UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 20-F
(Mark One)

[_]
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE
SECURITIES EXCHANGE ACT OF 1934
 
     
 
OR
 
     
[X]
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 
     
 
For the fiscal year ended December 31, 2018
 
     
 
OR
 
     
[_]
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 
     
 
OR
 
     
[_]
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 
     
 
Date of event requiring this shell company report: Not applicable
 
     
 
For the transition period from _______ to _______
 
     
 
Commission file number: 001-34848
 
     
     
 
SEANERGY MARITIME HOLDINGS CORP.
 
 
(Exact name of Registrant as specified in its charter)
 
     
     
 
(Translation of Registrant's name into English)
 
     
     
 
Republic of the Marshall Islands
 
 
(Jurisdiction of incorporation or organization)
 
     
     
 
154 Vouliagmenis Avenue, 166 74 Glyfada, Athens, Greece
 
 
(Address of principal executive offices)
 
     
     
 
Stamatios Tsantanis, Chairman & Chief Executive Officer
Seanergy Maritime Holdings Corp.
154 Vouliagmenis Avenue, 166 74 Glyfada, Athens, Greece
Telephone: +30 213 0181507, Fax: +30 210 9638404
 
 
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
 
     

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

Title of class
Name of exchange on which registered
Shares of common stock, par value $0.0001 per share
Nasdaq Capital Market
Class A Warrants
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, 2018, there were 2,666,223 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 every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). [X] Yes [_] No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company.  See the definitions of "large accelerated filer", "accelerated filer" and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer [_]
Accelerated filer [_]
Non-accelerated filer [X]
 
 
Emerging growth company [_]
 
 
 
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. [_]
† The term "new or revised financial accounting standard" refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.


Indicate by check mark 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
PART I
 
1
ITEM 1.
IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
1
ITEM 2.
OFFER STATISTICS AND EXPECTED TIMETABLE
1
ITEM 3.
KEY INFORMATION
1
ITEM 4.
INFORMATION ON THE COMPANY
27
ITEM 4A.
UNRESOLVED STAFF COMMENTS
46
ITEM 5.
OPERATING AND FINANCIAL REVIEW AND PROSPECTS
46
ITEM 6.
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
68
ITEM 7.
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
72
ITEM 8.
FINANCIAL INFORMATION
75
ITEM 9.
THE OFFER AND LISTING
76
ITEM 10.
ADDITIONAL INFORMATION
76
ITEM 11.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
87
ITEM 12.
DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
87
PART II
 
87
ITEM 13.
DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
87
ITEM 14.
MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OR PROCEEDS
87
ITEM 15.
CONTROLS AND PROCEDURES
88
ITEM 16.
[RESERVED]
89
ITEM 16A.
AUDIT COMMITTEE FINANCIAL EXPERT
89
ITEM 16B.
CODE OF ETHICS
89
ITEM 16C.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
89
ITEM 16D.
EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
90
ITEM 16E.
PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
90
ITEM 16F.
CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT
90
ITEM 16G.
CORPORATE GOVERNANCE
90
ITEM 16H.
MINE SAFETY DISCLOSURE
90
PART III
 
91
ITEM 17.
FINANCIAL STATEMENTS
91
ITEM 18.
FINANCIAL STATEMENTS
91
ITEM 18.1
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF SEANERGY MARITIME HOLDINGS CORP. (PARENT COMPANY ONLY)
91
ITEM 19.
EXHIBITS
91



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

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

·
changes in seaborne and other transportation patterns;

·
changes in the supply of or demand for drybulk commodities, including drybulk commodities carried by sea, generally or in particular regions;

·
changes in the number of newbuildings under construction in the drybulk shipping industry;

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

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

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

·
our ability to achieve successful utilization of our expanded fleet;

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

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



·
changes in our ability to leverage the relationships and reputation in the drybulk shipping industry of V.Ships Limited, or V.Ships, our technical manager, and Fidelity Marine Inc., or Fidelity, our commercial manager;

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

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

·
loss of our customers, charters or vessels;

·
damage to our vessels;

·
potential liability from future litigation and incidents involving our vessels;

·
our future operating or financial results;

·
acts of terrorism and other hostilities;

·
changes in global and regional economic and political conditions;

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

·
our ability to continue as a going concern; and

·
other factors discussed in "Item 3. Key Information—D. Risk Factors".
Should one or more of the foregoing risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward looking statements.  Consequently, there can be no assurance that actual results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences to, or effects, on us. Given these uncertainties, prospective investors are cautioned not to place undue reliance on such forward-looking statements.
We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable laws.  If one or more forward-looking statements are updated, no inference should be drawn that additional updates will be made with respect to those or other forward-looking statements.

PART I
Unless the context otherwise requires, as used in this annual report, the terms "Company", "Seanergy", "we", "us", and "our" refer to Seanergy Maritime Holdings Corp. and any or all of its subsidiaries, and "Seanergy Maritime Holdings Corp". refers only to Seanergy Maritime Holdings Corp. and not to its subsidiaries. References in this annual report to "Seanergy Maritime" refer to our predecessor, Seanergy Maritime Corp.
We use the term deadweight tons, or "dwt", in describing the size of vessels. Dwt, expressed in metric tons, each of which is equivalent to 1,000 kilograms, refers to the maximum weight of cargo and supplies that a vessel can carry.  Unless otherwise indicated, all references to "U.S. dollars", "dollars", "U.S. $" and "$" in this annual report are to the lawful currency of the United States of America.  References in this annual report to our common shares are adjusted to reflect the consolidation of our common shares through reverse stock splits, including the one-for-fifteen reverse stock split, which became effective as of June 24, 2011, the one-for-five reverse stock split, which became effective as of January 8, 2016 and the one-for-fifteen reverse stock split, which became effective as of March 20, 2019.
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, 2018, 2017, 2016, 2015 and 2014 are derived from our audited consolidated financial statements and notes thereto which have been prepared in accordance with U.S. generally accepted accounting principles, or U.S. GAAP.  The following data should be read in conjunction with "Item 5. Operating and Financial Review and Prospects" and the consolidated financial statements and related notes included elsewhere in this annual report.
(Amounts in the tables below are in thousands of U.S. dollars, except for share and per share data.)

 
 
Year Ended December 31,
 
 
 
2018
   
2017
   
2016
   
2015
   
2014
 
Statement of Income Data:
                             
Vessel revenue, net
   
91,520
     
74,834
     
34,662
     
11,223
     
2,010
 
Voyage expenses
   
(40,184
)
   
(34,949
)
   
(21,008
)
   
(7,496
)
   
(1,274
)
Vessel operating expenses
   
(20,742
)
   
(19,598
)
   
(14,251
)
   
(5,639
)
   
(1,006
)
Voyage expenses - related party
   
-
     
-
     
-
     
-
     
(24
)
Management fees - related party
   
-
     
-
     
-
     
-
     
(122
)
Management fees
   
(1,042
)
   
(1,016
)
   
(895
)
   
(336
)
   
-
 
General and administration expenses
   
(6,500
)
   
(5,081
)
   
(4,134
)
   
(2,804
)
   
(2,987
)
General and administration expenses - related party
   
-
     
-
     
-
     
(70
)
   
(309
)
Loss on bad debts
   
-
     
-
     
-
     
(30
)
   
(38
)
Amortization of deferred dry-docking costs
   
(634
)
   
(870
)
   
(556
)
   
(38
)
   
-
 
Depreciation
   
(10,876
)
   
(10,518
)
   
(8,531
)
   
(1,865
)
   
(3
)
Impairment loss
   
(7,267
)
   
-
     
-
     
-
     
-
 
Gain on restructuring
   
-
     
-
     
-
     
-
     
85,563
 
Operating income / (loss)
   
4,275
     
2,802
     
(14,713
)
   
(7,055
)
   
81,810
 
Interest and finance costs
   
(16,415
)
   
(12,277
)
   
(7,235
)
   
(1,460
)
   
(1,463
)
Interest and finance costs - related party
   
(8,881
)
   
(5,122
)
   
(2,616
)
   
(399
)
   
-
 
Gain on debt refinancing
   
-
     
11,392
     
-
     
-
     
-
 
Interest  and other income
   
83
     
47
     
20
     
-
     
14
 
Foreign currency exchange losses, net
   
(104
)
   
(77
)
   
(45
)
   
(42
)
   
(13
)
Total other expenses, net
   
(25,317
)
   
(6,037
)
   
(9,876
)
   
(1,901
)
   
(1,462
)
Net (loss) / income before taxes
   
(21,042
)
   
(3,235
)
   
(24,589
)
   
(8,956
)
   
80,348
 
Income taxes
   
(16
)
   
-
     
(34
)
   
-
     
-
 
Net (loss) / income
   
(21,058
)
   
(3,235
)
   
(24,623
)
   
(8,956
)
   
80,348
 
Net (loss) / income per common share
                                       
Basic
   
(8.40
)
   
(1.35
)
   
(17.97
)
   
(12.47
)
   
450.90
 
Weighted average common shares outstanding
                                       
Basic
   
2,507,087
     
2,389,7 19
     
1,370,200
     
718,226
     
178,196
 
 
                                       



1





 
 
As of December 31,
 
 
 
2018
   
2017
   
2016
   
2015
   
2014
 
Balance Sheet Data:
                             
Total current assets
   
16,883
     
19,498
     
22,329
     
8,278
     
3,207
 
Vessels, net
   
243,214
     
254,730
     
232,109
     
199,840
     
-
 
Total assets
   
267,562
     
275,705
     
257,534
     
209,352
     
3,268
 
Total current liabilities, including current portion of long-term debt and other financial liabilities
   
36,263
     
34,460
     
21,230
     
9,250
     
592
 
Total liabilities
   
246,259
     
234,392
     
226,702
     
186,068
     
-
 
Common stock
   
-
     
-
     
-
     
-
     
-
 
Total equity
   
21,303
     
41,313
     
30,832
     
23,284
     
2,676
 
Shares issued and outstanding as at December 31,
   
2,666,223
     
2,465,289
     
2,271,480
     
1,301,494
     
265,190
 


 
Year Ended December 31,
 
 
2018
 
2017
 
2016
 
2015
 
2014
 
Cash Flow Data:
                   
Net cash provided by (used in) operating activities
   
5,723
     
2,782
     
(15,339
)
   
(4,737
)
   
(14,858
)
Net cash (used in) provided by investing activities
   
(8,827
)
   
(32,992
)
   
(40,779
)
   
(201,684
)
   
105,895
 
Net cash (used in) provided by financing activities
   
(491
)
   
25,341
     
68,672
     
206,902
     
(91,239
)



B.   Capitalization and Indebtedness
Not applicable.
C.   Reasons for the Offer and Use of Proceeds
Not applicable.
D.   Risk Factors
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.
2


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 industry;

·
types and sizes of vessels;

·
supply and demand for vessels;

·
other modes of transportation;

·
cost of newbuildings;

·
governmental and other regulations; and

·
technological advances.
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 our 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 – Loan Arrangements – 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 one or more of our vessels at a time when vessel prices have fallen, the sale price may be less than the vessel’s carrying value on our consolidated financial statements, resulting in a loss on sale or an impairment loss being recognized, leading to a reduction in earnings.
3


Charter hire rates for drybulk vessels are volatile and have declined significantly since their historic highs and may remain at low levels or decrease in the future, which may adversely affect our earnings, revenue and profitability and our ability to comply with our loan covenants.
The dramatic downturn in recent years in the drybulk charter market, from which we derive 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 2018, the BDI ranged from a low of 948 on April 6, 2018, to a high of 1,774 on July 24, 2018, and during 2019 up to February 21, 2019, the BDI has ranged from a low of 595 on February 11, 2019 to a high of 1,282 on January 2, 2019.
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 remain at depressed levels and may decline further. These circumstances have had a number of adverse consequences from time to time 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 vessel owners.
The degree of charter hire rate volatility among different types of drybulk vessels has varied widely. If we enter into a charter when charter hire rates are low, our revenues and earnings will be adversely affected and we may not be able to successfully charter our vessels at rates sufficient to allow us to operate our business profitably or meet our obligations. Further, if low charter rates in the 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.
We are mostly dependent on spot charters and any decrease in spot charter rates in the future may adversely affect our earnings.
We currently operate the majority 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 may 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.
4


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. 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 for 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 to meet our other 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.
An over-supply of drybulk vessel capacity may prolong or further depress the current low charter rates and, in turn, adversely affect our profitability.
The market supply of drybulk vessels had increased due to the high level of new deliveries in the last years. Drybulk newbuildings were delivered in significant numbers starting at the beginning of 2006 and continued to be delivered in significant numbers through 2017. In addition, the drybulk newbuilding orderbook, which extends to 2019, equaled approximately 11.2% of the existing world drybulk fleet as of March 15, 2019, according to Clarksons Research, and the orderbook may increase further in proportion to the existing fleet. An over-supply of drybulk vessel capacity could prolong the period during which low charter rates prevail. 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 drybulk vessel capacity increases but the demand for vessel capacity does not increase or increases at a slower rate, charter rates could materially decline, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.
If economic conditions throughout the world decline, it will negatively impact our results of operations, financial condition and cash flows, and could cause the market price of our common shares to decline.
The world economy is facing a number of actual and potential challenges, including current political instability in the Middle East and the South China Sea region and other geographic countries and areas, geopolitical events such as the withdrawal of the U.K. from the European Union, or "Brexit", terrorist or other attacks, and war (or threatened war) or international hostilities, such as those between the United States and North Korea. Such events may contribute to economic instability in global financial markets or cause a decrease in worldwide demand for certain goods and, thus, shipping. We cannot predict how long current market conditions will last.
5


The European Union, or EU, 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 European member countries’ ability to refinance their sovereign debt, including Greece. 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, the recent economic slowdown in the Asia Pacific region, particularly in China, may exacerbate the effect of the weak economic trends in the rest of the world. Before the global economic financial crisis that began in 2008, China had one of the world's fastest growing economies in terms of gross domestic product, or GDP, which had a significant impact on shipping demand. The quarterly year-over-year growth rate of China's GDP was approximately 6.4% for the year ended December 31, 2018, decreasing from 6.9% in 2017 and continuing 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 EU 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 or geographic regions.
Furthermore, governments may turn to trade barriers to protect their domestic industries against foreign imports, thereby depressing shipping demand. In particular, as indicated, the United States is seeking to implement more protective trade measures. The current U.S. President was elected on a platform promoting trade protectionism. The outcome of the 2016 presidential election have thus created significant uncertainty about the future relationship between the United States and China and other exporting countries with respect to trade policies, treaties, government regulations and tariffs. On January 23, 2017, the U.S. President signed an executive order withdrawing the United States from the Trans-Pacific Partnership, a global trade agreement intended to include the United States, Canada, Mexico, Peru and a number of Asian countries. In March 2018, the U.S. President announced tariffs on imported steel and aluminum into the United States that could have a negative impact on international trade generally. Most recently, in January 2019, the United States announced sanctions against Venezuela, which may have an effect on its oil output and in turn affect global oil supply. Protectionist developments, or the perception that they may occur, may have a material adverse effect on global economic conditions, and may significantly reduce global trade. Moreover, increasing trade protectionism may cause an increase in (i) the cost of goods exported from regions globally, particularly the Asia-Pacific region, (ii) the length of time required to transport goods and (iii) the risks associated with exporting goods. Such increases may further reduce the quantity of goods to be shipped, shipping time schedules, voyage costs and other associated costs, which could have an adverse impact on our charterers’ business, operating results and financial condition and could thereby affect their ability to make timely charter hire payments to us and to renew and increase the number of their time charters with us. This could have a material adverse effect on our business, results of operations, financial condition and cash flows.
We face risks attendant to the trends in the global economy, such as changes in interest rates, instability in the banking and securities markets around the world, the risk of sovereign defaults, reduced levels of growth, and trade protectionism, 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 depressed 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 may also be unable to complete vessel acquisitions, take advantage of business opportunities or respond to competitive pressures.
6


Risks associated with operating ocean-going vessels could affect our business and reputation, which could adversely affect our revenues and expenses.
The operation of an ocean-going vessel carries inherent risks.  These risks include the possibility of:

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crew strikes and/or boycotts;

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marine disaster;

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piracy;

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environmental accidents;

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cargo and property losses or damage; and

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business interruptions caused by mechanical failure, 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 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. Furthermore, fuel may become much more expensive in the future, including as a result of the imposition of sulfur oxide emissions limits in 2020 under new regulations adopted by the International Maritime Organization, or the IMO, which may reduce the profitability and competitiveness of our business versus other forms of transportation, such as truck or rail.
Upon redelivery of vessels at the end of a period of 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.
The majority of 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, and, therefore, an increase in the price of fuel may affect in a negative way our profitability and our cash flows.
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 shipping market is typically stronger in the fall and winter months in anticipation of increased consumption of coal and other raw materials in the northern hemisphere during the winter months. In addition, unpredictable weather patterns in these months tend to disrupt vessel schedules and supplies of certain commodities. As a result, our revenues may be weaker during the fiscal quarters ending 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 because the majority of our vessels are employed in the spot market, seasonality may materially affect our operating results and our ability to pay dividends, if any, in the future.
7


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 result in fines or other penalties imposed on us and may adversely affect our reputation and the market price of our common stock.
During the year ended December 31, 2018, 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; 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.
We believe that we are currently in compliance with all applicable sanctions and embargo laws and regulations.  In order to maintain compliance, we monitor and review the movement of our vessels on a daily basis. 
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 or Sudan or any entities controlled by the governments of these countries, including any entities organized in these countries.
Due to the nature of our business and the evolving nature of the foregoing sanctions and embargo laws and regulations, there can be no assurance that we will be in compliance at all times in the future, particularly as the scope of certain laws may be unclear and may be subject to changing interpretations.  Any such violation could result in fines, penalties or other sanctions that could severely impact our ability to access U.S. capital markets and conduct our business, and could result in some investors deciding, or being required, to divest their interest, or refrain from investing, in us.  In addition, certain institutional investors may have investment policies or restrictions that prevent them from holding securities of companies that have contracts with countries identified by the U.S. government as state sponsors of terrorism.  The determination by these investors not to invest in, or to divest from, our common 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. 
Sulfur regulations to reduce air pollution from ships are likely to require retrofitting of vessels and may cause us to incur significant costs.
In October 2016, the IMO set January 1, 2020 as the implementation date for vessels to comply with its low sulfur fuel oil requirement, which cuts sulfur levels from the current level of 3.5% to 0.5%. The interpretation of "fuel oil used on board" includes use in main engine, auxiliary engines and boilers. Shipowners may comply with this regulation by (i) using 0.5% sulfur fuels on board, which is likely to be available around the world by 2020 but likely at a higher cost; (ii) installing scrubbers for cleaning of the exhaust gas; or (iii) retrofitting vessels to be powered by liquefied natural gas (LNG), which may not be a viable option due to the lack of supply network and high costs involved in this process. In anticipation of the 2020 implementation, we have agreed to install scrubbers on 50% of our current fleet in cooperation with first-class time charterers who will employ the vessels on period charters. As part of these agreements, the charterers will cover the installation costs. Furthermore, we plan to make necessary preparations for the remaining 50% of our fleet to burn low sulfur fuel (0.5% or 0.1%). We have further commenced developing ship specific implementation plans for safeguarding the smooth transaction with the usage of compliance fuels for such vessels that will not be equipped with scrubbers. Costs of compliance with these regulatory changes may be significant and may have a material adverse effect on our future performance, results of operations, cash flows and financial position. See Item 4. "Information on the Company—B. Business Overview— Environmental and Other Regulations—The International Maritime Organization".
8


We are subject to regulation and liability under environmental laws that could require significant expenditures and affect our cash flows and net income.
Our business and the operation of our vessels are materially affected by government regulation in the form of international conventions, national, state and local laws and regulations in force in the jurisdictions in which the vessels operate, as well as in the country or countries of their registration, including those governing oil spills, discharges to air and water, ballast water management, and the handling and disposal of hazardous substances and wastes.  These requirements include, but are not limited to, EU regulations, the U.S. Oil Pollution Act of 1990, or OPA, the U.S. Comprehensive Environmental Response, Compensation and Liability Act of 1980, or CERCLA, the U.S. Clean Air Act, including its amendments of 1977 and 1990, or the CAA, the U.S. Clean Water Act, or the CWA, the U.S. Maritime Transportation Security Act of 2002, or the MTSA, and regulations of the IMO, including, but not limited to, the International Convention on Civil Liability for Oil Pollution Damage of 1969, as from time to time amended and generally referred to as CLC, the IMO International Convention for the Prevention of Pollution from Ships of 1973, as from time to time amended and generally referred to as MARPOL, including the designation of emission control areas, or ECAs, thereunder, the IMO International Convention for the Safety of Life at Sea of 1974, as from time to time amended and generally referred to as SOLAS, the IMO International Convention on Load Lines of 1966, as from time to time amended and generally referred to as the LL Convention, the International Convention on Civil Liability for Bunker Oil Pollution Damage, generally referred to as the Bunker Convention, the IMO's International Management Code for the Safe Operation of Ships and for Pollution Prevention, generally referred to as the ISM Code, the International Convention for the Control and Management of Ships' Ballast Water and Sediments, generally referred to as the BWM Convention, and the International Ship and Port Facility Security Code, or ISPS.  We may also incur additional costs in order to comply with other existing and future regulatory obligations, including, but not limited to, costs relating to the 0.5% sulfur cap on marine fuels, air emissions including greenhouse gases, the management of ballast water, maintenance and inspection, development and implementation of emergency procedures and insurance coverage or other financial assurance of our ability to address pollution incidents. These costs could have a material adverse effect on our business, results of operations, cash flows and financial condition and our available cash.  Because such conventions, laws and regulations are often revised, we cannot predict the ultimate cost of complying with such conventions, laws and regulations or the impact thereof on the resale price or useful life of vessels we may acquire in the future.  Additional conventions, laws and regulations may be adopted which could limit our ability to do business or increase the cost of our doing business and which may materially adversely affect our operations.
Regulations relating to ballast water discharge coming into effect during September 2019 may adversely affect our revenues and profitability.
The IMO has imposed updated guidelines for ballast water management systems specifying the maximum amount of viable organisms allowed to be discharged from a vessel’s ballast water.  Depending on the date of the IOPP renewal survey, existing vessels constructed before September 8, 2017 must comply with the updated D-2 standard on or after September 8, 2019.  For most vessels, compliance with the D-2 standard will involve installing on-board systems to treat ballast water and eliminate unwanted organisms.  Ships constructed on or after September 8, 2017 are to comply with the D-2 standards on or after September 8, 2017.  Currently none of our vessels comply with the updated guideline and costs of compliance may be substantial and adversely affect our revenues and profitability. In anticipation of the September 2019 implementation, we have entered into a commercial agreement for the installation of ballast water treatment systems in eight of our vessels.
Furthermore, United States regulations are currently changing.  Although the 2013 Vessel General Permit, or VGP, program and U.S. National Invasive Species Act, or NISA, are currently in effect to regulate ballast discharge, exchange and installation, the Vessel Incidental Discharge Act, or VIDA, which was signed into law on December 4, 2018, requires that the U.S. Coast Guard develop implementation, compliance, and enforcement regulations regarding ballast water within two years.  The new regulations could require the installation of new equipment, which may cause us to incur substantial costs. 
9


Increased inspection procedures, tighter import and export controls and new security regulations could increase costs and disrupt our business.
International shipping is subject to security and customs inspection and related procedures in countries of origin, destination and trans-shipment points. Since the events of September 11, 2001, there have been a variety of initiatives intended to enhance vessel security, such as the MTSA. 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, vessels. 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 vessels and, in certain cases, to render the shipment of certain types of goods uneconomical or impractical. These additional costs could reduce the volume of goods shipped, resulting in a decreased demand for vessels and have a negative impact on our business, revenues and customer relations.
Acts of piracy on ocean-going vessels have 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 if our vessels are deployed in Joint War Committee "war and strikes" listed areas, premiums payable for insurance coverage could increase significantly and such insurance coverage may be more difficult to obtain. 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 vessels has particular operational risks.
The operation of drybulk vessels has certain unique risks. With a drybulk vessel, 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 vessels are often subjected to battering treatment during discharging operations with grabs, jackhammers (to pry encrusted cargoes out of the hold) and small bulldozers. This treatment may cause damage to the vessel. Vessels damaged due to treatment during discharging procedures may affect a vessel's seaworthiness while at sea. Hull fractures in drybulk vessels may lead to the flooding of the vessels' holds. If a drybulk vessel suffers flooding in its forward holds, the bulk cargo may become so dense and waterlogged that its pressure may buckle the vessel's bulkheads, leading to the loss of a vessel. If we are unable to adequately maintain our vessels, we may be unable to prevent these events. Any of these circumstances or events could negatively impact our business, financial condition, and results of operations.
10


If any of our vessels fails to maintain its class certification or fails any annual survey, intermediate survey, or special survey, or if any scheduled class survey takes longer or is more expensive than anticipated, this could have a material adverse impact on our financial condition and results of operations.
The hull and machinery of every commercial vessel must be certified by a classification society authorized by its country of registry. The classification society certifies that a vessel is safe and seaworthy in accordance with the applicable rules and regulations of the country of registry of the vessel and the SOLAS.
A vessel must undergo annual, intermediate and special surveys. The vessel's machinery may be on a continuous survey cycle, under which the machinery would be surveyed periodically over a five-year period. At the beginning, 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 related violation of our loan 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 be renewed as necessary or will prevent labor interruptions. Any labor interruptions could disrupt our operations and harm our financial performance.
Maritime claimants could arrest or attach one or more of our vessels, which could interrupt our cash flows.
Crew members, suppliers of goods and services to a vessel, shippers of cargo and other parties may be entitled to a maritime lien against a vessel for unsatisfied debts, claims or damages. In many jurisdictions, a maritime lien holder may enforce its lien by arresting a vessel through foreclosure proceedings. The arrest or attachment of one or more of our vessels could interrupt our cash flow and require us to pay large sums of funds to have the arrest lifted, which would have a material adverse effect on our financial condition and results of operations.
In addition, in some jurisdictions, such as South Africa, under the "sister ship" theory of liability, a claimant may arrest both the vessel 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, which could negatively impact our business, financial condition, results of operations, and available cash.
A government could requisition for title or hire one or more of our vessels. Requisition for title occurs when a government takes control of a vessel and becomes the owner. Also, a government could requisition a vessel for hire. Requisition for hire occurs when a government takes control of a vessel and effectively becomes the charterer at dictated charter rates. Generally, requisitions occur during a period of war or emergency. Government requisition of one or more of our vessels could have a material adverse effect on our financial condition and results of operations.
11


The shipping industry has inherent operational risks that may not be adequately covered by our insurances.  Further, because we obtain some of our insurances through protection and indemnity associations, we may also be retrospectively subject to calls or premiums in amounts based not only on our own claim records, but also on the claim records of all other members of the protection and indemnity associations.
We procure insurance for our fleet against risks commonly insured against by vessel owners and operators. Our current insurances include hull and machinery insurance, war risks insurance, demurrage and defense insurance and protection and indemnity insurance (which includes environmental damage and pollution insurance). We do not expect to maintain for 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 or our insurers may not pay a particular claim. Even if our insurance coverage is adequate to cover our losses, we may not be able to timely obtain a replacement vessel in the event of a loss. Furthermore, in the future, we may not be able to obtain adequate insurance coverage at reasonable rates for our fleet. Our insurance policies also contain deductibles, limitations and exclusions which, although we believe are standard in the shipping industry, may nevertheless increase our costs. If our insurances are not enough to cover claims that may arise, the deficiency may have a material adverse effect on our financial condition and results of operations. We may also be retrospectively subject to calls, or premiums, in amounts based not only on our own claim records but also the claim records of all other members of the protection and indemnity associations through which we receive indemnity insurance coverage for tort liability, including pollution-related liability. Our payment of these calls could result in significant expenses to us.
Risks Relating to Our Company
We have depended on an entity affiliated with our principal shareholder for financing.
We have relied on Jelco Delta Holding Corp., or Jelco, a company affiliated with Claudia Restis, who is our principal shareholder, or Sponsor, for funding for vessel acquisitions and general corporate purposes during 2015 through 2018.  This has included convertible notes and loan facilities, as further described under "Item 5. Operating and Financial Review and Prospects – B. Liquidity and Capital Resources – Loan Arrangements". We cannot assure you that in the future we will be able to rely on Jelco for financing on similar terms or at all.  Any inability to secure financing in the future from Jelco could negatively affect our liquidity position and ability to fund our ongoing operations.
If we fail to manage our planned growth properly, we may not be able to successfully expand our market share.
Our fleet currently consists of ten Capesize vessels, and we may acquire additional vessels in the future. Our ability to manage our growth will primarily depend on our ability to:

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

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finance our operations, through equity offerings or otherwise, for our existing and new operations;

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locate and acquire suitable vessels;

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identify and consummate acquisitions or joint ventures;

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

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

·
expand our customer base.
12


Growing any business by acquisitions presents numerous risks such as obtaining acquisition financing on acceptable terms or at all, undisclosed liabilities and obligations, difficulty in obtaining additional qualified personnel, managing relationships with customers and suppliers and integrating newly acquired operations into existing infrastructures. We may not be successful in executing our growth plans and we may incur significant additional expenses and losses in connection therewith.
Purchasing and operating secondhand vessels, such as our current fleet, may result in increased operating costs and vessel off-hire, which could adversely affect our financial condition and results of operations.
All ten of the vessels in our fleet are secondhand vessels. Our inspection of these or other secondhand vessels prior to purchase does not provide us with the same knowledge about their condition and the cost of any required or anticipated repairs that we would have had if these vessels had been built for and operated exclusively by us. We have not received in the past, and do not expect to receive in the future, the benefit of warranties on any secondhand vessels we acquire.
As the vessels in our fleet or other secondhand vessels we may acquire age, they may become less fuel efficient and more costly to maintain and will not be as advanced as recently constructed vessels due to improvements in design, technology and engineering, including improvements required to comply with government regulations. Rates for cargo insurance, paid by charterers, also increase with the age of a vessel, making older vessels less desirable to charterers.
In addition, charterers actively discriminate against hiring older vessels. Rightship, the ship vetting service founded by Rio Tinto and BHP-Billiton, has become a major vetting service in the drybulk shipping industry, which ranks the suitability of vessels based on a scale of one to five stars. There are carriers that may not charter a vessel that Rightship has vetted with fewer than three stars. Therefore, a potentially deteriorated star rating for our vessels may affect their commercial operation and profitability and vessels in our fleet with lower ratings may experience challenges in securing charters. Effective as of January 1, 2018, Rightship’s age trigger for a dry cargo inspection for vessels over 8,000 dwt changed from 18 years to 14 years, after which an annual acceptable Rightship inspection will be required. Rightship may downgrade any vessel over 18 years of age that has not completed a satisfactory inspection by Rightship, in the same manner as any other vessel over 14 years of age, to two stars, which significantly decreases its chances of entering into a charter. Therefore, one of our drybulk carriers is 18 years of age, we may not be able to operate this vessel profitably during the remainder of its useful life. Five, four and one of the vessels in our fleet have five, four and three star risk ratings from Rightship, respectively.
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.
13


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 deliver a vessel on time may result in the delay of revenue from the vessel. Any such failure or delay could have a material adverse effect on our operating results.
We may acquire additional vessels, 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 further 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, 2018, we had $218 million of outstanding debt, excluding unamortized financing fees and the convertible notes issued to Jelco. Moreover, we anticipate that we will 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 further vessels or securing such debt financing. Significant levels of debt could have important consequences to us, including the following:

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our ability to obtain additional financing, if necessary, for working capital, capital expenditures, acquisitions or other purposes may be impaired or such financing may be unavailable on favorable terms, or at all;

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we may need to use a substantial portion of our cash from operations to make principal and interest payments on our bank debt and financing liabilities, reducing the funds that would otherwise be available for operations, future business opportunities and any future dividends to our shareholders;

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our debt level could make us more vulnerable to competitive pressures or a downturn in our business or the economy generally than our competitors with less debt; and

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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. For more information regarding our current loan arrangements, please see "Item 5. Operating and Financial Review and Prospects – B. Liquidity and Capital Resources – Loan Arrangements".
14


We are exposed to volatility in the USD London Interbank Offered Rate, or LIBOR, which could affect our profitability, earnings and cash flow.
LIBOR has historically been volatile, with the spread between LIBOR and the prime lending rate widening significantly at times. These conditions are the result of the disruptions in the international credit markets. Because the interest rates borne by our outstanding indebtedness fluctuate with changes in LIBOR, if this volatility were to occur, it would affect the amount of interest payable on our debt which, in turn, could have an adverse effect on our profitability, earnings and cash flow.
Furthermore, historically interest in most loan agreements in our industry has been based on published LIBOR rates. Recently, however, there is uncertainty relating to the LIBOR calculation process, which may result in the phasing out of LIBOR in the future. As a result, lenders have insisted on provisions that entitle the lenders, in their discretion, to replace published LIBOR as the basis for the interest calculation with their cost-of-funds rate. If we are required to agree to such a provision in future financing agreements, our lending costs could increase significantly, which would have an adverse effect on our profitability, earnings and cash flow.
In addition, the banks currently reporting information used to set LIBOR will likely stop such reporting after 2021, when their commitment to reporting information ends.  The Alternative Reference Rate Committee, a committee convened by the Federal Reserve that includes major market participants, has proposed an alternative rate to replace U.S. Dollar LIBOR: the Secured Overnight Financing Rate, or SOFR. The impact of such a transition away from LIBOR could be significant for us because of our substantial indebtedness.
In order to manage our exposure to interest rate fluctuations, we may from time to time use interest rate derivatives to effectively fix some of our floating rate debt obligations. No assurance can however be given that the use of these derivative instruments, if any, may effectively protect us from adverse interest rate movements. The use of interest rate derivatives may affect our results through mark to market valuation of these derivatives. Also, adverse movements in interest rate derivatives may require us to post cash as collateral, which may impact our free cash position. Entering into swaps and derivatives transactions is inherently risky and presents various possibilities for incurring significant expenses. The derivatives strategies that we employ in the future may not be successful or effective, and we could, as a result, incur substantial additional interest costs and recognize losses on such arrangements in our financial statements. Such risk may have an adverse effect on our financial condition and results of operations.
Our loan agreements and other financing arrangements contain, and we expect that other future loan agreements and financing arrangements will contain, restrictive covenants that may limit our liquidity and corporate activities, which could limit our operational flexibility and have an adverse effect on our financial condition and results of operations. In addition, because of the presence of cross-default provisions in our loan agreements and financing arrangements, a default by us under one loan could lead to defaults under multiple loans.
Our loan agreements and other financial arrangements contain, and we expect that other future loan agreements and financing arrangements will contain, customary covenants and event of default clauses, financial covenants, restrictive covenants and performance requirements, which may affect operational and financial flexibility. Such restrictions could affect, and in many respects limit or prohibit, among other things, our ability to pay dividends, incur additional indebtedness, create liens, sell assets, or engage in mergers or acquisitions. These restrictions could limit our ability to plan for or react to market conditions or meet extraordinary capital needs or otherwise restrict corporate activities. There can be no assurance that such restrictions will not adversely affect our ability to finance our future operations or capital needs.
As a result of these restrictions, we may need to seek permission from our lenders and other financing counterparties in order to engage in some corporate actions. Our lenders' and other financing counterparties' interests may be different from ours and we may not be able to obtain their permission when needed. This may prevent us from taking actions that we believe are in our best interests, which may adversely impact our revenues, results of operations and financial condition.
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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.
In the recent past, we obtained waivers and deferrals of most major financial covenants under our loan facilities with our lenders until the second quarter of 2019.  In February and March 2019, we have received approval from the credit committees of certain of our lenders to amend the applicable thresholds or further defer the application date of certain financial covenants and security requirements of our credit facilities for the next twelve months. This approval is subject to completion of definitive documentation. As of the date of this Annual Report, we comply with all applicable financial covenants under our existing loan facilities. However, there can be no assurance that we will obtain similar waivers and deferrals from our lenders in the future if needed, as we have obtained in the past. For more information regarding our current loan facilities, see please see "Item 5. Operating and Financial Review and Prospects – B. Liquidity and Capital Resources – Loan Arrangements".
Because of the presence of cross-default provisions in our loan agreements, a default by us under a loan and the refusal of any one lender to grant or extend a waiver could result in the acceleration of our indebtedness under our other loans. A cross-default provision means that if we default on one loan, we would then default on our other loans containing a cross-default provision.
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 industries in which our counterparties operate 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 renegotiating their charters or defaulting on their obligations under charter agreements, and so our customers may fail to pay charter hire or attempt to renegotiate charter rates. Should a 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.
Rising crew costs may adversely affect our profits.
Crew costs are expected to be a significant expense for us. Recently, the limited supply of and increased demand for highly skilled and qualified crew, due to the increase in the size of the global shipping fleet, has created upward pressure on crewing costs. Increases in crew costs may adversely affect our profitability if we are not able to increase our rates.
We may not be able to attract and retain key management personnel and other employees in the shipping industry, which may negatively affect the effectiveness of our management and our results of operations.
Our success will depend to a significant extent upon the abilities and efforts of our management team, including our ability to retain key members of our management team and the ability of our management to recruit and hire suitable employees. The loss of any of these individuals could adversely affect our business prospects and financial condition. Difficulty in hiring and retaining personnel could adversely affect our results of operations.
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Our vessels may suffer damage, and we may face unexpected repair costs, which could adversely affect our cash flow and financial condition.
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 any 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 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.
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.
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In the highly competitive international shipping industry, we may not be able to compete for charters with new entrants or established companies with greater resources, which may adversely affect our results of operations.
We 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.
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.
Because we obtain some of our insurances through protection and indemnity associations, we may also be retrospectively subject to calls or premiums in amounts based not only on our own claim records, but also on the claim records of all other members of the protection and indemnity associations.
We may be retrospectively 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.
Failure to comply with the U.S. Foreign Corrupt Practices Act of 1977, or FCPA, could result in fines, criminal penalties, and an adverse effect on our business.
We operate throughout the world, including countries with a reputation for corruption.  We are committed to doing business in accordance with applicable anti-corruption laws and have adopted a code of business conduct and ethics which is consistent and in full compliance with the FCPA.  We are subject, however, to the risk that we, our affiliated entities or our or their respective officers, directors, employees and agents may take action determined to be in violation of such anti-corruption laws, including the FCPA.  Any such violation could result in substantial fines, sanctions, civil and/or criminal penalties, curtailment of operations in certain jurisdictions, and might adversely affect our business, results of operations or financial condition.  In addition, actual or alleged violations could damage our reputation and ability to do business.  Furthermore, detecting, investigating, and resolving actual or alleged violations is expensive and can consume significant time and attention of our senior management.
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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).   Fidelity provides us with commercial management services for our vessels and Seanergy Management Corp., or Seanergy Management, our wholly owned subsidiary, provides us with certain other management services. Our operational success depends significantly upon V.Ships', Fidelity's and Seanergy Management's satisfactory performance of these services. Our business would be harmed if V.Ships, Fidelity or Seanergy Management failed to perform these services satisfactorily. In addition, if our management agreements with any of V.Ships, Fidelity or Seanergy Management were to be terminated or if their terms were to be altered, our business could be adversely affected, as we may not be able to immediately replace such services, and even if replacement services were immediately available, the terms offered could be less favorable than those under our existing management agreements.
Our ability to compete for and enter into new period time and spot charters and to expand our relationships with our existing charterers 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 managers are each privately held companies and there is little or no publicly available information about them.
The ability of V.Ships, Fidelity and Seanergy Management 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 paid a monthly fee of $8,000 per vessel in 2018 and we have been paying a monthly fee of about $8,200 per vessel starting January 1, 2019 in exchange for V.Ships’ provision of technical, support and administrative services. The management fees do not cover expenses such as voyage expenses, vessel operating expenses, maintenance expenses and crewing costs, for which we reimburse the technical manager. The management fees are payable whether or not our vessels are employed and regardless of our profitability, and we have no ability to require our 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.
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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 effectively controls all decisions with respect to our shipping operations that do not involve a transaction with our Sponsor. Mr. Stamatios Tsantanis, Ms. Christina Anagnostara and Mr. Elias Culucundis currently serve on our shipping committee.
We may be classified as a passive foreign investment company, which could result in adverse U.S. federal income tax consequences to U.S. holders of our common stock.
A foreign corporation will be treated as a "passive foreign investment company", or PFIC, for U.S. federal income tax purposes if either (1) at least 75% of its gross income for any taxable year consists of certain types of "passive income" or (2) at least 50% of the average value of the corporation's assets produce or are held for the production of those types of "passive income". For purposes of these tests, "passive income" includes dividends, interest, 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 assets. There is substantial legal authority supporting this position including case law and U.S. Internal Revenue Service, or IRS, pronouncements concerning the characterization of income derived from time charters and voyage charters as services income for other tax purposes. However, it should be noted that there is also authority which characterizes time charter income as rental income rather than services income for other tax purposes. Accordingly, no assurance can be given that the IRS or a court of law will accept this position, and there is a risk that the IRS or a court of law could determine that we are a PFIC. Moreover, no assurance can be given that we would not constitute a PFIC for any future taxable year if the nature and extent of our operations change.
If the IRS were to find that we are or have been a PFIC for any taxable year, our U.S. shareholders would face adverse U.S. federal income tax consequences and certain information reporting requirements. Under the PFIC rules, unless those shareholders make an election available under the United States Internal Revenue Code of 1986 as amended, or the Code (which election could itself have adverse consequences for such shareholders), such shareholders would be liable to pay U.S. federal income tax at the then prevailing income tax rates on ordinary income plus interest upon excess distributions and upon any gain from the disposition of their shares of our common stock, as if the excess distribution or gain had been recognized ratably over the shareholder's holding period of the shares of our common stock. Similar consequences would apply to holders of our warrants. See "Item 10.E. Tax Considerations – 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.
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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.
We did not qualify for exemption from the 4% tax under Section 883 for our 2018 taxable year as we did not satisfy one of the ownership tests described in "Item 10.E. Tax Considerations – United States Federal Income Tax Consequences – Exemption of Operating Income from United States Federal Income Taxation" for such taxable year. The ownership tests require us, inter alia, to establish or substantiate sufficient ownership of our common shares by one or more "qualified" shareholders.  For our 2018 taxable year, we had U.S. source gross shipping income, on which we were subject to a U.S federal tax of $33,080. Some of our charterparties contain clauses that permit us to seek re i mbursement from charterers of any U.S. tax paid. We have sought re i mbu r sement and have secured payment from most of our charterers for the 2018 taxable year and are in the process of securing payment from the remaining charterers.
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 2019 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.
We may be subject to tax in the jurisdictions in which we or our vessel owning subsidiaries are incorporated or operate.
In addition to the tax consequences discussed herein, we may be subject to tax in one or more other jurisdictions where we or our vessel owning subsidiaries are incorporated or conduct activities. We are subject to a corporate flat tax for our subsidiaries in Malta for the period from May 23, 2018 to December 31, 2018, and could be subject to additional taxation in the future in Malta or other jurisdictions where our subsidiaries are incorporated or do business. The amount of any such tax imposed upon our operations or on our subsidiaries’ operations may be material and could have an adverse effect on our earnings. 
We are a "foreign private issuer", which could make our common stock less attractive to some investors or otherwise harm our stock price.
We are a "foreign private issuer", as such term is defined in Rule 405 under the Securities Act. As a "foreign private issuer" the rules governing the information that we disclose differ from those governing U.S. corporations pursuant to the Exchange Act. We are not required to file quarterly reports on Form 10-Q or provide current reports on Form 8-K disclosing significant events within four days of their occurrence. In addition, our officers and directors are exempt from the reporting and "short-swing" profit recovery provisions of Section 16 of the Exchange Act and related rules with respect to their purchase and sales of our securities. Our exemption from the rules of Section 16 of the Exchange Act regarding sales of common stock by insiders means that you will have less data in this regard than shareholders of U.S. companies that are subject to the Exchange Act. Moreover, we are exempt from the proxy rules, and proxy statements that we distribute will not be subject to review by the Commission. Accordingly, there may be less publicly available information concerning us than there is for other U.S. public companies. These factors could make our common stock less attractive to some investors or otherwise harm our stock price.
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The Public Company Accounting Oversight Board inspection of our independent accounting firm, could lead to adverse findings in our auditors' reports and challenges to the accuracy of our published audited consolidated financial statements.
Auditors of U.S. public companies are required by law to undergo periodic Public Company Accounting Oversight Board, or PCAOB, inspections that assess their compliance with U.S. law and professional standards in connection with performance of audits of financial statements filed with the SEC. For several years certain European Union countries, including Greece, did not permit the PCAOB to conduct inspections of accounting firms established and operating in such European Union countries, even if they were part of major international firms. Accordingly, unlike for most U.S. public companies, the PCAOB was prevented from evaluating our auditor's performance of audits and its quality control procedures, and, unlike stockholders of most U.S. public companies, we and our stockholders were deprived of the possible benefits of such inspections. Since 2015, Greece agreed to allow the PCAOB to conduct inspections of accounting firms operating in Greece. In the future, such PCAOB inspections could result in findings in our auditors' quality control procedures, question the validity of the auditor's reports on our published consolidated financial statements and the effectiveness of our internal control over financial reporting, and cast doubt upon the accuracy of our published audited financial statements.
We conduct business in China, where the legal system is not fully developed and has inherent uncertainties that could limit the legal protections available to us.
Some of our vessels may be chartered to Chinese customers and from time to time on our charterers' instructions, our vessels may call on Chinese ports.  Such charters and voyages may be subject to regulations in China that may require us to incur new or additional compliance or other administrative costs and may require that we pay to the Chinese government new taxes or other fees.  Applicable laws and regulations in China may not be well publicized and may not be known to us or our charterers in advance of us or our charterers becoming subject to them, and the implementation of such laws and regulations may be inconsistent.  Changes in Chinese laws and regulations, including with regards to tax matters, or changes in their implementation by local authorities, could affect our vessels if chartered to Chinese customers as well as our vessels calling to Chinese ports and could have a material adverse impact on our business, financial conditions and results of operations.
Changing laws and evolving reporting requirements could have an adverse effect on our business.
Changing laws, regulations and standards relating to reporting requirements, including the European Union General Data Protection Regulation, or GDPR, may create additional compliance requirements for us. To maintain high standards of corporate governance and public disclosure, we have invested in, and continue to invest in, reasonably necessary resources to comply with evolving standards.
GDPR broadens the scope of personal privacy laws to protect the rights of European Union citizens and requires organizations to report on data breaches within 72 hours and be bound by more stringent rules for obtaining the consent of individuals on how their data can be used. Non-compliance with GDPR may expose entities to significant fines or other regulatory claims which could have an adverse effect on our business, and results of operations.
A cyber-attack could materially disrupt our business.
We rely on information technology systems and networks in our operations and administration of our business. 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. In addition, the unavailability of the information systems or the failure of these systems to perform as anticipated for any reason could disrupt our business and could result in decreased performance and increased operating costs, causing our business and results of operations to suffer. Any significant interruption or failure of our information systems or any significant breach of security could adversely affect our business and results of operations.
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Risks Relating to Our Common Shares
The market price of our common shares has been and may in the future be subject to significant fluctuations. Further, there is no guarantee of a continuing public market to resell our common shares.
Our common shares commenced trading on the Nasdaq Global Market on October 15, 2008. Since December 21, 2012, our common shares have traded on the Nasdaq Capital Market. We cannot assure you that an active and liquid public market for our common shares will continue.
The market price of our common shares has been and may in the future be subject to significant fluctuations as a result of many factors, some of which are beyond our control. Among the factors that have in the past and could in the future affect our stock price are:

·
quarterly variations in our results of operations;

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

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

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

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

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

·
regulatory developments;

·
additions or departures of key personnel;

·
general market conditions; and

·
domestic and international economic, market and currency factors unrelated to our performance.
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.
Additionally, there is no guarantee of a continuing public market to resell our common shares. Our common shares now trade on the Nasdaq Capital Market. We cannot assure you that an active and liquid public market for our common shares will continue.
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.
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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 second amended and restated bylaws 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 shares.
Several provisions of our amended and restated articles of incorporation and second amended and restated bylaws 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.
These provisions:

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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;

·
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; 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 shares and your ability to realize any potential change of control premium.
Issuance of preferred shares 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 shares.
Our amended and restated articles of incorporation currently authorize our board of directors to issue preferred shares in one or more series and to determine the rights, preferences, privileges and restrictions, with respect to, among other things, dividends, conversion, voting, redemption, liquidation and the number of shares constituting any series without shareholders' approval. If our board of directors determines to issue preferred shares, such issuance may discourage, delay or prevent a merger or acquisition that shareholders may consider favorable. The issuance of preferred shares with voting and conversion rights may also adversely affect the voting power of the holders of common shares. This could substantially impede the ability of public shareholders to benefit from a change in control and, as a result, may adversely affect the market price of our common shares and our shareholders' ability to realize any potential change of control premium.
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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.
Jelco and Comet Shipholding Inc., or Comet, both companies affiliated with our Sponsor, currently collectively own approximately 1,117,582, or approximately 39.8%, of our outstanding common shares.  Jelco may also acquire up to 2,867,776 additional common shares upon conversion of the convertible notes issued to it by the Company, in which case our Sponsor would own approximately 70.2% of our outstanding common shares, based on the number of common shares outstanding as of March 21, 2019.  As a result, Jelco and Comet may 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 shareholder approval, which would dilute our existing shareholder's ownership interests and may depress the market price of our common shares.
We may issue additional common shares or other equity securities of equal or senior rank in the future without shareholder approval in connection with, among other things, future vessel acquisitions, the repayment of outstanding indebtedness, and the conversion of convertible financial instruments.
Our issuance of additional common shares or other equity securities of equal or senior rank in these situations would have the following effects:

·
our existing shareholders' proportionate ownership interest in us would decrease;

·
the proportionate amount of cash available for dividends payable on our common shares could decrease;

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

·
the market price of our common shares could decline.
In addition, we may issue additional common shares upon any conversion of our outstanding convertible notes issued to Jelco or upon exercise of our outstanding class A warrants or the Representative's Warrants issued to Maxim Group LLC, or Maxim in connection with our public offering in December 2016.
As of March 21, 2019, Jelco had the right to acquire 281,481 common shares upon exercise of a conversion option pursuant to the convertible note dated March 12, 2015, as amended, issued by the Company to Jelco, 1,567,777 common shares upon exercise of a conversion option pursuant to the revolving convertible note dated September 7, 2015, as amended, issued by the Company to Jelco and 1,018,518 common shares upon exercise of a conversion option pursuant to the convertible note dated September 27, 2017, as amended, issued by the Company to Jelco. Under each of the convertible notes, Jelco may, at its option, convert the principal amount under the note at any time into common shares at a conversion price of $13.50 per share. Our issuance of additional common shares in such instance would cause the proportionate ownership interest in us of our existing shareholders, other than Jelco, 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.
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As of March 21, 2019, we had 11,500,000 class A warrants outstanding to purchase an aggregate of 766,666 common shares and two Representative's Warrants outstanding to purchase an aggregate of 37,666 common shares. Each class A warrant is exercisable for one common share at an exercise price of $30.00 per share and expires in December 2021.  The Representative's Warrants have an exercise price equal to $28.13 per common share and expire in December 2019.  Our issuance of additional common shares upon the exercise of the class A warrants or Representative's Warrants would cause the proportionate ownership interest in us of our existing shareholders, other than the exercising warrant holders, to decrease; the relative voting strength of each previously outstanding common share held by our existing shareholders 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 Second Amended and Restated Bylaws and by the Marshall Islands Business Corporations Act, or the BCA. The provisions of the BCA resemble provisions of the corporation laws of a number of states in the United States. However, there have been few judicial cases in the Republic of the Marshall Islands interpreting the BCA. The rights and fiduciary responsibilities of directors under the laws of the Republic of the Marshall Islands are not as clearly established as the rights and fiduciary responsibilities of directors under statutes or judicial precedent in existence in certain U.S. jurisdictions. Shareholder rights may differ as well. While the BCA does specifically incorporate the non-statutory law, or judicial case law, of the State of Delaware and other states with substantially similar legislative provisions, shareholders may have more difficulty in protecting their interests in the face of actions by the management, directors or controlling shareholders than would shareholders of a corporation incorporated in a U.S. jurisdiction.
Additionally, the Republic of the Marshall Islands does not have a legal provision for bankruptcy or a general statutory mechanism for insolvency proceedings. As such, in the event of a future insolvency or bankruptcy, our shareholders and creditors may experience delays in their ability to recover for their claims after any such insolvency or bankruptcy. Further, in the event of any bankruptcy, insolvency, liquidation, dissolution, reorganization or similar proceeding involving us or any of our subsidiaries, bankruptcy laws other than those of the United States could apply. If we become a debtor under U.S. bankruptcy law, bankruptcy courts in the United States may seek to assert jurisdiction over all of our assets, wherever located, including property situated in other countries. There can be no assurance, however, that we would become a debtor in the United States, or that a U.S. bankruptcy court would be entitled to, or accept, jurisdiction over such a bankruptcy case, or that courts in other countries that have jurisdiction over us and our operations would recognize a U.S. bankruptcy court’s jurisdiction if any other bankruptcy court would determine it had jurisdiction.
It may not be possible for investors to serve process on or enforce U.S. judgments against us.
We and all of our subsidiaries are incorporated in jurisdictions outside the U.S. and substantially all of our assets and those of our subsidiaries are located outside the U.S. In addition, most of our directors and officers are non-residents of the U.S., and all or a substantial portion of the assets of these non-residents are located outside the U.S. As a result, it may be difficult or impossible for U.S. investors to serve process within the U.S. upon us, our subsidiaries or our directors and officers or to enforce a judgment against us for civil liabilities in U.S. courts. In addition, you should not assume that courts in the countries in which we or our subsidiaries are incorporated or where our assets or the assets of our subsidiaries are located (1) would enforce judgments of U.S. courts obtained in actions against us or our subsidiaries based upon the civil liability provisions of applicable U.S. federal and state securities laws or (2) would enforce, in original actions, liabilities against us or our subsidiaries based on those laws.
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ITEM 4.
INFORMATION ON THE COMPANY
A.   History and Development of the Company
Overview
We are an international shipping company specializing in the worldwide seaborne transportation of drybulk commodities. We currently own a modern fleet of ten Capesize bulk carriers with a cargo-carrying capacity of approximately 1,748,581 dwt and an average fleet age of 10 years. We are the only pure-play Capesize ship-owner publicly listed in the U.S..
We believe we have established a reputation in the international drybulk shipping industry for operating and maintaining vessels with high standards of performance, reliability and safety. We have assembled a management team comprised of executives who have extensive experience operating large and diversified fleets, and who have strong ties to a number of international charterers.
We were incorporated under the laws of the Republic of the Marshall Islands, pursuant to the BCA, on January 4, 2008, originally under the name Seanergy Merger Corp.  We changed our name to Seanergy Maritime Holdings Corp. on July 11, 2008. Our executive offices are located at 154 Vouliagmenis Avenue, 166 74 Glyfada, Athens, Greece and our telephone number is + 30 213 0181507. Our website is www.seanergymaritime.com . The SEC maintains a website that contains reports, proxy and information statements, and other information that we file electronically at www.sec.gov .

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History and Development

In a registered direct offering that was completed on August 10, 2016, we sold 78,666 of our common shares to an unaffiliated institutional investor at a public offering price of $62.25 per share, for aggregate gross proceeds of $4.9 million. The net proceeds from the sale of the common shares, after deducting placement agent fees and related offering expenses, were approximately $4.1 million.
On September 26, 2016, we entered into agreements with an unaffiliated third party for the purchase of two secondhand Capesize vessels for an aggregate purchase price of $41.5 million. We took delivery of the vessels, Lordship and Knightship , between November and December 2016. The acquisition costs of the vessels were funded with proceeds from the First Jelco Loan Facility described below, a $32 million secured loan facility with Northern Shipping Fund III LP, or NSF, and by cash on hand.
In a registered direct offering that was completed on November 23, 2016, we sold 87,000 common shares to unaffiliated institutional investors at a public offering price of $41.25 per share, for aggregate gross proceeds of $3.6 million. The net proceeds from the sale of the common shares, after deducting fees and expenses, were approximately $3.2 million.
On December 21, 2016, we completed a public offering of 753,332 of our common shares and class A warrants to purchase 766,666 common shares, which included the exercise of an over-allotment option. In connection with the offering, we issued to Maxim, the underwriter, Representative's Warrants to purchase 37,666 of our common shares.  We received net proceeds of $14.9 million in connection with the consummation of the underwritten public offering.
On February 3, 2017, we entered into an Equity Distribution Agreement with Maxim, as sales agent, pursuant to which we sold 185,475   of our common shares for an aggregate net proceeds of $2.6 million.  On June 27, 2017, we and Maxim mutually terminated the Equity Distribution Agreement.
On March 7, 2017, we entered into a settlement agreement with Natixis related to our secured term loan facility with Natixis.  Under the terms of the settlement agreement, we were granted an option, until September 29, 2017, to satisfy the full amount of the facility at a discount by making a prepayment of $28 million. On September 29, 2017, our lender, Natixis, entered into a deed of release and fully discharged the $35.4 million balance of our secured term loan facility obligations to the lender for a total settlement amount of $24.0 million. The first-priority mortgage over the Championship and all other securities created in favour of Natixis were irrevocably and unconditionally released pursuant to the deed of release. We recognized a gain from the Natixis refinancing of $11.4 million.
On March 28, 2017, we entered into an agreement with an unaffiliated third party for the purchase of a secondhand Capesize vessel, the Partnership, for a gross purchase price of $32.7 million. We took delivery of the vessel Partnership on May 31, 2017. The acquisition costs of the Partnership were funded with proceeds from a $18 million secured loan facility with Amsterdam Trade Bank N.V., or ATB, as described below and a $16.2 million secured loan facility with Jelco, referred to as the Second Jelco Loan Facility.
On May 24, 2017, we entered into an up to $18 million term loan facility with ATB, the ATB Loan Facility, to partially finance the acquisition of the Partnership .
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On May 24, 2017, we entered into an up to $16.2 million loan facility with Jelco to partially finance the acquisition of the Partnership .
On September 25, 2017, in order to partially fund the refinancing of our Natixis facility, we amended and restated the ATB Loan Facility, increasing the loan amount of the facility by an additional tranche of $16.5 million, the Amended and Restated ATB Loan Facility.
On September 27, 2017, we entered into an amendment and restatement of the $16.2 million Second Jelco Loan Facility, as described below.
On April 10, 2018, we entered into a $2 million loan facility with Jelco for working capital purposes, also described below as the Third Jelco Loan Facility. We drew down the $2 million on April 12, 2018.
On June 11, 2018, we entered into a $24.5 million term loan facility with Blue Ocean maritime lending funds managed by EnTrustPermal in order to partially fund the refinancing of our $32 million NSF facility. On June 13, 2018, our lender, NSF, entered into a deed of release and fully discharged the $16 million balance of our secured term loan facility. The first-priority mortgage over the Lordship and all other securities granted by the vessel-owning subsidiary or over the Lordship in favour of NSF were irrevocably and unconditionally released pursuant to the deed of release.
On June 28, 2018, we entered into a sale and leaseback agreement with Hanchen Limited, or Hanchen, an affiliate of AVIC International Leasing Co., Ltd., for the purpose of refinancing the outstanding indebtedness under the $32 million NSF facility.  On June 28, 2018, our lender, NSF, entered into a deed of release and fully discharged the $16 million balance of our secured term loan facility. The first-priority mortgage over the Knightship and all other securities created in favour of NSF were irrevocably and unconditionally released pursuant to the deed of release. Under the terms of the sale and leaseback agreement, the Knightship was sold for $26.5 million and leased back on a bareboat basis for a period of 8 years.
On August 31, 2018 we entered into an agreement with an unaffiliated third party to acquire a secondhand Capesize vessel, the Fellowship , for a gross purchase price of $28.7 million. We took delivery of the vessel Fellowship on November 22, 2018. The acquisition costs of the Fellowship were funded with proceeds from an amended and restated term loan facility with UniCredit, the Amended and Restated UniCredit Loan Facility, described below, and by cash on hand.
On September 20, 2018, we entered into two separate definitive agreements with unaffiliated third parties for the sale of our two Supramax vessels, the Gladiatorship  and the Guardianship for an aggregate gross sale price of $22.7 million. The previous lender, UniCredit, agreed to rollover the loan amount under the $52.7 million loan facility by funding the Fellowship under the Amended and Restated UniCredit Loan Facility. The  Gladiatorship  and the Guardianship were delivered to their new owners on October 11, 2018 and on November 19, 2018, respectively.
On November 7, 2018, we entered into a sale and leaseback agreement with Cargill International SA, or Cargill, for the purpose of refinancing the outstanding indebtedness under the Amended and Restated ATB loan facility. Pursuant to the terms of the agreement, the Championship was sold and chartered back on a bareboat basis and subsequently was entered into a five-year time charter with Cargill . The refinancing has released approximately $7.8 million of liquidity for the Company that was used to partially finance the acquisition price of the Fellowship . As part of this agreement 120,000 shares were issued to Cargill.
On February 13, 2019, we entered into a new loan facility with ATB in order to refinance the existing indebtedness over the Partnership under the then existing ATB Loan Facility and for general working capital purposes and more specifically for the financing of installation of open loop scrubber systems on the Squireship and Premiership .
Effective at the opening of trading on March 20, 2019, we effected a one-for-fifteen reverse split of our common stock.
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B.   Business Overview
We are an international shipping company specializing in the worldwide seaborne transportation of drybulk commodities.  We currently operate ten Capesize vessels, with a cargo-carrying capacity of approximately 1,748,581 dwt and an average age of 10 years.
We believe we have established a reputation in the international drybulk shipping industry for operating and maintaining vessels with high standards of performance, reliability and safety. We have assembled a management team comprised of executives who have extensive experience operating large and diversified fleets, and who have strong ties to a number of international charterers.
Our Current Fleet
The following table lists the vessels in our fleet as of March 21, 2019:
Vessel Name
Year Built
Dwt
Flag
Yard
Type of Employment
Fellowship
2010
179,701
MI
Daewoo
Spot
Championship (1)
2011
179,238
MI
Sungdong
T/C Index Linked(2)
Partnership
2012
179,213
MI
Hyundai
T/C Index Linked(3)
Knightship (4)
2010
178,978
LIB
Hyundai
Spot
Lordship
2010
178,838
LIB
Hyundai
T/C Index Linked(5)
Gloriuship
2004
171,314
MI
Hyundai
Spot
Leadership
2001
171,199
BA
Koyo-Imabari
Spot
Geniuship
2010
170,058
MI
Sungdong
Spot
Premiership
2010
170,024
IoM
Sungdong
Spot
Squireship
2010
170,018
LIB
Sungdong
Spot

__________________

(1)
In November 2018, we entered into a financing arrangement with Cargill according to which this vessel was sold and leased back on a bareboat basis from Cargill for a five-year-period. We have a purchase obligation at the end of the five-year period and we further have the option to repurchase the vessel at any time during the bareboat charter.
 
(2)
This vessel is being chartered by Cargill. The vessel was delivered to the charterer on November 7, 2018 for a period of employment of 60 months, with an additional period of 16 to 18 months at the charterer’s option. The net daily charter hire is calculated at an index linked rate based on the five T/C routes of the Baltic Capesize Index. In addition, the time charter provides us with the option to convert the index linked rate to a fixed rate for a period of between 3 and 12 months priced at the then prevailing Capesize forward freight agreement rate for the selected period.
 
(3)
This vessel is being chartered by Uniper Global Commodities SE and was delivered to the charterer on December 7, 2018 in direct continuation of the vessel's previous time charter, for a period of about five months to about eight months. The net daily charter hire is calculated at an index linked rate based on the five T/C routes rate of the Baltic Capesize Index. In addition, the time charter provides us an option for any period of time during the hire to be converted into a fixed rate time charter, between three months and 12 months, with a rate corresponding to the prevailing value of the respective Capesize forward freight agreement.
 
(4)
In June 2018, we entered into a financing arrangement with AVIC International Leasing Co., Ltd., or AVIC according to which this vessel was sold and leased back on a bareboat basis from AVIC's affiliate, Hanchen, for an eight- year period. We have a purchase obligation at the end of the eight- year period and we further have the option to repurchase the vessel at any time following the second anniversary of delivery under the bareboat charter.

(5)
This vessel is being chartered by Oldendorff Carriers GmbH & Co. KG and was delivered to the charterer on June 28, 2017, in direct continuation of the vessel's previous time charter, for a period of about 18 months to about 22 months. The net daily charter hire is calculated at an index linked rate based on the five T/C routes rate of the Baltic Capesize Index. In addition, the time charter provides us an option for any period of time during the hire to be converted into a fixed rate time charter, between three months and 12 months, with a rate corresponding to the prevailing value of the respective Capesize forward freight agreement.
 
Key to Flags:
BA – Bahamas, IoM – Isle of Man, LIB – Liberia, MI – Marshall Islands.

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Our Business Strategy
We currently operate ten Capesize 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 Capesize drybulk vessels, although we may acquire vessels in other sectors which we believe offer attractive investment opportunities.
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, such as crewing and other technical management, accounting related to vessels and provisions. Pursuant to our technical management agreements with V.Ships, we paid a monthly fee of $8,000 per vessel in 2018 and we are paying a monthly fee of about $8,200 per vessel as of January 1, 2019 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 and crewing costs, which are reimbursed by us to V.Ships. 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. Fidelity serves as a commercial broker for Capesize vessels exclusively to us. Under the commercial management agreement, we have agreed to reimburse Fidelity for all reasonable running and/or out-of-pocket expenses, including but not limited to, telephone, fax, stationary and printing expenses, as well as any pre-approved travelling expenses. In addition, we have agreed to pay the following fees to Fidelity, (i) an annual fee of EUR 120,000 net payable in equal monthly payments and (ii) commission fees equal to 0.15% calculated on the collected gross hire/freight/demurrage payable when the relevant hire/freight/demurrage is collected. The fees under (i) and (ii) are capped at EUR 300,000 per year. 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
The majority of 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 and could lead to losses.
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Three of our vessels are also employed under time charters which have a charter hire calculated at an index-linked rate based on the 5-routes T/C average of the Baltic Exchange Capesize Index (BCI). In the future, we may opportunistically look to employ more of our vessels under time charter contracts with a fixed rate 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 nominee of the board of directors.
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 may not be altered without a similar vote. These duties and powers include voting the shares of stock that the Company owns in its subsidiaries. In addition to these agreements, we have amended certain provisions in our articles of incorporation and second amended and restated bylaws 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.
The Drybulk Shipping Industry
The global drybulk vessel 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.
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Handysize .  Handysize vessels have a carrying capacity of up to 30,000 dwt.  These vessels are almost exclusively carry minor bulk cargo.  Increasingly, vessels of this type operate on regional trading routes, and may serve as trans-shipment feeders for larger vessels.  Handysize vessels are well suited for small ports with length and draft restrictions.  Their cargo gear enables them to service ports lacking the infrastructure for cargo loading and discharging.
The supply of drybulk vessels is dependent on the delivery of new vessels and the removal of vessels from the global fleet, either through scrapping or loss.  The level of scrapping activity is generally a function of scrapping prices in relation to current and prospective charter market conditions, as well as operating, repair and survey costs.
The demand for drybulk vessel capacity is determined by the underlying demand for commodities transported in drybulk vessels, which in turn is influenced by trends in the global economy.  Demand for drybulk vessel capacity is also affected by the operating efficiency of the global fleet, with port congestion, which has been a feature of the market since 2004, absorbing tonnage and therefore leading to a tighter balance between supply and demand.  In evaluating demand factors for drybulk vessel capacity, we believe that drybulk vessels can be the most versatile element of the global shipping fleets in terms of employment alternatives.
Charter Hire Rates
Charter hire rates fluctuate by varying degrees among drybulk vessel size categories.  The volume and pattern of trade in a small number of commodities (major bulks) affect demand for larger vessels.  Therefore, charter rates and vessel values of larger vessels often show greater volatility.  Conversely, trade in a greater number of commodities (minor bulks) drives demand for smaller drybulk vessels.  Accordingly, charter rates and vessel values for those vessels are subject to less volatility.
Charter hire rates paid for drybulk vessels are primarily a function of the underlying balance between vessel supply and demand, although at times other factors may play a role.  Furthermore, the pattern seen in charter rates is broadly mirrored across the different charter types and the different drybulk vessel 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.
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.
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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 vessels, many of which may have more resources than us and may operate vessels that are newer, and therefore more attractive to charterers than vessels we may operate.  Ownership of drybulk vessels is highly fragmented and is divided among publicly listed companies, state-controlled companies and independent drybulk vessel owners.  We compete primarily with owners of drybulk vessels in the 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), Golden Ocean Group Ltd. (NASDAQ: GOGL).
Customers
Our customers include or have included national, regional and international companies.  Customers individually accounting for more than 10% of our revenues during the years ended December 31, 2018, 2017 and 2016 were:
Customer
 
2018
 
2017
 
2016
A
 
26%
 
17%
 
-
B
 
21%
 
-
 
18%
C
 
11%
 
17%
 
-
D
 
-
 
-
 
12%
             

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. Grain trades are completely seasonal as they are driven by the harvest within a climate zone. Because three of the five largest grain producers (the United States of America, Canada and the European Union) are located in the northern hemisphere and the other two (Argentina and Australia) are located in the southern hemisphere, harvests occur throughout the year and grains transportation requires drybulk shipping accordingly.
Environmental and Other Regulations
Government regulation and laws significantly affect the ownership and operation of our fleet. We are subject to international conventions and treaties, national, state and local laws and regulations in force in the countries in which our vessels may operate or are registered relating to safety and health and environmental protection including the storage, handling, emission, transportation and discharge of hazardous and non-hazardous materials, and the remediation of contamination and liability for damage to natural resources. Compliance with such laws, regulations and other requirements entails significant expense, including vessel modifications and implementation of certain operating procedures.
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A variety of government and private entities subject our vessels to both scheduled and unscheduled inspections. These entities include the local port authorities (applicable national authorities such as the United States Coast Guard, or USCG, harbor master or equivalent), classification societies, flag state administrations (countries of registry), terminal operators and charterers. Certain of these entities require us to obtain permits, licenses, certificates and other authorizations for the operation of our vessels. Failure to maintain necessary permits or approvals could require us to incur substantial costs or result in the temporary suspension of the operation of one or more of our vessels.
Increasing environmental concerns have created a demand for vessels that conform to stricter environmental standards. We are required to maintain operating standards for all of our vessels that emphasize operational safety, quality maintenance, continuous training of our officers and crews and compliance with United States and international regulations. We believe that the operation of our vessels is in substantial compliance with applicable environmental laws and regulations and that our vessels have all material permits, licenses, certificates or other authorizations necessary for the conduct of our operations. However, because such laws and regulations frequently change and may impose increasingly stricter requirements, we cannot predict the ultimate cost of complying with these requirements, or the impact of these requirements on the resale value or useful lives of our vessels. In addition, a future serious marine incident that causes significant adverse environmental impact could result in additional legislation or regulation that could negatively affect our profitability.
International Maritime Organization
The IMO, the United Nations agency for maritime safety and the prevention of pollution by vessels, has adopted the International Convention for the Prevention of Pollution from Ships, 1973, as modified by the Protocol of 1978 relating thereto, collectively referred to as MARPOL 73/78 and herein as MARPOL, adopted the International Convention for the Safety of Life at Sea of 1974, or SOLAS Convention, and the International Convention on Load Lines of 1966, or LL Convention. MARPOL establishes environmental standards relating to oil leakage or spilling, garbage management, sewage, air emissions, the handling and disposal of noxious liquids and the handling of harmful substances in packaged forms.  MARPOL is applicable to drybulk, tanker and LNG carriers, among other vessels, and is broken into six Annexes, each of which regulates a different source of pollution. Annex I relates to oil leakage or spilling; Annexes II and III relate to harmful substances carried in bulk in liquid or in packaged form, respectively; Annexes IV and V relate to sewage and garbage management, respectively; and Annex VI, lastly, relates to air emissions. Annex VI was separately adopted by the IMO in September of 1997.
In 2013, the IMO’s Marine Environmental Protection Committee, or the MEPC, adopted a resolution amending MARPOL Annex I Condition Assessment Scheme, or CAS. These amendments became effective on October 1, 2014 and require compliance with the 2011 International Code on the Enhanced Programme of Inspections during Surveys of Bulk Carriers and Oil Tankers, or ESP Code, which provides for enhanced inspection programs. We may need to make certain financial expenditures to comply with these amendments.
Air Emissions
In September of 1997, the IMO adopted Annex VI to MARPOL to address air pollution from vessels. Effective May 2005, Annex VI sets limits on sulfur oxide and nitrogen oxide emissions from all commercial vessel exhausts and prohibits "deliberate emissions" of ozone depleting substances (such as halons and chlorofluorocarbons), emissions of volatile compounds from cargo tanks, and the shipboard incineration of specific substances. Annex VI also includes a global cap on the sulfur content of fuel oil and allows for special areas to be established with more stringent controls on sulfur emissions, as explained below.  Emissions of "volatile organic compounds" from certain vessels, and the shipboard incineration (from incinerators installed after January 1, 2000) of certain substances (such as polychlorinated biphenyls, or PCBs) are also prohibited.  We believe that all our vessels are currently compliant in all material respects with these regulations.
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The MEPC, adopted amendments to Annex VI regarding emissions of sulfur oxide, nitrogen oxide, particulate matter and ozone depleting substances, which entered into force on July 1, 2010.  The amended Annex VI seeks to further reduce air pollution by, among other things, implementing a progressive reduction of the amount of sulfur contained in any fuel oil used on board ships. On October 27, 2016, at its 70th session, the MEPC agreed to implement a global 0.5% m/m sulfur oxide emissions limit (reduced from 3.50%) starting from January 1, 2020.  This limitation can be met by using low-sulfur compliant fuel oil, alternative fuels, or certain exhaust gas cleaning systems.  Once the cap becomes effective, ships will be required to obtain bunker delivery notes and International Air Pollution Prevention, or IAPP, Certificates from their flag states that specify sulfur content.  Additionally, at MEPC 73, amendments to Annex VI to prohibit the carriage of bunkers above 0.5% sulfur on ships were adopted and will take effect on March 1, 2020.  These regulations subject ocean-going vessels to stringent emissions controls and may cause us to incur substantial costs.
Sulfur content standards are even stricter within certain "Emission Control Areas", or ECAs. As of January 1, 2015, ships operating within an ECA were not permitted to use fuel with sulfur content in excess of 0.1%. Amended Annex VI establishes procedures for designating new ECAs. Currently, the IMO has designated four ECAs, including specified portions of the Baltic Sea area, North Sea area, North American area and United States Caribbean area.  Ocean-going vessels in these areas will be subject to stringent emission controls and may cause us to incur additional costs. If other ECAs are approved by the IMO, or other new or more stringent requirements relating to emissions from marine diesel engines or port operations by vessels are adopted by the U.S. Environmental Protection Agency, or EPA, or the states where we operate, compliance with these regulations could entail significant capital expenditures or otherwise increase the costs of our operations.
Amended Annex VI also establishes new tiers of stringent nitrogen oxide emissions standards for marine diesel engines, depending on their date of installation. At the MEPC meeting held in 2014, amendments to Annex VI were adopted which address the date on which Tier III Nitrogen Oxide (NOx) standards in ECAs will go into effect.  Under the amendments, Tier III NOx standards apply to ships that operate in the North American and U.S. Caribbean Sea ECAs designed for the control of NOx produced by vessels with a marine diesel engine installed and constructed on or after January 1, 2016.  Tier III requirements could apply to areas that will be designated for Tier III NOx in the future. At MEPC 70 and MEPC 71, the MEPC approved the North Sea and Baltic Sea as ECAs for nitrogen oxide for ships built after January 1, 2021. The EPA promulgated equivalent (and in some senses stricter) emissions standards in late 2009.
As determined at the MEPC 70, the new Regulation 22A of MARPOL Annex VI became effective as of March 1, 2018 and requires ships above 5,000 gross tonnage to collect and report annual data on fuel oil consumption to an IMO database, with the first year of data collection commencing on January 1, 2019.  The IMO intends to use such data as the first step in its roadmap (through 2023) for developing its strategy to reduce greenhouse gas emissions from ships, as discussed further below.
As of January 1, 2013, MARPOL made mandatory certain measures relating to energy efficiency for ships. All ships are now required to develop and implement Ship Energy Efficiency Management Plans, or SEEMPS, and new ships must be designed in compliance with minimum energy efficiency levels per capacity mile as defined by the Energy Efficiency Design Index, or EEDI.  Under these measures, by 2025, all new ships built will be 30% more energy efficient than those built in 2014.
We may incur costs to comply with these revised standards. Additional or new conventions, laws and regulations may be adopted that could require the installation of expensive emission control systems and could adversely affect our business, results of operations, cash flows and financial condition.
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Safety Management System Requirements
The SOLAS Convention was amended to address the safe manning of vessels and emergency training drills.  The Convention of Limitation of Liability for Maritime Claims, or the LLMC, sets limitations of liability for a loss of life or personal injury claim or a property claim against ship owners. We believe that our vessels are in substantial compliance with SOLAS and LLMC standards.
Under Chapter IX of the SOLAS Convention, or the International Safety Management Code for the Safe Operation of Ships and for Pollution Prevention, or the ISM Code, our operations are also subject to environmental standards and requirements. The ISM Code requires the party with operational control of a vessel to develop an extensive safety management system that includes, among other things, the adoption of a safety and environmental protection policy setting forth instructions and procedures for operating its vessels safely and describing procedures for responding to emergencies. We rely upon the safety management system that we and our technical management team have developed for compliance with the ISM Code.   The failure of a vessel owner or bareboat charterer to comply with the ISM Code may subject such party to increased liability, may decrease available insurance coverage for the affected vessels and may result in a denial of access to, or detention in, certain ports.
The ISM Code requires that vessel operators obtain a safety management certificate for each vessel they operate. This certificate evidences compliance by a vessel’s management with the ISM Code requirements for a safety management system. No vessel can obtain a safety management certificate unless its manager has been awarded a document of compliance, issued by each flag state, under the ISM Code.   We have obtained applicable documents of compliance for our offices and safety management certificates for all of our vessels for which the certificates are required by the IMO. The document of compliance and safety management certificate are renewed as required.
Amendments to the SOLAS Convention Chapter VII apply to vessels transporting dangerous goods and require those vessels be in compliance with the International Maritime Dangerous Goods Code, or IMDG Code. Effective January 1, 2018, the IMDG Code includes (1) updates to the provisions for radioactive material, reflecting the latest provisions from the International Atomic Energy Agency, (2) new marking, packing and classification requirements for dangerous goods, and (3) new mandatory training requirements.
The IMO has also adopted the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers, or STCW.  As of February 2017, all seafarers are required to meet the STCW standards and be in possession of a valid STCW certificate.  Flag states that have ratified SOLAS and STCW generally employ the classification societies, which have incorporated SOLAS and STCW requirements into their class rules, to undertake surveys to confirm compliance.
Furthermore, recent action by the IMO’s Maritime Safety Committee and United States agencies indicate that cybersecurity regulations for the maritime industry are likely to be further developed in the near future in an attempt to combat cybersecurity threats. For example, cyber-risk management systems must be incorporated by ship-owners and managers by 2021. This might cause companies to create additional procedures for monitoring cybersecurity, which could require additional expenses and/or capital expenditures.  The impact of such regulations is hard to predict at this time.
Pollution Control and Liability Requirements
The IMO has negotiated international conventions that impose liability for pollution in international waters and the territorial waters of the signatories to such conventions. For example, the IMO adopted an International Convention for the Control and Management of Ships’ Ballast Water and Sediments, or the BWM Convention, in 2004. The BWM Convention entered into force on September 9, 2017.  The BWM Convention requires ships to manage their ballast water to remove, render harmless, or avoid the uptake or discharge of new or invasive aquatic organisms and pathogens within ballast water and sediments.  The BWM Convention’s implementing regulations call for a phased introduction of mandatory ballast water exchange requirements, to be replaced in time with mandatory concentration limits, and require all ships to carry a ballast water record book and an international ballast Water management certificate. 
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On December 4, 2013, the IMO Assembly passed a resolution revising the application dates of BWM Convention so that the dates are triggered by the entry into force date and not the dates originally in the BWM Convention.  This, in effect, designates all vessels delivered before the entry into force date as "existing vessels" and allows for the installation of ballast water management systems on such vessels at the first International Oil Pollution Prevention, or IOPP, renewal survey following entry into force of the convention. The MEPC adopted updated guidelines for approval of ballast water management systems (G8) at MEPC 70. At MEPC 71, the schedule regarding the BWM Convention’s implementation dates was also discussed and amendments were introduced to extend the date existing vessels are subject to certain ballast water standards.  Ships over 400 gross tons generally must comply with a "D-1 standard", requiring the exchange of ballast water only in open seas and away from coastal waters.  The "D-2 standard" specifies the maximum amount of viable organisms allowed to be discharged, and compliance dates vary depending on the IOPP renewal dates. Depending on the date of the IOPP renewal survey, existing vessels must comply with the D-2 standard on or after September 8, 2019. For most ships, compliance with the D-2 standard will involve installing on-board systems to treat ballast water and eliminate unwanted organisms.  Ballast Water Management systems, which include systems that make use of chemical, biocides, organisms or biological mechanisms, or which alter the chemical or physical characteristics of the Ballast Water, must be approved in accordance with IMO Guidelines (Regulation D-3).  Costs of compliance with these regulations may be substantial.
Once mid-ocean ballast exchange ballast water treatment requirements become mandatory under the BWM Convention, the cost of compliance could increase for ocean carriers and may have a material effect on our operations. However, many countries already regulate the discharge of ballast water carried by vessels from country to country to prevent the introduction of invasive and harmful species via such discharges. The U.S., for example, requires vessels entering its waters from another country to conduct mid-ocean ballast exchange, or undertake some alternate measure, and to comply with certain reporting requirements.
The IMO also adopted the International Convention on Civil Liability for Bunker Oil Pollution Damage, or the Bunker Convention, to impose strict liability on ship owners (including the registered owner, bareboat charterer, manager or operator) for pollution damage in jurisdictional waters of ratifying states caused by discharges of bunker fuel. The Bunker Convention requires registered owners of ships over 1,000 gross tons to maintain insurance for pollution damage in an amount equal to the limits of liability under the applicable national or international limitation regime (but not exceeding the amount calculated in accordance with the LLMC).  With respect to non-ratifying states, liability for spills or releases of oil carried as fuel in ship’s bunkers typically is determined by the national or other domestic laws in the jurisdiction where the events or damages occur.
Ships are required to maintain a certificate attesting that they maintain adequate insurance to cover an incident. In jurisdictions such as the United States where the Bunker Convention has not been adopted, various legislative schemes or common law govern, and liability is imposed either on the basis of fault or on a strict-liability basis.
Anti‑Fouling Requirements
In 2001, the IMO adopted the International Convention on the Control of Harmful Anti‑fouling Systems on Ships, or the "Anti‑fouling Convention". The Anti‑fouling Convention, which entered into force on September 17, 2008, prohibits the use of organotin compound coatings to prevent the attachment of mollusks and other sea life to the hulls of vessels. Vessels of over 400 gross tons engaged in international voyages will also be required to undergo an initial survey before the vessel is put into service or before an International Anti‑fouling System Certificate is issued for the first time; and subsequent surveys when the anti‑fouling systems are altered or replaced. We have obtained Anti‑fouling System Certificates for all of our vessels that are subject to the Anti‑fouling Convention.
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Compliance Enforcement
Noncompliance with the ISM Code or other IMO regulations may subject the ship owner or bareboat charterer to increased liability, may lead to decreases in available insurance coverage for affected vessels and may result in the denial of access to, or detention in, some ports. The USCG and European Union authorities have indicated that vessels not in compliance with the ISM Code by applicable deadlines will be prohibited from trading in U.S. and European Union ports, respectively.  As of the date of this report, each of our vessels is ISM Code certified.   However, there can be no assurance that such certificates will be maintained in the future .   The IMO continues to review and introduce new regulations. It is impossible to predict what additional regulations, if any, may be passed by the IMO and what effect, if any, such regulations might have on our operations.
United States Regulations
The U.S. Oil Pollution Act of 1990 and the Comprehensive Environmental Response, Compensation and Liability Act
The U.S. Oil Pollution Act of 1990, or OPA, established an extensive regulatory and liability regime for the protection and cleanup of the environment from oil spills. OPA affects all "owners and operators" whose vessels trade or operate within the U.S., its territories and possessions or whose vessels operate in U.S. waters, which includes the U.S.’s territorial sea and its 200 nautical mile exclusive economic zone around the U.S.  The U.S. has also enacted the Comprehensive Environmental Response, Compensation and Liability Act, or CERCLA, which applies to the discharge of hazardous substances other than oil, except in limited circumstances, whether on land or at sea.  OPA and CERCLA both define “owner and operator” in the case of a vessel as any person owning, operating or chartering by demise, the vessel.  Both OPA and CERCLA impact our operations.
Under OPA, vessel owners and operators are "responsible parties" and are jointly, severally and strictly liable (unless the spill results solely from the act or omission of a third party, an act of God or an act of war) for all containment and clean-up costs and other damages arising from discharges or threatened discharges of oil from their vessels, including bunkers (fuel).  OPA defines these other damages broadly to include:
(i)   injury to, destruction or loss of, or loss of use of, natural resources and related assessment costs;
(ii)   injury to, or economic losses resulting from, the destruction of real and personal property;
(iii)   loss of subsistence use of natural resources that are injured, destroyed or lost;
(iv)   net loss of taxes, royalties, rents, fees or net profit revenues resulting from injury, destruction or loss of real or personal property, or natural resources;
 (v)   lost profits or impairment of earning capacity due to injury, destruction or loss of real or personal property or natural resources; and
(vi)   net cost of increased or additional public services necessitated by removal activities following a discharge of oil, such as protection from fire, safety or health hazards, and loss of subsistence use of natural resources.
OPA contains statutory caps on liability and damages; such caps do not apply to direct cleanup costs.  Effective December 21, 2015, the USCG adjusted the limits of OPA liability for non-tank vessels, edible oil tank vessels, and any oil spill response vessels, to the greater of $1,100 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 responsible party knows or has reason to know of the incident; (ii) reasonably cooperate and assist as requested in connection with oil removal activities; or (iii) without sufficient cause, comply with an order issued under the Federal Water Pollution Act (Section 311 (c), (e)) or the Intervention on the High Seas Act.
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CERCLA contains a similar liability regime whereby owners and operators of vessels are liable for cleanup, removal and remedial costs, as well as damages for injury to, or destruction or loss of, natural resources, including the reasonable costs associated with assessing the same, and health assessments or health effects studies. There is no liability if the discharge of a hazardous substance results solely from the act or omission of a third party, an act of God or an act of war. Liability under CERCLA is limited to the greater of $300 per gross ton or $5.0 million for vessels carrying a hazardous substance as cargo and the greater of $300 per gross ton or $500,000 for any other vessel. These limits do not apply (rendering the responsible person liable for the total cost of response and damages) if the release or threat of release of a hazardous substance resulted from willful misconduct or negligence, or the primary cause of the release was a violation of applicable safety, construction or operating standards or regulations.  The limitation on liability also does not apply if the responsible person fails or refused to provide all reasonable cooperation and assistance as requested in connection with response activities where the vessel is subject to OPA.
OPA and CERCLA each preserve the right to recover damages under existing law, including maritime tort law.  OPA and CERCLA both require owners and operators of vessels to establish and maintain with the USCG evidence of financial responsibility sufficient to meet the maximum amount of liability to which the particular responsible person may be subject. Vessel owners and operators may satisfy their financial responsibility obligations by providing a proof of insurance, a surety bond, qualification as a self-insurer or a guarantee. We comply and plan to comply going forward with the USCG’s financial responsibility regulations by providing applicable certificates of financial responsibility.
The 2010 Deepwater Horizon oil spill in the Gulf of Mexico resulted in additional regulatory initiatives or statutes, including higher liability caps under OPA, new regulations regarding offshore oil and gas drilling, and a pilot inspection program for offshore facilities.  However, several of these initiatives and regulations have been or may be revised.  For example, the U.S. Bureau of Safety and Environmental Enforcement’s, or BSEE, revised Production Safety Systems Rule, or PSSR, effective on December 27, 2018, modified and relaxed certain environmental and safety protections under the 2016 PSSR.  Additionally, the BSEE released proposed changes to the Well Control Rule, which could roll back certain reforms regarding the safety of drilling operations, and the U.S. President proposed leasing new sections of U.S. waters to oil and gas companies for offshore drilling, expanding the U.S. waters that are available for such activity over the next five years.  The effects of these proposals are currently unknown.  Compliance with any new requirements of OPA and future legislation or regulations applicable to the operation of our vessels could negatively impact the cost of our operations and adversely affect our business.
OPA specifically permits individual states to impose their own liability regimes with regard to oil pollution incidents occurring within their boundaries, provided they accept, at a minimum, the levels of liability established under OPA and some states have enacted legislation providing for unlimited liability for oil spills.  Many U.S. states that border a navigable waterway have enacted environmental pollution laws that impose strict liability on a person for removal costs and damages resulting from a discharge of oil or a release of a hazardous substance.  These laws may be more stringent than U.S. federal law.  Moreover, some states have enacted legislation providing for unlimited liability for discharge of pollutants within their waters, although in some cases, states which have enacted this type of legislation have not yet issued implementing regulations defining vessel owners’ responsibilities under these laws. The Company intends to comply with all applicable state regulations in the ports where the Company’s vessels call.
We currently maintain pollution liability coverage insurance in the amount of $1 billion per incident for each of our vessels. If the damages from a catastrophic spill were to exceed our insurance coverage, that could have an adverse effect on our business and results of operation.
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Other United States Environmental Initiatives
The U.S. Clean Air Act of 1970 (including its amendments of 1977 and 1990), or CAA, requires the EPA to promulgate standards applicable to emissions of volatile organic compounds and other air contaminants.  The CAA requires states to adopt State Implementation Plans, or SIPs, some of which regulate emissions resulting from vessel loading and unloading operations which may affect our vessels.
The U.S. Clean Water Act, or CWA, prohibits the discharge of oil, hazardous substances and ballast water in U.S. navigable waters unless authorized by a duly-issued permit or exemption, and imposes strict liability in the form of penalties for any unauthorized discharges.  The CWA also imposes substantial liability for the costs of removal, remediation and damages and complements the remedies available under OPA and CERCLA.  In 2015, the EPA expanded the definition of "waters of the United States", or WOTUS, thereby expanding federal authority under the CWA.  Following litigation on the revised WOTUS rule, in December 2018, the EPA and Department of the Army proposed a revised, limited definition of "waters of the United States".  In February 2018, the Army Corps of Engineers and EPA finalized a rule that would establish an applicability date of February 2020 for the 2015 Rule defining "waters of the United States", but two district courts subsequently enjoined and vacated this rule.  On March 8, 2019, the U.S. Federal Government withdrew its notices of appeal before the U.S. Courts of Appeals regarding lower court decisions enjoining and vacating the agencies’ 2018 Applicability Date Rule. The effect of this proposal on U.S. environmental regulations is still unknown.
The EPA and the USCG have also enacted rules relating to ballast water discharge, compliance with which requires the installation of equipment on our vessels to treat ballast water before it is discharged or the implementation of other port facility disposal arrangements or procedures at potentially substantial costs, and/or otherwise restrict our vessels from entering U.S. Waters.  The EPA will regulate these ballast water discharges and other discharges incidental to the normal operation of certain vessels within United States waters pursuant to the Vessel Incidental Discharge Act, or VIDA, which was signed into law on December 4, 2018 and will replace the 2013 Vessel General Permit, or VGP, program (which authorizes discharges incidental to operations of commercial vessels and contains numeric ballast water discharge limits for most vessels to reduce the risk of invasive species in U.S. waters, stringent requirements for exhaust gas scrubbers, and requirements for the use of environmentally acceptable lubricants) and current Coast Guard ballast water management regulations adopted under the U.S. National Invasive Species Act, or NISA, such as mid-ocean ballast exchange programs and installation of approved USCG technology for all vessels equipped with ballast water tanks bound for U.S. ports or entering U.S. waters.  VIDA establishes a new framework for the regulation of vessel incidental discharges under Clean Water Act (CWA), requires the EPA to develop performance standards for those discharges within two years of enactment, and requires the U.S. Coast Guard to develop implementation, compliance, and enforcement regulations within two years of EPA’s promulgation of standards.  Under VIDA, all provisions of the 2013 VGP and USCG regulations regarding ballast water treatment remain in force and effect until the EPA and U.S. Coast Guard regulations are finalized.  Non-military, non-recreational vessels greater than 79 feet in length must continue to comply with the requirements of the VGP, including submission of a Notice of Intent, or NOI, or retention of a PARI form and submission of annual reports. We have submitted NOIs for our vessels where required.  Compliance with the EPA, U.S. Coast Guard and state regulations could require the installation of ballast water treatment equipment on our vessels or the implementation of other port facility disposal procedures at potentially substantial cost or may otherwise restrict our vessels from entering U.S. waters.
European Union Regulations
In October 2009, the European Union amended a directive to impose criminal sanctions for illicit ship-source discharges of polluting substances, including minor discharges, if committed with intent, recklessly or with serious negligence and the discharges individually or in the aggregate result in deterioration of the quality of water. Aiding and abetting the discharge of a polluting substance may also lead to criminal penalties. The directive applies to all types of vessels, irrespective of their flag, but certain exceptions apply to warships or where human safety or that of the ship is in danger. Criminal liability for pollution may result in substantial penalties or fines and increased civil liability claims.  Regulation (EU) 2015/757 of the European Parliament and of the Council of 29 April 2015 (amending EU Directive 2009/16/EC) governs the monitoring, reporting and verification of carbon dioxide emissions from maritime transport, and, subject to some exclusions, requires companies with ships over 5,000 gross tonnage to monitor and report carbon dioxide emissions annually starting on January 1, 2018, which may cause us to incur additional expenses.
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The European Union has adopted several regulations and directives requiring, among other things, more frequent inspections of high-risk ships, as determined by type, age, and flag as well as the number of times the ship has been detained. The European Union also adopted and extended a ban on substandard ships and enacted a minimum ban period and a definitive ban for repeated offenses. The regulation also provided the European Union with greater authority and control over classification societies, by imposing more requirements on classification societies and providing for fines or penalty payments for organizations that failed to comply. Furthermore, the EU has implemented regulations requiring vessels to use reduced sulfur content fuel for their main and auxiliary engines. The EU Directive 2005/33/EC (amending Directive 1999/32/EC) introduced requirements parallel to those in Annex VI relating to the sulfur content of marine fuels. In addition, the EU imposed a 0.1% maximum sulfur requirement for fuel used by ships at berth in EU ports.
International Labour Organization
The International Labor Organization, or the ILO, is a specialized agency of the UN that has adopted the Maritime Labor Convention 2006, or MLC 2006. A Maritime Labor Certificate and a Declaration of Maritime Labor Compliance is required to ensure compliance with the MLC 2006 for all ships above 500 gross tons in international trade.  We believe that all our vessels are in substantial compliance with and are certified to meet MLC 2006.
Greenhouse Gas Regulation
Currently, the emissions of greenhouse gases from international shipping are not subject to the Kyoto Protocol to the United Nations Framework Convention on Climate Change, which entered into force in 2005 and pursuant to which adopting countries have been required to implement national programs to reduce greenhouse gas emissions with targets extended through 2020.  International negotiations are continuing with respect to a successor to the Kyoto Protocol, and restrictions on shipping emissions may be included in any new treaty. In December 2009, more than 27 nations, including the U.S. and China, signed the Copenhagen Accord, which includes a non-binding commitment to reduce greenhouse gas emissions.  The 2015 United Nations Climate Change Conference in Paris resulted in the Paris Agreement, which entered into force on November 4, 2016 and does not directly limit greenhouse gas emissions from ships.  On June 1, 2017, the U.S. President announced that the United States intends to withdraw from the Paris Agreement.  The timing and effect of such action has yet to be determined, but the Paris Agreement provides for a four-year exit process.
At MEPC 70 and MEPC 71, a draft outline of the structure of the initial strategy for developing a comprehensive IMO strategy on reduction of greenhouse gas emissions from ships was approved. In accordance with this roadmap, in April 2018, nations at the MEPC 72 adopted an initial strategy to reduce greenhouse gas emissions from ships.  The initial strategy identifies "levels of ambition" to reducing greenhouse gas emissions, including (1) decreasing the carbon intensity from ships through implementation of further phases of the EEDI for new ships; (2) reducing carbon dioxide emissions per transport work, as an average across international shipping, by at least 40% by 2030, pursuing efforts towards 70% by 2050, compared to 2008 emission levels; and (3) reducing the total annual greenhouse emissions by at least 50% by 2050 compared to 2008 while pursuing efforts towards phasing them out entirely.  The initial strategy notes that technological innovation, alternative fuels and/or energy sources for international shipping will be integral to achieve the overall ambition.  These regulations could cause us to incur additional substantial expenses.
The EU made a unilateral commitment to reduce overall greenhouse gas emissions from its member states from 20% of 1990 levels by 2020. The EU also committed to reduce its emissions by 20% under the Kyoto Protocol’s second period from 2013 to 2020.  As of January 2018, large ships calling at EU ports have been required to collect and publish data on carbon dioxide emissions and other information.
In the United States, the EPA issued a finding that greenhouse gases endanger the public health and safety, adopted regulations to limit greenhouse gas emissions from certain mobile sources, and proposed regulations to limit greenhouse gas emissions from large stationary sources. However, in March 2017, the U.S. President signed an executive order to review and possibly eliminate the EPA’s plan to cut greenhouse gas emissions.  The EPA or individual U.S. states could enact environmental regulations that could negatively affect our operations.
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Any passage of climate control legislation or other regulatory initiatives by the IMO, the EU, the U.S. or other countries where we operate, or any treaty adopted at the international level to succeed the Kyoto Protocol or Paris Agreement, that restricts emissions of greenhouse gases could require us to make significant expenditures which we cannot predict with certainty at this time. Even in the absence of climate control legislation, our business may be indirectly affected to the extent that climate change may result in sea level changes or certain weather events.
Vessel Security Regulations
Since the terrorist attacks of September 11, 2001 in the United States, there have been a variety of initiatives intended to enhance vessel security such as the U.S. Maritime Transportation Security Act of 2002, or MTSA. To implement certain portions of the MTSA, the USCG issued regulations requiring the implementation of certain security requirements aboard vessels operating in waters subject to the jurisdiction of the United States and at certain ports and facilities, some of which are regulated by the EPA.
Similarly, Chapter XI-2 of the SOLAS Convention imposes detailed security obligations on vessels and port authorities and mandates compliance with the International Ship and Port Facilities Security Code, or the ISPS Code. The ISPS Code is designed to enhance the security of ports and ships against terrorism. To trade internationally, a vessel must attain an International Ship Security Certificate, or ISSC, from a recognized security organization approved by the vessel’s flag state. Ships operating without a valid certificate may be detained, expelled from, or refused entry at port until they obtain an ISSC.  The various requirements, some of which are found in the SOLAS Convention, include, for example, on-board installation of automatic identification systems to provide a means for the automatic transmission of safety-related information from among similarly equipped ships and shore stations, including information on a ship’s identity, position, course, speed and navigational status; on-board installation of ship security alert systems, which do not sound on the vessel but only alert the authorities on shore; the development of vessel security plans; ship identification number to be permanently marked on a vessel’s hull; a continuous synopsis record kept onboard showing a vessel's history including the name of the ship, the state whose flag the ship is entitled to fly, the date on which the ship was registered with that state, the ship's identification number, the port at which the ship is registered and the name of the registered owner(s) and their registered address; and compliance with flag state security certification requirements.
The USCG regulations, intended to align with international maritime security standards, exempt non-U.S. vessels from MTSA vessel security measures, provided such vessels have on board a valid ISSC that attests to the vessel’s compliance with the SOLAS Convention security requirements and the ISPS Code. Future security measures could have a significant negative financial impact on us.  We intend to comply with the various security measures addressed by MTSA, the SOLAS Convention and the ISPS Code.
The cost of vessel security measures has also been affected by the escalation in the frequency of acts of piracy against ships, notably off the coast of Somalia, including the Gulf of Aden and Arabian Sea area.  Substantial loss of revenue and other costs may be incurred as a result of detention of a vessel or additional security measures, and the risk of uninsured losses could significantly and negatively affect our business. Costs may be incurred in taking additional security measures in accordance with Best Management Practices to Deter Piracy, notably those contained in the BMP5 industry standard.
Inspection by Classification Societies
The hull and machinery of every commercial vessel must be classed by a classification society authorized by its country of registry. The classification society certifies that a vessel is safe and seaworthy in accordance with the applicable rules and regulations of the country of registry of the vessel and SOLAS. Most insurance underwriters make it a condition for insurance coverage and lending that a vessel be certified "in class" by a classification society which is a member of the International Association of Classification Societies, the IACS.  The IACS has adopted harmonized Common Structural Rules, or the Rules, which apply to oil tankers and bulk carriers constructed on or after July 1, 2015.  The Rules attempt to create a level of consistency between IACS Societies.  All of our vessels are certified as being "in class" by all the applicable Classification Societies (e.g., American Bureau of Shipping, Lloyd's Register of Shipping, Bureau Veritas).
43


A vessel must undergo annual surveys, intermediate surveys, drydockings and special surveys. In lieu of a special survey, a vessel’s machinery may be on a continuous survey cycle, under which the machinery would be surveyed periodically over a five-year period. Every vessel is also required to be drydocked every 30 to 36 months for inspection of the underwater parts of the vessel.  If any vessel does not maintain its class and/or fails any annual survey, intermediate survey, drydocking or special survey, the vessel will be unable to carry cargo between ports and will be unemployable and uninsurable which could cause us to be in violation of certain covenants in our loan agreements. Any such inability to carry cargo or be employed, or any such violation of covenants, could have a material adverse impact on our financial condition and results of operations.
Risk of Loss and Liability Insurance
General
The operation of any cargo vessel includes risks such as mechanical failure, physical damage, collision, property loss, cargo loss or damage and business interruption due to political circumstances in foreign countries, piracy incidents, hostilities and labor strikes. In addition, there is always an inherent possibility of marine disaster, including oil spills and other environmental mishaps, and the liabilities arising from owning and operating vessels in international trade. OPA, which imposes virtually unlimited liability upon shipowners, operators and bareboat charterers of any vessel trading in the exclusive economic zone of the United States for certain oil pollution accidents in the United States, has made liability insurance more expensive for shipowners and operators trading in the United States market. We carry insurance coverage as customary in the shipping industry. However, not all risks can be insured, specific claims may be rejected and we might not be always able to obtain adequate insurance coverage at reasonable rates.
Hull & Machinery and War Risks Insurances
We maintain marine hull and machinery and war risks insurances, which include the risk of actual or constructive total loss, for all of our vessels.  Each of our vessels is covered up to at least fair market value with deductibles of $150,000 per vessel per incident.  We also maintain increased value coverage for our vessels.  Under this increased value coverage, in the event of total loss of a vessel, we will be able to recover the sum insured under the increased value policy in addition to the sum insured under the hull and machinery policy.  Increased value insurance also covers excess liabilities which are not recoverable under our hull and machinery policy by reason of under insurance.
Protection and Indemnity Insurance
Protection and indemnity insurance, provided by mutual protection and indemnity associations, or P&I Associations, covers our third-party liabilities in connection with our shipping activities. This includes third-party liability and other related expenses of injury or death of crew, passengers and other third parties, loss or damage to cargo, claims arising from collisions with other vessels, damage to other third-party property, pollution arising from oil or other substances, and salvage, towing and other related costs, including wreck removal. Protection and indemnity insurance is a form of mutual indemnity insurance, extended by protection and indemnity mutual associations, or “clubs”.
Our coverage is limited to approximately $3.1 billion, except for oil pollution liabilities which is limited to $1 billion.  The 13 P&I Associations that comprise the International Group insure approximately 90% of the world’s commercial tonnage and have entered into a pooling agreement to reinsure each association’s liabilities. The International Group’s website states that the Pool provides a mechanism for sharing all claims in excess of US$ 10 million up to, currently, approximately US$ 8.2 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 our claim records as well as the claim records of all other members of the individual associations and members of the shipping pool of P&I Associations comprising the International Group.
44


Permits and Authorizations
We are required by various governmental and quasi-governmental agencies to obtain certain permits, licenses and certificates with respect to our vessels. The kinds of permits, licenses and certificates required depend upon several factors, including the commodity transported, the waters in which the vessel operates, the nationality of the vessel's crew and the age of a vessel. We believe that we have obtained all permits, licenses and certificates currently required to permit our vessels to operate as planned. Additional laws and regulations, environmental or otherwise, may be adopted which could limit our ability to do business or increase the cost of us doing business in the future.
C.   Organizational Structure
Seanergy Maritime Holdings Corp. is the ultimate parent company of the following wholly-owned subsidiaries, either directly or indirectly, as of the date of this annual report:
Subsidiary
 
Jurisdiction of Incorporation
Seanergy Management Corp.
 
Republic of the Marshall Islands
Seanergy Shipmanagement Corp.
 
Republic of the Marshall Islands
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. Limited
 
Malta
Lord Ocean Navigation Co.
 
Liberia
Knight Ocean Navigation Co.
 
Liberia
Emperor Holding Ltd.
 
Republic of the Marshall Islands
Partner Shipping Co. Limited
 
Malta
Pembroke Chartering Services Limited
 
Malta
Martinique International Corp.
 
British Virgin Islands
Harbour Business International Corp.
 
British Virgin 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
Fellow Shipping Co.
 
Republic of the Marshall Islands
Champion Marine Co.
 
Liberia
Champion Marine Co.
 
Republic of the Marshall Islands

D.   Property, Plants and Equipment
We do not own any real estate property. We maintain our principal executive offices at Glyfada, Athens, Greece. Other than our vessels, we do not have any material property. See " Item 4.B. Business Overview - Our Current Fleet " and " Item 5. Operating and Financial Review and Prospects — B. Liquidity and Capital Resources – Loan Arrangements " .
45


ITEM 4A.
UNRESOLVED STAFF COMMENTS
None.
ITEM 5.
OPERATING AND FINANCIAL REVIEW AND PROSPECTS
The following discussion of the results of our operations and our financial condition should be read in conjunction with the financial statements and the notes to those statements included in "Item 18. Financial Statements".   This discussion contains forward-looking statements that involve risks, uncertainties, and assumptions.  Actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those set forth in "Item 3. Key Information–D. Risk Factors".
A.   Operating Results
Factors Affecting our Results of Operations Overview
We are an international shipping company specializing in the worldwide seaborne transportation of drybulk commodities. We currently operate a modern fleet of ten Capesize vessels, with a cargo-carrying capacity of approximately 1,748,581 dwt and an average fleet age of 10 years. 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.
On March 19, 2019, we effected a 1-for-15 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 March 20, 2019. 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 and Definitions for Analyzing Results of Operations

We use a variety of financial and operational terms and concepts. These include the following:
Ownership days. Ownership days are the total number of calendar days in a period during which we owned or chartered in on bareboat basis each vessel in our fleet. Ownership days are an indicator of the size of our fleet over a period and affect both the amount of revenues and the amount of expenses recorded during that period.
Available days. Available days are the number of ownership days less the aggregate number of days that our vessels are off-hire due to major repairs, dry-dockings, lay-up or special or intermediate surveys. The shipping industry uses available days to measure the aggregate number of days in a period during which vessels are available to generate revenues.
Operating days. Operating days are the number of available days in a period less the aggregate number of days that our vessels are off-hire due to unforeseen circumstances. Operating days include the days that our vessels are in ballast voyages without having fixed their next employment. The shipping industry uses operating days to measure the aggregate number of days in a period during which vessels could actually generate revenues.
Fleet utilization. Fleet utilization is the percentage of time that our vessels were generating revenues and is determined by dividing operating days by ownership days for the relevant period.
Off-hire. The period a vessel is not being chartered or is unable to perform the services for which it is required under a charter.
Dry-docking.   We periodically dry-dock each of our vessels for inspection, repairs and maintenance and any modifications to comply with industry certification or governmental requirements .
46


Time charter. A time charter is a contract for the use of a vessel for a specific period of time (period time charter) or for a specific voyage (trip time charter) during which the charterer pays substantially all of the voyage expenses, including port charges, bunker expenses, canal charges and other commissions. The vessel owner pays the vessel operating expenses, which include crew costs, provisions, deck and engine stores and spares, lubricants, insurance, maintenance and repairs. The vessel owner is also responsible for each vessel's dry-docking and intermediate and special survey costs. Time charter rates are usually 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.
Bareboat charter.   A bareboat charter is generally a contract pursuant to which a vessel owner provides its vessel to a charterer for a fixed period of time at a specified daily rate. Under a bareboat charter, the charterer assumes responsibility for all voyage and vessel operating expenses and risk of operation.

Voyage charter.  A voyage charter is generally a contract to carry a specific cargo from a load port to a discharge port for an agreed-upon total amount. Under voyage charters, voyage expenses, such as port charges, bunker expenses, canal charges and other commissions, are paid by the vessel owner, who also pays vessel operating expenses.
TCE.  Time charter equivalent, or TCE, rate is defined as our net revenue less voyage expenses during a period divided by the number of our operating days during the period. Voyage expenses include port charges, bunker expenses, canal charges and other commissions.
Daily Vessel Operating Expenses. Daily Vessel Operating Expenses are calculated by dividing vessel operating expenses less pre-delivery expenses by ownership days for the relevant time periods. Vessel operating expenses include crew costs, provisions, deck and engine stores, lubricants, insurance, maintenance and repairs. Vessel operating expenses before pre-delivery expenses exclude one-time pre-delivery and pre-joining expenses associated with initial crew manning and supply of stores of Company's vessels upon delivery.
Principal Factors Affecting Our Business
The principal factors that affect our financial position, results of operations and cash flows include the following:

·
number of vessels owned and operated;

· voyage charter rates;


· time charter trip rates;

· period time charter rates;


· the nature and duration of our voyage charters;

· vessels repositioning;


· vessel operating expenses and direct voyage costs;


47


·
maintenance and upgrade work;

·
the age, condition and specifications of our vessels;

·
issuance of our common shares and other securities;

·
amount of debt obligations; and

·
financing costs related to debt obligations.
We are also affected by the types of charters we enter into.  Vessels operating on 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, either on trip time charters or voyage charters, during periods characterized by favorable market conditions .
Vessels operating in the spot charter market generate revenues that are less predictable, but can yield increased 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 in case of voyage charters. All of our vessels in 2017 and 2016 operated in the spot charter market, except for the Lordship and the Partnership, while during 2018 the Championship was also time-chartered on a long-term employment.
Results of Operations

Year ended December 31, 2018 as compared to year ended December 31, 201 7

(In thousands of U.S. Dollars, except for share and per share data)
 
Year ended December 31,
   
Change
 
 
 
2018
   
2017
   
Amount
   
%
 
Revenues:
                       
Vessel revenue, net
   
91,520
     
74,834
     
16,686
     
22
%
 
                               
Expenses:
                               
Voyage expenses
   
(40,184
)
   
(34,949
)
   
(5,235
)
   
15
%
Vessel operating expenses
   
(20,742
)
   
(19,598
)
   
(1,144
)
   
6
%
Management fees
   
(1,042
)
   
(1,016
)
   
(26
)
   
3
%
General and administrative expenses
   
(6,500
)
   
(5,081
)
   
(1,419
)
   
28
%
Depreciation and amortization
   
(11,510
)
   
(11,388
)
   
(122
)
   
1
%
Impairment loss
   
(7,267
)
   
-
     
(7,267
)
   
-
 
Operating income
   
4,275
     
2,802
     
1,473
     
53
%
Other expenses:
                               
Interest and finance costs
   
(25,296
)
   
(17,399
)
   
(7,897
)
   
45
%
Gain on debt refinancing
   
-
     
11,392
     
(11,392
)
   
(100
%)
Other, net
   
(21
)
   
(30
)
   
9
     
(30
%)
Total other expenses, net:
   
(25,317
)
   
(6,037
)
   
(19,280
)
   
319
%
Net loss before income taxes
   
(21,042
)
   
(3,235
)
   
(17,807
)
   
550
%
Income taxes
   
(16
)
   
-
     
(16
)
   
-
 
Net loss
   
(21,058
)
   
(3,235
)
   
(17,823
)
   
551
%
 
                               
Net loss per common share, basic
   
(8.40
)
   
(1.35
)
               
Weighted average number of common shares outstanding, basic
   
2,507,087
     
2,389,719
                 
 
                               

48


Vessel Revenue, Net – The increase was attributable to the increase in prevailing charter rates and the increase in operating days. We had 3,902 operating days in 2018 as compared to 3,837 operating days in 2017. We acquired an additional Capesize vessel in November 2018. The TCE rate increased in 2018 by 27% to $13,156 compared to $10,395 in 2017. TCE rate is a non-GAAP measure.  Please see the reconciliation below of TCE rate to net revenues from vessels, the most directly comparable U.S. GAAP measure.
Voyage Expenses – The increase was primarily attributable to the increase in ownership days and higher fuel prices. We had 3,931 ownership days in 2018 as compared to 3,864 ownership days in 2017. We acquired an additional Capesize vessel in November 2018.
Vessel Operating Expenses - The increase was primarily attributable to the increase in ownership days. We had 3,931 ownership days in 2018 as compared to 3,864 ownership days in 2017.
Management Fees - The increase was attributable to the increase in ownership days. We had 3,931 ownership days in 2018 as compared to 3,864 ownership days in 2017.
General and Administrative Expenses – The increase is mainly attributable to $1.3 million of stock based compensation amortization in 2018 for shares granted pursuant to our 2011 Equity Incentive Plan and to others, compared to $0.6 million of respective stock based compensation amortization in 2017 .
Depreciation and Amortization – The increase was primarily attributable to the increase in ownership days.
Impairment loss – The increase was attributable to the impairment loss of $7.3 million recorded in respect with the Gladiatorship and Guardianship that were both sold in the fourth quarter of 2018.
Interest and Finance Costs - The increase was primarily attributable to the ATB loan facility entered into in May 2017, the Second Jelco Loan Facility entered into in May 2017 with Jelco, the Third Jelco Note, a convertible note with Jelco entered into in September 2017 and the Third Jelco Loan Facility, entered into April 10, 2018. The weighted average interest rate on our outstanding debt and convertible notes for the years ended 2018 and 2017 was approximately 7.54% and 5.69%, respectively.
Gain on debt refinancing - The $11.4 million gain was recognized following the early settlement and refinancing of our Natixis loan facility pursuant to the March 7, 2017 settlement agreement. No such gain was recognized in 2018.
49


Year ended December 31, 2017 as compared to year ended December 31, 201 6

(In thousands of U.S. Dollars, except for share and per share data)
                       
   
Year ended December 31,
   
Change
 
 
 
2017
   
2016
   
Amount
   
%
 
Revenues:
                       
Vessel revenue, net
   
74,834
     
34,662
     
40,172
     
116
%
 
                               
Expenses:
                               
Voyage expenses
   
(34,949
)
   
(21,008
)
   
(13,941
     
66
%
Vessel operating expenses
   
(19,598
)
   
(14,251
)
   
(5,347
)
   
38
%
Management fees
   
(1,016
)
   
(895
)
   
(121
)
   
14
%
General and administrative expenses
   
(5,081
)
   
(4,134
)
   
(947
)
   
23
%
Depreciation and amortization
   
(11,388
)
   
(9,087
)
   
(2,301
)
   
25
%
Operating income/(loss)
   
2,802
     
(14,713
)
   
17,515
     
119
%
Other expenses:
                               
Interest and finance costs
   
(17,399
)
   
(9,851
)
   
(7,548
)
   
77
%
Gain on debt refinancing
   
11,392
     
-
     
11,392
     
-
 
Other, net
   
(30
)
   
(25
)
   
(5
)
   
20
%
Total other expenses, net:
   
(6,037
)
   
(9,876
)
   
3,839
     
39
%
Net loss before income taxes
   
(3,235
)
   
(24,589
)
   
21,354
     
87
%
Income taxes
   
-
     
(34
)
   
34
     
100
%
Net loss
   
(3,235
)
   
(24,623
)
   
21,388
     
87
%
 
                               
Net loss per common share, basic
   
(1.35
)
   
(17.97
)
               
Weighted average number of common shares outstanding, basic
   
2,389,719
     
1,370,200
                 

Vessel Revenue, Net - The increase was attributable to the increase in prevailing charter rates and the increase in operating days.  We had 3,837 operating days in 2017 as compared to 2,745 operating days in 2016. The TCE rate increased in 2017 by 114% to $11,945 compared to $5,587 for 2016. TCE rate is a non-GAAP measure.  Please see the reconciliation below of TCE rate to net revenues from vessels, the most directly comparable U.S. GAAP measure.
Voyage Expenses - The increase was primarily attributable to the increase in ownership days and higher fuel prices. We had 3,864 ownership days in 2017 as compared to 2,978 ownership days in 2016. We acquired the Partnership in May 2017, and 2017 was the first full year of operations for the Lordship and Knightship .
Vessel Operating Expenses - The increase was primarily attributable to the increase in ownership days. We had 3,864 ownership days in 2017 as compared to 2,978 ownership days in 2016. We acquired a Capesize vessel in May 2017 .
Management Fees - The increase was attributable to the increase in ownership days. We had 3,864 ownership days in 2017 as compared to 2,978 ownership days in 2016. We acquired a Capesize vessel in May 2017.  The increase was partly offset by a decrease in monthly management fee. The monthly management fee per vessel payable to our technical manager is $8 as of January 1, 2017, compared to $9.65 up to December 31, 2016.
General and Administrative Expenses – The increase is primarily attributable to an $0.4 million increase in remuneration expenses in 2017 compared to 2016 and to $0.25 million of professional services in 2017 to an unaffiliated third party related to the Company's internet-based investor relations efforts.
50


Depreciation and Amortization – The increase was primarily attributable to the increase in ownership days.
Interest and Finance Costs - The increase was primarily attributable to our new ATB Loan Facility, the Second Jelco Loan Facility, and the Third Jelco Note, offset with the early settlement of our Natixis loan facility. The weighted average interest rate on our outstanding debt and convertible notes for the years ended 2017 and 2016 was approximately 5.69% and 4.05%, respectively.
Gain on debt refinancing - The $11.4 million gain was recognized following the early settlement and refinancing of our Natixis loan facility pursuant to the March 7, 2017 settlement agreement.
Performance Indicators
The figures shown below are non-GAAP statistical ratios used by management to measure performance of our vessels. For the "Fleet Data" figures, there are no comparable U.S. GAAP measures.

   
Year Ended December 31,
 
Fleet Data:
 
2018
   
2017
   
2016
 
                 
Ownership days
   
3,931
     
3,864
     
2,978
 
Available days(1)
   
3,918
     
3,851
     
2,755
 
Operating days(2)
   
3,902
     
3,837
     
2,745
 
Fleet utilization
   
99
%
   
99
%
   
92
%
Fleet utilization excluding dry-docking off hire days
   
100
%
   
100
     
100
%
 
                       
Average Daily Results:
                       
TCE rate(3)
 
$
13,156
   
$
10,395
   
$
4,974
 
Daily Vessel Operating Expenses(4)
 
$
5,198
   
$
4,985
   
$
4,618
 
 
                       

(1)
During the year ended December 31, 2018, we incurred 16 off-hire days. During the year ended December 31, 2017, we incurred 13 off-hire days for one vessel drydocking. During the year ended December 31, 2016, we incurred 173 off-hire days for a vessel lay-up and 64 off-hire days for two vessel surveys.
   
(2)
During the year ended December 31, 2018, we incurred 16 off-hires days due to other unforeseen circumstances. During the year ended December 31, 2017, we incurred 13 off-hires days due to other unforeseen circumstances.
   
(3)
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 U.S. 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.

51


   
Year Ended December 31,
 
(In thousands of US Dollars, except operating days and TCE rate)
 
2018
   
2017
   
2016
 
                   
Net revenues from vessels
 
$
91,520
   
$
74,834
   
$
34,662
 
Voyage expenses
   
(40,184
)
   
(34,949
)
   
(21,008
)
Net operating revenues
 
$
51,336
   
$
39,885
   
$
13,654
 
Operating days
   
3,902
     
3,837
     
2,745
 
Daily time charter equivalent rate
 
$
13,156
   
$
10,395
   
$
4,974
 

 (4)
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 U.S. 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,
 
 
2018
 
2017
 
2016
 
 
 
 
 
 
 
 
Vessel operating expenses
 
$
20,742
 
 
$
19,598
 
 
$
14,251
 
Less: Pre-delivery expenses
 
 
(309
)
 
 
(337
)
 
 
(499
)
Vessel operating expenses before pre-delivery expenses
 
 
20,433
 
 
 
19,261
 
 
 
13,752
 
Ownership days
 
 
3,931
 
 
 
3,864
 
 
 
2,978
 
Daily Vessel Operating Expenses
 
$
5,198
 
 
$
4,985
 
 
$
4,618
 

Recent Accounting Pronouncements

Refer to Note 2 of the consolidated financial statements included in this annual report.

Critical Accounting Policies and Estimates

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. Historically, the market values of vessels have experienced volatility, which from time to time may be substantial.  As a result, the charter-free market value of certain of our vessels may have declined below those vessels' carrying value, even though we would not impair those vessels' carrying value under our accounting impairment policy . The table set forth below indicates (i) the carrying value of each of our vessels as of December 31, 2018 and 2017, respectively, 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 $10 million and $24.9 million, as of December 31, 2018 and 2017, respectively, represents the amount by which we believe we would have had to reduce our net income if we sold all of such vessels, on industry standard terms, in cash transactions, and to a willing buyer where we are not under any compulsion to sell, and where the buyer was not under any compulsion to buy as of December 31, 2018 and 2017, respectively. For purposes of this calculation, we assumed that the vessels would be sold at a price that reflected our estimate of their charter-free market values as of December 31, 2018 and 2017, respectively.
52

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

·
reports by industry analysts and data providers that focus on our industry and related dynamics affecting vessel values ;

·
news and industry reports of similar vessel sales ;

·
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
 
Year Built
 
Dwt
 
Carrying Value as of
December 31, 2018
(in million of U.S. dollars)
 
Carrying Value as of
December 31, 2017
(in million of U.S. dollars)
 
Fellowship
 
2010
 
179,701
 
28.6
 
-
 
Championship
 
2011
 
179,238
 
36.7
*
38.3
*
Partnership
 
2012
 
179,213
 
30.7
 
32.0
 
Knightship
 
2010
 
178,978
 
19.1
 
19.7
 
Lordship
 
2010
 
178,838
 
19.0
 
19.7
 
Gloriuship
 
2004
 
171,314
 
14.5
 
15.3
*
Leadership
 
2001
 
171,199
 
13.5
*
14.5
*
Geniuship
 
2010
 
170,057
 
24.4
 
25.4
 
Premiership
 
2010
 
170,024
 
26.2
 
27.4
*
Squireship
 
2010
 
170,018
 
30.5
*
31.9
*
Guardianship
 
2011
 
56,884
 
-
 
15.6
*
Gladiatorship
 
2010
 
56,819
 
-
 
14.9
*
TOTAL
 
 
 
 
 
243.2
 
254.7
 

*
Indicates dry bulk carrier vessels for which we believe, as of December 31, 2018 and 2017, respectively, the basic charter-free market value was 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".
53


Impairment of long-lived assets

We review our long-lived assets for impairment whenever events or changes in circumstances, such as prevailing market conditions, obsolesce or damage to the asset, business plans to dispose a vessel earlier than the end of its useful life and other business plans, indicate that the carrying amount of the assets, plus unamortized dry-docking costs, may not be recoverable. The volatile market conditions in the drybulk market with decreased charter rates and decreased vessel market values are conditions we consider to be 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 expected to be generated by the use of the vessel and/or 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 and use of available market data . The undiscounted projected operating cash inflows are determined by considering the charter revenues from existing time charters for the fixed fleet days and an estimated daily time charter equivalent for the non-fixed days (based on a combination of one year charter rates estimate and the average of the trailing 10-year historical charter rates, excluding the peak and trough years, available for each type of vessel) adjusted for commissions, expected off hires due to scheduled vessels' maintenance and estimated unexpected breakdown off hires. The undiscounted projected operating cash outflows are determined by applying various assumptions regarding vessel operating expenses, management fees and scheduled vessels' maintenance.
The Company recognized an impairment loss of $7,267 for the twelve month period ended December 31, 2018 with respect to the two vessels Gladiatorship and Guardianship that were sold in the fourth quarter of 2018. Our assessment concluded that no impairment loss should be recorded as of December 31, 2017 and 2016.
Although we believe that the assumptions used to evaluate potential asset impairment are based on historical trends and are reasonable and appropriate, such assumptions are highly subjective. To minimize such subjectivity, our analysis for the year ended December 31, 2018 also involved sensitivity analysis to the model input we believe is more important and likely to change. In particular, in terms of our estimates for the time charter equivalent for the unfixed period, we use a combination of one-year charter rates estimate and the average of the trailing 10-year historical charter rates, excluding the trough years 2015 and 2016, available for each type of vessel. Although the trailing 10-year historical charter rates, excluding the trough years 2015 and 2016, cover at least a full business cycle, we sensitized our model with regards to long-term historical charter rate assumptions for the unfixed period beyond the first year. Our sensitivity analysis revealed that, to the extent that going forward the 10-year historical charter rates, excluding the trough years 2015 and 2016, would not decline by more than 46% for Capesize vessels and we would not require to recognize impairment. Our analysis for the year ended December 31, 2017 also involved sensitivity analysis to the model input we believe was more important and likely to change. In particular, in terms of our estimates for the time charter equivalent for the unfixed period, we used a combination of one year charter rates estimate and the average of the trailing 10-year historical charter rates, excluding the peak and trough years 2008, 2015 and 2016, available for each type of vessel. Although the trailing 10-year historical charter rates, excluding the peak and trough years 2008, 2015 and 2016, covered at least a full business cycle, we sensitized our model with regards to long-term historical charter rate assumptions for the unfixed period beyond the first year. Our sensitivity analysis revealed that, to the extent that going forward the 10-year historical charter rates, excluding the peak and trough years 2008, 2015 and 2016, would not decline by more than 46% and 23% for Capesize vessels and Supramax vessels, respectively, we would not require to recognize impairment.
Vessel depreciation

Depreciation is computed using the straight-line method over the estimated useful life of the vessels (25 years), after considering the estimated salvage value. 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 for other reasons. Revisions of salvage values affect the depreciable amount of the vessels and affect the depreciation expense in the period of the revision and future periods .
54


Revenue from Contracts with Customers

On January 1, 2018, we adopted ASU 2014-09 (ASC 606) Revenue from Contracts with Customers , issued by the FASB in May 2016 and as further amended, and elected to apply the modified retrospective method only to contracts that were not completed at January 1, 2018, the date of initial application. The prior period comparative information has not been restated and continues to be reported under the accounting guidance in effect for those periods. Under the new guidance, voyage revenue is recognized from the time when the vessel arrives at the load port until completion of cargo discharge. Previously, voyage revenue was recognized from the latter of the cargo discharge of the previous voyage and the signing of the next charter or date of the new charter party until completion of cargo discharge. This change results in revenue being recognized over a shorter voyage time period, which may cause additional volatility in revenues and earnings between reporting periods.

ASC 606 outlines a single comprehensive model for entities to use in accounting for revenue from contracts with customers and supersedes most legacy revenue recognition guidance. The core principle of the guidance in ASC 606 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services by applying the following steps: (1) identify the contract(s) with a customer; (2) identify the performance obligations in each contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in each contract; and (5) recognize revenue when (or as) the entity satisfies a performance obligation. Incremental costs of obtaining a contract with a customer and contract's fulfillment costs should be capitalized and amortized over the voyage period, if certain criteria are met – for incremental costs if only they are chargeable to the customer and for contract's fulfillment costs if each of the following criteria is met: (i) they relate directly to the contract, (ii) they generate or enhance the entity's resources that shall be used in the performance obligation satisfaction and (iii) are expected to be recovered. Further, in case of incremental costs, entities may elect to use a practical expedient not to capitalize them when the amortization period (voyage period) is less than one year.

The effect of the adoption of the new accounting standard resulted in a cumulative adjustment of $1.8 million in the opening balance of our accumulated deficit for the fiscal year 2018, as a result of the change in the recognition method of revenues related to voyage charters and their fulfillment costs. Having not adopted ASC 606, our (i) vessel revenues would have been $95.2 million for the year ended December 31, 2018, (ii) voyage expenses would have been $40.2 million for the year ended December 31, 2018 and (iii) commissions would have been $3.4 million as of December 31, 2018. Having not adopted ASC 606, our net loss would have been $0.4 million less for the year ended December 31, 2018, or $0.14 basic and diluted earnings per share.

Accounting for Revenue and Related Expenses

We generate our revenues from chartering our vessels under time or bareboat charter agreements and voyage charter agreements.

Time and bareboat charters:  Vessels are chartered when a contract exists and the vessel is delivered (commencement date) to the charterer, for a fixed period of time, at rates that are generally determined in the main body of charter parties and the relevant voyage expenses burden the charterer (i.e. port dues, canal tolls, pilotages and fuel consumption). Upon delivery of the vessel, the charterer has the right to control the use of the vessel (under agreed prudent operating practices) as it has the enforceable right to: (i) decide the delivery and redelivery time of the vessel; (ii) arrange the ports from which the vessel shall pass; (iii) give directions to the master of the vessel regarding vessel's operations (i.e. speed, route, bunkers purchases, etc.); (iv) sub-charter the vessel and (v) consume any income deriving from the vessel's charter. Time and bareboat charter agreements are accounted for as operating leases, ratably on a straight line over the duration of the charter basis in accordance with ASC 842. Any off-hires are recognized as incurred.
55


The charterer may charter the vessel with or without owner's crew and other operating services (time and bareboat charter, respectively). In the case of time charter agreements, the agreed hire rates include compensation for part of the agreed crew and other operating services provided by the owner (non-lease components). We elected to account for the lease and non-lease component of time charter agreements as a combined component in our financial statements, having taken into account that the non-lease component would be accounted for ratably on a straight-line basis over the duration of the time charter in accordance with ASC 606 and that the lease component in considered as the predominant. In this respect, we qualitative assessed that more value is ascribed to the vessel rather than to the services provided under the time charter agreements.

Apart from the agreed hire rates, the owner may be entitled to an additional income, such as ballast bonus which is considered as reimbursement of owner's expenses and is recognized together with the lease component over the duration of the charter. The related ballast costs incurred over the period between the charter party date or the prior redelivery date (whichever is latest) and the delivery date to the charterer are deferred and amortized on a straight line over the duration of the charter.

Spot charters:  Spot, or voyage, charter is a charter where a contract is made in the spot market for the use of a vessel for a specific voyage for a specified freight rate per ton, regardless of time to complete. A voyage is deemed to commence upon the loading of the cargo and is deemed to end upon the completion of discharge of the current cargo. Spot charter payments are due upon discharge of the cargo. We have determined that under our spot charters, the charterer has no right to control any part of the use of the vessel. Thus, our spot charters do not contain lease and are accounted for in accordance with ASC 606. More precisely, we satisfy our single performance obligation to transfer cargo under the contract over the voyage period. Thus, spot charter revenues are recognized ratably over the loading to discharge period (voyage period).

Voyage related and vessel operating costs:  Voyage expenses primarily consist of commissions, port dues, canal and bunkers. Vessel operating costs include crew costs, provisions, deck and engine stores and spares, lubricants, insurance, maintenance and repairs including dry-docking costs. Under spot charter arrangements, voyage expenses that are unique to a particular charter are paid for by us. Under a time charter, specified voyage costs, such as bunkers and port charges are paid by the charterer and other non-specified voyage expenses, such as commissions, are paid by us. Under a bareboat charter, the charterer assumes responsibility for all voyage and vessel operating expenses and risk of operation. Commissions are expensed as incurred. Contract fulfillment costs (mainly consisting of bunker expenses and port dues) for spot charters are recognized as a deferred contract cost and amortized over the voyage period when the relevant criteria under ASC 340-40 are met or are expensed as incurred. All vessel operating expenses are expensed as incurred.

Deferred revenue:  Deferred revenue primarily relates to cash advances received from charterers. These amounts are recognized as revenue over the charter period.

Leases

In February 2016, the FASB issued ASU No. 2016-02, Leases (ASC 842), as amended, which requires lessees to recognize most leases on the balance sheet. This is expected to increase both reported assets and liabilities. The new lease standard does not substantially change lessor accounting, neither changes the lease classification criteria. For public companies, the standard is effective for the first interim reporting period within annual periods beginning after December 15, 2018, although early adoption is permitted.

Lessees and lessors will be required to apply the new standard at the beginning of the earliest period presented in the financial statements in which they first apply the new guidance, using a modified retrospective transition method. Under that transition method, an entity initially applies the new leases standard (subject to specific transition requirements and optional practical expedients) at the beginning of the earliest period presented in the financial statements (which is January 1, 2017, for calendar-year-end public business entities that adopt the new leases standard on January 1, 2019).
56



In July 2018, the FASB issued ASU No. 2018-11, Leases (ASC 842) – Targeted Improvements . The amendments in this Update: (i) provide entities with an additional (and optional) transition method to adopt the new lease requirements by allowing entities to initially apply the requirements at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption; and, (ii) provide lessors with a practical expedient, by class of underlying asset, to not separate non-lease components from the associated lease component and, instead, to account for those components as a single component if the non-lease components otherwise would be accounted for under the new revenue guidance (ASC 606) and both of the following are met: (a) the timing and pattern of transfer of the non-lease component(s) and associated lease component are the same and (b) the lease component, if accounted for separately, would be classified as an operating lease. If the non-lease component or components associated with the lease component are the predominant component of the combined component, an entity is required to account for the combined component in accordance with ASC 606.  Otherwise, the entity should account for the combined component as an operating lease in accordance with ASC 842.

We elected to early adopt ASU No. 2016-02, Leases (ASC 842), as amended, in the second quarter of 2018 with adoption reflected as of January 1, 2018, using the modified retrospective method, and elected to apply the additional and optional transition method to existing leases at the beginning of the period of adoption of January 1, 2018. The prior period comparative information has not been restated and continues to be reported under the accounting guidance in effect for those periods (ASC 840), including the disclosure requirements. Under the new guidance, we elected certain practical expedients: (i) a package of practical expedients which does not require us to reassess: (1) whether any expired or existing contracts are or contain leases; (2) lease classification for any expired or existing leases; and (3) whether initial direct costs for any expired or existing leases would qualify for capitalization under ASC 842; (ii) to account for non-lease components (primarily crew and maintenance services) of time charters as a single lease component as the timing and pattern of transfer of the non-lease components and associated lease component are the same, the lease components, if accounted for separately would be classified as an operating lease, and such non-lease components are not predominant components of the combined component. We qualitatively assessed that more value is ascribed to the vessel rather than to the services provided under the time charter agreements. Therefore, the Company accounts for the combined component as a lease under ASC 842. We did not have any lease arrangements in which it was a lessee at the adoption date.

Sale-leaseback transactions

In accordance with ASC 842, we, as seller-lessee, determine whether the transfer of an asset should be accounted for as a sale in accordance with ASC 606. The existence of an option for the seller-lessee to repurchase the asset precludes the accounting for the transfer of the asset as a sale unless both of the following criteria are met: (1) the exercise price of the option is the fair value of the asset at the time the option is exercised and (2) there are alternative assets, substantially the same as the transferred asset, readily available in the marketplace; and the classification of the leaseback as a finance lease or a sales-type lease, precludes the buyer-lessor from obtaining control of the asset. The existence of an obligation for us, as seller-lessee, to repurchase the asset precludes accounting for the transfer of the asset as sale as the transaction would be classified as a financing arrangement by us as it effectively retains control of the underlying asset.

If the transfer of the asset meets the criteria of sale, we as seller-lessee recognize the transaction price for the sale when the buyer-lessor obtains control of the asset, derecognizes the carrying amount of the underlying asset and accounts for the lease in accordance with ASC 842. If the transfer does not meet the criteria of sale, we do not derecognize the transferred asset, account for any amounts received as a financing arrangement and recognize the difference between the amount of consideration received and the amount of consideration to be paid as interest.
57

B.   Liquidity and Capital Resources
Our principal source of funds has been our operating cash inflows, long-term borrowings from banks and our Sponsor, and equity provided by the capital markets and our Sponsor. Our principal use of funds has primarily been capital expenditures to establish our fleet, maintain the quality of our drybulk vessels, comply with international shipping standards and environmental laws and regulations, fund working capital requirements, and make principal repayments and interest payments on our outstanding debt obligations.
Our funding and treasury activities are conducted in accordance to corporate policies to maximize investment returns while maintaining appropriate liquidity for both our short- and long-term needs. This includes arranging borrowing facilities on a cost-effective basis. Cash and cash equivalents are held primarily in U.S. dollars, with minimal amounts held in Euros.
As of December 31, 2018, we had cash and cash equivalents of $6.7 million, as compared to $8.9 million as of December 31, 2017.
Working capital is equal to current assets minus current liabilities, including the current portion of long-term debt. As of December 31, 2018, we had a working capital deficit of $19.4 million as compared to a working capital deficit of $15 million as of December 31, 2017. Our working capital was primarily affected by the decrease in our cash and cash equivalents balance due to debt installment payments and cash paid for interest as well as an increase in year-end balances to our trade accounts payable.
As of December 31, 2018, we had total indebtedness under our credit facilities of $218 million, excluding unamortized financing fees, as compared to $213.8 million as of December 31, 2017 .
Our short-term liquidity commitments, as of December 31, 2018, primarily relate to debt and interest repayments of approximately $36.3 million under our credit facilities and convertible notes due in 2019. We expect to fund these commitments with cash on hand and cash inflows from operations. Our cash flow projections indicate that cash on hand and cash to be provided by operating activities will be sufficient to cover the liquidity needs that become due in the twelve-month period ending one year after the financial statements' issuance.
Our long-term liquidity commitments primarily relate to the repayment of our long-term debt balances under our credit facilities and convertible notes issued to Jelco. Please see "– Loan Arrangements".  We expect to fund these commitments with cash on hand, refinancing of existing financing arrangements and/or public and private debt and equity transactions in the capital markets.
Cash Flows
(In thousands of US Dollars)
 
Year ended December 31,
 
 
 
2018
   
2017
   
2016
 
Cash Flow Data:
                 
Net cash provided by / (used in) operating activities
   
5,723
     
2,782
     
(15,339
)
Net cash used in investing activities
   
(8,827
)
   
(32,992
)
   
(40,779
)
Net cash (used in) / provided by financing activities
   
(491
)
   
25,341
     
68,672
 



58


Year ended December 31, 2018, as compared to year ended December 31, 2017

Operating Activities:   Net cash provided by operating activities amounted to $5.7 million in 2018 , consisting of net income after non-cash items of $4.5 million plus an increase in working capital of $1.2 million.  Net cash provided by operating activities amounted to $2.8 million in 2017, consisting of net income after non-cash items of $0.1 million plus a decrease in working capital of $2.7 million.
Investing Activities: The 2018 cash outflow primarily resulted from the acquisition of our vessel Fellowship in November 2018 payments related to scrubbers and expenses incurred in respect to the new office space. The 2018 cash outflow was offset by the cash inflow from the sale of our vessels Gladiatorship and Guardianship in October 2018 and November 2018 respectively.
Financing Activities : The 2018 cash inflow resulted mainly from proceeds of $24.5 million obtained from the Wilmington Trust Loan Facility, proceeds of $18.6 million obtained from the June 28, 2018 Hanchen Limited financial liability , proceeds of $23.5 million obtained from the Cargill financial liability on November 7, 2018 and proceeds of $2 million from Jelco loan facility dated April 10, 2018. The 2018 cash inflow was offset by debt repayments of: $32 million with respect to the Northern Shipping Funds, or NSF Loan Facility , $17.1 million with respect to the ATB Loan Facility, $7.2 million with respect to the Hamburg Commercial Bank Facility, $6.2 million with respect to the UniCredit loan facility, $4.5 million with respect to the March 2015 Alpha Bank Facility, $0.9 million with respect to the Hanchen Limited financial liability , $0.4 million with respect to the Wilmington Trust Loan Facility , $0.1 million with respect to Cargill loan facility and $1.2 million loan finance fees payments. The 2017 cash inflow resulted from proceeds of $34.5 million obtained from the ATB Loan Facility, proceeds of $16.2 million obtained from the Second Jelco Loan Facility, proceeds of $9 million obtained from the Third Jelco Note and proceeds of $2.6 million from common stock issuances. The 2017 cash inflow was offset by debt repayments of: $28 million with respect to the Natixis loan facility, $4.7 million with respect to the UniCredit loan facility, $2.1 million with respect to the Hamburg Commercial Bank Facility, $1 million with respect to the ATB Loan Facility, $0.7 million with respect to the March 2015 Alpha Bank Facility and $0.6 million loan finance fees payments.
Year ended December 31, 2017, as compared to year ended December 31, 2016

Operating Activities:   Net cash provided by operating activities amounted to $2.8 million in 2017 , consisting of net income after non-cash items of $0.1 million plus a decrease in working capital of $2.7 million.  Net cash used in operating activities amounted to $15.3 million in 2016, consisting of net loss after non-cash items of $13.5 million plus an increase in working capital of $1.9 million.
Investing Activities: The 2017 cash outflow resulted from the acquisition of our vessel Partnership in May 2017.
Financing Activities : The 2017 cash inflow resulted from proceeds of $34.5 million obtained from the ATB Loan Facility, proceeds of $16.2 million obtained from the Second Jelco Loan Facility, proceeds of $9 million obtained from the Third Jelco Note and proceeds of $2.6 million from common stock issuances. The 2017 cash inflow was offset by debt repayments of: $28 million with respect to the Natixis loan facility, $4.7 million with respect to the UniCredit loan facility, $2.1 million with respect to the Hamburg Commercial Bank Loan Facility, $1 million with respect to the ATB Loan Facility, $0.7 million with respect to the March 2015 Alpha Bank Facility and $0.6 million loan finance fees payments. The 2016 cash inflow resulted from proceeds of $32 million obtained from the NSF Loan Facility, proceeds of $12.8 million obtained from the First Jelco loan facility, proceeds of $22.6 million from common stock and warrants issuances and drawdowns of $9.4 million under the Second Jelco Note for the acquisition of two vessels and for working capital purposes, offset by debt repayments of $6.9 million with the respect to the First Jelco Loan Facility, debt repayments of $0.65 million with respect to the March 2015 Alpha Bank Loan Facility and an increase of $3 million in restricted cash.
59

Loan Arrangements

Credit Facilities

March 2015 Alpha Bank A.E. Loan Facility

On March 6, 2015, we entered into a $8.75 million secured floating interest rate loan facility with Alpha Bank A.E. to partly finance the acquisition of the Leadership , referred to as the March 2015 Alpha Bank Loan Facility. On December 23, 2015, July 28, 2016 and June 29, 2018, we and Alpha Bank A.E. entered into a first, second and third supplemental agreement, respectively, to the facility agreement. As amended to date, the facility provided as follows: the facility bears interest at LIBOR plus a margin of 3.75% and is repayable in twenty consecutive quarterly installments. The first four installments are $0.2 million each, the next installment is $0.25 million, the next four installments are $0.1 million each, the next ten installments are $0.25 million each, and a final installment of $0.25 million with a final balloon payment of $4.45 million due on March 17, 2020. Following the reduction by $0.6 million of four repayment installments that was added to the balloon installment by the second supplemental agreement, 80% of Leadership's excess earnings (as defined in the loan agreement) during each financial year starting from 2016, shall be applied by Alpha Bank towards payment of the deferred amount until same is fully repaid. 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' undertakings. The facility also imposes certain operating and financing covenants. Certain of these covenants may significantly limit or prohibit, among other things, the borrower's ability to incur additional indebtedness, create liens, sell capital shares of subsidiaries, engage in mergers, or sell the vessel without the consent of the relevant lenders.   On a consolidated basis, (i) we are required to maintain a corporate leverage ratio, as defined in the loan agreement, that will not be (a) on December 31, 2018 higher than 0.85:1.0, the compliance with such obligation to be tested on each financial semester starting from July 1, 2018; (b) on March 31, 2019 higher than 0.80:1.0 and (c) starting from June 1, 2019 and at the end of each accounting period higher than 0.75:1.0, (ii) from July 1, 2018 the consolidated interest cover ratio (EBITDA to Net Interest Expense) shall not be (a) until and including the March 31, 2019, lower than 1.2:1 and (b) from April 1, 2019 until the expiration of the Security Period, lower than 2:1, and (iii) we are required to maintain liquidity in a specified amount. In addition, from July 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 restricts our ability to distribute dividends to our shareholders in excess of 50% of our net income except if our cash and marketable securities are equal or greater than the amount required to meet our debt service for the following eighteen-month period. As of December 31, 2018, $5.7 million was outstanding under the facility, excluding the unamortized financing fees.
Hamburg Commercial Bank AG (formerly known as HSH Nordbank AG) Loan Facility

On September 1, 2015, we entered into a $44.4 million senior secured loan facility with Hamburg Commercial Bank AG, or Hamburg Commercial Bank to finance the acquisition of the Geniuship and Gloriuship . We refer to this as the Hamburg Commercial Bank Loan Facility. On May 16, 2016, February 23, 2017 and March 28, 2018, we and Hamburg Commercial Bank entered into two supplemental letter agreements and one supplemental agreement, respectively, to the facility agreement. As amended to date the facility provides as follows: the facility bears interest at LIBOR plus a margin of 3.75% and is repayable in quarterly installments of about $1.0 million each, with a final balloon payment of $28.8 million due on June 30, 2020. On July 2, 2018, the Company made a mandatory prepayment of $3.0 million. The borrowers under the facility are our two applicable vessel-owning subsidiaries and the facility is guaranteed by Seanergy Maritime Holdings Corp. The facility was made available in two advances. On October 13, 2015, we drew the first advance of $27.6 million in order to 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, charter parties, insurances and requisition compensation for each of the vessels, an earnings account pledge agreement for each of the vessels, technical and commercial managers' undertakings, a shares security deed of the two borrowers' shares and a master agreement assignment. The facility also imposes certain operating and financing covenants. Certain of these covenants may significantly limit or prohibit, among other things, the borrowers' 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 relevant lenders. Pursuant to the terms of the supplemental agreement of March 28, 2018: i) the application of the security cover requirement (as defined in the loan facility) was waived until September 30, 2018, ii) the security cover percentage requirement was amended as follows: 100% during the period commencing on October 1, 2018 and ending on March 31, 2019, 111% during the period commencing on April 1, 2019 and ending on September 30, 2019 and 120% thereafter, iii) the Leverage Ratio covenant was redefined to reflect Net debt / Total assets (as defined in the loan facility) and the relevant threshold was amended to: no more than 85% during the period commencing on June 30, 2018 and ending on December 31, 2018, no more than 80% during the period commencing on January 1, 2019 and ending on March 31, 2019 and no more than 75% thereafter, iv) the ratio of EBITDA to net interest payments (as defined in the loan facility) was amended to: no less than 1.2 times during the period commencing on June 30, 2018 and ending on March 31, 2019 and no less than 2 times thereafter and v) the Corporate Guarantee liquidity was amended to include restricted cash. In addition, after April 30, 2018, the borrowers are required to ensure that the market value of the Geniuship and Gloriuship plus any additional security to the total facility outstanding and any Swap Exposure (as defined in the Hamburg Commercial Bank Loan Facility) 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 the total facility outstanding and the cash balance of the borrowers after distribution of dividends is less than $3 million. The $3 million condition on payment of dividends does not apply after June 30, 2018. As of December 31, 2018, $35.1 million was outstanding under the facility, excluding the unamortized financing fees.
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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 . On June 3, 2016, July 29, 2016, March 7, 2017, September 25, 2017, April 30, 2018 and October 10, 2018, we and UniCredit Bank AG entered into an amendment and five supplemental letter agreements, respectively, to the facility agreement. As amended to date, the facility bears interest at LIBOR plus a margin of 3.20%. The facility is repayable in eight quarterly installments of $1.6 each and a balloon installment of $29.4 payable on the final maturity date, December 28, 2020. The September 25, 2017 supplemental letter agreement deferred an installment payment due on September 25, 2017 to October 2, 2017. The borrowers under the facility were originally our 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 was secured by a first preferred mortgage over each of the relevant vessels, general assignments covering earnings, charter parties, insurances and requisition compensation for each of the vessels, account pledge agreements for each of the vessels, technical and commercial managers' undertakings, shares security deeds of the three applicable vessel owning subsidiaries' shares and a hedging agreement assignment. The facility also imposes certain operating and financing covenants. Certain of these covenants may significantly limit or prohibit, among other things, the borrowers' ability to incur additional indebtedness, create liens, engage in mergers, or sell the vessels without the consent of the relevant lenders. Pursuant to the terms of the supplemental letter agreement of April 30, 2018: i) the Leverage Ratio covenant was redefined to reflect the Group’s Net Debt / Consolidated Market Value adjusted assets (excluding cash, cash equivalents and restricted cash) and the relevant threshold was amended to: no more than 85% during the period commencing on May 1, 2018 and ending on December 31, 2018, no more than 80% during the period commencing on January 1, 2019 and ending on March 31, 2019 and no more than 75% for the remaining part of the security period, ii) the ratio of EBITDA to net interest payments was amended to: not less than 1.2 times during the period commencing on May 1, 2018 and ending on March 31, 2019 and not less than 2 times for the remaining part of the security period, and iii) the security cover percentage requirement was amended as follows: not to be less than 100% during the period commencing on May 1, 2018 and ending on September 30, 2018, not to be less than 111% during the period commencing on October 1, 2018 and ending on June 30, 2019 and not to be less than 120% for the remaining part of the security period.
On November 22, 2018, the Company entered into an amended and restated loan facility of the September 11, 2015 UniCredit loan facility, the Amended and Restated UniCredit Loan Facility, in order to (i) release the respective vessel-owning subsidiaries of the Gladiatorship and the Guardianship as borrowers and (ii) include as replacement borrower the vessel-owning subsidiary of the   Fellowship . The first-priority mortgages over the Gladiatorship and Guardianship and all other securities created in favor of UniCredit for the specific vessels under the UniCredit facility were irrevocably and unconditionally released. The amendment and restatement of the facility did not alter the interest rate, the maturity date, the amortization and the repayment terms of the UniCredit facility, or the financial covenants applicable to the Company as guarantor. The Amended and Restated UniCredit Loan Facility is secured by first preferred mortgages and general assignments covering earnings, insurances and requisition compensation over the Premiership and the Fellowship , account pledge agreements, shares security deeds relating to the shares of both vessels' owning subsidiaries, technical and commercial managers' undertakings and, where applicable, charter assignments. As of December 31, 2018, $41.8 million was outstanding under the facility, excluding the unamortized financing fees.
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November 2015 Alpha Bank A.E. Loan Facility

On November 4, 2015, we entered into a $33.8 million secured floating interest rate loan facility with Alpha Bank A.E. to partly finance the acquisition of the Squireship . On July 28, 2016 and June 29, 2018, we and Alpha Bank A.E. entered into a first and second supplemental agreement, respectively, to the facility agreement.  As amended to date, the facility provides as follows: the facility bears interest at LIBOR plus a margin of 3.50% and is repayable in twelve consecutive quarterly installments of $0.8 million each 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 second preferred mortgage over the Leadership , a general assignment covering earnings, insurances, charter parties and requisition compensation, an account pledge agreement and technical and commercial managers' undertakings. The facility also imposes certain operating and financing covenants. Certain of these covenants may significantly limit or prohibit, among other things, the borrower's ability to incur additional indebtedness, create liens, sell capital shares of subsidiaries, engage in mergers, or sell the vessel without the consent of the relevant lenders. Pursuant to the terms of the supplemental agreement of June 29, 2018, i) the ratio of the market value of Squireship plus any additional security to the total facility outstanding shall not be less than 100% as from April 1, 2019 until March 31, 2020, shall not be less than 111% starting from April 1, 2020 until March 31, 2021 and shall not be less than 125% from April 1, 2021 until the end of the security period ii) the consolidated interest cover ratio (EBITDA to Net Interest Expense) shall not be (a) until and including March 31, 2019 lower than 1.2:1, the compliance with such obligation to be tested on each Financial Semester Day starting from July 1, 2018 and (b) as from April 1, 2019 until the expiration of the security period, lower than 2:1, the compliance with such obligation to be tested on each Financial Semester Day starting from April 1, 2019 and iii) the Corporate Leverage Ratio as defined in the loan agreement will not be (a) at the end of December 31, 2018 higher than 0.85:1.0, the compliance with such obligation to be tested on each Financial Semester Day starting from July 1, 2018; (b) on March 31, 2019 higher than 0.80:1.0 and (c) starting from June 1, 2019 and at the end of each Accounting Period higher than 0.75:1.0, the compliance with such obligation to be tested on each Financial Semester Day starting from June 30, 2019.The facility also restricts our ability to distribute dividends to our shareholders in excess of 50% of our net income except if our cash and marketable securities are equal or greater than the amount required to meet our debt service for the following eighteen-month period. As of December 31, 2018, $30.4 million was outstanding under the facility, excluding the unamortized financing fees.
First Jelco Loan Facility

On October 4, 2016, we entered into a $4.2 million loan facility with Jelco to finance the initial deposits for the Lordship and the Knightship .  We refer to this as the First Jelco Loan Facility.  On November 17, 2016 we entered into an amendment and on November 28, 2016 and February 13, 2019, we amended and restated this facility, which, among other things, increased the aggregate amount that could be borrowed under the facility to up to $12.8 million (to partially finance the remaining payment for the Lordship and the Knightship ) and extended the maturity date to June 30, 2020. The Jelco Loan Facility bears interest at LIBOR plus a margin of 8.5% and is repayable in one bullet payment together with accrued interest thereon to the maturity date. Seanergy Maritime Holdings Corp. is the borrower under this facility. This facility is secured by the following securities: a second priority mortgage and general assignment covering earnings, insurances and requisition compensation on the Partnership , and the subsidiary that owns the vessel owning subsidiary of the Lordship and the bareboat charterer of the Knightship has provided a guarantee to Jelco for Seanergy Maritime Holdings Corp.'s obligations under this facility, all cross collateralized with the Second Jelco Loan Facility and the Third Jelco Note . As of December 31, 2018, $5.9 million was outstanding under this facility, excluding the unamortized financing fees.
62

ATB Loan Facility

On May 24, 2017, we entered into an up to $18 million term loan facility with Amsterdam Trade Bank N.V. to partially finance the acquisition of the Partnership . We refer to this as the ATB Loan Facility. The facility bore interest at LIBOR plus a margin of 4.65% per annum which is payable quarterly and the principal is repayable by twenty equal consecutive quarterly installments being $ 0.2 million each, by additional quarterly repayments of any Excess Cash (as defined in the loan facility) up to $3.6 million in total, and a final balloon payment due on the maturity date, May 26, 2022. On August 28, 2017, an additional repayment of $0.38 million was made along with the first installment payment. The loan was made available in two drawdowns: (i) $13.3 million was drawn down on May 26, 2017 and (ii) $4.7 million was drawn down on June 22, 2017. The borrower under the ATB Loan Facility was our applicable vessel-owning subsidiary. The loan was secured by a first priority mortgage and a general assignment covering earnings, insurances and requisition compensation over the Partnership , an earnings account pledge agreement, technical and commercial managers' undertakings and a charter assignment . The facility also imposed certain operating and financing covenants. The facility also placed a restriction on the borrower's ability to distribute dividends to Seanergy Maritime Holdings Corp. or make any other form of distribution or effect any return of share capital unless additional repayments in an aggregate amount of $3.6 million had been made.
On September 25, 2017, in order to partially fund the refinancing of our Natixis facility, we amended and restated the ATB Loan Facility, increasing the loan amount of the facility by an additional tranche of $16.5 million, or Tranche B. We refer to this as the Amended and Restated ATB Loan Facility. The principal of Tranche B was repayable by nineteen consecutive quarterly installments, being $0.2 million each of the first four installments, $0.3 million each of the subsequent four installments, and $0.4 million each of the subsequent eleven installments, in addition to a balloon installment of any outstanding indebtedness due on the maturity date, May 26, 2022. On each quarterly repayment date, an additional repayment of at least $0.01 million, or an integral multiple of that amount, of any excess cash standing to the credit of the relevant vessel's operating account shall be applied towards reducing the balloon installment. Excess cash, as defined in the loan facility, is any amount above $1.0 million. The aggregate amount of the additional repayments, with regard to Tranche B, shall not exceed $1.25 million. The loan facility requires that the borrower shall maintain in aggregate $0.5 million as minimum liquidity. The amendment and restatement of the facility did not alter the interest rate, the maturity date, the amortization and the repayment terms of the existing tranche under the loan facility, or the financial covenants applicable to the Company as guarantor. The amended and restated loan facility was secured by first preferred mortgages and general assignments covering earnings, insurances and requisition compensation over the Partnership and Championship , earnings account pledges, shares security deeds relating to the shares of both vessels' owning subsidiaries, technical and commercial managers' undertakings and, where applicable, charter assignments. On May 18, 2018, the Company signed a supplemental agreement with Amsterdam Trade Bank N.V. by which: i) the ratio of EBITDA to net interest payments was amended to: not less than 1.2 times during the period commencing on June 30, 2018 and ending on June 29, 2019 and not less than 2 times from June 30, 2019 and for the remaining part of the security period, and ii) the Leverage Ratio was amended to: no more than 85% during the period commencing on June 30, 2018 and ending on March 30, 2019, no more than 80% during the period commencing on March 31, 2019 and ending on June 29, 2019 and no more than 75% during the period commencing on June 30, 2019 and for the remaining part of the security period. On November 7, 2018, Amsterdam Trade Bank entered into a deed of release, with respect to the Championship , releasing the underlying borrower in full after the settlement of the outstanding balance of $15.7 million pertaining to the specific vessel tranche. The first-priority mortgage over the Championship and all other securities created in favor of Amsterdam Trade Bank for the specific vessel tranche under the Amsterdam Trade Bank loan facility were irrevocably and unconditionally released pursuant to the deed of release. The second-priority mortgage over the Championship and all other securities created in favor of Jelco were also irrevocably and unconditionally released pursuant to a separate deed of release. As of December 31, 2018, $16.4 million was outstanding under the facility, excluding the unamortized financing fees.
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On February 13, 2019, after a further deed of release with respect to the Partnership resulting in a complete release of the Amended and Restated ATB Loan Facility and full settlement of the outstanding balance of $16.4 million, we entered into a new loan facility with Amsterdam Trade Bank N.V. in order to (i) refinance the existing indebtedness over the Partnership under the May 24, 2017 facility and (ii) general working capital purposes and more specifically, for the financing of installation of open loop scrubber systems on the Squireship and Premiership . We refer to this as the New ATB Loan Facility. The loan is divided in Tranche A relating to the refinancing of the Partnership and Traches B and C for the financing of the scrubber systems on the Squireship and the Premiership, respectively. Pursuant to the terms of the New ATB Loan Facility, Tranche A is repayable in sixteen equal quarterly installments being $0.2 million each starting from February 26, 2019 and a balloon payment of $13.2 million and each of Tranche B and C in twelve quarterly installments of $0.19 million starting from November 27, 2019. The New ATB Loan Facility bears interest of LIBOR plus a margin of 4.65% with quarterly interest payments and is secured by a first priority mortgage over the Partnership , a general assignment covering earnings, insurances and requisition compensation over the Partnership , an earnings account pledge, a shares security deed relating to the shares of the vessel’s owning subsidiary, technical and commercial managers' undertakings and charter assignments.
Wilmington Trust Loan Facility

On June 11, 2018, the Company entered into a $24.5 million loan agreement with Blue Ocean maritime lending funds managed by EnTrustPermal for the purpose of refinancing the outstanding indebtedness of the Lordship under the previous loan facility with NSF dated November 28, 2016. The borrower under the facility is the applicable vessel-owning subsidiary and the facility is guaranteed by the Company. The facility matures in June 2023 and can be extended until June 2025 subject to certain conditions. Specifically, the borrower has the right to sell the ship back to the lender at a pre-agreed price of $20.8 million on the fifth anniversary of the loan utilization, or the Year-5 Put Option. If the borrower elects to exercise the Year-5 Put Option, the lender has the right to extend the termination date of the loan by a further two years, in which case the exercise of the Year-5 Put Option by the borrower shall be cancelled in its entirety. Furthermore, the borrower has the right to sell the ship back to the lender at a pre-agreed price of $15.0 million on the seventh anniversary of the loan utilization, or the Year-7 Put Option. If the borrower elects to exercise the Year-7 Put Option then the lenders will be obliged to purchase the ship at the pre-agreed price. The new facility is secured by a first priority mortgage over the vessel, general assignment covering earnings, insurances and requisition compensation, an account pledge agreement and a share pledge agreement concerning the respective vessel-owning subsidiary and technical and commercial managers' undertakings. The new loan facility bears a weighted average all-in interest rate of 11.4% and 11.2% assuming a maturity date in June 2023 or in June 2025, respectively. The principal obligation amortizes in 20 or 28 quarterly installments, with a balloon payment of $15.3 million or $9.5 million due at maturity, assuming a maturity date in June 2023 or in June 2025, respectively.  The facility also imposes certain customary operating covenants. Certain of these covenants may significantly limit or prohibit, among other things, the borrower's ability to incur additional indebtedness, create liens, sell capital shares of subsidiaries, engage in mergers, or sell the vessel without the consent of the relevant lenders. As of December 31, 2018, the amount outstanding under the facility was $24.1 million.

Other Financial Liabilities: Sale and Leaseback Agreements
On June 28, 2018, the Company entered into a $26.5 million sale and leaseback agreement for the Knightship with Hanchen for the purpose of refinancing the outstanding indebtedness of the Knightship under the previous loan facility with NSF dated November 28, 2016. The Company's wholly-owned subsidiary, or the Charterer, sold and chartered back the vessel on a bareboat basis for an eight year period, having a purchase obligation at the end of the eighth year and it further has the option to repurchase the Knightship at any time following the second anniversary of the bareboat charter. Under ASC 842-40, the transaction was accounted for as a failed sale and leaseback transaction and resulted in a financial liability. The bareboat charter is secured by a general assignment covering earnings, insurances and requisition compensation, an account pledge agreement and a share pledge agreement of the shares of the Charterer and technical and commercial managers' undertakings. The Company provided a guarantee to Hanchen. Of the $26.5 million, $18.6 million were cash proceeds, $6.6 million was withheld by Hanchen as an upfront charterhire upon the delivery of the vessel, and an amount of $1.3 million was paid by the Charterer to Hanchen upon the delivery of the vessel in order to secure the due observance and performance by the Charterer of its obligations and undertakings as per the sale and leaseback agreement. The deposit can be set off against the balloon payment at maturity. The Charterer is required to maintain a value maintenance ratio (as defined in the additional clauses of the bareboat charter) of at least 120%. In addition, the bareboat charter requires the Charterer to maintain an amount of $1.3 million until the second anniversary of the delivery date or if earlier, a sub-charter in form and substance acceptable to Hanchen is available. The charterhire principal bears interest at LIBOR plus a margin of 4% and amortizes in thirty two consecutive equal quarterly installments of approximately $0.46 million along with a balloon payment of $5.3 million at maturity on June 29, 2026. The charterhire principal, as of December 31, 2018, is $18.96 million.
64



On November 7, 2018, the Company entered into a $23.5 million sale and leaseback agreement for the Championship with Cargill International SA, or Cargill, for the purpose of refinancing the outstanding indebtedness of the Championship under the Amended and Restated ATB Loan Facility. The Company sold and chartered back the vessel from Cargill on a sub-bareboat basis for a five-year period, having a purchase obligation at the end of the fifth year. Under ASC 842-40, the transaction was accounted for as a failed sale and leaseback transaction and resulted in a financial liability. The sub-bareboat charter is secured by an account pledge agreement and technical and commercial managers' undertakings. The Company is required to maintain an amount of $1.6 million from the $23.5 million proceeds as a performance guarantee, which amount of $1.6 million will be used at the vessel repurchase. Moreover, under the subject sale and leaseback agreement an additional tranche was provided to the Company for an amount of up to $2.75 million for the purpose of financing the cost associated with the acquisition and installation on board the Championship of an open loop scrubber system. The subject tranche has been placed in an escrow account in the name of Cargill and will be made available gradually subject to certain progress milestones. The cost of the financing is equivalent to an expected fixed interest rate of 4.71% for five years. The sale and leaseback agreement does not include any financial covenants or security value maintenance provisions. The Company has continuous options to buy back the vessel during the whole five-year sale and leaseback period at the end of which it has a purchase obligation at $14.05 million. Additionally, at the time of purchase, if the market value of the vessel is greater than a floor price, the Company will pay to Cargill 20% of the difference between the market price and the floor price. The floor price, as set forth in the agreement, starts at $30 million on November 7, 2018, and amortizes to $22.8 million at the end of the five year term. The Company has concluded that such contingency shall not be accrued in the consolidated financial statements, since information available does not indicate that it is probable that a liability has been incurred as of the latest balance sheet date and cannot be estimated. Moreover, as part of the transaction, the Company has issued 120,000 of its common shares to Cargill which are subject to customary statutory registration requirements. The fair market value of the shares on the date issued to Cargill will be amortized over the lease term using the effective interest method.  The unamortized balance is classified in other financial liabilities on the consolidated balance sheet.  The charterhire principal amortizes in sixty monthly installments averaging approximately $0.2 million each along with a balloon payment of $14.1 million, including the additional scrubber tranche, at maturity on November 7, 2023. The charterhire principal, as of December 31, 2018, is $26.1 million.

The borrowers under each of the existing financing arrangements are the applicable vessel owning subsidiaries or bareboat charterers of the vessels, as applicable, and the facilities are guaranteed by Seanergy Maritime Holdings Corp.
At December 31, 2018, eight of the Company's vessels, having a net carrying value of $187,415, were subject to first and second priority mortgages as collateral to their loan facilities. In addition, the Company's two bareboat chartered vessels, having a net carrying value of $55,799, collateralized the Company's bareboat lease agreements.
Second Jelco Loan Facility

On May 24, 2017, we entered into an up to $16.2 million loan facility with Jelco to partially finance the acquisition of the Partnership . We refer to this as the Second Jelco Loan Facility. On June 22, 2017 and on August 22, 2017, we entered into supplemental letters with Jelco to amend the terms of this loan facility, whereby the repayment of $4.8 million was deferred until September 29, 2017, on which date it was repaid.
On September 27, 2017 and on February 13, 2019, we amended and restated and entered into a supplemental agreement, respectively, to the Second Jelco Loan Facility. The Second Jelco Loan Facility currently bears interest at three-month LIBOR plus a margin of 6% per annum which is payable quarterly and the principal is repayable in one bullet payment due on December 30, 2020. The facility is secured by the following amended cross collaterals: a second preferred mortgage over the Partnership , a second priority general assignment covering earnings, insurances and requisition compensation over the Partnership , a guarantee from the vessel-owning subsidiary of the Partnership , and a guarantee from our wholly-owned subsidiary, Emperor Holding Ltd., the holding company of the ship-owing subsidiary owning the Lordship and the bareboat charterer of the Knightship, all cross collateralized with the First Jelco Loan Facility and the Third Jelco Note . As of December 31, 2018, $11.5 million was outstanding under this facility, excluding the unamortized financing fees.
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Third Jelco Loan Facility
 On April 10, 2018, the Company entered into a $2.0 million loan facility with Jelco for working capital purposes. We refer to this as the Third Jelco Loan Facility. On June 13, 2018, August 11, 2018 and January 31, 2019, we amended and restated and entered into two supplemental letters, respectively, to the Third Jelco Loan Facility. The Company drew down the $2.0 million on April 12, 2018. The facility bears interest at 10% per annum, payable quarterly, and the principal is payable in one bullet payment due on April 1, 2019. The facility is secured by a guarantee from the Company’s wholly-owned subsidiary, Emperor Holding Ltd.. As of December 31, 2018, $2.0 million was outstanding under this loan facility.
In February and March 2019, we received approval from the credit committees of certain of our lenders to amend the applicable thresholds or further defer the application date of certain financial covenants and security requirements of our credit facilities for the next twelve months. In addition, we have received approval from the credit committees of two of our lenders for the deferral of $3.3 million in principal payments due in 2019 to the balloons of the respective facilities.  This approval is subject to completion of definitive documentation.
Convertible Notes

First Jelco Note

On March 12, 2015, we issued a convertible note for $4.0 million to Jelco. The note , following two amendments, is repayable in four installments with the first installment occurring six months after the delivery date of the Leadership. The next two installments, $0.2 million each, are due in 2019 and the final installment of $0.2 million, along with a balloon installment of $3.2 million, is 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. At Jelco's option, the principal amount under the convertible note or any part thereof may be paid at any time in common shares at a conversion price of $13.50 per share. Jelco also received customary registration rights with respect to any shares received upon conversion of the note. As of December 31, 2018, $3.8 million was outstanding under the note.
Second Jelco Note

On September 7, 2015, we issued a revolving convertible note to Jelco for an amount of up to $6.8 million, or the Applicable Limit. Following ten amendments to the note between December 2015 and September 2018 , the Applicable Limit was raised to $24.7 million. Following the tenth amendment on September 1, 2018, a drawdown request of up to $3.5 million may be made by April 10, 2019, or the Final Revolving Advance Date. If the request is not made by the Final Revolving Advance Date, the advance will not be available to be drawn and the Applicable Limit will be reduced to $21.2. The aggregate outstanding principal is repayable on December 31, 2022. The note bears interest at three-month LIBOR plus a margin of 5% with interest payable quarterly. At Jelco's option, our obligation to repay the principal amount under the revolving convertible note or any part thereof may be paid in common shares at a conversion price of $13.50 per share. Jelco also received customary registration rights with respect to any shares received upon conversion of the note. As of December 31, 2018, $21.2 million was outstanding under the note.
Third Jelco Note
On September 27, 2017, we issued a convertible note to Jelco for an amount of $13.75 million . On February 13, 2019, the Company and Jelco entered into an amendment to this note. The note bears interest at three-month LIBOR plus a margin of 5% with interest payable quarterly. At Jelco's option, the whole or any part of the principal amount under the note may be paid at any time in common shares at a conversion price of $13.50 per share. Jelco also received customary registration rights with respect to all shares upon conversion of the note. The Company has the option to prepay at any time the whole or any part of this note in a number of fully paid and nonassessable shares equal to an amount of the note being prepaid divided by a price per share to be agreed with Jelco. The aggregate outstanding principal is repayable on December 31, 2022. The note is secured by a second preferred mortgage and second priority general assignment covering earnings, insurances and requisition compensation over the Partnership and a guarantee from the vessel-owning subsidiary of the Partnership , all cross collateralized with the First and the Second Jelco Loan Facility . Of the $13.75 million under the note, $4.75 million was used to make a mandatory prepayment under the Second Jelco Loan Facility. As of December 31, 2018, $13.75 million was outstanding under the note.
Our wholly-owned subsidiary Emperor Holding Ltd. has provided a guarantee, dated September 27, 2017, to Jelco for the Company’s obligations under all these notes.  
In March 2019, the Company reached an in-principle agreement with Jelco for (i) an additional term loan facility in the amount of $7.0 million to be provided by Jelco to the Company, the proceeds of which will be used to (a) refinance the Third Jelco Loan Facility with current outstanding balance of $2.0 million and (b) for general corporate purposes; (ii) the extension of the maturity of the First Jelco Note to December 31, 2020 and (iii) the extension of the availability of the $3.5 million advance under the Second Jelco Note by one more year, to April 10, 2020. This agreement is subject to completion of definitive documentation.
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C.   Research and development, patents and licenses, etc.
Not applicable.
D.   Trend Information
Our results of operations depend primarily on the charter rates earned by our vessels. Over the course of 2018, the Baltic Dry Index, or the BDI, registered a low of 948 on April 6, 2018 and a high of 1,774 on July 24, 2018.
Since the start of the financial crisis in 2008 the performance of the BDI has been characterized by high volatility, as the growth in the size of the dry bulk fleet outpaced growth in vessel demand for an extended period of time.
Specifically, in the period from 2009 to 2016, the size of the fleet in terms of deadweight tons grew by an annual average of about 9.2% while the corresponding growth in demand for dry bulk carriers grew by 5.3%, resulting in a drop of about 74.3% in the value of the BDI. In 2017 and 2018, market dynamics reversed course as the average annual fleet growth of 2.6% was slower than the corresponding demand growth of 3.2%, leading to a 18.2% rise in the BDI over the period . According to tentative projections, the total size of the dry bulk fleet is expected to rise by about 2.9% in 2019, compared to expected demand growth of 2.3%.
Please also see "–B. Liquidity and Capital Resources".
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, 2018 (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, debt to related party and other financial liabilities
 
$
217,956
   
$
17,273
   
$
135,049
   
$
55,780
   
$
9,854
 
Convertible notes
   
38,715
     
-
     
3,800
     
34,915
     
-
 
Interest expense - long term debt, debt to related party and other financial liabilities
   
42,233
     
16,024
     
18,021
     
6,906
     
1,282
 
Interest expense - convertible notes
   
11,221
     
2,964
     
5,614
     
2,643
     
-
 
Office rent
   
733
     
128
     
366
     
239
     
-
 
Total
 
$
310,858
   
$
36,389
   
$
162,850
   
$
100,483
   
$
11,136
 

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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 154 Vouliagmenis Avenue, 166 74 Glyfada, Athens, Greece.
Name
 
Age
 
 
Position
 
Director Class
Stamatios Tsantanis
 
47
 
 
Chairman, Chief Executive Officer & Director
 
A (term expires in 2019)
Stavros Gyftakis
 
40
   
Chief Financial Officer
   
Christina Anagnostara
 
48
 
 
Director
 
B (term expires in 2020)
Elias Culucundis
 
76
 
 
Director*
 
A (term expires in 2019)
Dimitrios Anagnostopoulos
 
72
 
 
Director*
 
C (term expires in 2021)
Ioannis Kartsonas
 
47
 
 
Director*
 
C (term expires in 2021)

_____________________
*Independent Director


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 from November 1, 2013 until October 2, 2018. Mr. Tsantanis brings more than 20 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 roles in a number of shipping corporate finance transactions. Mr. Tsantanis holds a Master's degree in Shipping Trade and Finance from the City University Business School in London, and a Bachelor's degree in Shipping Economics from the University of Piraeus.
Stavros Gyftakis has been appointed as our Chief Financial Officer on October 3, 2018, and previously served as Finance Director since October 2017. He has more than 13 years of experience in senior positions in the shipping finance industry. Before joining Seanergy, he was a Senior Vice President in the Greek shipping finance desk at DVB Bank SE. Stavros holds a BSc in Mathematics from the Aristotle University of Thessaloniki, a MSc in Business Mathematics awarded with Honors, from the Athens University of Economics and Business and a MSc in Shipping, Trade and Finance, awarded with Distinction, from Cass Business School of City University in London.
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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. She has more than 21 years of maritime and international business experience in the areas of finance, banking, capital markets, consulting, accounting and audit. She has served in executive and board positions of publicly listed companies in the maritime industry and she was responsible for the financial, capital raising and accounting functions. Since June 2017 she is a Director of the Investment Banking Division of AXIA Ventures Group and from 2014 to 2017 she provided advisory services to corporate clients involved in all aspects of the maritime industry. Between 2006 and 2008 she served as Chief Financial Officer and member of the Board of Directors of Global Oceanic Carriers Ltd, a dry bulk shipping company listed on the Alternative Investment Market of the London Stock Exchange. Between 1999 and 2006, she was a senior management consultant of the Geneva-based EFG Group. Prior to EFG Group she worked for Eurobank EFG and Ernst & Young, the international accounting firm. Ms. Anagnostara studied Economics in Athens and is a Certified Chartered Accountant. She is a member of various industry organizations including ACCA, Propeller Club, WISTA, Shipping Finance Executives and American Hellenic Chamber of Commerce.
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 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.
Dimitrios Anagnostopoulos has been a member of our board of directors since May 2009. Mr. Anagnostopoulos has over 41 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.
Ioannis Kartsonas has been a member of our board of directors since May 2017. Mr. Kartsonas has more than 19 years of experience in finance and commodities trading. He is currently the Principal and Managing Partner of Breakwave Advisors LLC., a commodity-focused advisory firm based in New York. From 2011 to 2017, he was a Senior Portfolio Manager at Carlyle Commodity Management, a commodity-focused investment firm based in New York and part of the Carlyle Group, being responsible for the firm's Shipping and Freight investments. During his tenure, he managed one of the largest freight futures funds globally. Prior to his role, Mr. Kartsonas was a Co-Founder and Portfolio Manager at Sea Advisors Fund, an investment fund focused in Shipping. From 2004 to 2009, he was the leading Transportation Analyst at Citi Investment Research covering the broader transportation space including Shipping. Prior to that, he was an Equity Analyst focusing on Shipping and Energy for Standard & Poor's Investment Research. Mr. Kartsonas holds an MBA in Finance from the Simon School of Business, University of Rochester.
No family relationships exist among any of the directors and executive officers.
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B.   Compensation
For the year ended December 31, 2018, we paid our executive officers and directors aggregate compensation of $0.72 million.  Our executive officers are employed by us pursuant to employment and consulting contracts.
Each member of our board of directors received a fee of $60,000 in 2018 . The Shipping Committee fee has been suspended since July 1, 2013 until the board of directors decides otherwise.  The aggregate director fees paid by us for the years ended December 31, 2018, 2017 and 2016 totaled $300,000, $246,000 and $100,000, 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 December 15, 2016, to increase the aggregate number of shares of our common stock reserved for issuance under the Plan from 57,111 shares to 66,666 shares. The Plan was also amended and restated on February 1, 2018, to further increase the aggregate number of shares of our common stock reserved for issuance under the Plan to 200,000. The Plan was further amended and restated on January 10, 2019, to further increase the aggregate number of shares of our common stock reserved for issuance under the Plan to 200,000. 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 12,600 restricted shares of common stock pursuant to the Plan. Of the total 12,600 shares issued, 2,400 shares were granted to our board of directors and the other 10,200 shares were granted to certain of our other employees. The fair value of each share on the grant date was $55.50 and was expensed over three years. The shares to our board of directors vested over a period of two years, which commenced on October 1, 2015. On October 1, 2015, 800 shares vested, on October 1, 2016, 800 shares vested, and on October 1, 2017, 800 shares vested. All the shares granted to certain of our employees vested over a period of three years, commencing on October 1, 2015. On October 1, 2015, 1,666 shares vested, on October 1, 2016, 2,066 shares vested, on October 1, 2017, 2,800 shares vested and 3,000 shares vested on October 1, 2018.
On December 15, 2016, the Compensation Committee granted an aggregate of 51,520 restricted shares of common stock pursuant to the Plan. Of the total 51,520 shares issued, 18,320 shares were granted to our board of directors, 29,867 shares were granted to certain of our employees and 3,333 shares were granted to the sole director of the Company's commercial manager, a non-employee. The fair value of each share on the grant date was $19.50. The shares to our board of directors vested over a period of two years, which commenced on December 15, 2016. On December 15, 2016, 6,106 shares vested, on October 1, 2017, 6,107 shares vested and 6,107 shares vested on October 1, 2018. All the other shares granted will vest over a period of three years, which commenced on December 15, 2016. Of the shares granted to certain of our other employees, 7,633 shares vested on December 15, 2016, 7,633 shares vested on October 1, 2017, 6,833 shares vested on October 1, 2018 and 6,833 shares will vest on October 1, 2019. Of the shares granted to the sole director of the Company's commercial manager, 1,000 shares vested on December 15, 2016, 1,000 shares vested on October 1, 2017, 666 shares vested on October 1, 2018 and 667 shares will vest on October 1, 2019.
On February 1, 2018, the Compensation Committee granted an aggregate of 84,000 restricted shares of common stock pursuant to the Plan. Of the total 84,000 shares issued, 38,334 shares were granted to our board of directors, 44,333 shares were granted to certain of our employees and 1,333 shares were granted to the sole director of the Company's commercial manager, a non-employee. The fair value of each share on the grant date was $15.53. All the shares will vest over a period of two years. 28,001 shares vested on February 1, 2018, 26,999 shares vested on October 1, 2018 and 27,000 shares will vest on October 1, 2019.
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On January 10, 2019, the Compensation Committee granted an aggregate of 144,000 restricted shares of common stock pursuant to the Plan. Of the total 144,000 shares issued, 66,667 shares were granted to the board of directors, 70,666 shares were granted to certain of the Company's employees and 6,667 shares were granted to the sole director of the Company's commercial manager, a non-employee. The fair value of each share on the grant date was $9.15. All the shares will vest over a period of two years. 48,000 shares vested on January 10, 2019, 48,000 shares will vest on October 1, 2019 and 48,000 shares will vest on October 1, 2020.
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. Dimitrios Anagnostopoulos and Elias Culucundis.  Our board of directors has determined that the members of the audit committee meet the applicable independence requirements of the Commission and the NASDAQ Stock Market Rules.  Our board of directors has determined that Mr. Dimitrios Anagnostopoulos is an "Audit Committee Financial Expert" under the Commission's rules and the corporate governance rules of the NASDAQ Stock Market.
The audit committee has powers and performs the functions customarily performed by such a committee (including those required of such a committee by NASDAQ and the Commission).  The audit committee is responsible for selecting and meeting with our independent registered public accounting firm regarding, among other matters, audits and the adequacy of our accounting and control systems.
Compensation Committee
Our compensation committee consists of Messrs. Dimitrios Anagnostopoulos and Elias Culucundis, each of whom is an independent director.  The compensation committee reviews and approves the compensation of our executive officers.
Nominating Committee
Our nominating committee consists of Messrs. Elias Culucundis and Dimitrios Anagnostopoulos, each of whom is an independent director.  The nominating committee is responsible for overseeing the selection of persons to be nominated to serve on our board of directors.
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 of directors' nominee.
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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 bylaws 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 two executive officers, Mr. Stamatios Tsantanis and Mr. Stavros Gyftakis. In addition, we employ Ms. Theodora Mitropetrou, our general counsel, and a support staff of thirty four employees .
E.   Share Ownership
The common shares beneficially owned by our directors and executive officers are disclosed below in "Item 7. Major Shareholders and Related Party Transactions".
ITEM 7.
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
A.   Major Shareholders
The following table sets out information, 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.
Identity of Person or Group
 
Number of
Shares Owned
   
Percent of
Class (2)
 
Claudia Restis (1)
   
3,985,358
     
70.2
%
Stamatios Tsantanis
    79,013

   
2.8
%
Stavros Gyftakis
   
—
     
*
 
Christina Anagnostara
   
—
     
*
 
Elias Culucundis
   
—
     
*
 
Dimitrios Anagnostopoulos
   
—
     
*
 
Ioannis Kartsonas
   
—
     
*
 
Directors and executive officers as a group (6 individuals)
   
157,946
     
5.6
%

_______________

*
Less than one percent.
(1)
Based on the Schedule 13D/A filed by Jelco, Comet and Claudia Restis on March 22, 2019, Claudia Restis may be deemed to beneficially own 3,928,465 common shares through Jelco and 56,893 of our common shares through Comet, each through a revocable trust of which she is beneficiary. The shares she may be deemed to beneficially own through Jelco include (i) 281,481 common shares which Jelco may be deemed to beneficially own, issuable upon exercise of a conversion option pursuant to the First Jelco Note, (ii) 1,567,777 common shares which Jelco may be deemed to beneficially own, issuable upon exercise of a conversion option pursuant to the Second Jelco Note and (iii) 1,018,518 common shares which Jelco may be deemed to beneficially own, issuable upon exercise of a conversion option pursuant to the Third Jelco Note.
(2)
Based on 2,810,223 common shares outstanding as of March 21, 2019 and any additional shares that such person may be deemed to beneficially own in accordance with Rule 13d-3 under the Exchange Act.

