbitration in London, and the arbitration agreement between such parties shall be in the terms of clause 20 of the Management Agreement. In the event of a dispute involving all the parties, it is agreed that there shall be a consolidated reference to arbitration, and that if separate references are commenced they shall upon request of any party be consolidated.

THIS AGREEMENT has been executed by the parties to this Agreement as a deed on the date specified at the beginning of this Agreement.
Executed as a Deed
)
 
By Capt. Mauro Renaldi
)
/s/ Mauro Renaldi
for and on behalf of
)
 
V . Ships Greece Ltd.
)
 
of Bermuda
)
 
in the presence of:
)
 
     
     
Executed as a Deed
)
 
By Mr. Stamatios Tsantanis
)
/s/ Stamatios Tsantanis
for and on behalf of
)
 
Leader Shipping Co.
)
 
of the Marshall Islands
)
 
in the presence of:
)
 
     
     
Executed as a Deed
)
 
By Capt. Alex Halavins
)
/s/ Alex Halavins
for and on behalf of
)
 
V.Ships Limited
)
 
of Limassol Cyprus
)
 
for and on behalf of
)
 
the presence of:
)
 






Exhibit 4.11
ADDENDUM NO. 1 TO TECHNICAL MANAGEMENT AGREEMENT
This Addendum No. 1 (this " Addendum ") dated as of March 18 th , 2016, by and among LEADER SHIPPING CO. , a company incorporated in the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH96960 Marshall Islands in Marshall Islands, (the " Owner "), and V.SHIPS LIMITED , a company incorporated in Limassol Cyprus whose registered office is at Zenas Gunther, 16-18, Agia Triada, 3035 Limassol, Cyprus (the " Manager "), to the Technical Management Agreement dated as of February 11 th , 2015, by and among the Company and V.Ships Greece Ltd., as novated by a novation agreement dated as of July 27 th , 2015 entered into between the Owner, the Manager and V.Ships Greece Ltd. (the " Agreement ") for the provision of technical management services by the Manager to the Owner for the mv Leadership (the " Vessel "). Capitalized terms used herein without definition shall have the respective meanings ascribed thereto (or incorporated by reference) in the Agreement, which also contains rules of usage that apply to terms defined therein and herein.
RECITAL
WHEREAS , the Owner and the Manager desire to enter into this Addendum No. 1 for the purpose of including words and expressions in Clause 1.1 of the Agreement.
WHEREAS , the Owner and the Manager desire to enter into this Addendum No. 1 for the purpose of including a new Clause 3.12.
WHEREAS , the Owner and the Manager desire to enter into this Addendum No. 1 for the purpose of amending the existing Clause 8.11 of the Agreement.
NOW, THEREFORE , in consideration of the foregoing recitals and the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1.              Clause 1.1 of the Agreement
The following words and expressions are hereby included in alphabetical order in Clause 1.1:
"
"lay-up" means the lay-up for a period of more than 3 months during which the Vessel is moored in a secured location and all her systems are shut down with minimum ongoing maintenance to prevent deterioration of the Vessel's hull structure and machinery. During this period, a specialist lay-up crew may be employed and/or only watchmen may be appointed by a contracted 'housekeeping' company to be selected by the Owner.

"De-activation" means the period of time between the Vessel's time of arrival at the Lay-up Site and until she is safely laid-up including but not limited to the preparations required for safely laying-up the Vessel as well as the notification of authorities governing the Vessel's operations.
 "Flag State" means the State whose flag the Vessel is flying.
 "Lay-up Site" means the location in which the Vessel is laid up.
"Lay-up Period" means the period of time after De-activation and before Re-activation.
"Re-activation" means the period of time which is required for the Vessel to become fully operational in accordance with the applicable Class, Flag and international requirements; the Re-activation will commence upon the Owners' initial notification to the Managers and will terminate when the Vessel is ready to sail from the Lay-up Site. The Re-activation will last for a period of not more than three (3) weeks."
2.              Clause 3.12 of the Agreement
A new Clause 3.12 is hereby added in the Agreement as follows:
" 3.12              Lay up of Vessel
In the event that the Owners decide to lay-up the Vessel, the Managers shall:
A. Provide in cooperation with the Owners the Vessel with instructions with regards to the procedures that shall be followed throughout the Lay-up Period for all phases of the project, lay-up, De-activation and Re-activation.
B. Use their best endeavors to perform the Management Services in accordance with sound layup industry practice, including but not limited to compliance with all relevant rules and regulations, and protection of the Vessel and surrounding environment in the case of emergency. The Managers shall have in place and maintain an emergency response plan. The Managers shall waive their right to claim any award for salvage performed on the Vessel and/or to protect the environment. The performance of the Management Services shall be conducted in a manner consistent with appropriate social responsibility
C. Notify the Owners in the event that, during the performance of the Management Services, the Managers become aware of any equipment or machinery that needs maintenance and/or repair. The Owners will decide whether the Vessel and/or her equipment or machinery is in need of maintenance and/or repair. However, if the maintenance and/ or repair are, in the Managers' opinion, critical for the Vessel's safety and/or the surrounding environment the Managers have the right to take all necessary and prudent steps to effect such maintenance and/or repairs without consulting the Owners, provided that they will advise the Owners of such need as soon as practicably possible.
D. Maintain records of work carried out in performance of the Management Services;

E. Provide periodic written reports to the Owners of the observed condition of the Vessel and its equipment and machinery in a form and frequency agreed between the parties; and
F. Arrange necessary class and flag surveys to obtain lay-up classification and registry notations and further ensure that, throughout the Lay-up Period, that the Vessel is in possession of valid certificates to comply with the port authority, Flag State and Vessel's classification society requirements.
G. Do any such actions to preserve the Vessel and her machinery and equipment in order to prevent damage or deterioration and to assist with subsequent Re-activation.
In the performance of their management responsibilities under this Agreement, the Managers shall be entitled to have regard to their overall responsibility in relation to all vessels as may from time to time be entrusted to their management. In particular, but without prejudice to the generality of the foregoing, the Managers shall be entitled to allocate available supplies, manpower and services in such manner as in the prevailing circumstances the Managers in their absolute discretion consider to be fair and reasonable.
In the event that the Owners decide to lay-up the Vessel, the Owners shall pay all sums to the Managers punctually in accordance with Clause 8.11 and the terms of this Agreement."
3.              Amended and Restated Clause 8.11 of the Agreement
Clause 8.11 of the Agreement is hereby amended and restated as follows:
" 8.11              If the Owners decide to lay-up the Vessel and such lay-up lasts more than two (2) months, no management fee shall be paid to the Managers for the period exceeding the two (2) months until the Owners give written notice to Re-activate the Vessel. The Owners shall reimburse the Managers for any costs that arise while the Vessel is laid up following the two (2) months provided these costs have been approved by the Owners."
IN WITNESS WHEREOF , the parties hereinabove have caused this Addendum No. 1 to the Agreement to be signed in duplicate by their respective and duly authorized representatives as of the date first written hereinabove.
LEADER SHIPPING CO.
 
V.SHIPS LIMITED
     
     
By:
/s/ Stamatios Tsantanis
 
By:
/s/ Capt. Alex Halavins
Name:
Stamatios Tsantanis
 
Name:
Capt. Alex Halavins
Title:
Director / President/ Treasurer
 
Title:
General Manager

 
 
Exhibit 4.12








[Name of Owner]





and




V.Ships Limited








SHIP TECHNICAL MANAGEMENT AGREEMENT





















SHIP TECHNICAL MANAGEMENT AGREEMENT

INDEX

PART
SUBJECT MATTER
PAGE NO.
 
       
Part I
Vessel Details
4
 
Part II
Terms of Agreement
   
       
 
1.
Definitions & Interpretation
6
 
 
2.
Appointment of Managers
6
 
 
3.
Basic Services
6
 
 
3.1
Crewing
7
 
 
3.2
Technical Management
8
 
 
3.3
Purchasing
8
 
 
3.4
Insurance
9
 
 
3.5
Accounting and Budgeting
9
 
 
3.6
Operations
10
 
 
3.7
Information System Software
10
 
 
3.8
Shipboard Oil Pollution Emergency Plan
11
 
 
3.9
OPA
11
 
 
3.10
Assistance with Sale of Vessel
11
 
 
3.11
Vessel trading in high risk areas
11
 
 
4.
Other Services
12
 
 
5.
Managers' Obligations
12
 
 
6.
Owners' Obligations
12
 
 
7.
Documentation
13
 
 
8.
Management Fee
14
 
 
9.
Payments and Management of Funds
15
 
 
10.
Managers' Right to Sub-Contract
16
 
 
11.
Responsibilities
16
 
 
11.1
Force Majeure
16
 
 
11.2
Liability to Owners
16
 
 
11.3
Indemnity – General
16
 
 
11.4
Indemnity – Tax
17
 
 
11.5
Himalaya
17
 
 
12.
Liens
17
 
 
13.
Claims/Disputes
17
 
 
14.
Auditing, Records
18
 
 
15.
Inspection of Vessel
18
 
 
16.
Compliance with Laws & Regulations
18
 
 
17.
Duration of the Agreement
18
 
 
17.1
Termination by Notice
18
 
 
17.2
Termination by Default – Owners
18
 
 
17.3
Termination by Default – Managers
19
 
 
17.4
Liquidation
19
 
 
17.5
Extraordinary Termination
19
 
 
18.
Confidentiality
19
 
 
19.
Suspension of Services
20
 
 
20.
Law and Arbitration
20
 

 
21.
Amendments to Agreement
20
 
 
22.
Time Limit for Claims
20
 
 
23.
Condition of Vessel
20
 
 
24.
Use of Associated Companies
21
 
 
25.
Notices
21
 
 
26.
Staff Loyalty
21
 
 
27.
Entire Agreement
21
 
 
28.
Partial Validity
21
 
 
29.
Non Waiver
21
 
         
Part III
 
Other Services
22-23
 
Part IV
 
Fee Schedule
24
 
Part V
 
Fleet Details
25
 
Part VI
 
Initial Budget
26-28
 




SHIP TECHNICAL MANAGEMENT AGREEMENT - PART I


 
1.  Vessel Details
 
Name:
GT/NT:
Flag:  
Class:
Type:  BULK CARRIER
Year Built:
     IMO number:
 
 
 
2.      Owners
Name: [Name of Owner]
 
2.1 Owners' Registered Address (where the company is registered):
 
 
c/o 16 Grigoriou Lambraki Str, 16674 Glyfada, Athens Greece
 
Country of Incorporation:
 
 
2.2 Owners' business establishment address (head office and principal place of business):
 
Telephone Number: +30 213 0181507
Fax Number: +30 210 9638404
Contact Name:
Position:
 
     Email address: tec-ops@seanergy.gr
 
2.3 Owners' VAT registration number if business establishment address at 2.2 is in the    European Union: N/A
 
3.    Managers
Name:                        V.SHIPS LIMITED, of Limassol Cyprus
Registered Office: Zinas Kanther, 16-18, Agia Triada, 3035 Limassol,                                                                                                                                                                                    Cyprus
Country of Incorporation: Cyprus
 
Telephone Number: +357 25848400
Fax Number: +357 25560170 0
Contact Name: Capt. Alex Halavins
Position: General Manager
 
      Email address: alex.halavins@vships.com
 
 
4.    Date of Commencement of Agreement (Clause 2.1)
Upon Owners delivery of the Vessel to the Managers
 
 
5.    Notices to Owners : at the Owners' executive offices in Greece, fax number and email address stated in Box 2
 
 
6.    Notices to Managers :
 
 
 
at the address, fax number and email address stated in Box 3 with a copy to Marine Legal Services Limited, 1 st floor, 63 Queen Victoria Street, London EC4N 4UA tel (44) (0) 20 7329 2422 fax (44) (0) 20 7236 2894
 
email craig.brown@marinelegal.co.uk
 

4


It is mutually agreed between the party mentioned in Box 2 of Part I (hereinafter called " the Owners ") and the party mentioned in Box 3 of Part I (hereinafter called " the Managers ") that this Agreement consisting of PARTS I to VII inclusive shall be performed subject to the conditions contained herein. In the event of a conflict of conditions, the provisions of an applicable Appendix of Part III shall prevail over the provisions of PART II to the extent of such conflict but only in respect of the Management Service to be provided in terms of such applicable Appendix. In the event of a conflict between the Fee Schedule and the provisions of an applicable Appendix of Part III, the provisions of the Fee Schedule shall prevail.



DATE OF AGREEMENT: 1 st September 2015

Signature(s) (Owners)
 
Signature(s) (Managers)
[Name of Owner]
 
V.SHIPS LIMITED
     
     
     
STAMATIOS TSANTANIS
 
ALEX HALAVINS
Title: Director / President / Treasurer
 
Title: General Manager

5



SHIP TECHNICAL MANAGEMENT AGREEMENT - PART II

1. Definitions and Interpretation
1.1 In this Agreement, in addition to terms defined in Part I, save where the context otherwise requires, the following words and expressions shall have the meanings hereby assigned to them.
" Basic Services " means services relating to Crewing, Technical Management, Purchasing, Operations, Accounting and Budgeting, Information System Software, Shipboard Oil Pollution Emergency Plan, OPA and Assistance with Sale provided in accordance with Clause 3.
" Crew Support Costs " means all expenses of a general nature not particularly referable to any individual vessel for the time being managed by the Managers and incurred for the purpose of providing an efficient and economic management service including, without prejudice to the generality of the foregoing, cost of crew standby pay, training schemes, cadet training schemes, study pay, recruitment and interviews.
" Fee Schedule " means the Schedule comprising Part IV or any revised Fee Schedule prepared by the Managers after the date hereof and agreed by the Owners in writing to record adjustments to the fees payable from time to time under this Agreement.
" Information System Software " means the Managers' proprietary ship management software in executable object code form as described in Clause 3.7.1 as the same may be upgraded and updated from time to time.
" ISM Code " means the International Management Code for the Safe Operation of Ships and for Pollution Prevention adopted by Resolution A.714 (18) of the International Maritime Organisation on 4 November 1994 and incorporated on 19 May 1994 into the SOLAS Convention 1974 as Chapter IX and any amendment thereto or substitution thereof.
"ISPS Code" means the International Ship and Port Facility Security Code as adopted on 12 December 2002 by resolution 2 of the Conference of Contracting Governments to the International Convention for the Safety of Life at Sea 1974 and any amendment thereto or substitution thereof.
" Management Services " means Basic Services and Other Services and all other functions performed by the Managers under the terms of this Agreement.
" MLC " means the Maritime Labour Convention 2006   and any amendment thereto, substitution thereof and ratification of the Maritime Labour Convention 2006 in the respective States national law.
" OPA " means the United States Oil Pollution Act of 1990, regulations made thereunder, and any amendment thereto or substitution thereof.
" Other Services " means any services provided by Managers affirmatively indicated in Part III of this Agreement.
" Severance Costs " means the costs which the employers are legally obliged to pay to or in respect of the Crew as a result of the early termination of any contract for service on board the Vessel.
" SMS " means a Safety Management System in accordance with the ISM Code.
"SSP" means a Ship Security Plan in accordance with the ISPS Code.
" STCW " means the International Maritime Organisation Convention on Standards of Training Certification and Watchkeeping for Seafarers 1978, as amended in 1995 and any amendment thereto or substitution thereof.
" the Vessel " shall mean the vessel details of which are set out in Box 1 of Part I.
1.2 Clause Headings are inserted for convenience and shall be ignored in construing this Agreement; words denoting the singular number shall include the plural number and vice   versa ; references to Parts are to Parts of this Agreement; references to Clauses are to Clauses of Part II except where otherwise expressly stated; and references to any enactment include any re-enactments, amendments and extensions thereof.
2. Appointment of Managers
2.1 With effect from the date stated in Box 4 of Part I (the "Date of Commencement") and continuing unless and until terminated as provided herein, the Owners hereby appoint the Managers and the Managers hereby agree to act as the managers of the Vessel in respect of the Management Services.
2.2 In performing any of the Management Services the Managers shall, as agents for and on behalf of the Owners, have authority to take such steps as the Managers may from time to time in their reasonable discretion consider to be necessary to enable them to perform this Agreement in accordance with sound ship management practice.
3. Basic Services
Subject to the terms and conditions herein provided, during the period of this Agreement the Managers shall carry out, as agents for and on behalf of the Owners, the Basic Services in accordance with the following provisions of this Clause.
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3.1 Crewing
3.1.1 The Managers shall provide suitably qualified crew for the Vessel and its trade as required by the Owners in accordance with current STCW requirements as agents for and on behalf of the Owners, provision of which includes but is not limited to the following functions:
(i) select and engage Master, officers and crew (hereinafter collectively referred to as the "Crew"); where the Owners make a complaint about any member of the Crew the Managers will promptly investigate the same and if it proves to be justified, replace the Crew member concerned as soon as practicable;
(ii) ensure that the applicable requirements of the law of the flag of the Vessel are satisfied in respect of manning levels, rank, qualification and certification of the Crew, and employment regulations including Crew's tax, social insurance, discipline and other requirements;
(iii) ensure that all members of the Crew have passed a medical examination with a qualified doctor certifying that they are fit for the duties for which they are engaged and are in possession of valid medical certificates which are valid for the duration of their service onboard the Vessel and issued in accordance with appropriate flag state requirements and P&I Club requirements; in the absence of applicable Flag state requirement medical certificate shall be dated no more than three (3) months prior to the respective Crew members leaving the country of domicile and maintained for the duration of their service on board the vessel;
(iv) arrange of transportation of the Crew, including repatriation;
(v) supervise the efficiency of the Crew and use the Manager's standard crew appraisal system (written or electronic) and administration of all other Crew matters such as planning for the manning of the Vessel;
(vi) make payroll arrangements, including settling manning and agency expenses for the manning agents in the Crew's country of origin and, if applicable, payment of Severance Costs;
(vii) if requested by the Owners, conducting union negotiations and making agreed payments to unions;
(viii) verify that the Crew shall have a command of the English of a sufficient standard to enable them to perform their duties safely;
(ix) operate the Managers' Drug and Alcohol Policy;
(ix) arrange Crew training in accordance with the Managers' policies but always in compliance with STCW (and as provided for in the budget), records of such training being maintained in the Manager's standard format and will be provided to the Owners on a monthly basis.
3.1.2 Crew Claims
The Managers will provide such information as requested by relevant brokers and/or P&I Club managers to enable such brokers or managers to prepare and process all Crew insurance claims with the Owners' approval.
3.1.3 The Owners agree to implement in full the terms and conditions of employment under which the Crew is engaged by the Managers as agent for the Owners. The Owners shall be the employer of the Crew and under no circumstances shall the Managers be deemed to be the employer of the Crew. If the Vessel is covered by an ITF approved agreement the Owners authorize the Managers to sign the ITF Special Agreement on their behalf and agree to provide all information necessary for this purpose. The Managers to provide the Owners copies of the contracts of employment upon request.
3.1.4 The Owners to approve the engagement of any member of the Crew within four (4) working days of receipt from the Managers of reasonable details of the proposed appointee. No response within the stipulated timeframe indicates tacit approval.
3.1.5 In the event that any officers or ratings are supplied by the Owners or on their behalf, the Owners shall procure that they comply with the requirements of STCW and MLC. Owners will instruct such officers and ratings to obey all reasonable orders of the Managers.Any such officers or ratings shall, at the Owners' cost, be trained in accordance with the Managers training matrix.
3.1.6 The Managers shall procure that the Crew consent to processing of their personal data for legitimate business purposes. The Owners warrant that personal data of the Crew will be processed in accordance with the requirements of the Data Protection Act 1998 or any other applicable law or regulation.
3.1.7 For the purposes of the MLC, the Owners shall be deemed "Shipowner" and under no circumstances whatsoever, notwithstanding the Managers agreeing to carry out specific obligations under the MLC on behalf of the Owners, shall the Managers be deemed "Shipowner". It is a condition of this Agreement that the Owners shall provide all Crew with MLC compliant working and living conditions. The Owners shall ensure that, in case there is any
7
Seafarer Recruitment & Placement Service supplying any member of the Crew to the Vessel or any entity directly employing other persons to work onboard the Vessel, the latter shall provide to the Managers documentary evidence of MLC compliance issued under the provisions laid down by the applicable ratifying administration or, in the case of a non-ratifying administration, documentary evidence from a Recognised Organisation that is accepted by the flag administration of the Vessel.
3.1.8 The Owners authorise the Managers to sign contracts of employment with the Crew as agent only for and on behalf of the Owners and/or to procure that a Seafarer Recruitment & Placement Service, in the country of domicile of a Crew member, signs contracts of employment with such Crew member as agent only for and on behalf of the Owners. The Managers to provide the Owners copies of all the contracts of employment upon request.
3.2 Technical Management
The Managers shall provide technical management which includes, but is not limited to the following functions:
(i) provision of personnel to supervise the maintenance and general efficiency of the Vessel;
(ii) arrangement and supervision of drydockings, repairs, modifications to and the upkeep of the Vessel to the standards agreed with the Owners provided that the Managers shall be entitled to incur the necessary expenditure, which is subject to Owners' prior approval, to ensure that the Vessel will comply with all requirements and recommendations of the classification society and equipment manufacturers, and with the laws and regulations of the country of registry of the Vessel and of the places where she trades;
(iii) arrangement of periodic analysis of the bunker fuel, lubricating oils and chemicals by third parties (the costs being included in the Vessel's running costs);
(iv) appointment of surveyors and technical consultants as the Managers may consider from time to time to be necessary, provided they are pre-approved by the Owners;
(v) visits to the Vessel by superintendents or other staff of the Managers for up to 20 days on board the Vessel in any calendar year (or pro   rata for part of a calendar year) excluding the dry-docking period of the vessel and visits to the Vessel by superintendents or other staff of the Managers in excess of this allowance to be pre-approved in writing by the Owners;
(vi) notify and receive prior approval by the Owners of any non-budgeted item of expenditure;
(vii) notify and receive prior approval by the Owners if there is an operational need to exceed quarterly budget allowance as attached to this agreement under Part VI.
(viii) development, implementation and maintenance of an SMS and an SSP.
3.3 Purchasing
3.3.1 The Managers shall arrange for the supply of necessary victualling, stores, spares, provisions, lubricating oils and services (including drydock services) for the Vessel for any amount of up to US$5,000. With respect to the supply of any items of an amount between US$5,000 to US$10,000 the Managers shall request the Owners pre-approval, which should be provided within 48 hours from the Managers' request. No response within such stipulated timeframe indicates tacit approval by the Owners. For any purchase above US$10,000, the Managers will advise the details and quotations to the Owners in writing requesting authority to proceed. The Owners have the right to arrange for any purchasing and shall advise the Managers accordingly. To enable the Managers to arrange such supplies on the most advantageous terms, the Managers shall be entitled to join with other parties in making arrangements for bulk purchase. The Managers are presently members of MARCAS Limited ("MARCAS"), an independent contracting association providing access to commodities and dry-dock services globally (www.marcas.org). MARCAS negotiates on behalf of its members with selected suppliers the best available price, terms and conditions for the bulk purchase of goods and services for the marine industry with the aim of offering to members and their clients savings on vessel technical operating costs.
3.3.2 Details of the suppliers contracted by MARCAS and prices available for the Vessel at the time of supply shall be made available to Owners upon their request. Owners acknowledge that all information relating to prices is confidential and undertake not to disclose the same to third parties without the prior written consent of the Managers.
3.3.3 Where MARCAS has negotiated terms and conditions with suppliers of any stores, spares provisions, or lubricating oils ("Goods") and/or suppliers of services required by the Vessel, then the purchase of such Goods and services will, unless operational or other circumstances otherwise require, be undertaken with such
8
suppliers on the basis of the terms and conditions negotiated by MARCAS.
3.3.4 MARCAS will where practicable obtain a best price charter from suppliers that the prices for all Goods and services purchased by MARCAS's members will be the lowest prices available. If the Owners are able to obtain in good faith, on arms' length terms, on a true like for like basis (including quality, certification, timing, manufacturer, place of supply, etc., but ignoring taxes and exchange rate fluctuations), the same Goods and/or services at a lower price than that obtained by MARCAS, the Owners will supply full details to the Managers who will promptly raise the matter with MARCAS and pass on to Owners any refund obtained by MARCAS from the supplier.
3.3.5 The Owners have received details from the Managers of the business rules and operating procedures adopted by MARCAS, including provisions related to fees that MARCAS will retain as applicable, and agree to comply with such rules and operating procedures as the same may be amended from time to time.
3.3.6 The Owners acknowledge that they are aware that prices obtained from suppliers require strict adherence to the payment terms agreed with suppliers (normally 45 days from date of invoice) and any failure by the Owners to provide the Managers with funds to settle sums due to suppliers on time will (in the absence of a good faith dispute) result in an immediate 2% surcharge. The Managers are hereby expressly authorised to settle such surcharge charges from any sums held by them on behalf of Owners. The Owners further acknowledge that they are aware if payments to suppliers are regularly made late, or if suppliers are not satisfied with Owners' credit rating, suppliers may refuse to supply at the prices and on the terms negotiated by MARCAS.
3.3.7 The Owners acknowledge that the Managers may be requested by suppliers to disclose details of the beneficial ownership of the Owners and that the Managers may not be able to obtain the most advantageous terms from such suppliers should the Owners not agree to such disclosure.
3.4 Insurance
3.4. 1If instructed by the Owners, the Managers shall refer the Owners to brokers for the placing of insurances and shall liaise between the brokers and the Owners to provide such information as may be required to make any claim, in each case in accordance with the following provisions.
3.4.2 The Managers shall arrange for brokers to place such insurances as the Owners shall have instructed or agreed, in particular as regards values, deductibles and franchises.  At each renewal the Managers will liaise with brokers and the Owners:
(i) as to any changes in insured values required;
(ii) in respect of premiums, franchises and deductibles and any other changes for the new policy year; and
(iii) to update the budget to reflect changes in insurance premiums.
For the avoidance of doubt under no circumstances will the Managers be liable to the Owners for any losses which the Owners may incur as a result of the level of insured values.
3.4.3 The Managers shall engage the services of their appointed insurance brokers to arrange such insurances.
3.4.4 The Managers shall compile such statistics and enter into negotiations with such brokers and P & I Club managers as they consider necessary or desirable in order to arrange for such insurances to be placed.
3.4.5 Once insurances are placed the Managers shall arrange for all cover notes to be checked and for all debit notes to be paid as required.
3.4.6 The Managers shall have the right to obtain confirmation direct from the brokers, underwriters and P & I Clubs through whom the Vessel's insurances are arranged that all premiums calls and contributions due have been paid and that insurances meet the Owners' obligations under Clauses 6.3, 6.4 and 6.5.   Where any premiums, calls and/or contributions are not paid, the Managers shall be entitled to pay the same from any funds held by them for the Owners and/or  to terminate this Agreement forthwith by notice in writing.
3.4.7 Unless otherwise indicated by the Owners, the Managers shall provide such information as requested by the relevant brokers to enable such brokers to handle and or procure the settling of all insurance average and salvage claims in connection with the Vessel.
3.5 Accounting and Budgeting
3.5.1 The Managers shall:
(i) maintain records of all costs and expenditure incurred hereunder as well as data necessary or proper for the settlement of accounts between the parties;
(ii) establish an accounting system for the Vessel and supply regular monthly reports (within 5 working days from the end of the preceding month) in accordance therewith in the Managers' standard format or, on agreement of an additional fee, such other form as may be mutually agreed in writing with the Owners.
9

3.5.2 The Managers shall present to the Owners annually a budget for the following calendar year in the Managers' standard format. The budget for the period in 2015 following the date stated in Box 4 of Part I is set out in Part VI.
3.5.3 The Owners shall notify the Managers of their acceptance and approval of the annual budget within 14 days of presentation and in the absence of any response the Owners shall be deemed to have accepted the said budget. In the event that the Owners do not accept an annual budget presented by the Managers within the period aforesaid and that budget is, in the reasonable opinion of the Managers, fair and reasonable, the Managers shall be entitled to terminate this Agreement by notice in writing, in which event this Agreement shall terminate on the expiry of a period of one (1) month from the date upon which such notice is given.
3.5.4 The Managers shall produce a monthly comparison between budgeted and actual expenditure of the Vessel in the Managers' standard format or, on agreement of an additional fee, such other form as may be mutually agreed in writing accompanied by proper written justification of variances reports. In addition if required by the Owners the Managers shall produce quarterly forecast report on the annual budget.
3.5.5 This Clause 3.5 is subject to the provisions of Part VI.
3.6 Operations
As required by the Owners, the Managers shall, as agents for the Owners, provide support on the following functions:
(i) Monitoring voyage instructions and liaising as appropriate with the Owners, the Owners' brokers and charteres;
(ii) Appointment of agents; and
(iii) Arrangement of surveying of cargoes.
3.7 Information System Software
3.7.1 The Managers will, subject to the remaining provisions of this Clause 3.7, provide the Owners and the Vessel with the Information System Software to allow information from both the Vessel's and the Managers' office to be accessed directly by the Owners via the "PartnerShip Network" secure website. Financial, technical and operational information relating to the Vessel will be available from both the Vessel and office outputs, with the ability to "drill down" on accounts. This will provide the Owners with immediate access to the same information available to the Managers and to reports generated for the Owners, with a view to providing improved efficiency and cost savings to the Owners in his overview of the management of the Vessel.
3.7.2 Should the Owners have existing software applications on board the Vessel which they wish to retain, the Owners will permit the Managers to carry out an on board audit to assess the suitability, compatibility with the Information System Software, and any risks or disadvantages associated with the continued use of such applications.
3.7.3 The main features of the Information System Software at the date of this Agreement are:
(i) comprehensive management software providing single point of entry to the Vessel incorporating Crew administration, vessel noon reporting, operational and port reporting, defect and deficiency reporting and performance monitoring;
(ii) a ship to shore and shore to ship e-mail package providing cost efficient communications available to both Owners and their charterers; and
(iii) a computerised maintenance system including inventory control and automated purchase order handling. (An initial charge, to be agreed with Owners, may be made for the set-up of the maintenance database, depending on the system currently existing on board the Vessel).
3.7.4 The costs for the Information System Software are set out in the Fee Schedule, and are included in the Vessel's running costs, as follows:
(i) the license fee;
(ii) remote access from the Owners' Office through the Managers' PartnerShip network;
(iii) maintenance, updates and upgrades;
(iv) 24 hour support;
(v) provision of anti-virus software and regular upgrades;
(vi) operational manuals on CD ROM and regular updates;
(vii) annual remote audit of the Vessel IT systems providing a system health check;
(viii) user manuals and training of the Crew in the use of the Information System Software; and
(ix) e-mail on board the Vessel.
3.7.5 Such costs do not include:
(i) the costs of appropriate hardware on board the Vessel;
(ii) travel and other related costs for installation support of the Information System Software on board the Vessel;
(iii) the set-up cost of the data base for the maintenance system; the Client remains an
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owner of the PMS data, which can be exported at any given time on request.
(iv) any specific reports specified by the Owners where new data/specialist reporting is required; and
(v) costs incurred pursuant to clause 3.7.2.
3.7.6 Installation and set-up of the Information System Software will be undertaken on a date agreed between the Managers and the Owners having regard to the Vessel's schedule and the availability of the Managers' personnel.
3.7.7 Solely for the duration of this Agreement the Managers hereby grant the Owners a personal, non-transferable non-exclusive license to use a single copy of the Information System Software as installed by the Managers on a single computer on board the Vessel.
3.7.8 The Information System Software is owned by the Managers or its subsidiaries and is protected by applicable copyright and patent laws. The Owners may not copy the Information System Software (except for back-up purposes only) or any written materials which accompany it, and may not sell, rent, lease, lend, sub-license, reverse engineer or distribute the Information System Software or such written materials.
3.7.9 The Managers do not warrant that the Information System Software will meet the Owners' requirements or that the use or operation of the Information System Software will be uninterrupted or error free.
3.8 Shipboard Oil Pollution Emergency Plan
3.8.1 The Managers will prepare and obtain all necessary approvals for a shipboard oil pollution emergency plan (SOPEP) in a form approved by the Marine Environment Protection Committee of the International Maritime Organisation pursuant to the requirements of Regulation 26 of Annex I of the International Convention for the Prevention of Pollution from Ships, 1973, as modified by the Protocol of 1978 relating thereto, as amended (MARPOL 73/78).
3.8.2 The SOPEP will be written in the English language and will be reviewed and updated from time to time. If required the Managers will arrange for the translation of the SOPEP into another language, the cost of translation being recoverable in terms of Clause 8.5.
3.8.3 The Managers will also undertake regular training of the Crew in the use of the SOPEP including drills to ensure that the SOPEP functions as expected and that contact and information details specified are accurate.
3.9 OPA
3.9.1 If instructed by the Owners, the Managers will:
(i) arrange for the preparation, filing and updating of a contingency Vessel Response Plan in accordance with the requirements of OPA and instruct the Crew in all aspects of the operation of such plan;
(ii) identify and ensure the availability by contract or otherwise of a Qualified Individual, a Spill Management Team, an Oil Spill Removal Organisation, resources having salvage, firefighting, lightering and, if applicable, dispersant capabilities, and public relations/media personnel to assist the Owners to deal with the media in the event of discharges of oil.
3.9.2 The Managers are expressly authorised as agents for the Owners to enter into such arrangements by Contract or otherwise as are required to ensure the availability of the services outlined in Clause 3.8.1. The Managers are further expressly authorised as agents for the Owners to enter into such other arrangements as may from time to time be necessary to satisfy the requirements of OPA or other Federal or State laws.
3.9.3 The Owners will pay the fees due to third parties providing the services described above together with costs to the Managers if any. The level of fees will be included in the Vessel's running costs.
3.9.4 On termination of this Agreement, the Vessel Response Plan and all documentation will be returned to the Managers at the expense of the Owners, provided such expense does not exceed US$150.
3.10 Assistance with Sale of Vessel
The Managers shall, if requested, provide Owners with technical assistance in connection with any sale of the Vessel. The Managers will, if requested in writing by the Owners, comment on the terms of any proposed Memorandum of Agreement, but the Owners will remain solely responsible for agreeing the terms of any Memorandum of Agreement regulating any sale.
3.11 Vessel trading in high risk areas
In the event that the Vessel is to trade in a high risk area and in particular an area where piracy is prevalent, the Managers shall:
(i) Comply in full with the guidance provided by 'Best Management Practices to Deter Piracy off the Coast of Somalia and in the Arabian Sea Area (BMP)' as may be revised from time to time and also with any similar guidance which may be issued for other high risk areas.
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(ii) Monitor daily guidance and updates provided by The Maritime Security Centre – Horn of Africa (MSCHOA) website (www.mschoa.org ) as may be revised from time to time and advise the Vessel accordingly.
(iii) Comply with the Managers' guidelines for 'Transiting off the coast of Somalia, the Arabian Sea, Gulf of Aden and Red Sea' as may be revised from time to time and also with any similar guidance which may be issued for other high risk areas . The Managers' guidelines set out their policy of full compliance with BMP and additional guidance and information on Self Protection Measures (SPM's) and Citadels or Safe Areas. The Owners will be provided with a copy of the guidelines and costs for SPM's will be included in the Vessel budget.
(iv) Where appropriate, ensure the Vessel follows the International Recommended Transit Corridor (IRTC), using the services of an escorted convoy if available or joining a group transit if not.
(v) Monitor routing recommendations for transiting high risk areas as provided by charterers and insurers and review the same as part of the risk assessment carried out for the transit concerned.
(vi) Provide sufficient Self Protection Measures (SPM) appropriate to the vessel type, size and speed with a view to protecting the Crew as far as possible in the event of an attack. To be determined by the risk assessment required by BMP for the transit concerned and before entering the high risk area.
(vii) Provide training for the Crew in BMP prior to transiting any high risk area.
4. Other Services
4.1 Subject to the terms and conditions herein provided, during the period of this Agreement the Managers shall carry out, as agents for and on behalf of the Owners, such Other Services as shall have been indicated in Part III.
4.2 Other Services shall be provided in accordance with the terms of the Appendices contained in Part III.
5. Managers' Obligations
5.1 The Managers undertake to use their best endeavours to provide the Basic Services, the Other Services and the Management Services as agents for and on behalf of the Owners in accordance with sound ship management practice and to protect and promote the interests of the Owners in all matters relating to the provision of Management Services provided however that the Managers in the performance of Management Services shall be entitled to have regard to their overall responsibility in relation to all vessels which may from time to time be entrusted to their management and in particular, but without prejudice to the generality of the foregoing, the Managers shall be entitled to allocate available supplies, manpower and services in such manner as in the prevailing circumstances the Managers in their reasonable discretion consider to be fair and reasonable.
5.2 The Managers shall procure that the requirements of the law of the flag of the Vessel are satisfied and they shall be deemed to be "the Company" as defined by the ISM Code, assuming the responsibility for the operation of the Vessel and taking over the duties and responsibilities imposed by the ISM Code and by the ISPS Code.
5.3 The Managers undertake the responsibility to cooperate fully with the Owner and/or any other third party audit firm the Owner chooses with regard to the establishment (design) and the annual testing of the internal controls followed by the Manager relating to the operations performed during providing the services described herein to the Owners (provision of Type II SSAE16 report included).
6. Owners' Obligations
6.1 The Owners shall pay all sums due to the Managers punctually in accordance with the terms of this Agreement. Time shall be of the essence in respect of the payment of all such sums.
6.2 The Owners shall report (or where the Owners are not the registered owners of the Vessel procure that the registered owners report) to the flag state administration the details of the Managers as the Company as required to comply with the ISM Code.
6.3 The Owners shall procure that throughout the period of this Agreement the Vessel will be insured at the Owners' expense for not less than sound market value or entered for full gross tonnage, as the case may be, for:
(i) usual hull and machinery risks (including but not limited to Crew negligence) and excess liabilities;
(ii) protection and indemnity risks (including but not limited to pollution risks, diversion expenses and Crew risks);
(iii) freight, defense and demurrage;
(iv) war risks (including but not limited to blocking and trapping, protection and indemnity, terrorism and Crew risks); and
(v) in accordance with MLC, establish insurance to compensate Crew, and/or any officers or
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ratings supplied by the Owners or on their behalf, for monetary loss that they may incur as a result of the failure of a recruitment and placement service or Owners under the employment agreement, to meet its obligations to them; and
(vi) such other optional insurances as may be agreed by the Owners (such as piracy, kidnap and ransom, loss of hire)
in accordance with the best practice of prudent owners of vessels of a similar type to the Vessel, with sound and reputable insurance companies underwriters or associations (provided that, protection and indemnity risks must be placed with a member of the International Group of P&I Clubs) ("the Owners' Insurances").
6.4 The Owners shall procure that all premiums and calls on the Owners' Insurances are paid by their due date and that the Owners' Insurances name the Managers and any additional party designated by the Managers as a joint assured for protection and indemnity risks (including pollution risks) and a named assured on all other policies, with the benefit of full cover. The Owners shall, if applicable, provide the Managers with written evidence thereof to the reasonable satisfaction of the Managers on or prior to the Date of Commencement and/or on the date on which the Managers notify the Owners of the appointment of any additional party and within seven (7) days of each renewal date. The Owners shall provide Managers with an appropriate certificate of insurance covering any and all liabilities under the MLC   including but not limited to financial security in accordance with regulation 2.5.
6.5 As between the Owners and the Managers, the Managers shall not be responsible for paying any premiums or calls arising in connection with such insurances. On termination of this Agreement (howsoever occasioned) or where the Owners make a change in the P&I Club in which the Vessel is entered, the Owners shall procure that the Managers and any additional party designated by the Managers as a joint or named assured shall cease to be a joint or named assured and that they are released from and/or secured for any and all liability for premiums and calls that may arise in relation to the period of this Agreement. For the avoidance of doubt, it is agreed that the Owners shall be liable for all deductibles applying to any insurance policy.
6.6 Owners are responsible for the payment of any tonnage tax applicable at the country where this agreement will be officially registered.
6.7 The Owners are responsible to maintain this management agreement for a minimum period of three (3) months.
7. Documentation
7.1 On or prior to the Date of Commencement the Owners will deliver to the Managers:
(i)                      copies of the Vessel's Certificate of Registry,
(ii)                   copies of all the Vessel's trading and classification certificates,
(iii)                    a copy of the Owners' certificate of incorporation,
(iv)                    full details of any resident registered agent for the registered owner of the Vessel,
(v)                    if applicable, a copy of the bareboat charterparty pursuant to which the Owners are disponent owners of the Vessel,
(vi)                    in the case of a new vessel, the Owners will deliver a copy of the Building Contract and specification, and in the case of a second hand vessel, a copy of the Memorandum of Agreement in terms of which the Owners acquired the Vessel. The Owners shall be entitled to delete any confidential information (such as price) from the Building Contract or Memorandum of Agreement,
(vii)           if the Owners are not the registered owners or the bareboat charterer of the Vessel, in addition to the above, evidence satisfactory to the Managers of their beneficial interest in the Vessel and of their authorisation from the registered owners to enter into this Agreement,
(viii)          the name and address of the bank through which the Owners will pay funds due under this Agreement.
In any event, the Managers reserve the right to request evidence satisfactory to them that the Owners are in goodstanding and that the person signing this Agreement on their behalf is duly authorized to do so.
7.2 The Owners will on request provide the Managers with full details, in writing, of the registered Owners.
7.3 The Owners shall be obliged to obtain any required guarantee, bond or other security including, without limitation, the SCAC code and International Carrier Bond as required in order to access the US Bureau of Customs and Border Protection automated manifest system, as required by 68 Fed Reg. 68139 and as amended, and USCG Certificate of Financial Responsibility for water pollution. The Owners shall also be obliged to obtain any permits, licences or the like required to be obtained by an operator of a vessel including, without limitation, the US EPA vessel general permit.
7.4 At the request of the Owners, the Managers will promptly deliver a duly executed technical
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manager's undertaking and subordination to the Owners' lenders' rights. The Managers further agree that they will cooperate with the Owners' lenders in providing such undertaking and subordination letter and any other further documentation which may be required by the Owners' lenders.
8. Management Fee
8.1 The Owners shall pay to the Managers a fee in the amounts stated in the Fee Schedule in respect of the Basic Services and Other Services which shall be payable by equal monthly installments, the first installment being payable on the Commencement of this Agreement and the payment of the agreed monthly budgeted amounts fifteen (15) days prior to the purchase of the Vessel including payment of the agreed pre-delivery budget and one (1) month fee applicable for the pre-delivery work in respect of the vessel and subsequent installments being payable monthly in advance and fees for Other Services (if applicable) shall be paid at the rates and times specified in the Fee Schedule.
8.2 If the Managers' superintendents or other staff spend more than 30 days onboard the Vessel in any calendar year but excluding the dry-docking period of the vessel (or pro   rata for part of a calendar year) such days in excess of 20 on board the Vessel shall be charged at the rate of US$800 per man per day.
8.3 Where a charterers vetting inspection may be required and a pre-inspection is requested, the costs of such additional services shall be charged to the Vessel's account.
8.4 If the Vessel is placed on time charter, any costs incurred in complying with charterers requirements (including, but not limited to, additional reporting requirements and visits to the charterers) will be paid by the Owners.
8.5 The Managers shall, at no extra cost to the Owners, provide their own office accommodation, office staff and office stationery. The Owners shall reimburse the Managers for all expenses properly incurred under the terms of this Agreement on behalf of the Owners, including, without prejudice to the foregoing generality, postage and communication expenses (which the Managers shall allocate among all vessels managed by them on a basis which the Managers consider to be fair and reasonable having regard to the trade of the vessels, the nationality of the Crews and other relevant factors), Crew Support Costs (as included in the Vessel's running costs), vessel documentation, administrative expenses of the SOPEP and SSP, travelling expenses and other out of pocket expenses properly and reasonably incurred by the Managers in pursuance of the Management Services. All the above costs will be incurred by the Managers, provided they have been approved by the Owners.
8.6 In the event of the termination of this Agreement on the completion of the two (2) months minimum period the fees payable to the Managers according to the provisions of Clause 8.1 shall, save as aftermentioned, be paid for a further period of two (2) calendar months from the effective date of termination. After that minimum period of the Agreement there will be only one (1) month fees applicable upon termination subject to agreement that the total value of management fees paid will be at least equivalent to four (4) months.
8.7 Fees payable to the Managers will be reviewed annually and shall be adjusted as a minimum by reference to the retail price index relevant to the domicile of the Managers. Where Management Services are wholly or partly provided by third parties, the fees therefor shall be adjusted immediately to take account of increases in the cost of such services. The Managers will, however, use all reasonable endeavours in negotiations with such third parties to minimise such increases.
8.8 All fees are exclusive of Value Added Taxes, if any, or other applicable taxes.
8.9 Save as otherwise provided in this Agreement, all discounts, rebates and commissions obtained by the Managers in the course of the management of the Vessel shall be credited to the Owners.
8.10 If as a result of collision, accident, emergency, or any other extraordinary circumstances, the Managers' workload is increased beyond that which the parties could reasonably have anticipated, the Managers shall be entitled to reasonable additional remuneration having regard to the nature of the incident, the personnel and resources of the Managers deployed, and all other relevant circumstances including insurance recoveries.
8.11 If the Owners decide to lay-up the Vessel and such lay-up lasts for more than two (2) months, an appropriate reduction of the management fee for the period exceeding the two (2) months until the Owners give written notice to remobilize the Vessel, shall be mutually agreed between the parties.
9. Payments and Management of Funds
9.1 All sums paid to the Managers by or on behalf of the Owners and all moneys collected by the Managers under the terms of this Agreement (other than fees payable by the Owners to the Managers) shall be held to the credit of the Owners in a separate bank account or accounts
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which shall be operated by the Managers. The Owners agree to provide to the Managers all information and documentation reasonably required to comply with banking "know your customer" procedures.
9.2 Where any sums howsoever arising and whether in respect of fees, budgeted expenditure, non-budgeted expenditure, other liabilities (present, future, liquidated or unliquidated) or expenses are owed to the Managers in connection with the Vessel, the Managers shall be entitled but not obliged at any time or times to apply any sums standing to the credit of the accounts referred to in Clause 9.1 to settle such sums but shall in any event remain payable by the Owners to the Managers on demand.
9.3 On or prior to the Date of Commencement the Owners shall provide to the Managers an amount equivalent to the prorated budgeted days' expenditure from the Date of Commencement to the end of the first month in management. In addition all pre-delivery expenses are to be funded promptly by the Owners on request from the Managers. The Owners shall provide an amount equivalent to 1/12 of the annual budget for the first full month on or prior to the 1 st day of the first full month of the management period. In subsequent months the Managers shall request amounts for the total anticipated monthly expenditure as laid out in clause 9.6.
9.4 On or prior to the Date of Commencement the Owners shall provide to the Managers a sum of US$7,500, which shall be available to the Managers in their sole discretion for payment of any sum due under the terms of this Agreement, which sum will be held in the Manager's bank account ("the Float"). The Owners agree that on termination of this Agreement the Managers shall be entitled to retain all or part of the Float in payment of any sums then outstanding under the terms of this Agreement and, subject thereto, the Managers shall reimburse the balance of the Float to the Owners within two (2) months after the termination of this agreement.
9.5 The Owners agree that on termination of this agreement payment of all sums outstanding under the terms of the agreement are to be made in advance of the Vessel leaving management. The sum will include without prejudice to the generality of the foregoing, any amounts due to be paid to suppliers and other third parties (as evidenced, in the absence of manifest error, by an accounts payable listing produced by the Managers)   and any outstanding accruals for items or services invoiced or delivered. The Owners irrevocably undertake to pay forthwith on request from the Managers any other sums which become due after the effective date of termination, but have been incurred during the prosecution of this Agreement.
9.6 The Managers shall each month request (by letter, telex, fax or e-mail) from the Owners the funds required to run the Vessel for the ensuing month. Such request will be for the total of the anticipated monthly expenditure, including, without prejudice to the generality of the foregoing, any sums due to be paid to suppliers and other third parties in the ensuing month (as conclusively evidenced, in the absence of manifest error, by an accounts payable listing produced by the Managers) and any outstanding accruals for items or services invoiced or delivered. In addition, the Owners shall provide the Managers upon request with any funds which the Managers may reasonably request to cover any unbudgeted, unexpected, occasional or extraordinary item of expenditure. All such funds shall be received by the Managers within five (5) days after the receipt of such requests and shall be held to the credit of the Owners in the account(s) referred to in Clause 9.1. The Managers shall be entitled to allocate such funds in such manner as the Managers reasonably determine, and it shall not be open to the Owners to direct the Managers otherwise and under no circumstances shall any funds received be held on trust by the Managers for any specific purpose. In case there is any surplus of funds, same will be applied on the quarterly budget.
9.7 Notwithstanding anything contained herein, the Managers shall in no circumstances be required to use or commit their own funds to finance the provision of the Management Services and all payments due shall be made punctually to the Managers (and not any third party) in accordance with the terms of this Agreement in full without any deduction whatsoever.
9.8 In addition to the funds referred to above the Owners shall pay and/or reimburse the Managers in respect of all expenses incurred prior to the Date of Commencement including, but not limited to, riding Crew wages, initial Crew movements, Crew standby expenses, communication and liaison expenses and ITF welfare contributions.
10. Managers' Right to Sub-Contract
10.1 The Managers shall be entitled to procure performance of the Managers' obligations hereunder by their parent, subsidiary or associated companies or (in the case of Other Services) third parties (hereinafter collectively called the "Sub-Managers") in accordance with the following provisions of this Clause 10.1, provided that the Owners have given their prior written consent:
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(i) any such performance of all or any of the Managers' obligations by the Sub-Managers shall be and constitute full and sufficient performance by the Managers of their obligations hereunder;
(ii) the Owners hereby agree with the Managers that insofar as the Sub-Managers perform the obligations of the Managers the Sub-Managers shall be entitled to the benefits of the provisions of Clause 11; and
(iii) any performance of the Managers' obligations by the Sub-Managers shall be without prejudice to the rights of the Owners hereunder for any failure by the Managers in performance of the Managers' duties and obligations hereunder and notwithstanding performance by the Sub-Managers the Managers shall remain responsible to the Owners for performance of their obligations hereunder.
10.2 The provisions of Clause 10.1 shall remain in force notwithstanding termination of this Agreement.
11. Responsibilities
11.1 Force Majeure
11.1.1 Neither the Owners nor the Managers shall be liable for any loss or damage or total or partial failure to perform this Agreement (other than a failure to perform an obligation to pay money) caused wholly or partly by any circumstance or matter beyond the reasonable control of the relevant party, as the case may be, including (without limiting the generality of the foregoing) acts of God, acts of governmental authorities, fires, strikes, floods, epidemics, quarantine restrictions, wars, insurrections, riots, violent demonstrations, criminal offences (other than criminal offences attributable to each Party's employees, agents or sub-contractors), acts and omissions of civil or military authority or of usurped power, requisition or hire by any governmental or other competent authority, embargoes.
11.1.2 Where a party seeks to rely upon a force majeure event as described in Clause 11.1.1 it will advise the other party of the force majeure event at the earliest opportunity and also advise that party of the likely duration of such force majeure situation.
11.2 Liability to Owners
(i) Without prejudice to Clause 11.1, the Managers shall be under no liability whatsoever to the Owners for any loss, damage, delay or expense of whatsoever nature, whether direct or indirect, (including but not limited to loss of profit arising out of or in connection with detention of or delay to the Vessel) and howsoever arising in the course of performance of the Management Services unless same is proved to have resulted solely from the negligence, gross negligence or wilful default of the Managers or their employees or agents, or sub-contractors employed by them in connection with the Vessel, in which case (save where loss, damage, delay or expense has resulted from the Managers' personal act or omission committed with the intent to cause same or recklessly and with knowledge that such loss, damage, delay or expense would probably result) the Managers' liability for each incident or series of incidents giving rise to a claim or claims shall never exceed a total of ten times the annual management fee payable hereunder for Basic Services.
(ii) Notwithstanding anything that may appear to the contrary in this Agreement, the Managers shall not be responsible for any of the actions of the Crew even if such actions are negligent, grossly negligent or wilful, except only to the extent that they are shown to have resulted from a failure to discharge their obligations under Clause 3.1 in which case their liability shall be limited in accordance with the terms of this Clause 11.
11.3 Indemnity - General
Except to the extent and solely for the amount therein set out that the Managers would be liable under Clause 11.2, the Owners hereby undertake to keep the Managers and their employees, agents and sub-contractors indemnified and to hold them harmless against all actions, proceedings, claims, demands or liabilities whatsoever or howsoever arising out of or in connection with the performance of this Agreement, including, but not limited to, any and all liability arising under the MLC, and against and in respect of all costs, loss, damages and expenses (including legal costs and expenses on a full indemnity basis) which the Managers may suffer or incur (either directly or indirectly) in the course of the performance of this Agreement.
11.4 Indemnity - tax
Without prejudice to the general indemnity set out in Clause 11.3, the Owners hereby undertake to keep the Managers, their employees, agents and sub-contractors indemnified and to hold them harmless against all taxes, imposts and duties levied by any government as a result of the trading
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or other activities of the Owners or the Vessel and that whether or not such taxes, imposts and duties are levied on the Owners or the Managers.
11.5 "Himalaya"
Subject to any provision of the Agreement to the contrary, it is hereby expressly agreed that no employee or agent of the Managers (including every sub-contractor from time to time employed by the Managers and the employees of such sub-contractors) shall in any circumstances whatsoever be under any liability whatsoever to the Owners for any loss, damage or delay of whatsoever kind arising or resulting directly or indirectly from any act neglect or default on his part while acting in the course of or in connection with his employment and, without prejudice to the generality of the foregoing provisions in this Clause, every exemption, limitation, condition and liberty herein contained and every right, exemption from liability defence and immunity of whatsoever nature applicable to the Managers or to which the Managers are entitled hereunder shall also be available and shall extend to protect every such employee or agent of the Managers acting as aforesaid and for the purpose of all the foregoing provisions of this clause 11 the Managers are or shall be deemed to be acting as agent or trustee on behalf of and for the benefit of all persons who are or might be their servants or agents from time to time (including sub-contractors as aforesaid) and all such persons shall to this extent be or be deemed to be parties to this Agreement.
11.6 The provisions of Clause 11 shall remain in force notwithstanding termination of this Agreement.
12. Liens
12.1 The Owners hereby create a charge and equitable lien over the Vessel and Fleet in favour of the Managers in order to secure any sums due to the Managers by virtue of this Agreement. Such charge and or equitable lien shall be considered as a "Maritime Claim" as prescribed in the International Convention Relating to the Arrest of Sea-Going Ships, Brussels May 10 1952 and any amendment thereto or substitution thereof, and the Owners recognise and accept that the Vessel, or any vessel within the Fleet, therefore can be arrested for any sums due to the Managers by virtue of this Agreement. For the purposes of the Supreme Court Act 1981, or equivalent legislation in other jurisdictions, this Agreement shall be deemed a supply contract in respect of goods and materials supplied to the Vessel for her operation and maintenance, and neither party hereto shall take issue and/or dispute either the right of lien or charge, or the corresponding right of arrest.
12.2 The Owners hereby grant the Managers a lien upon any and all cargoes, bunkers, hire, sub-hire, all freights, sub-freights relating to the Vessel's employment, or employment of any vessel within the Fleet, for any sums due to the Managers under this Agreement.
13. Claims/Disputes
13.1 At the request of the Owners, the Managers shall handle and settle all claims arising out of the Management Services hereunder and keep the Owners informed regarding any incident of which the Managers become aware which gives or may give rise to claims or disputes involving third parties.
13.2 The Managers shall, as instructed by the Owners, bring or defend actions, suits or proceedings in connection with matters entrusted to the Managers according to this Agreement.
13.3 The Managers in cooperation with the Owners shall have power to obtain legal or technical or other outside expert advice in relation to the handling and settlement of claims and disputes or all other matters affecting the interests of the Owners in respect of the Vessel.
13.4 The Owners shall arrange for the provision of any necessary guarantee bond or other security.
13.5 The Owners shall pay to the Managers a fee for time spent by the Managers in carrying out their obligations under Clause 13 and such fee shall be mutually agreed by the Owners and the Managers (such fee to not exceed the rate of US$800 per man per day). In addition any costs incurred by the Managers in carrying out their obligations according to Clause 13 shall be reimbursed by the Owners.
13.6 The Owners agree to the use of MTI Network for crisis management response and agree to pay any fees additional to the annual retainer of MTI Network (as included in the budget) which may be incurred.
14. Auditing, Records
14.1 The Managers shall at all times maintain and keep true and correct accounts and shall make the same available at the Managers' offices for inspection and auditing by the Owners at such times as may be mutually agreed. The Owners agree that the Managers shall be entitled to charge for their reasonable costs and expenses should the Owners require hard copies of supplier invoices and related documentation.
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14.2 The Managers shall be entitled to electronically archive all of the Vessels' records and arrange safe storage of the same, the costs being included in the Vessel's running costs.
14.3 All accounting and other records relating the Vessel will be retained by the Managers for a period of two (2) years after the date of termination, for whatever reason, of this Agreement, and thereafter shall be destroyed or, if electronically archived, expunged unless the Owners request the Managers to deliver such records to them at the Owners' expense.
14.4 The Managers may request and the Owners shall, in a timely manner, make available all documentation, information and records reasonably required by the Managers to enable them to perform the Management Services.
15. Inspection of Vessel
The Owners shall have the right at any time to inspect the Vessel for any reason they consider necessary. The Owners will, where practicable, give reasonable notice to the Managers of their intention to visit the Vessel. After such inspection should Owners advise Mangers of reasonable comments about the Vessel's condition and the Crew's performance, Managers undertake to take necessary rectifying actions at the Owners expense.
16. Compliance with Laws and Regulations
16.1 The parties will not do or permit anything to be done which might cause any breach or infringement of the laws and regulations of the country of registry of the Vessel, and of the places where she trades, provided always that the Managers' obligations under this Clause will only relate to matters which the Managers are in fact capable of fulfilling and on the understanding that the Managers receive all necessary co-operation, information and funding from the Owners.
16.2 All intended carriage, trade or voyages must be fully compliant with relevant international sanctions and prohibitions. Managers, Crew and Owners accept such requirement as a condition of this Agreement entitling the Managers to terminate the Agreement should there be a breach of international sanctions and prohibitions. The Owners shall indemnify and hold harmless the Managers, their employees, agents and sub-contractors in respect of any consequence that may arise from the Vessel being arrested or detained, and should the Vessel not then be capable of immediate release, as a result of sanctions or prohibitions affecting the Owners' banks and/or insurers.
17. Duration of the Agreement
17.1 Termination by Notice
This Agreement shall come into effect on the Date of Commencement for a minimum period of two (2) months and shall continue thereafter until terminated by either party giving to the other notice in writing, in which event this Agreement shall, subject as aftermentioned terminate on the expiry of a period of one (1) month from the date upon which such notice is received. Where the Vessel is not at a convenient port or place on the expiry of such period, this Agreement shall terminate on the subsequent arrival of the Vessel at a convenient port or place.
17.2 Termination by default - Owners
(i) The Managers shall be entitled to terminate the Agreement with immediate effect by notice in writing if any moneys requested by the Managers from the Owners, shall not have been received in the Managers' nominated account within fifteen (15) calendar days of payment having been requested in writing by the Managers or if the Owners fail to comply to the reasonable satisfaction of the Managers with the requirements of clauses 6.3, 6.4 and 6.5 or if the Vessel is repossessed by a mortgagee.
(ii) If the Owners
(a) otherwise fail materially to meet their obligations hereunder for reasons within their control, or
(b) proceed with employment of or continue to employ the Vessel in the carriage of contraband, blockade running or in an unlawful and/or sanctionable trade, or on a voyage or in a manner which, in the opinion of the Managers, is unduly hazardous or improper, or potentially unlawful and/or sanctionable or
(c) fail to comply with any recommendation of the Managers which the Managers consider to be reasonable and non-compliance with which may affect the Managers' reputation or its obligations under the ISM Code or any other applicable laws or regulations
then the Managers may give written notice to the Owners specifying the default and requiring them to remedy it. In the event that the Owners fail to remedy such default (in the case of (a) above, if remediable) within a reasonable time to the reasonable satisfaction of the Managers, the Managers shall be entitled to
18
terminate this Agreement with immediate effect by notice in writing.
17.3 Termination by Default - Managers
If the Managers fail materially to meet their obligations under this Agreement for reasons within the control of the Managers, the Owners may give written notice to the Managers specifying the default and requiring them to remedy it as soon as practically possible. In the event that the Managers fail to remedy such default within a reasonable period of time but in any case latest within fifteen (15) days from the date of the Owners' notice, if remediable, to the reasonable satisfaction of the Owners, the Owners shall be entitled to terminate this Agreement with immediate effect by notice in writing.
17.4 Liquidation
The Parties to this Agreement shall be entitled to terminate this Agreement forthwith in the event of an order being made or resolution passed for the winding up, dissolution, liquidation or bankruptcy of the Owners of the Vessel (otherwise than for the purpose of reconstruction or amalgamation) or the Managers or if a receiver or similar officer is appointed to the Owners or the Managers or if either Party ceases to carry on business or make any special arrangement or composition with their creditors or if the Owners suspend payment under this Agreement.
17.5 Extraordinary Termination
This Agreement shall be deemed to be terminated in the case of the sale of the Vessel or its being bareboat chartered, if applicable and unless otherwise agreed, when the bareboat charter comes to an end or if the Vessel becomes a total loss or is declared as a constructive or compromised or arranged total loss or is requisitioned.  Notwithstanding such deemed termination, fees shall be paid in accordance with the provisions of Clause 8.6.
17.6 For the purpose of sub-clause 17.5 hereof:
(i) the date upon which the Vessel is to be treated as having been sold or otherwise disposed of shall be the date on which the registered owners cease to be registered as owners of the Vessel;
(ii) the Vessel shall not be deemed to be lost until either she has become an actual total loss or agreement has been reached with her Underwriters in respect of her constructive, compromised or arranged total loss or if such agreement with her underwriters is not reached it is adjudged by a competent tribunal that a constructive loss of the Vessel has occurred or a Notice of Abandonment is issued to underwriters.
17.7 The termination of this Agreement shall be without prejudice to all rights accrued due between the parties prior to the date of termination.
17.8 All outstanding fees and other sums payable by the Owners require to be paid in full on or prior to termination, for whatever reason, of this Agreement. Save where the Agreement is terminated by the Owners in accordance with Clause 17.3, the Managers shall be paid fees in accordance with Clause 8.6.The Owners shall also pay on demand Severance Costs together with repatriation costs and expenses.
18. Confidentiality
18.1 As between the Owners and the Managers, the Owners hereby agree and acknowledge that all title and property in and to the management manuals of the Managers and other written material of the Managers concerning management functions and activities is vested in the Managers and the Owners agree not to disclose the same to any third party and, on the termination of this Agreement, to return all such manuals and other material to the Managers. For the purposes of this Clause reference to "the Managers" includes the parent, subsidiary and associated companies of the Managers and any third parties providing Management Services.
19. Suspension of Services
If, at any time, the Owners have failed to pay the sums due and owing, as set out in Clause 9, or are in breach of any other terms of this Agreement, in addition to the Managers' rights pursuant to Clause 17 to terminate, the Managers shall, without prejudice to their liberty to terminate, be entitled to withhold/suspend the performance of any and all of their obligations hereunder (including, but not limited to, removal of Crew) and shall have no responsibility whatsoever for any consequences thereof, in respect of which the Owners hereby indemnify the Managers, and fees (as set out in the Fee Schedule) shall continue to accrue and any extra expenses resulting from such withholding shall be for the Owners' account.
20. Law and Arbitration
20.1 This Agreement shall be governed by English law and any dispute arising out of or in connection
19
with this Agreement shall be referred to arbitration in London in accordance with the Arbitration Act 1996 and any amendment thereto or substitution therefor.
20.2 The arbitration shall be conducted in accordance with the London Maritime Arbitrators' (LMAA) Terms current at the time when the arbitration is commenced.
20.3 Save as aftermentioned, the reference shall be to three arbitrators, one to be appointed by each party and the third by the two so appointed. A party wishing to refer a dispute to arbitration shall appoint its arbitrator and send notice of such appointment to the other party requiring the other party to appoint its arbitrator within fourteen (14) days of that notice and stating that it will appoint its arbitrator as sole arbitrator unless the other party appoints its own arbitrator and give notice that it has done so within the fourteen (14) days specified. If the other party does not appoint its own arbitrator and give notice that it has done so within the fourteen (14) days specified, the party referring the dispute to arbitration may, without the requirement of any further prior notice to the other party, appoint its arbitrator as sole arbitrator and shall advise the other party accordingly. The award of a sole arbitrator shall be as binding as if he had been appointed by agreement.
20.4 In cases where neither the claim nor any counterclaim exceeds the sum of US$50,000 (or such other sum as the parties may agree) the arbitration shall be conducted in accordance with the LMAA Small Claims Procedure current at the time when the arbitration proceedings are commenced.
20.5 Unless otherwise provided for in a separate agreement, the Owners hereby agree that any claim by any company providing services under clause 24 below shall, unless such company elects otherwise, be subject to English law and any dispute shall be referred to arbitration in accordance with the foregoing provisions of this clause 20.
20.6 Except to the extent provided for in clauses 10, 11 and 20.5 no third party shall have the right to enforce any term of this Agreement.
21. Amendments to Agreement
Any and all amendments will be agreed by all the parties in the Agreement and will be in writing.
22. Time Limit for Claims
Any and all liabilities of either party to the other arising under this Agreement or otherwise in relation to the Vessel (except in the case of fraud) shall be deemed to be waived and absolutely barred on the relevant date unless prior to the relevant date written particulars of any claim (giving details of the alleged breach in respect of which such claim is made and a preliminary statement of the amount claimed) have been intimated in writing by the claimant by the relevant date, and any such claim shall be deemed (if it has not previously been satisfied, settled or withdrawn) to have been withdrawn unless arbitration proceedings have been commenced under Clause 20 prior to the expiry of six (6) months after the relevant date. For the purposes of this Clause 22, the "relevant date" is one year after the date of termination, for whatever reason, of this Agreement.
23. Condition of Vessel
The Owners acknowledge that they are aware that the Managers are unable to confirm that the Vessel, its systems, equipment and machinery are free from defects, and agree that the Managers shall not in any circumstances be liable for any losses, costs, claims, liabilities and expenses which the Owners may suffer or incur resulting from pre-existing or latent deficiencies in the Vessel, its systems, equipment and machinery.
24. Use of Associated Companies
24.1 The Managers hereby disclose to the Owners that they may, in the course of performing Management Services, utilize the services of companies associated with the Managers. Without prejudice to the foregoing generality, associated companies of the Managers may be used in connection with inter   alia travel, insurance, port agency catering and consultancy services. Where companies associated with the Managers provide services in connection with the above or any other matters, such companies will be entitled to charge and retain for their own benefit usual remuneration for the provision of their services (whether in the form of commission or fees). The Managers will send a list of the Associated Companies to Owners on or prior to the Date of Commencement.
24.2 The Owners hereby consent to the arrangements set out in Clause 24.1.
25. Notices
25.1 Any notice or other communication under or in relation to this Agreement (a "Communication") may be sent by fax, registered or recorded mail, by personal delivery.
25.2 The addresses of the parties for service of a Communication shall be as stated in Boxes 5 and 6 respectively of Part I.
20

25.3 A Communication shall be deemed to have been delivered and shall take effect:
(i) in the case of a fax on the day of transmission; and
(iii) if delivered personally or sent by registered or recorded mail at the time of delivery.
26. Staff Loyalty
The Owners shall not and shall procure that their parent, subsidiary and associate companies shall not, without the written consent of the Managers, during the course of this Agreement or for a period of six (6) months following termination directly or indirectly offer any employment to any employee of the Managers engaged in providing Management Services or directly or indirectly induce or solicit any such person to take up employment with the Owners or any associated or affiliated company or use the services of any such person either independently or via a third party. In the event that the Managers agree to any of its employees accepting an offer of employment as aforesaid, the Owners shall pay to the Managers a sum equivalent to 25% of the new annual salary of that employee, payable within seven days of the date of the written agreement of the Managers. Such payment shall be construed as liquidated damages and not as a penalty, being the parties agreed reasonable estimate of the Managers' loss. This clause will not apply to any staff recruited or seconded specifically from Seanergy for the Seanergy vessels.
27. Entire Agreement
27.1 This Agreement constitutes the entire agreement and understanding between the parties with respect to the subject matter of this Agreement and (in relation to such subject matter) supersedes all prior discussions, understandings and agreements between the parties and all prior representations and expressions of opinion by the parties.
27.2 Each of the parties acknowledges that it is not relying on any statements, warranties, representations or understandings (whether negligently or innocently made) given or made by or on behalf of the other in relation to the subject matter hereof and that it shall have no rights or remedies with respect to such subject matter otherwise than under this Agreement. The only remedy available shall be for breach of contract under the terms of this Agreement. Nothing in this clause shall, however, operate to limit or exclude any liability for fraud.
28. Partial Validity
If any provision of this Agreement is or becomes or is held by any arbitrator or other competent body to be illegal, invalid or unenforceable in any respect under any law or jurisdiction, the provision shall be deemed to be amended to the extent necessary to avoid such illegality, invalidity or unenforceability, or, if such amendment is not possible, the provision shall be deemed to be deleted from this Agreement to the extent of such illegality, invalidity or unenforceability and the remaining provisions shall continue in full force and effect and shall not in any way be affected or impaired thereby.
29 . Non Waiver
No failure to exercise nor any delay in exercising any right, power, privilege or remedy under this Agreement shall in any way impair or affect the exercise thereof or operate as a waiver in whole or in part. No single or partial exercise of any right, power, privilege or remedy under this Agreement shall prevent any further or other exercise thereof or the exercise of any other right, power, privilege or remedy.

21

SHIP TECHNICAL MANAGEMENT AGREEMENT - PART III

OTHER SERVICES


APPENDIX 1* - Chartering (only applicable if not deleted - fee specified in Box 1 of the Fee Schedule)

The Managers shall, in accordance with the Owner's instructions, provide chartering services which term includes but is not limited to seeking and negotiating employment for the Vessel and the conclusion (including the execution thereof) of charterparties or other contracts relating to the employment of the Vessel.  Consent thereto in writing (including telex or fax) shall be obtained from the Owners before any contract in respect of the Vessel's employment is concluded.

The fee for the foregoing services shall be such sum as is set out in the Fee Schedule.

APPENDIX 2* - Post Fixture Services (only applicable if not deleted - fee specified in Box 2 of the Fee Schedule)

The Managers shall provide post fixture services which includes such of  the following functions as have been agreed with the Owners:-

 (i) liaising with Owners, brokers and charterers in the negotiation of the fixture;

(ii) provision of voyage and time charter estimates;

(iii) checking the cargo specification with the Master and cargo shippers to ensure the Vessel is capable of the safe carriage of the cargo;

(iv) instructing the master regarding the fixture and issuing voyage orders;

(v) arranging on and off hire surveys;

(vi) preparation of accounts and calculation of hire and freights and/or demurrage and despatch moneys due from or due to the charterers of the Vessel if required by the Owners; and

(vii) arrangement of the payment to the Owners of all hire and/or freight revenues or other moneys of whatsoever kind to which Owners may be entitled arising out of the employment of or otherwise in connection with the Vessel.

The fee for the foregoing services shall be such sum as is set out in the Fee Schedule.

APPENDIX 3* - Surveys or other Consultancy Services (only applicable if not deleted - fee specified in Box 3 of the Fee Schedule)

Any routine superficial inspections of ships afloat or other consultancy services will be undertaken on the following terms:-

1. Any report issued by the Managers is issued solely to the person to whom it is addressed and under no circumstances is any part of it to be issued or made available to any other party.

2. Inspections are limited to those parts of the Vessel, her machinery equipment or records (if made available) which are actually exposed, uncovered or readily accessible and the Managers are unable to report on any other part of the Vessel, her machinery or equipment and shall have no responsibilities whatsoever in such respect.

3. The Managers are unable to report on the ship's water tightness or integrity, the operational efficiency of its machinery or equipment, its suitability for any business or trade, or its stability characteristics.

4. The Managers shall in no circumstances be liable for any indirect, consequential or economic losses arising from any surveys of the Vessel or other consultancy services.

5. The Managers' maximum liability for any loss arising from surveys or consultancy services shall be 10 times the fee payable therefor.

6. Fees in respect of routine superficial inspections afloat shall be charged at the rate of US$850 per day or part thereof.  Fees for other consultancy services shall be agreed before work is commenced and unless otherwise agreed shall be payable on delivery of the report by the Managers.

APPENDIX 4* - Bunker Services   (only applicable if not deleted - fee specified in Box 4 of the Fee Schedule)
22


The Managers shall arrange for the provision of bunker fuel of the quality agreed with the Owners as required for the Vessel's trade.

The Managers shall be entitled to order bunker fuel through such brokers or suppliers as the Managers deem appropriate unless the Owners instruct the Managers to utilise a particular supplier which the Managers will be obliged to do provided that the Owners have made prior credit arrangements with such supplier.  The Owners shall comply with the terms of any credit arrangements made by the Managers on their behalf.

The Managers shall not in any circumstances have any liability for any bunkers which do not meet the required specification.   The Managers will , however, take such action, on behalf of the Owners, against the supplier of the bunkers, as is agreed with the Owners

The fee for the foregoing services shall be such sum as is set out in the Fee Schedule.


APPENDIX 5 - On Board Safety Audit and Safety Training   (only applicable if not deleted – at no extra cost)

1. The Managers shall arrange on board safety audit and training which will include the following functions:

(i) preparation and updating of specialist safety manuals not already included in the SMS;

(ii) periodic on board safety audit and on board safety training;

(iii) reporting to the Vessel (via the Managers) on information gained from visits to other vessels and industry forums.

2. The cost of the foregoing services shall be such sum as is set out in the Fee Schedule and shall be included in the budget agreed with the Owners.

3. The Managers have entered into sub-contracts with third parties to permit them to supply this service.

23


SHIP TECHNICAL MANAGEMENT AGREEMENT – PART IV

FEE SCHEDULE

M/V "[                   ]"



BASIC SERVICES (Clause 3 of Part II)
Amount
Frequency
     
Management Fee
   
Information System fees (Shipsure)
   
Planned maintenance - data base development fee (maximum of 30 chargeable days)
   
Crewing: Fixed Cost invoice – Crewing Costs (Part VI)
 
Other Crew costs (ITF, SEPF, PNO fee etc.)
 
Management Expenses:
   
     
     


24
SHIP TECHNICAL MANAGEMENT AGREEMENT - PART V

FLEET DETAILS


N/A
25
SHIP TECHNICAL MANAGEMENT AGREEMENT - PART VI

INITIAL BUDGET

Crew
The following Crew costs are charged at a fixed cost based on the agreed budget and subject to the Vessel's Crew complement and trading area remaining unchanged (Fixed Cost Invoice - Crewing Costs):
Recruitment costs to include:
Manning and mobilization fees
Medical costs
Training costs
Visa costs (excluding USA)
Domestic travel
Wage related union and social costs
Flag required licenses
MSO communications
Bank charges (in relation to allotments by the local manning offices i.e. Manila)
Working gear (2 Boiler suits and 1 pair of safety shoes)

If the Vessel's Crew complement and/or trading area are changed with the result that these costs increase the Owners agree that the fixed cost shall be revised as may be mutually agreed.
The Managers shall not be required to provide to the Owners any invoices or related documentation other than the Fixed Cost Invoice.

Other Crew costs are charged at cost including:
Crew Travel
Crew Wages
ITF fee, SEPF
PNO fee
Victualling at US$8.00 (excluding bottle of water)
D&A testing
Crew welfare
Mail for Crew
Newslink
Bank charges

Technical
Stores, Spares, Lub Oils, Surveys & Services, Chemicals, Repairs

Safety & Risk

Administration / Overheads
Registration Expenses, Management Fees, Management Expenses, Other Costs

OPERATING COSTS EXCL. DRYDOCKING

Drydocking
Dry docking Provision
Extraordinary M&R

OPERATING COSTS INCL. DRYDOCKING
26
Crew Compliment

1
Master
 
2
Chief Officer
 
3
2nd Officer
 
4
3rd Officer
 
5
Chief Engineer
 
6
2nd Engineer
 
7
3rd Engineer
 
8
4th Engineer
 
9
Electrical Officer
 
10
Bosun
 
11
AB
 
12
AB
 
13
AB
 
14
OS
 
15
OS
 
16
Oiler
 
17
Oiler
 
18
Oiler
 
19
Fitter
 
20
Wiper
 
21
Cook
 
22
Messman
 


27
2015 Budget (all figures in USD)





28
 
 
 
 

 
Exhibit 4.14
 
 
AMENDMENT NO. 1 TO COMMERCIAL MANAGEMENT AGREEMENT
 
This Amendment No. 1 (this " Amendment ") dated as of September 11 th , 2015, by and among SEANERGY MANAGEMENT CORP. , a company incorporated in Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Island, Majuro, Marshall Islands, MH 96960, for its own behalf and as agent for and on behalf of the Shipowning Subsidiaries (the " Company "), and FIDELITY MARINE INC. , a company incorporated in the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Island, Majuro Marshall Islands MH 96960 (hereinafter called the " Commercial Manager ") to the Commercial Management Agreement dated as of March 2, 2015, by and among the Company and the Commercial Manager (the " Agreement "). Capitalized terms used herein without definition shall have the respective meanings ascribed thereto (or incorporated by reference) in the Agreement, which also contains rules of usage that apply to terms defined therein and herein.
 
RECITAL

WHEREAS , the Company and the Commercial Manager desire to enter into this Amendment no. 1 for the purpose of amending and restating Clause 2 of the Agreement.
 
NOW, THEREFORE , in consideration of the foregoing recitals and the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
 
1.                    Amended and Restated Clause 2 of the Agreement
 
Clause 2 of the Agreement is hereby amended and restated as follows:
 
"
2 Appointment of Commercial Manager & Fees
 
2.1 In consideration of the premises and the mutual covenants herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:
 
The Company as principal and as agent for and on behalf of the Shipowning Entities hereby appoints the Commercial Manager as the agent of the Group for the provision of chartering services to the Group, which include seeking and negotiating employment for the Vessels in accordance with the Company's instructions and subject to the Company's prior approval the conclusion (including the execution) of charter parties or other contracts relating to the employment of the Vessels, as described in detail in this Agreement.
 
2.2 For services performed hereunder by the Commercial Manager, the Company shall pay, or procure that the relevant member of the Group pays, to the Commercial Manager a commission fee of half percent (0.5%) calculated on the collected gross hire/ freight/
 
 
demurrage payable when the relevant hire/ freight/ demurrage are collected. The management fee hereunder shall be paid to the Commercial Manager to an account of the Commercial Manager advised in writing to the Company. "
 
Except as provided hereinabove, the terms and conditions of the Agreement shall remain unchanged and in full force and effect.
 
IN WITNESS WHEREOF , the parties hereinabove have caused this Amendment No. 1 to the Agreement to be signed in duplicate by their respective and duly authorized representatives as of the date first written hereinabove.
 
SEANERGY MANAGEMENT
CORP.
 
By:  /s/ Stamatios Tsantanis
Name: Stamatios Tsantanis
Title:   Director
FIDELITY MARINE INC.
 
By:  /s/ Nikos Frantzeskakis
Name:  Nikos Frantzeskakis
Title:    Sole Director
 
FIDELITY MARINE INC
CHARTERES - BROKERS
27, LAODIKIS STR 16674 GLYFADA
ATHENS GREECE
Tel +30 2108985088  Fax: +30 2108985081
 
 

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
 
Exhibit 4.15
 
 
AMENDMENT NO. 2 TO COMMERCIAL MANAGEMENT AGREEMENT
 
This Amendment No. 2 (this " Amendment ") dated as of February 24 th , 2016, by and among SEANERGY MANAGEMENT CORP. , a company incorporated in Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Island, Majuro, Marshall Islands, MH 96960, for its own behalf and as agent for and on behalf of the Shipowning Affiliates (the " Company "), and FIDELITY MARINE INC. , a company incorporated in the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Island, Majuro Marshall Islands MH 96960 (hereinafter called the " Commercial Manager ") to the Commercial Management Agreement dated as of March 2, 2015, by and among the Company and the Commercial Manager (the " Agreement ") as amended by Amendment No. 1 dated as of September 11 th , 2015. Capitalized terms used herein without definition shall have the respective meanings ascribed thereto (or incorporated by reference) in the Agreement, which also contains rules of usage that apply to terms defined therein and herein.
 

 
RECITAL

WHEREAS , the Company and the Commercial Manager desire to enter into this Amendment No. 2 for the purpose of amending and restating Clause 3.1 and Clause 6.1(a)(i)(aa) of the Agreement.

WHEREAS , the Company and the Commercial Manager desire to enter into this Amendment No. 2 for the purpose of including Clause 6.4.
 
NOW, THEREFORE , in consideration of the foregoing recitals and the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
 
1.                     Amended and Restated Clause 3.1 of the Agreement
 
Clause 3.1 of the Agreement is hereby amended and restated as follows:
 
"
3.1              Subject to the terms and conditions provided herein during the period of this Agreement the Commercial Manager shall carry out the Management Services in respect of the Vessels as agent for and on behalf of the Shipowning Entities. The Commercial Manager (unless otherwise provided for herein) shall have authority to take such actions as it may from time to time in its discretion consider necessary to enable it to perform its obligations pursuant hereunder in accordance with sound ship management practices, provided the Company has given its approval."
 
 
2.                    Amended and Restated Clause 6.1(a)(i)(aa) of the Agreement
 
Clause 6.1(a)(i)(aa) of the Agreement is hereby amended and restated as follows:
 
"
6.1                 The Commercial Manager shall provide and/or procure the provision of the services specified hereunder in the name of the Shipowning Entities or otherwise on its behalf and do all things which may be expedient or necessary for the provision of said services or otherwise in relation to the commercial operation of the Vessels, such services as stated below:-
 
(a)              Commercial Management
 
(i) Employment of the Vessels
 
Seeking and negotiating employment of the Vessels in accordance with the Company's instructions.
 
(aa) Chartering
 
Providing chartering services which include, but are not limited to seeking, negotiating and the concluding (including the execution thereof) of charterparties and on behalf of the Shipowning Entity agreeing with the charterers (inter alia) on the itineraries and timetables of the Vessel during the charter period, charter hire and other monies payable to the Shipowning Entity and methods of payment thereof and any other terms and conditions in relation to the employment of the Vessel, provided that the Commercial Manager received the Company's prior approval."
 
3.                   Clause 6.4 of the Agreement
 
Clause 6.4 is hereby included as follows:
"
6.4               The Commercial Manager shall provide chartering services for Capesize vessels exclusively to the Company."
 
Except as provided hereinabove, the terms and conditions of the Agreement shall remain unchanged and in full force and effect.
 

IN WITNESS WHEREOF , the parties hereinabove have caused this Amendment No. 2 to the Agreement to be signed in duplicate by their respective and duly authorized representatives as of the date first written hereinabove.
 
 
 
SEANERGY MANAGEMENT CORP.
 
By:  /s/ Stamatios Tsantanis
Name: Stamatios Tsantanis
Title:   Director
FIDELITY MARINE INC.
 
By:  /s/ Nikos Frantzeskakis
Name:  Nikos Frantzeskakis
Title:    Sole Director
 
FIDELITY MARINE INC
CHARTERES - BROKERS
27, LAODIKIS STR 16674 GLYFADA
ATHENS GREECE
Tel +30 2108985088  Fax: +30 2108985081
 
 

 
Exhibit 4.17
Private & confidential

Dated: 23 rd December, 2015


ALPHA BANK A.E.
(as Lender)

-and-

LEADER SHIPPING CO.
 


FIRST SUPPLEMENTAL AGREEMENT
in relation to a Loan Agreement dated
6 th March, 2015
for a loan facility of (initially) US$8,750,000
 
 





Theo V. Sioufas & Co.
Law Offices
Piraeus


TABLE OF CONTENTS

HEADINGS

CLAUSE
 
PAGE
     
1.
Definitions
2
     
2.
Representations and warranties
2
     
3.
Agreement of the Lender
3
     
4.
Conditions
3
     
5.
Variations to the Principal Agreement.
4
     
6.
Continuance of Principal Agreement and the Security Documents
8
     
7.
Entire agreement and amendment
8
     
8.
Fees and expenses
8
     
9.
Miscellaneous
9
     
10.
Entire agreement and amendment; effect on Principal Agreement
9
     
11.
Applicable law and jurisdiction
9


THIS AGREEMENT (hereinafter called " this Agreement ") is made this 23 rd day of December, 2015
BETWEEN
(1) ALPHA BANK A.E., a banking société anonyme incorporated in and pursuant to the laws of the Hellenic Republic with its head office at 40 Stadiou Street, Athens GR 102 52, Greece, acting, except as otherwise herein provided through its office at 93 Akti Miaouli, Piraeus, Greece (the " Lende r", which expression shall include its successors and assigns);
(2) LEADER SHIPPING CO., a company duly incorporated and validly existing under the laws of the Republic of the Marshall Islands having its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960 (hereinafter called the " Borrower ", which expression shall include its successors)
IS SUPPLEMENTAL to a loan agreement dated 6 th March, 2015 made between (i) the Lender as lender, and (ii) the Borrower, as borrower, (the said loan agreement is hereinafter called the " Principal Agreement "), on the terms and conditions of which the Lender agreed to advance and has advanced to the Borrower a loan of up to United States Dollars Eight million seven hundred fifty thousand Dollars ($8,750,000) (the " Commitment "), for the purposes therein specified (the Principal Agreement as hereby amended and/or supplemented and as the same may hereinafter be amended and/or supplemented called the " Loan Agreement ").
WHEREAS:
(A) the Borrower hereby acknowledges and confirms that (a) the Lender has advanced to the Borrower, the full amount of the Commitment in the principal amount of United States Dollars Eight million seven hundred fifty thousand Dollars ($8,750,000) and (b) as the date hereof the principal amount of United States Dollars Eight million one hundred fifty thousand Dollars ( US$8,150,000 ) in respect of the Loan remains outstanding; and
(B) the Borrower has requested the Lender to grant its consent to (inter alia) the amendment of the liquidity covenant, the corporate leverage covenant and the EBIDTA covenant, provided in Clause 8 of the Principal Agreement and the Lender has agreed thereto conditionally upon terms that the Principal Agreement shall be amended in the manner hereinafter set out in Clause 5 of this Agreement.
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NOWTHEREFORE IT IS HEREBY AGREED AS FOLLOWS:
1. Definitions
1.1 Words and expressions defined in the Principal Agreement and not otherwise defined herein (including the Recitals hereto) shall have the same meanings when used in this Agreement.
1.2 In addition, in this Agreement the words and expressions specified below shall have the meanings attributed to them below:
" Effective Date " means the date hereof or such earlier or later date as the Lender may agree in writing upon which all the conditions contained in Clause 5 shall have been satisfied and this Agreement shall become effective; and
" Loan Agreement " means the Principal Agreement as hereby amended and as the same may from time to time be further amended and/or supplemented.
1.3 (a) 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, (b) clause headings are inserted for convenience of reference only and shall be ignored in construing this Agreement, (c) references to Clauses are to clauses of this Agreement save as may be otherwise expressly provided in this Agreement and (d) all capitalised terms used herein and not otherwise defined herein shall have the meanings ascribed to them in the Loan Agreement.
2. Representations and warranties
2.1 The Borrower hereby represents and warrants to the Lender as at the date hereof that the representations and warranties set forth in the Principal Agreement and the Security Documents (updated mutatis mutandis to the date of this Agreement) are (and will be on the Effective Date) true and correct as if all references therein to "this Agreement" were references to the Principal Agreement as amended and supplemented by this Agreement.
2.2 In addition to the above, the Borrower hereby represents and warrants to the Lender as at the date of this Agreement that:
a. the Borrower is duly formed, is validly existing and in good standing under the laws of the place of its incorporation has full power to carry on its business as it is now being conducted and to enter into and perform its obligations under the Principal Agreement and this Agreement and has complied with all statutory and other requirements relative to its business;
b. all necessary licences, consents and authorities, governmental or otherwise under this Agreement and the Principal Agreement have been obtained and, as of the date of this Agreement, no further consents or authorities are
2


necessary for the Borrower to enter into this Agreement or otherwise perform its obligations hereunder;
c. this Agreement constitutes the legal, valid and binding obligations of the Security Parties thereto enforceable in accordance with its terms;
d. the execution and delivery of, and the performance of the provisions of this Agreement does not, and will not contravene any applicable law or regulation existing at the date hereof or any contractual restriction binding on any of the Security Parties or its respective constitutional documents;
e. no action, suit or proceeding is pending or threatened against the Borrower and any other Security Party or their respective assets before any court, board of arbitration or administrative agency which could or might result in any material adverse change in the business or condition (financial or otherwise) of the Borrower or such other Security Party; and
f. neither the Borrower nor any other Security Party is and at the Effective Date will be in default under any agreement by which it/he is or will be at the Effective Date bound or in respect of any financial commitment, or obligation.
2.3 The representations and warranties of the Borrower in this Agreement shall survive the execution of this Agreement and shall be deemed to be repeated at the commencement of each Interest Period.
3. Agreement of the Lender
The Lender, relying upon each of the representations and warranties set out in Clause 2 hereby agrees with the Borrower, subject to and upon the terms and conditions of this Agreement and in particular, but without lin1itation, subject to the fulfilment of the conditions precedent set out in Clause 4 to consent to the rescheduling of the Loan and that the Principal Agreement be amended in the manner more particularly set out in Clause 5.
4. Conditions
4.1 The agreement of the Lender contained in Clause 3 shall be expressly subject to the fulfilment of the conditions set out in this Clause 4 and further subject to the condition that the Lender shall have received on or before the Effective Date in form and substance satisfactory to the Lender and its legal advisers:
a. a certificate of good standing or equivalent document issued by the competent authorities of the place of its incorporation in respect of the Borrower and the Guarantor;
 
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b. all documents evidencing any other necessary action or approvals or consents with respect to this Agreement, including, but not limited to, certified and duly legalised Refresh Certificates of Incumbency issued by any of the Directors of each of the Borrower and the Guarantor evidencing approval of this Agreement and authorising appropriate officers or attorneys to execute the same and to sign all notices required to be given under this Agreement on its behalf or other evidence of such approvals and authorisations as shall be acceptable to the Lender
c. all documents evidencing any other necessary action or approvals or consents with respect to this Agreement; and
d. such favourable legal opinions from lawyers acceptable to the Lender and its legal advisors as the Lender shall require.
5. Variations to the Principal Agreement
5.1 In consideration of the agreement of the Lender contained in Clause 3, the Borrower hereby agrees with the Lender that (subject to the satisfaction of the conditions precedent contained in Clause 4), the provisions of the Principal Agreement shall be varied and/or amended and/or supplemented as follows:
a. with effect as from the Effective Date, the following new definitions shall be added to Clause 1.2 ( Definitions ) of the Principal Agreement reading as follows:
" Financial First Semester Day " means, 30 June in any year;
" Financial Second Semester Day " means, 31 December in any year;
" Financial Semester Day " means each of the Financial First Semester Day and the Financial Second Semester Day on which the Corporate Leverage Ratio of' the Guarantor and the consolidated interest cover ratio for the Accounting Period (EBITDA to Net Interest Expense) shall be tested as provided in this Clause 8.6 (together, the " Financial Semester Days ");
" First Supplemental Agreement " means the First Supplemental Agreement dated 23 rd December, 2015 supplemental to this Agreement to be executed and made between (inter alia) the Borrower and the Lender whereby this Agreement shall be amended as therein provided.";
b. with effect as from the Effective Date, the following definitions shall be deleted and replaced to read as follows:
"" Group " means the Guarantor and its consolidated Subsidiaries (whether direct or indirect and including, but not limited to, the Borrower) from time to time during the Security Period and " member of the Group " shall be construed accordingly;
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" Guarantor's Debt Service " means in relation to any period means the liability of the Guarantor and its Subsidiaries for principal and interest payable in respect of any moneys borrowed or raised by the Guarantor and/or its Subsidiaries to pay during such period, excluding any shareholder loan;
c. with effect as from the Effective Date, paragraph (d) of Clause 8.6 (Additional Financial Covenants Compliance Certificate) of the Principal Agreement shall be deleted and shall be replaced by the following:
"(d) Compliance Certificate : ensure that, starting from the 30 th June, 2018 and for the remainder of the Security Period, at the end of each semester to be delivered to the Lender a Compliance Certificate in the form provided  in Schedule 3 of this Agreement, duly completed and supported by calculations setting out in reasonable detail the materials underling the statements made in  such  Compliance Certificate to be delivered to the Lender; such Compliance Certificate to be provided  as follows:  i) with respect to each Financial Year as soon as practicable but not later titan 120 days after the end of the financial period  to which it relates and (ii) with respect to each semester ending June of each Financial Year as soon as practicable but not later than 90 days after the end of such semester, and provided that the first Compliance Certificate to be delivered by the Borrower to the Lender will be with respect to the six month period ending 30 th June 2018"
d. with effect as from the Effective Date, paragraph (g) of Clause 8.1 (General) of the Principal Agreement shall be deleted and replaced to read as follows:
"(g) Financial Information: provide the Lender from time to time as the Lender may reasonably request with information on the financial conditions and operations of the Borrower and the Guarantor, as such information may be reasonably requested by the Lender and such information to be certified by an authorized signatory of the Borrower as to tl1eir correctness;"
e. with effect as from the Effective Date, paragraph (g) of Clause 8.6 (Additional Financial Covenants Compliance Certificate) of the Principal Agreement shall be deleted and shall be replaced by the following:
"(g) Compliance : The compliance of the Guarantor with the undertakings set out in Clause 8.6 shall be determined by the Lender in accordance with the Applicable Accounting Principles (and such determination shall, in the absence of manifest error, be conclusive on the Guarantor) on the basis of calculations made by the Lender by reference to the relevant Accounting Information delivered to the Lender pursuant to Clause B.1(e)."
f. with effect as from the Effective Date, the definitions "Interest Expense" and "EBITDA" as stipulated in Clause 8.6 (Additional Covenants ‑ Compliance Certificate) of the Principal Agreement shall deleted and replaced to read as follows:
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"" Net Interest Expense " in respect of an Accounting Period and a consolidated basis of the Guarantor means payments of interest made or due less any interest income earned or accrued pursuant to this Agreement in the previous period of six (6) or, as the case may be, twelve (12) months;
" EBITDA " in respect of an Accounting Period and on a consolidated basis of the Guarantor means the Earnings before interest, expenses and other financial charges, taxes, depreciation and amortization and non-recurring losses and gains in the previous period of six (6) months or, as the case may be, twelve (12) months;"
g. with effect as from the Effective Date, paragraph (j) ( Liquidity ) of Clause 8.1 of the Principal Agreement shall be deleted and shall be replaced by the following:
"(j) Liquidity: ensure that throughout the Security Period the Borrower shall maintain minimum free liquidity in free deposits with tile Lender in an amount equal to at the time Borrower's Debt Service for the next semester;"
h. with effect as from the Effective Date, paragraphs (a) ( Liquidity ), (b) ( Leverage ) and (c) ( EBIDTA ) of Clause 8.6 of the Principal Agreement and shall be deleted and shall be replaced by the following:
"(a) Liquidity : the Guarantor shall maintain minimum free liquidity in an amount equal to $500,000 per Fleet Vessel to be fully accumulated within a period of eighteen (18) months from 10 November, 2015 in free deposits;
(b) Leverage : the Corporate Leverage Ratio of the Guarantor will not be, at the end of any Accounting Period or at any other time, higher than 0.75:1.0, the compliance with such obligation to be tested on each Financial Semester Day starting from the 30 th June, 2018;
(c) EBITDA : the consolidated interest cover ratio for the Accounting Period (EBITDA to Net Interest Expense) shall not be lower than 2:1, the compliance with such obligation to be tested on each Financial Semester Day starting from the 30 th June, 2018;"
i. with effect as from the Effective Date, Schedule 3 of the Principal Agreement shall be deleted and replaced to read as follows:
"Schedule 3
Form of Compliance Certificate
(referred to in Clause 8.6(d))

 
To:
ALPHA BANK A.E.
   
93 Akti Miaouli,
   
Piraeus, Greece
   
(the " Lende r")
     
 
From:
LEADER SHIPPING CO.,
6

   
of the Marshall Islands
   
(the " Borrowe r")

Dated: [ · ], 20[ · ]

RE:              Loan Agreement dated [ · ] March, 2015 made between (1) the Borrower at1d (2) the Lender, in respect of al an facility of up to US$8,750,000 (the " Loan Agreement ").
Terms defined in the Loan Agreement shall have the same meaning when used herein.
I/We [ · ],[ · ] and [ · ] [each] being the Chief Financial Officer of each of the Borrower and SEANERGY MARITIME HOLDINGS CORP., of the Marshall Islands (the "Guarantor"), refer to Clause 8.6(d) of the Loan Agreement and hereby certify that, during the Accounting Period 01. [….].20[….] to 3... [...].20[…] and on the date hereof:
1. Financial Covenants:
(a) the Leverage Ratio has not been and at the date hereof is not higher than 0.75:1; and
(b) the consolidated interest cover ratio (EBITDA to Net Interest Expense) is not lower than 2:1;
(c) the Borrower maintains with the Lender minimum free liquidity in an amount not less than the Borrower's Debt Service of the next semester as free deposits; and
(d) the Guarantor shall maintain minimum free liquidity in an amount equal to $500,000 per Fleet Vessel to be fully accumulated within a period of eighteen (18) months from 10 November, 2015 in free deposits.
2. Default:
[No Default has occurred and is continuing]
or
[The following Default has occurred and in continuing: [provide details of Default]. [The following steps are being taken to remedy it: [provide details of steps being taken to remedy Default]].
We attach hereto the necessary documents supported by calculations setting out in reasonable detail the materials underlying the statements made in this Compliance Certificate.
Signed:-_____________
Name:[ ...............................]
Title: Chief Financial Officer"
5.2 With effect as from the Effective Date the definition " Security Documents " shall be deemed to include the Security Documents as amended and/or supplemented in pursuance to the terms hereof and any document or documents (including if the context requires the Loan Agreement) that may now or hereafter be executed as security for the repayment of the Loan, interest thereon and any other moneys payable by the Borrower under the Principal Agreement and the Security Documents (as herein defined) as well as for the performance by the Borrower and
7


the other Security Parties (as herein defined) of all obligations, covenants and agreements pursuant to the Principal Agreement, this Agreement and/or the Security Documents.
5.3 All references in the Principal Agreement to "this Agreement", "hereunder" and the like and in the Security Documents to the "Loan Agreement" shall be construed as references to the Principal Agreement as amended and/or supplemented by this Agreement.
6. Continuance of Principal Agreement and the Security Documents
6.1 Save for the alterations to the Principal Agreement, and the Security Documents made or to be made pursuant to this Agreement, and such further modifications (if any) thereto as may be necessary to make the same consistent with the terms of this Agreement, the Principal Agreement shall remain in full force and effect and the security constituted by the Security Documents shall continue to remain valid and enforceable.
7. Entire agreement and amendment
7.1 The Principal Agreement, the other Security Documents, and this Agreement represent the entire agreement among the parties hereto with respect to the subject matter hereof and supersede any prior expressions of intent or understanding with respect to this transaction and may be amended only by an instrument in writing executed by the parties to be bound or burdened thereby.
7.2 This Agreement is supplementary to and incorporated in the Principal Agreement, all terms and conditions whereof, including, but not limited to, provisions on payments, calculation of interest and Events of Default, shall apply to the performance and interpretation of this Agreement.
8. Fees and expenses
8.1 The Borrower agrees to pay to the Lender upon demand on a full indemnity basis and from time to time all costs, charges and expenses (including legal fees) incurred by the Lender in connection with the negotiation, preparation, execution and enforcement or attempted enforcement of this Agreement and any document executed pursuant thereto and/or in preserving or protecting or attempting to preserve or protect the security created hereunder and/or under the Security Documents.
8.2 The Borrower covenants and agrees to pay and discharge all stamp duties, registration and recording fees and charges and any other charges whatsoever and wheresoever payable or due in respect of this Agreement and/or any document executed pursuant hereto.
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9. Miscellaneous
9.1 The provisions of Clause 14.1 ( Assignment, Participation, Change of Lending Office ) and Clause 16.1 ( Notices ) of the Principal Agreement shall apply to this Agreement as if the same were set out herein in full.
10. Entire agreement and amendment: effect on Principal Agreement
10.1 Except to the extent that the Principal Agreement is expressly amended or supplemented by this Agreement, all terms and conditions of the Principal Agreement remain in full force and effect. This Agreement is supplementary to and incorporated in the Principal Agreement, all terms and conditions whereof, including, but not limited to, provisions on payments, calculation of interest and Events of Default, shall apply to the performance and interpretation of this Agreement.
10.2 The Principal Agreement, the other Security Documents, and this Agreement represent the entire agreement among the parties hereto with respect to the subject matter hereof and supersede any prior expressions of intent or understanding with respect to this transaction and may be amended only by an instrument in writing executed by the parties to be bound or burdened thereby.
11. Applicable law and jurisdiction
11.1 This Agreement and any non-contractual obligations arising out of or in relation to it shall be governed by and construed in accordance with English law and the provisions of Clause 17 ( Law and Jurisdiction ) of the Principal Agreement shall apply mutatis mutandis to this Agreement as if the same were set out herein in full.
11.2 No term of this Agreement is enforceable under the Contracts (Rights of Third Parties) Act 1999 by a person who is not a party to this Agreement.
IN WITNESS whereof the parties hereto have caused this Agreement to be duly executed the date first above written.
[INTENTIONALLY LEFT BLANK]
9


EXECUTION PAGE

SIGNED by
)
   
Mr. Stamatios Tsantanis
)
   
for and on behalf of
)
   
LEADER SHIPPING CO.,
)
 
/s/ Stamatios Tsantanis
of the Marshall Islands, in the presence of:
)
 
Attorney-in-fact
       
       
Witness:
/s/ Theodora Mitropetrou
     
Name:
Theodora Mitropetrou
     
Address:
16 G. Lambraki str.
     
 
Glyfada, Greece
     
Occupation:
Attorney-at-Law
     
         
         
SIGNED by Mr. Konstantinos Sotiriou and
)
 
/s/ Konstantinos Sotiriou
Mrs.Christina Aroni
)
 
Authorised Officer
for and on behalf of
)
   
ALPHA BANK A.E.,
)
 
/s/ Christina Aroni
in the presence of:
)
 
Authorised Officer
       
       
Witness:
/s/ Christos Magklams
     
Name:
Christos Magklams
     
Address:
13 Defteras Merarchias Street
     
 
Piraeus, Greece
     
Occupation:
Attorney-at-Law & Solicitor
     

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ACKNOWLEDGEMENT
We hereby confirm and acknowledge that we have read and understood the terms and conditions of the above First Supplemental Agreement and agree in all respects to the same and hereby confirm that, notwithstanding the variation to the Principal Agreement contained in Clause 5 of the above First Supplemental Agreement, the provisions of our corporate guarantee dated 17 th March, 2015 granted by us in favour of the Lender (the " Corporate Guarantee "), shall remain in full force and effect as guarantee of the obligations of the Borrower under the Principal Agreement, as amended by the above First Supplemental Agreement, and the Security Documents and in respect of all sums due to the Lender under the Principal Agreement (as so amended) and we shall remain liable under the Corporate Guarantee for all obligations and liabilities assumed by us thereunder.
Date: 23 rd December, 2015

   
/s/ Stamatios Tsantanis
 
STAMATIOS TSANTANIS
 
Attorney-in-fact
 
for and on behalf of
 
SEANERGY MARITIME HOLDINGS CORP.,
 
of the Marshall Islands
 
   
   






11
Exhibit 4.30

PURCHASE AGREEMENT


FOR


"GENIUS", "GLORIUS", "MAXIMUS", "ETERNUS",
 
"GENEROUS", "ASSOS STRIKER" & "MYSTIC STRIKER"
between
THE SELLERS LISTED ON SCHEDULE I
and
SEANERGY MARITIME HOLDINGS CORP.
dated as of
AUGUST 6, 2015

PURCHASE AGREEMENT
FOR "GENIUS", "GLORIUS", "MAXIMUS", "ETERNUS", "GENEROUS",
"ASSOS STRIKER", "MYSTIC STRIKER"
This Purchase Agreement for "GENIUS", "GLORIUS", "MAXIMUS", "ETERNUS", "GENEROUS", "ASSOS STRIKER", "MYSTIC STRIKER" (this " Agreement "), dated as of August 6, 2015, is entered into among the Vessel owners set forth on Schedule I attached hereto (collectively, " Sellers " and each " Seller ") and Seanergy Maritime Holdings Corp., a corporation formed under the laws of the Marshall Islands (" Purchaser ", together with the Sellers, the " Parties " and each a " Party ").
RECITALS
Sellers own the "GENIUS", "GLORIUS", "MAXIMUS", "ETERNUS", "GENEROUS", "ASSOS STRIKER", "MYSTIC STRIKER" (together, the " Vessels ") as set forth on Schedules I and II hereto.
Purchaser desires to purchase, and Sellers desire to sell, the Vessels en bloc upon the terms and subject to the satisfaction of the conditions set forth in this Agreement.
NOW, THEREFORE , in consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto wish to record in writing their existing agreement as follows:
ARTICLE I
Definitions
The following terms have the meanings specified or referred to in this Article I :
" Agreement " has the meaning set forth in the preamble.
" Business Day " means any day except Saturday, Sunday or any other day on which commercial banks located in New York, NY, United Kingdom, Germany, France or Greece are authorized or required by Law to be closed for business.
" Closing " has the meaning set forth in Section 2.04 .
" Closing Date " has the meaning set forth in Section 2.04 .
" Dollars" or "$ " means the lawful currency of the United States.
" Law " means any statute, law, ordinance, regulation, rule, code, order, constitution, treaty, common law, judgment, decree, other requirement or rule of law of any Governmental Authority.
"MOA" in relation to each Vessel means the NSF Memorandum of Agreement entered into on even date between the respective Seller, as seller and the relevant Purchaser's Nominated Party, as buyer of the Vessel, in respect of the sale by
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such Seller and the purchase by such Purchaser's Nominated Party of the Vessel and includes any and all addenda thereto (together, the " MOAs ");
" Person " means an individual, corporation, partnership, joint venture, limited liability company, Governmental Authority, unincorporated organization, trust, association or other entity.
" Purchase Price " has the meaning set forth in Section 2.02 .
" Purchaser " has the meaning set forth in the preamble.
" Purchaser's Nominated Party(ies) " means the Vessel buyer set forth on Schedule I attached hereto.
" Sellers " has the meaning set forth in the preamble.
ARTICLE II
Purchase and sale
Section 2.01                            Purchase and Sale. Subject to the terms and conditions set forth herein and the MOA entered into for the particular Vessel, at the Closing, Sellers shall deliver the Vessels to the Purchaser, and the Purchaser shall deliver to the Sellers the consideration specified in Section 2.02 .
Section 2.02                            Consideration. The aggregate consideration for the transfer of the Vessels is $183,367,198 only (excluding the 2015 drydocking costs of m.v "Eternus", m.v "Genius" and m.v. "Generous") and shall be delivered as set forth in the applicable MOA and listed in Schedule I , consisting of cash only. With respect to the dry dockings of m.v. "Eternus", m.v. "Genius" and m.v. "Generous", the Purchaser shall cover the invoiced expenses upon Closing of each relevant Vessel.
Section 2.03                            Sale en bloc . The parties acknowledge that this Agreement contemplates an en bloc sale of 7 Vessels and that the amount of the Consideration has been agreed to on this basis.  In case a MOA is terminated for any reason provided therein, then such Vessel shall be excluded from the en bloc sale and the Consideration shall be adjusted by the corresponding amount set out in Schedule I .
Section 2.04                            Transactions to be Effected at the Closing. At the Closing, each Seller shall deliver the relevant Vessel to Purchaser's Nominated Parties, together with all other documents, certificates, agreements and instruments required by the applicable MOA and such other documents or instruments as Purchaser reasonably requests and are reasonably necessary to consummate the transactions contemplated by this Agreement.
Section 2.05                            Closing. Subject to the terms and conditions of this Agreement, the closing (the " Closing ") under each MOA shall be held on the date that all of the conditions under the relevant MOA have been satisfied, currently scheduled within the delivery periods set forth in Schedule II at the offices of the Seller or of the Vessel's lender (the day on which the Closing takes place being the " Closing Date ").
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Section 2.06                            Closing Date. Notwithstanding the delivery periods set forth in Schedule II , Purchaser and Sellers shall use all commercially reasonable endeavors to procure the fulfillment of the conditions to the Closing set forth in each MOA on or before October 31, 2015 or any other date to be mutually agreed provided that for m.v. "Eternus" the date is to be no later than September 30, 2015.
ARTICLE III
Termination
Section 3.01                            Termination.  This Agreement may be terminated at any time prior to the Closing:
(a)              by the mutual written consent of Sellers and Purchaser;
(b)              by the Purchaser upon the lawful termination by it or a Purchaser's Nominated Party of its MOA;
(c)              by the Sellers upon the lawful termination by a Seller of its MOA.
Section 3.02                            Effect of Termination.  In the event of the termination of this Agreement in accordance with this Article III, this Agreement shall forthwith become void and there shall be no liability on the part of any Party hereto except that nothing herein shall relieve any Party from liability for any willful breach of any provision hereof.  If this Agreement is terminated:
(a)              by the Purchaser in accordance with Section 3.01(b), then the Purchaser's Nominated Parties shall have the right to terminate any MOAs to which any is a party and under which the Closing has not yet occurred;
(b)              by the Sellers in accordance with Section 3.01(c), then the Sellers shall have the right to terminate any MOAs to which any is a party and under which the Closing has not yet occurred,
it being understood that the defaulting Party shall have no right to terminate this Agreement or the MOAs.
ARTICLE IV
Miscellaneous
Section 4.01                            Expenses. Except as otherwise expressly provided herein, all costs and expenses, including, without limitation, fees and disbursements of counsel, financial advisors and accountants, incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the Party incurring such costs and expenses, whether or not the Closing shall have occurred.
Section 4.02                            Notices. All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile or e-mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business
4

hours of the recipient or (d) on the third (3 rd ) day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective parties at the following addresses (or at such other address for a Party as shall be specified in a notice given in accordance with this Agreement):
If to Purchaser:
Seanergy Maritime Holdings Corp.
16 Grigoriou Lambraki street,
166 74 Glyfada, Athens, Greece
Attention:  Stamatis Tsantanis
Facsimile:  +30 210 96 38 404
E-mail: snt@seanergy.gr
 
If to Sellers:
Enterprises Shipping & Trading S.A.
11 Poseidonos Avenue,
16677 Elliniko, Athens, Greece
Attention: Chief Financial Officer
Facsimile:  +30 210 89 48 403
E-mail: finance@ensh.com
 
Section 4.03                            Entire Agreement. This Agreement constitutes the sole and entire agreement of the parties to this Agreement with respect to the subject matter contained herein and therein, and supersede all prior and contemporaneous understandings and agreements, both written and oral, with respect to such subject matter. In case of conflict between this Agreement and any MOA, this Agreement shall prevail.
Section 4.04                            Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. Neither Party may assign its rights or obligations hereunder without the prior written consent of the other Party, which consent shall not be unreasonably withheld or delayed.  No assignment shall relieve the assigning Party of any of its obligations hereunder.
Section 4.05                            No Third-party Beneficiaries. Subject to the rights of the Purchaser's Nominated Parties and any provision expressed to be in their favour, this Agreement is for the sole benefit of the parties hereto and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person or entity any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.
Section 4.06                            Amendment and Modification; Waiver. This Agreement may only be amended, modified or supplemented by an agreement in writing signed by each Party hereto. No waiver by any Party of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the Party so waiving. No waiver by any Party shall operate or be construed as a waiver in respect of any failure, breach or default not expressly identified by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver. No failure to exercise, or delay in exercising, any right, remedy, power or privilege arising from this Agreement shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege
5

hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.
Section 4.07                            Confidentiality. Neither Party shall disclose to third parties information that it has relating to the businesses, properties, financial condition, results of operations or prospects of the other Party, except (i) to the extent such information is publicly available or is obtainable from independent sources who did not receive the information from the other Party, (ii) as requested or required by any law or statutory body, the rules of any applicable stock exchange (including but not limited to Nasdaq Stock Exchange), any applicable accounting standards, ordered by any court, regulation, court order, judicial process or arbitral award (including by oral questions, interrogatories, requests for information or other documents in legal proceedings, subpoena, civil investigative demand or any other similar legal process), (iii) as may be reasonably required by a Party to be disclosed to that Party's Lenders or (iv) as authorized in writing by the other Party.
Section 4.08                            Governing Law; Submission to Jurisdiction; Waiver of Jury Trial.
(a)              This Agreement and any dispute or claim arising out of or in connection with its subject matter or formation (including non-contractual disputes or claims) shall be governed by and construed in accordance with the law of England and Wales.
(b)              The Parties agree to submit to the non-exclusive jurisdiction of the courts of England and Wales for the adjudication of any disputes or claims arising out of or in connection with this Agreement (including non-contractual disputes or claims).
Section 4.09                            Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.
[SIGNATURE PAGE FOLLOWS]
6
IN WITNESS WHEREOF , the parties hereto have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.

PURCHASER:
 
SEANERGY MARITIME HOLDINGS CORP.
   
     
By:
/s/ Stamatis Tsantanis
     
Name:
Stamatis Tsantanis
     
Title:
CEO/Director
     


SELLERS:
   
     
Cape Elizabeth Marine Inc.
 
Dammam Energy Shipping Ltd.
     
By:
/s/ Eirini Kritikov
 
By:
/s/ George Kalogeropoulos
Name:
Eirini Kritikov
 
Name:
George Kalogeropoulos
Title:
Director
 
Title:
Director

Cape May Marine Inc.
 
Cape Ann Marine Inc.
     
By:
/s/ Nikolaus Sakalandis
 
By:
/s/ Eirini Kritikov
Name:
Nikolaus Sakalandis
 
Name:
Eirini Kritikov
Title:
Director
 
Title:
Director

Cape Cod Marine Inc.
 
Lendal International Investments Inc.
     
By:
/s/ Nikolaus Sakalandis
 
By:
/s/ Eirini Kritikov
Name:
Nikolaus Sakalandis
 
Name:
Eirini Kritikov
Title:
Director
 
Title:
Director

Islay Services Inc.
   
     
By:
/s/ Nikolaus Sakalandis
     
Name:
Nikolaus Sakalandis
     
Title:
Director
     

7
SCHEDULE I

Vessel
Seller
Buyer
Purchase Price
Genius
Cape Elizabeth Marine Inc., of the British Virgin Islands
Sea Genius Shipping Co., of the Marshall Islands
$27,596,880
Glorius
Dammam Energy Shipping Ltd., of the British Virgin Islands
Sea Glorius Shipping Co., of the Marshall Islands
$16,833,520
Maximus
Cape May Marine Inc., of the British Virgin Islands
Champion Ocean Navigation Co., of Liberia
$41,717,834
Eternus
Cape Ann Marine Inc., of the British Virgin Islands
Squire Ocean Navigation Co., of Liberia
$34,350,173
Generous
Cape Cod Marine Inc., of the British Virgin Islands
Premier Marine Co., of the Marshall Islands
$29,365,000
Assos Striker
Lendal International Investments Inc., of the British Virgin Island
Gladiator Shipping Co., of the Marshall Islands
$16,335,700
Mystic Striker
Islay Services Inc., of the British Virgin Islands
Guardian Shipping Co., of the Marshall Islands
$17,168,091
Aggregate Purchase Price for the Vessels:
$183,367,198
8
SCHEDULE II
Vessel
Built
Delivery Date
Vessel Class
Genius
2010
Between 17.08.2015 & 30.11.2015
Capesize
Glorius
2004
Between 17.08.2015 & 30.11.2015
Capesize
Maximus
2011
Between 30.09.2015 & 31.12.2015
Capesize
Eternus
2010
Between 17.08.2015 & 30.11.2015
Capesize
Generous
2010
Between 17.08.2015 & 30.11.2015
Capesize
Assos Striker
2010
Between 17.08.2015 & 30.11.2015
Supramax
Mystic Striker
2011
Between 17.08.2015 & 30.11.2015
Supramax
 
9
 
 
Exhibit 4.31
 
 
 
MEMORANDUM OF AGREEMENT
Norwegian Shipbrokers' Association's Memorandum of Agreement for sale and purchase
of ships. Adopted by The Baltic and International Maritime Council (BIMCO) in 1956.
Code-name
SALEFORM 1993

 
Dated: 6 August 2015

Cape Elizabeth Marine Inc., of the British Virgin Islands
hereinafter called the Sellers, have agreed to sell, and
1
 

SEA GENIUS SHIPPING CO., of the Marshall Islands
hereinafter called the Buyers, have agreed to buy the
2

Name: GENIUS
3

Classification Society/Class:
BV
4
Built:   2010
By: Sungdong Shipbuilding & Marine Eng. Co. Ltd., South Korea
5
Flag: Isle of Man
Place of Registration:   Douglas
6
Call sign: 2CPA7
Grt/Nrt: 88.479/56.828
7
Register IMO Number: 9398759
 
8
hereinafter called the Vessel, on the following terms and conditions:
 
9
Definitions
10

" Banking days " are days on which banks are open in the country of the currency
11
Stipulated for the Purchase Price in Clause 1 ,   and in the place of closing stipulated in Clause 8, in the
 country of the Vessel's flag ,   Greece, USA, UK and in the country of the Vessel's mortgagee bank .
12

" in writing " or " written " means a letter handed over from the Sellers to the Buyers or vice versa,
13
a registered letter, telefax or other modern form of written communication .
14

" Classification Society " or " Class " means the Society referred to in line 4.
 
" Purchase Agreement " means the purchase agreement dated 6 August 2015 made by and among, inter
alios, Seanergy (as defined in Clause 21 hereof) and the Sellers.
 
15
1.
Purchase Price:
USD 27,596,880 (United States Dollars twenty seven million five hundred
ninety six thousand eighty eight hundred) only
16
 
2.              Deposit
17

As security for the correct fulfilment of this Agreement  the  Buyers shall pay a deposit of 1 0 %
18
(ten per cent) of the Purchase Price within   banking days from the date of this
19
Agreement. This deposit shall be placed with
20
and   held  by them in a joint  account  for the  Sellers  and  the  Buyers, to be released in accordance
21
with joint written instructions of the  Sellers  and   the  Buyers.  Interest, if any, to  be  credited to  the
22
Buyers. Any fee charged  for holding  the said deposit  shall  be  borne  equally  by  the  Sellers  and  the
23
Buyers.
24

3.              Payment
25
 
The said Purchase Price   shall be paid in full free of bank charges by Buyers to Sellers' bank account,
details of which shall be furnished by Sellers,
26
before delivery of the Vessel, but not later than 3 (three) Banking days after the Vessel is in every respect
27
physically ready for delivery in accordance with the terms and conditions of this Agreement and
28
Notice of Readiness ("NOR") has been given in accordance with Clause 5.
29
 
 
 
4.        Inspections
30
 
a)*
The Buyers have waived the physical inspection for the Vessel and have accepted her. The Buyers
have inspected and accepted the Vessel's classification records. Therefore the sale is outright
and definite, subject only to the terms and conditions of this Agreement . The Buyers
31
 
have also inspected the Vessel at/in   [               ] on   [               ]
32
 
and have accepted the Vessel following this inspection and   the sale is outright and definite,
33
 
subject only to the terms and conditions of this Agreement.
34

b)*
The  Buyers  shall   have  the right  to   inspect  the  Vessel's     classification  records   and   declare
35
 
whether same are accepted  or  not   within
36

 
The Sellers shall provide for   inspections of the Vessel at/in
37

 
The  Buyers  shall  undertake  the  inspection   without  undue  delay  to  the  Vessel.   Should  the
38
 
Buyers  cause  undue  delay  they  shall  compensate  the  Sellers  for the losses thereby incurred.
39
 
The  Buyers  shall  inspect  the  Vessel without opening up   and without    cost  to  the  Sellers
40
 
During  the  inspection,  the  Vessel's  deck  and  engine  log  books  shall  be  made  available for
41
 
examination  by  the  Buyers. If the  Vessel  is  accepted  after  such  inspection,  the  sale shall
42
 
become outright and definite, subject  only  to  the  terms  and  conditions  of  this  Agreement,
43
 
provided the  Sellers receive   written notice  of  acceptance  from  the  Buyers  within  72 hours
44
 
after  completion  of  such  inspection.
45
 
Should  notice  of  acceptance  of   the  Vessel's classification  records  and  of  the Vessel not be
46
 
received  by  the  Sellers  as  aforesaid, the deposit together  with   interest earned   shall  be
47
 
released  immediately to the  Buyers, whereafter  this  Agreement shall be   null and void.
48

*
4 a) and 4b) are alternatives; delete whichever is not applicable. In the absence of deletions,
49
 
alternative 4a) to apply.
50

5.              Notices, time and place of delivery
51

a)
The Sellers shall keep the Buyers well informed of the Vessel's itinerary   and shall
52
 
provide the Buyers with 30/20/15/10/7/5/ 3   approximate and 2 and 1 definite day s notice s of the
expected time and place of arrival at the
53
 
intended time and place of drydocking/underwater inspection/ delivery. When the Vessel is at the
54
 
place of delivery and in every respect physically ready for delivery in accordance with this
55
 
Agreement, the Sellers shall give the Buyers a written NOR for delivery.
 
56
b)
The Vessel shall be delivered to the Buyers free of stowaways, free of cargo, with clean swept holds
57
 
safely afloat at a safe and accessible berth, port or anchorage in   PR China   range .
58
   
59
 
Expected time of delivery : 17 August 2015 – 30 November 2015 or such later date at Buyers' option.
60
     
 
Date of cancelling (see Clauses 5 c), 6 b) (iii) and 14): 30 November 2015 or such later date at Buyers'
option .
61

c)
If the Sellers anticipate that, notwithstanding the exercise of due diligence by them, the
62
 
Vessel will not be ready for delivery by the cancelling date they may notify the Buyers in
63
 
writing stating the date when they anticipate that the Vessel will be ready for delivery and
64
 
propose a new cancelling date. Upon receipt of such notification the Buyers shall have the
65
 
option of either cancelling this Agreement in accordance with Clause 14 within 4 7 running
66
 
days of receipt of the notice or of accepting the new date as the new cancelling date. If the
67
 
Buyers have not declared their option within 4   7 running days of receipt of the Sellers'
68
 
notification or if the Buyers accept the new date, the date proposed in the Sellers' notification
69
 
shall be deemed to be the new cancelling date and shall be substituted for the cancelling
70
 
date stipulated in line 61.
71

 
If this Agreement is maintained with the new cancelling date all other terms and conditions
72
 
hereof including those contained in Clauses 5 a) and 5 c) shall remain unaltered and in full
73
 
force and effect. Cancellation or failure to cancel shall be entirely without prejudice to any
74
 
claim for damages the Buyers may have under Clause 14 for the Vessel not being ready by
75
 
the original cancelling date.
76
 
 
 

 
d)
Should the Vessel become an actual, constructive or compromised total loss before delivery
77
 
the deposit together  with  interest  earned shall be released immediately to the Buyers
78
 
whereafter this Agreement shall be null and void .
79

6.              Drydocking / Divers Inspection - SEE CLAUSE 18 of this Agreement .
80

a)**
The Sellers shall place the Vessel in drydock at the port of delivery for inspection by the
81
 
Classification Society of the Vessel's underwater parts below the deepest load line, the
82
 
extent of the inspection being in accordance with the Classification Society's rules.  If the
83
 
rudder, propeller, bottom or other underwater parts below the deepest load line are found
84
 
broken, damaged or defective so as to affect the Vessel's class, such defects shall be made
85
 
good at the Sellers' expense to the satisfaction of the Classification Society without
86
 
condition/recommendation*.
87

b)**
(i)              The Vessel is to be delivered without drydocking.  However, the Buyers shall
88
 
have the right at their expense to arrange for an underwater inspection by a diver approved
89
 
by the Classification Society   prior to the delivery of the Vessel.  The Sellers shall at their
90
 
cost make the Vessel available for such inspection. The extent of the inspection and the
91
 
conditions under which it is performed shall be to the satisfaction of the Classification
92
 
Society. If the conditions at the port of delivery are unsuitable for such inspection, the
93
 
Sellers shall make the Vessel available   at a suitable alternative place near to the delivery
94
 
port.
95

 
ii)              If the rudder, propeller, bottom or other underwater parts below the deepest load line
96
 
are found broken, damaged or defective so as to affect the Vessel's class, then unless
97
 
repairs can be carried out afloat to the satisfaction of the Classification Society, the Sellers
98
 
shall arrange for the Vessel to be drydocked at their expense for inspection by the
99
 
Classification Society of the Vessel's underwater parts below the deepest load line, the
100
 
extent of the inspection being in accordance with the Classification Society's rules.  If the
101
 
rudder, propeller, bottom or other underwater parts below the deepest load line are found
102
 
broken, damaged or defective so as to affect the Vessel's class, such defects shall be made
103
 
good by the Sellers at their expense to the satisfaction of the Classification Society
104
 
without condition/recommendation*. In such event the Sellers are to pay also for the cost of
105
 
the underwater inspection and the Classification Society's attendance.
106

 
(iii)              If the Vessel is to be drydocked pursuant to Clause 6 b) (ii) and no suitable dry-
107
 
docking facilities are available at the port of delivery, the Sellers shall take the Vessel
108
 
to a port where suitable drydocking facilities are available, whether within or outside the
109
 
delivery range as per Clause 5 b). Once drydocking has taken place the Sellers shall deliver
110
 
the Vessel at a port within the delivery range as per Clause 5 b) which shall, for the
111
 
purpose of this Clause, become the new port of delivery. In such event the cancelling date
112
 
provided for in Clause 5 b) shall be extended by the additional time required for the
113
 
drydocking and extra steaming, but limited to a maximum of 14 running days.
114

c)
If the Vessel is drydocked pursuant to Clause 6 a) or 6 b) above
115

 
(i)              the Classification Society may require survey of the tailshaft system, the extent of
116
 
the survey being to the satisfaction of the Classification surveyor. If such survey is not
117
 
required by the Classification Society, the Buyers shall have the right to require the tailshaft
118
 
to be drawn and surveyed by the Classification Society, the extent of the survey being in
119
 
accordance with the Classification Society's rules for tailshaft survey and consistent with
120
 
the current stage of the Vessel's survey cycle. The Buyers shall declare whether they
121
 
require the tailshaft to be drawn and surveyed not later than by the completion of the
122
 
inspection by the Classification Society. The drawing and refitting of the tailshaft shall be
123
 
arranged by the Sellers. Should any parts of the tailshaft system be condemned or found
124
 
defective so as to affect the Vessel's class, those parts shall be renewed or made good at
125
 
the Sellers' expense to the satisfaction of the Classification Society without
126
 
condition/recommendation*.
127

 
(ii)              the expenses relating to the survey of the tailshaft system shall be borne
128
 
by the Buyers unless the Classification  Society requires such survey to be carried out, in
129
 
which case the Sellers shall pay these expenses. The Sellers shall also pay the expenses
130
 
 
 
 
if the Buyers require the survey  and  parts of the system are condemned or found defective
131
 
or broken so as to affect the Vessel's class*.
132
 
 
(iii)              the expenses in connection with putting the Vessel in and taking her out of
133
 
drydock, including the drydock dues and the Classification Society's fees shall be paid by
134
 
the Sellers if the Classification Society issues any condition/recommendation* as a result
135
 
of the survey or if it requires survey of the tailshaft system. In all other cases the Buyers
136
 
shall pay the aforesaid expenses, dues and fees.
137

 
(iv)              the Buyers' representative shall have the right to be present in the drydock, but
138
 
without interfering with the work or decisions of the Classification surveyor.
139

 
(v)              the Buyers shall have the right to have the underwater parts of the Vessel
140
 
cleaned and painted at their risk and expense without interfering with the Sellers' or the
141
 
Classification surveyor's work, if any, and without affecting the Vessel's timely delivery. If,
142
 
however, the Buyers' work in drydock is still in progress when the Sellers have
143
 
completed the work which the Sellers are required to do, the additional docking time
144
 
needed to complete the Buyers' work shall be for the Buyers' risk and expense. In the event
145
 
that the Buyers' work requires such additional time, the Sellers may upon completion of the
146
 
Sellers' work tender Notice of Readiness for delivery whilst the Vessel is still in drydock
147
 
and the Buyers shall be obliged to take delivery in accordance with Clause 3, whether
148
 
the Vessel is in drydock or not and irrespective of Clause 5 b).
149

*
Notes, if any, in the surveyor's report which are accepted by the Classification Society
150
 
without condition/recommendation are not to be taken into account.
151

**
6 a) and 6 b) are alternatives; delete whichever is not applicable. In the absence of deletions,
152
 
alternative 6 a) to apply
153
 
7.
Spares/bunkers, etc.
154
 
The Sellers shall deliver the Vessel to the Buyers with everything belonging to her on board and on
155
shore , including broached/unbroached stores and provisions and spares without extra payment . All
spare parts and spare equipment including spare tail-end shaft(s) and/or spare
156
propeller(s)/propeller blade(s), if any, belonging to the Vessel at the time of inspection used or
157
unused, whether on board or not shall become the Buyers' property.
158
Forwarding charges, if any, shall be for the Buyers' account. The Sellers are not required to replace spare
159
parts including spare tail-end shaft(s) and spare propeller(s)/propeller blade(s) which are taken out
160
of spare and used as replacement prior to delivery, but the replaced items shall be the property of
161
the Buyers. The radio installation, GMDSS and navigational equipment shall be included in the sale without
extra payment if they are the property of the Sellers.
162
Unused stores and provisions shall be included in the sale and be taken over
163
by the Buyers without extra payment .
164

The Sellers have the right to take ashore crockery, plates, cutlery, linen and other articles bearing the
165
Sellers' flag or name, provided they replace same with similar unmarked items. Library, forms, etc .,
166
exclusively for use in the Sellers' vessel(s), shall be excluded without compensation. Captain's,
167
Officers' and Crew's personal belongings including the slop chest are to be excluded from the sale,
168
as well as the following additional items (including items on hire):
169
 
-UNITOR'S OXYGEN/ACETYLENE/FREON CYLINDERS, EMPTY/FULL;
-MARICHEM SYSTEM MHCS 200;
-ORIGINAL FLAG CERTIFICATES (Registry – Intern. Tonnage – Radio Station Licence – Minimum Safe Manning – CLCertificate - MLCertificate )– necessary for Ship's deletion from the articles;
-LIBRARY, FORMS, RECORDS, REPORTS, DECK and ENGINE Log Books, CORRESPONDENCE exclusively used by the Sellers;
-CD ROM QSEMS;
-SEAGULL TRAINING CDs;
-Lloyds MARINER – Risk Assessment CDs;
-LR Manager (Working hours) CDs;
-AMVER DISKETTE;
-EST SAFETY LABELS (35);
-ISPS CODE / CD / INSTRUCTIONS AND SECURITY AWARENESS CBT 115 AND ISPS TRAINER;
 
 
 
-OWNERS LISTS/ISM & ISPS system manuals / Company's Soft and Hardware/PC's etc.; and
-SECURITY IDENTIFICATION BADGES (CREW AND VISITORS) .
 
The Buyers shall take over the remaining bunkers and unused lubricating oils in storage tanks and
170
sealed drums and pay the current net market  price (excluding  barging  expenses) at the port and date
171
of delivery of the Vessel Buyers shall take over the bunkers remaining on board with cost as per
Platts prices for Singapore published three (3) banking days prior to the Vessel's delivery. Buyers
shall also take over the remaining unbroached lubricants respectively in sealed drums/tins or in
designated storage tanks not having passed to the engines/equipment through Vessel's system at
Sellers' net contract prices of last supply as evidenced by the relevant copies of invoices. Exact
quantities of remaining bunkers and lubricating oils shall be measured and agreed by and between
the Sellers' and the Buyers' representatives latest by one (1) Banking day prior to expected date of
delivery of the Vessel.
172
Payment under this Clause shall be made in cash at the same time and place
173
and in the same currency as the Purchase Price.
174
 
8.
Documentation
175
 
The place of closing: Athens, Greece
176

In exchange for payment of the Purchase Price and delivery of the Vessel the Sellers shall furnish the
Buyers and the Buyers shall furnish the Sellers with the delivery documents stated in this Clause and in
Clause 17 of this Agreement. namely :
 
177
178
a)
Legal Bill of Sale in a form recordable in           (the country in  which  the Buyers  are
179
 
to register the Vessel),  warranting that  the  Vessel  is  free  from  all  encumbrances,  mortgages
180
 
and  maritime   liens  or  any  other  debts   or  claims  whatsoever,  duly  notarially  attested  and
181
 
legalized by the consul of such country or other competent  authority.
182

b)
Current Certificate of  Ownership  issued  by  the  competent  authorities  of  the  flag  state  of
183
 
the Vessel.
184

c)
Confirmation of Class issued within 72 hours prior to delivery.
185

d)
Current Certificate issued by the competent  authorities  stating  that  the  Vessel  is  free  from
186
 
registered encumbrances
187

e)
Certificate of Deletion of the Vessel from the  Vessel's  registry  or  other  official  evidence  of
188
 
deletion appropriate to the Vessel's registry at the time of delivery, or,  in  the  event  that  the
189
 
registry does not  as  a  matter  of  practice  issue  such  documentation  immediately,  a  written
190
 
undertaking by the Sellers to effect deletion from the Vessel's  registry  forthwith  and  furnish  a
191
 
Certificate or other official evidence of deletion to  the  Buyers  promptly  and  latest  within  4
192
 
(four) weeks after the  Purchase  Price  has  been paid and the  Vessel has been delivered.
193

f)
Any  such  additional  documents  as  may  reasonably  be  required  by  the  competent  authorities
194
 
for  the purpose of  registering  the  Vessel, provided  the   Buyers  notify  the  Sellers  of  any  such
195
 
documents as soon as possible after the date of this Agreement
196

At the time of delivery the Buyers and Sellers shall sign and deliver to each other a Protocol of
197
Delivery and Acceptance confirming the date and time of delivery of the Vessel from the Sellers to the
198
Buyers.
199

At the time of delivery the Sellers shall hand over   to the Buyers the classification certificate(s) as well as all
200
Plans etc., which are on board the Vessel. Other certificates which are on board the Vessel shall also
201
be handed over to the Buyers unless the Sellers are required to retain same, in which case the
202
Buyers to have the right to take copies. Other technical documentation which may
203
be in the Sellers' possession shall be promptly forwarded to the Buyers at their expense, if they so
204
request. The Sellers may keep the Vessels log books but the Buyers to have the right to take
205
copies of same at Buyers' account .
 
206
9.        Encumbrances
207

The Sellers warrant that the Vessel, at the time of delivery, is free from all charters, encumbrances,
208
 
 
 
 
Mortgages, taxies, levies, duties and maritime liens or other liens or any other debts whatsoever and is not
subject to any port state or administrative detentions. The Sellers hereby undertake
209
to indemnify the Buyers against all consequences of claims made against the Vessel which have
210
been incurred prior to the time of delivery or arising out of or with respect to events occurring prior to the
time of delivery .
211
 
10.      Taxes, etc.
212

Any taxes, fees and expenses in connection with the purchase and registration under the Buyers' flag
213
shall be for the Buyers' account, whereas similar charges in  connection with the closing of the Sellers'
214
register shall be for the Sellers' account.
215

11.      Condition on delivery
216

The Vessel with everything belonging to her shall be at the Sellers' risk and expense until she is
217
delivered to the Buyers, but subject to the terms and conditions of this Agreement she shall be
218
delivered and taken over "as is where is"   as she was at the time of inspection, fair wear and tear excepted .
219
However, the Vessel shall be delivered free of stowaways, free of cargo and with clean swept holds
and with her class maintained without condition/recommendation*,
220
free of average damage affecting the Vessels class, and with her classification certificates and
221
National/international/trading   certificates and Continuous Survey of Machinery (CSM), as well as all other
222
certificates of the Vessel had at the time of   inspection ,
223
clean and valid   at the time of the delivery   (and unextended for a minimum period of 3 months from
the time of delivery only in case the Vessel is delivered to the Buyers upon completion of scheduled
special survey) without condition/recommendation * by Class or the relevant authorities at the time of
delivery .
224
" Inspection " in this Clause 11, shall mean the Buyers' inspection according to Clause 4 a) or 4 b), if
225
applicable, or the Buyers' inspection prior to the signing of this Agreement. If the Vessel is taken over
226
without inspection, the date of this Agreement shall be the relevant date.
227

*          Notes, if any, in the surveyor's report  which are accepted by the Classification Society
228
            without condition/recommendation are not to be taken into account.
229

12.      Name / markings
230

Upon delivery the Buyers undertake to   change the name of the Vessel and alter funnel markings.
 
231
13.      Buyers' default
232

Should the deposit not be paid in accordance with Clause 2, the Sellers have the right to cancel  this
233
Agreement, and  they shall be entitled to  claim  compensation for their losses and for all expenses
234
incurred together with interest.
235
Should the Purchase Price not be paid in accordance with Clause 3, the Sellers have the right to
236
cancel the Agreement , in which case the deposit  together  with interest  earned  shall  be released  to  the
237
Sellers.  If the  deposit  does  not  cover  their  loss, but in case of such cancellation the Sellers shall not
238
be entitled to claim further compensation for any losses suffered and/or for any expenses incurred together with interest.
239

14.      Sellers' default
240

Should the Sellers fail to give NOR in accordance with Clause 5 a) or fail to be ready
241
to validly complete a legal transfer by the date stipulated in line 61 the Buyers shall have
242
the option of cancelling this Agreement provided always that the Sellers shall be granted a
243
maximum of 3 (three) Banking days after the NOR has been given to make arrangements
244
for the documentation set out in Clause 8 and Clause 17. If after NOR has been given but before
245
the Buyers have taken delivery, the Vessel ceases to be physically ready for delivery and is not
246
made physically ready again in every respect by the date stipulated in line 61 and new NOR
247
given, the Buyers shall retain their option to cancel. In  the  event  that  the  Buyers  elect
248
to  cancel this Agreement  the  deposit  together  with  interest earned shall be released to them
249
immediately.
250
Should the Sellers fail to give NOR by the date stipulated in line 61 or fail to be ready
251
to validly complete a legal transfer as aforesaid they shall make due compensation to the Buyers for
252
 
 
 
 
their loss and for all expenses together with interest if their failure is due to proven
253
negligence and whether or not the Buyers cancel this Agreement.
254

15.      Buyers' representatives
255

After this Agreement has been signed by both parties and  the deposit  has  been  lodged , the Buyers
256
have the right to place two (2) representatives on board the Vessel at their sole risk and expense upon
257
arrival at  ________ on or about _________ immediately.
258
These representatives/crew shall remain on board until delivery of the Vessel to, and acceptance of the
Vessel by, the Buyers for the purpose of familiarisation and in the capacity of
259
observers only, and they shall not interfere in any respect with the operation of the Vessel. The
260
Buyers' representatives/crew shall sign the Sellers' letter of indemnity prior to their embarkation.
261
 
16.      Arbitration
 

a)*              This Agreement (and any non-contractual obligations connected with this Agreement) shall be
governed by and construed in accordance with English law and any dispute arising out of this
262
263
Agreement and/or any non-contractual obligations connected with this Agreement shall be referred to
264
arbitration in London in accordance with the Arbitration Acts 1996 or any statutory modification or
265
re-enactment thereof for the time being in force, one arbitrator being appointed by each
266
party. The arbitrators shall be full members of the London Maritime Arbitrators Association ("LMAA"). On the
receipt by one party of the nomination in writing of the other party's arbitrator,
267
that party shall appoint their arbitrator within fourteen days, failing which the decision of the
268
single arbitrator appointed shall apply. If two arbitrators are properly appointed
269
they shall appoint a third arbitrator failing which the third arbitrator shall be appointed by the President of the
LMMA at the time within 21 (twenty one) days of the two arbitrators being appointed.
270

b)*              This  Agreement  shall  be  governed  by  and  construed  in  accordance  with  Title  9  of   the
271
United States Code and the Law of the State of New York  and  should  any  dispute  arise  out  of
272
this Agreement, the matter in dispute shall be referred to three  persons  at  New  York,  one  to
273
be appointed by each  of  the  parties  hereto,  and  the  third  by  the  two  so  chosen;  their
274
decision or that of any two of them shall be final, and for purpose of enforcing any  award,  this
275
Agreement may be made a rule of the Court.
276
The proceedings shall be conducted in accordance  with  the  rules  of  the  Society  of  Maritime
277
Arbitrators, Inc.  New York.
278

c)*              Any dispute arising out of this Agreement shall be referred to arbitration at London in accordance with the Arbitration Act 1996 and subsequent alterations (if any), LLMAA rules to apply
279
, subject to the procedures applicable there.
280
The laws of England shall govern this Agreement.
281

*              16 a), 16 b) and 16 c) are altematives; delete whichever is not applicable.  In the absence of
282
deletions, altemative 16 a) to apply .
283

Additional Clauses 17, 18, 19, 20, 21, 22, 23, 24 and 25, inclusive as herein below, are deemed to be fully incorporated into and form an integral part of this Agreement.

17.      Delivery Documents

A. In exchange of the payment of the Purchase Price and other monies due under Clause 3 of this Agreement, the Sellers shall furnish the Buyers with the following delivery documents, namely:
(a)              Three originals of a legal bill of sale in form recordable in the Buyers' new flag in the English language (the "Bill of Sale") in favour of the Buyers, evidencing the transfer of all (100 percent) of the shares and interest in and title to the Vessel to the Buyers and warranting that the Vessel is free from all mortgages, encumbrances, charters, maritime liens or other liens, claims, taxes, levies, duties and any other debts whatsoever or any port state or administrative detentions, duly executed by the Sellers and duly certified by a notary public and legalized by Apostille.
 
 
(b)              Fax or email copy of Transcript of Register issued by the Isle of Man   Registry and dated the delivery date showing the Vessel to be registered in the ownership of the Sellers and free and clean from encumbrances and mortgages to be faxed to the closing meeting in Greece. The original of such Transcript of Register will be provided to the Buyers not later than 10 (ten) Banking days after the delivery date of the Vessel to the Buyers and the Sellers shall provide a written undertaking to the Buyers to that end.
(c)              A certified true copy of the certificate of incorporation of the Sellers certified by the Sellers' Greek counsel.
(d)              An original set of Minutes of all the members of the Board of Directors of the Sellers or Resolutions of the Sellers adopted by unanimous consent approving, authorizing and confirming the entry into this Agreement and any amendments and/or addendums thereto, authorising the sale of the Vessel in accordance with the provisions of this Agreement and authorizing persons to conclude the sale, transfer and delivery of the Vessel to the Buyers and sign, execute and deliver on behalf of the Sellers, inter alia , the Bill of Sale, a protocol of delivery and acceptance and any other document required to be executed by the Sellers in respect of the delivery of the Vessel from the Sellers to the Buyers thereof pursuant to this Agreement and also authorizing the execution of Power(s) of Attorney to a specific person or persons empowering them to execute and deliver such documents and take such steps as may be necessary or appropriate in order to transfer and deliver the Vessel to the Buyers, such Minutes to be duly certified by a notary public and legalized by Apostille.
(e)              Original written resolutions of the Shareholder(s) , approving the BOD minutes or Resolutions of the Sellers under 17. A. (d) above, duly certified by a notary public and legalized by Apostille.
(f)              An original Power of Attorney of the Sellers executed pursuant to the Minutes or Resolutions referred to in item 17. A. (d) hereinabove duly certified by a notary public and legalized by Apostille.
(g)            An original set of a director's certificate of incumbency of the Sellers certifying the name of all present directors/officers and shareholders of the Sellers and attaching copies of all the correct and complete and up-to-date constitutional documents in full force and effect of the Sellers (Memorandum and Articles of Association) with any amendments .
(h)            An original Certificate of Goodstanding of the Sellers dated no more than 10 (ten) Banking days prior to the delivery date showing the Sellers to be in good standing under the laws of the British Virgin Islands .
(i)              Two original Protocols of Delivery and Acceptance (one for the Sellers and one for the Buyers to be exchanged at the closing in Greece) confirming the delivery of the Vessel by the Sellers to the Buyers.
(j)              Commercial Invoice in three (3) copies dated the delivery date, stating the full particulars of the Vessel and the Purchase Price of the Vessel signed and stamped by the Sellers .
 
 
(k)              An original letter of confirmation from the Sellers stating that to the best of their knowledge the Vessel is not blacklisted by Arab Boycott League in Damascus or any other organisation, nation, government, state, country, political sub-division or union as of the delivery date.
(l) (i)   A letter of undertaking by the Sellers to effect deletion from the Vessel's Registry forthwith and provide the Buyers with the original Transcript of Closed Register from the Vessel's Registry within 10 (ten) Banking days after delivery of the Vessel and to also provide the Vessel's new flag with a Closed Continuous Synopsis Record issued by the Vessel's Registry within 30 (thirty) running days after delivery of the Vessel; (ii) A copy of the Transcript of Closed Register to be provided to the Buyers on the delivery date; and (iii) a Closed Continuous Synopsis Record from the Vessel's Registry to be issued and delivered to the Vessel's new flag administration as paragraph (o)(i) above within 30 (thirty) running days after the delivery of the Vessel (unless the Buyers waive this item (I) (i) (ii) and (iii) ) .
(m)      Original Class Maintenance Certificate issued by the Vessel's present Class and dated not more than 3 (three) Banking days prior to the date of delivery of the Vessel evidencing that the Vessel is class maintained without condition/recommendation.
(n)      An original letter of confirmation from the Sellers addressed to the Buyers confirming that the Vessel has not traded with or called in Israel, Cuba, Iran, Syria, North Korea or any other areas sanctioned or boycotted by the European Union and/or the United States of America and/or the United Nations, dated the delivery date. In case however the Vessel has traded in Israel and/or Iran, Sellers to provide an original letter of confirmation addressed to the Buyers confirming the following: i) the Vessel has not traded with or called in Cuba, Syria, North Korea or any other areas sanctioned or boycotted by the European Union and/or the United States of America and/or the United Nations and ii) that if the Vessel has traded Israel and/or Iran, this was with legal cargo for humanitarian purposes, dated the delivery date .
(o)       An original letter of confirmation from the Sellers addressed to the Buyers confirming that the Vessel is entitled to trade worldwide within Institute Warranty Limits without restriction or limitation.
(p)       An original letter of confirmation from the Sellers that to the best of their knowledge the Vessel has not touched bottom or suffered any underwater damage from her last drydock up to the date of her delivery.

(q)        One original letter from the Sellers confirming that any outstanding radio accounts shall be settled by the Sellers as soon as practically possible after the Vessel's delivery with no liability regarding the same to be incurred against the Buyers.

(r)        Recent AGM free certificate from authorized company, if available.

(s)       Most recent original Certificate for Chinese Tonnage Tax dues at no cost, if available .

(t)       Any such additional documents as may be reasonably required by the Buyers' flag authorities for the purpose of transferring title and registering the Vessel, provided that the Buyers notify the Sellers of any such documents as soon as possible and in no event later than 7 (seven) days prior to the expected delivery of the Vessel.
 
 

B. In exchange of delivery of the Vessel, the Buyers shall furnish the Sellers with the following delivery documents, namely:
(a) Copy of the Certificate of Incorporation of the Buyers, certified as true by the Buyers' Greek Legal Counsel.
(b) Original Good Standing Certificate of the Buyers dated no more than 7 (seven) Banking prior to the delivery date showing the Buyers to be in good standing under the laws of the Marshall Islands .
(c) An original set of resolutions or minutes of the Board of Directors of the Buyers authorising the purchase of the Vessel in accordance with the provisions of this Agreement, the ratification of this Agreement signed and the execution on behalf of the Buyers of (inter alia) the acceptance of the Bill of Sale (if applicable), a protocol of delivery and acceptance and any other document required to be executed by the Buyers in respect of the delivery of the Vessel from the Sellers to the Buyers pursuant to this Agreement, and authorising further execution of a Power of Attorney authorising the execution any and all other documents and undertakings provided in this Agreement such resolutions to be duly legalised by Apostille.
(d) An original set of an officer's certificate of incumbency of the Buyers certifying the names of all present directors/officers of the Buyers and attaching copies of all correct and complete constitutional documents in full force and effect of the Buyers (Copies of the Articles of Incorporation and By-Laws (together with any amendment thereto up to and including the delivery date)).
(e) An original Power of Attorney of the Buyers issued in accordance with the resolutions referred to under 17. B. (c) above authorising the persons signing the documents on their behalf such power of attorney to be duly legalised by Apostille .
(f) Original written resolutions of the Buyers' Shareholder, approving the BOD minutes under 17. B. (c), such resolutions to be duly legalised by Apostille.
The parties undertake to exchange drafts of the above documents and agree final formats latest 7 (seven) Banking days prior to the delivery date of the Vessel.
18.      DRYDOCKING

NO DRYDOCKING CLAUSE TO APPLY AND CLAUSE 6 OF SALESFORM 1993 IS DELETED.

