Performance Shipping Inc. Annual Report 2024

FY2024 Annual Report · Performance Shipping Inc.
Loading PDF…
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 20-F
(Mark One)
☐   REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
 
OR
 
☒   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2024
 
OR
 
☐   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
OR
 
☐   SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
Date of event requiring this shell company report _________________
 
For the transition period from _________________ to _________________
Commission file number 001-35025
PERFORMANCE SHIPPING INC.
(Exact name of Registrant as specified in its charter)
Not applicable
(Translation of Registrant’s name into English)
Republic of the Marshall Islands
(Jurisdiction of incorporation or organization)
373 Syngrou Avenue, 175 64 Palaio Faliro, Athens, Greece
(Address of principal executive offices)
Mr. Andreas Michalopoulos, 373 Syngrou Avenue, 175 64 Palaio Faliro, Athens, GR
Tel: + 30-216-600-2400, Fax: + 30-216-600-2599, E-mail: amichalopoulos@pshipping.com
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
Securities registered or to be registered pursuant to Section 12(b) of the Act.
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common shares, $0.01 par value, including the Preferred stock
purchase rights
“PSHG”
The Nasdaq Stock Market LLC
Securities registered or to be registered pursuant to Section 12(g) of the Act.
None
(Title of Class)
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.
None
(Title of Class)
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.
As of December 31, 2024, there were 12,432,158 of the registrant’s common shares, par value $0.01, outstanding, 50,726 shares of the registrant’s Series B Convertible Cumulative
Perpetual Preferred Stock outstanding and 1,423,912 shares of the registrant’s Series C Convertible Cumulative Redeemable Perpetual Preferred Stock outstanding.
Indicate by check mark if the registrant is a well‑known seasoned issuer, as defined in Rule 405 of the Securities Act.
☐ Yes ☒ No
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
☐ Yes ☒ No
Note-Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under
those Sections.
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
☒ Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
☒ Yes ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See the definitions of “large
accelerated filer,” “accelerated filer” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:
Large accelerated filer ☐
Accelerated filer ☐
Non-accelerated filer ☒
Emerging growth company ☐
 
 
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended
transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☐
† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April
5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting
under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an
error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s
executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
U.S. GAAP ☒
International Financial Reporting Standards as issued by the
International Accounting Standards Board ☐
Other  ☐
If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.    
☐ Item 17  ☐ Item 18
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
☐ Yes ☒ No
(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court. N/A
☐ Yes ☐ No

TABLE OF CONTENTS
PART I
 
5
Item 1.
Identity of Directors, Senior Management, and Advisers
5
Item 2.
Offer Statistics and Expected Timetable
5
Item 3.
Key Information
5
Item 4.
Information on the Company
48
Item 4A.
Unresolved Staff Comments
72
Item 5.
Operating and Financial Review and Prospects
73
Item 6.
Directors, Senior Management, and Employees
90
Item 7.
Major Shareholders and Related Party Transactions
95
Item 8.
Financial information
97
Item 9.
The Offer and Listing
98
Item 10.
Additional Information
99
Item 11.
Quantitative and Qualitative Disclosures about Market Risk
109
Item 12.
Description of Securities Other than Equity Securities
110
PART IΙ
 
111
Item 13.
Defaults, Dividend Arrearages and Delinquencies
111
Item 14.
Material Modifications to the Rights of Security Holders and Use of Proceeds
111
Item 15.
Controls and Procedures
111
Item 16.
[Reserved]
112
Item 16A.
Audit Committee Financial Expert
112
Item 16B.
Code of Ethics
112
Item 16C.
Principal Accountant Fees and Services
112
Item 16D.
Exemptions from the Listing Standards for Audit Committees
113
Item 16E.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
113
Item 16F.
Change in Registrant’s Certifying Accountant
113
Item 16G.
Corporate Governance
113
Item 16H.
Mine Safety Disclosure
114
Item 16I.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
114
Item 16J.
Insider Trading Policies
114
Item 16K.
Cybersecurity
114
PART III
 
116
Item 17.
Financial Statements
116
Item 18.
Financial Statements
116
Item 19.
Exhibits
116
2

FORWARD-LOOKING STATEMENTS
Matters discussed in this annual report on Form 20-F and the documents incorporated by reference may constitute forward-looking statements. The Private Securities Litigation
Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-
looking statements include, but are not limited to, statements concerning plans, objectives, goals, strategies, future events or performance, underlying assumptions, and other
statements, which are other than statements of historical facts.
Performance Shipping Inc., or the Company, desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this
cautionary statement in connection with this safe harbor legislation. This annual report and any other written or oral statements made by the Company or on its behalf may include
forward-looking statements, which reflect its current views with respect to future events and financial performance, and are not intended to give any assurance as to future results.
When used in this document, the words “believe,” “anticipate,” “intend,” “estimate,” “forecast,” “project,” “plan,” “potential,” “will,” “may,” “should,” “expect,” “targets,” “likely,”
“would,” “could,” “seeks,” “continue,” “possible,” “might,” “pending,” and similar expressions, terms, or phrases may identify forward-looking statements, but the absence of these
words does not mean that a statement is not forward-looking.
The forward-looking statements in this annual report are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without
limitation, our management’s examination of historical operating trends, data contained in its records, and other data available from third parties. Although the Company believes that
these assumptions were reasonable when made, because these assumptions are inherently subject to significant risks, uncertainties and contingencies which are difficult or impossible
to predict and are beyond its control, the Company cannot assure you that it will achieve or accomplish these expectations, beliefs, or projections.
Such statements reflect the Company’s current views with respect to future events and are subject to certain risks, uncertainties, and assumptions. Should one or more of these
risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated,
expected, or intended. The Company is making investors aware that such forward-looking statements, because they relate to future events, are by their very nature subject to many
important factors that could cause actual results to differ materially from those contemplated.
3

In addition to these important factors and matters discussed elsewhere herein, including under the heading “Item 3. Key Information—D. Risk Factors,” and in the documents
incorporated by reference herein, important factors that, in its view, could cause actual results to differ materially from those discussed in the forward-looking statements include, but are
not limited to: the strength of world economies; fluctuations in currencies and interest rates; inflation general market conditions, including fluctuations in charter rates and vessel values;
changes in demand in the tanker shipping industry; changes in the supply of vessels; changes in worldwide or regional oil production, demand, consumption, and storage; changes in
our operating expenses, including bunker prices, crew costs, drydocking, and insurance costs; our future operating or financial results; availability of financing and refinancing; 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; our ability to take delivery of, integrate into our fleet, and employ any newbuilding vessels we may acquire or order in the future and the ability of shipyards to
deliver vessels on a timely basis; our ability to obtain financing and comply with the restrictions and other covenants in our financing arrangements; our ability to continue as a going
concern; our ability to pay dividends to holders of our preferred shares and common shares; our ability to comply with additional costs, expenses and risks related to our environmental,
social and governance policies; potential liability from pending or future litigation and potential costs due to environmental damage and vessel collisions; changes in the market for our
vessels; availability of skilled workers and the related labor costs; compliance with governmental, tax, environmental, and safety regulations; any non-compliance with the U.S. Foreign
Corrupt Practices Act of 1977, or FCPA, or other applicable regulations relating to bribery; the impact of the Secured Overnight Financing Rate, or SOFR, on interest rates of our debt;
general economic conditions and conditions in the oil industry; effects of new products and new technology in our industry; the failure of counterparties to fully perform their contracts
with us; our dependence on key personnel; adequacy of insurance coverage; our ability to obtain indemnities from customers; changes in laws, treaties, or regulations; volatility of the
price of our common shares; our incorporation under the laws of the Republic of the Marshall Islands and the different rights to relief that may be available compared to other countries,
such as the United States; changes in governmental rules and regulations or actions taken by regulatory authorities and the expected costs thereof; general domestic and international
political conditions or events, including “trade wars,” acts by terrorists, acts of piracy on ocean-going vessels, or other hostilities, including the war between Russia and Ukraine and
Israel and Hamas, the tensions between Israel and Iran, the U.S. and China, the U.S. and the European Union, or the EU, and the North Atlantic Treaty Organization, or NATO, countries
and the tensions in the Middle East region, including missile attacks by the Houthis on vessels in the Red Sea; the outbreak, length, and severity of public health threats, epidemics and
pandemics and other disease outbreaks and governmental responses thereto and any resultant impact on the demand for seaborne transportation of petroleum and other types of
products and the condition of the financial markets thereafter; potential disruption of shipping routes due to accidents, labor disputes, or political events; and other important factors
described from time to time in the reports filed by the Company with the U.S. Securities and Exchange Commission, or the SEC.
This report may contain assumptions, expectations, projections, intentions, and beliefs about future events. These statements are intended as forward-looking statements. The
Company may also, from time to time, make forward-looking statements in other documents and reports that are filed with or submitted to the SEC in other information sent to the
Company’s security holders, and in other written materials. The Company also cautions that assumptions, expectations, projections, intentions, and beliefs about future events may, and
often do, vary from actual results and the differences can be material. The Company undertakes no obligation to publicly update or revise any forward-looking statement contained in
this report, whether as a result of new information, future events, or otherwise, except as required by law.
4

Table of Contents
PART I
Item 1.
Identity of Directors, Senior Management, and Advisers
Not Applicable.
Item 2.
Offer Statistics and Expected Timetable
Not Applicable.
Item 3.
Key Information
In this annual report, “we,” “us,” “our,” and “the Company” all refer to Performance Shipping Inc. and its subsidiaries, unless the context requires otherwise. References in this
annual report, other than as incorporated by reference, to our common shares and earnings per share amounts, including the number of common shares issuable upon exercise of
common stock purchase warrants or upon conversion of shares of our Series C Convertible Cumulative Redeemable Perpetual Preferred Stock, or the Series C Preferred Shares, and the
exercise or conversion price of such warrants and Series C Preferred Shares, are adjusted to reflect the consolidation of our common shares through reverse stock splits, including the
one-for-fifteen reverse stock split which became effective as of November 15, 2022.
A.
[Reserved]
B.
Capitalization and Indebtedness
Not Applicable.
C.
Reasons for the Offer and Use of Proceeds
Not Applicable.
D.
Risk Factors
Some of the following risks relate principally to the industry in which we operate and our business in general. Other risks relate principally to the securities market and
ownership of our shares. The occurrence of any of the risks and events described in this section could significantly and negatively affect our business, financial condition, operating
results, or the trading price of our common shares.
Summary of Risk Factors
Below is a summary of the principal factors that make an investment in our common shares speculative or risky. This summary does not address all of the risks that we face.
Additional discussion of the risks summarized in this risk factor summary, and other risks that we face, can be found below under the headings “Industry Specific Risk Factors,”
“Company Specific Risk Factors,” and “Risks Relating to our Common Shares and Preferred Shares” and should be carefully considered, together with other information in this annual
report and our other filings with the SEC before making an investment decision regarding our common shares.
Industry Specific Risk Factors
•
The international tanker industry has historically been both cyclical and volatile.
•
An over-supply of tanker capacity may lead to a reduction in charter rates, vessel values, and profitability.
•
Our results of operations are subject to seasonal fluctuations, which may adversely affect our financial condition.
•
If economic conditions throughout the world continue to deteriorate or become more volatile, it could have an adverse impact on our operations and financial results.
•
Tanker vessel values may fluctuate due to economic and technological factors, which may adversely affect our financial condition, or result in the incurrence of a loss upon
disposal of a tanker vessel, impairment losses, or increases in the cost of acquiring additional tanker vessels.
5

Table of Contents
•
An increase in operating costs could adversely affect our cash flows and financial condition.
•
Increases in fuel prices may adversely affect our profits.
•
Compliance with safety and other vessel requirements imposed by classification societies may be very costly and may adversely affect our business.
•
We are subject to regulation and liability under environmental laws that could require significant expenditures and affect our cash flows and net income.
•
We, or our in-house managers, may be unable to attract and retain qualified, skilled employees or crew necessary to operate our business. In addition, labor interruptions
could disrupt our business.
•
We operate our vessels worldwide and, as a result, our vessels are exposed to international risks and inherent operational risks of the tanker vessel industry, which may
adversely affect our business and financial condition.
•
Political instability, terrorist or other attacks, war, and international hostilities could affect our results of operations and financial condition.
•
Outbreaks of epidemic and pandemic diseases and the related governmental responses thereto, could adversely affect our business.
•
Increasing growth of electric vehicles could lead to a decrease in trading and the movement of crude oil and petroleum products worldwide.
•
Acts of piracy on ocean-going vessels could adversely affect our business.
•
Our operations may be adversely impacted by severe weather, including as a result of climate change.
•
If our vessels call on ports located in countries or territories that are the subject of sanctions or embargoes imposed by the U.S. government or other governmental
authorities, it could lead to monetary fines or adversely affect our business, reputation, and the market for our common shares.
•
We conduct business in China, where the legal system is unpredictable and has inherent uncertainties that could limit the legal protections available to us.
•
Governments could requisition our vessels during a period of war or emergency, resulting in loss of earnings.
•
Failure to comply with the FCPA could result in fines, criminal penalties, and an adverse effect on our business.
•
The smuggling of drugs or other contraband onto our vessels may lead to governmental claims against us.
•
Maritime claimants could arrest or attach one or more of our vessels, which would interrupt our business or have a negative effect on our cash flows.
•
Changing laws and evolving reporting requirements could have an adverse effect on our business.
•
A recent proposal by the U.S. to impose new port fees on Chinese-operated vessels, Chinese-built vessels, non-Chinese companies operating Chinese-built vessels and
companies with newbuilding orders at Chinese shipyards, and to restrict a percentage of U.S. products to being transported on U.S. vessels could have a material adverse
effect on our operations and financial results.
Company Specific Risk Factors
•
The market values of our vessels are highly volatile and may decline, which could limit the amount of funds that we can borrow and trigger breaches of certain financial
covenants under our future loan facilities.
•
Our business, operating results, financial condition, and growth will depend on our ability to successfully charter our vessels, for which we will face substantial competition.
•
The failure of our counterparties to meet their obligations to us under any vessel purchase agreements or charter agreements could cause us to suffer losses or otherwise
adversely affect our business.
•
Delays or defaults by the shipyards in the construction of newbuildings could increase our expenses and diminish our net income and cash flows.
•
We may be unable to locate suitable vessels or dispose of vessels at reasonable prices, which would adversely affect our ability to operate our business.
•
Our purchasing and operating secondhand vessels, and the aging of our fleet may result in increased operating costs and vessels off-hire, which could adversely affect our
earnings.
•
There is a lack of historical operating history provided with our secondhand vessel acquisitions, and profitable operation of the vessels will depend on our skill and
expertise.
6

Table of Contents
•
Technical innovation and technical quality and efficiency requirements from our customers could reduce our charter hire income and the value of our vessels.
•
The Public Company Accounting Oversight Board inspection of our independent accounting firm could lead to findings in our auditor’s reports and challenge the accuracy
of our published audited consolidated financial statements.
•
Our ability to obtain debt financing in the future may be dependent on the performance of our then-existing charters and the creditworthiness of our charterers.
•
We may be unable to attract and retain key management personnel and other employees in the shipping industry, which may negatively impact the effectiveness of our
management and results of operations.
•
Aliki Paliou, the Chairperson of the Board, controls a majority of voting power over matters on which our shareholders are entitled to vote and, accordingly, may exert
considerable influence over us and may have interests that are different from the interests of our other shareholders.
•
Our Chief Financial Officer participates in business activities not associated with us and does not devote all of his time to our business, which may create conflicts of interest
and hinder our ability to operate successfully.
•
We are currently subject to litigation and we may be subject to similar or other litigation in the future.
•
We expect to continue to operate substantially outside the United States, which will expose us to political and governmental instability, which could harm our operations.
•
We generate all of our revenues in U.S. dollars and incur a portion of our expenses in other currencies and, therefore, exchange rate fluctuations could have an adverse
impact on our results of operations.
•
Volatility of SOFR could affect our profitability, earnings, and cash flow.
•
We may have to pay tax on United States source income, which would reduce our earnings.
•
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.
•
We may be subject to increased premium payments, or calls, because we obtain some of our insurance through protection and indemnity associations.
•
The international nature of our operations may make the outcome of any bankruptcy proceedings difficult to predict.
•
A cyber-attack could materially disrupt our business.
•
If we do not identify suitable vessels for acquisition or successfully integrate any acquired vessels, we may not be able to grow or effectively manage our growth.
•
Inflation could adversely affect our operating results and financial condition.
•
The IMO 2020 regulations may cause us to incur substantial costs and procure low-sulfur fuel oil directly on the wholesale market for storage at sea and onward
consumption on our vessels.
•
Climate change and greenhouse gas restrictions may adversely impact our operations and markets.
•
Increasing regulation as well as scrutiny and changing expectations from investors, lenders, and other market participants with respect to our Environmental, Social, and
Governance (“ESG”) policies may impose additional costs on us or expose us to additional risks.
•
If we are unable to operate our vessels profitably, we may be unsuccessful in competing in the highly competitive international tanker vessel market, which would negatively
affect our financial condition and our ability to expand our business.
•
Regulations relating to ballast water discharge may adversely affect our revenues and profitability.
•
Insurance may be difficult to obtain or, if obtained, may not be adequate to cover our losses that may result from our operations due to the inherent operational risks of the
shipping industry.
•
Adverse market conditions could cause us to breach covenants in our credit facilities and adversely affect our operating results.
•
A shift in consumer demand from crude oil towards other energy sources or changes to trade patterns for crude oil and refined petroleum products may have a material
adverse effect on our business.
Risks Relating to our Common and Preferred Shares
•
The market price of our common shares is subject to significant fluctuations.
•
Future sales of our common shares, including through the exercise of conversion rights under our outstanding convertible preferred shares, could cause the market price of
our common shares to decline.
•
We might issue additional common shares or other securities to finance our growth as market conditions warrant. These issuances, which would generally not be subject to
shareholder approval, may lower your ownership interests and may depress the market price of our common shares.
7

Table of Contents
•
There is no guarantee of a continuing public market for you to resell our common shares.
•
The issuance of common shares in future offerings may trigger anti-dilution provisions in our outstanding convertible securities and warrants and affect the interests of our
common shareholders.
•
We cannot assure you that our board of directors will declare dividend payments on our common shares in the future or when such payment might occur.
•
Future offerings of debt securities and amounts outstanding under any future credit facilities or other borrowings, which would rank senior to our common shares upon our
liquidation, may adversely affect the market value of our common shares.
•
We may not have sufficient cash from our operations to enable us to pay dividends on or redeem our Series B Preferred Shares and Series C Preferred Shares following the
payment of expenses and the establishment of any reserves.
•
Our ability to pay dividends on and redeem our Series B Preferred Shares and Series C Preferred Shares, and, therefore, your ability to receive payments on the Series B
Preferred Shares and Series C Preferred Shares, is limited by the requirements of Marshall Islands law and our contractual obligations.
•
Our Series B Preferred Shares and Series C Preferred Shares are subordinated to our debt obligations, and the interests of the holders of Series B Preferred Shares and Series
C Preferred Shares could be diluted by the issuance of additional shares, including other preferred shares, or by other transactions.
•
The Series B Preferred Shares and Series C Preferred Shares represent perpetual equity interests in us.
•
There is no established trading market for the Series B Preferred Shares or Series C Preferred Shares, which may negatively affect the market value of the Series B Preferred
Shares and Series C Preferred Shares and your ability to transfer or sell them.
•
The Series B Preferred Shares and Series C Preferred Shares are only redeemable at our option and investors should not expect us to redeem the Series B Preferred Shares or
Series C Preferred Shares in the future.
•
We are a holding company, and we depend on the ability of our current and future subsidiaries to distribute funds to us in order to satisfy our financial obligations and make
dividend payments.
•
Because we are a foreign corporation you may not have the same rights or protections that a shareholder in a U.S. corporation may have.
•
As a Marshall Islands corporation with principal executive offices in Greece, and also having subsidiaries in the Republic of the Marshall Islands, our operations may be
subject to economic substance requirements.
•
It may not be possible for our investors to enforce judgments of U.S. courts against us.
•
Anti-takeover provisions in our organizational documents could make it difficult for our shareholders to replace or remove our current board of directors or have the effect of
discouraging, delaying, or preventing a merger or acquisition, which could adversely affect the value of our securities.
Industry Specific Risk Factors
The international tanker industry has historically been both cyclical and volatile.
The international tanker industry in which we operate is cyclical, with attendant volatility in charter hire rates, vessel values and industry profitability. For tanker vessels, the
degree of charter rate volatility has varied widely. The Baltic Dirty Tanker Index, or the BDTI, a U.S. dollar daily average of charter rates issued by the Baltic Exchange that takes into
account input from brokers around the world regarding crude oil fixtures for various routes and oil tanker vessel sizes, has been volatile. In 2024, the BDTI reached a high of 1,552 and a
low of 860. The Baltic Clean Tanker Index, or BCTI, a comparable index to the BDTI but for petroleum product fixtures, has similarly been volatile. In 2024, the BCTI reached a high of
1,411 and a low of 460. Although the BDTI and BCTI were 1,101 and 676, respectively, as of April 7, 2025, there can be no assurance that the crude oil and petroleum products charter
market will continue to increase, and the market could again decline. Recent heightened volatility in charter prices has resulted primarily from the war in Ukraine and sanctions on
Russian exports of crude oil and petroleum products, and there remains uncertainty about the future impact of those events. More recently, the war between Israel and Hamas has
resulted in increased tensions in the Middle East region, including missile attacks by the Houthis on vessels in the Red Sea and Gulf of Aden. Such circumstances have had and could in
the future result in adverse consequences for the tanker industry. In general, volatility in charter rates depends, among other factors, on (i) supply and demand for tankers, (ii) the
demand for crude oil and petroleum products, (iii) the inventories of crude oil and petroleum products in the United States and in other industrialized nations, (iv) oil refining volumes, (v)
oil prices, and (vi) any restrictions on crude oil production imposed by the Organization of the Petroleum Exporting Countries, or OPEC, and non-OPEC oil producing countries.
8