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B.   Related Party Transactions
Convertible Notes
First Jelco Note
On March 12, 2015, we issued a convertible note for $4.0 million to Jelco. The note, following two amendments, is repayable in four installments with the first installment occurring six months after the delivery date of the Leadership . The next two installments, $0.2 million each, are due in 2019 and the final installment of $0.2 million, along with a balloon installment of $3.2 million, is 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. At Jelco's option, the principal amount under the convertible note or any part thereof may be paid at any time in common shares at a conversion price of $13.5 (adjusted for the reverse stock split discussed above according to the terms of the convertible note) per share. Jelco also received customary registration rights with respect to any shares received upon conversion of the note. As of December 31, 2018, $3.8 million was outstanding under the note.
Second Jelco Note
On September 7, 2015, we issued a revolving convertible note to Jelco for an amount up to $6.8 million, or the Applicable Limit. Following ten amendments to the note between December 2015 and September 2018, the Applicable Limit was raised to $24.7 million. Following the tenth amendment on September 1, 2018, a drawdown request of up to $3.5 million may be made by April 10, 2019, or the Final Revolving Advance Date. If the request is not made by the Final Revolving Advance Date, the advance will not be available to be drawn and the Applicable Limit will be reduced to $21.2. The current outstanding principal is repayable on the final maturity date, on December 31, 2022. The note bears interest at three-month LIBOR plus a margin of 5% with interest payable quarterly. At Jelco's option, our obligation to repay the principal amount under the revolving convertible note or any part thereof may be paid in common shares at a conversion price of $13.5 (adjusted for the reverse stock split discussed above according to the terms of the convertible note) per share. Jelco also received customary registration rights with respect to any shares received upon conversion of the note. As of December 31, 2018, $21.2 million was outstanding under the note.
Third Jelco Note
On September 27, 2017, as amended on February 13, 2019, we issued a $13.75 million convertible note to Jelco. The current outstanding principal is repayable on the final maturity date on December 31, 2022. The Company may at any time, by giving a five business days prior written notice to Jelco, prepay the whole or any part of the note in cash or, subject to the Jelco’s prior written agreement on price per share, in a number of fully paid and nonassessable shares of the Company equal to the amount of the note being prepaid divided by the agreed price per share. The note bears quarterly interest at three-month LIBOR plus a margin of 5% and is payable in cash. At Jelco's option, the whole or any part of the principal amount under the note may only be paid at any time in common shares at a conversion price of $13.5 per share. The conversion price was determined and approved by a special committee of independent directors of the Company's board of directors, as well as by the board of directors itself. The special committee of independent directors of the Company's board of directors and our board of directors obtained a valuation report from an independent third party financial advisor for the fair market value of the Company's equity per share. Jelco also received customary registration rights with respect to all shares it beneficially owns, including any shares to be received upon conversion of the note. The note is secured by the following cross collaterals: a second preferred mortgage over the Partnership , a second priority general assignment covering earnings, insurances and requisition compensation over the vessel, a guarantee from our vessel-owning subsidiary that owns the Partnership and a guarantee from our wholly-owned subsidiary, Emperor Holding Ltd., which is the holding company of the ship-owing subsidiary owning the Lordship and the bareboat charterer of the Knightship . Of the $13.75 million under the note, $4.75 million were used to make a mandatory prepayment under the Second Jelco Loan Facility. As of December 31, 2018, $13.75 million was outstanding under the note.
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Our wholly-owned subsidiary Emperor Holding Ltd. has provided a guarantee to Jelco for Seanergy Maritime Holdings Corp.'s obligations under all these notes.
Jelco Loan Facilities
First Jelco Loan Facility
On October 4, 2016, we entered into a $4.2 million loan facility with Jelco, or the First Jelco Loan Facility, to fund the initial deposits for the Lordship and the Knightship . On November 17, 2016, November 28, 2016 and February 13, 2019, we entered into amendments to the First Jelco Loan Facility, which, among other things, increased the aggregate amount that may be borrowed under the facility to up to $12.8 million and extended the maturity date to June 30, 2020.  The First Jelco Loan Facility bears interest at LIBOR plus a margin of 8.5% and is repayable in one bullet payment together with accrued interest thereon on the maturity date. The First Jelco Loan Facility is secured by a second preferred mortgage over the Partnership , a second priority general assignment covering earnings, insurances and requisition compensation over the vessel, a guarantee from the vessel-owning subsidiary of the Partnership and a guarantee from our wholly-owned subsidiary, Emperor Holding Ltd., the holding company of the ship-owing subsidiary owning the  Lordship  and the bareboat charterer of the  Knightship , all cross collateralized with the Second Jelco Loan Facility and the Third Jelco Note . As of December 31, 2018, $5.9 million was outstanding under the First Jelco Loan Facility, excluding the unamortized financing fees.
Jelco Backstop Loan Facility
On March 28, 2017, we entered into a $47.5 million secured loan agreement with Jelco. Under the terms of the Jelco Backstop Facility, Jelco would make available this facility to us in the event that we were not able to secure third party financing to partially fund the Natixis settlement agreement and the balance of the purchase price of the Partnership . The Jelco Backstop Facility was terminated on September 27, 2017, and no amounts were drawn down under this facility.
Second Jelco Loan Facility
On May 24, 2017, we entered into a loan agreement with Jelco for an amount of up to $16.2 million to fund part of the acquisition cost for the Partnership, which we refer to as the  Second Jelco Loan Facility. On June 22, 2017 and August 22, 2017, we entered into supplemental letters to the Second Jelco Loan Facility, which, deferred our obligation to mandatory prepay to Jelco the amount of $4.75 million due under the loan. Relevant mandatory prepayment of $4.75 million was made through the proceeds we received from the above stated note of $13.75 million issued to Jelco on September 27, 2017.
On September 27, 2017, we entered into an amending and restating agreement with Jelco to amend and restate the Second Jelco Loan Facility, which was further amended and supplemented on February 13, 2019 . The amended facility currently bears interest at three-month LIBOR plus a margin of 6% per annum and is repayable in one bullet payment due on December 30, 2020. The facility is secured by a second preferred mortgage on the Partnership , a second priority general assignment covering earnings, insurances and requisition compensation over the Partnership , a guarantee from our vessel-owning subsidiary that owns the Partnership and a guarantee from our wholly-owned subsidiary, Emperor Holding Ltd., all cross collateralized with the First Jelco Loan Facility and the Third Jelco Note . As of December 31, 2018, $11.45 million was outstanding under this facility.
Third Jelco Loan Facility
On April 10, 2018, we entered into a $2 million loan facility with Jelco for working capital purposes, the Third Jelco Loan Facility. The facility, as amended and restated on June 13, 2018 and as further amended on August 11, 2018 and on January 31, 2019, bears interest at 10% per annum and is repayable in one bullet payment due on April 1, 2019. The facility is secured by a guarantee from our wholly-owned subsidiary, Emperor Holding Ltd., which is the holding company of the ship-owing subsidiary owning the Lordship and the bareboat charterer of the Knightship . As of December 31, 2018, $2 million was outstanding under the Third Jelco Loan Facility, excluding the unamortized financing fees.
In March 2019, the Company reached an in-principle agreement with Jelco for (i) an additional term loan facility in the amount of $7.0 million to be provided by Jelco to the Company, the proceeds of which will be used to (a) refinance the Third Jelco Loan Facility with current outstanding balance of $2.0 million and (b) for general corporate purposes; (ii) the extension of the maturity of the First Jelco Note to December 31, 2020 and (iii) the extension of the availability of the $3.5 million advance under the Second Jelco Note by one more year, to April 10, 2020. This agreement is subject to completion of definitive documentation.
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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 per month 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 per month, following which we relocated our executive office space to premises owned by an unaffiliated third party.
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 between 2010 and 2017 certain of our then shareholders, including our former Chairman that served between 2008 to 2010, had brought suits in Greece against certain other shareholders of the Company, our former Chief Financial Officer, and such Chairman’s immediate successor to the board of directors. The plaintiffs withdrew their suits filed in 2010 and 2014 and therefore these are now closed.
The hearing of the only two remaining suits that were filed in 2017 against, amongst other, the former Chairman’s immediate successor, took place on November 15, 2018 and the court’s decision is now expected to be issued. These suits seek damages from the defendants (including our former Chairman) for alleged willful misconduct that purportedly caused the plaintiffs damage both by way of diminution of the value of their shares in the Company and harm to their reputations. Our former Chairman has advised us that he does not believe the action has any merit.
Neither we nor our Directors nor our current Chairman is named in any of these 2017 actions. We have also notified our insurance underwriters of these actions, and our underwriters are advancing a portion of the defendants' legal expenses.
Various claims, suits, and complaints, including those involving government regulations and product liability, arise in the ordinary course of the shipping business.  Other than the proceedings mentioned above, we are not a party to any material litigation where claims or counterclaims have been filed against us other than routine legal proceedings incidental to our business.
Dividend Policy
The declaration, timing and amount of any dividend is subject to the discretion of our board of directors and will be dependent upon our earnings, financial condition, market prospects, capital expenditure requirements, investment opportunities, restrictions in our loan agreements, the provisions of the Marshall Islands law affecting the payment of dividends to shareholders, overall market conditions and other factors. We have not declared any dividends since our inception. Our board of directors may review and amend our dividend policy from time to time in light of our plans for future growth and other factors. In addition, since we are a holding company with no material assets other than the shares of our subsidiaries and affiliates through which we conduct our operations, our ability to pay dividends will depend on our subsidiaries and affiliates distributing to us their earnings and cash flow. Some of our loan agreements limit our ability to pay dividends and our subsidiaries' ability to make distributions to us.
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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 and class A warrants trade on the NASDAQ Capital Market under the symbol "SHIP" and "SHIPW" respectively.
B.   Plan of Distribution
Not applicable.
C.   Markets
Our common shares and class A warrants trade on the NASDAQ Capital Market under the symbol "SHIP" and "SHIPW" respectively.
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 amendment to the amended and restated articles of incorporation has been filed in the Annex to Seanergy Maritime's proxy statement filed with the Commission on Form 6-K on   March 19, 2019.  Those amended and restated articles of incorporation (as amended) 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 and Warrants" in our Registration Statement on Form F-1 (Registration No. 333-214322), declared effective by the Commission on December 7, 2016.
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C.   Material contracts
Attached as exhibits to this annual report are the contracts we consider to be both material and outside the ordinary course of business 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.
D.   Exchange controls
Under Marshall Islands law, there are currently no restrictions on the export or import of capital, including foreign exchange controls, or restrictions that affect the remittance of dividends, interest or other payments to non-resident holders of our common shares.
E.   Taxation
The following is a summary of the material U.S. federal income tax and Marshall Islands tax consequences of the ownership and disposition of our common stock as well as the material U.S. federal and Marshall Islands income tax consequences applicable to us and our operations. The discussion below of the U.S. federal income tax consequences to "U.S. Holders" will apply to a beneficial owner of our common stock and/or warrants 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 or warrants 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 or warrants, 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.
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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 and warrants 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;

·
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 own shares through an "applicable partnership interest";

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

·
persons that hold our common stock 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 and warrants 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 and warrants, including the applicability and effect of state, local and non-U.S. tax laws, as well as U.S. federal tax laws.
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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 2018 taxable year, we had U.S. source gross shipping income of approximately $827,000.
We are 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.  For our 2018 taxable year, we had U.S. source gross shipping income, on which we were subject to a U.S federal tax of $33,080.
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

·
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.
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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. Holders of warrants will not be treated as constructive owners of shares for purposes of the 50% Ownership Test.
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 does not satisfy both tests, the regulations provide that the trading frequency and trading volume tests will be deemed satisfied by a class of stock if such class of stock is traded on an established market in the United States and such class of stock is regularly quoted by dealers making a market in such stock.
Notwithstanding the foregoing, the regulations provide, in pertinent part, that a class of stock will not be considered to be "regularly traded" on an established securities market for any taxable year in which 50% or more of the vote and value of the outstanding shares of such class of stock are owned, actually or constructively under specified attribution rules, on more than half the days during the taxable year by persons who each own directly or indirectly 5% or more of the vote and value of such class of stock, 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.
Additionally, holders of warrants will not be treated as constructive owners of shares for purposes of the Closely Held Rule.
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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 with respect to any taxable year. We do not believe that we can satisfy that less than 50% of our shares were held for more than half of the days in the 2018 taxable year by non-qualified 5% Shareholders.
Due to the factual nature of the issues involved, there can be no assurance that we or any of our subsidiaries will qualify for the benefits of Section 883 of the Code for our subsequent taxable years.
Taxation in Absence of Exemption
To the extent the benefits of Section 883 are unavailable, our U.S. source gross shipping income, to the extent not considered to be "effectively connected" with the conduct of a U.S. trade or business, as described below, would be subject to a 4% tax imposed by Section 887 of the Code on a gross basis, without the benefit of deductions, otherwise referred to as the "4% Tax". Since under the sourcing rules described above, no more than 50% of our shipping income would be treated as being derived from U.S. sources, the maximum effective rate of U.S. federal income tax on our shipping income would never exceed 2% under the 4% Tax.
To the extent the benefits of the Section 883 exemption are unavailable and our U.S. source gross shipping income is considered to be "effectively connected" with the conduct of a U.S. trade or business, as described below, any such "effectively connected" U.S. source gross shipping income, net of applicable deductions, would be subject to the U.S. federal corporate income tax currently imposed at a rate of 21%. In addition, we may be subject to the 30% "branch profits" tax on earnings effectively connected with the conduct of such trade or business, as determined after allowance for certain adjustments, and 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.
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United States Federal Income Taxation of U.S. Holders
Taxation of Distributions Paid on Common Stock
Subject to the passive foreign investment company, or PFIC, rules discussed below, any distributions made by us with respect to common shares to a U.S. Holder will generally constitute dividends, which may be taxable as ordinary income or "qualified dividend income" as described in more detail below, to the extent of our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Distributions in excess of our earnings and profits will be treated first as a non-taxable return of capital to the extent of the U.S. Holder's tax basis in his common shares on a dollar-for-dollar basis and thereafter as capital gain. Because we are not a U.S. corporation, U.S. Holders that are corporations will generally not be entitled to claim a dividends-received deduction with respect to any distributions they receive from us.
Dividends paid on common shares to a U.S. Holder which is an individual, trust, or estate (a "U.S. Non-Corporate Holder") will generally be treated as "qualified dividend income" that is taxable to such shareholders at preferential U.S. federal income tax rates provided that (1) the common shares are readily tradable on an established securities market in the United States (such as the Nasdaq Capital Market on which the common shares are currently listed); (2) we are not a passive foreign investment company, or PFIC, for the taxable year during which the dividend is paid or the immediately preceding taxable year (which we do not believe we are, 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.
Exercise, Sale, Retirement or Other Taxable Disposition of Warrants
Neither we nor a U.S. Holder of a warrant will recognize gain or loss as a result of the U.S. Holder's receipt of our common stock upon exercise of a warrant. A U.S. Holder's adjusted tax basis in the common shares received will be an amount equal to the sum of (i) the U.S. Holder's adjusted tax basis in the warrant exercised plus (ii) the amount of the exercise price for the warrant. If the warrants lapse without exercise, the U.S. Holder will recognize capital loss in the amount equal to the U.S. Holder's adjusted tax basis in the warrants. A U.S. Holder's holding period for common shares received upon exercise of a warrant will commence on the date the warrant is exercised.
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Upon the sale, retirement or other taxable disposition of a warrant, the U.S. Holder will recognize gain or loss to the extent of the difference between the sum of the cash and the fair market value of any property received in exchange therefor and the U.S. Holder's tax basis in the warrant. Any such gain or loss recognized by a holder upon the sale, retirement or other taxable disposition of a warrant will be capital gain or loss and will be long-term capital gain or loss if the warrant has been held for more than one year.
The exercise price of a warrant is subject to adjustment under certain circumstances. If an adjustment increases a proportionate interest of the holder of a warrant in the fully diluted common stock without proportionate adjustments to the holders of our common stock, U.S. Holder of the warrants may be treated as having received a constructive distribution, which may be taxable to the U.S. Holder as a dividend.
Passive Foreign Investment Company Rules
Special U.S. federal income tax rules apply to a U.S. Holder that holds stock or warrants 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 or warrants, 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.
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.
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Taxation of U.S. Holders Making a Timely QEF Election
If a U.S. Holder makes a timely QEF election, which U.S. Holder is referred to as an "Electing Holder", the Electing Holder must report each year for U.S. federal income tax purposes 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. A U.S. Holder may not make a QEF election with respect to its ownership of a warrant.
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. The mark-to-market election is generally available to U.S. Holders of warrants.
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 or warrants 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 or warrants), and (2) any gain realized on the sale, exchange or other disposition of our common stock or warrants. 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 or warrants;

·
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.
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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 or warrants. 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 or warrants.
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 or warrants 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.
A Non-U.S. Holder will not recognize any gain or loss on the exercise or lapse of the warrants.
Backup Withholding and Information Reporting
In general, information reporting for U.S. federal income tax purposes should apply to distributions made on our common stock within the United States to a non-corporate U.S. Holder and to the proceeds from sales and other dispositions of our common stock to or through a U.S. office of a broker by a non-corporate U.S. Holder. Payments made (and sales and other dispositions effected at an office) outside the United States will be subject to information reporting in limited circumstances.
In addition, backup withholding of U.S. federal income tax, currently at a rate of 24%, generally should apply to distributions paid on our common stock to a non-corporate U.S. Holder and the proceeds from sales and other dispositions of our common stock by a non-corporate U.S. Holder, who:

·
fails to provide an accurate taxpayer identification number;

·
s 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.
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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 Commission filings are also available to the public at the website maintained by the Commission at http://www.sec.gov, as well as on our website at http://www.seanergymaritime.com.  Information on our website does not constitute a part of this annual report and is not incorporated by reference.
We will also provide without charge to each person, including any beneficial owner of our common stock, upon written or oral request of that person, a copy of any and all of the information that has been incorporated by reference in this annual report.  Please direct such requests to Investor Relations, Seanergy Maritime Holdings Corp., 154 Vouliagmenis Avenue, 166 74 Glyfada, Athens, Greece, telephone number +30 213 0181507 or facsimile number +30 210 9638404.
I.   Subsidiary information
Not applicable.
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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, 2018, we had aggregate variable-rate borrowings, including the convertible notes issued to Jelco, of $204.5 million.  An increase of 1% in the interest rates of our variable-rate borrowings, including the convertible notes issued to Jelco, as of December 31, 2018 would increase our interest payments $2.2 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 2% in 2018) and the slight majority of our general and administrative expenses (approximately 59% in 2018) 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 2018, these non-US dollar expenses represented 5% 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 OR 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.
87


ITEM 15.
CONTROLS AND PROCEDURES
(a)   Disclosure Controls and Procedures
Management (our Chief Executive Officer and our Chief Financial Officer) has evaluated the effectiveness of the design and operation of the Company's disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) under the U.S. Securities Exchange Act of 1934, as amended, or the Exchange Act, as of the end of the period covered by this annual report (as of December 31, 2018).  The term disclosure controls and procedures is defined under the Commission's rules as controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms.  Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company's management (our Chief Executive Officer and our Chief Financial Officer, or persons performing similar functions) as appropriate to allow timely decisions regarding required disclosure.  There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures.  Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives.
Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that our disclosure controls and procedures are effective as of the evaluation date.
(b)   Management's Annual Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as such term is identified in Exchange Act Rule 13a-15(f).  Our internal control over financial reporting is a process designed under the supervision of our Chief Executive Officer and our Chief Financial Officer and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for external reporting purposes in accordance with U.S. GAAP.
Internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that receipts and expenditures are being made only in accordance with the authorization of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company's assets that could have a material effect on the consolidated financial statements.
Management (our Chief Executive Officer and our Chief Financial Officer), has assessed the effectiveness of our internal control over financial reporting as of December 31, 2018, 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, 2018.
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.
88


(c)   Attestation Report of the Registered Public Accounting Firm
Not applicable.
(d)   Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting during the year covered by this annual report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
ITEM 16.
[RESERVED]
ITEM 16A.
AUDIT COMMITTEE FINANCIAL EXPERT
Our board of directors has determined that Mr. Dimitrios Anagnostopoulos, an independent director and a member of our audit committee, is an "Audit Committee Financial Expert" under Commission rules and the corporate governance rules of the NASDAQ Stock Market.
ITEM 16B.
CODE OF ETHICS
We have adopted a Code of Business Conduct and Ethics that applies to our employees, officers and directors.  Our Code of Business Conduct and Ethics is available on the Corporate Governance section of our website at www.seanergymaritime.com.  Information on our website does not constitute a part of this annual report and is not incorporated by reference.  We will also provide a hard copy of our Code of Business Conduct and Ethics free of charge upon written request.  We intend to disclose any waivers to or amendments of the Code of Business Conduct and Ethics for the benefit of any of our directors and executive officers within 5 business days of such waiver or amendment.  Shareholders may direct their requests to the attention of Investor Relations, Seanergy Maritime Holdings Corp., 154 Vouliagmenis Avenue, 16674 Glyfada, Athens, Greece, telephone number +30 213 0181507 or facsimile number +30 210 9638404.
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:
 
 
2018
   
2017
 
Audit fees
 
$
199,000
   
$
202,000
 
Audit related fees
   
38,000
     
129,000
 
Tax fees
   
-
     
-
 
All other fees
   
-
     
-
 
Total fees
 
$
237,000
   
$
331,000
 



Audit fees for 2018 and 2017 related to professional services rendered for the audit of our financial statements for the years ended December 31, 2018 and 2017, respectively. Audit related fees for 2018 and 2017 related to services provided related to our equity offerings during 2018 and 2017, 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.
89


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 shares to certain of our affiliates.
ITEM 16F.
CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT
None.
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 ways:

·
In lieu of obtaining shareholder approval prior to the issuance of designated securities or the adoption of equity compensation plans or material amendments to such equity compensation plans, we will comply with provisions of the BCA, providing that the board of directors approve share issuances and adoptions of and material amendments to equity compensation plans. Likewise, in lieu of obtaining shareholder approval prior to the issuance of securities in certain circumstances, consistent with the BCA and our amended and restated articles of incorporation and second amended and restated bylaws, the board of directors approves certain share issuances.

·
The Company's board of directors is not required to have an Audit Committee comprised of at least three members. Our Audit Committee is comprised of two members.

·
The Company's board of directors is not required to meet regularly in executive sessions without management present.

·
As a foreign private issuer, we are not required to solicit proxies or provide proxy statements to Nasdaq pursuant to Nasdaq corporate governance rules or Marshall Islands law. Consistent with Marshall Islands law and as provided in our second amended and restated bylaws, we will notify our shareholders of meetings between 15 and 60 days before the meeting. This notification will contain, among other things, information regarding business to be transacted at the meeting.
Other than as noted above, we are in full compliance with all other applicable NASDAQ corporate governance standards.
ITEM 16H.
MINE SAFETY DISCLOSURE
Not applicable.
90


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-34 and are filed as part of this annual report.
ITEM 18.1
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF SEANERGY MARITIME HOLDINGS CORP. (PARENT COMPANY ONLY)
The Schedule I, beginning on page F-30, is filed as part of this report.
ITEM 19.
EXHIBITS
Exhibit Number
Description
 
 
1.1
   
1.2
   
1.3
   
1.4
   
1.5
   
1.6
   
1.7
   
1.8
   
2.1
   
4.1
   
4.2
   
4.3
   
4.4
   
91

4.5
   
4.6
   
4.7
   
4.8
   
4.9
   
4.10
   
4.11
   
4.12
   
4.13
   
4.14
   
4.15
   
4.16
   
4.17
   
4.18
   
4.19
   
4.20
   
4.21
   
4.22
92

   
4.23
   
4.24
   
4.25
   
4.26
   
4.27
   
4.28
   
4.29
   
4.30
   
4.31
   
4.32
   
4.33
   
4.34
   
4.35
   
4.36
   
4.37
   
4.38
   
4.39
   
4.40
93

   
4.41
   
4.42
   
4.43
   
4.44
   
4.45
   
4.46
   
4.47
   
4.48
   
4.49
   
4.50
   
4.51
   
4.52
   
4.53
   
4.54
   
4.55
   
4.56
94

   
4.57
   
4.58
   
4.59
   
4.60
   
4.61
   
4.62
   
4.63
   
4.64
   
4.65
   
4.66
   
4.67
   
4.68
   
4.69
   
4.70
   
4.71
   
4.72
   
4.73
95

   
4.74
   
4.75
   
4.76
   
4.77
   
4.78
   
4.79
   
4.80
   
4.81
   
4.82
   
4.83
   
4.84
   
4.85
   
4.86
   
4.87
   
4.88
   
4.89
96

   
4.90
   
4.91
   
4.92
   
4.93
   
4.94
   
4.95
   
8.1
   
12.1
   
12.2
   
13.1
   
13.2
   
15.1
   
101
The following financial information from the registrant's annual report on Form 20-F for the fiscal year ended December 31, 2018, formatted in Extensible Business Reporting Language (XBRL)*
 
(1) Consolidated Balance Sheets as of December 31, 2018 and 2017;
 
(2) Consolidated Statements of Income/(loss) for the years ended December 31, 2018, 2017 and 2016;
 
(3) Consolidated Statements of Shareholders' (Deficit) / Equity for the years ended December 31, 2018, 2017 and 2016; and
 
(4) Consolidated Statements of Cash Flows for the years ended December 31, 2018, 2017 and 2016.

*
Filed herewith
(1)
Incorporated herein by reference to Annex M to Exhibit 99.1 to the registrant'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.
97

(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 3.8 to the registrant’s report on Form 6-K filed with the Commission on March 19, 2019.
(9)
Incorporated herein by reference to Exhibit 4.1 to the registrant's report on Form 6-K filed with the Commission on March 19, 2019.
(10)
Incorporated herein by reference to Exhibit 4.1 to the registrant's annual report on Form 20-F filed with the Commission on April 28, 2017.
(11)
Incorporated herein by reference to Exhibit 4.2 to the registrant's annual report on Form 20-F filed with the Commission on April 28, 2017.
(12)
Incorporated herein by reference to Exhibit C to the Schedule 13D/A related to the registrant filed by United Capital Investments Corp. with the Commission on September 12, 2014.
(13)
Incorporated herein by reference to Exhibit D to the Schedule 13D related to the registrant filed by Jelco Delta Holding Corp. with the Commission on March 12, 2015.
(14)
Incorporated herein by reference to Exhibit 4.5 to the registrant's annual report on Form 20-F filed with the Commission on March 7, 2018.
(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 4.10 to the registrant's annual report on Form 20-F filed with the Commission on April 20, 2016.
(17)
Incorporated herein by reference to Exhibit 4.11 to the registrant's annual report on Form 20-F filed with the Commission on April 20, 2016.
(18)
Incorporated herein by reference to Exhibit 10.9 to the registrant's registration statement on Form F-1 filed with the Commission on November 8, 2018.
(19)
Incorporated herein by reference to Exhibit 10.10 to the registrant's registration statement on Form F-1 filed with the Commission on November 8, 2018.
(20)
Incorporated herein by reference to Exhibit 4.12 to the registrant's annual report on Form 20-F filed with the Commission on April 20, 2016.
(21)
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.
(22)
Incorporated herein by reference to Exhibit 4.14 to the registrant's annual report on Form 20-F filed with the Commission on April 20, 2016.
(23)
Incorporated herein by reference to Exhibit 4.15 to the registrant's annual report on Form 20-F filed with the Commission on April 20, 2016.
(24)
Incorporated herein by reference to Exhibit 4.13 to the registrant's annual report on Form 20-F filed with the Commission on March 7, 2018.
(25)
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.
(26)
Incorporated herein by reference to Exhibit 4.17 to the registrant's annual report on Form 20-F filed with the Commission on April 20, 2016.
(27)
Incorporated herein by reference to Exhibit 10.18 to the registrant's registration statement on Form F-1 filed with the Commission on October 28, 2016.
(28)
Incorporated herein by reference to Exhibit 10.19 to the registrant's registration statement on Form F-1 filed with the Commission on November 8, 2018.
(29)
Incorporated herein by reference to Exhibit B to the Schedule 13D/A related to the registrant filed by Jelco Delta Holding Corp. with the Commission on April 13, 2015.
(30)
Incorporated herein by reference to Exhibit 10.17 to the registrant's registration statement on Form F-1 filed with the Commission on October 20, 2017.
(31)
Incorporated herein by reference to Exhibit 10.18 to the registrant's registration statement on Form F-1 filed with the Commission on October 20, 2017.
(32)
Incorporated herein by reference to Exhibit B to the Schedule 13D/A related to the registrant filed by Jelco Delta Holding Corp. with the Commission on October 20, 2017.
(33)
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.
98

(34)
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.
(35)
Incorporated herein by reference to Exhibit 4.38 to the registrant's annual report on Form 20-F filed with the Commission on April 20, 2016.
(36)
Incorporated herein by reference to Exhibit 10.43 to the registrant's registration statement on Form F-1 filed with the Commission on October 28, 2016.
(37)
Incorporated herein by reference to Exhibit 4.43 to the registrant's annual report on Form 20-F filed with the Commission on April 28, 2017.
(38)
Incorporated herein by reference to Exhibit 10.29 to the registrant's registration statement on Form F-1 filed with the Commission on November 8, 2018.
(39)
Incorporated herein by reference to Exhibit B to the Schedule 13D/A related to the registrant filed by Jelco Delta Holding Corp. with the Commission on October 29, 2015.
(40)
Incorporated herein by reference to Exhibit C to the Schedule 13D/A related to the registrant filed by Jelco Delta Holding Corp. with the Commission on December 29, 2015.
(41)
Incorporated herein by reference to Exhibit D to the Schedule 13D/A related to the registrant filed by Jelco Delta Holding Corp. with the Commission on December 29, 2015.
(42)
Incorporated herein by reference to Exhibit A to the Schedule 13D/A related to the registrant filed by Jelco Delta Holding Corp. with the Commission on February 11, 2016.
(43)
Incorporated herein by reference to Exhibit A to the Schedule 13D/A related to the registrant filed by Jelco Delta Holding Corp. with the Commission on March 14, 2016.
(44)
Incorporated herein by reference to Exhibit 10.1 to the registrant's report on Form 6-K filed with the Commission on August 5, 2016.
(45)
Incorporated herein by reference to Exhibit 10.2 to the registrant's report on Form 6-K filed with the Commission on August 5, 2016.
(46)
Incorporated herein by reference to Exhibit 10.3 to the registrant's report on Form 6-K filed with the Commission on August 5, 2016.
(47)
Incorporated herein by reference to Exhibit A to the Schedule 13D/A related to the registrant filed by Jelco Delta Holding Corp. with the Commission on April 7, 2017.
(48)
Incorporated herein by reference to Exhibit 10.34 to the registrant's registration statement on Form F-1 filed with the Commission on October 20, 2017.
(49)
Incorporated herein by reference to Exhibit C to the Schedule 13D/A related to the registrant filed by Jelco Delta Holding Corp. with the Commission on October 20, 2017.
(50)
Incorporated herein by reference to Exhibit 10.41 to the registrant's registration statement on Form F-1 filed with the Commission on November 8, 2018.
(51)
Incorporated herein by reference to Exhibit 4.39 to the registrant's annual report on Form 20-F filed with the Commission on April 20, 2016.
(52)
Incorporated herein by reference to Exhibit 10.45 to the registrant's registration statement on Form F-1 filed with the Commission on October 28, 2016.
(53)
Incorporated herein by reference to Exhibit 10.46 to the registrant's registration statement on Form F-1 filed with the Commission on October 28, 2016.
(54)
Incorporated herein by reference to Exhibit 4.47 to the registrant's annual report on Form 20-F filed with the Commission on April 28, 2017.
(55)
Incorporated herein by reference to Exhibit 10.40 to the registrant's registration statement on Form F-1 filed with the Commission on October 20, 2017.
(56)
Incorporated herein by reference to Exhibit 10.47 to the registrant's registration statement on Form F-1 filed with the Commission on November 8, 2018.
(57)
Incorporated herein by reference to Exhibit 10.48 to the registrant's registration statement on Form F-1 filed with the Commission on November 8, 2018.
(58)
Incorporated herein by reference to Exhibit 4.40 to the registrant's annual report on Form 20-F filed with the Commission on April 20, 2016.
(59)
Incorporated herein by reference to Exhibit 10.48 to the registrant's registration statement on Form F-1 filed with the Commission on October 28, 2016.
(60)
Incorporated herein by reference to Exhibit 10.51 to the registrant's registration statement on Form F-1 filed with the Commission on November 8, 2018.
99

(61)
Incorporated herein by reference to Exhibit 10.52 to the registrant's registration statement on Form F-1/A filed with the Commission on November 29, 2016
(62)
Incorporated herein by reference to Exhibit 4.56 to the registrant's annual report on Form 20-F filed with the Commission on April 28, 2017.
(63)
Incorporated herein by reference to Exhibit 4.57 to the registrant's annual report on Form 20-F filed with the Commission on April 28, 2017.
(64)
Incorporated herein by reference to Exhibit 10.57 to the registrant's registration statement on Form F-1 filed with the Commission on October 20, 2017.
(65)
Incorporated herein by reference to Exhibit 10.58 to the registrant's registration statement on Form F-1 filed with the Commission on October 20, 2017.
(66)
Incorporated herein by reference to Exhibit 10.59 to the registrant's registration statement on Form F-1 filed with the Commission on October 20, 2017.
(67)
Incorporated herein by reference to Exhibit 10.60 to the registrant's registration statement on Form F-1 filed with the Commission on October 20, 2017.
(68)
Incorporated herein by reference to Exhibit A to the Schedule 13D/A related to the registrant filed by Jelco Delta Holding Corp. with the Commission on October 20, 2017.
(69)
Incorporated herein by reference to Exhibit D to the Schedule 13D/A related to the registrant filed by Jelco Delta Holding Corp. with the Commission on October 20, 2017.
(70)
Incorporated herein by reference to Exhibit 10.79 to the registrant's registration statement on Form F-1 filed with the Commission on November 8, 2018.
(71)
Incorporated herein by reference to Exhibit 10.80 to the registrant's registration statement on Form F-1 filed with the Commission on November 8, 2018.
(72)
Incorporated herein by reference to Exhibit 10.81 to the registrant's registration statement on Form F-1 filed with the Commission on November 8, 2018.
(73)
Incorporated herein by reference to Exhibit 10.82 to the registrant's registration statement on Form F-1 filed with the Commission on November 8, 2018.
(74)
Incorporated herein by reference to Exhibit 10.83 to the registrant's registration statement on Form F-1 filed with the Commission on November 8, 2018.
(75)
Incorporated herein by reference to Exhibit 10.84 to the registrant's registration statement on Form F-1 filed with the Commission on November 8, 2018.
(76)
Incorporated herein by reference to Exhibit 10.85 to the registrant's registration statement on Form F-1 filed with the Commission on November 8, 2018.
(77)
Incorporated herein by reference to Exhibit 10.86 to the registrant's registration statement on Form F-1 filed with the Commission on November 8, 2018.
(78)
Incorporated herein by reference to Exhibit 10.87 to the registrant's registration statement on Form F-1 filed with the Commission on November 8, 2018.
(79)
Incorporated herein by reference to Exhibit 10.88 to the registrant's registration statement on Form F-1 filed with the Commission on November 8, 2018.
(80)
Incorporated herein by reference to Exhibit 10.89 to the registrant's registration statement on Form F-1 filed with the Commission on November 8, 2018.
(81)
Incorporated herein by reference to Exhibit 10.90 to the registrant's registration statement on Form F-1 filed with the Commission on November 8, 2018.
(82)
Incorporated herein by reference to Exhibit 10.91 to the registrant's registration statement on Form F-1 filed with the Commission on November 8, 2018.
(83)
Incorporated herein by reference to Exhibit 10.92 to the registrant's registration statement on Form F-1 filed with the Commission on November 8, 2018.
(84)
Incorporated herein by reference to Exhibit 10.93 to the registrant's registration statement on Form F-1 filed with the Commission on November 8, 2018.
(85)
Incorporated herein by reference to Exhibit 10.94 to the registrant's registration statement on Form F-1 filed with the Commission on November 8, 2018.
(86)
Incorporated herein by reference to Exhibit 10.95 to the registrant's registration statement on Form F-1 filed with the Commission on November 8, 2018.
(87)
Incorporated herein by reference to Exhibit 10.96 to the registrant's registration statement on Form F-1 filed with the Commission on November 8, 2018.










100




SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.
 
SEANERGY MARITIME HOLDINGS CORP.
 
 
 
 
By:
/s/ Stamatios Tsantanis
 
 
Name:
Stamatios Tsantanis
 
 
Title:
Chairman & Chief Executive Officer








Date: March 22, 2019





INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

   
Page
     
Report of Independent Registered Public Accounting Firm
 
F-2
     
Consolidated Balance Sheets as of December 31, 2018 and 2017
 
F-3
     
Consolidated Statements of Loss for the years ended December 31, 2018, 2017 and 2016
 
F-4
     
Consolidated Statements of Stockholders' Equity for the years ended December 31, 2018, 2017 and 2016
 
F-5
     
Consolidated Statements of Cash Flows for the years ended December 31, 2018, 2017 and 2016
 
F-6
     
Notes to Consolidated Financial Statements
 
F-7




Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of Seanergy Maritime Holdings Corp.

Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Seanergy Maritime Holdings Corp. (the Company) as of December 31, 2018 and 2017, the related consolidated statements of loss, stockholders' equity and cash flows for each of the three years in the period ended December 31, 2018, and the related notes and financial statement schedule listed in the Index at Item 18.1 (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2018 and 2017, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2018, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting 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.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Ernst & Young (Hellas) Certified Auditors-Accountants S.A.

We have served as the Company's auditor since 2012.

Athens, Greece
March 22, 2019
F-2
Seanergy Maritime Holdings Corp.
Consolidated Balance Sheets
December 31, 2018 and 2017
 (In thousands of US Dollars, except for share and per share data)

   
Notes
   
2018
   
2017
 
ASSETS
                 
Current assets:
                 
     Cash and cash equivalents
   
2, 4
     
6,684
     
8,889
 
     Restricted cash
   
4, 7
     
260
     
1,550
 
     Accounts receivable trade, net
   
2
     
2,649
     
3,626
 
     Inventories
   
5
     
5,289
     
4,797
 
      Prepaid expenses and other current assets
           
1,594
     
636
 
     Deferred voyage expenses
   
2
     
407
     
-
 
Total current assets
           
16,883
     
19,498
 
                         
Fixed assets:
                       
     Vessels, net
   
6
     
243,214
     
254,730
 
     Other fixed assets, net
           
503
     
-
 
     Right of use asset - leases
   
9
     
615
     
-
 
Total fixed assets
           
244,332
     
254,730
 
                         
Other non-current assets:
                       
     Deposits assets, non-current
   
7
     
3,495
     
-
 
     Deferred charges, non-current
    2(p)
     
2,323
     
846
 
     Restricted cash, non-current
   
4, 7
     
500
     
600
 
     Other non-current assets
   
7
     
29
     
31
 
TOTAL ASSETS
           
267,562
     
275,705
 
                         
LIABILITIES AND STOCKHOLDERS EQUITY
                       
Current liabilities:
                       
     Current portion of long-term debt and other financial liabilities, net of deferred finance costs of $1,078 and $362, respectively
   
7, 14
     
16,195
     
19,216
 
     Trade accounts and other payables
   
2
     
14,426
     
8,778
 
     Accrued liabilities
           
4,634
     
4,725
 
     Lease liability
   
2
     
118
     
-
 
     Deferred revenue
   
2
     
890
     
1,741
 
Total current liabilities
           
36,263
     
34,460
 
                         
Non-current liabilities:
                       
     Long-term debt and other financial liabilities, net of current portion and deferred finance costs of $2,308 and $1,067, respectively
   
7, 14
     
179,026
     
175,805
 
     Due to related parties, non-current
   
3, 14
     
19,349
     
17,342
 
     Long-term portion of convertible  notes
   
3
     
11,124
     
6,785
 
     Lease liability, non-current
   
2
     
497
     
-
 
Total liabilities
           
246,259
     
234,392
 
                         
Commitments and contingencies
   
9
     
-
     
-
 
                         
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, 2018 and 2017; 2,666,223 and 2,465,289 shares issued and outstanding as at December 31, 2018 and 2017, respectively
   
10
     
-
     
-
 
     Additional paid-in capital
   
3
     
385,846
     
383,010
 
     Accumulated deficit
   
2
     
(364,543
)
   
(341,697
)
Total Stockholders' equity
           
21,303
     
41,313
 
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
           
267,562
     
275,705
 

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

Seanergy Maritime Holdings Corp.
Consolidated Statements of Loss
For the years ended December 31, 2018, 2017 and 2016
(In thousands of US Dollars, except for share and per share data)

   
Notes
   
2018
   
2017
   
2016
 
Revenues:
                       
Vessel revenue
         
94,859
     
77,710
     
35,983
 
Commissions
         
(3,339
)
   
(2,876
)
   
(1,321
)
Vessel revenue, net
         
91,520
     
74,834
     
34,662
 
Expenses:
                             
Voyage expenses
         
(40,184
)
   
(34,949
)
   
(21,008
)
Vessel operating expenses
         
(20,742
)
   
(19,598
)
   
(14,251
)
Management fees
         
(1,042
)
   
(1,016
)
   
(895
)
General and administration expenses
         
(6,500
)
   
(5,081
)
   
(4,134
)
Amortization of deferred dry-docking costs
         
(634
)
   
(870
)
   
(556
)
Depreciation
         
(10,876
)
   
(10,518
)
   
(8,531
)
Impairment loss
   
6
     
(7,267
)
   
-
     
-
 
Operating income / (loss)
           
4,275
     
2,802
     
(14,713
)
Other income / (expenses), net:
                               
Interest and finance costs
   
11
     
(16,415
)
   
(12,277
)
   
(7,235
)
Interest and finance costs - related party
   
3 & 11
     
(8,881
)
   
(5,122
)
   
(2,616
)
Gain on debt refinancing
   
7
     
-
     
11,392
     
-
 
Interest and other income
           
83
     
47
     
20
 
Foreign currency exchange losses, net
           
(104
)
   
(77
)
   
(45
)
Total other expenses, net
           
(25,317
)
   
(6,037
)
   
(9,876
)
Net loss before income taxes
           
(21,042
)
   
(3,235
)
   
(24,589
)
Income taxes
           
(16
)
   
-
     
(34
)
Net loss
           
(21,058
)
   
(3,235
)
   
(24,623
)
                                 
Net loss per common share
                               
Basic
   
12
     
(8.40
)
   
(1.35
)
   
(17.97
)
Weighted average common shares outstanding
                               
Basic
   
12
     
2,507,087
     
2,389,719
     
1,370,200
 
                                 

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, 2018, 2017 and 2016
 (In thousands of US Dollars, except for share data)

   
Common stock
                   
   
# of Shares
   
Par Value
   
Additional paid-in capital
   
Accumulated deficit
   
Total stockholders'
equity
 
                               
Balance, January 1, 2016
   
1,301,494
     
-
     
337,123
     
(313,839
)
   
23,284
 
Issuance of common stock and warrants (Note 10)
   
918,998
     
-
     
22,147
     
-
     
22,147
 
Issuance of convertible  notes (Note 3)
   
-
     
-
     
9,400
     
-
     
9,400
 
Stock based compensation (Note 13)
   
50,987
     
-
     
624
     
-
     
624
 
Net loss
   
-
     
-
     
-
     
(24,623
)
   
(24,623
)
Balance, December 31, 2016
   
2,271,479
     
-
     
369,294
     
(338,462
)
   
30,832
 
Issuance of common stock (Note 10)
   
193,810
     
-
     
2,597
     
-
     
2,597
 
Issuance of convertible  notes (Note 3)
   
-
     
-
     
10,389
     
-
     
10,389
 
Stock based compensation (Note 13)
   
-
     
-
     
730
     
-
     
730
 
Net loss
   
-
     
-
     
-
     
(3,235
)
   
(3,235
)
Balance, December 31, 2017
   
2,465,289
     
-
     
383,010
     
(341,697
)
   
41,313
 
Adoption of revenue recognition accounting policy adjustment (Note 2)
   
-
     
-
     
-
     
(1,788
)
   
(1,788
)
Stock based compensation (Note 13)
   
80,934
     
-
     
1,295
     
-
     
1,295
 
Issuance of common stock (Note 7)
   
120,000
     
-
     
1,541
     
-
     
1,541
 
Net loss
   
-
     
-
     
-
     
(21,058
)
   
(21,058
)
Balance, December 31, 2018
   
2,666,223
     
-
     
385,846
     
(364,543
)
   
21,303
 
                                         

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, 2018, 2017 and 2016
 (In thousands of US Dollars)

   
2018
   
2017
   
2016
 
Cash flows from operating activities:
                 
Net loss
   
(21,058
)
   
(3,235
)
   
(24,623
)
Adjustments to reconcile net loss to net cash provided by / (used in) operating activities:
                       
Depreciation
   
10,876
     
10,518
     
8,531
 
Amortization of deferred dry-docking costs
   
634
     
870
     
556
 
Amortization of deferred finance charges
   
1,117
     
531
     
265
 
Amortization of convertible  note beneficial conversion feature
   
4,339
     
2,127
     
1,163
 
Stock based compensation
   
1,295
     
730
     
624
 
Amortization of other deferred charges
   
63
     
-
     
-
 
Gain on debt refinancing
   
-
     
(11,392
)
   
-
 
Impairment loss
   
7,267
     
-
     
-
 
Changes in operating assets and liabilities:
                       
Accounts receivable trade, net
   
(511
)
   
(843
)
   
(1,496
)
Inventories
   
(492
)
   
(748
)
   
(1,069
)
Prepaid expenses and other current assets
   
(958
)
   
453
     
(432
)
Deferred voyage expenses
   
(707
)
   
-
     
-
 
Deferred charges, non-current
   
(32
)
   
(144
)
   
(934
)
Other non-current assets
   
2
     
(26
)
   
(5
)
Trade accounts and other payables
   
5,499
     
2,345
     
371
 
Accrued liabilities
   
(760
)
   
1,705
     
14
 
Deferred revenue
   
(851
)
   
(109
)
   
1,696
 
Net cash provided by / (used in) operating activities
   
5,723
     
2,782
     
(15,339
)
Cash flows from investing activities:
                       
Vessels acquisitions and improvements
   
(30,921
)
   
(32,992
)
   
(40,779
)
Net proceeds from sale of vessels
   
22,652
     
-
     
-
 
Other fixed assets, net
   
(558
)
   
-
     
-
 
Net cash used in investing activities
   
(8,827
)
   
(32,992
)
   
(40,779
)
Cash flows from financing activities:
                       
Net proceeds from issuance of common stock and warrants
   
-
     
2,637
     
22,606
 
Proceeds from long term debt
   
67,130
     
34,500
     
32,000
 
Proceeds from convertible  notes
   
-
     
9,000
     
9,400
 
Proceeds from related party debt
   
2,000
     
16,200
     
12,800
 
Repayments of related party debt
   
-
     
-
     
(6,900
)
Payments of financing costs
   
(1,153
)
   
(561
)
   
(584
)
Repayments of long term debt
   
(68,468
)
   
(36,435
)
   
(650
)
Net cash (used in) / provided by financing activities
   
(491
)
   
25,341
     
68,672
 
Net (decrease) / increase in cash and cash equivalents and restricted cash
   
(3,595
)
   
(4,869
)
   
12,554
 
Cash and cash equivalents and restricted cash at beginning of period
   
11,039
     
15,908
     
3,354
 
Cash and cash equivalents and restricted cash at end of period
   
7,444
     
11,039
     
15,908
 
                         
SUPPLEMENTAL CASH FLOW INFORMATION
                       
Cash paid during the period for:
                       
Interest
   
18,504
     
14,661
     
7,973
 
Deposits
   
4,075
     
-
     
-
 
                         
Noncash financing activities:
                       
Shares issued in connection with financing
    1,541
      -
      -
 
Conversion of related party debt into convertible note
   
-
     
(4,750
)
   
-
 

The accompanying notes are an integral part of these consolidated financial statements .
F-6

Seanergy Maritime Holdings Corp.
Notes To The Consolidated Financial Statements
(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)

1.
Basis of Presentation and General Information:
Seanergy Maritime Holdings Corp. (the "Company" or "Seanergy") was formed under the laws of the Republic of the Marshall Islands on January 4, 2008, with executive offices located in Athens, Greece and an office in Hong Kong. The Company provides global transportation solutions in the dry bulk shipping sector through its vessel-owning subsidiaries.
The accompanying consolidated financial statements include the accounts of Seanergy Maritime Holdings Corp. and its subsidiaries (collectively, the "Company" or "Seanergy") .

Reverse stock split
On March 20, 2019, the Company's common stock began trading on a split-adjusted basis, following a February 26, 2019 approval from the Company's Board of Directors to reverse split the Company's common stock at a ratio of one-for-fifteen. No fractional shares were issued in connection with the reverse split. Shareholders who would otherwise hold a fractional share of the Company’s common stock will receive a cash payment in lieu of such fractional share (Note 14h). 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.
a.
Subsidiaries in Consolidation:
Seanergy's subsidiaries included in these consolidated financial statements as of December 31, 2018:
Company
 
Country of Incorporation
   
Vessel name
 
Date of Delivery
 
Date of Sale/Disposal
 
Seanergy Management Corp.(1)(3)
 
Marshall Islands
   
N/A
 
N/A
 
N/A
 
Seanergy Shipmanagement Corp.(1)(3)
 
Marshall Islands
   
N/A
 
N/A
 
N/A
 
Sea Glorius Shipping Co.(1)
 
Marshall Islands
   
Gloriuship
 
November 3, 2015
 
N/A
 
Sea Genius Shipping Co.(1)
 
Marshall Islands
   
Geniuship
 
October 13, 2015
 
N/A
 
Leader Shipping Co.(1)
 
Marshall Islands
   
Leadership
 
March 19, 2015
 
N/A
 
Premier Marine Co.(1)
 
Marshall Islands
   
Premiership
 
September 11, 2015
 
N/A
 
Gladiator Shipping Co.(1)(Note 6)
 
Marshall Islands
   
Gladiatorship
 
September 29, 2015
 
October 11, 2018
 
Guardian Shipping Co.(1)(Note 6)
 
Marshall Islands
   
Guardianship
 
October 21, 2015
 
November 19, 2018
 
Champion Ocean Navigation Co. Limited (1)(6)(8)
 
Malta
   
Championship
 
December 7, 2015
 
November 7, 2018
 
Squire Ocean Navigation Co.(1)
 
Liberia
   
Squireship
 
November 10, 2015
 
N/A
 
Emperor Holding Ltd.(1)
 
Marshall Islands
   
N/A
 
N/A
 
N/A
 
Knight Ocean Navigation Co.(1)(8)(Note 7)
 
Liberia
   
Knightship
 
December 13, 2016
 
June 29, 2018
 
Lord Ocean Navigation Co.(1)
 
Liberia
   
Lordship
 
November 30, 2016
 
N/A
 
Partner Shipping Co. Limited (1)(7)
 
Malta
   
Partnership
 
May 31, 2017
 
N/A
 
Pembroke Chartering Services Limited (1)(4)
 
Malta
   
N/A
 
N/A
 
N/A
 
Martinique International Corp. (1)(5)
 
British Virgin Islands
   
Bremen Max
 
September 11, 2008
 
March 7, 2014
 
Harbour Business International Corp. (1)(5)
 
British Virgin Islands
   
Hamburg Max
 
September 25, 2008
 
March 10, 2014
 
Maritime Capital Shipping Limited (1)
 
Bermuda
   
N/A
 
N/A
 
N/A
 
Maritime Capital Shipping (HK) Limited (3)
 
Hong Kong
   
N/A
 
N/A
 
N/A
 
Maritime Glory Shipping Limited (2)
 
British Virgin Islands
   
Clipper Glory
 
May 21, 2010
 
December 4, 2012
 
Maritime Grace Shipping Limited (2)
 
British Virgin Islands
   
Clipper Grace
 
May 21, 2010
 
October 15, 2012
 
Atlantic Grace Shipping Limited (5)
 
British Virgin Islands
   
N/A
 
N/A
 
N/A
 
Fellow Shipping Co. (1)(Note 6)
 
Marshall Islands
   
Fellowship
 
November 22, 2018
 
N/A
 
Champion Marine Co. (1)
 
Liberia
   
N/A
 
N/A
 
N/A
 
Champion Marine Co. (1)
 
Marshall Islands
   
N/A
 
N/A
 
N/A
 
                     

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 and warrants data, unless otherwise stated)


(1) Subsidiaries wholly owned
(2) Vessel owning subsidiaries owned by Maritime Capital Shipping Limited (or " MCS")
(3) Management companies
(4) Chartering services company
(5) Dormant companies
(6) Previously known as Champion Ocean Navigation Co., of the Republic of Liberia and redomiciled to the Republic of Malta on May 23, 2018
(7) Previously known as Partner Shipping Co., of the Republic of the Marshall Islands and redomiciled to the Republic of Malta on May 23, 2018
(8) Vessels under bareboat charter


2.
Significant Accounting Policies:
(a)
Principles of Consolidation
The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP) and include the accounts and operating results of Seanergy and its wholly-owned subsidiaries where Seanergy has control. Control is presumed to exist when Seanergy, through direct or indirect ownership, retains the majority of the voting interest. In addition, Seanergy evaluates its relationships with other entities to identify whether they are variable interest entities and to assess whether it is the primary beneficiary of such entities. If the determination is made that the Company is the primary beneficiary, then that entity is included in the consolidated financial statements. When the Company does not have a controlling interest in an entity, but exerts a significant influence over the entity, the Company applies the equity method of accounting. All 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.
The Company deconsolidates a subsidiary or derecognizes a group of assets when the Company no longer controls the subsidiary or group of assets specified in Accounting Standards Codification (ASC or Codification) 810-10-40-3A. When control is lost,  the Company derecognizes the assets and liabilities of the qualifying subsidiary or group of assets. 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.
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 and warrants data, unless otherwise stated)

(c)
Foreign Currency Translation
Seanergy's functional currency is the United States dollar since the Company's vessels operate in international shipping markets and therefore primarily transact business in U.S. Dollars. The Company's books of accounts are maintained in U.S. Dollars. Transactions involving other currencies are translated into the United States dollar using exchange rates that are in effect at the time of the transaction. At the balance sheet dates, monetary assets and liabilities, which are denominated in other currencies, are translated to United States dollars at the foreign exchange rate prevailing at year-end. Gains or losses resulting from foreign currency translation are reflected in the consolidated statement of 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 the financial condition of its customers.
(e)
Cash and Cash Equivalents
Seanergy considers time deposits and all highly liquid investments with an original maturity of three months or less to be cash equivalents.
(f)
Restricted Cash
Restricted cash is excluded from cash and cash equivalents. Restricted cash represents minimum cash deposits or cash collateral deposits required to be maintained with certain banks under the Company's borrowing arrangements or in relation to bank guarantees issued on behalf of the Company, which are legally restricted as to withdrawal or use. In the event that the obligation relating to such deposits is expected to be terminated within the next twelve months, these deposits are classified as current assets; otherwise they are classified as non-current assets.
(g)
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. Receivables related to spot voyages are determined to be unconditional and include in Accounts Receivable Trade, Net. At each balance sheet date, all potentially uncollectible accounts are assessed individually for purposes of determining the appropriate provision for doubtful accounts. No provision for doubtful accounts was established as of December 31, 2018 and 2017.
(h)
Inventories
Inventory is measured at the lower of cost or net realizable value according to the provisions of ASU 2015-11, Inventory . Net realizable value is defined as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation.  Cost is determined by the first in, first out method.
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 and warrants data, unless otherwise stated)

(i)
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 .
(j)
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 .
(k)
Vessel Depreciation
Depreciation is computed using the straight-line method over the estimated useful life of the vessels (25 years), after considering the estimated salvage value. Salvage value is estimated by the Company by taking the cost of steel times the weight of the ship noted in lightweight ton. Salvage values are periodically reviewed and revised to recognize changes in conditions, new regulations or for other reasons. Revisions of salvage values affect the depreciable amount of the vessels and affect depreciation expense in the period of the revision and future periods.
(l)
Impairment of Long-Lived Assets (Vessels)
The Company reviews its long-lived assets for impairment whenever events or changes in circumstances, such as prevailing market conditions, obsolesce or damage to the asset, business plans to dispose a vessel earlier than the end of its useful life and other business plans, indicate that the carrying amount of the assets, plus unamortized dry-docking costs, may not be recoverable. The volatile market conditions in the dry bulk market with decreased charter rates and decreased vessel market values are conditions that the Company considers to be indicators of a potential impairment for its vessels.
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/or its eventual disposition are less than the vessel’s 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 and use of available market data. The undiscounted projected operating cash inflows are determined by considering the charter revenues from existing time charters for the fixed fleet days and an estimated daily time charter equivalent for the non-fixed days (based on a combination of one year charter rates estimates and the average of the trailing 10-year historical charter rates, excluding the trough years 2015 and 2016, available for each type of vessel) adjusted for commissions, expected off hires due to scheduled maintenance and estimated unexpected breakdown off hires. The undiscounted projected operating cash outflows are determined by applying various assumptions regarding vessel operating expenses and scheduled maintenance.

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 and warrants data, unless otherwise stated)


(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.
(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 .
(o)
Revenue Recognition
Revenues are generated from time charters, bareboat charters and spot charters. A time charter is a contract for the use of a vessel as well as vessel operations for a specific period of time and a specified daily charter hire rate, which is generally payable in advance. 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. Spot charter agreements are charter hires, where a contract is made in the spot market for the use of a vessel for a specific voyage at a specified charter rate per ton of cargo.
Time charter revenue, including bareboat charter revenue, is recorded over the term of the charter agreement as the service is provided and collection of the related revenue is reasonably assured. 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 (Note 2(p)). Spot 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.
On January 1, 2018, the Company adopted ASU No. 2014-09, Revenue from Contracts with Customers and the related amendments (“ASC 606” or “the new revenue standard”) using the modified retrospective method, requiring recognition of the cumulative effect of adopting this guidance as an adjustment to the 2018 opening balance of retained earnings and not retrospectively adjusting prior periods. The prior period comparative information has not been restated and continues to be reported under the accounting guidance in effect for these periods. The core principle is that a company should recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. The Company has analyzed its contacts with charterers as at the adoption date, and has determined that its spot charters fall under the provisions of ASC 606, while its time charter agreements contain leases which are evaluated under lease guidance as discussed in Note 2(p).  ASC 606 indicates that an entity should perform a five-step approach in recognizing revenue, which might require more judgement and estimates compared to previous guidance. The Company assessed its contracts with charterers for spot charters with effect as at January 1, 2018, and concluded that there is one single performance obligation for its spot charters, which is to provide the charterer with a transportation service within a specified time period. In addition, the Company has concluded that spot charters meet the criteria to recognize revenue over time as the charterer simultaneously receives and consumes the benefits of the Company’s performance. Previously, voyage revenue was recognized from the latter of the cargo discharge of the previous voyage and the signing of the next charter or date of the new charter party until completion of cargo discharge. Under the new revenue standard, voyage revenue is recognized from the time when the vessel arrives at the load port until completion of cargo discharge. This change results in revenue being recognized over a shorter voyage time period, which may cause additional volatility in revenues and earnings between reporting periods. Under a spot charter, the Company incurs and pays for certain voyage expenses, primarily consisting of bunkers consumption, brokerage commissions, port and canal costs. Under ASC 606 and after implementation of ASC 340-40 “Other assets and deferred costs” for contract costs, incremental costs of obtaining a contract with a customer, and contract fulfillment costs, should be capitalized and amortized as the performance obligation is satisfied, if certain criteria are met. The Company has adopted the practical expedient
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 and warrants data, unless otherwise stated)

not to capitalize incremental costs when the amortization period (voyage period) is less than one year. Costs to fulfill the contract prior to arriving at the load port primarily consist of bunkers which are deferred and amortized during the voyage period. Voyage costs arising as performance obligation are expensed as incurred.
The adoption of new standard resulted in an increase in the opening Accumulated deficit balance as of January 1, 2018 of approximately $1,788 as a result of the adjustment of Vessels revenue and Voyage expenses. The balance sheet accounts affected are Accounts Receivable Trade, Net by $1,488 and Deferred Voyage Expenses by $300. Having not adopted ASC 606, the Company's: (i) vessel revenues would have been $95,202 for the year ended December 31, 2018, (ii) voyage expenses would have been $40,162 for the year ended December 31, 2018 and (iii) commissions would have been $3,352 as of December 31, 2018. Having not adopted ASC 606, the Company’s consolidated net loss would have been $352 (approximately $0.14 per share) less for the year ended December 31, 2018.
Remaining Performance Obligations
The Company has taken the practical expedient not to disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less.
Disaggregation of Revenue
The Company disaggregates its revenue from contracts with customers by the type of charter (time charters and spot charters). The following table presents the Company’s net trade accounts receivable disaggregated by revenue source as at December 31, 2018 and 2017:
 
December 31,
 
 
2018
 
2017
 
Accounts receivable trade, net from spot charters
   
2,332
     
1,855
 
Accounts receivable trade, net from time charters
   
317
     
1,771
 
Total
   
2,649
     
3,626
 

Deferred revenue represents cash received in advance of performance under the contract prior to the balance sheet date and is realized when the associated revenue is recognized under the contract in periods after such date. Revenue recognized in 2018 from amounts included in deferred revenue at the beginning of the period was approximately $1,741.
(p)
Leases
In February 2016, the FASB issued ASU No. 2016-02 - Leases (ASC 842) , and as amended, it requires lessees to recognize most leases on the balance sheet. This is expected to increase both reported assets and liabilities. The new lease standard does not substantially change lessor accounting. For public companies, the standard will be effective for the first interim reporting period within annual periods beginning after December 15, 2018, although early adoption is permitted. Lessees and lessors will be required to apply the new standard at the beginning of the earliest period presented in the financial statements in which they first apply the new guidance, using a modified retrospective transition method. In July 2018, the FASB issued ASU No. 2018-11, Leases (ASC 842) – Targeted Improvements . The amendments in this Update: (i) provide entities with an additional (and optional) transition method to adopt the new leases standard, under which an entity initially applies the new leases standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption consistent with preparers' requests and (ii) provide lessors with a practical expedient, by class of underlying asset, to
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 and warrants data, unless otherwise stated)

not separate non-lease components from the associated lease component and, instead, to account for those components as a single component if both of the following are met: (a) the timing and pattern of transfer of the non-lease component(s ) and associated lease component are the same and (b) the lease component, if accounted for separately, would be classified as an operating lease. If the non-lease component or components associated with the lease component are the predominant component of the combined component, an entity is required to account for the combined component in accordance with ASC 606. Otherwise, the entity should account for the combined component as an operating lease in accordance with ASC 842. Under ASC 842, lessees and lessors will be required to apply the new standard at the beginning of the earliest period presented in the financial statements in which they first apply the new guidance, using a modified retrospective transition method. The requirements of this standard include a significant increase in required disclosures.
The Company elected to early adopt ASC 842, as amended from time to time, retrospectively from January 1, 2018,  the beginning of the Company’s annual period in accordance with ASC 250, using the modified retrospective method. The prior period comparative information has not been restated and continues to be reported under the accounting guidance in effect for those periods (ASC 840), including disclosure requirements. The Company also elected to apply the additional and optional transition method to new and existing leases at the adoption date as well as all the practical expedients discussed above which allowed the Company’s existing lease arrangements, in which it was a lessee or lessor, classified as operating leases under ASC 840 to continue to be classified as operating leases under ASC 842. In this respect, no cumulative-effect adjustment was recognized to the 2018 opening balance of retained earnings even though the Company recognized a right of use asset for rental of office space at the adoption date. The Company assessed its new time charter contracts at the adoption date under the new guidance and concluded that these contracts contain a lease with the related executory costs (insurance), as well as non-lease components to provide other services related to the operation of the vessel, with the most substantial service being the crew cost to operate the vessel. The Company concluded that the criteria for not separating lease and non-lease components of its time charter contracts are met, since (i) the time pattern of recognizing revenues for crew and other services for the operation of the vessels is similar to the time pattern of recognizing rental income, (ii) the lease component of the time charter contracts, if accounted for separately, would be classified as an operating lease, and (iii) the predominant component in its time charter agreements is the lease component. In this respect, the Company accounts for the combined component as an operating lease in accordance with ASC 842. The Company will recognize income for variable lease payments in the period when changes in facts and circumstances on which the variable lease payments occur.
The following table presents the Company’s income statement figures derived from spot charters for the years ended December 31, 2018:

    December 31,
 
   
2018
 
Vessel revenues
   
73,769
 
Commissions
   
(2,789
)
Voyage expenses
   
(39,007
)
Total
   
31,973
 

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 and warrants data, unless otherwise stated)

The following table presents the Company’s income statement figures derived from time charters for the year ended December 31, 2018:
    December 31,
 
   
2018
 
Vessel revenues
   
21,090
 
Commissions
   
(550
)
Voyage expenses
   
(1,177
)
Total
   
19,363
 

Charterers individually accounting for more than 10% of revenues during the years ended December 31, 2018, 2017 and 2016 were :
Customer
 
2018
   
2017
   
2016
 
A
   
26
%
   
17
%
   
-
 
B
   
21
%
   
-
     
18
%
C
   
11
%
   
17
%
   
-
 
D
   
-
     
-
     
12
%

As of December 31, 2018, the Company has entered into three time charter agreements for periods of thirty-three to sixty months, with charterer’s option to extend all time charters. The first time charter commenced on November 5, 2018. The remaining two time charters are expected to commence in the second quarter of 2019. As of December 31, 2018, the Company has also entered into agreements for the installation of exhaust gas cleaning systems, or scrubbers, on these vessels. Installation of the scrubbers is expected to take place in 2019. During 2018, an amount of $2,450 was received as advance from these charterers in order to fund the installation of the scrubbers, on the three vessels associated with these time charters. The charterers will fund the entire cost of the scrubbers. As of December 31, 2018, an amount of $1,739 out of the advances has been paid by the Company to shipyards as an advance for the scrubbers installation.
Office lease
In April 2018, the Company moved into new office spaces. Under ASC 842, the lease is classified as an operating lease and a lease liability and right-of-use asset based on the present value of future minimum lease payments have been recognized on the balance sheet. The monthly rent expense is recorded in General and administrative expenses.
(q)
Sale and Leaseback Transactions
In accordance with ASC 842, the Company, as seller-lessee, determines whether the transfer of an asset should be accounted for as a sale in accordance with ASC 606. The existence of an option for the seller-lessee to repurchase the asset precludes the accounting for the transfer of the asset as a sale unless both of the following criteria are met: (1) the exercise price of the option is the fair value of the asset at the time the option is exercised and (2) there are alternative assets, substantially the same as the transferred asset, readily available in the marketplace; and the classification of the leaseback as a finance lease or a sales-type lease, precludes the buyer-lessor from obtaining control of the asset. The existence of an obligation for the Company, as seller-lessee, to repurchase the asset precludes accounting for the transfer of the asset as sale as the transaction would be classified as a financing arrangement by the Company as it effectively retains control of the underlying asset.

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 and warrants data, unless otherwise stated)

If the transfer of the asset meets the criteria of sale, the Company, as seller-lessee recognizes the transaction price for the sale when the buyer-lessor obtains control of the asset, derecognizes the carrying amount of the underlying asset and accounts for the lease in accordance with ASC 842. If the transfer does not meet the criteria of sale, the Company does not derecognize the transferred asset, accounts for any amounts received as a financing arrangement and recognizes the difference between the amount of consideration received and the amount of consideration to be paid as interest.

(r)
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 while  brokerage commissions to third parties are included in Voyage expenses .
(s)
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 .
(t)
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 .
(u)
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. The Company presents unamortized deferred financing costs as a reduction of long-term debt in the accompanying balance sheets .

(v)
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-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 and warrants 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. The estimated profits tax for the year ended December 31, 2018 is $NIL.
Seanergy Management Corp. ("Seanergy Management"), the Company's management company, established in Greece under Greek Law 89/67 (as amended to date), is subject to an annual contribution calculated on the total amount of foreign exchange annually imported and converted to Euros. The contribution to be paid in 2019 by Seanergy Management for 2018 is estimated at $99.
Two of the Company’s vessel-owning subsidiaries were registered in Malta since May 23, 2018. The subsidiaries are subject to a corporate flat tax rate for that period.
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 did not qualify for this statutory tax exemption for the 2018 taxable year, as the Company did not meet the 50% Ownership Test requirement for 2018.
The Company estimates that since no more than the 50% of its shipping income will 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. Some of the charterparties contain clauses that permit the Company to seek reimbursement from charterers of any U.S. tax paid. The Company has sought reimbursement and has secured payment from most of its charterers. The Company’s U.S. federal income tax based on its U.S. source shipping income for 2018, 2017 and 2016, taking into consideration charterers’ reimbursement, was $NIL, $NIL and $34, respectively .

(w)
Stock-based Compensation
Stock-based compensation represents vested and non-vested common stock granted to directors and employees for their services as well as to non-employees. For common stock granted to directors and employees, the Company calculates stock-based compensation expense for the award based on its fair value on the grant date and recognizes it on an accelerated basis over the vesting period. For common stock granted to non-employees, the Company calculates stock-based compensation expense for the award based on its fair value at each financial reporting date and recognizes the aggregate fair value on the measurement date (i.e., the vesting date) . The Company assumes that all non-vested shares will vest. The Company does not include estimated forfeitures in determining the total stock-based compensation expense because it estimates the forfeitures of non-vested shares to be immaterial. The Company re-evaluates the reasonableness of its assumption at each reporting period.
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 and warrants data, unless otherwise stated)

(x)
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. The treasury stock method is used to compute the dilutive effect of warrants and shares issued under the Equity Incentive Plan. The if-converted method is used to compute the dilutive effect of shares which could be issued upon conversion of the convertible notes. Potential common shares that have an anti-dilutive effect (i.e. those that increase income per share or decrease loss per share) are excluded from the calculation of diluted earnings per share .
(y)
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 .
(z)
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 .
(aa)
Fair Value Measurements
The Company follows the provisions of ASC 820, Fair Value Measurement , which defines fair value and provides guidance for using fair value to measure assets and liabilities. The guidance creates a fair value hierarchy of measurement and describes fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the market in which the reporting entity transacts. 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.

(ab)
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.
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 and warrants data, unless otherwise stated)

The Company, when issuing or otherwise granting an equity interest to a lender or creditor to fully settle 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 .

(ac)
Convertible Notes and related Beneficial Conversion Features
The convertible notes are accounted for in accordance with ASC 470-20 "Debt with Conversion and Other Options." The terms of each convertible  note included an embedded conversion feature which provided for a conversion at the option of the holder into shares of common stock at a predetermined rate.  The Company determined that the conversion features were beneficial conversion features ("BCF") pursuant to  ASC 470-20. The Company considered the BCF guidance only after determining that the features did not need to be bifurcated under ASC 815 "Derivatives and Hedging" or separately accounted for under the cash conversion literature of ASC 470-20.
Accounting for an embedded BCF in a convertible instrument 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 .   The intrinsic value of the BCF is determined as the number of shares converted from the convertible note times the positive difference between the fair value of the stock on the commitment date and the contractual conversion price.

(ad)
Going Concern
In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements - Going Concern . ASU No. 2014-15 provides guidance on management's responsibility in evaluating whether there is substantial doubt about a company's ability to continue as a going concern and on related required footnote disclosures.  For each reporting period, management is required to evaluate whether there are conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern within one year from the date the financial statements are issued.

Recent Accounting Pronouncements adopted

On January 1, 2018, the Company adopted ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which amends guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities.  On the same date, the Company adopted ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments—Credit Losses . The amendments in this update clarify that receivables arising from operating leases are not within the scope of Subtopic 326-20. Instead, collectability of receivables arising from operating leases should be accounted for in accordance with Topic 842, Leases . The adoption of ASU No. 2016-13 and ASU No. 2018-19 did not have any effect in the Company’s consolidated financial statements and disclosures.

On January 1, 2018, the Company adopted ASU No. 2016-15,  Statement of Cash Flows (Topic 230) – Classification of Certain Cash Receipts and Cash Payments,  which addresses the following eight specific cash flow issues with the objective of reducing the existing diversity in practice: Debt prepayment or debt extinguishment costs; settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; contingent consideration payments made after a business combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance policies (COLIs) (including bank-owned life insurance policies (BOLIs)); distributions received from equity method
F-18


Seanergy Maritime Holdings Corp.
Notes To The Consolidated Financial Statements
(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)

investees; beneficial interests in securitization transactions; and separately identifiable cash flows and application of the predominance principle. The adoption of the new accounting guidance did not have a material impact on the Company’s consolidated results of operations, financial condition or cash flows.
On January 1, 2018, the Company adopted ASU No. 2017-09,  Compensation—Stock Compensation (Topic 718) , which clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. ASU 2017-09 allows companies to make certain changes to awards without accounting for them as modifications, and does not change the accounting for modifications. The adoption of this new accounting guidance did not have a material effect on the Company's consolidated results of operations, financial condition or cash flows.

Recent Accounting Pronouncements Not Yet Adopted
In June 2018, the FASB issued ASU No. 2018-07,  Compensation—Stock Compensation , which concerns improvements to nonemployee share-based payment accounting. The amendments in this Update affect all entities that enter into share-based payment transactions for acquiring goods and services from nonemployees. The amendments in this Update expand the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. An entity should apply the requirements of Topic 718 to nonemployee awards except for specific guidance on inputs to an option pricing model and the attribution of cost (that is, the period of time over which share-based payment awards vest and the pattern of cost recognition over that period). The amendments specify that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. The amendments also clarify that Topic 718 does not apply to share-based payments used to effectively provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under Topic 606, Revenue from Contracts with Customers . Consistent with the accounting requirement for employee share-based payment awards, nonemployee share-based payment awards within the scope of Topic 718 are measured at grant-date fair value of the equity instruments that an entity is obligated to issue when the good has been delivered or the service has been rendered and any other conditions necessary to earn the right to benefit from the instruments have been satisfied. Equity-classified nonemployee share-based payment awards are
measured at the grant date. The definition of the term grant date is amended to generally state the date at which a grantor and a grantee reach a mutual understanding of the key terms and conditions of a share-based payment award. Generally, the classification of equity-classified nonemployee share-based payment awards will continue to be subject to the requirements of Topic 718 unless modified after the good has been delivered, the service has been rendered, any other conditions necessary to earn the right to benefit from the instruments have been satisfied, and the nonemployee is no longer providing goods or services. This eliminates the requirement to reassess classification of such awards upon vesting. ASU 2018-07 is effective for public business entities in annual periods beginning after December 15, 2018 and interim periods within those years. Early adoption is permitted, including adoption in any interim period for which financial statements have not yet been issued or made available for issuance, but not before an entity adopts the new revenue guidance. The Company is currently evaluating the provisions of this guidance and assessing its impact on its consolidated financial statements and notes disclosures.
In August 2018, the FASB issued ASU No. 2018-13, Disclosure Framework: Changes to the Disclosure Requirements for Fair Value Measurement , which improves the effectiveness of fair value measurement disclosures. In particular, the amendments in this Update modify the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement , based on the concepts in FASB Concepts Statement, Conceptual Framework for Financial Reporting— Chapter 8: Notes to Financial Statements , including the consideration of costs and benefits. The amendments in the Update apply to all entities that are required under existing GAAP, to make disclosures about recurring and non-recurring fair value measurements.  ASU No. 2018-13 is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments
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 and warrants data, unless otherwise stated)

should be applied retrospectively to all periods presented upon their effective date. Early adoption is permitted upon issuance of this Update. An entity is permitted to early adopt any removed or modified disclosures upon issuance of this Update and delay adoption of the additional disclosures until their effective date. The Company is currently assessing the impact that adopting this new accounting guidance will have on its consolidated financial statements and related disclosures.

3.
Transactions with Related Parties:
a.
Convertible  Notes:
March 12, 2015 - $4,000 Convertible  Note
On March 12, 2015 ("Commitment Date"), the Company issued a convertible note of $4,000 to Jelco Delta Holding Corp., or Jelco, a company affiliated with Claudia Restis, who is also the Company's principal shareholder, for general corporate purposes. As of December 31, 2018, $3,800 was outstanding under this note. The next two installments, $200 each, are due in 2019 and the final installment of $200, along with a balloon installment of $3,200, is payable on the final maturity date, March 19, 2020 (Note 14j). The note is secured by a guarantee from the Company’s wholly-owned subsidiary, Emperor Holding Ltd., which is the holding company of the vessel-owning subsidiary that owns the Lordship and of the bareboat charterer of the Knightship .
September 27, 2017 - $13,750 Convertible  Note
On September 27, 2017 ("Commitment Date"), the Company issued a convertible note to Jelco for an amount of $13,750 . On February 13, 2019, the Company and Jelco entered into an amendment to this note (Note 14(d)). As of December 31, 2018, $13,750 was outstanding under this note. The note is secured by a second preferred mortgage and second priority general assignment covering earnings, insurances and requisition compensation over the Partnership and guarantees from the Company’s respective vessel-owning subsidiary that owns the Partnership and from the Company’s wholly-owned subsidiary, Emperor Holding Ltd.; all cross collateralized with the loan entered into with Jelco on May 24, 2017, as amended and restated and further supplemented (Note 14). Of the $13,750 under the note, $4,750 were used to make a mandatory prepayment under the May 2017 Jelco loan facility (Note 3(b)).
This note was determined to contain a BCF at the commitment date for which the intrinsic value of the BCF was not greater than the proceeds of $13,750 allocated to the convertible instrument, and the amount of the discount assigned to the BCF was $10,389.
The debt movement of the above two convertible notes is presented below:
   
Applicable limit
   
Debt discount
   
Accumulated deficit
   
Debt
 
Balance, December 31, 2016
   
4,000
     
(4,000
)
   
425
     
425
 
Additions
   
13,750
     
(10,389
)
   
-
     
3,361
 
Amortization (Note 11)
   
-
     
-
     
792
     
792
 
Balance, December 31, 2017
   
17,750
     
(14,389
)
   
1,217
     
4,578
 
Amortization (Note 11)
   
-
     
-
     
2,384
     
2,384
 
Balance, December 31, 2018
   
17,750
     
(14,389
)
   
3,601
     
6,962
 

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 and warrants data, unless otherwise stated)

The equity movement of the above two convertible notes is presented below:
   
Additional
paid-in capital
 
Balance, December 31, 2016
   
3,800
 
Additions
   
10,389
 
Balance, December 31, 2017
   
14,189
 
Balance, December 31, 2018
   
14,189
 

September 7, 2015 - Revolving   Convertible  Note
On September 7, 2015 ("Commitment Date"), the Company issued a revolving convertible note to Jelco for an amount up to $6,765 (the "Applicable Limit") for general corporate purposes. Following ten amendments to the revolving convertible note between December 2015 and September 2018, the Applicable Limit was raised to $24,665. Following the tenth amendment on September 1, 2018, a drawdown request of up to $3,500 may be made by April 10, 2019 (Note 14j) (the “Final Revolving Advance Date”). If the request is not made by the Final Revolving Advance Date, the advance will not be available to be drawn. The aggregate outstanding principal is repayable in December 2022. The note is secured by a guarantee from the Company’s wholly-owned subsidiary, Emperor Holding Ltd. As of December 31, 2018, $21,165 was outstanding under this note.
The debt movement of the revolving convertible note is presented below:
   
Applicable limit
   
Debt discount
   
Accumulated deficit
    Debt  
Balance, December 31, 2016
   
21,165
     
(21,165
)
   
872
     
872
 
Amortization (Note 11)
   
-
     
-
     
1,335
     
1,335
 
Balance, December 31, 2017
   
21,165
     
(21,165
)
   
2,207
     
2,207
 
Additions
   
3,500
     
-
     
-
     
-
 
Amortization (Note 11)
   
-
     
-
     
1,955
     
1,955
 
Balance, December 31, 2018
   
24,665
     
(21,165
)
   
4,162
     
4,162
 

The equity movement of the revolving convertible note is presented below:

   
Additional
paid-in capital
 
Balance, December 31, 2016
   
21,165
 
Balance, December 31, 2017
   
21,165
 
Balance, December 31, 2018
   
21,165
 

All three convertible notes bear interest at three-month LIBOR plus a margin of 5% with quarterly interest payments. At Jelco's option, the outstanding principal amount under each of the three convertible notes or any part thereof may be paid at any time in common shares at a conversion price of $13.50 per share. Jelco will receive customary registration rights with respect to all shares upon conversion.

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 and warrants data, unless otherwise stated)


b.
Loan Agreements:
On October 4, 2016, the Company entered into a $4,150 loan facility with Jelco to finance the initial deposits for the vessels Lordship and Knightship . As amended, the aggregate amount that could be borrowed was increased to up to $12,800 (to partially finance the remaining payment for the Lordship and the Knightship ). The facility bears interest at LIBOR plus a margin of 8.5% per annum and is repayable in one bullet payment together with accrued interest on the maturity date. Seanergy Maritime Holdings Corp. is the borrower under this facility. On December 14, 2016, the Company prepaid Jelco $6,900. On February 13, 2019, the Company and Jelco entered into a second amendment and restatement agreement, whereby, among other things, the final repayment date was extended to June 30, 2020 (Note 14(d)). The facility is secured by a second preferred mortgage and second priority general assignment covering earnings, insurances and requisition compensation over the Partnership and   guaranteed from the Company’s wholly-owned subsidiary, Emperor Holding Ltd. and the vessel-owning subsidiary of the Partnership . As of December 31, 2018, $5,900 was outstanding under this loan facility and is classified under non-current liabilities. The balance sheet amount is shown net of deferred financing costs.
On May 24, 2017, the Company entered into an up to $16,200 loan facility with Jelco to partially finance the acquisition of the  Partnership . The Company drew down the $16,200 on May 24, 2017 with an amount of $4,750 being repaid during 2017 (Note 3(a)). The facility, as amended, currently bears interest at three-month LIBOR plus a margin of 6% per annum which is payable quarterly and the principal is repayable in one bullet payment due on the maturity date. The maturity date, as amended on February 13, 2019, has been deferred to December 30, 2020 (Note 14). The facility is secured by a second preferred mortgage over the Partnership , second priority general assignment covering earnings, insurances and requisition compensation over the vessel, a guarantee from the vessel-owning subsidiary of the Partnership and a guarantee from the Company’s wholly-owned subsidiary, Emperor Holding Ltd. (Note 14). As of December 31, 2018, $11,450 was outstanding under this loan facility and is classified under non-current liabilities.
On April 10, 2018, the Company entered into a $2,000 loan facility with Jelco for working capital purposes. The Company drew down the $2,000 on April 12, 2018. The facility, as amended on June 13, 2018 and as further amended on August 11, 2018 and January 31, 2019 (Note 14) by supplemental letters, bears interest at 10% per annum, payable quarterly, and the principal is payable in one bullet payment due by April 1, 2019 (Note 14j). The facility is secured by a guarantee from the Company’s wholly-owned subsidiary, Emperor Holding Ltd. As of December 31, 2018, $2,000 was outstanding under this loan facility and is classified under non-current liabilities.
4.
Cash and Cash Equivalents and Restricted Cash:
The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the balance sheet that sum to the total of the same such amounts shown in the statement of cash flows:

   
December 31, 2018
   
December 31, 2017
 
Cash and cash equivalents
   
6,684
     
8,889
 
Restricted cash
   
260
     
1,550
 
Restricted cash, non-current
   
500
     
600
 
Total
   
7,444
     
11,039
 
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 and warrants data, unless otherwise stated)

Restricted cash as of December 31, 2018 amounts include $500 of minimum liquidity requirements as per the Amsterdam Trade Bank N.V. loan agreement (Note 7), $210 in a dry-docking reserve account as per the Amsterdam Trade Bank N.V. loan agreement and $50 of restricted deposits pledged as collateral regarding credit cards balances with one of the Company’s financial institutions. Minimum liquidity, not legally restricted, of $4,000 as per the Company’s credit facilities covenants, calculated as $500 per owned vessel, is included in Cash and cash equivalents. An aggregate amount of $2,925 as per the sale and leaseback transactions is included in Cash and cash equivalents (Note 7). As of December 31, 2017, restricted cash amounts included $1,500 of restricted deposits as contractually required under the loan facility with Northern Shipping Fund III LP, or NSF (Note 7), $500 of minimum liquidity requirements as per the Amsterdam Trade Bank N.V. loan agreement (Note 7), $100 in dry-docking reserve accounts as per the Amsterdam Trade Bank N.V. loan agreement and $50 of restricted deposits pledged as collateral regarding credit cards balances with one of the Company's financial institutions.
5.
Inventories:
The amounts in the accompanying consolidated balance sheets are analyzed as follows:
   
December 31, 2018
   
December 31, 2017
 
Lubricants
   
556
     
582
 
Bunkers
   
4,733
     
4,215
 
Total
   
5,289
     
4,797
 

6.
Vessels, Net:
Vessels, Net
The amounts in the accompanying consolidated balance sheets are analyzed as follows:
   
December 31, 2018
   
December 31,
2017
 
Cost:
           
Beginning balance
   
275,582
     
242,462
 
- Additions
   
28,789
     
33,120
 
- Disposals
   
(26,290
)
   
-
 
- Impairment charges
   
(7,267
)
   
-
 
Ending balance
   
270,814
     
275,582
 
                 
Accumulated depreciation:
               
Beginning balance
   
(20,852
)
   
(10,353
)
- Additions
   
(10,793
)
   
(10,499
)
- Disposals
   
4,045
     
-
 
Ending balance
   
(27,600
)
   
(20,852
)
                 
Net book value
   
243,214
     
254,730
 

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 and warrants data, unless otherwise stated)

On August 31, 2018, the Company entered into an agreement with an unaffiliated third party for the purchase of one second hand Capesize vessel, the Fellowship , for a gross purchase price of $28,700. The vessel was delivered to the Company on November 22, 2018. The acquisition of the vessel was financed through the loan facility with UniCredit (Note 7) and by cash on hand.
On September 20, 2018, the Company entered into two separate agreements with unaffiliated third parties for the sale of two Supramax vessels, namely the Gladiatorship and the Guardianship for a gross sale price of $10,960 and $11,700, respectively. The Gladiatorship and the Guardianship were delivered to their new owners on October 11, 2018 and on November 19, 2018, respectively. Proceeds of $9,505 from the sale of Gladiatorship and $10,332 from the sale of Guardianship were retained with UniCredit to fund the acquisition of Fellowship . The specific vessels were impaired since their carrying amount on the sale agreement date was higher than their fair value less cost to sell. Accordingly, an impairment loss of $7,267 was recognized in the Consolidated Statements of Loss . The fair value of the vessels was determined based on the agreed sale prices (Note 8).
On March 28, 2017, the Company entered into an agreement with an unaffiliated third party for the purchase of a secondhand Capesize vessel, at a gross purchase price of $32,650. On May 31, 2017, the Company acquired the 2012 Capesize, 179,213 DWT Partnership . The acquisition was financed with the Amsterdam Trade Bank N.V. loan facility (Note 7), the Jelco loan facility entered into on May 24, 2017 (Note 3) and by cash on hand.
Approximately $89 and $465 worth of expenditures that increased the earning capacity and improved the efficiency of certain vessels were capitalized during the twelve month periods ended December 31, 2018 and December 31, 2017, respectively.
As of December 31, 2018, all vessels, except for the Knightship and the Championship , are mortgaged to secured loans (Notes 3 and 7).
7.
Long-Term Debt and Financial Liabilities:
The amounts in the accompanying consolidated balance sheets are analyzed as follows:
   
December 31, 2018
   
December 31,
2017
 
Secured loan facilities and other financial liabilities
   
198,607
     
196,450
 
Less: Deferred financing costs
   
(3,386
)
   
(1,429
)
Total
   
195,221
     
195,021
 
Less - current portion
   
(16,195
)
   
(19,216
)
Long-term portion
   
179,026
     
175,805
 

Secured credit facilities
On March 6, 2015, 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 Leadership . The loan bears interest of LIBOR plus a margin of 3.75% with quarterly interest payments. The loan is guaranteed by the Company and 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 23, 2015, the Company amended the loan agreement with Alpha Bank A.E. in order to (i) defer from
F-24

Seanergy Maritime Holdings Corp.
Notes To The Consolidated Financial Statements
(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)

December 31, 2015, to June 30, 2018, the requirement that the Company maintain a corporate leverage ratio (as defined in the loan facility) that does not exceed 75% and (ii) defer from December 31, 2015, to June 30, 2018, the requirement that the Company maintain a ratio of EBITDA to net interest expense (as defined in the loan facility) that is not less than 2:1. On July 28, 2016, the Company further amended the loan agreement with Alpha Bank A.E. in order to defer part of the then next four installments to the final maturity date. Following the reduction of the four installments that was added to the balloon installment, 80% of Leadership's excess earnings (as defined in the loan agreement) during each financial year starting from 2016, shall be applied by Alpha Bank towards payment of the deferred amount until same is fully repaid. On a consolidated basis, we are required to (i) maintain a corporate leverage ratio, as defined in the loan agreement, that will not be (a) at the end of December 31, 2018 higher than 0.85:1.0, the compliance with such obligation to be tested on each financial semester starting from July 1, 2018; (b) on March 31, 2019 higher than 0.80:1.0 and (c) starting from June 1, 2019 and at the end of each accounting period higher than 0.75:1.0, (ii) from July 1, 2018 the consolidated interest cover ratio (EBITDA to Net Interest Expense) shall not be (a) until and including the 31, March 2019, lower than 1.2:1 and (b) as from April 1, 2019 until the expiration of the Security Period, lower than 2:1, and (iii) liquidity in a specified amount. In addition, from July 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 outstanding loan balance of $5,703 as of December 31, 2018 is repayable in five consecutive quarterly installments being $250 each, and a balloon installment of $4,453 payable on the final maturity date, March 17, 2020.
On September 1, 2015, the Company entered into a loan agreement with Hamburg Commercial Bank AG, formerly known as HSH Nordbank AG, for a secured loan facility in an amount of $44,430, or the HCOB Facility. The loan was fully drawn down in 2015 and was used to pay for the acquisition of the vessels Geniuship and Gloriuship . The loan is repayable in quarterly installments being approximately $1,049 each, along with a balloon installment of $28,837 payable on the final maturity date, June 30, 2020. On July 2, 2018, the Company made a prepayment of $3,000, as per the terms of the loan facility. The loan bears interest of LIBOR plus margin 3.75% until the full repayment of the facility, with quarterly interest payments. The loan facility is secured by a first priority mortgage over the two vessels. On March 28, 2018, the Company signed an amendment to the HCOB Facility by which: i) the application of the security cover requirement (as defined in the loan facility) was waived until September 30, 2018, ii) the security cover percentage requirement was amended as follows: 100% during the period commencing on October 1, 2018 and ending on March 31, 2019, 111% during the period commencing on April 1, 2019 and ending on September 30, 2019, and 120% thereafter, iii) the Leverage Ratio covenant was redefined to reflect Net debt / Total assets (as defined in the loan facility) and the relevant threshold was amended to: no more than 85% during the period commencing on June 30, 2018 and ending on December 31, 2018, no more than 80% during the period commencing on January 1, 2019 and ending on March 31, 2019, and no more than 75% thereafter, iv) the ratio of EBITDA to net interest payments (as defined in the loan facility) was amended to: no less than 1.2 times during the period commencing on June 30, 2018 and ending on March 31, 2019, and no less than 2 times thereafter and v) the liquidity covenant applicable on the Company as guarantor was amended to include restricted cash. As of December 31, 2018, the amount outstanding under the facility was $35,134.
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 fully drawn down in 2015 and was made available to partially finance the acquisition of the vessels Premiership , Gladiatorship and Guardianship . The loan is repayable in eight quarterly installments being $1,552 each, 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% with quarterly interest payments.

F-25

Seanergy Maritime Holdings Corp.
Notes To The Consolidated Financial Statements
(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)

On September 25, 2017, the Company entered into a supplemental letter in order to defer the installment due on September 25, 2017 to October 2, 2017 . On April 30, 2018, the Company signed a supplemental letter with UniCredit Bank A.G. by which: i) the Leverage Ratio covenant was redefined to reflect the Group’s Net Debt / Consolidated Market Value adjusted assets (excluding cash, cash equivalents and restricted cash) and relevant threshold was amended to: no more than 85% during the period commencing on May 1, 2018 and ending on December 31, 2018, no more than 80% during the period commencing on January 1, 2019 and ending on March 31, 2019 and no more than 75% for the remaining part of the security period, ii) the ratio of EBITDA to net interest payments was amended to: not less than 1.2 times during the period commencing on May 1, 2018 and ending on March 31, 2019 and not less than 2 times for the remaining part of the security period and iii) the security cover percentage requirement was amended as follows: not to be less than 100% during the period commencing on May 1, 2018 and ending on September 30, 2018, not to be less than 111% during the period commencing on October 1, 2018 and ending on June 30, 2019 and not to be less than 120% for the remaining part of the security period. On November 22, 2018, the Company amended and restated the facility to (i) release the respective vessel-owning subsidiaries of the Gladiatorship and the Guardianship as borrowers and (ii) to include the vessel-owning subsidiary of the   Fellowship as replacement borrower. The first-priority mortgages over the Gladiatorship and Guardianship and all other securities created in favor of UniCredit for the specific vessels under the UniCredit facility were irrevocably and unconditionally released. The amendment and restatement of the facility did not alter the interest rate, the maturity date, the amortization and the repayment terms of the UniCredit facility or the financial covenants applicable to the Company as guarantor. The amended and restated loan facility is secured by first preferred mortgages and general assignments covering earnings, insurances and requisition compensation over the Premiership and the Fellowship , earnings account pledges, shares security deeds relating to the shares of both vessels' owning subsidiaries, technical and commercial managers' undertakings and, where applicable, charter assignments. As of December 31, 2018, the amount outstanding under the facility was $41,841.
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 Squireship . On November 10, 2015, the Company drew down the $33,750. The loan is repayable in twelve quarterly installments being approximately $844, each 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 guaranteed by the Company and is secured by a first priority mortgage over the vessel and, following the June 29, 2018 amendment, a second priority mortgage over the Leadership . 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 the Company’s net income except in case the cash and marketable securities are equal or greater than the amount required to meet the Company’s consolidated installment and debt interest payments for the following eighteen-month period. On June 29, 2018, the Company further amended the loan agreement with Alpha Bank A.E. Pursuant to the terms of the amendment, i) the ratio of the market value of the Squireship plus any additional security to the total facility outstanding shall not be less than 100% as from April 1, 2019 until March 31, 2020, shall not be less than 111% starting from April 1, 2020 until March 31, 2021 and shall not be less than 125% from April 1, 2021 until the end of the security period, ii) the consolidated interest cover ratio (EBITDA to Net Interest Expense) shall not be (a) until and including March 31, 2019 lower than 1.2:1, the compliance with such obligation to be tested on each Financial Semester Day starting from July 1, 2018 and (b) as from April 1, 2019 until the expiration of the security period, lower than 2:1, the compliance with such obligation to be tested on each Financial Semester Day starting from April 1, 2019 and iii) the Corporate Leverage Ratio as defined in the loan agreement will not be (a) at the end of December 31, 2018 higher than 0.85:1.0, the compliance with such obligation to be tested on each Financial Semester Day starting from July 1, 2018; (b) on March 31, 2019 higher than 0.80:1.0 and (c) starting from June 1, 2019 and at the end of each Accounting Period higher than 0.75:1.0, the compliance with such obligation to be tested on each Financial Semester Day starting from June 30, 2019. As of December 31, 2018, the amount outstanding under the facility was $30,375.
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 Championship . On December 7, 2015, the Company drew down the $39,412. The loan was repayable in quarterly installments being $985 each along
F-26

Seanergy Maritime Holdings Corp.
Notes To The Consolidated Financial Statements
(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)

with a balloon installment of $24,637 payable on the final maturity date, February 26, 2021. The loan bore interest of LIBOR plus a margin of 2.50% with quarterly interest payments. The loan was secured by a first priority mortgage over the vessel. On March 7, 2017, the Company entered into a supplemental agreement and a settlement agreement with Natixis to the secured term loan facility dated December 2, 2015.  Under the terms of the supplemental agreement the secured term loan was repayable in four installments: $2,000 due April 28, 2017, $2,000 due June 30, 2017, $3,000 due September 29, 2017, and $32,412 due May 2, 2018.  Under the terms of the settlement agreement, the Company had an option, until September 29, 2017, to satisfy the full amount of the facility by making a prepayment of $28,000, which included any payments made in connection with the first three installment payments made under the supplemental agreement.  Upon such prepayment, the facility would be deemed satisfied in full. On September 29, 2017, Natixis entered into a deed of release and fully discharged the $35,412 outstanding balance of the secured term loan facility obligations to the lender for a total settlement amount of $24,000 on September 29, 2017. The first-priority mortgage over the Championship and all other securities created in favour of Natixis were irrevocably and unconditionally released pursuant to the deed of release. In the third quarter of 2017, the Company recognized a gain from the Natixis refinancing of $11,392, net of $6 refinancing charges and $14 write-off of unamortized deferred financing charges.  
On November 28, 2016, the Company entered into a $32,000 secured term loan facility with Northern Shipping Fund III LP, or NSF, to partly finance the acquisition of the two second hand Capesize vessels Lordship and Knightship . The facility bore interest at 11% per annum, which was payable quarterly, and the principal was repayable in four consecutive quarterly installments of $900 each, commencing on March 13, 2019. On June 13, 2018 and June 28, 2018, respectively, NSF entered into deeds of release, with respect to the Lordship and the Knightship , respectively, resulting in a complete release of the facility agreement dated November 28, 2016 after full settlement of the outstanding balance of $32,000. The first-priority mortgages over the Lordship and the Knightship and all other securities created in favor of NSF were irrevocably and unconditionally released pursuant to the deeds of release.
On May 24, 2017, the Company entered into an up to $18,000 term loan facility with Amsterdam Trade Bank N.V. to partially finance the acquisition of the  Partnership . The loan bore interest at LIBOR plus a margin of 4.65% per annum which is payable quarterly. The principal was repayable by twenty equal consecutive quarterly installments of $200 each and a balloon installment of $14,000 due on the maturity date, May 26, 2022. On each quarterly repayment date, an additional repayment of at least $10, or an integral multiple of that amount, of any excess cash standing in the vessel’s operating account would applied towards reducing the balloon installment. Excess cash, as defined in the loan facility, was any amount above $1,000. The aggregate amount of the additional repayments would not exceed $3,600. As of December 31, 2018, the aggregate amount of the additional repayments was $410. The loan was made available in two drawdowns: (i) $13,250 was drawn down on May 26, 2017 and (ii) $4,750 was drawn down on June 22, 2017. The loan facility required that the borrower would maintain in aggregate $500 as minimum liquidity. The loan was secured by a first priority mortgage and general assignment covering earnings, insurances and requisition compensation over the vessel, an earnings account pledge, shares security deed relating to the shares of the vessel's owning subsidiary, technical and commercial managers' undertakings and a charter assignment.

On September 25, 2017, in order to partially fund the refinancing of the Natixis facility, the Amsterdam Trade Bank loan facility was amended and restated, increasing the loan amount of the facility by an additional tranche of $16,500, or Tranche B. The principal of Tranche B was repayable by quarterly installments in addition to a balloon installment of any outstanding indebtedness due on the maturity date, May 26, 2022. The amendment and restatement of the facility did not alter the interest rate, the maturity date, the amortization and the repayment terms of the existing tranche under the loan facility, or the financial covenants applicable to the Company as guarantor. The amended and restated loan facility was secured by first preferred mortgages and general assignments covering earnings, insurances and requisition compensation over the Partnership and Championship , earnings account pledges, shares security deeds relating to the shares of both vessels' owning subsidiaries, technical and commercial managers' undertakings and, where applicable, charter assignments. On May 18, 2018, the Company signed a supplemental agreement with Amsterdam Trade Bank N.V. by which: i) the ratio of EBITDA to net interest payments was amended to: not less than 1.2 times during the period commencing on June 30, 2018 and ending on June 29, 2019 and not less than 2
F-27

Seanergy Maritime Holdings Corp.
Notes To The Consolidated Financial Statements
(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)

times from June 30, 2019 and for the remaining part of the security period and ii) the Leverage Ratio was amended to: no more than 85% during the period commencing on June 30, 2018 and ending on March 30, 2019, no more than 80% during the period commencing on March 31, 2019 and ending on June 29, 2019 and no more than 75% during the period commencing on June 30, 2019 and for the remaining part of the security period. On November 7, 2018, Amsterdam Trade Bank entered into a deed of release with respect to the Championship , releasing the underlying borrower in full after the settlement of the outstanding balance of $15,700 pertaining to the specific vessel tranche. The first-priority mortgage over the Championship and all other securities created in favor of Amsterdam Trade Bank for the specific vessel tranche were irrevocably and unconditionally released pursuant to the deed of release. The second-priority mortgage over the Championship and all other securities created in favor of Jelco were also irrevocably and unconditionally released pursuant to a separate deed of release. As of December 31, 2018, the amount outstanding under the facility was $16,390. On February 15, 2019, Amsterdam Trade Bank N.V. entered into a further deed of release with respect to the Partnership resulting in a complete release of the facility agreement after full settlement of the outstanding balance of $16,390 (Note 14(g)). On February 13, 2019, the Company entered into a new loan facility with Amsterdam Trade Bank N.V. (Note 14(c)).
On June 11, 2018, the Company entered into a $24,500 loan agreement with Blue Ocean maritime lending funds managed by EnTrustPermal for the purpose of refinancing the outstanding indebtedness of the Lordship under the previous loan facility with NSF dated November 28, 2016. The borrower under the facility is the applicable vessel-owning subsidiary and the facility is guaranteed by the Company. The facility matures in June 2023 and can be extended until June 2025 subject to certain conditions. Specifically, the borrower has the right to sell the vessel back to the lender at a pre-agreed price of $20,800 on the fifth anniversary of the loan utilization (“Year-5 Put Option”). If the borrower elects to exercise the Year-5 Put Option, the lender has the right to extend the termination date of the loan by a further two years, in which case the exercise of the Year-5 Put Option by the borrower shall be cancelled in its entirety. Furthermore, the borrower has the right to sell the ship back to the lender at a pre-agreed price of $15,000 on the seventh anniversary of the loan utilization (“Year-7 Put Option”). If the borrower elects to exercise the Year-7 Put Option then the lenders will be obliged to purchase the ship at the pre-agreed price. The new facility is secured by a first priority mortgage over the vessel, general assignment covering earnings, insurances and requisition compensation, an account pledge agreement and a share pledge agreement concerning the respective vessel-owning subsidiary and technical and commercial managers' undertakings. The new loan facility bears a weighted average all-in interest rate of 11.4% and 11.2% assuming a maturity date in June 2023 or in June 2025, respectively. The principal obligation amortizes in 20 or 28 quarterly installments, with a balloon payment of $15,300 or $9,500 due at maturity, assuming a maturity date in June 2023 or in June 2025, respectively.  The facility also imposes certain customary operating covenants. Certain of these covenants may significantly limit or prohibit, among other things, the borrower's ability to incur additional indebtedness, create liens, sell capital shares of subsidiaries, engage in mergers, or sell the vessel without the consent of the relevant lenders. As of December 31, 2018, the amount outstanding under the facility was $24,100.

Each secured facility is secured by a first priority mortgage over the respective vessel. As of December 31, 2018, the Company was in compliance with all debt covenants in effect with respect to its secured facilities.
Other Financial Liabilities - Sale and Leaseback Transactions
On June 28, 2018, the Company entered into a $26,500 sale and leaseback agreement for the Knightship with Hanchen Limited (“Hanchen”), an affiliate of AVIC International Leasing Co., Ltd., for the purpose of refinancing the outstanding indebtedness of the Knightship under the previous loan facility with NSF dated November 28, 2016. The Company's wholly-owned subsidiary (“Charterer”) sold and chartered back the vessel on a bareboat basis for an eight year period, having a purchase obligation of $5,299 at the end of the eighth year and having the option to repurchase the Knightship at any time following the second anniversary of the bareboat charter. Under ASC 842-40, the transaction was accounted for as a financial liability. The bareboat charter is secured by a general assignment covering earnings, insurances and requisition compensation, an account pledge agreement and a share pledge agreement of the shares of the Charterer and technical and commercial managers' undertakings. The Company provided a guarantee to Hanchen.
F-28

Seanergy Maritime Holdings Corp.
Notes To The Consolidated Financial Statements
(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)

Of the $26,500, $18,550 were cash proceeds, $6,625 was withheld by Hanchen as an upfront charterhire upon the delivery of the vessel, and an amount of $1,325, included in “Deposits assets, non-current” in the consolidated balance sheet, was paid as a deposit by the Charterer to Hanchen upon the delivery of the vessel in order to secure the due observance and performance by the Charterer of its obligations and undertakings as per the sale and leaseback agreement. The deposit can be set off against the balloon payment at maturity. The Charterer is required to maintain a value maintenance ratio (as defined in the additional clauses of the bareboat charter) of at least 120%. In addition, the bareboat charter requires the Charterer to maintain an amount of $1,325 (Note 4) until the second anniversary of the delivery date or if earlier, a sub-charter in form and substance acceptable to Hanchen is available. The charterhire principal bears interest at LIBOR plus a margin of 4% and amortizes in thirty two consecutive equal quarterly installments of approximately $456 along with a balloon payment of $5,299 at maturity on June 29, 2026. The charterhire principal, as of December 31, 2018, is $18,964.
On November 7, 2018, the Company entered into a $23,500 sale and leaseback agreement for the Championship with Cargill International SA (“Cargill”) for the purpose of refinancing the outstanding indebtedness of the Championship under the previous loan facility with Amsterdam Trade Bank N.V. dated September 25, 2017. The Company sold and chartered back the vessel from Cargill on a sub-bareboat basis for a five year period, having a purchase obligation at the end of the fifth year and subsequently entered into a five-year time charter with Cargill . Under ASC 842-40, the transaction was accounted for as a financial liability. The sub-bareboat charter is secured by an account pledge agreement and technical and commercial managers' undertakings. The Company is required to maintain an amount of $1,600 which will be used at the vessel repurchase (Note 4). Moreover, under the subject sale and leaseback agreement, an additional tranche was provided to the Company for an amount of up to $2,750 for the purpose of financing the cost associated with the acquisition and installation on board the Championship of an open loop scrubber system. As of December 31, 2018, $2,170 remains from this additional tranche, which is included in "Deposits assets, non-current" in the consolidated balance sheet, with the balance of $580 having been paid towards the acquisition and installation of the open loop scrubber system. The subject tranche has been placed in an escrow account included in "Deposits assets, non-current" in the consolidated balance sheet, in the name of Cargill and will be made available gradually subject to certain progress milestones. The cost of the financing is equivalent to an expected fixed interest rate of 4.71% for five years. The sale and leaseback agreement does not include any financial covenants or security value maintenance provisions. The Company has continuous options to buy back the vessel during the whole five-year sale and leaseback period at predetermined prices as set forth in the agreement and at the end of which period it has a purchase obligation at $14,051. Additionally, at the time of purchase, if the market value of the vessel is greater than a floor price, the Company will pay to Cargill 20% of the difference between the market price and the floor price. The floor price, as set forth in the agreement, starts at $30,000 on November 7, 2018, and amortizes to $22,773 at the end of the five year term.  The Company has concluded that such contingency shall not be accrued in the consolidated financial statements, since information available does not indicate that it is probable that a liability has been incurred as of the latest balance sheet date and cannot be estimated. Moreover, as part of the transaction, the Company has issued 120,000 of its common shares to Cargill which are subject to customary statutory registration requirements. The fair market value of the shares on the date issued to Cargill will be amortized over the lease term using the effective interest method.  The unamortized balance is classified in other financial liabilities on the consolidated balance sheet. The charterhire principal amortizes in sixty monthly installments averaging approximately $167 each along with a balloon payment of $14,051, including the additional scrubber tranche, at maturity on November 7, 2023. The charterhire principal, as of December 31, 2018, is $26,101.
The borrowers under each of the existing financing arrangements are the applicable vessel owning subsidiaries or bareboat charterers of the vessels, as applicable, and the facilities are guaranteed by Seanergy Maritime Holdings Corp.
At December 31, 2018, eight of the Company's owned vessels, having a net carrying value of $187,415, were subject to first and second priority mortgages as collateral to their loan facilities. In addition, the Company's two bareboat chartered vessels, having a net carrying value of $55,799 at December 31, 2018, collateralized the Company's bareboat lease agreements.
The annual principal payments required to be made after December 31, 2018, are as follows:

Twelve month periods ending
 
Amount
 
2019
   
17,273
 
2020
   
84,511
 
2021
   
31,190
 
2022
   
20,868
 
Thereafter
   
44,765
 
Total
   
198,607
 

F-29


Seanergy Maritime Holdings Corp.
Notes To The Consolidated Financial Statements
(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)

8.
Financial Instruments:
The guidance for fair value measurements applies to all assets and liabilities that are being measured and reported on a fair value basis. This guidance enables the reader of the financial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values. The same guidance requires that assets and liabilities carried at fair value should be classified and disclosed in one of the following three categories based on the inputs used to determine its fair value:


·
Level 1: Quoted market prices in active markets for identical assets or liabilities;

·
Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data;

·
Level 3: Unobservable inputs that are not corroborated by market data.

(a)
Significant Risks and Uncertainties, including Business and Credit Concentration
The Company places its temporary cash investments, consisting mostly of deposits, primarily with high credit qualified financial institutions. The Company performs periodic evaluations of the relative credit standing of those financial institutions that are considered in the Company's investment strategy. The Company limits its credit risk with accounts receivable by performing ongoing credit evaluations of its customers' financial condition and generally does not require collateral for its accounts receivable and does not have any agreements to mitigate credit risk.
(b)
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, 2018 and December 31, 2017, 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 and trade accounts and other payables: the carrying amounts approximate fair value because of the short maturity of these instruments. The carrying value approximates the fair market value for interest bearing cash classified as restricted cash, non-current.
b.
Long-term debt and other financial liabilities: The carrying value of long-term debt and other financial liabilities with variable interest rates approximates the fair market value as the long-term debt and other financial liabilities bear interest at floating interest rate. The fair value of fixed interest long-term debt is estimated using prevailing market rates as of the period end. The Company believes the terms of its fixed interest long-term debt are similar to those that could be procured as of December 31, 2018, and the carrying value of $2,000 approximates the fair market value of $2,007. The fair value of the fixed interest long-term debt has been obtained through Level 2 inputs of the fair value hierarchy.
F-30

Seanergy Maritime Holdings Corp.
Notes To The Consolidated Financial Statements
(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)

9.
Commitments and Contingencies:
Contingencies
Various claims, lawsuits, and complaints, including those involving government regulations and product liability, arise in the ordinary course of the shipping business. In addition, losses may arise from disputes with charterers, agents, insurance and other claims with suppliers relating to the operations of the Company's vessels. 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 accrues for the cost of environmental liabilities when management becomes aware that a liability is probable and is able to reasonably estimate the probable exposure. Currently, management is not aware of any such claims or contingent liabilities that should be disclosed, or for which a provision should be established in the accompanying consolidated financial statements. The Company is covered for liabilities associated with the individual vessels' actions to the maximum limits as provided by Protection and Indemnity (P&I) Clubs, members of the International Group of P&I Clubs.
Commitments
As discussed in Note 2(p), the Company employees certain of its’ vessels under lease agreements. Time charters typically may provide for variable lease payments with charterers’ options to extend the lease terms and termination clauses. The Company’s time charters range from 5 to 60 months and extension periods vary from 3 to 18 months. In addition, the time charters contain termination clauses which protect either the Company or the charterers from material adverse situations. Variable lease payments in the Company’s time charters vary based on changes on freight market index. The Company has the option to convert some of these variable lease payments to fixed based on the prevailing Capesize forward freight agreement rates.
Future minimum contractual charter revenue, based on vessels committed to non-cancelable, time charter contracts as of December 31, 2018, will be $30,805 during the years 2019 to 2023. These amounts do not include any assumed off-hire.
The following table sets forth the Company's future minimum contractual charter revenue as at December 31, 2018:

Twelve month periods ending December 31,
 
Amount
 
2019
   
8,540
 
2020
   
5,661
 
2021
   
5,738
 
2022
   
5,831
 
2023
   
5,035
 
Total
   
30,805
 

In April 2018, the Company moved into its new office spaces under a five year lease term, with a Company option to extend the lease term for another five years. The monthly rent is Euro 13,000 (or $15 based on the Euro/U.S. dollar exchange rate of €1.0000:$1.145 as of December 31, 2018), which is adjusted annually by one percent for inflation. The first year rent payments have been prepaid as of December 31, 2018. Under ASC 842, the lease is classified as an operating lease and a lease liability and right-of-use asset based on the present value of future minimum lease payments have been recognized on the balance sheet. The monthly rent expense is recorded in General and administrative expenses.
The following table sets forth the Company's office rental obligations as at December 31, 2018:

Twelve month periods ending December 31,
 
Amount
 
2019
   
128
 
2020
   
182
 
2021
   
184
 
2022
   
185
 
2023
   
54
 
Total
   
733
 
F-31

Seanergy Maritime Holdings Corp.
Notes To The Consolidated Financial Statements
(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)

10.
Capital Structure:
(a)  Common Stock
On January 8, 2016, the Company effected a one-for-five reverse stock split of the Company's issued common stock. The reverse stock split ratio and the implementation and timing of the reverse stock split were determined by the Company's Board of Directors. The reverse stock split did not change the authorized number of shares or par value of the Company's 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 the Plan.
On August 5, 2016, the Company entered into a securities purchase agreement with an unaffiliated third party, which is an institutional investor, under which the Company sold 78,666 of its common shares in a registered direct offering at a price of $62.25 per share. On August 10, 2016, the Company completed the registered direct offering for net proceeds of approximately $4,080. The net proceeds of this offering were used for general corporate purposes.
On November 18, 2016, the Company entered into a securities purchase agreement with unaffiliated third parties, which are institutional investors, under which the Company sold 87,000 of its common shares in a registered direct offering at a price of $41.25 per share. On November 23, 2016, the Company completed the registered direct offering for net proceeds of approximately $3,210, which proceeds were used for general corporate purposes, including funding of vessel acquisitions.
On December 13, 2016, the Company completed its public offering of 666,666 of its common shares and 10,000,000 class A warrants to purchase an aggregate of 666,666 common shares of the Company, at a combined price of $22.50 per share and class A warrant . The offering was in connection with the Company's form F-1 filed with the SEC on October 28, 2016, which was further amended on November 29, 2016, December 5, 2016, December 6, 2016 and December 8, 2016. The net proceeds were approximately $13,081, which proceeds were used to prepay $6,900 of the Jelco loan facility (Note 3) and for general corporate purposes, including funding of vessel acquisitions.
On December 21, 2016, the Company completed the sale of an additional 86,666 of its common shares and 1,500,000 class A warrants to purchase 86,666 common shares of the Company, at a price of $22.35 per share and $0.01 per class A warrant , respectively, pursuant to the exercise of the over-allotment option granted to the underwriters in the Company's public offering that closed on December 13, 2016. The net proceeds were approximately $1,775, which proceeds were used for general corporate purposes, including funding of vessel acquisitions.
On February 3, 2017, the Company entered into an Equity Distribution Agreement with Maxim Group LLC, or "Maxim", as sales agent, under which the Company would offer and sell, from time to time through Maxim up to $20,000 of its common shares. The Company would determine, at its sole discretion, the timing and number of shares to be sold pursuant to the Equity Distribution Agreement along with any minimum price below which sales would not be made.  Maxim would make any sales pursuant to the Equity Distribution Agreement using its commercially reasonable efforts consistent with its normal trading and sales practices. Sales of common shares, if any, would be made by means of ordinary brokers' transactions on the Nasdaq Capital Market, in negotiated transactions or transactions that are deemed to be "at the market" offerings as defined in Rule 415 under the Securities Act of 1933, as amended, including sales made to or through a market maker other than on an exchange, at prices related to the prevailing market prices or at negotiated prices. On June 27, 2017, the Company and Maxim mutually terminated the Equity Distribution Agreement. As of June 27, 2017, the Company has sold a total of 185,477 of its common shares for aggregate net proceeds of $2,597 in connection with this public at-the-market offering. Maxim has received aggregate compensation for such sales of $86 as of June 27, 2017.
F-32

Seanergy Maritime Holdings Corp.
Notes To The Consolidated Financial Statements
(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)


On April 10, 2017, the Company issued 8,333 of its common shares to an unaffiliated third party for the provision of professional services related to the Company’s internet-based investor relations efforts.
On May 18, 2017, the Company was notified by NASDAQ that it was no longer in compliance with NASDAQ Listing Rule 5550(a)(2) because the closing bid price of the Company's common stock for 30 consecutive business days, from April 5, 2017 to May 17, 2017, was below the minimum $1.00 per share bid price requirement for continued listing on the Nasdaq Capital Market. This notification had no effect on the listing of the Company's common stock, and the applicable grace period to regain compliance was 180 days, expiring on November 14, 2017. The Company could cure this deficiency if the closing bid price of its common stock was $1.00 per share or higher for at least ten consecutive business days during the grace period. On September 5, 2017, the Company received a letter from The Nasdaq Stock Market confirming that it has regained compliance with the minimum bid price requirement.
On April 23, 2018, the Company received written notification from the NASDAQ Stock Market, indicating that because the closing bid price of the Company's common stock for 30 consecutive business days, from March 8, 2018 to April 20, 2018, was below the minimum $1.00 per share bid price requirement for continued listing on the Nasdaq Capital Market, the Company was not in compliance with Nasdaq Listing Rule 5550(a)(2). Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), the applicable grace period to regain compliance was 180 days, or until October 22, 2018. On October 23, 2018, the Company received written notification from the NASDAQ Stock Market, indicating that the Company was granted an additional 180-day grace period, until April 22, 2019, to cure its non-compliance with Nasdaq Listing Rule 5550(a)(2). The Company can cure this deficiency if the closing bid price of its common stock is $1.00 per share or higher for at least ten consecutive business days during the grace period. The Company intends to cure the deficiency with a reverse stock split effectuated on March 20, 2019. During this time, the Company's common stock will continue to be listed and trade on the Nasdaq Capital Market.
On March 20, 2019, the Company's common stock began trading on a split-adjusted basis, following a February 26, 2019 approval from the Company's Board of Directors to reverse split the Company's common stock at a ratio of one-for-fifteen. No fractional shares were issued in connection with the reverse split. Shareholders who would otherwise hold a fractional share of the Company’s common stock will receive a cash payment in lieu of such fractional share. 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 (Note 14h).
On November 7, 2018, the Company issued 120,000 of its common shares to Cargill as part of the sale and leaseback transaction (Note 7).
(b)  Warrants
On December 13, 2016, in connection with the public offering of December 13, 2016, the Company granted 10,000,000 class A warrants with an exercise price of $30.00 each. In connection with the offering, the Company also issued the representative of the underwriters a warrant ("Warrant I)" to purchase 33,333 of its common shares ("Warrant Shares"). The purchase price of one Warrant Share, which will be received by the Company, is equal to $28.13. Exercise of the purchase rights represented by Warrant I may be made, in whole or in part. The class A warrants were approved for listing on the Nasdaq Capital Market and trade under the ticker symbol "SHIPW" beginning on December 8, 2016. The class A warrants are immediately exercisable and expire on December 13, 2021. The Warrant I is exercisable beginning June 6, 2017 and expires on December 7, 2019. If and only if an effective registration statement covering the issuance of the common shares under the class A warrants is not available, the class A warrants may be exercised, at the holder's option, pursuant to the "cashless exercise" clause of the class A warrant agreement. Under the "cashless exercise", the holder will receive a net number of common shares determined according to class A warrant agreement. Similarly, if and only if an effective registration statement covering the issuance of the common shares under Warrant I is not available, the Warrant I may be exercised, at the holder's option, pursuant to the "cashless exercise" clause of the representative's warrant agreement. Under the
F-33


Seanergy Maritime Holdings Corp.
Notes To The Consolidated Financial Statements
(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)

"cashless exercise", the holder will receive a net number of common shares determined according to representative's warrant agreement. The Company may call the class A warrants for cancellation upon ten trading days prior written notice commencing thirteen months after issuance, subject to certain conditions, including the volume weighted average price of the Company's common shares exceeding $105.00 for a period of ten consecutive trading days.
On December 21, 2016, in connection with the exercise of the over-allotment option granted to the underwriters in the public offering of December 13, 2016, the Company granted an additional 1,500,000 class A warrants at a price of $0.01 per class A warrant with an exercise price of $30.00 each. In connection with the offering, the Company also issued the representative of the underwriters a warrant ("Warrant II") to purchase 4,333 of its common shares ("Warrant Shares"). The purchase price of one Warrant Share, which will be received by the Company, is equal to $28.13. Exercise of the purchase rights represented by Warrant II may be made, in whole or in part. The class A warrants are immediately exercisable and expire on December 13, 2021. If and only if an effective registration statement covering the issuance of the common shares under the class A warrants is not available, the class A warrants may be exercised, at the holder's option, pursuant to the "cashless exercise" clause of the class A warrant agreement. Under the "cashless exercise", the holder will receive a net number of common shares determined according to class A warrant agreement. Similarly, if and only if an effective registration statement covering the issuance of the common shares under Warrant II is not available, the Warrant II may be exercised, at the holder's option, pursuant to the "cashless exercise" clause of the representative's warrant agreement. Under the "cashless exercise", the holder will receive a net number of common shares determined according to representative's warrant agreement. The Warrant II is exercisable beginning June 6, 2017 and expires on December 7, 2019.
As of December 31, 2018, the Company had outstanding warrants, including both the class A warrants and Warrant I and Warrant II issued to the representative of the underwriters, exercisable to purchase an aggregate of 804,333 shares of the Company’s common shares.

11.
Interest and Finance Costs:
Interest and finance costs are analyzed as follows:
   
Year ended December 31,
 
   
2018
   
2017
   
2016
 
Interest on long-term debt
   
14,819
     
11,698
     
6,943
 
Amortization of debt issuance costs
   
1,173
     
518
     
265
 
Other
   
423
     
61
     
27
 
Total
   
16,415
     
12,277
     
7,235
 

Interest and finance costs-related party are analyzed as follows:
   
Year ended December 31,
 
   
2018
   
2017
   
2016
 
Interest on long-term debt - related party
   
1,724
     
1,182
     
155
 
Amortization of debt issuance costs related party
   
7
     
13
     
-
 
Convertible notes interest expense
   
2,811
     
1,800
     
1,298
 
Convertible notes amortization of debt discount
   
4,339
     
2,127
     
1,163
 
Total
   
8,881
     
5,122
     
2,616
 

F-34


Seanergy Maritime Holdings Corp.
Notes To The Consolidated Financial Statements
(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)


12.
Loss per Share:
The calculation of net loss per common share is summarized below:
 
For the years ended December 31,
 
 
2018
 
2017
 
2016
 
             
Net loss
   
(21,058
)
   
(3,235
)
   
(24,623
)
                         
Weighted average common shares outstanding – basic
   
2,507,087
     
2,389,719
     
1,370,200
 
Net loss per common share – basic
 
$
(8.40
)
 
$
(1.35
)
 
$
(17.97
)

As of December 31, 2018, 2017 and 2016, securities that could potentially dilute basic EPS in the future that were not included in the computation of diluted EPS, because to do so would have anti-dilutive effect, are any incremental shares of non-vested equity incentive plan shares (Note 13) and of unexercised warrants (Note 10), both calculated with the treasury stock method, as well as shares assumed to be converted with respect to the convertible  notes (Note 3) calculated with the if-converted method.
13.
Equity Incentive Plan:
On December 15, 2016, the Compensation Committee granted an aggregate of 51,520 restricted shares of common shares, pursuant to the 2011 Equity Incentive Plan. Of the total 51,520 shares, 18,320 shares were granted to the Company's board of directors, 29,866 shares were granted to certain of the Company's other employees and 3,334 shares were granted to the sole director of the Company's commercial manager, a non-employee. The fair value of each share on the grant date was $19.50. All the shares will vest over a period of three years.
On February 1, 2018, the Compensation Committee granted an aggregate of 84,000 restricted shares of common stock pursuant to the 2011 Equity Incentive Plan, as amended. Of the total 84,000 shares issued, 38,334 shares were granted to the Company’s board of directors, 44,333 shares were granted to certain of the Company's employees and 1,333 shares were granted to the sole director of the Company's commercial manager, a non-employee. The fair value of each share on the grant date was $15.53. All the shares will vest over a period of two years.
As of December 31, 2018, 122,102 shares remained reserved for issuance under the Company's Equity Incentive Plan.
F-35

Seanergy Maritime Holdings Corp.
Notes To The Consolidated Financial Statements
(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)


Restricted shares during 2018, 2017 and 2016 is analyzed as follows:
   
Number of Shares
   
Weighted Average Grant Date Price
 
Outstanding at December 31, 2015
   
10,133
   
$
55.50
 
Granted
   
51,520
     
19.50
 
Vested
   
(17,606
)
   
25.35
 
Forfeited
   
(533
)
   
55.50
 
Outstanding at December 31, 2016
   
43,514
   
$
25.05
 
Vested
   
(18,340
)
   
26.55
 
Outstanding at December 31, 2017
   
25,174
     
24.00
 
Granted
   
84,000
     
15.53
 
Vested
   
(71,607
)
   
15.53
 
Forfeited
   
(3,066
)
   
18.60
 
Outstanding at December 31, 2018
   
34,501
     
16.35
 
                 

The fair value of the restricted shares has been determined with reference to the closing price of the Company's common share on the date the agreements were signed. The aggregate compensation cost is being recognized ratably in the consolidated statement of loss over the respective vesting periods. The related expense for shares granted to the Company's board of directors and certain of its employees for the years ended December 31, 2018, 2017 and 2016 amounted to $1,281, $591 and $604, respectively, and is included under general and administration expenses.
The unrecognized cost for the non-vested shares granted to the Company's board of directors and certain of its employees as of December 31, 2018 and 2017 amounted to $221 and $242, respectively. The related expense for shares granted to non-employees for the years ended December 31, 2018, 2017 and 2016, amounted to $21, $24 and $20, respectively, and is included under voyage expenses. At December 31, 2018, the weighted-average period over which the total compensation cost related to non-vested awards granted to the Company's board of directors and its other employees not yet recognized is expected to be recognized is 0.75 year.
14.
Subsequent Events

(a)
On January 10, 2019, the Compensation Committee granted an aggregate of 144,000 restricted shares of common stock pursuant to the Plan. Of the total 144,000 shares issued, 66,667 shares were granted to the board of directors, 70,666 shares were granted to certain of the Company's employees and 6,667 shares were granted to the sole director of the Company's commercial manager, a non-employee. The fair value of each share on the grant date was $9.15. All the shares will vest over a period of two years. 48,000 shares vested on January 10, 2019, 48,000 shares will vest on October 1, 2019 and 48,000 shares will vest on October 1, 2020.

(b)
On January 31, 2019, the Company and Jelco entered into a supplemental letter with regards to the April 10, 2018 facility in order to extend the final repayment date to April 1, 2019.

(c)
On February 13, 2019, the Company entered into a new loan facility with Amsterdam Trade Bank N.V. in order to (i) refinance the existing indebtedness over the Partnership under the May 24, 2017 facility, as amended and restated thereon and (ii) for general working capital purposes and more specifically for the financing of installation of open loop scrubber systems on the Squireship and Premiership . The loan is divided in Tranche A, relating to the refinancing of the Partnership , and Traches B and C for the financing of the scrubber systems on the Squireship and the Premiership, respectively. Pursuant to the terms of the facility, Tranche A is repayable in sixteen equal quarterly installments being $200 each starting from
F-36

Seanergy Maritime Holdings Corp.
Notes To The Consolidated Financial Statements
(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)

February 26, 2019 and a balloon payment of $13,190 and each of Tranche B and C in twelve quarterly installments of $187.5 starting from November 27, 2019. The loan bears interest of LIBOR plus a margin of 4.65% with quarterly interest payments. The loan is secured by a first priority mortgage over the Partnership , a general assignment covering earnings, insurances and requisition compensation over the Partnership , an earnings account pledge, a shares security deed relating to the shares of the vessel’s owning subsidiary, technical and commercial managers' undertakings and charter assignments.

(d)
On February 13, 2019, the Company and Jelco entered into a second amending and restating deed amending and restating the October 4, 2016 facility, as amended and restated thereon, in order to, among other things, (i) extend the final repayment date to June 30, 2020 and (ii) record new second priority securities over the Partnership. A second priority mortgage, a second priority general assignment covering earnings, insurances and requisition compensation over the Partnership and a guarantee issued from the vessel’s owning subsidiary were executed on February 15, 2019.

(e)
On February 13, 2019, the Company and Jelco entered into a supplemental agreement to the May 24, 2017 facility, as amended and restated thereon, in order to, among other things, (i) extend the final repayment date to December 30, 2020 and (ii) record new second priority securities over the Partnership . A second priority mortgage, a second priority general assignment covering earnings, insurances and requisition compensation over the Partnership and a guarantee issued from the vessel’s owning subsidiary were executed on February 15, 2019. On the same date, Jelco entered into a deed of release and fully discharged the previous second priority mortgage over the Partnership and all other securities created in favour of Jelco .

(f)
On February 13, 2019, the Company amended the September 27, 2017 convertible  note issued to Jelco, pursuant to which (i) the maturity date was extended to December 31, 2022, (ii) the aggregate outstanding principal amount shall be repaid on the maturity date, (iii) an option was given to the Company to prepay at any time the whole or any part of the note in a number of fully paid and nonassessable shares in the Company equal to an amount of the note being prepaid divided by a price per share to be agreed with Jelco and (iv) the note was secured by new second priority securities over the Partnership . A second priority mortgage, a second priority general assignment covering earnings, insurances and requisition compensation over the Partnership and a guarantee issued from the vessel’s owning subsidiary were executed on February 15, 2019.

(g)
On February 15, 2019, Amsterdam Trade Bank N.V. entered into a deed of release and fully discharged the $16,390 outstanding balance of the May 24, 2017, as amended, senior secured term loan facility. The first priority mortgage over the Partnership and all other securities created in favour of Amsterdam Trade Bank N.V. were irrevocably and unconditionally released pursuant to the deed of release.

(h)
On March 20, 2019, the Company's common stock began trading on a split-adjusted basis, following a February 26, 2019 approval from the Company's Board of Directors to reverse split the Company's common stock at a ratio of one-for-fifteen. 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.

(i)
In February and March 2019, the Company received approval from the credit committees of certain of its lenders to (i) amend the applicable thresholds of certain financial covenants of its credit facilities until March 31, 2020 and (ii) defer a total of $3,311 of debt installments that were originally scheduled for 2019 to dates falling in 2020 and 2021. The approvals are subject to the completion of definitive documentation.

(j)
In March 2019, the Company reached an in-principle agreement with Jelco for (i) an additional term loan facility in the amount of $7,000 to be provided by Jelco to the Company, the proceeds of which will be used to (a) refinance the Third Jelco Loan Facility with current outstanding balance of $2,000 and (b) for general corporate purposes; (ii) the extension of the maturity of the First Jelco Note to December 31, 2020 and (iii) the extension of the availability of the $3,500 advance under the Second Jelco Note by one more year, to April 10, 2020.  This agreement is subject to completion of definitive documentation.

F-37

Schedule I- Condensed Financial Information of Seanergy Maritime Holdings Corp. (Parent Company Only)
Balance Sheets
December 31, 2018 and 2017
(In thousands of US Dollars, except for share and per share data)

   
2018
   
2017
 
ASSETS
           
Current assets:
           
Cash and cash equivalents
   
792
     
1,988
 
Restricted cash
   
50
     
50
 
Other current assets
   
222
     
323
 
Total current assets
   
1,064
     
2,361
 
                 
Non-current assets:
               
Investments in subsidiaries*
   
52,999
     
64,121
 
Total non-current assets
   
52,999
     
64,121
 
                 
TOTAL ASSETS
   
54,063
     
66,482
 
                 
LIABILITIES AND STOCKHOLDERS EQUITY
               
Current liabilities:
               
Trade accounts and other payables
   
433
     
257
 
Accrued liabilities
   
1,854
     
785
 
Total current liabilities
   
2,287
     
1,042
 
                 
Non-current liabilities:
               
Due to related parties, noncurrent
   
19,349
     
17,342
 
Long-term portion of convertible notes
   
11,124
     
6,785
 
Total liabilities
   
32,760
     
25,169
 
                 
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,
2018 and 2017; 2,666,223 and 2,465,289 shares issued and outstanding as
at December 31, 2018 and 2017, respectively
   
-
     
-
 
Additional paid-in capital
   
385,846
     
383,010
 
Accumulated deficit
   
(364,543
)
   
(341,697
)
Total Stockholders' equity
   
21,303
     
41,313
 
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
   
54,063
     
66,482
 

* Eliminated in consolidation
F-38

Schedule I- Condensed Financial Information of Seanergy Maritime Holdings Corp. (Parent Company Only)
  Statements of Loss
For the years ended December 31, 2018, 2017 and 2016
(In thousands of US Dollars, except for share and per share data)

   
2018
   
2017
   
2016
 
Expenses:
                 
General and administration expenses
   
(3,380
)
   
(2,642
)
   
(2,115
)
Operating loss
   
(3,380
)
   
(2,642
)
   
(2,115
)
                         
Other (expenses) / income, net:
                       
Interest and finance cost – related party
   
(8,881
)
   
(5,122
)
   
(2,621
)
Gain on debt refinancing
   
-
     
11,392
     
-
 
Other, net
   
(327
)
   
(29
)
   
(18
)
Total other (expenses) / income, net
   
(9,208
)
   
6,241
     
(2,639
)
                         
Equity in loss of subsidiaries*
   
(8,470
)
   
(6,834
)
   
(19,869
)
                         
Net loss
   
(21,058
)
   
(3,235
)
   
(24,623
)
                         
Net loss per common share
                       
Basic
   
(8.40
)
   
(1.35
)
   
(17.97
)
Weighted average common shares outstanding
                       
Basic
   
2,507,087
     
2,389,719
     
1,370,200
 

* Eliminated in consolidation
F-39

Schedule I- Condensed Financial Information of Seanergy Maritime Holdings Corp. (Parent Company Only)
Statements of Cash Flows
For the years ended December 31, 2018, 2017 and 2016
(In thousands of US Dollars)

   
2018
   
2017
   
2016
 
Net cash (used in) / provided by operating activities
   
(5,609
)
   
6,314
     
(2,441
)
                         
Cash flows used in investing activities:
                       
Investments in subsidiaries
   
2,413
     
(40,972
)
   
(28,734
)
Net cash provided by / (used in) investing activities
   
2,413
     
(40,972
)
   
(28,734
)
                         
Cash flows from financing activities:
                       
Net proceeds from issuance of common stock
   
-
     
2,637
     
22,606
 
Proceeds from convertible notes
   
-
     
9,000
     
9,400
 
Proceeds from related party debt
   
2,000
     
16,200
     
12,800
 
Repayments of related party debt
   
-
     
-
     
(6,900
)
Repayments of convertible notes
   
-
     
-
     
-
 
Net cash provided by financing activities
   
2,000
     
27,837
     
37,906
 
                         
Net (decrease) / increase in cash and cash equivalents and restricted cash
   
(1,196
)
   
(6,821
)
   
6,731
 
Cash and cash equivalents and restricted cash at beginning of period
   
2,038
     
8,859
     
2,128
 
Cash and cash equivalents and restricted cash at end of period
   
842
     
2,038
     
8,859
 
                         
SUPPLEMENTAL CASH FLOW INFORMATION
                       
Cash paid during the period for:
                       
Interest
   
3,648
     
2,773
     
1,176
 
                         
Non cash financing activities:
                       
Shares issued in connection with financing
    1,541
      -
      -
 
Conversion of related party debt into convertible note
   
-
     
(4,750
)
   
-
 

F-40

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, 2018, 2017 and 2016.
The parent-company-only condensed financial statements should be read in conjunction with the Company's consolidated financial statements.
2.   Transactions with Related Parties
Convertible Notes
On March 12, 2015, the Company issued a convertible note of $4,000 to Jelco for general corporate purposes. As amended, at Jelco's option, the outstanding principal amount under the convertible note may be paid at any time in common shares at a conversion price of $13.50 per share.
On September 7, 2015, the Company issued a revolving convertible note of up to $6,765 to Jelco for general corporate purposes. As amended, the maximum principal amount available to be drawn was increased to $24,665. Following an amendment on September 1, 2018, a drawdown request of up to $3,500 may be made by April 10, 2019 (the “Final Revolving Advance Date”). If the request is not made by the Final Revolving Advance Date, the advance will not be available to be drawn and the principal amount will be decreased to $21,165. 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 $13.50 per share.
On September 27, 2017, the Company issued a convertible note of $13,750 to Jelco. As amended, at Jelco's option, the outstanding principal amount under the convertible note may be paid at any time in common shares at a conversion price of $13.50 per share. Of the $13,750 under the note, $4,750 were used to make a mandatory prepayment under the May 2017 Jelco loan facility.
See Note 3 "Transactions with Related Parties" to the consolidated financial statements for further information.
Loan Agreements
On October 4, 2016, the Company entered into a $4,150 secured loan facility with Jelco to finance the initial deposits for the vessels Lordship  and the Knightship . On November 17, 2016 and November 28, 2016, the Company entered into amendments to this facility, which, among other things, increased the aggregate amount that may be borrowed under the facility to up to $12,800. On December 14, 2016, the Company prepaid Jelco a total of $6,900 in accordance with the facility provisions.
On March 28, 2017, the Company had entered into a $47,500 loan agreement with Jelco. Under the terms of this agreement, Jelco would have made available this facility to the Company in the event that the Company was not able to secure third party financing to partly fund a couple of the its transactions. This facility was terminated on September 27, 2017, and no amounts were drawn down under this facility.
On May 24, 2017, the Company entered into an up to $16,200 secured loan facility with Jelco to partially finance the acquisition of the Partnership . The Company drew down the $16,200 on May 24, 2017. On June 22, 2017 and on August 22, 2017, the Company entered into supplemental letters with Jelco to amend the terms of this loan facility, whereby a mandatory repayment of $4,750 was deferred until September 29, 2017. On September 27, 2017, the facility was amended and restated. The mandatory repayment of $4,750 was financed by the convertible note issued to Jelco on September 27, 2017.
On April 10, 2018, the Company entered into a $2,000 loan facility with Jelco for working capital purposes. The Company drew down the $2,000 on April 12, 2018. The facility, as amended and restated on June 13, 2018 and as further amended on August 11, 2018 and January 31, 2019 by supplemental letters, bears interest at 10% per annum, payable quarterly, and the principal is payable in one bullet payment due on April 1, 2019. The facility is secured by a guarantee from the Company’s wholly-owned subsidiary, Emperor Holding Ltd. As of December 31, 2018, $2,000 was outstanding under this loan facility and is classified under non-current liabilities.
See Note 3 "Transactions with Related Parties" to the consolidated financial statements for further information.
In March 2019, the Company reached an in-principle agreement with Jelco for (i) an additional term loan facility in the amount of $7,000 to be provided by Jelco to the Company, the proceeds of which will be used to (a) refinance the Third Jelco Loan Facility with current outstanding balance of $2,000 and (b) for general corporate purposes; (ii) the extension of the maturity of the First Jelco Note to December 31, 2020 and (iii) the extension of the availability of the $3,500 advance under the Second Jelco Note by one more year, to April 10, 2020. This agreement is subject to completion of definitive documentation.
F-41

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)

3.   Guarantee
The Company has guaranteed the payment of principal and interest under the terms of the following loan agreements: the March 6, 2015 loan agreement with Alpha Bank A.E. , the S eptember 1, 2015 loan agreement with Hamburg Commercial Bank AG, formerly known as HSH Nordbank AG, the September 11, 2015 facility agreement with UniCredit Bank AG, the November 4, 2015 loan agreement with Alpha Bank A.E., the May 24, 2017 facility agreement with Amsterdam Trade Bank N.V, the June 11, 2018 loan agreement with Blue Ocean maritime lending funds managed by EnTrustPermal and the June 28, 2018 sale and leaseback agreement with Hanchen Limited . In the event of a default under these loan agreements, the Company will be directly liable to the lenders. These facilities mature at various times between 2020 and 2026. The maximum potential amount that the Company could be liable for under these guarantee as of December 31, 2018 is $195,857.
See Note 7 "Long-Term Debt" to the consolidated financial statements for further information.
4.   Restrictions Which Limit the Payment of Dividends
Restrictions on Payment of Dividends
The Alpha Bank A.E. loan facility dated March 6, 2015 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 Alpha Bank A.E. loan facility dated November 4, 2015 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.
Restricted Net Assets of Consolidated Subsidiaries
As of December 31, 2018, t he negative restricted net assets of the vessel owning subsidiary of Geniuship under the September 1, 2015 loan agreement with Hamburg Commercial Bank AG amounted to $903. As of December 31, 2018, t he restricted net assets of the vessel owning subsidiary of Gloriuship under the September 1, 2015 loan agreement with Hamburg Commercial Bank amounted to $1,721. The Hamburg Commercial Bank AG loan agreement places a restriction on the vessel owning subsidiaries ' ability to distribute dividends to the t, 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 after distribution of dividends is less than $3,000. The $3,000 condition on payment of dividends does not apply after June 30, 2018.
As of December 31, 2018, the restricted net assets of the vessel owning subsidiary of Partnership   that has entered into the May 24, 2017 loan agreement with Amsterdam Trade Bank NV (ATB), as amended and restated in September 25, 2017, amounted to $15,219. The ATB loan agreement places a restriction on the vessel owning subsidiary 's ability to distribute dividends to the Company, unless an additional repayment in an aggregate amount of $3,190 have been made.









F-42

Exhibit 4.6



AMENDED AND RESTATED
SEANERGY MARITIME HOLDINGS CORPORATION
2011 EQUITY INCENTIVE PLAN
ADOPTED ON JANUARY 10, 2019

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
1

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
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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
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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 3,000,000.The following shares of Common Stock shall again become available for Awards under the Plan: (i) any shares that are subject to an Award under the Plan and that remain unissued upon the cancellation or termination of such Award for any reason whatsoever; (ii) any shares of restricted stock forfeited pursuant to the Plan or the applicable Award Agreement; provided that any dividend equivalent rights with respect to such shares that have not theretofore been directly remitted to the grantee are also forfeited; and (iii) any shares in respect of which an Award is settled for cash without the delivery of shares to the grantee.  Any shares tendered or withheld to satisfy the grant or exercise price or tax withholding obligation pursuant to any Award shall again become available to be delivered pursuant to Awards under the Plan.
(b)   Source of Shares .  Shares issued pursuant to the Plan may be authorized but unissued Common Stock or treasury shares.  The Administrator may direct that any stock certificate evidencing shares issued pursuant to the Plan shall bear a legend setting forth such restrictions on transferability as may apply to such shares.
(c)   Adjustments .  (i)  In the event that any dividend or other distribution (whether in the form of cash, Company shares, other securities or other property), stock split, reverse stock split, reorganization, merger, consolidation, split-up, combination, repurchase or exchange of Company shares or other securities of the Company, issuance of warrants or other rights to purchase Company shares or other securities of the Company, or other similar corporate transaction or event, other than an Equity Restructuring (as defined below), affects the Company shares such that an adjustment is determined by the Administrator to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan or with respect to an Award, then the Administrator shall, in such manner as it may deem equitable, adjust any or all of the number of shares or other securities of the Company (or number and kind of other securities or property) with respect to which Awards may be granted under the Plan, including the maximum number of shares issuable to an individual as set forth in Section 1.5(d).
(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
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governmental body or securities exchange, accounting principles or law, whenever the Administrator determines that such adjustments are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan or with respect to an Award, including providing for (A) adjustment to (1) the number of shares or other securities of the Company (or number and kind of other securities or property) subject to outstanding Awards or to which outstanding Awards relate and (2) the Exercise Price (as defined below) with respect to any Award and (B) a substitution or assumption of Awards, accelerating the exercisability or vesting of, or lapse of restrictions on, Awards, or accelerating the termination of Awards by providing for a period of time for exercise prior to the occurrence of such event, or, if deemed appropriate or desirable, providing for a cash payment to the holder of an outstanding Award in consideration for the cancellation of such Award (it being understood that, in such event, any option or stock appreciation right having a per share Exercise Price equal to, or in excess of, the Fair Market Value (as defined below) of a share subject to such option or stock appreciation right may be cancelled and terminated without any payment or consideration therefor); provided , however , that with respect to options and stock appreciation rights, unless otherwise determined by the Administrator, such adjustment shall be made in accordance with the provisions of Section 424(h) of the Code.
(iii)   In the event of (A) a dissolution or liquidation of the Company, (B) a sale of all or substantially all the Company's assets or (C) a merger, reorganization or consolidation involving the Company or one of its Subsidiaries (as defined below), the Administrator shall have the power to:
(1)  provide that outstanding options, stock appreciation rights and/or restricted stock units (including any related dividend equivalent right) shall either continue in effect, be assumed or an equivalent award shall be substituted therefor by the successor corporation or a parent corporation or subsidiary corporation;
(2)  cancel, effective immediately prior to the occurrence of such event, options, stock appreciation rights and/or restricted stock units (including each dividend equivalent right related thereto) outstanding immediately prior to such event (whether or not then exercisable) and, in full consideration of such cancellation, pay to the holder of such Award a cash payment in an amount equal to the excess, if any, of the Fair Market Value (as of a date specified by the Administrator) of the shares subject to such Award over the aggregate Exercise Price of such Award (it being understood that, in such event, any option or stock appreciation right having a per share Exercise Price equal to, or in excess of, the Fair Market Value of a share subject to such option or stock appreciation right may be cancelled and terminated without any payment or consideration therefor); or
(3)  notify the holder of an option or stock appreciation right in writing or electronically that each option and stock appreciation right shall be fully vested and exercisable for a period of 30 days from the date of such notice, or such shorter period as the Administrator may determine to be reasonable, and the option or stock appreciation right shall terminate upon the expiration of such period (which period shall expire no later than immediately prior to the consummation of the corporate transaction).
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(iv)   In connection with the occurrence of any Equity Restructuring, and notwithstanding anything to the contrary in this Section 1.5(c):
(A)   The number and type of securities or other property subject to each outstanding Award and the Exercise Price or grant price thereof, if applicable, shall be equitably adjusted; and
(B)   The Administrator shall make such equitable adjustments, if any, as the Administrator may deem appropriate to reflect such Equity Restructuring with respect to the aggregate number and kind of shares that may be issued under the Plan (including, but not limited to, adjustments of the limitations set forth in Sections 1.5(a) and 1.5(d)).  The adjustments provided under this Section 1.5(c)(iv) shall be nondiscretionary and shall be final and binding on the affected participant and the Company.
(d)   Individual Limit .  Except for the limits set forth in this Section 1.5, no provision of this Plan shall be deemed to limit the number or value of shares of Common Stock with respect to which the Administrator may make Awards to any Key Person.  Subject to adjustment as provided in Section 1.5(c), the total number of shares of Common Stock with respect to which incentive stock options may be granted under the Plan to any one employee of the Company or a "parent corporation" or "subsidiary corporation" (as such terms are defined in Section 424 of the Code) of the Company during any one calendar year shall not exceed 3,125,000.  Incentive stock options granted and subsequently cancelled or deemed to be cancelled ( e.g. , as a result of re-pricing) in a calendar year count against the limit in the preceding sentence even after their cancellation.
1.6
Definitions of Certain Terms
(a)   "Affiliate" shall mean (i) any entity that, directly or indirectly, is controlled by, controls or is under common control with, the Company and (ii) any entity in which the Company has a significant equity interest, in either case as determined by the Administrator.
(b)   Unless otherwise set forth in the applicable Award Agreement, in connection with a termination of employment or consultancy/service relationship or a dismissal from Board membership, for purposes of the Plan, the term "for Cause" shall be defined as follows:
(i)   if there is an employment, severance, consulting, service, change in control or other agreement governing the relationship between the grantee, on the one hand, and the Company or an Affiliate, on the other hand, that contains a definition of "cause" (or similar phrase), for purposes of the Plan, the term "for Cause" shall mean those acts or omissions that would constitute "cause" under such agreement; or
(ii)   if the preceding clause (i) is not applicable to the grantee, for purposes of the Plan, the term "for Cause" shall mean any of the following:
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(A)   any failure by the grantee substantially to perform the grantee's employment or consulting/service or Board membership duties;
(B)   any excessive unauthorized absenteeism by the grantee;
(C)   any refusal by the grantee to obey the lawful orders of the Board or any other Person to whom the grantee reports;
(D)   any act or omission by the grantee that is or may be injurious to the Company or any Affiliate, whether monetarily, reputationally or otherwise;
(E)   any act by the grantee that is inconsistent with the best interests of the Company or any Affiliate;
(F)   the grantee's gross negligence that is injurious to the Company or any Affiliate, whether monetarily, reputationally or otherwise;
(G)   the grantee's material violation of any of the policies of the Company or an Affiliate, as applicable, including, without limitation, those policies relating to discrimination or sexual harassment;
(H)   the grantee's material breach of his or her employment or service contract with the Company or any Affiliate;
(I)   the grantee's unauthorized (1) removal from the premises of the Company or an Affiliate of any document (in any medium or form) relating to the Company or an Affiliate or the customers or clients of the Company or an Affiliate or (2) disclosure to any Person of any of the Company's, or any Affiliate's, confidential or proprietary information;
(J)   the grantee's being convicted of, or entering a plea of guilty or nolo contendere to, any crime that constitutes a felony or involves moral turpitude; and
(K)   the grantee's commission of any act involving dishonesty or fraud.
Any rights the Company or its Affiliates may have under the Plan in respect of the events giving rise to a termination or dismissal "for Cause" shall be in addition to any other rights the Company or its Affiliates may have under any other agreement with a grantee or at law or in equity.  Any determination of whether a grantee's employment, consultancy/service relationship or Board membership is (or is deemed to have been) terminated "for Cause" shall be made by the Administrator.  If, subsequent to a grantee's voluntary termination of employment or consultancy/service relationship or voluntarily resignation from the Board or involuntary termination of employment or consultancy/service relationship without Cause or removal from the Board other than "for Cause", it is discovered that the grantee's employment or consultancy/service relationship or Board membership could have been terminated "for Cause", the Administrator may deem such grantee's employment or consultancy/service relationship or Board membership to have been terminated "for Cause" upon such discovery and determination by the Administrator.
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(c)   "Code" shall mean the Internal Revenue Code of 1986, as amended.
(d)   Unless otherwise set forth in the applicable Award Agreement, "Disability" shall mean the grantee's being unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or the grantee's, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the grantee's employer.  The existence of a Disability shall be determined by the Administrator.
(e)   "Equity Restructuring" shall mean a non-reciprocal transaction between the Company and its stockholders, such as a stock dividend, stock split, spin-off, rights offering or recapitalization through a large, nonrecurring cash dividend, that affects the shares of Common Stock (or other securities of the Company) or the share price thereof and causes a change in the per share value of the shares underlying outstanding Awards.
(f)   "Exercise Price" shall mean (i) in the case of options, the price specified in the applicable Award Agreement as the price-per-share at which such share can be purchased pursuant to the option or (ii) in the case of stock appreciation rights, the price specified in the applicable Award Agreement as the reference price-per-share used to calculate the amount payable to the grantee.
(g)   The "Fair Market Value" of a share of Common Stock on any day shall be the closing price on the Nasdaq Global Market, or such other primary stock exchange upon which such shares are then listed, as reported for such day in The Wall Street Journal, or, if no such price is reported for such day, the average of the high bid and low asked price of Common Stock as reported for such day.  If no quotation is made for the applicable day, the Fair Market Value of a share of Common Stock on such day shall be determined in the manner set forth in the preceding sentence for the next preceding trading day.  Notwithstanding the foregoing, if there is no reported closing price or high bid/low asked price that satisfies the preceding sentences, or if otherwise deemed necessary or appropriate by the Administrator, the Fair Market Value of a share of Common Stock on any day shall be determined by such methods and procedures as shall be established from time to time by the Administrator.  The "Fair Market Value" of any property other than Common Stock shall be the fair market value of such property determined by such methods and procedures as shall be established from time to time by the Administrator.
(h)   "Person" shall mean any individual, firm, corporation, partnership, limited liability company, trust, incorporated or unincorporated association, joint venture, joint stock company, governmental body or other entity of any kind.
(i)   "Repricing" shall mean (i) lowering the Exercise Price of an option or a stock appreciation right after it has been granted, (ii) the cancellation of an option or a stock appreciation right in exchange for cash or another Award when the Exercise Price exceeds the Fair Market Value of the underlying shares subject to the Award and (iii) any
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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.
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
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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
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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.
(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
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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.
(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
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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.
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2.6
Grant of Restricted Stock
(a)   Restricted Stock Grants .  The Administrator may grant restricted shares of Common Stock to such Key Persons, in such amounts and subject to such vesting and forfeiture provisions and other terms and conditions as the Administrator shall determine, subject to the provisions of the Plan.  A grantee of a restricted stock Award shall have no rights with respect to such Award unless such grantee accepts the Award within such period as the Administrator shall specify by accepting delivery of a restricted stock Award Agreement in such form as the Administrator shall determine and, in the event the restricted shares are newly issued by the Company, makes payment to the Company or its Exchange Agent by certified or official bank check (or the equivalent thereof acceptable to the Administrator) in an amount at least equal to the par value of the shares covered by the Award (which payment may be waived at the time of grant of the restricted stock Award to the extent the restricted shares granted hereunder are otherwise deemed to be fully paid and non-assessable).
(b)   Issuance of Stock Certificate .  Promptly after a grantee accepts a restricted stock Award in accordance with Section 2.6(a), subject to Sections 3.2, 3.4 and 3.13, the Company or its Exchange Agent shall issue to the grantee a stock certificate or stock certificates for the shares of Common Stock covered by the Award or shall establish an account evidencing ownership of the stock in uncertificated form.  Upon the issuance of such stock certificates, or establishment of such account, the grantee shall have the rights of a stockholder with respect to the restricted stock, subject to: (i) the nontransferability restrictions and forfeiture provisions described in the Plan (including paragraphs (d) and (e) of this Section 2.6); (ii) in the Administrator's sole discretion, a requirement, as set forth in the Award Agreement, that any dividends paid on such shares shall be held in escrow and, unless otherwise determined by the Administrator, shall remain forfeitable until all restrictions on such shares have lapsed; and (iii) any other restrictions and conditions contained in the applicable Award Agreement.
(c)   Custody of Stock Certificate .  Unless the Administrator shall otherwise determine, any stock certificates issued evidencing shares of restricted stock shall remain in the possession of the Company until such shares are free of any restrictions specified in the applicable Award Agreement.  The Administrator may direct that such stock certificates bear a legend setting forth the applicable restrictions on transferability.
(d)   Nontransferability .  Except as otherwise specifically provided in this Plan or the applicable Award Agreement evidencing a restricted stock Award, shares of restricted stock granted under the Plan may not be sold, assigned, transferred, pledged or otherwise encumbered or disposed of prior to the lapsing of all restrictions thereon.  The Administrator at the time of grant shall specify the date or dates (which may depend upon or be related to the attainment of performance goals and other conditions) on which the nontransferability of the restricted stock shall lapse.  The Administrator may, in any applicable Award Agreement evidencing a restricted stock Award, permit a grantee to transfer all or some of the shares of restricted stock prior to the lapsing of all restrictions thereon to (i) the grantee's Immediate Family Members, (ii) a trust or trusts for the exclusive benefit of such Immediate Family Members or (iii) other parties approved by the Administrator.  Following any permitted transfer prior to the lapsing of all restrictions on the restricted stock, any transferred shares of restricted
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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
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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.
(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
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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
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(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.
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
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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) Jelco Delta Holding Corp., Comet Shipholding Inc. or, Claudia Restis, or any entity which Jelco Delta Holding Corp., Comet Shipholding Inc., or Claudia 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;
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(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) Jelco Delta Holding Corp., Comet Shipholding Inc., or Claudia Restis or any entity which Jelco Delta Holding Corp., Comet Shipholding Inc. or Claudia 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;
(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.
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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 .
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
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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.
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
22

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.
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
23

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.

24

Exhibit 4.10


THIS AMENDMENT is made this 23 rd day of May 2018 BETWEEN:
(1)
PARTNER SHIPPING CO. , having its registered office at the Trust Company Complex, Ajeltake Road, Ajeltake Island, MH96960 Majuro, Marshall Islands (the “Owners” ); and
(2)
V.SHIPS LIMITED , of Zina Kanther 16-18, Agia Triada, 3035 Limassol, Cyprus (the “Managers” ).
WHEREAS:
(A)
The Owners and the Managers have entered into a Ship Technical Management Agreement  with respect to the motor vessel PARTNERSHIP (IMO no. 9597848) dated May 15, 2017 (the “ Management Agreement ”);
(B)
The Owners have proceeded with the change of their country of incorporation from the Republic of The Marshall Islands to the Republic of Malta and are provisionally registered under the name “PARTNER SHIPPING CO. LIMITED” as continuing in Malta as a limited liability company as from the 23 rd day of May, 2018; and
(C)
The Owners will cease to be registered in the Republic of the Marshall Islands and be permanently registered as continuing in Malta as a limited liability company (the “ Re-domiciliation ”).
IT IS NOW THEREFORE MUTUALLY UNDERSTOOD AND AGREED BETWEEN THE PARTIES HEREOF AS FOLLOWS:
With effect from the date of the Re-domiciliation of the Owners, all references in the Management Agreement to “Partner Shipping Co.”, “Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands, MH 96960” and “Marshall Islands” shall mean “Partner Shipping Co. Limited”, “147/1, St. Lucia Street, Valletta, VLT 1185, Malta” and “Malta” respectively.
Except as provided hereinabove, the terms and conditions of the Management Agreement shall remain unchanged and in full force and effect.


IN WITNESS   WHEREOF the parties hereto have caused this Addendum to be executed by their duly authorised representatives on the date written above.
EXECUTED
)
 
By Stamatios Tsantanis
)
/s/ Stamatios Tsantanis
for and on behalf of
)
………………….
PARTNER SHIPPING CO.
)
 
     
EXECUTED
)
 
By Philippos Charalambides
)
/s/ Philippos Charalambides
for and on behalf of
)
………………….
V.SHIPS LIMITED
)
 

Exhibit 4.11


THIS AMENDMENT is made this 23 rd day of May 2018 BETWEEN:
(1)
CHAMPION OCEAN NAVIGATION CO. , having its registered office at the Trust Company Complex, Ajeltake Road, Ajeltake Island, MH96960 Majuro, Marshall Islands (the “Owners” ); and
(2)
V.SHIPS LIMITED , of Zina Kanther 16-18, Agia Triada, 3035 Limassol, Cyprus (the “Managers” ).
WHEREAS:
(A)
The Owners and the Managers have entered into a Ship Technical Management Agreement  with respect to the motor vessel CHAMPIONSHIP (IMO no. 9403516) dated September 1, 2015 (the “ Management Agreement ”);
(B)
The Owners have proceeded with the change of their country of incorporation from the Republic of Liberia to the Republic of Malta and are provisionally registered under the name “CHAMPION OCEAN NAVIGATION CO. LIMITED” as continuing in Malta as a limited liability company as from the 23 rd day of May, 2018; and
(C)
The Owners will cease to be registered in the Republic of Liberia and be permanently registered as continuing in Malta as a limited liability company (the “ Re-domiciliation ”).
IT IS NOW THEREFORE MUTUALLY UNDERSTOOD AND AGREED BETWEEN THE PARTIES HEREOF AS FOLLOWS:
With effect from the date of the Re-domiciliation of the Owners, all references in the Management Agreement to “CHAMPION OCEAN NAVIGATION CO.”, “80 Broad Street, City of Monrovia, Republic of Liberia” and “Liberia” shall mean “CHAMPION OCEAN NAVIGATION CO. LIMITED”, “147/1, St. Lucia Street, Valletta, VLT 1185, Malta” and “Malta” respectively.
Except as provided hereinabove, the terms and conditions of the Management Agreement shall remain unchanged and in full force and effect.
1


IN WITNESS   WHEREOF the parties hereto have caused this Addendum to be executed by their duly authorised representatives on the date written above.

EXECUTED
)
 
By Stamatios Tsantanis
)
/s/ Stamatios Tsantanis
for and on behalf of
)
………………….
CHAMPION OCEAN NAVIGATION CO.
)
 
     
EXECUTED
)
 
By Philippos Charalambides
)
/s/ Philippos Charalambides
for and on behalf of
)
………………….
V.SHIPS LIMITED
)
 

2

Exhibit 4.19


AMENDMENT NO. 4 TO COMMERCIAL MANAGEMENT AGREEMENT
This Amendment No. 4 (this “ Amendment ”) dated as of June 28 th , 2018, 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 Entities, as defined below, (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 as amended by an Amendment No. 1 dated as of September 11 th , 2015, further amended by an Amendment No. 2 dated as of February 24 th , 2016 and further amended by an Amendment No. 3 dated as of February 1 st , 2018 (together referred to as 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. 4 for the purpose of amending and restating the recitals of the Agreement.
NOW, THEREFORE , in consideration of the foregoing 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:
Amended and Restated Recitals (A) and (B) of the Agreement
Recitals (A) and (B) of the Agreement are hereby amended and restated as follows:
“
WHEREAS:
(A)   The Company has been appointed by certain of its various shipowning affiliated entities and its affiliated entities engaged with bareboat chartering or sub-bareboat chartering, from time to time (the “ Shipowning Entities ” and together with the Company, the “ Group ” and any of them a “ member of the Group ”) as their agent to provide certain administrative and financial support services to the Group, to appoint and instruct on behalf of the Group agents for the provision of commercial management services and to monitor the performance of such agents.


(B)   The Company, on behalf of the Group, wishes to appoint the Commercial Manager as the agent of the Group to seek, negotiate and conclude charterparties or other contracts for the employment of the vessels owned, bareboat chartered or sub-bareboat chartered by the Shipowning Entities from time to time (the “ Vessels ” and each a “ Vessel ”), on the terms and conditions set out herein.
“
Except as provided hereinabove, all other 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. 4 to the Agreement to be signed in duplicate by their respective and duly authorized representatives as of the date first written hereinabove.


SEANERGY MANAGEMENT
 
FIDELITY MARINE INC.
CORP.
   
     
     
     
By:
/s/ Stamatios Tsantanis
 
By:
/s/ Nikolaos Frantzeskakis
Name: Stamatios Tsantanis
 
Name: Nikolaos Frantzeskakis
Title: Director/President
 
Title: Sole Director



Exhibit 4.53

Dated 11 September 2015
as amended and restated on 22 November 2018


US$52,704,790


TERM LOAN FACILITY
PREMIER MARINE CO. and
FELLOW SHIPPING CO.
as joint and several borrowers

and
SEANERGY MARITIME HOLDINGS CORP.
as Guarantor
and
UNICREDIT BANK AG
as Original Lender

AMENDED AND RESTATED FACILITY AGREEMENT

relating to the part financing of the acquisition cost of m.vs.
"PREMIERSHIP" and "CPO OCEANIA" (tbr “FELLOWSHIP”)


















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 was made on 11 September 2015 and was amended and restated on 22 November 2018 pursuant to the Deed of Accession, Amendment and Restatement.
PARTIES
(1)
PREMIER MARINE CO. , 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 a borrower (" Borrower A ")
(2)
FELLOW SHIPPING CO. , 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 a borrower (" Borrower B ")
(3)
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 ")
(4)
UNICREDIT BANK AG as lender (the " Original Lender ")
BACKGROUND
The Lender has made available to the Borrowers a facility of up to $52,704,790 in two Tranches, for the purposes of assisting the Borrowers in partially financing the acquisition of the Ships from the relevant Seller.
IT IS AGREED as follows:

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.
" Anti-Boycott Legislation " means (a) Council Regulation (EC) No 2271/96 of 22 November 1996 protecting against the effects of the extra-territorial application of legislation adopted by a third country, and actions based thereon or resulting therefrom; (b) section 7 of the German Foreign Trade Regulation (Außenwirtschaftsverordnung, AWV) (in conjunction with section 4 paragraph 1 no. 3 and section 19 paragraph 3 no. 1a of the German Foreign Trade Act (Außenwirtschaftsgesetz, AWG)); and/or (c) any similar applicable anti-boycott statute.
" 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.
2

" 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).
" 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 or Borrower B.
" 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.
3

“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.
“ 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 Accession , Amendment and Restatement " means the deed of accession, amendment and restatement in respect of the Initial Facility Agreement dated    November 2018 and made between (inter alios) (i) Borrower A, (ii) Gladiator Shipping Co. and Guardian Shipping Co. as released borrowers, (iii) Borrower B as the additional borrower, (iv) the
4

Guarantor, (v) the Approved Commercial Managers, (vi) the Approved Technical Managers and (vii) 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 (in the case of Ship A being 11 September 2015 and in the case of Ship B scheduled by 30 November 2018).
“Disclosed Person ” means the person disclosed to the Lender at the date of this Agreement being the ultimate beneficial owner of at least 30 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;
5


(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

(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.
" Effective Date " has the meaning given to that term in the Deed of Accession, Amendment and Restatement.
" 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
6

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.
" 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 incorporated and existing under the laws of the Marshall Islands whose r egistered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands, MH 96960.
" Finance Document " means:

(a)
this Agreement;

(b)
the Deed of Accession, Amendment and Restatement;

(c)
each Utilisation Request;
7


(d)
the Hedging Agreement;

(e)
any Security Document;

(f)
any other document which is executed for the purpose of establishing any priority or subordination arrangement in relation to the Secured Liabilities; or

(g)
any other document designated as such by the Lender and the Borrowers.
" Financial Indebtedness " means any indebtedness for or in relation to:

(a)
moneys borrowed;

(b)
any amount raised by acceptance under any acceptance credit facility or dematerialised equivalent;

(c)
any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument;

(d)
the amount of any liability in relation to any lease or hire purchase contract which would, in accordance with GAAP, be treated as a 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.
8


“ 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.
" Indemnified Person " has the meaning given to it in Clause 14.2 ( Other indemnities ).
" Initial Facility Agreement " means the facility agreement dated 11 September 2015 (as amended and supplemented by a supplemental agreement dated 3 June 2016, a supplemental letter agreement dated 29 July 2016, a supplemental letter agreement dated 7 March 2017, a supplemental letter agreement dated 25 September 2017, a supplemental letter dated 30 April 2018  and a supplemental letter dated 10 October 2018 and as from time to time amended and/or supplemented) and made between (i) Borrower A, Gladiator Shipping Co. and Guardian Shipping Co. as joint and several borrowers, (ii) the Guarantor and (iii) the Original Lender.
" 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.
9

" 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 ),
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 and Ship B exceeds $500,000  or,  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;
10



(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.
" 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 31 August 2018 (as amended by Addendum no. 1 dated 28 September 2018 and further amended by Addendum no. 2 dated 31 October 2018) and made between (i) Borrower B as buyer and (ii) the relevant Seller for the purchase of Ship B.
" 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) Ship B, a first preferred Marshall Islands ship mortgage on that Ship, each in agreed form.
" Obligor " means a Borrower and the Guarantor.
11


“Operating Expenses” means, the aggregate of the expenses properly incurred by the owning companies of the Group Ships during any financial year of the Group , in connection with the operation, employment, maintenance, repair, insurance, drydock of the Group Ships and the management fees payable in respect of those ships.
" Overseas   Regulations " means the Overseas Companies Regulations 2009 (SI 2009/1801).
" Participating   Member   State " means any member state of the European Union that has the euro as its lawful currency in accordance with legislation of the European Union relating to Economic and Monetary Union.
" Party " means a party to this Agreement.
" Permitted   Charter " means, in relation to a Ship, a Charter:

(a)
which is a time, voyage or consecutive voyage charter;

(b)
the duration of which does not exceed and is not capable of exceeding, by virtue of any optional extensions, 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
12

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;

(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
13

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.
" 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.
14


" 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.
" 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),
but only to the extent that their respective application does not result in any violation of, conflict with or liability under any Anti-Boycott Legislation.
" 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:
15


(a)
any Shares Security;

(b)
any Mortgage;

(c)
any Deed of Covenant;

(d)
any General Assignment;

(e)
any Charterparty Assignment;

(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 ; and
(b) Ship B, Dr. Hagen FRHR. Von Diepenbroick, in his capacity as insolvency administrator over the assed of Kommanditgesellschaft MS "CPO OCEANIA" Offen Reederei UG (Haftungsbeschrӓnkt) & Co. organised and existing under the law of the Federal Republic of Germany.
" 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 or Ship B and, in the plural, mean both of them.
" 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 ).
16

" Ship   B " means m.v “CPO OCEANIA” (to be renamed "FELLOWSHIP"), details of which are set out opposite its name in Schedule 5 ( Details of the Ships ).
" 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 or Tranche B.
" Tranche   A " means that part of the Loan which was made available to the Borrowers on September 11, 2015 to finance part of the Purchase Price of Ship A, the outstanding amount of which as at the date of the Deed of Accession, Amendment and Restatement is $23,556,086 or, as the context may require, the outstanding amount thereunder at any relevant time.
17

" Tranche   B " means that part of the Loan which was made available to the Borrowers on [●] to finance part of the Purchase Price of Ship B, the outstanding amount of which as at the date of the Deed of Accession, Amendment and Restatement is $19,836,704 or, as the context may require, the outstanding amount thereunder at any relevant time.
" 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
18


(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 r egistered 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 supranational body, agency, department or regulatory, self-regulatory or other authority or organisation;
19


(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
" 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
20

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.
21

SECTION 2

THE FACILITY
2
THE FACILITY
2.1
The Facility
Subject to the terms of this Agreement, the Lender has made available to the Borrowers a dollar term loan facility in two 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.
22

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.
23

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 amount of the relevant Tranche.
(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
24

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.
25

SECTION 4

REPAYMENT, PREPAYMENT AND CANCELLATION
6
REPAYMENT
6.1
Repayment of Loan
Save as previously repaid or prepaid, 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 ($)
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
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
26


(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.
(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:
27



(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 x    1
 

Where:

A

B  
=

=  
the Index Amount of the Ship to be sold or which becomes a Total Loss; and

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 30 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 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
28

(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.
29

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
The Borrowers shall pay accrued interest on the Loan or any part of the Loan on the last day of each Interest Period (each an " Interest   Payment   Date ") .
8.3
Default interest
(a)
If 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.
30

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 ), the
31

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.
32

(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.
(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)
33

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
Front end fee
The Borrowers have paid to the Lender a non-refundable front end fee in the amount of $263,523.95 on 11 September 2015.
34

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:
35


(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.
36

(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.
12.8
FATCA Deduction
37

(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:

(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;
38


(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,
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.
39

(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 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
40

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
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
41

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:
(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
42

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.
43

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;
44

(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;
45

(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;
46

(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

47

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 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 shares of no par value, all of which shares have been issued in registered form and held by the Guarantor.
(c)
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.
(d)
None of the shares in any Borrower is subject to any option to purchase, pre-emption rights or similar rights.
19.4
Binding obligations
The obligations expressed to be assumed by it in each Transaction Document to which 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.
(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.
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(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.
19.10
Insolvency
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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 ):

(i)
have been prepared in accordance with Clause 20.4 ( Requirements as to financial statements ); and
50


(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 date of that valuation which, in either case, renders that information untrue or misleading in any material respect.
19.21
No breach of laws
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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.
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

52

(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 30 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 Greece 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 and Borrower B at c/o 154 Vouliagmenis Avenue, 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

(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
53

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)
each Borrower’s 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 (i) in the case of Borrower A, 31 December 2015 and (ii) in the case of Borrower B, 31 December 2018;
(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 or 31 December 2018, in the case of Borrower B):

(i)
each Borrower’s 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; and
(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.
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),
54

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 an officer of the relevant company as giving a true and fair view (if audited) or fairly representing (if unaudited) its financial condition and operations as at the date as at which those financial statements were drawn up.
(b)
The Borrowers shall procure that each set of financial statements delivered pursuant to Clause 20.2 ( Financial statements ) is prepared using GAAP.
(c)
The Borrowers shall procure that each set of financial statements of an Obligor delivered pursuant to Clause 20.2 ( Financial statements ) is prepared using GAAP, accounting practices and financial reference periods consistent with those applied in the preparation of the Original Financial Statements for that Obligor unless, in relation to any set of financial statements, it notifies the Lender that there has been a change in GAAP, the accounting practices or reference periods and its auditors (or, if appropriate, the auditors of the Obligor) deliver to the Lender:

(i)
a description of any change necessary for those financial statements to reflect the GAAP, accounting practices and reference periods upon which that Obligor's Original Financial Statements were prepared; and

(ii)
sufficient information, in form and substance as may be reasonably required by the Lender, 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;
(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;
55


(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 an officer 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;
(c)
a proposed assignment by the Lender of any of its rights under this Agreement; or
(d)
any internal requirement,
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:

(i)
at any time during the period commencing on 1 May 2018 and ending on 31 December 2018 (inclusive), 85 per cent.;

(ii)
at any time during the period commencing on 1 January 2019 and ending on 31 March 2019 (inclusive), 80 per cent.; and
56


(iii)
from 1 April 2019 and at all times thereafter and throughout the remainder of the Security Period, 75 per cent;
(b)
the ratio of EBITDA to Net Interest Expense shall not be less than:

(i)
at any time during the period commencing on 1 May 2018 and ending on 31 March 2019 (inclusive), 1.20:1; and

(ii)
from 1 April 2019 and at all times thereafter and throughout the remainder of the Security Period, 2:1; and
(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 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:

(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
57


(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 Net Debt " means the Group’s Total Debt less any drawn amounts of shareholders’ Notes and less any Cash, Restricted Cash and Cash Equivalents, in each case as shown in the latest Applicable Accounts;
“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 Debt " means as at the date of calculation, the current portion of long-term debt, net of deferred finance costs and the long-term debt, net of current portion and deferred finance costs of the Group as shown in the latest Applicable Accounts;
" Leverage Ratio " means at any time the ratio (expressed as a percentage) of (i) the Group’s Net Debt divided by (ii) the Consolidated Market Value Adjusted Total Assets less any Cash, Restricted Cash and Cash Equivalents.
"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 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;
" Restricted Cash " shall have the meaning given to such term in the latest Applicable Accounts; and
" Rolling Period " means, as of the last day of an Accounting Period, the immediately prior twelve-month period ending on such day.
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 (with the first testing date falling on 30 September 2018), 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
58

the first Utilisation Date (with the first testing date falling on 31 December 2018), in relation to the financial covenant of Clause 21.1 paragraph (c).
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
59

(b)
any facts or circumstances which are reasonably likely to result in any Environmental Claim being commenced or threatened against any member of the Group,
where the claim, if determined against that member of the Group, has or is reasonably likely to have a Material Adverse Effect.
22.6
Taxation
(a)
Each Obligor shall 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,
60

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).
(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
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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:

(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:
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(a)
be the creditor in respect of any loan or any form of credit to any person other than another Obligor and where such loan or form of credit is Permitted Financial Indebtedness;
(b)
give or allow to be outstanding any guarantee or indemnity to or for the benefit of any person in respect of any obligation of any other person or enter into any document under which that Borrower assumes any liability of any other person other than any guarantee or indemnity given under the Finance Documents.
(c)
enter into any material agreement 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,
63

assignment or other Security over all or any of the assets which are, or are intended to be, the subject of the Transaction Security) or for the exercise of any rights, powers and remedies of the Lender or any Receiver or Delegate provided by or pursuant to the Finance Documents or by law;

(ii)
to confer on the Lender Security over any property and assets of that Transaction Obligor located in any jurisdiction equivalent or similar to the Security intended to be conferred by or pursuant to the Finance Documents;

(iii)
to facilitate or expedite the realisation and/or sale of, the transfer of title to or the grant of, any interest in or right relating to the assets which are, or are intended to be, the subject of the Transaction Security or to exercise any power specified in any Finance Document in respect of which the Security has become enforceable; and/or

(iv)
to enable or assist the Lender to enter into any transaction to commence, defend or conduct any proceedings and/or to take any other action relating to any item of the Security Property.
(b)
Each Obligor shall, and shall procure that each other Transaction Obligor will, take all such action as is available to it (including making all filings and registrations) as may be necessary for the purpose of the creation, perfection, protection or maintenance of any Security conferred or intended to be conferred on the Lender by or pursuant to the Finance Documents.
(c)
At the same time as an Obligor delivers to the Lender any document executed by itself or another Transaction Obligor pursuant to this Clause 22.25 ( Further assurance ), that Obligor shall deliver, or shall procure that such other Transaction Obligor will deliver, to the Lender a certificate signed by an officer of that Obligor or Transaction Obligor which shall:

(i)
set out the text of a resolution of that Obligor's or Transaction Obligor's directors specifically authorising the execution of the document specified by the Lender; and

(ii)
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;
65

(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;
66


(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;

(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;
67


(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:
(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
68

(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.
24.3
Repair and classification
Each Borrower shall keep the Ship owned by it in a good and safe condition and state of repair:
69

(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:

(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
70


(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;
(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
71

(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
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;
72

(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:
(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;
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(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 Ship B (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 1 May 2018 and ending on 30 September 2018 (inclusive), that the Security Cover Ratio is below 100 per cent.;
(b)
at any time during the period commencing on 1 October 2018 and ending on 30 June 2019 (inclusive), that the Security Cover Ratio is below 111 per cent.; and
(c)
from 1 July 2019 and at all times thereafter and throughout the remainder of the Security Period, that the Security Cover Ratio is below 120 per cent.
For the purposes of par. (a), (b) and (c) 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 21.4 ( 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
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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;
(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
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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
(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
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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.
(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.
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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

(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.
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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 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
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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 28.2 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
81

(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 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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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).
(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.
85

(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.
34
CALCULATIONS AND CERTIFICATES
34.1
Accounts
86

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.
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 )
87

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;

(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:
88


(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 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
89

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 6YA, England (Attention of Mr. Edward Album, Tel: +44 208 455 7653, Fax: +44 208 457 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.
91

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
154 Vouliagmenis Avenue, 166 74 Glyfada, Athens Greece
       
Fellow Shipping Co.
Marshall Islands
97694
154 Vouliagmenis Avenue, 166 74 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
154 Vouliagmenis Avenue, 166 74 Glyfada, Athens Greece
       


92

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 an officer) confirming that borrowing or guaranteeing, as appropriate, the Commitment would not cause any borrowing, guaranteeing or similar limit binding on that Transaction Obligor to be exceeded.
1.8
A certificate of each Obligor that is incorporated outside the UK (signed by an officer) certifying either that (i) it has not delivered particulars of any UK Establishment to the Registrar of Companies as required under the Overseas Regulations or (ii) it has a UK Establishment and specifying the name and registered number under which it is registered with the Registrar of Companies.
1.9
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.
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.
94

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 the required amount in respect of a Tranche (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 30 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 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
95

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 AND TRANCHE B
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 Majuro, in the case of Ship B;
(c)
is in the absolute and unencumbered ownership of the relevant Borrower save as contemplated by the Finance Documents;
(d)
is classed with ABS, Lloyd’s Register 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.
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.
97

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 Ship B, the Republic of the Marshall Islands,
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.


98

SCHEDULE 3

REQUESTS
PART A

UTILISATION REQUEST
From:


To:
Premier Marine Co.
Fellow Shipping Co.

UniCredit Bank AG
Dated:  [ ●] 2015
Dear Sirs
Premier Marine Co. and Fellow Shipping Co. – Facility Agreement dated [ ● ] (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] on the following terms:

Proposed Utilisation Date:

Amount:

Interest Period for the first Advance:
[ ● ] (or, if that is not a Business Day, the next Business Day)

[ ● ] or, if less, the Available Facility

[ ●]
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


____________________
[ ● ]
authorised signatory for
PREMIER MARINE CO.


____________________
[ ● ]
authorised signatory for
FELLOW SHIPPING CO.
99

PART B

SELECTION NOTICE

From:


To:
Premier Marine Co.
Fellow Shipping Co.

UniCredit Bank AG
Dated: [ ●]
Dear Sirs
Premier Marine Co. and Fellow Shipping Co.  -  Facility Agreement dated 11 September 2015 as amended and restated on   November 2018 (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 [ ● ] .
3
This Selection Notice is irrevocable.
Yours faithfully


____________________
[ ● ]
authorised signatory for
PREMIER MARINE CO.


____________________
[ ● ]
authorised signatory for
FELLOW SHIPPING CO.
100

SCHEDULE 4

FORM OF COMPLIANCE CERTIFICATE



To:

From:
UniCredit Bank AG

Seanergy Maritime Holdings Corp.
Dated: [ ●]

Dear Sirs
Premier Marine Co. and Fellow Shipping Co.   – Facility Agreement dated 11 September 2015 as amended and restated on   November 2018 (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 [●] 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 [●]; 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 confirm that no Event of Default is continuing.]

Signed:         ________________________
 Chief Financial Officer
 Seanergy Maritime Holdings Corp.



101

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
 “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
“CPO OCEANIA”

(to be renamed “FELLOWSHIP”)
Borrower B
Capsize bulk carrier
 94250
 59547
Marshall Islands, port of Majuro
 Lloyds Register
+100 A5 Bulk Carrier BC(A) CSR DBC ERS ESP Grab (25 t) Holds (2,4,6,8) may be empty IW +MC AUT
Fidelity Marine or Seanergy Management
V. Ships and (as the case may be) Seanergy Shipmanagement






102

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
   
103

EXECUTION PAGES


BORROWERS

SIGNED by Stavros Gyftakis
)
 
duly authorised attorney-in-fact
)
 
for and on behalf of
)
/s/ Stavros Gyftakis
PREMIER MARINE CO.
)
 
in the presence of:
)
 

Witness' signature:

)
 
Witness' name:  Emmanouil Pontikis
)
/s/ Emmanouil Pontikis
Witness' address:
)
 





SIGNED by Stavros Gyftakis
)
 
duly authorised attorney-in-fact
)
 
for and on behalf of
)
/s/ Stavros Gyftakis
FELLOW SHIPPING CO.
)
 
in the presence of:
)
 

Witness' signature:

)
 
Witness' name: Emmanouil Pontikis
)
/s/ Emmanouil Pontikis
Witness' address:
)
 

104


GUARANTOR

SIGNED by Stavros Gyftakis
)
 
duly authorised attorney-in-fact
)
 
for and on behalf of
)
/s/ Stavros Gyftakis
SEANERGY MARITIME HOLDINGS
)
 
CORP.
)
 
in the presence of:
)
 

Witness' signature:

)
 
Witness' name:  Emmanouil Pontikis
)
/s/ Emmanouil Pontikis
Witness' address:
)
 





ORIGINAL LENDER

SIGNED by Kelina Kantzou
)
 
duly authorised attorney-in-fact
)
 
for and on behalf of
)
/s/ Kelina Kantzou
UNICREDIT BANK AG
)
 
in the presence of:
)
 

Witness' signature:

)
 
Witness' name: Emmanouil Pontikis
)
/s/ Emmanouil Pontikis
Witness' address:
)
 




105

Exhibit 4.58


Dated  13  June 2018
US$12,800,000
US$5,900,000 outstanding


SEANERGY MARITIME HOLDINGS CORP.
as Borrower
and
KNIGHT OCEAN NAVIGATION CO.
as Guarantor
and
JELCO DELTA HOLDING CORP.
as Lender



SUPPLEMENTAL AGREEMENT
relating to
a facility agreement dated 28 November 2016
relating to the part financing of the acquisition cost of m.vs.
“LORDSHIP” and “KNIGHTSHIP”








W A T S O N  F A R L E Y
&
W I L L I A M S
Index
Clause
Page
     
1
Definitions and Interpretation
1
2
Agreement of the Lender
2
3
Conditions Precedent
3
4
Representations
3
5
Amendments to Facility Agreement and other Finance Documents
3
6
Notices
5
7
Counterparts
5
8
Governing Law
5
9
Enforcement
5
     
Schedules
 
     
Schedule 1 Conditions Precedent
7
   
Execution
 
   
Execution Pages
8
THIS AGREEMENT is made on 13 June 2018
PARTIES
(1)
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 borrower (the “ Borrower ”);
(2)
KNIGHT OCEAN NAVIGATION CO. ,   a corporation incorporated and existing under the laws of the Republic of Liberia having its registered office at 80 Broad street, Monrovia, Liberia as guarantor (the “ Guarantor ”);
(3)
JELCO DELTA HOLDING 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 lender (the “ Lender ”).
BACKGROUND
(A)
By the Facility Agreement, the Lender agreed to make available to the Borrower a facility of (originally) up to US$12,800,000, of which US$5,900,000 is outstanding at the date of this Agreement.
(B)
The Borrower has requested that the Lender gives its consent to the release of m.v. “LORDSHIP” and Lord Ocean Navigation Co. as guarantor under the Facility Agreement, notwithstanding the provisions contained in clause 5 ( Prepayment ) of the Facility Agreement (the “ Request ”).
(C)
This Agreement sets out the terms and conditions (including, without limitation, (i) the execution of the Additional Guarantee (as defined hereinbelow) and (ii) the execution and registration of the Mortgage Addendum (as defined hereinbelow) (if requested by the Lender)) on which the Lender agrees, with effect on and from the Effective Date, to the Request and to the consequential amendments of the Facility Agreement and the other Finance Documents in connection with those matters.
OPERATIVE PROVISIONS
1
DEFINITIONS AND INTERPRETATION
1.1
Definitions
In this Agreement:
“ Additional Guarantee ” means an irrevocable and unconditional guarantee of the obligations of the Borrower to be executed by the Additional Guarantor in favour of the Lender in the Agreed Form.
“ Additional Guarantor ” means Emperor Holding Ltd., 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.
“ Deed of Partial Release ” means the deed of partial release and reassignment of security in respect of Lord Ocean Navigation Co. as guarantor under the Facility Agreement, to be executed by (inter alios) (i) the Borrower, (ii) the Guarantor and (iii) the Lender.

“ Effective Date ” means the date on which the conditions precedent in Clause 3 ( Conditions Precedent ) are satisfied.
“ Facility Agreement ” means the facility agreement dated 28 November 2016 (as from time to time amended and/or supplemented) and made between (i) the Borrower as borrower and ((ii) the Lender as lender in respect of a facility of (originally) up to US$12,800,000.
“ Mortgage ” means the second preferred Liberian mortgage over m.v. “KNIGHTSHIP” registered in the ownership of the Guarantor under Liberian flag and having official no. 17746 dated 13 December 2016 duly recorded in the Office of the Deputy Commissioner of Maritime Affairs of the Republic of Liberia on 13 December 2016 at 4:48 AM, E.S.T. in New York, U.S.A. in Book PM 68 at Page 1195.
“ Mortgage Addendum ” means the addendum to the Mortgage in the Agreed Form.
“ Obligor ” means each of the Borrower and the Guarantor.
“ Party ” means a party to this Agreement.
1.2
Defined expressions
Defined expressions in the Facility Agreement shall have the same meanings when used in this Agreement unless the context otherwise requires or unless otherwise defined in this Agreement.
1.3
Application of construction and interpretation provisions of Facility Agreement
Clause 1.2 ( construction of certain terms ) of the Facility Agreement applies to this Agreement as if it were expressly incorporated in it with any necessary modifications.
1.4
Designation as a Finance Document
The Borrower and the Lender designate this Agreement as a Finance Document.
1.5
Third party rights
Unless provided to the contrary in a Finance Document, a person who is not a Party has no right under the Third Parties Act to enforce or to enjoy the benefit of any term of this Agreement.
2
AGREEMENT OF THE LENDER
2.1
Agreement of the Lender
The Lender agrees, subject to and upon the terms and conditions of this Agreement (including, without limitation, the execution of the Additional Guarantee and, if requested by the Lender, the execution and registration of the Mortgage Addendum), to:
(a)
the Request; and
(b)
the consequential amendments to the Facility Agreement and the other Finance Documents.
2

2.2
Effective Date
The agreement of the Lender contained in Clause 2.1 ( Agreement of the Lender ) shall have effect on and from the Effective Date.
3
CONDITIONS PRECEDENT
The agreement of the Lender contained in Clause 2.1 ( Agreement of the Lender ) is subject to:
(a)
no Event of Default continuing on the date of this Agreement and the Effective Date or resulting from the occurrence of the Effective Date;
(b)
the Repeating Representations to be made by each Obligor being true on the date of this Agreement and the Effective Date;
(c)
the Lender having received all of the documents and other evidence listed in Schedule 1 ( Conditions Precedent ) in form and substance satisfactory to the Lender on or before the Effective Date.
4
REPRESENTATIONS
4.1
Facility Agreement representations
Each Obligor that is a party to the Facility Agreement makes the representations and warranties set out in clause 6 ( Representations and warranties ) of the Facility Agreement, as amended and supplemented by this Agreement and updated with appropriate modifications to refer to this Agreement and, if and where appropriate, the Mortgage Addendum, by reference to the circumstances then existing on the date of this Agreement and on the Effective Date.
4.2
Finance Document representations
Each Obligor makes the representations and warranties set out in the Finance Documents (other than the Facility Agreement) to which it is a party, as amended and supplemented by this Agreement and updated with appropriate modifications to refer to this Agreement and, if and where appropriate, the Mortgage Addendum, by reference to the circumstances then existing on the date of this Agreement and on the Effective Date.
5
AMENDMENTS TO FACILITY AGREEMENT AND OTHER FINANCE DOCUMENTS
5.1
Specific amendments to the Facility Agreement
With effect on and from the Effective Date the Facility Agreement shall be, and shall be deemed by this Agreement to have been, amended as follows:
(a)
by adding the following new definitions in clause 1.1 thereof in the requisite alphabetical order:
““ Additional Guarantee ” means an irrevocable and unconditional guarantee of the obligations of the Borrower to be executed by the Additional Guarantor in favour of the Lender in the Agreed Form;
3

“ Additional Guarantor ” means Emperor Holding Ltd., 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;”;
(b)
by adding a new sub-paragraph (h) in the definition of “Finance Documents” in clause 1.1 thereof as follows:
“(h) the Additional Guarantee; and”,
and redesignating the existing sub-paragraph (h) as a new sub-paragraph (i);
(c)
by deleting paragraph (a) of clause 5.3 thereof in its entirety and replacing it with the following new paragraph:
“(a)   the whole of the Loan:

(i)
if the Ship is sold on or before the date on which the sale is completed by delivery of the Ship to the buyer;

(ii)
if the 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 Lender of the proceeds of insurance relating to such Total Loss;”;
(d)
references to the “Borrower” or an “Owner” in clause 10 ( events of default ) thereof shall be construed as if the same also referred to the Additional Guarantor;
(e)
references to the “Owners” throughout the Facility Agreement shall be construed as if the same referred to the Guarantor only;
(f)
references to the “Ships” throughout the Facility Agreement shall be construed as if the same referred to m.v. “KNIGHTSHIP” only;
(g)
the definition of, and references throughout to, each Finance Document shall be construed as if the same referred to that Finance Document as amended and supplemented by this Agreement; and
(h)
by construing references throughout to “this Agreement” and other like expressions as if the same referred to the Facility Agreement as amended and supplemented by this Agreement.
5.2
Amendments to Finance Documents
With effect on and from the Effective Date each of the Finance Documents other than the Facility Agreement and the Mortgage if amended and supplemented by the Mortgage Addendum, shall be, and shall be deemed by this Agreement to have been, amended as follows:
(a)
the definition of, and references throughout each of the Finance Documents to, the Facility Agreement and any of the other Finance Documents shall be construed as if the same referred to the Facility Agreement and those Finance Documents as amended and supplemented by this Agreement;
4

(b)
the definition of, and references throughout each of the Finance Documents to, the Mortgage shall be construed as if the same referred to the Mortgage as amended and supplemented by the Mortgage Addendum (if and when executed and registered); and
(c)
by construing references throughout each of the Finance Documents to “this Agreement”, “this Deed” and other like expressions as if the same referred to such Finance Documents as amended and supplemented by this Agreement.
5.3
Finance Documents to remain in full force and effect
The Finance Documents shall remain in full force and effect as amended and supplemented by:
(a)
the amendments to the Finance Documents contained or referred to in Clause 5.1 ( Specific amendments to the Facility Agreement ) and Clause 5.2 ( Amendments to Finance Documents ) and the Mortgage Addendum (if and when executed and registered); and
(b)
such further or consequential modifications as may be necessary to give full effect to the terms of this Agreement.
6
NOTICES
Clause 13 ( notices ) of the Facility Agreement, as amended and supplemented by this Agreement, applies to this Agreement as if it were expressly incorporated in it with any necessary modifications.
7
COUNTERPARTS
This Agreement may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of this Agreement.
8
GOVERNING LAW
This Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.
9
ENFORCEMENT
9.1
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 9.1 ( 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.
5

9.2
Service of process
(a)
Without prejudice to any other mode of service allowed under any relevant law, each Obligor:

(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 the other 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.
6

SCHEDULE 1


CONDITIONS PRECEDENT
1
Obligors
Documents of the kind specified in Schedule 2 Part A paragraphs 2, 3 and 4 of the Facility Agreement.
2
Security
2.1
If requested by the Lender, a duly executed original of the Mortgage Addendum together with documentary evidence that the Mortgage Addendum has been duly registered as a valid addendum to the Mortgage in accordance with the laws of the jurisdiction of the Approved Flag.
2.2
A duly executed original of this Agreement.
2.3
A duly executed original of the Deed of Partial Release.
3
Other documents and evidence
3.1
A copy of any other Authorisation or other document, opinion or assurance which the Lender considers to be necessary or desirable (if it has notified the Borrower accordingly) in connection with the entry into and performance of the transactions contemplated by this Agreement and the Mortgage Addendum (if and when executed and registered) or for the validity and enforceability of any Finance Document as amended and supplemented by this Agreement or by the Mortgage Addendum (if and when executed and registered).
3.2
Evidence that the agent referred to in Clause 9.2 has accepted its appointment as agent for the service of process under this Agreement.
7

EXECUTION PAGE
BORROWER
   
     
SIGNED by Stamatios Tsantanis
)
/s/ Stamatios Tsantanis
duly authorised attorney-in-fact
)
 
for and on behalf of
)
 
SEANERGY MARITIME HOLDINGS CORP.
)
 
     
in the presence of:
)
 
Witness’ signature:
)
 
Witness’ name:     Theodora Mitropetrou
)
/s/ Theodora Mitropetrou
Witness’ address:
)
 
     
     
GUARANTOR
   
     
SIGNED by Stamatios Tsantanis
)
/s/ Stamatios Tsantanis
duly authorised attorney-in-fact
)
 
for and on behalf of
)
 
KNIGHT OCEAN NAVIGATION CO.
)
 
in the presence of:
)
 
Witness’ signature:
)
 
Witness’ name:   Theodora Mitropetrou
)
/s/ Theodora Mitropetrou
Witness’ address:
)
 
     
     
LENDER
   
     
SIGNED by Athina Pteroudi
)
/s/ Athina Pteroudi
and
)
 
duly authorised attorneys-in-fact
)
 
for and on behalf of
)
 
JELCO DELTA HOLDING CORP.
)
 
in the presence of:
)
 
Witness’ signature:
)
 
Witness’ name:     Maria Moschopoulou
)
/s/ Maria Moschopoulou
Witness’ address:
)
 


8


Exhibit 4.59

Dated 28 November 2016
as amended and restated on 13 February 2019
JELCO DELTA HOLDING CORP.
as Lender
and
SEANERGY MARITIME HOLDINGS CORP.
as Borrower














AMENDED AND RESTATED LOAN AGREEMENT
in respect of
a loan agreement dated 4 October 2016
as amended by amendment no.1 dated as of 17 November 2016 and as amended and restated on 28 November 2016 and supplemented on 13 June 2018
relating to
a facility originally of US$12,800,000


Index
Clause
 
Page
     
1
Purpose, Definitions and Interpretation
1
2
The Loan
9
3
Interest
10
4
Repayment
10
5
Prepayment
11
6
Representations and Warranties
11
7
Covenants and Undertakings of the Borrower
12
8
Insurance
12
9
Ship Covenants
16
10
Events of Default
20
11
Fees
21
12
Application of Receipts
22
13
Notices
22
14
Amendments and Waivers
23
15
Process Agent
23
16
Governing Law and Jurisdiction
23
17
Miscellaneous
23
Schedules

Schedule 1 Form of Drawdown Notice
25
Schedule 2 Condition Precedent Documents
26
  Part A
26
  Part B
27







THIS LOAN AGREEMENT (the “Loan Agreement’) is originally made on 4 October 2016, amended and restated on 28 November 2016 as further amended and restated by an amending and restating agreement dated 13 February 2019.
PARTIES
(1)
JELCO DELTA HOLDING CORP. , a corporation organised 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 (the " Lender ")
(2)
SEANERGY MARITIME HOLDINGS CORP. , a corporation organised 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 (the " Company ")
BACKGROUND
(A)
The Company entered into a facility agreement originally on 4 October 2016, amended and restated on 28 November 2016, and amended and supplemented by a supplemental agreement dated 13 June 2018 with the Lender in respect of a loan facility of originally up to US$12,800,000 (the “ Facility Agreement ”).
(B)
Security interests previously created in favour of the Lender over each of m.v. “LORDSHIP” and m.v. “KNIGHTSHIP” by Lord Ocean Navigation Co. and Knight Ocean Navigation Co., respectively, as guarantors of the obligations of the Company under the Facility Agreement have been fully released with the Lender’s consent.
(C)
Emperor Holding Ltd. of the Marshall Islands (the " Additional Guarantor ") has provided further security to the Lender under the Facility Agreement in the form of a guarantee (the “ Additional Guarantee ”) dated 13 June 2018.
(D)
The Company is the registered, legal and beneficial owner of the Additional Guarantor.
(E)
The Company borrowed an aggregate principal amount of US$12,800,000 from the Lender of which US$5,900,000 is outstanding on the date of this Agreement.
(F)
The Borrower has requested and the Lender agree to extend the Final Repayment Date to 30 June 2020, subject to the terms and conditions set out in this Loan Agreement, including that the Borrower procure the provision of a second priority mortgage and general assignment over m.v. “Partnership” in favour of the Lender.
OPERATIVE PROVISIONS
In consideration of the mutual covenants herein contained, and for such other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto hereby agree as follows:
1
PURPOSE, DEFINITIONS AND INTERPRETATION
1.1
Purpose
This Loan Agreement sets out the terms and conditions upon and subject to which it is agreed that the Lender will continue to make available to the Borrower a loan originally of up to United States Dollars twelve million eight hundred thousand (US$12,800,000) and currently outstanding in the amount of United States Dollars five million nine hundred thousand (US$5,900,000) for working capital purposes.