HOWEVER, PROMPTLY BEFORE OR AFTER THE VESSEL'S ARRIVAL AT THE DELIVERY PORT AND PRIOR TO THE VESSEL'S DELIVERY THE BUYERS HAVE THE RIGHT TO CARRY OUT AN INSPECTION OF THE VESSEL'S UNDERWATER (BELOW SUMMER LOADLINE) PARTS BY CLASS
 
 
APPROVED DIVERS WITH VIDEO LINK TO THE ATTENDING CLASS SURVEYOR, SUCH DIVERS INSPECTION TO BE AT BUYERS' RISK AND EXPENSE.
 
BUYERS TO ADVISE SELLERS FIVE (5) DAYS PRIOR TO DELIVERY IF THEY INTEND TO CARRY OUT UNDERWATER INSPECTION. IF THE DECLARED BY SELLERS DELIVERY PORT IS NOT FEASIBLE FOR AN UNDERWATER INSPECTION, BUYERS SHALL PROMPTLY ADVISE SELLERS OF AN ALTERNATIVE PLACE NEAR TO THE DELIVERY PORT, TO BE MUTUALLY AGREED, WHERE SELLERS ARE TO MAKE THE VESSEL AVAILABLE, AT SELLERS' COST (EXCEPT FOR THE BUNKERS' COST WHICH SHALL BE BORNE EQUALLY BETWEEN THE SELLERS AND THE BUYERS), FOR SUCH AN INSPECTION. THE EXTENT OF THE INSPECTION AND CONDITIONS UNDER WHICH IT IS PERFORMED SHALL BE TO THE SATISFACTION OF THE CLASSIFICATION SOCIETY.

THE DIVERS INSPECTION TO BE CARRIED OUT IN A MANNER AND UNDER CONDITIONS CONSIDERED SUITABLE BY THE ATTENDING CLASS SURVEYOR FOR SUCH UNDERWATER INSPECTION. ATTENDANCE ARRANGEMENTS AND FEES FOR THE ATTENDING CLASS SURVEYOR SHALL BE FOR THE BUYERS' ACCOUNT AND THE COST OF THE DIVERS FOR THE BUYERS' ACCOUNT.

A) IF ANY DAMAGE IS FOUND TO THE VESSELS UNDERWATER PARTS WHICH LEADS TO IMPOSING RECOMMENDATION(S) AGAINST THE VESSEL, AND REQUIRES SAME TO BE REPAIRED PRIOR TO THE VESSEL'S NEXT DUE DRYDOCKING DATE, THEN THE SELLERS SHALL REPAIR SUCH DAMAGE TO THE SATISFACTION OF CLASSIFICATION SOCIETY AT THE SELLERS' TIME AND EXPENSE, PRIOR TO THE VESSEL'S DELIVERY TO THE BUYERS. SHOULD THE VESSEL BE REQUIRED TO DRYDOCK TO EFFECT SUCH REPAIRS TO CLASS SATISFACTION, THEN THE BUYERS SHALL HAVE THE RIGHT TO SCRAPE/PAINT THE VESSEL'S UNDERWATER PARTS AT THE BUYERS' RISK & EXPENSE WHILST THE VESSELS IS IN DRYDOCK. ALL COSTS AND MATERIALS ASSOCIATED WITH THE BUYERS' WORKS AND ANY EXTRA DRYDOCKING TIME REQUIRED FOR THE BUYERS TO CARRY OUT/COMPLETE THEIR WORKS SHALL BE FOR THE BUYERS' ACCOUNT. SUCH BUYERS' WORKS SHALL NOT INTERFERE WITH THE SELLERS' WORKS AND NOT TO DELAY THE DELIVERY OF THE VESSEL. IN THE EVENT THAT THE SELLERS HAVE COMPLETED THEIR WORKS IN THE DRYDOCK TO THE SATISFACTION OF CLASS AND THE BUYERS WORKS ARE NOT YET COMPLETED, THEN THE SELLERS HAVE THE RIGHT TO TENDER NOR FOR DELIVERY TO THE BUYERS WHILST THE VESSEL IS IN DRYDOCK. IN THE EVENT OF THE VESSEL BEING REQUIRED TO DRYDOCK FOR REPAIRS AND THERE ARE NO SUITABLE DRYDOCKING FACILITIES AVAILABLE AT THE DELIVERY PORT, THEN THE SELLERS SHALL TAKE THE VESSEL IN BALLAST TO THE NEAREST PORT/PLACE WHERE SUITABLE DRYDOCKING FACILITIES ARE AVAILABLE, AND A NEW DELIVERY PORT TO BE AGREED BETWEEN THE PARTIES. IT IS HEREBY MUTUALLY AGREED BY THE SELLERS AND THE BUYERS, THAT IN THE EVENT OF DAMAGE AFFECTING CLASS BEING FOUND DURING THE DIVERS INSPECTIONS AS MENTIONED ABOVE, THEN THE AGREED CANCELLING DATE SHALL AUTOMATICALLY BE EXTENDED BY THE ADDITIONAL TIME REQUIRED FOR THE DRYDOCKING,

 
 
 
REPAIRS AND EXTRA STEAMING, BUT LIMITED TO A MAXIMUM OF FOURTEEN (14) RUNNING DAYS. CLASS ATTENDANCE FEES AND DIVERS COSTS TO BE FOR SELLERS' ACCOUNT.
 
B) IF ANY DAMAGE(S) TO THE VESSEL'S UNDERWATER PARTS   IS FOUND WHICH LEADS TO CLASS IMPOSING A RECOMMENDATION(S) AGAINST THE VESSEL BUT AGREE TO POSTPONE PERMANENT REPAIRS TO SAME UNTIL THE VESSEL'S NEXT DUE DRYDOCKING DATE THEN, IN LIEU OF THE SELLERS REPAIRING SUCH DAMAGE(S), THE SELLERS TO COMPENSATE THE BUYERS BY WAY OF PAYMENT IN CASH TO THE BUYERS NOMINATED ACCOUNT AND THE BUYERS SHALL TAKE DELIVERY OF THE VESSEL AS SHE IS WITH SUCH RECOMMENDATION(S) OUTSTANDING. THE SELLERS AND THE BUYERS SHALL EACH OBTAIN A QUOTATION FOR THE REPAIR OF SUCH DAMAGE FROM TWO (2) SEPARATE REPUTABLE SHIP REPAIR YARDS IN THE AREA, AND THE COMPENSATION AMOUNT TO THE BUYERS SHALL BE THE AVERAGE OF THE TWO (2) REPAIR QUOTATIONS RECEIVED BY THE BUYERS AND SELLERS RESPECTIVELY AS MENTIONED ABOVE. CLASS ATTENDANCE FEES AND DIVERS COSTS TO BE FOR SELLERS' ACCOUNT.

19.     P AND C
 
The terms and conditions of the sale to be kept strictly private and confidential by all parties involved, save as required otherwise by the Securities and Exchange Commission or US stock listed exchange rules applicable to the Buyers.
20.      Notices
Any and all notices and communication in connection with this Agreement shall be in English in writing and shall be sent as follows:

(a) if to the Sellers at:
Attention: Asteria Bagouli
Telephone: +302108910288
Fax: +302108910295
E-mail: legal@ensh.com
or such other address as the Sellers may notify the Buyers.

(b) If to the Buyers at:
Attention: Stamatios Tsantanis
Telephone: +30 213 0181 507
Fax: +30 210 9638404
E-mail: snt@seanergy.gr  
or such other address as the Buyers may notify the Sellers
21.      Performance Guarantee
Seanergy Maritime Holdings Corp., of the Marshall Islands ("Seanergy") guarantees the performance by the Buyer of all of its obligations under this Agreement.
22.      Contracts (Rights of Third Parties) Act 1999
Nothing contained in this Agreement confers or purports to confer on any third party any benefit or any right to enforce any term hereof pursuant to the Contracts (Rights of Third Parties) Act 1999.
23.     Purchase Agreement & this Agreement
 
 
This Agreement is one of the "MOAs" referred to and defined in the Purchase Agreement. If there is any inconsistency between the terms and conditions of this Agreement and the terms and conditions of said Purchase Agreement, then the terms and conditions of the Purchase Agreement shall prevail.
24.      Condition Precedent to this Agreement
The obligations of the Buyer and Seanergy's performance guarantee under Clause 21 to consummate the transactions contemplated by this Agreement and take delivery of the Vessel shall be subject to the fulfillment, at or prior to the delivery date of the Vessel, of the following condition:
The Buyer shall have secured financing for the acquisition of the Vessel.
In the event that the above condition is not fulfilled at or prior to the delivery date of the Vessel, this Agreement shall forthwith become void and null and there shall be no liability on the part of any party hereto and Seanergy except that nothing herein shall relieve any party hereto from liability for any willful breach of any provision hereof.
25.      Entire Agreement
The written terms of this Agreement comprise the entire agreement between the Buyers and the Sellers in relation to the sale and purchase of the Vessel.

 
For the Sellers
 
For the Buyers
 
       
/s/Eirini Kritikou
 
/s/Stamatios Tsantanis
 
Name: Eirini Kritikou
 
Name: Stamatios Tsantanis
 
Title: Authorized Director
 
Title: Authorized Director
 
 
 
 
 


Exhibit 4.32
 
MEMORANDUM OF AGREEMENT
Norwegian Shipbrokers' Association's Memorandum of Agreement for sale and purchase
of ships. Adopted by The Baltic and International Maritime Council (BIMCO) in 1956.
Code-name
SALEFORM 1993

 
 
 


Dated: 6 August 2015

Dammam Energy Shipping Ltd., of the British Virgin Islands
hereinafter called the Sellers, have agreed to sell, and
1
 

SEA GLORIUS SHIPPING CO., of the Marshall Islands
hereinafter called the Buyers, have agreed to buy the
2

Name: GLORIUS
3

Classification Society/Class:
BV
4
Built:   2004
By: Hyundai, Samho Heavy Industries Co., Ltd.
5
Flag: Isle of Man
Place of Registration:   Douglas
6
Call sign: MDAZ4
Grt/Nrt: 87.720/54.606
7
Register IMO Number: 9266944
8
hereinafter called the Vessel, on the following terms and conditions:
9
Definitions
10

" Banking days " are days on which banks are open in the country of the currency
11
Stipulated for the Purchase Price in Clause 1 ,   and in the place of closing stipulated in Clause 8, in the country of the Vessel's flag ,   Greece, USA, UK and in the country of the Vessel's mortgagee bank .
12

" in writing " or " written " means a letter handed over from the Sellers to the Buyers or vice versa,
13
a registered letter, telefax or other modern form of written communication .
14

" Classification Society " or " Class " means the Society referred to in line 4.
 
" Purchase Agreement " means the purchase agreement dated 6 August 2015 made by and among, inter alios, Seanergy (as defined in Clause 21 hereof) and the Sellers.
 
15
1.
Purchase Price:
USD 16,833,520 (United States Dollars sixteen million eight hundred thirty three thousand five hundred and twenty) only
16
 
2.                Deposit
17

As security for the correct fulfilment of this Agreement  the  Buyers shall pay a deposit of 1 0 %
18
(ten per cent) of the Purchase Price within   banking days from the date of this
19
Agreement. This deposit shall be placed with
20
and   held  by them in a joint  account  for the  Sellers  and  the  Buyers, to be released in accordance
21
with joint written instructions of the  Sellers  and   the  Buyers.  Interest, if any, to  be  credited to  the
22
Buyers. Any fee charged  for holding  the said deposit  shall  be  borne  equally  by  the  Sellers  and  the
23
Buyers.
24

3.              Payment
 
25
The said Purchase Price   shall be paid in full free of bank charges by Buyers to Sellers' bank account,
details of which shall be furnished by Sellers,
 
26
before delivery of the Vessel, but not later than 3 (three) Banking days after the Vessel is in every respect
27
physically ready for delivery in accordance with the terms and conditions of this Agreement and
28

Notice of Readiness ("NOR") has been given in accordance with Clause 5.
 
29
4              Inspections
30

a)*
The Buyers have waived the physical inspection for the Vessel and have accepted her. The
Buyers have inspected and accepted the Vessel's classification records. Therefore the sale is outright
and definite, subject only to the terms and conditions of this Agreement . The Buyers
31
 
have also inspected the Vessel at/in   [               ] on   [               ]
32
 
and have accepted the Vessel following this inspection and   the sale is outright and definite,
33
 
subject only to the terms and conditions of this Agreement.
34

b)*
The  Buyers  shall   have  the right  to   inspect  the  Vessel's     classification  records   and   declare
35
 
whether same are accepted  or  not   within
36

The Sellers shall provide for   inspections of the Vessel at/in
37

The  Buyers  shall  undertake  the  inspection   without  undue  delay  to  the  Vessel.   Should  the
38
Buyers  cause  undue  delay  they  shall  compensate  the  Sellers  for the losses thereby incurred.
39
The  Buyers  shall  inspect  the  Vessel without opening up   and without    cost  to  the  Sellers
40
During  the  inspection,  the  Vessel's  deck  and  engine  log  books  shall  be  made  available for
41
examination  by  the  Buyers. If the  Vessel  is  accepted  after  such  inspection,  the  sale shall
42
become outright and definite, subject  only  to  the  terms  and  conditions  of  this  Agreement,
43
provided the  Sellers receive   written notice  of  acceptance  from  the  Buyers  within  72 hours
44
after  completion  of  such  inspection.
45
Should  notice  of  acceptance  of   the  Vessel's classification  records  and  of  the Vessel not be
46
received  by  the  Sellers  as  aforesaid, the deposit together  with   interest earned   shall  be
47
released  immediately to the  Buyers, whereafter  this  Agreement shall be   null and void.
48

*
4 a) and 4b) are alternatives; delete whichever is not applicable. In the absence of deletions,
49
 
alternative 4a) to apply.
50

5.              Notices, time and place of delivery
51

a)
The Sellers shall keep the Buyers well informed of the Vessel's itinerary   and shall
52
 
provide the Buyers with 30/20/15/10/7/5/ 3   approximate and 2 and 1 definite day s notice s of the expected time and place of arrival at the
53
 
intended time and place of drydocking/underwater inspection/ delivery. When the Vessel is at the
54
 
place of delivery and in every respect physically ready for delivery in accordance with this
55
 
Agreement, the Sellers shall give the Buyers a written NOR for delivery.
 
56
b)
The Vessel shall be delivered to the Buyers free of stowaways, free of cargo, with clean swept holds
57
 
safely afloat at a safe and accessible berth, port or anchorage in   PR China/Singapore   range .
58
   
59
 
Expected time of delivery : 17 August 2015 – 30 November 2015 or such later date at Buyers' option.
 
60
 
Date of cancelling (see Clauses 5 c), 6 b) (iii) and 14): 30 November 2015 or such later date at Buyers' option .
61

c)
If the Sellers anticipate that, notwithstanding the exercise of due diligence by them, the
62
 
Vessel will not be ready for delivery by the cancelling date they may notify the Buyers in
63
 
writing stating the date when they anticipate that the Vessel will be ready for delivery and
64
 
propose a new cancelling date. Upon receipt of such notification the Buyers shall have the
65
 
option of either cancelling this Agreement in accordance with Clause 14 within 4 7 running
66
 
days of receipt of the notice or of accepting the new date as the new cancelling date. If the
67
 
Buyers have not declared their option within 4   7 running days of receipt of the Sellers'
68
 
notification or if the Buyers accept the new date, the date proposed in the Sellers' notification
69
 
shall be deemed to be the new cancelling date and shall be substituted for the cancelling
70
 
date stipulated in line 61.
71

 
If this Agreement is maintained with the new cancelling date all other terms and conditions
72
 
hereof including those contained in Clauses 5 a) and 5 c) shall remain unaltered and in full
73
 
force and effect. Cancellation or failure to cancel shall be entirely without prejudice to any
74
 
claim for damages the Buyers may have under Clause 14 for the Vessel not being ready by
75

 
the original cancelling date.
76

d)
Should the Vessel become an actual, constructive or compromised total loss before delivery
77
 
the deposit together  with  interest  earned shall be released immediately to the Buyers
78
 
whereafter this Agreement shall be null and void .
79

6.              Drydocking / Divers Inspection - SEE CLAUSE 18 of this Agreement .
80

a)**
The Sellers shall place the Vessel in drydock at the port of delivery for inspection by the
81
 
Classification Society of the Vessel's underwater parts below the deepest load line, the
82
 
extent of the inspection being in accordance with the Classification Society's rules.  If the
83
 
rudder, propeller, bottom or other underwater parts below the deepest load line are found
84
 
broken, damaged or defective so as to affect the Vessel's class, such defects shall be made
85
 
good at the Sellers' expense to the satisfaction of the Classification Society without
86
 
condition/recommendation*.
87

b)**
(i)              The Vessel is to be delivered without drydocking.  However, the Buyers shall
88
 
have the right at their expense to arrange for an underwater inspection by a diver approved
89
 
by the Classification Society   prior to the delivery of the Vessel.  The Sellers shall at their
90
 
cost make the Vessel available for such inspection. The extent of the inspection and the
91
 
conditions under which it is performed shall be to the satisfaction of the Classification
92
 
Society. If the conditions at the port of delivery are unsuitable for such inspection, the
93
 
Sellers shall make the Vessel available   at a suitable alternative place near to the delivery
94
 
port.
95

 
ii)              If the rudder, propeller, bottom or other underwater parts below the deepest load line
96
 
are found broken, damaged or defective so as to affect the Vessel's class, then unless
97
 
repairs can be carried out afloat to the satisfaction of the Classification Society, the Sellers
98
 
shall arrange for the Vessel to be drydocked at their expense for inspection by the
99
 
Classification Society of the Vessel's underwater parts below the deepest load line, the
100
 
extent of the inspection being in accordance with the Classification Society's rules.  If the
101
 
rudder, propeller, bottom or other underwater parts below the deepest load line are found
102
 
broken, damaged or defective so as to affect the Vessel's class, such defects shall be made
103
 
good by the Sellers at their expense to the satisfaction of the Classification Society
104
 
without condition/recommendation*. In such event the Sellers are to pay also for the cost of
105
 
the underwater inspection and the Classification Society's attendance.
106

 
(iii)              If the Vessel is to be drydocked pursuant to Clause 6 b) (ii) and no suitable dry-
107
 
docking facilities are available at the port of delivery, the Sellers shall take the Vessel
108
 
to a port where suitable drydocking facilities are available, whether within or outside the
109
 
delivery range as per Clause 5 b). Once drydocking has taken place the Sellers shall deliver
110
 
the Vessel at a port within the delivery range as per Clause 5 b) which shall, for the
111
 
purpose of this Clause, become the new port of delivery. In such event the cancelling date
112
 
provided for in Clause 5 b) shall be extended by the additional time required for the
113
 
drydocking and extra steaming, but limited to a maximum of 14 running days.
114

c)
If the Vessel is drydocked pursuant to Clause 6 a) or 6 b) above
115

 
(i)              the Classification Society may require survey of the tailshaft system, the extent of
116
 
the survey being to the satisfaction of the Classification surveyor. If such survey is not
117
 
required by the Classification Society, the Buyers shall have the right to require the tailshaft
118
 
to be drawn and surveyed by the Classification Society, the extent of the survey being in
119
 
accordance with the Classification Society's rules for tailshaft survey and consistent with
120
 
the current stage of the Vessel's survey cycle. The Buyers shall declare whether they
121
 
require the tailshaft to be drawn and surveyed not later than by the completion of the
122
 
inspection by the Classification Society. The drawing and refitting of the tailshaft shall be
123
 
arranged by the Sellers. Should any parts of the tailshaft system be condemned or found
124
 
defective so as to affect the Vessel's class, those parts shall be renewed or made good at
125
 
the Sellers' expense to the satisfaction of the Classification Society without
126

 
condition/recommendation*.
127

 
(ii)              the expenses relating to the survey of the tailshaft system shall be borne
128
 
by the Buyers unless the Classification  Society requires such survey to be carried out, in
129
 
which case the Sellers shall pay these expenses. The Sellers shall also pay the expenses
130
 
if the Buyers require the survey  and  parts of the system are condemned or found defective
131
 
or broken so as to affect the Vessel's class*.
132

 
(iii)              the expenses in connection with putting the Vessel in and taking her out of
133
 
drydock, including the drydock dues and the Classification Society's fees shall be paid by
134
 
the Sellers if the Classification Society issues any condition/recommendation* as a result
135
 
of the survey or if it requires survey of the tailshaft system. In all other cases the Buyers
136
 
shall pay the aforesaid expenses, dues and fees.
137

 
(iv)              the Buyers' representative shall have the right to be present in the drydock, but
138
 
without interfering with the work or decisions of the Classification surveyor.
139

 
(v)              the Buyers shall have the right to have the underwater parts of the Vessel
140
 
cleaned and painted at their risk and expense without interfering with the Sellers' or the
141
 
Classification surveyor's work, if any, and without affecting the Vessel's timely delivery. If,
142
 
however, the Buyers' work in drydock is still in progress when the Sellers have
143
 
completed the work which the Sellers are required to do, the additional docking time
144
 
needed to complete the Buyers' work shall be for the Buyers' risk and expense. In the event
145
 
that the Buyers' work requires such additional time, the Sellers may upon completion of the
146
 
Sellers' work tender Notice of Readiness for delivery whilst the Vessel is still in drydock
147
 
and the Buyers shall be obliged to take delivery in accordance with Clause 3, whether
148
 
the Vessel is in drydock or not and irrespective of Clause 5 b).
149

*
Notes, if any, in the surveyor's report which are accepted by the Classification Society
150
 
without condition/recommendation are not to be taken into account.
151

**
6 a) and 6 b) are alternatives; delete whichever is not applicable. In the absence of deletions,
152
 
alternative 6 a) to apply
153

7.
Spares/bunkers, etc.
154

The Sellers shall deliver the Vessel to the Buyers with everything belonging to her on board and on
155
shore , including broached/unbroached stores and provisions and spares without extra payment . All spare parts and spare equipment including spare tail-end shaft(s) and/or spare
156
propeller(s)/propeller blade(s), if any, belonging to the Vessel at the time of inspection used or
157
unused, whether on board or not shall become the Buyers' property.
158
Forwarding charges, if any, shall be for the Buyers' account. The Sellers are not required to replace spare
159
parts including spare tail-end shaft(s) and spare propeller(s)/propeller blade(s) which are taken out
160
of spare and used as replacement prior to delivery, but the replaced items shall be the property of
161
the Buyers. The radio installation, GMDSS and navigational equipment shall be included in the sale without extra payment if they are the property of the Sellers. ECDIS (with dongle card and maps) shall be included in the sale and Buyers shall pay the Sellers Euro 12,500.
162
Unused stores and provisions shall be included in the sale and be taken over
163
by the Buyers without extra payment .
164

The Sellers have the right to take ashore crockery, plates, cutlery, linen and other articles bearing the
165
Sellers' flag or name, provided they replace same with similar unmarked items. Library, forms, etc .,
166
exclusively for use in the Sellers' vessel(s), shall be excluded without compensation. Captain's,
167
Officers' and Crew's personal belongings including the slop chest are to be excluded from the sale,
168

as well as the following additional items (including items on hire):
 
-UNITOR'S OXYGEN/ACETYLENE/FREON CYLINDERS, EMPTY/FULL;
-MARICHEM SYSTEM MHCS 200;
-ORIGINAL FLAG CERTIFICATES (Registry – Intern. Tonnage – Radio Station Licence – Minimum Safe Manning – CLCertificate - MLCertificate )– necessary for Ship's deletion from the articles;
-LIBRARY, FORMS, RECORDS, REPORTS, DECK and ENGINE Log Books, CORRESPONDENCE exclusively used by the Sellers;
-CD ROM QSEMS;
-SEAGULL TRAINING CDs;
169
 
 
 
 
-Lloyds MARINER – Risk Assessment CDs;
- LR Manager (Working hours) CDs;
-AMVER DISKETTE;
-EST SAFETY LABELS (35);
-ISPS CODE / CD / INSTRUCTIONS AND SECURITY AWARENESS CBT 115 AND ISPS TRAINER;
-OWNERS LISTS/ISM & ISPS system manuals / Company's Soft and Hardware/PC's etc.; and
-SECURITY IDENTIFICATION BADGES (CREW AND VISITORS) .
 
 
The Buyers shall take over the remaining bunkers and unused lubricating oils in storage tanks and
170
sealed drums and pay the current net market  price (excluding  barging  expenses) at the port and date
171
of delivery of the Vessel Buyers shall take over the bunkers remaining on board with cost as per Platts prices for Singapore published three (3) banking days prior to the Vessel's delivery. Buyers shall also take over the remaining unbroached lubricants respectively in sealed drums/tins or in designated storage tanks not having passed to the engines/equipment through Vessel's system at Sellers' net contract prices of last supply as evidenced by the relevant copies of invoices. Exact quantities of remaining bunkers and lubricating oils shall be measured and agreed by and between the Sellers' and the Buyers' representatives latest by one (1) Banking day prior to expected date of delivery of the Vessel.
172
Payment under this Clause shall be made in cash at the same time and place
173
and in the same currency as the Purchase Price.
174

8.
Documentation
175
   
The place of closing: Athens, Greece
 
176

In exchange for payment of the Purchase Price and delivery of the Vessel the Sellers shall furnish the Buyers and the Buyers shall furnish
the Sellers with the delivery documents stated in this Clause and in
Clause 17 of this Agreement. namely :
 
177
178
a)
Legal Bill of Sale in a form recordable in           (the country in  which  the Buyers  are
179
 
to register the Vessel),  warranting that  the  Vessel  is  free  from  all  encumbrances,  mortgages
180
 
and  maritime   liens  or  any  other  debts   or  claims  whatsoever,  duly  notarially  attested  and
181
 
legalized by the consul of such country or other competent  authority.
182

b)
Current Certificate of  Ownership  issued  by  the  competent  authorities  of  the  flag  state  of
183
 
the Vessel.
184

c)
Confirmation of Class issued within 72 hours prior to delivery.
185

d)
Current Certificate issued by the competent  authorities  stating  that  the  Vessel  is  free  from
186
 
registered encumbrances
187

e)
Certificate of Deletion of the Vessel from the  Vessel's  registry  or  other  official  evidence  of
188
 
deletion appropriate to the Vessel's registry at the time of delivery, or,  in  the  event  that  the
189
 
registry does not  as  a  matter  of  practice  issue  such  documentation  immediately,  a  written
190
 
undertaking by the Sellers to effect deletion from the Vessel's  registry  forthwith  and  furnish  a
191
 
Certificate or other official evidence of deletion to  the  Buyers  promptly  and  latest  within  4
192
 
(four) weeks after the  Purchase  Price  has  been paid and the  Vessel has been delivered.
193

f)
Any  such  additional  documents  as  may  reasonably  be  required  by  the  competent  authorities
194
 
for  the purpose of  registering  the  Vessel, provided  the   Buyers  notify  the  Sellers  of  any  such
195
 
documents as soon as possible after the date of this Agreement
196

At the time of delivery the Buyers and Sellers shall sign and deliver to each other a Protocol of
197
Delivery and Acceptance confirming the date and time of delivery of the Vessel from the Sellers to the
198
Buyers.
199

At the time of delivery the Sellers shall hand over   to the Buyers the classification certificate(s) as well as all
200
Plans etc., which are on board the Vessel. Other certificates which are on board the Vessel shall also
201
be handed over to the Buyers unless the Sellers are required to retain same, in which case the
202
Buyers to have the right to take copies. Other technical documentation which may
203
 
 

 
be in the Sellers' possession shall be promptly forwarded to the Buyers at their expense, if they so
204
request. The Sellers may keep the Vessels log books but the Buyers to have the right to take
205
copies of same at Buyers' account .
 
206
9.       Encumbrances
207

The Sellers warrant that the Vessel, at the time of delivery, is free from all charters, encumbrances,
208
Mortgages, taxies, levies, duties and maritime liens or other liens or any other debts whatsoever and is not subject to any port state or administrative detentions. The Sellers hereby undertake
209
to indemnify the Buyers against all consequences of claims made against the Vessel which have
210
been incurred prior to the time of delivery or arising out of or with respect to events occurring prior to the time of delivery .
211

10.      Taxes, etc.
212

Any taxes, fees and expenses in connection with the purchase and registration under the Buyers' flag
213
shall be for the Buyers' account, whereas similar charges in  connection with the closing of the Sellers'
214
register shall be for the Sellers' account.
215

11.      Condition on delivery
216

The Vessel with everything belonging to her shall be at the Sellers' risk and expense until she is
217
delivered to the Buyers, but subject to the terms and conditions of this Agreement she shall be
218
delivered and taken over "as is where is"   as she was at the time of inspection, fair wear and tear excepted .
219
However, the Vessel shall be delivered free of stowaways, free of cargo and with clean swept holds and with her class maintained without condition/recommendation*,
220
free of average damage affecting the Vessels class, and with her classification certificates and
221
National/international/trading   certificates and Continuous Survey of Machinery (CSM), as well as all other
222
certificates of the Vessel had at the time of   inspection ,
223
clean and valid at the time of the delivery without condition/recommendation * by Class or the relevant authorities at the time of delivery .
224
" Inspection " in this Clause 11, shall mean the Buyers' inspection according to Clause 4 a) or 4 b), if
225
applicable, or the Buyers' inspection prior to the signing of this Agreement. If the Vessel is taken over
226
without inspection, the date of this Agreement shall be the relevant date.
227

*          Notes, if any, in the surveyor's report  which are accepted by the Classification Society
228
            without condition/recommendation are not to be taken into account.
229

12.      Name / markings
230

Upon delivery the Buyers undertake to   change the name of the Vessel and alter funnel markings.
 
231
13.      Buyers' default
232

Should the deposit not be paid in accordance with Clause 2, the Sellers have the right to cancel  this
233
Agreement, and  they shall be entitled to  claim  compensation for their losses and for all expenses
234
incurred together with interest.
235
Should the Purchase Price not be paid in accordance with Clause 3, the Sellers have the right to
236
cancel the Agreement , in which case the deposit  together  with interest  earned  shall  be released  to  the
237
Sellers.  If the  deposit  does  not  cover  their  loss, but in case of such cancellation the Sellers shall not
238
be entitled to claim further compensation for any losses suffered and/or for any expenses incurred together with interest.
239

14.      Sellers' default
240

Should the Sellers fail to give NOR in accordance with Clause 5 a) or fail to be ready
241
to validly complete a legal transfer by the date stipulated in line 61 the Buyers shall have
242
the option of cancelling this Agreement provided always that the Sellers shall be granted a
243
maximum of 3 (three) Banking days after the NOR has been given to make arrangements
244
for the documentation set out in Clause 8 and Clause 17. If after NOR has been given but before
245
the Buyers have taken delivery, the Vessel ceases to be physically ready for delivery and is not
246
made physically ready again in every respect by the date stipulated in line 61 and new NOR
247
given, the Buyers shall retain their option to cancel. In  the  event  that  the  Buyers  elect
248
to  cancel this Agreement  the  deposit  together  with  interest earned shall be released to them
249

immediately.
250
Should the Sellers fail to give NOR by the date stipulated in line 61 or fail to be ready
251
to validly complete a legal transfer as aforesaid they shall make due compensation to the Buyers for
252
their loss and for all expenses together with interest if their failure is due to proven
253
negligence and whether or not the Buyers cancel this Agreement.
254

15.      Buyers' representatives
255

After this Agreement has been signed by both parties and  the deposit  has  been  lodged , the Buyers
256
have the right to place two (2) representatives on board the Vessel at their sole risk and expense upon
257
arrival at  ________ on or about _________ immediately.
258
These representatives/crew shall remain on board until delivery of the Vessel to, and acceptance of the Vessel by, the Buyers for the purpose of familiarisation and in the capacity of
259
observers only, and they shall not interfere in any respect with the operation of the Vessel. The
260
Buyers' representatives/crew shall sign the Sellers' letter of indemnity prior to their embarkation.
261
 
16.      Arbitration
 

a)*              This Agreement (and any non-contractual obligations connected with this Agreement) shall be governed by and construed in accordance with English law and any dispute arising out of this
262
263
Agreement and/or any non-contractual obligations connected with this Agreement shall be referred to
264
arbitration in London in accordance with the Arbitration Acts 1996 or any statutory modification or
265
re-enactment thereof for the time being in force, one arbitrator being appointed by each
266
party. The arbitrators shall be full members of the London Maritime Arbitrators Association ("LMAA"). On the receipt by one party of the nomination in writing of the other party's arbitrator,
267
that party shall appoint their arbitrator within fourteen days, failing which the decision of the
268
single arbitrator appointed shall apply. If two arbitrators are properly appointed
269
they shall appoint a third arbitrator failing which the third arbitrator shall be appointed by the President of the LMMA at the time within 21 (twenty one) days of the two arbitrators being appointed.
270

b)*                 This  Agreement  shall  be  governed  by  and  construed  in  accordance  with  Title  9  of   the
271
United States Code and the Law of the State of New York  and  should  any  dispute  arise  out  of
272
this Agreement, the matter in dispute shall be referred to three  persons  at  New  York,  one  to
273
be appointed by each  of  the  parties  hereto,  and  the  third  by  the  two  so  chosen;  their
274
decision or that of any two of them shall be final, and for purpose of enforcing any  award,  this
275
Agreement may be made a rule of the Court.
276
The proceedings shall be conducted in accordance  with  the  rules  of  the  Society  of  Maritime
277
Arbitrators, Inc.  New York.
278

c)*                  Any dispute arising out of this Agreement shall be referred to arbitration at London in accordance
with the Arbitration Act 1996 and subsequent alterations (if any), LLMAA rules to apply
279
, subject to the procedures applicable there.
280
The laws of England shall govern this Agreement.
281

*                       16 a), 16 b) and 16 c) are altematives; delete whichever is not applicable.  In the absence of
282
deletions, altemative 16 a) to apply .
283

Additional Clauses 17, 18, 19, 20, 21, 22, 23, 24 and 25, inclusive as herein below, are deemed to
be fully incorporated into and form an integral part of this Agreement.

17. Delivery Documents

A. In exchange of the payment of the Purchase Price and other monies due under Clause 3 of this Agreement, the Sellers shall furnish the Buyers with the following delivery documents, namely:
(a)              Three originals of a legal bill of sale in form recordable in the Buyers' new flag in the English language (the "Bill of Sale") in favour of the Buyers, evidencing the transfer of all (100 percent) of the shares and interest in and title to the Vessel to the Buyers and warranting that the Vessel is free from all

mortgages, encumbrances, charters, maritime liens or other liens, claims, taxes, levies, duties and any other debts whatsoever or any port state or administrative detentions, duly executed by the Sellers and duly certified by a notary public and legalized by Apostille.
(b)              Fax or email copy of Transcript of Register issued by the Isle of Man   Registry and dated the delivery date showing the Vessel to be registered in the ownership of the Sellers and free and clean from encumbrances and mortgages to be faxed to the closing meeting in Greece. The original of such Transcript of Register will be provided to the Buyers not later than 10 (ten) Banking days after the delivery date of the Vessel to the Buyers and the Sellers shall provide a written undertaking to the Buyers to that end.
(c)              A certified true copy of the certificate of incorporation of the Sellers certified by the Sellers' Greek counsel.
(d)              An original set of Minutes of all the members of the Board of Directors of the Sellers or Resolutions of the Sellers adopted by unanimous consent approving, authorizing and confirming the entry into this Agreement and any amendments and/or addendums thereto, authorising the sale of the Vessel in accordance with the provisions of this Agreement and authorizing persons to conclude the sale, transfer and delivery of the Vessel to the Buyers and sign, execute and deliver on behalf of the Sellers, inter alia , the Bill of Sale, a protocol of delivery and acceptance and any other document required to be executed by the Sellers in respect of the delivery of the Vessel from the Sellers to the Buyers thereof pursuant to this Agreement and also authorizing the execution of Power(s) of Attorney to a specific person or persons empowering them to execute and deliver such documents and take such steps as may be necessary or appropriate in order to transfer and deliver the Vessel to the Buyers, such Minutes to be duly certified by a notary public and legalized by Apostille.
(e)              Original written resolutions of the Shareholder(s) , approving the BOD minutes or Resolutions of the Sellers under 17. A. (d) above, duly certified by a notary public and legalized by Apostille.
(f)              An original Power of Attorney of the Sellers executed pursuant to the Minutes or Resolutions referred to in item 17. A. (d) hereinabove duly certified by a notary public and legalized by Apostille.
(g)              An original set of a director's certificate of incumbency of the Sellers certifying the name of all present directors/officers and shareholders of the Sellers and attaching copies of all the correct and complete and up-to-date constitutional documents in full force and effect of the Sellers (Memorandum and Articles of Association) with any amendments .
(h)              An original Certificate of Goodstanding of the Sellers dated no more than 10 (ten) Banking days prior to the delivery date showing the Sellers to be in good standing under the laws of the British Virgin Islands .
(i)              Two original Protocols of Delivery and Acceptance (one for the Sellers and one for the Buyers to be exchanged at the closing in Greece) confirming the delivery of the Vessel by the Sellers to the Buyers.
(j)              Commercial Invoice in three (3) copies dated the delivery date, stating the full particulars of the Vessel and the Purchase Price of the Vessel signed and stamped by the Sellers .


(k)              An original letter of confirmation from the Sellers stating that to the best of their knowledge the Vessel is not blacklisted by Arab Boycott League in Damascus or any other organisation, nation, government, state, country, political sub-division or union as of the delivery date.
(l) (i) A letter of undertaking by the Sellers to effect deletion from the Vessel's Registry forthwith and provide the Buyers with the original Transcript of Closed Register from the Vessel's Registry within 10 (ten) Banking days after delivery of the Vessel and to also provide the Vessel's new flag with a Closed Continuous Synopsis Record issued by the Vessel's Registry within 30 (thirty) running days after delivery of the Vessel; (ii) A copy of the Transcript of Closed Register to be provided to the Buyers on the delivery date; and (iii) a Closed Continuous Synopsis Record from the Vessel's Registry to be issued and delivered to the Vessel's new flag administration as paragraph (o)(i) above within 30 (thirty) running days after the delivery of the Vessel (unless the Buyers waive this item (I) (i) (ii) and (iii) ) .
(m) Original Class Maintenance Certificate issued by the Vessel's present Class and dated not more than 3 (three) Banking days prior to the date of delivery of the Vessel evidencing that the Vessel is class maintained without condition/recommendation.
(n) An original letter of confirmation from the Sellers addressed to the Buyers confirming that the Vessel has not traded with or called in Israel, Cuba, Iran, Syria, North Korea or any other areas sanctioned or boycotted by the European Union and/or the United States of America and/or the United Nations, dated the delivery date. In case however the Vessel has traded in Israel and/or Iran, Sellers to provide an original letter of confirmation addressed to the Buyers confirming the following: i) the Vessel has not traded with or called in Cuba, Syria, North Korea or any other areas sanctioned or boycotted by the European Union and/or the United States of America and/or the United Nations and ii) that if the Vessel has traded Israel and/or Iran, this was with legal cargo for humanitarian purposes, dated the delivery date .
(o) An original letter of confirmation from the Sellers addressed to the Buyers confirming that the Vessel is entitled to trade worldwide within Institute Warranty Limits without restriction or limitation.
(p) An original letter of confirmation from the Sellers that to the best of their knowledge the Vessel has not touched bottom or suffered any underwater damage from her last drydock up to the date of her delivery.

(q)   One original letter from the Sellers confirming that any outstanding radio accounts shall be settled by the Sellers as soon as practically possible after the Vessel's delivery with no liability regarding the same to be incurred against the Buyers.

(r) Recent AGM free certificate from authorized company, if available.

(s) Most recent original Certificate for Chinese Tonnage Tax dues at no cost, if available .



(t) Any such additional documents as may be reasonably required by the Buyers' flag authorities for the purpose of transferring title and registering the Vessel, provided that the Buyers notify the Sellers of any such documents as soon as possible and in no event later than 7 (seven) days prior to the expected delivery of the Vessel.

B. In exchange of delivery of the Vessel, the Buyers shall furnish the Sellers with the following delivery documents, namely:
(a) Copy of the Certificate of Incorporation of the Buyers, certified as true by the Buyers' Greek Legal Counsel.
(b) Original Good Standing Certificate of the Buyers dated no more than 7 (seven) Banking prior to the delivery date showing the Buyers to be in good standing under the laws of the Marshall Islands .
(c) An original set of resolutions or minutes of the Board of Directors of the Buyers authorising the purchase of the Vessel in accordance with the provisions of this Agreement, the ratification of this Agreement signed and the execution on behalf of the Buyers of (inter alia) the acceptance of the Bill of Sale (if applicable), a protocol of delivery and acceptance and any other document required to be executed by the Buyers in respect of the delivery of the Vessel from the Sellers to the Buyers pursuant to this Agreement, and authorising further execution of a Power of Attorney authorising the execution any and all other documents and undertakings provided in this Agreement such resolutions to be duly legalised by Apostille.
(d) An original set of an officer's certificate of incumbency of the Buyers certifying the names of all present directors/officers of the Buyers and attaching copies of all correct and complete constitutional documents in full force and effect of the Buyers (Copies of the Articles of Incorporation and By-Laws (together with any amendment thereto up to and including the delivery date)).
(e) An original Power of Attorney of the Buyers issued in accordance with the resolutions referred to under 17. B. (c) above authorising the persons signing the documents on their behalf such power of attorney to be duly legalised by Apostille .
(f) Original written resolutions of the Buyers' Shareholder, approving the BOD minutes under 17. B. (c), such resolutions to be duly legalised by Apostille.
The parties undertake to exchange drafts of the above documents and agree final formats latest 7 (seven) Banking days prior to the delivery date of the Vessel.
18. DRYDOCKING

NO DRYDOCKING CLAUSE TO APPLY AND CLAUSE 6 OF SALESFORM 1993 IS DELETED.

HOWEVER, PROMPTLY BEFORE OR AFTER THE VESSEL'S ARRIVAL AT THE DELIVERY PORT AND PRIOR TO THE VESSEL'S DELIVERY THE BUYERS HAVE THE RIGHT TO CARRY OUT AN

INSPECTION OF THE VESSEL'S UNDERWATER (BELOW SUMMER LOADLINE) PARTS BY CLASS APPROVED DIVERS WITH VIDEO LINK TO THE ATTENDING CLASS SURVEYOR, SUCH DIVERS INSPECTION TO BE AT BUYERS' RISK AND EXPENSE.

BUYERS TO ADVISE SELLERS FIVE (5) DAYS PRIOR TO DELIVERY IF THEY INTEND TO CARRY OUT UNDERWATER INSPECTION. IF THE DECLARED BY SELLERS DELIVERY PORT IS NOT FEASIBLE FOR AN UNDERWATER INSPECTION, BUYERS SHALL PROMPTLY ADVISE SELLERS OF AN ALTERNATIVE PLACE NEAR TO THE DELIVERY PORT, TO BE MUTUALLY AGREED, WHERE SELLERS ARE TO MAKE THE VESSEL AVAILABLE, AT SELLERS' COST (EXCEPT FOR THE BUNKERS' COST WHICH SHALL BE BORNE EQUALLY BETWEEN THE SELLERS AND THE BUYERS), FOR SUCH AN INSPECTION. THE EXTENT OF THE INSPECTION AND CONDITIONS UNDER WHICH IT IS PERFORMED SHALL BE TO THE SATISFACTION OF THE CLASSIFICATION SOCIETY.

THE DIVERS INSPECTION TO BE CARRIED OUT IN A MANNER AND UNDER CONDITIONS CONSIDERED SUITABLE BY THE ATTENDING CLASS SURVEYOR FOR SUCH UNDERWATER INSPECTION. ATTENDANCE ARRANGEMENTS AND FEES FOR THE ATTENDING CLASS SURVEYOR SHALL BE FOR THE BUYERS' ACCOUNT AND THE COST OF THE DIVERS FOR THE BUYERS' ACCOUNT.

A) IF ANY DAMAGE IS FOUND TO THE VESSELS UNDERWATER PARTS WHICH LEADS TO IMPOSING RECOMMENDATION(S) AGAINST THE VESSEL, AND REQUIRES SAME TO BE REPAIRED PRIOR TO THE VESSEL'S NEXT DUE DRYDOCKING DATE, THEN THE SELLERS SHALL REPAIR SUCH DAMAGE TO THE SATISFACTION OF CLASSIFICATION SOCIETY AT THE SELLERS' TIME AND EXPENSE, PRIOR TO THE VESSEL'S DELIVERY TO THE BUYERS. SHOULD THE VESSEL BE REQUIRED TO DRYDOCK TO EFFECT SUCH REPAIRS TO CLASS SATISFACTION, THEN THE BUYERS SHALL HAVE THE RIGHT TO SCRAPE/PAINT THE VESSEL'S UNDERWATER PARTS AT THE BUYERS' RISK & EXPENSE WHILST THE VESSELS IS IN DRYDOCK. ALL COSTS AND MATERIALS ASSOCIATED WITH THE BUYERS' WORKS AND ANY EXTRA DRYDOCKING TIME REQUIRED FOR THE BUYERS TO CARRY OUT/COMPLETE THEIR WORKS SHALL BE FOR THE BUYERS' ACCOUNT. SUCH BUYERS' WORKS SHALL NOT INTERFERE WITH THE SELLERS' WORKS AND NOT TO DELAY THE DELIVERY OF THE VESSEL. IN THE EVENT THAT THE SELLERS HAVE COMPLETED THEIR WORKS IN THE DRYDOCK TO THE SATISFACTION OF CLASS AND THE BUYERS WORKS ARE NOT YET COMPLETED, THEN THE SELLERS HAVE THE RIGHT TO TENDER NOR FOR DELIVERY TO THE BUYERS WHILST THE VESSEL IS IN DRYDOCK. IN THE EVENT OF THE VESSEL BEING REQUIRED TO DRYDOCK FOR REPAIRS AND THERE ARE NO SUITABLE DRYDOCKING FACILITIES AVAILABLE AT THE DELIVERY PORT, THEN THE SELLERS SHALL TAKE THE VESSEL IN BALLAST TO THE NEAREST PORT/PLACE WHERE SUITABLE DRYDOCKING FACILITIES ARE AVAILABLE, AND A NEW DELIVERY PORT TO BE AGREED BETWEEN THE PARTIES. IT IS HEREBY MUTUALLY AGREED BY THE SELLERS AND THE BUYERS, THAT IN THE EVENT OF DAMAGE AFFECTING CLASS BEING FOUND DURING THE

DIVERS INSPECTIONS AS MENTIONED ABOVE, THEN THE AGREED CANCELLING DATE SHALL AUTOMATICALLY BE EXTENDED BY THE ADDITIONAL TIME REQUIRED FOR THE DRYDOCKING, REPAIRS AND EXTRA STEAMING, BUT LIMITED TO A MAXIMUM OF FOURTEEN (14) RUNNING DAYS. CLASS ATTENDANCE FEES AND DIVERS COSTS TO BE FOR SELLERS' ACCOUNT.

B) IF ANY DAMAGE(S) TO THE VESSEL'S UNDERWATER PARTS   IS FOUND WHICH LEADS TO CLASS IMPOSING A RECOMMENDATION(S) AGAINST THE VESSEL BUT AGREE TO POSTPONE PERMANENT REPAIRS TO SAME UNTIL THE VESSEL'S NEXT DUE DRYDOCKING DATE THEN, IN LIEU OF THE SELLERS REPAIRING SUCH DAMAGE(S), THE SELLERS TO COMPENSATE THE BUYERS BY WAY OF PAYMENT IN CASH TO THE BUYERS NOMINATED ACCOUNT AND THE BUYERS SHALL TAKE DELIVERY OF THE VESSEL AS SHE IS WITH SUCH RECOMMENDATION(S) OUTSTANDING. THE SELLERS AND THE BUYERS SHALL EACH OBTAIN A QUOTATION FOR THE REPAIR OF SUCH DAMAGE FROM TWO (2) SEPARATE REPUTABLE SHIP REPAIR YARDS IN THE AREA, AND THE COMPENSATION AMOUNT TO THE BUYERS SHALL BE THE AVERAGE OF THE TWO (2) REPAIR QUOTATIONS RECEIVED BY THE BUYERS AND SELLERS RESPECTIVELY AS MENTIONED ABOVE. CLASS ATTENDANCE FEES AND DIVERS COSTS TO BE FOR SELLERS' ACCOUNT.

19. P AND C
The terms and conditions of the sale to be kept strictly private and confidential by all parties involved, save as required otherwise by the Securities and Exchange Commission or US stock listed exchange rules applicable to the Buyers.
20. Notices
Any and all notices and communication in connection with this Agreement shall be in English in writing and shall be sent as follows:

(a)
if to the Sellers at:
Attention: Asteria Bagouli
Telephone: +302108910288
Fax: +302108910295
E-mail: legal@ensh.com
or such other address as the Sellers may notify the Buyers.

(b)
If to the Buyers at:
Attention: Stamatios Tsantanis
Telephone: +30 213 0181 507
Fax: +30 210 9638404
E-mail: snt@seanergy.gr  
or such other address as the Buyers may notify the Sellers
21. Performance Guarantee
Seanergy Maritime Holdings Corp., of the Marshall Islands ("Seanergy") guarantees the performance by the Buyer of all of its obligations under this Agreement.
22. Contracts (Rights of Third Parties) Act 1999
Nothing contained in this Agreement confers or purports to confer on any third party any benefit or any right to enforce any term hereof pursuant to the Contracts (Rights of Third Parties) Act 1999.


23. Purchase Agreement & this Agreement
This Agreement is one of the "MOAs" referred to and defined in the Purchase Agreement. If there is any inconsistency between the terms and conditions of this Agreement and the terms and conditions of said Purchase Agreement, then the terms and conditions of the Purchase Agreement shall prevail.
24. Condition Precedent to this Agreement
The obligations of the Buyer and Seanergy's performance guarantee under Clause 21 to consummate the transactions contemplated by this Agreement and take delivery of the Vessel shall be subject to the fulfillment, at or prior to the delivery date of the Vessel, of the following condition:
The Buyer shall have secured financing for the acquisition of the Vessel.
In the event that the above condition is not fulfilled at or prior to the delivery date of the Vessel, this Agreement shall forthwith become void and null and there shall be no liability on the part of any party hereto and Seanergy except that nothing herein shall relieve any party hereto from liability for any willful breach of any provision hereof.
25. Entire Agreement
The written terms of this Agreement comprise the entire agreement between the Buyers and the Sellers in relation to the sale and purchase of the Vessel.

For the Sellers
 
For the Buyers
     
     
     
/s/ Georgios Kalogeropoulos
 
/s/ Stamatios Tsantanis
Name: Georgios Kalogeropoulos
 
Name: Stamatios Tsantanis
Title: Authorized Director
 
Title: Authorized Director
     


 
Exhibit 4.33
 

 
 
MEMORANDUM OF AGREEMENT
Norwegian Shipbrokers' Association's Memorandum of Agreement for sale and purchase
of ships. Adopted by The Baltic and International Maritime Council (BIMCO) in 1956.
Code-name
SALEFORM 1993

 
 
Dated: 6 August 2015

Cape Cod Marine Inc., of the British Virgin Islands
hereinafter called the Sellers, have agreed to sell, and
1
 

PREMIER MARINE CO., of the Marshall Islands
hereinafter called the Buyers, have agreed to buy the
2

Name: GENEROUS
3

Classification Society/Class:
BV
4
Built:   2010
By: Sundong Shipbuilding & Marine Eng. Co. Ltd., South Korea
5
Flag: Isle of Man
Place of Registration:   Douglas
6
Call sign: 2CPA5
Grt/Nrt: 88.479/56.828
7
Register IMO Number: 9398747
8
hereinafter called the Vessel, on the following terms and conditions:
9
Definitions
10

" Banking days " are days on which banks are open in the country of the currency
11
Stipulated for the Purchase Price in Clause 1 ,   and in the place of closing stipulated in Clause 8, in the country of the Vessel's flag ,   Greece, USA, UK and in the country of the Vessel's mortgagee bank .
12

" in writing " or " written " means a letter handed over from the Sellers to the Buyers or vice versa,
13
a registered letter, telefax or other modern form of written communication .
14
 
" Classification Society " or " Class " means the Society referred to in line 4.
 
" Purchase Agreement " means the purchase agreement dated 6 August 2015 made by and among, inter alios, Seanergy (as defined in Clause 21 hereof) and the Sellers.
 
15
1.       Purchase Price:
USD 29,365,000 (United States Dollars twenty nine million three hundred sixty five thousand) only
16
 
2.              Deposit
17

As security for the correct fulfilment of this Agreement  the  Buyers shall pay a deposit of 1 0 %
18
(ten per cent) of the Purchase Price within   banking days from the date of this
19
Agreement. This deposit shall be placed with
20
and   held  by them in a joint  account  for the  Sellers  and  the  Buyers, to be released in accordance
21
with joint written instructions of the  Sellers  and   the  Buyers.  Interest, if any, to  be  credited to  the
22
Buyers. Any fee charged  for holding  the said deposit  shall  be  borne  equally  by  the  Sellers  and  the
23
Buyers.
24

3.              Payment
 
25
The said Purchase Price   shall be paid in full free of bank charges by Buyers to Sellers' bank account, details of which shall be furnished by Sellers,
26
on delivery of the Vessel, but not later than 3 (three) Banking days after the Vessel is in every respect
27
physically ready for delivery in accordance with the terms and conditions of this Agreement and
28
Notice of Readiness ("NOR") has been given in accordance with Clause 5.
 
29
 
4              Inspections
30
4              Inspections
30

a)*
The Buyers have waived the physical inspection for the Vessel and have accepted her. The Buyers have inspected and accepted the Vessel's classification records. Therefore the sale is outright and definite, subject only to the terms and conditions of this Agreement . The Buyers
31
 
have also inspected the Vessel at/in   [               ] on   [               ]
32
 
and have accepted the Vessel following this inspection and   the sale is outright and definite,
33
 
subject only to the terms and conditions of this Agreement.
34

b)*
The  Buyers  shall   have  the right  to   inspect  the  Vessel's     classification  records   and   declare
35
 
whether same are accepted  or  not   within
36

The Sellers shall provide for   inspections of the Vessel at/in
37

The  Buyers  shall  undertake  the  inspection   without  undue  delay  to  the  Vessel.   Should  the
38
Buyers  cause  undue  delay  they  shall  compensate  the  Sellers  for the losses thereby incurred.
39
The  Buyers  shall  inspect  the  Vessel without opening up   and without    cost  to  the  Sellers
40
During  the  inspection,  the  Vessel's  deck  and  engine  log  books  shall  be  made  available for
41
examination  by  the  Buyers. If the  Vessel  is  accepted  after  such  inspection,  the  sale shall
42
become outright and definite, subject  only  to  the  terms  and  conditions  of  this  Agreement,
43
provided the  Sellers receive   written notice  of  acceptance  from  the  Buyers  within  72 hours
44
after  completion  of  such  inspection.
45
Should  notice  of  acceptance  of   the  Vessel's classification  records  and  of  the Vessel not be
46
received  by  the  Sellers  as  aforesaid, the deposit together  with   interest earned   shall  be
47
released  immediately to the  Buyers, whereafter  this  Agreement shall be   null and void.
48

*
4 a) and 4b) are alternatives; delete whichever is not applicable. In the absence of deletions,
49
 
alternative 4a) to apply.
50

5.              Notices, time and place of delivery
51

a)
The Sellers shall keep the Buyers well informed of the Vessel's itinerary   and shall
52
 
provide the Buyers with 30/20/15/10/7/5/ 3   approximate and 2 and 1 definite day s notice s of the expected time and place of arrival at the
53
 
intended time and place of drydocking/underwater inspection/ delivery. When the Vessel is at the
54
 
place of delivery and in every respect physically ready for delivery in accordance with this
55
 
Agreement, the Sellers shall give the Buyers a written NOR for delivery.
 
56
b)
The Vessel shall be delivered to the Buyers free of stowaways, free of cargo, with clean swept holds
57
 
safely afloat at a safe and accessible berth, port or anchorage worldwide .
58
   
59
 
Expected time of delivery : 17 August 2015 – 30 November 2015 or such later date at Buyers' option.
 
60
 
Date of cancelling (see Clauses 5 c), 6 b) (iii) and 14): 30 November 2015 or such later date at Buyers' option .
61

c)
If the Sellers anticipate that, notwithstanding the exercise of due diligence by them, the
62
 
Vessel will not be ready for delivery by the cancelling date they may notify the Buyers in
63
 
writing stating the date when they anticipate that the Vessel will be ready for delivery and
64
 
propose a new cancelling date. Upon receipt of such notification the Buyers shall have the
65
 
option of either cancelling this Agreement in accordance with Clause 14 within 4 7 running
66
 
days of receipt of the notice or of accepting the new date as the new cancelling date. If the
67
 
Buyers have not declared their option within 4   7 running days of receipt of the Sellers'
68
 
notification or if the Buyers accept the new date, the date proposed in the Sellers' notification
69
 
shall be deemed to be the new cancelling date and shall be substituted for the cancelling
70
 
date stipulated in line 61.
71

 
If this Agreement is maintained with the new cancelling date all other terms and conditions
72
 
hereof including those contained in Clauses 5 a) and 5 c) shall remain unaltered and in full
73
 
force and effect. Cancellation or failure to cancel shall be entirely without prejudice to any
74
 
claim for damages the Buyers may have under Clause 14 for the Vessel not being ready by
75
 
the original cancelling date.
76


d)
Should the Vessel become an actual, constructive or compromised total loss before delivery
77
 
the deposit together  with  interest  earned shall be released immediately to the Buyers
78
 
whereafter this Agreement shall be null and void .
79

6.              Drydocking / Divers Inspection - SEE CLAUSE 18 of this Agreement .
   80

a)**
The Sellers shall place the Vessel in drydock at the port of delivery for inspection by the
81
 
Classification Society of the Vessel's underwater parts below the deepest load line, the
82
 
extent of the inspection being in accordance with the Classification Society's rules.  If the
83
 
rudder, propeller, bottom or other underwater parts below the deepest load line are found
84
 
broken, damaged or defective so as to affect the Vessel's class, such defects shall be made
85
 
good at the Sellers' expense to the satisfaction of the Classification Society without
86
 
condition/recommendation*.
87

b)**
(i)              The Vessel is to be delivered without drydocking.  However, the Buyers shall
88
 
have the right at their expense to arrange for an underwater inspection by a diver approved
89
 
by the Classification Society   prior to the delivery of the Vessel.  The Sellers shall at their
90
 
cost make the Vessel available for such inspection. The extent of the inspection and the
91
 
conditions under which it is performed shall be to the satisfaction of the Classification
92
 
Society. If the conditions at the port of delivery are unsuitable for such inspection, the
93
 
Sellers shall make the Vessel available   at a suitable alternative place near to the delivery
94
 
port.
95

 
ii)              If the rudder, propeller, bottom or other underwater parts below the deepest load line
96
 
are found broken, damaged or defective so as to affect the Vessel's class, then unless
97
 
repairs can be carried out afloat to the satisfaction of the Classification Society, the Sellers
98
 
shall arrange for the Vessel to be drydocked at their expense for inspection by the
99
 
Classification Society of the Vessel's underwater parts below the deepest load line, the
100
 
extent of the inspection being in accordance with the Classification Society's rules.  If the
101
 
rudder, propeller, bottom or other underwater parts below the deepest load line are found
102
 
broken, damaged or defective so as to affect the Vessel's class, such defects shall be made
103
 
good by the Sellers at their expense to the satisfaction of the Classification Society
104
 
without condition/recommendation*. In such event the Sellers are to pay also for the cost of
105
 
the underwater inspection and the Classification Society's attendance.
106

 
(iii)              If the Vessel is to be drydocked pursuant to Clause 6 b) (ii) and no suitable dry-
107
 
docking facilities are available at the port of delivery, the Sellers shall take the Vessel
108
 
to a port where suitable drydocking facilities are available, whether within or outside the
109
 
delivery range as per Clause 5 b). Once drydocking has taken place the Sellers shall deliver
110
 
the Vessel at a port within the delivery range as per Clause 5 b) which shall, for the
111
 
purpose of this Clause, become the new port of delivery. In such event the cancelling date
112
 
provided for in Clause 5 b) shall be extended by the additional time required for the
113
 
drydocking and extra steaming, but limited to a maximum of 14 running days.
114

c)
If the Vessel is drydocked pursuant to Clause 6 a) or 6 b) above
115

 
(i)              the Classification Society may require survey of the tailshaft system, the extent of
116
 
the survey being to the satisfaction of the Classification surveyor. If such survey is not
117
 
required by the Classification Society, the Buyers shall have the right to require the tailshaft
118
 
to be drawn and surveyed by the Classification Society, the extent of the survey being in
119
 
accordance with the Classification Society's rules for tailshaft survey and consistent with
120
 
the current stage of the Vessel's survey cycle. The Buyers shall declare whether they
121
 
require the tailshaft to be drawn and surveyed not later than by the completion of the
122
 
inspection by the Classification Society. The drawing and refitting of the tailshaft shall be
123
 
arranged by the Sellers. Should any parts of the tailshaft system be condemned or found
124
 
defective so as to affect the Vessel's class, those parts shall be renewed or made good at
125
 
the Sellers' expense to the satisfaction of the Classification Society without
126
 
condition/recommendation*.
127

 
(ii)              the expenses relating to the survey of the tailshaft system shall be borne
128
 
by the Buyers unless the Classification  Society requires such survey to be carried out, in
129
 
which case the Sellers shall pay these expenses. The Sellers shall also pay the expenses
130
 
if the Buyers require the survey  and  parts of the system are condemned or found defective
131
 
or broken so as to affect the Vessel's class*.
132


 
(iii)              the expenses in connection with putting the Vessel in and taking her out of
133
 
drydock, including the drydock dues and the Classification Society's fees shall be paid by
134
 
the Sellers if the Classification Society issues any condition/recommendation* as a result
135
 
of the survey or if it requires survey of the tailshaft system. In all other cases the Buyers
136
 
shall pay the aforesaid expenses, dues and fees.
137

 
(iv)              the Buyers' representative shall have the right to be present in the drydock, but
138
 
without interfering with the work or decisions of the Classification surveyor.
139

 
(v)              the Buyers shall have the right to have the underwater parts of the Vessel
140
 
cleaned and painted at their risk and expense without interfering with the Sellers' or the
141
 
Classification surveyor's work, if any, and without affecting the Vessel's timely delivery. If,
142
 
however, the Buyers' work in drydock is still in progress when the Sellers have
143
 
completed the work which the Sellers are required to do, the additional docking time
144
 
needed to complete the Buyers' work shall be for the Buyers' risk and expense. In the event
145
 
that the Buyers' work requires such additional time, the Sellers may upon completion of the
146
 
Sellers' work tender Notice of Readiness for delivery whilst the Vessel is still in drydock
147
 
and the Buyers shall be obliged to take delivery in accordance with Clause 3, whether
148
 
the Vessel is in drydock or not and irrespective of Clause 5 b).
149

*
Notes, if any, in the surveyor's report which are accepted by the Classification Society
150
 
without condition/recommendation are not to be taken into account.
151

**
6 a) and 6 b) are alternatives; delete whichever is not applicable. In the absence of deletions,
152
 
alternative 6 a) to apply
153

7.
Spares/bunkers, etc.
154

The Sellers shall deliver the Vessel to the Buyers with everything belonging to her on board and on
155
shore , including broached/unbroached stores and provisions and spares without extra payment . All spare parts and spare equipment including spare tail-end shaft(s) and/or spare
156
propeller(s)/propeller blade(s), if any, belonging to the Vessel at the time of inspection used or
157
unused, whether on board or not shall become the Buyers' property.
158
Forwarding charges, if any, shall be for the Buyers' account. The Sellers are not required to replace spare
159
parts including spare tail-end shaft(s) and spare propeller(s)/propeller blade(s) which are taken out
160
of spare and used as replacement prior to delivery, but the replaced items shall be the property of
161
the Buyers. The radio installation, GMDSS and navigational equipment shall be included in the sale without extra payment if they are the property of the Sellers.
162
Unused stores and provisions shall be included in the sale and be taken over
163
by the Buyers without extra payment .
164

The Sellers have the right to take ashore crockery, plates, cutlery, linen and other articles bearing the
165
Sellers' flag or name, provided they replace same with similar unmarked items. Library, forms, etc .,
166
exclusively for use in the Sellers' vessel(s), shall be excluded without compensation. Captain's,
167
Officers' and Crew's personal belongings including the slop chest are to be excluded from the sale,
168
as well as the following additional items (including items on hire):
 
-UNITOR'S OXYGEN/ACETYLENE/FREON CYLINDERS, EMPTY/FULL;
-MARICHEM SYSTEM MHCS 200;
-ORIGINAL FLAG CERTIFICATES (Registry – Intern. Tonnage – Radio Station Licence – Minimum Safe Manning – CLCertificate - MLCertificate )– necessary for Ship's deletion from the articles;
-LIBRARY, FORMS, RECORDS, REPORTS, DECK and ENGINE Log Books, CORRESPONDENCE exclusively used by the Sellers;
-CD ROM QSEMS;
-SEAGULL TRAINING CDs;
-Lloyds MARINER – Risk Assessment CDs;
-LR Manager (Working hours) CDs;
-AMVER DISKETTE;
-EST SAFETY LABELS (35);
-ISPS CODE / CD / INSTRUCTIONS AND SECURITY AWARENESS CBT 115 AND ISPS TRAINER;
-OWNERS LISTS/ISM & ISPS system manuals / Company's Soft and Hardware/PC's etc.; and
-SECURITY IDENTIFICATION BADGES (CREW AND VISITORS) .
 
169


The Buyers shall take over the remaining bunkers and unused lubricating oils in storage tanks and
170
sealed drums and pay the current net market  price (excluding  barging  expenses) at the port and date
171
of delivery of the Vessel Buyers shall take over the bunkers remaining on board with cost as per Platts prices for Singapore published three (3) banking days prior to the Vessel's delivery. Buyers shall also take over the remaining unbroached lubricants respectively in sealed drums/tins or in designated storage tanks not having passed to the engines/equipment through Vessel's system at Sellers' net contract prices of last supply as evidenced by the relevant copies of invoices. Exact quantities of remaining bunkers and lubricating oils shall be measured and agreed by and between the Sellers' and the Buyers' representatives latest by one (1) Banking day prior to expected date of delivery of the Vessel.
172
Payment under this Clause shall be made in cash at the same time and place
173
and in the same currency as the Purchase Price.
174

8.
Documentation
175
   
The place of closing: Athens, Greece
176

In exchange for payment of the Purchase Price and delivery of the Vessel the Sellers shall furnish the Buyers and the Buyers shall furnish the Sellers with the delivery documents stated in this Clause and in Clause 17 of this Agreement. namely :
 
177
178
a)
Legal Bill of Sale in a form recordable in           (the country in  which  the Buyers  are
179
 
to register the Vessel),  warranting that  the  Vessel  is  free  from  all  encumbrances,  mortgages
180
 
and  maritime   liens  or  any  other  debts   or  claims  whatsoever,  duly  notarially  attested  and
181
 
legalized by the consul of such country or other competent  authority.
182

b)
Current Certificate of  Ownership  issued  by  the  competent  authorities  of  the  flag  state  of
183
 
the Vessel.
184

c)
Confirmation of Class issued within 72 hours prior to delivery.
185

d)
Current Certificate issued by the competent  authorities  stating  that  the  Vessel  is  free  from
186
 
registered encumbrances
187

e)
Certificate of Deletion of the Vessel from the  Vessel's  registry  or  other  official  evidence  of
188
 
deletion appropriate to the Vessel's registry at the time of delivery, or,  in  the  event  that  the
189
 
registry does not  as  a  matter  of  practice  issue  such  documentation  immediately,  a  written
190
 
undertaking by the Sellers to effect deletion from the Vessel's  registry  forthwith  and  furnish  a
191
 
Certificate or other official evidence of deletion to  the  Buyers  promptly  and  latest  within  4
192
 
(four) weeks after the  Purchase  Price  has  been paid and the  Vessel has been delivered.
193

f)
Any  such  additional  documents  as  may  reasonably  be  required  by  the  competent  authorities
194
 
for  the purpose of  registering  the  Vessel, provided  the   Buyers  notify  the  Sellers  of  any  such
195
 
documents as soon as possible after the date of this Agreement
196

At the time of delivery the Buyers and Sellers shall sign and deliver to each other a Protocol of
197
Delivery and Acceptance confirming the date and time of delivery of the Vessel from the Sellers to the
198
Buyers.
199

At the time of delivery the Sellers shall hand over   to the Buyers the classification certificate(s) as well as all
200
Plans etc., which are on board the Vessel. Other certificates which are on board the Vessel shall also
201
be handed over to the Buyers unless the Sellers are required to retain same, in which case the
202
Buyers to have the right to take copies. Other technical documentation which may
203
be in the Sellers' possession shall be promptly forwarded to the Buyers at their expense, if they so
204
request. The Sellers may keep the Vessels log books but the Buyers to have the right to take
205
copies of same at Buyers' account .
 
206
9.          Encumbrances
207

The Sellers warrant that the Vessel, at the time of delivery, is free from all charters, encumbrances,
208
Mortgages, taxies, levies, duties and maritime liens or other liens or any other debts whatsoever and is not subject to any port state or administrative detentions. The Sellers hereby undertake
209
to indemnify the Buyers against all consequences of claims made against the Vessel which have
210
been incurred prior to the time of delivery or arising out of or with respect to events occurring prior to the
211

time of delivery .

10.          Taxes, etc.
212

Any taxes, fees and expenses in connection with the purchase and registration under the Buyers' flag
213
shall be for the Buyers' account, whereas similar charges in  connection with the closing of the Sellers'
214
register shall be for the Sellers' account.
215

11.          Condition on delivery
216

The Vessel with everything belonging to her shall be at the Sellers' risk and expense until she is
217
delivered to the Buyers, but subject to the terms and conditions of this Agreement she shall be
218
delivered and taken over "as is where is"   as she was at the time of inspection, fair wear and tear excepted .
219
However, the Vessel shall be delivered free of stowaways, free of cargo and with clean swept holds and with her class maintained without condition/recommendation*,
220
free of average damage affecting the Vessels class, and with her classification certificates and
221
National/international/trading   certificates and Continuous Survey of Machinery (CSM), as well as all other
222
certificates of the Vessel had at the time of   inspection ,
223
clean, valid and unextended for a minimum period of 3 (three)   months from the time of the delivery without condition/recommendation * by Class or the relevant authorities at the time of delivery .
224
" Inspection " in this Clause 11, shall mean the Buyers' inspection according to Clause 4 a) or 4 b), if
225
applicable, or the Buyers' inspection prior to the signing of this Agreement. If the Vessel is taken over
226
without inspection, the date of this Agreement shall be the relevant date.
227

*          Notes, if any, in the surveyor's report  which are accepted by the Classification Society
228
            without condition/recommendation are not to be taken into account.
229

12.          Name / markings
230

Upon delivery the Buyers undertake to   change the name of the Vessel and alter funnel markings.
 
231
13.          Buyers' default
232

Should the deposit not be paid in accordance with Clause 2, the Sellers have the right to cancel  this
233
Agreement, and  they shall be entitled to  claim  compensation for their losses and for all expenses
234
incurred together with interest.
235
Should the Purchase Price not be paid in accordance with Clause 3, the Sellers have the right to
236
cancel the Agreement , in which case the deposit  together  with interest  earned  shall  be released  to  the
237
Sellers.  If the  deposit  does  not  cover  their  loss, but in case of such cancellation the Sellers shall not
238
be entitled to claim further compensation for any losses suffered and/or for any expenses incurred together with interest.
239

14.          Sellers' default
240

Should the Sellers fail to give NOR in accordance with Clause 5 a) or fail to be ready
241
to validly complete a legal transfer by the date stipulated in line 61 the Buyers shall have
242
the option of cancelling this Agreement provided always that the Sellers shall be granted a
243
maximum of 3 (three) Banking days after the NOR has been given to make arrangements
244
for the documentation set out in Clause 8 and Clause 17. If after NOR has been given but before
245
the Buyers have taken delivery, the Vessel ceases to be physically ready for delivery and is not
246
made physically ready again in every respect by the date stipulated in line 61 and new NOR
247
given, the Buyers shall retain their option to cancel. In  the  event  that  the  Buyers  elect
248
to  cancel this Agreement  the  deposit  together  with  interest earned shall be released to them
249
immediately.
250
Should the Sellers fail to give NOR by the date stipulated in line 61 or fail to be ready
251
to validly complete a legal transfer as aforesaid they shall make due compensation to the Buyers for
252
their loss and for all expenses together with interest if their failure is due to proven
253
negligence and whether or not the Buyers cancel this Agreement.
254

15.          Buyers' representatives
255

After this Agreement has been signed by both parties and  the deposit  has  been  lodged , the Buyers
256
have the right to place two (2) representatives on board the Vessel at their sole risk and expense upon
257
arrival at  ________ on or about _________ immediately.
258


These representatives/crew shall remain on board until delivery of the Vessel to, and acceptance of the Vessel by, the Buyers for the purpose of familiarisation and in the capacity of
259
observers only, and they shall not interfere in any respect with the operation of the Vessel. The
260
Buyers' representatives/crew shall sign the Sellers' letter of indemnity prior to their embarkation.
261
 
 
 
16.          Arbitration
262

a)*              This Agreement (and any non-contractual obligations connected with this Agreement) shall be governed by and construed in accordance with English law and any dispute arising out of this
263
Agreement and/or any non-contractual obligations connected with this Agreement shall be referred to
264
arbitration in London in accordance with the Arbitration Acts 1996 or any statutory modification or
265
re-enactment thereof for the time being in force, one arbitrator being appointed by each
266
party. The arbitrators shall be full members of the London Maritime Arbitrators Association ("LMAA"). On the receipt by one party of the nomination in writing of the other party's arbitrator,
267
that party shall appoint their arbitrator within fourteen days, failing which the decision of the
268
single arbitrator appointed shall apply. If two arbitrators are properly appointed
269
they shall appoint a third arbitrator failing which the third arbitrator shall be appointed by the President of the LMMA at the time within 21 (twenty one) days of the two arbitrators being appointed.
270

b)*                    This  Agreement  shall  be  governed  by  and  construed  in  accordance  with  Title  9  of   the
271
United States Code and the Law of the State of New York  and  should  any  dispute  arise  out  of
272
this Agreement, the matter in dispute shall be referred to three  persons  at  New  York,  one  to
273
be appointed by each  of  the  parties  hereto,  and  the  third  by  the  two  so  chosen;  their
274
decision or that of any two of them shall be final, and for purpose of enforcing any  award,  this
275
Agreement may be made a rule of the Court.
276
The proceedings shall be conducted in accordance  with  the  rules  of  the  Society  of  Maritime
277
Arbitrators, Inc.  New York.
278

c)*              Any dispute arising out of this Agreement shall be referred to arbitration at London in accordance with the Arbitration Act 1996 and subsequent alterations (if any), LLMAA rules to apply
279
, subject to the procedures applicable there.
280
The laws of England shall govern this Agreement.
281

*              16 a), 16 b) and 16 c) are altematives; delete whichever is not applicable.  In the absence of
282
deletions, altemative 16 a) to apply .
283

Additional Clauses 17, 18, 19, 20, 21, 22, 23, 24 and 25, inclusive as herein below, are deemed to
be fully incorporated into and form an integral part of this Agreement.

17. Delivery Documents

A. In exchange of the payment of the Purchase Price and other monies due under Clause 3 of this Agreement, the Sellers shall furnish the Buyers with the following delivery documents, namely:
(a)              Three originals of a legal bill of sale in form recordable in the Buyers' new flag in the English language (the "Bill of Sale") in favour of the Buyers, evidencing the transfer of all (100 percent) of the shares and interest in and title to the Vessel to the Buyers and warranting that the Vessel is free from all mortgages, encumbrances, charters, maritime liens or other liens, claims, taxes, levies, duties and any other debts whatsoever or any port state or administrative detentions, duly executed by the Sellers and duly certified by a notary public and legalized by Apostille.
(b)              Fax or email copy of Transcript of Register issued by the Isle of Man   Registry and dated the delivery date showing the Vessel to be registered in the ownership of the Sellers and free and clean from encumbrances and mortgages to be faxed to the closing meeting in Greece. The original of such Transcript of Register will be provided to the Buyers not later than 10 (ten) Banking days after the delivery

date of the Vessel to the Buyers and the Sellers shall provide a written undertaking to the Buyers to that end.
(c)              A certified true copy of the certificate of incorporation of the Sellers certified by the Sellers' Greek counsel.
(d)              An original set of Minutes of all the members of the Board of Directors of the Sellers or Resolutions of the Sellers adopted by unanimous consent approving, authorizing and confirming the entry into this Agreement and any amendments and/or addendums thereto, authorising the sale of the Vessel in accordance with the provisions of this Agreement and authorizing persons to conclude the sale, transfer and delivery of the Vessel to the Buyers and sign, execute and deliver on behalf of the Sellers, inter alia , the Bill of Sale, a protocol of delivery and acceptance and any other document required to be executed by the Sellers in respect of the delivery of the Vessel from the Sellers to the Buyers thereof pursuant to this Agreement and also authorizing the execution of Power(s) of Attorney to a specific person or persons empowering them to execute and deliver such documents and take such steps as may be necessary or appropriate in order to transfer and deliver the Vessel to the Buyers, such Minutes to be duly certified by a notary public and legalized by Apostille.
(e)              Original written resolutions of the Shareholder(s), approving the BOD minutes or Resolutions of the Sellers under 17. A. (d) above, duly certified by a notary public and legalized by Apostille.
(f)              An original Power of Attorney of the Sellers executed pursuant to the Minutes or Resolutions referred to in item 17. A. (d) hereinabove duly certified by a notary public and legalized by Apostille.
(g)              An original set of a director's certificate of incumbency of the Sellers certifying the name of all present directors/officers and shareholders of the Sellers and attaching copies of all the correct and complete and up-to-date constitutional documents in full force and effect of the Sellers (Memorandum and Articles of Association) with any amendments .
(h)              An original Certificate of Goodstanding of the Sellers dated no more than 10 (ten) Banking days prior to the delivery date showing the Sellers to be in good standing under the laws of the British Virgin Islands .
(i)              Two original Protocols of Delivery and Acceptance (one for the Sellers and one for the Buyers to be exchanged at the closing in Greece) confirming the delivery of the Vessel by the Sellers to the Buyers.
(j)              Commercial Invoice in three (3) copies dated the delivery date, stating the full particulars of the Vessel and the Purchase Price of the Vessel signed and stamped by the Sellers .
(k)              An original letter of confirmation from the Sellers stating that to the best of their knowledge the Vessel is not blacklisted by Arab Boycott League in Damascus or any other organisation, nation, government, state, country, political sub-division or union as of the delivery date.
(l) (i) A letter of undertaking by the Sellers to effect deletion from the Vessel's Registry forthwith and provide the Buyers with the original Transcript of Closed Register from the Vessel's Registry within 10 (ten) Banking days after delivery of the Vessel and to also provide the Vessel's new flag with a Closed

Continuous Synopsis Record issued by the Vessel's Registry within 30 (thirty) running days after delivery of the Vessel; (ii) A copy of the Transcript of Closed Register to be provided to the Buyers on the delivery date; and (iii) a Closed Continuous Synopsis Record from the Vessel's Registry to be issued and delivered to the Vessel's new flag administration as paragraph (o)(i) above within 30 (thirty) running days after the delivery of the Vessel (unless the Buyers waive this item (I) (i) (ii) and (iii) ) .
(m) Original Class Maintenance Certificate issued by the Vessel's present Class and dated not more than 3 (three) Banking days prior to the date of delivery of the Vessel evidencing that the Vessel is class maintained without condition/recommendation.
(n) An original letter of confirmation from the Sellers addressed to the Buyers confirming that the Vessel has not traded with or called in Israel, Cuba, Iran, Syria, North Korea or any other areas sanctioned or boycotted by the European Union and/or the United States of America and/or the United Nations, dated the delivery date. In case however the Vessel has traded in Israel and/or Iran, Sellers to provide an original letter of confirmation addressed to the Buyers confirming the following: i) the Vessel has not traded with or called in Cuba, Syria, North Korea or any other areas sanctioned or boycotted by the European Union and/or the United States of America and/or the United Nations and ii) that if the Vessel has traded Israel and/or Iran, this was with legal cargo for humanitarian purposes, dated the delivery date .
(o) An original letter of confirmation from the Sellers addressed to the Buyers confirming that the Vessel is entitled to trade worldwide within Institute Warranty Limits without restriction or limitation.
(p) An original letter of confirmation from the Sellers that to the best of their knowledge the Vessel has not touched bottom or suffered any underwater damage from her last drydock up to the date of her delivery.

(q)   One original letter from the Sellers confirming that any outstanding radio accounts shall be settled by the Sellers as soon as practically possible after the Vessel's delivery with no liability regarding the same to be incurred against the Buyers.

(r) Recent AGM free certificate from authorized company, if available.

(s) Most recent original Certificate for Chinese Tonnage Tax dues at no cost, if available .

(t) Any such additional documents as may be reasonably required by the Buyers' flag authorities for the purpose of transferring title and registering the Vessel, provided that the Buyers notify the Sellers of any such documents as soon as possible and in no event later than 7 (seven) days prior to the expected delivery of the Vessel.

B. In exchange of delivery of the Vessel, the Buyers shall furnish the Sellers with the following delivery documents, namely:
(a) Copy of the Certificate of Incorporation of the Buyers, certified as true by the Buyers' Greek Legal Counsel.

(b) Original Good Standing Certificate of the Buyers dated no more than 7 (seven) Banking prior to the delivery date showing the Buyers to be in good standing under the laws of the Marshall Islands .
(c) An original set of resolutions or minutes of the Board of Directors of the Buyers authorising the purchase of the Vessel in accordance with the provisions of this Agreement, the ratification of this Agreement signed and the execution on behalf of the Buyers of (inter alia) the acceptance of the Bill of Sale (if applicable), a protocol of delivery and acceptance and any other document required to be executed by the Buyers in respect of the delivery of the Vessel from the Sellers to the Buyers pursuant to this Agreement, and authorising further execution of a Power of Attorney authorising the execution any and all other documents and undertakings provided in this Agreement such resolutions to be duly legalised by Apostille.
(d) An original set of an officer's certificate of incumbency of the Buyers certifying the names of all present directors/officers of the Buyers and attaching copies of all correct and complete constitutional documents in full force and effect of the Buyers (Copies of the Articles of Incorporation and By-Laws (together with any amendment thereto up to and including the delivery date)).
(e) An original Power of Attorney of the Buyers issued in accordance with the resolutions referred to under 17. B. (c) above authorising the persons signing the documents on their behalf such power of attorney to be duly legalised by Apostille .
(f) Original written resolutions of the Buyers' Shareholder, approving the BOD minutes under 17. B. (c), such resolutions to be duly legalised by Apostille.
The parties undertake to exchange drafts of the above documents and agree final formats latest 7 (seven) Banking days prior to the delivery date of the Vessel.
18. DRYDOCKING

NO DRYDOCKING CLAUSE TO APPLY AND CLAUSE 6 OF SALESFORM 1993 IS DELETED.

HOWEVER, PROMPTLY BEFORE OR AFTER THE VESSEL'S ARRIVAL AT THE DELIVERY PORT AND PRIOR TO THE VESSEL'S DELIVERY THE BUYERS HAVE THE RIGHT TO CARRY OUT AN INSPECTION OF THE VESSEL'S UNDERWATER (BELOW SUMMER LOADLINE) PARTS BY CLASS APPROVED DIVERS WITH VIDEO LINK TO THE ATTENDING CLASS SURVEYOR, SUCH DIVERS INSPECTION TO BE AT BUYERS' RISK AND EXPENSE.

BUYERS TO ADVISE SELLERS FIVE (5) DAYS PRIOR TO DELIVERY IF THEY INTEND TO CARRY OUT UNDERWATER INSPECTION. IF THE DECLARED BY SELLERS DELIVERY PORT IS NOT FEASIBLE FOR AN UNDERWATER INSPECTION, BUYERS SHALL PROMPTLY ADVISE SELLERS OF AN ALTERNATIVE PLACE NEAR TO THE DELIVERY PORT, TO BE MUTUALLY AGREED, WHERE SELLERS ARE TO MAKE THE VESSEL AVAILABLE, AT SELLERS' COST (EXCEPT FOR THE BUNKERS' COST WHICH SHALL BE BORNE EQUALLY BETWEEN THE SELLERS AND THE BUYERS), FOR SUCH AN INSPECTION. THE EXTENT OF THE INSPECTION AND CONDITIONS

UNDER WHICH IT IS PERFORMED SHALL BE TO THE SATISFACTION OF THE CLASSIFICATION SOCIETY.

THE DIVERS INSPECTION TO BE CARRIED OUT IN A MANNER AND UNDER CONDITIONS CONSIDERED SUITABLE BY THE ATTENDING CLASS SURVEYOR FOR SUCH UNDERWATER INSPECTION. ATTENDANCE ARRANGEMENTS AND FEES FOR THE ATTENDING CLASS SURVEYOR SHALL BE FOR THE BUYERS' ACCOUNT AND THE COST OF THE DIVERS FOR THE BUYERS' ACCOUNT.

A) IF ANY DAMAGE IS FOUND TO THE VESSELS UNDERWATER PARTS WHICH LEADS TO IMPOSING RECOMMENDATION(S) AGAINST THE VESSEL, AND REQUIRES SAME TO BE REPAIRED PRIOR TO THE VESSEL'S NEXT DUE DRYDOCKING DATE, THEN THE SELLERS SHALL REPAIR SUCH DAMAGE TO THE SATISFACTION OF CLASSIFICATION SOCIETY AT THE SELLERS' TIME AND EXPENSE, PRIOR TO THE VESSEL'S DELIVERY TO THE BUYERS. SHOULD THE VESSEL BE REQUIRED TO DRYDOCK TO EFFECT SUCH REPAIRS TO CLASS SATISFACTION, THEN THE BUYERS SHALL HAVE THE RIGHT TO SCRAPE/PAINT THE VESSEL'S UNDERWATER PARTS AT THE BUYERS' RISK & EXPENSE WHILST THE VESSELS IS IN DRYDOCK. ALL COSTS AND MATERIALS ASSOCIATED WITH THE BUYERS' WORKS AND ANY EXTRA DRYDOCKING TIME REQUIRED FOR THE BUYERS TO CARRY OUT/COMPLETE THEIR WORKS SHALL BE FOR THE BUYERS' ACCOUNT. SUCH BUYERS' WORKS SHALL NOT INTERFERE WITH THE SELLERS' WORKS AND NOT TO DELAY THE DELIVERY OF THE VESSEL. IN THE EVENT THAT THE SELLERS HAVE COMPLETED THEIR WORKS IN THE DRYDOCK TO THE SATISFACTION OF CLASS AND THE BUYERS WORKS ARE NOT YET COMPLETED, THEN THE SELLERS HAVE THE RIGHT TO TENDER NOR FOR DELIVERY TO THE BUYERS WHILST THE VESSEL IS IN DRYDOCK. IN THE EVENT OF THE VESSEL BEING REQUIRED TO DRYDOCK FOR REPAIRS AND THERE ARE NO SUITABLE DRYDOCKING FACILITIES AVAILABLE AT THE DELIVERY PORT, THEN THE SELLERS SHALL TAKE THE VESSEL IN BALLAST TO THE NEAREST PORT/PLACE WHERE SUITABLE DRYDOCKING FACILITIES ARE AVAILABLE, AND A NEW DELIVERY PORT TO BE AGREED BETWEEN THE PARTIES. IT IS HEREBY MUTUALLY AGREED BY THE SELLERS AND THE BUYERS, THAT IN THE EVENT OF DAMAGE AFFECTING CLASS BEING FOUND DURING THE DIVERS INSPECTIONS AS MENTIONED ABOVE, THEN THE AGREED CANCELLING DATE SHALL AUTOMATICALLY BE EXTENDED BY THE ADDITIONAL TIME REQUIRED FOR THE DRYDOCKING, REPAIRS AND EXTRA STEAMING, BUT LIMITED TO A MAXIMUM OF FOURTEEN (14) RUNNING DAYS. CLASS ATTENDANCE FEES AND DIVERS COSTS TO BE FOR SELLERS' ACCOUNT.

B) IF ANY DAMAGE(S) TO THE VESSEL'S UNDERWATER PARTS   IS FOUND WHICH LEADS TO CLASS IMPOSING A RECOMMENDATION(S) AGAINST THE VESSEL BUT AGREE TO POSTPONE PERMANENT REPAIRS TO SAME UNTIL THE VESSEL'S NEXT DUE DRYDOCKING DATE THEN, IN LIEU OF THE SELLERS REPAIRING SUCH DAMAGE(S), THE SELLERS TO COMPENSATE THE BUYERS BY WAY OF PAYMENT IN CASH TO THE BUYERS NOMINATED ACCOUNT AND THE BUYERS SHALL TAKE DELIVERY OF THE VESSEL AS SHE IS WITH SUCH RECOMMENDATION(S) OUTSTANDING. THE SELLERS AND THE BUYERS SHALL EACH OBTAIN A QUOTATION FOR THE REPAIR OF SUCH DAMAGE FROM TWO (2) SEPARATE REPUTABLE SHIP REPAIR YARDS IN THE

AREA, AND THE COMPENSATION AMOUNT TO THE BUYERS SHALL BE THE AVERAGE OF THE TWO (2) REPAIR QUOTATIONS RECEIVED BY THE BUYERS AND SELLERS RESPECTIVELY AS MENTIONED ABOVE. CLASS ATTENDANCE FEES AND DIVERS COSTS TO BE FOR SELLERS' ACCOUNT.

19. P AND C
The terms and conditions of the sale to be kept strictly private and confidential by all parties involved, save as required otherwise by the Securities and Exchange Commission or US stock listed exchange rules applicable to the Buyers.
20. Notices
Any and all notices and communication in connection with this Agreement shall be in English in writing and shall be sent as follows:

(a) if to the Sellers at:
Attention: Asteria Bagouli
Telephone: +302108910288
Fax: +302108910295
E-mail: legal@ensh.com
or such other address as the Sellers may notify the Buyers.

(b) If to the Buyers at:
Attention: Stamatios Tsantanis
Telephone: +30 213 0181 507
Fax: +30 210 9638404
E-mail: snt@seanergy.gr
or such other address as the Buyers may notify the Sellers
21. Performance Guarantee
Seanergy Maritime Holdings Corp., of the Marshall Islands ("Seanergy") guarantees the performance by the Buyer of all of its obligations under this Agreement.
22. Contracts (Rights of Third Parties) Act 1999
Nothing contained in this Agreement confers or purports to confer on any third party any benefit or any right to enforce any term hereof pursuant to the Contracts (Rights of Third Parties) Act 1999.
23. Purchase Agreement & this Agreement
This Agreement is one of the "MOAs" referred to and defined in the Purchase Agreement. If there is any inconsistency between the terms and conditions of this Agreement and the terms and conditions of said Purchase Agreement, then the terms and conditions of the Purchase Agreement shall prevail.
24. Condition Precedent to this Agreement
The obligations of the Buyer and Seanergy's performance guarantee under Clause 21 to consummate the transactions contemplated by this Agreement and take delivery of the Vessel shall be subject to the fulfillment, at or prior to the delivery date of the Vessel, of the following condition:
The Buyer shall have secured financing for the acquisition of the Vessel.
In the event that the above condition is not fulfilled at or prior to the delivery date of the Vessel, this Agreement shall forthwith become void and null and there shall be no liability on the part of any party hereto and Seanergy except that nothing herein shall relieve any party hereto from liability for any willful breach of any provision hereof.


25. Entire Agreement
The written terms of this Agreement comprise the entire agreement between the Buyers and the Sellers in relation to the sale and purchase of the Vessel.


For the Sellers
 
For the Buyers
 
       
       
       
/s/ Nikolaos Sakalaridis
 
/s/ Stamatios Tsantanis
 
Name:
Nikolaos Sakalaridis
 
Name:
Stamatios Tsantanis
 
Title:
Authorized Director
 
Title:
Authorized Director
 
 
Exhibit 4.34

 
 
MEMORANDUM OF AGREEMENT
Norwegian Shipbrokers' Association's Memorandum of Agreement for sale and purchase
of ships. Adopted by The Baltic and International Maritime Council (BIMCO) in 1956.
Code-name
SALEFORM 1993

 
Dated: 6 August 2015

Lendal International Investments Inc., of the British Virgin Islands
hereinafter called the Sellers, have agreed to sell, and
1

GLADIATOR SHIPPING CO., of the Marshall Islands
hereinafter called the Buyers, have agreed to buy the
2

Name: ASSOS STRIKER
3

Classification Society/Class:
BV
4
Built:   2010
By: Jinling   Shipyard, Nanjin, PRC
5
Flag: Bahamas
Place of Registration:   Nassau
6
Call sign: C6XW8
Grt/Nrt: 33005/19231
7
Register IMO Number: 9431513
8
hereinafter called the Vessel, on the following terms and conditions:
 
9
Definitions
10

" Banking days " are days on which banks are open in the country of the currency
11
Stipulated for the Purchase Price in Clause 1 ,   and in the place of closing stipulated in Clause 8, in the
country of the Vessel's flag ,   Greece, USA, UK and in the country of the Vessel's mortgagee bank .
12

" in writing " or " written " means a letter handed over from the Sellers to the Buyers or vice versa,
13
a registered letter, telefax or other modern form of written communication .
14

" Classification Society " or " Class " means the Society referred to in line 4.
 
" Purchase Agreement " means the purchase agreement dated 6 August 2015 made by and among, inter
alios, Seanergy (as defined in Clause 21 hereof) and the Sellers.
 
15
1.
Purchase Price:
USD 16,335,700 (United States Dollars sixteen million three hundred thirty
 five thousand seven hundred) only
16

2.              Deposit
17

 
As security for the correct fulfilment of this Agreement  the  Buyers shall pay a deposit of 1 0 %
18
 
(ten per cent) of the Purchase Price within   banking days from the date of this
19
 
Agreement. This deposit shall be placed with
20
 
and   held  by them in a joint  account  for the  Sellers  and  the  Buyers, to be released in accordance
21
 
with joint written instructions of the  Sellers  and   the  Buyers.  Interest, if any, to  be  credited to  the
22
 
Buyers. Any fee charged  for holding  the said deposit  shall  be  borne  equally  by  the  Sellers  and  the
23
 
Buyers.
24

3.              Payment
25

 
The said Purchase Price   shall be paid in full free of bank charges by Buyers to Sellers' bank account ,
26
 
details of which shall be furnished by Sellers,
before delivery of the Vessel, but not later than 3 (three) Banking days after the Vessel is in every respect
27
 
physically ready for delivery in accordance with the terms and conditions of this Agreement and
28
 
Notice of Readiness ("NOR") has been given in accordance with Clause 5.
29

4                Inspections
30

a)*
The Buyers have waived the physical inspection for the Vessel and have accepted her. The
Buyers have inspected and accepted the Vessel's classification records. Therefore the sale is outright
and definite, subject only to the terms and conditions of this Agreement . The Buyers
31
 
 
have also inspected the Vessel at/in   [               ] on   [               ]
32
 
and have accepted the Vessel following this inspection and   the sale is outright and definite,
33
 
subject only to the terms and conditions of this Agreement.
34

 
b)*
The  Buyers  shall   have  the right  to   inspect  the  Vessel's     classification  records   and   declare
35
 
whether same are accepted  or  not   within
36

 
The Sellers shall provide for   inspections of the Vessel at/in
37

 
The  Buyers  shall  undertake  the  inspection   without  undue  delay  to  the  Vessel.   Should  the
38
 
Buyers  cause  undue  delay  they  shall  compensate  the  Sellers  for the losses thereby incurred.
39
 
The  Buyers  shall  inspect  the  Vessel without opening up   and without    cost  to  the  Sellers
40
 
During  the  inspection,  the  Vessel's  deck  and  engine  log  books  shall  be  made  available for
41
 
examination  by  the  Buyers. If the  Vessel  is  accepted  after  such  inspection,  the  sale shall
42
 
become outright and definite, subject  only  to  the  terms  and  conditions  of  this  Agreement,
43
 
provided the  Sellers receive   written notice  of  acceptance  from  the  Buyers  within  72 hours
44
 
after  completion  of  such  inspection.
45
 
Should  notice  of  acceptance  of   the  Vessel's classification  records  and  of  the Vessel not be
46
 
received  by  the  Sellers  as  aforesaid, the deposit together  with   interest earned   shall  be
47
 
released  immediately to the  Buyers, whereafter  this  Agreement shall be   null and void.
48

*
4 a) and 4b) are alternatives; delete whichever is not applicable. In the absence of deletions,
49
 
alternative 4a) to apply.
50

5.              Notices, time and place of delivery
51

a)
The Sellers shall keep the Buyers well informed of the Vessel's itinerary   and shall
52
 
provide the Buyers with 30/20/15/10/7/5/ 3   approximate and 2 and 1 definite day s notice s of the
expected time and place of arrival at the
53
 
intended time and place of drydocking/underwater inspection /delivery. When the Vessel is at the
54
 
place of delivery and in every respect physically ready for delivery in accordance with this
55
 
Agreement, the Sellers shall give the Buyers a written NOR for delivery.
 
56
b)
The Vessel shall be delivered to the Buyers free of stowaways, free of cargo, with clean swept holds
57
 
safely afloat at a safe and accessible berth, port or anchorage worldwide .
58
   
59
 
Expected time of delivery : 17 August 2015 – 30 November 2015 or such later date at Buyers' option.
 
60
 
Date of cancelling (see Clauses 5 c), 6 b) (iii) and 14): 30 November 2015 or such later date at Buyers' option .
61

c)
If the Sellers anticipate that, notwithstanding the exercise of due diligence by them, the
62
 
Vessel will not be ready for delivery by the cancelling date they may notify the Buyers in
63
 
writing stating the date when they anticipate that the Vessel will be ready for delivery and
64
 
propose a new cancelling date. Upon receipt of such notification the Buyers shall have the
65
 
option of either cancelling this Agreement in accordance with Clause 14 within 4 7 running
66
 
days of receipt of the notice or of accepting the new date as the new cancelling date. If the
67
 
Buyers have not declared their option within 4   7 running days of receipt of the Sellers'
68
 
notification or if the Buyers accept the new date, the date proposed in the Sellers' notification
69
 
shall be deemed to be the new cancelling date and shall be substituted for the cancelling
70
 
date stipulated in line 61.
71

 
If this Agreement is maintained with the new cancelling date all other terms and conditions
72
 
hereof including those contained in Clauses 5 a) and 5 c) shall remain unaltered and in full
73
 
force and effect. Cancellation or failure to cancel shall be entirely without prejudice to any
74
 
claim for damages the Buyers may have under Clause 14 for the Vessel not being ready by
75
 
the original cancelling date.
76

d)
Should the Vessel become an actual, constructive or compromised total loss before delivery
77
 
the deposit together  with  interest  earned shall be released immediately to the Buyers
78
 
whereafter this Agreement shall be null and void .
79

6.              Drydocking / Divers Inspection - SEE CLAUSE 18 of this Agreement .
80

a)**
The Sellers shall place the Vessel in drydock at the port of delivery for inspection by the
81
 
 
 
 
Classification Society of the Vessel's underwater parts below the deepest load line, the
82
 
extent of the inspection being in accordance with the Classification Society's rules.  If the
83
 
rudder, propeller, bottom or other underwater parts below the deepest load line are found
84
 
broken, damaged or defective so as to affect the Vessel's class, such defects shall be made
85
 
good at the Sellers' expense to the satisfaction of the Classification Society without
86
 
condition/recommendation*.
87

b)**
(i)              The Vessel is to be delivered without drydocking.  However, the Buyers shall
88
 
have the right at their expense to arrange for an underwater inspection by a diver approved
89
 
by the Classification Society   prior to the delivery of the Vessel.  The Sellers shall at their
90
 
cost make the Vessel available for such inspection. The extent of the inspection and the
91
 
conditions under which it is performed shall be to the satisfaction of the Classification
92
 
Society. If the conditions at the port of delivery are unsuitable for such inspection, the
93
 
Sellers shall make the Vessel available   at a suitable alternative place near to the delivery
94
 
port.
95

 
ii)              If the rudder, propeller, bottom or other underwater parts below the deepest load line
96
 
are found broken, damaged or defective so as to affect the Vessel's class, then unless
97
 
repairs can be carried out afloat to the satisfaction of the Classification Society, the Sellers
98
 
shall arrange for the Vessel to be drydocked at their expense for inspection by the
99
 
Classification Society of the Vessel's underwater parts below the deepest load line, the
100
 
extent of the inspection being in accordance with the Classification Society's rules.  If the
101
 
rudder, propeller, bottom or other underwater parts below the deepest load line are found
102
 
broken, damaged or defective so as to affect the Vessel's class, such defects shall be made
103
 
good by the Sellers at their expense to the satisfaction of the Classification Society
104
 
without condition/recommendation*. In such event the Sellers are to pay also for the cost of
105
 
the underwater inspection and the Classification Society's attendance.
106

 
(iii)              If the Vessel is to be drydocked pursuant to Clause 6 b) (ii) and no suitable dry-
107
 
docking facilities are available at the port of delivery, the Sellers shall take the Vessel
108
 
to a port where suitable drydocking facilities are available, whether within or outside the
109
 
delivery range as per Clause 5 b). Once drydocking has taken place the Sellers shall deliver
110
 
the Vessel at a port within the delivery range as per Clause 5 b) which shall, for the
111
 
purpose of this Clause, become the new port of delivery. In such event the cancelling date
112
 
provided for in Clause 5 b) shall be extended by the additional time required for the
113
 
drydocking and extra steaming, but limited to a maximum of 14 running days.
114

c)
If the Vessel is drydocked pursuant to Clause 6 a) or 6 b) above
115

 
(i)              the Classification Society may require survey of the tailshaft system, the extent of
116
 
the survey being to the satisfaction of the Classification surveyor. If such survey is not
117
 
required by the Classification Society, the Buyers shall have the right to require the tailshaft
118
 
to be drawn and surveyed by the Classification Society, the extent of the survey being in
119
 
accordance with the Classification Society's rules for tailshaft survey and consistent with
120
 
the current stage of the Vessel's survey cycle. The Buyers shall declare whether they
121
 
require the tailshaft to be drawn and surveyed not later than by the completion of the
122
 
inspection by the Classification Society. The drawing and refitting of the tailshaft shall be
123
 
arranged by the Sellers. Should any parts of the tailshaft system be condemned or found
124
 
defective so as to affect the Vessel's class, those parts shall be renewed or made good at
125
 
the Sellers' expense to the satisfaction of the Classification Society without
126
 
condition/recommendation*.
127

 
(ii)              the expenses relating to the survey of the tailshaft system shall be borne
128
 
by the Buyers unless the Classification  Society requires such survey to be carried out, in
129
 
which case the Sellers shall pay these expenses. The Sellers shall also pay the expenses
130
 
if the Buyers require the survey  and  parts of the system are condemned or found defective
131
 
or broken so as to affect the Vessel's class*.
132

 
(iii)              the expenses in connection with putting the Vessel in and taking her out of
133
 
drydock, including the drydock dues and the Classification Society's fees shall be paid by
134
 
the Sellers if the Classification Society issues any condition/recommendation* as a result
135
 
of the survey or if it requires survey of the tailshaft system. In all other cases the Buyers
136
 
shall pay the aforesaid expenses, dues and fees.
137

 
(iv)              the Buyers' representative shall have the right to be present in the drydock, but
138
 
without interfering with the work or decisions of the Classification surveyor.
139
 
 

 
 
(v)              the Buyers shall have the right to have the underwater parts of the Vessel
140
 
cleaned and painted at their risk and expense without interfering with the Sellers' or the
141
 
Classification surveyor's work, if any, and without affecting the Vessel's timely delivery. If,
142
 
however, the Buyers' work in drydock is still in progress when the Sellers have
143
 
completed the work which the Sellers are required to do, the additional docking time
144
 
needed to complete the Buyers' work shall be for the Buyers' risk and expense. In the event
145
 
that the Buyers' work requires such additional time, the Sellers may upon completion of the
146
 
Sellers' work tender Notice of Readiness for delivery whilst the Vessel is still in drydock
147
 
and the Buyers shall be obliged to take delivery in accordance with Clause 3, whether
148
 
the Vessel is in drydock or not and irrespective of Clause 5 b).
149

*
Notes, if any, in the surveyor's report which are accepted by the Classification Society
150
 
without condition/recommendation are not to be taken into account.
151

**
6 a) and 6 b) are alternatives; delete whichever is not applicable. In the absence of deletions,
152
 
alternative 6 a) to apply
153

7.
Spares/bunkers, etc.
154

The Sellers shall deliver the Vessel to the Buyers with everything belonging to her on board and on
155
shore , including broached/unbroached stores and provisions and spares without extra payment . All
spare parts and spare equipment including spare tail-end shaft(s) and/or spare
156
propeller(s)/propeller blade(s), if any, belonging to the Vessel at the time of inspection used or
157
unused, whether on board or not shall become the Buyers' property.
158
Forwarding charges, if any, shall be for the Buyers' account. The Sellers are not required to replace spare
159
parts including spare tail-end shaft(s) and spare propeller(s)/propeller blade(s) which are taken out
160
of spare and used as replacement prior to delivery, but the replaced items shall be the property of
161
the Buyers. The radio installation, GMDSS and navigational equipment shall be included in the sale without
extra payment if they are the property of the Sellers. ECDIS (with dongle card and maps) shall be
included in the sale and Buyers shall pay the Sellers Euro 12,500.
162
Unused stores and provisions shall be included in the sale and be taken over
163
by the Buyers without extra payment .
164

The Sellers have the right to take ashore crockery, plates, cutlery, linen and other articles bearing the
165
Sellers' flag or name, provided they replace same with similar unmarked items. Library, forms, etc .,
166
exclusively for use in the Sellers' vessel(s), shall be excluded without compensation. Captain's,
167
Officers' and Crew's personal belongings including the slop chest are to be excluded from the sale,
168
as well as the following additional items (including items on hire):
 
-UNITOR'S OXYGEN/ACETYLENE/FREON CYLINDERS, EMPTY/FULL;
-MARICHEM SYSTEM MHCS 200;
-ORIGINAL FLAG CERTIFICATES (Registry – Intern. Tonnage – Radio Station Licence – Minimum
Safe Manning – CLCertificate - MLCertificate )– necessary for Ship's deletion from the articles;
-LIBRARY, FORMS, RECORDS, REPORTS, DECK and ENGINE Log Books, CORRESPONDENCE
exclusively used by the Sellers;
-CD ROM QSEMS;
-SEAGULL TRAINING CDs;
-Lloyds MARINER – Risk Assessment CDs;
-LR Manager (Working hours) CDs;
-AMVER DISKETTE;
-EST SAFETY LABELS (35);
-ISPS CODE / CD / INSTRUCTIONS AND SECURITY AWARENESS CBT 115 AND ISPS TRAINER;
-OWNERS LISTS/ISM & ISPS system manuals / Company's Soft and Hardware/PC's etc.; and
-SECURITY IDENTIFICATION BADGES (CREW AND VISITORS) .
 
169
The Buyers shall take over the remaining bunkers and unused lubricating oils in storage tanks and
170
sealed drums and pay the current net market  price (excluding  barging  expenses) at the port and date
171
of delivery of the Vessel Buyers shall take over the bunkers remaining on board with cost as per
Platts prices for Singapore published three (3) banking days prior to the Vessel's delivery. Buyers
shall also take over the remaining unbroached lubricants respectively in sealed drums/tins or in
designated storage tanks not having passed to the engines/equipment through Vessel's system at
Sellers' net contract prices of last supply as evidenced by the relevant copies of invoices. Exact
quantities of remaining bunkers and lubricating oils shall be measured and agreed by and between
the Sellers' and the Buyers' representatives latest by one (1) Banking day prior to expected date of
delivery of the Vessel.
172
 
 
 
Payment under this Clause shall be made in cash at the same time and place
173
and in the same currency as the Purchase Price.
174

8.
Documentation
175

The place of closing: Athens, Greece
176

In exchange for payment of the Purchase Price and delivery of the Vessel the Sellers shall furnish the
Buyers and the Buyers shall furnish the Sellers with the delivery documents stated in this Clause and in
Clause 17 of this Agreement. namely :
177
178

a)
Legal Bill of Sale in a form recordable in           (the country in  which  the Buyers  are
179
 
to register the Vessel),  warranting that  the  Vessel  is  free  from  all  encumbrances,  mortgages
180
 
and  maritime   liens  or  any  other  debts   or  claims  whatsoever,  duly  notarially  attested  and
181
 
legalized by the consul of such country or other competent  authority.
182

b)
Current Certificate of  Ownership  issued  by  the  competent  authorities  of  the  flag  state  of
183
 
the Vessel.
184

c)
Confirmation of Class issued within 72 hours prior to delivery.
185

d)
Current Certificate issued by the competent  authorities  stating  that  the  Vessel  is  free  from
186
 
registered encumbrances
187

e)
Certificate of Deletion of the Vessel from the  Vessel's  registry  or  other  official  evidence  of
188
 
deletion appropriate to the Vessel's registry at the time of delivery, or,  in  the  event  that  the
189
 
registry does not  as  a  matter  of  practice  issue  such  documentation  immediately,  a  written
190
 
undertaking by the Sellers to effect deletion from the Vessel's  registry  forthwith  and  furnish  a
191
 
Certificate or other official evidence of deletion to  the  Buyers  promptly  and  latest  within  4
192
 
(four) weeks after the  Purchase  Price  has  been paid and the  Vessel has been delivered.
193

f)
Any  such  additional  documents  as  may  reasonably  be  required  by  the  competent  authorities
194
 
for  the purpose of  registering  the  Vessel, provided  the   Buyers  notify  the  Sellers  of  any  such
195
 
documents as soon as possible after the date of this Agreement
196

At the time of delivery the Buyers and Sellers shall sign and deliver to each other a Protocol of
197
Delivery and Acceptance confirming the date and time of delivery of the Vessel from the Sellers to the
198
Buyers.
199

At the time of delivery the Sellers shall hand over   to the Buyers the classification certificate(s) as well as all
200
Plans etc., which are on board the Vessel. Other certificates which are on board the Vessel shall also
201
be handed over to the Buyers unless the Sellers are required to retain same, in which case the
202
Buyers to have the right to take copies. Other technical documentation which may
203
be in the Sellers' possession shall be promptly forwarded to the Buyers at their expense, if they so
204
request. The Sellers may keep the Vessels log books but the Buyers to have the right to take
205
copies of same at Buyers' account .
 
206
9.         Encumbrances
207

The Sellers warrant that the Vessel, at the time of delivery, is free from all charters, encumbrances,
208
Mortgages, taxes, levies, duties and maritime liens or other liens or any other debts whatsoever and is not
subject to any port state or administrative detentions. The Sellers hereby undertake
209
to indemnify the Buyers against all consequences of claims made against the Vessel which have
210
been incurred prior to the time of delivery or arising out of or with respect to events occurring prior to the
time of delivery .
211


10.      Taxes, etc.
212

Any taxes, fees and expenses in connection with the purchase and registration under the Buyers' flag
213
shall be for the Buyers' account, whereas similar charges in  connection with the closing of the Sellers'
214
register shall be for the Sellers' account.
215

11.      Condition on delivery
216

The Vessel with everything belonging to her shall be at the Sellers' risk and expense until she is
217
delivered to the Buyers, but subject to the terms and conditions of this Agreement she shall be
218
 
 
 
delivered and taken over "as is where is"   as she was at the time of inspection, fair wear and tear excepted .
219
However, the Vessel shall be delivered free of stowaways, free of cargo and with clean swept holds
and with her class maintained without condition/recommendation*,
220
free of average damage affecting the Vessels class, and with her classification certificates and
221
National/international/trading   certificates and Continuous Survey of Machinery (CSM), as well as all other
222
certificates of the Vessel had at the time of   inspection ,
223
clean and valid   at the time of the delivery   and unextended for a minimum period of 3 (three)   months
from the time of the delivery without condition/recommendation * by Class or the relevant authorities at the
time of delivery .
224
" Inspection " in this Clause 11, shall mean the Buyers' inspection according to Clause 4 a) or 4 b), if
225
applicable, or the Buyers' inspection prior to the signing of this Agreement. If the Vessel is taken over
226
without inspection, the date of this Agreement shall be the relevant date.
227

*          Notes, if any, in the surveyor's report  which are accepted by the Classification Society
228
            without condition/recommendation are not to be taken into account.
229

12.      Name / markings
230

Upon delivery the Buyers undertake to   change the name of the Vessel and alter funnel markings.
 
231
13.      Buyers' default
232

Should the deposit not be paid in accordance with Clause 2, the Sellers have the right to cancel  this
233
Agreement, and  they shall be entitled to  claim  compensation for their losses and for all expenses
234
incurred together with interest.
235
Should the Purchase Price not be paid in accordance with Clause 3, the Sellers have the right to
236
cancel the Agreement , in which case the deposit  together  with interest  earned  shall  be released  to  the
237
Sellers.  If the  deposit  does  not  cover  their  loss, but in case of such cancellation the Sellers shall not
238
be entitled to claim further compensation for any losses suffered and/or for any expenses incurred together
with interest.
239

14.      Sellers' default
240

Should the Sellers fail to give NOR in accordance with Clause 5 a) or fail to be ready
241
to validly complete a legal transfer by the date stipulated in line 61 the Buyers shall have
242
the option of cancelling this Agreement provided always that the Sellers shall be granted a
243
maximum of 3 (three) Banking days after the NOR has been given to make arrangements
244
for the documentation set out in Clause 8 and Clause 17. If after NOR has been given but before
245
the Buyers have taken delivery, the Vessel ceases to be physically ready for delivery and is not
246
made physically ready again in every respect by the date stipulated in line 61 and new NOR
247
given, the Buyers shall retain their option to cancel. In  the  event  that  the  Buyers  elect
248
to  cancel this Agreement  the  deposit  together  with  interest earned shall be released to them
249
immediately.
250
Should the Sellers fail to give NOR by the date stipulated in line 61 or fail to be ready
251
to validly complete a legal transfer as aforesaid they shall make due compensation to the Buyers for
252
their loss and for all expenses together with interest if their failure is due to proven
253
negligence and whether or not the Buyers cancel this Agreement.
254

15.      Buyers' representatives
255

After this Agreement has been signed by both parties and  the deposit  has  been  lodged , the Buyers
256
have the right to place two (2) representatives on board the Vessel at their sole risk and expense upon
257
arrival at  ________ on or about _________ immediately.
258
These representatives/crew shall remain on board until delivery of the Vessel to, and acceptance of the
Vessel by, the Buyers for the purpose of familiarisation and in the capacity of
259
observers only, and they shall not interfere in any respect with the operation of the Vessel. The
260
Buyers' representatives/crew shall sign the Sellers' letter of indemnity prior to their embarkation.
261
 
16.      Arbitration
262

a)*      
  This Agreement (and any non-contractual obligations connected with this Agreement) shall be
governed by and construed in accordance with English law and any dispute arising out of this
263
 
Agreement and/or any non-contractual obligations connected with this Agreement shall be referred to
264
 
arbitration in London in accordance with the Arbitration Acts 1996 or any statutory modification or
265
 
re-enactment thereof for the time being in force, one arbitrator being appointed by each
266
 
party. The arbitrators shall be full members of the London Maritime Arbitrators Association ("LMAA"). On the
receipt by one party of the nomination in writing of the other party's arbitrator,
267
 
 
 
 
that party shall appoint their arbitrator within fourteen days, failing which the decision of the
268
 
single arbitrator appointed shall apply. If two arbitrators are properly appointed
269
 
they shall appoint a third arbitrator failing which the third arbitrator shall be appointed by the President of the
LMAA at the time within 21 (twenty one) days of the two arbitrators being appointed.
270

b)*              This  Agreement  shall  be  governed  by  and  construed  in  accordance  with  Title  9  of   the
271
United States Code and the Law of the State of New York  and  should  any  dispute  arise  out  of
272
this Agreement, the matter in dispute shall be referred to three  persons  at  New  York,  one  to
273
be appointed by each  of  the  parties  hereto,  and  the  third  by  the  two  so  chosen;  their
274
decision or that of any two of them shall be final, and for purpose of enforcing any  award,  this
275
Agreement may be made a rule of the Court.
276
The proceedings shall be conducted in accordance  with  the  rules  of  the  Society  of  Maritime
277
Arbitrators, Inc.  New York.
278

c)*              Any dispute arising out of this Agreement shall be referred to arbitration at London in accordance with the Arbitration Act 1996 and subsequent alterations (if any), LLMAA rules to apply
279
, subject to the procedures applicable there.
280
The laws of England shall govern this Agreement.
281

*                  16 a), 16 b) and 16 c) are altematives; delete whichever is not applicable.  In the absence of
282
deletions, altemative 16 a) to apply .
283

Additional Clauses 17, 18, 19, 20, 21, 22, 23, 24 and 25, inclusive as herein below, are deemed to
be fully incorporated into and form an integral part of this Agreement.

17.      Delivery Documents

A. In exchange of the payment of the Purchase Price and other monies due under Clause 3 of this Agreement, the Sellers shall furnish the Buyers with the following delivery documents, namely:
(a)              Three originals of a legal bill of sale in form recordable in the Buyers' new flag in the English language (the "Bill of Sale") in favour of the Buyers, evidencing the transfer of all (100 percent) of the shares and interest in and title to the Vessel to the Buyers and warranting that the Vessel is free from all mortgages, encumbrances, charters, maritime liens or other liens, claims, taxes, levies, duties and any other debts whatsoever or any port state or administrative detentions, duly executed by the Sellers and duly certified by a notary public and legalized by Apostille.
(b)              Fax or email copy of Transcript of Register issued by the Bahamas   Registry and dated the delivery date showing the Vessel to be registered in the ownership of the Sellers and free and clean from encumbrances and mortgages to be faxed to the closing meeting in Greece. The original of such Transcript of Register will be provided to the Buyers not later than 10 (ten) Banking days after the delivery date of the Vessel to the Buyers and the Sellers shall provide a written undertaking to the Buyers to that end.
(c)              A certified true copy of the certificate of incorporation of the Sellers certified by the Sellers' Greek counsel.
(d)              An original set of Minutes of all the members of the Board of Directors of the Sellers or Resolutions of the Sellers adopted by unanimous consent approving, authorizing and confirming the entry into this Agreement and any amendments and/or addendums thereto, authorising the sale of the Vessel in accordance with the provisions of this Agreement and authorizing persons to conclude the sale, transfer and delivery of the Vessel to the Buyers and sign, execute and deliver on behalf of the Sellers, inter alia , the Bill of Sale, a protocol of delivery and acceptance and any other document required to be executed by the Sellers in respect of the delivery of the Vessel from the Sellers to the Buyers thereof pursuant to this Agreement and also authorizing the execution of Power(s) of Attorney to a specific person or persons empowering them to execute and deliver such documents and take such steps as may be necessary or appropriate in order to transfer and deliver the Vessel to the Buyers, such Minutes to be duly certified by a notary public and legalized by Apostille.
 
(e)              Original written resolutions of the Shareholder(s) , approving the BOD minutes or Resolutions of the Sellers under 17. A. (d) above, duly certified by a notary public and legalized by Apostille.
(f)              An original Power of Attorney of the Sellers executed pursuant to the Minutes or Resolutions referred to in item 17. A. (d) hereinabove duly certified by a notary public and legalized by Apostille.
(g)              An original set of a director's certificate of incumbency of the Sellers certifying the name of all present directors/officers and shareholders of the Sellers and attaching copies of all the correct and complete and up-to-date constitutional documents in full force and effect of the Sellers (Memorandum and Articles of Association) with any amendments .
(h)              An original Certificate of Goodstanding of the Sellers dated no more than 10 (ten) Banking days prior to the delivery date showing the Sellers to be in good standing under the laws of the British Virgin Islands.
(i)              Two original Protocols of Delivery and Acceptance (one for the Sellers and one for the Buyers to be exchanged at the closing in Greece) confirming the delivery of the Vessel by the Sellers to the Buyers.
(j)              Commercial Invoice in three (3) copies dated the delivery date, stating the full particulars of the Vessel and the Purchase Price of the Vessel signed and stamped by the Sellers .
(k)              An original letter of confirmation from the Sellers stating that to the best of their knowledge the Vessel is not blacklisted by Arab Boycott League in Damascus or any other organisation, nation, government, state, country, political sub-division or union as of the delivery date.
(l) (i) A letter of undertaking by the Sellers to effect deletion from the Vessel's Registry forthwith and provide the Buyers with the original Transcript of Closed Register from the Vessel's Registry within 10 (ten) Banking days after delivery of the Vessel and to also provide the Vessel's new flag with a Closed Continuous Synopsis Record issued by the Vessel's Registry within 30 (thirty) running days after delivery of the Vessel; (ii) A copy of the Transcript of Closed Register to be provided to the Buyers on the delivery date; and (iii) a Closed Continuous Synopsis Record from the Vessel's Registry to be issued and delivered to the Vessel's new flag administration as paragraph (o)(i) above within 30 (thirty) running days after the delivery of the Vessel (unless the Buyers waive this item (I) (i) (ii) and (iii) ) .
(m) Original Class Maintenance Certificate issued by the Vessel's present Class and dated not more than 3 (three) Banking days prior to the date of delivery of the Vessel evidencing that the Vessel is class maintained without condition/recommendation.
(n) An original letter of confirmation from the Sellers addressed to the Buyers confirming that the Vessel has not traded with or called in Israel, Cuba, Iran, Syria, North Korea or any other areas sanctioned or boycotted by the European Union and/or the United States of America and/or the United Nations, dated the delivery date. In case however the Vessel has traded in Israel and/or Iran, Sellers to provide an original letter of confirmation addressed to the Buyers confirming the following: i) the Vessel has not traded with or called in Cuba, Syria, North Korea or any other areas sanctioned or boycotted by the European Union and/or the United States of America and/or the United Nations and ii) that if the Vessel has traded Israel and/or Iran, this was with legal cargo for humanitarian purposes, dated the delivery date .
 
(o) An original letter of confirmation from the Sellers addressed to the Buyers confirming that the Vessel is entitled to trade worldwide within Institute Warranty Limits without restriction or limitation.
(p) An original letter of confirmation from the Sellers that to the best of their knowledge the Vessel has not touched bottom or suffered any underwater damage from her last drydock up to the date of her delivery.

(q)   One original letter from the Sellers confirming that any outstanding radio accounts shall be settled by the Sellers as soon as practically possible after the Vessel's delivery with no liability regarding the same to be incurred against the Buyers.

(r) Recent AGM free certificate from authorized company, if available.

(s) Most recent original Certificate for Chinese Tonnage Tax dues at no cost, if available .

(t) Any such additional documents as may be reasonably required by the Buyers' flag authorities for the purpose of transferring title and registering the Vessel, provided that the Buyers notify the Sellers of any such documents as soon as possible and in no event later than 7 (seven) days prior to the expected delivery of the Vessel.

B. In exchange of delivery of the Vessel, the Buyers shall furnish the Sellers with the following delivery documents, namely:
(a) Copy of the Certificate of Incorporation of the Buyers, certified as true by the Buyers' Greek Legal Counsel.
(b) Original Good Standing Certificate of the Buyers dated no more than 7 (seven) Banking prior to the delivery date showing the Buyers to be in good standing under the laws of the Marshall Islands .
(c) An original set of resolutions or minutes of the Board of Directors of the Buyers authorising the purchase of the Vessel in accordance with the provisions of this Agreement, the ratification of this Agreement signed and the execution on behalf of the Buyers of (inter alia) the acceptance of the Bill of Sale (if applicable), a protocol of delivery and acceptance and any other document required to be executed by the Buyers in respect of the delivery of the Vessel from the Sellers to the Buyers pursuant to this Agreement, and authorising further execution of a Power of Attorney authorising the execution any and all other documents and undertakings provided in this Agreement such resolutions to be duly legalised by Apostille.
(d) An original set of an officer's certificate of incumbency of the Buyers certifying the names of all present directors/officers of the Buyers and attaching copies of all correct and complete constitutional documents in full force and effect of the Buyers (Copies of the Articles of Incorporation and By-Laws (together with any amendment thereto up to and including the delivery date)).
 
 
(e) An original Power of Attorney of the Buyers issued in accordance with the resolutions referred to under 17. B. (c) above authorising the persons signing the documents on their behalf such power of attorney to be duly legalised by Apostille .
(f) Original written resolutions of the Buyers' Shareholder, approving the BOD minutes under 17. B. (c), such resolutions to be duly legalised by Apostille.
The parties undertake to exchange drafts of the above documents and agree final formats latest 7 (seven) Banking days prior to the delivery date of the Vessel.
18.       DRYDOCKING

NO DRYDOCKING CLAUSE TO APPLY AND CLAUSE 6 OF SALESFORM 1993 IS DELETED.

HOWEVER, PROMPTLY BEFORE OR AFTER THE VESSEL'S ARRIVAL AT THE DELIVERY PORT AND PRIOR TO THE VESSEL'S DELIVERY THE BUYERS HAVE THE RIGHT TO CARRY OUT AN INSPECTION OF THE VESSEL'S UNDERWATER (BELOW SUMMER LOADLINE) PARTS BY CLASS APPROVED DIVERS WITH VIDEO LINK TO THE ATTENDING CLASS SURVEYOR, SUCH DIVERS INSPECTION TO BE AT BUYERS' RISK AND EXPENSE.

BUYERS TO ADVISE SELLERS FIVE (5) DAYS PRIOR TO DELIVERY IF THEY INTEND TO CARRY OUT UNDERWATER INSPECTION. IF THE DECLARED BY SELLERS DELIVERY PORT IS NOT FEASIBLE FOR AN UNDERWATER INSPECTION, BUYERS SHALL PROMPTLY ADVISE SELLERS OF AN ALTERNATIVE PLACE NEAR TO THE DELIVERY PORT, TO BE MUTUALLY AGREED, WHERE SELLERS ARE TO MAKE THE VESSEL AVAILABLE, AT SELLERS' COST (EXCEPT FOR THE BUNKERS' COST WHICH SHALL BE BORNE EQUALLY BETWEEN THE SELLERS AND THE BUYERS), FOR SUCH AN INSPECTION. THE EXTENT OF THE INSPECTION AND CONDITIONS UNDER WHICH IT IS PERFORMED SHALL BE TO THE SATISFACTION OF THE CLASSIFICATION SOCIETY.

THE DIVERS INSPECTION TO BE CARRIED OUT IN A MANNER AND UNDER CONDITIONS CONSIDERED SUITABLE BY THE ATTENDING CLASS SURVEYOR FOR SUCH UNDERWATER INSPECTION. ATTENDANCE ARRANGEMENTS AND FEES FOR THE ATTENDING CLASS SURVEYOR SHALL BE FOR THE BUYERS' ACCOUNT AND THE COST OF THE DIVERS FOR THE BUYERS' ACCOUNT.

A) IF ANY DAMAGE IS FOUND TO THE VESSELS UNDERWATER PARTS WHICH LEADS TO IMPOSING RECOMMENDATION(S) AGAINST THE VESSEL, AND REQUIRES SAME TO BE REPAIRED PRIOR TO THE VESSEL'S NEXT DUE DRYDOCKING DATE, THEN THE SELLERS SHALL REPAIR SUCH DAMAGE TO THE SATISFACTION OF CLASSIFICATION SOCIETY AT THE SELLERS' TIME AND EXPENSE, PRIOR TO THE VESSEL'S DELIVERY TO THE BUYERS. SHOULD THE VESSEL BE REQUIRED TO DRYDOCK TO EFFECT SUCH REPAIRS TO CLASS SATISFACTION, THEN THE BUYERS SHALL HAVE THE RIGHT TO SCRAPE/PAINT THE VESSEL'S UNDERWATER PARTS AT THE BUYERS' RISK & EXPENSE WHILST THE VESSELS IS IN DRYDOCK. ALL COSTS AND MATERIALS ASSOCIATED WITH THE BUYERS' WORKS AND ANY EXTRA DRYDOCKING TIME REQUIRED FOR THE BUYERS TO CARRY OUT/COMPLETE THEIR WORKS SHALL BE FOR THE BUYERS' ACCOUNT. SUCH BUYERS' WORKS SHALL NOT INTERFERE WITH THE SELLERS' WORKS AND NOT TO DELAY THE DELIVERY OF THE VESSEL. IN THE EVENT THAT THE SELLERS HAVE COMPLETED THEIR WORKS IN THE DRYDOCK TO THE SATISFACTION OF CLASS AND THE BUYERS WORKS ARE NOT YET COMPLETED, THEN THE SELLERS HAVE THE RIGHT TO TENDER NOR FOR DELIVERY TO THE BUYERS WHILST THE VESSEL IS IN DRYDOCK. IN THE EVENT OF THE VESSEL BEING REQUIRED TO DRYDOCK FOR REPAIRS AND THERE ARE NO SUITABLE DRYDOCKING FACILITIES AVAILABLE AT THE DELIVERY PORT, THEN THE SELLERS SHALL TAKE THE VESSEL IN BALLAST TO THE NEAREST PORT/PLACE WHERE SUITABLE DRYDOCKING FACILITIES ARE AVAILABLE, AND A NEW DELIVERY PORT TO BE AGREED BETWEEN THE PARTIES. IT IS HEREBY MUTUALLY AGREED BY THE SELLERS AND THE BUYERS, THAT IN THE EVENT OF DAMAGE AFFECTING CLASS BEING FOUND DURING THE DIVERS INSPECTIONS AS MENTIONED ABOVE, THEN THE AGREED CANCELLING DATE SHALL AUTOMATICALLY BE EXTENDED BY THE ADDITIONAL TIME REQUIRED FOR THE DRYDOCKING, REPAIRS AND EXTRA STEAMING, BUT LIMITED TO A MAXIMUM OF FOURTEEN (14) RUNNING DAYS. CLASS ATTENDANCE FEES AND DIVERS COSTS TO BE FOR SELLERS' ACCOUNT.

B) IF ANY DAMAGE(S) TO THE VESSEL'S UNDERWATER PARTS   IS FOUND WHICH LEADS TO CLASS IMPOSING A RECOMMENDATION(S) AGAINST THE VESSEL BUT AGREE TO POSTPONE PERMANENT REPAIRS TO SAME UNTIL THE VESSEL'S NEXT DUE DRYDOCKING DATE THEN, IN LIEU OF THE SELLERS REPAIRING SUCH DAMAGE(S), THE SELLERS TO COMPENSATE THE BUYERS BY WAY OF PAYMENT IN CASH TO THE BUYERS NOMINATED ACCOUNT AND THE BUYERS SHALL TAKE DELIVERY OF THE VESSEL AS SHE IS WITH SUCH RECOMMENDATION(S) OUTSTANDING. THE SELLERS AND THE BUYERS SHALL EACH OBTAIN A QUOTATION FOR THE REPAIR OF SUCH DAMAGE FROM TWO (2) SEPARATE REPUTABLE SHIP REPAIR YARDS IN THE AREA, AND THE COMPENSATION AMOUNT TO THE BUYERS SHALL BE THE AVERAGE OF THE TWO (2) REPAIR QUOTATIONS RECEIVED BY THE BUYERS AND SELLERS RESPECTIVELY AS MENTIONED ABOVE. CLASS ATTENDANCE FEES AND DIVERS COSTS TO BE FOR SELLERS' ACCOUNT.

19.       P AND C
The terms and conditions of the sale to be kept strictly private and confidential by all parties involved, save as required otherwise by the Securities and Exchange Commission or US stock listed exchange rules applicable to the Buyers.
20.       Notices
Any and all notices and communication in connection with this Agreement shall be in English in writing and shall be sent as follows:

(a)
if to the Sellers at:
Attention: Asteria Bagouli
Telephone: +302108910288
Fax: +302108910295
E-mail: legal@ensh.com
or such other address as the Sellers may notify the Buyers.
 

 
(b)
If to the Buyers at:
Attention: Stamatios Tsantanis
Telephone: +30 213 0181 507
Fax: +30 210 9638404
E-mail: snt@seanergy.gr  
or such other address as the Buyers may notify the Sellers
21.       Performance Guarantee
Seanergy Maritime Holdings Corp., of the Marshall Islands ("Seanergy") guarantees the performance by the Buyer of all of its obligations under this Agreement.
22.       Contracts (Rights of Third Parties) Act 1999
Nothing contained in this Agreement confers or purports to confer on any third party any benefit or any right to enforce any term hereof pursuant to the Contracts (Rights of Third Parties) Act 1999.
23.       Purchase Agreement & this Agreement
This Agreement is one of the "MOAs" referred to and defined in the Purchase Agreement. If there is any inconsistency between the terms and conditions of this Agreement and the terms and conditions of said Purchase Agreement, then the terms and conditions of the Purchase Agreement shall prevail.
24.       Condition Precedent to this Agreement
The obligations of the Buyer and Seanergy's performance guarantee under Clause 21 to consummate the transactions contemplated by this Agreement and take delivery of the Vessel shall be subject to the fulfillment, at or prior to the delivery date of the Vessel, of the following condition:
The Buyer shall have secured financing for the acquisition of the Vessel.
In the event that the above condition is not fulfilled at or prior to the delivery date of the Vessel, this Agreement shall forthwith become void and null and there shall be no liability on the part of any party hereto and Seanergy except that nothing herein shall relieve any party hereto from liability for any willful breach of any provision hereof.
25.       Entire Agreement
The written terms of this Agreement comprise the entire agreement between the Buyers and the Sellers in relation to the sale and purchase of the Vessel.

For the Sellers
 
For the Buyers
 
       
/s/Eirini Kritikou
 
/s/Stamatios Tsantanis
 
Name: Eirini Kritikou
 
Name: Stamatios Tsantanis
 
Title: Authorized Director
 
Title: Authorized Director
 


 
Exhibit 4.35

 
 
MEMORANDUM OF AGREEMENT
Norwegian Shipbrokers' Association's Memorandum of Agreement for sale and purchase
of ships. Adopted by The Baltic and International Maritime Council (BIMCO) in 1956.
Code-name
SALEFORM 1993

 
Dated: 6 August 2015

Islay Services Inc., of the British Virgin Islands
hereinafter called the Sellers, have agreed to sell, and
1
 

GUARDIAN SHIPPING CO., of the Marshall Islands
hereinafter called the Buyers, have agreed to buy the
2

Name: MYSTIC STRIKER
3

Classification Society/Class:
BV
4
Built:   2011
By: Jinling   Shipyard, Nanjin, PRC
5
Flag: Bahamas
Place of Registration:   Nassau
6
Call sign: C6XX5
Grt/Nrt: 33.044/19.231
7
Register IMO Number: 9493688
8
hereinafter called the Vessel, on the following terms and conditions:
9
Definitions
10

" Banking days " are days on which banks are open in the country of the currency
11
Stipulated for the Purchase Price in Clause 1 ,   and in the place of closing stipulated in Clause 8, in the country of the Vessel's flag ,   Greece, USA, UK and in the country of the Vessel's mortgagee bank .
12

" in writing " or " written " means a letter handed over from the Sellers to the Buyers or vice versa,
13
a registered letter, telefax or other modern form of written communication .
14

" Classification Society " or " Class " means the Society referred to in line 4.
 
" Purchase Agreement " means the purchase agreement dated 6 August 2015 made by and among, inter alios, Seanergy (as defined in Clause 21 hereof) and the Sellers.
 
15
1.
Purchase Price:
USD 17,168,091 (United States Dollars seventeen million one hundred sixty eight thousand ninety one) only
16
 
2.        Deposit
17

As security for the correct fulfilment of this Agreement  the  Buyers shall pay a deposit of 1 0 %
18
(ten per cent) of the Purchase Price within   banking days from the date of this
19
Agreement. This deposit shall be placed with
20
and   held  by them in a joint  account  for the  Sellers  and  the  Buyers, to be released in accordance
21
with joint written instructions of the  Sellers  and   the  Buyers.  Interest, if any, to  be  credited to  the
22
Buyers. Any fee charged  for holding  the said deposit  shall  be  borne  equally  by  the  Sellers  and  the
23
Buyers.
24

3.        Payment
 
25
The said Purchase Price   shall be paid in full free of bank charges by Buyers to Sellers' bank account,
details of which shall be furnished by Sellers.
 
26
before delivery of the Vessel, but not later than 3 (three) Banking days after the Vessel is in every respect
27
physically ready for delivery in accordance with the terms and conditions of this Agreement and
28
Notice of Readiness ("NOR") has been given in accordance with Clause 5.
 
 
29


4            Inspections
30

a)*
The Buyers have waived the physical inspection for the Vessel and have accepted her. The Buyers have inspected and accepted the Vessel's classification records. Therefore the sale is outright and definite, subject only to the terms and conditions of this Agreement . The Buyers
31
 
have also inspected the Vessel at/in   [               ] on   [               ]
32
 
and have accepted the Vessel following this inspection and   the sale is outright and definite,
33
 
subject only to the terms and conditions of this Agreement.
34

b)*
The  Buyers  shall   have  the right  to   inspect  the  Vessel's     classification  records   and   declare
35
 
whether same are accepted  or  not   within
36

The Sellers shall provide for   inspections of the Vessel at/in
37

The  Buyers  shall  undertake  the  inspection   without  undue  delay  to  the  Vessel.   Should  the
38
Buyers  cause  undue  delay  they  shall  compensate  the  Sellers  for the losses thereby incurred.
39
The  Buyers  shall  inspect  the  Vessel without opening up   and without    cost  to  the  Sellers
40
During  the  inspection,  the  Vessel's  deck  and  engine  log  books  shall  be  made  available for
41
examination  by  the  Buyers. If the  Vessel  is  accepted  after  such  inspection,  the  sale shall
42
become outright and definite, subject  only  to  the  terms  and  conditions  of  this  Agreement,
43
provided the  Sellers receive   written notice  of  acceptance  from  the  Buyers  within  72 hours
44
after  completion  of  such  inspection.
45
Should  notice  of  acceptance  of   the  Vessel's classification  records  and  of  the Vessel not be
46
received  by  the  Sellers  as  aforesaid, the deposit together  with   interest earned   shall  be
47
released  immediately to the  Buyers, whereafter  this  Agreement shall be   null and void.
48

*
4 a) and 4b) are alternatives; delete whichever is not applicable. In the absence of deletions,
49
 
alternative 4a) to apply.
50

5.              Notices, time and place of delivery
51

a)
The Sellers shall keep the Buyers well informed of the Vessel's itinerary   and shall
52
 
provide the Buyers with 30/20/15/10/7/5/ 3   approximate and 2 and 1 definite day s notice s of the expected time and place of arrival at the
53
 
intended time and place of drydocking/underwater inspection/ delivery. When the Vessel is at the
54
 
place of delivery and in every respect physically ready for delivery in accordance with this
55
 
Agreement, the Sellers shall give the Buyers a written NOR for delivery.
 
56
b)
The Vessel shall be delivered to the Buyers free of stowaways, free of cargo, with clean swept holds
57
 
safely afloat at a safe and accessible berth, port or anchorage worldwide .
58
   
59
 
Expected time of delivery : 17 August 2015 – 30 November 2015 or such later date at Buyers' option.
 
60
 
Date of cancelling (see Clauses 5 c), 6 b) (iii) and 14): 30 November 2015 or such later date at Buyers' option .
61

c)
If the Sellers anticipate that, notwithstanding the exercise of due diligence by them, the
62
 
Vessel will not be ready for delivery by the cancelling date they may notify the Buyers in
63
 
writing stating the date when they anticipate that the Vessel will be ready for delivery and
64
 
propose a new cancelling date. Upon receipt of such notification the Buyers shall have the
65
 
option of either cancelling this Agreement in accordance with Clause 14 within 4 7 running
66
 
days of receipt of the notice or of accepting the new date as the new cancelling date. If the
67
 
Buyers have not declared their option within 4   7 running days of receipt of the Sellers'
68
 
notification or if the Buyers accept the new date, the date proposed in the Sellers' notification
69
 
shall be deemed to be the new cancelling date and shall be substituted for the cancelling
70
 
date stipulated in line 61.
71

 
If this Agreement is maintained with the new cancelling date all other terms and conditions
72
 
hereof including those contained in Clauses 5 a) and 5 c) shall remain unaltered and in full
73
 
force and effect. Cancellation or failure to cancel shall be entirely without prejudice to any
74
 
claim for damages the Buyers may have under Clause 14 for the Vessel not being ready by
75


 
the original cancelling date.
76

d)
Should the Vessel become an actual, constructive or compromised total loss before delivery
77
 
the deposit together  with  interest  earned shall be released immediately to the Buyers
78
 
whereafter this Agreement shall be null and void .
79

6.        Drydocking / Divers Inspection - SEE CLAUSE 18 of this Agreement .
80

a)**
The Sellers shall place the Vessel in drydock at the port of delivery for inspection by the
81
 
Classification Society of the Vessel's underwater parts below the deepest load line, the
82
 
extent of the inspection being in accordance with the Classification Society's rules.  If the
83
 
rudder, propeller, bottom or other underwater parts below the deepest load line are found
84
 
broken, damaged or defective so as to affect the Vessel's class, such defects shall be made
85
 
good at the Sellers' expense to the satisfaction of the Classification Society without
86
 
condition/recommendation*.
87

b)**
(i)              The Vessel is to be delivered without drydocking.  However, the Buyers shall
88
 
have the right at their expense to arrange for an underwater inspection by a diver approved
89
 
by the Classification Society   prior to the delivery of the Vessel.  The Sellers shall at their
90
 
cost make the Vessel available for such inspection. The extent of the inspection and the
91
 
conditions under which it is performed shall be to the satisfaction of the Classification
92
 
Society. If the conditions at the port of delivery are unsuitable for such inspection, the
93
 
Sellers shall make the Vessel available   at a suitable alternative place near to the delivery
94
 
port.
95

 
ii)              If the rudder, propeller, bottom or other underwater parts below the deepest load line
96
 
are found broken, damaged or defective so as to affect the Vessel's class, then unless
97
 
repairs can be carried out afloat to the satisfaction of the Classification Society, the Sellers
98
 
shall arrange for the Vessel to be drydocked at their expense for inspection by the
99
 
Classification Society of the Vessel's underwater parts below the deepest load line, the
100
 
extent of the inspection being in accordance with the Classification Society's rules.  If the
101
 
rudder, propeller, bottom or other underwater parts below the deepest load line are found
102
 
broken, damaged or defective so as to affect the Vessel's class, such defects shall be made
103
 
good by the Sellers at their expense to the satisfaction of the Classification Society
104
 
without condition/recommendation*. In such event the Sellers are to pay also for the cost of
105
 
the underwater inspection and the Classification Society's attendance.
106

 
(iii)              If the Vessel is to be drydocked pursuant to Clause 6 b) (ii) and no suitable dry-
107
 
docking facilities are available at the port of delivery, the Sellers shall take the Vessel
108
 
to a port where suitable drydocking facilities are available, whether within or outside the
109
 
delivery range as per Clause 5 b). Once drydocking has taken place the Sellers shall deliver
110
 
the Vessel at a port within the delivery range as per Clause 5 b) which shall, for the
111
 
purpose of this Clause, become the new port of delivery. In such event the cancelling date
112
 
provided for in Clause 5 b) shall be extended by the additional time required for the
113
 
drydocking and extra steaming, but limited to a maximum of 14 running days.
114

c)
If the Vessel is drydocked pursuant to Clause 6 a) or 6 b) above
115

 
(i)              the Classification Society may require survey of the tailshaft system, the extent of
116
 
the survey being to the satisfaction of the Classification surveyor. If such survey is not
117
 
required by the Classification Society, the Buyers shall have the right to require the tailshaft
118
 
to be drawn and surveyed by the Classification Society, the extent of the survey being in
119
 
accordance with the Classification Society's rules for tailshaft survey and consistent with
120
 
the current stage of the Vessel's survey cycle. The Buyers shall declare whether they
121
 
require the tailshaft to be drawn and surveyed not later than by the completion of the
122
 
inspection by the Classification Society. The drawing and refitting of the tailshaft shall be
123
 
arranged by the Sellers. Should any parts of the tailshaft system be condemned or found
124
 
defective so as to affect the Vessel's class, those parts shall be renewed or made good at
125
 
the Sellers' expense to the satisfaction of the Classification Society without
126
 
condition/recommendation*.
127

 
(ii)              the expenses relating to the survey of the tailshaft system shall be borne
128
 
by the Buyers unless the Classification  Society requires such survey to be carried out, in
129


 
which case the Sellers shall pay these expenses. The Sellers shall also pay the expenses
130
 
if the Buyers require the survey  and  parts of the system are condemned or found defective
131
 
or broken so as to affect the Vessel's class*.
132

 
(iii)              the expenses in connection with putting the Vessel in and taking her out of
133
 
drydock, including the drydock dues and the Classification Society's fees shall be paid by
134
 
the Sellers if the Classification Society issues any condition/recommendation* as a result
135
 
of the survey or if it requires survey of the tailshaft system. In all other cases the Buyers
136
 
shall pay the aforesaid expenses, dues and fees.
137

 
(iv)              the Buyers' representative shall have the right to be present in the drydock, but
138
 
without interfering with the work or decisions of the Classification surveyor.
139

 
(v)              the Buyers shall have the right to have the underwater parts of the Vessel
140
 
cleaned and painted at their risk and expense without interfering with the Sellers' or the
141
 
Classification surveyor's work, if any, and without affecting the Vessel's timely delivery. If,
142
 
however, the Buyers' work in drydock is still in progress when the Sellers have
143
 
completed the work which the Sellers are required to do, the additional docking time
144
 
needed to complete the Buyers' work shall be for the Buyers' risk and expense. In the event
145
 
that the Buyers' work requires such additional time, the Sellers may upon completion of the
146
 
Sellers' work tender Notice of Readiness for delivery whilst the Vessel is still in drydock
147
 
and the Buyers shall be obliged to take delivery in accordance with Clause 3, whether
148
 
the Vessel is in drydock or not and irrespective of Clause 5 b).
149

*
Notes, if any, in the surveyor's report which are accepted by the Classification Society
150
 
without condition/recommendation are not to be taken into account.
151

**
6 a) and 6 b) are alternatives; delete whichever is not applicable. In the absence of deletions,
152
 
alternative 6 a) to apply
153

7.
Spares/bunkers, etc.
154

The Sellers shall deliver the Vessel to the Buyers with everything belonging to her on board and on
155
shore , including broached/unbroached stores and provisions and spares without extra payment . All spare parts and spare equipment including spare tail-end shaft(s) and/or spare
156
propeller(s)/propeller blade(s), if any, belonging to the Vessel at the time of inspection used or
157
unused, whether on board or not shall become the Buyers' property.
158
Forwarding charges, if any, shall be for the Buyers' account. The Sellers are not required to replace spare
159
parts including spare tail-end shaft(s) and spare propeller(s)/propeller blade(s) which are taken out
160
of spare and used as replacement prior to delivery, but the replaced items shall be the property of
161
the Buyers. The radio installation, GMDSS and navigational equipment shall be included in the sale without extra payment if they are the property of the Sellers.
162
Unused stores and provisions shall be included in the sale and be taken over
163
by the Buyers without extra payment .
164

The Sellers have the right to take ashore crockery, plates, cutlery, linen and other articles bearing the
165
Sellers' flag or name, provided they replace same with similar unmarked items. Library, forms, etc .,
166
exclusively for use in the Sellers' vessel(s), shall be excluded without compensation. Captain's,
167
Officers' and Crew's personal belongings including the slop chest are to be excluded from the sale,
168
as well as the following additional items (including items on hire):
 
-UNITOR'S OXYGEN/ACETYLENE/FREON CYLINDERS, EMPTY/FULL;
 
-MARICHEM SYSTEM MHCS 200;
-ORIGINAL FLAG CERTIFICATES (Registry – Intern. Tonnage – Radio Station Licence – Minimum Safe Manning – CLCertificate - MLCertificate )– necessary for Ship's deletion from the articles;
-LIBRARY, FORMS, RECORDS, REPORTS, DECK and ENGINE Log Books, CORRESPONDENCE exclusively used by the Sellers;
-CD ROM QSEMS;
-SEAGULL TRAINING CDs;
-Lloyds MARINER – Risk Assessment CDs;
-LR Manager (Working hours) CDs;
-AMVER DISKETTE;
 
169


-EST SAFETY LABELS (35);
-ISPS CODE / CD / INSTRUCTIONS AND SECURITY AWARENESS CBT 115 AND ISPS TRAINER;
-OWNERS LISTS/ISM & ISPS system manuals / Company's Soft and Hardware/PC's etc.; and
-SECURITY IDENTIFICATION BADGES (CREW AND VISITORS) .
 