Table of Contents
Currently, five of our vessels are employed on short- and medium-term time charters, and one vessel operates under pool arrangement with exposure to the prevailing robust
Aframax spot rates. Changes in spot rates and time charter rates can affect the revenues we receive from operations in the event our charterers default or seek to renegotiate the charter
hire, as well as the value of our vessels, even if our vessels are employed under long-term time charters. Our ability to re-charter our vessels on the expiration or termination of their time
or bareboat charters and the charter rates payable under any renewal or replacement charters will depend upon, among other things, economic conditions in the tanker markets and
several other factors outside of our control and we cannot guarantee that any renewal or replacement charters we enter into will be sufficient to allow us to operate our vessels profitably.
If we are not able to obtain new contracts in direct continuation with existing charters or for newly acquired vessels, or if new contracts are entered into at charter rates substantially
below the existing charter rates or on terms otherwise less favorable compared to existing contract terms, our revenues and profitability could be adversely affected, we may have to
record impairment adjustments to the carrying values of our fleet and we may not be able to comply with the financial covenants in our loan agreements. A decline in charter hire rates
will also likely cause the value of our vessels to decline.
Fluctuations in charter rates and vessel values result from changes in the supply and demand for vessels and changes in the supply and demand for oil, chemicals and other
liquids our vessels carry. Factors affecting the supply and demand for our vessels are outside of our control and are unpredictable. The nature, timing, direction and degree of changes in
the tanker industry conditions are also unpredictable.
The factors that influence demand for tanker vessel capacity include, without limitation:
•
supply of, and demand for, energy resources and oil and petroleum products;
•
oil prices;
•
competition from, and supply of, and demand for, alternative sources of energy, other shipping companies and other modes of transportation;
•
regional availability of refining capacity and inventories;
•
global and regional economic and political conditions and developments in international trade, including, “trade wars”, national oil reserve policies, fluctuations in industrial
and agricultural production, wars or other armed conflicts and work stoppages, including the war in Ukraine, the war between Israel and Hamas or the Houthi crisis in or
around the Red Sea, terrorist activities, trade wars, tariffs embargoes, and strikes;
•
currency exchange rates;
•
changes in seaborne and other transportation patterns, including shifts in transportation demand between crude oil and refined oil products and the distance they are
transported by sea and changes in the price of crude oil and changes to the West Texas Intermediate and Brent Crude Oil pricing benchmarks, and changes in trade patterns;
•
changes in governmental or maritime self-regulatory organizations’ rules and regulations or actions taken by regulatory authorities;
•
environmental and other legal and regulatory developments;
•
government subsidies of shipbuilding;
•
increases in the production of oil in areas linked by pipelines to consuming areas, the construction or expansion of new or existing pipelines or railways or conversion of
existing non-oil pipelines to oil pipelines;
9

Table of Contents
•
weather, natural disasters, and other acts of God;
•
economic slowdowns caused by public health events or inflationary pressures and resultant governmental responses;
•
developments in international trade, including those relating to the imposition of tariffs;
•
worldwide and regional availability of refining capacity and inventories;
•
changes in the production levels of crude oil (including in particular production by OPEC, the United States, and other key producers); and
•
international sanctions, embargoes, import and export restrictions, nationalizations, and wars or other conflicts, including the ongoing war in Ukraine and between Israel and
Hamas.
The factors that influence the supply of tanker vessel capacity include:
•
demand for alternative sources of energy;
•
the number of newbuilding orders and deliveries;
•
the number of shipyards and availability of shipyards to deliver vessels;
•
the scrapping rate of older vessels;
•
vessel casualties;
•
the recycling of older vessels, depending, among other things, on recycling rates and international recycling regulations;
•
conversion of tanker vessels to other uses;
•
the number of vessels that are out of service, namely those that are laid up, dry-docked, awaiting repairs, or otherwise not available for hire;
•
availability of financing for new or secondhand vessels;
•
speed of vessel operation;
•
vessel freight rates, which are affected by factors that may affect the rate of newbuilding, swapping, and laying up of vessels;
•
the price of steel and vessel equipment;
•
technological advances in the design, capacity, propulsion technology and fuel consumption efficiency of vessels;
•
changes in national or international regulations that may effectively cause reductions in the carrying capacity of vessels or early obsolescence of tonnage;
•
changes in environmental and other regulations that may limit the useful lives of vessels;
•
port or canal congestion and weather delays;
•
environmental concerns and regulations, including ballast water management, low sulfur fuel consumption regulations, and reductions in CO2 emissions; and
•
sanctions (in particular, sanctions on Russia, Iran, and Venezuela, among others).
10

Table of Contents
Declines in crude oil and natural gas prices for an extended period of time, or market expectations of potential decreases in these prices, could negatively affect our future
growth in the tanker vessel sector. Sustained periods of low oil and natural gas prices typically result in reduced exploration and extraction because oil and natural gas companies’ capital
expenditure budgets are subject to cash flow from such activities and are, therefore, sensitive to changes in energy prices. These changes in commodity prices can have a material effect
on demand for our services, and periods of low demand can cause excess vessel supply and intensify the competition in the industry, which often results in vessels, particularly older
and less technologically advanced vessels, being idle for long periods of time. We cannot predict the future level of demand for our services or future conditions of the oil and natural
gas industry. Any decrease in exploration, development, or production expenditures by oil and natural gas companies could reduce our revenues and materially harm our business,
results of operations, and cash available for distribution.
An over-supply of tanker capacity may lead to a reduction in charter rates, vessel values, and profitability.
The market supply of tanker vessels is affected by a number of factors, such as the supply of and demand for energy resources, including oil and petroleum products, the
supply of and demand for seaborne transportation of such energy resources, the current and expected price for newbuildings, and the number of vessels being recycled for scrap steel,
as well as strong overall economic growth of the world economy. In recent years, shipyards have produced a large number of new tankers. As of March 2025, newbuilding orders have
been placed for an aggregate of approximately 14.2% of the existing global tanker fleet, with the bulk of deliveries expected during 2027. If the capacity of new tanker vessels delivered
exceeds the capacity of tanker vessels being recycled for scrap steel or converted to non-trading tanker vessels, tanker vessel capacity will increase. If the supply of tanker vessel
capacity increases and the demand for tanker vessel capacity decreases or does not increase correspondingly, charter rates could materially decline, resulting in a decrease in the value
of our vessels and the charter rates that we can obtain. A reduction in charter rates and the value of our tanker vessels may have a material adverse effect on our results of operations,
earnings, and available cash, our ability to pay dividends and our ability to comply with the covenants in our loan agreements.
The impact of the sanctions on Russian exports of crude oil and petroleum products is uncertain and has generated increased volatility in the supply of tanker vessels available
for worldwide trade. If this volatility persists, we may not be able to find profitable charters for our vessels, or other vessels we may acquire, which could have a material adverse effect
on our business, results of operations, cash flows, financial condition, ability to pay dividends, and compliance with current or future covenants with respect to any of our financing
arrangements.
Our results of operations are subject to seasonal fluctuations, which may adversely affect our financial condition.
We operate our vessels in markets that have historically exhibited seasonal variations in demand and, as a result, charter rates. Peaks in tanker vessel demand quite often
precede seasonal oil consumption peaks, as refiners and suppliers anticipate consumer demand. Seasonal peaks in oil demand can broadly be classified into two main categories: (1)
increased demand prior to Northern Hemisphere winters as heating oil consumption increases and (2) increased demand for gasoline prior to the summer driving season in the United
States. Unpredictable weather patterns and variations in oil reserves disrupt tanker scheduling. This seasonality may result in quarter-to-quarter volatility in our operating results, as
many of our vessels trade in the spot market. Seasonal variations in tanker vessel demand will affect any spot market-related rates that we may receive.
If economic conditions throughout the world continue to deteriorate or become more volatile, it could have an adverse impact on our operations and financial results.
Various macroeconomic factors, including rising inflation, higher interest rates, global supply chain constraints, and the effects of overall economic conditions and
uncertainties, such as those resulting from the current and future conditions in the global financial markets, could adversely affect our results of operations, financial condition and
ability to pay dividends. Inflation and rising interest rates may negatively impact us by increasing our operating costs and our cost of borrowing. Interest rates, the liquidity of the credit
markets and the volatility of the capital markets could also affect the operation of our business and our ability to raise capital on favorable terms, or at all. Adverse economic conditions
also affect demand for goods and oil. Reduced demand for these or other products could result in significant decreases in rates we obtain for chartering our vessels. In addition, the cost
for crew members, oils and bunkers, and other supplies may increase. Furthermore, we may experience losses on our holdings of cash and investments due to failures of financial
institutions and other parties. Difficult economic conditions may also result in a higher rate of losses on our accounts receivable due to credit defaults. As a result, downturns in the
worldwide economy could have a material adverse effect on our business, results of operations, financial condition, and ability to pay dividends.
11

Table of Contents
The world economy continues to face a number of challenges, including the war between Ukraine and Russia and between Israel and Hamas, tensions between Israel and Iran,
tensions in and around the Red Sea, and Russia and NATO tensions, China and Taiwan disputes, United States and China trade relations, instability between Iran and the West,
hostilities between the United States and North Korea, political unrest and conflict in the Middle East, the South China Sea region, and other geographic countries and areas, terrorist or
other attacks (including threats thereof) around the world, war (or threatened war) or international hostilities, and epidemics or pandemics and banking crises or failures, such as the
Silicon Valley Bank, Signature Bank, and First Republic Bank failures. See also “—Outbreaks of epidemic and pandemic diseases and the related governmental responses thereto, could
adversely affect our business.” In addition, the continuing war in Ukraine, the length and breadth of which remains highly unpredictable, has led to increased economic uncertainty
amidst fears of a more generalized military conflict or significant inflationary pressures, due to the increases in fuel and grain prices following the sanctions imposed on Russia.
Furthermore, it is difficult to predict the intensity and duration of the war between Israel and Hamas or the Houthi rebel attacks on shipping in and around the Red Sea and their impact
on the world economy is uncertain. Although a cease-fire declared between Israel and Hamas on January 15, 2025, heightened regional tension and renewed conflict in Gaza and Yemen
developed in March 2025, which may lead to continued attacks on vessels transiting the Red Sea. If such conditions are sustained, the longer-term net impact on our business would be
difficult to predict with any degree of accuracy. Such events may have unpredictable consequences and contribute to instability in the global economy or cause a decrease in worldwide
demand for certain goods and, thus, shipping.
Whether the present dislocation in the markets and resultant inflationary pressures will transition to a long-term inflationary environment is uncertain, and the effects of such a
development on charter rates, vessel demand and operating expenses in the sector in which we operate are uncertain. On the tanker market, the sanctions imposed by the EU on Russia
affected imports of crude oil and petroleum products. This had a positive effect on the tankers’ charter market, as Europe had to import these amounts of crude oil and petroleum
products from other sources of greater distance, increasing the overall ton-mile demand. Furthermore, it is difficult to predict the intensity and duration of the war between Israel and
Hamas or the Houthi rebel attacks on shipping in the Red Sea and their impact on the world economy is uncertain. If such conditions are sustained, the longer-term net impact on the
tanker freight market and our business would be difficult to predict with any degree of accuracy. Such events may have unpredictable consequences and contribute to instability in the
global economy or cause a decrease in worldwide demand for certain goods and, thus, shipping. See also “—Political instability, terrorist or other attacks, war, and international
hostilities could affect our results of operations and financial condition.”
In Europe, concerns regarding the possibility of sovereign debt defaults by the EU member countries, although generally alleviated, have in the past disrupted financial markets
throughout the world, and may lead to weaker consumer demand in the European Union, the U.S. and other parts of the world. The U.S. implementation of tariffs and related
countermeasures taken by impacted foreign countries further increases the risk of additional trade protectionism. The withdrawal of the United Kingdom, or UK, from the EU, or Brexit, or
similar events in other jurisdictions, could impact global markets, including foreign exchange and securities markets; any resulting changes in currency exchange rates, tariffs, treaties
and other regulatory matters could in turn adversely impact our business, operating results, cash flows and financial condition.
12

Table of Contents
In addition, the recent economic slowdown in the Asia Pacific region, particularly in China, may exacerbate the effect of the weak economic trends in the rest of the world.
Before the global economic financial crisis that began in 2008, China had one of the world’s fastest growing economies in terms of gross domestic product, or GDP, which had a
significant impact on shipping demand. China’s GDP growth rate for the year ended December 31, 2022, was approximately 3.0%, one of its lowest rates in 50 years, thought to be mainly
caused by the country’s zero-COVID policy and strict lockdowns. For the year ended December 31, 2024, China reported that its GDP growth rate recovered to 5.0%. Looking ahead,
China’s economic growth is expected to remain steady, with forecasts projecting a GDP growth rate of around 5.0% for 2025. Although the Chinese government has implemented
economic stimulus measures, it is possible that China and other countries in the Asia Pacific region will continue to experience volatile, slowed or even negative economic growth in the
near future. Changes in the economic conditions of China, and changes in laws or policies adopted by its government or the implementation of these laws and policies by local
authorities, including with regards to tax matters and environmental concerns (such as achieving carbon neutrality), could affect vessels that are either chartered to Chinese customers or
that call to Chinese ports, vessels that undergo drydocking at Chinese shipyards and Chinese financial institutions that are generally active in ship financing, and could have a material
adverse effect on our business, operating results, cash flows and financial condition.
Furthermore, governments have, and may continue to, turn to trade barriers to protect their domestic industries against foreign imports, thereby depressing shipping demand.
Under the current U.S. administration, there is significant and increasing uncertainty about the future relationship between the United States, China, and other exporting countries,
including with respect to trade policies, treaties, government regulations, and tariffs. In January 2025, during the initial days of President Trump’s second term, the United States
announced the imposition of additional substantial tariffs on imports from various countries, including China, Canada and Mexico, U.S.’s top three trade partners, and the subject
countries indicated their intention to impose counter measures. On February 13, 2025, President Donald Trump ordered his trade advisers to come up with “reciprocal” tariffs on U.S.
trade partners to retaliate against taxes, tariffs, regulations and subsidies, thus increasing the possibility of a global trade war. Protectionist developments, or the perception that they
may occur, may have a material adverse effect on global economic conditions, and may significantly reduce global trade. On March 4, 2025, the U.S. imposed 25% tariffs on imports from
Mexico and Canada and enacted an extra 10% tariff on Chinese imports, therefore doubling the previously levied tariff from February to an additional 20% on existing tariffs. In response,
Canada planned to immediately impose a 25% tariff on U.S. imports, and Mexico stated that the country would also retaliate, intending to disclose plans in due time. Additionally, China
announced retaliatory tariffs on U.S. agricultural goods and export restrictions to the U.S., in addition to filing a lawsuit with the World Trade Organization. On March 5, 2025, President
Trump announced that cars made in North America that comply with the continent's existing free trade agreement are exempted from tariffs for a month. On March 6, 2025, President
Trump announced that the U.S. will pause the 25% tariffs on U.S. imports from Mexico and Canada that are covered under a 2020 United States-Mexico-Canada Agreement, or USMCA,
trade agreement until April 2, 2025. Goods that are not covered by the agreement remain subject to tariffs. On March 11, 2025, President Trump announced higher tariffs on steel and
aluminum from Canada; however, hours later, reverted to previous plan to continue with the 25% tariffs on steel and aluminum products from Canada. On March 12, 2025, Canada
announced new retaliatory trade duties on U.S. goods, imposing 25% counter tariffs on various goods including tools, computers and servers, and sports equipment, that took effect on
March 13, 2025. Additionally, on February 26, 2025, President Trump announced a possible 25% tariff on European imports, which was imposed as of March 12, 2025. The EU announced
on March 12, 2025 that it will respond with retaliatory tariffs that will take effect on U.S. products starting April 1, 2025, reinstating tariff packages form 2018 and 2020 that includes tariffs
on U.S. products like whiskey and other alcoholic beverages. On March 13, 2025, President Trump posted on social media that he would place a 200% tariff on all wines, champagne and
alcoholic products form the E.U. if the proposed 50% tariff on U.S. whiskey is carried out. On March 25, 2025, President Trump signed an executive order increasing tariffs to 25% for any
goods from countries importing Venezuelan oil. On March 26, 2025, President Trump signed an executive order imposing 25% tariff on all automobile and automobile parts imports.
On April 2, 2025, President Trump announced new tariffs on many U.S. trading partners, including a 34% tax on imports from China, a 20% tax on products from the E.U., and a
baseline 10% tax on imports from many countries. These tariffs were in addition to the previous announcements of 25% taxes on auto imports, tariffs implemented against China, Canada
and Mexico, and trade penalties on steel and aluminum. The previously announced tariff rates for Canada and Mexico were to stay the same and the goods that comply with USMCA
were to continue to be excluded from these tariffs. However, the 20% charge on imports from China was in addition to the 34% import tax announced. Specific products that are subject to
tariffs, such as automobiles, were to be exempted from the tariffs announced, and tariffs on products such as pharmaceutical drugs were to be announced at a later date. Protectionist
developments, or the perception that they may occur, may have a material adverse effect on global economic conditions, and may significantly reduce global trade. Additional tariffs
included imports from Japan being subject to a 24% tariff, and imports from South Korea being subject to a 25% tariff.
13