1.2
Definitions
In this Loan Agreement, unless the context otherwise requires each term or expression defined in the recital of the parties and this clause shall have the meaning given to it in the recital of the parties and in this clause and:
“ Additional Guarantee ” means an irrevocable and unconditional guarantee of the obligations of the Borrower to be executed by the Additional Guarantor in favour of the Lender in the Agreed Form;
“ Additional Guarantor ” means Emperor Holding Ltd., 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;”
“Advance” means each of Advance A and Advance B and, in the plural means both of them;
“Advance A” means the amount of US$4,150,000 drawn down in two sub-advances on 5 and on 6 October 2016 to pay the principal amount outstanding of Advance A at any relevant time;
“Advance B” means an amount of up to US$8,650,000 to finance the principal amount outstanding of Advance B at any relevant time;
“Agreed Form” means, in relation to any document, that document in the form approved in writing by the Lender or as otherwise approved in accordance with any other approval procedure specified in any relevant provisions of any Finance Document;
"Amending and Restating" means the second amending and restating agreement dated 13 February 2019 and made between the Borrower and the Lender;
“Applicable Margin” means 8.5 per cent. per annum;
" Approved Charter " means each of:
(a)  the time charter for the Ship dated 26 May 2017 (as amended and/or supplemented by a first addendum dated 23 May 2018, as further amended and extended by a second addendum dated 28 November 2018 and as may be further amended and/or extended from time to time) made between the Borrower as owner and the Approved Charterer as charterer; and
(b)  the time charter for the Ship dated 14 September 2018 (as may be amended and/or supplemented from time to time) made between the Borrower as owner and the Approved Charterer as charterer,
and, in the plural, means both of them.
" Approved Charterer " means Uniper Global Commodities SE, a company incorporated in Germany whose principal office is at Holzstrasse 6, Dusseldorf, Germany.
“Approved Flag” means, in relation to the Ship, the flag of the Republic of Liberia or Luxemburg or such other flag as the Lender may approve as the flag on which the Ship is or, as the case may be, shall be registered;
“Approved Flag State” means, in relation to the Ship, the Republic of Liberia or Luxemburg or any other country in which the Lender may approve the Ship is or, as the case may be, shall be registered;
“Approved Manager” means, in respect of the Ship, V. Ships as the technical manager of the Ship and Fidelity Marine as the commercial manager of the Ship, or any other company nominated by the Owners which the Lender may approve from time to time (such approval not to be unreasonably withheld) as the commercial and/or technical manager of the Ship and, in the plural, means both of them;
2

“Approved Manager’s Undertaking” means, in relation to the 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 Lender in the Agreed Form agreeing certain matters in relation to that Approved Manager, serving as manager of the Ship and subordinating its rights against the Ship and the Owner to the rights of the Lender under the Finance Documents and, in the plural, means all of them;
“Availability Period” means, in respect of each Advance, the period commencing on the date of this Loan Agreement and ending on the earlier of:

(a)
20 December 2016 (or such later date as the Lender may agree with the Borrower); and

(b)
the date on which that Advance is fully borrowed, cancelled or terminated;
" Banking Day " means any day on which banks and foreign exchange markets in New York, London and Athens and in each country or place in or at which any act is required to be done under this Loan Agreement, are open for the transaction of business of the nature contemplated in this Loan Agreement;
" Borrower " means the Company as specified at the beginning of this Loan Agreement;
“ Closing Date ” means the date of Utilisation of Tranche A under the Senior Agreement;
" Dollar " and " US$ " mean the lawful currency of the United States of America;
" Drawdown Date " means, in respect of an Advance, the Banking Day, not earlier than the date of this Loan Agreement upon which the Borrower has requested that an Advance be made available or (as the context requires) the date on which that Advance is actually made by the Lender to the Borrower hereunder;
“Earnings” means, in relation to a Ship, all moneys whatsoever which are now, or later become, payable (actually or contingently) to the Owner of the Ship or the Lender and which arise out of the use or operation of the 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 the Owner 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; and

(vi)
all moneys which are at any time payable under any Insurances in respect of loss of hire; and

(b)
if and whenever the 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 the Ship;
“Environmental Claim” means:
3


(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 the Ship:

(a)
any release of Environmentally Sensitive Material from the Ship; or

(b)
any incident in which Environmentally Sensitive Material is released 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 liable to be arrested, attached, detained or injuncted and/or the Ship and/or the Owner of the Ship and/or any operator or manager of the Ship is at fault or otherwise liable to any legal or administrative action; or

(c)
any other incident in which Environmentally Sensitive Material is released otherwise than from the Ship and in connection with which the Ship is actually liable to be arrested and/or where the Owner of the Ship and/or any operator or manager of the Ship is at fault 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 10;
“Fidelity Marine” means Fidelity Marine Inc., a corporation incorporated 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:

(a)
30 June 2020; or

(b)
if earlier, the date on which the Lender terminates or cancels this Loan Agreement in accordance with the provisions hereof;
“Finance Documents” means together:

(a)
this Loan Agreement;

(b)
the Guarantee;

(c)
the Amending and Restating Agreement;

(d)
the Intercreditor Deed;
4


(e)
the General Assignment;

(f)
the Mortgage;

(g)
the Approved Manager’s Undertaking;

(h)
the Additional Guarantee; and

(i)
any other document (whether creating a Security Interest or not) which is executed at any time by the Borrower or the Owner (except from an Approved Manager outside of the Lender’s group) 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 Lender under this Loan Agreement or any of the other documents referred to in this definition and, in the singular, means any of them;
“General Assignment” means, in relation to a Ship, a second priority general assignment of (inter alia) the Earnings, the Insurances and any Requisition Compensation relative to the Ship executed or, as the context may require, to be executed by the Owner of the Ship in favour of the Lender in the Agreed Form and, in the plural, means both of them;
"Guarantee" means, in relation to the Owner, an irrevocable and unconditional guarantee of the obligations of the Borrower executed or to be executed by the Owner in favour of the Lender;
“IACS” means the International Association of Classification Societies;
" Insurances " means, in relation to the Ship:

(a)
all policies and contracts of insurance and any reinsurance, policies or contracts, including entries of the Ship in any protection and indemnity or war risks association, effected in respect of the Ship, its Earnings or otherwise in relation to it whether before, on or after the date of this Loan Agreement; and

(b)
all rights (including, without limitation, any and all rights or claims which the Owner of the 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 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 Loan Agreement;
" Intercreditor Deed " means an agreement made or to be made between (i) the Owner, (ii) the Lender and (iii) the Senior Mortgagee pursuant to which the Lender and the Senior Mortgagee will regulate their rights under the Senior Agreement and this Loan Agreement;
" Interest Payment Date " means each date for the payment of interest in accordance with Clause 3 ;
" Interest Period " means each period for the payment of interest pursuant to Clause 3 ;
" Interest Rate " means the rate of interest payable in respect of the Loan ascertained in accordance with the provisions of Clause 3 ;
“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);
5

“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;
“Loan” means the principal amount from time to time outstanding under this Loan Agreement;
“Major Casualty” means, in relation to the Ship, any casualty to the 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;
 “Mortgage”   means, in relation to the Ship, the second preferred or, as the case may be, priority ship mortgage on the 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 require to be executed by the Owner which is to be the owner thereof in favour of the Lender in the Agreed Form and, in the plural, means both of them;
“Owner” means PARTNER SHIPPING CO. LIMITED , a company incorporated in the Republic of Malta whose registered address is at 147/1 St. Lucia Street, Valletta, VLT 1185, Malta;
" Permitted Charter " means:

(a)
the Approved Charter;

(b)
any Charter:

(i)
which is a time, voyage or consecutive voyage charter;

(ii)
the duration of which does not exceed 13 months plus a redelivery allowance of not more than 30 days;

(iii)
which is entered into on bona fide arm's length terms at the time at which the Ship is fixed;
and

(iv)
in relation to which not more than two months' hire is payable in advance,
and any other Charter which is approved in writing by the Lender;
" Permitted Security Interests " means:

(a)
Security Interests created by the Finance Documents;

(b)
Security Interests created by or pursuant to the Senior Finance Documents or contemplated by the Intercreditor Deed;

(c)
a Permitted Charter;

(d)
liens for unpaid master’s and crew's wages in accordance with usual maritime practice;

(e)
liens for salvage;

(f)
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 Loan Agreement;

(g)
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
6

maintenance of the Ship, provided such liens do not secure amounts more than 30 days overdue (unless the overdue amount is being contested by the Owner in good faith by appropriate steps) and subject, in the case of liens for repair or maintenance, to Clause 9.13(g);

(h)
any Security Interest created in favour of a plaintiff or defendant in any proceedings or arbitration as security for costs and expenses where the Owner is actively prosecuting or defending such proceedings or arbitration in good faith; and

(i)
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;
“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 ”;
“Secured Liabilities”   means all liabilities which the Borrower, the Owner or any of them have, at the date of this Loan 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 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 Period " means the period commencing on the date of this Loan Agreement and ending on the date on which the Lender notifies the Borrower that:

(a)
all amounts which have become due for payment by the Borrower under this Loan Agreement have been paid; and

(b)
no amount is owing or has accrued (without yet having become due for payment) under this Loan Agreement;
" Senior Agreement " means the agreement dated 13 February 2019 and made between (i) the Owner as borrower, (ii) the entities listed in Part B and C thereto as lenders, and (iii) Amsterdam Trade Bank N.V. as agent in respect of a loan of up to $20,890,000 to refinance existing indebtedness over the Ship and for general working capital purposes of the Borrower and its subsidiaries;
" Senior Finance Documents " means:

(a)
the first preferred Luxemburg mortgage on the Ship owned by the Owner executed or to be executed by the Owner in favour of the Senior Mortgagee; and
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(b)
the first priority general assignment of the Earnings, Insurances and any Requisition Compensation in respect of the Ship owned by the Owner executed or to be executed by such Owner in favour of the Senior Mortgagee;
“ Senior Mortgagee ” means Amsterdam Trade Bank N.V., of The Netherlands, acting through its office at World Trade Center, Tower I Level 6 Strawinskylaan 1939 1077 XX, The Netherlands;
" Ship " means the Capesize dry bulk carrier type vessel of a maximum of 179,213 DWT named "PARTNERSHIP", having IMO Number 9597848 built by Hyundai Samho HI in 2012 and registered in the name of the Borrower under an Approved Flag;
" SMC " means a safety management certificate issued in respect of the Ship in accordance with Rule 13 of the ISM Code;
“Total Loss” means, in relation to the Ship:

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

(b)
any expropriation, confiscation, requisition or acquisition of the 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 (excluding a requisition for hire for a fixed period not exceeding 1 year without any right to an extension) unless it is within 2 months from the date of such occurrence redelivered to the full control of the Owner of the Ship;

(c)
any condemnation of the 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 the Ship (including any hijacking or theft) unless it is within 2 months redelivered to the full control of the Owner of the Ship;
“Total Loss Date” means, in relation to a 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 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 Owner of the Ship 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, on the date (or the most likely date) on which it reasonably appears to the Lender that the event constituting the total loss occurred; and
“ V. Ships ” means V. Ships Limited, a corporation incorporated and existing under the laws of Cyprus whose registered office is at Zenas Gunther, 16-18, Agia Triada, 3035 Limassol, Cyprus.
1.3
Construction of certain terms
In this Loan Agreement:
" approved "  means, for the purposes of Clause 8, approved in writing by the Lender at its discretion;
8

" asset "  includes every kind of property, asset, interest or right, including any present, future or contingent right to any revenues or other payment;
" consent "  includes an authorisation, consent, approval, resolution, licence, exemption, filing, registration, notarisation and legalisation;
" 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;
" 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;
" obligatory insurances "  means, in relation to a Ship, all insurances effected, or which the Owner of that Ship is obliged to effect, under Clause 8 or any other provision of this Loan Agreement or another Finance Document;
" 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;
"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 payable to any other person or persons in case of collision which are not recoverable under the hull and machinery policies;
" 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).
2
THE LOAN
2.1
Commitment to Lend
Subject to (i) the terms of this Loan Agreement and (ii) receipt by the Lender of the documents and/or evidence specified in paragraph 2.2(a) below, it is hereby agreed and undertaken by the Lender to continue to lend to the Borrower a sum of United States Dollars Five million nine hundred thousand (US$5,900,000).
2.2
Conditions Precedent to Lend
The documents and/or evidence referred to in Clause 2.1 above to be received by the Lender are the following:
9

(a)
the documents described in Part A of Schedule 2 on or prior to the date of the Amending and Restating Agreement;
(b)
a Drawdown Notice in the form set out in Schedule 1 hereto not later than 11.00 a.m. (London time) two (2) business days prior to the relevant Drawdown Date, except as   the Lender may otherwise permit in writing.
3
INTEREST
3.1
Interest Periods
The period during which the Loan shall be outstanding under this Loan Agreement shall be divided into consecutive Interest Periods of three months' duration.
3.2
Beginning and end of Interest Periods
The first Interest Period applicable to an Advance shall start on the Drawdown Date relative to that Advance and end on the date which numerically corresponds to the Drawdown Date and each subsequent Interest Period shall commence on the expiry of the preceding Interest Period except that, if there is no numerically corresponding date in that calendar month, the Interest Period shall end on the last Banking Day in that month.  The first Interest Period applicable to the second Advance shall be a period ending on the last day of the Interest Period applicable to the first Advance then current, whereupon both Advances shall be consolidated and treated as a single advance.
3.3
Non-Banking Days
If an Interest Period would otherwise end on a day which is not a Banking Day, that Interest Period will instead end on the next Banking Day in that calendar month (if there is one) or the preceding Banking Day (if there is not).
3.4
Interest rate
During each Interest Period interest shall accrue on the Loan at the rate equal to the sum of (a) the Applicable Margin and (b) the three (3) month London Interbank Offered Rate for deposits in Dollars determined at or about 11.00 a.m. (London time) two (2) Banking days prior to the first day of each Interest Period (“ LIBOR ”).
3.5
Accrual and payment of interest
Interest shall accrue from day to day, shall be calculated on the basis of a 360 day year and the actual number of days elapsed and shall be paid by the Borrower to the Lender on the last day of each Interest Period  Provided that if no Event of Default has occurred which is continuing, the Borrower shall have the option to defer one interest payment during the Security Period which once deferred shall accrue interest at the Interest Rate and become due and payable on the Final Repayment Date.
3.6
Default interest
In the event of a failure by the Borrower to pay any amount on the date on which such amount is due  and payable pursuant to this Loan Agreement and irrespective of any notice by the Lender or any other person to the Borrower In respect of such failure, the Borrower shall pay interest on such amount on demand from the date of such default up to the date of actual payment at the per annum rate which is the aggregate of: (a) two point fifty per cent (2.50%); and (b) the Interest Rate.
4
REPAYMENT
The Borrower shall repay the Loan in one bullet payment together with accrued interest thereon on the Final Repayment Date. The Borrower shall effect repayment forthwith but in any case no later than two (2) Banking Days from the Final Repayment Date.
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5
PREPAYMENT
5.1
Voluntary prepayment
The Loan together with accrued interest thereon may be prepaid in whole or in part provided that the Lender has received from the Borrower (i) at least 2 Banking Days' prior written notice and (ii) the prepayment fee referred to in Clause 11.1.
5.2
Final Repayment Date
On the Final Repayment Date, the Borrowers shall additionally pay to the Lender all other sums then accrued or owing under any Finance Document.
5.3 Mandatory prepayment
The Borrower shall be obliged to prepay:
(a)
the whole of the Loan:

(i)
if the Ship is sold on or before the date on which the sale is completed by delivery of the Ship to the buyer;

(ii)
if the 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 Lender of the proceeds of insurance relating to such Total Loss;
(b)
an amount equal to 25 per cent. of the net proceeds of any public offering of securities concluded by the Borrower, payable on the Lender's demand.
5.4 Amounts payable on prepayment
A prepayment shall be made together with (i) accrued interest and (ii) in the case of a voluntary prepayment, the prepayment fee referred to in Clause 11.1 but without any penalty.
5.5
No reborrowing
No amount prepaid or repaid may be reborrowed.
6
REPRESENTATIONS AND WARRANTIES
The Borrower hereby represents and warrants (and each representation and warranty is deemed repeated at each Drawdown Date) that:
6.1
Organisation
The Borrower is a corporation duly organised, validly existing and in good standing under the laws of the Marshall Islands and is duly qualified to do business and is in good standing in such jurisdictions where   such qualification is necessary.
6.2
Enforceability
This Loan Agreement has been duly executed and delivered by the Borrower and constitutes the legal, valid and binding obligation of the Borrower enforceable in accordance with its terms, except as limited by bankruptcy, insolvency or other similar laws of general application affecting the enforcement of creditors' rights or by general principles of equity limiting the availability of equitable remedies.
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6.3
No Conflict
Neither the execution or delivery of this Loan Agreement by the Borrower, the consummation by the Borrower of the Loan ( or any part thereof), nor compliance by the Borrower with the terms and provisions hereof will (i) violate any law, constitution, statute, treaty, regulation, rule, ordinance, order, injunction, writ, decree or award of any court or governmental authority to which the Borrower is subject, (ii) conflict with or result in a breach or default under the Borrower's organisational documents, (iii) conflict with or result in a breach or default which is material in the context of this Loan Agreement under any agreement or instrument to which the Borrower is a party or by which it or any of its properties, whether now owned or hereafter acquired, is subject or bound, or (iv) result in the creation or imposition of any lien, charge, or encumbrance of any nature upon any property or assets, whether now owned or hereafter acquired, of the Borrower.
7
COVENANTS AND UNDERTAKINGS OF THE BORROWER
The Borrower undertakes with the Lender that, from the date of this Loan Agreement and so long as any moneys are owing under this Loan Agreement, to comply with the following provisions, except as   the Lender may otherwise permit in writing:
7.1
The Borrower undertakes that it shall procure that no substantial change is made to the corporate structure of the Owner from that carried on at the date of this Loan Agreement.
7.2
The Borrower undertakes that it shall procure that no substantial change is made to the general nature of the business of the Owner from that carried on at the date of this Loan Agreement.
7.3
The Borrower undertakes that it shall not transfer, lease or otherwise dispose of and shall procure that the Owner shall transfer, lease or otherwise dispose of all or a substantial part of its assets  whether by one transaction or a number of transactions, whether related or not.
7.4
The Borrower undertakes that it shall procure that the Owner executes and, where applicable, registers in accordance with the laws of the Marshall Islands, the Mortgage, the Guarantee and the General Assignment.
8
INSURANCE
8.1
General
The Borrower also undertakes with the Lender to comply with the following provisions of this Clause 8 at all times during the Security Period except as the Lender may otherwise permit.
8.2
Maintenance of obligatory insurances
The Borrower shall procure that the Owner shall keep the Ship insured at the expense of the Owner 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, in the opinion of the Lender, be reasonable for the Owner to insure and which are specified by the Lender by notice to the Owner.
8.3
Terms of obligatory insurances
The Borrower shall procure that the Owner shall effect such insurances:
12

(a)
in Dollars;
(b)
in the case of fire and usual marine risks and war risks, on an agreed value basis in an amount at least the greater of (i) an amount which equals 120 per cent. of the Loan and (ii) the Market Value of the Ship; and
(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 relation to protection and indemnity risks in respect of the full value and 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.
8.4
Further protections for the Lender
In addition to the terms set out in Clause 8.3, the Borrower shall, and shall procure that, the obligatory insurances effected by the Owner shall:
(a)
subject always to paragraph (b), name the Owner as the sole named assured unless the interest of every other named assured is limited:

(i)
in respect of any obligatory insurances for hull and machinery and war risks;

(A)
to any provable out-of-pocket expenses that 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 assured has undertaken in writing to the Lender (in such form as it requires) that any deductible shall be apportioned between the Owner and every other named assured 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 assured for its rights and interests, warranted no operational interest and with full waiver of rights of subrogation against the Lender but without the Lender thereby 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 sole 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 such obligatory insurances shall be primary without right of contribution from other insurances effected by the Lender; and
(f)
provide that the Lender may make proof of loss if the Owner fails to do so.
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8.5
Renewal of obligatory insurances
The Borrower shall procure that the Owner shall:
(a)
at least 15 days before the expiry of any obligatory insurance effected by it:

(i)
notify the Lender of the brokers (or other insurers) and any protection and indemnity or war risks association through or with whom the Owner 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 paragraph (i);
(b)
at least 10 days before the expiry of any obligatory insurance, renew that obligatory insurance in accordance with the Lender’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 Lender in writing of the terms and conditions of the renewal.
8.6
Copies of policies; letters of undertaking
The Borrower shall procure that the Owner shall ensure that all approved brokers provide the Lender 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 Lender 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 8.4;
(b)
they will hold such policies, and the benefit of such insurances, to the order of the Lender in accordance with the said loss payable clause;
(c)
they will advise the Lender immediately of any material change to the terms of the obligatory insurances;
(d)
they will notify the Lender, not less than 10 days before the expiry of the obligatory insurances, in the event of their not having received notice of renewal instructions from the Owner or its agents and, in the event of their receiving instructions to renew, they will promptly notify the Lender 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 the Owner 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 Lender.
8.7
Copies of certificates of entry; letters of undertaking
The Borrower shall procure that the Owner shall ensure that any protection and indemnity and/or war risks associations in which the Ship is entered provides 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;
14

(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 the Owner in relation to the Ship 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 in relation to that Ship.
8.8
Deposit of original policies
The Borrower shall procure that the Owner shall ensure that all policies relating to obligatory insurances are deposited with the approved brokers through which the insurances are effected or renewed.
8.9
Payment of premiums
The Borrower shall procure that the Owner 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.
8.10
Guarantee
The Borrower shall procure that the Owner 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.
8.11
Compliance with terms of insurances
The Borrower shall procure that Owner 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:
(a)
the Owner shall 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 8.6(c)) ensure that the obligatory insurances are not made subject to any exclusions or qualifications to which the Lender has not given its prior approval;
(b)
the Owner shall 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;
(c)
the Owner shall 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 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
(d)
the Owner shall 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.
8.12
Alteration to terms of insurances
The Borrower shall procure that the Owner shall neither make nor agree to any alteration to the terms of any obligatory insurance nor waive any right relating to any obligatory insurance.
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8.13
Settlement of claims
The Borrower shall procure that the Owner 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 Lender to collect or recover any moneys which at any time become payable in respect of the obligatory insurances.
8.14
Provision of copies of communications
The Borrower shall procure that the Owner shall provide the Lender, at the time of each such communication, copies of all written communications (other than (unless specifically required by the Lender) communications of an entirely routine nature) between the Owner 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)
the Owner'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 Owner 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.
9
SHIP COVENANTS
9.1
General
The Borrower also undertakes with the Lender to comply with the following provisions of this Clause 9 at all times during the Security Period except as the Lender may otherwise permit in writing (such permission not to be unreasonably withheld in the case of Clause 9.13(b).
9.2
Ship's name and registration
The Borrower shall ensure that the Owner shall keep the Ship 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 the Ship.
9.3
Repair and classification
The Borrower shall, and shall procure that the Owner and each Approved Manager shall, keep the Ship owned by the Owner in a good and safe condition and state of repair:
(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 and acceptable to the Lender; 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.
16

9.4
Classification society undertaking
The Borrower shall procure that the Owner shall instruct the classification society referred to in Clause 9.3 (and procure that the classification society undertakes with the Lender) in relation to the Ship:
(a)
to send to the Lender, following receipt of a written request from the Lender, certified true copies of all original class records and any other related records held by the 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 that Ship at the offices of the classification society and to take copies of them;
(c)
to notify the Lender immediately in writing if the classification society:

(i)
receives notification from the Owner or any person that that Ship's classification society is to be changed; or

(ii)
becomes aware of any facts or matters which may result in a change, suspension, discontinuance, withdrawal or expiry of that Ship's class under the rules or terms and conditions of the Owner's or that Ship's membership of the classification society;
(d)
following receipt of a written request from the Lender:

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

(ii)
if the Owner is in default of any of its contractual obligations or liabilities to the classification society, to specify to the Lender in reasonable detail the facts and circumstances of such default, the consequences thereof, and any remedy period agreed or allowed by the classification society.
9.5
Modification
The Borrower shall procure that the Owner 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.
9.6
Removal of parts
The Borrower shall procure that the Owner shall not remove any material part of the Ship, or any item of equipment installed on, the 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 Lender and becomes on installation on the relevant Ship the property of the relevant Owner and subject to the security constituted by the relevant Mortgage  Provided that any Owner may install equipment owned by a third party if the equipment can be removed without any risk of damage to the Ship and may install an open loop scrubber system.
9.7
Surveys
The Borrower shall procure that the Owner shall submit the Ship regularly to all periodical 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.
17

9.8
Inspection
The Borrower shall procure that the Owner shall, subject to 15 days’ prior notice from the Lender, permit the Lender (by surveyors or other persons appointed by it for that purpose) to board the Ship once in every calendar year, without interfering with the Ship’s operations, to inspect its condition or to satisfy themselves about proposed or executed repairs and the Owner shall afford all proper facilities for, and bear the cost of, such inspections.
9.9
Prevention of and release from arrest
The Borrower shall procure that the Owner shall promptly discharge:
(a)
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;
(b)
all taxes, dues and other amounts charged in respect of the Ship, the Earnings or the Insurances; and
(c)
all other outgoings whatsoever in respect of the Ship, the Earnings or the Insurances,
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, the Borrower shall procure that the Owner shall procure its release by providing bail or otherwise as the circumstances may require.
9.10
Compliance with laws etc.
The Borrower shall procure that the Owner 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, its ownership, operation and management or to the business of the Owner;
(b)
not employ the Ship 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, the ISPS Code and 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 Lender has been given and the Owner has (at its expense) effected any special, additional or modified insurance cover which the Lender may require.
9.11
Provision of information
The Borrower shall procure that the Owner 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 the master and crew of the Ship;
(c)
any expenses incurred, or likely to be incurred, in connection with the operation, maintenance or repair of the Ship and any payments made in respect of that Ship;
(d)
any towages and salvages; and
(e)
its compliance, either Approved Managers' compliance and the compliance of the Ship with the ISM Code and the ISPS Code,
18


and, upon the Lender's request, provide copies of any Permitted Charter or any current charter relating to the Ship, of any current charter guarantee and copies of the Owner's or that Approved Managers' Document of Compliance, Safety Management Certificate and the ISSC.
9.12
Notification of certain events
The Borrower shall procure that the Owner shall immediately notify the Lender by email, confirmed forthwith by letter immediately upon becoming aware of:
(a)
any casualty 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 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;
(d)
any arrest or detention of the Ship, any exercise or purported exercise of any lien on that Ship or its Earnings or any requisition of the Ship for hire;
(e)
any intended dry docking of the Ship;
(f)
any Environmental Claim made against the Owner or in connection with the Ship, or any Environmental Incident;
(g)
any claim for breach of the ISM Code or the ISPS Code being made against the Owner, the Approved Managers or otherwise in connection with the Ship; or
(h)
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 Owner shall keep the Lender advised in writing on a regular basis and in such detail as the Lender shall require of the Owner's, each Approved Manager's or any other person's response to any of those events or matters.
9.13
Restrictions on chartering, appointment of managers etc.
The Borrower shall procure that the Owner shall not (without the Lender's prior written consent), in relation to the Ship:
(a)
let the Ship on demise charter for any period;
(b)
enter into any time or consecutive voyage charter in respect of the Ship other than a Permitted Charter;
(c)
charter the Ship otherwise than on bona fide arm's length terms at the time when the Ship is fixed;
(d)
appoint a manager of the Ship other than the Approved Managers or agree to any alteration to the terms of the Approved Managers' appointment;
(e)
de-activate or lay up the Ship; 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 $250,000 (or the equivalent in any other currency) unless that person has first given to the Lender and in terms satisfactory to it a written undertaking not to exercise any lien on that Ship or its Earnings for the cost of such work or for any other reason.
19

9.14
Notice of Mortgage
The Borrower shall procure that the Owner shall keep the Mortgage relative to the Ship registered against the Ship as a valid second 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 the Ship a framed printed notice stating that the Ship is mortgaged by the Owner to the Lender.
9.15
Sharing of Earnings
The Borrower shall procure that the Owner shall not enter into any agreement or arrangement for the sharing of any Earnings.
9.16
ISPS Code
The Borrower shall procure that the Owner shall comply with the ISPS Code and in particular, without limitation, shall:
(a)
procure that the Ship owned by the Owner and the company responsible for that Ship's compliance with the ISPS Code comply with the ISPS Code; and
(b)
maintain for the Ship an ISSC; and
(c)
notify the Lender immediately in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the ISSC.
10
EVENTS OF DEFAULT
Each of the events or circumstances set out in this Clause 10 is an Event of Default.
10.1
Non-payment
The Borrower or the Owner does not pay on the due date any amount payable by it under any Finance Document to which it is a part at the place and in the currency in which it is expressed to be payable.
10.2
Misrepresentation
Any representation, warranty or statement made or deemed to be repeated by the Borrower or the Owner is or proves to have been incorrect or misleading in any material respect when made or deemed to be repeated.
10.3
Breach of or Undertakings
The Borrower or the Owner is in breach of any covenants or fails to perform any of the undertakings contained in the Finance Documents to which it is a party.
10.4
Security
(a)
Any of the Finance Documents becomes unenforceable; or
(b)
The Owner fails to execute and, where applicable, register the Mortgage and the General Assignment.
10.5
Insolvency
The Borrower or the Owner is unable or admits inability to pay its debts as they fall due, suspends making payments on any of its debts or, by reason of actual or anticipated financial difficulties, commences negotiations with one or more of its creditors with a view to rescheduling any indebtedness.
20


10.6
Insolvency proceedings
Any corporate action, legal proceedings or other procedure or step is taken for:
(a)
the suspension of payments, winding-up, dissolution, administration, bankruptcy or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of the Borrower or the Owner;
(b)
a composition, compromise, assignment with any creditor of the Borrower or the Owner;
(c)
the appointment of a liquidator, receiver, administrative receiver, administrator, compulsory manager, or trustee or other similar officer in respect of the Borrower or the Owner or any of its assets; or any analogous procedure or step is taken in any jurisdiction.
10.7
Impossibility or illegality
Any event occurs which would, or would with the passage of time, render performance of a Finance Document by the Borrower or, as the case may be, the Owner impossible, unlawful or unenforceable by the Lender.
10.8
Revocation or modification of authorisation
Any consent, licence, approval, authorisation, filing, registration or other requirement of any governmental, judicial or other public body or authority which is now, or which at any time during the term of this Loan Agreement becomes, necessary to enable the Borrower or the Owner to comply with any of its obligations under any Finance Document is not obtained, is revoked, suspended, withdrawn or withheld, or is modified in a manner which the Lender considers is, or may be, prejudicial to the interests of the Lender, or ceases to remain in full force and effect.
10.9
Event of Default under the Senior Finance Documents
Any event occurs which constitutes an Event of Default (as that term is defined in the Senior Finance Documents) under any of the Senior Finance Documents.
10.10
Material adverse change
Any event or series of events occurs which, in the reasonable opinion of the Lender, is likely to have a materially adverse effect on the business, assets, financial condition or credit worthiness of the Borrower or the Owner.
10.11
Acceleration
If an Event of Default is continuing the Lender may by notice to the Borrower:
(a)
declare that the Loan, together with accrued interest, and all other amounts accrued or outstanding under this Loan Agreement are immediately due and payable, whereupon they shall become immediately due and payable; and/or
(b)
declare that the Loan is payable on demand, whereupon it shall immediately become payable on demand by the Lender.
11
FEES
11.1
Prepayment fee
If the Loan or any part thereof is voluntarily prepaid at any time or times prior to the Final Repayment Date, the Borrower shall, on the date of each such prepayment, pay a prepayment fee equal to 2.5 per cent. of the amount prepaid.
21


12
APPLICATION OF RECEIPTS
12.1
Normal order of application
Except as any Finance Document (including, without limitation, the Intercreditor Deed) may otherwise provide, any sums which are received or recovered by the Lender under or by virtue of any Finance Document shall be applied:
(a)
FIRST: in or towards payment pro rata of any unpaid fees, costs and expenses of the Lender under the Finance Documents;
(b)
SECONDLY: in or towards payment pro rata of any accrued interest or commission due but unpaid under this Agreement;
(c)
THIRDLY: in or towards payment pro rata of any principal due but unpaid under this Agreement;
(d)
FOURTHLY: in or towards payment pro rata of any other amounts due but unpaid under any Finance Document;
(e)
FIFTHLY: in retention of an amount equal to any amount not then due and payable under any Finance Document but which the Lender, by notice to the Borrower, 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 provisions of Clause 12.1(a), 12.1(b), 12.1(c) and 12.1(d); and
(f)
SIXTHLY: any surplus shall be paid to the Borrower or to any other person appearing to be entitled to it.
12.2
Variation of order of application
The Lender may, by notice to the Borrower, provide for a different manner of application from that set out in Clause 12 either as regards a specified sum or sums or as regards sums in a specified category or categories.
12.3
Notice of variation of order of application
The Lender may give notices under Clause 12 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.
12.4
Appropriation rights overridden
This Clause 12 and any notice which the Lender gives under Clause 16 shall override any right of appropriation possessed, and any appropriation made, by the Borrower or the Owner.
13
NOTICES
All notices, requests, consents and other communications under this Loan Agreement shall be in writing and shall be deemed delivered (i) upon delivery when delivered personally, (ii) upon receipt if by facsimile transmission (with confirmation of receipt thereof) or (iii) one business day after being sent via a reputable nationwide overnight courier service guaranteeing next business day delivery, in each case to the intended recipient as set forth below:
If to the Borrower:
c/o 154 Vouliagmenis Avenue
16674 Glyfada
22


Athens
Greece
Attention: Chief Executive Officer
Facsimile: +30 210 9638404

if to the Lender:
c/o Western Isles
Jardine House
P.O. Box NM 1431
Hamilton NM FX
Bermuda
Attention: Alastair Macdonald
Facsimile: +1441 (296) 0329
Any party may change the address to which notices, requests, consents or other communications hereunder are to be delivered by giving the other parties notice in the manner set forth in this clause.
14
AMENDMENTS AND WAIVERS
This Loan Agreement may be amended, modified, superseded, or cancelled, and any of the terms, representations, warranties or covenants hereof may be   waived, only by written instrument executed by both of the parties hereto or, in the case of a waiver, by the party waiving compliance.
15
PROCESS AGENT
The 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.
Meaning of " proceedings " and " Dispute "
In this Clause 15 , " 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 Loan Agreement (including a dispute relating to the existence, validity or termination of this Loan Agreement) or any non-contractual obligation arising out of or in connection with this Loan Agreement.
16
GOVERNING LAW AND JURISDICTION
This Loan Agreement (and any non-contractual rights and obligations arising out of or with respect to the subject matter of this Loan Agreement) shall be governed by and construed in accordance with English Law. The parties to this Loan Agreement irrevocably agree that the courts of England are to have jurisdiction to settle any disputes which may arise out of or in connection with this Loan Agreement (including any non-contractual rights and obligations arising out of or with respect to the subject matter of this Loan Agreement) and that any proceedings may be brought in those courts.
17
MISCELLANEOUS
17.1
The headings of the clauses of this Loan Agreement are for convenience only and shall not control or affect the meaning or construction of any provision of this Loan Agreement.
17.2
If any provision or part of a provision of this Loan Agreement or its application to either party, shall be, or be found by any authority of competent jurisdiction to be, invalid or unenforceable, such invalidity or unenforceability shall. not affect the other provisions or parts of such provisions of this Loan Agreement, all of which shall remain in full force and effect;
23

17.3
This Loan Agreement may be entered into on separate engrossments, each of which when so executed and delivered shall be an original but 'each engrossment shall together constitute one and the same instrument and shall take effect from the time of execution of the last engrossment. Immediate evidence that an engrossment has been executed may be provided by transmission of such engrossment by facsimile machine or by email with the original executed engrossment to be forthwith put in the mail.
17.4
A person who is not a party to this Loan Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 of the United Kingdom to enforce any term of this Loan Agreement but this does not affect any right or remedy of a third party which exists or is available apart from that Act.
This Loan Agreement has been entered into and amended and restated on the dates stated at the beginning of this Loan Agreement.
THE LENDER
SIGNED by Alastair Macdonald
 
 
)
for and behalf of
)  /s/ Alastair Macdonald
JELCO DELTA HOLDING CORP.
)
in the presence of:
/s/ Karen Campbell
Karen Campbell
 

THE BORROWER

SIGNED by Stamatios Tsantanis
 
 
)
for and behalf of
)  /s/ Stamatios Tsantanis
SEANERGY MARITIME HOLDINGS CORP.
)
in the presence of:
 
   
/s/ Theodora Mitropetrou
Theodora Mitropetrou
 


24

SCHEDULE 1

FORM OF DRAWDOWN NOTICE

To:
Jelco Delta Holding Corp.
 
(the " Lender ")
[ ● ] 2016
Re: US$[ ● ] Loan Agreement dated [ ● ]made between (A) Jelco Delta Holding Corp. (the "Lender") and (B) Seanergy Maritime Holdings Corp. (the "Borrower"),
We refer to the   Loan and hereby give you notice that we wish to draw Advance B in the amount of $([ ● ]) (Dollars [ ● ]) on [ ● ].  The funds should be credited to [ ● ][ ● ] [name and number of account] held in [ ● ] [name of bank)].
Words and expressions defined in the Loan Agreement shall have the same meanings when used herein.

THE   BORROWER
SEANERGY MARITIME HOLDINGS CORP.


By:
Name:
Title:
25

SCHEDULE 2


CONDITION PRECEDENT DOCUMENTS

PART A
The following are the documents referred to in Clause 2.2(a) required on or prior to the date of the Amending and Restating Agreement.
1
A duly executed original of the Intercreditor Deed.
2
Copies of the certificate of incorporation and constitutional documents of the Borrower and the Owner and any company registration documents in respect of the Borrower or the Owner (including, without limitation, any corporate register excerpts) required by the Lender.
3
Copies of resolutions of the directors of the Borrower and the Owner authorising the execution of each of the Finance Documents to which each is a party and, in the case of the Borrower, authorising named representatives to give the Drawdown Notices and other notices under this Loan Agreement.
4
The original of any power of attorney under which any Finance Document is executed on behalf of a Borrower and the Owner.
26

PART B
The following are the documents referred to in Clause 7.4 required on or before the Closing Date:
1
A duly executed original of the Mortgage, the Guarantee, the General Assignment (and of each document to be delivered by each of them), in respect of the Ship and the Owner.
2
Documentary evidence that:
(a)
the Ship is in the absolute and unencumbered ownership of the Owner save as contemplated by the Finance Documents and the Senior Finance Documents;
(b)
the Relevant Ship maintains the highest class with a first class classification society which is a member of IACS and acceptable to the Lender as the Lender may approve free of all recommendations and conditions of such classification society;
(c)
the Mortgage relating to the Ship has been duly registered or recorded against the Ship as a valid second preferred or, as the case may be, priority mortgage in accordance with the laws of the Approved Flag State; and
(d)
the Ship is insured in accordance with the provisions of this Loan Agreement and all requirements therein in respect of insurances have been complied with.
3
Documents establishing that the Ship will, as from the Closing Date, be managed by the Approved Managers on terms acceptable to the Lender, together with:
(a)
copies of the Approved Managers’ Document of Compliance, the Ship’s Safety Management Certificate (together with any other details of the applicable safety management system which the Lender requires); and
(b)
a copy of the ISSC in respect of the Ship.
Each of the documents specified in paragraphs 3 and 4 of Part A 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 the Owner.


27

Exhibit 4.65


Dated  18  May 2018
US$34,500,000
US$33,120,000 outstanding
AMENDMENT TO TERM LOAN FACILITY
PARTNER SHIPPING CO. and
CHAMPION OCEAN NAVIGATION CO.
as joint and several Borrowers
and
SEANERGY MARITIME HOLDINGS CORP.
as Corporate Guarantor
and
AMSTERDAM TRADE BANK N.V.
as Arranger
and
AMSTERDAM TRADE BANK N.V.
as Facility Agent
and
AMSTERDAM TRADE BANK N.V.
as Security Agent




SUPPLEMENTAL AGREEMENT
relating to
a senior secured loan facility of up to US$34,500,000
to (i) finance m.v. "PARTNERSHIP" (ex "DONG-A ARTEMIS") and
(ii) refinance part of certain existing indebtedness
secured over m.v. "CHAMPIONSHIP"





W A T S O N  F A R L E Y
&
W I L L I A M S

Index

Clause Page
1
Definitions and Interpretation
2
2
Agreement of the Finance Parties
2
3
Conditions Precedent
3
4
Representations
3
5
Amendments to Facility Agreement and other Finance Documents
3
6
Further Assurance
8
7
Costs and Expenses
8
8
Notices
8
9
Counterparts
8
10
Governing Law
8
11
Enforcement
8
     
Schedules
 
     
Schedule 1 The Lenders
10
Schedule 2 Conditions Precedent
11
   
Execution
 
   
Execution Pages
12


THIS AGREEMENT is made on  18  May 2018
PARTIES
(1)
PARTNER SHIPPING CO. , a corporation incorporated in the Republic of the Marshall Islands whose registered office is at the Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH 96960, Marshall Islands as a borrower (" Borrower A ");
(2)
CHAMPION OCEAN NAVIGATION CO. , a corporation incorporated in the Republic of Liberia whose registered office is at 80 Broad Street, Monrovia, Liberia as a borrower (" Borrower B " and together with Borrower A, the " Borrowers " and each, a " Borrower ");
(3)
SEANERGY MARITIME HOLDINGS CORP. , a corporation incorporated in the Republic of the Marshall Islands whose registered office is at the Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH 96960, Marshall Islands as corporate guarantor (the " Corporate Guarantor ");
(4)
AMSTERDAM TRADE BANK N.V. as arranger (the " Arranger ");
(5)
THE FINANCIAL INSTITUTIONS listed in Part B of Schedule 1 ( The Parties ) as lenders (the " Original Lenders ");
(6)
AMSTERDAM TRADE BANK N.V. as agent of the other Finance Parties (the " Facility Agent "); and
(7)
AMSTERDAM TRADE BANK N.V. as security agent for the Secured Parties (the " Security Agent ").
BACKGROUND
(A)
By the Facility Agreement, the Lenders agreed to make available to the Borrowers a facility of up to $34,500,000, of which $33,120,000 is outstanding as at the date of this Agreement.
(B)
The Obligors have requested (the " Relaxation   Request ") that the Lenders and the other Finance Parties give their consent to relax the financial covenants of the Corporate Guarantor under paragraph (b) of clause 21.2 ( Other financial covenants ) of the Facility Agreement during the period commencing on 30 June 2018 and ending on 29 June 2019 (inclusive) (the " Relaxation Period ") so that during the Relaxation Period:

(i)
the EBITDA to Net Interest Expense Ratio is at least 1.2:1; and

(ii)
the Leverage Ratio does not exceed 85 per cent. (other than during the period from 31 March 2019 until the end of the Relaxation Period when the percentage shall be reduced to 80 per cent.).
(C)
The Parties to this Agreement have agreed that the Borrowers will proceed with the change of their country of incorporation from the Republic of The Marshall Islands or the Republic of Liberia (as the case may be) to the Republic of Malta.
(D)
This Agreement sets out the terms and conditions on which the Lenders and the other Finance Parties agree, with effect on and from the Effective Date, at the request of the Obligors, to the Relaxation Request and to the consequential amendment of the Facility Agreement and the other Finance Documents in connection with those matters.

OPERATIVE PROVISIONS
1   DEFINITIONS AND INTERPRETATION
1.1
Definitions
In this Agreement:
" Effective Date " means the date on which the conditions precedent in Clause 3 ( Conditions Precedent ) are satisfied.
" Facility   Agreement " means the facility agreement dated 24 May 2017 (as amended and restated by the deed of accession, amendment and restatement dated 25 September 2017) and made between, amongst others, (i) the Borrowers as joint and several borrowers, (ii) the Corporate Guarantor as corporate guarantor, (iii) the Arranger as arranger, (iv) the Original Lenders as lenders, (v) the Facility Agent as facility agent and (vi) the Security Agent as security agent.
" Party " means a party to this Agreement.
1.2
Defined expressions
Defined expressions in the Facility Agreement and the other Finance Documents shall have the same meanings when used in this Agreement unless the context otherwise requires or unless otherwise defined in this Agreement.
1.3
Application of construction and interpretation provisions of Facility Agreement
Clause 1.2 ( construction ) of the Facility Agreement applies to this Agreement as if it were expressly incorporated in it with any necessary modifications.
1.4
Agreed forms of new, and supplements to, Finance Documents
References in Clause 1.1 ( Definitions ) to any new or supplement to a Finance Document being in "agreed form" are to that Finance Document:
(a)
in a form attached to a certificate dated the same date as this Agreement (and signed by the Borrowers and the Facility Agent); or
(b)
in any other form agreed in writing between the Borrowers and the Facility Agent acting with the authorisation of the Majority Lenders or, where clause 43.3 ( other   exceptions ) of the Facility Agreement applies, all the Lenders.
1.5
Designation as a Finance Document
The Borrowers and the Facility Agent designate this Agreement as a Finance Document.
1.6
Third party rights
Unless provided to the contrary in a Finance Document, a person who is not a Party has no right under the Third Parties Act to enforce or to enjoy the benefit of any term of this Agreement.
2
AGREEMENT OF THE FINANCE PARTIES
2.1
Agreement of the Lenders
The Lenders agree, subject to and upon the terms and conditions of this Agreement, to:
2


(a)
the Relaxation Request; and
(b)
the consequential amendments to the Facility Agreement and the other Finance Documents.
2.2
Agreement of the Finance Parties
The Finance Parties agree, subject to and upon the terms and conditions of this Agreement, to the consequential amendment of the Facility Agreement and the other Finance Documents in connection with the matters referred to in Clause 2.1 ( Agreement of the Lenders ).
2.3
Effective Date
The agreement of the Lenders and the other Finance Parties contained in Clause 2.1 ( Agreement of the Lenders ) and Clause 2.2 ( Agreement of the Finance Parties ) shall have effect on and from the Effective Date.
3
CONDITIONS PRECEDENT
The agreement of the Lenders and the other Finance Parties contained in Clause 2.1 ( Agreement of the Lenders ) and Clause 2.2 ( Agreement of the Finance Parties ) is subject to:
(a)
no Default continuing on the date of this Agreement and the Effective Date or resulting from the occurrence of the Effective Date;
(b)
the Repeating Representations to be made by each Obligor being true on the date of this Agreement and the Effective Date; and
(c)
the Facility Agent having received all of the documents and other evidence listed in Schedule 2 ( Conditions Precedent ) in form and substance satisfactory to the Facility Agent on or before the Effective Date or such later date as the Facility Agent may agree with the Borrowers.
4
REPRESENTATIONS
4.1
Facility Agreement representations
Each Obligor that is a party to the Facility Agreement makes the representations and warranties set out in clause 19 ( representations ) of the Facility Agreement, as amended and supplemented by this Agreement and updated with appropriate modifications to refer to this Agreement, by reference to the circumstances then existing on the date of this Agreement and on the Effective Date.
4.2
Finance Document representations
Each Obligor makes the representations and warranties set out in the Finance Documents (other than the Facility Agreement) to which it is a party, as amended and supplemented by this Agreement and updated with appropriate modifications to refer to this Agreement, by reference to the circumstances then existing on the date of this Agreement and on the Effective Date.
5
AMENDMENTS TO FACILITY AGREEMENT AND OTHER FINANCE DOCUMENTS
5.1
Specific amendments to the Facility Agreement
With effect on and from the Effective Date the Facility Agreement shall be, and shall be deemed by this Agreement to have been, amended as follows:
(a)
by replacing any references to "Schedule 2 ( Conditions Precedent )" throughout the Facility Agreement with "Schedule 2 ( Conditions Precedent and Conditions Subsequent )";
3


(b)
by deleting the definitions of " Borrower A " and " Borrower B " in the section of Parties thereof in their entirety and replacing them with the following new definitions:

"(1)
PARTNER SHIPPING CO. , a corporation incorporated in the Republic of the Marshall Islands whose registered office is at the Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH 96960, Marshall Islands as a borrower, such corporation to be re-domiciled to the Republic of Malta on the Re-domiciliation Date and named Partner Shipping Co. Limited and to have its registered address at 147/1 St Lucia Street, Valletta, VLT 1185, Malta (" Borrower A ");

(2)
CHAMPION OCEAN NAVIGATION CO. , a corporation incorporated in the Republic of Liberia whose registered office is at 80 Broad Street, Monrovia, Liberia as a borrower, such corporation to be re-domiciled to the Republic of Malta on the Re-domiciliation Date and named Champion Ocean Navigation Co. Limited and to have its registered address at 147/1 St Lucia Street, Valletta, VLT 1185, Malta (" Borrower B " and together with Borrower A, the " Borrowers " and each, a " Borrower ");";
(c)
by inserting the new definitions of  " Maltese Shares Security ", "Re-domiciliation" and "Re-domiciliation Date" in clause 1.1 thereof in alphabetical order as follows:
"" Maltese Shares Security " means, in relation to a Borrower, a document creating Security over the Maltese share capital of that Borrower in agreed form.
" Re-domiciliation " means, in relation to each Borrower, the change of the country of incorporation of that Borrower from the Republic of The Marshall Islands or the Republic of Liberia (as the case may be) to the Republic of Malta on the Re-domiciliation Date.
" Re-domiciliation Date " means, in relation to each Borrower, the date on which that Borrower is re-domiciled from the Republic of The Marshall Islands or the Republic of Liberia (as the case may be) to the Republic of Malta.";
(d)
by including the Maltese Shares Security in the definition of "Security Documents" in clause 1.1 thereof;
(e)
by inserting a new clause 4.5 ( Conditions Subsequent ) in clause 4 ( Conditions of Utilisation ) thereof as follows:
" 4.5 Conditions subsequent
The Borrowers undertake to deliver or cause to be delivered to the Facility Agent by no later than 30 June 2018 (or such later date agreed by the Facility Agent, acting with the authorisation of the Majority Lenders) evidence satisfactory to the Facility Agent of the submission of all requisite documentation to the Registry of Companies in Malta for the Re-domiciliation of each Borrower and, as soon as possible thereafter (but, in no event later than 5 Business Days and, in the case of paragraph 5(b) in Part D of Schedule 2, 60 days), the additional documents and other evidence listed in Part D of Schedule 2 in form and substance satisfactory to the Facility Agent evidencing, inter alia, that such Re-domiciliation has been implemented and that the relevant Finance Documents remain in full force and effect.";
(f)
by inserting a new sub-paragraph (d) in clause 19.2 ( Status ) thereof as follows:

"(d)
On the Re-domiciliation Date, each Borrower shall be (and will thereafter continue to be) a corporation, duly incorporated and validly existing in good standing under the law of the Republic of Malta.";
4


(g)
by inserting a new sub-paragraph (e) in clause 19.3 ( Share capital and ownership ) thereof as follows:

"(e)
On the Re-domiciliation Date, each Borrower shall have (and thereafter will continue to have) an authorised share capital of €1,500 divided into one thousand five hundred (1,500) ordinary shares of a nominal value of one Euro (€1) each, all of which will have been issued in registered form and will have been fully paid.";
(h)
by deleting the words "16 G. Lambraki Str., Premiera Mall, 2nd floor 166 74 Glyfada, Greece" in clause 19.32 ( Place of business ) thereof and replacing them with the words "154 Vouliagmenis Avenue 166 74 Glyfada, Greece";
(i)
by deleting  sub-paragraph (b) of clause 21.2 thereof in its entirety and replacing it with the following sub-paragraphs (b) and (c):
"(b) the EBITDA to Net Interest Expense Ratio is at least equal to:

(i)
from 30 June 2018 until 29 June 2019 (inclusive), 1.2:1; and

(ii)
from  30 June 2019 and for the remainder of the Security Period, 2:1; and
(c) the Leverage Ratio does not exceed:

(iii)
from 30 June 2018 until 30 March 2019 (inclusive), 85 per cent.;

(iv)
from 31 March 2019 until 29 June 2019 (inclusive), 80 per cent.; and

(v)
from 30 June 2019 and for the remainder of the Security Period, 75 per cent.";
(j)
by inserting the following words after the words "Shares Security" in sub-paragraphs (b) and (c) of clause 22.17 ( Share capital )thereof:
"or, on the Re-domiciliation Date, the Maltese Shares Security,";
(k)
by inserting the following words after the words "Marshall Islands and "Liberia" in the "Place of Incorporation" section in respect of the Borrowers in part A of schedule 1 thereof:
"or, on the Re-domiciliation Date, Malta";
(l)
by deleting the words "16 G. Lambraki Str., Premiera Mall, 2nd floor 166 74 Glyfada, Greece" in the "Address for Communication" section in respect of the Borrowers and the Corporate Guarantor in part A of schedule 1 thereof and replacing them with the words "154 Vouliagmenis Avenue 166 74 Glyfada, Greece";
(m)
by inserting a new Part D in schedule 2 ( Conditions Precedent and Conditions Subsequent ) thereof as follows:
"   PART D
CONDITIONS SUBSEQUENT

1
Documents for Re-domiciliation

(a)
Evidence that any required documents as requested by the Registry of Companies in Malta in respect of the Re-domiciliation of each Borrower has been provided to the Registry of Companies in Malta.
5



(b)
The new constitutional documents and certificate of goodstanding evidencing the Re-domiciliation of each Borrower (including, without limitation, its provisional certificate of continuation in Malta).

2
Maltese Shares Security
A duly executed original of the Maltese Shares Security in respect of each Borrower (and of each document to be delivered under each of it, including, without limitation, original new shares certificates of each re-domiciled Borrower).

3
Other documents and evidence

(a)
A duly executed original of a side letter executed by, amongst others, the Borrowers and the Corporate Guarantor immediately after the Re-domiciliation confirming that all their respective obligations and Security granted by them remain in full force and effect, in agreed form.

(b)
Evidence of service that a notice of pledge in respect of each Maltese Shares Security has been delivered (either by the Facility Agent or the relevant Borrower) to the Registry of Companies in Malta for registration under 122 (2) of the Companies Act (Chapter 386 of the Laws of Malta) and to any other party under the relevant Maltese Shares Security, each within 14 days from the date of issuance of the provisional certificate of registration in Malta in respect of each Borrower.

(c)
A power of attorney issued by the Security Agent authorising Maltese counsel to serve the notice set out in paragraph (b) above to the other parties in each Maltese Shares Security and to submit such notice to the Maltese Registry.

(d)
Any documents required to be executed under Dutch law to ensure that the Account Security remains in full force and effect.

(e)
Evidence of notification to the insurers regarding the Re-domiciliation.

4
Legal opinions
Legal opinions of the legal advisers to the Arranger, the Facility Agent and the Security Agent in the jurisdiction of Malta and the Marshall Islands in respect of the Maltese Shares Securities after the Re-domiciliation.

5
Evidence of permanent registration

(a)
Evidence that each Borrower has ceased to be a corporation incorporated in the Republic of The Marshall Islands or the Republic of Liberia (as the case may be).

(b)
A permanent certificate of continuation in respect of each Borrower confirming that it has been permanently registered as continuing in the Republic of Malta.";
(n)
by inserting a new sub-clause in clause 43 ( Amendments and Waivers ) thereof as follows:
"43.6 Release of Shares Securities"
At the earlier of (i) the end of the Security Period and (ii) the Re-domiciliation Date and provided that the Corporate Guarantor as shareholder will execute a Maltese Shares Security in respect of the shares of each Borrower in favour of the Security Agent, the Security Agent shall, at the request and cost of the Corporate Guarantor, release the Security constituted by the existing Shares Securities and, as appropriate, re-assign (without any warranty, representation, covenant or other recourse) to the Corporate Guarantor such rights as the Security Agent then has to, in or in connection with, the
6

Secured Assets (as defined in the relevant Shares Security) and return to the Corporate Guarantor (or as the Corporate Guarantor may direct) the items delivered to the Security Agent pursuant to such Shares Securities.";
(o)
the definition of, and references throughout to, each Finance Document shall be construed as if the same referred to that Finance Document as amended and supplemented by this Agreement; and
(p)
by construing references throughout to "this Agreement" and other like expressions as if the same referred to the Facility Agreement as amended and supplemented by this Agreement.
5.2
Amendments to Finance Documents
With effect on and from the Effective Date each of the Finance Documents other than the Facility Agreement and the Shares Security, shall be, and shall be deemed by this Agreement to have been, amended as follows:
(a)
by deleting the definition of " Owner " in the section of Parties thereof in its entirety and replacing it with the following new definition (as the case may be):

"(1)
PARTNER SHIPPING CO. , a corporation incorporated in the Republic of the Marshall Islands whose registered office is at the Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH 96960, Marshall Islands as a borrower, such corporation to be re-domiciled to the Republic of Malta on the Re-domiciliation Date and named Partner Shipping Co. Limited and to have its registered address at 147/1 St Lucia Street, Valletta, VLT 1185, Malta  (the " Owner ");"
or

(1)
CHAMPION OCEAN NAVIGATION CO. , a corporation incorporated in the Republic of Liberia whose registered office is at 80 Broad Street, Monrovia, Liberia as a borrower, such corporation to be re-domiciled to the Republic of Malta on the Re-domiciliation Date and named Champion Ocean Navigation Co. Limited and to have its registered address at 147/1 St Lucia Street, Valletta, VLT 1185, Malta (the " Owner ");";
(b)
by inserting a new definition " Re-domiciliation Date " in clause 1.1 thereof in alphabetical order as follows (as the case may be):
"" Re-domiciliation Date " means the date on which the Owner is re-domiciled from the Republic of The Marshall Islands to the Republic of Malta.";
or
"" Re-domiciliation Date " means the date on which the Owner is re-domiciled from the Republic of Liberia to the Republic of Malta.";
(c)
the definition of, and references throughout each of the Finance Documents to, the Facility Agreement and any of the other Finance Documents shall be construed as if the same referred to the Facility Agreement and those Finance Documents as amended and supplemented by this Agreement; and
(d)
by construing references throughout each of the Finance Documents to "this Agreement", "this Deed" and other like expressions as if the same referred to such Finance Documents as amended and supplemented by this Agreement.
5.3
Finance Documents to remain in full force and effect
7


The Finance Documents shall remain in full force and effect as amended and supplemented by:
(a)
the amendments to the Finance Documents contained or referred to in Clause 5.1 ( Specific amendments to the Facility Agreement ) and Clause 5.2 ( Amendments to Finance Documents ); and
(b)
such further or consequential modifications as may be necessary to give full effect to the terms of this Agreement.
6
FURTHER ASSURANCE
Clause 22.21 ( Further assurance ) of the Facility Agreement applies to this Agreement as if it were expressly incorporated in it with any necessary modifications.
7
COSTS AND EXPENSES
Clause 16.2 ( amendment costs ) of the Facility Agreement, as amended and supplemented by this Agreement, applies to this Agreement as if it were expressly incorporated in it with any necessary modifications.
8
NOTICES
Clause 37 ( notices ) of the Facility Agreement, as amended and supplemented by this Agreement, applies to this Agreement as if it were expressly incorporated in it with any necessary modifications.
9
COUNTERPARTS
This Agreement may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of this Agreement.
10
GOVERNING LAW
This Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.
11
ENFORCEMENT
11.1
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 11.1 ( Jurisdiction ) is for the benefit of the Secured Parties only.  As a result, no Secured Party shall be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction.  To the extent allowed by law, the Secured Parties may take concurrent proceedings in any number of jurisdictions.
11.2
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):
8



(i)
irrevocably appoints Messrs E. J. C. Album Solicitors, presently of Landmark House, 190 Willifield Way, London NW11 6YA, England (attention: Mr Edward Album, tel: +44 208 455 7653, fax: +44 208 457 5558 and email: 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 5 days of such event taking place) appoint another agent on terms acceptable to the Facility Agent.  Failing this, the Facility Agent may appoint another agent for this purpose.
This Agreement has been entered into on the date stated at the beginning of this Agreement.
9


SCHEDULE 1


THE LENDERS

Name of Original Lender Commitment
Address for Communication
Commitment
 
Amsterdam Trade Bank N.V.
Strawinskylaan 1939
Amsterdam 1077 XX
The Netherlands
 
Attn:   Marianthi Milopoulou
Shipping Finance
Email: m.milopoulou@atbank.nl   /  shipping.finance@atbank.nl
 
Attn:   Vassilis Kolovos
 
Shipping Finance
Email: v.kolovos@atbank.nl
$34,500,000

10

SCHEDULE 2


CONDITIONS PRECEDENT
1
Obligors
Documents of the kind specified in Schedule 2 Part A paragraphs 1.2 and 1.3 of the Facility Agreement.
2
Documents
2.1
A duly executed original of this Agreement.
3
Legal opinion
A legal opinion of Watson, Farley & Williams, legal advisers to the Facility Agent and the Security Agent in England, substantially in the form distributed to the Lenders before signing this Agreement.
4
Other documents and evidence
4.1
A copy of any other Authorisation or other document, opinion or assurance which the Facility Agent considers to be necessary or desirable (if it has notified the Borrowers accordingly) in connection with the entry into and performance of the transactions contemplated by this Agreement or for the validity and enforceability of any Finance Document as amended and supplemented by this Agreement.
4.2
Evidence that the costs and expenses then due from the Borrowers pursuant to Clause 7 ( Costs and Expenses ) have been paid or will be paid by the Effective Date.
11


EXECUTION PAGES


BORROWERS
     
       
SIGNED by
)
 
/s/ Stavros Gyftakis
Stavros Gyftakis
)
   
duly authorised
)
   
for and on behalf of
)
   
PARTNER SHIPPING CO.
)
   
in the presence of:
)
   
       
Witness' signature:
)
   
Witness' name: Andreas Giakoumelos
)
 
/s/ Andreas Giakoumelos
Witness' address:
)
   
       
       
SIGNED by
     
Stavros Gyftakis
)
   
duly authorised
)
 
/s/ Stavros Gyftakis
for and on behalf of
)
   
CHAMPION OCEAN NAVIGATION CO.
)
   
in the presence of:
)
   
       
Witness' signature:
)
   
Witness' name: Andreas Giakoumelos
)
 
/s/ Andreas Giakoumelos
Witness' address:
)
   
       
       
       
CORPORATE GUARANTOR
     
       
SIGNED by
     
Stavros Gyftakis
)
   
duly authorised
)
 
/s/ Stavros Gyftakis
for and on behalf of
)
   
SEANERGY MARITIME HOLDINGS CORP.
)
   
in the presence of:
)
   
       
Witness' signature:
)
   
Witness' name: Andreas Giakoumelos
)
 
/s/ Andreas Giakoumelos
Witness' address:
)
   

12

ORIGINAL LENDERS
     
       
SIGNED by
)
   
Alexia – Maria Chatzimichali
)
 
/s/ Alexia-Maria Chatzimichali
duly authorised
)
   
for and on behalf of
)
   
AMSTERDAM TRADE BANK N.V.
)
   
in the presence of:
)
   
       
Witness' signature:
)
   
Witness' name: Andreas Giakoumelos
)
 
/s/ Andreas Giakoumelos
Witness' address:
)
   
       
       
ARRANGER
     
       
SIGNED by
)
   
Alexia – Maria Chatzimichali
)
 
/s/ Alexia-Maria Chatzimichali
duly authorised
)
   
for and on behalf of
)
   
AMSTERDAM TRADE BANK N.V.
)
   
in the presence of:
)
   
       
Witness' signature:
)
   
Witness' name: Andreas Giakoumelos
)
 
/s/ Andreas Giakoumelos
Witness' address:
)
   
       
       
FACILITY AGENT
     
       
SIGNED by
)
   
Alexia – Maria Chatzimichali
)
 
/s/ Alexia-Maria Chatzimichali
duly authorised
)
   
for and on behalf of
)
   
AMSTERDAM TRADE BANK N.V.
)
   
in the presence of
)
   
       
Witness' signature:
)
   
Witness' name: Andreas Giakoumelos
)
 
/s/ Andreas Giakoumelos
Witness' address:
)
   

13

SECURITY AGENT
     
       
SIGNED by
)
   
Alexia – Maria Chatzimichali
)
 
/s/ Alexia-Maria Chatzimichali
duly authorised
)
   
for and on behalf of
)
   
AMSTERDAM TRADE BANK N.V.
)
   
in the presence of:
)
   
       
Witness' signature:
)
   
Witness' name: Andreas Giakoumelos
)
 
/s/ Andreas Giakoumelos
Witness' address:
)
   


14
Exhibit 4.67
Dated 13 February 2019


US$16,200,000
US$ 11,450,000 outstanding




SEANERGY MARITIME HOLDINGS CORP.
as Borrower

and

PARTNER SHIPPING CO. LIMITED
as Guarantor
and

EMPEROR HOLDING LTD.
as Guarantor
and

JELCO DELTA HOLDING CORP.
as Lender



SUPPLEMENTAL AGREEMENT
relating to
a loan facility of originally up to US$16,200,000
relating to the financing of m.v. "PARTNERSHIP"
Index

Clause
Page
     
1
Definitions and Interpretation
2
2
Agreement of the Lender
3
3
Conditions Precedent
3
4
Representations
3
5
Amendments to Facility Agreement
4
6
Notices
4
7
Counterparts
5
8
Governing Law
5
9
Enforcement
5
     
Schedules
 
     
Schedule 1 Conditions Precedent
6
     
Execution
 
     
Execution Page
7



THIS AGREEMENT is made on 13 February 2019
PARTIES
(1)
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 borrower (the " Borrower ");
(2)
PARTNER SHIPPING CO. LIMITED ,   a corporation incorporated and existing under the laws of Malta having its registered office at 147/1 St. Lucia Street, Valletta, VLT 1185, Malta as guarantor (the " Owner ");
(3)
EMPEROR HOLDING LTD., 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 " Emperor ");
(4)
JELCO DELTA HOLDING 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 lender (the " Lender ").
BACKGROUND
(A)
By the Facility Agreement, the Lender agreed to make available to the Borrower a facility of (originally) up to US$16,200,000, of which US$ 11,450,000 is outstanding at the date of this Agreement.
(B)
As security for, amongst other things, the payment of all sums due and to become due under the Facility Agreement, the Owner executed and delivered a second preferred Marshall Islands mortgage dated 31 May 2017 as amended and supplemented by a first Addendum dated 28 September 2017, in favour of the Lender.
(C)
By a guarantee dated 24 May 2017 as amended and restated by a deed of amendment and restatement dated 27 September 2017 and made between (i) the Owner (previously known as Partner Shipping Co.) as guarantor and (ii) the Lender, the Owner guaranteed the obligations of the Borrower under the Facility Agreement and the other Finance Documents (the “ Owner Guarantee ”).
(D)
By a guarantee dated 24 May 2017 as amended and restated by a deed of amendment and restatement dated 27 September 2017 and made between (i) Emperor as guarantor and (ii) the Lender, Emperor guaranteed the obligations of the Borrower under the Facility Agreement and the other Finance Documents (the “ Emperor Guarantee ” and together with the Owner Guarantee, the “ Guarantees ”).
(E)
It is a condition to a senior loan agreement to be made between, inter alia, (i) the Owner as borrower, (ii) the Borrower as corporate guarantor and (iii) Amsterdam Trade Bank N.V. as facility agent in respect of a loan of up to US$20,890,000, that all the Finance Documents as defined in the Facility Agreement, including but not limited to the securities over the m.v. Partnership, the Owner Guarantee and the Emperor Guarantee be released and reassigned to the Owner and Emperor, respectively on the date referred to in Recital (F) above.
(F)
Following execution and registration of all the securities required under the senior loan agreement, all securities over the m.v. Partnership, the Owner Guarantee and the Emperor

Guarantee be re-executed and recorded with the necessary amendments together with a new intercreditor deed (the “ New Partnership Finance Documents ”).
(G)
The Borrower has requested that the Lender gives its consent to (i) the release of the Finance Documents under the Facility Agreement, including but not limited to the release of the m.v. “PARTNERSHIP” and the Owner and the Guarantor as guarantors, notwithstanding the provisions contained in clause 5 ( Prepayment ) of the Facility Agreement, and (ii) the extension of the Final Repayment Date of the Facility Agreement (the " Request ").
(H)
This Agreement sets out the terms and conditions on which the Lender agrees, with effect on and from the Effective Date, to the Request and that certain assets assigned, mortgaged, pledged or charged in favour of the Lender and the obligations and liabilities of the Owner and Emperor under the Guarantees and the other Finance Documents creating a Security Interest over the Ship shall be released, subject to the terms of this Supplemental Agreement.
OPERATIVE PROVISIONS
1
DEFINITIONS AND INTERPRETATION
1.1
Definitions
In this Agreement:
" Effective Date " means the date on which the conditions precedent in Clause 3 ( Conditions Precedent ) are satisfied.
" Facility Agreement " means the loan agreement dated 24 May 2017 as amended and supplemented by a supplemental letter dated 22 June 2017 and a second supplemental letter dated 22 August 2017 and as amended and restated by a deed of amendment and restatement dated 27 September 2017 and made between (i) the Borrower as borrower and ((ii) the Lender as lender in respect of a loan facility of (originally) up to US$16,200,000.
" Obligors " means the Borrower, the Owner and Emperor.
" Party " means a party to this Agreement.
" Ship " means the Capesize dry bulk carrier type vessel of a maximum of 179,213 DWT named "PARTNERSHIP", having IMO Number 9597848 built by Hyundai Samho HI in 2012 and registered in the name of the Owner under and approved Flag State (currently being the the flag of the Republic of the Marshall Islands).
1.2
Defined expressions
Defined expressions in the Facility Agreement and the other Finance Documents shall have the same meanings when used in this Agreement unless the context otherwise requires or unless otherwise defined in this Agreement.
1.3
Application of construction and interpretation provisions of Facility Agreement
Clause 1.3 ( construction of certain terms ) of the Facility Agreement applies to this Agreement as if it were expressly incorporated in it with any necessary modifications.
2


1.4
Designation as a Finance Document
The Borrower and the Lender designate this Agreement as a Finance Document.
1.5
Third party rights
Unless provided to the contrary in a Finance Document, a person who is not a Party has no right under the Third Parties Act to enforce or to enjoy the benefit of any term of this Agreement.
2
AGREEMENT OF THE LENDER
2.1
Agreement of the Lender
The Lender agrees, subject to and upon the terms and conditions of this Agreement to:
(a)
the Request; and
(b)
the consequential amendments to the Facility Agreement and the other Finance Documents.
2.2
Agreement of the Finance Parties
The Finance Parties agree, subject to and upon the terms and conditions of this Agreement, to the consequential amendment of the Facility Agreement and the other Finance Documents in connection with the matters referred to in Clause 2.1 (Agreement of the Lender).
2.3
Effective Date
The agreement of the Lender contained in Clause 2.1 ( Agreement of the Lender ) shall have effect on and from the Effective Date.
3
CONDITIONS PRECEDENT
The agreement of the Lender contained in Clause 2.1 ( Agreement of the Lender ) is subject to:
(a)
the Repeating Representations to be made by each Obligor being true on the date of this Agreement and the Effective Date;
(b)
the Lender having received all of the documents and other evidence listed in Schedule 1 ( Conditions Precedent ) in form and substance satisfactory to the Lender on or before the Effective Date.
4
REPRESENTATIONS
4.1
Facility Agreement representations
Each Obligor that is a party to the Facility Agreement makes the representations and warranties set out in clause 6 ( Representations and warranties ) of the Facility Agreement, as amended and supplemented by this Agreement and updated with appropriate modifications to refer to this Agreement, by reference to the circumstances then existing on the date of this Agreement and on the Effective Date.
3


4.2
Finance Document representations
Each Obligor makes the representations and warranties set out in the Finance Documents (other than the Facility Agreement) to which it is a party, as amended and supplemented by this Agreement and updated with appropriate modifications to refer to this Agreement, by reference to the circumstances then existing on the date of this Agreement and on the Effective Date.
5
AMENDMENTS TO FACILITY AGREEMENT
5.1
Specific amendments to the Facility Agreement
With effect on and from the Effective Date the Facility Agreement shall be, and shall be deemed by this Agreement to have been, amended as follows:
(a)
By deleting the definitions of “Final Repayment Date”, “Mortgage”, “Senior Agreement”, “Senior Finance Documents” and “Ship” in clause 1.2 (definitions) in their entirety and replacing them with the following:
““ Final Repayment Date ” means 30 December 2020;
“ Mortgage ” means the second preferred mortgage on the Ship and, if required by the laws of the relevant Approved Flag, the deed of covenant collateral to the mortgage in agreed form;
“ Senior Agreement ” means the agreement to be made between (i) the Owner as borrower, (ii) the Borrower as corporate guarantor, (iii) certain financial institutions listed in Part B of Schedule 1 (The Parties) thereto, (iv) Amsterdam Trade Bank N.V. as arranger, (v) Amsterdam Trade Bank N.V. as facility agent and (vi) Amsterdam Trade Bank N.V. as security agent in respect of a loan of up to $20,890,000;
“ Senior Finance Documents ” has the meaning given to that term in the definition of "Finance Documents" in the Senior Agreement;
“ Ship ” means the Capesize dry bulk carrier type vessel of a maximum of 179,213 DWT named "PARTNERSHIP", having IMO Number 9597848 built by Hyundai Samho HI in 2012 and registered in the name of the Owner under and approved Flag State (currently being the flag of the Republic of the Marshall Islands);”
(b)
by deleting the definition of “Ship A” in clause 1.2 (definitions) in its entirety;
(c)
the definition of, and references throughout to, each Finance Document shall be construed as if the same referred to that Finance Document as amended and supplemented by this Agreement; and
(d)
by construing references throughout to "this Agreement" and other like expressions as if the same referred to the Facility Agreement as amended and supplemented by this Agreement.
6
NOTICES
Clause 13 ( notices ) of the Facility Agreement, as amended and supplemented by this Agreement, applies to this Agreement as if it were expressly incorporated in it with any necessary modifications.
4


7
COUNTERPARTS
This Agreement may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of this Agreement.
8
GOVERNING LAW
This Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.
9
ENFORCEMENT
9.1
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 9.1 ( 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.
9.2
Service of process
(a)
Without prejudice to any other mode of service allowed under any relevant law, each Obligor:

(i)
irrevocably appoints Messrs E. J. C. Album Solicitors, presently of Landmark House, 190 Willifield Way, London NW11 6YA, England (attention: Mr Edward Album, tel: +44 208 455 7653, fax: +44 208 457 5558 and email: 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 the other 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.
5


SCHEDULE 1


CONDITIONS PRECEDENT
1
Obligors
Documents of the kind specified in Schedule 2 Part A paragraphs 2, 3 and 4 of the Facility Agreement.
2
Security
2.1
A duly executed original of this Agreement.
2.2
The duly Executed New Partnership Finance Documents.
3
Other documents and evidence
3.1
A copy of any other Authorisation or other document, opinion or assurance which the Lender considers to be necessary or desirable (if it has notified the Borrower accordingly) in connection with the entry into and performance of the transactions contemplated by this Agreement or for the validity and enforceability of any Finance Document as amended and supplemented by this Agreement.
3.2
Evidence that the agent referred to in Clause 9.2 has accepted its appointment as agent for the service of process under this Agreement.

6

EXECUTION PAGE
BORROWER
SIGNED by Stamatios Tsantanis
)
/s/ Stamatios Tsantanis
duly authorised attorney-in-fact
)
 
for and on behalf of
)
 
SEANERGY MARITIME HOLDINGS CORP.
)
 
     
in the presence of:
)
 
Witness' signature:
)
 
Witness' name: Theodora Mitropetrou
)
/s/ Theodora Mitropetrou
Witness' address: 154 Vouliagmenis Avenue 166 74 Glyfada, Greece
)
 
     

OWNER

SIGNED by Stamatios Tsantanis
)
/s/ Stamatios Tsantanis
duly authorised attorney-in-fact
)
 
for and on behalf of
)
 
PARTNER SHIPPING CO. LIMITED
)
 
     
in the presence of:
)
 
Witness' signature:
)
 
Witness' name: Theodora Mitropetrou
)
/s/ Theodora Mitropetrou
Witness' address: 154 Vouliagmenis Avenue166 74 Glyfada, Greece
)
 
     

EMPEROR

SIGNED by Stamatios Tsantanis
)
/s/ Stamatios Tsantanis
duly authorised attorney-in-fact
)
 
for and on behalf of
)
 
EMPEROR HOLDING LTD.
)
 
     
in the presence of:
)
 
Witness' signature:
)
 
Witness' name: Theodora Mitropetrou
)
/s/ Theodora Mitropetrou
Witness' address: 154 Vouliagmenis Avenue 166 74 Glyfada, Greece
)
 
     


LENDER

SIGNED by Alastair Macdonald
)
/s/ Alastair Macdonald
duly authorised attorney-in-fact
)
 
for and on behalf of
)
 
JELCO DELTA HOLDING CORP.
)
 
     
in the presence of: 
)
/s/ Karen Campbell
Witness' signature: 
)

Witness' name:      Karen Campbell
)

Witness' address:  Jardine House, 4th Floor
                              33-35 Reid Street,
                              Hamilton HM FX, Bermuda
)

     

7

Exhibit 4.69


AMENDMENT TO
CONVERTIBLE PROMISSORY NOTE
This AMENDMENT (this “ Amendment ”) to the Convertible Promissory Note, dated as of September 27, 2017 (the “ Note ”), by and between Seanergy Maritime Holdings Corp. a corporation organized under the laws of the Republic of the Marshall Islands (the “ Maker ”) and Jelco Delta Holding Corp., or its respective registered assigns (the “ Holder ”), is made on February 13, 2019.
Capitalized terms used but not defined herein shall have the meaning assigned in the Note.
WHEREAS , following the Holder’s prior consent, all Championship Finance Documents, except from the Guarantee, as these terms are defined in the Note, have been released and reassigned to Champion Ocean Navigation Co. Limited and the m.v. Championship was sold to its new owner on November 7, 2018;
WHEREAS , the parties wish to amend the Note as hereinafter set forth in order to, inter alia , amend the repayment schedule and the prepayment and notices sections of the Note (the “ New   Note Amendments ”);
WHEREAS , by a supplemental agreement to the Partnership Loan Agreement of even date herewith the Holder, as lender, has consented to all the securities over the m.v. Partnership and the relevant Owner Guarantee (as defined in the Partnership Loan Agreement) be re-executed and recorded with the necessary amendments (the “ Partnership Loan Agreement Amendments ”); and
WHEREAS , in view of New Note Amendments and the Partnership Loan Agreement Amendments the parties wish to amend the Note accordingly, as hereinafter set forth.
NOW, THEREFORE , in consideration of the premises and the mutual agreements herein contained, the parties hereto hereby agree as follows:
(A)
In Section 1 of the Promissory Note the following definitions are deleted: 1.1 “Champion”, 1.2 “Champion General Assignment”, 1.4 “Championship Finance Documents”, 1.5 “Championship Mortgage”, 1.17 “Partnership Second Mortgage”.
(B)
In Section 1 the definitions of “Maturity Date”, “Owner Guarantee”, “Partnership Second Mortgage” and “Ship” are hereby deleted, and new definitions are inserted in the correct alphabetical order:
“1.11 “ Maturity Date ” means 31 December 2022.”

“1.12 “ Owner Guarantee ” shall mean an irrevocable and unconditional guarantee of the obligations of the Maker, as borrower, executed or to be executed by Partner in favor of the Holder”
“1.17 “ Partnership Second Mortgage ” shall mean a certain second priority mortgage granted to or to be granted by Partner, as owner, in favor of the Holder, as mortgagee, over the Partnership,”
“1.20 “ Ship ” means m.v. Partnership”
2. Following the insertion of certain definitions in Section 1 of the Promissory Note, the definitions of Championship , Drawdown Date , Emperor , Guarantee , Holder , Material Adverse Effect , Maturity Date , Owner Guarantee , Partner , Partnership , Partnership Finance Documents , Partnership Loan Agreement , Partnership Second Mortgage , Related Agreement , Related Finance Documents , Ship , Total Loss and Total Loss Date are hereby renumbered to “1.1 Championship”, “1.2 Drawdown Date” , “1.3 Emperor” , “1.4 Guarantee” , “1.5 Holder” , “1.6 Material Adverse Effect”, “1.7 Maturity Date” , “1.8 Owner Guarantee” , “1.9 Partner” , “1.10 Partnership” , “1.11 Partnership Finance Documents” , “1.12 Partnership Loan Agreement” , “1.13 Partnership Second Mortgage” , “1.14 Related Agreement” , “1.15 Related Finance Documents ”, “1.16 Ship” , “1.17 Total Loss” and “1.18 Total Loss Date”.
(C)
Section 5 of the Note is deleted in its entirety and replaced with the following:
“5.   Repayment . The aggregate of all the outstanding principal amount and all accrued and unpaid interest under this Note shall be repaid by the Maker in one bullet payment on the Maturity Date whereupon the Note shall be cancelled.”
(D)
Section 6 of the Note is deleted in its entirety and replaced with the following:
“6.   Voluntary Prepayment . The Maker may, by giving a five (5) business days prior written notice to the Holder, at any time thereafter prepay the whole or any part of this Note in cash or, subject to the Holder’s prior written agreement on price per share, in a number of fully paid and nonassessable shares of the Maker Common Stock equal to the amount of the Note being prepaid divided by the agreed price per share.”
(E)
Section 9 of the Note is deleted in its entirety and replaced with the following:
“9.   Mortgages and Other Collateral . This Note is secured by, inter alia , (i) the Partnership Mortgage and (ii) the Partnership Finance Documents.”
(F)
Section 10.1 of the Note is deleted in its entirety and replaced with the following:
“10.1   Conversion . The Holder may by notice in writing to the Maker elect at any time (including without limitation after receipt of a notice under Section 6) to convert the whole or any part of the then outstanding principal amount of this Note into a number of fully paid and nonassessable shares of the Maker Common

Stock (the “ Conversion Shares ”) equal to the amount of the principal amount being converted divided by a conversion price equal to $0.90 per share, as such conversion price may be adjusted pursuant to the terms hereof or by any other conversion price to be agreed in writing between the Maker and the Holder (the “ Conversion Price ”).”
(G)
In Section 16 of the Note, the Maker’s address is deleted in its entirety and replaced with the following:
“Seanergy Maritime Holdings Corp.
154 Vouliagmenis Avenue
16674 Glyfada, Athens, Greece
Facsimile: +30 210 9638404
Attention: Chief Executive Officer”
(H)
From the date of the sale of the m.v. Championship, the Note is secured only by the Partnership Finance Documents and the Guarantee, as these terms are defined in the Note.
(I)
Confirmation of Agreement .  Except as expressly set forth herein, the Note is ratified and confirmed in all respects and shall remain in full force and effect in accordance with its terms, and each reference in the Note to “this Note” shall mean the Note as amended by this Amendment.
(J)
Counterparts; Effectiveness .  This Amendment may be executed in any number of counterparts (including by facsimile) and by different parties hereto in separate counterparts, with the same effect as if all parties had signed the same document.  All such counterparts shall be deemed an original, shall be construed together and shall constitute one and the same instrument.  This Amendment shall become effective when each party hereto shall have received counterparts hereof signed by all of the other parties hereto.
(K)
Governing Law .  The laws of the State of New York shall govern the enforceability and validity of this Agreement, the construction of its terms and the interpretation of the rights and duties of the parties, without regard to the principles of conflicts of laws thereof.
[Signature page follows]
THIS AMENDMENT has been entered into on the date stated above.
THE MAKER:
SEANERGY MARITIME HOLDINGS CORP.

 
By:
/s/ Stamatios Tsantanis
 
   
Name: Stamatios Tsantanis
 
   
Title: Chief Executive Officer
 


THE HOLDER:
JELCO DELTA HOLDING CORP.

 
By:
/s/ Alastair B. Macdonald
 
   
Name: Alastair B. Macdonald
 
   
Title: Director
 

Acknowledged and agreed by

EMPEROR HOLDING LTD.
As gurantor

 
By:
/s/ Stamatios Tsantanis
 
   
Name: Stamatios Tsantanis
 
   
Title: Director
 

Exhibit 4.73


SUPPLEMENTAL LETTER


To:
SEANERGY MARITIME HOLDINGS CORP.
as Borrower
of Trust Company Complex, Ajeltake Road
Ajeltake Island, Majuro
MH96960, the Marshall Islands
   
From:
JELCO DELTA HOLDING CORP.
as Lender
Jardine House, 4th Floor,
33-35 Reid Street
P.O. Box HM 1431
Hamilton HM FX, Bermuda

31 January 2019
Dear Sirs,
Facility Agreement originally entered into on 10 April 2018 and amended and restated on 13 June 2018 and as amended and supplemented by a supplemental letter dated 11 August 2018, and made between (i) Seanergy Maritime Holdings Corp., as borrower (the "Borrower") and (ii) Jelco Delta Holding Corp., as lender (the "Lender") in respect of a loan facility of US$2,000,000 (the “Facility Agreement”)

We refer to the Facility Agreement. Defined expressions in the Facility Agreement shall have the same meanings when used in this Supplemental Letter and for the purposes of this Supplemental Letter. This Supplemental Letter sets out the terms and conditions on which the Lender agrees, at the request of the Borrower, to amend a certain provision of the Facility Agreement as described in Clause 1.1 below.
1.1
We hereby confirm our approval, consent and acceptance of the following with effect as of 31 January 2019:
a)
To delete the definition of “ Final Repayment Date ” in Clause 1.2 ( Definitions ) of the Facility Agreement in its entirety and replacing it with the following:
“" Final Repayment Date " means 1 April 2019;” and
b)
To construe throughout all references in the Facility Agreement to “this Agreement” and all references in the Finance Documents (other than the Facility Agreement) to the “Loan Agreement” as references to the Facility Agreement as amended and supplemented by this Supplemental Letter.
2
Governing law
This Supplemental Letter and any non-contractual obligations arising out of or in connection with it shall be governed by and construed in accordance with English law.
3
Process Agent
The Borrower, hereby, irrevocably appoints Messrs. E.J.C Album Solicitors, presently of Landmark House, 190 Willifield Way, London, NW11 6YA, England (Attention of Mr. Edward Album Tel +44 (0) 20 8455 7653, 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 this Supplemental Letter.
Please confirm your agreement by signing the acknowledgement below.
Yours faithfully

/s/ Evan Breibart
______________________________
Evan Breibart
31 January 2019
for and on behalf of
Jelco Delta Holding Corp.
as Lender



We hereby acknowledge receipt of the above Supplemental Letter and confirm our agreement to the terms hereof.

/s/ Stamatios Tsantanis
______________________________
Stamatios Tsantanis
31 January 2019
for and on behalf of
Seanergy Maritime Holdings Corp.
as Borrower
Exhibit 4.77
Execution Version
Guarantee
Dated   28 June         2018
(1)
Seanergy Maritime Holdings Corp.
(2)
Hanchen Limited

Contents
   
Page
1
Definitions and Interpretation
1
     
2
Guarantee and Indemnity
2
     
3
Protection of Owner
2
     
4
Additional Payment Obligations
5
     
5
Application of Moneys
6
     
6
Representations and Warranties
7
     
7
General Undertakings
11
     
8
Payments
14
     
9
Set-Off
14
     
10
Calculations and Certificates
15
     
11
Partial Invalidity
15
     
12
Remedies and Waivers
15
     
13
Counterparts
15
     
14
Notices
15
     
15
Governing Law
16
     
16
Enforcement
16

Guarantee
Dated     28 June             2018
By:
(1)
Seanergy Maritime Holdings Corp., a corporation organised and existing under the laws of Republic of the Marshall Islands, having its registered office at The Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Republic of the Marshall Islands MH96960 (the “Guarantor” )
In favour of:
(2)
Hanchen Limited, a corporation organised and existing under the laws of Republic of the Marshall Islands, having its registered office at The Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Republic of the Marshall Islands MH96960 (the “Owner” ).
Whereas:
(A)
Pursuant to a memorandum of agreement dated on or about the date of this Guarantee (the “MOA” )   and executed between Knight Ocean Navigation Co. (the “Charterer” , as seller) and the Owner (as buyer), the Charterer sold and delivered and the Owner purchased and accepted the legal and beneficial title to one (1) bulk carrier to be acquired by the Owner under the MOA and named “Knightship” with IMO No. 9507893 and which upon her delivery under the MOA will be registered in the name of the Owner as legal owner under the law and flag of the Flag State (the “Vessel” ).
(B)
Simultaneously with the entry into of the MOA, the Owner (as owners) and the Charterer (as charterers) entered into a bareboat charter (the “Charter” ), pursuant to which the Owner agrees to let and the Charterer agrees to charter the Vessel on a bareboat basis.
(C)
The execution and delivery to the Owner of this Guarantee is one of the conditions to the chartering of the Vessel under the Charter.
This Deed witnesses as follows:
1
Definitions and Interpretation
1.1
Definitions
In this Guarantee:
“Default Rate” means interest at the rate calculated in accordance with clause 38.9 of the Charter.
“Guarantor Liabilities” means all of the liabilities and obligations of the Guarantor to the Owner under or pursuant to this Guarantee, from time to time, whether in respect of principal, interest, costs or otherwise and whether present, future, actual or contingent.
Page 1

“Guarantor Security Documents” means this Guarantee and any and all documents which may at any time be executed by the Guarantor as security for the payment of all or any part of the Guarantor Liabilities and “Guarantor Security Document” means any one of them.
“Indebtedness” means the aggregate from time to time of all sums of any nature (together with all accrued and unpaid interest on any of those sums) payable by any Security Party to the Owner under all or any of the Transaction Documents to which any Security Party is a party.
1.2
Defined terms
Unless otherwise specified in this Guarantee, or unless -the context otherwise requires, all words and expressions defined or explained in the Charter shall have the same meanings when used in this Guarantee.
A Termination Event which is “continuing” is a reference to a Termination Event which is not remedied or is not waived.
1.3
Headings
Clause and Schedule headings are for ease of reference only.
1.4
Third party rights
A person who is not a party to this Guarantee has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Guarantee.
2
Guarantee and Indemnity
The Guarantor irrevocably and unconditionally:
2.1
guarantees to the Owner punctual performance by the Charterer of all the Charterer’s obligations under the Transaction Documents;
2.2
undertakes with the Owner that whenever the Charterer does not pay any amount when due under or in connection with any Transaction Document, the Guarantor shall immediately on demand pay that amount as if it were the principal obligor; and
2.3
agrees with the Owner that if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal, it will, as an independent and primary obligation, indemnify the Owner immediately on demand against any cost, loss or liability it incurs as a result of the Charterer not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by it under any Transaction Document on the date when it would have been due.
3
Protection of Owner
3.1
Continuing Guarantee
This Guarantee is a continuing guarantee and will extend to the ultimate balance of sums payable by any Security Party under the Transaction Documents, regardless of any intermediate payment or discharge in whole or in part.
Page 2

3.2
Reinstatement
If any discharge, release or arrangement (whether in respect of the obligations of any Security Party or any security for those obligations or otherwise) is made by the Owner 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 Guarantee will continue or be reinstated as if the discharge, release or arrangement had not occurred.
3.3
Waiver of defences
The obligations of the Guarantor under this Guarantee will not be affected by an act, omission, matter or thing which, but for this Clause 3.3, would reduce, release or prejudice any of its obligations under this Guarantee (without limitation and whether or not known to it or the Owner) including:

3.3.1
any time, waiver or consent granted to, or composition with, any Security Party or other person;

3.3.2
the release of any other Security Party or any other person under the terms of any composition or arrangement with any creditor of any Security Party;

3.3.3
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 Security Party 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;

3.3.4
any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of a Security Party or any other person;

3.3.5
any amendment, novation, supplement, extension restatement (however fundamental and whether or not more onerous) or replacement of a Transaction Document or any other document or security;

3.3.6
any unenforceability, illegality or invalidity of any obligation of any person under any Transaction Document or any other document or security; or

3.3.7
any insolvency or similar proceedings.
3.4
Immediate recourse
The Guarantor waives any right it may have of first requiring the Owner (or any trustee or agent on its behalf) to proceed against or enforce any other rights or security or claim payment from any person before claiming from the Guarantor under this Guarantee. This waiver applies irrespective of any law or any provision of a Transaction Document to the contrary.
Page 3

3.5
Appropriations
Until all amounts which may be or become payable by the Security Parties under or in connection with the Transaction Documents have been irrevocably paid in full, the Owner (or any trustee or agent on its behalf) may:

3.5.1
refrain from applying or enforcing any other moneys, security or rights held or received by the Owner (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

3.5.2
hold in an interest-bearing suspense account any moneys received from the Guarantor or on account of any of the Guarantor Liabilities.
3.6
Deferral of Guarantor’s rights
Until all amounts which may be or become payable by the Security Parties under or in connection with the Transaction Documents have been irrevocably paid in full and unless the Owner otherwise directs, the Guarantor will not exercise any rights which it may have by reason of performance by it of its obligations under the Transaction Documents or by reason of any amount being payable, or liability arising, under this Guarantee:

3.6.1
to be indemnified by the Charterer;

3.6.2
to claim any contribution from any other guarantor of the obligations of the Charterer under the Transaction Documents;

3.6.3
to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Owner under the Transaction Documents or of any other guarantee or security taken pursuant to, or in connection with, the Transaction Documents by the Owner;

3.6.4
to bring legal or other proceedings for an order requiring the Charterer to make any payment, or perform any obligation, in respect of which any Guarantor has given a guarantee, undertaking or indemnity under Clause 2;

3.6.5
to exercise any right of set-off against the Charterer; and/or

3.6.6
to claim or prove as a creditor of the Charterer in competition with the Owner.
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 Owner by the Charterer under or in connection with the Transaction Documents to be repaid in full on trust for the Owner and shall promptly pay or transfer the same to the Owner or as the Owner may direct for application in or towards satisfaction of, or retention on account for, the Indebtedness in the Owner’s sole discretion.
Page 4

3.7
Additional security
This guarantee is in addition to and is not in any way prejudiced by any other guarantee or security now or subsequently held by the Owner.
4
Additional Payment Obligations
4.1
Indemnity to the Owner as security holder
The Guarantor shall promptly indemnify the Owner on demand against any cost, loss or liability incurred by any of them as a result of:

4.1.1
any failure by the Charterer to comply with its obligations under the Charter;

4.1.2
acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised;

4.1.3
the taking, holding, protection or enforcement of the Transaction Documents;

4.1.4
the exercise of any of the rights, powers, discretions, authorities and remedies vested in the Owner by the Transaction Documents or by law;

4.1.5
any default by any Security Party in the performance of any of the obligations expressed to be assumed by it in the Transaction Documents; or

4.1.6
acting as Owner under the Transaction Documents (otherwise than by reason of the Owner’s gross negligence or wilful misconduct),
together in each case with interest at the Default Rate on the amount demanded from the date of demand until the date of payment, both before and after judgment, which interest shall be compounded with the amount demanded at the end of such periods as the Owner may reasonably select.
4.2
Currency indemnity
If any sum due from the Guarantor under this Guarantee (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:

4.2.1
making or filing a claim or proof against the Guarantor, or

4.2.2
obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings,
the Guarantor shall as an independent obligation, within five (5) Business Days of demand, indemnify the Owner against any documented 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 the Owner at the time of its receipt of that Sum.
Page 5

The Guarantor waives any right it may have in any jurisdiction to pay any amount under this Guarantee in a currency or currency unit other than that in which it is expressed to be payable.
4.3
Amendment costs
If the Guarantor requests an amendment, waiver or consent in relation to any Guarantor Security Document, the Guarantor shall, within five (5) Business Days of demand, reimburse the Owner for the amount of all documented costs and expenses (including legal fees) reasonably incurred by the Owner in responding to, evaluating, negotiating or complying with that request or requirement.
4.4
Enforcement and preservation costs
The Guarantor shall, within three Business Days of demand, pay to the Owner and each other Secured Party the amount of all costs and expenses (including legal fees) incurred by the Owner in connection with the enforcement of, or the preservation of any rights under, any Guarantor Security Document and any proceedings instituted by or against the Owner as a consequence of taking or holding the Guarantor Security Document or enforcing those rights.
4.5
Default interest
If the Guarantor fails to pay any amount payable by it under a this Guarantee on its due date, interest shall accrue on the overdue amount from the due date up to the date of actual payment (both before and after judgment) at the Default Rate. Any interest accruing under this Clause 4.5 shall be immediately payable by the Guarantor on demand by the Owner.
Default interest (if unpaid) arising on an overdue amount will be compounded with the overdue amount at the end of each 45-day period applicable to that overdue amount but will remain immediately due and payable.
4.6
Additional payment obligations under the Charter
This Clause 4 is without prejudice to the Guarantor Liabilities in respect of the Charterer’s obligations under the clauses of the Charter numbered 37 ( Fee and Deposit ),   38 ( Charterhire )   and 40 ( Indemnity )   and under similar provisions in any other Transaction Documents.
5
Application of Moneys
5.1
Moneys received by Owner
All sums which the Owner receives under or in connection with any Guarantor Security Document shall, unless otherwise agreed by the Owner or otherwise provided in the Charter, be applied by the Owner in or towards satisfaction of, or retention on account for, the Guarantor Liabilities in such manner as the Owner may in its discretion determine.
5.2
Suspense account
The Owner may place any money received by it under or in connection with any Guarantor Security Document to the credit of a suspense account on such terms and
Page 6

subject to such conditions as the Owner may in its discretion determine for so long as the Owner thinks fit without any obligation in the meantime to apply that money in or towards discharge of the Indebtedness, and, despite such payment, the Owner may claim against any of the other Security Parties or prove in the bankruptcy, liquidation or insolvency of any of the other Security Parties for the whole of the Indebtedness at the date of the Owner’s demand for payment pursuant to this Guarantee, together with all interest, commission, charges and expenses accruing subsequently.
6
Representations and Warranties
6.1
Representations
The Guarantor makes the representations and warranties set out in this Clause 6 to the Owner.
6.2
Status and due authorisation
The Guarantor is a corporation duly incorporated and validly existing under the laws of its jurisdiction of incorporation with power to enter into this Guarantee and to exercise its rights and perform its obligations under this Guarantee and all corporate and other action required to authorise its execution of this Guarantee and its performance of its obligations hereunder has been duly taken.
6.3
No deductions or withholding
Under the laws of the Guarantor’s jurisdiction of incorporation in force at the date hereof, the Guarantor will not be required to make any deduction or withholding from any payment it may make under this Guarantee.
6.4
Claims pari passu
Under the laws of the Guarantor’s jurisdiction of incorporation in force at the date hereof, the Guarantor’s obligations under this Guarantee will rank at least pad passu with the claims of all of the Guarantor’s other unsecured and unsubordinated indebtedness save for that which is preferred solely by any bankruptcy, insolvency or other similar laws of general application.
6.5
No immunity
In any proceedings taken in the Guarantor’s jurisdiction of incorporation in relation to this Guarantee the Guarantor will not be entitled to claim for itself or any of its assets immunity from suit, execution, attachment or other legal process.
6.6
Governing law and judgments
In any proceedings taken in the Guarantor’s jurisdiction of incorporation in relation to this Guarantee, the choice of English law and arbitral award or (if applicable) any judgment obtained in Hong Kong will be recognised and enforced.
6.7
Validity and admissibility in evidence
As at the date hereof, all acts, conditions and things required to be done, fulfilled and performed in order (a) to enable the Guarantor lawfully to enter into, exercise its
Page 7

rights under and perform and comply with the obligations expressed to be assumed by it in this Guarantee, (b) to ensure that the obligations expressed to be assumed by the Guarantor in this Guarantee are legal, valid and binding and (c) to make this Guarantee admissible in evidence in the jurisdiction of incorporation of the Guarantor, have been done, fulfilled and performed.
6.8
No filing or stamp taxes
Under the laws of the Guarantor’s jurisdiction of incorporation in force at the date hereof, it is not necessary that this Guarantee be filed, recorded or enrolled with any court or other authority in its jurisdiction of incorporation or that any stamp, registration or similar tax be paid on or in relation to this Guarantee.
6.9
Binding obligations
The obligations expressed to be assumed by the Guarantor in this Guarantee are legal and valid obligations, binding on the Guarantor in accordance with the terms of this Guarantee and no limit on any of the Guarantor’s powers will be exceeded as a result of the giving of this Guarantee or the performance by the Guarantor of any of its obligations hereunder.
6.10
No misleading information
To the best of the Guarantor’s knowledge, any factual information provided by any Security Party to the Owner in connection with the Transaction Documents was true and accurate in all material respects as at the date it was provided and is not misleading in any respect.
6.11
No winding-up
The Guarantor has not taken any limited liability company action nor have any other steps been taken or legal proceedings been started or (to the best of the Guarantor’s knowledge and belief) threatened against the Guarantor for its winding-up, dissolution, administration or reorganisation or for the appointment of a receiver, administrator, administrative receiver, trustee or similar officer of it or of any or all of its assets or revenues which might have a material adverse effect on the business or financial condition of the Guarantor.
6.12
Solvency

6.12.1
The Guarantor is able, and does not admit and has not admitted its inability, to pay its debts or has suspended making payments in respect of any of its debts.

6.12.2
The Guarantor has not by reason of actual or anticipated financial difficulties, commenced, or intends to commence, negotiations with one or more of its creditors with a view to rescheduling any of its indebtedness.

6.12.3
The value of the assets of the Guarantor is not less than the liabilities of the Guarantor (taking into account contingent and prospective liabilities).

6.12.4
No moratorium has been, or may, in the reasonably foreseeable future be, declared in respect of any indebtedness of the Guarantor.
Page 8

6.13
No material defaults

6.13.1
Without prejudice to Clause 6.13.2 below, the Guarantor is not in breach or in default under any agreement to which it is a party or which is binding on it or any of its assets for an amount exceeding US$5,000,000 to an extent or in a manner which might have a material adverse effect.

6.13.2
No Termination Event has occurred and is continuing or might reasonably be expected to result from each Security Party’s entry into and performance of each Transaction Document to which such Security Party is a party.
6.14
No material proceedings
No action or administrative proceeding of or before any court, arbitral body or agency which is not covered by adequate insurance or which might have a material adverse effect.
6.15
No breach
The execution of this Guarantee by the Guarantor and the Guarantor’s exercise of its rights and performance of its obligations under this Guarantee do not constitute and will not result in any breach of any agreement or treaty to which the Guarantor is a party which would have a material adverse effect.
6.16
Necessary Authorisations
The necessary authorisations required by the Guarantor are in full force and effect, and the Guarantor is in compliance with the material provisions of each such necessary authorisation relating to it and, to the best of its knowledge, none of the necessary authorisations relating to it are the subject of any pending or threatened proceedings or revocation.
6.17
No money laundering
Any amount guaranteed hereunder, and the performance of the obligations of the Guarantor under this Guarantee, will be for the account of the Guarantor and will not involve any breach by it of any law or regulatory measure relating to “money laundering” as defined in Article 1 of the Directive (2005/60/EC) of the European Parliament and of the Council of the European Communities .
6.18
Disclosure of material facts
The Guarantor is not aware of any material facts or circumstances which have not been disclosed to the Owner and which might, if disclosed, have reasonably been expected to adversely affect the decision of a person considering whether or not to enter into the Transaction Documents.
6.19
No breach of laws

6.19.1
The Guarantor has not breached any law or regulation which breach has or is reasonably likely to have a material adverse effect.
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6.19.2
No labour disputes are current or (to the best of the Guarantor’s knowledge and belief) threatened against the Guarantor which have or are reasonably likely to have a material adverse effect.
6.20
Environmental laws

6.20.1
The Guarantor is in compliance with Clause 7.6 ( Compliance with applicable laws )   and (to the best of the Guarantor’s knowledge and belief) no circumstances have occurred which would prevent such compliance in a manner or to an extent which has or is reasonably likely to have a material adverse effect.

6.20.2
No Environmental Claim has been commenced or (to the best of the Guarantor’s knowledge and belief) is threatened against the Guarantor where that claim has or is reasonably likely, if determined against the Guarantor, to have a material adverse effect.
6.21
Representations and Warranties Limited
The representations and warranties of the Guarantor in this Clause 6 are subject to:

6.21.1
the principle that equitable remedies are remedies which may be granted or refused at the discretion of the court;

6.21.2
the limitation of enforcement by laws relating to bankruptcy, insolvency, liquidation, reorganisation, court schemes, moratoria, administration and other laws generally affecting or limiting the rights of creditors;

6.21.3
the time barring of claims under any applicable limitation acts;

6.21.4
the possibility that a court may strike out provisions for a contract as being invalid for reasons of oppression, undue influence or similar; and

6.21.5
any other reservations or qualifications of law expressed in any legal opinions obtained by the Owner in connection with the Transaction Documents.
6.22
Repetition
Each representation and warranty in this Clause 6 is made by the Guarantor:

6.22.1
on the date of this Guarantee; and

6.22.2
(by reference to the facts and circumstances then existing) on the Delivery Date and each Payment Date ,
except that (i) the representation and warranty contained in Clause 6.8 ( No filings or stamp duty )   shall only be made on the date of this Guarantee and on the Delivery Date, and (ii) the representation and warranty contained in Clauses 6.3 ( No deductions or withholding ),   6.6 ( Governing law and judgments ),   6.7 ( Validity and admissibility in evidence ),   6.11 ( No winding-up ),   6.12 ( Solvency ),   6.13 ( No material defaults ),   6.14 ( No material proceedings )   and 6.18 ( Disclosure of material facts )   shall only be made on the date of this Guarantee.
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7
General Undertakings
The undertakings in this Clause 7 remain in force for the duration of this Guarantee unless otherwise permitted by the Owner.
7.1
Information: miscellaneous
The Guarantor shall supply to the Owner:

7.1.1
promptly upon becoming aware of them, details of any material litigation, arbitration or administrative proceedings which are current, threatened or pending against any Obligor, and which, if adversely determined, are reasonably likely to have a material adverse effect; and

7.1.2
promptly, such further information regarding the financial condition, business and operations of any Security Party as the Owner may reasonably request.
7.2
Maintenance of legal validity
The Guarantor shall comply with the terms of and do all that is necessary to maintain in full force and effect all necessary authorisations required in or by the laws and regulations of its jurisdiction of incorporation and all other applicable jurisdictions, to enable it lawfully to enter into and perform its obligations under this Guarantee and to ensure the legality, validity, enforceability or admissibility in evidence of this Guarantee in its jurisdiction of incorporation and all other applicable jurisdictions.
7.3
Notification of Termination Event
The Guarantor shall promptly, upon becoming aware of the same, inform the Owner in writing of the occurrence of any Termination Event (and the steps being taken to remedy such Termination Event) and, upon receipt of a written request to that effect from the Owner, confirm to the Owner that, save as previously notified to the Owner or as notified in such confirmation, no Termination Event is continuing or if a Termination Event is continuing specifying the steps, if any, being taken to remedy it.
7.4
Claims pari passu
The Guarantor shall ensure that at all times the claims of the Owner against it under this Guarantee rank at least pari passu with the claims of all its other unsecured and subordinated creditors save those whose claims are preferred by any bankruptcy, insolvency, liquidation, winding-up or other similar laws of general application.
7.5
Necessary Authorisations
The Guarantor shall (a) obtain, comply with and do all that is necessary to maintain in full force and effect all necessary authorisations to enable it lawfully to enter into and perform its obligations under this Guarantee and to ensure the legality, validity, enforceability or admissibility in evidence of this Guarantee in its jurisdiction of incorporation and all other applicable jurisdictions, (ii) ensure that no failure to obtain, comply with or maintain any necessary authorisation may cause a material
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adverse effect; and (b) promptly upon request, supply certified copies to the Owner of all necessary authorisations.
7.6
Compliance with applicable laws
The Guarantor shall comply with all applicable laws, including Environmental Laws, to which it may be subject (except as regards anti-corruption and anti-bribery laws to which Clause 7.7 ( Anti-corruption and anti-bribery laws )   below applies) if a failure to do the same may have a material adverse effect.
7.7
Anti-corruption and anti-bribery laws
The Guarantor shall, and shall procure that each of the Security Parties shall, conduct its business in compliance with applicable anti-corruption and anti-bribery laws.
7.8
Environmental compliance
The Guarantor shall, and shall procure that each of the Security Parties will:

7.8.1
comply with any Environmental Law;

7.8.2
obtain, maintain and ensure compliance with all requisite Environmental Approvals; and

7.8.3
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.
7.9
Environmental Claims
The Guarantor shall, and shall procure that each of the Security Parties will, promptly upon becoming aware of the same, inform the Owner in writing of:

7.9.1
any Environmental Claim against the Guarantor which is current, pending or threatened; and

7.9.2
any facts or circumstances which are reasonably likely to result in any Environmental Claim being commenced or threatened against the Guarantor,
where the claim, if determined against the Guarantor, has or is reasonably likely to have a material adverse effect.
7.10
Further assurance
The Guarantor shall at its own expense, promptly take all such action as the Owner may reasonably require for the purpose of perfecting or protecting any of the Owner’s rights with respect to the security created or evidenced (or intended to be created or evidenced) by the Security Documents.
7.11
Other information
The Guarantor will promptly supply to the Owner such financial information and explanations as the Owner may from time to time reasonably require in connection
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with the Security Parties, including the unaudited consolidated annual financial statements of such Security Party soon as such financial statements have been drawn up.
7.12
Inspection of records
The Guarantor will permit the inspection of its financial records and accounts on reasonable notice from time to time during business hours by the Owner or its nominee.
7.13
Merger and demerger
The Guarantor shall not enter into any amalgamation, merger, demerger or corporate restructuring without the prior written consent of the Owner (such consent not to be unreasonably withheld or delayed) unless the Guarantor is the surviving entity of any such amalgamation, merger, demerger or corporate restructuring.
7.14
Change of business
The Guarantor shall not, and will procure that no other Security Party will, without the prior written consent of the Owner, make any substantial change to the general nature of their business from that carried on at the date of this Guarantee.
7.15
“Know your customer” checks
If:

7.15.1
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 Guarantee;

7.15.2
any change in the status of the Guarantor after the date of this Guarantee; or

7.15.3
a proposed assignment or transfer by Owner of any of its rights and obligations under this Guarantee,
obliges the Owner to comply with “know your customer” or similar identification procedures in circumstances where the necessary information is not already available to it, the Guarantor shall promptly upon the request of the Owner supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Owner in order for the Owner 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 Transaction Documents.
7.16
Dividends
Save for the Guarantor or the Charterer, each of the other Security Parties may not pay any dividends or make other distributions to its shareholders without the Owner’s prior written consent.
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7.17
Change of ownership
The Guarantor shall ensure that during the duration of this Guarantee there shall not occur any change in any legal or beneficial ownership (whether direct or indirect) of any shareholding in any Security Party.
8
Payments
8.1
Payments to the Owner
On each date on which the Guarantor is required to make a payment under any Guarantor Security Document, the Guarantor shall make the same available to the Owner for value on the due date at the time and in such funds specified by the Owner as being customary at the time for settlement of transactions in the relevant currency in the place of payment.
8.2
No set-off by Guarantor
All payments to be made by the Guarantor under any Guarantor Security Document shall be calculated and be made without (and free and clear of any deduction for) set-off or counterclaim.
8.3
Business Days
Any payment which is due to be made on a day that is not a Business Day shall be made on the next Business Day in the same calendar month (if there is one) or the preceding Business Day (if there is not).
8.4
Currency of payments

8.4.1
Subject to Clauses 8.4.2 and 8.4.3, any amount payable under this Guarantee is payable in US Dollars.

8.4.2
Each payment in respect of costs, expenses or Taxes shall be made in the currency in which the costs, expenses or Taxes are incurred.

8.4.3
Any amount expressed to be payable in a currency other than US Dollars shall be paid in that other currency.
8.5
Tax gross-up
Clause 38.8 of the Charter shall apply to this Guarantee as if it was incorporated into it with any necessary modifications.
9
Set-Off
The Owner may set off any matured obligation due from the Guarantor under any Guarantor Security Document (to the extent beneficially owned by the Owner) against any matured obligation owed by the Owner to the Guarantor, regardless of the place of payment, booking branch or currency of either obligation. If the obligations are in different currencies, the Owner 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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10
Calculations and Certificates
10.1
Accounts
In any litigation or arbitration proceedings arising out of or in connection with a Transaction Document, the entries made in the accounts maintained by the Owner are prima facie evidence of the matters to which they relate.
10.2
Certificates and determinations
Any certification or determination by the Owner of a rate or amount under any Transaction Document is, in the absence of manifest error, conclusive evidence of the matters to which it relates.
11
Partial Invalidity
If, at any time, any provision of any Guarantor Security 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 nor the legality, validity or enforceability of such provision under the law of any other jurisdiction will in any way be affected or impaired.
12
Remedies and Waivers
No failure to exercise, nor any delay in exercising, on the part of the Owner, any right or remedy under a Transaction Document shall operate as a waiver of any such right or remedy or constitute an election to affirm any Transaction Document. No election to affirm any Transaction Document on the part of the Owner 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 this Guarantee and any other Guarantor Security Document are cumulative and not exclusive of any rights or remedies provided by law.
13
Counterparts
This Deed may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of this Deed.
14
Notices
14.1
Except as otherwise provided for in this Guarantee, all notices or other communications under or in respect of this Guarantee and any other Guarantor Security Document to either party hereto shall be in writing and shall be made or given to such party at the address or facsimile number or email appearing below (or at such other address or facsimile number or email as such party may hereafter specify for such purposes to the other by notice in writing):

14.1.1
In the case of the Guarantor

Address:
154 Vouliagmenis Avenue, 16674 Glyfada, Athens, Greece

Telephone No.:
+30 210 8913520
Page 15


Fax No.:
+30 210 9638404

Email:
sgyftakis@seanergy.gr

14.1.2
In the case of the Owner:

Address:
18/F, CATIC Tower, 212 Jiang Ning Road, Shanghai, PRC

Telephone No.:
(86)-21-2226 2623

Fax No.:
(86)-21-5289 5389

Email:
zhangqiang@chinaleasing.net
A written notice includes a notice by facsimile. A notice or other communication received on a non-working day or after business hours in the place of receipt shall be deemed to be served on the next following working day in such place. Subject always to the foregoing sentence, any communication by personal delivery or letter shall be deemed to be received upon receipt by the addressee and any communication by facsimile shall be deemed to be received upon appropriate acknowledgement by the addressee’s receiving equipment.
14.2
All communications and documents delivered pursuant to or otherwise relating to this Guarantee shall be either in English or accompanied by a certified English translation.
15
Governing Law
This Guarantee and any non-contractual obligations arising from or in connection with it shall in all respects be governed by and interpreted in accordance with English law.
16
Enforcement
16.1
Any dispute, controversy, difference or claim arising out of or relating to this Guarantee, including the existence, validity, interpretation, performance, breach or termination thereof or any dispute regarding non-contractual obligations arising out of or relating to it shall be referred to and finally resolved by arbitration administered by the Hong Kong International Arbitration Centre (HKIAC) under the HKIAC Administered Arbitration Rules in force when the notice of arbitration is submitted.
16.2
The law of this arbitration clause shall be Hong Kong law.
16.3
The seat of arbitration shall be Hong Kong. Unless otherwise agreed by the parties hereto (collectively, the “Parties” and each, a “Party” ), the arbitration tribunal shall consist of three arbitrators and each. Party shall appoint an arbitrator and the two arbitrators so appointed shall select a third arbitrator as the presiding arbitrator.
16.4
The language of the arbitration shall be English.
16.5
The award of the arbitrators shall be final and enforceable and each Party agrees not to contest or seek relief from the award in the courts of any jurisdiction without prejudice to the right of any Party to seek enforcement of any award in the courts of any jurisdiction.
Page 16

16.6
The arbitration tribunal constituted under this Guarantee may consolidate two or more arbitrations hereunder if the arbitration proceedings raise common questions of law or fact.
This Guarantee has been executed on the date stated at the beginning of this Guarantee.
Page 17

Execution
The Guarantor
Signed and delivered
as a Deed
by Seanergy Maritime Holdings Corp.
acting by
Stavros Gyftakis
its duly authorised
Attorney-in-fact
in the presence of:
)
)
)
)
)
)
)
)
 
 
 
 
/s/ Stavros Gyftakis

Witness signature:
/s/ Theodora Mitropetrou
     
Name:
Theodora Mitropetrou
     
Address:
154 Vouligmenis Ave
16674 Glyfada
Greece
     


The Owner
Signed and delivered
as a Deed
by Hanchen Limited
acting by Zhou Qi
its duly authorised Director
in the presence of:
)
)
)
)
)
)
 
 


/s/ Zhou Qi

Witness signature:
/s/ Zhang Qiang      
Name:
Zhang Qiang
     
Address:
18/F, CATIC Tower, 212 Jiang Ning Road, Shanghai, PRC
     


Page 18


Exhibit 4.91
MEMORANDUM OF AGREEMENT: “CHAMPIONSHIP”, IMO NO . 9403516.
This Memorandum of Agreement (‘ Agreement ’) is made this day of 5 November 2018 ( ‘Effective Date’ ) between:
1.
Champion Ocean Navigation Co. Limited , a company duly incorporated and validly existing under the laws of Malta and having its registered address at 147/1, St. Lucia Street, Valletta, VLT 1185, Malta (hereinafter called ‘Seller’ );
2.
Seanergy Maritime Holdings Corp. , a corporation duly incorporated and validly existing under the laws of the Republic of the Marshall Islands and having its registered address at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH96960, Republic of the Marshall Islands (hereinafter called ‘ Guarantor ’); and
3.
Cargill International SA , a company incorporated under the laws of Switzerland and having its registered office at 14 chemin de-Normandie, 1206 Geneva, Switzerland (hereinafter called ‘Buyer’) ,
(the Seller, the Guarantor and the Buyer each a ‘ Party ’ and together the ‘ Parties ’).
WHEREAS
The Seller has agreed to sell, free from all charters, stowaways, encumbrances, mortgages, taxes, maritime liens and any other debts or claims whatsoever, and the Buyer has agreed to buy, upon and subject to the terms and conditions of this Agreement, the Vessel (as defined below).
DEFINITIONS
In this Agreement (including the recitals) the definitions set out above and the following definitions shall apply:
‘ Agreement to Acquire and Charter ’ means an agreement entered into or, as the case may be, to be entered into, between, inter alios , the Buyer and the Financier, in a form and on terms acceptable to the Buyer and the Financier, pursuant to which, inter alia , the Financier shall agree to take delivery of the Vessel from the Buyer, or, as the case may be, the Seller, at the Time of Delivery and to bareboat charter the Vessel to the Buyer (as charterer) on substantially the terms and conditions of the Head-Bareboat Charter.
‘ Approved Scrubber ’ means the exhaust emission abatement system to be installed on the Vessel and as such system is more particularly described in the Scrubber Supply Contract.
‘ Banking Days ’ means days on which banks are open for business in London, Athens, Geneva and New York.
‘ Buyer’s Bank ’ means JPMorgan Chase Bank, N.A. or such other bank or financial institution as may be nominated by the Buyer and approved in writing by the Seller (the Seller’s approval not to be unreasonably withheld).

‘ Buyer’s Counsel’s Estimated Fees ’ means such amount as the Buyer certifies (and which certification shall be binding on the Seller, absent any manifest error) at the Time of Delivery is the estimated total of the Buyer’s counsel’s fees incurred, or expected by the Buyer to be incurred, by the Buyer in connection with the negotiation, execution, delivery and administration of this Agreement and the transactions contemplated hereby, and such amount never to exceed United States Dollars One Hundred Thousand ($100,000).
‘ Buyer’s Nominated Flag State ’ means the Republic of the Marshall Islands.
‘ Cancelling Date ’ means 12 November 2018.
‘ Cash Collateral Account Charge ’ means an account pledge entered into, or, as the case may be, to be entered into, by the Sub-Bareboat Charterer and the Buyer respecting an account in the name of the Sub-Bareboat Charterer at the Cash Collateral Account Bank.
‘ Cash Collateral Amount ’ means United States Dollars One Million Six Hundred Thousand (US$1,600,000).
‘ Cash Collateral Account Bank ’ means Joh. Berenberg, Gossler & Co. KG.
‘ Class ’ means I*HULL*MACH, Bulk Carrier CSR CPS (WBT) BC-A (maximum cargo density 3.00 t/m3; holds 2,4,6 and 8 may be empty), ESP GRAB [30], Unrestricted navigation, *AUT-UMS, NON-SHAFT, INWATERSURVEY.
‘ Classification Society ’ means Bureau Veritas.
‘ Common Stock ’ means the common stock of the Guarantor, par value US$0.0001 per share.
‘ Current Flag State ’ means the Republic of Liberia.
‘ Current Mortgagee ’ means Amsterdam Trade Bank N.V.
‘ Default Rate ’ means for any day, a rate of interest per annum equal to LIBOR in effect on such day plus eight and one-half percent (8.5 %).
‘ Deficiency ’ has the meaning ascribed to it in Clause 3.2.
‘ Definite Delivery Date ’ means the definite delivery date of the Vessel by the Seller to the Delivery Entity (as the nominee of the Buyer) under this Agreement.
‘ Delivery Entity ’ means the Buyer or its nominee subject to, and in accordance, with Clause 19.4.
‘ Delivery Range ’ means in international waters and always within International Navigation Limits.
‘ Escrow Account ’ means an account in the name of the Buyer held at the Buyer’s Bank.
Page 2

‘ Escrow Agreement ’ means the escrow agreement entered into, or, as the case may be, to be entered into, among the Buyer, the Sub-Bareboat Charterer and the Buyer’s Bank pursuant to which the Scrubber Amount (including, for the avoidance of doubt all interest (which interest will accrue in the Escrow Account)) shall be held in the Escrow Account and released by the Buyer’s Bank.
‘ Escrow Fee ’ means an amount equal to one half (1/2) of the Euro Seven Thousand Five Hundred (€7,500) fee payable by the Buyer to WFW pursuant to the Purchase Pre-positioning Arrangements (as converted into a United States Dollar amount by the Buyer at the prevailing exchange rates from EURO into United States Dollars published by Bloomberg on the date on which the Buyer remits an amount equal to the Net Sales Proceeds to the WFW Account (or on such other date prior to such date of remission as the Buyer may in its discretion elect)).
‘ Excluded Items ’ means the items set out in Appendix D.
‘ Financier ’ means CFT Investments 1 LLC with an office at c/o SMBC Leasing and Finance, Inc., 277 Park Avenue, New York, New York 10172 or its successors, assigns and nominees.
‘ Guarantee ’ means an irrevocable and unconditional guarantee (on form and terms acceptable to the Buyer in its sole discretion) issued or, as the case may be, to be issued, by the Guarantor in favour of the Buyer (as the demise owner under the Sub-Bareboat Charter, as the head bareboat charterer and the time charterer under the Multipartite Agreement and as time charterer under the Time Charter) pursuant to which the Guarantor, inter alia , guarantees and indemnifies the Buyer (as demise owner under the Sub-Bareboat Charter, as the head bareboat charterer and the time charterer under the Multipartite Agreement and as time charterer under the Time Charter) in relation to the due, punctual and full performance by: (1) the Sub-Bareboat Charterer of all the Sub-Bareboat Charterer’s (as charterer) obligations arising under or in connection with the Sub-Bareboat Charter; (2) the Sub-Bareboat Charterer of all the Sub-Bareboat Charterer’s (as sub-bareboat charterer) obligations arising under or in connection with the Multipartite Agreement; (3) the Sub-Bareboat Charterer of all the Sub-Bareboat Charterer’s obligations under or in connection with the Cash Collateral Account Charge; and (4) the Sub-Bareboat Charterer of all the Sub-Bareboat Charterer’s (as demise owner) obligations arising under or in connection with the Time Charter.
‘ Head-Bareboat Charter ’ means the bareboat charter party (in a form and on terms acceptable to the Buyer and the Financier) entered into or, as the case may be, to be entered into between the Financier (as owner) and the Buyer (as charterer), pursuant to which the Financier agrees to demise charter the Vessel to the Buyer and the Buyer agrees to take on demise charter the Vessel from the Financier.
‘ Inspection ’ means the inspection of the Vessel and her classification records as referred to in Clause 3.
‘ Installer ’ means Yiu Lian Dockyards (Shekou) Limited, a company incorporated pursuant to the laws of the People’s Republic of China and with an office at Yiu Lian Dockyards (Shekou) Wharfage, Mawan Avenue North, Qianhai, Nanshan District, Shenzhen, Guangdong, People’s Republic of China.
Page 3

‘ ITF ’ means the International Transport Workers’ Federation and any successor organisation.
‘ LIBOR ’ means, as of any day, (i) the applicable 30-day London interbank offered rate per annum for deposits in U.S. Dollars appearing on Bloomberg LIBO Page as of 11:00 a.m., London time on such day for deposits in U.S. dollars or (ii) if such Bloomberg LIBO Page rate is not available at such time for any reason, or if the Bloomberg LIBO Page is not available, the applicable 30-day London interbank offered rate per annum for deposits in U.S. Dollars appearing on pages LIBOR01 or LIBOR02 of the Thomson Reuters screen (or any replacement Thomson Reuters page which displays that rate on the appropriate page of such other information service which publishes that rate from time to time in place of Thomson Reuters) as of 11:00 a.m., London time on such day for deposits in U.S. dollars.  If LIBOR for any day determined pursuant to the preceding sentences is less than zero, LIBOR for that day shall be deemed to be zero.
‘ Listing of Additional Shares Notification ’ the NASDAQ Listing of Additional Shares Notification Form to be submitted electronically with NASDAQ.
‘ Manufacturer ’ means Hyundai Materials Corporation, a corporation organised and existing under the laws of Korea having its principal office at 9F Shin-An Bldg., 512,. Teheran-Ro, Gangnam-gu, Seoul 06179, Korea.
‘ Manufacturer’s Consent ’ means a consent by the Manufacturer to the assignment by the Sub-Bareboat Charterer of the Scrubber Supply Contract Assigned Interests, at the Time of Delivery, to the Buyer (and its successors and assignees) under the Scrubber Supply Contract Assignment, such consent substantially in the form and terms attached at Appendix G (or in such other form and terms acceptable to the Buyer (such acceptability in the Buyer’s sole discretion)).
‘ Multipartite Agreement ’ has the meaning ascribed to it in Clause 18.3.
‘ NASDAQ ’ means the Nasdaq Capital Market.
‘ Net Sales Proceeds’ means an amount equal to the Purchase Price less the Cash Collateral Amount less the Scrubber Amount less the Escrow Fee less the Upfront Fee and less the Reimbursement Amount.
‘ Notice of Readiness ’ has the meaning ascribed to it in Clause 4.1.
‘ Notice of Reassignment of Insurances ’ means a notice of reassignment entered into, or, as the case may be, to be entered by the Current Mortgagee as regards the Vessel’s insurances, in form and on terms acceptable to the Current Mortgagee and the Delivery Entity.
‘ Place of Delivery ’ has the meaning ascribed to it in Clause 4.1.
‘ Protocol of Delivery and Acceptance’ has the meaning ascribed to it in Clause 6.5.
‘ Purchase Pre-positioning Arrangements ’ means the arrangements (in a form and substance acceptable to each of the Buyer and WFW) agreed between the Buyer and WFW pursuant to
Page 4

which the Net Sales Proceeds shall be held and released by WFW (such release in accordance with the Release Instruction and the Purchase Pre-positioning Arrangements).
‘ Purchase Price ’ has the meaning ascribed to it in Clause 1.
‘ Release Instruction ’ means a release instruction in writing from the Buyer to WFW (in a form and substance acceptable to the Buyer and WFW) permitting release of amounts not exceeding in the aggregate an amount equal to the Net Sales Proceeds to the Current Mortgagee and the Seller and, as the case may be, return to the Buyer.
‘ Reimbursement Amount ’ means an amount equal to the Buyer’s Counsel’s Estimated Fees (as converted into a United States Dollar amount by the Buyer at the prevailing exchange rates from the relevant currencies into United States Dollars published by Bloomberg on the date on which the Time of Delivery occurs (or on such other date prior to the date on which the Time of Delivery occurs as the Buyer may in its discretion elect));
‘ RRA ’ means the registration rights agreement entered into between the Buyer and the Guarantor, pursuant to which the Guarantor grants certain rights to the Buyer regarding the Shares, as amended, supplemented or otherwise modified from time to time.
‘ Sanctions ’ means any sanction, restriction or prohibition imposed by any State or Supranational or International Governmental Organisation, including but not limited to the UN, the US and the EU.
‘ Scrubber Amount ’ means United States Two Million Seven Hundred and Fifty Thousand (US$ 2,750,000).
‘ Scrubber Supply Contract ’ means the agreement dated 28 September 2018 and entered into between the Sub-Bareboat Charterer and the Manufacturer pursuant to which, inter alia , the Manufacturer has agreed to supply to the Sub-Bareboat Charterer the Approved Scrubber and to provide engineering support while the Approved Scrubber is being installed on the Vessel by the Installer, a true, correct and complete copy of which is attached at Appendix E.
‘ Scrubber Supply Contract Assignment ’ means an agreement entered into, or, as the case may be, to be entered into, between the Buyer and the Sub-Bareboat Charterer, in a form and on terms acceptable to the Buyer (such acceptability in the Buyer’s sole discretion), pursuant to which the Sub-Bareboat Charterer will, inter alia , at the Time of Delivery assign to the Buyer all of the Sub-Bareboat Charterer’s rights and interests from time to time and/or arising under the Scrubber Supply Contract, substantially in the form and terms attached at Appendix F.
‘ Scrubber Supply Contract Assigned Interests ’ means all of the Sub-Bareboat Charterer’s rights, title and interests from time to time in, and/or arising under, the Scrubber Supply Contract.
‘ Securities Act ’ means the United States Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
‘ Shares ’ means one million eight hundred thousand (1,800,000) shares of the Common Stock.
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‘ Shipyard ’ means the Installer’s Zhoushan shipyard or such other location for the installation of the Approved Scrubber on the Vessel by the Installer, such location as approved in writing by the Buyer (such approval in the sole discretion of the Buyer).
‘ Sub-Bareboat Charter ’ means the bareboat charter party entered into or, as the case may be, to be entered into, between the Buyer (as demise owner) and the Sub-Bareboat Charterer (as sub-bareboat charterer) pursuant to which the Buyer agrees, inter alia, to demise charter the Vessel to the Sub-Bareboat Charterer and the Sub-Bareboat Charterer agrees to take on demise charter the Vessel from the Buyer, substantially in the form and terms attached at Appendix A (or on such other terms as the Buyer and the Seller may agree).
‘ Sub-Bareboat Charterer ’ means Champion Marine Co., a corporation duly incorporated and validly existing under the laws of the Republic of the Marshall Islands and having its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH96960, Republic of the Marshall Islands.
‘ Time Charter ’ means the time charter party entered into or, as the case may be, to be entered into, by the Sub-Bareboat Charterer (as demise owner) and the Buyer (as time charterer) pursuant to which the Sub-Bareboat Charterer agrees to charter the Vessel to the Buyer and the Buyer agrees to take on time charter the Vessel from the Sub-Bareboat Charterer, substantially in the form and terms attached at Appendix C (or on such other terms as the Buyer and the Sub-Bareboat Charterer may agree).
‘ Time of Delivery ’ means the time and date that the Vessel is delivered to, and accepted by, the Delivery Entity under this Agreement as evidenced by the Protocol of Delivery and Acceptance (fully executed, dated and timed).
‘ Transfer Agent ’ means Continental Stock Transfer & Trust Company with an office at 17 Battery Place, New York, NY 10004, USA.
‘ Upfront Fee ’ means an amount equal to United States Dollars One Hundred and Thirty One Thousand Two Hundred and Fifty (US$131,250).
‘ UWI ’ has the meaning ascribed to it in Clause 3.2.
‘ UWI Report ’ has the meaning ascribed to it in Clause 3.2.
‘ Vessel ’ means “CHAMPIONSHIP” with IMO Number 9403516.
‘ Vessel Manager ’ means any managers appointed by the Sub-Bareboat Charterer for the purposes of managing the Vessel and / or providing any management in relation to the Vessel as from the date of delivery of the Vessel into the Sub-Bareboat Charter.
‘ WFW ’ means Watson Farley & Williams LLP of 15 Appold Street, London, EC2A 2HB.
‘ WFW Account ’ means an account at WFW’s bank as more particularly detailed in the Purchase Pre-positioning Arrangements.
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1 .
PURCHASE PRICE
United States Dollars Twenty Six Million Two Hundred and Fifty Thousand Only (US$26,250,000) (‘ Purchase Price ’).
2.
PAYMENT
2.1
At the Time of Delivery the Purchase Price (as adjusted in accordance with the terms and conditions of this Agreement) shall be paid by the Buyer in accordance with the provisions of this Clause 2.
2.2
All amounts to be lodged and/or due and payable by the Buyer or the Seller under this Agreement shall be lodged and/or paid in United States Dollars free of bank charges.
2.3
Subject always to the terms and conditions of this Agreement and subject also to the Purchase Pre-positioning Arrangements having been entered into between the Buyer and WFW, no later than one (1) Banking Day prior to the Definite Delivery Date (as determined by the one (1) Banking Day’s definite notice of Definite Delivery Date as notified by the Seller pursuant to Clause 4.1), the Buyer shall remit to the WFW Account an amount equal to the Net Sales Proceeds.  Amounts not exceeding in the aggregate an amount equal to the Net Sales Proceeds shall be payable and be released to the Current Mortgagee and the Seller (such amounts as set out in the Release Instruction) at the Time of Delivery only against presentation by the Buyer to WFW of an original Release Instruction executed by the Buyer.
2.4
Subject always to the terms and conditions of this Agreement, on the date of delivery of the Vessel to, and acceptance of the Vessel by, the Delivery Entity in accordance with the terms and conditions of this Agreement, but not later than three (3) Banking Days after, and excluding, the date that the Notice of Readiness has been given in accordance with Clause 4, the Buyer shall:

2.4.1
deliver to WFW a dated original Release Instruction executed by the Buyer;

2.4.2
retain an amount equal to the Cash Collateral Amount, which shall be retained by the Buyer as a cash deposit for the performance of the Sub-Bareboat Charterer’s obligations under the Sub-Bareboat Charter (and, for the avoidance of doubt, the release of the Cash Collateral Amount shall be in accordance with the terms of the Sub-Bareboat Charter) and give notice in writing to the Seller of such retention; and

2.4.3
retain an amount equal to the Scrubber Amount, which shall be retained by the Buyer as a cash deposit in accordance with the Sub-Bareboat Charter (and, for the avoidance of doubt, the release of the Scrubber Amount shall be in accordance with the terms of the Sub-Bareboat Charter) and give notice in writing to the Seller of such retention.
2.5
Delivery to WFW of a dated original Release Instruction executed by the Buyer pursuant to Clause 2.4.1, retaining, and giving notice to the Seller of such retention of,
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the amount equal to the Cash Collateral Amount pursuant to Clause 2.4.2 retaining, and giving notice to the Seller of such retention of, an amount equal to the Scrubber Amount pursuant to Clause 2.4.3 shall constitute the full and due performance of the Buyer’s obligation to pay the Purchase Price under this Agreement.
2.6
Notwithstanding Clause 2.2, any costs and/or expenses incurred by the Buyer (A) by reason of the payment of the Net Sales Proceeds to the WFW Account pursuant to Clause 2.4.1 and / or (B) by reason of the Net Sales Proceeds being held by WFW and / or (C) pursuant to the terms of the Purchase Pre-positioning Arrangements and/or (D) by reason of the release of the Net Sales Proceeds from the WFW Account pursuant to the Release Instruction delivered to WFW pursuant to Clause 2.4.1 shall be paid by the Seller.  For the avoidance of doubt, any fees and/or bank charges of the Buyer’s Bank or the Cash Collateral Account Bank in relation to the Cash Collateral Amount, the Cash Collateral Account Charge and / or the Escrow Account shall be payable in accordance with the terms and conditions of, as the case may be, the Cash Collateral Account Charge, the Sub-Bareboat Charter and the Escrow Agreement.
2.7
To assist the Seller and the Guarantor with internal administrative arrangements, the Buyer agrees to provide no later than ten (10) Banking Days after the date on which the Time of Delivery falls, copies of invoices and vouchers evidencing the amount of the Buyer’s Counsel’s Estimated Fees.  In the event that the Buyer fails to provide such invoices and/or vouchers, the Seller and the Guarantor agree that they shall have no claim against the Buyer or the Delivery Entity and neither of the Buyer and the Delivery Entity shall be in default under this Agreement or any other agreement.  The provision by the Buyer of such invoices and / or vouchers shall be without prejudice to the binding nature of the Buyer’s certification at the Effective Date of the amounts of the Buyer’s Counsel’s Estimated Fees.
3.
INSPECTIONS
3.1
The Buyer has inspected and accepted the Vessel’s classification records (evidencing at the time of inspection of the classification records that the Vessel was in Class free of condition and/or recommendation) on 25 October 2018.  The Buyer has also inspected the Vessel at/in Rizhao, China on 3 November 2018 and has accepted the Vessel following this inspection and the sale is outright and definite, subject only to the terms and conditions of this Agreement.
3.2
The Buyer shall have the right to require that the Seller arranges an underwater inspection of the Vessel (‘ UWI ’) before delivery of the Vessel under this Agreement and shall provide or procure that the Classification Society provides the Buyer with a copy of the Classification Society’s report of such inspection (‘ UWI Report ’).  The Seller may not tender Notice of Readiness prior to completion of the UWI and the provision of the UWI Report to the Buyer.  The Seller shall arrange for the UWI to be performed by a diver approved by the Classification Society at a place at which conditions are suitable for such underwater inspection (as determined by the Classification Society).  The UWI shall be carried out without undue delay and in the presence of a Classification Society surveyor arranged for by the Seller and paid for by
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the Seller.  The Buyer’s and the Financier’s representative(s) shall have the right to be present at the UWI as observer(s) only without interfering with the work or decisions of the Classification Society surveyor.  The extent of the UWI and the conditions under which it is performed shall be to the satisfaction of the Classification Society.  Where any defects, damages or deficiencies and/or other items or matters resulting in and/or which are the subject of any recommendation or condition of class (each a “ Deficiency ”) are discovered during the UWI and the Classification Society requires repair of any Deficiency prior to the Vessel’s next dry docking then the Seller shall at the Seller’s own cost and expense promptly remedy any Deficiency to the satisfaction of the Classification Society, and the Seller may not tender Notice of Readiness prior to completion of such repairs to the Classification Society’s satisfaction.  If the Classification Society does not require any Deficiency to be rectified before the Vessel’s next dry docking, the Seller shall be entitled to deliver the Vessel with the Deficiency.
4.
NOTICES, TIME AND PLACE OF DELIVERY
4.1
Subject to Clause 4.2, the Vessel will be delivered to the Delivery Entity safely afloat in the Delivery Range.  The Seller shall give the Buyer not less than one (1) Banking Day’s definite written notice of definite place of delivery and of the Definite Delivery Date.  The Definite Delivery Date shall not be after the Cancelling Date.  When the Vessel is at the place of delivery (‘ Place of Delivery ’) and physically and legally ready for delivery in accordance with this Agreement, the Seller shall give the Buyer a written notice of readiness for delivery (‘ Notice of Readiness ’).  Notice of Readiness shall not be given before 4 November 2018.  The Definite Delivery Date shall not be before the date on which the Notice of Readiness is given and the Definite Delivery Date shall not be after the Cancelling Date.
4.2
If the Buyer (in its sole discretion) notifies the Seller at any time before the Buyer’s receipt of the Notice of Readiness that the Delivery Entity does not wish to take delivery of the Vessel within the territorial waters of the Place of Delivery, the Parties agree that:

4.2.1
if the Buyer requires, the physical delivery of the Vessel shall take place in international waters off or near the Place of Delivery; and

4.2.2
the Seller shall position the Vessel in international waters on such date as the Buyer has notified the Seller as being the date on which the Buyer intends to pay the Purchase Price and the Delivery Entity intends to accept delivery of the Vessel in accordance with the terms of this Agreement.
4.3
For the avoidance of doubt if the Buyer requires the physical delivery of the Vessel to take place in international waters in accordance with Clause 4.2:

4.3.1
the Seller’s compliance with the Buyer’s requirement under Clause 4.2 to deliver the Vessel in international waters shall be without prejudice to any of the Seller’s obligations under this Agreement as to the condition of the Vessel on delivery; and

4.3.2
if, for any reason, following the Seller having given a valid Notice of Readiness the Seller is prevented from positioning the Vessel in international waters in accordance
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with Clause 4.2, all time from the Notice of Readiness until the time that the Vessel is in international waters off or near the Place of Delivery shall not count towards the calculation of time under Clause 2.4 within which the Buyer is to pay the Purchase Price.
5.
BUNKERS, LUBRICATING OILS AND CONSUMABLE STORES
5.1
The Seller shall deliver the Vessel to the Delivery Entity with everything belonging to her, or designated for her, on board, on shore and on order, if any, including, without limitation, all unbroached stores and provisions, spare parts and spare equipment (including spare tail end shaft(s) and / or spare propeller(s) / propeller blade(s), if any, belonging to the Vessel at the time of the Inspection used or unused, whether on board or not) and all radio/communications installations and navigational equipment without extra payment and the Seller shall transfer, or as the case may be, shall procure the transfer of, as at the Time of Delivery all title and interest in the aforesaid equipment, spares, stores and items to the Delivery Entity for no extra payment.  Items on shore and on order (including spares, stores, navigational aids and any other equipment whatsoever) shall be delivered to the Delivery Entity, at the Seller’s expense, to such person and to such address as the Delivery Entity shall notify to the Seller at, or prior to, the delivery of the Vessel to the Delivery Entity under this Agreement.
5.2
Items on board at the time of the Inspection which are on hire or owned by the third parties, and which are not Excluded Items, shall be replaced or procured by the Seller prior to the Time of Delivery at the cost and expense of the Seller.
5.3
The Excluded Items are excluded from the sale of the Vessel.
5.4
All bunkers, unused lubricating and hydraulic oils and greases in storage tanks and unopened and opened drums and/or pails and consumable stores are excluded from the sale and the Seller shall procure that at the Time of Delivery title to all bunkers, unused lubricating and hydraulic oils and greases in storage tanks and unopened drums and/or pails and consumable stores shall pass to the Sub-Bareboat Charterer.
5.5
Library and forms exclusively for use in the Seller’s vessel(s) and captain’s, officers’ and crew’s personal belongings (including the slop chest) are excluded from the sale of the Vessel without compensation.
6.
DOCUMENTATION
6.1
The Seller shall provide or, as the case may be, cause to be provided, the following documentation (all such documentation in forms and on terms satisfactory to the Buyer and the Delivery Entity (such satisfaction always at the Buyer’s and the Delivery Entity’s sole discretion)) to the Buyer in exchange for payment of the Purchase Price (as adjusted under this Agreement) on the delivery of the Vessel to the Delivery Entity in accordance with this Agreement:
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6.1.1
Three (3) original legal bills of sale (‘ Bill(s) of Sale ’) in a form acceptable for registration of the Vessel under the flag of the Buyer’s Nominated Flag State duly executed by the Seller in favour of the Delivery Entity stating that the Vessel is free from any and all charters, stowaways, mortgages, encumbrances, and maritime liens or any other debts, taxes or claims whatsoever, duly notarially attested;

6.1.2
Original commercial invoice in duplicate issued by the Seller to the Buyer showing the full Purchase Price (together with any adjustments pursuant to this Agreement) and a brief description of the Vessel;

6.1.3
Certificates of good standing (or equivalent) of each of the Sub-Bareboat Charterer, the Guarantor, and the Seller, dated not more than five (5) Banking Days prior to the date of delivery of the Vessel to the Delivery Entity under this Agreement;

6.1.4
A certificate of incumbency dated on the date of delivery of the Vessel to the Delivery Entity under this Agreement and signed by a director of the Seller:

(a)
attaching (and certifying as true and complete and as in full force and effect without amendment or supplement on the date of delivery of the Vessel to the Delivery Entity under this Agreement) copies of:

i.
the certificate of registration and memorandum and articles of association(or equivalent constitutional documents) of the Seller and any amendments thereto; and

ii.
the resolutions of the board of directors and the shareholders of the Seller provided pursuant to Clause 6.1.5; and

iii.
the power of attorney of the Seller provided pursuant to Clause 6.1.6; and

(b)
stating the names of all the directors, officers and shareholders of the Seller (and their respective offices/positions/ownership of the shares) and including specimen signatures of all the:

i.
directors, officers and attorney(s)-in-fact of the Seller; and

ii.
authorized signatories and attorney(s)-in-fact of the shareholders of the Seller.

6.1.5
Original notarially attested (as being true and complete copies of the originals) copies of resolutions of the board of directors and of the shareholders of the Seller approving and authorizing the Seller’s entry into this Agreement, and approving the Purchase Price and authorising certain attorney(s)-in-fact to
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execute, inter alia , the Protocol of Delivery and Acceptance and other documents required to be signed by the Seller pursuant to this Agreement , and authorising the execution of the power of attorney as set forth in Clause 6.1.6;

6.1.6
Original power of attorney of the Seller executed pursuant to the above mentioned resolutions of the board of directors and of the shareholders of the Seller authorising certain persons to execute, inter alia , this Agreement, the Protocol of Delivery and Acceptance, and other documents required to be signed by the Seller pursuant to this Agreement, and validly procure the sale transaction and delivery of the Vessel to the Delivery Entity under this Agreement, duly notarially attested;

6.1.7
A certificate of incumbency dated on the date of delivery of the Vessel to the Delivery Entity under this Agreement and signed by an officer of the Guarantor:

(a)
attaching (and certifying as true and complete and as in full force and effect without amendment or supplement on the date of delivery of the Vessel to the Delivery Entity under this Agreement) copies of:

i.
the certificate of incorporation and articles of incorporation and bylaws (or equivalent constitutional documents) of the Guarantor and any amendment thereto; and

ii.
the resolutions of the board of directors and the shareholders of the Guarantor provided pursuant to Clause 6.1.8; and

iii.
the power of attorney of the Guarantor provided pursuant to Clause 6.1.9; and

(b)
stating the names of all the directors and officers of the Guarantor (and their respective offices/ positions/ ownership of the shares) and including specimen signatures of all the directors, officers and attorney(s)-in-fact of the Guarantor.

6.1.8
Original notarially attested (as being true and complete copies of the originals) copies of resolutions of the Guarantor’s board of directors approving and authorizing:

(a)
the Guarantor’s entry into this Agreement, the RRA and the Guarantee;

(b)
the issuance of the Shares; and

(c)
the execution of the power of attorney as set forth in Clause 6.1.9;
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6.1.9
Original power of attorney of the Guarantor executed pursuant to the above mentioned resolutions of the board of directors of the Guarantor authorising certain persons to execute this Agreement, the Guarantee, the RRA and other documents required to be signed by the Guarantor pursuant to this Agreement, the RRA and/or the Guarantee, duly notarially attested;

6.1.10
A certificate of incumbency dated on the date of delivery of the Vessel to the Delivery Entity under this Agreement and signed by an officer of the Sub-Bareboat Charterer:

(a)
attaching (and certifying as true and complete and as in full force and effect without amendment or supplement on the date of delivery of the Vessel to the Delivery Entity under this Agreement) copies of:

i.
the certificate of incorporation and articles of incorporation and bylaws (or equivalent constitutional documents) of the Sub-Bareboat Charterer and any amendment thereto; and

ii.
the resolutions of the board of directors and the shareholders of the Sub-Bareboat Charterer provided pursuant to Clause 6.1.11; and

iii.
the power of attorney of the Sub-Bareboat Charterer provided pursuant to Clause 6.1.12;

(b)
stating the names of all the directors, officers and shareholders of the Sub-Bareboat Charterer (and their respective offices/positions/ownership of the shares in the Sub-Bareboat Charterer) and including specimen signatures of all the:

i.
directors, officers and attorney(s)-in-fact of the Sub-Bareboat Charterer; and

ii.
authorized signatories and attorney(s)-in-fact of the shareholders of the Sub-Bareboat Charterer;

6.1.11
Original notarially attested (as being true and complete copies of the originals) copies of resolutions of the Sub-Bareboat Charterer’s board of directors and of the shareholders of the Sub-Bareboat Charterer approving and authorizing the Sub-Bareboat Charterer’s entry into the Multipartite Agreement, the Sub-Bareboat Charter, the Time Charter, the Scrubber Supply Contract Assignment , the Escrow Agreement and the Cash Collateral Account Charge and other documents required to be signed by the Sub-Bareboat Charterer pursuant to the Multipartite agreement, the Sub-Bareboat Charter, the Time Charter, the Scrubber Supply Contract Assignment , the Escrow Agreement and /or the
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Cash Collateral Account Charge and authorising the execution of the power of attorney as set forth in Clause 6.1.12;

6.1.12
Original power of attorney of the Sub-Bareboat Charterer executed pursuant to the above mentioned resolutions of the board of directors and of the shareholders of the Sub-Bareboat Charterer authorising certain persons to execute the Multipartite agreement, the Sub-Bareboat Charter, the Time Charter, the Scrubber Supply Contract Assignment , the Escrow Agreement and the Cash Collateral Account Charge and other documents required to be signed by the Sub-Bareboat Charterer pursuant to the Multipartite agreement, the Sub-Bareboat Charter, the Time Charter, the Scrubber Supply Contract Assignment, the Escrow Agreement and /or the Cash Collateral Account Charge, duly notarially attested;

6.1.13
Certificate of Ownership and Encumbrances issued by the competent authorities of the Current Flag State on the date of delivery of the Vessel from the Seller and acceptance of delivery by the Delivery Entity under this Agreement, evidencing the Seller’s ownership of the Vessel and that the Vessel is free from registered encumbrances, liens and mortgages, to be e-mailed by such authority to the closing meeting with the original to be sent to the Buyer as soon as possible after delivery of the Vessel to the Delivery Entity under this Agreement;

6.1.14
Original Confirmation of Class or (depending on the Classification Society) class maintenance certificate issued not more than three (3) days prior to the delivery of the Vessel to the Delivery Entity under this Agreement confirming that the Vessel is free of conditions and/or recommendations;

6.1.15
An original permission to sell or consent to deletion (or equivalent document) issued by the competent authorities of the Current Flag State for the sale of the Vessel certifying that the competent authorities of the Current Flag State have no objection to the sale of the Vessel to the Delivery Entity dated not more than ten (10) Banking Days prior to the date of delivery of the Vessel to the Delivery Entity under this Agreement;

6.1.16
A copy of the Vessel’s current ISPS and Continuous Synopsis Record;

6.1.17
An original of the Seller’s letter of confirmation that, to the best of its knowledge, the Vessel is not sanctioned by any nation or international organisation or subject to boycott by the ITF;

6.1.18
An original of the Seller’s letter of confirmation that, to the best of its knowledge, the Vessel has not touched bottom or suffered any bottom damage since her last drydocking;

6.1.19
Original Certificate of Deletion of the Vessel from the registry of the Current Flag State (and, if applicable, the flag state of the Vessel’s bareboat charter
Page 14
registration) or other official evidence of deletion including Closed CSR appropriate to the Vessel’s registry at the time of delivery, or, in the event that the registry does not as a matter of practice issue such documentation immediately, an original of a written undertaking by the Seller to the Delivery Entity and the Buyer to:

(a)
effect deletion from the registry of the Current Flag State (and, if applicable, the flag state of the Vessel’s bareboat charter registration) forthwith and provide an original certificate or other official evidence of deletion to the Delivery Entity promptly and latest within four (4) weeks after the Vessel has been delivered to the Delivery Entity; and

(b)
to provide to the Delivery Entity the copy of the Vessel’s Continuous Synopsis Record certifying the date on which the Vessel ceased to be registered with the registry of the Current Flag State (and, if applicable, the flag state of the Vessel’s bareboat charter registration) promptly upon such certificate being issued;

6.1.20
A copy of the Notice of Reassignment of Insurances executed by the Current Mortgagee;

6.1.21
A Maltese law legal opinion dated on the date of delivery of the Vessel to the Delivery Entity under this Agreement as to the approval of and entry into by the Seller of this Agreement and the transactions contemplated by this Agreement;

6.1.22
A Republic of the Marshall Islands law legal opinion dated on the date of delivery of the Vessel to the Delivery Entity under this Agreement as to the approval of and entry into by the Sub-Bareboat Charterer of the Multipartite Agreement, the Sub-Bareboat Charter, the Time Charter, the Scrubber Supply Contract Assignment, , the Escrow Agreement; the Cash Collateral Account Charge and the transactions contemplated by the Multipartite Agreement, the Sub-Bareboat Charter, the Time Charter, the Scrubber Supply Contract Assignment , the Escrow Agreement and the Cash Collateral Account Charge;

6.1.23
A Republic of the Marshall Islands law legal opinion dated on the date of delivery of the Vessel to the Delivery Entity under this Agreement as to the approval of and entry into by the Guarantor of this Agreement, the Guarantee and the transactions contemplated by this Agreement and the Guarantee;

6.1.24
A Republic of the Marshall Islands law and US law legal opinion, as applicable, dated on the date of delivery of the Vessel to the Delivery Entity under this Agreement from the Guarantor’s outside counsel as to (i) the approval of the RRA and the transactions contemplated by the RRA and the execution and delivery by the Guarantor and enforceability against the Guarantor of the RRA;
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(ii) the due authorization and issuance of the Shares; (iii) no registration of the Shares under the Securities Act; and (iv) no consent, waiver, approval, authorization, order, registration or qualification of or with any court or arbitrator or any governmental or regulatory authority, including the NASDAQ, including the Guarantor’s stockholders, is required for the execution, delivery and performance by the Guarantor of the RRA, and the issuance and delivery by the Guarantor to the Buyer of the Shares as contemplated by this Agreement;

6.1.25
A copy of the Guarantor’s instruction letter to the Transfer Agent duly executed by the Guarantor and instructing the Transfer Agent to issue the Shares in the name of the Buyer;

6.1.26
A copy of the certificate duly executed and delivered by the Transfer Agent to the Buyer, certifying that the Shares have been credited to the Buyer in the Buyer’s account, as registered owner of such shares, maintained on the Transfer Agent’s record; and

6.1.27
Any such additional documents which may be required by the Delivery Entity to register the Vessel under the flag of the Buyer’s Nominated Flag State and/or to transfer ownership of and title to the Vessel to the Delivery Entity provided that the Buyer notifies the Seller in writing of any such requirements as soon as reasonably possible after the date of this Agreement.
6.2
The Buyer shall provide the Seller with, or, as the case may be, procure that the Seller is provided with the following documentation on closing:

6.2.1
A copy of a certificate of good standing of the Delivery Entity issued by the appropriate competent authorities and dated not more than fifteen (15) Banking Days prior to the date of delivery of the Vessel to the Delivery Entity under this Agreement;

6.2.2
Copies of the minutes of the Meeting of the Board of Directors of the Delivery Entity or equivalent evidence of the corporate authority of the Delivery Entity in respect of the acquisition of the Vessel by the Delivery Entity and entry into the power of attorney of the Delivery Entity as set forth below, and authorising certain attorney(s)-in-fact to execute all documents in connection with the acceptance of the Vessel by the Delivery Entity in accordance with this Agreement; and

6.2.3
Power of attorney, or, as the case may be, powers of attorney, of the Buyer and, as the case may be, of the Delivery Entity, authorising certain persons, inter alia, to execute any and all documents required to be executed by the Buyer and / or, as the case may be, by the Delivery Entity in connection with the acceptance of the Vessel by the Delivery Entity and to procure validly the acquisition of the Vessel and the acceptance of the Vessel by the Delivery Entity in accordance with this Agreement, duly notarially attested.
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6.3
The Seller shall provide the Buyer with, or, as the case may be, cause the Buyer to be provided with, copies or drafts (as the case may be) of the documents referred to in Clause 6.1 as soon as possible but in any event not later than two (2) Banking Days prior to the intended date of delivery of the Vessel to the Delivery Entity under this Agreement as notified by the Seller pursuant to Clause 4.1 for the Buyer’s approval and/or comments.
6.4
The Seller shall provide to the Buyer, or, as the case may be, cause the Buyer to be provided with, the following documentation no later than one (1) Banking Day prior to the Definite Delivery Date as notified by the Seller pursuant to Clause 4.1, (failing which the Buyer may cancel this Agreement with immediate effect upon written notice to the Seller and without liability whatsoever on the part of the Buyer):

6.4.1
an original of the Guarantee duly executed by the Guarantor;

6.4.2
an original of the Manufacturer’s Consent duly executed by the Manufacturer;

6.4.3
an original of the Scrubber Supply Contract Assignment duly executed by the Sub-Bareboat Charterer;

6.4.4
an original of the Cash Collateral Account Charge duly executed by the Sub-Bareboat Charterer;

6.4.5
originals of undertakings from all Vessel Manager(s) (including, without limitation, any commercial manager and/or technical manager and, if applicable, any crewing manager) (in forms and on terms satisfactory to the Buyer (such satisfaction always at the Buyer’s sole discretion);

6.4.6
an original of the Sub-Bareboat Charter duly executed by the Sub-Bareboat Charterer;

6.4.7
an original of the Multipartite Agreement duly executed by the Sub-Bareboat Charterer;

6.4.8

6.4.9
an original of the Time Charter duly executed by the Sub-Bareboat Charterer;

an original of the RRA duly executed by the Guarantor; and

6.4.10
an original of the Escrow Agreement duly executed by the Sub-Bareboat Charterer.
6.5
The Seller shall provide to the Buyer, or, as the case may be, cause the Buyer to be provided with:

6.5.1
any such additional documents which may be required by the Buyer (including, without limitation, any documents requested by WFW to enable the release of the Net Sale Proceeds) to enable remission of an amount equal to the Net Sales Proceeds to the WFW account and / or to enable payment of the Purchase Price
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to the Seller (such remission and payment subject always to the terms of Clause 2); and

6.5.2
any such additional documents required by the Financier from the Seller and / or the Sub-Bareboat Charterer in connection with the financing being provided by the Financier to the Buyer,
no later than two (2) Banking Days prior to the Definite Delivery Date failing which the Buyer may cancel this Agreement with immediate effect upon written notice to the Seller (and which cancellation shall be without liability whatsoever on the part of the Buyer).
6.6
The Buyer shall notify the Seller of any such additional documents required by the Buyer, or, as the case may be, the Financier pursuant to Clause 6.5 no later than three (3) Banking Days prior to the intended date of delivery of the Vessel.
6.7
On the delivery of the Vessel to, and the acceptance of the Vessel by, the Delivery Entity under this Agreement, the Seller and the Delivery Entity and (if the Buyer is not the Delivery Entity) the Buyer shall sign a protocol of delivery and acceptance (in duplicate) confirming the date, time and place of delivery to and acceptance of the Vessel by the Delivery Entity substantially in the form and on the terms set out in Appendix B (‘ Protocol of Delivery and Acceptance ’).
6.8
Concurrently with the delivery of the documents to the Delivery Entity in accordance with Clause 6.1, the Seller shall also hand to the Delivery Entity the classification certificate(s) as well as all plans, drawings and manuals (excluding ISM/ISPS manuals) which are on board the Vessel.  Other certificates which are on board the Vessel shall also be handed over to the Delivery Entity unless they are expressly included in the Excluded Items in which event the Delivery Entity shall have the right to take a copy of such certificate.  All other technical documents which may be in the Seller’s possession at the Time of Delivery and/or at any later date shall promptly after the Time of Delivery be forwarded to the Delivery Entity at the Seller’s expense if the Delivery Entity so requests.
6.9
If any documents listed in Clause 6.1, Clause 6.2, Clause 6.4 and/or 6.5, are not in the English language, they shall be accompanied by an English translation by an authorised translator or certified by a lawyer qualified to practice in the country of the translated language.
6.10
Unless otherwise mutually agreed by the Parties, the place of the closing meeting and delivery of documentation shall be at the London offices of the Buyers’ Nominated Flag State.
6.11
It is hereby agreed and acknowledged by the Parties that it shall be a subject to the Buyer’s obligation to pay (or procure payment of) the Purchase Price and the Delivery Entity to take delivery of the Vessel under this Agreement that the Buyer and the Financier enter into the Agreement to Acquire and Charter, and which subject shall be
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lifted by the Buyer no less than three (3) Banking Days after the Effective Date, failing which this Agreement shall (save as provided for in Clause 26) be null and void and no Party shall have any claims against any other Parties.
7.
ENCUMBRANCES
7.1
The Seller hereby warrants that the Vessel, at the Time of Delivery, is free from all charters, stowaways, all encumbrances, mortgages, taxes and maritime liens and any other debts or claims whatsoever (including, without limitation, encumbrances, mortgages and maritime liens and any other debts or claims which may have arisen prior to the Time of Delivery and/or the Delivery Entity taking title to the Vessel), and that the Vessel at the Time of Delivery is free from all arrests, caveats, cautions, prohibitions, detentions and/or similar actions or any other judicial, administrative or private actions, processes or measures whatsoever (including, without limitation, any freezing orders).  Without prejudice to the foregoing, it is a condition of the purchase of the Vessel that the Vessel, at the Time of Delivery, is free from all charters, stowaways, all encumbrances, mortgages, taxes and maritime liens whatsoever.  The Seller hereby irrevocably and unconditionally undertakes to indemnify the Buyer and the Delivery Entity against all consequences (including, without limitation, any claims, damages, losses and/or expenses, whatsoever arising under or in connection with the Agreement to Acquire and Charter or the Head-Bareboat Charter or the Sub-Bareboat Charter) of claims made against the Vessel which have been incurred prior to the Time of Delivery and/or arising as a result of the Vessel not being delivered to the Delivery Entity in accordance with the terms and conditions of this Agreement (including, without limitation, in relation to condition and encumbrances).
7.2
Without prejudice to Clause 7.1, the Seller shall (if requested by the Buyer and/or the Delivery Entity and at the Seller’s cost and expense) assist the Buyer and the Delivery Entity in connection with the settlement of any claim, encumbrance or debt whatsoever arising prior to the Time of Delivery.
8.
TAXES
Subject to the terms of this Clause 8, each Party shall bear its own costs, fees and expenses related to the sale and purchase of the Vessel.  Any taxes, dues, fees and expenses in connection with the sale and delivery of the Vessel to the Delivery Entity under this Agreement shall be for the Seller’s account.  The Seller agrees to arrange and pay all taxes, duties, fees and expenses in connection with the registration of the Vessel under the flag of the Buyer’s Nominated Flag State and, without prejudice to the foregoing, the Seller hereby undertakes to indemnify the Buyer and the Delivery Entity against any and all taxes, duties, fees, expenses and all consequences arising from the Seller failing to so arrange and pay.
9.
CONDITION ON DELIVERY
9.1
The Vessel with everything belonging to her shall be at the Seller’s risk and expense until she is delivered to the Delivery Entity under this Agreement and in accordance
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with the terms of this Agreement.  The Vessel shall be delivered to the Delivery Entity and taken over as she was at the time of the Inspection, fair wear and tear excepted.
9.2
The Vessel shall be delivered free of cargo and free of stowaways and with her Class maintained without condition and/or recommendation and free of average damage affecting the Vessel’s Class, and with the Vessel’s Classification Society certificates and all national and international trading/statutory certificates, as well as all other certificates the Vessel had at the time of the Inspection, valid, clean and unextended without any condition and/or recommendation and/or exemptions whatsoever (save as provided in Appendix H) by the Classification Society or the United States Coast Guard, the Current Flag State or any port state at the Time of Delivery.
9.3
All of the Vessel’s continuous survey cycles shall be fully up to date at the Time of Delivery with no matters outstanding and/or subject to any extension whatsoever and/or conditions and/or recommendations.  The Vessel shall be delivered to the Delivery Entity charter free, free of cargo, free of cargo residue, free of stowaways and with the Vessel’s oil record book being properly completed in accordance with all applicable law and / or regulations.
10.
SCRUBBER INSTALLATION INSPECTION RIGHTS
10.1
The Seller shall procure or, as the case may be, the Seller shall procure that the Sub-Bareboat Charterer procures, that the Installer permits the Buyer throughout the period during which the Approved Scrubber is being installed, to have up to two (2) representatives (at the Buyer’s cost) present at the Shipyard, to observe, supervise and survey installation of the Approved Scrubber.  The Seller shall also procure or, as the case may be, the Seller shall also procure that the Sub-Bareboat Charterer procures, that such representatives shall also be entitled to attend surveys, shop tests and trials.  The Seller shall procure or, as the case may be, the Seller shall procure that the Sub-Bareboat Charterer procures, that the Installer shall extend all facilities and resources (including all necessary information and access) to the Buyer’s representatives to enable them to perform their role effectively.
10.2
The Seller shall, no later than two (2) Banking Days prior to the Definite Delivery Date), provide the Buyer with satisfactory evidence as to the Installer’s agreement to the arrangements set out in this Clause 10, failing which the Buyer may cancel this Agreement with immediate effect upon written notice to the Seller (and which cancellation shall be without liability whatsoever on the part of the Buyer).
11.
DEFAULT BY BUYER
11.1
Should the Purchase Price not be paid in accordance with Clause 2 for any reason other than as a result of, or arising from, a default by the Seller, then this Agreement shall (save as provided for in Clause 26) be treated as null and void and no Party shall have any claims against any other Parties.
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11.2
In the event that this Agreement is treated as null and void pursuant to Clause 11.1, the Buyer alone (and not any nominee appointed pursuant to Clause 19.4) will indemnify the Seller for all documented legal expenses incurred by the Seller in connection with the preparation and negotiation of this Agreement, the Multipartite Agreement, the Sub-Bareboat Charter and the transactions contemplated thereby in an amount never to exceed an aggregate sum of United States Dollars fifty thousand (US$50,000), which shall be the full extent of the liability of the Buyer to the Seller in connection with the Buyer not paying the Purchase Price and/or this Agreement being treated as null and void under Clause 11.1.  For the avoidance of doubt, this Clause 11.2 shall only apply in the event that this Agreement is treated as null and void under Clause 11.1.
12.
DEFAULT BY SELLER/EXTENSION OF CANCELLING DATE
12.1
It is a condition precedent of delivery of the Vessel to, and acceptance of the Vessel by, the Delivery Entity under this Agreement that:

12.1.1
on the Effective Date and at the Time of Delivery the Common Stock of the Guarantor is listed on the NASDAQ and the Guarantor shall not have received from the NASDAQ any notice of non-compliance with any NASDAQ continued listing standards, other than as has been publicly disclosed prior to the date of this Agreement; and

12.1.2
at the Time of Delivery:

(a)
the Shares shall have been duly and validly authorized and issued and delivered to the Buyer and shall be fully paid and non-assessable, free and clear of any pledge, lien, encumbrance, security interest or other claim, including any statutory or contractual pre-emptive rights, rights of first refusal or other similar rights, except as set forth in the RRA;

(b)
the Buyer shall have received legal and beneficial title to the Shares; and

(c)
if required to be filed by the rules and regulations of the NASDAQ, the Guarantor shall have submitted the Listing of Additional Shares Notification to the NASDAQ, and in such instance shall have provided to the Buyer satisfactory evidence of such submission.
12.2
Should the Seller fail to give Notice of Readiness in accordance with Clause 4.1 or fail to be ready to validly complete a legal transfer of the Vessel to the Delivery Entity or otherwise fail to satisfy any condition precedent to delivery (including, if required by the Buyer pursuant to Clause 4.2, delivery in international waters) prescribed under this Agreement on or before the Cancelling Date or the Seller shall otherwise default in the delivery of the Vessel to the Delivery Entity in accordance with the terms of this
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Agreement, the Buyer shall have the right in its option to cancel this Agreement by written notice to the Seller, in which event this Agreement shall (save as provided for in Clause 26) be treated as null and void and the Seller shall have no claims against the Buyer.  If the Seller notifies the Buyer on or before the Cancelling Date that notwithstanding the exercise of due diligence by the Seller the Vessel will, or may, not be delivered to the Delivery Entity in accordance with this Agreement on or before the Cancelling Date, then (i) upon receipt of such notification the Buyer shall have the option (the exercise of such option being at the Buyer’s sole discretion) to immediately cancel this Agreement by written notice to the Seller, and in the event of such cancellation this Agreement shall (save as provided for in Clause 26) be treated as null and void and the Seller shall have no claims against the Buyer; and (ii) without prejudice to the foregoing, the Seller may nominate by email a later Cancelling Date to the Buyer and the Buyer shall declare by email to the Seller whether to cancel or maintain the sale, which declaration shall be made within seven (7) Banking Days after the Buyer’s receipt of the Seller’s nomination by email, and, in the event that the Buyer declares to maintain the sale, the Delivery Entity shall take delivery of the Vessel and the Buyer shall pay the Purchase Price in accordance with the provisions of this Agreement, subject always to the provisions of Clause 2, on or before the expiry of the aforesaid later Cancelling Date, and provided always that the Buyer shall maintain its right to cancel as above but subject to the later Cancelling Date.  If the Buyer has not declared its option within seven (7) Banking Days of receipt of notice from the Seller then this Agreement shall be deemed cancelled and shall (save as provided for in Clause 26) be treated as null and void and the Seller shall have no claims against the Buyer.  If the Seller again states that the Vessel will, or may not, be delivered to the Buyer before the later Cancelling Date, then the provisions hereof shall again apply mutatis mutandis (i.e. making the necessary changes).
12.3
In the event that the Seller is in default under this Agreement, it is agreed that the Seller shall make due compensation to, and indemnify, the Buyer for its direct proven losses (such losses to include, without limitation, any expenses suffered and/or incurred by the Buyer in relation to the Shares and any losses and/or expenses suffered and/or incurred by the Buyer under, or in connection with, the RRA, the Agreement to Acquire and Charter, the Head-Bareboat Charter, the Sub-Bareboat Charter and/or the Time Charter (or any of them as the case may be) and for its expenses, together with interest at the Default Rate on (i) such direct proven losses; and (ii) such expenses, whether or not the Buyer cancels this Agreement.
12.4
Notwithstanding any other term of this Agreement, and in addition to any other obligation of the Seller under this Agreement (including Clause 12.3), if, other than by reason of a material breach by the Buyer of any of its obligations under this Agreement, the Seller fails;

12.4.1
to tender Notice of Readiness on the definite date of Delivery as such date is notified by the Seller;

12.4.2
to be ready to validly complete a legal transfer of the Vessel to the Delivery Entity in accordance with this Agreement on the Definite Delivery Date (as
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determined by the one (1) Banking Day’s definite notice of the Definite Delivery date as notified by the Seller pursuant to Clause 4.1); or

12.4.3
otherwise to satisfy any condition precedent to delivery prescribed under this Agreement;
it is agreed that the Seller shall make due compensation and indemnify the Buyer for any and all expenses suffered and/or incurred by the Buyer in relation to the Shares and any and all losses and / or expenses and / or costs suffered by and / or incurred by the Buyer under, or in connection with, the RRA, the Agreement to Acquire and Charter, the Head-Bareboat Charter and / or any ancillary arrangements in relation to any of the foregoing agreements (including any interest rate swap arrangements from or with other persons (including, but not limited to, the Financier)) as a direct result of any such failures under Clauses 12.4.1 and / or 12.4.3 and/or 12.4.3 by the Seller.
13.
TOTAL LOSS
If the Vessel shall become an actual, constructive or compromised total loss for any reason whatsoever prior to delivery of the Vessel to the Buyer, or, as the case may be, the Delivery Entity, under this Agreement, then either the Seller or the Buyer may terminate this Agreement upon written notice from one to the other without any liability upon the Buyer or the Seller under this Agreement shall (save as provided for in Clause 26) thereupon be treated as null and void.
14.
CONFIDENTIALITY
The sale and purchase of the Vessel under this Agreement and the terms of this Agreement shall be kept private and confidential, save that, the fact of the sale and purchase of the Vessel and/or any of the terms of this Agreement may be disclosed by the Seller if required by any law, decree, regulation or rule applicable to the Guarantor under US securities laws or the rules and regulations of the NASDAQ, provided that the Seller shall first give written notice of such required disclosure to the Buyer prior to the disclosure, and shall have a reasonable period of time to review and comment on any such disclosure).  However, any disclosure of the fact of the sale and purchase of the Vessel and/or any of the terms of this Agreement will not be a reason to cancel this Agreement.
15.
REPRESENTATIONS, WARRANTIES, UNDERTAKINGS AND ACKNOWLEDGEMENTS
15.1
The Seller and the Guarantor each hereby represents, warrants and undertakes to the Buyer and the Delivery Entity at the Effective Date and at the Time of Delivery (or at such other time as set out below) that:

15.1.1
the Seller is duly incorporated and validly existing in good standing under the laws of Malta and has the power to carry on its business as it is now being conducted and to own its property and other assets;
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15.1.2
the Sub-Bareboat Charterer is duly incorporated and validly existing in good standing under the laws of the Republic of the Marshall Islands and has the power to carry on its business as it is now being conducted and to own its property and other assets;

15.1.3
the Guarantor is duly incorporated and validly existing in good standing under the laws of the Republic of the Marshall Islands and has the power to carry on its business as it is now being conducted and to own its property and other assets;

15.1.4
the Seller has the power to execute, deliver and perform its obligations under this Agreement and all necessary corporate action has been taken to authorise the execution, delivery and performance of the same;

15.1.5
the Guarantor has the power to execute, deliver and perform its obligations under this Agreement, the RRA and the Guarantee and all necessary corporate action has been taken to authorise the execution, delivery and performance of the same;

15.1.6
this Agreement constitutes valid, legally binding and enforceable obligations of the Seller;

15.1.7
this Agreement, the RRA and the Guarantee each constitutes valid, legally binding and enforceable obligations of the Guarantor;

15.1.8
the Guarantor was not and is not an ineligible issuer as defined in Rule 405 of the Securities Act for the purposes of Rule 144(i) under the Securities Act;

15.1.9
the Shares, when issued and delivered to the Buyer pursuant to this Agreement, will be duly and validly authorized and issued and fully paid and non-assessable, free and clear of any pledge, lien, encumbrance, security interest or other claim, including any statutory or contractual preemptive rights, rights of first refusal or other similar rights, except as set forth in the RRA; and

15.1.10
no consent, waiver, approval, authorization, order, registration or qualification of or with any court or arbitrator or any governmental or regulatory authority, including the NASDAQ, or any other person, including the Guarantor’s stockholders or lenders, is required for the execution, delivery and performance by the Guarantor of the RRA, and the issuance and delivery by the Guarantor to the Buyer of the Shares as contemplated by this Agreement.
15.2
The Seller and the Guarantor each hereby represents, warrants and undertakes to the Buyer and the Delivery Entity at the Effective Date and at the Time of Delivery that:

15.2.1
the Sub-Bareboat Charterer has the power to execute, deliver and perform its obligations under the Sub-Bareboat Charter, the Time Charter, the Multipartite Agreement, the Scrubber Supply Contract Assignment, the Cash Collateral
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Account Charge, the Escrow Agreement and all necessary corporate action has been taken to authorise the execution, delivery and performance of the same;

15.2.2
the Sub-Bareboat Charter, the Time Charter, the Multipartite Agreement, the Scrubber Supply Contract Assignment, the Cash Collateral Account Charge, the Escrow Agreement each constitutes valid, legally binding and enforceable obligations of the Sub-Bareboat Charterer;

15.2.3
the execution by each of the Seller and the Guarantor of this Agreement and each of the Seller’s and the Guarantor’s compliance with this Agreement will not involve or lead to a contravention of:

(a)
any applicable law or regulation;

(b)
the constitutional documents of each of the Seller and the Guarantor; or

(c)
any contractual or other obligation or restriction which is binding on each of the Seller and the Guarantor or any of their assets.

15.2.4
the execution by the Guarantor of the Guarantee and the RRA and the Guarantor’s compliance with the Guarantee and the RRA will not involve or lead to a contravention of:

(a)
any applicable law or regulation;

(b)
the constitutional documents of the Guarantor; or

(c)
any contractual or other obligation or restriction which is binding on the Guarantor or any of its assets; and

15.2.5
the execution by the Sub-Bareboat Charterer of any of the Sub-Bareboat Charter, the Multipartite Agreement, the Scrubber Supply Contract Assignment the Cash Collateral Account Charge, the Escrow Agreement and the Time Charter and the Sub-Bareboat Charterer’s compliance with the Sub-Bareboat Charter, the Multipartite Agreement, the Scrubber Supply Contract Assignment, the Cash Collateral Account Charge, the Escrow Agreement and the Time Charter will not involve or lead to a contravention of:

(a)
any applicable law or regulation;

(b)
the constitutional documents of the Sub-Bareboat Charterer; or

(c)
any contractual or other obligation or restriction which is binding on the Sub-Bareboat Charterer or any of its assets.

15.3
The Buyer hereby represents, warrants and undertakes to the Guarantor at the Effective Date and at the Time of Delivery that:
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15.3.1
the Buyer is an “Accredited Investor” within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act;

15.3.2
the Buyer is acquiring the Shares from the Guarantor for its own account solely for the purpose of investment and without a view to any resale or other distribution thereof in violation of the Securities Act provided, however , that by making the representations in this Agreement, the Buyer does not agree to hold any of the Shares for any minimum period of time and reserves the right, subject to the provisions of this Agreement and the RRA, at all times to sell or otherwise dispose of all or any part of such Shares pursuant to an effective registration statement under the Securities Act or under an exemption from such registration and in compliance with applicable federal and state securities laws;

15.3.3
the Buyer, either alone or together with its representatives, has sufficient knowledge and experience in business and financial matters so as to be able to evaluate the risks and merits of its investment in the Guarantor and it is able financially to bear the risks thereof;

15.3.4
the Buyer has not been offered any of the Shares by any means of general solicitation or advertising, including any of the following:

(a)
other communication published in any newspaper, magazine, or similar media or broadcast over television or radio; or

(b)
any seminar or meeting whose attendees have been invited by general solicitation or advertising;

15.3.5
the Buyer had access to such information regarding the Guarantor and its affairs as is necessary to enable it to evaluate the merits and risks of an investment in the Shares.
15.4
The Buyer acknowledges that:

15.4.1
the Shares are “restricted securities,” as defined in Rule 144 under the Securities Act and have not been registered under the Securities Act or any applicable US state securities law;

15.4.2
in connection with any transfer of the Shares other than (i) pursuant to an effective registration statement, (ii) to the Guarantor, or (iii) in connection with a bona fide pledge as contemplated in Clause 15.5 below, the Guarantor may require the transferor thereof to provide to the Guarantor an opinion of counsel selected by the transferor and reasonably acceptable to the Guarantor, the form and substance of which opinion shall be reasonably satisfactory to the Guarantor and the Transfer Agent, to the effect that such transfer does not require registration of such transferred Shares under the Securities Act; and

15.4.3
each certificate for the Shares shall have conspicuously written, printed, typed or stamped upon the face thereof, or upon the reverse thereof with a
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conspicuous reference on the face thereof, the following legend: “THE SHARES OF COMMON STOCK REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY STATE SECURITIES OR BLUE SKY LAWS, AND MAY NOT BE OFFERED FOR SALE, SOLD, OR OTHERWISE TRANSFERRED OR ASSIGNED, IN THE ABSENCE OF (I) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND COMPLIANCE WITH SUCH STATE LAWS OR (II) AN APPLICABLE EXEMPTION THEREFROM AND AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER THAT SUCH REGISTRATION IS NOT REQUIRED.  NOTWITHSTANDING THE FOREGOING, THE SHARES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SHARES.”.
15.5
The Guarantor acknowledges and agrees that the Buyer may from time to time pledge, and/or grant a security interest in, some or all of the Shares in connection with applicable securities laws, pursuant to a bona fide margin agreement in compliance with a bona fide margin loan.  Such a pledge would not be subject to approval or consent of the Guarantor and no legal opinion of legal counsel to the pledgee, secured party or pledgor shall be required in connection with the pledge, but such legal opinion shall be required in connection with a subsequent transfer or foreclosure following default by the Buyer transferee of the pledge.  No notice shall be required of such pledge, but Buyer’s transferee shall promptly notify the Guarantor of any such subsequent transfer or foreclosure.  At the Buyer’s expense, the Guarantor will execute and deliver such reasonable documentation as a pledgee or secured party of the Shares may reasonably request in connection with a pledge or transfer of the Shares, including the preparation and filing of any required prospectus supplement under Rule 424(b)(3) of the Securities Act or other applicable provision of the Securities Act to appropriately amend the list of selling stockholders thereunder.
15.6
The Buyer acknowledges and agrees that, except as otherwise provided in Clause 15.4.2, any Shares subject to a pledge or security interest as contemplated by Clause 15.5 shall continue to bear the legend set forth in Clause 15.4.3 and be subject to the restrictions on transfer set forth in Clause 15.4.2.
16.
NOTICES
All notices, nominations, declarations or other communications under this Agreement shall be given in writing and shall be made as follows:
To the Seller:

Address:
Champion Ocean Navigation Co. Limited
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Attention:
c/ o Seanergy Management Corp.

154 Vouliagmenis Avenue,

16674 Glyfada, Athens, Greece

Mr. Stavros Gyftakis

Tel. No:
+30 210 8913 520

E-Mail:
sgyftakis@seanergy.gr
To the Guarantor:

Address:
Seanergy Maritime Holdings Corp.

c/ o Seanergy Management Corp.

154 Vouliagmenis Avenue,

16674 Glyfada, Athens, Greece

Attention:
Mr. Stamatios Tsantanis

Tel. No:
+30 210 8913 507

E-Mail:
snt@seanergy.gr
To the Buyer:

Address:
Cargill International SA
14 Chemin de Normandie
1206 Geneva
Switzerland

Attention:
George Wells

Tel. No:
+41 22 703 2111

E-Mail:
George_Wells@cargill.com
otprojects@cargill.com
Olivier_demierre@cargill.com
Ann_shazell@cargill.com
Keith_dawe@cargill.com
Bernd_Bachmann@cargill.com
Kyriakos_attikouris@cargill.com
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17.
ENTIRE AGREEMENT
17.1
This Agreement, its Appendices and any attachments to this Agreement and its Appendices constitute the entire agreement between the Parties concerning the subject matter hereof and shall supersede all previous written and oral communications between the Parties concerning the subject matter of this Agreement.
18.
CHARTERING OF THE VESSEL
18.1
The Parties acknowledge that upon delivery of the Vessel to the Delivery Entity under this Agreement, pursuant to the Agreement to Acquire and Charter the Vessel shall be bareboat chartered by the Financier to the Buyer on the terms of the Head-Bareboat Charter.
18.2
The Parties hereby agree that upon delivery of the Vessel to the Buyer under the Head-Bareboat Charter and acceptance of such delivery by the Buyer under the Head-Bareboat Charter, the Vessel shall be sub-chartered as follows:

18.2.1
by the Buyer to the Sub-Bareboat Charterer on the terms of the Sub-Bareboat Charter; and

18.2.2
by the Sub-Bareboat Charterer to the Buyer on the terms of the Time Charter.
18.3
The obligation of the Financier to accept delivery of the Vessel under the Agreement to Acquire and Charter and the obligation of the Buyer to pay the Purchase Price under this Agreement, are each conditional upon the Sub-Bareboat Charterer accepting and taking delivery of the Vessel under the Sub-Bareboat Charter pursuant to Clause 18.2.  The Buyer and the Seller hereby agree that the Buyer shall and the Seller shall procure that the Sub-Bareboat Charterer will, enter into a multipartite agreement on such form and terms as the Buyer, the Sub-Bareboat Charterer and the Financier may agree, together with the Financier, prior to delivery of the Vessel to the Delivery Entity under this Agreement (‘ Multipartite Agreement ’).
19.
ASSIGNMENT AND NOMINATION
19.1
The Seller may not assign this Agreement without the prior written consent of the Buyer.
19.2
The Buyer shall have the right, by assignment, novation or otherwise, to transfer this Agreement (in respect of all its rights and obligations under this Agreement) before delivery of the Vessel to the Delivery Entity under this Agreement:

19.2.1
to its financiers (or any subsidiary thereof) or its nominee for the purpose of securing the Buyer’s financing; and/or

19.2.2
to any subsidiary or parent of the Buyer, and/or any subsidiary or parent of that parent company.
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19.3
In cases other than those described in Clause 19.2 above, the Buyer shall have the right, by assignment, novation or otherwise, to transfer this Agreement (in respect of all its rights and obligations under this Agreement) before delivery of the Vessel to the Delivery Entity under this Agreement with the prior written consent of the Seller (such consent not to be unreasonably withheld).
19.4
The Buyer shall also have the right to appoint a nominee (being the Financier or another affiliate or subsidiary of Sumitomo Mitsui Banking Corporation) for the purposes of accepting delivery of the Vessel under this Agreement and for receiving the relevant delivery documents and certificates prior to the delivery of the Vessel to the Buyer under this Agreement and if so done, the Seller will deliver the Vessel in favour of such nominee (as the “Delivery Entity”) and issue, or, as the case may be, procure the issue of, all relevant delivery documents and certificates accordingly.  The form and terms of such nomination shall always be at the Buyer’s sole discretion.
20.
INTERPRETATION
20.1
In this Agreement headings are inserted for convenience only and shall not affect the construction of this Agreement.
20.2
In this Agreement ‘in writing’ or ‘written’ means a letter signed by, or an email from, an authorized representative of the Seller or the Buyer or, as the case may be, the Delivery Entity and delivered by the Seller or the Buyer or, as the case may be, the Delivery Entity to the other (or by their respective authorized brokers, agents or representatives).
20.3
In this Agreement, references to “Clause” and “Appendix” are to the relevant Clauses and Appendices of this Agreement.
21.
AGENCY
21.1
Nothing in this Agreement is intended to, or shall be deemed to, establish any partnership or joint venture between any of the Parties, constitute any Party the agent of another Party, or authorise any Party to make or enter into any commitments for or on behalf of any other Party.
21.2
Each Party confirms it is acting on its own behalf and not for the benefit of any other person.
22.
SANCTIONS
22.1
For the purposes of this Clause 22:

22.1.1
‘Competent Authority’ means the competent authorities of any State or Supranational or International Governmental Organisation including but not limited to those of the UN, the US, and the Member States of the EU in respect of Sanctions; and

22.1.2
‘Longstop Date’ means 26 November 2018.
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22.2
Each Party represents and warrants to the other that it is not in breach of any Sanctions (including but not limited to being made subject to an asset freeze by the EU and/or being placed on the SDN List of the United States Office of Foreign Assets Control).
22.3
No Party shall be in breach of its obligations or otherwise be liable to the other Party save as provided for in this Clause 22 if:

22.3.1
the latter Party is or becomes subject to Sanctions (including but not limited to being made subject to an asset freeze by the EU and/or being placed on the SDN List of the United States Office of Foreign Assets Control); and/or

22.3.2
proceeding with the transaction (or any part thereof) contemplated by this Agreement would place the former Party or the Delivery Entity in breach of Sanctions.
22.4
If, in the reasonable opinion of the Buyer, a circumstance as more particularly described in Clause 22.3 may have occurred and be continuing, the Buyer may suspend performance of any obligation of the Buyer under this Agreement (including, without limitation, acceptance of delivery of the Vessel by the Delivery Entity from the Seller or making any payment to the Seller or the WFW Account), for a reasonable period (which period, shall include, but not be limited to, such time as may reasonably be required to: (i) decide whether it is necessary to obtain a determination from any relevant Competent Authority; and / or (ii) if applicable, obtain a determination from any relevant Competent Authority).
22.5
If the Buyer suspends performance of its obligations (or any of them) under this Agreement pursuant to this Clause 22, the Seller shall provide all reasonable assistance to the Buyer for the purpose of the Buyer: (i) deciding whether it is necessary to obtain a determination from any relevant Competent Authority; and / or (ii) if applicable, obtaining a determination from any relevant Competent Authority.
22.6
Notwithstanding anything to the contrary in this Clause 22, if, pursuant Clause 22.4, the Buyer suspends performance of any of its obligations under this Agreement (i) the Cancelling Date shall not be extended and (ii) if such suspension is in place or continuing on and/or after the Longstop Date, the Buyer shall be under no obligation to perform any obligation of the Buyer under this Agreement (including, without limitation, accepting delivery of the Vessel by the Delivery Entity from the Seller or making any payment to the Seller or making any payment to the WFW Account) and may elect to cancel this Agreement.
22.7
If the Buyer cancels this Agreement pursuant to this Clause 22, this Agreement shall (save as provided in Clause 26) become null and void and no Party shall have any liability whatsoever to any other Party.
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23.
GUARANTEE
23.1
The Guarantor hereby unconditionally and irrevocably guarantees (as primary obligor and not merely as surety) to the Buyer and/or the Delivery Entity , as a continuing obligation, (i) the due and punctual performance and observance by the Seller of all the terms and conditions of this Agreement and all of the Seller’s obligations under this Agreement and (ii) the due and punctual payment and discharge of all monies whatsoever which may from time to time fall due to be paid by the Seller to the Buyer and/or the Delivery Entity (including, without limitation, any amount payable by way of damages for breach of any of the terms and/or conditions of this Agreement).
23.2
The Guarantor as primary obligor and not merely as surety, and as a separate and independent obligation and liability from its obligations and liabilities under Clause 23.1, shall indemnify and keep indemnified and hold harmless the Buyer and/or the Delivery Entity in full and on demand from and against all and any losses, costs and expenses suffered or incurred by the Buyer and/or the Delivery Entity (except those resulting solely from the Buyer’s proven failure to comply with its obligations under this Agreement):

23.2.1
arising out of, or in connection with any breach or non-performance of, or noncompliance by the Seller with any of the Seller’s obligations under this Agreement or any breach of applicable law; or

23.2.2
as a result of the Seller’s obligations under or pursuant to this Agreement being or becoming void, voidable, unenforceable, invalid, illegal or ineffective against the Seller for any reason whatsoever.
23.3
The obligations of the Guarantor under this Clause 23 shall not be subject to any counter-claim, set-off, reduction, deferment or defence and shall not be discharged as a result of any time or indulgence granted to the Seller under this Agreement or by any action taken under this Agreement.
23.4
The Guarantor hereby confirms that its obligations under this Clause 23 shall not be discharged by any addendum and/or variation to this Agreement, and agrees to guarantee the due and punctual performance of the Seller’s obligations under or in connection with this Agreement as so amended and/or varied in accordance with the terms of this Clause 23.
24.
COUNTERPARTS
This Agreement may be executed in counterparts each of which when executed and delivered shall constitute an original of this Agreement, but all the counterparts shall together constitute the same agreement.  No counterpart shall be effective until each Party has executed at least one counterpart.  A signed copy received in pdf format shall be deemed to be an original.
Page 32

25.
LAW AND ARBITRATION
This Agreement and/or any non-contractual obligations arising out of or in connection with it shall be governed by and construed in accordance with English law and any dispute arising out of or in connection with this Agreement, same shall be referred to arbitration in London in accordance with the Arbitration Act 1996 or any statutory modification or re-enactment thereof save to the extent necessary to give effect to the provisions of this Clause 25.  The reference shall be to a single arbitrator to be appointed by the Parties.  If the Parties cannot agree upon the appointment of a single arbitrator, the dispute shall be referred to three arbitrators, each Party appointing one arbitrator with written notice of such appointment to the other Party, and the Parties shall request the London Maritime Arbitrators’ Association to appoint the third arbitrator.  If either of the arbitrators appointed by the Parties refuses or is incapable of acting, the Party who appointed him shall appoint a new arbitrator in his place.  If one of the Parties fails to appoint an arbitrator, either originally or by way of substitution, within fourteen (14) days after the date of the other Party’s written notice of its appointed arbitrator, the Party that has appointed its arbitrator in accordance with this Clause 25, shall request the London Maritime Arbitrators Association also to appoint an arbitrator on behalf of the Party that has failed to appoint its own arbitrator.  The award rendered by the arbitral tribunal shall be final and binding upon the Parties and may, if necessary, be enforced by a court of competent jurisdiction or any other competent authority in the same manner as a judgment of a court.  For the purposes of this Clause 25 the Seller and the Guarantor shall be deemed to be one Party and this Clause 25 shall be read and construed accordingly.
26.
RIGHTS ON TERMINATION
Notwithstanding any other provision of this Agreement, in the event that this Agreement is terminated, expires and/or becomes null and void for any reason, the Parties unconditionally and irrevocably agree that the following Clauses shall continue (or as the case may be shall be deemed to continue) in full force and effect:
Clause 11 (Default by Buyer);
Clause 12 (Default by Seller / Extension of Cancelling Date);
Clause 14 (Confidentiality);
Clause 16 (Notices);
Clause 22 (Sanctions);
Clause 23 (Guarantee); and
Clause 25 (Law and Arbitration).
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27.
RIGHTS OF THIRD PARTIES
Save as expressly provided in this Agreement any person (other than the Delivery Entity) who is not a party to this Agreement shall not have any rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Agreement.


Page 34

DULY EXECUTED BY THE PARTIES HERETO TO BE EFFECTIVE ON THE DATE SET FORTH ABOVE.
FOR THE SELLER
 
FOR THE BUYER
 
       
CHAMPION OCEAN NAVIGATION CO. LIMITED
 
CARGILL INTERNATIONAL SA
 
       
By:
/s/ Stavros Gyftakis
 
By:
/s/ George Wells
 
Name:
Stavros Gyftakis
 
Name:
George Wells
 
Title:
Attorney-in-fact
 
Title:
Assistant Vice President
 


FOR THE GUARANTOR
     
       
SEANERGY MARITIME HOLDINGS CORP.
     