The Buyers shall take over the remaining bunkers and unused lubricating oils in storage tanks and
170
sealed drums and pay the current net market  price (excluding  barging  expenses) at the port and date
171
of delivery of the Vessel Buyers shall take over the bunkers remaining on board with cost as per Platts prices for Singapore published three (3) banking days prior to the Vessel's delivery. Buyers shall also take over the remaining unbroached lubricants respectively in sealed drums/tins or in designated storage tanks not having passed to the engines/equipment through Vessel's system at Sellers' net contract prices of last supply as evidenced by the relevant copies of invoices. Exact quantities of remaining bunkers and lubricating oils shall be measured and agreed by and between the Sellers' and the Buyers' representatives latest by one (1) Banking day prior to expected date of delivery of the Vessel.
172
Payment under this Clause shall be made in cash at the same time and place
173
and in the same currency as the Purchase Price.
174

8.
Documentation
175
   
The place of closing: Athens, Greece
176

In exchange for payment of the Purchase Price and delivery of the Vessel the Sellers shall furnish the Buyers and the Buyers shall furnish the Sellers with the delivery documents stated in this Clause and in Clause 17 of this Agreement. namely :
 
177
178
a)
Legal Bill of Sale in a form recordable in           (the country in  which  the Buyers  are
179
 
to register the Vessel),  warranting that  the  Vessel  is  free  from  all  encumbrances,  mortgages
180
 
and  maritime   liens  or  any  other  debts   or  claims  whatsoever,  duly  notarially  attested  and
181
 
legalized by the consul of such country or other competent  authority.
182

b)
Current Certificate of  Ownership  issued  by  the  competent  authorities  of  the  flag  state  of
183
 
the Vessel.
184

c)
Confirmation of Class issued within 72 hours prior to delivery.
185

d)
Current Certificate issued by the competent  authorities  stating  that  the  Vessel  is  free  from
186
 
registered encumbrances
187

e)
Certificate of Deletion of the Vessel from the  Vessel's  registry  or  other  official  evidence  of
188
 
deletion appropriate to the Vessel's registry at the time of delivery, or,  in  the  event  that  the
189
 
registry does not  as  a  matter  of  practice  issue  such  documentation  immediately,  a  written
190
 
undertaking by the Sellers to effect deletion from the Vessel's  registry  forthwith  and  furnish  a
191
 
Certificate or other official evidence of deletion to  the  Buyers  promptly  and  latest  within  4
192
 
(four) weeks after the  Purchase  Price  has  been paid and the  Vessel has been delivered.
193

f)
Any  such  additional  documents  as  may  reasonably  be  required  by  the  competent  authorities
194
 
for  the purpose of  registering  the  Vessel, provided  the   Buyers  notify  the  Sellers  of  any  such
195
 
documents as soon as possible after the date of this Agreement
196

At the time of delivery the Buyers and Sellers shall sign and deliver to each other a Protocol of
197
Delivery and Acceptance confirming the date and time of delivery of the Vessel from the Sellers to the
198
Buyers.
199

At the time of delivery the Sellers shall hand over   to the Buyers the classification certificate(s) as well as all
200
Plans etc., which are on board the Vessel. Other certificates which are on board the Vessel shall also
201
be handed over to the Buyers unless the Sellers are required to retain same, in which case the
202
Buyers to have the right to take copies. Other technical documentation which may
203
be in the Sellers' possession shall be promptly forwarded to the Buyers at their expense, if they so
204
request. The Sellers may keep the Vessels log books but the Buyers to have the right to take
205
copies of same at Buyers' account .
 
206

9.        Encumbrances
207


The Sellers warrant that the Vessel, at the time of delivery, is free from all charters, encumbrances,
208
Mortgages, taxies, levies, duties and maritime liens or other liens or any other debts whatsoever and is not subject to any port state or administrative detentions. The Sellers hereby undertake
209
to indemnify the Buyers against all consequences of claims made against the Vessel which have
210
been incurred prior to the time of delivery or arising out of or with respect to events occurring prior to the time of delivery .
211


10.        Taxes, etc.
212

Any taxes, fees and expenses in connection with the purchase and registration under the Buyers' flag
213
shall be for the Buyers' account, whereas similar charges in  connection with the closing of the Sellers'
214
register shall be for the Sellers' account.
215

11.        Condition on delivery
216

The Vessel with everything belonging to her shall be at the Sellers' risk and expense until she is
217
delivered to the Buyers, but subject to the terms and conditions of this Agreement she shall be
218
delivered and taken over "as is where is"   as she was at the time of inspection, fair wear and tear excepted .
219
However, the Vessel shall be delivered free of stowaways, free of cargo and with clean swept holds and with her class maintained without condition/recommendation*,
220
free of average damage affecting the Vessels class, and with her classification certificates and
221
National/international/trading   certificates and Continuous Survey of Machinery (CSM), as well as all other
222
certificates of the Vessel had at the time of   inspection ,
223
clean and valid   at the time of the delivery without condition/recommendation * by Class or the relevant authorities at the time of delivery .
224
" Inspection " in this Clause 11, shall mean the Buyers' inspection according to Clause 4 a) or 4 b), if
225
applicable, or the Buyers' inspection prior to the signing of this Agreement. If the Vessel is taken over
226
without inspection, the date of this Agreement shall be the relevant date.
227

*          Notes, if any, in the surveyor's report  which are accepted by the Classification Society
228
            without condition/recommendation are not to be taken into account.
229

12.        Name / markings
230

Upon delivery the Buyers undertake to   change the name of the Vessel and alter funnel markings.
 
231
13.        Buyers' default
232

Should the deposit not be paid in accordance with Clause 2, the Sellers have the right to cancel  this
233
Agreement, and  they shall be entitled to  claim  compensation for their losses and for all expenses
234
incurred together with interest.
235
Should the Purchase Price not be paid in accordance with Clause 3, the Sellers have the right to
236
cancel the Agreement , in which case the deposit  together  with interest  earned  shall  be released  to  the
237
Sellers.  If the  deposit  does  not  cover  their  loss, but in case of such cancellation the Sellers shall not
238
be entitled to claim further compensation for any losses suffered and/or for any expenses incurred together with interest.
239

14.        Sellers' default
240

Should the Sellers fail to give NOR in accordance with Clause 5 a) or fail to be ready
241
to validly complete a legal transfer by the date stipulated in line 61 the Buyers shall have
242
the option of cancelling this Agreement provided always that the Sellers shall be granted a
243
maximum of 3 (three) Banking days after the NOR has been given to make arrangements
244
for the documentation set out in Clause 8 and Clause 17 . If after NOR has been given but before
245
the Buyers have taken delivery, the Vessel ceases to be physically ready for delivery and is not
246
made physically ready again in every respect by the date stipulated in line 61 and new NOR
247
given, the Buyers shall retain their option to cancel. In  the  event  that  the  Buyers  elect
248
to  cancel this Agreement  the  deposit  together  with  interest earned shall be released to them
249
immediately.
250
Should the Sellers fail to give NOR by the date stipulated in line 61 or fail to be ready
251
to validly complete a legal transfer as aforesaid they shall make due compensation to the Buyers for
252


their loss and for all expenses together with interest if their failure is due to proven
253
negligence and whether or not the Buyers cancel this Agreement.
254

15.        Buyers' representatives
255

After this Agreement has been signed by both parties and  the deposit  has  been  lodged , the Buyers
256
have the right to place two (2) representatives on board the Vessel at their sole risk and expense upon
257
arrival at  ________ on or about _________ immediately.
258
These representatives/crew shall remain on board until delivery of the Vessel to, and acceptance of the Vessel by, the Buyers for the purpose of familiarisation and in the capacity of
259
observers only, and they shall not interfere in any respect with the operation of the Vessel. The
260
Buyers' representatives/crew shall sign the Sellers' letter of indemnity prior to their embarkation.
261
 
16.        Arbitration
 

a)*              This Agreement (and any non-contractual obligations connected with this Agreement) shall be governed by and construed in accordance with English law and any dispute arising out of this
262
263
Agreement and/or any non-contractual obligations connected with this Agreement shall be referred to
264
arbitration in London in accordance with the Arbitration Acts 1996 or any statutory modification or
265
re-enactment thereof for the time being in force, one arbitrator being appointed by each
266
party. The arbitrators shall be full members of the London Maritime Arbitrators Association ("LMAA"). On the receipt by one party of the nomination in writing of the other party's arbitrator,
267
that party shall appoint their arbitrator within fourteen days, failing which the decision of the
268
single arbitrator appointed shall apply. If two arbitrators are properly appointed
269
they shall appoint a third arbitrator failing which the third arbitrator shall be appointed by the President of the LMMA at the time within 21 (twenty one) days of the two arbitrators being appointed.
270

b)*              This  Agreement  shall  be  governed  by  and  construed  in  accordance  with  Title  9  of   the
271
United States Code and the Law of the State of New York  and  should  any  dispute  arise  out  of
272
this Agreement, the matter in dispute shall be referred to three  persons  at  New  York,  one  to
273
be appointed by each  of  the  parties  hereto,  and  the  third  by  the  two  so  chosen;  their
274
decision or that of any two of them shall be final, and for purpose of enforcing any  award,  this
275
Agreement may be made a rule of the Court.
276
The proceedings shall be conducted in accordance  with  the  rules  of  the  Society  of  Maritime
277
Arbitrators, Inc.  New York.
278

c)*              Any dispute arising out of this Agreement shall be referred to arbitration at London in accordance with the Arbitration Act 1996 and subsequent alterations (if any), LLMAA rules to apply
279
, subject to the procedures applicable there.
280
The laws of England shall govern this Agreement.
281

*              16 a), 16 b) and 16 c) are altematives; delete whichever is not applicable.  In the absence of
282
deletions, altemative 16 a) to apply .
283

Additional Clauses 17, 18, 19, 20, 21, 22, 23, 24 and 25, inclusive as herein below, are deemed to
be fully incorporated into and form an integral part of this Agreement.

17. Delivery Documents

A. In exchange of the payment of the Purchase Price and other monies due under Clause 3 of this Agreement, the Sellers shall furnish the Buyers with the following delivery documents, namely:
(a)              Three originals of a legal bill of sale in form recordable in the Buyers' new flag in the English language (the "Bill of Sale") in favour of the Buyers, evidencing the transfer of all (100 percent) of the shares and interest in and title to the Vessel to the Buyers and warranting that the Vessel is free from all mortgages, encumbrances, charters, maritime liens or other liens, claims, taxes, levies, duties and any other debts whatsoever or any port state or administrative detentions, duly executed by the Sellers and duly certified by a notary public and legalized by Apostille.

(b)              Fax or email copy of Transcript of Register issued by the Bahamas   Registry and dated the delivery date showing the Vessel to be registered in the ownership of the Sellers and free and clean from encumbrances and mortgages to be faxed to the closing meeting in Greece. The original of such Transcript of Register will be provided to the Buyers not later than 10 (ten) Banking days after the delivery date of the Vessel to the Buyers and the Sellers shall provide a written undertaking to the Buyers to that end.
(c)              A certified true copy of the certificate of incorporation of the Sellers certified by the Sellers' Greek counsel.
(d)              An original set of Minutes of all the members of the Board of Directors of the Sellers or Resolutions of the Sellers adopted by unanimous consent approving, authorizing and confirming the entry into this Agreement and any amendments and/or addendums thereto, authorising the sale of the Vessel in accordance with the provisions of this Agreement and authorizing persons to conclude the sale, transfer and delivery of the Vessel to the Buyers and sign, execute and deliver on behalf of the Sellers, inter alia , the Bill of Sale, a protocol of delivery and acceptance and any other document required to be executed by the Sellers in respect of the delivery of the Vessel from the Sellers to the Buyers thereof pursuant to this Agreement and also authorizing the execution of Power(s) of Attorney to a specific person or persons empowering them to execute and deliver such documents and take such steps as may be necessary or appropriate in order to transfer and deliver the Vessel to the Buyers, such Minutes to be duly certified by a notary public and legalized by Apostille.
(e)              Original written resolutions of the Shareholder(s), approving the BOD minutes or Resolutions of the Sellers under 17. A. (d) above, duly certified by a notary public and legalized by Apostille.
(f)              An original Power of Attorney of the Sellers executed pursuant to the Minutes or Resolutions referred to in item 17. A. (d) hereinabove duly certified by a notary public and legalized by Apostille.
(g)              An original set of a director's certificate of incumbency of the Sellers certifying the name of all present directors/officers and shareholders of the Sellers and attaching copies of all the correct and complete and up-to-date constitutional documents in full force and effect of the Sellers (Memorandum and Articles of Association) with any amendments .
(h)              An original Certificate of Goodstanding of the Sellers dated no more than 10 (ten) Banking days prior to the delivery date showing the Sellers to be in good standing under the laws of the British Virgin Islands .
(i)              Two original Protocols of Delivery and Acceptance (one for the Sellers and one for the Buyers to be exchanged at the closing in Greece) confirming the delivery of the Vessel by the Sellers to the Buyers.
(j)              Commercial Invoice in three (3) copies dated the delivery date, stating the full particulars of the Vessel and the Purchase Price of the Vessel signed and stamped by the Sellers .

(k)              An original letter of confirmation from the Sellers stating that to the best of their knowledge the Vessel is not blacklisted by Arab Boycott League in Damascus or any other organisation, nation, government, state, country, political sub-division or union as of the delivery date.
(l)              (i) A letter of undertaking by the Sellers to effect deletion from the Vessel's Registry forthwith and provide the Buyers with the original Transcript of Closed Register from the Vessel's Registry within 10 (ten) Banking days after delivery of the Vessel and to also provide the Vessel's new flag with a Closed Continuous Synopsis Record issued by the Vessel's Registry within 30 (thirty) running days after delivery of the Vessel; (ii) A copy of the Transcript of Closed Register to be provided to the Buyers on the delivery date; and (iii) a Closed Continuous Synopsis Record from the Vessel's Registry to be issued and delivered to the Vessel's new flag administration as paragraph (o)(i) above within 30 (thirty) running days after the delivery of the Vessel (unless the Buyers waive this item (I) (i) (ii) and (iii) ) .
(m)              Original Class Maintenance Certificate issued by the Vessel's present Class and dated not more than 3 (three) Banking days prior to the date of delivery of the Vessel evidencing that the Vessel is class maintained without condition/recommendation.
(n)              An original letter of confirmation from the Sellers addressed to the Buyers confirming that the Vessel has not traded with or called in Israel, Cuba, Iran, Syria, North Korea or any other areas sanctioned or boycotted by the European Union and/or the United States of America and/or the United Nations, dated the delivery date. In case however the Vessel has traded in Israel and/or Iran, Sellers to provide an original letter of confirmation addressed to the Buyers confirming the following: i) the Vessel has not traded with or called in Cuba, Syria, North Korea or any other areas sanctioned or boycotted by the European Union and/or the United States of America and/or the United Nations and ii) that if the Vessel has traded Israel and/or Iran, this was with legal cargo for humanitarian purposes, dated the delivery date .
(o)              An original letter of confirmation from the Sellers addressed to the Buyers confirming that the Vessel is entitled to trade worldwide within Institute Warranty Limits without restriction or limitation.
(p)              An original letter of confirmation from the Sellers that to the best of their knowledge the Vessel has not touched bottom or suffered any underwater damage from her last drydock up to the date of her delivery.

(q)              One original letter from the Sellers confirming that any outstanding radio accounts shall be settled by the Sellers as soon as practically possible after the Vessel's delivery with no liability regarding the same to be incurred against the Buyers.

(r)              Recent AGM free certificate from authorized company, if available.

(s)              Most recent original Certificate for Chinese Tonnage Tax dues at no cost, if available .

(t)              Any such additional documents as may be reasonably required by the Buyers' flag authorities for the purpose of transferring title and registering the Vessel, provided that the Buyers notify the Sellers of any

such documents as soon as possible and in no event later than 7 (seven) days prior to the expected delivery of the Vessel.

B. In exchange of delivery of the Vessel, the Buyers shall furnish the Sellers with the following delivery documents, namely:
(a) Copy of the Certificate of Incorporation of the Buyers, certified as true by the Buyers' Greek Legal Counsel.
(b) Original Good Standing Certificate of the Buyers dated no more than 7 (seven) Banking prior to the delivery date showing the Buyers to be in good standing under the laws of the Marshall Islands .
(c) An original set of resolutions or minutes of the Board of Directors of the Buyers authorising the purchase of the Vessel in accordance with the provisions of this Agreement, the ratification of this Agreement signed and the execution on behalf of the Buyers of (inter alia) the acceptance of the Bill of Sale (if applicable), a protocol of delivery and acceptance and any other document required to be executed by the Buyers in respect of the delivery of the Vessel from the Sellers to the Buyers pursuant to this Agreement, and authorising further execution of a Power of Attorney authorising the execution any and all other documents and undertakings provided in this Agreement such resolutions to be duly legalised by Apostille.
(d) An original set of an officer's certificate of incumbency of the Buyers certifying the names of all present directors/officers of the Buyers and attaching copies of all correct and complete constitutional documents in full force and effect of the Buyers (Copies of the Articles of Incorporation and By-Laws (together with any amendment thereto up to and including the delivery date)).
(e) An original Power of Attorney of the Buyers issued in accordance with the resolutions referred to under 17. B. (c) above authorising the persons signing the documents on their behalf such power of attorney to be duly legalised by Apostille .
(f) Original written resolutions of the Buyers' Shareholder, approving the BOD minutes under 17. B. (c), such resolutions to be duly legalised by Apostille.
The parties undertake to exchange drafts of the above documents and agree final formats latest 7 (seven) Banking days prior to the delivery date of the Vessel.
18. DRYDOCKING

NO DRYDOCKING CLAUSE TO APPLY AND CLAUSE 6 OF SALESFORM 1993 IS DELETED.

HOWEVER, PROMPTLY BEFORE OR AFTER THE VESSEL'S ARRIVAL AT THE DELIVERY PORT AND PRIOR TO THE VESSEL'S DELIVERY THE BUYERS HAVE THE RIGHT TO CARRY OUT AN INSPECTION OF THE VESSEL'S UNDERWATER (BELOW SUMMER LOADLINE) PARTS BY CLASS

APPROVED DIVERS WITH VIDEO LINK TO THE ATTENDING CLASS SURVEYOR, SUCH DIVERS INSPECTION TO BE AT BUYERS' RISK AND EXPENSE.

BUYERS TO ADVISE SELLERS FIVE (5) DAYS PRIOR TO DELIVERY IF THEY INTEND TO CARRY OUT UNDERWATER INSPECTION. IF THE DECLARED BY SELLERS DELIVERY PORT IS NOT FEASIBLE FOR AN UNDERWATER INSPECTION, BUYERS SHALL PROMPTLY ADVISE SELLERS OF AN ALTERNATIVE PLACE NEAR TO THE DELIVERY PORT, TO BE MUTUALLY AGREED, WHERE SELLERS ARE TO MAKE THE VESSEL AVAILABLE, AT SELLERS' COST (EXCEPT FOR THE BUNKERS' COST WHICH SHALL BE BORNE EQUALLY BETWEEN THE SELLERS AND THE BUYERS), FOR SUCH AN INSPECTION. THE EXTENT OF THE INSPECTION AND CONDITIONS UNDER WHICH IT IS PERFORMED SHALL BE TO THE SATISFACTION OF THE CLASSIFICATION SOCIETY.

THE DIVERS INSPECTION TO BE CARRIED OUT IN A MANNER AND UNDER CONDITIONS CONSIDERED SUITABLE BY THE ATTENDING CLASS SURVEYOR FOR SUCH UNDERWATER INSPECTION. ATTENDANCE ARRANGEMENTS AND FEES FOR THE ATTENDING CLASS SURVEYOR SHALL BE FOR THE BUYERS' ACCOUNT AND THE COST OF THE DIVERS FOR THE BUYERS' ACCOUNT.

A) IF ANY DAMAGE IS FOUND TO THE VESSELS UNDERWATER PARTS WHICH LEADS TO IMPOSING RECOMMENDATION(S) AGAINST THE VESSEL, AND REQUIRES SAME TO BE REPAIRED PRIOR TO THE VESSEL'S NEXT DUE DRYDOCKING DATE, THEN THE SELLERS SHALL REPAIR SUCH DAMAGE TO THE SATISFACTION OF CLASSIFICATION SOCIETY AT THE SELLERS' TIME AND EXPENSE, PRIOR TO THE VESSEL'S DELIVERY TO THE BUYERS. SHOULD THE VESSEL BE REQUIRED TO DRYDOCK TO EFFECT SUCH REPAIRS TO CLASS SATISFACTION, THEN THE BUYERS SHALL HAVE THE RIGHT TO SCRAPE/PAINT THE VESSEL'S UNDERWATER PARTS AT THE BUYERS' RISK & EXPENSE WHILST THE VESSELS IS IN DRYDOCK. ALL COSTS AND MATERIALS ASSOCIATED WITH THE BUYERS' WORKS AND ANY EXTRA DRYDOCKING TIME REQUIRED FOR THE BUYERS TO CARRY OUT/COMPLETE THEIR WORKS SHALL BE FOR THE BUYERS' ACCOUNT. SUCH BUYERS' WORKS SHALL NOT INTERFERE WITH THE SELLERS' WORKS AND NOT TO DELAY THE DELIVERY OF THE VESSEL. IN THE EVENT THAT THE SELLERS HAVE COMPLETED THEIR WORKS IN THE DRYDOCK TO THE SATISFACTION OF CLASS AND THE BUYERS WORKS ARE NOT YET COMPLETED, THEN THE SELLERS HAVE THE RIGHT TO TENDER NOR FOR DELIVERY TO THE BUYERS WHILST THE VESSEL IS IN DRYDOCK. IN THE EVENT OF THE VESSEL BEING REQUIRED TO DRYDOCK FOR REPAIRS AND THERE ARE NO SUITABLE DRYDOCKING FACILITIES AVAILABLE AT THE DELIVERY PORT, THEN THE SELLERS SHALL TAKE THE VESSEL IN BALLAST TO THE NEAREST PORT/PLACE WHERE SUITABLE DRYDOCKING FACILITIES ARE AVAILABLE, AND A NEW DELIVERY PORT TO BE AGREED BETWEEN THE PARTIES. IT IS HEREBY MUTUALLY AGREED BY THE SELLERS AND THE BUYERS, THAT IN THE EVENT OF DAMAGE AFFECTING CLASS BEING FOUND DURING THE DIVERS INSPECTIONS AS MENTIONED ABOVE, THEN THE AGREED CANCELLING DATE SHALL AUTOMATICALLY BE EXTENDED BY THE ADDITIONAL TIME REQUIRED FOR THE DRYDOCKING,

REPAIRS AND EXTRA STEAMING, BUT LIMITED TO A MAXIMUM OF FOURTEEN (14) RUNNING DAYS. CLASS ATTENDANCE FEES AND DIVERS COSTS TO BE FOR SELLERS' ACCOUNT.

B) IF ANY DAMAGE(S) TO THE VESSEL'S UNDERWATER PARTS   IS FOUND WHICH LEADS TO CLASS IMPOSING A RECOMMENDATION(S) AGAINST THE VESSEL BUT AGREE TO POSTPONE PERMANENT REPAIRS TO SAME UNTIL THE VESSEL'S NEXT DUE DRYDOCKING DATE THEN, IN LIEU OF THE SELLERS REPAIRING SUCH DAMAGE(S), THE SELLERS TO COMPENSATE THE BUYERS BY WAY OF PAYMENT IN CASH TO THE BUYERS NOMINATED ACCOUNT AND THE BUYERS SHALL TAKE DELIVERY OF THE VESSEL AS SHE IS WITH SUCH RECOMMENDATION(S) OUTSTANDING. THE SELLERS AND THE BUYERS SHALL EACH OBTAIN A QUOTATION FOR THE REPAIR OF SUCH DAMAGE FROM TWO (2) SEPARATE REPUTABLE SHIP REPAIR YARDS IN THE AREA, AND THE COMPENSATION AMOUNT TO THE BUYERS SHALL BE THE AVERAGE OF THE TWO (2) REPAIR QUOTATIONS RECEIVED BY THE BUYERS AND SELLERS RESPECTIVELY AS MENTIONED ABOVE. CLASS ATTENDANCE FEES AND DIVERS COSTS TO BE FOR SELLERS' ACCOUNT.

19. P AND C
The terms and conditions of the sale to be kept strictly private and confidential by all parties involved, save as required otherwise by the Securities and Exchange Commission or US stock listed exchange rules applicable to the Buyers.
20. Notices
Any and all notices and communication in connection with this Agreement shall be in English in writing and shall be sent as follows:

(a) if to the Sellers at:
Attention: Asteria Bagouli
Telephone: +302108910288
Fax: +302108910295
E-mail: legal@ensh.com
or such other address as the Sellers may notify the Buyers.

(b) If to the Buyers at:
Attention: Stamatios Tsantanis
Telephone: +30 213 0181 507
Fax: +30 210 9638404
E-mail: snt@seanergy.gr  
or such other address as the Buyers may notify the Sellers
21. Performance Guarantee
Seanergy Maritime Holdings Corp., of the Marshall Islands ("Seanergy") guarantees the performance by the Buyer of all of its obligations under this Agreement.
22. Contracts (Rights of Third Parties) Act 1999
Nothing contained in this Agreement confers or purports to confer on any third party any benefit or any right to enforce any term hereof pursuant to the Contracts (Rights of Third Parties) Act 1999.
23. Purchase Agreement & this Agreement


This Agreement is one of the "MOAs" referred to and defined in the Purchase Agreement. If there is any inconsistency between the terms and conditions of this Agreement and the terms and conditions of said Purchase Agreement, then the terms and conditions of the Purchase Agreement shall prevail.
24. Condition Precedent to this Agreement
The obligations of the Buyer and Seanergy's performance guarantee under Clause 21 to consummate the transactions contemplated by this Agreement and take delivery of the Vessel shall be subject to the fulfillment, at or prior to the delivery date of the Vessel, of the following condition:
The Buyer shall have secured financing for the acquisition of the Vessel.
In the event that the above condition is not fulfilled at or prior to the delivery date of the Vessel, this Agreement shall forthwith become void and null and there shall be no liability on the part of any party hereto and Seanergy except that nothing herein shall relieve any party hereto from liability for any willful breach of any provision hereof.
25. Entire Agreement
The written terms of this Agreement comprise the entire agreement between the Buyers and the Sellers in relation to the sale and purchase of the Vessel.
 

For the Sellers
 
For the Buyers
 
       
       
       
/s/ Nikolaos Sakalaridis
 
/s/ Stamatios Tsantanis
 
Name:
Nikolaos Sakalaridis
 
Name:
Stamatios Tsantanis
 
Title:
Authorized Director
 
Title:
Authorized Director
 
Exhibit 4.36
 
 
 
MEMORANDUM OF AGREEMENT
Norwegian Shipbrokers' Association's Memorandum of Agreement for sale and purchase
of ships. Adopted by The Baltic and International Maritime Council (BIMCO) in 1956.
Code-name
SALEFORM 1993


 
Dated: 6 August 2015

Cape Ann Marine Inc., of the British Virgin Islands
hereinafter called the Sellers, have agreed to sell, and
1
 

SQUIRE OCEAN NAVIGATION CO., of Liberia
hereinafter called the Buyers, have agreed to buy the
2

Name: ETERNUS
3

Classification Society/Class:
BV
4
Built:   2010
By: Sungdong Shipbuilding & Marine Eng. Co. Ltd., South Korea
5
Flag: Isle of Man
Place of Registration:   Douglas
6
Call sign: 2CPA2
Grt/Nrt: 88.479/56.828
7
Register IMO Number: 9391646
8
hereinafter called the Vessel, on the following terms and conditions:
9
Definitions
10

" Banking days " are days on which banks are open in the country of the currency
11
Stipulated for the Purchase Price in Clause 1 ,   and in the place of closing stipulated in Clause 8, in the country of the Vessel's flag ,   Greece, USA, UK and in the country of the Vessel's mortgagee bank .
12

" in writing " or " written " means a letter handed over from the Sellers to the Buyers or vice versa,
13
a registered letter, telefax or other modern form of written communication .
14

" Classification Society " or " Class " means the Society referred to in line 4.
 
" Purchase Agreement " means the purchase agreement dated 6 August 2015 made by and among, inter alios, Seanergy (as defined in Clause 21 hereof) and the Sellers.
 
15
1.
Purchase Price:
USD 34,350,173 (United States Dollars thirty four million three hundred fifty thousand one hundred seventy three) only
16
2.
Deposit
 
17

As security for the correct fulfilment of this Agreement  the  Buyers shall pay a deposit of 1 0 %
18
(ten per cent) of the Purchase Price within   banking days from the date of this
19
Agreement. This deposit shall be placed with
20
and   held  by them in a joint  account  for the  Sellers  and  the  Buyers, to be released in accordance
21
with joint written instructions of the  Sellers  and   the  Buyers.  Interest, if any, to  be  credited to  the
22
Buyers. Any fee charged  for holding  the said deposit  shall  be  borne  equally  by  the  Sellers  and  the
23
Buyers.
24

3.
Payment
25
 
The said Purchase Price   shall be paid in full free of bank charges by Buyers to Sellers' account, 
26
details of which shall be furnished by Sellers, 
 
before delivery of the Vessel, but not later than 3 (three) Banking days after the Vessel is in every respect
27
physically ready for delivery in accordance with the terms and conditions of this Agreement and
Notice of Readiness ("NOR") has been given in accordance with Clause 5.
28
29
   30

4 .
Inspections
 

a)*
The Buyers have waived the physical inspection for the Vessel and have accepted her. The Buyers have inspected and accepted the Vessel's classification records. Therefore the sale is outright and definite, subject only to the terms and conditions of this Agreement . The Buyers
31
 
have also inspected the Vessel at/in   [               ] on   [               ]
32
 
and have accepted the Vessel following this inspection and   the sale is outright and definite,
33
 
subject only to the terms and conditions of this Agreement.
34

b)*
The  Buyers  shall   have  the right  to   inspect  the  Vessel's     classification  records   and   declare
35
 
whether same are accepted  or  not   within
36

 
The Sellers shall provide for   inspections of the Vessel at/in
37

 
The  Buyers  shall  undertake  the  inspection   without  undue  delay  to  the  Vessel.   Should  the
38
 
Buyers  cause  undue  delay  they  shall  compensate  the  Sellers  for the losses thereby incurred.
39
 
The  Buyers  shall  inspect  the  Vessel without opening up   and without    cost  to  the  Sellers
40
 
During  the  inspection,  the  Vessel's  deck  and  engine  log  books  shall  be  made  available for
41
 
examination  by  the  Buyers. If the  Vessel  is  accepted  after  such  inspection,  the  sale shall
42
 
become outright and definite, subject  only  to  the  terms  and  conditions  of  this  Agreement,
43
 
provided the  Sellers receive   written notice  of  acceptance  from  the  Buyers  within  72 hours
44
 
after  completion  of  such  inspection.
45
 
Should  notice  of  acceptance  of   the  Vessel's classification  records  and  of  the Vessel not be
46
 
received  by  the  Sellers  as  aforesaid, the deposit together  with   interest earned   shall  be
47
 
released  immediately to the  Buyers, whereafter  this  Agreement shall be   null and void.
48

*
4 a) and 4b) are alternatives; delete whichever is not applicable. In the absence of deletions,
49
 
alternative 4a) to apply.
50

5 .
Notices, time and place of delivery
51

a)
The Sellers shall keep the Buyers well informed of the Vessel's itinerary   and shall
52
 
provide the Buyers with 30/20/15/10/7/5/ 3   approximate and 2 and 1 definite day s notice s of the expected time and place of arrival at the
53
 
intended time and place of drydocking/underwater inspection/ delivery. When the Vessel is at the
54
 
place of delivery and in every respect physically ready for delivery in accordance with this
55
 
Agreement, the Sellers shall give the Buyers a written NOR for delivery.
 
56
b)
The Vessel shall be delivered to the Buyers free of stowaways, free of cargo, with clean swept holds
57
 
safely afloat at a safe and accessible berth, port or anchorage worldwide .
58
   
59
 
Expected time of delivery : 17 August 2015 – 30 November 2015 or such later date at Buyers' option.
 
60
 
Date of cancelling (see Clauses 5 c), 6 b) (iii) and 14): 30 November 2015 or such later date at Buyers' option .
61

c)
If the Sellers anticipate that, notwithstanding the exercise of due diligence by them, the
62
 
Vessel will not be ready for delivery by the cancelling date they may notify the Buyers in
63
 
writing stating the date when they anticipate that the Vessel will be ready for delivery and
64
 
propose a new cancelling date. Upon receipt of such notification the Buyers shall have the
65
 
option of either cancelling this Agreement in accordance with Clause 14 within 4 7 running
66
 
days of receipt of the notice or of accepting the new date as the new cancelling date. If the
67
 
Buyers have not declared their option within 4   7 running days of receipt of the Sellers'
68
 
notification or if the Buyers accept the new date, the date proposed in the Sellers' notification
69
 
shall be deemed to be the new cancelling date and shall be substituted for the cancelling
70
 
date stipulated in line 61.
71

 
If this Agreement is maintained with the new cancelling date all other terms and conditions
72
 
hereof including those contained in Clauses 5 a) and 5 c) shall remain unaltered and in full
73
 
force and effect. Cancellation or failure to cancel shall be entirely without prejudice to any
74
 
claim for damages the Buyers may have under Clause 14 for the Vessel not being ready by
75
 
the original cancelling date.
76


d)
Should the Vessel become an actual, constructive or compromised total loss before delivery
77
 
the deposit together  with  interest  earned shall be released immediately to the Buyers
78
 
whereafter this Agreement shall be null and void .
79

6.
  Drydocking / Divers Inspection - SEE CLAUSE 18 of this Agreement .
80

a)**
The Sellers shall place the Vessel in drydock at the port of delivery for inspection by the
81
 
Classification Society of the Vessel's underwater parts below the deepest load line, the
82
 
extent of the inspection being in accordance with the Classification Society's rules.  If the
83
 
rudder, propeller, bottom or other underwater parts below the deepest load line are found
84
 
broken, damaged or defective so as to affect the Vessel's class, such defects shall be made
85
 
good at the Sellers' expense to the satisfaction of the Classification Society without
86
 
condition/recommendation*.
87

b)**
(i)              The Vessel is to be delivered without drydocking.  However, the Buyers shall
88
 
have the right at their expense to arrange for an underwater inspection by a diver approved
89
 
by the Classification Society   prior to the delivery of the Vessel.  The Sellers shall at their
90
 
cost make the Vessel available for such inspection. The extent of the inspection and the
91
 
conditions under which it is performed shall be to the satisfaction of the Classification
92
 
Society. If the conditions at the port of delivery are unsuitable for such inspection, the
93
 
Sellers shall make the Vessel available   at a suitable alternative place near to the delivery
94
 
port.
95

 
ii)              If the rudder, propeller, bottom or other underwater parts below the deepest load line
96
 
are found broken, damaged or defective so as to affect the Vessel's class, then unless
97
 
repairs can be carried out afloat to the satisfaction of the Classification Society, the Sellers
98
 
shall arrange for the Vessel to be drydocked at their expense for inspection by the
99
 
Classification Society of the Vessel's underwater parts below the deepest load line, the
100
 
extent of the inspection being in accordance with the Classification Society's rules.  If the
101
 
rudder, propeller, bottom or other underwater parts below the deepest load line are found
102
 
broken, damaged or defective so as to affect the Vessel's class, such defects shall be made
103
 
good by the Sellers at their expense to the satisfaction of the Classification Society
104
 
without condition/recommendation*. In such event the Sellers are to pay also for the cost of
105
 
the underwater inspection and the Classification Society's attendance.
106

 
(iii)              If the Vessel is to be drydocked pursuant to Clause 6 b) (ii) and no suitable dry-
107
 
docking facilities are available at the port of delivery, the Sellers shall take the Vessel
108
 
to a port where suitable drydocking facilities are available, whether within or outside the
109
 
delivery range as per Clause 5 b). Once drydocking has taken place the Sellers shall deliver
110
 
the Vessel at a port within the delivery range as per Clause 5 b) which shall, for the
111
 
purpose of this Clause, become the new port of delivery. In such event the cancelling date
112
 
provided for in Clause 5 b) shall be extended by the additional time required for the
113
 
drydocking and extra steaming, but limited to a maximum of 14 running days.
114

c)
If the Vessel is drydocked pursuant to Clause 6 a) or 6 b) above
115

 
(i)              the Classification Society may require survey of the tailshaft system, the extent of
116
 
the survey being to the satisfaction of the Classification surveyor. If such survey is not
117
 
required by the Classification Society, the Buyers shall have the right to require the tailshaft
118
 
to be drawn and surveyed by the Classification Society, the extent of the survey being in
119
 
accordance with the Classification Society's rules for tailshaft survey and consistent with
120
 
the current stage of the Vessel's survey cycle. The Buyers shall declare whether they
121
 
require the tailshaft to be drawn and surveyed not later than by the completion of the
122
 
inspection by the Classification Society. The drawing and refitting of the tailshaft shall be
123
 
arranged by the Sellers. Should any parts of the tailshaft system be condemned or found
124
 
defective so as to affect the Vessel's class, those parts shall be renewed or made good at
125
 
the Sellers' expense to the satisfaction of the Classification Society without
126
 
condition/recommendation*.
127

 
(ii)              the expenses relating to the survey of the tailshaft system shall be borne
128
 
by the Buyers unless the Classification  Society requires such survey to be carried out, in
129
 
which case the Sellers shall pay these expenses. The Sellers shall also pay the expenses
130
 
if the Buyers require the survey  and  parts of the system are condemned or found defective
131
 
or broken so as to affect the Vessel's class*.
132


 
(iii)              the expenses in connection with putting the Vessel in and taking her out of
133
 
drydock, including the drydock dues and the Classification Society's fees shall be paid by
134
 
the Sellers if the Classification Society issues any condition/recommendation* as a result
135
 
of the survey or if it requires survey of the tailshaft system. In all other cases the Buyers
136
 
shall pay the aforesaid expenses, dues and fees.
137

 
(iv)              the Buyers' representative shall have the right to be present in the drydock, but
138
 
without interfering with the work or decisions of the Classification surveyor.
139

 
(v)              the Buyers shall have the right to have the underwater parts of the Vessel
140
 
cleaned and painted at their risk and expense without interfering with the Sellers' or the
141
 
Classification surveyor's work, if any, and without affecting the Vessel's timely delivery. If,
142
 
however, the Buyers' work in drydock is still in progress when the Sellers have
143
 
completed the work which the Sellers are required to do, the additional docking time
144
 
needed to complete the Buyers' work shall be for the Buyers' risk and expense. In the event
145
 
that the Buyers' work requires such additional time, the Sellers may upon completion of the
146
 
Sellers' work tender Notice of Readiness for delivery whilst the Vessel is still in drydock
147
 
and the Buyers shall be obliged to take delivery in accordance with Clause 3, whether
148
 
the Vessel is in drydock or not and irrespective of Clause 5 b).
149

*
Notes, if any, in the surveyor's report which are accepted by the Classification Society
150
 
without condition/recommendation are not to be taken into account.
151

**
6 a) and 6 b) are alternatives; delete whichever is not applicable. In the absence of deletions,
152
 
alternative 6 a) to apply
153

7.
Spares/bunkers, etc.
154

The Sellers shall deliver the Vessel to the Buyers with everything belonging to her on board and on
155
shore , including broached/unbroached stores and provisions and spares without extra payment . All spare parts and spare equipment including spare tail-end shaft(s) and/or spare
156
propeller(s)/propeller blade(s), if any, belonging to the Vessel at the time of inspection used or
157
unused, whether on board or not shall become the Buyers' property.
158
Forwarding charges, if any, shall be for the Buyers' account. The Sellers are not required to replace spare
159
parts including spare tail-end shaft(s) and spare propeller(s)/propeller blade(s) which are taken out
160
of spare and used as replacement prior to delivery, but the replaced items shall be the property of
161
the Buyers. The radio installation, GMDSS and navigational equipment shall be included in the sale without extra payment if they are the property of the Sellers.
162
Unused stores and provisions shall be included in the sale and be taken over
163
by the Buyers without extra payment .
164

The Sellers have the right to take ashore crockery, plates, cutlery, linen and other articles bearing the
165
Sellers' flag or name, provided they replace same with similar unmarked items. Library, forms, etc .,
166
exclusively for use in the Sellers' vessel(s), shall be excluded without compensation. Captain's,
167
Officers' and Crew's personal belongings including the slop chest are to be excluded from the sale,
168
as well as the following additional items (including items on hire):
 
-UNITOR'S OXYGEN/ACETYLENE/FREON CYLINDERS, EMPTY/FULL;
-MARICHEM SYSTEM MHCS 200;
-ORIGINAL FLAG CERTIFICATES (Registry – Intern. Tonnage – Radio Station Licence – Minimum Safe Manning – CLCertificate - MLCertificate )– necessary for Ship's deletion from the articles;
-LIBRARY, FORMS, RECORDS, REPORTS, DECK and ENGINE Log Books, CORRESPONDENCE exclusively used by the Sellers;
-CD ROM QSEMS;
-SEAGULL TRAINING CDs;
-Lloyds MARINER – Risk Assessment CDs;
-LR Manager (Working hours) CDs;
-AMVER DISKETTE;
-EST SAFETY LABELS (35);
-ISPS CODE / CD / INSTRUCTIONS AND SECURITY AWARENESS CBT 115 AND ISPS TRAINER;
-OWNERS LISTS/ISM & ISPS system manuals / Company's Soft and Hardware/PC's etc.; and
-SECURITY IDENTIFICATION BADGES (CREW AND VISITORS) .
 
169

The Buyers shall take over the remaining bunkers and unused lubricating oils in storage tanks and
170
sealed drums and pay the current net market  price (excluding  barging  expenses) at the port and date
171
of delivery of the Vessel Buyers shall take over the bunkers remaining on board with cost as per Platts prices for Singapore published three (3) banking days prior to the Vessel's delivery. Buyers shall also take over the remaining unbroached lubricants respectively in sealed drums/tins or in designated storage tanks not having passed to the engines/equipment through Vessel's system at Sellers' net contract prices of last supply as evidenced by the relevant copies of invoices. Exact quantities of remaining bunkers and lubricating oils shall be measured and agreed by and between the Sellers' and the Buyers' representatives latest by one (1) Banking day prior to expected date of delivery of the Vessel.
172
Payment under this Clause shall be made in cash at the same time and place
173
and in the same currency as the Purchase Price.
174

8.
Documentation
175
 
 
The place of closing: Athens, Greece
176

In exchange for payment of the Purchase Price and delivery of the Vessel the Sellers shall furnish the Buyers and the Buyers shall furnish the Sellers with the delivery documents stated in this Clause and in Clause 17 of this Agreement. namely :
177
178
 
a)
Legal Bill of Sale in a form recordable in           (the country in  which  the Buyers  are
179
 
to register the Vessel),  warranting that  the  Vessel  is  free  from  all  encumbrances,  mortgages
180
 
and  maritime   liens  or  any  other  debts   or  claims  whatsoever,  duly  notarially  attested  and
181
 
legalized by the consul of such country or other competent  authority.
182

b)
Current Certificate of  Ownership  issued  by  the  competent  authorities  of  the  flag  state  of
183
 
the Vessel.
184

c)
Confirmation of Class issued within 72 hours prior to delivery.
185

d)
Current Certificate issued by the competent  authorities  stating  that  the  Vessel  is  free  from
186
 
registered encumbrances
187

e)
Certificate of Deletion of the Vessel from the  Vessel's  registry  or  other  official  evidence  of
188
 
deletion appropriate to the Vessel's registry at the time of delivery, or,  in  the  event  that  the
189
 
registry does not  as  a  matter  of  practice  issue  such  documentation  immediately,  a  written
190
 
undertaking by the Sellers to effect deletion from the Vessel's  registry  forthwith  and  furnish  a
191
 
Certificate or other official evidence of deletion to  the  Buyers  promptly  and  latest  within  4
192
 
(four) weeks after the  Purchase  Price  has  been paid and the  Vessel has been delivered.
193

f)
Any  such  additional  documents  as  may  reasonably  be  required  by  the  competent  authorities
194
 
for  the purpose of  registering  the  Vessel, provided  the   Buyers  notify  the  Sellers  of  any  such
195
 
documents as soon as possible after the date of this Agreement
196

At the time of delivery the Buyers and Sellers shall sign and deliver to each other a Protocol of
197
Delivery and Acceptance confirming the date and time of delivery of the Vessel from the Sellers to the
198
Buyers.
199

At the time of delivery the Sellers shall hand over   to the Buyers the classification certificate(s) as well as all
200
Plans etc., which are on board the Vessel. Other certificates which are on board the Vessel shall also
201
be handed over to the Buyers unless the Sellers are required to retain same, in which case the
202
Buyers to have the right to take copies. Other technical documentation which may
203
be in the Sellers' possession shall be promptly forwarded to the Buyers at their expense, if they so
204
request. The Sellers may keep the Vessels log books but the Buyers to have the right to take
205
copies of same at Buyers' account .
 
206
9 .
Encumbrances
207

The Sellers warrant that the Vessel, at the time of delivery, is free from all charters, encumbrances,
208
Mortgages, taxies, levies, duties and maritime liens or other liens or any other debts whatsoever and is not subject to any port state or administrative detentions. The Sellers hereby undertake
209
to indemnify the Buyers against all consequences of claims made against the Vessel which have
210
been incurred prior to the time of delivery or arising out of or with respect to events occurring prior to the
211

time of delivery .

10 .
Taxes, etc.
212

Any taxes, fees and expenses in connection with the purchase and registration under the Buyers' flag
213
shall be for the Buyers' account, whereas similar charges in  connection with the closing of the Sellers'
214
register shall be for the Sellers' account.
215

11 .
Condition on delivery
216

The Vessel with everything belonging to her shall be at the Sellers' risk and expense until she is
217
delivered to the Buyers, but subject to the terms and conditions of this Agreement she shall be
218
delivered and taken over "as is where is"   as she was at the time of inspection, fair wear and tear excepted .
219
However, the Vessel shall be delivered free of stowaways, free of cargo and with clean swept holds and with her class maintained without condition/recommendation*,
220
free of average damage affecting the Vessels class, and with her classification certificates and
221
National/international/trading   certificates and Continuous Survey of Machinery (CSM), as well as all other
222
certificates of the Vessel had at the time of   inspection ,
223
clean, valid and unextended for a minimum period of 3 (three)   months from the time of the delivery without condition/recommendation * by Class or the relevant authorities at the time of delivery .
224
" Inspection " in this Clause 11, shall mean the Buyers' inspection according to Clause 4 a) or 4 b), if
225
applicable, or the Buyers' inspection prior to the signing of this Agreement. If the Vessel is taken over
226
without inspection, the date of this Agreement shall be the relevant date.
227

*          Notes, if any, in the surveyor's report  which are accepted by the Classification Society
228
            without condition/recommendation are not to be taken into account.
229

12 .
Name / markings
230

Upon delivery the Buyers undertake to   change the name of the Vessel and alter funnel markings.
 
231
13.
Buyers' default
232

Should the deposit not be paid in accordance with Clause 2, the Sellers have the right to cancel  this
233
Agreement, and  they shall be entitled to  claim  compensation for their losses and for all expenses
234
incurred together with interest.
235
Should the Purchase Price not be paid in accordance with Clause 3, the Sellers have the right to
236
cancel the Agreement , in which case the deposit  together  with interest  earned  shall  be released  to  the
237
Sellers.  If the  deposit  does  not  cover  their  loss, but in case of such cancellation the Sellers shall not
238
be entitled to claim further compensation for any losses suffered and/or for any expenses incurred together with interest.
239

14 .
Sellers' default
240

Should the Sellers fail to give NOR in accordance with Clause 5 a) or fail to be ready
241
to validly complete a legal transfer by the date stipulated in line 61 the Buyers shall have
242
the option of cancelling this Agreement provided always that the Sellers shall be granted a
243
maximum of 3 (three) Banking days after the NOR has been given to make arrangements
244
for the documentation set out in Clause 8 and Clause 17. If after NOR has been given but before
245
the Buyers have taken delivery, the Vessel ceases to be physically ready for delivery and is not
246
made physically ready again in every respect by the date stipulated in line 61 and new NOR
247
given, the Buyers shall retain their option to cancel. In  the  event  that  the  Buyers  elect
248
to  cancel this Agreement  the  deposit  together  with  interest earned shall be released to them
249
immediately.
250
Should the Sellers fail to give NOR by the date stipulated in line 61 or fail to be ready
251
to validly complete a legal transfer as aforesaid they shall make due compensation to the Buyers for
252
their loss and for all expenses together with interest if their failure is due to proven
253
negligence and whether or not the Buyers cancel this Agreement.
254

15 .
Buyers' representatives
255

After this Agreement has been signed by both parties and  the deposit  has  been  lodged , the Buyers
256
have the right to place two (2) representatives on board the Vessel at their sole risk and expense upon
257
arrival at  ________ on or about _________ immediately.
258

These representatives/crew shall remain on board until delivery of the Vessel to, and acceptance of the Vessel by, the Buyers for the purpose of familiarisation and in the capacity of
259
observers only, and they shall not interfere in any respect with the operation of the Vessel. The
260
Buyers' representatives/crew shall sign the Sellers' letter of indemnity prior to their embarkation.
 
261
16.
Arbitration
 
a)*              This Agreement (and any non-contractual obligations connected with this Agreement) shall be governed by and construed in accordance with English law and any dispute arising out of this
262
263
Agreement and/or any non-contractual obligations connected with this Agreement shall be referred to
264
arbitration in London in accordance with the Arbitration Acts 1996 or any statutory modification or
265
re-enactment thereof for the time being in force, one arbitrator being appointed by each
266
party. The arbitrators shall be full members of the London Maritime Arbitrators Association ("LMAA"). On the receipt by one party of the nomination in writing of the other party's arbitrator,
267
that party shall appoint their arbitrator within fourteen days, failing which the decision of the
268
single arbitrator appointed shall apply. If two arbitrators are properly appointed
269
they shall appoint a third arbitrator failing which the third arbitrator shall be appointed by the President of the LMMA at the time within 21 (twenty one) days of the two arbitrators being appointed.
270

b)*              This  Agreement  shall  be  governed  by  and  construed  in  accordance  with  Title  9  of   the
271
United States Code and the Law of the State of New York  and  should  any  dispute  arise  out  of
272
this Agreement, the matter in dispute shall be referred to three  persons  at  New  York,  one  to
273
be appointed by each  of  the  parties  hereto,  and  the  third  by  the  two  so  chosen;  their
274
decision or that of any two of them shall be final, and for purpose of enforcing any  award,  this
275
Agreement may be made a rule of the Court.
276
The proceedings shall be conducted in accordance  with  the  rules  of  the  Society  of  Maritime
277
Arbitrators, Inc.  New York.
278

c)*              Any dispute arising out of this Agreement shall be referred to arbitration at London in accordance with the Arbitration Act 1996 and subsequent alterations (if any), LLMAA rules to apply
279
, subject to the procedures applicable there.
280
The laws of England shall govern this Agreement.
281

*              16 a), 16 b) and 16 c) are altematives; delete whichever is not applicable.  In the absence of
282
deletions, altemative 16 a) to apply .
283


Additional Clauses 17, 18, 19, 20, 21, 22, 23, 24 and 25, inclusive as herein below, are deemed to
be fully incorporated into and form an integral part of this Agreement.

17. Delivery Documents

A. In exchange of the payment of the Purchase Price and other monies due under Clause 3 of this Agreement, the Sellers shall furnish the Buyers with the following delivery documents, namely:
(a)              Three originals of a legal bill of sale in form recordable in the Buyers' new flag in the English language (the "Bill of Sale") in favour of the Buyers, evidencing the transfer of all (100 percent) of the shares and interest in and title to the Vessel to the Buyers and warranting that the Vessel is free from all mortgages, encumbrances, charters, maritime liens or other liens, claims, taxes, levies, duties and any other debts whatsoever or any port state or administrative detentions, duly executed by the Sellers and duly certified by a notary public and legalized by Apostille.
(b)              Fax or email copy of Transcript of Register issued by the Isle of Man   Registry and dated the delivery date showing the Vessel to be registered in the ownership of the Sellers and free and clean from encumbrances and mortgages to be faxed to the closing meeting in Greece. The original of such Transcript of Register will be provided to the Buyers not later than 10 (ten) Banking days after the delivery date of the Vessel to the Buyers and the Sellers shall provide a written undertaking to the Buyers to that end.

(c)              A certified true copy of the certificate of incorporation of the Sellers certified by the Sellers' Greek counsel.
(d)              An original set of Minutes of all the members of the Board of Directors of the Sellers or Resolutions of the Sellers adopted by unanimous consent approving, authorizing and confirming the entry into this Agreement and any amendments and/or addendums thereto, authorising the sale of the Vessel in accordance with the provisions of this Agreement and authorizing persons to conclude the sale, transfer and delivery of the Vessel to the Buyers and sign, execute and deliver on behalf of the Sellers, inter alia , the Bill of Sale, a protocol of delivery and acceptance and any other document required to be executed by the Sellers in respect of the delivery of the Vessel from the Sellers to the Buyers thereof pursuant to this Agreement and also authorizing the execution of Power(s) of Attorney to a specific person or persons empowering them to execute and deliver such documents and take such steps as may be necessary or appropriate in order to transfer and deliver the Vessel to the Buyers, such Minutes to be duly certified by a notary public and legalized by Apostille.
(e)              Original written resolutions of the Shareholder(s) , approving the BOD minutes or Resolutions of the Sellers under 17. A. (d) above, duly certified by a notary public and legalized by Apostille.
(f)              An original Power of Attorney of the Sellers executed pursuant to the Minutes or Resolutions referred to in item 17. A. (d) hereinabove duly certified by a notary public and legalized by Apostille.
(g)              An original set of a director's certificate of incumbency of the Sellers certifying the name of all present directors/officers and shareholders of the Sellers and attaching copies of all the correct and complete and up-to-date constitutional documents in full force and effect of the Sellers (Memorandum and Articles of Association) with any amendments .
(h)              An original Certificate of Goodstanding of the Sellers dated no more than 10 (ten) Banking days prior to the delivery date showing the Sellers to be in good standing under the laws of the British Virgin Islands .
(i)              Two original Protocols of Delivery and Acceptance (one for the Sellers and one for the Buyers to be exchanged at the closing in Greece) confirming the delivery of the Vessel by the Sellers to the Buyers.
(j)              Commercial Invoice in three (3) copies dated the delivery date, stating the full particulars of the Vessel and the Purchase Price of the Vessel signed and stamped by the Sellers .
(k)              An original letter of confirmation from the Sellers stating that to the best of their knowledge the Vessel is not blacklisted by Arab Boycott League in Damascus or any other organisation, nation, government, state, country, political sub-division or union as of the delivery date.
(l) (i) A letter of undertaking by the Sellers to effect deletion from the Vessel's Registry forthwith and provide the Buyers with the original Transcript of Closed Register from the Vessel's Registry within 10 (ten) Banking days after delivery of the Vessel and to also provide the Vessel's new flag with a Closed Continuous Synopsis Record issued by the Vessel's Registry within 30 (thirty) running days after delivery of the Vessel; (ii) A copy of the Transcript of Closed Register to be provided to the Buyers on the delivery date; and (iii) a Closed Continuous Synopsis Record from the Vessel's Registry to be issued and

delivered to the Vessel's new flag administration as paragraph (o)(i) above within 30 (thirty) running days after the delivery of the Vessel (unless the Buyers waive this item (I) (i) (ii) and (iii) ) .
(m) Original Class Maintenance Certificate issued by the Vessel's present Class and dated not more than 3 (three) Banking days prior to the date of delivery of the Vessel evidencing that the Vessel is class maintained without condition/recommendation.
(n) An original letter of confirmation from the Sellers addressed to the Buyers confirming that the Vessel has not traded with or called in Israel, Cuba, Iran, Syria, North Korea or any other areas sanctioned or boycotted by the European Union and/or the United States of America and/or the United Nations, dated the delivery date. In case however the Vessel has traded in Israel and/or Iran, Sellers to provide an original letter of confirmation addressed to the Buyers confirming the following: i) the Vessel has not traded with or called in Cuba, Syria, North Korea or any other areas sanctioned or boycotted by the European Union and/or the United States of America and/or the United Nations and ii) that if the Vessel has traded Israel and/or Iran, this was with legal cargo for humanitarian purposes, dated the delivery date .
(o) An original letter of confirmation from the Sellers addressed to the Buyers confirming that the Vessel is entitled to trade worldwide within Institute Warranty Limits without restriction or limitation.
(p) An original letter of confirmation from the Sellers that to the best of their knowledge the Vessel has not touched bottom or suffered any underwater damage from her last drydock up to the date of her delivery.

(q)   One original letter from the Sellers confirming that any outstanding radio accounts shall be settled by the Sellers as soon as practically possible after the Vessel's delivery with no liability regarding the same to be incurred against the Buyers.

(r) Recent AGM free certificate from authorized company, if available.

(s) Most recent original Certificate for Chinese Tonnage Tax dues at no cost, if available .

(t) Any such additional documents as may be reasonably required by the Buyers' flag authorities for the purpose of transferring title and registering the Vessel, provided that the Buyers notify the Sellers of any such documents as soon as possible and in no event later than 7 (seven) days prior to the expected delivery of the Vessel.

B. In exchange of delivery of the Vessel, the Buyers shall furnish the Sellers with the following delivery documents, namely:
(a) Copy of the Certificate of Incorporation of the Buyers, certified as true by the Buyers' Greek Legal Counsel.
(b) Original Good Standing Certificate of the Buyers dated no more than 7 (seven) Banking prior to the delivery date showing the Buyers to be in good standing under the laws of Liberia .

(c) An original set of resolutions or minutes of the Board of Directors of the Buyers authorising the purchase of the Vessel in accordance with the provisions of this Agreement, the ratification of this Agreement signed and the execution on behalf of the Buyers of (inter alia) the acceptance of the Bill of Sale (if applicable), a protocol of delivery and acceptance and any other document required to be executed by the Buyers in respect of the delivery of the Vessel from the Sellers to the Buyers pursuant to this Agreement, and authorising further execution of a Power of Attorney authorising the execution any and all other documents and undertakings provided in this Agreement such resolutions to be duly legalised by Apostille.
(d) An original set of an officer's certificate of incumbency of the Buyers certifying the names of all present directors/officers of the Buyers and attaching copies of all correct and complete constitutional documents in full force and effect of the Buyers (Copies of the Articles of Incorporation and By-Laws (together with any amendment thereto up to and including the delivery date)).
(e) An original Power of Attorney of the Buyers issued in accordance with the resolutions referred to under 17. B. (c) above authorising the persons signing the documents on their behalf such power of attorney to be duly legalised by Apostille .
(f) Original written resolutions of the Buyers' Shareholder, approving the BOD minutes under 17. B. (c), such resolutions to be duly legalised by Apostille.
The parties undertake to exchange drafts of the above documents and agree final formats latest 7 (seven) Banking days prior to the delivery date of the Vessel.
18. DRYDOCKING

NO DRYDOCKING CLAUSE TO APPLY AND CLAUSE 6 OF SALESFORM 1993 IS DELETED.

HOWEVER, PROMPTLY BEFORE OR AFTER THE VESSEL'S ARRIVAL AT THE DELIVERY PORT AND PRIOR TO THE VESSEL'S DELIVERY THE BUYERS HAVE THE RIGHT TO CARRY OUT AN INSPECTION OF THE VESSEL'S UNDERWATER (BELOW SUMMER LOADLINE) PARTS BY CLASS APPROVED DIVERS WITH VIDEO LINK TO THE ATTENDING CLASS SURVEYOR, SUCH DIVERS INSPECTION TO BE AT BUYERS' RISK AND EXPENSE.

BUYERS TO ADVISE SELLERS FIVE (5) DAYS PRIOR TO DELIVERY IF THEY INTEND TO CARRY OUT UNDERWATER INSPECTION. IF THE DECLARED BY SELLERS DELIVERY PORT IS NOT FEASIBLE FOR AN UNDERWATER INSPECTION, BUYERS SHALL PROMPTLY ADVISE SELLERS OF AN ALTERNATIVE PLACE NEAR TO THE DELIVERY PORT, TO BE MUTUALLY AGREED, WHERE SELLERS ARE TO MAKE THE VESSEL AVAILABLE, AT SELLERS' COST (EXCEPT FOR THE BUNKERS' COST WHICH SHALL BE BORNE EQUALLY BETWEEN THE SELLERS AND THE BUYERS), FOR SUCH AN INSPECTION. THE EXTENT OF THE INSPECTION AND CONDITIONS UNDER WHICH IT IS PERFORMED SHALL BE TO THE SATISFACTION OF THE CLASSIFICATION SOCIETY.


THE DIVERS INSPECTION TO BE CARRIED OUT IN A MANNER AND UNDER CONDITIONS CONSIDERED SUITABLE BY THE ATTENDING CLASS SURVEYOR FOR SUCH UNDERWATER INSPECTION. ATTENDANCE ARRANGEMENTS AND FEES FOR THE ATTENDING CLASS SURVEYOR SHALL BE FOR THE BUYERS' ACCOUNT AND THE COST OF THE DIVERS FOR THE BUYERS' ACCOUNT.

A) IF ANY DAMAGE IS FOUND TO THE VESSELS UNDERWATER PARTS WHICH LEADS TO IMPOSING RECOMMENDATION(S) AGAINST THE VESSEL, AND REQUIRES SAME TO BE REPAIRED PRIOR TO THE VESSEL'S NEXT DUE DRYDOCKING DATE, THEN THE SELLERS SHALL REPAIR SUCH DAMAGE TO THE SATISFACTION OF CLASSIFICATION SOCIETY AT THE SELLERS' TIME AND EXPENSE, PRIOR TO THE VESSEL'S DELIVERY TO THE BUYERS. SHOULD THE VESSEL BE REQUIRED TO DRYDOCK TO EFFECT SUCH REPAIRS TO CLASS SATISFACTION, THEN THE BUYERS SHALL HAVE THE RIGHT TO SCRAPE/PAINT THE VESSEL'S UNDERWATER PARTS AT THE BUYERS' RISK & EXPENSE WHILST THE VESSELS IS IN DRYDOCK. ALL COSTS AND MATERIALS ASSOCIATED WITH THE BUYERS' WORKS AND ANY EXTRA DRYDOCKING TIME REQUIRED FOR THE BUYERS TO CARRY OUT/COMPLETE THEIR WORKS SHALL BE FOR THE BUYERS' ACCOUNT. SUCH BUYERS' WORKS SHALL NOT INTERFERE WITH THE SELLERS' WORKS AND NOT TO DELAY THE DELIVERY OF THE VESSEL. IN THE EVENT THAT THE SELLERS HAVE COMPLETED THEIR WORKS IN THE DRYDOCK TO THE SATISFACTION OF CLASS AND THE BUYERS WORKS ARE NOT YET COMPLETED, THEN THE SELLERS HAVE THE RIGHT TO TENDER NOR FOR DELIVERY TO THE BUYERS WHILST THE VESSEL IS IN DRYDOCK. IN THE EVENT OF THE VESSEL BEING REQUIRED TO DRYDOCK FOR REPAIRS AND THERE ARE NO SUITABLE DRYDOCKING FACILITIES AVAILABLE AT THE DELIVERY PORT, THEN THE SELLERS SHALL TAKE THE VESSEL IN BALLAST TO THE NEAREST PORT/PLACE WHERE SUITABLE DRYDOCKING FACILITIES ARE AVAILABLE, AND A NEW DELIVERY PORT TO BE AGREED BETWEEN THE PARTIES. IT IS HEREBY MUTUALLY AGREED BY THE SELLERS AND THE BUYERS, THAT IN THE EVENT OF DAMAGE AFFECTING CLASS BEING FOUND DURING THE DIVERS INSPECTIONS AS MENTIONED ABOVE, THEN THE AGREED CANCELLING DATE SHALL AUTOMATICALLY BE EXTENDED BY THE ADDITIONAL TIME REQUIRED FOR THE DRYDOCKING, REPAIRS AND EXTRA STEAMING, BUT LIMITED TO A MAXIMUM OF FOURTEEN (14) RUNNING DAYS. CLASS ATTENDANCE FEES AND DIVERS COSTS TO BE FOR SELLERS' ACCOUNT.

B) IF ANY DAMAGE(S) TO THE VESSEL'S UNDERWATER PARTS   IS FOUND WHICH LEADS TO CLASS IMPOSING A RECOMMENDATION(S) AGAINST THE VESSEL BUT AGREE TO POSTPONE PERMANENT REPAIRS TO SAME UNTIL THE VESSEL'S NEXT DUE DRYDOCKING DATE THEN, IN LIEU OF THE SELLERS REPAIRING SUCH DAMAGE(S), THE SELLERS TO COMPENSATE THE BUYERS BY WAY OF PAYMENT IN CASH TO THE BUYERS NOMINATED ACCOUNT AND THE BUYERS SHALL TAKE DELIVERY OF THE VESSEL AS SHE IS WITH SUCH RECOMMENDATION(S) OUTSTANDING. THE SELLERS AND THE BUYERS SHALL EACH OBTAIN A QUOTATION FOR THE REPAIR OF SUCH DAMAGE FROM TWO (2) SEPARATE REPUTABLE SHIP REPAIR YARDS IN THE AREA, AND THE COMPENSATION AMOUNT TO THE BUYERS SHALL BE THE AVERAGE OF THE TWO (2) REPAIR QUOTATIONS RECEIVED BY THE BUYERS AND SELLERS RESPECTIVELY AS

MENTIONED ABOVE. CLASS ATTENDANCE FEES AND DIVERS COSTS TO BE FOR SELLERS' ACCOUNT.

19. P AND C
The terms and conditions of the sale to be kept strictly private and confidential by all parties involved, save as required otherwise by the Securities and Exchange Commission or US stock listed exchange rules applicable to the Buyers.
20. Notices
Any and all notices and communication in connection with this Agreement shall be in English in writing and shall be sent as follows:

(a)
if to the Sellers at:
Attention: Asteria Bagouli
Telephone: +302108910288
Fax: +302108910295
E-mail: legal@ensh.com
or such other address as the Sellers may notify the Buyers.

(b)
If to the Buyers at:
Attention: Stamatios Tsantanis
Telephone: +30 213 0181 507
Fax: +30 210 9638404
E-mail: snt@seanergy.gr  
or such other address as the Buyers may notify the Sellers
21. Performance Guarantee
Seanergy Maritime Holdings Corp., of the Marshall Islands ("Seanergy") guarantees the performance by the Buyer of all of its obligations under this Agreement.
22. Contracts (Rights of Third Parties) Act 1999
Nothing contained in this Agreement confers or purports to confer on any third party any benefit or any right to enforce any term hereof pursuant to the Contracts (Rights of Third Parties) Act 1999.
23. Purchase Agreement & this Agreement
This Agreement is one of the "MOAs" referred to and defined in the Purchase Agreement. If there is any inconsistency between the terms and conditions of this Agreement and the terms and conditions of said Purchase Agreement, then the terms and conditions of the Purchase Agreement shall prevail.
24. Condition Precedent to this Agreement
The obligations of the Buyer and Seanergy's performance guarantee under Clause 21 to consummate the transactions contemplated by this Agreement and take delivery of the Vessel shall be subject to the fulfillment, at or prior to the delivery date of the Vessel, of the following condition:
The Buyer shall have secured financing for the acquisition of the Vessel.
In the event that the above condition is not fulfilled at or prior to the delivery date of the Vessel, this Agreement shall forthwith become void and null and there shall be no liability on the part of any party hereto and Seanergy except that nothing herein shall relieve any party hereto from liability for any willful breach of any provision hereof.
25. Entire Agreement

The written terms of this Agreement comprise the entire agreement between the Buyers and the Sellers in relation to the sale and purchase of the Vessel.

For the Sellers
 
For the Buyers
     
     
/s/ Eirini Kritikou
 
/s/ Stamatios Tsantanis
Name: Eirini Kritikou
 
Name: Stamatios Tsantanis
Title: Authorized Director
 
Title: Authorized Director
     
     

Exhibit 4.38
Dated  1  September 2015




SEA GLORIUS SHIPPING CO.
SEA GENIUS SHIPPING CO.
as joint and several Borrowers

and
THE BANKS AND FINANCIAL INSTITUTIONS
listed in Schedule 1
as Lenders
and
HSH NORDBANK AG
as Agent, Mandated Lead Arranger, Swap Bank
and Security Trustee




LOAN AGREEMENT
relating to a senior secured loan facility of up to US$44,430,400
to finance the acquisition cost of
m.vs. "GLORIUSHIP" and "GENIUSHIP"




WATSON FARLEY
&
WILLIAMS
Index
Clause
 
Page
     
1
Interpretation
1
2
Facility
18
3
Position of the Lenders and Swap Bank
18
4
Drawdown
19
5
Interest
20
6
Interest Periods
22
7
Default Interest
23
8
Repayment and Prepayment
24
9
Conditions Precedent
28
10
Representations and Warranties
29
11
General Undertakings
32
12
Corporate Undertakings
36
14
Ship Covenants
43
15
Security Cover
48
16
Payments and Calculations
50
17
Application of Receipts
52
18
Application of Earnings; Swap Payments
53
19
Events of Default
54
20
Fees and Expenses
60
21
Indeminities
61
22
No Set-off or Tax Deduction
64
23
Illegality, etc
65
24
Increased Costs
66
25
Set-off
68
26
Transfers and Changes in Lending Offices
68
27
Variations and Waivers
72
28
Notices
74
29
Joint and Several Liability
76
30
Supplemental
77
31
Law and Jurisdiction
77
Schedule 1 Lenders and Commitments
79
Schedule 2 Drawdown Notice
80
Schedule 3 Condition Precedent Documents
81
Schedule 4 Mandatory Cost Formula
85
Schedule 5 Designation Notice
87
Schedule 6 Transfer Certificate
88
Schedule 7 Power of Attorney
92
Execution Pages
93

2

THIS AGREEMENT is made on  1  September 2016
BETWEEN
(1) SEA GLORIUS SHIPPING CO. and SEA GENIUS SHIPPING CO., each a corporation organised and existing under the laws of the Marshall Islands having its registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH96960, the Marshall Islands, as joint and several Borrowers ;
(2) THE BANKS AND FINANCIAL INSTITUTIONS listed in Schedule 1, as Lenders ;
(3) HSH NORDBANK AG acting through its office at Gerhart-Hauptmann-Platz 50, D-20095 Hamburg, Germany, as Agent ;
(4) HSH NORDBANK AG acting through its office is at Gerhart-Hauptmann-Platz 50, D-20095 Hamburg, Germany, as Mandated Lead Arranger ;
(5) HSH NORDBANK AG acting through its office at Gerhart-Hauptmann-Platz 50, D-20095 Hamburg, Germany, as Security Trustee ; and
(6) HSH NORDBANK AG acting through its office at Martensdamm 6, D-24103 Kiel, Germany, as Swap Bank .
BACKGROUND
(A) The Lenders have agreed to make available to the Borrowers a senior secured term loan facility in an aggregate amount up to $44,430 , 400 to be made available to the Borrowers in two Advances, each in two tranches, as follows:-
(i) Advance A for the purposes of assisting Borrower A in financing the Contract Price of Ship A; and
(ii) Advance B for the purpose of assisting Borrower B financing the Contract Price of the Ship B.
(B) The Swap Bank has agreed to enter into interest rate swap transactions with the Borrowers from time to time to hedge the Borrowers' exposure under this Agreement to interest rate fluctuations.
(C) The Lenders and the Swap Bank have agreed to share the security to be granted to the Security Trustee pursuant to this Agreement on a subordinated basis.
IT IS AGREED as follows:
1 INTERPRETATION
1.1 Definitions
Subject to Clause 1.5, in this Agreement:
"Account Pledge" means, in relation to each Earnings Account, a deed creating security in respect of that Earnings Account in the Agreed Form and, in the plural, means all of them;
"Advance" means Advance A and Advance B and, in the plural, means both of them;
" Advance A " means together Advance A, Tranche A and Advance A, Tranche B;
" Advance B " means together Advance B, Tranche A and Advance B, Tranche B;

" Advance   A, Tranche A " means that part of the Loan made or to be made available to Borrower A and not exceeding the relevant Maximum Advance Amount (or, as the context may require, the principal amount outstanding of that Advance at any relevant time);
" Advance A, Tranche B " means that part of the Loan made or to be made available to Borrower A and not exceeding the relevant Maximum Advance Amount (or, as the context may require, the principal amount outstanding of that Advance at any relevant time);
" Advance   B, Tranche A " means that part of the Loan made or to be made available to Borrower B and not exceeding the relevant Maximum Advance Amount (or, as the context may require, the principal amount outstanding of that Advance at any relevant time);
" Advance   B, Tranche B " means that part of the Loan made or to be made available to Borrower B and not exceeding the relevant Maximum Advance Amount (or, as the context may require, the principal amount outstanding of that Advance at any relevant time);
"Affected Lender" has the meaning given in Clause 5.7;
"Agency and Trust Agreement" means the agency and trust agreement dated the same date as this Agreement and made between the same parties;
"Agent" means HSH Nordbank AG, acting in such capacity through its office at Gerhart-Hauptmann-Platz 50, D-20095 Hamburg, Germany, or any successor of it appointed under clause 5 of the Agency and Trust Agreement;
"Agreed Form" means in relation to any document, that document in the form approved in writing by the Agent (acting on the instructions of all the Majority Lenders) or as otherwise approved in accordance with any other approval procedure specified in any relevant provisions of any Finance Document;
" Applicable Lender " has the meaning given in Clause 5.2;
"Applicable Margin" means, in respect of:
(A) Advance A, Tranche A and Advance B, Tranche A (i) 3.40 per cent. per annum during the period commencing on the date of this Agreement and ending on the last day of the Interest Period in which the Offering Prepayment is effected and (ii) at all times thereafter but subject always to Clause 5.17, 3.25 per cent. per annum; and
(B) in respect of Advance A, Tranche B and Advance B, Tranche B, 3.60 per cent. per annum.
" Approved Auditor " means Moore Stephens, Deloitte, EY, KPMG, PricewaterhouseCoopers or any other auditor acceptable to the Agent;
"Approved Broker" means Arrow Research, Barry Rogliano Salles, H. Clarkson & Co. Ltd., SSY Valuation Services Ltd., Maersk Brokers K/S, RS Platou Shipbrokers A/S, Fearnleys A/S or any other broker that reasonably selected by the Agent and, in the plural, means all of them;
"Approved Flag" means, in relation to a Ship, the flag of the Bahamas, the Isle of Man, the Marshall Islands or such other flag as the Agent may reasonably approve as the flag on which that Ship is or, as the case may be, shall be registered;
"Approved Flag State" means, in relation to a Ship, Bahamas, Isle of Man, Marshall Islands or any other country in which the Agent may reasonably approve that that Ship is or, as the case may be, shall be registered;
2

"Approved Manager" means, in respect of a Ship, V. Ships or Seanergy Shipmanagement as the technical manager of that Ship and Fidelity Marine or Seanergy Management as the commercial manager of that Ship, or any other company nominated by the Borrowers which the Agent may approve from time to time (such approval not to be unreasonably withheld) as the commercial and/or technical manager of that Ship and, in the plural, means both of them;
"Approved Manager's Undertaking" means, in relation to a Ship, a letter of undertaking including (inter alia) an assignment of an Approved Manager's rights, title and interests in the Insurances executed or, as the context may require, to be executed by that Approved Manager in favour of the Security Trustee in the Agreed Form agreeing certain matters in relation to that Approved Manager, serving as manager of that Ship and subordinating its rights against that Ship and the Borrower which is the owner thereof to the rights of the Creditor Parties under the Finance Documents and, in the plural, means all of them;
" Assignable Charter " means, in relation to a Ship, any time charterparty, consecutive voyage charter or contract of affreightment in respect of such Ship of a duration (or capable of exceeding a duration) of 12 months or more and any guarantee of the obligations of the charterer under such charter and any bareboat charter in respect of that Ship and any guarantee of the obligations of the charterer under such bareboat charter, entered or to be entered into by the Borrower which is the owner thereof and a charterer or, as the context may require, bareboat charter and, in the plural, means all of them;
"Availability Period" means, in respect of each Advance, the period commencing on the date of this Agreement and ending on the earlier of:
(A) 30 November 2015; and
(B) the date on which the Total Commitments are fully borrowed, cancelled or terminated;
"Balloon Instalment" has the meaning given in Clause 8.1(b)(ii);
" Basel III " means, together:
(a) the agreements on capital requirements, a leverage ratio and liquidity standards contained in "Basel III: A global regulatory framework for more resilient banks and banking systems", "Basel III: International framework for liquidity risk measurement, standards and monitoring" and "Guidance for national authorities operating the countercyclical capital buffer" published by the Basel Committee on Banking Supervision in December 2010, each as amended, supplemented or restated;
(b) the rules for global systemically important banks contained in "Global systemically important banks: assessment methodology and the additional loss absorbency requirement - Rules text" published by the Basel Committee on Banking Supervision in November 2011, as amended, supplemented or restated; and
(c) any further guidance or standards published by the Basel Committee on Banking Supervision relating to "Basel III";
"Borrower" means each of Borrower A and Borrower B and, in the plural, means both of them;
"Borrower A" means Sea Glorius Shipping Co., a corporation organised and existing under the laws of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH96960, the Marshall Islands;
3

"Borrower B" means Sea Genius Shipping Co., a corporation organised and existing under the laws of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH96960, the Marshall Islands;
"Break Costs" has the meaning given in Clause 21.2;
"Business Day" means a day (other than a Saturday or Sunday) on which banks are open for general business in London and Hamburg, and, in respect of a day on which a payment is required to be made under a Finance Document, also in New York City;
" Cancellation Notice " has the meaning given in Clause 8.7;
" Cape Elizabeth " means Cape Elizabeth Marine Inc., a corporation organised and existing under the laws of the British Virgin Islands whose registered office is at P.O. Box 3174, Road Town, Tortola, British Virgin Islands;
" Change of Control " means if any person or group of persons (other than the Permitted Holders) acting in concert gains directly or indirectly control of the Corporate Guarantor and for the purpose of this definition:
(A) " control " means:
(i) the power (whether by way of ownership of shares, proxy, contract, agency or otherwise) to:
(A) cast, or control the casting of, more than 50 per cent. of the maximum number of votes that might be cast at a general meeting of the Corporate Guarantor; or
(B) appoint or remove all, or the majority, of the directors or other equivalent officers of the Corporate Guarantor; or
(C) give directions with respect to the operating and financial policies of the Corporate Guarantor with which the directors or other equivalent officers of the Corporate Guarantor are obliged to comply; and/or (ii)the holding beneficially of more than 50 per cent. of the issued share capital of the Corporate Guarantor (excluding any part of that issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital).
(B) " acting   in   concert " means a group of persons who, pursuant to an agreement or understanding (whether formal or informal), actively co-operate, through the acquisition directly or indirectly of shares in the Corporate Guarantor by any of them, either directly or indirectly, to obtain or consolidate control of the Corporate Guarantor;
"Charterparty Assignment" means, in relation to a Ship, an assignment of the rights of the Borrower who is the owner of that Ship under any Assignable Charter relative thereto executed or, as the context may require, to be executed by that Borrower in favour of the Security Trustee in the Agreed Form and, in the plural, means all of them;
"Commitment" means, in relation to a Lender, the amount set opposite its name in Schedule 1, or, as the case may require, the amount specified in the relevant Transfer Certificate, as that amount may be reduced, cancelled or terminated in accordance with this Agreement (and " Total Commitments " means the aggregate of the Commitments of all the Lenders);
4

"Confirmation" and "Early Termination Date" , in relation to any continuing Designated Transaction, have the meanings given in the Master Agreement;
" Contract Price "   means in relation to (i) Ship A, $16,833,520 and (ii) Ship B, $27,596,880, being in each case the acquisition cost of that Ship payable pursuant to the relevant MOA;
"Contractual Currency" has the meaning given in Clause 21.6;
"Contribution" means, in relation to a Lender, the part of the Loan which is owing to that Lender;
"Corporate Guarantee" means a corporate guarantee of the obligations of the Borrowers under this Agreement, the Master Agreement and the other Finance Documents to which each of the Borrowers is a party executed or, as the context may require, to be executed by the Corporate Guarantor in the Agreed Form;
"Corporate Guarantor" means Seanergy Maritime Holdings Corp., a corporation incorporated in the Republic of the Marshall Islands, whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960;
" Cost of Funding " means, in relation to a Lender, the rate per annum determined by that Lender to be of the rate at which deposits in Dollars are offered to that Lender by leading banks in the London Interbank Market at that Lender's request at or about 11.00 a.m. (London time) on the Quotation Date for an Interest Period and for a period equal to that Interest Period and for delivery on the first Business Day of it, or, if that Lender uses other ways than through the London Interbank Market to fund deposits in Dollars, such rate as determined by Carl Kliem or any other reasonably selected broker to be the Lender's cost of funding deposits in Dollars for that Interest Period;
"Creditor Party" means the Agent, the Security Trustee, the Mandated Lead Arranger, any Lender or the Swap Bank, whether as at the date of this Agreement or at any later time and, in the plural, means all of them;
" Dammam Energy " means Dammam Energy Shipping Ltd, a corporation organised and existing under the laws of the British Virgin Islands whose registered office is at P.O. Box 3174, Road Town, Tortola, British Virgin Islands;
"Designated Transaction" means a Transaction which fulfils the following requirements:
(A) it is entered into by the Borrowers pursuant to the Master Agreement with the Swap Bank which, at the time the Transaction is entered into, is also a Lender;
(B) its purpose is the hedging of the Borrowers' exposure under this Agreement to fluctuations in LIBOR arising from the funding of the Loan (or any part thereof) for a period expiring no later than the Final Repayment Date; and
(C) it is designated by the Swap Bank, by delivery by the Swap Bank to the Borrowers and the Agent of a notice of designation in the form set out in Schedule 5, as a Designated Transaction for the purposes of the Finance Documents;
"Dollars" and "$" means the lawful currency for the time being of the United States of America;
"Drawdown Date" means, in respect of each Advance, the date requested by the Borrowers for that Advance to be borrowed, or (as the context requires) the date on which that Advance is actually borrowed;
"Drawdown Notice" means a notice in the form set out in Schedule 2 (or in any other form which the Agent approves or reasonably requires);
5

"Earnings" means, in relation to a Ship, all moneys whatsoever which are now, or later become, payable (actually or contingently) to the Borrower owning that Ship or the Security Trustee and which arise out of the use or operation of that Ship, including (but not limited to):
(A) except to the extent that they fall within paragraph (b):
(i) all freight, hire and passage moneys;
(ii) compensation payable to that Borrower or the Security Trustee in the event of requisition of the Ship owned by it for hire;
(iii) remuneration for salvage and towage services;
(iv) demurrage and detention moneys;
(v) damages for breach (or payments for variation or termination) of any charterparty or other contract for the employment of that Ship; and (vi)all moneys which are at any time payable under any Insurances in respect of loss of hire; and
(B) if and whenever that Ship is employed on terms whereby any moneys falling within paragraphs (a)(i) to (vi) are pooled or shared with any other person, that proportion of the net receipts of the relevant pooling or sharing arrangement which is attributable to that Ship;
"Earnings Account" means, in relation to a Ship, an account in the name of the Borrower owning that Ship with the Agent in Hamburg designated "Sea Glorius Shipping Co. – Earnings Account" and "Sea Genius Shipping Co." respectively or any other account (with that or another office of the Agent) which replaces this account and is designated by the Agent as the Earnings Account in respect of that Ship for the purposes of this Agreement in accordance with the Agent's instructions and, in the plural, means both of them;
"Environmental Claim" means:
(A) any claim by any governmental, judicial or regulatory authority which arises out of an Environmental Incident or an alleged Environmental Incident or which relates to any Environmental Law; or
(B) any claim by any other person which relates to an Environmental Incident or to an alleged Environmental Incident, and " claim " means a claim for damages, compensation, fines, penalties or any other payment of any kind whether or not similar to the foregoing; an order or direction to take, or not to take, certain action or to desist from or suspend certain action; and any form of enforcement or regulatory action, including the arrest or attachment of any asset;
"Environmental Incident" means, in relation to a Ship:
(A) any release of Environmentally Sensitive Material from that Ship; or
(B) any incident in which Environmentally Sensitive Material is released from a vessel other than that Ship and which involves a collision between that Ship and such other vessel or some other incident of navigation or operation, in either case, in connection with which that Ship is actually or potentially liable to be arrested, attached, detained or injuncted and/or that Ship and/or the Borrower which is the owner thereof and/or any operator or manager of that Ship is at fault or allegedly at fault or otherwise liable to any legal or administrative action; or
6

(C) any other incident in which Environmentally Sensitive Material is released otherwise than from that Ship and in connection with which that Ship is actually or potentially liable to be arrested and/or where the Borrower which is the owner thereof and/or any operator or manager of that Ship is at fault or allegedly at fault or otherwise liable to any legal or administrative action;
"Environmental Law" means any law relating to pollution or protection of the environment, to the carriage of Environmentally Sensitive Material or to actual or threatened releases of Environmentally Sensitive Material;
"Environmentally Sensitive Material" means oil, oil products and any other substance (including any chemical, gas or other hazardous or noxious substance) which is (or is capable of being or becoming) polluting, toxic or hazardous;
"Event of Default" means any of the events or circumstances described in Clause 19.1;
" Fidelity Marine " means Fidelity Marine Inc., a corporation organised and existing under the laws of the Republic of the Marshall Islands whose registered office is at the Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH96960 Marshall Islands;
" Final Repayment Date " means, in relation to each Advance, the date falling on the earlier of (a) the fifth annual anniversary of the Drawdown Date in respect of that Advance and (b) 30 June 2020;
"Finance Documents" means together:
(a) this Agreement;
(b) the Master Agreement;
(c) the Master Agreement Assignment;
(d) the Corporate Guarantee;
(e) the Shares Pledges;
(f) the Agency and Trust Agreement;
(g) the General Assignments;
(h) the Mortgages;
(i) the Account Pledges;
(j) any Charterparty Assignments;
(k) the Approved Manager's Undertakings; and
(l) any other document (whether creating a Security Interest or not) which is executed at any time by a Security Party or any other person as security for, or to establish any form of subordination or priorities arrangement in relation to, any amount payable to the Lenders under this Agreement or any of the other documents referred to in this definition and, in the singular, means any of them;
" Financial Indebtedness " means, in relation to a person (the " debtor "), any actual or contingent liability of the debtor:
(a) for principal, interest or any other sum payable in respect of any moneys borrowed or raised by the debtor;
7

(b) under any loan stock, bond, note or other security issued by the debtor;
(c) under any acceptance credit, guarantee or letter of credit facility made available to the debtor;
(d) under a financial lease, a deferred purchase consideration arrangement or any other agreement having the commercial effect of a borrowing or raising of money by the debtor (in each case, other than in respect of assets or services obtained on normal commercial terms in the ordinary course of business);
(e) under any foreign exchange transaction, any interest or currency swap, exchange or any other kind of derivative transaction entered into by the debtor or, if the agreement under which any such transaction is entered into requires netting of mutual liabilities, the liability of the debtor for the net amount; or
(f) under receivables sold or discounted (other than any receivables to the extent that they are sold on a non-recourse basis); or
(g) under a guarantee, indemnity or similar obligation entered into by the debtor in respect of a liability of another person which would fall within (a) to (e) if the references to the debtor referred to the other person;
"Financial Year" means, in relation to the Borrowers, the Corporate Guarantor and/or the Group, each period of 1 year commencing on 1 January in respect of which their individual or, as the case may be, consolidated accounts are or ought to be prepared;
" Follow-on Offering " means, notwithstanding the proceeds raised during the next marketed follow-on offering of at least $30,000,000 value of new shares that will be listed for trading on the NASDAQ Capital Market;
" GAAP " means the generally accepted accounting principles in the USA or IFRS;
"General Assignment" means, in relation to a Ship, a general assignment of (inter alia) the Earnings, the Insurances and any Requisition Compensation relative to that Ship executed or, as the context may require, to be executed by the Borrower which is the owner thereof in favour of the Security Trustee in the Agreed Form and, in the plural, means both of them;
"Group" means, together, the Borrowers, the Corporate Guarantor and its consolidated subsidiaries (direct or indirect) from time to time during the Security Period and " member of the Group " shall be construed accordingly;
"IACS" means the International Association of Classification Societies;
"IFRS" means International Financial Reporting Standards within the meaning of the IAS Regulations 1606/2002 to the extent applicable to the relevant financial statements;
"Instalment" has the meaning given in Clause 8.1;
" Insurances " means, in relation to a Ship:
(A) all policies and contracts of insurance and any reinsurance, policies or contracts, including entries of that Ship in any protection and indemnity or war risks association, effected in respect of that Ship, its Earnings or otherwise in relation to it whether before, on or after the date of this Agreement; and
(B) all rights (including, without limitation, any and all rights or claims which the Borrower owning that Ship may have under or in connection with any cut-through clause relative to any reinsurance contract relating to the aforesaid policies or contracts of insurance) and other assets relating to, or derived from, any of the
8
foregoing, including any rights to a return of a premium and any rights in respect of any claim whether or not the relevant policy, contract of insurance or entry has expired on or before the date of this Agreement;
"Interest Period" means a period determined in accordance with Clause 6;
"ISM Code" means the International Safety Management Code (including the guidelines on its implementation), adopted by the International Maritime Organisation as the same may be amended or supplemented from time to time (and the terms "safety management system", "Safety Management Certificate" and "Document of Compliance" have the same meanings as are given to them in the ISM Code);
"ISPS Code" means the International Ship and Port Facility Security Code as adopted by the International Maritime Organisation, as the same may be amended or supplemented from time to time;
"ISSC" means a valid and current International Ship Security Certificate issued under the ISPS Code;
"Lender" means, subject to Clause 26.6, a bank or financial institution listed in Schedule 1 and acting through its branch indicated in Schedule 1 (or through another branch notified to the Agent under Clause 26.15) or its transferee, successor or assign;
"LIBOR" means, for an Interest Period:
(a) the rate per annum equal to the offered quotation for deposits in Dollars for a period equal to, or as near as possible equal to, the relevant Interest Period which appears on the Screen Rate; or
(b) if no rate is quoted on the Screen Rate, the rate per annum determined by the Agent to be the arithmetic mean (rounded upwards, if necessary, to the nearest one-sixteenth of one per cent.) of the rates per annum notified to the Agent by each Reference Bank as the rate at which deposits in Dollars are offered to that Reference Bank by leading banks in the London Interbank Market at that Reference Bank's request at or about 11.00 a.m. (London time) on the Quotation Date for that Interest Period for a period equal to that Interest Period and for delivery on the first Business Day of it;
" LIBOR Correction Rate " means, at any relevant time in relation to an Applicable Lender, the amount (expressed as a rate per annum) by which that Lender's Cost of Funding exceeds LIBOR;
"Loan" means the principal amount for the time being outstanding under this Agreement;
"LSW 1189" means the London Standard Wording for marine insurances which incorporates the German direct mortgage clause;
"Major Casualty" means, in relation to a Ship, any casualty to that Ship in respect of which the claim or the aggregate of the claims against all insurers, before adjustment for any relevant franchise or deductible, exceeds $500,000 or the equivalent in any other currency;
"Majority Lenders" means:
(a) before an Advance is made, Lenders whose Commitments total 66.67 per cent. of the Total Commitments; and
(b) after an Advance is made, Lenders whose Contributions total 66.67 per cent. of the Loan;
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"Mandated Lead Arranger" means HSH Nordbank AG, acting in such capacity through its office at Gerhart-Hauptmann-Platz 50, D-20095 Hamburg, Germany, or any successor;
"Mandatory Cost" means the percentage rate per annum calculated by the Agent in accordance with Schedule 4;
"Market Value" means, in relation to each Ship, the market value thereof determined in accordance with Clause 15.3;
"Master Agreement" means the master agreement (on the 1992 or 2002 ISDA (Multicurrency-Crossborder) form) in the Agreed Form made between the Borrowers and the Swap Bank and includes all Designated Transactions from time to time entered into and Confirmations from time to time exchanged under the master agreement;
"Master Agreement Assignment" means the assignment of the Master Agreement executed or, as the context may require, to be executed by the Borrowers in favour of the Security Trustee in the Agreed Form;
" Material Adverse Change " means any event or series of events which, in the opinion of the Majority Lenders, is likely to have a Material Adverse Effect;
"Material Adverse Effect" means a material adverse effect on:
(a) the business, property, assets, liabilities, operations or condition (financial or otherwise) of a Borrower and/or the Corporate Guarantor taken as a whole;
(b) the ability of a Borrower and/or the Corporate Guarantor to (i) comply with or perform any of its obligations or (ii) discharge any of its liabilities, under any Finance Document as they fall due; or
(c) the validity, legality or enforceability of any Finance Document;
" Maximum Advance Amount " means, in respect of:
(a) Advance A, Tranche A, an amount equal to $15,000,000; and
(b) Advance A, Tranche B, an amount equal to $1,833,520; and
(c) Advance B, Tranche A, an amount equal to $27,000,000; and
(d) Advance B, Tranche B, an amount equal to $596,880;
" Maximum Loan Amount " means an amount not exceeding $44,430,400;
" MOA " means, in respect of:
(A) Ship A, the Memorandum of Agreement dated 6 August 2015 entered into between Dammam Energy as seller and Borrower A as buyer in respect of the sale and purchase of that Ship; and
(B) Ship B, the Memorandum of Agreement dated 6 August 2015 entered into between Cape Elizabeth as seller and Borrower B as buyer in respect of the sale and purchase of that Ship,
and, in the plural, means both of them;
"Mortgage" means, in relation to each Ship, the first preferred or, as the case may be, priority ship mortgage on that Ship and, if required pursuant to the laws of the applicable Approved Flag State, a deed of covenant collateral thereto executed or, as the context may
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require to be executed by the Borrower which is to be the owner thereof in favour of the Security Trustee in the Agreed Form and, in the plural, means both of them;
"Mortgaged Ship" means a Ship which is subject to a Mortgage at the relevant time and, in the plural, means all of them;
"Negotiation Period" has the meaning given in Clause 5.10;
"Notifying Lender" has the meaning given in Clause 21.2, 23.1 or Clause 24.1 as the context requires;
"Offering Prepayment" means a prepayment made in accordance with Clause 8.9 (c);
"Operating Expenses" means, the aggregate of the expenses properly incurred by the owning companies of Group vessels during any Financial Year of that owning company, in connection with the operation, employment, maintenance, repair, insurance, drydock and management fees of that vessels;
"Payment Currency" has the meaning given in Clause 21.6;
" Permitted Holders " means, together, those persons identified to the Agent as of the date of this Agreement;
" Permitted Security Interests " means:
(a) Security Interests created by the Finance Documents;
(b) liens for unpaid master's and crew's wages in accordance with usual maritime practice;
(c) liens for salvage;
(d) liens arising by operation of law for not more than 2 months' prepaid hire under any charter in relation to a Ship not prohibited by this Agreement;
(e) liens for master's disbursements incurred in the ordinary course of trading and any other lien arising by operation of law or otherwise in the ordinary course of the operation, repair or maintenance of a Ship, provided such liens do not secure amounts more than 30 days overdue (unless the overdue amount is being contested by the relevant Borrower in good faith by appropriate steps) and subject, in the case of liens for repair or maintenance, to Clause 14.13(e);
(f) any Security Interest created in favour of a plaintiff or defendant in any proceedings or arbitration as security for costs and expenses while a Borrower is actively prosecuting or defending such proceedings or arbitration in good faith; and
(g) Security Interests arising by operation of law in respect of taxes which are not overdue for payment or in respect of taxes being contested in good faith by appropriate steps and in respect of which appropriate reserves have been made;
"Pertinent Document" means:
(a) any Finance Document;
(b) any policy or contract of insurance contemplated by or referred to in Clause 13 or any other provision of this Agreement or another Finance Document;
(c) any other document contemplated by or referred to in any Finance Document; and
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(d) any document which has been or is at any time sent by or to a Servicing Bank in contemplation of or in connection with any Finance Document or any policy, contract or document falling within paragraphs (b) or (c);
"Pertinent Jurisdiction" , in relation to a company, means:
(a) England and Wales;
(i) the country under the laws of which the company is incorporated or formed;
(ii) a country in which the company has the centre of its main interests or which the company's central management and control is or has recently been exercised;
(iii) a country in which the overall net income of the company is subject to corporation tax, income tax or any similar tax;
(iv) a country in which assets of the company (other than securities issued by, or loans to, related companies) having a substantial value are situated, in which the company maintains a branch or permanent place of business, or in which a Security Interest created by the company must or should be registered in order to ensure its validity or priority; and
(v) a country the courts of which have jurisdiction to make a winding up, administration or similar order in relation to the company, whether as a main or territorial or ancillary proceedings, or which would have such jurisdiction if their assistance were requested by the courts of a country referred to in paragraphs (b) or (c);
"Pertinent Matter" means:
(i) any transaction or matter contemplated by, arising out of, or in connection with a Pertinent Document; or
(ii) any statement relating to a Pertinent Document or to a transaction or matter falling within paragraph (a), and covers any such transaction, matter or statement, whether entered into, arising or made at any time before the signing of this Agreement or on or at any time after that signing;
"Prepayment Date" has the meaning given in Clause 15.2;
"Prepayment Notice " has the meaning given in Clause 8.5(b);
"Quotation Date" means, in relation to any Interest Period (or any other period for which an interest rate is to be determined under any provision of a Finance Document), the day on which quotations would ordinarily be given by leading banks in the London Interbank Market for deposits in the currency in relation to which such rate is to be determined for delivery on the first day of that Interest Period or other period;
"Reference Banks " means, subject to Clause 26.18, together, the Hamburg branch of HSH Nordbank AG and any other bank acceptable to, and designated as such by, the Agent (acting on the instructions of the Majority Lenders) and any of their respective successors;
"Relevant Person" has the meaning given in Clause 19.9;
"Repayment Date" means a date on which a repayment is required to be made under Clause 8;
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"Requisition Compensation" includes all compensation or other moneys payable by reason of any act or event such as is referred to in paragraph (b) of the definition of " Total Loss ";
" Screen   Rate " means the London interbank offered rate administered by the ICE Benchmark Administration Limited (or any other person which takes over the administration of that rate) for Dollars for the relevant period displayed on pages LIBOR01 or LIBOR02 of the Reuters screen (or any replacement Reuters page which displays that rate) or on the appropriate page of such other information service which publishes that rate from time to time in place of Reuters. If such page or service ceases to be available, the Agent may specify another page or service displaying the relevant rate after consultation with the Borrowers;
" Seanergy Management " means Seanergy Management Corp., a company incorporated in the Republic of the Marshall Islands having its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH96960, the Marshall Islands;
" Seanergy Shipmanagement " means Seanergy Shipmanagement Corp., a company incorporated in the Republic of the Marshall Islands having its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH96960, the Marshall Islands;
"Secured Liabilities" means all liabilities which the Borrowers, the Corporate Guarantor, the other Security Parties or any of them have, at the date of this Agreement or at any later time or times, under or in connection with any Finance Document or any judgment relating to any Finance Document; and for this purpose, there shall be disregarded any total or partial discharge of these liabilities, or variation of their terms, which is effected by, or in connection with, any bankruptcy, liquidation, arrangement or other procedure under the insolvency laws of any country;
"Security Cover Ratio" means, at any relevant time, the aggregate of (i) the aggregate of the Market Value of the Mortgaged Ships and (ii) the net realisable value of any additional security provided at that time under Clause 15 at that time expressed as a percentage of the Loan;
"Security Interest" means:
(a) a mortgage, charge (whether fixed or floating) or pledge, any maritime or other lien or any other security interest of any kind;
(b) the rights of a plaintiff under an action in rem in which the vessel concerned has been arrested or a writ has been issued or similar step taken; and
(c) any arrangement entered into by a person (A) the effect of which is to place another person (B) in a position which is similar, in economic terms, to the position in which B would have been had he held a security interest over an asset of A; but paragraph (c) does not apply to a right of set off or combination of accounts conferred by the standard terms of business of a bank or financial institution;
"Security Party" means the Borrowers, the Corporate Guarantor and any Approved Managers (being members of the Group) and any other person (except a Creditor Party) who, as a surety or mortgagor, as a party to any subordination or priorities arrangement (but excluding any Approved Managers which are not members of the Group), or in any similar capacity, executes a document falling within the final paragraph of the definition of "Finance Documents" and, in the plural, means all of them;
"Security Period" means the period commencing on the date of this Agreement and ending on the date on which the Agent notifies the Borrowers, the Security Parties and the other Creditor Parties that:
(A) all amounts which have become due for payment by a Borrower or any Security Party under the Finance Documents have been paid;
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(B) no amount is owing or has accrued (without yet having become due for payment) under any Finance Document;
(C) no Borrower nor any Security Party has any future or contingent liability under Clauses 20, 21 or 22 or any other provision of this Agreement or another Finance Document; and
(D) the Agent, the Mandated Lead Arranger, the Security Trustee and the Majority Lenders do not reasonably consider that there is a significant risk that any payment or transaction under a Finance Document would be set aside, or would have to be reversed or adjusted, in any present or possible future bankruptcy of a Borrower or a Security Party or in any present or possible future proceeding relating to a Finance Document or any asset covered (or previously covered) by a Security Interest created by a Finance Document;
"Security Trustee" means HSH Nordbank AG, acting in such capacity through its office at Gerhart-Hauptmann-Platz 50, D-20095 Hamburg, Germany, or any successor of it appointed under clause 5 of the Agency and Trust Agreement;
" Seller " means:
(a) in respect of Ship A, Dammam Energy; and
(b) in respect of Ship B, Cape Elizabeth,
and, in the plural, means both of them;
"Servicing Bank" means the Agent or the Security Trustee;
" Shares Pledge " means, in relation to a Borrower, a deed creating security over the share capital of that Borrower in the Agreed Form and, in the plural, means both of them;
"Ship" means each of Ship A and Ship B and, in the plural, means both of them;
" Ship A " means the Capesize Bulk carrier vessel "GLORIUS" of approximately 87,720 metric tons deadweight, built at Hyundai Samho Heavy Industries Co., Ltd. of South Korea and delivered in 2004, with IMO Number 9266944, registered in the name of Dammam Energy under the Isle of Man flag which is to be purchased by Borrower A and registered under its name under an Approved Flag in accordance with the laws of the relevant Approved Flag State with the name "GLORIUSHIP";
" Ship B " means the Capesize bulk carrier vessel "GENIUS" of approximately 88,479 metric tons deadweight, built at Sungdong Shipbuilding and Marine Engineering Co., Ltd. of South Korea and delivered in 2010, with IMO Number 9398759, registered in the name of Cape Elizabeth under the Isle of Man flag which is to be purchase by Borrower B and registered under an Approved Flag in accordance with the laws of the Approved Flag State with the name "GENIUSHIP";
"Swap Bank" means HSH Nordbank AG, acting in such capacity through its office at Martensdamm 6, D-24103 Kiel, Germany;
"Swap Exposure" means, as at any relevant date, the amount certified by the Swap Bank to the Agent to be the aggregate net amount in Dollars which would be payable by the Borrowers to the Swap Bank under (and calculated in accordance with) section 6(e) (Payments on Early Termination) of the Master Agreement if an Early Termination Date had occurred on the relevant date in relation to all continuing Designated Transactions;
"Total Loss" means, in relation to a Ship:
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(a) actual, constructive, compromised, agreed or arranged total loss of that Ship;
(b) any expropriation, confiscation, requisition (excluding requisition for use or hire not including requisition of title) or acquisition of that Ship, whether for full or part consideration, a consideration less than its proper value, a nominal consideration or without any consideration, which is effected by any government or official authority or by any person or persons claiming to be or to represent a government or official authority unless it is within 45 Business Days from the date of such occurrence redelivered to the full control of the Borrower owning that Ship;
(c) any condemnation of that Ship by any tribunal or by any person or person claiming to be a tribunal; and
(d) any arrest, capture, seizure, confiscation or detention of that Ship (including any hijacking or theft) unless it is within 45 Business Days redelivered to the full control of the Borrower owning that Ship;
"Total Loss Date" means, in relation to a Ship:
(a) in the case of an actual loss of that Ship, the date on which it occurred or, if that is unknown, the date when that Ship was last heard of;
(b) in the case of a constructive, compromised, agreed or arranged total loss of that Ship, the earliest of:
(i) the date on which a notice of abandonment is given to the insurers; and (ii)the date of any compromise, arrangement or agreement made by or on behalf of the Borrower owning that Ship with that Ship's insurers in which the insurers agree to treat that Ship as a total loss; and
(c) in the case of any other type of total loss, on the date (or the most likely date) on which it reasonably appears to the Agent that the event constituting the total loss occurred;
"Transaction" has the meaning given in the Master Agreement;
"Transfer Certificate" has the meaning given in Clause 26.2;
"Trust Property" has the meaning given in clause 3.1 of the Agency and Trust Agreement; and
"Underlying Document" means, any Assignable Charter and any MOA   and, in the plural, means all of them.
" V. Ships " means V. Ships Limited, a corporation organised and existing under the laws of Cyprus whose registered office is at Zenas Gunther, 16-18, Agia Triada, 3035 Limassol, Cyprus;
1.2 Construction of certain terms
In this Agreement:
" administration notice "means a notice appointing an administrator, a notice of intended appointment and any other notice which is required by law (generally or in the case concerned) to be filed with the court or given to a person prior to, or in connection with, the appointment of an administrator;
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" approved " means, for the purposes of Clause 13, approved in writing by the Agent at its discretion;
" asset " includes every kind of property, asset, interest or right, including any present, future or contingent right to any revenues or other payment;
" continuing Event of Default " means an Event of Default which has not been remedied or waived;
" company " includes any partnership, joint venture and unincorporated association;
" consent " includes an authorisation, consent, approval, resolution, licence, exemption, filing, registration, notarisation and legalisation;
" contingent liability " means a liability which is not certain to arise and/or the amount of which remains unascertained;
" document " includes a deed; also a letter or fax;
" excess risks " means, in relation to a Ship, the proportion of claims for general average, salvage and salvage charges not recoverable under the hull and machinery policies in respect of that Ship in consequence of its insured value being less than the value at which that Ship is assessed for the purpose of such claims;
" expense " means any kind of cost, charge or expense (including all legal costs, charges and expenses) and any applicable value added or other tax;
" gross negligence " means a form of negligence which is distinct from ordinary negligence, in which the due diligence and care which are generally to be exercised have been disregarded to a particularly high degree, in which the plainest deliberations have not been made and that which should be most obvious to everybody has not been followed;
" law " includes any order or decree, any form of delegated legislation, any treaty or international convention and any regulation or resolution of the Council of the European Union, the European Commission, the United Nations or its Security Council;
" legal or administrative action " means any legal proceeding or arbitration and any administrative or regulatory action or investigation;
" liability " includes every kind of debt or liability (present or future, certain or contingent), whether incurred as principal or surety or otherwise;
" months " shall be construed in accordance with Clause 1.3;
" obligatory insurances " means, in relation to a Ship, all insurances effected, or which the Borrower owning that Ship is obliged to effect, under Clause 13 or any other provision of this Agreement or another Finance Document;
" parent   company " has the meaning given in Clause 1.4;
" person " includes any individual, any partnership, any company; any state, political sub-division of a state and local or municipal authority; and any international organisation;
" policy " in relation to any insurance, includes a slip, cover note, certificate of entry or other document evidencing the contract of insurance or its terms;
"protection and indemnity risks" means the usual risks covered by a protection and indemnity association, including pollution risks and the proportion (if any) of any sums
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payable to any other person or persons in case of collision which are not recoverable under the hull and machinery policies.
"regulation" includes any regulation, rule, official directive, request or guideline (either having the force of law or compliance with which is customary in the ordinary course of business of the party concerned) of any governmental body, intergovernmental or supranational body, agency (monetary or otherwise), department, central bank, regulatory, self-regulatory or other authority or organisation;
" subsidiary " has the meaning given in Clause 1.4;
" successor " includes any person who is entitled (by assignment, novation, merger or otherwise) to any person's rights under this Agreement or any other Finance Document (or any interest in those rights) or who, as administrator, liquidator or otherwise, is entitled to exercise those rights; and in particular references to a successor include a person to whom those rights (or any interest in those rights) are transferred or pass as a result of a merger, division, reconstruction or other reorganisation of it or any other person;
" tax " includes any present or future tax, duty, impost, levy or charge of any kind which is imposed by any state, any political sub-division of a state or any local or municipal authority (including any such imposed in connection with exchange controls), and any connected penalty, interest or fine; and " war risks " includes the risk of mines and all risks excluded by clause 29 of the International Hull Clauses (1/11/02 or 1/11/03), clause 24 of the Institute Time Clauses (Hulls)(1/11/95) or clause 23 of the Institute Time Clauses (Hulls) (1/10/83).
1.3 Meaning of "month"
A period of one or more " months " ends on the day in the relevant calendar month numerically corresponding to the day of the calendar month on which the period started (" the numerically corresponding day "), but:
(a) on the Business Day following the numerically corresponding day if the numerically corresponding day is not a Business Day or, if there is no later Business Day in the same calendar month, on the Business Day preceding the numerically corresponding day; or
(b) on the last Business Day in the relevant calendar month, if the period started on the last Business Day in a calendar month or if the last calendar month of the period has no numerically corresponding day, and " month " and " monthly " shall be construed accordingly.
1.4 Meaning of "subsidiary"
A company (S) is a subsidiary of another company (P) if:
(a) a majority of the issued shares in S (or a majority of the issued shares in S which carry unlimited rights to capital and income distributions) are directly owned by P or are indirectly attributable to P; or
(b) P has direct or indirect control over a majority of the voting rights attaching to the issued shares of S; or
(c) P has the direct or indirect power to appoint or remove a majority of the directors of S; or
(d) P otherwise has the direct or indirect power to ensure that the affairs of S are conducted in accordance with the wishes of P,
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and any company of which S is a subsidiary is a parent company of S.
1.5 General Interpretation
In this Agreement:
(d) references to, or to a provision of, a Finance Document or any other document are references to it as amended or supplemented, whether before the date of this Agreement or otherwise;
(e) references to, or to a provision of, any law include any amendment, extension, re-enactment or replacement, whether made before the date of this Agreement or otherwise;
(f) words denoting the singular number shall include the plural and vice versa; and
(g) Clauses 1.1 to 1.5 apply unless the contrary intention appears.
1.6 Headings
In interpreting a Finance Document or any provision of a Finance Document, all clause, sub-clause and other headings in that and any other Finance Document shall be entirely disregarded.
2 Facility
2.1 Amount of facility
Subject to the other provisions of this Agreement, the Lenders shall make available to the Borrowers a senior secured term loan facility of up to $44 , 430 , 400 in two Advances, each to be made available in two tranches.
2.2 Lenders' participations in Advances
Subject to the other provisions of this Agreement, each Lender shall participate in each Advance in the proportion which, as at the relevant Drawdown Date, its Commitment bears to the Total Commitments.
2.3 Purpose of Advance
The Borrowers undertake with each Creditor Party to use each Advance only for the purpose stated in the preamble to this Agreement.
3 POSITION OF THE LENDERS AND SWAP BANK
3.1 Interests several
The rights of the Lenders and of the Swap Bank under this Agreement and under the Master Agreement are several.
3.2 Individual right of action
Each Lender and the Swap Bank shall be entitled to sue for any amount which has become due and payable by the Borrowers to it under this Agreement or under the Master Agreement without joining the Agent, the Security Trustee, any other Lender or the Swap Bank as additional parties in the proceedings.
3.3 Proceedings requiring Majority Lender consent
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Except as provided in Clause 3.2, neither Lender nor the Swap Bank may commence proceedings against the Borrowers or any Security Party in connection with a Finance Document or the Master Agreement without the prior consent of the Majority Lenders.
3.4 Obligations several
The obligations of the Lenders under this Agreement and of the Swap Bank under the Master Agreement are several; and a failure of a Lender to perform its obligations under this Agreement or a failure of the Swap Bank to perform its obligations under the Master Agreement shall not result in:
(a) the obligations of the other Lenders or the Swap Bank being increased; nor
(b) a Borrower, any Security Party, any other Lender or the Swap Bank being discharged (in whole or in part) from its obligations under any Finance Document or under the Master Agreement, and in no circumstances shall a Lender or the Swap Bank have any responsibility for a failure of another Lender or the Swap Bank to perform its obligations under this Agreement or the Master Agreement.
4 DRAWDOWN
4.1 Request for an Advance
Subject to the following conditions, the Borrowers may request an Advance to be borrowed by ensuring that the Agent receives a completed Drawdown Notice not later than 11.00 a.m. (Hamburg time) 2 Business Days prior to the relevant Drawdown Date.
4.2 Availability
The conditions referred to in Clause 4.1 are that:
(a) a Drawdown Date has to be a Business Day during the Availability Period in respect of the Advance to which that Drawdown Date relates;
(b) the amount of each Advance shall not exceed the Maximum Available Amount for that Advance and shall be used to finance the Contract Price of the Ship to which that Advance relates;
(c) any undrawn portion of the Total Commitments in respect of an Advance to occur, shall be automatically cancelled on the earlier of (i) the Drawdown Date of that Advance and (ii) 30 November 2015; and
(d) the aggregate amount of the Advances shall not exceed the Maximum Loan Amount and the Total Commitments.
4.3 Notification to Lenders of receipt of a Drawdown Notice
The Agent shall promptly notify the Lenders that it has received a Drawdown Notice and shall inform each Lender of:
(a) the amount of the Advance to which that Drawdown Notice relates and the relevant Drawdown Date;
(b) the amount of that Lender's participation in that Advance; and
(c) the duration of the first Interest Period in respect of that Advance.
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4.4 Drawdown Notice irrevocable
Each Drawdown Notice must be duly signed by a director or officer or authorised signatory of each Borrower; and once served, it cannot be revoked without the prior consent of the Agent, acting on the authority of the Majority Lenders.
4.5 Lenders to make available Contributions
Subject to the provisions of this Agreement, each Lender shall, on and with value on each Drawdown Date, make available to the Agent for the account of the Borrowers the amount due from that Lender on that Drawdown Date under Clause 2.2.
4.6 Disbursement of Advance
Subject to the provisions of this Agreement, the Agent shall on each Drawdown Date pay to the Borrowers the amounts which the Agent receives from the Lenders under Clause 4.5; and that payment to the Borrowers shall be made:
(a) to the account which the Borrowers specify in the relevant Drawdown Notice; and
(b) in the like funds as the Agent received the payments from the Lenders.
4.7 Disbursement of Advance to third party
The payment by the Agent under Clause 4.6 shall constitute the making of the Advance and the Borrowers shall at that time become indebted, as principal and direct obligors, to each Lender in an amount equal to that Lender's Contribution.
5 INTEREST
5.1 Payment of normal interest
Subject to the provisions of this Agreement, interest on each Advance in respect of each Interest Period relative to that Advance, shall be paid by the Borrowers on the last day of that Interest Period.
5.2 Normal rate of interest
Subject to the provisions of this Agreement, the rate of interest on each Advance in respect of an Interest Period relative to that Advance shall be the aggregate of (i) the Applicable Margin, (ii) the Mandatory Cost (if any), (iii) LIBOR for that Interest Period and (iv) if a Lender (the " Applicable Lender ") notifies the Agent at least 3 Business Day before the start of that Interest Period that its Cost of Funding exceeds LIBOR on the Quotation Date for that Interest Period, additionally in respect of that Applicable Lender's Contribution, the LIBOR Correction Rate applicable to that Applicable Lender for that Interest Period.
5.3 Payment of accrued interest
Accrued interest shall be paid on the last day of that Interest Period.
5.4 Notification of Interest Periods and rates of normal interest
The Agent shall notify the Borrowers and each Lender of:
(a) each rate of interest; and
(b) the duration of each Interest Period,
as soon as reasonably practicable after each is determined.
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5.5 Obligation of Reference Banks to quote
A Reference Bank which is a Lender shall use all reasonable efforts to supply the quotation required of it (accompanied by evidence supporting such quotation) for the purposes of fixing a rate of interest under this Agreement unless that Reference Bank ceases to be a Lender pursuant to Clause 26.18.
5.6 Absence of quotations by Reference Banks
If any Reference Bank fails to supply a quotation, the Agent shall determine the relevant LIBOR on the basis of the quotations supplied by any other Reference Bank or Banks; but if no Reference Bank provides a quotation, the relevant rate of interest shall be set in accordance with the following provisions of this Clause 5.
5.7 Market disruption
The following provisions of this Clause 5 apply if:
(a) no rate is quoted on the Screen Rate and no Reference Bank, before 1.00 p.m. (London time) on the Quotation Date for an Interest Period, provides quotations to the Agent in order to fix LIBOR; or
(b) at least 2 Business Days before the start of an Interest Period, the Agent is notified by a Lender (the " Affected Lender ") that for any reason it is unable to obtain Dollars in the London Interbank Market or otherwise in order to fund its Contribution (or any part of it) during the Interest Period.
5.8 Notification of market disruption
The Agent shall promptly notify the Borrowers and each of the Lenders and the Swap Bank stating the circumstances falling within Clause 5.7 which have caused its notice to be given.
5.9 Suspension of drawdown
If the Agent's notice under Clause 5.8 is served before an Advance is borrowed:
(a) in the case falling within Clauses 5.7(a), the Lenders' obligations to make available that Advance; and
(b) in the case falling within Clauses 5.7(b), the Affected Lender's obligation to participate in that Advance, shall be suspended while the circumstances referred to in the Agent's notice continue.
5.10 Negotiation of alternative rate of interest
If the Agent's notice under Clause 5.8 is served after an Advance is borrowed, the Borrowers, the Agent, the Lenders or (as the case may be) the Affected Lender and the Swap Bank shall use reasonable endeavours to agree, within 30 days after the date on which the Agent serves its notice under Clause 5.8 (the " Negotiation Period "), an alternative interest rate or (as the case may be) an alternative basis for the Lenders or (as the case may be) the Affected Lender to fund or continue to fund their or its Contribution during the Interest Period concerned.
5.11 Application of agreed alternative rate of interest
Any alternative interest rate or an alternative basis which is agreed during the Negotiation Period shall take effect in accordance with the terms agreed.
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5.12 Alternative rate of interest in absence of agreement
If an alternative interest rate or alternative basis is not agreed within the Negotiation Period, and the relevant circumstances are continuing at the end of the Negotiation Period, then the Agent shall, with the agreement of each Lender or (as the case may be) the Affected Lender, set an interest period and interest rate representing the Cost of Funding of the Lenders or (as the case may be) the Affected Lender in Dollars or in any available currency of their or its Contribution plus the Margin and the Mandatory Cost (if any); and the procedure provided for by this Clause 5.12 shall be repeated if the relevant circumstances are continuing at the end of the interest period so set by the Agent.
5.13 Notice of prepayment
If the Borrowers do not agree with an interest rate set by the Agent under Clause 5.12, the Borrowers may give the Agent not less than 15 Business Days' notice of their intention to prepay the Loan at the end of the interest period set by the Agent.
5.14 Prepayment; termination of Commitments
A notice under Clause 5.13 shall be irrevocable; the Agent shall promptly notify the Lenders or (as the case may require) the Affected Lender of the Borrowers' notice of intended prepayment; and:
(a) on the date on which the Agent serves that notice, the Total Commitments or (as the case may require) the Commitment of the Affected Lender shall be cancelled; and
(b) on the last Business Day of the interest period set by the Agent, the Borrowers shall prepay (without premium or penalty) the Loan or, as the case may be, the Affected Lender's Contribution, together with accrued interest thereon at the applicable rate plus the Margin and the Mandatory Cost (if any).
5.15 Application of prepayment
The provisions of Clause 8 shall apply in relation to the prepayment.
5.16 Interest Rate hedging
Signature of the Master Agreement does not commit the Swap Bank to conclude transactions, or even to offer terms for doing so, but does provide a contractual framework within which Designated Transactions may be concluded and secured, assuming that the Swap Bank is willing to conclude any Designated Transaction at the relevant time and that, if that is the case, mutually acceptable terms can then be agreed at the relevant time.
5.17 Margin decrease
The Applicable Margin in respect of each of Advance A, Tranche A and Advance B, Tranche A shall decrease from 3.40 per cent. to 3.25 per cent. per annum on the last date of the Interest Period in which the prepayment referred to in Clause 8.9(c) will take place provided that no Event of Default which is continuing being in existence on that date.
6 INTEREST PERIODS
6.1 Commencement of Interest Periods
The first Interest Period applicable to an Advance shall commence on the Drawdown Date in respect of that Advance and each subsequent Interest Period shall commence on the expiry of the preceding Interest Period.
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6.2 Duration of normal Interest Periods
Subject to Clauses 6.3 and 6.4, each Interest Period in respect of each Advance shall be:
(a) 3 months; or
(b) such other period (as notified by the Borrowers to the Agent not later than 11:00 a.m. (Hamburg time) 2 Business Days before the commencement of the Interest Period in respect of that Advance) as the Agent may, with the authorisation of the Majority Lenders, agree with the Borrowers subject to availability of LIBOR.
6.3 Duration of Interest Periods for Instalments
In respect of an amount due to be repaid under Clause 8 on a particular Repayment Date, an Interest Period in respect of the Advance to which that Repayment Date relates shall end on that Repayment Date.
6.4 Non-availability of matching deposits for Interest Period selected
If, after the Borrowers have selected and the Lenders have agreed an Interest Period other than 3 months, any Lender notifies the Agent by 11.00 a.m. (Hamburg time) on the second Business Day before the commencement of the Interest Period that it is not satisfied that deposits in Dollars for a period equal to the Interest Period will be available to it in the London Interbank Market when the Interest Period commences, the Interest Period shall be of 3 months.
7 DEFAULT INTEREST
7.1 Payment of default interest on overdue amounts
The Borrowers shall pay interest in accordance with the following provisions of this Clause 7 on any amount payable by the Borrowers under any Finance Document which the Agent, the Security Trustee or the other designated payee does not receive on or before the relevant date, that is:
(a) the date on which the Finance Documents provide that such amount is due for payment; or
(b) if a Finance Document provides that such amount is payable on demand, the date on which the demand is served; or
(c) if such amount has become immediately due and payable under Clause 19.4, the date on which it became immediately due and payable.
7.2 Default rate of interest
Interest shall accrue on an overdue amount from (and including) the relevant date until the date of actual payment (as well after as before judgment) at the rate per annum determined by the Agent to be 2.50 per cent. above:
(a) in the case of an overdue amount of principal, the higher of the rates set out at Clauses 7.3(a) and 7.3(b); or
(b) in the case of any other overdue amount, the rate set out at Clause 7.3(b).
7.3 Calculation of default rate of interest
The rates referred to in Clause 7.2 are:
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(a) the rate applicable to the overdue principal amount immediately prior to the relevant date (but only for any unexpired part of any then current Interest Period applicable to it);
(b) the aggregate of the Margin, any LIBOR Correction Rate and the Mandatory Cost (if any) plus, in respect of successive periods of any duration (including at call) up to 3 months which the Agent may select from time to time:
(i) LIBOR; or
(ii) if the Agent determines (after consultations with the Reference Banks) that Dollar deposits for any such period are not being made available to any Reference Bank or (as the case may be) Lenders by leading banks in the London Interbank Market in the ordinary course of business, a rate from time to time determined by the Agent by reference to the cost of funds to the Reference Banks from such other sources as the Agent (after consultation with the Reference Banks) may from time to time determine.
7.4 Notification of interest periods and default rates
The Agent shall promptly notify the Lenders and the Borrowers of each interest rate determined by the Agent under Clause 7.3 and of each period selected by the Agent for the purposes of paragraph 7.3(b) of that Clause; but this shall not be taken to imply that the Borrowers are liable to pay such interest only with effect from the date of the Agent's notification.
7.5 Payment of accrued default interest
Subject to the other provisions of this Agreement, any interest due under this Clause shall be paid on the last day of the period by reference to which it was determined; and the payment shall be made to the Agent for the account of the Creditor Party to which the overdue amount is due.
7.6 Compounding of default interest
Any such interest which is not paid at the end of the period by reference to which it was determined shall thereupon be compounded.
7.7 Application to Master Agreement
For the avoidance of doubt, this Clause 7 does not apply to any amount payable under the Master Agreement in respect of any continuing Transaction as to which section 9(h) (Interest and Compensation) of the Master Agreement shall apply.
8 REPAYMENT AND PREPAYMENT
8.1 Amount of Instalments
The Borrowers shall repay:
(a) Advance A, Tranche A, by 12 consecutive quarterly instalments, the first 11 instalments each in the amount of $449,453 (each an " Advance A, Tranche A Instalment " and, together, the "Advance A, Tranche A   Instalments ") and the 12 th and final instalment in the sum of $10,056,017 (comprising an instalment of $449,453 and a balloon instalment of $9,606,564, the " Advance A, Tranche A Balloon Instalment ")); and
(b) Advance A, Tranche B, in full by one instalment (the " Bullet Instalment A "); and
(c) Advance B, Tranche A, by 12 consecutive quarterly instalments, the first 11 instalments each in the amount of $600,000 (each an " Advance B, Tranche A Instalment " and, together, the
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"Advance B, Tranche A   Instalments ") and the 12 th and final instalment in the sum of $20,400,000 (comprising an instalment of $600,000 and a balloon instalment of $19,800,000, the " Advance B, Tranche A Balloon Instalment" and, together with the Advance A, Tranche A Balloon Instalment, the " Balloon Instalments " and each a " Balloon Instalment "));
(d) Advance B, Tranche B, in full by one instalment (the " Bullet Instalment B " and together with the Bullet Instalment A, the " Bullet Instalments " and each a " Bullet Instalment ").
Provided that if the amount drawn down in respect of an Advance is less than the relevant Maximum Advance Amount (a) the aggregate amount of the Instalments and the relevant Balloon Instalment shall be reduced pro rata by an amount equal to the undrawn amount and (b) the relevant Bullet Instalment shall be reduced by an amount equal to the undrawn amount.
8.2 Repayment Dates
(a) The first instalment in respect of each of Advance A, Tranche A and Advance B, Tranche A shall be repaid on the earlier of (i) the date falling 27 months after the Drawdown Date of the first Advance to be made available and (ii) 30 September 2017, each subsequent Instalment shall be repaid at three-monthly intervals thereafter and the last Instalment in respect of that Advance, shall be repaid together with the Balloon Instalment in respect of that Advance, on the relevant Final Repayment Date; and
(b) each Bullet Instalment shall be repaid on 30 June 2020.
8.3 Final Repayment Date
On the Final Repayment Date in respect of the last Advance to be drawn down pursuant to this Agreement, the Borrowers shall additionally pay to the Agent for the account of the Creditor Parties all other sums then accrued or owing under any Finance Document.
8.4 Voluntary prepayment
Subject to the following conditions, the Borrowers may prepay the whole or any part of the Loan on the last day of an Interest Period.
8.5 Conditions for voluntary prepayment
The conditions referred to in Clause 8.4 are that:
(a) a partial prepayment in respect of the Loan shall be in an amount equal to $250,000 or higher multiples thereof (of such other amount acceptable to the Agent in its discretion);
(b) the Agent has received from the Borrowers at least 10 Business Days' prior written notice (the " Prepayment Notice ") specifying the amount to be prepaid and the date on which the prepayment is to be made; and
(c) the Borrowers are in compliance with Clause 8.10, 8.13 and 8.14 on or prior to the date of prepayment.
8.6 Effect of notice of prepayment
A Prepayment Notice may not be withdrawn or amended without the consent of the Agent, given with the authorisation of the Majority Lenders, and the amount specified in the Prepayment Notice shall become due and payable by the Borrowers on the date for prepayment specified in the prepayment notice.
8.7 Optional facility cancellation
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The Borrowers shall be entitled, upon giving to the Agent not less than 5 Business Days prior written notice (the " Cancellation Notice ") (which notice shall be irrevocable and shall, at the option of the Borrowers, specify whether such cancellation will be applied against a specific Advance, in which case the Borrowers will specify the Advance against which that cancellation should be applied). A failure by the Borrowers to make such a designation shall result in the cancellation being applied against the Loan in accordance with Clause 8.11(a)), to cancel, in whole or in part, and, if in part, by an amount not less than $5 ,0 00,000 and, if such part exceeds $5,000,000 the excess amount shall be in the amount of $1,000,000 or higher multiple thereof (or such other amount acceptable to the Agent in its sole discretion), the undrawn balance of the Total Commitments. Upon such cancellation taking effect on expiry of a Cancellation Notice the several obligations of the Lenders to make their respective Commitments available in relation to the portion of the Total Commitments to which such Cancellation Notice relates shall terminate.
8.8 Cancellation Notice or Prepayment Notice
The Agent shall notify the Lenders promptly upon receiving a Cancellation Notice or Prepayment Notice, and shall provide, in the case of a Prepayment Notice, any Lender which so requests with a copy of any document delivered by the Borrowers under Clause 8.5(c).
8.9 Mandatory prepayment
The Borrowers shall be obliged to prepay the Relevant Amount:
(a) if a Ship is sold on or before the date on which the sale is completed by delivery of the Ship to the buyer;
(b) if a Ship becomes a Total Loss, on the earlier of the date falling 90 days after the Total Loss Date and the date of receipt by the Security Trustee of the proceeds of insurance relating to such Total Loss; and
(c) (i) if the Follow-On Offering is completed on or prior to 31 December 2016, on the date on which the Follow-On Offering is completed or (ii) if the Follow-On Offering is not completed by 31 December 2016, on 31 December 2016.
In this Clause 8.9:
" Relevant Amount " means:
(A) in the case of a prepayment to be made in accordance with Clauses 8.9 (a) or 8.9 (b) an amount equal to the greater of:
(1) the Advance to which the Ship being sold or which has become a Total Loss relates; and
(2) an amount which after the application of the prepayment to be made pursuant to Clause 8.11(b) results in the Security Cover Ratio being the greater of (A) 120 per cent. and (B) the percentage which applied immediately prior to the applicable event described in paragraph (a) or (b) of this Clause 8.9. and
(B) in the case of a prepayment to be made in accordance with Clause 8.9(c),   (" Offering Prepayment" ) (A) in the event that the Follow-on Offering is completed on or prior to 31 December 2016, an amount equal to the higher of (a) $3,000,000 and (b) (i) the lesser of 20 per cent. of the net proceeds realised from the Follow-On Offering and (ii) $8,000,000 and (B) in the event that the Follow-on Offering is not completed by latest 31 December 2016, an amount equal to $3,000,000, provided that the aggregate amount of all voluntary prepayments made pursuant to Clause 8.4 on or before the date
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of completion of the Follow-on Offering and 31 December 2016, shall reduce the Relevant Amount pursuant to this Clause 8.9 (B) by an amount equal to the aggregate amount actually prepaid under Clause 8.4.
For the avoidance of doubt, the Security Interests in respect of the Ship being sold or which became a Total Loss, shall be fully released and discharged on the date of prepayment subject to the Agent being satisfied that the Borrowers are in compliance with the terms of this Clause 8.9 on that date.
8.10 Amounts payable on prepayment
A prepayment shall be made together with accrued interest (and any other amount payable under Clause 21 or otherwise) in respect of the amount prepaid and, if the prepayment is not made on the last day of an Interest Period together with any sums payable under Clause 21.2 (but without premium or penalty).
8.11 Application of partial prepayment or cancellation
Each partial prepayment or cancellation shall be applied:
(a) if made pursuant to Clauses 5.14, 8.4, 8.14, 15.2, 19.2, 23.3 or 24.6, proportionately between each Advance and thereafter first against the relevant Balloon Instalment and thereafter the remaining Instalments in respect of that Advance which are at the time being outstanding in inverse order of maturity; and
(b) if made pursuant to Clause 8.9(c):-
(i) firstly towards prepayment of Advance B, Tranche B;
(ii) secondly towards prepayment of Advance A, Tranche B;
(iii) thirdly proportionately between Advance A, Tranche A and Advance B, Tranche A, in each case first, against the relevant Balloon Instalment and thereafter against the remaining Instalments of that Advance in inverse order of maturity); and
(c) if made pursuant to Clause 8.9 (a) or 8.9 (b), first towards full prepayment of the Advance related to the Ship being sold or which has become a Total Loss and thereafter towards prepayment of the remaining Advance first against the Balloon Instalment in respect of that Advance and thereafter against the Instalments in respect of that Advance which are at the time being outstanding in inverse order of maturity provided that if the sale proceeds of a Ship are not sufficient to prepay in full the Relevant Amount, the Agent may, acting on the instructions of the Majority Lenders (acting on their discretion), apply such sale proceeds towards prepayment of any Advance in an amount and in the manner as the Majority Lenders may in their discretion select.
8.12 No reborrowing
No amount prepaid or cancelled may be reborrowed.
8.13 Unwinding of Designated Transactions
On or prior to any repayment or prepayment under this Clause 8 or any other provision of this Agreement, the Borrowers shall, if so required by the Swap Bank, wholly or partially reverse, offset, unwind or otherwise terminate one or more of the continuing Designated Transactions so that the notional principal amount of the continuing Designated Transactions thereafter remaining does not and will not in the future (taking into account the scheduled amortisation) exceed the amount of the Loan as reducing from time to time thereafter pursuant to Clause 8.1.
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8.14 Prepayment of Swap Benefit
If a Designated Transaction is terminated if so required by the Swap Bank in circumstances where the Swap Bank would be obliged to pay an amount to the Borrowers under the Master Agreement, the Borrowers hereby agree that such payment shall be applied in prepayment of the Loan in accordance with the provisions of Clause 8.11(a) and irrevocably authorise the Swap Bank to pay such amount to the Agent for such purpose.
9 CONDITIONS PRECEDENT
9.1 Documents, fees and no default
Each Lender's obligation to contribute to an Advance is subject to the following conditions precedent:
(a) that, on or before the date of this Agreement, the Agent receives:
(i) the documents described in Part A of Schedule 3 in form and substance satisfactory to the Agent and its lawyers;
(ii) payment of the structuring fee payable pursuant to Clause 20.1; and
(iii) payment of any expenses payable pursuant to Clause 20.2 which are due and payable on the date of this Agreement;
(b) that, on or before a Drawdown Date, the Agent receives:
(i) the documents described in Part B of Schedule 3 in form and substance satisfactory to the Agent and its lawyers;
(ii) in the case of the second Drawdown Date to occur under this Agreement, the structuring fee payable pursuant to Clause 20.1;
(iii) payment of any expenses payable pursuant to Clause 20.2 which are due and payable on that Drawdown Date;
(c) that both at the date of each Drawdown Notice and at the relevant Drawdown Date:
(i) no Event of Default which is continuing has occurred or would result from the borrowing of the relevant Advance;
(ii) the representations and warranties in Clause 10 and those of either Borrower or the Corporate Guarantor which are set out in the other Finance Documents would be true and not misleading if repeated on each of those dates with reference to the circumstances then existing;
(iii) none of the circumstances contemplated by Clause 5.7 has occurred and is continuing; and
(iv) there has been no Material Adverse Change;
(d) that, if the ratio set out in Clause 15.1 were applied immediately following the borrowing of an Advance, the Borrowers would not be obliged to provide additional security or prepay part of the Loan under that Clause; and
(e)              that the Agent has received, and found to be acceptable to it, any further opinions, consents, agreements and documents in connection with the Finance Documents which the Agent may, with the authorisation of the Majority Lenders, request by notice to the Borrowers prior to the relevant Drawdown Date.
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9.2 Waiver of conditions precedent
If the Majority Lenders, at their discretion, permit an Advance to be borrowed before certain of the conditions referred to in Clause 9.1 are satisfied, the Borrowers shall ensure that those conditions are satisfied within 5 Business Days after the relevant Drawdown Date (or such longer period as the Agent may, with the authorisation of the Majority Lenders, specify).
10 REPRESENTATIONS AND WARRANTIES
10.1 General
Each Borrower represents and warrants to each Creditor Party as follows.
10.2 Status
Each Borrower is duly formed, validly existing and in good standing under the laws of the Republic of the Marshall Islands.
10.3 Share capital and ownership
Each Borrower has an authorised share capital divided into 500 registered shares, each fully paid and of no par value, and the direct legal title and beneficial ownership of all those shares is held, free of any Security Interest or other claim, by the Corporate Guarantor.
10.4 Corporate power
Each Borrower has the corporate capacity, and has taken all corporate action and obtained all consents necessary for it:
(a) to execute any Underlying Document to which it is a party, to purchase and pay for the relevant Ship under the MOA and register the relevant Ship in its name under an Approved Flag;
(b) to execute the Finance Documents which that Borrower is a party; and
(c) to borrow under this Agreement, to enter into Designated Transactions under the Master Agreement and to make all the payments contemplated by, and to comply with, those Finance Documents to which it is a party.
10.5 Consents in force
All the consents referred to in Clause 10.4 remain in force and nothing has occurred which makes any of them liable to revocation.
10.6 Legal validity; effective Security Interests
The Finance Documents to which each Borrower is a party, do now or, as the case may be, will, upon execution and delivery (and, where applicable, registration as provided for in the Finance Documents):
(a) constitute that Borrower's legal, valid and binding obligations enforceable against that Borrower in accordance with their respective terms; and
(b) create legal, valid and binding Security Interests enforceable in accordance with their respective terms over all the assets to which they, by their terms, relate,
subject to any relevant insolvency laws affecting creditors' rights generally.
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10.7 No third party Security Interests
Without limiting the generality of Clause 10.6, at the time of the execution and delivery of each Finance Document to which a Borrower is a party:
(a) each Borrower which is a party to that Finance Document will have the right to create all the Security Interests which that Finance Document purports to create; and
(b) no third party will have any Security Interest (except for Permitted Security Interests) or any other interest, right or claim over, in or in relation to any asset of the Borrower to which any such Security Interest, by its terms, relates.
10.8 No conflicts
The execution by each Borrower and each Security Party of each Finance Document and each Assignable Charter to which it is a party, and the borrowing by that Borrower (together with the other Borrowers) of the Loan, and its compliance with each Finance Document and each Assignable Charter to which it is a party will not involve or lead to a contravention of:
(a) any law or regulation of any Pertinent Jurisdiction or, to its knowledge, of any other jurisdiction; or
(b) the constitutional documents of that Borrower; or
(c) any contractual or other obligation or restriction which is binding on that Borrower or any of its assets, and will not have a Material Adverse Effect.
10.9 No withholding taxes
All payments which each Borrower is liable to make under the Finance Documents to which it is a party may be made without deduction or withholding for or on account of any tax payable under any law of any Pertinent Jurisdiction.
10.10 No default
No Event of Default has occurred and is continuing.
10.11 Information
All information which has been provided in writing by or on behalf of the Borrowers or the Corporate Guarantor in connection with any Finance Document satisfied the requirements of Clause 11.5; all audited and unaudited accounts and financial statements which have been so provided satisfied the requirements of Clause 11.7 and are true, correct and not misleading and present fairly and accurately the financial position of the Borrowers, the Corporate Guarantor and the Group (as the case may be); and there has been no change in the financial position or state of affairs of either Borrower, the Corporate Guarantor or the Group from that disclosed in the latest of those accounts which is likely to have a Material Adverse Effect.
10.12 No litigation
No legal or administrative action involving either Borrower or any Security Party (including action relating to any alleged or actual breach of the ISM Code or the ISPS Code) has been commenced or taken or, to a Borrower's knowledge, is likely to be commenced or taken which would, in either case, be likely to have a Material Adverse Effect.
10.13 Validity and completeness of Underlying Documents
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Each Underlying Document constitutes valid, binding and enforceable obligations of the parties thereto in accordance with its terms and:
(a) each of the copies of that Underlying Document delivered to the Agent before the date of this Agreement is a true and complete copy; and
(b) no amendments or additions to that Underlying Document have been agreed nor has the Borrower which is the party thereto or the charterer or the Seller (as the case may be) which is a party to that Underlying Document, waived any of their respective rights thereunder.
10.14 Compliance with certain undertakings
At the date of this Agreement, the Borrowers are in compliance with Clauses 10.18, 11.2, 11.4, 11.9, 11.13, 13, 14.3 and 14.10.
10.15 No rebates etc.
There is no agreement or understanding to allow or pay any rebate, premium, commission, discount or other benefit or payment (howsoever described) to either Borrower, the Seller or a third party in connection with the purchase by each Borrower of the Ship to be owned by it, other than as disclosed to the Agent in writing on or prior to the date of this Agreement.
10.16 Taxes paid
Each Borrower has paid all taxes applicable to, or imposed on or in relation to that Borrower, its business or the Ship owned by it.
10.17 ISM Code and ISPS Code compliance
All requirements of the ISM Code and the ISPS Code as they relate to the Borrowers, the Corporate Guarantor, the Approved Manager and the Ships have been complied with.
10.18 No Money laundering
Each Borrower:
(a) will not, and will procure that no Security Party, to the extent applicable, will, in connection with this Agreement or any of the other Finance Documents, contravene or permit any subsidiary to contravene, any law, official requirement or other regulatory measure or procedure implemented to combat "money laundering" (as defined in Article 1 of the Directive 2005/60/EC of the European Parliament and of the Council of the European Union of 26 October 2005) and comparable United States Federal and state laws.  Each Borrower shall further submit any documents and declarations on request, if such documents or declarations are required by any Creditor Party to comply with its domestic money laundering and/or legal identification requirements; and
(b) confirms that it is the beneficiary within the meaning of the German Anti Money Laundering Act (Gesetz über das Aufspüren von Gewinnen aus schweren Straftaten (Geldwäschegesetz)), acting for its own account and not for or on behalf of any other person for each part of the Loan made or to be made available to it under this Agreement.  That is to say, it acts for its own account and not for or on behalf of anyone else.
Each Borrower will promptly inform the Agent by written notice, if it is not or ceases to be the beneficiary and will provide in writing the name and address of the beneficiary.
The Agent shall promptly notify the Lenders of any written notice it receives under this Clause 10.17.
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10.19 No immunity
No Borrower nor any of its assets is entitled to immunity on grounds of sovereignty or otherwise from any legal action or proceeding (including, without limitation, suit, attachment prior to judgement, execution or other enforcement).
10.20 Choice of law
The choice of the laws of England to govern the Loan Agreement and those other Finance Documents which are expressed to be governed by the laws of England, the laws of Germany to govern the Account Pledges and the laws of the applicable Approved Flag State to govern the Mortgages (other than any applicable deed of covenant which shall be governed by English law) , constitutes a valid choice of law and the submission by the Borrowers or, as the case may be, the relevant Security Parties thereunder to the exclusive jurisdiction of the Courts of England and, in the case of the Account Pledges, Germany or, in the case of the Mortgages, the applicable Approved Flag State is a valid submission and does not contravene the laws of the Commonwealth of the Bahamas or the laws of England or, in the case of the Account Pledges, Germany or, in the case of the Mortgages, the applicable Approved Flag State will be applied by the courts of the Commonwealth of the Bahamas if the Loan Agreement or those other Finance Documents or any claim thereunder comes under their jurisdiction upon proof of the relevant provisions of the laws of England or, in the case of the Account Pledges, Germany or, in the case of the Mortgages, the applicable Approved Flag State.
10.21 Pari passu ranking
The obligations of each Borrower under the Finance Documents to which it is a party are direct, general and unconditional obligations and rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors except for obligations mandatorily preferred by law applying to companies generally.
10.22 Repetition
The representations and warranties in this Clause 10 shall be deemed to be repeated by the Borrowers:
(a) on the date of service of each Drawdown Notice;
(b) on each Drawdown Date; and
(c) with the exception of Clauses 10.9, 10.10, 10.11 and 10.12, on the first day of each Interest Period,
as if made with reference to the facts and circumstances existing on each such day.
11 GENERAL UNDERTAKINGS
11.1 General
Each Borrower undertakes with each Creditor Party to comply with the following provisions of this Clause 11 at all times during the Security Period except as the Agent may, with the authorisation of the Majority Lenders, otherwise permit.
11.2 Title; negative pledge
Each Borrower will:
(a) hold the legal title to, and own the entire beneficial interest in that Ship, her Insurances and Earnings, free from all Security Interests and other interests and rights of every kind, except
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for those created by the Finance Documents and the effect of assignments contained in the Finance Documents and except for Permitted Security Interests;
(b) not create or permit to arise any Security Interest (except for Permitted Security Interests) over any other asset of the Borrower, present or future (including, but not limited to, the Borrowers' rights against the Swap Bank under the Master Agreement or all or any part of the Borrowers' interest in any amount payable to the Borrowers by the Swap Bank under the Master Agreement); and
(c) procure that any party who may have a claim against either Borrower and/or a Ship and/or any of the Assigned Property (as such term is defined in the relevant General Assignment) fully subordinates (in a manner acceptable to the Agent) its rights in respect of its claim against that Borrower and/or that Ship and/or any of the Assigned Property to those of the Creditor Parties under the Finance Documents .
11.3 No disposal of assets
No Borrower will transfer, lease or otherwise dispose of:
(a) all or a substantial part of its assets, whether by one transaction or a number of transactions, whether related or not; or
(b) any debt payable to it or any other right (present, future or contingent right) to receive a payment, including any right to damages or compensation, unless with respect to an amount not exceeding $500,000. but paragraph (a) does not apply to any charter of a Ship provided that unless an Event of Default which is continuing has occurred a Borrower may sell its Ship subject to prepaying the Relevant Amount in accordance with Clause 8.9(a).
11.4 No other liabilities or obligations to be incurred
Neither Borrower will incur any liability or obligation (including, without limitation, any Financial Indebtedness or any obligations under a guarantee) except:
(a) liabilities and obligations under the Finance Documents (including, without limitation, under the Master Agreement (in respect of any Designated Transactions)) and the Underlying Documents to which it is or, as the case may be, will be a party; and
(b) liabilities or obligations reasonably incurred in the normal course of its business of trading, operating and chartering, maintaining and repairing the Ship owned by it (including, without limitation, any shareholder loan subject to the relevant Borrower ensuring, on or prior to the date of the first advance of that loan, that the rights of the shareholder which is the provider of that loan are fully subordinated to the rights of the Creditor Parties under the Finance Documents in writing and upon such terms and conditions as shall be required by the Agent (acting on the instructions of the Majority Lenders) but excluding any investments, any sale or lease back agreements and any off-balance-sheet obligations).
11.5 Information provided to be accurate
All financial and other information, including but not limited to factual information, exhibits and reports, which is provided in writing by or on behalf of a Borrower under or in connection with any Finance Document will be true and not misleading and will not omit any material fact or consideration.
11.6 Provision of financial statements
Each Borrower will send or procure that there are sent to the Agent:
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(a) as soon as possible, but in no event later than 120 days after the end of each Financial Year of that Borrower or, as the case may be, the Corporate Guarantor, the individual unaudited annual financial statements of that Borrower or its management accounts provided they are reconciled with its audited financial statements and the consolidated audited financial statements of the Corporate Guarantor for that Financial Year (commencing with the financial statements for the Financial Year which ending on 31 December 2015); and
(b) as soon as possible, but in no event later than 90 days after the end of each financial quarter in each Financial Year of that Borrower or, as the case may be, the Corporate Guarantor, the quarterly individual unaudited financial statements in respect of that Borrower and the quarterly consolidated unaudited financial statements of the Corporate Guarantor, in each case, for that financial quarter (commencing with the financial statements for the financial quarter ending on 30 September 2015), duly certified as to their correctness by a director of that Borrower or, in the case of the Corporate Guarantor, the chief financial officer or 2 directors of the Corporate Guarantor; and
(c) as soon as possible, but in no event later than 30 March of each Financial Year of that Borrower, or as the case may be, the Corporate Guarantor, the consolidated annual business plan and liquidity forecast of that Borrowers and the Group; and
(d) promptly after each request by the Agent, such further financial or other information in respect of that Borrower, each Ship, the Corporate Guarantor, the other Security Parties and the Group (including, without limitation, any information regarding any offering documents, any sale and purchase agreements, investment brochures, shipbuilding contracts, charter agreements).
11.7 Form of financial statements
All accounts delivered under Clause 11.6 will:
(a) be prepared in accordance with GAAP and, in the case of any audited financial statements, be prepared by an Approved Auditor;
(b) give a true and fair view of the state of affairs of each Borrower and the Corporate Guarantor at the date of those accounts and of its profit for the period to which those accounts relate; and
(c) fully disclose or provide for all significant liabilities of each Borrower and the Corporate Guarantor.
11.8 Shareholder and creditor notices
Each Borrower will send the Agent, at the same time as they are despatched, copies of all communications which are despatched to that Borrower's shareholders or creditors or any class of them in the context of that Borrower's obligations under this Agreement or any of the other Finance Documents.
11.9 Consents
Each Borrower will maintain in force and promptly obtain or renew, and will promptly send certified copies to the Agent of, all consents required:
(a) for that Borrower to perform its obligations under any Finance Document and/or any Underlying Document to which it is or, as the case may be, will be a party;
(b) for the validity or enforceability of any Finance Document and/or Underlying Document to which it is or, as the case may be, will be a party; and
(c) for that Borrower to continue to own and operate the Ship owned by it,
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and that Borrower will comply with the terms of all such consents.
11.10 Maintenance of Security Interests
Each Borrower will:
(a) at its own cost, do all that it reasonably can to ensure that any Finance Document validly creates the obligations and the Security Interests which it purports to create; and
(b) without limiting the generality of paragraph (a), at its own cost, promptly register, file, record or enrol any Finance Document with any court or authority in all Pertinent Jurisdictions, pay any stamp, registration or similar tax in all Pertinent Jurisdictions in respect of any Finance Document, give any notice or take any other step which, in the opinion of the Majority Lenders, is or has become necessary or desirable for any Finance Document to be valid, enforceable or admissible in evidence or to ensure or protect the priority of any Security Interest which it creates.
11.11 Notification of litigation
Each Borrower will provide the Agent with details of any legal or administrative action creating any Material Adverse Change and involving that Borrower, the Ship owned by it, the Earnings or the Insurances in respect of that Ship, any Security Party, the Approved Manager, as soon as such action is instituted or it becomes apparent to that Borrower that it is likely to be instituted, and each Borrower shall procure that reasonable measures are taken for the defence in any such legal or administrative action.
11.12 No amendment to an MOA
No Borrower will agree to any amendment or supplement to, or waive or fail to enforce, any MOA to which it is a party or any of its provisions, without Lenders' consent, such consent not to be unreasonably withheld.
11.13 Principal place of business
Each Borrower will maintain its place of business, and keep its corporate documents and records, at the address stated in Clause 28.2(a); and no Borrower will establish, or do anything as a result of which it would be deemed to have, a place of business in the United States of America and/or the United Kingdom.
11.14 Confirmation of no default
Each Borrower will, within 2 Business Days after service by the Agent of a written request, serve on the Agent a notice which is signed by 2 directors of that Borrower and which:
(a) states that no Event of Default has occurred and is continuing; or
(b) states that no Event of Default has occurred and is continuing, except for a specified event or matter, of which all material details are given.
The Agent may serve requests under this Clause 11.14 from time to time but only if asked to do so by a Lender or Lenders having Contributions exceeding 50 per cent. of the Loan or (if none of the Advances has been borrowed) Commitments exceeding 10 per cent. of the Total Commitments; and this Clause 11.14 does not affect the Borrowers' obligations under Clause 11.15.
11.15 Notification of default
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Each Borrower will notify the Agent as soon as that Borrower becomes aware of the occurrence of an Event of Default and will keep the Agent fully up-to-date with all developments.
11.16 Provision of copies and translation of documents
Each Borrower will supply the Agent with a sufficient number of copies of the documents referred to above to provide 1 copy for each Creditor Party; and if the Agent so requires in respect of any of those documents, the Borrowers will provide a certified English translation prepared by a translator approved by the Agent or have them notarised and/or legalised by a competent authority.
11.17 "Know your customer" checks
If:
(a) the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the date of this Agreement;
(b) any change in the status of either Borrower or any Security Party after the date of this Agreement; or
(c) a proposed assignment or transfer by a Lender of any of its rights and obligations under this Agreement to a party that is not a Lender prior to such assignment or transfer, obliges the Agent or any Lender (or, in the case of paragraph (c), any prospective new Lender) to comply with "know your customer" or similar identification procedures in circumstances where the necessary information is not already available to it, the Borrowers shall promptly upon the request of the Agent or the Lender concerned supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself or on behalf of any Lender) or the Lender concerned (for itself or, in the case of the event described in paragraph (c), on behalf of any prospective new Lender) in order for the Agent, the Lender concerned or, in the case of the event described in paragraph (c), any prospective new Lender to carry out and be satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.
12 CORPORATE UNDERTAKINGS
12.1 General
Each Borrower also undertakes with each Creditor Party to comply with the following provisions of this Clause 12 at all times during the Security Period except as the Agent may, with the authorisation of the Majority Lenders, otherwise permit in writing.
12.2 Maintenance of status
Each Borrower will maintain its separate corporate existence and remain in good standing under the laws of the Marshall Islands.
12.3 Negative undertakings
No Borrower will:
(a) change the nature of its business; or
(b) pay any dividend or make any other form of distribution, unless the Agent is satisfied that, at the relevant time:-
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(i) no Event of Default has occurred and is continuing or would result from such payment of dividend or such distribution, or effect any form of redemption, purchase or return of share capital; and
(ii) the aggregate of (a) the Market Value of the Mortgaged Ships and (b) the net realisable value of additional Security previously provided under Clause 15.2 (Minimum required security cover), is equal to or higher than 145 per cent. of the aggregate of the Loan and the Swap Exposure less any cash held by the Borrowers or any other member of the Group with the Lender;   and
(iii) at any time prior to the making the prepayment referred to in Clause 8.9(c), a minimum credit balance of not less than $3,000,000 in aggregate shall remain standing to the credit of the Earnings Accounts, or to any other bank account held at any relevant time by the Borrowers with the Agent, following such payment of dividend or making of distribution;
(c) provide any form of credit or financial assistance to any person or company or enter into any transaction with or involving such a person or company on terms which are, in any respect, less favourable to that Borrower than those which it could obtain in a bargain made at arms' length;
(d) open or maintain any account with any bank or financial institution except accounts with the Agent and the Security Trustee for the purposes of the Finance Documents;
(e) issue, allot or grant any person a right to any shares in its capital or repurchase or reduce its issued share capital;
(f) acquire any shares or other securities other than US or UK Treasury bills and certificates of deposit issued by major North American or European banks, or enter into any transaction in a derivative other than any Designated Transactions; or
(g) enter into any form of amalgamation, merger or de-merger, acquisition, divesture, split-up or any form of reconstruction or reorganisation.
12.4 Corporate Guarantor's subsidiaries
The Borrowers shall provide the Agent with a list of each Borrower's and the Corporate Guarantor's subsidiaries at the date of this Agreement (together with any information requested by the Agent pursuant to Clause 11.6(c) in respect of such subsidiaries) and shall advise the Agent of any amendments to such list from time to time.
13 INSURANCE
13.1 General
Each Borrower also undertakes with each Creditor Party to comply with the following provisions of this Clause 13 at all times during the Security Period except as the Agent may, with the authorisation of the Majority Lenders, otherwise permit.
13.2 Maintenance of obligatory insurances
Each Borrower shall keep the Ship owned by it insured at the expense of that Borrower against:
(a) fire and usual marine risks (including hull and machinery and excess risks);
(b) war risks (including, without limitation, protection and indemnity war risks with a separate limit not less than hull value);
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(c) protection and indemnity risks (including, without limitation, protection and indemnity war risks in excess of the amount for war risks (hull) and oil pollution liability risks) in each case in the highest amount available in the international insurance market); and
(d) any other risks the insurance of which the Security Trustee (acting on the instructions of the Majority Lenders), having regard to practices, recommendations and other circumstances prevailing at the relevant time, may from time to time reasonably require by notice to that Borrower.
13.3 Terms of obligatory insurances
Each Borrower shall effect such insurances in such amounts in such currency and upon such terms and conditions (including, without limitation, any LSW 1189 or, in the opinion of the Security Trustee, comparable mortgage clause) as shall from time to time be approved in writing by the Security Trustee in its sole discretion, but in any event as follows:
(a) in Dollars;
(b) in the case of fire and usual marine risks and war risks, on an agreed value basis in an amount equal to at least the higher of (i) an amount which is equal to 120 per cent. of the aggregate of (A) the Advance relevant to that Borrower's Ship, (B) the Swap Exposure relevant to that Advance and (C) the principal amount secured by any equal or prior ranking Security Interest on that Ship and (ii) the Market Value of that Borrower's Ship;
(c) in the case of oil pollution liability risks, for an amount equal to the highest level of cover from time to time available under basic protection and indemnity club entry (with the International Group of Protection and Indemnity Clubs) and the international marine insurance market (currently $1,000,000,000 for any one accident or occurrence);
(d) in relation to protection and indemnity risks in respect of the full value and tonnage of that Ship;
(e) in relation to war risks insurance, extended to cover piracy and terrorism where excluded under the fire and usual marine risks insurance;
(f) on approved terms and conditions;
(g) such other risks of whatever nature and howsoever arising in respect of which insurance would be maintained by a prudent owner of a vessel similar to that Ship; and
(h) through approved brokers and with approved insurance companies and/or underwriters or, in the case of war risks and protection and indemnity risks, in approved war risks and protection and indemnity risks associations which are members of the International Group of Protection and Indemnity Associations, and have a Standard & Poor's rating of at least BBB- or a comparable rating by any other rating agency acceptable to the Security Trustee (acting on the instructions of the Majority Lenders).
13.4 Further protections for the Creditor Parties
In addition to the terms set out in Clause 13.3, each Borrower shall and shall procure that:
(a) it and any and all third parties who are named assured or co-assured under any obligatory insurance shall assign their interest in any and all obligatory insurances and other Insurances if so required by the Agent;
(b) whenever the Security Trustee requires, the obligatory insurances name (or be amended to name) the Security Trustee as additional named assured for its rights and interests, warranted no operational interest and with full waiver of rights of subrogation they may have under any applicable law against the Security Trustee but without the Security Trustee
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thereby being liable to pay (but having the right to pay) premiums, calls or other assessments in respect of such insurance;
(c) the interest of the Security Trustee as assignee and as loss payee shall be duly endorsed on all slips, cover notes, policies, certificates of entry or other instruments of insurance in respect of the obligatory insurances;
(d) the obligatory insurances shall name the Security Trustee as sole loss payee with such directions for payment as the Security Trustee may specify;
(e) the obligatory insurances shall provide that all payments by or on behalf of the insurers under the obligatory insurances to the Security Trustee shall be made without set-off, counterclaim or deductions or condition whatsoever;
(f) the obligatory insurances shall provide that the insurers shall waive, to the fullest extent permitted by English law, their entitlement (if any) (whether by statute, common law, equity, or otherwise) to be subrogated to the rights and remedies of the Security Trustee in respect of any rights or interests (secured or not) held by or available to the Security Trustee in respect of the Secured Liabilities, until the Secured Liabilities shall have been fully repaid and discharged, except that the insurers shall not be restricted by the terms of this paragraph (f) from making personal claims against persons (other than either Borrower or any Creditor Party) in circumstances where the insurers have fully discharged their liabilities and obligations under the relevant obligatory insurances;
(g) the obligatory insurances shall provide that the obligatory insurances shall be primary without right of contribution from other insurances effected by the Security Trustee or any other Creditor Party;
(h) the obligatory insurances shall provide that the Security Trustee may make proof of loss if that Borrower fails to do so; and
(i) the obligatory insurances shall provide that if any obligatory insurance is cancelled, or if any substantial change is made in the coverage which adversely affects the interest of the Security Trustee, or if any obligatory insurance is allowed to lapse for non‑payment of premium, such cancellation, charge or lapse shall only be effective against the Security Trustee 14 days (or 7 days in the case of war risks) after receipt by the Security Trustee of prior written notice from the insurers of such cancellation, change or lapse.
13.5 Renewal of obligatory insurances
Each Borrower shall:
(a) at least 14 days before the expiry of any obligatory insurance effected by it:
(i) notify the Security Trustee of the brokers, underwriters, insurance companies and any protection and indemnity or war risks association through or with whom that Borrower proposes to renew that obligatory insurance and of the proposed terms and conditions of renewal; and
(ii) seek the Security Trustee's approval to the matters referred to in paragraph (i);
(b) at least 7 days before the expiry of any obligatory insurance, renew that obligatory insurance in accordance with the Security Trustee's approval pursuant to paragraph (a); and
(c) procure that the approved brokers and/or the war risks and protection and indemnity associations with which such a renewal is effected shall promptly after the renewal notify the Security Trustee in writing of the terms and conditions of the renewal.
13.6 Copies of policies; letters of undertaking
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Each Borrower shall ensure that all approved brokers provide the Security Trustee with pro forma copies of all cover notes and policies relating to the obligatory insurances which they are to effect or renew and of a letter or letters of undertaking in a form required by the Security Trustee and including undertakings by the approved brokers that:
(a) they will have endorsed on each policy, immediately upon issue, a loss payable clause and a notice of assignment complying with the provisions of Clause 13.4;
(b) they will hold such policies, and the benefit of such insurances, to the order of the Security Trustee in accordance with the said loss payable clause;
(c) they will advise the Security Trustee immediately of any material change to the terms of the obligatory insurances;
(d) they will notify the Security Trustee, not less than 14 days before the expiry of the obligatory insurances, in the event of their not having received notice of renewal instructions from that Borrower or its agents and, in the event of their receiving instructions to renew, they will promptly notify the Security Trustee of the terms of the instructions; and
(e) they will not set off against any sum recoverable in respect of a claim relating to the Ship owned by that Borrower under such obligatory insurances any premiums or other amounts due to them or any other person whether in respect of that Ship or otherwise, they waive any lien on the policies, or any sums received under them, which they might have in respect of such premiums or other amounts, and they will not cancel such obligatory insurances by reason of non-payment of such premiums or other amounts, and will arrange for a separate policy to be issued in respect of that Ship forthwith upon being so requested by the Security Trustee.
13.7 Copies of certificates of entry; letters of undertaking
Each Borrower shall ensure that any protection and indemnity and/or war risks associations in which the Ship owned by that Borrower is entered provides the Security Trustee with:
(a) a certified copy of the certificate of entry for that Ship;
(b) a letter or letters of undertaking in such form as may be required by the Security Trustee;
(c) where required to be issued under the terms of insurance/indemnity provided by that Borrower's protection and indemnity association, a certified copy of each United States of America voyage quarterly declaration (or other similar document or documents) made by that Borrower in accordance with the requirements of such protections and indemnity association; and
(d) a certified copy of each certificate of financial responsibility for pollution by oil or other Environmentally Sensitive Material issued by the relevant certifying authority or, as the case may be, protection and indemnity associations in relation to that Ship (if applicable).
13.8 Deposit of original policies
Each Borrower shall ensure that all policies relating to obligatory insurances effected by it are deposited with the approved brokers through which the insurances are effected or renewed.
13.9 Payment of premiums
Each Borrower shall punctually pay all premiums or other sums payable in respect of the obligatory insurances effected by it and produce all relevant receipts when so required by the Security Trustee.
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13.10 Guarantees
Each Borrower shall ensure that any guarantees required by a protection and indemnity or war risks association are promptly issued and remain in full force and effect.
13.11 Restrictions on employment
Each Borrower shall not employ the Ship owned by it, nor shall permit it to be employed, outside the cover provided by any obligatory insurances.
13.12 Compliance with terms of insurances
Each Borrower shall not do or omit to do (nor permit to be done or not to be done) any act or thing which would or might render any obligatory insurance invalid, void, voidable or unenforceable or render any sum payable under an obligatory insurance repayable in whole or in part; and, in particular it shall:
(a) take all necessary action and comply with all requirements which may from time to time be applicable to the obligatory insurances, and (without limiting the obligation contained in Clause 13.6(c)) ensure that the obligatory insurances are not made subject to any exclusions or qualifications to which the Security Trustee has not given its prior approval;
(b) not make any changes relating to the classification or classification society or manager or operator of the Ship owned by it approved by the underwriters of the obligatory insurances except with the prior written consent of the Agent;
(c) make (and promptly supply copies to the Agent) of all quarterly or other voyage declarations which may be required by the protection and indemnity risks association in which that Ship is entered to maintain cover for trading to the United States of America and Exclusive Economic Zone (as defined in the United States Oil Pollution Act 1990 or any other applicable legislation) and, if applicable, shall procure that the Approved Manager complies with this requirement; and
(d) not employ that Ship, nor allow it to be employed, otherwise than in conformity with the terms and conditions of the obligatory insurances, without first obtaining the consent of the insurers and complying with any requirements (as to extra premium or otherwise) which the insurers specify.
13.13 Alteration to terms of insurances
Each Borrower shall neither make nor agree to any alteration to the terms of any obligatory insurance or waive any right relating to any obligatory insurance.
13.14 Settlement of claims
Each Borrower shall not settle, compromise or abandon any claim under any obligatory insurance for Total Loss or for a Major Casualty, and shall do all things necessary and provide all documents, evidence and information to enable the Security Trustee to collect or recover any moneys which at any time become payable in respect of the obligatory insurances and shall do all things necessary to ensure such collection or recovery is made.
13.15 Provision of copies of communications
Each Borrower shall provide the Security Trustee, at the time of each such communication, copies of all written communications between that Borrower and:
(a) the approved brokers;
(b) the approved protection and indemnity and/or war risks associations; and
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(c) the approved insurance companies and/or underwriters, which relate directly or indirectly to:
(i) that Borrower's obligations relating to the obligatory insurances including, without limitation, all requisite declarations and payments of additional premiums or calls; and
(ii) any credit arrangements made between that Borrower and any of the persons referred to in paragraphs (a) or (b) relating wholly or partly to the effecting or maintenance of the obligatory insurances.
13.16 Provision of information and further undertakings
In addition, each Borrower shall promptly provide the Security Trustee (or any persons which it may designate) with any information which the Security Trustee (or any such designated person) reasonably requests for the purpose of:
(a) obtaining or preparing any report from an independent marine insurance broker as to the adequacy of the obligatory insurances effected or proposed to be effected; and/or
(b) effecting, maintaining or renewing any such insurances as are referred to in Clause 13.17 or dealing with or considering any matters relating to any such insurances, and that Borrower shall:
(i) do all things necessary and provide the Agent and the Security Trustee with all documents and information to enable the Security Trustee to collect or recover any moneys in respect of the Insurances which are payable to the Security Trustee pursuant to the Finance Documents; and
(ii) promptly provide the Agent with full information regarding any Major Casualty in consequence whereof the Ship owned by that Borrower has become or may become a Total Loss and agree to any settlement of such casualty or other accident or damage to that Ship only with the Agent's prior written consent,
and that Borrower shall, forthwith upon demand, indemnify the Security Trustee in respect of all fees and other expenses incurred by or for the account of the Security Trustee in connection with any such report as is referred to in paragraph (a).
13.17 Mortgagee's interest and additional perils insurances
The Security Trustee shall be entitled from time to time to effect, maintain and renew all or any of the following insurances in such amounts, on such terms, through such insurers and generally in such manner as the Majority Lenders may from time to time consider appropriate:
(a) a mortgagee's interest insurance providing for the indemnification of the Creditor Parties for any losses under or in connection with any Finance Document (in an amount of up to 120 per cent. of the aggregate of (i) the Loan and (ii) any Swap Exposure) which directly or indirectly result from loss of or damage to a Ship or a liability of that Ship or of the Borrower owning that Ship, being a loss or damage which is prima facie covered by an obligatory insurance but in respect of which there is a non-payment (or reduced payment) by the underwriters by reason of, or on the basis of an allegation concerning:
(i) any act or omission on the part of that Borrower, of any operator, charterer, manager or sub-manager of that Ship or of any officer, employee or agent of that Borrower or of any such person, including any breach of warranty or condition or any non-disclosure relating to such obligatory insurance;
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(ii) any act or omission, whether deliberate, negligent or accidental, or any knowledge or privity of that Borrower, any other person referred to in paragraph (i) above, or of any officer, employee or agent of that Borrower or of such a person, including the casting away or damaging of that Ship and/or that Ship being unseaworthy; and/or
(iii) any other matter capable of being insured against under a mortgagee's interest marine insurance policy whether or not similar to the foregoing; and
(b) a mortgagee's interest additional perils insurance providing for the indemnification of the Creditor Parties against, among other things, any possible losses or other consequences of any Environmental Claim, including the risk of expropriation, arrest or any form of detention of a Ship, the imposition of any Security Interest over that Ship and/or any other matter capable of being insured against under a mortgagee's interest additional perils policy whether or not similar to the foregoing, and in an amount of up to 110 per cent. of the aggregate of (i) the Loan and (ii) any Swap Exposure ,
and the Borrowers shall upon demand fully indemnify the Security Trustee in respect of all premiums and other expenses which are incurred in connection with or with a view to effecting, maintaining or renewing any such insurance or dealing with, or considering, any matter arising out of any such insurance.
13.18 Review of insurance requirements
The Security Trustee shall be entitled to review the requirements of this Clause 13 from time to time in order to take account of any changes in circumstances after the date of this Agreement which are, in the opinion of the Agent (acting on the instructions of the Majority Lenders), significant and capable of affecting the Borrowers, each Ship and its Insurances (including, without limitation, changes in the availability or the cost of insurance coverage or the risks to which the Borrower owning that Ship may be subject) and the Borrowers shall upon demand fully indemnify the Agent in respect of all fees and other expenses incurred by or for the account of the Agent in appointing an independent marine insurance broker or adviser to conduct such review.
13.19 Modification of insurance requirements
The Security Trustee shall notify the Borrowers of any proposed modification under Clause 13.18 to the requirements of this Clause 13 which the Security Trustee reasonably considers appropriate in the circumstances, and such modification shall take effect on and from the date it is notified in writing to the Borrowers as an amendment to this Clause 13 and shall bind the Borrowers accordingly.
13.20 Compliance with mortgagee's instructions
The Security Trustee shall be entitled (without prejudice to or limitation of any other rights which it may have or acquire under any Finance Document) to require a Ship to remain at any safe port or to proceed to and remain at any safe port designated by the Security Trustee until the Borrower owning that Ship implements any amendments to the terms of the obligatory insurances and any operational changes required as a result of a notice served under Clause 13.19.
14 SHIP COVENANTS
14.1 General
Each Borrower also undertakes with each Creditor Party to comply with the following provisions of this Clause 14 at all times during the Security Period except as the Agent, with the authorisation of the Majority Lenders, may otherwise permit in writing.
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14.2 Ship's name and registration
Each Borrower shall keep the Ship owned by it registered in its name under an Approved Flag; shall not do, omit to do or allow to be done anything as a result of which such registration might be cancelled or imperilled; and shall not change the name or port of registry of that Ship, unless with the prior written consent of the Agent, such consent not to be unreasonably withheld and provided that the relevant Borrower executes and delivers to the Security Trustee replacement security, including a new first priority statutory or preferred mortgage (as the case may be) and deed of covenants collateral thereto (if required) and an assignment of earnings, insurances and requisition compensation, on terms and conditions acceptable to the Agent (acting on the instructions of the Majority Lenders) .
14.3 Repair and classification
Each Borrower shall, and shall procure that each Approved Manager shall, keep the Ship owned by that Borrower in a good and safe condition and state of repair, sea and cargo worthy in all respects:
(a) consistent with first-class ship ownership and management practice;
(b) so as to maintain the highest class free of overdue recommendations and conditions, with a classification society which is a member of IACS (other than the China Classification Society and the Russian Maritime Registry of Shipping) and acceptable to the Agent; and
(c) so as to comply with all laws and regulations applicable to vessels registered at ports in the Approved Flag State or to vessels trading to any jurisdiction to which that Ship may trade from time to time, including but not limited to the ISM Code and the ISPS Code,
and the Agent shall be given power of attorney in the form attached as Schedule 7 to act on behalf of that Borrower in order to, inspect the class records and any files held by the classification society and to require the classification society to provide the Agent or any of its nominees with any information, document or file, it might request and the classification society shall be fully entitled to rely hereon without any further inquiry.
14.4 Classification society undertaking
Each Borrower shall instruct the classification society referred to in Clause 14.3 (and procure that the classification society undertakes with the Security Trustee) in relation to its Ship:
(a) to send to the Security Trustee, following receipt of a written request from the Security Trustee, certified true copies of all original class records and any other related records held by the classification society in relation to the Ship owned by that Borrower;
(b) to allow the Security Trustee (or its agents), at any time and from time to time, to inspect the original class and related records of that Ship at the offices of the classification society and to take copies of them;
(c) to notify the Security Trustee immediately in writing if the classification society:
(i) receives notification from that Borrower or any person that that Ship's classification society is to be changed; or
(ii) becomes aware of any facts or matters which it is reasonably expected to have resulted in a change, suspension, discontinuance, withdrawal or expiry of that Ship's class under the rules or terms and conditions of that Borrower's or that Ship's membership of the classification society;
(d) following receipt of a written request from the Security Trustee:
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(i) to confirm that that Borrower is not in default of any of its contractual obligations or liabilities to the classification society and, without limiting the foregoing, that it has paid in full all fees or other charges due and payable to the classification society; or
(ii) if that Borrower is in default of any of its contractual obligations or liabilities to the classification society, to specify to the Security Trustee in reasonable detail the facts and circumstances of such default, the consequences thereof, and any remedy period agreed or allowed by the classification society.
14.5 Modification
Neither Borrower shall make any modification or repairs to, or replacement of, its Ship or equipment installed on it which would or might materially alter the structure, type or performance characteristics of that Ship or materially reduce its value.
14.6 Removal of parts
Neither Borrower shall remove any material part of its Ship, or any item of equipment installed on, that Ship unless the part or item so removed is forthwith replaced by a suitable part or item which is in the same condition as or better condition than the part or item removed, is free from any Security Interest or any right in favour of any person other than the Security Trustee and becomes on installation on that Ship the property of that Borrower and subject to the security constituted by the relevant Mortgage Provided that a Borrower may install equipment owned by a third party if the equipment can be removed without any risk of damage to the Ship owned by it.
14.7 Surveys
Each Borrower shall submit the Ship owned by it regularly to all periodical or other surveys which may be required for classification purposes and, if so required by the Security Trustee provide the Security Trustee, with copies of all survey reports.
14.8 Inspection
If and so long as an Event of Default has occurred and is continuing, each Borrower shall permit the Security Trustee (by surveyors or other persons appointed by it for that purpose) to board the Ship owned by that Borrower at all reasonable times and upon reasonable notice to inspect its condition or to satisfy themselves about proposed or executed repairs and shall afford all proper facilities for such inspections, and if the inspector or surveyor appointed by the Security Trustee under this Clause is of the opinion that there are any technical, commercial or operational actions being undertaken or omitted to be undertaken by the Borrower which is the owner of that Ship or the Approved Managers which adversely affect the operation or value of that Ship, the Borrowers shall forthwith (at their expense) on the Security Trustee's demand remedy such action or inaction and provide the Security Trustee with evidence that it has taken such remedial action. The Borrowers shall be responsible for all costs in connection with any such inspections.
14.9 Prevention of and release from arrest
Each Borrower shall promptly discharge:
(a) all liabilities which give or may give rise to maritime or possessory liens on or claims enforceable against the Ship owned by it, the Earnings or the Insurances;
(b) all taxes, dues and other amounts charged in respect of that Ship, the Earnings or the Insurances; and
(c) all other outgoings whatsoever in respect of that Ship, the Earnings or the Insurances,
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and, forthwith upon receiving notice of the arrest of that Ship, or of its detention in exercise or purported exercise of any lien or claim, that Borrower shall procure its release by providing bail or otherwise as the circumstances may require.
14.10 Compliance with laws etc.
Each Borrower shall:
(a) comply, or procure compliance with the ISM Code, the ISPS Code, all Environmental Laws and all other laws or regulations relating to the Ship owned by it, its ownership, operation and management or to the business of that Borrower;
(b) not employ the Ship owned by it nor allow its employment in any manner contrary to any law or regulation in any relevant jurisdiction including but not limited to the ISM Code and the ISPS Code; and
(c) in the event of hostilities in any part of the world (whether war is declared or not), not cause or permit that Ship to enter or trade to any zone which is declared a war zone by any government or by the Ship's war risks insurers unless the prior written consent of the Security Trustee has been given and that Borrower has (at its expense) effected any special, additional or modified insurance cover which the Security Trustee may require.
14.11 Provision of information
Each Borrower shall promptly provide the Security Trustee with any information which it requests regarding:
(a) the Ship owned by it, its employment, position and engagements;
(b) the Earnings and payments and amounts due to the master and crew of that Ship;
(c) any expenses incurred, or likely to be incurred, in connection with the operation, maintenance or repair of that Ship and any payments made in respect of that Ship;
(d) any towages and salvages; and
(e) its compliance, either Approved Managers' compliance and the compliance of that Ship with the ISM Code and the ISPS Code,
and, upon the Security Trustee's request, provide copies of any current charter relating to that Ship, of any current charter guarantee and copies of that Borrower's or that Approved Managers' Document of Compliance, Safety Management Certificate and the ISSC.
14.12 Notification of certain events
Each Borrower shall immediately notify the Security Trustee in writing, of:
(a) its entry into any agreement or arrangement for the postponement of any date on which any Earnings are due, the reduction of the amount of any Earnings or otherwise for the release or adverse alteration of any right of that Borrower to any Earnings;
(b) its entry into a demise charter in respect of that Ship for any period;
(c) its entry into any time or consecutive voyage charter in respect of that Ship for a term which exceeds, or which by virtue of any optional extensions may exceed, 12 months; immediately upon becoming aware of:-
(d) any casualty which is or is likely to be or to become a Major Casualty;
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(e) any occurrence as a result of which the Ship owned by it has become or is, by the passing of time or otherwise, likely to become a Total Loss;
(f) any requirement, condition or overdue recommendation made by any insurer or classification society or by any competent authority which is not complied with within the time limits imposed by that insurer or classification society or authority;
(g) any arrest or detention of that Ship, any exercise or purported exercise of any lien on that Ship or its Earnings or any requisition of that Ship for hire;
(h) any scheduled dry docking of that Ship;
(i) any Environmental Claim made against that Borrower or in connection with that Ship, or any Environmental Incident;
(j) any claim for breach of the ISM Code or the ISPS Code being made against that Borrower, the Approved Managers or otherwise in connection with that Ship; or
(k) any other matter, event or incident, actual or threatened, the effect of which will or could lead to the ISM Code or the ISPS Code not being complied with, and that Borrower shall keep the Security Trustee advised in writing on a regular basis and in such detail as the Security Trustee shall require of that Borrower's, the Approved Managers' or any other person's response to any of those events or matters.
14.13 Restrictions on chartering, appointment of managers etc.
Unless with the prior written consent of the Security Trustee (such consent not to be unreasonably withheld), neither Borrower shall, in relation to the Ship owned by it:
(a) enter into any charter in relation to that Ship under which more than 2 months' hire (or the equivalent) is payable in advance;
(b) charter that Ship otherwise than on bona fide arm's length terms at the time when that Ship is fixed;
(c) appoint a manager of that Ship other than the Approved Managers or agree to any alteration to the terms of the Approved Managers' appointment;
(d) de-activate or lay up that Ship; or
(e) put that Ship into the possession of any person for the purpose of work being done upon it in an amount exceeding or likely to exceed $400,000 (or the equivalent in any other currency) unless that person has first given to the Security Trustee and in terms satisfactory to it a written undertaking not to exercise any lien on that Ship or its Earnings for the cost of such work or for any other reason.
14.14 Notice of Mortgage
Each Borrower shall keep the Mortgage relative to its Ship registered against that Ship as a valid first preferred or, as the case may be, priority mortgage, carry on board that Ship a certified copy of that Mortgage and place and maintain in a conspicuous place in the navigation room and the Master's cabin of that Ship a framed printed notice stating that that Ship is mortgaged by that Borrower to the Security Trustee.
14.15 Sharing of Earnings
Neither Borrower, other than between the two Borrowers shall enter into any agreement or arrangement for the sharing of any Earnings other than through a profit sharing agreement
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with a charterer on bona fide arm's length terms which take effect above an agreed amount of charter hire rate payable under a charterparty but not including any pooling arrangements.
14.16 ISPS Code
Each Borrower shall comply with the ISPS Code and in particular, without limitation, shall:
(a) procure that the Ship owned by it and the company responsible for that Ship's compliance with the ISPS Code comply with the ISPS Code; and
(b) maintain for that Ship an ISSC; and
(c) notify the Agent immediately in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the ISSC.
14.17 Charterparty Assignment
If a Borrower enters into an Assignable Charter, it shall, following the request of the Agent:
(a) promptly execute in favour of the Security Trustee a Charterparty Assignment in respect of that Assignable Charter (such Charterparty Assignment to be notified to, acknowledged by, the relevant charterer and any charter guarantor); and
(b) without limiting the generality of the above, if that Assignable Charter is a bareboat charter, procure that the bareboat charterer shall promptly execute in favour of the Security Trustee an assignment of (inter alia) all its rights, title and interest in and to the Insurances in respect of that Ship effected either by the Borrower owning that Ship or by the bareboat charterer and a letter of undertaking in favour of the Security Trustee whereby (inter alia) the interests of the bareboat charterer under the bareboat charter are fully subordinated to the interests of the Security Trustee and the other Creditor Parties under the Finance Documents, each to be in an Agreed Form,
and shall deliver to the Agent such other documents equivalent to those referred to at paragraphs 3, 4, 5, 6, 7, 9 and 11 of Schedule 3, Part A as the Agent may reasonably require.
15 SECURITY COVER
15.1 Minimum required security cover
Clause 15.2 applies, at any time after 30 September 2017, if the Agent notifies the Borrowers that:
(a) the aggregate of the Market Value of the Mortgaged Ships; plus
(b) the net realisable value of any additional security previously provided under this Clause 15,
is below an amount equal to 120 per cent. of the aggregate of the Loan and the Swap Exposure.
15.2 Provision of additional security; prepayment
If the Agent serves a notice on the Borrowers under Clause 15.1, the Borrowers shall prepay such part at least of the Loan as will eliminate the shortfall on or before the date falling 21 Business Days after the date on which the Agent's notice is served under Clause 15.1 notifying the amount of the shortfall (the " Prepayment Date ") unless at least 1 Business Day before the Prepayment Date the Borrowers have provided, or ensured that a third party has provided, additional security is acceptable to the Agent (acting on the instructions of the Majority Lenders) and which, in the opinion of the Majority Lenders, has a net realisable
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value at least equal to the shortfall and is documented in such terms as the Agent may, with the authorisation of the Majority Lenders, approve or require.
15.3 Valuation of Ships
For the purposes of Clause 15.1 and Clause 12.3 (b) (ii) ( Negative Undertakings ), the Market Value of a Mortgaged Ship at any date is that shown by taking the arithmetic means of two valuations to be issued by 2 Approved Brokers, selected and appointed by the Agent, each valuation to be addressed to the Agent and prepared:
(a) as at a date not more than 14 Business days previously;
(b) with or without physical inspection of that Ship (as the Agent may require);
(c) on the basis of a sale for prompt delivery for cash on normal arm's length commercial terms as between a willing seller and a willing buyer, free of any existing charter or other contract of employment; and
(d) after deducting the estimated amount of the usual and reasonable expenses which would be incurred in connection with the sale,
Provided that if the difference between the 2 valuations obtained at any one time pursuant to this Clause 15.3 is greater than 15 per cent. a valuation shall be commissioned from a third Approved Broker appointed and nominated by the Agent. Such valuation shall be conducted in accordance with this Clause 15.3 and the Market Value of that Ship in such circumstances shall be the average of all three valuations.  If for whatever reason the Agent is not able to receive valuations in respect of a Ship at any relevant time, the Agent shall assess the Market Value of that Ship based on the set of valuations last received.
15.4 Value of additional vessel security
The net realisable value of any additional security which is provided under Clause 15.2 and which consists of a Security Interest over a vessel shall be that shown by a valuation complying with the requirements of Clause 15.3.
15.5 Valuations binding
Any valuation under Clause 15.2, 15.3 or 15.4 shall be binding and conclusive as regards the Borrowers, as shall be any valuation which the Majority Lenders make of any additional security which does not consist of or include a Security Interest.
15.6 Provision of information
The Borrowers shall promptly provide the Agent and any Approved Broker or expert acting under Clause 15.3 or 15.4 with any information which the Agent or that Approved Broker or expert may reasonably request for the purposes of the valuation; and, if the Borrowers fail to provide the information by the date specified in the request, the valuation may be made on any basis and assumptions which that Approved Broker or the Majority Lenders (or the expert appointed by them) consider prudent.
15.7 Payment of valuation expenses
Without prejudice to the generality of the Borrowers' obligations under Clauses 20.1, 20.3 and 21.4, the Borrowers shall, on demand, pay the Agent the amount of the fees and expenses of any Approved Broker or expert instructed by the Agent under this Clause in connection with up to one set of valuations for each Ship pursuant to Clause 15.3 (valuation of ships) during each half-year period and all legal and other expenses incurred by any Creditor Party in connection with any matter arising out of this Clause, unless an Event of Default has occurred and is continuing in which case the Borrowers shall pay the Agent all
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such fees and expenses incurred in connection with the delivery to the Agent of as many valuations as it may require.
15.8 Frequency of valuations
The Borrowers acknowledge and agree that the Agent may request the Borrower to commission valuation(s) of either Ship at such times as the Lender shall deem necessary and, in any event, not less than once during each 6-month period of the Security Period unless an Event of Default has occurred in which case the Agent may obtain as many valuations of the Ships as it thinks necessary and the Borrowers shall bear the cost in connection with any such valuations .
16 PAYMENTS AND CALCULATIONS
16.1 Currency and method of payments
All payments to be made by the Lenders or by either Borrower under a Finance Document shall be made to the Agent or to the Security Trustee, in the case of an amount payable to it:
(a) by not later than 11.00 a.m. (New York City time) on the due date;
(b) in same day Dollar funds settled through the New York Clearing House Interbank Payments System (or in such other Dollar funds and/or settled in such other manner as the Agent shall specify as being customary at the time for the settlement of international transactions of the type contemplated by this Agreement);
(c) in the case of an amount payable by a Lender to the Agent or by either Borrower to the Agent or any Lender, to the account of the Agent at JP Morgan Chase Bank, New York (SWIFT Code CHASUS33) (Account No. 001-1-331 808 in favour of HSH Nordbank AG, Hamburg, SWIFT Code HSHNDEHH; Reference "Sea Glorius Shipping Co. et al") or to such other account with such other bank as the Agent may from time to time notify to the Borrowers and the other Creditor Parties; and
(d) in the case of an amount payable to the Security Trustee, to such account as it may from time to time notify to the Borrowers and the other Creditor Parties.
16.2 Payment on non-Business Day
If any payment by either Borrower under a Finance Document would otherwise fall due on a day which is not a Business Day:
(a) the due date shall be extended to the next succeeding Business Day; or
(b) if the next succeeding Business Day falls in the next calendar month, the due date shall be brought forward to the immediately preceding Business Day, and interest shall be payable during any extension under paragraph (a) at the rate payable on the original due date.
16.3 Basis for calculation of periodic payments
All interest and any other payments under any Finance Document which are of an annual or periodic nature shall accrue from day to day and shall be calculated on the basis of the actual number of days elapsed and a 360 day year.
16.4 Distribution of payments to Creditor Parties
Subject to Clauses 16.5, 16.6 and 16.7:
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(a) any amount received by the Agent under a Finance Document for distribution or remittance to a Lender, the Swap Bank or the Security Trustee shall be made available by the Agent to that Lender, the Swap Bank or, as the case may be, the Security Trustee by payment, with funds having the same value as the funds received, to such account as the Lender, the Swap Bank or the Security Trustee may have notified to the Agent not less than 5 Business Days previously; and
(b) amounts to be applied in satisfying amounts of a particular category which are due to the Lenders and/or the Swap Bank generally shall be distributed by the Agent to each Lender and the Swap Bank pro rata to the amount in that category which is due to it.
16.5 Permitted deductions by Agent
Notwithstanding any other provision of this Agreement or any other Finance Document, the Agent may:
(a) before making an amount available to a Lender or the Swap Bank, deduct and withhold from that amount any sum which is then due and payable to the Agent from that Lender or the Swap Bank under any Finance Document or any sum which the Agent is then entitled under any Finance Document to require that Lender or the Swap Bank to pay on demand; and
(b) (but not be obliged) from time to time to apply any balance standing to the credit of any Earnings Account in accordance and for the purposes set out in Clause 25.
16.6 Agent only obliged to pay when monies received
Notwithstanding any other provision of this Agreement or any other Finance Document, the Agent shall not be obliged to make available to either Borrower or any Lender or the Swap Bank any sum which the Agent is expecting to receive for remittance or distribution to that Borrower or that Lender or the Swap Bank until the Agent has satisfied itself that it has received that sum.
16.7 Refund to Agent of monies not received
If and to the extent that the Agent makes available a sum to a Borrower or a Lender or the Swap Bank, without first having received that sum, that Borrower or (as the case may be) the Lender or the Swap Bank concerned shall, on demand:
(a) refund the sum in full to the Agent; and
(b) pay to the Agent the amount (as certified by the Agent) which will indemnify the Agent against any funding or other loss, liability or expense incurred by the Agent as a result of making the sum available before receiving it.
16.8 Agent may assume receipt
Clause 16.7 shall not affect any claim which the Agent has under the law of restitution, and applies irrespective of whether the Agent had any form of notice that it had not received the sum which it made available.
16.9 Creditor Party accounts
Each Creditor Party shall maintain accounts showing the amounts owing to it by the Borrowers and each Security Party under the Finance Documents and all payments in respect of those amounts made by the Borrowers and any Security Party.
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16.10 Agent's memorandum account
The Agent shall maintain a memorandum account showing the amounts advanced by the Lenders and all other sums owing to the Agent, the Security Trustee and each Lender from the Borrowers and each Security Party under the Finance Documents and all payments in respect of those amounts made by the Borrowers and any Security Party.
16.11 Accounts prima facie evidence
If any accounts maintained under Clauses 16.9 and 16.10 show an amount to be owing by a Borrower or a Security Party to a Creditor Party, those accounts shall be prima facie evidence that that amount is owing to that Creditor Party.
17 APPLICATION OF RECEIPTS
17.1 Normal order of application
Except as any Finance Document may otherwise provide, any sums which are received or recovered by any Creditor Party under or by virtue of any Finance Document shall be applied:
(a) FIRST: in or towards satisfaction of any amounts then due and payable under the Finance Documents (other than under the Master Agreement) in the following order and proportions:
(i) first, in or towards satisfaction pro rata of all amounts then due and payable to the Creditor Parties under the Finance Documents (other than a Master Agreement) other than those amounts referred to at paragraphs (a)(ii) and (a)(iii) (including, but without limitation, all amounts payable by the Borrowers under Clauses 20, 21 and 22 of this Agreement or by the Borrowers or any Security Party under any corresponding or similar provision in any other Finance Document (other than the Master Agreement);
(ii) secondly, in or towards satisfaction pro rata of any and all amounts of interest or default interest payable to the Creditor Parties under the Finance Documents (other than under the Master Agreement); and
(iii) thirdly, in or towards satisfaction of the Loan;
(b) SECONDLY:  in or towards satisfaction of any amounts then due and payable under the Master Agreement in the following order and proportions:
(i) first, in or towards satisfaction of all amounts then due and payable to the Swap Bank under the Master Agreement other than those amounts referred to at paragraphs (b)(ii) and (b)(iii);
(ii) secondly, in or towards satisfaction of any and all amounts of interest or default interest payable to the Swap Bank under the Master Agreement (and, for this purpose, the expression " interest " shall include any net amount which the Borrowers shall have become liable to pay or deliver under section 2(e) (Obligations) of the Master Agreement but shall have failed to pay or deliver to the Swap Bank at the time of application or distribution under this Clause 17); and
(iii) thirdly, in or towards satisfaction of the aggregate Swap Exposure (calculated as at the actual Early Termination Date applying to each particular Designated Transaction entered into under the Master Agreement, or if no such Early Termination Date shall have occurred, calculated as if an Early Termination Date occurred on the date of application or distribution hereunder and pro rata as between them);
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(c) THIRDLY: in retention of an amount equal to any amount not then due and payable under any Finance Document (other than the Master Agreement) but which the Agent, by notice to the Borrowers, the Security Parties and the other Creditor Parties, states in its opinion will or may become due and payable in the future and, upon those amounts becoming due and payable, in or towards satisfaction of them in accordance with the foregoing provisions of this Clause 17;
(d) FOURTHLY: in retention of an amount equal to any amount not then due under and payable under the Master Agreement but which the Swap Bank, by notice to the Borrowers, the Security Parties and the other Creditor Parties, states in its opinion will or may become due and payable in the future and, upon those amounts becoming due and payable, in or towards satisfaction of them in accordance with the foregoing provisions of this Clause 17; and
(e) FIFTHLY: any surplus shall be paid to the Borrowers or to any other person appearing to be entitled to it.
17.2 Variation of order of application
The Agent may, with the authorisation of the Majority Lenders and the Swap Bank, by notice to the Borrowers, the Security Parties and the other Creditor Parties provide for a different manner of application from that set out in Clause 17.1 either as regards a specified sum or sums or as regards sums in a specified category or categories.
17.3 Notice of variation of order of application
The Agent may give notices under Clause 17.2 from time to time; and such a notice may be stated to apply not only to sums which may be received or recovered in the future, but also to any sum which has been received or recovered on or after the third Business Day before the date on which the notice is served.
17.4 Appropriation rights overridden
This Clause 17 and any notice which the Agent gives under Clause 17.2 shall override any right of appropriation possessed, and any appropriation made, by either Borrower or any Security Party.
18 APPLICATION OF EARNINGS; SWAP PAYMENTS
18.1 Payment of Earnings and swap payments
Each Borrower undertakes with each Creditor Party to ensure that, throughout the Security Period (and subject only to the provisions of the General Assignment to which it is a party):
(a) it shall maintain the Earnings Accounts with the Agent; and
(b) all Earnings of the Ship owned by it are paid to the Earnings Account for that Ship.
18.2 Application of Earnings
Until an Event of Default which is continuing occurs, the Agent shall on each Repayment Date and on each due date for the payment of interest under this Agreement distribute to the Lenders in accordance with Clause 16.4 so much of the then balance on the Earnings Accounts' (or either of them) as equals:
(a) the Instalment due on that Repayment Date pursuant to Clause 8.1; or
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(b) the amount of interest in respect of the Loan payable on that interest payment date,
in discharge of the Borrowers' liability for that Instalment or that interest.
18.3 Location of Earnings Accounts
Each Borrower shall promptly:
(a) comply with any requirement of the Agent as to the location or re-location of its Earnings Account; and
(b) execute any documents which the Agent specifies to create or maintain in favour of the Security Trustee a Security Interest over (and/or rights of set-off, consolidation or other rights in relation to) it Earnings Account .
18.4 Debits for fees, expenses etc.
The Agent shall be entitled (but not obliged) from time to time to debit any Earnings Account without prior notice in order to discharge any amount due and payable under Clauses 20 or 21 to a Creditor Party or payment of which any Creditor Party has become entitled to demand under Clauses 20 or 21.
18.5 Borrowers' obligations unaffected
The provisions of this Clause 18 (as distinct from a distribution effected under Clause 18.2) do not affect:
(a) the liability of the Borrowers to make payments of principal and interest on the due dates; or
(b) any other liability or obligation of the Borrowers or any Security Party under any Finance Document.
18.6 Restriction on withdrawal
The Borrowers may, in any calendar month, withdraw any balance from the Earnings Accounts as it may think fit (including, without limitation, for the purpose of making any payments in connection with the operation and maintenance of a Ship and for all other purposes permitted in accordance with this Agreement and the other Finance Documents) Provided always :
(a) such withdrawal is permitted under the Finance Documents; and
(b) no Event of Default has occurred and is continuing or would result from such withdrawal. Following the occurrence of an Event Default which is continuing all amounts shall remain in the Earnings Accounts and the Borrowers may only withdraw any balance with the prior written consent of the Agent (acting upon the instructions of the Majority Lenders) in order to satisfy the documented and properly incurred operating expenses of a Ship .
19 EVENTS OF DEFAULT
19.1 Events of Default
An Event of Default occurs if:
(a) either Borrower or the Corporate Guarantor fails to pay when due or (if so payable) on demand, within 5 Business Days of the due date of such payment, any sum payable under a Finance Document or under any document relating to a Finance Document; or
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(b) any breach occurs of Clause 2.3, 8.9(c), 9.2, 11.2, 11.3, 11.17, 12.2, 12.3, 13.2, 15.2 or 18.1 or clause 11.16 (financial covenants) of the Corporate Guarantee); or
(c) any breach by either Borrower or any Security Party occurs of any provision of a Finance Document (other than a breach covered by paragraphs (a) or (b)) which, in the opinion of the Majority Lenders, is capable of remedy, and such default continues unremedied 15 Business Days (or any other applicable grace period agreed by the Agent) after written notice from the Agent requesting action to remedy the same; or
(d) (subject to any applicable grace period specified in the Finance Document) any breach by either Borrower or any Security Party occurs of any provision of a Finance Document (other than a breach falling within paragraphs (a), (b) or (c)); or
(e) any representation, warranty or statement made or repeated by, or by an officer of, a Borrower or a Security Party in a Finance Document or in a Drawdown Notice or any other notice or document relating to a Finance Document is untrue or misleading when it is made or repeated; or
(f) any of the following occurs in relation to any Financial Indebtedness of a Relevant Person:
(i) any Financial Indebtedness of a Relevant Person is not paid when due or, if so payable, on demand; or
(ii) any Financial Indebtedness of a Relevant Person becomes due and payable or capable of being declared due and payable prior to its stated maturity date as a consequence of any event of default (howsoever described); or
(iii) any creditor of the Corporate Guarantor becomes entitled to declare any Financial Indebtedness of the Corporate Guarantor in excess of $500,000, due and payable prior to its stated maturity date as a consequence of an event of default (howsoever described); or
(iv) a lease, hire purchase agreement or charter creating any Financial Indebtedness of a Relevant Person is terminated by the lessor or owner or becomes capable of being terminated as a consequence of any termination event; or
(v) any overdraft, loan, note issuance, acceptance credit, letter of credit, guarantee, foreign exchange or other facility, or any swap or other derivative contract or transaction, relating to any Financial Indebtedness of a Relevant Person ceases to be available or becomes capable of being terminated as a result of any event of default, or cash cover is required, or becomes capable of being required, in respect of such a facility as a result of any event of default; or
(vi) any Security Interest securing any Financial Indebtedness of a Relevant Person becomes enforceable; or
(g) any of the following occurs in relation to a Relevant Person:
(i) a Relevant Person becomes, in the opinion of the Majority Lenders, unable to pay its debts as they fall due; or
(ii) any assets of a Relevant Person are subject to any form of execution, attachment, arrest, sequestration or distress or any form of freezing order, which in the case of Relevant Person other than a Borrower is in respect of a sum of, or sums aggregating $500,000 or more or the equivalent in any other currency; or
(iii) any administrative or other receiver is appointed over any asset of a Relevant Person, unless the relevant Person is actively taking action to remove such