Table of Contents
On April 9, 2025, President Trump announced a pause to tariffs on most countries for 90 days. Countries subject to the pause on the tariffs are still to be subject to the baseline
10% tariff. This consequently lowers the tariff rate for the E.U., Japan, and South Korea, among other countries. However, President Trump further increased the tariff rate against
Chinese imports to 125%. Canada and Mexico are still to be subject to tariffs as high as 25%, with goods that comply with USMCA to continue to be excluded.
Moreover, increasing trade protectionism may cause an increase in (i) the cost of goods exported from regions globally, particularly from the Asia-Pacific region, (ii) the length
of time required to transport goods and (iii) the risks associated with exporting goods. Such increases may further reduce the quantity of goods to be shipped, shipping time schedules,
voyage costs and other associated costs, which could have an adverse impact on our charterers’ business, operating results and financial condition and could thereby affect their ability
to make timely charter hire payments to us and to employ our vessels. This could have a material adverse effect on our business, operating results, cash flows and financial condition.
Credit markets in the United States and Europe have in the past experienced significant contraction, deleveraging and reduced liquidity, and there is a risk that the U.S. federal
government and state governments and European authorities may continue to implement a broad variety of governmental action and/or introduce new financial market regulations.
Global financial markets and economic conditions have been, and continue to be, volatile and we face risks associated with the trends in the global economy, such as changes in interest
rates, instability in the banking and securities markets around the world, the risk of sovereign defaults, and reduced levels of growth, among other factors. Major market disruptions and
the current adverse changes in market conditions and regulatory climate worldwide may adversely affect our business, results or operations or impair our ability to borrow under any
future financial arrangements we may enter into contemplating borrowing from the public and/or private equity and debt markets. Many lenders have increased interest rates, enacted
tighter lending standards, refused to refinance existing debt at all or on terms similar to current debt, reduced (or in some cases ceased to provide) funding to borrowers and other market
participants, including equity and debt investors and, in some cases, have been unwilling to provide financing on attractive terms or even at all. Due to these factors, we cannot be
certain that financing will be available if needed and to the extent required, on acceptable terms or at all. In the absence of available financing or financing in favorable terms, we may be
unable to complete vessel acquisitions, deliveries of any newbuilding vessels, take advantage of business opportunities or respond to competitive pressures.
Tanker vessel values may fluctuate due to economic and technological factors, which may adversely affect our financial condition, or result in the incurrence of a loss upon
disposal of a tanker vessel, impairment losses, or increases in the cost of acquiring additional tanker vessels.
Tanker vessel values may fluctuate due to a number of different factors, including: general economic and market conditions affecting the shipping industry; competition from
other shipping companies; the types and sizes of available tanker vessels; the availability of other modes of transportation; increases in the supply of tanker vessel capacity; the cost of
newbuildings; governmental or other regulations; and the need to upgrade secondhand and previously owned tanker vessels as a result of charterer requirements, technological
advances in vessel design or equipment or otherwise, including as a result of compliance with more stringent emissions regulations. In addition, as tanker vessels grow older, they
generally decline in value. Due to the cyclical nature of the shipping market, if we sell any of our owned tanker vessels at a time when prices are depressed, we could incur a loss and our
business, results of operations, cash flow, and financial condition could be adversely affected. Moreover, if the book value of a tanker vessel is impaired due to unfavorable market
conditions, we may incur a loss that could adversely affect our operating results. In 2024, 2023, and 2022 we did not recognize any impairment losses.
Conversely, if tanker vessel values are elevated at a time when we wish to acquire additional tanker vessels, the cost of acquisition may increase, and this could adversely affect
our business, results of operations, cash flows, financial condition, and ability to pay dividends to our shareholders. Over the past ten years, the value of a ten-year-old Aframax tanker
has fluctuated widely within a range of $18 million to $60 million.
14

Table of Contents
An increase in operating costs could adversely affect our cash flows and financial condition.
Vessel operating expenses include, among others, the costs of crew, provisions, deck and engine stores, lube oil, bunkers, insurance, and maintenance and repairs, which
depend on a variety of factors, many of which are beyond our control. Some of these costs, primarily relating to insurance and enhanced security measures implemented after September
11, 2001 and increases in the frequency of acts of piracy, have been increasing. If our vessels suffer damage, they may need to be repaired at a drydocking facility. The costs of drydock
repairs are unpredictable and can be substantial. Increases in any of these costs could have a material adverse effect on our business, results of operations, cash flows, financial
condition, and ability to pay dividends to our shareholders.
Increases in fuel prices may adversely affect our profits.
Fuel is a significant, if not the largest, expense in our shipping operations when vessels are operated on the spot market under voyage charters. While we do not directly bear
the cost of fuel or bunkers under our time charters, fuel is also a significant factor in negotiating charter rates. As a result, an increase in the price of fuel beyond our expectations may
adversely affect our profitability at the time of charter negotiation. The price and supply of fuel is unpredictable and fluctuates based on events outside our control, including
geopolitical developments, supply of and demand for crude oil and natural gas, actions by OPEC, and other oil and natural gas producers, the imposition of new regulations adopted by
the International Maritime Organization, or IMO, war and unrest in oil producing countries and regions, regional production patterns, and environmental concerns and regulations. While
fuel prices remained generally lower in 2024 as compared to 2023, fuel has been and may again become much more expensive, including as a result of reductions of carbon emissions due
to new regulations adopted by the IMO, which may reduce the profitability and competitiveness of our business. Other future regulations may have a similar impact.
Compliance with safety and other vessel requirements imposed by classification societies may be very costly and may adversely affect our business.
The hull and machinery of every commercial vessel must be classed by a classification society authorized by its country of registry. The classification society certifies that a
vessel is safe and seaworthy in accordance with the applicable rules and regulations of the country of registry of the vessel and the IMO’s International Convention for the Safety of
Life at Sea of 1974, or SOLAS.
A vessel must undergo annual surveys, intermediate surveys, and special surveys. In lieu of a special survey, a vessel’s machinery may be on a continuous survey cycle under
which the machinery would be surveyed periodically over a five-year period. If any vessel does not maintain its class and/or fails any annual survey, intermediate survey, or special
survey, the vessel will be unable to trade between ports and will be unemployable. If this were to happen to one or more of our vessels, it could negatively impact our results of
operations and financial condition.
We are subject to regulation and liability under environmental laws that could require significant expenditures and affect our cash flows and net income.
Our business and the operations of our vessels are materially affected by environmental regulation in the form of international conventions, national, state, and local laws and
regulations in force in the jurisdictions in which our vessels operate, as well as in the country or countries of their registration, including those governing the management and disposal
of hazardous substances and wastes, the cleanup of oil spills and other contamination, air emissions (including greenhouse gases), water discharges and ballast water management.
These regulations include, but are not limited to, European Union regulations, the U.S. Oil Pollution Act of 1990, requirements of the U.S. Coast Guard and the U.S. Environmental
Protection Agency, the U.S. Clean Air Act of 1970 (including its amendments of 1977 and 1990), the U.S. Clean Water Act, and the U.S. Maritime Transportation Security Act of 2002, and
regulations of the IMO, including the International Convention on Civil Liability for Oil Pollution Damage of 1969, the International Convention for the Prevention of Pollution from Ships
of 1973, as modified by the Protocol of 1978, collectively referred to as MARPOL 73/78 or MARPOL, including designations of Emission Control Areas, thereunder, SOLAS, the
International Convention on Load Lines of 1966, the International Convention of Civil Liability for Bunker Oil Pollution Damage, and the ISM Code. Because such conventions, laws, and
regulations are often revised, we cannot predict the ultimate cost of complying with such requirements or the impact thereof on the re-sale price or useful life of any vessel that we own
or will acquire. Additional conventions, laws, and regulations may be adopted that could limit our ability to do business or increase the cost of our doing business and which may
materially adversely affect our operations. Government regulation of vessels, particularly in the areas of safety and environmental requirements, continues to change, requiring us to
incur significant capital expenditures on our vessels to keep them in compliance, or even to scrap or sell certain vessels altogether. In addition, we may incur significant costs in meeting
new maintenance and inspection requirements, in developing contingency arrangements for potential environmental violations, and in obtaining insurance coverage.
15

Table of Contents
In addition, we are required by various governmental and quasi-governmental agencies to obtain certain permits, licenses, certificates, approvals, and financial assurances with
respect to our operations. Our failure to maintain necessary permits, licenses, certificates, approvals, or financial assurances could require us to incur substantial costs or temporarily
suspend the operation of one or more of the vessels in our fleet or lead to the invalidation or reduction of our insurance coverage.
Environmental requirements can also affect the resale value or useful lives of our vessels, require a reduction in cargo capacity, ship modifications or operational changes or
restrictions, lead to decreased availability of insurance coverage for environmental matters, or result in the denial of access to certain jurisdictional waters or ports, or detention in certain
ports. Under local, national, and foreign laws, as well as international treaties and conventions, we could incur material liabilities, including for cleanup obligations and natural resource
damages, in the event that there is a release of petroleum or hazardous substances from our vessels or otherwise in connection with our operations. We could also become subject to
personal injury or property damage claims relating to the release of hazardous substances associated with our existing or historic operations. Violations of, or liabilities under,
environmental requirements can result in substantial penalties, fines, and other sanctions, including, in certain instances, seizure or detention of our vessels.
We, or our in-house managers, may be unable to attract and retain qualified, skilled employees or crew necessary to operate our business. In addition, labor interruptions could
disrupt our business.
Our success will depend largely on our ability and on the ability of Performance Shipping Management Inc. (previously known as Unitized Ocean Transport Limited, or UOT),
our wholly-owned subsidiary, which acts as our in-house manager, to attract and retain highly skilled and qualified personnel. In crewing our vessels, we require technically skilled
employees with specialized training who can perform physically demanding work. Competition to attract and retain qualified crew members is intense. If we are not able to increase our
charter rates to compensate for any crew cost increases, it could have a material adverse effect on our business, results of operations, cash flows, and financial condition. Any inability
we or our in-house manager experience in the future to hire, train, and retain a sufficient number of qualified employees could impair our ability to manage, maintain, and grow our
business, which could have a material adverse effect on our financial condition, results of operations, and cash flows.
Our vessels are manned by masters, officers, and crews that are employed by our vessel-owning subsidiaries. If not resolved in a timely and cost-effective manner, industrial
action or other labor unrest could prevent or hinder our operations from being carried out normally and could have a material adverse effect on our financial condition, results of
operations, and cash flows.
We operate our vessels worldwide and, as a result, our vessels are exposed to international risks and inherent operational risks of the tanker vessel industry, which may adversely
affect our business and financial condition.
The operation of an ocean-going vessel carries inherent risks. Our vessels and their cargoes are at risk of being damaged or lost because of events such as marine disasters,
bad weather, and acts of God, business interruptions caused by mechanical failures, grounding, fire, explosions and collisions, human error, war, terrorism, piracy, epidemic or pandemics,
and other circumstances or events. In addition, changing economic, regulatory, and political conditions in some countries, including political and military conflicts, have from time to time
resulted in attacks on vessels, mining of waterways, piracy, terrorism, labor strikes, and boycotts. These events may result in death or injury to persons, loss of revenues or property, the
payment of ransoms, environmental damage, higher insurance rates, damage to our customer relationships, and market disruptions, delay, or rerouting, which may also subject us to
litigation. Epidemics and other public health incidents may also lead to crew member illness, which can disrupt the operations of our vessels, or result in the imposition of public health
measures, which may prevent our vessels from calling on ports or discharging cargo in the affected areas or in other locations after having visited the affected areas. In addition, the
operation of tanker vessels has unique operational risks associated with the transportation of oil. An oil spill may cause significant environmental damage and the associated costs
could exceed the insurance coverage available to us. Compared to other types of vessels, tanker vessels are exposed to a higher risk of damage and loss by fire, whether ignited by a
terrorist attack, collision, or other cause, due to the high flammability and high volume of the oil transported in tanker vessels.
16

Table of Contents
If our vessels suffer damage, they may need to be repaired at a drydocking facility. The costs of drydock repairs and maintenance are unpredictable and may be substantial. We
may have to pay drydocking costs that our insurance does not cover in full. The loss of revenues while these vessels are being repaired and repositioned, as well as the actual cost of
these repairs, may adversely affect our business and financial condition. In addition, space at drydocking facilities is sometimes limited and not all drydocking facilities are conveniently
located. We may be unable to find space at a suitable drydocking facility, or our vessels may be forced to travel to a drydocking facility that is not conveniently located to our vessels’
positions. The loss of earnings while these vessels are forced to wait for space, or to travel to more distant drydocking facilities, may adversely affect our business and financial
condition. Further, the total loss of any of our vessels could harm our reputation as a safe and reliable vessel owner and operator. If we are unable to adequately maintain or safeguard
our vessels, we may be unable to prevent any such damage, costs, or loss which could negatively impact our business, financial condition, results of operations, and available cash.
In addition, international shipping is subject to various security and customs inspection and related procedures in countries of origin and destination and transshipment points.
Inspection procedures can result in the seizure of the cargo and/or our vessels, delays in the loading, offloading, or delivery, and the levying of customs duties, fines, or other penalties
against us. It is possible that changes to inspection procedures could impose additional financial and legal obligations on us. Furthermore, changes to inspection procedures could also
impose additional costs and obligations on our customers and may, in certain cases, render the shipment of certain types of cargo uneconomical or impractical. Any such changes or
developments may have a material adverse effect on our business, results of operations, cash flows, financial condition, and available cash.
Political instability, terrorist or other attacks, war, and international hostilities could affect our results of operations and financial condition.
We conduct most of our operations outside of the United States and our business, operating results, cash flows, financial condition and available cash may be adversely
affected by changing economic, political, and governmental conditions in the countries and regions in which our vessels are employed or registered. Moreover, we operate in a sector of
the economy that is likely to be adversely impacted by the effects of political uncertainty and armed conflicts, including the war between Ukraine and Russia and between Israel and
Hamas and Hezbollah, Russia and NATO tensions, U.S. and NATO tensions, China and Taiwan disputes, U.S. and China trade relations, instability between Iran and the West, hostilities
between the U.S. and North Korea and the U.S. and Panama, political unrest and conflicts in the Middle East, the South China Sea region, the Red Sea region (including missile attacks
controlled by the Houthis on vessels transiting the Red Sea or Gulf of Aden), and other countries and geographic areas, geopolitical events, such as Brexit or another withdrawal from
the European Union, terrorist or other attacks (or threats thereof) around the world, and war (or threatened war) or international hostilities. Such events may contribute to further
economic instability in the global financial markets and international commerce and could also adversely affect our ability to obtain additional financing on terms acceptable to us or at
all.
The ongoing war between Russia and Ukraine may lead to further regional and international conflicts or armed action. This war has disrupted supply chains and caused
instability in the energy markets and the global economy, with effects on the tanker market, which has experienced volatility. The United States, the United Kingdom, and the European
Union, among other countries, have announced unprecedented economic sanctions and other penalties against certain persons, entities, and activities connected to Russia, including
removing Russian-based financial institutions from the Society for Worldwide Interbank Financial Telecommunication payment system and restricting imports of Russian oil, liquefied
natural gas, and coal. These sanctions have caused supply disruptions in the oil and gas markets and could continue to cause significant volatility in energy prices, which could result in
increased inflation and may trigger a recession in the U.S. and China, among other regions. While much uncertainty remains regarding the global impact of the war in Ukraine, it is
possible that such tensions could adversely affect our business, financial condition, operating results, and cash flows. Moreover, we will be subject to additional insurance premiums in
case we transit through or call to any port or area designated as listed areas by the Joint War Committee or other organizations. These factors may also result in the weakening of the
financial condition of our charterers, suppliers, counterparties, and other agents in the shipping industry. As a result, our business, operating results, cash flows, and financial condition
may be negatively affected since our operations are dependent on the success and economic viability of our counterparties.
17

Table of Contents
The ongoing war between Russia and Ukraine could also result in the imposition of further economic sanctions by the United States, the United Kingdom, the European Union,
or other countries against Russia, trade tariffs, or embargoes with uncertain impacts on the markets in which we operate. In addition, the U.S. and certain other NATO countries have
been supplying Ukraine with military aid. U.S. officials have also warned of the increased possibility of Russian cyberattacks, which could disrupt the operations of businesses involved
in the shipping industry, including ours, and could create economic uncertainty particularly if such attacks spread to a broad array of countries and networks. While much uncertainty
remains regarding the global impact of the war in Ukraine, it is possible that such tensions could adversely affect our business, financial condition, operating results, and cash flows.
The Russian Foreign Harmful Activities Sanctions program includes prohibitions on the import of certain Russian energy products into the United States, including crude oil,
petroleum, petroleum fuels, oils, liquefied natural gas and coal, as well as prohibitions on all new investments in Russia by U.S. persons, among other restrictions. Furthermore, the
United States, the EU and other countries have also prohibited a variety of specified services related to the maritime transport of Russian Federation origin crude oil and petroleum
products, including trading/commodities brokering, financing, shipping, insurance (including reinsurance and protection and indemnity), flagging, and customs brokering. These
prohibitions took effect on December 5, 2022, with respect to the maritime transport of crude oil and took effect on February 5, 2023, with respect to the maritime transport of other
petroleum products. An exception exists to permit such services when the price of the seaborne Russian oil into non-EU countries does not exceed the relevant price cap; but
implementation of this price exception relies on a recordkeeping and attestation process that allows each party in the supply chain of seaborne Russian oil to demonstrate or confirm that
oil has been purchased at or below the price cap. Violations of the price cap policy or the risk that information, documentation, or attestations provided by parties in the supply chain are
later determined to be false may pose additional risks adversely affecting our business.
Furthermore, the intensity and duration of the war between Israel and Hamas is difficult to predict and its impact on the world economy and our industry is uncertain. Beginning
in late 2023, vessels in the Red Sea and Gulf of Aden have been subject to attempted hijackings and attacks by drones and projectiles characterized by Houthi groups in Yemen as a
response to the war between Israel and Hamas. An increasing number of companies have rerouted their vessels to avoid transiting the Red Sea, incurring greater shipping costs and
delays. For vessels transiting the region, war risk premia have increased substantially, and should these attacks continue, we could similarly experience a significant increase in our
insurance costs and we may not be adequately insured to cover losses from these incidents, however since all our vessels are currently on time charters or pool arrangements any such
increase in war premiums should be paid by our current time charterers. While much uncertainty remains regarding the global impact of the war between Israel and Hamas, it is possible
that such tensions could result in the eruption of further hostilities in other regions, including in and around the Red Sea, and could adversely affect our business, financial conditions,
operating results, and cash flows.
In the past, other political conflicts have also resulted in attacks on vessels, mining of waterways, and other efforts to disrupt international shipping, particularly in the Arabian
Gulf region. The ongoing war in Ukraine has previously resulted in missile attacks on commercial vessels in the Black Sea. The recent outbreak of conflict in and around the Red Sea has
also resulted in missile attacks on vessels. Acts of terrorism and piracy have also affected vessels trading in regions such as the Gulf of Guinea, the Red Sea, the Gulf of Aden off the
coast of Somalia, and the Indian Ocean. Any of these occurrences could have a material adverse impact on our future performance, operating results, cash flows, financial condition and
our ability to pay cash distributions to our shareholders.
Outbreaks of epidemic and pandemic diseases and the related governmental responses thereto, could adversely affect our business.
Global public health threats, influenza, and other highly communicable diseases or viruses, outbreaks which have from time to time occurred in various parts of the world in
which we operate, including China, could disrupt global financial markets and economic conditions and adversely impact our operations, the timing of completion of any future
newbuilding projects, as well as the operations of our charterers and other customers.
18