       
By:
/s/ Stavros Gyftakis
       
Name:
Stavros Gyftakis
       
Title:
Attorney-in-fact
       


[Signature Page to MOA — “CHAMPIONSHIP”]

APPENDIX A
Form and Terms of Sub-Bareboat Charter





Page 36

EXHIBIT B
BAREBOAT CHARTER AGREEMENT “CHAMPIONSHIP” (IMO NO. 9403516)
Dated as of [●] 2018 Between
CARGILL INTERNATIONAL SA
as Owner,
and
CHAMPION MARINE CO.
as Charterer
i

TABLE OF CONTENTS
   
Page
1.
CONDITION PRECEDENT
2
2.
TIME CHARTER
2
3.
CHARTER TERM
2
4.
DELIVERY; REDELIVERY
3
5.
CHARTER HIRE
8
6.
USE; OPERATIONS
12
7.
MAINTENANCE AND OPERATION
19
8.
ALTERATIONS
22
9.
INSURANCE-GENERAL
24
10.
LIENS
28
11.
MORTGAGES; FINANCING; SUBORDINATION
29
12.
END OF CHARTER AND OTHER OPTIONS
30
13.
REPRESENTATIONS AND WARRANTIES; OWNER COVENANTS
34
14.
ASSIGNMENT; SUB-BAREBOAT CHARTER
35
15.
LOGO AND VESSEL NAMES
36
16.
NOTICES
36
17.
DEFAULTS; REMEDIES
37
18.
INDEMNIFICATION, WITHHOLDING AND CERTAIN AGREEMENTS
43
19.
INCOME TAX
47
20.
LAW AND JURISDICTION
47
21.
SALVAGE
48
22.
WAR
48
23.
ASSIGNMENT OF INSURANCES
49
24.
CHANGE OF OWNERSHIP
49
25.
WAIVER
50
26.
NO REMEDY EXCLUSIVE
50
27.
ENTIRE AGREEMENT; AMENDMENT
50
28.
COUNTERPARTS
50
29.
SEVERABILITY
50
30.
CAPTIONS
50
31.
BINDING EFFECT
51
32.
INTERPRETATION
51

Exhibits
Exhibit A - Basic Charter Hire
Exhibit A-1 - Loss Value, Purchase Price and Floor Price Schedule
Exhibit B – Notice of Assignment of Insurances
Exhibit C – Agreed form of Time Charter
Exhibit D - Scrubber Supply Contract

BAREBOAT CHARTER AGREEMENT “CHAMPIONSHIP” (IMO NO. 9403516)
This Bareboat Charter Agreement “CHAMPIONSHIP” (the “ Charter ”) is made the [●], 2018 by and between Cargill International SA, a company incorporated pursuant to the laws of Switzerland (the “ Owner ”), and Champion Marine Co. a company incorporated pursuant to the laws of the Republic of the Marshall Islands (the “ Charterer ”).
(The Owner and the Charterer, each a “ Party ” and together, the “ Parties ”)
RECITALS
WHEREAS, Champion Ocean Navigation Co. Limited (as seller, “ Seller ”) and the Owner (as buyer) have entered into a memorandum of agreement dated [●] 2018 (as amended, modified and supplemented from time to time, the “MOA”) whereby the Owner has agreed to purchase the Liberian flagged bulk carrier “CHAMPIONSHIP” with IMO number 9403516 (the “ Vessel ”) from the Seller under the terms and conditions set forth therein and pursuant to which the Owner has nominated CFT Investments 1 LLC (the “ Head Owner ”) (as the nominee of the Owner) pursuant to a nomination notice dated [●] 2018 to acquire title to, and take delivery of, the Vessel thereunder.
WHEREAS, the Owner, Sumitomo Mitsui Banking Corporation and the Head Owner, have entered into an Agreement to Acquire and Charter “CHAMPIONSHIP” (IMO No. 9403516) dated as of [●]2018 (as amended, supplemented or otherwise modified from time to time, the “ Agreement to Acquire ”) whereby the Head Owner has agreed to acquire the Vessel and bareboat charter the Vessel to the Owner and the Owner has agreed to cause title to the Vessel to be transferred directly to the Head Owner.
WHEREAS, the Owner, the Head Owner, the Time Charterer (as defined below) and the Charterer have entered into a multipartite agreement dated as of [●] 2018 (as amended, supplemented or otherwise modified from time to time, the “ Multipartite Agreement ”)   whereby, inter alia, the Charterer agrees this Charter shall be subordinated to the Head Owner’s interests under the Bareboat Charter (as defined below).
WHEREAS, immediately subsequent to delivery of the Vessel under this Charter, the Vessel will be duly documented in the name of the Head Owner as owner thereof under the laws and flag of the Republic of the Marshall Islands (the “ Flag State ”) under Official No. 8217.
WHEREAS, the Head Owner has agreed to bareboat charter the Vessel to the Owner after its delivery on terms agreed between them (the “ Bareboat Charter ”) on the date of this Charter.
WHEREAS, upon delivery of the Vessel to the Owner under the Bareboat Charter, the Owner and the Charterer desire for the Owner to sub-bareboat charter the Vessel to the Charterer to be used to carry bulk cargoes.
WHEREAS, the Owner and the Charterer desire for the Charterer to let the Vessel out on hire under a time charter dated as of [●] 2018 in the form appended at Exhibit C hereto (as amended, supplemented or otherwise modified from time to time, the “ Time Charter ”) to the

Owner as time charterer (in such capacity, the “ Time Charterer ”) upon taking delivery of the Vessel hereunder, the Time Charter to be of equal duration to this Charter.
WHEREAS, as security for the due and punctual performance of, inter alia , the Charterer’s obligations under this Charter, Seanergy Maritime Holdings Corp. a company incorporated in the Republic of the Marshall Islands (the “ Guarantor ”), has guaranteed, inter alia , the obligations of the Charterer under this Charter pursuant to a guarantee dated [●] 2018 in favour of the Owner (as may be amended, supplemented or otherwise modified from time to time, the “ Guarantee ”).
WHEREAS, the Scrubber Amount (as such term is defined below) is held, or, as the case may be, is to be held, in an account (the “ Escrow Account ”) in the name of the Owner held with JPMorgan Chase Bank, N.A. (the “ Escrow Bank ”) and held, or, as the case may be, is to be held, in accordance with arrangements (the “ Escrow Agreement ”) agreed among, the Owner, the Charterer and the Escrow Bank.  The funds without limitation, including the Scrubber Amount, held by the Owner’s Bank pursuant to the Escrow Agreement in the Escrow Account from time to time less any interest accrued thereon, hereinafter the “ Escrow Standing Amount ”.
NOW THEREFORE, in consideration of the mutual promises, covenants and conditions contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Owner and the Charterer agree as follows:
1.     Condition Precedent .
It shall be a condition precedent to this Charter that the Head Owner shall have accepted and taken delivery of the Vessel under the MOA, and that the Owner shall have accepted and taken delivery of the Vessel under the Bareboat Charter failing which any and all obligations hereunder of either Party toward the other shall be null and void and of no effect.
2     Time Charter.
It is hereby agreed between the Parties that, upon the Owner’s confirmation to the Charterer of the delivery of the Vessel to the Owner under the Bareboat Charter, and the delivery of the Vessel hereunder, the Charterer and the Owner automatically without further action by either the Charterer or the Owner shall be deemed to have entered into the Time Charter.
3.     Charter Term.
(a)   Subject to the terms and conditions of this Charter, the Owner hereby charters and demises to the Charterer and the Charterer hereby hires, and takes on demise, from the Owner, the Vessel.  Except as otherwise provided in this Charter, the term of this Charter (the “ Charter Term ”) shall continue from (x) the date of delivery of the Vessel to the Head Owner as nominee of the Owner by the Seller, delivery by the Head Owner to the Owner under the Bareboat Charter and delivery by the Owner to the Charterer hereunder in accordance with the terms of Section 4(a) (the date of such occurrence being herein called the “ Delivery Date ”) up to and through (y) the date falling sixty (60) months following the Delivery Date.

(b)   There shall be no extension of this Charter beyond the initial sixty (60) month term described in Section 3(a).
4.     Delivery; Redelivery.

(a)
Delivery .  (i) Delivery of the Vessel under this Charter will take place simultaneously with delivery of the Vessel by the Head Owner to the Owner under the Bareboat Charter.  For the avoidance of doubt, the Owner shall not be liable for any delay in delivery of the Vessel.  Delivery of the Vessel to the Owner by the Head Owner under the Bareboat Charter shall be deemed to constitute (i) full performance by the Owner of its obligations to deliver the Vessel to the Charterer hereunder (including, without limitation, in relation to the condition and/or class of the Vessel at delivery) and (ii) acceptance by the Charterer of the same.  The Vessel shall be delivered to the Charterer with all documentation relating to the operation of the Vessel and its equipment that the Owner receives from the Seller pursuant to the MOA and/or from the Head Owner pursuant to the Bareboat Charter, including, to the extent received by the Owner pursuant to the MOA, technical and operating manuals, construction drawings, specifications, repair records, classification reports, regulatory inspection records and approvals (collectively, the “ Technical Documents ”).  During the Charter Term, the Charterer shall be entitled to possession of the Technical Documents; provided , however , that the Owner and its designees shall be allowed reasonable access to and may make copies of the Technical Documents upon three (3) Business Days’ prior written notice to the Charterer.



(ii)   The Owner has been assigned all of the rights and interests the Owner (as buyer) has or may have with respect to the Vessel under the MOA (the “ Assigned Interests ”).  The Owner hereby assigns to the Charterer such rights and interests as the Owner may have in the Assigned Interests and such assignment shall be co-extensive with the Charter Term.  The Charterer shall use due diligence to assert and enforce all such rights and interests.  Upon termination or expiration of this Charter (unless the Charterer acquires the Vessel pursuant to the terms and conditions of Section 12 of this Charter or, as the case may be, the Charterer (or, as the case may further be, the Charterer’s nominee) acquires the Vessel pursuant to the terms and conditions of clause 5.1 of the Multipartite Agreement), the Charterer shall be deemed to have automatically re-assigned all its rights, and interests in the Assigned Interests to the Owner.  The Charterer hereby re-assigns to the Owner any amounts payable to the Charterer by or for the account of the Seller (as a result of the assignment made in the second sentence of this Section 4(a) (ii), all of which amounts shall be paid to the Owner, provided that any sums the Charterer shall have paid or agreed to pay third parties for correcting the damage, defects or deficiencies in the Vessel shall be excluded from such re-assignment and such sums shall be paid to the Charterer and the Charterer shall use such sums solely to pay such third parties for correcting the damage, defects or deficiencies in the Vessel.
(iii)   Without prejudice to Sections 4(d) and 4 (e)(i), on the Delivery Date, the Vessel shall be, or be deemed to be, in class without conditions or recommendations (other than as noted in the confirmation of class (or equivalent) delivered to the Owner and the Head Owner on the Delivery Date




(for the avoidance of doubt, the Charterer agrees and acknowledges that such confirmation of class (or equivalent) shall be the same declaration of class or class maintenance certificate as delivered by the Seller to the Head Owner pursuant to clause 6.1.14 of the MOA) and notwithstanding any such conditions or recommendations of class that may exist on the Delivery Date) and shall be classed with Bureau Veritas (“ Classification Society ”).  During the Charter Term, the Vessel shall remain classed with the Classification Society or, with the prior written consent of the Owner, which consent shall not be withheld or delayed unreasonably, another classification society that is a member of the International Association of Class Societies, and in the event that the Owner gives such written consent, as and from the date of the change in classification society all references to ‘Classification Society’ in this Charter shall be read and construed as meaning the Vessel’s new classification society as consented to by the Owner in such written consent.
(iv) THE OWNER HEREBY EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, INCLUDING, BUT NOT LIMITED TO, TITLE OR THE DESIGN, CONDITION, MERCHANTABILITY, SEAWORTHINESS OF OR THE QUALITY OF THE MATERIAL, EQUIPMENT, OR WORKMANSHIP IN THE VESSEL, AS TO ITS FITNESS FOR A PARTICULAR PURPOSE OR ANY PARTICULAR TRADE, OR AS TO THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, AND THE OWNER FURTHER DISCLAIMS ALL OTHER LIABILITIES (AT COMMON LAW OR IN CONTRACT OR IN ADMIRALTY OR TORT OR OTHERWISE, INCLUDING, WITHOUT LIMITATION, STRICT LIABILITY OR NEGLIGENCE IN ANY DEGREE).  THE VESSEL IS DELIVERED BY THE OWNER TO THE CHARTERER “AS IS, WHERE IS” AND WITH ALL FAULTS.

(b)
Redelivery .  The provisions respecting redelivery of the Vessel as set forth in Sections 4 (c), 4 (d)(ii), 4 (e), 4 (f), 4 (g) and 4 (h) shall not be applicable in the event that the Charterer acquires the Vessel pursuant to the terms and conditions of Section 12 (a) or 12 (b), as the case may be, and/or clause 5 of the Multipartite Agreement .

(c)
The Charterer shall, at its own cost and expense, following the termination of this Charter in accordance with Section 17(b)(i), redeliver the Vessel to the Owner at a location designated by the Owner and being reasonably acceptable to the Charterer.  Such location shall be an easily accessible location, recognised as a safe port within the following ranges dropping last outbound sea pilot or passing one safe port, Singapore / Japan range including People’s Republic of China or in the Owner’s option Skaw / Passero including UK/Med range any time day or night Sundays and Holidays included, with such location never to be within a Prohibited Country and always within International Navigation Limits.
The Charterer shall redeliver all Technical Documents to the Owner with the Vessel.  The Charterer shall also provide to the Owner prior to redelivery evidence of the most recent drydocking, inspection and related repairs required by this Charter, together with written confirmation by the Charterer that to the best of its knowledge and belief there has been no subsequent
damage, grounding, collision or other similar material event subsequent to such drydocking (or providing the details of any of such events that may have occurred).
Commencing upon a determination pursuant to Section 17 that the Vessel will be redelivered, and through the completion of redelivery, the Charterer will allow for and assist in making the Vessel available for inspection at ports of call thereafter by potentially interested purchasers or charterers of the Vessel, as requested by the Owner.  Any such inspection shall be without interference with or delay of the Vessel’s operations and without interference with the Vessel’s crew.
(d)   Survey, Inventory and Inspection .
(i)   On, or in the Owner’s option, prior to, the Delivery Date, the Charterer, at its own cost and expense, shall do a survey of the Vessel and its inventory.  The Owner agrees to accept such survey (the “ On-hire Survey ”) as the benchmark for the condition of the Vessel and the amount of inventory on the Vessel at the commencement of the Charter Term.  The Charterer hereby unconditionally agrees that the Vessel’s condition will be acceptable to it in all respects and in accordance with the terms of this Charter and the Charterer will have no claim against the Owner whatsoever in respect of any defects, damage or deficiencies and/or other items and/or matters resulting in and/or which are the subject of any recommendation or condition of class (“ Deficiencies ”) on the Delivery Date or otherwise identified during any UWI (as defined in Section 4 (d)(iv) (which, for the purposes of the On-hire Survey, the Parties shall ignore) during and/or after the Charter Term and/or following purchase of the Vessel by the Charterer.  If requested by the Owner, and at the Charterer’s expense, an underwater survey may be performed as part of the On-hire Survey.  Purchase of bunkers and fuel oil on board the Vessel at the time of delivery will be made in accordance with the terms of the Time Charter.
(ii)   Following the termination of this Charter in accordance with Section 17(b)(i), the Owner shall appoint an independent marine surveyor, who is reasonably acceptable to the Charterer, for the purpose of determining and agreeing in writing the condition of the Vessel at the time of redelivery hereunder (the “ Off-hire Survey ”) as well as a plan to implement any correction of any deficiencies construed by the surveyor to exceed normal wear and tear.  The expenses for the independent surveyor for such survey shall be paid by the Charterer.  Such survey will include, but not be limited to, an inventory of all consumables, stores, spare parts and equipment on board the Vessel and ashore; a monetary valuation of such inventory; a general condition survey of the Vessel including photographic or videotape records; an inspection of class records; and an inspection of maintenance records.  If requested by the Owner, and at the Charterer’s own cost and expense, an underwater survey may be performed as part of the Off-hire Survey.
(iii)   The On-hire Survey report and the Off-hire Survey report (if any), when agreed, shall be deemed to be incorporated into this Charter by reference.

(iv)   At the request of the Owner, the Charterer shall at its own cost and expense arrange for an underwater inspection of the Vessel (the “UWI”) on 3 November 2018 at / in Rizhao, China to be performed by a diver approved by the Classification Society and in the presence of a Classification Society surveyor arranged for by the Charterer and paid for by the Charterer.  The Owner’s and the Head Owner’s representative(s) shall have the right to be present at the UWI as observer(s) only without interfering with the work or decisions of the Classification Society surveyor.  The extent of the UWI and the conditions under which it is performed shall be to the satisfaction of the Classification Society.  Any Deficiencies discovered during the UWI shall be rectified by the Charterer pursuant to Section 7(b).  If the Vessel’s rudder, propeller, bottom or other underwater parts are found broken, damaged or defective (but excluding any fouling or marine growth) during the UWI and such breakage, damage or defects do not constitute Deficiencies, the Charterer shall at the Charterer’s own cost and expense promptly remedy such breakage, damage or defect to the Owner’s and the Head Owner’s satisfaction (such satisfaction at the Owner’s and the Head Owner’s sole discretion) but without unreasonably interfering with the Time Charterer’s use or operation of the Vessel.  If any fouling of and/or marine growth on the Vessel’s rudder, propeller, bottom or other underwater parts is discovered during the UWI, and the extent of such fouling and/or marine growth is greater than would reasonably be expected to have accumulated on a hull of similar type, size and age to the Vessel’s hull up to the date of the UWI, the Charterer shall, at the Charterer’s own cost and expense but without unreasonably interfering with the Time Charterer’s use or operation of the Vessel, promptly (and in all events at the next drydocking of the Vessel or such earlier date as required by the Classification Society and/or United States Coast Guard (as applicable and as the case may be)) clean such fouling and/or marine growth to the Owner’s and the Head Owner’s reasonable satisfaction.
(e)   Redelivery – Condition .
(i)   The Charterer agrees that on redelivery of the Vessel, the Vessel, its tackle, apparel, equipment and other appurtenances shall be clean, suitable, and in the same or as good order and condition and class as when delivered, fair wear and tear excepted, not affecting class excepted, and in all respects shall be seaworthy.  For the avoidance of doubt, any Deficiencies shall be rectified and made good in all respects by the Charterer as required by the Classification Society and in any event prior to the date of redelivery of the Vessel by the Charterer to the Owner and the Vessel shall be redelivered to the Owner in class without any recommendation or condition of class.  The Charterer further agrees that on redelivery of the Vessel (A) the Vessel will be re-delivered cargo free with holds and storage places cargo-free, clean and swept ready to load cargo, (B) the Vessel shall be capable of carrying the highest possible quality cargo according to class and Vessel specifications, (C) all food storage and preparation areas will be cleaned, sanitized, dry and ready for immediate operation, and (D) the Vessel shall be capable of operating for its intended use as a vessel of its type, size and age and subject to any subsequent alterations as provided by Section 8.
(ii)   The Charterer agrees that upon redelivery of the Vessel (A) the Vessel shall have all valid trading, class and class related certificates in place


and up to date, which shall have not less than twelve (12) months’ validity remaining (B) there shall be not less than twelve (12) months remaining prior to the next special survey and dry docking of the Vessel as required by the Classification Society, such twelve (12) month period being without any consideration to any extension granted by the Classification Society, and (C) the Vessel shall have installed thereon all spares required by the Classification Society and by all regulatory authorities having jurisdiction over the Vessel.  The Charterer further agrees that in the event of the redelivery of the Vessel by the Charterer to the Owner, it is understood and agreed that the Vessel shall be redelivered after having successfully completed a ten (10) year special survey and her latest scheduled intermediate survey following such ten (10) year special survey prior to such redelivery.  The Charterer further agrees that, if at the time of redelivery of the Vessel by the Charterer to the Owner, the Flag State, the Classification Society, any other applicable classification societies and/or certifying authorities, and/or any regulatory or governmental agencies or authorities having jurisdiction over the Vessel and its equipment (or the area where the Vessel is operating from time to time), including, if applicable, the United States Coast Guard (each, a “ Competent Authority ”), requires a ballast water treatment system to have been, or, as the case may be, to be, installed and maintained on the Vessel (including any extensions granted by any Competent Authority) either (Y) by the date of redelivery of the Vessel by the Charterer to the Owner or (Z) by any date within the period beginning from the date of redelivery of the Vessel by the Charterer to the Owner and ending on the first anniversary of the date of redelivery of the Vessel by the Charterer to the Owner, the Vessel shall be redelivered to the Owner with her ballast water treatment system installed and maintained in full compliance with such requirements.  Notwithstanding Section 4 (b) above, the Charterer agrees that it shall not at any time during the Charter Term or upon redelivery of the Vessel to the Owner, or, as the case may be, the Head Owner, without the Head Owner’s and the Owner’s prior written consent (such consent at the Head Owner’s and Owner’s sole discretion), seek from any Competent Authority any waiver, permission to delay implementation, or supplemental or additional permission (including, without limitation, any request for an extension of any existing waiver or permission) to delay implementation of any requirement of such Competent Authority as to the installation and/or maintenance of a ballast water treatment system on the Vessel.  The Charterer further agrees that upon redelivery, the Vessel shall be in full compliance with all applicable International Maritime Organization (“IMO”) rules and regulations, including all applicable sulfur emissions standards, with which the Vessel is required to comply at the time of redelivery.
(iii)   Without prejudice to the remedies available to the Owner pursuant to Section 17(b), the Charterer further agrees that upon redelivery of the Vessel by the Charterer to the Owner following the termination of this Charter in accordance with Section 17(b)(i), the Charterer shall fully indemnify the Owner against, and reimburse the Owner for, and the Charterer shall pay no later than thirty (30) days after the Owner’s demand, the Owner for any and all costs incurred by the Owner (including, if applicable, the resolution of any Deficiencies) in connection with: (A) the Vessel’s ten (10) year special survey and her latest scheduled intermediate survey following such ten (10) year special survey; (B) the Vessel’s ballast water treatment

system to the extent that it does not comply with the requirements specified under Section 4(e)(ii) above; and (C) the Approved Scrubber to the extent that it does not comply with the requirements specified under this Charter, including Section 6(g).
(iv)   The Charterer agrees that upon re-delivery, the functional and operating integrity of all machinery and equipment of the Vessel shall be verified and approved by an independent marine surveyor designated by the Owner.

(f)
Redelivery – Certificates .  The Charterer agrees that upon redelivery the Vessel will meet the complete requirements of, and be certificated at, RightShip 3-star level or any replacement thereof.

(g)
Redelivery – Access .  Following the termination of this Charter in accordance with Section 17(b)(i) and during the last six (6) months of the Charter Term, the Charterer shall permit access to the Vessel at reasonable times to the Owner and to persons designated by the Owner, and shall permit the inspection of the Vessel by such persons.

(h)
Redelivery Inventory .  The Charterer shall redeliver the Vessel with the same amount of unbroached provisions, paints, oils, ropes, spare parts and equipment, and other unused consumable stores as are on board and ashore at the commencement of the Charter Term as determined pursuant to the inventory conducted as part of the On-hire Survey.  In the event consumable stores are greater at redelivery than at delivery, the Charterer may remove the excess.  Notwithstanding any term or condition of the Time Charter, all bunkers and fuel oil onboard the Vessel at the time of redelivery shall remain the property of the Owner.  Title to lubricants on board the Vessel at the time of redelivery shall be deemed to transfer to the Owner at the time of redelivery and the Owner shall not be obliged to pay for such lubricants.

(i)
Documentation .  The Parties agree that on the Delivery Date, the Vessel shall be duly documented in the name of the Head Owner as owner thereof under the laws and flag of the Flag State.  The Owner shall be responsible for such registration and the Charterer shall promptly provide all assistance required by the Owner for the purposes of such registration.  The Charterer shall be responsible for naming the Vessel and for paying for initial Flag State documentation and maintaining such due documentation throughout the Charter Term, at the Charterer’s own cost and expense, provided, the Owner agrees that the Owner will reasonably cooperate with the Charterer in establishing and maintaining such Flag State documentation.  The Charterer shall also pay all the Flag State fees associated with initial documentation and any annual Flag State fees required to maintain documentation or the Head Owner’s foreign maritime entity status.  The Charterer shall not suffer or permit anything to be done which might injuriously affect the entitlement of the Vessel to be documented under the laws and regulations of the Flag State.
5.   Charter Hire .
(a)   Charter Hire .


(i)   Basic Charter Hire .  The Charterer shall pay to the Owner charter hire for the Vessel during the Charter Term (“ Basic Charter Hire ”):

(1)
at the applicable rate per day set forth in Exhibit A, Part 1 hereto from and including the Delivery Date (“ First Daily Charter Hire Rate ”) on (y) each Charter Hire Payment Date until [•] November 2019; and (z) any other date as provided for under this Charter; and

(2)
at the applicable rate per day set forth in Exhibit A, Part 2 hereto from and including [•] November 2019 (“ Second Daily Charter Hire Rate ”) on (y) each Charter Hire Payment Date from and including [•] November 2019]; and (z) any other date as provided for under this Charter.
(the First Daily Charter Hire Rate and the Second Daily Charter Hire Rate, each a “ Daily Charter Hire Rate ”)
In the event that the Scrubber Amount (as such term is defined below) exceeds the Scrubber Cost (as such term is defined below) (the amount of such excess, the “ Scrubber Excess ”) and provided that the Charterer is not obliged under this Charter to pay any Scrubber Refund, or is otherwise in default under this Charter, then no later than the Charter Hire Payment Date immediately following 1 April 2020, the Owner shall calculate (and which calculation shall be binding on the Charterer absent manifest error) the amount by which the Second Daily Charter Hire Rate shall be reduced to reflect the Scrubber Excess (such revised rate, the “ Revised Second Daily Charter Hire Rate ”) and the Purchase Prices and Loss Values as set forth in Exhibit A-1 (such revised Purchase Prices and Loss Values, the “ Revised PP & LV ”) and provide revised Exhibits A and A-1.  The Revised Second Daily Charter Hire Rate and the Revised PP & LV set out in such revised Exhibits A and A-1 shall be applicable from and including the Charter Hire Payment Date immediately following 1 April 2020, and from and including the Charter Hire Payment Date immediately following 1 April 2020, all references to the Second Daily Charter Hire Rate, Purchase Price and Loss Value shall be read and construed accordingly.
(ii)   Additional Hire .  All amounts (other than Basic Charter Hire) to be paid by the Charterer to the Owner under this Charter, and all indemnities, fees, costs and other expenses whatsoever incurred by: (A) the Owner under, or in connection with, the Transaction Documents (or any of them) and the transactions contemplated thereby; and (B) by the Head Owner under, or in connection with, this Charter, the Bareboat Charter, the Multipartite Agreement and the transactions contemplated thereby, shall be deemed “ Additional Hire ”.  Basic Charter Hire and Additional Hire are collectively called “ Charter Hire ”.  For the purpose of this Charter, “ Transaction Document ” means each of this Charter, the Multipartite Agreement, the Guarantee, the Escrow Agreement, the Scrubber Supply Contract Assignment and the Cash Collateral Account Charge (as defined below).

(iii)   Partial Months .  If the Charterer is required by the terms of this Charter to pay Charter Hire to the Owner on a date other than a Charter Hire Payment Date defined in Section 5(a)(iv) below, the Charter Hire payable for the period from the immediately preceding Charter Hire Payment Date through such date shall be payable at a daily rate equal to the applicable Daily Charter Hire Rate multiplied by the actual number of days for which Charter Hire is payable.
(iv)   Charter Hire Payments .  Payments of Charter Hire shall be paid in United States currency to such account and in such manner as may be designated in writing by the Owner from time to time.  Basic Charter Hire shall be paid monthly in arrears on the day numerically corresponding to the day of the Delivery Date occurring in each month during the Charter Term following the month in which the Delivery Date occurs (each, a “ Charter Hire Payment Date ”); and provided further that if the Charter Hire Payment Date does not fall on a day on which banks are open for business in London, New York, Athens and Geneva (a “ Business Day”), the applicable Charter Hire Payment Date shall be the next following Business Day (unless that day would be in the next calendar month, in which case it shall fall on the preceding Business Day).
(v)   Default Interest .  In the event that any Basic Charter Hire or Additional Hire payable by the Charterer is not paid on the due date thereof, interest shall accrue on such unpaid amount from and including the date that falls two (2) days after the due date of the unpaid amount to and excluding the date of payment thereof at the Default Rate (as defined below).  Any such accrued interest shall be Additional Hire and shall be payable upon demand.
(vi)   Escrow Fees .  The Owner and the Charterer agree that (notwithstanding the reference under the Escrow Agreement to joint and several liability of the Owner and the Charterer for the fees (and any taxes thereon) of the Escrow Bank payable pursuant to the Escrow Agreement) all fees (and / or any taxes thereon) payable to the Escrow Bank pursuant to the Escrow Agreement shall be paid in such proportions as follows: (i) one half (1/2) by the Owner; and (ii) one half (1/2) by the Charterer.  If the Owner shall have paid any part of such fees (and / or any taxes thereon) on behalf of the Charterer, the Charterer shall promptly reimburse the Owner for the full amount of such fees (and / or any taxes thereon) payable by the Charterer in accordance with the previous sentence.

(b)
Hell or High Water Charter Obligation .  This Charter may not be cancelled or terminated, except in accordance with the express provisions of this Charter and the Multipartite Agreement, for any reason whatsoever.  The Charterer shall have no right to be released, relieved or discharged from any obligation or liability hereunder except as set forth in explicit provisions of this Charter.  Except as hereinafter provided, the Charterer’s obligation to pay Charter Hire hereunder shall be absolute during the term of this Charter irrespective of any contingency whatsoever, including, but not limited to (i) any set-off, counterclaim, recoupment, defense or other right which either Party may have against the other; (ii) any failure of the Vessel to meet the required condition of delivery under the MOA and/or any failure of the Vessel to meet any operational standards set forth in the MOA; (iii) any damage to, destruction or

taking of the Vessel, any requisition of use, any inability of the Vessel to trade in any particular trade, any temporary unavailability of the Vessel by reason of any damage to the Vessel, any lay-up of the Vessel, any failure of the Vessel to be duly documented in the Flag State, or any defect in the Owner’s title to the Vessel; (iv) any failure on the part of any Party, whether with or without fault on its part, in performing or complying with any of the terms or covenants hereunder; (v) any insolvency, bankruptcy, reorganization, arrangement, readjustment of debt, dissolution, liquidation or similar proceeding by or against the Charterer or the Guarantor or any other person; (vi) any invalidity or unenforceability, or lack of due authorization of or defect in the execution, of this Charter; (vii) any War Risks; (viii) any event of force majeure or frustration; (ix) the installation of the Approved Scrubber on, or incorporation of the Approved Scrubber in, the Vessel or any other matter related to the Approved Scrubber; and (x) any other reason whatsoever.  Nothing contained in this Section 5(b) shall be deemed to hinder or prevent the Charterer from pursuing any claim the Charterer may have against the Owner for damages for the Owner’s breach of its express obligations under this Charter.
For the purposes of this Charter:
“ Default Rate ” shall mean, for any day, a rate of interest per annum equal to the lesser of (i) LIBOR in effect on such day plus eight and one-half percent (8.5 %) and (ii) the maximum rate permitted by applicable law.
“ LIBOR ” shall mean, as of any day, (i) the applicable 30-day London interbank offered rate per annum for deposits in U.S. Dollars appearing on Bloomberg LIBO Page as of 11:00 a.m., London time on such day for deposits in U.S. dollars or (ii) if such Bloomberg LIBO Page rate is not available at such time for any reason, or if the Bloomberg LIBO Page is not available, the applicable 30-day London interbank offered rate per annum for deposits in U.S. Dollars appearing on pages LIBOR01 or LIBOR02 of the Thomson Reuters screen (or any replacement Thomson Reuters page which displays that rate on the appropriate page of such other information service which publishes that rate from time to time in place of Thomson Reuters) as of 11:00 a.m., London time on such day for deposits in U.S. dollars.  If such Thomson Reuters page or service ceases to be available or if such rate ceases to be available, the Owner may specify another page or service displaying the relevant rate or, as the case may be, a replacement rate after consultation with the Charterer.  If LIBOR for any day determined pursuant to the preceding sentences is less than zero, LIBOR for that day shall be deemed to be zero.
(c)   Cash Collateral.
(i)   The Owner acknowledges that as and from the Delivery Date, due to agreements reached in the MOA, the Owner shall be in receipt of a security deposit from the Seller in an amount of United States Dollars One Million Six Hundred Thousand (US$1,600,000) (the “ Cash Collateral Amount ”) which shall act as security for the Charterer’s due and punctual performance of its obligations under this Charter.

(ii)   The Owner agrees that it will promptly release in full the Cash Collateral Amount to an account (the “ Cash Collateral Account ”) of the Charterer with Joh. Berenberg, Gossler & Co. KG (or such other bank acceptable to the Owner (such acceptability in the Owner’s sole discretion) (the “ Account Bank ”) following receipt of a written instruction from the Charterer to do so and PROVIDED ALWAYS that (A) such account is pledged in favour of the Owner on terms satisfactory to the Owner (such satisfaction in the Owner’s sole discretion), as security for the due and punctual performance of the Charterer’s obligations under, inter alia , this Charter, by an account pledge by the Charterer in favour of the Owner in the name of the Charterer (such account pledge, the “ Cash Collateral Account Charge ”) and that (B) the Charterer shall have delivered to the Account Bank a notification of pledges under the Cash Collateral Account Charge, such notification in form and substance acceptable to the Owner (such acceptability in the Owner’s sole discretion); and (C) that the Account Bank has given to the Owner an acknowledgement of the pledges under the Cash Collateral Account Charge, such acknowledgement in form and substance acceptable to the Owner and the Account Bank (such acceptability in the Owner’s and the Account Bank’s sole discretion).  Any fees and/ or bank charges of the Owner’s bank or the Account Bank in connection with the payment to, or the holding in, the Cash Collateral Account of the Cash Collateral Amount shall be payable by the Charterer.  If the Owner shall have paid any such fees and/or bank charges, the Charterer shall promptly reimburse the Owner for the full amount of such fees and bank charges.
For the purposes of this Charter:
“ Charter Security ” shall mean, together, the Cash Collateral Account Charge, the Guarantee, the Scrubber Supply Contract Assignment and any Additional Security (as defined in Section 17 (b)).
(iii)   If the Charterer is entitled to purchase the Vessel pursuant to the terms of clause 5.1 of the Multipartite Agreement and the Vessel is to be acquired by the Charterer pursuant to such terms, notwithstanding the terms of this Charter and any Charter Security, the Owner agrees to permit the release of the Cash Collateral Amount (less, where applicable, the Outstanding Balance (as defined in Section 17(c))) so that the same shall be applied directly in part payment of the Purchase Option Amount (as defined in the Multipartite Agreement) and within the time frames required for payment of the Purchase Option Amount as set out in the Multipartite Agreement, provided that such application shall only occur immediately after the Charterer pays that part of the Purchase Option Amount not funded from the Cash Collateral Amount.
6.     Use; Operations

(a)
Subject to the provisions of Section 6(e), the Charterer may operate the Vessel worldwide, provided: (i) the Charterer shall only use the Vessel in the territorial waters of nations which recognize the rights of vessels registered in the Flag State; (ii) the Vessel shall be used only in locations where the Vessel’s operating specifications allow it to operate safely; (iii) the Vessel shall be employed only in lawful activities under the laws of the United States


and any authority having jurisdiction over the Vessel; and (iv) the Vessel shall always be operated within its technical capacities and certification, manufacturer’s warranties, and within the limits of its insurance coverage.

(b)
The Charterer shall comply with and satisfy (and to the extent required, have on board certificates evidencing its compliance with) all provisions of any applicable law, treaty, convention, regulation, proclamation, rule or order applicable to the Vessel, its use, operation, maintenance, repair or condition, including, but not limited to, all applicable IMO rules and regulations, including all applicable sulfur emissions standards, any financial responsibilities imposed on the Charterer or the Vessel with respect to pollution by any state or nation or political subdivision thereof and shall maintain all certificates or other evidence of financial responsibility and a vessel spill response plan required under the United States law approved by the relevant authority and evidence of their approval by the appropriate United States government entity (including, but not limited to, the United States Coast Guard) as may otherwise be required by any such law, treaty, convention, regulation, proclamation, rule or order with respect to the operations and trading in which the Vessel is from time to time engaged.

(c)
The Charterer (including by its Vessel managers) shall have sole responsibility as owner and as technical and commercial operator under all Environmental Laws and under certificates of financial responsibility and vessel spill response plans.

(d)
Without prejudice to the generality of Section 6(b) above, the Charterer and the Vessel shall comply with all Environmental Laws including but not limited to the requirements of the United States Coast Guard (as amended from time to time)

(e)
The Charterer covenants and agrees that the Vessel will not (i) be chartered (or sub-chartered) to a Prohibited Person unless authorized under a specific license issued by the U.S. Treasury Department Office of Foreign Assets Control (“OFAC”), (ii) make voyages to or from any Prohibited Country unless authorized under a specific or general license issued by OFAC, or (iii) be allowed to carry any cargo from or destined to a Prohibited Country unless authorized under a specific or general license issued by OFAC.

(f)
The Charterer covenants and agrees that it will conduct its businesses and manage its properties (including, but not limited to, operation of the Vessel) in compliance with all applicable anti-money laundering laws, rules and regulations.

(g)
Scrubber.
(i)     The Charterer agrees to arrange for the Approved Scrubber to be installed on the Vessel during 2019 and by no later than 31 December 2019, such installation, and the operation of the Approved Scrubber as at the date on which the installation of the Approved Scrubber on the Vessel is completed, to be in full compliance with all Relevant Laws applicable as at the date on which the installation of the Approved Scrubber on the Vessel is completed and the requirements of this Charter.  Notwithstanding any other


provision of this Charter to the contrary, following such installation and throughout the remainder of the Charter Term, the Approved Scrubber shall be maintained and operated by the Charterer in full compliance with all Relevant Laws applicable from time to time and in good running order, repair and condition in accordance with first class commercial ship management practices and in any event in a manner that a prudent ship owner of vessels similar in age, type, equipment (including exhaust emission abatement systems of a type similar to the Approved Scrubber) and trade to the Vessel (with, for the avoidance of doubt, the Approved Scrubber installed on board in accordance with this Charter) would.  Following such installation, the Vessel shall be redelivered with the Approved Scrubber duly installed and maintained by the Charterer in full compliance with all Relevant Laws and this Charter.
(ii)     Promptly and in any event no later than five (5) days after any
request by the Owner, the Charterer shall provide to the Owner any information or documents that the Owner may require as to the planned installation of the Approved Scrubber (including as to schedule), the progress of the installation of the Approved Scrubber and the installation and operation of the Approved Scrubber being in accordance with all requirements of this Charter, and all Relevant Laws.
(iii)     The Charterer shall procure that the Installer permits the Owner throughout the period during which the Approved Scrubber is being installed, to have up to two (2) representatives (at the Owner’s cost) (and each of which representatives shall be acquainted with exhaust emission abatement system installation and operation) present at the Shipyard, to observe and survey installation of the Approved Scrubber.  Such representatives shall also be entitled to attend surveys, shop tests and trials.  The Charterer shall provide all necessary assistance, including in arranging for any permits or authorisations required, to enable the Owner’s representatives to so attend and the Charterer shall procure that the Installer shall extend all facilities and resources (including all necessary information and access) to the Owner’s representatives to enable them to perform their role effectively.
In the event that the Owner’s representatives discover anything (including construction methods, materials and workmanship) which does not or will not, in the Owner’s reasonable belief, conform to the requirements of any Scrubber Contract or the Scrubber Specifications, the Owner shall notify the Charterer in writing of such nonconformity, and the Charterer shall promptly give the Installer, or, as the case may be, the Manufacturer, a notice in writing as to such nonconformity in accordance with the relevant Scrubber Contract.  The Charterer shall procure that the Installer and the Manufacturer comply with their obligations under the relevant Scrubber Contracts in respect of any such non-conformities, and the Charterer shall take all necessary steps to procure that the Approved Scrubber is, in any event, installed and operational on the Vessel in accordance with all Relevant Laws and the requirements of this Charter.
(iv)   No later than ten (10) days after the date on which the Owner receives from the Charterer evidence satisfactory to the Owner (such satisfaction in the Owner’s sole discretion) as to:


(1)
the amount and correctness of any instalment paid by the Charterer under the Scrubber Supply Contract and evidence of the payment by the Charterer of such instalment, and subject to the Owner being satisfied (such satisfaction in the Owner’s sole discretion) that the Approved Scrubber will be or, as the case may be, is, in full compliance with the requirements of this Charter and the Relevant Laws applicable as at the date on which the installation of the Approved Scrubber on the Vessel is completed, the Owner agrees to reimburse, or, as the case may be, procure that the Escrow Bank releases to, the Charterer for an amount equal to such instalment paid by the Charterer under the Scrubber Supply Contract (each such payment by the Owner to the Charterer under this Section 6(g)(iv)(1), a “ Scrubber Supply Payment ”); and

(2)
as to the payment by the Charterer of all amounts due and payable under the Scrubber Installation Contract and provided that (A) the Owner is satisfied (such satisfaction in the Owner’s sole discretion) that the Approved Scrubber has been installed on the Vessel in full compliance with the requirements of this Charter and the Relevant Laws applicable as at the date on which the installation of the Approved Scrubber was completed and (B) that the Vessel has left the Shipyard, the Owner agrees to reimburse, or, as the case may be, procure that the Escrow Bank releases to, the Charterer for an amount equal to the amount paid by the Charterer under the Scrubber Installation Contract (the payment by the Owner to the Charterer under this Section 6(g)(iv)(2), the “ Scrubber Installation Payment ”).
(v)   Notwithstanding any other provision of this Charter, the aggregate total of the Scrubber Payments, (such aggregate total, the “ Scrubber Cost ”) shall never exceed an amount equal to the Scrubber Amount less any Direct Payments.
(vi)   Notwithstanding any other provision of this Charter or the MOA:

(1)
the Owner shall be under no obligation to pay to the Charterer any sum in respect of the Approved Scrubber; and

(2)
the Charterer shall pay to the Owner, and the Owner shall have received in clear and immediately available funds, no later than 17 November 2019, an amount equal to the aggregate of all Scrubber Payments (such payment by the Charterer to be without set-off or deduction) (the “ Scrubber Installation Refund ”),

if, as at [•1 November 2019, the installation of the Approved Scrubber has either not commenced, or, as the case may be, has commenced (the determination as to whether the installation of the Approved Scrubber has commenced shall be in the Owner’s sole discretion) but the Owner determines (such determination in its sole discretion) that the installation of the Approved Scrubber will not be completed by 31 December 2019, that the Approved Scrubber will not be approved by the Classification Society, that the installation of the Approved Scrubber will not be approved by the Classification Society and / or that the Approved Scrubber will not be fully operational in accordance with all Relevant Laws applicable as at [•1 November 2019 and all requirements of this Charter by 31 December 2019.
(vii)   Notwithstanding any other provision of this Charter or the MOA:

(1)
the Owner shall be under no obligation to pay to the Charterer any sum in respect of the Approved Scrubber; and

(2)
the Charterer shall pay to the Owner, and the Owner shall have received in clear and immediately available funds, no later than 14 January 2020, an amount equal to the aggregate of all Scrubber Payments (such payment by the Charterer to be without set-off or deduction) (the “ Scrubber Completion Refund ”),
if the Approved Scrubber is not fully installed, approved by the Classification Society and fully operational on the Vessel in accordance with all Relevant Laws applicable as at 31 December 2019 and all requirements of this Charter by 31 December 2019 (the determination as to whether the Approved Scrubber has been fully installed and / or is fully operational in accordance with all Relevant Laws and all requirements of this Charter shall be in the Owner’s sole discretion).
(viii)   For the avoidance of doubt, the Parties agree that:

(1)
following its installation on the Vessel in accordance with this Charter, the Approved Scrubber shall, for all purposes of this Charter and the Multipartite Agreement, be deemed to be a Non-Severable Modification (as such term is defined in Section 8 (e)(i);

(2)
all fees and charges incurred by the Owner by reason of any Scrubber Payment shall be paid for by the Charterer;


(3)
notwithstanding any other provision of this Charter to the contrary, the Owner shall not be obliged to reimburse, or, as the case may be, cause the release by the Escrow Bank, to the Charterer any amount in respect of the Approved Scrubber until such time as:

a)
the Manufacturer shall have given to the Charterer, with copy to the Owner, a consent to assignment (such consent to be in the form and terms set out in Appendix H of the MOA or such other form and / or terms acceptable to the Owner (such acceptability in the Owner’s sole discretion);

b)
the Charterer shall have delivered to the Manufacturer, with copy to the Owner, a notice of assignment in the form and on the terms appended at Part I of Schedule 1 to the Scrubber Supply Contract Assignment; and

c)
the Owner shall have received from the Manufacturer an acknowledgement of assignment in the form and on the terms appended at Part II of Schedule 1 to the Scrubber Supply Contract Assignment.

(4)
the Charterer shall not be entitled to install on the Vessel any exhaust emission abatement system which is not the Approved Scrubber; and

(5)
to the extent that the Scrubber Amount exceeds the Scrubber Cost, the excess shall be retained by the Owner.

(h)
The Owner acknowledges that as and from the Delivery Date, due to agreements reached in the MOA, the Owner shall be in receipt of a cash deposit from the Seller in an amount equal to the Scrubber Amount.  The Owner agrees to release in full the Scrubber Amount to the Escrow Account provided that the Escrow Agreement shall have been entered into among the Owner, the Charterer and the Escrow Bank and that the Escrow Account shall have been opened by the Escrow Bank.
For the purposes of this Charter:
“ Approved Scrubber ” means the exhaust emission abatement system to be installed on the Vessel and approved in writing by the Owner and the Head Owner prior to its installation on the Vessel (such approval in the sole discretion of the Owner and the Head Owner), and as such system is more particularly described in the Scrubber Supply Contract.
“ Direct Payment ” means any payment that the Owner may make directly to the Installer, the Manufacturer or any other person (excluding, for these purposes only, the Head Owner)

pursuant to the Scrubber Supply Contract Assignment or otherwise in relation to the installation of the Approved Scrubber on the Vessel.
“ Environmental Claim ” means (a) enforcement, clean-up, removal or other governmental or regulatory action or orders or claims instituted or made pursuant to any Environmental Laws or resulting from a Spill; or (b) any claim, proceeding, formal notice or investigation by any other person in respect of any Environmental Law or relating to a Spill.
“ Environmental Law ” means all laws, regulations and conventions concerning pollution or protection of human health or the environment (including without limitation, the United States Oil Pollution Act of 1990, United States Comprehensive Environmental Responses, Compensation and Liability Act and any comparable United States federal laws or laws of the individual States of the United States of America).
“ Government Authority ” shall be construed to include the Flag State, the Classification Society, any other applicable classification societies and/or certifying authorities, the IMO and any supranational, international, national, regional, state, municipal, local or other government or organisation, including any subdivision, agency, board, department, commission or authority thereof, including any harbour, port, marine or administrative authority, or any quasi-governmental organisation therein having jurisdiction over the Owner, the Charterer, the Vessel (including the Approved Scrubber) and/or the area where the Vessel is operating , as the case may be, from time to time.
“ Installer ” means Yiu Lian Dockyards (Shekou) Limited, a company incorporated pursuant to the laws of the People’s Republic of China and with an office at Yiu Lian Dockyards (Shekou) Wharfage, Mawan Avenue North, Qianhai, Nanshan District, Shenzhen, Guangdong, People’s Republic of China.
“ Manufacturer ” means Hyundai Materials Corporation, a corporation organised and existing under the laws of Korea having its principal office at 9F Shin-An Bldg., 512,. Teheran-Ro, Gangnam-gu, Seoul 06179, Korea.
“ Prohibited Country ” means (a) any state, country or jurisdiction which is subject to any United Nations Security Council Resolution, European Union Decision, United States or United Kingdom or other applicable law which would have the effect of prohibiting the sale, lease, charter, or voyage of the Vessel to or from such country or otherwise cause the Head Owner, the Owner or the Charterer, to be in contravention of any applicable law to which such party is subject; (b) any country to which voyages are not covered under the insurances required to be maintained by the Charterer herein; or (c) any country which the Owner determines now or in the future due to a change in law or circumstances that voyages to such country would materially prejudice the Owner’s ability to repossess the Vessel, or enforce the remedies or realize the benefit of the liens and rights established under this Charter.  The Owner hereby designates Cuba, Iran, Syria, Sudan and North Korea as Prohibited Countries, as of the date of this Charter.
“ Prohibited Person ” means any individual or entity: (a) with whom the Head Owner or the Owner is prohibited or restricted in engaging in transactions or exporting goods or services to under applicable law; (b) who is a resident of, or organized under the laws of or doing business in any Prohibited Country; (c) who is designated on any United Nations Security Council Resolution or any European Union or United States or United Kingdom list, order, or other published designation of terrorists, narcotics traffickers, proliferators of weapons of

mass destruction or other lists of barred or restricted entities or individuals including without limitation the U.S. Treasury Specially Designated Nationals List.
“ Relevant Law ” means (a) any law, decree, constitution, regulation, requirement, rule, authorisation, judgment, injunction or other directive of a Government Authority; or (b) any treaty, pact or other agreement to which any Government Authority is a signatory or party; or (c) any judicial or administrative interpretation with binding characteristics, in each case, which is applicable to the Vessel, the Owner, the Charterer, and / or the area where the Vessel is operating from time to time, as the case may be.
“ Scrubber Amount ” has the meaning ascribed to it in the MOA.
“ Scrubber Contract ” means, as the case may be, the Scrubber Installation Contract or the Scrubber Supply Contract
“ Scrubber Installation Contract ” means the agreement dated [•] 2018 entered into between the Charterer and the Installer pursuant to which, inter alia , the Installer has agreed to install on the Vessel the Approved Scrubber.
“ Scrubber Payment ” means, together, all Scrubber Supply Payments and the Scrubber Installation Payment.
“ Scrubber Refund ” means, as the case may be, any Scrubber Completion Refund or Scrubber Installation Refund.
“ Scrubber Supply Contract ” means the agreement dated 28 September 2018 and entered into between the Charterer and the Manufacturer pursuant to which, inter alia , the Manufacturer has agreed to supply to the Charterer the Approved Scrubber and to provide engineering support while the Approved Scrubber is being installed on the Vessel by the Installer, a true, correct and complete copy of which is attached at Exhibit D.
“ Scrubber Supply Contract Assignment ” has the meaning ascribed to it in the MOA.
“ Scrubber Specifications ” means the specifications of the Approved Scrubber set out in the Scrubber Supply Contract or such other specifications of the Approval Scrubber as may be approved in writing by the Owner and the Head Owner prior to the Approved Scrubber’s installation on the Vessel (such approval in the sole discretion of the Owner and the Head Owner).
“ Shipyard ” means the Installer’s Zhoushan shipyard or such other location for the installation of the Approved Scrubber on the Vessel by the Installer, such location as approved in writing by the Owner prior to commencement of the installation of the Approved Scrubber on the Vessel (such approval in the sole discretion of the Owner).
“ Spill ” means the leakage, spillage or discharge of oil or cargo.
7.     Maintenance and Operation .

(a)
Charterer’s Control and Expenses .  During the Charter Term, the Charterer shall have exclusive control of the Vessel and shall be solely responsible for the maintenance and operation of the Vessel and, subject to the terms of this Charter, will operate, navigate, man and victual the Vessel at its own cost and


expense.  The Charterer shall pay all charges and expenses of every kind and nature whatsoever incident to the use and operation of the Vessel under this Charter throughout the Charter Term.  Such costs and expenses shall include, but not be limited to, those relating to (w) customs duties, bonds, work permits, fees, licenses, clearances, pilotage fees, wharfage fees, canal fees and costs, or similar charges incurred in connection with the importation, exportation, operation or navigation of the Vessel by the Charterer, (x) maintaining all the Vessel’s trading certificates necessary for its operations and all other certificates required by the Flag State (or other governmental agencies or regulatory authorities having jurisdiction over the Vessel (or the area where the Vessel is operating from time to time) including, if applicable, the United States Coast Guard), (y) maintaining the Vessel, the Vessel’s machinery, appurtenances and spare parts in the condition required under Section 7(b) and the requirements of any applicable classification societies and other regulatory agencies having authority over the Vessel, and (z) supervision, management, victualing (including catering), supplies, parts service companies, port charges, dockage and wharfage, fuelling and lubrication.

(b)
Maintenance and Repairs .  During the Charter Term, the Charterer, at its own cost and expense, will maintain the Vessel as necessary to keep the Vessel in class, clean, painted and in good running order, repair and condition in accordance with good commercial practices, and in any event, in a manner that a prudent ship owner of vessels similar in age, type and trade to the Vessel would do, so that the Vessel shall be, insofar as due diligence can make it so, tight, staunch, strong and well and sufficiently tackled, apparelled, furnished, equipped and in every respect seaworthy and in as good condition as when delivered hereunder, ordinary wear and tear excepted.  In addition, the Charterer shall, at the earlier of the next dry docking of the Vessel or such earlier date as required by the Classification Society and / or the United States Coast Guard (as applicable and as the case may be) and at its own cost and expense, take all actions necessary to correct any Deficiencies.  For the avoidance of doubt and notwithstanding any other term of this Charter, any and all costs and/or expenses whatsoever associated with satisfying and/or remedying any conditions or recommendations of class shall always be for the Charterer’s account.  During the Charter Term, the Charterer will provide and pay for all such repairs, replacement parts, labor and materials as shall be necessary to keep and maintain the Vessel in such condition.  The Charterer additionally will maintain the Vessel’s machinery in compliance with the requirements of any classification societies or regulatory agencies having authority over the Vessel and its equipment.  Upon the written request of the Owner, the Charterer will inform the Owner of the location of the maintenance records for the Vessel which are not kept on the Vessel.  The Charterer will notify the Owner and the Head Owner immediately of any accident involving the Vessel estimated to require repairs the cost of which will exceed United States Dollars Five Hundred Thousand (US$500,000).  The Charterer shall also notify the Owner in advance of any drydocking of the Vessel required by any classification society or regulatory agency having jurisdiction over the Vessel.  The Owner may, at its sole risk and expense (but at the Charterer’s sole risk and expense if an Event of Default shall have occurred and be continuing) designate up to two persons to be present at any such drydocking,

and the Charterer shall cooperate with the Owner to provide such persons reasonable access to the Vessel while in drydock.  The Charterer agrees to deliver to the Owner and the Head Owner annually at the Charterer’s own cost and expense a certificate issued by the Classification Society confirming the Vessel remains in class.

(c)
Reports and Rights of Inspections .  The Charterer will keep proper books of record and account in which full and correct entries will be made of all dealings or transactions of, or in relation to, the business and affairs of the Charterer respecting the Vessel in accordance with U.S. Generally Accepted Accounting Principles (“ US GAAP ”) consistently applied and on a consistent basis, and will furnish to the Owner or cause to be furnished to the Owner:
(i)     Financial Statements of the Guarantor and the Charterer .  The Charterer will cause the Guarantor to deliver the consolidated profit and loss statements, reconciliation of retained earnings statements and consolidated statements of funds flow of the Guarantor and its consolidated subsidiaries, including the Charterer.  The Charterer agrees to furnish to the Owner (x) within one hundred and eighty (180) days after the close of each fiscal year, beginning with the close of the fiscal year 2017, the year-end audited consolidated financial statements of the Guarantor including balance sheet and related profit and loss and surplus statements certified by its auditors; (y) within ninety (90) days after the close of each fiscal half year, the unaudited semi-annual financial statements of the Guarantor containing profit and loss statements and a balance sheet and certified by the Responsible Officer, subject to year-end audits for the Guarantor by the Guarantor’s auditors and for the Charterer by the Charterer’s auditors; and (z) such other financial information as the Owner may from time to time reasonably request relating to the financial condition of the Guarantor and the Charterer.  Such financial statements shall be prepared in accordance with US GAAP, consistently applied on a consistent basis.  For the purposes of this Section 7(c)(i), “ Responsible Officer ” shall mean an officer, the chief financial officer, treasurer, assistant treasurer or controller of the Guarantor.
(ii)     Inspection Rights – Vessel .  Without unreasonably interfering with the trading, use and operation of the Vessel by the Charterer and on reasonable prior notice, the Owner or any persons designated by the Owner shall have the right at any reasonable time, but will be under no obligation, to inspect (and make extracts from) all records maintained by the Classification Society respecting the Vessel and to inspect the Vessel to ascertain its condition, to satisfy itself that the Vessel is being properly maintained and repaired, and to otherwise confirm that the Charterer is in compliance with this Charter; provided, that prior to any such inspection the persons inspecting the Vessel shall execute a release of the Charterer, releasing the Charterer from liability for any personal claims arising during such inspection of the Vessel.  The cost of such inspection shall be borne by the Owner if no Event of Default shall have occurred and be continuing, and otherwise such cost shall be borne by the Charterer.
(iii)     Inspection Rights – Generally .  The Charterer will, upon request, furnish to the Owner such information as the Owner may reasonably request with respect to the condition, maintenance or insurance of the Vessel

or its employment, position, use or operation and copies of any certificates or other documents relating to the Vessel or its condition or operation required to be in force under any applicable law or regulation, including, but not limited to copies of classification certificates and any certificates issued by the Flag State, and will permit the Owner or its representative at any reasonable time or times during normal business hours to inspect, audit and examine the books or records of the Vessel or of the Charterer relating to the condition, maintenance or insurance of the Vessel and to take extracts therefrom.  The cost of any such inspection, audit, examination or copying shall be borne by the Owner if no Event of Default shall have occurred and be continuing, and otherwise such cost shall be borne by the Charterer.

(d)
Lay-up .  The Charterer shall be responsible for laying the Vessel up in a safe and acceptable condition and location during such a time as the Vessel is not employed or seeking employment.  During any such lay-up period, the Charterer shall ensure that the Vessel is adequately supervised and manned at all times.  The costs and expenses in any way related to such lay-up or any reactivation shall be paid by the Charterer.
8.     Alterations .

(a)
Structural Modifications .  The Charterer will not make any material structural or other changes (other than the installation of the Approved Scrubber, which installation shall be in accordance with this Charter, including Section 6 (g)) in the Vessel (a “ Modification ”) without the prior written consent of the Head Owner and the Owner, which consent of the Owner shall not be unreasonably withheld or delayed; provided that such Modification does not in the Owner’s reasonable opinion diminish (i) the fair market value of the Vessel or (ii) the useful economic life of the Vessel.  No repairs or maintenance to the Vessel required by Section 7(b) above or 8(d) below shall constitute a Modification for the purposes of this Section 8.  For the avoidance of doubt, all Modifications will be made at the expense of the Charterer.

(b)
Alterations and Restoration .  Subject to the maintenance provisions of this Charter, the Charterer may at any time alter or remove items of equipment, or may fit additional items of equipment required to render the Vessel available for a customer’s purpose; provided the Charterer absorbs the cost and time of such alterations and the Charterer restores prior to redelivery of the Vessel any items so altered or removed as the case may be.  Such changes shall not be made without the appropriate approval of the Classification Society and certifying authorities.

(c)
Replacements .  The Charterer shall from time to time during the Charter Term, at its own cost and expense, replace such items of equipment on the Vessel as shall be so damaged or worn as to be unfit for use.  Any replacement items of equipment, to the extent they replace items of equipment owned by the Owner or the Head Owner, shall without further action become property of the Owner or the Head Owner, as the case may be.

(d)
Required Modifications .  Subject to Section 8(g) below, the Charterer, at its own cost and expense, shall make all Modifications required by any applicable law or required by any governmental agency having jurisdiction over the

Vessel, including, if applicable, the United States Coast Guard, or required by the Classification Society including, if applicable, the installation of a ballast water treatment system.

(e)
Title to Modifications .  Title to each Modification shall vest as follows:
(i)     in the case of each Modification which cannot be readily removed from the Vessel without causing material diminishment to the value, utility or remaining useful life of the Vessel (a “ Non-Severable Modification ”) whether or not the Owner shall have provided or arranged financing (in whole or in part) of the cost of such Modification, the Head Owner shall, without further act, effective on the date such Modification shall have been incorporated into the Vessel, acquire title to such Non-Severable Modification;
(ii)     in the case of each Modification which can be readily removed from the Vessel without causing material diminishment to the value, utility or remaining useful life of the Vessel (a “ Severable Modification ”) that is not required by applicable law or required by any governmental agency having jurisdiction over the Vessel or required by the Classification Society, the Charterer shall retain title to such Severable Modification;
(iii)     in the case of Severable Modifications required by applicable law or required by any governmental agency having jurisdiction over the Vessel or required by the Classification Society, title to such Modifications shall immediately vest in the Head Owner at no cost to the Head Owner and without further action by the Charterer; provided, however, that the Charterer shall take such actions as may be reasonably required by the Owner and/or the Head Owner to evidence the transfer of title.
Immediately upon title to a Modification vesting in the Head Owner pursuant to subparagraphs (i) or (iii) of this Section 8(e), such Modification shall, without further act, become subject to this Charter and be deemed part of the Vessel for all purposes of this Charter.  Modifications, title to which remains in the Charterer pursuant to subparagraph (ii) of this Section 8(e), shall not be deemed a part of the Vessel.

(f)
Removal of Property .  Subject to compliance, in all material respects, with applicable law and so long as no Event of Default shall have occurred and be continuing, the Charterer may remove any Severable Modification to which the Head Owner does not have title, and any other property to which the Charterer shall have title as provided in this Section 8, provided that the Charterer, at its own cost and expense and prior to the end of the Charter Term, shall repair any damage to the Vessel (or any part thereof) caused by such removal.

(g)
Contest of Requirements of Law .  If, with respect to requirement of applicable law or governmental agency having jurisdiction over the Vessel or requirement of the Classification Society (i) the Charterer is contesting diligently and in good faith by appropriate proceedings such requirement or (ii) compliance with such requirement shall have been excused or exempted by a valid non-conforming use permit, waiver, extension or forbearance exempting the Charterer from such requirement or (iii) the Charterer shall be

making a good faith effort and shall be diligently taking the appropriate steps to comply with such requirement, then the failure by the Charterer to comply with such requirement shall not constitute an Event of Default hereunder; provided, however, that such contest or non-compliance does not involve (A) any danger of criminal liability being imposed on the Head Owner and/or the Owner or (B) any material risk of (1) the imminent arrest or sale of, or the creation of any lien (other than a Permitted Lien) on, the Vessel or (2) material civil liability being imposed on the Owner and/or the Head Owner.  The Charterer agrees to give prompt written notice to the Owner in detail sufficient to enable the Owner and the Head Owner to ascertain whether such contest may have any material adverse effect of the type described in the above proviso.
9.     Insurance-General .
Subject to Section 23, below, the Charterer shall, at its own cost and expense, keep the Vessel (which, for the avoidance of doubt, includes the Approved Scrubber, once installed) insured against hull and machinery risks, protection and indemnity risks, pollution risks and war risks, in the forms and in the amounts (including deductibles) and with underwriters, companies or clubs, as are reasonably acceptable to the Owner and the Head Owner during the Charter Term or, where applicable, in such minimum amounts (including deductibles) as specified in this Charter.  The Vessel’s hull and machinery insurance will be in an amount not less than the greater of (x) the full commercial value of the Vessel and (y) the Loss Value (as set forth in Exhibit A-1 hereto) then in effect.  The Charterer shall also keep the Vessel entered into a Protection and Indemnity Club (“P&I Club”) that is a member of the International Association of Protection and Indemnity Clubs under standard P&I Club rules.  Pollution liability coverage shall be not less than United States Dollars One Billion (US$1,000,000,000).The Owner, Sumitomo Mitsui Banking Corporation
(“ Sumitomo ”) and the Head Owner shall also each be a co-assured of the P&I Club in respect of the Vessel, and the Charterer agrees to pay or reimburse the Owner, Sumitomo and the Head Owner, respectively, the costs of such entry, including any premium, club calls or assessments in connection therewith.  In addition, the Charterer shall, at its own cost and expense, place innocent owner’s insurance, in form and in amount (including deductibles) and with underwriters, companies or clubs, as are reasonably acceptable to the Owner and/or the Head Owner (for the avoidance of doubt, such innocent owner’s insurance to name both the Owner and the Head Owner) during the Charter Term and, if the Charterer is unable to place such innocent owner’s insurance because insurance industry practice requires that the Owner or the Head Owner do so, the Owner or the Head Owner may place innocent owner’s insurance, in form and in amount (including deductibles) and with underwriters, companies or clubs, as are reasonably acceptable to the Owner or the Head Owner during the Charter Term.  If the Owner or the Head Owner places innocent owner’s insurance in accordance with the foregoing, the Charterer agrees to pay or reimburse the Owner or the Head Owner, as applicable, the costs thereof, upon receipt of a demand accompanied by copies of the relevant invoices or other similar evidence of such costs.

(a)
Form of Insurance; Indemnity .  All insurance required under this Section shall be in such form and with such underwriters, companies or clubs as the Owner and the Head Owner shall reasonably approve.  All insurance contracts shall (i) provide that the insurer’s right of subrogation against the Owner and/or

Sumitomo and/or the Head Owner shall be waived; (ii) provide that such insurance shall be primary and without right of contribution from any other insurance which is carried by the Owner and/or Sumitomo and/or the Head Owner; and (iii) be issued by underwriters or insurers with an A.M. Best Co. insurance rating upon issuance of the policy of “A-” (or higher), which underwriters or insurers may not be an affiliate of the Owner or Charterer or any sub-bareboat charterer.  The Owner (and if applicable, the Owner’s bank as mortgagee of the Vessel), Sumitomo and the Head Owner (and if applicable the Head Owner’s bank as mortgagee of the Vessel), in the case of protection and indemnity coverage, shall be named as named assureds on all insurance required under this Section, but where commercially available without liability for premiums; and the Owner (and if applicable, the Owner’s bank as mortgagee of the Vessel) and the Head Owner (and if applicable the Head Owner’s bank as mortgagee of the Vessel) in respect of hull and machinery insurance, shall be named as additional named assured and the loss payee(s); provided, however, that unless an Event of Default shall have occurred and be continuing, the underwriters may pay any claims under such hull and machinery insurance not in excess of United States Dollars One Million (US$1,000,000) directly to the Charterer for the repair of the Vessel.
All policies shall provide that the Owner (and if applicable, the Owner’s bank as mortgagee of the Vessel) and the Head Owner (and if applicable the Head Owner’s bank as mortgagee of the Vessel) and the Charterer will be given at least fourteen (14) days’ notice of cancellation, non-renewal or material alteration, or such shorter notice period (if any) as may be available under relevant market or standard insurance practice and/or terms, where such practice and/or terms do not provide for cancellation with such minimum fourteen (14) days’ notice, or such shorter notice period (if any) as may be available under relevant market or standard insurance practice and/or terms, where such practice and/or terms do not provide for cancellation with such minimum fourteen (14) days’ notice.  Deductibles up to a maximum of United States Dollars Five Hundred Thousand (US$500,000) are permitted without the prior written consent of the Owner.  Any deductibles (save for deductibles in respect of innocent owner’s insurance) under such policies shall always be for the account of the Charterer.  The Charterer agrees to indemnify and hold harmless the Owner and / or Sumitomo and/or the Head Owner (and if applicable the Head Owner’s bank as mortgagee of the Vessel) from and against any liability imposed on or incurred by the Owner, Sumitomo and/or the Head Owner (and if applicable the Head Owner’s bank as mortgagee of the Vessel) for any premiums, club calls or assessments with respect to any insurance required under this Section.  For the avoidance of doubt, the Charterer’s indemnification obligations under Section 18 shall, subject to Section 18, include (i) all Claims (as defined below) and (ii) any Claim made against the Head Owner, the Owner and / or Sumitomo by the underwriters of the insurance required under this Charter pursuant to rights of subrogation.

(b)
Proof of Insurance .  The Charterer shall furnish the Owner and the Head Owner on the Delivery Date and, at such other times on request as soon as practically possible, and in any event at least annually, with copies of certificates of insurance (certificates of entry for Protection and Indemnity) evidencing all insurance policies and showing the Owner, Sumitomo and the

Head Owner as co-assureds on the Protection and Indemnity Insurance and the Owner and the Head Owner as loss payees (as set forth in the Attachments to Exhibit B hereto) on the hull & machinery coverage and cover notes or other documents evidencing the creation, renewal, amount and payment of the insurance maintained on the Vessel and for which period the insurance premiums are paid.

(c)
Forced Insurance .  In the event the Charterer fails to procure and maintain insurance in accordance with this Section 9, the Owner and/or the Head Owner may, but shall not be obligated to, effect and maintain the insurance or entries in a P&I Club (including on behalf of Sumitomo) as required herein and to pay the premiums therefor and, upon the Owner’s giving written notice and all relevant supporting invoices to the Charterer of the amounts of premiums and costs so incurred by either the Owner and/or the Head Owner, the Charterer shall reimburse the Owner and/or the Head Owner, as applicable, for such amounts, together with interest thereon from the date of payment by the Owner and/or the Head Owner to the date of reimbursement, at the Default Rate, not later than fifteen (15) days after such notice.

(d)
Termination Due To Loss .  This Charter shall be terminated due to a total or constructive total loss or an agreed, arranged or compromised total loss of the Vessel as determined by underwriters (“ Total Loss ”), and Charter Hire pursuant to Section 5 shall be payable until the date on which underwriters make a determination that the event occurred which gave rise to the Total Loss (the “ Loss Termination Date ”).  Termination shall occur only upon payment of all amounts due under Section 9(e) below.

(e)
Payments in Event of Total Loss . In the event of Total Loss of the Vessel, the Owner, in lieu of any and all other claims and damages, shall receive from the Charterer, and the Charterer shall pay to the Owner, an amount equal to the sum of (i) any accrued and unpaid Charter Hire payable in accordance with Section 5 calculated through and, if applicable, including, the Loss Termination Date; (ii) the Loss Value of the Vessel as of the date on Exhibit A-1 hereto that immediately precedes the Loss Termination Date (or, if the Loss Termination Date is a Charter Hire Payment Date, the Loss Value of the Vessel as of such Loss Termination Date as set out in Exhibit A-1); provided,  however, if the event that gives rise to a Total Loss of the Vessel occurs prior to the first date listed on Exhibit A-1, the Loss Value shall be the amount listed for the first date on such Exhibit A-1, (iii) interest on the amount referred to in Section 9(e)(ii) above from the Loss Termination Date until the date such amount is actually paid to, and received by, the Owner at the Total Loss Rate, and (iv) any Additional Hire then due and owing.  The Charterer’s obligation to pay amounts set forth in (i), (ii), (iii) and (iv) (the “Total Loss Payment”) above shall be absolute and shall be due to the Owner upon the earlier of the Charterer’s receipt of insurance proceeds and one hundred and ten (110) days following the Loss Termination Date.  The Owner may, subject to the Charterer’s consent, which consent shall not be unreasonably withheld, and at the Owner’s own expense, place additional total loss only coverage.  Any proceeds paid under such additional total loss only insurance shall be paid directly by insurers to the Owner and shall not be included in the calculation set forth above.  The Charterer may place, at the Charterer’s own cost and expense and as a separate policy from any insurances otherwise placed (or to

be placed) in accordance with this Charter, Increased Value insurance (subject to the Owner’s prior consent, and subject to such Increased Value insurance in no way prejudicing in any way whatsoever the recovery by the Head Owner and/or the Owner of any amount that would otherwise be payable under any other insurances placed in accordance with this Charter), the proceeds of which shall be paid directly by insurers to the Charterer and shall not be included in the calculation set forth above.
The Owner agrees that to the extent that the Charterer pays the Total Loss Payment from its own funds the full net proceeds on a Total Loss of the insurances in respect of the Vessel and placed by the Charterer shall be for the account of and shall be paid or released directly to the Charterer.  Further, in such circumstances, the Owner agrees to permit the release of the Cash Collateral Amount so that the same shall be applied directly in part payment of the Total Loss Payment, provided that such application shall only occur immediately after the Charterer pays that part of the Total Loss Payment not funded from the Cash Collateral Amount.
For the purposes of this Charter:
“ Total Loss Rate ” shall mean, for any day, a rate of interest per annum equal to the lesser of (i) LIBOR in effect on such day plus five percent (5 %) and (ii) the maximum rate permitted by applicable law.

(f)
Limitation of Liability .  Nothing in this Charter shall be construed or held to deprive the Owner, Sumitomo, the Charterer or the Vessel of any right to claim limitation of liability against third parties (other than the Head Owner) provided by any applicable statute of any jurisdiction.

(g)
Wreck Removal .  In the event the Vessel becomes a wreck or obstruction to navigation, the Charterer shall, if required by applicable law, remove such wreck or obstruction and shall indemnify the Owner and the Head Owner against any sums whatsoever which the Owner and the Head Owner shall become liable to pay or shall pay in consequence of the Vessel becoming a wreck or obstruction to navigation.

(h)
Requisition . In the event that the Vessel shall be requisitioned for hire, or otherwise taken by any governmental agency on the basis of a bareboat or time charter (other than a requisition of title or a taking which constitutes a Total Loss), during the Charter Term, the Charterer will continue to pay Charter Hire and will collect and retain the compensation, reimbursements or awards for such requisition, or other taking of the Vessel received. If the Owner receives the compensation, reimbursements or awards, then, provided no Event of Default shall have occurred and be continuing, the Owner agrees that it will turn over forthwith to the Charterer all compensation, reimbursements or awards for such requisition or other taking of the Vessel received by the Owner. For the avoidance of doubt, if the Owner receives the compensation, reimbursements or awards and an Event of Default shall have occurred and be continuing, then the compensation, reimbursements or awards shall be applied in accordance with Section 17.

10.
Liens .
(a)   Neither the Charterer nor any of its employees shall have any right, power or authority to create, incur or permit to be imposed upon the Vessel any lien whatsoever during the Charter Term, except for (i) crew’s wages (including the master of the Vessel), or wages of stevedores when employed directly by the Charterer, any sub-charterer or the master or agent of the Vessel, (ii) damages arising out of maritime tort, (iii) general average and salvage (including contract salvage), (iv) liens for taxes not yet due (provided that the Charterer has established appropriate reserves for the payment of such taxes), (v) other maritime liens arising in the ordinary course of the Charterer’s business provided, such other maritime liens shall be permitted only to the extent such amounts are not more than twenty five (25) days past due unless such amounts are being contested in good faith by appropriate legal proceedings diligently pursued and for which appropriate reserves are established, and (vi) any mortgage executed by the Owner and/or the Head Owner (collectively, “ Permitted Liens ”). The Charterer shall carry a copy of this Charter with the Vessel’s papers, and on demand will exhibit the same to any person having business with the Vessel which might give rise to any lien thereon, other than liens for crew’s wages, general average and salvage. The Charterer will place and keep prominently displayed in the chart room and the captain’s cabin on the Vessel in a conspicuous place, a notice, framed under glass, printed in plain type of such size that the paragraph of reading material shall cover a reasonable space acceptable to the Owner reading as follows:
“THIS VESSEL IS OWNED BY CFT INVESTMENTS 1 LLC AND IS UNDER CHARTER TO CARGILL INTERNATIONAL SA PURSUANT TO THE TERMS OF THE BAREBOAT CHARTER AGREEMENT DATED [●] 2018 (AS AMENDED AND SUPPLEMENTED FROM TIME TO TIME, THE “CHARTER”) AND IS UNDER SUB-CHARTER TO CHAMPION MARINE CO. PURSUANT TO THE TERMS OF THE SUB-CHARTER DATED [●] 2018 (AS AMENDED AND SUPPLEMENTED FROM TIME TO TIME, THE “SUB-CHARTER”). UNDER THE TERMS OF THE CHARTER, WHICH IS A FINANCING CHARTER PURSUANT TO A SUPPLEMENT TO BAREBOAT CHARTER AGREEMENT DATED AS OF [●] 2018 (NEW YORK TIME) UNDER THE MARITIME LAWS OF THE REPUBLIC OF THE MARSHALL ISLANDS, AND THE SUB-CHARTER, NEITHER THE HEAD CHARTERER, THE SUB-CHARTERER NOR ANY OTHER SUB-CHARTERER, NOR THE MASTER, NOR ANY OTHER PERSON HAS THE RIGHT, POWER OR AUTHORITY TO CREATE, INCUR OR PERMIT TO BE PLACED OR IMPOSED UPON THIS VESSEL ANY LIEN WHATSOEVER OTHER THAN PERMITTED LIENS AS DEFINED IN THE CHARTER.”
(b)     With respect to any claims and demands made by any person against the Owner or the Head Owner or the Vessel, except if the claim or demand has been brought about as a result of an action or omission of the Owner or the Head Owner (as the case may be), the Charterer hereby agrees as follows:
(i)    the Charterer shall warrant and defend title to and possession of the Vessel and every part thereof;
(ii)     the Charterer shall pay and discharge, and forthwith remove or cause to be removed, any lien (other than a Permitted Lien) which shall be filed against

or otherwise attach to the Vessel; provided, however, that, subject to subsection (c) of this Section, the Charterer need not pay and discharge or remove any lien that is being contested by the Charterer in good faith by appropriate legal proceedings being diligently pursued, and with respect to which the Charterer has posted an appropriate bond with a good and sufficient surety, or has deposited in escrow with the Owner cash in the amount claimed by the holder of such lien, to secure the payment thereof.
(c)     N otwithstanding the foregoing provisions of this Section 10, if a libel shall be filed against the Vessel, or if the Vessel shall be seized, arrested, levied upon and taken into custody or detained in any proceeding in any court or tribunal or by any government or under colour of authority, the Charterer shall give notice to the Owner as soon as practicable but in any event not later than three (3) Business Days following such arrest and taking or detention and (except in connection with any taking or requisition of the title or use of the Vessel by any governmental authority or as a result of the wilful misconduct or gross negligence of the Owner) cause the Vessel to be released therefrom within forty five (45) days from the date of such seizure, arrest or detention, or within such lesser time as may be necessary to avoid prejudice to the interests of the Owner with respect to the Vessel. Without limiting the Charterer’s obligations under Section 18 of this Charter, the Charterer shall hold harmless, defend and indemnify the Owner, the Head Owner and the Vessel from and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, suits, judgments, costs and expenses, including attorneys’ fees, of whatsoever kind and nature, imposed on, incurred by or claimed against the Owner, the Head Owner or the Vessel, in any way relating to or arising out of the assertion of a lien against the Vessel, including, without limitation, a Permitted Lien (but excluding any lien claimed by any person claiming the same by, through or under the Owner including as a result of the wilful misconduct or gross negligence of the Owner or the Head Owner).
11.   Mortgages; Financing; Subordination .
(a)   The Charterer hereby agrees that should the Owner and/or the Head Owner wish to mortgage the Vessel or assign this Charter in connection with any financing arrangements of the Owner and/or the Head Owner, the Charterer shall agree to post notices of the mortgage and the Charter as reasonably required, execute such documents reasonably acknowledging the terms and existence of the mortgage, and the assignment of charter, and otherwise cooperate reasonably with the Owner and/or the Head Owner and any mortgagee in respect of such financing. Any such mortgage shall provide that the Charterer shall have the right of quiet enjoyment in its use of the Vessel so long as no Event of Default has occurred and is continuing under this Charter and further that such mortgage shall not impede (if applicable) any purchase option of the Charterer under the Multipartite Agreement (which will be confirmed in a separate letter of quiet enjoyment in favour of the Charterer), and that notice of any event of default under such mortgage shall be promptly given to the Charterer. Any reasonable costs and expenses associated with such activity will be borne by the Owner. Any mortgagee of the Vessel shall be qualified under applicable law and regulations to hold a mortgage on the Vessel without jeopardizing the Vessel’s registration with the Flag State. Any additional insurance costs arising from or related to any mortgage placed on the Vessel by the Owner and/or the Head Owner shall be the responsibility of the Owner.

(b)   The Charterer hereby agrees that its right to use the Vessel and other rights related thereto, shall, in all respects, be subject, subordinate and junior to the lien of any preferred mortgage or other security agreement created by the Owner and/or the Head Owner, and to the rights of the holder thereof, whether executed heretofore or hereafter (subject to the Charterer’s rights of quiet enjoyment under this Section 11 and its further rights set forth in Sections 12 and 14). After notice of default in payment or performance under any such mortgage or security agreement, subject always to the Charterer’s continued right of quiet enjoyment in its use of the Vessel, the Charterer may perform or pay Charter Hire for the Vessel to the holder of such security, and the same, to the extent of such payment, shall constitute payment of Charter Hire as if it had been made to the Owner.
(c)   The Owner agrees and confirms that, so long as no Event of Default hereunder has occurred and is continuing, the Charterer shall have exclusive possession, control, and quiet enjoyment in its use of the Vessel during the Charter Term, subject to the conditions of this Charter, without hindrance or molestation by the Owner, or any other person claiming by, through or under the Owner.
12.     End of Charter and Other Options .

(a)
On the last day of the Charter Term, unless an Event of Default or a failure to pay the whole or part of any Charter Hire on the due date thereof shall have occurred and be continuing, the Charterer shall purchase the Vessel for (v) the respective Purchase Price as set forth below in Section 12 (d) (w) Basic Charter Hire due through and including the date of purchase, (x) any applicable taxes (other than any taxes based upon or measured by the income of the Owner), (y) expenses of sale (including the Owner’s and the Head Owner’s reasonable counsel fees), and (z) any Additional Hire then due hereunder;

(b)
Subject to the terms and conditions of this Section 12, upon written notice from the Charterer to the Owner (with a copy to the Head Owner) setting forth the Charter Hire Payment Date on which the Charterer wishes to purchase the Vessel and pay to the Owner the Purchase Option Payment Amount (as such term is defined below) (the “ Purchase Option Notice ”) (such Purchase Option Notice to be given not less than one hundred and thirty (130) days prior to the Charter Hire Payment Date during the Charter Term on which the Charterer wishes to purchase the Vessel), the Charterer shall have the option to, unless an Event of Default or a failure to pay the whole or part of any Charter Hire on the due date thereof shall have occurred and be continuing, purchase the Vessel on the Charter Hire Payment Date set forth in the Purchase Option Notice for (v) the Purchase Price as set forth below in Section 12 (d) plus (w) Charter Hire due through and including the date of purchase (x) any applicable taxes (other than any taxes based upon or measured by the net income (however denominated) of the Owner) (y) expenses of sale (including the Owner’s and the Head Owner’s reasonable counsel fees), (z) the amount due under clause 109 of the Time Charter and (zz) either (i) plus any Arrangements Credit (as defined in Section 12(j)), or (ii) less any Arrangements Debit (as defined in Section 12(j)). The aggregate total of (v), (w), (x), (y), (z) and (zz) the “ Purchase Option Payment Amount ”.


(c)
Not less than one hundred and seventy (170) days prior to the end of the Charter Term, the Charterer shall provide the Owner with irrevocable written confirmation of its purchase of the Vessel pursuant to Section 12(b). Should the Charterer fail to provide such confirmation or a notice pursuant to Section 12(b), the Charterer shall be obliged to purchase the Vessel in accordance with Section 12(a).

(d)
If the Charterer:
(i)  is obliged under this Charter to purchase the Vessel at the end of the Charter Term pursuant to Section 12(a); or
(ii)   elects to purchase the Vessel pursuant to Section 12(b),
the purchase price of the Vessel at the relevant time (being, in the case of Section 12 (d)(i), the end of the Charter Term, and, in the case of Section 12 (d)(ii), the Charter Hire Payment Date on which the Charterer purchases the Vessel in accordance with Section 12 (b)) (the “ Purchase Price ”) shall be as is set forth in the “Purchase Price” column of Exhibit A-1 of this Charter for the relevant time. In such circumstances, the Owner shall permit the release of the Cash Collateral Amount so that the same can be applied directly by the Charterer in part payment of the Purchase Price and within the time frames required for payment of the Purchase Price, provided that: (i) such permission and release shall only occur after the Owner has received in full (to the satisfaction of the Owner (such satisfaction in the Owner’s sole discretion)) that part of the Purchase Price not funded from the Cash Collateral Amount; (ii) all liabilities of the Charterer under this Charter and the Multipartite Agreement shall have first been discharged in full to the satisfaction of the Owner (such satisfaction in the Owner’s sole discretion).

(e)
ANY SALE OF THE VESSEL TO THE CHARTERER (OR AS THE CHARTERER MAY DIRECT, A NOMINEE) PURSUANT TO THIS SECTION 12 SHALL BE MADE WITHOUT ANY WARRANTIES BY THE OWNER OR THE HEAD OWNER WHATSOEVER, EITHER EXPRESS OR IMPLIED, EXCEPT THAT THE OWNER, OR, AS THE CASE MAY BE, THE HEAD OWNER, SHALL WARRANT THAT THE VESSEL IS FREE AND CLEAR OF ANY LIENS OR ENCUMBRANCES CREATED BY OR THROUGH THE OWNER, OR, AS THE CASE MAY BE, THE HEAD OWNER AND ITS PREDECESSORS IN TITLE EXCEPT FOR THE SELLER OR THE CHARTERER (OR ANY SUBSIDIARY OR AFFILIATE THEREOF) AND THAT THE OWNER, OR, AS THE CASE MAY BE, THE HEAD OWNER, IS TRANSFERRING WHATEVER TITLE IT ORIGINALLY RECEIVED. WITHOUT LIMITING THE FOREGOING, ANY SUCH SALE SHALL BE ON AN “AS IS, WHERE IS” BASIS WITH NO WARRANTIES, EITHER EXPRESS OR IMPLIED, AS TO TITLE (EXCEPT AS SET FORTH IN THE PREVIOUS SENTENCE) OR THE DESIGN, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, SEAWORTHINESS OR CONDITION OF THE VESSEL, OR ELIGIBILITY OF THE VESSEL TO ENGAGE IN ANY PARTICULAR TRADE. ALL SUCH WARRANTIES SHALL BE EXPRESSLY WAIVED

BY THE CHARTERER AT THE TIME OF SUCH SALE. ALL SALES, USE AND OTHER TAXES WHICH MAY BECOME DUE AS A RESULT OF THE SALE SHALL BE FOR THE SOLE ACCOUNT OF THE CHARTERER. UPON ITS RECEIPT IN GOOD COLLECTED FUNDS OF THE AMOUNT PAYABLE PURSUANT TO SECTION 12(A) OR, AS THE CASE MAY BE, SECTION 12(B), THE OWNER AGREES TO EXECUTE AND DELIVER PROMPTLY (OR, AS THE CASE MAY BE, PROCURE THAT THE HEAD OWNER EXECUTES AND DELIVERS) TO THE CHARTERER OR THE CHARTERER’S NOMINEE ANY AND ALL DOCUMENTS REQUIRED BY THE LAW OF THE FLAG STATE FOR THE PURPOSE OF RE-REGISTERING THE VESSEL IN THE NAME OF THE CHARTERER (OR AS THE CHARTERER MAY DIRECT), INCLUDING, WITHOUT LIMITATION, A BILL OF SALE COVERING THE VESSEL IN FAVOR OF THE CHARTERER (OR AS THE CHARTERER MAY DIRECT, A NOMINEE) TRANSFERRING WHATEVER TITLE THE OWNER, OR AS THE CASE MAY BE, THE HEAD OWNER, HAS, WITHOUT ANY REPRESENTATION OR WARRANTY WHATSOEVER EXCEPT AS SET OUT IN THIS SECTION 12(E).

(f)
For the purposes of establishing the Market Value (as such term is defined in Section 12(g) below) of the Vessel:
(A)     if the Charterer does not exercise its option under Section 12(b), then no later than ninety (90) days prior to the last day of the Charter Term; or
(B)     if the Charterer exercises its early purchase option under Section 12(b), then no later than five (5) days after the date of the Purchase Option Notice,
the Charterer and the Owner shall appoint a “ Panel of Approved Brokers ” in accordance with this Section 12(f):
(i)    Each of the Charterer and the Owner shall appoint an Approved Broker (as such term is defined below) to be included on the Panel of Approved Brokers, and the Approved Brokers so appointed by the Charterer and the Owner (each an “ Appointed Broker ”) shall jointly select a third Approved Broker (the “ Third Broker ” and subject to 12(f)(ii), below, the two Appointed Brokers together with the Third Broker, together constituting the Panel of Approved Brokers).
(ii)     In the event that either the Charterer or the Owner fails to appoint an Approved Broker on or before the date: in the case of (A) above, seventy (70) days prior to the last day of the Charter Term; or, in the case of (B) above, ten (10) days following the date on which the Purchase Option Notice is served, the Panel of Approved Brokers shall be comprised solely of the Approved Broker appointed by the Charterer or the Owner (as the case may be).
(iii)     Subject to Section 12(f)(iv), each of the Charterer and the Owner shall bear the cost and expense of their respective Appointed Broker, and the costs and expenses of the Third Broker shall be borne equally by the Charterer and the Owner.

(iv)     In the event that that Panel of Approved Brokers is constituted of a single Approved Broker in accordance with Section 12(f)(ii) above, the costs and expenses of the valuation made by such Approved Broker shall be borne jointly by the Charterer and the Owner.

(g)
Subject to Section 12(f)(ii), each of the Charterer and the Owner shall instruct their respective Appointed Broker, and shall jointly instruct the Third Broker, to consider the market value of the Vessel:
(A)     if the Panel of Approved Brokers has been appointed pursuant to Section 12 (f)(A) on the date thirty (30) days prior to the last day of the Charter Term based on the then actual condition of the Vessel, on an arm’s length basis and free of charters, and the average of the said valuations shall be the “Market Value” (as such term is used in this Section 12) and
(B)     if the Panel of Approved Brokers has been appointed pursuant to Section 12(f)(B) on the date twenty (20) days after the date of the Purchase Option Notice, based on the then actual condition of the Vessel, on an arm’s length basis and free of charters, and the average of the said valuations shall be the “Market Value” (as such term is used in this Section 12).

(h)
In the event that the Market Value is greater than the Floor Price as set forth in the “Floor Price” Column of Exhibit A-1 of this Charter on:
(i)  first Charter Hire Payment Date following the date of the Purchase Option Notice if the Charterer exercises its option under Section 12(b)); or
(ii) the last day of the Charter Term if the Charterer does not exercise its option under Section 12 (a),
then the Charterer shall be obliged to pay to the Owner an amount equal to twenty per cent (20%) of the difference between the Market Value and the Floor Price on, as applicable,
(A) first Charter Hire Payment Date following the date of the Purchase Option Notice if the Charterer exercises its option under Section 12(b)); or
(B) the last day of the Charter Term if the Charterer does not exercise its option under Section 12 (a),
(the “ Profit Share Amount ”). The Profit Share Amount shall become due and be paid concurrently with the amounts payable by the Charterer to the Owner pursuant to Section 12(a) or, as the case may be, Section 12(b), above, including, but not limited to, the Purchase Price. For the avoidance of doubt, the Profit Share Amount shall be calculated without regard to any Arrangements Credit or Arrangements Debit (as each term is defined in Section 12(j)) or to any amount due under clause 109 of the Time Charter.

(i)
For the purposes of this Section 12, the “Approved Brokers” shall be deemed to mean:

(1)
Arrow Shipbroking Group;


(2)   Braemar ACM Shipbroking;
(3)   Clarksons Platou;
(4)   Howe Robinson & Co. Ltd.;
(5)   Galbraith’s Limited;
(6)   Simpson, Spence and Young; and
(7)   such other internationally recognised shipbrokers as may be mutually agreeable to both the Charterer and the Owner,
(and each of the Approved Brokers, an “ Approved Broker ”).

(j)
If the Charterer exercises its early purchase option under Section 12(b) or if the Owner, by written notice to the Charterer, declares the Charterer in default hereunder pursuant to Section 17 and the Event of Default in question is an Event of Default under the Bareboat Charter, and the Charterer is entitled to purchase the Vessel pursuant to the terms of clause 5 of the Multipartite Agreement and the Vessel is to be acquired by the Charterer pursuant to such terms, no later than three (3) Business Days before the date of transfer of ownership of the Vessel to the Charterer, the Owner shall notify the Charterer of such amount as the Owner certifies that, as a result of the exercise by the Charterer of its early purchase option under Section 12(b) or the exercise by the Charterer of its option in accordance with clause 5 of the Multipartite Agreement, the Owner shall either be: (i) in credit (“ Arrangements Credit ”) or (ii) in debit (“ Arrangements Debit ”), as a result (including all the Owner’s losses, damages, liabilities, expenses and costs incurred by the Owner in association therewith) of terminating, reversing or unwinding any interest rate swap arrangements from or with other persons (including, but not limited to, the Head Owner).

(k)
Unless and until all the applicable foregoing payments and performance set forth in this Section 12 have been made and/or performed in full by the Charterer, the Charterer’s obligations under this Charter, including, without limitation, the obligation to pay Charter Hire for the Vessel, shall continue in full force and effect.
13.   Representations and Warranties; Owner Covenants .

(a)
Charterer’s Representations .  The Charterer represents, warrants, covenants, and agrees to and with the Owner that: (i) the Charterer is a company duly organized, validly existing, and in good standing under the laws of the Republic of the Marshall Islands, has the power to own its property and assets, and is duly qualified in each jurisdiction where the nature of its operations requires such qualification, (ii) the execution, delivery, and performance of this Charter are within the Charterer’s power, have been duly authorized by all necessary limited liability company action, do not contravene the Charterer’s certificate of organization or regulations, or similar documents, or violate any judgment, order or decree applicable to the Charterer, and do not contravene any law, any order of any court or other agency of government, or any

agreement or instrument or contractual restriction binding on or affecting any of its property, or constitute a default thereunder, and (iii) this Charter constitutes the legal, valid and binding obligation of the Charterer enforceable against the Charterer in accordance with its terms.

(b)
Owner’s Representations and Covenants .  The Owner represents, warrants, covenants, and agrees to and with the Charterer that (i) the Owner is a company organized, existing, and in good standing under the laws of Switzerland, (ii) the Owner has the requisite limited liability company power and authority to hold title to the Vessel and to enter into and carry out the transactions contemplated and to execute, deliver and perform under this Charter; (iii) the execution, delivery, and performance of this Charter do not contravene the provisions of the certificate of organization or regulations, or similar documents, of the Owner, or violate any judgment, order or decree applicable to the Owner or result in any violation of, or conflict with, or constitute a default under, or subject the Vessel to any lien of, any indenture, contract, agreement or other instrument applicable to the Owner, (iv) this Charter constitutes the legal, valid and binding obligation of the Owner enforceable against the Owner in accordance with its terms, and (v) the Owner will not create or permit to exist, any lien or encumbrance on or against the Vessel that arises out of the express action or omission of the Owner, other than a mortgage permitted under Section 11 (and the Owner will have sole responsibility for any such Mortgage).
14.   Assignment; Sub-bareboat Charter .
(a)   The Charterer does not have the right to, and shall not, assign, pledge, or hypothecate this Charter (by operation of law or otherwise), in whole or in part, or any interest herein, or any right, duty or obligation hereunder (collectively, an “ Assignment ”) without the prior written consent of the Owner, which consent is subject to the consent of the Head Owner, in their absolute discretion, and any purported Assignment without the Owner’s prior written consent shall be void and unenforceable against the Owner. The Owner will exercise reasonable endeavours to obtain such consent from the Head Owner. The Charterer shall remain primarily liable under this Charter and the Guarantor will remain primarily liable under the Guarantee in the event of any permitted Assignment, which will in no event be considered a novation of this Charter unless the Owner expressly agrees to the contrary in writing.
(b)   Notwithstanding the foregoing, the Charterer agrees that it shall not further sub-bareboat or sub-time charter or otherwise let or charter the Vessel to any person without the prior written consent of the Owner and the Head Owner, except under the Time Charter. In the case of any permitted sub-bareboat charter of the Vessel, such sub-bareboat charter (i) shall state it is subject and subordinate to the rights of the Owner and the Head Owner hereunder, (ii) shall not contain any terms and conditions which would prevent the Charterer from fulfilling its obligations under this Charter, (iii) shall include an express prohibition against any further sub-bareboat charters without the prior written consent of the Owner and the Head Owner, and (iv) shall contain an acknowledgement by the sub-bareboat charterer stating that it acknowledges the existence of this Charter and the Bareboat Charter and their priority over all of the terms of the sub-bareboat charter.

15.   Logo and Vessel Names.
The Owner agrees that the Charterer may display the Charterer’s logo and the Charterer’s designated name on the Vessel during the Charter Term. If the Owner retains ownership of the Vessel after the Charter Term, it agrees not to display the Charterer’s logo. If the Owner sells the Vessel after the Charter Term it will require the purchaser to agree not to use the Charterer’s name or logo in connection with the Vessel. Nothing in this Section 15 diminishes and/or releases the Charterer from its obligations under this Charter (including without limitation under the Charterer’s obligations under Section 12).
16.   Notices.
All notices and other communications required under this Charter shall be by email, by personal delivery or by international courier service, to each Party at its address stated below or such other address as it may declare from time to time pursuant to this notice provision. Any such notice or communication shall be deemed effective on the date of delivery, if by personal delivery, or on the second Business Day after deposit with an international courier service (all delivery fees prepaid) if sent by international courier service. If sent by email or other electronic means, notices shall be effective upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return email or other written acknowledgement), provided, that if such notice or communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next Business Day for the recipient.
All notices and other communications to be sent to the Owner shall be sent by the Charterer as follows, unless the Owner shall give notice to the contrary:
Address:
Cargill International SA
14 chemin de Normandie
1206 Geneva, Switzerland Tel: +41-22-703-2111
Email:    George_wells@cargill.com
Ann_shazell@cargill.com
Bernd_Bachmann@cargill.com
Oliver_Handasydedick@cargill.com
Handy.trading@cargill.com
Olivier_Demierre@cargill.com
Otprojects@cargill.com
All notices and other communications to be sent to the Charterer shall be sent by the Owner as follows, unless the Charterer shall give notice to the contrary:
Address:
154 Vouliagmenis Avenue,
16674 Glyfada, Athens, Greece


Tel: +30 210 8913507
Email: snt@seanergy.gr
sgyftakis@seanergy.gr
finance@seanergy.gr
leagl@seanergy.gr
17.   Defaults; Remedies.

(a)
Events of Default .  Any one or more of the following is an Event of Default (“ Event of Default ”) by the Charterer:
(i)     t he Charterer shall fail to pay the whole or part of any Basic Charter Hire specified in Section 5 hereof on the due date thereof and such failure shall continue for five (5) Business Days following the due date thereof;
(ii)     the Charterer shall fail to pay when due the whole or any part of the Scrubber Refund, the Loss Value of the Vessel or the Profit Share Amount in accordance with the terms and conditions of this Charter and any such failure shall continue for three (3) Business Days following the due date thereof;
(iii)     the Charterer shall fail to carry and maintain insurance on or with respect to the Vessel in accordance with the provisions of Section 9 hereof;
(iv)      the Charterer shall fail to perform or comply with the covenants contained in Sections 4(h), 6(a) (with the exception of Section 6(a)(ii)), 10(c) or 14(a) or the Charterer shall fail to perform any of its obligations under Section 6(g)(iii);
(v)     the Charterer shall fail to perform or comply in any material respect with any other covenant, condition, or agreement to be performed or observed by it hereunder or under the Multipartite Agreement, and the Charterer shall fail to cure such failure to perform or comply within ten (10) Business Days after the Owner shall have demanded in writing the cure thereof;
(vi)     any material representation or warranty made by the Charterer herein or under the Multipartite Agreement or by the Guarantor in the Guarantee shall prove to have been incorrect in any material respect as of the date on which made, or any material statement, report, schedule, notice, certificate or other writing furnished by the Charterer or, as the case may be, the Guarantor to the Owner in connection with this Charter or under the Multipartite Agreement or the Guarantee, as the case may be, shall prove to have been incorrect in any material respect as of the date on which the facts set forth therein are stated or certified, and, if in the reasonable opinion of the Owner such is capable of being cured, the Charterer or the Guarantor shall fail

to cure such defect within seven (7) Business Days after the Owner shall have demanded in writing the cure thereof;
(vii)     the Charterer, and/or the Guarantor shall become insolvent or bankrupt or shall cease paying or providing for the payment of its debts generally; the Charterer and/or the Guarantor shall be dissolved, shall be adjudged a bankrupt by a court of competent jurisdiction, shall make a general assignment of all or substantially all of its assets for the benefit of its creditors, or shall lose its charter by forfeiture or otherwise; or a petition for an arrangement or for reorganization of the Charterer and /or the Guarantor under the bankruptcy laws of the relevant jurisdiction shall be filed by the Charterer and/or the Guarantor, or such petition shall be filed by creditors and the same shall be approved by a court of competent jurisdiction;
(viii)     an arrangement or reorganization of the Charterer and/or, the Guarantor under the bankruptcy laws of the relevant jurisdiction shall be approved by a court, whether proposed by a creditor, a stockholder or any other party or person whatsoever; or a receiver or receivers of any kind whatsoever, whether appointed in admiralty, bankruptcy, common law or equity proceedings, shall be appointed by a decree of a court of competent jurisdiction with respect to the Vessel or all or substantially all of the property of the Charterer and/or the Guarantor;
(ix)     (A) the Guarantor shall fail to pay when due the whole or any part of any amount payable by it under the Guarantee; or (B) the Guarantor shall fail to perform or comply in any material respect with any other covenant, condition or agreement to be performed or observed by it under the Guarantee; or (C) the Guarantor shall repudiate the Guarantee; or (D) a breach by the Guarantor of the Guarantee shall occur;
(x)     when the Cash Collateral Amount or any part thereof is held in the Cash Collateral Account and becomes due and payable to the Owner and the Account bank is in any way precluded from immediately releasing the due amount to the Owner and the Charterer fails to remedy the same or provide Additional Security within five (5) Business Days of the Owner’s demand;
(xi)     if the Cash Collateral Account Charge, once created, ceases to be in full force and effect or ceases to be legal, valid, binding, enforceable or effective or is alleged by a party to it (other than the Owner) to be ineffective and the Charterer fails to remedy the same or provide Additional Security within five (5) Business Days of the Owner’s demand;
(xii)     if the aggregate value of the Cash Collateral Amount held by the Account Bank or, where applicable the Owner, is at any time less than an amount equal to United States Dollars One Million Six Hundred Thousand (US$ 1,600,000) and the Charterer fails to remedy the same or to provide Additional Security within five (5) Business Days of the Owner’s demand;
(xiii)     the Charterer fails to provide Additional Security (as defined at Section 17(b)(vii) below) within five (5) days of the Owner’s request;

(xiv)     any Charter Security and/or Additional Security ceases to be in full force and effect or ceases to be legal, valid, binding, enforceable, or effective or is alleged by a party to it (other than the Owner) to be ineffective;
(xv)    the Charterer shall (A) enter into any transaction of merger or consolidation (unless the Charterer is the surviving entity thereof), (B) sell or transfer all, substantially all or any substantial portion of its assets to any other person or enter into a leveraged buyout, (C) dissolve, liquidate or cease or suspend the conduct of business, or cease to maintain its existence, or (D) change the form of organization of its business and such change either adversely affects the rights of the Owner or has the effect of modifying, lessening, impairing or altering in any away adverse to the Owner the duties and obligations of the Charterer hereunder;
(xvi)     a default shall occur with respect to any Debt owed by the Charterer or the Guarantor (as the case may be) to the Owner or any of its affiliates or to any third person in excess of United States Dollars Five Million (US$5,000,000), for which the Charterer or the Guarantor (as the case may be) fails to make any payment when due exceeding United States Dollars Five Hundred Thousand (US$500,000) or to perform any obligation thereunder, which default is not cured within any applicable grace period, and in any event within no more than twenty (20) Business Days;
(xvii)     without prejudice to Section 14(a) of this Charter, the Charterer shall assign and/or purport to assign any and/or all of its rights and/or interests in or arising under this Charter without having first received the prior written consent of the Owner in accordance with Section 14(a) of this Charter;
(xviii)     the Charterer or the Guarantor (as the case may be) shall fail to pay for more than thirty (30) days after it is due, any final, non-appealable judgment in excess of United States Dollars One Million (US$1,000,000) entered against the Charterer or the Guarantor (as the case may be) by any court having jurisdiction over the Charterer or the Guarantor (as the case may be) or the property of the Charterer or the Guarantor (as the case may be);
(xix)    the Charterer fails to pay to the Owner any amount due under clause 109 of the Time Charter;
(xx)      the Approved Scrubber is not fully installed and fully operational on the Vessel by 31 December 2019 to the satisfaction of the Owner (such satisfaction in the Owner’s sole discretion) or the Approved Scrubber is installed but it is not in compliance with the Relevant Laws and/or this Charter;
(xxi)    at any time during the Owner’s ownership of any of the Shares, the Guarantor’s Common Stock ceases to be listed on the NASDAQ;
(xxii)     the Charterer shall fail to perform or comply in any material respect with any covenant, condition, or agreement to be performed or observed by it under any Scrubber Contract, the Scrubber Supply Contract Assignment or the Cash Collateral Account Charge, and the Charterer shall

fail to cure such failure to perform or comply within ten (10) Business Days after the Owner shall have demanded in writing the cure thereof; and (xxiii) the Escrow Standing Amount or part thereof becomes due and payable to the Owner and the Owner’s Bank is in any way precluded from immediately releasing the due amount to the Owner in accordance with the terms of the Escrow Agreement and such preclusion arises directly from any act and/or omission of the Charterer and / or the Seller.
For the purposes of this Section 17(a):
“ Common Stock ” means the common stock of the Guarantor, par value US$0.0001 per share.
“ Debt ” means as to any person at any time (without duplication): (i) all obligations of such person for borrowed money, (ii) all obligations of such person evidenced by bonds, notes, debentures, or other similar instruments, (iii) all obligations of such person to pay the deferred purchase price of property or services, except trade accounts payable of such person arising in the ordinary course of business which are not past due by more than ninety (90) days, (iv) all obligations of such person under any lease which, in conformity with US GAAP, is required to be capitalized for balance sheet purposes, (v) all obligations of such person under guaranties, endorsements (other than for collection or deposit in the ordinary course of business), assumptions or other contingent obligations, in respect of, or to purchase or otherwise acquire, any obligation or indebtedness of any other person, or any other obligation, contingent or otherwise, of such person directly or indirectly protecting the holder of any obligation or indebtedness of any other person against loss (whether by partnership arrangements, agreements to keep-well, to purchase assets, goods, securities, or services, to take-or-pay or otherwise), (vi) all obligations secured by a lien existing on property owned by such person, whether or not the obligations secured thereby have been assumed by such person or are non-recourse to the credit of such person, (vii) all reimbursement obligations of such person (whether contingent or otherwise) in respect of letters of credit, bankers’ acceptances, surety or other bonds and similar instruments, (viii) all liabilities of such person in respect of unfunded vested benefits under any employee benefit plan, and (ix) any other liability of such person that is classified as debt under US GAAP.
“ NASDAQ ” means the Nasdaq Capital Market.
“ Shares ” means one million eight hundred thousand (1,800,000) shares of Common Stock.

(b)
Remedies .  At any time that an Event of Default has occurred and is continuing, the Owner, by written notice to the Charterer, may declare the Charterer in default hereunder, in which case the Owner shall be entitled to pursue all remedies available at law or in equity or in admiralty, including, without limitation, the following remedies:
(i)   By notice to the Charterer, the Owner may terminate this Charter, whereupon the Charterer will redeliver the Vessel to the Owner within ten (10) Business Days of receipt of such notice in accordance with the provisions of Sections 4(b)-4(g) above.
(ii)   The Owner or the Head Owner may re-take the Vessel wherever found, whether upon the high seas or at any port, harbour or other place and irrespective of whether the Charterer, any sub-charterer or any other

person is in possession of the Vessel, all without prior demand and without legal process, the Charterer HEREBY WAIVING ANY AND ALL RIGHTS TO PRIOR NOTICE AND A JUDICIAL HEARING WITH RESPECT TO THE REPOSSESSION OF THE VESSEL BY THE OWNER, and for that purpose the Owner or the Head Owner or their respective agents may enter upon any dock, pier or other premises where the Vessel is and may take possession thereof, without the Owner or its agent incurring any liability by reason of such re-taking, whether for the restoration of damage to property caused by such re-taking or for damages of any kind for any reason to the Charterer or any person claiming under the Charterer.
(iii)   Recover from the Charterer, in addition to any Basic Charter Hire or Additional Hire due up to the date of default, the Loss Value amount calculated as of the Charter Hire Payment Date preceding the date that the event which resulted in the Event of Default occurred, as liquidated damages for loss of a bargain and not as a penalty.
(iv)   The Owner or the Head Owner may sell or otherwise dispose of the Vessel at public auction or by private sale, without prior notice to the Charterer, at such time or times and upon such terms as the Owner or the Head Owner (as applicable) may determine, for cash or credit, at such price as the Owner or the Head Owner shall deem fair, with the Vessel in its then condition or following any commercially reasonable preparation, or otherwise dispose of, hold, use, lay-up, operate, charter to others the Vessel, in a commercially reasonable manner, all free and clear of any rights of the Charterer, including any right of redemption, and without any duty to account to the Charterer with respect to such action or inaction or for any proceeds with respect hereto; any disposition or holding of the Vessel shall not be deemed a retention by the Owner in satisfaction of the Charterer’s obligations under this Charter. Nothing contained herein shall require the Owner to sell or charter the Vessel at any time or take any action in mitigation of the Owner’s damages.
(v)   The Owner may, but shall not be required to, proceed by appropriate action for collection from the Charterer of all costs and expenses, including attorneys’ fees, court costs, and other expenses, incurred by the Owner in connection with the enforcement of this Charter and the exercise of remedies hereunder. Further, in addition to any other amounts to which the Owner may be entitled, the Charterer shall be liable for all costs and expenses incurred by the Owner, which shall include all insurance premiums, all demurrage, dockage, and anchorage charges, all legal fees, and all other costs and expenses whatsoever incurred by the Owner by reason of the occurrence of an Event of Default or by reason of the exercise by the Owner of any remedy hereunder, including, without limitation, any cost or expense incurred by the Owner in connection with any re-taking of the Vessel or putting the Vessel in the condition required herein.
(vi)   The proceeds of any sale, charter or other disposition of the Vessel received by the Owner, if any, pursuant to this Section 17(b) shall be applied in the following order of priority:


(1)
to pay all of the Owner’s and the Head Owner’s costs, charges and expenses incurred in taking, moving, laying-up, holding, repairing, selling, chartering or otherwise disposing of the Vessel;

(2)
to the extent not previously paid by the Charterer, to pay the Owner all sums (including Loss Value as provided in Section 17(b)(iii) above) due by the Charterer under this Charter (including any amount due under clause 109 of the Time Charter) and any Swap Loss (as such term is defined in this Section 17(b);

(3)
to reimburse the Charterer for any Loss Value previously paid by the Charterer to the Owner in accordance with Section 17(b)(iii) above; and

(4)
any sums remaining shall be remitted to the Charterer.
The Charterer shall pay to the Owner any deficiency in (1) and (2) above.
(vii)     If an Event of Default occurs in relation to the Charter Security or part thereof (as more particularly described at Section 17(a) (ix), (x), (xi), (xii) (xiii), (xiv), (xvi), (xviii) and/or (xxii) above), the Owner may (but shall not be obliged to) request the Charterer to provide, and in which case the Charterer shall be obliged to provide, such other additional security in form and substance reasonably satisfactory to the Owner which (in the opinion of the Owner) has a net realisable value (on an aggregate basis) equal to or greater than the applicable shortfall or deficiency in the Charter Security including, without limitation, a deposit of cash to such account as the Owner may nominate in an amount equivalent to the amount of any shortfall or deficiency in respect of the Charter Security (“ Additional Security ”).
(viii)     The Owner may recover from the Charterer any amount due under clause 109 of the Time Charter.
(ix)     The Owner may, in its sole discretion, release to the Owner the Cash Collateral Amount or any part thereof.
No remedy referred to in this Section 17(b) is intended to be exclusive, but each remedy shall be cumulative and in addition to, and may be exercised concurrently with, any other remedy which is referred to herein or which may otherwise be available to the Owner at law, in equity or in admiralty.
For the purposes of this Section 17 (b):
“ Swap Loss ” means the amount as the Owner certifies that, as a result of any sale, charter or other disposition of the Vessel pursuant to this Section 17(b), the Owner is in debit as a result (including all the Owner’s losses, damages, liabilities, expenses and costs incurred by the Owner in association therewith) of terminating, reversing or unwinding any interest rate swap arrangements from or with other persons (including, but not limited to, the Head Owner).


(c)
Multipartite .  If the Owner, by written notice to the Charterer, declares the Charterer in default under this Charter pursuant to this Section 17 and the Event of Default in question is a Relevant Event of Default (as defined below), and the Charterer is entitled to purchase the Vessel pursuant to the terms of clause 5.1 of the Multipartite Agreement and the Vessel is to be acquired by the Charterer pursuant to such terms, then prior to the Charterer’s purchase of the Vessel pursuant to the terms of clause 5.1 of the Multipartite Agreement the Charterer shall pay to the Owner (v) Charter Hire due through and including the date of purchase, (w) any applicable taxes (other than any taxes based upon or measured by the net income (however denominated) of the Owner), (x) expenses of sale (including the Owner’s and the Head Owner’s reasonable counsel fees), (y) the amount due under clause 109 of the Time Charter and (z) either (i) plus any Arrangements Credit (as defined in Section 12(j)), or (ii) less any Arrangements Debit (as defined in Section 12(j)) ((v), (w), (x), (y) and (z) together, the “ Outstanding Balance ”). For the purposes of this Charter, a “ Relevant Event of Default ” means an Event of Default under the Bareboat Charter which was caused in whole or in part by the act or omission of the Charterer.

(d)
In the event that the Owner receives a Default Notice (as such term is defined in the Multipartite Agreement) under the Multipartite Agreement, and provided that: (A) there is no Relevant Event of Default; (B) the Head Owner has transferred title to the Vessel to the Charterer (or its nominee, as the case may be) pursuant to clause 5.1 of the Multipartite Agreement; (C) no Event of Default under this Charter or a failure to pay the whole or part of any Charter Hire on the due date thereof shall have occurred and be continuing as at the time at which the Head Owner transferred title to the Vessel to the Charterer (or its nominee, as the case may be); and (D) the Owner has not given to the Head Owner a notice of the nature described in clause 5.2 of the Multipartite Agreement, then, no later than the date falling fourteen (14) days after the date on which the title to the Vessel was transferred by the Head Owner to the Charterer (or its nominee, as the case may be) the Owner agrees to permit the release from the Escrow Account to the Charterer of an amount equal to the balance (if any) of the Adjusted Funds (as such term is defined in the Escrow Agreement) in the Escrow Account as at the date on which title to the Vessel was transferred by the Head Owner to the Charterer (or its nominee, as the case may be).

(e)
Notwithstanding any other provision of this Charter, in the event that this Charter is terminated pursuant to the terms of clause 4.6 of the Multipartite Agreement, the Parties unconditionally and irrevocably agree that the following Sections shall survive (or as the case may be shall be deemed to survive) such termination of this Charter and are expressly made for the benefit of, and shall be enforceable by, the Owner, its successors and assigns: Section 16 (Notices); Section 17 (Defaults; Remedies); Section 19 (Income Tax); Section 20 (Law and Jurisdiction); Section 25 (Waiver); and Section 26 (No Remedy Exclusive).
18.   Indemnification, Withholding and Certain Agreements .
(a)   Owner’s Indemnification of the Charterer .  The Owner agrees to indemnify, defend, and hold harmless the Charterer from all damages or costs arising as a




result of (i) the Owner’s violation of any law or regulation of the jurisdiction in which the Owner is organized or maintains its principal office (other than a violation that would not have occurred but for the use, operation or presence of the Vessel or any part thereof in the relevant jurisdiction or the failure of the Charterer to perform its obligations under this Charter or any act or omission of the Charterer), (ii) the gross negligence or wilful misconduct of the Owner unless such gross negligence or wilful misconduct is imputed to the Owner as a result of any act or omission of the Charterer or any failure of the Charterer to perform its obligations under this Charter, or (iii) the failure of the Owner to pay any taxes which the Owner is required by law to pay.

(b)
Charterer’s Indemnification of the Owner and the Head Owner .  The Charterer hereby assumes liability for, and shall defend, indemnify and hold harmless the Indemnified Parties (for the purposes of this Section 18, “ Indemnified Parties ” means: the Owner, the Head Owner and any of their affiliates and any mortgagee of the Vessel, whose identity the Owner has notified the Charterer of, and each of their respective successors and assigns, and the directors, officers, employees, representatives, agents and servants of any of the foregoing, and each an “ Indemnified Party ”) from and against any and all Claims (as hereinafter defined) which may be imposed on, incurred by or asserted against any of the Indemnified Parties, the Vessel and/or the Approved Scrubber (in each case whether or not also indemnified against pursuant to any other agreement or by any other person), regardless of when asserted (whether after or during the Charter Term) and in any way relating to or arising out of any of the following: the documentation, registry, possession, use, operation, lay-up, chartering, subchartering, condition, maintenance, repair, and return of the Vessel and/or the Approved Scrubber, as applicable. Notwithstanding the foregoing, the Charterer shall not be obligated to indemnify any Indemnified Party in respect of any act or omission constituting gross negligence, wilful misconduct, fraud or a criminal act (other than a criminal act that would not have occurred but for the use, operation or presence of the Vessel or any part thereof in the relevant jurisdiction or the failure of the Charterer to perform its obligations under this Charter or but for any act or omission of the Charterer) by such Indemnified Party, or its agents or representatives. The Charterer agrees to further indemnify, defend and hold harmless each Indemnified Party and the Vessel from and against all liens created and imposed on the Vessel other than those caused by Owner’s or, as the case may be, the Head Owner’s own actions, and in the event of the seizure of the Vessel under legal process to enforce such lien or asserted lien, the Charterer shall secure the prompt release of the Vessel by payment of same or otherwise as may be appropriate. The Owner’s right to Charter Hire as provided for in Section 5 of this Charter shall not be suspended during any time when the Vessel is under seizure by legal process as a result of such liens or asserted liens. As used herein, “Claims” shall mean any and all liabilities, obligations, losses, damages, penalties, claims, actions, suits, costs, expenses, fines, penalties and disbursements (including, without limitation, reasonable attorneys’ fees, litigation expenses and investigatory fees and disbursements) of whatsoever kind and nature, including, without limitation, (i) claims or penalties arising from any violation of the laws or regulations of any authority or country or political subdivision thereof, (ii) claims as the result of latent, patent or other defects, whether or not discoverable by the Owner, the Head

Owner or the Charterer, (iii) Environmental Claims and (iv) tort claims of any kind, including, without limitation, claims for injury or damage caused by leakage, discharge or spillage of oil or cargo, refuse or any hazardous substance, but excluding Taxes (as such term is defined in Section 18 (c) below).
Charterer’s Withholding .  Notwithstanding anything herein or in the Bareboat Charter to the contrary, the Charterer hereby covenants and agrees that it shall make all payments of Charter Hire and other amounts payable by the Charterer under this Charter to the Owner or any Indemnified Party or any Tax Indemnitee (for the purposes of this Section 18, “ Tax Indemnitee ” means any of: the Owner and each of its affiliates that is included with the Owner in a consolidated, combined, unitary or other group Tax return) free and clear from, and without deduction or withholding of or by reason of, any taxes (including income, gross receipts, sales or use taxes), money transfer fees or other charges or withholdings of any nature whatsoever except to the extent that deduction or withholding of any Tax (for the purposes of this Section 18, “ Tax ” means , all taxes (including income taxes, gross receipts taxes, sales taxes, use taxes, value added taxes, ad valorem taxes and other taxes), fees, duties, charges, assessments, and withholdings of whatever nature, imposed, assessed, levied or asserted by any governmental authority or other taxing authority (and any and all penalties, fines, interest and other charges relating thereto)) is required by law, in which event the Charterer shall (i) notify the person entitled to receive the payment (the “ Payee ”) of such requirement, (ii) make such deduction or withholding, (iii) if such Tax is an Indemnified Tax (as defined in Section 18(g)), pay on an after-Tax basis pursuant to Section 18(f) such additional amount as is necessary so that the Payee receives, after such deduction or withholding (including any deduction or withholding with respect to such additional amount) an amount equal to the amount that the Payee would have received if such deduction or withholding had not been made, (iv) pay the full amount deducted or withheld to the appropriate taxing authority in accordance with applicable law, and (v) deliver to the Payee promptly after making such payment an original receipt (or certified copy thereof) or other evidence reasonably satisfactory to the Payee evidencing payment of the tax withheld to the appropriate taxing authority.
Each payment or indemnity payable by the Charterer to or for the benefit of an Indemnified Party or a Tax Indemnitee pursuant to this Section 18 shall be paid on an after-Tax basis, which means that the Charterer must pay, in addition to such payment or indemnity, such additional amount or amounts as will, in the reasonable good faith determination of such Indemnified Party or Tax Indemnitee, leave such Indemnified Party or Tax Indemnitee and its affiliates (if any) in the same economic position as they would be in if such payment or indemnity were not subject to taxation, taking into account any Tax costs resulting from the such Indemnified Party’s or Tax Indemnitee’s actual or constructive receipt or accrual of the Charterer’s payment or indemnity and any Tax saving realized by such Indemnified Party or Tax Indemnitee and its affiliates (if any) as a result of the allowance of any Tax credit, deduction or other Tax benefit for the Tax, liability or expense incurred by such Indemnified Party or Tax Indemnitee that gave rise to the Charterer’s obligation to pay such payment or indemnity pursuant to this Section 18.


(g)
For the purposes of this Section 18, an “ Indemnified Tax ” means all Taxes, regardless of how or when such Taxes are imposed, incurred or asserted (whether imposed on, incurred by or asserted against the Vessel or the Owner or the Charterer or otherwise) arising out of, in connection with or otherwise relating to the Vessel or this Charter or any of the transactions contemplated in or done pursuant to this Charter (including the Owner’s chartering of the Vessel from the Head Owner, and chartering of the Vessel during the term of this Charter), provided that the Charterer shall have no obligation under this Section 18 to indemnify a Tax Indemnitee for the following Taxes (“ Excluded Taxes ”):
(i)   any Tax imposed on or calculated by reference to the overall net income, overall gross income, overall profits, overall gains, capital or net worth of such Tax Indemnitee, provided that the exclusion in this Section 18 (g) (i) shall not apply to any Tax to the extent such Tax would not have been payable in the absence of the documentation, registry, delivery, use, presence or other connection of the Vessel or any part thereof or with, or any act or omission or other connection of the Charterer or any affiliate, agent, representative or contractor of the Charterer or any other person (other than the Owner, unless an Event of Default is continuing) using or having possession, custody or control of the Vessel or any part thereof in or with, the jurisdiction imposing such Tax;
(ii)   any ad valorem Tax assessed on or with respect to the Vessel arising from the presence of the Vessel in the jurisdiction imposing the Tax after the Charterer has redelivered the Vessel to the Owner in accordance with the provisions of this Charter and has performed all of its obligations under the Charter, unless the Vessel is redelivered as a result of the occurrence of an Event of Default;
(iii)   any Tax imposed on or with respect to any sale or other transfer by the Owner of any of the Owner’s interest in the Vessel or the Charter to any person other than the Charterer, provided that the exclusion in this Section 18 (g)(iii) shall not apply to any such sale or transfer that occurs (1) in connection with or as a result of an Event of Default, a Total Loss, or any maintenance, repair, overhaul, pooling, interchange, exchange, removal, replacement, substitution, modification, improvement, or alteration of the Vessel or any part thereof or (2) at the Charterer’s request or (3) pursuant to a requirement in this Charter;
(iv)   any Tax to the extent resulting from any act or event occurring after the Charterer has returned the Vessel and all Technical Documents to the Owner in compliance with the terms of this Charter and has performed all its obligations under this Charter (the “ Return Compliance Time ”), provided that the exclusion in this Section 18 (g) (iv) shall not apply to any Tax that (1) arises from any act, event or circumstance (or relates to any period of time) occurring at or before the Return Compliance Time or (2) is imposed with respect to any payment by the Charterer pursuant to Charter or (3) is incurred in connection with the exercise of any rights or remedies of the Owner after the occurrence of an Event of Default;

(v)   any Tax if and to the extent that such Tax would be payable by such Tax Indemnitee in the absence of the transactions contemplated in this Charter;
(vi)   any Tax if and to the extent that such Tax is caused by, and would not be payable but for, (1) any gross negligence, willful misconduct or fraud of such Tax Indemnitee or (2) the inaccuracy or breach of any representation, warranty or covenant of the Owner in this Charter.

(c)
Proof of Payment – Taxes .  Promptly upon the written request of the Owner, the Charterer shall provide to the Owner copies of all documentation and proof of payment of any Taxes.

(d)
Survival .  The obligations of the Owner and the Charterer under this Section 18 shall survive the expiration or earlier termination or cancellation of this Charter and are expressly made for the benefit of, and shall be enforceable by, the party to which the obligations are owed, and its successors and assigns.

(e)
No Limitation .  Except as otherwise limited herein, it is the intent of the Parties that all indemnity obligations or liabilities assumed by the Parties under this Charter be without limit and without regard to the cause or causes thereof (including pre-existing conditions), the unseaworthiness of any vessel, strict liability or the negligence of any party or parties, whether such negligence be sole, joint or concurrent, active or passive.

(f)
Consequential Damages .  Neither Party shall be liable to the other Party for any consequential or special damages, arising out of, resulting from or relating in any way to this Charter, irrespective of the negligence or fault of any party.
19.     Income Tax
The Charterer agrees to take no tax position inconsistent with the fact that the Owner is the owner of the Vessel for tax purposes.
20.     Law and Jurisdiction

(a)
Governing Law .  This Charter is governed by and interpreted in accordance with the general maritime laws of the United States and, to the extent they are not applicable, the internal laws of the State of New York (without regard to New York’s conflict of laws provisions).

(b)
Venue .  All judicial actions by any party to enforce any provision of this Charter shall, if requested by the Owner, be brought in the United States District Court for the Southern District of New York or the state court of general jurisdiction sitting in the County of New York in the State of New York. Each party consents to the jurisdiction of such courts and hereby irrevocably waives any objection, including any objection to the laying of venue or based on the grounds of forum non-conveniens, which it may now or hereafter have to the bringing of any such action or proceedings in such court.


(c)
JURY TRIAL WAIVER .   EACH PARTY HEREBY WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY JURY TO EVERY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND ARISING OUT OF OR RELATED TO THIS CHARTER.

(d)
Service of Process .  Service of process may be made on the Charterer or the Guarantor by mailing or delivering a copy of such process to the Charterer c/o the Guarantor at the Guarantor’s address listed below (with a copy to the Charterer at its address identified in or in accordance with Section 16), or to any new address of the Guarantor of which the Owner has been notified by the Charterer. The Charterer hereby irrevocably authorises and directs the Guarantor to accept such service on its behalf at such address. As an alternative method of service, the Charterer also irrevocably consents to the service of any and all process, postage prepaid, in any such action or proceeding by mailing a copy of such process to the Guarantor with a copy to the Charterer at its address identified in or in accordance with Section 16. Nothing herein shall affect the right to effect service of process in any other manner permitted by law.
Guarantor’s address:
Seanergy Maritime Holdings Corp.
c/o Seanergy Management Corp.
154 Vouliagmenis Avenue,
16674 Glyfada, Athens, Greece
Service of process may be made on the Owner by mailing or delivering a copy of such process to the Owner at the Owner’s address identified in or in accordance with Section 16.
21.     Salvage.
All salvage and towage performed by the Vessel shall be for the Charterer’s benefit and the cost of repairing damage occasioned thereby shall be borne by the Charterer.
22.     War.

(a)
For the purpose of this Charter, the words “War Risks” shall include any war (whether actual or threatened), act of war, civil war, hostilities, revolution, rebellion, civil commotion, warlike operations, the laying of mines (whether actual or reported), acts of piracy, acts of terrorists, acts of hostility or malicious damage, blockades (whether imposed against all vessels or imposed selectively against vessels of certain flags or ownership, or against certain cargoes or crews or otherwise howsoever), by any person, body, terrorist, pirate or political group, or the government of any state whatsoever, which may be dangerous or are likely to be or to become dangerous to the Vessel, her cargo, crew or other persons on board the Vessel.

(b)
The Charterer shall have the liberty:
(i)   to comply with all orders, directions, recommendations or advice as to departure, arrival routes, sailing in convoy, ports of call, stoppages, destinations, discharge of cargo, delivery, or in any other way

whatsoever, which are given by the government of the Flag State, or any other government, body or group whatsoever acting with the power to compel compliance with their orders or directions;
(ii)  to comply with the orders, directions or recommendations of any war risks underwriters who have the authority to give the same under the terms of the war risks insurance;
(iii)   to comply with the terms of any resolution of the Security Council of the United Nations, any directives of the European Union, the effective orders of any other supranational body which has the right to issue and given the same, and with national laws aimed at enforcing the same to which the Owner or the Charterer are subject, and to obey the orders and directions of those who are charged with their enforcement.
23.     Assignment of Insurances .

(a)
Collateral .  In order to secure all obligations of the Charterer owing to the Owner under this Charter, the Charterer hereby assigns to the Head Owner with first priority and to the Owner with second priority, all of the Charterer’s right, title and interest in and to all policies and contracts of insurance, including, without limitation, all entries in any protection and indemnity or war risks association or club, which are from time to time taken out in respect of the Vessel, her hull, machinery, freight, disbursements, profits or otherwise, and all the benefits thereof, including, without limitation, all claims of whatsoever nature arising under such policies, as well as all amounts due from underwriters under any such insurance whether as payment of losses, or as return premiums, or otherwise (collectively, the “Insurances”), and any proceeds of any of the foregoing. No later than the Delivery Date the Charterer shall give each underwriter notice of the assignment of insurances contained herein in the form and terms attached as Exhibit B to this Charter (or in such other form and terms as the Owner may reasonably require) and procure that the loss payable clauses as attached to Exhibit B to this Charter (or loss payable clauses otherwise in a form and terms satisfactory to the Owner and the Head Owner) shall have been duly endorsed on the insurances.

(b)
No Obligation to Perform .  The Charterer hereby agrees and covenants that, notwithstanding the provisions of this Section 23, neither the Owner nor the Head Owner shall have any of the Charterer’s obligations under any Insurances.
24.     Change of Ownership .
The Charterer acknowledges and agrees that the Head Owner may transfer its ownership of the Vessel to another entity during the term of this Charter.
Following the receipt by the Charterer of a notice from the Owner stating that the Head Owner intends to transfer the ownership of the Vessel to another entity (the “Transferee”) as of the date of the transfer set forth in such notice, (i) reference to ‘the Head Owner’ in Section 9 and Section 23 of this Charter shall be deemed to refer to the Transferee (ii) as of such date of transfer, the Charterer shall procure that the insurances over the Vessel are updated to reflect the Transferee’s ownership of the

Vessel and (iii) as of such date of transfer, the Charterer shall provide updated notices of assignment of insurances and loss payable clauses to each underwriter substantially in the form attached at Exhibit B to this Charter (or otherwise in a form and terms satisfactory to the Owner and the Transferee) logically amended to show the Transferee as the ‘the Owner’.
25.
Waiver .  No waiver by either Party of any breach by the other of any obligation, agreement or covenant hereunder shall be deemed to be a waiver of that or any subsequent breach of the same or any other covenant, agreement or obligation nor shall any forbearance by any Party to seek a remedy for any breach by the other Party may be deemed a waiver by such Party of its rights or remedies with respect to such breach, unless such waiver is in each case in writing duly executed by such Party.
26.
No Remedy Exclusive .  Each and every right, power and remedy given to the Owner in this Charter shall be cumulative and in addition to every other right, power and remedy herein or therein given now or hereafter existing at law, in equity, in admiralty, by statute or otherwise. Each and every right, power and remedy whether given therein or otherwise existing may be exercised from time to time as often and in such order as may be determined by the Owner, and neither the failure or delay in exercising any power or right nor the exercise or partial exercise of any right, power or remedy shall be construed to be a waiver of or acquiescence in any default therein; nor shall the acceptance of any security or of any payment of or on account of any loan, promissory note, advance, obligation, expense, interest or fees maturing after an Event of Default or of any payment on account of any past default shall be construed to be a waiver of any right to take advantage of any future default or of any past default not completely cured thereby.
27.
Entire Agreement; Amendment .  This Charter and its exhibits and schedules constitute the entire agreement between the Parties relating to the subject matter of this Charter and supersedes all prior agreements and undertakings of the Parties, whether oral or written, in connection herewith. No amendment of this Charter shall be valid unless made in writing and signed by each of the Parties and consented to by the Head Owner.
28.
Counterparts .  This Charter may be executed in one or more counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument. It is the express intent of the Parties to be bound by the exchange of signatures on this Charter via Portable Document Format (PDF), which the Parties agree shall constitute an original writing for all legal purposes.
29.
Severability .  The Owner and the Charterer agree that with respect to any specific provision of this Charter that is held by any court or other constituted legal authority to be void or otherwise unenforceable in any particular manner, the Parties consider and permit this Charter to be amended in such manner as may be required in order to cause said provision and all other terms of this Charter to remain binding and enforceable against the Owner and the Charterer.
30.
Captions .  The captions in this Charter are for convenience and reference only and shall not define or limit any of the terms or provisions, or otherwise affect the construction, of this Charter.

31.
Binding Effect .  Subject to Section 14, this Charter shall be binding upon, inure to the benefit of, and be enforceable by the Parties and their respective successors and assigns.
32.
Interpretation .  References to “Sections” in this Charter are sections of this Charter. The words “include(s)” and “including” shall be construed as being followed by the words “without limitation”.
[Remainder of page intentionally left blank]

EXHIBIT A – Basic Charter Hire (payable monthly in arrears)
Part 1
First Daily Charter Hire Rate                             US$[●] per day
Comprised of:
Scrubber Element: US$ [•1 per day
Vessel Element: US$ [•1 per day
Part 2
Second Daily Charter Hire Rate                           US$[●] per day
Comprised of:

Scrubber Element: US$ [•1 per day
Vessel Element: US$ [•1 per day
B-1

EXHIBIT A-1
Loss Value, Purchase Price and Floor Price Schedule
Original Vessel Cost: US$ [●]
Payment Number
Payment Date / Relevant Purchase Price Date
Loss Value $
Loss Value as a % of Original Vessel Cost
Floor Price $
Purchase Price $
Loss Value / Purchase Price attributable to Vessel $
Loss Value / Purchase Price attributable to Approved Scrubber $
0
[●]
[●]
[●]
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[●]
  [●]
  [●]
1
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2
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3
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4
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5
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6
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7
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8
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9
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10
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11
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12
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13
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14
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15
[●]
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16
[●]
[●]
[●]
[●]
[●]
   
B-1


17
[●]
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18
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19
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20
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21
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22
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23
[●]
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24
[●]
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25
[●]
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B-2

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Stipulated loss values are due in addition to any advance or arrears rent due on the same date.
B-3

EXHIBIT B
NOTICE OF ASSIGNMENT OF INSURANCE
TO:
PLEASE TAKE NOTICE:
(1)   That by an assignment of Insurances contained in a Sub-Bareboat Charter Agreement dated as of [●] 2018 made by CHAMPION MARINE CO. (the “Sub-Charterer”) to CARGILL INTERNATIONAL SA, (together with its successors and assigns, “Head Charterer”), the Sub-Charterer has collaterally assigned to the registered owner of the Vessel (as defined below), CFT INVESTMENTS 1 LLC and its successors and assigns (the “ Owner ”) as first priority and to the Head Charterer as second priority all of the Sub-Charterer’s rights, title and interests in, to and under all policies and contracts of insurance, including the Sub-Charterer’s rights under all entries in any protection and indemnity or war risk association or club, which are from time to time taken out by the Sub-Charterer in respect of the “CHAMPIONSHIP” with IMO 9403516 (the “ Vessel ”), her hull, machinery, freight, disbursements, profits or otherwise, and all the benefits thereof, including, without limitation, all claims of whatsoever nature arising under such policies, as well as all amounts due from underwriters under any such insurance whether as payment of losses, or as return premiums, or otherwise (collectively, the “ Insurances ”).
(2)   That you are hereby irrevocably authorized and instructed to pay from the date hereof all payments under:
(a)   all Insurances, except entries in protection and indemnity associations or clubs or insurances effected in lieu of such entries, relating to the Vessel in accordance with the loss payable clause in Attachment 1 to this Notice; and
(b)   all entries in protection and indemnity associations or clubs or insurances effected in lieu of such entries relating to the Vessel in accordance with the loss payable clause in Attachment 2 to this Notice.
(3)   That you are hereby instructed to endorse the assignment, notice of which is given to you herein, on all policies or entries relating to the Vessel.
CHAMPION MARINE CO.
 
CARGILL INTERNATIONAL SA
     
By:
   
By:
 
         
Name:
   
Name:
 
         
Title:
   
Title:
 
B-1

Dated as of the _________ day of [●] 2018.




B-2

ATTACHMENT 1
LOSS PAYABLE AND NOTICE OF CANCELLATION CLAUSE
(A)
Until CFT INVESTMENTS 1 LLC (together with its successors and assigns, the “Owner”) shall have notified underwriters to the contrary,

(1)
Except as provided in subsection (2) of this Clause (A), any claim under the insurance policy in respect of the M.V. “CHAMPIONSHIP” with IMO No. 9403516 (the “ Vessel ”) (other than in respect of a total loss), up to and including the amount of United States Dollars One Million (US$1,000,000) shall be paid:

i.           directly for the repair, salvage or other charges involved; or

ii.          if Cargill International SA (the “ Charterer ”) shall have first fully repaired the damage or paid all of the salvage or other charges, to the Charterer as reimbursement therefor as its interests may appear; or

iii.         if Champion Marine Co. (the “ Sub-Charterer ”) shall have first fully repaired the damage or paid all of the salvage or other charges, to the Sub-Charterer as reimbursement therefor as its interests may appear, save that, without prejudice to subsection (2) of this Clause (A), if the Charterer and/or the Owner has provided the insurers with notice of an Event of Default by the Sub-Charterer under the sub-bareboat charter agreement (between the Charterer and the Sub- Charterer) with respect to the Vessel, no payment shall be made to the Sub-Charterer under subsection (1)(iii) of this Clause (A), but instead shall be paid in accordance with subsection (1)(i) of this Clause (A) or subsection (1)(ii) of this Clause (A) only.


(2)
Any claim in respect of a total loss, and any claim of any nature (whether on account of the loss of or damage to the Vessel, on account of return premiums, or otherwise) in excess of United States Dollars One Million (US$1,000,000) or during the continuance of an Event of Default:

i.
by the Charterer under the bareboat charter agreement (between the Owner and the Charterer) with respect to the Vessel (notice of which Event of Default shall be provided by the Owner to the insurers); and/or

ii.
by the Sub-Charterer under the sub-bareboat charter agreement (between the Charterer and the Sub- Charterer) with respect to the Vessel (notice of which Event of Default shall be provided by the Owner and/or the Charterer to the insurers),

shall be paid directly to the Owner or otherwise as the Owner may consent.
(B)
The underwriters agree to advise the Owner and the Charterer:

(1)
If any insurer cancels or gives notice of cancellation of any insurance (other than war risks) or entry at least fourteen (14) days before such cancellation is to take effect, unless the insurer cancels such insurance because of non-
B-3

payment of premium, in which case the insurer shall give Owner and the Charterer at least ten (10) days’ notice before such cancellation is to take effect; and

(2)
Of any material change in the terms and conditions of the aforesaid insurance policies or non-renewal at least fourteen (14) days before such change or non-renewal is to take effect.
The foregoing shall not apply to war risk insurance.
B-4

ATTACHMENT 2
FORM OF LOSS PAYABLE ENDORSEMENT
PROTECTION & INDEMNITY
-------
“CHAMPIONSHIP” IMO No. 9403516
Payment of any recovery to which Champion Marine Co. (the “Sub-Bareboat Charterer”), is entitled to make out of the funds of the Association in respect of any liability, costs or expenses incurred by the Sub-Bareboat Charterer, shall be made to the Sub-Bareboat Charterer or to its order, unless and until the Association receives:
i)   subject always to paragraph ii), below, notice from CFT Investments 1 LLC (the “Owner”) and/or Cargill International SA (“Bareboat Charterer”) that the Sub-Bareboat Charterer is in default under the Sub-Bareboat Charter Agreement dated [●] 2018 between the Bareboat Charterer and the Sub-Bareboat Charterer respecting the Vessel, in which event all recoveries shall thereafter be paid to the Bareboat Charterer or to its order; provided that no liability whatsoever shall attach to the Association, its Managers or their agents for failure to comply with the latter obligation until and after the expiry of two (2) clear business days from the receipt of such notice;
ii)   notice from the Owner that the Bareboat Charterer is in default under the Bareboat Charter Agreement dated [●] 2018 between the Owner and the Bareboat Charterer respecting the Vessel, in which event all recoveries shall thereafter be paid to the Owner or to its order; provided that no liability whatsoever shall attach to the Association, its Managers or their agents for failure to comply with the latter obligation until and after the expiry of two (2) clear business days from the receipt of such notice.
The Association undertakes:
(a)   to inform the Owner and the Bareboat Charterer if the Association gives the Sub-Bareboat Charterer of the above ship notice that his insurance in the Association in respect of such ship is to cease at the end of the then current Policy Year; and
(b)   to give the Owner and the Bareboat Charterer fourteen (14) days’ notice of the Association’s intention to cancel the insurance of the Sub-Bareboat Charterer by reason of this failure to pay, when due and demanded any sum due from Sub-Bareboat Charterer to the Association.
All notices to the Owner shall be made to the following address:
CFT Investments 1 LLC
c/o SMBC Leasing and Finance, Inc.
277 Park Avenue
New York, New York 10172
Attn: Carl Marcantonio
B-5

Tel: (212) 224-5278
Email:
cmarcantonio@smbc-lf.com
Amickens@smbc-lf.com
Morgan_Feuerhake@smbcgroup.com
smbclfleaseaccountinggroup@smbclf.com

All notices to the Bareboat Charterer shall be made to the following address:
Cargill International SA
14 chemin de Normandie
1206 Geneva, Switzerland
Tel: +41-22-703-2111
Email:
George_wells@cargill.com
Ann_shazell@cargill.com
Oliver_HandasydeDick@cargill.com
Bernd_Bachmann@cargill.com
Olivier_Demierre@cargill.com
Otprojects@cargill.com
Kyriakos_attikouris@cargill.com
B-6


APPENDIX B
Form of Protocol of Delivery and Acceptance pursuant to Clause 6.7
PROTOCOL OF DELIVERY AND ACCEPTANCE
IN RESPECT OF “CHAMPIONSHIP”
We refer to: (i) the memorandum of agreement dated [●] 2018 between, inter alios , Champion Ocean Navigation Co. Limited (the “ Seller ”), and Cargill International SA (“ CISA ”), (as amended and supplemented from time to time, the “ MOA ”) in respect of the sale and purchase of the motor vessel named M/V “CHAMPIONSHIP” and having IMO number 9403516 (the “ Vessel ”); and (ii) a nomination notice dated [●] 2018, by which CISA nominated CFT Investments 1 LLC (the “ Owner ”) as its nominee pursuant to Clause 19.4 of the MOA for the purpose of accepting delivery, title and risk of and to the Vessel under the MOA. This protocol of delivery and acceptance is the “MOA Protocol of Delivery and Acceptance” referred to in clause 6.7 of the MOA.
The Seller, CISA and the Owner hereby confirm that the Vessel was delivered by the Seller to, and accepted by, the Owner under the MOA at _________________________ ( insert location of Vessel ) at ______________ ( insert tim e) hours (London local time) on ________________ 2018.
This protocol of delivery and acceptance and any non-contractual obligations arising out of or in connection with it are governed by, and shall be construed in accordance with, the laws of England.
Date:  ____________________
For and on behalf of
CHAMPION OCEAN NAVIGATION CO. LIMITED

________________________
Name:
Title:

For and on behalf of
CFT INVESTMENTS 1 LLC

________________________
Name:
Title:   Attorney-in-fact of Cargill International SA, in its capacity as attorney-in-fact of CFT
Investments 1 LLC
For and on behalf of
CARGILL INTERNATIONAL SA
Page 37

________________________
Name:
Title:  Attorney-in-fact

Page 38

APPENDIX C
Form and Terms of Time Charter


Page 39
Time Charter
GOVERNMENT FORM
Approved by the New York Produce Exchange
November 6th, 1913—Amended October 20th, 1921; August 6th, 1931; October 3rd, 1946
This Charter Party , made and concluded in on this 05th day of November, 2018   19 ____
Between CHAMPION MARINE CO., of the Marshall Islands, as Owners of the good _______ Steamship/ Motorship “CHAMPIONSHIP” (Vessel’s description see Clause 29) of ____ of _________ tons gross register, and _______ tons net register, having engines of _____ indicated horse power and with hull, machinery and equipment in a thoroughly efficient state, and classed ______ at _______ of about __________ cubic foot capacity, and about ______ tons of 2240 lbs. deadweight capacity (cargo and bunkers, including fresh water and stores not exceeding one and one half percent of ship’s deadweight capacity, allowing a minimum of fifty tons) on a draft of _____ feet _____ inches on ________ Summer freeboard, inclusive of permanent bunkers. which are of the capacity of about ____ tons of duel, and capable of steaming, fully laden, under good weather conditions about ____ knots on a consumption of about _____ tons of best Welsh coal best grade fuel oil best grade Diesel oil. now _______
_______ and CARGILL INTERNATIONAL S.A., as Charterers of the City of Geneve

Witnesseth, That the said Owners agree to let, and the said Charterers agree to hire the said vessel, from the time of delivery, for about   minimum of 5 years firm plus redelivery window of 60days, exact period in Charterers option.  Furthermore Charterers have the option to extend the charter for an additional about 16 months to about 18months (about = +/-15 days) exact period in Charterers option, at 100% of BCI 5TC Average (less 3.75% address commission) + Scrubber Premium as per Cl. 111 (e), which to be declared latest 30 days prior to the expiration of the 5 year initial firm period.  In case declared by Charterers, the optional period shall commence from the end of the 5 year initial firm period ____ within below trading limits.
Charterers to have liberty to sublet the vessel for all or any part of the time covered by this Charter, but Charterers remaining responsible for the fulfillment of this Charter Party.
Vessel to be placed at the disposal of the Charterers, at   on dropping last outward sea pilot Qingdao, at any time day and night Sundays and Holidays included
______
in such dock or at such wharf or place (where she may safely lie, always afloat, at all times of tide, except as otherwise provided in clause No. 6), as the Charterers may direct. If such dock, wharf or place be not available time to count as provided for in clause No. 5. Vessel on her delivery to be ready to receive cargo with clean swept holds and tight, staunch, strong and in every way fitted for the service, having water ballast, winches and donkey boiler with sufficient steam power, or if not equipped with donkey boiler, then other power sufficient to run all the winches at one and the same time (and with full complement of officers, seamen, engineers and firemen for a vessel of her tonnage), to be employed, in carrying lawful merchan-dise, including petroleum or its products, in proper containers , excluding as per Rider Clauses (vessel is not to be employed in the carriage of Live Stock, but Charterers are to have the privilege of shipping a small number on deck at their risk, all necessary fittings and other requirements to be for account of Charterers), in such lawful trades, between safe port and/or ports in British North America, and/or United States of America, and/or West Indies, and/or Central America, and/or Caribbean Sea, and/or Gulf of Mexico, and/or Mexico, and/or South America ______ and/or Europe and/or Africa, and/or Asia, and/or Australia, and/or Tasmania, and/or New Zealand, but excluding Magdalena River, River St. Lawrence between October 31st and May 15th, Hudson Bay and all unsafe ports; also excluding, when out of season, White Sea, Black Sea and the Baltic. as per Rider Clauses
___________
___________
as the Charterers or their Agents shall direct, on the following conditions:

1. That the Owners shall provide and pay for all provisions, wages and consular shipping and discharging fees of the Crew; shall pay for the customary insurance of the vessel, also for all the cabin, deck, engine-room and other necessary stores, including boiler water and maintain her class and keep the vessel in a thoroughly efficient state of hull and holds , machinery and equipment for and during the service .

2. That the Charterers while the vessel is on hire shall provide and pay for all the fuel except as otherwise agreed, Port Charges, canal and tolls, all compulsory and customary Pilotages (including Magellan Straits, Skaw/Great Belt, Dardanelles plus Bosphorus) , Agencies, Commissions, Consular Charges (except those pertaining to the Crew and Vessel’s flag ), and all other usual expenses except those before stated, but when the vessel puts into a port for causes for which vessel is responsible, then all such charges incurred shall be paid by the Owners. Charterers to pay for any tugboats assistance however when such assistance is required because of Vessel’s problem/failure, then all cost incurred shall be paid by the Owners.
Fumigations ordered because of illness of the crew to be for Owners account. Fumigations ordered because of cargoes carried or ports visited while vessel is employed under this charter to be for Charterers account. All other fumigations to be for Charterers account after vessel has been on charter for a continuous period of six months or more.
Charterers are to provide necessary dunnage and shifting boards, also any extra fittings requisite for a special trade or unusual cargo, but Owners to allow them the use of any dunnage and shifting boards already aboard vessel. Charterers to have the privilege of using shifting boards for dunnage, they making good any damage thereto.

3. That the Charterers, at the port of delivery, and the Owners, at the port of re-delivery, shall take over and pay for all fuel remaining on board the vessel at the current prices in the respective ports, the vessel to be delivered with not less than ____ tons and not more than ____   tons and to be re-delivered with not less than ______ tons and not more than _____ tons.

4. That the Charterers shall pay for the use and hire of the said Vessel at the rate of USD – see clause 43

For the index-linked portion, the hire rate for each fifteen (15) days period is calculated by taking within that fifteen (15) days period the average of all of the published Baltic Cape Index (BCI) of the 5 TC routes daily reports.

The hire for the first fifteen (15) days period is to be paid within three (3) banking days after delivery. The approximate hire is to be calculated



This document is a computer generated NYPE 46 form printed by BIMCO’s idea .  Any insertion or deletion to the form must be clearly visible. In event of any modification being made to the pre-printed text of this document which is not clearly visible, the text of the original printed NYPE 1946 document shall apply. BIMCO assumes no responsibility for any loss, damage or expense caused as a result of discrepancies between the original printed NYPE 1946 document and this computer generated document.

using the fifteen (15) days period prior delivery. The difference between said approximated hire and the actual hire based on actual index of the fifteen (15) days after delivery is to be settled in the subsequent hire.

All subsequent hire payments will follow the same procedure until vessel’s redelivery.

Charterers will, within fifteen (15) days of redelivery, pay the final outstanding hire to Owners. Owners agree to return any overpaid amounts to Charterers (if any) within the same deadline.

________ United States Currency per ton on vessel’s total deadweight carrying capacity, including bunkers and stores, on ______ summer freeboard, per Calendar Month, commencing on and from the day of her delivery, as aforesaid, and at and after the same rate for any part of a month; hire to continue until the hour of the day of her re-delivery in like good order and condition, ordinary wear and tear excepted, to the Owners (unless lost) at on dropping last outward sea pilot or passing one safe port PMO/Japan range or in Charterers’ option Skaw/Passero range, including United Kingdom/Eire, at any time day and night Sundays and Holidays included ______ unless otherwise mutually agreed. Charterers are to give Owners not less than ___ days notice of vessels expected date of re-delivery, and probably port.

5. Payment of said hire to be made in New York paid to Owners' Bank account, see clause 98 in cash in United States Currency, every 15 days   semi monthly in advance, and for the last 15 days   half month or part of same the approximate amount of hire, and should same not cover the actual time, hire is to be paid for the balance day by day, as it becomes duedue, if so required by Owners, unless bank guarantee or deposit is made by the Charterers, otherwise failing the punctual and regular payment of the hire, or bank guarantee, or on any breach of this Charter Party, the Owners shall be at liberty to withdraw the vessel from the service of the Charterers, without prejudice to any claim they (the Owners) may otherwise have on the Charterers.   Time to count from 7 a.m. on the working day following that on which written notice of readiness has been given to Charterers or their Agents before 4 p.m., but if required by Charterers, they to have the privilege of using vessel at once, such time used to count as hire.   see Clause 43

Cash for vessel's ordinary disbursements at any port may be advanced as required by the Captain, by the Charterers or their Agents, subject to 2 1 / 2 % commission and such advances shall be deducted from the hire. The Charterers, however, shall in no way be responsible for the application of such advances and in case Owners outlays are disputed, Owners are to settle disputed items with Agents involved directly (see also Clause 40) .

6. That the cargo or cargoes be laden and/or discharged in any safe dock or at any safe wharf or safe anchorage or safe place that Charterers or their Agents may direct, provided the vessel can safely lie always afloat at any time of tide , except at such places where it is customary for similar size vessels to safely
lie aground .

7. That the whole reach of the Vessel's Hold, Decks, and usual places of loading (not more than she can reasonably stow and carry), also accommodations for Supercargo, if carried, shall be at the Charterers' disposal, reserving only proper and sufficient space for Ship's officers, crew, tackle, apparel, furniture, provisions, stores and fuel. Charterers have the privilege of passengers as far as accommodations allow, Charterers paying Owners ______ per day per passenger for accommodations and meals. However, it is agreed that in case any fines or extra expenses are incurred in the consequences of the carriage of passengers, Charterers are to bear such risk and expense.

8. That the Captain shall prosecute his voyages with the utmost despatch, and shall render all customary assistance with ship's crew and boats. The Captain (although appointed by the Owners), shall be under the orders and directions of the Charterers as regards employment and agency; and Charterers are to load, stow, and trim and discharge the cargo at their expense under the supervision of the Captain, who is to sign Bills of Lading for cargo as presented, in conformity with Mate's or Tally Clerk's receipts without prejudice to this Charter Party .

9. That if the Charterers shall have reason to be dissatisfied with the conduct of the Captain, Officers, or Engineers, the Owners shall on receiving particulars of the complaint, investigate the same, and, if necessary, make a change in the appointments.

10. That the Charterers shall have permission to appoint a Supercargo, who shall accompany the vessel and see that voyages are prosecuted with the utmost despatch. He is to be furnished with free accommodation, and same fare as provided for Captain's table, Charterers paying at the rate of $10.00 per day. Owners to victual Pilots and Customs Officers, and also, when authorized by Charterers or their Agents, to victual Tally Clerks, Stevedore's Foreman, etc., Charterers paying as per Clause 72 . at the current rate per meal, for all such victualling.

11. That the Charterers shall furnish the Captain from time to time with all requisite instructions and sailing directions, in writing, and the Captain shall keep a full and correct Log of the voyage or voyages, which are to be patent to the Charterers or their Agents, and furnish the Charterers, their Agents or Supercargo, when required, with a true copy of daily Logs, showing the course of the vessel and distance run and the consumption of fuel.

12. That the Captain shall use diligence in caring for the care and ventilation of the cargo. The Vessel has natural ventilation.

13. That the Charterers shall have the option of continuing this charter for a further period of ______ ______ on giving written notice thereof to the Owners or their Agents _______ days previous to the expiration of the first-named term, or any declared option.

14. That if required by Charterers, time not to commence before 05th November, 2018 (See also Clause 36) and should vessel not have given written notice of readiness on or before 12th November, 2018 (See also Clause 36) but not later than 4 p.m. Charterers or their Agents to have the option of cancelling this Charter at any time not later than the day of vessel's readiness. (See also Clause 36) .

15. That in the event of the loss of time from default and/or deficiency of men or stores, fire, breakdown or damages to hull, machinery or equipment, grounding, detention by average accidents to ship or cargo, drydocking for the purpose of examination or painting bottom, or by any other cause preventing the full working of the vessel, the payment of hire shall cease for the time thereby lost; until the Vessel has returned to the same or equivalent position and if upon the voyage the speed be reduced by defect in or breakdown of any part of her hull, machinery or equipment, the time so lost, and the cost of any extra fuel consumed in consequence



This document is a computer generated NYPE 46 form printed by BIMCO.  Any insertion or deletion to the form must be clearly visible. In event of any modification being made to the pre-printed text of this document which is not clearly visible, the text of the original printed NYPE 1946 document shall apply. BIMCO assumes no responsibility for any loss, damage or expense caused as a result of discrepancies between the original printed NYPE 1946 document and this computer generated document.

thereof, and all extra expenses shall be deducted from the hire.

16. That should the Vessel be lost, money paid in advance and not earned (reckoning from the date of loss or being last heard of) shall be returned to the Charterers at once. The act of God, enemies, fire, restraint of Princes, Rulers and People, and all dangers and accidents of the Seas, Rivers, Machinery, Boilers and Steam Navigation, and errors of Navigation throughout this Charter Party, always mutually excepted. The vessel shall have the liberty to sail with or without pilots, to tow and to be towed, to assist vessels in distress, and to deviate for the
purpose of saving life and property.

17. That should any dispute arise between Owners and the Charterers, the matter in dispute shall be referred to three persons at London New York , one to be appointed by each of the parties hereto, and the third by the two so chosen; their decision or that of any two of them, shall be final, and for the purpose of enforcing any award, this agreement may be made a rule of the Court. The Arbitrators shall be commercial shipping men. For any dispute not exceeding the amount of $100,000, the parties agree same to be dealt with by LMAA, small claims proceedings 2002 or any amendment thereof.

18. That the Owners shall have a lien upon all cargoes, and all sub-freights , sub-hires for any amounts due under this Charter, including General Average contributions, and the Charterers to have a lien on the Ship for all monies paid in advance and not earned, and any overpaid hire or excess deposit to be returned at once. Charterers will not suffer, nor permit to be continued, any lien or encumbrance incurred by them or their agents, which might have priority over the title and interest of the owners in the vessel.

19. That all derelicts and salvage shall be for Owners' and Charterers' equal benefit after deducting Owners' and Charterers' expenses and Crew's proportion. General Average shall be adjusted, stated and settled, according to Rules 1 to 15, inclusive, 17 to 22, inclus i ve, and Rule F of York-Antwerp Rules 1974 and any amendments thereto 1924, at such port or place in the United States as may be selected by the carrier, and as to matters not provided for by these Rules, according to the laws and usages at the port of London.   New York. In such adjustment disbursements in foreign currencies shall be exchanged into United States money at the rate prevailing on the dates made and allowances for damage to cargo claimed in foreign currency shall be converted at the rate prevailing on the last day of discharge at the port or place of final discharge of such damaged cargo from the ship. Average agreement or bond and such additional security, as may be required by the carrier, must be furnished before delivery of the goods. Such cash deposit as the carrier or his agents may deem sufficient as additional security for the contribution of the goods and for any salvage and special charges thereon, shall, if required, be made by the goods, shippers, consignees or owners of the goods to the carrier before delivery. Such deposit shall, at the option of the carrier, be payable in United States money and be remitted to the adjuster. When so remitted the deposit shall be held in a special account at the place of adjustment in the name of the adjuster pending settlement of the General Average and refunds or credit balances, if any, shall be paid in United States money. Hire not to contribute to general Average.

In the event of accident, danger, damage, or disaster, before or after commencement of the voyage resulting from any cause whatsoever whether due to negligence or not, for which, or for the consequence of which, the carrier is not responsible, by statute, contract, or otherwise, the goods, the shipper and the consignee, jointly and severally, shall contribute with the carrier in general average to the payment of any sacrifices, losses, or expenses of a general average nature that may be made or incurred, and shall pay salvage and special charges incurred in respect of the goods. If a salving ship is owned or operated by the carrier, salvage shall be paid for as fully and in the same manner as if such salving ship or ships belonged to strangers.

Provisions as to General Average in accordance with the above are to be included in all bills of lading issued hereunder.

20. Fuel used by the vessel while off hire, also for cooking, condensing water, or for grates and stoves to be agreed to as to quantity, and the cost of replacing same, to be allowed by Owners.

21. That as the vessel may be from time to time employed in tropical waters during the term of this Charter, Vessel is to be docked at a convenient place, bottom cleaned and painted whenever Charterers and Captain think necessary, at least once in every six months, reckoning from time of last painting, and payment of the hire to be suspended until she is again in proper state for the service. See Dry-Docking Clause No. 93.
______
______
22. Owners shall maintain the gear of the ship as fitted, providing gear (for all derricks) capable of handling lifts up to three tons, also providing ropes, falls, slings and blocks. If vessel is fitted with derricks capable of handling heavier lifts, Owners are to provide necessary gear for same, otherwise equipment and gear for heavier lifts shall be for Charterers' account. Owners also to provide on the vessel lanterns and oil for night work, and vessel to give use of electric light when so fitted, but any additional lights over those on board to be at Charterers' expense. The Charterers to have the use of any gear on board the vessel.

23. Vessel to work night and day, if required by Charterers, and all winches to be at Charterers' disposal during loading and discharging; steamer to provide one winchman per hatch to work winches day and night, as required, Charterers agreeing to pay officers, engineers, winchmen, deck hands and donkeymen for overtime work done in accordance with the working hours and rates stated in the ship's articles. If the rules of the port, or labor unions, prevent crew from driving winches, shore Winchmen to be paid by Charterers. In the event of a disabled winch or winches, or insufficient power to operate winches, Owners to pay for shore engine, or engines, in lieu thereof, if required, and pay any loss of time occasioned thereby.

24. It is also mutually agreed that this Charter is subject to all the terms and provisions of and all the exemptions from liability contained in the Act of Congress of the United States approved on the 13th day of February, 1893, and entitled "An Act relating to Navigation of Vessels; etc.," in respect of all cargo shipped under this charter to or from the United States of America. It is further subject to the following clauses, both of which are to be included in all bills of lading issued hereunder:
U. S. A. Clause Paramount
This bill of lading shall have effect subject to the provisions of the Carriage of Goods by Sea Act of the United States, approved April 16, 1936, which shall be deemed to be incorporated herein, and nothing herein contained shall be deemed a surrender by the carrier of any of its rights or immunities or an increase of any of its responsibilities or liabilities under said Act. If any term of this bill of lading be repugnant to said Act to any extent, such term shall be void to that extent, but no further.
Both to Blame Collision Clause



This document is a computer generated NYPE 46 form printed by BIMCO.  Any insertion or deletion to the form must be clearly visible. In event of any modification being made to the pre-printed text of this document which is not clearly visible, the text of the original printed NYPE 1946 document shall apply. BIMCO assumes no responsibility for any loss, damage or expense caused as a result of discrepancies between the original printed NYPE 1946 document and this computer generated document.

If the ship comes into collision with another ship as a result of the negligence of the other ship and any act, neglect or default of the Master, mariner, pilot or the servants of the Carrier in the navigation or in the management of the ship, the owners of the goods carried hereunder will indemnify the Carrier against all loss or liability to the other or noncarrying ship or her owners in so far as such loss or liability represents loss of, or damage to, or any claim whatsoever of the owners of said goods, paid or payable by the other or non carrying ship or her owners to the owners of said goods and set off, recouped or recovered by the other or non carrying ship or her owners as part of their claim against the carrying ship or carrier.

25. The vessel shall not be required to force ice or follow ice breakers or enter any ice-bound port, or any port where lights or light-ships have been or are about to be withdrawn by reason of ice, or where there is risk that in the ordinary course of things the vessel will not be able on account of ice to safely enter the port or to get out after having completed loading or discharging.

26. Nothing herein stated is to be construed as a demise of the vessel to the Time Charterers. The owners to remain responsible for the navigation of the vessel, insurance, crew, and all other matters, same as when trading for their own account.

27. A commission of 2 1 / 2 1.25 per cent is payable by the Vessel and Owners to Seanergy Management Corp both on hire earned and paid under this Charter, and also upon any continuation or extension of this Charter.

28. An address commission of 2 1 / 2   3.75 per cent payable to Charterers on the hire earned and paid under this Charter.

Additional Clauses from Clause 29 to Clause 112, as attached to be fully incorporated in this CharterParty.










 
THE OWNERS:
CHAMPION MARINE CO.
 
THE CHARTERERS:
CARGILL INTERNATIONAL S.A.
 








   
By cable authority from
   

The original Charter Party in our possession.
 
BROKERS.
 
As ______ For Owners
 










This document is a computer generated NYPE 46 form printed by BIMCO.  Any insertion or deletion to the form must be clearly visible. In event of any modification being made to the pre-printed text of this document which is not clearly visible, the text of the original printed NYPE 1946 document shall apply. BIMCO assumes no responsibility for any loss, damage or expense caused as a result of discrepancies between the original printed NYPE 1946 document and this computer generated document.



ADDITIONAL CLAUSES TO MV “CHAMPIONSHIP” / CARGILL INTERNATIONAL S.A.,
CHARTER PARTY DT., 05 TH NOVEMBER, 2018
CLAUSE 29  TIME CHARTER VESSEL’S DESCRIPTION
M/V CHAMPIONSHIP - TIMECHARTER DESCRIPTION (all figures about)
Flag:
LIBERIA
Built:
16 JUNE 2011
Classification:
BUREAU VERITAS (BV)
Description:
BULK CARRIER CSR CPS(WBT) BC-A (maximum cargo density 3.00 t/m3; holds 2,4,6 and 8 may be empty) ESP GRAB(30), Unrestricted navigation, AUT-UMS (CS), MON-SHAFT, INWATER SURVEY
Deadweight:
179237.7 MT
Summer Draft:
18.322 M
IMO NUMBER:
9403516
LOA:
292 Mtrs
Beam (Moulded):
45.00 Mtrs
Depth (Moulded):
24.80 Mtrs
TPC:
122.4
Constants:
350 MTs
GRT:
93196
Net Tons:
59298
Suez:
NET 87180.62 / GT 93878.63
Speed & Consumption:
UP TO AND INCL BF4 AND DSS3 AND NO SWEEL OR ADV CURRENT AS FOLLOWS: 14.0 / 13.0 KTS ON ABT 56 / 49 MT LADEN AND 14.0 / 13.0 KTS ON ABT 44 / 39 MT BALLAST IFO 380 + 3.5 MT IFO + 0.3 MDO AXU NDAS.
IN PORT ABT 6.0 WKG / 3.5 MT IDLE IFO380 PLUS ABT 2MT IFO 380 FOR BOILER WHEN BALLASTING / DEBALLASTING OR DURING HOLDS CLEANING VESSEL BURNS ABT 3.0 MT IFO 380 PLUS.
GRADE OF FUEL IFO 380 ISO 8217 2017 WHERE AVAILABLE / IF NOT ISO 8217 2015
Remark:
For scrubber fitted vessel an increase of about 2% at the SFOC or about 2MTs per day for the main engine and the auxiliaries due to backpressure and scrubber equipment
Main Engine:
1 x MAN B&W 6S70ME-C MCR 18660KW X 91RPM NCR 15861KW x 86.2RPM
Holds/Hatches:
9 HOLDS / 9 HATCHES
HATCH SIZES:
No. 1+9: 15.64 m x 17.20 m
No 2-8: 15.64 m x 20.60 m
Hold Capacities:
NO. 1: 19364.0, NO. 2: 22320.7 NO. 3: 22404.9, NO. 4: 22404.9, NO. 5: 23203.5, NO. 6: 23217.7 NO. 7: 22406.9, NO. 8: 22040.4, NO. 9: 20235.5, TOTAL: 187598.5
Owners P&I Club:
THE LONDON P&I CLUB
Owners:
Champion Marine Co.,
of the Marshall Islands
c/o Seanergy Management Corp.
154 Vouliagmenis Avenue, 16674 Glyfada, Greece
Managers:
V.SHIPS LIMITED

GOOD WEATHER DEFINITION
Basis good weather, which is hereby defined as max Beaufort force 4 and Douglas Sea State 3. Vessel’s good weather performance speed to be adjusted for the effect of currents.

ADDITIONAL CLAUSES TO MV “CHAMPIONSHIP” / CARGILL INTERNATIONAL S.A., CHARTER PARTY DT., 05 TH NOVEMBER, 2018
PERFORMANCE WARRANTY
“Speed and consumption figures are always given on an “about” basis, where “about” is understood to mean either 0.5 knot downwards in the speed or 5% upwards in the consumption (but not both), i.e., only one “about” is to apply.”
Vessel’s speed/cons as described are warranted throughout the duration of this CP and Owner guarantee the vessel is Rightship approved with minimum 3 Stars rating unless ship’s star rating is lost due to Charterers’ or Charterers’ appointed servants (e.g., Stevedores) in which case the ship to remain on-hire and will remain so throughout the duration of this CP.
CLAUSE 30 - WEATHER ROUTING
Charterers may supply independent weather bureau advice (from a reputable independent weather bureau as selected by Charterers) to the Master during voyages specified by the Charterers. The Master is to comply with the reporting procedures of the routing service selected by Charterers. If, during the currency of the Charter Party, the speed of the vessel be reduced and/or fuel oil consumption be increased, Charterers shall have the right to deduct from hire an amount equivalent to the time lost and/or cost of any extra fuels consumed subject to having produced to owners a documented claim supported by the weather bureau.
Evidence of weather conditions to be taken from the vessel’s deck logs and independent weather bureau reports. In the event of a discrepancy between deck logs, ‘in the absence of data from another equally reputable weather Bureau (appointed by the Owners) evidencing to the contrary’, and the independent weather bureau reports, then the independent bureau reports are to be taken as final and binding on both parties. ‘In case of conflict between the data presented by the two weather Bureaus, the average of the two to be taken as ruling.’
CLAUSE 31 - DIESEL OIL IN PORT
The Vessel is to have the liberty of using LSMGO when entering and leaving port and for maneuvering in shallow narrow waters, provided such usage is determined to be essential for the safe maneuvering of the Vessel, always at the discretion of the Master and in compliance with local and international regulations.
CLAUSE 32 - COMMUNICATION EQUIPMENT
The Vessel shall, as a minimum be equipped with wireless telegraph, email and VHF telephone to comply with International regulations and to allow Vessel to communicate with land stations. Master, Senior Officers and Radio Officer to be fully conversant with the English language.
CLAUSE 33 - PERMITTED CARGOES
Coal (excluding Pond Coal), Iron Ore and/or Pellets and/or Concentrates (excluding DRI / DPI and sponge iron), iron ore lumps, manganese ore and bauxite.
Above cargoes are to be loaded always within Vessels natural segregation and always according to IMO Regulations.
CLAUSE 34 - TRADING
Worldwide excluding all countries that would cause Owners to violate trade sanction laws promulgated by the USA/EU/UN and:
Angola including Cabinda, Albania, Alaska, Abkhazia, Amazon / Orinoco Rivers, Bangladesh, Bosnia Herzegovina, Cyprus, Cuba, Cambodia, Congo (formally Zaire), Croatia (except Bakar), Ethiopia, Eritrea, El Salvador, Ghana, Haiti, Honduras, Guatemala, Iraq, Kuwait, Libya, Morocco, North Korea, Nicaragua, Nigeria, Namibia, Somalia and including Somalia Coast, Syria, Sri Lanka (but bunkering in these places is always allowed), Turkish occupied Cyprus, Yemen, Yugoslavian

ADDITIONAL CLAUSES TO MV “CHAMPIONSHIP” / CARGILL INTERNATIONAL S.A., CHARTER PARTY DT., 05 TH NOVEMBER, 2018
Federal Republic of (Serbia and Montenegro) and any declared war zone or where a war like situation prevails.
Charterers to reimburse Owners any net additional war risk insurance premium on entered hull and machinery value where Vessel breaches war risk warranties payable against Underwriters invoice not greater than quoted at Lloyds.  It is understood that in the event of any change of premium Owners undertake to pass on to Charterers the actual premium debited to Owners and Charterers only to pay this amount as evidenced by vouchers. Owners undertake to use best efforts to minimize the rate. Crew war bonus, if any, to be for Charterers’ account.
Subject to Owners’ approval which to be given within 4 hours following the request and not to be unreasonably withheld, Charterers are to have the option to instruct the vessel to break Institute Warranty/Navigating Limits. Charterers are to reimburse to Owners any additional H&M insurance premium actually imposed by the vessel’s Underwriters as a consequence of a breach of IWL/INL but to be entitled to have the benefit of any discounts received by the Owners for such extra insurance.
Also ref clause 95 for Gulf of Aden/Indian Ocean HRA trading
EBOLA CLAUSE:
When trading to Liberia and / or Sierra Leone that have had confirmed cases of Ebola in the preceding 40 days period, Charterers to take the following precautions, which are based on the latest WHO updates:
-
-
Only necessary shore personnel to be allowed on board the Vessel;
Vetting personnel coming on board, rejecting anyone with obvious symptoms eg. coughing, high fever / sweating to be refused for boarding;
-
Shore personnel and ship’s crew to wear masks, gloves etc prior going on board and thereafter;
-
No shore personnel to enter the superstructure;
-
If officials need to enter superstructure for any required inspections, then same to be allowed but always with protective equipment and accompanied by a member of the crew;
-
Shore personnel to be set up in the tally office. This may extend to temporary bed and victualing;
-
No shore leave for ship’s crew.
CLAUSE 35 - DELIVERY / REDELIVERY RANGE AND NOTICES / ITINERARY
35.1
- O wners to tender 1 day definite notice.
35.2
- Charterers are to give Owners not less than 15 approximate days notice of redelivery range and then 10, 5 and 2 days notice of redelivery. Charterers are to keep Owners duly informed of Vessel’s itinerary and any change of redelivery range / redelivery port.
Redelivery on dropping last outward sea pilot or passing one safe port PMO / Japan range or in Charterers’ option Skaw / Passero range, including United Kingdom / Eire, at any time, day, night, Sundays and holidays included.
35.3
- Charterers undertake to inform the Owners, during the period of Charter, as regards to the itinerary of the Vessel and the names and full styles of their Agents at ports of call whenever so required by the Owners.
35.4
- Charterers will not fix the vessel deliberately to exceed maximum period allowed under this CP but if due to unforeseen circumstances, should the maximum period be exceeded, then the Charterers to pay Owners a hire for any such exceeding period based on ……………. (index/fixed rate), but in any case not less than the charter party hire.

ADDITIONAL CLAUSES TO MV “CHAMPIONSHIP” / CARGILL INTERNATIONAL S.A., CHARTER PARTY DT., 05 TH NOVEMBER, 2018
35.5
- Charterers option to add any or all time off-hire to the maximum Charter period, including any dry-docking period in any, to be declared latest 1 month before the minimum Charter Party period.
CLAUSE 36 -  DELIVERY DATE
Laycan: 5th November 2018 - 12th November 2018 at any time day, night, Sundays and holidays included.
CLAUSE 37 - JOINT SURVEY
Charterers and Owners are to hold joint on and off hire bunker and condition surveys on delivery and redelivery, the expense and time (if time lost) is to be shared equally between Owners and Charterers.
CLAUSE 38 - HOLDS’ CONDITION AND CLEANING
38.1
Vessel to deliver with all holds/cargo compartments clean, dry, free of rust and/or scale and cargo residues and ready in all respects to the satisfaction of the relevant surveyor and/or such other recognized local authority or official as local regulations or Shippers may require to receive permitted cargo which the Vessel may be required to load. If, on presentation for loading at the first loading port the Vessel should fail to pass the above cargo surveys, then all expenses for cleaning and/or fumigating including cost of labor standing by to be for the Owners’ account, and the Vessel to be off-hire from time of failing such surveys until it is in all respects ready to load and survey passed. If some holds / cargo carrying compartments are not accepted, Charterers shall have the option of accepting the Vessel with those which are accepted and in that case Charterers shall pay hire proportionate to the number of holds/ cargo carrying compartments which have passed survey. However, if thereafter there should be any delay owing to nonacceptance of any hold/cargo carrying compartment Vessel shall be wholly off-hire until the loading program can be fully resumed.
38.2
Hold Cleaning/Residue Disposal Clause for Time Charter Parties

a)
The Charterers may request the Owners to direct the crew to sweep and/or wash and/or clean the holds between voyages and/or between cargoes against payment of U.S.$ . 600-Per hold actually cleaned, provided the crew is able safely to undertake such work and is allowed to do so by local regulations. In connection with any such operation the Owners shall not be responsible if the Vessel’s holds are not accepted or passed. Time for cleaning shall be for the Charterers’ account.

b)
All materials (including chemicals and detergents) required for cleaning of cargo holds shall be supplied by and paid for by the Charterers.

c)
Throughout the currency of this Charter Party and at redelivery, the Charterers shall remain responsible for all costs and time, including deviation, if any, associated with the removal and disposal of cargo related residues and/or hold washing water and/or chemicals and detergents and/or waste as defined by MARPOL Annex V, Section 1 or other applicable rules relating to the disposal of such substances.
38.3
- Charterers have the option to redeliver the Vessel unclean as left by stevedores against paying U.S. $. 6.000-- in lieu of hold cleaning.
CLAUSE 39 - BUNKERS CLAUSE
Vessel will be delivered with bunker quantity as on board (Owners to provide as soon as possible the approximate quantity expected on board on delivery) but same to always be sufficient to reach nearest main bunkering port.
Bunkers on redelivery to be similar to the actual quantities on delivery.

ADDITIONAL CLAUSES TO MV “CHAMPIONSHIP” / CARGILL INTERNATIONAL S.A., CHARTER PARTY DT., 05 TH NOVEMBER, 2018
Prices of bunkers on delivery and redelivery to be the Platts Singapore prices for each grade prevailing at the day of delivery and redelivery respectively.
Charterers to pay for bunkers on delivery together with first hire payment and Charterers to deduct value of estimated redelivery bunkers from last sufficient hire payment(s) but such deduction does not constitute redelivery notice(s).
Charterers to have the option of bunkering the Vessel for their own account prior to delivery provided same does not interfere with Owners’ operations. Owners to have the option of bunkering the Vessel for their own account prior to redelivery provided same does not interfere with Charterers’ operations.
Owners warrant that:
-
They will free up/provide a dedicated tank for LSGO that has sufficient LSGO capacity for ECA-Zone trading (about 10 - 12 days trading at full speed), latest 7 days prior entering any IMO/ MARPOL defined ECA Zone at Owners time, risk and expense ;

-
The Vessel is fully compliant with the IMO/MARPOL ECA Zone regulations as applicable from time to time throughout this Charter-Party. Any deviation and consequential costs due to Owners noncompliance with this Clause including consequential damages shall be for Owners’ account.

Alternative bunker specs:
Owners accept local bunker specifications in South Africa (IFO RMF 25), Brazil, India, Taiwan as long as same are being supplied by internationally recognized bunker suppliers and comply with Marpol Annex VI Rule 18.
For vessels that are being taken for long period going beyond 2020 following to apply:
Owners warrant that the vessel will, for the duration of the CP, comply with all IMO regulations, including those related to bunker sulphur limits. Owners warrant that, as of January 2020, the vessel will be able to burn all ISO standard low sulphur bunker types. Additionally, Owners shall not unreasonably refuse Charterers’ request to burn any type of bunkers that are technically capable of being burned by the vessel. All sludge removal shall be for Owners’ account.
CLAUSE 40 - OWNERS’ AND CHARTERERS’ EXPENSES
Owners to provide and pay for all expenses of the Officers and Crew including but not limited to immigration fees and also all consular fees necessitated because of Vessel’s flag or nationality of Owners/Master/Crew. Owners to pay for all lubricating oils. Vessel is to have on board all certificates necessary to comply with all requirements at the ports of call and canals during the currency of this Charter Party, failing which Owners are to be responsible for all time lost and expenses incurred thereby.
Charterers’ agents to attend to Vessel’s customary minor matters without paying agency fee but actual costs for such items to be for Owner’s account. In case of major repairs, repatriation or General Average the Owners to nominate their own agents or use Charterers’ agents against paying all relevant charges/ fees.
Charterers’ agent to husband the Vessel as required but Owners to pay for any difference between Charterers’ normal agency fee and the fee chargeable for attendance to both interests.
CLAUSE 41 - INSURANCE / P . AND I. C OVER
41.1
- Owners warrant that throughout the currency of this Charter Party the Vessel shall be fully covered by leading insurance companies/international P and I Clubs against Hull and Machinery Insurance, Increased Value Insurance, War and Protection and Indemnity Risk. Costs of such cover to be at the sole expense of Owners.

ADDITIONAL CLAUSES TO MV “CHAMPIONSHIP” / CARGILL INTERNATIONAL S.A., CHARTER PARTY DT., 05 TH NOVEMBER, 2018
41.2
- If required by the Charterers, prior to commencement of the Charter or at any other time, the Owners shall procure that the Managers of the Hull and Machinery insurance, Increased Value Insurance and the Protection and Indemnity Association shall give the Charterers proper evidence that the Vessel is fully covered by the Owners, provided same allowed by the rules of the Hull and Machinery insurers.
H. and M.: Hull and Machinery with
:
Leading U/W: Lloyds Underwriters
H. and M. Value
:
33,500,000
P. & I. Club
:
The London P&I Club
War Risks covered with
:
Hellenic War Risks
IV Value
:
16,750,000
     
CLAUSE 42 - WITHHOLDINGS
Charterers shall be entitled to deduct from hire payments any disbursements for owners account, either actual amounts supported by vouchers or estimated amounts, but maximum U.S.$ 1,000.00 per port of call also any advances to the Master including commission thereon and any previous overpayments of hire including agreed offhire and substantiated performance claims.
CLAUSE 43 - HIRE PAYMENT CLAUSE
Hire: Firm period: 5 years index-linked at below percentages of BCI 5TC Average (less 3.75% address commission) + Scrubber Premium as per Cl. 111 (e)
Year 1: 90%
Year 2: 91.5%
Year 3: 93%
Year 4: 94.5%
Year 5: 96%
Optional period: 18 months index-linked at 100% of BCI 5TC Average (less 3.75% address commission) + Scrubber Premium as per Cl. 111 (e)
Vessel to remain on-hire throughout the scrubber installation period.
Owners to have the option to convert to fixed rate for between 3 to 12 months based on the prevailing FFA curve bids (subject to market liquidity) adjusted for the above mentioned percentages for each annual hire period in question.
For the index-linked portion, the hire rate for each fifteen (15) days period is calculated by taking within that fifteen (15) days period the average of all the published Baltic Cape Index (BCI) of the 5 TC routes daily reports.
The hire for the first fifteen (15) days period is to be paid within three (3) banking days after delivery. The approximate hire is to be calculated using the fifteen (15) days period prior delivery. The difference between said approximated hire and the actual hire based on actual index of the fifteen (15) days after delivery is to be settled in the subsequent hire. All subsequent hire payments will follow the same procedure until vessel’s redelivery.
Charterers will within fifteen (15) days of redelivery pay the final outstanding hire to Owners. Owners agree to return any overpaid amounts to charterers (if any) within the same deadline.
Should the 5 (five) TC BCI type be recalibrated in the future then the size adjustment premium is to be adjusted down accordingly by the official conversion factor as advised by the Baltic Exchange.

ADDITIONAL CLAUSES TO MV “CHAMPIONSHIP” / CARGILL INTERNATIONAL S.A., CHARTER PARTY DT., 05 TH NOVEMBER, 2018
Hire payable every 15 (fifteen) days in advance including overtime. First hire payable latest 3 (three) banking days after delivery.
Charterers will not agree to the assignment of hire, monies due under this Charter Party in any circumstances whatsoever.
Charterers have the right to deduct value of bunkers on redelivery against last sufficient hire payments and such deduction does not constitute redelivery notice(s).
To offset general errors/omissions Owners to give Charterers minimum three (3) banking days written notice before exercising their right under this contract, and when so rectified within those three (3) days following Owners’ notice, the payment shall stand a regular and punctual and Owners will not withdraw the vessel.
Charterers are not responsible for any delays in Owner receiving funds due to bank delay in transmission of funds resulting from OFAC or similar issues.
Owner shall have no right to withdraw the Vessel for nonpayment of hire if receipt of funds is delayed by OFAC issues. Proof of Charterer’s proper payment instructions to Charterer’s bank fulfills Charterers’ payment obligations as per Charter Party.
CLAUSE 44 - TAXES
Any tax and/or dues imposed on account of Owners, the vessel, the vessel’s flag or crew and/or charter hire to be for Owners’ account with the exception of all taxes and/or dues whatsoever imposed in Charterer’s domicile (including but not limited to Chinese Enterprise Income Tax and/or Business Tax) which to be for Charterer’s account.
All taxes and/or dues imposed on cargo or freight to be for receivers/charterers account, including MMRT (Merchant Marine Renewal Tax)/Wharfage/Inframar/P.U. tax (Port Utilization Tax) or PIUT (Port Infrastructure Utilization Tax).
CLAUSE 45 - DEVIATION / PUT BACK
In the event of loss of time either in port or at sea, deviation from the course of the voyage or putting back whilst on voyage, caused by sickness of or an accident to or misconduct by Master / Officers / crew, stowaway, refugee or any person on board Vessel other than persons travelling by request of Charterers or by reason of the refusal of Master or Officer(s) or crew to perform their duties or an accident or breakdown to Vessel or dry-docking or periodical survey, the hire shall be suspended from the time of inefficiency in port or at sea, deviation or putting back until Vessel is again efficient in the same or equivalent position to the port where Vessel is originally destined for and voyage resumed therefore, and all expenses incurred including bunkers consumed during such period of suspension shall be for Owners’ account.
The Owners to be credited with any saving(s) in respect of time and fuels saved if her position when she re-enters Charterers’ service so allows.
CLAUSE 46 - STEVEDORE DAMAGE
Stevedores to be appointed and paid by the Charterers but to work under the supervision of the Master. Should any damage be caused to the Vessel or her fittings by the Stevedores, the Master shall try to arrange for Stevedores to repair such damage and try to settle the matter directly with them however, the Charterers shall remain liable to the Owners for stevedore damage whether or not payment has been made by stevedores to the Charterers in respect of the stevedore damage .
The Charterers shall not be responsible for any damage caused by Stevedores unless the Master notifies the Charterers or their Agents of such damage within 48 hours from occurrence, except for

hidden damages which to be reported within 48 hours after discovery but always prior redelivery. The Master shall also endeavor to obtain written acknowledgement of the damage and liability from the concerned Stevedores on occurrence.
Any and all damage(s) affecting the Vessel’s seaworthiness and/or class and/or safety of the crew and/or affecting the trading capabilities of the Vessel are to be repaired immediately by Owners at Charterers cost and the Vessel is to remain on hire until such repairs are completed and if required passes by Vessel’s classification society.
The Charterers shall have the liberty to redeliver the Vessel without repairing the damages for which the Charterers are responsible, as long as the damages do not affect the Vessel’s seaworthiness and/or class and/or safety of the crew and/or affecting the trading capabilities of the Vessel, but the Charterers undertake to reimburse costs of repair against production of repair bills by repairers of dockyard unless otherwise agreed, but time used for repairs not to count as hire.
CLAUSE 47 - GRAB DISCHARGE
Vessel is to be suitable for normal size grab discharge and no cargo to be loaded in places inaccessible to grabs. Charterers have the privilege of using bulldozers in the Vessel’s holds provided their weight does not to exceed the vessel’s tank-top strength.
CLAUSE 48 - ITF
The Owners warrant that officers and crew of the vessel are covered for the duration of the Charter Party by an I.T.F. agreement or other bona fide Trade Union Agreement acceptable to I.T.F. Loss of time as a result of noncompliance shall be considered as off-hire and any extra expenses incurred or time lost shall be for Owners’ account. Furthermore Owners warrant that throughout the duration of this Charter, the vessel’s flag and crewing arrangements shall not interfere with or restrict the vessel’s trading restrictions or employment.
CLAUSE 49 - ARREST
Should the Vessel be arrested during the currency of the Charter Party at the suit of any person having or purporting to have a claim against or any interest in the Vessel, hire under this Charter Party shall not be payable in respect of any period whilst the Vessel remains under arrest or remains unemployed as a result of such arrest. The Clause shall be inoperative should the arrest be caused through any act or omission of the Charterers.
CLAUSE 50 - LACK OF CREW MEMBERS
Any time lost by the Vessel by reason of all required crew members not being on board when the Vessel is ready to sail, or by reason of a strike, stoppage or refusal to work by any crew is to be for Owners’ account and expenses for waiting or cancelling tugs, pilots or mooring boats are to be for Owners’ account.
CLAUSE 51 - BILLS OF LADING
51.1
- If required by Charterers and/or their Agents, Master is to authorize them to sign Bills of
Lading in Charterers’ or sub/head Charterers’ form on his behalf in accordance with mate’s receipts without prejudice to this Charter Party. All Bill of Lading issued under this Charter Party to bear The Both to Blame Collision clause, General Clause Paramount, New Jason Clause.
51.2
- Discharging port(s) shown on Bills of Lading do not constitute a declaration of discharging port(s) and Charterers have the right to order the Vessel to any safe port(s) within the terms of this Charter Party. In this case Charterers are to give prior notice thereof in advance to Owners.

ADDITIONAL CLAUSES TO MV “CHAMPIONSHIP” / CARGILL INTERNATIONAL S.A., CHARTER PARTY DT., 05 TH NOVEMBER, 2018
51.3
- In case Original Bill(s) of Lading not available at discharging port, Owners agree to deliver the entire cargo against a single Letter of Indemnity in the wording acceptable to Owners’ P&I Club (as per the International Group’ P. and I. Club wordings) on Charterers’ headed paper, stamped and signed by Charterers only.
51.4
- In the event that Charterers request Owners to discharge cargo either: I) without Bills of Lading and or II) at a discharging port other than that named in the Bill of Lading shall discharge such cargo in accordance with Charterers instructions in consideration of receiving a Letter of Indemnity in the wording acceptable to Owners’ P&I Club addressed to them from Charterers hereunder in the International Group’ P. and I. Club wording on Charterers’ headed paper, stamped and signed by Charterers only.
SPLIT OF BILLS OF LADING
Charterers and/or agents are hereby authorised by Owners/Master to split Bills of Lading and issue ship delivery orders in negotiable and transferable forms against collection of full set of original Bills of Lading. Delivery orders to conform with all terms and conditions and exceptions of Bills of Lading and shall not prejudice shipowner’s rights.
Owners shall remain responsible for the total quantity loaded but owners shall not be responsible for the delivery of the cargo to each delivery order holder.
REISSUANCE OF BILLS OF LADING
Charterers have the option to reissue a new set of bills of lading in replacement of the initial set under the condition that full initial set is collected back by Charterers agents and that a scanned copy of 3/3 original bills of lading marked null and void is sent to Owners by fax or by email. Immediately upon receipt of the said documents, Owners to agree to and authorize Charterers’ agents to issue and sign the new set of original bills of lading. Charterers shall then send to Owners the full initial set of original bills of lading.
The new set to reflect quantity, description of cargo and port of origin, mirror image.
SEA WAYBILL
Charterers have an option to issue nonnegotiable Sea Waybills in lieu of Bills of Lading in which case owners to instruct Master to release cargo to the consignee named on the seaway bill.
Charterers hereby indemnify Owners/Master against any consequences arising therefrom.
BIMCO ELECTRONIC BILLS OF LADING CLAUSE
(a)
At the Charterers’ option, bills of lading, waybills and delivery orders referred to in this Charter Party shall be issued, signed and transmitted in electronic form with the same effect as their paper equivalent.
(b)
For the purpose of Sub-clause (a) the Owners shall subscribe to and use Electronic (Paperless) Trading Systems as directed by the Charterers, provided such systems are approved by the International Group of P&I Clubs. Any fees incurred in subscribing to or for using such systems shall be for the Charterers’ account.
(c)
The Charterers agree to hold the Owners harmless in respect of any additional liability arising from the use of the systems referred to in Sub-clause (b), to the extent that such liability does not arise from Owners’ negligence.
CLAUSE 52 - CERTIFICATES
The Owners warrant that throughout the currency of this Charter Party, the Vessel shall to be in possession of any necessary valid certificates enabling the Vessel to perform the Charter Party and to

ADDITIONAL CLAUSES TO MV “CHAMPIONSHIP” / CARGILL INTERNATIONAL S.A., CHARTER PARTY DT., 05 TH NOVEMBER, 2018
comply with all applicable requirements, regulations and recommendations, including but not limited to:
-
Tonnage and measurement certificates
-
Classification and Trading certificates.
-
Certificates issued pursuant to Section 311 (P) of the U.S. Federal Water Pollution Control Act, as amended (title 33 U.S. Code, Section 1321 (P)
-
Certificates of Financial Responsibility to trade to U.S. waters or to the waters of any other country relevant under this Charter Party
-
ISM certificates
-
Brazilian Authorities’ DPC approval to be in order Charterers are to facilitate the issuance of the DPC Certificate / Inspection.
-
All relevant certificates pertaining to the Crew.
Any time lost or other consequence of any failure to comply with this warranty shall be for Owners’ account.
CLAUSE 53 - SUEZ CERTIFICATES
Throughout the period of the Charter, Vessel will have on board current valid Suez Canal Certificates, and will so comply with all applicable requirements, regulations and recommendations as to avoid any delay in transit of canal, failing which time and expenses to be for Owners’ account including but not limited to any tug assistance to the Vessel.
CLAUSE 54 - VACCINATION CERTIFICATES
Owners shall be responsible for and arrange at their own expense that the Master, Officers and crew of the Vessel to be vaccinated and to be in possession of necessary valid vaccination certificates on delivery of the Vessel and throughout the period of this Charter Party. Any time lost and or additional expenses incurred due to failure to provide such certificates shall be for Owners’ account.
CLAUSE 55 - QUARANTINE
Normal quarantine time and expenses to enter port are to be for Charterers’ account. Any extra time or detention and expenses for quarantine due to pestilence and illness of the Vessel’s Master, Officers and crew are to be for Owners’ account, but if quarantine detention is on account of the Vessel having been sent by Charterers to any infected port, such detention time and expenses are to be for Charterers’ account.
CLAUSE 56 - FUMIGATION
Owners are to supply valid deratization certificate on Vessel’s delivery and if same does not cover whole period of this Charter Party, cost of fumigation (in case fumigation is needed) shall be for Owners’ account and time so required is not to count unless fumigation is required on account of cargo carried or ports visited while Vessel is employed under this Charter Party in which case, cost and time are to be for Charterers’ account.
CLAUSE 57 - COMPLIANCE WITH U.S .  SAFETY AND HEALTH REGULATIONS
If the Vessel calls at any U.S. port for the purpose of loading or discharging cargo, the Vessel’s equipment shall comply with regulations established under U.S. Public Law 85 - 742 Part 9 (Safety and Health Regulations for Long shoring) or any subsequent amendments. If longshoremen are not permitted to work due to the failure of master and or Owners to comply with the aforementioned regulations, any delays to the Vessel resulting shall be for Owners’ account.
CLAUSE 58 - COMPLIANCE WITH INTERNATIONAL CONVENTIONS
58.1
- In the event of the Vessel being prevented from performing, or being unable to perform the service immediately required hereunder, by reason of:

ADDITIONAL CLAUSES TO MV “CHAMPIONSHIP” / CARGILL INTERNATIONAL S.A., CHARTER PARTY DT., 05 TH NOVEMBER, 2018


A.   -   Action on the part of relevant authorities resulting from non - compliance with any compulsory applicable enactment enforcing all or part of any of the following international conventions:

-
International Conventions for the Safety of Life at Sea, either SOLAS 1960, or SOLAS 1974, or SOLAS 1974 in conjunction with its 1978 Protocol.

