☐ |
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE
SECURITIES EXCHANGE ACT OF 1934
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☒ |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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☐ |
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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SEANERGY MARITIME HOLDINGS CORP.
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(Exact name of Registrant as specified in its charter)
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(Translation of Registrant’s name into English)
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Republic of the Marshall Islands
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(Jurisdiction of incorporation or organization)
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154 Vouliagmenis Avenue, 166 74 Glyfada, Greece
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(Address of principal executive offices)
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Stamatios Tsantanis, Chairman & Chief Executive Officer
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Seanergy Maritime Holdings Corp.
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154 Vouliagmenis Avenue, 166 74 Glyfada, Greece
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Telephone: +30 213 0181507, Fax: +30 210 9638404
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(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
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Title of class
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Trading Symbol(s)
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Name of exchange on which
registered
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Shares of common stock, par value $0.0001 per share
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SHIP
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Nasdaq Capital Market
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Class A Warrants
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SHIPW
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Nasdaq Capital Market
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Class B Warrants
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SHIPZ
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Nasdaq Capital Market
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Large accelerated filer ☐
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Accelerated filer ☐
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Non-accelerated filer ☒
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Emerging growth company ☐
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U.S. GAAP ☒
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International Financial Reporting Standards as issued by the International Accounting Standards
Board ☐
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Other ☐
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☐ Item 17
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☐ Item 18
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☐ Yes
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☒ No
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Page
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1
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ITEM 1.
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1
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ITEM 2.
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1
|
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ITEM 3.
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1
|
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ITEM 4.
|
31 | |
ITEM 4A.
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48 | |
ITEM 5.
|
48 | |
ITEM 6.
|
68 | |
ITEM 7.
|
72 | |
ITEM 8.
|
73 | |
ITEM 9.
|
74 | |
ITEM 10.
|
75 | |
ITEM 11.
|
84 | |
ITEM 12.
|
84 | |
85 | ||
ITEM 13.
|
85 | |
ITEM 14.
|
85 | |
ITEM 15.
|
85 | |
ITEM 16.
|
86 | |
ITEM 16A.
|
86 | |
ITEM 16B.
|
86 | |
ITEM 16C.
|
86 | |
ITEM 16D.
|
87 | |
ITEM 16E.
|
87 | |
ITEM 16F.
|
87 | |
ITEM 16G.
|
87 | |
ITEM 16H.
|
87 | |
88 | ||
ITEM 17.
|
88 | |
ITEM 18.
|
88 | |
ITEM 19.
|
88 |
• |
changes in shipping industry trends, including charter rates, vessel values and factors affecting vessel supply and demand;
|
• |
changes in seaborne and other transportation patterns;
|
• |
changes in the supply of or demand for dry bulk commodities, including dry bulk commodities carried by sea, generally or in particular regions;
|
• |
changes in the number of newbuildings under construction in the dry bulk shipping industry;
|
• |
changes in the useful lives and the value of our vessels and the related impact on our compliance with loan covenants;
|
• |
the aging of our fleet and increases in operating costs;
|
• |
changes in our ability to complete future, pending or recent acquisitions or dispositions;
|
• |
our ability to achieve successful utilization of our 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 dry bulk shipping industry of V.Ships Limited, or V.Ships, and V.Ships Greece Ltd., or V.Ships Greece, our technical managers, 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, pandemics or other calamities (including, without limitation, the worldwide novel coronavirus, or COVID-19, outbreak;
|
• |
risks associated with the length and severity of the ongoing COVID-19 outbreak, including its effects on demand for dry bulk products, crew changes and the transportation thereof;
|
• |
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 dry bulk shipping industry;
|
• |
our ability to continue as a going concern; and
|
• |
other factors discussed in “Item 3. Key Information—D. Risk Factors.”
|
A.
|
Selected Financial Data
|
Year Ended December 31,
|
||||||||||||||||||||
2020
|
2019
|
2018
|
2017
|
2016
|
||||||||||||||||
Statement of Income Data:
|
||||||||||||||||||||
Vessel revenue, net
|
63,345
|
86,499
|
91,520
|
74,834
|
34,662
|
|||||||||||||||
Voyage expenses
|
(18,567
|
)
|
(36,641
|
)
|
(40,184
|
)
|
(34,949
|
)
|
(21,008
|
)
|
||||||||||
Vessel operating expenses
|
(22,347
|
)
|
(18,980
|
)
|
(20,742
|
)
|
(19,598
|
)
|
(14,251
|
)
|
||||||||||
Management fees
|
(1,052
|
)
|
(989
|
)
|
(1,042
|
)
|
(1,016
|
)
|
(895
|
)
|
||||||||||
General and administration expenses
|
(6,607
|
)
|
(5,989
|
)
|
(6,500
|
)
|
(5,081
|
)
|
(4,134
|
)
|
||||||||||
Amortization of deferred dry-docking costs
|
(2,319
|
)
|
(844
|
)
|
(634
|
)
|
(870
|
)
|
(556
|
)
|
||||||||||
Depreciation
|
(12,721
|
)
|
(11,016
|
)
|
(10,876
|
)
|
(10,518
|
)
|
(8,531
|
)
|
||||||||||
Impairment loss
|
-
|
-
|
(7,267
|
)
|
-
|
-
|
||||||||||||||
Operating income / (loss)
|
(268
|
)
|
12,040
|
4,275
|
2,802
|
(14,713
|
)
|
|||||||||||||
Interest and finance costs
|
(12,342
|
)
|
(15,216
|
)
|
(16,415
|
)
|
(12,277
|
)
|
(7,235
|
)
|
||||||||||
Interest and finance costs - related party
|
(11,083
|
)
|
(8,629
|
)
|
(8,881
|
)
|
(5,122
|
)
|
(2,616
|
)
|
||||||||||
Gain on debt refinancing
|
5,144
|
-
|
-
|
11,392
|
-
|
|||||||||||||||
Interest and other income
|
208
|
213
|
83
|
47
|
20
|
|||||||||||||||
Foreign currency exchange losses, net
|
(15
|
)
|
(52
|
)
|
(104
|
)
|
(77
|
)
|
(45
|
)
|
||||||||||
Total other expenses, net
|
(18,088
|
)
|
(23,684
|
)
|
(25,317
|
)
|
(6,037
|
)
|
(9,876
|
)
|
||||||||||
Net loss before income taxes
|
(18,356
|
)
|
(11,644
|
)
|
(21,042
|
)
|
(3,235
|
)
|
(24,589
|
)
|
||||||||||
Income taxes
|
-
|
(54
|
)
|
(16
|
)
|
-
|
(34
|
)
|
||||||||||||
Net loss
|
(18,356
|
)
|
(11,698
|
)
|
(21,058
|
)
|
(3,235
|
)
|
(24,623
|
)
|
||||||||||
Net loss per common share
|
||||||||||||||||||||
Basic and diluted
|
(0.55
|
)
|
(12.21
|
)
|
(134.39
|
)
|
(21.66
|
)
|
(287.53
|
)
|
||||||||||
Weighted average common shares outstanding
|
||||||||||||||||||||
Basic and diluted
|
33,436,278
|
958,297
|
156,692
|
149,357
|
85,637
|
As of December 31,
|
||||||||||||||||||||
2020
|
2019
|
2018
|
2017
|
2016
|
||||||||||||||||
Balance Sheet Data:
|
||||||||||||||||||||
Total current assets
|
30,547
|
21,927
|
16,883
|
19,498
|
22,329
|
|||||||||||||||
Vessels, net
|
256,737
|
253,781
|
243,214
|
254,730
|
232,109
|
|||||||||||||||
Total assets
|
295,245
|
282,551
|
267,562
|
275,705
|
257,534
|
|||||||||||||||
Total current liabilities, including current portion of long-term debt and other financial liabilities
|
30,762
|
237,281
|
36,263
|
34,460
|
21,230
|
|||||||||||||||
Total liabilities
|
199,551
|
252,693
|
246,259
|
234,392
|
226,702
|
|||||||||||||||
Common stock
|
7
|
-
|
-
|
-
|
-
|
|||||||||||||||
Total stockholders’ equity
|
95,694
|
29,858
|
21,303
|
41,313
|
30,832
|
|||||||||||||||
Shares issued and outstanding as at December 31,
|
68,314,985
|
1,681,253
|
166,636
|
154,079
|
141,966
|
Year Ended December 31,
|
||||||||||||||||||||
2020
|
2019
|
2018
|
2017
|
2016
|
||||||||||||||||
Cash Flow Data:
|
||||||||||||||||||||
Net cash provided by / (used in) operating activities
|
(9,735
|
)
|
13,108
|
5,723
|
2,782
|
(15,339
|
)
|
|||||||||||||
Net cash used in investing activities
|
(21,864
|
)
|
(12,349
|
)
|
(8,827
|
)
|
(32,992
|
)
|
(40,779
|
)
|
||||||||||
Net cash provided by / (used in) financing activities
|
39,096
|
6,351
|
(491
|
)
|
25,341
|
68,672
|
B.
|
Capitalization and Indebtedness
|
C.
|
Reasons for the Offer and Use of Proceeds
|
D.
|
Risk Factors
|
•
|
The market values of our vessels may decrease, which could limit the amount of funds that we can borrow or trigger certain financial covenants under our loan agreements and other financing
agreements, and we may incur an impairment or, if we sell vessels following a decline in their market value, a loss.
|
• |
Charter hire rates for dry bulk 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 novel coronavirus global pandemic, or other epidemics, could decrease the demand and supply for the raw materials we transport and the rates that we are paid to carry them, and could adversely
affect our business, results of operations, or financial condition.
|
• |
We are mostly dependent on spot or index-linked charters and any decrease in spot charter rates or indexes in the future may adversely affect our earnings.
|
• |
An over-supply of dry bulk vessel capacity may prolong or further depress the current low charter rates and, in turn, adversely affect our profitability.
|
• |
If economic conditions throughout the world decline, it will negatively impact our results of operations, financial condition and cash flows, and could cause the market price of our common shares
to decline.
|
• |
We are exposed to political, social and macroeconomic risks relating to the United Kingdom’s exit from the European Union.
|
• |
Risks associated with operating ocean-going vessels could affect our business and reputation, which could adversely affect our revenues and expenses.
|
• |
Rising fuel prices may adversely affect our profits.
|
• |
Our revenues are subject to seasonal fluctuations, which could affect our operating results and ability to service our debt or pay dividends.
|
• | Climate change and greenhouse gas restrictions may be imposed. |
• |
Increased scrutiny of environmental, social and governance matters may impact our business and reputation.
|
• |
Our vessels may call on ports located in or may operate in countries that are subject to restrictions 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.
|
• |
Sulfur regulations to reduce air pollution from ships have required retrofitting of vessels and may cause us to incur significant costs.
|
• |
We are subject to regulation and liability under environmental laws that could require significant expenditures and affect our cash flows and net income.
|
• |
Regulations relating to ballast water discharge may adversely affect our revenues and profitability.
|
• |
Increased inspection procedures, tighter import and export controls and new security regulations could increase costs and disrupt our business.
|
• |
Acts of piracy on ocean-going vessels have increased in frequency, which could adversely affect our business.
|
• |
The operation of dry bulk vessels has particular operational risks.
|
• |
If any of our vessels fails to maintain its class certification or fails any annual survey, intermediate survey, or special survey, or if any scheduled class survey takes longer or is more
expensive than anticipated, this could have a material adverse impact on our financial condition and results of operations.
|
• |
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.
|
• |
Maritime claimants could arrest or attach one or more of our vessels, which could interrupt our cash flows.
|
• |
Governments could requisition our vessels during a period of war or emergency, which could negatively impact our business, financial condition, results of operations, and available cash.
|
• |
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 have depended in the past on Jelco Delta Holding Corp., or Jelco, our former affiliated principal shareholder, for financing and may not be able to secure such financing in the future.
|
• |
Substantial debt levels could limit our flexibility to obtain additional financing and pursue other business opportunities.
|
• |
Our loan agreements and other financing arrangements contain, and we expect that other future loan agreements and financing arrangements will contain, restrictive covenants that may limit our
liquidity and corporate activities, which could limit our operational flexibility and have an adverse effect on our financial condition and results of operations. In addition, because of the presence of cross-default provisions in our loan
agreements and financing arrangements, a default by us under one loan could lead to defaults under multiple loans and financing agreements.
|
• |
If we fail to manage our planned growth properly, we may not be able to successfully expand our market share.
|
• |
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.
|
• |
Newbuilding projects are subject to risks that could cause delays.
|
• |
We have agreed to acquire and 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.
|
• |
If volatility in the London InterBank Offered Rate, or LIBOR, occurs, or if LIBOR is replaced as the reference rate under our debt obligations, it could affect our profitability, earnings and cash
flow.
|
• |
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.
|
• |
Rising crew costs may adversely affect our profits.
|
• |
We may not be able to attract and retain key management personnel and other employees in the shipping industry, which may negatively affect the effectiveness of our management and our results of
operations.
|
• |
Our vessels may suffer damage, and we may face unexpected repair costs, which could adversely affect our cash flow and financial condition.
|
• |
We are exposed to U.S. dollar and foreign currency fluctuations and devaluations that could harm our reported revenue and results of operations.
|
• |
We maintain cash with a limited number of financial institutions including financial institutions that may be located in Greece, which will subject us to credit risk.
|
• |
We are a holding company and we depend on the ability of our subsidiaries to distribute funds to us in order to satisfy financial obligations or to pay dividends.
|
• |
In the highly competitive international shipping industry, we may not be able to compete for charters with new entrants or established companies with greater resources, which may adversely affect
our results of operations.
|
• |
Due to our lack of fleet diversification, adverse developments in the maritime dry bulk shipping industry would adversely affect our business, financial condition, and operating results.
|
• |
We 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.
|
• |
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.
|
• |
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 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.
|
• |
Our managers are each privately held companies and there is little or no publicly available information about them.
|
• |
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.
|
• |
We may be classified as a passive foreign investment company, which could result in adverse U.S. federal income tax consequences to U.S. holders of our common stock.
|
• |
We may have to pay tax on U.S. source income, which would reduce our earnings.
|
• |
We may be subject to tax in the jurisdictions in which we or our vessel-owning subsidiaries are incorporated or operate.
|
• |
We are a “foreign private issuer,” which could make our common stock less attractive to some investors or otherwise harm our stock price.
|
• |
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.
|
• |
We conduct business in China, where the legal system is not fully developed and has inherent uncertainties that could limit the legal protections available to us.
|
• |
Changing laws and evolving reporting requirements could have an adverse effect on our business.
|
• |
A cyber-attack could materially disrupt our business.
|
• |
The smuggling of drugs or other contraband onto our vessels may lead to governmental claims against us.
|
• |
We may issue additional common shares or other equity securities without shareholder approval, which would dilute our existing shareholders’ ownership interests and may depress the market price
of our common shares.
|
• |
The market price of our common shares has been and may in the future be subject to significant fluctuations. Further, there is no guarantee of a continuing public market to resell our common
shares.
|
• | A possible “short squeeze” due to a sudden increase in demand of our common stock that largely exceeds supply may lead to further price volatility in our common shares.” |
• |
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.
|
• |
Anti-takeover provisions in our restated articles of incorporation and third 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.
|
• |
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.
|
• |
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.
|
• |
As a Marshall Islands corporation with principal executive offices in Greece, and also having subsidiaries in the Republic of the Marshall Islands and other offshore jurisdictions such as Liberia,
Bermuda and the British Virgin Islands, our operations may be subject to economic substance requirements.
|
• |
It may not be possible for investors to serve process on or enforce U.S. judgments against us.
|
• |
prevailing level of charter rates;
|
• |
general economic and market conditions affecting the shipping industry, including changes in global dry cargo commodity supply;
|
• |
types and sizes of vessels;
|
• |
number of newbuilding deliveries;
|
• |
number of vessels scrapped or otherwise removed from the world fleet;
|
• |
changes in environmental and other regulations that may limit the useful life of vessels;
|
• |
decreased costs and increases in use of other modes of transportation;
|
• |
cost of newbuildings or secondhand vessel acquisitions;
|
• |
governmental and other regulations;
|
• |
technological advances; and
|
• |
the cost of retrofitting or modifying existing ships to respond to technological advances in vessel design or equipment, changes in applicable environmental or other regulations or standards, or otherwise.
|
• |
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 dry bulk shipping industry due to the substantial decrease in vessel values; and
|
• |
declaration of bankruptcy by some operators, charterers and vessel owners.
|
• |
The pandemic had a negative impact on charter rates and therefore on our voyage revenues in 2020. We attribute the decrease in spot market charter rates, as compared with 2019, in part to the outbreak of the novel
coronavirus and the reduction in demand for iron ore imports due to the disruption of regular inventory cycles.
|
• |
Our vessels have been subject to quarantine checks upon arriving at certain ports. This has functionally limited the amount of cargo that we (and our competitors) are able to move because quarantine checks on arriving
vessels have caused delays in loading and delivery of cargoes.
|
• |
Due to quarantine restrictions placed on persons, prohibitions of crew changes by local authorities and additional procedures using commercial aviation and other forms of public transportation, our crew has had
difficulty embarking and disembarking on our ships. This has not thus far materially affected our ability to crew out vessels, although it has impacted our costs for rotating our crew.
|
• |
Besides reducing demand for cargo, the novel coronavirus pandemic may functionally reduce the amount of cargo that we and our competitors are able to move because countries worldwide have imposed quarantine checks and
hygiene measures on arriving vessels and implementation of remote working arrangements, which have caused delays in loading and delivery of cargoes. It is also possible that our charterers may try to invoke force majeure clauses as a result of
such delays or other disruptions. Delays have also been reported at Chinese shipyards for newbuildings, drydocks and other works, in vessel inspections and related certifications by class societies, customers or government agencies, as well as
delays and shortages or a lack of access to required spare parts and lack of berths or shortages in labor, which may in turn delay any repairs to, or scheduled or unscheduled maintenance or modifications to, or drydocking of, our vessels.
|
• |
Companies have also taken precautions, such as requiring employees to work remotely, imposing travel restrictions and temporarily closing businesses while some other businesses have been required to close entirely.
These restrictions, and future prevention and mitigation measures, are likely to have an adverse impact on global economic conditions, which could materially and adversely affect our future operations. Potential health impact on our employees
and on the workforces of our customers and business partners may also bring disruptions to our operations while additional costs related to new regulations, directives or practices implemented in response to the pandemic may adversely affect
our business. Employees are encouraged or even required to operate remotely which significantly increases the risk of cyber security attacks.
|
• |
The pandemic may also affect personnel operating payment systems through which we receive revenues from the chartering of our vessels or pay for our expenses, resulting in delays in payments. Organizations across
industries, including ours, are rightly focusing on their employees’ well-being while ensuring that their operations continue undisrupted and, at the same time, adapting to new ways of operating. As such, employees required to operate remotely
may significantly increase the risk of cybersecurity attacks.
|
• |
In addition, public health threats such as COVID-19, in any area, including areas where we do not operate, could disrupt international transportation, including the imposition of quarantine restrictions placed on
travelers. Our crews generally work on a rotation basis, relying exclusively on international air transport for crew changes plan fulfillment. Any such disruptions could impact the cost of rotating our crew further, and possibly impact our
ability to maintain a full crew synthesis onboard all our vessels at any given time. Additionally, we are particularly vulnerable to our crew members getting sick, as if even one of our crew members gets sick, local authorities could require us
to detain and quarantine the vessel and its crew for an unspecified amount of time, disinfect and fumigate the vessels, or take similar precautions, which would add costs, decrease our utilization, and substantially disrupt our cargo
operations. If a vessel’s entire crew fell seriously ill, we may have substantial difficulty operating its vessel and may necessitate extraordinary external aid. Any of these public health threats and related consequences could adversely affect
our financial results.
|
• |
Potential shortages or a lack of access to required spare parts for our vessels, or potential delays in any repairs to, or scheduled or unscheduled maintenance or modifications or dry docking of, our vessels, as a
result of a lack of berths available by shipyards from a shortage in labor or due to other business disruptions.
|
• |
Delays in vessel inspections and related certifications by class societies customers or government agencies.
|
• |
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.
|
• |
crew strikes and/or boycotts;
|
• |
the damage or destruction of vessels due to marine disaster;
|
• |
piracy or other detentions;
|
• |
environmental accidents;
|
• |
cargo and property losses or damage; and
|
• |
business interruptions caused by mechanical failure, human error, war, terrorism, political action in various countries, labor strikes or adverse weather conditions.
|
• |
our ability to obtain additional financing, if necessary, for working capital, capital expenditures, acquisitions or other purposes may be impaired, or such financing may be unavailable on favorable terms, or at all;
|
• |
we may need to use a substantial portion of our cash from operations to make principal and interest payments on our bank debt and financing liabilities, reducing the funds that would otherwise be available for
operations, future business opportunities and any future dividends to our shareholders;
|
• |
our debt level could make us more vulnerable to competitive pressures or a downturn in our business or the economy generally than our competitors with less debt; and
|
• |
our debt level may limit our flexibility in responding to changing business and economic conditions.
|
• |
generate excess cash flow so that we can invest without jeopardizing our ability to cover current and foreseeable working capital needs, including debt service;
|
• |
finance our operations;
|
• |
locate and acquire suitable vessels;
|
• |
identify and consummate acquisitions or joint ventures;
|
• |
integrate any acquired businesses or vessels successfully with our existing operations;
|
• |
hire, train and retain qualified personnel and crew to manage and operate our growing business and fleet; and
|
• |
expand our customer base.
|
• |
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.
|
• |
47,916 common shares issuable upon the exercise of outstanding Class A warrants at an exercise price of $480.00 per share, which warrants trade on the Nasdaq Capital Market under the ticker symbol “SHIPW” and expire
in December 2021;
|
• |
301,875 common shares issuable upon the exercise of outstanding Class B warrants at an exercise price of $16.00 per share, which warrants trade on the Nasdaq Capital Market under the ticker symbol “SHIPZ” and expire
in May 2022;
|
• |
113,970 common shares issuable upon the exercise of Class B warrants issued to Jelco pursuant to a Securities Purchase Agreement dated May 9, 2019, at an exercise price of $16.00 per share;
|
• |
13,125 common shares issuable upon the exercise of a representative’s warrant issued to Maxim Group LLC in connection with our public offering which closed on May 13, 2019, at an exercise price per share of $16.00,
which warrant expires in May 2022;
|
• |
110,281 common shares issuable upon the exercise of a representative’s warrant issued to Maxim Group LLC in connection with our public offering which closed on April 2, 2020, at an exercise price per share of $3.40,
which warrant expires in March 2023;
|
• |
273,046 common shares issuable upon the exercise of outstanding Class D warrants at an exercise price of $1.60 per share, which warrants were issued in our public offering which closed on April 2, 2020 and expire in
April 2025;
|
• |
8,766,713 common shares issuable upon the exercise of outstanding Class E Warrants at an exercise price of $0.70 per share, which warrants were issued in our underwritten public offering which closed on August 20,
2020 and which expire in August 2025;
|
• |
32,262,501 common shares issuable upon the conversion of outstanding convertible promissory notes that we issued to Jelco, at a conversion price of $1.20 per common share;
|
• |
7,986,913 common shares issuable upon the exercise of the common share purchase warrant that we issued to Jelco on January 8, 2021, at an exercise price of $0.70 per common share, which expires in January 2026; and
|
• |
8,571,428 common shares, which could be issued upon the exercise by Jelco of an option (on or before April 24, 2021, being 45 days after the effectiveness of the registration statement dated February 19, 2021), to
purchase up to 4,285,714 additional units at a price of $0.70 per unit, each unit to immediately separate upon its issuance into one common share and one warrant to purchase a common share.
|
• |
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.
|
• |
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
|
A.
|
History and Development of the Company
|
B.
|
Business Overview
|
Vessel Name
|
Year Built
|
Dwt
|
Flag
|
Yard
|
Type of Employment
|
Fellowship
|
2010
|
179,701
|
MI
|
Daewoo
|
Spot(1)
|
Championship
|
2011
|
179,238
|
MI
|
Sungdong
|
T/C Index Linked(2)
|
Partnership
|
2012
|
179,213
|
MI
|
Hyundai
|
T/C Index Linked(3)
|
Knightship
|
2010
|
178,978
|
LIB
|
Hyundai
|
T/C Index Linked(4)
|
Lordship
|
2010
|
178,838
|
LIB
|
Hyundai
|
T/C Index Linked(5)
|
Gloriuship
|
2004
|
171,314
|
MI
|
Hyundai
|
T/C Index Linked(6)
|
Leadership
|
2001
|
171,199
|
BA
|
Koyo-Imabari
|
Spot
|
Geniuship
|
2010
|
170,058
|
MI
|
Sungdong
|
T/C Index Linked (7)
|
Premiership
|
2010
|
170,024
|
IoM
|
Sungdong
|
T/C Index Linked(8)
|
Squireship
|
2010
|
170,018
|
LIB
|
Sungdong
|
T/C Index Linked(9)
|
Goodship
|
2005
|
177,536
|
LIB
|
Mitsui Engineering
|
Spot
|
(1) |
This vessel has been fixed on T/C with Anglo American, a leading global mining company, and will be delivered to the charterer in the second quarter of 2021 for a period of minimum 12 to maximum 15 months from the
delivery date. The net daily charter hire is calculated at an index linked rate based on the five T/C routes of the BCI. In addition, the time charter provides the option to convert the index linked rate to a fixed rate for a period of minimum
3 to maximum 12 months based on the Capesize Forward Freight Agreement rate, or FFA for the selected period.
|
(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 24 to 27 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 BCI plus a daily scrubber premium of $1,740 net. In addition, the time charter provides us with the option to convert the index linked rate to
a fixed rate for a period of between three and 12 months priced at the then prevailing Capesize FFA for the selected period.
|
(3) |
This vessel is being chartered by a major European utility and energy company and was delivered to the charterer on September 11, 2019, for a period of minimum 33 to maximum 37 months with an optional period of about
11 to maximum 13 months. The net daily charter hire is calculated at an index linked rate based on the five T/C routes rate of the BCI. 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 FFA.
|
(4) |
This vessel is chartered by Glencore and was delivered to the charterer on May 15, 2020 for a period of about 36 to about 42 months with two additional periods of minimum 11 to maximum 13 months at the charterer’s
option. The net daily charter hire is calculated at an index linked rate based on the 5 T/C routes rate of the BCI.
|
(5) |
This vessel is being chartered by a major European utility and energy company and was delivered to the charterer on August 4, 2019, for a period of minimum 33 to maximum 37 months with an optional period of about 11
to maximum 13 months. The net daily charter hire is calculated at an index linked rate based on the five T/C routes rate of the BCI plus a net daily scrubber premium of $3,735 until May 2021. 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 FFA.
|
(6) |
This vessel is chartered by Pacbulk, a dry bulk charter operator, and was delivered to the charterer on April 23, 2020 for a period of about 10 to about 14 months. On December 22, 2020 a second extension period was
agreed up to minimum January 1, 2022 to maximum April 30, 2022. The net daily charter hire is calculated at an index linked rate based on the five T/C routes of the BCI. In addition, the time charter provides the option to convert the index
linked rate to a fixed rate for a period of minimum 3 to maximum 12 months based on the Capesize FFA for the selected period.
|
(7) |
This vessel has been fixed on T/C with Pacbulk and was delivered to the charterer on March 23, 2021 for a period of about 10 to about 14 months. The net daily charter hire is calculated at an index linked rate based
on the five T/C routes of the BCI. In addition, the time charter provides the option to convert the index linked rate to a fixed rate for a period of minimum 3 to maximum 12 months based on the Capesize FFA for the selected period.