Table of Contents
For example, the outbreak of the novel coronavirus, or COVID-19, and its variants caused severe global disruptions, with governments in affected countries imposing travel
bans, quarantines, and other emergency public health measures. Although the incidence and severity of COVID-19 and its variants have diminished over time, restrictions, and future
prevention and mitigation measures against outbreaks of epidemic and pandemic diseases, are likely to have an adverse impact on global economic conditions, which could materially
and adversely affect our future operations. As a result of such measures, our vessels may not be able to call on, or disembark from ports located in regions affected by the outbreak. In
addition, we may experience severe operational disruptions and delays, unavailability of normal port infrastructure and services including limited access to equipment, critical goods and
personnel, disruptions to crew changes, quarantine of ships or crew, counterparty solidity, closure of ports and custom offices, as well as disruptions in the supply chain and industrial
production, which may lead to reduced cargo demand, among other potential consequences attendant to epidemic and pandemic diseases.
The extent to which our business, operating results, cash flows, financial condition, financings, value of our vessel or other vessels we may acquire, and ability to pay
dividends may be negatively affected by future pandemics, epidemics, or other outbreaks of infectious diseases is highly uncertain and will depend on numerous evolving factors that
we cannot predict, including, but not limited to, (i) the duration and severity of the infectious disease outbreak; (ii) the imposition of restrictive measures to combat the outbreak and
slow disease transmission; (iii) the introduction of financial support measures to reduce the impact of the outbreak on the economy; (iv) shortages or reductions in the supply of
essential goods, services, or labor; and (v) fluctuations in general economic or financial conditions tied to the outbreak, such as a sharp increase in interest rates or reduction in the
availability of credit. We cannot predict the effect that an outbreak of any future infectious disease outbreak, pandemic, or epidemic may have on our business, operating results, cash
flows, and financial condition, which could be material and adverse.
Increasing growth of electric vehicles could lead to a decrease in trading and the movement of crude oil and petroleum products worldwide.
The IEA noted in its Global EV Outlook 2024 that total electric cars sold annually worldwide grew from about 120,000 in 2012 to more than 14 million in 2023, bringing the total
number of electric cars to approximately 40 million, more than six times the number from 2018. Electric car sales in the first quarter of 2024 were 3 million, up over 30% from the same
quarter of 2023. This was driven mainly by China, which sold about half a million more electric cars than over the same period in 2023. IEA forecasts are for electric vehicles (“EVs”) to
grow from 40 million in 2023 to 240 million by 2030, which the IEA forecasts would reduce worldwide demand for oil products by 5 million barrels per day in 2030. IEA estimates that EV
operations in 2019 avoided the consumption of almost 0.7 million barrels per day of oil products. According to the World Economic Forum, there were about 1.1 billion cars registered in
2015 and there will be about 2 billion cars registered by 2040. Growth in EVs or a slowdown in imports or exports of crude or petroleum products worldwide may result in decreased
demand for our vessels and lower charter rates, which could have a material adverse effect on our business, results of operations, cash flows, financial condition, and ability to make
cash distributions.
Acts of piracy on ocean-going vessels could adversely affect our business.
Acts of piracy have historically affected ocean-going vessels trading in regions of the world such as the Red Sea, the Gulf of Aden off the coast of Somalia, the Indian Ocean,
and the Gulf of Guinea region off the coast of Nigeria, which has experienced increased incidents of piracy in recent years. Sea piracy incidents continue to occur, particularly in the
South China Sea, the Indian Ocean, the Gulf of Guinea, and the Strait of Malacca, and there has been a recent resurgence of such incidents in the Gulf of Aden. Acts of piracy could
result in harm or danger to the crews that man our vessels. Additionally, if piracy attacks result in regions in which our vessels are deployed being characterized by insurers as “war risk”
zones, or Joint War Committee “war and strikes” listed areas, premiums payable for such coverage could increase significantly, and such insurance coverage may be more difficult to
obtain, if available at all. In addition, crew and security equipment costs, including costs that may be incurred to employ onboard security armed guards, could increase in such
circumstances. Furthermore, while we believe the charterer remains liable for charter payments when a vessel is seized by pirates, the charterer may dispute this and withhold charter hire
until the vessel is released. A charterer may also claim that a vessel seized by pirates was not “on-hire” for a certain number of days and is, therefore, entitled to cancel the charterparty, a
claim that we would dispute. We may not be adequately insured to cover losses from these incidents, which could have a material adverse effect on us. In addition, any detention
hijacking, involving the hostile detention of a vessel, as a result of an act of piracy against our vessels, or an increase in cost or unavailability of insurance for our vessels, could have a
material adverse impact on our business, financial condition, and operating results.
19

Table of Contents
Our operations may be adversely impacted by severe weather, including as a result of climate change.
Tropical storms, hurricanes, typhoons, and other severe marine weather events could result in the suspension of operations at the planned ports of call for our vessels and
require significant deviations from our vessels’ planned routes. In addition, climate change could result in an increase in the frequency and severity of these extreme weather events. The
closure of ports, rerouting of vessels, damage of production facilities, as well as other delays caused by increasing frequency of severe weather, could stop operations or shipments for
indeterminate periods and have a material adverse effect on our business, results of operations, and financial condition.
If our vessels call on ports located in countries or territories that are the subject of sanctions or embargoes imposed by the U.S. government or other governmental authorities, it
could lead to monetary fines or adversely affect our business, reputation, and the market for our common shares.
While none of our vessels have called on ports located in countries or territories that are the subject of country-wide or territory-wide sanctions or embargoes imposed by the
U.S. government or other governmental authorities (“Sanctioned Jurisdictions”) in 2024 and through the date of this report, and although we intend to maintain compliance with all
applicable sanctions and embargo laws, and we endeavor to take precautions reasonably designed to ensure compliance with such laws, it is possible that, in the future, our vessels may
call on ports in Sanctioned Jurisdictions on charterers’ instructions. If such activities result in a violation of sanctions or embargo laws, we could be subject to monetary fines, penalties,
or other sanctions, and our reputation and the market for our common shares could be adversely affected.
The U.S. sanctions and embargo laws and regulations vary in their application, as they do not all apply to the same covered persons or proscribe the same activities, and such
sanctions and embargo laws and regulations may be amended or expanded over time. In particular, the war in Ukraine could result in the imposition of further economic sanctions by the
United States and the European Union against Russia. Current or future counterparties of ours may be affiliated with persons or entities that are or may be, in the future, the subject of
sanctions imposed by the governments of the U.S., European Union, and/or other international bodies. If we determine that such sanctions require us to terminate existing or future
contracts to which we, or our subsidiaries, are party or if we are found to be in violation of such applicable sanctions, our results of operations may be adversely affected or we may
suffer reputational harm.
Although we believe that we have been in compliance with all applicable sanctions and embargo laws and regulations, and intend to maintain such compliance, any such
violation could result in fines, penalties or other sanctions that could severely impact our ability to access U.S. capital markets and conduct our business, and could result in some
investors deciding, or being required, to divest their interest, or not to invest, in us. In addition, certain institutional investors may have investment policies or restrictions that prevent
them from holding securities of companies that have contracts with countries identified by the U.S. government as state sponsors of terrorism. The determination by these investors not
to invest in, or to divest from, our common shares may adversely affect the price at which our common shares trade. Moreover, our charterers may violate applicable sanctions and
embargo laws and regulations as a result of actions that do not involve us or our vessels, and those violations could, in turn, negatively affect our reputation. Investor perception of the
value of our common shares may also be adversely affected by the consequences of war, the effects of terrorism, civil unrest and governmental actions in countries or territories that we
operate in.
We conduct business in China, where the legal system is unpredictable and has inherent uncertainties that could limit the legal protections available to us.
We have four newbuilding contracts with shipyards in China. Further, from time to time, some of our vessels may be chartered to Chinese customers and, on our charterers’
instructions, our vessels may call on Chinese ports. Such contracts, charters and voyages may be subject to regulations in China that may require us to incur new or additional
compliance or other administrative costs and may require that we pay to the Chinese government new taxes or other fees. Applicable laws and regulations in China may not be well-
publicized and may not be known to us or to our counterparties in advance of us or our counterparties becoming subject to them, and the implementation of such laws and regulations
may be inconsistent. Changes in Chinese laws and regulations, including with regards to tax matters, or changes in their implementation by local authorities, could affect our vessels
under construction or our operating vessels, if chartered to Chinese customers or calling to Chinese ports, and could have a material adverse impact on our business, financial condition,
and results of operations.
20

Table of Contents
Governments could requisition our vessels during a period of war or emergency, resulting in loss of earnings.
A government of a vessel’s registry could requisition for title or hire or seize one or more of our vessels. Requisition for title occurs when a government takes control of a vessel
and becomes the owner. A government could also requisition one or more of our vessels for hire. Requisition for hire occurs when a government takes control of a vessel and effectively
becomes the charterer at dictated charter rates. Generally, requisitions occur during a period of war or emergency. Although we would be entitled to compensation in the event of a
requisition of one or more of our vessels, the amount and timing of payment of such compensation is uncertain. Government requisition of one or more of our vessels could have a
material adverse effect on our business, results of operations, cash flows, and financial condition.
Failure to comply with the FCPA could result in fines, criminal penalties, and an adverse effect on our business.
We may operate in a number of countries throughout the world, including countries known to have a reputation for corruption. We are committed to doing business in
accordance with applicable anti-corruption laws and have adopted a code of business conduct and ethics that is consistent and in full compliance with the FCPA. We are subject,
however, to the risk that we, our affiliated entities or our or their respective officers, directors, employees, and agents may take actions determined to be in violation of such anti-
corruption laws, including the FCPA. In addition, actual or alleged violations could damage our reputation and ability to do business. Furthermore, detecting, investigating, and
resolving actual or alleged violations is expensive and can consume significant time and attention of our senior management. Any such violation could result in substantial fines,
sanctions, civil and/or criminal penalties, curtailment of operations in certain jurisdictions, and might adversely affect our business, earnings or financial condition.
The smuggling of drugs or other contraband onto our vessels may lead to governmental claims against us.
We expect that our vessels will call in ports in areas where smugglers attempt to hide drugs and other contraband on vessels, with or without the knowledge of crew members.
To the extent our vessels are found with contraband, whether inside or attached to the hull of our vessel and whether with or without the knowledge of any of our crew, we may face
governmental or other regulatory claims and our vessels may be detained for a prolonged period of time, which could have an adverse effect on our business, results of operations, cash
flows, and financial condition.
Maritime claimants could arrest or attach one or more our vessels, which could interrupt our business or have a negative effect on our cash flows.
Crew members, suppliers of goods and services to a vessel, shippers of cargo, lenders, and other parties may be entitled to a maritime lien against a vessel for unsatisfied debts,
claims, or damages. In many jurisdictions, a maritime lien holder may enforce its lien by arresting or attaching a vessel through foreclosure proceedings. The arrest or attachment of one
or more of our vessels could interrupt our business or require us to pay large sums of funds to have the arrest or attachment lifted, which would have a negative effect on our cash flows.
In addition, in some jurisdictions, such as South Africa, under the “sister-ship” theory of liability, a claimant may arrest both the vessel that is subject to the claimant’s maritime
lien and any “associated” vessel, which is any vessel owned or controlled by the same owner. Claimants could try to assert “sister-ship” liability against one vessel in our fleet for claims
relating to another of our ships.
Changing laws and evolving reporting requirements could have an adverse effect on our business.
Changing laws, regulations, and standards relating to reporting requirements, including the EU General Data Protection Regulation, or GDPR, may create additional compliance
requirements for us.
21

Table of Contents
GDPR broadens the scope of personal privacy laws to protect the rights of EU citizens and requires organizations to report on data breaches within 72 hours and be bound by
more stringent rules for obtaining the consent of individuals on how their data can be used. GDPR was enforced on May 25, 2018, and non-compliance exposes entities to significant
fines or other regulatory claims which could have an adverse effect on our business, financial condition, and operations.
A recent proposal by the U.S. to impose new port fees on Chinese-operated vessels, Chinese-built vessels, non-Chinese companies operating Chinese-built vessels and companies
with newbuilding orders at Chinese shipyards, and to restrict a percentage of U.S. products to being transported on U.S. vessels could have a material adverse effect on our
operations and financial results.
The United States Trade Representative (USTR) has recently put forward significant trade actions under Section 301 of the Trade Act of 1974 with the aim of addressing China's
dominance in the maritime, logistics, and shipbuilding industries. These proposed actions, should they be enacted, have the potential to dramatically increase the port fees and overall
operating expenses for ships calling at U.S. ports. Specifically, the USTR is proposing a series of service fees that would function as direct increases to port-related costs.
The proposal would include a service fee targeting Chinese operators of up to $1.0 million for each instance a vessel operated by a Chinese entity enters a U.S. port. 
Alternatively, the fee could be calculated at a rate of up to $1,000 per dwt of the vessel for each port entrance.
Another proposed service fee focuses on operators with fleets comprised of Chinese-built vessels. Under this proposal, fees could reach as high as $1.5 million each time a
Chinese-built vessel owned by a non-Chinese operator enters a U.S. port. Furthermore, a tiered fee structure is under consideration, based on the proportion of Chinese-built vessels
within an operator’s fleet. Operators with fleets that are 50% or more Chinese-built could face fees of up to $1.0 million dollars per port call; for operators with fleets that are greater than
25% and less than 50% Chinese-built, the fee could be up to $750,000 per port call; and for operators whose fleets have greater than 0% and less than 25% percent Chinese-built vessels,
the port fee could reach up to $500,000 per vessel entrance. Another option being considered is an additional fee of up to $1.0 million per port entrance if 25% or more of an operator’s
fleet is composed of vessels constructed in China.
A further proposed service fee is aimed at operators with newbuilding orders for Chinese vessels. This fee would be based on the percentage of vessels an operator has ordered
from Chinese shipyards or expects to receive from them within the next 24 months. Operators with 50% or more of their vessel orders placed with Chinese shipyards could be charged up
to $1.0 million per vessel entrance. For those with greater than 25% to less than 50% percent of their orders in Chinese shipyards, the fee could reach $750,000, and for those with greater
than 0% to less than 25%, it could be up to $500,000 per vessel entrance. Another possibility is a flat fee of up to $1.0 million dollars per port entrance if 25% or more of an operator’s
total vessel orders over the next 24 months are with Chinese shipyards.
Beyond these direct fee increases, the proposed actions also encompass “restrictions on services” designed to promote the transport of U.S. goods on U.S. vessels. These
restrictions would be phased in over several years, starting with a requirement that a small percentage of U.S. exports be transported on U.S.-flagged vessels by U.S. operators,
escalating to a larger percentage over time, with a portion specifically mandated to be on U.S.-flagged and U.S.-built vessels. Another proposed restriction would require U.S. goods to
be exported on U.S.-flagged, U.S.-built vessels, with exceptions only granted if operators demonstrate that at least 20% of U.S. products per calendar year are transported on U.S.-
flagged and U.S.-built vessels. These restrictions could reduce the demand for non-U.S. built vessels, including ours.
The actual implementation of these proposed actions remains uncertain. The final form, scope, and effective dates of any measures that are ultimately adopted may significantly
differ from the current proposals. Additionally, specifics, such as applicability to sale and leaseback arrangements with Chinese leasing financiers, has not been clarified. In a sale and
leaseback arrangement, the Chinese leasing financiers are the registered owners of the vessels. Furthermore, retaliatory measures from China or other nations could further compound
disruptions and cost increases within the global shipping industry.
22

Table of Contents
In addition to direct port fee increases, retaliatory actions by China or other countries could indirectly impact port-related costs. For example, China could impose retaliatory port
fees or restrictions on vessels of non-Chinese origin calling at Chinese ports, which could disrupt global shipping patterns and potentially increase congestion and costs at ports
worldwide, including U.S. ports.
Of the 6 vessels we currently operate, none were constructed in China. However, our four newbuilding vessels are under construction at Chinese shipyards. Further, we have
already entered into, and we may enter in the future into additional sale and leaseback transactions with Chinese financial institutions. Additionally, we may enter into further contracts
for the purchase of secondhand vessels constructed in China or shipbuilding contracts for vessels to be constructed in Chinese shipyards. Given the potential magnitude of these
proposed port-related fees and the many uncertainties surrounding their implementation, it is not possible at this time to fully predict the ultimate financial impact.  However, if measures
similar to those that have been proposed are implemented, port fees for our vessels or vessels we charter and our operating costs for voyages calling at U.S. ports could materially
increase. Even though port fees are typically borne by the charterer, if port fees are assessed due to our ownership of the relevant vessel, it is possible that charterers may demand that
we bear these costs or otherwise reduce the applicable charter rate. This, in turn, could significantly reduce our profitability, negatively impact our ability to compete effectively, and
materially and adversely affect our operations and financial results.
Company Specific Risk Factors
The market values of our vessels are highly volatile and may decline, which could limit the amount of funds that we can borrow and trigger breaches of certain financial covenants
under our future loan facilities.
The market values of our vessels are related to prevailing charter rates. While the market values of vessels and the charter market have a very close relationship as the charter
market moves from trough to peak, the time lag between the effects of charter rates on market values of ships can vary. The market values of our vessels have generally experienced high
volatility, and you should expect the market value of our vessels to fluctuate depending on a number of factors, including:
•
the prevailing level of charter rates;
•
general economic and market conditions affecting the shipping industry;
•
competition from other shipping companies and other modes of transportation;
•
the types, sizes, and ages of vessels;
•
the supply of and demand for vessels;
•
applicable governmental or other regulations;
•
exchange rate levels;
•
the price of steel;
•
number of tankers scrapped;
•
the need to upgrade secondhand and previously owned vessels as a result of charterer requirements;
•
technological advances in vessel design or equipment or otherwise;
•
fuel efficiency and level of air emissions;
•
the cost of newbuildings; and
•
shipyard capacity and slot availability.
23

Table of Contents
Dislocations in the supply of and demand for tankers as a result of the war in Ukraine and sanctions on Russian exports have resulted in greatly increased volatility in tanker
asset prices. Furthermore, the ongoing war between Israel and Hamas and the Houthi rebel attacks on shipping in the Red have an uncertain impact on the supply and demand for
tankers. At times when we have loans outstanding with covenants based on vessels’ market values, if the market values of our vessels decline further, we may not be in compliance with
certain covenants contained in such loan facilities, and we may not be able to refinance our debt or obtain additional financing or incur debt on terms that are acceptable to us or at all.
As of December 31, 2024, we had $47.7 million outstanding under our loan facilities and were in compliance with all our loan covenants. In the future, if we are not in compliance with the
covenants in our loan facilities or are unable to obtain waivers or amendments or otherwise remedy the relevant breaches, our lenders under the facilities could accelerate our debt and
foreclose on our fleet. We may not be successful in obtaining any such waiver or amendment, and we may not be able to refinance our debt or obtain additional financing. Moreover, our
loan facilities, as amended or pursuant to any waiver, and any refinancing or additional financing, may be more expensive and carry more onerous terms than those in our existing debt
agreements.
In addition, if the book value of a vessel is impaired due to unfavorable market conditions, or if a vessel is sold at a price below its book value, we would incur a loss that could
adversely affect our operating results.
Our business, operating results, financial condition, and growth will depend on our ability to successfully charter our vessels, for which we will face substantial competition.
The process of obtaining new charters is highly competitive and generally involves an intensive screening process and competitive bids, and often extends for several months.
Charters are awarded based upon a variety of factors relating to the vessel operator, including:
•
shipping industry relationships and reputation for customer service and safety;
•
the experience and quality of ship operations, including cost-effectiveness;
•
quality and experience of the seafaring crew;
•
the ability to finance vessels at competitive rates and financial stability generally;
•
relationships with shipyards and the ability to get suitable berths;
•
the technical specifications of the vessel;
•
construction management experience, including the ability to obtain on-time delivery of new ships according to customer specifications;
•
willingness to accept operational risks pursuant to the charter, such as allowing termination of the charter for force majeure events; and
•
competitiveness of the bid in terms of overall price.
We expect substantial competition for providing tanker vessel transportation services from a number of experienced companies, including state-sponsored entities and major
shipping companies. Many of these competitors have significantly greater financial resources than we do and can therefore operate larger fleets and may be able to offer better charter
rates. As a result of these factors, we may be unable to attract new customers or secure charters at profitable charter rates, if at all, which will impede our operating results, financial
condition, and growth.
Furthermore, if our vessels become available for employment under new charters during periods when charter rates are at depressed levels, we may have to employ our tanker
vessels at depressed charter rates, if we are able to secure employment for our vessels at all, which would lead to reduced or volatile earnings. Future charter rates may not be at a level
that will enable us to operate our vessels profitably.
24

Table of Contents
The failure of our counterparties to meet their obligations to us under any vessel purchase agreements or charter agreements could cause us to suffer losses or otherwise adversely
affect our business.
Generally, we intend to selectively employ our vessels in the spot market under short- to medium-term time charters or voyage charters and pool arrangements, which exposes
us to counterparty risks. The ability and willingness of each of our counterparties to perform its obligations under a vessel purchase agreement or charter agreement with us will depend
on a number of factors that are beyond our control and may include, among other things, general economic conditions, the condition of the shipping market, and the overall financial
condition of the counterparty, charter rates received for specific types of vessels, work stoppages or other labor disturbances and various expenses. From time to time, we may enter into
agreements to acquire vessels, and if the seller of a vessel fails to deliver a vessel to us as agreed, or if we cancel a purchase agreement because a seller has not met its obligations, this
may have a material adverse effect on our business.
The combination of a reduction of cash flow resulting from declines in world trade, a reduction in borrowing bases under reserve-based credit facilities, and the lack of
availability of debt or equity financing may result in a significant reduction in the ability of charterers to make charter payments to us. In addition, in depressed market conditions, there
have been reports of charterers renegotiating their charters or defaulting on their obligations under charters, and our future customers may fail to pay charter hire or attempt to
renegotiate charter rates. Furthermore, it is possible that third parties with whom we have charter contracts may be impacted by the war between Russia and Ukraine or the resulting
sanctions, which could adversely affect their ability to perform. If our future charterers fail to meet their obligations to us or attempt to renegotiate our future charter agreements, it may
be difficult to secure substitute employment for such vessels, and any new charter arrangements we secure may be at lower rates. As a result, we could sustain significant losses, which
could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
Delays or defaults by the shipyards in the construction of newbuildings could increase our expenses and diminish our net income and cash flows.
We currently have contracts for four newbuilding vessels and we may enter into contracts for newbuilding vessels in the future. Vessel construction projects are generally
subject to risks of delay that are inherent in any large construction project, which may be caused by numerous factors, including shortages of equipment, materials or skilled labor,
unscheduled delays in the delivery of ordered materials and equipment or shipyard construction, failure of equipment to meet quality and/or performance standards, financial or
operating difficulties experienced by equipment vendors or the shipyard, unanticipated actual or purported change orders, inability to obtain required permits or approvals, design or
engineering changes and work stoppages and other labor disputes, adverse weather conditions or any other events of force majeure. Significant delays could adversely affect our
financial position, results of operations and cash flows. Additionally, failure to complete a project on time may result in the delay of revenue from that vessel, and we may continue to
incur costs and expenses related to delayed vessels, such as supervision expenses.
We may be unable to locate suitable vessels or dispose of vessels at reasonable prices, which would adversely affect our ability to operate our business.
There are periods when we may be interested in further growing our fleet through selective acquisitions. Our business strategy is dependent on identifying and purchasing
suitable vessels. Changing market and regulatory conditions may limit the availability of suitable vessels because of customer preferences or because they are not or will not be
compliant with existing or future rules, regulations, and conventions. Additional vessels of the age and quality we desire may not be available for purchase at prices we are prepared to
pay or at delivery times acceptable to us, and we may not be able to dispose of vessels at reasonable prices, if at all. If we are unable to purchase and dispose of vessels at reasonable
prices in accordance with our business strategy or in response to changing market and regulatory conditions, our business would be adversely affected.
Our purchasing and operating secondhand vessels, and the aging of our fleet may result in increased operating costs and vessels off-hire, which could adversely affect our earnings.
While we will typically inspect secondhand vessels before purchase, this does not provide us with the same knowledge about their condition that we would have had if these
vessels had been built for and operated exclusively by us. Accordingly, we may not discover defects or other problems with such vessels before purchase. Any such hidden defects or
problems, when detected, may be expensive to repair, and if not detected, may result in accidents or other incidents for which we may become liable to third parties. In addition, when
purchasing secondhand vessels, we do not receive the benefit of any builder warranties if the vessels we buy are older than one year.
25