-
International Load Lines Convention 1969.

-
International Convention for the Prevention of Pollution from Ships 1973, in conjunction with its 1978 protocol.

-
ILO Merchant Shipping (minimum standards) Convention 1976 (nr. 147).

-
International Convention on Standards of Training, Certification and Watch Keeping for Seafarers 1978.


B.   -   Labor stoppages or shortage, boycott, secondary boycott, manifestation of any kind in services essential to the operation of the Vessel owing to its flag or registry or Ownership or management or to the conditions of employment on board.

Provided always that the event (A) and/or (B) is not directed against the Charterers or brought about any act, instruction or omission on the part of the Charterers, then any loss of time shall result in the Vessel being off-hire and shall be dealt with in accordance with the off-hire Clause.
58.2
- It is understood that, if necessary, Vessel will comply with any safety regulations and/or requirements in effect at ports of loading and/or discharging. A particular reference is the United States Department of Labor Safety and Health Regulations set forth in part III of the Federal Register.
58.3
- Although other provisions of this Charter make it the responsibility of the Owners, it is agreed that should the Vessel not meet safety rules and regulations Owners will take immediate corrective measures and any stevedore standby time and other expenses involved, including off-hire, will be for Owners’ account
CLAUSE 59 - SMUGGLING
Any delay, expenses and/or time incurred on account of smuggling are to be for Charterers’ account if caused by Charterers and/or persons appointed by Charterers and are to be for Owners’ account, if caused by Owners, Officers and/or crew and/or persons appointed by Owners.
CLAUSE 60 - CUBA CALLS
Owners warrant that the Vessel is in full compliance with U.S.A. regulations pertaining to port calls to/from Cuba, specifically in compliance with the “U.S. Cuban Democracy Act” and can trade without restraint into U.S. ports.
CLAUSE 61 - PRATIQUE
Vessel shall prepare radio pratique, when instructed by Charterers and be in possession of necessary certificates including but not limited to Japanese Sanitary Certificates. Charterers’ Agent(s) will assist, as trading pattern allows and properly direct Master regarding the Port Authority’s requirements well in advance, prior to Vessel’s arrival at subject port, however, should any time and or expenses incurred, same to be for Owners’ account.
CLAUSE 62 - PLAN / DRAFT SURVEY
Owners warrant that the Vessel will throughout the duration of the Charter-Party have on board all required documentation including but not limited to a capacity plan, hydrostatic curves and tables of displacement, tank calibration and trimming correction tables. All sounding pipes to be well maintained and free from impediments and Vessel to have ballast tanks either empty or pressed full and trim to be deducted to minimum and not to exceed trim table corrections. If Vessel does not

ADDITIONAL CLAUSES TO MV “CHAMPIONSHIP” / CARGILL INTERNATIONAL S.A., CHARTER PARTY DT., 05 TH NOVEMBER, 2018

comply with above requirements she will be put off-hire until she is able to perform such survey. Master to keep written record of drainage moisture pumped out. If required, Master to forward to Charterers upon arrival at unloading port and before start of discharging a certificate indicating all ballast remains.
CLAUSE 63 - SUSPENSION IN CASE OF WAR
In the event of war or warlike operations involving two or more of the following nations: the United States of America, Japan, Australia, Russia, UK, Germany, France, Italy, Spain and People’s Republic of China and/or the nation under the flag which Vessel is performing under this Charter is registered, which seriously affects Charterers’ or Owners’ ability to perform their obligations under this Charter Party, both Charterers and Owners shall have the right to suspend this Charter Party with three (3) weeks written notice without liability to the other party. If the Charter Party is suspended, such suspension shall take place at port of destination after discharge of any cargo on board, subject to the provisions of attached Conwartime 2004 Clause.
CLAUSE 64 - OFF HIRE / TERMINATION OF THE CHARTER
The Charterers shall have the option of cancelling this Charter Party in the event the Vessel is off-hire for reasons attributed to the Owners for a period in excess of 30 consecutive days in any period of 12 months.
CLAUSE 65 - OFF-HIRE BUNKER CONSUMPTION
Bunkers consumed during any period during which the Vessel is off - hire for whatever cause, shall be calculated at the latest bunkering price actually paid by the Charterers.
CLAUSE 66 - EQUIPMENT
Owners warrant and guarantee that throughout this CP, Vessel’s equipment and certificates shall comply with all regulations and/or requirements in effect at ports of call, canals and countries within the permitted trading range under this CP. Without prejudice to any rights to claim damages, Charterers may suspend hire for time lost and any extra expenses including but not limited to stevedores’ standby time to be for Owners’ account.
CLAUSE 67 - HATCHES
Crew is to open and close hatches before, during and after stevedore work when and where required and when permitted by shore regulations.
CLAUSE 68 - FRESH WATER
Fresh water consumed under this Charter for the purpose of drinking and use on board by the Officers and crew (excluding water used for hold cleaning) is to be for Owners’ account.
CLAUSE 69 - SUBLET
Charterers may sublet Vessel, but shall always remain responsible to Owners for due fulfilment of this Charter Party.
CLAUSE 70 - US SECURITY/WATCHMEN
US SECURITY / WATCHMEN
If the vessel calls in the United States, including any US territory, the following provisions shall apply with respect to any applicable security regulations or measures:
Notwithstanding anything else contained in this Charter Party all costs or expenses arising out of or related to security regulations or measures required by any US authority including, but not limited to, security guards, launch services, tug escorts, port security fees or taxes and inspections, shall be for the Charterers’ account, unless such costs or expenses result solely from the Owners’ negligence, or due to crew nationality / visa, or due to the vessel’s flag, in which case costs to be for Owners’ account.

ADDITIONAL CLAUSES TO MV “CHAMPIONSHIP” / CARGILL INTERNATIONAL S.A., CHARTER PARTY DT., 05 TH NOVEMBER, 2018

CLAUSE 71 - HEALTH AND SAFETY
Owner shall have on board the Vessel an effective occupational health and safety policy with the objective that due care and attention is given by crew members to safe working practices in all operations pertaining to the Vessel. Owner shall have a policy regarding drug and alcohol abuse onboard the Vessel with the objective that no crew member will navigate the Vessel or operate its onboard equipment whilst impaired by drugs or alcohol. The policy will also have the objective of strictly prohibiting the possession, use, transport and distribution of illicit or nonprescribed drugs by crew members. Owner shall exercise due diligence throughout the currency of this Contract to ensure that such policies are complied with in full.
CLAUSE 72 - ADDITIONAL EXPENSES / CVE
Charterers are to pay a lumpsum of U.S.$. 1,500.00- per 30 days or pro rata to cover entertainment expenses and radio telegrams / telephone charges for Charterers’ account disbursed by Owners.
CLAUSE 73 - BIMCO HULL FOULING CLAUSE FOR TIME CHARTER PARTIES ( AMENDED)
(a)
If, in accordance with the Charterers’ orders, the Vessel remains at or shifts within a place, customary anchorage and/or berth for an aggregated period exceeding:


(i)
20 days in a Tropical Zone or Seasonal Tropical Zone*; or


(ii)
25 days outside such Zones*

any warranties concerning speed and consumption shall be suspended pending inspection of the Vessel’s underwater parts including, but not limited to, the hull, sea chests, rudder and propeller.

*If no such periods are agreed the default periods shall be 15 days.

(b)
In accordance with Sub-clause (a), either party may call for inspection which shall be arranged jointly by the Owners and the Charterers and undertaken at the Charterers’ risk, cost, expense and time.

(c)
If, as a result of the inspection either party calls for cleaning of any of the underwater parts, such cleaning shall be undertaken by the Charterers at their risk, cost, expense and time in consultation with the Owners.


(i)
Cleaning shall always be under the supervision of the Master and, in respect of the underwater hull coating, in accordance with the paint manufacturers’ recommended guidelines on cleaning, if any. Such cleaning shall be carried out without damage to the Vessel’s underwater parts or coating. If during Charterers’ underwater inspection and/or cleaning operations the vessel’s antifouling coating is observed to be detaching, the cleaning shall be immediately suspended and resumed only upon Charterers’ receipt of the Owners’ written hold-harmless confirmation. If the required confirmation is rejected or not received within reasonable time, charters shall be considered to have fulfilled their obligation under the clause. In any such event, the vessel’s speed and consumption warranty shall be reinstated.

(ii)
If, at the port or place of inspection, cleaning as required under this Sub-clause (c) is not permitted or possible “or there is no availability of suitable facilities and equipment” or if the Charterers choose to postpone cleaning, speed and consumption warranties shall remain suspended until such cleaning has been completed.

(iii)
If, despite the availability of suitable facilities and equipment, the Owners nevertheless refuse to permit cleaning, the speed and consumption warranties shall be reinstated from the time of such refusal.

ADDITIONAL CLAUSES TO MV “CHAMPIONSHIP” / CARGILL INTERNATIONAL S.A., CHARTER PARTY DT., 05 TH NOVEMBER, 2018


(iv)
Owners recommend one propeller polishing to be performed once every 6 or 7 months depending on the Vessel’s schedule at a convenient place/port, at Owners’ expense, provided that no time will be lost otherwise, it will be in Owners’ time.
(d)
Cleaning in accordance with this Clause shall always be carried out prior to redelivery. If, nevertheless, the Charterers are prevented from carrying out such cleaning, the parties shall, prior to but latest on redelivery, agree a lump sum payment in full and final settlement of the Owners’ costs and expenses arising as a result of or in connection with the need for cleaning pursuant to this Clause.

(e)
If the time limits set out in Sub-clause (a) have been exceeded but the Charterers thereafter demonstrate that the Vessel’s performance remains within the limits of this Charter Party the vessel’s speed and consumption warranties will be subsequently reinstated and the Charterers’ obligations in respect of inspection and/or cleaning shall no longer be applicable.
CLAUSE 74 - BIMCO Ship to Ship Transfer Clause for Time Charter Parties
(a)
The Charterers shall have the right to order the Vessel to conduct ship to ship cargo operations, including the use of floating cranes and barges. All such ship to ship transfers shall be at the Charterers’ risk, cost, expense and time.
(b)
The Charterers shall direct the Vessel to a safe area for the conduct of such ship to ship operations where the Vessel can safely proceed to, lie and depart from, always afloat, but always subject to the Master’s approval. The Charterers shall provide adequate fendering, securing and mooring equipment, and hoses and/or other equipment, as necessary for these operations, to the satisfaction of the Master.
(c)
The Charterers shall obtain any and all relevant permissions from proper authorities to perform ship to ship operations and such operations shall be carried out in conformity with best industry practice.
(d)
If, at any time, the Master considers that the operations are, or may become, unsafe, he may order them to be suspended or discontinued. In either event the Master shall have the right to order the other Vessel away from the Vessel or to remove the Vessel.
(e)
If the Owners are required to extend their existing insurance policies to cover ship to ship operations or incur any other additional cost/expense, the Charterers shall reimburse the Owners for any additional premium or cost/expense incurred.
(f)
The Charterers shall indemnify the Owners against any and all consequences arising out of the ship to ship operations including but not limited to damage to the Vessel and other costs and expenses incurred as a result of such damage, including any loss of hire; damage to or claims arising from other alongside Vessels, equipment, floating cranes or barges; loss of or damage to cargo; and pollution.
CLAUSE 75 - GMT TIME
All times are understood to be in GMT except for laydays / cancelling which to be local time.
CLAUSE 76 - CHANGE OF FLAG / OWNERSHIP / SALE DELETE
Owners shall have the right to change the Vessel’s flag, subject to Charterers’ prior consent which is not to be unreasonably withheld.  Such change(s) are not, in any way, to hinder, prevent or detract from Charterers’ rights and ability to use the Vessel according to present Charter Party terms.
Owners have the option of selling this Vessel at any time during the course of this Charter Party subject to Charterers approval of the buyers which not to be unreasonably withheld and Owners will

ADDITIONAL CLAUSES TO MV “CHAMPIONSHIP” / CARGILL INTERNATIONAL S.A., CHARTER PARTY DT., 05 TH NOVEMBER, 2018

give Charterers at least 45 days prior notice of expected time and place which will not interfere Charterers’ normal operation of the ship.  All time lost and all directly related expenses including additional bunker consumed in related to such sale to be for Owners’ account. The buyers undertake to perform the balance of this Charter Party at the same terms and conditions which to be stated in the sale contract. Should the Owners elect to sell the Vessel, the Charterers are to be given ROFR on the Vessel. For the purpose of clarity, ROFR refers to the right that the Charterers hold in case the Owners are selling the Vessel. No third party can be given priority before the Charterers have declared within two working days whether they want to match the price possibly achievable from third party buyer.
CLAUSE 77 - RECONCILIATION OF ACCOUNTS
Owners shall, every 6 months, provide a copy of their complete statement of accounts (S.O.A.) along with all supporting documentation (not previously provided to Charterers) covering the period from delivery until the latest 15 days hire payment date, in order to allow an interim reconciliation of the accounts.
Upon redelivery, within maximum 14 days, Owners shall provide their complete S.O.A. along with all supporting documentation covering the full charter period from the delivery date until redelivery date, including bunkers on delivery and redelivery (or bunkers actually remaining on board in case of direct continuation). Undisputed amounts (if any) shall be paid within 7 days after sharing the S.O.A.ʼs.
CLAUSE 78 - LAW AND ARBITRATION
This Charterparty is governed by English Law. GA/Arbitration in London. Also ref Clause 91.
CLAUSE 79 - PROTECTIVE CLAUSES
The New Both - to - Blame Collision Clause, New Jason Clause, Conwartime 2004, whichever applicable, are deemed to be incorporated in all Bills of Lading issued under this Charter Party and all sub-Charter Parties. Conwartime 2004 War Clause, as attached, P. & I. Bunker Clause, Deviation Clause, Drug and Alcohol Policy, Assignment Clause, are deemed to be incorporated in this Charter-Party and to apply.
NEW JASON CLAUSE
In the event of accident, danger, damage or disaster before or after commencement of the voyage, resulting from any cause whatsoever, whether due to negligence or not, for which, or for the consequences of which, the carrier is not responsible, by statute, contract or otherwise, the goods, shippers, consignees, or Owners of the goods shall contribute with the carrier in general average to the payment of any sacrifices, losses, or expenses of a general average nature that may be made or incurred and shall pay salvage and special charges incurred in respect of the goods.
If a salving ship is owned or operated by the carrier, salvage shall be paid for as fully as if such salving ship or ships belonged to strangers. Such deposit as the carrier or his agents may deem sufficient to cover the estimated contribution of the goods and any salvage and special charges thereon shall, if required, be made by the goods, shippers, consignees or Owners of the goods to the carrier before delivery.
NEW BOTH TO BLAME COLLISION CLAUSE
If the liability for any collision in which the Vessel is involved while performing this Bill of Lading fails to be determined in accordance with the laws of the United States of America, the following Clause shall apply: If the ship comes into collision with another ship as a result of the negligence of the other ship and any act, neglect or default of the Master, mariner, pilot or the servants of the carrier in the navigation or in the management of the ship, the Owners of the goods carried hereunder will indemnify the carrier against all loss or liability to the other or non-carrying ship or her Owners insofar as such loss or liability represents loss of, or damage to, or any claim whatsoever of the Owners of the said goods, paid or payable by the other or non-carrying ship or her Owners to the

ADDITIONAL CLAUSES TO MV “CHAMPIONSHIP” / CARGILL INTERNATIONAL S.A., CHARTER PARTY DT., 05 TH NOVEMBER, 2018
Owners of the said goods and set off, recouped or recovered by the other or non-carrying ship or carrier or her Owners as part of their claim against the carrying ship or carrier.
The foregoing provision shall also apply where the Owners, Operators or those in charge of any ship or ships or objects other than, or in addition to, the colliding ships or objects are at fault in respect to a collision or contact.
DEVIATION CLAUSE
The Vessel has liberty to call at any port or ports in any order, for any purpose, to sail without pilots, to tow and/or assist Vessels in all situations, and also to deviate for the purpose of saving life and/or property.
Eventual costs and benefits to be equally shared by Charterers and Owners.

DRUG AND ALCOHOL POLICY
Owners warrant that there is a policy on Drug and Alcohol Abuse (Policy) applicable to the Vessel which meets or exceeds that standard in the International Marine Forum Guidelines for the control of Drugs and Alcohol on board the Ship. Under the Policy, alcohol impairment shall be defined as a blood alcohol content of 40mg/100ml or greater; the appropriate seafarers to be tested shall be the full Vessel’s complement and the drug/alcohol testing and screening shall include unannounced testing in addition to route medical examinations. An objective of the Policy should be that the frequency of the unannounced testing be adequate to act as an effective abuse deterrent, and that all officers be tested at least once a year through a combined program of unannounced testing and routine medical examinations.
Owners further warrant that the Policy will remain in effect during the term of this Charter and that Owners shall exercise due diligence to ensure that the Policy is complied with. It is understood that an actual impairment of any test finding of impairment shall not in and of itself mean the Owners have failed to exercise due diligence.
CLAUSE 80 - MOBILE CRANE CLAUSE
Charterers are permitted to place mobile cranes on deck provided the weight of such cranes (including the weight of the fully loaded grab) does not exceed the Vessel’s maximum permissible deck strength and subject to class approval. Charterers shall arrange and pay for deck bearers and/or protection plates to be fitted under cranes, if required and same to be removed upon completion of discharge in Charterers’ time and their risk and expense. Should any cutting and/or welding and/or reinforcement be necessary to accommodate placement of such cranes, all expenses and time for such work to be for Charterers’ account.
Charterers to remain fully responsible for any/all direct damages, time, expenses and costs (including, but not limited to, burnt areas of paints on decks and underneath) resulting from such operations. Such damages to be restored by Charterers to their original state prior redelivery. Charterers to be fully responsible for any rain damage to cargo directly attributable to hatches remaining open and prevented from being closed.
Such cutting/welding always to be carried out subject to Vessel’s Classification Society’s approval.
CLAUSE 81 - BIMCO BUNKER QUALITY CONTROL FOR TIME CHARTERING  ( AMENDED STANDARD BY CARGILL)
(1)
The Charterers shall supply bunkers of a quality suitable for burning in the Vessel’s engines and auxiliaries and which conform to the specification(s) mutually agreed under this Charter, and which comply to Marpol Annex VI.
(2)
At the time of delivery of the Vessel the Owners shall place at the disposal of the Charterers, the bunker delivery note(s) and any samples relating to the fuels existing on board. The Owners shall

ADDITIONAL CLAUSES TO MV “CHAMPIONSHIP” / CARGILL INTERNATIONAL S.A., CHARTER PARTY DT., 05 TH NOVEMBER, 2018
place at the disposal of the Charterers, the bunker delivery notes from the last 36 (thirty six) months to evidence that the vessel is compliant with NAECA zone rules.
(3)
During the currency of the Charter the Charterers shall ensure that bunker delivery notes are presented to the Vessel on the delivery of fuel(s) and that during bunkering representative samples of the fuel(s) supplied shall be taken at the Vessel’s bunkering manifold wherever possible and sealed in the presence of competent representatives of the Charterers and the Vessel.
(4)
The fuel samples shall be retained by the Vessel for 1 year (one year) after the date of delivery or for whatever period necessary in the case of a prior dispute and any dispute as to whether the bunker fuels conform to the agreed specification(s) shall be settled by analysis of the sample(s) by (FOBAS) or by another mutually agreed fuels analyst whose findings shall be conclusive evidence as to conformity or otherwise with the bunker fuels specification(s). Bunker delivery note to be kept onboard for 3 years as per Marpol Annex VI.
(5)
The Owners reserve their right to make a claim against the Charterers for any damage to the main engines or the auxiliaries caused by the use of unsuitable fuels or fuels not complying with the agreed specification(s). Additionally, if bunker fuels supplied do not conform with the mutually agreed specification(s) or otherwise prove unsuitable for burning in the ship’s engines or auxiliaries the Owners shall not be held responsible for any reduction in the Vessel’s speed performance and/or increased bunker consumption nor for any time lost and any other consequences.
CLAUSE 82 - BUNKER FUEL SULPHUR CONTENT CLAUSE FOR TIME CHARTER PARTIES 2005
(a)
Without prejudice to anything else contained in this Charter Party, the Charterers shall supply fuels of such specifications and grades to permit the Vessel, at all times, to comply with the maximum sulphur content requirements of any emission control zone when the Vessel is ordered to trade within that zone.
The Charterers also warrant that any bunker suppliers, bunker craft operators and bunker surveyors used by the Charterers to supply such fuels shall comply with Regulations 14 and 18 of MARPOL Annex VI, including the Guidelines in respect of sampling and the provision of bunker delivery notes.
The Charterers shall indemnify, defend and hold harmless the Owners in respect of any loss, liability, delay, fines, costs or expenses arising or resulting from the Charterers’ failure to comply with this Sub-clause (a).
(b)
Provided always that the Charterers have fulfilled their obligations in respect of the supply of fuels in accordance with Sub-clause (a), the Owners warrant that:

(i)
the Vessel shall comply with Regulations 14 and 18 of MARPOL Annex VI and with the requirements of any emission control zone; and

(ii)
the Vessel shall be able to consume fuels of the required sulphur content when ordered by the Charterers to trade within any such zone.
Subject to having supplied the Vessel with fuels in accordance with Sub-clause (a), the Charterers shall not otherwise be liable for any loss, delay, fines, costs or expenses arising or resulting from the Vessel’s failure to comply with Regulations 14 and 18 of MARPOL Annex VI.

ADDITIONAL CLAUSES TO MV “CHAMPIONSHIP” / CARGILL INTERNATIONAL S.A., CHARTER PARTY DT., 05 TH NOVEMBER, 2018

(c)
For the purpose of this Clause, “emission control zone” shall mean zones as stipulated in MARPOL Annex VI and/or zones regulated by regional and/or national authorities such as, but not limited to, the EU and the US Environmental Protection Agency.
CLAUSE 83 - SEAWORTHY TRIM CLAUSE
Charterers shall leave the Vessel in seaworthy trim and with cargo on board safely stowed to Master’s satisfaction between loading berths/ports and between discharging berths/ports, respectively; any expenses and time resulting therefrom shall be for Charterers’ account.
CLAUSE 84 - LIQUEFYING OF BULK CARGOES
Unless the cargo is elsewhere excluded in this Charter Party, the vessel may load any lawful, properly certified, safe, cargo in compliance with applicable regulations of the International Maritime Solid Bulk Cargoes Code (IMSBC Code) or any subsequent revisions thereof and applicable local regulations in effect at the time of loading.
At Owner’s/Master’s request, Charterers/Shippers to identify the cargo to be loaded and jointly with Owners (or their agents) take representative samples. Such sample(s) to be tested/analysed in a mutually acceptable, competent laboratory before the ship is called to berth to determine whether the cargo is safe to load. For cargoes that may be subject to liquefaction, this will include testing/analysis of the Flow Moisture Point, the Transportable Moisture Limit and the actual Moisture Content. The results of such testing/analysis to be binding on all parties.
At Owner’s/Master’s request, Charterers and/or Shippers shall provide to the Master before loading, complete and valid certification for all cargo intended for loading, as per the foregoing. The certificate(s) will remain valid for such period as defined by the IMSBC code or applicable local regulations, whichever is the shorter. The vessel shall have the right to refuse to commence loading if such certification is not provided or the validity of which has expired, before loading and time will continue to count (or the vessel shall remain on hire, as applicable). Any time lost or cost incurred as a result of Shippers’/Charterers’ failure to comply with this clause will be for Charterers’ account.
CLAUSE 85 - BIMCO ISPS/MTSA Clause
(a)   (i)   The Owners shall comply with the requirements of the International Code for the Security of Ships and of Port Facilities and the relevant amendments to Chapter XI of SOLAS (ISPS Code) relating to the Vessel and “the Company” (as defined by the ISPS Code). If trading to or from the United States or passing through United States waters, the Owners shall also comply with the requirements of the US Maritime Transportation Security Act 2002 (MTSA) relating to the Vessel and the “Owner” (as defined by the MTSA).

(ii)
Upon request the Owners shall provide the Charterers with a copy of the relevant International Ship Security Certificate (or the Interim International Ship Security Certificate) and the full style contact details of the Company Security Officer (CSO).

(iii)
Loss, damages, expense or delay (excluding consequential loss, damages, expense or delay) caused by failure on the part of the Owners or “the Company”/”Owner” to comply with the requirements of the ISPS Code/MTSA or this Clause shall be for the Owners’ account, except as otherwise provided in this Charter Party.
(b)   (i)   The Charterers shall provide the Owners and the Master with their full style contact details and, upon request, any other information the Owners require to comply with the ISPS Code/MTSA. Where subletting is permitted under the terms of this Charter Party, the Charterers shall ensure that the contact details of all sub-charterers are likewise provided to the Owners and the Master. Furthermore, the Charterers shall ensure that all sub-charter parties they enter into during the period of this Charter Party contain the following provision:

ADDITIONAL CLAUSES TO MV “CHAMPIONSHIP” / CARGILL INTERNATIONAL S.A., CHARTER PARTY DT., 05 TH NOVEMBER, 2018

 “The Charterers shall provide the Owners with their full style contact details and, where subletting is permitted under the terms of the charter party, shall ensure that the contact details of all sub-charterers are likewise provided to the Owners”.

(ii)
Loss, damages, expense or delay (excluding consequential loss, damages, expense or delay) caused by failure on the part of the Charterers to comply with this Clause shall be for the Charterers’ account, except as otherwise provided in this Charter Party.
(c)
Notwithstanding anything else contained in this Charter Party all delay, costs or expenses whatsoever arising out of or related to security regulations or measures required by the port facility or any relevant authority in accordance with the ISPS Code/MTSA including, but not limited to, security guards, launch services, vessel escorts, security fees or taxes and inspections, shall be for the Charterers’ account, unless such costs or expenses result solely from the negligence of the Owners, Master or crew. All measures required by the Owners to comply with the Ship Security Plan shall be for the Owners’ account.
(d)
If either party makes any payment which is for the other party’s account according to this Clause, the other party shall indemnify the paying party.
CLAUSE 86 - U.S. TRADE - UNIQUE BILL OF LADING IDENTIFIER CLAUSE
The Charterers warrant that each transport document accompanying a shipment of cargo destined to a port or place in the United States of America shall have been endorsed with a Unique Bill of Lading Identifier as required by the U.S. Custom s Regulations (19 CFR Part 4 Section 4.7.a) including subsequent changes, amendments or modifications thereto, not later than the first port of call.
Non-compliance with the provisions of this Clause shall amount to breach of warranty for the consequences of which the Charterers shall be liable and shall hold the Owners harmless and shall keep them indemnified against all claims whatsoever which may arise and be made against them.
Furthermore, all time lost and all expenses incurred including fines as a result of the Charterers’ breach of the provisions of this Clause shall be for the Charterers’ account.
CLAUSE 87 - U.S. CUSTOMS ADVANCE NOTIFICATION / AMS CLAUSE FOR TIME CHARTER PARTIES
(a)
If the Vessel loads or carries cargo destined for the U.S. or passing through U.S. ports in transit, the Charterers shall comply with the current U.S. Customs Regulations (19 CFR 4.7) or any subsequent amendments thereto and shall undertake the role of carrier for the purposes of such regulations and shall, in their own name, time and expense:

i)
Have in place a SCAC (Standard Carrier Alpha Code);

ii)
Have in place an ICB (International Carrier Bond);

iii)
Provide the Owners with a timely confirmation of i) and ii) above; and

iv)
Submit a cargo declaration by AMS (Automated Manifest System) to the U.S. Customs and provide the Owners at the same time with a copy thereof.
(b)
The Charterers assume liability for and shall indemnify, defend and hold harmless the Owners against the direct losses and/or damages (excluding consequential loss and/or damage) arising from the Charterers’ failure to comply with any of the provisions of sub - clause (a). Should such failure result in any delay then, notwithstanding any provision in this Charter - Party to the contrary, the Vessel shall remain on hire.
(c)
If the Charterers’ ICB is used to meet any penalties, duties, taxes or other charges which are solely the responsibility of the Owners, the Owners shall promptly reimburse the Charterers for those amounts.

ADDITIONAL CLAUSES TO MV “CHAMPIONSHIP” / CARGILL INTERNATIONAL S.A., CHARTER PARTY DT., 05 TH NOVEMBER, 2018
(d)
The assumption of the role of carrier by the Charterers pursuant to this Clause and for the purpose of the U.S. Customs Regulations (19 CFR 4.7) shall be without prejudice to the identity of carrier under any Bill of Lading, other contract, law or regulation.
CLAUSE 88 - CONFIDENTIALITY
All negotiations and fixture to be kept strictly private and confidential save as otherwise may be required by the laws of regulations applicable to Seanergy Maritime Holdings Corp. or to the Owners, including but not limited to any stock exchange and/or Securities and Exchange Commission laws and regulations.
CLAUSE 89 - OIL POLLUTION
Owners are required to establish and maintain financial security for responsibility in respect of oil or other pollution damage as required by any government including federal state or municipal or other division or authority thereof, to enable the vessel, without penalty or charge, lawfully to enter, remain at or leave any port, place territorial or contiguous waters of any country, state or municipality in performance of this Charter without any delay. This obligation shall apply whether or not such requirements have been lawfully imposed by such government or division or authority thereof. Owners shall make and maintain all arrangements by bond or otherwise as may be necessary to satisfy such requirements at the Owners’ expense and Owners shall indemnify Charterers against all consequences (including loss of time) and all expenses and costs of any failure or inability to comply with the requirements of this clause.
Charterers not to be responsible for any claim brought against the vessel, her Owners, previous owners, her cargo or bunkers for any pollution claim. Owners warrant that they are covered for pollution liability insurance up to USD 1000 million by a P&I Club member of the International Group of P&I Clubs.
CLAUSE 90
Notwithstanding any provision to the contrary in this Charter Party and irrespective of whether bills of lading have been issued, Charterers shall have liberty at any time to order the Vessel to sail to and/or anchor at any safe place or places of their choosing and to wait there pending further voyage instructions.
CLAUSE 91 - BIMCO STANDARD DISPUTE RESOLUTION CLAUSE
(a)
This Contract shall be governed by and construed in accordance with English law and any dispute arising out of or in connection with this Contract shall be referred to arbitration in London in accordance with the Arbitration Act 1996 or any statutory modification or reenactment thereof save to the extent necessary to give effect to the provisions of this Clause.
The arbitration shall be conducted in accordance with the London Maritime Arbitrators Association (LMAA) Terms current at the time when the arbitration proceedings are commenced.
The reference shall be to three arbitrators. A party wishing to refer a dispute to arbitration shall appoint its arbitrator and send notice of such appointment in writing to the other party requiring the other party to appoint its own arbitrator within 14 calendar days of that notice and stating that it will appoint its arbitrator as sole arbitrator unless the other party appoints its own arbitrator and gives notice that it has done so within the 14 days specified. If the other party does not appoint its own arbitrator and give notice that it has done so within the 14 days specified, the party referring a dispute to arbitration may, without the requirement of any further prior notice to the other party, appoint its arbitrator as sole arbitrator and shall advise the other party accordingly. The award of a sole arbitrator shall be binding on both parties as if he had been appointed by agreement.

ADDITIONAL CLAUSES TO MV “CHAMPIONSHIP” / CARGILL INTERNATIONAL S.A., CHARTER PARTY DT., 05 TH NOVEMBER, 2018

Nothing herein shall prevent the parties agreeing in writing to vary these provisions to provide for the appointment of a sole arbitrator.
In cases where neither the claim nor any counterclaim exceeds the sum of USD 100,000 (or such other sum as the parties may agree) the arbitration shall be conducted in accordance with the LMAA Small Claims Procedure current at the time when the arbitration proceedings are commenced.
(b)
Notwithstanding the above, the parties may agree at any time to refer to mediation any difference and/or dispute arising out of or in connection with this Contract.
In the case of a dispute in respect of which arbitration has been commenced under the above, the following shall apply:

(i)
Either party may at any time and from time to time elect to refer the dispute or part of the dispute to mediation by service on the other party of a written notice (the “Mediation Notice”) calling on the other party to agree to mediation.

(ii)
The other party shall thereupon within 14 calendar days of receipt of the Mediation Notice confirm that they agree to mediation, in which case the parties shall thereafter agree a mediator within a further 14 calendar days, failing which on the application of either party a mediator will be appointed promptly by the Arbitration Tribunal (“the Tribunal”) or such person as the Tribunal may designate for that purpose. The mediation shall be conducted in such place and in accordance with such procedure and on such terms as the parties may agree or, in the event of disagreement, as may be set by the mediator.

(iii)
If the other party does not agree to mediate, that fact may be brought to the attention of the Tribunal and may be taken into account by the Tribunal when allocating the costs of the arbitration as between the parties.

(iv)
The mediation shall not affect the right of either party to seek such relief or take such steps as it considers necessary to protect its interest.

(v)
Either party may advise the Tribunal that they have agreed to mediation. The arbitration procedure shall continue during the conduct of the mediation but the Tribunal may take the mediation timetable into account when setting the timetable for steps in the arbitration.

(vi)
Unless otherwise agreed or specified in the mediation terms, each party shall bear its own costs incurred in the mediation and the parties shall share equally the mediator’s costs and expenses.

(vii)
The mediation process shall be without prejudice and confidential and no information or documents disclosed during it shall be revealed to the Tribunal except to the extent that they are disclosable under the law and procedure governing the arbitration.
(Note: The parties should be aware that the mediation process may not necessarily interrupt time limits.)
CLAUSE 92
In case of discrepancies between Printed form and Rider Clauses, the Rider Clauses will prevail.

ADDITIONAL CLAUSES TO MV “CHAMPIONSHIP” / CARGILL INTERNATIONAL S.A., CHARTER PARTY DT., 05 TH NOVEMBER, 2018
CLAUSE 93 - DRY-DOCKING
The Owners shall have the option to place the Vessel in dry-dock during the currency of this charter at a convenient time and place to be mutually agreed upon by the Owners and Charterers for bottom cleaning and painting and/or repairs as required by Class or dictated by circumstances.
However, the Owners shall notify the Charterers of the intention of such dry-dock and/or periodical survey with 90 days prior notice, except in an emergency.
Vessel is to be placed off-hire upon deviation from Charterers service, until such a time when the Vessel is in the same or equivalent position with respect to the Vessel’s next employment.
CLAUSE 94 - WAR RISK CLAUSE FOR TIME CHARTERS, 2004
CODE NAME: “CONWARTIME 2004”
WAR RISK CLAUSE FOR TIME CHARTERS, 2004 CODE NAME: “CONWARTIME 2004”
(a)
For the purpose of this Clause, the words:

(i)
“Owners” shall include the shipowners, bareboat charterers, disponent owners, managers or other operators who are charged with the management of the Vessel, and the Master; and

(ii)
“War Risks” shall include any actual, threatened or reported:
war; act of war; civil war; hostilities; revolution; rebellion; civil commotion; warlike operations; laying of mines; acts of piracy; acts of terrorists; acts of hostility or malicious damage; blockades (whether imposed against all Vessels or imposed selectively against Vessels of certain flags or ownership, or against certain cargoes or crews or otherwise howsoever); by any person, body, terrorist or political group, or the Government of any state whatsoever, which, in the reasonable judgment of the Master and/or the Owners, may be dangerous or are likely to be or to become dangerous to the Vessel, her cargo, crew or other persons on board the Vessel.
(b)
The Vessel, unless the written consent of the Owners be first obtained, shall not be ordered to or required to continue to or through, any port, place, area or zone (whether of land or sea), or any waterway or canal, where it appears that the Vessel, her cargo, crew or other persons on board the Vessel, in the reasonable judgment of the Master and/or the Owners, may be, or are likely to be, exposed to War Risks. Should the Vessel be within any such place as aforesaid, which only becomes dangerous, or is likely to be or to become dangerous, after her entry into it, she shall be at liberty to leave it.
(c)
The Vessel shall not be required to load contraband cargo, or to pass through any blockade, whether such blockade be imposed on all Vessels, or is imposed selectively in any way whatsoever against Vessels of certain flags or ownership, or against certain cargoes or crews or otherwise howsoever, or to proceed to an area where she shall be subject, or is likely to be subject to a belligerent’s right of search and/or confiscation.
(d) (i)
The Owners may effect war risks insurance in respect of the Hull and Machinery of the Vessel and their other interests (including, but not limited to, loss of earnings and detention, the crew and their protection and Indemnity Risks), and the premiums and/or calls therefore shall be for their account.

(ii)
If the Underwriters of such insurance should require payment of premiums and/or calls because, pursuant to the Charterers’ orders, the Vessel is within, or is due to enter and remain within, or pass through any area or areas which are specified by such Underwriters as being subject to additional premiums because of War Risks, then the actual premiums and/or calls

ADDITIONAL CLAUSES TO MV “CHAMPIONSHIP” / CARGILL INTERNATIONAL S.A., CHARTER PARTY DT., 05 TH NOVEMBER, 2018

paid shall be reimbursed by the Charterers to the Owners at the same time as the next payment of hire is due, or upon redelivery, whichever occurs first.
(e)
If the Owners become liable under the terms of employment to pay to the crew any bonus or additional wages in respect of sailing into an area which is dangerous in the manner defined by the said terms, then the actual bonus or additional wages paid shall be reimbursed to the Owners by the Charterers at the same time as the next payment of hire is due, or upon redelivery, whichever occurs first.
(f)
The Vessel shall have liberty:

(i)
to comply with all orders, directions, recommendations or advice as to departure, arrival, routes, sailing in convoy, ports of call, stoppages, destinations, discharge of cargo, delivery, or in any other way whatsoever, which are given by the Government of the Nation under whose flag the Vessel sails, or other Government to whose laws the Owners are subject, or any other Government, body or group whatsoever acting with the power to compel compliance with their orders or directions;

(ii)
to comply with the order, directions or recommendations of any war risks underwriters who have the authority to give the same under the terms of the war risks insurance;

(iii)
to comply with the terms of any resolution of the Security Council of the United Nations, the effective orders of any other Supranational body which has the right to issue and give the same, and with national laws aimed at enforcing the same to which the Owners are subject, and to obey the orders and directions of those who are charged with their enforcement;

(iv)
to discharge at any other port any cargo or part thereof which may render the Vessel liable to confiscation as a contraband carrier;

(v)
to call at any other port to change the crew or any part thereof or other persons on board the Vessel when there is reason to believe that they may be subject to internment, imprisonment or other sanctions.
(g)
If in accordance with their rights under the foregoing provisions of this Clause, the Owners shall refuse to proceed to the loading or discharging ports, or any one or more of them, they shall immediately inform the Charterers. No cargo shall be discharged at any alternative port without first giving the Charterers notice of the Owners’ intention to do so and requesting them to nominate a safe port for such discharge. Failing such nomination by the Charterers within 48 hours of the receipt of such notice and request, the Owners may discharge the cargo at any safe port of their own choice.
(h)
If in compliance with any of the provisions of sub-clauses (b) to (g) of this Clause anything is done or not done, such shall not be deemed a deviation, but shall be considered as due fulfillment of this Charter Party.
CLAUSE 95 - GULF OF ADEN / INDIAN OCEAN HIGH RISK AREA TRANSIT
Notwithstanding any other provisions in this charter party, it is hereby agreed that Owners will permit the vessel to transit the High Risk Area (HRA) of the Indian Ocean / Arabian Sea / Gulf of Aden / Gulf of Oman / Southern Red Sea (as defined by the Joint War Committee of Lloyds Market Association from time to time) subject to the following terms and conditions:

ADDITIONAL CLAUSES TO MV “CHAMPIONSHIP” / CARGILL INTERNATIONAL S.A., CHARTER PARTY DT., 05 TH NOVEMBER, 2018
1.   Security Guards.

a.
Owners will employ an armed security team comprising 3 (three) members on board the vessel at their risk and at Charterers’ expense (subject to 1(g) below).

b.
Owners will contract with an SSP (Security Services Provider) selected by Owners from one of the SSPs on Charterers’ approved short list, provided total cost is competitive compared to the other 3 companies listed. Such short list shall be provided by Charterers to Owners from time to time for Owners’ approval and shall have a minimum of three (3) SSP which shall be considered by Owners and approved – such approval not to be unreasonably withheld for each SSP. Charterers list as of August 2015 is as follows: (i) Ambrey Risk: servicedelivery@ambreyrisk.com (ii) Secure a Ship: commercial.sales@secureaship.com (iii) Diaplous: contact@diaplous-ms.com (iv) Sea Guardian: info@sguardian.com which Charterers confirm are all approved by Charterers’ insurers for both LOH and K&R Insurances as mentioned below. Charterers shall review such selection of preferred SSPs from time to time and shall advise Owners accordingly. Charterers confirm that any additions to the SSPs on the short list will be approved by leading underwriters of both LOH and K&R Insurances and will be members of the Security Association for the Maritime Industry (SAMI).

c.
The basis of the contractual arrangement between Owners and the SSP will be the Bimco “Guardcon” contract subject to such amendments as are agreed between Owners and the SSP. Owners will provide Charterers with a copy of the contract with the SSP upon request.

d.
The on board security team will be embarked and disembarked at the closest convenient locations to the entry and exit point of the HRA as provided by the chosen SSP.

e.
The vessel will take a reasonably direct route through the HRA from the embarkation point of the security team to the disembarkation point but will always proceed via the IRTC (Internationally Recognized Transit Corridor) when proceeding via Suez and/or transiting the Gulf of Aden. By “reasonably direct route”, it is understood that this will normally be the shortest practical route between the two points but always subject to the master’s discretion to deviate in the case of an actual or threatened security alert or advice from the military authorities in the region concerned to avoid any particular area(s).

f.
The contracted SSP will also liaise with Owners/Master to determine an inventory of hardening materials (including full razor wire protection) not already on board, reasonably required for the vessel’s forthcoming transit in accordance with BMP4 (Best Management Practices v.4 and any subsequent amendments) to be supplied to the vessel prior to or at the latest at the same time as the embarkation of the security team. Such materials to be paid for by Owners and to be installed by the crew under the direction of and verified by the security team. Provision of hardening materials, if applicable will be reimbursed by Charterers to Owners promptly on presentation of usual supporting documentation.

g.
Costs of the SSP will be paid directly by Charterers to the SSP.
2.     Insurance.

a.
Charterers have contracted for LOH (Loss of Hire) Insurance (including blocking and trapping) for a period not less than 360 days at their expense which Policy includes Owners as a co-insured beneficiary (and/or vessel Managers) for such transit. The vessel will remain on-hire in the event of capture by pirates for a maximum of 360 days. Underwriters for Charterers’ LOH Policy have agreed to waive rights of subrogation against Owners’

ADDITIONAL CLAUSES TO MV “CHAMPIONSHIP” / CARGILL INTERNATIONAL S.A., CHARTER PARTY DT., 05 TH NOVEMBER, 2018

insurance policies including but not limited to Hull and Machinery insurances, Disbursements insurances, Loss of Hire insurances and War Risks insurances for all interests.

b.
Charterers have contracted for K&R (Kidnap & Ransom) Insurance for an aggregate amount of not less than US$ 15,000,000 (fifteen million US Dollars, any one event) with first class underwriters which Policy includes Owners (and/or the vessel Managers) as a co-insured beneficiary for such transit, with primacy in the case. Underwriters for Charterers’ K&R Policy have agreed to waive rights of subrogation against Owners’ insurance policies including but not limited to Hull and Machinery insurances, Disbursements insurances, Loss of Hire insurances and War Risks insurances for all interests. In the event of an incident leading to capture of the vessel, Owners agree to use Charterers’ underwriters’ nominated response consultants and to notify same immediately using the following contact details: insofar as Charterers’ K&R and Loss of Hire policies are concerned Eos Risk Management For Non-Emergency Maritime Counter- Piracy Advice contact +44(0) 1782 283 323 or response@eosrisk.com for assistance. Should an insured event occur please contact: +44(0) 1782 207 433. This shall not restrict Owners from contacting the insurers or brokers directly in the event of an insured peril.

c.
Owners will contract for additional war risk premium (AWRP) on vessel’s total value for each transit of the HRA and advise the expected gross and nett cost to Charterers. This cover will be subject to the nett premium payable being at or below a level considered reasonable by Charterers (and in line with the current London Insurance Market at the time of transit) and above which level Charterers will have the right to provide their own cover if required. Such premium if contracted by Owners, to be reimbursed by Charterers on presentation of usual supporting documentation evidencing premiums paid. Charterers to have the benefit of any discounts or no-claims bonus enjoyed by Owners. If the AWRP is contracted by Charterers, such cover will be placed with first class underwriters and will include Owners as a co-insured beneficiary under the Policy for such transit.
3.     Insurance Warranties

a.
When armed guards on board:-
The assured must register the vessel with MSCHOA (Maritime Security Centre, Horn of Africa) [http:www.mschoa.eu] and UKMTO prior to entering the HRA and ensure that all recommendations are fully complied with.

b.
When no armed guards on-board:-

(i)
Vessels Speed: A minimum speed of 9 knots or normal service speed if greater as conditions will allow, if weather conditions require the vessel to reduce speed, the 9 knot warranty will not be applicable. If the vessel is subject to a casualty within the excluded area which results in vessel’s inability to maintain minimum of 9 knots, coverage hereon maintained. In the event of any suspicious approaches within the guidelines of Best Management Practice 4 then a minimum 12 knots speed must be adhered to.

(ii)
Minimum freeboard whilst fully laden 4.0 metres for all vessels other than Cape size vessels. Minimum freeboard whilst fully laden 6.0 metres for Capesize vessels.

(iii)
Razor wire must be fitted to the entire vessel bulwark in respect of breach area.

(iv)
Vessel to be fitted with a citadel.

ADDITIONAL CLAUSES TO MV “CHAMPIONSHIP” / CARGILL INTERNATIONAL S.A., CHARTER PARTY DT., 05 TH NOVEMBER, 2018


(v)
The assured must register the vessel with MSCHOA (Maritime Security Centre, Horn of Africa) [http:www.mschoa.eu] and UKMTO prior to entering the HRA and ensure that all recommendations are fully complied with.
4.
Annual Review
This clause and any Insured amounts herein may be reviewed annually prior July 9th and adapted as required after mutual agreement between Owners and Charterers.
Also refer to clause 106.
CLAUSE 96 - BIMCO BULK CARRIER SAFETY CLAUSE
(a)
The Charterers shall instruct the Terminal Operators or their representatives to cooperate with the Master in completing the IMO SHIP/SHORE SAFETY CHECKLIST and shall arrange all cargo operations strictly in accordance with the guidelines set out therein.
(b)
In addition to the above and notwithstanding any provision in this Charter Party in respect of loading/ discharging rates, the Charterers shall instruct the Terminal Operators to load/discharge the Vessel in accordance with the loading/discharging plan, which shall be approved by the Master with due regard to the Vessel’s draught, trim, stability, stress or any other factor which may affect the safety of the Vessel.
(c)
At any time during cargo operations the Master may, if he deems it necessary for reasons of safety of the Vessel, instruct the Terminal Operators or their representatives to slow down or stop the loading or discharging.
(d)
Compliance with the provisions of this Clause shall not affect the counting of laytime.
CLAUSE 97 - INTERCLUB AGREEMENT - CARGO CLAIMS
Cargo claims as between the Owners and the Charterers shall be settled in accordance with the New York Produce Exchange Inter-Club agreement 1996 (as amended September 2011).
CLAUSE 98 - OWNERS BANK DETAILS AND FULL STYLE
OWNERS BANK DETAILS AND FULL STYLE:
Bank
:
Alpha Bank A.E.

 
Piraeus Shipping Branch 960
Address
:
93, Akti Miaouli,
   
185 38 Piraeus Greece
   
210 - 4290208 Shipping Branch
   
210 - 4290116 Shipping Division
Fax
:
210 - 4290348 / 210 4290677
SWIFT Address
:
CRBAGRAAXXX

Customer’s Details:
Champion Marine Co.,
of the Marshall Islands
c/o Seanergy Management Corp.
154 Vouliagmenis Avenue, 16674 Glyfada, Greece
USD Earnings Account
:
960- 01- 5006030970
IBAN
:
GR39 0140 9600 9600 1500 6030 970
USD Correspondent
:
Citibank NA, New York
   
399 Park Avenue

ADDITIONAL CLAUSES TO MV “CHAMPIONSHIP” / CARGILL INTERNATIONAL S.A., CHARTER PARTY DT., 05 TH NOVEMBER, 2018
   
New York N.Y. 10022 U.S.A.
SWIFT Address
:
CITIUS33XXX
     

CLAUSE 99 - SANCTIONS / ELIGIBILITY
SANCTIONS/ELIGIBILITY
Owner represents and warrants that Owner and its vessel are not in any way directly or indirectly owned, controlled by or related to any: (1) Cuban or Iranian interests; or (2) designated target of economic trade sanctions promulgated by the U.N., U.S., E.U., or Switzerland, (“Sanction Laws”). Owner undertakes that Owner and its agents and representatives will fully comply with all applicable Sanction Laws in their performance hereunder. If the goods are to be loaded or unloaded in the United States, then Owner represents and warrants that (i) the vessel has not called at a port in North Korea within 180 days of the vessel’s estimated arrival at a U.S. port, (ii) the vessel has not engaged in any ship-to-ship transfer with a vessel that has called at a port in North Korea within 180 days of the vessel’s estimated arrival at a U.S. port, and (iii) in the event the vessel has called at a Cuban port within 180 days of the vessel’s estimated arrival at a U.S. port, all such calls were fully permissible under U.S. laws imposing sanctions on Cuba, and the vessel is not restricted in its ability to call at a U.S. port under these U.S. laws. Owner undertakes that Owner, its agents and representative will not cause Charterer to violate applicable Sanction Laws, in their performance hereunder. Owner agrees to cooperate with Charterer’s reasonable requests for information or documentation to verify compliance with this clause.
Charterer represents and warrants that neither it nor any person or entity that owns or controls it is a designated target of economic trade sanctions promulgated by the U.N., U.S., E.U., or Switzerland (“Sanction Laws”). Charterer undertakes that Charterer and its agents and representatives will fully comply with all applicable Sanction Laws in their performance hereunder. Charterer undertakes that Charterer, its agents and representatives will not cause Owner to violate applicable Sanction Laws, in their performance hereunder. Charterer agrees to cooperate with Owner’s reasonable requests for information or documentation to verify compliance with this clause.”
CLAUSE 100
Should the Vessel be requisitioned by the government of the Vessel’s flag during the period of the Charter, the Vessel shall be deemed to be off-hire during the period of such requisition, and any hire paid by the said government in respect of such requisition period shall be retained by the Owners. However, the Charterers shall have the option to cancel this Charter.
CLAUSE 101
The Charterers and/or their Supercargo(es) and/or their Representative(s) shall have free and unlimited access to the whole Vessel including but not limited to bridge, holds, engine room, all Vessels tanks including bunker, lubricating oil, sludge, ballast, water, freshwater tanks during the charter period. Whenever required the Master must bring the Vessel to an even trim to ensure correct bunker soundings. The Charterers and/or their Supercargo(es) and/or their Representative(s) to have free and unlimited access to the Vessels deck and engine log books, radio logs, tank plans, calibration scales and/or other plans as requested and are allowed to make copies of same.
CLAUSE 102
1.
The Owners warrant and undertake that throughout the currency of this Charter-Party:

1.1.
The Vessel shall not be named on the list of Special Designated Nationals and Blocked persons (the “SDN List”) as published and amended from time to time by the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”); and

1.2.
The Vessel’s registered owner shall not be named on the SDN List; and

ADDITIONAL CLAUSES TO MV “CHAMPIONSHIP” / CARGILL INTERNATIONAL S.A., CHARTER PARTY DT., 05 TH NOVEMBER, 2018


1.3
The Vessel shall not be owned, operated or controlled by any person or entity named on the SDN List; and

1.4
The Vessel shall not be flagged or registered by a country that is subject to the U.S. sanctions laws administered by OFAC from time to time (the “U.S. Sanctions”) and acceptance of the Vessel by Charterers shall not constitute a violation of US Sanctions; and

1.5
The Vessel shall not be owned by a person or entity that is registered, constituted or organized in, or that is a citizen or resident of or located in, a country that is subject to the US Sanctions and acceptance or trading of the Vessel by Charterers would constitute a violation of US Sanctions; and

1.6
Acceptance and trading of the Vessel by the Charterers throughout the Charter-Party duration shall not constitute a violation of any sanctions laws of the United Nations, the United Kingdom, the European Union, the United States of America, by the Charterers as if it were subject to such sanctions laws, all as amended from time to time.
2.
Should at any time during this Charter-Party Owners be in breach of any of the provisions and/ or warranties contained in this Clause, then:

2.1
Owners shall indemnify the Charterers against any losses or damages whatsoever resulting, and

2.2
Charterers shall have the right to immediately cancel the Charter-Party.
Clause 103 - BIMCO STANDARD I.S.M. CLAUSE
From the date of coming into force of the International Safety Management (ISM) code in relation to the Vessel and thereafter during the currency of this Charter Party, the Owners shall procure that the Vessel and “the Company” (as defined by the ISM code) shall comply with the requirements of the ISM code. Upon request the Owners shall provide a copy of relevant Document of Compliance (DOC) and Safety Management Certificate (SMC) to the Charterers.
Except as otherwise provided in this Charter Party, loss, damage, expense or delay caused by failure on the part of “the Company” to comply with the ISM Code shall be for the Owners’ account.
Clause 104 - BIMCO Piracy Clause for Time Charter Parties 2013
(a)
The Vessel shall not be obliged to proceed or required to continue to or through, any port, place, area or zone, or any waterway or canal (hereinafter “Area”) which, in the reasonable judgement of the Master and/or the Owners, is dangerous to the Vessel, cargo, crew or other persons on board the Vessel due to any actual, threatened or reported acts of piracy and/or violent robbery and/or capture/seizure (hereinafter “Piracy”), whether such risk existed at the time of entering into this Charter Party or occurred thereafter. Should the Vessel be within any such place as aforesaid which only becomes dangerous, or may become dangerous, after entry into it, the Vessel shall be at liberty to leave it.
(b)
If in accordance with sub-clause (a) the Owners decide that the Vessel shall not proceed or continue to or through the Area they must immediately inform the Charterers. The Charterers shall be obliged to issue alternative voyage orders and shall indemnify the Owners for any claims from holders of the Bills of Lading or third parties caused by waiting for such orders and/or the performance of an alternative voyage. Any time lost as a result of complying with such orders shall not be considered off-hire.
(c)
If the Owners consent or if the Vessel proceeds to or through an Area exposed to the risk of Piracy the Owners shall have the liberty:

ADDITIONAL CLAUSES TO MV “CHAMPIONSHIP” / CARGILL INTERNATIONAL S.A., CHARTER PARTY DT., 05 TH NOVEMBER, 2018

(i)
to take reasonable preventative measures to protect the Vessel, crew and cargo including but not limited to re-routeing within the Area, proceeding in convoy, using escorts, avoiding day or night navigation, adjusting speed or course, or engaging security personnel and/or deploying equipment on or about the Vessel (including embarkation/disembarkation).

(ii)
to comply with the requirements of the Owners’ insurers under the terms of the Vessel’s insurance(s);

(iii)
to comply with all orders, directions, recommendations or advice given by the Government of the Nation under whose flag the Vessel sails, or other Government to whose laws the Owners are subject, or any other Government, body or group (including military authorities) whatsoever acting with the power to compel compliance with their orders or directions; and

(iv)
to comply with the terms of any resolution of the Security Council of the United Nations, the effective orders of any other Supranational body which has the right to issue and give the same, and with national laws aimed at enforcing the same to which the Owners are subject, and to obey the orders and directions of those who are charged with their enforcement;

and the Charterers shall indemnify the Owners for any claims from holders of Bills of Lading or third parties caused by the Vessel proceeding as aforesaid, save to the extent that such claims are covered by additional insurance as provided in sub-clause (d)(iii).
(d)
Costs

(i)
If the Vessel proceeds to or through an Area where due to risk of Piracy additional costs will be incurred including but not limited to additional personnel and preventative measures to avoid Piracy, such reasonable costs shall be for the Charterers’ account. Any time lost waiting for convoys, following recommended routeing, timing, or reducing speed or taking measures to minimise risk, shall be for the Charterers’ account and the Vessel shall remain on hire;

(ii)
If the Owners become liable under the terms of employment to pay to the crew any bonus or additional wages in respect of sailing into an area which is dangerous in the manner defined by the said terms, then the actual bonus or additional wages paid shall be reimbursed to the Owners by the Charterers;

(iii)
If the Vessel proceeds to or through an Area exposed to the risk of Piracy, the Charterers shall reimburse to the Owners any additional premiums required by the Owners’ insurers and the costs of any additional insurances that the Owners reasonably require in connection with Piracy risks which may include but not be limited to War Loss of Hire and/or maritime K&R.

(iv)
All payments arising under Sub-clause (d) shall be settled within fifteen (15) days of receipt of Owners’ supported invoices or on redelivery, whichever occurs first.
(e)
If the Vessel is attacked by pirates any time lost shall be for the account of the Charterers and the Vessel shall remain on hire.
(f)
If the Vessel is seized by pirates the Owners shall keep the Charterers closely informed of the efforts made to have the Vessel released. The Vessel shall remain on hire throughout the seizure and the Charterers’ obligations shall remain unaffected, except that hire payments shall cease as of the ninety-first (91st) day after the seizure until release. The Charterers shall pay hire, or if the Vessel has been redelivered, the equivalent of Charter Party hire, for any time lost in making good any damage and deterioration resulting from the seizure. The Charterers shall not be liable for late redelivery under this Charter Party resulting from the seizure of the Vessel.

ADDITIONAL CLAUSES TO MV “CHAMPIONSHIP” / CARGILL INTERNATIONAL S.A., CHARTER PARTY DT., 05 TH NOVEMBER, 2018
(g)
If in compliance with this Clause anything is done or not done, such shall not be deemed a deviation, but shall be considered as due fulfilment of this Charter Party. In the event of a conflict between the provisions of this Clause and any implied or express provision of the Charter Party, this Clause shall prevail.
Clause 105 - BIMCO Slow Steaming Clause
a)
The Charterers may at their discretion provide, in writing to the Master, instructions to reduce speed or RPM (main engine Revolutions Per Minute) and/or instructions to adjust the Vessel’s speed to meet a specified time of arrival at a particular destination.

(i)
*Slow Steaming - Where the Charterers give instructions to the Master to adjust the speed or RPM, the Master shall, subject always to the Master’s obligations in respect of the safety of the Vessel, crew and cargo and the protection of the marine environment, comply with such written instructions, provided that the engine(s) continue(s) to operate above the cutout point of the Vessel’s engine(s) auxiliary blower(s) and that such instructions will not result in the Vessel’s engine(s) and/or equipment operating outside the manufacturers’/designers’ recommendations as published from time to time.

(ii)
*UltraSlow Steaming Where the Charterers give instructions to the Master to adjust the speed or RPM, regardless of whether this results in the engine(s) operating above or below the cutout point of the Vessel’s engine(s) auxiliary blower(s), the Master shall, subject always to the Master’s obligations in respect of the safety of the Vessel, crew and cargo and the protection of the marine environment, comply with such written instructions, provided that such instructions will not result in the Vessel’s engine(s) and/ or equipment operating outside the manufacturers’/designers’ recommendations as published from time to time. If the manufacturers’/designers’ recommendations issued subsequent to the date of this Charter Party require additional physical modifications to the engine or related equipment or require the purchase of additional spares or equipment, the Master shall not be obliged to comply with these instructions.
* Sub-clauses (a)(i) and (a)(ii) are alternatives; delete whichever is not applicable. In the absence of deletions, alternative (a)(i) shall apply.
(b)
At all speeds the Owners shall exercise due diligence to ensure that the Vessel is operated in a manner which minimises fuel consumption, always taking into account and subject to the following:

(i)
The Owners’ warranties under this Charter Party relating to the Vessel’s speed and consumption;

(ii)
The Charterers’ instructions as to the Vessel’s speed and/or RPM and/or specified time of arrival at a particular destination;

(iii)
The safety of the Vessel, crew and cargo and the protection of the marine environment; and

(iv)
The Owners’ obligations under any bills of lading, waybills or other documents evidencing contracts of carriage issued by them or on their behalf.
(c)
For the purposes of Sub-clause (b), the Owners shall exercise due diligence to minimize fuel consumption:

(i)
when planning voyages, adjusting the Vessel’s trim and operating main engine(s) and auxiliary engine(s);

ADDITIONAL CLAUSES TO MV “CHAMPIONSHIP” / CARGILL INTERNATIONAL S.A., CHARTER PARTY DT., 05 TH NOVEMBER, 2018


(ii)
by making optimal use of the Vessel’s navigation equipment and any additional aids provided by the Charterers, such as weather routing, voyage optimization and performance monitoring systems; and

(iii)
by directing the Master to report any data that the Charterers may reasonably request to further improve the energy efficiency of the Vessel.
(d)
The Owners and the Charterers shall share any findings and best practices that they may have identified on potential improvements to the Vessel’s energy efficiency.
(e)
**For the avoidance of doubt, where the Vessel proceeds at a reduced speed or with reduced RPM pursuant to Sub-clause (a), then provided that the Master has exercised due diligence to comply with such instructions, this shall constitute compliance with, and there shall be no breach of, any obligation requiring the Vessel to proceed with utmost and/or due despatch (or any other such similar/equivalent expression).
(f)
**The Charterers shall ensure that the terms of the bills of lading, waybills or other documents evidencing contracts of carriage issued by or on behalf of the Owners provide that compliance by Owners with this Clause does not constitute a breach of the contract of carriage. The Charterers shall indemnify the Owners against all consequences and liabilities that may arise from bills of lading, waybills or other documents evidencing contracts of carriage being issued as presented to the extent that the terms of such bills of lading, waybills or other documents evidencing contracts of carriage impose or result in breach of the Owners’ obligation to proceed with due despatch or are to be held to be a deviation or the imposition of more onerous liabilities upon the Owners than those assumed by the Owners pursuant to this Clause.
Clause 106 - TRADING/TRANSITING WC INDIA
Notwithstanding the Gulf of Aden/Indian Ocean High Risk Area transit clause (Clause 95), Owners agree to transit and trade the West Coast of India within the 12 NM zone and transit into the Persian Gulf navigating via the piracy zone off the coast of Pakistan and Iran when requested to do so by charterers without employing any (armed/unarmed) guards, without hardening material, without any extra insurance and crew bonus for charterers account. If the Master decides to navigate outside the 12 NM zone against Charts orders and/or when the vessel navigates inside the piracy zone off the coast of Pakistan and Iran then any applicable insurances net of discounts/no claim bonuses are to be for Charterers account but Charterers will not be required to pay for any guards and/or hardening materials and/or crew bonus.
Clause 107 - ASIAN GYPSY MOTH CLAUSE
ASIAN GYPSY MOTH CLAUSE
Owners warrant that vessel has not called at any Russian Far East port and warrant that vessel is free from Asian Gypsy moth on delivery. Should vessel have called at any Japanese port(s) designated as an Asian Gypsy Moth high risk port by either the Japanese Government and/or USDA and/or APHIS and/or PPQ during the high risk period designated by any of those authorities during a period of one year prior to the date of delivery, then Owners shall provide an Asian Gypsy Moth free certificate if required by Charterers. However, should Asian Gypsy Moth infestation be found, fumigation to be arranged by and paid for by Owners and the vessel to be considered as off-hire during such fumigation and until the vessel is passed as free from Asian Gypsy Moth.
In case Charterers order the vessel to any Japanese or other far east port(s) designated as an Asian Gypsy Moth high risk port by either the Japanese Government and/or USDA and/or APHIS and/or PPQ during the high risk period designated by any of those authorities, then Charterers shall at their time and expense, prior to vessel’s redelivery or prior calling at any North American port whichever is the earlier, arrange for an inspection of the vessel by a survey firm approved by any one of such

ADDITIONAL CLAUSES TO MV “CHAMPIONSHIP” / CARGILL INTERNATIONAL S.A., CHARTER PARTY DT., 05 TH NOVEMBER, 2018
authorities and the issue of an Asian Gypsy Moth free certificate. Should infestation be found, fumigation to be arranged by and paid for by the Charterers and the vessel to remain on-hire during such fumigation and until the vessel is passed as free from Asian Gypsy Moth.
Clause 108 - BIMCO PARAMOUNT CLAUSE GENERAL
The International Convention for the Unification of Certain Rules of Law relating to Bills of Lading signed at Brussels on 25 August 1924 (“The Hague Rules”) as amended by the Protocol signed at Brussels on 23 February 1968 (“The Hague-Visby Rules”) and as enacted in the country of shipment shall apply to this contract. When the Hague-Visby Rules are not enacted in the country of shipment, the corresponding legislation of the country of destination shall apply, irrespective of whether such legislation may only regulate outbound shipments.
When there is no enactment of the Hague-Visby Rules in either the country of shipment or in the country of destination, the Hague-Visby Rules shall apply to this contract save where the Hague Rules as enacted in the country of shipment or if no such enactment is in place, the Hague Rules as enacted in the country of destination apply compulsorily to this contract.
The Protocol signed at Brussels on 21 December 1979 (“The SDR Protocol 1979”) shall apply where the Hague-Visby rules apply, whether mandatorily or by this contract.
The carrier shall in no case be responsible for loss of or damage to cargo arising prior to loading, after discharging, or while the cargo is in the charge of another carrier, or with respect to deck cargo and live animals.
Clause 109 - WASHOUT CLAUSE
In the event: (A) that the Owners elect to purchase the Vessel in accordance with section 12(b) of the Sub-Bareboat Charter; (B) of termination of the Sub-Bareboat Charter; (C) that under the Sub-Bareboat Charter the Charterers exercise their rights under section 17 (b) (viii) of the Sub-Bareboat Charter, this Charter shall be terminated immediately without any act by any party to this Charter. In the event of termination of this Charter in accordance with any of (A), (B) or (C), the Owners shall pay to the Charterers on the Termination Date an amount equal to the product of:
i)
Washout Rate 1 and the number of days of Period 1 within the Washout Period and Period 1 Market Hire Rate; and
ii)
Washout Rate 2 and the number of days of Period 2 within the Washout Period and Period 2 Market Hire Rate; and
iii)
Washout Rate 3 and the number of days of Period 3 within the Washout Period and Period 3 Market Hire Rate; and
iv)
Washout Rate 4 and the number of days of Period 4 within the Washout Period and Period 4 Market Hire Rate; and
v)
Washout Rate 5 and the number of days of Period 5 within the Washout Period and Period 5 Market Hire Rate
For the purposes of this Clause 109:
“Washout period” means period commencing on the Termination Date and ending with the date falling sixty (60) months after the date of delivery of the Vessel to the Charterers under this Charter.
“Period 1” means the period twelve (12) months from the date of delivery of the vessel
“Period 2” means the period twelve months (12) from the date of end of Period 1


ADDITIONAL CLAUSES TO MV “CHAMPIONSHIP” / CARGILL INTERNATIONAL S.A., CHARTER PARTY DT., 05 TH NOVEMBER, 2018

“Period 3” means the period twelve months (12) from the date of end of Period 2
“Period 4” means the period twelve months (12) from the date of end of Period 3
“Period 5” means the period twelve months (12) from the date of end of Period 4

“Washout Rate 1” means ten per cent (10%)
“Washout Rate 2” means eight and a half per cent (8.5%)
“Washout Rate 3” means seven per cent (7%)
“Washout Rate 4” means five and a half per cent (5.5%)
“Washout Rate 5” means four per cent (4%)

“Period 1 Market Hire Rate” means the average of the BFA Capesize for the days in Period 1 falling within the Washout Period
“Period 2 Market Hire Rate” means the average of the BFA Capesize for the days in Period 2 falling within the Washout Period
“Period 3 Market Hire Rate” means the average of the BFA Capesize for the days in Period 3 falling within the Washout Period
“Period 4 Market Hire Rate” means the average of the BFA Capesize for the days in Period 4 falling within the Washout Period
“Period 5 Market Hire Rate” means the average of the BFA Capesize for the days in Period 5 falling within the Washout Period
“Multipartite Agreement” means the multipartite agreement (as amended and supplemented from time to time) between, amongst others, the Owners (as sub-bareboat charterer) and the Charterers (as head bareboat charterer and time charterer) dated or to be dated (as the case may be) on or about the date of this Charter.
“Sub-Bareboat Charter ” means the sub-bareboat charter (as amended and supplemented from time to time) in respect of the Vessel between the Owners (as sub-bareboat charterers) and the Charterers (as demise owners) dated or to be dated (as the case may be) on or about the date of this Charter.
“Termination Date” means the date of the termination of this Charter pursuant to this Clause 109.
Clause 110 - SCRUBBER BENEFIT CLAUSE
20% of scrubber profits to be shared by Charterers with Owners, provided MGO-HSFO price spread (basis average Platts Rotterdam/Singapore price) is greater than $300/mt. Other details on scrubber calculations (e.g. change of benchmark fuel from MGO to LSFO/Hybrid following ISO certification) to be discussed in good faith, but from the start of the Charter the following calculation shall apply:
The calculation of the Scrubber Benefit for each Scrubber Benefit Period will be as follows:
The product of the Shared Scrubber Spread and the actual amount of high sulphur fuel oil used by the vessel during a Scrubber Benefit Period
For the purposes of this Clause 110:
“Scrubber Benefit Period” means each three (3) month period during the Charter commencing 1st January 2020, or such date that compliance with Marpol Annex VI is required.
“Rtdm HSFO” means Rotterdam IFO 380 CST – code PUAFN00 (as per Platts Bunkerwire Quotes)

ADDITIONAL CLAUSES TO MV “CHAMPIONSHIP” / CARGILL INTERNATIONAL S.A., CHARTER PARTY DT., 05 TH NOVEMBER, 2018
“Rtdm MGO” means Rotterdam Marine Gasoil – code AARTG00 (as per Platts Bunkerwire Quotes)
“Sing HSFO” means Singapore IFO 380 CST – code PUAFT00 (as per Platts Bunkerwire Quotes)
“Sing MGO” means Singapore Marine Gasoil – code AAXYO00 (as per Platts Bunkerwire Quotes)
“Rtdm Scrubber Spread” means average of Rtdm MGO less Rtdm HSFO during the relevant Scrubber Benefit Period
“Sing Scrubber Spread” means average of Sing MGO less Sing HSFO during the relevant Scrubber Benefit Period
“Total Scrubber Spread” means average of the Rtdm Scrubber Spread and the Sing Scrubber Spread
“Shared Scrubber Spread” means Total Scrubber Spread less $300/mt multiplied by twenty per cent (20%), providing this is greater than zero
Clause 111 - SCRUBBER CLAUSE
(a)
As used in this clause, “Scrubber” refers to an exhaust gases cleaning device that will be installed at the exhaust gases manifold of the M/E and the DGs on a vessel that reduces the vessel’s sulphur emissions by capturing them before they are released into the atmosphere.
(b)
Owners warrant that:

1.
No later than 31st December 2019 and continuing for the remainder of the CP, Scrubbers that are compliant with this Clause will be installed, maintained in fully working condition, and, unless ordered otherwise by Charterers, used on the vessel. Owners’ duty of maintenance is absolute.

2.
The Scrubbers will be Open loop type exhaust gas cleaning system manufactured by Hyundai Materials, U-type

3.
The Scrubbers will ensure that the vessel’s emissions from all sources (including without limitation main engine, electricity generator engines, and boiler) do not exceed the following thresholds:

i.
Maximum 0.5% sulphur emissions, when burning up to 3.5% sulphur fuel and steaming at charterparty speed [up to about 14 knots laden; up to about 14 knots ballast]

ii.
Maximum 0.1% sulphur emissions, when burning up to 3.5% sulphur fuel and slow steaming [up to about 13 knots laden; up to about 13 knots ballast]

iii.
Maximum 0.1% sulphur emissions, when burning up to 3.5% sulphur fuel and using electricity generator engines in port; Unless local regulations forbids the usage of scrubber

4.
The Scrubbers will be compliant at all times with all applicable laws and regulations; Owners will undertake that the scrubber manufacturer will warrant that the Exhaust Gas Cleaning System on delivery complies with MARPOL, annex VI Reg. 4, as detailed in the IMO Annex resolution MEPC 259 (68) of 15 May 2015 (“2015 Guidelines for Exhaust Gas Cleaning Systems”), item 5.3.1, scheme B, and Council Directive 1999/32/EC of 26 April 1999 as regards the sulphur content of marine fuels (as amended by Directive 2012/33/EU of the European Parliament and of the Council of 21 November 2012), Art. 4d (1) and their amendments thereafter; The Builder also warrants that the scrubber complies with the

ADDITIONAL CLAUSES TO MV “CHAMPIONSHIP” / CARGILL INTERNATIONAL S.A., CHARTER PARTY DT., 05 TH NOVEMBER, 2018

requirements of 2.2.26 Exhaust Gas Scrubber Washwater Discharge of VGP 2013 and their amendments thereafter;

5.
When the Scrubbers are operating, the vessel will comply, and Owners will (upon request) demonstrate compliance with, MARPOL Annex VI or applicable regional, national, or local authorities; and
(c)
Owners shall comply with Charterers’ orders regarding the use of the Scrubbers in any of the modes described in paragraphs (b)(3) and will comply with Charterers’ reasonable orders to use the Scrubbers in other modes. The Scrubbers shall be deactivated when burning fuel that is already compliant with applicable sulphur limits.
(d)
Charterers shall pay a premium of over the normal hire rate (the “Initial Premium”). The Initial Premium will be: $             /day payable for the period commencing from the delivery of the vessel to the Charterers under this Charter and ending twelve (12) months after the delivery of the vessel to the Charterers under this Charter at which point the Initial Premium will be replaced by the Fixed Premium as define under (e) below.
(e)
Charterers shall pay a premium of over the normal hire rate for any 24 hour period during which the Scrubbers are in a state capable of continuously operating in compliance with paragraph (b), whether or not Charterers actually employ them (the “Fixed Premium”). The Fixed Premium will be: $             /day payable for the period commencing twelve (12) months after the delivery of the vessel to the Charterers under this Charter and ending with the termination of the Sub-Bareboat Charter. And then $          /day for the first twelve (12) months of the Optional Period should Charterers declare the Optional Period.
(f)
Owners will install and operate a scrubber performance monitoring system that will transmit data to Charterers’ offices allowing monitoring on a continuous basis and data transmission at a minimum every 24 hours. Owners are currently using LAROS performance monitoring system for MV Championship (http://www.laros.gr/) and are liaising with HHI and Laros for the integration of the scrubber performance in this system ensuring that same is transmitted ashore on a real time basis.
(g)
Owners shall indemnify Charterers for losses, costs and consequences resulting from Owners’ breach of this Clause.
Clause 112 - BUNKERS AND 2020 GLOBAL SULPHUR CAP CLAUSE
a.
Implementation Date: For purposes of this clause, “Implementation Date” means the date established by the IMO for the entry into force of the 0.50% m/m global sulphur cap as described in MARPOL Annex VI (expected 1st January 2020).
b.
Bunker Quality:

1.
Charterer shall:

(i)
Prior to the Implementation Date, provide bunkers that comply with ISO standard 8217:2010, or 8217:2005 specs when 8217:2010 specs are not available; and

(ii)
After the Implementation Date, unless the vessel is fitted with fully operable scrubbers, in which case bunkers with maximum 3.5% sulphur content shall be supplied, provide bunkers (including, at their option, Marine Gasoil Oil):

ADDITIONAL CLAUSES TO MV “CHAMPIONSHIP” / CARGILL INTERNATIONAL S.A., CHARTER PARTY DT., 05 TH NOVEMBER, 2018


1.
with a sulphur content of no more than 0.50% sulphur bunkers (“Low Sulphur Bunkers”) or 0.1% sulphur in case of ECA/NECA or as deemed necessary by future regulations; and

2.
that comply with any ISO standard

(iii)
homogeneous blends Bunkers of different grades, specifications and/or suppliers shall be segregated into separate tanks within the Vessel’s natural segregation. The Owners shall not be held liable for any restriction in bunker capacity as a result of segregating bunkers as aforementioned. Commingling can be allowed subject to:

1.
compatibility of underlying fuels

2.
consultation with and approval by the Owner

3.
grades to be mixable and

4.
Owners not to be held responsible for any additional consumption due to additional production/accumulation of sludge other than the agreed 1.2% of vessel’s daily consumption due to commingling of bunkers on board

2.
Owners warrant that, subject to Charterers’ compliance with sub-paragraphs (b)(1):

(i)
the bunker tanks will be fully at Charterers’ disposal;

(ii)
the vessel will comply with all applicable regulations related to emissions, including MARPOL Annex VI;

(iii)
the vessel will be able to receive, store, treat, consume and segregate (tanks’ availability/capacity permitting segregation) the fuels provided by the Charterers;

(iv)
Owners will comply with any specific lawful orders from Charterers with respect to the consumption of bunkers on board;

(v)
Owners to keep Charterers fully and timely informed of information relevant to bunker management, including without limitation the quantity of bunkers in each tank and tank cleaning schedules, and to provide Charterers access to relevant documentation, including without limitation the oil record book, any available bunker delivery notes, and any available analysis results for bunkers on board (whether stemmed by Charterers or not);

(vi)
Unless otherwise ordered by Charterers, Owners to ensure segregation of bunkers in storage tanks and, to the extent possible, avoid commingling in all bunker tanks, including settling and service tanks.
c.
Bunkers on Delivery

1.
Charterers on delivery shall take over and pay Owners for the quantity of bunkers on board on delivery at the Platts Singapore prices for each grade prevailing at the day of delivery.

(i)
IFO.... (max sulphur 3.5%)

(ii)
ULSFO... (max 0.1% sulphur)

ADDITIONAL CLAUSES TO MV “CHAMPIONSHIP” / CARGILL INTERNATIONAL S.A., CHARTER PARTY DT., 05 TH NOVEMBER, 2018


(iii)   MGO   (max 0.1% sulphur)

(iv)
LSFO ... (max 0.5% sulphur)
d.
Bunkers on Redelivery

1.
Owners shall take over and pay Charterers for the bunkers remaining on board on redelivery at Platts Singapore prices for each grade prevailing at the day of redelivery.

2.
If no Platts price is available for the grade in question, the price shall be established by Charterers’ last bunkering invoice for the grade in question.

3.
Charterers’ payment under this clause may be deducted from the last sufficient hire payments.

4.
The Vessel shall be redelivered with the about same quantity of each of the grades described in paragraph (c)(1) as were on the vessel on delivery, save that the quantity of IFO on delivery shall be replaced by the same quantity of LSFO, ULSFO, and/or MGO on redelivery. In any event, the grades and quantities of bunkers on redelivery shall always be appropriate and sufficient to allow the Vessel to reach safely the nearest port at which fuels of the required types are available.
e.
Non-Pumpable Residue and Tank Cleaning

1.
No later than six months before the Implementation Date, Owners and Charterers shall begin consultations to agree actions and timeline for transitioning to Low Sulphur Bunkers by the Implementation Date; and

2.
Prior to Charterers’ stemming Low Sulphur Bunkers, Owners shall clean the relevant tank(s) and piping system, including removing all remnants of non-compliant fuel and non-pumpable residue, at their own cost, risk, and time.
f.
Non-Compliant Fuel and Non-Pumpable Residues Remaining on Board

1.
Should the IMO or another applicable regional, national, or local authority implement a prohibition on carrying non-compliant bunkers and/or non-pumpable residue in bunker tanks:

(i)
No later than six months prior to the date of implementation of such non-carry prohibition, the parties shall begin consultations to agree the actions and timeline for ensuring compliance.

(ii)
Charterers shall, by the applicable deadline, remove any non-compliant bunkers at their own cost, risk and time, unless Charterers would have been able to burn such bunkers but for Owners’ breach or negligence, in which case the relevant unburned bunkers shall be removed by Owners at their own cost, risk and time.

(iii)
Owners shall, by the applicable deadline, clean the relevant tank(s) and piping system, including removing all remnants of non-compliant fuel and non-pumpable residue, at their own cost, risk, and time
**********

APPENDIX D

Excluded Items

1.
Oxygen, acetylene and nitrogen cylinders
2.
Med Ox
3.
Portable gas detectors
4.
High speed internet and telecommunication system (FX and FBB equipment)
5.
Laros vessel’s performance monitoring system including trim monitoring equipment and mass flowmeters
6.
Vessel’s client-server computing

Page 40
APPENDIX E

Scrubber Supply Contract



Page 41




SALE AND PURCHASE AGREEMENT
FOR
ONE EXHAUST GAS CLEANING SYSTEM
BETWEEN
CHAMPION MARINE CO.
AND
HYUNDAI MATERIALS CORPORATION

1

THIS AGREEMENT, made this 28 day of September 2018, by and between CHAMPION MARINE CO., a corporation organized and existing under the laws of Marshall Islands, having its registered address at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro MH96960, Marshall Islands] (hereinafter called the “BUYER”), the party of the first part, and HYUNDAI MATERIALS CORPORATION, a corporation organized and existing under the laws of Korea, having its principal office at 9F Shin-An Bldg., 512, Teheran-ro, Gangnam-gu, Seoul 06179, Korea (hereinafter called the “BUILDER,” the party of the second part (the BUILDER and the BUYER hereinafter collectively referred to as the “Parties” or individually as a “Party”).
WITNESSETH

A.
The BUILDER intends to design, build, equip, complete and deliver one (1) exhaust gas cleaning system to Yiu Lian Zhoushan Shipyard (the “YARD”) for the BUYER and to sell the exhaust gas cleaning system to the BUYER under this Agreement.

B.
The BUYER intends to purchase and take delivery of such exhaust gas cleaning system from the BUILDER.
2

ARTICLE I — SCOPE OF THE AGREEMENT AND AGREEMENT DOCUMENTS
1.   Scope of the Agreement:
In accordance with this Agreement, the BUILDER shall sell and undertake to deliver and the BUYER shall buy and accept:
Delivery and commissioning of exhaust gas cleaning system for the one (1) Vessel (as defined below) being built by the Yard, as specified in Appendix No. 1, to this Agreement (referred to as the “VESSEL EQUIPMENT”).
“Vessel” shall mean the MV Championship, IMO no. 9403516
The BUILDER may, at its sole discretion and responsibility, appoint suitable and technically reliable subcontractors and subcontract any portion of the construction work of the VESSEL EQUIPMENT.
2.   Agreement Documents
The sale and delivery of the VESSEL EQUIPMENT shall be performed by the BUILDER and accepted by the BUYER in accordance with this Agreement and with the following Appendices, which shall be construed as and form an integral and inseparable part of this Agreement and which are incorporated hereto as:
- Appendix No. 1 Description and Technical Specification of the VESSEL EQUIPMENT
- Appendix No. 2 Scope of Work by the BUILDER
The priority of the Appendices is valid in the order listed above. In case of any discrepancy or inconsistency between the terms of this Agreement and those specified in any of the Appendices thereto, the text of this Agreement shall take precedence over the Appendices.
3

ARTICLE II — PURCHASE PRICE AND TERMS OF PAYMENT
1.   Purchase Price:
The purchase price of the VESSEL EQUIPMENT is US$ 1,449,000 (the “Vessel Equipment Purchase Price”). The purchase price excludes any taxes, duties, stamps, VAT and fees applicable to the purchase of the VESSEL EQUIPMENT.
The Builder shall bear and pay all taxes duties, stamps, VAT and fees incurred in Korea in connection with execution and/or performance of this Agreement in its capacity as Builder.
The Buyer shall bear and pay all taxes, duties, stamps and fees incurred outside Korea in connection with execution and/or performance of this Agreement in its capacity as Buyer, except for taxes, duties, stamps and fees imposed upon those items to be procured by the Builder for construction of the VESSEL EQUIPMENT.
2.   Currency:
Any and all payments by the BUYER to the BUILDER under this Agreement shall be made in United States Dollars.
3.   Terms of Payment for the Vessel Equipment:
The Vessel Equipment Purchase Price shall be paid by the BUYER to the BUILDER in installments (collectively, the “Installments,” individually, an “Installment”) as follows:

(a)
First Installment equal to 40% of the Vessel Equipment Purchase Price (US$579,760): Within fourteen (14) days after signing of this Agreement

(b)
Second Installment equal to 40% of the Vessel Equipment Purchase Price (US$579,760): Within fourteen (14) days after the VESSEL EQUIPMENT is ready for dispatch in Korea (EX Work from the Builder) to the port mentioned in Article 3.1 below (the “Port”)

(c)
Third Installment equal to 10% of the Vessel Equipment Purchase Price (US$144,900): On the date falling fourteen (14) days after the successful commissioning of the VESSEL EQUIPMENT

(d)
Fourth Installment equal to 10% of the Purchase Price (US$144,900): On the date falling (14) days after the Vessel’s obtainment of the class approval
4.   Method of Payment:
4

For the value on each applicable Installment payment date, the BUYER shall remit the amount of such Installment by telegraphic transfer to KEB Hana Bank (herein called the “Bank”) on account and in favour of the BUILDER, Account No. 374-910004-20732.
The Vessel Equipment Purchase Price shall be paid in full by the BUYER without any set off, counterclaim or deduction and are not subject to any settlement, discount or other special terms of payment unless the BUILDER has consented thereto in writing.
5.   Interest on Delayed Payment
If the Installment payment is not received on the due date, interest at the rate of LIBOR plus 1.0% will be charged from that date until payment is made.
5

ARTICLE III — DELIVERY
1.   Delivery
Delivery of the VESSEL EQUIPMENT shall take place under the conditions as set forth below:
Delivery time
 
On or prior to May 31, 2019
Delivery conditions
 
DDP (Yard)
Delivery according to
 
INCOTERMS 2010
Notwithstanding the delivery conditions set out in this Article 3.1 or any other terms herein, the BUYER acknowledges and agrees that all delivery costs from the port in Korea to the Yard shall be borne by the BUYER.
In case the shipyard location changes for reasons beyond the control of the Buyer, the Buyer shall notify the Builder in writing at the latest the date falling thirty (30) days prior the delivery date set out above in this Article 3.1 and the Builder shall arrange the Vessel Equipment to be dispatched to the new destination as per the terms set out above in this Article III.1 (save for change from the Yard to such new destination).
2.   Ownership /Insurance upon Delivery
The ownership of the VESSEL EQUIPMENT shall be transferred to the BUYER at the date of delivery of the VESSEL EQUIPMENT to the Yard or any other new destination as set out in the last paragraph of Article 3.2 above. The VESSEL EQUIPMENT shall remain insured by the BUILDER against loss and damage whatsoever until the date of delivery, and, after the delivery, the VESSEL EQUIPMENT shall be insured by the BUYER.
6

ARTICLE IV — DELAYS
1.   Delay due to Circumstances mentioned in Article XIII
If delay in delivery is caused by any of the circumstances mentioned in Article XIII or by an act or omission on the part of the BUYER, the time for delivery may be extended by a period which correspond to the delay in delivery having regard to all circumstances in the case, and in case the delay is caused solely or partly by the BUYER, the BUILDER shall be entitled to a compensation for any additional costs, damages or losses that the BUILDER may incur.
2.   BUILDER’s Notice of Delay
If the BUILDER anticipates that it will not be able to deliver the VESSEL EQUIPMENT at the time for delivery, the BUILDER shall forthwith notify the BUYER thereof in writing, stating the reason, and, if possible, the time when delivery can be expected The Builder will not be liable for delay in the delivery of Vessel Equipment to the Buyer if the delay is caused by:
(1)
A Force Majeure Event (as further described in ARTICLE XIII);
(2)
The Buyer’s failure to comply with the payment obligations;
(3)
The Buyer’s failure to allow access to the Vessel, the Yard or other infrastructure and to provide in a timely manner the necessary information and instructions which are necessary for the Builder’s delivery of the Vessel Equipment; and
(4)
The Buyer’s failure to receive the Vessel Equipment within the agreed delivery time; and
(5)
Any other material breach by the BUYER hereunder or any occurrence of an event disrupting the delivery which is beyond the BUILDER’s control.
3.   Remedies for the BUILDER’s delay
If the BUILDER delays the delivery for the VESSEL EQUIPMENT not because of any of the reasons set out in Article 4.2 (1) through (5) but by its own fault, the BUYER shall be entitled to liquidated damages from the date on which delivery should have taken place provided that the BUILDER is notified within 15 working days from the BUYER’s receipt of the delayed goods. The liquidated damages shall be payable at a rate of 1% of the purchase price for the delayed VESSEL EQUIPMENT for each completed week of delay. The liquidated damages shall not exceed 5% of the purchase price of the VESSEL EQUIPMENT in question. The right to liquidated damages shall be the BUYER’s sole remedy in case of delay, and the BUYER is not entitled to any other remedies in relation to such delay, except that the BUYER may cancel the sale and purchase of the VESSEL EQUIPMENT under this Agreement by serving upon the BUILDER a notice of cancellation in case the delay exceeds, other than for any of the reasons set out in Article 3 (1) to (5) above, six (6) weeks from the date of delivery set out in Article 3.1.
7

ARTICLE V — WARRANTY
1.   BUILDER’S WARRANTY
The BUILDER warrants that the VESSEL EQUIPMENT meets all specifications set forth in Appendix No. 1. The BUILDER specifically disclaims all warranties of functionality, merchantability and fitness of the VESSEL EQUIPMENT for a particular purpose except as may be specifically set forth in Appendix 1 and this Article 5.
The BUILDER undertakes in accordance with the below-mentioned provisions to repair or replace any defects in the VESSEL EQUIPMENT as may be set out in Appendix No. 1 and this Article 5.
The BUILDER warrants to the BUYER that the VESSEL EQUIPMENT sold to the BUYER pursuant to this Agreement will be free from defects in material and workmanship; and will conform to the agreed specifications for a period of 12 months of the VESSEL EQUIPMENT commissioning date, or 18 months from delivery, whichever comes first, (provided, however, 5 years for the scrubber body) for the Vessel, provided that:

(a)
The BUILDER is promptly notified (within the warranty period) of any wananty claim; and

(b)
The claimed defect in the VESSEL EQUIPMENT was not caused by misuse, static discharge, abuse, neglect, improper handling, installation, unauthorized repair, alteration or accident. Modification of the VESSEL EQUIPEMENT by the BUYER, or at the BUYER’s direction, unless specifically authorized in writing by the BUILDER, shall invalidate the above warranty.
The BUILDER’s liability under this warranty is limited to repairing, replacing or issuing a credit to the BUYER in the amount of the unit price of the part in defect, at its election for any such claim.
The warranty of the BUILDER shall only comprise defects occurring under the pre-supposed conditions and under the proper use of the VESSEL EQUIPMENT. The BUILDER’s warranty does not cover normal wear and tear parts, defects caused by improper use (including, but not limited to, defects caused by faulty maintenance, incorrect installation (meaning installation other than as per the written installation instructions of the BUILDER (“Installation Instructions”)) of the Vessel Equipment, by alterations undertaken without the consent of the BUILDER or by faulty repairs made by the BUYER.
The Builder warrants that the Exhaust Gas Cleaning System on delivery complies with MARPOL, annex VI Reg. 4, as detailed in the IMO Annex resolution MEPC 259 (68) of 15 May 2015 (“2015 Guidelines for Exhaust Gas Cleaning Systems”), item 5.3.1, scheme B, and Council Directive 1999/32/EC of 26 April 1999 as regards the sulphur content of marine fuels (as amended by Directive 2012/33/EU of the European Parliament and of the Council of 21 November 2012), Art. 4d (I) and their amendments thereafter; provided, however, that the Builder shall have no obligation of such warranty if 0) the contents of this Agreement provides
8

otherwise; (ii) the applicable parts of such warranty (but for such warranty) are not specifically required by this Agreement; (iii) the Vessel Equipment is manufactured in accordance with Appendix no. 1 or, as the case may be, the Buyer’s instructions, orders or demands with regard to the designs, blueprints, architectural plan, layout, and material or otherwise analogous in nature and/or (iv) such warranty is in relation to requirement that became effective after the date hereof The Builder warrants that the scrubber complies with the requirements of 2.2.26 Exhaust Gas Scrubber Washwater Discharge of VGP 2013 and their amendments thereafter; provided, however, that the Builder shall have no obligation of such warranty if (i) the contents of this Agreement provides otherwise; (ii) the applicable parts of such warranty (but for such warranty) are not specifically required by this Agreement; (iii) the Vessel Equipment is manufactured in accordance with Appendix no. 1 or, as the case may be, the Buyer’s instructions, orders or demands with regard to the designs, blueprints, architectural plan, layout, and material or otherwise analogous in nature and/or (iv) such warranty is in relation to requirement that became effective after the date hereof.
Subject to the fourth paragraph of this Article 5.1, the Buyer shall give notice to the Builder in writing as promptly as possible, in any event no later than the earlier date beween the date falling thirty (30) days after discovery of any defect and the expiry of the warranty period (the “Warranty Notice Date”) for which a claim is to be made under the warranties in ARTICLE V which shall include particulars as to the nature and cause of the defect and the extent of the damage caused thereby, if any. For the avoidance of doubt, the Builder will be under no obligation with respect to these warranties in respect of any claim for defects discovered after the expiry of the warranty period or any claim for defects made after the Warranty Notice Date.
2.   Sole Remedies
The remedies pursuant to Article 5.1 shall be the BUYER’s sole remedies in case of a defect in the VESSEL EQUIPMENT or incorrect Installation Instruction.
9

ARTICLE VI — BUYER’S OBLIGATIONS IN RELATION TO THE YARD
The BUYER shall arrange for and ensure that VESSEL EQUIPMENT will be maintained in the same condition as at the time of delivery until after installation, commissioning and class approval.
The BUYER shall procure and provide the Shipbuilding Contract for the Vessel, plans, drawings and specifications and any other documents or information (the “Vessel Documents”) which the BUILDER may require for its performance of this Agreement.
As to the Vessel Documents, the BUYER represents and wan - ants (i) the accuracy thereof, and (ii) the “as build” condition and performance of the Vessel at the time of the Agreement and at the time of the installation of the Vessel Equipment.
The BUYER acknowledges and agrees that, notwithstanding the Vessel Documents provided to the BUILDER, the BUILDER shall have no obligation to the BUYER or the YARD for the integrity or soundness of the design, construction or operation of the VESSEL with the VESSEL EQUIPMENT installed and commissioned.
THE BUYER shall indemnify, defend and hold harmless the BUILDER, its affiliates and their respective officers, directors, employees and agents from and against any claims against the BUILDER by the Yard seeking contributions from the BUILDER for the damages being claimed by the BUYER against the Yard.
10

ARTICLE VII — PRODUCT LIABILITY
Unless mandatory provisions in applicable law apply, the following shall govern the BUILDER’s product liability:

(a)
The BUILDER shall be liable for personal injury only if it is proved that such injury was caused solely by a defect in the VESSEL EQUIPMENT or is attributable solely to negligent Installation Instruction on the part of the BUILDER or others for whom the BUILDER was responsible.

(b)
The BUILDER shall be liable for any direct damage or loss to property (other than the VESSEL EQUIPMENT), if such damage or loss is caused solely by defects in the VESSEL EQUIPMENT or is solely attributable to negligent Installation Instruction on the part of the BUILDER or others for whom the BUILDER was responsible.

(c)
The BUILDER’s liability is in any event limited as set out in Article XII. It is emphasized however, that any direct damage to property (other than the VESSEL EQUIPMENT, including, but not limited to, damage to other parts of the vessel or on the vessel itself), caused solely by defects in the VESSEL EQUIPMENT or solely attributable to negligent incorrect Installation Instruction on the part of the BUILDER or others for whom the BUILDER was responsible, as detailed in Article 7.1(b) shall, for the purpose of this Article 7.1(c), not be considered indirect or consequential. For the sake of good order any indirect or consequential loss or damage steaming from such direct damage to property shall be excluded in accordance with Article 12.1 below.

(d)
If a claim for damage as described in this Article VII is lodged against one of the Parties, the latter Party shall forthwith inform the other Party thereof in writing.

(e)
The BUILDER and the BUYER shall be mutually obliged to let themselves be summoned to the court or arbitral tribunal examining claims for damages lodged against one of them on the basis of damage allegedly caused by the VESSEL EQUIPMENT.
11

ARTICLE VIII — INTELLECTUAL PROPERTY
1.   Exclusive to BUILDER
The BUYER on behalf of itself and the Yard acknowledges the BUILDER’s exclusive right, title and interest in and to any and all intellectual property rights which are utilized for, incorporated in or related to the design, function, structure and/or manufacture of the VESSEL EQUIPMENT (including, but not limited to the Installation Instructions). The BUYER on behalf of itself and the Yard agrees that such intellectual property rights shall remain the exclusive property of the BUILDER and that the BUYER shall not acquire any rights or interest in such intellectual property rights. Any compensation for the use of the Intellectual Property Rights related to the VESSEL EQUIPMENT in accordance with this Agreement is included in the purchase price.
All rights, title and interest in or to any and all inventions, improvement and/or modifications to the VESSEL EQUIPMENT shall be the exclusive property of the BUILDER and the BUYER shall not acquire any rights or interest thereto, except as specifically agreed in writing by the Parties.
2.   Parties’ Warranty
The Parties warrant, to the best of their knowledge, that no intellectual property right of a third party is infringed during each Party’s performance of its obligations under the Agreement and that such performance does not give rise to any third party claims.
12

ARTICLE IX — CONFIDENTIALITY
The Parties must strictly ensure that all know-how, trade secrets or other information of a confidential nature of which a Party has obtained knowledge as a consequence of this Agreement and which is not (i) already a part of the public domain, (ii) required to be disclosed by applicable law or governmental regulation, (iii) already in the possession of this Party at the time of entering into this Agreement or (iv) disclosed to this Party by a third party entitled to do so shall remain confidential and thus may only be used by the receiving Party to fulfil its obligations under this Agreement, either during the term of this Agreement or after its termination or cancellation, unless (a) specifically accepted by the relevant Party or (b) disclosure is required to be made due to applicable laws and regulations of the NASDAQ or the Securities and Exchange Commission applicable to the BUYER.


13

ARTICLE X — SUPERVISION
1.   Scope and Details for Supervision
The BUILDER will in addition to the delivery of the VESSEL EQUIPMENT carry out supervision of the mechanical and electrical installation of the VESSEL EQUIPMENT.
The Scope and details for the supervision are as set forth below:


-
The scope of supervision by the BUILDER shall be limited to the parts comprising the VESSEL EQUIPMENT as delivered by the BUILDER.

-
As to the period for supervision, the BUYER shall give a 4-week prior notice on or before the start of the same.

-
Each period of supervision shall last not more than 4 weeks, and, where there has been a delay due to a cause not attributable to the BUILDER (including, but not limited to, the YARD) and the BUILDER was not able to perform the supervision the commissioning relating to the VESSEL EQUIPMENT, such delay (“Supervision Delay”) shall also be included in such 4-week period.

-
In the event that the 4-week period for supervision has exceeded due to the Supervision Delay, the BUYER upon demand shall pay the additional costs therefor to the BUILDER.

-
The BUILDER’s working hours for supervision shall not be longer than 8 hours per day.
The BUYER shall arrange for and ensure access to the Yard for the BUILDER’s representatives to supervise installation.
The BUYER shall indemnify the BUILDER from all costs by the BUILDER caused by the Delay.
2.   Installation by BUYER
Installation will be carried out by the BUYER, who shall, at its own expense, provide the skilled and unskilled labor, all equipments and everything necessary for the installation of the VESSEL EQUIPMENT, which installation shall be supervised by the BUYER.
The BUYER shall be responsible for installation of the VESSEL EQUIPMENT subject only to the BUILDER being responsible for negligent incorrect Installation Instructions provided in writing by the BUILDER, and, for the avoidance of doubt, the BUILDER’s liability for such negligent incorrect Installation Instructions shall be limited to repairing, replacing or issuing a credit in the amount of the unit price of the part in defect as set out in Article 5.1 above.
14

ARTICLE XI — COMMISSIONING

1.   Scope and Details, Costs
When installation has been completed by the BUYER, commissioning shall be carried out pursuant to the following:

-
The scope of commissioning by the BUILDER shall be limited to the parts of comprising of the Vessel Equipment as delivered by the BUILDER

-
As to the period for commissioning, the BUYER shall give a 4-week prior notice on or before the start of the same.

-
The period of commissioning shall last not more than 4 weeks, and, where there has been a delay due to a cause not attributable to the BUILDER (including, but not limited to, the YARD) and the BUILDER was not able to perform the commissioning relating to the VESSEL EQUIPMENT, such delay (“Commissioning Delay”) shall also be included in such 4-week period.

-
In the event that the 4-week period for commissioning has exceeded due to the Commissioning Delay, the BUYER upon demand shall pay the additional costs therefor to the BUILDER.

-
The BUILDER’s working hours for commissioning shall not be longer than 8 hours per day.
The BUYER shall arrange for and ensure access to the Yard for the BUILDER’s representatives to undertake commissioning.
2.   Costs
The BUYER shall bear all costs of the commissioning.
The BUILDER shall bear all costs relating to its personnel and its other representatives; provided, however, that the BUYER shall indemnify the BUILDER from all costs by the BUILDER caused by the Delay.
The BUYER shall provide free of charge any power, lubricants, water, fuel, raw materials and other materials required for the commissioning.
3.   Certification
Upon completion the BUILDER will provide the BUYER with a commissioning report prepared by the BUILDER which certify the commissioning.

15

In case commissioning has not taken place 12 months after installation of the VESSEL EQUIPMENT and this is caused solely by the BUILDER’s own fault, or in case the BUILDER deems that commissioning is not possible, the BUYER’s sole remedy shall be to demand a reduction of the purchase price in proportion to the reduced value of the VESSEL EQUIPMENT. For the avoidance of doubt this implies that the BUYER cannot tenninate this Agreement and/or, in excess of what is set out in this Article, claim any reimbursement of costs or payment of damages due to the VESSEL EQUIPMENT not being commissioned.
After successful commissioning and certification (BUYER will do its utmost best to assist in soonest certification), all changes upon request of the BUYER shall be paid by the BUYER.
16

ARTICLE XII —LIMITATION OF LIABILITY
1.   General Limitation
Except as otherwise permitted pursuant to the second sentence of Article 7.1(c), in no event shall the BUILDER be liable for any special, incidental, consequential, direct or indirect loss or damage of any kind (including, but not limited to, loss of profits (including, without limitation, those in relation to charterhire or other vessel earnings or repair and replacement costs for any part of any Vessel including the Vessel Equipment), delays or damages to the business reputation) incurred by or claimed against the BUYER or any other person in connection with the transactions contemplated by this Agreement.
2.   Exclusion and Limitation of Liability
The BUYER acknowledges and agrees that the BUILDER shall have no responsibility or obligation for the design, construction or operation of the Vessel fitted with the Vessel Equipment, but only for the VESSEL EQUIPMENT, the operation and performance of the Vessel Equipment itself pursuant to Article V and the accuracy and sufficiency of the Installation Instructions, and that the BUILDER’s liability therefor shall be limited to repairing, replacing or issuing a credit in the amount of the unit price of the part in defect, at its election for any such claim.
3.   Extent of Liability
The BUYER hereby expressly waives and forgoes any right to punitive, exemplary or similar damages, if any, that the BUYER may have against the BUILDER hereunder or otherwise. Furthermore, notwithstanding anything herein to the contrary, the BUILDER’s aggregate liability hereunder or otherwise shall in no event exceed ten percent (10%) of the price of the VESSEL EQUIPMENT sold hereunder.
The limitations above shall apply to the liability irrespective of any theory of liability (including, but not limited to, whether in an action for contract, strict liability or tort (including negligence) or otherwise).
17

ARTICLE XIII — FORCE MAJEURE
1.   Force Majeure
Neither Party shall be liable for events beyond a Party’s control and which that Party could not reasonably have anticipated or should have prevented, and which result in that Party not being able to comply with its obligations under the Agreement, such as loss of vessel carrying the Vessel Equipment as cargo (including, hijacking, total loss or constructive loss), labour conflict, stroke of lightning, accidental fire, war, mobilisation or military calling up of a major extent, requisition, confiscation, stipulations by authorities, insurrection and riot, as well defects or delays in deliveries from sub-suppliers due to circumstances stated above. If such circumstance has occurred, the time of compliance shall be moved forward for a period of time corresponding to the duration of the obstacle.
2.   Notice
A Party relying on this force majeure provision must immediately and in any event within 24 hours notify the other Party thereof in writing with supporting documents and must further specify the nature of the impediment, the expected duration thereof and submit all supporting evidence. Additional a notice must be given immediately, and always within 1 day, after the impediment has ceased.
18

ARTICLE XIV — MISCELLANEOUS
1.
This Agreement has been prepared in English and shall be executed in duplicate and in such number of additional copies as may be required by either Party respectively.
2.
Any amendments to this Agreement shall be made in writing and signed by both Parties in order to be valid.
3.
If any provision under this Agreement is found to be inconsistent with or void under any applicable law, the validity of the remaining provisions shall not be affected thereby. In such case the Parties shall agree to replace the ineffective provision with a provision of fundamentally the same contents, which, however, is legally valid, binding, and enforceable under the said law.
4.
Failure by any Party at any time or times to require performance of any provision of this Agreement shall in no way affect its rights to enforce the same, and the waiver by any Party of any breach or non-performance of any provision of this Agreement shall not be construed to be a waiver by such Party of any succeeding breach of such provision or waiver by such Party of any breach of any other provision hereof
5.
This Agreement may not be assigned by either Party unless consented to in writing by the other Party.
6.
Upon or before delivery or in connection with the installation of the Exhaust Gas Cleaning System or in connection with the commissioning of the Exhaust Gas Cleaning System, the Builder shall provide the Buyer with (in electronic format), all technical and operational information, and all installation and maintenance manuals in respect of the Exhaust Gas Cleaning System, including appropriate certification under MARPOL, MPEC and a list of recommended scheduled maintenance activities in relation to the Exhaust Gas Cleaning System. It is understood that some documentation may not be available due to circumstances outside the Builder’s control, such as missing or delayed validation by the classification society or delayed MARPOL approval. The Builder shall make reasonable endeavors to promptly provide such documents as soon as possible.
7.
In addition to the provision of the information in Clause 6, the Builder undertakes to provide the Buyer with any information which the Buyer may reasonably request in relation to the Vessel Equipment including but not limited to any documents required for the import of the Vessel Equipment to the location of the Yard.
8.
No variation of the Agreement, including the introduction of additional terms and conditions shall be effective unless it is agreed in writing by and between the Parties.
9.
The Builder is entitled to subcontract in whole or in part any of the performance of the Vessel Equipment to a third party without the consent of the Buyer. The Builder is responsible for such subcontractor’s acts and omissions as if they were the Builder’s.
19

ARTICLE XV — APPLICABLE LAW AND JURISDICTION
1.
Governing Law
This Agreement is governed by English law.
2.
Arbitration
In the event of any dispute between the Parties as to any matter arising out of or relating to this Agreement or any stipulation herein or with respect hereto which cannot be settled by the Parties themselves, such dispute shall be settled by arbitration in London, England in accordance with the London Maritime Arbitrators Association Terms. The award thereof shall be final and binding upon both parties.
3.
Alteration of Delivery Date
In the event of arbitration of any dispute arising from any matters occurring prior to delivery of the VESSEL EQUIPMENT, all delays in delivery of the VESSEL EQUIPMENT due to such arbitration shall be deemed to be permissible delays and the delivery date shall be automatically postponed and/or extended for the period of time occupied by such arbitration commencing with the notice to arbitrate and concluding with the publication of the award.
20
ARTICLE XVI — TERM AND TERMINATION
1.
The Term.
The Agreement will commence on the date stated on the first page of this Agreement and will continue for five (5) years from the Vessel leaving the yard after installation unless terminated in accordance with the Agreement.
2.
Termination for material breach.
Either Party will be entitled to terminate this Agreement fully or partly if the other Party is in material breach of this Agreement and fails to remedy that material breach within thirty (30) days of written notice of that material breach. For the avoidance of doubt, this remedy period only applies where a material breach is capable of remedy, and, for clarity, any material breach by the Builder shall mean only in a case where the Buyer’s replacement or issuance of credit obligation as set out in the fourth paragraph of Article V exceeds 50% of the Purchase Price.
In case such material breach cannot be remedied, a Party may terminate the Agreement by written notice with immediate effect, without prejudice to any claim for damages that such Party may have against the other Party and the Party being on a material breach of the Agreement shall also make due compensation to the other Party for any loss and for any and all expenses incurred together with interest; provided, however, that any such claims for damages or compensations shall be deemed to have been satisfied in full, if, in case of the BUILDER’ s material breach, the BUILDER refunds the full Purchase Price and the BUYER delivers the VESSEL EQUIPMENT to the BUILDER in accordance with the Builder’s instructions and on the Builder’s expense and risk.
21
IN WITNESS WHEREOF , the parties hereto have caused this Agreement to be duly executed in Glyfada, Athens, Greece on the day and year first above written.


The BUYER:
 
The BUILDER:
     
CHAMPION MARINE CO.
 
HYUNDAI MATERIALS CORPORATION
     
/s/ Stavros Gyftakis
 
/s/ CHO, Wook JE
By:    Stavros Gyftakis
 
By: CHO, Wook JE
Title: Director
 
Title: General Manager
     





22








APPENDIX F
Scrubber Supply Contract Assignment



DATED
[ • ] NOVEMBER 2018

(1) CHAMPION MARINE C O .
(2) CARGILL INTERNATIONAL SA

ASSIGNMENT OF SALE AND PURCHASE AGREEMENT
RE SCRUBBER TO BE INSTALLED ON MV
“CHAMPIONSHIP” ( IMO NO . 9403516)


THIS DEED (the “ Deed ”) is dated [ • ] November 2018.
BETWEEN
1.
Champion Marine Co. , a corporation duly incorporated and validly existing under the laws of Marshall Islands with its registered address at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH 96960, Marshall Islands ( ‘Assignor’ ); and
2.
Cargill International SA , a company incorporated under the laws of Switzerland and having its registered office at 14 Chemin-de-Normandie, 1206 Geneva, Suisse ( ‘Assignee’ , which expression includes its successors and assignees from time to time),
(the Assignor and the Assignee, together the “ Parties ” and each a “ Party ”)
RECITALS
(A)
Pursuant to the sale and purchase agreement dated 28 September 2018 between the Assignor and the Builder (as amended, supplemented or otherwise modified up to the date of this Deed, the “ SPA ”), the Builder has agreed to, inter alia , design, build, equip, complete and deliver one (1) exhaust gas cleaning system (“ Scrubber ”) for the Assignor and the Assignor has agreed to buy the Scrubber.
(B)
By a sub-bareboat charter dated, or, as the case may be, to be dated, on or about the date of this Deed entered into, or, as the case may be, to be entered into between the Assignee as ‘Owner’ and the Assignor as ‘Charterer’, (as amended, supplemented or otherwise modified from time to time, the “ SBBC ”), the Assignee has agreed or, as the case may, shall agree to let to the Assignor and the Assignor has agreed or, as the case may be, shall agree to take on bareboat charter, the Vessel on the terms and conditions set out therein.
(C)
The Assignor has agreed to enter into this Deed pursuant to the MOA and SBBC as security for, inter alia , the due performance by the Assignor of its obligations under the SBBC.
(D)
This Deed is the “Scrubber Supply Contract Assignment” as referred to in the SBBC and the MOA.
It is agreed as follows -
1.   DEFINITIONS AND INTERPRETATION
1.1     DEFINITIONS
In this Deed the following definitions and the definitions in the above recitals shall apply:
‘Assigned Contract’ means the SPA;
‘Assigned Interests’ means all rights, title, benefit and interests of every kind which the Assignor now or at any later time has to, in or in connection with the Assigned Contract or in relation to any matter arising out of or in connection with the Assigned Contract, and / or the Scrubber, including, but without in any way limiting the generality of the preceding words –
(a)   all rights and interests relating to any amount of any kind payable under the terms of the Assigned Contract;
(b)   all rights to reject or take delivery of the Scrubber pursuant to the SPA;
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(c)   all rights to commence, conduct, defend, compromise or abandon any legal or arbitration proceedings relating to the Assigned Contract or to any matter arising out of or in connection with the Assigned Contract; and
(d)   all rights to damages, interest, costs or other sums payable under any judgment or order of any court, or any arbitration award, relating to the Assigned Contract or to any matter arising out of or in connection with the Assigned Contract;
‘Builder’ means Hyundai Materials Corporation, a corporation organised and existing under the laws of Korea and having its registered office at 9F Shin-An Building, 512 Teheran-ro, Gangnam-gu, Seoul 06179, Korea;
‘Default Event’ means an Event of Default which has occurred and, where there is a cure period for such Event of Default set out in the SBBC, which has not been remedied within the relevant cure period;
‘Default Rate’ means a rate of interest of ten percent (10%) per annum;
‘Dispute’ has the meaning ascribed to it in Clause 17.1;
‘Head Owner’ means CFT Investments 1 LLC with an office at c/o SMBC Leasing and Finance, Inc., 277 Park Avenue, New York, New York 10172 or its successors, assigns and nominees;
‘Effective Time’ means the time and date on which the Vessel is delivered to, and accepted by, the Head Owner in accordance with the MOA as evidenced by the executed Protocol of Delivery and Acceptance;
‘MOA’ means the memorandum of agreement (as amended, supplemented or otherwise modified from time to time) dated, or, as the case may be, to be dated on or about the date of this Deed and entered into, or, as the case may be, to be entered into between , inter alios , the Seller and the Assignee, pursuant to which the Seller agreed to deliver the Vessel to the Head Owner (the Assignee having been, or, as the case may be, to be, nominated by the Assignee as its nominee under the MOA for the purpose of accepting delivery of the Vessel pursuant to a nomination notice dated on or about the date of this Deed);
‘Notice of Assignment ’ has the meaning ascribed to it in Clause 2.3;
‘Protocol of Delivery and Acceptance’ has the meaning ascribed to it in the MOA;
‘Seller’ means Champion Ocean Navigation Co. Limited, a company duly incorporated and validly existing under the laws of Malta and having its registered address at 147/1, St. Lucia Street, Valletta, VLT 1185, Malta;
‘Vessel’ means “ Championship ” with IMO Number 9403516.
1.2
Unless defined elsewhere in this Deed or the context otherwise requires, terms defined in, or whose interpretation is provided for in, the SBBC, shall have the same meaning when used in this Deed.
1.3
Unless a contrary indication appears, a reference in this Deed (including the recitals hereto) to:

1.3.1
any other person shall be construed so as to include, where relevant, its successors in title, permitted assigns and permitted transferees;
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1.3.2
a “ person ” includes any individual, firm, company, corporation, government, state or agency of a state or any association, trust, joint venture, consortium or partnership (whether or not having separate legal personality);

1.3.3
the words “ include(s) ”, “ including ” shall be construed as followed by the words “ without limitation ”; and

1.3.4
“ liabilities ” includes any obligation, whether incurred as principal or as surety, for the payment or the repayment of money, whether present or future, actual or contingent and whether owed jointly or severally or in any other capacity.
2.     ASSIGNMENT
2.1
As and with effect from the Effective Time, the Assignor, with full title guarantee, hereby unconditionally and irrevocably assigns and agrees to assign absolutely to the Assignee (which term, for the avoidance of doubt, includes its successors and assignees from time to time) the Assigned Interests.
2.2
Without prejudice to the Assignor’s obligations under Clause 4.1, the Assignor shall remain liable to perform all obligations connected with the Assigned Interests and the Assignee shall not, in any circumstances, have or incur any obligation or liabilities of any kind in connection with the Assigned Interests, and, by it execution and delivery of this Deed, the Assignee does not become a party to the Assigned Contract.
2.3
The Assignor covenants with the Assignee and undertakes to give no later than the Effective Time to the Builder (with copy to the Assignee), a notice of the assignment in the form and on the terms set out in Part I of Schedule 1 to this Deed (“ Notice of Assignment ”)) and shall procure that the Builder duly acknowledges such notice and signs and delivers an acknowledgement in the form and on the terms set out in Part II of Schedule 1 of this Deed to the Assignor (with copy to the Assignee).
2.4
The Assignor warrants to the Assignee that prior to the date of this Deed it has not sold, created any security interest over the Assigned Interests, or assigned or otherwise disposed of the Assigned Interests or any right related to the Assigned Interests to any person.
3.    REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS
3.1     The Assignor represents and warrants to the Assignee as follows:

3.1.1
the Assignor is the sole legal and beneficial owner of all rights, title, benefit and interests which the Assigned Contract creates in favour of the Assignor;

3.1.2
the Assignor has the right, without requiring the concurrence, consent or authority of any other person, to unconditionally and irrevocably assign absolutely with full title guarantee, the .Assigned Interests;

3.1.3
the copy of the Assigned Contract delivered to the Assignee in connection with this Deed is a true, correct and complete copy, and there does not exist any addendum, supplemental agreement or other document of any kind which has the effect of varying the terms of the Assigned Contract or of excluding, restricting or qualifying any right or interest which an Assigned Contract creates in favour of the Assignor;

3.1.4
the Assigned Contract is in full force and effect and is binding on and enforceable against each of the parties to it, and no event has occurred or matter arisen as a result of which any party to the Assigned Contract is, may be or may later become entitled to rescind or terminate the Assigned Contract or to refuse or suspend performance of
Page 2

its obligations thereunder, or to raise any set-off or other defence in respect of such obligations; and

3.1.5
without limiting the generality of Clause 3.1.4, the Builder is, to the best of the Assignor’s knowledge, in compliance with its obligations under the Assigned Contract.
4.     COVENANTS, PAYMENT OF MONIES AND PROVISION OF INFORMATION
4.1     The Assignor shall:

4.1.1
observe and perform all its obligations and meet all its liabilities under or in connection with the Assigned Contract;

4.1.2
use its best endeavours to ensure performance and observance by the Builder of its obligations and liabilities under the Assigned Contract; and

4.1.3
take any action, or refrain from taking any action, which the Assignee may specify in connection with any breach, or possible future breach, of the Assigned Contract by the Assignor or any other person or with any other matter which arises or may later arise out of or in connection with the Assigned Contract.
4.2
The Assignor shall not, whether by a document, by conduct, by acquiescence or in any other way -

4.2.1
without the prior written consent of the Assignee (such consent not to be unreasonably withheld or delayed) agree to any material variation or amendment of the terms and conditions of the SPA (including, but not limited to, any variation or amendment which may extend the delivery date of the Scrubber under the SPA) or any substantial variation of the specifications of the Scrubber will be permitted (for the avoidance of doubt, substantial variation shall mean variations to the main particulars of the Scrubber);

4.2.2
release, waive, suspend or subordinate or permit to be lost or impaired any interest or right forming part of or relating to any Assigned Interests;

4.2.3
without the prior written consent of the Assignee (such consent in the Assignee’s sole discretion) waive any person’s breach of the Assigned Contract;

4.2.4
rescind or terminate the Assigned Contract or treat itself as discharged or relieved from further performance of any of its obligations or liabilities under an Assigned Contract; and/or

4.2.5
purport to vary or revoke any notice or instruction relating to this Deed which the Assignor has given or may later give to any person.
4.3
The Assignor shall promptly provide the Assignee with a copy of any amendment or variation to the Assigned Contract, or any other agreement made in connection thereto. For the avoidance of any doubt, receipt of acknowledgement of receipt of any such amendment or variation by the Assignee shall in no event be deemed to constitute a consent to an amendment or variation pursuant to Clause 4.2.1.
4.4
Following a Default Event, the Assignor shall forthwith, upon receipt by it (or by any person acting on its behalf), pay over or transfer to the Assignee (or as the Assignee may direct) any moneys or other property which the Assignor (or any person acting on its behalf) may receive or recover in connection with the Assigned Contract and all property which may, directly or indirectly, represent, accrue on or be derived from any such moneys or property.
Page 3
4.5     The Assignor shall forthwith -

4.5.1
inform the Assignee if any breach of the Assigned Contract occurs or a serious risk of such a breach arises and of any other event or matter affecting the Assigned Contract which is material to the Assignee;

4.5.2
provide the Assignee, promptly after service, with copies of all notices served on or by the Assignor under or in connection with the Assigned Contract;

4.5.3
provide the Assignee with any information which it reasonably requests about the Assigned Contract or any matter relating to or affecting the Assigned Contract including the progress of the construction of the Scrubber; and

4.5.4
generally provide the Assignee and its officers and representatives with full and prompt co-operation and assistance relating to any Assigned Interests.
5.     PROTECTION OF SECURITY
5.1
The Assignee may take any action which it may think fit for the purpose of protecting or maintaining its rights created by this Deed or for any similar or related purpose.
6.     ENFORCEABILITY AND ASSIGNEE’S POWERS
6.1
On the occurrence of a Default Event but without the necessity for any court order in any jurisdiction to the effect that a Default Event has occurred or that the security constituted by this Deed has become enforceable:
6.1.1   the security constituted by this Deed shall immediately become enforceable; and

6.1.2
the Assignee shall be entitled at any time or times to exercise the powers set out in Clauses 6.2; and
6.1.3   the Assignee shall be entitled at any time or times:

(i)
to exercise the powers possessed by it as assignee of the Assigned Interests conferred by the law of any country or territory in which the Assigned Interests are physically present or deemed to be sited, the courts of which have or claim any jurisdiction in respect of the Assignor, the Vessel, the Scrubber or any item of Assigned Interests; and

(ii)
without limiting the scope of the Assignee’s powers under Clause 6.1.3(i) above, to exercise the powers possessed by it as a creditor or as a person with a security interest in the Assigned Interests conferred by English law.
6.2
On the occurrence of a Default Event, the Assignee shall be entitled then or at any later time or times -

6.2.1
to exercise any right forming part of the Assigned Interests, including any right to terminate the Assigned Contract;

6.2.2
to implement the SPA and to take delivery of the Scrubber in its own name and thereafter to do such other actions as the Assignee may see fit;

Page 4


6.2.3
to collect and require payment of any amount payable under, or the right to which is assigned or charged by, the Assigned Contract or which otherwise forms part of the Assigned Interests, and to take possession of any other Assigned Interests;

6.2.4
to vary the terms of the Assigned Contract, to enter into any arrangement of any kind connected with an Assigned Contract, to replace, novate or terminate the Assigned Contract and to release any person liable under the Assigned Contract relating to any person’s obligations or liabilities under an Assigned Contract;

6.2.5
to sell, mortgage, exchange, invest or in any other way deal with any Assigned Interests in any manner and for any consideration (including shares, notes or other securities) and to do so, in the case of the Scrubber, either on or after its delivery under the SPA;

6.2.6
to petition or apply for, or prove or claim in, any winding up, administration, bankruptcy or similar procedure in respect of any person having any liability under the Assigned Contract;

6.2.7
to vote for or against and participate in, any composition, voluntary arrangement, scheme of arrangement or reorganisation of any person having a liability under the Assigned Contract;

6.2.8
to enter into all kinds of transactions for the purpose of hedging risks which have arisen or which the Assignee considers may arise in respect of any Assigned Interests out of movements in exchange rates, interest rates or other risks of any kind;

6.2.9
to employ the services of any lawyers, ship-brokers or other experts or advisers of any type or description, whether or not similar to the foregoing;

6.2.10
to appoint all kinds of agents, whether to enforce or exercise any right under or in connection with the Assigned Contract or for any other purpose;

6.2.11
to take over or commence or defend (if necessary using the name of the Assignor) any claims or legal or arbitration proceedings relating to, or affecting, any Assigned Interests which the Assignee may think fit and to abandon, release or settle in any way any such claims or proceedings;

6.2.12
generally, to enter into any transaction or arrangement of any kind and to do anything in relation to any Assigned Interests which the Assignee may think fit; and

6.2.13
recover from the Assignor on demand all losses, expenses, payments and disbursements incurred by the Assignee in or about or incidental to the exercise of any of its powers hereunder together with interest thereon at the Default Rate from the date when such losses, expenses, payments or disbursements were incurred by the Assignee until the date of reimbursement whether before or after judgement.
6.3
The Assignee shall not be obliged to check the nature or sufficiency of any payment received by it or him under this Deed or to preserve, exercise or enforce any right forming part of, or relating to, any Assigned Interests.
7.     FURTHER ASSURANCES
7.1       The Assignor shall:

7.1.1
execute and deliver to the Assignee (or as it may direct) any assignment, mortgage, power of attorney, proxy or other document, governed by the law of England or such other country as the Assignee may, in any particular case, specify;
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7.1.2
effect any registration or notarisation, give any notice or take any other step;
which the Assignee may by notice to the Assignor, specify for any of the purposes described in Clause 7.1 or for any similar or related purpose.
7.2     Those purposes are:

7.2.1
validly and effectively to create any security interest or right of any kind which the Assignee intended should be created by or pursuant to this Deed or the SBBC;

7.2.2
to enable or assist the Assignee or a Receiver to sell or otherwise deal with any Assigned Interests, to transfer title to, or grant any interest or right relating to, any Assigned Interests or to exercise any power which is referred to in Clause 7.1 above or which is conferred by the SBBC; and

7.2.3
to enable or assist the Assignee to enter into any transaction to commence, defend or conduct any proceedings and/or to take any other action relating to any Assigned Interests in any country or under the law of any country.
7.3
The Assignee may specify the terms of any document to be executed by the Assignor under Clause 7.1, and those terms may include any covenants, powers and provisions which the Assignee considers appropriate to protect its or a Receiver’s interests in the Assigned Interests.
7.4
The Assignor shall comply with a notice under Clause 7.1 by the date specified in the notice.
8.     POWER OF ATTORNEY
8.1
For the purpose of exercising, securing, enforcing or realising the Assignee’s powers, rights and interest to, in or in relation to the Assigned Interests and the due and punctual performance and discharge of its obligations and liabilities to the Assignee under this Deed, the Assignor irrevocably and by way of security appoints the Assignee its attorney, on behalf of the Assignor and in its name or otherwise, to execute or sign any document and do any act or thing which the Assignor is obliged to do under this Deed, provided that the power constituted by this Clause 8.1 shall not be exercised until there is a Default Event.
8.2
For the avoidance of doubt and without limiting the generality of Clause 8.1, it is confirmed that the Assignor authorises the Assignee to execute on behalf of the Assignor a document ratifying by the Assignor any transaction or action which the Assignee has purported to enter into or to take and which the Assignee considers was or might have been outside his powers or otherwise invalid.
8.3
The Assignee may sub-delegate to any person or persons all or any of the powers (including the discretions) conferred on the Assignee by Clauses 8.1 and/or 8.2 , and may do so on terms authorising successive sub-delegations.
9.     REMEDIES AND WAIVERS
9.1
No failure to exercise, nor any delay in exercising, on the part of the Assignee, any right or remedy under this Deed shall operate as a waiver, nor shall any single or partial exercise of any right or remedy prevent any further or other exercise or the exercise of any other right or remedy. The rights and remedies provided in this Deed are cumulative and not exclusive of any rights or remedies provided by law.
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10.     THIRD PARTY RIGHTS
10.1
Unless expressly provided to the contrary in the Deed, a person who is not a party to this Deed has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Deed.
11.     INVALIDITY
11.1
In the event that any term or condition of this Deed is rendered or declared illegal invalid or unenforceable in whole or in part by any statute, rule or regulation or any decision of any court or tribunal of competent jurisdiction then such determination or declaration or shall not affect the validity of the other terms and conditions of this Deed which will remain in full force and effect and the Assignor undertakes (in addition to the duties imposed by Clauses 7 and 8) to execute such further documents or documents as the Assignee may require to complete the security constituted by this Deed.
12.     ASSIGNMENT
12.1
This Deed shall be binding upon and inure to the benefit of the Assignee and the Assignor and their respective successors and permitted assigns and, for the avoidance of doubt, references in this Deed to either of them shall be construed accordingly.
12.2   The Assignor may not assign or transfer any of its rights and/or obligations under this Deed.
12.3
The Assignee may assign or transfer all or any part of its rights or obligations under this Deed to any assignee or transferee.
13.     NOTICES
13.1
Any communication to be made under or in connection with this Deed shall be made in writing and, unless otherwise stated, may be made by e-mail, fax or letter.
13.2
The address, fax number and e-mail address (and the department or officer, if any, for whose attention the communication is to be made) of the Assignor and the Owner for any communication or document to be made or delivered under or in connection with this Deed is:
13.2.1  in the case of the Assignor:
Address: Champion Marine Co., c/o Seanergy Management Corp., 154 Vouliagmenis Avenue, 16674 Glyfada, Athens, Greece
Fax: +30 210 9638404
Email: legal@seanergy.gr; sgyftakis@seanergy.gr
13.2.2 in the case of the Assignee:
Address: Cargill International SA, 14 Chemin de Normandie, 1206 Geneva, Switzerland
Fax: +41 22 703 2555
E-mail:
Page 7

George_Wells@cargill.com
otprojects@cargill.com
Olivier_demierre@cargill.com
Ann_shazell@cargill.com
Oliver_HandasydeDick@cargill.com
Keith_dawe@cargill.com
Kyriakos_attikouris@gargill.com
or any substitute address, fax number, e-mail address or department or officer as may be notified in writing to the other Party by not less than seven (7) days’ notice.
13.3
Any communication or document made or delivered by one person to another under or in connection with this Deed will be effective only:
13.3.1   if by way of fax, when received in legible form; or

13.3.2
if by way of letter, when it has been left at the relevant address or five (5) days after being deposited in the post postage prepaid in an envelope addressed to it at that address; or
13.3.3   i f by way of e-mail, when it is received,
and, if a particular department or officer is specified as part of its address details provided under Clause 13.2, if addressed to that department or officer.
13.4
Any communication or document to be made or delivered to the Assignee will be effective only when actually received by the Assignee and then only if it is expressly marked for the attention of the department or officer identified above (or any substitute department or officer as the Assignee shall specify for this purpose).
14.     ENGLISH LANGUAGE
14.1
Any notice or other document given or provided under or in connection with this Deed must be in English.
15.     COUNTERPARTS
15.1
This Deed may be executed in counterparts each of which when executed and delivered shall constitute an original of this Deed, but all the counterparts shall together constitute the same agreement. No counterpart shall be effective until each Party has executed at least one counterpart. A signed copy received in pdf format shall be deemed to be an original.
16.     GOVERNING LAW
16.1
This Deed and any non-contractual obligations arising out of or in connection with it are governed by, and construed in accordance with, English law.
17.     LAW AND JURISDICTION
17.1
The courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with this Deed (including a dispute relating to the existence, validity or termination of this Deed and/or any non-contractual obligation arising out of or in connection with this Deed) (a “ Dispute ”).
Page 8

17.2
The Parties agree that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly no Party will argue to the contrary.
17.3
This Clause 17 is for the benefit of the Assignee. As a result, the Assignee shall not be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, the Assignee may take concurrent proceedings in any number of jurisdictions.
17.4
Without prejudice to any other mode of service allowed under any relevant law, the Assignor (not being incorporated in England and Wales):

17.4.1
irrevocably appoints Messrs. E.J.C. ALBUM, SOLICITORS presently of Landmark House, 190 Willifield Way, London NW11 6YA, England (attention: Mr Edward Album, tel: +44 208 455 7653, fax: +44 208 457 5558 and email: ejca@mitgr.com ) as its agent for service of process in relation to any proceedings before the English courts in connection with this Deed; and

17.4.2
agrees that failure by an agent for service of process to notify the Assignor of the process will not invalidate the proceedings concerned.
17.5
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 Assignor must immediately (and in any event within five (5) days of such event taking place) appoint another agent on terms acceptable to the Assignee. Failing this, the Assignee may appoint another agent for this purpose.
In Witness whereof the Parties have caused this Deed to be duly executed and delivered as a deed by their duly authorised representatives the day and year first above written.
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EXECUTION PAGE – SCRUBBER SUPPLY CONTRACT ASSIGNMENT – “CHAMPIONSHIP”

ASSIGNOR


Signed as a deed by
)
 
Champion Marine Co., a
)
 
corporation duly incorporated and validly existing under 
)
 
the laws of the Republic of the Marshall Islands, by
)
 
 ___________________________________________,
)
…………………………………….
being a person who, in accordance with the laws
)
Authorised Signatory
of that territory, is acting under the authority of
)
 
the corporation.
   
     



Page 10



EXECUTION PAGE – SCRUBBER SUPPLY CONTRACT ASSIGNMENT – “CHAMPIONSHIP”

ASSIGNEE


Signed as a deed by
)
 
CARGILL INTERNATIONAL SA, a
)
 
company duly incorporated and validly existing
)
 
under the laws of Switzerland, by
)
 
  ___________________________________________, )
…………………………………….
being a person who, in accordance with the laws
)
Authorised Signatory
of that territory, is acting under the authority of the company.
)
 
     
     




Page 11

SCHEDULE 1
PART I - NOTICE OF ASSIGNMENT TO BUILDER
To:     Hyundai Materials Corporation
9 Shin-An Building
512 Teheran-ro, Gangnam-gu
Seoul 06179
Korea
Copy : Cargill International SA
14 Chemin-de-Normandie
1206 Geneva
Switzerland
[ • ] 2018
Dear Sirs

SCRUBBER TO BE INSTALLED ON “CHAMPIONSHIP” (IMO NO. 9603516)
We refer to the sale and purchase agreement for one (1) exhaust-gas cleaning system (‘ Scrubber ’) to be installed on vessel “CHAMPIONSHIP” (IMO 9403516) dated 28 September 2018 between us and you (as amended and supplemented or otherwise modified to the date hereof, the ‘ Contract ’).
Please note that, by an Assignment of Sale and Purchase Agreement dated [ • ] 2018, we have assigned to Cargill International SA (including its successors and assigns, the ‘ Assignee ’), with first priority, absolutely all our rights, title, benefit and interests of every kind which we now or at any later time have under, in or in connection with, or in relation to any matter arising out of or in connection with, the Contract and / or the Scrubber.
We request you to issue to the Assignee a letter in the attached form acknowledging the assignment (“ Acknowledgement ”).
We irrevocably undertake not to give any instructions or send any communications which would in any way be inconsistent with the terms of your letter to the Assignee and, until such time as the Assignee gives you notice to the contrary, you are irrevocably instructed to disregard any instruction or communication which you or the Assignee consider to be inconsistent with the terms of that letter.
The terms of the Acknowledgement shall be binding on us for all purposes; any payment or transfer or other action which you may, in good faith, make or take in pursuance or in connection with the Acknowledgement shall be valid and binding in relation to ourselves.
Although we have assigned to the Assignee with first priority, absolutely all our rights, title, benefit and interests of every kind which we now or at any later time have under, in or in connection with, or in relation to any matter arising out of or in connection with, the Contract and / or the Scrubber, we remain liable to perform our obligations under the Contract.

This notice, including any non-contractual obligations arising out of or in connection with it, shall be governed by and construed in accordance with English law.
Yours faithfully
………………………..
for and on behalf of
Champion Marine Co.

PART II - BUILDER’S ACKNOWLEDGEMENT

To:     Cargill International SA
14 Chemin-de-Normandie
1206 Geneva
Switzerland
Copy:  Champion Marine Co
Trust Company Complex
Ajeltake Road, Ajeltake Island
Majuro, MH 96960
Marshall Islands
[ • ] 2018
Dear Sirs

SCRUBBER TO BE INSTALLED ON “CHAMPIONSHIP” (IMO NO. 9403516)
We refer to a notice of assignment from Champion Marine Co. (“ Company ”) dated [•] 2018 (‘ Notice ’) regarding an assignment to Cargill International SA (and its successors and assignees) (“ Assignee ”) relating to the sale and purchase agreement for one (1) exhaust-gas cleaning system (‘ Scrubber ’) to be installed on vessel “CHAMPIONSHIP” (IMO 9403516) dated 28 September 2018 between the Company and us, (as amended and supplemented and otherwise modified to the date hereof, the ‘ Contract ’).
1.   We confirm that we consent to the assignment described in the Notice.
2.   We confirm that we have no notice of any assignment of, or charge over, the Contract or any sums payable thereunder save in favour of the Assignee.
3.   We shall, as soon as reasonably practicable, notify the Assignee if at any later time such an assignment or charge is expressly notified to us in writing.
4.   We acknowledge that all the rights, title, benefit and interests of every kind which the Company now or at any later time has under, in or in connection with, or in relation to any matter arising out of or in connection with, the Contract and / or the Scrubber have been assigned to the Assignee. We agree that our right to be paid by the Company for alterations, additions, extra work and materials required or directed by the Company in accordance with the terms of the Contract shall not be affected.
5.   We confirm that no addendum, supplemental agreement or other document of any kind has been signed or issued by or on behalf of ourselves or the Company which has the effect of varying the terms of the Contract or of excluding, restricting or qualifying any right or interest which the Contract create in favour of the Company.
6.   We confirm that, upon written notice of its intention to do so, the Assignee shall be fully entitled in the name of the Assignee and/or (at the Assignee’s option) in the name of the Company to commence any proceedings or arbitration relating to the Contract or any matter arising out of or in connection with the Contract or to take over and conduct any such proceedings or arbitration which may have been commenced by the Company.
7.   We agree that the Company remains liable to perform all its obligations under the Contract and the Assignee shall be under no obligation in respect thereof.

8.   We agree that without the prior written consent of the Assignee-
(a)   no material variation or amendment to the terms and conditions of the Contract (including, but not limited to, any variation or amendment which may extend the delivery date under the Contract) or any substantial variation of the specifications of the Scrubber will be permitted (for the avoidance of doubt, substantial variation shall mean variations to the main particulars of the Scrubber);
(b)   no interest which arises under or in connection with the Contract and which is assigned to the Assignee can be released, waived, lost, suspended or subordinated; and
(c)   no breach by us of the Contract can be waived.
9.   Unless given a written notice to the contrary by the Assignee, we shall pay to the Company any sums which become payable by us under or in connection with the Contract.
10.   We confirm that should default be made by the Company in the due payment of any instalment or instalments of the purchase price or should the Company commit any other default by reason whereof we claim a right to terminate, cancel or rescind the Contract we shall forthwith give the Assignee notice in writing of such default.
11.   We confirm that before exercising any option or right accruing to us on any such default, we shall first give the Assignee the option (to be exercised within 10 days) of the Assignee, or the Assignee’s nominee, making good the default and assuming all the Company’s liabilities under the Contract.
12.   If given notice in writing requiring us to do so, we will hold the Scrubber and/or any other documents of title to the Scrubber to the Assignee’s order and disposal (and in the event of receipt of a notice and request from the Assignee deliver such documents to the Assignee or to the Assignee’s order) free from any claim other than our claims under the Contract in respect of any default which the Assignee (or its nominee) has not elected to make good in accordance with paragraph 11 above.
13.   We hereby confirm that the Contract is in full force and effect.
14.   Reference in this letter to the Assignee includes references to its successors and assigns.
15.   This acknowledgement, including any non-contractual obligations arising out of or in connection with it, shall be governed by and construed in accordance with English law.
Yours faithfully
……………………………
For and on behalf of
Hyundai Materials Corporation

APPENDIX G
Manufacturer’s Consent


Page 43

[PRINT ON LETTERHEAD OF HYUNDAI MATERIALS CORPORATION]


Dated: __________ 2018

Champion Marine Co.
Trust Company Center
Ajeltake Road, Ajeltake Island
Majuro MH 6960,
Marshall Islands
Copy to:
Cargill International SA
14 chemin de-Normandie
1206 Geneva
Switzerland Dear Sirs,
“Championship” (IMO No. 9403516) (“Vessel”)
1.
We refer to the sale and purchase agreement for one exhaust gas cleaning system dated 28 September 2018 between you, Champion Marine Co., (“ CM ”) and us, Hyundai Materials Corporation, pursuant to which we agreed to design, build, equip, complete and deliver one (1) exhaust gas cleaning system (“ Scrubber ”) to be installed on the Vessel and you agreed to purchase and take delivery of the same (as amended, supplemented or otherwise modified from time to time, the “ SPA ”).
2.
In connection with certain financing arrangements, we have also been told that CM intends for Cargill International SA (“ CISA ”) (and its successors and assigns from time to time) to have the benefit of the SPA from the time of delivery of the Vessel by CISA to CM under a bareboat charter to be entered into between CISA and CM (“ Bareboat Charter ”).
3.
Under Article XIV (5) of the SPA, CM has the right, with our prior written approval, to assign the benefit of the SPA to another company.
4.
Pursuant to Article XIV (5) of the SPA, we hereby give our irrevocable and unconditional consent to CM to assign to CISA (and its successors and assigns from time to time) absolutely all of CM’s rights, title, benefit and interests of every kind which CM now or at any later time has to, in or in connection with the SPA and/or the Scrubber (the “ Assigned Rights ”), such assignment to take effect at the time and on the date on which the Vessel is delivered to CM by CISA under the Bareboat Charter (the “ Delivery Date ”). We hereby acknowledge and agree that from and after the Delivery Date, CISA and CISA’s successors and assigns, shall, inter alia , have the right to enforce the Assigned Rights in its and their own names.
5.
We confirm that, upon our receipt from CM of a notice of assignment to CISA (and its successors and assigns) of the Assigned Rights, we will promptly acknowledge

such notice and sign and deliver to CISA (with a copy to you and such other parties as CISA may require) an acknowledgement in such form and substance required by CISA and reasonably acceptable to us.
Yours faithfully,
_____________________
Authorised signatory of Hyundai Materials Corporation
Title:

APPENDIX H
Exemptions
1.
US Coast Guard approval dated 4 August 2016 for request to extend compliance date of ballast water management implementation schedule in Title 33, Code of Federal Regulations (CFR), Part 151, Subparts C and D in respect of the Vessel until the Vessel’s next scheduled dry-docking after 1 October 2016.
2.
Exemption in respect of the Vessel dated 19 October 2016 from the requirements of Regulation 10.7.1.3 of SOLAS Chapter II-2 (2004 Consolidated Edition) issued by the Classification Society under the authority of the Current Flag State.


Page 44
Exhibit 4.92

BAREBOAT CHARTER AGREEMENT "CHAMPIONSHIP" (IMO NO. 9403516)

Dated as of 7 November 2018

Between

CARGILL INTERNATIONAL SA
as Owner,

and

CHAMPION MARINE CO.
as Charterer
TABLE OF CONTENTS
   
Page
1.
CONDITION PRECEDENT
2
2.
TIME CHARTER
2
3.
CHARTER TERM
2
4.
DELIVERY; REDELIVERY
3
5.
CHARTER HIRE
8
6.
USE; OPERATIONS
12
7.
MAINTENANCE AND OPERATION
19
8.
ALTERATIONS
22
9.
INSURANCE-GENERAL
24
10.
LIENS
28
11.
MORTGAGES; FINANCING; SUBORDINATION
29
12.
END OF CHARTER AND OTHER OPTIONS
30
13.
REPRESENTATIONS AND WARRANTIES; OWNER COVENANTS
34
14.
ASSIGNMENT; SUB-BAREBOAT CHARTER
35
15.
LOGO AND VESSEL NAMES
36
16.
NOTICES
36
17.
DEFAULTS; REMEDIES
37
18.
INDEMNIFICATION, WITHHOLDING AND CERTAIN AGREEMENTS
44
19.
INCOME TAX
47
20.
LAW AND JURISDICTION
47
21.
SALVAGE
48
22.
WAR
48
23.
ASSIGNMENT OF INSURANCES
49
24.
CHANGE OF OWNERSHIP
49
25.
WAIVER
50
26.
NO REMEDY EXCLUSIVE
50
27.
ENTIRE AGREEMENT; AMENDMENT
50
28.
COUNTERPARTS
50
29.
SEVERABILITY
50
30.
CAPTIONS
51
31.
BINDING EFFECT
51
32.
INTERPRETATION
51

Exhibits
Exhibit A - Basic Charter Hire
Exhibit A-1 - Loss Value, Purchase Price and Floor Price Schedule
Exhibit B – Notice of Assignment of Insurances
Exhibit C – Agreed form of Time Charter
Exhibit D - Scrubber Supply Contract
BAREBOAT CHARTER AGREEMENT "CHAMPIONSHIP" ( IMO NO. 9403516 )
This Bareboat Charter Agreement "CHAMPIONSHIP" (the " Charter ") is made the 7 November 2018 by and between Cargill International SA, a company incorporated pursuant to the laws of Switzerland (the " Owner ") , and Champion Marine Co. a company incorporated pursuant to the laws of the Republic of the Marshall Islands (the " Charterer ").
(The Owner and the Charterer, each a " Party " and together, the " Parties ")
RECITALS
WHEREAS, Champion Ocean Navigation Co. Limited (as seller, " Seller ") and the Owner (as buyer) have entered into a memorandum of agreement dated 5 November 2018 (as amended, modified and supplemented from time to time, the "MOA") whereby the Owner has agreed to purchase the Liberian flagged bulk carrier "CHAMPIONSHIP" with IMO number 9403516 (the " Vessel ") from the Seller under the terms and conditions set forth therein and pursuant to which the Owner has nominated CFT Investments 1 LLC (the " Head Owner ") (as the nominee of the Owner) pursuant to a nomination notice dated 5 November 2018 to acquire title to, and take delivery of, the Vessel thereunder.
WHEREAS, the Owner, Sumitomo Mitsui Banking Corporation and the Head Owner, have entered into an Agreement to Acquire and Charter "CHAMPIONSHIP" (IMO No. 9403516) dated as of 5 November 2018 (as amended, supplemented or otherwise modified from time to time, the " Agreement to Acquire ") whereby the Head Owner has agreed to acquire the Vessel and bareboat charter the Vessel to the Owner and the Owner has agreed to cause title to the Vessel to be transferred directly to the Head Owner.
WHEREAS, the Owner, the Head Owner, the Time Charterer (as defined below) and the Charterer have entered into a multipartite agreement dated as of 7 November 2018 (as amended, supplemented or otherwise modified from time to time, the " Multipartite Agreement ") whereby, inter alia, the Charterer agrees this Charter shall be subordinated to the Head Owner's interests under the Bareboat Charter (as defined below).
WHEREAS, immediately subsequent to delivery of the Vessel under this Charter, the Vessel will be duly documented in the name of the Head Owner as owner thereof under the laws and flag of the Republic of the Marshall Islands (the " Flag State ") under Official No. 8217.
WHEREAS, the Head Owner has agreed to bareboat charter the Vessel to the Owner after its delivery on terms agreed between them (the " Bareboat Charter ") on the date of this Charter.
WHEREAS, upon delivery of the Vessel to the Owner under the Bareboat Charter, the Owner and the Charterer desire for the Owner to sub-bareboat charter the Vessel to the Charterer to be used to carry bulk cargoes.
WHEREAS, the Owner and the Charterer desire for the Charterer to let the Vessel out on hire under a time charter dated as of 7 November 2018 in the form appended at Exhibit C hereto (as amended, supplemented or otherwise modified from time to time, the " Time

Charter ") to the Owner as time charterer (in such capacity, the " Time Charterer ") upon taking delivery of the Vessel hereunder, the Time Charter to be of equal duration to this Charter.
WHEREAS, as security for the due and punctual performance of, inter alia , the Charterer's obligations under this Charter, Seanergy Maritime Holdings Corp. a company incorporated in the Republic of the Marshall Islands (the " Guarantor ") , has guaranteed, inter alia , the obligations of the Charterer under this Charter pursuant to a guarantee dated 7 November 2018 in favour of the Owner (as may be amended, supplemented or otherwise modified from time to time, the " Guarantee ").
WHEREAS, the Scrubber Amount (as such term is defined below) is held, or, as the case may be, is to be held, in an account (the " Escrow Account ") in the name of the Owner held with JPMorgan Chase Bank, N.A. (the " Escrow Bank ") and held, or, as the case may be, is to be held, in accordance with arrangements (the " Escrow Agreement ") agreed among, the Owner, the Charterer and the Escrow Bank. The funds without limitation, including the Scrubber Amount, held by the Owner's Bank pursuant to the Escrow Agreement in the Escrow Account from time to time less any interest accrued thereon, hereinafter the " Escrow Standing Amount ".
NOW THEREFORE, in consideration of the mutual promises, covenants and conditions contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Owner and the Charterer agree as follows:
1.
Condition Precedent
It shall be a condition precedent to this Charter that the Head Owner shall have accepted and taken delivery of the Vessel under the MOA, and that the Owner shall have accepted and taken delivery of the Vessel under the Bareboat Charter failing which any and all obligations hereunder of either Party toward the other shall be null and void and of no effect.
2.
Time Charter .
It is hereby agreed between the Parties that, upon the Owner's confirmation to the Charterer of the delivery of the Vessel to the Owner under the Bareboat Charter, and the delivery of the Vessel hereunder, the Charterer and the Owner automatically without further action by either the Charterer or the Owner shall be deemed to have entered into the Time Charter.
3.
Charter Term .
(a)     Subject to the terms and conditions of this Charter, the Owner hereby charters and demises to the Charterer and the Charterer hereby hires, and takes on demise, from the Owner, the Vessel. Except as otherwise provided in this Charter, the term of this Charter (the " Charter Term ") shall continue from (x) the date of delivery of the Vessel to the Head Owner as nominee of the Owner by the Seller, delivery by the Head Owner to the Owner under the Bareboat Charter and delivery by the Owner to the Charterer hereunder in accordance with the terms of Section 4(a) (the date of such occurrence being herein called the " Delivery Date ") up to and through (y) the date falling sixty (60) months following the Delivery Date.


(b)
There shall be no extension of this Charter beyond the initial sixty (60) month term described in Section 3(a).
4.
Delivery; Redelivery .

(a)
Delivery . (i) Delivery of the Vessel under this Charter will take place simultaneously with delivery of the Vessel by the Head Owner to the Owner under the Bareboat Charter. For the avoidance of doubt, the Owner shall not be liable for any delay in delivery of the Vessel. Delivery of the Vessel to the Owner by the Head Owner under the Bareboat Charter shall be deemed to constitute (i) full performance by the Owner of its obligations to deliver the Vessel to the Charterer hereunder (including, without limitation, in relation to the condition and/or class of the Vessel at delivery) and (ii) acceptance by the Charterer of the same. The Vessel shall be delivered to the Charterer with all documentation relating to the operation of the Vessel and its equipment that the Owner receives from the Seller pursuant to the MOA and/or from the Head Owner pursuant to the Bareboat Charter, including, to the extent received by the Owner pursuant to the MOA, technical and operating manuals, construction drawings, specifications, repair records, classification reports, regulatory inspection records and approvals (collectively, the "Technical Documents"). During the Charter Term, the Charterer shall be entitled to possession of the Technical Documents; provided, however, that the Owner and its designees shall be allowed reasonable access to and may make copies of the Technical Documents upon three (3) Business Days' prior written notice to the Charterer.
(ii)   The Owner has been assigned all of the rights and interests the Owner (as buyer) has or may have with respect to the Vessel under the MOA (the " Assigned Interests "). The Owner hereby assigns to the Charterer such rights and interests as the Owner may have in the Assigned Interests and such assignment shall be co-extensive with the Charter Term. The Charterer shall use due diligence to assert and enforce all such rights and interests. Upon termination or expiration of this Charter (unless the Charterer acquires the Vessel pursuant to the terms and conditions of Section 12 of this Charter or, as the case may be, the Charterer (or, as the case may further be, the Charterer's nominee) acquires the Vessel pursuant to the terms and conditions of clause 5.1 of the Multipartite Agreement), the Charterer shall be deemed to have automatically re-assigned all its rights, and interests in the Assigned Interests to the Owner. The Charterer hereby re-assigns to the Owner any amounts payable to the Charterer by or for the account of the Seller (as a result of the assignment made in the second sentence of this Section 4(a) (ii), all of which amounts shall be paid to the Owner, provided that any sums the Charterer shall have paid or agreed to pay third parties for correcting the damage, defects or deficiencies in the Vessel shall be excluded from such re-assignment and such sums shall be paid to the Charterer and the Charterer shall use such sums solely to pay such third parties for correcting the damage, defects or deficiencies in the Vessel.
(iii)   Without prejudice to Sections 4(d) and 4 (e)(i), on the Delivery Date, the Vessel shall be, or be deemed to be, in class without conditions or recommendations (other than as noted in the confirmation of class (or equivalent) delivered to the Owner and the Head Owner on the Delivery Date

(for the avoidance of doubt, the Charterer agrees and acknowledges that such confirmation of class (or equivalent) shall be the same declaration of class or class maintenance certificate as delivered by the Seller to the Head Owner pursuant to clause 6.1.14 of the MOA) and notwithstanding any such conditions or recommendations of class that may exist on the Delivery Date) and shall be classed with Bureau Veritas (" Classification Society "). During the Charter Term, the Vessel shall remain classed with the Classification Society or, with the prior written consent of the Owner, which consent shall not be withheld or delayed unreasonably, another classification society that is a member of the International Association of Class Societies, and in the event that the Owner gives such written consent, as and from the date of the change in classification society all references to 'Classification Society' in this Charter shall be read and construed as meaning the Vessel's new classification society as consented to by the Owner in such written consent.
(iv)   THE OWNER HEREBY EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, INCLUDING, BUT NOT LIMITED TO, TITLE OR THE DESIGN, CONDITION, MERCHANTABILITY, SEAWORTHINESS OF OR THE QUALITY OF THE MATERIAL, EQUIPMENT, OR WORKMANSHIP IN THE VESSEL, AS TO ITS FITNESS FOR A PARTICULAR PURPOSE OR ANY PARTICULAR TRADE, OR AS TO THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, AND THE OWNER FURTHER DISCLAIMS ALL OTHER LIABILITIES (AT COMMON LAW OR IN CONTRACT OR IN ADMIRALTY OR TORT OR OTHERWISE, INCLUDING, WITHOUT LIMITATION, STRICT LIABILITY OR NEGLIGENCE IN ANY DEGREE). THE VESSEL IS DELIVERED BY THE OWNER TO THE CHARTERER "AS IS, WHERE IS" AND WITH ALL FAULTS.

(b)
Redelivery . The provisions respecting redelivery of the Vessel as set forth in Sections 4 (c), 4 (d)(ii), 4 (e), 4 (f), 4 (g) and 4 (h) shall not be applicable in the event that the Charterer acquires the Vessel pursuant to the terms and conditions of Section 12 (a) or 12 (b), as the case may be, and/or clause 5 of the Multipartite Agreement .

(c)
The Charterer shall, at its own cost and expense, following the termination of this Charter in accordance with Section 17(b)(i), redeliver the Vessel to the Owner at a location designated by the Owner and being reasonably acceptable to the Charterer. Such location shall be an easily accessible location, recognised as a safe port within the following ranges dropping last outbound sea pilot or passing one safe port, Singapore / Japan range including People's Republic of China or in the Owner's option Skaw / Passero including UK/Med range any time day or night Sundays and Holidays included, with such location never to be within a Prohibited Country and always within International Navigation Limits.
The Charterer shall redeliver all Technical Documents to the Owner with the Vessel. The Charterer shall also provide to the Owner prior to redelivery evidence of the most recent drydocking, inspection and related repairs required by this Charter, together with written confirmation by the Charterer that to the best of its knowledge and belief there has been no subsequent
damage, grounding, collision or other similar material event subsequent to such drydocking (or providing the details of any of such events that may have occurred).
Commencing upon a determination pursuant to Section 17 that the Vessel will be redelivered, and through the completion of redelivery, the Charterer will allow for and assist in making the Vessel available for inspection at ports of call thereafter by potentially interested purchasers or charterers of the Vessel, as requested by the Owner. Any such inspection shall be without interference with or delay of the Vessel's operations and without interference with the Vessel's crew.

(d)
Survey, Inventory and Inspection .
(i)   On, or in the Owner's option, prior to, the Delivery Date, the Charterer, at its own cost and expense, shall do a survey of the Vessel and its inventory. The Owner agrees to accept such survey (the " On-hire Survey ") as the benchmark for the condition of the Vessel and the amount of inventory on the Vessel at the commencement of the Charter Term. The Charterer hereby unconditionally agrees that the Vessel's condition will be acceptable to it in all respects and in accordance with the terms of this Charter and the Charterer will have no claim against the Owner whatsoever in respect of any defects, damage or deficiencies and/or other items and/or matters resulting in and/or which are the subject of any recommendation or condition of class (" Deficiencies ") on the Delivery Date or otherwise identified during any UWI (as defined in Section 4 (d)(iv) (which, for the purposes of the On-hire Survey, the Parties shall ignore) during and/or after the Charter Term and/or following purchase of the Vessel by the Charterer. If requested by the Owner, and at the Charterer's expense, an underwater survey may be performed as part of the On-hire Survey. Purchase of bunkers and fuel oil on board the Vessel at the time of delivery will be made in accordance with the terms of the Time Charter.
(ii)   Following the termination of this Charter in accordance with Section 17(b)(i), the Owner shall appoint an independent marine surveyor, who is reasonably acceptable to the Charterer, for the purpose of determining and agreeing in writing the condition of the Vessel at the time of redelivery hereunder (the " Off-hire Survey ") as well as a plan to implement any correction of any deficiencies construed by the surveyor to exceed normal wear and tear. The expenses for the independent surveyor for such survey shall be paid by the Charterer. Such survey will include, but not be limited to, an inventory of all consumables, stores, spare parts and equipment on board the Vessel and ashore; a monetary valuation of such inventory; a general condition survey of the Vessel including photographic or videotape records; an inspection of class records; and an inspection of maintenance records. If requested by the Owner, and at the Charterer's own cost and expense, an underwater survey may be performed as part of the Off-hire Survey.
(iii)   The On-hire Survey report and the Off-hire Survey report (if any), when agreed, shall be deemed to be incorporated into this Charter by reference.

(iv)   At the request of the Owner, the Charterer shall at its own cost and expense arrange for an underwater inspection of the Vessel (the "UWI") on 3 November 2018 at / in Rizhao, China to be performed by a diver approved by the Classification Society and in the presence of a Classification Society surveyor arranged for by the Charterer and paid for by the Charterer. The Owner's and the Head Owner's representative(s) shall have the right to be present at the UWI as observer(s) only without interfering with the work or decisions of the Classification Society surveyor. The extent of the UWI and the conditions under which it is performed shall be to the satisfaction of the Classification Society. Any Deficiencies discovered during the UWI shall be rectified by the Charterer pursuant to Section 7(b). If the Vessel's rudder, propeller, bottom or other underwater parts are found broken, damaged or defective (but excluding any fouling or marine growth) during the UWI and such breakage, damage or defects do not constitute Deficiencies, the Charterer shall at the Charterer's own cost and expense promptly remedy such breakage, damage or defect to the Owner's and the Head Owner's satisfaction (such satisfaction at the Owner's and the Head Owner's sole discretion) but without unreasonably interfering with the Time Charterer's use or operation of the Vessel. If any fouling of and/or marine growth on the Vessel's rudder, propeller, bottom or other underwater parts is discovered during the UWI, and the extent of such fouling and/or marine growth is greater than would reasonably be expected to have accumulated on a hull of similar type, size and age to the Vessel's hull up to the date of the UWI, the Charterer shall, at the Charterer's own cost and expense but without unreasonably interfering with the Time Charterer's use or operation of the Vessel, promptly (and in all events at the next drydocking of the Vessel or such earlier date as required by the Classification Society and/or United States Coast Guard (as applicable and as the case may be)) clean such fouling and/or marine growth to the Owner's and the Head Owner's reasonable satisfaction.

(e)
Redelivery – Condition .
(i)   The Charterer agrees that on redelivery of the Vessel, the Vessel, its tackle, apparel, equipment and other appurtenances shall be clean, suitable, and in the same or as good order and condition and class as when delivered, fair wear and tear excepted, not affecting class excepted, and in all respects shall be seaworthy. For the avoidance of doubt, any Deficiencies shall be rectified and made good in all respects by the Charterer as required by the Classification Society and in any event prior to the date of redelivery of the Vessel by the Charterer to the Owner and the Vessel shall be redelivered to the Owner in class without any recommendation or condition of class. The Charterer further agrees that on redelivery of the Vessel (A) the Vessel will be re-delivered cargo free with holds and storage places cargo-free, clean and swept ready to load cargo, (B) the Vessel shall be capable of carrying the highest possible quality cargo according to class and Vessel specifications, (C) all food storage and preparation areas will be cleaned, sanitized, dry and ready for immediate operation, and (D) the Vessel shall be capable of operating for its intended use as a vessel of its type, size and age and subject to any subsequent alterations as provided by Section 8.
(ii)   The Charterer agrees that upon redelivery of the Vessel (A) the Vessel shall have all valid trading, class and class related certificates in place

and up to date, which shall have not less than twelve (12) months' validity remaining (B) there shall be not less than twelve (12) months remaining prior to the next special survey and dry docking of the Vessel as required by the Classification Society, such twelve (12) month period being without any consideration to any extension granted by the Classification Society, and (C) the Vessel shall have installed thereon all spares required by the Classification Society and by all regulatory authorities having jurisdiction over the Vessel. The Charterer further agrees that in the event of the redelivery of the Vessel by the Charterer to the Owner, it is understood and agreed that the Vessel shall be redelivered after having successfully completed a ten (10) year special survey and her latest scheduled intermediate survey following such ten (10) year special survey prior to such redelivery. The Charterer further agrees that, if at the time of redelivery of the Vessel by the Charterer to the Owner, the Flag State, the Classification Society, any other applicable classification societies and/or certifying authorities, and/or any regulatory or governmental agencies or authorities having jurisdiction over the Vessel and its equipment (or the area where the Vessel is operating from time to time), including, if applicable, the United States Coast Guard (each, a " Competent Authority ") , requires a ballast water treatment system to have been, or, as the case may be, to be, installed and maintained on the Vessel (including any extensions granted by any Competent Authority) either (Y) by the date of redelivery of the Vessel by the Charterer to the Owner or (Z) by any date within the period beginning from the date of redelivery of the Vessel by the Charterer to the Owner and ending on the first anniversary of the date of redelivery of the Vessel by the Charterer to the Owner, the Vessel shall be redelivered to the Owner with her ballast water treatment system installed and maintained in full compliance with such requirements. Notwithstanding Section 4 (b) above, the Charterer agrees that it shall not at any time during the Charter Term or upon redelivery of the Vessel to the Owner, or, as the case may be, the Head Owner, without the Head Owner's and the Owner's prior written consent (such consent at the Head Owner's and Owner's sole discretion), seek from any Competent Authority any waiver, permission to delay implementation, or supplemental or additional permission (including, without limitation, any request for an extension of any existing waiver or permission) to delay implementation of any requirement of such Competent Authority as to the installation and/or maintenance of a ballast water treatment system on the Vessel. The Charterer further agrees that upon redelivery, the Vessel shall be in full compliance with all applicable International Maritime Organization ("IMO") rules and regulations, including all applicable sulfur emissions standards, with which the Vessel is required to comply at the time of redelivery.
(iii)   Without prejudice to the remedies available to the Owner pursuant to Section 17(b), the Charterer further agrees that upon redelivery of the Vessel by the Charterer to the Owner following the termination of this Charter in accordance with Section 17(b)(i), the Charterer shall fully indemnify the Owner against, and reimburse the Owner for, and the Charterer shall pay no later than thirty (30) days after the Owner's demand, the Owner for any and all costs incurred by the Owner (including, if applicable, the resolution of any Deficiencies) in connection with: (A) the Vessel's ten (10) year special survey and her latest scheduled intermediate survey following such ten (10) year special survey; (B) the Vessel's ballast water treatment

system to the extent that it does not comply with the requirements specified under Section 4(e)(ii) above; and (C) the Approved Scrubber to the extent that it does not comply with the requirements specified under this Charter, including Section 6(g).
(iv)   The Charterer agrees that upon re-delivery, the functional and operating integrity of all machinery and equipment of the Vessel shall be verified and approved by an independent marine surveyor designated by the Owner.

(f)
Redelivery – Certificates . The Charterer agrees that upon redelivery the Vessel will meet the complete requirements of, and be certificated at, RightShip 3-star level or any replacement thereof.

(g)
Redelivery – Access . Following the termination of this Charter in accordance with Section 17(b)(i) and during the last six (6) months of the Charter Term, the Charterer shall permit access to the Vessel at reasonable times to the Owner and to persons designated by the Owner, and shall permit the inspection of the Vessel by such persons.

(h)
Redelivery Inventory . The Charterer shall redeliver the Vessel with the same amount of unbroached provisions, paints, oils, ropes, spare parts and equipment, and other unused consumable stores as are on board and ashore at the commencement of the Charter Term as determined pursuant to the inventory conducted as part of the On-hire Survey. In the event consumable stores are greater at redelivery than at delivery, the Charterer may remove the excess. Notwithstanding any term or condition of the Time Charter, all bunkers and fuel oil onboard the Vessel at the time of redelivery shall remain the property of the Owner. Title to lubricants on board the Vessel at the time of redelivery shall be deemed to transfer to the Owner at the time of redelivery and the Owner shall not be obliged to pay for such lubricants.

(i)
Documentation . The Parties agree that on the Delivery Date, the Vessel shall be duly documented in the name of the Head Owner as owner thereof under the laws and flag of the Flag State. The Owner shall be responsible for such registration and the Charterer shall promptly provide all assistance required by the Owner for the purposes of such registration. The Charterer shall be responsible for naming the Vessel and for paying for initial Flag State documentation and maintaining such due documentation throughout the Charter Term, at the Charterer's own cost and expense, provided , the Owner agrees that the Owner will reasonably cooperate with the Charterer in establishing and maintaining such Flag State documentation. The Charterer shall also pay all the Flag State fees associated with initial documentation and any annual Flag State fees required to maintain documentation or the Head Owner's foreign maritime entity status. The Charterer shall not suffer or permit anything to be done which might injuriously affect the entitlement of the Vessel to be documented under the laws and regulations of the Flag State.
5.
Charter Hire .

(a)
Charter Hire .

(i)   Basic Charter Hire . The Charterer shall pay to the Owner charter hire for the Vessel during the Charter Term (" Basic Charter Hire "):

(1)
at the applicable rate per day set forth in Exhibit A, Part 1 hereto from and including the Delivery Date (" First Daily Charter Hire Rate ") on (y) each Charter Hire Payment Date until 7 November 2019; and (z) any other date as provided for under this Charter; and

(2)
at the applicable rate per day set forth in Exhibit A, Part 2 hereto from and including 7 November 2019 (" Second Daily Charter Hire Rate ") on (y) each Charter Hire Payment Date from and including 7 November 2019]; and (z) any other date as provided for under this Charter.
(the First Daily Charter Hire Rate and the Second Daily Charter Hire Rate, each a " Daily Charter Hire Rate ")
In the event that the Scrubber Amount (as such term is defined below) exceeds the Scrubber Cost (as such term is defined below) (the amount of such excess, the " Scrubber Excess ") and provided that the Charterer is not obliged under this Charter to pay any Scrubber Refund, or is otherwise in default under this Charter, then no later than the Charter Hire Payment Date immediately following 1 April 2020, the Owner shall calculate (and which calculation shall be binding on the Charterer absent manifest error) the amount by which the Second Daily Charter Hire Rate shall be reduced to reflect the Scrubber Excess (such revised rate, the " Revised Second Daily Charter Hire Rate ") and the Purchase Prices and Loss Values as set forth in Exhibit A-1 (such revised Purchase Prices and Loss Values, the " Revised PP & LV ") and provide revised Exhibits A and A-1. The Revised Second Daily Charter Hire Rate and the Revised PP & LV set out in such revised Exhibits A and A-1 shall be applicable from and including the Charter Hire Payment Date immediately following 1 April 2020, and from and including the Charter Hire Payment Date immediately following 1 April 2020, all references to the Second Daily Charter Hire Rate, Purchase Price and Loss Value shall be read and construed accordingly.
(ii)   Additional Hire . All amounts (other than Basic Charter Hire) to be paid by the Charterer to the Owner under this Charter, and all indemnities, fees, costs and other expenses whatsoever incurred by: (A) the Owner under, or in connection with, the Transaction Documents (or any of them) and the transactions contemplated thereby; and (B) by the Head Owner under, or in connection with, this Charter, the Bareboat Charter, the Multipartite Agreement and the transactions contemplated thereby, shall be deemed " Additional Hire ". Basic Charter Hire and Additional Hire are collectively called " Charter Hire ". For the purpose of this Charter, " Transaction Document " means each of this Charter, the Multipartite Agreement, the Guarantee, the Escrow Agreement, the Scrubber Supply Contract Assignment and the Cash Collateral Account Charge (as defined below).

(iii)   Partial Months . If the Charterer is required by the terms of this Charter to pay Charter Hire to the Owner on a date other than a Charter Hire Payment Date defined in Section 5(a)(iv) below, the Charter Hire payable for the period from the immediately preceding Charter Hire Payment Date through such date shall be payable at a daily rate equal to the applicable Daily Charter Hire Rate multiplied by the actual number of days for which Charter Hire is payable.
(iv)   Charter Hire Payments . Payments of Charter Hire shall be paid in United States currency to such account and in such manner as may be designated in writing by the Owner from time to time. Basic Charter Hire shall be paid monthly in arrears on the day numerically corresponding to the day of the Delivery Date occurring in each month during the Charter Term following the month in which the Delivery Date occurs (each, a " Charter Hire Payment Date ") ; and provided further that if the Charter Hire Payment Date does not fall on a day on which banks are open for business in London, New York, Athens and Geneva (a " Business Day "), the applicable Charter Hire Payment Date shall be the next following Business Day (unless that day would be in the next calendar month, in which case it shall fall on the preceding Business Day).
(v)   Default Interest . In the event that any Basic Charter Hire or Additional Hire payable by the Charterer is not paid on the due date thereof, interest shall accrue on such unpaid amount from and including the date that falls two (2) days after the due date of the unpaid amount to and excluding the date of payment thereof at the Default Rate (as defined below). Any such accrued interest shall be Additional Hire and shall be payable upon demand.
(vi)   Escrow Fees . The Owner and the Charterer agree that (notwithstanding the reference under the Escrow Agreement to joint and several liability of the Owner and the Charterer for the fees (and any taxes thereon) of the Escrow Bank payable pursuant to the Escrow Agreement) all fees (and / or any taxes thereon) payable to the Escrow Bank pursuant to the Escrow Agreement shall be paid in such proportions as follows: (i) one half (1/2) by the Owner; and (ii) one half (1/2) by the Charterer. If the Owner shall have paid any part of such fees (and/or any taxes thereon) on behalf of the Charterer, the Charterer shall promptly reimburse the Owner for the full amount of such fees (and / or any taxes thereon) payable by the Charterer in accordance with the previous sentence.

(b)
Hell or High Water Charter Obligation . This Charter may not be cancelled or terminated, except in accordance with the express provisions of this Charter and the Multipartite Agreement, for any reason whatsoever. The Charterer shall have no right to be released, relieved or discharged from any obligation or liability hereunder except as set forth in explicit provisions of this Charter. Except as hereinafter provided, the Charterer's obligation to pay Charter Hire hereunder shall be absolute during the term of this Charter irrespective of any contingency whatsoever, including, but not limited to (i) any set-off, counterclaim, recoupment, defense or other right which either Party may have against the other; (ii) any failure of the Vessel to meet the required condition of delivery under the MOA and/or any failure of the Vessel to meet any operational standards set forth in the MOA; (iii) any damage to, destruction or

taking of the Vessel, any requisition of use, any inability of the Vessel to trade in any particular trade, any temporary unavailability of the Vessel by reason of any damage to the Vessel, any lay-up of the Vessel, any failure of the Vessel to be duly documented in the Flag State, or any defect in the Owner's title to the Vessel; (iv) any failure on the part of any Party, whether with or without fault on its part, in performing or complying with any of the terms or covenants hereunder; (v) any insolvency, bankruptcy, reorganization, arrangement, readjustment of debt, dissolution, liquidation or similar proceeding by or against the Charterer or the Guarantor or any other person; (vi) any invalidity or unenforceability, or lack of due authorization of or defect in the execution, of this Charter; (vii) any War Risks; (viii) any event of force majeure or frustration; (ix) the installation of the Approved Scrubber on, or incorporation of the Approved Scrubber in, the Vessel or any other matter related to the Approved Scrubber; and (x) any other reason whatsoever. Nothing contained in this Section 5(b) shall be deemed to hinder or prevent the Charterer from pursuing any claim the Charterer may have against the Owner for damages for the Owner's breach of its express obligations under this Charter.
For the purposes of this Charter:
" Default Rate " shall mean, for any day, a rate of interest per annum equal to the lesser of (i) LIBOR in effect on such day plus eight and one-half percent (8.5 %) and (ii) the maximum rate permitted by applicable law.
" LIBOR " shall mean, as of any day, (i) the applicable 30-day London interbank offered rate per annum for deposits in U.S. Dollars appearing on Bloomberg LIBO Page as of 11:00 a.m., London time on such day for deposits in U.S. dollars or (ii) if such Bloomberg LIBO Page rate is not available at such time for any reason, or if the Bloomberg LIBO Page is not available, the applicable 30-day London interbank offered rate per annum for deposits in U.S. Dollars appearing on pages LIBOR01 or LIBOR02 of the Thomson Reuters screen (or any replacement Thomson Reuters page which displays that rate on the appropriate page of such other information service which publishes that rate from time to time in place of Thomson Reuters) as of 11:00 a.m., London time on such day for deposits in U.S. dollars. If such Thomson Reuters page or service ceases to be available or if such rate ceases to be available, the Owner may specify another page or service displaying the relevant rate or, as the case may be, a replacement rate after consultation with the Charterer. If LIBOR for any day determined pursuant to the preceding sentences is less than zero, LIBOR for that day shall be deemed to be zero.

(c)
Cash Collateral .
(i)   The Owner acknowledges that as and from the Delivery Date, due to agreements reached in the MOA, the Owner shall be in receipt of a security deposit from the Seller in an amount of United States Dollars One Million Six Hundred Thousand (US$1,600,000) (the " Cash Collateral Amount ") which shall act as security for the Charterer's due and punctual performance of its obligations under this Charter.

(ii)   The Owner agrees that it will promptly release in full the Cash Collateral Amount to an account (the " Cash Collateral Account ") of the Charterer with Joh. Berenberg, Gossler & Co. KG (or such other bank acceptable to the Owner (such acceptability in the Owner's sole discretion) (the " Account Bank ") following receipt of a written instruction from the Charterer to do so and PROVIDED ALWAYS that (A) such account is pledged in favour of the Owner on terms satisfactory to the Owner (such satisfaction in the Owner's sole discretion), as security for the due and punctual performance of the Charterer's obligations under, inter alia , this Charter, by an account pledge by the Charterer in favour of the Owner in the name of the Charterer (such account pledge, the " Cash Collateral Account Charge ") and that (B) the Charterer shall have delivered to the Account Bank a notification of pledges under the Cash Collateral Account Charge, such notification in form and substance acceptable to the Owner (such acceptability in the Owner's sole discretion); and (C) that the Account Bank has given to the Owner an acknowledgement of the pledges under the Cash Collateral Account Charge, such acknowledgement in form and substance acceptable to the Owner and the Account Bank (such acceptability in the Owner's and the Account Bank's sole discretion). Any fees and/ or bank charges of the Owner's bank or the Account Bank in connection with the payment to, or the holding in, the Cash Collateral Account of the Cash Collateral Amount shall be payable by the Charterer. If the Owner shall have paid any such fees and/or bank charges, the Charterer shall promptly reimburse the Owner for the full amount of such fees and bank charges.
For the purposes of this Charter:
" Charter Security " shall mean, together, the Cash Collateral Account Charge, the Guarantee, the Scrubber Supply Contract Assignment and any Additional Security (as defined in Section 17 (b)).
(iii)   If the Charterer is entitled to purchase the Vessel pursuant to the terms of clause 5.1 of the Multipartite Agreement and the Vessel is to be acquired by the Charterer pursuant to such terms, notwithstanding the terms of this Charter and any Charter Security, the Owner agrees to permit the release of the Cash Collateral Amount (less, where applicable, the Outstanding Balance (as defined in Section 17(c))) so that the same shall be applied directly in part payment of the Purchase Option Amount (as defined in the Multipartite Agreement) and within the time frames required for payment of the Purchase Option Amount as set out in the Multipartite Agreement, provided that such application shall only occur immediately after the Charterer pays that part of the Purchase Option Amount not funded from the Cash Collateral Amount.
6.
Use; Operations

(a)
Subject to the provisions of Section 6(e), the Charterer may operate the Vessel worldwide, provided: (i) the Charterer shall only use the Vessel in the territorial waters of nations which recognize the rights of vessels registered in the Flag State; (ii) the Vessel shall be used only in locations where the Vessel's operating specifications allow it to operate safely; (iii) the Vessel shall be employed only in lawful activities under the laws of the United States

and any authority having jurisdiction over the Vessel; and (iv) the Vessel shall always be operated within its technical capacities and certification, manufacturer's warranties, and within the limits of its insurance coverage.

(b)
The Charterer shall comply with and satisfy (and to the extent required, have on board certificates evidencing its compliance with) all provisions of any applicable law, treaty, convention, regulation, proclamation, rule or order applicable to the Vessel, its use, operation, maintenance, repair or condition, including, but not limited to, all applicable IMO rules and regulations, including all applicable sulfur emissions standards, any financial responsibilities imposed on the Charterer or the Vessel with respect to pollution by any state or nation or political subdivision thereof and shall maintain all certificates or other evidence of financial responsibility and a vessel spill response plan required under the United States law approved by the relevant authority and evidence of their approval by the appropriate United States government entity (including, but not limited to, the United States Coast Guard) as may otherwise be required by any such law, treaty, convention, regulation, proclamation, rule or order with respect to the operations and trading in which the Vessel is from time to time engaged.

(c)
The Charterer (including by its Vessel managers) shall have sole responsibility as owner and as technical and commercial operator under all Environmental Laws and under certificates of financial responsibility and vessel spill response plans.

(d)
Without prejudice to the generality of Section 6(b) above, the Charterer and the Vessel shall comply with all Environmental Laws including but not limited to the requirements of the United States Coast Guard (as amended from time to time)

(e)
The Charterer covenants and agrees that the Vessel will not (i) be chartered (or sub-chartered) to a Prohibited Person unless authorized under a specific license issued by the U.S. Treasury Department Office of Foreign Assets Control ("OFAC"), (ii) make voyages to or from any Prohibited Country unless authorized under a specific or general license issued by OFAC, or (iii) be allowed to carry any cargo from or destined to a Prohibited Country unless authorized under a specific or general license issued by OFAC.

(f)
The Charterer covenants and agrees that it will conduct its businesses and manage its properties (including, but not limited to, operation of the Vessel) in compliance with all applicable anti-money laundering laws, rules and regulations.

(g)
Scrubber .
(i)   The Charterer agrees to arrange for the Approved Scrubber to be installed on the Vessel during 2019 and by no later than 31 December 2019, such installation, and the operation of the Approved Scrubber as at the date on which the installation of the Approved Scrubber on the Vessel is completed, to be in full compliance with all Relevant Laws applicable as at the date on which the installation of the Approved Scrubber on the Vessel is completed and the requirements of this Charter. Notwithstanding any other

provision of this Charter to the contrary, following such installation and throughout the remainder of the Charter Term, the Approved Scrubber shall be maintained and operated by the Charterer in full compliance with all Relevant Laws applicable from time to time and in good running order, repair and condition in accordance with first class commercial ship management practices and in any event in a manner that a prudent ship owner of vessels similar in age, type, equipment (including exhaust emission abatement systems of a type similar to the Approved Scrubber) and trade to the Vessel (with, for the avoidance of doubt, the Approved Scrubber installed on board in accordance with this Charter) would. Following such installation, the Vessel shall be redelivered with the Approved Scrubber duly installed and maintained by the Charterer in full compliance with all Relevant Laws and this Charter.
(ii)   Promptly and in any event no later than five (5) days after any request by the Owner, the Charterer shall provide to the Owner any information or documents that the Owner may require as to the planned installation of the Approved Scrubber (including as to schedule), the progress of the installation of the Approved Scrubber and the installation and operation of the Approved Scrubber being in accordance with all requirements of this Charter, and all Relevant Laws.
(iii)   The Charterer shall procure that the Installer permits the Owner throughout the period during which the Approved Scrubber is being installed, to have up to two (2) representatives (at the Owner's cost) (and each of which representatives shall be acquainted with exhaust emission abatement system installation and operation) present at the Shipyard, to observe and survey installation of the Approved Scrubber. Such representatives shall also be entitled to attend surveys, shop tests and trials. The Charterer shall provide all necessary assistance, including in arranging for any permits or authorisations required, to enable the Owner's representatives to so attend and the Charterer shall procure that the Installer shall extend all facilities and resources (including all necessary information and access) to the Owner's representatives to enable them to perform their role effectively.
In the event that the Owner's representatives discover anything (including construction methods, materials and workmanship) which does not or will not, in the Owner's reasonable belief, conform to the requirements of any Scrubber Contract or the Scrubber Specifications, the Owner shall notify the Charterer in writing of such nonconformity, and the Charterer shall promptly give the Installer, or, as the case may be, the Manufacturer, a notice in writing as to such nonconformity in accordance with the relevant Scrubber Contract. The Charterer shall procure that the Installer and the Manufacturer comply with their obligations under the relevant Scrubber Contracts in respect of any such non-conformities, and the Charterer shall take all necessary steps to procure that the Approved Scrubber is, in any event, installed and operational on the Vessel in accordance with all Relevant Laws and the requirements of this Charter.
(iv)   No later than ten (10) days after the date on which the Owner receives from the Charterer evidence satisfactory to the Owner (such satisfaction in the Owner's sole discretion) as to:


(1)
the amount and correctness of any instalment paid by the Charterer under the Scrubber Supply Contract and evidence of the payment by the Charterer of such instalment, and subject to the Owner being satisfied (such satisfaction in the Owner's sole discretion) that the Approved Scrubber will be or, as the case may be, is, in full compliance with the requirements of this Charter and the Relevant Laws applicable as at the date on which the installation of the Approved Scrubber on the Vessel is completed, the Owner agrees to reimburse, or, as the case may be, procure that the Escrow Bank releases to, the Charterer for an amount equal to such instalment paid by the Charterer under the Scrubber Supply Contract (each such payment by the Owner to the Charterer under this Section 6(g)(iv)(1), a " Scrubber Supply Payment "); and

(2)
as to the payment by the Charterer of all amounts due and payable under the Scrubber Installation Contract and provided that (A) the Owner is satisfied (such satisfaction in the Owner's sole discretion) that the Approved Scrubber has been installed on the Vessel in full compliance with the requirements of this Charter and the Relevant Laws applicable as at the date on which the installation of the Approved Scrubber was completed and (B) that the Vessel has left the Shipyard, the Owner agrees to reimburse, or, as the case may be, procure that the Escrow Bank releases to, the Charterer for an amount equal to the amount paid by the Charterer under the Scrubber Installation Contract (the payment by the Owner to the Charterer under this Section 6(g)(iv)(2), the " Scrubber Installation Payment ").
(v)   Notwithstanding any other provision of this Charter, the aggregate total of the Scrubber Payments, (such aggregate total, the "Scrubber Cost") shall never exceed an amount equal to the Scrubber Amount less any Direct Payments.
(vi)   Notwithstanding any other provision of this Charter or the MOA:

(1)
the Owner shall be under no obligation to pay to the Charterer any sum in respect of the Approved Scrubber; and

(2)
the Charterer shall pay to the Owner, and the Owner shall have received in clear and immediately available funds, no later than 17 November 2019, an amount equal to the aggregate of all Scrubber Payments (such payment by the Charterer to be without set-off or deduction) (the " Scrubber Installation Refund "),

if, as at 7 November 2019, the installation of the Approved Scrubber has either not commenced, or, as the case may be, has commenced (the determination as to whether the installation of the Approved Scrubber has commenced shall be in the Owner's sole discretion) but the Owner determines (such determination in its sole discretion) that the installation of the Approved Scrubber will not be completed by 31 December 2019, that the Approved Scrubber will not be approved by the Classification Society, that the installation of the Approved Scrubber will not be approved by the Classification Society and / or that the Approved Scrubber will not be fully operational in accordance with all Relevant Laws applicable as at 7 November 2019 and all requirements of this Charter by 31 December 2019.
(vii)   Notwithstanding any other provision of this Charter or the MOA:

(1)
the Owner shall be under no obligation to pay to the Charterer any sum in respect of the Approved Scrubber; and

(2)
the Charterer shall pay to the Owner, and the Owner shall have received in clear and immediately available funds, no later than 14 January 2020, an amount equal to the aggregate of all Scrubber Payments (such payment by the Charterer to be without set-off or deduction) (the " Scrubber Completion Refund "),
if the Approved Scrubber is not fully installed, approved by the Classification Society and fully operational on the Vessel in accordance with all Relevant Laws applicable as at 31 December 2019 and all requirements of this Charter by 31 December 2019 (the determination as to whether the Approved Scrubber has been fully installed and / or is fully operational in accordance with all Relevant Laws and all requirements of this Charter shall be in the Owner's sole discretion).
(viii)   For the avoidance of doubt, the Parties agree that:

(1)
following its installation on the Vessel in accordance with this Charter, the Approved Scrubber shall, for all purposes of this Charter and the Multipartite Agreement, be deemed to be a Non-Severable Modification (as such term is defined in Section 8 (e)(i);

(2)
all fees and charges incurred by the Owner by reason of any Scrubber Payment shall be paid for by the Charterer;


(3)
notwithstanding any other provision of this Charter to the contrary, the Owner shall not be obliged to reimburse, or, as the case may be, cause the release by the Escrow Bank, to the Charterer any amount in respect of the Approved Scrubber until such time as:

a)
the Manufacturer shall have given to the Charterer, with copy to the Owner, a consent to assignment (such consent to be in the form and terms set out in Appendix H of the MOA or such other form and / or terms acceptable to the Owner (such acceptability in the Owner's sole discretion);

b)
the Charterer shall have delivered to the Manufacturer, with copy to the Owner, a notice of assignment in the form and on the terms appended at Part I of Schedule 1 to the Scrubber Supply Contract Assignment; and

c)
the Owner shall have received from the Manufacturer an acknowledgement of assignment in the form and on the terms appended at Part II of Schedule 1 to the Scrubber Supply Contract Assignment.

(4)
the Charterer shall not be entitled to install on the Vessel any exhaust emission abatement system which is not the Approved Scrubber; and

(5)
to the extent that the Scrubber Amount exceeds the Scrubber Cost, the excess shall be retained by the Owner.

(h)
The Owner acknowledges that as and from the Delivery Date, due to agreements reached in the MOA, the Owner shall be in receipt of a cash deposit from the Seller in an amount equal to the Scrubber Amount. The Owner agrees to release in full the Scrubber Amount to the Escrow Account provided that the Escrow Agreement shall have been entered into among the Owner, the Charterer and the Escrow Bank and that the Escrow Account shall have been opened by the Escrow Bank.
For the purposes of this Charter:
" Approved Scrubber " means the exhaust emission abatement system to be installed on the Vessel and approved in writing by the Owner and the Head Owner prior to its installation on the Vessel (such approval in the sole discretion of the Owner and the Head Owner), and as such system is more particularly described in the Scrubber Supply Contract.
" Direct Payment " means any payment that the Owner may make directly to the Installer, the Manufacturer or any other person (excluding, for these purposes only, the Head Owner)

pursuant to the Scrubber Supply Contract Assignment or otherwise in relation to the installation of the Approved Scrubber on the Vessel.
" Environmental Claim " means (a) enforcement, clean-up, removal or other governmental or regulatory action or orders or claims instituted or made pursuant to any Environmental Laws or resulting from a Spill; or (b) any claim, proceeding, formal notice or investigation by any other person in respect of any Environmental Law or relating to a Spill.
" Environmental Law " means all laws, regulations and conventions concerning pollution or protection of human health or the environment (including without limitation, the United States Oil Pollution Act of 1990, United States Comprehensive Environmental Responses, Compensation and Liability Act and any comparable United States federal laws or laws of the individual States of the United States of America).
" Government Authority " shall be construed to include the Flag State, the Classification Society, any other applicable classification societies and/or certifying authorities, the IMO and any supranational, international, national, regional, state, municipal, local or other government or organisation, including any subdivision, agency, board, department, commission or authority thereof, including any harbour, port, marine or administrative authority, or any quasi-governmental organisation therein having jurisdiction over the Owner, the Charterer, the Vessel (including the Approved Scrubber) and/or the area where the Vessel is operating , as the case may be, from time to time.
" Installer " means Yiu Lian Dockyards (Shekou) Limited, a company incorporated pursuant to the laws of the People's Republic of China and with an office at Yiu Lian Dockyards (Shekou) Wharfage, Mawan Avenue North, Qianhai, Nanshan District, Shenzhen, Guangdong, People's Republic of China.
" Manufacturer " means Hyundai Materials Corporation, a corporation organised and existing under the laws of Korea having its principal office at 9F Shin-An Bldg., 512,. Teheran-Ro, Gangnam-gu, Seoul 06179, Korea.
" Prohibited Country " means (a) any state, country or jurisdiction which is subject to any United Nations Security Council Resolution, European Union Decision, United States or United Kingdom or other applicable law which would have the effect of prohibiting the sale, lease, charter, or voyage of the Vessel to or from such country or otherwise cause the Head Owner, the Owner or the Charterer, to be in contravention of any applicable law to which such party is subject; (b) any country to which voyages are not covered under the insurances required to be maintained by the Charterer herein; or (c) any country which the Owner determines now or in the future due to a change in law or circumstances that voyages to such country would materially prejudice the Owner's ability to repossess the Vessel, or enforce the remedies or realize the benefit of the liens and rights established under this Charter. The Owner hereby designates Cuba, Iran, Syria, Sudan and North Korea as Prohibited Countries, as of the date of this Charter.
" Prohibited Person " means any individual or entity: (a) with whom the Head Owner or the Owner is prohibited or restricted in engaging in transactions or exporting goods or services to under applicable law; (b) who is a resident of, or organized under the laws of or doing business in any Prohibited Country; (c) who is designated on any United Nations Security Council Resolution or any European Union or United States or United Kingdom list, order, or other published designation of terrorists, narcotics traffickers, proliferators of weapons of

mass destruction or other lists of barred or restricted entities or individuals including without limitation the U.S. Treasury Specially Designated Nationals List.
" Relevant Law " means (a) any law, decree, constitution, regulation, requirement, rule, authorisation, judgment, injunction or other directive of a Government Authority; or (b) any treaty, pact or other agreement to which any Government Authority is a signatory or party; or (c) any judicial or administrative interpretation with binding characteristics, in each case, which is applicable to the Vessel, the Owner, the Charterer, and / or the area where the Vessel is operating from time to time, as the case may be.
" Scrubber Amount " has the meaning ascribed to it in the MOA.
" Scrubber Contract " means, as the case may be, the Scrubber Installation Contract or the Scrubber Supply Contract
" Scrubber Installation Contract " means the agreement entered into, or to be entered into, between the Charterer and the Installer pursuant to which, inter alia , the Installer has agreed to install on the Vessel the Approved Scrubber.
" Scrubber Payment " means, together, all Scrubber Supply Payments and the Scrubber Installation Payment.
" Scrubber Refund " means, as the case may be, any Scrubber Completion Refund or Scrubber Installation Refund.
" Scrubber Supply Contract " means the agreement dated 28 September 2018 and entered into between the Charterer and the Manufacturer pursuant to which, inter alia , the Manufacturer has agreed to supply to the Charterer the Approved Scrubber and to provide engineering support while the Approved Scrubber is being installed on the Vessel by the Installer, a true, correct and complete copy of which is attached at Exhibit D.
" Scrubber Supply Contract Assignment " has the meaning ascribed to it in the MOA.
" Scrubber Specifications " means the specifications of the Approved Scrubber set out in the Scrubber Supply Contract or such other specifications of the Approval Scrubber as may be approved in writing by the Owner and the Head Owner prior to the Approved Scrubber's installation on the Vessel (such approval in the sole discretion of the Owner and the Head Owner).
" Shipyard " means the Installer's Zhoushan shipyard or such other location for the installation of the Approved Scrubber on the Vessel by the Installer, such location as approved in writing by the Owner prior to commencement of the installation of the Approved Scrubber on the Vessel (such approval in the sole discretion of the Owner).
" Spill " means the leakage, spillage or discharge of oil or cargo.
7.
Maintenance and Operation .