|
(8) |
This vessel is chartered by Glencore and was delivered to the charterer on November 29, 2019 for a period of minimum 36 to maximum 42 months with two additional periods of minimum 11 to maximum 13 months at the
charterer’s option. The net daily charter hire is calculated at an index linked rate based on the 5 T/C routes rate of the BCI plus a net daily scrubber premium of $2,055.
|
(9) |
This vessel is chartered by Glencore and was delivered to the charterer on December 19, 2019 for a period of minimum 36 to maximum 42 months with two additional periods of minimum 11 to maximum 13 months at the
charterer’s option. The net daily charter hire is calculated at an index linked rate based on the 5 T/C routes rate of the BCI plus a net daily scrubber premium of $2,055.
|
Customer
|
2020
|
2019
|
2018
|
|||
A
|
23%
|
-
|
-
|
|||
B
|
-
|
19%
|
26%
|
|||
C
|
-
|
18%
|
21%
|
|||
D
|
18%
|
15%
|
-
|
|||
E
|
-
|
-
|
11%
|
|||
Total
|
41%
|
52%
|
58%
|
C.
|
Organizational Structure
|
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
|
Traders Shipping Co.
|
Republic of the Marshall Islands
|
Gladiator Shipping Co.
|
Republic of the Marshall Islands
|
Premier Marine Co.
|
Republic of the Marshall Islands
|
Emperor Holding Ltd.
|
Republic of the Marshall Islands
|
Champion Marine Co.
|
Republic of the Marshall Islands
|
Fellow Shipping Co.
|
Republic of the Marshall Islands
|
Patriot Shipping Co.
|
Republic of the Marshall Islands
|
Squire Ocean Navigation Co.
|
Liberia
|
Flag Ocean Navigation Co.
|
Liberia
|
Lord Ocean Navigation Co.
|
Liberia
|
Knight Ocean Navigation Co.
|
Liberia
|
Good Ocean Navigation Co.
|
Liberia
|
Hellas Ocean Navigation Co.
|
Liberia
|
Partner Shipping Co. Limited
|
Malta
|
Pembroke Chartering Services Limited
|
Malta
|
Martinique International Corp.
|
British Virgin Islands
|
Harbour Business International Corp.
|
British Virgin Islands
|
Maritime Grace Shipping Limited
|
British Virgin Islands
|
Maritime Glory Shipping Limited
|
British Virgin Islands
|
Maritime Capital Shipping Limited
|
Bermuda
|
Maritime Capital Shipping (HK) Limited
|
Hong Kong
|
D.
|
Property, Plants and Equipment
|
A.
|
Operating Results
|
• |
number of vessels owned and operated;
|
• |
voyage charter rates;
|
• |
time charter trip rates;
|
• |
period time charter rates;
|
• |
the nature and duration of our voyage charters;
|
• |
vessels repositioning;
|
• |
vessel operating expenses and direct voyage costs;
|
• |
maintenance and upgrade work;
|
• |
the age, condition and specifications of our vessels;
|
• |
issuance of our common shares and other securities;
|
• |
amount of debt obligations; and
|
• |
financing costs related to debt obligations.
|
(In thousands of U.S. Dollars, except for share and per share data)
|
Year ended December
31,
|
Change
|
||||||||||||||
2020
|
2019
|
Amount
|
%
|
|||||||||||||
Revenues:
|
||||||||||||||||
Vessel revenue, net
|
63,345
|
86,499
|
(23,154
|
)
|
(27
|
)%
|
||||||||||
Expenses:
|
||||||||||||||||
Voyage expenses
|
(18,567
|
)
|
(36,641
|
)
|
18,074
|
(49
|
)%
|
|||||||||
Vessel operating expenses
|
(22,347
|
)
|
(18,980
|
)
|
(3,367
|
)
|
18
|
%
|
||||||||
Management fees
|
(1,052
|
)
|
(989
|
)
|
(63
|
)
|
6
|
%
|
||||||||
General and administration expenses
|
(6,607
|
)
|
(5,989
|
)
|
(618
|
)
|
10
|
%
|
||||||||
Depreciation and amortization
|
(15,040
|
)
|
(11,860
|
)
|
(3,180
|
)
|
27
|
%
|
||||||||
Operating (loss) / income
|
(268
|
)
|
12,040
|
(12,308
|
)
|
(102
|
)%
|
|||||||||
Other expenses:
|
||||||||||||||||
Interest and finance costs
|
(23,425
|
)
|
(23,845
|
)
|
420
|
(2
|
)%
|
|||||||||
Gain on debt refinancing
|
5,144
|
-
|
5,144
|
-
|
||||||||||||
Other, net
|
193
|
161
|
32
|
20
|
%
|
|||||||||||
Total other expenses, net:
|
(18,088
|
)
|
(23,684
|
)
|
5,596
|
(24
|
)%
|
|||||||||
Net loss before income taxes
|
(18,356
|
)
|
(11,644
|
)
|
(6,712
|
)
|
58
|
%
|
||||||||
Income taxes
|
-
|
(54
|
)
|
54
|
(100
|
)%
|
||||||||||
Net loss
|
(18,356
|
)
|
(11,698
|
)
|
(6,658
|
)
|
57
|
%
|
||||||||
Net loss per common share, basic and diluted
|
(0.55
|
)
|
(12.21
|
)
|
||||||||||||
Weighted average number of common shares outstanding, basic and diluted
|
33,436,278
|
958,297
|
Year Ended December 31,
|
||||||||||||
Fleet Data:
|
2020
|
2019
|
2018
|
|||||||||
Ownership days
|
3,807
|
3,650
|
3,931
|
|||||||||
Available days(1)
|
3,755
|
3,417
|
3,918
|
|||||||||
Operating days(2)
|
3,747
|
3,393
|
3,902
|
|||||||||
Fleet utilization
|
98.4
|
%
|
93
|
%
|
99
|
%
|
||||||
Average Daily Results:
|
||||||||||||
TCE rate(3)
|
$
|
11,950
|
$
|
14,694
|
$
|
13,156
|
||||||
Daily Vessel Operating Expenses(4)
|
$
|
5,709
|
$
|
5,172
|
$
|
5,198
|
(1) |
During the year ended December 31, 2020, we incurred 52 off-hire days for a scheduled dry-docking and scrubber installation on one of our vessels. During the year ended
December 31, 2019, we incurred 233 off-hire days for five scheduled dry-dockings and scrubber installation on five of our vessels.
|
(2) |
During the year ended December 31, 2020, we incurred 8 off-hire days due to unforeseen circumstances. During the year ended December 31, 2019, we incurred 24 off-hire days
due to 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.
|
Year Ended December 31,
|
||||||||||||
(In thousands of US Dollars, except operating days and TCE rate)
|
2020
|
2019
|
2018
|
|||||||||
Net revenues from vessels
|
$
|
63,345
|
$
|
86,499
|
$
|
91,520
|
||||||
Voyage expenses
|
(18,567
|
)
|
(36,641
|
)
|
(40,184
|
)
|
||||||
Net operating revenues
|
$
|
44,778
|
$
|
49,858
|
$
|
51,336
|
||||||
Operating days
|
3,747
|
3,393
|
3,902
|
|||||||||
Daily time charter equivalent rate
|
$
|
11,950
|
$
|
14,694
|
$
|
13,156
|
(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,
|
|||||||||||
2020
|
2019
|
2018
|
||||||||||
Vessel operating expenses
|
$
|
22,347
|
$
|
18,980
|
$
|
20,742
|
||||||
Less: Pre-delivery expenses
|
(611
|
)
|
(104
|
)
|
(309
|
)
|
||||||
Vessel operating expenses before pre-delivery expenses
|
21,736
|
18,876
|
20,433
|
|||||||||
Ownership days
|
3,807
|
3,650
|
3,931
|
|||||||||
Daily Vessel Operating Expenses
|
$
|
5,709
|
$
|
5,172
|
$
|
5,198
|
• |
reports by industry analysts and data providers that focus on our industry and related dynamics affecting vessel values;
|
• |
news and industry reports of similar vessel sales;
|
• |
offers that we may have received from potential purchasers of our vessels; and
|
• |
vessel sale prices and values of which we are aware through both formal and informal communications with shipowners, shipbrokers, industry analysts and various other shipping industry participants and observers.
|
Vessel
|
Year Built
|
Dwt
|
Carrying Value as of
December 31, 2020
(in millions of U.S. dollars)
|
Carrying Value as of
December 31, 2019
(in millions of U.S. dollars)
|
|||||
Fellowship
|
2010
|
179,701
|
26.1
|
*
|
27.3
|
*
|
|||
Championship
|
2011
|
179,238
|
37.5
|
*
|
39.4
|
*
|
|||
Partnership
|
2012
|
179,213
|
31.9
|
*
|
33.3
|
*
|
|||
Knightship
|
2010
|
178,978
|
21.3
|
*
|
18.4
|
||||
Lordship
|
2010
|
178,838
|
21.8
|
*
|
22.7
|
||||
Gloriuship
|
2004
|
171,314
|
13.0
|
*
|
13.8
|
*
|
|||
Leadership
|
2001
|
171,199
|
11.4
|
*
|
12.5
|
*
|
|||
Geniuship
|
2010
|
170,057
|
22.3
|
*
|
23.3
|
*
|
|||
Premiership
|
2010
|
170,024
|
28.2
|
*
|
29.5
|
*
|
|||
Squireship
|
2010
|
170,018
|
32.0
|
*
|
33.6
|
*
|
|||
Goodship
|
2005
|
177,536
|
11.2
|
-
|
|||||
TOTAL
|
256.7
|
253.8
|
B.
|
Liquidity and Capital Resources
|
(In thousands of US Dollars)
|
Year ended December 31,
|
|||||||||||
2020
|
2019
|
2018
|
||||||||||
Cash Flow Data:
|
||||||||||||
Net cash (used in) / provided by operating activities
|
(9,735
|
)
|
13,108
|
5,723
|
||||||||
Net cash used in investing activities
|
(21,864
|
)
|
(12,349
|
)
|
(8,827
|
)
|
||||||
Net cash provided by / (used in) financing activities
|
39,096
|
6,351
|
(491
|
)
|
•
|
The Company prepaid $6.5 million of the principal amount of the Second Jelco Loan Facility on December 31, 2020.
|
• |
The Company granted Jelco an option, exercisable only once until 45 days after the effectiveness of the resale registration statement described below, to purchase up to 4,285,714 additional Units at a price of $0.70
per Unit in exchange for the forgiveness of principal under the Second Jelco Loan Facility in an amount equal to the aggregate purchase price of the Units.
|
• |
The Company granted Jelco customary registration rights as described below.
|
• |
The Company and Jelco agreed to amend the terms of each of the Jelco Loan Facilities and Jelco Notes pursuant to the omnibus supplemental agreements described below, including to extend the maturity date to December
31, 2024, to reduce the annual interest rate to 5.5% and to amend the conversion price under the Jelco Notes to $1.20 per common share.
|
• |
Jelco agreed to a standstill undertaking, applicable for at least as long as the common shares are listed on Nasdaq, precluding any acquisition of the common shares, including through the exercise of warrants or the
conversion of the Jelco Notes, to the extent that it would result in Jelco or its affiliates beneficially owning, including controlling the voting or disposition of, more than 9.99% of the outstanding common shares after giving effect to the
acquisition.
|
• |
Jelco waived any and all prior breaches and events of default under the Jelco Loan Facilities and Jelco Notes.
|
(i)
|
accrued and unpaid interest of an aggregate of $1.92 million through December 31, 2020 was deemed fully and finally settled;
|
(ii) |
the interest rate payable from January 1, 2021 through the maturity date was fixed at 5.5% per annum;
|
(iii) |
the maturity date was extended to December 31, 2024;
|
(iv) |
the addition of cash sweep provisions whereby the Company will make prepayments semi-annually commencing the fiscal quarter ending March 31, 2021 of the greater of the Company’s cash balances in excess of $25.0
million or the revenue of the Company’s Capesize fleet attributable to a time charter equivalent rate in excess of $18,000 but not exceeding $21,000;
|
(v) |
a mandatory prepayment on each of December 31, 2022 and December 31, 2023 of $8.0 million less any prepayments previously made under the cash sweep provisions;
|
(vi) |
an option to apply the proceeds of any cash exercise of the warrants issued to Jelco as part of Units as a prepayment;
|
(vii) |
an amendment to the existing mandatory prepayment provisions in the First Jelco Loan Facility and Fourth Jelco Loan Facility such that the Company will make a mandatory prepayment of an amount equal to 25% of the net
proceeds of any future public offering and any cash exercise of the Company’s outstanding Class E warrants (the prepayment obligations set forth in (iv)-(vii) above, the “Mandatory Prepayment Obligations”); and
|
(viii) |
a cap of $12.0 million on all Mandatory Prepayment Obligations in any calendar year.
|
(i) |
accrued and unpaid interest of an aggregate of $2.43 million through December 31, 2020 was deemed fully and finally settled;
|
(ii) |
the interest rate payable from January 1, 2021 through the maturity date was fixed at 5.5% per annum;
|
(iii) |
the maturity date was extended to December 31, 2024;
|
(iv) |
the conversion price was amended to $1.20 per common share;
|
(v) |
the existing conversion provision was amended to include a beneficial ownership limitation of 9.99% of the number of the common shares outstanding immediately after giving effect to the issuance of common shares
issuable upon conversion; and
|
(vi) |
the addition of provisions analogous to the Mandatory Prepayment Obligations requiring mandatory prepayment of the Jelco Notes following the full repayment of the Jelco Loan Facilities, and a cap of $12.0 million on
all such mandatory prepayment obligations in any calendar year.
|
C.
|
Research and development, patents and licenses, etc.
|
D.
|
Trend Information
|
E.
|
Off-balance Sheet Arrangements
|
F.
|
Tabular Disclosure of Contractual Obligations
|
Contractual Obligations
|
Total
|
less than 1 year
|
1-3 years
|
3-5 years
|
more than
5 years
|
|||||||||||||||
Long-term debt and other financial liabilities
|
$
|
173,289
|
$
|
20,412
|
$
|
114,687
|
$
|
31,980
|
$
|
6,210
|
||||||||||
Convertible notes
|
38,715
|
-
|
-
|
38,715
|
-
|
|||||||||||||||
Interest expense – long term debt and other financial liabilities
|
27,545
|
9,155
|
13,439
|
4,824
|
127
|
|||||||||||||||
Interest expense - convertible notes
|
$
|
8,517
|
2,129
|
4,259
|
2,129
|
-
|
||||||||||||||
Office rent
|
1,068
|
147
|
295
|
295
|
331
|
|||||||||||||||
Total
|
$
|
249,134
|
$
|
31,843
|
$
|
132,680
|
$
|
77,943
|
$
|
6,668
|
G.
|
Safe Harbor
|
A.
|
Directors and Senior Management
|
Name
|
Age
|
Position
|
Director Class
|
|||
Stamatios Tsantanis
|
49
|
Chairman, Chief Executive Officer & Director
|
A (term expires in 2022)
|
|||
Stavros Gyftakis
|
42
|
Chief Financial Officer
|
||||
Christina Anagnostara
|
50
|
Director
|
B (term expires in 2023)
|
|||
Elias Culucundis
|
78
|
Director*
|
A (term expires in 2022)
|
|||
Dimitrios Anagnostopoulos
|
74
|
Director*
|
C (term expires in 2021)
|
|||
Ioannis Kartsonas
|
49
|
Director*
|
C (term expires in 2021)
|
B.
|
Compensation
|
C.
|
Board Practices
|
D.
|
Employees
|
E.
|
Share Ownership
|
A.
|
Major Shareholders
|
Identity of Person or Group
|
Number
of
Shares
Owned
|
Percent
of
Class
|
||||||
Claudia Restis(1)
|
57,417,623
|
|
9.99
|
%
|
||||
9,400,000
|
5.8
|
%
|
||||||
Stamatios Tsantanis(3)
|
—
|
*
|
||||||
Stavros Gyftakis(3)
|
—
|
*
|
||||||
Christina Anagnostara(3)
|
—
|
*
|
||||||
Elias Culucundis(3)
|
—
|
*
|
||||||
Dimitrios Anagnostopoulos
|
—
|
*
|
||||||
Ioannis Kartsonas(3)
|
—
|
*
|
||||||
Directors and executive officers as a group (6 individuals)(3)
|
2,782,150
|
1.8
|
%
|
(1) |
Based on the Schedule 13D/A filed by Jelco, Comet and Claudia Restis on February 8, 2021, Claudia Restis may be deemed to beneficially own 57,414,267 of our common shares through Jelco and 3,356 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) 113,970 common shares issuable upon exercise of the Class B Warrants held by Jelco,
(ii) 32,262,501 common shares issuable upon conversion of the Jelco Notes, (iii) 7,986,913 common shares issuable upon exercise of a common share purchase warrant at an exercise price of $0.70 per common share issued on January 8, 2021 and
(iv) 4,285,714 common shares, and 4,285,714 common shares underlying common share purchase warrants, which Jelco has an option to acquire pursuant to the Securities Purchase Agreement, in each case subject to a 9.99% beneficial ownership
blocker. The number of shares owned reported in this paragraph and in the table above do not give effect to such 9.99% beneficial ownership blockers, but the percentages in the table above do give effect to such beneficial ownership blockers.
Calculation of percent of class beneficially owned by such person is based on 156,181,613 common shares outstanding as of March 30, 2021 and any additional shares
that such person may be deemed to beneficially own in accordance with Rule 13d-3 under the Exchange Act. In our annual report for the fiscal year ended December 31, 2019, filed with the Commission on March 5, 2020, we reported beneficial
ownership by Claudia Restis of 37.0% of our issued and outstanding common shares. In our annual report for the fiscal year ended December 31, 2018, filed with the Commission on March 25, 2019, we reported beneficial ownership by Claudia
Restis of 70.2% of our issued and outstanding common shares. In our annual report for the fiscal year ended December 31, 2017, filed with the Commission on March 7, 2018, we reported beneficial ownership by Claudia Restis of 73.6% of our
issued and outstanding common shares.
|
(2) |
Based on information reported on a Schedule 13G filed with the Commission on February 12, 2021 jointly filed by Lind Global Macro Fund, LP, Lind Global Partners LLC and Jeff Easton. The number of shares owned
reported in the table above does not give effect to the 9.99% beneficial ownership blockers contained in certain warrants held by such beneficial owners as described in the Schedule 13G, but the percentages in the table above do give effect
to such beneficial ownership blockers. Calculation of percent of class beneficially owned by such person is based on 156,181,613 common shares outstanding as of March 30, 2021 and any additional shares that such person may be deemed to beneficially own in accordance with Rule 13d-3 under the Exchange Act. In our annual reports for the fiscal years ended December 31, 2020, December 31, 2019 and
December 31, 2018, we did not report that Lind Global Macro Fund, LP beneficially owned five percent or more of our issued and outstanding common shares.
|
(3) |
Calculation of percent of class beneficially owned by each such person is based on 156,181,613 common shares outstanding as of March 30,
2021 and any additional shares that such person may be deemed to beneficially own in accordance with Rule 13d-3 under the Exchange Act.
|
B.
|
Related Party Transactions
|
C.
|
Interests of Experts and Counsel
|
A.
|
Consolidated Statements and Other Financial Information
|
B.
|
Significant Changes
|
A.
|
Offer and Listing Details
|
B.
|
Plan of Distribution
|
C.
|
Markets
|
D.
|
Selling Shareholders
|
E.
|
Dilution
|
F.
|
Expenses of the Issue
|
A.
|
Share Capital
|
B.
|
Memorandum and Articles of Incorporation
|
C.
|
Material contracts
|
D.
|
Exchange controls
|
E.
|
Taxation
|
• |
an individual citizen or resident of the United States;
|
• |
a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) that is created or organized (or treated as created or organized) in or under the laws of the United States, any state
thereof or the District of Columbia;
|
• |
an estate whose income is includible in gross income for U.S. federal income tax purposes regardless of its source; or
|
• |
a trust if (i) a U.S. court can exercise primary supervision over the trust's administration and one or more U.S. persons are authorized to control all substantial decisions of the trust, or (ii) it has a valid
election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.
|
• |
financial institutions or “financial services entities”;
|
• |
broker-dealers;
|
• |
taxpayers who have elected mark-to-market accounting for U.S. federal income tax purposes;
|
• |
tax-exempt entities;
|
• |
governments or agencies or instrumentalities thereof;
|
• |
insurance companies;
|
• |
regulated investment companies;
|
• |
real estate investment trusts;
|
• |
certain expatriates or former long-term residents of the United States;
|
• |
persons that actually or constructively own 10% or more (by vote or value) of our shares;
|
• |
persons that own shares through an “applicable partnership interest”;
|
• |
persons required to recognize income for U.S. federal income tax purposes no later than when such income is reported on an “applicable financial statement”;
|
• |
persons that hold our common stock 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.
|
• |
we are organized in a foreign country (our “country of organization”) that grants an “equivalent exemption” to corporations organized in the United States and one of the following statements is true:
|
• |
more than 50% of the value of our stock is owned, directly or indirectly, by “qualified shareholders,” that are persons (i) who are “residents” of our country of organization or of another foreign country that
grants an “equivalent exemption” to corporations organized in the United States, and (ii) we satisfy certain substantiation requirements, which we refer to as the “50% Ownership Test”; or
|
• |
our stock is “primarily” and “regularly” traded on one or more established securities markets in our country of organization, in another country that grants an “equivalent exemption” to United States corporations,
or in the United States, which we refer to as the “Publicly-Traded Test.”
|
• |
we have, or are considered to have, a fixed place of business in the United States involved in the earning of shipping income; and
|
• |
substantially all of our U.S. source gross shipping income is attributable to regularly scheduled transportation, such as the operation of a vessel that follows a published schedule with repeated sailings at regular
intervals between the same points for voyages that begin or end in the United States, or, in the case of income from the leasing of a vessel, is attributable to a fixed place of business in the United States.
|
• |
at least 75% of our gross income for such taxable year consists of passive income (e.g., dividends, interest, capital gains and rents derived other than in the active conduct of a rental business); or
|
• |
at least 50% of the average value of the assets held by us during such taxable year produce, or is held for the production of, passive income.
|
• |
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.
|
• |
fails to provide an accurate taxpayer identification number;
|
• |
is notified by the IRS that backup withholding is required; or
|
• |
fails in certain circumstances to comply with applicable certification requirements.
|
F.
|
Dividends and paying agents
|
G.
|
Statement by experts
|
H.
|
Documents on display
|
I.
|
Subsidiary information
|
2020
|
2019
|
|||||||
Audit fees
|
$
|
205,000
|
$
|
195,000
|
||||
Audit related fees
|
234,000
|
80,000
|
||||||
Tax fees
|
-
|
-
|
||||||
All other fees
|
-
|
-
|
||||||
Total fees
|
$
|
439,000
|
$
|
275,000
|
• |
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 restated articles of incorporation and third 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 third 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.
|
Exhibit Number
|
Description
|
1.1
|
|
1.2
|
|
1.3
|
|
2.1
|
|
2.2
|
|
2.3
|
|
2.4
|
|
2.5
|
|
2.6
|
|
2.7
|
|
4.1
|
|
4.2
|
|
4.3
|
|
4.4
|
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
|
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
|
|
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
|
|
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
|
|
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
|
|
4.90
|
|
4.91
|
|
4.92
|
|
4.93
|
|
4.94
|
|
4.95
|
|
4.96
|
|
4.97
|
|
4.98
|
|
4.99
|
|
4.100
|
|
4.101
|
|
4.102
|
4.103
|
|
4.104
|
|
4.105
|
|
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, 2020, formatted in Extensible Business
Reporting Language (XBRL)*
|
(1) Consolidated Balance Sheets as of December 31, 2020 and 2019;
|
|
(2) Consolidated Statements of Loss for the years ended December 31, 2020, 2019 and 2018;
|
|
(3) Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2020, 2019 and 2018; and
|
|
(4) Consolidated Statements of Cash Flows for the years ended December 31, 2020, 2019 and 2018.
|
|
(5) Notes to Consolidated Financial Statements |
(1)
|
Incorporated herein by reference to Exhibit 3.1 to the registrant's report on Form 6-k filed with the Commission on August 30, 2019.
|
(2)
|
Incorporated herein by reference to Exhibit 3.2 to the registrant’s registration statement on Form F-1 filed with the Commission on February 19, 2021.
|
(3)
|
Incorporated herein by reference to Exhibit 99.2 to the registrant’s report on Form 6-K furnished with the Commission on September 25, 2020.
|
(4)
|
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.
|
(5)
|
Incorporated herein by reference to Exhibit 4.2 to the registrant's registration statement on Form F-1/A filed with the Commission on December 6, 2016.
|
(6)
|
Incorporated herein by reference to Exhibit 4.2 to the registrant's registration statement on Form F-1/A filed with the Commission on May 2, 2019.
|
(7)
|
Incorporated herein by reference to Exhibit 4.2 to the registrant's registration statement on Form F-1/A filed with the Commission on May 2, 2019.
|
(8)
|
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.
|
(9)
|
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.
|
(10)
|
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.
|
(11)
|
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.
|
(12)
|
Incorporated herein by reference to Exhibit 10.5 to the registrant’s registration statement on Form F-1 filed with the Commission on February 19, 2021.
|
(13)
|
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.
|
(14)
|
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.
|
(15)
|
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.
|
(16)
|
Incorporated herein by reference to Exhibit 4.10 to the registrant's annual report on Form 20-F filed with the Commission on March 25, 2019.
|
(17)
|
Incorporated herein by reference to Exhibit 4.11 to the registrant's annual report on Form 20-F filed with the Commission on March 25, 2019.
|
(18)
|
Incorporated herein by reference to Exhibit 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 4.19 to the registrant's annual report on Form 20-F filed with the Commission on March 25, 2019.
|
(26)
|
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.
|
(27)
|
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.
|
(28)
|
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.
|
(29)
|
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.
|
(30)
|
Incorporated herein by reference to Exhibit 4.24 to the registrant’s annual report on Form 20-F filed with the Commission on March 5, 2020.
|
(31)
|
Incorporated herein by reference to Exhibit 10.24 to the registrant’s registration statement on Form F-1 filed with the Commission on March 20, 2020.
|
(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 April 13, 2015.
|
(33)
|
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.
|
(34)
|
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.
|
(35)
|
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.
|
(36)
|
Incorporated herein by reference to Exhibit 10.28 to the registrant's registration statement on Form F-1/A filed with the Commission on April 5, 2019.
|
(37)
|
Incorporated herein by reference to Exhibit 4.30 to the registrant’s annual report on Form 20-F filed with the Commission on March 5, 2020.
|
(38)
|
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.
|
(39)
|
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.
|
(40)
|
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.
|
(41)
|
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.
|
(42)
|
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.
|
(43)
|
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.
|
(44)
|
Incorporated herein by reference to Exhibit 10.35 to the registrant's registration statement on Form F-1/A filed with the Commission on April 5, 2019.
|
(45)
|
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.
|
(46)
|
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.
|
(47)
|
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.
|
(48)
|
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.
|
(49)
|
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.
|
(50)
|
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.
|
(51)
|
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.
|
(52)
|
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.
|
(53)
|
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.
|
(54)
|
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.
|
(55)
|
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.
|
(56)
|
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.
|
(57)
|
Incorporated herein by reference to Exhibit 10.48 to the registrant's registration statement on Form F-1/A filed with the Commission on April 5, 2019.
|
(58)
|
Incorporated herein by reference to Exhibit 4.51 to the registrant’s annual report on Form 20-F filed with the Commission on March 5, 2020.
|
(59)
|
Incorporated herein by reference to Exhibit 4.53 to the registrant's annual report on Form 20-F filed with the Commission on March 25, 2019.