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administrative or other receiver and this is achieved within 7 days of its appointment; or
(iv) an administrator is appointed (whether by the court or otherwise) in respect of a Relevant Person unless the relevant Person is actively taking action to remove such administrator and this is achieved within 7 days of its appointment; or
(v) any formal declaration of bankruptcy or any formal statement to the effect that a Relevant Person is insolvent or likely to become insolvent is made by a Relevant Person or by the directors of a Relevant Person or, in any proceedings, by a lawyer acting for a Relevant Person; or
(vi) a provisional liquidator is appointed in respect of a Relevant Person, a winding up order is made in relation to a Relevant Person (unless the relevant Person is actively taking action to remove such provisional liquidator or winding up order and this is achieved within 7 days of its appointment or of the date of the winding up order) or a winding up resolution is passed by a Relevant Person; or
(vii) a resolution is passed, an administration notice is given or filed, an application or petition to a court is made or presented or any other step is taken by (aa) a Relevant Person, (bb) the members or directors of a Relevant Person, (cc) a holder of Security Interests which together relate to all or substantially all of the assets of a Relevant Person, or (dd) a government minister or public or regulatory authority of a Pertinent Jurisdiction for or with a view to the winding up of that or another Relevant Person or the appointment of a provisional liquidator or administrator in respect of that or another Relevant Person, or that or another Relevant Person ceasing or suspending business operations or payments to creditors, unless in the case of (cc) or (dd) either (1) the application or petition is dismissed or withdrawn within 14 days of being made or presented, or (2) within 14 days of the administration notice being given or filed, or the other relevant steps being taken, other action is taken which will ensure that there will be no administration and (in both cases (1) and (2)) the Relevant Person will continue to carry on business int he ordinary way and without being the subject of any actual, interim or pending insolvency law procedure) save that this paragraph does not apply to a fully solvent winding up of a Relevant Person other than a Borrower or the Corporate Guarantor which is, or is to be, effected for the purposes of an amalgamation or reconstruction previously approved by the Majority Lenders and effected not later than 3 months after the commencement of the winding up; or
(viii) an administration notice is given or filed, an application or petition to a court is made or presented or any other step is taken by a creditor of a Relevant Person (other than a holder of Security Interests which together relate to all or substantially all of the assets of a Relevant Person) for the winding up of a Relevant Person or the appointment of a provisional liquidator or administrator in respect of a Relevant Person in any Pertinent Jurisdiction, unless the proposed winding up, appointment of a provisional liquidator or administration is being contested in good faith, on substantial grounds and not with a view to some other insolvency law procedure being implemented instead and either (aa) the application or petition is dismissed or withdrawn within 30 days of being made or presented, or (bb) within 30 days of the administration notice being given or filed, or the other relevant steps being taken, other action is taken which will ensure that there will be no administration and (in both cases (aa) or (bb)) the Relevant Person will continue to carry on business in the ordinary way and without being the subject of any actual, interim or pending insolvency law procedure; or
(ix) a Relevant Person or its directors take any steps (whether by making or presenting an application or petition to a court, or submitting or presenting a document setting out a proposal or proposed terms, or otherwise) with a view to obtaining, in relation to that or another Relevant Person, any form of moratorium, suspension or deferral
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of payments, reorganisation of debt (or certain debt) or arrangement with all or a substantial proportion (by number or value) of creditors or of any class of them or any such moratorium, suspension or deferral of payments, reorganisation or arrangement is effected by court order, by the filing of documents with a court, by means of a contract or in any other way at all; or
(x) any meeting of the members or directors, or of any committee of the board or senior management, of a Relevant Person is held or summoned for the purpose of considering a resolution or proposal to authorise or take any action of a type described in paragraphs (iv) to (ix) or a step preparatory to such action, or (with or without such a meeting) the members, directors or such a committee resolve or agree that such an action or step should be taken or should be taken if certain conditions materialise or fail to materialise; or
(xi) in a country other than England, any event occurs, any proceedings are opened or commenced or any step is taken which, in the opinion of the Majority Lenders is similar to any of the foregoing; or
(h) either Borrower or any Security Party ceases or suspends carrying on its business or a part of its business which, in the opinion of the Majority Lenders, is material in the context of this Agreement; or
(i) it becomes unlawful in any Pertinent Jurisdiction or impossible:
(i) for either Borrower, the Corporate Guarantor or any other Security Party to discharge any liability under a Finance Document or to comply with any other obligation which the Majority Lenders consider material under a Finance Document; or
(ii) for the Agent, the Security Trustee, the Lenders or the Swap Bank to exercise or enforce any right under, or to enforce any Security Interest created by, a Finance Document; or
(j) any official consent necessary to enable either Borrower to own, operate or charter its Ship or to enable either Borrower or any Security Party to comply with any provision which the Majority Lenders consider material of a Finance Document or an Underlying Document is not granted, expires without being renewed, is revoked or becomes liable to revocation or any condition of such a consent is not fulfilled;
(k) it appears to the Majority Lenders that, without their prior consent, (i) a change has occurred or probably has occurred after the date of this Agreement in the direct or indirect legal or beneficial ownership of any of the shares in either Borrower or any other Security Party (other than the Corporate Guarantor) or in the control of the voting rights attaching to any of those shares or (ii) there is a change in control of the Corporate Guarantor;
(l) any provision which the Majority Lenders consider material of a Finance Document proves to have been or becomes invalid or unenforceable, or a Security Interest created by a Finance Document proves to have been or becomes invalid or unenforceable or such a Security Interest proves to have ranked after, or loses its priority to, another Security Interest or any other third party claim or interest (other than a Permitted Encumbrance); or
(m) the security constituted by a Finance Document is in any way imperilled or in jeopardy; or
(n) any of the following occurs in relation to the Master Agreement:
(i) notice of an Early Termination Date is given by the Lender under Section 6(a) of the Master Agreement; or
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(ii) a person entitled to do so gives notice of Early Termination Date under Section 6(b) of the Master Agreement; or
(iii) an Event of Default which is continuing (as defined in Section 5 of the Master Agreement) occurs; or
(iv) the Master Agreement is terminated, cancelled, suspended, rescinded or revoked or otherwise ceases to remain in full force and effect for any reason except with the consent of the Lender; or
(o) any other event occurs or any other circumstances arise or develop including, without limitation:
(i) a change in the financial position, state of affairs or prospects of either Borrower, the Corporate Guarantor, any other Security Party; or
(ii) the commencement of legal or administrative action involving a Borrower, a Ship or any Security Party; or
(iii) the withdrawal of any material license or governmental or regulatory approval in respect of a Ship, a Borrower or either Borrower's business (unless such withdrawal can be contested with the effect of suspension and is in fact so contested in good faith by the Borrowers),
which constitutes a Material Adverse Change.
19.2 Actions following an Event of Default
On, or at any time after, the occurrence of an Event of Default:
(a) the Agent may, and if so instructed by the Majority Lenders, the Agent shall:
(i) serve on the Borrowers a notice stating that the Commitments and all other obligations of each Lender to the Borrowers under this Agreement are cancelled; and/or
(ii) serve on the Borrowers a notice stating that the Loan or any part thereof, all or any accrued interest and all or any other amounts accrued or owing under this Agreement are immediately due and payable or are due and payable on demand; and/or
(iii) take any other action which, as a result of the Event of Default or any notice served under paragraph (i) or (ii), the Agent and/or the Lenders are entitled to take under any Finance Document or any applicable law; and/or
(b) the Security Trustee may, and if so instructed by the Agent, acting with the authorisation of the Majority Lenders, the Security Trustee shall take any action which, as a result of the Event of Default or any notice served under paragraph (a)(i) or (a)(ii), the Security Trustee, the Agent, the Mandated Lead Arranger and/or the Lenders and/or the Swap Bank are entitled to take under any Finance Document or any applicable law.
19.3 Termination of Commitments
On the service of a notice under Clause 19.2(a)(i), the Commitments and all other obligations of each Lender to the Borrowers under this Agreement shall be cancelled.
19.4 Acceleration of Loan
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On the service of a notice under Clause 19.2(a)(ii), the Loan, all accrued interest and all other amounts accrued or owing from the Borrowers or any Security Party under this Agreement and every other Finance Document shall become immediately due and payable or, as the case may be, payable on demand.
19.5 Multiple notices; action without notice
The Agent may serve notices under Clauses 19.2(a)(i) or 19.2(a)(ii) simultaneously or on different dates and it and/or the Security Trustee may take any action referred to in Clause 19.2 if no such notice is served or simultaneously with or at any time after the service of both or either of such notices.
19.6 Notification of Creditor Parties and Security Parties
The Agent shall send to each Lender, the Swap Bank, the Security Trustee and each Security Party a copy or the text of any notice which the Agent serves on the Borrowers under Clause 19.2; but the notice shall become effective when it is served on the Borrowers, and no failure or delay by the Agent to send a copy or the text of the notice to any other person shall invalidate the notice or provide either Borrower or any Security Party with any form of claim or defence.
19.7 Creditor Party's rights unimpaired
Nothing in this Clause shall be taken to impair or restrict the exercise of any right given to individual Lenders or the Swap Bank under a Finance Document or the general law; and, in particular, this Clause is without prejudice to Clause 3.1.
19.8 Exclusion of Creditor Party liability
No Creditor Party, and no receiver or manager appointed by the Security Trustee, shall have any liability to a Borrower or a Security Party:
(a) for any loss caused by an exercise of rights under, or enforcement of a Security Interest created by, a Finance Document or by any failure or delay to exercise such a right or to enforce such a Security Interest; or
(b) as mortgagee in possession or otherwise, for any income or principal amount which might have been produced by or realised from any asset comprised in such a Security Interest or for any reduction (however caused) in the value of such an asset,
except that this does not exempt a Creditor Party or a receiver or manager from liability for losses shown to have been directly and mainly caused by the dishonesty or the wilful misconduct of such Creditor Party's own officers and employees or (as the case may be) such receiver's or manager's own partners or employees.
19.9 Relevant Persons
In this Clause 19, a " Relevant Person " means a Borrower, the Corporate Guarantor and any Security Party.
19.10 Interpretation
In Clause 19.1(f) references to an event of default or a termination event include any event, howsoever described, which is similar to an event of default in a facility agreement or a termination event in a finance lease; and in Clause 19.1(g) " petition " includes an application.
19.11 Position of Swap Bank
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Neither the Agent nor the Security Trustee shall be obliged, in connection with any action taken or proposed to be taken under or pursuant to the foregoing provisions of this Clause 19, to have any regard to the requirements of the Swap Bank except to the extent that the Swap Bank is also a Lender.
20 FEES AND EXPENSES
20.1 Arrangement fee
The Borrowers shall pay to the Agent a non-refundable arrangement fee (for the Agent's own account) in the amount equal to $621,433.36 as follows:
(a) $246,433.36 of which was paid on 1 October 2014; and
(b) $375,000, to be paid on the earlier of (a) the date falling three months after the first Drawdown Date to occur under this Agreement and (b) 30 November 2015.
20.2 Costs of negotiation, preparation etc.
The Borrowers shall pay to the Agent on its demand the amount of all expenses incurred by the Agent or the Security Trustee in connection with the negotiation, preparation, execution, translation or registration of any Finance Document or any related document or with any transaction contemplated by a Finance Document or a related document.
20.3 Costs of variations, amendments, enforcement etc.
The Borrowers shall pay to the Agent, on the Agent's demand, for the account of the Creditor Party concerned, the amount of all expenses incurred by a Creditor Party in connection with:
(a) any amendment or supplement (or any proposal for such an amendment or supplement) requested (or, in the case of a proposal, made) by or on behalf of the Borrowers and relating to a Finance Document or any other Pertinent Document;
(b) any consent, waiver or suspension of rights by the Lenders, the Swap Bank, the Majority Lenders or the Creditor Party concerned or any proposal for any of the foregoing requested (or, in the case of a proposal, made) by or on behalf of the Borrowers under or in connection with a Finance Document or any other Pertinent Document;
(c) the valuation of any security provided or offered under Clause 15 or any other matter relating to such security; or
(d) any step taken by the Lender concerned or the Swap Bank with a view to the preservation, protection, exercise or enforcement of any rights or Security Interest created by a Finance Document or for any similar purpose including, without limitation, any proceedings to recover or retain proceeds of enforcement or any other proceedings following enforcement proceedings until the date all outstanding indebtedness to the Creditor Parties under the Finance Documents, the Master Agreement and any other Pertinent Document is repaid in full.
There shall be recoverable under paragraph (d) the full amount of all legal expenses, whether or not such as would be allowed under rules of court or any taxation or other procedure carried out under such rules.
20.4 Documentary taxes
The Borrowers shall promptly pay any tax payable on or by reference to any Finance Document, and shall, on the Agent's demand, fully indemnify each Creditor Party against any
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claims, expenses, liabilities and losses resulting from any failure or delay by the Borrowers to pay such a tax.
20.5 Certification of amounts
A notice which is signed by 2 officers of a Creditor Party, which states that a specified amount, or aggregate amount, is due to that Creditor Party under this Clause 20 and which indicates (without necessarily specifying a detailed breakdown) the matters in respect of which the amount, or aggregate amount, is due shall be prima facie evidence that the amount, or aggregate amount, is due.
20.6 Extraordinary management time
The Borrowers shall pay to the Agent on its demand compensation in respect of the reasonable and documented amount of time which the management of either Servicing Bank has spent in connection with a matter covered by Clause 20.3 and which exceeds the amount of time which would ordinarily and reasonably be spent in the performance of the relevant Servicing Bank's routine functions.  Any such compensation shall be based on such reasonable daily or hourly rates as the Agent may notify to the Borrowers and is in addition to any fee paid or payable to the relevant Servicing Bank. The Agent will as soon as reasonably practicable notify the Borrower in writing of any extraordinary management time which the Servicing Bank is envisaging to spend and will deliver a budget forecasting the cost relating to such extraordinary management time.
21 INDEMINITIES
21.1 Indemnities regarding borrowing and repayment of Loan
The Borrowers shall fully indemnify the Agent and each Lender on the Agent's demand and the Security Trustee on its demand in respect of all claims, expenses, liabilities and losses which are made or brought against or incurred by that Creditor Party, or which that Creditor Party reasonably and with due diligence estimates that it will incur, as a result of or in connection with:
(a) an Advance not being borrowed on the date specified in the relevant Drawdown Notice for any reason other than a default by the Lender claiming the indemnity after that Drawdown Notice has been served in accordance with the provisions of this Agreement;
(b) the receipt or recovery of all or any part of the Loan or an overdue sum otherwise than on the last day of an Interest Period or other relevant period;
(c) any failure (for whatever reason) by the Borrowers (or any of them) to make payment of any amount due under a Finance Document on the due date or, if so payable, on demand (after giving credit for any default interest paid by the Borrowers on the amount concerned under Clause 7); and
(d) the occurrence and/or continuance of an Event of Default and/or the acceleration of repayment of the Loan under Clause 19 (including, without limitation, any costs, expenses or liabilities incurred by a Creditor Party in relation to any Insurances taken or arranged by that Creditor Party following the occurrence of an Event of Default in relation to port risks, crew liability insurance or any other type of insurance), and in respect of any tax (other than tax on its overall net income) for which a Creditor Party is liable in connection with any amount paid or payable to that Creditor Party (whether for its own account or otherwise) under any Finance Document.
21.2 Break Costs
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If a Lender (the " Notifying Lender ") notifies the Agent that as a consequence of receipt or recovery of all or any part of the Loan (a " Payment ") on a day other than the last day of an Interest Period applicable to the sum received or recovered the Notifying Lender has or will, with effect from a specified date, incur Break Costs:
(a) the Agent shall promptly notify the Borrowers of a notice it receives from a Notifying Lender under this Clause 21.2;
(b) the Borrowers shall, within 3 Business Days of the Agent's demand, pay to the Agent for the account of the Notifying Lender the amount of such Break Costs; and
(c) the Notifying Lender shall, as soon as reasonably practicable, following a request by the Borrowers, provide a certificate confirming the amount of the Notifying Lender's Break Costs for the Interest Period in which they accrue, such certificate to be, in the absence of manifest error, conclusive and binding on the Borrowers.
In this Clause 21.2, " Break Costs " means, in relation to a Payment the amount (if any) by which:
(i) the interest which the Notifying Lender, should have received in respect of the sum received or recovered from the date of receipt or recovery of such Payment to the last day of the then current Interest Period applicable to the sum received or recovered had such Payment been made on the last day of such Interest Period;
exceeds
(ii) the amount which the Notifying Lender, would be able to obtain by placing an amount equal to such Payment on deposit with a leading bank in the London Interbank Market for a period commencing on the Business Day following receipt or recovery of such Payment (as the case may be) and ending on the last day of the then current Interest Period applicable to the sum received or recovered.
21.3 Other breakage costs
Without limiting its generality, Clause 21.1 covers any claim, expense, liability or loss, including (without limitation) (i) a loss of a prospective profit, incurred by a Lender in borrowing, liquidating or re-employing deposits from third parties acquired, contracted for or arranged to fund, effect or maintain all or any part of its Contribution and/or any overdue amount (or an aggregate amount which includes its Contribution or any overdue amount) other than claims, expenses, liabilities and losses which are shown to have been directly and mainly caused by the gross negligence or wilful misconduct of the officers or employees of the Creditor Party concerned and (ii) any applicable legal fees.
21.4 Miscellaneous indemnities
The Borrowers shall fully indemnify each Creditor Party severally on their respective demands, without prejudice to any of their other rights under any of the Finance Documents, in respect of all claims, expenses, liabilities and losses which may be made or brought against or sustained or incurred by a Creditor Party, in any country, as a result of or in connection with:
(a) any action taken, or omitted or neglected to be taken, under or in connection with any Finance Document by the Agent, the Security Trustee or any other Creditor Party or by any receiver appointed under a Finance Document;
(b) investigating any event which the Creditor Party concerned reasonably believes constitutes an Event of Default;
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(c) acting or relying on any notice, request or instruction which the Creditor Party concerned reasonably believes to be genuine, correct and appropriately authorised; or
(d) any other Pertinent Matter, other than claims, expenses, liabilities and losses which are shown to have been directly and mainly caused by the dishonesty, gross negligence or wilful misconduct of the officers or employees of the Creditor Party concerned.
21.5 Environmental and other indemnities
Without prejudice to its generality, Clauses 21.1 and 21.4 cover any claims, demands, proceedings, liabilities, taxes, losses, liabilities or expenses of every kind which arise, or are asserted, under or in connection with any law relating to safety at sea, the ISM Code , the ISPS Code or any Environmental Law.
21.6 Currency indemnity
If any sum due from a Borrower or any Security Party to a Creditor Party under a Finance Document or under any order, award or judgment relating to a Finance Document (a " Sum ") has to be converted from the currency in which the Finance Document provided for the Sum to be paid (the " Contractual Currency ") into another currency (the " Payment Currency ") for the purpose of:
(a) making, filing or lodging any claim or proof against a Borrower or any Security Party, whether in its liquidation, any arrangement involving it or otherwise; or
(b) obtaining an order, judgment or award from any court or other tribunal in relation to any litigation or arbitration proceedings; or
(c) enforcing any such order, judgment or award,
the Borrowers shall as an independent obligation, within 3 Business Days of demand, indemnify the Creditor Party to whom that Sum is due against any cost, loss or liability arising when the payment actually received by that Creditor Party is converted at the available rate of exchange back into the Contractual Currency including any discrepancy between (A) the rate of exchange actually used to convert the Sum from the Payment Currency into the Contractual Currency and (B) the available rate of exchange.
In this Clause 21.6, the " available rate of exchange " means the rate at which the Creditor Party concerned is able at the opening of business (London time) on the Business Day after it receives the Sum to purchase the Contractual Currency with the Payment Currency.
Each Borrower waives any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency other than that in which it is expressed to be payable.
If any Creditor Party receives any Sum in a currency other than the Contractual Currency, the Borrowers shall indemnify in full the Creditor Party concerned against any cost, loss or liability arising directly or indirectly from any conversion of such Sum to the Contractual Currency.
This Clause 21.6 creates a separate liability of that Borrower which is distinct from its other liabilities under the Finance Documents and which shall not be merged in any judgment or order relating to those other liabilities.
21.7 Application to Master Agreement
For the avoidance of doubt, Clause 21.6 does not apply in respect of sums due from the Borrowers to the Swap Bank under or in connection with the Master Agreement as to which
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sums the provisions of section 8 (Contractual Currency) of the Master Agreement shall apply.
21.8 Certification of amounts
A notice which is signed by 2 officers of a Creditor Party, which states that a specified amount, or aggregate amount, is due to that Creditor Party under this Clause 21 and which indicates (without necessarily specifying a detailed breakdown) the matters in respect of which the amount, or aggregate amount, is due shall be prima facie evidence (in the absence of manifest error) that the amount, or aggregate amount, is due.
21.9 Sums deemed due to a Lender
For the purposes of this Clause 21, a sum payable by the Borrowers to the Agent or the Security Trustee for distribution to a Lender shall be treated as a sum due to that Lender.
22 NO SET-OFF OR TAX DEDUCTION
22.1 No deductions
All amounts due from the Borrowers under a Finance Document shall be paid:
(a) without any form of set off, counter-claim or condition; and
(b) free and clear of any tax deduction except a tax deduction which a Borrower is required by law to make.
22.2 Grossing-up for taxes
If, at any time, a Borrower is required by law, regulation or regulatory requirement to make a tax deduction from any payment due under a Finance Document:
(a) that Borrower shall notify the Agent as soon as it becomes aware of the requirement;
(b) the amount due in respect of the payment shall be increased by the amount necessary to ensure that, after the making of such tax deduction, each Creditor Party receives on the due date for such payment (and retains free from any liability relating to the tax deduction) a net amount which is equal to the full amount which it would have received had no such tax deduction been required to be made; and
(c) that Borrower shall pay the full amount of the tax required to be deducted to the appropriate taxation authority promptly in accordance with the relevant law, regulation or regulatory requirement, and in any event before any fine or penalty arises..
22.3 Indemnity and evidence of payment of taxes
The Borrowers shall fully indemnify each Creditor Party on the Agent's demand in respect of all claims, expenses, liabilities and losses incurred by any Creditor Party by reason of any failure of the Borrowers (or any of them) to make any tax deduction or by reason of any increased payment not being made on the due date for such payment in accordance with Clause 22.2.  Within 30 days after making any tax deduction, the Borrowers or, as the case may be, the relevant Borrower shall deliver to the Agent any receipts, certificates or other documentary evidence satisfactory to the Agent that the tax had been paid to the appropriate taxation authority.
22.4              Tax Credits
A Creditor Party which receives for its own account a repayment or credit in respect of tax on account of which a Borrower has made an increased payment under Clause 22.2 shall pay
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to that Borrower a sum equal to the proportion of the repayment or credit which that Creditor Party allocates to the amount due from that Borrower in respect of which that Borrower made the increased payment, provided that:
(a) the Creditor Party has obtained and utilised that Tax Credit;
(b) the Creditor Party shall not be obliged to allocate to this transaction any part of a tax repayment or credit which is referable to a class or number of transactions;
(c) nothing in this Clause 22.4 shall oblige a Creditor Party to arrange its tax affairs in any particular manner, to claim any type of relief, credit, allowance or deduction instead of, or in priority to, another or to make any such claim within any particular time;
(d) nothing in this Clause 22.4 shall oblige a Creditor Party to make a payment which would leave it in a worse position than it would have been in if that Borrower had not been required to make a tax deduction from a payment; and
any allocation or determination reasonably made by a Creditor Party under or in connection with this Clause 22.4 shall be conclusive and binding on that Borrower and the other Creditor Parties.
22.5 Exclusion of tax on overall net income
In this Clause 22 " tax deduction " means any deduction or withholding from any payment due under a Finance Document for or on account of any present or future tax except tax on a Creditor Party's overall net income.
22.6 Application to Master Agreement
For the avoidance of doubt, Clause 22 does not apply in respect of sums due from the Borrowers to the Swap Bank under or in connection with the Master Agreement as to which sums the provisions of section 2(d) (Deduction or Withholding for Tax) of the Master Agreement shall apply.
23 ILLEGALITY, ETC
23.1 Illegality
This Clause 23 applies if a Lender (the " Notifying Lender ") notifies the Agent that it has become, or will with effect from a specified date, become:
(a) unlawful or prohibited as a result of the introduction of a new law, an amendment to an existing law or a change in the manner in which an existing law is or will be interpreted or applied; or
(b) contrary to, or inconsistent with, any regulation, for the Notifying Lender to perform, maintain or give effect to any of its obligations under this Agreement in the manner contemplated by this Agreement or to fund or maintain the Loan.
23.2 Notification of illegality
The Agent shall promptly notify the Borrowers, the Security Parties, the Security Trustee and the other Lenders of the notice under Clause 23.1 which the Agent receives from the Notifying Lender.
23.3 Prepayment; termination of Commitment
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On the Agent notifying the Borrowers under Clause 23.2, the Notifying Lender's Commitment shall be immediately cancelled; and thereupon or, if later, on the date specified in the Notifying Lender's notice under Clause 23.1 as the date on which the notified event would become effective the Borrowers shall prepay the Notifying Lender's Contribution on the last day of the then current Interest Period in accordance with Clauses 8.10 and 8.11(a).
24 INCREASED COSTS
24.1 Increased costs
This Clause 24 applies if a Lender (the " Notifying Lender ") notifies the Agent that the Notifying Lender considers in his opinion (acting reasonably) that as a result of:
(a) the introduction or alteration after the date of this Agreement of a law or an alteration after the date of this Agreement in the manner in which a law is interpreted or applied (disregarding any effect which relates to the application to payments under this Agreement of a tax on the Lender's overall net income); or
(b) complying with any regulation (including any which relates to capital adequacy or liquidity controls or which affects the manner in which the Notifying Lender allocates capital resources to its obligations under this Agreement) which is introduced, or altered, or the interpretation or application of which is altered, after the date of this Agreement; or
(c) the implementation or application of or compliance with the "International Convergence of Capital Measurement and Capital Standards, a Revised Framework" published by the Basel Committee on Banking Supervision in June 2004 in the form existing on the date of this Agreement (the " Basel II Accord ") or any other law or regulation implementing the Basel II Accord or any of the approaches provided for and allowed to be used by banks under or in connection with the Basel II Accord, in each case when compared to the cost of complying with such regulations as determined by the Agent (or parent company of it) on the date of this Agreement (whether such implementation, application or compliance is by a government, regulator, supervisory authority, the Notifying Lender or its holding company); or
(d) the implementation or application of or compliance with Basel III or any law or regulation which implements or applies Basel III (regardless of the date on which it is enacted, adopted or issued and regardless of whether any such implementation, application or compliance is by a government, regulator, the Notifying Lender or any of its affiliates) is that the Notifying Lender (or a parent company of it), the Notifying Lender (or a parent company of it) has incurred or will incur an " increased cost ".
24.2 Meaning of "increased cost"
In this Clause 24, " increased cost " means, in relation to a Notifying Lender:
(a) an additional or increased cost incurred as a result of, or in connection with, the Notifying Lender having entered into, or being a party to, this Agreement or a Transfer Certificate, of funding or maintaining its Commitment or Contribution or performing its obligations under this Agreement, or of having outstanding all or any part of its Contribution or other unpaid sums;
(b) a reduction in the amount of any payment to the Notifying Lender under this Agreement or in the effective return which such a payment represents to the Notifying Lender or on its capital;
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(c) an additional or increased cost of funding all or maintaining all or any of the advances comprised in a class of advances formed by or including the Notifying Lender's Contribution or (as the case may require) the proportion of that cost attributable to the Contribution; or
(d) a liability to make a payment, or a return foregone, which is calculated by reference to any amounts received or receivable by the Notifying Lender under this Agreement, but not an item attributable to a change in the rate of tax on the overall net income of the Notifying Lender (or a parent company of it) or an item covered by the indemnity for tax in Clause 21.1 or by Clause 22.
For the purposes of this Clause 24.2 the Notifying Lender may in good faith allocate or spread costs and/or losses among its assets and liabilities (or any class of its assets and liabilities) on such basis as it considers appropriate.
24.3 Notification to Borrowers of claim for increased costs
The Agent shall promptly notify the Borrowers and the Security Parties of the notice which the Agent received from the Notifying Lender under Clause 24.1.
24.4 Payment of increased costs
The Borrowers shall pay to the Agent, after the Agent's demand, for the account of the Notifying Lender the amounts which the Agent from time to time notifies the Borrowers that the Notifying Lender has specified to be necessary to compensate the Notifying Lender for the increased cost.
24.5 Notice of prepayment
If the Borrowers are not willing to continue to compensate the Notifying Lender for the increased cost under Clause 24.4, the Borrowers may give the Agent not less than 14 days' Prepayment Notice of their intention to prepay the Notifying Lender's Contribution at the end of an Interest Period.
24.6 Prepayment; termination of Commitment
A notice under Clause 24.5 shall be irrevocable; the Agent shall promptly notify the Notifying Lender of the Borrowers' notice of intended prepayment; and:
(a) on the date on which the Agent serves that notice, the Commitment of the Notifying Lender shall be cancelled; and
(b) on the date specified in its notice of intended prepayment, the Borrowers shall prepay (without premium or penalty) the Notifying Lender's Contribution, together with accrued interest thereon at the applicable rate plus the Margin and the Mandatory Cost (if any).
24.7 Application of prepayment
Clauses 8 shall apply in relation to a prepayment made pursuant to this Clause 24.
24.8 Mitigation
(a) If circumstances arise which would result in the Borrowers having to make an increased payment under Clause 24.1 (increased costs) to the Agent, then the Notifying Lender shall use reasonable endeavours to transfer its obligations, liabilities and rights under this Agreement and the Finance Documents to another office or financial institution not affected by the circumstances but the relevant Credit Party shall not be under any obligation to take any such action if, in its opinion, to do would or might:
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(i) have an adverse effect on its business, operations or financial condition; or
(ii) involve it in any activity which is unlawful or prohibited or any activity that is contrary to, or inconsistent with, any regulation; or
(iii) involve it in any expense (unless indemnified to its satisfaction) or tax disadvantage; and
(b) Paragraph (a) above does not in any way limit the obligations of the Borrowers under the Finance Documents.
25 SET-OFF
25.1 Application of credit balances
Each Creditor Party may without prior notice:
(a) apply any balance (whether or not then due) which at any time stands to the credit of any account in the name of a Borrower at any office in any country of that Creditor Party in or towards satisfaction of any sum then due from that Borrower to that Creditor Party under any of the Finance Documents; and
(b) for that purpose:
(i) break, or alter the maturity of, all or any part of a deposit of that Borrower;
(ii) convert or translate all or any part of a deposit or other credit balance into Dollars; and
(iii) enter into any other transaction or make any entry with regard to the credit balance which the Creditor Party concerned considers appropriate.
25.2 Existing rights unaffected
No Creditor Party shall be obliged to exercise any of its rights under Clause 25.1; and those rights shall be without prejudice and in addition to any right of set-off, combination of accounts, charge, lien or other right or remedy to which a Creditor Party is entitled (whether under the general law or any document).
25.3 Sums deemed due to a Lender
For the purposes of this Clause 25, a sum payable by the Borrowers to the Agent or the Security Trustee for distribution to, or for the account of, a Lender shall be treated as a sum due to that Lender; and each Lender's proportion of a sum so payable for distribution to, or for the account of, the Lenders shall be treated as a sum due to such Lender.
25.4 No Security Interest
This Clause 25 gives the Creditor Parties a contractual right of set-off only, and does not create any equitable charge or other Security Interest over any credit balance of either Borrower.
26 TRANSFERS AND CHANGES IN LENDING OFFICES
26.1 Transfer by Borrower
No Borrower may assign or transfer any of its rights, liabilities or obligations under any Finance Document.
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26.2 Transfer by a Lender
Subject to Clause 26.4, a Lender (the " Transferor Lender ") may at any time, without the prior consent of the Borrowers or any Security Party, but subject to notice to the Borrowers, cause:
(a) its rights in respect of all or part of its Contribution; or
(b) its obligations in respect of all or part of its Commitment; or
(c) a combination of (a) and (b); or
(d) all or part of its credit risk under this Agreement and the other Finance Documents,
to be syndicated to or, (in the case of its rights) assigned, pledged or transferred to, or (in the case of its obligations) pledged or assumed by, any other bank or financial institution which is under the supervision of a national or international regulatory agency (a " Transferee Lender ") by delivering to the Agent a completed certificate in the form set out in Schedule 6 with any modifications approved or required by the Agent (a " Transfer Certificate ") executed by the Transferor Lender and the Transferee Lender.
However any rights and obligations of the Transferor Lender in its capacity as Agent or Security Trustee will have to be dealt with separately in accordance with the Agency and Trust Agreement.
26.3 Transfer Certificate, delivery and notification
As soon as reasonably practicable after a Transfer Certificate is delivered to the Agent, it shall (unless it has reason to believe that the Transfer Certificate may be defective):
(a) sign the Transfer Certificate on behalf of itself, the Borrowers, the Security Parties, the Security Trustee and each of the other Lenders and the Swap Bank;
(b) on behalf of the Transferee Lender, send to each Borrower and each Security Party letters or faxes notifying them of the Transfer Certificate and attaching a copy of it; and
(c) send to the Transferee Lender copies of the letters or faxes sent under paragraph (b) above.
26.4 Effective Date of Transfer Certificate
A Transfer Certificate becomes effective on the date, if any, specified in the Transfer Certificate as its effective date, Provided that it is signed by the Agent under Clause 26.3 on or before that date.
26.5 No transfer without Transfer Certificate
Except as provided in Clause 26.17, no assignment or transfer of any right or obligation of a Lender under any Finance Document (other than the Master Agreement) is binding on, or effective in relation to, either Borrower, any Security Party, the Agent or the Security Trustee unless it is effected, evidenced or perfected by a Transfer Certificate.
26.6 Lender re-organisation; waiver of Transfer Certificate
However, if a Lender enters into any merger, de-merger or other reorganisation as a result of which all its rights or obligations vest in another person (the " successor "), the Agent may, if it sees fit, by notice to the successor and the Borrowers and the Security Trustee waive the need for the execution and delivery of a Transfer Certificate; and, upon service of the Agent's notice, the successor shall become a Lender with the same Commitment and Contribution as were held by the predecessor Lender.
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26.7 Effect of Transfer Certificate
A Transfer Certificate takes effect in accordance with English law as follows:
(a) to the extent specified in the Transfer Certificate, all rights and interests (present, future or contingent) which the Transferor Lender has under or by virtue of the Finance Documents (other than the Master Agreement) are assigned to the Transferee Lender absolutely, free of any defects in the Transferor Lender's title and of any rights or equities which either Borrower or any Security Party had against the Transferor Lender;
(b) the Transferor Lender's Commitment is discharged to the extent specified in the Transfer Certificate;
(c) the Transferee Lender becomes a Lender with the Contribution previously held by the Transferor Lender and a Commitment of an amount specified in the Transfer Certificate;
(d) the Transferee Lender becomes bound by all the provisions of the Finance Documents (other than the Master Agreement) which are applicable to the Lenders generally, including those about pro-rata sharing and the exclusion of liability on the part of, and the indemnification of, the Agent and the Security Trustee and, to the extent that the Transferee Lender becomes bound by those provisions (other than those relating to exclusion of liability), the Transferor Lender ceases to be bound by them;
(e) any part of the Loan which the Transferee Lender advances after the Transfer Certificate's effective date ranks in point of priority and security in the same way as it would have ranked had it been advanced by the transferor, assuming that any defects in the transferor's title and any rights or equities of either Borrower or any Security Party against the Transferor Lender had not existed;
(f) the Transferee Lender becomes entitled to all the rights under the Finance Documents (other than the Master Agreement) which are applicable to the Lenders generally, including but not limited to those relating to the Majority Lenders and those under Clause 5.7 and Clause 20, and to the extent that the Transferee Lender becomes entitled to such rights, the Transferor Lender ceases to be entitled to them; and
(g) in respect of any breach of a warranty, undertaking, condition or other provision of a Finance Document or any misrepresentation made in or in connection with a Finance Document (other than the Master Agreement), the Transferee Lender shall be entitled to recover damages by reference to the loss incurred by it as a result of the breach or misrepresentation, irrespective of whether the original Lender would have incurred a loss of that kind or amount.
The rights and equities of either Borrower or any Security Party referred to above include, but are not limited to, any right of set off and any other kind of cross-claim.
26.8 Maintenance of register of Lenders
During the Security Period the Agent shall maintain a register in which it shall record the name, Commitment, Contribution and administrative details (including the lending office) from time to time of each Lender holding a Transfer Certificate and the effective date (in accordance with Clause 26.4) of the Transfer Certificate; and the Agent shall make the register available for inspection by any Lender, the Security Trustee and the Borrowers during normal banking hours, subject to receiving at least 3 Business Days' prior notice.
26.9 Reliance on register of Lenders
The entries on that register shall, in the absence of manifest error, be conclusive in determining the identities of the Lenders and the amounts of their Commitments and Contributions and the effective dates of Transfer Certificates and may be relied upon by the
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Agent and the other parties to the Finance Documents for all purposes relating to the Finance Documents.
26.10 Authorisation of Agent to sign Transfer Certificates
The Borrowers, the Security Trustee, each Lender and the Swap Bank irrevocably authorises the Agent to sign Transfer Certificates on its behalf.  The Borrower and each Security Party irrevocably agrees to the transfer procedures set out in this Clause 26 and to the extent the cooperation of the Borrowers and/or any Security Party shall be required to effect any such transfer, the Borrowers and such Security Party shall take all necessary steps to afford such cooperation Provided that this shall not result in any additional costs to the Borrowers or such Security Party.
26.11 Registration fee
In respect of any Transfer Certificate, the Agent shall be entitled to recover a registration fee of $2,500 from the Transferor Lender or (at the Agent's option) the Transferee Lender.
26.12 Sub-participation; subrogation assignment
A Lender may sub-participate or include in a securitisation or similar transaction all or any part of its rights and/or obligations under or in connection with the Finance Documents (other than the Master Agreement) without the Borrowers' prior consent and without serving a notice thereon and the Lenders may assign without the Borrowers' prior consent and without serving a notice thereon, in any manner and terms agreed by the Majority Lenders, the Agent and the Security Trustee, all or any part of those rights to an insurer or surety who has become subrogated to them.  The Borrowers shall, and shall procure that each Security Party shall, do everything requested by the Agent or any Lender to assist and co-operate with that Lender to achieve a successful securitisation or similar transaction.
26.13 Sub-division, split, modification or re-tranching
Any Lender may, in its sole discretion, sub-divide, split, sever, modify or re-tranche its Contribution into one or more parts subject to the overall cost of its Contribution to the Borrowers remaining unchanged, if such changes are necessary in order to achieve a successful execution of a securitisation, syndication or any other capital market exit in respect of its Contribution (or any applicable part thereof).
26.14 Disclosure of information
A Lender may, without the prior consent of the Borrowers, the Corporate Guarantor or any other Security Party, disclose to a potential Transferee Lender or sub participant as well as, where relevant, to rating agencies, authorities, trustees and accountants, any financial or other information which that Lender has received in relation to the Loan, the Borrowers (or any of them), the Corporate Guarantor and any other Security Party or their affairs and collateral or security provided under or in connection with any Finance Document, their financial circumstances and any other information whatsoever, as that Lender may deem reasonably necessary or appropriate in connection with the potential syndication, the assessment of the credit risk and the ongoing monitoring of the Loan by any potential Transferee Lender and that Lender shall be released from its obligation of secrecy and from banking confidentiality.
In the event any such potential Transferee Lender, sub-participant, rating agency, trustee or accountant is not already bound by any legal obligation of secrecy or banking confidentiality, the Lender concerned shall require such other party to sign a confidentiality agreement. The Borrowers shall, and shall procure that the Corporate Guarantor and any other Security Party shall:
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(a) provide the Creditor Parties (or any of them) with all information deemed, reasonably, necessary by the Creditor Parties (or any of them) for the purposes of any transfer, syndication or sub-participation to be effected pursuant to this Clause 26; and
(b) procure that the directors and officers of each Borrower, the Corporate Guarantor or any other Security Party, are available to participate in any meeting with any Transferee Lender or any rating agency at such times and places as the Creditor Parties may reasonably request on notice (to be served on the Borrowers reasonably in advance) to that Borrower, the Corporate Guarantor or that Security Party.
The Borrowers shall not and shall ensure that no Security Party will publish any details regarding the Loan or any of the Finance Documents without the Agent's prior written consent, unless this is required by any applicable rules and regulations in the capital markets where the Corporate Guarantor is listed, provided that prior notice is given to the Agent of any such publication .
26.15 Change of lending office
A Lender may, at no cost to the Borrowers, change its lending office by giving notice to the Agent and the change shall become effective on the later of:
(a) the date on which the Agent receives the notice; and
(b) the date, if any, specified in the notice as the date on which the change will come into effect.
26.16 Notification
On receiving such a notice, the Agent shall notify the Borrowers and the Security Trustee; and, until the Agent receives such a notice, it shall be entitled to assume that a Lender is acting through the lending office of which the Agent last had notice.
26.17 Security over Lenders' rights
In addition to the other rights provided to Lenders under this Clause 26, each Lender may without consulting with or obtaining consent from either Borrower or any Security Party, at any time charge, assign or otherwise create a Security Interest in or over (whether by way of collateral or otherwise) all or any of its rights under any Finance Document (other than the Master Agreement) to secure obligations of that Lender to a federal reserve or central bank.
26.18 Replacement of Reference Bank
If any Reference Bank ceases to be a Lender or is unable on a continuing basis to supply quotations for the purposes of Clause 5 then, unless the Borrowers, the Agent and the Majority Lenders otherwise agree, the Agent, acting on the instructions of the Majority Lenders, and after consulting the Borrowers, shall appoint another bank (whether or not a Lender) to be a replacement Reference Bank; and, when that appointment comes into effect, the first‑mentioned Reference Bank's appointment shall cease to be effective.
27 VARIATIONS AND WAIVERS
27.1 Required consents
(a) Subject to Clause 27.2 (Exceptions) any term of the Finance Documents may be amended or waived only with the consent of the Majority Lenders and the Borrowers and any such amendment or waiver will be binding on all Creditor Parties and the Borrowers.
(b) Any instructions given by the Majority Lenders will be binding on all the Creditor Parties.
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(c) The Agent may effect, on behalf of any Creditor Party, any amendment or waiver permitted by this Clause.
27.2 Exceptions
(a) An amendment or waiver that has the effect of changing or which relates to:
(i) the definition of "Majority Lenders" or "Finance Documents" in Clause 1.1 (Definitions);
(ii) an extension to the date of payment of any amount under the Finance Documents;
(iii) a reduction in the Margin or a reduction in the amount of any payment of principal, interest fees, commission or other amount payable under any of the Finance Documents;
(iv) an increase in or an extension of any Lender's Commitment;
(v) any provision which expressly requires the consent of all the Lenders; or
(vi) Clause 3 (Position of the Lenders and Swap Banks), Clause 11.5 (Information provided to be accurate), 11.6 (Provision of financial statements) and 11.7 (Form of financial statements), Clause 26 (Transfers and Changes in Lending Offices) or this Clause 27.2;
(vii) any release of any Security Interest, guarantee, indemnities or subordination arrangement created by any Finance Document;
(viii) any change of the currency in which the Loan is provided or any amount is payable under any of the Finance Documents;
(ix) extend the Availability Period; and
(x) change clauses 22 (No Set-Off or Tax Deduction) and 16.4 (Distribution of payment to Creditor Parties),
may not be effected without the prior written consent of all Lenders.
(b) An amendment or waiver which relates to the rights or obligations of the Agent, the Arranger or the Security Trustee may not be effected without the consent of the Agent, the Arranger or the Security Trustee, as the case may be.
27.3 Exclusion of other or implied variations
Except for a document which satisfies the requirements of Clauses 27.1 and 27.2, no document, and, subject to Clause 27.4, no act, course of conduct, failure or neglect to act, delay or acquiescence on the part of the Creditor Parties or any of them (or any person acting on behalf of any of them) shall result in the Creditor Parties or any of them (or any person acting on behalf of any of them) being taken to have varied, waived, suspended or limited, or being precluded (permanently or temporarily) from enforcing, relying on or exercising:
(a) a provision of this Agreement or another Finance Document; or
(b) an Event of Default; or
(c) a breach by a Borrower or a Security Party of an obligation under a Finance Document or the general law; or
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(d) any right or remedy conferred by any Finance Document or by the general law,
and there shall not be implied into any Finance Document any term or condition requiring any such provision to be enforced, or such right or remedy to be exercised, within a certain or reasonable time.
27.4 Deemed consent
With respect to any amendment, variation, waiver, suspension or limit requested by any party to this Agreement and which requires the approval of all the Lenders or the Majority Lenders (as the case may be), the Agent shall provide each Lender with written notice of such request accompanied by such detailed background information as may be reasonably necessary (in the opinion of the Agent) to determine whether to approve such action.  A Lender shall be deemed to have approved such action if such Lender fails to object to such action by written notice to the Agent within 10 days of that Lender's receipt of the Agent's notice or such other time as the Agent may state in the relevant notice as being the time available for approval of such action.
28 NOTICES
28.1 General
Unless otherwise specifically provided, any notice under or in connection with any Finance Document shall be given by letter or fax; and references in the Finance Documents to written notices, notices in writing and notices signed by particular persons shall be construed accordingly.
28.2 Addresses for communications
A notice by letter or fax shall be sent:
(a)                   to the Borrowers:
 
 
16 Grigoriou Lambraki Street
(Emporiko Kentro Premiera)
Second Floor
16674 Glyfada, Athens Greece
Fax No: +30 210 9638404
 
               for the attention of:
Chief Executive Officer
 
(b)                   to a Lender:
At the address below its name in Schedule 1 or (as the case may require) in the relevant Transfer Certificate.
 
                for the attention of:
the Manager
 
(c)                    to the Agent and Security Trustee:
HSH Nordbank AG
Credit Risk Management Europe & Offshore
Gerhart-Hauptmann-Platz 50
20095 Hamburg
Germany

Fax No: +49 40 3333 34118
 
(d)                    to the Swap Bank:
Martensdamm 6
D-24103 Kiel
Germany
 
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 Fax No: +49 40 3333 34086
 
or to such other address as the relevant party may notify the Agent or, if the relevant party is the Agent or the Security Trustee, the Borrowers, the Lenders, the Swap Bank and the Security Parties.
28.3 Effective date of notices
Subject to Clauses 28.4 and 28.5:
(a) a notice which is delivered personally or posted shall be deemed to be served, and shall take effect, at the time when it is delivered; and
(b) a notice which is sent by fax shall be deemed to be served, and shall take effect, 2 hours after its transmission is completed.
28.4 Service outside business hours
However, if under Clause 28.3 a notice would be deemed to be served:
(a) on a day which is not a business day in the place of receipt; or
(b) on such a business day, but after 5 p.m. local time, the notice shall (subject to Clause 28.5) be deemed to be served, and shall take effect, at 9 a.m. on the next day which is such a business day.
28.5 Illegible notices
Clauses 28.3 and 28.4 do not apply if the recipient of a notice notifies the sender within 1 hour after the time at which the notice would otherwise be deemed to be served that the notice has been received in a form which is illegible in a material respect.
28.6 Valid notices
A notice under or in connection with a Finance Document shall not be invalid by reason that its contents or the manner of serving it do not comply with the requirements of this Agreement or, where appropriate, any other Finance Document under which it is served if:
(a) the failure to serve it in accordance with the requirements of this Agreement or other Finance Document, as the case may be, has not caused any party to suffer any significant loss or prejudice; or
(b) in the case of incorrect and/or incomplete contents, it should have been reasonably clear to the party on which the notice was served what the correct or missing particulars should have been.
28.7 Electronic communication
Any communication to be made between the Agent and a Creditor Party or any Security Party under or in connection with the Finance Documents may be made by electronic mail or other electronic means, if the Agent and, in the case of a communication to a Creditor Party, the relevant Creditor Party (or in the case of a communication to a Security Party, the relevant Security Party):
(a) agree that, unless and until notified to the contrary, this is to be an accepted form of communication;
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(b) notify each other in writing of their electronic mail address and/or any other information required to enable the sending and receipt of information by that means; and
(c) notify each other of any change to their respective addresses or any other such information supplied to them.
Any electronic communication made between the Agent and a Lender or the Swap Bank or a Security Party will be effective only when actually received in readable form and, in the case of any electronic communication made by a Creditor Party or a Security Party to the Agent, only if it is addressed in such a manner as the Agent shall specify for this purpose.
28.8 English language
Any notice under or in connection with a Finance Document shall be in English.
28.9 Meaning of "notice"
In this Clause 28, " notice " includes any demand, consent, authorisation, approval, instruction, waiver or other communication.
29 JOINT AND SEVERAL LIABILITY
29.1 General
All liabilities and obligations of the Borrowers under this Agreement shall, whether expressed to be so or not, be several and, if and to the extent consistent with Clause 29.2, joint.
29.2 No impairment of a Borrower's obligations
The liabilities and obligations of a Borrower shall not be impaired by:
(a) this Agreement being or later becoming void, unenforceable or illegal as regards the other Borrowers
(b) any Lender, the Swap Bank or the Security Trustee entering into any rescheduling, refinancing or other arrangement of any kind with the other Borrower;
(c) any Lender, the Swap Bank or the Security Trustee releasing the other Borrower or any Security Interest created by a Finance Document; or
(d) any combination of the foregoing.
29.3 Principal debtors
Each Borrower declares that it is and will, throughout the Security Period, remain a principal debtor for all amounts owing under this Agreement and the Finance Documents and neither Borrower shall in any circumstances be construed to be a surety for the obligations of the other Borrower under this Agreement.
29.4 Subordination
Subject to Clause 29.5, during the Security Period, neither Borrower shall:
(a) claim any amount which may be due to it from the other Borrower whether in respect of a payment made, or matter arising out of, this Agreement or any Finance Document, or any matter unconnected with this Agreement or any Finance Document; or
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(b) take or enforce any form of security from the other Borrower for such an amount, or in any other way seek to have recourse in respect of such an amount against any asset of the other Borrower; or
(c) set off such an amount against any sum due from it to the other Borrower; or
(d) prove or claim for such an amount in any liquidation, administration, arrangement or similar procedure involving the other Borrower or other Security Party; or
(e) exercise or assert any combination of the foregoing.
29.5 Borrowers' required action
If during the Security Period, the Agent, by notice to a Borrower, requires it to take any action referred to in paragraphs (a) to (d) of Clause 29.4, in relation to the other Borrower, that Borrower shall take that action as soon as practicable after receiving the Agent's notice.
30 SUPPLEMENTAL
30.1 Rights cumulative, non-exclusive
The rights and remedies which the Finance Documents give to each Creditor Party are:
(a) cumulative;
(b) may be exercised as often as appears expedient; and
(c) shall not, unless a Finance Document explicitly and specifically states so, be taken to exclude or limit any right or remedy conferred by any law.
30.2 Severability of provisions
If any provision of a Finance Document is or subsequently becomes void, unenforceable or illegal, that shall not affect the validity, enforceability or legality of the other provisions of that Finance Document or of the provisions of any other Finance Document.
30.3 Counterparts
A Finance Document may be executed in any number of counterparts.
30.4 Third party rights
A person who is not a party to this Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Agreement.
30.5 Benefit and binding effect
The terms of this Agreement shall be binding upon, and shall enure to the benefit of, the parties hereto and their respective (including subsequent) successors and permitted assigns and transferees.
31 LAW AND JURISDICTION
31.1 English law
This Agreement and any non-contractual obligations arising out of or in connection with it shall be governed by, and construed in accordance with, English law.
31.2 Exclusive English jurisdiction
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Subject to Clause 31.3, the courts of England shall have exclusive jurisdiction to settle any Dispute.
31.3 Choice of forum for the exclusive benefit of the Creditor Parties
Clause 31.2 is for the exclusive benefit of the Creditor Parties, each of which reserves the right:
(a) to commence proceedings in relation to any Dispute in the courts of any country other than England and which have or claim jurisdiction to that Dispute; and
(b) to commence such proceedings in the courts of any such country or countries concurrently with or in addition to proceedings in England or without commencing proceedings in England.
No Borrower shall commence any proceedings in any country other than England in relation to a Dispute.
31.4 Process agent
Each Borrower irrevocably appoints Messrs. E.J.C Album Solicitors, presently of Landmark House, 190 Willifield Way, London, NW11 GY1, England (Attention of Mr. Eduard Album Fax +44 (0) 20 8457 5558, e-mail: ejca@mitgr.com) to act as its agent to receive and accept on its behalf any process or other document relating to any proceedings in the English courts which are connected with a Dispute
31.5 Creditor Party rights unaffected
Nothing in this Clause 31 shall exclude or limit any right which any Creditor Party may have (whether under the law of any country, an international convention or otherwise) with regard to the bringing of proceedings, the service of process, the recognition or enforcement of a judgment or any similar or related matter in any jurisdiction.
31.6 Meaning of "proceedings" and "Dispute"
In this Clause 31, " proceedings " means proceedings of any kind, including an application for a provisional or protective measure and a " Dispute " means any dispute arising out of or in connection with this Agreement (including a dispute relating to the existence, validity or termination of this Agreement) or any non-contractual obligation arising out of or in connection with this Agreement.
THIS AGREEMENT has been entered into on the date stated at the beginning of this Agreement.
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SCHEDULE 1


LENDERS AND COMMITMENTS

Lender
Lending Office
Commitment
(US Dollars)
HSH Nordbank AG
Gerhart-Hauptmann-Platz 50
20095 Hamburg
Germany
 
44,430 , 400


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SCHEDULE 2


DRAWDOWN NOTICE
To: HSH Nordbank AG
Gerhart-Hauptmann-Platz 50
20095 Hamburg
Germany
Attention: Credit Risk Management Europe & Offshore
[ l ] 2015
DRAWDOWN NOTICE
1 We refer to the loan agreement (the " Loan Agreement ") dated [ l ]- 2015 and made between ourselves, as joint and several Borrowers, the Lenders referred to therein, and yourselves as Agent, Mandated Lead Arranger, as Security Trustee and as Swap Bank in connection with a secured term loan facility of up to $44 , 430,400. Terms defined in the Loan Agreement have their defined meanings when used in this Drawdown Notice.
2 We request to borrow as follows:
(a) Advance [A, Tranche A]/[Advance A, Tranche B], [Advance B, Tranche A], [Advance B, Tranche B];
(b) Amount of Advance: $[ l ];
(c) Drawdown Date: [ l ];
(d) Duration of the first Interest Period shall be [ l ] months; and
(e) Payment instructions : account in our name and numbered [ l ] with [ l ] of [ l ].
3 We represent and warrant that:
(a) the representations and warranties in Clause 10 of the Loan Agreement would remain true and not misleading if repeated on the date of this notice with reference to the circumstances now existing; and
(b) no Event of Default has occurred and is continuing or will result from the borrowing of that Advance.
4 This notice cannot be revoked without the prior consent of the Majority Lenders.
[Name of Signatory]
 
 
 
[Name of Signatory]
[Director]
for and on behalf of
SEA GLORIUS SHIPPING CO.
 
[Director]
for and on behalf of
SEA GENIUS SHIPPING CO.
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SCHEDULE 3


CONDITION PRECEDENT DOCUMENTS

PART A
The following are the documents referred to in Clause 9.1(a) required before the date of this Agreement.
1 A duly executed original of:
(a) this Agreement;
(b) the Master Agreement;
(c) the Master Agreement Assignment;
(d) the Shares Pledges;
(e) the Corporate Guarantee;
(f) the Agency and Trust Agreement; and
(g) Account Pledges.
2 Copies of the certificate of incorporation and constitutional documents of each Borrower, the Corporate Guarantor and any other Security Party and any company registration documents in respect of either Borrower and any Security Party (including, without limitation, any corporate register excerpts) required by the Agent.
3 Copies of resolutions of the directors and shareholders of each Borrower, the Corporate Guarantor and any other Security Party (other than the Approved Manager) authorising the execution of each of the Finance Documents to which each is a party and, in the case of the Borrowers, authorising named representatives to give the Drawdown Notices and other notices under this Agreement and ratifying the execution of the relevant MOA.
4 The original of any power of attorney under which any Finance Document is executed on behalf of a Borrower, the Corporate Guarantor and any other Security Party (other than the Approved Manager).
5 Copies of all consents which either Borrower or any Security Party requires to enter into, or make any payment under, any Finance Document or any Underlying Document.
6 Certified true copies of each Underlying Document duly executed by the parties thereto duly executed by the parties thereto.
7 Such documentary evidence as the Agent and its legal advisers may require in relation to the due authorisation and execution by the parties to each Underlying Document and of all documents to be executed by the parties thereto under that Underlying Document.
8 The originals of any mandates or other documents required in connection with the opening or operation of the Earnings Accounts.
9 Documentary evidence that the agent for service of process named in Clause 31 has accepted its appointment.
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10 Any documents required by the Agent in respect of each Borrower, the Corporate Guarantor and any other Security Party (and their respective shareholders) to satisfy the Lenders' "know your customer" and money laundering requirements.
11 Favourable legal opinions from lawyers appointed by the Agent on such matters concerning the laws of the Republic of the Marshall Islands and such other relevant jurisdictions as the Agent may require.
12 A Group structure chart in an Agreed Form.
13 If the Agent so requires, in respect of any of the documents referred to above, a certified English translation prepared by a translator approved by the Agent.
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PART B
The following are the documents referred to in Clause 9.1(b) required before each Drawdown Date.  In Part B of this Schedule 3, the following definitions have the following meanings:
(a) " Relevant Borrower " means the Borrower which is the owner of the Relevant Ship; and
(b) " Relevant Ship " means each Ship which is relevant to the Advance being borrowed on the relevant Drawdown Date.
1 A duly executed original of the Mortgage, the General Assignment and any Charterparty Assignment (and of each document to be delivered by each of them), each in respect of the Relevant Ship and the Relevant Borrower.
2 Documentary evidence that:
(a) the Relevant Ship has been unconditionally delivered by the Seller to, and accepted by, the relevant Borrower under the relevant MOA and the Contract Price payable under that MOA (in addition to the part to be financed by the relevant Advance) has been duly paid in full (together with a copy of each of the documents delivered by the relevant Seller to the Relevant Borrower under that MOA (including but not limited to, the bill of sale, the commercial invoice and the protocol of delivery and acceptance);
(b) the Relevant Ship has been deleted from the flag of the Isle of Man and is definitively and, at least, provisionally registered in the name of the Relevant Borrower under an Approved Flag;
(c) the Relevant Ship is in the absolute and unencumbered ownership of the Relevant Borrower save as contemplated by the Finance Documents;
(d) the Relevant Ship maintains the class specified in Clause 14.3(b) with a first class classification society which is a member of IACS (other than China Classification Society and the Russian Maritime Registry of Shipping) as the Agent may approve free of all overdue recommendations and conditions of such classification society;
(e) the Mortgage relating to each Relevant Ship has been duly registered or recorded against that Ship as a valid first preferred or, as the case may be, priority mortgage in accordance with the laws of the Approved Flag State; and
(f) the Relevant Ship is insured in accordance with the provisions of this Agreement and all requirements therein in respect of insurances have been complied with.
3 Documents establishing that each Relevant Ship will, as from the relevant Drawdown Date, be managed by the Approved Managers on terms acceptable to the Lenders, together with:
(a) each Approved Manager's Undertaking relative thereto;
(b) copies of the Approved Managers' Document of Compliance, that Ship's Safety Management Certificate (together with any other details of the applicable safety management system which the Agent requires); and
(c) a copy of the ISSC in respect of the Relevant Ship.
4 A favourable opinion from an independent insurance consultant acceptable to the Agent on such matters relating to the insurances for the Relevant Ship as the Agent may require.
83

5 Favourable legal opinions from lawyers appointed by the Agent on such matters concerning the law of the Republic of the Marshall Islands and such other relevant jurisdictions as the Agent may require.
6 The audited financial statements for the Borrowers and the Corporate Guarantor for the financial year ended on 31 December 2014.
7 If the Agent so requires, in respect of any of the documents referred to above, a certified English translation prepared by a translator approved by the Agent.
Each of the documents specified in paragraphs 3 and 4 of Part A shall be notarised or legalised by a competent authority acceptable to the Agent and every other copy document delivered under this Schedule shall be certified as a true and up to date copy by a director or the secretary (or equivalent officer) of a Borrower.
84

SCHEDULE 4


MANDATORY COST FORMULA

1 The Mandatory Cost is an addition to the interest rate to compensate Lenders for the cost of compliance with (a) the requirements of the Financial Services Authority (or any other authority which replaces all or any of its functions) or (b) the requirements of the European Central Bank.
2 On the first day of each Interest Period (or as soon as possible thereafter) the Agent shall calculate, as a percentage rate, a rate (the "Additional Cost Rate") for each Lender, in accordance with the paragraphs set out below.  The Mandatory Cost will be calculated by the Agent as a weighted average of the Lenders' Additional Cost Rates (weighted in proportion to the percentage participation of each Lender in the relevant Advance) and will be expressed as a percentage rate per annum.
3 The Additional Cost Rate for any Lender lending from a lending office in a Participating Member State will be the percentage notified by that Lender to the Agent.  This percentage will be certified by that Lender in its notice to the Agent to be its reasonable determination of the cost (expressed as a percentage of that Lender's participation in all Advances made from that lending office) of complying with the minimum reserve requirements of the European Central Bank in respect of loans made from that lending office.
4 The Additional Cost Rate for any Lender lending from a lending office in the United Kingdom will be calculated by the Agent as follows:
  per cent. per annum
Where:
E is designed to compensate Lenders for amounts payable under the Fees Rules and is calculated by the Agent as being the average of the most recent rates of charge supplied by the Lenders to the Agent pursuant to paragraph 6 below and expressed in pounds per £1,000,000.
5 For the purposes of this Schedule:
(a) " Eligible Liabilities " and " Special Deposits " have the meanings given to them from time to time under or pursuant to the Bank of England Act 1998 or (as may be appropriate) by the Bank of England;
(b) " Fees Rules " means the rules on periodic fees contained in the FSA Supervision Manual or such other law or regulation as may be in force from time to time in respect of the payment of fees for the acceptance of deposits;
(c) " Fee Tariffs " means the fee tariffs specified in the Fees Rules under the activity group A.1 Deposit acceptors (ignoring any minimum fee or zero rated fee required pursuant to the Fees Rules but taking into account any applicable discount rate);
(d) " Participating Member State " means any member state of the European Union that adopts or has adopted the euro as its lawful currency in accordance with legislation of the European Union relating to European Monetary Union; and
(e) " Tariff Base " has the meaning given to it in, and will be calculated in accordance with, the Fees Rules.
85

6 If requested by the Agent, each Lender shall, as soon as practicable after publication by the Financial Services Authority, supply to the Agent, the rate of charge payable by that Lender to the Financial Services Authority pursuant to the Fees Rules in respect of the relevant financial year of the Financial Services Authority (calculated for this purpose by that Lender as being the average of the Fee Tariffs applicable to that Lender for that financial year) and expressed in pounds per £1,000,000 of the Tariff Base of that Lender.
7 Each Lender shall supply any information required by the Agent for the purpose of calculating its Additional Cost Rate.  In particular, but without limitation, each Lender shall supply the following information in writing on or prior to the date on which it becomes a Lender:
(a) the jurisdiction of its lending office; and
(b) any other information that the Agent may reasonably require for such purpose.
Each Lender shall promptly notify the Agent in writing of any change to the information provided by it pursuant to this paragraph.
8 The rates of charge of each Lender for the purpose of E above shall be determined by the Agent based upon the information supplied to it pursuant to paragraph 6 above and on the assumption that, unless a Lender notifies the Agent to the contrary, each Lender's obligations in relation to cash ratio deposits and special Deposits are the same as those of a typical bank from its jurisdiction of incorporation with a lending office in the same jurisdiction as its lending office.
9 The Agent shall have no liability to any person if such determination results in an Additional Cost Rate which over or under compensates any Lender and shall be entitled to assume that the information provided by any Lender pursuant to paragraphs 3, 6 and 7 above is true and correct in all respects.
10 The Agent shall distribute the additional amounts received as a result of the Mandatory Cost to the Lenders on the basis of the Additional Cost Rate for each Lender based on the information provided by each Lender pursuant to paragraphs 3, 6 and 7 above.
11 Any determination by the Agent pursuant to this Schedule in relation to a formula, the Mandatory Cost, an Additional Cost Rate or any amount payable to a Lender shall, in the absence of manifest error, be conclusive and binding on all parties.
12 The Agent may from time to time, after consultation with the Borrowers and the Lenders, determine and notify to all parties any amendments which are required to be made to this Schedule in order to comply with any change in law, regulation or any requirements from time to time imposed by the Financial Services Authority or the European Central Bank (or, in any case, any other authority which replaces all or any of its functions) and any such determination shall, in the absence of manifest error, be conclusive and binding on all parties.
86

SCHEDULE 5


DESIGNATION NOTICE

To:                SEA GLORIUS SHIPPING CO.
SEA GENIUS SHIPPING CO.
Trust Company Complex
Ajeltake Road, Ajeltake Island
Majuro, MH96960
The Marshall Islands
[date]
Dear Sirs
Loan Agreement dated [ l ] 2015 (the "Loan Agreement") and made between (i) Sea Glorius Shipping Co. and Sea Genius Shipping Co., as joint and several Borrowers, (ii) the Lenders, (iii) the Swap Bank, (iv) and ourselves as Agent, Mandated Lead Arranger, Swap Bank and Security Trustee
Words and expressions defined in the Loan Agreement shall be used in this Designation Notice.
We refer to:
1 the Loan Agreement;
2 the Master Agreement dated as of [ l ] made between yourselves and the Swap Bank; and
3 a Confirmation delivered pursuant to the said Master Agreement dated [ l ] and addressed by the Swap Bank to yourselves.
In accordance with the terms of the Loan Agreement, we hereby give you notice of the said Confirmation and hereby confirm that the Transaction evidenced by it will be designated as a "Designated Transaction" for the purposes of the Loan Agreement and the Finance Documents.

Yours faithfully
 
 
for and on behalf of
HSH NORDBANK AG
87

SCHEDULE 6


TRANSFER CERTIFICATE

The Transferor and the Transferee accept exclusive responsibility for ensuring that this Certificate and the transaction to which it relates comply with all legal and regulatory requirements applicable to them respectively.
To: HSH Nordbank AG for itself and for and on behalf of each Borrower, each Security Party, the Security Trustee, each Lender and the Swap Bank, as defined in the Loan Agreement referred to below.
[ l ]
1 This Certificate relates to a Loan Agreement (the " Loan Agreement ") dated [ l ] 2015 and made between (1) Sea Glorius Shipping Co. and Sea Genius Shipping Co.   (together, the " Borrowers " and each a " Borrower ") as joint and several Borrowers, (2) the banks and financial institutions named therein as Lenders, (3) HSH Nordbank AG as Swap Bank, (4) HSH Nordbank AG as Agent (5) HSH Nordbank AG as Mandated lead Arranger and (6) HSH Nordbank AG as Security Trustee for a loan facility of up to $44,430,400.
2 In this Certificate, terms defined in the Loan Agreement shall, unless the contrary intention appears, have the same meanings and:
" Relevant Parties " means the Agent, each Borrower, each Security Party, the Security Trustee, each Lender and the Swap Bank;
" Transferor " means [full name] of [lending office]; and
" Transferee " means [full name] of [lending office].
3 The effective date of this Certificate is [ l ] Provided that this Certificate shall not come into effect unless it is signed by the Agent on or before that date.
4 The Transferor assigns to the Transferee absolutely all rights and interests (present, future or contingent) which the Transferor has as Lender under or by virtue of the Loan Agreement and every other Finance Document (other than the Master Agreement) in relation to [ l ] per cent. of its Contribution, which percentage represents $[ l ].
5 By virtue of this Certificate and Clause 26 of the Loan Agreement, the Transferor is discharged [entirely from its Commitment which amounts to $[ l ]] [from [ l ] per cent. of its Commitment, which percentage represents $[ l ]] and the Transferee acquires a Commitment of $[ l ].]
6 The Transferee undertakes with the Transferor and each of the Relevant Parties that the Transferee will observe and perform all the obligations under the Finance Documents (other than the Master Agreement) which Clause 26 of the Loan Agreement provides will become binding on it upon this Certificate taking effect.
7 The Agent, at the request of the Transferee (which request is hereby made) accepts, for the Agent itself and for and on behalf of every other Relevant Party, this Certificate as a Transfer Certificate taking effect in accordance with Clause 26 of the Loan Agreement.
88

8 The Transferor:
(a) warrants to the Transferee and each Relevant Party that:
(i) the Transferor has full capacity to enter into this transaction and has taken all corporate action and obtained all consents which are in connection with this transaction; and
(ii) this Certificate is valid and binding as regards the Transferor;
(b) warrants to the Transferee that the Transferor is absolutely entitled, free of encumbrances, to all the rights and interests covered by the assignment in paragraph 4 above; and
(c) undertakes with the Transferee that the Transferor will, at its own expense, execute any documents which the Transferee reasonably requests for perfecting in any relevant jurisdiction the Transferee's title under this Certificate or for a similar purpose.
9 The Transferee:
(a) confirms that it has received a copy of the Loan Agreement and each of the other Finance Documents;
(b) agrees that it will have no rights of recourse on any ground against either the Transferor, the Agent, the Mandated Lead Arranger, the Security Trustee, any Lender or the Swap Bank in the event that:
(i) any of the Finance Documents prove to be invalid or ineffective;
(ii) either Borrower or any Security Party fails to observe or perform its obligations, or to discharge its liabilities, under any of the Finance Documents;
(iii) it proves impossible to realise any asset covered by a Security Interest created by a Finance Document, or the proceeds of such assets are insufficient to discharge the liabilities of the Borrowers or any Security Party under the Finance Documents;
(c) agrees that it will have no rights of recourse on any ground against the Agent, the Mandated Lead Arranger, the Security Trustee, any Lender or the Swap Bank in the event that this Certificate proves to be invalid or ineffective;
(d) warrants to the Transferor and each Relevant Party that:
(i) it has full capacity to enter into this transaction and has taken all corporate action and obtained all consents which it needs to take or obtain in connection with this transaction; and
(ii) this Certificate is valid and binding as regards the Transferee; and
(e) confirms the accuracy of the administrative details set out below regarding the Transferee.
10 The Transferor and the Transferee each undertake with the Agent, the Mandated Lead Arranger and the Security Trustee severally, on demand, fully to indemnify the Agent and/or the Security Trustee and/or the Mandated Lead Arranger in respect of any claim, proceeding, liability or expense (including all legal expenses) which they or either of them may incur in connection with this Certificate or any matter arising out of it, except such as are shown to have been mainly and directly caused by the gross and culpable negligence or dishonesty of the Agent's, the Mandated Lead Arranger's or the Security Trustee's own officers or employees.
89

11 The Transferee shall repay to the Transferor on demand so much of any sum paid by the Transferor under paragraph 10 as exceeds one-half of the amount demanded by the Agent, the Mandated Lead Arranger or the Security Trustee in respect of a claim, proceeding, liability or expense which was not reasonably foreseeable at the date of this Certificate; but nothing in this paragraph shall affect the liability of each of the Transferor and the Transferee to the Agent, the Mandated Lead Arranger or the Security Trustee for the full amount demanded by it.

[Name of Transferor]
 
By:
 
Date:
[Name of Transferee]
 
By:
 
Date:



Agent
Signed for itself and for and on behalf of itself
as Agent and for every other Relevant Party
HSH Nordbank AG
By:
Date:
90

Administrative Details of Transferee

Name of Transferee:
Lending Office:
Contact Person (Loan Administration Department):
Telephone:
Fax:
Contact Person (Credit Administration Department):
Telephone:
Fax:
Account for payments:



Note:              This Transfer Certificate alone may not be sufficient to transfer a proportionate share of the Transferor's interest in the security constituted by the Finance Documents in the Transferor's or Transferee's jurisdiction.  It is the responsibility of each Lender to ascertain whether any other documents are required for this purpose.
91

SCHEDULE 7


POWER OF ATTORNEY

Know all men by these presents that [borrower's name] (the " Company "), a company incorporated in [ l ] and having its registered address at [address] irrevocably and by way of security appoints HSH Nordbank AG (the " Attorney ") of Gerhart-Hauptmann-Platz 50, D-20095 Hamburg, Germany its attorney, to act in the name of the Company and to exercise any right, entitlement or power of the Company in relation to [name of classification society] (the " Classification Society ") and/or to the classification records of any vessel owned, controlled or operated by the Company including, without limitation, such powers or entitlement as the Company may have to inspect the class records and any files held by the Classification Society in relation to any such vessel and to require the Classification Society to provide to the Attorney or to any of its nominees any information, document or file which the Attorney may request
Ratification of actions of attorney.   For the avoidance of doubt and without limiting the generality of the above, it is confirmed that the Company hereby ratifies any action which the Attorney takes or purports to take under this Power of Attorney and the Classification Society shall be entitled to rely hereon without further enquiry.
Delegation.   The Attorney may exercise its powers hereunder through any officer or through any nominee and/or may sub delegate to any person or persons (including a Receiver and persons designated by him) all or any of the powers (including the discretions) conferred on the Attorney hereunder, and may do so on terms authorising successive sub delegations.


THIS POWER OF ATTORNEY was executed by the Company as a Deed on [date].]


EXECUTED as a DEED by
[name of Company]
acting by two directors or one director
and the company secretary
)
)
)
)
 
 
 
 
 
Director: ……………………………
Director/Secretary: …………………..
92
EXECUTION PAGES
BORROWERS
SIGNED by Theodora Mitropetrou
 
for and on behalf of
SEA GLORIUS SHIPPING CO.
in the presence of:
)
)
)
)
)
 
 
/s/Theodora Mitropetrou
 
/s/ Andreas Giakoumelos
Andreas Giakoumelos
Attorney-At-Law
Watson Faley & Williams
348 Syngrou Avenue
176 74 Kallithea
Athens – Greece
 
   
SIGNED by Theodora Mitropetrou
 
for and on behalf of
SEA GENIUS SHIPPING CO.
in the presence of:
)
)
)
)
)
 
 
/s/Theodora Mitropetrou
 
/s/ Andreas Giakoumelos
Andreas Giakoumelos
Attorney-At-Law
Watson Faley & Williams
348 Syngrou Avenue
176 74 Kallithea
Athens – Greece

LENDERS
SIGNED by Antonella Karalis
 
for and on behalf of
HSH NORDBANK AG
in the presence of:
)
)
)
)
)
 
 
/s/ Antonella Karalis
 
/s/ Andreas Giakoumelos
Andreas Giakoumelos
Attorney-At-Law
Watson Faley & Williams
348 Syngrou Avenue
176 74 Kallithea
Athens – Greece
SWAP BANK
SIGNED by Antonella Karalis
 
for and on behalf of
HSH NORDBANK AG
in the presence of:
)
)
)
)
)
 
 
/s/ Antonella Karalis

/s/ Andreas Giakoumelos
Andreas Giakoumelos
Attorney-At-Law
Watson Faley & Williams
348 Syngrou Avenue
176 74 Kallithea
Athens - Greece
93

AGENT
SIGNED by Antonella Karalis
 
for and on behalf of
HSH NORDBANK AG
in the presence of:
)
)
)
)
)
 
 
/s/ Antonella Karalis
 
/s/ Andreas Giakoumelos
Andreas Giakoumelos
Attorney-At-Law
Watson Faley & Williams
348 Syngrou Avenue
176 74 Kallithea
Athens – Greece
MANDATED LEAD ARRANGER
SIGNED by Antonella Karalis
 
for and on behalf of
HSH NORDBANK AG
in the presence of:
)
)
)
)
)
 
 
/s/ Antonella Karalis

/s/ Andreas Giakoumelos
Andreas Giakoumelos
Attorney-At-Law
Watson Faley & Williams
348 Syngrou Avenue
176 74 Kallithea
Athens – Greece

SECURITY TRUSTEE
SIGNED by Antonella Karalis
 
for and on behalf of
HSH NORDBANK AG
in the presence of:
)
)
)
)
)
 
 
/s/ Antonella Karalis

/s/ Andreas Giakoumelos
Andreas Giakoumelos
Attorney-At-Law
Watson Faley & Williams
348 Syngrou Avenue
176 74 Kallithea
Athens – Greece
94
Exhibit 4.39


Dated 11 September 2015
US$52,704,790
TERM LOAN FACILITY
PREMIER MARINE CO.
GLADIATOR SHIPPING CO.
GUARDIAN SHIPPING CO.
as joint and several borrowers

and
SEANERGY MARITIME HOLDINGS CORP.
as Guarantor
and
UNICREDIT BANK AG.
as Original Lender

FACILITY AGREEMENT
relating to the part financing of the acquisition cost of m.vs
"GENEROUS" (tbr "PREMIERSHIP"), "ASSOS STRIKER" (tbr "GLADIATORSHIP") and "MYSTIC STRIKER" (tbr "GUARDIANSHIP")
 
 
 
 
 
 
 
 
WATSON FARLEY
&
WILLIAMS



Index
Clause Page
Section 1 Interpretation
2
1
Definitions and Interpretation
2
Section 2 The Facility
22
2
The Facility
22
3
Purpose
22
4
Conditions of Utilisation
23
Section 3 Utilisation
24
5
Utilisation
24
Section 4 Repayment, Prepayment and Cancellation
26
6
Repayment
26
7
Prepayment and Cancellation
27
Section 5 Costs of Utilisation
30
8
Interest
30
9
Interest Periods
31
10
Changes to the Calculation of Interest
32
11
Fees
34
Section 6 Additional Payment Obligations
35
12
Tax Gross Up and Indemnities
35
13
Increased Costs
38
14
Other Indemnities
39
15
Mitigation by the Lender
42
16
Costs and Expenses
42
Section 7 Guarantee and Joint and Several Liability of Borrowers
44
17
Guarantee and Indemnity –Guarantor
44
18
Joint and Several Liability of the Borrowers
46
Section 8 Representations, Undertakings and Events of Default
48
19
Representations
48
20
Information Undertakings
54
21
Financial Covenants
56
22
General Undertakings
59
23
Insurance Undertakings
64
24
General Ship Undertakings
69
25
Security Cover
74
26
Application of Earnings
76
27
Events of Default
76
Section 9 Changes to the Parties
81
28
Changes to the Lender
81
29
Changes to the Transaction Obligors
82
Section 10 Administration
83
30
Payment Mechanics
83
31
Set-Off
84
32
Conduct of business by the Lender
85
33
Notices
85
34
Calculations and Certificates
87
35
Partial Invalidity
87
36
Remedies and Waivers
87
37
Settlement or Discharge Conditional
87
38
Irrevocable Payment
87
39
Confidential Information
88
40
Counterparts
90
Section 11 Governing Law and Enforcement
91
41
Governing Law
91
42
Enforcement
91

 
Schedule 1 The Parties
92
Schedule 2 Conditions Precedent
94
Schedule 3 Requests
99
Schedule 4 Form of Compliance Certificate
102
Schedule 5 Details of the Ships
103
Schedule 6 Timetables
104
Execution Pages
105

 
THIS AGREEMENT is made on 11 September 2015
PARTIES
(1) PREMIER MARINE CO. , a company incorporated in the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH96960, the Marshall Islands as a borrower (" Borrower A ")
(2) GLADIATOR SHIPPING CO. , a company incorporated in the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH96960, the Marshall Islands as a borrower (" Borrower B ")
(3) GUARDIAN SHIPPING CO. , a company incorporated in the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH96960, the Marshall Islands as a borrower (" Borrower C ")
(4) SEANERGY MARITIME HOLDINGS CORP., a company incorporated in the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH96960, the Marshall Islands as guarantor (the " Guarantor ")
(5) UNICREDIT BANK AG as lender (the " Original Lender ")
BACKGROUND
The Lender has agreed to make available to the Borrowers a facility of up to $52,704,790 in three Tranches, for the purposes of assisting the Borrowers in partially financing the acquisition of the Ships from the relevant Seller by way of a loan in a principal amount not exceeding the relevant Maximum Loan Amount.
OPERATIVE PROVISIONS