(a)
Charterer's Control and Expenses . During the Charter Term, the Charterer shall have exclusive control of the Vessel and shall be solely responsible for the maintenance and operation of the Vessel and, subject to the terms of this Charter, will operate, navigate, man and victual the Vessel at its own cost and

expense. The Charterer shall pay all charges and expenses of every kind and nature whatsoever incident to the use and operation of the Vessel under this Charter throughout the Charter Term. Such costs and expenses shall include, but not be limited to, those relating to (w) customs duties, bonds, work permits, fees, licenses, clearances, pilotage fees, wharfage fees, canal fees and costs, or similar charges incurred in connection with the importation, exportation, operation or navigation of the Vessel by the Charterer, (x) maintaining all the Vessel's trading certificates necessary for its operations and all other certificates required by the Flag State (or other governmental agencies or regulatory authorities having jurisdiction over the Vessel (or the area where the Vessel is operating from time to time) including, if applicable, the United States Coast Guard), (y) maintaining the Vessel, the Vessel's machinery, appurtenances and spare parts in the condition required under Section 7(b) and the requirements of any applicable classification societies and other regulatory agencies having authority over the Vessel, and (z) supervision, management, victualing (including catering), supplies, parts service companies, port charges, dockage and wharfage, fuelling and lubrication.

(b)
Maintenance and Repairs . During the Charter Term, the Charterer, at its own cost and expense, will maintain the Vessel as necessary to keep the Vessel in class, clean, painted and in good running order, repair and condition in accordance with good commercial practices, and in any event, in a manner that a prudent ship owner of vessels similar in age, type and trade to the Vessel would do, so that the Vessel shall be, insofar as due diligence can make it so, tight, staunch, strong and well and sufficiently tackled, apparelled, furnished, equipped and in every respect seaworthy and in as good condition as when delivered hereunder, ordinary wear and tear excepted. In addition, the Charterer shall, at the earlier of the next dry docking of the Vessel or such earlier date as required by the Classification Society and / or the United States Coast Guard (as applicable and as the case may be) and at its own cost and expense, take all actions necessary to correct any Deficiencies. For the avoidance of doubt and notwithstanding any other term of this Charter, any and all costs and/or expenses whatsoever associated with satisfying and/or remedying any conditions or recommendations of class shall always be for the Charterer's account. During the Charter Term, the Charterer will provide and pay for all such repairs, replacement parts, labor and materials as shall be necessary to keep and maintain the Vessel in such condition. The Charterer additionally will maintain the Vessel's machinery in compliance with the requirements of any classification societies or regulatory agencies having authority over the Vessel and its equipment. Upon the written request of the Owner, the Charterer will inform the Owner of the location of the maintenance records for the Vessel which are not kept on the Vessel. The Charterer will notify the Owner and the Head Owner immediately of any accident involving the Vessel estimated to require repairs the cost of which will exceed United States Dollars Five Hundred Thousand (US$500,000). The Charterer shall also notify the Owner in advance of any drydocking of the Vessel required by any classification society or regulatory agency having jurisdiction over the Vessel. The Owner may, at its sole risk and expense (but at the Charterer's sole risk and expense if an Event of Default shall have occurred and be continuing) designate up to two persons to be present at any such drydocking,

and the Charterer shall cooperate with the Owner to provide such persons reasonable access to the Vessel while in drydock. The Charterer agrees to deliver to the Owner and the Head Owner annually at the Charterer's own cost and expense a certificate issued by the Classification Society confirming the Vessel remains in class.

(c)
Reports and Rights of Inspections . The Charterer will keep proper books of record and account in which full and correct entries will be made of all dealings or transactions of, or in relation to, the business and affairs of the Charterer respecting the Vessel in accordance with U.S. Generally Accepted Accounting Principles (" US GAAP ") consistently applied and on a consistent basis, and will furnish to the Owner or cause to be furnished to the Owner:
(i)   Financial Statements of the Guarantor and the Charterer . The Charterer will cause the Guarantor to deliver the consolidated profit and loss statements, reconciliation of retained earnings statements and consolidated statements of funds flow of the Guarantor and its consolidated subsidiaries, including the Charterer. The Charterer agrees to furnish to the Owner (x) within one hundred and eighty (180) days after the close of each fiscal year, beginning with the close of the fiscal year 2017, the year-end audited consolidated financial statements of the Guarantor including balance sheet and related profit and loss and surplus statements certified by its auditors; (y) within ninety (90) days after the close of each fiscal half year, the unaudited semi-annual financial statements of the Guarantor containing profit and loss statements and a balance sheet and certified by the Responsible Officer, subject to year-end audits for the Guarantor by the Guarantor's auditors and for the Charterer by the Charterer's auditors; and (z) such other financial information as the Owner may from time to time reasonably request relating to the financial condition of the Guarantor and the Charterer. Such financial statements shall be prepared in accordance with US GAAP, consistently applied on a consistent basis. For the purposes of this Section 7(c)(i), " Responsible Officer " shall mean an officer, the chief financial officer, treasurer, assistant treasurer or controller of the Guarantor.
(ii)   Inspection Rights – Vessel . Without unreasonably interfering with the trading, use and operation of the Vessel by the Charterer and on reasonable prior notice, the Owner or any persons designated by the Owner shall have the right at any reasonable time, but will be under no obligation, to inspect (and make extracts from) all records maintained by the Classification Society respecting the Vessel and to inspect the Vessel to ascertain its condition, to satisfy itself that the Vessel is being properly maintained and repaired, and to otherwise confirm that the Charterer is in compliance with this Charter; provided, that prior to any such inspection the persons inspecting the Vessel shall execute a release of the Charterer, releasing the Charterer from liability for any personal claims arising during such inspection of the Vessel. The cost of such inspection shall be borne by the Owner if no Event of Default shall have occurred and be continuing, and otherwise such cost shall be borne by the Charterer.
(iii)   Inspection Rights – Generally . The Charterer will, upon request, furnish to the Owner such information as the Owner may reasonably request with respect to the condition, maintenance or insurance of the Vessel
or its employment, position, use or operation and copies of any certificates or other documents relating to the Vessel or its condition or operation required to be in force under any applicable law or regulation, including, but not limited to copies of classification certificates and any certificates issued by the Flag State, and will permit the Owner or its representative at any reasonable time or times during normal business hours to inspect, audit and examine the books or records of the Vessel or of the Charterer relating to the condition, maintenance or insurance of the Vessel and to take extracts therefrom. The cost of any such inspection, audit, examination or copying shall be borne by the Owner if no Event of Default shall have occurred and be continuing, and otherwise such cost shall be borne by the Charterer.

(d)
Lay-up . The Charterer shall be responsible for laying the Vessel up in a safe and acceptable condition and location during such a time as the Vessel is not employed or seeking employment. During any such lay-up period, the Charterer shall ensure that the Vessel is adequately supervised and manned at all times. The costs and expenses in any way related to such lay-up or any reactivation shall be paid by the Charterer.
8.
Alterations .

(a)
Structural Modifications . The Charterer will not make any material structural or other changes (other than the installation of the Approved Scrubber, which installation shall be in accordance with this Charter, including Section 6 (g)) in the Vessel (a " Modification ") without the prior written consent of the Head Owner and the Owner, which consent of the Owner shall not be unreasonably withheld or delayed; provided that such Modification does not in the Owner's reasonable opinion diminish (i) the fair market value of the Vessel or (ii) the useful economic life of the Vessel. No repairs or maintenance to the Vessel required by Section 7(b) above or 8(d) below shall constitute a Modification for the purposes of this Section 8. For the avoidance of doubt, all Modifications will be made at the expense of the Charterer.

(b)
Alterations and Restoration . Subject to the maintenance provisions of this Charter, the Charterer may at any time alter or remove items of equipment, or may fit additional items of equipment required to render the Vessel available for a customer's purpose; provided the Charterer absorbs the cost and time of such alterations and the Charterer restores prior to redelivery of the Vessel any items so altered or removed as the case may be. Such changes shall not be made without the appropriate approval of the Classification Society and certifying authorities.

(c)
Replacements . The Charterer shall from time to time during the Charter Term, at its own cost and expense, replace such items of equipment on the Vessel as shall be so damaged or worn as to be unfit for use. Any replacement items of equipment, to the extent they replace items of equipment owned by the Owner or the Head Owner, shall without further action become property of the Owner or the Head Owner, as the case may be.

(d)
Required Modifications . Subject to Section 8(g) below, the Charterer, at its own cost and expense, shall make all Modifications required by any applicable law or required by any governmental agency having jurisdiction over the
Vessel, including, if applicable, the United States Coast Guard, or required by the Classification Society including, if applicable, the installation of a ballast water treatment system.

(e)
Title to Modifications . Title to each Modification shall vest as follows:
(i)   in the case of each Modification which cannot be readily removed from the Vessel without causing material diminishment to the value, utility or remaining useful life of the Vessel (a " Non-Severable Modification ")   whether or not the Owner shall have provided or arranged financing (in whole or in part) of the cost of such Modification, the Head Owner shall, without further act, effective on the date such Modification shall have been incorporated into the Vessel, acquire title to such Non-Severable Modification;
(ii)   in the case of each Modification which can be readily removed from the Vessel without causing material diminishment to the value, utility or remaining useful life of the Vessel (a " Severable Modification ") that is not required by applicable law or required by any governmental agency having jurisdiction over the Vessel or required by the Classification Society, the Charterer shall retain title to such Severable Modification;
(iii)   in the case of Severable Modifications required by applicable law or required by any governmental agency having jurisdiction over the Vessel or required by the Classification Society, title to such Modifications shall immediately vest in the Head Owner at no cost to the Head Owner and without further action by the Charterer; provided, however, that the Charterer shall take such actions as may be reasonably required by the Owner and/or the Head Owner to evidence the transfer of title.
Immediately upon title to a Modification vesting in the Head Owner pursuant to subparagraphs (i) or (iii) of this Section 8(e), such Modification shall, without further act, become subject to this Charter and be deemed part of the Vessel for all purposes of this Charter. Modifications, title to which remains in the Charterer pursuant to subparagraph (ii) of this Section 8(e), shall not be deemed a part of the Vessel.

(f)
Removal of Property . Subject to compliance, in all material respects, with applicable law and so long as no Event of Default shall have occurred and be continuing, the Charterer may remove any Severable Modification to which the Head Owner does not have title, and any other property to which the Charterer shall have title as provided in this Section 8, provided that the Charterer, at its own cost and expense and prior to the end of the Charter Term, shall repair any damage to the Vessel (or any part thereof) caused by such removal.

(g)
Contest of Requirements of Law . If, with respect to requirement of applicable law or governmental agency having jurisdiction over the Vessel or requirement of the Classification Society (i) the Charterer is contesting diligently and in good faith by appropriate proceedings such requirement or (ii) compliance with such requirement shall have been excused or exempted by a valid non-conforming use permit, waiver, extension or forbearance exempting the Charterer from such requirement or (iii) the Charterer shall be
making a good faith effort and shall be diligently taking the appropriate steps to comply with such requirement, then the failure by the Charterer to comply with such requirement shall not constitute an Event of Default hereunder; provided, however, that such contest or non-compliance does not involve (A) any danger of criminal liability being imposed on the Head Owner and/or the Owner or (B) any material risk of (1) the imminent arrest or sale of, or the creation of any lien (other than a Permitted Lien) on, the Vessel or (2) material civil liability being imposed on the Owner and/or the Head Owner. The Charterer agrees to give prompt written notice to the Owner in detail sufficient to enable the Owner and the Head Owner to ascertain whether such contest may have any material adverse effect of the type described in the above proviso.
9.
Insurance-General .
Subject to Section 23, below, the Charterer shall, at its own cost and expense, keep the Vessel (which, for the avoidance of doubt, includes the Approved Scrubber, once installed) insured against hull and machinery risks, protection and indemnity risks, pollution risks and war risks, in the forms and in the amounts (including deductibles) and with underwriters, companies or clubs, as are reasonably acceptable to the Owner and the Head Owner during the Charter Term or, where applicable, in such minimum amounts (including deductibles) as specified in this Charter. The Vessel's hull and machinery insurance will be in an amount not less than the greater of (x) the full commercial value of the Vessel and (y) the Loss Value (as set forth in Exhibit A-1 hereto) then in effect. The Charterer shall also keep the Vessel entered into a Protection and Indemnity Club ("P&I Club") that is a member of the International Association of Protection and Indemnity Clubs under standard P&I Club rules. Pollution liability coverage shall be not less than United States Dollars One Billion (US$1,000,000,000).  The Owner, Sumitomo Mitsui Banking Corporation (" Sumitomo ") and the Head Owner shall also each be a co-assured of the P&I Club in respect of the Vessel, and the Charterer agrees to pay or reimburse the Owner, Sumitomo and the Head Owner, respectively, the costs of such entry, including any premium, club calls or assessments in connection therewith. In addition, the Charterer shall, at its own cost and expense, place innocent owner's insurance, in form and in amount (including deductibles) and with underwriters, companies or clubs, as are reasonably acceptable to the Owner and/or the Head Owner (for the avoidance of doubt, such innocent owner's insurance to name both the Owner and the Head Owner) during the Charter Term and, if the Charterer is unable to place such innocent owner's insurance because insurance industry practice requires that the Owner or the Head Owner do so, the Owner or the Head Owner may place innocent owner's insurance, in form and in amount (including deductibles) and with underwriters, companies or clubs, as are reasonably acceptable to the Owner or the Head Owner during the Charter Term. If the Owner or the Head Owner places innocent owner's insurance in accordance with the foregoing, the Charterer agrees to pay or reimburse the Owner or the Head Owner, as applicable, the costs thereof, upon receipt of a demand accompanied by copies of the relevant invoices or other similar evidence of such costs.

(a)
Form of Insurance; Indemnity . All insurance required under this Section shall be in such form and with such underwriters, companies or clubs as the Owner and the Head Owner shall reasonably approve. All insurance contracts shall (i) provide that the insurer's right of subrogation against the Owner and/or
Sumitomo and/or the Head Owner shall be waived; (ii) provide that such insurance shall be primary and without right of contribution from any other insurance which is carried by the Owner and/or Sumitomo and/or the Head Owner; and (iii) be issued by underwriters or insurers with an A.M. Best Co. insurance rating upon issuance of the policy of "A-" (or higher), which underwriters or insurers may not be an affiliate of the Owner or Charterer or any sub-bareboat charterer. The Owner (and if applicable, the Owner's bank as mortgagee of the Vessel), Sumitomo and the Head Owner (and if applicable the Head Owner's bank as mortgagee of the Vessel), in the case of protection and indemnity coverage, shall be named as named assureds on all insurance required under this Section, but where commercially available without liability for premiums; and the Owner (and if applicable, the Owner's bank as mortgagee of the Vessel) and the Head Owner (and if applicable the Head Owner's bank as mortgagee of the Vessel) in respect of hull and machinery insurance, shall be named as additional named assured and the loss payee(s); provided, however, that unless an Event of Default shall have occurred and be continuing, the underwriters may pay any claims under such hull and machinery insurance not in excess of United States Dollars One Million (US$1,000,000) directly to the Charterer for the repair of the Vessel.
All policies shall provide that the Owner (and if applicable, the Owner's bank as mortgagee of the Vessel) and the Head Owner (and if applicable the Head Owner's bank as mortgagee of the Vessel) and the Charterer will be given at least fourteen (14) days' notice of cancellation, non-renewal or material alteration, or such shorter notice period (if any) as may be available under relevant market or standard insurance practice and/or terms, where such practice and/or terms do not provide for cancellation with such minimum fourteen (14) days' notice, or such shorter notice period (if any) as may be available under relevant market or standard insurance practice and/or terms, where such practice and/or terms do not provide for cancellation with such minimum fourteen (14) days' notice. Deductibles up to a maximum of United States Dollars Five Hundred Thousand (US$500,000) are permitted without the prior written consent of the Owner. Any deductibles (save for deductibles in respect of innocent owner's insurance) under such policies shall always be for the account of the Charterer. The Charterer agrees to indemnify and hold harmless the Owner and / or Sumitomo and/or the Head Owner (and if applicable the Head Owner's bank as mortgagee of the Vessel) from and against any liability imposed on or incurred by the Owner, Sumitomo and/or the Head Owner (and if applicable the Head Owner's bank as mortgagee of the Vessel) for any premiums, club calls or assessments with respect to any insurance required under this Section. For the avoidance of doubt, the Charterer's indemnification obligations under Section 18 shall, subject to Section 18, include (i) all Claims (as defined below) and (ii) any Claim made against the Head Owner, the Owner and / or Sumitomo by the underwriters of the insurance required under this Charter pursuant to rights of subrogation.

(b)
Proof of Insurance . The Charterer shall furnish the Owner and the Head Owner on the Delivery Date and, at such other times on request as soon as practically possible, and in any event at least annually, with copies of certificates of insurance (certificates of entry for Protection and Indemnity) evidencing all insurance policies and showing the Owner, Sumitomo and the
Head Owner as co-assureds on the Protection and Indemnity Insurance and the Owner and the Head Owner as loss payees (as set forth in the Attachments to Exhibit B hereto) on the hull & machinery coverage and cover notes or other documents evidencing the creation, renewal, amount and payment of the insurance maintained on the Vessel and for which period the insurance premiums are paid.

(c)
Forced Insurance . In the event the Charterer fails to procure and maintain insurance in accordance with this Section 9, the Owner and/or the Head Owner may, but shall not be obligated to, effect and maintain the insurance or entries in a P&I Club (including on behalf of Sumitomo) as required herein and to pay the premiums therefor and, upon the Owner's giving written notice and all relevant supporting invoices to the Charterer of the amounts of premiums and costs so incurred by either the Owner and/or the Head Owner, the Charterer shall reimburse the Owner and/or the Head Owner, as applicable, for such amounts, together with interest thereon from the date of payment by the Owner and/or the Head Owner to the date of reimbursement, at the Default Rate, not later than fifteen (15) days after such notice.

(d)
Termination Due To Loss . This Charter shall be terminated due to a total or constructive total loss or an agreed, arranged or compromised total loss of the Vessel as determined by underwriters (" Total Loss ") , and Charter Hire pursuant to Section 5 shall be payable until the date on which underwriters make a determination that the event occurred which gave rise to the Total Loss (the " Loss Termination Date "). Termination shall occur only upon payment of all amounts due under Section 9(e) below.

(e)
Payments in Event of Total Loss . In the event of Total Loss of the Vessel, the Owner, in lieu of any and all other claims and damages, shall receive from the Charterer, and the Charterer shall pay to the Owner, an amount equal to the sum of (i) any accrued and unpaid Charter Hire payable in accordance with Section 5 calculated through and, if applicable, including, the Loss Termination Date; (ii) the Loss Value of the Vessel as of the date on Exhibit A-1 hereto that immediately precedes the Loss Termination Date (or, if the Loss Termination Date is a Charter Hire Payment Date, the Loss Value of the Vessel as of such Loss Termination Date as set out in Exhibit A-1); provided , however , if the event that gives rise to a Total Loss of the Vessel occurs prior to the first date listed on Exhibit A-1, the Loss Value shall be the amount listed for the first date on such Exhibit A-1, (iii) interest on the amount referred to in Section 9(e)(ii) above from the Loss Termination Date until the date such amount is actually paid to, and received by, the Owner at the Total Loss Rate, and (iv) any Additional Hire then due and owing. The Charterer's obligation to pay amounts set forth in (i), (ii), (iii) and (iv) (the "Total Loss Payment") above shall be absolute and shall be due to the Owner upon the earlier of the Charterer's receipt of insurance proceeds and one hundred and ten (110) days following the Loss Termination Date. The Owner may, subject to the Charterer's consent, which consent shall not be unreasonably withheld, and at the Owner's own expense, place additional total loss only coverage. Any proceeds paid under such additional total loss only insurance shall be paid directly by insurers to the Owner and shall not be included in the calculation set forth above. The Charterer may place, at the Charterer's own cost and expense and as a separate policy from any insurances otherwise placed (or to
be placed) in accordance with this Charter, Increased Value insurance (subject to the Owner's prior consent, and subject to such Increased Value insurance in no way prejudicing in any way whatsoever the recovery by the Head Owner and/or the Owner of any amount that would otherwise be payable under any other insurances placed in accordance with this Charter), the proceeds of which shall be paid directly by insurers to the Charterer and shall not be included in the calculation set forth above.
The Owner agrees that to the extent that the Charterer pays the Total Loss Payment from its own funds the full net proceeds on a Total Loss of the insurances in respect of the Vessel and placed by the Charterer shall be for the account of and shall be paid or released directly to the Charterer. Further, in such circumstances, the Owner agrees to permit the release of the Cash Collateral Amount so that the same shall be applied directly in part payment of the Total Loss Payment, provided that such application shall only occur immediately after the Charterer pays that part of the Total Loss Payment not funded from the Cash Collateral Amount.
For the purposes of this Charter:
" Total Loss Rate " shall mean, for any day, a rate of interest per annum equal to the lesser of (i) LIBOR in effect on such day plus five percent (5 %) and (ii) the maximum rate permitted by applicable law.

(f)
Limitation of Liability . Nothing in this Charter shall be construed or held to deprive the Owner, Sumitomo, the Charterer or the Vessel of any right to claim limitation of liability against third parties (other than the Head Owner) provided by any applicable statute of any jurisdiction.

(g)
Wreck Removal . In the event the Vessel becomes a wreck or obstruction to navigation, the Charterer shall, if required by applicable law, remove such wreck or obstruction and shall indemnify the Owner and the Head Owner against any sums whatsoever which the Owner and the Head Owner shall become liable to pay or shall pay in consequence of the Vessel becoming a wreck or obstruction to navigation.

(h)
Requisition . In the event that the Vessel shall be requisitioned for hire, or otherwise taken by any governmental agency on the basis of a bareboat or time charter (other than a requisition of title or a taking which constitutes a Total Loss), during the Charter Term, the Charterer will continue to pay Charter Hire and will collect and retain the compensation, reimbursements or awards for such requisition, or other taking of the Vessel received. If the Owner receives the compensation, reimbursements or awards, then, provided no Event of Default shall have occurred and be continuing, the Owner agrees that it will turn over forthwith to the Charterer all compensation, reimbursements or awards for such requisition or other taking of the Vessel received by the Owner. For the avoidance of doubt, if the Owner receives the compensation, reimbursements or awards and an Event of Default shall have occurred and be continuing, then the compensation, reimbursements or awards shall be applied in accordance with Section 17.
10.
Liens .
(a)   Neither the Charterer nor any of its employees shall have any right, power or authority to create, incur or permit to be imposed upon the Vessel any lien whatsoever during the Charter Term, except for (i) crew's wages (including the master of the Vessel), or wages of stevedores when employed directly by the Charterer, any sub-charterer or the master or agent of the Vessel, (ii) damages arising out of maritime tort, (iii) general average and salvage (including contract salvage), (iv) liens for taxes not yet due (provided that the Charterer has established appropriate reserves for the payment of such taxes), (v) other maritime liens arising in the ordinary course of the Charterer's business provided, such other maritime liens shall be permitted only to the extent such amounts are not more than twenty five (25) days past due unless such amounts are being contested in good faith by appropriate legal proceedings diligently pursued and for which appropriate reserves are established, and (vi) any mortgage executed by the Owner and/or the Head Owner (collectively, " Permitted Liens "). The Charterer shall carry a copy of this Charter with the Vessel's papers, and on demand will exhibit the same to any person having business with the Vessel which might give rise to any lien thereon, other than liens for crew's wages, general average and salvage. The Charterer will place and keep prominently displayed in the chart room and the captain's cabin on the Vessel in a conspicuous place, a notice, framed under glass, printed in plain type of such size that the paragraph of reading material shall cover a reasonable space acceptable to the Owner reading as follows:
"THIS VESSEL IS OWNED BY CFT INVESTMENTS 1 LLC AND IS UNDER CHARTER TO CARGILL INTERNATIONAL SA PURSUANT TO THE TERMS OF THE BAREBOAT CHARTER AGREEMENT DATED 7 NOVEMBER 2018 (AS AMENDED AND SUPPLEMENTED FROM TIME TO TIME, THE "CHARTER") AND IS UNDER SUB-CHARTER TO CHAMPION MARINE CO. PURSUANT TO THE TERMS OF THE SUB-CHARTER DATED 7 NOVEMBER 2018 (AS AMENDED AND SUPPLEMENTED FROM TIME TO TIME, THE "SUB-CHARTER"). UNDER THE TERMS OF THE CHARTER, WHICH IS A FINANCING CHARTER PURSUANT TO A SUPPLEMENT TO BAREBOAT CHARTER AGREEMENT DATED AS OF 7 NOVEMBER 2018 (NEW YORK TIME) UNDER THE MARITIME LAWS OF THE REPUBLIC OF THE MARSHALL ISLANDS, AND THE SUB-CHARTER, NEITHER THE HEAD CHARTERER, THE SUB-CHARTERER NOR ANY OTHER SUB-CHARTERER, NOR THE MASTER, NOR ANY OTHER PERSON HAS THE RIGHT, POWER OR AUTHORITY TO CREATE, INCUR OR PERMIT TO BE PLACED OR IMPOSED UPON THIS VESSEL ANY LIEN WHATSOEVER OTHER THAN PERMITTED LIENS AS DEFINED IN THE CHARTER."
(b)   With respect to any claims and demands made by any person against the Owner or the Head Owner or the Vessel, except if the claim or demand has been brought about as a result of an action or omission of the Owner or the Head Owner (as the case may be), the Charterer hereby agrees as follows:
(i)   the Charterer shall warrant and defend title to and possession of the Vessel and every part thereof;
(ii)   the Charterer shall pay and discharge, and forthwith remove or cause to be removed, any lien (other than a Permitted Lien) which shall be filed against or otherwise attach to the Vessel; provided , however , that, subject to subsection (c) of this Section, the Charterer need not pay and discharge or remove any lien that is being contested by the Charterer in good faith by appropriate legal proceedings being diligently pursued, and with respect to which the Charterer has posted an appropriate bond with a good and sufficient surety, or has deposited in escrow with the Owner cash in the amount claimed by the holder of such lien, to secure the payment thereof.
(c)   Notwithstanding the foregoing provisions of this Section 10, if a libel shall be filed against the Vessel, or if the Vessel shall be seized, arrested, levied upon and taken into custody or detained in any proceeding in any court or tribunal or by any government or under colour of authority, the Charterer shall give notice to the Owner as soon as practicable but in any event not later than three (3) Business Days following such arrest and taking or detention and (except in connection with any taking or requisition of the title or use of the Vessel by any governmental authority or as a result of the wilful misconduct or gross negligence of the Owner) cause the Vessel to be released therefrom within forty five (45) days from the date of such seizure, arrest or detention, or within such lesser time as may be necessary to avoid prejudice to the interests of the Owner with respect to the Vessel. Without limiting the Charterer's obligations under Section 18 of this Charter, the Charterer shall hold harmless, defend and indemnify the Owner, the Head Owner and the Vessel from and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, suits, judgments, costs and expenses, including attorneys' fees, of whatsoever kind and nature, imposed on, incurred by or claimed against the Owner, the Head Owner or the Vessel, in any way relating to or arising out of the assertion of a lien against the Vessel, including, without limitation, a Permitted Lien (but excluding any lien claimed by any person claiming the same by, through or under the Owner including as a result of the wilful misconduct or gross negligence of the Owner or the Head Owner).
11.
Mortgages; Financing; Subordination .

(a)
The Charterer hereby agrees that should the Owner and/or the Head Owner wish to mortgage the Vessel or assign this Charter in connection with any financing arrangements of the Owner and/or the Head Owner, the Charterer shall agree to post notices of the mortgage and the Charter as reasonably required, execute such documents reasonably acknowledging the terms and existence of the mortgage, and the assignment of charter, and otherwise cooperate reasonably with the Owner and/or the Head Owner and any mortgagee in respect of such financing. Any such mortgage shall provide that the Charterer shall have the right of quiet enjoyment in its use of the Vessel so long as no Event of Default has occurred and is continuing under this Charter and further that such mortgage shall not impede (if applicable) any purchase option of the Charterer under the Multipartite Agreement (which will be confirmed in a separate letter of quiet enjoyment in favour of the Charterer), and that notice of any event of default under such mortgage shall be promptly given to the Charterer. Any reasonable costs and expenses associated with such activity will be borne by the Owner. Any mortgagee of the Vessel shall be qualified under applicable law and regulations to hold a mortgage on the Vessel without jeopardizing the Vessel's registration with the Flag State. Any additional insurance costs arising from or related
to any mortgage placed on the Vessel by the Owner and/or the Head Owner shall be the responsibility of the Owner.

(b)
The Charterer hereby agrees that its right to use the Vessel and other rights related thereto, shall, in all respects, be subject, subordinate and junior to the lien of any preferred mortgage or other security agreement created by the Owner and/or the Head Owner, and to the rights of the holder thereof, whether executed heretofore or hereafter (subject to the Charterer's rights of quiet enjoyment under this Section 11 and its further rights set forth in Sections 12 and 14). After notice of default in payment or performance under any such mortgage or security agreement, subject always to the Charterer's continued right of quiet enjoyment in its use of the Vessel, the Charterer may perform or pay Charter Hire for the Vessel to the holder of such security, and the same, to the extent of such payment, shall constitute payment of Charter Hire as if it had been made to the Owner.

(c)
The Owner agrees and confirms that, so long as no Event of Default hereunder has occurred and is continuing, the Charterer shall have exclusive possession, control, and quiet enjoyment in its use of the Vessel during the Charter Term, subject to the conditions of this Charter, without hindrance or molestation by the Owner, or any other person claiming by, through or under the Owner.
12.
End of Charter and Other Options .

(a)
On the last day of the Charter Term, unless an Event of Default or a failure to pay the whole or part of any Charter Hire on the due date thereof shall have occurred and be continuing, the Charterer shall purchase the Vessel for (v) the respective Purchase Price as set forth below in Section 12 (d) (w) Basic Charter Hire due through and including the date of purchase, (x) any applicable taxes (other than any taxes based upon or measured by the income of the Owner), (y) expenses of sale (including the Owner's and the Head Owner's reasonable counsel fees), and (z) any Additional Hire then due hereunder;

(b)
Subject to the terms and conditions of this Section 12, upon written notice from the Charterer to the Owner (with a copy to the Head Owner) setting forth the Charter Hire Payment Date on which the Charterer wishes to purchase the Vessel and pay to the Owner the Purchase Option Payment Amount (as such term is defined below) (the " Purchase Option Notice ") (such Purchase Option Notice to be given not less than one hundred and thirty (130) days prior to the Charter Hire Payment Date during the Charter Term on which the Charterer wishes to purchase the Vessel), the Charterer shall have the option to, unless an Event of Default or a failure to pay the whole or part of any Charter Hire on the due date thereof shall have occurred and be continuing, purchase the Vessel on the Charter Hire Payment Date set forth in the Purchase Option Notice for (v) the Purchase Price as set forth below in Section 12 (d) plus (w) Charter Hire due through and including the date of purchase (x) any applicable taxes (other than any taxes based upon or measured by the net income (however denominated) of the Owner) (y) expenses of sale (including the Owner's and the Head Owner's reasonable counsel fees), (z) the amount due under clause 109 of the Time Charter and (zz) either (i) plus any Arrangements Credit (as defined in Section 12(j)), or (ii) less any
Arrangements Debit (as defined in Section 12(j)). The aggregate total of (v), (w), (x), (y), (z) and (zz) the " Purchase Option Payment Amount ".

(c)
Not less than one hundred and seventy (170) days prior to the end of the Charter Term, the Charterer shall provide the Owner with irrevocable written confirmation of its purchase of the Vessel pursuant to Section 12(b). Should the Charterer fail to provide such confirmation or a notice pursuant to Section 12(b), the Charterer shall be obliged to purchase the Vessel in accordance with Section 12(a).

(d)
If the Charterer:
(i)   is obliged under this Charter to purchase the Vessel at the end of the Charter Term pursuant to Section 12(a); or
(ii)   elects to purchase the Vessel pursuant to Section 12(b),
the purchase price of the Vessel at the relevant time (being, in the case of Section 12 (d)(i), the end of the Charter Term, and, in the case of Section 12 (d)(ii), the Charter Hire Payment Date on which the Charterer purchases the Vessel in accordance with Section 12 (b)) (the " Purchase Price ") shall be as is set forth in the "Purchase Price" column of Exhibit A-1 of this Charter for the relevant time. In such circumstances, the Owner shall permit the release of the Cash Collateral Amount so that the same can be applied directly by the Charterer in part payment of the Purchase Price and within the time frames required for payment of the Purchase Price, provided that: (i) such permission and release shall only occur after the Owner has received in full (to the satisfaction of the Owner (such satisfaction in the Owner's sole discretion)) that part of the Purchase Price not funded from the Cash Collateral Amount; (ii) all liabilities of the Charterer under this Charter and the Multipartite Agreement shall have first been discharged in full to the satisfaction of the Owner (such satisfaction in the Owner's sole discretion).

(e)
ANY SALE OF THE VESSEL TO THE CHARTERER (OR AS THE CHARTERER MAY DIRECT, A NOMINEE) PURSUANT TO THIS SECTION 12 SHALL BE MADE WITHOUT ANY WARRANTIES BY THE OWNER OR THE HEAD OWNER WHATSOEVER, EITHER EXPRESS OR IMPLIED, EXCEPT THAT THE OWNER, OR, AS THE CASE MAY BE, THE HEAD OWNER, SHALL WARRANT THAT THE VESSEL IS FREE AND CLEAR OF ANY LIENS OR ENCUMBRANCES CREATED BY OR THROUGH THE OWNER, OR, AS THE CASE MAY BE, THE HEAD OWNER AND ITS PREDECESSORS IN TITLE EXCEPT FOR THE SELLER OR THE CHARTERER (OR ANY SUBSIDIARY OR AFFILIATE THEREOF) AND THAT THE OWNER, OR, AS THE CASE MAY BE, THE HEAD OWNER, IS TRANSFERRING WHATEVER TITLE IT ORIGINALLY RECEIVED. WITHOUT LIMITING THE FOREGOING, ANY SUCH SALE SHALL BE ON AN "AS IS, WHERE IS" BASIS WITH NO WARRANTIES, EITHER EXPRESS OR IMPLIED, AS TO TITLE (EXCEPT AS SET FORTH IN THE PREVIOUS SENTENCE) OR THE DESIGN, MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, SEAWORTHINESS OR CONDITION OF THE VESSEL, OR ELIGIBILITY OF THE VESSEL TO ENGAGE IN ANY PARTICULAR TRADE. ALL SUCH WARRANTIES SHALL BE EXPRESSLY WAIVED BY THE CHARTERER AT THE TIME OF SUCH SALE. ALL SALES, USE AND OTHER TAXES WHICH MAY BECOME DUE AS A RESULT OF THE SALE SHALL BE FOR THE SOLE ACCOUNT OF THE CHARTERER. UPON ITS RECEIPT IN GOOD COLLECTED FUNDS OF THE AMOUNT PAYABLE PURSUANT TO SECTION 12(A) OR, AS THE CASE MAY BE, SECTION 12(B), THE OWNER AGREES TO EXECUTE AND DELIVER PROMPTLY (OR, AS THE CASE MAY BE, PROCURE THAT THE HEAD OWNER EXECUTES AND DELIVERS) TO THE CHARTERER OR THE CHARTERER'S NOMINEE ANY AND ALL DOCUMENTS REQUIRED BY THE LAW OF THE FLAG STATE FOR THE PURPOSE OF RE-REGISTERING THE VESSEL IN THE NAME OF THE CHARTERER (OR AS THE CHARTERER MAY DIRECT), INCLUDING, WITHOUT LIMITATION, A BILL OF SALE COVERING THE VESSEL IN FAVOR OF THE CHARTERER (OR AS THE CHARTERER MAY DIRECT, A NOMINEE) TRANSFERRING WHATEVER TITLE THE OWNER, OR AS THE CASE MAY BE, THE HEAD OWNER, HAS, WITHOUT ANY REPRESENTATION OR WARRANTY WHATSOEVER EXCEPT AS SET OUT IN THIS SECTION 12(E).

(f)
For the purposes of establishing the Market Value (as such term is defined in Section 12(g) below) of the Vessel:
(A)   if the Charterer does not exercise its option under Section 12(b), then no later than ninety (90) days prior to the last day of the Charter Term; or
(B)   if the Charterer exercises its early purchase option under Section 12(b), then no later than five (5) days after the date of the Purchase Option Notice,
the Charterer and the Owner shall appoint a " Panel of Approved Brokers " in accordance with this Section 12(f):
(i)   Each of the Charterer and the Owner shall appoint an Approved Broker (as such term is defined below) to be included on the Panel of Approved Brokers, and the Approved Brokers so appointed by the Charterer and the Owner (each an " Appointed Broker ") shall jointly select a third Approved Broker (the " Third Broker " and subject to 12(f)(ii), below, the two Appointed Brokers together with the Third Broker, together constituting the Panel of Approved Brokers).
(ii)   In the event that either the Charterer or the Owner fails to appoint an Approved Broker on or before the date: in the case of (A) above, seventy (70) days prior to the last day of the Charter Term; or, in the case of (B) above, ten (10) days following the date on which the Purchase Option Notice is served, the Panel of Approved Brokers shall be comprised solely of the Approved Broker appointed by the Charterer or the Owner (as the case may be).
(iii)   Subject to Section 12(f)(iv), each of the Charterer and the Owner shall bear the cost and expense of their respective Appointed Broker, and the
costs and expenses of the Third Broker shall be borne equally by the Charterer and the Owner.
(iv)   In the event that that Panel of Approved Brokers is constituted of a single Approved Broker in accordance with Section 12(f)(ii) above, the costs and expenses of the valuation made by such Approved Broker shall be borne jointly by the Charterer and the Owner.

(g)
Subject to Section 12(f)(ii), each of the Charterer and the Owner shall instruct their respective Appointed Broker, and shall jointly instruct the Third Broker, to consider the market value of the Vessel:
(A)   if the Panel of Approved Brokers has been appointed pursuant to Section 12 (f)(A) on the date thirty (30) days prior to the last day of the Charter Term based on the then actual condition of the Vessel, on an arm's length basis and free of charters, and the average of the said valuations shall be the "Market Value" (as such term is used in this Section 12) and
(B)   if the Panel of Approved Brokers has been appointed pursuant to Section 12(f)(B) on the date twenty (20) days after the date of the Purchase Option Notice, based on the then actual condition of the Vessel, on an arm's length basis and free of charters, and the average of the said valuations shall be the "Market Value" (as such term is used in this Section 12).

(h)
In the event that the Market Value is greater than the Floor Price as set forth in the "Floor Price" Column of Exhibit A-1 of this Charter on:
(i) first Charter Hire Payment Date following the date of the Purchase Option Notice if the Charterer exercises its option under Section 12(b)); or
(ii) the last day of the Charter Term if the Charterer does not exercise its option under Section 12 (a),
then the Charterer shall be obliged to pay to the Owner an amount equal to twenty per cent (20%) of the difference between the Market Value and the Floor Price on, as applicable,
(A)   first Charter Hire Payment Date following the date of the Purchase Option Notice if the Charterer exercises its option under Section 12(b)); or
(B)   the last day of the Charter Term if the Charterer does not exercise its option under Section 12 (a),
(the " Profit Share Amount "). The Profit Share Amount shall become due and be paid concurrently with the amounts payable by the Charterer to the Owner pursuant to Section 12(a) or, as the case may be, Section 12(b), above, including, but not limited to, the Purchase Price. For the avoidance of doubt, the Profit Share Amount shall be calculated without regard to any Arrangements Credit or Arrangements Debit (as each term is defined in Section 12(j)) or to any amount due under clause 109 of the Time Charter.

(i)
For the purposes of this Section 12, the "Approved Brokers" shall be deemed to mean:
(1)   Arrow Shipbroking Group;
(2)   Braemar ACM Shipbroking;
(3)   Clarksons Platou;
(4)   Howe Robinson & Co. Ltd.;
(5)   Galbraith's Limited;
(6)   Simpson, Spence and Young; and
(7)   such other internationally recognised shipbrokers as may be mutually agreeable to both the Charterer and the Owner,
(and each of the Approved Brokers, an " Approved Broker ").

(j)
If the Charterer exercises its early purchase option under Section 12(b) or if the Owner, by written notice to the Charterer, declares the Charterer in default hereunder pursuant to Section 17 and the Event of Default in question is an Event of Default under the Bareboat Charter, and the Charterer is entitled to purchase the Vessel pursuant to the terms of clause 5 of the Multipartite Agreement and the Vessel is to be acquired by the Charterer pursuant to such terms, no later than three (3) Business Days before the date of transfer of ownership of the Vessel to the Charterer, the Owner shall notify the Charterer of such amount as the Owner certifies that, as a result of the exercise by the Charterer of its early purchase option under Section 12(b) or the exercise by the Charterer of its option in accordance with clause 5 of the Multipartite Agreement, the Owner shall either be: (i) in credit (" Arrangements Credit ") or (ii) in debit (" Arrangements Debit ") , as a result (including all the Owner's losses, damages, liabilities, expenses and costs incurred by the Owner in association therewith) of terminating, reversing or unwinding any interest rate swap arrangements from or with other persons (including, but not limited to, the Head Owner).

(k)
Unless and until all the applicable foregoing payments and performance set forth in this Section 12 have been made and/or performed in full by the Charterer, the Charterer's obligations under this Charter, including, without limitation, the obligation to pay Charter Hire for the Vessel, shall continue in full force and effect.
13.
Representations and Warranties; Owner Covenants .

(a)
Charterer's Representations . The Charterer represents, warrants, covenants, and agrees to and with the Owner that: (i) the Charterer is a company duly organized, validly existing, and in good standing under the laws of the Republic of the Marshall Islands, has the power to own its property and assets, and is duly qualified in each jurisdiction where the nature of its operations requires such qualification, (ii) the execution, delivery, and performance of this Charter are within the Charterer's power, have been duly authorized by all
necessary limited liability company action, do not contravene the Charterer's certificate of organization or regulations, or similar documents, or violate any judgment, order or decree applicable to the Charterer, and do not contravene any law, any order of any court or other agency of government, or any agreement or instrument or contractual restriction binding on or affecting any of its property, or constitute a default thereunder, and (iii) this Charter constitutes the legal, valid and binding obligation of the Charterer enforceable against the Charterer in accordance with its terms.

(b)
Owner's Representations and Covenants . The Owner represents, warrants, covenants, and agrees to and with the Charterer that (i) the Owner is a company organized, existing, and in good standing under the laws of Switzerland, (ii) the Owner has the requisite limited liability company power and authority to hold title to the Vessel and to enter into and carry out the transactions contemplated and to execute, deliver and perform under this Charter; (iii) the execution, delivery, and performance of this Charter do not contravene the provisions of the certificate of organization or regulations, or similar documents, of the Owner, or violate any judgment, order or decree applicable to the Owner or result in any violation of, or conflict with, or constitute a default under, or subject the Vessel to any lien of, any indenture, contract, agreement or other instrument applicable to the Owner, (iv) this Charter constitutes the legal, valid and binding obligation of the Owner enforceable against the Owner in accordance with its terms, and (v) the Owner will not create or permit to exist, any lien or encumbrance on or against the Vessel that arises out of the express action or omission of the Owner, other than a mortgage permitted under Section 11 (and the Owner will have sole responsibility for any such Mortgage).
14.
Assignment; Sub-bareboat Charter .
(a)   The Charterer does not have the right to, and shall not, assign, pledge, or hypothecate this Charter (by operation of law or otherwise), in whole or in part, or any interest herein, or any right, duty or obligation hereunder (collectively, an " Assignment ") without the prior written consent of the Owner, which consent is subject to the consent of the Head Owner, in their absolute discretion, and any purported Assignment without the Owner's prior written consent shall be void and unenforceable against the Owner. The Owner will exercise reasonable endeavours to obtain such consent from the Head Owner. The Charterer shall remain primarily liable under this Charter and the Guarantor will remain primarily liable under the Guarantee in the event of any permitted Assignment, which will in no event be considered a novation of this Charter unless the Owner expressly agrees to the contrary in writing.
(b)   Notwithstanding the foregoing, the Charterer agrees that it shall not further sub-bareboat or sub-time charter or otherwise let or charter the Vessel to any person without the prior written consent of the Owner and the Head Owner, except under the Time Charter. In the case of any permitted sub-bareboat charter of the Vessel, such sub-bareboat charter (i) shall state it is subject and subordinate to the rights of the Owner and the Head Owner hereunder, (ii) shall not contain any terms and conditions which would prevent the Charterer from fulfilling its obligations under this Charter, (iii) shall include an express prohibition against any further sub-bareboat charters without the prior written consent of the Owner and the Head Owner, and (iv) shall
contain an acknowledgement by the sub-bareboat charterer stating that it acknowledges the existence of this Charter and the Bareboat Charter and their priority over all of the terms of the sub-bareboat charter.
15.
Logo and Vessel Names .
The Owner agrees that the Charterer may display the Charterer's logo and the Charterer's designated name on the Vessel during the Charter Term. If the Owner retains ownership of the Vessel after the Charter Term, it agrees not to display the Charterer's logo. If the Owner sells the Vessel after the Charter Term it will require the purchaser to agree not to use the Charterer's name or logo in connection with the Vessel. Nothing in this Section 15 diminishes and/or releases the Charterer from its obligations under this Charter (including without limitation under the Charterer's obligations under Section 12).
16.
Notices .
All notices and other communications required under this Charter shall be by email, by personal delivery or by international courier service, to each Party at its address stated below or such other address as it may declare from time to time pursuant to this notice provision. Any such notice or communication shall be deemed effective on the date of delivery, if by personal delivery, or on the second Business Day after deposit with an international courier service (all delivery fees prepaid) if sent by international courier service. If sent by email or other electronic means, notices shall be effective upon the sender's receipt of an acknowledgement from the intended recipient (such as by the "return receipt requested" function, as available, return email or other written acknowledgement), provided, that if such notice or communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next Business Day for the recipient.
All notices and other communications to be sent to the Owner shall be sent by the Charterer as follows, unless the Owner shall give notice to the contrary:
Address:
Cargill International SA
14 chemin de Normandie
1206 Geneva, Switzerland
Tel: +41-22-703-2111
Email: George_wells@cargill.com
Ann_shazell@cargill.com
Bernd_Bachmann@cargill.com
Oliver_Handasydedick@cargill.com
Handy.trading@cargill.com
Olivier_Demierre@cargill.com
Otprojects@cargill.com
All notices and other communications to be sent to the Charterer shall be sent by the Owner as follows, unless the Charterer shall give notice to the contrary:
Address:
154 Vouliagmenis Avenue,
16674 Glyfada, Athens, Greece
Tel: +30 210 8913507
Email: snt@seanergy.gr
sgyftakis@seanergy.gr
finance@seanergy.gr
leagl@seanergy.gr
17.
Defaults; Remedies .

(a)
Events of Default . Any one or more of the following is an Event of Default (" Event of Default ") by the Charterer:
(i)   the Charterer shall fail to pay the whole or part of any Basic Charter Hire specified in Section 5 hereof on the due date thereof and such failure shall continue for five (5) Business Days following the due date thereof;
(ii)   the Charterer shall fail to pay when due the whole or any part of the Scrubber Refund, the Loss Value of the Vessel or the Profit Share Amount in accordance with the terms and conditions of this Charter and any such failure shall continue for three (3) Business Days following the due date thereof;
(iii)   the Charterer shall fail to carry and maintain insurance on or with respect to the Vessel in accordance with the provisions of Section 9 hereof;
(iv)   the Charterer shall fail to perform or comply with the covenants contained in Sections 4(h), 6(a) (with the exception of Section 6(a)(ii)), 10(c) or 14(a) or the Charterer shall fail to perform any of its obligations under Section 6(g)(iii);
(v)   the Charterer shall fail to perform or comply in any material respect with any other covenant, condition, or agreement to be performed or observed by it hereunder or under the Multipartite Agreement, and the Charterer shall fail to cure such failure to perform or comply within ten (10) Business Days after the Owner shall have demanded in writing the cure thereof;
(vi)   any material representation or warranty made by the Charterer herein or under the Multipartite Agreement or by the Guarantor in the Guarantee shall prove to have been incorrect in any material respect as of the date on which made, or any material statement, report, schedule, notice, certificate or other writing furnished by the Charterer or, as the case may be, the Guarantor to the Owner in connection with this Charter or under the
Multipartite Agreement or the Guarantee, as the case may be, shall prove to have been incorrect in any material respect as of the date on which the facts set forth therein are stated or certified, and, if in the reasonable opinion of the Owner such is capable of being cured, the Charterer or the Guarantor shall fail to cure such defect within seven (7) Business Days after the Owner shall have demanded in writing the cure thereof;
(vii)   the Charterer, and/or the Guarantor shall become insolvent or bankrupt or shall cease paying or providing for the payment of its debts generally; the Charterer and/or the Guarantor shall be dissolved, shall be adjudged a bankrupt by a court of competent jurisdiction, shall make a general assignment of all or substantially all of its assets for the benefit of its creditors, or shall lose its charter by forfeiture or otherwise; or a petition for an arrangement or for reorganization of the Charterer and /or the Guarantor under the bankruptcy laws of the relevant jurisdiction shall be filed by the Charterer and/or the Guarantor, or such petition shall be filed by creditors and the same shall be approved by a court of competent jurisdiction;
(viii)   an arrangement or reorganization of the Charterer and/or, the Guarantor under the bankruptcy laws of the relevant jurisdiction shall be approved by a court, whether proposed by a creditor, a stockholder or any other party or person whatsoever; or a receiver or receivers of any kind whatsoever, whether appointed in admiralty, bankruptcy, common law or equity proceedings, shall be appointed by a decree of a court of competent jurisdiction with respect to the Vessel or all or substantially all of the property of the Charterer and/or the Guarantor;
(ix)   (A) the Guarantor shall fail to pay when due the whole or any part of any amount payable by it under the Guarantee; or (B) the Guarantor shall fail to perform or comply in any material respect with any other covenant, condition or agreement to be performed or observed by it under the Guarantee; or (C) the Guarantor shall repudiate the Guarantee; or (D) a breach by the Guarantor of the Guarantee shall occur;
(x)   when the Cash Collateral Amount or any part thereof is held in the Cash Collateral Account and becomes due and payable to the Owner and the Account bank is in any way precluded from immediately releasing the due amount to the Owner and the Charterer fails to remedy the same or provide Additional Security within five (5) Business Days of the Owner's demand;
(xi)   if the Cash Collateral Account Charge, once created, ceases to be in full force and effect or ceases to be legal, valid, binding, enforceable or effective or is alleged by a party to it (other than the Owner) to be ineffective and the Charterer fails to remedy the same or provide Additional Security within five (5) Business Days of the Owner's demand;
(xii)   if the aggregate value of the Cash Collateral Amount held by the Account Bank or, where applicable the Owner, is at any time less than an amount equal to United States Dollars One Million Six Hundred Thousand (US$ 1,600,000) and the Charterer fails to remedy the same or to provide Additional Security within five (5) Business Days of the Owner's demand;
(xiii)   the Charterer fails to provide Additional Security (as defined at Section 17(b)(vii) below) within five (5) days of the Owner's request;
(xiv)   any Charter Security and/or Additional Security ceases to be in full force and effect or ceases to be legal, valid, binding, enforceable, or effective or is alleged by a party to it (other than the Owner) to be ineffective;
(xv)   the Charterer shall (A) enter into any transaction of merger or consolidation (unless the Charterer is the surviving entity thereof), (B) sell or transfer all, substantially all or any substantial portion of its assets to any other person or enter into a leveraged buyout, (C) dissolve, liquidate or cease or suspend the conduct of business, or cease to maintain its existence, or (D) change the form of organization of its business and such change either adversely affects the rights of the Owner or has the effect of modifying, lessening, impairing or altering in any away adverse to the Owner the duties and obligations of the Charterer hereunder;
(xvi)   a default shall occur with respect to any Debt owed by the Charterer or the Guarantor (as the case may be) to the Owner or any of its affiliates or to any third person in excess of United States Dollars Five Million (US$5,000,000), for which the Charterer or the Guarantor (as the case may be) fails to make any payment when due exceeding United States Dollars Five Hundred Thousand (US$500,000) or to perform any obligation thereunder, which default is not cured within any applicable grace period, and in any event within no more than twenty (20) Business Days;
(xvii)   without prejudice to Section 14(a) of this Charter, the Charterer shall assign and/or purport to assign any and/or all of its rights and/or interests in or arising under this Charter without having first received the prior written consent of the Owner in accordance with Section 14(a) of this Charter;
(xviii)   the Charterer or the Guarantor (as the case may be) shall fail to pay for more than thirty (30) days after it is due, any final, non-appealable judgment in excess of United States Dollars One Million (US$1,000,000) entered against the Charterer or the Guarantor (as the case may be) by any court having jurisdiction over the Charterer or the Guarantor (as the case may be) or the property of the Charterer or the Guarantor (as the case may be);
(xix)   the Charterer fails to pay to the Owner any amount due under clause 109 of the Time Charter;
(xx)   the Approved Scrubber is not fully installed and fully operational on the Vessel by 31 December 2019 to the satisfaction of the Owner (such satisfaction in the Owner's sole discretion) or the Approved Scrubber is installed but it is not in compliance with the Relevant Laws and/or this Charter;
(xxi)   at any time during the Owner's ownership of any of the Shares, the Guarantor's Common Stock ceases to be listed on the NASDAQ;
(xxii)   the Charterer shall fail to perform or comply in any material respect with any covenant, condition, or agreement to be performed or
observed by it under any Scrubber Contract, the Scrubber Supply Contract Assignment or the Cash Collateral Account Charge, and the Charterer shall fail to cure such failure to perform or comply within ten (10) Business Days after the Owner shall have demanded in writing the cure thereof; and
(xxiii) the Escrow Standing Amount or part thereof becomes due and payable to the Owner and the Owner's Bank is in any way precluded from immediately releasing the due amount to the Owner in accordance with the terms of the Escrow Agreement and such preclusion arises directly from any act and/or omission of the Charterer and / or the Seller.
For the purposes of this Section 17(a):
" Common Stock " means the common stock of the Guarantor, par value US$0.0001 per share.
" Debt " means as to any person at any time (without duplication): (i) all obligations of such person for borrowed money, (ii) all obligations of such person evidenced by bonds, notes, debentures, or other similar instruments, (iii) all obligations of such person to pay the deferred purchase price of property or services, except trade accounts payable of such person arising in the ordinary course of business which are not past due by more than ninety (90) days, (iv) all obligations of such person under any lease which, in conformity with US GAAP, is required to be capitalized for balance sheet purposes, (v) all obligations of such person under guaranties, endorsements (other than for collection or deposit in the ordinary course of business), assumptions or other contingent obligations, in respect of, or to purchase or otherwise acquire, any obligation or indebtedness of any other person, or any other obligation, contingent or otherwise, of such person directly or indirectly protecting the holder of any obligation or indebtedness of any other person against loss (whether by partnership arrangements, agreements to keep-well, to purchase assets, goods, securities, or services, to take-or-pay or otherwise), (vi) all obligations secured by a lien existing on property owned by such person, whether or not the obligations secured thereby have been assumed by such person or are non-recourse to the credit of such person, (vii) all reimbursement obligations of such person (whether contingent or otherwise) in respect of letters of credit, bankers' acceptances, surety or other bonds and similar instruments, (viii) all liabilities of such person in respect of unfunded vested benefits under any employee benefit plan, and (ix) any other liability of such person that is classified as debt under US GAAP.
" NASDAQ " means the Nasdaq Capital Market.
" Shares " means one million eight hundred thousand (1,800,000) shares of Common Stock.

(b)
Remedies . At any time that an Event of Default has occurred and is continuing, the Owner, by written notice to the Charterer, may declare the Charterer in default hereunder, in which case the Owner shall be entitled to pursue all remedies available at law or in equity or in admiralty, including, without limitation, the following remedies:
(i)   By notice to the Charterer, the Owner may terminate this Charter, whereupon the Charterer will redeliver the Vessel to the Owner within ten (10) Business Days of receipt of such notice in accordance with the provisions of Sections 4(b)-4(g) above.
(ii)   The Owner or the Head Owner may re-take the Vessel wherever found, whether upon the high seas or at any port, harbour or other place and irrespective of whether the Charterer, any sub-charterer or any other person is in possession of the Vessel, all without prior demand and without legal process, the Charterer HEREBY WAIVING ANY AND ALL RIGHTS TO PRIOR NOTICE AND A JUDICIAL HEARING WITH RESPECT TO THE REPOSSESSION OF THE VESSEL BY THE OWNER, and for that purpose the Owner or the Head Owner or their respective agents may enter upon any dock, pier or other premises where the Vessel is and may take possession thereof, without the Owner or its agent incurring any liability by reason of such re-taking, whether for the restoration of damage to property caused by such re-taking or for damages of any kind for any reason to the Charterer or any person claiming under the Charterer.
(iii)   Recover from the Charterer, in addition to any Basic Charter Hire or Additional Hire due up to the date of default, the Loss Value amount calculated as of the Charter Hire Payment Date preceding the date that the event which resulted in the Event of Default occurred, as liquidated damages for loss of a bargain and not as a penalty.
(iv)   The Owner or the Head Owner may sell or otherwise dispose of the Vessel at public auction or by private sale, without prior notice to the Charterer, at such time or times and upon such terms as the Owner or the Head Owner (as applicable) may determine, for cash or credit, at such price as the Owner or the Head Owner shall deem fair, with the Vessel in its then condition or following any commercially reasonable preparation, or otherwise dispose of, hold, use, lay-up, operate, charter to others the Vessel, in a commercially reasonable manner, all free and clear of any rights of the Charterer, including any right of redemption, and without any duty to account to the Charterer with respect to such action or inaction or for any proceeds with respect hereto; any disposition or holding of the Vessel shall not be deemed a retention by the Owner in satisfaction of the Charterer's obligations under this Charter. Nothing contained herein shall require the Owner to sell or charter the Vessel at any time or take any action in mitigation of the Owner's damages.
(v)   The Owner may, but shall not be required to, proceed by appropriate action for collection from the Charterer of all costs and expenses, including attorneys' fees, court costs, and other expenses, incurred by the Owner in connection with the enforcement of this Charter and the exercise of remedies hereunder. Further, in addition to any other amounts to which the Owner may be entitled, the Charterer shall be liable for all costs and expenses incurred by the Owner, which shall include all insurance premiums, all demurrage, dockage, and anchorage charges, all legal fees, and all other costs and expenses whatsoever incurred by the Owner by reason of the occurrence of an Event of Default or by reason of the exercise by the Owner of any remedy hereunder, including, without limitation, any cost or expense incurred by the Owner in connection with any re-taking of the Vessel or putting the Vessel in the condition required herein.
(vi)   The proceeds of any sale, charter or other disposition of the Vessel received by the Owner, if any, pursuant to this Section 17(b) shall be applied in the following order of priority:

(1)
to pay all of the Owner's and the Head Owner's costs, charges and expenses incurred in taking, moving, laying-up, holding, repairing, selling, chartering or otherwise disposing of the Vessel;

(2)
to the extent not previously paid by the Charterer, to pay the Owner all sums (including Loss Value as provided in Section 17(b)(iii) above) due by the Charterer under this Charter (including any amount due under clause 109 of the Time Charter) and any Swap Loss (as such term is defined in this Section 17(b);

(3)
to reimburse the Charterer for any Loss Value previously paid by the Charterer to the Owner in accordance with Section 17(b)(iii) above; and

(4)
any sums remaining shall be remitted to the Charterer.
The Charterer shall pay to the Owner any deficiency in (1) and (2) above.
(vii) If an Event of Default occurs in relation to the Charter Security or part thereof (as more particularly described at Section 17(a) (ix), (x), (xi), (xii) (xiii), (xiv), (xvi), (xviii) and/or (xxii) above), the Owner may (but shall not be obliged to) request the Charterer to provide, and in which case the Charterer shall be obliged to provide, such other additional security in form and substance reasonably satisfactory to the Owner which (in the opinion of the Owner) has a net realisable value (on an aggregate basis) equal to or greater than the applicable shortfall or deficiency in the Charter Security including, without limitation, a deposit of cash to such account as the Owner may nominate in an amount equivalent to the amount of any shortfall or deficiency in respect of the Charter Security (" Additional Security ").
(viii) The Owner may recover from the Charterer any amount due under clause 109 of the Time Charter.
(ix) The Owner may, in its sole discretion, release to the Owner the Cash Collateral Amount or any part thereof.
No remedy referred to in this Section 17(b) is intended to be exclusive, but each remedy shall be cumulative and in addition to, and may be exercised concurrently with, any other remedy which is referred to herein or which may otherwise be available to the Owner at law, in equity or in admiralty.
For the purposes of this Section 17 (b):
" Swap Loss " means the amount as the Owner certifies that, as a result of any sale, charter or other disposition of the Vessel pursuant to this Section 17(b), the Owner is in debit as a result (including all the Owner's losses, damages, liabilities, expenses and costs incurred by the
Owner in association therewith) of terminating, reversing or unwinding any interest rate swap arrangements from or with other persons (including, but not limited to, the Head Owner).

(c)
Multipartite . If the Owner, by written notice to the Charterer, declares the Charterer in default under this Charter pursuant to this Section 17 and the Event of Default in question is a Relevant Event of Default (as defined below), and the Charterer is entitled to purchase the Vessel pursuant to the terms of clause 5.1 of the Multipartite Agreement and the Vessel is to be acquired by the Charterer pursuant to such terms, then prior to the Charterer's purchase of the Vessel pursuant to the terms of clause 5.1 of the Multipartite Agreement the Charterer shall pay to the Owner (v) Charter Hire due through and including the date of purchase, (w) any applicable taxes (other than any taxes based upon or measured by the net income (however denominated) of the Owner), (x) expenses of sale (including the Owner's and the Head Owner's reasonable counsel fees), (y) the amount due under clause 109 of the Time Charter and (z) either (i) plus any Arrangements Credit (as defined in Section 12(j)), or (ii) less any Arrangements Debit (as defined in Section 12(j)) ((v), (w), (x), (y) and (z) together, the " Outstanding Balance "). For the purposes of this Charter, a " Relevant Event of Default " means an Event of Default under the Bareboat Charter which was caused in whole or in part by the act or omission of the Charterer.

(d)
In the event that the Owner receives a Default Notice (as such term is defined in the Multipartite Agreement) under the Multipartite Agreement, and provided that: (A) there is no Relevant Event of Default; (B) the Head Owner has transferred title to the Vessel to the Charterer (or its nominee, as the case may be) pursuant to clause 5.1 of the Multipartite Agreement; (C) no Event of Default under this Charter or a failure to pay the whole or part of any Charter Hire on the due date thereof shall have occurred and be continuing as at the time at which the Head Owner transferred title to the Vessel to the Charterer (or its nominee, as the case may be); and (D) the Owner has not given to the Head Owner a notice of the nature described in clause 5.2 of the Multipartite Agreement, then, no later than the date falling fourteen (14) days after the date on which the title to the Vessel was transferred by the Head Owner to the Charterer (or its nominee, as the case may be) the Owner agrees to permit the release from the Escrow Account to the Charterer of an amount equal to the balance (if any) of the Adjusted Funds (as such term is defined in the Escrow Agreement) in the Escrow Account as at the date on which title to the Vessel was transferred by the Head Owner to the Charterer (or its nominee, as the case may be).

(e)
Notwithstanding any other provision of this Charter, in the event that this Charter is terminated pursuant to the terms of clause 4.6 of the Multipartite Agreement, the Parties unconditionally and irrevocably agree that the following Sections shall survive (or as the case may be shall be deemed to survive) such termination of this Charter and are expressly made for the benefit of, and shall be enforceable by, the Owner, its successors and assigns: Section 16 (Notices); Section 17 (Defaults; Remedies); Section 19 (Income Tax); Section 20 (Law and Jurisdiction); Section 25 (Waiver); and Section 26 (No Remedy Exclusive).
18.
Indemnification, Withholding and Certain Agreements .

(a)
Owner's Indemnification of the Charterer . The Owner agrees to indemnify, defend, and hold harmless the Charterer from all damages or costs arising as a result of (i) the Owner's violation of any law or regulation of the jurisdiction in which the Owner is organized or maintains its principal office (other than a violation that would not have occurred but for the use, operation or presence of the Vessel or any part thereof in the relevant jurisdiction or the failure of the Charterer to perform its obligations under this Charter or any act or omission of the Charterer), (ii) the gross negligence or wilful misconduct of the Owner unless such gross negligence or wilful misconduct is imputed to the Owner as a result of any act or omission of the Charterer or any failure of the Charterer to perform its obligations under this Charter, or (iii) the failure of the Owner to pay any taxes which the Owner is required by law to pay.

(b)
Charterer's Indemnification of the Owner and the Head Owner . The Charterer hereby assumes liability for, and shall defend, indemnify and hold harmless the Indemnified Parties (for the purposes of this Section 18, " Indemnified Parties " means: the Owner, the Head Owner and any of their affiliates and any mortgagee of the Vessel, whose identity the Owner has notified the Charterer of, and each of their respective successors and assigns, and the directors, officers, employees, representatives, agents and servants of any of the foregoing, and each an " Indemnified Party ") from and against any and all Claims (as hereinafter defined) which may be imposed on, incurred by or asserted against any of the Indemnified Parties, the Vessel and/or the Approved Scrubber (in each case whether or not also indemnified against pursuant to any other agreement or by any other person), regardless of when asserted (whether after or during the Charter Term) and in any way relating to or arising out of any of the following: the documentation, registry, possession, use, operation, lay-up, chartering, subchartering, condition, maintenance, repair, and return of the Vessel and/or the Approved Scrubber, as applicable. Notwithstanding the foregoing, the Charterer shall not be obligated to indemnify any Indemnified Party in respect of any act or omission constituting gross negligence, wilful misconduct, fraud or a criminal act (other than a criminal act that would not have occurred but for the use, operation or presence of the Vessel or any part thereof in the relevant jurisdiction or the failure of the Charterer to perform its obligations under this Charter or but for any act or omission of the Charterer) by such Indemnified Party, or its agents or representatives. The Charterer agrees to further indemnify, defend and hold harmless each Indemnified Party and the Vessel from and against all liens created and imposed on the Vessel other than those caused by Owner's or, as the case may be, the Head Owner's own actions, and in the event of the seizure of the Vessel under legal process to enforce such lien or asserted lien, the Charterer shall secure the prompt release of the Vessel by payment of same or otherwise as may be appropriate. The Owner's right to Charter Hire as provided for in Section 5 of this Charter shall not be suspended during any time when the Vessel is under seizure by legal process as a result of such liens or asserted liens. As used herein, "Claims" shall mean any and all liabilities, obligations, losses, damages, penalties, claims, actions, suits, costs, expenses, fines, penalties and disbursements (including, without limitation, reasonable attorneys' fees, litigation expenses and investigatory fees and disbursements)
of whatsoever kind and nature, including, without limitation, (i) claims or penalties arising from any violation of the laws or regulations of any authority or country or political subdivision thereof, (ii) claims as the result of latent, patent or other defects, whether or not discoverable by the Owner, the Head Owner or the Charterer, (iii) Environmental Claims and (iv) tort claims of any kind, including, without limitation, claims for injury or damage caused by leakage, discharge or spillage of oil or cargo, refuse or any hazardous substance, but excluding Taxes (as such term is defined in Section 18 (c) below).
Charterer's Withholding . Notwithstanding anything herein or in the Bareboat Charter to the contrary, the Charterer hereby covenants and agrees that it shall make all payments of Charter Hire and other amounts payable by the Charterer under this Charter to the Owner or any Indemnified Party or any Tax Indemnitee (for the purposes of this Section 18, " Tax Indemnitee " means any of: the Owner and each of its affiliates that is included with the Owner in a consolidated, combined, unitary or other group Tax return) free and clear from, and without deduction or withholding of or by reason of, any taxes (including income, gross receipts, sales or use taxes), money transfer fees or other charges or withholdings of any nature whatsoever except to the extent that deduction or withholding of any Tax (for the purposes of this Section 18, " Tax " means , all taxes (including income taxes, gross receipts taxes, sales taxes, use taxes, value added taxes, ad valorem taxes and other taxes), fees, duties, charges, assessments, and withholdings of whatever nature, imposed, assessed, levied or asserted by any governmental authority or other taxing authority (and any and all penalties, fines, interest and other charges relating thereto)) is required by law, in which event the Charterer shall (i) notify the person entitled to receive the payment (the " Payee ") of such requirement, (ii) make such deduction or withholding, (iii) if such Tax is an Indemnified Tax (as defined in Section 18(g)), pay on an after-Tax basis pursuant to Section 18(f) such additional amount as is necessary so that the Payee receives, after such deduction or withholding (including any deduction or withholding with respect to such additional amount) an amount equal to the amount that the Payee would have received if such deduction or withholding had not been made, (iv) pay the full amount deducted or withheld to the appropriate taxing authority in accordance with applicable law, and (v) deliver to the Payee promptly after making such payment an original receipt (or certified copy thereof) or other evidence reasonably satisfactory to the Payee evidencing payment of the tax withheld to the appropriate taxing authority.
Each payment or indemnity payable by the Charterer to or for the benefit of an Indemnified Party or a Tax Indemnitee pursuant to this Section 18 shall be paid on an after-Tax basis, which means that the Charterer must pay, in addition to such payment or indemnity, such additional amount or amounts as will, in the reasonable good faith determination of such Indemnified Party or Tax Indemnitee, leave such Indemnified Party or Tax Indemnitee and its affiliates (if any) in the same economic position as they would be in if such payment or indemnity were not subject to taxation, taking into account any Tax costs resulting from the such Indemnified Party's or Tax Indemnitee's actual or constructive receipt or accrual of the Charterer's payment or indemnity and any Tax saving realized by such Indemnified Party or Tax
Indemnitee and its affiliates (if any) as a result of the allowance of any Tax credit, deduction or other Tax benefit for the Tax, liability or expense incurred by such Indemnified Party or Tax Indemnitee that gave rise to the Charterer's obligation to pay such payment or indemnity pursuant to this Section 18.

(g)
For the purposes of this Section 18, an " Indemnified Tax " means all Taxes, regardless of how or when such Taxes are imposed, incurred or asserted (whether imposed on, incurred by or asserted against the Vessel or the Owner or the Charterer or otherwise) arising out of, in connection with or otherwise relating to the Vessel or this Charter or any of the transactions contemplated in or done pursuant to this Charter (including the Owner's chartering of the Vessel from the Head Owner, and chartering of the Vessel during the term of this Charter), provided that the Charterer shall have no obligation under this Section 18 to indemnify a Tax Indemnitee for the following Taxes (" Excluded Taxes ") :
(i)   any Tax imposed on or calculated by reference to the overall net income, overall gross income, overall profits, overall gains, capital or net worth of such Tax Indemnitee, provided that the exclusion in this Section 18 (g) (i) shall not apply to any Tax to the extent such Tax would not have been payable in the absence of the documentation, registry, delivery, use, presence or other connection of the Vessel or any part thereof or with, or any act or omission or other connection of the Charterer or any affiliate, agent, representative or contractor of the Charterer or any other person (other than the Owner, unless an Event of Default is continuing) using or having possession, custody or control of the Vessel or any part thereof in or with, the jurisdiction imposing such Tax;
(ii)   any ad valorem Tax assessed on or with respect to the Vessel arising from the presence of the Vessel in the jurisdiction imposing the Tax after the Charterer has redelivered the Vessel to the Owner in accordance with the provisions of this Charter and has performed all of its obligations under the Charter, unless the Vessel is redelivered as a result of the occurrence of an Event of Default;
(iii)   any Tax imposed on or with respect to any sale or other transfer by the Owner of any of the Owner's interest in the Vessel or the Charter to any person other than the Charterer, provided that the exclusion in this Section 18 (g)(iii) shall not apply to any such sale or transfer that occurs (1) in connection with or as a result of an Event of Default, a Total Loss, or any maintenance, repair, overhaul, pooling, interchange, exchange, removal, replacement, substitution, modification, improvement, or alteration of the Vessel or any part thereof or (2) at the Charterer's request or (3) pursuant to a requirement in this Charter;
(iv)   any Tax to the extent resulting from any act or event occurring after the Charterer has returned the Vessel and all Technical Documents to the Owner in compliance with the terms of this Charter and has performed all its obligations under this Charter (the " Return Compliance Time ") , provided that the exclusion in this Section 18 (g) (iv) shall not apply to any Tax that (1) arises from any act, event or circumstance (or relates to any period of time)
occurring at or before the Return Compliance Time or (2) is imposed with respect to any payment by the Charterer pursuant to Charter or (3) is incurred in connection with the exercise of any rights or remedies of the Owner after the occurrence of an Event of Default;
(v)   any Tax if and to the extent that such Tax would be payable by such Tax Indemnitee in the absence of the transactions contemplated in this Charter;
(vi)   any Tax if and to the extent that such Tax is caused by, and would not be payable but for, (1) any gross negligence, willful misconduct or fraud of such Tax Indemnitee or (2) the inaccuracy or breach of any representation, warranty or covenant of the Owner in this Charter.

(c)
Proof of Payment – Taxes . Promptly upon the written request of the Owner, the Charterer shall provide to the Owner copies of all documentation and proof of payment of any Taxes.

(d)
Survival . The obligations of the Owner and the Charterer under this Section 18 shall survive the expiration or earlier termination or cancellation of this Charter and are expressly made for the benefit of, and shall be enforceable by, the party to which the obligations are owed, and its successors and assigns.

(e)
No Limitation . Except as otherwise limited herein, it is the intent of the Parties that all indemnity obligations or liabilities assumed by the Parties under this Charter be without limit and without regard to the cause or causes thereof (including pre-existing conditions), the unseaworthiness of any vessel, strict liability or the negligence of any party or parties, whether such negligence be sole, joint or concurrent, active or passive.

(f)
Consequential Damages . Neither Party shall be liable to the other Party for any consequential or special damages, arising out of, resulting from or relating in any way to this Charter, irrespective of the negligence or fault of any party.
19.
Income Tax
The Charterer agrees to take no tax position inconsistent with the fact that the Owner is the owner of the Vessel for tax purposes.
20.
Law and Jurisdiction

(a)
Governing Law . This Charter is governed by and interpreted in accordance with the general maritime laws of the United States and, to the extent they are not applicable, the internal laws of the State of New York (without regard to New York's conflict of laws provisions).

(b)
Venue . All judicial actions by any party to enforce any provision of this Charter shall, if requested by the Owner, be brought in the United States District Court for the Southern District of New York or the state court of
general jurisdiction sitting in the County of New York in the State of New York. Each party consents to the jurisdiction of such courts and hereby irrevocably waives any objection, including any objection to the laying of venue or based on the grounds of forum non-conveniens, which it may now or hereafter have to the bringing of any such action or proceedings in such court.

(c)
JURY TRIAL WAIVER. EACH PARTY HEREBY WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY JURY TO EVERY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND ARISING OUT OF OR RELATED TO THIS CHARTER.

(d)
Service of Process . Service of process may be made on the Charterer or the Guarantor by mailing or delivering a copy of such process to the Charterer c/o the Guarantor at the Guarantor's address listed below (with a copy to the Charterer at its address identified in or in accordance with Section 16), or to any new address of the Guarantor of which the Owner has been notified by the Charterer.  The Charterer hereby irrevocably authorises and directs the Guarantor to accept such service on its behalf at such address. As an alternative method of service, the Charterer also irrevocably consents to the service of any and all process, postage prepaid, in any such action or proceeding by mailing a copy of such process to the Guarantor with a copy to the Charterer at its address identified in or in accordance with Section 16. Nothing herein shall affect the right to effect service of process in any other manner permitted by law.
Guarantor's address:
Seanergy Maritime Holdings Corp.
c/o Seanergy Management Corp.
154 Vouliagmenis Avenue,
16674 Glyfada, Athens, Greece
Service of process may be made on the Owner by mailing or delivering a copy of such process to the Owner at the Owner's address identified in or in accordance with Section 16.
21.
Salvage .
All salvage and towage performed by the Vessel shall be for the Charterer's benefit and the cost of repairing damage occasioned thereby shall be borne by the Charterer.
22.
War .
(a)   For the purpose of this Charter, the words "War Risks" shall include any war (whether actual or threatened), act of war, civil war, hostilities, revolution, rebellion, civil commotion, warlike operations, the laying of mines (whether actual or reported), acts of piracy, acts of terrorists, acts of hostility or malicious damage, blockades (whether imposed against all vessels or imposed selectively against vessels of certain flags or ownership, or against certain cargoes or crews or otherwise howsoever), by any person, body, terrorist, pirate or political group, or the government of any state whatsoever, which may be dangerous or are likely to be or to become dangerous to the Vessel, her cargo, crew or other persons on board the Vessel.

(b)
The Charterer shall have the liberty:
(i)   to comply with all orders, directions, recommendations or advice as to departure, arrival routes, sailing in convoy, ports of call, stoppages, destinations, discharge of cargo, delivery, or in any other way whatsoever, which are given by the government of the Flag State, or any other government, body or group whatsoever acting with the power to compel compliance with their orders or directions;
(ii)   to comply with the orders, directions or recommendations of any war risks underwriters who have the authority to give the same under the terms of the war risks insurance;
(iii)   to comply with the terms of any resolution of the Security Council of the United Nations, any directives of the European Union, the effective orders of any other supranational body which has the right to issue and given the same, and with national laws aimed at enforcing the same to which the Owner or the Charterer are subject, and to obey the orders and directions of those who are charged with their enforcement.
23.
Assignment of Insurances .

(a)
Collateral . In order to secure all obligations of the Charterer owing to the Owner under this Charter, the Charterer hereby assigns to the Head Owner with first priority and to the Owner with second priority, all of the Charterer's right, title and interest in and to all policies and contracts of insurance, including, without limitation, all entries in any protection and indemnity or war risks association or club, which are from time to time taken out in respect of the Vessel, her hull, machinery, freight, disbursements, profits or otherwise, and all the benefits thereof, including, without limitation, all claims of whatsoever nature arising under such policies, as well as all amounts due from underwriters under any such insurance whether as payment of losses, or as return premiums, or otherwise (collectively, the "Insurances"), and any proceeds of any of the foregoing. No later than the Delivery Date the Charterer shall give each underwriter notice of the assignment of insurances contained herein in the form and terms attached as Exhibit B to this Charter (or in such other form and terms as the Owner may reasonably require) and procure that the loss payable clauses as attached to Exhibit B to this Charter (or loss payable clauses otherwise in a form and terms satisfactory to the Owner and the Head Owner) shall have been duly endorsed on the insurances.

(b)
No Obligation to Perform . The Charterer hereby agrees and covenants that, notwithstanding the provisions of this Section 23, neither the Owner nor the Head Owner shall have any of the Charterer's obligations under any Insurances.
24.
Change of Ownership .
The Charterer acknowledges and agrees that the Head Owner may transfer its ownership of the Vessel to another entity during the term of this Charter.
Following the receipt by the Charterer of a notice from the Owner stating that the Head Owner intends to transfer the ownership of the Vessel to another entity (the "Transferee") as of the date of the transfer set forth in such notice, (i) reference to 'the Head Owner' in Section 9 and Section 23 of this Charter shall be deemed to refer to the Transferee (ii) as of such date of transfer, the Charterer shall procure that the insurances over the Vessel are updated to reflect the Transferee's ownership of the Vessel and (iii) as of such date of transfer, the Charterer shall provide updated notices of assignment of insurances and loss payable clauses to each underwriter substantially in the form attached at Exhibit B to this Charter (or otherwise in a form and terms satisfactory to the Owner and the Transferee) logically amended to show the Transferee as the 'the Owner'.
25.
Waiver . No waiver by either Party of any breach by the other of any obligation, agreement or covenant hereunder shall be deemed to be a waiver of that or any subsequent breach of the same or any other covenant, agreement or obligation nor shall any forbearance by any Party to seek a remedy for any breach by the other Party may be deemed a waiver by such Party of its rights or remedies with respect to such breach, unless such waiver is in each case in writing duly executed by such Party.
26.
No Remedy Exclusive . Each and every right, power and remedy given to the Owner in this Charter shall be cumulative and in addition to every other right, power and remedy herein or therein given now or hereafter existing at law, in equity, in admiralty, by statute or otherwise. Each and every right, power and remedy whether given therein or otherwise existing may be exercised from time to time as often and in such order as may be determined by the Owner, and neither the failure or delay in exercising any power or right nor the exercise or partial exercise of any right, power or remedy shall be construed to be a waiver of or acquiescence in any default therein; nor shall the acceptance of any security or of any payment of or on account of any loan, promissory note, advance, obligation, expense, interest or fees maturing after an Event of Default or of any payment on account of any past default shall be construed to be a waiver of any right to take advantage of any future default or of any past default not completely cured thereby.
27.
Entire Agreement; Amendment . This Charter and its exhibits and schedules constitute the entire agreement between the Parties relating to the subject matter of this Charter and supersedes all prior agreements and undertakings of the Parties, whether oral or written, in connection herewith. No amendment of this Charter shall be valid unless made in writing and signed by each of the Parties and consented to by the Head Owner.
28.
Counterparts . This Charter may be executed in one or more counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument. It is the express intent of the Parties to be bound by the exchange of signatures on this Charter via Portable Document Format (PDF), which the Parties agree shall constitute an original writing for all legal purposes.
29.
Severability . The Owner and the Charterer agree that with respect to any specific provision of this Charter that is held by any court or other constituted legal authority to be void or otherwise unenforceable in any particular manner, the Parties consider and permit this Charter to be amended in such manner as may be required in order to cause said provision and all other terms of this Charter to remain binding and enforceable against the Owner and the Charterer.
30.
Captions . The captions in this Charter are for convenience and reference only and shall not define or limit any of the terms or provisions, or otherwise affect the construction, of this Charter.
31.
Binding Effect . Subject to Section 14, this Charter shall be binding upon, inure to the benefit of, and be enforceable by the Parties and their respective successors and assigns.
32.
Interpretation . References to "Sections" in this Charter are sections of this Charter. The words "include(s)" and "including" shall be construed as being followed by the words "without limitation".



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IN WITNESS WHEREOF, the Parties have executed this Charter as of the date first written above.
OWNER

CARGILL INTERNATIONAL SA
 
   
By:
/s/ George Wells
 
Name:
George Wells
 
Title:
Assistant Vice President
 
   
   
CHARTERER
 
   
CHAMPION MARINE CO.
 
By:
/s/ Theodora Mitropetrou
 
Name:
Theodora Mitropetrou
 
Title:
Attorney-in-fact
 
   
   




























[Signature Page – Sub-Bareboat Charter “CHAMPIONSHIP”]

EXHIBIT A – Basic Charter Hire (payable monthly in arrears)
Part 1
 
   
First Daily Charter Hire Rate
Comprised of:
US$ 8,250 per day
   
Scrubber Element: US$ 350 per day
Vessel Element: US$ 7,900 per day
 
   
Part 2
 
   
   
Second Daily Charter Hire Rate
Comprised of:
US$ 9,640 per day
   
Scrubber Element: US$ 1,740 per day
Vessel Element: US$ 7,900 per day
 


EXHIBIT A-1
Loss Value, Purchase Price and Floor Price Schedule
Original Vessel Cost: US$ 26,250,000
Payment Number
Payment Date
Loss Value $
Loss Value as a % of Original Vessel Cost
Floor Price $
Purchase
Price $
Loss Value/ Purchase Price attributable to Vessel ($)
Loss Value/Purchase Price attributable to Scrubber ($)
0
07/11/2018
26,250,000.00
100.00%
30,000,000.00
26,250,000.00
23,500,000.00
2,750,000.00
1
07/12/2018
26,100,588.22
99.43%
29,862,500.00
26,100,588.22
23,350,588.22
2,750,000.00
2
07/01/2019
25,950,632.34
98.86%
29,725,630.21
25,950,632.34
23,200,632.34
2,750,000.00
3
07/02/2019
25,800,130.37
98.29%
29,589,387.74
25,800,130.37
23,050,130.37
2,750,000.00
4
07/03/2019
25,649,080.31
97.71%
29,453,769.71
25,649,080.31
22,899,080.31
2,750,000.00
5
07/04/2019
25,497,480.19
97.13%
29,318,773.26
25,497,480.19
22,747,480.19
2,750,000.00
6
07/05/2019
25,345,327.99
96.55%
29,184,395.55
25,345,327.99
22,595,327.99
2,750,000.00
7
07/06/2019
25,192,621.70
95.97%
29,050,633.74
25,192,621.70
22,442,621.70
2,750,000.00
8
07/07/2019
25,039,359.30
95.39%
28,917,485.00
25,039,359.30
22,289,359.30
2,750,000.00
9
07/08/2019
24,885,538.78
94.80%
28,784,946.53
24,885,538.78
22,135,538.78
2,750,000.00


10
07/09/2019
24,731,158.09
94.21%
28,653,015.53
24,731,158.09
21,981,158.09
2,750,000.00
11
07/10/2019
24,576,215.19
93.62%
28,521,689.20
24,576,215.19
21,826,215.19
2,750,000.00
12
07/11/2019
24,420,708.05
93.03%
28,390,964.80
24,420,708.05
21,670,708.05
2,750,000.00
13
07/12/2019
24,222,607.27
92.28%
28,260,839.54
24,222,607.27
21,514,634.60
2,707,972.66
14
07/01/2020
24,023,785.07
91.52%
28,131,310.69
24,023,785.07
21,357,992.79
2,665,792.28
15
07/02/2020
23,824,238.82
90.76%
28,002,375.52
23,824,238.82
21,200,780.54
2,623,458.28
16
07/03/2020
23,623,965.89
90.00%
27,874,031.30
23,623,965.89
21,042,995.77
2,580,970.13
17
07/04/2020
23,422,963.64
89.23%
27,746,275.32
23,422,963.64
20,884,636.40
2,538,327.24
18
07/05/2020
23,221,229.40
88.46%
27,619,104.89
23,221,229.40
20,725,700.34
2,495,529.06
19
07/06/2020
23,018,760.52
87.69%
27,492,517.33
23,018,760.52
20,566,185.49
2,452,575.03
20
07/07/2020
22,815,554.31
86.92%
27,366,509.96
22,815,554.31
20,406,089.74
2,409,464.57
21
07/08/2020
22,611,608.09
86.14%
27,241,080.12
22,611,608.09
20,245,410.98
2,366,197.11
22
07/09/2020
22,406,919.17
85.36%
27,116,225.17
22,406,919.17
20,084,147.07
2,322,772.09
23
07/10/2020
22,201,484.83
84.58%
26,991,942.47
22,201,484.83
19,922,295.90
2,279,188.94
24
07/11/2020
21,995,302.38
83.79%
26,868,229.40
21,995,302.38
19,759,855.32
2,235,447.06
25
07/12/2020
21,788,369.08
83.00%
26,745,083.35
21,788,369.08
19,596,823.18
2,191,545.90
26
07/01/2021
21,580,682.19
82.21%
26,622,501.72
21,580,682.19
19,433,197.34
2,147,484.86
27
07/02/2021
21,372,238.98
81.42%
26,500,481.92
21,372,238.98
19,268,975.62
2,103,263.36
28
07/03/2021
21,163,036.69
80.62%
26,379,021.38
21,163,036.69
19,104,155.86
2,058,880.82

29
07/04/2021
20,953,072.55
79.82%
26,258,117.53
20,953,072.55
18,938,735.89
2,014,336.66
30
07/05/2021
20,742,343.79
79.02%
26,137,767.82
20,742,343.79
18,772,713.51
1,969,630.28
31
07/06/2021
20,530,847.63
78.21%
26,017,969.72
20,530,847.63
18,606,086.53
1,924,761.10
32
07/07/2021
20,318,581.27
77.40%
25,898,720.69
20,318,581.27
18,438,852.75
1,879,728.52
33
07/08/2021
20,105,541.91
76.59%
25,780,018.22
20,105,541.91
18,271,009.96
1,834,531.94
34
07/09/2021
19,891,726.73
75.78%
25,661,859.80
19,891,726.73
18,102,555.95
1,789,170.78
35
07/10/2021
19,677,132.90
74.96%
25,544,242.95
19,677,132.90
17,933,488.48
1,743,644.42
36
07/11/2021
19,461,757.60
74.14%
25,427,165.17
19,461,757.60
17,763,805.33
1,697,952.27
37
07/12/2021
19,245,597.97
73.32%
25,310,623.99
19,245,597.97
17,593,504.24
1,652,093.73
38
07/01/2022
19,028,651.16
72.49%
25,194,616.97
19,028,651.16
17,422,582.98
1,606,068.19
39
07/02/2022
18,810,914.30
71.66%
25,079,141.64
18,810,914.30
17,251,039.27
1,559,875.03
40
07/03/2022
18,592,384.52
70.83%
24,964,195.57
18,592,384.52
17,078,870.86
1,513,513.66
41
07/04/2022
18,373,058.92
69.99%
24,849,776.34
18,373,058.92
16,906,075.48
1,466,983.45
42
07/05/2022
18,152,934.62
69.15%
24,735,881.54
18,152,934.62
16,732,650.83
1,420,283.79
43
07/06/2022
17,932,008.69
68.31%
24,622,508.74
17,932,008.69
16,558,594.62
1,373,414.07
44
07/07/2022
17,710,278.23
67.47%
24,509,655.58
17,710,278.23
16,383,904.56
1,326,373.67
45
07/08/2022
17,487,740.30
66.62%
24,397,319.66
17,487,740.30
16,208,578.33
1,279,161.96
46
07/09/2022
17,264,391.95
65.77%
24,285,498.61
17,264,391.95
16,032,613.63
1,231,778.32
47
07/10/2022
17,040,230.25
64.92%
24,174,190.07
17,040,230.25
15,856,008.12
1,184,222.13


48
07/11/2022
16,815,252.23
64.06%
24,063,391.70
16,815,252.23
15,678,759.48
1,136,492.75
49
07/12/2022
16,589,454.91
63.20%
23,953,101.16
16,589,454.91
15,500,865.35
1,088,589.56
50
07/01/2023
16,362,835.31
62.33%
23,843,316.11
16,362,835.31
15,322,323.39
1,040,511.92
51
07/02/2023
16,135,390.44
61.47%
23,734,034.25
16,135,390.44
15,143,131.24
992,259.20
52
07/03/2023
15,907,117.29
60.60%
23,625,253.26
15,907,117.29
14,963,286.54
943,830.75
53
07/04/2023
15,678,012.85
59.73%
23,516,970.84
15,678,012.85
14,782,786.90
895,225.95
54
07/05/2023
15,448,074.08
58.85%
23,409,184.73
15,448,074.08
14,601,629.93
846,444.15
55
07/06/2023
15,217,297.95
57.97%
23,301,892.63
15,217,297.95
14,419,813.26
797,484.69
56
07/07/2023
14,985,681.42
57.09%
23,195,092.29
14,985,681.42
14,237,334.47
748,346.95
57
07/08/2023
14,753,221.41
56.20%
23,088,781.45
14,753,221.41
14,054,191.15
699,030.26
58
07/09/2023
14,519,914.86
55.31%
22,982,957.87
14,519,914.86
13,870,380.89
649,533.97
59
07/10/2023
14,285,758.69
54.42%
22,877,619.31
14,285,758.69
13,685,901.25
599,857.44
60
07/11/2023
14,050,749.80
53.53%
22,772,763.56
14,050,749.80
13,500,749.80
550,000.00

Stipulated loss values are due in addition to any advance or arrears rent due on the same date.
EXHIBIT B
NOTICE OF ASSIGNMENT OF INSURANCE
TO:
PLEASE TAKE NOTICE:
(1)   That by an assignment of Insurances contained in a Sub-Bareboat Charter Agreement dated as of [●] 2018 made by CHAMPION MARINE CO. (the "Sub-Charterer") to CARGILL INTERNATIONAL SA, (together with its successors and assigns, "Head Charterer"), the Sub-Charterer has collaterally assigned to the registered owner of the Vessel (as defined below), CFT INVESTMENTS 1 LLC and its successors and assigns (the " Owner ") as first priority and to the Head Charterer as second priority all of the Sub-Charterer's rights, title and interests in, to and under all policies and contracts of insurance, including the Sub-Charterer's rights under all entries in any protection and indemnity or war risk association or club, which are from time to time taken out by the Sub-Charterer in respect of the "CHAMPIONSHIP" with IMO 9403516 (the " Vessel "), her hull, machinery, freight, disbursements, profits or otherwise, and all the benefits thereof, including, without limitation, all claims of whatsoever nature arising under such policies, as well as all amounts due from underwriters under any such insurance whether as payment of losses, or as return premiums, or otherwise (collectively, the " Insurances ").
(2)   That you are hereby irrevocably authorized and instructed to pay from the date hereof all payments under:
(a)   all Insurances, except entries in protection and indemnity associations or clubs or insurances effected in lieu of such entries, relating to the Vessel in accordance with the loss payable clause in Attachment 1 to this Notice; and
(b)   all entries in protection and indemnity associations or clubs or insurances effected in lieu of such entries relating to the Vessel in accordance with the loss payable clause in Attachment 2 to this Notice.
(3)   That you are hereby instructed to endorse the assignment, notice of which is given to you herein, on all policies or entries relating to the Vessel.
CHAMPION MARINE CO.
 
CARGILL INTERNATIONAL SA
     
By:
   
By:
 
Name:
 
Name:
Title:
 
Title:
     
     
     
     

Dated as of the ____ day of [●] 2018.
ATTACHMENT 1
LOSS PAYABLE AND NOTICE OF CANCELLATION CLAUSE

(A)
Until CFT INVESTMENTS 1 LLC (together with its successors and assigns, the "Owner") shall have notified underwriters to the contrary,

(1)
Except as provided in subsection (2) of this Clause (A), any claim under the insurance policy in respect of the M.V. "CHAMPIONSHIP" with IMO No. 9403516 (the " Vessel ") (other than in respect of a total loss), up to and including the amount of United States Dollars One Million (US$1,000,000) shall be paid:

i.
directly for the repair, salvage or other charges involved; or

ii.
if Cargill International SA (the " Charterer ") shall have first fully repaired the damage or paid all of the salvage or other charges, to the Charterer as reimbursement therefor as its interests may appear; or

iii.
if Champion Marine Co. (the " Sub-Charterer ") shall have first fully repaired the damage or paid all of the salvage or other charges, to the Sub-Charterer as reimbursement therefor as its interests may appear,
save that, without prejudice to subsection (2) of this Clause (A), if the Charterer and/or the Owner has provided the insurers with notice of an Event of Default by the Sub-Charterer under the sub-bareboat charter agreement (between the Charterer and the Sub- Charterer) with respect to the Vessel, no payment shall be made to the Sub-Charterer under subsection (1)(iii) of this Clause (A), but instead shall be paid in accordance with subsection (1)(i) of this Clause (A) or subsection (1)(ii) of this Clause (A) only.

(2)
Any claim in respect of a total loss, and any claim of any nature (whether on account of the loss of or damage to the Vessel, on account of return premiums, or otherwise) in excess of United States Dollars One Million (US$1,000,000) or during the continuance of an Event of Default:

i.
by the Charterer under the bareboat charter agreement (between the Owner and the Charterer) with respect to the Vessel (notice of which Event of Default shall be provided by the Owner to the insurers); and/or

ii.
by the Sub-Charterer under the sub-bareboat charter agreement (between the Charterer and the Sub- Charterer) with respect to the Vessel (notice of which Event of Default shall be provided by the Owner and/or the Charterer to the insurers),
shall be paid directly to the Owner or otherwise as the Owner may consent.

(B)
The underwriters agree to advise the Owner and the Charterer:

(1)
If any insurer cancels or gives notice of cancellation of any insurance (other than war risks) or entry at least fourteen (14) days before such cancellation is to take effect, unless the insurer cancels such insurance because of non-

payment of premium, in which case the insurer shall give Owner and the Charterer at least ten (10) days' notice before such cancellation is to take effect; and

(2)
Of any material change in the terms and conditions of the aforesaid insurance policies or non-renewal at least fourteen (14) days before such change or non-renewal is to take effect.
The foregoing shall not apply to war risk insurance.

ATTACHMENT 2
FORM OF LOSS PAYABLE ENDORSEMENT
PROTECTION & INDEMNITY
------
"CHAMPIONSHIP" IMO No. 9403516
Payment of any recovery to which Champion Marine Co. (the "Sub-Bareboat Charterer"), is entitled to make out of the funds of the Association in respect of any liability, costs or expenses incurred by the Sub-Bareboat Charterer, shall be made to the Sub-Bareboat Charterer or to its order, unless and until the Association receives:
i)   subject always to paragraph ii), below, notice from CFT Investments 1 LLC (the "Owner") and/or Cargill International SA ("Bareboat Charterer") that the Sub-Bareboat Charterer is in default under the Sub-Bareboat Charter Agreement dated [●] 2018 between the Bareboat Charterer and the Sub-Bareboat Charterer respecting the Vessel, in which event all recoveries shall thereafter be paid to the Bareboat Charterer or to its order; provided that no liability whatsoever shall attach to the Association, its Managers or their agents for failure to comply with the latter obligation until and after the expiry of two (2) clear business days from the receipt of such notice;
ii)   notice from the Owner that the Bareboat Charterer is in default under the Bareboat Charter Agreement dated [●] 2018 between the Owner and the Bareboat Charterer respecting the Vessel, in which event all recoveries shall thereafter be paid to the Owner or to its order; provided that no liability whatsoever shall attach to the Association, its Managers or their agents for failure to comply with the latter obligation until and after the expiry of two (2) clear business days from the receipt of such notice.
The Association undertakes:
(a)   to inform the Owner and the Bareboat Charterer if the Association gives the Sub-Bareboat Charterer of the above ship notice that his insurance in the Association in respect of such ship is to cease at the end of the then current Policy Year; and
(b)   to give the Owner and the Bareboat Charterer fourteen (14) days' notice of the Association's intention to cancel the insurance of the Sub-Bareboat Charterer by reason of this failure to pay, when due and demanded any sum due from Sub-Bareboat Charterer to the Association.
All notices to the Owner shall be made to the following address:
CFT Investments 1 LLC
c/o SMBC Leasing and Finance, Inc.
277 Park Avenue
New York, New York 10172
Attn: Carl Marcantonio
Tel: (212) 224-5278
Email:
cmarcantonio@smbc-lf.com
Amickens@smbc-lf.com
Morgan_Feuerhake@smbcgroup.com
smbclfleaseaccountinggroup@smbclf.com
All notices to the Bareboat Charterer shall be made to the following address:
Cargill International SA
14 chemin de Normandie
1206 Geneva, Switzerland
Tel: +41-22-703-2111
Email: George_wells@cargill.com
Ann_shazell@cargill.com
Oliver_HandasydeDick@cargill.com
Bernd_Bachmann@cargill.com
Olivier_Demierre@cargill.com
Otprojects@cargill.com
Kyriakos_attikouris@cargill.com
EXHIBIT C
Agreed form of Time Charter


Time Charter
GOVERNMENT FORM
Approved by the New York Produce Exchange
November 6th, 1913—Amended October 20th, 1921; August 6th, 1931; October 3rd, 1946
This Charter Party , made and concluded in on this 05th day of November, 2018   19 ____
Between CHAMPION MARINE CO., of the Marshall Islands, as
Owners of the good _______ Steamship/ Motorship “CHAMPIONSHIP” (Vessel’s description see Clause 29) of ____
of _________ tons gross register, and _______ tons net register, having engines of _____ indicated horse power
and with hull, machinery and equipment in a thoroughly efficient state, and classed ______
at _______ of about __________ cubic foot capacity, and about ______ tons of 2240 lbs.
deadweight capacity (cargo and bunkers, including fresh water and stores not exceeding one and one half percent of ship’s deadweight capacity,
allowing a minimum of fifty tons) on a draft of _____ feet _____ inches on ________ Summer freeboard, inclusive of permanent bunkers.
which are of the capacity of about ____ tons of duel, and capable of steaming, fully laden, under good weather
conditions about ____ knots on a consumption of about _____ tons of best Welsh coal best grade fuel oil best grade Diesel oil.
now _______
_______ and CARGILL INTERNATIONAL S.A., as Charterers of the City of Geneve
Witnesseth, That the said Owners agree to let, and the said Charterers agree to hire the said vessel, from the time of delivery, for
about   minimum of 5 years firm plus redelivery window of 60days, exact period in Charterers option.  Furthermore Charterers have the option to extend
the charter for an additional about 16 months to about 18months (about = +/-15 days) exact period in Charterers option, at 100% of BCI 5TC Average
(less 3.75% address commission) + Scrubber Premium as per Cl. 111 (e), which to be declared latest 30 days prior to the expiration of the 5 year initial firm
period.  In case declared by Charterers, the optional period shall commence from the end of the 5 year initial firm period
____ within below trading limits.
Charterers to have liberty to sublet the vessel for all or any part of the time covered by this Charter, but Charterers remaining responsible for
the fulfillment of this Charter Party.
Vessel to be placed at the disposal of the Charterers, at   on dropping last outward sea pilot Qingdao, at any time day and night Sundays and Holidays included
______
in such dock or at such wharf or place (where she may safely lie, always afloat, at all times of tide, except as otherwise provided in clause No. 6), as
the Charterers may direct. If such dock, wharf or place be not available time to count as provided for in clause No. 5. Vessel on her delivery to be
ready to receive cargo with clean swept holds and tight, staunch, strong and in every way fitted for the service, having water ballast, winches and
donkey boiler with sufficient steam power, or if not equipped with donkey boiler, then other power sufficient to run all the winches at one and the same
time (and with full complement of officers, seamen, engineers and firemen for a vessel of her tonnage), to be employed, in carrying lawful merchan-
dise, including petroleum or its products, in proper containers , excluding as per Rider Clauses
(vessel is not to be employed in the carriage of Live Stock, but Charterers are to have the privilege of shipping a small number on deck at their risk,
all necessary fittings and other requirements to be for account of Charterers), in such lawful trades, between safe port and/or ports in British North
America, and/or United States of America, and/or West Indies, and/or Central America, and/or Caribbean Sea, and/or Gulf of Mexico, and/or
Mexico, and/or South America ______ and/or Europe
and/or Africa, and/or Asia, and/or Australia, and/or Tasmania, and/or New Zealand, but excluding Magdalena River, River St. Lawrence between
October 31st and May 15th, Hudson Bay and all unsafe ports; also excluding, when out of season, White Sea, Black Sea and the Baltic.
as per Rider Clauses
___________
___________
as the Charterers or their Agents shall direct, on the following conditions:

1. That the Owners shall provide and pay for all provisions, wages and consular shipping and discharging fees of the Crew; shall pay for the
customary insurance of the vessel, also for all the cabin, deck, engine-room and other necessary stores, including boiler water and maintain her class and
keep
the vessel in a thoroughly efficient state of hull and holds , machinery and equipment for and during the service .

2. That the Charterers while the vessel is on hire shall provide and pay for all the fuel except as otherwise agreed, Port Charges, canal
and tolls, all compulsory and customary Pilotages (including Magellan Straits, Skaw/Great Belt, Dardanelles plus Bosphorus) , Agencies,
Commissions,
Consular Charges (except those pertaining to the Crew and Vessel’s flag ), and all other usual expenses except those before stated, but when the
vessel puts into
a port for causes for which vessel is responsible, then all such charges incurred shall be paid by the Owners. Charterers to pay for any tugboats
assistance however when such assistance is required because of Vessel’s problem/failure, then all cost incurred shall be paid by the Owners.
Fumigations ordered because of
illness of the crew to be for Owners account. Fumigations ordered because of cargoes carried or ports visited while vessel is employed under this
charter to be for Charterers account. All other fumigations to be for Charterers account after vessel has been on charter for a continuous period
of six months or more.
Charterers are to provide necessary dunnage and shifting boards, also any extra fittings requisite for a special trade or unusual cargo, but
Owners to allow them the use of any dunnage and shifting boards already aboard vessel. Charterers to have the privilege of using shifting boards
for dunnage, they making good any damage thereto.

3. That the Charterers, at the port of delivery, and the Owners, at the port of re-delivery, shall take over and pay for all fuel remaining on
board the vessel at the current prices in the respective ports, the vessel to be delivered with not less than ____ tons and not more than
____   tons and to be re-delivered with not less than ______ tons and not more than _____ tons.

4. That the Charterers shall pay for the use and hire of the said Vessel at the rate of USD – see clause 43

For the index-linked portion, the hire rate for each fifteen (15) days period is calculated by taking within that fifteen (15) days period the
average of all of the published Baltic Cape Index (BCI) of the 5 TC routes daily reports.

The hire for the first fifteen (15) days period is to be paid within three (3) banking days after delivery. The approximate hire is to be calculated



This document is a computer generated NYPE 46 form printed by BIMCO’s idea .  Any insertion or deletion to the form must be clearly visible. In event of any modification
being made to the pre-printed text of this document which is not clearly visible, the text of the original printed NYPE 1946 document shall apply. BIMCO assumes no
responsibility for any loss, damage or expense caused as a result of discrepancies between the original printed NYPE 1946 document and this computer generated document.

using the fifteen (15) days period prior delivery. The difference between said approximated hire and the actual hire based on actual index of
the fifteen (15) days after delivery is to be settled in the subsequent hire.

All subsequent hire payments will follow the same procedure until vessel’s redelivery.

Charterers will, within fifteen (15) days of redelivery, pay the final outstanding hire to Owners. Owners agree to return any overpaid amounts
to Charterers (if any) within the same deadline.
________ United States Currency per ton on vessel’s total deadweight carrying capacity, including bunkers and
stores, on ______ summer freeboard, per Calendar Month, commencing on and from the day of her delivery, as aforesaid, and at
and after the same rate for any part of a month; hire to continue until the hour of the day of her re-delivery in like good order and condition, ordinary
wear and tear excepted, to the Owners (unless lost) at on dropping last outward sea pilot or passing one safe port PMO/Japan range or in Charterers’
option Skaw/Passero range, including United Kingdom/Eire, at any time day and night Sundays and Holidays included
______ unless otherwise mutually agreed. Charterers are to give Owners not less than ___ days
notice of vessels expected date of re-delivery, and probably port.

5. Payment of said hire to be made in New York paid to Owners' Bank account, see clause 98 in cash in United States Currency, every 15
days   semi monthly in advance, and for the last 15 days   half month or
part of same the approximate amount of hire, and should same not cover the actual time, hire is to be paid for the balance day by day, as it becomes
due, if so required by Owners, unless bank guarantee or deposit is made by the Charterers, otherwise failing the punctual and regular payment of the
hire, or bank guarantee, or on any breach of this Charter Party, the Owners shall be at liberty to withdraw the vessel from the service of the Char-
terers, without prejudice to any claim they (the Owners) may otherwise have on the Charterers.   Time to count from 7 a.m. on the working day
following that on which written notice of readiness has been given to Charterers or their Agents before 4 p.m., but if required by Charterers, they
to have the privilege of using vessel at once, such time used to count as hire.   see Clause 43
Cash for vessel's ordinary disbursements at any port may be advanced as required by the Captain, by the Charterers or their Agents, subject
to 2 1 / 2 % commission and such advances shall be deducted from the hire. The Charterers, however, shall in no way be responsible for the application
of such advances and in case Owners outlays are disputed, Owners are to settle disputed items with Agents involved directly (see also Clause 40) .

6. That the cargo or cargoes be laden and/or discharged in any safe dock or at any safe wharf or safe anchorage or safe place that
Charterers or their Agents may
direct, provided the vessel can safely lie always afloat at any time of tide , except at such places where it is customary for similar size vessels to safely
lie aground .

7. That the whole reach of the Vessel's Hold, Decks, and usual places of loading (not more than she can reasonably stow and carry), also
accommodations for Supercargo, if carried, shall be at the Charterers' disposal, reserving only proper and sufficient space for Ship's officers, crew,
tackle, apparel, furniture, provisions, stores and fuel. Charterers have the privilege of passengers as far as accommodations allow, Charterers
paying Owners ______ per day per passenger for accommodations and meals. However, it is agreed that in case any fines or extra expenses are
incurred in the consequences of the carriage of passengers, Charterers are to bear such risk and expense.

8. That the Captain shall prosecute his voyages with the utmost despatch, and shall render all customary assistance with ship's crew and
boats. The Captain (although appointed by the Owners), shall be under the orders and directions of the Charterers as regards employment and
agency; and Charterers are to load, stow, and trim and discharge the cargo at their expense under the supervision of the Captain, who is to sign Bills of
Lading for
cargo as presented, in conformity with Mate's or Tally Clerk's receipts without prejudice to this Charter Party .

9. That if the Charterers shall have reason to be dissatisfied with the conduct of the Captain, Officers, or Engineers, the Owners shall on
receiving particulars of the complaint, investigate the same, and, if necessary, make a change in the appointments.

10. That the Charterers shall have permission to appoint a Supercargo, who shall accompany the vessel and see that voyages are prosecuted
with the utmost despatch. He is to be furnished with free accommodation, and same fare as provided for Captain's table, Charterers paying at the
rate of $1 0 .00 per day. Owners to victual Pilots and Customs Officers, and also, when authorized by Charterers or their Agents, to victual Tally
Clerks, Stevedore's Foreman, etc., Charterers paying as per Clause 72 . at the current rate per meal, for all such victualling.

11. That the Charterers shall furnish the Captain from time to time with all requisite instructions and sailing directions, in writing, and the
Captain shall keep a full and correct Log of the voyage or voyages, which are to be patent to the Charterers or their Agents, and furnish the Char-
terers, their Agents or Supercargo, when required, with a true copy of daily Logs, showing the course of the vessel and distance run and the con-
sumption of fuel.

12. That the Captain shall use diligence in caring for the care and ventilation of the cargo. The Vessel has natural ventilation.

13. That the Charterers shall have the option of continuing this charter for a further period of ______
______
on giving written notice thereof to the Owners or their Agents ______   days previous to the expiration of the first-named term, or any declared option.

14. That if required by Charterers, time not to commence before 05th November, 2018 (See also Clause 36) and should vessel
not have given written notice of readiness on or before 12th November, 2018 (See also Clause 36) but not later than 4 p.m. Charterers or
their Agents to have the option of cancelling this Charter at any time not later than the day of vessel's readiness. (See also Clause 36) .

15. That in the event of the loss of time from default and/or deficiency of men or stores, fire, breakdown or damages to hull, machinery
or equipment,
grounding, detention by average accidents to ship or cargo, drydocking for the purpose of examination or painting bottom, or by any other cause
preventing the full working of the vessel, the payment of hire shall cease for the time thereby lost; until the Vessel has returned to the same or
equivalent position and if upon the voyage the speed be reduced by
defect in or breakdown of any part of her hull, machinery or equipment, the time so lost, and the cost of any extra fuel consumed in consequence



This document is a computer generated NYPE 46 form printed by BIMCO.  Any insertion or deletion to the form must be clearly visible. In event of any modification
being made to the pre-printed text of this document which is not clearly visible, the text of the original printed NYPE 1946 document shall apply. BIMCO assumes no
responsibility for any loss, damage or expense caused as a result of discrepancies between the original printed NYPE 1946 document and this computer generated document.

thereof, and all extra expenses shall be deducted from the hire.

16. That should the Vessel be lost, money paid in advance and not earned (reckoning from the date of loss or being last heard of) shall be
returned to the Charterers at once. The act of God, enemies, fire, restraint of Princes, Rulers and People, and all dangers and accidents of the Seas,
Rivers, Machinery, Boilers and Steam Navigation, and errors of Navigation throughout this Charter Party, always mutually excepted.
The vessel shall have the liberty to sail with or without pilots, to tow and to be towed, to assist vessels in distress, and to deviate for the
purpose of saving life and property.

17. That should any dispute arise between Owners and the Charterers, the matter in dispute shall be referred to three persons at London
New York ,
one to be appointed by each of the parties hereto, and the third by the two so chosen; their decision or that of any two of them, shall be final, and for
the purpose of enforcing any award, this agreement may be made a rule of the Court. The Arbitrators shall be commercial shipping men. For any dispute not
exceeding the amount of $100,000, the parties agree same to be dealt with by LMAA, small claims proceedings 2002 or any amendment thereof.

18. That the Owners shall have a lien upon all cargoes, and all sub-freights , sub-hires for any amounts due under this Charter, including
General Aver-
age contributions, and the Charterers to have a lien on the Ship for all monies paid in advance and not earned, and any overpaid hire or excess
deposit to be returned at once. Charterers will not suffer, nor permit to be continued, any lien or encumbrance incurred by them or their agents, which
might have priority over the title and interest of the owners in the vessel.

19. That all derelicts and salvage shall be for Owners' and Charterers' equal benefit after deducting Owners' and Charterers' expenses and
Crew's proportion. General Average shall be adjusted, stated and settled, according to Rules 1 to 15, inclusive, 17 to 22, inclus i ve, and Rule F of
York-Antwerp Rules 1974 and any amendments thereto 1924, at such port or place in the United States as may be selected by the carrier, and as to matters not provided for by these
Rules, according to the laws and usages at the port of London.   New York. In such adjustment disbursements in foreign currencies shall be exchanged
into
United States money at the rate prevailing on the dates made and allowances for damage to cargo   claimed in foreign currency shall be converted at
the rate prevailing on the last day of discharge at the port or place of final discharge of such damaged cargo from the ship. Average agreement or
bond and such additional security, as may be required by the carrier, must be furnished before delivery of the goods. Such cash deposit as the carrier
or his agents may deem sufficient as additional security for the contribution of the goods and for any salvage and special charges thereon, shall, if
required, be made by the goods, shippers, consignees or owners of the goods to the carrier before delivery. Such deposit shall, at the option of the
carrier, be payable in United States money and be remitted to the adjuster. When so remitted the deposit shall be held in a special account at the
place of adjustment in the name of the adjuster pending settlement of the General Average and refunds or credit balances, if any, shall be paid in
United States money. Hire not to contribute to general Average.
In the event of accident, danger, damage, or disaster, before or after commencement of the voyage resulting from any cause whatsoever
whether due to negligence or not, for which, or for the consequence of which, the carrier is not responsible, by statute, contract, or otherwise, the
goods, the shipper and the consignee, jointly and severally, shall contribute with the carrier in general average to the payment of any sacrifices,
losses, or expenses of a general average nature that may be made or incurred, and shall pay salvage and special charges incurred in respect of the
goods. If a salving ship is owned or operated by the carrier, salvage shall be paid for as fully and in the same manner as if such salving ship or
ships belonged to strangers.
Provisions as to General Average in accordance with the above are to be included in all bills of lading issued hereunder.

20. Fuel used by the vessel while off hire, also for cooking, condensing water, or for grates and stoves to be agreed to as to quantity, and the
cost of replacing same, to be allowed by Owners.

21.   That as the vessel may be from time to time employed in tropical waters during the term of this Charter, Vessel is to be docked at a
convenient place, bottom cleaned and painted whenever Charterers and Captain think necessary, at least once in every six months, reckoning from
time of last painting, and payment of the hire to be suspended until she is again in proper state for the service. See Dry-Docking Clause No. 93.
______
______
22. Owners shall maintain the gear of the ship as fitted, providing gear (for all derricks) capable of handling lifts up to three tons, also
providing ropes, falls, slings and blocks. If vessel is fitted with derricks capable of handling heavier lifts, Owners are to provide necessary gear for
same, otherwise equipment and gear for heavier lifts shall be for Charterers' account. Owners also to provide on the vessel lanterns and oil for
night work, and vessel to give use of electric light when so fitted, but any additional lights over those on board to be at Charterers' expense. The
Charterers to have the use of any gear on board the vessel.

23. Vessel to work night and day, if required by Charterers, and all winches to be at Charterers' disposal during loading and discharging;
steamer to provide one winchman per hatch to work winches day and night, as required, Charterers agreeing to pay officers, engineers, winchmen,
deck hands and donkeymen for overtime work done in accordance with the working hours and rates stated in the ship's articles. If the rules of the
port, or labor unions, prevent crew from driving winches, shore Winchmen to be paid by Charterers. In the event of a disabled winch or winches, or
insufficient power to operate winches, Owners to pay for shore engine, or engines, in lieu thereof, if required, and pay any loss of time occasioned
thereby.

24. It is also mutually agreed that this Charter is subject to all the terms and provisions of and all the exemptions from liability contained
in the Act of Congress of the United States approved on the 13th day of February, 1893, and entitled "An Act relating to Navigation of Vessels;
etc.," in respect of all cargo shipped under this charter to or from the United States of America. It is further subject to the following clauses, both
of which are to be included in all bills of lading issued hereunder:
U. S. A. Clause Paramount
This bill of lading shall have effect subject to the provisions of the Carriage of Goods by Sea Act of the United States, approved April
16, 1936, which shall be deemed to be incorporated herein, and nothing herein contained shall be deemed a surrender by the carrier of
any of its rights or immunities or an increase of any of its responsibilities or liabilities under said Act. If any term of this bill of lading
be repugnant to said Act to any extent, such term shall be void to that extent, but no further.
Both to Blame Collision Clause



This document is a computer generated NYPE 46 form printed by BIMCO.  Any insertion or deletion to the form must be clearly visible. In event of any modification
being made to the pre-printed text of this document which is not clearly visible, the text of the original printed NYPE 1946 document shall apply. BIMCO assumes no
responsibility for any loss, damage or expense caused as a result of discrepancies between the original printed NYPE 1946 document and this computer generated document.

If the ship comes into collision with another ship as a result of the negligence of the other ship and any act, neglect or default of the
Master, mariner, pilot or the servants of the Carrier in the navigation or in the management of the ship, the owners of the goods carried
hereunder will indemnify the Carrier against all loss or liability to the other or noncarrying ship or her owners in so far as such loss
or liability represents loss of, or damage to, or any claim whatsoever of the owners of said goods, paid or payable by the other or non
carrying ship or her owners to the owners of said goods and set off, recouped or recovered by the other or non carrying ship or her
owners as part of their claim against the carrying ship or carrier.

25. The vessel shall not be required to force ice or follow ice breakers or enter any ice-bound port, or any port where lights or light-ships
have been or are about to be with-
drawn by reason of ice, or where there is risk that in the ordinary course of things the vessel will not be able on account of ice to safely enter the
port or to get out after having completed loading or discharging.

26. Nothing herein stated is to be construed as a demise of the vessel to the Time Charterers. The owners to remain responsible for the
navigation of the vessel, insurance, crew, and all other matters, same as when trading for their own account.

27. A commission of 2 1 / 2 1.25 per cent is payable by the Vessel and Owners to
Seanergy Management Corp
both on hire earned and paid under this Charter, and also upon any continuation or extension of this Charter.

28. An address commission of 2 1 / 2   3.75 per cent payable to Charterers on the hire earned and paid under this Charter.

Additional Clauses from Clause 29 to Clause 112, as attached to be fully incorporated in this CharterParty.










 
THE OWNERS:
CHAMPION MARINE CO.
 
THE CHARTERERS:
CARGILL INTERNATIONAL S.A.
 













   
By cable authority from
   

The original Charter Party in our possession.
 
BROKERS.
 
As ______ For Owners
 





This document is a computer generated NYPE 46 form printed by BIMCO.  Any insertion or deletion to the form must be clearly visible. In event of any modification
being made to the pre-printed text of this document which is not clearly visible, the text of the original printed NYPE 1946 document shall apply. BIMCO assumes no
responsibility for any loss, damage or expense caused as a result of discrepancies between the original printed NYPE 1946 document and this computer generated document.

ADDITIONAL CLAUSES TO MV "CHAMPIONSHIP" / CARGILL INTERNATIONAL S.A.,
CHARTER PARTY DT., 05 TH NOVEMBER, 2018

CLAUSE 29 - TIME CHARTER VESSEL'S DESCRIPTION
M/V CHAMPIONSHIP - TIMECHARTER DESCRIPTION (all figures about)

Flag:
LIBERIA
Built:
16 JUNE 2011
Classification:
BUREAU VERITAS (BV)
Description:
BULK CARRIER CSR CPS(WBT) BC-A (maximum cargo density
3.00 t/m3; holds 2,4,6 and 8 may be empty) ESP GRAB(30),
Unrestricted navigation, AUT-UMS (CS), MON-SHAFT, INWATER
SURVEY
Deadweight:
179237.7 MT
Summer Draft:
18.322 M
IMO NUMBER:
9403516
LOA:
292 Mtrs
Beam (Moulded):
45.00 Mtrs
Depth (Moulded):
24.80 Mtrs
TPC:
122.4
Constants:
350 MTs
GRT:
93196
Net Tons:
59298
Suez:
NET 87180.62 / GT 93878.63
Speed & Consumption:
UP TO AND INCL BF4 AND DSS3 AND NO SWEEL OR ADV
CURRENT AS FOLLOWS: 14.0 / 13.0 KTS ON ABT 56 / 49 MT
LADEN AND 14.0 / 13.0 KTS ON ABT 44 / 39 MT BALLAST IFO
380 + 3.5 MT IFO + 0.3 MDO AXU NDAS.
IN PORT ABT 6.0 WKG / 3.5 MT IDLE IFO380 PLUS ABT 2MT IFO
380 FOR BOILER WHEN BALLASTING / DEBALLASTING
OR DURING HOLDS CLEANING VESSEL BURNS ABT 3.0 MT
IFO 380 PLUS.
GRADE OF FUEL IFO 380 ISO 8217 2017 WHERE AVAILABLE /
IF NOT ISO 8217 2015
Remark:
For scrubber fitted vessel an increase of about 2% at the SFOC or
about 2MTs per day for the main engine and the auxiliaries due to
backpressure and scrubber equipment
Main Engine:
1 x MAN B&W 6S70ME-C MCR 18660KW X 91RPM NCR
15861KW x 86.2RPM
Holds/Hatches:
9 HOLDS / 9 HATCHES
HATCH SIZES:
No. 1+9: 15.64 m x 17.20 m
No 2-8: 15.64 m x 20.60 m
Hold Capacities:
NO. 1: 19364.0, NO. 2: 22320.7 NO. 3: 22404.9, NO. 4: 22404.9, NO.
5: 23203.5, NO. 6: 23217.7 NO. 7: 22406.9, NO. 8: 22040.4, NO. 9:
20235.5, TOTAL: 187598.5
Owners P&I Club:
THE LONDON P&I CLUB
Owners:
Champion Marine Co.,
of the Marshall Islands
c/o Seanergy Management Corp.
154 Vouliagmenis Avenue, 16674 Glyfada, Greece
Managers:
V.SHIPS LIMITED

GOOD WEATHER DEFINITION

Basis good weather, which is hereby defined as max Beaufort force 4 and Douglas Sea State 3.
Vessel's good weather performance speed to be adjusted for the effect of currents.
ADDITIONAL CLAUSES TO MV "CHAMPIONSHIP" / CARGILL INTERNATIONAL S.A.,
CHARTER PARTY DT., 05 TH NOVEMBER, 2018

PERFORMANCE WARRANTY

"Speed and consumption figures are always given on an "about" basis, where "about" is understood to
mean either 0.5 knot downwards in the speed or 5% upwards in the consumption (but not both), i.e.,
only one "about" is to apply."

Vessel's speed/cons as described are warranted throughout the duration of this CP and Owner
guarantee the vessel is Rightship approved with minimum 3 Stars rating unless ship's star rating is
lost due to Charterers' or Charterers' appointed servants (e.g., Stevedores) in which case the ship to
remain on-hire and will remain so throughout the duration of this CP.

CLAUSE 30 - WEATHER ROUTING
Charterers may supply independent weather bureau advice (from a reputable independent weather
bureau as selected by Charterers) to the Master during voyages specified by the Charterers.  The
Master is to comply with the reporting procedures of the routing service selected by Charterers.  If,
during the currency of the Charter Party, the speed of the vessel be reduced and/or fuel oil
consumption be increased, Charterers shall have the right to deduct from hire an amount equivalent to
the time lost and/or cost of any extra fuels consumed subject to having produced to owners a
documented claim supported by the weather bureau.

Evidence of weather conditions to be taken from the vessel's deck logs and independent weather
bureau reports. In the event of a discrepancy between deck logs, 'in the absence of data from another
equally reputable weather Bureau (appointed by the Owners) evidencing to the contrary', and the
independent weather bureau reports, then the independent bureau reports are to be taken as final and
binding on both parties. 'In case of conflict between the data presented by the two weather Bureaus,
the average of the two to be taken as ruling.'

CLAUSE 31 - DIESEL OIL IN PORT
The Vessel is to have the liberty of using LSMGO when entering and leaving port and for
maneuvering in shallow narrow waters, provided such usage is determined to be essential for the safe
maneuvering of the Vessel, always at the discretion of the Master and in compliance with local and
international regulations.

CLAUSE 32 - COMMUNICATION EQUIPMENT
The Vessel shall, as a minimum be equipped with wireless telegraph, email and VHF telephone to
comply with International regulations and to allow Vessel to communicate with land stations. Master,
Senior Officers and Radio Officer to be fully conversant with the English language.

CLAUSE 33 - PERMITTED CARGOES
Coal (excluding Pond Coal), Iron Ore and/or Pellets and/or Concentrates (excluding DRI / DPI and
sponge iron), iron ore lumps, manganese ore and bauxite.

Above cargoes are to be loaded always within Vessels natural segregation and always according to IMO Regulations.

CLAUSE 34 - TRADING
Worldwide excluding all countries that would cause Owners to violate trade sanction laws promulgated by the USA/EU/UN and:
Angola including Cabinda, Albania, Alaska, Abkhazia, Amazon / Orinoco Rivers, Bangladesh,
Bosnia- Herzegovina, Cyprus, Cuba, Cambodia, Congo (formally Zaire), Croatia (except Bakar),
Ethiopia, Eritrea, El Salvador, Ghana, Haiti, Honduras, Guatemala, Iraq, Kuwait, Libya, Morocco,
North Korea, Nicaragua, Nigeria, Namibia, Somalia and including Somalia Coast, Syria, Sri Lanka
(but bunkering in these places is always allowed), Turkish occupied Cyprus, Yemen, Yugoslavian

ADDITIONAL CLAUSES TO MV "CHAMPIONSHIP" / CARGILL INTERNATIONAL S.A.,
CHARTER PARTY DT., 05 TH NOVEMBER, 2018

Federal Republic of (Serbia and Montenegro) and any declared war zone or where a war like situation
prevails.

Charterers to reimburse Owners any net additional war risk insurance premium on entered hull and
machinery value where Vessel breaches war risk warranties payable against Underwriters invoice not
greater than quoted at Lloyds. It is understood that in the event of any change of premium Owners
undertake to pass on to Charterers the actual premium debited to Owners and Charterers only to pay
this amount as evidenced by vouchers .  Owners undertake to use best efforts to minimize the rate.
Crew war bonus, if any, to be for Charterers' account.

Subject to Owners' approval which to be given within 4 hours following the request and not to be
unreasonably withheld, Charterers are to have the option to instruct the vessel to break Institute
Warranty/Navigating Limits. Charterers are to reimburse to Owners any additional H&M insurance
premium actually imposed by the vessel's Underwriters as a consequence of a breach of IWL/INL but
to be entitled to have the benefit of any discounts received by the Owners for such extra insurance.

Also ref clause 95 for Gulf of Aden/Indian Ocean HRA trading

EBOLA CLAUSE:
When trading to Liberia and / or Sierra Leone that have had confirmed cases of Ebola in the preceding
40 days period, Charterers to take the following precautions, which are based on the latest WHO
updates:

–
Only necessary shore personnel to be allowed on board the Vessel;
–
Vetting personnel coming on board, rejecting anyone with obvious symptoms e.g. coughing, high fever / sweating to be refused for boarding;
–
Shore personnel and ship's crew to wear masks, gloves etc. prior going on board and thereafter;
–
No shore personnel to enter the superstructure;
–
If officials need to enter superstructure for any required inspections, then same to be allowed but always with protective equipment and accompanied by a member of the crew;
–
Shore personnel to be set up in the tally office. This may extend to temporary bed and victualing;
–
No shore leave for ship's crew.

CLAUSE 35 - DELIVERY / REDELIVERY RANGE AND NOTICES / ITINERARY
35.1
– Owners to tender 1 day definite notice.
35.2
– Charterers are to give Owners not less than 15 approximate days notice of redelivery range
and then 10, 5 and 2 days notice of redelivery. Charterers are to keep Owners duly informed
of Vessel's itinerary and any change of redelivery range / redelivery port.

Redelivery on dropping last outward sea pilot or passing one safe port PMO / Japan range or
in Charterers' option Skaw / Passero range, including United Kingdom / Eire, at any time,
day, night, Sundays and holidays included.

35.3
– Charterers undertake to inform the Owners, during the period of Charter, as regards to the
itinerary of the Vessel and the names and full styles of their Agents at ports of call whenever
so required by the Owners.
35.4
– Charterers will not fix the vessel deliberately to exceed maximum period allowed under this
CP but if due to unforeseen circumstances, should the maximum period be exceeded, then the
Charterers to pay Owners a hire for any such exceeding period based on ……….. (index/fixed
rate), but in any case not less than the charter party hire.

ADDITIONAL CLAUSES TO MV "CHAMPIONSHIP" / CARGILL INTERNATIONAL S.A.,
CHARTER PARTY DT., 05 TH NOVEMBER, 2018

35.5
– Charterers option to add any or all time off-hire to the maximum Charter period, including
any dry-docking period in any, to be declared latest 1 month before the minimum Charter
Party period.

CLAUSE 36 - DELIVERY DATE
Laycan: 5th November 2018 - 12th November 2018 at any time day, night, Sundays and holidays
included.

CLAUSE 37 - JOINT SURVEY
Charterers and Owners are to hold joint on and off hire bunker and condition surveys on delivery and
redelivery, the expense and time (if time lost) is to be shared equally between Owners and Charterers.

CLAUSE 38 - HOLDS' CONDITION AND CLEANING
38.1
– Vessel to deliver with all holds/cargo compartments clean, dry, free of rust and/or scale and
cargo residues and ready in all respects to the satisfaction of the relevant surveyor and/or such
other recognized local authority or official as local regulations or Shippers may require to
receive permitted cargo which the Vessel may be required to load. If, on presentation for
loading at the first loading port the Vessel should fail to pass the above cargo surveys, then all
expenses for cleaning and/or fumigating including cost of labor standing by to be for the
Owners' account, and the Vessel to be off-hire from time of failing such surveys until it is in
all respects ready to load and survey passed. If some holds / cargo carrying compartments are
not accepted, Charterers shall have the option of accepting the Vessel with those which are
accepted and in that case Charterers shall pay hire proportionate to the number of holds/ cargo
carrying compartments which have passed survey. However, if thereafter there should be any
delay owing to non-acceptance of any hold/cargo carrying compartment Vessel shall be
wholly off-hire until the loading program can be fully resumed.

38.2
– Hold Cleaning/Residue Disposal Clause for Time Charter Parties

a)
The Charterers may request the Owners to direct the crew to sweep and/or wash and/or
clean the holds between voyages and/or between cargoes against payment of U.S.$ . 600--
Per hold actually cleaned, provided the crew is able safely to undertake such work and is
allowed to do so by local regulations. In connection with any such operation the Owners
shall not be responsible if the Vessel's holds are not accepted or passed. Time for cleaning
shall be for the Charterers' account.


b)
All materials (including chemicals and detergents) required for cleaning of cargo holds
shall be supplied by and paid for by the Charterers.


c)
Throughout the currency of this Charter Party and at redelivery, the Charterers shall
remain responsible for all costs and time, including deviation, if any, associated with the
removal and disposal of cargo related residues and/or hold washing water and/or
chemicals and detergents and/or waste as defined by MARPOL Annex V, Section 1 or
other applicable rules relating to the disposal of such substances.

38.3
– Charterers have the option to redeliver the Vessel unclean as left by stevedores against
paying U.S. $. 6.000-- in lieu of hold cleaning.

CLAUSE 39 - BUNKERS CLAUSE
Vessel will be delivered with bunker quantity as on board (Owners to provide as soon as possible the
approximate quantity expected on board on delivery) but same to always be sufficient to reach nearest
main bunkering port.

Bunkers on redelivery to be similar to the actual quantities on delivery.

ADDITIONAL CLAUSES TO MV "CHAMPIONSHIP" / CARGILL INTERNATIONAL S.A.,
CHARTER PARTY DT., 05 TH NOVEMBER, 2018

Prices of bunkers on delivery and redelivery to be the Platts Singapore prices for each grade
prevailing at the day of delivery and redelivery respectively.

Charterers to pay for bunkers on delivery together with first hire payment and Charterers to deduct
value of estimated redelivery bunkers from last sufficient hire payment(s) but such deduction does not
constitute redelivery notice(s).

Charterers to have the option of bunkering the Vessel for their own account prior to delivery provided
same does not interfere with Owners' operations. Owners to have the option of bunkering the Vessel
for their own account prior to redelivery provided same does not interfere with Charterers' operations.

Owners warrant that:

–
They will free up/provide a dedicated tank for LSGO that has sufficient LSGO capacity for
ECA-Zone trading (about 10 - 12 days trading at full speed), latest 7 days prior entering any IMO/
MARPOL defined ECA Zone at Owners time, risk and expense ;

–
The Vessel is fully compliant with the IMO/MARPOL ECA Zone regulations as applicable from
time to time throughout this Charter-Party. Any deviation and consequential costs due to Owners
non-compliance with this Clause including consequential damages shall be for Owners' account.

Alternative bunker specs:
Owners accept local bunker specifications in South Africa (IFO RMF 25), Brazil, India, Taiwan as
long as same are being supplied by internationally recognized bunker suppliers and comply with
Marpol Annex VI Rule 18.

For vessels that are being taken for long period going beyond 2020 following to apply:
Owners warrant that the vessel will, for the duration of the CP, comply with all IMO regulations,
including those related to bunker sulphur limits. Owners warrant that, as of January 2020, the vessel
will be able to burn all ISO standard low sulphur bunker types. Additionally, Owners shall not
unreasonably refuse Charterers' request to burn any type of bunkers that are technically capable of
being burned by the vessel. All sludge removal shall be for Owners' account.

CLAUSE 40 - OWNERS' AND CHARTERERS' EXPENSES
Owners to provide and pay for all expenses of the Officers and Crew including but not limited to
immigration fees and also all consular fees necessitated because of Vessel's flag or nationality of
Owners/Master/Crew. Owners to pay for all lubricating oils. Vessel is to have on board all certificates
necessary to comply with all requirements at the ports of call and canals during the currency of this
Charter Party, failing which Owners are to be responsible for all time lost and expenses incurred
thereby.

Charterers' agents to attend to Vessel's customary minor matters without paying agency fee but actual
costs for such items to be for Owner's account. In case of major repairs, repatriation or General
Average the Owners to nominate their own agents or use Charterers' agents against paying all relevant
charges/ fees.

Charterers' agent to husband the Vessel as required but Owners to pay for any difference between
Charterers' normal agency fee and the fee chargeable for attendance to both interests.

CLAUSE 41- INSURANCE / P . AND I . COVER
41.1
– Owners warrant that throughout the currency of this Charter Party the Vessel shall be fully
covered by leading insurance companies/international P and I Clubs against Hull and
Machinery Insurance, Increased Value Insurance, War and Protection and Indemnity Risk.
Costs of such cover to be at the sole expense of Owners.
ADDITIONAL CLAUSES TO MV "CHAMPIONSHIP" / CARGILL INTERNATIONAL S.A.,
CHARTER PARTY DT., 05 TH NOVEMBER, 2018

41.2
– If required by the Charterers, prior to commencement of the Charter or at any other time, the
Owners shall procure that the Managers of the Hull and Machinery insurance, Increased
Value Insurance and the Protection and Indemnity Association shall give the Charterers
proper evidence that the Vessel is fully covered by the Owners, provided same allowed by the
rules of the Hull and Machinery insurers.

H. and M.: Hull and Machinery with
H. and M. Value
P. & I. Club
War Risks covered with
IV Value
:  Leading U/W: Lloyds Underwriters
:  33,500,000
:  The London P&I Club
:  Hellenic War Risks
:  16,750,000
 

CLAUSE 42 - WITHHOLDINGS
Charterers shall be entitled to deduct from hire payments any disbursements for owners account,
either actual amounts supported by vouchers or estimated amounts, but maximum U.S.$ 1,000.00 per
port of call also any advances to the Master including commission thereon and any previous
overpayments of hire including agreed offhire and substantiated performance claims.

CLAUSE 43 - HIRE PAYMENT CLAUSE
Hire: Firm period: 5 years index-linked at below percentages of BCI 5TC Average (less 3.75%
address commission) + Scrubber Premium as per Cl. 111 (e)

Year 1:  90%
Year 2:  91.5%
Year 3:  93%
Year 4:  94.5%
Year 5:  96%

Optional period: 18 months index-linked at 100% of BCI 5TC Average (less 3.75% address
commission) + Scrubber Premium as per Cl. 111 (e)

Vessel to remain on-hire throughout the scrubber installation period.

Owners to have the option to convert to fixed rate for between 3 to 12 months based on the prevailing
FFA curve bids (subject to market liquidity) adjusted for the above mentioned percentages for each
annual hire period in question.

For the index-linked portion, the hire rate for each fifteen (15) days period is calculated by taking
within that fifteen (15) days period the average of all the published Baltic Cape Index (BCI) of the 5
TC routes daily reports.

The hire for the first fifteen (15) days period is to be paid within three (3) banking days after delivery.
The approximate hire is to be calculated using the fifteen (15) days period prior delivery. The
difference between said approximated hire and the actual hire based on actual index of the fifteen (15)
days after delivery is to be settled in the subsequent hire. All subsequent hire payments will follow the
same procedure until vessel's redelivery.

Charterers will within fifteen (15) days of redelivery pay the final outstanding hire to Owners. Owners
agree to return any overpaid amounts to charterers (if any) within the same deadline.

Should the 5 (five) TC BCI type be recalibrated in the future then the size adjustment premium is to
be adjusted down accordingly by the official conversion factor as advised by the Baltic Exchange.

ADDITIONAL CLAUSES TO MV "CHAMPIONSHIP" / CARGILL INTERNATIONAL S.A.,
CHARTER PARTY DT., 05 TH NOVEMBER, 2018

Hire payable every 15 (fifteen) days in advance including overtime. First hire payable latest 3 (three)
banking days after delivery.

Charterers will not agree to the assignment of hire, monies due under this Charter Party in any
circumstances whatsoever.

Charterers have the right to deduct value of bunkers on redelivery against last sufficient hire payments
and such deduction does not constitute redelivery notice(s).

To offset general errors/omissions Owners to give Charterers minimum three (3) banking days written
notice before exercising their right under this contract, and when so rectified within those three (3)
days following Owners' notice, the payment shall stand a regular and punctual and Owners will not
withdraw the vessel.

Charterers are not responsible for any delays in Owner receiving funds due to bank delay in
transmission of funds resulting from OFAC or similar issues.

Owner shall have no right to withdraw the Vessel for non-payment of hire if receipt of funds is
delayed by OFAC issues. Proof of Charterer's proper payment instructions to Charterer's bank fulfills
Charterers' payment obligations as per Charter Party.

CLAUSE 44 - TAXES
Any tax and/or dues imposed on account of Owners, the vessel, the vessel's flag or crew and/or
charter hire to be for Owners' account with the exception of all taxes and/or dues whatsoever imposed
in Charterer's domicile (including but not limited to Chinese Enterprise Income Tax and/or Business
Tax) which to be for Charterer's account.

All taxes and/or dues imposed on cargo or freight to be for receivers/charterers account, including
MMRT (Merchant Marine Renewal Tax)/Wharfage/Inframar/P.U. tax (Port Utilization Tax) or PIUT
(Port Infrastructure Utilization Tax).

CLAUSE 45 - DEVIATION / PUT BACK
In the event of loss of time either in port or at sea, deviation from the course of the voyage or putting
back whilst on voyage, caused by sickness of or an accident to or misconduct by Master / Officers /
crew, stowaway, refugee or any person on board Vessel other than persons travelling by request of
Charterers or by reason of the refusal of Master or Officer(s) or crew to perform their duties or an
accident or breakdown to Vessel or dry-docking or periodical survey, the hire shall be suspended from
the time of inefficiency in port or at sea, deviation or putting back until Vessel is again efficient in the
same or equivalent position to the port where Vessel is originally destined for and voyage resumed
therefore, and all expenses incurred including bunkers consumed during such period of suspension
shall be for Owners' account.

The Owners to be credited with any saving(s) in respect of time and fuels saved if her position when
she re-enters Charterers' service so allows.

CLAUSE 46 - STEVEDORE DAMAGE
Stevedores to be appointed and paid by the Charterers but to work under the supervision of the
Master.  Should any damage be caused to the Vessel or her fittings by the Stevedores, the Master shall
try to arrange for Stevedores to repair such damage and try to settle the matter directly with them
however, the Charterers shall remain liable to the Owners for stevedore damage whether or not
payment has been made by stevedores to the Charterers in respect of the stevedore damage.

The Charterers shall not be responsible for any damage caused by Stevedores unless the Master
notifies the Charterers or their Agents of such damage within 48 hours from occurrence, except for
ADDITIONAL CLAUSES TO MV "CHAMPIONSHIP" / CARGILL INTERNATIONAL S.A.,
CHARTER PARTY DT., 05 TH NOVEMBER, 2018

hidden damages which to be reported within 48 hours after discovery but always prior redelivery.  The
Master shall also endeavor to obtain written acknowledgement of the damage and liability from the
concerned Stevedores on occurrence.

Any and all damage(s) affecting the Vessel's seaworthiness and/or class and/or safety of the crew
and/or affecting the trading capabilities of the Vessel are to be repaired immediately by Owners at
Charterers cost and the Vessel is to remain on hire until such repairs are completed and if required
passes by Vessel's classification society.

The Charterers shall have the liberty to redeliver the Vessel without repairing the damages for which
the Charterers are responsible, as long as the damages do not affect the Vessel's seaworthiness and/or
class and/or safety of the crew and/or affecting the trading capabilities of the Vessel, but the
Charterers undertake to reimburse costs of repair against production of repair bills by repairers of
dockyard unless otherwise agreed, but time used for repairs not to count as hire.

CLAUSE 47 - GRAB DISCHARGE
Vessel is to be suitable for normal size grab discharge and no cargo to be loaded in places inaccessible
to grabs. Charterers have the privilege of using bulldozers in the Vessel's holds provided their weight
does not to exceed the vessel's tank-top strength.

CLAUSE 48 - ITF
The Owners warrant that officers and crew of the vessel are covered for the duration of the Charter
Party by an I.T.F. agreement or other bona fide Trade Union Agreement acceptable to I.T.F. Loss of
time as a result of non-compliance shall be considered as off-hire and any extra expenses incurred or
time lost shall be for Owners' account. Furthermore Owners warrant that throughout the duration of
this Charter, the vessel's flag and crewing arrangements shall not interfere with or restrict the vessel's
trading restrictions or employment.

CLAUSE 49 - ARREST
Should the Vessel be arrested during the currency of the Charter Party at the suit of any person having
or purporting to have a claim against or any interest in the Vessel, hire under this Charter Party shall
not be payable in respect of any period whilst the Vessel remains under arrest or remains unemployed
as a result of such arrest. The Clause shall be inoperative should the arrest be caused through any act
or omission of the Charterers.

CLAUSE 50 - LACK OF CREW MEMBERS
Any time lost by the Vessel by reason of all required crew members not being on board when the
Vessel is ready to sail, or by reason of a strike, stoppage or refusal to work by any crew is to be for
Owners' account and expenses for waiting or cancelling tugs, pilots or mooring boats are to be for
Owners' account.

CLAUSE 51 - BILLS OF LADING
51.1
– If required by Charterers and/or their Agents, Master is to authorize them to sign Bills of
Lading in Charterers' or sub/head Charterers' form on his behalf in accordance with mate's
receipts without prejudice to this Charter Party. All Bill of Lading issued under this Charter
Party to bear The Both to Blame Collision clause, General Clause Paramount, New Jason
Clause.
51.2
– Discharging port(s) shown on Bills of Lading do not constitute a declaration of discharging
port(s) and Charterers have the right to order the Vessel to any safe port(s) within the terms of
this Charter Party. In this case Charterers are to give prior notice thereof in advance to
Owners.

ADDITIONAL CLAUSES TO MV "CHAMPIONSHIP" / CARGILL INTERNATIONAL S.A.,
CHARTER PARTY DT., 05 TH NOVEMBER, 2018

51.3
– In case Original Bill(s) of Lading not available at discharging port, Owners agree to deliver
the entire cargo against a single Letter of Indemnity in the wording acceptable to Owners'
P&I Club (as per the International Group' P. and I. Club wordings) on Charterers' headed
paper, stamped and signed by Charterers only.

51.4
– In the event that Charterers request Owners to discharge cargo either: I) without Bills of
Lading and or II) at a discharging port other than that named in the Bill of Lading shall
discharge such cargo in accordance with Charterers instructions in consideration of receiving
a Letter of Indemnity in the wording acceptable to Owners' P&I Club addressed to them from
Charterers hereunder in the International Group' P. and I. Club wording on Charterers' headed
paper, stamped and signed by Charterers only.

SPLIT OF BILLS OF LADING
Charterers and/or agents are hereby authorised by Owners/Master to split Bills of Lading and issue
ship delivery orders in negotiable and transferable forms against collection of full set of original Bills
of Lading. Delivery orders to conform with all terms and conditions and exceptions of Bills of Lading
and shall not prejudice shipowner's rights.

Owners shall remain responsible for the total quantity loaded but owners shall not be responsible for
the delivery of the cargo to each delivery order holder.

REISSUANCE OF BILLS OF LADING
Charterers have the option to re-issue a new set of bills of lading in replacement of the initial set under
the condition that full initial set is collected back by Charterers agents and that a scanned copy of 3/3
original bills of lading marked null and void is sent to Owners by fax or by email. Immediately upon
receipt of the said documents, Owners to agree to and authorize Charterers' agents to issue and sign
the new set of original bills of lading. Charterers shall then send to Owners the full initial set of
original bills of lading.

The new set to reflect quantity, description of cargo and port of origin, mirror image.

SEA WAYBILL
Charterers have an option to issue non-negotiable Sea Waybills in lieu of Bills of Lading in which
case owners to instruct Master to release cargo to the consignee named on the seaway bill.
Charterers hereby indemnify Owners/Master against any consequences arising therefrom.

BIMCO ELECTRONIC BILLS OF LADING CLAUSE
(a)
At the Charterers' option, bills of lading, waybills and delivery orders referred to in this Charter
Party shall be issued, signed and transmitted in electronic form with the same effect as their paper
equivalent.

(b)
For the purpose of Sub-clause (a) the Owners shall subscribe to and use Electronic (Paperless)
Trading Systems as directed by the Charterers, provided such systems are approved by the
International Group of P&I Clubs. Any fees incurred in subscribing to or for using such systems
shall be for the Charterers' account.

(c)
The Charterers agree to hold the Owners harmless in respect of any additional liability arising
from the use of the systems referred to in Sub-clause (b), to the extent that such liability does not
arise from Owners' negligence.

CLAUSE 52 - CERTIFICATES
The Owners warrant that throughout the currency of this Charter Party, the Vessel shall to be in
possession of any necessary valid certificates enabling the Vessel to perform the Charter Party and to

ADDITIONAL CLAUSES TO MV "CHAMPIONSHIP" / CARGILL INTERNATIONAL S.A.,
CHARTER PARTY DT., 05 TH NOVEMBER, 2018

comply with all applicable requirements, regulations and recommendations, including but not limited
to:

–
Tonnage and measurement certificates
–
Classification and Trading certificates.
–
Certificates issued pursuant to Section 311 (P) of the U.S. Federal Water Pollution Control Act, as
amended (title 33 U.S. Code, Section 1321 (P)
–
Certificates of Financial Responsibility to trade to U.S. waters or to the waters of any other
country relevant under this Charter Party
–
ISM certificates
–
Brazilian Authorities' DPC approval to be in order Charterers are to facilitate the issuance of the
DPC Certificate / Inspection.
–
All relevant certificates pertaining to the Crew.

Any time lost or other consequence of any failure to comply with this warranty shall be for Owners'
account.

CLAUSE 53 - SUEZ CERTIFICATES
Throughout the period of the Charter, Vessel will have on board current valid Suez Canal Certificates,
and will so comply with all applicable requirements, regulations and recommendations as to avoid any
delay in transit of canal, failing which time and expenses to be for Owners' account including but not
limited to any tug assistance to the Vessel.

CLAUSE 54 - VACCINATION CERTIFICATES
Owners shall be responsible for and arrange at their own expense that the Master, Officers and crew
of the Vessel to be vaccinated and to be in possession of necessary valid vaccination certificates on
delivery of the Vessel and throughout the period of this Charter Party. Any time lost and or additional
expenses incurred due to failure to provide such certificates shall be for Owners' account.

CLAUSE 55 - QUARANTINE
Normal quarantine time and expenses to enter port are to be for Charterers' account. Any extra time or
detention and expenses for quarantine due to pestilence and illness of the Vessel's Master, Officers
and crew are to be for Owners' account, but if quarantine detention is on account of the Vessel having
been sent by Charterers to any infected port, such detention time and expenses are to be for
Charterers' account.

CLAUSE 56 - FUMIGATION
Owners are to supply valid deratization certificate on Vessel's delivery and if same does not cover
whole period of this Charter Party, cost of fumigation (in case fumigation is needed) shall be for
Owners' account and time so required is not to count unless fumigation is required on account of cargo
carried or ports visited while Vessel is employed under this Charter Party in which case, cost
and time are to be for Charterers' account.

CLAUSE 57 - COMPLIANCE WITH U . S . SAFETY AND HEALTH REGULATIONS
If the Vessel calls at any U.S. port for the purpose of loading or discharging cargo, the Vessel's
equipment shall comply with regulations established under U.S. Public Law 85 - 742 Part 9 (Safety
and Health Regulations for Long shoring) or any subsequent amendments. If longshoremen are not
permitted to work due to the failure of master and or Owners to comply with the aforementioned
regulations, any delays to the Vessel resulting shall be for Owners' account.

CLAUSE 58 - COMPLIANCE WITH INTERNATIONAL CONVENTIONS
58.1
– In the event of the Vessel being prevented from performing, or being unable to perform the
service immediately required hereunder, by reason of:

ADDITIONAL CLAUSES TO MV "CHAMPIONSHIP" / CARGILL INTERNATIONAL S.A.,
CHARTER PARTY DT., 05 TH NOVEMBER, 2018
A.   –   Action on the part of relevant authorities resulting from non - compliance with any
compulsory applicable enactment enforcing all or part of any of the following
international conventions:

–
International Conventions for the Safety of Life at Sea, either SOLAS 1960, or
SOLAS 1974, or SOLAS 1974 in conjunction with its 1978 Protocol.

–
International Load Lines Convention 1969.

–
International Convention for the Prevention of Pollution from Ships 1973, in
conjunction with its 1978 protocol.

–
ILO Merchant Shipping (minimum standards) Convention 1976 (nr. 147).

–
International Convention on Standards of Training, Certification and Watch Keeping
for Seafarers 1978.

B.   –   Labor stoppages or shortage, boycott, secondary boycott, manifestation of any kind in
services essential to the operation of the Vessel owing to its flag or registry or Ownership
or management or to the conditions of employment on board.

Provided always that the event (A) and/or (B) is not directed against the Charterers or brought
about any act, instruction or omission on the part of the Charterers, then any loss of time shall
result in the Vessel being off-hire and shall be dealt with in accordance with the off-hire
Clause.

58.2
- It is understood that, if necessary, Vessel will comply with any safety regulations and/or
requirements in effect at ports of loading and/or discharging. A particular reference is the
United States Department of Labor Safety and Health Regulations set forth in part III of the
Federal Register.

58.3
- Although other provisions of this Charter make it the responsibility of the Owners, it is
agreed that should the Vessel not meet safety rules and regulations Owners will take
immediate corrective measures and any stevedore standby time and other expenses involved,
including off-hire, will be for Owners' account

CLAUSE 59 - SMUGGLING
Any delay, expenses and/or time incurred on account of smuggling are to be for Charterers' account if
caused by Charterers and/or persons appointed by Charterers and are to be for Owners' account, if
caused by Owners, Officers and/or crew and/or persons appointed by Owners.

CLAUSE 60 - CUBA CALLS
Owners warrant that the Vessel is in full compliance with U.S.A. regulations pertaining to port calls
to/from Cuba, specifically in compliance with the "U.S. Cuban Democracy Act" and can trade without
restraint into U.S. ports.

CLAUSE 61 - PRATIQUE
Vessel shall prepare radio pratique, when instructed by Charterers and be in possession of necessary
certificates including but not limited to Japanese Sanitary Certificates. Charterers' Agent(s) will assist,
as trading pattern allows and properly direct Master regarding the Port Authority's requirements well
in advance, prior to Vessel's arrival at subject port, however, should any time and or expenses
incurred, same to be for Owners' account.

CLAUSE 62 - PLAN / DRAFT SURVEY
Owners warrant that the Vessel will throughout the duration of the Charter-Party have on board all
required documentation including but not limited to a capacity plan, hydrostatic curves and tables of
displacement, tank calibration and trimming correction tables. All sounding pipes to be well
maintained and free from impediments and Vessel to have ballast tanks either empty or pressed full
and trim to be deducted to minimum and not to exceed trim table corrections.  If Vessel does not

ADDITIONAL CLAUSES TO MV "CHAMPIONSHIP" / CARGILL INTERNATIONAL S.A.,
CHARTER PARTY DT., 05 TH NOVEMBER, 2018

comply with above requirements she will be put off-hire until she is able to perform such survey.
Master to keep written record of drainage moisture pumped out. If required, Master to forward to
Charterers upon arrival at unloading port and before start of discharging a certificate indicating all
ballast remains.

CLAUSE 63-SUSPENSION IN CASE OF WAR
In the event of war or warlike operations involving two or more of the following nations: the United
States of America, Japan, Australia, Russia, UK, Germany, France, Italy, Spain and People's Republic
of China and/or the nation under the flag which Vessel is performing under this Charter is registered,
which seriously affects Charterers' or Owners' ability to perform their obligations under this Charter
Party, both Charterers and Owners shall have the right to suspend this Charter Party with three (3)
weeks written notice without liability to the other party. If the Charter Party is suspended, such
suspension shall take place at port of destination after discharge of any cargo on board, subject to the
provisions of attached Conwartime 2004 Clause.

CLAUSE 64 - OFF HIRE / TERMINATION OF THE CHARTER
The Charterers shall have the option of cancelling this Charter Party in the event the Vessel is off-hire
for reasons attributed to the Owners for a period in excess of 30 consecutive days in any period of 12
months.

CLAUSE 65 - OFF-HIRE BUNKER CONSUMPTION
Bunkers consumed during any period during which the Vessel is off - hire for whatever cause, shall
be calculated at the latest bunkering price actually paid by the Charterers.

CLAUSE 66 - EQUIPMENT
Owners warrant and guarantee that throughout this CP, Vessel's equipment and certificates shall
comply with all regulations and/or requirements in effect at ports of call, canals and countries within
the permitted trading range under this CP. Without prejudice to any rights to claim damages,
Charterers may suspend hire for time lost and any extra expenses including but not limited to
stevedores' standby time to be for Owners' account.

CLAUSE 67 - HATCHES
Crew is to open and close hatches before, during and after stevedore work when and where required
and when permitted by shore regulations.

CLAUSE 68 - FRESH WATER
Fresh water consumed under this Charter for the purpose of drinking and use on board by the Officers
and crew (excluding water used for hold cleaning) is to be for Owners' account.

CLAUSE 69 - SUBLET
Charterers may sublet Vessel, but shall always remain responsible to Owners for due fulfilment of this
Charter Party.

CLAUSE 70 - US SECURITY/WATCHMEN
US SECURITY / WATCHMEN
If the vessel calls in the United States, including any US territory, the following provisions shall apply
with respect to any applicable security regulations or measures:
Notwithstanding anything else contained in this Charter Party all costs or expenses arising out of or
related to security regulations or measures required by any US authority including, but not limited to,
security guards, launch services, tug escorts, port security fees or taxes and inspections, shall be for
the Charterers' account, unless such costs or expenses result solely from the Owners' negligence, or
due to crew nationality / visa, or due to the vessel's flag, in which case costs to be for Owners'
account.
ADDITIONAL CLAUSES TO MV "CHAMPIONSHIP" / CARGILL INTERNATIONAL S.A.,
CHARTER PARTY DT., 05 TH NOVEMBER, 2018

CLAUSE 71 - HEALTH AND SAFETY
Owner shall have on board the Vessel an effective occupational health and safety policy with the
objective that due care and attention is given by crew members to safe working practices in all
operations pertaining to the Vessel. Owner shall have a policy regarding drug and alcohol abuse
onboard the Vessel with the objective that no crew member will navigate the Vessel or operate its
onboard equipment whilst impaired by drugs or alcohol. The policy will also have the objective of
strictly prohibiting the possession, use, transport and distribution of illicit or nonprescribed drugs by
crew members. Owner shall exercise due diligence throughout the currency of this Contract to ensure
that such policies are complied with in full.

CLAUSE 72 - ADDITIONAL EXPENSES / CVE
Charterers are to pay a lumpsum of U.S.$. 1,500.00-- per 30 days or pro rata to cover entertainment
expenses and radio telegrams / telephone charges for Charterers' account disbursed by Owners.

CLAUSE 73 - BIMCO HULL FOULING CLAUSE FOR TIME CHARTER PARTIES ( AMENDED )
(a)
If, in accordance with the Charterers' orders, the Vessel remains at or shifts within a place,
customary anchorage and/or berth for an aggregated period exceeding:


(i)
20 days in a Tropical Zone or Seasonal Tropical Zone*; or


(ii)
25 days outside such Zones*

any warranties concerning speed and consumption shall be suspended pending inspection of the
Vessel's underwater parts including, but not limited to, the hull, sea chests, rudder and propeller.

* If no such periods are agreed the default periods shall be 15 days.

(b)
In accordance with Sub-clause (a), either party may call for inspection which shall be arranged
jointly by the Owners and the Charterers and undertaken at the Charterers' risk, cost, expense and
time.

(c)
If, as a result of the inspection either party calls for cleaning of any of the underwater parts, such
cleaning shall be undertaken by the Charterers at their risk, cost, expense and time in consultation
with the Owners.


(i)
Cleaning shall always be under the supervision of the Master and, in respect of the
underwater hull coating, in accordance with the paint manufacturers' recommended
guidelines on cleaning, if any. Such cleaning shall be carried out without damage to the
Vessel's underwater parts or coating. If during Charterers' under-water inspection and/or
cleaning operations the vessel's anti-fouling coating is observed to be detaching, the cleaning
shall be immediately suspended and resumed only upon Charterers' receipt of the Owners'
written hold-harmless confirmation. If the required confirmation is rejected or not received
within reasonable time, charters shall be considered to have fulfilled their obligation under the
clause. In any such event, the vessel's speed and consumption warranty shall be reinstated.


(ii)
If, at the port or place of inspection, cleaning as required under this Sub-clause (c) is not
permitted or possible "or there is no availability of suitable facilities and equipment" or if the
Charterers choose to postpone cleaning, speed and consumption warranties shall remain
suspended until such cleaning has been completed.


(iii)
If, despite the availability of suitable facilities and equipment, the Owners nevertheless refuse
to permit cleaning, the speed and consumption warranties shall be reinstated from the time of
such refusal.
ADDITIONAL CLAUSES TO MV "CHAMPIONSHIP" / CARGILL INTERNATIONAL S.A.,
CHARTER PARTY DT., 05 TH NOVEMBER, 2018


(iv)
Owners recommend one propeller polishing to be performed once every 6 or 7 months
depending on the Vessel's schedule at a convenient place/port, at Owners' expense, provided
that no time will be lost otherwise, it will be in Owners' time.

(d)
Cleaning in accordance with this Clause shall always be carried out prior to redelivery. If,
nevertheless, the Charterers are prevented from carrying out such cleaning, the parties shall, prior
to but latest on redelivery, agree a lump sum payment in full and final settlement of the Owners'
costs and expenses arising as a result of or in connection with the need for cleaning pursuant to
this Clause.

(e)
If the time limits set out in Sub-clause (a) have been exceeded but the Charterers thereafter
demonstrate that the Vessel's performance remains within the limits of this Charter Party the
vessel's speed and consumption warranties will be subsequently reinstated and the Charterers'
obligations in respect of inspection and/or cleaning shall no longer be applicable.

CLAUSE 74 - BIMCO Ship to Ship Transfer Clause for Time Charter Parties
(a)
The Charterers shall have the right to order the Vessel to conduct ship to ship cargo operations,
including the use of floating cranes and barges. All such ship to ship transfers shall be at the
Charterers' risk, cost, expense and time.

(b)
The Charterers shall direct the Vessel to a safe area for the conduct of such ship to ship operations
where the Vessel can safely proceed to, lie and depart from, always afloat, but always subject to
the Master's approval. The Charterers shall provide adequate fendering, securing and mooring
equipment, and hoses and/or other equipment, as necessary for these operations, to the satisfaction
of the Master.

(c)
The Charterers shall obtain any and all relevant permissions from proper authorities to perform
ship to ship operations and such operations shall be carried out in conformity with best industry
practice.

(d)
If, at any time, the Master considers that the operations are, or may become, unsafe, he may order
them to be suspended or discontinued. In either event the Master shall have the right to order the
other Vessel away from the Vessel or to remove the Vessel.

(e)
If the Owners are required to extend their existing insurance policies to cover ship to ship
operations or incur any other additional cost/expense, the Charterers shall reimburse the Owners
for any additional premium or cost/expense incurred.

(f)
The Charterers shall indemnify the Owners against any and all consequences arising out of the
ship to ship operations including but not limited to damage to the Vessel and other costs and
expenses incurred as a result of such damage, including any loss of hire; damage to or claims
arising from other alongside Vessels, equipment, floating cranes or barges; loss of or damage to
cargo; and pollution.

CLAUSE 75 - GMT TIME
All times are understood to be in GMT except for laydays / cancelling which to be local time.

CLAUSE 76 - CHANGE OF FLAG / OWNERSHIP / SALE DELETE
Owners shall have the right to change the Vessel's flag, subject to Charterers' prior consent which is
not to be unreasonably withheld. Such change(s) are not, in any way, to hinder, prevent or detract
from Charterers' rights and ability to use the Vessel according to present Charter Party terms.

Owners have the option of selling this Vessel at any time during the course of this Charter Party
subject to Charterers approval of the buyers which not to be unreasonably withheld and Owners will
ADDITIONAL CLAUSES TO MV "CHAMPIONSHIP" / CARGILL INTERNATIONAL S.A.,
CHARTER PARTY DT., 05 TH NOVEMBER, 2018

give Charterers at least 45 days prior notice of expected time and place which will not interfere
Charterers' normal operation of the ship. All time lost and all directly related expenses including
additional bunker consumed in related to such sale to be for Owners' account. The buyers undertake to
perform the balance of this Charter Party at the same terms and conditions which to be stated in the
sale contract. Should the Owners elect to sell the Vessel, the Charterers are to be given ROFR on the
Vessel. For the purpose of clarity, ROFR refers to the right that the Charterers hold in case the
Owners are selling the Vessel. No third party can be given priority before the Charterers have
declared within two working days whether they want to match the price possibly achievable from
third party buyer.

CLAUSE 77 - RECONCILIATION OF ACCOUNTS
Owners shall, every 6 months, provide a copy of their complete statement of accounts (S.O.A.) along
with all supporting documentation (not previously provided to Charterers) covering the period from
delivery until the latest 15 days hire payment date, in order to allow an interim reconciliation of the
accounts.

Upon redelivery, within maximum 14 days, Owners shall provide their complete S.O.A. along with all
supporting documentation covering the full charter period from the delivery date until redelivery date,
including bunkers on delivery and redelivery (or bunkers actually remaining on board in case of direct
continuation). Undisputed amounts (if any) shall be paid within 7 days after sharing the S.O.A.ʼs.

CLAUSE 78 - LAW AND ARBITRATION
This Charterparty is governed by English Law. GA/Arbitration in London. Also ref Clause 91.

CLAUSE 79 - PROTECTIVE CLAUSES
The New Both - to - Blame Collision Clause, New Jason Clause, Conwartime 2004, whichever
applicable, are deemed to be incorporated in all Bills of Lading issued under this Charter Party and all
sub-Charter Parties. Conwartime 2004 War Clause, as attached, P. & I. Bunker Clause, Deviation
Clause, Drug and Alcohol Policy, Assignment Clause, are deemed to be incorporated in this
Charter-Party and to apply.

NEW JASON CLAUSE
In the event of accident, danger, damage or disaster before or after commencement of the voyage,
resulting from any cause whatsoever, whether due to negligence or not, for which, or for the
consequences of which, the carrier is not responsible, by statute, contract or otherwise, the goods,
shippers, consignees, or Owners of the goods shall contribute with the carrier in general average to the
payment of any sacrifices, losses, or expenses of a general average nature that may be made or
incurred and shall pay salvage and special charges incurred in respect of the goods.

If a salving ship is owned or operated by the carrier, salvage shall be paid for as fully as if such
salving ship or ships belonged to strangers. Such deposit as the carrier or his agents may deem
sufficient to cover the estimated contribution of the goods and any salvage and special charges
thereon shall, if required, be made by the goods, shippers, consignees or Owners of the goods to the
carrier before delivery.

NEW BOTH TO BLAME COLLISION CLAUSE
If the liability for any collision in which the Vessel is involved while performing this Bill of Lading
fails to be determined in accordance with the laws of the United States of America, the following
Clause shall apply: If the ship comes into collision with another ship as a result of the negligence of
the other ship and any act, neglect or default of the Master, mariner, pilot or the servants of the carrier
in the navigation or in the management of the ship, the Owners of the goods carried hereunder will
indemnify the carrier against all loss or liability to the other or non-carrying ship or her Owners
insofar as such loss or liability represents loss of, or damage to, or any claim whatsoever of the
Owners of the said goods, paid or payable by the other or non-carrying ship or her Owners to the
ADDITIONAL CLAUSES TO MV "CHAMPIONSHIP" / CARGILL INTERNATIONAL S.A.,
CHARTER PARTY DT., 05 TH NOVEMBER, 2018

Owners of the said goods and set off, recouped or recovered by the other or non-carrying ship or
carrier or her Owners as part of their claim against the carrying ship or carrier.

The foregoing provision shall also apply where the Owners, Operators or those in charge of any ship
or ships or objects other than, or in addition to, the colliding ships or objects are at fault in respect to a
collision or contact.

DEVIATION CLAUSE
The Vessel has liberty to call at any port or ports in any order, for any purpose, to sail without pilots,
to tow and/or assist Vessels in all situations, and also to deviate for the purpose of saving life and/or
property.
Eventual costs and benefits to be equally shared by Charterers and Owners.

DRUG AND ALCOHOL POLICY
Owners warrant that there is a policy on Drug and Alcohol Abuse (Policy) applicable to the Vessel
which meets or exceeds that standard in the International Marine Forum Guidelines for the control of
Drugs and Alcohol on board the Ship. Under the Policy, alcohol impairment shall be defined as a
blood alcohol content of 40mg/100ml or greater; the appropriate seafarers to be tested shall be the full
Vessel's complement and the drug/alcohol testing and screening shall include unannounced testing in
addition to route medical examinations. An objective of the Policy should be that the frequency of the
unannounced testing be adequate to act as an effective abuse deterrent, and that all officers be tested
at least once a year through a combined program of unannounced testing and routine medical
examinations.

Owners further warrant that the Policy will remain in effect during the term of this Charter and that
Owners shall exercise due diligence to ensure that the Policy is complied with. It is understood that an
actual impairment of any test finding of impairment shall not in and of itself mean the Owners have
failed to exercise due diligence.

CLAUSE 80 - MOBILE CRANE CLAUSE
Charterers are permitted to place mobile cranes on deck provided the weight of such cranes (including
the weight of the fully loaded grab) does not exceed the Vessel's maximum permissible deck strength
and subject to class approval. Charterers shall arrange and pay for deck bearers and/or protection
plates to be fitted under cranes, if required and same to be removed upon completion of discharge in
Charterers' time and their risk and expense. Should any cutting and/or welding and/or reinforcement
be necessary to accommodate placement of such cranes, all expenses and time for such work to be for
Charterers' account.

Charterers to remain fully responsible for any/all direct damages, time, expenses and costs (including,
but not limited to, burnt areas of paints on decks and underneath) resulting from such operations.  Such
damages to be restored by Charterers to their original state prior redelivery. Charterers to be fully
responsible for any rain damage to cargo directly attributable to hatches remaining open and
prevented from being closed.

Such cutting/welding always to be carried out subject to Vessel's Classification Society's approval.

CLAUSE 81 - BIMCO BUNKER QUALITY CONTROL FOR TIME CHARTERING
( AMENDED STANDARD BY CARGILL )
(1)
The Charterers shall supply bunkers of a quality suitable for burning in the Vessel's engines and
auxiliaries and which conform to the specification(s) mutually agreed under this Charter, and
which comply to Marpol Annex VI.

(2)
At the time of delivery of the Vessel the Owners shall place at the disposal of the Charterers, the
bunker delivery note(s) and any samples relating to the fuels existing on board. The Owners shall
ADDITIONAL CLAUSES TO MV "CHAMPIONSHIP" / CARGILL INTERNATIONAL S.A.,
CHARTER PARTY DT., 05 TH NOVEMBER, 2018

place at the disposal of the Charterers, the bunker delivery notes from the last 36 (thirty six)
months to evidence that the vessel is compliant with NAECA zone rules.

(3)
During the currency of the Charter the Charterers shall ensure that bunker delivery notes are
presented to the Vessel on the delivery of fuel(s) and that during bunkering representative samples
of the fuel(s) supplied shall be taken at the Vessel's bunkering manifold wherever possible and
sealed in the presence of competent representatives of the Charterers and the Vessel.

(4)
The fuel samples shall be retained by the Vessel for 1 year (one year) after the date of delivery or
for whatever period necessary in the case of a prior dispute and any dispute as to whether the
bunker fuels conform to the agreed specification(s) shall be settled by analysis of the sample(s) by
(FOBAS) or by another mutually agreed fuels analyst whose findings shall be conclusive
evidence as to conformity or otherwise with the bunker fuels specification(s). Bunker delivery
note to be kept onboard for 3 years as per Marpol Annex VI.

(5)
The Owners reserve their right to make a claim against the Charterers for any damage to the main
engines or the auxiliaries caused by the use of unsuitable fuels or fuels not complying with the
agreed specification(s). Additionally, if bunker fuels supplied do not conform with the mutually
agreed specification(s) or otherwise prove unsuitable for burning in the ship's engines or
auxiliaries the Owners shall not be held responsible for any reduction in the Vessel's speed
performance and/or increased bunker consumption nor for any time lost and any other
consequences.

CLAUSE 82 - BUNKER FUEL SULPHUR CONTENT CLAUSE FOR TIME CHARTER
PARTIES 2005
(a)
Without prejudice to anything else contained in this Charter Party, the Charterers shall supply
fuels of such specifications and grades to permit the Vessel, at all times, to comply with the
maximum sulphur content requirements of any emission control zone when the Vessel is ordered
to trade within that zone.

The Charterers also warrant that any bunker suppliers, bunker craft operators and bunker
surveyors used by the Charterers to supply such fuels shall comply with Regulations 14 and 18 of
MARPOL Annex VI, including the Guidelines in respect of sampling and the provision of bunker
delivery notes.

The Charterers shall indemnify, defend and hold harmless the Owners in respect of any loss,
liability, delay, fines, costs or expenses arising or resulting from the Charterers' failure to comply
with this Sub- clause (a).

(b)
Provided always that the Charterers have fulfilled their obligations in respect of the supply of
fuels in accordance with Sub-clause (a), the Owners warrant that:


(i)
the Vessel shall comply with Regulations 14 and 18 of MARPOL Annex VI and with the
requirements of any emission control zone; and


(ii)
the Vessel shall be able to consume fuels of the required sulphur content when ordered by the
Charterers to trade within any such zone.

Subject to having supplied the Vessel with fuels in accordance with Sub-clause (a), the Charterers
shall not otherwise be liable for any loss, delay, fines, costs or expenses arising or resulting from
the Vessel's failure to comply with Regulations 14 and 18 of MARPOL Annex VI.

ADDITIONAL CLAUSES TO MV "CHAMPIONSHIP" / CARGILL INTERNATIONAL S.A.,
CHARTER PARTY DT., 05 TH NOVEMBER, 2018

(c)
For the purpose of this Clause, "emission control zone" shall mean zones as stipulated in
MARPOL Annex VI and/or zones regulated by regional and/or national authorities such as, but
not limited to, the EU and the US Environmental Protection Agency.

CLAUSE 83 - SEAWORTHY TRIM CLAUSE
Charterers shall leave the Vessel in seaworthy trim and with cargo on board safely stowed to Master's
satisfaction between loading berths/ports and between discharging berths/ports, respectively; any
expenses and time resulting therefrom shall be for Charterers' account.

CLAUSE 84 - LIQUEFYING OF BULK CARGOES
Unless the cargo is elsewhere excluded in this Charter Party, the vessel may load any lawful, properly
certified, safe, cargo in compliance with applicable regulations of the International Maritime Solid
Bulk Cargoes Code (IMSBC Code) or any subsequent revisions thereof and applicable local
regulations in effect at the time of loading.

At Owner's/Master's request, Charterers/Shippers to identify the cargo to be loaded and jointly with
Owners (or their agents) take representative samples. Such sample(s) to be tested/analysed in a
mutually acceptable, competent laboratory before the ship is called to berth to determine whether the
cargo is safe to load. For cargoes that may be subject to liquefaction, this will include testing/analysis
of the Flow Moisture Point, the Transportable Moisture Limit and the actual Moisture Content.  The
results of such testing/analysis to be binding on all parties.

At Owner's/Master's request, Charterers and/or Shippers shall provide to the Master before loading,
complete and valid certification for all cargo intended for loading, as per the foregoing.  The
certificate(s) will remain valid for such period as defined by the IMSBC code or applicable local
regulations, whichever is the shorter. The vessel shall have the right to refuse to commence loading if
such certification is not provided or the validity of which has expired, before loading and time will
continue to count (or the vessel shall remain on hire, as applicable). Any time lost or cost incurred as a
result of Shippers'/Charterers' failure to comply with this clause will be for Charterers' account.

CLAUSE 85 - BIMCO ISPS/MTSA Clause
(a)   (i)   The Owners shall comply with the requirements of the International Code for the Security of
Ships and of Port Facilities and the relevant amendments to Chapter XI of SOLAS (ISPS
Code) relating to the Vessel and "the Company" (as defined by the ISPS Code). If trading to
or from the United States or passing through United States waters, the Owners shall also
comply with the requirements of the US Maritime Transportation Security Act 2002 (MTSA)
relating to the Vessel and the "Owner" (as defined by the MTSA).


(ii)
Upon request the Owners shall provide the Charterers with a copy of the relevant
International Ship Security Certificate (or the Interim International Ship Security Certificate)
and the full style contact details of the Company Security Officer (CSO).


(iii)
Loss, damages, expense or delay (excluding consequential loss, damages, expense or delay)
caused by failure on the part of the Owners or "the Company"/"Owner" to comply with the
requirements of the ISPS Code/MTSA or this Clause shall be for the Owners' account, except
as otherwise provided in this Charter Party.

(b)   (i)   The Charterers shall provide the Owners and the Master with their full style contact details
and, upon request, any other information the Owners require to comply with the ISPS
Code/MTSA. Where sub-letting is permitted under the terms of this Charter Party, the
Charterers shall ensure that the contact details of all sub-charterers are likewise provided to
the Owners and the Master. Furthermore, the Charterers shall ensure that all sub-charter
parties they enter into during the period of this Charter Party contain the following provision:

ADDITIONAL CLAUSES TO MV "CHAMPIONSHIP" / CARGILL INTERNATIONAL S.A.,
CHARTER PARTY DT., 05 TH NOVEMBER, 2018

"The Charterers shall provide the Owners with their full style contact details and, where
sub-letting is permitted under the terms of the charter party, shall ensure that the contact
details of all sub-charterers are likewise provided to the Owners".


(ii)
Loss, damages, expense or delay (excluding consequential loss, damages, expense or delay)
caused by failure on the part of the Charterers to comply with this Clause shall be for the
Charterers' account, except as otherwise provided in this Charter Party.

(c)
Notwithstanding anything else contained in this Charter Party all delay, costs or expenses
whatsoever arising out of or related to security regulations or measures required by the port
facility or any relevant authority in accordance with the ISPS Code/MTSA including, but not
limited to, security guards, launch services, vessel escorts, security fees or taxes and inspections,
shall be for the Charterers' account, unless such costs or expenses result solely from the
negligence of the Owners, Master or crew. All measures required by the Owners to comply with
the Ship Security Plan shall be for the Owners' account.

(d)
If either party makes any payment which is for the other party's account according to this Clause,
the other party shall indemnify the paying party.

CLAUSE 86 - U . S . TRADE - UNIQUE BILL OF LADING IDENTIFIER CLAUSE
The Charterers warrant that each transport document accompanying a shipment of cargo destined to a
port or place in the United States of America shall have been endorsed with a Unique Bill of Lading
Identifier as required by the U.S. Customs Regulations (19 CFR Part 4 Section 4.7.a) including
subsequent changes, amendments or modifications thereto, not later than the first port of call.

Non-compliance with the provisions of this Clause shall amount to breach of warranty for the
consequences of which the Charterers shall be liable and shall hold the Owners harmless and shall
keep them indemnified against all claims whatsoever which may arise and be made against them.

Furthermore, all time lost and all expenses incurred including fines as a result of the Charterers'
breach of the provisions of this Clause shall be for the Charterers' account.

CLAUSE 87 - U . S . CUSTOMS ADVANCE NOTIFICATION / AMS CLAUSE FOR TIME CHARTER PARTIES
(a)
If the Vessel loads or carries cargo destined for the U.S. or passing through U.S. ports in transit,
the Charterers shall comply with the current U.S. Customs Regulations (19 CFR 4.7) or any
subsequent amendments thereto and shall undertake the role of carrier for the purposes of such
regulations and shall, in their own name, time and expense:


i)
Have in place a SCAC (Standard Carrier Alpha Code);

ii)
Have in place an ICB (International Carrier Bond);

iii)
Provide the Owners with a timely confirmation of i) and ii) above; and

iv)
Submit a cargo declaration by AMS (Automated Manifest System) to the U.S. Customs and
provide the Owners at the same time with a copy thereof.

(b)
The Charterers assume liability for and shall indemnify, defend and hold harmless the Owners
against the direct losses and/or damages (excluding consequential loss and/or damage) arising
from the Charterers' failure to comply with any of the provisions of sub - clause (a). Should such
failure result in any delay then, notwithstanding any provision in this Charter - Party to the
contrary, the Vessel shall remain on hire.

(c)
If the Charterers' ICB is used to meet any penalties, duties, taxes or other charges which are solely
the responsibility of the Owners, the Owners shall promptly reimburse the Charterers for those amounts.
ADDITIONAL CLAUSES TO MV "CHAMPIONSHIP" / CARGILL INTERNATIONAL S.A.,
CHARTER PARTY DT., 05 TH NOVEMBER, 2018

(d)
The assumption of the role of carrier by the Charterers pursuant to this Clause and for the purpose
of the U.S. Customs Regulations (19 CFR 4.7) shall be without prejudice to the identity of carrier
under any Bill of Lading, other contract, law or regulation.

CLAUSE 88 - CONFIDENTIALITY
All negotiations and fixture to be kept strictly private and confidential save as otherwise may be
required by the laws of regulations applicable to Seanergy Maritime Holdings Corp. or to the Owners,
including but not limited to any stock exchange and/or Securities and Exchange Commission laws and
regulations.

CLAUSE 89 - OIL POLLUTION
Owners are required to establish and maintain financial security for responsibility in respect of oil or
other pollution damage as required by any government including federal state or municipal or other
division or authority thereof, to enable the vessel, without penalty or charge, lawfully to enter, remain
at or leave any port, place territorial or contiguous waters of any country, state or municipality in
performance of this Charter without any delay. This obligation shall apply whether or not such
requirements have been lawfully imposed by such government or division or authority thereof.
Owners shall make and maintain all arrangements by bond or otherwise as may be necessary to satisfy
such requirements at the Owners' expense and Owners shall indemnify Charterers against all
consequences (including loss of time) and all expenses and costs of any failure or inability to comply
with the requirements of this clause.

Charterers not to be responsible for any claim brought against the vessel, her Owners, previous
owners, her cargo or bunkers for any pollution claim. Owners warrant that they are covered for
pollution liability insurance up to USD 1000 million by a P&I Club member of the International
Group of P&I Clubs.

CLAUSE 90
Notwithstanding any provision to the contrary in this Charter Party and irrespective of whether bills of
lading have been issued, Charterers shall have liberty at any time to order the Vessel to sail to and/or
anchor at any safe place or places of their choosing and to wait there pending further voyage
instructions.

CLAUSE 91 - BIMCO STANDARD DISPUTE RESOLUTION CLAUSE
(a)
This Contract shall be governed by and construed in accordance with English law and any dispute
arising out of or in connection with this Contract shall be referred to arbitration in London in
accordance with the Arbitration Act 1996 or any statutory modification or re-enactment thereof
save to the extent necessary to give effect to the provisions of this Clause.

The arbitration shall be conducted in accordance with the London Maritime Arbitrators
Association (LMAA) Terms current at the time when the arbitration proceedings are commenced.

The reference shall be to three arbitrators. A party wishing to refer a dispute to arbitration shall
appoint its arbitrator and send notice of such appointment in writing to the other party requiring
the other party to appoint its own arbitrator within 14 calendar days of that notice and stating that
it will appoint its arbitrator as sole arbitrator unless the other party appoints its own arbitrator and
gives notice that it has done so within the 14 days specified. If the other party does not appoint its
own arbitrator and give notice that it has done so within the 14 days specified, the party referring
a dispute to arbitration may, without the requirement of any further prior notice to the other party,
appoint its arbitrator as sole arbitrator and shall advise the other party accordingly. The award of a
sole arbitrator shall be binding on both parties as if he had been appointed by agreement.

ADDITIONAL CLAUSES TO MV "CHAMPIONSHIP" / CARGILL INTERNATIONAL S.A.,
CHARTER PARTY DT., 05 TH NOVEMBER, 2018

Nothing herein shall prevent the parties agreeing in writing to vary these provisions to provide for
the appointment of a sole arbitrator.

In cases where neither the claim nor any counterclaim exceeds the sum of USD 100,000 (or such
other sum as the parties may agree) the arbitration shall be conducted in accordance with the
LMAA Small Claims Procedure current at the time when the arbitration proceedings are
commenced.

(b)
Notwithstanding the above, the parties may agree at any time to refer to mediation any difference
and/or dispute arising out of or in connection with this Contract.

In the case of a dispute in respect of which arbitration has been commenced under the above, the
following shall apply:


(i)
Either party may at any time and from time to time elect to refer the dispute or part of the
dispute to mediation by service on the other party of a written notice (the "Mediation Notice")
calling on the other party to agree to mediation.


(ii)
The other party shall thereupon within 14 calendar days of receipt of the Mediation Notice
confirm that they agree to mediation, in which case the parties shall thereafter agree a
mediator within a further 14 calendar days, failing which on the application of either party a
mediator will be appointed promptly by the Arbitration Tribunal ("the Tribunal") or such
person as the Tribunal may designate for that purpose. The mediation shall be conducted in
such place and in accordance with such procedure and on such terms as the parties may agree
or, in the event of disagreement, as may be set by the mediator.


(iii)
If the other party does not agree to mediate, that fact may be brought to the attention of the
Tribunal and may be taken into account by the Tribunal when allocating the costs of the
arbitration as between the parties.


(iv)
The mediation shall not affect the right of either party to seek such relief or take such steps as
it considers necessary to protect its interest.


(v)
Either party may advise the Tribunal that they have agreed to mediation. The arbitration
procedure shall continue during the conduct of the mediation but the Tribunal may take the
mediation timetable into account when setting the timetable for steps in the arbitration.


(vi)
Unless otherwise agreed or specified in the mediation terms, each party shall bear its own
costs incurred in the mediation and the parties shall share equally the mediator's costs and
expenses.


(vii)
The mediation process shall be without prejudice and confidential and no information or
documents disclosed during it shall be revealed to the Tribunal except to the extent that they
are disclosable under the law and procedure governing the arbitration.

(Note:  The parties should be aware that the mediation process may not necessarily interrupt time
limits.)

CLAUSE 92
In case of discrepancies between Printed form and Rider Clauses, the Rider Clauses will prevail.

ADDITIONAL CLAUSES TO MV "CHAMPIONSHIP" / CARGILL INTERNATIONAL S.A.,
CHARTER PARTY DT., 05 TH NOVEMBER, 2018

CLAUSE 93 - DRY-DOCKING
The Owners shall have the option to place the Vessel in dry-dock during the currency of this charter at
a convenient time and place to be mutually agreed upon by the Owners and Charterers for bottom
cleaning and painting and/or repairs as required by Class or dictated by circumstances.

However, the Owners shall notify the Charterers of the intention of such dry-dock and/or periodical
survey with 90 days prior notice, except in an emergency.

Vessel is to be placed off-hire upon deviation from Charterers service, until such a time when the
Vessel is in the same or equivalent position with respect to the Vessel's next employment.

CLAUSE 94 - WAR RISK CLAUSE FOR TIME CHARTERS, 2004
CODE NAME:  " CONWARTIME 2004 "
WAR RISK CLAUSE FOR TIME CHARTERS, 2004 CODE NAME: "CONWARTIME 2004"

(a)
For the purpose of this Clause, the words:


(i)
"Owners" shall include the shipowners, bareboat charterers, disponent owners, managers or
other operators who are charged with the management of the Vessel, and the Master; and


(ii)
"War Risks" shall include any actual, threatened or reported:
war; act of war; civil war; hostilities; revolution; rebellion; civil commotion; warlike
operations; laying of mines; acts of piracy; acts of terrorists; acts of hostility or malicious
damage; blockades (whether imposed against all Vessels or imposed selectively against
Vessels of certain flags or ownership, or against certain cargoes or crews or otherwise
howsoever); by any person, body, terrorist or political group, or the Government of any state
whatsoever, which, in the reasonable judgment of the Master and/or the Owners, may be
dangerous or are likely to be or to become dangerous to the Vessel, her cargo, crew or other
persons on board the Vessel.

(b)
The Vessel, unless the written consent of the Owners be first obtained, shall not be ordered to or
required to continue to or through, any port, place, area or zone (whether of land or sea), or any
waterway or canal, where it appears that the Vessel, her cargo, crew or other persons on board the
Vessel, in the reasonable judgment of the Master and/or the Owners, may be, or are likely to be,
exposed to War Risks. Should the Vessel be within any such place as aforesaid, which only
becomes dangerous, or is likely to be or to become dangerous, after her entry into it, she shall be
at liberty to leave it.

(c)
The Vessel shall not be required to load contraband cargo, or to pass through any blockade,
whether such blockade be imposed on all Vessels, or is imposed selectively in any way
whatsoever against Vessels of certain flags or ownership, or against certain cargoes or crews or
otherwise howsoever, or to proceed to an area where she shall be subject, or is likely to be subject
to a belligerent's right of search and/or confiscation.

(d)   (i)   The Owners may effect war risks insurance in respect of the Hull and Machinery of the
Vessel and their other interests (including, but not limited to, loss of earnings and detention,
the crew and their protection and Indemnity Risks), and the premiums and/or calls therefore
shall be for their account.


(ii)
If the Underwriters of such insurance should require payment of premiums and/or calls
because, pursuant to the Charterers' orders, the Vessel is within, or is due to enter and remain
within, or pass through any area or areas which are specified by such Underwriters as being
subject to additional premiums because of War Risks, then the actual premiums and/or calls
ADDITIONAL CLAUSES TO MV "CHAMPIONSHIP" / CARGILL INTERNATIONAL S.A.,
CHARTER PARTY DT., 05 TH NOVEMBER, 2018

paid shall be reimbursed by the Charterers to the Owners at the same time as the next
payment of hire is due, or upon redelivery, whichever occurs first.

(e)
If the Owners become liable under the terms of employment to pay to the crew any bonus or
additional wages in respect of sailing into an area which is dangerous in the manner defined by
the said terms, then the actual bonus or additional wages paid shall be reimbursed to the Owners
by the Charterers at the same time as the next payment of hire is due, or upon redelivery,
whichever occurs first.

(f)
The Vessel shall have liberty:


(i)
to comply with all orders, directions, recommendations or advice as to departure, arrival,
routes, sailing in convoy, ports of call, stoppages, destinations, discharge of cargo, delivery,
or in any other way whatsoever, which are given by the Government of the Nation under
whose flag the Vessel sails, or other Government to whose laws the Owners are subject, or
any other Government, body or group whatsoever acting with the power to compel
compliance with their orders or directions;


(ii)
to comply with the order, directions or recommendations of any war risks underwriters who
have the authority to give the same under the terms of the war risks insurance;


(iii)
to comply with the terms of any resolution of the Security Council of the United Nations, the
effective orders of any other Supranational body which has the right to issue and give the
same, and with national laws aimed at enforcing the same to which the Owners are subject,
and to obey the orders and directions of those who are charged with their enforcement;


(iv)
to discharge at any other port any cargo or part thereof which may render the Vessel liable to
confiscation as a contraband carrier;


(v)
to call at any other port to change the crew or any part thereof or other persons on board the
Vessel when there is reason to believe that they may be subject to internment, imprisonment
or other sanctions.

(g)
If in accordance with their rights under the foregoing provisions of this Clause, the Owners shall
refuse to proceed to the loading or discharging ports, or any one or more of them, they shall
immediately inform the Charterers. No cargo shall be discharged at any alternative port without
first giving the Charterers notice of the Owners' intention to do so and requesting them to
nominate a safe port for such discharge. Failing such nomination by the Charterers within 48
hours of the receipt of such notice and request, the Owners may discharge the cargo at any safe
port of their own choice.

(h)
If in compliance with any of the provisions of sub-clauses (b) to (g) of this Clause anything is
done or not done, such shall not be deemed a deviation, but shall be considered as due fulfillment
of this Charter Party.