|
(60)
|
Incorporated herein by reference to Exhibit 4.53 to the registrant’s annual report on Form 20-F filed with the Commission on March 5, 2020.
|
(61)
|
Incorporated herein by reference to Exhibit 10.98 to the registrant’s registration statement on Form F-1 filed with the Commission on February 19, 2021.
|
(62)
|
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.
|
(63)
|
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.
|
(64)
|
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.
|
(65)
|
Incorporated herein by reference to Exhibit 4.57 to the registrant’s annual report on Form 20-F filed with the Commission on March 5, 2020.
|
(66)
|
Incorporated herein by reference to Exhibit 4.59 to the registrant's annual report on Form 20-F filed with the Commission March 25, 2019.
|
(67)
|
Incorporated herein by reference to Exhibit 4.59 to the registrant’s annual report on Form 20-F filed with the Commission on March 5, 2020.
|
(68)
|
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.
|
(69)
|
Incorporated herein by reference to Exhibit 4.67 to the registrant's annual report on Form 20-F filed with the Commission on March 25, 2019.
|
(70)
|
Incorporated herein by reference to Exhibit 4.62 to the registrant’s annual report on Form 20-F filed with the Commission on March 5, 2020.
|
(71)
|
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.
|
(72)
|
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.
|
(73)
|
Incorporated herein by reference to Exhibit 4.69 to the registrant's annual report on Form 20-F filed with the Commission on March 25, 2019.
|
(74)
|
Incorporated herein by reference to Exhibit 4.66 to the registrant’s annual report on Form 20-F filed with the Commission on March 5, 2020.
|
(75)
|
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.
|
(76)
|
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.
|
(77)
|
Incorporated herein by reference to Exhibit 4.73 to the registrant's annual report on Form 20-F filed with the Commission on March 25, 2019.
|
(78)
|
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.
|
(79)
|
Incorporated herein by reference to Exhibit 10.82 to the registrant’s registration statement on Form F-1 filed with the Commission on February 19, 2021.
|
(80)
|
Incorporated herein by reference to Exhibit 10.81 to the registrant’s registration statement on Form F-1 filed with the Commission on February 19, 2021.
|
(81)
|
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.
|
(82)
|
Incorporated herein by reference to Exhibit 4.77 to the registrant's annual report on Form 20-F filed with the Commission on March 25, 2019.
|
(83)
|
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.
|
(84)
|
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.
|
(85)
|
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.
|
(86)
|
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.
|
(87)
|
Incorporated herein by reference to Exhibit 4.92 to the registrant's annual report on Form 20-F filed with the Commission on March 25, 2019.
|
(88)
|
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.
|
(89)
|
Incorporated herein by reference to Exhibit 4.93 to the registrant's annual report on Form 20-F filed with the Commission on March 25, 2019.
|
(90)
|
Incorporated herein by reference to Exhibit 4.94 to the registrant's annual report on Form 20-F filed with the Commission on March 25, 2019.
|
(91)
|
Incorporated herein by reference to Exhibit 4.95 to the registrant's annual report on Form 20-F filed with the Commission on March 25, 2019.
|
(92)
|
Incorporated herein by reference to Exhibit 4.83 to the registrant’s annual report on Form 20-F filed with the Commission on March 5, 2020.
|
(93)
|
Incorporated herein by reference to Exhibit 4.84 to the registrant’s annual report on Form 20-F filed with the Commission on March 5, 2020.
|
(94)
|
Incorporated herein by reference to Exhibit 10.99 to the registrant’s registration statement on Form F-1 filed with the Commission on February 19, 2021.
|
(95)
|
Incorporated herein by reference to Exhibit 10.99 to the registrant's registration statement on Form F-1/A filed with the Commission on April 5, 2019.
|
(96)
|
Incorporated herein by reference to Exhibit 4.86 to the registrant’s annual report on Form 20-F filed with the Commission on March 5, 2020.
|
(97)
|
Incorporated herein by reference to Exhibit 4.4 to the registrant's report on Form 6-K filed with the Commission on May 17, 2019.
|
(98)
|
Incorporated herein by reference to Exhibit 4.5 to the registrant's report on Form 6-K filed with the Commission on May 17, 2019.
|
(99)
|
Incorporated herein by reference to Exhibit 4.1 to the registrant’s report on Form 6-K furnished with the Commission on April 3, 2020.
|
(100)
|
Incorporated herein by reference to Exhibit 4.2 to the registrant’s report on Form 6-K furnished with the Commission on April 3, 2020.
|
(101)
|
Incorporated herein by reference to Exhibit 4.3 to the registrant’s report on Form 6-K furnished with the Commission on April 3, 2020.
|
(102)
|
Incorporated herein by reference to Exhibit 4.3 to the registrant’s report on Form 6-K furnished with the Commission on May 17, 2019.
|
(103)
|
Incorporated herein by reference to Exhibit 4.4 to the registrant’s report on Form 6-K furnished with the Commission on April 3, 2020.
|
(104)
|
Incorporated herein by reference to Exhibit 4.1 to the registrant’s report on Form 6-K furnished to the Commission on August 19, 2020.
|
(105)
|
Incorporated herein by reference to Exhibit 4.2 to the registrant’s report on Form 6-K furnished to the Commission on August 19, 2020.
|
(106)
|
Incorporated herein by reference to Exhibit 99.2 to the registrant’s report on Form 6-K furnished with the Commission on January 15, 2021.
|
(107)
|
Incorporated herein by reference to Exhibit 99.7 to the registrant’s report on Form 6-K furnished with the Commission on January 15, 2021.
|
(108)
|
Incorporated herein by reference to Exhibit 99.6 to the registrant’s report on Form 6-K furnished with the Commission on January 15, 2021.
|
(109)
|
Incorporated herein by reference to Exhibit 99.4 to the registrant’s report on Form 6-K furnished with the Commission on January 15, 2021.
|
(110)
|
Incorporated herein by reference to Exhibit 99.3 to the registrant’s report on Form 6-K furnished with the Commission on January 15, 2021.
|
SEANERGY MARITIME HOLDINGS CORP.
|
||
By:
|
/s/ Stamatios Tsantanis
|
|
Name:
|
Stamatios Tsantanis
|
|
Title:
|
Chairman & Chief Executive Officer
|
Page
|
|
Report of Independent Registered Public Accounting Firm
|
|
Consolidated Balance Sheets as of December 31, 2020 and 2019
|
|
Consolidated Statements of Loss for the years ended December 31, 2020, 2019 and 2018
|
|
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2020, 2019 and 2018
|
|
Consolidated Statements of Cash Flows for the years ended December 31, 2020, 2019 and 2018
|
|
Notes to Consolidated Financial Statements
|
Recoverability assessment of vessels held and used
|
||
Description of the matter
|
At December 31, 2020, the carrying value of the Company’s vessels plus unamortized dry-docking costs and cost of any equipment not yet installed was $261.1 million. As discussed in Note 2 to the consolidated
financial statements, the Company evaluates its vessels for impairment whenever events or changes in circumstances indicate that the carrying value of a vessel plus unamortized dry-docking costs and cost of any equipment not yet installed
may not be recoverable in accordance with the guidance in ASC 360 – Property, Plant and Equipment (“ASC 360”). If indicators of impairment exist, management analyzes the future undiscounted net operating cash flows expected to be generated
throughout the remaining useful life of each vessel and compares it to the carrying value of the vessel plus unamortized dry-docking costs and cost of any equipment not yet installed. Where the vessel’s carrying value plus unamortized
dry-docking costs and cost of any equipment not yet installed, exceeds the undiscounted net operating cash flows, management will recognize an impairment loss equal to the excess of the carrying value of the vessels plus unamortized
dry-docking costs and cost of any equipment not yet installed over its fair value.
Auditing management’s recoverability assessment was complex given the judgement and estimation uncertainty involved in determining certain assumptions in forecasting
undiscounted net operating cash flows, specifically the future charter rates for non-contracted revenue days. These charter rates are particularly subjective as they involve the development and use of assumptions about the dry bulk
shipping market through the end of the useful lives of the vessels. These assumptions are forward looking and subject to the inherent unpredictability of future global economic and market conditions.
|
|
How we addressed the matter in our audit
|
We analyzed management’s recoverability assessment by comparing the methodology used to evaluate impairment of each vessel against the accounting guidance in ASC 360. To test management’s undiscounted net
operating cash flow forecasts, our procedures included, among others, comparing the future vessel charter rates for non-contracted revenue days against internal and external data sources, such as available market data from various analysts,
historical data for the vessels, and recent economic and industry changes. In addition, we performed sensitivity analyses to assess the impact of changes to future charter rates for non-contracted revenue days in the determination of the
net operating cash flows. We also evaluated whether these assumptions were consistent with evidence obtained in other areas of the audit. Our procedures also included testing the completeness and accuracy of the data used within the
forecasts.
|
2020
|
2019
|
|||||||||||
ASSETS
|
||||||||||||
Current assets:
|
||||||||||||
Cash and cash equivalents
|
4
|
21,011
|
13,654
|
|||||||||
Term deposits
|
4
|
1,600
|
-
|
|||||||||
Restricted cash
|
4
|
50
|
900
|
|||||||||
Accounts receivable trade, net
|
2
|
801
|
1,763
|
|||||||||
Inventories
|
5
|
4,650
|
3,862
|
|||||||||
Prepaid expenses
|
1,140
|
400
|
||||||||||
Other current assets
|
674
|
1,252
|
||||||||||
Deferred voyage expenses
|
2
|
621
|
96
|
|||||||||
Total current assets
|
30,547
|
21,927
|
||||||||||
Fixed assets:
|
||||||||||||
Vessels, net
|
6
|
256,737
|
253,781
|
|||||||||
Other fixed assets, net
|
373
|
386
|
||||||||||
Total fixed assets
|
257,110
|
254,167
|
||||||||||
Other non-current assets:
|
||||||||||||
Deposits assets, non-current
|
7
|
1,325
|
1,325
|
|||||||||
Deferred charges and other long-term investments, non-current
|
2
|
4,396
|
4,677
|
|||||||||
Restricted cash, non-current
|
4, 7
|
990
|
-
|
|||||||||
Right of use asset – leases
|
10
|
845
|
426
|
|||||||||
Other non-current assets
|
32
|
29
|
||||||||||
TOTAL ASSETS
|
295,245
|
282,551
|
||||||||||
LIABILITIES AND STOCKHOLDERS EQUITY
|
||||||||||||
Current liabilities:
|
||||||||||||
Current portion of long-term debt and other financial liabilities, net of deferred finance costs and debt discounts of $995 and $2,443, respectively
|
7, 15
|
19,417
|
183,066
|
|||||||||
Trade accounts and other payables
|
3,707
|
16,105
|
||||||||||
Due to related parties, net of deferred finance costs of $NIL and $113, respectively
|
1, 7
|
-
|
24,237
|
|||||||||
Convertible notes, net of deferred finance costs of $NIL and $17, respectively
|
8
|
-
|
2,588
|
|||||||||
Accrued liabilities
|
2,988
|
6,881
|
||||||||||
Lease liability
|
10
|
140
|
108
|
|||||||||
Deferred revenue
|
2
|
4,510
|
4,296
|
|||||||||
Total current liabilities
|
30,762
|
237,281
|
||||||||||
Non-current liabilities:
|
||||||||||||
Long-term debt and other financial liabilities, net of current portion and deferred finance costs and debt discounts of $2,532 and $NIL, respectively
|
7, 15
|
150,345
|
-
|
|||||||||
Convertible notes, non-current, net of deferred finance costs and debt discounts of $5,839 and $212, respectively
|
8
|
14,516
|
12,020
|
|||||||||
Lease liability, non-current
|
10
|
705
|
318
|
|||||||||
Deferred revenue, non-current
|
2
|
2,773
|
3,074
|
|||||||||
Other liabilities, non-current
|
450
|
-
|
||||||||||
Total liabilities
|
199,551
|
252,693
|
||||||||||
Commitments and contingencies
|
10
|
-
|
-
|
|||||||||
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, 2020 and 2019; 68,314,985 and 1,681,253 shares issued and outstanding as at December 31,
2020 and 2019, respectively
|
11
|
7
|
-
|
|||||||||
Additional paid-in capital
|
11
|
490,284
|
406,099
|
|||||||||
Accumulated deficit
|
(394,597
|
)
|
(376,241
|
)
|
||||||||
Total Stockholders' equity
|
95,694
|
29,858
|
||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
|
295,245
|
282,551
|
|
Notes
|
2020
|
2019
|
2018
|
||||||||||||
Revenues:
|
||||||||||||||||
Vessel revenue
|
2
|
65,682
|
89,523
|
94,859
|
||||||||||||
Commissions
|
2
|
(2,337
|
)
|
(3,024
|
)
|
(3,339
|
)
|
|||||||||
Vessel revenue, net
|
63,345
|
86,499
|
91,520
|
|||||||||||||
Expenses:
|
||||||||||||||||
Voyage expenses
|
2
|
(18,567
|
)
|
(36,641
|
)
|
(40,184
|
)
|
|||||||||
Vessel operating expenses
|
(22,347
|
)
|
(18,980
|
)
|
(20,742
|
)
|
||||||||||
Management fees
|
(1,052
|
)
|
(989
|
)
|
(1,042
|
)
|
||||||||||
General and administration expenses
|
(6,607
|
)
|
(5,989
|
)
|
(6,500
|
)
|
||||||||||
Amortization of deferred dry-docking costs
|
(2,319
|
)
|
(844
|
)
|
(634
|
)
|
||||||||||
Depreciation
|
(12,721
|
)
|
(11,016
|
)
|
(10,876
|
)
|
||||||||||
Impairment loss
|
-
|
-
|
(7,267
|
)
|
||||||||||||
Operating (loss) / income
|
(268
|
)
|
12,040
|
4,275
|
||||||||||||
Other income / (expenses), net:
|
||||||||||||||||
Interest and finance costs
|
12
|
(12,342
|
)
|
(15,216
|
)
|
(16,415
|
)
|
|||||||||
Interest and finance costs – related party
|
1, 12
|
(11,083
|
)
|
(8,629
|
)
|
(8,881
|
)
|
|||||||||
Gain on debt refinancing
|
7
|
5,144
|
-
|
-
|
||||||||||||
Interest and other income
|
208
|
213
|
83
|
|||||||||||||
Foreign currency exchange losses, net
|
(15
|
)
|
(52
|
)
|
(104
|
)
|
||||||||||
Total other expenses, net
|
(18,088
|
)
|
(23,684
|
)
|
(25,317
|
)
|
||||||||||
Net loss before income taxes
|
(18,356
|
)
|
(11,644
|
)
|
(21,042
|
)
|
||||||||||
Income taxes
|
-
|
(54
|
)
|
(16
|
)
|
|||||||||||
Net loss
|
(18,356
|
)
|
(11,698
|
)
|
(21,058
|
)
|
||||||||||
|
||||||||||||||||
Net loss per common share
|
||||||||||||||||
Basic and diluted
|
13
|
(0.55
|
)
|
(12.21
|
)
|
(134.39
|
)
|
|||||||||
Weighted average common shares outstanding
|
||||||||||||||||
Basic and diluted
|
13
|
33,436,278
|
958,297
|
156,692
|
|
Common stock
|
Additional
paid-in
capital
|
Total
stockholders’
equity
|
|||||||||||||||||
|
# of Shares
|
Par
Value
|
Accumulated
deficit
|
|||||||||||||||||
|
||||||||||||||||||||
Balance, January 1, 2018
|
154,079
|
-
|
383,010
|
(341,697
|
)
|
41,313
|
||||||||||||||
Adoption of revenue recognition accounting policy adjustment (Note 2)
|
-
|
-
|
-
|
(1,788
|
)
|
(1,788
|
)
|
|||||||||||||
Issuance of common stock (Note 11)
|
7,500
|
-
|
1,541
|
-
|
1,541
|
|||||||||||||||
Stock based compensation (Note 14)
|
5,057
|
-
|
1,295
|
-
|
1,295
|
|||||||||||||||
Net loss
|
-
|
-
|
-
|
(21,058
|
)
|
(21,058
|
)
|
|||||||||||||
Balance, December 31, 2018
|
166,636
|
-
|
385,846
|
(364,543
|
)
|
21,303
|
||||||||||||||
Issuance of common stock and warrants (Notes 7, 8 & 11)
|
1,505,638
|
-
|
18,847
|
-
|
18,847
|
|||||||||||||||
Related parties liabilities released (Notes 7 & 8)
|
-
|
-
|
96
|
-
|
96
|
|||||||||||||||
Stock based compensation (Note 14)
|
8,979
|
-
|
1,310
|
-
|
1,310
|
|||||||||||||||
Net loss
|
-
|
-
|
-
|
(11,698
|
)
|
(11,698
|
)
|
|||||||||||||
Balance, December 31, 2019
|
1,681,253
|
-
|
406,099
|
(376,241
|
)
|
29,858
|
||||||||||||||
Issuance of common stock (including the exercise of warrants) (Note 11)
|
66,477,489
|
7
|
71,828
|
-
|
71,835
|
|||||||||||||||
Stock based compensation (Note 14)
|
156,243
|
-
|
869
|
-
|
869
|
|||||||||||||||
Issuable units (Notes 7, 8 & 9)
|
-
|
-
|
6,021
|
-
|
6,021
|
|||||||||||||||
Change in fair value of conversion option (Note 9)
|
-
|
4,924
|
4,924
|
|||||||||||||||||
Issuance of option for units (Note 9)
|
-
|
-
|
543
|
-
|
543
|
|||||||||||||||
Net loss
|
-
|
-
|
-
|
(18,356
|
)
|
(18,356
|
)
|
|||||||||||||
Balance, December 31, 2020
|
68,314,985
|
7
|
490,284
|
(394,597
|
)
|
95,694
|
|
2020
|
2019
|
2018
|
|||||||||
Cash flows from operating activities:
|
||||||||||||
Net loss
|
(18,356
|
)
|
(11,698
|
)
|
(21,058
|
)
|
||||||
Adjustments to reconcile net loss to net cash (used in) / provided by operating activities:
|
||||||||||||
Depreciation
|
12,721
|
11,016
|
10,876
|
|||||||||
Amortization of deferred dry-docking costs
|
2,319
|
844
|
634
|
|||||||||
Amortization of deferred finance charges
|
1,107
|
1,140
|
1,173
|
|||||||||
Amortization of convertible note beneficial conversion feature
|
5,518
|
3,713
|
4,339
|
|||||||||
Stock based compensation
|
869
|
1,310
|
1,295
|
|||||||||
Amortization of deferred finance charges – related party
|
201
|
3,745
|
7
|
|||||||||
Gain on debt refinancing, gross of deferred financing fees and expenses
|
(5,556
|
)
|
-
|
-
|
||||||||
Impairment loss
|
-
|
-
|
7,267
|
|||||||||
Fair value measurement of units issued to former related party
|
596
|
-
|
-
|
|||||||||
Restructuring expenses
|
1,015
|
-
|
-
|
|||||||||
Changes in operating assets and liabilities:
|
||||||||||||
Accounts receivable trade, net
|
962
|
845
|
(511
|
)
|
||||||||
Inventories
|
(788
|
)
|
1,427
|
(492
|
)
|
|||||||
Prepaid expenses
|
(740
|
)
|
307
|
(424
|
)
|
|||||||
Other current assets
|
579
|
(212
|
)
|
(534
|
)
|
|||||||
Deferred voyage expenses
|
(525
|
)
|
311
|
(707
|
)
|
|||||||
Deferred charges, non-current
|
(1,145
|
)
|
(2,297
|
)
|
(32
|
)
|
||||||
Other non-current assets
|
(3
|
)
|
-
|
2
|
||||||||
Trade accounts and other payables
|
(12,398
|
)
|
1,679
|
5,499
|
||||||||
Accrued liabilities
|
3,526
|
(5,502
|
)
|
(760
|
)
|
|||||||
Deferred revenue
|
214
|
3,406
|
(851
|
)
|
||||||||
Deferred revenue, non-current
|
(301
|
)
|
3,074
|
-
|
||||||||
Other liabilities, non-current
|
450
|
-
|
-
|
|||||||||
Net cash (used in) / provided by operating activities
|
(9,735
|
)
|
13,108
|
5,723
|
||||||||
Cash flows from investing activities:
|
||||||||||||
Vessels acquisitions and improvements
|
(20,189
|
)
|
(12,349
|
)
|
(30,921
|
)
|
||||||
Net proceeds from sale of vessels
|
-
|
-
|
22,652
|
|||||||||
Term deposits
|
(1,600
|
)
|
-
|
-
|
||||||||
Other fixed assets, net
|
(75
|
)
|
-
|
(558
|
)
|
|||||||
Net cash used in investing activities
|
(21,864
|
)
|
(12,349
|
)
|
(8,827
|
)
|
||||||
Cash flows from financing activities:
|
||||||||||||
Proceeds from issuance of common stock and warrants, net of underwriters fees and commissions
|
73,750
|
13,225
|
-
|
|||||||||
Proceeds from secured long-term debt
|
22,500
|
6,422
|
67,130
|
|||||||||
Proceeds from related party debt
|
-
|
5,000
|
2,000
|
|||||||||
Payments of financing and stock issuance costs
|
(3,640
|
)
|
(698
|
)
|
(1,153
|
)
|
||||||
Repayments of long-term debt and other financial liabilities
|
(52,514
|
)
|
(17,598
|
)
|
(68,468
|
)
|
||||||
Repayments of related party debt
|
(1,000
|
)
|
-
|
-
|
||||||||
Net cash provided by / (used in) financing activities
|
39,096
|
6,351
|
(491
|
)
|
||||||||
Net increase / (decrease) in cash and cash equivalents and restricted cash
|
7,497
|
7,110
|
(3,595
|
)
|
||||||||
Cash and cash equivalents and restricted cash at beginning of period
|
14,554
|
7,444
|
11,039
|
|||||||||
Cash and cash equivalents and restricted cash at end of period
|
22,051
|
14,554
|
7,444
|
|||||||||
|
||||||||||||
SUPPLEMENTAL CASH FLOW INFORMATION
|
||||||||||||
Cash paid during the period for:
|
||||||||||||
Interest
|
10,270
|
14,144
|
18,504
|
|||||||||
Deposits
|
-
|
-
|
4,075
|
|||||||||
|
||||||||||||
Noncash financing activities:
|
||||||||||||
Units / shares issued to settle unpaid interest in connection with financing – former related party (Note 1, 7, 8 & 9)
|
4,814
|
2,115
|
-
|
|||||||||
Shares issued in lieu of interest payments in connection with financing – related party (Note 7, 8 & 9)
|
-
|
3,846
|
-
|
|||||||||
Units / shares issued to settle deferred finance cost in connection with financing – former related party (Note 1, 7 & 8)
|
1,374
|
239
|
-
|
|||||||||
Change in fair value of conversion option (Note 9)
|
4,924
|
-
|
-
|
|||||||||
Issuance of option for units (Note 9)
|
543
|
-
|
-
|
|||||||||
Unpaid interest waived – related party (Note 7 & 8)
|
-
|
96
|
-
|
|||||||||
Related party debt drawdown (Note 7 & 8)
|
-
|
2,000
|
-
|
|||||||||
Related party debt refinanced (Note 7 & 8)
|
-
|
(2,000
|
)
|
-
|
||||||||
Shares issued in connection with financing
|
-
|
-
|
1,541
|
1.
|
Basis of Presentation and General Information:
|
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)
|
|
Marshall Islands
|
|
Gladiatorship
|
|
September 29, 2015
|
|
October 11, 2018
|
Guardian Shipping Co. (1)(9)
|
|
Marshall Islands
|
|
Guardianship
|
|
October 21, 2015
|
|
November 19, 2018
|
Champion Ocean Navigation Co. Limited (1)(6)(10)
|
|
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)
|
|
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 (2)(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 Glory
|
|
May 21, 2010
|
|
October 15, 2012
|
Atlantic Grace Shipping Limited (11)
|
British Virgin Islands
|
N/A
|
N/A
|
N/A
|
||||
Fellow Shipping Co. (1)
|
|
Marshall Islands
|
|
Fellowship
|
|
November 22, 2018
|
|
N/A
|
Champion Marine Co. (1)(9)
|
|
Liberia
|
|
N/A
|
|
N/A
|
|
N/A
|
Champion Marine Co. (1)(8)
|
|
Marshall Islands
|
|
N/A
|
|
N/A
|
|
N/A
|
Good Ocean Navigation Co. (1)(Note 6)
|
Liberia
|
Goodship
|
|
August 7, 2020
|
|
N/A
|
2.
|
Significant Accounting Policies:
|
December 31,
2020
|
||||
Vessel revenues, net of commissions
|
27,033
|
|||
Voyage expenses
|
(17,099
|
)
|
||
Total
|
9,934
|
|
December 31,
|
|||||||
|
2020
|
2019
|
||||||
Accounts receivable trade, net from spot charters
|
801
|
653
|
||||||
Accounts receivable trade, net from time charters
|
-
|
1,110
|
||||||
Total
|
801
|
1,763
|
December 31,
2020
|
||||
Vessel revenues, net of commissions
|
36,312
|
|||
Voyage expenses
|
(1,468
|
)
|
||
Total
|
34,844
|
Customer
|
2020
|
2019
|
2018
|
||||||||||
A
|
23
|
%
|
-
|
-
|
|||||||||
B
|
-
|
19
|
%
|
26
|
%
|
||||||||
C
|
-
|
18
|
%
|
21
|
%
|
||||||||
D
|
18
|
%
|
15
|
%
|
-
|
||||||||
E
|
-
|
-
|
11
|
%
|
|||||||||
Total
|
41
|
%
|
52
|
%
|
58
|
%
|
(aa)
|
Fair Value Measurements
|
•
|
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)
|
Debt Modifications and Extinguishments
|
(ac)
|
Troubled Debt Restructurings
|
(ad)
|
Convertible Notes and related Beneficial Conversion Features
|
(ae)
|
Distinguishing Liabilities from Equity
|
(af)
|
Going Concern
|
3.
|
Going Concern:
|
i)
|
On February 8, 2021, the Company entered into a supplemental agreement to the facility with UniCredit Bank AG, or UniCredit, which became effective on February 9, 2021, following satisfaction
of certain customary conditions precedent. Pursuant to supplemental agreement: (i) the Leverage Ratio, the ratio of EBITDA to interest payments and the Security Cover Ratio (each term as defined therein) were waived with retrospective
effect from June 2020 onwards (and January 2020 for the Security Cover Ration only) and for the remaining duration of the facility, (ii) the quarterly installments were reduced from $1,550 to $1,200, effective as of the December 2020
installment and (iii) the applicable margin was increased from 3.2% to 3.5% with effect from December 29, 2020 until the maturity of the facility that was extended to December 29, 2022 from December 29, 2020 initially.
|
ii)
|
On February 12, 2021, the Company entered into a supplemental agreement to the facility with Amsterdam Trade Bank N.V., or ATB, which became effective on February 16, 2021 following
satisfaction of certain customary conditions precedent. Pursuant to supplemental agreement: (i) the Leverage Ratio (as defined therein) was amended to 85% from 75% previously, with retrospective effect from June 2020 onwards and for the
remaining duration of the facility, (ii) the ratio of EBITDA to interest payments (as defined therein) was waived with retrospective effect from June 2020 onwards and for the remaining duration of the facility and (iii) the minimum required
security cover (as defined therein) was amended to (a) 140% until June 30, 2021 (inclusive), (b) 145% until December 31, 2021 (inclusive) and (c) 150% thereafter and until the maturity of the loan on November 26, 2022.
|
iii)
|
On February 19, 2021, the Company sold 44,150,000 common shares pursuant to a registered direct offering at a price of $1.70 per common share, in exchange for gross proceeds of $75,055, or net
proceeds of approximately $69,971.
|
iv)
|
On March 5, 2021, the Company prepaid the full balance of $21,600 of the Amended and Restated Entrust Loan Facility. The balance was paid with cash on hand.
|
v)
|
Between February and March 2021, the Company entered into four separate agreements with unaffiliated third parties for the purchase of four secondhand Capesize vessels, for a combined gross
purchase price of $100,585. The Company expects to finance the vessel acquisitions with cash on hand and by secured loan facilities from financial institutions. Delivery of the vessels from their sellers are expected to take place until the
end of the second quarter of 2021.
|
4.
|
Cash and Cash Equivalents, Restricted Cash and Term deposits:
|
|
December 31,
2020
|
December 31,
2019
|
||||||
Cash and cash equivalents
|
21,011
|
13,654
|
||||||
Restricted cash
|
50
|
900
|
||||||
Restricted cash, non-current
|
990
|
-
|
||||||
Total
|
22,051
|
14,554
|
5.
|
Inventories:
|
|
December 31,
2020
|
December 31,
2019
|
||||||
Lubricants
|
591
|
522
|
||||||
Bunkers
|
4,059
|
3,340
|
||||||
Total
|
4,650
|
3,862
|
6.
|
Vessels, Net:
|
|
December 31,
2020
|
December 31,
2019
|
||||||
Cost:
|
||||||||
Beginning balance
|
292,280
|
270,814
|
||||||
- Additions
|
15,590
|
21,466
|
||||||
Ending balance
|
307,870
|
292,280
|
||||||
|
||||||||
Accumulated depreciation:
|
||||||||
Beginning balance
|
(38,499
|
)
|
(27,600
|
)
|
||||
- Depreciation for the period
|
(12,634
|
)
|
(10,899
|
)
|
||||
Ending balance
|
(51,133
|
)
|
(38,499
|
)
|
||||
|
||||||||
Net book value
|
256,737
|
253,781
|
7.
|
Long-Term Debt and Other Financial Liabilities:
|
|
December 31,
2020
|
December 31,
2019
|
||||||
Long-term debt and other financial liabilities
|
173,289
|
185,509
|
||||||
Less: Deferred financing costs
|
(3,527
|
)
|
(2,443
|
)
|
||||
Total
|
169,762
|
183,066
|
||||||
Less - current portion
|
(19,417
|
)
|
(183,066
|
)
|
||||
Long-term portion
|
150,345
|
-
|
•
|
a minimum borrower’s liquidity;
|
•
|
a minimum guarantor’s liquidity;
|
•
|
a security coverage requirement; and
|
•
|
a leverage ratio.
|
The Company considered the troubled debt restructuring guidance regarding the December 31, 2020 Jelco restructuring and concluded that it was not met. The Company
further considered the modification and extinguishment accounting guidance and concluded that modification accounting was appropriate. The Company concluded:
(i) amount of $1,015 was expensed as incurred in 2020, since it concerned amounts paid to third parties in relation to the restructuring, whereas the remaining amount of $166 was included in additional paid-in capital, since these costs related to the issuance of units;
(ii) the amendment fee of $1,241 has been accounted for as a debt deferred cost and will be amortized to each facility’s maturity;
(iii) the fair value of the option granted to Jelco to purchase up to 4,285,714 additional units was recorded as debt discount and will be amortized to Second Jelco Loan’s maturity (Note 9);
(iv) for the accounting treatment of the fair value of the Jelco units and the change in the fair value of the conversion option, refer to Note 9.