Table of Contents
In general, the costs to maintain a vessel in good operating condition increase with the age of the vessel. Older vessels are typically less fuel efficient than more recently
constructed vessels due to improvements in engine technology. Potential charterers may also choose not to charter older vessels. Governmental regulations and safety and other
equipment standards related to the age of vessels may require expenditures for alterations or the addition of new equipment to some of our vessels and may restrict the type of activities
in which these vessels may engage. We cannot assure you that, as our vessels age, market conditions will justify those expenditures or enable us to operate our vessels profitably
during the remainder of their useful lives. As a result, regulations and standards could have a material adverse effect on our business, financial condition, results of operations, and cash
flows.
There is a lack of historical operating history provided with our secondhand vessel acquisitions, and profitable operation of the vessels will depend on our skill and expertise.
Consistent with shipping industry practice, other than inspection of the physical condition of the vessels and examinations of classification society records, neither we, nor our
in-house manager, will conduct any historical financial due diligence process at times when we acquire vessels. Accordingly, neither we, nor our in-house manager, will obtain the
historical operating data for any secondhand vessels we may acquire in the future from the sellers because that information is not material to our decision to make acquisitions, nor do
we believe it would be helpful to potential investors in assessing our business or profitability. Most vessels are sold under a standardized agreement, which, among other things,
provides the buyer with the right to inspect the vessel and the vessel’s classification society records. The standard agreement does not give the buyer the right to inspect, or receive
copies of, the historical operating data of the vessel. Prior to the delivery of a purchased vessel, the seller typically removes from the vessel all records, including past financial records
and accounts related to the vessel. In addition, the technical management agreement between the seller’s technical manager and the seller is automatically terminated and the vessel’s
trading certificates are revoked by its flag state following a change in ownership.
Consistent with shipping industry practice, we treat the acquisition of a vessel (whether acquired with or without charter) as the acquisition of an asset rather than a business.
Although vessels are generally acquired free of charter, we have acquired and may also in the future acquire some vessels with time charters. Where a vessel has been under a voyage
charter, the vessel is delivered to the buyer free of charter, and it is rare in the shipping industry for the last charterer of the vessel in the hands of the seller to continue as the first
charterer of the vessel in the hands of the buyer. In most cases, when a vessel is under time charter, and the buyer wishes to assume that charter, the vessel cannot be acquired without
the charterer’s consent and the buyer’s entering into a separate direct agreement with the charterer to assume the charter. The purchase of a vessel itself does not transfer the charter
because it is a separate service agreement between the vessel owner and the charterer.
Due to the differences between the prior owners of these vessels and the Company with respect to the routes we expect to operate, our future customers, the cargoes we expect
to carry, the freight rates and charter rates we will charge in the future, and the costs we expect to incur in operating our vessels, we believe that our operating results will be significantly
different from the operating results of the vessels while owned by the prior owners. The profitable operation of the vessels will depend on our skill and expertise. If we are unable to
operate the vessels profitably, it may have an adverse effect on our financial condition, results of operations, and cash flows.
Technical innovation and technical quality and efficiency requirements from our customers could reduce our charter hire income and the value of our vessels.
Our customers, in particular those in the oil industry, have a high and increasing focus on quality and compliance standards with their suppliers across the entire supply chain,
including the shipping and transportation segment. Our continued compliance with these standards and quality requirements is vital for our operations. The charter rates and the value
and operational life of a vessel are determined by a number of factors, including the vessel’s efficiency, operational flexibility, and physical life. Efficiency includes speed, fuel economy,
and the ability to load and discharge cargo quickly. Flexibility includes the ability to enter harbors, utilize related docking facilities, and pass through canals and straits. The length of a
vessel’s physical life is related to its original design and construction, its maintenance, and the impact of the stress of operations. If new vessels are built that are more efficient or more
flexible or have longer physical lives than our vessels, competition from these more technologically advanced vessels could adversely affect the amount of charter hire payments we
receive for our vessels, and the resale value of our vessels could significantly decrease. This could have an adverse effect on our results of operations, cash flows, financial condition,
and ability to pay dividends.
26

Table of Contents
The Public Company Accounting Oversight Board inspection of our independent accounting firm could lead to findings in our auditor’s reports and challenge the accuracy of our
published audited consolidated financial statements.
Auditors of U.S. public companies are required by law to undergo periodic Public Company Accounting Oversight Board, or PCAOB, inspections that assess their compliance
with U.S. law and professional standards in connection with the performance of audits of financial statements filed with the SEC. For several years, certain European Union countries,
including Greece, did not permit the PCAOB to conduct inspections of accounting firms established and operating in such European Union countries, even if they were part of major
international firms. Accordingly, unlike most U.S. public companies, the PCAOB was prevented from evaluating our auditor’s performance of audits and its quality control procedures,
and, unlike stockholders of most U.S. public companies, we, and our stockholders, were deprived of the possible benefits of such inspections. Since 2015, Greece has agreed to allow the
PCAOB to conduct inspections of accounting firms operating in Greece. In the future, such PCAOB inspections could result in findings in our auditor’s quality control procedures,
question the validity of the auditor’s reports on our published consolidated financial statements and the effectiveness of our internal control over financial reporting, and cast doubt
upon the accuracy of our published audited financial statements.
Our ability to obtain debt financing in the future may be dependent on the performance of our then-existing charters and the creditworthiness of our charterers.
The actual or perceived credit quality of our charterers, and any defaults by them, may materially affect our ability to obtain the additional capital resources that we will require
to purchase additional vessels in the future or may significantly increase our costs of obtaining such capital. Our inability to obtain financing at all or at a higher than anticipated cost
may materially affect our results of operation and our ability to implement our business strategy.
We may be unable to attract and retain key management personnel and other employees in the shipping industry, which may negatively impact the effectiveness of our management
and results of operations.
Our success depends to a significant extent upon the abilities and efforts of our management team, the Chairperson of the Board, Aliki Paliou, and our Chief Executive Officer,
Director and Secretary, Andreas Michalopoulos. Our success will depend upon our ability to retain key members of our management team and to hire new members as may be necessary.
The loss of any of these individuals could adversely affect our business prospects and financial condition. Difficulty in hiring and retaining replacement personnel could adversely
affect our business, results of operations, and ability to pay dividends. We do not intend to maintain “key man” life insurance on any of our officers or other members of our
management team.
Aliki Paliou, the Chairperson of the Board, controls a majority of voting power over matters on which our shareholders are entitled to vote and, accordingly, may exert
considerable influence over us and may have interests that are different from the interests of our other shareholders.
Aliki Paliou may be deemed to beneficially own 1,314,792 Series C Preferred Shares, and through the beneficial ownership of such Series C Preferred Shares currently controls
approximately 88% of the voting power of our capital stock. As a result, Ms. Paliou has the power to exert considerable influence over our actions through her ability to control the
outcome of any matter submitted to a vote of our shareholders, including the election of our directors and other significant corporate actions. The Series C Preferred Shares bear superior
voting rights to our common shares, are entitled to vote on all matters on which our shareholders are entitled to vote, and are convertible into our common shares. The superior voting
rights of our Series C Preferred Shares may limit our common shareholders’ ability to influence corporate matters. The interests of the holders of the Series C Preferred Shares may
conflict with the interests of our common shareholders and, as a result, the holders of our capital stock may approve actions that our common shareholders do not view as beneficial.
Any such conflicts of interest could adversely affect our business, financial condition, and results of operations, and the trading price of our common shares. For additional information
regarding the terms of our Series C Preferred Shares, please see “Description of Securities,” attached hereto as Exhibit 2.5 and incorporated by reference herein.
27

Table of Contents
Our Chief Financial Officer participates in business activities not associated with us and does not devote all of his time to our business, which may create conflicts of interest and
hinder our ability to operate successfully.
Anthony Argyropoulos, our Chief Financial Officer, participates in business activities not associated with us and, as a result, may devote less time to us than if he was not
engaged in other business activities. This may create conflicts of interest in matters involving or affecting us and our customers, and it is not certain that any of these conflicts of
interest will be resolved in our favor. This could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
We are currently subject to litigation and we may be subject to similar or other litigation in the future.
We, and our former Chief Executive Officer, were defendants in a purported class action lawsuit brought in 2017 which was dismissed in November 2024. The lawsuit alleged
violations of the Securities Exchange Act of 1934, as amended. In addition, we, our Chief Executive Officer, the Chairperson of the Board, five former directors of the Board, and two
entities affiliated with our Chief Executive Officer and Chairperson of the Board were named as defendants in a lawsuit commenced on October 27, 2023 in New York State Supreme Court,
County of New York, alleging, among other things, violations of fiduciary duties by the named defendants in connection with the exchange offer commenced in December 2021. In
August 2024, that lawsuit was dismissed, and the plaintiff filed a substantially similar complaint in the High Court of the Republic of the Marshall Islands against the same defendants
that had been named in the New York lawsuit. For more information see “Item 8. Financial information—Legal Proceedings.”
While we believe these claims to be without merit and intend to defend these lawsuits vigorously, we cannot predict their outcome. Also, costs associated with the litigation are
unpredictable, and could increase our general administrative expenses above their current levels. Furthermore, we may, from time to time, be a party to other litigation in the normal
course of business. Monitoring and defending against legal actions, whether or not meritorious, is time-consuming for our management and detracts from our ability to fully focus our
internal resources on our business activities. Uncertainty regarding such pending legal actions, even if eventually resolved in our favor, could have an adverse effect on our ability to
obtain financing, raise capital, or otherwise execute our business strategy. In addition, legal fees and costs incurred in connection with such activities may be significant, and we could in
the future be subject to judgments or enter into settlements of claims for significant monetary damages. A decision adverse to our interests could result in the payment of substantial
damages and could have a material adverse effect on our cash flow, results of operations, and financial position.
With respect to any litigation, our insurance may not reimburse us or may not be sufficient to reimburse us for the expenses or losses we may suffer in contesting and
concluding such a lawsuit. Substantial litigation costs, including the substantial self-insured retention that we are required to satisfy before any insurance is applied to the claim, or an
adverse result in any litigation may adversely impact our business, operating results, or financial condition.
We expect to continue to operate substantially outside the United States, which will expose us to political and governmental instability, which could harm our operations.
We expect that our operations will continue to be primarily conducted outside the United States and may be adversely affected by changing or adverse political and
governmental conditions in the countries where our vessels are flagged or registered and in the regions where we otherwise engage in business. Any disruption caused by these factors
may interfere with the operation of our vessels, which could harm our business, financial condition, and results of operations. Past political efforts to disrupt shipping in these regions,
particularly in the Arabian Gulf, have included attacks on ships and mining of waterways. In addition, terrorist attacks outside this region and continuing hostilities in the Middle East
and globally may lead to additional armed conflicts or to further acts of terrorism and civil disturbance in the United States and elsewhere. Any such attacks or disturbances may disrupt
our business, increase vessel operating costs, including insurance costs, and adversely affect our financial condition and results of operations. Our operations may also be adversely
affected by expropriation of vessels, taxes, regulation, tariffs, trade embargoes, economic sanctions, disruption of or limit to trading activities, or other adverse events or circumstances
affecting the countries and regions in which we operate or may operate in the future.
28

Table of Contents
We generate all of our revenues in U.S. dollars and incur a portion of our expenses in other currencies and, therefore, exchange rate fluctuations could have an adverse impact on
our results of operations.
We generate all of our revenues in U.S. dollars and incur a portion of our expenses in currencies other than the dollar. This difference could lead to fluctuations in net income
due to changes in the value of the U.S. dollar relative to the other currencies, in particular the Euro. Expenses incurred in foreign currencies against which the U.S. dollar falls in value can
increase, decreasing our revenues. Further declines in the value of the dollar could lead to higher expenses payable by us.
While we historically have not mitigated the risk associated with exchange rate fluctuations through the use of financial derivatives, we may employ such instruments from time
to time in the future in order to minimize this risk. Our use of financial derivatives would involve certain risks, including the risk that losses on a hedged position could exceed the
nominal amount invested in the instrument and the risk that the counterparty to the derivative transaction may be unable or unwilling to satisfy its contractual obligations, which could
have an adverse effect on our results.
Volatility of SOFR could affect our profitability, earnings, and cash flow.
The majority of our facility agreements and sale and leaseback agreements bear floating rate interest linked either to SOFR or Term SOFR. An increase in SOFR would affect the
amount of interest payable under our existing debt agreements, which, in turn, could have an adverse effect on our profitability, earnings, cash flow, and ability to pay dividends.
Furthermore, as a secured rate backed by government securities, SOFR may be less likely to correlate with the funding costs of financial institutions. As a result, parties may seek to
adjust spreads relative to SOFR in underlying contractual arrangements. If SOFR performs differently than expected or if our lenders insist on a different reference rate to replace SOFR,
that could increase our borrowing costs (and administrative costs to reflect the transaction), which would have an adverse effect on our profitability, earnings, and cash flows.
Alternative reference rates may behave in a similar manner or have other disadvantages or advantages in relation to our future indebtedness and the transition to SOFR or other
alternative reference rates in the future could have a material adverse effect on us.
In order to manage our exposure to interest rate fluctuations, we may, from time to time, use interest rate derivatives to effectively fix some of our floating rate debt obligations.
No assurance can be given, however, that the use of these derivative instruments, if any, may effectively protect us from adverse interest rate movements. The use of interest rate
derivatives may affect our results through mark to market valuation of these derivatives. Also, adverse movements in interest rate derivatives may require us to post cash as collateral,
which may impact our free cash position, and have the potential to cause us to breach covenants in our loan agreements that require maintenance of certain financial positions and
ratios.
We may have to pay tax on United States source income, which would reduce our earnings.
Under the United States Internal Revenue Code of 1986, or the Code, 50% of the gross shipping income of a vessel owning or chartering corporation, such as us and our
subsidiaries, that is attributable to transportation that begins or ends, but that does not both begin and end, in the United States may be subject to a 4% United States federal income tax
without allowance for deduction, unless that corporation qualifies for exemption from tax under Section 883 of the Code, or Section 883, and the applicable Treasury Regulations
promulgated thereunder.
We intend to take the position that we qualified for this statutory tax exemption for U.S. federal income tax return reporting purposes for our 2024 taxable year. However, there
are factual circumstances that could cause us to lose the benefit of this tax exemption for any future taxable year and thereby become subject to U.S. federal income tax on our U.S.-
source shipping income. Due to the factual nature of the issues involved, there can be no assurances on our tax-exempt status.
If we are not entitled to exemption under Section 883 for any taxable year, we would be subject for those years to an effective 2% U.S. federal income tax on the shipping income
we derive during the year, which is attributable to the transport of cargoes to or from the United States. The imposition of this taxation would have a negative effect on our business and
would result in decreased earnings available for distribution to our shareholders.
29

Table of Contents
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.
A foreign corporation will be treated as a “passive foreign investment company,” or PFIC, for U.S. federal income tax purposes if either (1) at least 75% of its gross income for
any taxable year consists of certain types of “passive income”, or (2) at least 50% of the average value of the corporation’s assets produce or are held for the production of those types
of “passive income.” For purposes of these tests, cash will be treated as an asset held for the production of passive income. For purposes of these tests, “passive income” generally
includes dividends, interest, and gains from the sale or exchange of investment property and rents and royalties other than those received from unrelated parties in connection with the
active conduct of a trade or business. For purposes of these tests, income derived from the performance of services does not constitute “passive income.” U.S. holders of stock in a
PFIC are subject to a disadvantageous U.S. federal income tax regime with respect to the income derived by the PFIC, the distributions they receive from the PFIC and the gain, if any,
they derive from the sale or other disposition of their stock in the PFIC.
Whether we will be treated as a PFIC will depend upon our method of operation. In this regard, we intend to treat the gross income we derive or are deemed to derive from time
or voyage chartering activities as services income rather than rental income. Accordingly, we believe that any income from time or voyage chartering activities will not constitute
“passive income,” and any assets that we may own and operate in connection with the production of that income will not constitute passive assets. However, any gross income that we
may be deemed to have derived from bareboat chartering activities will be treated as rental income and thus will constitute “passive income,” and any assets that we may own and
operate in connection with the production of that income will constitute passive assets. There is substantial legal authority supporting this position consisting of case law and Internal
Revenue Service, or IRS, pronouncements concerning the characterization of income derived from time charters and voyage charters as services income. However, it should be noted
that there is also authority which characterizes time charter income as rental income rather than services income for other tax purposes. Accordingly, no assurance can be given that the
IRS or a court of law will accept our position with regard to our status from time to time as a PFIC, and there is a risk that the IRS or a court of law could determine that we are or have
been a PFIC for a particular taxable year.
If we are or have been a PFIC for any taxable year, U.S. holders of our common shares will face certain adverse U.S. federal income tax consequences and information reporting
obligations. Under the PFIC rules, unless such U.S. holders make certain elections available under the Code (which elections could themselves have certain adverse consequences for
such U.S. holders), such U.S. holders would be liable to pay U.S. federal income tax at the then-prevailing income tax rates on ordinary income plus interest upon excess distributions and
upon any gain from the disposition of our common shares, as if the excess distribution or gain had been recognized ratably over such U.S. holder’s holding period for such common
shares. See “Item 10. Additional Information—E. Taxation—United States Federal Income Tax Considerations—United States Federal Income Taxation of U.S. Holders—PFIC Status and
Significant Tax Consequences” for a more comprehensive discussion of the U.S. federal income tax consequences to U.S. holders of our common shares if we are or were to be treated as
a PFIC.
We may be subject to increased premium payments, or calls, because we obtain some of our insurance through protection and indemnity associations.
We may be subject to increased premium payments, or calls, in amounts based on our claim records as well as the claim records of other members of the protection and
indemnity associations in the International Group of P&I Clubs, or the International Group, which is comprised of 13 mutual protection and indemnity associations and insures
approximately 90% of the world’s commercial tonnage and through which we receive insurance coverage for tort liability, including pollution-related liability, as well as actual claims.
Amounts we may be required to pay as a result of such calls will be unavailable for other purposes.
30