CLAUSE 95 - GULF OF ADEN / INDIAN OCEAN HIGH RISK AREA TRANSIT
Notwithstanding any other provisions in this charter party, it is hereby agreed that Owners will permit
the vessel to transit the High Risk Area (HRA) of the Indian Ocean / Arabian Sea / Gulf of Aden /
Gulf of Oman / Southern Red Sea (as defined by the Joint War Committee of Lloyds Market
Association from time to time) subject to the following terms and conditions:
ADDITIONAL CLAUSES TO MV "CHAMPIONSHIP" / CARGILL INTERNATIONAL S.A.,
CHARTER PARTY DT., 05 TH NOVEMBER, 2018

1.
Security Guards.


a.
Owners will employ an armed security team comprising 3 (three) members on board the
vessel at their risk and at Charterers' expense (subject to 1(g) below).


b.
Owners will contract with an SSP (Security Services Provider) selected by Owners from one
of the SSPs on Charterers' approved short list, provided total cost is competitive compared to
the other 3 companies listed. Such short list shall be provided by Charterers to Owners from
time to time for Owners' approval and shall have a minimum of three (3) SSP which shall be
considered by Owners and approved – such approval not to be unreasonably withheld for
each SSP. Charterers list as of August 2015 is as follows: (i) Ambrey Risk:
servicedelivery@ambreyrisk.com (ii) Secure a Ship: commercial.sales@secureaship.com (iii)
Diaplous: contact@diaplous-ms.com (iv) Sea Guardian: info@sguardian.com which
Charterers confirm are all approved by Charterers' insurers for both LOH and K&R
Insurances as mentioned below. Charterers shall review such selection of preferred SSPs from
time to time and shall advise Owners accordingly. Charterers confirm that any additions to the
SSPs on the short list will be approved by leading underwriters of both LOH and K&R
Insurances and will be members of the Security Association for the Maritime Industry
(SAMI).


c.
The basis of the contractual arrangement between Owners and the SSP will be the Bimco
"Guardcon" contract subject to such amendments as are agreed between Owners and the SSP.
Owners will provide Charterers with a copy of the contract with the SSP upon request.


d.
The on board security team will be embarked and disembarked at the closest convenient
locations to the entry and exit point of the HRA as provided by the chosen SSP.


e.
The vessel will take a reasonably direct route through the HRA from the embarkation point of
the security team to the disembarkation point but will always proceed via the IRTC
(Internationally Recognized Transit Corridor) when proceeding via Suez and/or transiting the
Gulf of Aden. By "reasonably direct route", it is understood that this will normally be the
shortest practical route between the two points but always subject to the master's discretion to
deviate in the case of an actual or threatened security alert or advice from the military
authorities in the region concerned to avoid any particular area(s).


f.
The contracted SSP will also liaise with Owners/Master to determine an inventory of
hardening materials (including full razor wire protection) not already on board, reasonably
required for the vessel's forthcoming transit in accordance with BMP4 (Best Management
Practices v.4 and any subsequent amendments) to be supplied to the vessel prior to or at the
latest at the same time as the embarkation of the security team. Such materials to be paid for
by Owners and to be installed by the crew under the direction of and verified by the security
team. Provision of hardening materials, if applicable will be re-imbursed by Charterers to
Owners promptly on presentation of usual supporting documentation.


g.
Costs of the SSP will be paid directly by Charterers to the SSP.

2.
Insurance.


a.
Charterers have contracted for LOH (Loss of Hire) Insurance (including blocking and
trapping) for a period not less than 360 days at their expense which Policy includes Owners as
a co-insured beneficiary (and/or vessel Managers) for such transit. The vessel will remain
on-hire in the event of capture by pirates for a maximum of 360 days. Underwriters for
Charterers' LOH Policy have agreed to waive rights of subrogation against Owners'
ADDITIONAL CLAUSES TO MV "CHAMPIONSHIP" / CARGILL INTERNATIONAL S.A.,
CHARTER PARTY DT., 05 TH NOVEMBER, 2018

insurance policies including but not limited to Hull and Machinery insurances, Disbursements
insurances, Loss of Hire insurances and War Risks insurances for all interests.


b.
Charterers have contracted for K&R (Kidnap & Ransom) Insurance for an aggregate amount
of not less than US$ 15,000,000 (fifteen million US Dollars, any one event) with first class
underwriters which Policy includes Owners (and/or the vessel Managers) as a co-insured
beneficiary for such transit, with primacy in the case. Underwriters for Charterers' K&R
Policy have agreed to waive rights of subrogation against Owners' insurance policies
including but not limited to Hull and Machinery insurances, Disbursements insurances, Loss
of Hire insurances and War Risks insurances for all interests. In the event of an incident
leading to capture of the vessel, Owners agree to use Charterers' underwriters' nominated
response consultants and to notify same immediately using the following contact details:
insofar as Charterers' K&R and Loss of Hire policies are concerned Eos Risk Management
For Non-Emergency Maritime Counter- Piracy Advice contact +44(0) 1782 283 323 or
response@eosrisk . com for assistance. Should an insured event occur please contact:- +44(0)
1782 207 433. This shall not restrict Owners from contacting the insurers or brokers directly
in the event of an insured peril.


c.
Owners will contract for additional war risk premium (AWRP) on vessel's total value for
each transit of the HRA and advise the expected gross and nett cost to Charterers.  This cover
will be subject to the nett premium payable being at or below a level considered reasonable
by Charterers (and in line with the current London Insurance Market at the time of transit)
and above which level Charterers will have the right to provide their own cover if required.
Such premium if contracted by Owners, to be re-imbursed by Charterers on presentation of
usual supporting documentation evidencing premiums paid. Charterers to have the benefit of
any discounts or no-claims bonus enjoyed by Owners. If the AWRP is contracted by
Charterers, such cover will be placed with first class underwriters and will include Owners as
a co-insured beneficiary under the Policy for such transit.

3.
Insurance Warranties


a.
When armed guards on board:-
The assured must register the vessel with MSCHOA (Maritime Security Centre, Horn of
Africa) [http:www.mschoa.eu] and UKMTO prior to entering the HRA and ensure that all
recommendations are fully complied with.


b.
When no armed guards on-board:-


(i)
Vessels Speed: A minimum speed of 9 knots or normal service speed if greater as
conditions will allow, if weather conditions require the vessel to reduce speed, the 9 knot
warranty will not be applicable. If the vessel is subject to a casualty within the excluded
area which results in vessel's inability to maintain minimum of 9 knots, coverage hereon
maintained. In the event of any suspicious approaches within the guidelines of Best
Management Practice 4 then a minimum 12 knots speed must be adhered to.


(ii)
Minimum freeboard whilst fully laden 4.0 metres for all vessels other than Cape size
vessels. Minimum freeboard whilst fully laden 6.0 metres for Capesize vessels.


(iii)
Razor wire must be fitted to the entire vessel bulwark in respect of breach area.


(iv)
Vessel to be fitted with a citadel.
ADDITIONAL CLAUSES TO MV "CHAMPIONSHIP" / CARGILL INTERNATIONAL S.A.,
CHARTER PARTY DT., 05 TH NOVEMBER, 2018


(v)
The assured must register the vessel with MSCHOA (Maritime Security Centre, Horn of
Africa) [http:www.mschoa.eu] and UKMTO prior to entering the HRA and ensure that all
recommendations are fully complied with.

4.   Annual Review

This clause and any Insured amounts herein may be reviewed annually prior July 9th and adapted
as required after mutual agreement between Owners and Charterers.

Also refer to clause 106.

CLAUSE 96 - BIMCO BULK CARRIER SAFETY CLAUSE
(a)
The Charterers shall instruct the Terminal Operators or their representatives to co-operate with the
Master in completing the IMO SHIP/SHORE SAFETY CHECKLIST and shall arrange all cargo
operations strictly in accordance with the guidelines set out therein.

(b)
In addition to the above and notwithstanding any provision in this Charter Party in respect of
loading/ discharging rates, the Charterers shall instruct the Terminal Operators to load/discharge
the Vessel in accordance with the loading/discharging plan, which shall be approved by the
Master with due regard to the Vessel's draught, trim, stability, stress or any other factor which
may affect the safety of the Vessel.

(c)
At any time during cargo operations the Master may, if he deems it necessary for reasons of safety
of the Vessel, instruct the Terminal Operators or their representatives to slow down or stop the
loading or discharging.

(d)
Compliance with the provisions of this Clause shall not affect the counting of laytime.

CLAUSE 97 - INTERCLUB AGREEMENT - CARGO CLAIMS
Cargo claims as between the Owners and the Charterers shall be settled in accordance with the New
York Produce Exchange Inter-Club agreement 1996 (as amended September 2011).

CLAUSE 98 - OWNERS BANK DETAILS AND FULL STYLE
OWNERS BANK DETAILS AND FULL STYLE:

Bank
:
Alpha Bank A.E.
Piraeus Shipping Branch 960
 
Address
:
93, Akti Miaouli,
 
   
185 38 Piraeus Greece
210 - 4290208 Shipping Branch
210 - 4290116 Shipping Division
 
Fax
:
210 - 4290348 / 210 4290677
 
SWIFT Address
:
CRBAGRAAXXX
 

Customer's Details:
Champion Marine Co.,
of the Marshall Islands
c/o Seanergy Management Corp.
154 Vouliagmenis Avenue, 16674 Glyfada, Greece
   

USD Earnings Account
:
960- 01- 5006030970
 
IBAN
:
GR39 0140 9600 9600 1500 6030 970
 
USD Correspondent
:
Citibank NA, New York
399 Park Avenue
 
ADDITIONAL CLAUSES TO MV "CHAMPIONSHIP" / CARGILL INTERNATIONAL S.A.,
CHARTER PARTY DT., 05 TH NOVEMBER, 2018

   
New York N.Y. 10022 U.S.A.
 
SWIFT Address
:
CITIUS33XXX
 

CLAUSE 99- SANCTIONS / ELIGIBILITY
SANCTIONS/ELIGIBILITY
Owner represents and warrants that Owner and its vessel are not in any way directly or indirectly
owned, controlled by or related to any: (1) Cuban or Iranian interests; or (2) designated target of
economic trade sanctions promulgated by the U.N., U.S., E.U., or Switzerland, ("Sanction Laws").
Owner undertakes that Owner and its agents and representatives will fully comply with all applicable
Sanction Laws in their performance hereunder. If the goods are to be loaded or unloaded in the United
States, then Owner represents and warrants that (i) the vessel has not called at a port in North Korea
within 180 days of the vessel's estimated arrival at a U.S. port, (ii) the vessel has not engaged in any
ship-to-ship transfer with a vessel that has called at a port in North Korea within 180 days of the
vessel's estimated arrival at a U.S. port, and (iii) in the event the vessel has called at a Cuban port
within 180 days of the vessel's estimated arrival at a U.S. port, all such calls were fully permissible
under U.S. laws imposing sanctions on Cuba, and the vessel is not restricted in its ability to call at a
U.S. port under these U.S. laws. Owner undertakes that Owner, its agents and representative will not
cause Charterer to violate applicable Sanction Laws, in their performance hereunder. Owner agrees to
cooperate with Charterer's reasonable requests for information or documentation to verify compliance
with this clause.

Charterer represents and warrants that neither it nor any person or entity that owns or controls it is a
designated target of economic trade sanctions promulgated by the U.N., U.S., E.U., or Switzerland
("Sanction Laws"). Charterer undertakes that Charterer and its agents and representatives will fully
comply with all applicable Sanction Laws in their performance hereunder. Charterer undertakes that
Charterer, its agents and representatives will not cause Owner to violate applicable Sanction Laws, in
their performance hereunder. Charterer agrees to cooperate with Owner's reasonable requests for
information or documentation to verify compliance with this clause."

CLAUSE 100
Should the Vessel be requisitioned by the government of the Vessel's flag during the period of the
Charter, the Vessel shall be deemed to be off-hire during the period of such requisition, and any hire
paid by the said government in respect of such requisition period shall be retained by the Owners.
However, the Charterers shall have the option to cancel this Charter.

CLAUSE 101
The Charterers and/or their Supercargo(es) and/or their Representative(s) shall have free and
unlimited access to the whole Vessel including but not limited to bridge, holds, engine room, all
Vessels tanks including bunker, lubricating oil, sludge, ballast, water, freshwater tanks during the
charter period. Whenever required the Master must bring the Vessel to an even trim to ensure correct
bunker soundings. The Charterers and/or their Supercargo(es) and/or their Representative(s) to have
free and unlimited access to the Vessels deck and engine log books, radio logs, tank plans, calibration
scales and/or other plans as requested and are allowed to make copies of same.

CLAUSE 102
1.
The Owners warrant and undertake that throughout the currency of this Charter-Party:


1.1.
The Vessel shall not be named on the list of Special Designated Nationals and Blocked
persons (the "SDN List") as published and amended from time to time by the U.S. Treasury
Department's Office of Foreign Assets Control ("OFAC"); and


1.2.
The Vessel's registered owner shall not be named on the SDN List; and

ADDITIONAL CLAUSES TO MV "CHAMPIONSHIP" / CARGILL INTERNATIONAL S.A.,
CHARTER PARTY DT., 05 TH NOVEMBER, 2018


1.3
The Vessel shall not be owned, operated or controlled by any person or entity named on the
SDN List; and


1.4
The Vessel shall not be flagged or registered by a country that is subject to the U.S. sanctions
laws administered by OFAC from time to time (the "U.S. Sanctions") and acceptance of the
Vessel by Charterers shall not constitute a violation of US Sanctions; and


1.5
The Vessel shall not be owned by a person or entity that is registered, constituted or organized
in, or that is a citizen or resident of or located in, a country that is subject to the US Sanctions
and acceptance or trading of the Vessel by Charterers would constitute a violation of US
Sanctions; and


1.6
Acceptance and trading of the Vessel by the Charterers throughout the Charter-Party duration
shall not constitute a violation of any sanctions laws of the United Nations, the United
Kingdom, the European Union, the United States of America, by the Charterers as if it were
subject to such sanctions laws, all as amended from time to time.

2.
Should at any time during this Charter-Party Owners be in breach of any of the provisions and/ or
warranties contained in this Clause, then:


2.1
Owners shall indemnify the Charterers against any losses or damages whatsoever resulting,
and


2.2
Charterers shall have the right to immediately cancel the Charter-Party.

Clause 103 - BIMCO STANDARD I . S . M . CLAUSE
From the date of coming into force of the International Safety Management (ISM) code in relation to
the Vessel and thereafter during the currency of this Charter Party, the Owners shall procure that the
Vessel and "the Company" (as defined by the ISM code) shall comply with the requirements of the
ISM code. Upon request the Owners shall provide a copy of relevant Document of Compliance
(DOC) and Safety Management Certificate (SMC) to the Charterers.

Except as otherwise provided in this Charter Party, loss, damage, expense or delay caused by failure
on the part of "the Company" to comply with the ISM Code shall be for the Owners' account.

Clause 104 - BIMCO Piracy Clause for Time Charter Parties 2013
(a)
The Vessel shall not be obliged to proceed or required to continue to or through, any port, place,
area or zone, or any waterway or canal (hereinafter "Area") which, in the reasonable judgement of
the Master and/or the Owners, is dangerous to the Vessel, cargo, crew or other persons on board
the Vessel due to any actual, threatened or reported acts of piracy and/or violent robbery and/or
capture/seizure (hereinafter "Piracy"), whether such risk existed at the time of entering into this
Charter Party or occurred thereafter. Should the Vessel be within any such place as aforesaid
which only becomes dangerous, or may become dangerous, after entry into it, the Vessel shall be
at liberty to leave it.

(b)
If in accordance with sub-clause (a) the Owners decide that the Vessel shall not proceed or
continue to or through the Area they must immediately inform the Charterers. The Charterers
shall be obliged to issue alternative voyage orders and shall indemnify the Owners for any claims
from holders of the Bills of Lading or third parties caused by waiting for such orders and/or the
performance of an alternative voyage. Any time lost as a result of complying with such orders
shall not be considered off-hire.

(c)
If the Owners consent or if the Vessel proceeds to or through an Area exposed to the risk of
Piracy the Owners shall have the liberty:
ADDITIONAL CLAUSES TO MV "CHAMPIONSHIP" / CARGILL INTERNATIONAL S.A.,
CHARTER PARTY DT., 05 TH NOVEMBER, 2018


(i)
to take reasonable preventative measures to protect the Vessel, crew and cargo including but
not limited to re-routeing within the Area, proceeding in convoy, using escorts, avoiding day
or night navigation, adjusting speed or course, or engaging security personnel and/or
deploying equipment on or about the Vessel (including embarkation/disembarkation).


(ii)
to comply with the requirements of the Owners' insurers under the terms of the Vessel's
insurance(s);


(iii)
to comply with all orders, directions, recommendations or advice given by the Government of
the Nation under whose flag the Vessel sails, or other Government to whose laws the Owners
are subject, or any other Government, body or group (including military authorities)
whatsoever acting with the power to compel compliance with their orders or directions; and


(iv)
to comply with the terms of any resolution of the Security Council of the United Nations, the
effective orders of any other Supranational body which has the right to issue and give the
same, and with national laws aimed at enforcing the same to which the Owners are subject,
and to obey the orders and directions of those who are charged with their enforcement;

and the Charterers shall indemnify the Owners for any claims from holders of Bills of Lading or
third parties caused by the Vessel proceeding as aforesaid, save to the extent that such claims are
covered by additional insurance as provided in sub-clause (d)(iii).

(d)
Costs


(i)
If the Vessel proceeds to or through an Area where due to risk of Piracy additional costs will
be incurred including but not limited to additional personnel and preventative measures to
avoid Piracy, such reasonable costs shall be for the Charterers' account. Any time lost waiting
for convoys, following recommended routeing, timing, or reducing speed or taking measures
to minimise risk, shall be for the Charterers' account and the Vessel shall remain on hire;


(ii)
If the Owners become liable under the terms of employment to pay to the crew any bonus or
additional wages in respect of sailing into an area which is dangerous in the manner defined
by the said terms, then the actual bonus or additional wages paid shall be reimbursed to the
Owners by the Charterers;


(iii)
If the Vessel proceeds to or through an Area exposed to the risk of Piracy, the Charterers shall
reimburse to the Owners any additional premiums required by the Owners' insurers and the
costs of any additional insurances that the Owners reasonably require in connection with
Piracy risks which may include but not be limited to War Loss of Hire and/or maritime K&R.


(iv)
All payments arising under Sub-clause (d) shall be settled within fifteen (15) days of receipt
of Owners' supported invoices or on redelivery, whichever occurs first.

(e)
If the Vessel is attacked by pirates any time lost shall be for the account of the Charterers and the
Vessel shall remain on hire.

(f)
If the Vessel is seized by pirates the Owners shall keep the Charterers closely informed of the
efforts made to have the Vessel released. The Vessel shall remain on hire throughout the seizure
and the Charterers' obligations shall remain unaffected, except that hire payments shall cease as
of the ninety-first (91st) day after the seizure until release. The Charterers shall pay hire, or if the
Vessel has been redelivered, the equivalent of Charter Party hire, for any time lost in making good
any damage and deterioration resulting from the seizure. The Charterers shall not be liable for late
redelivery under this Charter Party resulting from the seizure of the Vessel.
ADDITIONAL CLAUSES TO MV "CHAMPIONSHIP" / CARGILL INTERNATIONAL S.A.,
CHARTER PARTY DT., 05 TH NOVEMBER, 2018

(g)
If in compliance with this Clause anything is done or not done, such shall not be deemed a
deviation, but shall be considered as due fulfilment of this Charter Party. In the event of a conflict
between the provisions of this Clause and any implied or express provision of the Charter Party,
this Clause shall prevail.

Clause 105 - BIMCO Slow Steaming Clause
a)
The Charterers may at their discretion provide, in writing to the Master, instructions to reduce
speed or RPM (main engine Revolutions Per Minute) and/or instructions to adjust the Vessel's
speed to meet a specified time of arrival at a particular destination.


(i)
*Slow Steaming - Where the Charterers give instructions to the Master to adjust the speed or
RPM, the Master shall, subject always to the Master's obligations in respect of the safety of
the Vessel, crew and cargo and the protection of the marine environment, comply with such
written instructions, provided that the engine(s) continue(s) to operate above the cut-out point
of the Vessel's engine(s) auxiliary blower(s) and that such instructions will not result in the
Vessel's engine(s) and/or equipment operating outside the manufacturers'/designers'
recommendations as published from time to time.


(ii)
*UltraSlow Steaming Where the Charterers give instructions to the Master to adjust the
speed or RPM, regardless of whether this results in the engine(s) operating above or below
the cutout point of the Vessel's engine(s) auxiliary blower(s), the Master shall, subject always
to the Master's obligations in respect of the safety of the Vessel, crew and cargo and the
protection of the marine environment, comply with such written instructions, provided that
such instructions will not result in the Vessel's engine(s) and/ or equipment operating outside
the manufacturers'/designers' recommendations as published from time to time.  If the
manufacturers'/designers' recommendations issued subsequent to the date of this Charter Party
require additional physical modifications to the engine or related equipment or require the
purchase of additional spares or equipment, the Master shall not be obliged to comply with
these instructions.

* Sub-clauses (a)(i) and (a)(ii) are alternatives; delete whichever is not applicable. In the absence
of deletions, alternative (a)(i) shall apply.

(b)
At all speeds the Owners shall exercise due diligence to ensure that the Vessel is operated in a
manner which minimises fuel consumption, always taking into account and subject to the
following:


(i)
The Owners' warranties under this Charter Party relating to the Vessel's speed and
consumption;


(ii)
The Charterers' instructions as to the Vessel's speed and/or RPM and/or specified time of
arrival at a particular destination;


(iii)
The safety of the Vessel, crew and cargo and the protection of the marine environment; and


(iv)
The Owners' obligations under any bills of lading, waybills or other documents evidencing
contracts of carriage issued by them or on their behalf.

(c)
For the purposes of Sub-clause (b), the Owners shall exercise due diligence to minimize fuel
consumption:


(i)
when planning voyages, adjusting the Vessel's trim and operating main engine(s) and
auxiliary engine(s);
ADDITIONAL CLAUSES TO MV "CHAMPIONSHIP" / CARGILL INTERNATIONAL S.A.,
CHARTER PARTY DT., 05 TH NOVEMBER, 2018


(ii)
by making optimal use of the Vessel's navigation equipment and any additional aids provided
by the Charterers, such as weather routing, voyage optimization and performance monitoring
systems; and


(iii)
by directing the Master to report any data that the Charterers may reasonably request to
further improve the energy efficiency of the Vessel.

(d)
The Owners and the Charterers shall share any findings and best practices that they may have
identified on potential improvements to the Vessel's energy efficiency.

(e)
**For the avoidance of doubt, where the Vessel proceeds at a reduced speed or with reduced
RPM pursuant to Sub-clause (a), then provided that the Master has exercised due diligence to
comply with such instructions, this shall constitute compliance with, and there shall be no breach
of, any obligation requiring the Vessel to proceed with utmost and/or due despatch (or any other
such similar/equivalent expression).

(f)
**The Charterers shall ensure that the terms of the bills of lading, waybills or other documents
evidencing contracts of carriage issued by or on behalf of the Owners provide that compliance by
Owners with this Clause does not constitute a breach of the contract of carriage. The Charterers
shall indemnify the Owners against all consequences and liabilities that may arise from bills of
lading, waybills or other documents evidencing contracts of carriage being issued as presented to
the extent that the terms of such bills of lading, waybills or other documents evidencing contracts
of carriage impose or result in breach of the Owners' obligation to proceed with due despatch or
are to be held to be a deviation or the imposition of more onerous liabilities upon the Owners than
those assumed by the Owners pursuant to this Clause.

Clause 106 - TRADING/TRANSITING WC INDIA
Notwithstanding the Gulf of Aden/Indian Ocean High Risk Area transit clause (Clause 95), Owners
agree to transit and trade the West Coast of India within the 12 NM zone and transit into the Persian
Gulf navigating via the piracy zone off the coast of Pakistan and Iran when requested to do so by
charterers without employing any (armed/unarmed) guards, without hardening material, without any
extra insurance and crew bonus for charterers account. If the Master decides to navigate outside the 12
NM zone against Charts orders and/or when the vessel navigates inside the piracy zone off the coast
of Pakistan and Iran then any applicable insurances net of discounts/no claim bonuses are to be
for Charterers account but Charterers will not be required to pay for any guards and/or hardening
materials and/or crew bonus.

Clause 107 - ASIAN GYPSY MOTH CLAUSE
ASIAN GYPSY MOTH CLAUSE
Owners warrant that vessel has not called at any Russian Far East port and warrant that vessel is free
from Asian Gypsy moth on delivery. Should vessel have called at any Japanese port(s) designated as
an Asian Gypsy Moth high risk port by either the Japanese Government and/or USDA and/or APHIS
and/or PPQ during the high risk period designated by any of those authorities during a period of one
year prior to the date of delivery, then Owners shall provide an Asian Gypsy Moth free certificate if
required by Charterers. However, should Asian Gypsy Moth infestation be found, fumigation to be
arranged by and paid for by Owners and the vessel to be considered as off-hire during such
fumigation and until the vessel is passed as free from Asian Gypsy Moth.

In case Charterers order the vessel to any Japanese or other far east port(s) designated as an Asian
Gypsy Moth high risk port by either the Japanese Government and/or USDA and/or APHIS and/or
PPQ during the high risk period designated by any of those authorities, then Charterers shall at their
time and expense, prior to vessel's redelivery or prior calling at any North American port whichever is
the earlier, arrange for an inspection of the vessel by a survey firm approved by any one of such
ADDITIONAL CLAUSES TO MV "CHAMPIONSHIP" / CARGILL INTERNATIONAL S.A.,
CHARTER PARTY DT., 05 TH NOVEMBER, 2018

authorities and the issue of an Asian Gypsy Moth free certificate. Should infestation be found,
fumigation to be arranged by and paid for by the Charterers and the vessel to remain on-hire during
such fumigation and until the vessel is passed as free from Asian Gypsy Moth.

Clause 108 - BIMCO PARAMOUNT CLAUSE GENERAL
The International Convention for the Unification of Certain Rules of Law relating to Bills of Lading
signed at Brussels on 25 August 1924 ("The Hague Rules") as amended by the Protocol signed at
Brussels on 23 February 1968 ("The Hague-Visby Rules") and as enacted in the country of shipment
shall apply to this contract. When the Hague-Visby Rules are not enacted in the country of shipment,
the corresponding legislation of the country of destination shall apply, irrespective of whether
such legislation may only regulate outbound shipments.

When there is no enactment of the Hague-Visby Rules in either the country of shipment or in the
country of destination, the Hague-Visby Rules shall apply to this contract save where the Hague Rules
as enacted in the country of shipment or if no such enactment is in place, the Hague Rules as enacted
in the country of destination apply compulsorily to this contract.

The Protocol signed at Brussels on 21 December 1979 ("The SDR Protocol 1979") shall apply where
the Hague-Visby rules apply, whether mandatorily or by this contract.

The carrier shall in no case be responsible for loss of or damage to cargo arising prior to loading, after
discharging, or while the cargo is in the charge of another carrier, or with respect to deck cargo and
live animals.

Clause 109 - WASHOUT CLAUSE
In the event: (A) that the Owners elect to purchase the Vessel in accordance with section 12(b) of the
Sub-Bareboat Charter; (B) of termination of the Sub-Bareboat Charter; (C) that under the Sub-
Bareboat Charter the Charterers exercise their rights under section 17 (b) (viii) of the Sub-Bareboat
Charter, this Charter shall be terminated immediately without any act by any party to this Charter.  In
the event of termination of this Charter in accordance with any of (A), (B) or (C), the Owners shall
pay to the Charterers on the Termination Date an amount equal to the product of:

i)
Washout Rate 1 and the number of days of Period 1 within the Washout Period and Period 1
Market Hire Rate; and

ii)
Washout Rate 2 and the number of days of Period 2 within the Washout Period and Period 2
Market Hire Rate; and

iii)
Washout Rate 3 and the number of days of Period 3 within the Washout Period and Period 3
Market Hire Rate; and

iv)
Washout Rate 4 and the number of days of Period 4 within the Washout Period and Period 4
Market Hire Rate; and

v)
Washout Rate 5 and the number of days of Period 5 within the Washout Period and Period 5
Market Hire Rate

For the purposes of this Clause 109:

"Washout period" means period commencing on the Termination Date and ending with the date
falling sixty (60) months after the date of delivery of the Vessel to the Charterers under this Charter.

"Period 1" means the period twelve (12) months from the date of delivery of the vessel
"Period 2" means the period twelve months (12) from the date of end of Period 1
ADDITIONAL CLAUSES TO MV "CHAMPIONSHIP" / CARGILL INTERNATIONAL S.A.,
CHARTER PARTY DT., 05 TH NOVEMBER, 2018

"Period 3" means the period twelve months (12) from the date of end of Period 2
"Period 4" means the period twelve months (12) from the date of end of Period 3
"Period 5" means the period twelve months (12) from the date of end of Period 4

"Washout Rate 1" means ten per cent (10%)
"Washout Rate 2" means eight and a half per cent (8.5%)
"Washout Rate 3" means seven per cent (7%)
"Washout Rate 4" means five and a half per cent (5.5%)
"Washout Rate 5" means four per cent (4%)

"Period 1 Market Hire Rate" means the average of the BFA Capesize for the days in Period 1 falling
within the Washout Period

"Period 2 Market Hire Rate" means the average of the BFA Capesize for the days in Period 2 falling
within the Washout Period

"Period 3 Market Hire Rate" means the average of the BFA Capesize for the days in Period 3 falling
within the Washout Period

"Period 4 Market Hire Rate" means the average of the BFA Capesize for the days in Period 4 falling
within the Washout Period

"Period 5 Market Hire Rate" means the average of the BFA Capesize for the days in Period 5 falling
within the Washout Period

"Multipartite Agreement" means the multipartite agreement (as amended and supplemented from time
to time) between, amongst others, the Owners (as sub-bareboat charterer) and the Charterers (as head
bareboat charterer and time charterer) dated or to be dated (as the case may be) on or about the date of
this Charter.

"Sub-Bareboat Charter" means the sub-bareboat charter (as amended and supplemented from time to
time) in respect of the Vessel between the Owners (as sub-bareboat charterers) and the Charterers (as
demise owners) dated or to be dated (as the case may be) on or about the date of this Charter.

"Termination Date" means the date of the termination of this Charter pursuant to this Clause 109.

Clause 110 - SCRUBBER BENEFIT CLAUSE
20% of scrubber profits to be shared by Charterers with Owners, provided MGO-HSFO price spread
(basis average Platts Rotterdam/Singapore price) is greater than $300/mt. Other details on scrubber
calculations (e.g. change of benchmark fuel from MGO to LSFO/Hybrid following ISO certification)
to be discussed in good faith, but from the start of the Charter the following calculation shall apply:

The calculation of the Scrubber Benefit for each Scrubber Benefit Period will be as follows:

The product of the Shared Scrubber Spread and the actual amount of high sulphur fuel oil used by the
vessel during a Scrubber Benefit Period

For the purposes of this Clause 110:

"Scrubber Benefit Period" means each three (3) month period during the Charter commencing 1st
January 2020, or such date that compliance with Marpol Annex VI is required.

"Rtdm HSFO" means Rotterdam IFO 380 CST – code PUAFN00 (as per Platts Bunkerwire Quotes)
ADDITIONAL CLAUSES TO MV "CHAMPIONSHIP" / CARGILL INTERNATIONAL S.A.,
CHARTER PARTY DT., 05 TH NOVEMBER, 2018

"Rtdm MGO" means Rotterdam Marine Gasoil – code AARTG00 (as per Platts Bunkerwire Quotes)

"Sing HSFO" means Singapore IFO 380 CST – code PUAFT00 (as per Platts Bunkerwire Quotes)

"Sing MGO" means Singapore Marine Gasoil – code AAXYO00 (as per Platts Bunkerwire Quotes)

"Rtdm Scrubber Spread" means average of Rtdm MGO less Rtdm HSFO during the relevant Scrubber
Benefit Period

"Sing Scrubber Spread" means average of Sing MGO less Sing HSFO during the relevant Scrubber
Benefit Period

"Total Scrubber Spread" means average of the Rtdm Scrubber Spread and the Sing Scrubber Spread

"Shared Scrubber Spread" means Total Scrubber Spread less $300/mt multiplied by twenty per cent
(20%), providing this is greater than zero

Clause 111 - SCRUBBER CLAUSE
(a)
As used in this clause, "Scrubber" refers to an exhaust gases cleaning device that will be installed
at the exhaust gases manifold of the M/E and the DGs on a vessel that reduces the vessel's
sulphur emissions by capturing them before they are released into the atmosphere.

(b)
Owners warrant that:


1.
No later than 31st December 2019 and continuing for the remainder of the CP, Scrubbers that
are compliant with this Clause will be installed, maintained in fully working condition, and,
unless ordered otherwise by Charterers, used on the vessel. Owners' duty of maintenance is
absolute.


2.
The Scrubbers will be Open loop type exhaust gas cleaning system manufactured by Hyundai
Materials, U-type


3.
The Scrubbers will ensure that the vessel's emissions from all sources (including without
limitation main engine, electricity generator engines, and boiler) do not exceed the following
thresholds:


i.
Maximum 0.5% sulphur emissions, when burning up to 3.5% sulphur fuel and steaming
at charterparty speed [up to about 14 knots laden; up to about 14 knots ballast]


ii.
Maximum 0.1% sulphur emissions, when burning up to 3.5% sulphur fuel and slow
steaming [up to about 13 knots laden; up to about 13 knots ballast]


iii.
Maximum 0.1% sulphur emissions, when burning up to 3.5% sulphur fuel and using
electricity generator engines in port; Unless local regulations forbids the usage of scrubber


4.
The Scrubbers will be compliant at all times with all applicable laws and regulations; Owners
will undertake that the scrubber manufacturer will warrant that the Exhaust Gas Cleaning
System on delivery complies with MARPOL, annex VI Reg. 4, as detailed in the IMO Annex
resolution MEPC 259 (68) of 15 May 2015 ("2015 Guidelines for Exhaust Gas Cleaning
Systems"), item 5.3.1, scheme B, and Council Directive 1999/32/EC of 26 April 1999 as
regards the sulphur content of marine fuels (as amended by Directive 2012/33/EU of the
European Parliament and of the Council of 21 November 2012), Art. 4d (1) and their
amendments thereafter; The Builder also warrants that the scrubber complies with the
ADDITIONAL CLAUSES TO MV "CHAMPIONSHIP" / CARGILL INTERNATIONAL S.A.,
CHARTER PARTY DT., 05 TH NOVEMBER, 2018

requirements of 2.2.26 Exhaust Gas Scrubber Washwater Discharge of VGP 2013 and their
amendments thereafter;


5.
When the Scrubbers are operating, the vessel will comply, and Owners will (upon request)
demonstrate compliance with, MARPOL Annex VI or applicable regional, national, or local
authorities; and

(c)
Owners shall comply with Charterers' orders regarding the use of the Scrubbers in any of the
modes described in paragraphs (b)(3) and will comply with Charterers' reasonable orders to use
the Scrubbers in other modes. The Scrubbers shall be deactivated when burning fuel that is
already compliant with applicable sulphur limits.

d)
Charterers shall pay a premium of over the normal hire rate (the "Initial Premium").  The Initial
Premium will be: US$ 350/day payable for the period commencing from the delivery of the
vessel to the Charterers under this Charter and ending twelve (12) months after the delivery of
the vessel to the Charterers under this Charter at which point the Initial Premium will be replaced
by the Fixed Premium as define under (e) below.

(e)
Charterers shall pay a premium of over the normal hire rate for any 24 hour period during which
the Scrubbers are in a state capable of continuously operating in compliance with paragraph (b),
whether or not Charterers actually employ them (the "Fixed Premium"). The Fixed Premium will
be: US$ 1,740/day payable for the period commencing twelve (12) months after the delivery of
the vessel to the Charterers under this Charter and ending with the termination of the Sub-
Bareboat Charter. And then US$ 1,740/day for the first twelve (12) months of the Optional Period
should Charterers declare the Optional Period.

(f)
Owners will install and operate a scrubber performance monitoring system that will transmit data
to Charterers' offices allowing monitoring on a continuous basis and data transmission at a
minimum every 24 hours. Owners are currently using LAROS performance monitoring system
for MV Championship (http://www.laros.gr/) and are liaising with HHI and Laros for the
integration of the scrubber performance in this system ensuring that same is transmitted ashore on
a real time basis.

(g)
Owners shall indemnify Charterers for losses, costs and consequences resulting from Owners'
breach of this Clause.

Clause 112 - BUNKERS AND 2020 GLOBAL SULPHUR CAP CLAUSE
a.
Implementation Date: For purposes of this clause, "Implementation Date" means the date
established by the IMO for the entry into force of the 0.50% m/m global sulphur cap as described
in MARPOL Annex VI (expected 1st January 2020).

b.
Bunker Quality:


1.
Charterer shall:


(i)
Prior to the Implementation Date, provide bunkers that comply with ISO standard
8217:2010, or 8217:2005 specs when 8217:2010 specs are not available; and


(ii)
After the Implementation Date, unless the vessel is fitted with fully operable scrubbers, in which case bunkers with maximum 3.5% sulphur content shall be supplied, provide bunkers (including, at their option, Marine Gasoil Oil):
ADDITIONAL CLAUSES TO MV "CHAMPIONSHIP" / CARGILL INTERNATIONAL S.A.,
CHARTER PARTY DT., 05 TH NOVEMBER, 2018


1.
with a sulphur content of no more than 0.50% sulphur bunkers ("Low Sulphur
Bunkers") or 0.1% sulphur in case of ECA/NECA or as deemed necessary by future regulations; and


2.
that comply with any ISO standard


(iii)
homogeneous blends Bunkers of different grades, specifications and/or suppliers shall be segregated into separate tanks within the Vessel's natural segregation.  The Owners shall not be held liable for any restriction in bunker capacity as a result of segregating bunkers as aforementioned. Commingling can be allowed subject to:


1.
compatibility of underlying fuels


2.
consultation with and approval by the Owner


3.
grades to be mixable and


4.
Owners not to be held responsible for any additional consumption due to additional production/accumulation of sludge other than the agreed 1.2% of vessel's daily consumption due to commingling of bunkers on board


2.
Owners warrant that, subject to Charterers' compliance with sub-paragraphs (b)(1):


(i)
the bunker tanks will be fully at Charterers' disposal;


(ii)
the vessel will comply with all applicable regulations related to emissions, including MARPOL Annex VI;


(iii)
the vessel will be able to receive, store, treat, consume and segregate (tanks' availability/capacity permitting segregation) the fuels provided by the Charterers;


(iv)
Owners will comply with any specific lawful orders from Charterers with respect to the consumption of bunkers on board;


(v)
Owners to keep Charterers fully and timely informed of information relevant to bunker management, including without limitation the quantity of bunkers in each tank and tank cleaning schedules, and to provide Charterers access to relevant documentation, including without limitation the oil record book, any available bunker delivery notes, and any available analysis results for bunkers on board (whether stemmed by Charterers or not);


(vi)
Unless otherwise ordered by Charterers, Owners to ensure segregation of bunkers in storage tanks and, to the extent possible, avoid commingling in all bunker tanks, including settling and service tanks.

c.
Bunkers on Delivery


1.
Charterers on delivery shall take over and pay Owners for the quantity of bunkers on board on delivery at the Platts Singapore prices for each grade prevailing at the day of delivery.


(i)
IFO.... (max sulphur 3.5%)


(ii)
ULSFO…. (max 0.1% sulphur)
ADDITIONAL CLAUSES TO MV "CHAMPIONSHIP" / CARGILL INTERNATIONAL S.A.,
CHARTER PARTY DT., 05 TH NOVEMBER, 2018



(iii)
MGO ... (max 0.1% sulphur)


(iv)
LSFO ... (max 0.5% sulphur)

d.
Bunkers on Redelivery


1.
Owners shall take over and pay Charterers for the bunkers remaining on board on redelivery at Platts Singapore prices for each grade prevailing at the day of redelivery.


2.
If no Platts price is available for the grade in question, the price shall be established by Charterers' last bunkering invoice for the grade in question.


3.
Charterers' payment under this clause may be deducted from the last sufficient hire payments.


4.
The Vessel shall be redelivered with the about same quantity of each of the grades described in paragraph (c)(1) as were on the vessel on delivery, save that the quantity of IFO on delivery shall be replaced by the same quantity of LSFO, ULSFO, and/or MGO on redelivery.  In any event, the grades and quantities of bunkers on redelivery shall always be appropriate and sufficient to allow the Vessel to reach safely the nearest port at which fuels of the required types are available.

e.
Non-Pumpable Residue and Tank Cleaning


1.
No later than six months before the Implementation Date, Owners and Charterers shall begin consultations to agree actions and timeline for transitioning to Low Sulphur Bunkers by the Implementation Date; and


2.
Prior to Charterers' stemming Low Sulphur Bunkers, Owners shall clean the relevant tank(s) and piping system, including removing all remnants of non-compliant fuel and non-pumpable residue, at their own cost, risk, and time.

f.
Non-Compliant Fuel and Non-Pumpable Residues Remaining on Board


1.
Should the IMO or another applicable regional, national, or local authority implement a prohibition on carrying non-compliant bunkers and/or non-pumpable residue in bunker tanks:


(i)
No later than six months prior to the date of implementation of such non-carry prohibition, the parties shall begin consultations to agree the actions and timeline for ensuring compliance.


(ii)
Charterers shall, by the applicable deadline, remove any non-compliant bunkers at their own cost, risk and time, unless Charterers would have been able to burn such bunkers but for Owners' breach or negligence, in which case the relevant unburned bunkers shall be removed by Owners at their own cost, risk and time.


(iii)
Owners shall, by the applicable deadline, clean the relevant tank(s) and piping system, including removing all remnants of non-compliant fuel and non-pumpable residue, at their own cost, risk, and time

**********
EXHIBIT D
Scrubber Supply Contract



SALE AND PURCHASE AGREEMENT

FOR

ONE EXHAUST GAS CLEANING SYSTEM

BETWEEN

CHAMPION MARINE CO.

AND

HYUNDAI MATERIALS CORPORATION







THIS AGREEMENT, made this 28 day of September 2018, by and between CHAMPION MARINE CO., a corporation organized and existing under the laws of Marshall Islands, having its registered address at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro MH96960, Marshall Islands] (hereinafter called the "BUYER"), the party of the first part, and HYUNDAI MATERIALS CORPORATION, a corporation organized and existing under the laws of Korea, having its principal office at 9F Shin-An Bldg., 512, Teheran-ro, Gangnam-gu, Seoul 06179, Korea (hereinafter called the "BUILDER," the party of the second part (the BUILDER and the BUYER hereinafter collectively referred to as the "Parties" or individually as a "Party").



WITNESSETH


A.
The BUILDER intends to design, build, equip, complete and deliver one (1) exhaust gas cleaning system to Yiu Lian Zhoushan Shipyard (the "YARD") for the BUYER and to sell the exhaust gas cleaning system to the BUYER under this Agreement.

B.
The BUYER intends to purchase and take delivery of such exhaust gas cleaning system from the BUILDER.


ARTICLE I — SCOPE OF THE AGREEMENT AND AGREEMENT DOCUMENTS

1.
Scope of the Agreement:

In accordance with this Agreement, the BUILDER shall sell and undertake to deliver and the BUYER shall buy and accept:

Delivery and commissioning of exhaust gas cleaning system for the one (1) Vessel (as defined below) being built by the Yard, as specified in Appendix No. 1, to this Agreement (referred to as the "VESSEL EQUIPMENT").

"Vessel" shall mean the MV Championship, IMO no. 9403516

The BUILDER may, at its sole discretion and responsibility, appoint suitable and technically reliable subcontractors and subcontract any portion of the construction work of the VESSEL EQUIPMENT.

2.
Agreement Documents

The sale and delivery of the VESSEL EQUIPMENT shall be performed by the BUILDER and accepted by the BUYER in accordance with this Agreement and with the following Appendices, which shall be construed as and form an integral and inseparable part of this Agreement and which are incorporated hereto as:


–
Appendix No. 1 Description and Technical Specification of the VESSEL EQUIPMENT

–
Appendix No. 2 Scope of Work by the BUILDER
The priority of the Appendices is valid in the order listed above. In case of any discrepancy or inconsistency between the terms of this Agreement and those specified in any of the Appendices thereto, the text of this Agreement shall take precedence over the Appendices.

ARTICLE II — PURCHASE PRICE AND TERMS OF PAYMENT

1.
Purchase Price:

The purchase price of the VESSEL EQUIPMENT is US$ 1,449,000 (the "Vessel Equipment Purchase Price"). The purchase price excludes any taxes, duties, stamps, VAT and fees applicable to the purchase of the VESSEL EQUIPMENT.

The Builder shall bear and pay all taxes duties, stamps, VAT and fees incurred in Korea in connection with execution and/or performance of this Agreement in its capacity as Builder.

The Buyer shall bear and pay all taxes, duties, stamps and fees incurred outside Korea in connection with execution and/or performance of this Agreement in its capacity as Buyer, except for taxes, duties, stamps and fees imposed upon those items to be procured by the Builder for construction of the VESSEL EQUIPMENT.

2.
Currency:

Any and all payments by the BUYER to the BUILDER under this Agreement shall be made in United States Dollars.

3.
Terms of Payment for the Vessel Equipment:

The Vessel Equipment Purchase Price shall be paid by the BUYER to the BUILDER in installments (collectively, the "Installments," individually, an "Installment") as follows:


(a)
First Installment equal to 40% of the Vessel Equipment Purchase Price (US$579,760): Within fourteen (14) days after signing of this Agreement


(b)
Second Installment equal to 40% of the Vessel Equipment Purchase Price (US$579,760): Within fourteen (14) days after the VESSEL EQUIPMENT is ready for dispatch in Korea (EX Work from the Builder) to the port mentioned in Article 3.1 below (the "Port")


(c)
Third Installment equal to 10% of the Vessel Equipment Purchase Price (US$144,900): On the date falling fourteen (14) days after the successful commissioning of the VESSEL EQUIPMENT


(d)
Fourth Installment equal to 10% of the Purchase Price (US$144,900):  On the date falling (14) days after the Vessel's obtainment of the class approval

4.
Method of Payment:
For the value on each applicable Installment payment date, the BUYER shall remit the amount of such Installment by telegraphic transfer to KEB Hana Bank (herein called the "Bank") on account and in favour of the BUILDER, Account No. 374-910004-20732.

The Vessel Equipment Purchase Price shall be paid in full by the BUYER without any set off, counterclaim or deduction and are not subject to any settlement, discount or other special terms of payment unless the BUILDER has consented thereto in writing.

5.
Interest on Delayed Payment

If the Installment payment is not received on the due date, interest at the rate of LIBOR plus 1.0% will be charged from that date until payment is made.
ARTICLE III — DELIVERY

1.
Delivery

Delivery of the VESSEL EQUIPMENT shall take place under the conditions as set forth below:

 
Delivery time
On or prior to May 31, 2019
 
 
Delivery conditions
DDP (Yard)
 
 
Delivery according to
INCOTERMS 2010
 

Notwithstanding the delivery conditions set out in this Article 3.1 or any other terms herein, the BUYER acknowledges and agrees that all delivery costs from the port in Korea to the Yard shall be borne by the BUYER.

In case the shipyard location changes for reasons beyond the control of the Buyer, the Buyer shall notify the Builder in writing at the latest the date falling thirty (30) days prior the delivery date set out above in this Article 3.1 and the Builder shall arrange the Vessel Equipment to be dispatched to the new destination as per the terms set out above in this Article III.1 (save for change from the Yard to such new destination).

2.
Ownership/Insurance upon Delivery

The ownership of the VESSEL EQUIPMENT shall be transferred to the BUYER at the date of delivery of the VESSEL EQUIPMENT to the Yard or any other new destination as set out in the last paragraph of Article 3.2 above. The VESSEL EQUIPMENT shall remain insured by the BUILDER against loss and damage whatsoever until the date of delivery, and, after the delivery, the VESSEL EQUIPMENT shall be insured by the BUYER.
ARTICLE IV — DELAYS

1.
Delay due to Circumstances mentioned in Article XIII

If delay in delivery is caused by any of the circumstances mentioned in Article XIII or by an act or omission on the part of the BUYER, the time for delivery may be extended by a period which correspond to the delay in delivery having regard to all circumstances in the case, and in case the delay is caused solely or partly by the BUYER, the BUILDER shall be entitled to a compensation for any additional costs, damages or losses that the BUILDER may incur.

2.
BUILDER's Notice of Delay

If the BUILDER anticipates that it will not be able to deliver the VESSEL EQUIPMENT at the time for delivery, the BUILDER shall forthwith notify the BUYER thereof in writing, stating the reason, and, if possible, the time when delivery can be expected

The Builder will not be liable for delay in the delivery of Vessel Equipment to the Buyer if the delay is caused by:

(1)
A Force Majeure Event (as further described in ARTICLE XIII);
(2)
The Buyer's failure to comply with the payment obligations;
(3)
The Buyer's failure to allow access to the Vessel, the Yard or other infrastructure and to provide in a timely manner the necessary information and instructions which are necessary for the Builder's delivery of the Vessel Equipment; and
(4)
The Buyer's failure to receive the Vessel Equipment within the agreed delivery time;
and
(5)
Any other material breach by the BUYER hereunder or any occurrence of an event disrupting the delivery which is beyond the BUILDER's control.

3.
Remedies for the BUILDER's delay

If the BUILDER delays the delivery for the VESSEL EQUIPMENT not because of any of the reasons set out in Article 4.2 (1) through (5) but by its own fault, the BUYER shall be entitled to liquidated damages from the date on which delivery should have taken place provided that the BUILDER is notified within 15 working days from the BUYER's receipt of the delayed goods. The liquidated damages shall be payable at a rate of 1% of the purchase price for the delayed VESSEL EQUIPMENT for each completed week of delay. The liquidated damages shall not exceed 5% of the purchase price of the VESSEL EQUIPMENT in question. The right to liquidated damages shall be the BUYER's sole remedy in case of delay, and the BUYER is not entitled to any other remedies in relation to such delay, except that the BUYER may cancel the sale and purchase of the VESSEL EQUIPMENT under this Agreement by serving upon the BUILDER a notice of cancellation in case the delay exceeds, other than for any of the reasons set out in Article 3 (1) to (5) above, six (6) weeks from the date of delivery set out in Article 3.1.

ARTICLE V — WARRANTY

1.
BUILDER'S WARRANTY

The BUILDER warrants that the VESSEL EQUIPMENT meets all specifications set forth in Appendix No. 1. The BUILDER specifically disclaims all warranties of functionality, merchantability and fitness of the VESSEL EQUIPMENT for a particular purpose except as may be specifically set forth in Appendix 1 and this Article 5.

The BUILDER undertakes in accordance with the below-mentioned provisions to repair or replace any defects in the VESSEL EQUIPMENT as may be set out in Appendix No. 1 and this Article 5.

The BUILDER warrants to the BUYER that the VESSEL EQUIPMENT sold to the BUYER pursuant to this Agreement will be free from defects in material and workmanship; and will conform to the agreed specifications for a period of 12 months of the VESSEL EQUIPMENT commissioning date, or 18 months from delivery, whichever comes first, (provided, however, 5 years for the scrubber body) for the Vessel, provided that:


(a)
The BUILDER is promptly notified (within the warranty period) of any warranty claim; and


(b)
The claimed defect in the VESSEL EQUIPMENT was not caused by misuse, static discharge, abuse, neglect, improper handling, installation, unauthorized repair, alteration or accident. Modification of the VESSEL EQUIPEMENT by the BUYER, or at the BUYER's direction, unless specifically authorized in writing by the BUILDER, shall invalidate the above warranty.

The BUILDER's liability under this warranty is limited to repairing, replacing or issuing a credit to the BUYER in the amount of the unit price of the part in defect, at its election for any such claim.

The warranty of the BUILDER shall only comprise defects occurring under the pre-supposed conditions and under the proper use of the VESSEL EQUIPMENT. The BUILDER's warranty does not cover normal wear and tear parts, defects caused by improper use (including, but not limited to, defects caused by faulty maintenance, incorrect installation (meaning installation other than as per the written installation instructions of the BUILDER ("Installation Instructions")) of the Vessel Equipment, by alterations undertaken without the consent of the BUILDER or by faulty repairs made by the BUYER.

The Builder warrants that the Exhaust Gas Cleaning System on delivery complies with MARPOL, annex VI Reg. 4, as detailed in the IMO Annex resolution MEPC 259 (68) of 15 May 2015 ("2015 Guidelines for Exhaust Gas Cleaning Systems"), item 5.3.1, scheme B, and Council Directive 1999/32/EC of 26 April 1999 as regards the sulphur content of marine fuels (as amended by Directive 2012/33/EU of the European Parliament and of the Council of 21 November 2012), Art. 4d (I) and their amendments thereafter; provided, however, that the Builder shall have no obligation of such warranty if (i) the contents of this Agreement provides
otherwise; (ii) the applicable parts of such warranty (but for such warranty) are not specifically required by this Agreement; (iii) the Vessel Equipment is manufactured in accordance with Appendix no. 1 or, as the case may be, the Buyer's instructions, orders or demands with regard to the designs, blueprints, architectural plan, layout, and material or otherwise analogous in nature and/or (iv) such warranty is in relation to requirement that became effective after the date hereof

The Builder warrants that the scrubber complies with the requirements of 2.2.26 Exhaust Gas Scrubber Washwater Discharge of VGP 2013 and their amendments thereafter; provided, however, that the Builder shall have no obligation of such warranty if (i) the contents of this Agreement provides otherwise; (ii) the applicable parts of such warranty (but for such warranty) are not specifically required by this Agreement; (iii) the Vessel Equipment is manufactured in accordance with Appendix no. 1 or, as the case may be, the Buyer's instructions, orders or demands with regard to the designs, blueprints, architectural plan, layout, and material or otherwise analogous in nature and/or (iv) such warranty is in relation to requirement that became effective after the date hereof.

Subject to the fourth paragraph of this Article 5.1, the Buyer shall give notice to the Builder in writing as promptly as possible, in any event no later than the earlier date between the date falling thirty (30) days after discovery of any defect and the expiry of the warranty period (the "Warranty Notice Date") for which a claim is to be made under the warranties in ARTICLE V which shall include particulars as to the nature and cause of the defect and the extent of the damage caused thereby, if any. For the avoidance of doubt, the Builder will be under no obligation with respect to these warranties in respect of any claim for defects discovered after the expiry of the warranty period or any claim for defects made after the Warranty Notice Date.

2.
Sole Remedies

The remedies pursuant to Article 5.1 shall be the BUYER's sole remedies in case of a defect in the VESSEL EQUIPMENT or incorrect Installation Instruction.

ARTICLE VI — BUYER'S OBLIGATIONS IN RELATION TO THE YARD

The BUYER shall arrange for and ensure that VESSEL EQUIPMENT will be maintained in the same condition as at the time of delivery until after installation, commissioning and class approval.

The BUYER shall procure and provide the Shipbuilding Contract for the Vessel, plans, drawings and specifications and any other documents or information (the "Vessel Documents") which the BUILDER may require for its performance of this Agreement.

As to the Vessel Documents, the BUYER represents and wan - ants (i) the accuracy thereof, and (ii) the "as build" condition and performance of the Vessel at the time of the Agreement and at the time of the installation of the Vessel Equipment.

The BUYER acknowledges and agrees that, notwithstanding the Vessel Documents provided to the BUILDER, the BUILDER shall have no obligation to the BUYER or the YARD for the integrity or soundness of the design, construction or operation of the VESSEL with the VESSEL EQUIPMENT installed and commissioned.

THE BUYER shall indemnify, defend and hold harmless the BUILDER, its affiliates and their respective officers, directors, employees and agents from and against any claims against the BUILDER by the Yard seeking contributions from the BUILDER for the damages being claimed by the BUYER against the Yard.


ARTICLE VII — PRODUCT LIABILITY

Unless mandatory provisions in applicable law apply, the following shall govern the BUILDER's product liability:


(a)
The BUILDER shall be liable for personal injury only if it is proved that such injury was caused solely by a defect in the VESSEL EQUIPMENT or is attributable solely to negligent Installation Instruction on the part of the BUILDER or others for whom the BUILDER was responsible.


(b)
The BUILDER shall be liable for any direct damage or loss to property (other than the VESSEL EQUIPMENT), if such damage or loss is caused solely by defects in the VESSEL EQUIPMENT or is solely attributable to negligent Installation Instruction on the part of the BUILDER or others for whom the BUILDER was responsible.


(c)
The BUILDER's liability is in any event limited as set out in Article XII. It is emphasized however, that any direct damage to property (other than the VESSEL EQUIPMENT, including, but not limited to, damage to other parts of the vessel or on the vessel itself), caused solely by defects in the VESSEL EQUIPMENT or solely attributable to negligent incorrect Installation Instruction on the part of the BUILDER or others for whom the BUILDER was responsible, as detailed in Article 7.1(b) shall, for the purpose of this Article 7.1(c), not be considered indirect or consequential. For the sake of good order any indirect or consequential loss or damage steaming from such direct damage to property shall be excluded in accordance with Article 12.1 below.


(d)
If a claim for damage as described in this Article VII is lodged against one of the Parties, the latter Party shall forthwith inform the other Party thereof in writing.


(e)
The BUILDER and the BUYER shall be mutually obliged to let themselves be summoned to the court or arbitral tribunal examining claims for damages lodged against one of them on the basis of damage allegedly caused by the VESSEL EQUIPMENT.


ARTICLE VIII — INTELLECTUAL PROPERTY

1.
Exclusive to BUILDER

The BUYER on behalf of itself and the Yard acknowledges the BUILDER's exclusive right, title and interest in and to any and all intellectual property rights which are utilized for, incorporated in or related to the design, function, structure and/or manufacture of the VESSEL EQUIPMENT (including, but not limited to the Installation Instructions). The BUYER on behalf of itself and the Yard agrees that such intellectual property rights shall remain the exclusive property of the BUILDER and that the BUYER shall not acquire any rights or interest in such intellectual property rights. Any compensation for the use of the Intellectual Property Rights related to the VESSEL EQUIPMENT in accordance with this Agreement is included in the purchase price.

All rights, title and interest in or to any and all inventions, improvement and/or modifications to the VESSEL EQUIPMENT shall be the exclusive property of the BUILDER and the BUYER shall not acquire any rights or interest thereto, except as specifically agreed in writing by the Parties.

2.
Parties' Warranty

The Parties warrant, to the best of their knowledge, that no intellectual property right of a third party is infringed during each Party's performance of its obligations under the Agreement and that such performance does not give rise to any third party claims.

ARTICLE IX — CONFIDENTIALITY

The Parties must strictly ensure that all know-how, trade secrets or other information of a confidential nature of which a Party has obtained knowledge as a consequence of this Agreement and which is not (i) already a part of the public domain, (ii) required to be disclosed by applicable law or governmental regulation, (iii) already in the possession of this Party at the time of entering into this Agreement or (iv) disclosed to this Party by a third party entitled to do so shall remain confidential and thus may only be used by the receiving Party to fulfil its obligations under this Agreement, either during the term of this Agreement or after its termination or cancellation, unless (a) specifically accepted by the relevant Party or (b) disclosure is required to be made due to applicable laws and regulations of the NASDAQ or the Securities and Exchange Commission applicable to the BUYER.

ARTICLE X — SUPERVISION

1.
Scope and Details for Supervision

The BUILDER will in addition to the delivery of the VESSEL EQUIPMENT carry out supervision of the mechanical and electrical installation of the VESSEL EQUIPMENT.

The Scope and details for the supervision are as set forth below:


–
The scope of supervision by the BUILDER shall be limited to the parts comprising the VESSEL EQUIPMENT as delivered by the BUILDER.


–
As to the period for supervision, the BUYER shall give a 4-week prior notice on or before the start of the same.


–
Each period of supervision shall last not more than 4 weeks, and, where there has been a delay due to a cause not attributable to the BUILDER (including, but not limited to, the YARD) and the BUILDER was not able to perform the supervision the commissioning relating to the VESSEL EQUIPMENT, such delay ("Supervision Delay") shall also be included in such 4-week period.


–
In the event that the 4-week period for supervision has exceeded due to the Supervision Delay, the BUYER upon demand shall pay the additional costs therefor to the BUILDER.


–
The BUILDER's working hours for supervision shall not be longer than 8 hours per day.

The BUYER shall arrange for and ensure access to the Yard for the BUILDER's representatives to supervise installation.

The BUYER shall indemnify the BUILDER from all costs by the BUILDER caused by the Delay.

2.
Installation by BUYER

Installation will be carried out by the BUYER, who shall, at its own expense, provide the skilled and unskilled labor, all equipments and everything necessary for the installation of the VESSEL EQUIPMENT, which installation shall be supervised by the BUYER.

The BUYER shall be responsible for installation of the VESSEL EQUIPMENT subject only to the BUILDER being responsible for negligent incorrect Installation Instructions provided in writing by the BUILDER, and, for the avoidance of doubt, the BUILDER's liability for such negligent incorrect Installation Instructions shall be limited to repairing, replacing or issuing a credit in the amount of the unit price of the part in defect as set out in Article 5.1 above.
ARTICLE XI — COMMISSIONING

1.
Scope and Details, Costs

When installation has been completed by the BUYER, commissioning shall be carried out pursuant to the following:


–
The scope of commissioning by the BUILDER shall be limited to the parts of comprising of the Vessel Equipment as delivered by the BUILDER


–
As to the period for commissioning, the BUYER shall give a 4-week prior notice on or before the start of the same.


–
The period of commissioning shall last not more than 4 weeks, and, where there has been a delay due to a cause not attributable to the BUILDER (including, but not limited to, the YARD) and the BUILDER was not able to perform the commissioning relating to the VESSEL EQUIPMENT, such delay ("Commissioning Delay") shall also be included in such 4-week period.


–
In the event that the 4-week period for commissioning has exceeded due to the Commissioning Delay, the BUYER upon demand shall pay the additional costs therefor to the BUILDER.


–
The BUILDER's working hours for commissioning shall not be longer than 8 hours per day.

The BUYER shall arrange for and ensure access to the Yard for the BUILDER's representatives to undertake commissioning.

2.
Costs

The BUYER shall bear all costs of the commissioning.

The BUILDER shall bear all costs relating to its personnel and its other representatives; provided, however, that the BUYER shall indemnify the BUILDER from all costs by the BUILDER caused by the Delay.

The BUYER shall provide free of charge any power, lubricants, water, fuel, raw materials and other materials required for the commissioning.

3.
Certification

Upon completion the BUILDER will provide the BUYER with a commissioning report prepared by the BUILDER which certify the commissioning.




In case commissioning has not taken place 12 months after installation of the VESSEL EQUIPMENT and this is caused solely by the BUILDER's own fault, or in case the BUILDER deems that commissioning is not possible, the BUYER's sole remedy shall be to demand a reduction of the purchase price in proportion to the reduced value of the VESSEL EQUIPMENT. For the avoidance of doubt this implies that the BUYER cannot terminate this Agreement and/or, in excess of what is set out in this Article, claim any reimbursement of costs or payment of damages due to the VESSEL EQUIPMENT not being commissioned.

After successful commissioning and certification (BUYER will do its utmost best to assist in soonest certification), all changes upon request of the BUYER shall be paid by the BUYER.

ARTICLE XII —LIMITATION OF LIABILITY

1.
General Limitation

Except as otherwise permitted pursuant to the second sentence of Article 7.1(c), in no event shall the BUILDER be liable for any special, incidental, consequential, direct or indirect loss or damage of any kind (including, but not limited to, loss of profits (including, without limitation, those in relation to charterhire or other vessel earnings or repair and replacement costs for any part of any Vessel including the Vessel Equipment), delays or damages to the business reputation) incurred by or claimed against the BUYER or any other person in connection with the transactions contemplated by this Agreement.

2.
Exclusion and Limitation of Liability

The BUYER acknowledges and agrees that the BUILDER shall have no responsibility or obligation for the design, construction or operation of the Vessel fitted with the Vessel Equipment, but only for the VESSEL EQUIPMENT, the operation and performance of the Vessel Equipment itself pursuant to Article V and the accuracy and sufficiency of the Installation Instructions, and that the BUILDER's liability therefor shall be limited to repairing, replacing or issuing a credit in the amount of the unit price of the part in defect, at its election for any such claim.

3.
Extent of Liability

The BUYER hereby expressly waives and forgoes any right to punitive, exemplary or similar damages, if any, that the BUYER may have against the BUILDER hereunder or otherwise. Furthermore, notwithstanding anything herein to the contrary, the BUILDER's aggregate liability hereunder or otherwise shall in no event exceed ten percent (10%) of the price of the VESSEL EQUIPMENT sold hereunder.

The limitations above shall apply to the liability irrespective of any theory of liability (including, but not limited to, whether in an action for contract, strict liability or tort (including negligence) or otherwise).

ARTICLE XIII — FORCE MAJEURE

1.
Force Majeure

Neither Party shall be liable for events beyond a Party's control and which that Party could not reasonably have anticipated or should have prevented, and which result in that Party not being able to comply with its obligations under the Agreement, such as loss of vessel carrying the Vessel Equipment as cargo (including, hijacking, total loss or constructive loss), labour conflict, stroke of lightning, accidental fire, war, mobilisation or military calling up of a major extent, requisition, confiscation, stipulations by authorities, insurrection and riot, as well defects or delays in deliveries from sub-suppliers due to circumstances stated above. If such circumstance has occurred, the time of compliance shall be moved forward for a period of time corresponding to the duration of the obstacle.

2.
Notice

A Party relying on this force majeure provision must immediately and in any event within 24 hours notify the other Party thereof in writing with supporting documents and must further specify the nature of the impediment, the expected duration thereof and submit all supporting evidence. Additional a notice must be given immediately, and always within 1 day, after the impediment has ceased.

ARTICLE XIV — MISCELLANEOUS

1.
This Agreement has been prepared in English and shall be executed in duplicate and in such number of additional copies as may be required by either Party respectively.

2.
Any amendments to this Agreement shall be made in writing and signed by both Parties in order to be valid.

3.
If any provision under this Agreement is found to be inconsistent with or void under any applicable law, the validity of the remaining provisions shall not be affected thereby. In such case the Parties shall agree to replace the ineffective provision with a provision of fundamentally the same contents, which, however, is legally valid, binding, and enforceable under the said law.

4.
Failure by any Party at any time or times to require performance of any provision of this Agreement shall in no way affect its rights to enforce the same, and the waiver by any Party of any breach or non-performance of any provision of this Agreement shall not be construed to be a waiver by such Party of any succeeding breach of such provision or waiver by such Party of any breach of any other provision hereof

5.
This Agreement may not be assigned by either Party unless consented to in writing by the other Party.

6.
Upon or before delivery or in connection with the installation of the Exhaust Gas Cleaning System or in connection with the commissioning of the Exhaust Gas Cleaning System, the Builder shall provide the Buyer with (in electronic format), all technical and operational information, and all installation and maintenance manuals in respect of the Exhaust Gas Cleaning System, including appropriate certification under MARPOL, MPEC and a list of recommended scheduled maintenance activities in relation to the Exhaust Gas Cleaning System. It is understood that some documentation may not be available due to circumstances outside the Builder's control, such as missing or delayed validation by the classification society or delayed MARPOL approval. The Builder shall make reasonable endeavors to promptly provide such documents as soon as possible.

7.
In addition to the provision of the information in Clause 6, the Builder undertakes to provide the Buyer with any information which the Buyer may reasonably request in relation to the Vessel Equipment including but not limited to any documents required for the import of the Vessel Equipment to the location of the Yard.

8.
No variation of the Agreement, including the introduction of additional terms and conditions shall be effective unless it is agreed in writing by and between the Parties.

9.
The Builder is entitled to subcontract in whole or in part any of the performance of the Vessel Equipment to a third party without the consent of the Buyer. The Builder is responsible for such subcontractor's acts and omissions as if they were the Builder's.
ARTICLE XV — APPLICABLE LAW AND JURISDICTION

1.
Governing Law

This Agreement is governed by English law.

2.
Arbitration

In the event of any dispute between the Parties as to any matter arising out of or relating to this Agreement or any stipulation herein or with respect hereto which cannot be settled by the Parties themselves, such dispute shall be settled by arbitration in London, England in accordance with the London Maritime Arbitrators Association Terms. The award thereof shall be final and binding upon both parties.

3.
Alteration of Delivery Date

In the event of arbitration of any dispute arising from any matters occurring prior to delivery of the VESSEL EQUIPMENT, all delays in delivery of the VESSEL EQUIPMENT due to such arbitration shall be deemed to be permissible delays and the delivery date shall be automatically postponed and/or extended for the period of time occupied by such arbitration commencing with the notice to arbitrate and concluding with the publication of the award.

ARTICLE XVI — TERM AND TERMINATION

1.
The Term.

The Agreement will commence on the date stated on the first page of this Agreement and will continue for five (5) years from the Vessel leaving the yard after installation unless terminated in accordance with the Agreement.

2.
Termination for material breach.

Either Party will be entitled to terminate this Agreement fully or partly if the other Party is in material breach of this Agreement and fails to remedy that material breach within thirty (30) days of written notice of that material breach. For the avoidance of doubt, this remedy period only applies where a material breach is capable of remedy, and, for clarity, any material breach by the Builder shall mean only in a case where the Buyer's replacement or issuance of credit obligation as set out in the fourth paragraph of Article V exceeds 50% of the Purchase Price.

In case such material breach cannot be remedied, a Party may terminate the Agreement by written notice with immediate effect, without prejudice to any claim for damages that such Party may have against the other Party and the Party being on a material breach of the Agreement shall also make due compensation to the other Party for any loss and for any and all expenses incurred together with interest; provided, however, that any such claims for damages or compensations shall be deemed to have been satisfied in full, if, in case of the BUILDER' s material breach, the BUILDER refunds the full Purchase Price and the BUYER delivers the VESSEL EQUIPMENT to the BUILDER in accordance with the Builder's instructions and on the Builder's expense and risk.



IN WITNESS WHEREOF , the parties hereto have caused this Agreement to be duly executed in Glyfada, Athens, Greece on the day and year first above written.


The BUYER:
 
The BUILDER
     
CHAMPION MARINE CO.
 
HYUNDAI MATERIALS CORPORATION
     
/s/ Stavros Gyftakis
 
/s/ CHO, Wook JE
By:    Stavros Gyftakis
 
By:   CHO, Wook JE
Title: Director
 
Title: General Manager








 














































Exhibit 4.93
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (as it may be amended from time to time in accordance with the terms hereof, the “ Agreement ”) is made and entered into effective as of 7 November, 2018, by and among Seanergy Maritime Holdings Corp., a Marshall Islands corporation (the “ Company ”), and Cargill International SA (together with its transferees that become party hereto, the “ Investor ”).
RECITALS
A.   As partial consideration in respect of the agreements among, inter alios , the Company’s subsidiaries, Champion Ocean Navigation Co. Limited and Champion Marine Co. and the Investor regarding the sale and purchase, bareboat and time chartering of the vessel M/V Championship (the “ Transaction ”), the Company issued 1,800,000 shares (the “ Vessel Sale Shares ”) of the Company’s common stock, par value $0.0001 per share (the “ Common Stock ”), to the Investor.
B.   The offering of the Vessel Sale Shares was made by the Company pursuant to an exemption from the registration requirements of the Securities Act.
C.   Simultaneously with, or, as the case may be, prior to, the closing of the Transaction, the Vessel Sale Shares were issued to the Investor.
D.   The execution and delivery of this Agreement by the Company is a condition precedent to the closing of the Transaction and the Investor acquiring the Vessel Sale Shares.
NOW, THEREFORE , in consideration of the foregoing recitals and the mutual representations, warranties, covenants and promises contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1.   Definitions . As used in this Agreement, the following terms shall have the following meanings:
“ Advice ” shall have the meaning set forth in Section 6(b).
“ Agreement ” shall have the meaning set forth in the preamble above.
“ Availability Date ” shall have the meaning set forth in Section 3(j).
“ Business Day ” means any day except Saturday, Sunday and any day which shall be a federal legal holiday or a day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.
“ Commission ” means the Securities and Exchange Commission or any successor agency having jurisdiction under the Securities Act.
“ Common Stock ” shall have the meaning set forth in the recitals above.

“ Effectiveness Period ” shall have the meaning set forth in Section 3(b).
“ Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“ Holder ” or “ Holders ” means the Investor and any subsequent permitted transferees or assignees under Section 6(f) of this Agreement.
“ Indemnified Party ” shall have the meaning set forth in Section 6(c).
“ Indemnifying Party ” shall have the meaning set forth in Section 6(c).
“ Investor ” shall have the meaning set forth in the preamble.
“ Losses ” shall have the meaning set forth in Section 6(a).
“ Other Holders ” shall have the meaning set forth in Section 2(b).
“ Piggyback Registration ” shall have the meaning set forth in Section 2(a).
“ Plan of Distribution ” shall have the meaning set forth in Section 3(b).
“ Proceeding ” means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened.
“ Prospectus ” means the prospectus included in the Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated under the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by the Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus.
“ Registrable Securities ” means (i) all Vessel Shares held by the Holder, (ii) all shares of Common Stock issuable upon exercise, conversion or exchange of any option, warrant or convertible security not then subject to vesting or forfeiture to the Company and (iii) all shares of Common Stock directly or indirectly issued or then issuable with respect to the securities referred to in clauses (i) or (ii) above by way of a stock dividend or stock split, or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization. As to any particular Registrable Securities, such securities shall cease to be Registrable Securities when (w) a Registration Statement with respect to the sale of such securities shall have become effective under the Securities Act and such securities shall have been disposed of in accordance with such Registration Statement, (x) such securities shall have been transferred pursuant to Rule 144, (y) such Holder is able to immediately sell such securities under Rule 144 without application of the volume restrictions of paragraph (e) of Rule 144, as determined by counsel to the Holder, or (z) such securities shall have ceased to be outstanding.
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 “ Registration Statement ” means each registration statement used for any registration of Registrable Securities hereunder, including the Prospectus, amendments and supplements to the registration statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto, and all material incorporated by reference or deemed to be incorporated by reference in the Registration Statement.
“ Rule 424 ” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.
“ Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“ Suspension Certificate ” shall have the meaning set forth in Section 6(d).
“ Trading Market ” means the New York Stock Exchange, the NASDAQ Global Market or the NASDAQ Capital Market; and, with respect to any particular date, shall mean the Trading Market on which the Common Stock is listed or quoted for trading on such date.
“ Transaction ” shall have the meaning set forth in the recitals above.
“ Transfer ” shall mean to, directly or indirectly, sell, transfer, assign, or similarly dispose of, , or to enter into any contract, option or other arrangement or understanding with respect to the sale, transfer, assignment, or similar disposition of, any Registrable Securities owned by the Investor or any interest (including a beneficial interest) in any Registrable Securities owned by the Investor. “ Transfer ”, when used as a noun, shall have a correlative meaning.
“ Vessel Sale Shares ” shall have the meaning set forth in the recitals above.
2.   Registration .
(a)   Right to Piggyback. If the Company proposes to register any of its common equity securities under the Securities Act (other than a registration statement on Form S-8 or on Form F-4 or any similar successor forms thereto or in connection with (A) an employee stock option, stock purchase or compensation plan or securities issued or issuable pursuant to any such plan, (B) a dividend reinvestment plan or (C) a merger or the acquisition of the securities or substantially all the assets of another entity), whether for its own account or for the account of one or more shareholders of the Company, and the registration form to be used may be used for any registration of Registrable Securities (a “ Piggyback Registration ”), the Company shall give prompt written notice (in any event within 5 Business Days after its receipt of notice of any exercise of other demand registration rights) to all Holders of its intention to effect such a registration and shall, subject to Sections 2(b) and 2(c), include in such registration all such Registrable Securities with respect to which the Company has received written requests for inclusion therein within 15 Business Days after the delivery of the Company’s notice. The Company may postpone or withdraw the filing or the effectiveness of a Piggyback Registration at any time in its sole discretion.
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 (b)   Priority on Primary Piggyback Registrations. If, (i) as a result of applicable law or based upon comments received by the Commission, all of the securities to be included in the registration statement for any Piggyback Registration initiated as a primary registration on behalf of the Company, cannot be so included, or (ii) a Piggyback Registration is an underwritten primary registration on behalf of the Company, and the managing underwriters advise the Company in writing that in their opinion the number of securities requested to be included in such registration exceeds the number which can be sold in such offering without having an adverse effect on such offering, then the Company shall include in such registration statement (x) first, the securities the Company proposes to sell, (y) second, the securities other than Registrable Securities requested to be included therein by the holders of such other securities (the “ Other Holders ”), if any, allocated among such holders in such manner as they may agree, and (z) third, the Registrable Securities requested to be included therein by the Holders, allocated pro rata among the Holders on the basis of the number of Registrable Securities owned by each such Holder or in such manner as they may otherwise agree.
(c)   Priority on Secondary Piggyback Registrations. If, (i) as a result of applicable law or based upon comments received by the Commission, all of the securities to be included in the registration statement for any Piggyback Registration initiated as a secondary registration on behalf of an Other Holder other than a Holder of Registrable Securities, cannot be so included or (ii) a Piggyback Registration is an underwritten secondary registration on behalf of an Other Holder other than a Holder of Registrable Securities, and the managing underwriters advise the Company in writing that, in their opinion, the number of securities requested to be included in such registration statement exceeds the number which can be sold in such offering without having an adverse effect on such offering, the Company shall include in such registration (x) first, the securities other than Registrable Securities requested to be included therein by the Other Holders, allocated among such holders in such manner as they may agree, (y) second, the Registrable Securities requested to be included therein by the Holders, allocated pro rata among the Holders on the basis of the number of Registrable Securities owned by each such Holder or in such manner as they may otherwise agree, and (z) third, the securities the Company proposes to sell, if any.
(d)   Selection of Underwriters. If any Piggyback Registration is an underwritten primary or secondary offering, the Company shall have the right to select the managing underwriter or underwriters to administer any such offering.
3.   Registration Procedures.
In connection with the Company’s registration obligations hereunder, the Company shall:
(a)   Not less than five (5) Business Days prior to the filing of the Registration Statement or any related Prospectus or any amendment or supplement thereto, (i) furnish to the Holders copies of all such documents proposed to be filed (including documents incorporated or deemed incorporated by reference to the extent requested by such Person) which documents will be subject to the review of such Holders, and (ii) cause its officers and directors, counsel and independent certified public accountants to respond to such inquiries as shall be necessary, in the reasonable opinion of respective legal counsel to conduct a reasonable investigation within the meaning of the Securities Act. The Company shall not file the Registration Statement or any
4


such Prospectus or any amendments or supplements thereto to which the Holders of a majority of the Registrable Securities shall reasonably object in good faith.
(b)   (i) Prepare and file with the Commission such amendments, including post-effective amendments, to any Registration Statement and the Prospectus used in connection therewith as may be necessary to keep such Registration Statement continuously effective as to the Registrable Securities included thereon for not less than one year or, if earlier, until the date on which such Registrable Securities cease to be Registrable Securities under clause (w) of the definition of “Registrable Securities” (the “ Effectiveness Period ”); (ii) cause the related Prospectus to be amended or supplemented by any required Prospectus supplement, and as so supplemented or amended to be filed pursuant to Rule 424; (iii) respond as promptly as reasonably possible to any comments received from the Commission with respect to the Registration Statement or any amendment thereto; and (iv) comply in all material respects with the provisions of the Securities Act and the Exchange Act with respect to the disposition of all Registrable Securities covered by the Registration Statement in accordance with the intended methods of disposition by the Holders thereof set forth in the Registration Statement as so amended or in such Prospectus as so supplemented (the “ Plan of Distribution ”).
(c)   Notify the Holders of Registrable Securities to be sold as promptly as reasonably possible (and, in the case of (i)(A) below, not less than two (2) Business Days prior to such filing) and (if requested by any such person) confirm such notice in writing promptly following the day (i) (A) when a Prospectus or any Prospectus supplement or post-effective amendment to the Registration Statement is proposed to be filed; (B) when the Commission notifies the Company whether there will be a “review” of the Registration Statement and whenever the Commission comments on the Registration Statement (the Company shall upon request provide true and complete copies thereof and all written responses thereto as promptly as reasonably possible to each of the Holders who so requests provided such requesting Holders agree to keep such information confidential until it is publicly disclosed); and (C) with respect to the Registration Statement or any post-effective amendment, when the same has become effective; (ii) of any request by the Commission or any other Federal or state governmental authority during the Effectiveness Period for amendments or supplements to the Registration Statement or Prospectus or for additional information; (iii) of the issuance by the Commission or any other federal or state governmental authority of any stop order suspending the effectiveness of the Registration Statement covering any or all of the Registrable Securities or the initiation of any Proceedings for that purpose; (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any Proceeding for such purpose, and (v) of the occurrence of any event or passage of time that makes the financial statements included in the Registration Statement ineligible for inclusion therein or any statement made in the Registration Statement or Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions to the Registration Statement, Prospectus or other documents so that, in the case of the Registration Statement or the Prospectus, as the case may be, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading (provided that such Holder of Registrable Securities agrees to keep such information confidential until it is publicly disclosed).
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(d)   Use its best efforts to avoid the issuance of, or, if issued, obtain the withdrawal of (i) any order suspending the effectiveness of the Registration Statement, or (ii) any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction, at the earliest practicable moment.
(e)   To the extent requested by such Holders, furnish to each Holder, without charge, at least one conformed copy of the Registration Statement and each amendment thereto, including financial statements and schedules, all documents incorporated or deemed to be incorporated therein by reference, and all exhibits (including those previously furnished or incorporated by reference) promptly after the filing of such documents with the Commission.
(f)   Promptly deliver to each Holder, without charge, as many copies of the Prospectus or Prospectuses (including each form of prospectus) and each amendment or supplement thereto as such Persons may reasonably request in connection with resales by the Holder of Registrable Securities. The Company hereby consents to the use of such Prospectus and each amendment or supplement thereto by each of the selling Holders in connection with the offering and sale of the Registrable Securities covered by such Prospectus and any amendment or supplement thereto, except after the giving of any notice pursuant to Section 3(c).
(g)   Use its best efforts to register or qualify or cooperate with the selling Holders in connection with the registration or qualification (or exemption from the Registration or qualification) of such Registrable Securities for the resale by the Holder under the securities or Blue Sky laws of such jurisdictions within the United States as any Holder reasonably requests in writing, to keep each of the registration or qualification (or exemption therefrom) effective during the Effectiveness Period and to do any and all other acts or things reasonably necessary to enable the disposition in such jurisdictions of the Registrable Securities covered by the Registration Statement; provided, that the Company shall not be required to qualify generally to do business in any jurisdiction where it is not then so qualified, subject the Company to any material tax in any such jurisdiction where it is not then so subject or file a general consent to service of process in any such jurisdiction.
(h)   If requested by the Holders, cooperate with the Holders to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be delivered to a transferee pursuant to the Registration Statement, which certificates shall be free, of all restrictive legends, and to enable such Registrable Securities to be in such denominations and registered in such names as any such Holders may request.
(i)   Upon the occurrence of any event contemplated by Section 3(c)(v), as promptly as reasonably possible, prepare a supplement or amendment, including a post-effective amendment, to the Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, and file any other required document so that, as thereafter delivered, neither the Registration Statement nor such Prospectus will contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.
6

(j)   Use commercially reasonable efforts to cause all Registrable Securities to be listed on each securities exchange on which any of the Company’s equity securities are then listed or quoted and on each inter-dealer quotation system on which any of the Company’s equity securities are then quoted.
(k)   Comply with all applicable rules and regulations of the Commission and use its reasonable best efforts to cause all Registrable Securities to be listed for trading on a Trading Market, if the Company is then listed on a Trading Market.
(l)   Provide and cause to be maintained a transfer agent and registrar for all Registrable Securities covered by the Registration Statement.
(m)   Take no direct or indirect action prohibited by Regulation M under the Exchange Act.
(n)   At such time as any of the Registrable Securities are eligible for resale by the Holders without volume or manner of sale limitations pursuant to Rule 144, promptly take all necessary action (including delivering any required legal opinion to the Company’s transfer agent) to facilitate the timely preparation and delivery of certificates representing all Registrable Securities (or crediting to the account of the Holder or its designee account with The Depositary Trust Company through its Deposit or Withdrawal at Custodial system (“DWAC”)), free of all restrictive legends, to enable such Registrable Securities to be in such denominations and registered in such names as any such Holders may request to permit all such Registrable Securities to be sold by the Holders pursuant Rule 144 under the Securities Act.
(o)   Take all such other reasonable actions as are necessary or advisable in order to expedite or facilitate the disposition of the Registrable Securities in accordance with this Agreement.
The Company may require each selling Holder to furnish to the Company a certified statement as to the number of shares of Common Stock beneficially owned by such Holder and the person thereof that has voting and dispositive control over the Vessel Sale Shares, for purposes of disclosure in the “Selling Stockholder” table in any Registration Statement.
4.   Registration Expenses . All fees and expenses incident to the performance of or compliance with this Agreement by the Company shall be borne and paid by the Company whether or not any Registrable Securities are sold pursuant to the Registration Statement. The fees and expenses referred to in the foregoing sentence shall include, without limitation, (i) all registration and filing fees (including, without limitation, fees and expenses (A) with respect to filings required to be made with the Commission, FINRA or the trading market on which the Common Stock is then listed for trading, and (B) for compliance with applicable state securities or Blue Sky laws (including reasonable fees and disbursements of counsel for the underwriters, if any, in connection with blue sky qualifications of the Registrable Securities), (ii) the fees and expenses incurred in connection with the listing of the Registrable Securities on any trading market as required hereunder, (iii) all printing, duplicating, and word processing expenses (including, without limitation, expenses of printing certificates for Registrable Securities and of printing prospectuses if the printing of prospectuses is reasonably requested by the Holders of a
7


majority of the Registrable Securities included in the Registration Statement or any underwriter), (iv) messenger, telephone and delivery expenses, (v) fees and disbursements of counsel for the Company, (vi) Securities Act liability insurance, if the Company so desires such insurance, and (vii) fees and expenses of all other Persons retained by the Company in connection with the consummation of the transactions contemplated by this Agreement. In addition, the Company shall be responsible for all of its internal and accounting expenses incurred in connection with the consummation of the transactions contemplated by this Agreement (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties and all fees and expenses of the Company’s certified public accountants), the expense of the preparation of all financial statements and any audit or review thereof by the Company’s accountants or the delivery of a “comfort letter”, if any. In no event shall the Company be responsible for any broker, underwriter or similar commissions or any legal fees or other costs of the Holders attributable to the sale of the Registrable Securities.
5.   Right of First Offer
(a)   Right of First Offer. Subject to the terms and conditions specified in this Section 5.01 , if the Investor proposes to Transfer any Registrable Securities (the “ Offered Shares ”) owned by it to any third party unaffiliated with such Investor (a “ Third Party Offeree ”) in a privately negotiated transaction (a “ ROFO Transaction ”), the Company shall have a right of first offer to purchase the Offered Shares.
(b)   Offer Notice. Each time the Investor proposes to Transfer any Offered Shares in a ROFO Transaction, the Investor shall give written notice (the “ Transfer Notice ”) to the Company at least ten (10) days prior to such Transfer, stating its bona fide intention to Transfer the Offered Shares to a Third Party Offeree and specifying the number of Offered Shares and the material terms and conditions of such offer, including the price, pursuant to which the Investor proposes to Transfer the Offered Shares.
(c)   Exercise of Right of First Offer. Upon receipt of the Transfer Notice, the Company shall have ten (10) days (the “ ROFO Notice Period ”) to offer to purchase all of the Offered Shares on the same terms and conditions as specified in the Transfer Notice by delivering a written notice (a “ ROFO Offer Notice ”) to the Investor stating that it offers to purchase all of the Offered Shares. If the Company does not deliver a ROFO Offer Notice for all of the Offered Shares during the ROFO Notice Period it shall be deemed to have waived its right to offer to purchase the Offered Shares pursuant to this Section 5.01, and the Investor shall thereafter be free to Transfer the Offered Shares to any unaffiliated third party on terms and conditions no more favorable to such party than those set forth in the Transfer Notice. If such Transfer is not consummated within ninety (90) days following the expiration of the ROFO Notice Period, the Company’s rights provided hereunder shall be deemed to be revived and the Offered Shares shall not be offered to any Person unless first re-offered to the Company in accordance with this Section 5.
(d)   Right of First Offer Exceptions. Notwithstanding anything herein to the contrary, the provisions of this Section 5 shall not apply with respect to (i) Transfers in open-market transactions, (ii) a proposed Transfer in which the market value of the Offered Shares is less than $150,000, based on the daily volume weighted average price of the Common Stock on
8


the trading day immediately prior to the date of the Transfer Notice on the trading market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P, or (iii) the proposed Transfer of the Registrable Securities to any permitted transferee under Section 6(e) of this Agreement.
(e)   Closing. At the closing of any sale and purchase pursuant to this Section 5, the Investor shall deliver to the Company a certificate or certificates representing the Offered Shares to be sold (if any), accompanied by stock powers with signatures guaranteed and all necessary stock transfer taxes paid and stamps affixed, if necessary, against receipt of the purchase price therefor from the Company by wire transfer of immediately available funds to a bank account specified by the Investor.
6.   Indemnification .
(a)   Indemnification by the Company. The Company shall indemnify and hold harmless each Holder, the officers, directors, agents and employees of each of them, each Person who controls any such Holder (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act), and the officers, directors, agents and employees of each such controlling Person, to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, reasonable attorneys’ fees) and expenses, as incurred (collectively, “ Losses ”), to the extent arising out of or relating to any untrue or alleged untrue statement of a material fact contained in the Registration Statement, any Prospectus or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or form of prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading, or any violation or alleged violation by the Company of the Securities Act, Exchange Act or any state securities law, or any rule or regulation thereunder, except to the extent, but only to the extent, that (1) such untrue statements or omissions are based solely upon information regarding such Holder furnished in writing to the Company by such Holder expressly for use therein, or to the extent that such information relates to such Holder or such Holder’s proposed method of distribution of Registrable Securities as set forth in the Plan of Distribution approved by such Holder expressly for use in the Registration Statement, such Prospectus or such form of Prospectus or in any amendment or supplement thereto. This indemnity shall be in addition to any liability the Company may otherwise have. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Holders or the termination of this Agreement or any indemnified party and shall survive the transfer of such securities by any Holder and regardless of any indemnity agreed to in the underwriting agreement, if any, that is less favorable to the Holders.
(b)   Indemnification by Holders. Each Holder shall, severally and not jointly, indemnify and hold harmless the Company, its officers, directors, agents and employees, each Person who controls the Company (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act), and the officers, directors, agents and employees of each such controlling Person, to the fullest extent permitted by applicable law, from and against any and all Losses, as incurred, arising out of or based upon any untrue or alleged untrue statement of a material fact contained in the Registration Statement, any Prospectus or any form of prospectus
9


or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or form of prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading, in each case to the extent, but only to the extent, (1) that such untrue statement or omission is contained in any information so furnished in writing by such Holder to the Company specifically for inclusion in the Registration Statement or such Prospectus expressly for use therein, or (2) to the extent that such information relates to such Holder or such Holder’s proposed method of distribution of Registrable Securities as set forth in the Plan of Distribution approved by such Holder expressly for use in the Registration Statement, such Prospectus or such form of Prospectus or in any amendment or supplement thereto. In no event shall the liability of any Holder hereunder be greater in amount than the dollar amount of the proceeds from the sale of its Registrable Securities in the offering giving rise to such indemnification obligation, less any amounts paid by such Holder pursuant to Section 6(d) and any amounts paid by such Holder as a result of liabilities incurred under the underwriting agreement, if any, related to such sale.
(c)   Conduct of Indemnification Proceedings. If any Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder (an “ Indemnified Party ”), such Indemnified Party shall promptly notify the Person from whom indemnity is sought (the “ Indemnifying Party ”) in writing, and the Indemnifying Party shall have the right to assume the defense thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all fees and expenses as incurred in connection with defense thereof; provided, that the failure of any Indemnified Party to give such notice shall not relieve the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and only) to the extent that it shall be finally determined by a court of competent jurisdiction (which determination is not subject to appeal or further review) that such failure shall have prejudiced the Indemnifying Party.
An Indemnified Party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed in writing to pay such fees and expenses; (2) the Indemnifying Party shall have failed promptly to assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding; (3) the Indemnified Party has reasonably concluded (based upon advice of its outside counsel) that there may be legal defenses available to it or other Indemnified Parties that are different from or in addition to those available to the Indemnifying Party, or (4) the named parties to any such Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party, and such Indemnified Party shall have been advised by counsel that a conflict of interest is reasonably likely to exist between such Indemnified Party and the Indemnifying Party (in which case, if such Indemnified Party notifies the Indemnifying Party in writing that it elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall not have the right to assume the defense thereof and the reasonable fees and expenses of no more than one separate counsel shall be at the expense of the Indemnifying Party). The Indemnifying Party shall not be liable for any settlement of any such Proceeding effected without its written consent. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending Proceeding in respect of which any Indemnified Party is a party,
10


unless such settlement includes an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding.
(d)   Contribution. If a claim for indemnification under Section 6(a) or 6(b) is unavailable to an Indemnified Party (by reason of public policy or otherwise) or insufficient in respect of any Losses (other than as a result of exceptions or limitations on indemnification contained in Section 6(a) or 6(b)), then each Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Losses, in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement or omission. The amount paid or payable by a party as a result of any Losses shall be deemed to include, subject to the limitations set forth in Section 6(c), any reasonable attorneys’ or other reasonable fees or expenses incurred by such party in connection with any Proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for in this Section was available to such party in accordance with its terms.
The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 6(d) were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately preceding paragraph. Notwithstanding the provisions of this Section 6(d), no Holder shall be required to contribute, in the aggregate, any amount in excess of the amount by which the proceeds actually received by such Holder from the sale of the Registrable Securities subject to the Proceeding exceeds the amount of any damages that such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission, except in the case of fraud by such Holder. The indemnity and contribution agreements contained in this Section are in addition to any liability that the Indemnifying Parties may have to the Indemnified Parties. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.
7.   Termination and Effect of Termination. This Agreement shall terminate upon the date on which the Holders no longer holds any Registrable Securities, except for the provisions of Sections 6.1 and 6.2, which shall survive any such termination. No termination under this Agreement shall relieve any person of liability for breach or registration expenses payable pursuant to Section 4 incurred prior to termination.
8.   Miscellaneous .
(a)   Discontinued Disposition. Each Holder agrees by its acquisition of such Registrable Securities that, upon receipt of a notice from the Company of the occurrence of any
11


event of the kind described in Section 3(c), such Holder will forthwith discontinue disposition of such Registrable Securities under the Registration Statement until such Holder’s receipt of the copies of the supplemented Prospectus and/or amended Registration Statement or until it is advised in writing (the “ Advice ”) by the Company that the use of the applicable Prospectus may be resumed, and, in either case, has received copies of any additional or supplemental filings that are incorporated or deemed to be incorporated by reference in such Prospectus or Registration Statement. In the event of a discontinued disposition under this Section 8(a), the Company will use its reasonable best efforts to ensure that the use of the Prospectus may be resumed as promptly as is practicable and to provide copies of the supplemented Prospectus and/or amended Registration Statement or the Advice as soon as possible in order to enable each Holder to resume dispositions of the Registrable Securities.
(b)   Amendments in Writing. No amendment, modification, waiver, termination or discharge of any provision of this Agreement, or any consent to any departure by the Company and any Holder of the then outstanding Registrable Securities from any provision hereof, shall in any event be effective unless the same shall be in writing and signed by the Company and at least a majority of the Holders of the then outstanding Registrable Securities, and each such amendment, modification, waiver, termination or discharge shall be effective only in the specific instance and for the specific purpose for which given. No provision of this Agreement shall be varied, contradicted or explained by any oral agreement, course of dealing or performance or any other matter not set forth in an agreement in writing and signed by the Company and at least a majority of the Holders of the then outstanding Registrable Securities.
(c)   Suspension of Trading. At any time after the Registrable Securities are covered by an effective Registration Statement, the Company may deliver to the Holders of such Registrable Securities a certificate (the “ Suspension Certificate ”) approved by the Chief Executive Officer of the Company and signed by an officer of the Company stating that the sales of Registrable Securities under the Registration Statement would:
(i)   materially interfere with any transaction that would require the Company to prepare financial statements under the Securities Act that the Company would otherwise not be required to prepare in order to comply with its obligations under the Exchange Act, or
(ii)   require public disclosure of any transaction of the type discussed in Section 8(c)(i) prior to the time such disclosure might otherwise be required.
After the delivery of a Suspension Certificate by Holders of Registrable Securities, the Company may, in its discretion, require such Holders of Registrable Securities to refrain from selling or otherwise transferring or disposing of any Registrable Securities or other Company securities then held by such Holders for a specified period of time that is customary under the circumstances (not to exceed thirty (30) days). Notwithstanding the foregoing sentence, the Company shall be permitted to cause Holders of Registrable Securities to so refrain from selling or otherwise transferring or disposing of any Registrable Securities or other securities of the Company on only one occasion during each twelve (12) consecutive month period that the Registration Statement remains effective. The Company may impose stop transfer instructions to enforce any required agreement of the Holders under this Section 8(c).
12


 (d)   Notices. All notices, requests, consents and other communications under this Agreement shall be in writing and shall be deemed delivered (i) on the date of transmission when delivered via email prior to 5:00 p.m. (New York City time) on a Business Day, (ii) one Business Day after transmission when delivered via email later than 5:00 p.m. (New York City time) on any date and earlier than 11:59 p.m. (New York City time) on such date, (iii) upon delivery when delivered personally, (iv) three (3) days after being sent by registered or certified mail, return receipt requested, postage prepaid, or (v) one (1) Business Day after being sent via a reputable nationwide overnight courier service guaranteeing next business day delivery, in each case to the intended recipient as set forth below:
 
If to the Company:
     
   
c/o 154 Vouliagmenis Avenue
6674 Glyfada, Greece
Attention: Chief Executive Officer
     
 
With a copy (which shall not constitute notice) to:
     
   
Seward & Kissel LLP
One Battery Park Plaza
New York, NY 10004
Fax: (212) 480-8421
Attention: Gary Wolfe
     
 
If to the Investor, to:
     
   
Cargill International SA,
14 Chemin-de-Normandie,
1206 Geneva, Switzerland
Attention: George Wells, Kyriakos Attikouris, Ann Shazell and Brian Lewis
     
 
With a copy to:
     
   
Reed Smith LLP
599 Lexington Avenue, 22nd Floor
New York, NY, 10022
Attention: Danielle Carbone

Any party may change the address to which notices, requests, consents or other communications hereunder are to be delivered by giving the other parties notice in the manner set forth in this Section.
(e)   Successors and Assigns. This Agreement shall be binding upon, shall inure to the benefit of and shall be enforceable by the parties hereto and their respective successors and assigns. The Company may not assign its rights or obligations hereunder without the prior written consent of all of the Holders of the then-outstanding Registrable Securities,
13


provided a sale of the Company shall not be deemed an assignment. Any Holder may assign its rights hereunder to a purchaser or transferee of Registrable Securities; provided, that (i) the Company is furnished a written notice of the name and address of such transferee or assignee and the Registrable Securities with respect to which such registration rights are being assigned and (ii) such purchaser or transferee shall, as a condition to the effectiveness of such assignment, be required to execute a counterpart to this Agreement agreeing to be treated as a Holder whereupon such purchaser or transferee shall have the benefits of, and shall be subject to the restrictions contained in, this Agreement as if such purchaser or transferee was originally included in the definition of an Holder herein and had originally been a party hereto.
(f)   Execution in Counterparts; Facsimile Signatures. This Agreement and any amendment, waiver or consent hereto may be executed by the parties hereto in separate counterparts, each of which, when so executed and delivered, shall be an original, but all such counterparts shall together constitute one and the same instrument. All such counterparts may be delivered among the parties hereto by facsimile or other electronic transmission, which shall not affect the validity thereof.
(g)   Governing Law; Jurisdiction. This Agreement shall be governed by and construed under the laws of the State of New York without regard to conflicts of laws principles. Any action or proceeding seeking to enforce any provision of, or based on any right arising out of, this Agreement shall be brought against the parties hereto or thereto in the courts of the State of New York, County of New York, or, if it has or can acquire jurisdiction, in the United States District Court for the Southern District of New York, and each of the parties consents to the exclusive jurisdiction of such courts (and of the appropriate appellate courts) in any such action or proceeding and waives any objection to venue laid therein. The parties hereby expressly waive all rights to trial by jury in any suit, action or proceeding arising under this Agreement.
(h)   Cumulative Remedies. All remedies, either under this Agreement or by law, afforded to the parties hereto, shall be cumulative and not alternative.
(i)   Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction.
(j)   Section Headings and References. The section headings are for the convenience of the parties and in no way alter, modify, amend, limit or restrict the contractual obligations of the parties. Any reference in this Agreement to a particular section or subsection shall refer to a section or subsection of this Agreement, unless specified otherwise.
[Remainder of page intentionally left blank; Signature pages follow]
14


IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first written above.
 
THE COMPANY:
   
 
SEANERGY MARITIME HOLDINGS CORP.
   
   
 
By:
/s/ Stamatios Tsantanis
 
Name:
Stamatios Tsantanis
 
Title:
Chief Executive Officer
     
   
   


[Investor Signature page follows]



 
INVESTOR:
   
 
CARGILL INTERNATIONAL SA
   
   
 
By:
/s/ George Wells
 
Name:
George Wells
 
Title:
Assistant Vice President
     
   
   



[Investor signature page to Registration Rights Agreement]




Exhibit 4.94

D A T E D
7  N O V E M B E R  2 0 1 8

( 1 )
S E A N E R G Y  M A R I T I M E  H O L D I N G S  C O R P .
(as Guarantor)
( 2 )
C A R G I L L  I N T E R N A T I O N A L  S A
(as   Owner)
G U A R A N T E E  A N D  I N D E M N I T Y
I N R E S P E C T  O F  M . V .  “ C H A M P I O N S H I P ”
REFERENCE RS/736648.00161

CONTENTS
CLAUSE
1.
DEFINITIONS AND INTERPRETATION
2
2.
GUARANTEE AND INDEMNITY
5
3.
DEFAULT INTEREST
8
4.
REPRESENTATIONS
8
5.
UNDERTAKINGS
8
6.
PAYMENT MECHANICS
9
7.
PARTIAL PAYMENTS
9
8.
SET-OFF
10
9.
TAX GROSS-UP
10
10.
CURRENCY CLAUSES
10
11.
COSTS AND EXPENSES
10
12.
CERTIFICATES AND DETERMINATIONS
10
13.
PARTIAL INVALIDITY
11
14.
REMEDIES AND WAIVERS
11
15.
NOTICES
11
16.
ENGLISH LANGUAGE
12
17.
COUNTERPARTS
12
18.
GOVERNING LAW
12
19.
ENFORCEMENT
13
     
     
EXECUTION PAGE
14


T H I S  D E E D (“ Deed ”) is dated 7 November 2018 (“ Effective Date ”)
BETWEEN:
(1)
SEANERGY MARITIME HOLDINGS CORP., a corporation duly incorporated and validly existing under the laws of the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, MH96960 Majuro, Marshall Islands (“Guarantor” ); and
(2)
CARGILL INTERNATIONAL SA, a company duly incorporated and validly existing under the laws of Switzerland whose registered office is at 14 chemin de Normandie, 1206 Geneva, Switzerland (“ Owner ”).
(the Guarantor and the Owner, together the “ Parties ” and each a “ Party ”)
BACKGROUND:
(i)
By a memorandum of agreement (as amended and supplemented from time to time, “ MOA ”) dated 5 November 2018 between the Guarantor (as guarantor), Champion Ocean Navigation Co. Limited (as seller) (“ Seller ”) and the Owner (as buyer), the Seller has agreed to sell and the Owner has agreed to purchase the 180,000 DWT bulk carrier named “CHAMPIONSHIP” with IMO number 9403516 (“ Vessel ”) on the terms and conditions set out therein.
(ii)
By a bareboat charter (as amended and supplemented from time to time, “ Bareboat Charter ”) dated on or about the date of this Deed between the Owner (as owner) and Champion Marine Co. (“ Bareboat Charterer ”) (as charterer), the Owner has agreed or, as the case may, shall agree to let to the Bareboat Charterer and the Bareboat Charterer has agreed or, as the case may be, shall agree to take on bareboat charter, the Vessel on the terms and conditions set out therein.
(iii)
By a multipartite agreement (as amended and supplemented from time to time, “ Multipartite Agreement ”) dated on or about the date of this Deed among the Owner (in its capacities as head-bareboat charterer and as time charterer), the Bareboat Charterer and the Head Owner (as owner), the parties to the Multipartite Agreement have agreed or, as the case may be, shall agree certain aspects of how the relationship among the parties to the Multipartite Agreement is to be regulated.
(iv)
By a time charter (as amended and supplemented from time to time, “ Time Charter ”) dated on or about the date of this Deed between the Owner (as charterers) and the Bareboat Charterer (as owners) the Bareboat Charterer has agreed or, as the case may, shall agree to let to the Owner and the Owner has agreed or, as the case may be, shall agree to take on time charter, the Vessel on the terms and conditions set out therein.
(v)
This Deed is the “Guarantee” referred to in each of the MOA and the Bareboat Charter.
IT IS AGREED as follows:
1.
DEFINITIONS AND INTERPRETATION

1.1
Definitions
PAGE 2

In this Deed the following definitions and the definitions in the above recitals shall apply:
Cash Collateral Account Charge means the account charge entered into, or, as the case be, to be entered into, between the Owner and the Bareboat Charterer pursuant to which, inter alia , the Bareboat Charterer has agreed, or, as the case may be, shall agree, to charge in favour of the Owner, inter alia , the Cash Collateral Account (as such term is defined in the Bareboat Charter).
Charter Security has the meaning ascribed to it in the Bareboat Charter.
Guaranteed Obligations means all money and liabilities now or hereafter due, owing or incurred to the Owner by the Bareboat Charterer under the Relevant Documents (or any of them) and under this Deed in whatsoever manner in any currency or currencies whether present or future, actual or contingent, whether incurred solely or jointly with any other person and whether as principal or surety together with all interest accruing on such moneys and liabilities and all costs, charges and expenses incurred by the Owner under any Relevant Document.
Head Owner means CFT Investments 1 LLC with an office at c/o SMBC Leasing and Finance, Inc., 277 Park Avenue, New York, New York 10172 or its successors, assigns and nominees.
Relevant Documents means the Bareboat Charter, the Scrubber Supply Contract Assignment, the Multipartite Agreement, the Cash Collateral Account Charge and the Time Charter (and each of the Bareboat Charter, the Scrubber Supply Contract Assignment, the Multipartite Agreement, the Cash Collateral Account Charge and the Time Charter, a “ Relevant Document ”).
Responsible Person means, in respect of the Guarantor, a Responsible Officer (as such term is defined in the Bareboat Charter).
Scrubber Supply Contract Assignment has the meaning ascribed to it in the MOA.
Tax Deduction means a deduction or withholding for or on account of tax from a payment under this Deed.

1.2
Interpretation

1.2.1
Unless defined elsewhere in this Deed or the context otherwise requires, terms defined in, or whose interpretation is provided for in, the Bareboat Charter shall have the same meaning when used in this Deed.

1.2.2
Unless a contrary indication appears, a reference in this Deed (including the recitals hereto) to:

(a)
any Party or any other person shall be construed so as to include, where relevant, its successors in title, permitted assigns and permitted transferees;

(b)
a “ person ” includes any individual, firm, company, corporation, government, state or agency of a state or any association, trust, joint
PAGE 3

venture, consortium or partnership (whether or not having separate legal personality);

(c)
Clauses are references to clauses of this Deed;

(d)
a Relevant Document or any other agreement or instrument is a reference to that Relevant Document or other agreement or instrument as amended, novated, varied, supplemented or restated (however fundamentally) or replaced from time to time;

(e)
the words “ include(s) ”, “ including ” shall be construed as followed by the words “ without limitation ”;

(f)
“ liabilities ” includes any obligation, whether incurred as principal or as surety, for the payment or the repayment of money, whether present or future, actual or contingent and whether owed jointly or severally or in any other capacity;

(g)
references to “ taxes ” include all present and future income, corporation and value-added taxes and all stamp and other taxes, duties, levies, imposts, deductions, charges and withholdings whatsoever, together with interest thereon and penalties with respect thereto, if any, and any payments of principal, interest, charges, fees or other amounts made on or in respect thereof, and references to “ tax ” and “ taxation ” shall be construed accordingly;

(h)
a provision of law is a reference to a provision of any treaty, legislation, regulation, decree, order or by-law and any secondary legislation enacted under a power given by that provision, as amended, applied or re-enacted or replaced whether before or after the date of this Deed; and

(i)
a time of day is a reference to Geneva time.

1.2.3
Clause headings are for ease of reference only.

1.2.4
Words importing the plural shall include the singular and vice versa and words importing a gender shall include every gender.

1.3
Third party rights
Unless expressly provided to the contrary in this Deed a person who is not a Party has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or enjoy the benefit of any term of this Deed.

1.4
Deed
This Deed is intended to take effect as a deed from and including the date of the Bareboat Charter.

1.5
Relevant Documents
PAGE 4

The Guarantor confirms that it has received copies of, has reviewed and is familiar with the terms and provisions of the Relevant Documents.
2.
GUARANTEE AND INDEMNITY

2.1
Guarantee and indemnity

2.1.1
The Guarantor irrevocably and unconditionally:

(a)
guarantees to the Owner the due and punctual performance by the Bareboat Charterer of all the Bareboat Charterer’s obligations (whether actual or contingent) under, or in connection with, the Relevant Documents;

(b)
undertakes with the Owner that whenever the Bareboat Charterer does not pay any amount when due under or in connection with any Relevant Document, the Guarantor shall promptly on demand pay that amount as if it was the principal obligor; and

(c)
agrees with the Owner that, if, for whatever reason, any sums (or other obligations, as the case may be) hereby guaranteed are not recoverable (or are not able to be satisfied) pursuant to this Clause 2.1 on the basis of a guarantee (whether by reason of any legal limitation, illegality, disability or incapacity on, or of, the Bareboat Charterer or any other person or by reason of any other fact or circumstance, and whether or not known to, or discoverable by, the Guarantor, the Bareboat Charterer or the Owner or any other person), the Guarantor will, as a separate and independent stipulation and as a primary obligor, pay (or, as the case may be, perform or procure performance of the Bareboat Charterer’s obligations) to the Owner on demand an amount or amounts equal to the amount or amounts which the Guarantor would have been liable to pay but for such irrecoverability and will on demand indemnify the Owner against any costs, expenses, losses or liability suffered or incurred by the Owner a result of such irrecoverability.

2.2
Continuing guarantee

2.2.1
This Deed is a continuing guarantee and will extend to the ultimate balance of the Guaranteed Obligations, regardless of any intermediate payment or discharge in whole or in part.

2.3
Reinstatement

2.3.1
If any discharge, release or arrangement (whether in respect of the obligations of the Bareboat Charterer or any Charter Security for those obligations or any security provided for those obligations or otherwise) is made by the Owner in whole or in part on the faith of any payment, Charter 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 Deed will continue or be reinstated as if the discharge, release or arrangement had not occurred.
PAGE 5


2.4
Waiver of defences

2.4.1
The obligations of the Guarantor under this Deed will not be affected by an act, omission, matter or thing which, but for this Clause 2.4, would reduce, release or prejudice any of its obligations under this Deed (without limitation and whether or not known to it or to the Owner) including:

(a)
any time, waiver or consent granted to, or composition with, the Bareboat Charterer and/or any other person, as the case may be;

(b)
the release of the Bareboat Charterer or any other person, as the case may be, under the terms of any composition or arrangement with any creditor of the Guarantor or its subsidiaries;

(c)
the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against, or over, assets of, the Bareboat Charterer or other person, as the case may be, 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 Charter Security;

(d)
any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of the Bareboat Charterer or any other person, as the case may be;

(e)
any amendment (however fundamental) or replacement of a Relevant Document or any other agreement or instrument or Charter Security;

(f)
any unenforceability, illegality or invalidity of any obligation of any person under any Relevant Document or any other agreement or instrument or Charter Security; or

(g)
any insolvency or similar proceedings.

2.5
Guarantor Intent

2.5.1
Without prejudice to the generality of Clause 2.4 the Guarantor expressly confirms that it intends that this Deed shall extend from time to time to any (however fundamental) variation, increase, extension or addition of or to any of the Relevant Documents.

2.6
Immediate recourse

2.6.1
The Guarantor waives any right it may have of first requiring the Owner to commence proceedings against or enforce any other rights or Charter Security before enforcing any rights of the Owner against the Guarantor under this Deed. This waiver applies irrespective of any law or any provision of a Relevant Document to the contrary.

2.7
Appropriations
PAGE 6


2.7.1
Until all amounts which may be or become payable by the Bareboat Charterer under or in connection with the Relevant Documents have been irrevocably paid in full, the Owner may:

(a)
refrain from applying or enforcing any other moneys, Charter Security or rights held or received by the Owner in respect of those amounts, or apply and enforce the same in such manner and order as it sees fit (whether against those amounts or otherwise) and the Guarantor shall not be entitled to the benefit of the same; and

(b)
hold in a suspense account any moneys received from the Guarantor or on account of the Guarantor’s liability under this Deed.

2.8
Deferral of Guarantor’s rights

2.8.1
Until all amounts which may be or become payable by the Bareboat Charterer under or in connection with the Relevant Documents have been irrevocably paid in full and unless the Owner otherwise directs, the Guarantor will not exercise any rights which it may have by reason of performance by it of its obligations under the Relevant Documents or by reason of any amount being payable, or liability arising, under this Clause 2.8:

(a)
to be indemnified by the Bareboat Charterer;

(b)
to claim any contribution from the Bareboat Charterer of the Bareboat Charterer’s obligations under the Relevant Documents;

(c)
to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Owner under the Relevant Documents or of any other guarantee or Charter Security taken pursuant to, or in connection with, the Relevant Documents by the Owner;

(d)
to bring legal or other proceedings for an order requiring the Bareboat Charterer to make any payment, or perform any obligation, in respect of which the Guarantor has given a guarantee, undertaking or indemnity under Clause 2.1 (Guarantee and indemnity);

(e)
to exercise any right of set-off against the Bareboat Charterer; and/or

(f)
to claim or prove as a creditor of the Bareboat Charterer in competition with the Owner.

2.8.2
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 Owner by the Bareboat Charterer under or in connection with the Relevant Documents to be repaid in full on trust for the Owner and shall promptly pay or transfer the same to the Owner for application towards the Guaranteed Obligations.

2.9
Additional Security
PAGE 7


2.9.1
This Deed is in addition to, and is not in any way prejudiced by, any other guarantee or Charter Security now or subsequently held by the Owner.

2.10
No Security from Bareboat Charterer

2.10.1
Until the Guaranteed Obligations have been irrevocably paid in full, the Guarantor shall not take, or retain, any Charter Security from the Bareboat Charterer or other person in connection with any of the Guarantor’s liabilities under this Deed.

2.11
Trust

2.11.1
If the Guarantor is in breach of Clauses 2.8 or 2.10, the Guarantor shall hold on trust the payment, contribution, benefit, right or Charter Security to transfer or pay it to the Owner to the extent necessary to satisfy any of the Guarantor’s liabilities under this Deed, and promptly transfer or pay any such payment, contribution, benefit, right or Charter Security to the Owner.
3.
DEFAULT INTEREST

3.1
If the Guarantor fails to pay any amount payable by it under this Deed on its due date, interest shall accrue on the overdue amount from the due date up to the date of actual payment (both before and after judgment) at the Default Rate. Any interest accruing under this Clause 3 shall be immediately payable by the Guarantor on demand by the Owner.

3.2
Default interest (if unpaid) arising on an overdue amount will be compounded with the overdue amount with monthly rests but will remain immediately due and payable.
4.
REPRESENTATIONS

4.1
The Guarantor represents and warrants to the Owner on the date of this Deed that:

4.1.1
the Guarantor has power to execute, deliver and perform its obligations under this Deed and all necessary corporate action has been taken to authorise the execution, delivery and performance of the same; and

4.1.2
this Deed constitutes valid, legally binding and enforceable obligations of the Guarantor.

4.2
The representations made under Clause 4.1 shall be repeated by the Guarantor by reference to the facts and circumstances then existing on each and every day during the Charter Term.
5.
UNDERTAKINGS

5.1
The undertakings in this Clause 5.1 remain in force from the date of this Deed until the Guaranteed Obligations have been irrevocably and unconditionally discharged in full. The Guarantor undertakes and agrees that throughout the relevant Charter Term it will:

5.1.1
furnish to the Owner:
PAGE 8


(a)
within one hundred and eighty (180) days after the close of each fiscal year, beginning with the close of the fiscal year 2017, the year-end audited financial statements of the Guarantor including a balance sheet and related profit and loss and surplus statements certified by its auditors;

(b)
within ninety (90) days after the close of each fiscal quarter, the unaudited quarterly financial statements of the Guarantor containing profit and loss statements and a balance sheet and certified by the Responsible Person, subject to year-end audit;

(c)
such other financial information as the Owner may from time to time reasonably request relating to the financial condition of the Guarantor or the Bareboat Charterer,

(d)
as soon as practicable after the same are instituted (or, once the Guarantor is aware of the same), details of any litigation, arbitration or administrative proceedings involving the Guarantor where the value of the claim or any counterclaim exceeds United States Dollars Two Million Five Hundred Thousand (US$2,500,000) (or its equivalent in any other applicable currency, when converted at the prevailing rate); and

(e)
from time to time such additional financial or other information relating to the business of the Guarantor and as may be reasonably requested by the Owner.

5.1.2
not, without the prior written consent of the Owner (such consent in the Owner’s sole discretion), change or permit any change in the share owning structure of the Bareboat Charterer.

5.2
Any financial statements and / or financial information provided to the Owner in accordance with Clause 5.1 shall be prepared in accordance with US GAAP, consistently applied on a consistent basis.
6.
PAYMENT MECHANICS

6.1
All payments by the Guarantor under this Deed shall be made for value on the due date at the time and in the currency in which the Guaranteed Obligations are due and payable.

6.2
Payment shall be made to such account as the Owner specifies to the Guarantor in writing.

6.3
All payments to be made by the Guarantor under this Deed shall be calculated and be made without (and free and clear of any deduction for) set-off or counterclaim.
7.
PARTIAL PAYMENTS

7.1
If the Owner receives a payment that is insufficient to discharge all the amounts then due and payable by the Guarantor under this Deed, the Owner shall apply that payment towards the obligations of the Guarantor under this Deed to discharge
PAGE 9

amounts owed to the Owner under any of the Relevant Documents in such order as the Owner may, in its discretion, determine.
8.
SET-OFF
The Owner may set off any matured obligation due from the Guarantor under this Deed (to the extent beneficially owned by the Owner) against any matured obligation owed by the Owner to the Guarantor, regardless of the place of payment, or currency of either obligation. If the obligations are in different currencies, the Owner may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off.
9.
TAX GROSS-UP

9.1
The Guarantor shall make all payments to be made by it under this Deed without any Tax Deduction, unless a Tax Deduction is required by law.

9.2
If a Tax Deduction is required by law to be made by the Guarantor, the amount of the payment due from the Guarantor 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.

9.3
If the Guarantor is required to make a Tax Deduction, the Guarantor 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.

9.4
The Guarantor shall deliver to the Owner evidence reasonably satisfactory to the Owner that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the relevant taxing authority.
10.
CURRENCY CLAUSES

10.1
If a payment is made to the Owner under this Deed in a currency (“ Payment Currency ”) other than the currency in which it is expressed to be payable (“ Contractual Currency ”), the Owner may convert that payment into the Contractual Currency at the rate at which it (acting reasonably and in good faith) is able to purchase the Contractual Currency with the Payment Currency on or around the date of receipt of the payment and to the extent that the converted amount of the payment falls short of the amount due and payable the Guarantor will remain liable for such shortfall and such shortfall shall form part of the Guaranteed Obligations.
11.
COSTS AND EXPENSES

11.1
The Guarantor shall pay to the Owner the amount of all costs and expenses (including, without limitation, legal fees, stamp duties and any value added tax) incurred by the Owner in connection with the enforcement of, or preservation of, any rights under, this Deed on a full indemnity basis.
12.
CERTIFICATES AND DETERMINATIONS
PAGE 10


12.1
Any certificate or determination by the Owner of a rate or an amount payable under this Deed is, in the absence of manifest error, conclusive evidence of the matters to which it relates.
13.
PARTIAL INVALIDITY

13.1
If, at any time, any provision of this Deed 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 nor the legality, validity or enforceability of such provision under the law of any other jurisdiction will in any way be affected or impaired.
14.
REMEDIES AND WAIVERS

14.1
No failure to exercise, nor any delay in exercising, on the part of the Owner, any right or remedy under this Deed or any Relevant Document shall operate as a waiver, nor shall any single or partial exercise of any right or remedy prevent any further or other exercise or the exercise of any other right or remedy. The rights and remedies provided in this Deed and the Relevant Documents are cumulative and not exclusive of any rights or remedies provided by law.
15.
NOTICES

15.1
Any communication to be made under or in connection with this Deed shall be made in writing and, unless otherwise stated, may be made by e-mail, fax or letter.

15.2
The address, fax number and e-mail address (and the department or officer, if any, for whose attention the communication is to be made) of the Guarantor and the Owner for any communication or document to be made or delivered under or in connection with this Deed is:

15.2.1
in the case of the Guarantor:
Address:
Seanergy Maritime Holdings Corp.
c/o Seanergy Management Corp.
154 Vouliagmenis Avenue,
16674 Glyfada, Athens, Greece
Fax: +30 210 9638404
Email: legal@seanergy.gr

15.2.2
in the case of the Owner:
Address: Cargill International SA, 14 Chemin de Normandie, 1206 Geneva, Switzerland
PAGE 11

Fax: +41 22 703 2555
E-mail:
George_Wells@cargill.com
otprojects@cargill.com
Olivier_demierre@cargill.com
Ann_shazell@cargill.com
Oliver_HandasydeDick@cargill.com
Keith_dawe@cargill.com
Kyriakos_attikouris@gargill.com
or any substitute a ddress, fax number, e-mail address or department or officer as may be notified in writing to the other Party by not less than seven (7) days’ notice.

15.3
Any communication or document made or delivered by one person to another under or in connection with this Deed will be effective only:

15.3.1
if by way of fax, when received in legible form; or

15.3.2
if by way of letter, when it has been left at the relevant address or five (5) days after being deposited in the post postage prepaid in an envelope addressed to it at that address; or

15.3.3
if by way of e-mail, when it is received,
and, if a particular department or officer is specified as part of its address details provided under Clause 15.2, if addressed to that department or officer.

15.4
Any communication or document to be made or delivered to the Owner will be effective only when actually received by the Owner and then only if it is expressly marked for the attention of the department or officer identified above (or any substitute department or officer as the Owner shall specify for this purpose).
16.
ENGLISH LANGUAGE

16.1
Any notice or other document given or provided under or in connection with this Deed must be in English.
17.
COUNTERPARTS

17.1
This Deed may be executed in counterparts each of which when executed and delivered shall constitute an original of this Deed, but all the counterparts shall together constitute the same agreement. No counterpart shall be effective until each Party has executed at least one counterpart. A signed copy received in pdf format shall be deemed to be an original.
18.
GOVERNING LAW

18.1
This Deed and any non-contractual obligations arising out of or in connection with it are governed by, and construed in accordance with, English law.
PAGE 12

19.
ENFORCEMENT

19.1
Jurisdiction of English courts

19.1.1
The courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with this Deed (including a dispute relating to the existence, validity or termination of this Deed and/or any non-contractual obligation arising out of or in connection with this Deed) (a “ Dispute ”).

19.1.2
The Parties agree that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly no Party will argue to the contrary.

19.1.3
This Clause 19 is for the benefit of the Owner. As a result, the Owner shall not be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, the Owner may take concurrent proceedings in any number of jurisdictions.
19.2 Service of process

19.2.1
Without prejudice to any other mode of service allowed under any relevant law, the Guarantor (not being incorporated in England and Wales):

(a)
irrevocably appoints Messrs. E.J.C. ALBUM, SOLICITORS presently of Landmark House, 190 Willifield Way, London NW11 6YA, England (attention: Mr Edward Album, tel: +44 208 455 7653, fax: +44 208 457 5558 and email: ejca@mitgr.com) as its agent for service of process in relation to any proceedings before the English courts in connection with this Deed; and

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

19.2.2
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 Guarantor must immediately (and in any event within five (5) days of such event taking place) appoint another agent on terms acceptable to the Owner. Failing this, the Owner may appoint another agent for this purpose.
T H I S  D E E D HAS BEEN EXECUTED AND DELIVERED ON THE DATE STATED AT THE BEGINNING OF THIS DEED.
PAGE 13

EXECUTION PAGE - GUARANTEE AND INDEMNITY –
“CHAMPIONSHIP”
GUARANTOR
Signed as a deed by
 
Seanergy Maritime Holdings Corp. , a corporation duly incorporated and validly existing under the laws of the Republic of the Marshall Islands, by
 
Theodora Mitropetrou ,
 
being a person who, in accordance with the laws of that territory, is acting under the authority of the corporation.
)
)
)
)
)
)
)
)
)
)
)
 
/s/ Theodora Mitropetrou
Authorised Signatory



PAGE 14

EXECUTION PAGE - GUARANTEE AND INDEMNITY –
“CHAMPIONSHIP”
OWNER
Signed as a deed by
 
CARGILL INTERNATIONAL SA , a corporation duly incorporated and validly existing under the laws of Switzerland, by
 
George Wells ,
 
being a person who, in accordance with the laws of that territory, is acting under the authority of the company.
)
)
)
)
)
)
)
)
)
)
)
/s/ George Wells
Authorised Signatory




PAGE 15


Exhibit 4.95


Dated 13 February 2019

$20,890,000

TERM LOAN FACILITY

PARTNER SHIPPING CO. LIMITED
as Borrower
and
SEANERGY MARITIME HOLDINGS CORP.
as Corporate Guarantor
and
AMSTERDAM TRADE BANK N.V.
as Arranger
and
AMSTERDAM TRADE BANK N.V.
as Facility Agent
and
AMSTERDAM TRADE BANK N.V.
as Security Agent


FACILITY AGREEMENT
relating to
(i) the refinancing of the existing indebtedness
secured on m.v. "PARTNERSHIP" and
(ii) general working capital purposes of the Group









W A T S O N  F A R L E Y
&
W I L L I A M S
Index

Clause
Page
   
Section 1  Interpretation
2
1    Definitions and Interpretation
2
Section 2  The Facility
28
2    The Facility
28
3    Purpose
29
4    Conditions of Utilisation
29
Section 3  Utilisation
31
5    Utilisation
31
Section 4  Repayment, Prepayment and Cancellation
33
6    Repayment
33
7    Prepayment and Cancellation
34
Section 5  Costs of Utilisation
38
8    Interest
38
9    Interest Periods
39
10  Changes to the Calculation of Interest
40
11  Fees
41
Section 6  Additional Payment Obligations
43
12  Tax Gross Up and Indemnities
43
13  Increased Costs
47
14  Other Indemnities
49
15  Mitigation by the Finance Parties
51
16  Costs and Expenses
52
Section 7  Guarantee
53
17  Guarantee and Indemnity - Corporate Guarantor
53
Section 8 Representations, Undertakings and Events of Default
56
18  Representations
56
19  Information Undertakings
62
20  Financial Covenants
65
21  General Undertakings
66
22  Insurance Undertakings
72
23  General Ship Undertakings
77
24  Security Cover
81
25  Accounts and application of Earnings
83
26  Events of Default
84
Section 9 Changes to Parties
90
27  Changes to the Lenders
90
28  Changes to the Transaction Obligors
94
Section 10  The Finance Parties
96
29  The Facility Agent, the Arranger and the Reference Banks
96
30  The Security Agent
106
31  Conduct of Business by the Finance Parties
120
32  Sharing among the Finance Parties
121
Section 11  Administration
123
33  Payment Mechanics
123
34  Set-Off
126
35  Bail-In
126
36  Notices
126


37  Calculations and Certificates
128
38  Partial Invalidity
129
39  Remedies and Waivers
129
40  Settlement or Discharge Conditional
129
41  Irrevocable Payment
129
42  Amendments and Waivers
129
43  Confidential Information
132
44  Confidentiality of Funding Rates and Reference Bank Quotations
136
45  Counterparts
137
Section 12  Governing Law and Enforcement
138
46  Governing Law
138
47  Enforcement
138

Schedules

Schedule 1 The Parties
139
 
Part A The Obligors
139
 
Part B The Original Lenders
140
 
Part C The Servicing Parties
141
Schedule 2 Conditions Precedent
143
 
Part A Conditions Precedent to Initial Utilisation Request
143
 
Part B Conditions Precedent to the Utilisation of Tranche A
145
 
Part C Conditions Precedent to the Utilisation of an Advance under Tranche B or Tranche C
147
Schedule 3 Requests
148
 
Part A Utilisation Request
148
 
Part B Selection Notice
149
Schedule 4 Form of Transfer Certificate
150
Schedule 5 Form of Assignment Agreement
152
Schedule 6 Form of Compliance Certificate
155
Schedule 7 Timetables
156
Schedule 8 Vessel Report
157

Execution

Execution Pages
158


THIS AGREEMENT is made on 13 February 2019
PARTIES
(1)
PARTNER SHIPPING CO. LIMITED , a company incorporated in the Republic of Malta whose registered address is at 147/1 St. Lucia Street, Valletta, VLT 1185, Malta as borrower (" Borrower ");
(2)
SEANERGY MARITIME HOLDINGS CORP. , a corporation incorporated in the Republic of the Marshall Islands whose registered office is at the Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH 96960, Marshall Islands as corporate guarantor (the " Corporate Guarantor ");
(3)
AMSTERDAM TRADE BANK N.V. as arranger (the " Arranger ");
(4)
THE FINANCIAL INSTITUTIONS listed in Part B of Schedule 1 ( The Parties ) as lenders (the " Original Lenders ");
(5)
AMSTERDAM TRADE BANK N.V. as agent of the other Finance Parties (the " Facility Agent "); and
(6)
AMSTERDAM TRADE BANK N.V. as security agent for the Secured Parties (the " Security Agent ").
BACKGROUND
The Lenders have agreed to make available to the Borrower a facility of up to $20,890,000 in three Tranches as follows:
(a)
Tranche A, in an amount of up to 16,390,000, to be used for the purpose of refinancing the Existing Indebtedness secured on the Ship;
(b)
Tranche B, in an amount of up to $2,250,000, to be used for general working capital purposes of the Group; and
(c)
Tranche C, in an amount of up to $2,250,000, to be used for general working capital purposes of the Group.
OPERATIVE PROVISIONS

SECTION 1


INTERPRETATION
1
DEFINITIONS AND INTERPRETATION

1.1
Definitions
In this Agreement:
" Account Bank " means Amsterdam Trade Bank N.V. acting through its office at World Trade Center, Tower I, Level 6 Strawinskylaan 1939, 1077 XX Amsterdam, The Netherlands or any replacement bank or other financial institution as may be approved by the Facility Agent acting with the authorisation of the Majority Lenders.
" Accounts " means, together, the Operating Account and the DD Reserve Account.
" Account Security " means a document creating Security over any Account in agreed form.
" 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;
" Additional Repayment " means an additional repayment made pursuant to Clause 6.3 ( Additional Repayments ).
" 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.
" Approved Brokers " means Clarksons Valuations Limited, Braemar ACM Valuations Limited, Simpson Spence & Young Valuations Services Ltd, Arrow Research Limited, Fearnleys Shipbrokers A/S (or any Affiliate of such person through which valuations are commonly issued) and any other firm or firms of independent sale and purchase shipbrokers approved in writing by the Facility Agent, acting with the authorisation of the Majority Lenders.
" Approved Charter " means each of:

(a)
the time charter for the Ship dated 26 May 2017 (as amended and/or supplemented by a first addendum dated 23 May 2018, as further amended and extended by a second addendum dated 28 November 2018 and as may be further amended and/or extended from time to time) made between the Borrower as owner and the Approved Charterer as charterer; and

(b)
the time charter for the Ship dated 14 September 2018 (as may be amended and/or supplemented from time to time) made between the Borrower as owner and the Approved Charterer as charterer,
and, in the plural, means both of them.
" Approved Charterer " means Uniper Global Commodities SE, a company incorporated in Germany whose principal office is at Holzstrasse 6, Dusseldorf 40221, Germany.
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" Approved Classification " means A1, Bulk Carrier, BC-A (Holds 2,4,6 & 8 may be empty), ESP, AMS, ACCU, CSR, CPS, BWE, UWILD, CRC(I), TCM, GRAB(20) with the Approved Classification Society.
" Approved Classification Society " means American Bureau of Shipping or any other classification society approved in writing by the Facility Agent acting with the authorisation of the Majority Lenders.
" Approved Commercial Manager " means Fidelity Marine Inc., a corporation incorporated 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 or any other person approved in writing by the Facility Agent acting with the authorisation of the Majority Lenders as the commercial manager of the Ship.
" Approved Insurance Brokers " means Bankserve Insurance Services Ltd and any other firm or firms of insurance brokers approved in writing by the Facility Agent, acting with the authorisation of the Majority Lenders.
" Approved Flag " means the Marshall Islands or such other flag approved in writing by the Facility Agent acting with the authorisation of the Majority Lenders.
" Approved Manager " means the Approved Commercial Manager or the Approved Technical Manager.
" Approved Technical Manager " means V. Ships Limited, a corporation incorporated and existing under the laws of Cyprus whose registered office is at Zenas Gunther, 16-18, Agia Triada, 3035 Limassol, Cyprus or any other person approved in writing by the Facility Agent acting with the authorisation of the Majority Lenders as the technical manager of the Ship.
" Arrangement Fee " means the fee referred to in Clause 11.2 ( Arrangement fee ).
" Assignment Agreement " means an agreement substantially in the form set out in Schedule 5 ( Form of Assignment Agreement ) or any other form agreed between the relevant assignor and assignee.
" Authorisation " means an authorisation, consent, approval, resolution, licence, exemption, filing, notarisation, legalisation or registration.
" Availability Period " means, in relation to a Tranche, the period from and including the date of this Agreement to and including the date falling on the earlier of:

(a)
in relation to Tranche A, 20 February 2019 and in relation to each of Tranche B and Tranche C, 30 March 2020 (or, in each case, such later date as the Facility Agent may, acting upon the instructions of the Majority Lenders, agree with the Borrower); and

(b)
the date on which the relevant Tranche, or any part thereof, is fully borrowed, cancelled or terminated in accordance with the terms of this Agreement.
" Available Commitment " means a Lender's Commitment minus:

(a)
the amount of its participation in the outstanding Loan; and

(b)
in relation to any proposed Utilisation, the amount of its participation in any Advance that is due to be made on or before the proposed Utilisation Date.
" Available Facility " means the aggregate for the time being of each Lender's Available Commitment.
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" Bail-In Action " means the exercise of any Write-down and Conversion Powers.
" Bail-In Legislation " means:

(a)
in relation to an EEA Member Country which has implemented, or which at any time implements, Article 55 of Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms, the relevant implementing law or regulation as described in the EU Bail-In Legislation Schedule from time to time; and

(b)
in relation to any other state, any analogous law or regulation from time to time which requires contractual recognition of any Write-down and Conversion Powers contained in that law or regulation.
" Balloon Instalment A " has the meaning given to it in Clause 6.1 ( Repayment of Loan ).
" Break Costs " means the amount (if any) by which:

(a)
the interest which a Lender should have received for the period from the date of receipt of all or any part of its participation in the Loan or an Unpaid Sum to the last day of the current Interest Period in relation to the Loan, the relevant part of the Loan or that Unpaid Sum, had the principal amount or Unpaid Sum received been paid on the last day of that Interest Period;
exceeds

(b)
the amount which that Lender would be able to obtain by placing an amount equal to the principal amount or Unpaid Sum received by it on deposit with a leading bank 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 Amsterdam, London, Athens and New York.
" Cash " shall have the meaning given to such term in the Latest Financial Statements.
" Charter " means any charter relating to the Ship, or other contract for its employment, whether or not already in existence.
" Charter Assignment " means the assignment creating Security over any Charter which is for a term which exceeds 13 months, in the agreed form.
" 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 the Borrower and the Approved Commercial Manager regarding the commercial management of the Ship.
" Commitment " means:

(a)
in relation to an Original Lender, the amount set opposite its name under the heading "Commitment" in Part B of Schedule 1 ( The Parties ) and the amount of any other Commitment transferred to it under this Agreement; and
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(b)
in relation to any other Lender, the amount of any Commitment transferred to it under this Agreement,
to the extent not cancelled, reduced or transferred by it under this Agreement.
" Compliance Certificate " means a certificate in the form set out in Schedule 6 ( Form of Compliance Certificate ) or in any other form agreed between the Borrower and the Facility Agent.
" Confidential Information " means all information relating to any Transaction Obligor, the Finance Documents or the Facility of which a Finance Party becomes aware in its capacity as, or for the purpose of becoming, a Finance Party or which is received by a Finance Party in relation to, or for the purpose of becoming a Finance Party under, the Finance Documents or the Facility from either:

(a)
any Transaction Obligor or any of its advisers; or

(b)
another Finance Party, if the information was obtained by that Finance Party directly or indirectly from any Transaction Obligor or any of its advisers,
in whatever form, and includes information given orally and any document, electronic file or any other way of representing or recording information which contains or is derived or copied from such information but excludes:

(i)
information that:

(A)
is or becomes public information other than as a direct or indirect result of any breach by that Finance Party of Clause 43 ( Confidential Information ); or

(B)
is identified in writing at the time of delivery as non-confidential by any Transaction Obligor or any of its advisers; or

(C)
is known by that Finance Party before the date the information is disclosed to it in accordance with paragraphs (a) or (b) above or is lawfully obtained by that Finance Party after that date, from a source which is, as far as that Finance Party is aware, unconnected with a Transaction Obligor and which, in either case, as far as that Finance Party is aware, has not been obtained in breach of, and is not otherwise subject to, any obligation of confidentiality; and

(ii)
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 Facility Agent.
" Corresponding Debt " means any amount, other than any Parallel Debt, which an Obligor owes to a Secured Party under or in connection with the Finance Documents.
" DD Reserve   Account " means:

(a)
an account in the name of the Borrower with the Account Bank designated "Partner Shipping Co. Limited - DD Reserve Account"; or

(b)
any other account in the name of the Borrower with the Account Bank which may, with the prior written consent of the Facility Agent, be opened in the place of the
5

account referred to in paragraph (a) above, irrespective of the number or designation of such replacement account; or

(c)
any sub-account of any account referred to in paragraphs (a) or (b) above.
" Deed of Release " means a deed releasing the Existing Security under the Existing Facility Agreement in a form acceptable to the Facility Agent.
" Default " means an Event of Default or a Potential Event of Default.
" Delegate " means any delegate, agent, attorney or co-trustee appointed by the Security Agent.
" 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 the Ship, all moneys whatsoever which are now, or later become, payable (actually or contingently) to the Borrower or the Security Agent and which arise out of or in connection with or relate to 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 Facility Agent, pooled or shared with any other person:

(i)
all freight, hire and passage moneys including, without limitation, all moneys payable under, arising out of or in connection with a Charter or a Charter Guarantee;

(ii)
the proceeds of the exercise of any lien on sub-freights;

(iii)
compensation payable to the Borrower or the Security Agent in the event of requisition of the Ship for hire or use;

(iv)
remuneration for salvage and towage services;
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(v)
demurrage and detention moneys;

(vi)
without prejudice to the generality of sub-paragraph (i) above, damages for breach (or payments for variation or termination) of any charterparty or other contract for the employment of the Ship;

(vii)
all moneys which are at any time payable under any Insurances in relation to loss of hire;

(viii)
all monies which are at any time payable to 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 (viii) of paragraph (a) above are pooled or shared with any other person, that proportion of the net receipts of the relevant pooling or sharing arrangement which is attributable to the Ship.
" 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

(g)
adding back the expenses of the special and intermediate surveys, in case these expenses are not capitalized,
in each case in respect of the relevant Rolling Period.
" EBITDA to Net Interest Expense Ratio " means, as at the date of calculation, the ratio of EBITDA to Net Interest Expense.
" EEA Member Country " means any member state of the European Union, Iceland, Liechtenstein and Norway.
" Environmental Approval " means any present or future permit, ruling, variance or other Authorisation required under Environmental 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.
7

" 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

(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.
" EU Bail-In Legislation Schedule " means the document described as such and published by the Loan Market Association (or any successor person) from time to time.
" Event of Default " means any event or circumstance specified as such in Clause 26 ( Events of Default ).
" Excess Cash " means, at any relevant time, the amount (if any) by which the credit balance on the Operating Account exceeds the aggregate of:

(a)
the Minimum Liquidity Amount; and

(b)
$500,000.
" Existing Facility Agreement " means the facility agreement dated 24 May 2017 (as amended and restated by a deed of accession, amendment and restatement dated 25 September 2017 and as further amended and/or supplemented by a supplemental agreement dated 18 May 2018 ) and made between, amongst others, (i) the Borrower and Champion Ocean Navigation Co. Limited (for the avoidance of doubt, the latter was released from its obligations under the said facility agreement on 7 November 2018) as joint and several borrowers, (ii) the Corporate Guarantor as corporate guarantor, (iii) the Arranger as arranger, (iv) the Original Lenders as lenders, (v) the Facility Agent as facility agent and (vi) the Security Agent as security agent in respect of a loan facility of up to $34,500,000 for the purposes therein specified.

8
" Existing Indebtedness " means, at any date, the outstanding Financial Indebtedness of the Borrower on that date under the Existing Facility Agreement (being $16,390,000 at the date of this Agreement).
" Existing Security " means any Security created to secure the Existing Indebtedness.
" Facility " means the term loan facility made available under this Agreement as described in Clause 2 ( The Facility ).
" Facility Office " means the office or offices notified by a Lender to the Facility Agent in writing on or before the date it becomes a Lender (or, following that date, by not less than 5 Business Days' written notice) as the office or offices through which it 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 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 July 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 2019; 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 2019,
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 Finance Document required by FATCA.
" FATCA Exempt Party " means a Party that is entitled to receive payments free from any FATCA Deduction.
" Fee Letter " means any letter or letters dated on or about the date of this Agreement between any of the Arranger, the Facility Agent and the Security Agent and any Obligor setting out any of the fees referred to in Clause 11 ( Fees ).
" Finance Document " means:

(a)
this Agreement;
9


(b)
any Fee Letter;

(c)
each Utilisation Request;

(d)
any Security Document;

(e)
the Intercreditor Agreement;

(f)
any other document which is executed for the purpose of establishing any priority or subordination arrangement in relation to the Secured Liabilities; or

(g)
any other document designated as such by the Facility Agent and the Borrower.
" Finance Party " means the Facility Agent, the Security Agent, the Arranger or a Lender.
" Financial Indebtedness " means any indebtedness for or in relation to:

(a)
moneys borrowed;

(b)
any amount raised by acceptance under any acceptance credit facility or dematerialised equivalent;

(c)
any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument;

(d)
the amount of any liability in relation to any lease or hire purchase contract which would, in accordance with GAAP, be treated as a balance sheet liability;

(e)
receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis);

(f)
any amount raised under any other transaction (including any forward sale or purchase agreement) of a type not referred to in any other paragraph of this definition having the commercial effect of a borrowing;

(g)
any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price (and, when calculating the value of any derivative transaction, only the marked to market value (or, if any actual amount is due as a result of the termination or close-out of that derivative transaction, that amount) shall be taken into account);

(h)
any counter-indemnity obligation in relation to a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution; and

(i)
the amount of any liability in relation to any guarantee or indemnity for any of the items referred to in paragraphs (a) to (h) above.
" Fleet Market Value " means, in relation to the Fleet Vessels, as at the date of calculation, the aggregate Market Value thereof as most recently determined pursuant to Clause 24.7 ( Provision of valuations ).
" Fleet Vessels " means the vessels from time to time owned by the members of the Group and " Fleet Vessel " means any of them.
" Funding Rate" means any individual rate notified by a Lender to the Facility Agent pursuant to sub-paragraph (ii) of paragraph (a) of Clause 10.4 ( Cost of funds ).
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" GAAP " means generally accepted accounting principles in the United States of America and including IFRS.
" General Assignment " means the general assignment creating Security over the Ship's Earnings, its Insurances and any Requisition Compensation in agreed form.
" Group " means the Corporate Guarantor and its Subsidiaries (that are consolidated for the purposes of its Financial Statements) and "member of the Group" shall be construed accordingly.
" Holding Company " means, in relation to a person, any other person in relation to which it is a Subsidiary.
" IFRS " means international accounting standards within the meaning of the IAS Regulation 1606/2002 to the extent applicable to the relevant financial statements.
" Indemnified Person " has the meaning given to it in Clause 14.2 ( Other indemnities ).
" 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 Ship's 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.
" Intercreditor Agreement " means the intercreditor agreement entered into or to be entered into between, inter alia, the Borrower, the Corporate Guarantor, the Shareholder, the Lenders, the Facility Agent and the Security Agent as the same has been and may further be amended from time to time.
" Interest Payment Date " has the meaning given to it in paragraph (a) of Clause 8.2 ( Payment of interest ).
" Interest Period " means, in relation to the Loan or any part of the Loan, each period determined in accordance with Clause 9 ( Interest Periods ) and, in relation to an Unpaid Sum, each period determined in accordance with Clause 8.3 ( Default interest ).
" Interpolated 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
11

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.
" Junior Agreement " means each of:

(a)
the loan agreement dated 24 May 2017 (as amended and supplemented by a supplemental letter dated 22 June 2017, a second supplemental letter dated 22 August 2017 and as amended and restated by a deed of amendment and restatement dated 27 September 2017 and as amended from time to time) and made between the Corporate Guarantor as borrower and the Shareholder as lender;

(b)
the loan agreement dated 4 October 2016 (as amended and restated by a deed of amendment and restatement dated 28 November 2016 and as amended and supplemented by a supplemental agreement dated 13 June 2018 and as amended from time to time) and made between the Corporate Guarantor as borrower and the Shareholder as lender; and

(c)
the convertible promissory note dated 27 September 2017 (as amended from time to time) issued by the Corporate Guarantor as maker to the Shareholder as holder,
and, in the plural, means all of them.
" Junior Finance Documents " means:

(a)
the guarantee executed or to be executed by the Borrower in respect of the Corporate Guarantor's obligations under the Junior Agreements;

(b)
the second preferred Marshall Islands mortgage on the Ship executed or to be executed by the Borrower in favour of the Shareholder; and

(c)
the second priority general assignment of the Earnings, Insurances and any Requisition Compensation in respect of the Ship executed or to be executed by the Borrower in favour of the Shareholder.
" Latest Financial Statements " means, as at the date of calculation or, as the case may be, in respect of an Accounting Period, the annual audited or quarterly unaudited (as the case may be), consolidated financial statements the Corporate Guarantor is obliged to deliver to the Facility Agent pursuant to Clause 19.2 ( Financial statements ) paragraphs (a) and (b).
" Lender " means:

(a)
any Original Lender; and

(b)
any bank, financial institution, trust, fund or other entity which has become a Party in accordance with Clause 27 ( Changes to the Lenders ),
which in each case has not ceased to be a Party in accordance with this Agreement.
" Leverage Ratio " means, as at the date of calculation, the ratio (expressed as a percentage) of Net Debt to Market Value Adjusted Total Assets.
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" 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 ),
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 an Advance, a Tranche or any other 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 $500,000 or the equivalent in any other currency.
" Majority   Lenders " means:

(a)
if no Advance has yet been made, a Lender or Lenders whose Commitments aggregate more than 66⅔ per cent. of the Total Commitments; or

(b)
at any other time, a Lender or Lenders whose participations in the Loan aggregate more than 66⅔ per cent. of the amount of the Loan then outstanding or, if the Loan has been repaid or prepaid in full, a Lender or Lenders whose participations in the Loan immediately before repayment or prepayment in full aggregate more than 66⅔ per cent. of the Loan immediately before such repayment.
" Management Agreement " means the Technical Management Agreement or the Commercial Management Agreement.
" Manager's   Undertaking " means the letter of undertaking and assignment of insurances from its Approved Technical Manager and the letter of undertaking and assignment of insurances from the Approved Commercial Manager subordinating the rights of such Approved Technical Manager and such Approved Commercial Manager respectively against the Ship and the Borrower to the rights of the Finance Parties in agreed form.
" Margin " means 4.65 per cent. per annum.
" Market Value Adjusted Other Assets " means, as at the date of calculation, the Fleet Market Value plus the book value (less depreciation and amortization computed in accordance with the Latest Financial Statements on a consolidated basis of all non-current assets of the Group (which, without limitation, shall exclude all Fleet Vessels)), as stated in the Latest Financial Statements.
" Market Value Adjusted Total Assets " means, as at the date of calculation, the aggregate of the Market Value Adjusted Other Assets and the Total Current Assets.
" Market   Value " means, in relation to the Ship or any other vessel, at any date, the market value of the Ship shown by the arithmetic average of 2 valuations (each at the cost of the Borrower) each prepared:

(a)
as at a date not more than 14 days previously;

(b)
by an Approved Broker (one of which is appointed by the Facility Agent);
13


(c)
with or without physical inspection of the Ship or vessel (as the Facility Agent 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,

(e)
after deducting the estimated amount of the usual and reasonable expenses which would be incurred in connection with the sale,
Provided that if the higher of the two values is more than 120 per cent. of the other value, the Facility Agent shall (at the cost of the Borrower) obtain a third valuation from an Approved Broker in which case the Market Value shall be the arithmetic average of all 3 such valuations.
" Material   Adverse   Effect " means in the reasonable opinion of the Majority Lenders a material adverse effect on:

(a)
the business, operations, property, condition (financial or otherwise) or prospects of any Obligor or the Obligors as a whole; or

(b)
the ability of any Obligor to perform its obligations under any Finance Document; or

(c)
the validity or enforceability of, or the effectiveness or ranking of any Security granted pursuant to any of, the Finance Documents or the rights or remedies of any Finance Party under any of the Finance Documents.
" Minimum Liquidity Amount " has the meaning given to it in Clause 20.1 ( Minimum Liquidity ).
" 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 a first priority, or as the case may be, preferred ship mortgage on the Ship and, if required by the laws of the relevant Approved Flag, the deed of covenant collateral to the mortgage in agreed form.
" Net Debt " means, as at the date of calculation, the Total Debt less any drawn amounts of the Notes less any cash, restricted cash and cash equivalents, in each case as stated in the Latest Financial Statements.
" Net Interest Expense " means, as at the date of calculation, all interest paid by the Group minus all interest income received by the Group in respect of the relevant calculation Rolling Period, as stated in the Latest Financial Statements.
14

" Notes " means, as at the date of calculation, the aggregate outstanding amount of certain notes (including, without limitation, the notes/loans forming part of the Junior Agreements) issued or to be issued by the Corporate Guarantor to its shareholders and held or to be held by those shareholders in exchange for loan made by those shareholders to the Corporate Guarantor which have been or are to be, on-lent to the Borrower and other members of the Group to assist them with their working capital requirements.
" Obligor " means the Borrower or the Corporate Guarantor.
" Operating Account " means, in relation to the Borrower:

(a)
an account in the name of the Borrower with the Account Bank designated "Partner Shipping Co. Limited - Operating Account";

(b)
any other account in the name of the Borrower with the Account Bank which may, with the prior written consent of the Facility Agent, be opened in the place of the account referred to in paragraph (a) above, irrespective of the number or designation of such replacement account; or

(c)
any sub-account of any account referred to in paragraphs (a) or (b) above.
" Original   Financial   Statements " means in relation to the Corporate Guarantor, its audited consolidated financial statements for the financial year ended 31 December 2016.
" Overseas   Regulations " means the Overseas Companies Regulations 2009 (SI 2009/1801).
" Parallel   Debt " means any amount which an Obligor owes to the Security Agent under Clause 30.2 ( Parallel Debt (Covenant to pay the Security Agent) ) or under that clause as incorporated by reference or in full in any other Finance Document.
" Participating   Member   State " means any member state of the European Union that has the euro as its lawful currency in accordance with legislation of the European Union relating to Economic and Monetary Union.
" Party " means a party to this Agreement.
" Perfection Requirements " means the making or procuring of filings, stampings, registrations, notarisations, endorsements, translations and/or notifications of any Finance Document (and/or any Security created under it) necessary for the validity, enforceability (as against the relevant Obligor or any relevant third party) and/or perfection of that Finance Document.
" Permitted   Charter " means:

(a)
the Approved Charters;

(b)
any Charter:

(i)
which is a time, voyage or consecutive voyage charter;

(ii)
the duration of which does not exceed 13 months plus a redelivery allowance of not more than 30 days;

(iii)
which is entered into on bona fide arm's length terms at the time at which the Ship is fixed; and

(iv)
in relation to which not more than two months' hire is payable in advance,
15

and any other Charter which is approved in writing by the Facility Agent acting with the authorisation of the Majority Lenders.
" Permitted   Financial   Indebtedness " means:

(a)
any Financial Indebtedness incurred under the Finance Documents;

(b)
until the Utilisation Date of Tranche A, the Existing Indebtedness; and

(c)
any Financial Indebtedness that is subordinated to all Financial Indebtedness incurred under the Finance Documents pursuant to the Intercreditor Agreement.
" Permitted   Security " means:

(a)
until the Utilisation Date of Tranche A, any Existing Security in respect of the Existing Indebtedness;

(b)
Security created by the Finance Documents;

(c)
Security created by the Junior Finance Documents and subordinated pursuant to the Intercreditor Agreement;

(d)
any netting or set-off arrangement entered into by any Transaction Obligor in the ordinary course of its banking arrangements for the purpose of netting debit and credit balances;

(e)
liens for unpaid master's and crew's wages in accordance with first class ship ownership and management practice;

(f)
liens for salvage;

(g)
liens for master's disbursements incurred in the ordinary course of trading;

(h)
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 omission by the Borrower, provided such liens do not secure amounts more than 30 days overdue (unless the overdue amount is being contested in good faith by appropriate steps) and subject, in the case of liens for repair or maintenance, to Clause 23.15 ( Restrictions on chartering, appointment of managers etc. );

(i)
Security arising by operation of law in respect of Taxes which are not overdue for payment or in respect of taxes being contested in good faith by appropriate steps and in respect of which appropriate reserves have been made;

(j)
any Security created in favour of a plaintiff or defendant in any proceedings or arbitration as security for costs and expenses where a Borrower is actively prosecuting or defending such proceedings or arbitration in good faith; and

(k)
any Security arising under Article 24 or 26 of the general terms and conditions ( Algemene Bank Voorwaarden ) of any member of the Dutch Bankers' Association ( Nederlandse Vereniging van Banken ) or any similar term applied by a financial institution in the Netherlands pursuant to its general terms and conditions.
" Potential   Event   of   Default " means any event or circumstance specified in Clause 26 ( 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.
16

" Protected   Party " has the meaning given to it in Clause 12.1 ( Definitions ).
" Quarterly Increases " means the transfers made into the DD Reserve Account pursuant to Clause 25.4 ( Transfers to the DD Reserve Account ).
" 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 Facility Agent 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 Facility Agent by a Reference Bank.
" Reference   Bank   Rate " means the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Facility Agent 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.
" Reference   Banks " means the principal London offices of HSBC Bank Plc, London Branch, Deutsche Bank AG, London Branch, UBS AG, Zurich Branch, Citigroup Global Markets Ltd, London Branch, Credit Suisse International, London Branch, Barclays Bank Plc, London Branch, and JP Morgan Chase Bank NA, London Branch or such other entities as may be appointed by the Facility Agent 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.
17

" Relevant Nominating Body " means any applicable central bank, regulator or other supervisory authority or a group of them, or any working group or committee sponsored or chaired by, or constituted at the request of, any of them or the Financial Stability Board.
" Repayment   Date " means each date on which a Repayment Instalment is required to be paid under Clause 6.1 ( Repayment of Loan ).
" Repayment   Instalment " has the meaning given to it in Clause 6.1 ( Repayment of Loan ).
" Repeating   Representation " means each of the representations set out in Clause 18 ( Representations ) except Clause 18.10 ( Insolvency ), Clause 18.11 ( No filing or stamp taxes ) and Clause 18.12 ( 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.
" Replacement Benchmark " means a benchmark rate which is:

(a)
formally designated, nominated or recommended as the replacement for a Screen Rate by:

(i)
the administrator of that Screen Rate (provided that the market or economic reality that such benchmark rate measures is the same as that measured by that Screen Rate); or

(ii)
any Relevant Nominating Body,
and if replacements have, at the relevant time, been formally designated, nominated or recommended under both paragraphs, the "Replacement Benchmark" will be the replacement under paragraph (ii) above;

(b)
in the opinion of the Majority Lenders and the Borrower, generally accepted in the international or any relevant domestic syndicated loan markets as the appropriate successor to a Screen Rate; or

(c)
in the opinion of the Majority Lenders and the Borrower, an appropriate successor to a Screen Rate.
" Representative " means any delegate, agent, manager, administrator, nominee, attorney, trustee or custodian.
" Requisition " means in relation to the Ship:

(a)
any expropriation, confiscation, requisition (excluding a requisition for hire or use which does not involve a requisition for title) 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 (whether de jure or de facto ) by any government or official authority or by any person or persons claiming to be or to represent a government or official authority; and

(b)
any capture or seizure of the Ship (including any hijacking or theft) by any person whatsoever.
" Requisition Compensation " includes all compensation or other moneys payable to the Borrower by reason of any Requisition or any arrest or detention of the Ship in the exercise or purported exercise of any lien or claim.
18

" Resolution Authority " means any body which has authority to exercise any Write-down and Conversion Powers.
" Restricted Person " means a person that:

(a)
is listed on any Sanctions List (whether designated by name or by reason of being included in a class of person) or otherwise a target of Sanctions;

(b)
is domiciled, registered as located or having its main place of business in, or is incorporated under the laws of or, such country or territory which is, or whose government is, subject to Sanctions broadly prohibiting dealings with such government, country or territory;

(c)
is directly or indirectly owned or controlled by a person referred to in paragraphs (a) or (b) above; or

(d)
owns or controls a person referred to in paragraphs (a) or (b) above.
" Rolling Period " means, as of the last day of an Accounting Period, the immediately prior twelve-month period ending on such day.
" Safety   Management   Certificate " has the meaning given to it in the ISM Code.
" Safety   Management   System " has the meaning given to it in the ISM Code.
" Sanctions " means any economic sanctions laws, sanctions regulations, embargoes or restrictive measures administered enacted or enforced by:

(a)
the United States of America government;

(b)
the United Nations Security Council;

(c)
the United Kingdom;

(d)
the European Union or any of its member states;

(e)
any country to which any Transaction Obligor or any Affiliate of any of them is bound; or

(f)
the respective governmental institutions and agencies of any of the foregoing, including without limitation, the Office of Foreign Assets Control of the US Department of Treasury (OFAC), the United States Department of State and Her Majesty's Treasury (HMT) (together, the " Sanctions Authorities ").
" Sanctions List " means the "Specially Designated Nationals and Blocked Persons" list issued by OFAC, the "Consolidated List of Financial Sanctions Targets and Investment Ban List" issued by HMT, or any similar list issued or maintained or made public by any of the Sanctions Authorities.
" 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 Facility Agent may specify another page or service displaying the relevant rate after consultation with the Borrower.
19

" Screen Rate Replacement Event " means, in relation to a Screen Rate:

(a)
the methodology, formula or other means of determining that Screen Rate has, in the opinion of the Majority Lenders, and the Borrower materially changed;
(b)
(i)

(A)
the administrator of that Screen Rate or its supervisor publicly announces that such administrator is insolvent; or

(B)
information is published in any order, decree, notice, petition or filing, however described, or filed with a court, tribunal, exchange, regulatory authority or similar administrative, regulatory or judicial body which reasonably confirms that the administrator of that Screen Rate is insolvent,
provided that, in each case, at that time, there is no successor administrator to continue to provide that Screen Rate;

(ii)
the administrator of that Screen Rate publicly announces that it has ceased or will cease, to provide that Screen Rate permanently or indefinitely and, at that time, there is no successor administrator to continue to provide that Screen Rate;

(iii)
the supervisor of the administrator of that Screen Rate publicly announces that such Screen Rate has been or will be permanently or indefinitely discontinued; or

(iv)
the administrator of that Screen Rate or its supervisor announces that that Screen Rate may no longer be used; or

(c)
in the opinion of the Majority Lenders and the Borrower, that Screen Rate is otherwise no longer appropriate for the purposes of calculating interest under this Agreement.
" 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 any Secured Party under or in connection with each Finance Document.
" Secured   Party " means each Finance Party from time to time party to this Agreement, a Receiver or any Delegate.
" 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 Share Security;

(b)
the Mortgage;
20


(c)
the General Assignment;

(d)
any Charter Assignment;

(e)
any Account Security;

(f)
any Manager's Undertaking;

(g)
any other document (whether or not it creates Security) which is executed by the Borrower and/or the Corporate Guarantor as security for the Secured Liabilities; or

(h)
any other document agreed to be designated as such by the Facility Agent and the Borrower.
" Security Period " means the period starting on the date of this Agreement and ending on the date on which the Facility Agent 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 Security Agent as trustee for the Secured Parties 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 Security Agent as trustee for the Secured Parties 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 Security Agent as trustee for the Secured Parties;

(c)
the Security Agent's interest in any turnover trust created under the Finance Documents;

(d)
any other amounts or property, whether rights, entitlements, choses in action or otherwise, actual or contingent, which the Security Agent is required by the terms of the Finance Documents to hold as trustee on trust for the Secured Parties,
except:

(i)
rights intended for the sole benefit of the Security Agent; and

(ii)
any moneys or other assets which the Security Agent has transferred to the Facility Agent or (being entitled to do so) has retained in accordance with the provisions of this Agreement.
" Selection   Notice " means a notice substantially in the form set out in Part E of Schedule 3 ( Requests ) given in accordance with Clause 9 ( Interest Periods ).
" Servicing   Party " means the Facility Agent or the Security Agent.
" Shares Security " means, in relation to the Borrower, a document creating Security over the share capital of the Borrower in agreed form.
" Shareholder " means Jelco Delta Holding Corp., a corporation incorporated in the Marshall Islands having its registered office at the Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH 96960, Marshall Islands.
21

" Shareholder WC Facility " means the loan agreement dated 10 April 2018 (as amended and restated by a deed of amendment and restatement dated 13 June 2018, as amended and supplemented on 11 August 2018 and on 31 January 2019 and as amended from time to time) and made between the Corporate Guarantor as borrower and the Shareholder as lender.
" Ship " means the Capesize dry bulk carrier type vessel of a maximum of 179,213 DWT named "PARTNERSHIP", having IMO Number 9597848 built by Hyundai Samho HI in 2012 and registered in the name of the Borrower under an Approved Flag (which at the date of this Agreement is the Marshall Islands flag).
" Ship A " means the Capesize dry bulk carrier type vessel of a maximum of 170,018 DWT named "SQUIRESHIP", having IMO Number 9391646 built by Sungong Shipbuilding & Marine Engineering in 2010 and registered in the name of Squire Ocean Navigation Co. under the Marshall Islands flag.
" Ship B " means the Capesize dry bulk carrier type vessel of a maximum of 170,024 DWT named "PREMIERSHIP", having IMO Number 9398747 built by Sungong Shipbuilding & Marine Engineering in 2010 and registered in the name of Premier Marine Co. under the Isle of Man flag.
" Specified   Time " means a day or time determined in accordance with Schedule 7 ( 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 the Borrower and the Approved Technical Manager regarding the technical management of the Ship.
" Termination   Date " means, in respect of each Tranche, 26 November 2022.
" Third   Parties   Act " has the meaning given to it in Clause 1.5 ( Third party rights ).
" Total   Commitments " means the aggregate of the Commitments, being $20,890,000 at the date of this Agreement.
" 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 such amount to be determined on a consolidated basis less any discounts, allowances and activated goodwill, in each case as shown in the Latest Financial Statements.
" Total Debt " means, as at the date of calculation, the current portion of long-term debt, net of deferred finance costs and the long-term debt, net of current portion and deferred finance costs of the Group as shown in the Latest Financial Statements.
" Total   Loss " means:
22


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

(b)
any Requisition of the Ship, Ship A or Ship B unless the Ship, Ship A or Ship B (as the case may be)  is returned to the full control of the Borrower or the owner thereof ( as applicable) within 30 days of such Requisition.
" Total Loss Date " means, in relation to the Total Loss of the Ship, Ship A or Ship B:

(a)
in the case of an actual loss of the Ship, Ship A or Ship B the date on which it occurred or, if that is unknown, the date when the Ship, Ship A or Ship B (as the case may be)  was last heard of;

(b)
in the case of a constructive, compromised, agreed or arranged total loss of the Ship, Ship A or Ship B 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 or the owner thereof (as applicable) with the Ship's, Ship A's or Ship B's insurers (as the case may be) in which the insurers agree to treat the Ship, Ship A or Ship B (as the case may be) 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 Facility Agent that the event constituting the total loss occurred.
" Tranche " means each of Tranche A, Tranche B and Tranche C.
" Tranche   A " means that part of the Loan made or to be made available to the Borrower to refinance the Existing Indebtedness secured on the Ship under the Existing Facility Agreement in a principal amount determined in accordance with Clause 5.3 ( Currency and amount ).
" Tranche   B " means that part of the Loan made or to be made available to the Borrower for general working capital purposes of the Group (and in particular for the financing of the acquisition and installation of the equipment for open loop scrubber systems on Ship A) in a principal amount determined in accordance with Clause 5.3 ( Currency and amount ).
" Tranche   C " means that part of the Loan made or to be made available to the Borrower for general working capital purposes of the Group (and in particular for the financing of the acquisition and installation of the equipment for open loop scrubber systems on Ship B) in a principal amount determined in accordance with Clause 5.3 ( Currency and amount ).
" Transaction Document " means:

(a)
a Finance Document;

(b)
any Charter exceeding 13 Months without taking into account optional extensions (including, without limitation, the Approved Charters); or

(c)
any other document designated as such by the Facility Agent and the Borrower.
" Transaction Obligor " means an Obligor or any Approved Manager (except for an Approved Manager which is not a member of the Group).
" Transaction Security" means the Security created or evidenced or expressed to be created or evidenced under the Security Documents.
23

" Transfer   Certificate " means a certificate in the form set out in Schedule 4 ( Form of Transfer Certificate ) or any other form agreed between the Facility Agent and the Borrower.
" Transfer   Date " means, in relation to an assignment or a transfer, the later of:

(a)
the proposed Transfer Date specified in the relevant Assignment Agreement or Transfer Certificate; and

(b)
the date on which the Facility Agent executes the relevant Assignment Agreement or Transfer Certificate.
" UK   Establishment " means a UK establishment as defined in the Overseas Regulations.
" Unpaid   Sum " means any sum due and payable but unpaid by a Transaction Obligor under the Finance Documents.
" US " means the United States of America.
" US Tax Obligor " means:

(a)
a person which is resident for tax purposes in the US; or

(b)
a person some or all of whose payments under the Finance Documents are from sources within the US for US federal income tax purposes.
" Utilisation " means a utilisation of the Facility.
" Utilisation   Date " means the date of a Utilisation, being the date on which the relevant Advance is to be made.
" Utilisation   Request " means a notice substantially in the form set out in Part D 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.
" Write-down and Conversion Powers " means:

(a)
in relation to any Bail-In Legislation described in the EU Bail-In Legislation Schedule from time to time, the powers described as such in relation to that Bail-In Legislation in the EU Bail-In Legislation Schedule; and

(b)
in relation to any other applicable Bail-In Legislation:

(i)
any powers under that Bail-In Legislation to cancel, transfer or dilute shares issued by a person that is a bank or investment firm or other financial institution or affiliate of a bank, investment firm or other financial institution, to cancel, reduce, modify or change the form of a liability of such a person or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect
24

as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers; and

(ii)
any similar or analogous powers under that Bail-In Legislation.
1.2
Construction
(a)
Unless a contrary indication appears, a reference in this Agreement to:

(i)
the " Account   Bank ", the " Arranger ", the " Facility   Agent ", any " Finance   Party ", any " Lender ", any " Obligor ", any " Party ", any " Secured   Party ", the " Security   Agent ", any " Transaction   Obligor " or any other person shall be construed so as to include its successors in title, permitted assigns and permitted transferees to, or of, its rights and/or obligations under the Finance Documents;

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

(iii)
a liability which is " contingent " means a liability which is not certain to arise and/or the amount of which remains unascertained;

(iv)
" document " includes a deed and also a letter;

(v)
" expense " means any kind of cost, charge or expense (including all legal costs, charges and expenses) and any applicable Tax including VAT;

(vi)
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;

(vii)
" 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;

(viii)
" 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;

(ix)
" 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;

(x)
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);

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

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

(xiii)
a time of day is a reference to London time;

(xiv)
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
25

a jurisdiction other than England, be deemed to include that which most nearly approximates in that jurisdiction to the English legal term;

(xv)
words denoting the singular number shall include the plural and vice versa; and

(xvi)
" including " and " in   particular " (and other similar expressions) shall be construed as not limiting any general words or expressions in connection with which they are used.
(b)
The determination of the extent to which a rate is " for a period equal in length " to an Interest Period shall disregard any inconsistency arising from the last day of that Interest Period being determined pursuant to the terms of this Agreement.
(c)
Section, Clause and Schedule headings are for ease of reference only and are not to be used for the purposes of construction or interpretation of the Finance Documents.
(d)
Unless a contrary indication appears, a term used in any other Finance Document or in any notice given under, or in connection with, any Finance Document has the same meaning in that Finance Document or notice as in this Agreement.
(e)
A Potential Event of Default is " continuing " if it has not been remedied or waived and an Event of Default is " continuing " if it has not been waived.
1.3
Construction of insurance terms
In this Agreement:
" approved " means, for the purposes of Clause 22 ( Insurance Undertakings ), approved in writing by the Facility Agent.
" 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 22 ( 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.
" 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:
26


(a)
in a form attached to a certificate dated the same date as this Agreement (and signed by the Borrower and the Facility Agent); or
(b)
in any other form agreed in writing between the Borrower and the Facility Agent acting with the authorisation of the Majority Lenders or, where Clause 42.2 ( All Lender matters ) applies, all the Lenders.
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 Clause 42.3 ( Other exceptions ) 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)
Any Affiliate, Receiver, Delegate or any other person described in paragraph (d) of Clause 14.2 ( Other indemnities ), paragraph (b) of Clause 29.11 ( Exclusion of liability ), Clause 29.21 ( Role of Reference Banks ), Clause 29.22 ( Third Party Reference Banks ) or paragraph (b) of Clause 30.11 ( Exclusion of liability )   may, subject to this Clause 1.5 ( Third party rights ) and the Third Parties Act, rely on any Clause of this Agreement which expressly confers rights on it.
27

SECTION 2

THE FACILITY
2
THE FACILITY

2.1
The Facility
Subject to the terms of this Agreement, the Lenders make available to the Borrower a dollar term loan facility in three Tranches in an aggregate amount not exceeding the Total Commitments.
2.2
Finance Parties' rights and obligations
(a)
The obligations of each Finance Party under the Finance Documents are several.  Failure by a Finance Party to perform its obligations under the Finance Documents does not affect the obligations of any other Party under the Finance Documents. No Finance Party is responsible for the obligations of any other Finance Party under the Finance Documents.
(b)
The rights of each Finance Party under or in connection with the Finance Documents are separate and independent rights and any debt arising under the Finance Documents to a Finance Party from a Transaction Obligor is a separate and independent debt in respect of which a Finance Party shall be entitled to enforce its rights in accordance with paragraph (c) below.  The rights of each Finance Party include any debt owing to that Finance Party under the Finance Documents and, for the avoidance of doubt, any part of the Loan or any other amount owed by a Transaction Obligor which relates to a Finance Party's participation in the Facility or its role under a Finance Document (including any such amount payable to the Facility Agent on its behalf) is a debt owing to that Finance Party by that Transaction Obligor.
(c)
A Finance Party may, except as specifically provided in the Finance Documents, separately enforce its rights under or in connection with the Finance Documents.
2.3
Borrower's Agent
(a)
The Borrower by its execution of this Agreement irrevocably appoints the Corporate Guarantor to act on its behalf as its agent in relation to the Finance Documents and irrevocably authorises:

(i)
the Corporate Guarantor on its behalf to supply all information concerning itself contemplated by this Agreement to the Finance Parties and to give all notices and instructions (including each Utilisation Request), to make such agreements and to effect the relevant amendments, supplements and variations capable of being given, made or effected by the Borrower notwithstanding that they may affect the Borrower, without further reference to or the consent of the Borrower; and

(ii)
each Finance Party to give any notice, demand or other communication to the Borrower pursuant to the Finance Documents to the Corporate Guarantor,
and in each case the Borrower shall be bound as though the Borrower itself had given the notices and instructions (including, without limitation, each Utilisation Request) 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 Corporate Guarantor or given to the Corporate Guarantor under any Finance Document on behalf of the Borrower or in connection with any Finance Document (whether or not known to the Borrower) shall be
28

binding for all purposes on the Borrower as if the Borrower had expressly made, given or concurred with it.  In the event of any conflict between any notices or other communications of the Corporate Guarantor and the Borrower, those of the Corporate Guarantor shall prevail.
3
PURPOSE

3.1
Purpose
The Borrower shall apply all amounts borrowed by it under the Facility only for the following purposes, in respect of:
(a)
Tranche A, for refinancing the Existing Indebtedness secured on the Ship;
(b)
Tranche B, for general working capital purposes of the Group (and more specifically for the financing of the acquisition and installation of the equipment for open loop scrubber systems on Ship A); and
(c)
Tranche C, for general working capital purposes of the Group (and more specifically for the financing of the acquisition and installation of the equipment for open loop scrubber systems on Ship B).
3.2
Monitoring
No Finance Party is 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 Facility Agent 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 Facility Agent.
4.2
Further conditions precedent
The Lenders will only be obliged to comply with Clause 5.4 ( Lenders' participation ) if:
(a)
on the date of each Utilisation Request and on each proposed Utilisation Date and before the Advance is made available:

(i)
no Default is continuing or would result from the utilisation of the proposed Advance;

(ii)
the representations made by each Transaction Obligor in Clause 18 ( Representations ) are true;

(iii)
the Ship and, in the case of each of Tranche B and Tranche C, also Ship A or Ship B (as applicable) has neither been sold nor become a Total Loss; and
(b)
in the case of the Advance under Tranche A, the Facility Agent 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 Facility Agent; and
(c)
in the case of each Advance under each of Tranche B and Tranche C, the Facility Agent has received on or before the relevant Utilisation Date, or is satisfied it will receive when the
29

Advance is made available, all of the documents and other evidence listed in Part C of Schedule 2 ( Conditions Precedent ) in form and substance satisfactory to the Facility Agent.
4.3
Notification of satisfaction of conditions precedent
(a)
The Facility Agent shall notify the Borrower and the Lenders 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 ).
(b)
Other than to the extent that the Majority Lenders notify the Facility Agent in writing to the contrary before the Facility Agent gives the notification described in paragraph (a) above, the Lenders authorise (but do not require) the Facility Agent to give that notification.  The Facility Agent shall not be liable for any damages, costs or losses whatsoever as a result of giving any such notification.
4.4
Waiver of conditions precedent
If the Lenders, at their discretion, permit 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 Borrower shall ensure that that condition is satisfied within five Business Days after the relevant Utilisation Date or such later date as the Facility Agent, acting with the authorisation of the Majority Lenders, may agree in writing with the Borrower.

30

SECTION 3

UTILISATION
5
UTILISATION

5.1
Delivery of a Utilisation Request
(a)
The Borrower may utilise the Facility by delivery to the Facility Agent of a duly completed Utilisation Request not later than the Specified Time.
(b)
The Borrower may not deliver more than:

(i)
one Utilisation Request in respect of Tranche A;

(ii)
four Utilisation Requests in respect of each of Tranche B and Tranche C; and
(c)
The Borrower shall deliver a Utilisation request under Tranche A prior to or simultaneously with, delivering a Utilisation Request under Tranche B or Tranche C.
5.2
Completion of a Utilisation Request
Each Utilisation Request is irrevocable and will not be regarded as having been duly completed unless:
(a)
the proposed Utilisation Date is a Business Day within the applicable Availability Period;
(b)
the currency and amount of the Utilisation comply with Clause 5.3 ( Currency and amount );
(c)
all applicable deductible items have been completed; and
(d)
the proposed Interest Period complies with Clause 9 ( Interest Periods ).
5.3
Currency and amount
(a)
The currency specified in each Utilisation Request must be dollars.
(b)
The amount of:

(i)
Tranche A must be in an amount up to the lesser of (i) $16,390,000 and (ii) the amount of the Existing Indebtedness; and

(ii)
each of Tranche B and Tranche C must be in an amount of up to $2,250,000 in aggregate.
(c)
The amount of each Advance under each of Tranche B and Tranche C must be in an amount of not less than $500,000.
(d)
The amount of the proposed Advance must be an amount which is not more than the Available Facility.
5.4
Lenders' participation
(a)
If the conditions set out in this Agreement have been met, each Lender shall make its participation in each Advance available by the relevant Utilisation Date through its Facility Office.
31

(b)
The amount of each Lender's participation in each Advance will be equal to the proportion borne by its Available Commitment to the Available Facility immediately before making that Advance.
(c)
The Facility Agent shall notify each Lender of the amount of each Advance and the amount of its participation in that Advance by the Specified Time.
5.5
Cancellation of Commitments
The Commitments in respect of any Tranche which are unutilised at the end of the Availability Period for such Tranche shall then be cancelled.
5.6
Retentions and payment to third parties
The Borrower irrevocably authorises the Facility Agent:
(a)
to deduct from the proceeds of any Advance any fees then payable to the Finance Parties in accordance with Clause 11 ( Fees ), any solicitors fees and disbursements together with any applicable VAT and any other items listed as deductible items in the relevant Utilisation Request and to apply them in payment of the items to which they relate; and
(b)
on each Utilisation Date, to pay to, or for the account of, the Borrower the balance (after any deduction made in accordance with paragraph (a) above) of the amounts which the Facility Agent receives from the Lenders in respect of the relevant Advance.  That payment shall be made in like funds as the Facility Agent received from the Lenders in respect of the relevant Advance:

(i)
in the case of Tranche A, to the account of the Facility Agent which the Borrower specifies in the relevant Utilisation Request; and

(ii)
in the case of each of Tranche B and Tranche C, to the account of the Corporate Guarantor which the Borrower specifies in the relevant Utilisation Request.
5.7
Disbursement of Advance to third party
Payment by the Facility Agent under Clause 5.6 ( Retentions and payment to third parties ) to a person other than the Borrower shall constitute the making of the relevant Advance and the Borrower shall at that time become indebted, as principal and direct obligor, to each Lender in an amount equal to that Lender's participation in that Advance.
5.8
Prepositioning of funds
If, in respect of the Utilisation of any Advance, the Lenders, at the request of the Borrower and on terms acceptable to all the Lenders and in their absolute discretion, preposition funds with any bank, the Borrower and the Corporate Guarantor:
(a)
agree to pay interest on the amount of the funds so prepositioned at the rate described in Clause 8.1 ( Calculation of interest ) on the basis of successive interest periods of one day and so that interest shall be paid together with the first payment of interest on such Advance after the Utilisation Date in respect of it or, if such Utilisation Date does not occur, within three Business Days of demand by the Facility Agent; and
(b)
shall, without duplication, indemnify each Finance Party against any costs, loss or liability it may incur in connection with such arrangement.
32

SECTION 4

REPAYMENT, PREPAYMENT AND CANCELLATION
6
REPAYMENT

6.1
Repayment of Loan
The Borrower shall repay the Loan as follows:
(a)
Tranche A, by 16 equal consecutive quarterly instalments, each in an amount of $200,000, and, together with the sixteenth final instalment, a balloon instalment in an amount of $13,190,000 (the " Balloon Instalment A "), the first of which shall be repaid on 26 February 2019, all subsequent instalments shall be repaid quarterly thereafter and the final instalment, together with the Balloon Instalment A, on the Termination Date; and
(b)
each of Tranche B and Tranche C, by 12 equal consecutive quarterly instalments, each in an amount of $187,500, the first of which shall be repaid on 27 November 2019 and all subsequent instalments shall be repaid quarterly thereafter,
and each such quarterly instalment shall be a " Repayment Instalment ".
6.2
Effect of cancellation and prepayment on scheduled repayments
(a)
If the Borrower cancels the whole or any part of any Available Commitment in accordance with Clause 7.5 ( Right of repayment and cancellation in relation to a single Lender ) or if the Available Commitment of any Lender is cancelled under Clause 7.1 ( Illegality ) then the Repayment Instalments falling after that cancellation will be reduced pro rata by the amount of the Available Commitments so cancelled.
(b)
If the Borrower cancels the whole or any part of any Available Commitment in accordance with Clause 7.2 ( Voluntary and automatic cancellation ) or if the whole or part of any Commitment is cancelled pursuant to Clause 5.5 ( Cancellation of Commitments ):

(i)
if such Commitment relates to Tranche A, the Repayment Instalments for Tranche A for each Repayment Date falling after that cancellation will be reduced pro rata by the amount of the Commitments so cancelled but rounded up to the nearest thousand and the Balloon Instalment A will then be reduced by the amount of such rounding up; and

(ii)
If such Commitment relates to any of Tranche B or Tranche C, each Repayment Instalment will be reduced in inverse chronological order by the amount of the Commitments so cancelled.
(c)
If any part of the Loan is repaid or prepaid in accordance with Clause 7.5 ( Right of repayment and cancellation in relation to a single Lender ) or Clause 7.1 ( Illegality ) then the Repayment Instalments for each Repayment Date falling after that repayment or prepayment will be reduced pro rata by the amount of the Loan repaid or prepaid.
(d)
If any part of the Loan is prepaid in accordance with Clause 7.3 ( Voluntary prepayment of Loan ) or Clause 7.4 ( Mandatory prepayment on sale or Total Loss ) then the amount of the Repayment Instalments for the relevant Tranche for each Repayment Date falling after that repayment or prepayment will be reduced in inverse chronological order by the amount of the Loan repaid or prepaid.
33

6.3
Additional Repayments
(a)
On each Repayment Date in respect of Tranche A, any Excess Cash standing to the credit of the Operating Account shall be applied towards reducing Balloon Instalment A.
(b)
The application of any Excess Cash in accordance with this Clause 6.3 ( Additional Repayments ) may only be made if:

(i)
the amount of an Additional Repayment is at least $10,000 or an integral multiple of that amount; and

(ii)
the aggregate amount of the Additional Repayments previously made and any new Additional Repayment pursuant to this Clause 6.3 ( Additional Repayments ) does not exceed, $3,190,000.
6.4
Termination Date
On the Termination Date, the Borrower shall additionally pay to the Facility Agent for the account of the Finance Parties all other sums then accrued and owing under the Finance Documents.
6.5
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 a Lender to perform any of its obligations as contemplated by this Agreement or to fund or maintain its participation in an Advance or the Loan or it becomes unlawful for any Affiliate of a Lender for that Lender to do so:
(a)
that Lender shall promptly notify the Facility Agent upon becoming aware of that event;
(b)
upon the Facility Agent notifying the Borrower, the Available Commitment of that Lender will be immediately cancelled; and
(c)
the Borrower shall prepay that Lender's participation in the Loan on the last day of the Interest Period for the Loan occurring after the Facility Agent has notified the Borrower or, if earlier, the date specified by the Lender in the notice delivered to the Facility Agent (being no earlier than the last day of any applicable grace period permitted by law) and that Lender's corresponding Commitment shall be cancelled in the amount of the participation prepaid.
7.2
Voluntary and automatic cancellation
(a)
The Borrower may, if they give the Facility Agent not less than 10 Business Days' (or such shorter period as the Majority Lenders may agree) prior notice, cancel the whole or any part (being a minimum amount of $100,000 or integral multiples thereof) of the Available Facility.  Any cancellation under this Clause 7.2 ( Voluntary and automatic cancellation ) shall reduce the Commitments of the Lenders rateably and the amount of the relevant Tranche(s).
(b)
The unutilised Commitment (if any) of each Lender shall be automatically cancelled at close of business on the date on which the Tranches are made available.
34

7.3
Voluntary prepayment of Loan
(a)
Subject to paragraph (b) below, the Borrower may, if they give the Facility Agent not less than 10 Business Days' (or such shorter period as the Majority Lenders may agree) prior notice, prepay the whole or any part of the Loan (but, if in part, being an amount that reduces the amount of the Loan by a minimum amount of $100,000 or an integral 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 be applied towards prepayment of the Tranche specified in the relevant prepayment notice, as follows:

(i)
in the case of Tranche A, first towards prepayment of the Balloon Instalment subject to Clause 6.3 ( Additional Repayments ) and then pro rata to each outstanding Repayment Instalment falling after that partial prepayment by the amount prepaid; and


(ii)
in the case of each of Tranche B and Tranche C, pro rata to outstanding Repayment Instalments of that Tranche.

7.4
Mandatory prepayment on sale or Total Loss
(a)
If the Ship is sold or becomes a Total Loss, the Borrower shall on the Relevant Date prepay the Loan.
(b)
If either of Ship A and Ship B is sold or becomes a Total Loss, the Borrower shall on the Relevant Date prepay the Tranche which has been used to acquire and install the equipment for open loop scrubber systems on the relevant ship which has been sold or has become a Total Loss (being either Ship A or Ship B, as the case may be).
(c)
In this Clause 7.4 ( Mandatory prepayment on sale or Total Loss ) if the event referred to in paragraphs (a) and (b) of this Clause occurs:
" Relevant   Date " means:

(A)
in the case of a sale of the Ship or Ship A or Ship B, on the date on which the sale is completed by delivery of the Ship or Ship A or Ship B (as applicable) to the buyer of the Ship or Ship A or Ship B (as applicable);

(B)
in the case of a Total Loss of the Ship, on the earlier of:

(1)
the date falling 180 days after the Total Loss Date; and

(2)
the date of receipt by the Security Agent of the proceeds of insurance relating to such Total Loss; and

(C)
in the case of a Total Loss of Ship A or Ship B, on the date falling 180 days after the Total Loss Date.
7.5
Right of repayment and cancellation in relation to a single Lender
(a)
If:

(i)
any sum payable to any Lender by a Transaction Obligor is required to be increased under paragraph (c) of Clause 12.2 ( Tax gross-up ) or under that clause as incorporated by reference or in full in any other Finance Document; or
35


(ii)
any Lender claims indemnification from the Borrower under Clause 12.3 ( Tax indemnity ) or Clause 13.1 ( Increased costs ); or

(iii)
the Facility Agent receives notification from a Relevant Lender under Clause 10.3 ( Market disruption ),
the Borrower may:

(A)
whilst in the case of sub-paragraphs (i) and (ii) above the circumstance giving rise to the requirement for that increase or indemnification continues; or

(B)
whilst in the case of sub-paragraph (iii) above the situation in relation to the Relevant Lender continues,
give the Facility Agent notice of cancellation of the Commitment of that Lender and its intention to procure the repayment of that Lender's participation in the Loan.
(b)
On receipt of a notice of cancellation referred to in paragraph (a) above, the Commitment of that Lender shall immediately be reduced to zero.
(c)
On the last day of each Interest Period which ends after the Borrower have given notice of cancellation under paragraph (a) above in relation to a Lender (or, if earlier, the date specified by the Borrower in that notice), the Borrower shall repay that Lender's participation in the Loan.
7.6
Restrictions
(a)
Any notice of cancellation or prepayment given by any Party under this Clause 7 ( Prepayment and Cancellation ) shall be irrevocable and, unless a contrary indication appears in this Agreement, shall specify the date or dates upon which the relevant cancellation or prepayment is to be made, the amount of that cancellation or prepayment and, if relevant, the part of the Loan to be prepaid or cancelled.
(b)
Any prepayment or cancellation (whether voluntary or automatic) under this Agreement shall be made together with accrued interest on the amount prepaid and, subject to the fee provided for in Clause 11.4 ( Prepayment fee ) and 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 Commitments except at the times and in the manner expressly provided for in this Agreement.
(e)
No amount of the Total Commitments cancelled under this Agreement may be subsequently reinstated.
(f)
If the Facility Agent receives a notice under this Clause 7 ( Prepayment and Cancellation ) it shall promptly forward a copy of that notice to either the Borrower or the affected Lenders, as appropriate.
(g)
If all or part of any Lender's participation in the Loan is repaid or prepaid, an amount of that Lender's Commitment (equal to the amount of the participation which is repaid or prepaid) will be deemed to be cancelled on the date of repayment or prepayment.
36

7.7
Application of prepayments
Any prepayment of any part of the Loan (other than a prepayment pursuant to Clause 7.1 ( Illegality ) or Clause 7.5 ( Right of repayment and cancellation in relation to a single Lender )) shall be applied pro rata to each Lender's participation in that part of the Loan.



















37

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 3 Months, the Borrower shall also pay interest then accrued on the Loan or the relevant part of the Loan on the dates falling at 3 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 Facility Agent. Any interest accruing under this Clause 8.3 ( Default interest ) shall be immediately payable by the Obligor on demand by the Facility Agent.
(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.
8.4
Notification of rates of interest
(a)
The Facility Agent shall promptly notify the Lenders and the Borrower of the determination of a rate of interest under this Agreement.
(b)
The Facility Agent shall promptly notify the Borrower of each Funding Rate relating to the Loan, any part of the Loan or any Unpaid Sum.
38

9
INTEREST PERIODS

9.1
Selection of Interest Periods
(a)
The Borrower may select the first Interest Period for a Tranche in the Utilisation Request for that Tranche.  Subject to paragraphs (f) and (i) below and Clause 9.2 ( Changes to Interest Periods ), the Borrower may select each subsequent Interest Period in respect of a Tranche in a Selection Notice.
(b)
Each Selection Notice is irrevocable and must be delivered to the Facility Agent by the Borrower not later than the Specified Time.
(c)
If the Borrower fails to select an Interest Period in the relevant Utilisation Request or fails to deliver a Selection Notice to the Facility Agent in accordance with paragraphs (a) and (b) above, the relevant Interest Period will, subject to paragraphs (f) and (i) below and Clause 9.2 ( Changes to Interest Periods ), be three Months.
(d)
Subject to this Clause 9 ( Interest Periods ), the Borrower may request an Interest Period of three Months but the length of the Interest period shall be at the sole discretion of the Facility Agent (acting on the instructions of all the Lenders).
(e)
An Interest Period in respect of a Tranche or any part of a Tranche 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 relevant Tranche 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 that Tranche.
(g)
The first Interest Period for each Tranche shall start on the Utilisation Date relating to such Tranche and, subject to paragraph (i) below, each subsequent Interest Period shall start on the last day of the preceding Interest Period.
(h)
The first Interest Period for the second and any subsequent Advance under a Tranche shall start on the Utilisation Date of such Advance and end on the last day of the Interest Period applicable to that Tranche on the date on which such Advance is made.
(i)
Except for the purposes of paragraph (f) above and Clause 9.2 ( Changes to Interest Periods ), each Tranche 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 Facility Agent may establish an Interest Period for a part of the Loan equal to such Repayment Instalment to end on the Repayment Date relating to it and the remaining part of the Loan shall have the Interest Period selected in the relevant Selection Notice, subject to paragraph (d) of Clause 9.1 ( Selection of Interest Periods ).
(b)
If the Facility Agent makes any change to an Interest Period referred to in this Clause 9.2 ( Changes to Interest Periods ), it shall promptly notify the Borrower and the Lenders.
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).
39

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.
(c)
Cost of funds :  If paragraph (b) above applies but no Reference Bank Rate is available for dollars or 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.
(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
If before close of business in London on the Quotation Day for the relevant Interest Period the Facility Agent receives notification from a Lender or Lenders (whose participations in the Loan or the relevant part of the Loan exceed 20 per cent. of the Loan or the relevant part of the Loan as appropriate) (the " Relevant Lender ") that the cost to it of funding its participation in the Loan or that 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.
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 weighted average of the rates notified to the Facility Agent by each Lender as soon as practicable and in any event within 5 Business Days of the first day of that Interest Period (or, if earlier, on the date falling 5 Business Days before the date on which interest is due to be paid in respect of that Interest Period) to be that which expresses as a percentage rate per annum the cost to the relevant Lender of funding its participation in the Loan or that part of the Loan from whatever source it may reasonably select.
40

(b)
If this Clause 10.4 ( Cost of funds ) applies and the Facility Agent or the Borrower so requires, the Facility Agent 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)
Subject to Clause 42.4 ( Replacement of Screen Rate ), any substitute or alternative basis agreed pursuant to paragraph (b) above shall, with the prior consent of all the Lenders and the Borrower, be binding on all Parties.
(d)
If paragraph (e) below does not apply and any rate notified to the Facility Agent under sub-paragraph (ii) of paragraph (a) above is less than zero, the relevant rate shall be deemed to be zero.
(e)
If this Clause 10.4 ( Cost of funds ) applies pursuant to Clause 10.3 ( Market disruption ) and:

(i)
a Lender's Funding Rate is less than LIBOR; or

(ii)
a Lender does not supply a quotation by the time specified in sub-paragraph (ii) of paragraph (a) above,
the cost to that Lender of funding its participation in the Loan or the relevant part of the Loan for that Interest Period shall be deemed, for the purposes of paragraph (a) above, to be LIBOR.
(f)
If this Clause 10.4 ( Cost of funds ) applies but any Lender does not supply a quotation by the time specified in sub-paragraph (ii) of paragraph (a) above, the rate of interest shall be calculated on the basis of the quotations of the remaining Lenders.
10.5
Break Costs
(a)
The Borrower shall, within three Business Days of demand by a Finance Party, pay to that Finance Party 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.
(b)
Each Lender shall, as soon as reasonably practicable after a demand by the Facility Agent, provide a certificate confirming the amount of its Break Costs for any Interest Period in which they accrue.
11
FEES

11.1
Commitment fee
(a)
The Borrower shall pay to the Facility Agent (for the account of each Lender) a non-refundable commitment fee, computed at the rate of 2.00 per cent. per annum on the undrawn or uncancelled amount of that Lender's Available Commitment in respect of each of Tranche B and Tranche C from time to time for the Availability Period.