All amounts regarding the Jelco restructuring were recorded as of December 31, 2020, the date of the closing of the transaction.
Twelve month periods ending December 31,
|
Amount
|
|||
2021
|
20,412
|
|||
2022
|
82,216
|
|||
2023
|
32,471
|
|||
2024
|
9,032
|
|||
Thereafter
|
29,158
|
|||
Total
|
173,289
|
8. |
Convertible Notes:
|
|
December 31,
2020
|
December 31,
2019
|
||||||
Convertible notes
|
38,715
|
38,715
|
||||||
Less: beneficial conversion feature
|
(18,360
|
)
|
(23,878
|
)
|
||||
Convertible notes, net of beneficial conversion feature
|
20,355
|
14,837
|
||||||
Less: Deferred financing costs
|
(915
|
)
|
(229
|
)
|
||||
Less: Change in fair value of conversion option
|
(4,924
|
)
|
-
|
|||||
Total
|
14,516
|
14,608
|
||||||
Less - current portion
|
-
|
(2,588
|
)
|
|||||
Long-term portion
|
14,516
|
12,020
|
Applicable
limit
|
Debt
discount
|
Accumulated
deficit
|
Debt
|
|||||||||||||
Balance, December 31, 2018
|
17,750
|
(14,389
|
)
|
3,601
|
6,962
|
|||||||||||
Amortization (Note 11)
|
-
|
-
|
2,200
|
2,200
|
||||||||||||
Balance, December 31, 2019
|
17,750
|
(14,389
|
)
|
5,801
|
9,162
|
|||||||||||
Amortization (Note 11)
|
-
|
-
|
2,869
|
2,869
|
||||||||||||
Balance, December 31, 2020
|
17,750
|
(14,389
|
)
|
8,670
|
12,031
|
Additional
paid-in capital
|
||||
Balance, December 31, 2018
|
14,189
|
|||
Balance, December 31, 2019
|
14,189
|
|||
Balance, December 31, 2020
|
14,189
|
Applicable
limit
|
Debt discount
|
Accumulated
deficit
|
Debt
|
|||||||||||||
Balance, December 31, 2018
|
24,665
|
(21,165
|
)
|
4,162
|
4,162
|
|||||||||||
Amortization
|
-
|
-
|
1,513
|
1,513
|
||||||||||||
Balance, December 31, 2019
|
24,665
|
(21,165
|
)
|
5,675
|
5,675
|
|||||||||||
Deductions |
(3,500
|
) |
-
|
-
|
-
|
|||||||||||
Amortization (Note 11)
|
-
|
-
|
2,649
|
2,649
|
||||||||||||
Balance, December 31, 2020
|
21,165
|
(21,165
|
)
|
8,324
|
8,324
|
Additional
paid-in capital
|
||||
Balance, December 31, 2018
|
21,165
|
|||
Balance, December 31, 2019
|
21,165
|
|||
Balance, December 31, 2020
|
21,165
|
Twelve month periods ending December 31,
|
Amount
|
|||
2021
|
-
|
|||
2022
|
-
|
|||
2023
|
-
|
|||
2024
|
38,715
|
|||
Thereafter
|
-
|
|||
Total
|
38,715
|
9. |
Financial Instruments:
|
•
|
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.
|
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, 2020, and the carrying value of $38,874 is 2% lower than the fair market value of $39,634. The fair value of the fixed interest long-term debt has
been obtained through Level 2 inputs of the fair value hierarchy.
|
i)
|
the fair value of the Jelco units to be $0.77 each, whereby the difference to the issue price of $0.70 amounted to $596 and was immediately recognized in Interest and finance costs and
with a corresponding increase to additional paid-in capital;
|
ii)
|
the fair value of the option granted to Jelco to purchase up to 4,285,714 additional units to be $0.13, whereby the carrying value of the Second Jelco Loan was reduced by $543 as a debt
discount with a corresponding increase to additional paid-in capital; and
|
iii)
|
the change in the fair value of the conversion option of the Jelco Notes amounted to $4,924. The carrying value of the Jelco Notes was reduced by this amount with a corresponding increase to
additional paid-in capital. This change in the fair value will be amortized through the effective interest rate method to the notes’ maturities.
|
10.
|
Commitments and Contingencies:
|
Twelve month periods ending December 31,
|
Amount
|
|||
2021
|
55,481
|
|||
2022
|
32,117
|
|||
2023
|
5,703
|
|||
Total
|
93,301
|
Twelve month periods ending December 31,
|
Amount
|
|||
2021
|
147
|
|||
2022
|
147
|
|||
2023
|
147
|
|||
2024
|
147
|
|||
Thereafter
|
479
|
|||
Total
|
1,067
|
|||
Less: imputed interest
|
(222
|
)
|
||
Present value of lease liabilities
|
845
|
|||
|
||||
Lease liabilities, current
|
140
|
|||
Lease liabilities, non-current
|
705
|
|||
Present value of lease liabilities
|
845
|
11.
|
Capital Structure:
|
(a) |
Common Stock
|
i)
|
NASDAQ Notification – Effect of Reverse Stock Split
|
ii)
|
Equity Offerings
|
Warrant
|
Shares to be issued upon
exercise of remaining
warrants
|
|||
Class A
|
47,916
|
|||
Class B
|
415,845
|
|||
Class D
|
273,046
|
|||
Class E
|
40,896,428
|
|||
Jelco Warrants
|
7,986,913
|
|||
Pre-funded Warrants - Jelco (Note 15)
|
955,730
|
|||
Representative Warrants
|
123,406
|
|||
Total
|
50,699,284
|
12.
|
Interest and Finance Costs:
|
|
Year ended December 31,
|
|||||||||||
|
2020
|
2019
|
2018
|
|||||||||
Interest on long-term debt and other financial liabilities
|
10,279
|
13,630
|
14,819
|
|||||||||
Amortization of debt issuance costs
|
757
|
738
|
1,173
|
|||||||||
Amortization of debt issuance costs (shares issued to third party - non-cash)
|
350
|
402
|
-
|
|||||||||
Fair value measurement of units issued to former related party
|
596
|
-
|
-
|
|||||||||
Other
|
360
|
446
|
423
|
|||||||||
Total
|
12,342
|
15,216
|
16,415
|
|
Year ended December 31,
|
|||||||||||
|
2020
|
2019
|
2018
|
|||||||||
Interest on subordinated debt
|
1,924
|
420
|
1,724
|
|||||||||
Amortization of subordinated debt issuance costs
|
-
|
240
|
7
|
|||||||||
Convertible notes interest expense
|
2,425
|
751
|
2,811
|
|||||||||
Convertible notes amortization of debt discount (non-cash)
|
5,518
|
3,713
|
4,339
|
|||||||||
Amortization of debt issuance costs (shares issued to Jelco - non-cash)
|
201
|
3,505
|
-
|
|||||||||
Restructuring expenses
|
1,015
|
-
|
-
|
|||||||||
Total
|
11,083
|
8,629
|
8,881
|
13.
|
Loss per Share:
|
For the years ended December 31,
|
||||||||||||
2020
|
2019
|
2018
|
||||||||||
Net loss
|
(18,356
|
)
|
(11,698
|
)
|
(21,058
|
)
|
||||||
Weighted average common shares outstanding – basic and diluted
|
33,436,278
|
958,297
|
156,692
|
|||||||||
Net loss per common share – basic and diluted
|
$
|
(0.55
|
)
|
$
|
(12.21
|
)
|
$
|
(134.39
|
)
|
14.
|
Equity Incentive Plan:
|
On February 24, 2020, the Compensation Committee granted an aggregate of 156,250 restricted shares of common stock pursuant to the Plan. Of the total 156,250 shares issued, 45,000 shares were granted to the non-executive members of the board of directors, 42,812 were granted to the executive officers, 60,626 shares were granted to certain of the Company’s non-executive employees and 7,812 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 $5.12. All the shares vest over a period of two years. 52,084 shares vested on February 24, 2020, 52,083 shares vested on October 1, 2020 and 52,083 shares will vest on October 1, 2021. The related expense for shares granted to the Company's board of directors and certain of its employees for the years ended December 31, 2020, 2019 and 2018, amounted to $826, $1,295 and $1,281, respectively, and is included under general and administration expenses. The related expense for shares granted to non-employees for the years ended December 31, 2020, 2019 and 2018, amounted to $43, $15 and $21, respectively, and is included under voyage expenses.
Number of
Shares
|
Weighted
Average
Grant
Date Price
|
|||||||
Outstanding at December 31, 2017
|
1,573
|
$
|
384.00
|
|||||
Granted
|
5,250
|
248.48
|
||||||
Vested
|
(4,475
|
)
|
248.48
|
|||||
Forfeited
|
(191
|
)
|
297.60
|
|||||
Outstanding at December 31, 2018
|
2,157
|
$
|
261.60
|
|||||
Granted
|
9,000
|
146.40
|
||||||
Vested
|
(8,156
|
)
|
112.32
|
|||||
Forfeited
|
(20
|
)
|
146.40
|
|||||
Outstanding at December 31, 2019
|
2,981
|
$
|
133.76
|
|||||
Granted
|
156,250
|
5.12
|
||||||
Vested
|
(107,139
|
)
|
5,23
|
|||||
Forfeited
|
(28
|
)
|
5.12
|
|||||
Outstanding at December 31, 2020
|
52,064
|
$
|
2.48
|
15.
|
Subsequent Events
|
b)
|
On February 8, 2021, the Company entered into a supplemental agreement to the facility with UniCredit, following the credit committee approval that was obtained in September 2020 (Note 7). On
February 9, 2021 following satisfaction of certain customary conditions precedent the supplemental agreement became effective.
|
c)
|
On February 11, 2021, the Company received written notification from the Nasdaq Stock Market that the Company has regained compliance with Nasdaq Listing Rule 5550(a)(2) concerning the minimum
bid price of the Company’s common stock.
|
d)
|
On February 12, 2021, the Company entered into the supplemental agreement to the facility with ATB. On February 16, 2021, following satisfaction of certain customary conditions precedent, the
supplemental agreement became effective (Note 7).
|
e)
|
On February 12, 2021, the Company entered into an agreement with an unaffiliated third party for the purchase of a secondhand Capesize vessel built in 2006 at a Japanese shipyard, at a gross
purchase price of $17,000. The Company expects to finance the vessel acquisition with cash on hand and delivery of the vessel from its sellers is expected to take place until the end of the second quarter of 2021. An amount of $3,400 has
been paid as advance payment.
|
f)
|
On February 19, 2021, the Company sold 44,150,000 common shares under a registered direct offering at a price of $1.70 per common share, in exchange for gross proceeds of $75,055, or net
proceeds of approximately $69,971.
|
i)
|
On March 10, 2021, the Company entered into an agreement with an unaffiliated third party for the purchase of a secondhand Capesize vessel built in 2013 at a Japanese shipyard, at a gross
purchase price of $28,385. The Company expects to finance the vessel acquisition with cash on hand and by a secured loan facility from financial institutions. Delivery of the vessel from its sellers is expected to take place until the end
of the second quarter of 2021. An amount of $5,320 has been paid as advance payment.
|
j)
|
On March 11, 2021, the Company entered into an agreement with an unaffiliated third party for the purchase of a secondhand Capesize vessel built in 2010 at a Japanese shipyard, at a gross
purchase price of $26,600. The Company expects to finance the vessel acquisition with cash on hand and by a secured loan facility from financial institutions. Delivery of the vessel from its sellers is expected to take place until the end
of the second quarter of 2021. An amount of $2,839 has been paid as advance payment.
|
k)
|
On March 24, 2021, the Company issued 955,730 common shares to Jelco, following Jelco’s exercise of its pre-funded warrants from the December 2020 restructuring.
|
l)
|
On March 19, 2021, the Company entered into an agreement with an unaffiliated third party for the purchase of a secondhand Capesize vessel built in 2012 at a Japanese shipyard, at a gross
purchase price of $28,600. The Company expects to finance the vessel acquisition with cash on hand and by a secured loan facility from financial institutions. Delivery of the vessel from its sellers is expected to take place until the end
of the second quarter of 2021. An amount of $8,580 has been paid as advance payment.
|
m)
|
On March 26, 2021, the Company obtained a commitment letter from Aegean Baltic Bank Α.Ε. for a $15,500 senior amortizing loan facility for the financing of the Goodship and the Tradership. The entering into the facility agreement by the Company is subject to completion of definitive documentation.
|
n)
|
During 2021 and as of the date of the issuance of these consolidated financial statements, 32,129,715 of the Class E warrants issued in connection with the August 2020 equity offering (Note
10) have been exercised for gross proceeds of $22,491. 8,766,713 Class E warrants remain outstanding.
|
Exhibit 4.9
Novation Agreement
THIS AGREEMENT is made on 16 December 2020 between:
(1) | V.Ships Limited, of Cyprus, with registered offices at Zina Kanther 16-18, Agia Triada, 3035 Limassol, Cyprus (the “Managers”); |
(2) | Leader Shipping Co., of the Republic of the Marshall Islands, with registered address at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands, MH 96960 (the “Owners”); and |
(3) | V.Ships Greece Ltd., of Bermuda, with regsistered offices at 3rd Floor, Par-La-Ville Place, 14 Par-La-Ville Road, Hamilton HM 08, Bermuda (the “New Managers”). |
RECITALS: |
(A) | This Agreement is supplemental to the Ship Management Agreement entered into between the New Managers and the Owners in respect of the M/V “LEADERSHIP”, registered in the name of the Owners under the Bahamas flag with IMO No. 9233923, dated 11 February 2015, novated from the New Managers to the Managers by novation agreement dated 28 July 2015 and amended by Addendum No. 1 on 18 March 2016 (the “Contract”). |
(B) | The Managers, the Owners and the New Managers have agreed to enter into this Agreement so that the Managers be released and discharged from the Contract as from 22 December 2020 (the “Effective Date”) and so that the Owners release and discharge the Managers with respect to the Contract from the Effective Date upon the terms of the New Managers’ undertaking to perform the Contract and be bound by its terms in place of the Managers. |
(C) | The Contract, Annexed hereto, has not been amended, varied, cancelled, novated or terminated and represents the entire agreement between the Managers and the Owners. |
OPERATIVE PROVISIONS:
1 | Except as amended hereby, all definitions, terms and conditions of the Contract remain in full force and effect. |
2 | As from the Effective Date and by mutual agreement between the parties and in consideration of the mutual undertakings and releases herein contained, the New Managers shall hereby substitute the Managers under the Contract and the New Managers shall as from the Effective Date assume all rights and obligations of the Managers arising out of or in connection with the Contract. As from the Effective Date, the New Managers and the Owners undertake to perform the Contract and be bound by its terms in every way as if the New Managers had been a party to it in place of the Managers under the Contract which shall hereafter be construed and treated in all respects as if the New Managers had been originally named as a party therein. |
1/4 |
3 | Save as provided in Clause 5, the Managers and the Owners hereby mutually release each other from their obligations under the Contract as from the Effective Date. |
4 | The Owners hereby agree to continue to be bound by the Contract in all respects vis-à-vis the New Managers from the Effective Date and further agree to release and discharge the Managers from any further liability under the Contract that may arise out of or with respect to events occurred after the Effective Date and accept the liability of the New Managers under the Contract from the Effective Date. |
5 | Nothing in this Agreement shall affect or prejudice any liability, claim or demand whatsoever which either the Managers or the Owners may have against the other relating to matters arising out of or with respect to events occurred prior to the Effective Date. |
6 | The Owners shall procure in respect of the Owners’ Insurances that the New Managers are named as co-assureds for protection and indemnity risks (including pollution risks) and as named assureds on all other policies, with the benefit of full cover. |
AMENDMENTS: |
From the Effective Date, the following amendments are agreed to in the Contract:
(a) | all references made to the “Managers” in the Contract shall be deemed to mean the New Managers and not the Managers; and |
(b) | Box 3 of Part I of the Contract will be replaced as of the Effective Date with the following: |
3. | Managers | |
Name: V.Ships Greece Ltd., of Bermuda | ||
Registered Address: 3rd Floor, Par-La-Ville Place, 14 Par-La-Ville Road, Hamilton HM 08, Bermuda | ||
Country of Incorporation: Bermuda | ||
c/o 03 Agiou Dionysiou Street, Piraeus 185 45, Greece | ||
Telephone Number: +30 210 4102210 | Fax Number: +30 210 4294340 | |
Contact Name: (Mr.) Konstantinos Kontes | Position: Managing Director | |
Email address: costas.kontes@vships.com |
2/4 |
LAW AND JURISDICTION
This Agreement shall be governed by and construed in accordance with the same laws and subject to the same jurisdiction as that provided in Clause 20 of the Contract.
THIS AGREEMENT has been executed by the parties to this Agreement as a deed on the date specified at the beginning of this Agreement.
Executed as a deed | ||
By Alastair Evitt | ) | /s/ Alastair Evitt |
for and on behalf of | ) | |
V.Ships Limited | ) | |
Executed as a deed | ||
By Stamatios Tsantanis | ) | /s/ Stamatios Tsantanis |
for and on behalf of | ) | |
Leader Shipping Co. | ) | |
Executed as a deed | ||
By Konstantinos Kontes | ) | /s/ Konstantinos Kontes |
for and on behalf of | ) | |
V.Ships Greece Ltd. | ) |
3/4 |
ANNEX
LEADER SHIPPING CO.
and
V.SHIPS GREECE LTD.
SHIP TECHNICAL MANAGEMENT AGREEMENT
SHIP TECHNICAL MANAGEMENT AGREEMENT
INDEX
PART | SUBJECT MATTER | PAGE NO. | |||
Part I | Vessel Details | 4 | |||
Part II | Terms of Agreement | ||||
1. | Definitions & Interpretation | 6 | |||
2. | Appointment of Managers | 6 | |||
3. | Basic Services | 6 | |||
3.1 | Crewing | 7 | |||
3.2 | Technical Management | 8 | |||
3.3 | Purchasing | 8 | |||
3.5 | Accounting and Budgeting | 9 | |||
3.6 | Operations | 10 | |||
3.7 | Information System Software | 10 | |||
3.8 | Shipboard Oil Pollution Emergency Plan | 11 | |||
3.9 | OPA | 11 | |||
3.10 | Assistance with Sale of Vessel | 11 | |||
3.11 | Vessel trading in high risk areas | 11 | |||
4. | Other Services | 12 | |||
5. | Managers’ Obligations | 12 | |||
6. | Owners’ Obligations | 12 | |||
7. | Documentation | 13 | |||
8. | Management Fee | 14 | |||
9. | Payments and Management of Funds | 15 | |||
10. | Managers’ Right to Sub-Contract | 16 | |||
11. | Responsibilities | 16 | |||
11.1 | Force Majeure | 16 | |||
11.2 | Liability to Owners | 16 | |||
11.3 | Indemnity - General | 16 | |||
11.4 | Indemnity - Tax | 17 | |||
11.5 | Himalaya | 17 | |||
13. | Claims/Disputes | 17 | |||
14. | Auditing, Records | 18 | |||
15. | Inspection of Vessel | 18 | |||
16. | Compliance with Laws & Regulations | 18 | |||
17. | Duration of the Agreement | 18 | |||
17.1 | Termination by Notice | 18 | |||
17.2 | Termination by Default – Owners | 18 | |||
17.3 | Termination by Default – Managers | 19 | |||
17.4 | Liquidation | 19 | |||
17.5 | Extraordinary Termination | 19 | |||
18. | Confidentiality | 19 | |||
19. | Suspension of Services | 20 | |||
20. | Law and Arbitration | 20 |
21. | Amendments to Agreement | 20 | |||
22. | Time Limit for Claims | 20 | |||
23. | Condition of Vessel | 20 | |||
24. | Use of Associated Companies | 21 | |||
25. | Notices | 21 | |||
26. | Staff Loyalty | 21 | |||
27. | Entire Agreement | 21 | |||
28. | Partial Validity | 21 | |||
29. | Non Waiver | 21 | |||
Part III | Other Services | 22-23 | |||
Part IV | Fee Schedule | 24 | |||
Part V | Fleet Details | 25 | |||
Part VI | Initial Budget | 26-28 | |||
Part VII | Form of Novation Agreement | 29-32 |
V.SHIPS SHIP MANAGEMENT AGREEMENT | Version Number | : | 01-2013 |
Page Number | : | 4 of 32 | |
Doc: VSMA | File | : | |
SHIP TECHNICAL MANAGEMENT AGREEMENT - PART I
1. |
Vessel Details Name: LEADERSHIP Flag: BAHAMAS Type: BULK CARRIER IMO number: 9233923
|
GT/NT: 85379/56701 Class: ABS Year Built: 2001 |
||
2. | Owners | |||
Name: Leader Shipping Co. | ||||
2.1 | Owners’ Registered Address (where the company is registered): | |||
Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH96960 c/o 1-3, Patriarchou Grigoriou Str. & 127, Vouliagmenis Ave., 16674 Glyfada, Athens Greece
Country of Incorporation: Marshall Islands |
||||
2.2 | Owners’ business establishment address (head office and principal place of business): | |||
Telephone Number: +30 210 8931507 Contact Name: Konstantinos Galanis |
Fax Number: +30 210 9638450 Position: CTO |
|||
Email address: tec-ops@seanerqy.gr | ||||
2.3 | Owners’ VAT registration number if business establishment address at 2.2 is in the European Union: N/A | |||
3. | Managers | |||
Name: V.Ships Greece Ltd. | ||||
Registered Office: Par la ville place 14, Par la ville road, Hamilton HM 08, Bermuda, c/o Agiou Dionisiou 3, Piraeus Country of Incorporation: Bermuda |
||||
Telephone Number: +30 210 4102210 | Fax Number: +30 210 4294340 | |||
Contact Name: Capt. Mauro Renaldi | Position: Managing Director | |||
Email address: mauro.renaldi@vships.com | ||||
4. Date of Commencement of Agreement (Clause 2.1) Upon Owners delivery of the Vessel to the Managers |
||
5. Notices to Owners : at the Owners’ executive offices in Greece, fax number and email address stated in Box 2 | ||
6. | Notices to Managers: |
at the address, fax number and email address stated in Box 3 with a copy to Marine Legal Services Limited, 1st floor, 63 Queen Victoria Street, London EC4N 4UA tel (44) (0) 20 7329 2422 fax (44) (0) 20 7236 2894 email craig.brown@marinelegal.co.uk
|
Ship Technical Management Agreement | owners | ![]() |
managers | ![]() |
V.SHIPS SHIP MANAGEMENT AGREEMENT | Version Number | : | 01-2013 |
Page Number | : | 5 of 32 | |
Doc: VSMA | File | : | |
It is mutually agreed between the party mentioned in Box 2 of Part I (hereinafter called “the Owners”) and the party mentioned in Box 3 of Part I (hereinafter called “the Managers”) that this Agreement consisting of PARTS I to VII inclusive shall be performed subject to the conditions contained herein. In the event of a conflict of conditions, the provisions of an applicable Appendix of Part III shall prevail over the provisions of PART II to the extent of such conflict but only in respect of the Management Service to be provided in terms of such applicable Appendix. In the event of a conflict between the Fee Schedule and the provisions of an applicable Appendix of Part III, the provisions of the Fee Schedule shall prevail.
DATE OF AGREEMENT: 11 February 2015
Signature(s) (Owners) Leader Shipping Co. |
![]() |
Signature(s) (Managers) V.Ships Greece Ltd. |
![]() |
![]() |
|
Stamatios Tsantanis Title: Director / President / Treasurer |
Capt. Mauro Renaldi Title: Managing Director |
Ship Technical Management Agreement | owners | ![]() |
managers |
V.SHIPS SHIP MANAGEMENT AGREEMENT | Version Number | : | 01-2013 |
Page Number | : | 6 of 32 | |
Doc: VSMA | File | : | |
SHIP TECHNICAL MANAGEMENT AGREEMENT - PART II
1. | Definitions and Interpretation |
1.1 | In this Agreement, in addition to terms defined in Part I, save where the context otherwise requires, the following words and expressions shall have the meanings hereby assigned to them. |
“Basic Services” means services relating to Crewing, Technical Management, Purchasing, Operations, Accounting and Budgeting, Information System Software, Shipboard Oil Pollution Emergency Plan, OPA and Assistance with Sale provided in accordance with Clause 3.