SECTION 1

INTERPRETATION
1 DEFINITIONS AND INTERPRETATION
1.1 Definitions
In this Agreement:
" Account Security " means a document creating Security over any Earnings Account, each in agreed form.
" Advance " means a borrowing of all or part of a Tranche under this Agreement.
" Affiliate " means, in relation to any person, a Subsidiary of that person or a Holding Company of that person or any other Subsidiary of that Holding Company.
" Applicable   Margin " means in respect of any six-month period during the Security Period, either:
(a) 3.20 per cent. per annum, if the Security Cover Ratio is less than 125 per cent; or
(b) 3 per cent. per annum, if the Security Cover Ratio is (i) equal to, or higher than 125 per cent. and (ii) equal to, or less than 166.67 per cent.; or
(c) 2.75 per cent. per annum, if the Security Cover Ratio is higher than 166.67 per cent,
as determined by the Lender at any such six-month period pursuant to Clause 8.1 ( Calculation of Interest );
" Approved Broker " means any firm or firms of insurance brokers approved in writing by the Lender.
" Approved Classification " means, in relation to a Ship, as at the date of this Agreement, the classification in relation to that Ship specified in Schedule 5 ( Details of the Ships ) or the equivalent classification with another Approved Classification Society.
" Approved Classification Society " means, in relation to a Ship, as at the date of this Agreement, the classification society in relation to that Ship specified in Schedule 5 ( Details of the Ships ) or any other classification society approved in writing by the Lender and which is a member of the International Association of Classification Societies.
" Approved Commercial Manager " means, in relation to a Ship, as at the date of this Agreement, the manager specified as the approved commercial manager in relation to that Ship in Schedule 5 ( Details of the Ships ) or any other person approved in writing by the Lender, as the commercial manager of that Ship.
" Approved Flag " means, in relation to a Ship, as at the date of this Agreement, the flag in relation to that Ship specified in Schedule 5 ( Details of the Ships ) or such other flag approved in writing by the Lender.
" Approved Manager " means, in relation to a Ship, the Approved Commercial Manager or the Approved Technical Manager of that Ship or any other manager approved by the Lender (such approval not to be unreasonably withheld).
2
" Approved Technical Manager " means in relation to a Ship, as at the date of this Agreement, the manager specified as the approved technical manager in relation to that Ship in Schedule 5 ( Details of the Ships ) or any other person approved in writing by the Lender.
" Approved Valuer " means any firm or firms of independent sale and purchase shipbrokers approved in writing by the Lender.
"Assignable Charter " means, in relation to a Ship, any charter relating to that Ship, or other contract for its employment, whether or not already in existence, for a firm period of 12 months or more (including any optional extensions and renewal options).
" Assignment Agreement " means an agreement in the form agreed between the Existing Lender and the relevant assignee for the purpose of Clause 28 ( Changes to the Lender ).
" Authorisation " means an authorisation, consent, approval, resolution, licence, exemption, filing, notarisation, legalisation or registration.
" Availability Period " means, in relation to each Tranche, the period from and including the date of this Agreement to and including the earlier of (i) the Delivery Date of the relevant Ship and (ii) 30 November 2015.
" Available Facility " means the Commitment minus:
(a) the amount of the outstanding Loan; and
(b) in relation to any proposed Utilisation, the amount of any Advance that is due to be made on or before the proposed Utilisation Date.
" Borrower " means Borrower A, Borrower B or Borrower C.
" Break Costs " means the amount (if any) by which:
(a) the interest which the Lender should have received for the period from the date of receipt of all or any part of the Loan or an Unpaid Sum to the last day of the current Interest Period in relation to the Loan, the relevant part of the Loan or that Unpaid Sum, had the principal amount or Unpaid Sum received been paid on the last day of that Interest Period;
exceeds
(b) the amount which the Lender would be able to obtain by placing an amount equal to the principal amount or Unpaid Sum received by it on deposit with a leading bank in the Relevant Interbank Market for a period starting on the Business Day following receipt or recovery and ending on the last day of the current Interest Period.
" Business Day " means a day (other than a Saturday or Sunday) on which banks are open for general business in London, New York, Athens, Frankfurt and Hamburg.
"Charter " means, in relation to a Ship, any charter relating to that Ship or other contract for its employment, whether or not already in existence, including any Assignable Charter.
" Charterparty Assignment " means, in relation to a Ship, an assignment of rights of the relevant Borrower who is the owner of that Ship under any Assignable Charter and any Charter Guarantee relative thereto executed or to be executed by that Borrower in favour of the Lender in the agreed form.
3
" Charter Guarantee " means any guarantee, bond, letter of credit or other instrument (whether or not already issued) supporting a Charter.
" Code " means the US Internal Revenue Code of 1986.
" Commercial Management Agreement " means the agreement entered into between a Borrower and the Approved Commercial Manager regarding the commercial management of a Ship.
" Commitment " means $52,704,790, to the extent not cancelled or reduced under this Agreement.
" Compliance Certificate " means a certificate in the form set out in Schedule 4 ( Form of Compliance Certificate ) or in any other form agreed between the Guarantor and the Lender.
" Confidential Information " means all information relating to any Transaction Obligor, the Group, the Finance Documents or the Facility of which the Lender becomes aware in its capacity as, or for the purpose of becoming, the Lender or which is received by the Lender in relation to, or for the purpose of becoming the Lender under, the Finance Documents or the Facility from any member of the Group or any of its advisers in whatever form, and includes information given orally and any document, electronic file or any other way of representing or recording information which contains or is derived or copied from such information but excludes:
(a) information that:
(i) is or becomes public information other than as a direct or indirect result of any breach by the Lender of Clause 39 ( Confidential Information ); or
(ii) is identified in writing at the time of delivery as non-confidential by any member of the Group or any of its advisers; or
(iii) is known by the Lender before the date the information is disclosed to it by any member of the Group or any of its advisers or is lawfully obtained by the Lender after that date, from a source which is, as far as the Lender is aware, unconnected with the Group and which, in either case, as far as the Lender is aware, has not been obtained in breach of, and is not otherwise subject to, any obligation of confidentiality; and
(b) any Funding Rate or Reference Bank Quotation.
" Confidentiality Undertaking " means a confidentiality undertaking in substantially the appropriate form recommended by the LMA from time to time or in any other form agreed between the Borrowers and the Lender.
" Deed of Covenant " means, in relation to a Ship, the deed of covenant collateral to the Mortgage over that Ship and creating Security over that Ship together with the Earnings, the Insurances and any Requisition Compensation in each case in relation to that Ship, in agreed form.
" Delegate " means any delegate, agent, attorney, co-trustee or other person appointed by the Lender.
" Delivery Date " means, in respect of each Ship, the date on which that Ship is delivered by its Seller to the relevant Borrower under the relevant MOA, scheduled in respect of Ship A, Ship B and Ship C by 30 November 2015.
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"Disclosed Person " means the person disclosed to the Lender at the date of this Agreement being the ultimate beneficial owner of at least 40 per cent. of either the (A) issued shares in the Guarantor and the voting rights attached to such shares and/or (B) the voting rights attached to any of the issued shares in the Guarantor which are not owned by the Disclosed Person, and identified as such in the most recent filing of Securities and Exchange Commission.
" Disruption Event " means either or both of:
(a) a material disruption to those payment or communications systems or to those financial markets which are, in each case, required to operate in order for payments to be made in connection with the Facility (or otherwise in order for the transactions contemplated by the Finance Documents to be carried out) which disruption is not caused by, and is beyond the control of, any of the Parties or, if applicable, any Transaction Obligor; or
(b) the occurrence of any other event which results in a disruption (of a technical or systems-related nature) to the treasury or payments operations of a Party or, if applicable, any Transaction Obligor preventing that, or any other, Party or, if applicable, any Transaction Obligor:
(i) from performing its payment obligations under the Finance Documents; or
(ii) from communicating with other Parties or, if applicable, any Transaction Obligor in accordance with the terms of the Finance Documents,
and which (in either such case) is not caused by, and is beyond the control of, the Party or, if applicable, any Transaction Obligor whose operations are disrupted.
" Document of Compliance " has the meaning given to it in the ISM Code.
" dollars " and " $ " mean the lawful currency, for the time being, of the United States of America.
" Earnings " means, in relation to a Ship, all moneys whatsoever which are now, or later become, payable (actually or contingently) to a Borrower or the Lender and which arise out of the use or operation of that Ship, including (but not limited to):
(a) the following, save to the extent that any of them is, with the prior written consent of the Lender, pooled or shared with any other person:
(i) all freight, hire and passage moneys;
(ii) compensation payable to a Borrower or the Lender in the event of requisition of that Ship for hire;
(iii) remuneration for salvage and towage services;
(iv) demurrage and detention moneys;
(v) damages for breach (or payments for variation or termination) of any charterparty or other contract for the employment of that Ship;
(vi) all moneys which are at any time payable under any Insurances in relation to loss of hire;
(vii) all monies which are at any time payable to a Borrower in relation to general average contribution; and
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(b) if and whenever that Ship is employed on terms whereby any moneys falling within sub-paragraphs (i) to (vi) of paragraph (a) above are pooled or shared with any other person, that proportion of the net receipts of the relevant pooling or sharing arrangement which is attributable to that Ship.
" Earnings Account " means, in relation to a Borrower:
(a) any account in the name of that Borrower with the Lender in Germany and in Greece designated "Earnings Account"; or
(b) any other account (with that or another office of the Lender or with a bank or financial institution other than the Lender ) which is designated by the Lender as the Earnings Account of that Borrower for the purposes of this Agreement.
" Environmental Approval " means any present or future permit, ruling, variance or other Authorisation required under Environmental Laws.
" Environmental Claim " means any claim by any governmental, judicial or regulatory authority or any other person which arises out of an Environmental Incident or an alleged Environmental Incident or which relates to any Environmental Law and, for this purpose,  " claim " includes a claim for damages, compensation, contribution, injury, fines, losses and penalties or any other payment of any kind, including in relation to clean-up and removal, whether or not similar to the foregoing; an order or direction to take, or not to take, certain action or to desist from or suspend certain action; and any form of enforcement or regulatory action, including the arrest or attachment of any asset.
" Environmental Incident " means:
(a) any release, emission, spill or discharge into any Ship or into or upon the air, sea, land or soils (including the seabed) or surface water of Environmentally Sensitive Material within or from any Ship; or
(b) any incident in which Environmentally Sensitive Material is released, emitted, spilled or discharged into or upon the air, sea, land or soils (including the seabed) or surface water from a vessel other than any Ship and which involves a collision between any Ship and such other vessel or some other incident of navigation or operation, in either case, in connection with which a Ship is actually or potentially liable to be arrested, attached, detained or injuncted and/or a Ship and/or any Transaction Obligor and/or any operator or manager of a Ship is at fault or allegedly at fault or otherwise liable to any legal or administrative action; or
(c) any other incident in which Environmentally Sensitive Material is released, emitted, spilled or discharged into or upon the air, sea, land or soils (including the seabed) or surface water otherwise than from a Ship and in connection with which a Ship is actually or potentially liable to be arrested and/or where any Transaction Obligor and/or any operator or manager of a Ship is at fault or allegedly at fault or otherwise liable to any legal or administrative action.
" Environmental Law " means any present or future law relating to pollution or protection of human health or the environment, to conditions in the workplace, to the carriage, generation, handling, storage, use, release or spillage of Environmentally Sensitive Material or to actual or threatened releases of Environmentally Sensitive Material.
" Environmentally Sensitive Material " means and includes all contaminants, oil, oil products, toxic substances and any other substance (including any chemical, gas or other hazardous or noxious substance) which is (or is capable of being or becoming) polluting, toxic or hazardous.
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" Event of Default " means any event or circumstance specified as such in Clause 27 ( Events of Default ).
" Facility " means the term loan facility made available under this Agreement as described in Clause 2 ( The Facility ).
" Facility Office " means the office or offices through which the Lender will perform its obligations under this Agreement.
" FATCA " means:
(a) sections 1471 to 1474 of the Code or any associated regulations;
(b) any treaty, law or regulation of any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction, which (in either case) facilitates the implementation of any law or regulation referred to in paragraph (a) above; or
(c) any agreement pursuant to the implementation of any treaty, law or regulation referred to in paragraphs (a) or (b) above with the US Internal Revenue Service, the US government or any governmental or taxation authority in any other jurisdiction.
" FATCA Deduction " means a deduction or withholding from a payment under a Finance Document required by FATCA.
" FATCA Exempt Party " means a Party that is entitled to receive payments free from any FATCA Deduction.
" Fidelity Marine " means Fidelity Marine Inc., a corporation organised and existing under the laws of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands, MH 96960.
" Finance Document " means:
(a) this Agreement;
(b) each Utilisation Request;
(c) the Hedging Agreement;
(d) any Security Document;
(e) any other document which is executed for the purpose of establishing any priority or subordination arrangement in relation to the Secured Liabilities; or
(f) any other document designated as such by the Lender and the Borrowers.
" Financial Indebtedness " means any indebtedness for or in relation to:
(a) moneys borrowed;
(b) any amount raised by acceptance under any acceptance credit facility or dematerialised equivalent;
(c) any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument;
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(d) the amount of any liability in relation to any lease or hire purchase contract which would, in accordance with GAAP, be treated as a finance or capital lease;
(e) receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis);
(f) any amount raised under any other transaction (including any forward sale or purchase agreement) of a type not referred to in any other paragraph of this definition having the commercial effect of a borrowing (in each case other than in respect of assets or services obtained on normal commercial terms in the ordinary course of business);
(g) any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price (and, when calculating the value of any derivative transaction, only the marked to market value (or, if any actual amount is due as a result of the termination or close-out of that derivative transaction, that amount) shall be taken into account);
(h) any counter-indemnity obligation in relation to a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution; and
(i) the amount of any liability in relation to any guarantee or indemnity for any of the items referred to in paragraphs (a) to (f) above.
" Fleet Ships " means the ships from time to time owned by the members of the Group and " Fleet Ship " means any of them.
" Funding Rate" means any individual rate notified by the Lender to an Obligor pursuant to any Finance Document.
" GAAP " means generally accepted accounting principles in the USA or IFRS.
" General Assignment " means, in relation to a Ship, the general assignment creating Security over that Ship's Earnings, its Insurances and any Requisition Compensation in relation to that Ship, in agreed form.
" Group " means the Guarantor and its consolidated Subsidiaries for the time being.
" Group   Ships " means any ships including the Ships which at any relevant time are owned by members of the Group.
" Hedging Agreement " means any master agreement, confirmation, transaction, schedule or other agreement in agreed form entered into or to be entered into by the Borrowers for the purpose of hedging interest payable under this Agreement.
" Hedging Agreement Security " means a charge over the Borrowers' rights and interests in the Hedging Agreement, in agreed form.
" Hedging Prepayment Proceeds " means any amount payable to the Borrowers as a result of termination or closing out under the Hedging Agreement.
" Holding Company " means, in relation to a person, any other person in relation to which it is a Subsidiary.
" IFRS " means international accounting standards within the meaning of the IAS Regulation 1606/2002 to the extent applicable to the relevant financial statements.
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" Indemnified Person " has the meaning given to it in Clause 14.2 ( Other indemnities ).
" Insurances " means, in relation to a Ship:
(a) all policies and contracts of insurance, including entries of that Ship in any protection and indemnity or war risks association, effected in relation to that Ship, the Earnings or otherwise in relation to that Ship whether before, on or after the date of this Agreement; and
(b) all rights and other assets relating to, or derived from, any of such policies, contracts or entries, including any rights to a return of premium and any rights in relation to any claim whether or not the relevant policy, contract of insurance or entry has expired on or before the date of this Agreement.
" Interest Period " means, in relation to the Loan or any part of the Loan, each period determined in accordance with Clause 9 ( Interest Period ) and, in relation to an Unpaid Sum, each period determined in accordance with Clause 8.3 ( Default interest ).
" Interpolated Screen Rate " means, in relation to the Loan or any part of the Loan, the rate (rounded to the same number of decimal places as the two relevant Screen Rates) which results from interpolating on a linear basis between:
(a) the applicable Screen Rate for the longest period (for which that Screen Rate is available) which is less than the Interest Period of the Loan or that part of the Loan; and
(b) the applicable Screen Rate for the shortest period (for which that Screen Rate is available) which exceeds the Interest Period of the Loan or that part of the Loan,
each as of the Specified Time for dollars.
" ISM Code " means the International Safety Management Code for the Safe Operation of Ships and for Pollution Prevention (including the guidelines on its implementation), adopted by the International Maritime Organisation, as the same may be amended or supplemented from time to time.
" ISPS Code " means the International Ship and Port Facility Security (ISPS) Code as adopted by the International Maritime Organization's (IMO) Diplomatic Conference of December 2002, as the same may be amended or supplemented from time to time.
" ISSC " means an International Ship Security Certificate issued under the ISPS Code.
" Lender " means:
(a) the Original Lender; and
(b) any bank, financial institution, trust, fund or other entity which has become the Lender in accordance with Clause 28 ( Changes to the Lender ),
which in each case has not ceased to be a Party in accordance with this Agreement.
" LIBOR " means, in relation to the Loan or any part of the Loan:
(a) the applicable Screen Rate   as of the Specified Time for dollars and for a period equal in length to the Interest Period of the Loan or that part of the Loan; or
(b) as otherwise determined pursuant to Clause 10.1 ( Unavailability of Screen Rate ),
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and if, in either case, that rate is less than zero, LIBOR shall be deemed to be zero.
" Limitation   Acts " means the Limitation Act 1980 and the Foreign Limitation Periods Act 1984.
" LMA " means the Loan Market Association.
" Loan " means the loan to be made available under the Facility or the aggregate principal amount outstanding for the time being of the borrowings under the Facility and a " part of the Loan " means an Advance, a Tranche, a part of a Tranche or any other part of the Loan as the context may require.
" Major   Casualty " means, in relation to a Ship, any casualty to that Ship in relation to which the claim or the aggregate of the claims against all insurers, before adjustment for any relevant franchise or deductible, which in respect of Ship A exceeds $500,000 and in respect of Ship B and Ship C, exceeds $250,000, or, in each case, the equivalent in any other currency.
" Management Agreement " means a Technical Management Agreement or a Commercial Management Agreement.
" Manager's   Undertaking " means the letter of undertaking from the Approved Technical Manager and the letter of undertaking from the Approved Commercial Manager subordinating the rights of the Approved Technical Manager and the Approved Commercial Manager respectively against each Ship and each Borrower to the rights of the Lender in agreed form
" Market   Value " means, in relation to a Ship or any other vessel, at any date, the market value of that Ship or vessel shown by a valuation prepared:
(a) as at a date not more than 14 Business Days previously;
(b) by an Approved Valuer;
(c) with or without physical inspection of that Ship or vessel (including without limitation any Fleet Ship) (as the Lender may require); and
(d) on the basis of a sale for prompt delivery for cash on normal arm's length commercial terms as between a willing seller and a willing buyer, free of any Charter,
after deducting the estimated amount of the usual and reasonable expenses which would be incurred in connection with the sale.
" Material   Adverse   Effect " means in the reasonable opinion of the Lender a  material adverse effect on:
(a) the business, operations, property, condition (financial or otherwise) or prospects of the Transaction Obligors; or
(b) the ability of any Transaction Obligor to perform its obligations under any Finance Document; or
(c) the validity or enforceability of, or the effectiveness or ranking of any Security granted or intended to be granted pursuant to any of, the Finance Documents or the rights or remedies of the Lender under any of the Finance Documents.
" Maximum Loan Amount " means an amount not exceeding $52,704,790.
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" Maximum Tranche A Amount " means in respect of Tranche A, an amount not exceeding in aggregate the lesser of (a) $25,419,998 and (b) 86.57% of the Purchase Price of Ship A.
" Maximum Tranche B Amount " means in respect of Tranche B, an amount not exceeding in aggregate the lesser of (a) $13,642,396 and (b) 83.51% of the Purchase Price of Ship B.
" Maximum Tranche C Amount " means in respect of Tranche C, an amount not exceeding in aggregate the lesser of (a) $13,642,396 and (b) 79.46% of the Purchase Price of Ship C.
" Maximum Tranche Amount " means any of the Maximum Tranche A Amount, Maximum Tranche B Amount or Maximum Tranche C Amount.
" MOA " means:-
(a) in respect of Ship A, the memorandum of agreement dated 6 August 2015 and made between (i) Borrower A as buyer and (ii) the relevant Seller for the purchase of Ship A; and
(b) in respect of Ship B, the memorandum of agreement dated 6 August 2015 and made between (i) Borrower B as buyer and (ii) the relevant Seller for the purchase of Ship B; and
(c) in respect of Ship C, the memorandum of agreement dated 6 August 2015 and made between (i) Borrower C as buyer and (ii) the relevant Seller for the purchase of Ship C.
" Month " means a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month, except that:
(a) (subject to paragraph (c) below) if the numerically corresponding day is not a Business Day, that period shall end on the next Business Day in that calendar month in which that period is to end if there is one, or if there is not, on the immediately preceding Business Day;
(b) if there is no numerically corresponding day in the calendar month in which that period is to end, that period shall end on the last Business Day in that calendar month; and
(c) if an Interest Period begins on the last Business Day of a calendar month, that Interest Period shall end on the last Business Day in the calendar month in which that Interest Period is to end.
The above rules will only apply to the last Month of any period.
" Mortgage " means in relation to (a) Ship A, a first priority Isle of Man ship mortgage on that Ship and (b) each of Ship B and Ship C, a first priority Bahamas ship mortgage on that Ship, each in agreed form.
" Obligor " means a Borrower and the Guarantor.
"Operating Expenses" means, the aggregate of the expenses properly incurred by the owning companies of Group Ships during any financial year of that owning company, in connection with the operation, employment, maintenance, repair, insurance, drydock and management fees of those ships.
" Overseas   Regulations " means the Overseas Companies Regulations 2009 (SI 2009/1801).
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" Participating   Member   State " means any member state of the European Union that has the euro as its lawful currency in accordance with legislation of the European Union relating to Economic and Monetary Union.
" Party " means a party to this Agreement.
" Permitted   Charter " means, in relation to a Ship, a Charter:
(a) which is a time, voyage or consecutive voyage charter;
(b) the duration of which does not exceed and is not capable of exceeding, by virtue of any optional extensions, 16 months plus a redelivery allowance of not more than 30 days;
(c) which is entered into on bona fide arm's length terms at the time at which that Ship is fixed; and
(d) in relation to which not more than two months' hire is payable in advance,
and any other Charter which is approved in writing by the Lender such approval not to be unreasonably withheld or delayed.
" Permitted   Financial   Indebtedness " means:
(a) any Financial Indebtedness incurred under the Finance Documents; and
(b) any Financial Indebtedness that is subordinated to all Financial Indebtedness incurred under the Finance Documents pursuant to a Finance Document which is subject of Security in favour of the Lender.
" Permitted Holders " means, together, those persons identified to the Lender as of the date of this Agreement.
" Permitted   Security " means:
(a) Security created by the Finance Documents;
(b) any netting or set-off arrangement entered into by any member of the Group in the ordinary course of its banking arrangements for the purpose of netting debit and credit balances;
(c) liens for unpaid master's and crew's wages in accordance with usual maritime practice;
(d) liens for salvage;
(e) liens for master's disbursements incurred in the ordinary course of trading; and
(f) any other lien arising by operation of law or otherwise in the ordinary course of the operation, repair or maintenance of any Ship and not as a result of any default or omission by any Borrower, and subject, in the case of liens for repair or maintenance, to Clause 24.16 ( Restrictions on chartering, appointment of managers etc. ).
"Pertinent Jurisdiction" , in relation to a company, means:
(a) England and Wales;
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(i) the country under the laws of which the company is incorporated or formed;
(ii) a country in which the company has the centre of its main interests or which the company's central management and control is or has recently been exercised;
(iii) a country in which the overall net income of the company is subject to corporation tax, income tax or any similar tax;
(iv) a country in which assets of the company (other than securities issued by, or loans to, related companies) having a substantial value are situated, in which the company maintains a branch or permanent place of business, or in which a Security Interest created by the company must or should be registered in order to ensure its validity or priority; and
(v) a country the courts of which have jurisdiction to make a winding up, administration or similar order in relation to the company, whether as a main or territorial or ancillary proceedings, or which would have such jurisdiction if their assistance were requested by the courts of a country referred to in paragraphs (ii) or (iii).
" Potential   Event   of   Default " means any event or circumstance specified in Clause 27 ( Events of Default ) which would (with the expiry of a grace period, the giving of notice, the making of any determination under the Finance Documents or any combination of any of the foregoing) be an Event of Default.
" Prohibited   Person " means any person (whether designated by name or by reason of being included in a class of persons) against whom Sanctions are directed.
" Purchase Price " means, in respect of each Ship, the price payable for that Ship as provided in article 1 of the relevant MOA.
" Quotation   Day " means, in relation to any period for which an interest rate is to be determined  two Business Days before the first day of that period unless market practice differs in the Relevant Interbank Market in which case the Quotation Day will be determined by the Lender in accordance with market practice in the Relevant Interbank Market (and if quotations would normally be given by leading banks in the Relevant Interbank Market on more than one day, the Quotation Day will be the last of those days).
" Receiver " means a receiver or receiver and manager or administrative receiver of the whole or any part of the Security Assets.
" Reference Bank Quotation " means any quotation supplied to the Lender by a Reference Bank.
" Reference   Bank   Rate " means the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Lender at its request by the Reference Banks:
(a) (other than where paragraph (b) below applies) as the rate at which the relevant Reference Bank could borrow funds in the London interbank market in dollars for the relevant period were it to do so by asking for and then accepting interbank offers for deposits in reasonable market size in that currency and for that period; or
(b) if different, as the rate (if any and applied to the relevant Reference Bank and the relevant currency and period) which contributors to the Screen Rate are asked to submit to the relevant administrator.
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" Reference   Banks " means in relation to LIBOR such banks as may be appointed by the Lender in consultation with the Borrowers.
" Related   Fund " in relation to a fund (the "first fund"), means a fund which is managed or advised by the same investment manager or investment adviser as the first fund or, if it is managed by a different investment manager or investment adviser, a fund whose investment manager or investment adviser is an Affiliate of the investment manager or investment adviser of the first fund.
" Relevant   Interbank   Market " means the London interbank market.
" Relevant   Jurisdiction " means, in relation to a Transaction Obligor:
(a) its jurisdiction of incorporation;
(b) any jurisdiction where any asset subject to, or intended to be subject to, any of the Transaction Security created, or intended to be created, by it is situated;
(c) any jurisdiction where it conducts its business; and
(d) the jurisdiction whose laws govern the perfection of any of the Security Documents entered into by it.
" Repayment   Date " means each date on which a Repayment Instalment is required to be paid under Clause 6.1 ( Repayment of Loan ).
" Repayment   Instalment " has the meaning given to it in Clause 6.1 ( Repayment of Loan ).
" Repeating   Representation " means each of the representations set out in Clause 19 ( Representations ) except Clause 19.10 ( Insolvency ), Clause 19.11 ( No filing or stamp taxes ) and Clause 19.12 ( Deduction of Tax ) and any representation of any Transaction Obligor made in any other Finance Document that is expressed to be a "Repeating Representation" or is otherwise expressed to be repeated.
" Representative " means any delegate, agent, manager, administrator, nominee, attorney, trustee or custodian.
" Requisition " means, in relation to a Ship:
(a) any expropriation, confiscation, requisition or acquisition of that Ship, whether for full consideration, a consideration less than its proper value, a nominal consideration or without any consideration, which is effected by any government or official authority or by any person or persons claiming to be or to represent a government or official authority (excluding a requisition for hire for a fixed period not exceeding one year without any right to an extension) unless it is within 45 days redelivered to the full control of the relevant Borrower; and
(b) any arrest, capture, seizure or detention of that Ship (including any hijacking or theft) unless it is within 45 days redelivered to the full control of the relevant Borrower.
" Requisition   Compensation " includes all compensation or other moneys payable by reason of any Requisition.
" Safety   Management   Certificate " has the meaning given to it in the ISM Code.
" Safety   Management   System " has the meaning given to it in the ISM Code.
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" Sanctions " means any sanctions, embargoes, freezing provisions, prohibitions or other restrictions relating to trading, doing business, investment, exporting, financing or making assets available (or other activities similar to or connected with any of the foregoing):
(a) imposed by law or regulation of the United Kingdom, the Council of the European Union, the United Nations or its Security Council or the United States of America regardless of whether the same is or is not binding on any Transaction Obligor; or
(b) otherwise imposed by any law or regulation binding on a Transaction Obligor or to which a Transaction Obligor is subject (which shall include without limitation, any extra-territorial sanctions imposed by law or regulation of the United States of America).
" Screen   Rate " means the London interbank offered rate administered by ICE Benchmark Administration Limited (or any other person which takes over the administration of that rate) for dollars for the relevant period displayed (before any correction, recalculation or republication by the administrator) on page LIBOR01 of the Thomson Reuters screen (or any replacement Thomson Reuters page which displays that rate) or on the appropriate page of such other information service which publishes that rate from time to time in place of Thomson Reuters. If such page or service ceases to be available, the Lender may specify another page or service displaying the relevant rate after consultation with the Borrowers.
" Seanergy Management " means Seanergy Management Corp., a corporation incorporated in the Republic of the Marshall Islands having its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Islands, Majuro, Marshall Islands, MH96960.
" Seanergy Shipmanagement " means Seanergy Shipmanagement Corp., a corporation incorporated in the Republic of the Marshall Islands having its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Islands, Majuro, Marshall Islands, MH96960.
" Secured   Liabilities " means all present and future obligations and liabilities, (whether actual or contingent and whether owed jointly or severally or in any other capacity whatsoever) of each Transaction Obligor to the Lender under or in connection with each Finance Document.
" Security " means a mortgage, pledge, lien, charge, assignment, hypothecation or security interest or any other agreement or arrangement having the effect of conferring security.
" Security Assets " means all of the assets of the Transaction Obligors which from time to time are, or are expressed to be, the subject of the Transaction Security.
" Security Cover Ratio " means, at any relevant time during the Security Period, the ratio (expressed as a percentage) of the aggregate Market Value of the Ships then subject to a Mortgage plus the net realisable value of any additional Security previously provided under Clause 25 ( Security Cover ) to the aggregate of the Loan and the cost (if any) of terminating any transactions entered into under the Hedging Agreement, as determined by the Lender pursuant to Clause 25.1 ( Minimum required security cover ).
" Security Document " means:
(a) any Shares Security;
(b) any Mortgage;
(c) any Deed of Covenant;
(d) any General Assignment;
(e) any Charterparty Assignment;
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(f) any Account Security;
(g) any Manager's Undertaking;
(h) the Hedging Agreement Security;
(i) any other document (whether or not it creates Security) which is executed as security for the Secured Liabilities; or
(j) any other document designated as such by the Lender and the Borrowers.
" Security   Period " means the period starting on the date of this Agreement and ending on the date on which the Lender is satisfied that there is no outstanding Commitment in force and that the Secured Liabilities have been irrevocably and unconditionally paid and discharged in full.
" Security   Property " means:
(a) the Transaction Security expressed to be granted in favour of the Lender and all proceeds of that Transaction Security;
(b) all obligations expressed to be undertaken by a Transaction Obligor to pay amounts in relation to the Secured Liabilities to the Lender and secured by the Transaction Security together with all representations and warranties expressed to be given by a Transaction Obligor or any other person in favour of the Lender; and
(c) the Lender's interest in any turnover trust created under the Finance Documents.
" Selection   Notice " means a notice substantially in the form set out in Part B of Schedule 3 ( Requests ) given in accordance with Clause 9 ( Interest Period ).
" Seller " means, in relation to:-
(a) Ship A, Cape Cod Marine Inc. a company incorporated in the British Virgin Islands whose registered office is at P.O. Box 3174, Road Town, Tortola, British Virgin Islands;
(b) Ship B, Lendal International Investments Inc. a company incorporated in the British Virgin Islands whose registered office is at P.O. Box 3174, Road Town, Tortola, British Virgin Islands; and
(c) Ship C, Islay Services Inc. a company incorporated in the British Virgin Islands whose registered office is at P.O. Box 3174, Road Town, Tortola, British Virgin Islands.
" Shares   Security " means, in relation to a Borrower, a document creating Security over the share capital in that Borrower in agreed form.
" Ship " means Ship A, Ship B or Ship C.
" Ships " means together Ship A, Ship B and Ship C.
" Ship   A " means m.v. "GENEROUS" (to be renamed "PREMIERSHIP"), details of which are set out opposite its name in Schedule 5 ( Details of the Ships ).
" Ship   B " means m.v "ASSOS STRIKER" (to be renamed "GLADIATORSHIP"), details of which are set out opposite its name in Schedule 5 ( Details of the Ships ).
" Ship   C " means m.v "MYSTIC STRIKER" (to be renamed "GUARDIANSHIP"), details of which are set out opposite its name in Schedule 5 ( Details of the Ships ).
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" Specified   Time " means a day or time determined in accordance with Schedule 6 ( Timetables ).
" Subsidiary " means a subsidiary within the meaning of section 1159 of the Companies Act 2006.
" Tax " means any tax, levy, impost, duty or other charge or withholding of a similar nature (including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same).
" Tax   Credit " has the meaning given to it in Clause 12.1 ( Definitions ).
" Tax   Deduction " has the meaning given to it in Clause 12.1 ( Definitions ).
" Tax   Payment " has the meaning given to it in Clause 12.1 ( Definitions ).
" Technical Management Agreement " means the agreement entered into between a Borrower and the Approved Technical Manager regarding the technical management of a Ship.
" Testing Date " has the meaning given to it in Clause 21.2 ( Testing Date ).
" Termination   Date " means 28 December 2020.
" Third   Parties   Act " has the meaning given to it in Clause 1.5 ( Third party rights ).
" Total   Loss " means, in relation to a Ship:
(a) actual, constructive, compromised, agreed or arranged total loss of that Ship; or
(b) any Requisition.
" Total Loss Date " means, in relation to the Total Loss of a Ship:
(a) in the case of an actual loss of that Ship, the date on which it occurred or, if that is unknown, the date when that Ship was last heard of;
(b) in the case of a constructive, compromised, agreed or arranged total loss of that Ship, the earlier of:
(i) the date on which a notice of abandonment is given to the insurers; and
(ii) the date of any compromise, arrangement or agreement made by or on behalf of the relevant Borrower with that Ship's insurers in which the insurers agree to treat that Ship as a total loss; and
(c) in the case of any other type of total loss, the date (or the most likely date) on which it appears to the Lender that the event constituting the total loss occurred.
" Tranche " means Tranche A, Tranche B or Tranche C.
" Tranche   A " means that part of the Loan made or to be made available to Borrower A to finance part of the Purchase Price of Ship A in a principal amount not exceeding the Maximum Tranche A Amount.
" Tranche   B " means that part of the Loan made or to be made available to Borrower B to finance part of the Purchase Price of Ship B in a principal amount not exceeding the Maximum Tranche B Amount.
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" Tranche   C " means that part of the Loan made or to be made available to Borrower C to finance part of the Purchase Price of Ship C in a principal amount not exceeding the Maximum Tranche C Amount.
" Transaction Document " means:
(a) a Finance Document;
(b) any Charter;
(c) any MOA;
(d) any Management Agreement; or
(e) any other document designated as such by the Lender and a Borrower.
" Transaction Obligor " means an Obligor and any Approved Manager (being a member of the Group and, for the avoidance of doubt, any Approved Manager who is not a member of the Group shall not be deemed a Transaction Obligor solely because it is a party to a Transaction Document) who executes a Transaction Document.
" Transaction Security" means the Security created or evidenced or expressed to be created or evidenced under the Security Documents.
" Transfer   Date " means, in relation to an assignment, the later of:
(a) the proposed transfer date specified in the Assignment Agreement; and
(b) the date on which the parties to the Assignment Agreement have all executed, and agreed to be bound by, the Assignment Agreement.
" UK   Establishment " means a UK establishment as defined in the Overseas Regulations.
" Unpaid   Sum " means any sum due and payable but unpaid by a Transaction Obligor under the Finance Documents.
" US " means the United States of America.
" US Tax Obligor " means:
(a) a Borrower which is resident for tax purposes in the US; or
(b) a Transaction Obligor some or all of whose payments under the Finance Documents are from sources within the US for US federal income tax purposes.
" Utilisation " means a utilisation of the Facility.
" Utilisation   Date " means the date of a Utilisation, being the date on which the relevant Advance is to be made.
" Utilisation   Request " means a notice substantially in the form set out in Part A of Schedule 3 ( Requests ).
" VAT " means:
(a) any tax imposed in compliance with the Council Directive of 28 November 2006 on the common system of value added tax (EC Directive 2006/112); and
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(b) any other tax of a similar nature, whether imposed in a member state of the European Union in substitution for, or levied in addition to, such tax referred to in paragraph (a) above, or imposed elsewhere.
V. Ships " means V. Ships Limited a corporation organised and existing under the laws of the Republic of Cyprus whose registered office is at Zenas Gunther, 16-18, Agia Triada, 3035 Limassol, Cyprus.
1.2 Construction
(a) Unless a contrary indication appears, a reference in this Agreement to:
(i) the " Lender ", any " Obligor ", any " Party ", any " Transaction   Obligor " or any other person shall be construed so as to include its successors in title and permitted assigns;
(ii) " assets " includes present and future properties, revenues and rights of every description;
(iii) " continuing Event of Default "  means an Event of Default which has not been remedied or waived;
(iv) " continuing Potential Event of Default " means a Potential Event of Default which has not been remedied or waived;
(v) a liability which is " contingent " means a liability which is not certain to arise and/or the amount of which remains unascertained;
(vi) " document " includes a deed and also a letter, fax or telex;
(vii) " expense " means any kind of cost, charge or expense (including all legal costs, charges and expenses) and any applicable Tax including VAT;
(viii) a " Finance Document ", a " Security Document " or " Transaction Document " or any other agreement or instrument is a reference to that Finance Document, Security Document or Transaction Document or other agreement or instrument as amended or novated;
(ix) " indebtedness " includes any obligation (whether incurred as principal or as surety) for the payment or repayment of money, whether present or future, actual or contingent;
(x) " law " includes any order or decree, any form of delegated legislation, any treaty or international convention and any regulation or resolution of the Council of the European Union, the European Commission, the United Nations or its Security Council;
(xi) " proceedings " means, in relation to any enforcement provision of a Finance Document, proceedings of any kind, including an application for a provisional or protective measure;
(xii) a " person " includes any individual, firm, company, corporation, government, state or agency of a state or any association, trust, joint venture, consortium, partnership or other entity (whether or not having separate legal personality);
(xiii) a " regulation " includes any regulation, rule, official directive, request or guideline (either having the force of law or compliance with which is customary in the ordinary course of business) of any governmental, intergovernmental or
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supranational body, agency, department or regulatory, self-regulatory or other authority or organisation;
(xiv) a provision of law is a reference to that provision as amended or re-enacted;
(xv) a time of day is a reference to London time;
(xvi) any English legal term for any action, remedy, method of judicial proceeding, legal document, legal status, court, official or any legal concept or thing shall, in respect of a jurisdiction other than England, be deemed to include that which most nearly approximates in that jurisdiction to the English legal term;
(xvii) words denoting the singular number shall include the plural and vice versa; and
(xviii) " including " and " in   particular " (and other similar expressions) shall be construed as not limiting any general words or expressions in connection with which they are used.
(b) The determination of the extent to which a rate is " for a period equal in length " to an Interest Period shall disregard any inconsistency arising from the last day of that Interest Period being determined pursuant to the terms of this Agreement.
(c) Section, Clause and Schedule headings are for ease of reference only and are not to be used for the purposes of construction or interpretation of the Finance Documents.
(d) Unless a contrary indication appears, a term used in any other Finance Document or in any notice given under, or in connection with, any Finance Document has the same meaning in that Finance Document or notice as in this Agreement.
1.3 Construction of insurance terms
In this Agreement:
" approved " means, for the purposes of Clause 23 ( Insurance Undertakings ), approved in writing by the Lender;
" excess   risks " means, in respect of a Ship, the proportion of claims for general average, salvage and salvage charges not recoverable under the hull and machinery policies in respect of that Ship in consequence of its insured value being less than the value at which that Ship is assessed for the purpose of such claims;
" obligatory   insurances " means all insurances effected, or which any Borrower is obliged to effect, under Clause 23 ( Insurance Undertakings ) or any other provision of this Agreement or of another Finance Document;
" policy " includes a slip, cover note, certificate of entry or other document evidencing the contract of insurance or its terms;
" protection   and   indemnity   risks " means the usual risks covered by a protection and indemnity association managed in London, including pollution risks and the proportion (if any) of any sums payable to any other person or persons in case of collision which are not recoverable under the hull and machinery policies by reason of the incorporation in them of clause 6 of the International Hull Clauses (1/11/02) (1/11/03), clause 8 of the Institute Time Clauses (Hulls) (1/10/83) (1/11/95) or the Institute Amended Running Down Clause (1/10/71) or any equivalent provision; and
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" war   risks " includes the risk of mines and all risks excluded by clause 29 of the International Hull Clauses (1/11/02 or 1/11/03), clause 24 of the Institute Time Clauses (Hulls) (1/11/95) or clause 23 of the Institute Time Clauses (Hulls) (1/10/83).
1.4 Agreed forms of Finance Documents
References in Clause 1.1 ( Definitions ) to any Finance Document being in "agreed form" are to that Finance Document:
(a) in a form attached to a certificate dated the same date as this Agreement (and signed by each Borrower and the Lender); or
(b) in any other form agreed in writing between each Borrower and the Lender.
1.5 Third party rights
(a) Unless expressly provided to the contrary in a Finance Document, a person who is not a Party has no right under the Contracts (Rights of Third Parties) Act 1999 (the " Third Parties Act ") to enforce or to enjoy the benefit of any term of this Agreement.
(b) Subject to paragraph (c) below but otherwise notwithstanding any term of any Finance Document, the consent of any person who is not a Party is not required to rescind or vary this Agreement at any time.
(c) An amendment or waiver which adversely affects the rights or obligations of a Reference Bank may not be effected without the consent of that Reference Bank.
(d) Any Affiliate, Receiver or Delegate may, subject to this Clause 1.5 ( Third party rights ) and the Third Parties Act, rely on any Clause of this Agreement which expressly confers rights on it.
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SECTION 2

THE FACILITY
2 THE FACILITY
2.1 The Facility
Subject to the terms of this Agreement, the Lender makes available to the Borrowers a dollar term loan facility in three Tranches in an aggregate amount not exceeding the Commitment.
2.2 Borrowers' Agent
(a) Each Borrower by its execution of this Agreement irrevocably appoints the Guarantor to act on its behalf as its agent in relation to the Finance Documents and irrevocably authorises:
(i) the Guarantor on its behalf to supply all information concerning itself contemplated by this Agreement to the Lender and to give all notices and instructions (including Utilisation Requests), to make such agreements and to effect the relevant amendments, supplements and variations capable of being given, made or effected by any Borrower notwithstanding that they may affect the Borrower, without further reference to or the consent of that Borrower; and
(ii) the Lender to give any notice, demand or other communication to that Borrower pursuant to the Finance Documents to the Guarantor,
and in each case the Borrower shall be bound as though the Borrower itself had given the notices and instructions (including, without limitation, any Utilisation Requests) or executed or made the agreements or effected the amendments, supplements or variations, or received the relevant notice, demand or other communication.
(b) Every act, omission, agreement, undertaking, settlement, waiver, amendment, supplement, variation, notice or other communication given or made by the Guarantor or given to the Guarantor under any Finance Document on behalf of a Borrower or in connection with any Finance Document (whether or not known to any Borrower) shall be binding for all purposes on that Borrower as if that Borrower had expressly made, given or concurred with it. In the event of any conflict between any notices or other communications of the Guarantor and any Borrower, those of the Guarantor shall prevail.
3 PURPOSE
3.1 Purpose
Each Borrower shall apply all amounts borrowed by it under the Facility only for the purpose stated in the preamble (Background) to this Agreement.
3.2 Monitoring
The Lender is not bound to monitor or verify the application of any amount borrowed pursuant to this Agreement.
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4 CONDITIONS OF UTILISATION
4.1 Initial conditions precedent
The Borrowers may not deliver a Utilisation Request unless the Lender has received all of the documents and other evidence listed in Part A of Schedule 2 ( Conditions Precedent ) in form and substance satisfactory to the Lender.
4.2 Further conditions precedent
The Lender will only be obliged to comply with Clause 5.4 ( Advances ) if:
(a) on the date of the Utilisation Request and on the proposed Utilisation Date and before the Advance is made available:
(i) no Event of Default or Potential Event of Default is continuing or would result from the proposed Advance;
(ii) there has not been a Material Adverse Effect relating to an Obligor;
(iii) the Repeating Representations to be made by each Transaction Obligor are true;
(iv) in the case of an Advance under a Tranche, the Ship in respect of which such Advance is to be made has neither been sold nor become a Total Loss; and
the provisions of paragraph (b) of Clause 10.3 ( Market disruption ) do not apply;
(b) in the case of the Advance under a Tranche, the Lender has received on or before the relevant Utilisation Date, or is satisfied it will receive when the Advance is made available, all of the documents and other evidence listed in Part B of Schedule 2 ( Conditions Precedent ) in form and substance satisfactory to the Lender.
4.3 Notification of satisfaction of conditions precedent
The Lender shall notify the Borrowers promptly upon being satisfied as to the satisfaction of the conditions precedent referred to in Clause 4.1 ( Initial conditions precedent ) and Clause 4.2 ( Further conditions precedent ).
4.4 Waiver of conditions precedent
If the Lender, at its discretion, permits an Advance to be borrowed before any of the conditions precedent referred to in Clause 4.1 ( Initial conditions precedent ) or Clause 4.2 ( Further conditions precedent ) has been satisfied, the Borrowers shall ensure that that condition is satisfied within five Business Days after the relevant Utilisation Date or such later date as the Lender may agree in writing with the Borrowers.
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SECTION 3

UTILISATION
5 UTILISATION
5.1 Delivery of a Utilisation Request
(a) The Borrowers may utilise the Facility by delivery to the Lender of a duly completed Utilisation Request not later than the Specified Time.
(b) The Borrowers may not deliver more than one Utilisation Request under each Tranche.
5.2 Completion of a Utilisation Request
Each Utilisation Request is irrevocable and will not be regarded as having been duly completed unless:
(i) the proposed Utilisation Date is a Business Day within the relevant Availability Period;
(ii) the currency and amount of the Utilisation comply with Clause 5.3 ( Currency and amount ); and
(iii) the proposed Interest Period complies with Clause 9 ( Interest Periods ).
5.3 Currency and amount
(a) The currency specified in an Utilisation Request must be dollars.
(b) The amount of the proposed Advance must be an amount which does not exceed the relevant Maximum Tranche Amount.
(c) The amount of the proposed Advance must be an amount which is not more than the Available Facility.
5.4 Advances
If the conditions set out in this Agreement have been met, the Lender shall make each Advance available by the Utilisation Date through its Facility Office.
5.5 Cancellation of Commitment
The Commitment in respect of any Tranche which is unutilised at the end of the Availability Period for such Tranche shall then be cancelled.
5.6 Payment to third parties
The Lender shall, on each Utilisation Date, pay to, or for the account of, the relevant Borrower which is to utilise the relevant Advance, the amount such Advance.  That payment shall be made, in the case of a Tranche, to the account of the Seller which the Borrowers specify in the relevant Utilisation Request.
5.7 Disbursement of Advance to third party
A payment by the Lender under Clause 5.6 ( Payment to third parties ) to a person other than a Borrower shall constitute the making of the relevant Advance and the Borrowers shall at
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that time become indebted, as principal and direct obligor, to the Lender in an amount equal to that Advance.
5.8 Prepositioning of funds
If, in respect of any proposed Advance under a Tranche, the Lender, at the request of the Borrowers and on terms acceptable to the Lender and in its absolute discretion, prepositions funds with any bank, each Borrower and the Guarantor shall, without duplication, indemnify the Lender against any costs, loss or liability it may incur in connection with such arrangement. Any Utilisation made pursuant to this Clause shall be deemed to be effected on the Delivery Date.
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SECTION 4

REPAYMENT, PREPAYMENT AND CANCELLATION
6 REPAYMENT
6.1 Repayment of Loan
The Borrowers shall repay the Loan in the following instalments on the following dates (all of which shall be a " Repayment Instalment "):
Date
Repayment Instalment Amount ($)
26 June 2017
1,552,000
25 September 2017
1,552,000
27 December 2017
1,552,000
26 March 2018
1,552,000
25 June 2018
1,552,000
25 September 2018
1,552,000
27 December 2018
1,552,000
26 March 2019
1,552,000
25 June 2019
1,552,000
25 September 2019
1,552,000
27 December 2019
1,552,000
26 March 2020
1,552,000
25 June 2020
1,552,000
25 September 2020
1,552,000
28 December 2020
30,976,790
6.2 Reduction of Repayment Instalments
If any part of the Facility is cancelled, the Repayment Instalments falling after that cancellation shall be reduced in inverse chronological order by the amount cancelled.
6.3 Termination Date
On the Termination Date, the Borrowers shall additionally pay to the Lender all other sums then accrued and owing under the Finance Documents.
6.4 Reborrowing
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No Borrower may reborrow any part of the Facility which is repaid.
7 PREPAYMENT AND CANCELLATION
7.1 Illegality
If it becomes unlawful in any applicable jurisdiction for the Lender to perform any of its obligations as contemplated by this Agreement or to fund or maintain all or any part of the Loan or it becomes unlawful for any Affiliate of the Lender for the Lender to do so:
(i) the Lender shall promptly notify the Borrowers  upon becoming aware of that event and the Available Facility will be immediately cancelled; and
(ii) the Borrowers shall prepay the Loan on the last day of the Interest Period for the Loan occurring after the Lender has notified the Borrowers or, if earlier, the date specified by the Lender in the notice delivered to the Borrowers (being no earlier than the last day of any applicable grace period permitted by law) and the Commitment shall be cancelled.
7.2 Voluntary and automatic cancellation
(a) The Borrowers may, if they give the Lender not less than 5 Business Days' (or such shorter period as the Lender may agree) prior notice, cancel the whole or any part (being a minimum amount of $250,000 or a multiple thereof) of the Available Facility.  Any cancellation under this Clause 7.2 ( Voluntary and automatic cancellation ) shall reduce the amount of the Commitment then unutilised rateably.
(b) The unutilised Commitment (if any) shall be automatically cancelled at close of business on the date on which the last Advance is made available.
7.3 Voluntary prepayment of Loan
(a) Subject to paragraph (b) below, the Borrowers may, if they give the Lender not less than 5 Business Days' (or such shorter period as the Lender may agree) prior notice, prepay the whole or any part of the Loan (but, if in part, being an amount that reduces the amount of the Loan by a minimum amount of $250,000 or a multiple of that amount).
(b) The Loan may only be prepaid after the last day of the Availability Period (or, if earlier, the day on which the Available Facility is zero).
(c) Any partial prepayment under this Clause 7.3 ( Voluntary prepayment of Loan ) shall reduce in inverse chronological order the amount of each Repayment Instalment falling after that prepayment by the amount prepaid.
7.4 Mandatory prepayment on sale or Total Loss
(a) If a Ship is sold or becomes a Total Loss, the Borrowers shall on the Relevant Date prepay the Relevant Percentage of the Loan.
(b) On the Relevant Date, the Borrowers shall also prepay such part of the Loan as shall eliminate any shortfall arising if the ratio set out in Clause 25 ( Security Cover ) were applied immediately following the payment referred to in paragraph (a) above.
(c) Provided that no Event of Default has occurred and is continuing, any remaining proceeds of the sale or Total Loss of a Ship after the prepayments referred to in paragraph (a) and paragraph (b) above have been made together with all other amounts that are payable on any such prepayment pursuant to the Finance Documents shall be paid to the Borrower that owned the relevant Ship.
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(d) In this Clause 7.4 ( Mandatory prepayment on sale or Total Loss ):
" Index   Amount " means, in relation to each Ship, as at the Relevant Date, the amount of the Market Value for that Ship as shown in the then most recent valuation of that Ship, provided to the Lender pursuant to this Agreement.
" Relevant   Date " means:
(i) in the case of a sale of a Ship, on the date on which the sale is completed by delivery of that Ship to the buyer of that Ship; and
(ii) in the case of a Total Loss of a Ship, on the earlier of:
(A) the date falling 90 days after the Total Loss Date; and
(B) the date of receipt by the Lender of the proceeds of insurance relating to such Total Loss.
" Relevant   Percentage " means: an amount calculated by reference to the following formula:
Relevant Percentage                                              =          A x 100
B      1

Where:
A              =              the Index Amount of the Ship to be sold or which becomes a Total Loss; and
B              =              the aggregate amount of the Index Amounts of the Ships (excluding any Ship already sold or which has already become a Total Loss in respect of which a prepayment has been made under this Clause 7.4 ( Mandatory prepayment on sale or Total Loss ) before the Relevant Date).
(e) Any partial prepayment of the Loan under this Clause 7.4 ( Mandatory prepayment on sale or Total Loss ) shall reduce in inverse chronological order the amount of each Repayment Instalment falling after that prepayment by the amount prepaid.
7.5 Mandatory prepayment on Change of Ownership
(a) if a Change of Ownership occurs (without the prior written consent of the Lender) after the date of this Agreement, the Lender shall, by not less than 5 days' notice to Borrowers, cancel the Facility and declare the Loan, together with accrued interest, and all other amounts accrued under the Finance Documents immediately due and payable whereby the Facility will be cancelled and all such outstanding amounts will become immediately due and payable.
(b) The Borrowers shall give written notice to the Lender immediately upon the occurrence of a Change of Ownership.
For the purposes of this Clause 7.5:
" Change of Ownership " means any change in the legal or beneficial ownership of the Guarantor which would result in (i) the Disclosed Person ceasing to be the ultimate beneficial owner of at least 40 per cent of either the (A) issued shares in the Guarantor and the voting rights attached to such shares and/or (B) the voting rights attached to any of the issued shares in the Guarantor which are not owned by the Disclosed Person, or (ii) any other person or company being the ultimate beneficial owner (either directly or indirectly) of a higher percentage of (A) ownership of the issued shares in the Guarantor and the voting
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rights attached to such shares and/or (B) the voting rights in the issued shares of the Guarantor, from that held by the Disclosed Person at any time during the Security Period.
7.6 Mandatory prepayment of Hedging Payment Proceeds
Any Hedging Prepayment Proceeds arising as a result of any cancellation or prepayment under this Agreement shall, following payment into an Earnings Account held in the name of a Borrower in accordance with Clause 26.1 ( Payment of Earnings ), be applied on the last day of the Interest Period which ends on or after such payment in, in prepayment of the Loan and shall reduce in inverse chronological order the amount of each Repayment Instalment falling after that prepayment by the amount prepaid.
7.7 Restrictions
(a) Any notice of cancellation or prepayment given by any Party under this Clause 7 ( Prepayment and Cancellation ) shall be irrevocable and, unless a contrary indication appears in this Agreement, shall specify the date or dates upon which the relevant cancellation or prepayment is to be made and the amount of that cancellation or prepayment.
(b) Any prepayment under this Agreement shall be made together with accrued interest on the amount prepaid and amounts (if any) payable under the Hedging Agreement in connection with that prepayment and, subject to any Break Costs, without premium or penalty.
(c) No Borrower may reborrow any part of the Facility which is prepaid.
(d) No Borrower shall repay or prepay all or any part of the Loan or cancel all or any part of the Commitment except at the times and in the manner expressly provided for in this Agreement.
(e) No amount of the Commitment cancelled under this Agreement may be subsequently reinstated.
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SECTION 5

COSTS OF UTILISATION
8 INTEREST
8.1 Calculation of interest
The rate of interest on the Loan or any part of the Loan for each Interest Period is the percentage rate per annum which is the aggregate of:
(a) the then Applicable Margin; and
(b) LIBOR
For the purposes of determining the Applicable Margin under this Clause 8.1, the Lender shall test the Security Cover Ratio under Clause 25.1 ( Minimum required security cover ) on the date of the first Utilisation Request and at consecutive semi-annual intervals thereafter throughout the Security Period, and the Borrowers shall provide the Lender, together with the first Utilisation Request and each relevant Selection Notice (as the case may be), with a valuation of each Ship then subject to a Mortgage to enable the Lender to assess the aggregate Market Value of the Ships, each such valuation to be at the Borrowers' cost.
8.2 Payment of interest
(a) The Borrowers shall pay accrued interest on the Loan or any part of the Loan on the last day of each Interest Period (each an " Interest   Payment   Date ").
(b) If an Interest Period is longer than three Months, the Borrowers shall also pay interest then accrued on the Loan or the relevant part of the Loan on the dates falling at three Monthly intervals after the first day of the Interest Period.
8.3 Default interest
(a) If a Transaction Obligor fails to pay any amount payable by it under a Finance Document on its due date, interest shall accrue on the Unpaid Sum from the due date up to the date of actual payment (both before and after judgment) at a rate which, subject to paragraph (b) below, is 2 per cent. per annum higher than the rate which would have been payable if the Unpaid Sum had, during the period of non-payment, constituted part of the Loan in the currency of the Unpaid Sum for successive Interest Periods, each of a duration selected by the Lender. Any interest accruing under this Clause 8.3 ( Default interest ) shall be immediately payable by the Obligor on demand by the Lender.
(b) If an Unpaid Sum consists of all or part of the Loan which became due on a day which was not the last day of an Interest Period relating to the Loan or that part of the Loan:
(i) the first Interest Period for that Unpaid Sum shall have a duration equal to the unexpired portion of the current Interest Period relating to the Loan or that part of the Loan; and
(ii) the rate of interest applying to that Unpaid Sum during that first Interest Period shall be 2 per cent. per annum higher than the rate which would have applied if that Unpaid  Sum had not become due.
(c) Default interest (if unpaid) arising on an Unpaid Sum will be compounded with the Unpaid Sum at the end of each Interest Period applicable to that Unpaid Sum but will remain immediately due and payable.
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8.4 Notification of rates of interest
The Lender shall promptly notify the Borrowers of the determination of a rate of interest under this Agreement.
8.5 Hedging
(a) On or before the first Utilisation Date, the Borrowers shall enter into the Hedging Agreement with the Lender acting as swap bank and the Lender shall have the right of first refusal to enter into any interest rate swaps with the Borrowers for the purposes of hedging the Borrowers' exposure under the Loan, and shall after that date maintain the Hedging Agreement in accordance with this Clause 8.5 ( Hedging ).
(b) The aggregate notional amount of the transactions in respect of the Hedging Agreement shall not exceed the Loan.
(c) The Hedging Agreement shall:
(i) be with the Lender (acting as swap bank);
(ii) be for a term ending on the Termination Date;
(iii) have settlement dates coinciding with the Interest Payment Dates;
(iv) be in agreed form;
(v) provide for two-way payments in the event of a termination of a transaction in respect of the Hedging Agreement, whether on a Termination Event (as defined in the Hedging Agreement) or on an Event of Default (as defined in the Hedging Agreement); and
(vi) provide that the Termination Currency (as defined in the Hedging Agreement) shall be dollars.
(d) The rights of each Borrower under the Hedging Agreement shall be charged by way of security under the Hedging Agreement Security.
(e) If, at any time, the aggregate notional principal amount of the transactions in respect of the Hedging Agreement exceeds or, as a result of any repayment or prepayment under this Agreement, will exceed the Loan at that time, the Borrowers must, at the request of the Lender, reduce the aggregate notional amount of those transactions by an amount and in a manner satisfactory to the Lender so that it no longer exceeds or will not exceed the Loan then or that will be outstanding.
(f) Any reductions in the aggregate notional amount of the transactions in respect of the Hedging Agreement in accordance with paragraph (e) above will be apportioned as between those transactions pro rata .
(g) Paragraph (e) above shall not apply to any transactions in respect of the Hedging Agreement under which the Borrowers do not have any actual or contingent indebtedness.
9 INTEREST PERIODS
9.1 Selection of Interest Periods
(a) The Borrowers may select the Interest Period for the Loan in the Utilisation Request for the first Advance.  Subject to paragraph (f) below and Clause 9.2 ( Changes to Interest Periods ),
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the Borrowers may select each subsequent Interest Period in respect of the Loan in a Selection Notice.
(b) Each Selection Notice is irrevocable and must be delivered to the Lender by the Borrowers not later than the Specified Time.
(c) If the Borrowers fail to select an Interest Period in the first Utilisation Request or fail to deliver a Selection Notice to the Lender in accordance with paragraphs (a) and (b) above, the relevant Interest Period will, subject to paragraph (f) below and Clause 9.2 ( Changes to Interest Periods ), be three Months.
(d) Subject to this Clause 9.1 ( Selection of Interest Periods ), the Borrowers may select an Interest Period of two, three, six or twelve Months or any other period agreed between the Borrowers and the Lender.
(e) An Interest Period in respect of the Loan shall not extend beyond the Termination Date.
(f) In respect of a Repayment Instalment, an Interest Period for a part of the Loan equal to such Repayment Instalment shall end on the Repayment Date relating to it if such date is before the end of the Interest Period then current.
(g) The first Interest Period for the Loan shall start on the first Utilisation Date and each subsequent Interest Period shall start on the last day of the preceding Interest Period.
(h) Except for the purposes of paragraph (f) above and Clause 9.2 ( Changes to Interest Periods ), the Loan shall have one Interest Period only at any time.
9.2 Changes to Interest Periods
(a) In respect of a Repayment Instalment, prior to determining the interest rate for the Loan, the Lender may establish an Interest Period for a part of the Loan equal to such Repayment Instalment to end on the Repayment Date relating to it and the remaining part of the Loan shall have the Interest Period selected in the relevant Selection Notice, subject to paragraph (d) of Clause 9.1 ( Selection of Interest Periods ).
(b) If after the Borrowers have selected and the Lender has agreed an Interest Period longer than six Months, the Lender notifies Borrowers within two Business Days after the Specified Time relating to the relevant Utilisation Request or Selection Notice that it is not satisfied that deposits in dollars for a period equal to the Interest Period will be available to it in the Relevant Interbank Market when the Interest Period commences, the Lender shall shorten the Interest Period to six Months.
(c) If the Lender makes any change to an Interest Period referred to in this Clause 9.2 ( Changes to Interest Periods ), it shall promptly notify the Borrowers.
9.3 Non-Business Days
If an Interest Period would otherwise end on a day which is not a Business Day, that Interest Period will instead end on the next Business Day in that calendar month (if there is one) or the preceding Business Day (if there is not).
10 CHANGES TO THE CALCULATION OF INTEREST
10.1 Unavailability of Screen Rate
(a) Interpolated Screen Rate :  If no Screen Rate is available for LIBOR for the Interest Period of the Loan or any part of the Loan, the applicable LIBOR shall be the Interpolated Screen Rate for a period equal in length to the Interest Period of the Loan or that part of the Loan.
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(b) Reference Bank Rate :  If no Screen Rate is available for LIBOR for:
(i) dollars; or
(ii) the Interest Period of the Loan or any part of the Loan and it is not possible to calculate the Interpolated Screen Rate,
the applicable LIBOR shall be the Reference Bank Rate as of the Specified Time and for a period equal in length to the Interest Period of the Loan or that part of the Loan there shall be no LIBOR for the Loan or that part of the Loan (as applicable) and Clause 10.4 ( Cost of funds ) shall apply to the Loan or that part of the Loan for that Interest Period.
(c) Cost of funds :  If paragraph (b) above applies but no Reference Bank Rate is available for dollars for the relevant Interest Period there shall be no LIBOR for the Loan or that part of the Loan (as applicable) and Clause 10.4 ( Cost of funds ) shall apply to the Loan or that part of the Loan for that Interest Period.
10.2 Calculation of Reference Bank Rate
(a) Subject to paragraph (b) below, if LIBOR is to be determined on the basis of a Reference Bank Rate but a Reference Bank does not supply a quotation by the Specified Time, the Reference Bank Rate shall be calculated on the basis of the quotations of the remaining Reference Banks. The Lender shall provide evidence to the Borrowers about the quotation of the Reference Banks.
(b) If at or about noon on the Quotation Day none or only one of the Reference Banks supplies a quotation, there shall be no Reference Bank Rate for the relevant Interest Period.
10.3 Market disruption
(a) If before close of business in London on the Quotation Day for the relevant Interest Period the Lender notifies the Borrowers that the cost to it of funding the Loan or the relevant part of the Loan from whatever source it may reasonably select then Clause 10.4 ( Cost of funds ) shall apply to the Loan or that part of the Loan (as applicable) for the relevant Interest Period.
(b) If, at least one Business Day before a Utilisation Date, the Lender notifies the Borrowers that for any reason it is unable to obtain dollars in the Relevant Interbank Market in order to fund the relevant Advance, the Lender's obligation to make that Advance shall be suspended while that situation continues.
10.4 Cost of funds
(a) If this Clause 10.4 ( Cost of funds ) applies, the rate of interest on the Loan or the relevant part of the Loan for the relevant Interest Period shall be the percentage rate per annum which is the sum of:
(i) the Applicable Margin; and
(ii) the rate notified by the Lender to the Borrower as soon as practicable and in any event before interest is due to be paid in respect of that Interest Period to be that which expresses as a percentage rate per annum the cost to the Lender of funding the Loan or that part of the Loan from whatever source it may reasonably select.   The Lender shall provide any readily available evidence (if any) or, otherwise, a statement from its treasury department to the Borrowers in respect of the quotation of the selected source.
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(b) If this Clause 10.4 ( Cost of funds ) applies and the Lender or the Borrowers so require, the Lender and the Borrowers shall enter into negotiations (for a period of not more than 30 days) with a view to agreeing a substitute basis for determining the rate of interest or (as the case may be) an alternative basis for funding.
(c) Any substitute or alternative basis agreed pursuant to paragraph (b) above shall, be binding on all Parties.
10.5 Break Costs
The Borrowers shall, within three Business Days of demand by the Lender, pay to the Lender its Break Costs attributable to all or any part of the Loan or an Unpaid Sum being paid by a Borrower on a day other than the last day of an Interest Period for the Loan, the relevant part of the Loan or that Unpaid Sum.
11 FEES
11.1 Commitment fee
(a) The Borrowers shall pay to the Lender a fee computed at the rate of 1 per cent. per annum on the Available Facility from time to time for the Availability Period.
(b) The accrued commitment fee is payable on the last day of each successive period of three Months commencing from 18 August 2015 (being the date of acceptance by the Borrowers of the offer letter in connection with the Facility) and ending on the earlier of (i) 30 November 2015 and (ii) the Utilisation Date in respect of Tranche C or the last Tranche to be advanced, and, if cancelled, on the cancelled amount of the Available Facility at the time the cancellation is effective.
11.2 Front end fee
The Borrowers shall pay to the Lender a non-refundable front end fee in the amount of $263,523.95 on the date of this Agreement.
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SECTION 6

ADDITIONAL PAYMENT OBLIGATIONS
12 TAX GROSS UP AND INDEMNITIES
12.1 Definitions
(a) In this Agreement:
" Tax Credit " means a credit against, relief or remission for, or repayment of any Tax.
" Tax Deduction " means a deduction or withholding for or on account of Tax from a payment under a Finance Document, other than a FATCA Deduction.
" Tax Payment " means either the increase in a payment made by an Obligor to the Lender under Clause 12.2 ( Tax gross-up ) or a payment under Clause 12.3 ( Tax indemnity ).
(b) Unless a contrary indication appears, in this Clause 12 ( Tax Gross Up and Indemnities ) reference to "determines" or "determined" means a determination made in the absolute discretion of the person making the determination.
(c) This Clause 12 ( Tax Gross Up and Indemnities ) shall not apply to the Hedging Agreement.
12.2 Tax gross-up
(a) Each Obligor shall make all payments to be made by it without any Tax Deduction, unless a Tax Deduction is required by law.
(b) The Borrowers shall promptly upon becoming aware that an Obligor must make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction) notify the Lender accordingly. Similarly, the Lender shall notify the Borrowers and that Obligor on becoming so aware in respect of a payment payable to the Lender.
(c) If a Tax Deduction is required by law to be made by an Obligor, the amount of the payment due from that Obligor shall be increased to an amount which (after making any Tax Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction had been required.
(d) If an Obligor is required to make a Tax Deduction, that Obligor shall make that Tax Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by law.
(e) Within 30 days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Obligor making that Tax Deduction shall deliver to the Lender evidence reasonably satisfactory to the Lender that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the relevant taxing authority.
12.3 Tax indemnity
(a) The Obligors shall (within three Business Days of demand by the Lender) pay to the Lender an amount equal to the loss, liability or cost which the Lender determines will be or has been (directly or indirectly) suffered for or on account of Tax by the Lender in respect of a Finance Document.
(b) Paragraph (a) above shall not apply:
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(i) with respect to any Tax assessed on the Lender:
(A) under the law of the jurisdiction in which the Lender is incorporated or, if different, the jurisdiction (or jurisdictions) in which the Lender is treated as resident for tax purposes; or
(B) under the law of the jurisdiction in which the Lender's Facility Office is located in respect of amounts received or receivable in that jurisdiction,
if that Tax is imposed on or calculated by reference to the net income received or receivable (but not any sum deemed to be received or receivable) by the Lender; or
(ii) to the extent a loss, liability or cost:
(A) is compensated for by an increased payment under Clause 12.2 ( Tax gross-up ) ; or
(B) relates to a FATCA Deduction required to be made by a Party.
(c) The Lender shall, if making, or intending to make, a claim under paragraph (a) above, promptly notify the Obligors of the event which will give, or has given, rise to the claim.
12.4 Tax Credit
If an Obligor makes a Tax Payment and the Lender determines that:
(a) a Tax Credit is attributable to an increased payment of which that Tax Payment forms part, to that Tax Payment or to a Tax Deduction in consequence of which that Tax Payment was received; and
(b) the Lender has obtained and utilised that Tax Credit,
the Lender shall pay an amount to the Obligor which the Lender determines will leave it (after that payment) in the same after-Tax position as it would have been in had the Tax Payment not been required to be made by the Obligor.
12.5 Stamp taxes
The Obligors shall pay and, within three Business Days of demand, indemnify the Lender against any cost, loss or liability which the Lender incurs in relation to all stamp duty, registration and other similar Taxes payable in respect of any Finance Document.
12.6 VAT
(a) All amounts expressed to be payable under a Finance Document by any Party to  the Lender which (in whole or in part) constitute the consideration for any supply for VAT purposes are deemed to be exclusive of any VAT which is chargeable on that supply, and accordingly, if VAT is or becomes chargeable on any supply made by the Lender to any Party under a Finance Document and the Lender is required to account to the relevant tax authority for the VAT, that Party must pay to the Lender (in addition to and at the same time as paying any other consideration for such supply) an amount equal to the amount of the VAT (and the Lender must promptly provide an appropriate VAT invoice to that Party).
(b) Where a Finance Document requires any Party to reimburse or indemnify the Lender for any cost or expense, that Party shall reimburse or indemnify (as the case may be) the Lender for the full amount of such cost or expense, including such part of it as represents VAT, save to the extent that the Lender reasonably determines that it is entitled to credit or repayment in respect of such VAT from the relevant tax authority.
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(c) Any reference in this Clause 12.6 ( VAT ) to any Party shall, at any time when that Party is treated as a member of a group or unity (or fiscal unity) for VAT purposes, include (where appropriate and unless the context otherwise requires) a reference to the person who is treated at that time as making the supply, or (as appropriate) receiving the supply, under the grouping rules (provided for in Article 11 of Council Directive 2006/112/EC (or as implemented by the relevant member state of the European Union) so that a reference to a Party shall be construed as a reference to that Party or the relevant group or unity (or fiscal unity) of which that Party is a member for VAT purposes at the relevant time or the relevant representative member (or representative or head) of that group or unity at the relevant time (as the case may be).
(d) In relation to any supply made by the Lender to any Party under a Finance Document, if reasonably requested by the Lender, that Party must promptly provide the Lender with details of that Party's VAT registration and such other information as is reasonably requested in connection with the Lender's VAT reporting requirements in relation to such supply.
12.7 FATCA Information
(a) Subject to paragraph (c) below, each Party shall, within ten Business Days of a reasonable request by another Party:
(i) confirm to that other Party whether it is:
(A) a FATCA Exempt Party; or
(B) not a FATCA Exempt Party; and
(ii) supply to that other Party such forms, documentation and other information relating to its status under FATCA as that other Party reasonably requests for the purposes of that other Party's compliance with FATCA; and
(iii) supply to that other Party such forms, documentation and other information relating to its status as that other Party reasonably requests for the purposes of that other Party's compliance with any other law, regulation or exchange of information regime.
(b) If a Party confirms to another Party pursuant to sub-paragraph (i) of paragraph (a) above that it is a FATCA Exempt Party and it subsequently becomes aware that it is not, or has ceased to be a FATCA Exempt Party, that Party shall notify that other Party reasonably promptly.
(c) Paragraph (a) above shall not oblige the Lender to do anything and sub-paragraph (iii) of paragraph (a) above shall not oblige any other Party to do anything which would or might in its reasonable opinion constitute a breach of:
(i) any law or regulation;
(ii) any fiduciary duty; or
(iii) any duty of confidentiality.
(d) If a Party fails to confirm whether or not it is a FATCA Exempt Party or to supply forms, documentation or other information requested in accordance with sub-paragraphs (i) or (ii) of paragraph (a) above (including, for the avoidance of doubt, where paragraph (c) above applies), then such Party shall be treated for the purposes of the Finance Documents (and payments under them) as if it is not a FATCA Exempt Party until such time as the Party in question provides the requested confirmation, forms, documentation or other information.
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12.8 FATCA Deduction
(a) Each Party may make any FATCA Deduction it is required to make by FATCA, and any payment required in connection with that FATCA Deduction, and no Party shall be required to increase any payment in respect of which it makes such a FATCA Deduction or otherwise compensate the recipient of the payment for that FATCA Deduction.
(b) Each Party shall promptly, upon becoming aware that it must make a FATCA Deduction (or that there is any change in the rate or the basis of such FATCA Deduction), notify the Party to whom it is making the payment.
13 INCREASED COSTS
13.1 Increased costs
(a) Subject to Clause 13.3 ( Exceptions ), the Borrowers shall, within five Business Days of a demand by the Lender, pay for the account of the Lender the amount of any Increased Costs incurred by the Lender or any of its Affiliates as a result of:
(i) the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation; or
(ii) compliance with any law or regulation made,
in each case after the date of this Agreement; or
(iii) the implementation, application of or compliance with Basel III or CRD IV or any law or regulation that implements or applies Basel III or CRD IV,
provided that, following the Lender's demand to the Borrowers pursuant to this Clause 13.1, the Borrowers shall have the right to prepay the Loan then outstanding in full, subject to the provisions of Clause 7.3 paragraphs (a) and (b) ( Voluntary prepayment of Loan ) and Clause 7.7 ( Restrictions ).
(b) In this Agreement,
(i) " Basel III " means:
(A) the agreements on capital requirements, a leverage ratio and liquidity standards contained in "Basel III: A global regulatory framework for more resilient banks and banking systems", "Basel III: International framework for liquidity risk measurement, standards and monitoring" and "Guidance for national authorities operating the countercyclical capital buffer" published by the Basel Committee on Banking Supervision in December 2010, each as amended, supplemented or restated;
(B) the rules for global systemically important banks contained in "Global systemically important banks: assessment methodology and the additional loss absorbency requirement - Rules text" published by the Basel Committee on Banking Supervision in November 2011, as amended, supplemented or restated; and
(C) any further guidance or standards published by the Basel Committee on Banking Supervision relating to "Basel III".
(ii) "CRD IV " means:
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(A) Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26  June 2013 on prudential requirements for credit institutions and investment firms and amending regulation (EU) No. 648/2012;
(B) Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC; and
(C) any other law or regulation which implements Basel III or otherwise enacted by any central bank or the Bank for International Settlements (BIS).
(iii) " Increased Costs " means:
(A) a reduction in the rate of return from the Facility or on the Lender's (or its Affiliate's) overall capital;
(B) an additional or increased cost; or
(C) a reduction of any amount due and payable under any Finance Document,
which is incurred or suffered by the Lender or any of its Affiliates to the extent that it is attributable to the Lender having entered into the Commitment or funding or performing its obligations under any Finance Document.
13.2 Increased cost claims
If the Lender intends to make a claim pursuant to Clause 13.1 ( Increased costs ) it shall promptly notify the Borrowers.
13.3 Exceptions
Clause 13.1 ( Increased costs ) does not apply to the extent any Increased Cost is:
(a) attributable to a Tax Deduction required by law to be made by an Obligor;
(b) attributable to a FATCA Deduction required to be made by a Party;
(c) compensated for by Clause 12.3 ( Tax indemnity ) (or would have been compensated for under Clause 12.3 ( Tax indemnity )  but was not so compensated solely because any of the exclusions in paragraph (b) of Clause 12.3 ( Tax indemnity ) applied);
(d) attributable to the wilful breach by the Lender or its Affiliates of any law or regulation.
14 OTHER INDEMNITIES
14.1 Currency indemnity
(a) If any sum due from an Obligor under the Finance Documents (a " Sum "), or any order, judgment or award given or made in relation to a Sum, has to be converted from the currency (the " First Currency ") in which that Sum is payable into another currency (the " Second Currency ") for the purpose of:
(i) making or filing a claim or proof against that Obligor; or
(ii) obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings,
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that Obligor shall, as an independent obligation, on demand, indemnify the Lender against any cost, loss or liability arising out of or as a result of the conversion including any discrepancy between (A) the rate of exchange used to convert that Sum from the First Currency into the Second Currency and (B) the rate or rates of exchange available to that person at the time of its receipt of that Sum.
(b) Each Obligor waives any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency or currency unit other than that in which it is expressed to be payable.
(c) This Clause 14.1 ( Currency indemnity ) does not apply to any sum due to the Lender under the Hedging Agreement.
14.2 Other indemnities
(a) Each Obligor shall, on demand, indemnify the Lender, any Receiver and any Delegate against:
(i) any cost, loss or liability incurred by it as a result of:
(A) the occurrence of any Event of Default;
(B) a failure by a Transaction Obligor to pay any amount due under a Finance Document on its due date;
(C) funding, or making arrangements to fund, an Advance requested by the Borrowers in a Utilisation Request but not made by reason of the operation of any one or more of the provisions of this Agreement (other than by reason of default or negligence by the Lender alone); or
(D) the Loan (or part of the Loan) not being prepaid in accordance with a notice of prepayment given by the Borrowers;
(E) investigating any event which it reasonably believes is a Potential Event of Default or an Event of Default; or
(F) acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised; or
(G) instructing lawyers, accountants, tax advisers, surveyors or other professional advisers or experts as permitted under the Finance Documents; and
(ii) any cost, loss or liability incurred by the Lender (otherwise than by reason of the Lender's gross negligence or wilful misconduct) or, in the case of any cost, loss or liability pursuant to Clause 30.8 ( Disruption to Payment Systems etc. ) notwithstanding the Lender's negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Lender.
(b) Each Obligor shall, on demand, indemnify the Lender, each Affiliate of the Lender, any Receiver and any Delegate and each officer or employee of the Lender or its Affiliate or any Receiver or Delegate (as applicable) (each such person for the purposes of this Clause 14.2 ( Other indemnities ) an " Indemnified Person "), against any cost, loss or liability incurred by that Indemnified Person pursuant to or in connection with any litigation, arbitration or administrative proceedings or regulatory enquiry, in connection with or arising out of the entry into and the transactions contemplated by the Finance Documents, having the benefit of any Security constituted by the Finance Documents or which relates to the condition or
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operation of, or any incident occurring in relation to, any  Ship unless such cost, loss or liability is caused by the gross negligence or wilful misconduct of that Indemnified Person.
(c) No Party other than the Lender, the Receiver or the Delegate (as applicable) may take any proceedings against any officer, employee or agent of the Lender, the Receiver or the Delegate (as applicable) in respect of any claim it might have against the Lender, the Receiver or the Delegate or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Transaction Document or any Security Property.
(d) Without limiting, but subject to any limitations set out in paragraph (b) above, the indemnity in paragraph (b) above shall cover any cost, loss or liability incurred by each Indemnified Person in any jurisdiction:
(i) arising or asserted under or in connection with any law relating to safety at sea, the ISM Code, any Environmental Law or any Sanctions; or
(ii) in connection with any Environmental Claim.
(e) Each Obligor shall, on demand, indemnify the Lender and every Receiver and Delegate against any cost, loss or liability incurred by any of them:
(i) in relation to or as a result of:
(A) any failure by the Borrower to comply with its obligations under Clause 16 ( Costs and Expenses );
(B) acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised;
(C) the taking, holding, protection or enforcement of the Finance Documents and the Transaction Security;
(D) the exercise of any of the rights, powers, discretions, authorities and remedies vested in the Lender and each Receiver and Delegate by the Finance Documents or by law;
(E) any default by any Transaction Obligor in the performance of any of the obligations expressed to be assumed by it in the Finance Documents;
(F) any action by any Transaction Obligor which vitiates, reduces the value of, or is otherwise prejudicial to, the Transaction Security; and
(G) instructing lawyers, accountants, tax advisers, surveyors or other professional advisers or experts as permitted under the Finance Documents.
(ii) which otherwise relates to any of the Security Property or the performance of the terms of this Agreement or the other Finance Documents (otherwise, in each case, than by reason of the Lender's, Receiver's or Delegate's gross negligence or wilful misconduct).
(f) Any Affiliate, Receiver or Delegate or any officer or employee of the Lender, or of any of its Affiliates or any Receiver or Delegate (as applicable) may rely on this Clause 14.2 ( Other indemnities ) and the provisions of the Third Parties Act, subject to Clause 1.5 ( Third party rights ) and the provisions of the Third Parties Act.
14.3 Mandatory Cost
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Each Borrower shall, on demand by the Lender, pay to the Lender, such amount which the Lender certifies in a notice to the Borrowers to be its good faith determination of the amount necessary to compensate it for complying with:
(a) if the Lender is lending from a Facility Office in a Participating Member State, the minimum reserve requirements (or other requirements having the same or similar purpose) of the European Central Bank or any other authority or agency which replaces all or any of its functions) in respect of loans made from that Facility Office; and
(b) if the Lender is lending from a Facility Office in the United Kingdom, any reserve asset, special deposit or liquidity requirements (or other requirements having the same or similar purpose) of the Bank of England (or any other governmental authority or agency) and/or paying any fees to the Financial Conduct Authority and/or the Prudential Regulation Authority (or any other governmental authority or agency which replaces all or any of their functions),
which, in each case, is referable to the Loan.
14.4 Lender's management time
Any amount payable to the Lender under Clause 14.2 ( Other indemnities ) and Clause 16 ( Costs and Expenses ) shall include the cost of utilising the Lender's management time or other resources and will be calculated on the basis of such reasonable daily or hourly rates as the Lender may notify to the Borrowers, and is in addition to any fee paid or payable to the Lender under Clause 11 ( Fees ).
15 MITIGATION BY THE LENDER
15.1 Mitigation
(a) The Lender shall, in consultation with the Borrowers, take all reasonable steps to mitigate any circumstances which arise and which would result in any amount becoming payable under or pursuant to, or cancelled pursuant to, any of Clause 7.1 ( Illegality ), Clause 12 ( Tax Gross Up and Indemnities ), Clause 13 ( Increased Costs ) including (but not limited to) assigning its rights under the Finance Documents to another Affiliate or Facility Office.
(b) Paragraph (a) above does not in any way limit the obligations of any Transaction Obligor under the Finance Documents.
15.2 Limitation of liability
(a) Each Obligor shall, on demand, indemnify the Lender for all costs and expenses reasonably incurred by the Lender as a result of steps taken by it under Clause 15.1 ( Mitigation ).
(b) The Lender is not obliged to take any steps under Clause 15.1 ( Mitigation ) if either:
(i) An Event of Default has occurred and is continuing; or
(ii) in the opinion of the Lender (acting reasonably), to do so might be prejudicial to it.
16 COSTS AND EXPENSES
16.1 Transaction expenses
The Obligors shall, on demand, pay the Lender the amount of all costs and expenses (including legal fees) reasonably incurred by it in connection with the negotiation, preparation, printing, execution and perfection of:
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(a) this Agreement and any other documents referred to in this Agreement;
(b) the Transaction Security; and
(c) any other Finance Documents executed after the date of this Agreement.
16.2 Amendment costs
If:
(a) a Transaction Obligor requests an amendment, waiver or consent; or
(b) an amendment is required pursuant to Clause 30.6 ( Change of currency ); or
(c) a Transaction Obligor requests, and the Lender agrees to, the release of all or any part of the Security Assets from the Transaction Security,
the Obligors shall, on demand, reimburse the Lender for the amount of all costs and expenses (including legal fees) reasonably incurred by the Lender in responding to, evaluating, negotiating or complying with that request or requirement.
16.3 Enforcement and preservation costs
The Obligors shall, on demand, pay to the Lender the amount of all costs and expenses (including legal fees) incurred by the Lender in connection with the enforcement of, or the preservation of any rights under, any Finance Document or the Transaction Security and with any proceedings instituted by or against the Lender as a consequence of it entering into a Finance Document, taking or holding the Transaction Security, or enforcing those rights.
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SECTION 7

GUARANTEE AND JOINT AND SEVERAL LIABILITY OF BORROWERS
17 GUARANTEE AND INDEMNITY –GUARANTOR
17.1 Guarantee and indemnity
The Guarantor irrevocably and unconditionally:
(a) guarantees to the Lender punctual performance by each Borrower of all that Borrower obligations under the Finance Documents;
(b) undertakes with the Lender that whenever a Borrower does not pay any amount when due under or in connection with any Finance Document, the Guarantor shall immediately on demand pay that amount as if it were the principal obligor; and
(c) agrees with the Lender that if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal, it will, as an independent and primary obligation, indemnify the Lender immediately on demand against any cost, loss or liability it incurs as a result of a Borrower not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by it under any Finance Document on the date when it would have been due.  The amount payable by the Guarantor under this indemnity will not exceed the amount it would have had to pay under this Clause 17 ( Guarantee and Indemnity –Guarantor ) if the amount claimed had been recoverable on the basis of a guarantee.
17.2 Continuing guarantee
This guarantee is a continuing guarantee and will extend to the ultimate balance of sums payable by any Transaction Obligor under the Finance Documents, regardless of any intermediate payment or discharge in whole or in part.
17.3 Reinstatement
If any discharge, release or arrangement (whether in respect of the obligations of any Transaction Obligor or any security for those obligations or otherwise) is made by the Lender in whole or in part on the basis of any payment, security or other disposition which is avoided or must be restored in insolvency, liquidation, administration or otherwise, without limitation, then the liability of the Guarantor under this Clause 17 ( Guarantee and Indemnity –Guarantor ) will continue or be reinstated as if the discharge, release or arrangement had not occurred.
17.4 Waiver of defences
The obligations of the Guarantor under this Clause 17 ( Guarantee and Indemnity –Guarantor ) and in respect of any Transaction Security will not be affected or discharged by an act, omission, matter or thing which, but for this Clause 17.4 ( Waiver of defences ), would reduce, release or prejudice any of its obligations under this Clause 17 ( Guarantee and Indemnity –Guarantor ) or in respect of any Transaction Security (without limitation and whether or not known to it or the Lender) including:
(a) any time, waiver or consent granted to, or composition with, any Transaction Obligor or other person;
(b) the release of any other Transaction Obligor or any other person under the terms of any composition or arrangement with any creditor;
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(c) the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect or delay in perfecting, or refusal or neglect to take up or enforce, or delay in taking or enforcing any rights against, or security over assets of, any Transaction Obligor or other person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realise the full value of any security;
(d) any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of a Transaction Obligor or any other person;
(e) any amendment, novation, supplement, extension, restatement (however fundamental and whether or not more onerous) or replacement of any Finance Document or any other document or security including, without limitation, any change in the purpose of, any extension of or any increase in any facility or the addition of any new facility under any Finance Document or other document or security;
(f) any unenforceability, illegality or invalidity of any obligation of any person under any Finance Document or any other document or security; or
(g) any insolvency or similar proceedings.
17.5 Immediate recourse
The Guarantor waives any right it may have of first requiring the Lender (or any trustee or agent on its behalf) to proceed against or enforce any other rights or security or claim payment from any person (including without limitation to commence any proceedings under any Finance Document or to enforce any Transaction Security) before claiming or commencing proceedings under this Clause 17 ( Guarantee and Indemnity –Guarantor ).  This waiver applies irrespective of any law or any provision of a Finance Document to the contrary.
17.6 Appropriations
Until all amounts which may be or become payable by the Transaction Obligors under or in connection with the Finance Documents have been irrevocably paid in full, the Lender (or any trustee or agent on its behalf) may:
(a) refrain from applying or enforcing any other moneys, security or rights held or received by the Lender (or any trustee or agent on its behalf) in respect of those amounts, or apply and enforce the same in such manner and order as it sees fit (whether against those amounts or otherwise) and the Guarantor shall not be entitled to the benefit of the same; and
(b) hold in an interest-bearing suspense account any moneys received from the Guarantor or on account of the Guarantor's liability under this Clause 17 ( Guarantee and Indemnity –Guarantor ).
17.7 Deferral of Guarantor's rights
All rights which the Guarantor at any time has (whether in respect of this guarantee, a mortgage or any other transaction) against any Borrower, any other Transaction Obligor or their respective assets shall be fully subordinated to the rights of the Lender under the Finance Documents and until the end of the Security Period and unless the Lender otherwise directs, the Guarantor will not exercise any rights which it may have (whether in respect of any Finance Document to which it is a Party or any other transaction) by reason of performance by it of its obligations under the Finance Documents or by reason of any amount being payable, or liability arising, under this Clause 17 ( Guarantee and Indemnity –Guarantor ):
(a) to be indemnified by a Transaction Obligor;
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(b) to claim any contribution from any third party providing security for, or any other guarantor of, any Transaction Obligor's obligations under the Finance Documents;
(c) to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Lender under the Finance Documents or of any other guarantee or security taken pursuant to, or in connection with, the Finance Documents by the Lender;
(d) to bring legal or other proceedings for an order requiring any Transaction Obligor to make any payment, or perform any obligation, in respect of which the Guarantor has given a guarantee, undertaking or indemnity under Clause 17.1 ( Guarantee and indemnity );
(e) to exercise any right of set-off against any Transaction Obligor; and/or
(f) to claim or prove as a creditor of any Transaction Obligor in competition with the Lender.
If the Guarantor receives any benefit, payment or distribution in relation to such rights it shall hold that benefit, payment or distribution to the extent necessary to enable all amounts which may be or become payable to the Lender by the Transaction Obligors under or in connection with the Finance Documents to be repaid in full on trust for the Lender and shall promptly pay or transfer the same to the Lender or as the Lender may direct for application in accordance with Clause 30 ( Payment Mechanics ).
17.8 Additional security
This guarantee and any other Security given by the Guarantor is in addition to and is not in any way prejudiced by, and shall not prejudice, any other guarantee or Security or any other right of recourse now or subsequently held by the Lender or any right of set-off or netting or right to combine accounts in connection with the Finance Documents.
17.9 Applicability of provisions of Guarantee to other Security
Clauses 17.2 ( Continuing guarantee ), 17.3 ( Reinstatement ), 17.4 ( Waiver of defences ), 17.5 ( Immediate recourse ), 17.6 ( Appropriations ), 17.7 ( Deferral of Guarantor's rights ) and 17.8 ( Additional security ) shall apply, with any necessary modifications, to any Security which the Guarantor creates (whether at the time at which it signs this Agreement or at any later time) to secure the Secured Liabilities or any part of them.
18 JOINT AND SEVERAL LIABILITY OF THE BORROWERS
18.1 Joint and several liability
All liabilities and obligations of the Borrowers under this Agreement shall, whether expressed to be so or not, be joint and several.
18.2 Waiver of defences
The liabilities and obligations of a Borrower shall not be impaired by:
(a) this Agreement being or later becoming void, unenforceable or illegal as regards any other Borrower;
(b) the Lender entering into any rescheduling, refinancing or other arrangement of any kind with any other Borrower;
(c) the Lender releasing any other Borrower or any Security created by a Finance Document; or
(d) any time, waiver or consent granted to, or composition with any other Borrower or other person;
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(e) the release of any other Borrower or any other person under the terms of any composition or arrangement with any creditor of any member of the Group;
(f) the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against, or security over assets of, any other Borrower or other person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realise the full value of any security;
(g) any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of any other Borrower or any other person;
(h) any amendment, novation, supplement, extension, restatement (however fundamental, and whether or not more onerous) or replacement of a Finance Document or any other document or security including, without limitation, any change in the purpose of, any extension of or any increase in any facility or the addition of any new facility under any Finance Document or other document or security;
(i) any unenforceability, illegality or invalidity of any obligation or any person under any Finance Document or any other document or security; or
(j) any insolvency or similar proceedings.
18.3 Principal Debtor
Each Borrower declares that it is and will, throughout the Security Period, remain a principal debtor for all amounts owing under this Agreement and the Finance Documents and no Borrower shall, in any circumstances, be construed to be a surety for the obligations of any other Borrower under this Agreement.
18.4 Borrower restrictions
(a) Subject to paragraph (b) below, during the Security Period no Borrower shall:
(i) claim any amount which may be due to it from any other Borrower whether in respect of a payment made under, or matter arising out of, this Agreement or any Finance Document, or any matter unconnected with this Agreement or any Finance Document; or
(ii) take or enforce any form of security from any other Borrower for such an amount, or in any way seek to have recourse in respect of such an amount against any asset of any other Borrower; or
(iii) set off such an amount against any sum due from it to any other Borrower; or
(iv) prove or claim for such an amount in any liquidation, administration, arrangement or similar procedure involving any other Borrower; or
(v) exercise or assert any combination of the foregoing.
(b) If during the Security Period, the Lender, by notice to a Borrower, requires it to take any action referred to in paragraph (a) above in relation to any other Borrower, that Borrower shall take that action as soon as practicable after receiving the Lender 's notice.
18.5 Deferral of Borrowers' rights
Until all amounts which may be or become payable by the Borrowers under or in connection with the Finance Documents have been irrevocably paid in full and unless the Lender
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otherwise directs, no Borrower will exercise any rights  which it may have by reason of performance by it of its obligations under the Finance Documents:
(a) to be indemnified by any other Borrower; or
(b) to claim any contribution from any other Borrower in relation to any payment made by it under the Finance Documents.
SECTION 8

REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT
19 REPRESENTATIONS
19.1 General
Each Obligor makes the representations and warranties set out in this Clause 19 ( Representations ) to the Lender on the date of this Agreement.
19.2 Status
(a) It is a corporation duly incorporated and validly existing in good standing under the law of its jurisdiction of incorporation.
(b) It and each Transaction Obligor has the power to own its assets and carry on its business as it is being conducted.
19.3 Share capital and ownership
(a) Borrower A has an authorised share capital of 500 registered and/or bearer shares of no par value, all of which shares have been issued in registered form and held by the Guarantor.
(b) Borrower B has an authorised share capital of 500 registered and/or bearer shares of no par value, all of which shares have been issued in registered form and held by the Guarantor.
(c) Borrower C has an authorised share capital of 500 registered shares and/or bearer of no par value, all of which shares have been issued in registered form and held by the Guarantor.
(d) The legal title to and beneficial interest in the shares in each Borrower is held free of any Security or any other claim by the Guarantor.
(e) None of the shares in any Borrower is subject to any option to purchase, pre-emption rights or similar rights.
19.4 Binding obligations
The obligations expressed to be assumed by it in each Transaction Document to which it is a party are legal, valid, binding and enforceable obligations.
19.5 Validity, effectiveness and ranking of Security
(a) Each Finance Document to which it is a party does now or, as the case may be, will upon execution and delivery and, where applicable, registration as provided for in that Finance Document create the Security it purports to create over any assets to which such Security, by its terms, relates, and such Security will, when created or intended to be created, be valid and effective.
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(b) No third party has or will have any Security (except for Permitted Security) over any assets that are the subject of any Transaction Security granted by it.
(c) The Transaction Security granted by it to the Lender has or will when created or intended to be created have first ranking priority or such other priority it is expressed to have in the Finance Documents and is not subject to any prior ranking or pari passu ranking security.
(d) No concurrence, consent or authorisation of any person is required for the creation of or otherwise in connection with any Transaction Security.
19.6 Non-conflict with other obligations
The entry into and performance by it of, and the transactions contemplated by, each Transaction Document to which it is a party do not and will not conflict with:
(a) any law or regulation of any Pertinent Jurisdiction or, to its knowledge, of any other jurisdiction, applicable to it;
(b) its constitutional documents; or
(c) any agreement or instrument binding upon it or any of its assets or constitute a default or termination event (however described) under any such agreement or instrument.
19.7 Power and authority
(a) It has the power to enter into, perform and deliver, and has taken all necessary action to authorise:
(i) its entry into, performance and delivery of, each Transaction Document to which it is or will be a party and the transactions contemplated by those Transaction Documents; and
(ii) in the case of a Borrower, the registration of its Ship under its Approved Flag;.
(b) No limit on its powers will be exceeded as a result of the borrowing, granting of security or giving of guarantees or indemnities contemplated by the Transaction Documents to which it is a party.
19.8 Validity and admissibility in evidence
All Authorisations required or desirable:
(a) to enable it lawfully to enter into, exercise its rights and comply with its obligations in the Transaction Documents to which it is a party; and
(b) to make the Transaction Documents to which it is a party admissible in evidence in its Relevant Jurisdictions,
have been obtained or effected and are in full force and effect.
19.9 Governing law and enforcement
(a) The choice of governing law of each Transaction Document to which it is a party will be recognised and enforced in its Relevant Jurisdictions.
(b) Any judgment obtained in relation to a Transaction Document to which it is a party in the jurisdiction of the governing law of that Transaction Document will be recognised and enforced in its Relevant Jurisdictions.
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19.10 Insolvency
No:
(a) corporate action, legal proceeding or other procedure or step described in paragraph (a) of Clause 27.8 ( Insolvency proceedings ); or
(b) creditors' process described in Clause 27.9 ( Creditors' process ),
has been taken or, to its knowledge, threatened in relation to a member of the Group; and none of the circumstances described in Clause 27.7 ( Insolvency ) applies to a member of the Group.
19.11 No filing or stamp taxes
Under the laws of its Relevant Jurisdictions it is not necessary that the Finance Documents to which it is a party be registered, filed, recorded, notarised or enrolled with any court or other authority in that jurisdiction or that any stamp, registration, notarial or similar Taxes or fees be paid on or in relation to the Finance Documents to which it is a party or the transactions contemplated by those Finance Documents except registration of the Mortgages at the relevant Ship's Registry which registration and filings and fees will be made and paid promptly after the date of the relevant Finance Documents.
19.12 Deduction of Tax
It is not required to make any Tax Deduction from any payment it may make under any Finance Document to which it is a party.
19.13 No default
(a) On the date of this Agreement and on each Utilisation Date, no Event of Default which is continuing or might reasonably be expected to result from the making of any Utilisation or the entry into, the performance of, or any transaction contemplated by, any Transaction Document.
(b) No other event or circumstance is outstanding which constitutes a default or a termination event (however described) under any other agreement or instrument which is binding on it or to which its assets are subject which might have a Material Adverse Effect.
19.14 No misleading information
(a) Any factual information provided by any member of the Group for the purposes of this Agreement was true and accurate in all material respects as at the date it was provided or as at the date (if any) at which it is stated.
(b) The financial projections contained in any such information have been prepared on the basis of recent historical information and on the basis of reasonable assumptions.
(c) Nothing has occurred or been omitted from any such information and no information has been given or withheld that results in any such information being untrue or misleading in any material respect.
19.15 Financial Statements
(a) Its most recent financial statements delivered pursuant to Clause 20.2 ( Financial statements ):
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(i) have been prepared in accordance with Clause 20.4 ( Requirements as to financial statements ); and
(ii) give a true and fair view of (if audited) or fairly represent (if unaudited) its financial condition as at the end of the relevant financial year and operations during the relevant financial year (consolidated in the case of the Guarantor).
(b) Since the date of the most recent financial statements delivered pursuant to Clause 20.2 ( Financial statements ) there has been no material adverse change in its business, assets or financial condition (or the business or consolidated financial condition of the Group, in the case of the Guarantor).
19.16 Pari passu ranking
Its payment obligations under the Finance Documents to which it is a party rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors, except for obligations mandatorily preferred by law applying to companies generally.
19.17 No proceedings pending or threatened
No litigation, arbitration or administrative proceedings or investigations (including proceedings or investigations relating to any alleged or actual breach of the ISM Code or of the ISPS Code) of or before any court, arbitral body or agency have (to the best of its knowledge and belief (having made due and careful enquiry)) been started or threatened against any Transaction Obligor.
19.18 Validity and completeness of MOA and Assignable Charter
(a) Each MOA and any Assignable Charter being in force at any relevant time constitutes legal, valid, binding and enforceable obligations of the relevant Seller and Charterer (as the context may require).
(b) The copies of the MOA and of any Assignable Charter delivered to the Lender before the date of this Agreement are true and complete copies.
(c) No amendments or additions to the MOA or Assignable Charter have been agreed nor have any rights under the MOA or Assignable Charter been waived.
19.19 No rebates etc.
There is no agreement or understanding to allow or pay any rebate, premium, inducement, commission, discount or other benefit or payment (however described) to any Borrower, the relevant Seller or a third party in connection with the purchase by a Borrower of a Ship, other than as disclosed to the Lender in writing on or before the date of this Agreement.
19.20 Valuations
(a) All information supplied by it or on its behalf to an Approved Valuer for the purposes of a valuation delivered to the Lender in accordance with this Agreement was true and accurate as at the date it was supplied or (if appropriate) as at the date (if any) at which it is stated to be given.
(b) It has not omitted to supply any information to an Approved Valuer which, if disclosed, would adversely affect any valuation prepared by such Approved Valuer.
(c) There has been no change to the factual information provided pursuant to paragraph (a) above in relation to any valuation between the date such information was provided and the
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date of that valuation which, in either case, renders that information untrue or misleading in any material respect.
19.21 No breach of laws
It has not breached any law or regulation which breach has or is reasonably likely to have a Material Adverse Effect.
19.22 No Charter
No Ship is subject to any Charter other than a Permitted Charter.
19.23 Compliance with Environmental Laws
All Environmental Laws relating to the ownership, operation and management of each Ship and the business of each member of the Group (as now conducted and as reasonably anticipated to be conducted in the future) and the terms of all Environmental Approvals have been complied with.
19.24 No Environmental Claim
No Environmental Claim has been made or threatened against any member of the Group or any Ship.
19.25 No Environmental Incident
No Environmental Incident has occurred and no person has claimed that an Environmental Incident has occurred.
19.26 ISM and ISPS Code compliance
All requirements of the ISM Code and the ISPS Code as they relate to each Borrower, each Approved Technical Manager and each Ship have been complied with.
19.27 Taxes paid
(a) It is not and no other member of the Group is materially overdue in the filing of any Tax returns and it is not (and no other member of the Group is) overdue in the payment of any amount in respect of Tax.
(b) No claims or investigations are being, or are reasonably likely to be, made or conducted against it (or any other member of the Group) with respect to Taxes.
19.28 Financial Indebtedness
No Transaction Obligor has any Financial Indebtedness outstanding other than Permitted Financial Indebtedness.
19.29 Overseas companies
No Transaction Obligor has delivered particulars, whether in its name stated in the Finance Documents or any other name, of any UK Establishment to the Registrar of Companies as required under the Overseas Regulations or, if it has so registered, it has provided to the Lender sufficient details to enable an accurate search against it to be undertaken by the Lender at the Companies Registry.
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19.30 Good title to assets
It has good, valid and marketable title to, or valid leases or licences of, and all appropriate Authorisations to use, the assets necessary to carry on its business as presently conducted.
19.31 Ownership
(a) With effect on and from the relevant Delivery Date, each Borrower will be the sole legal and beneficial owner of its Ship, its Earnings and its Insurances.
(b) With effect on and from the date of its creation or intended creation, each Transaction Obligor will be the sole legal and beneficial owner of any asset that is the subject of any Transaction Security created or intended to be created by such Transaction Obligor.
(c) The constitutional documents of each Transaction Obligor do not and could not restrict or inhibit any transfer of the shares of the Borrowers on creation or enforcement of the security conferred by the Security Documents.
19.32 Ownership of Guarantor
The Disclosed Person is the ultimate beneficial owner of not less than 40 per cent. of the (A) issued shares in the Guarantor and the voting rights attached to such shares and/or (B) the voting rights attached to any of the issued shares in the Guarantor which are not owned by the Disclosed Person and, to the best of its knowledge, no other person or company is the ultimate beneficial owner (either directly or indirectly) of a higher percentage of (A) issued shares in the Guarantor and the voting rights attached to such shares and/or (B) the voting rights in the issued shares of the Guarantor, from that held by the Disclosed Person at the date of this Agreement.
19.33 Centre of main interests and establishments
For the purposes of The Council of the European Union Regulation No. 1346/2000 on Insolvency Proceedings (the " Regulation "), its centre of main interest (as that term is used in Article 3(1) of the Regulation) is situated in its jurisdiction of incorporation and it has no "establishment" (as that term is used in Article 2(h) of the Regulation) in any other jurisdiction.
19.34 Place of business
No Transaction Obligor has a place of business in any country other than its country of incorporation and its head office functions are carried out in the case of Borrower A, B and C at c/o 16 Grigoriou Lambraki, 16674 Glyfada, Athens, Greece.
19.35 No employee or pension arrangements
No Transaction Obligor has any employees or any liabilities under any pension scheme.
19.36 Sanctions
(a) No Transaction Obligor:
(i) is a Prohibited Person;
(ii) is owned or controlled by or acting directly or indirectly on behalf of or for the benefit of, a Prohibited Person;
(iii) owns or controls a Prohibited Person; or
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(iv) has a Prohibited Person serving as a director, officer or, to the best of its knowledge, employee.
(b) No proceeds of the Loan or any part of the Loan shall be made available, directly or indirectly, to or for the benefit of a Prohibited Person nor shall they be otherwise directly or indirectly, applied in a manner or for a purpose prohibited by Sanctions.
19.37 US Tax Obligor
No Transaction Obligor is a US Tax Obligor.
19.38 Repetition
The Repeating Representations are deemed to be made by each Obligor by reference to the facts and circumstances then existing on the date of each Utilisation Request and the first day of each Interest Period.
20 INFORMATION UNDERTAKINGS
20.1 General
The undertakings in this Clause 20 ( Information Undertakings ) remain in force throughout the Security Period unless the Lender otherwise permits.
20.2 Financial statements
The Borrowers and the Guarantor shall supply to the Lender:
(a) as soon as they become available, but in any event within 120 days after the end of each of their respective financial years:
(i) the Borrowers' respective unaudited financial statements for that financial year; and
(ii) the audited consolidated financial statements of the Guarantor for that financial year,
in each case commencing from the financial year ending 31 December 2015;
(b) as soon as the same become available, but in any event within 60 days after the end of each quarter of each of the Borrowers' and Guarantor's respective financial years (commencing from the financial quarter year which ends on 30 September 2015):
(i) the Borrowers' respective unaudited financial statements for that financial quarter year; and
(ii) the consolidated unaudited financial statements of the Guarantor for that financial quarter year;
(c) as soon as they become available, but in any event within 60 days after the end of each of their respective financial years, budgets in a format approved by the Lender evidencing (a) the Group's future five-year cash flow projections and the annual Operating Expenses of the Group Ships and (b) the General and Administrative expenses relating to the day-to-day operations of the Group's business for that financial year, commencing from the financial year ending 31 December 2015;
(d) from time to time, promptly upon the Lender's reasonable request, such further financial or other information in respect of the Borrowers, the Ships, the Transaction Obligors and the other members of the Group.
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20.3 Compliance Certificate
(a) The Guarantor shall supply to the Lender, with each set of financial statements delivered pursuant to sub-paragraph (ii) of paragraph (a) or sub-paragraph (ii) of paragraph (b) of Clause 20.2 ( Financial statements ), a Compliance Certificate setting out (in reasonable detail) computations as to compliance with (A) Clause 21 ( Financial Covenants ) as at the date as at which those financial statements were drawn up (and, in respect of Clause 21.1(a) and (b), commencing with the Accounting Period starting on 1 July 2017) and (B) Clause 7.5 ( Mandatory prepayment on Change of Ownership ).
(b) Each Compliance Certificate shall be signed by the Chief Financial Officer of the Guarantor.
20.4 Requirements as to financial statements
(a) Each set of financial statements delivered by a Borrower pursuant to Clause 20.2 ( Financial statements ) shall be certified by a director of the relevant company as giving a true and fair view (if audited) or fairly representing (if unaudited) its financial condition and operations as at the date as at which those financial statements were drawn up.
(b) The Borrowers shall procure that each set of financial statements delivered pursuant to Clause 20.2 ( Financial statements ) is prepared using GAAP.
(c) The Borrowers shall procure that each set of financial statements of an Obligor delivered pursuant to Clause 20.2 ( Financial statements ) is prepared using GAAP, accounting practices and financial reference periods consistent with those applied in the preparation of the Original Financial Statements for that Obligor unless, in relation to any set of financial statements, it notifies the Lender that there has been a change in GAAP, the accounting practices or reference periods and its auditors (or, if appropriate, the auditors of the Obligor) deliver to the Lender:
(i) a description of any change necessary for those financial statements to reflect the GAAP, accounting practices and reference periods upon which that Obligor's Original Financial Statements were prepared; and
(ii) sufficient information, in form and substance as may be reasonably required by the Lender, enable the Lender to determine whether Clause 21 ( Financial Covenants ) has been complied with and make an accurate comparison between the financial position indicated in those financial statements and that Obligor's Original Financial Statements.
Any reference in this Agreement to those financial statements shall be construed as a reference to those financial statements as adjusted to reflect the basis upon which the Original Financial Statements were prepared.
20.5 Information: miscellaneous
(a) Each Borrower shall supply to the Lender all documents dispatched by it to its shareholders (or any class of them) or its creditors generally at the same time as they are dispatched; and
each Obligor shall supply to the Lender:
(b) promptly upon becoming aware of them, the details of any litigation, arbitration or administrative proceedings or investigations (including proceedings or investigations relating to any alleged or actual breach of the ISM Code or of the ISPS Code) which are current, threatened or pending against any member of the Group, and which might, if adversely determined, have a Material Adverse Effect;
(c) promptly, its constitutional documents where these have been amended or varied;
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(d) promptly, such further information and/or documents regarding:
(i) each Ship, goods transported on each Ship, its Earnings and its Insurances;
(ii) the Security Assets;
(iii) compliance of the Obligors with the terms of the Finance Documents;
(iv) the financial condition, business and operations of any member of the Group,
as the Lender may reasonably request; and
(e) promptly, such further information and/or documents as the Lender may reasonably request  so as to enable the Lender to comply with any laws applicable to it or as may be required by any regulatory authority.
20.6 Notification of an Event of Default
(a) Each Obligor shall notify the Lender of any Event of Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence (unless that Obligor is aware that a notification has already been provided by another Obligor).
(b) Promptly upon a request by the Lender, each Borrower shall supply to the Lender a certificate signed by two of its directors or senior officers on its behalf certifying that no Event of Default is continuing (or if an Event of Default is continuing, specifying the Event of Default and the steps, if any, being taken to remedy it).
20.7 "Know your customer" checks
If:
(a) the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the date of this Agreement;
(b) any change in the status of a Transaction Obligor (including, without limitation, a change of ownership of a Transaction Obligor) after the date of this Agreement; or
(c) a proposed assignment by the Lender of any of its rights under this Agreement,
obliges the Lender (or, in the case of sub-paragraph (c) above, any prospective assignee) to comply with "know your customer" or similar identification procedures in circumstances where the necessary information is not already available to it, each Obligor shall promptly upon the request of the Lender supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Lender (for itself or, in the case of the event described in paragraph (c) above, on behalf of any prospective assignee) in order for the Lender or, in the case of the event described in paragraph (c) above, any prospective assignee to carry out and be satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.
21 FINANCIAL COVENANTS
21.1 The Guarantor shall ensure that on each Testing Date and at all other times during the Security Period:
(a) the Leverage Ratio shall not exceed 75 per cent.; and
(b) the ratio of EBITDA to Net Interest Expense shall not be less than 2:1; and
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(c) it shall maintain Cash and Cash Equivalents (including any contractually committed but undrawn parts of shareholders' Notes made to the Guarantor) in an amount not less than the product of (i) the number of Group Ships and (ii) $500,000 and shall further procure that, any such Cash and Cash Equivalents in respect of the Ships are held with the Lender. For the avoidance of doubt, any amounts required to be standing to accounts held with the Lender pursuant to Clause 21.3 shall not be taken into account when calculating such Cash and Cash Equivalents in respect of the Ships.
21.2 Testing Date
The financial covenants of Clause 21.1 shall be tested on any quarterly or yearly period to the end of which the financial statements required to be delivered pursuant to Clause 20.2 ( Financial statements )   sub-paragraph (ii) of paragraphs (a) and (b) (as the case may be), are prepared, commencing from (i) the Accounting Period which starts on 1 st July 2017, in relation to the financial covenants of Clause 21.1 paragraphs (a) and (b) and (ii) the Accounting Period which starts after one quarter from the first Utilisation Date, in relation to the financial covenant of Clause 21.1 paragraph (c).
21.3 Borrowers' Minimum Liquidity
Each Borrower shall ensure that a minimum credit balance of $500,000 is held with the Lender (free of Security other than in favour of the Lender), during the period commencing on 1 January 2017 and ending on 30 September 2017 (the " Release Date ") (both dates inclusive) provided that on the Release Date no Event of Default has occurred and is continuing, in which case the Borrowers' obligations pursuant to this Clause shall continue to remain in force until the Lender notifies the Borrowers in writing that no Event of Default is continuing and that any amounts standing to the credit of accounts held with the Lender can be freely disposed of by the Borrowers.
For the purposes of Clause 21.1:-
" Accounting Period "  means each consecutive 3-month period, during the Security Period ending on 31 December, 31 March, 30 June and 30 September of each financial year;
" Applicable Accounts " means, as at the date of calculation or, as the case may be, in respect of an Accounting Period, the annual audited or quarterly unaudited (as the case may be), consolidated financial statements the Guarantor is obliged to deliver to the Lender pursuant to Clause 20.2 paragraphs (a) and (b);
" Cash "   shall have the meaning given to such term in the latest Applicable Accounts;
" Cash Equivalents "   shall have the meaning given to such term in the latest Applicable Accounts;
" Consolidated Market Value Adjusted Total Assets " means, at any relevant time, the aggregate of the Group's Total Current Assets and Consolidated Market Value Adjusted Other Assets;
" Consolidated Market Value Adjusted Other Assets " means, as of the last day of an Accounting Period, the Fleet Market Value plus the book value (less depreciation computed in accordance with the Applicable Accounts on a consolidated basis of all noncurrent assets of the Group (i.e. excluding Fleet Ships), as stated in the then most recent and relevant Applicable Accounts;
"EBITDA " means, as of the last day of an Accounting Period or on any other day, the consolidated net pre-taxation profits of the Group in respect of the relevant Rolling Period, as stated in the then most recent and relevant Accounting Information, and all as adjusted by:
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(a) adding back Net Interest Expense;
(b) adding back depreciation and amortisation;
(c) adding back any non-cash expenses and non-cash losses;
(d) deducting any non-cash income and non-cash gains;
(e) taking no account of any exceptional or extraordinary item;
(f) taking no account of any revaluation of an asset or any loss or gain over book value arising on the disposal of an asset by a member of the Group during that Rolling Period; and
(g) adding back the expenses of the special and intermediate surveys, in case these expenses are not capitalized.
 " Fleet Market Value " means, in relation to the Fleet Ships, as of the date of calculation, the aggregate market value of the Fleet Ships as most recently determined pursuant to valuations obtained in accordance with Clause 25 ( Security Cover ) and prepared:
(a) as at not more than 14 Business Days previously;
(b)              by an Approved Valuer;
(c) with or  without physical inspection of the Fleet Ships;
(d) on the basis of a sale for prompt delivery for cash on normal arm's length commercial terms as between a willing seller and a willing buyer free of any charter;
"Group's   Total Current Assets " means, the aggregate of the cash and marketable securities, trade and other receivables from persons (other than persons being members of the Group) realisable within 1 year amount determined on a consolidated basis less any discounts, allowances and activated goodwill, in each case as shown in the latest Applicable Accounts;
 " Group's   Total Liabilities "  means the total liabilities of the Group determined on a consolidated basis less any drawn amounts of shareholders' Notes, in each case as shown in the latest Applicable Accounts;
" Leverage Ratio " means at any time the ratio (expressed as a percentage) of the Group's Total Liabilities divided by the Consolidated Market Value Adjusted Total Assets.
"Net Interest Expense " means, as of the last day of an Accounting Period, all interest paid by the Group minus all interest income received by the Group in respect of the relevant Rolling Period, as stated in the then most recent and relevant Accounting Information;
"Notes " means certain unsecured notes issued or to be issued by the Guarantor to its shareholders and held or to be held (as the case may be) at the relevant Testing Date by those shareholders in exchange for loans made by those shareholders to the Guarantor for on-lending to the Borrowers and the other members of the Group to assist them with their working capital requirements.
" Rolling Period " means, as of the last day of an Accounting Period, the immediately prior twelve-month period ending on such day.
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22 GENERAL UNDERTAKINGS
22.1 General
The undertakings in this Clause 22 ( General Undertakings ) remain in force throughout the Security Period except as the Lender may otherwise permit.
22.2 Authorisations
Each Obligor shall promptly:
(a) obtain, comply with and do all that is necessary to maintain in full force and effect; and
(b) supply certified copies to the Lender of,
any Authorisation required under any law or regulation of a Relevant Jurisdiction or the state of the Approved Flag at any time of each Ship to enable it to:
(i) perform its obligations under the Transaction Documents to which it is a party;
(ii) ensure the legality, validity, enforceability or admissibility in evidence in any Relevant Jurisdiction or in the state of the Approved Flag at any time of each Ship of any Transaction Document to which it is a party; and
(iii) own and operate each Ship (in the case of the Borrowers).
22.3 Compliance with laws
Each Obligor shall, and shall procure that each other Transaction Obligor will, comply in all respects with all laws and regulations to which it may be subject, if failure so to comply has or is reasonably likely to have a Material Adverse Effect.
22.4 Environmental compliance
Each Obligor shall, and shall procure that each other Transaction Obligor will, and the Guarantor shall ensure that each other member of the Group will:
(a) comply with all Environmental Laws;
(b) obtain, maintain and ensure compliance with all requisite Environmental Approvals;
(c) implement procedures to monitor compliance with and to prevent liability under any Environmental Law,
where failure to do so has or is reasonably likely to have a Material Adverse Effect.
22.5 Environmental claims
Each Obligor shall, and shall procure that each other Transaction Obligor will, (through the Guarantor) promptly upon becoming aware of the same, inform the Lender in writing of:
(a) any Environmental Claim against any member of the Group which is current, pending or threatened; and
(b) any facts or circumstances which are reasonably likely to result in any Environmental Claim being commenced or threatened against any member of the Group,
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where the claim, if determined against that member of the Group, has or is reasonably likely to have a Material Adverse Effect.
22.6 Taxation
(a) Each Obligor shall pay and discharge all Taxes imposed upon it or its assets within the time period allowed without incurring penalties unless and only to the extent that:
(i) such payment is being contested in good faith;
(ii) adequate reserves are maintained for those Taxes and the costs required to contest them have been disclosed in its latest financial statements delivered to the Lender under Clause 20.2 ( Financial statements ); and
(iii) such payment can be lawfully withheld and failure to pay those Taxes does not have or is not reasonably likely to have a Material Adverse Effect.
(b) No Obligor shall change its residence for Tax purposes.
22.7 Overseas companies
Each Obligor shall, and shall procure that each other Transaction Obligor will, promptly inform the Lender if it delivers to the Registrar particulars required under the Overseas Regulations of any UK Establishment and it shall comply with any directions given to it by the Lender regarding the recording of any Transaction Security on the register which it is required to maintain under The Overseas Companies (Execution of Documents and Registration of Charges) Regulations 2009.
22.8 No change to centre of main interests
No Obligor shall change the location of its centre of main interest (as that term is used in Article 3(1) of the Regulation) from that stated in relation to it in Clause 19.32.
22.9 Pari passu ranking
Each Obligor shall, and shall procure that each other Transaction Obligor will, ensure that at all times any unsecured and unsubordinated claims of the Lender against it under the Finance Documents rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors except those creditors whose claims are mandatorily preferred by laws of general application to companies.
22.10 Title
(a) From the Utilisation Date of the Advance under the relevant Tranche, each Borrower shall hold the legal title to, and own the entire beneficial interest in its Ship, its Earnings and its Insurances.
(b) With effect on and from its creation or intended creation, each Obligor shall hold the legal title to, and own the entire beneficial interest in any other assets the subject of any Transaction Security created or intended to be created by such Obligor.
22.11 Negative pledge
(a) No Obligor shall, and the Borrowers shall procure that no other Transaction Obligor will, create or permit to subsist any Security over any of its assets (other than, in respect of the Guarantor, any Security granted or to be granted in respect of its assets (other than any assets in respect of which a Security has been granted under the Security Documents), in the ordinary course of business).
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(b) No Borrower shall:
(i) sell, transfer or otherwise dispose of any of its assets on terms whereby they are or may be leased to or re-acquired by a Transaction Obligor;
(ii) sell, transfer or otherwise dispose of any of its receivables on recourse terms;
(iii) enter into any arrangement under which money or the benefit of a bank or other account may be applied, set-off or made subject to a combination of accounts; or
(iv) enter into any other preferential arrangement having a similar effect,
in circumstances where the arrangement or transaction is entered into primarily as a method of raising Financial Indebtedness or of financing the acquisition of an asset.
(c) Paragraphs (a) and (b) above do not apply to any Permitted Security.
22.12 Disposals
(a) Unless the sale proceeds are sufficient to pay all amounts required pursuant to Clause 7.4 ( Mandatory prepayment on sale or Total Loss ), no Borrower shall enter into a single transaction or a series of transactions (whether related or not) and whether voluntary or involuntary to sell, lease, transfer or otherwise dispose of any asset (including without limitation any Ship, its Earnings or its Insurances).
(b) Paragraph (a) above does not apply to any Permitted Charter.
22.13 Merger
No Obligor shall, and the Obligors shall procure that no other Transaction Obligor will, enter into any amalgamation, demerger, merger, consolidation or corporate reconstruction where the Obligor is not the surviving entity.
22.14 Listing of Guarantor
The Guarantor shall procure that all its issued shares shall be listed and traded on the National Association of Securities Dealers Automated Quotations (NASDAQ).
22.15 Change of business
(a) The Guarantor shall procure that no substantial change is made to the general nature of the business of the Guarantor or the Group from that carried on at the date of this Agreement.
(b) No Borrower shall engage in any business other than the ownership and operation of its Ship.
22.16 Financial Indebtedness
No Borrower shall incur or permit to be outstanding any Financial Indebtedness except Permitted Financial Indebtedness.
22.17 No other liabilities or obligations to be incurred
No Obligor will incur any liability or obligation (including, without limitation, any Financial Indebtedness or any obligations under a guarantee granted or to be granted by any Borrower) except:
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(i) liabilities and obligations under the Finance Documents (including, without limitation, under the Hedging Agreement);
(ii) liabilities or obligations reasonably incurred in the normal course of its business of trading, operating and chartering, maintaining and repairing the Ship owned by it (including, without limitation, any shareholder loan subject to the relevant Borrower ensuring, on or prior to the date of the first advance of that loan, that the rights of the shareholder which is the provider of that loan are fully subordinated to the rights of the Lender under the Finance Documents in writing and upon such terms and conditions as shall be required by the Lender but excluding any investments, any sale or lease back agreements and any off-balance-sheet obligations); and
(iii) any guarantee and indemnity granted or to be granted by the Guarantor or any other liability or obligation incurred by the Guarantor in its ordinary course of business.
22.18 Expenditure
No Borrower shall incur any expenditure, except for expenditure reasonably incurred in the ordinary course of owning, operating, maintaining and repairing its Ship.
22.19 Share capital
No Borrower shall:
(a) purchase, cancel or redeem any of its share capital;
(b) increase or reduce its authorised share capital;
(c) issue any further shares except to the Guarantor and provided such new shares are made subject to the terms of the Shares Security applicable to that Borrower immediately upon the issue of such new shares in a manner satisfactory to the Lender and the terms of that Shares Security are complied with;
(d) appoint any further director or officer of that Borrower (unless the provisions of the Shares Security applicable to that Borrower are complied with).
22.20 Dividends
No Obligor shall make or pay any dividend or other distribution (in cash or in kind) in respect of its share capital following the occurrence of an Event of Default and during its continuation or where the making or payment of such dividend or distribution would result in the occurrence of an Event of Default.
22.21 Accounts
No Borrower shall open or maintain any account with any bank or financial institution except in the case of a Borrower its Earnings Accounts and accounts with the Lender for the purposes of the Finance Documents.
22.22 Other transactions
No Borrower shall:
(a) be the creditor in respect of any loan or any form of credit to any person other than another Obligor and where such loan or form of credit is Permitted Financial Indebtedness;
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(b) give or allow to be outstanding any guarantee or indemnity to or for the benefit of any person in respect of any obligation of any other person or enter into any document under which that Borrower assumes any liability of any other person other than any guarantee or indemnity given under the Finance Documents.
(c) enter into any material agreement other than:
(i) the Transaction Documents;
(ii) any other agreement expressly allowed under any other term of this Agreement; and
(d) enter into any transaction on terms which are, in any respect, less favourable to that Borrower than those which it could obtain in a bargain made at arms' length; or
(e) acquire any shares or other securities other than US or UK Treasury bills and certificates of deposit issued by major North American or European banks, unless any such transactions are incurred in that Borrower's normal course of business.
22.23 Unlawfulness, invalidity and ranking; Security imperilled
No Obligor shall, and the Obligors shall procure that no other Transaction Obligor will, do (or fail to do) or cause or permit another person to do (or omit to do) anything which is likely to:
(a) make it unlawful for a Transaction Obligor to perform any of its obligations under the Transaction Documents;
(b) cause any obligation of a Transaction Obligor under the Transaction Documents to cease to be legal, valid,  binding or enforceable if that cessation individually or together with any other cessations materially or adversely affects the interests of the Lender under the Finance Documents;
(c) cause any Transaction Document to cease to be in full force and effect;
(d) cause any Transaction Security to rank after, or lose its priority to, any other Security; and
(e) imperil or jeopardise the Transaction Security.
22.24 Banking operations
Each Borrower shall conduct all its banking operations in connection with its Ship through the Lender or any other branch of the Lender nominated by the Lender in its discretion.
22.25 Further assurance
(a) Each Obligor shall, and shall procure that each other Transaction Obligor will, promptly, and in any event within the time period specified by the Lender do all such acts (including procuring or arranging any registration, notarisation or authentication or the giving of any notice) or execute or procure execution of all such documents (including assignments, transfers, mortgages, charges, notices, instructions, acknowledgments, proxies and powers of attorney), as the Lender may specify (and in such form as the Lender may require in favour of the Lender or its nominee(s)):
(i) to create, perfect, vest in favour of the Lender or protect the priority of the Security or any right of any kind created or intended to be created under or evidenced by the Finance Documents (which may include the execution of a mortgage, charge, assignment or other Security over all or any of the assets which are, or are intended to be, the subject of the Transaction Security) or for the exercise of any rights,
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powers and remedies of the Lender or any Receiver or Delegate provided by or pursuant to the Finance Documents or by law;
(ii) to confer on the Lender Security over any property and assets of that Transaction Obligor located in any jurisdiction equivalent or similar to the Security intended to be conferred by or pursuant to the Finance Documents;
(iii) to facilitate or expedite the realisation and/or sale of, the transfer of title to or the grant of, any interest in or right relating to the assets which are, or are intended to be, the subject of the Transaction Security or to exercise any power specified in any Finance Document in respect of which the Security has become enforceable; and/or
(iv) to enable or assist the Lender to enter into any transaction to commence, defend or conduct any proceedings and/or to take any other action relating to any item of the Security Property.
(b) Each Obligor shall, and shall procure that each other Transaction Obligor will, take all such action as is available to it (including making all filings and registrations) as may be necessary for the purpose of the creation, perfection, protection or maintenance of any Security conferred or intended to be conferred on the Lender by or pursuant to the Finance Documents.
(c) At the same time as an Obligor delivers to the Lender any document executed by itself or another Transaction Obligor pursuant to this Clause 22.25 ( Further assurance ), that Obligor shall deliver, or shall procure that such other Transaction Obligor will deliver, to the Lender a certificate signed by two of that Obligor's or Transaction Obligor's directors or officers which shall:
(i) set out the text of a resolution of that Obligor's or Transaction Obligor's directors specifically authorising the execution of the document specified by the Lender; and
(ii) reasonable evidence that that Obligor's or Transaction Obligor's execution of such document has been duly authorised by it.
23 INSURANCE UNDERTAKINGS
23.1 General
The undertakings in this Clause 23 ( Insurance Undertakings ) remain in force from the date of this Agreement throughout the rest of the Security Period except as the Lender may otherwise permit.
23.2 Maintenance of obligatory insurances
Each Borrower shall keep the Ship owned by it insured at its expense against:
(a) fire and usual marine risks (including hull and machinery and excess risks);
(b) war risks;
(c) protection and indemnity risks; and
(d) any other risks against which the Lender considers, having regard to practices and other circumstances prevailing at the relevant time, it would be reasonable for that Borrower to insure and which are specified by the Lender by notice to that Borrower.
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23.3 Terms of obligatory insurances
Each Borrower shall effect such insurances:
(a) in dollars;
(b) in the case of fire and usual marine risks and war risks, in an amount on an agreed value basis at least the greater of:
(i) 120 per cent. of the Loan; and
(ii) the aggregate Market Value of the Ships subject to a Mortgage;
(c) in the case of oil pollution liability risks, for an aggregate amount equal to the highest level of cover from time to time available under basic protection and indemnity club entry and in the international marine insurance market;
(d) in the case of protection and indemnity risks, in respect of the full tonnage of its Ship;
(e) on approved terms; and
(f) through Approved Brokers and with approved insurance companies and/or underwriters or, in the case of war risks and protection and indemnity risks, in approved war risks and protection and indemnity risks associations.
23.4 Further protections for the Lender
In addition to the terms set out in Clause 23.3 ( Terms of obligatory insurances ), each Borrower shall procure that the obligatory insurances effected by it shall:
(a) subject always to paragraph (b), name that Borrower as the sole named insured unless the interest of every other named insured is limited:
(i) in respect of any obligatory insurances for hull and machinery and war risks;
(A) to any provable out-of-pocket expenses that it has incurred and which form part of any recoverable claim on underwriters; and
(B) to any third party liability claims where cover for such claims is provided by the policy (and then only in respect of discharge of any claims made against it); and
(ii) in respect of any obligatory insurances for protection and indemnity risks, to any recoveries it is entitled to make by way of reimbursement following discharge of any third party liability claims made specifically against it;
and every other named insured has undertaken in writing to the Lender (in such form as it requires) that any deductible shall be apportioned between that Borrower and every other named insured in proportion to the gross claims made or paid by each of them and that it shall do all things necessary and provide all documents, evidence and information to enable the Lender to collect or recover any moneys which at any time become payable in respect of the obligatory insurances;
(b) whenever the Lender requires, name (or be amended to name) the Lender as additional named insured for its rights and interests, warranted no operational interest and with full waiver of rights of subrogation against the Lender, but without the Lender being liable to pay (but having the right to pay) premiums, calls or other assessments in respect of such insurance;
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(c) name the Lender as loss payee with such directions for payment as the Lender may specify;
(d) provide that all payments by or on behalf of the insurers under the obligatory insurances to the Lender shall be made without set off, counterclaim or deductions or condition whatsoever;
(e) provide that the obligatory insurances shall be primary without right of contribution from other insurances which may be carried by the Lender; and
(f) provide that the Lender may make proof of loss if that Borrower fails to do so.
23.5 Renewal of obligatory insurances
Each Borrower shall:
(a) at least 21 days before the expiry of any obligatory insurance effected by it:
(i) notify the Lender of the Approved Brokers (or other insurers) and any protection and indemnity or war risks association through or with which it proposes to renew that obligatory insurance and of the proposed terms of renewal; and
(ii) obtain the Lender's approval to the matters referred to in sub-paragraph (i) of paragraph (a) above;
(b) at least 14 days before the expiry of any obligatory insurance, renew that obligatory insurance in accordance with the Lender's approval pursuant to paragraph (a) above; and
(c) procure that the Approved Brokers and/or the approved war risks and protection and indemnity associations with which such a renewal is effected shall promptly after the renewal notify the Lender in writing of the terms and conditions of the renewal.
23.6 Copies of policies; letters of undertaking
Each Borrower shall ensure that the Approved Brokers provide the Lender with:
(a) pro forma copies of all policies relating to the obligatory insurances which they are to effect or renew; and
(b) a letter or letters or undertaking in a form required by the Lender and including undertakings by the Approved Brokers that:
(i) they will have endorsed on each policy, immediately upon issue, a loss payable clause and a notice of assignment complying with the provisions of Clause 23.4 ( Further protections for the );
(ii) they will hold such policies, and the benefit of such insurances, to the order of the Lender in accordance with such loss payable clause;
(iii) they will advise the Lender immediately of any material change to the terms of the obligatory insurances;
(iv) they will, if they have not received notice of renewal instructions from the relevant Borrower or its agents, notify the Lender not less than 14 days before the expiry of the obligatory insurances;
(v) if they receive instructions to renew the obligatory insurances, they will promptly notify the Lender of the terms of the instructions;
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(vi) they will not set off against any sum recoverable in respect of a claim relating to the Ship owned by that Borrower under such obligatory insurances any premiums or other amounts due to them or any other person whether in respect of that Ship or otherwise, they waive any lien on the policies, or any sums received under them, which they might have in respect of such premiums or other amounts and they will not cancel such obligatory insurances by reason of non-payment of such premiums or other amounts; and
(vii) they will arrange for a separate policy to be issued in respect of the Ship owned by that Borrower forthwith upon being so requested by the Lender.
23.7 Copies of certificates of entry
Each Borrower shall ensure that any protection and indemnity and/or war risks associations in which the Ship owned by it is entered provide the Lender with:
(a) a certified copy of the certificate of entry for that Ship;
(b) a letter or letters of undertaking in such form as may be required by the Lender; and
(c) a certified copy of each certificate of financial responsibility for pollution by oil or other Environmentally Sensitive Material issued by the relevant certifying authority in relation to that Ship.
23.8 Deposit of original policies
Each Borrower shall ensure that all policies relating to obligatory insurances effected by it are deposited with the Approved Brokers through which the insurances are effected or renewed.
23.9 Payment of premiums
Each Borrower shall punctually pay all premiums or other sums payable in respect of the obligatory insurances effected by it and produce all relevant receipts when so required by the Lender.
23.10 Guarantees
Each Borrower shall ensure that any guarantees required by a protection and indemnity or war risks association are promptly issued and remain in full force and effect.
23.11 Compliance with terms of insurances
(a) No Borrower shall do or omit to do (nor permit to be done or not to be done) any act or thing which would or might render any obligatory insurance invalid, void, voidable or unenforceable or render any sum payable under an obligatory insurance repayable in whole or in part.
(b) Without limiting paragraph (a) above, each Borrower shall:
(i) take all necessary action and comply with all requirements which may from time to time be applicable to the obligatory insurances, and (without limiting the obligation contained in sub-paragraph (iii) of paragraph (b) of Clause 23.6 ( Copies of policies; letters of undertaking )) ensure that the obligatory insurances are not made subject to any exclusions or qualifications to which the Lender has not given its prior approval;
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(ii) not make any changes relating to the classification or classification society or manager or operator of the Ship owned by it approved by the underwriters of the obligatory insurances;
(iii) make (and promptly supply copies to the Lender of) all quarterly or other voyage declarations which may be required by the protection and indemnity risks association in which the Ship owned by it is entered to maintain cover for trading to the United States of America and Exclusive Economic Zone (as defined in the United States Oil Pollution Act 1990 or any other applicable legislation); and
(iv) not employ the Ship owned by it, nor allow it to be employed, otherwise than in conformity with the terms and conditions of the obligatory insurances, without first obtaining the consent of the insurers and complying with any requirements (as to extra premium or otherwise) which the insurers specify.
23.12 Alteration to terms of insurances
No Borrower shall make or agree to any alteration to the terms of any obligatory insurance or waive any right relating to any obligatory insurance.
23.13 Settlement of claims
Each Borrower shall:
(a) not settle, compromise or abandon any claim under any obligatory insurance for Total Loss or for a Major Casualty; and
(b) do all things necessary and provide all documents, evidence and information to enable the Lender to collect or recover any moneys which at any time become payable in respect of the obligatory insurances.
23.14 Provision of copies of communications
Each Borrower shall provide the Lender, at the time of each such communication, with copies of all written communications between that Borrower and:
(a) the Approved Brokers;
(b) the approved protection and indemnity and/or war risks associations; and
(c) the approved insurance companies and/or underwriters,
which relate directly or indirectly to:
(i) that Borrower's obligations relating to the obligatory insurances including, without limitation, all requisite declarations and payments of additional premiums or calls; and
(ii) any credit arrangements made between that Borrower and any of the persons referred to in paragraphs (a) or (b) above relating wholly or partly to the effecting or maintenance of the obligatory insurances.
23.15 Provision of information
Each Borrower shall promptly provide the Lender (or any persons which it may designate) with any information which the Lender (or any such designated person) requests for the purpose of:
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(a) obtaining or preparing any report from an independent marine insurance broker as to the adequacy of the obligatory insurances effected or proposed to be effected; and/or
(b) effecting, maintaining or renewing any such insurances as are referred to in Clause 23.16 ( Mortgagee's interest additional perils insurances ) or dealing with or considering any matters relating to any such insurances,
and the Borrowers shall, forthwith upon demand, indemnify the Lender in respect of all fees and other expenses incurred by or for the account of the Lender in connection with any such report as is referred to in paragraph (a) above.
23.16 Mortgagee's interest additional perils insurances
(a) The Lender shall be entitled from time to time to effect, maintain and renew a mortgagee's interest marine insurance (" MII ") and a mortgagee's interest additional perils insurance (" MAPI ") (a) in the case of MII, in an amount on an agreed value basis at least equal to 110 per cent. of the Loan and (b) in the case of MAPI, in an amount on an agreed value basis at least equal to 120 per cent. per cent. of the Loan, in each case, on such terms, through such insurers and generally in such manner as the Lender may from time to time consider appropriate
(b) The Borrowers shall upon demand fully indemnify the Lender in respect of all premiums and other expenses which are incurred in connection with or with a view to effecting, maintaining or renewing any insurance referred to in paragraph (a) above or dealing with, or considering, any matter arising out of any such insurance.
24 GENERAL SHIP UNDERTAKINGS
24.1 General
The undertakings in this Clause 24 ( General Ship Undertakings ) remain in force on and from the date of this Agreement and throughout the rest of the Security Period except as the Lender may otherwise permit.
24.2 Ships' names and registration
Each Borrower shall, in respect of the Ship owned by it:
(a) keep that Ship registered in its name under the Approved Flag from time to time at its port of registration;
(b) not do or allow to be done anything as a result of which such registration might be suspended, cancelled or imperilled; and
(c) not change the name of that Ship,
Provided that any change of flag of a Ship shall be subject to:
(i) that Ship remaining subject to Security securing the Secured Liabilities created by a first priority or preferred ship mortgage on that Ship and, if appropriate, a first priority deed of covenant collateral to that mortgage (or equivalent first priority Security) on substantially the same terms as the Mortgage on that Ship and related Deed of Covenant and on such other terms and in such other form as the Lender shall approve or require; and
(ii) the execution of such other documentation amending and supplementing the Finance Documents as the Lender shall approve or require.
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24.3 Repair and classification
Each Borrower shall keep the Ship owned by it in a good and safe condition and state of repair:
(a) consistent with first class ship ownership and management practice; and
(b) so as to maintain the Approved Classification free of overdue recommendations and conditions.
24.4 Classification society undertaking
If required by the Lender in writing each Borrower shall, in respect of the Ship owned by it, instruct the relevant Approved Classification Society (and procure that the Approved Classification Society undertakes with the Lender):
(a) to send to the Lender, following receipt of a written request from the Lender, certified true copies of all original class records held by the Approved Classification Society in relation to that Ship;
(b) to allow the Lender (or its agents), at any time and from time to time, to inspect the original class and related records of that Borrower and that Ship at the offices of the Approved Classification Society and to take copies of them;
(c) to notify the Lender immediately in writing if the Approved Classification Society:
(i) receives notification from that Borrower or any person that that Ship's Approved Classification Society is to be changed; or
(ii) becomes aware of any facts or matters which may result in or have resulted in a change, suspension, discontinuance, withdrawal or expiry of that Ship's class under the rules or terms and conditions of that Borrower or that Ship's membership of the Approved Classification Society;
(d) following receipt of a written request from the Lender:
(i) to confirm that that Borrower is not in default of any of its contractual obligations or liabilities to the Approved Classification Society, including confirmation that it has paid in full all fees or other charges due and payable to the Approved Classification Society; or
(ii) to confirm that that Borrower is in default of any of its contractual obligations or liabilities to the Approved Classification Society, to specify to the Lender in reasonable detail the facts and circumstances of such default, the consequences of such default, and any remedy period agreed or allowed by the Approved Classification Society.
24.5 Modifications
No Borrower shall make any modification or repairs to, or replacement of, any Ship or equipment installed on it which would or might materially alter the structure, type or performance characteristics of that Ship or materially reduce its value.
24.6 Removal and installation of parts
(a) Subject to paragraph (b) below, no Borrower shall remove any material part of any Ship, or any item of equipment installed on any Ship unless:
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(i) the part or item so removed is forthwith replaced by a suitable part or item which is in the same condition as or better condition than the part or item removed;
(ii) the replacement part or item is free from any Security in favour of any person other than the Lender; and
(iii) the replacement part or item becomes, on installation on that Ship, the property of that Borrower and subject to the security constituted by the Mortgage on that Ship and the related Deed of Covenant.
(b) A Borrower may install equipment owned by a third party if the equipment can be removed without any risk of damage to the Ship owned by that Borrower.
24.7 Surveys
Each Borrower shall submit the Ship owned by it regularly to all periodic or other surveys which may be required for classification purposes and, if so required by the Lender, provide the Lender, with copies of all survey reports.
24.8 Inspection
Each Borrower shall permit the Lender (acting through surveyors or other persons appointed by it for that purpose) to board the Ship owned by it at all reasonable times to inspect its condition or to satisfy themselves about proposed or executed repairs and shall afford all proper facilities for such inspections without interfering with the Ship's normal course of trading, unless an Event of Default has occurred in which case the Lender can inspect the Ship at any time.
24.9 Prevention of and release from arrest
(a) Each Borrower shall, in respect of the Ship owned by it, promptly discharge:
(i) all liabilities which give or may give rise to maritime or possessory liens on or claims enforceable against that Ship, its Earnings or its Insurances;
(ii) all Taxes, dues and other amounts charged in respect of that Ship, its Earnings or its Insurances; and
(iii) all other outgoings whatsoever in respect of that Ship, its Earnings or its Insurances.
(b) Each Borrower shall immediately and, forthwith upon receiving notice of the arrest of the  Ship owned by it or of its detention in exercise or purported exercise of any lien or claim, procure its release by providing bail or otherwise as the circumstances may require.
24.10 Compliance with laws etc.
Each Borrower shall:
(a) comply, or procure compliance with all laws or regulations:
(i) relating to its business generally; and
(ii) relating to the Ship owned by it, its ownership, employment, operation, management and registration,
including, but not limited to, the ISM Code, the ISPS Code, all Environmental Laws, all Sanctions and the laws of the Approved Flag;
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(b) obtain, comply with and do all that is necessary to maintain in full force and effect any Environmental Approvals; and
(c) without limiting paragraph (a) above, not employ the Ship owned by it nor allow its employment, operation or management in any manner contrary to any law or regulation including but not limited to the ISM Code, the ISPS Code, all Environmental Laws and Sanctions (or which would be contrary to Sanctions if Sanctions were binding on each Transaction Obligor).
24.11 ISPS Code
Without limiting paragraph (a) of Clause 24.10 ( Compliance with laws etc. ), each Borrower shall:
(a) procure that the Ship owned by it and the company responsible for that Ship's compliance with the ISPS Code comply with the ISPS Code; and
(b) maintain an ISSC for that Ship; and
(c) notify the Lender immediately in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the ISSC.
24.12 Sanctions and Ship trading
Without limiting Clause 24.10 ( Compliance with laws etc. ), the Borrower shall procure:
(a) that the Ship shall not be used by or for the benefit of a Prohibited Person;
(b) that the Ship shall not be used in trading in any manner contrary to Sanctions (or which could be contrary to Sanctions if Sanctions were binding on each Transaction Obligor);
(c) that the Ship shall not be traded in any manner which would trigger the operation of any sanctions limitation or exclusion clause (or similar) in the Insurances or otherwise traded in areas prohibited by either (i) the law applicable to that Ship's flag or (i) the applicable law of the country of incorporation of the Borrower owning that Ship or (iii) the applicable law of the nationality of the officers and crew of that Ship; and
(d) that each charterparty in respect of the Ship shall contain, for the benefit of the Borrower, language which gives effect to the provisions of paragraph (c) of Clause 24.10 ( Compliance with laws etc. ) as regards Sanctions and of this Clause 24.12 ( Sanctions and Ship trading ) and which permits refusal of employment or voyage orders if compliance would result in a breach of Sanctions (or which could be contrary to Sanctions if Sanctions were binding on each Transaction Obligor).
24.13 Trading in war zones
In the event of hostilities in any part of the world (whether war is declared or not), no Borrower shall cause or permit any Ship to enter or trade to any zone which is declared a war zone by any government or by that Ship's war risks insurers unless:
(a) the prior written consent of the Lender has been given; and
(b) that Borrower has (at its expense) effected any special, additional or modified insurance cover which the Lender may require.
24.14 Provision of information
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Without prejudice to Clause 20.5 ( Information: miscellaneous ) each Borrower shall, in respect of the Ship owned by it, promptly provide the Lender with any information which it requests regarding:
(a) that Ship, its employment, position and engagements;
(b) the Earnings and payments and amounts due to its master and crew;
(c) any expenditure incurred, or likely to be incurred, in connection with the operation, maintenance or repair of that Ship and any payments made by it in respect of that Ship;
(d) any towages and salvages; and
(e) its compliance, the Approved Manager's compliance and the compliance of that Ship with the ISM Code and the ISPS Code,
and, upon the Lender's request, provide copies of any current Charter relating to that Ship, of any current guarantee of any such Charter, the Ship's Safety Management Certificate and any relevant Document of Compliance.
24.15 Notification of certain events
Each Borrower shall, in respect of the Ship owned by it, immediately notify the Lender by fax, confirmed forthwith by letter, of:
(a) any casualty to that Ship which is or is likely to be or to become a Major Casualty;
(b) any occurrence as a result of which that Ship has become or is, by the passing of time or otherwise, likely to become a Total Loss;
(c) any requisition of that Ship for hire;
(d) any overdue requirement or recommendation made in relation to that Ship by any insurer or classification society or by any competent authority which is not immediately complied with within the time limits allowed by such insurer or the relevant classification society or authority;
(e) any arrest or detention of that Ship, any exercise or purported exercise of any lien on that Ship or the Earnings or any requisition of that Ship for hire;
(f) any intended dry docking of that Ship;
(g) any Environmental Claim made against that Borrower or in connection with that Ship, or any Environmental Incident;
(h) any claim for breach of the ISM Code or the ISPS Code being made against that Borrower, an Approved Manager or otherwise in connection with that Ship; or
(i) any other matter, event or incident, actual or threatened, the effect of which will or could lead to the ISM Code or the ISPS Code not being complied with,
and each Borrower shall keep the Lender advised in writing on a regular basis and in such detail as the Lender shall require as to that Borrower's, any such Approved Manager's or any other person's response to any of those events or matters.
24.16 Restrictions on chartering, appointment of managers etc.
No Borrower shall, in relation to the Ship owned by it:
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(a) let that Ship on demise charter for any period (without the Lender's prior written consent, not to be unreasonably withheld);
(b) enter into any time, voyage or consecutive voyage charter in respect of that Ship other than a Permitted Charter;
(c) amend, supplement or terminate a Management Agreement;
(d) appoint a manager of that Ship other than the Approved Commercial Manager and the Approved Technical Manager or agree to any alteration to the terms of an Approved Manager's appointment (without the Lender's prior written consent, not to be unreasonably withheld);
(e) de activate or lay-up that Ship without the Lender's prior written consent (not to be unreasonably withheld); or
(f) put that Ship into the possession of any person for the purpose of work being done upon it in an amount exceeding or likely to exceed $500,000 in relation to Ship A, or $500,000 in relation to Ship B and Ship C (or, in each case, the equivalent in any other currency) unless that person has first given to the Lender and in terms satisfactory to it a written undertaking not to exercise any lien on that Ship or its Earnings for the cost of such work or for any other reason.
24.17 Notice of Mortgage
Each Borrower shall keep the relevant Mortgage registered against the Ship owned by it as a valid first priority mortgage, carry on board that Ship a certified copy of the relevant Mortgage and place and maintain in a conspicuous place in the navigation room and the master's cabin of that Ship a framed printed notice stating that that Ship is mortgaged by that Borrower to the Lender.
24.18 Sharing of Earnings
No Borrower, other than between themselves, shall enter into any agreement or arrangement for the sharing of any Earnings.
24.19 Notification of compliance
Each Borrower shall promptly provide the Lender from time to time with evidence (in such form as the Lender requires) that it is complying with this Clause 24 ( General Ship Undertakings ).
25 SECURITY COVER
25.1 Minimum required security cover
Clause 25.2 ( Provision of additional security; prepayment ) applies if the Lender notifies the Borrowers:-
(a) at any time during the period commencing on the first anniversary of the first Utilisation Date of the Advance and ending one year later, that the Security Cover Ratio is below 100 per cent; and
(b) at any time thereafter throughout the remainder of the Security Period, that the Security Cover Ratio is below 120 per cent.
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For the purposes of par. (a) and (b) of this Clause 25.1, when calculating the Security Cover Ratio the Lender shall also take into account any amounts then standing to the credit of the accounts held with the Lender pursuant to Clause 21.3 ( Borrowers' Minimum Liquidity ).
25.2 Provision of additional security; prepayment
(a) If the Lender serves a notice on the Borrowers under Clause 25.1 ( Minimum required security cover ), the Borrowers shall, on or before the date falling one Month after the date on which the Lender's notice is served (the " Prepayment Date "), prepay such part of the Loan as shall eliminate the shortfall.
(b) A Borrower may, instead of making a prepayment as described in paragraph (a) above, provide, or ensure that a third party has provided, additional security (including, without limitation, cash pledged in favour of the Lender) which, in the opinion of the Lender:
(i) has a net realisable value at least equal to the shortfall; and
(ii) is documented in such terms as the Lender may approve or require,
before the Prepayment Date; and conditional upon such security being provided in such manner, it shall satisfy such prepayment obligation.
25.3 Value of additional vessel security
The net realisable value of any additional security which is provided under Clause 25.2 ( Provision of additional security; prepayment ) and which consists of Security over a vessel shall be the Market Value of the vessel concerned.
25.4 Valuations binding
Any valuation under this Clause 25 ( Security Cover ) shall be binding and conclusive as regards each Borrower.
25.5 Provision of information
(a) Each Borrower shall promptly provide the Lender and any shipbroker acting under this Clause 25 ( Security Cover ) with any information which the Lender or the shipbroker may request for the purposes of the valuation(s).
(b) If a Borrower fails to provide the information referred to in paragraph (a) above by the date specified in the request, the valuation may be made on any basis and assumptions which the shipbroker or the Lender considers prudent.
25.6 Prepayment mechanism
Any prepayment pursuant to Clause 25.2 ( Provision of additional security; prepayment ) shall be made in accordance with the relevant provisions of Clause 7 ( Prepayment and Cancellation ) and shall be treated as a voluntary prepayment pursuant to Clause 7.3 ( Voluntary prepayment of Loan ).
25.7 Provision of valuations
(a) for the purposes of Clause 25.1 ( Minimum required security cover ) and Clause 8.1 ( Calculation of interest ) each Borrower shall provide the Lender with a valuation of the Ship owned by it or that will be owned by it on the relevant Utilisation Date and any other vessel over which additional Security has been created in accordance with Clause 25.2 ( Provision of additional security; prepayment ), from an Approved Valuer, to enable the Lender to determine the aggregate Market Value of the Ships;
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(b) for the purposes of enabling the Lender to determine the Fleet Market Value pursuant to Clause 21.2 ( Financial covenants ), the Borrowers shall provide the Lender, together with each Compliance Certificate pursuant to Clause 20.3 ( Compliance Certificate ), with a valuation in respect of each Fleet Ship from an Approved Valuer, each addressed to the Lender.
25.8 Frequency of valuations
In case of an Event of Default which is continuing, the Lender shall be at liberty to obtain valuations of the Ships at any time during the Security Period and at the cost of the Borrowers in order to test the Market Value of the Ships for the purposes of Clause 25 ( Security Cover ) and such valuations shall be in addition to any other valuations previously obtained by the Lender pursuant to Clause 25.7 paragraphs (a) or (b). Otherwise, the Lender shall obtain up to one valuation of the Ships per quarter at the cost of the Borrowers for the purposes of Clauses 25.1 and 21.2.
26 APPLICATION OF EARNINGS
26.1 Payment of Earnings
Each Borrower shall ensure that,
(a) subject only to the provisions of the General Assignment to which it is a party, all the Earnings in respect of the Ship owned by it are paid in to an Earnings Account held in the name of that Borrower; and
(b) all payments to that Borrower under the Hedging Agreement are paid to an Earnings Account held in the name of that Borrower
26.2 Location of Accounts
Each Borrower shall promptly:
(a) comply with any requirement of the Lender as to the location or relocation of its Earnings Accounts; and
(b) execute any documents which the Lender specifies to create or maintain in favour of the Lender Security over (and/or rights of set-off, consolidation or other rights in relation to) the Earnings Accounts.
27 EVENTS OF DEFAULT
27.1 General
Each of the events or circumstances set out in this Clause 27 ( Events of Default ) is an Event of Default except for Clause 27.19 ( Acceleration ) and Clause 27.20 ( Enforcement of security ).
27.2 Non-payment
An Obligor does not pay on the due date any amount payable pursuant to a Finance Document at the place at and in the currency in which it is expressed to be payable unless:
(a) its failure to pay is caused by:
(i) administrative or technical error; or
(ii) a Disruption Event; and
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(b) payment is made within 3 Business Days of its due date.
27.3 Specific obligations
A breach occurs of Clause 4.4 ( Waiver of conditions precedent ), Clause 21 ( Financial Covenants ), Clause 22.10 ( Title ), Clause 22.11 ( Negative pledge ), Clause 22.23 ( Unlawfulness, invalidity and ranking; Security imperilled ), Clause 23.2 ( Maintenance of obligatory insurances ), Clause 23.3 ( Terms of obligatory insurances ), Clause 23.5 ( Renewal of obligatory insurances ) or Clause 25 ( Security Cover ).
27.4 Other obligations
(a) An Obligor or any Approved Manager does not comply with any provision of the Finance Documents (other than those referred to in Clause 27.2 ( Non-payment ) and Clause 27.3 ( Specific obligations )).
(b) No Event of Default under paragraph (a) above will occur if the failure to comply is capable of remedy and is remedied within 3 Business Days of the Lender giving notice to the Borrowers or (if earlier) any Obligor or Approved Manager  becoming aware of the failure to comply.
27.5 Misrepresentation
Any representation or statement made or deemed to be made by an Obligor in the Finance Documents or any other document delivered by or on behalf of any Obligor under or in connection with any Finance Document is or proves to have been incorrect or misleading when made or deemed to be made.
27.6 Cross default
(a) Any Financial Indebtedness of any Transaction Obligor is not paid when due nor within any originally applicable grace period.
(b) Any Financial Indebtedness of any Transaction Obligor is declared to be or otherwise becomes due and payable prior to its specified maturity as a result of an event of default (however described).
(c) Any commitment for any Financial Indebtedness of any Transaction Obligor is cancelled or suspended by a creditor of any Transaction Obligor as a result of an event of default (however described).
(d) Any creditor of any Transaction Obligor becomes entitled to declare any Financial Indebtedness of any Transaction Obligor due and payable prior to its specified maturity as a result of an event of default (however described).
27.7 Insolvency
(a) A Transaction Obligor:
(i) is unable or admits inability to pay its debts as they fall due;
(ii) is deemed to, or is declared to, be unable to pay its debts under applicable law;
(iii) suspends or threatens to suspend making payments on any of its debts; or
(iv) by reason of actual or anticipated financial difficulties, commences negotiations with one or more of its creditors (excluding the Lender in its capacity as such) with a view to rescheduling any of its indebtedness.
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(b) Commencing as of the Accounting Period ending on 30 September 2017 or at any time thereafter, the value of the assets of any Transaction Obligor is less than its liabilities (taking into account contingent and prospective liabilities).
(c) A moratorium is declared in respect of any indebtedness of any Transaction Obligor.  If a moratorium occurs, the ending of the moratorium will not remedy any Event of Default caused by that moratorium.
27.8 Insolvency proceedings
(a) Any corporate action, legal proceedings or other procedure or step is taken in relation to:
(i) the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of any Transaction Obligor;
(ii) a composition, compromise, assignment or arrangement with any creditor of any Transaction Obligor;
(iii) the appointment of a liquidator, receiver, administrator, administrative receiver, compulsory manager or other similar officer in respect of any Transaction Obligor or any of its assets; or
(iv) enforcement of any Security over any assets of any Transaction Obligor,
or any analogous procedure or step is taken in any jurisdiction.
(b) Paragraph (a) above shall not apply to any winding-up petition which is frivolous or vexatious and is discharged, stayed or dismissed within 14 Business Days of commencement.
27.9 Creditors' process
Any expropriation, attachment, sequestration, distress or execution (or any analogous process in any jurisdiction) affects any asset or assets of an Obligor.
27.10 Ownership of the Obligors
(a) An Obligor (other than the Guarantor) is not or ceases to be a 100 per cent. directly owned Subsidiary of the Guarantor.
(b) Any person or group of persons (other than the Permitted Holders) acting in concert gains control of the Guarantor.
(c) For the purpose of paragraph (b) above "control" means:
(i) the power (whether by way of ownership of shares, proxy, contract, agency or otherwise) to:
(A) cast, or control the casting of, more than 50 per cent. of the maximum number of votes that might be cast at a general meeting of the Guarantor; or
(B) appoint or remove all, or the majority, of the directors or other equivalent officers of the Guarantor; or
(C) give directions with respect to the operating and financial policies of the Guarantor with which the directors or other equivalent officers of the Guarantor are obliged to comply; and/or
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(ii) the holding beneficially of more than 50 per cent. of the issued share capital of the Guarantor (excluding any part of that issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital).
(d) For the purpose of paragraph (b) above "acting in concert" means a group of persons who, pursuant to an agreement or understanding (whether formal or informal), actively co-operate, through the acquisition directly of shares in the Guarantor by any of them, either directly or indirectly, to obtain or consolidate control of the Guarantor.
27.11 Unlawfulness, invalidity and ranking
(a) It is or becomes unlawful for a Transaction Obligor to perform any of its obligations under the Finance Documents.
(b) Any obligation of a Transaction Obligor under the Finance Documents is not or ceases to be legal, valid, binding or enforceable.
(c) Any Finance Document ceases to be in full force and effect or to be continuing or is or purports to be determined or any Transaction Security is alleged by a party to it (other than the Lender) to be ineffective.
(d) Any Transaction Security proves to have ranked after, or loses its priority to, any other Security.
27.12 Security imperilled
Any Security created or intended to be created by a Finance Document is in any way imperilled or in jeopardy.
27.13 Cessation of business
Any Transaction Obligor suspends or ceases to carry on (or threatens to suspend or cease to carry on) all or a material part of its business.
27.14 Expropriation
The authority or ability of any Transaction Obligor to conduct its business is limited or wholly or substantially curtailed by any seizure, expropriation, nationalisation, intervention, restriction or other action by or on behalf of any governmental, regulatory or other authority or other person in relation to any Transaction Obligor or any of their assets, unless such Transaction Obligor upon receiving notice of such event procures the release of the relevant assets and such assets are redelivered to the full control of that Transaction Obligor within 14 days of such event.
27.15 Repudiation and rescission of agreements
A Transaction Obligor (or any other relevant party) rescinds or purports to rescind or repudiates or purports to repudiate a Transaction Document or any of the Transaction Security or evidences an intention to rescind or repudiate a Transaction Document or any Transaction Security or a Transaction Document or any of the Transaction Security otherwise ceases to remain in full force and effect for any reason.
27.16 Litigation
Any litigation, arbitration, administrative, governmental, regulatory or other investigations, proceedings or disputes are commenced in relation to any of the Transaction Documents or the transactions contemplated in any of the Transaction Documents which has a Material Adverse Effect, unless the relevant Transaction Obligor have taken active measures to
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dispute such proceedings or disputes and such proceedings or disputes are dismissed or withdrawn within 14 days of being made or presented.
27.17 Material adverse change
Any event or circumstance occurs which has or is reasonably likely to have a Material Adverse Effect.
27.18 Listing of Guarantor
The shares (or any part thereof) of the Guarantor are suspended from, de-listed or cease to be traded on, the National Association of Securities Dealers Automated Quotations (NASDAQ).
27.19 Acceleration
On and at any time after the occurrence of an Event of Default which is continuing the Lender may by notice to the Borrowers:
(a) cancel the Commitment, whereupon it shall immediately be cancelled;
(b) declare that all or part of the Loan, together with accrued interest, and all other amounts accrued or outstanding under the Finance Documents be immediately due and payable, whereupon it shall become immediately due and payable; and/or
(c) declare that all or part of the Loan be payable on demand, whereupon it shall immediately become payable on demand by the Lender,
and the Lender may serve notices under paragraphs (a), (b) and (c) above simultaneously or on different dates and the Lender may take any action referred to in Clause 27.20 ( Enforcement of security ) if no such notice is served or simultaneously with or at any time after the service of any of such notice.
27.20 Enforcement of security
On and at any time after the occurrence of an Event of Default which is continuing the Lender may take any action which, as a result of the Event of Default or any notice served under Clause 27.19 ( Acceleration )27.1927.19 ( Acceleration ), the Lender is entitled to take under any Finance Document or any applicable law or regulation.
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SECTION 9

CHANGES TO THE PARTIES
28 CHANGES TO THE LENDER
28.1 Assignment by the Lender
Subject to this Clause 28 ( Changes to the Lender ), the Lender (the " Existing Lender ") may assign all (but not part) of its rights under the Finance Documents to another bank or financial institution or to a trust, fund or other entity which is regularly engaged in or established for the purpose of making, purchasing or investing in loans, securities or other financial assets (the " New Lender ").
28.2 Conditions of assignment
(a) The Lender shall not be required to consult with, or obtain the Borrowers' prior written consent unless any transfer or assignment under Clause 28.1  is to a New Lender, which does not hold a banking license, in which case the Borrowers' prior written consent shall be required (and shall not be unreasonably withheld).
(b) The consent of the Borrowers to an assignment pursuant to this Clause 29.2 must not be unreasonably withheld or delayed.  Each Borrower will be deemed to have given its consent five Business Days after the Existing Lender has requested it unless consent is expressly refused by that Borrower within that time.
(c) If:
(i) the Existing Lender assigns any of its rights or obligations under the Finance Documents or changes its Facility Office; and
(ii) as a result of circumstances existing at the date the assignment or change occurs, an Obligor would be obliged to make a payment to the New Lender or the Existing Lender acting through its new Facility Office under Clause 12 ( Tax Gross Up and Indemnities ) or under that clause as incorporated by reference or in full in any other Finance Document or Clause 13 ( Increased Costs ),
then the New Lender or the Existing Lender acting through its new Facility Office is only entitled to receive payment under those Clauses to the same extent as the Existing Lender would have been if the assignment or change had not occurred.
(d) Each Obligor agrees that all rights and interests (present, future or contingent) which the Existing Lender has under or by virtue of the Finance Documents are assigned to the New Lender absolutely, free of any defects in the Existing Lender's title and of any rights or equities which the Borrower or any other Obligor had against the Existing Lender.
28.3 Security over Lender's rights
In addition to the other rights provided to the Lender under this Clause 28 ( Changes to the Lender ), the Lender may without consulting with or obtaining consent from any Obligor, at any time charge, assign or otherwise create Security in or over (whether by way of collateral or otherwise) all or any of its rights under any Finance Document to secure obligations of the Lender including, without limitation:
(a) any charge, assignment or other Security to secure obligations to a federal reserve or central bank; and
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(b) if the Lender is a fund, any charge, assignment or other Security granted to any holders (or trustee or representatives of holders) of obligations owed, or securities issued, by the Lender as security for those obligations or securities,
except that no such charge, assignment or Security shall:
(i) release the Lender from any of its obligations under the Finance Documents or substitute the beneficiary of the relevant charge, assignment or Security for the Lender as a party to any of the Finance Documents; or
(ii) require any payments to be made by an Obligor other than or in excess of, or grant to any person any more extensive rights than, those required to be made or granted to the Lender under the Finance Documents.
28.4 Change of lending office
The Lender may change its lending office and/or its booking office by giving notice to the Borrowers and the change shall become effective on the later of:
(a) the date on which the Lender dispatches the notice; and
(b) the date, if any, specified in the notice as the date on which the change will come into effect.
29 CHANGES TO THE TRANSACTION OBLIGORS
29.1 Assignment or transfer by Transaction Obligors
No Transaction Obligor may assign any of its rights or transfer any of its rights or obligations under the Finance Documents.
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SECTION 10

ADMINISTRATION
30 PAYMENT MECHANICS
30.1 Payments to the Lender
(a) On each date on which a Transaction Obligor is required to make a payment under a Finance Document, that Transaction Obligor shall make an amount equal to such payment available to the Lender (unless a contrary indication appears in a Finance Document) for value on the due date at the time and in such funds specified by the Lender as being customary at the time for settlement of transactions in the relevant currency in the place of payment.
(b) Payment shall be made to such account in the principal financial centre of the country of that currency (or, in relation to euro, in a principal financial centre in such Participating Member State or London, as specified by the Lender) and with such bank as the Lender, in each case, specifies.
30.2 Application of receipts; partial payments
(a) If the Lender receives a payment that is insufficient to discharge all the amounts then due and payable by a Transaction Obligor under the Finance Documents, the Lender may apply that payment towards the obligations of that Transaction Obligor under the Finance Documents in any manner it may decide.
(b) Paragraph (a) above will override any appropriation made by a Transaction Obligor.
30.3 No set-off by Transaction Obligors
(a) All payments to be made by a Transaction Obligor under the Finance Documents shall be calculated and be made without (and free and clear of any deduction for) set-off or counterclaim.
(b) Paragraph (a) above shall not affect the operation of any payment or close-out netting in respect of any amounts owing under the Hedging Agreement.
30.4 Business Days
(a) Any payment under the Finance Documents which is due to be made on a day that is not a Business Day shall be made on the next Business Day in the same calendar month (if there is one) or the preceding Business Day (if there is not).
(b) During any extension of the due date for payment of any principal or an Unpaid Sum under this Agreement interest is payable on the principal or Unpaid Sum at the rate payable on the original due date.
30.5 Currency of account
(a) Subject to paragraphs (b) and (c) below, dollars is the currency of account and payment for any sum due from a Transaction Obligor under any Finance Document.
(b) Each payment in respect of costs, expenses or Taxes shall be made in the currency in which the costs, expenses or Taxes are incurred.
(c) Any amount expressed to be payable in a currency other than dollars shall be paid in that other currency.
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30.6 Change of currency
(a) Unless otherwise prohibited by law, if more than one currency or currency unit are at the same time recognised by the central bank of any country as the lawful currency of that country, then:
(i) any reference in the Finance Documents to, and any obligations arising under the Finance Documents in, the currency of that country shall be translated into, or paid in, the currency or currency unit of that country designated by the Lender (after consultation with the Borrowers); and
(ii) any translation from one currency or currency unit to another shall be at the official rate of exchange recognised by the central bank for the conversion of that currency or currency unit into the other, rounded up or down by the Lender (acting reasonably).
(b) If a change in any currency of a country occurs, this Agreement will, to the extent the Lender (acting reasonably and after consultation with the Borrowers) specifies to be necessary, be amended to comply with any generally accepted conventions and market practice in the Relevant Interbank Market and otherwise to reflect the change in currency.
30.7 Currency conversion
The obligations of any Transaction Obligor to pay in the due currency shall only be satisfied to the extent of the amount of the due currency purchased after deducting the costs of conversion.
30.8 Disruption to Payment Systems etc.
If either the Lender determines (in its discretion) that a Disruption Event has occurred or the Lender is notified by a Borrower that a Disruption Event has occurred:
(a) the Lender may, and shall if requested to do so by a Borrower, consult with the Borrowers with a view to agreeing with the Borrowers such changes to the operation or administration of the Facility as the Lender may deem necessary in the circumstances;
(b) the Lender shall not be obliged to consult with the Borrowers in relation to any changes mentioned in paragraph (a) above if, in its opinion, it is not practicable to do so in the circumstances and, in any event, shall have no obligation to agree to such changes;
(c) any such changes agreed upon by the Lender and the Borrowers shall (whether or not it is finally determined that a Disruption Event has occurred) be binding upon the Parties and any Transaction Obligors as an amendment to (or, as the case may be, waiver of) the terms of the Finance Documents;
(d) the Lender shall not be liable for any damages, costs or losses to any person, any diminution in value or any liability whatsoever (including, without limitation for negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Lender) arising as a result of its taking, or failing to take, any actions pursuant to or in connection with this Clause 30.8 ( Disruption to Payment Systems etc. ).
31 SET-OFF
The Lender may set off any matured obligation due from a Transaction Obligor under the Finance Documents (to the extent beneficially owned by the Lender) against any matured obligation owed by the Lender to that Transaction Obligor, regardless of the place of payment, booking branch or currency of either obligation.  If the obligations are in different
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currencies, the Lender may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off.
32 CONDUCT OF BUSINESS BY THE LENDER
No provision of this Agreement will:
(a) interfere with the right of the Lender to arrange its affairs (tax or otherwise) in whatever manner it thinks fit;
(b) oblige the Lender to investigate or claim any credit, relief, remission or repayment available to it or the extent, order and manner of any claim; or
(c) oblige the Lender to disclose any information relating to its affairs (tax or otherwise) or any computations in respect of Tax.
33 NOTICES
33.1 Communications in writing
Any communication to be made under or in connection with the Finance Documents shall be made in writing and, unless otherwise stated, may be made by fax or letter.
33.2 Addresses
The address and fax number (and the department or officer, if any, for whose attention the communication is to be made) of each Party for any communication or document to be made or delivered under or in connection with the Finance Documents are:
(a) in the case of the Borrowers, that specified in Schedule 1 ( The Parties ); and
(b) in the case of any other Obligor or the Lender, that specified in Schedule 1 ( The Parties ) or, if it becomes a Party after the date of this Agreement, that notified in writing to the Lender on or before the date on which it becomes a Party;
or any substitute address, fax number or department or officer as an Obligor may notify to the Lender (or the Lender may notify to the other Parties, if a change is made by the Lender) by not less than five Business Days' notice.
33.3 Delivery
(a) Any communication or document made or delivered by one person to another under or in connection with the Finance Documents will only be effective:
(i) if by way of fax, when received in legible form; or
(ii) if by way of letter, when it has been left at the relevant address or five Business Days after being deposited in the post postage prepaid in an envelope addressed to it at that address,
and, if a particular department or officer is specified as part of its address details provided under Clause 33.2 ( Addresses ), if addressed to that department or officer.
(b) Any communication or document to be made or delivered to the Lender will be effective only when actually received by it and then only if it is expressly marked for the attention of the department or officer of the Lender specified in Schedule 1 ( The Parties ) (or any substitute department or officer as the Lender shall specify for this purpose).
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(c) Any communication or document made or delivered to the Borrowers in accordance with this Clause will be deemed to have been made or delivered to each of the Transaction Obligors.
(d) Any communication or document which becomes effective, in accordance with paragraphs (a) to (c) above, after 5.00 p.m. in the place of receipt shall be deemed only to become effective on the following day.
33.4 Electronic communication
(a) Any communication to be made between any two Parties under or in connection with the Finance Documents may be made by electronic mail or other electronic means (including, without limitation, by way of posting to a secure website) if those two Parties:
(i) notify each other in writing of their electronic mail address and/or any other information required to enable the transmission of information by that means; and
(ii) notify each other of any change to their address or any other such information supplied by them by not less than five Business Days' notice.
(b) Any such electronic communication as specified in paragraph (a) above to be made between an Obligor and the Lender may only be made in that way to the extent that those two Parties agree that, unless and until notified to the contrary, this is to be an accepted from of communication.
(c) Any such electronic communication as specified in paragraph (a) above made between any two Parties will be effective only when actually received (or made available) in readable form and in the case of any electronic communication made by a Party to the Lender only if it is addressed in such a manner as the Lender shall specify for this purpose.
(d) Any electronic communication which becomes effective, in accordance with paragraph (c) above, after 5.00 p.m. in the place in which the Party to whom the relevant communication is sent or made available has its address for the purpose of this Agreement shall be deemed only to become effective on the following day.
(e) Any reference in a Finance Document to a communication being sent or received shall be construed to include that communication being made available in accordance with this Clause 33.4 ( Electronic communication ).
33.5 English language
(a) Any notice given under or in connection with any Finance Document must be in English.
(b) All other documents provided under or in connection with any Finance Document must be:
(i) in English; or
(ii) if not in English, and if so required by the Lender, accompanied by a certified English translation prepared by a translator approved by the Lender and, in this case, the English translation will prevail unless the document is a constitutional, statutory or other official document.
33.6 Hedging Agreement
Notwithstanding anything in Clause 1.1 ( Definitions ), references to the Finance Documents or a Finance Document in this Clause do not include the Hedging Agreement entered into by the Borrowers in connection with the Facility.
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34 CALCULATIONS AND CERTIFICATES
34.1 Accounts
In any litigation or arbitration proceedings arising out of or in connection with a Finance Document, the entries made in the accounts maintained by the Lender are prima facie evidence of the matters to which they relate.
34.2 Certificates and determinations
Any certification or determination by the Lender of a rate or amount under any Finance Document is, in the absence of manifest error, conclusive evidence of the matters to which it relates.
34.3 Day count convention
Any interest, commission or fee accruing under a Finance Document will accrue from day to day and is calculated on the basis of the actual number of days elapsed and a year of 360 days or, in any case where the practice in the Relevant Interbank Market differs, in accordance with that market practice.
35 PARTIAL INVALIDITY
If, at any time, any provision of a Finance Document is or becomes illegal, invalid or unenforceable in any respect under any law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions under the law of that jurisdiction nor the legality, validity or enforceability of such provision under the law of any other jurisdiction will in any way be affected or impaired.
36 REMEDIES AND WAIVERS
No failure to exercise, nor any delay in exercising, on the part of the Lender, any Receiver or Delegate, any right or remedy under a Finance Document shall operate as a waiver of any such right or remedy or constitute an election to affirm any Finance Document.  No election to affirm any Finance Document on the part of the Lender, any Receiver or Delegate shall be effective unless it is in writing.  No single or partial exercise of any right or remedy shall prevent any further or other exercise or the exercise of any other right or remedy.  The rights and remedies provided in each Finance Document are cumulative and not exclusive of any rights or remedies provided by law.
37 SETTLEMENT OR DISCHARGE CONDITIONAL
Any settlement or discharge under any Finance Document between the Lender and any Transaction Obligor shall be conditional upon no security or payment to the Lender by any Transaction Obligor or any other person being set aside, adjusted or ordered to be repaid, whether under any insolvency law or otherwise.
38 IRREVOCABLE PAYMENT
If the Lender considers that an amount paid or discharged by, or on behalf of, a Transaction Obligor or by any other person in purported payment or discharge of an obligation of that Transaction Obligor to the Lender under the Finance Documents is capable of being avoided or otherwise set aside on the liquidation or administration of that Transaction Obligor or otherwise, then that amount shall not be considered to have been unconditionally and irrevocably paid or discharged for the purposes of the Finance Documents.
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39 CONFIDENTIAL INFORMATION
39.1 Confidentiality
The Lender agrees to keep all Confidential Information confidential and not to disclose it to anyone, save to the extent permitted by Clause 39.2 ( Disclosure of Confidential Information ) and to ensure that all Confidential Information is protected with security measures and a degree of care that would apply to its own confidential information.
39.2 Disclosure of Confidential Information
The Lender may disclose:
(a) to any of its Affiliates and Related Funds and any of its or their officers, directors, employees, professional advisers, auditors, partners and Representatives such Confidential Information as the Lender shall consider appropriate if any person to whom the Confidential Information is to be given pursuant to this paragraph (a) is informed in writing of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the confidentiality of the information or is otherwise bound by requirements of confidentiality in relation to the Confidential Information;
(b) to any person:
(i) to (or through) whom it assigns (or may potentially assign) all or any of its rights and/or obligations under one or more Finance Documents and, in each case, to any of that person's Affiliates, Related Funds, Representatives and professional advisers;
(ii) with (or through) whom it enters into (or may potentially enter into), whether directly or indirectly, any sub-participation in relation to, or any other transaction under which payments are to be made or may be made by reference to, one or more Finance Documents and/or one or more Transaction Obligors and to any of that person's Affiliates, Related Funds, Representatives and professional advisers;
(iii) appointed by the Lender or by a person to whom sub-paragraph (i) or (ii) of paragraph (b) above applies to receive communications, notices, information or documents delivered pursuant to the Finance Documents on its behalf;
(iv) who invests in or otherwise finances (or may potentially invest in or otherwise finance), directly or indirectly, any transaction referred to in sub-paragraph (i) or (ii) of paragraph (b) above;
(v) to whom information is required or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority or similar body, the rules of any relevant stock exchange or pursuant to any applicable law or regulation;
(vi) to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitrations, administrative or other investigations, proceedings or disputes;
(vii) to whom or for whose benefit the Lender charges, assigns or otherwise creates Security (or may do so) pursuant to Clause 28.3 ( Security over Lender's rights );
(viii) who is a Party, a member of the Group or any related entity of a Transaction Obligor;
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(ix) as a result of the registration of any Finance Document as contemplated by any Finance Document or any legal opinion obtained in connection with any Finance Document; or
(x) with the consent of the Guarantor;
in each case, such Confidential Information as the Lender shall consider appropriate if:
(A) in relation to sub-paragraphs (i), (ii) and (iii) of paragraph (b) above, the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking except that there shall be no requirement for a Confidentiality Undertaking if the recipient is a professional adviser and is subject to professional obligations to maintain the confidentiality of the Confidential Information;
(B) in relation to sub-paragraph (iv) of paragraph (b) above, the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking or is otherwise bound by requirements of confidentiality in relation to the Confidential Information they receive and is informed that some or all of such Confidential Information may be price-sensitive information;
(C) in relation to sub-paragraphs (v), (vi) and (vii) of paragraph (b) above, the person to whom the Confidential Information is to be given is informed of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of the Lender, it is not practicable so to do in the circumstances;
(c) to any person appointed by the Lender or by a person to whom sub-paragraph (i) or (ii) of paragraph (b) above applies to provide administration or settlement services in respect of one or more of the Finance Documents including without limitation, in relation to the trading of participations in respect of the Finance Documents, such Confidential Information as may be required to be disclosed to enable such service provider to provide any of the services referred to in this paragraph (c) if the service provider to whom the Confidential Information is to be given has entered in to a confidentiality agreement substantially in the form of the LMA Master Confidentiality Undertaking for Use With Administration/Settlement Service Providers or such other form of confidentiality undertaking agreed between the Borrowers and the Lender;
(d) to any rating agency (including its professional advisers) such Confidential Information as may be required to be disclosed to enable such rating agency to carry out its normal rating activities in relation to the Finance Documents and/or the Transaction Obligors if the rating agency to whom the Confidential Information is to be given is informed of its confidential nature and that some or all of such Confidential Information may be price-sensitive information.
39.3 Entire agreement
This Clause 39 ( Confidential Information ) constitutes the entire agreement between the Parties in relation to the obligations of the Lender under the Finance Documents regarding Confidential Information and supersedes any previous agreement, whether express or implied, regarding Confidential Information.
39.4 Inside information
The Lender acknowledges that some or all of the Confidential Information is or may be price-sensitive information and that the use of such information may be regulated or prohibited
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by applicable legislation including securities law relating to insider dealing and market abuse and the Lender undertakes not to use any Confidential Information for any unlawful purpose.
39.5 Notification of disclosure
The Lender agrees (to the extent permitted by law and regulation) to inform the Borrowers:
(a) of the circumstances of any disclosure of Confidential Information made pursuant to sub-paragraph (v) of paragraph (b) of Clause 39.2 ( Disclosure of Confidential Information ) except where such disclosure is made to any of the persons referred to in that paragraph during the ordinary course of its supervisory or regulatory function; and
(b) upon becoming aware that Confidential Information has been disclosed in breach of this Clause 39 ( Confidential Information ).
39.6 Continuing obligations
The obligations in this Clause 39 ( Confidential Information ) are continuing and, in particular, shall survive and remain binding on the Lender for a period of 12 months from the earlier of:
(a) the date on which all amounts payable by the Obligors under or in connection with this Agreement have been paid in full and the Commitment has been cancelled or otherwise ceased to be available; and
(b) the date on which the Lender otherwise ceases to be the Lender.