(b)
The accrued commitment fee is payable quarterly in arrears for distribution among the Lenders pro rata to their Commitments, during the period from (and including) the date of this Agreement to the earlier of (i) the Utilisation Date of the relevant Tranche (being Tranche B or Tranche C (as the case may be)) and (ii) the last day of the Availability Period for that Tranche which is the last to expire (and on the last day of such period) and, if cancelled, on the cancelled amount of the relevant Lender's Commitment at the time the cancellation is effective.
41


11.2
Arrangement fee
The Borrower shall pay to the Arranger an arrangement fee in the amount and at the times agreed in a Fee Letter.
11.3
Prepayment fee
(a)
Subject to paragraph (c) below, the Borrower must pay to the Facility Agent for each Lender a prepayment fee on the date of prepayment of all or any part of Tranche A.
(b)
The amount of the prepayment fee is:

(i)
if the prepayment occurs on or before 30 September 2019, 1.50 per cent. of the amount prepaid;

(ii)
if the prepayment occurs after 30 September 2019, but on or before 30 September 2020, 1 per cent. of the amount prepaid; and

(iii)
if the prepayment occurs after 30 September 2020, but on or before 30 September 2021, 0.50 per cent. of the amount prepaid.
(c)
No prepayment fee shall be payable under this Clause if the prepayment is made under Clause 6.3 ( Additional Repayments ), Clause 7.4 ( Mandatory prepayment on sale or Total Loss ) as a result of a Total Loss of the Ship or Clause 24 ( Security Cover ) or in the case of a full or partial refinancing of the Loan by Original Lenders or any of their Affiliates, associates and partners.
42

SECTION 6

ADDITIONAL PAYMENT OBLIGATIONS
12
TAX GROSS UP AND INDEMNITIES

12.1
Definitions
(a)
In this Agreement:
" Protected Party " means a Finance Party which is or will be subject to any liability, or required to make any payment, for or on account of Tax in relation to a sum received or receivable (or any sum deemed for the purposes of Tax to be received or receivable) under a Finance Document.
" Tax 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 a Finance Party under Clause 12.2 ( Tax gross-up ) or a payment under Clause 12.3 ( Tax indemnity ).
(b)
Unless a contrary indication appears, in this Clause 12 ( Tax Gross Up and Indemnities ) reference to "determines" or "determined" means a determination made in the absolute discretion of the person making the determination.
12.2
Tax gross-up
(a)
Each Obligor shall make all payments to be made by it without any Tax Deduction, unless a Tax Deduction is required by law.
(b)
The 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 Facility Agent accordingly. Similarly, a Lender shall notify the Facility Agent on becoming so aware in respect of a payment payable to that Lender. If the Facility Agent receives such notification from a Lender it shall notify the Borrower and that Obligor.
(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 Facility Agent for the Finance Party entitled to the payment evidence reasonably satisfactory to that Finance Party 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 Facility Agent) pay to a Protected Party an amount equal to the loss, liability or cost which that Protected Party
43

determines will be or has been (directly or indirectly) suffered for or on account of Tax by that Protected Party in respect of a Finance Document.
(b)
Paragraph (a) above shall not apply:

(i)
with respect to any Tax assessed on a Finance Party:

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

(B)
under the law of the jurisdiction in which that Finance Party'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 that Finance Party; 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)
A Protected Party making, or intending to make, a claim under paragraph (a) above shall promptly notify the Facility Agent of the event which will give, or has given, rise to the claim, following which the Facility Agent shall notify the Obligors.
(d)
A Protected Party shall, on receiving a payment from an Obligor under this Clause 12.3 ( Tax indemnity ), notify the Facility Agent.
12.4
Tax Credit
If an Obligor makes a Tax Payment and the relevant Finance Party 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)
that Finance Party has obtained and utilised that Tax Credit,
the Finance Party shall pay an amount to the Obligor which that Finance Party 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 each Secured Party against any cost, loss or liability which that Secured Party 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 a Finance Party 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,
44

subject to paragraph (b) below, if VAT is or becomes chargeable on any supply made by any Finance Party to any Party under a Finance Document and such Finance Party is required to account to the relevant tax authority for the VAT, that Party must pay to such Finance Party (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 such Finance Party must promptly provide an appropriate VAT invoice to that Party).
(b)
If VAT is or becomes chargeable on any supply made by any Finance Party (the " Supplier ") to any other Finance Party (the " Recipient ") under a Finance Document, and any Party other than the Recipient (the " Relevant Party ") is required by the terms of any Finance Document to pay an amount equal to the consideration for that supply to the Supplier (rather than being required to reimburse or indemnify the Recipient in respect of that consideration):

(i)
(where the Supplier is the person required to account to the relevant tax authority for the VAT) the Relevant Party must also pay to the Supplier (at the same time as paying that amount) an additional amount equal to the amount of the VAT.  The Recipient must (where this sub-paragraph (i) applies) promptly pay to the Relevant Party an amount equal to any credit or repayment the Recipient receives from the relevant tax authority which the Recipient reasonably determines relates to the VAT chargeable on that supply; and

(ii)
(where the Recipient is the person required to account to the relevant tax authority for the VAT) the Relevant Party must promptly, following demand from the Recipient, pay to the Recipient an amount equal to the VAT chargeable on that supply but only to the extent that the Recipient reasonably determines that it is not entitled to credit or repayment from the relevant tax authority in respect of that VAT.
(c)
Where a Finance Document requires any Party to reimburse or indemnify a Finance Party for any cost or expense, that Party shall reimburse or indemnify (as the case may be) such Finance Party for the full amount of such cost or expense, including such part of it as represents VAT, save to the extent that such Finance Party reasonably determines that it is entitled to credit or repayment in respect of such VAT from the relevant tax authority.
(d)
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).
(e)
In relation to any supply made by a Finance Party to any Party under a Finance Document, if reasonably requested by such Finance Party, that Party must promptly provide such Finance Party with details of that Party's VAT registration and such other information as is reasonably requested in connection with such Finance Party'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
45


(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 any Finance Party 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.
(e)
If the Borrower is a US Tax Obligor, or the Facility Agent reasonably believes that its obligations under FATCA or any other applicable law or regulation require it, each Lender shall, within ten Business Days of:

(i)
where the Borrower is a US Tax Obligor and the relevant Lender is an Original Lender, the date of this Agreement;

(ii)
where the Borrower is a US Tax Obligor on a Transfer Date and the relevant Lender is a New Lender, the relevant Transfer Date; or

(iii)
where the Borrower is not a US Tax Obligor, the date of a request from the Facility Agent,
supply to the Facility Agent:

(i)
a withholding certificate on Form W-8, Form W-9 or any other relevant form; or

(ii)
any withholding statement or other document, authorisation or waiver as the Facility Agent may require to certify or establish the status of such Lender under FATCA or that other law or regulation.
(f)
The Facility Agent shall provide any withholding certificate, withholding statement, document, authorisation or waiver it receives from a Lender pursuant to paragraph (e) above to the Borrower.
(g)
If any withholding certificate, withholding statement, document, authorisation or waiver provided to the Facility Agent by a Lender pursuant to paragraph (e) above is or becomes
46

materially inaccurate or incomplete, that Lender shall promptly update it and provide such updated withholding certificate, withholding statement, document, authorisation or waiver to the Facility Agent unless it is unlawful for the Lender to do so (in which case the Lender shall promptly notify the Facility Agent).  The Facility Agent shall provide any such updated withholding certificate, withholding statement, document, authorisation or waiver to the Borrower.
(h)
The Facility Agent may rely on any withholding certificate, withholding statement, document, authorisation or waiver it receives from a Lender pursuant to paragraph (e) or (g) above without further verification.  The Facility Agent shall not be liable for any action taken by it under or in connection with paragraphs (e), (f) or (g) above.
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 and, in addition, shall notify each Obligor and the Facility Agent and the Facility Agent shall notify the other Finance Parties.
13
INCREASED COSTS

13.1
Increased costs
(a)
Subject to Clause 13.3 ( Exceptions ), the Borrower shall, within three Business Days of a demand by the Facility Agent, pay for the account of a Finance Party the amount of any Increased Costs incurred by that Finance Party or any of its Affiliates as a result of:

(i)
the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation; or

(ii)
compliance with any law or regulation made,
in each case after the date of this Agreement; or

(iii)
the implementation, application of or compliance with Basel III or CRD IV or any law or regulation that implements or applies Basel III or CRD IV.
(b)
In this Agreement:

(i)
" Basel III " means:

(A)
the agreements on capital requirements, a leverage ratio and liquidity standards contained in "Basel III: A global regulatory framework for more resilient banks and banking systems", "Basel III: International framework for liquidity risk measurement, standards and monitoring" and "Guidance for national authorities operating the countercyclical capital buffer" published by the Basel Committee on Banking Supervision in December 2010, each as amended, supplemented or restated;

(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
47

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;

(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 a Finance Party'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 a Finance Party or any of its Affiliates to the extent that it is attributable to that Finance Party having entered into its Commitment or funding or performing its obligations under any Finance Document.
13.2
Increased cost claims
(a)
A Finance Party intending to make a claim pursuant to Clause 13.1 ( Increased costs ) shall notify the Facility Agent of the event giving rise to the claim, following which the Facility Agent shall promptly notify the Borrower.
(b)
Each Finance Party shall, as soon as practicable after a demand by the Facility Agent, provide a certificate confirming the amount of its Increased Costs.
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)
compensated for by any payment made pursuant to Clause 14.3 ( Mandatory Cost ); or
(e)
attributable to the wilful breach by the relevant Finance Party or its Affiliates of any law or regulation.
48

14
OTHER INDEMNITIES

14.1
Currency indemnity
(a)
If any sum due from an Obligor under the Finance Documents (a " Sum "), or any order, judgment or award given or made in relation to a Sum, has to be converted from the currency (the " First Currency ") in which that Sum is payable into another currency (the " Second Currency ") for the purpose of:

(i)
making or filing a claim or proof against that Obligor; or

(ii)
obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings,
that Obligor shall, as an independent obligation, on demand, indemnify each Secured Party to which that Sum is due against any cost, loss or liability arising out of or as a result of the conversion including any discrepancy between (A) the rate of exchange used to convert that Sum from the First Currency into the Second Currency and (B) the rate or rates of exchange available to that person at the time of its receipt of that Sum.
(b)
Each Obligor waives any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency or currency unit other than that in which it is expressed to be payable.
14.2
Other indemnities
(a)
Each Obligor shall, on demand, indemnify each Secured Party against any cost, loss or liability incurred by it as a result of:

(i)
the occurrence of any Event of Default;

(ii)
a failure by a Transaction Obligor to pay any amount due under a Finance Document on its due date, including without limitation, any cost, loss or liability arising as a result of Clause 32 ( Sharing among the Finance Parties );

(iii)
funding, or making arrangements to fund, its participation in an Advance 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 that Secured Party alone); or

(iv)
the Loan (or part of the Loan) not being prepaid in accordance with a notice of prepayment given by the Borrower.
(b)
Each Obligor shall, on demand, indemnify each Finance Party, each Affiliate of a Finance Party and each officer or employee of a Finance Party or its Affiliate (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 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)
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:
49


(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.
(d)
Any Affiliate or any officer or employee of a Finance Party or of any of its Affiliates may rely on this Clause 14.2 ( Other indemnities ) subject to Clause 1.5 ( Third party rights ) and the provisions of the Third Parties Act.
14.3
Mandatory Cost
The Borrower shall, on demand by the Facility Agent, pay to the Facility Agent for the account of the relevant Lender, such amount which any Lender certifies in a notice to the Facility Agent to be its good faith determination of the amount necessary to compensate it for complying with:
(a)
in the case of a Lender 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)
in the case of any Lender 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 that Lender's participation in the Loan.
14.4
Indemnity to the Facility Agent
Each Obligor shall, on demand, indemnify the Facility Agent against:
(a)
any cost, loss or liability incurred by the Facility Agent (acting reasonably) as a result of:

(i)
investigating any event which it reasonably believes is a Default; or

(ii)
acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised; or

(iii)
instructing lawyers, accountants, tax advisers, surveyors or other professional advisers or experts as permitted under the Finance Documents; and
(b)
any cost, loss or liability incurred by the Facility Agent (otherwise than by reason of the Facility Agent's gross negligence or wilful misconduct) or, in the case of any cost, loss or liability pursuant to Clause 33.11 ( Disruption to Payment Systems etc. ) notwithstanding the Facility Agent's negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Facility Agent in acting as Facility Agent under the Finance Documents.
14.5
Indemnity to the Security Agent
(a)
Each Obligor shall, on demand, indemnify the Security Agent and every Receiver and Delegate against any cost, loss or liability incurred by any of them:
50


(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 Security Agent 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)
acting as Security Agent, Receiver or Delegate under the Finance Documents or 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 relevant Security Agent's, Receiver's or Delegate's gross negligence or wilful misconduct).
(b)
The Security Agent and every Receiver and Delegate may, in priority to any payment to the Secured Parties, indemnify itself out of the Security Assets in respect of, and pay and retain, all sums necessary to give effect to the indemnity in this Clause 14.5 ( Indemnity to the Security Agent ) and shall have a lien on the Transaction Security and the proceeds of the enforcement of the Transaction Security for all monies payable to it.
15
MITIGATION BY THE FINANCE PARTIES

15.1
Mitigation
(a)
Each Finance Party shall, in consultation with the Borrower, take all reasonable but commercially prudent endeavours to mitigate any circumstances which arise and which would result in any amount becoming payable under or pursuant to, or cancelled pursuant to, any of Clause 7.1 ( Illegality ), Clause 12 ( Tax Gross Up and Indemnities ), Clause 13 ( Increased Costs ) or paragraph (a) of Clause 14.3 ( Mandatory Cost ) including (but not limited to) transferring its rights and obligations 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 each Finance Party for all costs and expenses reasonably incurred by that Finance Party as a result of steps taken by it under Clause 15.1 ( Mitigation ).
(b)
A Finance Party is not obliged to take any steps under Clause 15.1 ( Mitigation ) if either:
51


(i)
a Default has occurred and is continuing; or

(ii)
in the opinion of that Finance Party (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 Facility Agent, the Security Agent and the Arranger the amount of all costs and expenses (including legal fees) reasonably incurred by any Secured Party in connection with the negotiation, preparation, printing, execution and perfection of:
(a)
this Agreement and any other documents referred to in this Agreement or in a Security Document; and
(b)
any other Finance Documents executed after the date of this Agreement.
16.2
Amendment costs
If:
(a)
a Transaction Obligor requests an amendment, waiver or consent; or
(b)
an amendment is required pursuant to Clause 33.9 ( Change of currency ); or
(c)
a Transaction Obligor requests, and the Security Agent agrees to, the release of all or any part of the Security Assets from the Transaction Security,
the Obligors shall, on demand, reimburse each of the Facility Agent and the Security Agent for the amount of all costs and expenses (including legal fees) reasonably incurred by each Secured Party 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 each Secured Party the amount of all costs and expenses (including legal fees) incurred by that Secured Party 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 that Secured Party as a consequence of it entering into a Finance Document, taking or holding the Transaction Security, or enforcing those rights.
52

SECTION 7

GUARANTEE
17
GUARANTEE AND INDEMNITY - CORPORATE GUARANTOR

17.1
Guarantee and indemnity
The Corporate Guarantor irrevocably and unconditionally:
(a)
guarantees to each Finance Party punctual performance by each Transaction Obligor other than the Corporate Guarantor of all such other Transaction Obligor's obligations under the Finance Documents;
(b)
undertakes with each Finance Party that whenever a Transaction Obligor other than the Corporate Guarantor does not pay any amount when due under or in connection with any Finance Document, the Corporate Guarantor shall immediately on demand pay that amount as if it were the principal obligor; and
(c)
agrees with each Finance Party that if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal, it will, as an independent and primary obligation, indemnify that Finance Party immediately on demand against any cost, loss or liability it incurs as a result of a Transaction Obligor other than the Corporate Guarantor not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by it under any Finance Document on the date when it would have been due.  The amount payable by the Corporate Guarantor under this indemnity will not exceed the amount it would have had to pay under this Clause 17 ( Guarantee and Indemnity - Corporate 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 a Secured Party 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 Corporate Guarantor under this Clause 17 ( Guarantee and Indemnity - Corporate 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 Corporate Guarantor under this Clause 17 ( Guarantee and Indemnity - Corporate 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 - Corporate Guarantor ) or in respect of any Transaction Security (without limitation and whether or not known to it or any Secured Party) including:
53

(a)
any time, waiver or consent granted to, or composition with, any Transaction Obligor or other person;
(b)
the release of any other Transaction Obligor or any other person under the terms of any composition or arrangement with any creditor of any Transaction Obligor;
(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 Corporate Guarantor waives any right it may have of first requiring any Secured Party (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 - ).  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, each Secured Party (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 that Secured Party (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 Corporate 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 Corporate Guarantor or on account of the Corporate Guarantor's liability under this Clause 17 ( Guarantee and Indemnity - Corporate Guarantor ).
17.7
Deferral of Corporate Guarantor's rights
All rights which the Corporate 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 Secured Parties under the Finance Documents and until the end of the Security Period and unless the Facility Agent
54

otherwise directs, the Corporate 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 Clause17 ( Guarantee and Indemnity - Corporate Guarantor ):
(a)
to be indemnified by a Transaction Obligor;
(b)
to claim any contribution from any third party providing security for, or any other guarantor of, any Transaction Obligor's obligations under the Finance Documents;
(c)
to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Secured Parties under the Finance Documents or of any other guarantee or security taken pursuant to, or in connection with, the Finance Documents by any Secured Party;
(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 Corporate 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 any Secured Party.
If the Corporate 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 Secured Parties by the Transaction Obligors under or in connection with the Finance Documents to be repaid in full on trust for the Secured Parties and shall promptly pay or transfer the same to the Facility Agent or as the Facility Agent may direct for application in accordance with Clause 33 ( Payment Mechanics ).
17.8
Additional security
This guarantee and any other Security given by the Corporate 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 any Secured Party 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 Corporate Guarantor's rights ) and 17.8 ( Additional security ) shall apply, with any necessary modifications, to any Security which the Corporate 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
18
REPRESENTATIONS

18.1
General
Each Obligor makes the representations and warranties set out in this Clause 18 ( Representations ) to each Finance Party on the date of this Agreement.
18.2
Status
(a)
The Borrower is a corporation, duly incorporated and validly existing in good standing under the law of its jurisdiction of incorporation.
(b)
The Corporate Guarantor is a corporation duly incorporated and validly existing in good standing under the law of its jurisdiction of incorporation.
(c)
It and each Transaction Obligor has the power to own its assets and carry on its business as it is being conducted.
18.3
Share capital and ownership
(a)
The Borrower has an authorised share capital of 1500 ordinary shares of 1 Euro each numbered 1 to 1500, 100% of which have been issued and are fully paid.

(b)
The Corporate Guarantor owns one hundred per cent (100%) of the shares in the Borrower.
(c)
The legal title to and beneficial interest in the share capital in the Borrower is held free of any Security or any other claim by the Corporate Guarantor.
(d)
None of the shares in the Borrower is subject to any option to purchase, pre-emption rights or similar rights.
18.4
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.
18.5
Validity, effectiveness and ranking of Security
(a)
Each Finance Document to which it is a party does now or, as the case may be, will upon execution and delivery create, subject to the Perfection Requirements, the Security it purports to create over any assets to which such Security, by its terms, relates, and such Security will, when created or intended to be created, be valid and effective.
(b)
No third party has or will have any Security over any assets that are the subject of any Transaction Security granted by it.
(c)
Subject to the Perfection Requirements, the Transaction Security granted by it to the Security Agent or any other Secured Party has or will when created or intended to be created have first ranking priority 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.
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18.6
Non-conflict with other obligations
The entry into and performance by it of, and the transactions contemplated by, each Transaction Document to which it is a party do not and will not conflict with:
(a)
any law or regulation applicable to it;
(b)
its constitutional documents; or
(c)
any agreement or instrument binding upon it or constitute a default or termination event (however described) under any such agreement or instrument.
18.7
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.
18.8
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.
18.9
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.
18.10
Insolvency
No:
(a)
corporate action, legal proceeding or other procedure or step described in paragraph (a) of Clause 26.8 ( Insolvency proceedings ); or
(b)
creditors' process described in Clause 26.9 ( Creditors' process ),
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has been taken or, to its knowledge, threatened in relation to any Transaction Obligor; and none of the circumstances described in Clause 26.7 ( Insolvency ) applies to any Transaction Obligor.
18.11
No filing or stamp taxes
Under the laws of its Relevant Jurisdictions it is not necessary that the Finance Documents to which it is a party be registered, filed, recorded, notarised or enrolled with any court or other authority in that jurisdiction or that any stamp, registration, notarial or similar Taxes or fees be paid on or in relation to the Finance Documents to which it is a party or the transactions contemplated by those Finance Documents except any filing, recording or enrolling or any tax or fee payable in relation to the Mortgage which is referred to in any legal opinion delivered pursuant to Clause 4 ( Conditions of Utilisation ) and which will be made or paid promptly after the date of the relevant Finance Document.
18.12
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.
18.13
No default or mandatory prepayment event
(a)
No Event of Default and, on the date of this Agreement and on each Utilisation Date, no Default is continuing or might reasonably be expected to result from the making of any Utilisation or the entry into, the performance of, or any transaction contemplated by, any Transaction Document.
(b)
No event has occurred which would give rise to a mandatory prepayment under Clause 7.4 ( Mandatory prepayment on sale or Total Loss ).
(c)
No other event or circumstance is outstanding which constitutes a default or a termination event (however described) under any other agreement or instrument which is binding on it or to which its assets are subject.
18.14
No misleading information
(a)
Any factual information provided by any Transaction Obligor for the purposes of this Agreement was true and accurate in all material respects as at the date it was provided or as at the date (if any) at which it is stated.
(b)
The financial projections contained in any such information have been prepared on the basis of recent historical information and on the basis of reasonable assumptions.
(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.
18.15
Financial Statements
(a)
The Original Financial Statements were prepared in accordance with GAAP consistently applied.
(b)
The Original Financial Statements give a true and fair view of its financial condition as at the end of the relevant financial year and results of operations during the relevant financial year.
58

(c)
There has been no material adverse change in its assets, business or financial condition since 31 December 2016.
(d)
Its most recent financial statements delivered pursuant to Clause 19.2 ( Financial statements ):

(i)
have been prepared in accordance with Clause 19.4 ( 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.
(e)
Since the date of the most recent financial statements delivered pursuant to Clause 19.2 ( Financial statements ) there has been no material adverse change in its business, assets or financial condition.
18.16
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.
18.17
No proceedings pending or threatened
(a)
No litigation, arbitration or administrative proceedings or investigations (including proceedings or investigations relating to any alleged or actual breach of the ISM Code or of the ISPS Code) of or before any court, arbitral body or agency which, if adversely determined, might reasonably be expected to have a Material Adverse Effect have (to the best of its knowledge and belief (having made due and careful enquiry)) been started or threatened against it or any other Transaction Obligor.
(b)
No judgment or order of a court, arbitral tribunal or other tribunal or any order or sanction of any governmental or other regulatory body which might reasonably be expected to have a Material Adverse Effect has (to the best of its knowledge and belief (having made due and careful enquiry)) been made against it or any other Transaction Obligor.
18.18
Valuations
(a)
All information supplied by it or on its behalf to an Approved Broker for the purposes of a valuation delivered to the Facility Agent 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 Broker which, if disclosed, would adversely affect any valuation prepared by such Approved Broker.
(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.
18.19
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.
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18.20
No Charter
The Ship is not subject to any Charter other than a Permitted Charter.
18.21
Compliance with Environmental Laws
All Environmental Laws relating to the ownership, operation and management of the Ship and the business of each Transaction Obligor (as now conducted and as reasonably anticipated to be conducted in the future) and the terms of all Environmental Approvals have been complied with.
18.22
No Environmental Claim
No Environmental Claim has been made or threatened against any Transaction Obligor or the Ship.
18.23
No Environmental Incident
No Environmental Incident has occurred and no person has claimed that an Environmental Incident has occurred.
18.24
ISM and ISPS Code compliance
All requirements of the ISM Code and the ISPS Code as they relate to the Borrower, each Approved Manager and the Ship have been complied with.
18.25
Taxes paid
(a)
It is not materially overdue in the filing of any Tax returns and it is not overdue in the payment of any amount in respect of Tax.
(b)
No claims or investigations are being, or are reasonably likely to be, made or conducted against it with respect to Taxes.
18.26
Financial Indebtedness
The Borrower does not have any Financial Indebtedness outstanding other than Permitted Financial Indebtedness.
18.27
Overseas companies
No Obligor has delivered particulars, whether in its name stated in the Finance Documents or any other name, of any UK Establishment to the Registrar of Companies as required under the Overseas Regulations or, if it has so registered, it has provided to the Facility Agent sufficient details to enable an accurate search against it to be undertaken by the Lenders at the Companies Registry.
18.28
Good title to assets
The Borrower 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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18.29
Ownership
(a)
The Borrower is the sole legal and beneficial owner of the 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 Borrower on creation or enforcement of the security conferred by the Security Documents.
18.30
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 Greece and it has no "establishment" (as that term is used in Article 2(h) of the Regulation) in any other jurisdiction.
18.31
Place of business
No Obligor has a place of business in any country other than and its executive office functions are carried out, in the case of the Borrower and the Corporate Guarantor, at c/o 154 Vouliagmenis Avenue, 166 74 Glyfada, Greece.
18.32
No employee or pension arrangements
The Borrower does not have any employees or any liabilities under any pension scheme.
18.33
Sanctions
(a)
No member of the Group, nor any Transaction Obligor, nor any of their respective directors, officers, employees, agents or representatives:

(i)
has breached any applicable Sanctions;

(ii)
is a Restricted Person; or

(iii)
has received notice of or is aware of any claim, action, suit, proceeding or investigation against it with respect to applicable Sanctions.
(b)
No proceeds of any Advance or the Loan:

(i)
shall be made available, directly or indirectly, to or for the benefit of a Restricted Person nor shall they be otherwise directly or indirectly, applied in a manner or for a purpose prohibited by applicable Sanctions; or

(ii)
will be used by any member of the Group:

(A)
to finance equipment or sectors under embargo decisions of the United Nations or the World Bank; or


(B)
in breach of the provisions of any applicable Sanctions.

(c)
No member of the Group nor any Fleet Vessel does any business relating to the Islamic Republic of Iran or any Iranian owned or incorporated entity.   
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18.34
US Tax Obligor
No Obligor is a US Tax Obligor.
18.35
Anti-bribery, anti-corruption and anti-money laundering
No Transaction Obligor nor any of its subsidiaries, directors or officers, or, to the best knowledge of such Transaction Obligor, any affiliate, agent or employee of it, has engaged in any activity or conduct which would violate any applicable anti-bribery, anti-corruption or anti-money laundering laws, regulations or rules in any applicable jurisdiction and each Transaction Obligor has instituted and maintains policies and procedures designed to prevent violation of such laws, regulations and rules.
18.36
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.
19
INFORMATION UNDERTAKINGS

19.1
General
The undertakings in this Clause 19 ( Information Undertakings ) remain in force throughout the Security Period unless the Facility Agent, acting with the authorisation of the Majority Lenders (or, where specified, all the Lenders), may otherwise permit.
19.2
Financial statements
The Obligors shall supply to the Facility Agent in sufficient copies for all the Lenders:
(a)
as soon as they become available, but in any event within 120 days after the end of each of their respective financial years their respective audited financial statements for that financial year (consolidated in the case of the Corporate Guarantor);
(b)
as soon as the same become available, but in any event within 90 days after the end of each quarter in each of their respective financial years:

(i)
their respective financial statements for that financial quarter; and

(ii)
together with the financial statements referred to in paragraph (b) of this Clause 19.2 ( Financial statements ), a performance report in relation to the Ship in the form set out in Schedule 8 ( Vessel Report ).
19.3
Compliance Certificate
(a)
The Corporate Guarantor shall supply to the Facility Agent, semi-annually (for the first semester, within 90 days after the end of such semester and, for the second semester, within 120 days after the year-end), a Compliance Certificate setting out (in reasonable detail) computations as to compliance with Clauses 20 ( Financial Covenants ) and 24 ( Security Cover ) as at the date as at which those financial statements were drawn up.
(b)
Each Compliance Certificate shall be signed by a director of the Borrower and, if required to be delivered with the financial statements delivered pursuant to paragraphs (a) and (b) of Clause 19.2 ( Financial statements ).
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19.4
Requirements as to financial statements
(a)
Each set of financial statements delivered by the Borrower or the Corporate Guarantor pursuant to Clause 19.2 ( Financial statements ) shall be certified by an authorised signatory of the relevant company (which, in the case of the Corporate Guarantor shall be an officer) as fairly representing (if unaudited) its financial condition and operations as at the date as at which those financial statements were drawn up.
(b)
Each of the Borrower and the Corporate Guarantor shall procure that each set of financial statements delivered pursuant to Clause 19.2 ( Financial statements ) is prepared using GAAP.
19.5
Information: miscellaneous
Each Obligor shall supply to the Facility Agent (in sufficient copies for all the Lenders, if the Facility Agent so requests):
(a)
all documents dispatched by it to its partners or members (or any class of them) or its creditors generally at the same time as they are dispatched;
(b)
promptly upon becoming aware of them, the details of any litigation, arbitration or administrative proceedings or investigations (including proceedings or investigations relating to any alleged or actual breach of the ISM Code or of the ISPS Code) which are current, threatened or pending against any Transaction Obligor, and which might, if adversely determined, have a Material Adverse Effect;
(c)
promptly, 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 and the Insurances;

(ii)
the Approved Charters;

(iii)
the Security Assets;

(iv)
compliance of the Obligors with the terms of the Finance Documents;

(v)
the financial condition, business and operations of any Transaction Obligor,
as any Finance Party (through the Facility Agent) may reasonably request; and
(e)
promptly, such further information and/or documents as any Finance Party (through the Facility Agent) may reasonably request so as to enable such Finance Party to comply with any laws applicable to it or as may be required by any regulatory authority.
19.6
Notification of Default
(a)
Each Obligor shall notify the Facility Agent of any Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence (unless that Obligor is aware that a notification has already been provided by another Obligor).
(b)
Promptly upon a request by the Facility Agent, the Borrower shall supply to the Facility Agent a certificate signed by two of its directors or senior officers on its behalf certifying that no Default is continuing (or if a Default is continuing, specifying the Default and the steps, if any, being taken to remedy it).
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(c)
Without prejudice to paragraph (a) of this Clause 19.6 ( Notification of Default ), if either the Borrower or the Corporate Guarantor becomes aware that it is not in compliance with or (with the giving of any notice by any Finance Party to the Borrower or the lapse of any grace periods) would not be in compliance with the provisions of Clauses 20 ( Financial Covenants ), 24.1 ( Minimum required security cover ) or 24.2 ( Provision of additional security; prepayment ), the Borrower shall notify the Facility Agent of such occurrence (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence.
19.7
Use of websites
(a)
Each Obligor may satisfy its obligation under the Finance Documents to which it is a party to deliver any information in relation to those Lenders (the " Website Lenders ") which accept this method of communication by posting this information onto an electronic website designated by the Borrower and the Facility Agent (the " Designated Website ") if:

(i)
the Facility Agent expressly agrees (after consultation with each of the Lenders) that it will accept communication of the information by this method;

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

(iii)
the information is in a format previously agreed between the relevant Obligor and the Facility Agent.
If any Lender (a " Paper Form Lender ") does not agree to the delivery of information electronically then the Facility Agent shall notify the Obligors accordingly and each Obligor shall supply the information to the Facility Agent (in sufficient copies for each Paper Form Lender) in paper form.  In any event each Obligor shall supply the Facility Agent with at least one copy in paper form of any information required to be provided by it.
(b)
The Facility Agent shall supply each Website Lender with the address of and any relevant password specifications for the Designated Website following designation of that website by the Obligors or any of them and the Facility Agent.
(c)
An Obligor shall promptly upon becoming aware of its occurrence notify the Facility Agent if:

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

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

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

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

(v)
if that Obligor becomes aware that the Designated Website or any information posted onto the Designated Website is or has been infected by any electronic virus or similar software.
If an Obligor notifies the Facility Agent under sub-paragraph (i) or (v) of paragraph (c) above, all information to be provided by the Obligors under this Agreement after the date of that notice shall be supplied in paper form unless and until the Facility Agent and each Website Lender is satisfied that the circumstances giving rise to the notification are no longer continuing.
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(d)
Any Website Lender may request, through the Facility Agent, one paper copy of any information required to be provided under this Agreement which is posted onto the Designated Website.  The Obligors shall comply with any such request within 10 Business Days.
19.8
"Know your customer" checks
(a)
If:

(i)
the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the date of this Agreement;

(ii)
any change in the status of a Transaction Obligor (including, without limitation, a change of ownership of a Transaction Obligor) after the date of this Agreement; or

(iii)
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 a Finance Party (or, in the case of sub-paragraph (iii) above, 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, each Obligor shall promptly upon the request of any Finance Party supply, or procure the supply of, such documentation and other evidence as is reasonably requested by a Servicing Party (for itself or on behalf of any other Finance Party) or any Lender (for itself or, in the case of the event described in sub-paragraph (iii) above, on behalf of any prospective new Lender) in order for such Finance Party or, in the case of the event described in sub-paragraph (iii) above, 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.
(b)
Each Lender shall promptly upon the request of a Servicing Party supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Servicing Party (for itself) in order for that Servicing Party 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.
20
FINANCIAL COVENANTS

20.1
Minimum Liquidity
(a)
The Borrower shall from the Utilisation Date for Tranche A and at all times thereafter during the Security Period maintain a credit balance of at least $500,000 (the " Minimum Liquidity Amount ") in the Operating Account.
(b)
The Facility Agent shall have the right to block a payment or transfer of funds if the provisions of paragraph (a) above would be breached following such transfer.
20.2
Other financial covenants
The Corporate Guarantor shall procure that at all times:
(a)
it shall maintain Cash (which, without limitation, shall include the Minimum Liquidity Amount, and any contractually committed but undrawn parts of the Notes) in an amount not less than the product of (i) the number of Fleet Vessels and (ii) $500,000; and
(b)
the EBITDA to Net Interest Expense Ratio is at least equal to:
65


(i)
from the date of this Agreement until 29 June 2019 (inclusive), 1.2:1; and

(ii)
from 30 June 2019 and for the remainder of the Security Period, 2:1; and
(c)
the Leverage Ratio does not exceed:

(iii)
from the date of this Agreement until 30 March 2019 (inclusive), 85 per cent.;

(iv)
from 31 March 2019 until 29 June 2019 (inclusive), 80 per cent.; and

(v)
from 30 June 2019 and for the remainder of the Security Period, 75 per cent.
20.3
Testing
The financial covenants set out in this Clause 20 ( Financial Covenants ) shall be tested semi-annually by reference to each of the audited annual and the unaudited financial statements of the Corporate Guarantor (in the case of the unaudited financial statements, those relating to the first two quarters in each financial year of the Corporate Guarantor) delivered pursuant to Clause 19.2 ( Financial statements ) and each Compliance Certificate.
20.4
Financial covenants in other credit agreements
The financial covenants as set out in Clause 20.2 ( Other financial covenants ) are in substantially the same form (and for the avoidance of doubt where the same covenants apply, the figures or ratios shall be required to be in the same form) as given to financing parties in any other agreements relating to any other Financial Indebtedness of the Corporate Guarantor (or Financial Indebtedness of a Subsidiary of the Corporate Guarantor which is guaranteed by the Corporate Guarantor).  Should any financial covenants be given by the Corporate Guarantor that are more favourable to any person to whom Financial Indebtedness is owed to, or guaranteed, by the Corporate Guarantor, the Corporate Guarantor shall promptly provide details of such covenants to the Facility Agent and agrees that those more favourable financial covenants shall be deemed to apply to this Agreement as if set out in full in this Clause with effect from the date on which details of such covenants are provided and the Corporate Guarantor shall enter into such additional documentation as the Finance Parties may require to make the necessary amendments to the financial covenants set out in Clauses 20.1 ( Minimum Liquidity ) or 20.2 ( Other financial covenants ).
21
GENERAL UNDERTAKINGS

21.1
General
The undertakings in this Clause 21 ( General Undertakings ) remain in force throughout the Security Period except as the Facility Agent, acting with the authorisation of the Majority Lenders (or, where specified, all the Lenders) may otherwise permit.
21.2
Authorisations
Each Obligor shall, and shall procure that each other Transaction Obligor will, promptly:
(a)
obtain, comply with and do all that is necessary to maintain in full force and effect; and
(b)
supply certified copies to the Facility Agent of,
any Authorisation required under any law or regulation of a Relevant Jurisdiction or the state of the applicable Approved Flag at any time of the Ship to enable it to:
66


(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 applicable 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).
21.3
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.
21.4
Environmental compliance
Each Obligor shall, and shall procure that each other Transaction Obligor will:
(a)
comply with all Environmental Laws;
(b)
obtain, maintain and ensure compliance with all requisite Environmental Approvals;
(c)
implement procedures to monitor compliance with and to prevent liability under any Environmental Law,
where failure to do so has or is reasonably likely to have a Material Adverse Effect.
21.5
Environmental Claims
Each Obligor shall, and shall procure that each other Transaction Obligor will, promptly upon becoming aware of the same, inform the Facility Agent in writing of:
(a)
any Environmental Claim against any Transaction Obligor which is current, pending or threatened; and
(b)
any facts or circumstances which are reasonably likely to result in any Environmental Claim being commenced or threatened against any Transaction Obligor,
where the claim, if determined against that Transaction Obligor, has or is reasonably likely to have a Material Adverse Effect.
21.6
Taxation
(a)
Each Obligor shall, and shall procure that each other Transaction Obligor will pay and discharge all Taxes imposed upon it or its assets within the time period allowed without incurring penalties unless and only to the extent that:

(i)
such payment is being contested in good faith;

(ii)
adequate reserves are maintained for those Taxes and the costs required to contest them and both have been disclosed in its Latest Financial Statements delivered to the Facility Agent under Clause 19.2 ( 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.
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21.7
Overseas companies
Each Obligor shall, and shall procure that each other Transaction Obligor will, promptly inform the Facility Agent 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 Facility Agent 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.
21.8
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 18.30 ( 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.
21.9
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 a Finance Party 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.
21.10
Title
(a)
The Borrower shall hold the legal title to, and own the entire beneficial interest in the Ship, its Earnings and its Insurances.
(b)
With effect on and from its creation or intended creation, the Borrower 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.
21.11
Negative pledge
(a)
No Obligor shall, and the Obligors shall procure that no other Transaction Obligor will, create or permit to subsist any Security over any of its assets which are, in the case of the Transaction Obligors other than the Borrower, the subject of the Security created or intended to be created by the Finance Documents.
(b)
The Borrower shall not:

(i)
sell, transfer or otherwise dispose of any of its assets on terms whereby they are or may be leased to or re-acquired by an Obligor;

(ii)
sell, transfer or otherwise dispose of any of its receivables on recourse terms;

(iii)
enter into any arrangement under which money or the benefit of a bank or other account may be applied, set-off or made subject to a combination of accounts; or

(iv)
enter into any other preferential arrangement having a similar effect,
in circumstances where the arrangement or transaction is entered into primarily as a method of raising Financial Indebtedness or of financing the acquisition of an asset.
(c)
Paragraphs (a) and (b) above do not apply to any Permitted Security.
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21.12
Disposals
(a)
The Borrower shall not, enter into a single transaction or a series of transactions (whether related or not) and whether voluntary or involuntary to sell, lease, transfer or otherwise dispose of any asset (including without limitation the Ship, its Earnings or its Insurances).
(b)
Paragraph (a) above does not apply to:

(i)
any Charter as all Charters are subject to Clause 23.15 ( Restrictions on chartering, appointment of managers etc. ); or

(ii)
a sale of the Ship provided that the Borrower comply with the prepayment obligations in Clause 7 ( Prepayment and Cancellation )
21.13
Merger
No Obligor shall enter into any amalgamation, demerger, merger, consolidation or corporate reconstruction unless, in the case of the Corporate Guarantor, the Corporate Guarantor is the surviving entity and no breach of Clauses 21.14 (Change of business) and 21.22 (NASDAQ listing) occurs or will occur as a result of such action.
21.14
Change of business
No Obligor shall engage in any business other than the ownership and operation of the Ship, in the case of the Borrower, the ownership and operation of the Ship and in the case of the Corporate Guarantor, the holding of single purpose ship owning subsidiaries and arrangement of acquisition, financing and the operation of vessels on behalf of these single purpose ship owning subsidiaries.
21.15
Financial Indebtedness
The Borrower shall not incur or permit to be outstanding any Financial Indebtedness except Permitted Financial Indebtedness.
21.16
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.
21.17
Share capital
The Borrower shall not:
(a)
increase or reduce its authorised share capital unless the Borrower has obtained the prior written consent of the Facility Agent;
(b)
issue any further shares except to the Corporate Guarantor and provided such new shares are made subject to the terms of the Shares Security immediately upon the issue of such new shares in a manner satisfactory to the Facility Agent and the terms of the Shares Security are complied with;
(c)
appoint any further director or officer of the Borrower (unless the provisions of the Shares Security are complied with).
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21.18
Dividends
The Borrower may make or pay any dividend or other distribution (in cash or in kind) in respect of its shares in the following cases:
(a)
if

(i)
Additional Repayments in an aggregate amount of $3,190,000 have been made; and

(ii)
no Default has occurred or would result from the making of any such payment; or
(b)
if prior approval has been given by the Facility Agent.
21.19
Other transactions
The Borrower shall not:
(a)
be the creditor in respect of any loan or any form of credit to any person;
(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 Obligor assumes any liability of any other person other than any guarantee or indemnity given under the Finance Documents;
(c)
make any asset acquisitions;
(d)
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
(e)
enter into any transaction on terms which are, in any respect, less favourable to that Obligor than those which it could obtain in a bargain made at arms' length; or
(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.
21.20
Unlawfulness, invalidity and ranking; Security imperilled
No Obligor shall, and the Obligors shall procure that no other Transaction Obligor will, do (or fail to do) or cause or permit another person to do (or omit to do) anything which is likely to:
(a)
make it unlawful for a Transaction Obligor to perform any of its obligations under the Transaction Documents;
(b)
cause any obligation of a Transaction Obligor under the Transaction Documents to cease to be legal, valid, binding or enforceable;
(c)
cause any Transaction Document to cease to be in full force and effect;
(d)
cause any Transaction Security to rank after, or lose its priority to, any other Security; and
(e)
imperil or jeopardise the Transaction Security.
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21.21
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 Security Agent 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 Security Agent may specify (and in such form as the Security Agent may require in favour of the Security Agent or its nominee(s)):

(i)
to create, perfect, vest in favour of the Security Agent 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 Security Agent, any Receiver or any of the Secured Parties provided by or pursuant to the Finance Documents or by law;

(ii)
to confer on the Security Agent or confer on the Secured Parties 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 Security Agent 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 Security Agent or the Secured Parties by or pursuant to the Finance Documents.
(c)
At the same time as an Obligor delivers to the Security Agent any document executed by itself or another Transaction Obligor pursuant to this Clause 21.21 ( Further assurance ), that Obligor shall deliver, or shall procure that such other Transaction Obligor will deliver, to the Security Agent reasonable evidence that that Obligor's or Transaction Obligor's execution of such document has been duly authorised by it.
21.22
NASDAQ listing
The Corporate Guarantor shall maintain its listing on the NASDAQ Stock Exchange with the ticker symbol 'SHIP'.
21.23
Shareholder WC Facility repayment
The Corporate Guarantor shall not prepay or repay (as the case may be) the Shareholder WC Facility at any time during the Security Period if, following such prepayment or repayment, the aggregate unrestricted cash balance in the Group would be less than $3,500,000.
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22
INSURANCE UNDERTAKINGS

22.1
General
The undertakings in this Clause 22 ( Insurance Undertakings ) remain in force from the date of this Agreement throughout the rest of the Security Period except as the Facility Agent, acting with the authorisation of the Majority Lenders (or, where specified, all the Lenders) may otherwise permit.
22.2
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 Facility Agent acting on the instructions of the Majority Lenders 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 Facility Agent by notice to the Borrower.
22.3
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)
120 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 Insurance 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.
22.4
Further protections for the Finance Parties
In addition to the terms set out in Clause 22.3 ( Terms of obligatory insurances ), the Borrower shall procure that the obligatory insurances effected by it 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 Security Agent (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 Security Agent to collect or recover any moneys which at any time become payable in respect of the obligatory insurances;
(b)
whenever the Facility Agent requires, name (or be amended to name) the Security Agent as additional named insured for its rights and interests, warranted no operational interest and with full waiver of rights of subrogation against the Security Agent, but without the Security Agent being liable to pay (but having the right to pay) premiums, calls or other assessments in respect of such insurance;
(c)
name the Security Agent as loss payee with such directions for payment as the Facility Agent may specify;
(d)
provide that all payments by or on behalf of the insurers under the obligatory insurances to the Security Agent 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 Security Agent or any other Finance Party; and
(f)
provide that the Security Agent may make proof of loss if the Borrower fails to do so.
22.5
Renewal of obligatory insurances
The Borrower shall:
(a)
at least 21 days before the expiry of any obligatory insurance:

(i)
notify the Facility Agent of the Approved Insurance 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 Facility Agents' approval to the matters referred to in sub-paragraph (i) above;
(b)
at least 14 days before the expiry of any obligatory insurance, renew that obligatory insurance in accordance with the Facility Agent's approval pursuant to paragraph (a) above; and
(c)
procure that the Approved Insurance 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 Facility Agent in writing of the terms and conditions of the renewal.
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22.6
Copies of policies; letters of undertaking
The Borrower shall ensure that the Approved Insurance Brokers provide the Security Agent 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 Facility Agent and including undertakings by the Approved Insurance 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 22.4 ( Further protections for the Finance Parties );

(ii)
they will hold such policies, and the benefit of such insurances, to the order of the Security Agent in accordance with such loss payable clause;

(iii)
they will advise the Security Agent 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 Security Agent 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 Facility Agent 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 Facility Agent.
22.7
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 Security Agent 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 Facility Agent acting on the instructions of Majority Lenders; 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.
22.8
Deposit of original policies
The Borrower shall ensure that all policies relating to obligatory insurances are deposited with the Approved Insurance Brokers through which the insurances are effected or renewed.
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22.9
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 Facility Agent or the Security Agent.
22.10
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.
22.11
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 22.6 ( Copies of policies; letters of undertaking )) ensure that the obligatory insurances are not made subject to any exclusions or qualifications to which the Facility Agent 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 Facility Agent 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.
22.12
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.
22.13
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 Security Agent to collect or recover any moneys which at any time become payable in respect of the obligatory insurances.
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22.14
Provision of copies of communications
The Borrower shall provide the Security Agent, at the time of each such communication, with copies of all written communications other than (unless specifically required by the Security Agent) communications of an entirely routine nature between the Borrower and:
(a)
the Approved Insurance 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)
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.
22.15
Provision of information
The Borrower shall promptly provide the Facility Agent (or any persons which it may designate) with any information which the Facility Agent (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 22.16 ( Mortgagee's interest and additional perils insurances ) or dealing with or considering any matters relating to any such insurances,
and the Borrower shall, forthwith upon demand, indemnify the Security Agent in respect of all fees and other expenses incurred by or for the account of the Security Agent in connection with any such report as is referred to in paragraph (a) above once in each 12 months period (starting on the Utilisation Date for Tranche A) and at any time when an Event of Default has occurred.
22.16
Mortgagee's interest and additional perils insurances
(a)
The Security Agent shall be entitled from time to time to effect, maintain and renew a mortgagee's interest marine insurance and a mortgagee's interest additional perils insurance in an amount of up to 120 per cent. of the Loan, on such terms, through such insurers and generally in such manner as the Security Agent acting on the instructions of the Majority Lenders may from time to time consider appropriate.
(b)
The Borrower shall upon demand fully indemnify the Security Agent 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.
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23
GENERAL SHIP UNDERTAKINGS

23.1
General
The undertakings in this Clause 23 ( 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 Facility Agent, acting with the authorisation of the Majority Lenders (or, where specified, all the Lenders) may otherwise permit.
23.2
Ship's name and registration
The Borrower shall:
(a)
keep the Ship registered in its name under the applicable 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 without the prior written consent of the Facility Agent,
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 on the Ship and on such other terms and in such other form as the Facility Agent, acting with the authorisation of the Lenders, shall approve or require; and

(ii)
the execution of such other documentation amending and supplementing the Finance Documents as the Facility Agent, acting with the authorisation of the Lenders, shall approve or require.
23.3
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 overdue recommendations and conditions.
23.4
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 except for the installation of an open loop scrubber system on the Ship.
23.5
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;
77


(ii)
the replacement part or item is free from any Security in favour of any person other than the Security Agent; 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.
23.6
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 Facility Agent acting on the instructions of the Majority Lenders, provide the Facility Agent, with copies of all survey reports.
23.7
Inspection
The Borrower shall permit the Security Agent (acting through surveyors or other persons appointed by it for that purpose) to board the Ship at all reasonable times and upon reasonable notice and without interfering with the Ship's normal course of trading to inspect its condition or to satisfy themselves about proposed or executed repairs and shall afford all proper facilities for such inspections. The Borrower will be liable for the costs of the inspection for the Ship once in each 12-month period (starting on the Utilisation Date for Tranche A) and at any time when an Event of Default has occurred.
23.8
Prevention of and release from arrest
(a)
The Borrower shall, in respect of the Ship, promptly discharge:

(i)
all liabilities which give or may give rise to maritime or possessory liens on or claims enforceable against the Ship, its Earnings or its Insurances;

(ii)
all Taxes, dues and other amounts charged in respect of the Ship, its Earnings or its Insurances; and

(iii)
all other outgoings whatsoever in respect of the Ship, its Earnings or its Insurances.
(b)
The Borrower shall immediately upon receiving notice of the arrest of the Ship or of its detention in exercise or purported exercise of any lien or claim, take all steps necessary to procure its release by providing bail or otherwise as the circumstances may require.
23.9
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;
78

(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 Obligor).
23.10
ISPS Code
Without limiting paragraph (a) of Clause 23.9 ( 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
(b)
maintain an ISSC for the Ship; and
(c)
notify the Facility Agent immediately in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the ISSC.
23.11
Sanctions and Ship trading
Without limiting Clause 23.9 ( Compliance with laws etc. ), the Borrower shall procure:
(a)
that the Ship shall not be used by or for the benefit of a Restricted 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 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;
(d)
that the Ship shall not sail to the Islamic Republic of Iran Provided that the Ship   may transit through Iranian waters if the Ship's destination is not any port of the Islamic Republic of Iran; and
(e)
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 23.9 ( Compliance with laws etc. ) as regards Sanctions and of this Clause 23.11 ( Sanctions and Ship trading ) and which permits refusal of employment or voyage orders if compliance would result in a breach of Sanctions or which would result in a breach of Sanctions if Sanctions were binding on each Obligor.
23.12
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 Security Agent acting on the instructions of the Majority Lenders has been given; and
(b)
the Borrower has (at its expense) effected any special, additional or modified insurance cover which the Security Agent acting on the instructions of the Majority Lenders may require.
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23.13
Provision of information
Without prejudice to Clause 19.5 ( Information: miscellaneous ) the Borrower shall promptly provide the Facility Agent 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 Facility Agent's request, promptly 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.
23.14
Notification of certain events
The Borrower shall immediately notify the Facility Agent by email, 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 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;
(e)
any arrest or detention of the Ship or any exercise or purported exercise of any lien on the Ship or the Earnings;
(f)
any intended dry docking of the Ship;
(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 Facility Agent advised in writing on a regular basis and in such detail as the Facility Agent 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.
23.15
Restrictions on chartering, appointment of managers etc.
The Borrower shall not without the prior written consent of the Facility Agent:
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(a)
let the Ship on demise charter for any period;
(b)
enter into any time, voyage or consecutive voyage charter in respect of the Ship other than a Permitted Charter;
(c)
amend, supplement or terminate a Management Agreement;
(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;
(e)
de activate or lay up the Ship; 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 $500,000 (or the equivalent in any other currency) except for the installation of (i) an open loop scrubber system on the Ship and (ii) Ballast Water Treatment System onboard the Ship, unless that person has first given to the Security Agent 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.
23.16
Notice of Mortgage
The Borrower shall keep the Mortgage registered against the Ship as a valid first preferred mortgage, carry on board the Ship a certified copy of the relevant Mortgage and place and maintain in a conspicuous place in the navigation room and the master's cabin of the Ship a framed printed notice stating that the Ship is mortgaged by the Borrower to the Security Agent.
23.17
Sharing of Earnings
The Borrower shall not enter into any agreement or arrangement for the sharing of any Earnings other than for the purposes of this Agreement.
23.18
Copies of Charters; charter assignment
Provided that all approvals necessary under Clause 23.15 ( Restrictions on chartering, appointment of managers etc. ) have been previously obtained, the Borrower shall:
(a)
provide promptly to the Facility Agent a true and complete copy of any Charter exceeding 6 months (including all amendments) for the Ship and all other documents related thereto; and
(b)
in respect of any Charter for a term which exceeds, or which by virtue of any optional extensions may exceed 13 months, execute and deliver to the Facility Agent a Charter Assignment together with each of the documents required to be delivered pursuant to such Charter Assignment (each in the agreed form).
23.19
Notification of compliance
The Borrower shall promptly provide the Facility Agent from time to time with evidence (in such form as the Facility Agent requires) that it is complying with this Clause 23 ( General Ship Undertakings ).
24
SECURITY COVER

24.1
Minimum required security cover
(a)
Clause 24.2 ( Provision of additional security; prepayment ) applies if on or after the first Utilisation Date, the Facility Agent notifies the Borrower that:
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(i)
the Market Value of the Ship; plus

(ii)
the net realisable value of additional Security previously provided under this Clause 24 ( Security Cover ),
(b)
is:

(i)
during the period commencing on the first Utilisation Date and ending on 30 June 2019, below 140 per cent. of the Loan; and

(ii)
at all times thereafter, below 165 per cent. of the Loan.
24.2
Provision of additional security; prepayment
(a)
If the Facility Agent serves a notice on the Borrower under Clause 24.1 ( Minimum required security cover ), the Borrower shall, on or before the date falling 14 Business Days after the date (the " Prepayment Date ") on which the Facility Agent's notice is served, 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 which, in the opinion of the Facility Agent acting on the instructions of the Majority Lenders:

(i)
has a net realisable value at least equal to the shortfall; and

(ii)
is documented in such terms as the Facility Agent may approve or require,
before the Prepayment Date; and conditional upon such security being provided in such manner, it shall satisfy such prepayment obligation.
24.3
Value of additional vessel security
The net realisable value of any additional security which is provided under Clause 24.2 ( Provision of additional security; prepayment ) and which consists of Security over a vessel shall be the Market Value of the vessel concerned.
24.4
Valuations binding
Any valuation under this Clause 24 ( Security Cover ) shall be binding and conclusive as regards the Borrower.
24.5
Provision of information
(a)
The Borrower shall promptly provide the Facility Agent and any shipbroker acting under this Clause 24 ( Security Cover ) with any information which the Facility Agent or the shipbroker may request for the purposes of the valuation.
(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 Facility Agent considers prudent.
24.6
Prepayment mechanism
Any prepayment pursuant to Clause 24.2 ( 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 ).
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24.7
Provision of valuations
The Borrower shall provide the Facility Agent with 2 valuations of the Ship on the Utilisation Date for Tranche A and any other vessel over which additional Security has been created in accordance with Clause 24.3 ( Value of additional vessel security ), each from an Approved Broker (one appointed by the Facility Agent), to enable the Facility Agent to determine the Market Value of the Ship not more than 14 days before the Utilisation Date for Tranche A and the Market Value of the Ship as at 30 June and 31 December in each year.
25
ACCOUNTS AND APPLICATION OF EARNINGS

25.1
Accounts
The Borrower may not, without the prior consent of the Facility Agent, maintain any bank account other than the Operating Account and the DD Reserve Account.
25.2
Payment of Earnings
The Borrower shall ensure that, subject only to the provisions of the General Assignment, all the Earnings in respect of the Ship are paid in to the Operating Account.
25.3
Application of Earnings
The Borrower shall ensure that the Earnings shall be retained on the Operating Account and hereby instructs the Facility Agent and the Security Agent to release, on each Repayment Date relating to Tranche A and on each Interest Payment Date, for distribution to the Finance Parties in accordance with Clause 32.2 ( Redistribution of payments ) so much of the then balance on the Operating Account (in excess of the Minimum Liquidity Amount) in discharge of the Borrower's liability for that Repayment Instalment or that interest, as the case may be, in the following order:
(a)
first, in or towards payment of all expenses reasonably incurred (and evidenced, if required by the Lenders, to the satisfaction of the Lenders) in the usual course of the day-to-day running of the Ship;
(b)
secondly, in or towards payment pro rata of any unpaid fees, costs and expenses of, and any other amounts owing to, the Facility Agent, the Security Agent under the Finance Documents;
(c)
thirdly, in or towards payment pro rata of the Repayment Instalments due and payable under Clause 6.1 ( Repayment of Loan ) and any accrued interest and principal due but unpaid to the Lenders under this Agreement;
(d)
fourthly, towards payment of any Additional Repayments payable under Clause 6.3 ( Additional Repayments );
(e)
fifthly, towards any Quarterly Increase to be made under Clause 25.4 ( Transfers to the DD Reserve Account ); and
(f)
sixthly, subject to compliance with Clauses 20 ( Financial Covenants ), 6.3 ( Additional Repayments ) and 21.18 ( Dividends ) and provided no Default has occurred, to the Borrower for distribution in accordance with Clause 21.18 ( Dividends ).
25.4
Transfers to the DD Reserve Account
(a)
The Borrower shall procure that an amount of $35,000 is transferred to the DD Reserve Account from the Operating Account (subject to the balance on the Operating Account

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following such transfer being in excess of the Minimum Liquidity Amount) on each Repayment Date relating to Tranche A.
(b)
Subject to the other provisions of this Agreement and the other Finance Documents, the Borrower undertakes to use the monies in the DD Reserve Account only towards payment of any planned drydocking and interim survey expenses of the Ship, including for the avoidance of doubt the installation of Ballast Water Treatment System onboard the Ship.
(c)
The Borrower shall provide the Facility Agent with an invoice or invoices to evidence the amount of the drydocking or interim survey expenses in respect of the Ship and the relevant amount shall be released from the DD Reserve Account to pay such drydocking or interim survey expenses subject to the Facility Agent's written approval.
(d)
On the Termination Date, all amounts standing to the credit of the DD Reserve Account shall be applied towards repayment of the Loan.
25.5
Shortfall in Earnings
(a)
If the credit balance on the Operating Account is insufficient at any Repayment Date for the required amount to be transferred to the DD Reserve Account under Clause 25.4 ( Transfers to the DD Reserve Account ), the Borrower shall make up the amount of the insufficiency on demand from the Facility Agent.
(b)
Without prejudicing the Facility Agent's right to make such demand at any time, the Facility Agent may, if so authorised by the Majority Lenders, permit the Borrower to make up all or part of the insufficiency by increasing the amount of any transfer under Clause 25.4 ( Transfers to the DD Reserve Account ) from the Earnings received in the next or subsequent calendar months.
25.6
Location of Accounts
The Borrower shall promptly:
(a)
comply with any requirement of the Facility Agent as to the location or relocation of the Operating Account and the DD Reserve Account (or either of them); and
(b)
execute any documents which the Facility Agent specifies to create or maintain in favour of the Security Agent Security over (and/or rights of set-off, consolidation or other rights in relation to) the Operating Account and the DD Reserve Account.
26
EVENTS OF DEFAULT

26.1
General
Each of the events or circumstances set out in this Clause 26 ( Events of Default ) is an Event of Default except for Clause 26.20 ( Acceleration ) and Clause 26.21 ( Enforcement of security ).
26.2
Non-payment
A Transaction Obligor does not pay on the due date any amount payable pursuant to a Finance Document at the place at and in the currency in which it is expressed to be payable unless:
(a)
its failure to pay is caused by:

(i)
administrative or technical error; or

(ii)
a Disruption Event; and
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(b)
payment is made within 3 Business Days of its due date.
26.3
Specific obligations
A breach occurs of:
(a)
Clause 4.4 ( Waiver of conditions precedent ), 18.33 ( Sanctions ), Clause 20 ( Financial Covenants ), Clause 21.10 ( Title ), Clause 21.11 ( Negative pledge ), Clause 21.20 ( Unlawfulness, invalidity and ranking; Security imperilled ), Clause, 22.2 ( Maintenance of obligatory insurances ), Clause 22.3 ( Terms of obligatory insurances ), Clause 22.5 ( Renewal of obligatory insurances ), Clause 23.11 ( Sanctions and Ship Trading ) or Clause 24 ( Security Cover ); or
(b)
any provision of the Intercreditor Agreement and such breach is occasioned by the Shareholder.
26.4
Other obligations
(a)
A Transaction Obligor does not comply with any provision of the Finance Documents (other than those referred to in Clause 26.2 ( Non-payment ) and Clause 26.3 ( 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 5 Business Days of the Facility Agent giving notice to the Borrower or (if earlier) any Transaction Obligor becoming aware of the failure to comply.
26.5
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.
26.6
Cross default
(a)
Any Financial Indebtedness of any Obligor is not paid when due nor within any originally applicable grace period.
(b)
Any Financial Indebtedness of any Obligor is declared to be or otherwise becomes due and payable prior to its specified maturity as a result of an event of default (however described).
(c)
Any commitment for any Financial Indebtedness of any Obligor is cancelled or suspended by a creditor of any Obligor as a result of an event of default (however described).
(d)
Any creditor of any Obligor becomes entitled to declare any Financial Indebtedness of any Obligor due and payable prior to its specified maturity as a result of an event of default (however described).
(e)
No Event of Default will occur under this Clause 26.6 ( Cross default ) in respect of the Corporate Guarantor if the aggregate amount of Financial Indebtedness (or commitment for any Financial Indebtedness) falling within paragraphs (a) to (d) above is less than $5,000,000 (or its equivalent in any other currency) in aggregate.
26.7
Insolvency
(a)
A Transaction Obligor:

(i)
is unable or admits inability to pay its debts as they fall due;
85


(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 any Finance Party in its capacity as such) with a view to rescheduling any of its indebtedness.
(b)
The value of the assets of any Transaction Obligor is less than its liabilities (taking into account contingent and prospective liabilities).
(c)
A moratorium is declared in respect of any indebtedness of any Transaction Obligor.  If a moratorium occurs, the ending of the moratorium will not remedy any Event of Default caused by that moratorium.
(d)
No Event of Default will occur under this Clause 26.7 ( Insolvency ) if any of the events described in paragraphs (a)-(c) above occurs in respect of an Approved Manager which is a member of the Group and the Borrower replaces such Approved Manager by another Approved Manager and delivers to the Facility Agent the documents referred to at paragraph 2.4 of Part B ( Conditions Precedent to Utilisation of Tranche A ) of Schedule 2 within 10 Business Days from the date of such occurrence.
26.8
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 days of commencement.
(c)
No Event of Default will occur under this Clause 26.78 ( Insolvency proceedings ) if any of the events described in paragraph (a) above occurs in respect of an Approved Manager which is a member of the Group and the Borrower replaces such Approved Manager by another Approved Manager and delivers to the Facility Agent the documents referred to at paragraph 2.4 of Part B ( Conditions Precedent to Utilisation of Tranche A ) of Schedule 2 within 10 Business Days from the date of such occurrence.
26.9
Creditors' process
Any expropriation, attachment, sequestration, distress or execution (or any analogous process in any jurisdiction) affects any asset or assets of a Transaction Obligor (other than an arrest or detention of the Ship referred to in Clause 26.14 ( Arrest )).
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26.10
Ownership of the Borrower and the Corporate Guarantor
(a)
The Borrower is not or ceases to be a 100 per cent. directly owned Subsidiary of the Corporate Guarantor.
(b)
Persons other than those disclosed to the Facility Agent as part of the "Know your customer" checks gain control of the Corporate Guarantor.
(c)
For the purpose of paragraph (b) above "control" means:

(i)
the power (whether by way of ownership of shares, partnership units, 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 shares of the Corporate Guarantor (excluding any part of that issued shares that carries no right to participate beyond a specified amount in a distribution of either profits or capital).
26.11
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 a Finance Party) to be ineffective.
(d)
Any Transaction Security proves to have ranked after, or loses its priority to, any other Security.
26.12
Security imperilled
Any Security created or intended to be created by a Finance Document is in any way imperilled or in jeopardy.
26.13
Cessation of business
Any Obligor suspends or ceases to carry on (or threatens to suspend or cease to carry on) all or a material part of its business.
26.14
Arrest
Any arrest of the Ship or its detention in the exercise or the purported exercise of any lien or claim unless it is redelivered to the full control of the Borrower within 5 Business Days of such arrest or detention.
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26.15
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 7 days of such event, other than:
(a)
an arrest or detention of the Ship referred to in Clause 26.14 ( Arrest ); or
(b)
any Requisition.
26.16
Repudiation and rescission of agreements
A Transaction Obligor (or any other relevant party) rescinds or purports to rescind or repudiates or purports to repudiate a Transaction Document or any of the Transaction Security or evidences an intention to rescind or repudiate a Transaction Document or any Transaction Security.
26.17
Litigation
Any litigation, arbitration, administrative, governmental, regulatory or other investigations, proceedings or disputes are commenced or threatened, or any judgment or order of a court, arbitral tribunal or other tribunal or any order or sanction of any governmental or other regulatory body is made, in relation to any of the Transaction Documents or the transactions contemplated in any of the Transaction Documents or against any Transaction Obligor or its assets which:
(a)
has a Material Adverse Effect; or
(b)
is reasonably likely to have a Material Adverse Effect, unless in such case (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 Corporate Guarantor, the combined value of such proceedings or disputes does not exceed $5,000,000 (or its equivalent in any other currency) in aggregate.
26.18
Material adverse change
Any event or circumstance occurs which has or is reasonably likely to have a Material Adverse Effect.
26.19
Junior Agreement default
An event of default (howsoever described) occurs under any Junior Agreement.
26.20
Acceleration
On and at any time after the occurrence of an Event of Default the Facility Agent may, and shall if so directed by the Majority Lenders, by notice to the Borrower:
(a)
cancel the Total Commitments, whereupon they shall immediately be cancelled;
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(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;
(c)
declare that all or part of the Loan be payable on demand, whereupon it shall immediately become payable on demand by the Facility Agent acting on the instructions of the Majority Lenders; and/or
(d)
exercise or direct the Security Agent to exercise any or all of its rights, remedies, powers or discretions under the Finance Documents,
and the Facility Agent may serve notices under paragraphs (a), (b) and (c) above simultaneously or on different dates and the Security Agent may take any action referred to in Clause 26.21 ( Enforcement of security ) if no such notice is served or simultaneously with or at any time after the service of any of such notice.
26.21
Enforcement of security
On and at any time after the occurrence of an Event of Default the Security Agent may, and shall if so directed by the Majority Lenders, take any action which, as a result of the Event of Default or any notice served under Clause 26.20 ( Acceleration ), the Security Agent is entitled to take under any Finance Document or any applicable law or regulation.




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SECTION 9

CHANGES TO PARTIES
27
CHANGES TO THE LENDERS

27.1
Assignments and transfers by the Lenders
Subject to this Clause 27 ( Changes to the Lenders ), a Lender (the " Existing Lender ") may:
(a)
assign any of its rights; or
(b)
transfer by novation any of its rights and obligations,
under the Finance Documents to another bank or financial institution or to a trust, fund or other entity which has a banking license (the " New Lender ").
27.2
Conditions of assignment or transfer
(a)
The consent of the Borrower is required for an assignment or transfer by an Existing Lender, unless the assignment or transfer is:

(i)
to another Lender or an Affiliate of a Lender;

(ii)
if the Existing Lender is a fund, to a fund which is a Related Fund; or

(iii)
made at a time when a Default is continuing.
(b)
The consent of the Borrower to an assignment or transfer must not be unreasonably withheld or delayed.  The 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 the Borrower within that time.
(c)
The consent of the Borrower to an assignment or transfer must not be withheld solely because the assignment or transfer may result in an increase to any amount payable under Clause 14.3 ( Mandatory Cost ).
(d)
An assignment will only be effective on:

(i)
receipt by the Facility Agent (whether in the Assignment Agreement or otherwise) of written confirmation from the New Lender (in form and substance satisfactory to the Facility Agent) that the New Lender will assume the same obligations to the other Secured Parties as it would have been under if it were an Original Lender; and

(ii)
performance by the Facility Agent of all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to such assignment to a New Lender, the completion of which the Facility Agent shall promptly notify to the Existing Lender and the New Lender.
(e)
Each Obligor on behalf of itself and each Transaction Obligor agrees that all rights and interests (present, future or contingent) which the Existing Lender has under or by virtue of the Finance Documents are assigned to the New Lender absolutely, free of any defects in the Existing Lender's title and of any rights or equities which the Borrower or any other Transaction Obligor had against the Existing Lender.
(f)
A transfer will only be effective if the procedure set out in Clause 27.5 ( Procedure for transfer ) is complied with.
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(g)
If:

(i)
a Lender assigns or transfers 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, transfer or change occurs, a Transaction Obligor would be obliged to make a payment to the New Lender or 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 Lender acting through its new Facility Office is only entitled to receive payment under those Clauses to the same extent as the Existing Lender or Lender acting through its previous Facility Office would have been if the assignment, transfer or change had not occurred.  This paragraph (g) shall not apply in respect of an assignment or transfer made in the ordinary course of the primary syndication of the Facility.
(h)
Each New Lender, by executing the relevant Transfer Certificate or Assignment Agreement, confirms, for the avoidance of doubt, that the Facility Agent has authority to execute on its behalf any amendment or waiver that has been approved by or on behalf of the requisite Lender or Lenders in accordance with this Agreement on or prior to the date on which the transfer or assignment becomes effective in accordance with this Agreement and that it is bound by that decision to the same extent as the Existing Lender would have been had it remained a Lender.
27.3
Assignment or transfer fee
The New Lender shall, on the date upon which an assignment or transfer takes effect, pay to the Facility Agent (for its own account) a fee to be agreed between the New Lender and the Facility Agent prior to such assignment or transfer.
27.4
Limitation of responsibility of Existing Lenders
(a)
Unless expressly agreed to the contrary, an Existing Lender makes no representation or warranty and assumes no responsibility to a New Lender for:

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

(ii)
the financial condition of any Transaction Obligor;

(iii)
the performance and observance by any Transaction Obligor of its obligations under the Transaction Documents or any other documents; or

(iv)
the accuracy of any statements (whether written or oral) made in or in connection with any Transaction Document or any other document,
and any representations or warranties implied by law are excluded.
(b)
Each New Lender confirms to the Existing Lender and the other Finance Parties and the Secured Parties that it:

(i)
has made (and shall continue to make) its own independent investigation and assessment of the financial condition and affairs of each Transaction Obligor and its related entities in connection with its participation in this Agreement and has not relied exclusively on any information provided to it by the Existing Lender or any other
91

Finance Party in connection with any Transaction Document or the Transaction Security; and

(ii)
will continue to make its own independent appraisal of the creditworthiness of each Transaction Obligor and its related entities throughout the Security Period.
(c)
Nothing in any Finance Document obliges an Existing Lender to:

(i)
accept a re-transfer or re-assignment from a New Lender of any of the rights and obligations assigned or transferred under this Clause 27 ( Changes to the Lenders ); or

(ii)
support any losses directly or indirectly incurred by the New Lender by reason of the non-performance by any Transaction Obligor of its obligations under the Transaction Documents or otherwise.
27.5
Procedure for transfer
(a)
Subject to the conditions set out in Clause 27.2 ( Conditions of assignment or transfer ), a transfer is effected in accordance with paragraph (c) below when the Facility Agent executes an otherwise duly completed Transfer Certificate delivered to it by the Existing Lender and the New Lender.  The Facility Agent shall, subject to paragraph (b) below as soon as reasonably practicable after receipt by it of a duly completed Transfer Certificate appearing on its face to comply with this Agreement and delivered in accordance with this Agreement, execute that Transfer Certificate.
(b)
The Facility Agent shall only be obliged to execute a Transfer Certificate delivered to it by the Existing Lender and the New Lender once it is satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to the transfer to such New Lender.
(c)
Subject to Clause 27.9 ( Pro rata interest settlement ), on the Transfer Date:

(i)
to the extent that in the Transfer Certificate the Existing Lender seeks to transfer by novation its rights and obligations under the Finance Documents and in respect of the Transaction Security, each of the Transaction Obligors and the Existing Lender shall be released from further obligations towards one another under the Finance Documents and in respect of the Transaction Security and their respective rights against one another under the Finance Documents and in respect of the Transaction Security shall be cancelled (being the " Discharged Rights and Obligations ");

(ii)
each of the Transaction Obligors and the New Lender shall assume obligations towards one another and/or acquire rights against one another which differ from the Discharged Rights and Obligations only insofar as that Transaction Obligor and the New Lender have assumed and/or acquired the same in place of that Transaction Obligor and the Existing Lender;

(iii)
the Facility Agent, the Security Agent, the Arranger, the New Lender and other Lenders shall acquire the same rights and assume the same obligations between themselves and in respect of the Transaction Security as they would have acquired and assumed had the New Lender been an Original Lender with the rights and/or obligations acquired or assumed by it as a result of the transfer and to that extent the Facility Agent, the Security Agent, the Arranger and the Existing Lenders shall each be released from further obligations to each other under the Finance Documents; and

(iv)
the New Lender shall become a Party as a "Lender".
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27.6
Procedure for assignment
(a)
Subject to the conditions set out in Clause 27.2 ( Conditions of assignment or transfer ) an assignment may be effected in accordance with paragraph (c) below when the Facility Agent executes an otherwise duly completed Assignment Agreement delivered to it by the Existing Lender and the New Lender.  The Facility Agent shall, subject to paragraph (b) below, as soon as reasonably practicable after receipt by it of a duly completed Assignment Agreement appearing on its face to comply with the terms of this Agreement and delivered in accordance with the terms of this Agreement, execute that Assignment Agreement.
(b)
The Facility Agent shall only be obliged to execute an Assignment Agreement delivered to it by the Existing Lender and the New Lender once it is satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to the assignment to such New Lender.
(c)
Subject to Clause 27.9 ( Pro rata interest settlement ), on the Transfer Date:

(i)
the Existing Lender will assign absolutely to the New Lender its rights under the Finance Documents and in respect of the Transaction Security expressed to be the subject of the assignment in the Assignment Agreement;

(ii)
the Existing Lender will be released from the obligations (the " Relevant Obligations ") expressed to be the subject of the release in the Assignment Agreement (and any corresponding obligations by which it is bound in respect of the Transaction Security); and

(iii)
the New Lender shall become a Party as a "Lender" and will be bound by obligations equivalent to the Relevant Obligations.
(d)
Lenders may utilise procedures other than those set out in this Clause 27.6 ( Procedure for assignment ) to assign their rights under the Finance Documents (but not, without the consent of the relevant Transaction Obligor or unless in accordance with Clause 27.5 ( Procedure for transfer ), to obtain a release by that Transaction Obligor from the obligations owed to that Transaction Obligor by the Lenders nor the assumption of equivalent obligations by a New Lender) provided that they comply with the conditions set out in Clause 27.2 ( Conditions of assignment or transfer ).
27.7
Copy of Transfer Certificate or Assignment Agreement to Borrower
The Facility Agent shall, as soon as reasonably practicable after it has executed a Transfer Certificate or an Assignment Agreement, send to the Borrower a copy of that Transfer Certificate or Assignment Agreement.
27.8
Security over Lenders' rights
In addition to the other rights provided to Lenders under this Clause 27 ( Changes to the Lenders ), each Lender may without consulting with or obtaining consent from any Transaction Obligor, at any time charge, assign or otherwise create Security in or over (whether by way of collateral or otherwise) all or any of its rights under any Finance Document to secure obligations of that Lender including, without limitation:
(a)
any charge, assignment or other Security to secure obligations to a federal reserve or central bank; and
(b)
any charge, assignment or other Security granted to any holders (or trustee or representatives of holders) of obligations owed, or securities issued, by that Lender as security for those obligations or securities,
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except that no such charge, assignment or Security shall:

(i)
release a Lender from any of its obligations under the Finance Documents or substitute the beneficiary of the relevant charge, assignment or Security for the Lender as a party to any of the Finance Documents; or

(ii)
require any payments to be made by a Transaction Obligor other than or in excess of, or grant to any person any more extensive rights than, those required to be made or granted to the relevant Lender under the Finance Documents.
27.9
Pro rata interest settlement
(a)
If the Facility Agent has notified the Lenders that it is able to distribute interest payments on a " pro rata basis" to Existing Lenders and New Lenders then (in respect of any transfer pursuant to Clause 27.5 ( Procedure for transfer ) or any assignment pursuant to Clause 27.6 ( Procedure for assignment ) the Transfer Date of which, in each case, is after the date of such notification and is not on the last day of an Interest Period):

(i)
any interest or fees in respect of the relevant participation which are expressed to accrue by reference to the lapse of time shall continue to accrue in favour of the Existing Lender up to but excluding the Transfer Date (" Accrued Amounts ") and shall become due and payable to the Existing Lender (without further interest accruing on them) on the last day of the current Interest Period (or, if the Interest Period is longer than six Months, on the next of the dates which falls at six Monthly intervals after the first day of that Interest Period); and

(ii)
the rights assigned or transferred by the Existing Lender will not include the right to the Accrued Amounts, so that, for the avoidance of doubt:

(A)
when the Accrued Amounts become payable, those Accrued Amounts will be payable to the Existing Lender; and

(B)
the amount payable to the New Lender on that date will be the amount which would, but for the application of this Clause 27.9 ( Pro rata interest settlement ), have been payable to it on that date, but after deduction of the Accrued Amounts.
(b)
In this Clause 27.9 ( Pro rata interest settlement ) references to "Interest Period" shall be construed to include a reference to any other period for accrual of fees.
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CHANGES TO THE TRANSACTION OBLIGORS

28.1
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.
28.2
Release of security
(a)
If a disposal of any asset subject to security created by a Security Document is made in the following circumstances:

(i)
the disposal is permitted by the terms of any Finance Document;

(ii)
the Majority Lenders/all the Lenders agree to the disposal;
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(iii)
the disposal is being made at the request of the Security Agent in circumstances where any security created by the Security Documents has become enforceable; or

(iv)
the disposal is being effected by enforcement of a Security Document,
the Security Agent may release the asset(s) being disposed of from any security over those assets created by a Security Document.  However, the proceeds of any disposal (or an amount corresponding to them) must be applied in accordance with the requirements of the Finance Documents (if any).
(b)
If the Security Agent is satisfied that a release is allowed under this Clause 28.2 ( Release of security ) (at the request and expense of the Borrower) each Finance Party must enter into any document and do all such other things which are reasonably required to achieve that release.  Each other Finance Party irrevocably authorises the Security Agent to enter into any such document.  Any release will not affect the obligations of any other Transaction Obligor under the Finance Documents.

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SECTION 10

THE FINANCE PARTIES
29
THE FACILITY AGENT, THE ARRANGER AND THE REFERENCE BANKS

29.1
Appointment of the Facility Agent
(a)
Each of the Arranger and the Lenders appoints the Facility Agent to act as its agent under and in connection with the Finance Documents.
(b)
Each of the Arranger and the Lenders authorises the Facility Agent to perform the duties, obligations and responsibilities and to exercise the rights, powers, authorities and discretions specifically given to the Facility Agent under, or in connection with, the Finance Documents together with any other incidental rights, powers, authorities and discretions.
29.2
Instructions
(a)
The Facility Agent shall:

(i)
unless a contrary indication appears in a Finance Document, exercise or refrain from exercising any right, power, authority or discretion vested in it as Facility Agent in accordance with any instructions given to it by:

(A)
all Lenders if the relevant Finance Document stipulates the matter is an all Lender decision; and

(B)
in all other cases, the Majority Lenders; and

(ii)
not be liable for any act (or omission) if it acts (or refrains from acting) in accordance with sub-paragraph (i) above (or, if this Agreement stipulates the matter is a decision for any other Finance Party or group of Finance Parties, in accordance with instructions given to it by that Finance Party or group of Finance Parties).
(b)
The Facility Agent shall be entitled to request instructions, or clarification of any instruction, from the Majority Lenders (or, if the relevant Finance Document stipulates the matter is a decision for any other Finance Party or group of Finance Parties, from that Finance Party or group of Finance Parties) as to whether, and in what manner, it should exercise or refrain from exercising any right, power, authority or discretion and the Facility Agent may refrain from acting unless and until it receives any such instructions or clarification that it has requested.
(c)
Save in the case of decisions stipulated to be a matter for any other Finance Party or group of Finance Parties under the relevant Finance Document and unless a contrary indication appears in a Finance Document, any instructions given to the Facility Agent by the Majority Lenders shall override any conflicting instructions given by any other Parties and will be binding on all Finance Parties.
(d)
Paragraph (a) above shall not apply:

(i)
where a contrary indication appears in a Finance Document;

(ii)
where a Finance Document requires the Facility Agent to act in a specified manner or to take a specified action;

(iii)
in respect of any provision which protects the Facility Agent's own position in its personal capacity as opposed to its role of Facility Agent for the relevant Finance Parties.
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(e)
If giving effect to instructions given by the Majority Lenders would in the Facility Agent's opinion have an effect equivalent to an amendment or waiver referred to in Clause 42 ( Amendments and Waivers ), the Facility Agent shall not act in accordance with those instructions unless consent to it so acting is obtained from each Party (other than the Facility Agent) whose consent would have been required in respect of that amendment or waiver.
(f)
In exercising any discretion to exercise a right, power or authority under the Finance Documents where it has not received any instructions as to the exercise of that discretion the Facility Agent shall do so having regard to the interests of all the Finance Parties.
(g)
The Facility Agent may refrain from acting in accordance with any instructions of any Finance Party or group of Finance Parties until it has received any indemnification and/or security that it may in its discretion require (which may be greater in extent than that contained in the Finance Documents and which may include payment in advance) for any cost, loss or liability (together with any applicable VAT) which it may incur in complying with those instructions.
(h)
Without prejudice to the remainder of this Clause 29.2 ( Instructions ), in the absence of instructions, the Facility Agent shall not be obliged to take any action  (or refrain from taking action) even if it considers acting or not acting to be in the best interests of the Finance Parties.  The Facility Agent may act (or refrain from acting) as it considers to be in the best interest of the Finance Parties.
(i)
The Facility Agent is not authorised to act on behalf of a Finance Party (without first obtaining that Finance Party's consent) in any legal or arbitration proceedings relating to any Finance Document.  This paragraph (i) shall not apply to any legal or arbitration proceeding relating to the perfection, preservation or protection of rights under the Security Documents or enforcement of the Transaction Security or Security Documents.
29.3
Duties of the Facility Agent
(a)
The Facility Agent's duties under the Finance Documents are solely mechanical and administrative in nature.
(b)
Subject to paragraph (c) below, the Facility Agent shall promptly forward to a Party the original or a copy of any document which is delivered to the Facility Agent for that Party by any other Party.
(c)
Without prejudice to Clause 27.7 ( Copy of Transfer Certificate or Assignment Agreement to Borrower ), paragraph (b) above shall not apply to any Transfer Certificate or any Assignment Agreement.
(d)
Except where a Finance Document specifically provides otherwise, the Facility Agent is not obliged to review or check the adequacy, accuracy or completeness of any document it forwards to another Party.
(e)
If the Facility Agent receives notice from a Party referring to any Finance Document, describing a Default and stating that the circumstance described is a Default, it shall promptly notify the other Finance Parties.
(f)
If the Facility Agent is aware of the non-payment of any principal, interest, commitment fee or other fee payable to a Finance Party (other than the Facility Agent, the Arranger or the Security Agent) under this Agreement, it shall promptly notify the other Finance Parties.
(g)
The Facility Agent shall provide to the Borrower within 10 Business Days of a request by the Borrower (but no more frequently than once per calendar month), a list (which may be in electronic form) setting out the names of the Lenders as at that Business Day, their respective Commitments, the address (and the department or officer, if any, for whose attention any communication is to be made) of each Lender for any communication to be made or document
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to be delivered under or in connection with the Finance Documents, the electronic mail address and/or any other information required to enable the sending and receipt of information by electronic mail or other electronic means to and by each Lender to whom any communication under or in connection with the Finance Documents may be made by that means and the account details of each Lender for any payment to be distributed by the Facility Agent to that Lender under the Finance Documents.
(h)
The Facility Agent shall have only those duties, obligations and responsibilities expressly specified in the Finance Documents to which it is expressed to be a party (and no others shall be implied).
29.4
Role of the Arranger
Except as specifically provided in the Finance Documents, the Arranger has no obligations of any kind to any other Party under or in connection with any Finance Document.
29.5
No fiduciary duties
(a)
Nothing in any Finance Document constitutes the Facility Agent or the Arranger as a trustee or fiduciary of any other person.
(b)
Neither the Facility Agent nor the Arranger shall be bound to account to other Finance Party for any sum or the profit element of any sum received by it for its own account.
29.6
Application of receipts
Except as expressly stated to the contrary in any Finance Document, any moneys which the Facility Agent receives or recovers in its capacity as Facility Agent shall be applied by the Facility Agent in accordance with Clause 33.5 ( Application of receipts; partial payments ).
29.7
Business with the Transaction Obligors
The Facility Agent and the Arranger may accept deposits from, lend money to, and generally engage in any kind of banking or other business with, any Transaction Obligors.
29.8
Rights and discretions
(a)
The Facility Agent may:

(i)
rely on any representation, communication, notice or document believed by it to be genuine, correct and appropriately authorised;

(ii)
assume that:

(A)
any instructions received by it from the Majority Lenders, any Finance Parties or any group of Finance Parties are duly given in accordance with the terms of the Finance Documents; and

(B)
unless it has received notice of revocation, that those instructions have not been revoked; and

(iii)
rely on a certificate from any person:

(A)
as to any matter of fact or circumstance which might reasonably be expected to be within the knowledge of that person; or
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(B)
to the effect that such person approves of any particular dealing, transaction, step, action or thing,
as sufficient evidence that that is the case and, in the case of paragraph (A) above, may assume the truth and accuracy of that certificate.
(b)
The Facility Agent may assume (unless it has received notice to the contrary in its capacity as agent for the Finance Parties) that:

(i)
no Default has occurred (unless it has actual knowledge of a Default arising under Clause 26.2 ( Non-payment ));

(ii)
any right, power, authority or discretion vested in any Party or any group of Finance Parties has not been exercised; and

(iii)
any notice or request made by the Borrower (other than a Utilisation Request or a Selection Notice) is made on behalf of and with the consent and knowledge of all the Transaction Obligors.
(c)
The Facility Agent may engage and pay for the advice or services of any lawyers, accountants, tax advisers, surveyors or other professional advisers or experts.
(d)
Without prejudice to the generality of paragraph (c) above or paragraph (e) below, the Facility Agent may at any time engage and pay for the services of any lawyers to act as independent counsel to the Facility Agent (and so separate from any lawyers instructed by the Lenders) if the Facility Agent in its reasonable opinion deems this to be desirable.
(e)
The Facility Agent may rely on the advice or services of any lawyers, accountants, tax advisers, surveyors or other professional advisers or experts (whether obtained by the Facility Agent or by any other Party) and shall not be liable for any damages, costs or losses to any person, any diminution in value or any liability whatsoever arising as a result of its so relying.
(f)
The Facility Agent may act in relation to the Finance Documents and the Security Property through its officers, employees and agents and shall not:

(i)
be liable for any error of judgment made by any such person; or

(ii)
be bound to supervise, or be in any way responsible for any loss incurred by reason of misconduct, omission or default on the part of any such person,
unless such error or such loss was directly caused by the Facility Agent's gross negligence or wilful misconduct.
(g)
Unless a Finance Document expressly provides otherwise the Facility Agent may disclose to any other Party any information it reasonably believes it has received as agent under the Finance Documents.
(h)
Notwithstanding any other provision of any Finance Document to the contrary, the Facility Agent is not obliged to do or omit to do anything if it would or might, in its reasonable opinion, constitute a breach of any law or regulation or a breach of a fiduciary duty or duty of confidentiality.
(i)
Notwithstanding any provision of any Finance Document to the contrary, the Facility Agent is not obliged to expend or risk its own funds or otherwise incur any financial liability in the performance of its duties, obligations or responsibilities or the exercise of any right, power, authority or discretion if it has grounds for believing the repayment of such funds or adequate indemnity against, or security for, such risk or liability is not reasonably assured to it.
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29.9
Responsibility for documentation
The Facility Agent is not responsible or liable for:
(a)
the adequacy, accuracy or completeness of any information (whether oral or written) supplied by the Facility Agent, the Security Agent, the Arranger, a Transaction Obligor or any other person in, or in connection with, any Transaction Document or the transactions contemplated in the Transaction Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Transaction Document; or
(b)
the legality, validity, effectiveness, adequacy or enforceability of any Transaction Document or the Security Property or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with, any Transaction Document or the Security Property; or
(c)
any determination as to whether any information provided or to be provided to any Finance Party or Secured Party is non-public information the use of which may be regulated or prohibited by applicable law or regulation relating to insider dealing or otherwise.
29.10
No duty to monitor
The Facility Agent shall not be bound to enquire:
(a)
whether or not any Default has occurred;
(b)
as to the performance, default or any breach by any Transaction Obligor of its obligations under any Transaction Document; or
(c)
whether any other event specified in any Transaction Document has occurred.
29.11
Exclusion of liability
(a)
Without limiting paragraph (b) below (and without prejudice to paragraph (e) of Clause 33.11 ( Disruption to Payment Systems etc. ) or any other provision of any Finance Document excluding or limiting the liability of the Facility Agent), the Facility Agent will not be liable for:

(i)
any damages, costs or losses to any person, any diminution in value, or any liability whatsoever arising as a result of taking or not taking any action under or in connection with any Transaction Document or the Security Property, unless directly caused by its gross negligence or wilful misconduct;

(ii)
exercising, or not exercising, any right, power, authority or discretion given to it by, or in connection with, any Transaction Document, the Security Property or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with, any Transaction Document or the Security Property; or

(iii)
any shortfall which arises on the enforcement or realisation of the Security Property; or

(iv)
without prejudice to the generality of paragraphs (i) to (iii) above, any damages, costs or losses to any person, any diminution in value or any liability whatsoever arising as a result of:

(A)
any act, event or circumstance not reasonably within its control; or

(B)
the general risks of investment in, or the holding of assets in, any jurisdiction,
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including (in each case and without limitation) such damages, costs, losses, diminution in value or liability arising as a result of nationalisation, expropriation or other governmental actions; any regulation, currency restriction, devaluation or fluctuation; market conditions affecting the execution or settlement of transactions or the value of assets (including any Disruption Event); breakdown, failure or malfunction of any third party transport, telecommunications, computer services or systems; natural disasters or acts of God; war, terrorism, insurrection or revolution; or strikes or industrial action.
(b)
No Party other than the Facility Agent may take any proceedings against any officer, employee or agent of the Facility Agent in respect of any claim it might have against the Facility Agent 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 and any officer, employee or agent of the Facility Agent may rely on this Clause subject to Clause 1.5 ( Third party rights ) and the provisions of the Third Parties Act.
(c)
The Facility Agent will not be liable for any delay (or any related consequences) in crediting an account with an amount required under the Finance Documents to be paid by the Facility Agent if the Facility Agent has taken all necessary steps as soon as reasonably practicable to comply with the regulations or operating procedures of any recognised clearing or settlement system used by the Facility Agent for that purpose.
(d)
Nothing in this Agreement shall oblige the Facility Agent or the Arranger to carry out:

(i)
any "know your customer" or other checks in relation to any person; or

(ii)
any check on the extent to which any transaction contemplated by this Agreement might be unlawful for any Finance Party,
on behalf of any Finance Party and each Finance Party confirms to the Facility Agent and the Arranger that it is solely responsible for any such checks it is required to carry out and that it may not rely on any statement in relation to such checks made by the Facility Agent or the Arranger.
(e)
Without prejudice to any provision of any Finance Document excluding or limiting the Facility Agent's liability, any liability of the Facility Agent arising under or in connection with any Transaction Document or the Security Property shall be limited to the amount of actual loss which has been finally judicially determined to have been suffered (as determined by reference to the date of default of the Facility Agent or, if later, the date on which the loss arises as a result of such default) but without reference to any special conditions or circumstances known to the Facility Agent at any time which increase the amount of that loss. In no event shall the Facility Agent be liable for any loss of profits, goodwill, reputation, business opportunity or anticipated saving, or for special, punitive, indirect or consequential damages, whether or not the Facility Agent has been advised of the possibility of such loss or damages.
29.12
Lenders' indemnity to the Facility Agent
(a)
Each Lender shall (in proportion to its share of the Total Commitments or, if the Total Commitments are then zero, to its share of the Total Commitments immediately prior to their reduction to zero) indemnify the Facility Agent, within three Business Days of demand, against any cost, loss or liability incurred by the Facility Agent (otherwise than by reason of the Facility Agent's gross negligence or wilful misconduct) (or, in the case of any cost, loss or liability pursuant to Clause 33.11 ( Disruption to Payment Systems etc. ) notwithstanding the Facility Agent's negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Facility Agent) in acting as Facility Agent under
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the Finance Documents (unless the Facility Agent has been reimbursed by a Transaction Obligor pursuant to a Finance Document).
(b)
Subject to paragraph (c) below, the Borrower shall immediately on demand reimburse any Lender for any payment that Lender makes to the Facility Agent pursuant to paragraph (a) above.
(c)
Paragraph (b) above shall not apply to the extent that the indemnity payment in respect of which the Lender claims reimbursement relates to a liability of the Facility Agent to an Obligor.
29.13
Resignation of the Facility Agent
(a)
The Facility Agent may resign and appoint one of its Affiliates as successor by giving notice to the other Finance Parties and the Borrower.
(b)
Alternatively, the Facility Agent may resign by giving 30 days' notice to the other Finance Parties and the Borrower, in which case the Majority Lenders may appoint a successor Facility Agent.
(c)
If the Majority Lenders have not appointed a successor Facility Agent in accordance with paragraph (b) above within 20 days after notice of resignation was given, the retiring Facility Agent may appoint a successor Facility Agent.
(d)
If the Facility Agent wishes to resign because (acting reasonably) it has concluded that it is no longer appropriate for it to remain as agent and the Facility Agent is entitled to appoint a successor Facility Agent under paragraph (c) above, the Facility Agent may (if it concludes (acting reasonably) that it is necessary to do so in order to persuade the proposed successor Facility Agent to become a party to this Agreement as Facility Agent) agree with the proposed successor Facility Agent amendments to this Clause 29 ( The Facility Agent, the Arranger and the Reference Banks ) and any other term of this Agreement dealing with the rights or obligations of the Facility Agent consistent with then current market practice for the appointment and protection of corporate trustees together with any reasonable amendments to the agency fee payable under this Agreement which are consistent with the successor Facility Agent's normal fee rates and those amendments will bind the Parties.
(e)
The retiring Facility Agent shall make available to the successor Facility Agent such documents and records and provide such assistance as the successor Facility Agent may reasonably request for the purposes of performing its functions as Facility Agent under the Finance Documents.  The Borrower shall, within three Business Days of demand, reimburse the retiring Facility Agent for the amount of all costs and expenses (including legal fees) properly incurred by it in making available such documents and records and providing such assistance.
(f)
The Facility Agent's resignation notice shall only take effect upon the appointment of a successor.
(g)
Upon the appointment of a successor, the retiring Facility Agent shall be discharged from any further obligation in respect of the Finance Documents (other than its obligations under paragraph (e) above) but shall remain entitled to the benefit of Clause 14.4 ( Indemnity to the Facility Agent ) and this Clause 29 ( The Facility Agent, the Arranger and the Reference Banks ) and any other provisions of a Finance Document which are expressed to limit or exclude its liability (or to indemnify it) in acting as Facility Agent.  Any fees for the account of the retiring Facility Agent shall cease to accrue from (and shall be payable on that date).  Any successor and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party.
(h)
The Majority Lenders may, by notice to the Facility Agent, require it to resign in accordance with paragraph (b) above.  In this event, the Facility Agent shall resign in accordance with
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paragraph (b) above but the cost referred to in paragraph (e) above shall be for the account of the Borrower.
(i)
The consent of the Borrower (or any other Transaction Obligor) is not required for an assignment or transfer of rights and/or obligations by the Facility Agent.
29.14
Confidentiality
(a)
In acting as Facility Agent for the Finance Parties, the Facility Agent shall be regarded as acting through its agency division which shall be treated as a separate entity from any other of its divisions or departments.
(b)
If information is received by a division or department of the Facility Agent other than the division or department responsible for complying with the obligations assumed by it under the Finance Documents, that information may be treated as confidential to that division or department, and the Facility Agent shall not be deemed to have notice of it nor shall it be obliged to disclose such information to any Party.
(c)
Notwithstanding any other provision of any Finance Document to the contrary, neither the Facility Agent nor the Arranger is obliged to disclose to any other person (i) any confidential information or (ii) any other information if the disclosure would, or might in its reasonable opinion, constitute a breach of any law or regulation or a breach of a fiduciary duty.
29.15
Relationship with the other Finance Parties
(a)
Subject to Clause 27.9 ( Pro rata interest settlement ), the Facility Agent may treat the person shown in its records as Lender at the opening of business (in the place of the Facility Agent's principal office as notified to the Finance Parties from time to time) as the Lender acting through its Facility Office:

(i)
entitled to or liable for any payment due under any Finance Document on that day; and

(ii)
entitled to receive and act upon any notice, request, document or communication or make any decision or determination under any Finance Document made or delivered on that day,
unless it has received not less than five Business Days' prior notice from that Lender to the contrary in accordance with the terms of this Agreement.
(b)
Each Finance Party shall supply the Facility Agent with any information that the Security Agent may reasonably specify (through the Facility Agent) as being necessary or desirable to enable the Security Agent to perform its functions as Security Agent.  Each Finance Party shall deal with the Security Agent exclusively through the Facility Agent and shall not deal directly with the Security Agent and any reference to any instructions being given by or sought from any Finance Party or group of Finance Parties by or to the Security Agent in this Agreement must be given or sought through the Facility Agent.
(c)
Any Lender may by notice to the Facility Agent appoint a person to receive on its behalf all notices, communications, information and documents to be made or despatched to that Lender under the Finance Documents.  Such notice shall contain the address and (where communication by electronic mail or other electronic means is permitted under Clause 36.5 ( Electronic communication )) electronic mail address and/or any other information required to enable the transmission of information by that means (and, in each case, the department or officer, if any, for whose attention communication is to be made) and be treated as a notification of a substitute address, electronic mail address (or such other information), department and officer by that Lender for the purposes of Clause 36.2 ( Addresses ) and sub-paragraph (ii) of paragraph (a) of Clause 36.5 ( Electronic communication ) and the Facility Agent
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shall be entitled to treat such person as the person entitled to receive all such notices, communications, information and documents as though that person were that Lender.
29.16
Credit appraisal by the Finance Parties
Without affecting the responsibility of any Transaction Obligor for information supplied by it or on its behalf in connection with any Transaction Document, each Finance Party confirms to the Facility Agent and the Arranger that it has been, and will continue to be, solely responsible for making its own independent appraisal and investigation of all risks arising under, or in connection with, any Transaction Document including but not limited to:
(a)
the financial condition, status and nature of each Transaction Obligor;
(b)
the legality, validity, effectiveness, adequacy or enforceability of any Transaction Document, the Security Property and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Transaction Document or the Security Property;
(c)
whether that Finance Party has recourse, and the nature and extent of that recourse, against any Party or any of its respective assets under, or in connection with, any Transaction Document, the Security Property, the transactions contemplated by the Transaction Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Transaction Document or the Security Property;
(d)
the adequacy, accuracy or completeness of any information provided by the Facility Agent, any Party or by any other person under, or in connection with, any Transaction Document, the transactions contemplated by any Transaction Document or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Transaction Document; and
(e)
the right or title of any person in or to or the value or sufficiency of any part of the Security Assets, the priority of any of the Transaction Security or the existence of any Security affecting the Security Assets.
29.17
Facility Agent's management time
If a Potential Event of Default or an Event of Default has occurred and is continuing, any amount payable to the Facility Agent under Clause 14.4 ( Indemnity to the Facility Agent ), Clause 16 ( Costs and Expenses ) and Clause 29.12 ( Lenders' indemnity to the Facility Agent ) shall include the cost of utilising the Facility Agent's management time or other resources and will be calculated on the basis of such reasonable daily or hourly rates as the Facility Agent may notify to the Borrower and the other Finance Parties, and is in addition to any fee paid or payable to the Facility Agent under Clause 11 ( Fees ).  The Facility Agent shall as soon as reasonably practicable notify the Borrower in writing of any extraordinary management time which the Facility Agent is envisaging to spend and will deliver a budget to the Borrower in respect of such extraordinary management time.
29.18
Deduction from amounts payable by the Facility Agent
If any Party owes an amount to the Facility Agent under the Finance Documents, the Facility Agent may, after giving notice to that Party, deduct an amount not exceeding that amount from any payment to that Party which the Facility Agent would otherwise be obliged to make under the Finance Documents and apply the amount deducted in or towards satisfaction of
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the amount owed.  For the purposes of the Finance Documents that Party shall be regarded as having received any amount so deducted.
29.19
Reliance and engagement letters
Each Secured Party confirms that each of the Arranger and the Facility Agent has authority to accept on its behalf (and ratifies the acceptance on its behalf of any letters or reports already accepted by the Arranger or the Facility Agent) the terms of any reliance letter or engagement letters or any reports or letters provided by accountants, auditors or providers of due diligence reports in connection with the Finance Documents or the transactions contemplated in the Finance Documents and to bind it in respect of those, reports or letters and to sign such letters on its behalf and further confirms that it accepts the terms and qualifications set out in such letters.
29.20
Full freedom to enter into transactions
Without prejudice to Clause 29.7 ( Business with the Transaction Obligors ) or any other provision of a Finance Document and notwithstanding any rule of law or equity to the contrary, the Facility Agent shall be absolutely entitled:
(a)
to enter into and arrange banking, derivative, investment and/or other transactions of every kind with or affecting any Transaction Obligor or any person who is party to, or referred to in, a Finance Document (including, but not limited to, any interest or currency swap or other transaction, whether related to this Agreement or not, and acting as syndicate agent and/or security agent for, and/or participating in, other facilities to such Transaction Obligor or any person who is party to, or referred to in, a Finance Document);
(b)
to deal in and enter into and arrange transactions relating to:

(i)
any securities issued or to be issued by any Transaction Obligor or any other person; or

(ii)
any options or other derivatives in connection with such securities; and
(c)
to provide advice or other services to the Borrower or any person who is a party to, or referred to in, a Finance Document,
and, in particular, the Facility Agent shall be absolutely entitled, in proposing, evaluating, negotiating, entering into and arranging all such transactions and in connection with all other matters covered by paragraphs (a), (b) and (c) above, to use (subject only to insider dealing legislation) any information or opportunity, howsoever acquired by it, to pursue its own interests exclusively, to refrain from disclosing such dealings, transactions or other matters or any information acquired in connection with them and to retain for its sole benefit all profits and benefits derived from the dealings transactions or other matters.
29.21
Role of Reference Banks
(a)
No Reference Bank is under any obligation to provide a quotation or any other information to the Facility Agent.
(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.
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(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 29.21 ( Role of Reference Banks ) subject to Clause 1.5 ( Third party rights ) and the provisions of the Third Parties Act.
29.22
Third Party Reference Banks
A Reference Bank which is not a Party may rely on Clause 29.21 ( Role of Reference Banks ), Clause 42.3 ( Other exceptions ) and Clause 44 ( Confidentiality of Funding Rates and Reference Bank Quotations ) subject to Clause 1.5 ( Third party rights ) and the provisions of the Third Parties Act.
30
THE SECURITY AGENT

30.1
Trust
(a)
The Security Agent declares that it holds the Security Property on trust for the Secured Parties on the terms contained in this Agreement and shall deal with the Security Property in accordance with this Clause 30 ( The Security Agent ) and the other provisions of the Finance Documents.
(b)
Each other Finance Party authorises the Security Agent to perform the duties, obligations and responsibilities and to exercise the rights, powers, authorities and discretions specifically given to the Security Agent under, or in connection with, the Finance Documents together with any other incidental rights, powers, authorities and discretions.
30.2
Parallel Debt (Covenant to pay the Security Agent)
(a)
Each Obligor irrevocably and unconditionally undertakes to pay to the Security Agent its Parallel Debt which shall be amounts equal to, and in the currency or currencies of, its Corresponding Debt.
(b)
The Parallel Debt of an Obligor:

(i)
shall become due and payable at the same time as its Corresponding Debt;

(ii)
is independent and separate from, and without prejudice to, its Corresponding Debt.
(c)
For purposes of this Clause 30.2 ( Parallel Debt (Covenant to pay the Security Agent) ), the Security Agent:

(i)
is the independent and separate creditor of each Parallel Debt;

(ii)
acts in its own name and not as agent, representative or trustee of the Finance Parties and its claims in respect of each Parallel Debt shall not be held on trust; and

(iii)
shall have the independent and separate right to demand payment of each Parallel Debt in its own name (including, without limitation, through any suit, execution, enforcement of security, recovery of guarantees and applications for and voting in any kind of insolvency proceeding).
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(d)
The Parallel Debt of an Obligor shall be:

(i)
decreased to the extent that its Corresponding Debt has been irrevocably and unconditionally paid or discharged; and

(ii)
increased to the extent that its Corresponding Debt has increased,
and the Corresponding Debt of an Obligor shall be:

(A)
decreased to the extent that its Parallel Debt has been irrevocably and unconditionally paid or discharged; and

(B)
increased to the extent that its Parallel Debt has increased,
in each case provided that the Parallel Debt of an Obligor shall never exceed its Corresponding Debt.
(e)
All amounts received or recovered by the Security Agent in connection with this Clause 30.2 ( Parallel Debt (Covenant to pay the Security Agent) ) to the extent permitted by applicable law, shall be applied in accordance with Clause 33.5 ( Application of receipts; partial payments ).
(f)
This Clause 30.2 ( Parallel Debt (Covenant to pay the Security Agent) ) shall apply, with any necessary modifications, to each Finance Document.
30.3
Enforcement through Security Agent only
The Secured Parties shall not have any independent power to enforce, or have recourse to, any of the Transaction Security or to exercise any right, power, authority or discretion arising under the Security Documents except through the Security Agent.
30.4
Instructions
(a)
The Security Agent shall:

(i)
unless a contrary indication appears in a Finance Document, exercise or refrain from exercising any right, power, authority or discretion vested in it as Security Agent in accordance with any instructions given to it by:

(A)
all Lenders (or the Facility Agent on their behalf) if the relevant Finance Document stipulates the matter is an all Lender decision; and

(B)
in all other cases, the Majority Lenders (or the Facility Agent on their behalf); and

(ii)
not be liable for any act (or omission) if it acts (or refrains from acting) in accordance with sub-paragraph (i) above (or if this Agreement stipulates the matter is a decision for any other Finance Party or group of Finance Parties, in accordance with instructions given to it by that Finance Party or group of Finance Parties).
(b)
The Security Agent shall be entitled to request instructions, or clarification of any instruction, from the Majority Lenders (or the Facility Agent on their behalf) (or, if the relevant Finance Document stipulates the matter is a decision for any other Finance Party or group of Finance Parties, from that Finance Party or group of Finance Parties) as to whether, and in what manner, it should exercise or refrain from exercising any right, power, authority or discretion and the Security Agent may refrain from acting unless and until it receives any such instructions or clarification that it has requested.
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(c)
Save in the case of decisions stipulated to be a matter for any other Finance Party or group of Finance Parties under the relevant Finance Document and unless a contrary indication appears in a Finance Document, any instructions given to the Security Agent by the Majority Lenders shall override any conflicting instructions given by any other Parties and will be binding on all Finance Parties.
(d)
Paragraph (a) above shall not apply:

(i)
where a contrary indication appears in a Finance Document;

(ii)
where a Finance Document requires the Security Agent to act in a specified manner or to take a specified action;

(iii)
in respect of any provision which protects the Security Agent's own position in its personal capacity as opposed to its role of Security Agent for the relevant Secured Parties.

(iv)
in respect of the exercise of the Security Agent's discretion to exercise a right, power or authority under any of:

(A)
Clause 30.28 ( Application of receipts );

(B)
Clause 30.29 ( Permitted Deductions ); and

(C)
Clause 30.30 ( Prospective liabilities ).
(e)
If giving effect to instructions given by the Majority Lenders would in the Security Agent's opinion have an effect equivalent to an amendment or waiver referred to in Clause 42 ( Amendments and Waivers ), the Security Agent shall not act in accordance with those instructions unless consent to it so acting is obtained from each Party (other than the Security Agent) whose consent would have been required in respect of that amendment or waiver.
(f)
In exercising any discretion to exercise a right, power or authority under the Finance Documents where either:

(i)
it has not received any instructions as to the exercise of that discretion; or

(ii)
the exercise of that discretion is subject to sub-paragraph (iv) of paragraph (d) above,
the Security Agent shall do so having regard to the interests of all the Secured Parties.
(g)
The Security Agent may refrain from acting in accordance with any instructions of any Finance Party or group of Finance Parties until it has received any indemnification and/or security that it may in its discretion require (which may be greater in extent than that contained in the Finance Documents and which may include payment in advance) for any cost, loss or liability (together with any applicable VAT) which it may incur in complying with those instructions.
(h)
Without prejudice to the remainder of this Clause 30.4 ( Instructions ), in the absence of instructions, the Security Agent may (but shall not be obliged to) take such action in the exercise of its powers and duties under the Finance Documents as it considers in its discretion to be appropriate.
(i)
The Security Agent is not authorised to act on behalf of a Finance Party (without first obtaining that Finance Party's consent) in any legal or arbitration proceedings relating to any Finance Document.  This paragraph (i) shall not apply to any legal or arbitration proceeding relating to the perfection, preservation or protection of rights under the Security Documents or enforcement of the Transaction Security or Security Documents.
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30.5
Duties of the Security Agent
(a)
The Security Agent's duties under the Finance Documents are solely mechanical and administrative in nature.
(b)
The Security Agent shall promptly forward to a Party the original or a copy of any document which is delivered to the Security Agent for that Party by any other Party.
(c)
Except where a Finance Document specifically provides otherwise, the Security Agent is not obliged to review or check the adequacy, accuracy or completeness of any document it forwards to another Party.
(d)
If the Security Agent receives notice from a Party referring to any Finance Document, describing a Default and stating that the circumstance described is a Default, it shall promptly notify the other Finance Parties.
(e)
The Security Agent shall have only those duties, obligations and responsibilities expressly specified in the Finance Documents to which it is expressed to be a party (and no others shall be implied).
30.6
No fiduciary duties
(a)
Nothing in any Finance Document constitutes the Security Agent as an agent, trustee or fiduciary of any Transaction Obligor.
(b)
The Security Agent shall not be bound to account to any other Secured Party for any sum or the profit element of any sum received by it for its own account.
30.7
Business with a Transaction Obligor
The Security Agent may accept deposits from, lend money to, and generally engage in any kind of banking or other business with, any Transaction Obligor.
30.8
Rights and discretions
(a)
The Security Agent may:

(i)
rely on any representation, communication, notice or document believed by it to be genuine, correct and appropriately authorised;

(ii)
assume that:

(A)
any instructions received by it from the Majority Lenders, any Finance Parties or any group of Finance Parties are duly given in accordance with the terms of the Finance Documents;

(B)
unless it has received notice of revocation, that those instructions have not been revoked;

(C)
if it receives any instructions to act in relation to the Transaction Security, that all applicable conditions under the Finance Documents for so acting have been satisfied; and

(iii)
rely on a certificate from any person:

(A)
as to any matter of fact or circumstance which might reasonably be expected to be within the knowledge of that person; or
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(B)
to the effect that such person approves of any particular dealing, transaction, step, action or thing,
as sufficient evidence that that is the case and, in the case of paragraph (A) above, may assume the truth and accuracy of that certificate.
(b)
The Security Agent shall be entitled to carry out all dealings with the other Finance Parties through the Facility Agent and may give to the Facility Agent any notice or other communication required to be given by the Security Agent to any Finance Party.
(c)
The Security Agent may assume (unless it has received notice to the contrary in its capacity as security agent for the Secured Parties) that:

(i)
no Default has occurred;

(ii)
any right, power, authority or discretion vested in any Party or any group of Finance Parties has not been exercised; and

(iii)
any notice or request made by the Borrower (other than a Utilisation Request or a Selection Notice) is made on behalf of and with the consent and knowledge of all the Transaction Obligors.
(d)
The Security Agent may engage and pay for the advice or services of any lawyers, accountants, tax advisers, surveyors or other professional advisers or experts.
(e)
Without prejudice to the generality of paragraph (c) above or paragraph (f) below, the Security Agent may at any time engage and pay for the services of any lawyers to act as independent counsel to the Security Agent (and so separate from any lawyers instructed by the Facility Agent or the Lenders) if the Security Agent in its reasonable opinion deems this to be desirable.
(f)
The Security Agent may rely on the advice or services of any lawyers, accountants, tax advisers, surveyors or other professional advisers or experts (whether obtained by the Security Agent or by any other Party) and shall not be liable for any damages, costs or losses to any person, any diminution in value or any liability whatsoever arising as a result of its so relying.
(g)
The Security Agent may act in relation to the Finance Documents and the Security Property through its officers, employees and agents and shall not:

(i)
be liable for any error of judgment made by any such person; or

(ii)
be bound to supervise, or be in any way responsible for any loss incurred by reason of misconduct, omission or default on the part of any such person,
unless such error or such loss was directly caused by the Security Agent's gross negligence or wilful misconduct.
(h)
Unless a Finance Document expressly provides otherwise the Security Agent may disclose to any other Party any information it reasonably believes it has received as security agent under the Finance Documents.
(i)
Notwithstanding any other provision of any Finance Document to the contrary, the Security Agent is not obliged to do or omit to do anything if it would or might, in its reasonable opinion, constitute a breach of any law or regulation or a breach of a fiduciary duty or duty of confidentiality.
(j)
Notwithstanding any provision of any Finance Document to the contrary, the Security Agent is not obliged to expend or risk its own funds or otherwise incur any financial liability in the
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performance of its duties, obligations or responsibilities or the exercise of any right, power, authority or discretion if it has grounds for believing the repayment of such funds or adequate indemnity against, or security for, such risk or liability is not reasonably assured to it.
30.9
Responsibility for documentation
None of the Security Agent, any Receiver or Delegate is responsible or liable for:
(a)
the adequacy, accuracy or completeness of any information (whether oral or written) supplied by the Facility Agent, the Security Agent, the Arranger, a Transaction Obligor or any other person in, or in connection with, any Transaction Document or the transactions contemplated in the Transaction Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Transaction Document;
(b)
the legality, validity, effectiveness, adequacy or enforceability of any Transaction Document or the Security Property or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with, any Transaction Document or the Security Property; or
(c)
any determination as to whether any information provided or to be provided to any Secured Party is non-public information the use of which may be regulated or prohibited by applicable law or regulation relating to insider dealing or otherwise.
30.10
No duty to monitor
The Security Agent shall not be bound to enquire:
(a)
whether or not any Default has occurred;
(b)
as to the performance, default or any breach by any Transaction Obligor of its obligations under any Transaction Document; or
(c)
whether any other event specified in any Transaction Document has occurred.
30.11
Exclusion of liability
(a)
Without limiting paragraph (b) below (and without prejudice to any other provision of any Finance Document excluding or limiting the liability of the Security Agent or any Receiver or Delegate), none of the Security Agent nor any Receiver or Delegate will be liable for:

(i)
any damages, costs or losses to any person, any diminution in value, or any liability whatsoever arising as a result of taking or not taking any action under or in connection with any Transaction Document or the Security Property, unless directly caused by its gross negligence or wilful misconduct;

(ii)
exercising, or not exercising, any right, power, authority or discretion given to it by, or in connection with, any Transaction Document, the Security Property or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with, any Transaction Document or the Security Property; or

(iii)
any shortfall which arises on the enforcement or realisation of the Security Property; or

(iv)
without prejudice to the generality of paragraphs (i)  to  (iii) above, any damages, costs or losses to any person, any diminution in value or any liability whatsoever arising as a result of:
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(A)
any act, event or circumstance not reasonably within its control; or

(B)
the general risks of investment in, or the holding of assets in, any jurisdiction,
including (in each case and without limitation) such damages, costs, losses, diminution in value or liability arising as a result of nationalisation, expropriation or other governmental actions; any regulation, currency restriction, devaluation or fluctuation; market conditions affecting the execution or settlement of transactions or the value of assets (including any Disruption Event); breakdown, failure or malfunction of any third party transport, telecommunications, computer services or systems; natural disasters or acts of God; war, terrorism, insurrection or revolution; or strikes or industrial action.
(b)
No Party other than the Security Agent, that Receiver or that Delegate (as applicable) may take any proceedings against any officer, employee or agent of the Security Agent, a Receiver or a Delegate in respect of any claim it might have against the Security Agent, a Receiver or a 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 and any officer, employee or agent of the Security Agent, a Receiver or a Delegate may rely on this Clause subject to Clause 1.5 ( Third party rights ) and the provisions of the Third Parties Act.
(c)
The Security Agent will not be liable for any delay (or any related consequences) in crediting an account with an amount required under the Finance Documents to be paid by the Security Agent if the Security Agent has taken all necessary steps as soon as reasonably practicable to comply with the regulations or operating procedures of any recognised clearing or settlement system used by the Security Agent for that purpose.
(d)
Nothing in this Agreement shall oblige the Security Agent to carry out:

(i)
any "know your customer" or other checks in relation to any person; or

(ii)
any check on the extent to which any transaction contemplated by this Agreement might be unlawful for any Finance Party,
on behalf of any Finance Party and each Finance Party confirms to the Security Agent that it is solely responsible for any such checks it is required to carry out and that it may not rely on any statement in relation to such checks made by the Security Agent.
(e)
Without prejudice to any provision of any Finance Document excluding or limiting the liability of the Security Agent or any Receiver or Delegate, any liability of the Security Agent or any Receiver or Delegate arising under or in connection with any Transaction Document or the Security Property shall be limited to the amount of actual loss which has been finally judicially determined to have been suffered (as determined by reference to the date of default of the Security Agent, Receiver or Delegate or, if later, the date on which the loss arises as a result of such default) but without reference to any special conditions or circumstances known to the Security Agent, any Receiver or Delegate at any time which increase the amount of that loss. In no event shall the Security Agent, any Receiver or Delegate be liable for any loss of profits, goodwill, reputation, business opportunity or anticipated saving, or for special, punitive, indirect or consequential damages, whether or not the Security Agent, the Receiver or Delegate has been advised of the possibility of such loss or damages.
30.12
Lenders' indemnity to the Security Agent
(a)
Each Lender shall (in proportion to its share of the Total Commitments or, if the Total Commitments are then zero, to its share of the Total Commitments immediately prior to their reduction to zero) indemnify the Security Agent and every Receiver, within three Business Days of demand, against any cost, loss or liability incurred by any of them (otherwise than by reason
112

of the Security Agent's or Receiver's gross negligence or wilful misconduct) in acting as Security Agent or Receiver under the Finance Documents (unless the Security Agent or Receiver has been reimbursed by a Transaction Obligor pursuant to a Finance Document).
(b)
Subject to paragraph (c) below, the Borrower shall immediately on demand reimburse any Lender for any payment that Lender makes to the Security Agent pursuant to paragraph (a) above.
(c)
Paragraph (b) above shall not apply to the extent that the indemnity payment in respect of which the Lender claims reimbursement relates to a liability of the Security Agent to an Obligor.
30.13
Resignation of the Security Agent
(a)
The Security Agent may resign and appoint one of its Affiliates acting through an office as successor by giving notice to the other Finance Parties and the Borrower.
(b)
Alternatively, the Security Agent may resign by giving 30 days' notice to the other Finance Parties and the Borrower, in which case the Majority Lenders may appoint a successor Security Agent.
(c)
If the Majority Lenders have not appointed a successor Security Agent in accordance with paragraph (b) above within 20 days after notice of resignation was given, the retiring Security Agent may appoint a successor Security Agent.
(d)
The retiring Security Agent shall make available to the successor Security Agent such documents and records and provide such assistance as the successor Security Agent may reasonably request for the purposes of performing its functions as Security Agent under the Finance Documents.  The Borrower shall, within three Business Days of demand, reimburse the retiring Security Agent for the amount of all costs and expenses (including legal fees) properly incurred by it in making available such documents and records and providing such assistance.
(e)
The Security Agent's resignation notice shall only take effect upon:

(i)
the appointment of a successor; and

(ii)
the transfer, by way of a document expressed as a deed, of all the Security Property to that successor.
(f)
Upon the appointment of a successor, the retiring Security Agent shall be discharged, by way of a document executed as a deed, from any further obligation in respect of the Finance Documents (other than its obligations under paragraph (b) of Clause 30.25 ( Winding up of trust ) and paragraph (d) above) but shall remain entitled to the benefit of Clause 14.5 ( Indemnity to the Security Agent ) and this Clause 30 ( The Security Agent ) and any other provisions of a Finance Document which are expressed to limit or exclude its liability (or to indemnify it) in acting as Security Agent.  Any fees for the account of the retiring Security Agent shall cease to accrue from (and shall be payable on that date).  Any successor and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party.
(g)
The Majority Lenders may, by notice to the Security Agent, require it to resign in accordance with paragraph (b) above.  In this event, the Security Agent shall resign in accordance with paragraph (b) above but the cost referred to in paragraph (d) above shall be for the account of the Borrower.
(h)
The consent of the Borrower (or any other Transaction Obligor) is not required for an assignment or transfer of rights and/or obligations by the Security Agent.
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30.14
Confidentiality
(a)
In acting as Security Agent for the Finance Parties, the Security Agent shall be regarded as acting through its trustee division which shall be treated as a separate entity from any other of its divisions or departments.
(b)
If information is received by a division or department of the Security Agent other than the division or department responsible for complying with the obligations assumed by it under the Finance Documents, that information may be treated as confidential to that division or department, and the Security Agent shall not be deemed to have notice of it nor shall it be obliged to disclose such information to any Party.
(c)
Notwithstanding any other provision of any Finance Document to the contrary, the Security Agent is not obliged to disclose to any other person (i) any confidential information or (ii) any other information if the disclosure would, or might in its reasonable opinion, constitute a breach of any law or regulation or a breach of a fiduciary duty.
30.15
Credit appraisal by the Finance Parties
Without affecting the responsibility of any Transaction Obligor for information supplied by it or on its behalf in connection with any Transaction Document, each Finance Party confirms to the Security Agent that it has been, and will continue to be, solely responsible for making its own independent appraisal and investigation of all risks arising under, or in connection with, any Transaction Document including but not limited to:
(a)
the financial condition, status and nature of each Transaction Obligor;
(b)
the legality, validity, effectiveness, adequacy or enforceability of any Transaction Document, the Security Property and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Transaction Document or the Security Property;
(c)
whether that Finance Party has recourse, and the nature and extent of that recourse, against any Party or any of its respective assets under, or in connection with, any Transaction Document, the Security Property, the transactions contemplated by the Transaction Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Transaction Document or the Security Property;
(d)
the adequacy, accuracy or completeness of any information provided by the Security Agent, any Party or by any other person under, or in connection with, any Transaction Document, the transactions contemplated by any Transaction Document or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Transaction Document; and
(e)
the right or title of any person in or to or the value or sufficiency of any part of the Security Assets, the priority of any of the Transaction Security or the existence of any Security affecting the Security Assets.
30.16
Security Agent's management time
(a)
If a Potential Event of Default or an Event of Default has occurred which is continuing, any amount payable to the Security Agent under Clause 14.5 ( Indemnity to the Security Agent ), Clause 16 ( Costs and Expenses ) and Clause 30.12 ( Lenders' indemnity to the Security Agent ) shall include the cost of utilising the Security Agent's management time or other resources and will be calculated on the basis of such reasonable daily or hourly rates as the Security Agent may notify to the Borrower and the other Finance Parties, and is in addition to any fee paid or
114

payable to the Security Agent under Clause 11 ( Fees ).  The Security Agent shall as soon as reasonably practicable notify the Borrower in writing of any extraordinary management time which the Security Agent is envisaging to spend and will deliver a budget to the Borrower in respect of such extraordinary management time.
(b)
Without prejudice to paragraph (a) above, in the event of:

(i)
a Default;

(ii)
the Security Agent being requested by a Transaction Obligor or the Majority Lenders to undertake duties which the Security Agent and the Borrower agree to be of an exceptional nature or outside the scope of the normal duties of the Security Agent under the Finance Documents; or

(iii)
the Security Agent and the Borrower agreeing that it is otherwise appropriate in the circumstances,
the Borrower shall pay to the Security Agent any additional remuneration (together with any applicable VAT) that may be agreed between them or determined pursuant to paragraph (c) below.
(c)
If the Security Agent and the Borrower fail to agree upon the nature of the duties, or upon the additional remuneration referred to in paragraph (b) above or whether additional remuneration is appropriate in the circumstances, any dispute shall be determined by an investment bank (acting as an expert and not as an arbitrator) selected by the Security Agent and approved by the Borrower or, failing approval, nominated (on the application of the Security Agent) by the President for the time being of the Law Society of England and Wales (the costs of the nomination and of the investment bank being payable by the Borrower) and the determination of any investment bank shall be final and binding upon the Parties.
30.17
Reliance and engagement letters
Each Secured Party confirms that the Security Agent has authority to accept on its behalf (and ratifies the acceptance on its behalf of any letters or reports already accepted by the Security Agent) the terms of any reliance letter or engagement letters or any reports or letters provided by accountants, auditors or providers of due diligence reports in connection with the Finance Documents or the transactions contemplated in the Finance Documents and to bind it in respect of those, reports or letters and to sign such letters on its behalf and further confirms that it accepts the terms and qualifications set out in such letters.
30.18
No responsibility to perfect Transaction Security
The Security Agent shall not be liable for any failure to:
(a)
require the deposit with it of any deed or document certifying, representing or constituting the title of any Transaction Obligor to any of the Security Assets;
(b)
obtain any licence, consent or other authority for the execution, delivery, legality, validity, enforceability or admissibility in evidence of any Finance Document or the Transaction Security;
(c)
register, file or record or otherwise protect any of the Transaction Security (or the priority of any of the Transaction Security) under any law or regulation or to give notice to any person of the execution of any Finance Document or of the Transaction Security;
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(d)
take, or to require any Transaction Obligor to take, any step to perfect its title to any of the Security Assets or to render the Transaction Security effective or to secure the creation of any ancillary Security under any law or regulation; or
(e)
require any further assurance in relation to any Security Document.
30.19
Insurance by Security Agent
(a)
The Security Agent shall not be obliged:

(i)
to insure any of the Security Assets;

(ii)
to require any other person to maintain any insurance; or

(iii)
to verify any obligation to arrange or maintain insurance contained in any Finance Document,
and the Security Agent shall not be liable for any damages, costs or losses to any person as a result of the lack of, or inadequacy of, any such insurance.
(b)
Where the Security Agent is named on any insurance policy as an insured party, it shall not be liable for any damages, costs or losses to any person as a result of its failure to notify the insurers of any material fact relating to the risk assumed by such insurers or any other information of any kind, unless the Majority Lenders request it to do so in writing and the Security Agent fails to do so within 14 days after receipt of that request.
30.20
Custodians and nominees
The Security Agent may appoint and pay any person to act as a custodian or nominee on any terms in relation to any asset of the trust as the Security Agent may determine, including for the purpose of depositing with a custodian this Agreement or any document relating to the trust created under this Agreement and the Security Agent shall not be responsible for any loss, liability, expense, demand, cost, claim or proceedings incurred by reason of the misconduct, omission or default on the part of any person appointed by it under this Agreement or be bound to supervise the proceedings or acts of any person.
30.21
Delegation by the Security Agent
(a)
Each of the Security Agent, any Receiver and any Delegate may, at any time, delegate by power of attorney or otherwise to any person for any period, all or any right, power, authority or discretion vested in it in its capacity as such.
(b)
That delegation may be made upon any terms and conditions (including the power to sub delegate) and subject to any restrictions that the Security Agent, that Receiver or that Delegate (as the case may be) may, in its discretion, think fit in the interests of the Secured Parties.
(c)
No Security Agent, Receiver or Delegate shall be bound to supervise, or be in any way responsible for any damages, costs or losses incurred by reason of any misconduct, omission or default on the part of any such delegate or sub delegate.
30.22
Additional Security Agents
(a)
The Security Agent may at any time appoint (and subsequently remove) any person to act as a separate trustee or as a co-trustee jointly with it:

(i)
if it considers that appointment to be in the interests of the Secured Parties; or
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(ii)
for the purposes of conforming to any legal requirement, restriction or condition which the Security Agent deems to be relevant; or

(iii)
for obtaining or enforcing any judgment in any jurisdiction,
and the Security Agent shall give prior notice to the Borrower and the Finance Parties of that appointment.
(b)
Any person so appointed shall have the rights, powers, authorities and discretions (not exceeding those given to the Security Agent under or in connection with the Finance Documents) and the duties, obligations and responsibilities that are given or imposed by the instrument of appointment.
(c)
The remuneration that the Security Agent may pay to that person, and any costs and expenses (together with any applicable VAT) incurred by that person in performing its functions pursuant to that appointment shall, for the purposes of this Agreement, be treated as costs and expenses incurred by the Security Agent.
30.23
Acceptance of title
The Security Agent shall be entitled to accept without enquiry, and shall not be obliged to investigate, any right and title that any Transaction Obligor may have to any of the Security Assets and shall not be liable for or bound to require any Transaction Obligor to remedy any defect in its right or title.
30.24
Releases
Upon a disposal of any of the Security Assets pursuant to the enforcement of the Transaction Security by a Receiver, a Delegate or the Security Agent, the Security Agent is irrevocably authorised (at the cost of the Obligors and without any consent, sanction, authority or further confirmation from any other Secured Party) to release, without recourse or warranty, that property from the Transaction Security and to execute any release of the Transaction Security or other claim over that asset and to issue any certificates of non-crystallisation of floating charges that may be required or desirable.
30.25
Winding up of trust
If the Security Agent, with the approval of the Facility Agent determines that:
(a)
all of the Secured Liabilities and all other obligations secured by the Security Documents have been fully and finally discharged; and
(b)
no Secured Party is under any commitment, obligation or liability (actual or contingent) to make advances or provide other financial accommodation to any Transaction Obligor pursuant to the Finance Documents,
then

(i)
the trusts set out in this Agreement shall be wound up and the Security Agent shall release, without recourse or warranty, all of the Transaction Security and the rights of the Security Agent under each of the Security Documents; and

(ii)
any Security Agent which has resigned pursuant to Clause 30.13 ( Resignation of the Security Agent ) shall release, without recourse or warranty, all of its rights under each Security Document.
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30.26
Powers supplemental to Trustee Acts
The rights, powers, authorities and discretions given to the Security Agent under or in connection with the Finance Documents shall be supplemental to the Trustee Act 1925 and the Trustee Act 2000 and in addition to any which may be vested in the Security Agent by law or regulation or otherwise.
30.27
Disapplication of Trustee Acts
Section 1 of the Trustee Act 2000 shall not apply to the duties of the Security Agent in relation to the trusts constituted by this Agreement and the other Finance Documents.  Where there are any inconsistencies between (i) the Trustee Acts 1925 and 2000 and (ii) the provisions of this Agreement and any other Finance Document, the provisions of this Agreement and any other Finance Document shall, to the extent permitted by law and regulation, prevail and, in the case of any inconsistency with the Trustee Act 2000, the provisions of this Agreement and any other Finance Document shall constitute a restriction or exclusion for the purposes of the Trustee Act 2000.
30.28
Application of receipts
All amounts from time to time received or recovered by the Security Agent pursuant to the terms of any Finance Document, under Clause 30.2 ( Parallel Debt (Covenant to pay the Security Agent) ) or in connection with the realisation or enforcement of all or any part of the Security Property (for the purposes of this Clause 30 ( The Security Agent ), the " Recoveries ") shall be held by the Security Agent on trust to apply them at any time as the Security Agent (in its discretion) sees fit, to the extent permitted by applicable law (and subject to the remaining provisions of this Clause 30 ( The Security Agent )), in the following order of priority:
(a)
in discharging any sums owing to the Security Agent (in its capacity as such) (other than pursuant to Clause 30.2 ( Parallel Debt (Covenant to pay the Security Agent) )) or any Receiver or Delegate;
(b)
in payment or distribution to the Facility Agent, on its behalf and on behalf of the other Secured Parties, for application towards the discharge of all sums due and payable by any Transaction Obligor under any of the Finance Documents in accordance with Clause 33.5 ( Application of receipts; partial payments );
(c)
if none of the Transaction Obligors is under any further actual or contingent liability under any Finance Document, in payment or distribution to any person to whom the Security Agent is obliged to pay or distribute in priority to any Transaction Obligor; and
(d)
the balance, if any, in payment or distribution to the relevant Transaction Obligor.
30.29
Permitted Deductions
The Security Agent may, in its discretion:
(a)
set aside by way of reserve amounts required to meet, and to make and pay, any deductions and withholdings (on account of Taxes or otherwise) which it is or may be required by any applicable law to make from any distribution or payment made by it under this Agreement; and
(b)
pay all Taxes which may be assessed against it in respect of any of the Security Property, or as a consequence of performing its duties, or by virtue of its capacity as Security Agent under any
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of the Finance Documents or otherwise (other than in connection with its remuneration for performing its duties under this Agreement).
30.30
Prospective liabilities
Following enforcement of any of the Transaction Security, the Security Agent may, in its discretion, or at the request of the Facility Agent, hold any Recoveries in an interest bearing suspense or impersonal account(s) in the name of the Security Agent with such financial institution (including itself) and for so long as the Security Agent shall think fit (the interest being credited to the relevant account) for later payment to the Facility Agent for application in accordance with Clause 30.28 ( Application of receipts ) in respect of:
(a)
any sum to the Security Agent, any Receiver or any Delegate; and
(b)
any part of the Secured Liabilities,
that the Security Agent or, in the case of paragraph (b) only, the Facility Agent, reasonably considers, in each case, might become due or owing at any time in the future.
30.31
Investment of proceeds
Prior to the payment of the proceeds of the Recoveries to the Facility Agent for application in accordance with Clause 30.28 ( Application of receipts ) the Security Agent may, in its discretion, hold all or part of those proceeds in an interest bearing suspense or impersonal account(s) in the name of the Security Agent with such financial institution (including itself) and for so long as the Security Agent shall think fit (the interest being credited to the relevant account) pending the payment from time to time of those moneys in the Security Agent's discretion in accordance with the provisions of Clause 30.28 ( Application of receipts ).
30.32
Currency conversion
(a)
For the purpose of, or pending the discharge of, any of the Secured Liabilities the Security Agent may convert any moneys received or recovered by the Security Agent from one currency to another, at a market rate of exchange.
(b)
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.
30.33
Good discharge
(a)
Any payment to be made in respect of the Secured Liabilities by the Security Agent may be made to the Facility Agent on behalf of the Secured Parties and any payment made in that way shall be a good discharge, to the extent of that payment, by the Security Agent.
(b)
The Security Agent is under no obligation to make the payments to the Facility Agent under paragraph (a) above in the same currency as that in which the obligations and liabilities owing to the relevant Finance Party are denominated.
30.34
Amounts received by Obligors
If any of the Obligors receives or recovers any amount which, under the terms of any of the Finance Documents, should have been paid to the Security Agent, that Obligor will hold the amount received or recovered on trust for the Security Agent and promptly pay that amount to the Security Agent for application in accordance with the terms of this Agreement.
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30.35
Application and consideration
In consideration for the covenants given to the Security Agent by each Obligor in relation to Clause 30.2 ( Parallel Debt (Covenant to pay the Security Agent) ), the Security Agent agrees with each Obligor to apply all moneys from time to time paid by such Obligor to the Security Agent in accordance with the foregoing provisions of this Clause 30 ( The Security Agent ).
30.36
Full freedom to enter into transactions
Without prejudice to Clause 30.7 ( Business with a Transaction Obligor ) or any other provision of a Finance Document and notwithstanding any rule of law or equity to the contrary, the Security Agent shall be absolutely entitled:
(a)
to enter into and arrange banking, derivative, investment and/or other transactions of every kind with or affecting any Transaction Obligor or any person who is party to, or referred to in, a Finance Document (including, but not limited to, any interest or currency swap or other transaction, whether related to this Agreement or not, and acting as syndicate agent and/or security agent for, and/or participating in, other facilities to such Transaction Obligor or any person who is party to, or referred to in, a Finance Document);
(b)
to deal in and enter into and arrange transactions relating to:

(i)
any securities issued or to be issued by any Transaction Obligor or any other person; or

(ii)
any options or other derivatives in connection with such securities; and
(c)
to provide advice or other services to the Borrower or any person who is a party to, or referred to in, a Finance Document,
and, in particular, the Security Agent shall be absolutely entitled, in proposing, evaluating, negotiating, entering into and arranging all such transactions and in connection with all other matters covered by paragraphs (a), (b) and (c) above, to use (subject only to insider dealing legislation) any information or opportunity, howsoever acquired by it, to pursue its own interests exclusively, to refrain from disclosing such dealings, transactions or other matters or any information acquired in connection with them and to retain for its sole benefit all profits and benefits derived from the dealings transactions or other matters.
31
CONDUCT OF BUSINESS BY THE FINANCE PARTIES

No provision of this Agreement will:
(a)
interfere with the right of any Finance Party to arrange its affairs (tax or otherwise) in whatever manner it thinks fit;
(b)
oblige any Finance Party 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 any Finance Party to disclose any information relating to its affairs (tax or otherwise) or any computations in respect of Tax.
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32
SHARING AMONG THE FINANCE PARTIES

32.1
Payments to Finance Parties
If a Finance Party (a " Recovering Finance Party ") receives or recovers any amount from a Transaction Obligor other than in accordance with Clause 33 ( Payment Mechanics )   (a " Recovered Amount ") and applies that amount to a payment due to it under the Finance Documents then:
(a)
the Recovering Finance Party shall, within three Business Days, notify details of the receipt or recovery, to the Facility Agent;
(b)
the Facility Agent shall determine whether the receipt or recovery is in excess of the amount the Recovering Finance Party would have been paid had the receipt or recovery been received or made by the Facility Agent and distributed in accordance with Clause 33 ( Payment Mechanics ), without taking account of any Tax which would be imposed on the Facility Agent in relation to the receipt, recovery or distribution; and
(c)
the Recovering Finance Party shall, within three Business Days of demand by the Facility Agent, pay to the Facility Agent an amount (the " Sharing Payment ") equal to such receipt or recovery less any amount which the Facility Agent determines may be retained by the Recovering Finance Party as its share of any payment to be made, in accordance with Clause 33.5 ( Application of receipts; partial payments ).
32.2
Redistribution of payments
The Facility Agent shall treat the Sharing Payment as if it had been paid by the relevant Transaction Obligor and distribute it among the Finance Parties (other than the Recovering Finance Party) (the " Sharing Finance Parties ") in accordance with Clause 33.5 ( Application of receipts; partial payments ) towards the obligations of that Transaction Obligor to the Sharing Finance Parties.
32.3
Recovering Finance Party's rights
On a distribution by the Facility Agent under Clause 32.2 ( Redistribution of payments ) of a payment received by a Recovering Finance Party from a Transaction Obligor, as between the relevant Transaction Obligor and the Recovering Finance Party, an amount of the Recovered Amount equal to the Sharing Payment will be treated as not having been paid by that Transaction Obligor.
32.4
Reversal of redistribution
If any part of the Sharing Payment received or recovered by a Recovering Finance Party becomes repayable and is repaid by that Recovering Finance Party, then:
(a)
each Sharing Finance Party shall, upon request of the Facility Agent, pay to the Facility Agent for the account of that Recovering Finance Party an amount equal to the appropriate part of its share of the Sharing Payment (together with an amount as is necessary to reimburse that Recovering Finance Party for its proportion of any interest on the Sharing Payment which that Recovering Finance Party is required to pay) (the " Redistributed Amount "); and
(b)
as between the relevant Transaction Obligor and each relevant Sharing Finance Party, an amount equal to the relevant Redistributed Amount will be treated as not having been paid by that Transaction Obligor.
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32.5
Exceptions
(a)
This Clause 32 ( Sharing among the Finance Parties ) shall not apply to the extent that the Recovering Finance Party would not, after making any payment pursuant to this Clause, have a valid and enforceable claim against the relevant Transaction Obligor.
(b)
A Recovering Finance Party is not obliged to share with any other Finance Party any amount which the Recovering Finance Party has received or recovered as a result of taking legal or arbitration proceedings, if:

(i)
it notified that other Finance Party of the legal or arbitration proceedings; and

(ii)
that other Finance Party had an opportunity to participate in those legal or arbitration proceedings but did not do so as soon as reasonably practicable having received notice and did not take separate legal or arbitration proceedings.




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SECTION 11

ADMINISTRATION
33
PAYMENT MECHANICS

33.1
Payments to the Facility Agent
(a)
On each date on which a Transaction Obligor or a Lender is required to make a payment under a Finance Document, that Transaction Obligor or Lender shall make an amount equal to such payment available to the Facility Agent (unless a contrary indication appears in a Finance Document) for value on the due date at the time and in such funds specified by the Facility Agent as being customary at the time for settlement of transactions in the relevant currency in the place of payment.
(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 Facility Agent) and with such bank as the Facility Agent, in each case, specifies.
33.2
Distributions by the Facility Agent
Each payment received by the Facility Agent under the Finance Documents for another Party shall, subject to Clause 33.3 ( Distributions to a Transaction Obligor ) and Clause 33.4 ( Clawback and pre-funding ) be made available by the Facility Agent as soon as practicable after receipt to the Party entitled to receive payment in accordance with this Agreement (in the case of a Lender, for the account of its Facility Office), to such account as that Party may notify to the Facility Agent by not less than five Business Days' notice with a bank specified by that Party in the principal financial centre of the country of that currency (or, in relation to euro, in the principal financial centre of a Participating Member State or London), as specified by that Party or, in the case of an Advance, to such account of such person as may be specified by the Borrower in a Utilisation Request.
33.3
Distributions to a Transaction Obligor
The Facility Agent may (with the consent of the Transaction Obligor or in accordance with Clause 34 ( Set-Off )) apply any amount received by it for that Transaction Obligor in or towards payment (on the date and in the currency and funds of receipt) of any amount due from that Transaction Obligor under the Finance Documents or in or towards purchase of any amount of any currency to be so applied.
33.4
Clawback and pre-funding
(a)
Where a sum is to be paid to the Facility Agent under the Finance Documents for another Party, the Facility Agent is not obliged to pay that sum to that other Party (or to enter into or perform any related exchange contract) until it has been able to establish to its satisfaction that it has actually received that sum.
(b)
Unless paragraph (c) below applies, if the Facility Agent pays an amount to another Party and it proves to be the case that the Facility Agent had not actually received that amount, then the Party to whom that amount (or the proceeds of any related exchange contract) was paid by the Facility Agent shall on demand refund the same to the Facility Agent together with interest on that amount from the date of payment to the date of receipt by the Facility Agent, calculated by the Facility Agent to reflect its cost of funds.
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(c)
If the Facility Agent has notified the Lenders that it is willing to make available amounts for the account of the Borrower before receiving funds from the Lenders then if and to the extent that the Facility Agent does so but it proves to be the case that it does not then receive funds from a Lender in respect of a sum which it paid to the Borrower:

(i)
the Facility Agent shall notify the Borrower of that Lender's identity and the Borrower shall on demand refund it to the Facility Agent; and

(ii)
the Lender by whom those funds should have been made available or, if the Lender fails to do so, the Borrower shall on demand pay to the Facility Agent the amount (as certified by the Facility Agent) which will indemnify the Facility Agent against any funding cost incurred by it as a result of paying out that sum before receiving those funds from that Lender.
33.5
Application of receipts; partial payments
(a)
If the Facility Agent or the Security Agent (as applicable) receives a payment that is insufficient to discharge all the amounts then due and payable by a Transaction Obligor under the Finance Documents, the Facility Agent or the Security Agent (as applicable) shall apply that payment towards the obligations of that Transaction Obligor under the Finance Documents in the following order:

(i)
first , in or towards payment pro rata of any unpaid fees, costs and expenses of, and any other amounts owing to, the Facility Agent, the Security Agent, any Receiver or any Delegate under the Finance Documents;

(ii)
secondly , in or towards payment pro rata of any accrued interest and fees due but unpaid to the Lenders under this Agreement;

(iii)
thirdly , in or towards payment pro rata of any principal due but unpaid to the Lenders under this Agreement; and

(iv)
fourthly , in or towards payment pro rata of any other sum due to any Finance Party but unpaid under the Finance Documents.
(b)
The Facility Agent shall, if so directed by the Majority Lenders, vary, or instruct the Security Agent to vary (as applicable), the order set out in sub-paragraphs (ii) to (iv) of paragraph (a) above.
(c)
Paragraphs (a) and (b) above will override any appropriation made by a Transaction Obligor.
33.6
No set-off by Transaction Obligors
All payments to be made by a Transaction Obligor under the Finance Documents shall be calculated and be made without (and free and clear of any deduction for) set-off or counterclaim.
33.7
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.
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33.8
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.
33.9
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 Facility Agent (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 Facility Agent (acting reasonably).
(b)
If a change in any currency of a country occurs, this Agreement will, to the extent the Facility Agent (acting reasonably and after consultation with the 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.
33.10
Currency Conversion
(a)
For the purpose of, or pending any payment to be made by any Servicing Party under any Finance Document, such Servicing Party may convert any moneys received or recovered by it from one currency to another, at a market rate of exchange.
(b)
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.
33.11
Disruption to Payment Systems etc.
If either the Facility Agent determines (in its discretion) that a Disruption Event has occurred or the Facility Agent is notified by the Borrower that a Disruption Event has occurred:
(a)
the Facility Agent 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 Facility Agent may deem necessary in the circumstances;
(b)
the Facility Agent 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)
the Facility Agent may consult with the Finance Parties in relation to any changes mentioned in paragraph (a) above but shall not be obliged to do so if, in its opinion, it is not practicable to do so in the circumstances;
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(d)
any such changes agreed upon by the Facility Agent 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 notwithstanding the provisions of Clause 42 ( Amendments and Waivers );
(e)
the Facility Agent 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 Facility Agent) arising as a result of its taking, or failing to take, any actions pursuant to or in connection with this Clause 33.11 ( Disruption to Payment Systems etc. ); and
(f)
the Facility Agent shall notify the Finance Parties of all changes agreed pursuant to paragraph (d) above.
34
SET-OFF

A Finance Party may set off any matured obligation due from a Transaction Obligor under the Finance Documents (to the extent beneficially owned by that Finance Party) against any matured obligation owed by that Finance Party 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 Finance Party may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off.
35
BAIL-IN
Notwithstanding any other term of any Finance Document or any other agreement, arrangement or understanding between the parties to a Finance Document, each Party acknowledges and accepts that any liability of any party to a Finance Document under or in connection with the Finance Documents may be subject to Bail-In Action by the relevant Resolution Authority and acknowledges and accepts to be bound by the effect of:
(a)
any Bail-In Action in relation to any such liability, including (without limitation):

(i)
a reduction, in full or in part, in the principal amount, or outstanding amount due (including any accrued but unpaid interest) in respect of any such liability;

(ii)
a conversion of all, or part of, any such liability into shares or other instruments of ownership that may be issued to, or conferred on, it; and

(iii)
a cancellation of any such liability; and
(b)
a variation of any term of any Finance Document to the extent necessary to give effect to any Bail-In Action in relation to any such liability.
36
NOTICES

36.1
Communications in writing
Any communication to be made under or in connection with the Finance Documents shall be made in writing and, unless otherwise stated, may be made by email or letter.
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36.2
Addresses
The address (and the department or officer, if any, for whose attention the communication is to be made) of each Party for any communication or document to be made or delivered under or in connection with the Finance Documents are:
(a)
in the case of the Borrower, that specified in Schedule 1 ( The Parties );
(b)
in the case of each 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 Facility Agent on or before the date on which it becomes a Party;
(c)
in the case of the Facility Agent, that specified in Schedule 1 ( The Parties ); and
(d)
in the case of the Security Agent, that specified in Schedule 1 ( The Parties ),
or any substitute address or department or officer as the Party may notify to the Facility Agent (or the Facility Agent may notify to the other Parties, if a change is made by the Facility Agent) by not less than five Business Days' notice.
36.3
Delivery
(a)
Any communication or document made or delivered by one person to another under or in connection with the Finance Documents will only be effective 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 36.2 ( Addresses ), if addressed to that department or officer.
(b)
Any communication or document to be made or delivered to a Servicing Party will be effective only when actually received by that Servicing Party and then only if it is expressly marked for the attention of the department or officer of that Servicing Party specified in Schedule 1 ( The Parties ) (or any substitute department or officer as that Servicing Party shall specify for this purpose).
(c)
All notices from or to a Transaction Obligor shall be sent through the Facility Agent unless otherwise specified in any Finance Document.
(d)
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.
(e)
Any communication or document which becomes effective, in accordance with paragraphs (a) to (d) above, after 5.00 p.m. in the place of receipt shall be deemed only to become effective on the following day.
36.4
Notification of address
Promptly upon receipt of notification of an address or change of address pursuant to Clause 36.2 ( Addresses ) or changing its own address, the Facility Agent shall notify the other Parties.
36.5
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:
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(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 a Finance Party may only be made in that way to the extent that those two Parties agree that, unless and until notified to the contrary, this is to be an accepted form of communication.
(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 Facility Agent or the Security Agent only if it is addressed in such a manner as the Facility Agent or the Security Agent 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 36.5 ( Electronic communication ).
36.6
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 Facility Agent, accompanied by a certified English translation prepared by a translator approved by the Facility Agent and, in this case, the English translation will prevail unless the document is a constitutional, statutory or other official document.
37
CALCULATIONS AND CERTIFICATES

37.1
Accounts
In any litigation or arbitration proceedings arising out of or in connection with a Finance Document, the entries made in the accounts maintained by a Finance Party are prima facie evidence of the matters to which they relate.
37.2
Certificates and determinations
Any certification or determination by a Finance Party 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.
37.3
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
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or, in any case where the practice in the Relevant Interbank Market differs, in accordance with that market practice.
38
PARTIAL INVALIDITY

If, at any time, any provision of a Finance Document is or becomes illegal, invalid or unenforceable in any respect under any law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions under the law of that jurisdiction nor the legality, validity or enforceability of such provision under the law of any other jurisdiction will in any way be affected or impaired.
39
REMEDIES AND WAIVERS

No failure to exercise, nor any delay in exercising, on the part of any Secured Party, 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 a Secured Party 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.
40
SETTLEMENT OR DISCHARGE CONDITIONAL

Any settlement or discharge under any Finance Document between any Finance Party and any Transaction Obligor shall be conditional upon no security or payment to any Finance Party by any Transaction Obligor or any other person being set aside, adjusted or ordered to be repaid, whether under any insolvency law or otherwise.
41
IRREVOCABLE PAYMENT

If the Facility Agent 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 a Finance Party 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.
42
AMENDMENTS AND WAIVERS

42.1
Required consents
(a)
Subject to Clause 42.2 ( All Lender matters ) and Clause 42.3 ( Other exceptions ) any term of the Finance Documents may be amended or waived only with the consent of the Majority Lenders and, in the case of an amendment, the Obligors and any such amendment or waiver will be binding on all Parties.
(b)
The Facility Agent may effect, on behalf of any Finance Party, any amendment or waiver permitted by this Clause 42 ( Amendments and Waivers ).
(c)
Without prejudice to the generality of Clause 29.8 ( Rights and discretions ), the Facility Agent may engage, pay for and rely on the services of lawyers in determining the consent level required for and effecting any amendment, waiver or consent under this Agreement.
129

42.2
All Lender matters
Subject to Clause 42.4 ( Replacement of Screen Rate ), an amendment of or waiver or consent in relation to any term of any Finance Document that has the effect of changing or which relates to:
(a)
the definition of "Majority Lenders" in Clause 1.1 ( Definitions );
(b)
a postponement to or extension of the date of payment of any amount under the Finance Documents;
(c)
a reduction in the Margin or the amount of any payment of principal, interest, fees or commission payable;
(d)
a change in currency of payment of any amount under the Finance Documents;
(e)
an increase in any Commitment or the Total Commitments, an extension of any Availability Period or any requirement that a cancellation of Commitments reduces the Commitments rateably under the Facility;
(f)
a change to any Transaction Obligor other than in accordance with Clause 28 ( Changes to the Transaction Obligors );
(g)
any provision which expressly requires the consent of all the Lenders;
(h)
this Clause 42 ( Amendments and Waivers );
(i)
any change to the preamble (Background), Clause 2 ( The Facility ), Clause 3 ( Purpose ), Clause 5 ( Utilisation ), Clause 6.2 ( Effect of cancellation and prepayment on scheduled repayments ), Clause 7.4 ( Mandatory prepayment on sale or Total Loss ), Clause 8 ( Interest ), Clause 25 ( Accounts and application of Earnings ), Clause 27 ( Changes to the Lenders ), Clause 32 ( Sharing among the Finance Parties ), Clause 46 ( Governing Law ) or Clause 47 ( Enforcement );
(j)
any release of, or material variation to, any Transaction Security, guarantee, indemnity or subordination arrangement set out in a Finance Document (except in the case of a release of Transaction Security as it relates to the disposal of an asset which is the subject of the Transaction Security and where such disposal is expressly permitted by the Majority Lenders or otherwise under a Finance Document);
(k)
(other than as expressly permitted by the provisions of any Finance Document), the nature or scope of:

(i)
the Security Assets; or

(ii)
the manner in which the proceeds of enforcement of the Transaction Security are distributed,
(except in the case of sub-paragraphs (i) and (ii) above, insofar as it relates to a sale or disposal of an asset which is the subject of the Transaction Security where such sale or disposal is expressly permitted under this Agreement or any other Finance Document);
(l)
the release of any Transaction Security unless permitted under this Agreement or any other Finance Document or relating to a sale or disposal of an asset which is the subject of the Transaction Security where such sale or disposal is expressly permitted under this Agreement or any other Finance Document; or
shall not be made, or given, without the prior consent of all the Lenders.
130

42.3
Other exceptions
(a)
An amendment or waiver which relates to the rights or obligations of a Servicing Party, the Arranger or a Reference Bank (each in their capacity as such) may not be effected without the consent of that Servicing Party, the Arranger or that Reference Bank, as the case may be.
(b)
The Borrower and the Facility Agent, the Arranger or the Security Agent, as applicable, may amend or waive a term of a Fee Letter to which they are party.
42.4
Replacement of Screen Rate
(a)
Subject to Clause 42.3 (Other exceptions ) , if a Screen Rate Replacement Event has occurred in relation to the Screen Rate for dollars any amendment or waiver which relates to:

(i)
providing for the use of a Replacement Benchmark in relation to that currency in place of that Screen Rate; and
(ii)

(A)
aligning any provision of any Finance Document to the use of that Replacement Benchmark;

(B)
enabling that Replacement Benchmark to be used for the calculation of interest under this Agreement (including, without limitation, any consequential changes required to enable that Replacement Benchmark to be used for the purposes of this Agreement);

(C)
implementing market conventions applicable to that Replacement Benchmark;

(D)
providing for appropriate fallback (and market disruption) provisions for that Replacement Benchmark; or

(E)
adjusting the pricing to reduce or eliminate, to the extent reasonably practicable, any transfer of economic value from one Party to another as a result of the application of that Replacement Benchmark (and if any adjustment or method for calculating any adjustment has been formally designated, nominated or recommended by the Relevant Nominating Body, the adjustment shall be determined on the basis of that designation, nomination or recommendation),
may be made with the consent of the Facility Agent (acting on the instructions of the Majority Lenders) and the Borrower.
(b)
If any Lender fails to respond to a request for an amendment or waiver described in paragraph (a) above within five Business Days (or such longer time period in relation to any request which the Borrower and the Facility Agent may agree) of that request being made:

(i)
its Commitment shall not be included for the purpose of calculating the Total Commitments when ascertaining whether any relevant percentage of Total Commitments has been obtained to approve that request; and
131


(ii)
its status as a Lender shall be disregarded for the purpose of ascertaining whether the agreement of any specified group of Lenders has been obtained to approve that request.
42.5
Obligor Intent
Without prejudice to the generality of Clauses 1.2 ( Construction ) and 17.4 ( Waiver of defences ) each Obligor expressly confirms that it intends that any guarantee contained in this Agreement or any other Finance Document and any Security created by any Finance Document shall extend from time to time to any (however fundamental) variation, increase, extension or addition of or to any of the Finance Documents and/or any facility or amount made available under any of the Finance Documents for the purposes of or in connection with any of the following:  business acquisitions of any nature; increasing working capital; enabling investor distributions to be made; carrying out restructurings; refinancing existing facilities; refinancing any other indebtedness; making facilities available to new borrowers; any other variation or extension of the purposes for which any such facility or amount might be made available from time to time; and any fees, costs and/or expenses associated with any of the foregoing.
43
CONFIDENTIAL INFORMATION

43.1
Confidentiality
Each Finance Party agrees to keep all Confidential Information confidential and not to disclose it to anyone, save to the extent permitted by Clause 43.2 ( Disclosure of Confidential Information ) and Clause 43.3 ( Disclosure to numbering service providers ) and to ensure that all Confidential Information is protected with security measures and a degree of care that would apply to its own confidential information.
43.2
Disclosure of Confidential Information
Any Finance Party 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 that Finance Party 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 transfers all or any of its rights and/or obligations under one or more Finance Documents or which succeeds (or which may potentially succeed) it as Facility Agent or Security Agent 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;
132


(iii)
appointed by any Finance Party 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 (including, without limitation, any person appointed under paragraph (c) of Clause 29.15 ( Relationship with the other Finance Parties ));

(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 that Finance Party charges, assigns or otherwise creates Security (or may do so) pursuant to Clause 27.8 ( Security over Lenders' rights );

(viii)
who is a Party, a Transaction Obligor 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 that Finance Party 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 that Finance Party, it is not practicable so to do in the circumstances;
(c)
to any person appointed by that Finance Party 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
133

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 relevant Finance Party;
(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.
43.3
Disclosure to numbering service providers
(a)
Any Finance Party may disclose to any national or international numbering service provider appointed by that Finance Party to provide identification numbering services in respect of this Agreement, the Facility and/or one or more Transaction Obligors the following information:

(i)
names of Transaction Obligors;

(ii)
country of domicile of Transaction Obligors;

(iii)
place of incorporation of Transaction Obligors;

(iv)
date of this Agreement;

(v)
Clause 46 ( Governing Law );

(vi)
the names of the Facility Agent and the Arranger;

(vii)
date of each amendment and restatement of this Agreement;

(viii)
amount of Total Commitments;

(ix)
currency of the Facility;

(x)
type of Facility;

(xi)
ranking of Facility;

(xii)
Termination Date for Facility;

(xiii)
changes to any of the information previously supplied pursuant to sub-paragraphs (i) to (xii) above; and

(xiv)
such other information agreed between such Finance Party and the Borrower,
to enable such numbering service provider to provide its usual syndicated loan numbering identification services.
(b)
The Parties acknowledge and agree that each identification number assigned to this Agreement, the Facility and/or one or more Transaction Obligors by a numbering service provider and the information associated with each such number may be disclosed to users of its services in accordance with the standard terms and conditions of that numbering service provider.
134

(c)
Each Obligor represents, on behalf of itself and the other Transaction Obligors, that none of the information set out in sub-paragraphs (i) to (xiv) of paragraph (a) above is, nor will at any time be, unpublished price-sensitive information.
(d)
The Facility Agent shall notify the Corporate Guarantor and the other Finance Parties of:

(i)
the name of any numbering service provider appointed by the Facility Agent in respect of this Agreement, the Facility and/or one or more Transaction Obligors; and

(ii)
the number or, as the case may be, numbers assigned to this Agreement, the Facility and/or one or more Transaction Obligors by such numbering service provider.
43.4
Entire agreement
This Clause 43 ( Confidential Information ) constitutes the entire agreement between the Parties in relation to the obligations of the Finance Parties under the Finance Documents regarding Confidential Information and supersedes any previous agreement, whether express or implied, regarding Confidential Information.
43.5
Inside information
Each of the Finance Parties 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 each of the Finance Parties undertakes not to use any Confidential Information for any unlawful purpose.
43.6
Notification of disclosure
Each of the Finance Parties 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 43.2 ( Disclosure of Confidential Information ) except where such disclosure is made to any of the persons referred to in that paragraph during the ordinary course of its supervisory or regulatory function; and
(b)
upon becoming aware that Confidential Information has been disclosed in breach of this Clause 43 ( Confidential Information ).
43.7
Continuing obligations
The obligations in this Clause 43 ( Confidential Information ) are continuing and, in particular, shall survive and remain binding on each Finance Party 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 such Finance Party otherwise ceases to be a Finance Party.
135

44
CONFIDENTIALITY OF FUNDING RATES AND REFERENCE BANK QUOTATIONS

44.1
Confidentiality and disclosure
(a)
The Facility Agent and each Obligor agree to keep each Funding Rate (and, in the case of the Facility Agent, each Reference Bank Quotation) confidential and not to disclose it to anyone, save to the extent permitted by paragraphs (b), (c) and (d) below.
(b)
The Facility Agent may disclose:

(i)
any Funding Rate (but not, for the avoidance of doubt, any Reference Bank Quotation) to the Borrower pursuant to Clause 8.4 ( Notification of rates of interest ); and

(ii)
any Funding Rate or 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 Facility Agent and the relevant Lender or Reference Bank, as the case may be.
(c)
The Facility Agent may disclose any Funding Rate or 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 sub-paragraph (i) is informed in writing of its confidential nature and that it may be price sensitive information except that there shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the confidentiality of that Funding Rate or 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 Facility Agent 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 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 Facility Agent 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 relevant Lender or Reference Bank, as the case may be.
(d)
The Facility Agent's obligations in this Clause 44 ( 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 (other than pursuant to sub-paragraph (i) of paragraph (b) above) the Facility
136

Agent shall not include the details of any individual Reference Bank Quotation as part of any such notification.
44.2
Related obligations
(a)
The Facility Agent and each Obligor acknowledge that each Funding Rate (and, in the case of the Facility Agent, 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 the Facility Agent and each Obligor undertake not to use any Funding Rate or, in the case of the Facility Agent, any Reference Bank Quotation for any unlawful purpose.
(b)
The Facility Agent and each Obligor agree (to the extent permitted by law and regulation) to inform the relevant Lender or Reference Bank, as the case may be:

(i)
of the circumstances of any disclosure made pursuant to sub-paragraph (ii) of paragraph (c) of Clause 44.1 ( Confidentiality and disclosure ) except where such disclosure is made to any of the persons referred to in that paragraph during the ordinary course of its supervisory or regulatory function; and

(ii)
upon becoming aware that any information has been disclosed in breach of this Clause 44 ( Confidentiality of Funding Rates and Reference Bank Quotations ).
44.3
No Event of Default
No Event of Default will occur under Clause 26.4 ( Other obligations ) by reason only of an Obligor's failure to comply with this Clause 44 ( Confidentiality of Funding Rates and Reference Bank Quotations ).
45
COUNTERPARTS

Each Finance Document may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of the Finance Document.




137

SECTION 12

GOVERNING LAW AND ENFORCEMENT
46
GOVERNING LAW

This Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.
47
ENFORCEMENT

47.1
Jurisdiction
(a)
Unless specifically provided in another Finance Document in relation to that Finance Document, the courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with any Finance Document (including a dispute regarding the existence, validity or termination of any Finance Document or any non-contractual obligation arising out of or in connection with any Finance Document) (a " Dispute ").
(b)
The Obligors accept that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly no Obligor will argue to the contrary.
(c)
This Clause 47.1 ( Jurisdiction ) is for the benefit of the Secured Parties only.  As a result, no Secured Party shall be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction.  To the extent allowed by law, the Secured Parties may take concurrent proceedings in any number of jurisdictions.
47.2
Service of process
(a)
Without prejudice to any other mode of service allowed under any relevant law, each Obligor:

(i)
irrevocably appoints Messrs E. J. C. Album Solicitors, presently of Landmark House, 190 Willifield Way, London NW11 6YA, England (attention: Mr Edward Album, tel: +44 208 455 7653, fax: +44 208 457 5558 and email: 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 5 days of such event taking place) appoint another agent on terms acceptable to the Facility Agent.  Failing this, the Facility Agent may appoint another agent for this purpose.
This Agreement has been entered into on the date stated at the beginning of this Agreement.

138

SCHEDULE 1

THE PARTIES
PART A

THE OBLIGORS


Name of Borrower
Place of Incorporation
Registration number (or equivalent, if any)
Address for Communication
       
Partner Shipping Co. Limited
Malta
C 86307
154 Vouliagmenis Avenue, 166 74 Glyfada, Greece
-   Attention: Stamatios Tsantanis/ Stavros Gyftakis
-   Email: snt@seanergy.gr / sgyftakis@seanergy.gr
-   Telephone No.: +30 213 0181507
 

Name of Corporate Guarantor
Place of Incorporation
Registration number
(or equivalent, if any)
Address for Communication
       
Seanergy Maritime Holdings Corp.
Marshall Islands
27721
154 Vouliagmenis Avenue, 166 74 Glyfada, Greece
-   Attention: Stamatios Tsantanis/ Stavros Gyftakis
-   Email: snt@seanergy.gr / sgyftakis@seanergy.gr
-   Telephone No.: +30 213 0181507


139

PART B


THE ORIGINAL LENDERS


Name of Original Lender Commitment
Address for Communication

Commitment
Amsterdam Trade Bank N.V.
Non-Administrative Matters
 
-   Address:
 
World Trade Center
Tower I, Level 6
Strawinskylaan 1939
1077 XX, Amsterdam
The Netherlands
 
-   Attention: Marianthi Milopoulou / Vassilis Kolovos
-   Email:
To:   m.milopoulou@atbank.nl   /v.kolovos@atbank.nl
Cc:   shipping.finance@atbank.nl
-   Telephone No.: +31 (0) 205 209 271 / +31 (0) 205 209 204
 
Administrative Matters
 
-   Address:
 
World Trade Center
Tower I, Level 6
Strawinskylaan 1939
1077 XX, Amsterdam
The Netherlands
 
-   Attention: Liujun Zhou
-   Email:
To: shipping.finance@atbank.nl
Cc: m.milopoulou@atbank.nl / v.kolovos@atbank.nl
-   Telephone No.: +31 (0) 205 209 248 / +31 (0) 205 209 271 / +31 (0) 205 209 204
 
$20,890,000
140

PART C

THE SERVICING PARTIES

Name of Facility Agent
Address for Communication

Amsterdam Trade Bank N.V.
Non-Administrative Matters
 
-   Address:
 
World Trade Center
Tower I, Level 6
Strawinskylaan 1939
1077 XX, Amsterdam
The Netherlands
 
-   Attention: Marianthi Milopoulou / Vassilis Kolovos
-   Email:
To:  m.milopoulou@atbank.nl   /v.kolovos@atbank.nl
Cc:  shipping.finance@atbank.nl
-   Telephone No.: +31 (0) 205 209 271 / +31 (0) 205 209 204
 
Administrative Matters
-   Address:
 
World Trade Center
Tower I, Level 6
Strawinskylaan 1939
1077 XX, Amsterdam
The Netherlands
 
-   Attention: Liujun Zhou
-   Email:
To:  shipping.finance@atbank.nl
Cc:  m.milopoulou@atbank.nl / v.kolovos@atbank.nl
-   Telephone No.: +31 (0) 205 209 248 / +31 (0) 205 209 271 / +31 (0) 205 209 204
141


Name of Security Agent
Address for Communication

Amsterdam Trade Bank N.V.
Non-Administrative Matters
 
-   Address:
 
World Trade Center
Tower I, Level 6
Strawinskylaan 1939
1077 XX, Amsterdam
The Netherlands
 
-   Attention: Marianthi Milopoulou / Vassilis Kolovos
-   Email:
To:  m.milopoulou@atbank.nl   /v.kolovos@atbank.nl
Cc:  shipping.finance@atbank.nl
-   Telephone No.: +31 (0) 205 209 271 / +31 (0) 205 209 204
 
Administrative Matters
-   Address:
 
World Trade Center
Tower I, Level 6
Strawinskylaan 1939
1077 XX, Amsterdam
The Netherlands
 
-   Attention: Liujun Zhou
-   Email:
To: shipping.finance@atbank.nl
Cc: m.milopoulou@atbank.nl / v.kolovos@atbank.nl
-   Telephone No.: +31 (0) 205 209 248 / +31 (0) 205 209 271 / +31 (0) 205 209 204

142

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 and the Shareholder.
1.2
A copy of a resolution of the board of directors (and if required for the purposes of any legal opinion, the shareholders) of each Obligor and the Shareholder:
(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 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 each Obligor (signed by a director in the Borrower and an officer in the case of the Corporate Guarantor) confirming that borrowing or guaranteeing, as appropriate, the Total Commitments would not cause any borrowing, guaranteeing or similar limit binding on that Transaction Obligor to be exceeded.
1.6
A certificate of each Obligor that is incorporated outside the UK (signed by a director in the Borrower and an officer in the case of the Corporate Guarantor) 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.
1.7
A certificate of an authorised signatory of the relevant Obligor (which, in the case of the Corporate Guarantor shall be an officer) 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
Finance Documents and other Documents
2.1
A duly executed original of any Finance Document not otherwise referred to in this Schedule 2 ( Conditions Precedent ), including for the avoidance of doubt, the Intercreditor Agreement.
2.2
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 ).
143

3
Security
3.1
A duly executed original of the Account Security in relation to each Account and of the Share Security in respect of the Borrower (and of each document to be delivered under each of them).
4
Legal opinions
4.1
A legal opinion of Watson, Farley & Williams LLP legal advisers to the Arranger, the Facility Agent and the Security Agent in England, substantially in the form distributed to the Original Lenders before signing this Agreement.
4.2
A legal opinion from Nauta Dutilh N.V., legal advisers to the Facility Agent and the Security Agent in The Netherlands, substantially in the form distributed to the Original Lenders before signing this Agreement.
4.3
If an Obligor is incorporated in a jurisdiction other than England and Wales, a legal opinion of the legal advisers to the Arranger, the Facility Agent and the Security Agent in the relevant jurisdiction, substantially in the form distributed to the Original Lenders before signing this Agreement.
5
Other documents and evidence
5.1
Evidence that any process agent referred to in Clause 47.2 ( Service of process ) has accepted its appointment.
5.2
A copy of any other Authorisation or other document, opinion or assurance which the Facility Agent 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.
5.3
The Original Financial Statements of the Corporate Guarantor.
5.4
The original of any mandates or other documents required in connection with the opening or operation of the Accounts.
5.5
Evidence that the fees, costs and expenses then due from the Borrower pursuant to Clause 11 ( Fees ) and Clause 16 ( Costs and Expenses ) have been paid or will be paid by the first Utilisation Date.
5.6
Such evidence as the Facility Agent may require for the Finance Parties to be able to satisfy each of their "know your customer" including, but not limited to, the Obligors and the ultimate beneficial owners of the Obligors or similar identification procedures in relation to the transactions contemplated by the Finance Documents.
144

PART B

CONDITIONS PRECEDENT TO THE UTILISATION OF TRANCHE A

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 for Tranche A.
2
Release of Existing Security
An original of the Deed of Release and of each document to be delivered under or pursuant to it, together with evidence satisfactory to the Facility Agent of its due execution by the parties to it.
3
Ship and other security
3.1
A duly executed original of the Mortgage, the General Assignment and, if applicable, the Charter Assignment in respect of the Ship and of each document to be delivered under or pursuant to each of them together with documentary evidence that the Mortgage in respect of the Ship has been duly recorded as a valid first preferred ship mortgage in accordance with the laws of the jurisdiction of its Approved Flag.
3.2
A copy of each Approved Charter and of all documents signed or issued by the Borrower and the Approved Charterer (or either of them) under or in connection with it.
3.3
Documentary evidence that the Ship:
(a)
is definitively and permanently registered in the name of the Borrower under the Approved Flag applicable to the Ship;
(b)
is in the absolute and unencumbered ownership of the Borrower save as contemplated by the Finance Documents and the Junior Finance Documents;
(c)
maintains the Approved Classification with the Approved Classification Society free of all overdue recommendations and conditions of the Approved Classification Society; and
(d)
is insured in accordance with the provisions of this Agreement and all requirements in this Agreement in respect of insurances have been complied with.
3.4
Documents establishing that the Ship will, as from the Utilisation Date for Tranche A, be managed commercially by its Approved Commercial Manager and managed technically by its Approved Technical Manager on terms acceptable to the Facility Agent acting with the authorisation of all of the Lenders, together with:
(a)
a Manager's Undertaking for each of the Approved Technical Manager and the Approved Commercial Manager of the Ship; and
(b)
copies of the relevant 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 Facility Agent 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.
145

3.5
An opinion from an independent insurance consultant acceptable to the Facility Agent on such matters relating to the Insurances as the Facility Agent may require.
3.6
Valuations of the Ship, addressed to the Facility Agent on behalf of the Finance Parties, stated to be for the purposes of this Agreement and dated not earlier than 14 days before the Utilisation Date for Tranche A from two Approved Brokers which shows a Market Value for the Ship which would result in the satisfaction of Clause 24 ( Security Cover ) after the Advance under the relevant Tranche has been utilised.
4
Legal opinions
Legal opinions of the legal advisers to the Arranger, the Facility Agent and the Security Agent in the jurisdiction of the Approved Flag of the Ship, England and Wales, Malta and such other relevant jurisdictions as the Facility Agent may require.
5
Other documents and evidence
5.1
Evidence that the fees, costs and expenses then due from the Borrower pursuant to Clause 11 ( Fees ) and Clause 16 ( Costs and Expenses ) have been paid or will be paid by the Utilisation Date for Tranche A.
5.2
Sufficient evidence in form and substance acceptable to the Facility Agent that any loan facility originally provided by the Shareholder to the Borrower and/or the Corporate Guarantor has no scheduled principal (or similar) repayments under such loan(s) until 31 December 2019 other than any partial or full repayments permitted under the Intercreditor Agreement.



146

PART C

CONDITIONS PRECEDENT TO THE UTILISATION OF AN ADVANCE UNDER TRANCHE B OR TRANCHE C

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 C 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
Documents
3
Copies of the commercial invoices (including pro-forma or preliminary invoices) confirming to the satisfaction of the Facility Agent the costs and expenses incurred for the acquisition and installation of the equipment for open loop scrubber systems on Ship A or Ship B (as the case may be), such invoices to correspond with the amount of the Advance requested.
4
Evidence satisfactory to the Facility Agent that the relevant amount for the purchase and installation has been paid or shall, as a result of the relevant Advance, be paid in full, including evidence of payment of any equity portion, or otherwise.
147

SCHEDULE 3

REQUESTS
PART A

UTILISATION REQUEST

From:
Partner Shipping Co. Limited

To:
Amsterdam Trade Bank N.V.
Dated: [●] 2019
Dear Sirs
Partner Shipping Co. Limited - $20,890,000 Facility Agreement dated [●] February 2019 (the "Agreement")
1
We refer to the Agreement.  This is a Utilisation Request.  Terms defined in the Agreement have the same meaning in this Utilisation Request unless given a different meaning in this Utilisation Request.
2
We wish to borrow the Advance under Tranche [A] [B] [C]on the following terms:
 
Proposed Utilisation Date:
[●] (or, if that is not a Business Day, the next Business Day)

 
Amount:
[●] or, if less, the Available Facility

 
Interest Period for the first Advance:
[●]

3
You are authorised and requested to deduct from the Advance prior to funds being remitted the following amounts set out against the following items:
 
Deductible Items

$
 
Facility Agent's solicitors' fees inclusive of disbursements and VAT

 
 
Net proceeds of Advance

_______________
4
We confirm that each condition specified in Clause 4.1 ( Initial conditions precedent ) and Clause 4.2 ( Further conditions precedent ) of the Agreement as they relate to the Advance to which this Utilisation Request refers is satisfied on the date of this Utilisation Request.
5
The net proceeds of this Advance should be credited to [account].
6
This Utilisation Request is irrevocable.
Yours faithfully

                                                                 
[●]
authorised signatory for
Partner Shipping Co. Limited
148

PART B

SELECTION NOTICE

From:
Partner Shipping Co. Limited

To:
Amsterdam Trade Bank N.V.

Dated: [●]
Dear Sirs
Partner Shipping Co. Limited - $20,890,000 Facility Agreement dated [●] February 2019 (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 Tranche [A][B][C] be []
3
This Selection Notice is irrevocable.
Yours faithfully





                                                                 
[●]
authorised signatory for
Partner Shipping Co. Limited


149

SCHEDULE 4

FORM OF TRANSFER CERTIFICATE
To:
Amsterdam Trade Bank N.V. as Facility Agent

From:
[The Existing Lender] (the " Existing Lender ") and [The New Lender] (the " New Lender ")
Dated: [●]
Dear Sirs
Partner Shipping Co. Limited - $20,890,000 Facility Agreement dated [] February 2019 (the "Agreement")
1
We refer to the Agreement.  This is a Transfer Certificate.  Terms defined in the Agreement have the same meaning in this Transfer Certificate unless given a different meaning in this Transfer Certificate.
2
We refer to Clause 27.5 ( Procedure for transfer ) of the Agreement:
(a)
The Existing Lender and the New Lender agree to the Existing Lender transferring to the New Lender by novation all of the Existing Lender's rights and obligations under the Agreement and the other Finance Documents which relate to that portion of the Existing Lender's Commitment and participation in the Loan under the Agreement as specified in the Schedule in accordance with Clause 27.5 ( Procedure for transfer ) of the Agreement.
(b)
The proposed Transfer Date is [].
(c)
The Facility Office and address and attention details for notices of the New Lender for the purposes of Clause 36.2 ( Addresses ) of the Agreement are set out in the Schedule.
3
The New Lender expressly acknowledges the limitations on the Existing Lender's obligations set out in paragraph (c) of Clause 27.4 ( Limitation of responsibility of Existing Lenders ) of the Agreement.
4
This Transfer Certificate may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Transfer Certificate.
5
This Transfer Certificate and any non-contractual obligations arising out of or in connection with it are governed by English law.
6
This Transfer Certificate has been entered into on the date stated at the beginning of this Transfer Certificate.
Note: The execution of this Transfer Certificate may not transfer a proportionate share of the Existing Lender's interest in the Transaction Security in all jurisdictions.  It is the responsibility of the New Lender to ascertain whether any other documents or other formalities are required to perfect a transfer of such a share in the Existing Lender's Transaction Security in any jurisdiction and, if so, to arrange for execution of those documents and completion of those formalities.
150

THE SCHEDULE

Commitment/rights   and obligations to be transferred
[ insert relevant details ]
[Facility Office address and attention detailsfor notices and account details for payments.]
[Existing Lender]
[New Lender]

By: [●]
By: [●]




This Transfer Certificate is accepted by the Facility Agent and the Transfer Date is confirmed as [●] .
[Facility Agent]
By: [●]



151

SCHEDULE 5

FORM OF ASSIGNMENT AGREEMENT
To:
Amsterdam Trade Bank N.V. as Facility Agent and Partner Shipping Co. Limited as Borrower, for and on behalf of each [Transaction] Obligor

From:
[the Existing Lender] (the " Existing Lender ") and [the New Lender] (the " New Lender ")

Dated: [ ● ]
Dear Sirs
Partner Shipping Co. Limited - $20,890,000 Facility Agreement dated [] February 2019 (the "Agreement")
1
We refer to the Agreement.  This is an Assignment Agreement.  Terms defined in the Agreement have the same meaning in this Assignment Agreement unless given a different meaning in this Assignment Agreement.
2
We refer to Clause 27.6 ( Procedure for assignment ):
(a)
The Existing Lender assigns absolutely to the New Lender all the rights of the Existing Lender under the Agreement, the other Finance Documents and in respect of the Transaction Security which correspond to that portion of the Existing Lender's Commitment and participations in the Loan under the Agreement as specified in the Schedule.
(b)
The Existing Lender is released from all the obligations of the Existing Lender which correspond to that portion of the Existing Lender's Commitments and participations in the Loan under the Agreement specified in the Schedule.
(c)
The New Lender becomes a Party as a Lender and is bound by obligations equivalent to those from which the Existing Lender is released under paragraph (b) above.
(d)
All rights and interests (present, future or contingent) which the Existing Lender has under or by virtue of the Finance Documents are assigned to the New Lender absolutely, free of any defects in the Existing Lender's title and of any rights or equities which the Borrower or any other Transaction Obligor had against the Existing Lender.
3
The proposed Transfer Date is [●] .
4
On the Transfer Date the New Lender becomes Party to the Finance Documents as a Lender.
5
The Facility Office and address and attention details for notices of the New Lender for the purposes of Clause 36.2 ( Addresses ) are set out in the Schedule.
6
The New Lender expressly acknowledges the limitations on the Existing Lender's obligations set out in paragraph (c) of Clause 27.4 ( Limitation of responsibility of Existing Lenders ).
7
This Assignment Agreement acts as notice to the Facility Agent (on behalf of each Finance Party) and, upon delivery in accordance with Clause 27.7 ( Copy of Transfer Certificate or Assignment Agreement to Borrower ), to the Borrower (on behalf of each Transaction Obligor) of the assignment referred to in this Assignment Agreement.
152

8
This Assignment Agreement may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Assignment Agreement.
9
This Assignment Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.
10
This Assignment Agreement has been entered into on the date stated at the beginning of this Assignment Agreement.
Note: The execution of this Assignment Agreement may not transfer a proportionate share of the Existing Lender's interest in the Transaction Security in all jurisdictions.  It is the responsibility of the New Lender to ascertain whether any other documents or other formalities are required to perfect a transfer of such a share in the Existing Lender's Transaction Security in any jurisdiction and, if so, to arrange for execution of those documents and completion of those formalities.
153

THE SCHEDULE
Commitment rights and obligations to be transferred by assignment, release and accession
[ insert relevant details ]
[Facility office address and attention details for notices and account details for payments]
[Existing Lender]
[New Lender]

By: [●]
By: [●]

This Assignment Agreement is accepted by the Facility Agent and the Transfer Date is confirmed as [●] .
Signature of this Assignment Agreement by the Facility Agent constitutes confirmation by the Facility Agent of receipt of notice of the assignment referred to herein, which notice the Facility Agent receives on behalf of each Finance Party.
[Facility Agent]
By:

154

SCHEDULE 6

FORM OF COMPLIANCE CERTIFICATE
To:
Amsterdam Trade Bank N.V. as Facility Agent

From:
Borrower
Dated: [●]
Dear Sirs
Partner Shipping Co. Limited - $20,890,000 Facility Agreement dated [●] February 2019 (the "Agreement")
1
We refer to the Agreement.  This is a Compliance Certificate.  Terms defined in the Agreement have the same meaning when used in this Compliance Certificate unless given a different meaning in this Compliance Certificate.
2
We confirm that:
(a)
the balance on the Operating Account at all times during the six month period ending on [ ● ] was more than [$500,000];
(b)
the EBITDA to Net Interest Expense Ratio is [ ● ];
(c)
the Cash per Fleet Vessel is of $[ ● ]; and
(d)
the Net Debt to Market Value Adjusted Total Assets is [ ● ] per cent.; and
(e)
the Market Value of the Ship plus the net realisable value of additional Security provided under Clause 24.2 ( Provision of additional security; prepayment ) is [ ● ] per cent. of the Loan.
3
We confirm that no Default is continuing.
Signed:
   
 
Officer
of
Partner Shipping Co. Limited
 
     
155

SCHEDULE 7

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 ))

Facility Agent notifies the Lenders of the Advance in accordance with Clause 5.4 ( Lenders' participation )
 
One Business Day before the intended Utilisation Date.

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


156

SCHEDULE 8

VESSEL REPORT

From:
Partner Shipping Co. Limited

To:
Amsterdam Trade Bank N.V.

For the attention of: Ms. Marianthi Milopoulou ( m.milopoulou@atbank.nl ) and Mr. Vassilis Kolovos (v.kolovos@atbank.nl)
[Day, Month, Year]
Semi-Annual Vessel Performance Report
[Vessel Name, IMO Number]
[6-Month Period Covered]
Item
Unit
Actual
Comment
1.   Average daily gross TCE hire earned
USD
   
2.   Total brokerage commission charged
USD
   
3.   Average daily net TCE hire earned
USD
   
4.   Total on-hire days
No.
   
5.   Total off-hire days
No.
   
6.   Average daily operating expenses
USD
   
7.   Average daily management expenses
USD
   
8.   Average daily SG&A expenses
USD
   
9.   Total maintenance expenses*
USD
   
10.     Other expenses
USD
   
* Only expenditures incurred by the owner of the vessel for non-routine maintenance and repairs that are not reported under operating expenses or other profit & loss account, rather are eligible for capitalisation in accordance with GAAP, including but not limited to, fixed assets, major improvement and upgrades and shall also include, without limitation, any and all survey and dry-docking expenditures typically capitalised under GAAP.

………………….......……………
For and on behalf of
Partner Shipping Co. Limited
157

EXECUTION PAGES

BORROWER
SIGNED by Stamatios Tsantanis


  )
 
duly authorised
)
 
for and on behalf of
)
/s/ Stamatios Tsantanis
PARTNER SHIPPING CO. LIMITED
)
 
in the presence of:
)

 
Witness' signature:
)
/s/ Theodora Mitropetrou
Witness' name: Theodora Mitropetrou
)

Witness' address: 154 Vouliagmenis Avenue 166 74 Glyfada, Greece
)
 
     


CORPORATE GUARANTOR

SIGNED by Stamatios Tsantanis


  )
 
duly authorised
)
 
for and on behalf of
)
/s/ Stamatios Tsantanis
SEANERGY MARITIME HOLDINGS CORP.
)
 
in the presence of:
)

 
Witness' signature:
)
/s/ Theodora Mitropetrou
Witness' name: Theodora Mitropetrou
)

Witness' address: 154 Vouliagmenis Avenue 166 74 Glyfada, Greece
)
 
     


ORIGINAL LENDERS

SIGNED by Andreas Giakoumelas


  )
 
duly authorised
)
 
for and on behalf of
)
/s/ Andreas Giakoumelas  
AMSTERDAM TRADE BANK N.V.
)
 
in the presence of:
)

 
Witness' signature:
)

Witness' name:  Ourania Todoulou
)

Witness' address: Attorney-at-Law

Watson Farley & Williams
348 Syngrou Avenue
176 74 Kallithea
Athens, Greece


/s/ Ourania Todoulou

)
 
       

   

158


ARRANGER

SIGNED by Andreas Giakoumelas


  )
 
duly authorised
)
 
for and on behalf of
)
/s/ Andreas Giakoumelas  
AMSTERDAM TRADE BANK N.V.
)
 
in the presence of:
)

 
Witness' signature:
)

Witness' name:  Ourania Todoulou
)

Witness' address: Attorney-at-Law

Watson Farley & Williams
348 Syngrou Avenue
176 74 Kallithea
Athens, Greece


/s/ Ourania Todoulou

)
 


FACILITY AGENT

SIGNED by Andreas Giakoumelas


  )
 
duly authorised
)
 
for and on behalf of
)
/s/ Andreas Giakoumelas  
AMSTERDAM TRADE BANK N.V.
)
 
in the presence of:
)

 
Witness' signature:
)

Witness' name:  Ourania Todoulou
)

Witness' address: Attorney-at-Law

Watson Farley & Williams
348 Syngrou Avenue
176 74 Kallithea
Athens, Greece


/s/ Ourania Todoulou

)
 


SECURITY AGENT

SIGNED by Andreas Giakoumelas


  )
 
duly authorised
)
 
for and on behalf of
)
/s/ Andreas Giakoumelas  
AMSTERDAM TRADE BANK N.V.
)
 
in the presence of:
)

 
Witness' signature:
)

Witness' name:  Ourania Todoulou
)

Witness' address: Attorney-at-Law

Watson Farley & Williams
348 Syngrou Avenue
176 74 Kallithea
Athens, Greece


/s/ Ourania Todoulou

)
 
 

159

















160


Exhibit 8.1

SUBSIDIARIES OF SEANERGY MARITIME HOLDINGS CORP.

Subsidiary
Jurisdiction of Incorporation
 
Seanergy Management Corp.
Martinique International Corp.
Harbour Business International Corp.
Pembroke Chartering Services Limited
Sea Glorius Shipping Co.
Sea Genius Shipping Co.
Seanergy Shipmanagement Corp.
Leader Shipping Co.
Premier Marine Co.
Gladiator Shipping Co.
Guardian Shipping Co.
Fellow Shipping Co.
Champion Ocean Navigation Co. Limited
Squire Ocean Navigation Co.
Maritime Capital Shipping Limited
Maritime Capital Shipping (HK) Limited
Maritime Glory Shipping Limited
Maritime Grace Shipping Limited
Atlantic Grace Shipping Limited
Emperor Holding Ltd.
Lord Ocean Navigation Co.
Knight Ocean Navigation Co.
Partner Shipping Co. Limited
Fellow Shipping Co.
Champion Marine Co.
Champion Marine Co.
Marshall Islands
British Virgin Islands
British Virgin Islands
Malta
Marshall Islands
Marshall Islands
Marshall Islands
Marshall Islands
Marshall Islands
Marshall Islands
Marshall Islands
Marshall Islands
Malta
Liberia
Bermuda
Hong Kong
British Virgin Islands
British Virgin Islands
British Virgin Islands
Marshall Islands
Liberia
Liberia
Malta
Marshall Islands
Liberia
Marshall Islands

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: March 22, 2019


/s/ Stamatios Tsantanis
Stamatios Tsantanis
Chief Executive Officer (Principal Executive Officer)
Exhibit 12.2

CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICER

I, Stavros Gyftakis, certify that:

1.              I have reviewed this annual report on Form 20-F of Seanergy Maritime Holdings Corp.;

2.              Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.              Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4.              The company's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

(a)              Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)              Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)              Evaluated the effectiveness of the company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)              Disclosed in this report any change in the company's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company's internal control over financial reporting; and

5.              The company's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company's auditors and the audit committee of the company's board of directors (or persons performing the equivalent functions):

(a)              All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company's ability to record, process, summarize and report financial information; and

(b)              Any fraud, whether or not material, that involves management or other employees who have a significant role in the company's internal control over financial reporting.

Date: March 22, 2019

/s/ Stavros Gyftakis
Stavros Gyftakis
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, 2018, 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: March 22, 2019


/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, 2018, as filed with the Securities and Exchange Commission (the "SEC") on or about the date hereof (the "Report"), I, Stavros Gyftakis, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the SEC or its staff upon request.

Date: March 22, 2019


/s/ Stavros Gyftakis
Stavros Gyftakis
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:

(1)
Registration Statement (Form F-3 No. 333-226796) of Seanergy Maritime Holdings Corp.,
(2)
Registration Statement (Form F-3 No. 333-166697) of Seanergy Maritime Holdings Corp.,
(3)
Registration Statement (Form F-3 No. 333-169813) of Seanergy Maritime Holdings Corp., and
(4)
Registration Statement (Form F-3 No. 333-214967) of Seanergy Maritime Holdings Corp.;

of our report dated March 22, 2019, with respect to the consolidated financial statements and schedule of Seanergy Maritime Holdings Corp. included in this Annual Report (Form 20-F) of Seanergy Maritime Holdings Corp. for the year ended December 31, 2018.


/s/ Ernst & Young (Hellas) Certified Auditors-Accountants S.A.

Athens, Greece
March 22, 2019