“Crew Support Costs” means all expenses of a general nature not particularly referable to any individual vessel for the time being managed by the Managers and incurred for the purpose of providing an efficient and economic management service including, without prejudice to the generality of the foregoing, cost of crew standby pay, training schemes, cadet training schemes, study pay, recruitment and interviews.
“Fee Schedule” means the Schedule comprising Part IV or any revised Fee Schedule prepared by the Managers after the date hereof and agreed by the Owners in writing to record adjustments to the fees payable from time to time under this Agreement.
“Information System Software” means the Managers’ proprietary ship management software in executable object code form as described in Clause 3.7.1 as the same may be upgraded and updated from time to time.
“ISM Code” means the International Management Code for the Safe Operation of Ships and for Pollution Prevention adopted by Resolution A.714 (18) of the International Maritime Organisation on 4 November 1994 and incorporated on 19 May 1994 into the SOLAS Convention 1974 as Chapter IX and any amendment thereto or substitution thereof.
“ISPS Code” means the International Ship and Port Facility Security Code as adopted on 12 December 2002 by resolution 2 of the Conference of Contracting Governments to the International Convention for the Safety of Life at Sea 1974 and any amendment thereto or substitution thereof.
“Management Services” means Basic Services and Other Services and all other functions performed by the Managers under the terms of this Agreement.
“MLC” means the Maritime Labour Convention 2006 and any amendment thereto, substitution thereof and ratification of the Maritime Labour Convention 2006 in the respective States national law.
“OPA” means the United States Oil Pollution Act of 1990, regulations made thereunder, and any amendment thereto or substitution thereof.
“Other Services” means any services provided by Managers affirmatively indicated in Part III of this Agreement.
“Severance Costs” means the costs which the employers are legally obliged to pay to or in respect of the Crew as a result of the early termination of any contract for service on board the Vessel.
“SMS” means a Safety Management System in accordance with the ISM Code.
“SSP” means a Ship Security Plan in accordance with the ISPS Code.
“STCW” means the International Maritime Organisation Convention on Standards of Training Certification and Watchkeeping for Seafarers 1978, as amended in 1995 and any amendment thereto or substitution thereof.
“the Vessel” shall mean the vessel details of which are set out in Box 1 of Part I.
1.2 | Clause Headings are inserted for convenience and shall be ignored in construing this Agreement; words denoting the singular number shall include the plural number and vice versa; references to Parts are to Parts of this Agreement; references to Clauses are to Clauses of Part II except where otherwise expressly stated; and references to any enactment include any re-enactments, amendments and extensions thereof. |
2. | Appointment of Managers |
2.1 | With effect from the date stated in Box 4 of Part I (the “Date of Commencement”) and continuing unless and until terminated as provided herein, the Owners hereby appoint the Managers and the Managers hereby agree to act as the managers of the Vessel in respect of the Management Services. |
2.2 | In performing any of the Management Services the Managers shall, as agents for and on behalf of the Owners, have authority to take such steps as the Managers may from time to time in their reasonable discretion consider to be necessary to enable them to perform this Agreement in accordance with sound ship management practice. |
3. | Basic Services |
Subject to the terms and conditions herein provided, during the period of this Agreement the Managers shall carry out, as agents for and on behalf of the Owners, the Basic Services in accordance with the following provisions of this Clause.
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3.1 | Crewing |
3.1.1 | The Managers shall provide suitably qualified crew for the Vessel and its trade as required by the Owners in accordance with current STCW requirements as agents for and on behalf of the Owners, provision of which includes but is not limited to the following functions: |
(i) | select and engage Master, officers and crew (hereinafter collectively referred to as the “Crew”); where the Owners make a complaint about any member of the Crew the Managers will promptly investigate the same and if it proves to be justified, replace the Crew member concerned as soon as practicable; |
(ii) | ensure that the applicable requirements of the law of the flag of the Vessel are satisfied in respect of manning levels, rank, qualification and certification of the Crew, and employment regulations including Crew’s tax, social insurance, discipline and other requirements; |
(iii) | ensure that all members of the Crew have passed a medical examination with a qualified doctor certifying that they are fit for the duties for which they are engaged and are in possession of valid medical certificates which are valid for the duration of their service onboard the Vessel and issued in accordance with appropriate flag state requirements and P&I Club requirements; in the absence of applicable Flag state requirement medical certificate shall be dated no more than three (3) months prior to the respective Crew members leaving the country of domicile and maintained for the duration of their service on board the vessel; |
(iv) | arrange of transportation of the Crew, including repatriation; |
(v) | supervise the efficiency of the Crew and use the Manager’s standard crew appraisal system (written or electronic) and administration of all other Crew matters such as planning for the manning of the Vessel; |
(vi) | make payroll arrangements, including settling manning and agency expenses for the manning agents in the Crew’s country of origin and, if applicable, payment of Severance Costs; |
(vii) | if requested by the Owners, conducting union negotiations and making agreed payments to unions; |
(viii) | verify that the Crew shall have a command of the English of a sufficient standard to enable them to perform their duties safely; |
(ix) | operate the Managers’ Drug and Alcohol Policy; |
(ix) | arrange Crew training in accordance with the Managers’ policies but always in compliance with STCW (and as provided for in the budget), records of such training being maintained in the Manager’s standard format and will be provided to the Owners on a monthly basis. |
3.1.2 | Crew Claims |
The Managers will provide such information as requested by relevant brokers and/or P&I Club managers to enable such brokers or managers to prepare and process all Crew insurance claims with the Owners’ approval.
3.1.3 | The Owners agree to implement in full the terms and conditions of employment under which the Crew is engaged by the Managers as agent for the Owners. The Owners shall be the employer of the Crew and under no circumstances shall the Managers be deemed to be the employer of the Crew. If the Vessel is covered by an ITF approved agreement the Owners authorize the Managers to sign the ITF Special Agreement on their behalf and agree to provide all information necessary for this purpose. The Managers to provide the Owners copies of the contracts of employment upon request. |
3.1.4 | The Owners to approve the engagement of any member of the Crew within four (4) working days of receipt from the Managers of reasonable details of the proposed appointee. No response within the stipulated timeframe indicates tacit approval. |
3.1.5 | In the event that any officers or ratings are supplied by the Owners or on their behalf, the Owners shall procure that they comply with the requirements of STCW and MLC. Owners will instruct such officers and ratings to obey all reasonable orders of the Managers. |
Any such officers or ratings shall, at the Owners’ cost, be trained in accordance with the Managers training matrix.
3.1.6 | The Managers shall procure that the Crew consent to processing of their personal data for legitimate business purposes. The Owners warrant that personal data of the Crew will be processed in accordance with the requirements of the Data Protection Act 1998 or any other applicable law or regulation. |
3.1.7 | For the purposes of the MLC, the Owners shall be deemed “Shipowner” and under no circumstances whatsoever, notwithstanding the Managers agreeing to carry out specific obligations under the MLC on behalf of the Owners, shall the Managers be deemed “Shipowner”. It is a condition of this Agreement that the Owners shall provide all Crew with MLC compliant working and living conditions. The Owners shall ensure that, in case there is any |
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Seafarer Recruitment & Placement Service supplying any member of the Crew to the Vessel or any entity directly employing other persons to work onboard the Vessel, the latter shall provide to the Managers documentary evidence of MLC compliance issued under the provisions laid down by the applicable ratifying administration or, in the case of a non-ratifying administration, documentary evidence from a Recognised Organisation that is accepted by the flag administration of the Vessel.
3.1.8 | The Owners authorise the Managers to sign contracts of employment with the Crew as agent only for and on behalf of the Owners and/or to procure that a Seafarer Recruitment & Placement Service, in the country of domicile of a Crew member, signs contracts of employment with such Crew member as agent only for and on behalf of the Owners. The Managers to provide the Owners copies of all the contracts of employment upon request. |
3.2 | Technical Management |
The Managers shall provide technical management which includes, but is not limited to the following functions:
(i) | provision of personnel to supervise the maintenance and general efficiency of the Vessel; |
(ii) | arrangement and supervision of drydockings, repairs, modifications to and the upkeep of the Vessel to the standards agreed with the Owners provided that the Managers shall be entitled to incur the necessary expenditure, which is subject to Owners’ prior approval, to ensure that the Vessel will comply with all requirements and recommendations of the classification society and equipment manufacturers, and with the laws and regulations of the country of registry of the Vessel and of the places where she trades; |
(iii) | arrangement of periodic analysis of the bunker fuel, lubricating oils and chemicals by third parties (the costs being included in the Vessel’s running costs); |
(iv) | appointment of surveyors and technical consultants as the Managers may consider from time to time to be necessary, provided they are pre-approved by the Owners; |
(v) | visits to the Vessel by superintendents or other staff of the Managers for up to 20 days on board the Vessel in any calendar year (or pro rata for part of a calendar year) excluding the dry-docking period of the vessel and visits to the Vessel by superintendents or other staff of the Managers in excess of this allowance to be pre-approved in writing by the Owners; |
(vi) | notify and receive prior approval by the Owners of any non-budgeted item of expenditure; |
(vii) | notify and receive prior approval by the Owners if there is an operational need to exceed quarterly budget allowance as attached to this agreement under Part VI. |
(viii) | development, implementation and maintenance of an SMS and an SSP. |
3.3 | Purchasing |
3.3.1 | The Managers shall arrange for the supply of necessary victualling, stores, spares, provisions, lubricating oils and services (including drydock services) for the Vessel for any amount of up to US$5,000. With respect to the supply of any items of an amount between US$5,000 to US$10,000 the Managers shall request the Owners pre-approval, which should be provided within 48 hours from the Managers’ request. No response within such stipulated timeframe indicates tacit approval by the Owners. For any purchase above US$10,000, the Managers will advise the details and quotations to the Owners in writing requesting authority to proceed. The Owners have the right to arrange for any purchasing and shall advise the Managers accordingly. To enable the Managers to arrange such supplies on the most advantageous terms, the Managers shall be entitled to join with other parties in making arrangements for bulk purchase. The Managers are presently members of MARCAS Limited (“MARCAS”), an independent contracting association providing access to commodities and dry-dock services globally (www.marcas.org). MARCAS negotiates on behalf of its members with selected suppliers the best available price, terms and conditions for the bulk purchase of goods and services for the marine industry with the aim of offering to members and their clients savings on vessel technical operating costs. |
3.3.2 | Details of the suppliers contracted by MARCAS and prices available for the Vessel at the time of supply shall be made available to Owners upon their request. Owners acknowledge that all information relating to prices is confidential and undertake not to disclose the same to third parties without the prior written consent of the Managers. |
3.3.3 | Where MARCAS has negotiated terms and conditions with suppliers of any stores, spares provisions, or lubricating oils (“Goods”) and/or suppliers of services required by the Vessel, then the purchase of such Goods and services will, unless operational or other circumstances otherwise require, be undertaken with such |
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suppliers on the basis of the terms and conditions negotiated by MARCAS.
3.3.4 | MARCAS will where practicable obtain a best price charter from suppliers that the prices for all Goods and services purchased by MARCAS’s members will be the lowest prices available. If the Owners are able to obtain in good faith, on arms’ length terms, on a true like for like basis (including quality, certification, timing, manufacturer, place of supply, etc., but ignoring taxes and exchange rate fluctuations), the same Goods and/or services at a lower price than that obtained by MARCAS, the Owners will supply full details to the Managers who will promptly raise the matter with MARCAS and pass on to Owners any refund obtained by MARCAS from the supplier. |
3.3.5 | The Owners have received details from the Managers of the business rules and operating procedures adopted by MARCAS, including provisions related to fees that MARCAS will retain as applicable, and agree to comply with such rules and operating procedures as the same may be amended from time to time. |
3.3.6 | The Owners acknowledge that they are aware that prices obtained from suppliers require strict adherence to the payment terms agreed with suppliers (normally 45 days from date of invoice) and any failure by the Owners to provide the Managers with funds to settle sums due to suppliers on time will (in the absence of a good faith dispute) result in an immediate 2% surcharge. The Managers are hereby expressly authorised to settle such surcharge charges from any sums held by them on behalf of Owners. The Owners further acknowledge that they are aware if payments to suppliers are regularly made late, or if suppliers are not satisfied with Owners’ credit rating, suppliers may refuse to supply at the prices and on the terms negotiated by MARCAS. |
3.3.7 | The Owners acknowledge that the Managers may be requested by suppliers to disclose details of the beneficial ownership of the Owners and that the Managers may not be able to obtain the most advantageous terms from such suppliers should the Owners not agree to such disclosure. |
(i) as to any changes in insured values required;
(ii) in respect of premiums, franchises and deductibles and any other changes for the new policy year; and
(iii) to update the budget to reflect changes in insurance-premiums.
For the avoidance of doubt under no circumstances will the Managers be liable to the Owners for any losses which the Owners may incur as a result of
the level of insured values.
3.5 | Accounting and Budgeting |
3.5.1 | The Managers shall: |
(i) | maintain records of all costs and expenditure incurred hereunder as well as data necessary or proper for the settlement of accounts between the parties; |
(ii) | establish an accounting system for the Vessel and supply regular monthly reports (within 5 working days from the end of the preceding month) in accordance therewith in the Managers’ standard format or, on agreement of an additional fee, such other form as may be mutually agreed in writing with the Owners. |
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3.5.2 | The Managers shall present to the Owners annually a budget for the following calendar year in the Managers’ standard format. The budget for the period in 2015 following the date stated in Box 4 of Part I is set out in Part VI. |
3.5.3 | The Owners shall notify the Managers of their acceptance and approval of the annual budget within 14 days of presentation and in the absence of any response the Owners shall be deemed to have accepted the said budget. In the event that the Owners do not accept an annual budget presented by the Managers within the period aforesaid and that budget is, in the reasonable opinion of the Managers, fair and reasonable, the Managers shall be entitled to terminate this Agreement by notice in writing, in which event this Agreement shall terminate on the expiry of a period of one (1) month from the date upon which such notice is given. |
3.5.4 | The Managers shall produce a monthly comparison between budgeted and actual expenditure of the Vessel in the Managers’ standard format or, on agreement of an additional fee, such other form as may be mutually agreed in writing accompanied by proper written justification of variances reports. In addition if required by the Owners the Managers shall produce quarterly forecast report on the annual budget. |
3.5.5 | This Clause 3.5 is subject to the provisions of Part VI. |
3.6 | Operations |
As required by the Owners, the Managers shall, as agents for the Owners, provide support on the following functions:
(i) | Monitoring voyage instructions and liaising as appropriate with the Owners, the Owners’ brokers and charteres; |
(ii) | Appointment of agents; and |
(iii) | Arrangement of surveying of cargoes. |
3.7 | Information System Software |
3.7.1 | The Managers will, subject to the remaining provisions of this Clause 3.7, provide the Owners and the Vessel with the Information System Software to allow information from both the Vessel’s and the Managers’ office to be accessed directly by the Owners via the “PartnerShip Network” secure website. Financial, technical and operational information relating to the Vessel will be available from both the Vessel and office outputs, with the ability to “drill down” on accounts. This will provide the Owners with immediate access to the same information available to the Managers and to reports generated for the Owners, with a view to providing improved efficiency and cost savings to the Owners in his overview of the management of the Vessel. |
3.7.2 | Should the Owners have existing software applications on board the Vessel which they wish to retain, the Owners will permit the Managers to carry out an on board audit to assess the suitability, compatibility with the Information System Software, and any risks or disadvantages associated with the continued use of such applications. |
3.7.3 | The main features of the Information System Software at the date of this Agreement are: |
(i) | comprehensive management software providing single point of entry to the Vessel incorporating Crew administration, vessel noon reporting, operational and port reporting, defect and deficiency reporting and performance monitoring; |
(ii) | a ship to shore and shore to ship e-mail package providing cost efficient communications available to both Owners and their charterers; and |
(iii) | a computerised maintenance system including inventory control and automated purchase order handling. (An initial charge, to be agreed with Owners, may be made for the set-up of the maintenance database, depending on the system currently existing on board the Vessel). |
3.7.4 | The costs for the Information System Software are set out in the Fee Schedule, and are included in the Vessel’s running costs, as follows: |
(i) | the license fee; |
(ii) | remote access from the Owners’ Office through the Managers’ Partnership network; |
(iii) | maintenance, updates and upgrades; |
(iv) | 24 hour support; |
(v) | provision of anti-virus software and regular upgrades; |
(vi) | operational manuals on CD ROM and regular updates; |
(vii) | annual remote audit of the Vessel IT systems providing a system health check; |
(viii) | user manuals and training of the Crew in the use of the Information System Software; and |
(ix) | e-mail on board the Vessel. |
3.7.5 | Such costs do not include: |
(i) | the costs of appropriate hardware on board the Vessel; |
(ii) | travel and other related costs for installation support of the Information System Software on board the Vessel; |
(iii) | the set-up cost of the data base for the maintenance system; the Client remains an |
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owner of the PMS data, which can be exported at any given time on request.
(iv) | any specific reports specified by the Owners where new data/specialist reporting is required; and |
(v) | costs incurred pursuant to clause 3.7.2. |
3.7.6 | Installation and set-up of the Information System Software will be undertaken on a date agreed between the Managers and the Owners having regard to the Vessel’s schedule and the availability of the Managers’ personnel. |
3.7.7 | Solely for the duration of this Agreement the Managers hereby grant the Owners a personal, non-transferable non-exclusive license to use a single copy of the Information System Software as installed by the Managers on a single computer on board the Vessel. |
3.7.8 | The Information System Software is owned by the Managers or its subsidiaries and is protected by applicable copyright and patent laws. The Owners may not copy the Information System Software (except for back-up purposes only) or any written materials which accompany it, and may not sell, rent, lease, lend, sub-license, reverse engineer or distribute the Information System Software or such written materials. |
3.7.9 | The Managers do not warrant that the Information System Software will meet the Owners’ requirements or that the use or operation of the Information System Software will be uninterrupted or error free. |
3.8 | Shipboard Oil Pollution Emergency Plan |
3.8.1 | The Managers will prepare and obtain all necessary approvals for a shipboard oil pollution emergency plan (SOPEP) in a form approved by the Marine Environment Protection Committee of the International Maritime Organisation pursuant to the requirements of Regulation 26 of Annex I of the International Convention for the Prevention of Pollution from Ships, 1973, as modified by the Protocol of 1978 relating thereto, as amended (MARPOL 73/78). |
3.8.2 | The SOPEP will be written in the English language and will be reviewed and updated from time to time. If required the Managers will arrange for the translation of the SOPEP into another language, the cost of translation being recoverable in terms of Clause 8.5. |
3.8.3 | The Managers will also undertake regular training of the Crew in the use of the SOPEP including drills to ensure that the SOPEP functions as expected and that contact and information details specified are accurate. |
3.9 | OPA |
3.9.1 | If instructed by the Owners, the Managers will: |
(i) | arrange for the preparation, filing and updating of a contingency Vessel Response Plan in accordance with the requirements of OPA and instruct the Crew in all aspects of the operation of such plan; |
(ii) | identify and ensure the availability by contract or otherwise of a Qualified Individual, a Spill Management Team, an Oil Spill Removal Organisation, resources having salvage, firefighting, lightering and, if applicable, dispersant capabilities, and public relations/media personnel to assist the Owners to deal with the media in the event of discharges of oil. |
3.9.2 | The Managers are expressly authorised as agents for the Owners to enter into such arrangements by Contract or otherwise as are required to ensure the availability of the services outlined in Clause 3.8.1. The Managers are further expressly authorised as agents for the Owners to enter into such other arrangements as may from time to time be necessary to satisfy the requirements of OPA or other Federal or State laws. |
3.9.3 | The Owners will pay the fees due to third parties providing the services described above together with costs to the Managers if any. The level of fees will be included in the Vessel’s running costs. |
3.9.4 | On termination of this Agreement, the Vessel Response Plan and all documentation will be returned to the Managers at the expense of the Owners, provided such expense does not exceed US$150. |
3.10 | Assistance with Sale of Vessel |
The Managers shall, if requested, provide Owners with technical assistance in connection with any sale of the Vessel. The Managers will, if requested in writing by the Owners, comment on the terms of any proposed Memorandum of Agreement, but the Owners will remain solely responsible for agreeing the terms of any Memorandum of Agreement regulating any sale.
3.11 | Vessel trading in high risk areas |
In the event that the Vessel is to trade in a high risk area and in particular an area where piracy is prevalent, the Managers shall:
(i) | Comply in full with the guidance provided by ‘Best Management Practices to Deter Piracy off the Coast of Somalia and in the Arabian Sea Area (BMP)’ as may be revised from time to time and also with any similar guidance which may be issued for other high risk areas. |
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(ii) | Monitor daily guidance and updates provided by The Maritime Security Centre - Horn of Africa (MSCHOA) website (www.mschoa.org) as may be revised from time to time and advise the Vessel accordingly. |
(iii) | Comply with the Managers’ guidelines for ‘Transiting off the coast of Somalia, the Arabian Sea, Gulf of Aden and Red Sea’ as may be revised from time to time and also with any similar guidance which may be issued for other high risk areas. The Managers’ guidelines set out their policy of full compliance with BMP and additional guidance and information on Self Protection Measures (SPM’s) and Citadels or Safe Areas. The Owners will be provided with a copy of the guidelines and costs for SPM’s will be included in the Vessel budget. |
(iv) | Where appropriate, ensure the Vessel follows the International Recommended Transit Corridor (IRTC), using the services of an escorted convoy if available or joining a group transit if not. |
(v) | Monitor routing recommendations for transiting high risk areas as provided by charterers and insurers and review the same as part of the risk assessment carried out for the transit concerned. |
(vi) | Provide sufficient Self Protection Measures (SPM) appropriate to the vessel type, size and speed with a view to protecting the Crew as far as possible in the event of an attack. To be determined by the risk assessment required by BMP for the transit concerned and before entering the high risk area. |
(vii) | Provide training for the Crew in BMP prior to transiting any high risk area. |
4. | Other Services |
4.1 | Subject to the terms and conditions herein provided, during the period of this Agreement the Managers shall carry out, as agents for and on behalf of the Owners, such Other Services as shall have been indicated in Part III. |
4.2 | Other Services shall be provided in accordance with the terms of the Appendices contained in Part III. |
5. | Managers’ Obligations |
5.1 | The Managers undertake to use their best endeavours to provide the Basic Services, the Other Services and the Management Services as agents for and on behalf of the Owners in accordance with sound ship management practice and to protect and promote the interests of the Owners in all matters relating to the provision of Management Services provided however that the |
Managers in the performance of Management Services shall be entitled to have regard to their overall responsibility in relation to all vessels which may from time to time be entrusted to their management and in particular, but without prejudice to the generality of the foregoing, the Managers shall be entitled to allocate available supplies, manpower and services in such manner as in the prevailing circumstances the Managers in their reasonable discretion consider to be fair and reasonable.
5.2 | The Managers shall procure that the requirements of the law of the flag of the Vessel are satisfied and they shall be deemed to be “the Company” as defined by the ISM Code, assuming the responsibility for the operation of the Vessel and taking over the duties and responsibilities imposed by the ISM Code and by the ISPS Code. |
5.3 | The Managers undertake the responsibility to cooperate fully with the Owner and/or any other third party audit firm the Owner chooses with regard to the establishment (design) and the annual testing of the internal controls followed by the Manager relating to the operations performed during providing the services described herein to the Owners (provision of Type II SSAE16 report included). |
6. | Owners’ Obligations |
6.1 | The Owners shall pay all sums due to the Managers punctually in accordance with the terms of this Agreement. Time shall be of the essence in respect of the payment of all such sums. |
6.2 | The Owners shall report (or where the Owners are not the registered owners of the Vessel procure that the registered owners report) to the flag state administration the details of the Managers as the Company as required to comply with the ISM Code. |
6.3 | The Owners shall procure that throughout the period of this Agreement the Vessel will be insured at the Owners’ expense for not less than sound market value or entered for full gross tonnage, as the case may be, for: |
(i) | usual hull and machinery risks (including but not limited to Crew negligence) and excess liabilities; |
(ii) | protection and indemnity risks (including but not limited to pollution risks, diversion expenses and Crew risks); |
(iii) | freight, defense and demurrage; |
(iv) | war risks (including but not limited to blocking and trapping, protection and indemnity, terrorism and Crew risks); and |
(v) | in accordance with MLC, establish insurance to compensate Crew, and/or any officers or |
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ratings supplied by the Owners or on their behalf, for monetary loss that they may incur as a result of the failure of a recruitment and placement service or Owners under the employment agreement, to meet its obligations to them; and
(vi) | such other optional insurances as may be agreed by the Owners (such as piracy, kidnap and ransom, loss of hire) |
in accordance with the best practice of prudent owners of vessels of a similar type to the Vessel, with sound and reputable insurance companies underwriters or associations (provided that, protection and indemnity risks must be placed with a member of the International Group of P&I Clubs) (“the Owners’ Insurances”).
6.4 | The Owners shall procure that all premiums and calls on the Owners’ Insurances are paid by their due date and that the Owners’ Insurances name the Managers and any additional party designated by the Managers as a joint assured for protection and indemnity risks (including pollution risks) and a named assured on all other policies, with the benefit of full cover. The Owners shall, if applicable, provide the Managers with written evidence thereof to the reasonable satisfaction of the Managers on or prior to the Date of Commencement and/or on the date on which the Managers notify the Owners of the appointment of any additional party and within seven (7) days of each renewal date. The Owners shall provide Managers with an appropriate certificate of insurance covering any and all liabilities under the MLC including but not limited to financial security in accordance with regulation 2.5. |
6.5 | As between the Owners and the Managers, the Managers shall not be responsible for paying any premiums or calls arising in connection with such insurances. On termination of this Agreement (howsoever occasioned) or where the Owners make a change in the P&I Club in which the Vessel is entered, the Owners shall procure that the Managers and any additional party designated by the Managers as a joint or named assured shall cease to be a joint or named assured and that they are released from and/or secured for any and all liability for premiums and calls that may arise in relation to the period of this Agreement. For the avoidance of doubt, it is agreed that the Owners shall be liable for all deductibles applying to any insurance policy. |
6.6 | Owners are responsible for the payment of any tonnage tax applicable at the country where this agreement will be officially registered, save as provided in Clause 9.4 of this Agreement. |
6.7 | The Owners are responsible to maintain this management agreement for a minimum period of three (3) months. Such period will include any novation of this management agreement to V.Ships Limited, of Limassol Cyprus. |
7. | Documentation |
7.1 | On or prior to the Date of Commencement the Owners will deliver to the Managers: |
(i) copies of the Vessel’s Certificate of Registry,
(ii) copies of all the Vessel’s trading and classification certificates,
(iii) a copy of the Owners’ certificate of incorporation,
(iv) full details of any resident registered agent for the registered owner of the Vessel,
(v) if applicable, a copy of the bareboat charterparty pursuant to which the Owners are disponent owners of the Vessel,
(vi) in the case of a new vessel, the Owners will deliver a copy of the Building Contract and specification, and in the case of a second hand vessel, a copy of the Memorandum of Agreement in terms of which the Owners acquired the Vessel. The Owners shall be entitled to delete any confidential information (such as price) from the Building Contract or Memorandum of Agreement,
(vii) if the Owners are not the registered owners or the bareboat charterer of the Vessel, in addition to the above, evidence satisfactory to the Managers of their beneficial interest in the Vessel and of their authorisation from the registered owners to enter into this Agreement,
(viii) the name and address of the bank through which the Owners will pay funds due under this Agreement.
In any event, the Managers reserve the right to request evidence satisfactory to them that the Owners are in goodstanding and that the person signing this Agreement on their behalf is duly authorized to do so.