40 COUNTERPARTS
Each Finance Document may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of the Finance Document.
90

SECTION 11

GOVERNING LAW AND ENFORCEMENT
41 GOVERNING LAW
This Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.
42 ENFORCEMENT
42.1 Jurisdiction
(a) The courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement (including a dispute regarding the existence, validity or termination of this Agreement or any non-contractual obligation arising out of or in connection with this Agreement) (a " Dispute ").
(b) The Obligors accept that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly no Obligor will argue to the contrary.
(c) This Clause 42.1 ( Jurisdiction ) is for the benefit of the Lender only.  As a result, the Lender shall be not be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction.  To the extent allowed by law, the Lender may take concurrent proceedings in any number of jurisdictions.
42.2 Service of process
(a) Without prejudice to any other mode of service allowed under any relevant law, each Obligor (other than an Obligor incorporated in England and Wales):
(i) irrevocably appoints Messrs. E.J.C Album Solicitors, presently of Landmark House, 190 Willifield Way, London, NW11 GY1, England (Attention of Mr. Eduard Album Fax +44 (0) 20 8457 5558, e-mail: ejca@mitgr.com ) as its agent for service of process in relation to any proceedings before the English courts in connection with any Finance Document; and
(ii) agrees that failure by a process agent to notify the relevant Obligor of the process will not invalidate the proceedings concerned.
(b) If any person appointed as an agent for service of process is unable for any reason to act as agent for service of process, the Borrowers (on behalf of all the Obligors) must immediately (and in any event within 14 days of such event taking place) appoint another agent on terms acceptable to the Lender.  Failing this, the Lender may appoint another agent for this purpose.
This Agreement has been entered into on the date stated at the beginning of this Agreement.
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SCHEDULE 1

THE PARTIES
PART A

THE OBLIGORS

Name of Borrower
 
Place of Incorporation
Registration number (or equivalent, if any)
Address for Communication
Premier Marine Co.
 
Marshall Islands
77643
16 Grigoriou Lambraki, 16674 Glyfada, Athens, Greece
Gladiator Shipping Co.
 
Marshall Islands
77645
16 Grigoriou Lambraki, 16674 Glyfada, Athens, Greece
Guardian Shipping Co.
Marshall Islands
77647
16 Grigoriou Lambraki, 16674 Glyfada, Athens, Greece

Name of Guarantor
 
Place of Incorporation
Registration number (or equivalent, if any)
Address for Communication
Seanergy Maritime Holdings Corp.
Marshall Islands
27721
16 Grigoriou Lambraki, 16674 Glyfada, Athens, Greece
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PART B

THE ORIGINAL LENDER
Name of Original Lender
 
Address for Communication
UniCredit Bank AG
7 Heraklitou Street, 10673 Athens, Greece
(or any other office of UniCredit Bank AG in accordance with Clause 28.4 ( Change of lending office )
Fax: +30 210 3640063
Attention: the Managers
93

SCHEDULE 2

CONDITIONS PRECEDENT
PART A

CONDITIONS PRECEDENT TO INITIAL UTILISATION REQUEST
1 Obligors
1.1 A copy of the constitutional documents of each Obligor.
1.2 A copy of a resolution of the board of directors of each Obligor:
(a) approving the terms of, and the transactions contemplated by, the Finance Documents to which it is a party and resolving that it execute the Finance Documents to which it is a party;
(b) authorising a specified person or persons to execute the Finance Documents to which it is a party on its behalf; and
(c) authorising a specified person or persons, on its behalf, to sign and/or despatch all documents and notices (including, if relevant, a Utilisation Request and each Selection Notice) to be signed and/or despatched by it under, or in connection with, the Finance Documents to which it is a party.
1.3 An original of the power of attorney of each Obligor authorising a specified person or persons to execute the Finance Documents to which it is a party.
1.4 A specimen of the signature of each person authorised by the resolution referred to in paragraph 1.2 above.
1.5 A certificate of incumbency in respect of any Approved Manager.
1.6 A copy of a resolution signed by the Guarantor as the holder of the issued shares in each Borrower, approving the terms of, and the transactions contemplated by, the Finance Documents to which that Borrower is a party.
1.7 A certificate of each Obligor (signed by a director) confirming that borrowing or guaranteeing, as appropriate, the Commitment would not cause any borrowing, guaranteeing or similar limit binding on that Transaction Obligor to be exceeded.
1.8 A certificate of each Obligor that is incorporated outside the UK (signed by a director) certifying either that (i) it has not delivered particulars of any UK Establishment to the Registrar of Companies as required under the Overseas Regulations or (ii) it has a UK Establishment and specifying the name and registered number under which it is registered with the Registrar of Companies.
1.9 A certificate of an authorised signatory of the relevant Obligor certifying that each copy document relating to it specified in this Part A of Schedule 2 ( Conditions Precedent ) is correct, complete and in full force and effect as at a date no earlier than the date of this Agreement.
2 MOA, Assignable Charter and other documents
2.1 Copies of the MOA and of all documents signed or issued by a Borrower or the relevant Seller (or any of them) under or in connection with it.
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2.2 Copies of any Assignable Charter and of all documents signed or issued by a Borrower or the Charterer (or both of them) under or in connection with it.
2.3 Such documentary evidence as the Lender and its legal advisers may require in relation to the due authorisation and execution of the MOA and the Assignable Charter by each of the parties thereto.
2.4 A copy of the Hedging Agreement executed by the Borrowers.
3 Finance Documents
3.1 A duly executed original of any Finance Document not otherwise referred to in this Schedule 2 ( Conditions Precedent ).
3.2 A duly executed original of any other document required to be delivered by each Finance Document if not otherwise referred to this Schedule 2 ( Conditions Precedent ).
4 Security
4.1 A duly executed original of the Account Security in relation to each Earnings Account and of the Shares Security in respect of each Borrower (and of each document to be delivered under each of them).
4.2 A duly executed original of the Hedging Agreement Security in respect of the Borrower (and of each document to be delivered under it).
5 Legal opinions
5.1 A legal opinion of Watson Farley & Williams, legal advisers to the Lender in England.
5.2 If an Obligor is incorporated in a jurisdiction other than England and Wales, a legal opinion of the legal advisers to the Lender in the relevant jurisdiction.
6 Other documents and evidence
6.1 Evidence that the Borrowers have deposited at each relevant time with the Lender an amount of $444,026.54 in respect of Tranche A, $303,142.68 in respect of Tranche B and $396,831.78 in respect of Tranche C (not forming part of the Advance) towards payment of the Purchase Price of each of the Ships.
6.2 Evidence that any process agent referred to in Clause 42.2 ( Service of process ), if not an Obligor, has accepted its appointment.
6.3 A copy of any other Authorisation or other document, opinion or assurance which the Lender considers to be necessary or desirable (if it has notified the Borrowers accordingly) in connection with the entry into and performance of the transactions contemplated by any Transaction Document or for the validity and enforceability of any Transaction Document.
6.4 The original of any mandates or other documents required in connection with the opening or operation of the Accounts.
6.5 Evidence that the fees, costs and expenses then due from the Borrowers pursuant to Clause 11 ( Fees ) and Clause 16 ( Costs and Expenses ) have been paid or will be paid by the first Utilisation Date.
6.6 Evidence satisfactory to the Lender that the Disclosed Person is the ultimate beneficial owner of not less than 40 per cent. of either (A) the issued shares in the Guarantor and the voting rights attached to such shares and/or (B) the voting rights attached to any of the
95

issued shares in the Guarantor which are not owned by the Disclosed Person and that no other person or company is the ultimate beneficial owner (either directly or indirectly) of (A) issued shares in the Guarantor and the voting rights attached to such shares and/or (B) the voting rights in the issued shares of the Guarantor, from that held by the Disclosed Person at the date of this Agreement.
6.5 Such evidence as the Lender may require to be able to satisfy its "know your customer" or similar identification procedures in relation to the transactions contemplated by the Finance Documents.
96

PART B

CONDITIONS PRECEDENT TO UTILISATION – TRANCHE A, TRANCHE B, TRANCHE C
1 Borrowers
A certificate of an authorised signatory of each Borrower certifying that each copy document which it is required to provide under this Part B of Schedule 2 ( Conditions Precedent ) is correct, complete and in full force and effect as at the Utilisation Date of the Advance under the relevant Tranche.
2 Ship and other security
2.1 A duly executed original of the Mortgage, the Deed of Covenant and the General Assignment in respect of the relevant Ship and of each document to be delivered under or pursuant to each of them together with documentary evidence that the Mortgage in respect of that Ship has been duly registered as a valid first priority ship mortgage in accordance with the laws of the jurisdiction of its Approved Flag.
2.2 Documentary evidence that that Ship:
(a) has been unconditionally delivered by the relevant Seller to, and accepted by, the relevant Borrower under the MOA and that the full Purchase Price payable and all other sums due to that Seller under the MOA, other than the sums to be financed pursuant to the Utilisation of the Advance, have been paid to that Seller;
(b) is definitively and permanently registered in the name of the relevant Borrower under the Approved Flag applicable to that Ship (i) at the port of Douglas, in the case of Ship A, and (ii) at the port of Nassau, in the case of each of Ship B and Ship C;
(c) is in the absolute and unencumbered ownership of the relevant Borrower save as contemplated by the Finance Documents;
(d) is classed with class +100 A1 with Lloyds Register of Shipping or such other classification society which is a member of IACS and approved by the Lender in its discretion.
(e) is insured in accordance with the provisions of this Agreement and all requirements in this Agreement in respect of insurances have been complied with.
2.3 Documents establishing that that Ship will, as from the Utilisation Date of the Advance under the relevant Tranche, be managed commercially by the Approved Commercial Manager and managed technically by the Approved Technical Manager on terms acceptable to the Lender, together with:
(a) a Manager's Undertaking for each of the Approved Technical Manager and the Approved Commercial Manager of that Ship; and
(b) copies of the Approved Technical Manager's Document of Compliance and of the Ship's Safety Management Certificate (together with any other details of the applicable Safety Management System which the Lender requires) and of any other documents required under the ISM Code and the ISPS Code in relation to that Ship including without limitation an ISSC.
2.4 An opinion from an independent insurance consultant acceptable to the Lender on such matters relating to the Insurances as the Lender may require.
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2.5 Evidence of the Market Value of that Ship, addressed to the Lender, stated to be for the purposes of this Agreement and dated not earlier than 14 Business Days before the Utilisation Date for that Advance.
3 Legal opinions
Legal opinions of the legal advisers to the Lender in the jurisdiction of the Approved Flag of the Ship:
(a) in respect of Ship A, Isle of Man; and
(b) in respect of each of Ship B and Ship C, the Commonwealth of the Bahamas,
and such other relevant jurisdictions as the Lender may require.
4 Other documents and evidence
4.1 Evidence that the fees, costs and expenses then due from the Borrowers pursuant to Clause 11 ( Fees ) and Clause 16 ( Costs and Expenses ) have been paid or will be paid by the Utilisation Date for the Advance under the relevant Tranche.
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SCHEDULE 3

REQUESTS
PART A

UTILISATION REQUEST
From: Premier Marine Co.
Gladiator Shipping Co.
Guardian Shipping Co.
To: UniCredit Bank AG
Dated:                            [ l ] 2015
Dear Sirs
Premier Marine Co., Gladiator Shipping Co. and Guardian Shipping Co. – [ l ] Facility Agreement dated [ l ] (the "Agreement")
1 We refer to the Agreement.  This is an Utilisation Request.  Terms defined in the Agreement have the same meaning in this Utilisation Request unless given a different meaning in this Utilisation Request.
2 We wish to borrow the Advance under Tranche [A][B][C] on the following terms:
 
Proposed Utilisation Date:
 
[ l ] (or, if that is not a Business Day, the next Business Day)
 
Amount:
 
[ l ] or, if less, the Available Facility
 
Interest Period for the first Advance:
[ l ]
3 We confirm that each condition specified in Clause 4.1 ( Initial conditions precedent ) and Clause 4.2 ( Further conditions precedent ) of the Agreement as they relate to the Advance to which this Utilisation Request refers is satisfied on the date of this Utilisation Request.
4 The proceeds of this Advance should be credited to [account].
5 This Utilisation Request is irrevocable.
Yours faithfully


____________________
[ l ]
authorised signatory for
PREMIER MARINE CO.


____________________
[ l ]
authorised signatory for
GLADIATOR SHIPPING CO.


____________________
99

[ l ]
authorised signatory for
GUARDIAN SHIPPING CO.
100

PART B

SELECTION NOTICE

From: Premier Marine Co.
Gladiator Shipping Co.
Guardian Shipping Co.
To: UniCredit Bank AG
Dated:                            [ l ]
Dear Sirs
Premier Marine Co., Gladiator Shipping Co. and Guardian Shipping Co. - [ l ] Facility Agreement dated [ l ] (the "Agreement")
1 We refer to the Agreement.  This is a Selection Notice.  Terms defined in the Agreement have the same meaning in this Selection Notice unless given a different meaning in this Selection Notice.
2 We request that the next Interest Period for the Loan be [ l ].
3 This Selection Notice is irrevocable.
Yours faithfully


____________________
[ l ]
authorised signatory for
PREMIER MARINE CO.


____________________
[ l ]
authorised signatory for
GLADIATOR SHIPPING CO.


____________________
[ l ]
authorised signatory for
GUARDIAN SHIPPING CO.
101

SCHEDULE 4

FORM OF COMPLIANCE CERTIFICATE

To: UniCredit Bank AG as Lender
From: Seanergy Maritime Holdings Corp.
Dated:                            [ l ]

Dear Sirs
Premier Marine Co., Gladiator Shipping Co. and Guardian Shipping Co.  – [ l ] Facility Agreement dated [ l ] (the "Agreement")
1 We refer to the Agreement.  This is a Compliance Certificate.  Terms defined in the Agreement have the same meaning when used in this Compliance Certificate unless given a different meaning in this Compliance Certificate.
2 We confirm that:
2.1 [the Leverage Ratio does not exceed 75 per cent.; and]
2.2 [the ratio of EBITDA to Net Interest Expenses (as shown in the relevant Financial Statements accompanying this Compliance Certificate) is not less than 2:1; and]
2.3 [we maintain Cash and Cash Equivalents in an amount of [$    ] inclusive of [contractually committed but undrawn parts of] shareholders'Notes in an aggregate amount of [$    ] [made available] to ourselves.]
3 [We also confirm that each Borrower maintains in accounts held with the Lender minimum credit balances of not less $500,000 (free of Security other than in favour of the Lender).]
4 [We confirm that no Event of Default is continuing.]

Signed: ________________________
Chief Financial Officer
Seanergy Maritime Holdings Corp.
102

SCHEDULE 5

DETAILS OF THE SHIPS
 
Ship name
Name of the Borrower owner
Type
GRT
NRT
Approved Flag and port of registration
Approved Classification Society
Approved Classification
Approved Commercial Manager
Approved Technical Manager
"GENEROUS"
(to be renamed "PREMIERSHIP")
Borrower A
bulk carrier
88479
56828
Isle of Man port of Douglas
ABS
+100 A1
Fidelity Marine or Seanergy Management
V. Ships and (as the case may be) Seanergy Shipmanagement
"ASSOS STRIKER"
(to be renamed "GLADIATORSHIP")
Borrower B
bulk carrier
33005
19231
Bahamas, port of Nassau
NKK
+100 A1
Fidelity Marine or Seanergy Management
V. Ships and (as the case may be) Seanergy Shipmanagement
"MYSTIC STRIKER"
(to be renamed "GUARDIANSHIP")
Borrower C
bulk carrier
33044
19231
Bahamas, port of Nassau
NKK
+100 A1
Fidelity Marine or Seanergy Management
V. Ships and (as the case may be) Seanergy Shipmanagement
 
103

SCHEDULE 6

TIMETABLES
Delivery of a duly completed Utilisation Request (Clause 5.1 ( Delivery of a Utilisation Request )) or a Selection Notice (Clause 9.1 ( Selection of Interest Periods ))
 
Two Business Days before the intended Utilisation Date (Clause 5.1 ( Delivery of a Utilisation Request )) or the expiry of the preceding Interest Period (Clause 9.1 ( Selection of Interest Periods ))
     
LIBOR is fixed
 
 
Quotation Day as of 11:00 am London time
Reference Bank Rate calculated by reference to available quotations in accordance with Clause 10.2 ( Calculation of Reference Bank Rate )
 
Noon on the Quotation Day
     
104

EXECUTION PAGES
BORROWER
SIGNED by Theodora Mitropetrou
) /s/ Theodora Mitropetrou
duly authorised attorney-in-fact
)
for and on behalf of
)
PREMIER MARINE CO.
)
in the presence of:
)
   
Witness' signature: /s/ Andreas Giakoumelos
)
Witness' name: Andreas Giakoumelos
)
Witness' address:
WATSON, FARLEY & WATSON
348 SYNGROU AVENUE
176 74 KALLITHEA
ATHENS - GREECE
)

SIGNED by Theodora Mitropetrou
) /s/ Theodora Mitropetrou
duly authorised attorney-in-fact
)
for and on behalf of
)
GLADIATOR SHIPPING CO.
)
in the presence of:
)
   
Witness' signature: /s/ Andreas Giakoumelos
)
Witness' name: Andreas Giakoumelos
)
Witness' address:
WATSON, FARLEY & WATSON
348 SYNGROU AVENUE
176 74 KALLITHEA
ATHENS - GREECE
)

SIGNED by Theodora Mitropetrou
) /s/ Theodora Mitropetrou
duly authorised attorney-in-fact
)
for and on behalf of
)
GUARDIAN SHIPPING CO.
)
in the presence of:
)
   
Witness' signature: /s/ Andreas Giakoumelos
)
Witness' name: Andreas Giakoumelos
)
Witness' address:
WATSON, FARLEY & WATSON
348 SYNGROU AVENUE
176 74 KALLITHEA
ATHENS - GREECE
)
105

GUARANTOR
SIGNED by Theodora Mitropetrou
) /s/ Theodora Mitropetrou
duly authorised attorney-in-fact
)
for and on behalf of
)
SEANERGY MARITIME HOLDINGS CORP.
)
in the presence of:
)

Witness' signature: /s/ Andreas Giakoumelos
)
Witness' name: Andreas Giakoumelos
)
Witness' address:
WATSON, FARLEY & WATSON
348 SYNGROU AVENUE
176 74 KALLITHEA
ATHENS - GREECE
)

ORIGINAL LENDER
SIGNED by Nikolaos Tzoumakas
                      Pericles Lykoudis
) /s/ Nikolaos Tzoumakas
)
duly authorised attorneys-in-fact
)
for and on behalf of
) /s/ Pericles Lykoudis
UNICREDIT BANK AG
)
in the presence of:
)
   
Witness' signature: /s/ Andreas Giakoumelos
)
Witness' name: Andreas Giakoumelos
)
Witness' address:
WATSON, FARLEY & WATSON
348 SYNGROU AVENUE
176 74 KALLITHEA
ATHENS - GREECE
)


106
Exhibit 4.40
 
Private & confidential





Dated: 4th November, 2015
ALPHA BANK A.E.
- and -

SQUIRE OCEAN NAVIGATION CO.

LOAN AGREEMENT
for a secured floating interest rate
loan facility of up to US$33,750,173










Theo V. Sioufas & Co.
Law Offices
Piraeus
TABLE OF CONTENTS

CLAUSE
HEADINGS
PAGE
1.
PURPOSE, DEFINITIONS AND INTERPRETATION
3
2.
THE LOAN
20
3.
INTEREST
22
4.
REPAYMENT - PREPAYMENT
25
5.
PAYMENTS, TAXES, LOAN ACCOUNT AND COMPUTATION
28
6.
REPRESENTATIONS AND WARRANTIES
31
7.
CONDITIONS PRECEDENT
37
8.
COVENANTS
42
9.
EVENTS OF DEFAULT
56
10.
INDEMNITIES - EXPENSES – FEES
62
11.
SECURITY, APPLICATION, AND SET-OFF
68
12.
UNLAWFULNESS, INCREASED COSTS
70
13.
EARNINGS ACCOUNT
73
14.
ASSIGNMENT, TRANSFER, PARTICIPATION, LENDING OFFICE
75
15.
MISCELLANEOUS
78
16.
NOTICES
81
17.
LAW AND JURISDICTION
82
 
SCHEDULE 1:      Form of Drawdown Notice
 
SCHEDULE 2:      Form of Insurance Letter
 
SCHEDULE 3:      Form of Compliance Certificate
 

THIS AGREEMENT is dated the 4 th day of November, 2015 made BETWEEN:

(1) ALPHA BANK A.E. , a banking société anonyme incorporated in and pursuant to the laws of the Hellenic Republic with its head office at 40 Stadiou Street, Athens GR 102 52, Greece, acting, except as otherwise herein provided, through its office at 93 Akti Miaouli, Piraeus, Greece (hereinafter called the "Lender", which expression shall include its successors and assigns); and
(2) SQUIRE OCEAN NAVIGATION CO. , a company duly incorporated and validly existing under the laws of the Republic of Liberia having its registered office at 80 Broad Street, Monrovia, Republic of Liberia (hereinafter called the " Borrower" ,   which expression shall include its successors )
AND IT IS HEREBY AGREED as follows:
1. PURPOSE, DEFINITIONS AND INTERPRETATION
1.1 Amount and Purpose
This Agreement sets out the terms and conditions upon and subject to which the Lender agrees to make available to the Borrower a loan of up to Dollars Thirty three million seven hundred fifty thousand one hundred seventy three ($33,750,173) by way of one (1) Advance, to be used for the purpose of financing part (approximately 98%) of the Purchase Price of the Vessel.
1.2 Definitions
In this Agreement, unless the context otherwise requires each term or expression defined in the recital of the parties and in this Clause shall have the meaning given to it in the recital of the parties, in this Clause:
"Account Pledge Agreement" means an agreement to be entered into between the Borrower and the Lender for the creation of a pledge over the Earnings Account in favour of the Lender, in form and substance satisfactory to the Lender as the same may from time to time be amended and/or supplemented;

" Accounting Information " means the semi-annually unaudited consolidated accounts and/or (as the context may require) the annual audited consolidated accounts to be provided by the Guarantor to the Lender in accordance with Clause 8.1(e);
"Accounting Period" means each consecutive period of six (6) months falling during the Security Period for which Accounting Information is required to be delivered pursuant to this Agreement and the Guarantee ;
"Applicable Accounting Principles" means the generally accepted accounting principles in the USA or IFRS and practices consistently applied ;
3
"Advance" means each borrowing of a portion of the Commitment by the Borrower or (as the context may require) the principal amount of such borrowing;
"Alternative Rate" means a rate agreed between the Lender and the Borrower on the basis of which (instead of LIBOR) the interest rate is determined pursuant to Clause 3.6;

"Availability Period" means the period starting on the date hereof and ending on the 30 th day of November, 2015 or until such later date as the Lender may agree in writing or on such earlier date (if any): (i) on which the whole Commitment has been advanced by the Lender to the Borrower, or (ii) on which the Commitment is reduced to zero pursuant to Clauses 3.6, 9.2, 12.1 or 12.2 or any other Clause of this Agreement;
"Balloon Instalment" means the part of the Loan amounting to Dollars Twenty million two hundred fifty thousand and one ($20,250,001);
"Banking Day" means any day on which banks and foreign exchange markets in New York, London, Piraeus and Athens and in each country or place in or at which an act is required to be done under this Agreement in accordance with the usual practice of the Lender, are open for the transaction of business of the nature contemplated in this Agreement;
"Borrowed Money" means Indebtedness incurred in respect of (i) money borrowed or raised, (ii) any bond, note, loan stock, debenture or similar instrument, (iii) acceptance of documentary credit facilities, (iv) deferred payments for assets acquired, (v) rental payments under leases (whether in respect of land, machinery, equipment or otherwise) entered into primarily as a method of raising finance or of financing the acquisition of the asset leased, (vi) guarantees, bonds, stand-by letters of credit or other instruments issued in connection with the performance of contracts and (vii) guarantees or other assurances against financial loss in respect of Indebtedness of any person falling within any of sub-paragraphs (i) to (vi) above;
"Borrower" means the Borrower as specified in the beginning of this Agreement;
"Borrower's Debt Service" in relation to any period means an amount (as conclusively certified by the Lender, save for manifest error) which is equal to the aggregate payments of principal and interest which the Borrower is obliged to pay during such period;
"Cash" means cash and cash equivalents as reported in debtor's financial statements;
"Charterparty" means any time or bareboat charterparty or contract of affreightment, agreement or related document in respect of the employment of the Vessel whether now existing or hereinafter entered into by the Borrower or any person, firm or company on its behalf for a period of twelve (12) months or more
4
with a charterer, at a daily rate and on terms and conditions reasonably acceptable to the Lender (and shall include any addenda thereto) ;
"Charterparty Assignment" means the assignment of any Charterparty, in favour of the Lender, in form and substance satisfactory to the Lender as the same may from time to time be amended and/or supplemented ;
"Classification" means in respect of the Vessel, the classification referred to in the Mortgage with the Classification Society or such other Classification Society as the Lender shall, at the request of the Borrower, have agreed in writing shall be treated as the Classification Society for the purposes of the Security Documents;
"Classification Society" means such classification society which is a member of IACS and which the Lender shall, at the request of the Borrower, have agreed in writing to be treated as the Classification Society for the purposes of the Security Documents;
"Commitment" means the amount which the Lender has agreed to lend to the Borrower under Clause 2.1 as reduced pursuant to any relevant term of this Agreement;
"Commitment Letter" means the Commitment Letter dated 31 st July, 2015 addressed by the Lender to the Guarantor and shall include any amendments or addenda thereto;
"Compulsory Acquisition" means requisition for title or other compulsory acquisition, requisition, appropriation, expropriation, deprivation, forfeiture or confiscation for any reason of the Vessel by any Government Entity or other competent authority, whether de jure or de facto, but shall exclude requisition for use or hire not involving requisition of title;
" Continuing Event of Default " means an Event of Default which has not be remedied or waived;
"Delivery" means the delivery of the Vessel from the Seller to, and the acceptance of the Vessel by, the Borrower pursuant to the MOA;
"Delivery Date" means the date upon which the Delivery of the Vessel occurs;
"Default" means any Event of Default or any event which with the giving of notice or lapse of time (or any combination thereof) would constitute an Event of Default;
"Default Rate" means that rate of interest per annum which is determined in accordance with the provisions of Clause 3.4;
5
"DOC" means a document of compliance issued to an Operator in accordance with rule 13 of the ISM Code;
"Dollars" and "$" mean the lawful currency of the United States of America and in respect of all payments to be made under any of the Security Documents means funds which are for same day settlement in the New York Clearing House Interbank Payments System (or such other U.S. dollar funds as may at the relevant time be customary for the settlement of international banking transactions denominated in Dollars);
"Drawdown Date" means the day, being a Banking Day, on which the Commitment is or, as the context may require, shall be advanced to the Borrower;
"Drawdown Notice" means a notice substantially in the terms of Schedule 1 ( Form of Drawdown Notice ) (or in any other form which the Lender approves);
"Earnings" means all earnings of the Vessel, both present or future, including all freight, hire and passage moneys, compensation payable to the Owner in the event of requisition of the Vessel for hire, remuneration for salvage and towage services, demurrage and detention moneys, contributions of any nature whatsoever in respect of general average, damages for breach (or payments for variation or termination) of any charterparty or other contract for the employment of the Vessel and any other earnings whatsoever due or to become due to the Owner in respect of the Vessel and all sums recoverable under the Insurances in respect of loss of Earnings and includes, if and whenever the Vessel is employed on terms whereby any and all such moneys as aforesaid are pooled or shared with any other person, that proportion of the net receipts of the relevant pooling or sharing agreement which is attributable to the Vessel;
"Earnings Account" means the account to be opened and maintained with the Lending Office or with any other branch of the Lender or any other office of the Lender or with a bank or financial institution other than the Lender (whether associated with the Lender or not) which the Lender may designate to the Borrower at the discretion of the Lender pursuant to Clause 13.8 and shall include any sub-accounts or call accounts (whether in Dollars or any other currency) opened under the same designation or any revised designation or number from time to time notified by the Lender to the Borrower, to which all Earnings of the Vessel are to be paid in accordance with the provisions of this Agreement;
"Encumbrance" means any mortgage, charge (whether fixed or floating), pledge, lien, hypothecation, assignment, security interest, title retention, arrest, seizure, garnishee order (whether nisi or absolute) or any other order or judgement having similar effect or other encumbrance of any kind securing or any right conferring a priority of payment in respect of any obligation of any person;
6
"Environmental Affiliate" means any agent or employee of the Borrower or any person having a contractual relationship with the Borrower in connection with any Relevant Ship or her operation or the carriage of cargo thereon;
"Environmental Approval" means any consent, authorisation, licence or approval of any governmental or public body or authorities or courts applicable to any Relevant Ship or her operation or the carriage of cargo thereon and/or passengers therein and/or provisions of goods and/or services on or from any Relevant Ship required under any Environmental Law;
"Environmental Claim" means (i) any claim by, or directive from, any applicable governmental, judicial or other regulatory authority alleging breach of, or non- compliance with, any Environmental Laws or Environmental Approvals or otherwise howsoever relating to or arising out of an Environmental Incident or (ii) any claim by any other third party howsoever relating to or arising out of an Environmental Incident (and, in each such case, "claim" shall mean a claim for damages, clean-up costs, compliance, remedial action or otherwise);
"Environmental Incident" means (i) any release of Material of Environmental Concern   from the Vessel, (ii) any incident in which Material of Environmental Concern   is released from a vessel other than the Vessel and which involves collision between the Vessel and such other vessel or some other incident of navigation or operation, in either case, where the Vessel, the Borrower or a Manager are  at fault or otherwise liable (in whole or in part) or (iii) any incident in which Material of Environmental Concern   is released from a vessel other than the Vessel and where the Vessel is liable to be arrested as a result and/or where the Borrower or a Manager are at fault or otherwise liable to any legal or administrative action;
"Environmental Laws" means all national, international and state laws, rules, regulations, treaties and conventions applicable to any Relevant Ship pertaining to the pollution or protection of human health or the environment including, without limitation, the carriage or Materials of Environmental Concern and actual or threatened emissions, spills, releases or discharges of Materials of Environmental Concern and actual or threatened emissions, spills, releases or discharges of Materials of Environmental Concern from any Relevant Ship (including, without limitation, the United States Oil Pollution Act of 1990 and any comparable laws of the individual States of the United States of America);
"Event of Default" means any event or circumstance set out in Clause 9.1;
"Expenses" means the aggregate at any relevant time (to the extent that the same have not been received or recovered by the Lender) of:
(a) all losses, liabilities, costs, charges, expenses, damages and outgoings of whatever nature, (including, without limitation, Taxes, repair costs,
7
registration fees and insurance premiums, crew wages, repatriation expenses and seamen's pension fund dues) suffered, incurred, charged to or paid or committed to be paid by the Lender in connection with the exercise of the powers referred to in or granted by any of the Security Documents or otherwise payable by the Borrower in accordance with the terms of any of the Security Documents;
(b) the expenses referred to in Clause 10.2; and
(c) interest on all such losses, liabilities, costs, charges, expenses, damages and outgoings from, in the case of Expenses referred to in sub-paragraph (b) above, the date on which such Expenses were demanded by the Lender from the Borrower and in all other cases, the date on which the same were suffered, incurred or paid by the Lender until the date of receipt or recovery thereof (whether before or after judgement) at the Default Rate (as conclusively certified by the Lender but always absent manifest error);
" FATCA " means:
(a) sections 1471 to 1474 of the US Internal Revenue Code of 1986 (the " Code ") or any associated regulations or other associated official guidance;
(b) any treaty, law, regulation or other official guidance enacted in any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction, which (in either case) facilitates the implementation of paragraph (a) above; or
(c) any agreement pursuant to the implementation of paragraphs (a) or (b) above with the US Internal Revenue Service, the US government or any governmental or taxation authority in any other jurisdiction;
" FATCA Application Date " means:
(a) in relation to a "withholdable payment" described in section 1473(1)(A)(i) of the Code (which relates to payments of interest and certain other payments from sources within the US), 1 January 2014;
(b) in relation to a "withholdable payment" described in section 1473(1)(A)(ii) of the Code (which relates to "gross proceeds" from the disposition of property of a type that can produce interest from sources within the US), 1 January 2015; or
(c) in relation to a "passthru payment" described in section 1471(d)(7) of the Code not falling within paragraphs (a) or (b) above, 1 January 2017,
8
or, in each case, such other date from which such payment may become subject to a deduction or withholding required by FATCA as a result of any change in FATCA after the date of this Agreement;
" FATCA Deduction " means a deduction or withholding from a payment under a Security Document required by FATCA;
" FATCA Exempt Party " means a party that is entitled to receive payments free from any FATCA Deduction;
" FATCA FFI " means a foreign financial institution as defined in section 1471(d)(4) of the Code which, if the Lender is not a FATCA Exempt Party, could be required to make a FATCA Deduction;
" FATCA Payment " means either:
(a) the increase in a payment made by the Borrower or a Security Party to the Lender under Clause 10.10 or 10.11(b) of this Agreement; or
(b) a payment under Clause 10.11(d) of this Agreement;
" Fidelity " means Fidelity Marine Inc., a corporation incorporated in the Marshall Islands having its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH96960, Marshall Islands;
"Financial Year" means, in relation to the Borrower and/or the Guarantor, each period of 1 year commencing on 1 January in respect of which their individual or, as the case may be, consolidated accounts are or ought to be prepared;
"Final Maturity Date" means the sixth (6 th ) anniversary of the Drawdown Date;
"Flag State" means the Republic of Liberia or such other state or territory proposed in writing by the Borrower to the Lender and approved by the Lender (such approval not to be unreasonably withheld, especially when requested for trading purposes), as being the Flag State of the Vessel for the purposes of the Security Documents;
"General Assignment" means the assignment of the Earnings, Insurances and Requisition Compensation collateral to the Mortgage executed or (as the context may require) to be executed by the Borrower in favour of the Lender, in form and substance satisfactory to the Lender as the same may from time to time be amended and/or supplemented;
"Government Entity" means and includes (whether having a distinct legal personality or not) any national or local government authority, board, commission, department, division, organ, instrumentality, court or agency and any association,
9
organisation or institution of which any of the foregoing is a member or to whose jurisdiction any of the foregoing is subject or in whose activities any of the foregoing is a participant;
"Governmental Withholdings" means withholdings and any restrictions or conditions resulting in any charge whatsoever imposed, either now or hereafter, by any sovereign state or by any political sub-division or taxing authority of any sovereign state;
"Group" means the Guarantor and its consolidated Subsidiaries (whether direct or indirect and including, but not limited to, the Borrower) from time to time during the Security Period and " member of the Group " shall be construed accordingly;
"Guarantee" means the irrevocable and unconditional guarantee executed or (as the context may require) to be executed by the Guarantor as a security for the Outstanding Indebtedness and any and all other obligations of the Borrower under this Agreement and the Security Documents, in form and substance satisfactory to the Lender as the same may from time to time be amended and/or supplemented;
"Guarantor" means Seanergy Maritime Holdings Corp. ,   a company lawfully incorporated and validly existing under the laws of the Republic of the Marshall Islands ,   and/or any other person nominated by the Borrower and acceptable to the Lender which may give a Guarantee, and includes its successors in title;
"Guarantor's Debt Service" means in relation to any period means the liability of the Guarantor and its Subsidiaries for principal and interest payable in respect of any moneys borrowed or raised by the Guarantor and/or its Subsidiaries to pay during such period, excluding any shareholder loan ;
"IFRS" means international accounting standards within the meaning of the IAS Regulations 1606/2002 to the extent applicable to the relevant financial statements;
"Indebtedness" means any obligation for the payment or repayment of money, whether as principal or as surety, whether present or future, actual or contingent;
"Insurance Letter" means a letter from the Borrower in the form of Schedule 2 ( Form of Insurance Letter );
"Insurances" means all policies and contracts of insurance and reinsurances for captive company, if applicable, (including, without limitation, all entries of the Vessel in a protection and indemnity, war risks or other mutual insurance association) which are from time to time in place or taken out or entered into by or for the benefit of the Owner (whether in the sole name of the Owner or in the joint names of the Owner, the relevant charterer and the Lender) in respect of the Vessel and its earnings or otherwise howsoever in connection with the Vessel and all
10
benefits of such policies and/or contracts (including all claims of whatsoever nature and return of premiums);
"Interest Payment Date" means in respect of the Loan or any part thereof in respect of which a separate Interest Period is fixed the last day of the relevant Interest Period and in case of any Interest Period longer than three (3) months the date(s) falling at successive three (3) monthly intervals during such longer Interest Period and the last day of such Interest Period;
"Interest Period" means in relation to the Loan or any part thereof, each period for the calculation of interest in respect of the Loan or such part ascertained in accordance with Clauses 3.2 and 3.3;
"ISM Code" means in relation to its application to the Borrower, the Vessel and her operation:
(a) "The International Management Code for the Safe Operation of Ships and for Pollution Prevention", currently known or referred to as the "ISM Code", adopted by the Assembly of the International Maritime Organisation by Resolution A. 741(18) on 4 th November, 1993 and incorporated on 19 th May, 1994 into chapter IX of the International Convention for the Safety of Life at Sea 1974 (SOLAS 1974); and
(b) all further resolutions, circulars, codes, guidelines, regulations and recommendations which are now or in the future issued by or on behalf of the International Maritime Organisation or any other entity with responsibility for implementing the ISM Code, including without limitation, the "Guidelines on implementation or administering of the International Safety Management (ISM) Code by Administrations" produced by the International Maritime Organisation pursuant to Resolution A. 788(19) adopted on 25 th November, 1995;
as the same may be amended, supplemented or replaced from time to time;
"ISM Code Documentation" includes:
(a) the DOC and SMC issued by the Classification Society in all respects acceptable to the Lender in its absolute discretion pursuant to the ISM Code in relation to the Vessel within the period specified by the ISM Code;
(b) all other documents and data which are relevant to the ISM SMS and its implementation and verification which the Lender may require by request; and
11
(c) any other documents which are prepared or which are otherwise relevant to establish and maintain the Vessel's or the Borrower's compliance with the ISM Code which the Lender may require by request;
"ISM SMS" means the safety management system which is required to be developed, implemented and maintained under the ISM Code;
"ISPS Code" means the International Ship and Port Security Code of the International Maritime Organization and includes any amendments or extensions thereto and any regulation issued pursuant thereto;
"ISSC" means an International Ship Security Certificate issued in respect of the Vessel pursuant to the ISPS Code;
"Lending Office" means the office of the Lender appearing at the beginning of this Agreement or any other office of the Lender designated by the Lender as the Lending Office by notice to the Borrower;
"LIBOR" means the London interbank offered rate administered by ICE Benchmark Administration Limited (" ICE ") (or any other person which takes over the administration of that rate), for an Interest Period:
(a) the rate per annum equal to the offered quotation for deposits in Dollars for a period equal to, or as near as possible equal to, the relevant Interest Period which appears on page LIBOR 1 of the REUTERS screen at or about 11.00 a.m. (London time) on the Quotation Day for that Interest Period (and, for the purposes of this Agreement, "REUTERS LIBOR page 01" means the display designated as the "REUTERS LIBOR 01" on the Reuters Money News Service or such other page as may replace REUTERS LIBOR page 01 on that service for the purpose of displaying rates comparable to that rate or on such other service as may be nominated by ICE as the information vendor for the purpose of displaying ICE Interest Settlement Rates for Dollars); or
(b) if on such date no rate is quoted on REUTERS LIBOR page 01 or if the rate quoted on  such pages does not reflect the Lender's cost of funding, LIBOR for such period shall be the rate per annum (rounded upward if necessary to five decimal place) at which the Lender is able in accordance with its usual practices to obtain deposits in Dollars in an amount approximately equal to the amount in relation to which LIBOR is to be determined for a period equivalent to such period in the London Interbank Market at or about 11:00 a.m. (London time) on the Quotation Day for that Interest Period for a period equal to that Interest Period and for delivery on the first Banking Day of it;
Provided however that in case LIBOR is below zero, LIBOR shall be deemed to be zero.
12
"Loan" means the aggregate principal amount borrowed by the Borrower in respect of the Commitment or (as the context may require) the principal amount thereof owing to the Lender under this Agreement at any relevant time;
"Major Casualty" means any casualty to the Vessel in respect whereof the claim or the aggregate of the claims against all insurers, before adjustment for any relevant franchise or deductible, exceeds the Major Casualty Amount;
"Major Casualty Amount" means Five hundred thousand Dollars ($5 00 ,000) or the equivalent in any other currency;
"Management Agreement" means the agreement made between the Borrower and the relevant Manager providing (inter alia) for that Manager to manage the Vessel (together, the "Management Agreements" );
" Manager " means, in respect of the Vessel, V. Ships or Seanergy Shipmanagement as the technical manager of the Vessel and/or Fidelity or Seanergy Management as the commercial manager of the Vessel, or any other company nominated by the Borrower which the Lender in its sole discretion may approve from time to time as the commercial and/or (as the case may be) the technical manager of the Vessel and, in the plural, means both of them, and includes their respective successors in title;
"Manager's Undertaking" means a letter of undertaking and subordination to be executed by the Manager, as manager of the Vessel, in favour of the Lender, such Manager's   Undertaking to be and in form and substance satisfactory to the Lender as the same may from time to time be amended and/or supplemented (together, the "Manager's Undertakings" );
"Margin" means three point five zero percent (3.50%) per annum; and
"Market Value" means the market value of the Vessel as determined in accordance with Clause 8.5(b);
"Marketable Securities" means tradable debt, equity and other securities;
"Material of Environmental Concern" means and includes pollutants, contaminants, toxic substances, oil as defined in the United States Oil Pollution Act of 1990 and all hazardous substances as defined in the United States Comprehensive Environmental Response, Compensation and Liability Act 1988;
"month" means a period beginning in one calendar month and ending in the next calendar month on the day numerically corresponding to the day of the calendar month on which it started, provided that (i) if the period started on the last Banking Day in a calendar month or if there is no such numerically corresponding day, it shall end on the last Banking Day in such next calendar month and (ii) if such
13
numerically corresponding day is not a Banking Day, the period shall end on the next following Banking Day in the same calendar month but if there is no such Banking Day it shall end on the preceding Banking Day and "months" and "monthly" shall be construed accordingly;
"MOA" means the Memorandum of Agreement dated 6 th August, 2015 entered into between the Seller named therein as sellers and the Borrower, as buyers in respect of the sale by the Seller and the purchase by the Borrower of the Vessel and includes any and all addenda thereto;
"Mortgage" means, together, the first preferred Liberian ship mortgage and the deed of covenants supplemental thereto on the Vessel to be executed by the Borrower in favour of the Lender in form and substance satisfactory to the Lender as the same may from time to time be amended and/or supplemented;
"Net Income" means, in relation to each Financial Year of the Guarantor, the aggregate revenue of the Guarantor appearing in the Accounting Information for such Financial Year less the aggregate of:
(a) the amounts incurred by the Guarantor during such Financial Year as expenses of its business (including, without limitation, vessel and voyage expenses, commissions, vessel running expenses (including, but not limited to voyage, operating, repair, insurance, victualing and other related expenses), management fees, Directors fees and general and administration expenses);
(b) interest expense;
(c) taxes; and
(d) other items charged to the Guarantor's consolidated profit and loss account (including but not limited to depreciation and/or amortisation but excluding impairment charges) for the relevant Financial Year.
"Operator" means any person who is from time to time during the Security Period concerned in the operation of the Vessel and falls within the definition of " Company " set out in rule 1.1.2. of the ISM Code;
"Outstanding Indebtedness" means the aggregate of the Loan and interest accrued and accruing thereon, the Expenses and all other sums of money from time to time owing by the Borrower to the Lender, whether actually or contingently under this Agreement and the other Security Documents;
"Owner" means the Borrower;
"Party" means a party to this Agreement;
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"Permitted Encumbrance" means any Encumbrance in favour of the Lender created pursuant to the Security Documents and Permitted Liens;
"Permitted Lien" means any lien on the Vessel for master's, officers' or crew's wages outstanding in the ordinary course of trading, any lien for salvage, any ship repairer's or outfitter's possessory lien for a sum not (except with the prior written consent of the Lender which consent will not be unreasonably withheld) exceeding the Major Casualty Amount, broker's liens on policies of insurance in respect of the Vessel and encumbrances over the Vessel created by the Security Documents;
"Purchase Price" means the purchase price of the Vessel referred to in the MOA, i.e. United States Dollars Thirty four million three hundred fifty thousand one hundred and seventy three ($34,350,173);
"Quotation Day" means, in respect of any period in respect of which LIBOR falls to be determined under this Agreement, the second Banking Day before the first day of such period;
"Receiving Bank" means Citibank N.A., 399, Park Avenue, New York 10022, N.Y., U.S.A., or such other bank in New York as the Lender may notify to the Borrower;
"Regulatory Agency" means the Government Entity or other organization in the relevant Flag State which has been designated by the government of the relevant Flag State to implement and/or administer and/or enforce the provisions of the ISM Code;
"Relevant Jurisdiction" means any jurisdiction in which or where any Security Party is incorporated, resident, domiciled, has a permanent establishment, carries on, or has a place of business or is otherwise effectively connected;
"Relevant Ship" means the Vessel and any other vessel from time to time (whether before or after the date of this Agreement) owned, managed or crewed by, or chartered to, any member of the Group;
"Registry" means the offices of such registrar, commissioner or representative of the Flag State who is duly authorised to register the Vessel, the Borrower's title to the Vessel and the Mortgage over the Vessel under the laws and flag of the Flag State;
"Repayment Date" means each of the dates specified in Clause 4.1 on which the Repayment Instalments shall be payable by the Borrower to the Lender;
"Repayment Instalment" means each instalment of the Loan which becomes due for repayment by the Borrower to the Lender on a Repayment Date pursuant to Clause 4.1;
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"Requisition Compensation" means all sums of money or other compensation from time to time payable by reason of requisition of the Vessel otherwise than by requisition for hire;
" Seanergy Management " means Seanergy Management Corp., a corporation incorporated in the Marshall Islands having its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH96960, Marshall Islands;
" Seanergy Shipmanagement " means Seanergy Shipmanagement Corp., a corporation incorporated in the Marshall Islands having its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH96960, Marshall Islands;
"Security Documents" means this Agreement, the documents listed in Clause 11.1 and any and every other document as may have been or shall from time to time after the date of this Agreement be executed to guarantee and/or to secure the whole or any part of the Outstanding Indebtedness and/or any and all other obligations of the Borrower to the Lender pursuant to this Agreement (whether or not any such document also secures moneys from time to time owing pursuant to any other document or agreement);
"Security Party" means the Borrower, the Guarantor and any other person (other than the Lender, Fidelity and V. Ships) which is or may become a party to any of the Security Documents;
"Security Period" means the period commencing on the date hereof and terminating on the date upon which the Loan together with all interest thereon and all other moneys payable to the Lender under this Agreement and the other Security Documents has been repaid in full to the Lender;
"Security Requirement" means, as from the 1 st January, 2018, the amount in Dollars (as certified by the Lender whose certificate shall, in the absence of manifest error, be conclusively binding on the Borrower) which is at any relevant time one hundred and twenty five percent (125%) of the Loan;
"Security Value" means the amount in Dollars (as certified by the Lender whose certificate shall, in the absence of manifest error, be conclusive and binding on the Borrower) which, as from the 1 st day of January, 2018 and thereafter at any relevant time is the aggregate of (i) the Market Value of the Vessel as most recently determined in accordance with Clause 8.5(b) and (ii) the market value of any additional security provided under Clause 8.5(a) and accepted by the Lender (if any);
"Seller" means the person specified as "Sellers" in the MOA;
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"SMC" means a safety management certificate issued in respect of the Vessel in accordance with rule 13 of the ISM Code;
"Subsidiary" of a person means any company or entity directly or indirectly controlled by such person ;
"Taxes" includes all present and future taxes, levies, imposts, duties, fees or charges of whatever nature together with interest thereon and penalties in respect thereof (except taxes concerning the Lender and imposed on the net income of the Lender) and "Taxation" shall be construed accordingly;
" Total Loss" means:
(a) actual, constructive, compromised or arranged total loss of the Vessel; or
(b) the Compulsory Acquisition of the Vessel; or
(c) the condemnation, capture, seizure, confiscation, arrest or detention of the Vessel (other than where the same amounts to the Compulsory Acquisition of the Vessel) by any Government Entity, or by persons acting on behalf of any Government Entity or otherwise, unless the Vessel be released and restored to  from such condemnation, capture, seizure, confiscation arrest or detention or within sixty (60) days after the occurrence thereof; and
(d) the hijacking, capture, seizure or confiscation of the Vessel arising as a result of a piracy or related incident unless the Vessel be released and restored to  from such hijacking, capture, seizure or confiscation within one hundred eighty (180) days after the occurrence thereof;   and
"V. Ships" means V. Ships Limited, a company lawfully incorporated and validly existing under the laws of Cyprus or any other person appointed by the Borrower with the consent of the Lender, as the technical and/or the commercial manager of the Vessel, and includes its successors in title;
"Vessel" means the capesize bulk carrier motor vessel "ETERNUS"   of approximately 88,479 gt and 56,828 nt, built in 2010 and having IMO No. 9391646, currently registered in the ownership of the Seller under the Isle of Man flag, to be purchased by the Borrower pursuant to the MOA and which upon Delivery shall be registered under the laws and flag of the Flag State in the ownership of the Borrower with the new name "SQUIRESHIP" , and propelled by one oil internal combustion engine of 16,860 KW , together with all her boats, engines, machinery tackle outfit spare gear fuel consumable and other stores belongings and appurtenances whether on board or ashore and whether now owned or hereafter acquired and all the additions, improvements and replacements in or on the above described vessel;
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"US Tax Obligor" means a "US Person who is a withholding agent within the meaning of FATCA.
1.3 Interpretation.  In this Agreement:
(a) " asset " includes every kind of property, asset, interest or right, including any present, future or contingent right to any revenues or other payment;
(b) " company " includes any partnership, joint venture and unincorporated association;
(c) " consent " includes an authorisation, consent, approval, resolution, licence, exemption, filing, registration, notarisation and legalisation;
(d) "control" means either ownership of more than fifty percent (50%) of the voting share capital (or equivalent rights of ownership) of such company or entity or the power to direct its policies and management, whether by contract or otherwise and "controlled" shall be construed accordingly;
(e) " contingent liability " means a liability which is not certain to arise and/or the amount of which remains unascertained;
(f) " document " includes a deed; also a letter or fax;
(g) " legal or administrative action " means any legal proceeding or arbitration and any administrative or regulatory action or investigation;
(h) " liability " includes every kind of debt or liability (present or future, certain or contingent), whether incurred as principal or surety or otherwise;
(i) " law " includes any order or decree, any form of delegated legislation, any treaty or international convention and any regulation or resolution of the Council of the European Union, the European Commission, the United Nations or its Security Council;
(j) " policy ", in relation to any insurance, includes a slip, cover note, certificate of entry or other document evidencing the contract of insurance or its terms;
(k) " protection and indemnity risks " means the usual risks covered by a protection and indemnity association which is a member of the international group of protection and indemnity associations (" IG "), including pollution risks and the proportion (if any) of any sums payable to any other person or persons in case of collision which are not recoverable under the hull and machinery policies by reason of the incorporation in them of clause 8 of the Institute Time Clauses (Hulls)(1/11/1995) or the Institute Amended Running Down Clause (1/10/71) or any equivalent provision;
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(l) " successor in title " includes any person who is entitled (by assignment, novation, merger or otherwise) to any other person's rights under this Agreement or any other Security Document (or any interest in those rights) or who, as administrator, liquidator or otherwise, is entitled to exercise those rights; and in particular references to a successor in title include a person to whom those rights (or any interest in those rights) are transferred or pass as a result of a merger, division, reconstruction or other reorganisation of it or any other person;
(m) " War risks " includes the risk of mines, blocking and trapping, missing vessel, confiscation, war P&I and all risks excluded by clause 24 of the Institute Time Clauses (Hulls) (1/11/95).
(n) reference to:
(i) any "enactment" shall be deemed to include references to such enactment as re-enacted, amended or extended;
(ii) a " person "  shall be construed as including reference to an individual, firm, company, corporation, unincorporated body of persons or any State, political sub-division of a state and local or municipal authority, any agency of such State and any international organisation and any person includes such person's assignees and successors in title;
(iii) a " regulation " includes any present or future regulation, rule, directive, requirement, request or guideline (whether or not having the force of law) of any governmental, intergovernmental or national or supranational body, agency, department, central bank or government department or any regulatory, self regulatory or other authority or organisation and, for the avoidance of doubt, shall include any Basel II  Regulation and Basel III Regulation;
(iv) a " guarantee " include references to an indemnity or other assurance against financial loss including, without limitation, an obligation to purchase assets or services as a consequence of a default by any other person to pay any Indebtedness and " guaranteed " shall be construed accordingly;
(v) this Agreement (or to any specified provisions thereof) and all documents referred to in this Agreement (or to any specified provisions thereof) shall be construed as references to this Agreement, that provision or that document as are in force for the time being and as are amended and/or supplemented from time to time;
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(vi) this Agreement includes all the terms of this Agreement and any schedules, annexes or appendices to this Agreement, which form an integral part of same;
(vii) clauses, sub-clauses and schedules are to Clauses, Sub-Clauses and schedules in this Agreement;
(viii) the opinion of the Lender or a determination or acceptance by the Lender or to documents, acts, or persons acceptable or satisfactory to the Lender or the like shall be construed as reference to opinion, determination, acceptance or satisfaction of the Lender at the sole discretion of the Lender and such opinion, determination, acceptance or satisfaction of the Lender shall be conclusive and binding on the Borrowers; and
(o) Clause headings and the table of contents are inserted for convenience of reference only and shall be ignored in the interpretation of this Agreement;
(p) subject to any specific provision of this Agreement or of any assignment and/or participation or syndication agreement of any nature whatsoever, reference to each of the parties hereto and to the other Security Documents shall be deemed to be reference to and/or to include, as appropriate, their respective successors and permitted assigns;
(q) where the context so admits, words in the singular include the plural and vice versa; and
(r) the words "including" and "in particular" shall not be construed as limiting the generality of any foregoing words.
2. THE LOAN
2.1 Commitment to Lend. The Lender, relying upon (inter alia) each of the representations and warranties set forth in Clause 6 and in each of the other Security Documents, agrees to lend to the Borrower in one (1) Advance and upon and subject to the terms of this Agreement, the amount specified in Clause 1.1.
2.2 Drawdown Notice and Commitment to Borrow.  Subject to the terms and conditions of this Agreement, the Commitment shall be advanced to the Borrower following receipt by the Lender from the Borrower of a Drawdown Notice not later than 10:00 a.m. (London time) on the second Banking Day before the date on which the drawdown is intended to be made. A Drawdown Notice shall be effective on actual receipt thereof by the Lender and, once given, shall, subject as provided in Clause 3.6, be irrevocable.
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2.3 Number of Advances Agreed.  The Commitment shall be advanced to the Borrower in one (1) Advance.
2.4 Disbursement.  Upon receipt of the Drawdown Notice complying with the terms of this Agreement the Lender shall, subject to the provisions of Clause 7, on the date specified in the Drawdown Notice, make the Commitment available to the Borrower.
2.5 Application of Proceeds.  Without prejudice to the Borrower's obligations under Clause 8.1(c), the Lender shall have no responsibility for the application of the proceeds of the Loan (or any part thereof) by the Borrower.
2.6 Termination Date of the Commitment.  Any part of the Commitment undrawn and uncancelled at the end of the Availability Period shall thereupon be automatically cancelled.
2.7 Evidence.   It is hereby expressly agreed and admitted by the Borrower that abstracts or photocopies of the books of the Lender as well as statements of accounts or a certificate signed by an authorised officer of the Lender shall be conclusive binding and full evidence, save for manifest error, on the Borrower as to the existence and/or the amount of the at any time Outstanding Indebtedness, of any amount due under this Agreement, of the applicable interest rate or Default Rate or any other rate provided for or referred to in this Agreement, the Interest Period, the value of additional securities under Clause 8.5(a), the payment or non payment of any amount.  Nevertheless, enforcement procedures or any other court or out-of-court procedure can be commenced by the Lender on the basis of the above mentioned means of evidence including written statements or certificates of the Lender.
2.8 Cancellation.  The Borrower may, cancel any undrawn part of the Commitment under this Agreement upon giving the Lender not less than five (5) Banking Days' notice in writing to that effect, provided, that no Drawdown Notice has been given to the Lender under Clause 2.2 for the full amount of the Commitment or in respect of the portion thereof in respect of which cancellation is required by the Borrower.  Any such notice of cancellation, once given, shall be irrevocable.  Any amount cancelled may not be drawn.  Notwithstanding any such cancellation pursuant to this Clause 2.8 the Borrower shall continue to be liable for any and all amounts due to the Lender under this Agreement including without limitation any amounts due to the Lender under Clause 10.
2.9 No security or lien from other person.   The Borrower has not taken or received, and the Borrower undertakes that until all moneys, obligations and liabilities due, owing or incurred by the Borrower under this Agreement and the Security Documents have been paid in full, it will not take or receive, any security or lien from any other person liable or for any liability whatsoever.
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3. INTEREST
3.1 Normal Interest Rate . The Borrower shall pay interest on the Loan (or as the case may be, each portion thereof to which a different Interest Period relates) in respect of each Interest Period (or part thereof) on each Interest Payment Date. The interest rate for the calculation of interest shall be the rate per annum determined by the Lender to be the aggregate of (i) the Margin and (ii) LIBOR for such Interest Period, unless there is an Alternative Rate in which case the interest rate for the calculation of interest shall be the rate per annum determined by the Lender to be the aggregate of (i) the Margin and (ii) the Alternative Rate.
3.2 Selection of Interest Period.  The Borrower may by notice received by the Lender not later than 10:00 a.m. (London time) on the third Banking Day before the beginning of each Interest Period specify (subject to Clause 3.3 below) whether such Interest Period shall have a duration of one (1) or two (2) or three (3) or six (6) months (or such other period as may be requested by the Borrower and as the Lender, in its sole discretion, may agree to).
3.3 Determination of Interest Periods. Every Interest Period shall, subject to market availability to be conclusively determined by the Lender, be of the duration specified by the Borrower pursuant to Clause 3.2 but so that:
(a) the initial Interest Period in respect of the Loan will commence on the Drawdown Date and each subsequent Interest Period will commence forthwith upon the expiry of the previous Interest Period;
(b) if any Interest Period would otherwise overrun one or more Repayment Dates, then, in the case of the last Repayment Date, such Interest Period shall end on such Repayment Date, and in the case of any other Repayment Date or Dates the Loan shall be divided into parts so that there is one part equal to the amount of the Repayment Instalment due on each Repayment Date falling during that Interest Period and having an Interest Period ending on the relevant Repayment Date and another part equal to the amount of the balance of the Loan having an Interest Period determined in accordance with Clause 3.2 and the other provisions of this Clause 3.3 and the expression " Interest Period in respect of the Loan " when used in this Agreement refers to the Interest Period in respect of the balance of the Loan; and
(c) if the Borrower fails to specify the duration of an Interest Period in accordance with the provisions of Clause 3.2 and this Clause 3.3, such Interest Period shall have a duration of three (3) months unless another period shall be agreed between the Lender and the Borrower provided, always, that such period (whether of three months or different duration) shall comply with this Clause 3.3.
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3.4 Default Interest.   If the Borrower fails to pay any sum (including, without limitation, any sum payable pursuant to this Clause 3.4) on its due date for payment under any of the Security Documents, the Borrower shall pay interest on such sum from the due date up to the date of actual payment (as well after as before judgement) at the rate determined by the Lender pursuant to this Clause 3.4.  The period beginning on such due date and ending on such date of payment shall be divided into successive periods of not more than three (3) months as selected by the Lender each of which (other than the first, which shall commence on such due date) shall commence on the last day of the preceding such period. The rate of interest applicable to each such period shall be the aggregate (as determined by the Lender) of (i) two per cent (2%), per annum, (ii) the Margin and (iii) LIBOR.  Such interest shall be due and payable on the last day of each such period as determined by the Lender and each such day shall, for the purposes of this Agreement, be treated as an Interest Payment Date, provided that if such unpaid sum is of principal which became due and payable by reason of a declaration by the Lender under Clause 9.2 or a prepayment pursuant to Clauses 4.2, 4.3, 8.5(a) 12.1 and 12.2 on a date other than an Interest Payment Date relating thereto, the first such period selected by the Lender shall be of a duration equal to the period between the due date of such principal sum and such Interest Payment Date and interest shall be payable on such principal sum during such period at a rate two per cent (2%) above the rate applicable thereto immediately before it fell due. If for the reasons specified in Clause 3.6, the Lender is unable to determine a rate in accordance with the foregoing provisions of this Clause 3.4, interest on any sum not paid on its due date for payment shall be calculated at a rate determined by the Lender to be two per cent (2%) per annum above the aggregate of (i) the Margin and (ii) the Alternative Rate. Interest payable by the Borrower as aforesaid shall be compounded quarterly (or if the period fixed by the Lender is longer, at the end of such longer period) and shall be payable on demand.
3.5 Notification of Interest and interest rate.  The Lender shall notify the Borrower promptly of the duration of each Interest Period and of each rate of interest determined by it under this Clause 3 without prejudice to the right of the Lender to make determinations at its sole discretion. However, omission of the Lender to make such notification (without the application of the Borrower) will not constitute and will not be interpreted as if to constitute a breach of obligation of the Lender except in case of wilful misconduct.
3.6 Market disruption – Non Availability
(a) Market Disruption Event : If and whenever, at any time prior to the commencement of any Interest Period, the Lender (in its discretion) shall have determined (which determination shall be conclusive in the absence of manifest error) that a Market Disruption Event has occurred in relation to the Loan for any such Interest Period, then the Lender shall forthwith give notice thereof (a "Determination Notice" ) to the Borrower and the rate of interest
 
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on the Loan (or the relevant part thereof) for that Interest Period shall be the percentage rate per annum which is the sum of:
(i) the Margin; and
(ii) the rate which expresses as a percentage rate per annum the cost to the Lender of funding the Loan (or the relevant part thereof) from whatever source it may select;
and the Lender will advise the Borrower the source it may select to fund the Loan (or the relevant part thereof) and, on a best effort basis, the calculation of the rate under this Clause 3.6(a)(ii).
(b) Meaning of "Market Disruption Event" : In this Agreement "Market Disruption Event" means:
(i) at or about noon on the Quotation Day for the relevant Interest Period LIBOR is not available; and/or
(ii) before close of business in London on the Quotation Day for the relevant Interest Period, the Lender determines (in its sole discretion) that the cost to it of obtaining matching deposits in the London Interbank Market to fund the Loan (or the relevant part thereof) for such Interest Period would be in excess of the LIBOR for such Interest Period; and
(iii) before close of business in London on the Quotation Day for the relevant Interest Period, deposits in Dollars are not available to the Lender in the London Interbank Market in the ordinary course of business in sufficient amounts to fund the Loan (or the relevant part thereof) for such Interest Period.
(c) Alternative basis of interest or funding :
(i) If a Market Disruption Event occurs and the Lender or the Borrower so requires, the Lender and the Borrower shall enter into negotiations (for a period of not more than five (5) days (the " Negotiation Period ")) after the giving of the relevant Determination Notice with a view to agreeing a substitute basis for determining the rate of interest.
(ii) Any alternative basis agreed pursuant to paragraph (i) above shall be binding on the Lender and all Security Parties.
(d) Alternative basis of interest in absence of agreement : If the Lender and the Borrower will not enter into negotiations as provided in Clause 3.6(c)(i) or if an alternative interest rate or alternative basis is not agreed within the
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Negotiation Period, and the relevant circumstances are continuing at the end of the Negotiation Period, then the Lender shall set the following Interest Period and an interest rate representing the cost of funding of the Lender in Dollars of the Loan (or the relevant part thereof) plus the Margin for such Interest Period; if the relevant circumstances are continuing at the end of the Interest Period so set by the Lender, the Lender shall continue to set the following Interest Period and an interest rate representing its cost of funding in Dollars of the Loan (or the relevant part thereof) plus the Margin for such Interest Period.
(e) Notice of prepayment : If the Borrower does not agree with an interest rate set by the Lender under Clause 3.6(d), the Borrower may give the Lender not less than 5 Banking Days' notice of its intention to prepay the Loan at the end of the interest period set by the Lender.
(f) Prepayment; termination of Commitment : A notice under Clause 3.6(e) shall be irrevocable; and on the last Banking Day of the interest period set by the Lender, the Borrower shall prepay (without premium or penalty) the Loan, together with accrued interest thereon at the applicable rate plus the Margin and the balance of the Outstanding Indebtedness.
(g) Application of prepayment :  The provisions of Clause 4 shall apply in relation to the prepayment made hereunder.
3.7 Interest Derivatives Transactions.  The Borrower, in order to manage interest rate risks, may, subject to the consent of the Lender (which the Lender shall be in full liberty to withhold) request the Lender (in writing) to enter with the Borrower into interest derivatives transactions. Any such transaction shall be subject to the Borrower accepting the Lender's standard ISDA Master Agreement.
4. REPAYMENT - PREPAYMENT
4.1 Repayment.  The Borrower shall and it is expressly undertaken by the Borrower to repay the Loan by (a) sixteen (16) consecutive quarterly Repayment Instalments (the "Repayment Instalments" ) to be repaid on each of the Repayment Dates so that the first be repaid on the date falling twenty seven (27) months after the Drawdown Date and each of the subsequent ones consecutively falling due for payment on each of the dates falling three (3) months after the immediately preceding Repayment Date with the last (the 16 th ) of such Repayment Instalments falling due for payment on the Final Maturity Date and (b) the Balloon Instalment , payable on the Final Maturity Date; subject to the provisions of this Agreement the amount of each Repayment Instalment shall be in the amount of Dollars Eight hundred fourty three thousand seven hundred sixty and seventy five cents ($843,760.75).
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provided, that (a) if the last Repayment Date would otherwise fall after the Final Maturity Date, the last Repayment Date shall be the Final Maturity Date, (b) in the event that the Commitment is not drawn down in full by the last day of the Availability Period, the amount of each of the Repayment Instalments shall be proportionally reduced, (c) there shall be no Repayment Dates after the Final Maturity Date, (d) on the Final Maturity Date the Borrower shall also pay to the Lender any and all other moneys then due and payable under this Agreement and the other Security Documents and (e) if any of the Repayment Instalments shall become due on a day which is not a Banking Day, the due date therefor shall be extended to the next succeeding Banking Day unless such Banking Day falls in the next calendar month in which event such due date shall be the immediately preceding Banking Day.
4.2 Voluntary Prepayment.   The Borrower shall have the right, upon giving the Lender not less than five (5) Banking Days' notice in writing, to prepay, without penalty or prepayment fee, part or all of the Loan, in each case together with all unpaid interest accrued thereon and all other sums of money whatsoever due and owing from the Borrower to the Lender hereunder or pursuant to the other Security Documents and all interest accrued thereon, provided, that :
(a) the giving of such notice by the Borrower will irrevocably commit the Borrower to prepay such amount as stated in such notice;
(b) if the Borrower shall request consent to make such prepayment on a day other than the last day of an Interest Period the Borrower will pay, in addition to the amount to be prepaid, any such sum as may be payable to the Lender pursuant to Clause 10.1;
(c) each such prepayment shall be in an amount of a Repayment Instalment or a whole multiple thereof or the balance of the Loan and will be applied by the Lender in or towards prepayment of the remaining Repayment Instalments in direct chronological order of maturity or in inverse chronological order of maturity, at the Borrower's option;
(d) every notice of prepayment shall be effective only on actual receipt (including by fax) by the Lender, shall be irrevocable and shall oblige the Borrower to make such prepayment on the date specified;
(e) no amount prepaid may be re-borrowed; and
(f) the Borrower may not prepay the Loan or any part thereof, save as expressly provided in this Agreement or as otherwise agreed by the Lender.
4.3 Compulsory Prepayment in case of Total Loss or sale of the Vessel.   Total Loss : On the Vessel becoming a Total Loss or suffering damage or being involved in an
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incident which may, in the reasonable opinion of the Lender, result in the Vessel being subsequently determined to be a Total Loss :
(i) prior to the advancing of the Commitment, the obligation of the Lender to advance the Commitment shall immediately cease and the Commitment shall be reduced to zero; or
(ii) in case the Commitment has been already advanced, the Borrower shall prepay the Outstanding Indebtedness the latest on the date falling one hundred and eighty (180) days after the occurrence of such Total Loss or the date on which the relevant Vessel suffered damage or the incident which, in the reasonable opinion of the Lender, may result in the Vessel being subsequently determined to be a Total Loss occurred or, if earlier, on the date upon which the insurance proceeds in respect of such Total Loss are or Requisition Compensation is received by the Borrower (or the Lender pursuant to the Security Documents).
For the purpose of this Agreement:
(aa) in the case of an actual total loss of the Vessel, at the actual date and time the Vessel was lost but in the event of the date of the loss being unknown then the actual total loss shall be deemed to have occurred on the date falling fifteen (15) days after the date on which the Vessel was last reported;
(bb) in the case of a constructive total loss of the Vessel, at the date and time notice of abandonment (the " NOA date ") of the Vessel is given to the insurers of the Vessel for the time being (provided a claim for such Total Loss is admitted by such insurers) or, if such insurers do not admit such a claim on the earlier of (aa) the date when either the total loss is subsequently admitted by the insurers, or (bb) a total loss is subsequently adjudged by a competent court of law or arbitration tribunal to have occurred and (bb) the date falling one hundred and eighty days ( 180) days after the NOA date, or, in the event that such notice of abandonment is not given by the Owner thereof to the insurers of the Vessel, at the date and time on which occurred the incident which may result, in the reasonable opinion of the Lender, in the Vessel being subsequently determined to be a Total Loss;
(cc) in the case of a compromised or arranged total loss of  the Vessel, on the date upon which a binding agreement as to such compromised or arranged total loss has been entered into by the then insurers of the Vessel;
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(dd) in the case of Compulsory Acquisition of the Vessel, on the date upon which the relevant requisition of title or other compulsory acquisition occurs excluding a requisition for hire;
(ee) the case of, condemnation, capture, seizure, confiscation, arrest, or detention of the Vessel (other than where the same amounts to Compulsory Acquisition of the Vessel) by any Government Entity, or by persons acting on behalf of any Government Entity or otherwise, which deprives the Owner thereof of the use of the Vessel for more than sixty (60) days, upon the expiry of the period of sixty (60) days after the date upon which the relevant, condemnation, capture, seizure or confiscation, arrest or detention; and
(ff) the case of hijacking, capture, seizure or confiscation of the Vessel arising as a result of a piracy or related incident unless the Vessel be released and restored to the Owner from such hijacking, capture, seizure or confiscation within one hundred eighty (180) days after the occurrence thereof.
(a) Sale of the Vessel :  In the event of a sale or other disposal of the Vessel, or in case of refinancing by another bank or if the Borrower requests the Lender's consent for the discharge of the Mortgage on the Vessel, the Borrower shall prepay the Outstanding Indebtedness.
4.4 Amounts payable on prepayment.  Any prepayment of all or part of the Loan under this Agreement shall be made together with (a) accrued interest on the amount to be prepaid to the date of such prepayment (calculated, in the case of a prepayment pursuant to Clause 3.6 at a rate equal to the aggregate of the Margin and the cost to the Lender of funding the Loan), (b) any additional amount payable under Clause 5.3 and (c) all other sums payable by the Borrower to the Lender under this Agreement or any of the other Security Documents including, without limitation, any amounts payable under Clause 10.
5. PAYMENTS, TAXES, LOAN ACCOUNT AND COMPUTATION
5.1 Payments – No set-off or counterclaims
(a) The Borrower acknowledges that in performing its obligations under this Agreement, the Lender will be incurring liabilities to third parties in relation to the funding of amounts to the Borrower, such liabilities matching the liabilities of the Borrower to the Lender and that it is reasonable for the Lender to be entitled to receive payments from the Borrower gross on the due date in order that the Lender is put in a position to perform its matching obligations to the relevant third parties. Accordingly, all payments to be made by the Borrower under this Agreement and/or any of the other Security
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Documents shall be made in full, without any set-off or counterclaim whatsoever and, subject as provided in Clause 5.3, free and clear of any deductions or withholdings or Governmental Withholdings whatsoever, as follows:
(i) in Dollars, not later than 10:00 a.m. (London time) on the Banking Day (in Piraeus, Athens, London and New York City) on which the relevant payment is due under the terms of this Agreement; and
(ii) to the Receiving Bank for the account of the Lender, reference: " Squire Ocean Navigation Co. - Loan Agreement dated: 4 th November, 2015 ", provided, however, that the Lender shall have the right to change the place of account for payment, upon three (3) Banking Days' prior written notice to the Borrower.
(b) If at any time it shall become unlawful or impracticable for the Borrower to make payment under this Agreement to the relevant account or bank referred to in Clause 5.1(a), the Borrower may request and the Lender may agree to alternative arrangements for the payment of the amounts due by the Borrower to the Lender under this Agreement or the other Security Documents.
5.2 Payments on Banking Days.   All payments due shall be made on a Banking Day.  If the due date for payment falls on a day which is not a Banking Day, that payment due shall be made on the next following Banking Day unless such Banking Day falls in the next calendar month in which case payment shall be made on the immediately preceding Banking Day.
5.3 Gross Up.  If at any time any law, regulation, regulatory requirement or requirement of any governmental authority, monetary agency, central bank or the like compels the Borrower to make payment subject to Governmental Withholdings, or any other deduction or withholding, the Borrower shall pay to the Lender such additional amounts as may be necessary to ensure that there will be received by the Lender a net amount equal to the full amount which would have been received had payment not been made subject to such Governmental Withholdings or other deduction or withholding.  The Borrower shall indemnify the Lender against any losses or costs incurred by the Lender by reason of any failure of the Borrower to make any such deduction or withholding or by reason of any increased payment not being made on the due date for such payment.  The Borrower shall, not later than thirty (30) days after each deduction, withholding or payment of any Governmental Withholdings, forward to the Lender official receipts and any other documentary receipts and any other documentary evidence reasonably required by the Lender in respect of the payment made or to be made of any deduction or withholding or Governmental Withholding.  The obligations of the Borrower under this provision shall, subject to
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applicable law, remain in force notwithstanding the repayment of the Loan and the payment of all interest due thereon pursuant to the provisions of this Agreement.
5.4 Tax Credits
If the Lender receives for its own account a repayment or credit in respect of tax on account of which a Borrower has made an increased payment under Clause 5.3 the Lender shall pay to that Borrower a sum equal to the proportion of the repayment or credit which the Lender allocates to the amount due from that Borrower in respect of which the Borrower made the increased payment, provided that:
(a) the Lender shall not be obliged to allocate to this transaction any part of a tax repayment or credit which is referable to a class or number of transactions;
(b) nothing in this Clause 5.4 shall oblige the Lender to arrange its tax affairs in any particular manner, to claim any type of relief, credit, allowance or deduction instead of, or in priority to, another or to make any such claim within any particular time;
(c) nothing in this Clause 5.4 shall oblige the Lender to make a payment which would leave it in a worse position than it would have been in if the Borrower had not been required to make a tax deduction from a payment; and
(d) any allocation or determination reasonably made by the Lender under or in connection with this Clause 5.4 shall be conclusive and binding on the Borrower.
5.5 Loan Account. All sums advanced by the Lender to the Borrower under this Agreement and all interest accrued thereon and all other amounts due under this Agreement from time to time and all repayments and/or payments thereof shall be debited and credited respectively to a separate loan account maintained by the Lender in accordance with its usual practices in the name of the Borrower.  The Lender may, however, in accordance with its usual practices or for its accounting needs, maintain more than one account, consolidate or separate them but all such accounts shall be considered parts of one single loan account maintained under this Agreement.  In case that a ship mortgage in the form of Account Current is granted as security under this Agreement, the account(s) referred to in this Clause shall be the Account Current referred to in such mortgage.
5.6 Computation.   All interest and other payments payable by reference to a rate per annum under this Agreement shall accrue from day to day and be calculated on the basis of actual days elapsed and a 360 day year.
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6. REPRESENTATIONS AND WARRANTIES
6.1 Continuing representations and warranties.   The Borrower hereby represents and warrants to the Lender that:
(a) Due Incorporation/Valid Existence : each of the Borrower and the other corporate Security Parties is duly incorporated and validly existing and in good standing under the laws of their respective countries of incorporation, and have power to own their respective property and assets, to carry on their respective business as the same are now being lawfully conducted and to purchase, own, finance and operate vessels, or, as the case may be, manage vessels, as well as to undertake the obligations which they have undertaken or shall undertake pursuant to the Security Documents;
(b) Due Corporate Authority :  each of the Borrower and the other corporate Security Parties has power to execute, deliver and perform its obligations under the Security Documents to which it is a party and to borrow the Commitment and each of the corporate Security Parties has power to execute and deliver and perform its obligations under the Security Documents to which it is or is to be a party; all necessary corporate, shareholder and other action has been taken to authorise the execution, delivery and performance of the same and no limitation on the powers of the Borrower to borrow will be exceeded as a result of borrowing the Loan;
(c) Litigation :  no litigation or arbitration, tax claim or administrative proceeding relating to sums exceeding Five hundred thousand Dollars ($500,000) involving a potential liability of the Borrower or any other Security Party is current or pending or (to its or its officers' knowledge) threatened against the Borrower or any other Security Party, which, if adversely determined, would have a materially adverse effect on the business, position, profitability, assets or the financial condition of any of them;
(d) No conflict with other obligations :  the execution and delivery of, the performance of its obligations under, and compliance with the provisions of, the Security Documents by the relevant Security Parties will not (i) contravene any existing applicable law, statute, rule or regulation or any judgment, decree or permit to which the Borrower or any other Security Party is subject, (ii) conflict with, or result in any breach of any of the terms of, or constitute a default under, any agreement or other instrument to which the Borrower or any other Security Party is a party or is subject to or by which it or any of its property is bound, (iii) contravene or conflict with any provision of the memorandum and articles of association/articles of incorporation/by-laws/statutes or other constitutional documents of the Borrower or any other Security Party or (iv) result in the creation or imposition of or oblige the
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Borrower or any other Security Party to create any Encumbrance (other than a Permitted Encumbrance) on any of the undertakings, assets, rights or revenues of the Borrower or any other Security Party (other than the Manager);
(e) Financial Condition : to the knowledge of the officers/directors or shareholders of the Borrower the financial condition of the Borrower and of the other Security Parties has not suffered any material deterioration since that condition was last disclosed to the Lender;
(f) No Immunity :  neither the Borrower nor any other Security Party nor any of their respective assets are entitled to immunity on the grounds of sovereignty or otherwise from any legal action or proceeding (which shall include, without limitation, suit, attachment prior to judgement, execution or other enforcement);
(g) Shipping Company :  each of the Borrower and the Managers is a shipping company involved in the owning or, as the case may be, managing of ships engaged in international voyages and earning profits in free foreign currency;
(h) Licences/Authorisation :   every consent, authorisation, license or approval of, or registration with or declaration to, governmental or public bodies or authorities or courts required by any Security Party to authorise, or required by any Security Party in connection with, the execution, delivery, validity, enforceability or admissibility in evidence of each of the Security Documents or the performance by each Security Party of its obligations under the Security Documents to which such Security Party is or is to be a party has been obtained or made and is in full force and effect and there has been no default in the observance of any of the conditions or restrictions (if any) imposed in, or in connection with, any of the same so far as the Borrower is aware;
(i) Perfected Securities : when duly executed, the Security Documents will create a perfected security interest in favour of the Lender, with the intended priority, over the assets and revenues intended to be covered, valid and enforceable against the Borrower and the other Security Parties;
(j) No Notarisation/Filing/Recording :  save for the registration of any mortgage in the Registry, it is not necessary to ensure the legality, validity, enforceability or admissibility in evidence of this Agreement or any of the other Security Documents that it or they or any other instrument be notarised, filed, recorded, registered or enrolled in any court, public office or elsewhere or that any stamp, registration or similar tax or charge be paid on or in relation to this Agreement or the other Security Documents;
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(k) Validity and Binding effect :   the Security Documents constitute (or upon their execution - and in the case of any mortgage upon its registration at the Registry - will constitute) valid and legally binding obligations of the relevant Security Parties enforceable against the Borrower and the other Security Parties in accordance with their respective terms and that there are no other agreements or arrangements which may adversely affect or conflict with the Security Documents or the security thereby created; and
(l) Valid Choice of Law :  the choice of law agreed to govern this Agreement and/or any other Security Document and the submission to the jurisdiction of the courts agreed in each of the Security Documents are or will be, on execution of the respective Security Documents, valid and binding on the Borrower and any other Security Party which is or is to be a party thereto; and
(m) Shareholdings
(i) the control of the Guarantor and the voting rights attaching to at least 51% of the shares issued and outstanding in the share capital of the Guarantor are and at least 51% of the shares issued and outstanding in the share capital of the Guarantor and the voting rights attaching to such shares shall, throughout the Security Period, be ultimately beneficially held directly or indirectly by the person(s) disclosed to the Lender at the negotiation of this Agreement; and
(ii) no change has been made directly or indirectly in the ownership, beneficial ownership, control or management of the Borrower or any share therein or of the Vessel (especially concerning class or flag);
(iii) no change has been made directly or indirectly in the ultimate beneficial ownership of any of the shares in the Guarantor or in the ultimate control of the voting rights attaching to any of those shares from that existing on the date of this Agreement which results in the person(s) disclosed by the Borrower to the Lender in the negotiation of this Agreement not having at least 51% of the shares issued and outstanding in the share capital in the Guarantor and the voting rights attaching to such shares;
6.2 Initial representations and warranties.   The Borrower hereby further represents and warrants to the Lender that:
(a) Direct obligations - Pari Passu :  the obligations of the Borrower under this Agreement are direct, general and unconditional obligations of the Borrower and rank at least pari passu with all other present and future unsecured and
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unsubordinated Indebtedness of the Borrower with the exception of any obligations which are mandatorily preferred by law;
(b) Information :  all information, accounts, statements of financial position, exhibits and reports furnished by or on behalf of any Security Party to the Lender in connection with the negotiation and preparation of this Agreement and each of the other Security Documents are true and accurate in all material respects and not misleading, do not omit material facts and all reasonable enquiries have been made to verify the facts and statements contained therein; to the best knowledge of the Directors/Officers or shareholders of the Borrower, there are no other facts the omission of which would make any fact or statement therein misleading and, in the case of accounts and statements of financial position, they have been prepared in accordance with generally accepted accounting principles which have been consistently applied;
(c) No Continuing Event of Default :  no Continuing Event of Default has occurred;
(d) No Taxes :   no Taxes are imposed by deduction, withholding or otherwise on any payment to be made by the Borrower under this Agreement and/or any other of the Security Documents or are imposed on or by virtue of the execution or delivery of this Agreement and/or any other of the Security Documents or any document or instrument to be executed or delivered hereunder or thereunder.  In case that any Tax exists now or will be imposed in the future, it will be borne by the Borrower;
(e) No Continuing Event of Default under other Indebtedness : no Continuing Event of Default has occurred and is continuing with respect to the Borrower or the Guarantor under any agreement relating to Indebtedness to which it is a party or by which it may be bound;
(f) Ownership/Flag/Seaworthiness/Class/Insurance of the Vessel :  the Vessel is and on the Drawdown Date will be:
(i) in the absolute and free from Encumbrances (other than in favour of the Lender) ownership of the Borrower who is and will on and after the Drawdown Date be the sole legal and beneficial owner of the Vessel;
(ii) registered in the name of the Borrower through the Registry under the laws and flag of the Flag State;
(iii) operationally seaworthy and in every way fit for service;
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(iv) classed with the Classification Society which is a member of IACS and which has been approved by the Lender in writing and such class will be free of any overdue requirements and recommendations of the Classification Society affecting class;
(v) insured in accordance with the provisions of this Agreement and the Mortgage;
(vi) managed by the relevant Manager(s); and
(vii) in full compliance with the ISM and the ISPS Code;
(g) No Charter :  unless otherwise permitted in writing by the Lender (such permission not to be unreasonably withheld), the Vessel will not on or before the Drawdown Date be subject to any charter or contract nor to any agreement to enter into any charter or contract which, if entered into after the Drawdown Date would have required the consent of the Lender under any of the Security Documents and there will not on or before the Drawdown Date be any agreement or arrangement whereby the Earnings of the Vessel may be shared with any other person;
(h) No Encumbrances : neither the Vessel, nor its Earnings, Requisition Compensation or Insurances nor any other properties or rights which are, or are to be, the subject of any of the Security Documents nor any part thereof will, on the Drawdown Date, be subject to any Encumbrances other than Permitted Encumbrances or otherwise permitted by the Security Documents;
(i) Compliance with Environmental Laws and Approvals :  except as may already have been disclosed by the Borrower in writing to, and acknowledged in writing by, the Lender:
(i) the Borrower has complied with the provisions of all Environmental Laws;
(ii) the Borrower has obtained all Environmental Approvals and are in compliance with all such Environmental Approvals; and
(iii) the Borrower has not received notice of any Environmental Claim that the Borrower is not in compliance with any Environmental Law or any Environmental Approval;
(j) No Environmental Claims :  except as may already have been disclosed by the Borrower in writing to, and acknowledged in writing by, the Lender:
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(i) there is no Environmental Claim pending or, to the best of the Borrower's knowledge and belief, threatened against the Borrower or the Vessel or any other Related Ship; and
(ii) there has been no emission, spill, release or discharge of a Material of Environmental Concern from the Vessel or any other Related Ship or any vessel owned by, managed or crewed by or chartered to the Borrower which could give rise to an Environmental Claim;
(k) Copies true and complete :  the copies of the MOA and the Management Agreement delivered or to be delivered to the Lender pursuant to Clause 7.2 are, or will when delivered be, true and complete copies of such documents; such documents will when delivered constitute valid and binding obligations of the parties thereto enforceable in accordance with their respective terms and there will have been no amendments or variations thereof or defaults thereunder;
(l) Application made for DOC and SMC : in relation to the Vessel, the Operator has applied to the appropriate Regulatory Agency for a DOC for itself and an SMC in respect of the Vessel to be issued pursuant to the ISM Code within any time limit required or recommended by such Regulatory Agency and that neither the Borrower nor any Operator is aware of any reason why such application may be refused;
(m) Compliance with the ISPS code :  the Vessel will comply on the Drawdown Date and the Operator complies with the requirements of the ISM Code and the SMC which has been or, as the case may be, shall be issued in respect of the Vessel and shall remain valid on the Drawdown Date and thereafter throughout the Security Period.
(n) Compliance with ISPS Code :  the Owner has a valid and current ISSC in respect of its Vessel and the vessel owned by it and is in full compliance with the ISPS Code;
(o) No default under MOA : the Borrower is not in default under any of its obligations under the MOA;
(p) No Rebates : there will be no commissions, rebates, premiums or other payments by or to or on account of the Borrower or any other Security Party or, to the knowledge of the Borrower, any other person in connection with the MOA other than as shall be disclosed to the Lender by the Borrower in writing;
(q) FATCA :  None of the Security Parties is a FATCA FFI or a US Tax Obligor.
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(r) Shareholding :  the shares in the Borrower are legally and beneficially owned by the persons disclosed to the Lender in the negotiation of this Agreement.
6.3 Acting for its own account - Money laundering .  The Borrower represents and warrants and confirms that it is the beneficiary of the Loan made or to be made available to it and it will promptly inform the Lender   by written notice if it is not, or ceases to be, the beneficiary and notify the Lender   in writing of the name and the address of the new beneficiary/beneficiaries; the Borrower is aware that under applicable money laundering provisions, it has an obligation to state for whose account the Loan is obtained; the Borrower confirms that, by entering into this Agreement and the other Security Documents, it is acting on its own behalf and for its own account and it is obtaining the Loan for its own account. In relation to the borrowing by the Borrower of the Loan , the performance and discharge of its obligations and liabilities under this Agreement or any of the Security Documents and the transactions and other arrangements effected or contemplated by this Agreement or any of the Documents to which the Borrower is a party, it is acting for its own account and that the foregoing will not involve or lead to a contravention of any law, official requirement or other regulatory measure or procedure which has been implemented to combat "money laundering" (as defined in Article 1 of the Directive (91/308/EEC) of the Council of the European Community).
6.4 Representations Correct.  At the time of entering into this Agreement all above representations and warranties or any other information given by the Borrower and/or the Guarantor to the Lender are true and accurate.
6.5 Repetition of Representations and Warranties.  The representations and warranties in this Clause 6 (except in relation to the representations and warranties in Clause 6.2) shall be deemed to be repeated by the Borrower on the Drawdown Date and on each Interest Payment Date throughout the Security Period as if made with reference to the facts and circumstances existing on each such day.
7. CONDITIONS PRECEDENT
7.1 Conditions precedent to the execution of this Agreement.  The obligation of the Lender to make the Commitment or any part thereof available shall be subject to the condition that the Lender shall have received, not later than two (2) Banking Days before the day on which the Drawdown Notice in respect of the Commitment or such part thereof is given, the following documents and evidence in form substance satisfactory to the Lender:
(a) a duly certified true copy of the Articles of Incorporation and By-Laws or the Memorandum and Articles of Association, or of any other constitutional documents, as the case may be, of each corporate Security Party;
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(b) a recent certificate of incumbency of each corporate Security Party issued by the appropriate authority or, as appropriate, signed by the secretary or a director thereof, stating the officers and the directors of each of them;
(c) a recent certificate as to the shareholding of each corporate Security Party issued by an appropriate authority or, at the discretion of the Lender, signed by the secretary or a director of each of them as the case may be, stating respectively the full names and addresses of the person or persons beneficially entitled as shareholders/ stockholders of the entire issued and outstanding shares/ stock of each of them;
(d) minutes of separate meetings of the directors and (if required) shareholders of each corporate Security Party at which there was approved (inter alia) the entry into, execution, delivery and performance of this Agreement, the other Security Documents and any other documents executed or to be executed pursuant hereto or thereto to which the relevant corporate Security Party is or is to be a party;
(e) the original of any power(s) of attorney and any further evidence of the due authority of any person signing this Agreement, the other Security Documents, and any other documents executed or to be executed pursuant hereto or thereto on behalf of any corporate person;
(f) evidence that all necessary licences, consents, permits and authorisations (including exchange control ones) have been obtained by any Security Party for the execution, delivery, validity, enforceability, admissibility in evidence and the due performance of the respective obligations under or pursuant to this Agreement and the other Security Documents;
(g) evidence that the fees referred to in Clause 10.9 have been paid in full;
(h) a copy of the DOC applicable to Manager certified as true and in effect;
(i) any other documents or recent certificates or other evidence which would be required by the Lender in relation to any corporate Security Party evidencing that the relevant Security Party has been properly established, continues to exist validly and is in good standing; and
(j) a copy of each of the following documents certified as true and complete by the legal counsel of the Borrower :
(i) the MOA;
(ii) the Management Agreement evidencing that the Vessel is managed by the relevant Manager on terms acceptable to the Lender ; and
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(iii) any Charterparty.
7.2 Conditions precedent to the making of the Commitment.   The obligation of the Lender to advance the Commitment (or any part thereof) is subject to the further condition that the Lender shall have received prior to the drawdown or, where this is not possible, simultaneously with the drawdown of the Commitment or the relevant part thereof:
(a) the Drawdown Notice duly executed and issued;
(b) each of the Security Documents (as set out in Clause 11.1) duly executed and where appropriate duly registered with the Registry or any other competent authority (as required);
(c) evidence that, prior to or simultaneously with the relevant drawdown, the Vessel will be duly registered in the ownership of the Borrower with the Registry and under the laws and flag of the Flag State free from any Encumbrances save for those in favour of the Lender and otherwise as contemplated herein;
(d) evidence in form and substance satisfactory to the Lender that the Vessel has been or will - on the Drawdown Date - be insured in accordance with the insurance requirements provided for in this Agreement and the other Security Documents, including a MII, together with an opinion from insurance consultants (appointed by the Lender at the Borrower's expense) as to the adequacy of the insurances effected or to be effected in respect of the Vessel, to be followed by full copies of cover notes, policies, certificates of entry or other contracts of insurance and irrevocable authority is hereby given to the Lender at any time at its discretion to obtain copies of the policies, certificates of entry or other contracts of insurance from the insurers and/or obtain any information in relation to the Insurances relating to the Vessel;
(e) copies of the trading certificates of the Vessel certified as true and complete by the legal counsel of the Borrower evidencing the same to be valid and in force;
(f) all necessary confirmations from the insurers of the Vessel that they will issue letters of undertaking and endorse notice of assignment and loss payable clauses on the Insurances, in form and substance satisfactory to the Lender in its sole discretion and - in the event of fleet cover - accompanied by waivers for liens for unpaid premium of other vessels managed by the Manager(s) and which are not subject to any mortgage in favour of the Lender) and (if required by the Lender) an opinion signed by an independent firm of marine insurance brokers appointed and/or approved by the Lender at the expenses
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of the Borrower confirming the adequacy of the Insurances maintained on the Vessel;
(g) evidence from the Classification Society that the Vessel is classed with the class notation (referred to in the Mortgage), with the Classification Society or to a similar standard with another classification society of like standing to be specifically approved by the Lender and remains free from any overdue requirements or recommendations affecting her class;
(h) a copy of the trim and stability booklet certifying the lightweight of the Vessel certified as true and complete by the legal counsel of the Borrower ;
(i) copy of the DOC referred to in paragraph (a) in the definition of the ISM Code Documentation certified as true and complete by the legal counsel of the Borrower;
(j) copies of such applications for ISM Code Documentation as the Lender may by written notice to the Borrower have requested not later than two (2) days before the Drawdown Date certified as true and complete in all material respects by the Borrower and the Manager(s);
(k) true and complete copy of the application for ISSC certificates issued pursuant to the ISPS Code;
(l) recent charter free valuation of the Vessel, at the Borrower's expense, as at a date determined by the Lender but in any event before the Drawdown Date, prepared on the basis specified in Clause 8.5(b) by major shipbrokers appointed and/or approved by the Lender in form and substance satisfactory to the Lender;
(m) due authorisation in form and substance satisfactory to the Lender authorising the Lender to have access and/or obtain any copies of class records or other information at its discretion from the classification society of the Vessel specified in the Mortgage, provided, however, that the Lender shall not exercise such right unless and until an Event of Default has occurred and is continuing;
(n) the Insurance Letter duly executed;
(o) evidence that the Earnings Account has been duly opened and all mandate forms, signature cards and authorities have been duly delivered to the Lender;
(p) evidence to the full satisfaction of the Lender, proving the Seller's title to the Vessel free of any Encumbrances, debts or claims of any nature whatsoever;
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(q) duly certified copy of the Bill of Sale, the protocol of delivery and acceptance of the Vessel as well as of all other Seller's documents;
(r) evidence that no Encumbrances are registered against the Vessel on her previous register; and
(s) evidence that the Purchase Price of the Vessel has been (or upon her delivery will have been) paid in full in accordance with the provisions of the MOA.
7.3 No change of circumstances. The obligation of the Lender to advance the Commitment or any part thereof is subject to the further condition that at the time of the giving of the Drawdown Notice and on the Drawdown Date:
(a) the representations and warranties set out in Clause 6 and in each of the Security Documents are true and correct on and as of each such time as if each was made with respect to the facts and circumstances existing at such time;
(b) no Default shall have occurred and be continuing or would result from the drawdown; and
(c) the Lender shall be satisfied that there has been no change in the ownership, management, operations and/or adverse change in the financial condition of any Security Party which (change) might, in the sole opinion of the Lender, be detrimental to the interests of the Lender; and
(d) the interest rate applicable to the Loan during the first Interest Period would not fail to be determined pursuant to Clause 3.6.
7.4 General Conditions.  The obligation of the Lender to advance the Commitment or any part thereof is subject to the further condition that the Lender, prior to or simultaneously with the drawdown, shall have received:
(a) draft opinions from lawyers appointed by the Lender as to all the matters referred to in Clauses 6.1(a) and (b) and all such aspects of law as the Lender shall deem relevant to this Agreement and the other Security Documents and any other documents executed pursuant hereto or thereto and any further legal or other expert opinion as the Lender at its sole discretion may require;
(b) confirmation from any agents nominated in this Agreement and elsewhere in the other Security Documents for the acceptance of any notice or service of process, that they consent to such nomination; and
(c) a receipt in writing in form and substance satisfactory to the Lender including an acknowledgement and admission of the Borrower and the other Security Parties to the effect that the Commitment or relevant part thereof (as the case
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may be) was drawn by the Borrower and a declaration by the Borrower that all conditions precedent have been fulfilled, that there is no Event of Default and that all the representations and warranties are true and correct.
7.5 Know your customer and money laundering compliance. The obligation of the Lender to advance the Commitment or any part thereof is subject to the further condition that the Lender, prior to or simultaneously with the drawdown, shall have received, to the extent required by any change in applicable law and regulation or any changes in the Lender's own internal guidelines since the date on which the applicable documents and evidence were delivered to the Lender pursuant to Clause 8.7, such further documents and evidence as the Lender shall require to identify the Borrower and the other Security Parties and any other persons involved or affected by the transaction(s) contemplated by this Agreement.
7.6 Further documents.  Without prejudice to the provisions of this Clause 7 the Borrower hereby undertakes with the Lender to make or procure to be made such amendments and/or additions to any of the documents delivered to the Lender in accordance with this Clause 7 and to execute and/or deliver to the Lender or procure to be executed and/or delivered to the Lender such further documents as the Lender and its legal advisors may reasonably require to satisfy themselves that all the terms and requirements of this Agreement have been complied with.
7.7 Waiver of conditions precedent. The conditions specified in this Clause 7 are inserted solely for the benefit of the Lender and may be waived by the Lender in whole or in part and with or without conditions.  Without prejudice to any of the other provisions of this Agreement, in the event that the Lender, in its sole and absolute discretion, makes the Commitment available to the Borrower prior to the satisfaction of all or any of the conditions referred to in Clause 7.1, 7.2 and 7.3, the Borrower hereby covenants and undertakes to satisfy or procure the satisfaction of such condition or conditions by no later than fourteen (14) days after the Drawdown Date or within such longer period as the Lender may, in its sole and absolute discretion, agree to or specify.
8. COVENANTS
8.1 General.  The Borrower hereby undertakes with the Lender that, from the date of this Agreement and so long as any moneys are owing under any of the Security Documents and while all or any part of the Loan remain outstanding, they will:
(a) Notice on adverse change or Default :  immediately inform the Lender upon becoming aware of any occurrence which might adversely affect the ability of any Security Party to perform its obligations under any of the Security Documents and, without limiting the generality of the foregoing, will inform the Lender of any Default forthwith upon becoming aware thereof and will from time to time, if so requested by the Lender, confirm to the Lender in
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writing that, save as otherwise stated in such confirmation, no Default has occurred and is continuing;
(b) Consents and licenses :  without prejudice to Clauses 6.1 and 7, obtain or cause to be obtained, maintain in full force and effect and comply in all material respects with the conditions and restrictions (if any) imposed in, or in connection with, every consent, authorisation, license or approval of governmental or public bodies or authorities or courts and do or cause to be done, all other acts and things which may from time to time be necessary or desirable under applicable law for the continued due performance of all the obligations of the Security Parties under each of the Security Documents;
(c) Use of Loan proceeds : use the Loan exclusively for the purposes specified in Clause 1.1;
(d) Pari passu :  ensure that its obligations under this Agreement shall, without prejudice to the provisions of this Clause 8.1, at all times rank at least pari passu with all its other present and future unsecured and unsubordinated Indebtedness of the Borrower with the exception of any obligations which are mandatorily preferred by law and not by contract;
(e) Financial statements :  furnish the Lender with (i) unaudited annual financial statements of the Borrower and audited financial statements of the Guarantor, by auditors acceptable to the Lender, prepared in accordance with the Applicable Accounting Principles in respect of each Financial Year as soon as practicable but not later than 120 days after the end of the financial period to which they relate, commencing on 31 th December, 2015, and (ii) semi-annual unaudited financial statements of the Guarantor, prepared in accordance with the Applicable Accounting Principles in respect of the first semester of the relevant Financial Year as soon as practicable but not later than 90 days after the end of each such financial period to which they relate;
(f) Provision of further information :  provide the Lender with such financial and other information concerning the Security Parties and their respective affairs as the Lender may from time to time reasonably require;
(g) Financial Information: provide the Lender from time to time as the Lender may reasonably request with information on the financial conditions and operations of the Borrower and the Guarantor, as such information may be reasonably requested by the Lender and such information to be certified by a Director of the Borrower as to their correctness;
(h) Information on the employment of the Vessel :  provide the Lender from time to time as the Lender may request with information on the employment of the Vessel, as well as on the terms and conditions of any charterparty, contract of
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affreightment, agreement or related document in respect of the employment of the Vessel, such information to be certified by one of the directors of the Borrower as to their correctness;
(i) Banking operations : ensure that all banking operations in connection with the Vessel are carried out through the Lending Office of the Lender ;
(j) Liquidity : ensure that prior to the Drawdown Date and throughout the Security Period the Borrower shall maintain minimum free liquidity in free deposits with the Lender in an amount equal to at the time Borrower's Debt Service for the next semester;
(k) Obligations under Security Documents :  duly and punctually perform each of the obligations expressed to be assumed by it under the Security Documents;
(l) Payment on demand :  pay to the Lender on demand any sum of money which is payable by the Borrower to the Lender under this Agreement but in respect of which it is not specified in any other Clause when it is due and payable; and
(m) Compliance with Laws and Regulations : to comply, or procure compliance with all laws or regulations relating to the Borrower and/or the Vessel, its ownership, operation and management or to the business of the Borrower and cause this Agreement and the other Security Documents to comply with and satisfy all the requirements and formalities established by the applicable laws to perfect this Agreement and the other Security Documents as valid and enforceable Security Documents;
(n) Compliance with ISM Code :  procure that each Manager and any Operator:
(i) will comply with and ensure that the Vessel and any Operator by no later than the Drawdown Date complies with the requirements of the ISM Code, including (but not limited to) the maintenance and renewal of valid certificates pursuant thereto throughout the Security Period;
(ii) immediately inform the Lender if there is any threatened or actual withdrawal of the Borrower's, the Manager(s)' or an Operator's DOC or the SMC in respect of the Vessel; and
(iii) promptly inform the Lender upon the issue to the Borrower, the relevant Manager(s) or any Operator of a DOC and to the Vessel of an SMC or the receipt by the Borrower, the relevant Manager(s) or any Operator of notification that its application for the same has been realised;
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(o) Compliance with ISPS Code :  procure that the relevant Manager(s) or any Operator will:
(i) maintain at all times a valid and current ISSC respect of the Vessel;
(ii) immediately notify the Lender in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the ISSC in respect of the Vessel; and
(iii) procure that the Vessel will comply at all times with the ISPS Code;
(p) Inspections/Surveys : at reasonable times and upon reasonable notice and without interfering with the Vessel's normal course of trading that the Lender might consider to be necessary or useful, have the Vessel inspected and/or surveyed at the expense of the Borrower by surveyors and/or inspectors appointed by the Lender and the Borrower hereby duly authorise the Lender to review the insurance and operating records of the Borrower; and
(q) Compliance with Covenants :  duly and punctually perform all obligations under this Agreement and the other Security Documents; and
(r) Application of FATCA:   The Borrower shall procure that, unless otherwise agreed by the Lender, no Security Party shall become a FATCA FFI or a US Tax Obligor.
8.2 Negative undertakings.  The Borrower undertakes with the Lender that, from the date of this Agreement and so long as any moneys are owing under the Security Documents and while all or any part of the Loan remains outstanding, it will not, without the prior written consent of the Lender:
(a) Negative pledge : permit any Encumbrance (other than a Permitted Encumbrance) to subsist, arise or be created or extended over all or any part of its present or future undertakings, assets, rights or revenues to secure or prefer any present or future Indebtedness or other liability or obligation of the Borrower or any other person;
(b) No further Indebtedness :  incur no further Indebtedness nor authorise or accept any capital commitments (other than that normally associated with the day to day operations of the Vessel) nor enter into any agreement for payment on deferred terms or hire agreement;
(c) No merger :  merge or consolidate with any other person;
(d) Disposals :  sell, transfer, abandon, lend or otherwise dispose of or cease to exercise direct control over any part (being either alone or when aggregated with all other disposals falling to be taken into account pursuant to this
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Clause 8.2(d) material in the opinion of the Lender in relation to the undertakings, assets, rights and revenues of the Borrower) of its present or future undertaking, assets, rights or revenues (otherwise than by transfers, sales or disposals for full consideration in the ordinary course of trading) whether by one or a series of transactions related or not;
(e) Other business :  undertake any type of business other than the ownership and operation of the Vessel and the chartering of the Vessel to third parties;
(f) Acquisitions :  acquire any further assets other than the Vessel and rights arising under contracts entered into by or on behalf of the Borrower in the ordinary course of its business of owning, operating and chartering the Vessel;
(g) Other obligations :  incur any obligations except for obligations arising under the Security Documents or contracts entered into in the ordinary course of its business of owning, operating and chartering the Vessel (and for the purposes of this Clause 8.2(g) fees to be paid pursuant to the Management Agreement in respect of the Vessel shall be considered as permitted obligations under the Security Documents);
(h) No borrowing :  incur any Borrowed Money except for Borrowed Money pursuant to the Security Documents;
(i) Repayment of borrowings :  repay the principal of, or pay interest on or any other sum in connection with, any of its Borrowed Money except for Borrowed Money pursuant to the Security Documents;
(j) No Payments : except pursuant to this Agreement and the Security Documents (or as expressly permitted by the same) not pay out any funds to any company or person except in connection with the administration of the Borrower, the operation, trade, charter, maintain and/or repair of the Vessel;
(k) Guarantees : issue any guarantees or indemnities or otherwise become directly or contingently liable for the obligations of any person, firm, or corporation except pursuant to the Security Documents and except for, in the case of the Borrower, guarantees or indemnities from time to time required in the ordinary course by any protection and indemnity or war risks association with which the Vessel is entered, guarantees required to procure the release of the Vessel from any arrest, detention, attachment or levy or guarantees or undertakings required for the salvage of the Vessel;
(l) No Loans :  make any loans or advances to, or any investments in any person, firm, corporation, joint venture or other entity including (without limitation) any loan or advance or grant any credit (save for liabilities or obligations
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reasonably incurred in the normal course of its business of trading, operating and chartering, maintaining and repairing the Vessel owned by it including, without limitation, any shareholder loan subject to the Borrower ensuring, on or prior to the date of the first advance of that loan, that the rights of the shareholder which is the provider of that loan are fully subordinated to the rights of the Lender under this Agreement and the other Security Documents in writing and upon such terms and conditions as shall be required by the Lender and save for normal trade credit in the ordinary course of business) to any officer, director, stockholder or employee or any other company managed by the relevant Manager(s);
(m) Securities :  permit any Indebtedness of the Borrower to any person (other than the Lender) to be guaranteed by any person (save, in the case of the Borrower, for guarantees or indemnities from time to time required in the ordinary course by any protection and indemnity or war risks association with which the Vessel is entered, guarantees required to procure the release of the Vessel from any arrest, detention, attachment or levy or guarantees or undertakings required for the salvage of the Vessel);
(n) Dividends : declare or pay any dividends or distribute any of its present or future assets, undertakings, rights or revenues to any of its shareholders save as hereinafter provided:
(i) the Borrower may declare or pay such dividends subject to no Event of Default having occurred and being continuing; and
(ii) the Guarantor may declare or pay such dividends subject to (aa) no Event of Default having occurred and being continuing, (bb) there is no breach of any of the Financial Covenants set forth in Clause 8.6 ( Additional Financial Covenants - Compliance Certificate ) and Clause 5.3 ( Additional Financial Covenants - Compliance Certificate ) of the Guarantee and (cc) the amount of the dividends so declared shall not exceed 50% of its Net Income   except in case the Cash and Marketable Securities are equal or greater than the amount required to meet the Guarantor's Debt Service for the following eighteen-month period.
(o) Subsidiaries :  form or acquire any Subsidiaries.
(p) Maintenance of Business Structure : change the nature, organisation and conduct of the business of the Borrower or the Guarantor as owner of the Vessel or carry on any business other than the business carried on at the date of this Agreement;
(q) Maintenance of Legal Structure :  (such consent not be unreasonably withheld) ensure that none of the documents defining the constitution of any of the
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Borrower and the Guarantor shall be materially (in the Lender's opinion) altered in any manner whatsoever; and
(r) No Encumbrance of Assets :  allow any part of its undertaking, property, assets or rights, whether present or future, to be mortgaged, charged, pledged, used as a lien or otherwise encumbered without the prior written consent of the Lender; and
(s) Control : throughout the Security Period permit:
(i) any change to be made after the date of this Agreement directly or indirectly in the ownership, beneficial ownership or control of the Borrower or any share therein or of the Vessel (especially concerning class or flag) as a result of which less than the majority of the shares and voting rights in the Borrower remain in the ultimate legal and beneficial ownership of the person(s) disclosed to the Lender at the negotiation of this Agreement and/or the Vessel ceases to remain fully (100%) owned by the Borrower; and
(ii) any change to be made after the date of this Agreement directly or indirectly in the beneficial ownership of any of the shares in the Guarantor and/ or in the ultimate control of the voting rights attaching to any of those shares from that existing on the date of this Agreement, which results in the person(s) disclosed to the Lender at the negotiation of this Agreement not having at least 51% of the shares issued and outstanding in the share capital in the Guarantor and/or the voting rights attaching to those shares .
8.3 Undertakings concerning the Vessel.  The Borrower hereby undertakes with the Lender that, from the date of this Agreement and so long as any moneys are owing under the Security Documents that it will:
(a) Chartering :  not without the prior written consent of the Lender (such consent not to be unreasonable withheld) let or agree to let the Vessel:
(i) on demise charter for any period; or
(ii) by any time or consecutive voyage charter for a term which exceeds or which by virtue of any optional extensions therein contained may exceed twelve (12) months' duration; or
(iii) on terms whereby more than two months' hire (or the equivalent) is payable in advance; or
(iv) other than on an arm's length basis;
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(b) Manager :  not without the prior written consent of the Lender (and then only subject to such conditions as the Lender may impose) appoint a manager of the Vessel other than the relevant Manager;
(c) Ownership/Management/Control :  ensure that the Vessel remains registered on the Drawdown Date in the ownership of the Owner thereof under the laws of the Flag State and thereafter ensure that the Vessel will maintain her present ownership, management, control and beneficial ownership;
(d) Class :  ensure that the Vessel will remain in class free of recommendations or average damage affecting class or permitted by the Classification Society and provide the Lender on demand with copies of all class and trading certificates of the Vessel;
(e) Insurances : ensure that all Insurances (as defined in the relevant Mortgage/General Assignment) of the Vessel are maintained and comply with all insurance requirements specified in this Agreement and in the relevant Mortgage and in case of failure to maintain the Vessel so insured, authorise the Lender (and such authorisation is hereby expressly given to the Lender) to have the right but not the obligation to effect such Insurances on behalf of the Owner thereof (and in case that the Vessel remains in port for an extended period) to effect port risks insurances at the cost of the Borrower which, if paid by the Lender, shall be Expenses;
(f) Transfer/Encumbrances :  not without the prior written consent of the Lender sell or otherwise dispose of the Vessel or any share therein or create or agree to create or permit to subsist any Encumbrance over the Vessel (or any share or interest therein other than Permitted Encumbrances);
(g) Not imperil Flag, Ownership, Insurances : ensure that the Vessel is maintained and trades in conformity with the laws of the Flag State, of its owning company or of the nationality of the officers, the requirements of the Insurances and nothing is done or permitted to be done which could endanger the flag of the Vessel or its unencumbered (other than Encumbrances in favour of the Lender and Encumbrances permitted by this Agreement) ownership or its Insurances;
(h) Mortgage Covenants :  always comply with all the covenants provided for in the Mortgages;
(i) Assignment of Earnings :  not assign or agree to assign otherwise than to the Lender the Earnings or any part thereof.
(j) Chartering :   ensure and procure that in the event of the Vessel being employed under a Charterparty of a duration longer than 12 months, (a) the
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Borrower shall execute and deliver to the Lender within fifteen (15) days of signing thereof a specific Charterparty Assignment in favour of the Lender of the benefit of such Charterparty and a notice of any such assignment addressed to the relevant charterer and endorsed with an acknowledgement of receipt by the relevant charterer, all in form and substance satisfactory to the Lender or (b) alternatively at the discretion of the Lender, a copy of irrevocable instructions of the Owner of the respective Vessel to the charterer for the payment of the hire to the Lender and/or a copy of the charterparty with appropriate irrevocable notation;
(k) Compliance with Environmental Laws :  comply with, and procure that all Environmental Affiliates comply with, all Environmental Laws including without limitation, requirements relating to manning and establishment of financial responsibility and to obtain and comply with all Environmental Approvals and to notify the Lender forthwith:
(i) of any Environmental Claim for an amount or amounts in aggregate exceeding Five hundred thousand Dollars ($500,000) made against the Vessel, any Relevant Ship and/or her respective owner; and
(ii) upon becoming aware of any incident which may give rise to an Environmental Claim and to keep the Lender advised in writing of the Borrower's response to such Environmental Claim on such regular basis and in such detail as the Lender shall require.
8.4 Validity of Securities - Earnings - Taxes etc.  The Borrower hereby undertakes with the Lender that, from the date of this Agreement and so long as any moneys are owing under the Security Documents and while all or any part of the Commitment remains outstanding, they will:
(a) Validity :  ensure and procure that all governmental or other consents required by law and/or any other steps required for the validity, enforceability and legality of this Agreement and the other Security Documents are maintained in full force and effect and/or appropriately taken;
(b) Earnings :  ensure and procure that, unless and until directed by the Lender otherwise (i) all the Earnings of the Vessel shall be paid to the Earnings Account and (ii) the persons from whom the Earnings are from time to time due are irrevocably instructed to pay them to the said Earnings Account or to such account in the name of the Borrower as shall be from time to time determined by the Lender in accordance with the provisions hereof and of the relevant Security Documents;
(c) Taxes :  pay all Taxes, assessments and other governmental charges when the same fall due, except to the extent that the same are being contested in good
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faith by appropriate proceedings and adequate reserves have been set aside for their payment if such proceedings fail; and
(d) Additional Documents :  from time to time at the request of the Lender execute and deliver to the Lender or procure the execution and delivery to the Lender of all such documents as shall be deemed desirable at the reasonable discretion of the Lender for giving full effect to this Agreement, and for perfecting, protecting the value of or enforcing any rights or securities granted to the Lender under any one or more of this Agreement, the other Security Documents and any other documents executed pursuant hereto or thereto and in case that any conditions precedent (with the Lender's consent) have not been fulfilled prior to the relevant Drawdown Date, such conditions shall be complied with within five (5) Banking Days after the Lender's written request (unless the Lender agrees otherwise in writing) and failure to comply with this covenant shall be an Event of Default.
8.5 Market Value to Debt Ratio-Additional Security - Valuation of the Vessel.
(a) Security shortfall :  If, as from the 1 st January, 2018 and thereafter at any time during the Security Period, the Security Value shall be less than the Security Requirement, the Lender may give notice to the Borrower requiring that such deficiency be remedied and then the Borrower shall (unless if the sole cause of such deficiency is the Total Loss of the Vessel and the Borrower is in full compliance with his obligations in relation to such Total Loss) either;
(i) prepay (in accordance with Clause 4.2 (but without regard to the requirement for ten (10) days notice) within a period of thirty (30) days of the date of receipt by the Borrower of the Lender's said notice such sum in Dollars as will result in the Security Requirement after such prepayment (taking into account any other repayment of the Loan made between the date of the notice and the date of such prepayment) being at least equal to the Security Value; or
(ii) within thirty (30) days of the date of receipt by the Borrower of the Lender's said notice constitute to the satisfaction of the Lender such further security for the Loan as shall be acceptable to the Lender having a value for security purposes (as determined by the Lender in its absolute discretion) at the date upon which such further security shall be constituted which, when added to the Security Value, shall not be less than the Security Requirement as at such date. Such additional security shall be constituted by:
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a) additional pledged cash deposits in favor of the Lender in an amount equal to such shortfall with the Lender and in an account and manner to be determined by the Lender; and/or
b) any other security acceptable to the Lender at its absolute discretion to be provided in a manner determined by the Lender.
Any such additional security provided to the Lender shall be promptly released by the Lender once the Security Requirement ratio has been restored. The provisions of Clauses 4.3 and 4.4 shall apply to prepayments under Clause 8.5(a)(i).
(b) Valuation of Vessel :  The Vessel shall, for the purposes of this Clause 8.5, be valued in Dollars (at least once a year) as and when the Lender shall reasonably require by any of the following shipbrokers (i) H. Clarkson & Company Limited and (ii) S.S.Y and (iii) Golden Destiny and (iv) Allied Shipbroking Inc. and (v) Arrow Shipbroking Group, appointed by the Lender in its sole discretion (such valuation to be made without, unless required by the Lender, physical inspection, and on the basis of a sale for prompt delivery for cash at arms length on normal commercial terms as between a willing buyer and a willing seller, without taking into account the benefit of any Charterparty or other engagement concerning the Vessel). The Lender and the Borrower agree to accept such valuation made by the shipbroker appointed as aforesaid as conclusive evidence of the Market Value of the Vessel at the date of such valuation and such valuation shall constitute the Market Value of the Vessel for the purposes of this Clause 8.5.
The value of the Vessel determined in accordance with the provisions of this Clause 8.5 shall be binding upon the Borrower and the Lender until such time as any further such valuations shall be obtained.
(c) Information : The Borrower undertakes to the Lender to supply to the Lender and to any such shipbrokers such information concerning the Vessel and its condition as such shipbrokers may reasonably require for the purpose of making any such valuation.
(d) Costs :  All costs in connection with the Lender obtaining any valuation of the Vessel referred to in Clause 8.5(b), and any valuation of any additional security for the purposes of ascertaining the Security Value at any time or necessitated by the Borrower electing to constitute additional security pursuant to Clause 8.5(a)(ii) shall be borne by the Borrower, provided that not more than four valuations will be obtained in each calendar year during the Security Period.
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(e) Valuation of additional security :  For the purpose of this Clause 8.5, the market value of any additional security provided or to be provided to the Lender shall be determined by the Lender in its absolute discretion without any necessity for the Lender assigning any reason thereto and if such security consists of a vessel shall be that shown by a valuation complying with the requirements of Clause 8.5(b) (whereas the costs shall be borne by the Borrower in accordance with Clause 8.5(d)) or if the additional security is in the form of a cash deposit full credit shall be given for such cash deposit on a Dollar for Dollar basis and if such security consists of a vessel shall be that shown by a valuation complying with the requirements of Clause 8.5(b) (whereas the costs shall be borne by the Borrower in accordance with Clause 8.5 (d)) or if the additional security is in the form of a cash deposit full credit shall be given for such cash deposit on a Dollar for Dollar basis.
(f) Documents and evidence : In connection with any additional security provided in accordance with this Clause 8.5, the Lender shall be entitled to receive such evidence and documents of the kind referred to in Schedule 2 as may in the Lender's opinion be appropriate and such favourable legal opinions as the Lender shall in its absolute discretion require.
8.6 Additional Financial Covenants - Compliance Certificate . The Borrower shall ensure that for the duration of the Security Period:
(a) Liquidity : the Guarantor shall maintain minimum free liquidity in an amount equal to $500,000 per Fleet Vessel to be fully accumulated within a period of eighteen (18) months from the Drawdown Date in free deposits.
(b) Leverage : the Corporate Leverage Ratio of the Guarantor will not be, at the end of any Accounting Period, higher than 0.75:1.0, the compliance with such obligation to be tested on each Financial Semester Day starting from the 30 th June, 2018;
(c) EBITDA : the consolidated interest cover ratio for the Accounting Period (EBITDA to Net Interest Expense) shall not be lower than 2:1, the compliance with such obligation to be tested on each Financial Semester Day starting from the 30 th June, 2018
(d) Compliance Certificate : ensure that on each Financial Semester Day to be delivered to the Lender a Compliance Certificate in the form provided in Schedule 3 of this Agreement, duly completed and supported by calculations setting out in reasonable detail the materials underling the statements made in such Compliance Certificate to be delivered to the Lender; such Compliance Certificate to be provided as follows: (i) with respect to each Financial Second Semester Day as soon as practicable but not later than 120
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days after the end of such Financial Second Semester Day and (ii) with respect to each Financial First Semester Day as soon as practicable but not later than 90 days after the end of such Financial First Semester Day, provided that the first Compliance Certificate to be delivered by the Borrower to the Lender will be with respect to the Financial Second Semester Day ending 30 June 2018.
(e) The expressions used in this Clause 8.6. shall be construed in accordance with the law and the Applicable Accounting Principles as used in the Accounting Information produced in accordance with sub-Clause 8.1(e) and for the purposes of this Agreement:
"Corporate Leverage Ratio" means, in respect of an Accounting Period, Total Debt less Corporate Liquidity divided by Total Assets less Corporate Liquidity (based on combined results that will be prepared by the Guarantor upon the Lender's request) provided however the Fleet Vessels included in Total Assets should be adjusted to their market values which shall be acceptable to the Lender;
"Corporate Liquidity" in relation to the Guarantor means, in respect of an Accounting Period, the sum of Cash;
"EBITDA" in respect of an Accounting Period and on a consolidated basis of the Guarantor means the Earnings before interest, expenses and other financial charges, taxes, depreciation and amortization and non-recurring losses and gains in the previous period of six (6) months or, as the case may be, twelve (12) months;
"Financial First Semester Day" means, 30 June in any year;
"Financial Second Semester Day" means, 31 December in any year;
"Financial Semester Day" means each of the Financial First Semester Day and the Financial Second Semester Day on which the Corporate Leverage Ratio of the Guarantor and the consolidated interest cover ratio for the Accounting Period (EBITDA to Net Interest Expense) shall be tested as provided in this Clause 8.6 (together, the "Financial Semester Days" );
"Fleet Market Value" means, as of the date of calculation, the aggregate market value of all the Fleet Vessels as determined in accordance with Clause 8.5(b);
"Fleet Vessels" means the vessels (including, but not limited to, the Vessel) from time to time owned by a member of the Group and
" Fleet Vessel " respectively means any of the Fleet Vessels;
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"Net Interest Expense" in respect of an Accounting Period and a consolidated basis of the Guarantor means payments of interest made or due less any earned interest in the previous period of six (6) or, as the case may be, twelve (12) months;
"Total Assets" means, in respect of an Accounting Period, the aggregate on a consolidated basis of the Group assets adjusted to reflect the Fleet Market Value, as reported in the financial statements to be provided to the Lender according to Clause 8.1(e) of this Agreement; and
"Total Debt" means, in respect of an Accounting Period, the aggregate on a consolidated basis of the Group of all short term interest bearing bank debt included in the financial statements of the Group under current liabilities plus the long term interest bearing bank debt excluding any shareholder convertible note.
(f) Determination of defined terms : All the terms defined in this Clause 8.6 and used in this Clause 8.6, and other accounting terms used in this Clause 8.6, are to be determined on a consolidated basis and (except as items are expressly included or excluded in the relevant definition or provision) are used and shall be construed in accordance with the Applicable Accounting Principles and as determined from any relevant Accounting Information.

(g) Compliance : The compliance of the Guarantor with the undertakings set out in Clause 8.6 shall be determined by the Lender in accordance with the Applicable Accounting Principles (and such determination shall, in the absence of manifest error, be conclusive on the Guarantor) on the basis of calculations made by the Lender by reference to the relevant Accounting Information delivered to the Lender pursuant to Clause 8.1(e). Without prejudice to the other terms of this Clause 8.6 and, in particular, the time when compliance with the financial covenants and ratios of this Clause 8.6 is to be measured by the Lender.

(h) Calculations : For the purposes of this Clause 8.6: (aa) no item shall be deducted or credited more than once in any calculation; and (bb) any amount expressed in a currency other than Dollars shall be converted into Dollars in accordance with the Applicable Accounting Principles.