Table of Contents
The international nature of our operations may make the outcome of any bankruptcy proceedings difficult to predict.
We are incorporated under the laws of the Republic of the Marshall Islands and we conduct operations in countries around the world. The Marshall Islands has passed an act,
or the Implementation Act, implementing the U.N. Commission on Internal Trade Law (UNCITRAL) Model Law on Cross-Border Insolvency, or the Model Law. The adoption of the
Model Law is intended to implement effective mechanisms for dealing with issues related to cross-border insolvency proceedings and encourages cooperation and coordination
between jurisdictions. Notably, the Model Law does not alter the substantive insolvency laws of any jurisdiction and does not create a bankruptcy code in the Marshall Islands. Instead,
the Implementation Act allows for the recognition by the Marshall Islands of foreign insolvency proceedings, the provision of foreign creditors with access to courts in the Marshall
Islands, and the cooperation with foreign courts. Consequently, in the event of any bankruptcy, insolvency, liquidation, dissolution, reorganization, or similar proceeding involving us or
any of our subsidiaries, bankruptcy laws other than those of the United States could apply. If we become a debtor under U.S. bankruptcy law, bankruptcy courts in the United States may
seek to assert jurisdiction over all of our assets, wherever located, including property situated in other countries. There can be no assurance, however, that we would become a debtor in
the United States, or that a U.S. bankruptcy court would be entitled to, or accept, jurisdiction over such a bankruptcy case, or that courts in other countries that have jurisdiction over us
and our operations would recognize a U.S. bankruptcy court’s jurisdiction if any other bankruptcy court would determine it had jurisdiction.
A cyber-attack could materially disrupt our business.
We rely on information technology systems and networks in our operations and administration of our business. Information systems are vulnerable to security breaches by
computer hackers and cyber terrorists. The safety and security of our vessels as well as our business operations could be targeted by individuals or groups seeking to sabotage or
disrupt our information technology systems and networks or to steal data. Despite our cybersecurity measures, a successful cyber-attack, including as a result of spam, targeted
phishing-type emails, and ransomware attacks, or other breaches of or significant interruption or failure of or significant interruption or failure of our information technology systems,
could materially disrupt our operations, including the safety of our operations, or lead to the unauthorized release of information or alteration of information in our systems. Any such
attack or other breach of our information technology systems could have a material adverse effect on our business and results of operations. In addition, the unavailability of the
information systems or the failure of these systems to perform as anticipated for any reason could disrupt our business and could result in decreased performance and increased
operating costs, causing our business and results of operations to suffer. Any significant interruption or failure of our information systems or any significant breach of security could
adversely affect or disrupt our business and could result in decreased performance and increased operating costs, causing our business and operating results to suffer.
Additionally, recent action by the IMO’s Maritime Safety Committee and United States agencies indicates that cybersecurity regulations for the maritime industry are likely to be
further developed in the near future in an attempt to combat cybersecurity threats. Any changes in the nature of cyber threats might require us to adopt additional procedures for
monitoring cybersecurity, which could require additional expenses and/or capital expenditures. The war between Russia and Ukraine has been accompanied by cyber-attacks against the
Ukrainian government and other countries in the region. It is possible that these attacks could have collateral effects on additional critical infrastructure and financial institutions
globally, which could adversely affect our operations. We rely on industry-accepted security measures and technology to securely maintain confidential and proprietary information
maintained on our information systems. However, these measures and technology may not adequately prevent security breaches and, therefore, it is difficult to assess the likelihood of
such threat and any potential impact at this time.
In July 2023, the SEC adopted rules requiring the mandatory disclosure of material cybersecurity incidents, as well as cybersecurity governance and risk management practices.
A failure to disclose could result in the imposition of injunctions, fines and other penalties by the SEC. Complying with these obligations could cause us to incur substantial costs and
could increase negative publicity surrounding any cybersecurity incident.
If we do not identify suitable vessels for acquisition or successfully integrate any acquired vessels, we may not be able to grow or effectively manage our growth.
One of our strategies is to continue to grow by expanding our operations and adding tanker vessels to our fleet. Our future growth will depend upon a number of factors, some
of which may not be within our control. These factors include our ability to:
31

Table of Contents
•
identify suitable vessels for acquisitions at attractive prices, which may not be possible if asset prices rise too quickly;
•
obtain financing for our existing and new operations;
•
manage relationships with customers and suppliers;
•
identify businesses engaged in managing, operating, or owning tanker vessels for acquisitions or joint ventures;
•
integrate any acquired vessels successfully with our then-existing operations;
•
attract, hire, train, integrate, and retain qualified, highly trained personnel and crew to manage and operate our growing business and fleet;
•
identify additional new markets;
•
enhance our customer base;
•
improve our operating, financial, and accounting systems and controls; and
•
obtain required financing for our existing and new operations.
Our failure to effectively identify, purchase, develop, and integrate any new vessels could adversely affect our business, financial condition, and results of operations. The
number of employees that perform services for us and our current operating and financial systems may not be adequate as we implement our plan to expand the size of our fleet, and we
may not be able to effectively hire more employees, or adequately improve those systems. We may incur unanticipated expenses as an operating company. Our current operating and
financial systems may not be adequate as we implement our plan to expand the size of our fleet. Finally, additional acquisitions may require additional equity issuances, which may dilute
our common shareholders if issued at lower prices than the price they acquired their shares or debt issuances (with amortization payments), both of which could reduce our cash flow. If
we are unable to execute the points noted above, our financial condition may be adversely affected.
Growing any business by acquisition presents numerous risks such as undisclosed liabilities and obligations, difficulty in obtaining additional qualified personnel and
managing relationships with customers and suppliers and integrating newly acquired operations into existing infrastructures. The expansion of our fleet may impose significant
additional responsibilities on our management and staff, and the management and staff of our commercial and technical managers, and may necessitate that we, and they, increase the
number of personnel. We cannot give any assurance that we will be successful in executing our growth plans or that we will not incur significant expenses and losses in connection with
our future growth.
Inflation could adversely affect our operating results and financial condition.
Inflation could have an adverse impact on our operating results and, subsequently, on our financial condition both directly through the increase of various costs necessary for
the operation of our vessels such as crew, repairs, and materials, and indirectly through its adverse impact on the world economy in terms of increasing interest rates and slowing global
growth. If inflationary pressures intensify further, we may be unable to raise our charter rates enough to offset the increasing costs of our operations, which would decrease our profit
margins. Inflation may also raise our costs of capital, which would result in the deterioration of our financial condition.
The IMO 2020 regulations may cause us to incur substantial costs and procure low-sulfur fuel oil directly on the wholesale market for storage at sea and onward consumption on
our vessels.
Effective January 1, 2020, the IMO implemented a new regulation for a 0.50% global sulfur cap on emissions from vessels (the “IMO 2020 Regulations”). Under this global cap,
vessels are required to use marine fuels with a sulfur content of no more than 0.50% (as compared to the former regulations specifying a maximum of 3.50% sulfur content) in an effort to
reduce the emission of sulfur oxide into the atmosphere.
32

Table of Contents
We have incurred increased costs to comply with these revised standards. Additional or new conventions, laws, and regulations may be adopted that could require, among
others, the installation of expensive emission control systems and could adversely affect our business, results of operations, cash flows, and financial condition.
As of January 1, 2020, our fleet has been burning IMO compliant fuels except for our vessel P. Aliki that was acquired with an approved exhaust gas cleaning system for the
compliance with the existing sulfur emission regulations. Low sulfur fuel is more expensive than standard marine fuel containing 3.5% sulfur content and may become more expensive or
difficult to obtain as a result of increased demand. If the cost differential between low sulfur fuel and high sulfur fuel is significantly higher than anticipated, or if low sulfur fuel is not
available at ports on certain trading routes, it may not be feasible or competitive to operate our vessels on certain trading routes without installing scrubbers or without incurring
deviation time to obtain compliant fuel. Scrubbers may not be available to be installed on such vessels at a favorable cost or at all if we seek them at a later date.
Furthermore, although as of the date of this annual report, over two years has passed since the IMO 2020 Regulations became effective, it is uncertain how the availability of
high-sulfur fuel around the world will be affected by the implementation of the IMO 2020 Regulations, and both the price of high-sulfur fuel generally and the difference between the cost
of high-sulfur fuel and that of low-sulfur fuel are also uncertain. Scarcity in the supply of high-sulfur fuel, or a lower-than-anticipated difference in the costs between the two types of
fuel, may cause us to fail to recognize anticipated benefits from installing scrubbers.
Fuel is a significant, if not the largest, expense in our shipping operations when vessels are under voyage charter and is an important factor in negotiating charter rates. Our
operations and the performance of our vessels, and as a result, our results of operations, face a host of challenges. These include concerns over higher costs, international compliance,
and the availability of low-sulfur fuel at key international bunkering hubs such as Rotterdam and Singapore. In addition, we take seriously concerns raised in Europe that certain blends
of low-sulfur fuels can emit greater amounts of harmful black carbon than the high-sulfur fuels they are meant to replace. Costs of compliance with these and other related regulatory
changes may be significant and may have a material adverse effect on our future performance, results of operations, cash flows, and financial position. As a result, an increase in the
price of fuel beyond our expectations may adversely affect our profitability at the time of charter negotiation.
While we carry cargo insurance to protect us against certain risks of loss of or damage to the procured commodities, we may not be adequately insured to cover any losses from
such operational risks, which could have a material adverse effect on us. Any significant uninsured or under-insured loss or liability could have a material adverse effect on our
business, results of operations, cash flows and financial condition, and our available cash.
Climate change and greenhouse gas restrictions may adversely impact our operations and markets.
Due to concern over the risk of climate change, a number of countries and the IMO have adopted, or are considering the adoption of, regulatory frameworks to reduce
greenhouse gas emissions. These regulatory measures may include, among others, the adoption of cap and trade regimes (of which there are around forty five in the world thus far),
carbon taxes, increased efficiency standards, and incentives, or mandates for renewable energy. In July 2023, the IMO adopted a strategy to reduce greenhouse gas emissions from
ships. The initial strategy identifies levels of ambition to reducing greenhouse gas emissions, including (1) decreasing the carbon intensity from ships through the implementation of
further phases of the EEDI for new ships; (2) reducing carbon dioxide emissions per transport work, as an average across international shipping, by at least 40% by 2030, pursuing
efforts towards 70% by 2050, compared to 2008 emission levels; and (3) reducing the total annual greenhouse emissions by at least 50% by 2050 compared to 2008 while pursuing efforts
towards phasing them out entirely. At the conclusion of MEPC 82, a draft legal text was used as a basis for ongoing talks about mid-term Green House Gas, or GHG, reduction measures,
which are expected to be adopted in 2025. The proposed mid-term measures include a goal-based marine fuel standard, phasing in the mandatory use of fuels with less GHG intensity,
and a global GHG emission pricing mechanism.
33

Table of Contents
Since January 1, 2020, ships have been required to either remove sulfur from emissions or buy fuel with low sulfur content, which may lead to increased costs and
supplementary investments for ship owners. The interpretation of “fuel oil used on board” includes use in main engines, auxiliary engines, and boilers. Shipowners may comply with this
regulation by (i) using 0.5% sulfur fuels on board, which are available around the world but at a higher cost; (ii) installing scrubbers for cleaning of the exhaust gas; or (iii) by retrofitting
vessels to be powered by liquefied natural gas, which may not be a viable option due to the lack of supply network and high costs involved in this process. Costs of compliance with
these regulatory changes may be significant and may have a material adverse effect on our future performance, results of operations, cash flows, and financial position.
In addition, although the emissions of greenhouse gases from international shipping currently are not subject to the Kyoto Protocol to the United Nations Framework
Convention on Climate Change, which entered into force in 2005 and required adopting countries to implement national programs to reduce emissions of certain gases (this task was
delegated under the Kyoto Protocol to the IMO for action), a new treaty may be adopted in the future that includes restrictions on shipping emissions.
Furthermore, on January 1, 2024 the EU Emissions Trading Scheme, or the ETS, for ships sailing into and out of EU ports came into effect, and the FuelEU Maritime Regulation
came into effect on January 1, 2025. The ETS applies gradually over the period from 2024 to 2026: 40% of allowances would have to be surrendered in 2025 for the year 2024; 70% of
allowances would have to be surrendered in 2026 for the year 2025; and 100% of allowances would have to be surrendered in 2027 for the year 2026. Compliance is on a companywide
(rather than per ship) basis and “shipping company” is defined widely to capture both the ship owner and any contractually appointed commercial operator/ship manager/bareboat
charterer who assumes all duties and responsibilities for the ship under the ISM Code, as well as the responsibility for full compliance under the ETS and the ISM Code. If the latter
contractual arrangement is entered into this needs to be reflected in a certified mandate signed by both parties and presented to the administrator of the scheme. The cap under the ETS
would be set by taking into account EU MRV system emissions data for the years 2018 and 2019, adjusted, from year 2021 and is to capture 100% of the emissions from intra-EU maritime
voyages; 100% of emissions from ships at berth in EU ports and 50% of emissions from voyages which start or end at EU ports (but the other destination is outside the EU).
Furthermore, the newly passed EU Emissions Trading Directive 2023/959/EC makes clear that all maritime allowances would be auctioned and there will be no free allocation. Maritime is
to be allocated 78.4 million emissions allowances.  If we do not have allowances, we will be forced to purchase allowances from the market, which can be costly. To prepare for and
manage the administrative aspects of EU ETS compliance, we have made significant investments in new systems, including personnel, data management, cost recovery mechanisms,
revised service agreement terms and transparent emissions reporting procedures. However, the cost of future compliance and of our future EU emissions and costs to purchase an
allowance for emissions (if we must purchase in order to comply) are unknown and difficult to predict, and are based on a number of factors, including the size of our fleet, our trips
within and to and from the EU, and the prevailing cost of allowances. We have registered under the EU ETS regime and have accordingly opened a Maritime Operator Holding Account
ready for the submission of allowances in September 2025. We have calculated the allowances required for the year 2024, but anticipate that our vessels will continue to make calls in
European ports during 2025. The voyages for which we will be required to surrender allowances are primarily undertaken by our charterers, and as such we are currently unable to
determine our liability under EU ETS beyond 2024.
Additionally, on July 25, 2023, the European Council of the European Union adopted the Fuel EU Maritime Regulation 2023/1805 (“FuelEU”) under the FuelEU Initiative of its
“Fit-for-55” package which sets limitations on the acceptable yearly greenhouse gas intensity of the energy used by covered vessels. Among other things, FuelEU requires that
greenhouse gas intensity of fuel used by covered vessels is reduced by 2% starting January 1, 2025, with additional reductions contemplated every five years (up to 80% by 2050).
Shipping companies may enter into pooling mechanisms with other shipping companies in order to achieve compliance, bank surplus emissions and borrow compliance balances from
future years. A FuelEU Document of Compliance is required to be kept on board a vessel to show compliance by June 30, 2026. Both the ETS and FuelEU schemes have significant
impacts on the management of the vessels calling to EU ports, by increasing the complexity and monitoring of, and costs associated with the operation of vessels and affecting the
relationships with our time charterers.
Compliance with changes in laws, regulations, and obligations relating to climate change affects the propulsion options in subsequent vessel designs and could increase our
costs related to acquiring new vessels, operating and maintaining our existing tanker vessels and require us to install new emission controls, acquire allowances or pay taxes related to
our greenhouse gas emissions or administer and manage a greenhouse gas emissions program. Revenue generation and strategic growth opportunities may also be adversely affected.
34

Table of Contents
Adverse effects upon the crude oil and natural gas industry relating to climate change, including growing public concern about the environmental impact of climate change,
may also adversely affect demand for our services. For example, increased regulation of greenhouse gases or other concerns relating to climate change may reduce the demand for crude
oil and natural gas in the future or create greater incentives for the use of alternative energy sources. In addition, the physical effects of climate change, including changes in weather
patterns, extreme weather events, rising sea levels, and scarcity of water resources, may negatively impact our operations. Any long-term material adverse effect on the crude oil and
natural gas industry could have a significant financial and operational adverse impact on our business that we cannot predict with certainty at this time.
Increasing regulation as well as scrutiny and changing expectations from investors, lenders, and other market participants with respect to our Environmental, Social, and
Governance (“ESG”) policies may impose additional costs on us or expose us to additional risks.
Companies across all industries are facing increasing scrutiny relating to their ESG policies. Investor advocacy groups, certain institutional investors, investment funds,
lenders, and other market participants are increasingly focused on ESG practices and, in recent years, have placed increasing importance on the implications and social cost of their
investments. The increased focus and activism related to ESG and similar matters may hinder access to capital, as investors and lenders may decide to reallocate capital or to not commit
capital as a result of their assessment of a company’s ESG practices. Companies that do not adapt to, or comply with, investor, lender, or other evolving industry shareholder
expectations and standards, or which are perceived to have not responded appropriately to the growing concern for ESG issues, regardless of whether there is a legal requirement to do
so, may suffer from reputational damage and the business, financial condition, and/or stock price of such a company could be materially and adversely affected.
We may face increasing pressures from investors, lenders, and other market participants who are increasingly focused on climate change to prioritize sustainable energy
practices, reduce our carbon footprint, and promote sustainability. As a result, we may be required to implement more stringent ESG procedures or standards so that our existing and
future investors and lenders remain invested in us and make further investments in us, especially given the highly focused and specific trade of crude oil transportation in which we are
engaged. If we do not meet these standards, our business and/or our ability to access capital could be harmed.
On March 6, 2024, the SEC adopted final rules to enhance and standardize climate-related and ESG-related disclosures by public companies and in public offerings. The final
rules, set forth in Release No. 33-11275, would add extensive and prescriptive disclosure items requiring companies, including foreign private issuers, to disclose climate-related risks and
certain emissions. In addition, the final rules would require the inclusion of certain climate-related financial metrics in a note to companies’ audited financial statements. These rules were
challenged in federal court and in April 2024, the SEC announced that it would voluntarily stay the effectiveness of the rules pending judicial review. On March 27, 2025, the SEC
determined to end its defense of the rules in the ongoing litigation. It is unclear if the rules will be enforced or repealed. Costs of compliance with these new rules may be significant and
may have a material adverse effect on our future performance, results of operations, cash flows and financial position.
Additionally, certain investors and lenders may exclude oil transport companies, such as us, from their investing portfolios altogether due to environmental, social, and
governance factors. These limitations in both the debt and equity capital markets may affect our ability to grow as our plans for growth may include accessing the equity and debt capital
markets. If those markets are unavailable, or if we are unable to access alternative means of financing on acceptable terms, or at all, we may be unable to implement our business strategy,
which would have a material adverse effect on our financial condition and results of operations and impair our ability to service our indebtedness. Further, it is likely that we will incur
additional costs and require additional resources to monitor, report, and comply with wide-ranging ESG requirements. The occurrence of any of the foregoing could have a material
adverse effect on our business and financial condition.
35