7.2 | The Owners will on request provide the Managers with full details, in writing, of the registered Owners. |
7.3 | The Owners shall be obliged to obtain any required guarantee, bond or other security including, without limitation, the SCAC code and International Carrier Bond as required in order to access the US Bureau of Customs and Border Protection automated manifest system, as required by 68 Fed Reg. 68139 and as amended, and USCG Certificate of Financial Responsibility for water pollution. The Owners shall also be obliged to obtain any permits, licences or the like required to be obtained by an operator of a vessel including, without limitation, the US EPA vessel general permit. |
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7.4 | At the request of the Owners, the Managers will promptly deliver a duly executed technical manager’s undertaking and subordination to the Owners’ lenders’ rights. The Managers further agree that they will cooperate with the Owners’ lenders in providing such undertaking and subordination letter and any other further documentation which may be required by the Owners’ lenders. |
8. | Management Fee |
8.1 | The Owners shall pay to the Managers a fee in the amounts stated in the Fee Schedule in respect of the Basic Services and Other Services which shall be payable by equal monthly installments, the first installment being payable on the Commencement of this Agreement and the payment of the agreed monthly budgeted amounts fifteen (15) days prior to the purchase of the Vessel including payment of the agreed pre-delivery budget and one (1) month fee applicable for the pre-delivery work in respect of the vessel and subsequent installments being payable monthly in advance and fees for Other Services (if applicable) shall be paid at the rates and times specified in the Fee Schedule. |
8.2 | If the Managers’ superintendents or other staff spend more than 20 days onboard the Vessel in any calendar year but excluding the dry-docking period of the vessel (or pro rata for part of a calendar year) such days in excess of 20 on board the Vessel shall be charged at the rate of US$800 per man per day. |
8.3 | Where a charterers vetting inspection may be required and a pre-inspection is requested, the costs of such additional services shall be charged to the Vessel’s account. |
8.4 | If the Vessel is placed on time charter, any costs incurred in complying with charterers requirements (including, but not limited to, additional reporting requirements and visits to the charterers) will be paid by the Owners. |
8.5 | The Managers shall, at no extra cost to the Owners, provide their own office accommodation, office staff and office stationery. The Owners shall reimburse the Managers for all expenses properly incurred under the terms of this Agreement on behalf of the Owners, including, without prejudice to the foregoing generality, postage and communication expenses (which the Managers shall allocate among all vessels managed by them on a basis which the Managers consider to be fair and reasonable having regard to the trade of the vessels, the nationality of the Crews and other relevant factors), Crew Support Costs (as included in the Vessel’s running costs), vessel documentation, administrative expenses of the SOPEP and SSP, travelling expenses and other out of pocket expenses properly and reasonably incurred by the Managers in pursuance of the Management Services. All the above costs will be incurred by the Managers, provided they have been approved by the Owners. |
8.6 | In the event of the termination of this Agreement on the completion of the three (3) months minimum period (such period to include any period that this Agreement has been novated to V.Ships Limited, of Limassol Cyprus as provided in this Agreement) the fees payable to the Managers according to the provisions of Clause 8.1 shall, save as aftermentioned, be paid for a further period of two (2) calendar months from the effective date of termination. After that minimum period of the Agreement there will be only one (1) month fees applicable upon termination subject to agreement that the total value of management fees paid will be at least equivalent to five (5) months. |
8.7 | Fees payable to the Managers will be reviewed annually and shall be adjusted as a minimum by reference to the retail price index relevant to the domicile of the Managers. Where Management Services are wholly or partly provided by third parties, the fees therefor shall be adjusted immediately to take account of increases in the cost of such services. The Managers will, however, use all reasonable endeavours in negotiations with such third parties to minimise such increases. |
8.8 | All fees are exclusive of Value Added Taxes, if any, or other applicable taxes. |
8.9 | Save as otherwise provided in this Agreement, all discounts, rebates and commissions obtained by the Managers in the course of the management of the Vessel shall be credited to the Owners. |
8.10 | If as a result of collision, accident, emergency, or any other extraordinary circumstances, the Managers’ workload is increased beyond that which the parties could reasonably have anticipated, the Managers shall be entitled to reasonable additional remuneration having regard to the nature of the incident, the personnel and resources of the Managers deployed, and all other relevant circumstances including insurance recoveries. |
8.11 | If the Owners decide to lay-up the Vessel and such lay-up lasts for more than two (2) months, an appropriate reduction of the management fee for the period exceeding the two (2) months until the Owners give written notice to remobilize the Vessel, shall be mutually agreed between the parties. |
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9. | Payments and Management of Funds |
9.1 | All sums paid to the Managers by or on behalf of the Owners and all moneys collected by the Managers under the terms of this Agreement (other than fees payable by the Owners to the Managers) shall be held to the credit of the Owners in a separate bank account or accounts which shall be operated by the Managers. The Owners agree to provide to the Managers all information and documentation reasonably required to comply with banking “know your customer” procedures. |
9.2 | Where any sums howsoever arising and whether in respect of fees, budgeted expenditure, nonbudgeted expenditure, other liabilities (present, future, liquidated or unliquidated) or expenses are owed to the Managers in connection with the Vessel, the Managers shall be entitled but not obliged at any time or times to apply any sums standing to the credit of the accounts referred to in Clause 9.1 to settle such sums but shall in any event remain payable by the Owners to the Managers on demand. |
9.3 | On or prior to the Date of Commencement the Owners shall provide to the Managers an amount equivalent to the prorated budgeted days’ expenditure from the Date of Commencement to the end of the first month in management. In addition all pre-delivery expenses are to be funded promptly by the Owners on request from the Managers. The Owners shall provide an amount equivalent to 1/12 of the annual budget for the first full month on or prior to the 1st day of the first full month of the management period. In subsequent months the Managers shall request amounts for the total anticipated monthly expenditure as laid out in clause 9.6. |
9.4 | On or prior to the Date of Commencement the Owners shall provide to the Managers a sum of US$7,500, which shall be available to the Managers in their sole discretion for payment of any sum due under the terms of this Agreement, which sum will be held in the Manager’s bank account (“the Float”). The Owners agree that on termination of this Agreement the Managers shall be entitled to retain all or part of the Float in payment of any sums then outstanding under the terms of this Agreement and, subject thereto, the Managers shall reimburse the balance of the Float to the Owners within two (2) months after the termination of this agreement. On or prior to the Date of Commencement the Owners shall provide to the Managers a sum equal to 50% of the applicable Greek tonnage tax to be paid for the Vessel for the year 2015 (the “Tonnage Tax Amount”), which sum will be held in the Manager’s bank account. Such Tonnage Tax Amount will be provided to the Managers for the payment by the Managers to the Greek Authorities of the applicable Greek Tonnage Tax for the Vessel. Any balance of the Tonnage Tax Amount will be returned to the Owners immediately upon receipt thereof from the applicable Greek Authorities. |
9.5 | The Owners agree that on termination of this agreement payment of all sums outstanding under the terms of the agreement are to be made in advance of the Vessel leaving management. The sum will include without prejudice to the generality of the foregoing, any amounts due to be paid to suppliers and other third parties (as evidenced, in the absence of manifest error, by an accounts payable listing produced by the Managers) and any outstanding accruals for items or services invoiced or delivered. The Owners irrevocably undertake to pay forthwith on request from the Managers any other sums which become due after the effective date of termination, but have been incurred during the prosecution of this Agreement. |
9.6 | The Managers shall each month request (by letter, telex, fax or e-mail) from the Owners the funds required to run the Vessel for the ensuing month. Such request will be for the total of the anticipated monthly expenditure, including, without prejudice to the generality of the foregoing, any sums due to be paid to suppliers and other third parties in the ensuing month (as conclusively evidenced, in the absence of manifest error, by an accounts payable listing produced by the Managers) and any outstanding accruals for items or services invoiced or delivered. In addition, the Owners shall provide the Managers upon request with any funds which the Managers may reasonably request to cover any unbudgeted, unexpected, occasional or extraordinary item of expenditure. All such funds shall be received by the Managers within five (5) days after the receipt of such requests and shall be held to the credit of the Owners in the account(s) referred to in Clause 9.1. The Managers shall be entitled to allocate such funds in such manner as the Managers reasonably determine, and it shall not be open to the Owners to direct the Managers otherwise and under no circumstances shall any funds received be held on trust by the Managers for any specific purpose. In case there is any surplus of funds, same will be applied on the quarterly budget. |
9.7 | Notwithstanding anything contained herein, the Managers shall in no circumstances be required to use or commit their own funds to finance the provision of the Management Services and all payments due shall be made punctually to the |
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Managers (and not any third party) in accordance with the terms of this Agreement in full without any deduction whatsoever.
9.8 | In addition to the funds referred to above the Owners shall pay and/or reimburse the Managers in respect of all expenses incurred prior to the Date of Commencement including, but not limited to, riding Crew wages, initial Crew movements, Crew standby expenses, communication and liaison expenses and ITF welfare contributions. |
10. | Managers’ Right to Sub-Contract |
10.1 | The Managers shall be entitled to procure performance of the Managers’ obligations hereunder by their parent, subsidiary or associated companies or (in the case of Other Services) third parties (hereinafter collectively called the “Sub-Managers”) in accordance with the following provisions of this Clause 10.1, provided that the Owners have given their prior written consent: |
(i) | any such performance of all or any of the Managers’ obligations by the Sub-Managers shall be and constitute full and sufficient performance by the Managers of their obligations hereunder; |
(ii) | the Owners hereby agree with the Managers that insofar as the Sub-Managers perform the obligations of the Managers the Sub-Managers shall be entitled to the benefits of the provisions of Clause 11; and |
(iii) | any performance of the Managers’ obligations by the Sub-Managers shall be without prejudice to the rights of the Owners hereunder for any failure by the Managers in performance of the Managers’ duties and obligations hereunder and notwithstanding performance by the Sub-Managers the Managers shall remain responsible to the Owners for performance of their obligations hereunder. |
10.2 | The provisions of Clause 10.1 shall remain in force notwithstanding termination of this Agreement. |
11. | Responsibilities |
11.1 | Force Majeure |
11.1.1 | Neither the Owners nor the Managers shall be liable for any loss or damage or total or partial failure to perform this Agreement (other than a failure to perform an obligation to pay money) caused wholly or partly by any circumstance or matter beyond the reasonable control of the relevant party, as the case may be, including (without limiting the generality of the foregoing) acts of God, acts of governmental authorities, fires, strikes, floods, epidemics, quarantine restrictions, wars, insurrections, riots, violent demonstrations, criminal offences (other than criminal offences attributable to each Party’s employees, agents or sub-contractors), acts and omissions of civil or military authority or of usurped power, requisition or hire by any governmental or other competent authority, embargoes. |
11.1.2 | Where a party seeks to rely upon a force majeure event as described in Clause 11.1.1 it will advise the other party of the force majeure event at the earliest opportunity and also advise that party of the likely duration of such force majeure situation. |
11.2 | Liability to Owners |
(i) | Without prejudice to Clause 11.1, the Managers shall be under no liability whatsoever to the Owners for any loss, damage, delay or expense of whatsoever nature, whether direct or indirect, (including but not limited to loss of profit arising out of or in connection with detention of or delay to the Vessel) and howsoever arising in the course of performance of the Management Services unless same is proved to have resulted solely from the negligence, gross negligence or wilful default of the Managers or their employees or agents, or sub-contractors employed by them in connection with the Vessel, in which case (save where loss, damage, delay or expense has resulted from the Managers’ personal act or omission committed with the intent to cause same or recklessly and with knowledge that such loss, damage, delay or expense would probably result) the Managers’ liability for each incident or series of incidents giving rise to a claim or claims shall never exceed a total of ten times the annual management fee payable hereunder for Basic Services. |
(ii) | Notwithstanding anything that may appear to the contrary in this Agreement, the Managers shall not be responsible for any of the actions of the Crew even if such actions are negligent, grossly negligent or wilful, except only to the extent that they are shown to have resulted from a failure to discharge their obligations under Clause 3.1 in which case their liability shall be limited in accordance with the terms of this Clause 11. |
11.3 | Indemnity - General |
Except to the extent and solely for the amount therein set out that the Managers would be liable under Clause 11.2, the Owners hereby undertake to keep the Managers and their employees, agents
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and sub-contractors indemnified and to hold them harmless against all actions, proceedings, claims, demands or liabilities whatsoever or howsoever arising out of or in connection with the performance of this Agreement, including, but not limited to, any and all liability arising under the MLC, and against and in respect of all costs, loss, damages and expenses (including legal costs and expenses on a full indemnity basis) which the Managers may suffer or incur (either directly or indirectly) in the course of the performance of this Agreement.
11.4 | Indemnity - tax |
Without prejudice to the general indemnity set out in Clause 11.3, the Owners hereby undertake to keep the Managers, their employees, agents and sub-contractors indemnified and to hold them harmless against all taxes, imposts and duties levied by any government as a result of the trading or other activities of the Owners or the Vessel and that whether or not such taxes, imposts and duties are levied on the Owners or the Managers.
11.5 | “Himalaya” |
Subject to any provision of the Agreement to the contrary, it is hereby expressly agreed that no employee or agent of the Managers (including every sub-contractor from time to time employed by the Managers and the employees of such subcontractors) shall in any circumstances whatsoever be under any liability whatsoever to the Owners for any loss, damage or delay of whatsoever kind arising or resulting directly or indirectly from any act neglect or default on his part while acting in the course of or in connection with his employment and, without prejudice to the generality of the foregoing provisions in this Clause, every exemption, limitation, condition and liberty herein contained and every right, exemption from liability defence and immunity of whatsoever nature applicable to the Managers or to which the Managers are entitled hereunder shall also be available and shall extend to protect every such employee or agent of the Managers acting as aforesaid and for the purpose of all the foregoing provisions of this clause 11 the Managers are or shall be deemed to be acting as agent or trustee on behalf of and for the benefit of all persons who are or might be their servants or agents from time to time (including sub-contractors as aforesaid) and all such persons shall to this extent be or be deemed to be parties to this Agreement.
11.6 | The provisions of Clause 11 shall remain in force notwithstanding termination of this Agreement. |
13. | Claims/Disputes |
13.1 | At the request of the Owners, the Managers shall handle and settle all claims arising out of the Management Services hereunder and keep the Owners informed regarding any incident of which the Managers become aware which gives or may give rise to claims or disputes involving third parties. |
13.2 | The Managers shall, as instructed by the Owners, bring or defend actions, suits or proceedings in connection with matters entrusted to the Managers according to this Agreement. |
13.3 | The Managers in cooperation with the Owners shall have power to obtain legal or technical or other outside expert advice in relation to the handling and settlement of claims and disputes or all other matters affecting the interests of the Owners in respect of the Vessel. |
13.4 | The Owners shall arrange for the provision of any necessary guarantee bond or other security. |
13.5 | The Owners shall pay to the Managers a fee for time spent by the Managers in carrying out their obligations under Clause 13 and such fee shall be mutually agreed by the Owners and the Managers (such fee to not exceed the rate of US$800 per man per day). In addition any costs incurred by |
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the Managers in carrying out their obligations according to Clause 13 shall be reimbursed by the Owners.
13.6 | The Owners agree to the use of MTI Network for crisis management response and agree to pay any fees additional to the annual retainer of MTI Network (as included in the budget) which may be incurred. |
14. | Auditing, Records |
14.1 | The Managers shall at all times maintain and keep true and correct accounts and shall make the same available at the Managers’ offices for inspection and auditing by the Owners at such times as may be mutually agreed. The Owners agree that the Managers shall be entitled to charge for their reasonable costs and expenses should the Owners require hard copies of supplier invoices and related documentation. |
14.2 | The Managers shall be entitled to electronically archive all of the Vessels’ records and arrange safe storage of the same, the costs being included in the Vessel’s running costs. |
14.3 | All accounting and other records relating the Vessel will be retained by the Managers for a period of two (2) years after the date of termination, for whatever reason, of this Agreement, and thereafter shall be destroyed or, if electronically archived, expunged unless the Owners request the Managers to deliver such records to them at the Owners’ expense. |
14.4 | The Managers may request and the Owners shall, in a timely manner, make available all documentation, information and records reasonably required by the Managers to enable them to perform the Management Services. |
15. | Inspection of Vessel |
The Owners shall have the right at any time to inspect the Vessel for any reason they consider necessary. The Owners will, where practicable, give reasonable notice to the Managers of their intention to visit the Vessel. After such inspection should Owners advise Mangers of reasonable comments about the Vessel’s condition and the Crew’s performance, Managers undertake to take necessary rectifying actions at the Owners expense.
16. | Compliance with Laws and Regulations |
16.1 | The parties will not do or permit anything to be done which might cause any breach or infringement of the laws and regulations of the country of registry of the Vessel, and of the places where she trades, provided always that the Managers’ obligations under this Clause will only relate to matters which the Managers are in fact capable of fulfilling and on the understanding that the Managers receive all necessary co-operation, information and funding from the Owners. |
16.2 | All intended carriage, trade or voyages must be fully compliant with relevant international sanctions and prohibitions. Managers, Crew and Owners accept such requirement as a condition of this Agreement entitling the Managers to terminate the Agreement should there be a breach of international sanctions and prohibitions. The Owners shall indemnify and hold harmless the Managers, their employees, agents and subcontractors in respect of any consequence that may arise from the Vessel being arrested or detained, and should the Vessel not then be capable of immediate release, as a result of sanctions or prohibitions affecting the Owners’ banks and/or insurers. |
17. | Duration of the Agreement |
17.1 | Termination by Notice |
This Agreement shall come into effect on the Date of Commencement for a minimum period of three (3) months and shall continue thereafter until terminated by either party giving to the other notice in writing, in which event this Agreement shall, subject as aftermentioned terminate on the expiry of a period of one (1) month from the date upon which such notice is received. Where the Vessel is not at a convenient port or place on the expiry of such period, this Agreement shall terminate on the subsequent arrival of the Vessel at a convenient port or place.
It is hereby agreed between the Parties that this Agreement may be novated by the Owners to V.Ships Limited, of Limassol Cyprus at any time from the Date of Commencement by a sole written notice of the Owners to the Managers. The Managers hereby undertake to procure that V.Ships Limited, of Limassol Cyprus enters into a novation agreement. Upon the Owners’ notice to the Managers, the Owners, the Managers and V.Ships Limited, of Limassol Cyprus will enter into a novation agreement in the form attached in Part VII of this Agreement.
17.2 | Termination by default - Owners |
(i) | The Managers shall be entitled to terminate the Agreement with immediate effect by notice in writing if any moneys requested by the Managers from the Owners, shall not have been received in the Managers’ nominated account within ten (10) calendar days of |
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payment having been requested in writing by the Managers or if the Owners fail to comply to the reasonable satisfaction of the Managers with the requirements of clauses 6.3, 6.4 and 6.5 or if the Vessel is repossessed by a mortgagee.
(ii) | If the Owners |
(a) | otherwise fail materially to meet their obligations hereunder for reasons within their control, or |
(b) | proceed with employment of or continue to employ the Vessel in the carriage of contraband, blockade running or in an unlawful and/or sanctionable trade, or on a voyage or in a manner which, in the opinion of the Managers, is unduly hazardous or improper, or potentially unlawful and/or sanctionable or |
(c) | fail to comply with any recommendation of the Managers which the Managers consider to be reasonable and non- compliance with which may affect the Managers’ reputation or its obligations under the ISM Code or any other applicable laws or regulations |
then the Managers may give written notice to the Owners specifying the default and requiring them to remedy it. In the event that the Owners fail to remedy such default (in the case of (a) above, if remediable) within a reasonable time to the reasonable satisfaction of the Managers, the Managers shall be entitled to terminate this Agreement with immediate effect by notice in writing.
17.3 | Termination by Default - Managers |
If the Managers fail materially to meet their obligations under this Agreement for reasons within the control of the Managers, the Owners may give written notice to the Managers specifying the default and requiring them to remedy it as soon as practically possible. In the event that the Managers fail to remedy such default within a reasonable period of time but in any case latest within fifteen (15) days from the date of the Owners’ notice, if remediable, to the reasonable satisfaction of the Owners, the Owners shall be entitled to terminate this Agreement with immediate effect by notice in writing.
17.4 | Liquidation |
The Parties to this Agreement shall be entitled to terminate this Agreement forthwith in the event of an order being made or resolution passed for the winding up, dissolution, liquidation or bankruptcy of the Owners of the Vessel (otherwise than for the purpose of reconstruction or amalgamation) or the Managers or if a receiver or similar officer is appointed to the Owners or the Managers or if either Party ceases to carry on business or make any special arrangement or composition with their creditors or if the Owners suspend payment under this Agreement.
17.5 | Extraordinary Termination |
This Agreement shall be deemed to be terminated in the case of the sale of the Vessel or its being bareboat chattered, if applicable and unless otherwise agreed, when the bareboat charter comes to an end or if the Vessel becomes a total loss or is declared as a constructive or compromised or arranged total loss or is requisitioned. Notwithstanding such deemed termination, fees shall be paid in accordance with the provisions of Clause 8.6.
17.6 | For the purpose of sub-clause 17.5 hereof: |
(i) | the date upon which the Vessel is to be treated as having been sold or otherwise disposed of shall be the date on which the registered owners cease to be registered as owners of the Vessel; |
(ii) | the Vessel shall not be deemed to be lost until either she has become an actual total loss or agreement has been reached with her Underwriters in respect of her constructive, compromised or arranged total loss or if such agreement with her underwriters is not reached it is adjudged by a competent tribunal that a constructive loss of the Vessel has occurred or a Notice of Abandonment is issued to underwriters. |
17.7 | The termination of this Agreement shall be without prejudice to all rights accrued due between the parties prior to the date of termination. |
17.8 | All outstanding fees and other sums payable by the Owners require to be paid in full on or prior to termination, for whatever reason, of this Agreement. Save where the Agreement is terminated by the Owners in accordance with Clause 17.3, the Managers shall be paid fees in accordance with Clause 8.6. The Owners shall also pay on demand Severance Costs together with repatriation costs and expenses. |
18. | Confidentiality |
18.1 | As between the Owners and the Managers, the Owners hereby agree and acknowledge that all title and property in and to the management manuals of the Managers and other written material of the Managers concerning management functions and activities is vested in the Managers and the Owners agree not to disclose the same to |
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any third party and, on the termination of this Agreement, to return all such manuals and other material to the Managers. For the purposes of this Clause reference to “the Managers” includes the parent, subsidiary and associated companies of the Managers and any third parties providing Management Services.
19. | Suspension of Services |
If, at any time, the Owners have failed to pay the sums due and owing, as set out in Clause 9, or are in breach of any other terms of this Agreement, in addition to the Managers’ rights pursuant to Clause 17 to terminate, the Managers shall, without prejudice to their liberty to terminate, be entitled to withhold/suspend the performance of any and all of their obligations hereunder (including, but not limited to, removal of Crew) and shall have no responsibility whatsoever for any consequences thereof, in respect of which the Owners hereby indemnify the Managers, and fees (as set out in the Fee Schedule) shall continue to accrue and any extra expenses resulting from such withholding shall be for the Owners’ account.
20. | Law and Arbitration |
20.1 | This Agreement shall be governed by English law and any dispute arising out of or in connection with this Agreement shall be referred to arbitration in London in accordance with the Arbitration Act 1996 and any amendment thereto or substitution therefor. |
20.2 | The arbitration shall be conducted in accordance with the London Maritime Arbitrators’ (LMAA) Terms current at the time when the arbitration is commenced. |
20.3 | Save as aftermentioned, the reference shall be to three arbitrators, one to be appointed by each party and the third by the two so appointed. A party wishing to refer a dispute to arbitration shall appoint its arbitrator and send notice of such appointment to the other party requiring the other party to appoint its arbitrator within fourteen (14) days of that notice and stating that it will appoint its arbitrator as sole arbitrator unless the other party appoints its own arbitrator and give notice that it has done so within the fourteen (14) days specified. If the other party does not appoint its own arbitrator and give notice that it has done so within the fourteen (14) days specified, the party referring the dispute to arbitration may, without the requirement of any further prior notice to the other party, appoint its arbitrator as sole arbitrator and shall advise the other party accordingly. The award of a sole arbitrator shall be as binding as if he had been appointed by agreement. |
20.4 | In cases where neither the claim nor any counterclaim exceeds the sum of US$50,000 (or such other sum as the parties may agree) the arbitration shall be conducted in accordance with the LMAA Small Claims Procedure current at the time when the arbitration proceedings are commenced. |
20.5 | Unless otherwise provided for in a separate agreement, the Owners hereby agree that any claim by any company providing services under clause 24 below shall, unless such company elects otherwise, be subject to English law and any dispute shall be referred to arbitration in accordance with the foregoing provisions of this clause 20. |
20.6 | Except to the extent provided for in clauses 10, 11 and 20.5 no third party shall have the right to enforce any term of this Agreement. |
21. | Amendments to Agreement |
Any and all amendments will be agreed by all the parties in the Agreement and will be in writing.
22. | Time Limit for Claims |
Any and all liabilities of either party to the other arising under this Agreement or otherwise in relation to the Vessel (except in the case of fraud) shall be deemed to be waived and absolutely barred on the relevant date unless prior to the relevant date written particulars of any claim (giving details of the alleged breach in respect of which such claim is made and a preliminary statement of the amount claimed) have been intimated in writing by the claimant by the relevant date, and any such claim shall be deemed (if it has not previously been satisfied, settled or withdrawn) to have been withdrawn unless arbitration proceedings have been commenced under Clause 20 prior to the expiry of six (6) months after the relevant date. For the purposes of this Clause 22, the “relevant date” is one year after the date of termination, for whatever reason, of this Agreement.
23. | Condition of Vessel |
The Owners acknowledge that they are aware that the Managers are unable to confirm that the Vessel, its systems, equipment and machinery are free from defects, and agree that the Managers shall not in any circumstances be liable for any losses, costs, claims, liabilities and expenses which the Owners may suffer or incur resulting from preexisting or latent deficiencies in the Vessel, its systems, equipment and machinery.
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24. | Use of Associated Companies |
24.1 | The Managers hereby disclose to the Owners that they may, in the course of performing Management Services, utilize the services of companies associated with the Managers. Without prejudice to the foregoing generality, associated companies of the Managers may be used in connection with inter alia travel, insurance, port agency catering and consultancy services. Where companies associated with the Managers provide services in connection with the above or any other matters, such companies will be entitled to charge and retain for their own benefit usual remuneration for the provision of their services (whether in the form of commission or fees). The Managers will send a list of the Associated Companies to Owners on or prior to the Date of Commencement. |
24.2 | The Owners hereby consent to the arrangements set out in Clause 24.1. |
25. | Notices |
25.1 | Any notice or other communication under or in relation to this Agreement (a “Communication”) may be sent by fax, registered or recorded mail, by personal delivery. |
25.2 | The addresses of the parties for service of a Communication shall be as stated in Boxes 5 and 6 respectively of Part I. |
25.3 | A Communication shall be deemed to have been delivered and shall take effect: |
(i) | in the case of a fax on the day of transmission; and |
(iii) | if delivered personally or sent by registered or recorded mail at the time of delivery. |
26. | Staff Loyalty | |
The Owners shall not and shall procure that their parent, subsidiary and associate companies shall not, without the written consent of the Managers, during the course of this Agreement or for a period of six (6) months following termination directly or indirectly offer any employment to any employee of the Managers engaged in providing Management Services or directly or indirectly induce or solicit any such person to take up employment with the Owners or any associated or affiliated company or use the services of any such person either independently or via a third party. In the event that the Managers agree to any of its employees accepting an offer of employment as aforesaid, the Owners shall pay to the Managers a sum equivalent to 25% of the new annual salary of that employee, payable within seven days of the date of the written agreement of the Managers. Such payment shall be construed as liquidated damages and not as a penalty, being the parties agreed reasonable estimate of the Managers’ loss. This clause will not apply to any staff recruited or seconded specifically from Seanergy for the Seanergy vessels. |
27. | Entire Agreement |
27.1 | This Agreement constitutes the entire agreement and understanding between the parties with respect to the subject matter of this Agreement and (in relation to such subject matter) supersedes all prior discussions, understandings and agreements between the parties and all prior representations and expressions of opinion by the parties. |
27.2 | Each of the parties acknowledges that it is not relying on any statements, warranties, representations or understandings (whether negligently or innocently made) given or made by or on behalf of the other in relation to the subject matter hereof and that it shall have no rights or remedies with respect to such subject matter otherwise than under this Agreement. The only remedy available shall be for breach of contract under the terms of this Agreement. Nothing in this clause shall, however, operate to limit or exclude any liability for fraud. |
28. | Partial Validity |
If any provision of this Agreement is or becomes or is held by any arbitrator or other competent body to be illegal, invalid or unenforceable in any respect under any law or jurisdiction, the provision shall be deemed to be amended to the extent necessary to avoid such illegality, invalidity or unenforceability, or, if such amendment is not possible, the provision shall be deemed to be deleted from this Agreement to the extent of such illegality, invalidity or unenforceability and the remaining provisions shall continue in full force and effect and shall not in any way be affected or impaired thereby.