8.7 Covenants for the Securities Parties. The Borrower hereby undertakes with the Lender that, from the date of this Agreement and so long as any moneys are owing under the Security Documents and while all or any part of the Commitment remains outstanding, they will ensure and procure that all other Security Parties and each of them duly and punctually comply, with the covenants in Clauses 8.1, 8.4 and 8.5 which are applicable to them mutatis mutandis.
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8.8 Know your customer and money laundering compliance. The Borrower hereby undertakes with the Lender that, from the date of this Agreement and so long as any moneys are owing under the Security Documents and while all or any part of the Commitment remains outstanding, it will provide the Lender with such documents and evidence as the Lender shall from time to time require, based on applicable law and regulations from time to time and the Lender's own internal guidelines from time to time to identify the Borrower and the other Security Parties, including the disclosure in writing of the ultimate legal and beneficial owner or owners of such entities, and any other persons involved or affected by the transaction(s) contemplated by this Agreement.
9. EVENTS OF DEFAULT
9.1 Events.  There shall be an Event of Default if:
(a) Non‑payment : any Security Party fails to pay any sum payable by it under any of the Security Documents at the time, in the currency and in the manner stipulated in the Security Documents (and so that, for this purpose, sums payable on demand shall be treated as having been paid at the stipulated time if paid within five (5) Banking Days of demand and other sums due shall be treated as having been paid at the stipulated time if paid within two (2) Banking Days of its falling due); or
(b) Breach of Insurance and certain other obligations : the Borrower fails to obtain and/or maintain the Insurances (as defined in, and in accordance with the requirements of, the Security Documents) or if any insurer in respect of such Insurances cancels the Insurances or disclaims liability by reason, in either case, of mis‑statement in any proposal for the Insurances or for any other failure or default on the part of the Borrower or any other person or the Borrower commits any breach of or omits to observe any of the obligations or undertakings expressed to be assumed by it under Clause 8; or
(c) Breach of other obligations : any Security Party commits any breach of or omits to observe any of its obligations or undertakings expressed to be assumed by it under any of the Security Documents (other than those referred to in Clauses 9.l(a) and 9.1 (b) above) and, in respect of any such breach or omission which in the opinion of the Lender is capable of remedy, such action as the Lender may require shall not have been taken within fifteen (15) days of the Lender notifying in writing the relevant Security Party of such default and of such required action; or
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(d) Misrepresentation : any representation or warranty made or deemed to be made or repeated by or in respect of any Security Party in or pursuant to any of the Security Documents or in any notice, certificate or statement referred to in or delivered under any of the Security Documents is or proves to have been incorrect or misleading in any material respect; or

(e) Cross‑default : any Indebtedness of any of the Borrower and the Guarantor relating to an amount exceeding Seven hundred fifty Dollars ($750,000)   is not paid when due (unless contested in good faith) or any Indebtedness of any of the Borrower and the Guarantor becomes (whether by declaration or automatically in accordance with the relevant agreement or instrument constituting the same) due and payable prior to the date when it would otherwise have become due (unless as a result of the exercise by such Security Party of a voluntary right of prepayment), or the Lender of any of the Borrower and the Guarantor becomes entitled to declare any such Indebtedness due and payable or any facility or commitment available to any of the Borrower and the Guarantor relating to Indebtedness is withdrawn, suspended or cancelled by reason of any default (however described) of the person concerned unless the relevant Security Party shall have satisfied the Lender that such withdrawal, suspension or cancellation will not affect or prejudice in any way the relevant Security Party's ability to pay its debts as they fall due, or any guarantee given by any of the Borrower and the Guarantor in respect of Indebtedness relating to an amount exceeding Seven hundred fifty Dollars ($750,000) is not honoured when due and called upon; or
(f) Legal process : any judgment or order made or commenced in good faith by a person against any of the Borrower and the Guarantor relating to an amount exceeding Five hundred thousand Dollars ($500,000)   is not stayed or complied with within fifteen (15) days or a good faith creditor attaches or takes possession of, or a distress, execution, sequestration or other bonafide process is levied or enforced upon or sued out against, any of the undertakings, assets, rights or revenues of any of the Borrower and the Guarantor and is not discharged within fifteen (15) days; or
(g) Insolvency : any Security Party becomes insolvent or stops or suspends making payments (whether of principal or interest) with respect to all or any class of its debts or announces an intention to do so; or
(h) Reduction or loss of capital : a meeting is convened by any of the Borrower and the Guarantor for the purpose of passing any resolution to purchase, reduce or redeem any of its share capital; or
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(i) Winding up : any petition is presented or other step is taken for the purpose of winding up any Security Party or an order is made or resolution passed for the winding up of any Security Party or a notice is issued convening a meeting for the purpose of passing any such resolution; or
(j) Administration : any petition is presented or other step is taken for the purpose of the appointment of an administrator of any Security Party or the Lender believes that any such petition or other step is imminent or an administration order is made in relation to any Security Party; or
(k) Appointment of receivers and managers : any administrative or other receiver is appointed of any Security Party or any part of its assets and/or undertaking or any other steps are taken to enforce any Encumbrance over all or any part of the assets of any Security Party; or
(l) Compositions : any steps are taken, or negotiations commenced, by any Security Party or by any of its creditors with a view to the general readjustment or rescheduling of all or part of its indebtedness or to proposing any kind of composition, compromise or arrangement involving such company and any of its creditors provided, however, that if the Borrower are able to provide such evidence as is satisfactory in all respects to the Lender that such rescheduling will not relate to any payment default or anticipated default the same shall not constitute an Event of Default; or
(m) Analogous proceedings : there occurs, in relation to any Security Party, in any country or territory in which any of them carries on business or to the jurisdiction of whose courts any part of their assets is subject, any event which, in the opinion of the Lender, appears in that country or territory to correspond with, or have an effect equivalent or similar to, any of those mentioned in Clauses 9.1(f) to (l) (inclusive) or any Security Party otherwise becomes subject, in any such country or territory, to the operation of any law relating to insolvency, bankruptcy or liquidation; or
(n) Cessation of business : any Security Party suspends or ceases or threatens to suspend or cease to carry on its business; or
(o) Seizure : all or a material part of the undertaking, assets, rights or revenues of, or shares or other ownership interests in, any Security Party are seized, nationalised, expropriated or compulsorily acquired by or under the authority of any government; or
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(p) Invalidity : any of the Security Documents shall at any time and for any reason become invalid or unenforceable or otherwise cease to remain in full force and effect, or if the validity or enforceability of any of the Security Documents shall at any time and for any reason be contested by any Security Party which is a party thereto, or if any such Security Party shall deny that it has any, or any further, liability thereunder; or
(q) Unlawfulness : it becomes impossible or unlawful at any time for any Security Party, to fulfil any of the covenants and obligations expressed to be assumed by it in any of the Security Documents or for the Lender to exercise the rights or any of them vested in it under any of the Security Documents or otherwise; or
(r) Repudiation : any Security Party repudiates any of the Security Documents or does or causes or permits to be done any act or thing evidencing an intention to repudiate any of the Security Documents; or
(s) Encumbrances enforceable : any Encumbrance (other than Permitted Liens) in respect of any of the property (or part thereof) which is the subject of any of the Security Documents becomes enforceable; or
(t) Material adverse change : there occurs, in the reasonable opinion of the Lender, a material adverse change in the financial condition of any of the Borrower and the Guarantor as described by the Borrower or any other Security Party to the Lender in the negotiation of this Agreement, which might, in the opinion of the Lender, materially impair the ability of the above Security Parties (or any of them) to perform their respective obligations under this Agreement and the Security Documents to which is or is to be a party; or
(u) Arrest : the Vessel is arrested, confiscated, seized, taken in execution, impounded, forfeited, detained in exercise or purported exercise of any possessory lien or other claim or otherwise taken from the possession of the Owner thereof and the Owner shall fail to procure the release of the Vessel within a period of forty five (45) days thereafter; or
(v) Registration :  the registration of the Vessel under the laws and flag of the Flag State is cancelled or terminated without the prior written consent of the Lender or, if the Vessel is only provisionally registered on the relevant Drawdown Date and is not permanently registered under the laws and flag of the Flag State at least thirty (30) days prior to the deadline for completing such permanent registration; or
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(w) Unrest : the Flag State of the Vessel becomes involved in hostilities or civil war or there is a seizure of power in such Flag State by unconstitutional means if, in any such case, such event could in the opinion of the Lender reasonably be expected to have a material adverse effect on the security constituted by any of the Security Documents, unless the Ship is re-registered within thirty (30) days from the occurrence of such event on a Flag State which is not affected by hostilities or civil war or a seizure of power by unconstitutional means; or
(x) Environment : the Borrower or a Manager and/or any of their respective Environmental Affiliates fails to comply with any Environmental Law or any Environmental Approval or the Vessel or any Relevant Ship is involved in any incident which gives rise or which may give rise to any Environmental Claim, if in any such case, such non compliance or incident or the consequences thereof could (in the reasonable opinion of the Lender) be expected to have a material adverse effect on the business assets, operations, property or financial condition of the Borrower or any other Security Party or on the security created by any of the Security Documents; or
(y) P&I : any Security Party or any other person fails or omits to comply with any requirements of the protection and indemnity association or other insurer with which the Vessel is entered for insurance or insured against protection and indemnity risks (including oil pollution risks) to the effect that any cover in relation to the said Vessel (including without limitation, liability for Environmental Claims arising in jurisdictions where the Vessel operates or trades) is or may be liable to cancellation, qualification or exclusion at any time; or
(z) Change of Management : the Vessel ceases to be managed by the relevant Manager(s) (for any reason other than the reason of a Total Loss or sale of the Vessel) without the approval of the Lender and the Borrower fails to appoint another Manager prior to the termination of the mandate with the previous Manager(s); or
(aa) Deviation of Earnings : any Earnings of the Vessel are not paid to the Earnings Account for any reason whatsoever (other than with the Lender's prior written consent); or
(bb) ISM Code and ISPS Code : (without prejudice to the generality of sub-Clause 9.1(c)) for any reason whatsoever the provisions of Clause 8.1(n) and (o) are not complied with and the Vessel ceases to comply with the ISM Code or, as the case may be, the ISPS Code; or
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(cc) Material events : any other event or events (whether related or not) occurs or circumstance arises which constitutes a material (in the opinion of the Lender) adverse change, from the position applicable as at the date of this Agreement, in the business, affairs or condition (financial or otherwise) of any Security Party) (including any such material adverse change resulting from an Environmental Incident) the effect of which is likely, in the opinion of the Lender, to impair, delay or prevent the due fulfilment by any Security Party of any of its respective obligations or undertakings contained in this Agreement or any of the other Security Documents and/or materially and adversely to affect the security created by any of the Security Documents ; or
(dd) Security Documents : any other event of default (as howsoever described or defined therein) occurs under the Security Documents (or any of them).
9.2 Consequences of Default – Acceleration.  The Lender may without prejudice to any other rights of the Lender (which will continue to be in force concurrently with the following), at any time after the happening of an Event of Default, which is continuing:
(a) by notice to the Borrower declare that the obligation of the Lender to make the Commitment (or any part thereof) available shall be terminated, whereupon the Commitment shall be reduced to zero forthwith; and/or
(b) by notice to the Borrower declare that the Loan and all interest accrued and all other sums payable under the Security Documents have become due and payable, whereupon the same shall, immediately or in accordance with the terms of such notice, become due and payable without any further diligence, presentment, demand of payment, protest or notice or any other procedure from the Lender which are expressly waived by the Borrower; and/or
(c) put into force and exercise all or any of the rights, powers and remedies possessed by the Lender under this Agreement and/or under the Guarantee and/or under any other Security Document and/or as mortgagee of the Vessel, mortgagee, chargee or assignee or as the beneficiary of any other property right or any other security (as the case may be) of the assets charged or assigned to it under the Security Documents or otherwise (whether at law, by virtue of any of the Security Documents or otherwise).
9.3 Multiple notices; action without notice.  The Lender may serve notices under Clause 9.2(a) and (b) simultaneously or on different dates and it may take any action referred to in that Clause if no such notice is served or simultaneously with or at any time after service of both or either of such notices.
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9.4 Demand basis.  If, pursuant to Clause 9.2(b), the Lender declares the Loan to be due and payable on demand, the Lender may by written notice to the Borrower (a) call for repayment of the Loan on such date as may be specified whereupon the Loan shall become due and payable on the date so specified together with all interest accrued and all other sums payable under this Agreement or (b) withdraw such declaration with effect from the date specified in such notice.
9.5 Proof of Default.  It is agreed that (i) the non-payment of any sum of money in time will be proved conclusively by mere passage of time and (ii) the occurrence of this (non payment) shall be proved conclusively by a mere written statement of the Lender (save for manifest error).
9.6 Exclusion of Lender's liability. Neither the Lender nor any receiver or manager appointed by the Lender, shall have any liability to the Borrower or a Security Party:
(a) for any loss caused by an exercise of rights under, or enforcement of an Encumbrance created by, a Security Document or by any failure or delay to exercise such a right or to enforce such an Encumbrance; or
(b) as mortgagee in possession or otherwise, for any income or principal amount which might have been produced by or realised from any asset comprised in such an Encumbrance or for any reduction (however caused) in the value of such an asset,
except that this does not exempt the Lender or a receiver or manager from liability for losses shown to have been caused by the wilful misconduct of the Lender's own officers and employees or (as the case may be) such receiver's or manager's own partners or employees.
10. INDEMNITIES - EXPENSES – FEES
10.1 Indemnity. The Borrower shall on demand (and it is hereby expressly undertaken by the Borrower to) indemnify the Lender, without prejudice to any of the other rights of the Lender under any of the Security Documents, against any loss or expense which the Lender shall certify as sustained or incurred as a consequence of:
(a) any default in payment by any of the Security Parties of any sum under any of the Security Documents when due;
(b) the occurrence of any Event of Default which is continuing;
(c) any prepayment of the Loan or part thereof being made under Clauses 4.2(b) and 4.3, 8.5(a) or 12 or any other repayment of the Loan or part thereof being made otherwise than on an Interest Payment Date relating to the part of the Loan prepaid or repaid; or
(d) the Commitment not being advanced for any reason (excluding any default by the Lender) after the Drawdown Notice has been given,
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including, in any such case, but not limited to, any loss or expense sustained or incurred in maintaining or funding the Loan or any part thereof or in liquidating or re-employing deposits from third parties acquired to effect or maintain the Loan or any part thereof.
10.2 Expenses. The Borrower shall (and it is hereby expressly undertaken by the Borrower to) pay to the Lender on demand:
(a) Initial and Amendment expenses :  all expenses (including reasonable legal, printing and out-of-pocket expenses) reasonably incurred by the Lender in connection with the negotiation, preparation and execution of this Agreement and the other Security Documents and of any amendment or extension of or the granting of any waiver or consent under this Agreement and/or any of the Security Documents and/or in connection with any proposal by the Borrower to constitute additional security pursuant to sub-Clause 8.5(a), whether any such security shall in fact be constituted or not;
(b) Enforcement expenses :  all expenses (including reasonable legal and out-of-pocket expenses) incurred by the Lender in contemplation of, or otherwise in connection with, the enforcement of, or preservation of any rights under, this Agreement and/or any of the other Security Documents, or otherwise in respect of the moneys owing under this Agreement and/or any of the other Security Documents or the contemplation or preparation of the above, whether they have been effected or not;
(c) Legal costs :  the legal costs of the Lender's appointed lawyers, in respect of the preparation of this Agreement and the other Security Documents as well as the legal costs of the foreign lawyers (if these are available) in respect of the registration of the Security Documents or any search or opinion given to the Lender in respect of the Security Parties or the Vessel or the Security Documents. The said legal costs shall be due and payable on the Drawdown Date; and
(d) Other expenses :  any and all other Expenses.
All expenses payable pursuant to this Clause 10.2 shall be paid together with value added tax (if any) thereon.
10.3 Stamp duty.  The Borrower shall pay any and all stamp, registration and similar taxes or charges (including those payable by the Lender) imposed by governmental authorities in relation to this Agreement and any of the other Security Documents, and shall indemnify the Lender against any and all liabilities with respect to, or resulting from delay or omission on the part of the Borrower to pay such stamp taxes or charges.
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10.4 Environmental Indemnity.  The Borrower shall indemnify the Lender on demand and hold the Lender harmless from and against all costs, expenses, payments, charges, losses, demands, liabilities, actions, proceedings (whether civil or criminal) penalties, fines, damages, judgements, orders, sanctions or other outgoings of whatever nature which may be suffered, incurred or paid by, or made or asserted against the Lender at any time, whether before or after the repayment in full of principal and interest under this Agreement, relating to, or arising directly or indirectly in any manner or for any cause or reason out of an Environmental Claim made or asserted against the Lender if such Environmental Claim would not have been, or been capable of being, made or asserted against the Lender if it had not entered into any of the Security Documents and/or exercised any of its rights, powers and discretions thereby conferred and/or performed any of its obligations thereunder and/or been involved in any of the transactions contemplated by the Security Documents.
10.5 Currencies. If any sum due from the Borrower under any of the Security Documents or any order or judgement given or made in relation hereto has to be converted from the currency (the "first currency") in which the same is payable under the relevant Security Document or under such order or judgement into another currency (the "second currency") for the purpose of (i) making or filing a claim or proof against the Borrower or any other Security Party, as the case may be or (ii) obtaining an order or judgement in any court or other tribunal or (iii) enforcing any order or judgement given or made in relation to any of the Security Documents, the Borrower shall (and it is hereby expressly undertaken by the Borrower to) indemnify and hold harmless the Lender from and against any loss suffered as a result of any difference between (a) the rate of exchange used for such purpose to convert the sum in question from the first currency into the second currency and (b) the rate or rates of exchange at which the Lender may in the ordinary course of business purchase the first currency with the second currency upon receipt of a sum paid to it in satisfaction, in whole or in part, of any such order, judgement, claim or proof. The term "rate of exchange" includes any premium and costs of exchange payable in connection with the purchase of the first currency with the second currency.
10.6 Maintenance of the Indemnities. The indemnities contained in this Clause 10 shall apply irrespective of any indulgence granted to the Borrower or any other party from time to time and shall continue to be in full force and effect notwithstanding any payment in favour of the Lender and any sum due from the Borrower under this Clause 10 will be due as a separate debt and shall not be affected by judgement being obtained for any other sums due under any one or more of this Agreement, the other Security Documents and any other documents executed pursuant hereto or thereto.
10.7 MII costs .  The Borrower shall reimburse the Lender on demand for any and all costs incurred by the Lender (as conclusively certified by the Lender) in effecting and keeping effected a Mortgagee's Interest Insurance (herein " MII" ) which the Lender
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may at any time effect on such terms, for an amount not exceeding 110% of the Loan and with such insurers as shall from time to time be determined by the Lender, provided, however, that the Lender shall in its absolute discretion appoint and instruct in respect of any such MII policy the insurance brokers in respect of such Insurance and provided, further, that in the event that the Lender effects any such Insurance on the basis of any mortgagee's open cover, the Borrower shall pay on demand to the Lender its proportion of premium due in respect of the Vessel(s) for which such insurance cover has been effected by the Lender, and any certificate of the Lender in respect of any such premium due by the Borrower shall (save for manifest error) be conclusive and binding upon the Borrower.
10.8 Communications Indemnity. It is hereby agreed in connection with communications that:
(a) Express authority is hereby given by the Borrower to the Lender to accept all tested or untested communications given by facsimile, cable or otherwise, regarding any or all of the notices, requests, instructions or other communications under this Agreement, subject to any restrictions imposed by the Lender relating to such communications including, without limitation (if so required by the Lender), the obligation to confirm such communications by letter.
(b) The Borrower shall recognise any and all of the said notices, requests, instructions or other communications as legal, valid and binding, when these notices, requests, instructions or communications come from the fax number mentioned in Clause 16.1 or any other fax usually used by it or its managing company and are duly signed or in case of emails are duly sent by the person appearing to be sending such notice, request, instruction or other communication.
(c) The Borrower hereby assumes full responsibility for the execution of the said notices, requests, instructions or communications and promises and recognises that the Lender shall not be held responsible for any loss, liability or expense that may result from such notices, requests, instructions or other communications.  It is hereby undertaken by the Borrower to indemnify in full the Lender from and against all actions, proceedings, damages, costs, claims, demands, expenses and any and all direct and/or indirect losses which the Lender may suffer, incur or sustain by reason of the Lender following such notices, requests, instructions or communications.
(d) With regard to notices, requests, instructions or communications issued by electronic and/or mechanical processes (e.g. by facsimile), the risk of equipment malfunction, including, without limitation, paper shortage,
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transmission errors, omissions and distortions is assumed fully and accepted by the Borrower, save in case of the Lender's gross misconduct.
(e) The risks of misunderstandings and errors resulting from notices, requests, instructions or communications being given as mentioned above, are for the Borrower and the Lender will be indemnified in full pursuant to this Clause save in case of the Lender's gross misconduct.
(f) The Lender shall have the right to ask the Borrower to furnish any information the Lender may require to establish the authority of any person purporting to act on behalf of the Borrower for these notices, requests, instructions or communications but it is expressly agreed that there is no obligation for the Lender to do so.  The Lender shall be fully protected in, and the Lender shall incur no liability to the Borrower for acting upon the said notices, requests, instructions or communications which were believed by the Lender in good faith to have been given by the Borrower or by any of its authorised representative(s).
(g) It is undertaken by the Borrower to use its best endeavours to safeguard the function and the security of the electronic and mechanical appliance(s) such as fax(es) etc., as well as the code word list, if any, and to take adequate precautions to protect such code word list from loss and to prevent its terms becoming known to any persons not directly concerned with its use.  The Borrower shall hold the Lender harmless and indemnified from all claims, losses, damages and expenses which the Lender may incur by reason of the failure of the Borrower to comply with the obligations under this Clause.
10.9 Fee s.  The Borrower shall pay to the Lender   an arrangement fee in the amount equal to 0.50% of the amount of the Commitment (i.e. $168,750) payable in two equal instalments, as follows:
(a) the amount of $84,375, payable on the Drawdown Date; and
(b) the amount of $84, 375, payable six (6) months from the Drawdown Date
The arrangement fee referred to in this Clause 10.9 shall be payable by the Borrower to the Lender whether or not any part of the Commitment is ever advanced and shall be, in each case, non-refundable.
10.10 Gross-up in the event of a FATCA Deduction – Borrower
(a) If the Borrower is required to make a FATCA Deduction, the Borrower shall make that FATCA Deduction and any payment required in connection with that FATCA Deduction within the time allowed and in the minimum amount required by FATCA.
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(b) If a FATCA Deduction is required to be made by the Borrower, the amount of the payment due from the Borrower shall be increased to an amount which (after making any FATCA Deduction) leaves an amount equal to the payment which would have been due if no FATCA Deduction had been required.

(c) The Borrower shall promptly upon becoming aware that they/it must make a FATCA Deduction (or that there is any change in the rate or the basis of a FATCA Deduction) notify the Lender accordingly.

(d) Within thirty days of making either a FATCA Deduction or any payment required in connection with that FATCA Deduction, the Borrower shall deliver to the Lender evidence reasonably satisfactory to the Lender that the FATCA Deduction has been made or (as applicable) any appropriate payment paid to the relevant governmental or taxation authority.
10.11              FATCA status
(a) Subject to Clause 10.11(c) below, each party shall, within ten (10) Business Days of a reasonable request by another party:
(i)              confirm to that other party whether it is:
(aa) a FATCA Exempt Party; or
(bb) not a FATCA Exempt Party; and
(ii) supply to that other party such forms, documentation and other information relating to its status under FATCA (including its applicable passthru percentage or other information required under the Treasury Regulations or other official guidance including intergovernmental agreements) as that other party reasonably requests for the purposes of that other party's compliance with FATCA.
(b) If a party confirms to another party pursuant to Clause 10.11(a)(i) above that it is a FATCA Exempt Party and it subsequently becomes aware that it is not, or has ceased to be a FATCA Exempt Party, that party shall notify that other party reasonably promptly.
(c) Clause 10.11(a)(i) above shall not oblige the Lender to do anything which would or might in its reasonable opinion constitute a breach of:
(i) any law or regulation;
(ii) any policy of the Lender;
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(iii) any fiduciary duty; or
(iv) any duty of confidentiality.
(d) If a party fails to confirm its status or to supply forms, documentation or other information requested in accordance with Clause 10.11(a) above (including, for the avoidance of doubt, where Clause 10.11(c) above applies), then:
(i) if that party failed to confirm whether it is (and/or remains) a FATCA Exempt Party then such party shall be treated for the purposes of the Security Documents as if it is not a FATCA Exempt Party; and
(ii) if that party failed to confirm its applicable passthru percentage then such party shall be treated for the purposes of the Security Documents (and payments made thereunder) as if its applicable passthru percentage is 100%,
until (in each case) such time as the party in question provides the requested confirmation, forms, documentation or other information.
11. SECURITY, APPLICATION, AND SET-OFF
11.1 Securities.  As security for the due and punctual repayment of the Loan and payment of interest thereon as provided in this Agreement and of all other Outstanding Indebtedness, the Borrower shall ensure and procure that the following Security Documents are duly executed and, where required, registered in favour of the Lender in form and substance satisfactory to the Lender at the time specified herein or otherwise as required by the Lender and ensure that such security consists, on the Drawdown Date, of:
(a) the Mortgage duly registered over the Vessel through the Registry;
(b) the General Assignment;
(c) the Guarantee;
(d) the Accounts Pledge Agreement;
(e) any Charterparty Assignment; and
(f) the Manager's Undertaking(s).
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11.2 Maintenance of Securities.  It is hereby undertaken by the Borrower that the Security Documents shall both at the date of execution and delivery thereof and so long as any moneys are owing and/or due under this Agreement or under the other Security Documents be valid and binding obligations of the respective Security Parties thereto and rights of the Lender enforceable in accordance with their respective terms and that they will, at the expense of the Borrower, execute, sign, perfect and do any and every such further assurance, document, act, omission or thing as in the opinion of the Lender may be necessary or desirable for perfecting the security contemplated or constituted by the Security Documents.
11.3 Application of funds.
(a) Order of application :  All moneys received by the Lender under or pursuant to any of the Security Documents and expressed to be applicable in accordance with this Clause 11.3 shall be applied by the Lender in the following manner:
(i) Firstly, in or towards payment of Expenses and all sums other than principal or interest which may be due to the Lender under this Agreement and the other Security Documents or any of them at the time of application;
(ii) Secondly, in or towards payment of any default interest;
(iii) Thirdly, in or towards payment of any arrears of interest (other than default interest) due in respect of the Loan or any part thereof;
(iv) Fourthly , in or towards repayment of the Loan whether the same is due and payable or not;
(v) Fifthly , in or towards payment to the Lender for any loss suffered by reason of any such payment in respect of principal not being effected on an Interest Payment Date relating to the part of the Loan repaid; and
(vi) Sixthly , the surplus (if any) shall be paid to the Borrower or to whomsoever else shall be entitled to receive such surplus.
(b) Notice of variation of order of application :  The Lender may, by notice to the Borrower and the Security Parties, provide, at its sole discretion, for a different order of application from that set out in Clause 11.3 either as regards a specified sum or sums or as regards sums in a specified category or categories, without affecting the obligations of the Borrower to the Lender.

(c) Effect of variation notice :  The Lender may give notices under Clause 11.3(b) from time to time; and such a notice may be stated to apply not only to sums which may be received or recovered in the future, but also to any sum which
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has been received or recovered on or after the third Banking Day before the date on which the notice is served.

For the avoidance of doubt, in the event that such balance is insufficient to pay in full the whole of the Outstanding Indebtedness, the Lender shall be entitled to collect the shortfall from the Borrower or any other person liable therefor.
11.4 Set off.  Express authority is hereby given by the Borrower to the Lender without prejudice to any of the rights of the Lender at law, contractually or otherwise, at any time after a Default has occurred and without prior notice to the Borrower:

(a) to apply any credit balance standing upon any account of the Borrower with any branch of the Lender (including, without limitation, the Earnings Account and in whatever currency in or towards satisfaction of any sum due to the Lender from the Borrower under this Agreement and/or any of the other Security Documents;

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

(c) to combine and/or consolidate all or any accounts in the name of the Borrower with the Lender.

For all or any of the above purposes authority is hereby given to the Lender to purchase with the moneys standing to the credit of any such account or accounts such other currencies as may be necessary to effect such application.  The Lender shall not be obliged to exercise any right given by this Clause. The Lender shall notify the Borrower forthwith upon the exercise of any right of set‑off giving full details in relation thereto.

12. UNLAWFULNESS, INCREASED COSTS

12.1 Unlawfulness.  If any change in, or introduction of, any law, regulation or regulatory requirement or any request of any central bank, monetary, regulatory or other authority or any order of any court renders it unlawful or contrary to any such regulation, requirement, request or order for the Lender to advance the Commitment or the relevant part thereof (as the case may be) or to maintain or fund the Loan, notice shall be given promptly by the Lender to the Borrower whereupon the Commitment shall be reduced to zero and the Borrower shall be obliged to prepay the Loan in accordance with such notice, together with accrued interest thereon to the date of prepayment and all other sums payable by the Borrower under this Agreement.
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In any such event the Borrower and the Lender shall (as per the provisions of sub-Clause 3.6) negotiate in good faith (but without incurring any legal obligations) with a view to agreeing the terms for making the Loan available from another jurisdiction or providing the Loan from alternative sources.

12.2 Change of circumstances.  If any change in or in the interpretation of any applicable law or regulation, by any government or governmental authority or agency, makes it unlawful for the Lender to maintain or give effect to its obligations or to claim or receive any amount payable to the Lender under this Agreement, then the Lender may serve written notice on the Borrower declaring its obligations under this Agreement terminated in whole or in part, whereupon the same shall terminate forthwith and the Borrower will immediately repay the Loan and accrued interest to the date of prepayment together with all other Outstanding Indebtedness to the Lender pursuant to the terms of the notice.

12.3 Mitigation. If circumstances arise which would result in a notification under Clause 12.1 or 12.2, then, without in any way limiting the rights of the Lender under this Clause, the Lender shall use reasonable endeavours to transfer all the Lender's obligations, liabilities and rights under this agreement and the Security Documents to another office or financial institution not affected by the circumstances but the Lender shall not be under any obligation to take any such action if, in its opinion, to do so would or might: (a) have an adverse effect on its business, operations or financial condition; or (b) involve it in any activity which is unlawful or prohibited or any activity that is contrary to, or inconsistent with, any regulation; or involve it in any expense (unless indemnified to its satisfaction) or tax disadvantage.

12.4 Increased Cost.   If, as a result of (a) any change in, or in the interpretation or application of, or the introduction of, any law or any regulation, request or requirement (whether or not having the force of law, bu t, i f not having the force of law, with which the Lender or, as the case may be, its holding company habitually complies), including (without limitation) those relating to Taxation, capital adequacy, liquidity, reserve assets, cash ratio deposits and special deposits or other banking or monetary controls or r equi rements which affects the manner in which the Lender allocates capital resources to its obligations he reunder and those ( including, but not limited to, "Basel III") which shall replace, amend and/or supplement the provisions set out in the statement (as in effect as of the date of this Agreement) of the Basel II committee on banking supervision dated July 1988 and entitled "international convergence of capital measurement and capital structures" or any amendatory or substitute agreement thereof, or (b) compliance by the Lender with any request from any applicable fiscal or monetary authority (whether or not having the force of law but, if not having the force of law, with which the Lender habitually complies) or (c) any other set of circumstances affecting the Lender :
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(a) the cost to the Lender of making the Commitment or any part thereof or maintaining or funding the Loan is increased or an additional cost on the Lender is imposed; and/or

(b) subject the Lender to Taxes or the basis of Taxation (other than Taxes or Taxation on the overall net income of the Lender) in respect of any payments to the Lender under this Agreement or any of the other Security Documents is changed; and/or

(c) the amount payable or the effective return to the Lender under any of the Security Documents is reduced; and/or

(d) the Lender's rate of return on its overall capital by reason of a change in the manner in which it is required to allocate capital resources to the Lender's obligations under any of the Security Document is reduced; and/or

(e) require the Lender to make a payment or forgo a return on or calculated by references to any amount received or receivable by it under any of the Security Documents is required; and/or

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

then and in each case (subject to Clause 12.8) the Borrower shall pay to the Lender, from time to time, upon demand, such additional moneys as shall indemnify the Lender for any increased or additional cost, reduction, payment, foregone return or loss whatsoever.

12.5 Claim for increased cost.  The Lender will promptly notify the Borrower of any intention to claim indemnification pursuant to Clause 12.3 and such notification will be a conclusive and full evidence binding on the Borrower as to the amount of any increased cost or reduction and the method of calculating the same and the Borrower shall be allowed to rebut such evidence by any means of evidence save for witness.  A claim under Clause 12.3 may be made at any time and must be discharged by the Borrower within seven (7) days of demand.  It shall not be a defence to a claim by the Lender under this Clause 12.3 that any increased cost or reduction could have been avoided by the Lender.  Any amount due from the Borrower under Clause 12.3 shall be due as a separate debt and shall not be affected by judgement being obtained for any other sums due under or in respect of this Agreement.
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12.6 Option to prepay.   If any additional amounts are required to be paid by the Borrower to the Lender by virtue of Clause 12.3, the Borrower shall be entitled, on giving the Lender not less than fourteen (14) days prior notice in writing, to prepay (without premium or penalty) the Loan and accrued interest thereon, together with all other Outstanding Indebtedness, on the next Repayment Date. Any such notice, once given, shall be irrevocable.

12.7 Exception.   Nothing in Clause 12.3 shall entitle the Lender to receive any amount in respect of compensation for any such liability to Taxes, increased or additional cost, reduction, payment, foregone return or loss to the extent that the same is subject of an additional payment under Clause 5.3.

12.8 Central Bank or European Central Bank reserve requirements indemnity.   The Borrower shall on demand promptly indemnify the Lender against any cost incurred or loss suffered by the Lender as a result of its complying with the minimum reserve requirements of the European Central Bank and/or with respect to maintaining required reserves with the relevant national Central Bank to the extent that such compliance relates to the Commitment or deposits obtained by it to fund the whole or part of the Loan and to the extent such cost or loss is not recoverable by the Lender under clause 12.2.

13. EARNINGS ACCOUNT

13.1 General.  The Borrower undertakes with the Lender that it will:

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

(b) procure that all moneys payable to the Borrower in respect of the Earnings of the Vessel shall, unless and until the Lender directs to the contrary pursuant to the General Assignment, be paid to the Earnings Account, free from Encumbrances and rights of set off other than those created by or under the Security Documents.

13.2 Earnings Account. Unless and until an Event of Default shall occur (whereupon the provisions of Clause 11.3 shall be applicable) and subject to the terms and conditions of the Accounts Pledge Agreement no monies shall be withdrawn from the Earnings Account save as hereinafter provided. Subject to Clause 9, all monies paid to the Earnings Account after discharging the costs (if any) incurred by the Lender, in collecting such monies, shall be applied by the Lender as follows:

(a) firstly : in payment of any and all sums whatsoever due and payable to the Lender hereunder (such sums to be paid in such order as the Lender may in its sole discretion elect); and
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(b) secondly : any credit balance shall be available to the Borrower to be used for any purpose not inconsistent with the Borrower's other obligations under this Agreement, including, without limitation, for the purpose of making any payments in connection with the operation and maintenance of the Vessel and for all other purposes permitted under this Agreement.

13.3 Interest. Any amounts for the time being standing to the credit of the Earnings Account shall bear interest at the rate from time to time offered by the Lender to its customers for Dollar deposits of similar amounts and for periods similar to those for which such amounts are likely to remain standing to the credit of the Earnings Account. Such interest shall, provided that (a) the foregoing provisions of this Clause 13.2 shall have been complied with and (b) no Event of Default (or event which, with the giving of notice and/or lapse of time or other applicable condition, might constitute an Event of Default) shall have occurred and is continuing , be released to the Borrower .

13.4 Drawings from Earnings Account . The Borrower shall not be entitled to draw from the Earnings Account if a Continuing Event of Default has occurred.

13.5 Sufficient monies. The Borrower hereby warrants that sufficient monies to meet the next Repayment Instalment plus interest thereon will be accumulated each and every month in the Earnings Account.

13.6 Obligations unaffected. Nothing herein contained shall be deemed to affect the absolute obligation of the Borrower to pay interest on and to repay the Loan as provided in Clauses 3 and 4 or shall constitute a manner or postponement thereof.

13.7 Relocation of Earnings Account.  The Borrower, at its own costs and expenses, undertakes with the Lender to comply with or cause to be complied with any written requirement of the Lender from time to time as to the location or re-location of the Earnings Account and will from time to time enter into such documentation as the Lender may require in order to create or maintain a security interest in the Earnings Account.

13.8 Set-off.  Upon the occurrence of an Event of Default or at any time thereafter the Lender shall be entitled to set off and apply all sums standing to the credit of the Earnings Account and accrued interest (if any) without notice to the Borrower in the manner specified in Clause 11.3 (and express and irrevocable authority is hereby given by the Borrower to the Lender so to set off and apply the same and the Lender shall be released to the extent of such set off and application).
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13.9 No Encumbrances. The Borrower hereby covenants with the Lender that the Earnings Account and any moneys therein shall not be charged, assigned, transferred or pledged nor shall there be granted by the Borrower or suffered to arise any third party rights over or against the whole or any part of the Earnings Account other than in favour of the Lender.

13.10 Operation of Earnings Account. The Earnings Account shall be operated in accordance with the Lender's usual terms and conditions (full knowledge of which the Borrower hereby acknowledges) and subject to the Lender's usual charges levied on such accounts and/or transactions conducted on such accounts (as from time to time notified by the Lender to the Borrower).

13.11 Release.  Upon payment in full of all principal, interest and all other amounts due to the Lender under the terms of this Agreement and the other Security Documents, any balance then standing to the credit of the Earnings Account shall be released and paid to the Borrower or to whomsoever else may be entitled to receive such balance.

14. ASSIGNMENT, TRANSFER, PARTICIPATION, LENDING OFFICE

14.1 Binding Effect.  This Agreement shall be binding upon and inure to the benefit of the Lender and the Borrower and their respective successors and permitted assigns.
14.2 No Assignment by the Borrower and other Security Parties.  Neither the Borrower nor any other Security Parties may assign or transfer any of its rights and/or obligations under this Agreement or any of the other Security Documents or any documents executed pursuant to this Agreement and/or the other Security Documents.
14.3 Assignment by the Lender.  The Lender may at any time without the consent of, or consultation with, but after giving 15-day notice to the Borrower, cause all or any part of its rights, benefits and/or obligations under this Agreement and the other Security Documents to be assigned or transferred to (i) another branch, Subsidiary or affiliate of, or company controlled by, the Lender, (ii) another first class international bank or financial institution, insurer, social security fund, pension fund, capital investment company, financial intermediary or special purpose vehicle associated to any of them (iii) a trust corporation, fund or other person which regularly engaged in or established for the purpose of making, purchasing or investing in loans, securities or other financial assets of which are managed or serviced by the Lender (in each case an " Assignee " or a " Transferee ").
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The Lender may sub-participate all or any part of its rights, benefits and/or obligations under this Agreement and the other Security Documents without the consent of, or consultation with or notice to the Borrower and the other Security Parties; provided that the Assignee or Transferee, shall deliver to the Lender such undertaking as the Lender may approve, whereby it becomes bound by the terms of this Agreement and agrees to perform all or, as the case may be, part of the Lender's obligations under this Agreement. Any cost of such assignment or   transfer or granting sub-participation shall be for the account of the Lender and/or the assignee, transferee or sub-participant unless any such assignment, transfer or sub-participation is undertaken at the request of the Borrower in which case any cost arising therefrom shall be for the account of the Borrower.
14.4 Documenting assignments and transfers.  If the Lender assigns, transfers or in any other manner grants participation in respect of all or any part of its rights or benefits or transfers all or any of its obligations as provided in this Clause 14.4 the Borrower undertakes, immediately on being requested to do so by the Lender, to enter at the expense of the Lender into and procure that each Security Party enters into such documents as may be necessary or desirable to transfer to the Assignee, Transferee or participant all or the relevant part of the interest of the Lender in the Security Documents and all relevant references in this Agreement to the Lender shall thereafter be construed as a reference to the Lender and/or assignee, transferee or participant of the Lender to the extent of their respective interests and, in the case of a transfer of all or part of the obligations of the Lender, the Borrower shall thereafter look only to the Assignee, Transferee or participant in respect of that proportion of the obligations of the Lender under this Agreement assumed by such assignee, transferee or participant. The Borrower hereby expressly consents to any subsequent transfer of the rights and obligations of the Lender and undertake that they shall join in and execute such supplemental or substitute agreements as may be necessary to enable the Lender to assign and/or transfer and/or grant participation in respect of its rights and obligations to another branch or to one or more banks or financial institutions in a syndicate or otherwise. The cost of any such assignment shall be borne by the Lender and/or the relevant Assignee or Transferee.
14.5 Disclosure of information.  The Lender may disclose to a prospective assignee, substitute or transferee or to any other person who may propose entering into contractual relations with the Lender in relation to this Agreement such information about the Borrower as the Lender shall consider appropriate if the Lender first procures that the relevant prospective assignee, substitute or transferee or other person (such person together with any prospective assignee, substitute or transferee being hereinafter described as the " Prospective Assignee ") shall undertake to the Borrower to keep secret and confidential and, without the consent of the Borrower, disclose to any third party any of the information, reports or documents supplied by the Lender provided, however, that the Prospective Assignee shall be entitled to disclose such information, reports or documents in the following situations:
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(a) in relation to any proceedings arising out of this Agreement or the other Security Documents to the extent considered necessary by the Prospective Assignee to protect its interest; or
(b) pursuant to a court order relating to discovery or otherwise; or
(c) pursuant to any law or regulation or to any fiscal, monetary, tax, governmental or other competent authority; or
(d) to its auditors, legal or other professional advisers.
In addition the Prospective Assignee shall be entitled to disclose or use any such information, reports or documents if the information contained therein shall have emanated in conditions free from confidentiality, bona fide from some person other than the Lender or the Borrower.
14.6 Process of personal data. The Borrower hereby expressly gives its consent to the communication for process in the meaning of law 2472/97 by the Lender of its personal data contained in this Agreement, the Security Documents, in the Earnings Account for onwards communication thereof to an inter-banking database record called "Teiresias" kept and solely used by banks and financial institutions. The Borrower is entitled at any relevant time throughout the Security Period to revoke its consent given hereunder by written notice addressed to the Lender and the Registrar of "Teiresias A.E." at 2, Alamanas street, 15125 Maroussi, Athens, Greece.
14.7 Changes in constitution or reorganisation of the Lender.  For the avoidance of doubt and without prejudice to the provisions of Clause 14.1, this Agreement shall remain binding on the Borrower and the other Security Parties notwithstanding any change in the constitution of the Lender or its absorption in, or amalgamation with, or the acquisition of all or part of its undertaking or assets by, any other person, or any reconstruction or reorganisation of any kind, to the intent that this Agreement shall remain valid and effective in all respects in favour of any Assignee, Transferee or other successor in title of the Lender in the same manner as if such Assignee, Transferee or other successor in title had been named in this Agreement as a party instead of, or in addition to, the Lender.
14.8 Securitisation. The Lender may include all or any part of the Loan in a securitisation (or similar transaction) without the consent of, or consultation with, but after giving 30-day notice to the Borrower. The Borrower will assist the Lender as necessary to achieve a successful securitisation (or similar transaction) provided that the Borrower shall not be required to bear any third party costs related to any such securitisation (or similar transaction) and need only provide any such information which any third parties may reasonably require.
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14.9 Lending Office.  The Lender shall lend through its office at the address specified in the preamble of this Agreement or through any other office of the Lender selected from time to time by it through which the Lender wishes to lend for the purposes of this Agreement.  If the office through which the Lender is lending is changed pursuant to this Clause 14.9, the Lender shall notify the Borrower promptly of such change and upon notification of any such transfer, the word "Lender" in this Agreement and in the other Security Documents shall mean the Lender, acting through such branch or branches and the terms and provisions of this Agreement and of the other Security Documents shall be construed accordingly.
15. MISCELLANEOUS
15.1 Cumulative Remedies.  The rights and remedies of the Lender contained in this Agreement and the other Security Documents are cumulative and not neither exclusive of each other nor of any other rights or remedies conferred by law.
15.2 No implied waivers.  No failure, delay or omission by the Lender to exercise any right, remedy or power vested in the Lender under this Agreement and/or the other Security Documents or by law shall impair such right or power, or be construed as a waiver of, or as an acquiescence in any default by the Borrower, nor shall any single or partial exercise by the Lender of any power, right or remedy preclude any other or further exercise thereof or the exercise of any other power, right or remedy.  In the event of the Lender on any occasion agreeing to waive any such right, remedy or power, or consenting to any departure from the strict application of the provisions of this Agreement or of any other Security Document, such waiver shall not in any way prejudice or affect the powers conferred upon the Lender under this Agreement and the other Security Documents or the right of the Lender thereafter to act strictly in accordance with the terms of this Agreement and the other Security Documents.  No modification or waiver by the Lender of any provision of this Agreement or of any of the other Security Documents nor any consent by the Lender to any departure therefrom by any Security Party shall be effective unless the same shall be in writing and then shall only be effective in the specific case and for the specific purpose for which given.  No notice to or demand on any such party in any such case shall entitle such party to any other or further notice or demand in similar or other circumstances.
15.3 Integration of Terms.  This Agreement contains the entire agreement of the parties and its provisions supersede the provisions of the Commitment Letter (save for the provisions thereof which relate to fees) any and all other prior correspondence and oral negotiation by the parties in respect of the matters regulated by this Agreement.
15.4 Amendments. This Agreement and any other Security Documents shall not be amended or varied in their respective terms by any oral agreement or representation or in any other manner other than by an instrument in writing of even date herewith or subsequent hereto executed by or on behalf of the parties hereto or thereto.
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15.5 Invalidity of Terms.  In the event of any provision contained in one or more of this Agreement, the other Security Documents and any other documents executed pursuant hereto or thereto being invalid, illegal or unenforceable in any respect under any applicable law in any jurisdiction whatsoever, such provision shall be ineffective as to that jurisdiction only without affecting the remaining provisions hereof or thereof.  If, however, this event becomes known to the Lender prior to the drawdown of the Commitment or of any part thereof the Lender shall be entitled to refuse drawdown until this discrepancy is remedied.  In case that the invalidity of a part results in the invalidity of the whole Agreement, it is hereby agreed that there will exist a separate obligation of the Borrower for the prompt payment to the Lender of all the Outstanding Indebtedness.  Where, however, the provisions of any such applicable law may be waived, they are hereby waived by the parties hereto to the full extent permitted by the law to the intent that this Agreement, the other Security Documents and any other documents executed pursuant hereto or thereto shall be deemed to be valid binding and enforceable in accordance with their respective terms.
15.6 Inconsistency of Terms.  In the event of any inconsistency between the provisions of this Agreement and the provisions of any other Security Document the provisions of this Agreement shall prevail.
15.7 Language and genuineness of documents
(a) Language :  All certificates, instruments and other documents to be delivered under or supplied in connection with this Agreement or any of the other Security Documents shall be in the Greek or the English language (or such other language as the Lender shall agree) or shall be accompanied by a certified Greek translation upon which the Lender shall be entitled to rely.
(b) Certification of documents :  Any copies of documents delivered to the Lender shall be duly certified as true, complete and accurate copies by appropriate authorities or legal counsel practising in Greece or otherwise as will be acceptable to the Lender at the sole discretion of the Lender.
(c) Certification of signature :  Signatures on Board or shareholder resolutions, Secretary's certificates and any other documents are, at the discretion of the Lender, to be verified for their genuineness by appropriate Consul or other competent authority.
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15.8 Recourse to other security.  The Lender shall not be obliged to make any claim or demand or to resort to any Security Document or other means of payment now or hereafter held by or available to it for enforcing this Agreement or any of the Security Documents against the Security Parties (or any of them) or any other person liable and no action taken or omitted by the Lender in connection with any such Security Document or other means of payment will discharge, reduce, prejudice or affect the liability of any Security Party under this Agreement and the other Security Documents to which it is, or is to be, a party.
15.9 Further assurances.  The Borrower undertakes that the Security Documents shall both at the date of execution and delivery thereof and so long as any moneys are owing under any of the Security Documents be valid and binding obligations of the respective parties thereto and enforceable in accordance with their respective terms and that it will, at its expense, execute, sign, perfect and do, and will procure the execution, signing, perfecting and doing by each of the other Security Parties of, any and every such further assurance, document, act or thing as in the reasonable opinion of the Lender may be necessary or desirable for perfecting the security contemplated or constituted by the Security Documents.
15.10 Process of personal data.  The Borrower hereby expressly gives its consent to the communication for process in the meaning of law 2472/97 by the Lender of its personal data contained in this Agreement, the Security Documents, in the Earnings Accounts for onwards communication thereof to an inter-banking database record called "Teiresias" kept and solely used by banks and financial institutions. The Borrower is entitled at any relevant time throughout the Security Period to revoke its consent given hereunder by written notice addressed to the Lender and the Registrar of "Teiresias A.E." at 2, Alamanas street, 15125 Maroussi, Athens, Greece.
15.11 Conflicts.  In the event of any conflict between this Agreement and any of the other Security Documents and the provisions of this Agreement shall prevail.
15.12 Confidentiality

(a) Each of the parties hereto agrees and undertakes to keep confidential any documentation and any confidential information concerning the business, affairs, directors or employees of the other which comes into its possession in connection with this Agreement and not to use any such documentation, information for any purpose other than for which it was provided.

(b) The Borrower acknowledges and accepts that the Lender may be required by law, regulation or regulatory requirement or any request of any central bank or any court order to disclose information and deliver documentation relating to the Borrower and the transactions and matters in relation to this Agreement and/or the other Security Documents to governmental or regulatory agencies and authorities.
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(c) The Borrower acknowledges and accepts that in case of occurrence of any of the Events of Default the Lender may disclose information and deliver documentation relating to the Borrower and the transactions and matters in relation to this Agreement and/or the other Security Documents to third parties to the extent that this is necessary for the enforcement or the contemplation of enforcement of the Lender's rights or for any other purpose for which in the opinion of the Lender, such disclosure would be useful or appropriate for the interests of the Lender or otherwise and the Borrower expressly authorises any such disclosure and delivery.

(d) The Borrower acknowledges and accepts that the Lender may be prohibited from disclosing information to the Borrower by reason of law or duties of confidentiality owed or to be owed to other persons.

16. NOTICES
16.1 Notices.  Every notice, request, demand or other communication under the Agreement or, unless otherwise provided therein, under any of the other Security Documents shall:
(a) be in writing delivered personally or be first-class prepaid letter (airmail if available), or shall be served through a process server or subject to Clause 10.8 by fax;
(b) be deemed to have been received, subject as otherwise provided in this Agreement or the relevant Security Document, in the case of a fax, at the time of dispatch as per transmission report ( provided, in either case, that if the date of despatch is not a business day in the country of the addressee it shall be deemed to have been received at the opening of business on the next such business day), and in the case of a letter when delivered or served personally or five (5) days after it has been put into the post; and
(c) be sent:
(i) if to be sent to any Security Party, to:
c/o Seanergy Maritime Holdings Corp. ,
16 Grigoriou Lambraki Street,
Glyfada, Greece
Facsimile No: +30 210 9638404
Attention:  Chief Executive Officer
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( ii ) in the case of the Lender at:
Alpha Bank A.E.
93 Akti Miaouli, Piraeus, Greece
Fax No. +30 210 42 90 268
Attention: The Manager
or to such other person, address or fax number as is notified by the relevant Security Party or the Lender (as the case may be) to the other parties to this Agreement and, in the case of any such change of address or fax number notified to the Lender, the same shall not become effective until notice of such change is actually received by the Lender and a copy of the notice of such change is signed by the Lender.

16.2 Process Agent.  Mrs. Theodora Mitropetrou, an Attorney-at-Law, presently of 16 Grigoriou Lambraki Street , Glyfada, Greece (hereinafter called the " Process Agent for Greek Proceedings ") is hereby appointed by the Borrower as agent to accept service, upon whom any judicial process in respect of proceedings in Greece may be served and any process notice, judicial or extra-judicial request, demand for payment, payment order, foreclosure proceedings, notarial announcement of claim, notice, request, demand or other communication under this Agreement or any of the Security Documents.  In the event that the Process Agent for Greek Proceedings (or any substitute process agent notified to the Lender in accordance with the foregoing) cannot be found at the address specified above (or, as the case may be, notified to the Lender), which will be conclusively proved by a deed of a process server to the effect that the Process Agent  for Greek Proceedings was not found at such address, any process notice, judicial or extra-judicial request, demand for payment, payment order, foreclosure proceedings, notarial announcement of claim or other communication to be sent to any Security Party may be validly served/notified in accordance with the relevant provisions of the Hellenic Code on Civil Procedure.

17. LAW AND JURISDICTION

17.1 Law

(a) This Agreement and any non-contractual obligations connected with it shall be governed by and construed in accordance with English Law.

(b) For the purposes of enforcement in Greece, it is hereby expressly agreed that English law as the governing law of this Agreement will be proved by an affidavit of a solicitor from an English law firm to be appointed by the Lender and the said affidavit shall constitute full and conclusive evidence binding on the Borrower but the Borrower shall be allowed to rebut such evidence save for witness.
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17.2 Jurisdiction .

(a) The courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement or any non-contractual obligations connected with it (including a dispute regarding the existence, validity or termination of this Agreement) (a " Dispute "). The Borrower irrevocably and unconditionally submits to the jurisdiction of such courts.

(b) The Parties agree that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly no Party will argue to the contrary and waives any objections to the inconvenience of England as a forum.

(c) This Clause 17.2 is for the benefit of the Lender only.  As a result, the Lender shall not be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, the Lender may take concurrent proceedings in any number of jurisdictions.
17.3 Process Agent for English Proceedings .   Without prejudice to any other mode of service allowed under any relevant law the Borrower irrevocably designates, appoints and empowers Messrs. E.J.C. Album, Solicitors , Landmark House, 190 Willifield Way, London, NW11 6YA, England (attention Mr. Edward Album, Fax:  +44 (0) 20 8457 5558, E-mail:  ejca@mitgr.com ) (hereinafter called the " Process Agent for English Proceedings "), to receive for it and on its behalf, service of process issued out of the English courts in relation to any proceedings before the English courts in connection with any Security Document, provided, however, that :

(a) the Borrower hereby agrees and undertakes to maintain a Process Agent for English Proceedings throughout the Security Period and hereby agrees that in the event that if any Process Agent for English Proceedings is unable for any reason to act as agent for service of process, the Borrower must immediately (and in any event within ten (10) days of such event taking place) appoint another agent on terms acceptable to the Lender.  Failing this, the Lender may appoint for this purpose a substitute Process Agent for English Proceedings and the Lender is hereby irrevocably authorised to effect such appointment on Borrower's behalf. The appointment of such Process Agent for English Proceedings shall be valid and binding from the date notice of such appointment is given by the Lender to the Borrower in accordance with Clause 16.1; and

(b) the Borrower hereby agrees that failure by a Process Agent for English Proceedings to notify the Borrower of the process will not invalidate the proceedings concerned.
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17.4 Proceedings in any other country.  If it is decided by the Lender that any such proceedings should be commenced in any other country, then any objections as to the jurisdiction or any claim as to the inconvenience of the forum is hereby waived by the Borrower and it is agreed and undertaken by the Borrower to instruct lawyers in that country to accept service of legal process and not to contest the validity of such proceedings as far as the jurisdiction of the court or courts involved is concerned and the Borrower agrees that any judgment or order obtained in an English court shall be conclusive and binding on the Borrower and shall be enforceable without review in the courts of any other jurisdiction.

17.5 Third Party Rights.  No term of this Agreement is enforceable under the Contracts (Rights of Third Parties) Act 1999 by a person who is not a party to this Agreement.

17.6 Meaning of "proceedings".  In this Clause 17 " proceedings " means proceedings of any kind, including an application for a provisional or protective measure.

IN WITNESS WHEREOF the parties hereto have caused this Agreement to be duly executed on the date stated at the beginning of this Agreement .








[ Intentionally left blank ]
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EXECUTION PAGE

SIGNED by
Mrs. Theodora Mitropetrou
for and on behalf of
SQUIRE OCEAN NAVIGATION CO.
of Liberia, in the presence of:
)
)
)
)
)
 
/s/ Mrs. Theodora Mitropetrou
             Attorney-in-fact


Witness:  /s/ Christos Magklaras
Name:   Christos Magklaras
Address: 13 Defteras Merarchias
 Piraeus, Greece
Occupation:  Attorney-at-Law & Solicitor


SIGNED by
Konstantinos Sotiriou and
Mrs. Christina Aroni
for and on behalf of
ALPHA BANK A.E.,
in the presence of:
)
)
)
)
)
)
/s/ Konstantinos Sotiriou
     Authorised Officer
 
/s/ Christina Aroni ______
     Authorised Officer


Witness: /s/ Christos Magklaras
Name:   Christos Magklaras
Address: 13 Defteras Merarchias
 Piraeus, Greece
Occupation:  Attorney-at-Law & Solicitor
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SCHEDULE 1
FORM OF DRAWDOWN NOTICE
(referred to in Clause 2.2)
To: ALPHA BANK A.E.
93 Akti Miaouli,
Piraeus, Greece
(the " Lender ")
 [ l ] November, 2015
Re: US$33,750,173 Loan Agreement dated [ l ] November, 2015 made between (A) SQUIRE OCEAN NAVIGATION CO. ,   of Liberia   (the " Borrower ") and (B) the Lender (the " Loan Agreement ").
We refer to the Loan Agreement and hereby give you notice that we wish to draw the Commitment in the amount of $([ l ]) (Dollars [ l ]) on [ l ] November, 2015 and we select a first Interest Period in respect of the Loan of [ l ] months. The funds should be credited to ([ l ][ l ] [name and number of account] [ l ]) with  [ l ].
We confirm that:
(a) no event or circumstance has occurred and is continuing which constitutes a Default;
(b) the representations and warranties contained in Clause 6 of the Loan Agreement and the representations and warranties contained in each of the other Security Documents are true and correct at the date hereof as if made with respect to the facts and circumstances existing at such date;
(c) the borrowing to be effected by the drawing down of the Commitment will be within our corporate powers, has been validly authorised by appropriate corporate action and will not cause any limit on our borrowings (whether imposed by statute, regulation, agreement or otherwise) to be exceeded; and
(d) to the best of our knowledge and belief there has been no material adverse change in our financial position or in the consolidated financial position of ourselves and the other Security Parties from that described by us to the Lender in the negotiation of the Loan Agreement.
We also instruct the Lender to deduct from the Loan proceeds the amount of the fees referred to in Clause 10.9 (in case has not been paid).
86
Words and expressions defined in the Loan Agreement shall have the same meanings when used herein.
SIGNED by
Mr.
for and on behalf of
the Borrower
SQUIRE OCEAN NAVIGATION CO.
of Liberia, in the presence of:
)
)
)
)
)
)
 
___________________________
                   Attorney-in-fact



Witness:  ___________________________
Name: Theodora Mitropetrou
Address: Grigoriou Lambraki 16
 Glyfada, Greece
Occupation:  Attorney-at-Law
87
Schedule 2

Schedule 1                            Form of Insurance Letter

To: [P&I Club]
[ l ]
[ l ]

From: SQUIRE OCEAN NAVIGATION CO.
80 Broad Street
Monrovia, Liberia

[ l ] 20[ l ]
Dear Sirs
m.v. " SQUIRESHIP " (the "Vessel" )
We are obtaining loan finance from Alpha Bank A.E. (the " Lender ") secured ( inter alia ) by a first ship mortgage over the Vessel.  The Vessel's insurances will also be assigned to the Lender.
You are hereby authorised to send a copy of the Certificate of Entry for the Vessel to the Lender, c/o their lawyers, namely, Theo V. Sioufas & Co. Law Offices , of 13 Defteras Merarchias Street, 185 35 Piraeus, Greece.  Further, you are also irrevocably authorised to provide the Lender from time to time with any other information whatsoever which they may require relating to the entry of the Vessel in the association.
This letter is governed by, and shall be construed in accordance with, English law.



_____________________________
For and on behalf of
SQUIRE OCEAN NAVIGATION CO.
88
Schedule 3
Form of Compliance Certificate
(referred to in Clause 8.6(d))
To: ALPHA BANK A.E.
93 Akti Miaouli,
Piraeus, Greece
(the " Lender ")
From: SQUIRE OCEAN NAVIGATION CO. ,
of Liberia
(the "Borrower" )
Dated: [ l ], 2018


RE:              Loan Agreement dated [ l ] November, 2015 made between (1) the Borrower and (2) the Lender, in respect of a loan facility of up to US$33,750,000 (the " Loan Agreement ").
Terms defined in the Loan Agreement shall have the same meaning when used herein.
I/We [ l ], [ l ] and   [ l ], [each] being  the Chief Financial Officer of each of the Borrower and Seanergy Maritime Holdings Corp. ,   of the Marshall Islands (the "Guarantor" ), refer to Clause 8.6(d) of the Loan Agreement and hereby certify that, during the Accounting Period 01 . […].20[…] to 3... […].20[…] and on the date hereof:

1. Financial Covenants:

(a) the Leverage Ratio has not been and at the date hereof is not higher than 0.75:1; and

(b) the consolidated interest cover ratio (EBITDA to Net Interest Expense) is not lower than 2:1;

(c) the Borrower maintains with the Lender minimum free liquidity in an amount not less than the Borrower's Debt Service of the next semester as free liquidity; and

(d) the Guarantor maintains minimum free liquidity in an amount equal to $500,000 per Fleet Vessel.

2. Default:

[No Default has occurred and is continuing]

or

[The following Default has occurred and in continuing: [provide details of Default].  [The following steps are being taken to remedy it: [provide details of steps being taken to remedy Default]].
89
We attach hereto the necessary documents supported by calculations setting out in reasonable detail the materials underling the statements made in this Compliance Certificate.
Signed: ___________________
Name: [………………………….]
Title: Chief Financial Officer
90

 
Exhibit 4.41
 
 
Dated 2 December 2015
 
US$39,412,000
 
TERM LOAN FACILITY
 
CHAMPION OCEAN NAVIGATION CO.
as Borrower
 
SEANERGY MARITIME HOLDINGS CORP.
as Guarantor

and
 
NATIXIS
as Original Lender
 
FACILITY AGREEMENT
 
relating to the part financing of the acquisition cost of
m.v. "MAXIMUS'' (tbr "CHAMPIONSHIP")
 
 
 
 
 
 
 
 
 
 
WATSON FARLEY
&
WATSON
 
 
 
Index
 
Clause
Page
   
Section 1 Interpretation
2
1
Definitions and Interpretation
2
Section 2 The Facility
20
2
The Facility
20
3
Purpose
20
4
Conditions of Utilisation
20
Section 3 Utilisation
22
5
Utilisation
22
Section 4 Repayment, Prepayment and Cancellation
24
6
Repayment
24
7
Prepayment and Cancellation
24
Section 5 Costs of Utilisation
26
8
Interest
26
9
Interest Periods
27
10
Changes to the Calculation of Interest
28
Section 6 Additional Payment Obligations
30
11
Tax Gross Up and Indemnities
30
12
Increased Costs
33
13
Other Indemnities
34
14
Costs and Expenses
37
Section 7 Guarantee
39
15
Guarantee and Indemnity
39
Section 8 Representations, Undertakings and Events of Default
42
16
Representations
42
17
Information Undertakings
48
18
Financial Covenants
50
19
General Undertakings
52
20
Insurance Undertakings
59
21
MOA Undertakings
63
22
Ship Undertakings
64
23
Security Cover
69
24
Application of Earnings
70
25
Events of Default
70
Section 9 Changes to the Parties
75
26
Changes to the Lender
75
27
Changes to the Obligors
76
28
The Reference Banks
76
Section 10 Administration
77
29
Payment Mechanics
77
30
Set-Off
78
31
Conduct of Business by the Lender
79
32
Notices
79
33
Calculations and Certificates
80
34
Partial Invalidity
81
35
Remedies and Waivers
81
36
Settlement or Discharge Conditional
81
37
Irrevocable Payment
81
38
Confidential Information
81
39
Confidentiality of Funding Rates and Reference Bank Quotations
84
40
Counterparts
85
Section 11 Governing Law and Enforcement
86
 
 

41
Governing Law
86
42
Enforcement
86
Schedule 1 The Parties
87
Schedule 2 Conditions Precedent
89
Schedule 3 Requests
93
Schedule 4 Form of Compliance Certificate
95
Schedule 5 Details of the Ship
96
Schedule 6 Timetables
97
Execution Pages
98
 

THIS AGREEMENT is made on 2 December 2015
 
PARTIES
 
(1) CHAMPION OCEAN NAVIGATION CO. , a corporation incorporated in the Republic of Liberia whose registered office is at 80 Broad Street, Monrovia, Liberia as borrower (the " Borrower ")
 
(2) SEANERGY MARITIME HOLDINGS. CORP., a corporation incorporated in the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH96960, the Marshall Islands as guarantor (the " Guarantor ")
 
(3) NATIXIS as lender (the " Original Lender ")
 
BACKGROUND
 
The Lender has agreed to make available to the Borrower a facility of up to $39,412,000 for the purpose of partially financing the acquisition cost of the Ship.
 
OPERATIVE PROVISIONS
 

 
 
SECTION 1

INTERPRETATION
 
1 DEFINITIONS AND INTERPRETATION
 
1.1 Definitions
 
In this Agreement:
 
" Account Security " means a document creating Security over the Earnings Account in agreed form.
 
" Affiliate " means, in relation to any person, a Subsidiary of that person or a Holding Company of that person or any other Subsidiary of that Holding Company.
 
" Anti-terrorism Law " means the Executive Order, the USA Patriot Act, the Money Laundering Control Act and any other anti-terrorism law enacted in the US, EU or the EFTA and enforceable as from the date of this Agreement.
 
" Approved Broker " means any firm or firms of insurance brokers approved in writing by the Lender.
 
" Approved Classification " means as at the date of this Agreement, the classification in relation to the Ship specified in Schedule 5 ( Details of the Ships ) or the equivalent classification with another Approved Classification Society.
 
" Approved Classification Society " means as at the date of this Agreement, the classification society in relation to the Ship specified in Schedule 5 ( Details of the Ships ) or any other classification society approved in writing by the Lender and which is a member of the International Association of Classification Societies.
 
" Approved Commercial Manager " means as at the date of this Agreement, the manager specified as the approved commercial manager in relation to the Ship in Schedule 5 ( Details of the Ship ) or any other person approved in writing by the Lender, as the commercial manager of the Ship.
 
" Approved Flag " means as at the date of this Agreement, the flag in relation to the Ship specified in Schedule 5 ( Details of the Ships ) or such other flag and, if applicable, port of registry, approved in writing by the Lender.
 
" Approved Manager " means the Approved Commercial Manager or the Approved Technical Manager.
 
" Approved Technical Manager " means as at the date of this Agreement, the manager specified as the approved technical manager in relation to the Ship in Schedule 5 ( Details of the Ship ) or any other person approved in writing by the Lender, as the technical manager of the Ship.
 
" Approved Valuer " means any firm or firms of independent sale and purchase shipbrokers approved in writing by the Lender.
 
" Assignable Charter " means any Charter having a duration of 12 months or more (including any optional extensions and renewal options).
 
" Assignment Agreement " means an agreement in the form agreed between the Existing Lender and the relevant assignee for the purpose of Clause 26 ( Changes to the Lender ).
 

2

 
" Authorisation " means an authorisation, consent, approval, resolution, licence, exemption, filing, notarisation, legalisation or registration.
 
" Availability Period " means the period from and including the date of this Agreement to and including 31 December 2015.
 
" Available Facility " means the Commitment minus:
 
(a) the amount of the outstanding Loan; and
 
(b) in relation to any proposed Utilisation prior to the actual Utilisation Date but after the Utilisation Request has been made, the amount of the Loan that is due to be made on or before the proposed Utilisation Date.
 
" Break Costs " means the amount (if any) by which:
 
(a) the interest which the Lender should have received for the period from the date of receipt of all or any part of the Loan or an Unpaid Sum to the last day of the current Interest Period in relation to the Loan, the relevant part of the Loan or that Unpaid Sum, had the principal amount or Unpaid Sum received been paid on the last day of that Interest Period;
 
exceeds
 
(b) the amount which the Lender would be able to obtain by placing an amount equal to the principal amount or Unpaid Sum received by it on deposit with a leading bank in the Relevant Interbank Market for a period starting on the Business Day following receipt or recovery and ending on the last day of the current Interest Period.
 
" Business Day " means a day (other than a Saturday or Sunday) on which banks are open for general business in London, New York, Athens and Paris.
 
" Charter " means any charter relating to the Ship, or other contract for its employment, whether or not already in existence.
 
" Charterparty Assignment " means an assignment of rights of the Borrower who is the owner of the Ship under any Assignable Charter and any Charter Guarantee relative thereto executed or to be executed by the Borrower in favour of the Lender in the agreed form.
 
" Charter Guarantee " means any guarantee, bond, letter of credit or other instrument (whether or not already issued) supporting an Assignable Charter.
 
 " Code " means the US Internal Revenue Code of 1986.
 
" Commercial Management Agreement " means the agreement entered into between the Borrower and the Approved Commercial Manager regarding the commercial management of the Ship.
 
" Commitment " means $39,412,000, to the extent not cancelled or reduced under this Agreement.
 
" Compliance Certificate " means a certificate in the form set out in Schedule 4 ( Form of Compliance Certificate ) or in any other form agreed between the Guarantor and the Lender.
 
" Confidential Information " means all information relating to any Transaction Obligor, the Group, the Finance Documents or the Facility of which the Lender becomes aware in its capacity as, or for the purpose of becoming, the Lender or which is received by the Lender in relation to, or for the purpose of becoming the Lender under, the Finance Documents or the Facility from any member of the Group or any of its advisers in whatever form, and includes
 

3

 
information given orally and any document, electronic file or any other way of representing or recording information which contains or is derived or copied from such information but excludes:
 
(a) information that:
 
(i) is or becomes public information other than as a direct or indirect result of any breach by the Lender of Clause 38 ( Confidential Information ); or
 
(ii) is identified in writing at the time of delivery as non-confidential by any member of the Group or any of its advisers; or
 
(iii) is known by the Lender before the date the information is disclosed to it by any member of the Group or any of its advisers or is lawfully obtained by the Lender after that date, from a source which is, as far as the Lender is aware, unconnected with the Group and which, in either case, as far as the Lender is aware, has not been obtained in breach of, and is not otherwise subject to, any obligation of confidentiality; and
 
(b) any Funding Rate or Reference Bank Quotation.
 
" Confidentiality Undertaking " means a confidentiality undertaking in substantially the appropriate form recommended by the LMA from time to time or in any other form agreed between the Borrower and the Lender.
 
" Deferred Repayment Date " means 30 June 2017.
 
" Deferred Testing Date " means 1 January 2018.
 
" Delegate " means any delegate, agent, attorney, co-trustee or other person appointed by the Lender.
 
" Disruption Event " means either or both of:
 
(a) a material disruption to those payment or communications systems or to those financial markets which are, in each case, required to operate in order for payments to be made in connection with the Facility (or otherwise in order for the transactions contemplated by the Finance Documents to be carried out) which disruption is not caused by, and is beyond the control of, any of the Parties or, if applicable, any Transaction Obligor; or
 
(b) the occurrence of any other event which results in a disruption (of a technical or systems-related nature) to the treasury or payments operations of a Party or, if applicable, any Transaction Obligor preventing that, or any other, Party or, if applicable, any Transaction Obligor:
 
(i) from performing its payment obligations under the Finance Documents; or
 
(ii) from communicating with other Parties or, if applicable, any Transaction Obligor in accordance with the terms of the Finance Documents,
 
and which (in either such case) is not caused by, and is beyond the control of, the Party or, if applicable, any Transaction Obligor whose operations are disrupted.
 
" Document of Compliance " has the meaning given to it in the ISM Code.
 
" dollars " and " $ " mean the lawful currency, for the time being, of the United States of America.
 

4

 
" Earnings " means all moneys whatsoever which are now, or later become, payable (actually or contingently) to the Borrower or the Lender and which arise out of the use or operation of the Ship, including (but not limited to):
 
(a) the following, save to the extent that any of them is, with the prior written consent of the Lender, pooled or shared with any other person:
 
(i) all freight, hire and passage moneys;
 
(ii) compensation payable to the Borrower or the Lender in the event of requisition of the Ship for hire;
 
(iii) remuneration for salvage and towage services;
 
(iv) demurrage and detention moneys;
 
(v) damages for breach (or payments for variation or termination) of any charterparty or other contract for the employment of the Ship;
 
(vi) all moneys which are at any time payable under any Insurances in relation to loss of hire;
 
(vii) all monies which are at any time payable to the Borrower in relation to general average contribution; and
 
(b) if and whenever the Ship is employed on terms whereby any moneys falling within sub-paragraphs (i) to (vi) of paragraph (a) above are pooled or shared with any other person, that proportion of the net receipts of the relevant pooling or sharing arrangement which is attributable to the Ship.
 
" Earnings Account " means:
 
(a) an account in the name of the Borrower with the Original Lender designated "Champion Ocean Navigation Co. - Earnings Account"; or
 
(b) any other account (with that or another office of the Original Lender or with a bank or financial institution other than the Original Lender) which is designated by the Lender as the Earnings Account for the purposes of this Agreement.
 
" EFTA " means the European Free Trade Association.
 
" Environmental Approval " means any present or future permit, ruling, variance or other Authorisation required under Environmental Laws.
 
" Environmental Claim " means any claim by any governmental, judicial or regulatory authority or any other person which arises out of an Environmental Incident or an alleged Environmental Incident or which relates to any Environmental Law and, for this purpose,  " claim " includes a claim for damages, compensation, contribution, injury, fines, losses and penalties or any other payment of any kind, including in relation to clean-up and removal, whether or not similar to the foregoing; an order or direction to take, or not to take, certain action or to desist from or suspend certain action; and any form of enforcement or regulatory action, including the arrest or attachment of any asset.
 
" Environmental Incident " means:
 
(a) any release, emission, spill or discharge into the Ship or into or upon the air, sea, land or soils (including the seabed) or surface water of Environmentally Sensitive Material within or from the Ship; or
 

5

 
(b) any incident in which Environmentally Sensitive Material is released, emitted, spilled or discharged into or upon the air, sea, land or soils (including the seabed) or surface water from a vessel other than the Ship and which involves a collision between the Ship and such other vessel or some other incident of navigation or operation, in either case, in connection with which the Ship is actually or potentially liable to be arrested, attached, detained or injuncted and/or the Ship and/or any Transaction Obligor and/or any operator or manager of the Ship is at fault or allegedly at fault or otherwise liable to any legal or administrative action; or
 
(c) any other incident in which Environmentally Sensitive Material is released, emitted, spilled or discharged into or upon the air, sea, land or soils (including the seabed) or surface water otherwise than from the Ship and in connection with which the Ship is actually or potentially liable to be arrested and/or where any Transaction Obligor and/or any operator or manager of the Ship is at fault or allegedly at fault or otherwise liable to any legal or administrative action.
 
" Environmental Law " means any present or future law relating to pollution or protection of human health or the environment, to conditions in the workplace, to the carriage, generation, handling, storage, use, release or spillage of Environmentally Sensitive Material or to actual or threatened releases of Environmentally Sensitive Material.
 
" Environmentally Sensitive Material " means and includes all contaminants, oil, oil products, toxic substances and any other substance (including any chemical, gas or other hazardous or noxious substance) which is (or is capable of being or becoming) polluting, toxic or hazardous.
 
" Event of Default " means any event or circumstance specified as such in Clause 25 ( Events of Default ).
 
" EU " means the European Union.
 
" Executive Order " means the US decree Number 13224 dated 23 September 2001 "Blocking Property and Prohibition Transactions with persons who commit, threaten to commit, or support terrorism".
 
" Facility " means the term loan facility made available under this Agreement as described in Clause 2 ( The Facility ).
 
" Facility Office " means the office or offices through which the Lender will perform its obligations under this Agreement.
 
" FATCA " means:
 
(a) sections 1471 to 1474 of the Code or any associated regulations;
 
(b) any treaty, law or regulation of any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction, which (in either case) facilitates the implementation of any law or regulation referred to in paragraph (a) above; or
 
(c) any agreement pursuant to the implementation of any treaty, law or regulation referred to in paragraphs (a) or (b) above with the US Internal Revenue Service, the US government or any governmental or taxation authority in any other jurisdiction.
 
" FATCA Deduction " means a deduction or withholding from a payment under a Finance Document required by FATCA.
 
" FATCA Exempt Party " means a Party that is entitled to receive payments free from any FATCA Deduction.
 

6

 
" Fidelity Marine " means Fidelity Marine Inc., a corporation organised and existing under the laws of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands, MH 96960.
 
" Finance Document " means:
 
(a) this Agreement;
 
(b) the Utilisation Request;
 
(c) any Security Document;
 
(d) any other document which is executed for the purpose of establishing any priority or subordination
 
(e) arrangement in relation to the Secured Liabilities; or
 
(f) any other document designated as such by the Lender and the Borrower.
 
" Financial Covenants " means the financial covenants set out in Clause 18.1 ( Financial Covenants ).
 
" Financial Indebtedness " means any indebtedness for or in relation to:
 
(a) moneys borrowed;
 
(b) any amount raised by acceptance under any acceptance credit facility or dematerialised equivalent;
 
(c) any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument;
 
(d) the amount of any liability in relation to any lease or hire purchase contract which would, in accordance with GAAP, be treated as a finance or capital lease;
 
(e) receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis);
 
(f) any amount raised under any other transaction (including any forward sale or purchase agreement) of a type not referred to in any other paragraph of this definition having the commercial effect of a borrowing (in each case, other than in respect of assets or services obtained on normal commercial terms in the ordinary course of business);
 
(g) any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price (and, when calculating the value of any derivative transaction, only the marked to market value (or, if any actual amount is due as a result of the termination or close-out of that derivative transaction, that amount) shall be taken into account);
 
(h) any counter-indemnity obligation in relation to a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution; and
 
(i) the amount of any liability in relation to any guarantee or indemnity for any of the items referred to in paragraphs (a) to (h) above.
 

7

 
" Financing " any agreement or instrument (or, any guarantee or indemnity in respect of any such agreement or instrument) entered prior to the date of this Agreement by any Obligor in connection with any of the following vessels:
 
"GENIUSHIP" (IMO No. 9398759)
 
"GLORIUSHIP" (IMO No. 9266944)
 
"SQUIRESHIP" (IMO No. 9391646)
 
"PREMIERSHIP" (IMO No. 9398747)
 
"GLADIATORSHIP" (IMO No. 9431513)
 
"GUARDIANSHIP" (IMO No. 9493688),
 
and, in the plural, means all of them.
 
" Financier " means any bank, financial institution, trust, fund or other entity which is or has become a lender in any Financing and, in the plural, means all of them.
 
" Fleet Ships " means the ships from time to time owned by the members of the Group and " Fleet Ship " means any of them.
 
" Funding Rate " means any individual rate notified by the Lender to an Obligor pursuant to any Finance Document.
 
" GAAP "   means generally accepted accounting principles in the USA or IFRS.
 
" General Assignment " means the general assignment creating Security over the Earnings, the Insurances and any Requisition Compensation in agreed form.
 
" Group " means the Guarantor and its Subsidiaries (that are consolidated for purposes of its financial statements) for the time being.
 
" Holding Company " means, in relation to a person, any other person in relation to which it is a Subsidiary.
 
" IFRS " means international accounting standards within the meaning of the IAS Regulation 1606/2002 to the extent applicable to the relevant financial statements.
 
" Indemnified Person " has the meaning given to it in Clause 13.2 ( Other indemnities ).
 
" Insurances " means, in relation to the Ship:
 
(a) all policies and contracts of insurance, including entries of the Ship in any protection and indemnity or war risks association, effected in relation to the Ship, the Earnings or otherwise in relation to the Ship whether before, on or after the date of this Agreement; and
 
(b) all rights and other assets relating to, or derived from, any of such policies, contracts or entries, including any rights to a return of premium and any rights in relation to any claim whether or not the relevant policy, contract of insurance or entry has expired on or before the date of this Agreement.
 
" Interest Period " means, in relation to the Loan or any part of the Loan, each period determined in accordance with Clause 9 ( Interest Periods ) and, in relation to an Unpaid Sum, each period determined in accordance with Clause 8.3 ( Default interest ).
 

8

 
" Interpolated Screen Rate " means, in relation to the Loan or any part of the Loan, the rate (rounded to the same number of decimal places as the two relevant Screen Rates) which results from interpolating on a linear basis between:
 
(a) the applicable Screen Rate for the longest period (for which that Screen Rate is available) which is less than the Interest Period of the Loan or that part of the Loan; and
 
(b) the applicable Screen Rate for the shortest period (for which that Screen Rate is available) which exceeds the Interest Period of the Loan or that part of the Loan,
 
each as of the Specified Time for dollars.
 
" ISM Code " means the International Safety Management Code for the Safe Operation of Ships and for Pollution Prevention (including the guidelines on its implementation), adopted by the International Maritime Organisation, as the same may be amended or supplemented from time to time.
 
" ISPS Code " means the International Ship and Port Facility Security (ISPS) Code as adopted by the International Maritime Organization's (IMO) Diplomatic Conference of December 2002, as the same may be amended or supplemented from time to time.
 
" ISSC " means an International Ship Security Certificate issued under the ISPS Code.
 
" Lender " means:
 
(a) the Original Lender; and
 
(b) any bank, financial institution, trust, fund or other entity which has become the Lender in accordance with Clause 26 ( Changes to the Lender ),
 
which in each case has not ceased to be a Party in accordance with this Agreement.
 
" LIBOR " means, in relation to the Loan or any part of the Loan:
 
(c) the applicable Screen Rate   as of the Specified Time for dollars and for a period equal in length to the Interest Period of the Loan or that part of the Loan; or
 
(d) as otherwise determined pursuant to Clause 10.1 ( Unavailability of Screen Rate ),
 
and if, in either case, that rate is less than zero, LIBOR shall be deemed to be zero.
 
" LMA " means the Loan Market Association.
 
" Loan " means the loan to be made available under the Facility or the aggregate principal amount outstanding for the time being of the borrowings under the Facility and a " part of the Loan " means any part of the Loan as the context may require.
 
" Major Casualty " means any casualty to the Ship in relation to which the claim or the aggregate of the claims against all insurers, before adjustment for any relevant franchise or deductible, exceeds US$1,000,000 (one million US dollars) or the equivalent in any other currency.
 
" Management Agreement " means the Technical Management Agreement or the Commercial Management Agreement.
 
" Manager's Undertaking " means the letter of undertaking from the Approved Technical Manager and the letter of undertaking from the Approved Commercial Manager subordinating the rights of the Approved Technical Manager and the Approved Commercial
 

9

 
Manager respectively against the Ship and the Borrower to the rights of the Lender in agreed form.
 
" Margin " means two point five (2.50) per cent per annum.
 
" Market Value " means, in relation to the Ship or any other vessel, at any date, the market value of the Ship or vessel shown by a valuation prepared:
 
(a) as at a date not more than 14 Business Days previously;
 
(b) by an Approved Valuer;
 
(c) with or without physical inspection of the Ship or vessel (as the Lender may require); and
 
(d) on the basis of a sale for prompt delivery for cash on normal arm's length commercial terms as between a willing seller and a willing buyer, free of any Charter,
 
after deducting the estimated amount of the usual and reasonable expenses which would be incurred in connection with the sale.
 
" Material Adverse Effect " means in the reasonable opinion of the Lender a  material adverse effect on:
 
(a) the business, operations, property, condition (financial or otherwise) or prospects of any Transaction Obligor; or
 
(b) the ability of any Transaction Obligor to perform its obligations under any Finance Document; or
 
(c) the validity or enforceability of, or the effectiveness or ranking of any Security granted or intended to be granted pursuant to any of, the Finance Documents or the rights or remedies of the Lender under any of the Finance Documents.
 
" MOA " means the memorandum of agreement dated 6 August 2015 and made between (i) the Borrower as buyer and (ii) the Seller for the purchase of the Ship.
 
" Money Laundering Control Act " means the US Law titled "Money Laundering Control Act" of 1986, Public Law 99-570.
 
" Month " means a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month, except that:
 
(a) (subject to paragraph (c) below) if the numerically corresponding day is not a Business Day, that period shall end on the next Business Day in that calendar month in which that period is to end if there is one, or if there is not, on the immediately preceding Business Day;
 
(b) if there is no numerically corresponding day in the calendar month in which that period is to end, that period shall end on the last Business Day in that calendar month; and
 
(c) if an Interest Period begins on the last Business Day of a calendar month, that Interest Period shall end on the last Business Day in the calendar month in which that Interest Period is to end.
 
The above rules will only apply to the last Month of any period.
 

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" Mortgage " means the first priority or preferred (as the case may be) ship mortgage on the Ship under an Approved Flag in agreed form.
 
" Obligor " means the Borrower and the Guarantor.
 
" Original Financial Statements " means in relation to the Guarantor, the audited consolidated financial statements of the Group for its financial year ended 31 December 2014.
 
" Overseas Regulations " means the Overseas Companies Regulations 2009 (SI 2009/1801).
 
" Participating Member State " means any member state of the European Union that has the euro as its lawful currency in accordance with legislation of the European Union relating to Economic and Monetary Union.
 
" Party " means a party to this Agreement.
 
" Permitted Charter " means a Charter:
 
(a) which is a time, voyage or consecutive voyage charter;
 
(b) the duration of which does not exceed and is not capable of exceeding, by virtue of any optional extensions, more than 12 months plus a redelivery allowance of not more than 30 days;
 
(c) which is entered into on bona fide arm's length terms at the time at which the Ship is fixed; and
 
(d) in relation to which not more than two months' hire is payable in advance,
 
and any other Charter which is approved in writing by the Lender such approval not to be unreasonably withheld or delayed.
 
" Permitted Financial Indebtedness " means:
 
(a) any  Financial Indebtedness incurred under the Finance Documents; and
 
(b) any Financial Indebtedness that is subordinated to all Financial Indebtedness incurred under the Finance Documents in a manner satisfactory to the Facility Agent.
 
" Permitted Security " means:
 
(a) Security created by the Finance Documents;
 
(b) any netting or set-off arrangement entered into by any member of the Group in the ordinary course of its banking arrangements for the purpose of netting debit and credit balances;
 
(c) liens for unpaid master's and crew's wages in accordance with usual maritime practice;
 
(d) liens for salvage;
 
(e) liens for master's disbursements incurred in the ordinary course of trading; and
 
(f) any other lien arising by operation of law or otherwise in the ordinary course of the operation, repair or maintenance of the Ship and not as a result of any default or
 

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omission by the Borrower and subject, in the case of liens for repair or maintenance, to Clause 22.15 ( Restrictions on chartering, appointment of managers etc. ).
 
" Potential Event of Default " means any event or circumstance specified in Clause 25 ( Events of Default ) which would (with the expiry of a grace period, the giving of notice, the making of any determination under the Finance Documents or any combination of any of the foregoing) be an Event of Default.
 
" Pertinent Jurisdiction ", in relation to a company, means:
 
(a) England and Wales;
 
(b) the country under the laws of which the company is incorporated or formed;
 
(c) a country in which the company has the centre of its main interests or which the company's central management and control is or has recently been exercised;
 
(d) a country in which the overall net income of the company is subject to corporation tax, income tax or any similar tax;
 
(e) a country in which assets of the company (other than securities issued by, or loans to, related companies) having a substantial value are situated, in which the company maintains a branch or permanent place of business, or in which a Security Interest created by the company must or should be registered in order to ensure its validity or priority; and
 
(f) a country the courts of which have jurisdiction to make a winding up, administration or similar order in relation to the company, whether as a main or territorial or ancillary proceedings, or which would have such jurisdiction if their assistance were requested by the courts of a country referred to in paragraphs (b) or (c).
 
" Purchase Price " means the total price of $ 41,728,241.43 payable for the Ship under clause 1 of the MOA.
 
" Quotation Day " means, in relation to any period for which an interest rate is to be determined, two Business Days before the first day of that period unless market practice differs in the Relevant Interbank Market in which case the Quotation Day will be determined by the Lender in accordance with market practice in the Relevant Interbank Market (and if quotations would normally be given by leading banks in the Relevant Interbank Market on more than one day, the Quotation Day will be the last of those days).
 
" Receiver " means a receiver or receiver and manager or administrative receiver of the whole or any part of the Security Assets.
 
" Reference Bank Quotation " means any quotation supplied to the Lender by a Reference Bank.
 
" Reference   Bank   Rate " means the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Lender at its request by the Reference Banks:
 
(a) (other than where paragraph (b) below applies) as the rate at which the relevant Reference Bank could borrow funds in the London interbank market in dollars for the relevant period were it to do so by asking for and then accepting interbank offers for deposits in reasonable market size in that currency and for that period; or
 
(b) if different, as the rate (if any and applied to the relevant Reference Bank and the relevant currency and period) which contributors to the Screen Rate are asked to submit to the relevant administrator;
 

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" Reference Banks " means in relation to LIBOR such banks as may be appointed by the Lender in consultation with the Borrower.
 
" Related Fund " in relation to a fund (the " first fund "), means a fund which is managed or advised by the same investment manager or investment adviser as the first fund or, if it is managed by a different investment manager or investment adviser, a fund whose investment manager or investment adviser is an Affiliate of the investment manager or investment adviser of the first fund.
 
" Relevant Interbank Market " means the London interbank market.
 
" Relevant Jurisdiction " means, in relation to a Transaction Obligor:
 
(a) its jurisdiction of incorporation;
 
(b) any jurisdiction where any asset subject to, or intended to be subject to, any of the Transaction Security created, or intended to be created, by it is situated;
 
(c) any jurisdiction where it conducts its business; and
 
(d) the jurisdiction whose laws govern the perfection of any of the Security Documents entered into by it.
 
" Repayment Date " means each date on which a Repayment Instalment is required to be paid under Clause 6.1 ( Repayment of Loan ).
 
" Repayment Instalment " has the meaning given to it in Clause 6.1 ( Repayment of Loan ).
 
" Repeating Representation " means each of the representations set out in Clause 16 ( Representations ) except Clause 16.10 ( Insolvency ), Clause 16.11 ( No filing or stamp taxes ) and Clause 16.12 ( Deduction of Tax ) and any representation of any Transaction Obligor made in any other Finance Document that is expressed to be a "Repeating Representation" or is otherwise expressed to be repeated.
 
" Representative " means any delegate, agent, manager, administrator, nominee, attorney, trustee or custodian.
 
" Requisition " means:
 
(a) any expropriation, confiscation, requisition or acquisition of the Ship, whether for full consideration, a consideration less than its proper value, a nominal consideration or without any consideration, which is effected by any government or official authority or by any person or persons claiming to be or to represent a government or official authority (excluding a requisition for hire for a fixed period not exceeding one year without any right to an extension) unless it is within 45 days redelivered to the full control of the Borrower; and
 
(b) any arrest, capture, seizure or detention of the Ship (including any hijacking or theft) unless it is within 45 days redelivered to the full control of the Borrower.
 
" Requisition Compensation " includes all compensation or other moneys payable by reason of any Requisition.
 
" Restructuring " means, in respect of any Financing, any amendment, supplement, novation, restatement, waiver of terms or conditions and/or restructuring.
 
" Safety Management Certificate " has the meaning given to it in the ISM Code.
 
" Safety Management System " has the meaning given to it in the ISM Code.
 

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" Screen   Rate " means the London interbank offered rate administered by ICE Benchmark Administration Limited (or any other person which takes over the administration of that rate) for dollars for the relevant period displayed (before any correction, recalculation or republication by the administrator) on page LIBOR01 or LIBOR02 of the Thomson Reuters screen (or any replacement Thomson Reuters page which displays that rate) or on the appropriate page of such other information service which publishes that rate from time to time in place of Thomson Reuters. If such page or service ceases to be available, the Lender may specify another page or service displaying the relevant rate after consultation with the Borrower.
 
" Seanergy Management " means Seanergy Management Corp., a corporation incorporated in the Republic of the Marshall Islands having its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Islands, Majuro, Marshall Islands, MH96960.
 
" Seanergy Shipmanagement " means Seanergy Shipmanagement Corp., a corporation incorporated in the Republic of the Marshall Islands having its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Islands, Majuro, Marshall Islands, MH96960.
 
" Secured Liabilities " means all present and future obligations and liabilities, (whether actual or contingent and whether owed jointly or severally or in any other capacity whatsoever) of each Transaction Obligor to the Lender under or in connection with each Finance Document.
 
" Security " means a mortgage, pledge, lien, charge, assignment, hypothecation or security interest or any other agreement or arrangement having the effect of conferring security.
 
" Security Assets " means all of the assets of the Transaction Obligors which from time to time are, or are expressed to be, the subject of the Transaction Security.
 
" Security Document " means:
 
(a) the Mortgage;
 
(b) the General Assignment;
 
(c) any Charterparty Assignment;
 
(d) the Account Security;
 
(e) any Manager's Undertaking;
 
(f) any other document (whether or not it creates Security) which is executed as security for the Secured Liabilities; or
 
(g) any other document designated as such by the Lender and the Borrower.
 
" Security Period " means the period starting on the date of this Agreement and ending on the date on which the Lender is satisfied that there is no outstanding Commitment in force and that the Secured Liabilities have been irrevocably and unconditionally paid and discharged in full.
 
" Security Property " means:
 
(a) the Transaction Security expressed to be granted in favour of the Lender and all proceeds of that Transaction Security;
 
(b) all obligations expressed to be undertaken by a Transaction Obligor to pay amounts in relation to the Secured Liabilities to the Lender and secured by the Transaction Security together with all representations and warranties expressed to be given by a Transaction Obligor or any other person in favour of the Lender; and
 

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(c) the Lender's interest in any turnover trust created under the Finance Documents.
 
" Selection Notice " means a notice substantially in the form set out in Part D of Schedule 3 ( Requests ) given in accordance with Clause 9 ( Interest Periods ).
 
" Seller " means Cape May Marine Inc., a company incorporated in the British Virgin Islands whose registered office is at P.O. Box 3174, Road Town, Tortola, British Virgin Islands.
 
" Ship " means m.v. MAXIMUS (tbr "CHAMPIONSHIP"), details of which are set out in Schedule 5 ( Details of the Ship ).

" Specified Time " means a day or time determined in accordance with Schedule 6 ( Timetables ).
 
" Subsidiary " means a subsidiary within the meaning of section 1159 of the Companies Act 2006.
 
" Tax " means any tax, levy, impost, duty or other charge or withholding of a similar nature (including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same).
 
" Tax Credit " has the meaning given to it in Clause 11.1 ( Definitions ).
 
" Tax Deduction " has the meaning given to it in Clause 11.1 ( Definitions ).
 
" Tax Payment " has the meaning given to it in Clause 11.1 ( Definitions ).
 
" Technical Management Agreement " means the agreement entered into between the Borrower and the Approved Technical Manager regarding the technical management of the Ship.
 
" Termination Date " means 26 February 2021.
 
" Third Parties Act " has the meaning given to it in Clause 1.5 ( Third party rights ).
 
" Total Loss " means:
 
(a) actual, constructive, compromised, agreed or arranged total loss of the Ship; or
 
(b) any Requisition.
 
" Total Loss Date " means, in relation to the Total Loss of the Ship:
 
(a) in the case of an actual loss of the Ship, the date on which it occurred or, if that is unknown, the date when the Ship was last heard of;
 
(b) in the case of a constructive, compromised, agreed or arranged total loss of the Ship, the earlier of:
 
(i) the date on which a notice of abandonment is given to the insurers; and
 
(ii) the date of any compromise, arrangement or agreement made by or on behalf of the Borrower with the Ship's insurers in which the insurers agree to treat the Ship as a total loss; and
 
(c) in the case of any other type of total loss, the date (or the most likely date) on which it appears to the Lender that the event constituting the total loss occurred.
 

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" Transaction Document " means:
 
(a) a Finance Document;
 
(b) any Charter;
 
(c) the MOA;
 
(d) any Management Agreement; or
 
(e) any other document designated as such by the Lender and the Borrower.
 
" Transaction Obligor " means an Obligor and any Approved Manager (being a member of the Group and, for the avoidance of doubt, any Approved Manager who is not a member of the Group shall not be deemed a Transaction Obligor solely because it's a party to a Transaction Document) who executes a Transaction Document.
 
" Transaction Security" means the Security created or evidenced or expressed to be created or evidenced under the Security Documents.
 
" Transfer Date " means, in relation to an assignment, the later of:
 
(a) the proposed transfer date specified in the Assignment Agreement; and
 
(b) the date on which the parties to the Assignment Agreement have all executed, and agreed to be bound by, the Assignment Agreement.
 
" UK Establishment " means a UK establishment as defined in the Overseas Regulations.
 
" Unpaid Sum " means any sum due and payable but unpaid by a Transaction Obligor under the Finance Documents.
 
" US " means the United States of America.
 
" USA Patriot Act " means the US law titled "The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act" of 2001, Public Law 107-56.
 
"Utilisation" means the utilisation of the Facility.
 
" Utilisation Date " means the date on which the Loan is to be made.
 
" Utilisation Request " means a notice substantially in the form set out in Part C of Schedule 3 ( Requests ).
 
" VAT " means:
 
(a) any tax imposed in compliance with the Council Directive of 28 November 2006 on the common system of value added tax (EC Directive 2006/112); and
 
(b) any other tax of a similar nature, whether imposed in a member state of the European Union in substitution for, or levied in addition to, such tax referred to in paragraph (a) above, or imposed elsewhere.
 
" V. Ships " means V. Ships Limited a corporation organised and existing under the laws of the Republic of Cyprus whose registered office is at Zenas Gunther, 16-18, Agia Triada, 3035 Limassol, Cyprus.
 

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1.2 Construction
 
(a) Unless a contrary indication appears, a reference in this Agreement to:
 
(i) the " Lender ", any " Obligor ", any " Party ", any " Transaction   Obligor " or any other person shall be construed so as to include its successors in title and permitted assigns;
 
(ii) " assets " includes present and future properties, revenues and rights of every description;
 
(iii) " continuing   Event of Default " means an Event of Default which has not been remedied or waived;
 
(iv) " continuing   Potential Event of Default " means a Potential Event of Default which has not been remedied or waived;
 
(v) a liability which is " contingent " means a liability which is not certain to arise and/or the amount of which remains unascertained;
 
(vi) " document " includes a deed and also a letter, fax or telex;
 
(vii) " expense " means any kind of cost, charge or expense (including all legal costs, charges and expenses) and any applicable Tax including VAT;
 
(viii) a " Finance Document ", a " Security Document " or " Transaction Document " or any other agreement or instrument is a reference to that Finance Document, Security Document or Transaction Document or other agreement or instrument as amended, novated, supplemented, extended or restated;
 
(ix) " indebtedness " includes any obligation (whether incurred as principal or as surety) for the payment or repayment of money, whether present or future, actual or contingent;
 
(x) " law " includes any order or decree, any form of delegated legislation, any treaty or international convention and any regulation or resolution of the Council of the European Union, the European Commission, the United Nations or its Security Council;
 
(xi) " proceedings " means, in relation to any enforcement provision of a Finance Document, proceedings of any kind, including an application for a provisional or protective measure;
 
(xii) a " person " includes any individual, firm, company, corporation, government, state or agency of a state or any association, trust, joint venture, consortium, partnership or other entity (whether or not having separate legal personality);
 
(xiii) a " regulation " includes any regulation, rule, official directive, request or guideline (either having the force of law or compliance with which is customary in the ordinary course of business of the party concerned) of any governmental, intergovernmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organisation;
 
(xiv) a provision of law is a reference to that provision as amended or re-enacted;
 
(xv) a time of day is a reference to London time;
 
(xvi) any English legal term for any action, remedy, method of judicial proceeding, legal document, legal status, court, official or any legal concept or thing shall, in respect of
 

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a jurisdiction other than England, be deemed to include that which most nearly approximates in that jurisdiction to the English legal term;
 
(xvii) words denoting the singular number shall include the plural and vice versa; and
 
(xviii) " including " and " in particular " (and other similar expressions) shall be construed as not limiting any general words or expressions in connection with which they are used.
 
(b) The determination of the extent to which a rate is " for a period equal in length " to an Interest Period shall disregard any inconsistency arising from the last day of that Interest Period being determined pursuant to the terms of this Agreement.
 
(c) Section, Clause and Schedule headings are for ease of reference only and are not to be used for the purposes of construction or interpretation of the Finance Documents.
 
(d) Unless a contrary indication appears, a term used in any other Finance Document or in any notice given under, or in connection with, any Finance Document has the same meaning in that Finance Document or notice as in this Agreement.
 
1.3 Construction of insurance terms
 
In this Agreement:
 
" approved " means, for the purposes of Clause 20 ( Insurance Undertakings ), approved in writing by the Lender;
 
" excess risks " means the proportion of claims for general average, salvage and salvage charges not recoverable under the hull and machinery policies in respect of the Ship in consequence of its insured value being less than the value at which the Ship is assessed for the purpose of such claims;
 
" obligatory insurances " means all insurances effected, or which the Borrower is obliged to effect, under Clause 20 ( Insurance Undertakings ) or any other provision of this Agreement or of another Finance Document;
 
" policy " includes a slip, cover note, certificate of entry or other document evidencing the contract of insurance or its terms;
 
" protection and indemnity risks " means the usual risks covered by a protection and indemnity association managed in London, including pollution risks and the proportion (if any) of any sums payable to any other person or persons in case of collision which are not recoverable under the hull and machinery policies by reason of the incorporation in them of clause 6 of the International Hull Clauses (1/11/02) (1/11/03), clause 8 of the Institute Time Clauses (Hulls) (1/10/83) (1/11/95) or the Institute Amended Running Down Clause (1/10/71) or any equivalent provision; and
 
" war risks " includes the risk of mines and all risks excluded by clause 29 of the International Hull Clauses (1/11/02 or 1/11/03), clause 24 of the Institute Time Clauses (Hulls) (1/11/95) or clause 23 of the Institute Time Clauses (Hulls)(1/10/83).
 
1.4 Agreed forms of Finance Documents
 
References in Clause 1.1 ( Definitions ) to any Finance Document being in "agreed form" are to that Finance Document:
 
(a) in a form attached to a certificate dated the same date as this Agreement (and signed by the Borrower and the Lender); or
 

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(b) in any other form agreed in writing between the Borrower and the Lender.
 
1.5 Third party rights
 
(a) Unless expressly provided to the contrary in a Finance Document, a person who is not a Party has no right under the Contracts (Rights of Third Parties) Act 1999 (the " Third Parties   Act ") to enforce or to enjoy the benefit of any term of this Agreement.
 
(b) Subject to paragraph (c) below but otherwise notwithstanding any term of any Finance Document, the consent of any person who is not a Party is not required to rescind or vary this Agreement at any time.
 
(c) An amendment or waiver which adversely affects the rights or obligations of a Reference Bank may not be effected without the consent of that Reference Bank.
 
(d) Any Affiliate, Receiver or Delegate or any other person described in paragraph (f) of Clause 13.2 ( Other indemnities ), Clause 28.1 ( Role of Reference Banks ) or Clause 28.2 ( Third Party Reference Banks ) may, subject to this Clause 1.5 ( Third party rights ) and the Third Parties Act, rely on any Clause of this Agreement which expressly confers rights on it.
 

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SECTION 2
 
THE FACILITY
 
2 THE FACILITY
 
Subject to the terms of this Agreement, the Lender makes available to the Borrower a dollar term loan facility in an amount not exceeding the Commitment.
 
3 PURPOSE
 
3.1 Purpose
 
The Borrower shall apply all amounts borrowed by it under the Facility only for financing the acquisition of the Ship and the payment of fees, costs and expenses and other amounts payable under the Finance Documents.
 
3.2 Monitoring
 
The Lender is not bound to monitor or verify the application of any amount borrowed pursuant to this Agreement.
 
4 CONDITIONS OF UTILISATION
 
4.1 Initial conditions precedent
 
The Borrower may not deliver a Utilisation Request unless the Lender has received all of the documents and other evidence listed in Part A of Schedule 2 ( Conditions Precedent ) in form and substance satisfactory to the Lender.
 
4.2 Further conditions precedent
 
The Lender will only be obliged to comply with Clause 5.4 ( Loan ) if
 
(a) on the date of the Utilisation Request and on the proposed Utilisation Date and before the Loan is made available:
 
(i) no Event of Default or Potential Event of Default is continuing or would result from the proposed Loan;
 
(ii) the Repeating Representations to be made by each Transaction Obligor are true in all material respects;
 
(iii) the Ship has neither been sold nor become a Total Loss; and
 
(iv) the provisions of paragraph (b) of Clause 10.3 ( Market disruption ) do not   apply;
 
(b) the Lender has received on or before the Utilisation Date, or is satisfied it will receive when the Loan is made available, all of the documents and other evidence listed in Part B of Schedule 2 ( Conditions Precedent ) in form and substance satisfactory to the Lender.
 
4.3 Notification of satisfaction of conditions precedent
 
The Lender shall notify the Borrower promptly upon being satisfied as to the satisfaction of the conditions precedent referred to in Clause 4.1 ( Initial conditions precedent ) and Clause 4.2 ( Further conditions precedent ).
 

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4.4 Waiver of conditions precedent
 
If the Lender, at its discretion, permits the Loan to be borrowed before any of the conditions precedent referred to in Clause 4.1 ( Initial conditions precedent ) or Clause 4.2 ( Further conditions precedent ) has been satisfied, the Borrower shall ensure that that condition is satisfied within five Business Days after the Utilisation Date or such later date as the Lender may agree in writing with the Borrower.
 

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SECTION 3
 
UTILISATION
 
5 UTILISATION
 
5.1 Delivery of a Utilisation Request
 
The Borrower may make one Utilisation only under the Facility by delivery to the Lender of a duly completed Utilisation Request not later than the Specified Time.
 
5.2 Completion of a Utilisation Request
 
(a) A Utilisation Request is irrevocable and will not be regarded as having been duly completed unless:
 
(i) the proposed Utilisation Date is a Business Day within the Availability Period;
 
(ii) the currency and amount of the Loan comply with Clause 5.3 ( Currency and amount ); and
 
(iii) the proposed Interest Period complies with Clause 9 ( Interest Periods ).
 
(b) Only one Utilisation may be requested in a Utilisation Request.
 
5.3 Currency and amount
 
(a) The currency specified in a Utilisation Request must be dollars.
 
(b) The amount of the proposed Loan must be an amount not exceeding the Commitment.
 
5.4 Loan
 
If the conditions set out in this Agreement have been met, the Lender shall make the Loan available by the Utilisation Date through its Facility Office.
 
5.5 Cancellation of Commitment
 
On the earlier of the date on which the Loan has been made and the end of the Availability Period any Commitment which is then unutilised shall be cancelled.
 
5.6 Payment to Seller
 
The Lender shall, on the Utilisation Date, pay the Loan for the account of the Borrower to the account of the Seller which the Borrower specifies in the Utilisation Request.
 
5.7 Disbursement of Loan to third party
 
A payment by the Lender under Clause 5.6 ( Payment to Seller ) to the Seller shall constitute the making of the Loan and the Borrower shall at that time become indebted, as principal and direct obligor, to the Lender in an amount equal to the Loan.
 
5.8 Prepositioning of funds
 
If, in respect of the Loan, the Lender, at the request of the Borrower and on terms acceptable to the Lender and in its absolute discretion, prepositions funds with the Seller's or any other bank, the Borrower and the Guarantor:
 

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(a) agree to pay interest on the amount of the funds so prepositioned at the rate described in Clause 8.1 ( Calculation of interest ) on the basis of successive interest periods of one day and so that interest shall be paid together with the first payment of interest on the Loan after its Utilisation Date or, if such Utilisation Date does not occur, within three Business Days of demand by the Lender; and
 
(b) shall, without duplication, indemnify the Lender against any costs, loss or liability it may incur in connection with such arrangement.
 

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SECTION 4
 
REPAYMENT, PREPAYMENT AND CANCELLATION
 
6 REPAYMENT
 
6.1 Repayment of Loan
 
The Borrower shall repay the Loan by fifteen (15) equal consecutive quarterly instalments, each in an amount of $985,000 (each, a " Repayment   Instalment ") and a last and final instalment in the sum of $24,637,000 (the " Balloon Instalment "), the first Repayment Instalment of which shall be repaid on the Deferred Repayment Date and the Balloon Instalment on the Termination Date.
 
6.2 Reduction of Repayment Instalments
 
If any part of the Facility is cancelled, the Repayment Instalments falling after that cancellation shall be reduced in inverse chronological order (including the Balloon Instalment) by the amount cancelled.
 
6.3 Termination Date
 
On the Termination Date, the Borrower shall additionally pay to the Lender all other sums then accrued and owing under the Finance Documents.
 
6.4 Reborrowing
 
The Borrower may not reborrow any part of the Facility which is repaid.
 
7 PREPAYMENT AND CANCELLATION
 
7.1 Illegality
 
If it becomes unlawful in any applicable jurisdiction for the Lender to perform any of its obligations as contemplated by this Agreement or to fund or maintain the Loan or it becomes unlawful for any Affiliate of the Lender for the Lender to do so:
 
(a) the Lender shall promptly notify the Borrower upon becoming aware of that event and the Available Facility will be immediately cancelled; and
 
(b) the Borrower shall prepay the Loan on the last day of the Interest Period for the Loan occurring after it has notified the Borrower or, if earlier, the date specified by the Lender in the notice delivered to the Borrower (being no earlier than the last day of any applicable grace period permitted by law) and the Commitment shall be cancelled; and
 
(c) If circumstances arise which would result in a notification under this Clause 7.1 then, without in any way limiting the rights of the Lender under this Clause 7.1, the Lender shall use reasonable endeavours to transfer its obligations, liabilities and rights under this Agreement and the Finance Documents to another office or financial institution not affected by the circumstances but the Lender shall not be under any obligation to take any such action if, in its opinion, to do would or might:
 
(i) have an adverse effect on its business, operations or financial condition; or
 
(ii) involve it in any activity which is unlawful or prohibited or any activity that is contrary to, or inconsistent with, any regulation; or
 
(iii) involve it in any expense (unless indemnified to its satisfaction) or tax disadvantage.
 

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7.2 Voluntary and automatic cancellation
 
(a) The Borrower may, if it gives the Lender not less than 30 Business Days' (or such shorter period as the Lender may agree) prior notice, cancel the whole or any part (being a minimum amount of $500,000 or a multiple thereof) of the Available Facility.
 
(b) The unutilised Commitment (if any) shall be automatically cancelled at close of business on the Utilisation Date.
 
7.3 Voluntary prepayment of Loan
 
(a) The Borrower may, if it gives the Lender not less than 30 Business Days' (or such shorter period as the Lender may agree) prior notice, prepay the whole or any part of the Loan (but, if in part, being an amount that reduces the amount of the Loan by a minimum amount of $500,000  or a multiple of that amount), on the last day of an Interest Period.
 
(b) Any partial prepayment under this Clause 7.3 ( Voluntary prepayment of Loan ) shall reduce in inverse chronological order the amount of each Repayment Instalment (including the Balloon Instalment) falling after that prepayment by the amount prepaid.
 
7.4 Mandatory prepayment on sale or Total Loss
 
If the Ship is sold or becomes a Total Loss, the Borrower shall repay the Loan.  Such repayment shall be made:
 
(a) in the case of a sale of the Ship, on or before the date on which the sale is completed by delivery of the Ship to the buyer; or
 
(b) in the case of a Total Loss, on the earlier of (i) the date falling 90 days after the Total Loss Date and (ii) the date of receipt by the Lender of the proceeds of insurance relating to such Total Loss.
 
7.5 Restrictions
 
(a) Any notice of cancellation or prepayment given by any Party under this Clause 7 ( Prepayment and Cancellation ) shall be irrevocable and, unless a contrary indication appears in this Agreement, shall specify the date or dates upon which the relevant cancellation or prepayment is to be made and the amount of that cancellation or prepayment.
 
(b) Any prepayment under this Agreement shall be made together with accrued interest on the amount prepaid in connection with that prepayment and, subject to any Break Costs, without premium or penalty.
 
(c) The Borrower may not reborrow any part of the Facility which is prepaid.
 
(d) The Borrower shall not repay or prepay all or any part of the Loan or cancel all or any part of the Commitment except at the times and in the manner expressly provided for in this Agreement.
 
(e) No amount of the Commitment cancelled under this Agreement may be subsequently reinstated.
 

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SECTION 5
 
COSTS OF UTILISATION
 
8 INTEREST
 
8.1 Calculation of interest
 
The rate of interest on the Loan or any part of the Loan for each Interest Period is the percentage rate per annum which is the aggregate of:
 
(a) the Margin; and
 
(b) LIBOR.
 
8.2 Payment of interest
 
(a) The Borrower shall pay accrued interest on the Loan or any part of the Loan on the last day of each Interest Period (each an " Interest Payment Date ").
 
(b) If an Interest Period is longer than six Months, the Borrower shall also pay interest then accrued on the Loan or the relevant part of the Loan on the dates falling at six Monthly intervals after the first day of the Interest Period.
 
8.3 Default interest
 
(a) If a Transaction Obligor fails to pay any amount payable by it under a Finance Document on its due date, interest shall accrue on the Unpaid Sum from the due date up to the date of actual payment (both before and after judgment) at a rate which, subject to paragraph (b) below, is 2.00% (two per cent) per annum higher than the rate which would have been payable if the Unpaid Sum had, during the period of non-payment, constituted part of the Loan, in the currency of the Unpaid Sum for successive Interest Periods, each of a duration selected by the Lender.  Any interest accruing under this Clause 8.3 ( Default interest ) shall be immediately payable by the Obligor on demand by the Lender.
 
(b) If an Unpaid Sum consists of all or part of the Loan which became due on a day which was not the last day of an Interest Period relating to the Loan or that part of the Loan:
 
(i) the first Interest Period for that Unpaid Sum shall have a duration equal to the unexpired portion of the current Interest Period relating to the Loan or that part of the Loan; and
 
(ii) the rate of interest applying to that Unpaid Sum during that first Interest Period shall be 2.00% (two per cent) per annum higher than the rate which would have applied if that Unpaid  Sum had not become due.
 
(c) Default interest (if unpaid) arising on an Unpaid Sum will be compounded with the Unpaid Sum at the end of each Interest Period applicable to that Unpaid Sum but will remain immediately due and payable.
 
8.4 Notification of rates of interest
 
The Lender shall promptly notify the Borrower of the determination of a rate of interest under this Agreement.
 

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9 INTEREST PERIODS
 
9.1 Selection of Interest Periods
 
(a) The Borrower may select the Interest Period for the Loan in the Utilisation Request.  Subject to paragraph (f) below, the Borrower may select each subsequent Interest Period in respect of the Loan in a Selection Notice.
 
(b) Each Selection Notice is irrevocable and must be delivered to the Lender by the Borrower not later than the Specified Time.
 
(c) If the Borrower fails to select an Interest Period in the Utilisation Request or fails to deliver a Selection Notice to the Lender in accordance with paragraphs (a) and (b) above, the relevant Interest Period will, subject to paragraph (f) below and Clause 9.2 ( Changes to Interest Periods ), be 3 Months.
 
(d) Subject to this Clause 9 ( Interest Periods ), the Borrower may select an Interest Period of one, two, three or six Months or any other period agreed between the Borrower and the Lender.
 
(e) An Interest Period in respect of the Loan shall not extend beyond the Termination Date.
 
(f) In respect of a Repayment Instalment, the Borrower may request in the relevant Selection Notice that an Interest Period for a part of the Loan equal to such Repayment Instalment shall end on the Repayment Date relating to it and, subject to paragraph (d) above, select a longer Interest Period for the remaining part of the Loan.
 
(g) The first Interest Period for the Loan shall start on the Utilisation Date and, subsequent to paragraph (h) below, each subsequent Interest Period shall start on the last day of the preceding Interest Period.
 
(h) Except for the purposes of paragraph (f) above and Clause 9.2 ( Changes to Interest Periods ), the Loan shall have one Interest Period only at any time.
 
9.2 Changes to Interest Periods
 
(a) In respect of a Repayment Instalment, prior to determining the interest rate for the Loan, the Lender may establish an Interest Period for a part of the Loan equal to such Repayment Instalment to end on the Repayment Date relating to it and the remaining part of the Loan shall have the Interest Period selected in the relevant Selection Notice, subject to paragraph (d) of Clause 9.1 ( Selection of Interest Periods ).
 
(b) If after the Borrower has selected and the Lender has agreed an Interest Period longer than six Months, the Lender notifies the Borrower within two Business Days after the Specified Time relating to the Utilisation Request or Selection Notice that it is not satisfied that deposits in dollars for a period equal to the Interest Period will be available to it in the Relevant Interbank Market when the Interest Period commences, the Lender shall shorten the Interest Period to six Months.
 
(c) If the Lender makes any change to an Interest Period referred to in this Clause 9.2 ( Changes to Interest Periods ), it shall promptly notify the Borrower.
 
9.3 Non-Business Days
 
If an Interest Period would otherwise end on a day which is not a Business Day, that Interest Period will instead end on the next Business Day in that calendar month (if there is one) or the preceding Business Day (if there is not).
 

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10 CHANGES TO THE CALCULATION OF INTEREST
 
10.1 Unavailability of Screen Rate
 
(a) Interpolated Screen Rate :  If no Screen Rate is available for LIBOR for the Interest Period of the Loan or any part of the Loan, the applicable LIBOR shall be the Interpolated Screen Rate for a period equal in length to the Interest Period of the Loan or that part of the Loan.
 
(b) Reference Bank Rate : If no Screen Rate is available for LIBOR for:
 
(i) dollars; or
 
(ii) the Interest Period of the Loan or any part of the Loan and it is not possible to calculate the Interpolated Screen Rate,
 
the applicable LIBOR shall be the Reference Bank Rate as of the Specified Time and for a period equal in length to the Interest Period of the Loan or that part of the Loan there shall be no LIBOR for the Loan or that part of the Loan (as applicable) and Clause 10.4 ( Cost of funds ) shall apply the Loan or that part of the Loan for that Interest Period.
 
(c) Cost of funds :  If paragraph (b) above applies but no Reference Bank Rate is available for dollars for the relevant Interest Period there shall be no LIBOR for the Loan or that part of the Loan (as applicable) and Clause 10.4 ( Cost of funds ) shall apply to the Loan or that part of the Loan for that Interest Period.
 
10.2 Calculation of Reference Bank Rate
 
(a) Subject to paragraph (b) below, if LIBOR is to be determined on the basis of a Reference Bank Rate but a Reference Bank does not supply a quotation by the Specified Time, the Reference Bank Rate shall be calculated on the basis of the quotations of the remaining Reference Banks. The Lender shall provide evidence to the Borrower in respect of the quotation of the Reference Banks.
 
(b) If at or about noon on the Quotation Day none or only one of the Reference Banks supplies a quotation, there shall be no Reference Bank Rate for the relevant Interest Period.
 
10.3 Market disruption
 
(a) If before close of business in London on the Quotation Day for the relevant Interest Period the Lender notifies the Borrower that the cost to it of funding the Loan or the relevant part of the Loan from whatever source it may reasonably select would be in excess of LIBOR then Clause 10.4 ( Cost of funds ) shall apply to the Loan or that part of the Loan (as applicable) for the relevant Interest Period.
 
(b) If, at least one Business Day before the Utilisation Date, the Lender notifies the Borrower that for any reason it is unable to obtain dollars in the Relevant Interbank Market in order to fund the Utilisation, the Lender's obligation to make the Loan available shall be suspended while that situation continues.
 
10.4 Cost of funds
 
(a) If this Clause 10.4 ( Cost of funds ) applies, the rate of interest on the Loan or the relevant part of the Loan for the relevant Interest Period shall be the percentage rate per annum which is the sum of:
 
(i) the Margin; and
 
(ii) the rate notified to the Borrower by the Lender as soon as practicable and in any event before interest is due to be paid in respect of that Interest Period to be that
 

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which expresses as a percentage rate per annum the cost to the Lender of funding the Loan or that part of the Loan from whatever source it may reasonably select. The Lender shall provide any readily available evidence (if any) or, otherwise, a statement from its treasury department to the Borrower in respect of the quotation of the selected source.
 
(b) If this Clause 10.4 ( Cost of funds ) applies and the Lender or the Borrower so require, the Lender and the Borrower shall enter into negotiations (for a period of not more than 30 days) with a view to agreeing a substitute basis for determining the rate of interest or (as the case may be) an alternative basis for funding.
 
(c) Any substitute or alternative basis agreed pursuant to paragraph (b) above shall be binding on all Parties.
 
10.5 Break Costs
 
The Borrower shall, within three Business Days of demand by the Lender, pay to the Lender its Break Costs attributable to all or any part of the Loan or Unpaid Sum being paid by the Borrower on a day other than the last day of an Interest Period for the Loan, the relevant part of the Loan or that Unpaid Sum.
 

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SECTION 6
 
ADDITIONAL PAYMENT OBLIGATIONS
 
11 TAX GROSS UP AND INDEMNITIES
 
11.1 Definitions
 
(a) In this Agreement:
 
" Tax Credit " means a credit against, relief or remission for, or repayment of any Tax.
 
" Tax Deduction " means a deduction or withholding for or on account of Tax from a payment under a Finance Document, other than a FATCA Deduction.
 
" Tax Payment " means either the increase in a payment made by an Obligor to the Lender under Clause 11.2 ( Tax gross-up ) or a payment under Clause 11.3 ( Tax indemnity ).
 
(b) Unless a contrary indication appears, in this Clause 11 ( Tax Gross Up and Indemnities ) reference to " determines " or " determined " means a determination made in the absolute discretion of the person making the determination.
 
11.2 Tax gross-up
 
(a) Each Obligor shall make all payments to be made by it without any Tax Deduction, unless a Tax Deduction is required by law.
 
(b) The Borrower shall promptly upon becoming aware that an Obligor must make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction) notify the Lender accordingly. Similarly, the Lender shall notify an Obligor on becoming so aware in respect of a payment payable to the Lender.
 
(c) If a Tax Deduction is required by law to be made by an Obligor, the amount of the payment due from that Obligor shall be increased to an amount which (after making any Tax Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction had been required.
 
(d) If an Obligor is required to make a Tax Deduction, that Obligor shall make that Tax Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by law.
 
(e) Within 30 days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Obligor making that Tax Deduction shall deliver to the Lender evidence reasonably satisfactory to the Lender that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the relevant taxing authority.
 
11.3 Tax indemnity
 
(a) The Obligors shall (within three Business Days of demand by the Lender) pay to the Lender an amount equal to the loss, liability or cost which the Lender determines will be or has been (directly or indirectly) suffered for or on account of Tax by the Lender in respect of a Finance Document.
 
(b) Paragraph (a) above shall not apply:
 
(i) with respect to any Tax assessed on the Lender:
 

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(A) under the law of the jurisdiction in which the Lender is incorporated or, if different, the jurisdiction (or jurisdictions) in which the Lender is treated as resident for tax purposes; or
 
(B) under the law of the jurisdiction in which the Lender's Facility Office is located in respect of amounts received or receivable in that jurisdiction,
 
if that Tax is imposed on or calculated by reference to the net income received or receivable (but not any sum deemed to be received or receivable) by the Lender; or
 
(ii) to the extent a loss, liability or cost:
 
(A) is compensated for by an increased payment under Clause 11.2 ( Tax gross-up ); or
 
(B) relates to a FATCA Deduction required to be made by a Party.
 
(c) The Lender shall, if making, or intending to make, a claim under paragraph (a) above promptly notify the Borrower of the event which will give, or has given, rise to the claim.
 
11.4 Tax Credit
 
If an Obligor makes a Tax Payment and the Lender determines that:
 
(a) a Tax Credit is attributable to an increased payment of which that Tax Payment forms part, to that Tax Payment or to a Tax Deduction in consequence of which that Tax Payment was received; and
 
(b) the Lender has obtained and utilised that Tax Credit,
 
the Lender shall pay an amount to the Obligor which the Lender determines will leave it (after that payment) in the same after-Tax position as it would have been in had the Tax Payment not been required to be made by the Obligor.
 
11.5 Stamp taxes
 
The Obligors shall pay and, within three Business Days of demand, indemnify the Lender against any cost, loss or liability which the Lender incurs in relation to all stamp duty, registration and other similar Taxes payable in respect of any Finance Document.
 
11.6 VAT
 
(a) All amounts expressed to be payable under a Finance Document by any Party to the Lender which (in whole or in part) constitute the consideration for any supply for VAT purposes are deemed to be exclusive of any VAT which is chargeable on that supply, and accordingly, if VAT is or becomes chargeable on any supply made by the Lender to any Party under a Finance Document and the Lender is required to account to the relevant tax authority for the VAT, that Party must pay to the Lender (in addition to and at the same time as paying any other consideration for such supply) an amount equal to the amount of the VAT (and the Lender must promptly provide an appropriate VAT invoice to that Party).
 
(b) Where a Finance Document requires any Party to reimburse or indemnify the Lender for any cost or expense, that Party shall reimburse or indemnify (as the case may be) the Lender for the full amount of such cost or expense, including such part of it as represents VAT, save to the extent that the Lender reasonably determines that it is entitled to credit or repayment in respect of such VAT from the relevant tax authority.
 
(c) Any reference in this Clause 11.6 ( VAT ) to any Party shall, at any time when that Party is treated as a member of a group or unity (or fiscal unity) for VAT purposes, include (where
 

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appropriate and unless the context otherwise requires) a reference to the person who is treated at that time as making the supply, or (as appropriate) receiving the supply, under the grouping rules (provided for in Article 11 of Council Directive 2006/112/EC (or as implemented by the relevant member state of the European Union) so that a reference to a Party shall be construed as a reference to that Party or the relevant group or unity (or fiscal unity) of which that Party is a member for VAT purposes at the relevant time or the relevant representative member (or representative or head) of that group or unity at the relevant time (as the case may be).
 
(d) In relation to any supply made by the Lender to any Party under a Finance Document, if reasonably requested by the Lender, that Party must promptly provide the Lender with details of that Party's VAT registration and such other information as is reasonably requested in connection with the Lender's VAT reporting requirements in relation to such supply.
 
11.7 FATCA Information
 
(a) Subject to paragraph (c) below, each Party shall, within ten Business Days of a reasonable request by another Party:
 
(i) confirm to that other Party whether it is:
 
(A) a FATCA Exempt Party; or
 
(B) not a FATCA Exempt Party; and
 
(ii) supply to that other Party such forms, documentation and other information relating to its status under FATCA as that other Party reasonably requests for the purposes of that other Party's compliance with FATCA; and
 
(iii) supply to that other Party such forms, documentation and other information relating to its status as that other Party reasonably requests for the purposes of that other Party's compliance with any other law, regulation or exchange of information regime.
 
(b) If a Party confirms to another Party pursuant to sub-paragraph (i) of paragraph (a) above that it is a FATCA Exempt Party and it subsequently becomes aware that it is not, or has ceased to be a FATCA Exempt Party, that Party shall notify that other Party reasonably promptly.
 
(c) Paragraph (a) above shall not oblige the Lender to do anything and sub-paragraph (iii) of paragraph (a) above shall not oblige any other Party to do anything which would or might in its reasonable opinion constitute a breach of:
 
(i) any law or regulation;
 
(ii) any fiduciary duty; or
 
(iii) any duty of confidentiality.
 
(d) If a Party fails to confirm whether or not it is a FATCA Exempt Party or to supply forms, documentation or other information requested in accordance with sub-paragraphs (i) or (ii) of paragraph (a) above (including, for the avoidance of doubt, where paragraph (c) above applies), then such Party shall be treated for the purposes of the Finance Documents (and payments under them) as if it is not a FATCA Exempt Party until such time as the Party in question provides the requested confirmation, forms, documentation or other information.
 

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11.8 FATCA Deduction
 
(a) Each Party may make any FATCA Deduction it is required to make by FATCA, and any payment required in connection with that FATCA Deduction, and no Party shall be required to increase any payment in respect of which it makes such a FATCA Deduction or otherwise compensate the recipient of the payment for that FATCA Deduction.
 
(b) Each Party shall promptly, upon becoming aware that it must make a FATCA Deduction (or that there is any change in the rate or the basis of such FATCA Deduction), notify the Party to whom it is making the payment.
 
12 INCREASED COSTS
 
12.1 Increased costs
 
(a) Subject to Clause 12.3 ( Exceptions ), the Borrower shall, within three Business Days of a demand by the Lender, pay for the account of the Lender the amount of any Increased Costs incurred by the Lender or any of its Affiliates as a result of:
 
(i) the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation; or
 
(ii) compliance with any law or regulation made,
 
in each case after the date of this Agreement; or
 
(iii) the implementation, application of or compliance with Basel III or CRD IV or any law or regulation that implements or applies Basel III or CRD IV,
 
provided that , following the Lender's demand to the Borrower pursuant to this Clause, the Borrower shall have the right to prepay the Loan then outstanding in full subject to the provisions of Clause 7.3(a).
 
(b) In this Agreement:
 
(i) " Basel III " means:
 
(A) the agreements on capital requirements, a leverage ratio and liquidity standards contained in "Basel III: A global regulatory framework for more resilient banks and banking systems", "Basel III: International framework for liquidity risk measurement, standards and monitoring" and "Guidance for national authorities operating the countercyclical capital buffer" published by the Basel Committee on Banking Supervision in December 2010, each as amended, supplemented or restated;
 
(B) the rules for global systemically important banks contained in "Global systemically important banks: assessment methodology and the additional loss absorbency requirement - Rules text" published by the Basel Committee on Banking Supervision in November 2011, as amended, supplemented or restated; and
 
(C) any further guidance or standards published by the Basel Committee on Banking Supervision relating to "Basel III".
 
(ii) " CRD IV " means:
 
(A) Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26  June 2013 on prudential requirements for credit institutions and investment firms and amending regulation (EU) No. 648/2012;
 

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(B) Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC; and
 
(C) any other law or regulation which implements Basel III.
 
(iii) " Increased Costs " means:
 
(A) a reduction in the rate of return from the Facility or on the Lender's (or its Affiliate's) overall capital;
 
(B) an additional or increased cost; or
 
(C) a reduction of any amount due and payable under any Finance Document,
 
which is incurred or suffered by the Lender or any of its Affiliates to the extent that it is attributable to the Lender having entered into the Commitment or funding or performing its obligations under any Finance Document.
 
12.2 Increased cost claims
 
If the Lender intends to make a claim pursuant to Clause 12.1 ( Increased costs ) it shall notify the Borrower as soon as reasonably practicable of the event giving rise to the claim.
 
12.3 Exceptions
 
Clause 12.1 ( Increased costs ) does not apply to the extent any Increased Cost is:
 
(a) attributable to a Tax Deduction required by law to be made by an Obligor;
 
(b) attributable to a FATCA Deduction required to be made by a Party;
 
(c) compensated for by any payment made pursuant to Clause 13.3 ( Mandatory Cost ); or
 
(d) compensated for by Clause 11.3 ( Tax indemnity ) (or would have been compensated for under Clause 11.3 ( Tax indemnity ) but was not so compensated solely because any of the exclusions in paragraph (b) of Clause 11.3 ( Tax indemnity ) applied); or
 
(e) attributable to the wilful breach by the Lender or its Affiliates of any law or regulation.
 
13 OTHER INDEMNITIES
 
13.1 Currency indemnity
 
(a) If any sum due from an Obligor under the Finance Documents (a " Sum "), or any order, judgment or award given or made in relation to a Sum, has to be converted from the currency (the " First Currency ") in which that Sum is payable into another currency (the " Second Currency ") for the purpose of:
 
(i) making or filing a claim or proof against that Obligor; or
 
(ii) obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings,
 
that Obligor shall, as an independent obligation, on demand, indemnify the Lender against any cost, loss or liability arising out of or as a result of the conversion including any discrepancy between (A) the rate of exchange used to convert that Sum from the First
 

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Currency into the Second Currency and (B) the rate or rates of exchange available to that person at the time of its receipt of that Sum.
 
(b) Each Obligor waives any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency or currency unit other than that in which it is expressed to be payable.
 
13.2 Other indemnities
 
(a) Each Obligor shall, on demand, indemnify the Lender, any Receiver and any Delegate against:
 
(i) any cost, loss or liability incurred by it as a result of:
 
(A) the occurrence of any Event of Default;
 
(B) a failure by a Transaction Obligor to pay any amount due under a Finance Document on its due date;
 
(C) funding, or making arrangements to fund, the Loan requested by the Borrower in a Utilisation Request but not made by reason of the operation of any one or more of the provisions of this Agreement (other than by reason of default or negligence by the Lender alone);
 
(D) the Loan (or part of the Loan) not being prepaid in accordance with a notice of prepayment given by the Borrower;
 
(E) investigating any event which it reasonably believes is a Potential Event of Default or Event of Default; or
 
(F) acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised; or
 
(G) instructing lawyers, accountants, tax advisers, surveyors or other professional advisers or experts as permitted under the Finance Documents; and
 
(ii) any cost, loss or liability incurred by the Lender (otherwise than by reason of the Lender's gross negligence or wilful misconduct) or, in the case of any cost, loss or liability pursuant to Clause 29.8 ( Disruption to Payment Systems etc. ) notwithstanding the Lender's negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Lender.
 
(b) Each Obligor shall, on demand, indemnify the Lender, each Affiliate of the Lender, any Receiver and any Delegate and each officer or employee of the Lender or its Affiliate or any Receiver or Delegate (as applicable) (each such person for the purposes of this Clause 13.2 ( Other indemnities ) an " Indemnified Person "), against any cost, loss or liability incurred by that Indemnified Person pursuant to or in connection with any litigation, arbitration or administrative proceedings or regulatory enquiry, in connection with or arising out of the entry into and the transactions contemplated by the Finance Documents, having the benefit of any Security constituted by the Finance Documents or which relates to the condition or operation of, or any incident occurring in relation to, the Ship unless such cost, loss or liability is caused by the gross negligence or wilful misconduct of that Indemnified Person.
 
(c) No Party other than the Lender, the Receiver or the Delegate (as applicable) may take any proceedings against any officer, employee or agent of the Lender, the Receiver or the Delegate (as applicable) in respect of any claim it might have against the Lender, the Receiver or the Delegate or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Transaction Document or any Security Property.
 

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(d) Without limiting, but subject to any limitations set out in paragraph (b) above, the indemnity in paragraph (b) above shall cover any cost, loss or liability incurred by each Indemnified Person in any jurisdiction:
 
(i) arising or asserted under or in connection with any law relating to safety at sea, the ISM Code, any Environmental Law or any Sanctions; or
 
(ii) in connection with any Environmental Claim.
 
(e) Each Obligor shall, on demand, indemnify the Lender and every Receiver and Delegate against any cost, loss or liability incurred by any of them:
 
(i) in relation to or as a result of:
 
(A) any failure by the Borrower to comply with its obligations under Clause 14 ( Costs and Expenses );
 
(B) acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised;
 
(C) the taking, holding, protection or enforcement of the Finance Documents and the Transaction Security;
 
(D) the exercise of any of the rights, powers, discretions, authorities and remedies vested in the Lender and each Receiver and Delegate by the Finance Documents or by law;
 
(E) any default by any Transaction Obligor in the performance of any of the obligations expressed to be assumed by it in the Finance Documents;
 
(F) any action by any Transaction Obligor which vitiates, reduces the value of, or is otherwise prejudicial to, the Transaction Security; and
 
(G) instructing lawyers, accountants, tax advisers, surveyors or other professional advisers or experts as permitted under the Finance Documents.
 
(ii) which otherwise relates to any of the Security Property or the performance of the terms of this Agreement or the other Finance Documents (otherwise, in each case, than by reason of the Lender's, Receiver's or Delegate's gross negligence or wilful misconduct).
 
(f) Any Affiliate, Receiver or Delegate or any officer or employee of the Lender or of any of its Affiliates or any Receiver or any Delegate (as applicable) may rely on this Clause 13.2 ( Other indemnities ) and the provisions of the Third Parties Act subject to Clause 1.5 (Third party rights) and the provisions of the Third Parties Act.
 
13.3 Mandatory Cost
 
The Borrower shall, on demand by the Lender, pay to the Lender, such amount which the Lender certifies in a notice to the Borrower to be its good faith determination of the amount necessary to compensate it for complying with:
 
(a) if the Lender is lending from a Facility Office in a Participating Member State, the minimum reserve requirements (or other requirements having the same or similar purpose) of the European Central Bank or any other authority or agency which replaces all or any of its functions) in respect of loans made from that Facility Office; and
 
(b) if the Lender is lending from a Facility Office in the United Kingdom, any reserve asset, special deposit or liquidity requirements (or other requirements having the same or similar
 

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 purpose) of the Bank of England (or any other governmental authority or agency) and/or paying any fees to the Financial Conduct Authority and/or the Prudential Regulation Authority (or any other governmental authority or agency which replaces all or any of their functions),
 
which in each case is referable to the Loan.
 
13.4 Lender's management time
 
Any amount payable to the Lender under Clause 13.2 ( Other indemnities ) and Clause 14 ( Costs and Expenses ) shall include the cost of utilising the Lender's management time or other resources Provided that a Potential Event of Default or an Event of Default has occurred and is continuing and will be calculated on the basis of such reasonable daily or hourly rates as the Lender may notify to the Borrower. The Lender will as soon as reasonably practicable notify the Borrower in writing of any extraordinary management time which the Lender is envisaging to spend and will deliver a budget to the Borrower in respect of such extraordinary management time.
 
13.5 Mitigation
 
(a) The Lender shall, in consultation with the Borrower, take all reasonable steps to mitigate any circumstances which arise and which would result in any amount becoming payable under or pursuant to, or cancelled pursuant to, any of Clause 7.1 ( Illegality ), Clause 11 ( Tax Gross Up and Indemnities ), Clause 12 ( Increased Costs ) or paragraph (a) of Clause 13.3 ( Mandatory Cost ) including (but not limited to) assigning its rights under the Finance Documents to another Affiliate or Facility Office.
 
(b) Paragraph (a) above does not in any way limit the obligations of any Transaction Obligor under the Finance Documents.
 
13.6 Limitation of liability
 
(a) Each Obligor shall, on demand, indemnify the Lender for all costs and expenses reasonably incurred by the Lender as a result of steps taken by it under Clause 13.5 ( Mitigation ).
 
(b) The Lender is not obliged to take any steps under Clause 13.5 ( Mitigation ) if either:
 
(i) an Event of Default has occurred and is continuing; or
 
(ii) in the opinion of the Lender (acting reasonably), to do so might be prejudicial to it.
 
14 COSTS AND EXPENSES
 
14.1 Transaction expenses
 
The Obligors shall, on demand, pay the Lender the amount of all costs and expenses (including legal fees) reasonably incurred by it in connection with the negotiation, preparation, printing, execution and perfection of:
 
(a) this Agreement and any other documents referred to in this Agreement;
 
(b) the Transaction Security; and
 
(c) any other Finance Documents executed after the date of this Agreement.
 

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14.2 Amendment costs
 
If:
 
(a) a Transaction Obligor requests an amendment or waiver; or
 
(b) an amendment is required pursuant to Clause 29.6 ( Change of currency ); or
 
(c) a Transaction Obligor requests, and the Lender agrees to, the release of all or any part of the Security Assets from the Transaction Security,
 
the Obligors shall, on demand, reimburse the Lender for the amount of all costs and expenses (including legal fees) reasonably incurred by the Lender in responding to, evaluating, negotiating or complying with that request or requirement.
 
14.3 Enforcement and preservation costs
 
The Obligors shall, on demand, pay to the Lender the amount of all costs and expenses (including legal fees) incurred by the Lender in connection with the enforcement of, or the preservation of any rights under, any Finance Document or the Transaction Security and with any proceedings instituted by or against the Lender as a consequence of it entering into a Finance Document, taking or holding the Transaction Security, or enforcing those rights.
 

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SECTION 7
 
GUARANTEE
 
15 GUARANTEE AND INDEMNITY
 
15.1 Guarantee and indemnity
 
The Guarantor irrevocably and unconditionally:
 
(a) guarantees to the Lender punctual performance by the Borrower of all the Borrower's obligations under the Finance Documents;
 
(b) undertakes with the Lender that whenever the Borrower does not pay any amount when due under or in connection with any Finance Document, the Guarantor shall immediately on demand pay that amount as if it were the principal obligor; and
 
(c) agrees with the Lender that if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal, it will, as an independent and primary obligation, indemnify the Lender immediately on demand against any cost, loss or liability it incurs as a result of the Borrower not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by it under any Finance Document on the date when it would have been due.  The amount payable by the Guarantor under this indemnity will not exceed the amount it would have had to pay under this Clause 15 ( Guarantee and Indemnity ) if the amount claimed had been recoverable on the basis of a guarantee.
 
15.2 Continuing guarantee
 
This guarantee is a continuing guarantee and will extend to the ultimate balance of sums payable by the Borrower under the Finance Documents, regardless of any intermediate payment or discharge in whole or in part.
 
15.3 Reinstatement
 
If any discharge, release or arrangement (whether in respect of the obligations of any Transaction Obligor or any security for those obligations or otherwise) is made by the Lender in whole or in part on the basis of any payment, security or other disposition which is avoided or must be restored in insolvency, liquidation, administration or otherwise, without limitation, then the liability of the Guarantor under this Clause 15 ( Guarantee and Indemnity ) will continue or be reinstated as if the discharge, release or arrangement had not occurred.
 
15.4 Waiver of defences
 
The obligations of the Guarantor under this Clause 15 ( Guarantee and Indemnity ) and in respect of any Transaction Security will not be affected or discharged by an act, omission, matter or thing which, but for this Clause 15.4 ( Waiver of defences ), would reduce, release or prejudice any of its obligations under this Clause 15 ( Guarantee and Indemnity ) or in respect of any Transaction Security (without limitation and whether or not known to it or the Lender) including:
 
(a) any time, waiver or consent granted to, or composition with, any Transaction Obligor or other person;
 
(b) the release of any other Transaction Obligor or any other person under the terms of any composition or arrangement with any creditor;
 
(c) the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect or delay in perfecting, or refusal or neglect to take up or enforce, or delay in taking
 

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or enforcing any rights against, or security over assets of, any Transaction Obligor or other person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realise the full value of any security;
 
(d) any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of a Transaction Obligor or any other person;
 
(e) any amendment, novation, supplement, extension, restatement (however fundamental and whether or not more onerous) or replacement of any Finance Document or any other document or security including, without limitation, any change in the purpose of, any extension of or any increase in any facility or the addition of any new facility under any Finance Document or other document or security;
 
(f) any unenforceability, illegality or invalidity of any obligation of any person under any Finance Document or any other document or security; or
 
(g) any insolvency or similar proceedings.
 
15.5 Immediate recourse
 
The Guarantor waives any right it may have of first requiring the Lender (or any trustee or agent on its behalf) to proceed against or enforce any other rights or security or claim payment from any person (including without limitation to commence any proceedings under any Finance Document or to enforce any Transaction Security) before claiming or commencing proceedings under this Clause 15 ( Guarantee and Indemnity ).  This waiver applies irrespective of any law or any provision of a Finance Document to the contrary.
 
15.6 Appropriations
 
Until all amounts which may be or become payable by the Transaction Obligors under or in connection with the Finance Documents have been irrevocably paid in full, the Lender (or any trustee or agent on its behalf) may:
 
(a) refrain from applying or enforcing any other moneys, security or rights held or received by the Lender (or any trustee or agent on its behalf) in respect of those amounts, or apply and enforce the same in such manner and order as it sees fit (whether against those amounts or otherwise) and the Guarantor shall not be entitled to the benefit of the same; and
 
(b) hold in an interest-bearing suspense account any moneys received from the Guarantor or on account of the Guarantor's liability under this Clause 15 ( Guarantee and Indemnity ).
 
15.7 Deferral of Guarantor's rights
 
All rights which the Guarantor at any time has (whether in respect of this guarantee, a mortgage or any other transaction) against the Borrower, any other Transaction Obligor or their respective assets shall be fully subordinated to the rights of the Lender under the Finance Documents and until the end of the Security Period and unless the Lender otherwise directs, the Guarantor will not exercise any rights which it may have (whether in respect of any Finance Document to which it is a Party or any other transaction) by reason of performance by it of its obligations under the Finance Documents or by reason of any amount being payable, or liability arising, under this Clause 15 ( Guarantee and Indemnity ):
 
(a) to be indemnified by a Transaction Obligor;
 
(b) to claim any contribution from any third party providing security for, or any other guarantor of, any Transaction Obligor's obligations under the Finance Documents;
 

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(c) to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Lender under the Finance Documents or of any other guarantee or security taken pursuant to, or in connection with, the Finance Documents by the Lender;
 
(d) to bring legal or other proceedings for an order requiring any Transaction Obligor to make any payment, or perform any obligation, in respect of which the Guarantor has given a guarantee, undertaking or indemnity under Clause 15.1 ( Guarantee and indemnity );
 
(e) to exercise any right of set-off against any Transaction Obligor; and/or
 
(f) to claim or prove as a creditor of any Transaction Obligor in competition with the Lender.
 
If the Guarantor receives any benefit, payment or distribution in relation to such rights it shall hold that benefit, payment or distribution to the extent necessary to enable all amounts which may be or become payable to the Lender by the Transaction Obligors under or in connection with the Finance Documents to be repaid in full on trust for the Lender and shall promptly pay or transfer the same to the Lender or as the Lender may direct for application in accordance with Clause 29 ( Payment Mechanics ).
 
15.8 Additional security
 
This guarantee and any other Security given by the Guarantor is in addition to and is not in any way prejudiced by, and shall not prejudice, any other guarantee or Security or any other right of recourse now or subsequently held by the Lender or any right of set-off or netting or right to combine accounts in connection with the Finance Documents.
 
15.9 Applicability of provisions of Guarantee to other Security
 
Clauses 15.2 ( Continuing guarantee ), 15.3 ( Reinstatement ), 15.4 ( Waiver of defences ), 15.5 ( Immediate recourse ), 15.6 ( Appropriations ), 15.7 ( Deferral of Guarantor's rights ) and 15.8 ( Additional security ) shall apply, with any necessary modifications, to any Security which the Guarantor creates (whether at the time at which it signs this Agreement or at any later time) to secure the Secured Liabilities or any part of them.
 

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SECTION 8
 
REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT
 
16 REPRESENTATIONS
 
16.1 General
 
Each Obligor makes the representations and warranties set out in this Clause 16 ( Representations ) to the Lender on the date of this Agreement.
 
16.2 Status
 
(a) It is a corporation, duly incorporated and validly existing in good standing under the law of its jurisdiction of incorporation.
 
(b) It and each Transaction Obligor has the power to own its assets and carry on its business as it is being conducted.
 
16.3 Share capital and ownership
 
(a) The Borrower has an authorised share capital of 500 registered and/or bearer shares of no par value, all of which shares have been issued in registered form and held by the Guarantor.
 
(b) The legal title to and beneficial interest in the shares in the Borrower is held free of any Security or any other claim by the Guarantor.
 
(c) None of the shares in the Borrower is subject to any option to purchase, pre-emption rights or similar rights.
 
16.4 Binding obligations
 
The obligations expressed to be assumed by it in each Transaction Document to which it is a party are legal, valid, binding and enforceable obligations.
 
16.5 Validity, effectiveness and ranking of Security
 
(a) Each Finance Document to which it is a party does now or, as the case may be, will upon execution and delivery and, where applicable, registration as provided for in that Finance Document create the Security it purports to create over any assets to which such Security, by its terms, relates, and such Security will, when created or intended to be created, be valid and effective.
 
(b) No third party has or will have any Security (except for Permitted Security) over any assets that are the subject of any Transaction Security granted by it.
 
(c) The Transaction Security granted by it to the Lender has or will when created or intended to be created have first ranking priority or such other priority it is expressed to have in the Finance Documents and is not subject to any prior ranking or pari passu ranking security.
 
(d) No concurrence, consent or authorisation of any person is required for the creation of or otherwise in connection with any Transaction Security.
 
16.6 Non-conflict with other obligations
 
The entry into and performance by it of, and the transactions contemplated by, each Transaction Document to which it is a party do not and will not conflict with:
 

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(a) any law or regulation of any Pertinent Jurisdiction or, to its knowledge, of any other jurisdiction applicable to it;
 
(b) its constitutional documents; or
 
(c) any agreement or instrument binding upon it or any of its assets or constitute a default or termination event (however described) under any such agreement or instrument.
 
16.7 Power and authority
 
(a) It has the power to enter into, perform and deliver, and has taken all necessary action to authorise:
 
(i) its entry into, performance and delivery of, each Transaction Document to which it is or will be a party and the transactions contemplated by those Transaction Documents; and
 
(ii) in the case of the Borrower, its registration of the Ship under the Approved Flag.
 
(b) No limit on its powers will be exceeded as a result of the borrowing, granting of security or giving of guarantees or indemnities contemplated by the Transaction Documents to which it is a party.
 
16.8 Validity and admissibility in evidence
 
All Authorisations required or desirable:
 
(a) to enable it lawfully to enter into, exercise its rights and comply with its obligations in the Transaction Documents to which it is a party; and
 
(b) to make the Transaction Documents to which it is a party admissible in evidence in its Relevant Jurisdictions,
 
have been obtained or effected and are in full force and effect.
 
16.9 Governing law and enforcement
 
(a) The choice of governing law of each Transaction Document to which it is a party will be recognised and enforced in its Relevant Jurisdictions.
 
(b) Any judgment obtained in relation to a Transaction Document to which it is a party in the jurisdiction of the governing law of that Transaction Document will be recognised and enforced in its Relevant Jurisdictions.
 
16.10 Insolvency
 
No:
 
(a) corporate action, legal proceeding or other procedure or step described in paragraph (a) of Clause 25.8 ( Insolvency proceedings ); or
 
(b) creditors' process described in Clause 25.9 ( Creditors' process ),
 
has been taken or, to its knowledge, threatened in relation to a member of the Group; and none of the circumstances described in Clause 25.7 ( Insolvency ) applies to a member of the Group.
 

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16.11 No filing or stamp taxes
 
Under the laws of its Relevant Jurisdictions it is not necessary that the Finance Documents to which it is a party be registered, filed, recorded, notarised or enrolled with any court or other authority in that jurisdiction or that any stamp, registration, notarial or similar Taxes or fees be paid on or in relation to the Finance Documents to which it is a party or the transactions contemplated by those Finance Documents, except registration of the Mortgage at the relevant Ship's Registry which registration and filings and fees will be made and paid on the date of such Mortgage.
 
16.12 Deduction of Tax
 
It is not required to make any Tax Deduction from any payment it may make under any Finance Document to which it is a party.
 
16.13 No default
 
(a) On the date of this Agreement and on the Utilisation Date, no Event of Default is continuing or might reasonably be expected to result from the making of the Utilisation or the entry into, the performance of, or any transaction contemplated by, any Transaction Document.
 
(b) No other event or circumstance is outstanding which constitutes a default or a termination event (however described) under any other agreement or instrument which is binding on it or to which its assets are subject which might have a Material Adverse Effect.
 
16.14 No misleading information
 
(a) Any factual information provided by any member of the Group for the purposes of this Agreement was true and accurate in all material respects as at the date it was provided or as at the date (if any) at which it is stated.
 
(b) The financial projections contained in any such information have been prepared on the basis of recent historical information and on the basis of reasonable assumptions.
 
(c) Nothing has occurred or been omitted from any such information and no information has been given or withheld that results in any such information being untrue or misleading in any material respect.
 
16.15 Financial Statements
 
(a) Its Original Financial Statements or its most recent financial statements delivered pursuant to Clause 17.2 ( Financial statements ) (as the case may be) were prepared in accordance with GAAP consistently applied.
 
(b) Its Original Financial Statements or its most recent financial statements delivered pursuant to Clause 17.2 ( Financial statements ) (as the case may be) give a true and fair view of its financial condition as at the end of the relevant financial year and results of operations during the relevant financial year (consolidated in the case of the Guarantor).
 
(c) There has been no material adverse change in its assets, business or financial condition (or the assets, business or consolidated financial condition of the Group, in the case of the Guarantor) since the financial year ended in respect of the Original Financial Statements or its most recent financial statements delivered pursuant to Clause 17.2 ( Financial statements ) (as the case may be).
 
(d) Its most recent financial statements delivered pursuant to Clause 17.2 ( Financial statements ):
 

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(i) have been prepared in accordance with Clause 17.4 ( Requirements as to financial statements ); and
 
(ii) give a true and fair view of (if audited) or fairly represent (if unaudited) its financial condition as at the end of the relevant financial year and operations during the relevant financial year (consolidated in the case of the Guarantor).
 
(e) Since the date of the most recent financial statements delivered pursuant to Clause 17.2 ( Financial statements ) there has been no material adverse change in its business, assets or financial condition (or the business or consolidated financial condition of the Group, in the case of the Guarantor).
 
16.16 Pari passu ranking
 
Its payment obligations under the Finance Documents to which it is a party rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors, except for obligations mandatorily preferred by law applying to companies generally.
 
16.17 No proceedings pending or threatened
 
No litigation, arbitration or administrative proceedings or investigations (including proceedings or investigations relating to any alleged or actual breach of the ISM Code or of the ISPS Code) of or before any court, arbitral body or agency have (to the best of its knowledge and belief (having made due and careful enquiry)) been started or threatened against it or any Transaction Obligor.
 
16.18 Validity and completeness of the MOA
 
(a) The MOA constitutes legal, valid, binding and enforceable obligations of the Seller.
 
(b) The copy of the MOA delivered to the Lender before the date of this Agreement is a true and complete copy.
 
(c) No amendment or addition to the MOA has been agreed nor have any rights under the MOA been waived.
 
16.19 No rebates etc.
 
There is no agreement or understanding to allow or pay any rebate, premium, inducement, commission, discount or other benefit or payment (however described) to the Borrower, the Seller or a third party in connection with the purchase by the Borrower of the Ship, other than as disclosed to the Lender in writing on or before the date of this Agreement.
 
16.20 Valuations
 
(a) All information supplied by it or on its behalf to an Approved Valuer for the purposes of a valuation delivered to the Lender in accordance with this Agreement was true and accurate as at the date it was supplied or (if appropriate) as at the date (if any) at which it is stated to be given.
 
(b) It has not omitted to supply any information to an Approved Valuer which, if disclosed, would adversely affect any valuation prepared by such Approved Valuer.
 
(c) There has been no change to the factual information provided pursuant to paragraph (a) above in relation to any valuation between the date such information was provided and the date of that valuation which, in either case, renders that information untrue or misleading in any material respect.
 

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16.21 No breach of laws
 
It has not breached any law or regulation which breach has or is reasonably likely to have a Material Adverse Effect.
 
16.22 No Charter
 
The Ship is not subject to any Charter other than a Permitted Charter.
 
16.23 Compliance with Environmental Laws
 
All Environmental Laws relating to the ownership, operation and management of the Ship and the business of each member of the Group (as now conducted and as reasonably anticipated to be conducted in the future) and the terms of all Environmental Approvals have been complied with.
 
16.24 No Environmental Claim
 
No Environmental Claim has been made or threatened against any member of the Group or the Ship.
 
16.25 No Environmental Incident
 
No Environmental Incident has occurred and no person has claimed that an Environmental Incident has occurred.
 
16.26 ISM and ISPS Code compliance
 
All requirements of the ISM Code and the ISPS Code as they relate to the Borrower, the Approved Technical Manager and the Ship have been complied with.
 
16.27 Taxes paid
 
(a) It is not and no other member of the Group is materially overdue in the filing of any Tax returns and it is not (and no other member of the Group is) overdue in the payment of any amount in respect of Tax.
 
(b) No claims or investigations are being, or are reasonably likely to be, made or conducted against it (or any other member of the Group) with respect to Taxes.
 
16.28 Financial Indebtedness
 
The Borrower does not have any Financial Indebtedness outstanding other than Permitted Financial Indebtedness.
 
16.29 Overseas companies
 
No Transaction Obligor has delivered particulars, whether in its name stated in the Finance Documents or any other name, of any UK Establishment to the Registrar of Companies as required under the Overseas Regulations or, if it has so registered, it has provided to the Lender sufficient details to enable an accurate search against it to be undertaken by the Lender at the Companies Registry.
 
16.30 Good title to assets
 
It has good, valid and marketable title to, or valid leases or licences of, and all appropriate Authorisations to use, the assets necessary to carry on its business as presently conducted.
 

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16.31 Ownership
 
(a) On the Utilisation Date, the Borrower will be the sole legal and beneficial owner of the Ship, the Earnings and the Insurances.
 