Table of Contents
If we are unable to operate our vessels profitably, we may be unsuccessful in competing in the highly competitive international tanker vessel market, which would negatively affect
our financial condition and our ability to expand our business.
The operation of tanker vessels and transportation of crude oil and refined petroleum products is extremely competitive, and reduced demand for transportation of crude oil and
refined petroleum products could lead to increased competition. Competition arises primarily from other tanker vessel owners, including major oil companies and national oil companies
or companies linked to authorities of oil producing or importing countries, as well as independent tanker companies, some of whom have substantially greater resources than we do.
Competition for the transportation of oil and oil products can be intense and depends on price, location, size, age, condition, and acceptability of the tanker and its operator to the
charterers. Our ability to operate our vessels profitably depends on a variety of factors, including, but not limited to, the (i) loss or reduction in business from significant customers, (ii)
unanticipated changes in demand for transportation of crude oil and petroleum products, (iii) changes in the production of, or demand for, oil and petroleum products, generally or in
particular regions, (iv) greater than anticipated levels of tanker vessel newbuilding orders or lower than anticipated levels of tanker vessel recyclings, and (v) changes in rules and
regulations applicable to the tanker vessel industry, including legislation adopted by international organizations, such as IMO, and the EU or by individual countries.
If we expand our business or provide new services in new geographic regions, we may not be able to compete profitably. New markets may require different skills, knowledge, or
strategies than we use in our current markets, and the competitors in those new markets may have greater financial strength and capital resources than we do.
Regulations relating to ballast water discharge may adversely affect our revenues and profitability.
The IMO has imposed updated guidelines for ballast water management systems specifying the maximum amount of viable organisms allowed to be discharged from a vessel’s
ballast water. Depending on the date of the International Oil Pollution Prevention (IOPP) renewal survey, existing vessels constructed before September 8, 2017, are required to comply
with the updated D-2 standard on or after September 8, 2019. For most vessels, compliance with the D-2 standard will involve installing on-board systems to treat ballast water and
eliminate unwanted organisms. Vessels constructed on or after September 8, 2017, are required to comply with the D-2 standards on or after September 8, 2017. The IMO has imposed
updated guidelines for ballast water management systems specifying the maximum amount of viable organisms allowed to be discharged from a vessel’s ballast water. Depending on the
date of the International Oil Pollution Prevention (IOPP) renewal survey, existing vessels constructed before September 8, 2017, are required to comply with the updated D-2 standard on
or after September 8, 2019. Vessels are required to meet the D-2 standard by installing an approved Ballast Water Management System, or BWMS. BWMSs installed on or after October
28, 2020 shall be approved in accordance with BWMS Code, while BWMSs installed before October 23, 2020 must be approved taking into account guidelines developed by the IMO or
the BWMS Code. Amendments to the International Convention for the Control and Management of Ships’ Ballast Water and Sediments, or the BWM Convention entered into force in
June 2022 concerning commissioning testing of BWMS and the form of the International Ballast Water Management Certificate. Additional amendments to the BWM Convention,
concerning the form of the Ballast Water Record Book, entered into force on February 1, 2025. All of our vessels have installed approved ballast water management systems.
Furthermore, United States regulations are currently changing. Although the 2013 Vessel General Permit (VGP) program and U.S. National Invasive Species Act, or NISA, are
currently in effect to regulate ballast discharge, exchange, and installation, the Vessel Incidental Discharge Act or VIDA, which was signed into law on December 4, 2018, requires that
the EPA develop national standards of performance for approximately 30 discharges, similar to those found in the VGP within two years. On October 26, 2020, the EPA published a Notice
of Proposed Rulemaking for Vessel Incidental Discharge National Standards of Performance under VIDA, and in November 2020, held virtual public meetings. On October 18, 2023, the
EPA published a Supplemental Notice to the Vessel Incidental Discharge National Standards of Performance, which shares new ballast water information that the EPA received from the
USCG. On September 20, 2024, the EPA finalized national standards of performance for non-recreational vessels 79-feet in length and longer with respect to incidental discharges and on
October 9, 2024, the Vessel Incidental Discharge National Standards of Performance were published. Within two years of publication, the USCG is required to develop corresponding
implementation regulations. Within two years of publication, the USCG is required to develop corresponding implementation regulations. Until such regulations are final, effective, and
enforceable, vessels will continue to be subject to the VGP 2013 requirements and USCG ballast water regulations. The new regulations could require the installation of new equipment,
which may cause us to incur substantial costs, which may adversely affect our profitability.
36

Table of Contents
Insurance may be difficult to obtain or, if obtained, may not be adequate to cover our losses that may result from our operations due to the inherent operational risks of the
shipping industry.
There are a number of risks associated with the operation of ocean-going vessels, including mechanical failure, collision, fire, human error, war, terrorism, piracy, loss of life,
contact with floating objects, property loss, cargo loss or damage, and business interruption due to political circumstances in foreign countries, hostilities, and labor strikes. Any of
these events may result in loss of revenues, increased costs, and decreased cash flows. In addition, the operation of any vessel is subject to the inherent possibility of marine disaster,
including oil spills and other environmental mishaps.
We carry insurance to protect us against most of the accident-related risks involved in the conduct of our business, including marine hull and machinery insurance, protection
and indemnity insurance, which include pollution risks, crew insurance, and war risk insurance. However, we may not be adequately insured to cover losses from our operational risks,
which could have a material adverse effect on us. Additionally, our insurers may refuse to pay particular claims, and our insurance may be voidable by the insurers if we take, or fail to
take, certain actions, such as failing to maintain certification of our vessels with applicable maritime regulatory organizations. Any significant uninsured or under-insured loss or liability
could have a material adverse effect on our business, results of operations, cash flows, financial condition, and available cash. In addition, we may not be able to obtain adequate
insurance coverage at reasonable rates in the future during adverse insurance market conditions.
Under our vessel management agreements with Performance Shipping Management Inc., our in-house manager, is responsible for procuring and paying for insurance for our
vessels. Our insurance policies contain standard limitations, exclusions, and deductibles. The policies insure against those risks that the shipping industry commonly insures against,
which are hull and machinery, protection and indemnity, and war risk. Our in-house manager currently maintains hull and machinery coverage in an amount at least equal to the vessels’
market value. Our in-house manager maintains an amount of protection and indemnity insurance that is at least equal to the standard industry level of coverage. We cannot assure you
that Performance Shipping Management Inc. will be able to procure adequate insurance coverage for our fleet in the future or that our insurers will pay any particular claim.
In addition, changes in the insurance markets attributable to terrorist attacks may also make certain types of insurance more difficult for us to obtain due to increased premiums,
or reduced or restricted coverage for losses caused by terrorist acts generally.
Since we obtain some of our insurance through protection and indemnity associations, which result in significant expenses to us, we may be required to make additional
premium payments. We may be subject to increased premium payments, or calls, in amounts based on our claim records, the claim records of our managers, as well as the claim records of
other members of the protection and indemnity associations through which we receive insurance coverage for tort liability, including pollution-related liability. In addition, our protection
and indemnity associations may not have enough resources to cover claims made against them. Our payment of these calls could result in significant expense to us, which could have a
material adverse effect on our business, results of operations, cash flows, financial condition, and available cash.
Adverse market conditions could cause us to breach covenants in our credit facilities and adversely affect our operating results.
The market values of tanker vessels are subject to significant volatility. Indicatively, market prices for ten-year-old Aframax tankers over the past ten years have fluctuated
significantly from a high level of $60 million in 2024 to a low level of $18 million in 2016. You should expect the market value of our vessels to fluctuate depending on general economic
and market conditions affecting the shipping industry and prevailing charter rates, competition from other tanker companies and other modes of transportation, types, sizes, and ages of
vessels, applicable governmental regulations, and the cost of newbuildings. We believe that our vessels’ current aggregate market value will be in excess of loan to value amounts
required under our credit facilities. Our credit facilities generally require that the fair market value of the vessels pledged as collateral never be less than 125% or 135% of the aggregate
principal amount outstanding under the loans. We were in compliance with these requirements as of December 31, 2024, and as of the date of this annual report.
37

Table of Contents
A decrease in vessel values could cause us to breach certain covenants in our existing credit facilities and future financing agreements that we may enter into from time to time.
If we breach such covenants and are unable to remedy the relevant breach or obtain a waiver, our lenders could accelerate our debt and foreclose on our owned vessels. Additionally, if
we sell one or more of our vessels at a time when vessel prices have fallen, the sale price may be less than the vessel’s carrying value on our consolidated financial statements, resulting
in a loss on sale or an impairment loss being recognized, ultimately leading to a reduction in earnings.
A shift in consumer demand from crude oil towards other energy sources or changes to trade patterns for crude oil and refined petroleum products may have a material adverse
effect on our business.
A significant portion of our earnings are related to the crude oil industry. A shift in the consumer demand from crude oil towards other energy resources, such as wind energy,
solar energy, hydrogen energy, or nuclear energy, will potentially affect the demand for our vessels. This could have a material adverse effect on our future performance, results of
operations, cash flows, and financial position.
Seaborne trading and distribution patterns are primarily influenced by the relative advantage of the various sources of production, locations of consumption, pricing
differentials, and seasonality. Changes to the trade patterns of crude oil and oil products may have a significant negative or positive impact on the ton-mile and, therefore, the demand for
our tanker vessels. This could have a material adverse effect on our future performance, results of operations, cash flows, and financial position.
Risks Relating to our Common and Preferred Shares
The market price of our common shares is subject to significant fluctuations.
The market price of our common shares has been and may in the future be subject to significant fluctuations as a result of many factors, some of which are beyond our control.
During the period from January 1, 2024 to April 14, 2025, the trading price of our common shares has ranged from an intra-day high of $2.58 on June 3, 2024 to an intra-day low of
$1.31 on April 8 and 9, 2025.
Among the factors that have in the past and could in the future affect our share price are:
•
the failure of securities analysts to publish research about us or make appropriate changes in their financial estimates;
•
announcements by us or our competitors of significant contracts, acquisitions, or capital commitments;
•
variations in quarterly operating results;
•
general economic conditions, including inflationary pressures;
•
terrorist or piracy acts;
•
unforeseen events, such as natural disasters or pandemics;
•
international sanctions, embargoes, import and export restrictions, nationalizations, piracy, and wars or other conflicts, including the ongoing war between Ukraine and
Russia and the war between Israel and Hamas;
•
actual or anticipated fluctuations in our operating results from period to period;
•
fluctuations in interest rates;
•
fluctuations in the availability or the price of oil and chemicals;
38

Table of Contents
•
fluctuations in foreign currency exchange rates;
•
the loss of any of our key management personnel;
•
our failure to successfully implement our business plan;
•
future sales of our common shares or other securities;
•
stock splits or reverse stock splits;
•
shareholder activism, such as the tender offer and related actions commenced by Sphinx Investment Corp. during 2023; and
•
investors’ perception of us and the international tanker sector.
These broad market and industry factors may materially reduce the market price of our common shares, regardless of our operating performance. The seaborne transportation
industry has been highly unpredictable and volatile. The market for common shares of companies in this industry may be volatile as a consequence. Therefore, we cannot assure you
that you will be able to sell any of our common shares you may have purchased at a price greater than or equal to its original purchase price, or that you will be able to sell them at all.
In addition, over the last few years, the stock market has experienced price and volume fluctuations, including due to factors relating to the outbreak of COVID-19 and its
variants, and the governmental responses thereto, the war in Ukraine and between Israel and Hamas, and general economic, market, or political conditions, and this volatility has
sometimes been unrelated to the operating performance of particular companies. As a result, there is a potential for rapid and substantial decreases in the price of our common shares,
including decreases unrelated to our operating performance or prospects. This market and share price volatility has and could further reduce the market price of our common shares in
spite of our operating performance and could also increase our cost of capital, which could prevent us from accessing debt and equity capital on terms acceptable to us or at all.
In addition, the market price and trading volume of our common shares have at certain times in the past exhibited, and may continue to exhibit, extreme volatility, including
within a single trading day. For example, over a period of three trading days from August 9, 2022, through August 11, 2022, the trading price of our common shares ranged from an intra-
day high of $9.75 to an intra-day low of $5.25. Such price volatility could cause purchasers of our common shares to incur substantial losses. With respect to certain such instances of
trading volatility, including the period beginning on August 9, 2022, we are not aware of any material changes in our financial condition or results of operations that would explain such
price volatility or trading volume, which we believe reflect market and trading dynamics unrelated to our operating business or prospects and outside of our control. We are thus unable
to predict when such instances of trading volatility will occur or how long such dynamics may last. Under these circumstances, we would caution you against investing in our common
shares unless you are prepared for the risk of incurring substantial losses.
Extreme fluctuations in the market price of our common shares may occur in response to strong and atypical retail investor interest, including on social media and online forums,
the direct access by retail investors to broadly available trading platforms, the amount and status of short interest in our common shares and our other securities, access to margin debt,
trading in options and other derivatives on our common shares, and any related hedging and other trading factors. In particular, a proportion of our common shares may be traded by
short sellers which may put pressure on the supply and demand for our common shares, creating further price volatility. A possible “short squeeze” due to a sudden increase in demand
of our common shares that largely exceeds supply may lead to sudden extreme price volatility in our common shares. Investors may purchase our common shares to hedge existing
exposure in our common shares or to speculate on the price of our common shares. Speculation on the price of our common shares may involve long and short exposures. To the extent
aggregate short exposure exceeds the number of common shares available for purchase in the open market, investors with short exposure may have to pay a premium to repurchase our
common shares for delivery to lenders of our common shares. Those repurchases may in turn, dramatically increase the price of our common shares until investors with short exposure
are able to purchase additional common shares to cover their short position. This is often referred to as a “short squeeze.” Following such a short squeeze, once investors purchase the
shares necessary to cover their short position, the price of our common shares may rapidly decline. A short squeeze could lead to volatile price movements in our shares that are not
directly correlated to the performance or prospects of our company and could cause purchasers of our common shares to incur substantial losses.
39

Table of Contents
Further, shareholders may institute securities class action litigation following periods of market volatility. If we were involved in securities litigation, we could incur substantial
costs and our resources and the attention of management could be diverted from our business.
Future sales of our common shares, including through the exercise of conversion rights under our outstanding convertible preferred shares, could cause the market price of our
common shares to decline.
Our amended and restated articles of incorporation authorize us to issue up to 500,000,000 common shares, of which 12,432,158 shares were issued and outstanding as of April
14, 2025.
As of April 14, 2025, 1,423,912 of our Series C Preferred Shares were issued and outstanding. Each Series C Preferred Share will be convertible, at the option of the holder at any
time and from time to time after six months from the date of original issuance of such Series C Preferred Share, into a number of common shares equal to the Series C Preferred Share
liquidation preference of $25.00 divided by a conversion price equal to $1.3576 (subject to adjustment from time to time). The conversion price is subject to customary adjustments,
including for any stock splits, reverse stock splits or stock dividends, and will also be adjusted to equal the lowest price at which common shares are sold by us in any registered
offering, provided that such adjusted conversion price shall not be less than $0.50. For additional information regarding the terms of our issued and outstanding Series C Preferred
Shares, please see “Item 10. Additional Information—B. Memorandum and Articles of Association” and “Item 3. Key Information—D. Risk Factors” entitled “Aliki Paliou, the
Chairperson of the Board, controls a majority of voting power over matters on which our shareholders are entitled to vote, and accordingly, may exert considerable influence over us and
may have interests that are different from the interests of our other shareholders.” We may offer and sell our common shares or securities convertible into our common shares from time
to time, through one or more methods of distribution, subject to market conditions and our capital needs. The market price of our common shares could decline from its current levels due
to sales of a large number of shares in the market, including sales of shares by our large shareholders, our issuance of additional shares, or securities convertible into our common shares
or the perception that these sales could occur. These sales could also make it more difficult or impossible for us to sell equity securities in the future at a time and price that we deem
appropriate to raise funds through future offerings of shares of our common shares. The issuance of such additional common shares would also result in the dilution of the ownership
interests of our existing shareholders.
We might issue additional common shares or other securities to finance our growth as market conditions warrant. These issuances, which would generally not be subject to
shareholder approval, may lower your ownership interests and may depress the market price of our common shares.
We have in the past conducted significant offerings of our common shares and securities convertible into common shares pursuant to previous public and private offerings of
our equity and equity-linked securities. We may finance potential future expansions of our fleet in large part through equity and debt financing. Pursuant to our amended and restated
articles of incorporation, we are authorized to issue up to 500,000,000 common shares and 25,000,000 preferred shares, each with a par value of $0.01 per share. Therefore, subject to
Nasdaq rules that are applicable to us, we may issue additional common shares and other equity securities of equal or senior rank, without shareholder approval, in a number of
circumstances from time to time.
On April 21, 2023, we filed a registration statement on Form F-3, which was declared effective on May 4, 2023, and is available for the registered sale of up to $250.0 million of our
securities.
40

Table of Contents
In addition, we may be obligated to issue pursuant to the terms of outstanding convertible securities, options, or warrants, as of April 14, 2025:
•
any common shares issuable pursuant to the exercise of conversion rights under our Series C Preferred Shares, of which 1,423,912 shares are currently outstanding;
•
8,000 common shares issuable upon the exercise of outstanding options exercisable at a price range between $150.00 and $450.00 per share, for a term expiring January 1,
2026;
•
up to 567,366 common shares issuable upon the exercise of our Class A Warrants (at an exercise price of $15.75 per share as of March 26, 2024) which expire in January 2028;
•
up to 1,033,333 common shares that may be issued upon the exercise of warrants (the “July 2022 Warrants”) issued pursuant to a registered direct offering on July 19, 2022 (at
an exercise price of $1.65 per share as of March 26, 2024) which expire in January 2028;
•
up to 2,122,222 common shares that may be issued upon the exercise of warrants (the “August 2022 Warrants”) issued pursuant to a registered direct offering on August 12,
2022 (at an exercise price of $1.65 per share as of March 26, 2024) which expire in August 2027;
•
up to 14,300 common shares that may be issued upon the exercise (at an exercise price of $2.25 per share as of March 26, 2024) or exchange (for no additional cash
consideration) of the Series A warrants (the “Series A Warrants”), which expire in March 2028; and
•
up to 4,097,000 common shares that may be issued upon the exercise of the Series B Warrants (at an exercise price of $2.25 per share as of March 26, 2024) which expire in
March 2028.
Our existing common shareholders will experience significant dilution if we sell shares at prices significantly below the price at which they invested. We may issue additional
common shares or other equity securities of equal or senior rank in the future to raise additional capital in connection with, among other things, debt prepayments, future vessel
acquisitions, payment of dividends on our Series B or Series C Preferred Shares, redemptions of our Series C Preferred Shares, or any future equity incentive plan, without shareholder
approval, in a number of circumstances. Holders of our common shares have no preemptive rights that entitle such holders to purchase their pro rata share of any offering of shares of
any class or series of shares and, therefore, are at risk of dilution.
Our issuance of additional common shares or other equity securities of equal or senior rank will have the following effects:
•
our existing shareholders’ proportionate ownership interest in us may decrease;
•
the relative voting strength of each previously outstanding share may be diminished;
•
the market price of our common shares may decline; and
•
the amount of cash available for dividends payable on our common shares, if any, may decrease.
The market price of our common shares could decline due to sales, or the announcements of proposed sales, of a large number of common shares in the market, including sales
of common shares by our large shareholders or by holders of securities convertible into common shares, or the perception that these sales could occur. These sales or the perception
that these sales could occur could also depress the market price of our common shares and impair our ability to raise capital through the sale of additional equity securities or make it
more difficult or impossible for us to sell equity securities in the future at a time and price that we deem appropriate. We cannot predict the effect that future sales of common shares or
other equity-related securities would have on the market price of our common shares.
There is no guarantee of a continuing public market for you to resell our common shares.
Our common shares commenced trading on the Nasdaq Global Market on January 19, 2011. Since January 2, 2013, our common shares have traded on the Nasdaq Global Select
Market, and since March 6, 2020, our common shares have traded on the Nasdaq Capital Market. We cannot assure you that an active and liquid public market for our common shares
will continue. The Nasdaq Capital Market and each national securities exchange have certain corporate governance requirements that must be met in order for us to maintain our listing.
If we fail to maintain the relevant corporate governance requirements, our common shares could be delisted, which would make it harder for you to monetize your investment in our
common shares and would cause the value of your investment to decline.
41

Table of Contents
We are required to meet certain qualitative and financial tests (including a minimum bid price for our common shares of $1.00 per share, at least 500,000 publicly held shares, at
least 300 public holders, a market value of publicly held securities of $1 million, and net income of $500,000), as well as other corporate governance standards, to maintain the listing of
our common shares on the Nasdaq Capital Market, or Nasdaq. It is possible that we could fail to satisfy one or more of these requirements. There can be no assurance that we will be
able to maintain compliance with the minimum bid price, shareholders’ equity, number of publicly held shares, net income requirements, or other listing standards in the future. A decline
in the closing price of our common shares could result in a breach of the requirements for listing on the Nasdaq Capital Market. Although we would have an opportunity to take action to
cure such a breach, if we do not succeed, Nasdaq could commence suspension or delisting procedures in respect of our common shares. We may receive notices from Nasdaq that we
have failed to meet its requirements, and proceedings to delist our stock could commence. We have received in the past, and most recently received on April 18, 2023, a written
notification from The Nasdaq Stock Market LLC, indicating that because the closing bid price of our common shares for the previous 30 consecutive business days was below $1.00 per
share, we no longer met the minimum bid price requirement under Nasdaq rules. With respect to the most recent such notification, we regained compliance on August 15, 2023 as a result
of the closing price of our common shares being $1.00 or greater for ten consecutive trading days.
With respect to prior such notifications, we have regained compliance through by means of a reverse stock split. For more information, please see “Item 4. Information on the
Company—A. History and Development of the Company.” Since June 2016, we have effected eight reverse stock splits of our common shares, each of which was approved by our board
of directors and by our shareholders at an annual or special meeting of such shareholders. There were no changes to the trading symbol, number of authorized shares, or par value of our
common shares in connection with any of the reverse stock splits. All share amounts in this report, not including amounts incorporated by reference, have been retroactively adjusted to
reflect these reverse stock splits. If we are required to conduct a reverse stock split in the future to maintain compliance with the continued listing requirements of the Nasdaq Capital
Market, the market price of our common shares may be negatively affected.
The issuance of common shares in future offerings may trigger anti-dilution provisions in our outstanding convertible securities and warrants and affect the interests of our
common shareholders.
The July 2022 Warrants, August 2022 Warrants, and Series C Preferred Shares contain anti-dilution provisions that have been triggered by our subsequent issuance of
securities, and those of the Series C Preferred Shares, our Series A Warrants and Series B Warrants and any other securities we issue in the future containing similar anti-dilution
provisions could be further triggered by future issuances of common shares or securities convertible into common shares, depending on the offering price of equity issuances, the
conversion price or formula of convertible shares, or the exercise price or formula of warrants. Pursuant to the anti-dilution provisions of the July 2022 Warrants and the August 2022
Warrants, the exercise price was adjusted and currently is equal to the minimum exercise price under such warrants of $1.65 per common share. Any future issuance or deemed issuance
of common shares below the applicable conversion price of the Series C Preferred Shares may result in a further adjustment downward of the conversion price of the Series C Preferred
Shares and would result in a corresponding increase in the number of common shares issuable upon conversion of such securities. The current conversion price of the Series C Preferred
Shares is $1.3576 per common share, subject to anti-dilution adjustments to a minimum conversion price of $0.50. Generally, the anti-dilution provisions of the Series C Preferred Shares
will operate to adjust the conversion price to the lowest price at which we sell shares in any future offering, if such price is below the then-applicable conversion price and equal to or
greater than the minimum conversion price. If the holders of such securities elect to convert or exercise following an adjustment of the exercise or conversion price of such securities, the
interests of the holders of our common shares may be diluted.
42