29. | Non Waiver |
No failure to exercise nor any delay in exercising any right, power, privilege or remedy under this Agreement shall in any way impair or affect the exercise thereof or operate as a waiver in whole or in part. No single or partial exercise of any right, power, privilege or remedy under this Agreement shall prevent any further or other exercise thereof or the exercise of any other right, power, privilege or remedy.
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SHIP TECHNICAL MANAGEMENT AGREEMENT - PART III
OTHER SERVICES
APPENDIX 1* - Chartering (only applicable if not deleted fee specified in Box 1
of the Fee Schedule)
The Managers shall, in accordance with the Owner’s instructions, provide chartering services which term includes but is no limited to seeking and
negotiating employment for the Vessel and the conclusion (including the execution thereof) of charterparties or other contracts relating to the employment of the Vessel. Consent thereto in writing (including telex or fax) shall be obtained from
the Owners before any contract in respect of the Vessel’s employment is concluded.
The fee for the foregoing services shall be such sum as is set out in the Fee Schedule.
APPENDIX 2* - Post Fixture Services (only applicable if not deleted fee specified in Box 2 of the Fee Schedule)
The Managers shall provide post fixture services which includes such of the following functions as have been agreed with the Owners:
The fee for the foregoing services shall be such sum as is set out in the Fee Schedule.
APPENDIX 3* - Surveys or other Consultancy Services (only applicable if not deleted – fee specified in Box 3 of the Fee
Schedule)
Any routine superficial inspections of ships afloat or other consultancy services will be undertaken on the following terms:
APPENDIX 4* - Bunker Services (only applicable if not deleted – fee specified in Box 4 of
the Fee Schedule)
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The Mangers shall arrange for the provision of bunker fuel of the quality agreed with the Owners as required for the Vessel’s trade.
The Managers shall be entitled to order bunker fuel through such brokers or suppliers as the Managers deem appropriate unless the Owners instruct the
Managers to utilise a particular supplier which the Managers will be obliged to do provided that the Owners have made prior credit arrangements with such supplier. The Owners shall comply with the terms of any credit arrangements made by the
Managers on their behalf.
The Managers shall not in any circumstances have any liability for any bunkers which do not meet the required specification. The Managers will, however,
take such action, on behalf of the Owners, against the supplier of the bunkers, as is agreed with Owners
The fee for the foregoing services shall be such sum as is set out in the Fee Schedule.
APPENDIX 5 - On Board Safety Audit and Safety Training (only applicable if not deleted - at no extra cost)
1. | The Managers shall arrange on board safety audit and training which will include the following functions: |
(i) | preparation and updating of specialist safety manuals not already included in the SMS; |
(ii) | periodic on board safety audit and on board safety training; |
(iii) | reporting to the Vessel (via the Managers) on information gained from visits to other vessels and industry forums. |
2. | The cost of the foregoing services shall be such sum as is set out in the Fee Schedule and shall be included in the budget agreed with the Owners. |
3. | The Managers have entered into sub-contracts with third parties to permit them to supply this service. |
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SHIP TECHNICAL MANAGEMENT AGREEMENT - PART IV
FEE SCHEDULE
M/V “LEADERSHIP”
BASIC SERVICES (Clause 3 of Part II) | Amount | Frequency | ||
Management Fee | US$10,800 per month | Monthly | ||
Information System fees (Shipsure) | At cost (already in the budget) | Per year | ||
Planned maintenance - data base development fee (maximum of 42 chargeable days) | At cost (already on the pre-delivery budget) | 30 days of invoice | ||
Crewing: Fixed Cost invoice - Crewing Costs (Part VI) |
US$94,914 per year US$29,957 per year |
Monthly | ||
Other Crew costs (ITF, SEPF, PNO fee etc.) | At cost | Monthly | ||
Management Expenses: | Monthly | |||
Greek Tonnage Tax (if applicable) | 50% Deposited in advance (15 days prior to commencement) |
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SHIP TECHNICAL MANAGEMENT AGREEMENT - PART V
FLEET DETAILS
N/A
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SHIP TECHNICAL MANAGEMENT AGREEMENT - PART VI
INITIAL BUDGET
Crew
The following Crew costs are charged at a fixed cost based on the agreed budget and subject to the Vessel’s
Crew complement and trading area remaining unchanged (Fixed Cost Invoice - Crewing Costs):
Recruitment costs to include:
Manning and mobilization fees
Medical costs
Training costs
Visa costs (excluding USA)
Domestic travel
Wage related union and social costs
Flag required licenses
MSO communications
Bank charges (in relation to allotments by the local manning offices i.e. Manila)
Working gear (2 Boiler suits and 1 pair of safety shoes)
If the Vessel’s Crew complement and/or trading area are changed with the result that these costs increase the Owners agree that the fixed cost shall be revised as may be mutually agreed.
The Managers shall not be required to provide to the Owners any invoices or related documentation other than the Fixed Cost Invoice.
Other Crew costs are charged at cost including:
Crew Travel
Crew Wages
ITF fee, SEPF
PNO fee
Victualling at US$8.00 (excluding bottle of water)
D&A testing
Crew welfare
Mail for Crew
Newslink
Bank charges
Technical
Stores, Spares, Lub Oils, Surveys & Services, Chemicals, Repairs
Safety & Risk
Administration / Overheads
Registration Expenses, Management Fees, Management Expenses, Other Costs
OPERATING COSTS EXCL. DRYDOCKING
Drydocking
Dry docking Provision
Extraordinary M&R
OPERATING COSTS INCL. DRYDOCKING
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Crew Compliment
1 | Master | Ukrainian | |
2 | Chief Officer | Ukrainian | |
3 | 2nd Officer | Filipino | |
4 | 3rd Officer | Filipino | |
5 | Chief Engineer | Ukrainian | |
6 | 2nd Engineer | Ukrainian | |
7 | 3rd Engineer | Filipino | |
8 | 4th Engineer | Filipino | |
9 | Electrical Officer | Filipino | |
10 | Bosun | Filipino | |
11 | AB | Filipino | |
12 | AB | Filipino | |
13 | AB | Filipino | |
14 | AB | Filipino | |
15 | OS | Filipino | |
16 | OS | Filipino | |
17 | Oiler | Filipino | |
18 | Oiler | Filipino | |
19 | Oiler | Filipino | |
20 | Fitter | Filipino | |
21 | Wiper | Filipino | |
22 | Cook | Filipino | |
23 | Messman | Filipino |
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2015 Budget (all figures in USD)
2015 OPERATING COSTS
Crew Wages | 840,888 | |||
Crew Travel | 96,300 | |||
Other Crew Costs | 29,957 | |||
Victualling | 67,160 | |||
Recruitment & Operational | 94,914 | |||
TOTAL CREW COSTS | 1,129,219 | |||
Stores | 127,500 | |||
Spares | 125,500 | |||
LubOils | 178,789 | |||
Surveys & Services | 29,000 | |||
Repairs | 88,500 | |||
TOTAL TECHNICAL COSTS | 549,289 | |||
Safety & Quality | 30,750 | |||
TOTAL SAFETY & QUALITY | 30,750 | |||
Registration Expenses | 0 | |||
Management Fees | 129,600 | |||
Management Expenses | 39,500 | |||
Other Costs | 12,500 | |||
TOTAL GENERAL EXPENSES | 181,600 | |||
ANNUAL OPERATING COSTS | $ | 1,890,858 | ||
DAILY OPERATING COSTS | $ | 5,180 |
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PART VII
Form of Novation Agreement
Novation Agreement
Date: [ ] 2015
PARTIES:
1 | V.Ships Greece Ltd., of Bermuda, with registered address at Par la ville place 14, Par la ville road, Hamilton HM 08, Bermuda, c/o Agiou Dionisiou 3, (herein referred to as the “Existing Manager”) |
2 | Leader Shipping Co., of the Marshall Islands, with registered address at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH96960 Marshall Islands (herein referred to as the “Owner”) |
3 | V.Ships Limited, of Limassol Cyprus, with registered address at Zenas Gunther, 16-18, Agia Triada, 3035 Limassol, Cyprus (herein referred to as the “New Manager”) |
WHEREAS:
A. | This Novation Agreement is supplemental to a Ship Management Agreement dated 11 February 2015 made between the Existing Manager and the Owner in respect of the vessel “LEADERSHIP” registered in the name of the Owner under the Bahamas flag with IMO no. 9233923 (the “Management Agreement”). |
B. | In accordance with Clause 17 of the Management Agreement, the Existing Manager and the Owner have agreed that the Management Agreement may be novated by the Owners to the New Manager at any time from the Date of Commencement (as defined in the Management Agreement) by a sole written notice of the Owners to the Managers. |
C. | The Owners have notified the Existing Manager on the novation of the Management Agreement and it has been agreed that the Existing Manager be released and discharged from the Management Agreement as from [ ] (the “Effective Date”) and that the Owner releases and discharges the Existing Manager with respect to the Management Agreement from the Effective Date upon the terms of the New Manager undertaking to perform in all respects the Management Agreement and be bound by all the terms of the Management Agreement in place of the Existing Manager. |
D. | The Management Agreement, as Annexed hereto, has not been amended, varied, cancelled, novated or terminated and represents the entire agreement between the Existing Manager and the Owner. |
NOW THEREFORE, in consideration of the premises and the mutual covenants herein set out, it is hereby agreed as follows:-
1. | Novation and Release |
1.1 | With effect from the Effective Date as defined in paragraph “C” above and by mutual agreement between the parties and in consideration of the mutual undertakings and releases herein contained, the New Manager shall substitute the Existing Manager under the Management Agreement and the New Manager shall as from the Effective Date assume all rights and obligations of the Existing Manager arising out of or in connection with the Management Agreement and agrees to be bound in all respects in place of the Existing Manager by the terms of the Management Agreement, which shall hereafter be |
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construed and treated in all respects as if the New Manager had been originally named as a party to the Management Agreement.
1.2 | The Owner hereby agrees to continue to be bound by the Management Agreement in all respects vis-a-vis the New Manager from the Effective Date and further agrees to release the Existing Manager from any further liability under the Management Agreement that may arise or be incurred from events after the Effective Date. |
1.3 | Any issues or disputes arising between the Existing Manager and the New Manager in connection with the Management Agreement shall be resolved between themselves without involving or prejudicing the Owner. |
1.4 | Nothing in this Novation Agreement shall affect or prejudice any claim or demand whatsoever which either the Owner or the Existing Manager may have against the other relating to matters arising prior to the Effective Date. |
2. | Amendments to the Management Agreement |
From the Effective Date, the following amendments are agreed to the Management Agreement:
(a) | all references to the “Managers” in the Management Agreement shall be deemed to mean the New Manager and not the Existing Manager; and |
(b) | In Box 3 of Part I of the Management Agreement will be replaces as of the Effective Date with the following: |
3. | Managers |
Name: V.SHIPS LIMITED, of Limassol Cyprus | ||
Registered Office: Zenas Gunther, 16-18, Agia Triada, 3035 Limassol, Cyprus Country of Incorporation: Cyprus | ||
Telephone Number: +357 25848400 | Fax Number: +357 255601700 | |
Contact Name: Capt. Alex Halavins | Position: General Manager | |
Email address: alex.halavins@vships.com |
3. | Law and Jurisdiction |
This Agreement is governed by and shall be construed in accordance with English law. Each party agrees with the others that, in the event of a dispute between them or any of them, such disputes shall be referred to arbitration in London, and the arbitration agreement between such parties shall be in the terms of clause 20 of the Management Agreement. In the event of a dispute involving all the parties, it is agreed that there shall be a consolidated reference to arbitration, and that if separate references are commenced they shall upon request of any party be consolidated.
THIS AGREEMENT has been executed by the parties to this Agreement as a deed on the date specified at the beginning of this Agreement.
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Executed as a Deed | ) |
By Capt. Mauro Renaldi | ) |
for and on behalf of | ) |
V.Ships Greece Ltd. | ) |
of Bermuda | ) |
in the presence of: | ) |
Executed as a Deed | ) |
By Mr. Stamatios Tsantanis | ) |
for and on behalf of | ) |
Leader Shipping Co. | ) |
of the Marshall Islands | ) |
in the presence of: | ) |
Executed as a Deed | ) |
By Capt. Alex Halavins | ) |
for and on behalf of | ) |
V.Ships Limited | ) |
of Limassol Cyprus | ) |
for and on behalf of | ) |
the presence of: | ) |
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Annex - Copy of the Management Agreement dated 11 February 2015
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Novation Agreement
Date: 28 July 2015
PARTIES:
1 | V.Ships Greece Ltd., of Bermuda, with registered address at Par la ville place 14, Par la ville road, Hamilton HM 08, Bermuda, c/o Agiou Dionislou 3, (herein referred to as the “Existing Manager”) |
2 | Leader Shipping Co., of the Marshall Islands, with registered address at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH96960 Marshall Islands (herein referred to as the “Owner”) |
3 | V.Ships Limited, of Limassol Cyprus, with registered address at Zenas Gunther, 16-18, Agia Triads, 3035 Limassol, Cyprus (herein referred to as the “New Manager”) |
WHEREAS:
A. | This Novation Agreement is supplemental to a Ship Management Agreement dated 11 February 2015 made between the Existing Manager and the Owner in respect of the vessel “LEADERSHIP” registered in the name of the Owner under the Bahamas flag with IMO no. 9233923 (the “Management Agreement”), |
B. | In accordance with Clause 17 of the Management Agreement, the Existing Manager and the Owner have agreed that the Management Agreement may be novated by the Owners to the New Manager at any time from the Date of Commencement (as defined in the Management Agreement) by a sole written notice of the Owners to the Managers. |
C. | The Owners have notified the Existing Manager on the novation of the Management Agreement and it has been agreed that the Existing Manager be released and discharged from the Management Agreement as from 28 July 2015 (the “Effective Date”) and that the Owner releases and discharges the Existing Manager with respect to the Management Agreement from the Effective Date upon the terms of the New Manager undertaking to perform in all respects the Management Agreement and be bound by all the terms of the Management Agreement in place of the Existing Manager. |
D. | The Management Agreement, as Annexed hereto, has not been amended, varied, cancelled, novated or terminated and represents the entire agreement between the Existing Manager and the Owner. |
NOW THEREFORE, in consideration of the premises and the mutual covenants herein set out, it Is hereby agreed as follows
1. | Novation and Release |
1.1 | With effect from the Effective Date as defined in paragraph “C” above and by mutual agreement between the parties and in consideration of the mutual undertakings and releases herein contained, the New Manager shall substitute the Existing Manager under the Management Agreement and the New Manager shall as from the Effective Date assume all rights and obligations of the Existing Manager arising out of or in connection with the Management Agreement and agrees to be bound in all respects in place of the |
Existing Manager by the terms of the Management Agreement, which shall hereafter be construed and treated in all respects as if the New Manager had been originally named as a party to the Management Agreement.
1.2 | The Owner hereby agrees to continue to be bound by the Management Agreement in all respects vis-a-vis the New Manager from the Effective Date and further agrees to release the Existing Manager from any further liability under the Management Agreement that may arise or be incurred from events after the Effective Date. |
1.3 | Any issues or disputes arising between the Existing Manager and the New Manager in connection with the Management Agreement shall be resolved between themselves without involving or prejudicing the Owner. |
1.4 | Nothing in this Novation Agreement shall affect or prejudice any claim or demand whatsoever which either the Owner or the Existing Manager may have against the other relating to matters arising prior to the Effective Date. |
2. | Amendments to the Management Agreement |
From the Effective Date, the following amendments are agreed to the Management Agreement:
(a) | all references to the “Managers” in the Management Agreement shall be deemed to mean the New Manager and not the Existing Manager; and |
(b) | In Box 3 of Part I of the Management Agreement will be replaces as of the Effective Date with the following: |
3. | Managers | |
Name: V.SHIPS LIMITED, of Limassol Cyprus Registered Office: Zenas Gunther, 16-18, Agfa Trlada, 3035 Limassol, Cyprus Country of Incorporation: Cyprus |
||
Telephone Number: 4-357 25848400 Contact Name: Capt. Alex Halavins |
Fax Number: +357 255601700 Position: General Manager |
|
Email address: alex.halavins@vships.com |
3. | Law and Jurisdiction |
This Agreement is governed by and shall be construed in accordance with English law. Each party agrees with the others that, in the event of a dispute between them or any of them, such disputes shall be referred to arbitration in London, and the arbitration agreement between such parties shall be in the terms of clause 20 of the Management Agreement. In the event of a dispute Involving all the parties, it is agreed that there shall be a consolidated reference to arbitration, and that if separate references are commenced they shall upon request of any party be consolidated,
THIS AGREEMENT has been executed by the parties to this Agreement as a deed on the date specified at the beginning of this Agreement
Executed as a Deed | ) | ![]() |
By Capt Mauro Renaldi | ) | |
for and on behalf of | ) | |
V.Ships Greece Ltd, | ) | |
of Bermuda | ) | |
in the presence of: | ) |
Executed as a Deed | ) | ![]() |
By Mr. Stamatios Tsantanis | ) | |
for and on behalf of | ) | |
Leader Shipping Co. | ) | |
of the Marshall Islands | ) | |
in the presence of: | ) |
Executed as a Deed | ) | ![]() |
By Capt Alex Halavins | ) | |
for and on behalf of | ) | |
V.Ships Limited | ) | |
of Limassol Cyprus | ) | |
for and on behalf of | ) | |
the presence of: | ) |
ADDENDUM NO. 1 TO TECHNICAL MANAGEMENT AGREEMENT
This Addendum No. 1 (this “Addendum”) dated as of March 18th, 2016, by and among LEADER SHIPPING CO., a company incorporated in the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH96960 Marshall Islands in Marshall Islands, (the “Owner”), and V.SHIPS LIMITED, a company incorporated in Limassol Cyprus whose registered office is at Zenas Gunther, 16-18, Agia Triada, 3035 Limassol, Cyprus (the “Manager”), to the Technical Management Agreement dated as of February 11th, 2015, by and among the Company and V.Ships Greece Ltd., as novated by a novation agreement dated as of July 27th, 2015 entered into between the Owner, the Manager and V.Ships Greece Ltd. (the “Agreement”) for the provision of technical management services by the Manager to the Owner for the mv Leadership (the “Vessel”). Capitalized terms used herein without definition shall have the respective meanings ascribed thereto (or incorporated by reference) in the Agreement, which also contains rules of usage that apply to terms defined therein and herein.
RECITAL
WHEREAS, the Owner and the Manager desire to enter into this Addendum No. 1 for the purpose of including words and expressions in Clause 1.1 of the Agreement.
WHEREAS, the Owner and the Manager desire to enter into this Addendum No. 1 for the purpose of including a new Clause 3.12.
WHEREAS, the Owner and the Manager desire to enter into this Addendum No. 1 for the purpose of amending the existing Clause 8.11 of the Agreement.
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1. | Clause 1.1 of the Agreement |
The following words and expressions are hereby included in alphabetical order in Clause 1.1:
“lay-up” means the lay-up for a period of more than 3 months during which the Vessel is moored in a secured location and all her systems are shut down with minimum ongoing maintenance to prevent deterioration of the Vessel’s hull structure and machinery. During this period, a specialist lay-up crew may be employed and/or only watchmen may be appointed by a contracted ‘housekeeping’ company to be selected by the Owner.
“De-activation” means the period of time between the Vessel’s time of arrival at the Lay-up Site and until she is safely laid-up including but not limited to the preparations required for safely laying-up the Vessel as well as the notification of authorities governing the Vessel’s operations.
“Flag State” means the State whose flag the Vessel is flying.
“Lay-up Site” means the location in which the Vessel is laid up.
“Lay-up Period” means the period of time after De-activation and before Re-activation.
“Re-activation” means the period of time which is required for the Vessel to become fully operational in accordance with the applicable Class, Flag and international requirements; the Re-activation will commence upon the Owners’ initial notification to the Managers and will terminate when the Vessel is ready to sail from the Lay-up Site. The Re-activation will last for a period of not more than three (3) weeks.”
2. | Clause 3.12 of the Agreement |
A new Clause 3.12 is hereby added in the Agreement as follows:
“3.12 | Lay up of Vessel |
In the event that the Owners decide to lay-up the Vessel, the Managers shall:
A. | Provide in cooperation with the Owners the Vessel with instructions with regards to the procedures that shall be followed throughout the Lay-up Period for all phases of the project, lay-up, De-activation and Re-activation. |
B. | Use their best endeavors to perform the Management Services in accordance with sound layup industry practice, including but not limited to compliance with all relevant rules and regulations, and protection of the Vessel and surrounding environment in the case of emergency. The Managers shall have in place and maintain an emergency response plan. The Managers shall waive their right to claim any award for salvage performed on the Vessel and/or to protect the environment. The performance of the Management Services shall be conducted in a manner consistent with appropriate social responsibility |
C. | Notify the Owners in the event that, during the performance of the Management Services, the Managers become aware of any equipment or machinery that needs maintenance and/or repair. The Owners will decide whether the Vessel and/or her equipment or machinery is in need of maintenance and/or repair. However, if the maintenance and/ or repair are, in the Managers’ opinion, critical for the Vessel’s safety and/or the surrounding environment the Managers have the right to take all necessary and prudent steps to effect such maintenance and/or repairs without consulting the Owners, provided that they will advise the Owners of such need as soon as practicably possible. |
D. | Maintain records of work carried out in performance of the Management Services; |
E. | Provide periodic written reports to the Owners of the observed condition of the Vessel and its equipment and machinery in a form and frequency agreed between the parties; and |
F. | Arrange necessary class and flag surveys to obtain lay-up classification and registry notations and further ensure that, throughout the Lay-up Period, that the Vessel is in possession of valid certificates to comply with the port authority, Flag State and Vessel’s classification society requirements. |
G. | Do any such actions to preserve the Vessel and her machinery and equipment in order to prevent damage or deterioration and to assist with subsequent Re-activation. |
In the performance of their management responsibilities under this Agreement, the Managers shall be entitled to have regard to their overall responsibility in relation to all vessels as may from time to time be entrusted to their management. In particular, but without prejudice to the generality of the foregoing, the Managers shall be entitled to allocate available supplies, manpower and services in such manner as in the prevailing circumstances the Managers in their absolute discretion consider to be fair and reasonable.
In the event that the Owners decide to lay-up the Vessel, the Owners shall pay all sums to the Managers punctually in accordance with Clause 8.11 and the terms of this Agreement.”
3. | Amended and Restated Clause 8.11 of the Agreement |
Clause 8.11 of the Agreement is hereby amended and restated as follows:
“8.11 If the Owners decide to lay-up the Vessel and such lay-up lasts more than two (2) months, no management fee shall be paid to the Managers for the period exceeding the two (2) months until the Owners give written notice to Re-activate the Vessel. The Owners shall reimburse the Managers for any costs that arise while the Vessel is laid up following the two (2) months provided these costs have been approved by the Owners.”
IN WITNESS WHEREOF, the parties hereinabove have caused this Addendum No. 1 to the Agreement to be signed in duplicate by their respective and duly authorized representatives as of the date first written hereinabove.
LEADER SHIPPING CO. | V.SHIPS LIMITED | |||
By: | /s/ Stamatios Tsantanis | By: | /s/ Alex Halavins |
Name: | Stamatios Tsantanis | Name: | Capt. Alex Halavins | |
Title: | Director / President/ Treasurer | Title: | General Manager |
Exhibit 4.60
Private & confidential
Dated: 31 March, 2020
ALPHA BANK A.E.
(as Lender)
- and -
SQUIRE OCEAN NAVIGATION CO.
(as borrower)
-and-
LEADER SHIPPING CO.
(as collateral owner)
FOURTH SUPPLEMENTAL AGREEMENT in relation to a Loan Agreement originally dated 4th November, 2015 for a loan facility of (initially) up to US$33,750,173
|
TABLE OF CONTENTS
CLAUSE | HEADINGS | PAGE |
1. | Definitions | 2 |
2. | Borrower’s Acknowledgment of Indebtedness | 3 |
3. | Representations and warranties | 3 |
4. | Agreement of the Lender | 5 |
5. | Conditions | 5 |
6. | Variations to the Principal Agreement | 6 |
7. | Continuance of Principal Agreement and Security Documents | 11 |
8. | Entire agreement and amendment | 11 |
9. | Fees and expenses | 12 |
10. | Miscellaneous | 12 |
11. | Law and jurisdiction | 12 |
THIS AGREEMENT (hereinafter called “this Agreement”) is made this 31st day of March, 2020;
B E T W E E N
(1) | ALPHA Bank A.E., a banking société anonyme incorporated in and pursuant to the laws of the Hellenic Republic with its head office at 40 Stadiou Street, Athens GR 102 52, Greece, acting, except as otherwise herein provided through its office at 93 Akti Miaouli, Piraeus, Greece (hereinafter called the “Lender”, which expression shall include its successors and assigns); |
(2) | SQUIRE OCEAN NAVIGATION CO., a company duly incorporated and validly existing under the laws of the Republic of Liberia having its registered office at 80 Broad Street, Monrovia, Republic of Liberia (hereinafter called the “Borrower”, which expression shall include its successors); and |
(3) | LEADER SHIPPING CO., a company duly incorporated and validly existing under the laws of the Republic of the Marshall Islands having its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960 (hereinafter called the “Collateral Owner”, which expression shall include its successors); |
IS SUPPLEMENTAL to a loan agreement dated 4th November, 2015, as amended and/or supplemented by (1) a first supplemental agreement dated 28th July 2016 (the “First Supplemental Agreement”), (2) a second supplemental agreement dated 29th June 2018 (the “Second Supplemental Agreement”) and (3) a third supplemental agreement dated 1st day of July, 2019 (the “Third Supplemental Agreement”) made between (i) the Lender, as lender, (ii) the Borrower, as borrower and (iii) the Collateral Owner, as collateral owner (the said loan agreement as amended and/or supplemented by the First Supplemental Agreement, the Second Supplemental Agreement and the Third Supplemental Agreement is hereinafter called the “Principal Agreement”), on the terms and conditions of which the Lender agreed to advance and has advanced to the Borrower, a loan (the “Loan”) of up to United States Dollars Thirty three million seven hundred fifty thousand one hundred seventy three ($33,750,173), for the purpose therein specified (the Principal Agreement as hereby amended and/or supplemented and as the same may hereinafter be amended and/or supplemented called the “Loan Agreement”).