(b) With effect on and from the date of its creation or intended creation, each Transaction Obligor will be the sole legal and beneficial owner of any asset that is the subject of any Transaction Security created or intended to be created by such Transaction Obligor.
 
(c) The constitutional documents of each Transaction Obligor do not and could not restrict or inhibit any transfer of the shares of the Borrower on creation or enforcement of the security conferred by the Security Documents.
 
16.32 Centre of main interests and establishments
 
For the purposes of The Council of the European Union Regulation No. 1346/2000 on Insolvency Proceedings (the " Regulation "), its centre of main interest (as that term is used in Article 3(1) of the Regulation) is situated in its jurisdiction of incorporation and it has no "establishment" (as that term is used in Article 2(h) of the Regulation) in any other jurisdiction.
 
16.33 Place of business
 
No Transaction Obligor has a place of business in any country other than its country of incorporation and its head office functions are carried out in the case of the Borrower at c/o 16 Grigoriou Lambraki, 16674 Glyfada, Athens, Greece.
 
16.34 No employee or pension arrangements
 
No Transaction Obligor has any employees or any liabilities under any pension scheme.
 
16.35 Sanctions
 
(a) Neither Obligor, nor any of its Subsidiaries (nor any director, officer, employee, Affiliate, agent or representative of it or any of its Subsidiaries) is a person that is, or is owned or controlled by a person that is:
 
(i) the subject of any economic or financial sanctions or trade embargoes implemented, administered or enforced by the U.S. Department of the Treasury's Office of Foreign Assets Control, the U.S. Departments of State or Commerce or any other US government authority, the United Nations Security Council, the European Union, Her Majesty's Treasury, the Department for Business, Innovation and Skills or any other UK government authority, any French government authority, or other such " Sanctions Authority " in a jurisdiction of relevance to the Facility (collectively, " Sanctions ");
 
(ii) located, organised or resident in a country or territory that is the subject of Sanctions (as of the date of this agreement, comprising Crimea, Cuba, Iran, North Korea, Sudan and Syria, but subject to such changes as take place over time) (" Sanctioned Countries "); or
 
(iii) engaged in any activity that could trigger a designation under existing Sanctions administered by a Sanctions Authority (" Sanctionable Activity ").
 
(b) It derives no more than one (1) percent of its revenues and profits on average from business involving any persons or entities that are the subject of Sanctions (" Restricted Parties ") or Sanctioned Countries and that such business, if any, complies with all applicable Sanctions.
 

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16.36 Ship Sanctions
 
(a) The Ship is not currently subject to any Sanctions nor will the ownership, operation, possession, use, leasing or any other dealing in respect of the Ship by the Borrower contravene any Sanctions or provide a basis for the Ship or the Borrower to be designated as subject to Sanctions.
 
(b) The Ship will not be moved to a Sanctioned Country.
 
16.37 Anti-terrorism Law
 
Each Transaction Obligor is in compliance with all Anti-Terrorism Laws.

16.38 Repetition
 
The Repeating Representations are deemed to be made by each Obligor by reference to the facts and circumstances then existing on the date of each Utilisation Request and the first day of each Interest Period.
 
17 INFORMATION UNDERTAKINGS
 
17.1 General
 
The undertakings in this Clause 17 ( Information Undertakings ) remain in force throughout the Security Period unless the Lender otherwise permits.
 
17.2 Financial statements
 
The Borrower shall supply to the Lender:
 
(a) as soon as they become available, but in any event within 180 days after the end of each of its financial years:
 
(i) its unaudited financial statements for that financial year; and
 
(ii) the audited consolidated financial statements of the Guarantor for that financial year; and
 
(b) as soon as the same become available, but in any event within 90 days after the end of each quarter of each of its financial years:
 
(i) its unaudited financial statements for that financial quarter year; and
 
(ii) the unaudited consolidated financial statement of the Guarantor for that financial quarter year; and
 
(c) as soon as possible, but in no event later than 90 days after the end of each financial year of the Borrower, a budget in a format approved by the Lender which shows all anticipated income and expenditure in respect of the Ship during the next financial year of the Borrower.
 
17.3 Compliance Certificate
 
(a) The Guarantor shall supply to the Lender, with each set of financial statements delivered pursuant to sub-paragraph (ii) of paragraph (a) or sub-paragraph (ii) of paragraph (b) of Clause 17.2 ( Financial statements ), commencing with the first Testing Date following the Deferred Testing Date, a Compliance Certificate.
 

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(b) Each Compliance Certificate shall be signed by 2 Directors or the Chief Executive Officer of the Guarantor and shall be delivered with the financial statements delivered pursuant to sub-paragraph (ii) of paragraph (a) and sub-paragraph (ii) of paragraph (b) of Clause 17.2 ( Financial statements ).
 
17.4 Requirements as to financial statements
 
(a) Each set of financial statements delivered by the Borrower pursuant to Clause 17.2 ( Financial statements ) shall be certified by a director of the company as giving a true and fair view (if audited) or fairly representing (if unaudited) its financial condition and operations as at the date as at which those financial statements were drawn up.
 
(b) The Borrower shall procure that each set of financial statements delivered pursuant to Clause 17.2 ( Financial statements ) is prepared using GAAP.
 
(c) The Borrower shall procure that each set of financial statements of an Obligor delivered pursuant to Clause 17.2 ( Financial statements ) is prepared using GAAP, accounting practices and financial reference periods consistent with those applied in the preparation of the Original Financial Statements for the Guarantor unless, in relation to any set of financial statements, it notifies the Lender that there has been a change in GAAP, the accounting practices or reference periods and its auditors (or, if appropriate, the auditors of the Guarantor) deliver to the Lender:
 
(i) a description of any change necessary for those financial statements to reflect the GAAP, accounting practices and reference periods upon which the Guarantor's Original Financial Statements were prepared; and
 
(ii) sufficient information, in form and substance as may be reasonably required by the Lender, to enable the Lender to determine whether Clause 18 ( Financial Covenants ) has been complied with and make an accurate comparison between the financial position indicated in those financial statements and the Guarantor's Original Financial Statements.
 
Any reference in this Agreement to those financial statements shall be construed as a reference to those financial statements as adjusted to reflect the basis upon which the Original Financial Statements were prepared.
 
17.5 Information: miscellaneous
 
Each Obligor shall supply to the Lender:
 
(a) all documents dispatched by it to its shareholders (or any class of them) related to (i) any event in Clauses 25.7 ( Insolvency ), 25.8 ( Insolvency proceedings ) or 25.9 ( Creditors' process ), (ii) any Finance Document or (iii) any event or circumstances which may reasonably lead to a Material Adverse Effect or to its creditors, in each case generally at the same time as they are dispatched;
 
(b) promptly upon becoming aware of them, the details of any litigation, arbitration or administrative proceedings or investigations (including proceedings or investigations relating to any alleged or actual breach of the ISM Code or of the ISPS Code) which are current, threatened or pending against any member of the Group, and which might, if adversely determined, have a Material Adverse Effect;
 
(c) promptly, its constitutional documents where these have been amended or varied;
 
(d) promptly, such further information and/or documents regarding:
 
(i) the Ship, goods transported on the Ship, the Earnings or the Insurances;
 

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(ii) the Security Assets;
 
(iii) compliance of the Transaction Obligors with the terms of the Finance Documents;
 
(iv) the financial condition, business and operations of any member of the Group,
 
as the Lender may reasonably request; and
 
(e) promptly, such further information and/or documents as the Lender may reasonably request  so as to enable the Lender to comply with any laws applicable to it or as may be required by any regulatory authority.
 
17.6 Notification of Event of Default
 
(a) Each Obligor shall notify the Lender of any Event of Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence (unless that Obligor is aware that a notification has already been provided by another Obligor).
 
(b) Promptly upon a request by the Lender, the Borrower shall supply to the Lender a certificate signed by two of its directors or senior officers on its behalf certifying that no Event of Default is continuing (or if an Event of Default is continuing, specifying the Event of Default and the steps, if any, being taken to remedy it).
 
17.7 "Know your customer" checks
 
If:
 
(a) the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the date of this Agreement;
 
(b) any change in the status of a Transaction Obligor (including, without limitation, a change of ownership of a Transaction Obligor) after the date of this Agreement; or
 
(c) a proposed assignment by the Lender of any of its rights under this Agreement,
 
obliges the Lender (or, in the case of paragraph (c) above, any prospective assignee) to comply with "know your customer" or similar identification procedures in circumstances where the necessary information is not already available to it, each Obligor shall promptly upon the request of the Lender supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Lender (for itself or, in the case of the event described in paragraph (c) above, on behalf of any prospective assignee) in order for the Lender or, in the case of the event described in paragraph (c) above, any prospective assignee to carry out and be satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.
 
18 FINANCIAL COVENANTS
 
18.1 Subject to Clause 19.25, the Guarantor shall ensure that on each Testing Date commencing on the Deferred Testing Date and at all other times during the Security Period:
 
(a) the Leverage Ratio shall not exceed 75 per cent.; and
 
(b) the ratio of EBITDA to Net Interest Expense shall not be less than 2:1; and
 
(c) it shall maintain Cash and Cash Equivalents (including any contractually committed but undrawn parts of shareholders' Notes made by the Guarantor) in an amount not less than the product of (i) the number of Fleet Ships and (ii) $500,000. For the avoidance of doubt, any amounts required to be standing to accounts held with the Lender pursuant to Clause
 

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18.3 shall be taken into account when calculating such Cash and Cash Equivalents in respect of the Ship.
 
18.2 Testing Date
 
The financial covenants of Clause 18.1 shall be tested on any quarterly and yearly period to the end of which the financial statements required to be delivered pursuant to Clause 17.2 ( Financial statements ) sub-paragraph (ii) of paragraphs (a) and (b) (as the case may be), are prepared, commencing from the Accounting Period which starts on the Deferred Testing Date, in relation to the financial covenants of Clause 18 ( Financial Covenants ).
 
18.3 Borrower's Minimum Liquidity
 
The Borrower shall ensure that a minimum credit balance of $500,000 is held with the Lender in the Earnings Account (free of Security other than in favour of the Lender), during the period commencing on 1 January 2018.
 
For the purposes of Clause 18 ( Financial Covenants ):
 
" Accounting Period "  means each consecutive 3-month period, during the Security Period ending on 31 December, 31 March, 30 June and 30 September of each financial year;
 
" Applicable Accounts " means, as at the date of calculation or, as the case may be, in respect of an Accounting Period, the annual audited or quarterly unaudited (as the case may be), consolidated financial statements the Guarantor is obliged to deliver to the Lender pursuant to Clause 17.2 ( Financial statements ) paragraphs (a) and (b);
 
" Cash "   shall have the meaning given to such term in the latest Applicable Accounts;
 
" Cash Equivalents "   shall have the meaning given to such term in the latest Applicable Accounts;
 
 " Consolidated Market Value Adjusted Total Assets " means, at any relevant time, the aggregate of the Group's Total Current Assets and Consolidated Market Value Adjusted Other Assets;
 
" Consolidated Market Value Adjusted Other Assets " means, as of the last day of an Accounting Period, the Fleet Market Value plus the book value (less depreciation computed in accordance with the Applicable Accounts on a consolidated basis of all noncurrent assets of the Group (i.e. excluding Fleet Ships), as stated in the then most recent and relevant Applicable Accounts;
 
"EBITDA " means, as of the last day of an Accounting Period or on any other day, the consolidated net pre-taxation profits of the Group in respect of the relevant Rolling Period, as stated in the then most recent and relevant Applicable Accounts, and all as adjusted by:
 
(a) adding back Net Interest Expense;
 
(b) adding back depreciation and amortisation;
 
(c) adding back any non-cash expenses and non-cash losses;
 
(d) deducting any non-cash income and non-cash gains;
 
(e) taking no account of any exceptional or extraordinary item;
 
(f) taking no account of any revaluation of an asset or any loss or gain over book value arising on the disposal of an asset by a member of the Group during that Rolling Period; and
 

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(g) adding back the expenses of the special and intermediate surveys, in case these expenses are not capitalized.
 
 " Fleet Market Value " means, in relation to the Fleet Ships, as of the date of calculation, the aggregate market value of the Fleet Ships as most recently determined pursuant to valuations obtained in accordance with Clause 23 ( Security Cover ) and prepared:
 
(a) as at not more than 14 Business Days previously;
 
(b)              by an Approved Valuer;
 
(c) with or  without physical inspection of the Fleet Ships;
 
(d) on the basis of a sale for prompt delivery for cash on normal arm's length commercial terms as between a willing seller and a willing buyer free of any charter;
 
"Group's   Total Current Assets " means, the aggregate of the cash and marketable securities, trade and other receivables from persons (other than persons being members of the Group) realisable within 1 year amount determined on a consolidated basis less any discounts, allowances and activated goodwill, in each case as shown in the latest Applicable Accounts;
 
"Group's Total Liabilities"  means the total liabilities of the Group determined on a consolidated basis less any drawn amounts of shareholders' Notes, in each case as shown in the latest Applicable Accounts;
 
" Leverage Ratio " means at any time the ratio (expressed as a percentage) of the Group's Total Liabilities divided by the Consolidated Market Value Adjusted Total Assets.
 
"Net Interest Expense " means, as of the last day of an Accounting Period, all interest paid by the Group minus all interest income received by the Group in respect of the relevant Rolling Period, as stated in the then most recent and relevant Applicable Accounts;
 
"Notes " means certain unsecured notes issued or to be issued by the Guarantor to its shareholders and held or to be held (as the case may be) at the relevant Testing Date by those shareholders in exchange for loans made by those shareholders to the Guarantor for on-lending to the Borrower and the other members of the Group to assist them with their working capital requirements.
 
" Rolling Period " means, as of the last day of an Accounting Period, the immediately prior twelve-month period ending on such day.
 
19 GENERAL UNDERTAKINGS
 
19.1 General
 
The undertakings in this Clause 19 ( General Undertakings ) remain in force throughout the Security Period except as the Lender may otherwise permit.
 
19.2 Authorisations
 
Each Obligor shall promptly:
 
(a) obtain, comply with and do all that is necessary to maintain in full force and effect; and
 
(b) supply certified copies to the Lender of,
 
any Authorisation required under any law or regulation of a Relevant Jurisdiction or the state of the Approved Flag at any time of the Ship to enable it to:
 

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(i) perform its obligations under the Transaction Documents to which it is a party;
 
(ii) ensure the legality, validity, enforceability or admissibility in evidence in any Relevant Jurisdiction or in the state of the Approved Flag at any time of the Ship of any Transaction Document to which it is a party; and
 
(iii) own and operate the Ship (in the case of the Borrower).
 
19.3 Compliance with laws
 
Each Obligor shall, and shall procure that each other Transaction Obligor will, comply in all respects with all laws and regulations to which it may be subject, if failure so to comply has or is reasonably likely to have a Material Adverse Effect.
 
19.4 Compliance with Sanctions
 
(a) No Obligor shall (and the Guarantor shall ensure that no other member of the Group will) directly or indirectly use the proceeds of the Facility, or lend, contribute or otherwise make available such proceeds, to any subsidiary, joint venture partner or other person:
 
(i) to fund or facilitate any activities or business of, with or related to any Restricted Party or any person who, at the time of such funding or facilitation, is in a Sanctioned Country, to the extent the Sanctions would prohibit nationals or residents of the European Union and/or the United States from directly engaging in such activities or business; or
 
(ii) in any other manner that would result in a violation of Sanctions by any person (including any person participating in the Facility, whether as a Lender, advisor, investor or otherwise).
 
(b) Each Obligor shall ensure that no Restricted Party will have any property interest in any funds repaid or remitted by any Obligor in connection with the Facility.
 
(c) No Obligor shall (and the Guarantor shall ensure that no other member of the Group will) engage in any Sanctionable Activity or knowingly violate applicable Sanctions.
 
(d) To the extent an Obligor engages in any business involving Restricted Parties or Sanctioned Countries, it shall do so without any involvement, directly or indirectly, of any Lender or the Facility and shall maintain policies and procedures designed to prevent such business from violating applicable Sanctions.
 
19.5 Compliance with Ship Sanctions
 
(a) No Obligor shall (and the Guarantor shall ensure that no other member of the Group will) own, operate, possess, use, lease, dispose of or otherwise deal with, or procure or allow the ownership, operation, possession, use, leasing or disposal of, or any other dealing with, the Ship or part thereof for any purpose which would violate, or cause the Lender or the Borrower to violate, any Sanctions or involve any Sanctionable Activity.
 
(b) No Restricted Party will have any property interest in the Ship nor will any person, country or territory that is a subject of Sanctions supply any inputs to, receive any output from or derive any other financial or economic benefit from the Ship.
 
19.6 Environmental compliance
 
Each Obligor shall, and shall procure that each other Transaction Obligor will, and the Guarantor shall ensure that each other member of the Group will:
 
(a) comply with all Environmental Laws;
 

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(b) obtain, maintain and ensure compliance with all requisite Environmental Approvals;
 
(c) implement procedures to monitor compliance with and to prevent liability under any Environmental Law,
 
where failure to do so has or is reasonably likely to have a Material Adverse Effect.
 
19.7 Environmental claims
 
Each Obligor shall, and shall procure that each other Transaction Obligor will, (through the Guarantor) promptly upon becoming aware of the same, inform the Lender in writing of:
 
(a) any Environmental Claim against any member of the Group which is current, pending or threatened; and
 
(b) any facts or circumstances which are reasonably likely to result in any Environmental Claim being commenced or threatened against any member of the Group,
 
where the claim, if determined against that member of the Group, has or is reasonably likely to have a Material Adverse Effect.
 
19.8 Taxation
 
(a) Each Obligor pay and discharge all Taxes imposed upon it or its assets within the time period allowed without incurring penalties unless and only to the extent that:
 
(i) such payment is being contested in good faith;
 
(ii) adequate reserves are maintained for those Taxes and the costs required to contest them have been disclosed in its latest financial statements delivered to the Lender under Clause 17.2 ( Financial statements ); and
 
(iii) such payment can be lawfully withheld and failure to pay those Taxes does not have or is not reasonably likely to have a Material Adverse Effect.
 
(b) No Obligor shall change its residence for Tax purposes.
 
19.9 Overseas companies
 
Each Obligor shall, and shall procure that each other Transaction Obligor will, promptly inform the Lender if it delivers to the Registrar particulars required under the Overseas Regulations of any UK Establishment and it shall comply with any directions given to it by the Lender regarding the recording of any Transaction Security on the register which it is required to maintain under The Overseas Companies (Execution of Documents and Registration of Charges) Regulations 2009.
 
19.10 No change to centre of main interests
 
No Obligor shall change the location of its centre of main interest (as that term is used in Article 3(1) of the Regulation) from that stated in relation to it in Clause 16.32 ( Centre of main interests and establishments ) and it will create "no establishment" (as that term is used in Article 2(h) of the Regulation) in any other jurisdiction.
 
19.11 Pari passu ranking
 
Each Obligor shall, and shall procure that each other Transaction Obligor will, ensure that at all times any unsecured and unsubordinated claims of the Lender against it under the Finance Documents rank at least pari passu with the claims of all its other unsecured and
 

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unsubordinated creditors except those creditors whose claims are mandatorily preferred by laws of general application to companies.
 
19.12 Title
 
(a) With effect from the Utilisation Date, the Borrower shall hold the legal title to, and own the entire beneficial interest in the Ship, the Earnings and the Insurances.
 
(b) With effect on and from its creation or intended creation, each Transaction Obligor shall hold the legal title to, and own the entire beneficial interest in any other assets the subject of any Transaction Security created or intended to be created by that Transaction Obligor.
 
19.13 Negative pledge
 
(a) No Obligor shall, and the Borrower shall procure that no other Transaction Obligor will, create or permit to subsist any Security over any of its assets which are, in the case of any Transaction Obligor other than the Borrower, the subject of the Security created or intended to be created by the Finance Documents.
 
(b) No Obligor shall (and in the case of sub-paragraphs (ii), (iii) and (iv), the Borrower shall not):
 
(i) sell, transfer or otherwise dispose of any of its assets (in respect of the Borrower) or all or a substantial part of its assets (in respect of the Guarantor) on terms whereby they are or may be leased to or re-acquired by a Obligor;
 
(ii) sell, transfer or otherwise dispose of any of its receivables on recourse terms;
 
(iii) enter into any arrangement under which money or the benefit of a bank or other account may be applied, set-off or made subject to a combination of accounts; or
 
(iv) enter into any other preferential arrangement having a similar effect,
 
in circumstances where the arrangement or transaction is entered into primarily as a method of raising Financial Indebtedness or of financing the acquisition of an asset.
 
(c) Paragraphs (a) and (b) above do not apply to any Permitted Security.
 
19.14 Disposals
 
(a) The Borrower shall not, and the Obligors shall procure that no Transaction Obligor will, enter into a single transaction or a series of transactions (whether related or not) and whether voluntary or involuntary to sell, lease, transfer or otherwise dispose of (in respect of the Borrower) any asset (including without limitation the Ship, the Earnings or the Insurances) or, in the case of any other Transaction Obligor, all or a substantial part of its assets.
 
(b) Paragraph (a) above does not apply to any Permitted Charter.
 
19.15 Merger
 
No Obligor shall, and the Obligors shall procure that no other Transaction Obligor will, enter into any amalgamation, demerger, merger, consolidation or corporate reconstruction where that Transaction Obligor is not the surviving entity.
 
19.16 Change of business
 
(a) The Guarantor shall procure that no substantial change is made to the general nature of the business of the Guarantor or the Group from that carried on at the date of this Agreement.
 

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(b) The Borrower shall not engage in any business other than the ownership and operation of the Ship.
 
19.17 Financial Indebtedness
 
The Borrower shall not incur or permit to be outstanding any Financial Indebtedness except Permitted Financial Indebtedness.
 
19.18 Expenditure
 
The Borrower shall not incur any expenditure, except for expenditure reasonably incurred in the ordinary course of owning, operating, maintaining and repairing the Ship.
 
19.19 Share capital
 
The Borrower shall not:
 
(a) purchase, cancel or redeem any of its share capital;
 
(b) increase or reduce its authorised share capital;
 
(c) issue any further shares except to the Guarantor; or
 
(d) appoint any further director or officer of the Borrower without the Lender's prior written consent (such consent not to be unreasonably withheld).
 
19.20 Dividends
 
The Borrower shall not make or pay any dividend or other distribution (in cash or in kind) in respect of its share capital following the occurrence of an Event of Default which is continuing or where the making or payment of such dividend or distribution would result in the occurrence of an Event of Default.
 
19.21 Accounts
 
The Borrower shall not open or maintain any account with any bank or financial institution except in the case of the Borrower the Earnings Account and accounts with the Lender for the purposes of the Finance Documents.
 
19.22 Other transactions
 
The Borrower shall not:
 
(a) be the creditor in respect of any loan or any form of credit to any person other than another Obligor and where such loan or form of credit is Permitted Financial Indebtedness;
 
(b) give or allow to be outstanding any guarantee or indemnity to or for the benefit of any person in respect of any obligation of any other person or enter into any document under which the Borrower assumes any liability of any other person other than any guarantee or indemnity given under the Finance Documents.
 
(c) enter into any material agreement other than:
 
(i) the Transaction Documents;
 
(ii) any other agreement expressly allowed under any other term of this Agreement; and
 

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(d) enter into any transaction on terms which are, in any respect, less favourable to the Borrower than those which it could obtain in a bargain made at arms' length; or
 
(e) acquire any shares or other securities other than US or UK Treasury bills and certificates of deposit issued by major North American or European banks.
 
19.23 Unlawfulness, invalidity and ranking; Security imperilled
 
No Obligor shall, and the Obligors shall procure that no other Transaction Obligor will, do (or fail to do) or cause or permit another person to do (or omit to do) anything which is likely to:
 
(a) make it unlawful for a Transaction Obligor to perform any of its obligations under the Transaction Documents;
 
(b) cause any obligation of a Transaction Obligor under the Transaction Documents to cease to be legal, valid,  binding or enforceable;
 
(c) cause any Transaction Document to cease to be in full force and effect;
 
(d) cause any Transaction Security to rank after, or lose its priority to, any other Security; and
 
(e) imperil or jeopardise the Transaction Security.
 
19.24 Further assurance
 
(a) Each Obligor shall, and shall procure that each other Transaction Obligor will, promptly, and in any event within the time period specified by the Lender do all such acts (including procuring or arranging any registration, notarisation or authentication or the giving of any notice) or execute or procure execution of all such documents (including assignments, transfers, mortgages, charges, notices, instructions, acknowledgments, proxies and powers of attorney), as the Lender may specify (and in such form as the Lender may require in favour of the Lender or its nominee(s)):
 
(i) to create, perfect, vest in favour of the Lender or protect the priority of the Security or any right of any kind created or intended to be created under or evidenced by the Finance Documents (which may include the execution of a mortgage, charge, assignment or other Security over all or any of the assets which are, or are intended to be, the subject of the Transaction Security) or for the exercise of any rights, powers and remedies of the Lender, any Receiver or Delegate provided by or pursuant to the Finance Documents or by law;
 
(ii) to confer on the Lender Security over any property and assets of that Transaction Obligor located in any jurisdiction equivalent or similar to the Security intended to be conferred by or pursuant to the Finance Documents;
 
(iii) to facilitate or expedite the realisation and/or sale of, the transfer of title to or the grant of, any interest in or right relating to the assets which are, or are intended to be, the subject of the Transaction Security or to exercise any power specified in any Finance Document in respect of which the Security has become enforceable; and/or
 
(iv) to enable or assist the Lender to enter into any transaction to commence, defend or conduct any proceedings and/or to take any other action relating to any item of the Security Property.
 
(b) Each Obligor shall, and shall procure that each other Transaction Obligor will, take all such action as is available to it (including making all filings and registrations) as may be necessary for the purpose of the creation, perfection, protection or maintenance of any Security conferred or intended to be conferred on the Lender by or pursuant to the Finance Documents.
 

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(c) At the same time as an Obligor delivers to the Lender any document executed by itself or another Transaction Obligor pursuant to this Clause 19.24 ( Further assurance ), that Obligor shall deliver, or shall procure that such other Transaction Obligor will deliver, to the Lender a certificate signed by two of that Obligor's or Transaction Obligor's directors or officers which shall:
 
(i) set out the text of a resolution of that Obligor's or Transaction Obligor's directors specifically authorising the execution of the document specified by the Lender; and
 
(ii) state that either the resolution was duly passed at a meeting of the directors validly convened and held, throughout which a quorum of directors entitled to vote on the resolution was present, or that the resolution has been signed by all the directors or officers and is valid under that Obligor's or Transaction Obligor's articles of association or other constitutional documents.
 
19.25 Most favoured nation
 
In the event that any Obligor enters or agrees to enter into a Restructuring:
 
(a) pursuant to which that Obligor amends any financial covenant under such Financing analogous to any of the Financial Covenants, and as a result of such amendment, such amended financial covenant(s) are more beneficial to the relevant Financier and/or on better terms for that Financier than the Financial Covenants, the Obligors shall (i) promptly notify the Lender in writing of the content in respect of such financial covenants, (ii) implement the same financial covenants under this Agreement and (iii) enter into any and all documentation that may be required by the Lender in order to document the amendments to the Financial Covenants under all applicable provisions of this Agreement; and
 
(b) pursuant to which that Obligor amends the first repayment date under such Financing, and as a result of such amendment, the first repayment date falls prior to the Deferred Repayment Date, the Obligors shall (i) promptly notify the Lender in writing of the date on which the first repayment date for such Financing falls, (ii) amend the repayment provisions under this Agreement so that the first repayment date for the Loan commences on the same (or earlier) date and (iii) enter into any and all documentation that may be required by the Lender in order to document the amendments to the repayment provisions under this Agreement.
 
19.26 No money laundering; anti-bribery
 
Without prejudice to the generality of Clause 3.1 ( Purpose ), in relation to the borrowing by the Borrower of the Loan, the performance and discharge of its obligations and liabilities under the Finance Documents, and the transactions and other arrangements affected or contemplated by the Finance Documents to which the Borrower is a party, the Borrower confirms (i) that it is acting for its own account; (ii) that it will use the proceeds of the Loan for its own benefit, under its full responsibility and exclusively for the purposes specified in this Agreement; (iii) that no Transaction Obligor nor any of their subsidiaries, nor any of their respective directors, officers, employees, (nor, to the knowledge of such Transaction Obligor, any of their agents or representatives) has engaged in any activity or conduct which would violate any applicable anti-bribery, anti-corruption or anti-money laundering laws or regulations in any applicable jurisdiction and each Transaction Obligor has instituted and maintains policies and procedures designated to prevent violation of such laws, regulations and rules; and (iv) that the foregoing will not involve or lead to a contravention of any law, official requirement or other regulatory measure or procedure implemented to combat " money laundering " (as defined in Article 1 of Directive 2005/60/EC of the European Parliament and of the Council).

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19.27 Anti-terrorism Law
 
Each Obligor undertakes to comply with, and to procure that each Transaction Obligor shall comply with, all Anti-Terrorism Laws.

20 INSURANCE UNDERTAKINGS
 
20.1 General
 
The undertakings in this Clause 20 ( Insurance Undertakings ) remain in force on and from the Utilisation Date and throughout the rest of the Security Period except as the Lender may otherwise permit.
 
20.2 Maintenance of obligatory insurances
 
The Borrower shall keep the Ship insured at its expense against:
 
(a) fire and usual marine risks (including hull and machinery and excess risks);
 
(b) war risks;
 
(c) protection and indemnity risks; and
 
(d) any other risks against which the Lender considers, having regard to practices and other circumstances prevailing at the relevant time, it would be reasonable for the Borrower to insure and which are specified by the Lender by notice to the Borrower.
 
20.3 Terms of obligatory insurances
 
The Borrower shall effect such insurances:
 
(a) in dollars;
 
(b) in the case of fire and usual marine risks and war risks, in an amount on an agreed value basis at least the greater of:
 
(i) 125 per cent. of the Loan; and
 
(ii) the Market Value of the Ship;
 
(c) in the case of oil pollution liability risks, for an aggregate amount equal to the highest level of cover from time to time available under basic protection and indemnity club entry and in the international marine insurance market;
 
(d) in the case of protection and indemnity risks, in respect of the full tonnage of the Ship;
 
(e) on approved terms; and
 
(f) through Approved Brokers and with approved insurance companies and/or underwriters or, in the case of war risks and protection and indemnity risks, in approved war risks and protection and indemnity risks associations.
 
20.4 Further protections for the Lender
 
In addition to the terms set out in Clause 20.3 ( Terms of obligatory insurances ), the Borrower shall procure that the obligatory insurances shall:
 
(a) subject always to paragraph (b), name the Borrower as the sole named insured unless the interest of every other named insured is limited:
 

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(i) in respect of any obligatory insurances for hull and machinery and war risks;
 
(A) to any provable out-of-pocket expenses that it has incurred and which form part of any recoverable claim on underwriters; and
 
(B) to any third party liability claims where cover for such claims is provided by the policy (and then only in respect of discharge of any claims made against it); and
 
(ii) in respect of any obligatory insurances for protection and indemnity risks, to any recoveries it is entitled to make by way of reimbursement following discharge of any third party liability claims made specifically against it;
 
and every other named insured has undertaken in writing to the Lender (in such form as it requires) that any deductible shall be apportioned between the Borrower and every other named insured in proportion to the gross claims made or paid by each of them and that it shall do all things necessary and provide all documents, evidence and information to enable the Lender to collect or recover any moneys which at any time become payable in respect of the obligatory insurances;
 
(b) whenever the Lender requires, name (or be amended to name) the Lender as additional named insured for its rights and interests, warranted no operational interest and with full waiver of rights of subrogation against the Lender, but without the Lender being liable to pay (but having the right to pay) premiums, calls or other assessments in respect of such insurance;
 
(c) name the Lender as loss payee with such directions for payment as the Lender may specify;
 
(d) provide that all payments by or on behalf of the insurers under the obligatory insurances to the Lender shall be made without set off, counterclaim or deductions or condition whatsoever;
 
(e) provide that the obligatory insurances shall be primary without right of contribution from other insurances which may be carried by the Lender; and
 
(f) provide that the Lender may make proof of loss if the Borrower fails to do so.
 
20.5 Renewal of obligatory insurances
 
The Borrower shall:
 
(a) at least 21 days before the expiry of any obligatory insurance:
 
(i) notify the Lender of the Approved Brokers (or other insurers) and any protection and indemnity or war risks association through or with which the Borrower proposes to renew that obligatory insurance and of the proposed terms of renewal; and
 
(ii) obtain the Lender's approval to the matters referred to in sub-paragraph (i) of paragraph (a) above;
 
(b) at least 14 days before the expiry of any obligatory insurance, renew that obligatory insurance in accordance with the Lender's approval pursuant to paragraph (a) above; and
 
(c) procure that the Approved Brokers and/or the approved war risks and protection and indemnity associations with which such a renewal is effected shall promptly after the renewal notify the Lender in writing of the terms and conditions of the renewal.
 

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20.6 Copies of policies; letters of undertaking
 
The Borrower shall ensure that the Approved Brokers provide the Lender with:
 
(a) pro forma copies of all policies relating to the obligatory insurances which they are to effect or renew; and
 
(b) a letter or letters or undertaking in a form required by the Lender and including undertakings by the Approved Brokers that:
 
(i) they will have endorsed on each policy, immediately upon issue, a loss payable clause and a notice of assignment complying with the provisions of Clause 20.4 ( Further protections for the Lender );
 
(ii) they will hold such policies, and the benefit of such insurances, to the order of the Lender in accordance with such loss payable clause;
 
(iii) they will advise the Lender immediately of any material change to the terms of the obligatory insurances;
 
(iv) they will, if they have not received notice of renewal instructions from the Borrower or its agents, notify the Lender not less than 14 days before the expiry of the obligatory insurances;
 
(v) if they receive instructions to renew the obligatory insurances, they will promptly notify the Lender of the terms of the instructions;
 
(vi) they will not set off against any sum recoverable in respect of a claim relating to the Ship under such obligatory insurances any premiums or other amounts due to them or any other person whether in respect of the Ship or otherwise, they waive any lien on the policies, or any sums received under them, which they might have in respect of such premiums or other amounts and they will not cancel such obligatory insurances by reason of non-payment of such premiums or other amounts; and
 
(vii) they will arrange for a separate policy to be issued in respect of the Ship forthwith upon being so requested by the Lender.
 
20.7 Copies of certificates of entry
 
The Borrower shall ensure that any protection and indemnity and/or war risks associations in which the Ship is entered provide the Lender with:
 
(a) a certified copy of the certificate of entry for the Ship;
 
(b) a letter or letters of undertaking in such form as may be required by the Lender; and
 
(c) a certified copy of each certificate of financial responsibility for pollution by oil or other Environmentally Sensitive Material issued by the relevant certifying authority in relation to the Ship.
 
20.8 Deposit of original policies
 
The Borrower shall ensure that all policies relating to obligatory insurances are deposited with the Approved Brokers through which the insurances are effected or renewed.
 
20.9 Payment of premiums
 
The Borrower shall punctually pay all premiums or other sums payable in respect of the obligatory insurances and produce all relevant receipts when so required by the Lender.
 

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20.10 Guarantees
 
The Borrower shall ensure that any guarantees required by a protection and indemnity or war risks association are promptly issued and remain in full force and effect.
 
20.11 Compliance with terms of insurances
 
(a) The Borrower shall not do nor omit to do (nor permit to be done or not to be done) any act or thing which would or might render any obligatory insurance invalid, void, voidable or unenforceable or render any sum payable under an obligatory insurance repayable in whole or in part.
 
(b) Without limiting paragraph (a) above, the Borrower shall:
 
(i) take all necessary action and comply with all requirements which may from time to time be applicable to the obligatory insurances, and (without limiting the obligation contained in sub-paragraph (iii) of paragraph (b) of Clause 20.6 ( Copies of policies; letters of undertaking )) ensure that the obligatory insurances are not made subject to any exclusions or qualifications to which the Lender has not given its prior approval;
 
(ii) not make any changes relating to the classification or classification society or manager or operator of the Ship approved by the underwriters of the obligatory insurances;
 
(iii) make (and promptly supply copies to the Lender of) all quarterly or other voyage declarations which may be required by the protection and indemnity risks association in which the Ship is entered to maintain cover for trading to the United States of America and Exclusive Economic Zone (as defined in the United States Oil Pollution Act 1990 or any other applicable legislation); and
 
(iv) not employ the Ship, nor allow it to be employed, otherwise than in conformity with the terms and conditions of the obligatory insurances, without first obtaining the consent of the insurers and complying with any requirements (as to extra premium or otherwise) which the insurers specify.
 
20.12 Alteration to terms of insurances
 
The Borrower shall not make or agree to any alteration to the terms of any obligatory insurance or waive any right relating to any obligatory insurance.
 
20.13 Settlement of claims
 
The Borrower shall:
 
(a) not settle, compromise or abandon any claim under any obligatory insurance for Total Loss or for a Major Casualty; and
 
(b) do all things necessary and provide all documents, evidence and information to enable the Lender to collect or recover any moneys which at any time become payable in respect of the obligatory insurances.
 
20.14 Provision of copies of communications
 
The Borrower shall provide the Lender, at the time of each such communication, with copies of all written communications between the Borrower and:
 
(a) the Approved Brokers;
 

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(b) the approved protection and indemnity and/or war risks associations; and
 
(c) the approved insurance companies and/or underwriters,
 
which relate directly or indirectly to:
 
(i) the Borrower's obligations relating to the obligatory insurances including, without limitation, all requisite declarations and payments of additional premiums or calls; and
 
(ii) any credit arrangements made between the Borrower and any of the persons referred to in paragraphs (a) or (b) above relating wholly or partly to the effecting or maintenance of the obligatory insurances.
 
20.15 Provision of information
 
The Borrower shall promptly provide the Lender (or any persons which it may designate) with any information which the Lender (or any such designated person) requests for the purpose of:
 
(a) obtaining or preparing any report from an independent marine insurance broker as to the adequacy of the obligatory insurances effected or proposed to be effected; and/or
 
(b) effecting, maintaining or renewing any such insurances as are referred to in Clause 20.16 ( Mortgagee's interest perils insurances ) or dealing with or considering any matters relating to any such insurances,
 
and the Borrower shall, forthwith upon demand, indemnify the Lender in respect of all fees and other expenses incurred by or for the account of the Lender in connection with any such report as is referred to in paragraph (a) above.
 
20.16 Mortgagee's interest perils insurances
 
(a) The Lender shall be entitled from time to time to effect, maintain and renew a mortgagee's interest marine insurance in an amount on an agreed value basis at least equal to 110 per cent. of the Loan, on such terms, through such insurers and generally in such manner as the Lender may from time to time consider appropriate.
 
(b) The Borrower shall upon demand fully indemnify the Lender in respect of all premiums and other expenses which are incurred in connection with or with a view to effecting, maintaining or renewing any insurance referred to in paragraph (a) above or dealing with, or considering, any matter arising out of any such insurance.
 
21 MOA UNDERTAKINGS
 
21.1 General
 
The undertakings in this Clause 21 ( MOA Undertakings ) remain in force throughout the Security Period except as the Lender may otherwise permit.
 
21.2 No variation, release etc. of MOA
 
The Borrower shall not, whether by a document, by conduct, by acquiescence or in any other way:
 
(a) vary the MOA; or
 

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(b) release, waive, suspend, subordinate or permit to be lost or impaired any interest or right of any kind which the Borrower has at any time to, in or in connection with, the MOA or in relation to any matter arising out of or in connection with the MOA.
 
21.3 Provision of information relating to MOA
 
Without prejudice to Clause 17.5 ( Information: miscellaneous ) the Borrower shall:
 
(a) immediately inform the Lender if any breach of the MOA occurs or a serious risk of such a breach arises and of any other event or matter affecting the MOA which has or is reasonably likely to have a Material Adverse Effect; and
 
(b) upon the reasonable request of the Lender, keep the Lender informed as to any notice of readiness of delivery of the Ship.
 
21.4 No assignment etc. of MOA
 
The Borrower shall not assign, novate, transfer or dispose of any of its rights or obligations under the MOA.
 
22 SHIP UNDERTAKINGS
 
22.1 General
 
The undertakings in this Clause 22 ( Ship Undertakings ) remain in force on and from the Utilisation Date and throughout the rest of the Security Period except as the Lender may otherwise permit.
 
22.2 Ship's name and registration
 
The Borrower shall:
 
(a) keep the Ship registered in its name under the Approved Flag from time to time at its port of registration;
 
(b) not do or allow to be done anything as a result of which such registration might be suspended, cancelled or imperilled; and
 
(c) not change the name of the Ship,
 
provided that any change of flag of the Ship shall be subject to:
 
(i) the Ship remaining subject to Security securing the Secured Liabilities created by a first priority or preferred ship mortgage on the Ship and, if appropriate, a first priority deed of covenant collateral to that mortgage (or equivalent first priority Security) on substantially the same terms as the Mortgage and on such other terms and in such other form as the Lender shall approve or require; and
 
(ii) the execution of such other documentation amending and supplementing the Finance Documents as the Lender shall approve or require.
 
22.3 Repair and classification
 
The Borrower shall keep the Ship in a good and safe condition and state of repair:
 
(a) consistent with first class ship ownership and management practice; and
 
(b) so as to maintain the Approved Classification free of any overdue recommendations and conditions.
 

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22.4 Classification society undertaking
 
If required by the Lender in writing, the Borrower shall instruct the Approved Classification Society (and procure that the Approved Classification Society undertakes with the Lender):
 
(a) to send to the Lender, following receipt of a written request from the Lender, certified true copies of all original class records held by the Approved Classification Society in relation to the Ship;
 
(b) to allow the Lender (or its agents), at any time and from time to time, to inspect the original class and related records of the Borrower and the Ship at the offices of the Approved Classification Society and to take copies of them;
 
(c) to notify the Lender immediately in writing if the Approved Classification Society:
 
(i) receives notification from the Borrower or any person that the Ship's Approved Classification Society is to be changed; or
 
(ii) becomes aware of any facts or matters which may result in or have resulted in a change, suspension, discontinuance, withdrawal or expiry of the Ship's class under the rules or terms and conditions of the Borrower or the Ship's membership of the Approved Classification Society;
 
(d) following receipt of a written request from the Lender:
 
(i) to confirm that the Borrower is not in default of any of its contractual obligations or liabilities to the Approved Classification Society, including confirmation that it has paid in full all fees or other charges due and payable to the Approved Classification Society; or
 
(ii) to confirm that the Borrower is in default of any of its contractual obligations or liabilities to the Approved Classification Society, to specify to the Lender in reasonable detail the facts and circumstances of such default, the consequences of such default, and any remedy period agreed or allowed by the Approved Classification Society.
 
22.5 Modifications
 
The Borrower shall not make any modification or repairs to, or replacement of, the Ship or equipment installed on it which would or might materially alter the structure, type or performance characteristics of the Ship or materially reduce its value.
 
22.6 Removal and installation of parts
 
(a) Subject to paragraph (b) below, the Borrower shall not remove any material part of the Ship, or any item of equipment installed on the Ship unless:
 
(i) the part or item so removed is forthwith replaced by a suitable part or item which is in the same condition as or better condition than the part or item removed;
 
(ii) the replacement part or item is free from any Security in favour of any person other than the Lender; and
 
(iii) the replacement part or item becomes, on installation on the Ship, the property of the Borrower and subject to the security constituted by the Mortgage.
 
(b) The Borrower may install equipment owned by a third party if the equipment can be removed without any risk of damage to the Ship.
 

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22.7 Surveys
 
The Borrower shall submit the Ship regularly to all periodic or other surveys which may be required for classification purposes and, if so required by the Lender, provide the Lender, with copies of all survey reports.
 
22.8 Inspection
 
The Borrower shall permit the Lender (acting through surveyors or other persons appointed by it for that purpose) to board the Ship at all reasonable times to inspect its condition or to satisfy themselves about proposed or executed repairs and shall afford all proper facilities for such inspections without interfering with the Ship's normal course of trading, unless an Event of Default has occurred, in which case the Lender can inspect the Ship at any time.
 
22.9 Prevention of and release from arrest
 
(a) The Borrower shall promptly discharge:
 
(i) all liabilities which give or may give rise to maritime or possessory liens on or claims enforceable against the Ship, the Earnings or the Insurances;
 
(ii) all Taxes, dues and other amounts charged in respect of the Ship, the Earnings or the Insurances; and
 
(iii) all other outgoings whatsoever in respect of the Ship, the Earnings or the Insurances.
 
(b) The Borrower shall immediately and, forthwith upon receiving notice of the arrest of the Ship or of its detention in exercise or purported exercise of any lien or claim, procure its release by providing bail or otherwise as the circumstances may require.
 
22.10 Compliance with laws etc.
 
The Borrower shall:
 
(a) comply, or procure compliance with all laws or regulations:
 
(i) relating to its business generally; and
 
(ii) relating to the Ship, its ownership, employment, operation, management and registration,
 
including, but not limited to, the ISM Code, the ISPS Code, all Environmental Laws, all Sanctions and the laws of the Approved Flag;
 
(b) obtain, comply with and do all that is necessary to maintain in full force and effect any Environmental Approvals; and
 
(c) without limiting paragraph (a) above, not employ the Ship nor allow its employment, operation or management in any manner contrary to any law or regulation including but not limited to the ISM Code, the ISPS Code, all Environmental Laws and Sanctions (or which would be contrary to Sanctions if Sanctions were binding on each Transaction Obligor).
 
22.11 ISPS Code
 
Without limiting paragraph (a) of Clause 22.10 ( Compliance with laws etc. ), the Borrower shall:
 
(a) procure that the Ship and the company responsible for the Ship's compliance with the ISPS Code comply with the ISPS Code; and
 

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(b) maintain an ISSC for the Ship; and
 
(c) notify the Lender immediately in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the ISSC.
 
22.12 Trading in war zones
 
In the event of hostilities in any part of the world (whether war is declared or not), the Borrower shall not cause or permit the Ship to enter or trade to any zone which is declared a war zone by any government or by the Ship's war risks insurers unless:
 
(a) the prior written consent of the Lender has been given; and
 
(b) the Borrower has (at its expense) effected any special, additional or modified insurance cover which the Lender may require.
 
22.13 Provision of information
 
Without prejudice to Clause 17.5 ( Information: miscellaneous ) the Borrower shall promptly provide the Lender with any information which it requests regarding:
 
(a) the Ship, its employment, position and engagements;
 
(b) the Earnings and payments and amounts due to its master and crew;
 
(c) any expenditure incurred, or likely to be incurred, in connection with the operation, maintenance or repair of the Ship and any payments made by it in respect of the Ship;
 
(d) any towages and salvages; and
 
(e) its compliance, the Approved Manager's compliance and the compliance of the Ship with the ISM Code and the ISPS Code,
 
and, upon the Lender's request, provide copies of any current Charter relating to the Ship, of any current guarantee of any such Charter, the Ship's Safety Management Certificate and any relevant Document of Compliance.
 
22.14 Notification of certain events
 
The Borrower shall immediately notify the Lender by fax, confirmed forthwith by letter, of:
 
(a) any casualty to the Ship which is or is likely to be or to become a Major Casualty;
 
(b) any occurrence as a result of which the Ship has become or is, by the passing of time or otherwise, likely to become a Total Loss;
 
(c) any requisition of the Ship for hire;
 
(d) any overdue requirement or recommendation made in relation to the Ship by any insurer or classification society or by any competent authority which is not immediately complied with within the time limits allowed by such insurer or the relevant classification society or authority;
 
(e) any arrest or detention of the Ship, any exercise or purported exercise of any lien on the Ship or the Earnings or any requisition of the Ship for hire;
 
(f) any intended dry docking of the Ship;
 

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(g) any Environmental Claim made against the Borrower or in connection with the Ship, or any Environmental Incident;
 
(h) any claim for breach of the ISM Code or the ISPS Code being made against the Borrower, an Approved Manager or otherwise in connection with the Ship; or
 
(i) any other matter, event or incident, actual or threatened, the effect of which will or could lead to the ISM Code or the ISPS Code not being complied with,
 
and the Borrower shall keep the Lender advised in writing on a regular basis and in such detail as the Lender shall require as to the Borrower's, any such Approved Manager's or any other person's response to any of those events or matters.
 
22.15 Restrictions on chartering, appointment of managers etc.
 
The Borrower shall not:
 
(a) let the Ship on demise charter for any period;
 
(b) enter into any time, voyage or consecutive voyage charter in respect of that Ship other than a Permitted Charter (without the Lender's prior written consent, such consent not to be unreasonably withheld);
 
(c) amend, supplement or terminate a Management Agreement (without the Lender's prior written consent, such consent not to be unreasonably withheld);
 
(d) appoint a manager of the Ship other than the Approved Commercial Manager and the Approved Technical Manager or agree to any alteration to the terms of an Approved Manager's appointment (without the Lender's prior written consent, such consent not to be unreasonably withheld);
 
(e) de activate or lay up the Ship (without the Lender's prior written consent, such consent not to be unreasonably withheld); or
 
(f) put the Ship into the possession of any person for the purpose of work being done upon it in an amount exceeding or likely to exceed one million US dollars (US$1,000,000) (or the equivalent in any other currency) unless that person has first given to the Lender and in terms satisfactory to it a written undertaking not to exercise any lien on the Ship or the Earnings for the cost of such work or for any other reason.
 
22.16 Notice of Mortgage
 
The Borrower shall keep the Mortgage registered against the Ship as a valid first priority or preferred (as the case may be) mortgage, carry on board the Ship a certified copy of the Mortgage and place and maintain in a conspicuous place in the navigation room and the master's cabin of the Ship a framed printed notice stating that the Ship is mortgaged by the Borrower to the Lender.
 
22.17 Sharing of Earnings
 
The Borrower shall not enter into any agreement or arrangement for the sharing of any Earnings.
 
22.18 Notification of compliance
 
The Borrower shall promptly provide the Lender from time to time with evidence (in such form as the Lender requires) that it is complying with this Clause 22 ( Ship Undertakings ).
 

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22.19 Charterparty assignment
 
If the Borrower enters enter into any Assignable Charter, the Borrower shall promptly, prior to the date of such Assignable Charter, provide written notice to the Lender of such time charterparty together with a certified true copy of the time charterparty and shall enter into a Charterparty Assignment in respect of such Assignable Charter, and the assignment of such time charterparty contemplated under the applicable Charterparty Assignment shall be, on an Event of Default, notified to, and acknowledged by, the relevant charterer and any charter guarantor in accordance with the terms of such Charterparty Assignment and shall additionally deliver to the Lender such other documents as the Lender may require.
 
23 SECURITY COVER
 
23.1 Minimum required security cover
 
Commencing on 1 February 2017, Clause 23.2 ( Provision of additional security; prepayment ) shall apply if the Lender notifies the Borrower that:
 
(a) the Market Value of the Ship; plus
 
(b) the net realisable value of additional Security previously provided under this Clause 23 ( Security Cover ),
 
is below 120 per cent. of the Loan.
 
23.2 Provision of additional security; prepayment
 
(a) If the Lender serves a notice on the Borrower under Clause 23.1 ( Minimum required security cover ), the Borrower shall, on or before the date falling one Month after the date on which the Lender's notice is served (the " Prepayment Date "), prepay such part of the Loan as shall eliminate the shortfall.
 
(b) The Borrower may, instead of making a prepayment as described in paragraph (a) above, provide, or ensure that a third party has provided, additional security (including, without limitation, cash pledged in favour of the Lender) which, in the opinion of the Lender:
 
(i) has a net realisable value at least equal to the shortfall; and
 
(ii) is documented in such terms as the Lender may approve or require,
 
before the Prepayment Date; and conditional upon such security being provided in such manner, it shall satisfy such prepayment obligation.
 
23.3 Value of additional vessel security
 
The net realisable value of any additional security which is provided under Clause 23.2 ( Provision of additional security; prepayment ) and which consists of Security over a vessel shall be the Market Value of the vessel concerned.
 
23.4 Valuations binding
 
Any valuation under this Clause 23 ( Security Cover ) shall be binding and conclusive as regards the Borrower.
 
23.5 Provision of information
 
(a) The Borrower shall promptly provide the Lender and any shipbroker acting under this Clause 23 ( Security Cover ) with any information which the Lender or the shipbroker may request for the purposes of the valuation.
 

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(b) If the Borrower fails to provide the information referred to in paragraph (a) above by the date specified in the request, the valuation may be made on any basis and assumptions which the shipbroker or the Lender considers prudent.
 
23.6 Prepayment mechanism
 
Any prepayment pursuant to Clause 23.2 ( Provision of additional security; prepayment ) shall be made in accordance with the relevant provisions of Clause 7 ( Prepayment and Cancellation ) and shall be treated as a voluntary prepayment pursuant to Clause 7.3 ( Voluntary prepayment of Loan ).
 
23.7 Provision of valuations
 
The Borrower shall provide the Lender (at its own cost) with a valuation of the Ship and any other vessel over which additional Security has been created in accordance with Clause 23.2 ( Provision of additional security; prepayment ), from an Approved Valuer, to enable the Lender to determine the Market Value of the Ship twice a year during the Security Period.
 
24 APPLICATION OF EARNINGS
 
24.1 Payment of Earnings
 
(a) The Borrower shall ensure that, subject only to the provisions of the General Assignment and any Charterparty Assignment, all the Earnings are paid in to the Earnings Account.
 
24.2 Location of Accounts
 
The Borrower shall promptly:
 
(a) comply with any requirement of the Lender as to the location or relocation of the Earnings Account; and
 
(b) execute any documents which the Lender specifies to create or maintain in favour of the Lender Security over (and/or rights of set-off, consolidation or other rights in relation to) the Earnings Account.
 
25 EVENTS OF DEFAULT
 
25.1 General
 
Each of the events or circumstances set out in this Clause 25 ( Events of Default ) is an Event of Default except for Clause 25.18 ( Acceleration ) and Clause 25.19 ( Enforcement of security ).
 
25.2 Non-payment
 
An Obligor does not pay on the due date any amount payable pursuant to a Finance Document at the place at and in the currency in which it is expressed to be payable unless:
 
(a) its failure to pay is caused by:
 
(i) administrative or technical error; or
 
(ii) a Disruption Event; and
 
(b) payment is made within 3 Business Days of its due date.
 

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25.3 Specific obligations
 
A breach occurs of Clause 4.4 ( Waiver of conditions precedent ), Clause 18 ( Financial Covenants ), Clause 19.12 ( Title ), Clause 19.13 ( Negative pledge ), Clause 19.23 ( Unlawfulness, invalidity and ranking; Security imperilled ), Clause 20.2 ( Maintenance of obligatory insurances ), Clause 20.3 ( Terms of obligatory insurances ), Clause 20.5 ( Renewal of obligatory insurances ) or Clause 23 ( Security Cover ).
 
25.4 Other obligations
 
(a) A Transaction Obligor does not comply with any provision of the Finance Documents (other than those referred to in Clause 25.2 ( Non-payment ) and Clause 25.3 ( Specific obligations )).
 
(b) No Event of Default under paragraph (a) above will occur if the failure to comply is capable of remedy and is remedied within 3 Business Days of the Lender giving notice to the Borrower or (if earlier) any Transaction  Obligor becoming aware of the failure to comply.
 
25.5 Misrepresentation
 
Any representation or statement made or deemed to be made by a Transaction Obligor in the Finance Documents or any other document delivered by or on behalf of any Transaction Obligor under or in connection with any Finance Document is or proves to have been incorrect or misleading when made or deemed to be made unless the effect thereof is rectified to the satisfaction of the Lender by such Transaction Obligor within 7 Business Days of the representation or statement which has been made.
 
25.6 Cross default
 
(a) Any Financial Indebtedness of any Transaction Obligor is not paid when due nor within any originally applicable grace period.
 
(b) Any Financial Indebtedness of any Transaction Obligor is declared to be or otherwise becomes due and payable prior to its specified maturity as a result of an event of default (however described).
 
(c) Any commitment for any Financial Indebtedness of any Transaction Obligor is cancelled or suspended by a creditor of any Transaction Obligor as a result of an event of default (however described).
 
(d) Any creditor of any Transaction Obligor becomes entitled to declare any Financial Indebtedness of any Transaction Obligor due and payable prior to its specified maturity as a result of an event of default (however described).
 
25.7 Insolvency
 
(a) An Transaction Obligor:
 
(i) is unable or admits inability to pay its debts as they fall due;
 
(ii) is deemed to, or is declared to, be unable to pay its debts under applicable law;
 
(iii) suspends or threatens to suspend making payments on any of its debts; or
 
(iv) by reason of actual or anticipated financial difficulties, commences negotiations with one or more of its creditors (excluding the Lender in its capacity as such) with a view to rescheduling any of its indebtedness.
 
(b) The value of the assets of any Obligor is less than its liabilities (taking into account contingent and prospective liabilities).
 

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(c) A moratorium is declared in respect of any indebtedness of any Transaction Obligor.  If a moratorium occurs, the ending of the moratorium will not remedy any Event of Default caused by that moratorium.
 
25.8 Insolvency proceedings
 
(a) Any corporate action, legal proceedings or other procedure or step is taken in relation to:
 
(i) the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of any Transaction Obligor;
 
(ii) a composition, compromise, assignment or arrangement with any creditor of any Transaction Obligor;
 
(iii) the appointment of a liquidator, receiver, administrator, administrative receiver, compulsory manager or other similar officer in respect of any Transaction Obligor or any of its assets; or
 
(iv) enforcement of any Security over any assets of any Transaction Obligor,
 
or any analogous procedure or step is taken in any jurisdiction.
 
(b) Paragraph (a) above shall not apply to any winding-up petition which is frivolous or vexatious and is discharged, stayed or dismissed within 14 Business Days of commencement.
 
25.9 Creditors' process
 
Any expropriation, attachment, sequestration, distress or execution (or any analogous process in any jurisdiction) affects any asset or assets of an Obligor.
 
25.10 Ownership of the Obligors
 
(a) The Borrower is not or ceases to be a 100 per cent. directly owned Subsidiary of the Guarantor.
 
(b) Any person or group of persons acting in concert gains control of the Guarantor.
 
(c) For the purpose of paragraph (b) above " control " means:
 
(i) the power (whether by way of ownership of shares, proxy, contract, agency or otherwise) to:
 
(A) cast, or control the casting of, more than 50 per cent. of the maximum number of votes that might be cast at a general meeting of the Guarantor; or
 
(B) appoint or remove all, or the majority, of the directors or other equivalent officers of the Guarantor; or
 
(C) give directions with respect to the operating and financial policies of the Guarantor with which the directors or other equivalent officers of the Guarantor are obliged to comply; and/or
 
(ii) the holding beneficially of more than 50 per cent. of the issued share capital of the Guarantor (excluding any part of that issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital).
 

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(d) For the purpose of paragraph (b) above " acting in concert " means a group of persons who, pursuant to an agreement or understanding (whether formal or informal), actively co-operate, through the acquisition directly or indirectly of shares in the Guarantor by any of them, either directly or indirectly, to obtain or consolidate control of the Guarantor.
 
25.11 Unlawfulness, invalidity and ranking
 
(a) It is or becomes unlawful for a Transaction Obligor to perform any of its obligations under the Finance Documents.
 
(b) Any obligation of an Transaction Obligor under the Finance Documents is not or ceases to be legal, valid, binding or enforceable.
 
(c) Any Finance Document ceases to be in full force and effect or to be continuing or is or purports to be determined or any Transaction Security is alleged by a party to it (other than the Lender) to be ineffective.
 
(d) Any Transaction Security proves to have ranked after, or loses its priority to, any other Security.
 
25.12 Security imperilled
 
Any Security created or intended to be created by a Finance Document is in any way imperilled or in jeopardy.
 
25.13 Cessation of business
 
Any Transaction Obligor suspends or ceases to carry on (or threatens to suspend or cease to carry on) all or a material part of its business.
 
25.14 Expropriation
 
The authority or ability of any Transaction Obligor to conduct its business is limited or wholly or substantially curtailed by any seizure, expropriation, nationalisation, intervention, restriction or other action by or on behalf of any governmental, regulatory or other authority or other person in relation to any Transaction Obligor or any of its assets unless such Transaction Obligor upon receiving notice of such event procures the release of the relevant assets and such assets are redelivered to the full control of that Transaction Obligor within 14 days of such event.
 
25.15 Repudiation and rescission of agreements
 
A Transaction Obligor (or any other relevant party) rescinds or purports to rescind or repudiates or purports to repudiate a Transaction Document or any of the Transaction Security or evidences an intention to rescind or repudiate a Transaction Document or any Transaction Security or a Transaction Document or any of the Transaction Security otherwise ceases to remain in full force and effect for any reason.
 
25.16 Litigation
 
Any litigation, arbitration, administrative, governmental, regulatory or other investigations, proceedings or disputes are commenced in relation to any of the Transaction Documents or the transactions or assets contemplated in any of the Transaction Documents which has or is reasonably likely to have a Material Adverse Effect unless (i) the relevant Transaction Obligor has taken active measures to dispute such proceedings or disputes and such proceedings or disputes are dismissed or withdrawn within 14 days of being made or presented or (ii) in respect of the Guarantor, the combined value of such proceedings or disputes does not exceed $1,000,000 in aggregate.
 

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25.17 Material adverse change
 
Any event or circumstance occurs which has or is reasonably likely to have a Material Adverse Effect.
 
25.18 Acceleration
 
On and at any time after the occurrence of an Event of Default which is continuing the Lender may by notice to the Borrower:
 
(a) cancel the Commitment, whereupon it shall immediately be cancelled;
 
(b) declare that all or part of the Loan, together with accrued interest, and all other amounts accrued or outstanding under the Finance Documents be immediately due and payable, whereupon it shall become immediately due and payable; and/or
 
(c) declare that all or part of the Loan be payable on demand, whereupon it shall immediately become payable on demand by the Lender,
 
and the Lender may serve notices under paragraphs (a), (b) and (c) above simultaneously or on different dates and the Lender may take any action referred to in Clause 25.19 ( Enforcement of security ) if no such notice is served or simultaneously with or at any time after the service of any of such notice.
 
25.19 Enforcement of security
 
On and at any time after the occurrence of an Event of Default which is continuing the Lender may take any action which, as a result of the Event of Default or any notice served under Clause 25.18 ( Acceleration ), the Lender is entitled to take under any Finance Document or any applicable law or regulation.
 

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SECTION 9
 
CHANGES TO THE PARTIES
 
26 CHANGES TO THE LENDER
 
26.1 Assignment by the Lender
 
Subject to this Clause 26 ( Changes to the Lender ), the Lender (the " Existing Lender ") may assign all (or part, in which case, this Agreement and the Finance Documents shall be amended accordingly at the cost of the Lender to reflect such syndicated structure) of its rights under the Finance Documents to another bank or financial institution or to a trust, fund or other entity which is regularly engaged in or established for the purpose of making, purchasing or investing in loans, securities or other financial assets (the " New Lender ").
 
26.2 Conditions of assignment
 
(a) The consent of the Borrower is required for an assignment by the Existing Lender, unless the assignment is:
 
(i) to an Affiliate of the Existing Lender; or
 
(ii) made at a time when an Event of Default is continuing.
 
(b) The consent of the Borrower to an assignment must not be unreasonably withheld or delayed.  The Borrower will be deemed to have given its consent 5 (five) Business Days after the Existing Lender has requested it unless consent is expressly refused by the Borrower within that time.
 
(c) The consent of the Borrower to an assignment must not be withheld solely because the assignment may result in an increase to any amount payable under Clause 13.3 ( Mandatory Cost ).
 
(d) If:
 
(i) the Existing Lender assigns any of its rights or obligations under the Finance Documents or changes its Facility Office; and
 
(ii) as a result of circumstances existing at the date the assignment or change occurs, an Obligor would be obliged to make a payment to the New Lender or the Existing Lender acting through its new Facility Office under Clause 11 ( Tax Gross Up and Indemnities ) or under that clause as incorporated by reference or in full in any other Finance Document or Clause 12 ( Increased Costs ),
 
then the New Lender or the Existing Lender acting through its new Facility Office is only entitled to receive payment under those Clauses to the same extent as the Existing Lender would have been if the assignment or change had not occurred.
 
(e) Each Obligor agrees that all rights and interests (present, future or contingent) which the Existing Lender has under or by virtue of the Finance Documents are assigned to the New Lender absolutely, free of any defects in the Existing Lender's title and of any rights or equities which the Borrower or any other Obligor had against the Existing Lender.
 
26.3 Security over Lender's rights
 
In addition to the other rights provided to the Lender under this Clause 26 ( Changes to the Lender ), the Lender may without consulting with or obtaining consent from any Obligor, at any time charge, assign or otherwise create Security in or over (whether by way of collateral
 

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or otherwise) all or any of its rights under any Finance Document to secure obligations of the Lender including, without limitation:
 
(a) any charge, assignment or other Security to secure obligations to a federal reserve or central bank; and
 
(b) if the Lender is a fund, any charge, assignment or other Security granted to any holders (or trustee or representatives of holders) of obligations owed, or securities issued, by the Lender as security for those obligations or securities,
 
except that no such charge, assignment or Security shall:
 
(i) release the Lender from any of its obligations under the Finance Documents or substitute the beneficiary of the relevant charge, assignment or Security for the Lender as a party to any of the Finance Documents; or
 
(ii) require any payments to be made by an Obligor other than or in excess of, or grant to any person any more extensive rights than, those required to be made or granted to the Lender under the Finance Documents.
 
27 CHANGES TO THE OBLIGORS
 
27.1 Assignment or transfer by Obligors
 
No Obligor may assign any of its rights or transfer any of its rights or obligations under the Finance Documents.
 
28 THE REFERENCE BANKS
 
28.1 Role of Reference Banks
 
(a) Without limitation to the Lender's obligation to provide evidence to the Borrower under Clause 10.2(a), no Reference Bank is under any obligation to provide a quotation or any other information to the Lender.
 
(b) No Reference Bank will be liable for any action taken by it under or in connection with any Finance Document, or for any Reference Bank Quotation, unless directly caused by its gross negligence or wilful misconduct.
 
(c) No Party (other than the relevant Reference Bank) may take any proceedings against any officer, employee or agent of any Reference Bank in respect of any claim it might have against that Reference Bank or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Finance Document, or to any Reference Bank Quotation, and any officer, employee or agent of each Reference Bank may rely on this Clause 28.1 ( Role of Reference Banks ) subject to Clause 1.5 ( Third party rights ) and the provisions of the Third Parties Act.
 
28.2 Third Party Reference Banks
 
A Reference Bank which is not a Party may rely on Clause 28.1 ( Role of Reference Banks ), and Clause 39 ( Confidentiality of Funding Rates and Reference Bank Quotations ) subject to Clause 1.5 ( Third party rights ) and the provisions of the Third Parties Act.
 

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SECTION 10
 
ADMINISTRATION
 
29 PAYMENT MECHANICS
 
29.1 Payments to the Lender
 
(a) On each date on which a Transaction Obligor is required to make a payment under a Finance Document, that Transaction Obligor shall make an amount equal to such payment available to the Lender (unless a contrary indication appears in a Finance Document) for value on the due date at the time and in such funds specified by the Lender as being customary at the time for settlement of transactions in the relevant currency in the place of payment.
 
(b) Payment shall be made to such account in the principal financial centre of the country of that currency (or, in relation to euro, in a principal financial centre in such Participating Member State or London, as specified by the Lender) and with such bank as the Lender, in each case, specifies.
 
29.2 Application of receipts; partial payments
 
(a) If the Lender receives a payment that is insufficient to discharge all the amounts then due and payable by a Transaction Obligor under the Finance Documents, the Lender may apply that payment towards the obligations of that Transaction Obligor under the Finance Documents in any manner it may decide.
 
(b) Paragraph (a) above will override any appropriation made by a Transaction Obligor.
 
29.3 No set-off by Transaction Obligors
 
(a) All payments to be made by a Transaction Obligor under the Finance Documents shall be calculated and be made without (and free and clear of any deduction for) set-off or counterclaim.
 
29.4 Business Days
 
(a) Any payment under the Finance Documents which is due to be made on a day that is not a Business Day shall be made on the next Business Day in the same calendar month (if there is one) or the preceding Business Day (if there is not).
 
(b) During any extension of the due date for payment of any principal or an Unpaid Sum under this Agreement interest is payable on the principal or Unpaid Sum at the rate payable on the original due date.
 
29.5 Currency of account
 
(a) Subject to paragraphs (b) and (c) below, dollars is the currency of account and payment for any sum due from a Transaction Obligor under any Finance Document.
 
(b) Each payment in respect of costs, expenses or Taxes shall be made in the currency in which the costs, expenses or Taxes are incurred.
 
(c) Any amount expressed to be payable in a currency other than dollars shall be paid in that other currency.
 

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29.6 Change of currency
 
(a) Unless otherwise prohibited by law, if more than one currency or currency unit are at the same time recognised by the central bank of any country as the lawful currency of that country, then:
 
(i) any reference in the Finance Documents to, and any obligations arising under the Finance Documents in, the currency of that country shall be translated into, or paid in, the currency or currency unit of that country designated by the Lender (after consultation with the Borrower); and
 
(ii) any translation from one currency or currency unit to another shall be at the official rate of exchange recognised by the central bank for the conversion of that currency or currency unit into the other, rounded up or down by the Lender (acting reasonably).
 
(b) If a change in any currency of a country occurs, this Agreement will, to the extent the Lender (acting reasonably and after consultation with the Borrower) specifies to be necessary, be amended to comply with any generally accepted conventions and market practice in the Relevant Interbank Market and otherwise to reflect the change in currency.
 
29.7 Currency conversion
 
The obligations of any Transaction Obligor to pay in the due currency shall only be satisfied to the extent of the amount of the due currency purchased after deducting the costs of conversion.
 
29.8 Disruption to Payment Systems etc.
 
If either the Lender determines (in its discretion) that a Disruption Event has occurred or the Lender is notified by the Borrower that a Disruption Event has occurred:
 
(a) the Lender may, and shall if requested to do so by the Borrower, consult with the Borrower with a view to agreeing with the Borrower such changes to the operation or administration of the Facility as the Lender may deem necessary in the circumstances;
 
(b) the Lender shall not be obliged to consult with the Borrower in relation to any changes mentioned in paragraph (a) above if, in its opinion, it is not practicable to do so in the circumstances and, in any event, shall have no obligation to agree to such changes;
 
(c) any such changes agreed upon by the Lender and the Borrower shall (whether or not it is finally determined that a Disruption Event has occurred) be binding upon the Parties and any Transaction Obligors as an amendment to (or, as the case may be, waiver of) the terms of the Finance Documents;
 
(d) the Lender shall not be liable for any damages, costs or losses to any person, any diminution in value or any liability whatsoever (including, without limitation for negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Lender) arising as a result of its taking, or failing to take, any actions pursuant to or in connection with this Clause 29.8 ( Disruption to Payment Systems etc. ).
 
30 SET-OFF
 
The Lender may set off any matured obligation due from a Transaction Obligor under the Finance Documents (to the extent beneficially owned by the Lender) against any matured obligation owed by the Lender to that Transaction Obligor, regardless of the place of payment, booking branch or currency of either obligation.  If the obligations are in different currencies, the Lender may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off.
 

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31 CONDUCT OF BUSINESS BY THE LENDER
 
No provision of this Agreement will:
 
(a) interfere with the right of the Lender to arrange its affairs (tax or otherwise) in whatever manner it thinks fit;
 
(b) oblige the Lender to investigate or claim any credit, relief, remission or repayment available to it or the extent, order and manner of any claim; or
 
(c) oblige the Lender to disclose any information relating to its affairs (tax or otherwise) or any computations in respect of Tax.
 
32 NOTICES
 
32.1 Communications in writing
 
Any communication to be made under or in connection with the Finance Documents shall be made in writing and, unless otherwise stated, may be made by fax or letter.
 
32.2 Addresses
 
The address and fax number (and the department or officer, if any, for whose attention the communication is to be made) of each Party for any communication or document to be made or delivered under or in connection with the Finance Documents are:
 
(a) in the case of the Borrower, that specified in Schedule 1 ( The Parties ); and
 
(b) in the case of any other Obligor or the Lender, that specified in Schedule 1 ( The Parties ) or, if it becomes a Party after the date of this Agreement, that notified in writing to the Lender on or before the date on which it becomes a Party;
 
or any substitute address, fax number or department or officer as an Obligor may notify to the Lender (or the Lender may notify to the other Parties, if a change is made by the Lender) by not less than five Business Days' notice.
 
32.3 Delivery
 
(a) Any communication or document made or delivered by one person to another under or in connection with the Finance Documents will only be effective:
 
(i) if by way of fax, when received in legible form; or
 
(ii) if by way of letter, when it has been left at the relevant address or five Business Days after being deposited in the post postage prepaid in an envelope addressed to it at that address,
 
and, if a particular department or officer is specified as part of its address details provided under Clause 32.2 ( Addresses ), if addressed to that department or officer.
 
(b) Any communication or document to be made or delivered to the Lender will be effective only when actually received by it and then only if it is expressly marked for the attention of the department or officer of the Lender specified in Schedule 1 ( The Parties )(or any substitute department or officer as the Lender shall specify for this purpose).
 
(c) Any communication or document made or delivered to the Borrower in accordance with this Clause will be deemed to have been made or delivered to each of the Transaction Obligors.
 

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(d) Any communication or document which becomes effective, in accordance with paragraphs (a) to (c) above, after 5.00 p.m. in the place of receipt shall be deemed only to become effective on the following day.
 
32.4 Electronic communication
 
(a) Any communication to be made between any two Parties under or in connection with the Finance Documents may be made by electronic mail or other electronic means (including, without limitation, by way of posting to a secure website) if those two Parties:
 
(i) notify each other in writing of their electronic mail address and/or any other information required to enable the transmission of information by that means; and
 
(ii) notify each other of any change to their address or any other such information supplied by them by not less than five Business Days' notice.
 
(b) Any such electronic communication as specified in paragraph (a) above to be made between an Obligor and the Lender may only be made in that way to the extent that those two Parties agree that, unless and until notified to the contrary, this is to be an accepted from of communication.
 
(c) Any such electronic communication as specified in paragraph (a) above made between any two Parties will be effective only when actually received (or made available) in readable form and in the case of any electronic communication made by a Party to the Lender only if it is addressed in such a manner as the Lender shall specify for this purpose.
 
(d) Any electronic communication which becomes effective, in accordance with paragraph (c) above, after 5.00 p.m. in the place in which the Party to whom the relevant communication is sent or made available has its address for the purpose of this Agreement shall be deemed only to become effective on the following day.
 
(e) Any reference in a Finance Document to a communication being sent or received shall be construed to include that communication being made available in accordance with this Clause 32.4 ( Electronic communication ).
 
32.5 English language
 
(a) Any notice given under or in connection with any Finance Document must be in English.
 
(b) All other documents provided under or in connection with any Finance Document must be:
 
(i) in English; or
 
(ii) if not in English, and if so required by the Lender, accompanied by a certified English translation prepared by a translator approved by the Lender and, in this case, the English translation will prevail unless the document is a constitutional, statutory or other official document.
 
33 CALCULATIONS AND CERTIFICATES
 
33.1 Accounts
 
In any litigation or arbitration proceedings arising out of or in connection with a Finance Document, the entries made in the accounts maintained by the Lender are prima facie evidence of the matters to which they relate.
 

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33.2 Certificates and determinations
 
Any certification or determination by the Lender of a rate or amount under any Finance Document is, in the absence of manifest error, conclusive evidence of the matters to which it relates.
 
33.3 Day count convention
 
Any interest, commission or fee accruing under a Finance Document will accrue from day to day and is calculated on the basis of the actual number of days elapsed and a year of 360 days or, in any case where the practice in the Relevant Interbank Market differs, in accordance with that market practice.
 
34 PARTIAL INVALIDITY
 
If, at any time, any provision of a Finance Document is or becomes illegal, invalid or unenforceable in any respect under any law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions under the law of that jurisdiction nor the legality, validity or enforceability of such provision under the law of any other jurisdiction will in any way be affected or impaired.
 
35 REMEDIES AND WAIVERS
 
No failure to exercise, nor any delay in exercising, on the part of the Lender, any Receiver or Delegate, any right or remedy under a Finance Document shall operate as a waiver of any such right or remedy or constitute an election to affirm any Finance Document.  No election to affirm any Finance Document on the part of the Lender, any Receiver or Delegate shall be effective unless it is in writing.  No single or partial exercise of any right or remedy shall prevent any further or other exercise or the exercise of any other right or remedy.  The rights and remedies provided in each Finance Document are cumulative and not exclusive of any rights or remedies provided by law.
 
36 SETTLEMENT OR DISCHARGE CONDITIONAL
 
Any settlement or discharge under any Finance Document between the Lender and any Transaction Obligor shall be conditional upon no security or payment to the Lender by any Transaction Obligor or any other person being set aside, adjusted or ordered to be repaid, whether under any insolvency law or otherwise.
 
37 IRREVOCABLE PAYMENT
 
If the Lender considers that an amount paid or discharged by, or on behalf of, a Transaction Obligor or by any other person in purported payment or discharge of an obligation of that Transaction Obligor to the Lender under the Finance Documents is capable of being avoided or otherwise set aside on the liquidation or administration of that Transaction Obligor or otherwise, then that amount shall not be considered to have been unconditionally and irrevocably paid or discharged for the purposes of the Finance Documents.
 
38 CONFIDENTIAL INFORMATION
 
38.1 Confidentiality
 
The Lender agrees to keep all Confidential Information confidential and not to disclose it to anyone, save to the extent permitted by Clause 38.2 ( Disclosure of Confidential Information ) and to ensure that all Confidential Information is protected with security measures and a degree of care that would apply to its own confidential information.
 

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38.2 Disclosure of Confidential Information
 
The Lender may disclose:
 
(a) to any of its Affiliates and Related Funds and any of its or their officers, directors, employees, professional advisers, auditors, partners and Representatives such Confidential Information as the Lender shall consider appropriate if any person to whom the Confidential Information is to be given pursuant to this paragraph (a) is informed in writing of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the confidentiality of the information or is otherwise bound by requirements of confidentiality in relation to the Confidential Information;
 
(b) to any person:
 
(i) to (or through) whom it assigns (or may potentially assign) all or any of its rights and/or obligations under one or more Finance Documents and to any of that person's Affiliates, Related Funds, Representatives and professional advisers;
 
(ii) with (or through) whom it enters into (or may potentially enter into), whether directly or indirectly, any sub-participation in relation to, or any other transaction under which payments are to be made or may be made by reference to, one or more Finance Documents and/or one or more Transaction Obligors and to any of that person's Affiliates, Related Funds, Representatives and professional advisers;
 
(iii) appointed by the Lender or by a person to whom sub-paragraph (i) or (ii) of paragraph (b) above applies to receive communications, notices, information or documents delivered pursuant to the Finance Documents on its behalf;
 
(iv) who invests in or otherwise finances (or may potentially invest in or otherwise finance), directly or indirectly, any transaction referred to in sub-paragraph (i) or (ii) of paragraph (b) above;
 
(v) to whom information is required or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority or similar body, the rules of any relevant stock exchange or pursuant to any applicable law or regulation;
 
(vi) to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitrations, administrative or other investigations, proceedings or disputes;
 
(vii) to whom or for whose benefit the Lender charges, assigns or otherwise creates Security (or may do so) pursuant to Clause 26.3 ( Security over Lender's rights );
 
(viii) who is a Party, a member of the Group or any related entity of a Transaction Obligor;
 
(ix) as a result of the registration of any Finance Document as contemplated by any Finance Document or any legal opinion obtained in connection with any Finance Document; or
 
(x) with the consent of the Borrower;
 
in each case, such Confidential Information as the Lender shall consider appropriate if:
 
(A) in relation to sub-paragraphs (i), (ii) and (iii) of paragraph (b) above, the person to whom the Confidential Information is to be given has entered into
 

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a Confidentiality Undertaking except that there shall be no requirement for a Confidentiality Undertaking if the recipient is a professional adviser and is subject to professional obligations to maintain the confidentiality of the Confidential Information;
 
(B) in relation to sub-paragraph (iv) of paragraph (b) above, the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking or is otherwise bound by requirements of confidentiality in relation to the Confidential Information they receive and is informed that some or all of such Confidential Information may be price-sensitive information;
 
(C) in relation to sub-paragraphs (v), (vi) and (vii) of paragraph (b) above, the person to whom the Confidential Information is to be given is informed of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of the Lender, it is not practicable so to do in the circumstances;
 
(c) to any person appointed by the Lender or by a person to whom sub-paragraph (i) or (ii) of paragraph (b) above applies to provide administration or settlement services in respect of one or more of the Finance Documents including without limitation, in relation to the trading of participations in respect of the Finance Documents, such Confidential Information as may be required to be disclosed to enable such service provider to provide any of the services referred to in this paragraph (c) if the service provider to whom the Confidential Information is to be given has entered in to a confidentiality agreement substantially in the form of the LMA Master Confidentiality Undertaking for Use With Administration/Settlement Service Providers or such other form of confidentiality undertaking agreed between the Borrower and the Lender;
 
(d) to any rating agency (including its professional advisers) such Confidential Information as may be required to be disclosed to enable such rating agency to carry out its normal rating activities in relation to the Finance Documents and/or the Transaction Obligors if the rating agency to whom the Confidential Information is to be given is informed of its confidential nature and that some or all of such Confidential Information may be price-sensitive information.
 
38.3 Entire agreement
 
This Clause 38 ( Confidential Information ) constitutes the entire agreement between the Parties in relation to the obligations of the Lender under the Finance Documents regarding Confidential Information and supersedes any previous agreement, whether express or implied, regarding Confidential Information.
 
38.4 Inside information
 
The Lender acknowledges that some or all of the Confidential Information is or may be price-sensitive information and that the use of such information may be regulated or prohibited by applicable legislation including securities law relating to insider dealing and market abuse and the Lender undertakes not to use any Confidential Information for any unlawful purpose.
 
38.5 Notification of disclosure
 
The Lender agrees (to the extent permitted by law and regulation) to inform the Borrower:
 
(a) of the circumstances of any disclosure of Confidential Information made pursuant to sub-paragraph (v) of paragraph (b) of Clause 38.2 ( Disclosure of Confidential Information ) except
 

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where such disclosure is made to any of the persons referred to in that paragraph during the ordinary course of its supervisory or regulatory function; and
 
(b) upon becoming aware that Confidential Information has been disclosed in breach of this Clause 38 ( Confidential Information ).
 
38.6 Continuing obligations
 
The obligations in this Clause 38 ( Confidential Information ) are continuing and, in particular, shall survive and remain binding on the Lender for a period of 12 months from the earlier of:
 
(a) the date on which all amounts payable by the Obligors under or in connection with this Agreement have been paid in full and all Commitments have been cancelled or otherwise cease to be available; and
 
(b) the date on which the Lender otherwise ceases to be the Lender.
 
39 CONFIDENTIALITY OF FUNDING RATES AND REFERENCE BANK QUOTATIONS
 
39.1 Confidentiality and disclosure
 
(a) Each Obligor agrees to keep each Funding Rate (and the Lender agrees to keep each Reference Bank Quotation) confidential and not to disclose it to anyone, save to the extent permitted by paragraphs (b), (d) and (e) below.
 
(b) The Lender may disclose any Reference Bank Quotation to the Borrower.
 
(c) The Lender may disclose any Reference Bank Quotation to any person appointed by it to provide administration services in respect of one or more of the Finance Documents to the extent necessary to enable such service provider to provide those services if the service provider to whom that information is to be given has entered into a confidentiality agreement substantially in the form of the LMA Master Confidentiality Undertaking for Use With Administration/Settlement Service Providers or such other form of confidentiality undertaking agreed between the Lender and the relevant Reference Bank.
 
(d) The Lender may disclose any Reference Bank Quotation, and each Obligor may disclose any Funding Rate, to:
 
(i) any of its Affiliates  and any of its or their officers, directors, employees, professional advisers, auditors, partners and Representatives, if any person to whom that Funding Rate or Reference Bank Quotation is to be given pursuant to this paragraph (i) is informed in writing of its confidential nature and that it may be price sensitive information except that there shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the confidentiality of that Funding Rate or Reference Bank Quotation or is otherwise bound by requirements of confidentiality in relation to it;
 
(ii) any person to whom information is required or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority or similar body, the rules of any relevant stock exchange or pursuant to any applicable law or regulation if the person to whom that Funding Rate or Reference Bank Quotation is to be given is informed in writing of its confidential nature and that it may be price sensitive information except that there shall be no requirement to so inform if, in the opinion of the Lender or the relevant Obligor, as the case may be, it is not practicable to do so in the circumstances;
 
(iii) any person to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitration, administrative or other investigations, proceedings or disputes if the person to whom that Funding Rate or Reference Bank
 

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Quotation is to be given is informed in writing of its confidential nature and that it may be price sensitive information except that there shall be no requirement to so inform if, in the opinion of the Lender or the relevant Obligor, as the case may be, it is not practicable to do so in the circumstances; and
 
(iv) any person with the consent of the Lender or Reference Bank, as the case may be.
 
(e) The Lender's obligations in this Clause 39 ( Confidentiality of Funding Rates and Reference Bank Quotations ) relating to Reference Bank Quotations are without prejudice to its obligations to make notifications under Clause 8.4 ( Notification of rates of interest ) provided that the Lender shall not include the details of any individual Reference Bank Quotation as part of any such notification.
 
39.2 Related obligations
 
(a) Each Obligor acknowledges that each Funding Rate (and the Lender acknowledges that each Reference Bank Quotation) is or may be price sensitive information and that its use may be regulated or prohibited by applicable legislation including securities law relating to insider dealing and market abuse and each Obligor undertakes not to use any Funding Rate and the Lender undertakes not to use any Reference Bank Quotation for any unlawful purpose.
 
(b) The Lender and each Obligor agree (to the extent permitted by law and regulation) to inform the Lender or Reference Bank, as the case may be:
 
(i) of the circumstances of any disclosure made pursuant to sub-paragraph (ii) of paragraph (d) of Clause 39.1 ( Confidentiality and disclosure ) except where such disclosure is made to any of the persons referred to in that paragraph during the ordinary course of its supervisory or regulatory function; and
 
(ii) upon becoming aware that any information has been disclosed in breach of this Clause 39 ( Confidentiality of Funding Rates and Reference Bank Quotations )).
 
39.3 No Event of Default
 
No Event of Default will occur under Clause 25.4 ( Other obligations ) by reason only of an Obligor's failure to comply with this Clause 39 ( Confidentiality of Funding Rates and Reference Bank Quotations ).
 
40 COUNTERPARTS
 
Each Finance Document may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of the Finance Document.
 

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SECTION 11
 
GOVERNING LAW AND ENFORCEMENT
 
41 GOVERNING LAW
 
This Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.
 
42 ENFORCEMENT
 
42.1 Jurisdiction
 
(a) The courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement (including a dispute regarding the existence, validity or termination of this Agreement or any non-contractual obligation arising out of or in connection with this Agreement) (a " Dispute ").
 
(b) The Obligors accept that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly no Obligor will argue to the contrary.
 
(c) This Clause 42.1 ( Jurisdiction ) is for the benefit of the Lender only.  As a result, the Lender shall not be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction.  To the extent allowed by law, the Lender may take concurrent proceedings in any number of jurisdictions.
 
42.2 Service of process
 
(a) Without prejudice to any other mode of service allowed under any relevant law, each Obligor (other than an Obligor incorporated in England and Wales):
 
(i) irrevocably appoints Messrs. E.J.C Album Solicitors, presently of Landmark House, 190 Willifield Way, London, NW11 GY1, England (Attention of Mr. Eduard Album Fax +44 (0) 20 8457 5558, e-mail: ejca@mitgr.com ) as its agent for service of process in relation to any proceedings before the English courts in connection with any Finance Document; and
 
(ii) agrees that failure by a process agent to notify the relevant Obligor of the process will not invalidate the proceedings concerned.
 
(b) If any person appointed as an agent for service of process is unable for any reason to act as agent for service of process, the Borrower (on behalf of all the Obligors) must immediately (and in any event within 14 days of such event taking place) appoint another agent on terms acceptable to the Lender.  Failing this, the Lender may appoint another agent for this purpose.
 
This Agreement has been entered into on the date stated at the beginning of this Agreement.
 

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SCHEDULE 1
 
THE PARTIES
 
PART A
 
THE OBLIGORS
 

Name of Borrower
Place of Incorporation
Registration number (or equivalent, if any)
Address for Communication
       
Champion Ocean Navigation Co.
Liberia
C-118163
c/o 16 Grigoriou Lambraki, 16674 Glyfada, Athens, Greece
       

 
Name of Guarantor
Place of Incorporation
Registration number (or equivalent, if any)
Address for Communication
       
Seanergy Maritime Holdings Corp.
Marshall Islands
27721
c/o 16 Grigoriou Lambraki, 16674 Glyfada, Athens, Greece
       
       

 

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PART B
 
THE ORIGINAL LENDER
 

Name of Original Lender
 
Address for Communication
     
Natixis
 
Natixis
68/76, Quai de la Râpée, F-75012 Paris, France
Middle Office:

Attention : Sylvie Noel
Fax :              +33.1.58.19.36.72
Email: sylvie.noel@natixis.com
 
 
With copy to:
 
Front Office:
Attention:
Franck Chambras
Fax:    +33.1.58.19.36.60
Email:franck.chambras@natixis.com
 
 

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SCHEDULE 2
 
CONDITIONS PRECEDENT
 
PART A
 
CONDITIONS PRECEDENT TO UTILISATION REQUEST
 
1 Obligors
 
1.1 A copy of the constitutional documents of each Transaction Obligor (other than any third party Approved Manager).
 
1.2 A copy of a resolution of the board of directors of each Transaction Obligor (other than any third party Approved Manager):
 
(a) approving the terms of, and the transactions contemplated by, the Finance Documents to which it is a party and resolving that it execute the Finance Documents to which it is a party;
 
(b) authorising a specified person or persons to execute the Finance Documents to which it is a party on its behalf; and
 
(c) authorising a specified person or persons, on its behalf, to sign and/or despatch all documents and notices (including, if relevant, a Utilisation Request and each Selection Notice) to be signed and/or despatched by it under, or in connection with, the Finance Documents to which it is a party.
 
1.3 An original of the power of attorney of any Transaction Obligor (other than any third party Approved Manager) authorising a specified person or persons to execute the Finance Documents to which it is a party.
 
1.4 A certificate of incumbency in respect of any third party Approved Manager.
 
1.5 A specimen of the signature of each person authorised by the resolution referred to in paragraph 1.2 above.
 
1.6 A copy of a resolution signed by the Guarantor as the holder of the issued shares in the Borrower, approving the terms of, and the transactions contemplated by, the Finance Documents to which the Borrower is a party.
 
1.7 A certificate of each Obligor (signed by a director) confirming that borrowing or guaranteeing, as appropriate, the Commitment would not cause any borrowing, guaranteeing or similar limit binding on that Obligor to be exceeded.
 
1.8 A certificate of each Obligor that is incorporated outside the UK (signed by a director) certifying either that (i) it has not delivered particulars of any UK Establishment to the Registrar of Companies as required under the Overseas Regulations or (ii) it has a UK Establishment and specifying the name and registered number under which it is registered with the Registrar of Companies.
 
1.9 A certificate of an authorised signatory of the relevant Obligor certifying that each copy document relating to it specified in this Part A of Schedule 2 ( Conditions Precedent ) is correct, complete and in full force and effect as at a date no earlier than the date of this Agreement.
 
2 MOA, Assignable Charter and other documents
 
2.1 Copies of the MOA and of all documents signed or issued by the Borrower or the Seller (or both of them) under or in connection with it.
 

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2.2 Copies of any Assignable Charter and of all documents signed or issued by the Borrower or the Charterer (or both of them) under or in connection with it.
 
2.3 Such documentary evidence as the Lender and its legal advisers may require in relation to the due authorisation and execution of the MOA and the Assignable Charter by each of the parties thereto.
 
3 Finance Documents
 
3.1 A duly executed original of any Finance Document not otherwise referred to in this Schedule 2 ( Conditions Precedent ).
 
3.2 A duly executed original of any other document required to be delivered by each Finance Document if not otherwise referred to this this Schedule 2 ( Conditions Precedent ).
 
4 Security
 
4.1 A duly executed original of the Account Security (and of each document to be delivered under it).
 
5 Legal opinions
 
5.1 A legal opinion of Watson Farley & Williams, legal advisers to the Lender in England, substantially in the form obtained by the Lender before signing this Agreement.
 
5.2 If a Transaction Obligor (other than any third party Approved Manager) is incorporated in a jurisdiction other than England and Wales, a legal opinion of the legal advisers to the Lender in the relevant jurisdiction, substantially in the form obtained by the Lender before signing this Agreement.
 
6 Other documents and evidence
 
6.1 Confirmation by the Lender that the obligations set out in a side letter dated on or near the date of this Agreement have been met to its satisfaction.
 
6.2 Evidence that any process agent referred to in Clause 42.2 ( Service of process ), if not an Obligor, has accepted its appointment.
 
6.3 A copy of any other Authorisation or other document, opinion or assurance which the Lender considers to be necessary or desirable (if it has notified the Borrower accordingly) in connection with the entry into and performance of the transactions contemplated by any Transaction Document or for the validity and enforceability of any Transaction Document.
 
6.4 The Original Financial Statements of the Guarantor.
 
6.5 The original of any mandates or other documents required in connection with the opening or operation of the Earnings Account.
 
6.6 Evidence that the costs and expenses then due from the Borrower pursuant to Clause 14 ( Costs and Expenses ) have been paid or will be paid by the Utilisation Date.
 
6.7 Such evidence as the Lender may require for it to be able to satisfy its "know your customer" or similar identification procedures in relation to the transactions contemplated by the Finance Documents (including, without limitation, certificate of incorporation, list of beneficial owners and directors, identification of ultimate beneficial owners and signatories).
 

90

 
PART B
 
CONDITIONS PRECEDENT TO UTILISATION
 
1 Borrower
 
A certificate of an authorised signatory of the Borrower certifying that each copy document which it is required to provide under this Part B of Schedule 2 ( Conditions Precedent ) is correct, complete and in full force and effect as at the Utilisation Date.
 
2 Ship and other security
 
2.1 A duly executed original of the Mortgage and the General Assignment and of each document to be delivered under or pursuant to each of them together with documentary evidence that the Mortgage has been duly registered or recorded (as the case may be) as a valid first preferred or priority (as the case be) ship mortgage in accordance with the laws of the jurisdiction of the Approved Flag.
 
2.2 Documentary evidence that the Ship:
 
(a) has been unconditionally delivered by the Seller to, and accepted by, the Borrower under the MOA and that the full purchase price payable and all other sums due to the Seller under the MOA, other than the sums to be financed pursuant to the Loan, have been paid to the Seller;
 
(b) is definitively and permanently (or, if applicable in the relevant jurisdiction of the Approved Flag, provisionally (followed thereafter by permanent registration according to the procedure of the jurisdiction of the Approved Flag)) registered in the name of the Borrower under the Approved Flag;
 
(c) is in the absolute and unencumbered ownership of the Borrower save as contemplated by the Finance Documents;
 
(d) maintains the Approved Classification with the Approved Classification Society free of all recommendations and conditions of the Approved Classification Society; and
 
(e) is insured in accordance with the provisions of this Agreement and all requirements in this Agreement in respect of insurances have been complied with.
 
2.3 Documents establishing that the Ship will, as from the Utilisation Date, be managed commercially by the Approved Commercial Manager and managed technically by the Approved Technical Manager on terms acceptable to the Lender, together with:
 
(a) a Manager's Undertaking for each of the Approved Technical Manager and the Approved Commercial Manager; and
 
(b) copies of the Approved Technical Manager's Document of Compliance and of the Ship's Safety Management Certificate (together with any other details of the applicable Safety Management System which the Lender requires) and of any other documents required under the ISM Code and the ISPS Code in relation to the Ship including without limitation an ISSC.
 
2.4 An opinion from an independent insurance consultant acceptable to the Lender on such matters relating to the Insurances as the Lender may require.
 
3 Legal opinions
 
Legal opinions of the legal advisers to the Lender in the jurisdiction of the Approved Flag of the Ship, Liberia and such other relevant jurisdictions as the Lender may require.
 

91

 
4 Other documents and evidence
 
Evidence that the costs and expenses then due from the Borrower pursuant to Clause 14 ( Costs and Expenses ) have been paid or will be paid by the Utilisation Date.
 
 
 

92

 
SCHEDULE 3
 
REQUESTS
 
PART C
 
UTILISATION REQUEST
 
From:              Champion Ocean Navigation Co.
 
To:                   Natixis
 
Dated:                            [ l ]
 
Dear Sirs
 
Natixis – $39,412,000Facility Agreement dated [ l ] (the "Agreement")
 
1 We refer to the Agreement.  This is a Utilisation Request.  Terms defined in the Agreement have the same meaning in this Utilisation Request unless given a different meaning in this Utilisation Request.
 
2 We wish to borrow the Loan on the following terms:
 
Proposed Utilisation Date:
[ l ] (or, if that is not a Business Day, the
next Business Day)
   
Amount:
[ l ]
   
Interest Period:
[ l ]
   
3 We confirm that each condition specified in Clause 4.1 ( Initial conditions precedent ) and Clause 4.2 ( Further conditions precedent ) of the Agreement is satisfied on the date of this Utilisation Request.
 
4 The proceeds of the Loan should be credited to [account].
 
5 This Utilisation Request is irrevocable.
 
Yours faithfully
 
____________________
[ l ]
authorised signatory for
Champion Ocean Navigation Co.

93

 
PART D
 
SELECTION NOTICE
 
 
From:
Champion Ocean Navigation Co.
   
To:
Natixis
   
Dated:                            [ l ]
 
Dear Sirs
 
Champion Ocean Navigation Co. - $39,412,000 Facility Agreement dated [ l ] (the "Agreement")
 
1 We refer to the Agreement.  This is a Selection Notice.  Terms defined in the Agreement have the same meaning in this Selection Notice unless given a different meaning in this Selection Notice.
 
2 We request that the next Interest Period for the Loan be [ l ].
 
3 This Selection Notice is irrevocable.
 
Yours faithfully
 
____________________
[ l ]
authorised signatory for
Champion Ocean Navigation Co.
 

94

 
SCHEDULE 4
 
FORM OF COMPLIANCE CERTIFICATE
 
 
To:
Natixis as Lender
   
From:
Seanergy Maritime Holdings Corp.
 
Dated:                            [ l ]
 
Dear Sirs
 
Champion Ocean Navigation Co. – $39,412,000 Facility Agreement dated [ l ] (the "Agreement")
 
1 We refer to the Agreement.  This is a Compliance Certificate.  Terms defined in the Agreement have the same meaning when used in this Compliance Certificate unless given a different meaning in this Compliance Certificate.
 
2 We confirm that:
 
2.1 [the Leverage Ratio does not exceed 75 per cent.; and]
 
2.2 [the ratio of EBITDA to Net Interest Expenses (as shown in the relevant financial statements accompanying this Compliance Certificate) is not less than 2:1; and]
 
2.3 [we maintain Cash and Cash Equivalents in an amount of [$    ] inclusive of [contractually committed but undrawn parts of] shareholders' Notes in an aggregate amount of [$    ][made available by ourselves].
 
3 [We also confirm that the Borrower maintains in the Earnings Account a minimum credit balance of not less $500,000 (free of Security other than in favour of the Lender).]
 
4 [We confirm that no Event of Default is continuing.]
 

 
Signed:
________________________
 
[Director] [Chief Executive Officer]
 
Seanergy Maritime Holdings Corp.


   
 
________________________
 
[Director]
 
Seanergy Maritime Holdings Corp.
 
 
 
95
 
 
SCHEDULE 5
 
DETAILS OF THE SHIP
 
 

 
Ship name
Type
GRT
NRT
Approved Flag
Approved Classification Society
Approved Classification
Approved Commercial Manager
Approved Technical Manager
" MAXIMUS "
(tbr "CHAMPIONSHIP")
 
Bulk Carrier
93,196
59,295
Liberia
Bureau Veritas
Bureau Veritas
Fidelity Marine or Seanergy Management (as the case may be)
V. Ships or Seanergy Shipmanagement  (as the case may be)

 

96

 
SCHEDULE 6

TIMETABLES
 
 
Delivery of a duly completed Utilisation Request (Clause 5.1 ( Delivery of a Utilisation Request )) or a Selection Notice (Clause 9.1 ( Selection of Interest Periods ))
 
Three Business Days before the intended Utilisation Date (Clause 5.1 ( Delivery of a Utilisation Request )) or the expiry of the preceding Interest Period (Clause 9.1 ( Selection of Interest Periods ))
     
LIBOR is fixed
 
Quotation Day as of 11:00 am London time
     
Reference Bank Rate calculated by reference to available quotations in accordance with Clause 10.2 ( Calculation of Reference Bank Rate )
 
Noon on the Quotation Day

 

97

 
EXECUTION PAGES
 
 
BORROWER
 
SIGNED by Theodora Mitropetrou
) /s/ Theodora Mitropetrou
duly authorised attorney-in-fact
)
for and on behalf of
)
CHAMPION OCEAN NAVIGATION CO.
)
in the presence of:
 
)
   
 
Witness' signature: /s/ Pat Skala
)
Witness' name:  PAT SKALA
)
Witness' address:
)
WATSON, FARLEY & WATSON
348 SYNGROU AVENUE
176 74 KALLITHEA
ATHENS - GREECE

GUARANTOR
 
SIGNED by Theodora Mitropetrou
) /s/ Theodora Mitropetrou
duly authorised attorney-in-fact
)
for and on behalf of
)
SEANERGY MARITIME HOLDINGS CORP.
)
in the presence of:
)

 
Witness' signature: /s/ Pat Skala
)
Witness' name:  PAT SKALA
)
Witness' address:
)
WATSON, FARLEY & WATSON
348 SYNGROU AVENUE
176 74 KALLITHEA
ATHENS - GREECE

 
ORIGINAL LENDER
 
SIGNED by Andreas Giakoumelos
) /s/ Andreas Giakoumelos
duly authorised attorney-in-fact
)
for and on behalf of
)
NATIXIS
)
in the presence of:
)

 
Witness' signature: /s/ Pat Skala
)
Witness' name:  PAT SKALA
)
Witness' address:
)
WATSON, FARLEY & WATSON
348 SYNGROU AVENUE
176 74 KALLITHEA
ATHENS - GREECE

98
Exhibit 8.1

SUBSIDIARIES OF SEANERGY MARITIME HOLDINGS CORP.

Subsidiary
 
Jurisdiction of Incorporation
     
Seanergy Management Corp.
 
Republic of the Marshall Islands
     
Seanergy Shipmanagement Corp.
 
Republic of the Marshall Islands
     
Leader Shipping Co.
 
Republic of the Marshall Islands
     
Sea Glorius Shipping Co.
 
Republic of the Marshall Islands
     
Sea Genius Shipping Co.
 
Republic of the Marshall Islands
     
Amazons Management Inc.
 
Republic of the Marshall Islands
     
Lagoon Shipholding Ltd.
 
Republic of the Marshall Islands
     
Cynthera Navigation Ltd.
 
Republic of the Marshall Islands
     
Martinique International Corp.
 
British Virgin Islands
     
Harbour Business International Corp.
 
British Virgin Islands
     
Waldeck Maritime Co.
 
Republic of the Marshall Islands
     
Maritime Capital Shipping Limited
 
Bermuda
     
Maritime Capital Shipping (HK) Limited
 
Hong Kong
     
Maritime Grace Shipping Limited
 
British Virgin Islands
     
Maritime Glory Shipping Limited
 
British Virgin Islands
     
Atlantic Grace Shipping Limited
 
British Virgin Islands
     
Premier Marine Co.
 
Republic of the Marshall Islands
     
Gladiator Shipping Co.
 
Republic of the Marshall Islands
     
Guardian Shipping Co.
 
Republic of the Marshall Islands
     
Champion Ocean Navigation Co.
 
Liberia
     
Squire Ocean Navigation Co.
 
Liberia
     
Pembroke Chartering Services Limited
 
Malta
     

 
Exhibit 4.37

 
 
MEMORANDUM OF AGREEMENT
Norwegian Shipbrokers' Association's Memorandum of Agreement for sale and purchase
of ships. Adopted by The Baltic and International Maritime Council (BIMCO) in 1956.
Code-name
SALEFORM 1993


 
Dated: 6 August 2015

Cape May Marine Inc., of the British Virgin Islands
hereinafter called the Sellers, have agreed to sell, and
1
 

CHAMPION OCEAN NAVIGATION CO., of Liberia
hereinafter called the Buyers, have agreed to buy the
2

Name: MAXIMUS
3

Classification Society/Class:
BV
4
Built:   2011
By: Sundong Shipbuilding & Marine Eng., South Korea
5
Flag: Isle of Man
Place of Registration:   Douglas
6
Call sign: 2CPB2
Grt/Nrt: 93.196/59.298
7
Register IMO Number: 9403516
8
hereinafter called the Vessel, on the following terms and conditions:
9
Definitions
10

" Banking days " are days on which banks are open in the country of the currency
11
Stipulated for the Purchase Price in Clause 1 ,   and in the place of closing stipulated in Clause 8, in the country of the Vessel's flag ,   Greece, USA, UK and in the country of the Vessel's mortgagee bank .
12

" in writing " or " written " means a letter handed over from the Sellers to the Buyers or vice versa,
13
a registered letter, telefax or other modern form of written communication .
14

" Classification Society " or " Class " means the Society referred to in line 4.
 
" Purchase Agreement " means the purchase agreement dated 6 August 2015 made by and among, inter alios, Seanergy (as defined in Clause 21 hereof) and the Sellers.
 
15
1.
Purchase Price:
USD 41,717,834 (United States Dollars forty one million seven hundred seventeen thousand eight hundred thirty four) only
16
       
2.
Deposit
 
17

As security for the correct fulfilment of this Agreement  the  Buyers shall pay a deposit of 1 0 %
18
(ten per cent) of the Purchase Price within   banking days from the date of this
19
Agreement. This deposit shall be placed with
20
and   held  by them in a joint  account  for the  Sellers  and  the  Buyers, to be released in accordance
21
with joint written instructions of the  Sellers  and   the  Buyers.  Interest, if any, to  be  credited to  the
22
Buyers. Any fee charged  for holding  the said deposit  shall  be  borne  equally  by  the  Sellers  and  the
23
Buyers.
24

3.
Payment
 
25
 
The said Purchase Price   shall be paid in full free of bank charges by Buyers to Sellers' bank account,
details of which shall be furnished by Sellers.
 
26
before delivery of the Vessel, but not later than 3 (three) Banking days after the Vessel is in every respect
27
physically ready for delivery in accordance with the terms and conditions of this Agreement and
28
Notice of Readiness ("NOR") has been given in accordance with Clause 5.
 
29

4.
Inspections
 
30

a)*
The Buyers have waived the physical inspection for the Vessel and have accepted her. The Buyers have inspected and accepted the Vessel's classification records. Therefore the sale is outright and definite, subject only to the terms and conditions of this Agreement . The Buyers
31
 
have also inspected the Vessel at/in   [               ] on   [               ]
32
 
and have accepted the Vessel following this inspection and   the sale is outright and definite,
33
 
subject only to the terms and conditions of this Agreement.
34

b)*
The  Buyers  shall   have  the right  to   inspect  the  Vessel's     classification  records   and   declare
35
 
whether same are accepted  or  not   within
36

 
The Sellers shall provide for   inspections of the Vessel at/in
37

 
The  Buyers  shall  undertake  the  inspection   without  undue  delay  to  the  Vessel.   Should  the
38
 
Buyers  cause  undue  delay  they  shall  compensate  the  Sellers  for the losses thereby incurred.
39
 
The  Buyers  shall  inspect  the  Vessel without opening up   and without    cost  to  the  Sellers
40
 
During  the  inspection,  the  Vessel's  deck  and  engine  log  books  shall  be  made  available for
41
 
examination  by  the  Buyers. If the  Vessel  is  accepted  after  such  inspection,  the  sale shall
42
 
become outright and definite, subject  only  to  the  terms  and  conditions  of  this  Agreement,
43
 
provided the  Sellers receive   written notice  of  acceptance  from  the  Buyers  within  72 hours
44
 
after  completion  of  such  inspection.
45
 
Should  notice  of  acceptance  of   the  Vessel's classification  records  and  of  the Vessel not be
46
 
received  by  the  Sellers  as  aforesaid, the deposit together  with   interest earned   shall  be
47
 
released  immediately to the  Buyers, whereafter  this  Agreement shall be   null and void.
48

*
4 a) and 4b) are alternatives; delete whichever is not applicable. In the absence of deletions,
49
 
alternative 4a) to apply.
50

5.
Notices, time and place of delivery
 
51

a)
The Sellers shall keep the Buyers well informed of the Vessel's itinerary   and shall
52
 
provide the Buyers with 30/20/15/10/7/5/ 3   approximate and 2 and 1 definite day s notice s of the expected time and place of arrival at the
53
 
intended time and place of drydocking/underwater inspection/ delivery. When the Vessel is at the
54
 
place of delivery and in every respect physically ready for delivery in accordance with this
55
 
Agreement, the Sellers shall give the Buyers a written NOR for delivery.
 
56
b)
The Vessel shall be delivered to the Buyers free of stowaways, free of cargo, with clean swept holds
57
 
safely afloat at a safe and accessible berth, port or anchorage worldwide .
58
   
59
 
Expected time of delivery : 30 September 2015 – 31 December 2015 or such later date at Buyers' option.
 
60
 
Date of cancelling (see Clauses 5 c), 6 b) (iii) and 14): 31 December 2015 or such later date at Buyers' option .
61

c)
If the Sellers anticipate that, notwithstanding the exercise of due diligence by them, the
62
 
Vessel will not be ready for delivery by the cancelling date they may notify the Buyers in
63
 
writing stating the date when they anticipate that the Vessel will be ready for delivery and
64
 
propose a new cancelling date. Upon receipt of such notification the Buyers shall have the
65
 
option of either cancelling this Agreement in accordance with Clause 14 within 4 7 running
66
 
days of receipt of the notice or of accepting the new date as the new cancelling date. If the
67
 
Buyers have not declared their option within 4   7 running days of receipt of the Sellers'
68
 
notification or if the Buyers accept the new date, the date proposed in the Sellers' notification
69
 
shall be deemed to be the new cancelling date and shall be substituted for the cancelling
70
 
date stipulated in line 61.
71

 
If this Agreement is maintained with the new cancelling date all other terms and conditions
72
 
hereof including those contained in Clauses 5 a) and 5 c) shall remain unaltered and in full
73
 
force and effect. Cancellation or failure to cancel shall be entirely without prejudice to any
74
 
claim for damages the Buyers may have under Clause 14 for the Vessel not being ready by
75
 
the original cancelling date.
76


d)
Should the Vessel become an actual, constructive or compromised total loss before delivery
77
 
the deposit together  with  interest  earned shall be released immediately to the Buyers
78
 
whereafter this Agreement shall be null and void .
79

6.
Drydocking / Divers Inspection - SEE CLAUSE 18 of this Agreement .
80

a)**
The Sellers shall place the Vessel in drydock at the port of delivery for inspection by the
81
 
Classification Society of the Vessel's underwater parts below the deepest load line, the
82
 
extent of the inspection being in accordance with the Classification Society's rules.  If the
83
 
rudder, propeller, bottom or other underwater parts below the deepest load line are found
84
 
broken, damaged or defective so as to affect the Vessel's class, such defects shall be made
85
 
good at the Sellers' expense to the satisfaction of the Classification Society without
86
 
condition/recommendation*.
87

b)**
(i)              The Vessel is to be delivered without drydocking.  However, the Buyers shall
88
 
have the right at their expense to arrange for an underwater inspection by a diver approved
89
 
by the Classification Society   prior to the delivery of the Vessel.  The Sellers shall at their
90
 
cost make the Vessel available for such inspection. The extent of the inspection and the
91
 
conditions under which it is performed shall be to the satisfaction of the Classification
92
 
Society. If the conditions at the port of delivery are unsuitable for such inspection, the
93
 
Sellers shall make the Vessel available   at a suitable alternative place near to the delivery
94
 
port.
95

 
ii)              If the rudder, propeller, bottom or other underwater parts below the deepest load line
96
 
are found broken, damaged or defective so as to affect the Vessel's class, then unless
97
 
repairs can be carried out afloat to the satisfaction of the Classification Society, the Sellers
98
 
shall arrange for the Vessel to be drydocked at their expense for inspection by the
99
 
Classification Society of the Vessel's underwater parts below the deepest load line, the
100
 
extent of the inspection being in accordance with the Classification Society's rules.  If the
101
 
rudder, propeller, bottom or other underwater parts below the deepest load line are found
102
 
broken, damaged or defective so as to affect the Vessel's class, such defects shall be made
103
 
good by the Sellers at their expense to the satisfaction of the Classification Society
104
 
without condition/recommendation*. In such event the Sellers are to pay also for the cost of
105
 
the underwater inspection and the Classification Society's attendance.
106

 
(iii)              If the Vessel is to be drydocked pursuant to Clause 6 b) (ii) and no suitable dry-
107
 
docking facilities are available at the port of delivery, the Sellers shall take the Vessel
108
 
to a port where suitable drydocking facilities are available, whether within or outside the
109
 
delivery range as per Clause 5 b). Once drydocking has taken place the Sellers shall deliver
110
 
the Vessel at a port within the delivery range as per Clause 5 b) which shall, for the
111
 
purpose of this Clause, become the new port of delivery. In such event the cancelling date
112
 
provided for in Clause 5 b) shall be extended by the additional time required for the
113
 
drydocking and extra steaming, but limited to a maximum of 14 running days.
114

c)
If the Vessel is drydocked pursuant to Clause 6 a) or 6 b) above
115

 
(i)              the Classification Society may require survey of the tailshaft system, the extent of
116
 
the survey being to the satisfaction of the Classification surveyor. If such survey is not
117
 
required by the Classification Society, the Buyers shall have the right to require the tailshaft
118
 
to be drawn and surveyed by the Classification Society, the extent of the survey being in
119
 
accordance with the Classification Society's rules for tailshaft survey and consistent with
120
 
the current stage of the Vessel's survey cycle. The Buyers shall declare whether they
121
 
require the tailshaft to be drawn and surveyed not later than by the completion of the
122
 
inspection by the Classification Society. The drawing and refitting of the tailshaft shall be
123
 
arranged by the Sellers. Should any parts of the tailshaft system be condemned or found
124
 
defective so as to affect the Vessel's class, those parts shall be renewed or made good at
125
 
the Sellers' expense to the satisfaction of the Classification Society without
126
 
condition/recommendation*.
127

 
(ii)              the expenses relating to the survey of the tailshaft system shall be borne
128
 
by the Buyers unless the Classification  Society requires such survey to be carried out, in
129
 
which case the Sellers shall pay these expenses. The Sellers shall also pay the expenses
130

 
if the Buyers require the survey  and  parts of the system are condemned or found defective
131
 
or broken so as to affect the Vessel's class*.
132

 
(iii)              the expenses in connection with putting the Vessel in and taking her out of
133
 
drydock, including the drydock dues and the Classification Society's fees shall be paid by
134
 
the Sellers if the Classification Society issues any condition/recommendation* as a result
135
 
of the survey or if it requires survey of the tailshaft system. In all other cases the Buyers
136
 
shall pay the aforesaid expenses, dues and fees.
137

 
(iv)              the Buyers' representative shall have the right to be present in the drydock, but
138
 
without interfering with the work or decisions of the Classification surveyor.
139

 
(v)              the Buyers shall have the right to have the underwater parts of the Vessel
140
 
cleaned and painted at their risk and expense without interfering with the Sellers' or the
141
 
Classification surveyor's work, if any, and without affecting the Vessel's timely delivery. If,
142
 
however, the Buyers' work in drydock is still in progress when the Sellers have
143
 
completed the work which the Sellers are required to do, the additional docking time
144
 
needed to complete the Buyers' work shall be for the Buyers' risk and expense. In the event
145
 
that the Buyers' work requires such additional time, the Sellers may upon completion of the
146
 
Sellers' work tender Notice of Readiness for delivery whilst the Vessel is still in drydock
147
 
and the Buyers shall be obliged to take delivery in accordance with Clause 3, whether
148
 
the Vessel is in drydock or not and irrespective of Clause 5 b).
149

*
Notes, if any, in the surveyor's report which are accepted by the Classification Society
150
 
without condition/recommendation are not to be taken into account.
151

**
6 a) and 6 b) are alternatives; delete whichever is not applicable. In the absence of deletions,
152
 
alternative 6 a) to apply
153

7.
Spares/bunkers, etc.
154

The Sellers shall deliver the Vessel to the Buyers with everything belonging to her on board and on
155
shore , including broached/unbroached stores and provisions and spares without extra payment . All spare parts and spare equipment including spare tail-end shaft(s) and/or spare
156
propeller(s)/propeller blade(s), if any, belonging to the Vessel at the time of inspection used or
157
unused, whether on board or not shall become the Buyers' property.
158
Forwarding charges, if any, shall be for the Buyers' account. The Sellers are not required to replace spare
159
parts including spare tail-end shaft(s) and spare propeller(s)/propeller blade(s) which are taken out
160
of spare and used as replacement prior to delivery, but the replaced items shall be the property of
161
the Buyers. The radio installation, GMDSS and navigational equipment shall be included in the sale without extra payment if they are the property of the Sellers. ECDIS (with dongle card and maps) shall be included in the sale and Buyers shall pay the Sellers 50% of the cost (Euro 12,500).
162
Unused stores and provisions shall be included in the sale and be taken over
163
by the Buyers without extra payment .
164

The Sellers have the right to take ashore crockery, plates, cutlery, linen and other articles bearing the
165
Sellers' flag or name, provided they replace same with similar unmarked items. Library, forms, etc .,
166
exclusively for use in the Sellers' vessel(s), shall be excluded without compensation. Captain's,
167
Officers' and Crew's personal belongings including the slop chest are to be excluded from the sale,
168
as well as the following additional items (including items on hire):
 
-UNITOR'S OXYGEN/ACETYLENE/FREON CYLINDERS, EMPTY/FULL;
-MARICHEM SYSTEM MHCS 200;
-ORIGINAL FLAG CERTIFICATES (Registry – Intern. Tonnage – Radio Station Licence – Minimum Safe Manning – CLCertificate - MLCertificate ) – necessary for Ship's deletion from the articles;
-LIBRARY, FORMS, RECORDS, REPORTS, DECK and ENGINEE Log Books, CORRESPONDENSE exclusively used by the Sellers;
-CD ROM QSEMS;
-SEAGULL TRAINING CDs;
-Lloyds MARINER – Risk Assessment CDs;
-LR Manager (Working hours) CDs;
-AMVER DISKETTE;
-EST SAFETY LABELS (35);
169

-ISPS CODE / CD / INSTRUCTIONS AND SECURITY AWARENESS CBT 115 AND ISPS TRAINER;
-OWNERS LISTS/ISM & ISPS system manuals / Company's Soft and Hardware/PC's etc.; and
-SECURITY IDENTIFICATION BADGES (CREW AND VISITORS) .
 
 
The Buyers shall take over the remaining bunkers and unused lubricating oils in storage tanks and
170
sealed drums and pay the current net market  price (excluding  barging  expenses) at the port and date
171
of delivery of the Vessel Buyers shall take over the bunkers remaining on board with cost as per Platts prices for Singapore published three (3) banking days prior to the Vessel's delivery. Buyers shall also take over the remaining unbroached lubricants respectively in sealed drums/tins or in designated storage tanks not having passed to the engines/equipment through Vessel's system at Sellers' net contract prices of last supply as evidenced by the relevant copies of invoices. Exact quantities of remaining bunkers and lubricating oils shall be measured and agreed by and between the Sellers' and the Buyers' representatives latest by one (1) Banking day prior to expected date of delivery of the Vessel.
172
Payment under this Clause shall be made in cash at the same time and place
173
and in the same currency as the Purchase Price.
174

8.
Documentation
175
 
       
The place of closing: Athens, Greece
 
  176   

In exchange for payment of the Purchase Price and delivery of the Vessel the Sellers shall furnish the Buyers and the Buyers shall furnish the Sellers with the delivery documents stated in this Clause and in Clause 17 of this Agreement. namely :
 
177
178
a)
Legal Bill of Sale in a form recordable in           (the country in  which  the Buyers  are
179
 
to register the Vessel),  warranting that  the  Vessel  is  free  from  all  encumbrances,  mortgages
180
 
and  maritime   liens  or  any  other  debts   or  claims  whatsoever,  duly  notarially  attested  and
181
 
legalized by the consul of such country or other competent  authority.
182

b)
Current Certificate of  Ownership  issued  by  the  competent  authorities  of  the  flag  state  of
183
 
the Vessel.
184

c)
Confirmation of Class issued within 72 hours prior to delivery.
185

d)
Current Certificate issued by the competent  authorities  stating  that  the  Vessel  is  free  from
186
 
registered encumbrances
187

e)
Certificate of Deletion of the Vessel from the  Vessel's  registry  or  other  official  evidence  of
188
 
deletion appropriate to the Vessel's registry at the time of delivery, or,  in  the  event  that  the
189
 
registry does not  as  a  matter  of  practice  issue  such  documentation  immediately,  a  written
190
 
undertaking by the Sellers to effect deletion from the Vessel's  registry  forthwith  and  furnish  a
191
 
Certificate or other official evidence of deletion to  the  Buyers  promptly  and  latest  within  4
192
 
(four) weeks after the  Purchase  Price  has  been paid and the  Vessel has been delivered.
193

f)
Any  such  additional  documents  as  may  reasonably  be  required  by  the  competent  authorities
194
 
for  the purpose of  registering  the  Vessel, provided  the   Buyers  notify  the  Sellers  of  any  such
195
 
documents as soon as possible after the date of this Agreement
196

At the time of delivery the Buyers and Sellers shall sign and deliver to each other a Protocol of
197
Delivery and Acceptance confirming the date and time of delivery of the Vessel from the Sellers to the
198
Buyers.
199

At the time of delivery the Sellers shall hand over   to the Buyers the classification certificate(s) as well as all
200
Plans etc., which are on board the Vessel. Other certificates which are on board the Vessel shall also
201
be handed over to the Buyers unless the Sellers are required to retain same, in which case the
202
Buyers to have the right to take copies. Other technical documentation which may
203
be in the Sellers' possession shall be promptly forwarded to the Buyers at their expense, if they so
204
request. The Sellers may keep the Vessels log books but the Buyers to have the right to take
205
copies of same at Buyers' account .
 
206

9 .
Encumbrances
207
 
 

 
The Sellers warrant that the Vessel, at the time of delivery, is free from all charters, encumbrances,
208
Mortgages, taxies, levies, duties and maritime liens or other liens or any other debts whatsoever and is not subject to any port state or administrative detentions. The Sellers hereby undertake
209
to indemnify the Buyers against all consequences of claims made against the Vessel which have
210
been incurred prior to the time of delivery or arising out of or with respect to events occurring prior to the time of delivery .
211

10 .
Taxes, etc.
212

Any taxes, fees and expenses in connection with the purchase and registration under the Buyers' flag
213
shall be for the Buyers' account, whereas similar charges in  connection with the closing of the Sellers'
214
register shall be for the Sellers' account.
215

11 .
Condition on delivery
216

The Vessel with everything belonging to her shall be at the Sellers' risk and expense until she is
217
delivered to the Buyers, but subject to the terms and conditions of this Agreement she shall be
218
delivered and taken over "as is where is"   as she was at the time of inspection, fair wear and tear excepted .
219
However, the Vessel shall be delivered free of stowaways, free of cargo and with clean swept holds and with her class maintained without condition/recommendation*,
220
free of average damage affecting the Vessels class, and with her classification certificates and
221
National/international/trading   certificates and Continuous Survey of Machinery (CSM), as well as all other
222
certificates of the Vessel had at the time of   inspection ,
223
clean, valid and unextended for a minimum period of 3 (three)   months from the time of the delivery without condition/recommendation * by Class or the relevant authorities at the time of delivery .
224
" Inspection " in this Clause 11, shall mean the Buyers' inspection according to Clause 4 a) or 4 b), if
225
applicable, or the Buyers' inspection prior to the signing of this Agreement. If the Vessel is taken over
226
without inspection, the date of this Agreement shall be the relevant date.
227

*          Notes, if any, in the surveyor's report  which are accepted by the Classification Society
228
            without condition/recommendation are not to be taken into account.
229

12 .
Name / markings
230

Upon delivery the Buyers undertake to   change the name of the Vessel and alter funnel markings.
231

13 .
Buyers' default
232

Should the deposit not be paid in accordance with Clause 2, the Sellers have the right to cancel  this
233
Agreement, and  they shall be entitled to  claim  compensation for their losses and for all expenses
234
incurred together with interest.
235
Should the Purchase Price not be paid in accordance with Clause 3, the Sellers have the right to
236
cancel the Agreement , in which case the deposit  together  with interest  earned  shall  be released  to  the
237
Sellers.  If the  deposit  does  not  cover  their  loss, but in case of such cancellation the Sellers shall not
238
be entitled to claim further compensation for any losses suffered and/or for any expenses incurred together with interest.
239

14 .
Sellers' default
240

Should the Sellers fail to give NOR in accordance with Clause 5 a) or fail to be ready
241
to validly complete a legal transfer by the date stipulated in line 61 the Buyers shall have
242
the option of cancelling this Agreement provided always that the Sellers shall be granted a
243
maximum of 3 (three) Banking days after the NOR has been given to make arrangements
244
for the documentation set out in Clause 8 and Clause 17. If after NOR has been given but before
245
the Buyers have taken delivery, the Vessel ceases to be physically ready for delivery and is not
246
made physically ready again in every respect by the date stipulated in line 61 and new NOR
247
given, the Buyers shall retain their option to cancel. In  the  event  that  the  Buyers  elect
248
to  cancel this Agreement  the  deposit  together  with  interest earned shall be released to them
249
immediately.
250
Should the Sellers fail to give NOR by the date stipulated in line 61 or fail to be ready
251
to validly complete a legal transfer as aforesaid they shall make due compensation to the Buyers for
252
their loss and for all expenses together with interest if their failure is due to proven
253
negligence and whether or not the Buyers cancel this Agreement.
254


15.      Buyers' representatives
255

After this Agreement has been signed by both parties and  the deposit  has  been  lodged , the Buyers
256
have the right to place two (2) representatives on board the Vessel at their sole risk and expense upon
257
arrival at  ________ on or about _________ immediately.
258
These representatives/crew shall remain on board until delivery of the Vessel to, and acceptance of the Vessel by, the Buyers for the purpose of familiarisation and in the capacity of
259
observers only, and they shall not interfere in any respect with the operation of the Vessel. The
260
Buyers' representatives/crew shall sign the Sellers' letter of indemnity prior to their embarkation.
261
 
262
16 .
Abitration
 
 
a)*              This Agreement (and any non-contractual obligations connected with this Agreement) shall be
governed by and construed in accordance with English law and any dispute arising out of this
263
Agreement and/or any non-contractual obligations connected with this Agreement shall be referred to
264
arbitration in London in accordance with the Arbitration Acts 1996 or any statutory modification or
265
re-enactment thereof for the time being in force, one arbitrator being appointed by each
266
party. The arbitrators shall be full members of the London Maritime Arbitrators Association ("LMAA"). On the receipt by one party of the nomination in writing of the other party's arbitrator,
267
that party shall appoint their arbitrator within fourteen days, failing which the decision of the
268
single arbitrator appointed shall apply. If two arbitrators are properly appointed
269
they shall appoint a third arbitrator failing which the third arbitrator shall be appointed by the President of the LMMA at the time within 21 (twenty one) days of the two arbitrators being appointed.
270

b)*              This  Agreement  shall  be  governed  by  and  construed  in  accordance  with  Title  9  of   the
271
United States Code and the Law of the State of New York  and  should  any  dispute  arise  out  of
272
this Agreement, the matter in dispute shall be referred to three  persons  at  New  York,  one  to
273
be appointed by each  of  the  parties  hereto,  and  the  third  by  the  two  so  chosen;  their
274
decision or that of any two of them shall be final, and for purpose of enforcing any  award,  this
275
Agreement may be made a rule of the Court.
276
The proceedings shall be conducted in accordance  with  the  rules  of  the  Society  of  Maritime
277
Arbitrators, Inc.  New York.
278

c)*              Any dispute arising out of this Agreement shall be referred to arbitration at London in accordance with the Arbitration Act 1996 and subsequent alterations (if any), LLMAA rules to apply
279
, subject to the procedures applicable there.
280
The laws of England shall govern this Agreement.
281

*              16 a), 16 b) and 16 c) are altematives; delete whichever is not applicable.  In the absence of
282
deletions, altemative 16 a) to apply .
283

Additional Clauses 17, 18, 19, 20, 21, 22, 23, 24 and 25, inclusive as herein below, are deemed to
be fully incorporated into and form an integral part of this Agreement.

17. Delivery Documents

A. In exchange of the payment of the Purchase Price and other monies due under Clause 3 of this Agreement, the Sellers shall furnish the Buyers with the following delivery documents, namely:
(a)              Three originals of a legal bill of sale in form recordable in the Buyers' new flag in the English language (the "Bill of Sale") in favour of the Buyers, evidencing the transfer of all (100 percent) of the shares and interest in and title to the Vessel to the Buyers and warranting that the Vessel is free from all mortgages, encumbrances, charters, maritime liens or other liens, claims, taxes, levies, duties and any other debts whatsoever or any port state or administrative detentions, duly executed by the Sellers and duly certified by a notary public and legalized by Apostille.
(b)              Fax or email copy of Transcript of Register issued by the Isle of Man   Registry and dated the delivery date showing the Vessel to be registered in the ownership of the Sellers and free and clean from

encumbrances and mortgages to be faxed to the closing meeting in Greece. The original of such Transcript of Register will be provided to the Buyers not later than 10 (ten) Banking days after the delivery date of the Vessel to the Buyers and the Sellers shall provide a written undertaking to the Buyers to that end.
(c)              A certified true copy of the certificate of incorporation of the Sellers certified by the Sellers' Greek counsel.
(d)              An original set of Minutes of all the members of the Board of Directors of the Sellers or Resolutions of the Sellers adopted by unanimous consent approving, authorizing and confirming the entry into this Agreement and any amendments and/or addendums thereto, authorising the sale of the Vessel in accordance with the provisions of this Agreement and authorizing persons to conclude the sale, transfer and delivery of the Vessel to the Buyers and sign, execute and deliver on behalf of the Sellers, inter alia , the Bill of Sale, a protocol of delivery and acceptance and any other document required to be executed by the Sellers in respect of the delivery of the Vessel from the Sellers to the Buyers thereof pursuant to this Agreement and also authorizing the execution of Power(s) of Attorney to a specific person or persons empowering them to execute and deliver such documents and take such steps as may be necessary or appropriate in order to transfer and deliver the Vessel to the Buyers, such Minutes to be duly certified by a notary public and legalized by Apostille.
(e)              Original written resolutions of the Shareholder(s) , approving the BOD minutes or Resolutions of the Sellers under 17. A. (d) above, duly certified by a notary public and legalized by Apostille.
(f)              An original Power of Attorney of the Sellers executed pursuant to the Minutes or Resolutions referred to in item 17. A. (d) hereinabove duly certified by a notary public and legalized by Apostille.
(g)              An original set of a director's certificate of incumbency of the Sellers certifying the name of all present directors/officers and shareholders of the Sellers and attaching copies of all the correct and complete and up-to-date constitutional documents in full force and effect of the Sellers (Memorandum and Articles of Association) with any amendments .
(h)              An original Certificate of Goodstanding of the Sellers dated no more than 10 (ten) Banking days prior to the delivery date showing the Sellers to be in good standing under the laws of the British Virgin Islands .
(i)              Two original Protocols of Delivery and Acceptance (one for the Sellers and one for the Buyers to be exchanged at the closing in Greece) confirming the delivery of the Vessel by the Sellers to the Buyers.
(j)              Commercial Invoice in three (3) copies dated the delivery date, stating the full particulars of the Vessel and the Purchase Price of the Vessel signed and stamped by the Sellers .
(k)              An original letter of confirmation from the Sellers stating that to the best of their knowledge the Vessel is not blacklisted by Arab Boycott League in Damascus or any other organisation, nation, government, state, country, political sub-division or union as of the delivery date.

(l) (i) A letter of undertaking by the Sellers to effect deletion from the Vessel's Registry forthwith and provide the Buyers with the original Transcript of Closed Register from the Vessel's Registry within 10 (ten) Banking days after delivery of the Vessel and to also provide the Vessel's new flag with a Closed Continuous Synopsis Record issued by the Vessel's Registry within 30 (thirty) running days after delivery of the Vessel; (ii) A copy of the Transcript of Closed Register to be provided to the Buyers on the delivery date; and (iii) a Closed Continuous Synopsis Record from the Vessel's Registry to be issued and delivered to the Vessel's new flag administration as paragraph (o)(i) above within 30 (thirty) running days after the delivery of the Vessel (unless the Buyers waive this item (I) (i) (ii) and (iii) ) .
(m) Original Class Maintenance Certificate issued by the Vessel's present Class and dated not more than 3 (three) Banking days prior to the date of delivery of the Vessel evidencing that the Vessel is class maintained without condition/recommendation.
(n) An original letter of confirmation from the Sellers addressed to the Buyers confirming that the Vessel has not traded with or called in Israel, Cuba, Iran, Syria, North Korea or any other areas sanctioned or boycotted by the European Union and/or the United States of America and/or the United Nations, dated the delivery date. In case however the Vessel has traded in Israel and/or Iran, Sellers to provide an original letter of confirmation addressed to the Buyers confirming the following: i) the Vessel has not traded with or called in Cuba, Syria, North Korea or any other areas sanctioned or boycotted by the European Union and/or the United States of America and/or the United Nations and ii) that if the Vessel has traded Israel and/or Iran, this was with legal cargo for humanitarian purposes, dated the delivery date .
(o) An original letter of confirmation from the Sellers addressed to the Buyers confirming that the Vessel is entitled to trade worldwide within Institute Warranty Limits without restriction or limitation.
(p) An original letter of confirmation from the Sellers that to the best of their knowledge the Vessel has not touched bottom or suffered any underwater damage from her last drydock up to the date of her delivery.

(q)   One original letter from the Sellers confirming that any outstanding radio accounts shall be settled by the Sellers as soon as practically possible after the Vessel's delivery with no liability regarding the same to be incurred against the Buyers.

(r) Recent AGM free certificate from authorized company, if available.

(s) Most recent original Certificate for Chinese Tonnage Tax dues at no cost, if available .

(t) Any such additional documents as may be reasonably required by the Buyers' flag authorities for the purpose of transferring title and registering the Vessel, provided that the Buyers notify the Sellers of any such documents as soon as possible and in no event later than 7 (seven) days prior to the expected delivery of the Vessel.


B. In exchange of delivery of the Vessel, the Buyers shall furnish the Sellers with the following delivery documents, namely:
(a) Copy of the Certificate of Incorporation of the Buyers, certified as true by the Buyers' Greek Legal Counsel.
(b) Original Good Standing Certificate of the Buyers dated no more than 7 (seven) Banking prior to the delivery date showing the Buyers to be in good standing under the laws of the Marshall Islands .
(c) An original set of resolutions or minutes of the Board of Directors of the Buyers authorising the purchase of the Vessel in accordance with the provisions of this Agreement, the ratification of this Agreement signed and the execution on behalf of the Buyers of (inter alia) the acceptance of the Bill of Sale (if applicable), a protocol of delivery and acceptance and any other document required to be executed by the Buyers in respect of the delivery of the Vessel from the Sellers to the Buyers pursuant to this Agreement, and authorising further execution of a Power of Attorney authorising the execution any and all other documents and undertakings provided in this Agreement such resolutions to be duly legalised by Apostille.
(d) An original set of an officer's certificate of incumbency of the Buyers certifying the names of all present directors/officers of the Buyers and attaching copies of all correct and complete constitutional documents in full force and effect of the Buyers (Copies of the Articles of Incorporation and By-Laws (together with any amendment thereto up to and including the delivery date)).
(e) An original Power of Attorney of the Buyers issued in accordance with the resolutions referred to under 17. B. (c) above authorising the persons signing the documents on their behalf such power of attorney to be duly legalised by Apostille .
(f) Original written resolutions of the Buyers' Shareholder, approving the BOD minutes under 17. B. (c), such resolutions to be duly legalised by Apostille.
The parties undertake to exchange drafts of the above documents and agree final formats latest 7 (seven) Banking days prior to the delivery date of the Vessel.
18. DRYDOCKING

NO DRYDOCKING CLAUSE TO APPLY AND CLAUSE 6 OF SALESFORM 1993 IS DELETED.

HOWEVER, PROMPTLY BEFORE OR AFTER THE VESSEL'S ARRIVAL AT THE DELIVERY PORT AND PRIOR TO THE VESSEL'S DELIVERY THE BUYERS HAVE THE RIGHT TO CARRY OUT AN INSPECTION OF THE VESSEL'S UNDERWATER (BELOW SUMMER LOADLINE) PARTS BY CLASS APPROVED DIVERS WITH VIDEO LINK TO THE ATTENDING CLASS SURVEYOR, SUCH DIVERS INSPECTION TO BE AT BUYERS' RISK AND EXPENSE.


BUYERS TO ADVISE SELLERS FIVE (5) DAYS PRIOR TO DELIVERY IF THEY INTEND TO CARRY OUT UNDERWATER INSPECTION. IF THE DECLARED BY SELLERS DELIVERY PORT IS NOT FEASIBLE FOR AN UNDERWATER INSPECTION, BUYERS SHALL PROMPTLY ADVISE SELLERS OF AN ALTERNATIVE PLACE NEAR TO THE DELIVERY PORT, TO BE MUTUALLY AGREED, WHERE SELLERS ARE TO MAKE THE VESSEL AVAILABLE, AT SELLERS' COST (EXCEPT FOR THE BUNKERS' COST WHICH SHALL BE BORNE EQUALLY BETWEEN THE SELLERS AND THE BUYERS), FOR SUCH AN INSPECTION. THE EXTENT OF THE INSPECTION AND CONDITIONS UNDER WHICH IT IS PERFORMED SHALL BE TO THE SATISFACTION OF THE CLASSIFICATION SOCIETY.

THE DIVERS INSPECTION TO BE CARRIED OUT IN A MANNER AND UNDER CONDITIONS CONSIDERED SUITABLE BY THE ATTENDING CLASS SURVEYOR FOR SUCH UNDERWATER INSPECTION. ATTENDANCE ARRANGEMENTS AND FEES FOR THE ATTENDING CLASS SURVEYOR SHALL BE FOR THE BUYERS' ACCOUNT AND THE COST OF THE DIVERS FOR THE BUYERS' ACCOUNT.

A) IF ANY DAMAGE IS FOUND TO THE VESSELS UNDERWATER PARTS WHICH LEADS TO IMPOSING RECOMMENDATION(S) AGAINST THE VESSEL, AND REQUIRES SAME TO BE REPAIRED PRIOR TO THE VESSEL'S NEXT DUE DRYDOCKING DATE, THEN THE SELLERS SHALL REPAIR SUCH DAMAGE TO THE SATISFACTION OF CLASSIFICATION SOCIETY AT THE SELLERS' TIME AND EXPENSE, PRIOR TO THE VESSEL'S DELIVERY TO THE BUYERS. SHOULD THE VESSEL BE REQUIRED TO DRYDOCK TO EFFECT SUCH REPAIRS TO CLASS SATISFACTION, THEN THE BUYERS SHALL HAVE THE RIGHT TO SCRAPE/PAINT THE VESSEL'S UNDERWATER PARTS AT THE BUYERS' RISK & EXPENSE WHILST THE VESSELS IS IN DRYDOCK. ALL COSTS AND MATERIALS ASSOCIATED WITH THE BUYERS' WORKS AND ANY EXTRA DRYDOCKING TIME REQUIRED FOR THE BUYERS TO CARRY OUT/COMPLETE THEIR WORKS SHALL BE FOR THE BUYERS' ACCOUNT. SUCH BUYERS' WORKS SHALL NOT INTERFERE WITH THE SELLERS' WORKS AND NOT TO DELAY THE DELIVERY OF THE VESSEL. IN THE EVENT THAT THE SELLERS HAVE COMPLETED THEIR WORKS IN THE DRYDOCK TO THE SATISFACTION OF CLASS AND THE BUYERS WORKS ARE NOT YET COMPLETED, THEN THE SELLERS HAVE THE RIGHT TO TENDER NOR FOR DELIVERY TO THE BUYERS WHILST THE VESSEL IS IN DRYDOCK. IN THE EVENT OF THE VESSEL BEING REQUIRED TO DRYDOCK FOR REPAIRS AND THERE ARE NO SUITABLE DRYDOCKING FACILITIES AVAILABLE AT THE DELIVERY PORT, THEN THE SELLERS SHALL TAKE THE VESSEL IN BALLAST TO THE NEAREST PORT/PLACE WHERE SUITABLE DRYDOCKING FACILITIES ARE AVAILABLE, AND A NEW DELIVERY PORT TO BE AGREED BETWEEN THE PARTIES. IT IS HEREBY MUTUALLY AGREED BY THE SELLERS AND THE BUYERS, THAT IN THE EVENT OF DAMAGE AFFECTING CLASS BEING FOUND DURING THE DIVERS INSPECTIONS AS MENTIONED ABOVE, THEN THE AGREED CANCELLING DATE SHALL AUTOMATICALLY BE EXTENDED BY THE ADDITIONAL TIME REQUIRED FOR THE DRYDOCKING, REPAIRS AND EXTRA STEAMING, BUT LIMITED TO A MAXIMUM OF FOURTEEN (14) RUNNING DAYS. CLASS ATTENDANCE FEES AND DIVERS COSTS TO BE FOR SELLERS' ACCOUNT.


B) IF ANY DAMAGE(S) TO THE VESSEL'S UNDERWATER PARTS   IS FOUND WHICH LEADS TO CLASS IMPOSING A RECOMMENDATION(S) AGAINST THE VESSEL BUT AGREE TO POSTPONE PERMANENT REPAIRS TO SAME UNTIL THE VESSEL'S NEXT DUE DRYDOCKING DATE THEN, IN LIEU OF THE SELLERS REPAIRING SUCH DAMAGE(S), THE SELLERS TO COMPENSATE THE BUYERS BY WAY OF PAYMENT IN CASH TO THE BUYERS NOMINATED ACCOUNT AND THE BUYERS SHALL TAKE DELIVERY OF THE VESSEL AS SHE IS WITH SUCH RECOMMENDATION(S) OUTSTANDING. THE SELLERS AND THE BUYERS SHALL EACH OBTAIN A QUOTATION FOR THE REPAIR OF SUCH DAMAGE FROM TWO (2) SEPARATE REPUTABLE SHIP REPAIR YARDS IN THE AREA, AND THE COMPENSATION AMOUNT TO THE BUYERS SHALL BE THE AVERAGE OF THE TWO (2) REPAIR QUOTATIONS RECEIVED BY THE BUYERS AND SELLERS RESPECTIVELY AS MENTIONED ABOVE. CLASS ATTENDANCE FEES AND DIVERS COSTS TO BE FOR SELLERS' ACCOUNT.

19. P AND C
The terms and conditions of the sale to be kept strictly private and confidential by all parties involved, save as required otherwise by the Securities and Exchange Commission or US stock listed exchange rules applicable to the Buyers.
20. Notices
Any and all notices and communication in connection with this Agreement shall be in English in writing and shall be sent as follows:

(a)
if to the Sellers at:
Attention: Asteria Bagouli
Telephone: +302108910288
Fax: +302108910295
E-mail: legal@ensh.com
or such other address as the Sellers may notify the Buyers.

(b)
If to the Buyers at:
Attention: Stamatios Tsantanis
Telephone: +30 213 0181 507
Fax: +30 210 9638404
E-mail: snt@seanergy.gr  
or such other address as the Buyers may notify the Sellers
21. Performance Guarantee
Seanergy Maritime Holdings Corp., of the Marshall Islands ("Seanergy") guarantees the performance by the Buyer of all of its obligations under this Agreement.
22. Contracts (Rights of Third Parties) Act 1999
Nothing contained in this Agreement confers or purports to confer on any third party any benefit or any right to enforce any term hereof pursuant to the Contracts (Rights of Third Parties) Act 1999.
23.  Purchase Agreement & this Agreement
This Agreement is one of the "MOAs" referred to and defined in the Purchase Agreement. If there is any inconsistency between the terms and conditions of this Agreement and the terms and conditions of said Purchase Agreement, then the terms and conditions of the Purchase Agreement shall prevail.

24. Condition Precedent to this Agreement
The obligations of the Buyer and Seanergy's performance guarantee under Clause 21 to consummate the transactions contemplated by this Agreement and take delivery of the Vessel shall be subject to the fulfillment, at or prior to the delivery date of the Vessel, of the following condition:
The Buyer shall have secured financing for the acquisition of the Vessel.
In the event that the above condition is not fulfilled at or prior to the delivery date of the Vessel, this Agreement shall forthwith become void and null and there shall be no liability on the part of any party hereto and Seanergy except that nothing herein shall relieve any party hereto from liability for any willful breach of any provision hereof.
25. Entire Agreement
The written terms of this Agreement comprise the entire agreement between the Buyers and the Sellers in relation to the sale and purchase of the Vessel.

For the Sellers
 
For the Buyers
     
     
/s/ Nikolaos Sakalaridis
 
/s/ Stamatios Tsantanis
Name: Nikolaos Sakalaridis
 
Name: Stamatios Tsantanis
Title: Authorized Director
 
Title: Authorized Director
     
     

Exhibit 12.1

CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER

I, Stamatios Tsantanis , certify that:

1. I have reviewed this annual report on Form 20-F of Seanergy Maritime Holdings Corp.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4. The company's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the company's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company's internal control over financial reporting; and

5. The company's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company's auditors and the audit committee of the company's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the company's internal control over financial reporting.

Date: April 20, 2016

/s/ Stamatios Tsantanis
Stamatios Tsantanis
Chief Executive Officer (Principal Executive Officer)


Exhibit 12.2

CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICER

I, Stamatios Tsantanis , certify that:

1. I have reviewed this annual report on Form 20-F of Seanergy Maritime Holdings Corp.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4. The company's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the company's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company's internal control over financial reporting; and

5. The company's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company's auditors and the audit committee of the company's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the company's internal control over financial reporting.

Date: April 20, 2016

/s/ Stamatios Tsantanis
Stamatios Tsantanis
Chief Financial Officer (Principal Financial Officer)


Exhibit 13.1

PRINCIPAL EXECUTIVE OFFICER CERTIFICATION
PURSUANT TO 18 U.S.C. SECTION 1350


In connection with this Annual Report of Seanergy Maritime Holdings Corp. (the "Company") on Form 20-F for the year ended December 31, 2015, as filed with the Securities and Exchange Commission (the "SEC") on or about the date hereof (the "Report"), I, Stamatios Tsantanis, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the SEC or its staff upon request.

Date: April 20, 2016


/s/ Stamatios Tsantanis
Stamatios Tsantanis
Chief Executive Officer (Principal Executive Officer)



Exhibit 13.2

PRINCIPAL FINANCIAL OFFICER CERTIFICATION
PURSUANT TO 18 U.S.C. SECTION 1350


In connection with this Annual Report of Seanergy Maritime Holdings Corp. (the "Company") on Form 20-F for the year ended December 31, 2015, as filed with the Securities and Exchange Commission (the "SEC") on or about the date hereof (the "Report"), I, Stamatios Tsantanis, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the SEC or its staff upon request.

Date: April 20, 2016



/s/ Stamatios Tsantanis
Stamatios Tsantanis
Chief Financial Officer (Principal Financial Officer)






 
 
Exhibit 15.1
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in the following Registration Statements:
• Registration Statement (Form F-3 No. 333-166697, as amended) of Seanergy Maritime Holdings Corp.
• Registration Statement (Form F-3 No. 333-169813, as amended) of Seanergy Maritime Holdings Corp., and
• Registration Statement (Form F-3 No. 333-205301, as amended) of Seanergy Maritime Holdings Corp.
of our report dated April 20 , 2016, with respect to the consolidated financial statements and schedule of Seanergy Maritime Holdings Corp. included in this Annual Report (Form 20-F) for the year ended December 31, 2015.
/s/ Ernst & Young (Hellas) Certified Auditors-Accountants S.A.
April 20, 2016
Athens, Greece