W H E R E A S :
(A) | the Borrower and the Collateral Owner hereby acknowledge and confirm that (a) the Lender has advanced to the Borrower, the full amount of the Loan in the principal amount of United States Dollars Thirty three million seven hundred fifty thousand one hundred seventy three ($33,750,173) and (b) as of the Effective Date the principal amount of United States Dollars Twenty Six Million Eighty One Thousand Three Hundred Twenty Six and Twenty Five cents ($26,081,326.25 ) in respect of the Loan remains outstanding; |
(B) | pursuant to a Guarantee dated 4th November 2015 as amended and/or supplemented by a first deed of amendment of guarantee dated 28th July, 2016 (the “First Amendment”), a second deed of amendment of guarantee dated 29th June 2018 (the “Second Amendment”) and a third deed of amendment of guarantee dated 1st day of July, 2019 (the “Third Amendment”) (the said Guarantee as amended and/or supplemented by the First Amendment, the Second Amendment and the Third Amendment is hereinafter called the “Guarantee”), Seanergy Maritime Holdings Corp., of the Republic of the Marshall Islands (the “Guarantor”) irrevocably and unconditionally guaranteed the due and timely repayment of the Loan, and the interest and default interest accrued thereon and the performance of all the obligations of the Borrower under the Loan Agreement and the Security Documents executed in accordance thereto; |
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(C) | the Borrower and the other Security Parties have requested the Lender to grant its consent to (inter alia): |
(a) | the amendment of the Security Requirement provisions in the Principal Agreement; |
(b) | the amendment of the minimum liquidity covenant set out in Clause 8.1(j) (Liquidity) of the Principal Agreement; |
(c) | the amendment of the repayment schedule set out in Clause 4.1 (Repayment) of the Principal Agreement; |
(d) | the amendment of the control and ultimate beneficial ownership requirements provided in Clause 6.1 (m) (Shareholdings) and Clause 8.2 (s) (Control) of the Principal Agreement; |
(e) | the amendment of the dividends covenants provided in Clause 8.2 (n) (Dividends) of the Principal Agreement; |
(f) | the amendment of the financial covenants requirements provided in Clause 8.6 (Additional Financial Covenants – Compliance Certificate) of the Principal Agreement, |
and the Lender has agreed thereto conditionally upon terms that the Principal Agreement shall be amended in the manner hereinafter set out in Clause 6 of this Agreement.
NOW THEREFORE IT IS HEREBY AGREED AS FOLLOWS:
1. | DEFINITIONS |
1.1 | Defined terms and expressions |
Words and expressions defined in the Principal Agreement and not otherwise defined herein (including the Recitals hereto) shall have the same meanings when used in this Agreement.
1.2 | Additional definitions |
In addition, in this Agreement the words and expressions specified below shall have the meanings attributed to them below:
“Effective Date” means the date whereby:
i. | All the conditions contained in Clause 5 of this Agreement have been satisfied, and |
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ii. | The Instalment Due has been paid on the due date for such payment, i.e. on the 1st day of April 2020 and proof of such payment is available to the Lender. |
“Guarantee Deed of Amendment No. 4” means the deed of amendment of the Guarantee to be executed by the Guarantor in favour of the Lender in form and substance satisfactory to the Lender.
“Mortgage Amendment No. 1” means the amendment of the Mortgage to be executed by the Borrower in favour of the Lender over the Vessel.
1.3 | Construction |
In this Agreement
(a) | Where the context so admits words importing the singular number only shall include the plural and vice versa and words importing persons shall include firms and corporations; |
(b) | clause headings are inserted for convenience of reference only and shall be ignored in construing this Agreement; |
(c) | references to Clauses are to clauses of this Agreement save as may be otherwise expressly provided in this Agreement; and |
(d) | all capitalised terms used herein and not otherwise defined herein shall have the meanings ascribed to them in the Loan Agreement. |
2. | BORROWER’S ACKNOWLEDGMENT OF INDEBTEDNESS |
The Borrower hereby declares and acknowledges that as at the date hereof the outstanding principal amount of the Loan is United States Dollars Twenty Six Million Eighty One Thousand Three Hundred Twenty Six and Twenty Five cents ($26,081,326.25), which shall be repaid in accordance with Clause 4.1 (Repayment) of the Loan Agreement, and which amount is due to be reduced according to the scheduled payment of the Instalment Due (as defined hereinbelow) on its due date as per the terms hereof.
3. | REPRESENTATIONS AND WARRANTIES |
3.1 | Representations and warranties under the Principal Agreement |
The Borrower and the Collateral Owner hereby represent and warrant to the Lender as at the date hereof that the representations and warranties set forth in the Principal Agreement and the Security Documents (updated mutatis mutandis to the date of this Agreement) are (and will be on the Effective Date) true and correct as if all references therein to “this Agreement” were references to the Principal Agreement as amended and supplemented by this Agreement.
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3.2 | Additional representations and warranties |
In addition to the above, the Borrower and the Collateral Owner hereby represent and warrant to the Lender as at the date of this Agreement that:
a. | each of the Security Parties is duly formed, is validly existing and in good standing under the laws of the place of its incorporation and has full power to carry on its business as it is now being conducted and to enter into and perform its obligations under the Principal Agreement and this Agreement and has complied with all statutory and other requirements relative to its business and does not have an established place of business in any part of the United Kingdom or the USA; |
b. | all necessary licences, consents and authorities, governmental or otherwise under this Agreement and the Principal Agreement have been obtained and, as of the date of this Agreement, no further consents or authorities are necessary for any of the Security Parties to enter into this Agreement or otherwise perform its obligations hereunder; |
c. | this Agreement constitutes the legal, valid and binding obligations of the Security Parties thereto enforceable in accordance with its terms; |
d. | the execution and delivery of, and the performance of the provisions of this Agreement do not, and will not contravene any applicable law or regulation existing at the date hereof or any contractual restriction binding on any of the Security Parties or its respective constitutional documents; |
e. | no action, suit or proceeding is pending or threatened against the Borrower and the Collateral Owner or its assets before any court, board of arbitration or administrative agency which could or might result in any material adverse change in the business or condition (financial or otherwise) of any of the Borrower or the other Security Parties; |
f. | none of the Security Parties is not and at the Effective Date will not be in default under any agreement by which it is or will be at the Effective Date bound or in respect of any financial commitment, or obligation; |
g. | No US Tax Obligor: None of the Security Parties is a US Tax Obligor; and |
h. | Sanctions: |
(i) | None of the Security Parties is a Prohibited Person nor is controlled by, or acting directly or indirectly on behalf of or for the benefit of, a Prohibited Person and none of the Borrower, the Collateral Owner or the Guarantor controls a Prohibited Person; and |
(ii) | To the best of the Security Parties’ knowledge, no proceeds of the Loan have been made available, directly or indirectly, to or for the benefit of a Prohibited Person or |
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(iii) | no proceeds of the Loan otherwise shall be, directly or indirectly, applied in a manner or for a purpose prohibited by Applicable Sanctions. |
3.3 | Survival |
The representations and warranties of the Borrower and the Collateral Owner in this Agreement shall survive the execution of this Agreement and shall be deemed to be repeated at the commencement of each Interest Period.
4. | AGREEMENT OF THE LENDER |
The Lender, relying upon each of the representations and warranties set out in Clause 3 hereby agrees with the Borrower and the Collateral Owner, subject to and upon the terms and conditions of this Agreement and in particular, but without limitation, subject to the fulfilment of the conditions precedent set out in Clause 5 that the Principal Agreement be amended in the manner more particularly set out in Clause 6.
5. | CONDITIONS |
5.1 | Conditions precedent |
The agreement of the Lender contained in Clause 4 shall be expressly subject to the condition that the Lender shall have received on or before the Effective Date in form and substance satisfactory to the Lender and its legal advisers:
a. | a certificate of good standing or other equivalent document issued by the competent authorities of the place of its incorporation in respect of each of the Borrower, the Collateral Owner and the Guarantor; |
b. | resolutions duly passed by the Board of Directors of the Borrower, the Collateral Owner and the Guarantor and resolutions passed at a meeting of the shareholders of the Borrower and the Guarantor (and of any corporate shareholder thereof), if applicable, evidencing approval of this Agreement, the Mortgage Amendment No. 1 and/or the Guarantee Deed of Amendment No. 4 (as the case may be) and authorising appropriate officers or attorneys–in-fact to execute the same and to sign all notices required to be given under this Agreement on its behalf or other evidence of such approvals and authorisations as shall be acceptable to the Lender; |
c. | all documents evidencing any other necessary action or approvals or consents with respect to this Agreement, including, but not limited to, Certificates of Incumbency issued by any of the Directors of the Borrower and the Guarantor evidencing approval of this Agreement, the Mortgage Amendment No. 1 and/or the Guarantee Deed of Amendment No. 4 (as the case may be) and authorising appropriate officers or attorneys-in-fact to execute the same and to sign all notices required to be given under this Agreement on its behalf or other evidence of such approvals and authorisations as shall be acceptable to the Lender; |
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d. | the original of any power(s) of attorney issued in favour of any person executing this Agreement, the Mortgage Amendment No. 1 and/or the Guarantee Deed of Amendment No. 4 on behalf of the Borrower, the Collateral Owner, and the Guarantor; |
e. | a Certificate of Incumbency issued by any of the Directors of the Collateral Owner evidencing (inter alia) that the resolutions of the Board of Directors of the Collateral Owner and of the sole shareholder of the Collateral Owner, both dated 28 June 2018 have not been amended, modified, revoked and are in full force and effect; |
f. | all documents evidencing any other necessary action or approvals or consents with respect to this Agreement; |
g. | duly executed originals of the Mortgage Amendment No. 1 and the Guarantee Deed of Amendment No. 4 and, where appropriate, duly registered in favour of the Lender; |
h. | evidence satisfactory to the Lender that the Borrower has paid or shall pay the next repayment instalment under the Principal Agreement falling due on the 1st April 2020 in the amount of Dollars Five Hundred Thousand ($500,000) (the “Instalment Due”) on such due date for such payment.; and |
i. | such favourable legal opinions from lawyers acceptable to the Lender and its legal advisors as the Lender shall require. |
6. | VARIATIONS TO THE PRINCIPAL AGREEMENT |
6.1 | Amendments |
In consideration of the agreement of the Lender contained in Clause 4, the Borrower hereby agrees with the Lender that (subject to the satisfaction of the conditions precedent contained in Clause 5, the provisions of the Principal Agreement shall be varied and/or amended and/or supplemented as follows, with effect from the Effective Date:
a. | the following new definition shall be added in alphabetical order to Clause 1.2 (Definitions) of the Principal Agreement reading as follows: |
“Fourth Supplemental Agreement” means the Fourth Supplemental Agreement dated 31 March, 2020 supplemental to this Agreement to be executed and made between (inter alios) the Borrower and the Lender whereby this Agreement shall be amended as there in provided;
“Instalment Due” means, a repayment instalment in the amount of United States Dollars Five Hundred Thousand ($500,000) which is due and payable on 1st April 2020;
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b. | the following definitions of Clause 1.2 (Definitions) of the Principal Agreement shall be amended so as to read as follows: |
“Balloon Instalment” means, the part of the Loan amounting to United States Dollars Fourteen million nine hundred seventy four thousand nine hundred fifty eight (US$14,974,958);
“Final Maturity Date” means, the 31st date of December 2022;
“Security Requirement” means, until the end of the Security Period, the amount in United States Dollars (as certified by the Lender whose certificate shall, in the absence of manifest error, be conclusively binding on the Borrower) which is at any relevant time (1) in excess of one hundred percent (100%) of the Loan commencing from the 1st January 2020 until and including the 31st of December 2020, (2) in excess of one hundred and ten percent (110%) of the Loan commencing from the 1st January, 2021 until and including the 31st of December 2021, and (3) in excess of one hundred and fifteen percent (115%) of the Loan commencing from the 1st January, 2022 until and including the 31st of December 2022; For the avoidance of doubt, no Security Requirement is applicable until 31st March 2020; For the avoidance of doubt, it is hereby re-iterated that the Security Value shall (inter alia) include the Excess Value of the Collateral Vessel;”
c. | with effect as from the Effective Date, Clause 4.1 (Repayment) of the Principal Agreement shall be deleted in its entirety and replaced to read as follows: |
“Repayment. The Borrower shall and it is expressly undertaken by the Borrower to repay the outstanding principal amount of the Loan (resulting after payment of the Instalment Due) amounting as of the date of the Fourth Supplemental Agreement to Dollars Twenty Five Million Five Hundred Eighty One Thousand Three Hundred Twenty Six and Twenty Five cents ($25,581,326.25), by: (a) eleven (11) consecutive quarterly Repayment Instalments, the first of which falls due for payment on 30th June 2020 and each of the subsequent ones consecutively falling due for payment on each of the dates falling three (3) months after the immediately preceding Repayment Date with the last (the 11th) of such Repayment Instalments falling due for payment on the Final Maturity Date and (b) an additional bullet repayment of principal in the amount of Dollars Five Hundred Thousand ($500,000) to be made latest on the 1st day of October 2020 and (c) the Balloon Instalment payable together with the last (the 11th) Repayment Instalment on the Final Maturity Date; subject to the provisions of this Agreement, the amount of each of such Repayment Instalments shall be Dollars Nine hundred eighteen thousand seven hundred sixty and seventy five cents ($918,760.75),
provided, that (a) if the last Repayment Date would otherwise fall after the Final Maturity Date, the last Repayment Date shall be the Final Maturity Date, (b) on the Final Maturity Date the Borrower shall also pay to the Lender any and all other moneys then due and payable under this Agreement and the other Security Documents and (c) if any of the Repayment Instalments shall become due on a day which is not a Banking Day, the due date therefor shall be extended to the next succeeding Banking Day unless such Banking Day falls in the next calendar month in which event such due date shall be the immediately preceding Banking Day.”
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d. | Clause 6.1 (m) (Shareholdings) of the Principal Agreement shall be deleted in its entirety and replaced to read as follows: |
“Shareholdings
Throughout the Security Period:
i. | the person(s) disclosed to the Lender at the negotiation of this Agreement (A) do/does maintain and shall maintain at all times control of the Guarantor and (B) do/does and shall hold beneficially whether directly or indirectly the voting rights attaching to at least 25% of the shares issued and outstanding in the share capital of the Guarantor (including all shares issuable upon exercise of the conversion option under the Notes), but in all cases and for the avoidance of doubt no person(s) other than the said person(s) disclosed to the Lender at the negotiation of this Agreement shall gain control over the Guarantor without the prior written consent of the Lender to be given at the Lender’s sole discretion; and |
ii. | no change has been made directly or indirectly in the ownership, beneficial ownership, control or management of the Borrower or any share therein or of the Vessel (especially concerning class or flag); |
iii. | the Borrower is and will continue to be until the Final Maturity Date a 100 % directly owned subsidiary of the Guarantor; |
For the purposes of this Clause 6.1 (m) (Shareholdings), “control” shall mean:
A. | the power (whether by way of ownership of shares, partnership units, proxy, contract, agency or otherwise) to: |
i. | cast, or control the casting of, more than 50% of the maximum number of votes that might be cast at a general meeting of the Guarantor; or |
ii. | appoint or remove all, or the majority, of the directors or other equivalent officers of the Guarantor; and/or |
B. | the holding beneficially of more than 50% of the issued shares of the Guarantor (excluding any part of that issued shares that carries no right to participate beyond a specified amount in a distribution of either profits or capital).” |
e. | Clause 8.1 (j) (Liquidity) of the Principal Agreement shall be deleted in its entirety and replaced to read as follows: |
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“Liquidity: ensure that as from 1st January, 2020 and throughout the remainder of the Security Period the Borrower shall maintain a 30 days moving average balance of $500,000 (to be calculated on a quarterly basis every end of March, June, September and December of each Financial Year) for the Vessel. For the avoidance of any doubt the Liquidity under this Clause should always be included in the Liquidity of the Guarantor under Clause 8.6(a) (Liquidity) of this Agreement and under Clause 5.3(a) (Liquidity) of the Guarantee.”;
f. | Clause 8.2 (n) (Dividends) of the Principal Agreement shall be deleted in its entirety and replaced to read as follows: |
“Dividends: declare or pay any dividends or distribute any of its present or future assets, undertakings, rights or revenues to any of its shareholders save as hereinafter provided:
i. | the Borrower may declare or pay such dividends subject to no Event of Default having occurred and being continuing; and |
ii. | the Guarantor may declare or pay such dividends subject to no Event of Default having occurred and being continuing.” |
g. | Clause 8.2 (s) (Control) of the Principal Agreement shall be deleted and replaced to read as follows: |
“Control: throughout the Security Period permit:
i. | the person(s) disclosed to the Lender at the negotiation of this Agreement (A) not to maintain at all times control of the Guarantor and (B) not to hold beneficially whether directly or indirectly the voting rights attaching to at least 25% of the shares issued and outstanding in the share capital of the Guarantor (including all shares issuable upon exercise of the conversion option under the Notes). In all cases and for the avoidance of doubt no person(s) other than the said person(s) disclosed to the Lender at the negotiation of this Agreement shall gain control over the Guarantor without the prior written consent of the Lender to be given at the Lender’s sole discretion; and |
ii. | any change to be made directly or indirectly in the ownership, beneficial ownership, control or management of the Borrower or any share therein or of the Vessel (especially concerning class or flag); |
iii. | any change to be made resulting in the Borrower not being a 100 % directly owned subsidiary of the Guarantor; |
For the purposes of this Clause 8.2 (s) (Control), “control” shall mean:
A. | the power (whether by way of ownership of shares, partnership units, proxy, contract, agency or otherwise) to: |
i. | cast, or control the casting of, more than 50% of the maximum number of votes that might be cast at a general meeting of the Guarantor; or |
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ii. | appoint or remove all, or the majority, of the directors or other equivalent officers of the Guarantor; and/or |
B. | the holding beneficially of more than 50% of the issued shares of the Guarantor (excluding any part of that issued shares that carries no right to participate beyond a specified amount in a distribution of either profits or capital).” |
h. | Clause 8.6 (Additional Financial Covenants – Compliance Certificate) of the Principal Agreement shall be deleted in its entirety and replaced to read as follows: |
“Guarantor’s Financial Covenants - Compliance Certificate. The Borrower will ensure that, based on the relevant Accounting Information for that Financial Year or the relevant period, the Guarantor shall comply with the financial covenants set out below:
Liquidity: the Guarantor shall procure and ensure that it is maintained throughout the Security Period, Corporate Liquidity (including any contractually committed but undrawn parts of the Notes) in an amount equal to $500,000 per Fleet Vessel. The compliance of the Guarantor with this undertaking shall be determined by the Lender in respect of each Financial Semester Day on the basis of the semi-annual unaudited financial statements of the Guarantor and in respect of each other quarter of each Financial Year on the basis of a letter of the Guarantor confirming the aforesaid liquidity.
Calculations: For the purposes of this Clause 8.6: (a) no item shall be deducted or credited more than once in any calculation; and (b) any amount expressed in a currency other than Dollars shall be converted into Dollars in accordance with the Applicable Accounting Principles.
“Corporate Liquidity” means the aggregate of (a) any amount standing to the credit of the Earnings Account and (b) all cash deposits legally and beneficially owned by the Guarantor and any member of the Group which are free from any security other than,
(i) in respect of any deposit held with the Lender, security created to secure the obligations of the Borrower under the Loan Agreement;
(ii) in respect of deposits held with other lenders of the Group, security created to secure the obligations of the respective borrower(s) under the respective loan agreement(s); and
(iii) in respect of deposits held with other lenders of the Group as drydocking reserve cash under the respective loan agreement(s).
FOR THE AVOIDANCE OF DOUBT Corporate Liquidity to include minimum liquidity requirements by the Lender and other lenders of the Group.”
i. | Schedule 3 of the Principal Agreement shall be deleted in its entirety. |
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6.2 | Security Documents |
With effect as from the Effective Date the definition “Security Documents” shall be deemed to include the Security Documents as amended and/or supplemented in pursuance to the terms hereof and any document or documents (including if the context requires the Loan Agreement) that may now or hereafter be executed as security for the repayment of the Loan, interest thereon and any other moneys payable by the Borrower under the Principal Agreement and the Security Documents (as herein defined) as well as for the performance by the Borrower and the other Security Parties as defined in the Loan Agreement of all obligations, covenants and agreements pursuant to the Principal Agreement, this Agreement and/or the Security Documents.
6.3 | Construction |
All references in the Principal Agreement to “this Agreement”, “hereunder” and the like and all references in the Security Documents to the “Loan Agreement” shall be construed as references to the Principal Agreement as amended and/or supplemented by this Agreement.
7. | CONTINUANCE OF PRINCIPAL AGREEMENT AND SECURITY DOCUMENTS |
Save for the alterations to the Principal Agreement, and the Security Documents made or to be made pursuant to this Agreement, and such further modifications (if any) thereto as may be necessary to make the same consistent with the terms of this Agreement, the Principal Agreement shall remain in full force and effect and the security constituted by the Security Documents executed by the Borrower and the other Security Parties shall continue to remain valid and enforceable and the Borrower, the Collateral Owner and the Guarantor hereby jointly and severally reconfirm their respective obligations under the Principal Agreement as hereby amended and under the Security Documents to which each of them is a party.
8. | ENTIRE AGREEMENT AND AMENDMENT |
8.1 | Entire Agreement |
The Principal Agreement, the other Security Documents, and this Agreement represent the entire agreement among the parties hereto with respect to the subject matter hereof and supersede any prior expressions of intent or understanding with respect to this transaction and may be amended only by an instrument in writing executed by the parties to be bound or burdened thereby.
8.2 | Supplemental – Effect on Principal Agreement |
This Agreement is supplementary to and incorporated in the Principal Agreement, all terms and conditions whereof, including, but not limited to, provisions on payments, calculation of interest and Events of Default, shall apply to the performance and interpretation of this Agreement.
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9. | FEES AND EXPENSES |
9.1 | Indemnity |
The Borrower agrees to pay to the Lender upon demand on a full indemnity basis and from time to time all costs, charges and expenses (including legal fees) incurred by the Lender in connection with the negotiation, preparation, execution and enforcement or attempted enforcement of this Agreement and any document executed pursuant thereto and/or in preserving or protecting or attempting to preserve or protect the security created hereunder and/or under the Security Documents.
9.2 | Amendment fee |
The agreement of the Lender to the amendment of the Principal Agreement as herein provided shall be expressly subject to the condition that the Borrower shall pay to the Lender a non-refundable amendment fee of an amount of Dollars Seventy Five thousand ($75,000) payable as follows:
i. | Dollars Thirty Seven thousand five hundred ($37,500) on the date of signing of this Agreement; and |
ii. | Dollars Thirty Seven thousand five hundred ($37,500) on the 1st day of July 2020. |
9.3 | Stamp duty etc. |
The Borrower covenants and agrees to pay and discharge all stamp duties, registration and recording fees and charges and any other charges whatsoever and wheresoever payable or due in respect of this Agreement and/or any document executed pursuant hereto.
10. | MISCELLANEOUS |
The provisions of Clause 14 (Assignment, Transfer, Participation, Lending Office) and Clause 16.1 (Notices) of the Principal Agreement shall apply to this Agreement as if the same were set out herein in full.
12. LAW AND JURISDICTION
12.1 | Governing Law |
This Agreement and any non-contractual obligations arising out or in connection with it shall be governed by and construed in accordance with English law and the provisions of Clause 17 (Law and Jurisdiction) of the Principal Agreement shall apply mutatis mutandis to this Agreement as if the same were set out herein in full.
12.2 | Third Party Rights |
No term of this Agreement is enforceable under the Contracts (Rights of Third Parties) Act 1999 by a person who is not a party to this Agreement.
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EXECUTION PAGE
the borrower
SIGNED by | ) | |
Mr Stavros Gyftakis | ) | |
for and on behalf of | ) | |
SQUIRE OCEAN NAVIGATION CO. | ) | /s/ Stavros Gyftakis |
of Liberia, in the presence of: | ) | Attorney-in-fact |
Witness: | /s/ Dimitrios Sioufas | ||
Name: | Dimitrios Sioufas | ||
Address: | 13 Defteras Merarchias Str., | ||
Piraeus, Greece | |||
Occupation: | Attorney-at-law |
the COLLATERAL OWNER
SIGNED by | ) | |
Mr Stavros Gyftakis | ) | |
for and on behalf of | ) | |
LEADER SHIPPING CO. | ) | /s/ Stavros Gyftakis |
of Marshall Islands, in the presence of: | ) | Attorney-in-fact |
Witness: | /s/ Dimitrios Sioufas | ||
Name: | Dimitrios Sioufas | ||
Address: | 13 Defteras Merarchias Str., | ||
Piraeus, Greece | |||
Occupation: | Attorney-at-law |
THE LENDER
SIGNED by | ) | |
Mr. Konstantinos Sotiriou | ) | /s/ Konstantinos Sotiriou |
and Mr. Konstantinos Flokos | ) | Attorney-in-fact |
for and on behalf of | ) | |
ALPHA BANK A.E. | ) | /s/ Konstantinos Flokos |
in the presence of: | ) | Attorney-in-fact |
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Subsidiary
|
Jurisdiction of Incorporation
|
Seanergy Management Corp.
|
Marshall Islands
|
Seanergy Shipmanagement Corp.
|
Marshall Islands
|
Sea Glorius Shipping Co.
|
Marshall Islands
|
Sea Genius Shipping Co.
|
Marshall Islands
|
Leader Shipping Co.
|
Marshall Islands
|
Premier Marine Co.
|
Marshall Islands
|
Gladiator Shipping Co.
|
Marshall Islands
|
Emperor Holding Ltd.
|
Marshall Islands
|
Fellow Shipping Co.
|
Marshall Islands
|
Champion Marine Co.
|
Marshall Islands
|
Traders Shipping Co.
|
Marshall Islands
|
Patriot Shipping Co.
|
Marshall Islands
|
Squire Ocean Navigation Co.
|
Liberia
|
Lord Ocean Navigation Co.
|
Liberia
|
Knight Ocean Navigation Co.
|
Liberia
|
Good Ocean Navigation Co.
|
Liberia
|
Flag Ocean Navigation Co.
|
Liberia
|
Hellas Ocean Navigation Co.
|
Liberia
|
Martinique International Corp.
|
British Virgin Islands
|
Harbour Business International Corp.
|
British Virgin Islands
|
Maritime Glory Shipping Limited
|
British Virgin Islands
|
Maritime Grace Shipping Limited
|
British Virgin Islands
|
Pembroke Chartering Services Limited
|
Malta
|
Partner Shipping Co. Limited
|
Malta
|
Maritime Capital Shipping Limited
|
Bermuda
|
Maritime Capital Shipping (HK) Limited
|
Hong Kong
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of
operations of the Company.
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of
operations of the Company.
|
(1) |
Registration Statement (Form F-3 No. 333-166697) of Seanergy Maritime Holdings Corp.,
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(2) |
Registration Statement (Form F-3 No. 333-169813) of Seanergy Maritime Holdings Corp.,
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(3) |
Registration Statement (Form F-3 No. 333-214967) of Seanergy Maritime Holdings Corp.,
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(4) |
Registration Statement (Form F-3 No. 333-226796) of Seanergy Maritime Holdings Corp.;
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(5) |
Registration Statement (Form F-3 No. 333-221058) of Seanergy Maritime Holdings Corp.,
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(6) |
Registration Statement (Form F-3 No. 333-237500) of Seanergy Maritime Holdings Corp., and
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(7) |
Registration Statement (Form F-3 No. 333-238136) of Seanergy Maritime Holdings Corp.
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