Table of Contents
We cannot assure you that our board of directors will declare dividend payments on our common shares in the future or when such payment might occur.
While we have declared and paid cash dividends on our common shares in the past, there can be no assurance that our board of directors will declare dividend payments in the
future. If declared, our variable quarterly dividend is expected to be paid each February, May, August, and November and will be subject to reserves for the replacement of our vessels,
scheduled drydocking of our vessels, intermediate and special surveys, dividends to holders of our preferred shares, if paid in cash, and other purposes as our board of directors may
from time to time determine are required, after taking into account contingent liabilities, the terms of any credit facility, our growth strategy and other cash needs, as well as the
requirements of Marshall Islands law, among other factors. In addition, any credit facility that we may enter into in the future may include restrictions on our ability to pay dividends.
The declaration and payment of dividends, even during times when we have sufficient funds and are not restricted from declaring and paying dividends by our lenders or any
other party, will always be subject to the discretion of our board of directors. Our board of directors may review and amend our dividend policy from time to time, taking into
consideration our plans for future growth and other factors. The actual timing and amount of dividend payments, if any, will be determined by our board of directors and will be affected
by various factors, including our cash earnings, financial condition and cash requirements, the loss of a vessel, the acquisition of one or more vessels, required capital expenditures,
reserves established by our board of directors, increased or unanticipated expenses, a change in our dividend policy, additional borrowings, and future issuances of securities, among
other factors, many of which will be beyond our control.
We may incur expenses or liabilities or be subject to other circumstances in the future that reduce or eliminate the amount of cash that we have available for distribution as
dividends, including as a result of the risks described in this report. Our growth strategy contemplates that we will finance the acquisition of additional tanker vessels through a
combination of primarily equity capital and, to a lesser extent, cash on hand and debt financing on terms acceptable to us. If external sources of funds on terms acceptable to us are
limited, our board of directors may determine to finance acquisitions with cash from operations, which would reduce or even eliminate the amount of cash available for the payment of
dividends.
We are a holding company, and we depend on the ability of our subsidiaries to distribute funds to us to satisfy our financial obligations and make dividend payments. In
addition, our existing or future credit facilities may include restrictions on our ability to pay dividends.
The shipping sector is highly cyclical and volatile. We cannot predict with accuracy the amount of cash flows our operations will generate in any given period. Our quarterly
dividends, if any, will vary significantly from quarter to quarter as a result of variations in our operating performance, cash flow, and other contingencies, and we cannot assure you that
we will generate available cash for distribution in any quarter, and so we may not declare and pay any dividends in certain quarters, or at all. Our ability to resume payment of dividends
will be subject to the limitations set forth in this report.
In times when we have debt outstanding, we intend to limit our dividends per share, if dividend payment is reinstated, to the amount that we would have been able to pay if we
were financed entirely with equity. In addition, any credit facilities that we may enter into in the future may include restrictions on our ability to pay dividends. Marshall Islands law
generally prohibits the payment of dividends other than from surplus or while a company is insolvent or would be rendered insolvent by the payment of such a dividend.
Future offerings of debt securities and amounts outstanding under any future credit facilities or other borrowings, which would rank senior to our common shares upon our
liquidation, may adversely affect the market value of our common shares.
In the future, we may attempt to increase our capital resources with further borrowing under credit facilities, making offerings of debt or additional offerings of equity securities,
including commercial paper, medium-term notes, senior or subordinated notes, and classes of preferred stock. Upon liquidation, holders of our debt securities and certain series of our
preferred stock and lenders with respect to our credit facilities and other borrowings will receive a distribution of our available assets prior to the holders of our common shares. Any
preferred stock could, and our Series B Preferred Shares and Series C Preferred Shares do, have a preference on liquidating distributions or a preference on dividend payments that would
limit amounts available for distribution to holders of our common shares. As our decision to borrow additional amounts under credit facilities or issue securities in any future offering will
depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing, or nature of our future indebtedness or offering of securities.
Therefore, holders of our common shares bear the risk of our future offerings reducing the market value of our common shares and diluting their shareholdings in us or that, in the event
of bankruptcy, liquidation, dissolution, or winding-up of the Company, all or substantially all of our assets will be distributed to holders of our debt securities or preferred stock or
lenders with respect to our credit facilities and other borrowings.
43

Table of Contents
able of Contents
We may not have sufficient cash from our operations to enable us to pay dividends on or redeem our Series B Preferred Shares and Series C Preferred Shares following the payment
of expenses and the establishment of any reserves.
We will pay quarterly dividends on the Series B Preferred Shares and Series C Preferred Shares only from funds legally available for such purpose when, as, and if declared by
our board of directors or, at our option, through the issuance of additional common shares, valued at the volume-weighted average price of the common shares for the 10 trading days
prior to the dividend payment date. We may not have sufficient cash available each quarter to pay dividends. In addition, we may have insufficient cash available to redeem the Series B
Preferred Shares or Series C Preferred Shares. The amount of cash we can use to pay dividends or redeem our Series B Preferred Shares or Series C Preferred Shares depends on the
amount of cash we generate from our operations, which may fluctuate significantly, and other factors, including the following:
•
changes in our operating cash flow, capital expenditure requirements, working capital requirements, and other cash needs;
•
the amount of any cash reserves established by our board of directors;
•
restrictions under Marshall Islands law, which generally prohibits the payment of dividends other than from surplus and while a company is insolvent or would be rendered
insolvent by the payment of such a dividend;
•
restrictions under our credit facilities and other instruments and agreements governing our existing and future indebtedness; and
•
our overall financial and operating performance, which, in turn, is subject to prevailing economic and competitive conditions, the risks associated with the shipping industry,
and other factors, many of which are beyond our control.
The amount of cash we generate from our operations may differ materially from our net income or loss for the period, and our board of directors, at its discretion, may elect not
to declare any dividends. We may incur other expenses or liabilities that could reduce or eliminate the cash available for distribution as dividends. As a result of these and the other
factors mentioned above, we may pay dividends during periods when we record losses and may not pay dividends during periods when we record net income.
Our ability to pay dividends on and redeem our Series B Preferred Shares and Series C Preferred Shares, and, therefore, your ability to receive payments on the Series B Preferred
Shares and Series C Preferred Shares, is limited by the requirements of Marshall Islands law and our contractual obligations.
Marshall Islands law provides that we may pay dividends on and redeem the Series B Preferred Shares and Series C Preferred Shares only to the extent that assets are legally
available for such purposes. Legally available assets generally are limited to our surplus. In addition, under Marshall Islands law, we may not pay dividends on or redeem the Series B
Preferred Shares or Series C Preferred Shares if we are insolvent or would be rendered insolvent by the payment of such a dividend or the making of such redemption.
Further, the terms of some of our outstanding or future credit facilities may prohibit us from declaring or paying any dividends or distributions on preferred stock, including the
Series B Preferred Shares and Series C Preferred Shares, or redeeming, purchasing, acquiring, or making a liquidation payment on preferred stock in certain circumstances.
44

Table of Contents
Our Series B Preferred Shares and Series C Preferred Shares are subordinated to our debt obligations, and the interests of the holders of Series B Preferred Shares and Series C
Preferred Shares could be diluted by the issuance of additional shares, including other preferred shares, or by other transactions.
Our Series B Preferred Shares and Series C Preferred Shares are subordinated to all of our existing and future indebtedness. We may incur additional indebtedness under our
existing or future credit facilities or other debt agreements. The payment of principal and interest on our debt reduces cash available for distribution to us and on our shares, including
the Series B Preferred Shares and Series C Preferred Shares.
Our Series B Preferred Shares and Series C Preferred Shares rank pari passu as to the payment of dividends and amounts payable upon liquidation or reorganization. If less than
all dividends payable with respect to the Series C Preferred Shares and Series B Preferred Shares are paid, any partial payment shall be made pro rata with respect to the Series C Preferred
Shares and any Series B Preferred Shares entitled to a dividend payment at such time in proportion to the aggregate amounts remaining due in respect of such shares at such time.
The issuance of additional preferred shares on a parity with or senior to our Series B Preferred Shares and Series C Preferred Shares would dilute the interests of the holders of
our Series B Preferred Shares and Series C Preferred Shares, and any issuance of such additional preferred shares or additional indebtedness could affect our ability to pay dividends on,
redeem, or pay the liquidation preference on our Series B Preferred Shares and Series C Preferred Shares.
The Series B Preferred Shares and Series C Preferred Shares represent perpetual equity interests in us.
The Series B Preferred Shares and Series C Preferred Shares represent perpetual equity interests in us and, unlike our indebtedness, will not give rise to a claim for payment of a
principal amount at a particular date. As a result, holders of the Series B Preferred Shares and Series C Preferred Shares may be required to bear the financial risks of an investment in the
Series B Preferred Shares and Series C Preferred Shares for an indefinite period of time.
There is no established trading market for the Series B Preferred Shares or Series C Preferred Shares, which may negatively affect the market value of the Series B Preferred Shares
and Series C Preferred Shares and your ability to transfer or sell them.
There is no established trading market for the Series B Preferred Shares or Series C Preferred Shares. We do not intend to apply to list the Series B Preferred Shares or Series C
Preferred Shares on any stock exchange or in any trading market.
Since the Series B Preferred Shares and Series C Preferred Shares will have no stated maturity date, holders of Series B Preferred Shares and Series C Preferred Shares may be
forced to hold such shares indefinitely, with no guarantee as to ever receiving the liquidation preference. No trading market for the Series B Preferred Shares or Series C Preferred Shares
is expected to develop, and holders of the Series B Preferred Shares or Series C Preferred Shares may not be able to transfer or sell such shares and, if they do, the price received may be
substantially less than the stated liquidation preference.
The Series B Preferred Shares and Series C Preferred Shares are only redeemable at our option and investors should not expect us to redeem the Series B Preferred Shares or Series
C Preferred Shares in the future.
At our option, we may redeem all or, from time to time, part of the Series C Preferred Shares at any time on or after the date that is the date immediately following the 15-month
anniversary of the first date of issuance of the Series C Preferred Shares, subject to any applicable restrictions in agreements governing our current or future indebtedness and Marshall
Islands law. If we redeem the Series C Preferred Shares, holders of the Series C Preferred Shares will be entitled to receive a redemption price equal to $25.00 plus any accumulated and
unpaid dividends thereon to and including the date of redemption (or, if less than 25% of the authorized number of Series C Preferred Shares are outstanding, we may pay the redemption
price in common shares). Additionally, at our option, we may redeem all or, from time to time, part of the Series B Preferred Shares at any time on or after the date that is the date
immediately following the 15-month anniversary of the first date of issuance of the Series B Preferred Shares, subject to any applicable restrictions in agreements governing our current
or future indebtedness and Marshall Islands law. Any decision we may make at any time to propose a redemption of the Series B Preferred Shares or Series C Preferred Shares will
depend upon, among other things, our evaluation of our capital position, the composition of our shareholders’ equity, and general market conditions at that time, and investors should
not expect us to redeem the Series B Preferred Shares or Series C Preferred Shares on any particular date in the future, or at all. If the Series B Preferred Shares or Series C Preferred Shares
are redeemed, such redemption generally will be a taxable event for you. In addition, you might not be able to reinvest the money you receive upon redemption of the Series B Preferred
Shares or Series C Preferred Shares in a similar security or at similar rates. We may elect to exercise our redemption right on multiple occasions. Any such optional redemption for cash
would be effected only out of funds legally available for such purpose.
45

Table of Contents
We are a holding company, and we depend on the ability of our current and future subsidiaries to distribute funds to us in order to satisfy our financial obligations and make
dividend payments.
We are a holding company, and our subsidiaries, which are directly or indirectly wholly owned by us, conduct all of our operations and own all of our operating assets. We have
no significant assets other than the equity interests in our wholly-owned subsidiaries. As a result, our ability to satisfy our financial obligations and pay dividends, if any, to our
shareholders will depend on the ability of our subsidiaries to distribute funds to us. In turn, the ability of our subsidiaries to make dividend payments to us will depend on them having
profits available for distribution. If we are unable to obtain dividends from our subsidiaries, the discretion of our board of directors to pay or recommend the payment of dividends will be
limited. Also, our subsidiaries are limited by Marshall Islands law, which generally prohibits the payment of dividends other than from surplus and while a company is insolvent or would
be rendered insolvent by the payment of such a dividend.
Because we are a foreign corporation, you may not have the same rights or protections that a shareholder in a U.S. corporation may have.
We are incorporated in the Republic of the Marshall Islands, which does not have a well-developed body of corporate law and may make it more difficult for our shareholders to
protect their interests. Our corporate affairs are governed by our amended and restated articles of incorporation, our amended and restated bylaws, and the Marshall Islands Business
Corporations Act, or BCA. The provisions of the BCA resemble provisions of the corporation laws of a number of states in the United States. However, there have been few judicial
cases in the Republic of the Marshall Islands interpreting the BCA. The rights and fiduciary responsibilities of directors under the laws of the Republic of the Marshall Islands are not as
clearly established as the rights and fiduciary responsibilities of directors under statutes or judicial precedent in existence in certain U.S. jurisdictions. Shareholder rights may differ as
well. While the BCA does specifically incorporate the non-statutory law, or judicial case law, of the State of Delaware and other states with substantially similar legislative provisions,
shareholders may have more difficulty in protecting their interests in the face of actions by the management, directors or controlling shareholders than would shareholders of a
corporation incorporated in a U.S. jurisdiction.
Additionally, the Republic of the Marshall Islands does not have a legal provision for bankruptcy or a general statutory mechanism for insolvency proceedings. As such, in the
event of a future insolvency or bankruptcy, our shareholders and creditors may experience delays in their ability to recover for their claims after any such insolvency or bankruptcy.
Further, in the event of any bankruptcy, insolvency, liquidation, dissolution, reorganization, or similar proceeding involving us or any of our subsidiaries, bankruptcy laws other than
those of the United States could apply. If we become a debtor under U.S. bankruptcy law, bankruptcy courts in the United States may seek to assert jurisdiction over all of our assets,
wherever located, including property situated in other countries. There can be no assurance, however, that we would become a debtor in the United States, or that a U.S. bankruptcy
court would be entitled to, or accept, jurisdiction over such a bankruptcy case, or that courts in other countries that have jurisdiction over us and our operations would recognize a U.S.
bankruptcy court’s jurisdiction if any other bankruptcy court would determine it had jurisdiction.
46

Table of Contents
As a Marshall Islands corporation with principal executive offices in Greece, and also having subsidiaries in the Republic of the Marshall Islands, our operations may be subject
to economic substance requirements.
The Council of the European Union, or the Council, routinely publishes a list of “non-cooperative jurisdictions” for tax purposes which includes countries that the Council
believes need to improve their legal framework and to work towards compliance with international standards in taxation. In 2019, the Republic of the Marshall Islands, among others, was
placed by the E.U. on the list of non-cooperative jurisdictions for failing to implement certain commitments previously made to the E.U. by the agreed deadline. However, it was a
removed from the list of non-cooperative jurisdictions that same year. In February 2023, the Republic of the Marshall Islands was added again to the list of non-cooperative jurisdictions,
for lacking in the enforcement of economic substance requirement, and was subsequently removed again from the list in October 2023. E.U. member states have agreed upon a set of
measures, which they can choose to apply against the listed countries, including, increased monitoring and audits, withholding taxes and non-deductibility of costs and although we are
not currently aware of any such measures being adopted, they can be adopted by one or more EU members states in the future. The European Commission has stated it will continue to
support member states’ efforts to develop a more coordinated approach to sanctions for the listed countries. E.U. legislation prohibits certain E.U. funds from being channeled or
transited through entities in non-cooperative jurisdictions.
We are a Marshall Islands corporation with principal executive offices in Greece. Several of subsidiaries are organized in the Republic of the Marshall Islands. The Marshall
Islands have enacted economic substance regulations relating to, inter alia, shipping business activities, with which we could be obligated to comply. The Marshall Islands economic
substance regulations require certain entities that carry out particular activities to comply with a three-part economic substance test whereby the entity must show that it (i) is directed
and managed in the Marshall Islands in relation to that relevant activity, (ii) carries out core income-generating activity in relation to that relevant activity in the Marshall Islands
(although it is being understood and acknowledged by the regulators that income-generating activities for shipping companies will generally occur in international waters) and (iii)
having regard to the level of relevant activity carried out in the Marshall Islands has (a) an adequate amount of expenditures in the Marshall Islands, (b) adequate physical presence in
the Marshall Islands and (c) an adequate number of qualified employees in the Marshall Islands.
If we fail to comply with our obligations under such regulations or any similar law applicable to us in any other jurisdictions, we could be subject to financial penalties and
spontaneous disclosure of information to foreign tax officials, revocation of the formation documents and dissolution of the applicable non-compliant Marshall Islands entity or being
struck from the register of companies, in related jurisdictions. Any of the foregoing could be disruptive to our business and could have a material adverse effect on our business,
financial conditions and operating results. Accordingly, any implementation of, or changes to, any of the economic substance regulations that impact us could increase the complexity
and costs of carrying on business in these jurisdictions, and thus could adversely affect our business, financial condition or results of operations.
We do not know (i) if the E.U. will once again add the Republic of the Marshall Islands to the list of non-cooperative jurisdictions, (ii) what actions the Republic of the Marshall
Islands may take, if any, to remove itself from such list if it should be placed back on the list of non-cooperative jurisdictions, (iii) how quickly the E.U. would react to any changes in
legislation of the Marshall Islands, or (iv) how E.U. banks or other counterparties will react while we, or any of our subsidiaries, remain as entities organized and existing under the laws
of the Republic of the Marshall Islands. The effect of the E.U. list of non-cooperative jurisdictions, and any noncompliance by us with any legislation or regulations adopted by
applicable countries to achieve removal from the list, including economic substance regulations, could have a material adverse effect on our business, financial conditions and operating
results.
It may not be possible for our investors to enforce judgments of U.S. courts against us.
We are incorporated in the Republic of the Marshall Islands. Substantially all of our assets are located outside of the United States. All of our directors and officers are non-
residents of the U.S., and all or a substantial portion of the assets of these non-residents are located outside of the U.S. As a result, it may be difficult or impossible for U.S. shareholders
to serve process within the United States upon us or to enforce a judgment upon us for civil liabilities in U.S. courts. In addition, you should not assume that courts in the countries in
which we are incorporated or where our assets are located (1) would enforce judgments of U.S. courts obtained in actions against us based upon the civil liability provisions of
applicable U.S. federal and state securities laws or (2) would enforce, in original actions, liabilities against us based upon these laws.
47

Table of Contents
Anti-takeover provisions in our organizational documents could make it difficult for our shareholders to replace or remove our current board of directors or have the effect of
discouraging, delaying, or preventing a merger or acquisition, which could adversely affect the value of our securities.
Several provisions of our amended and restated articles of incorporation and amended and restated bylaws could make it difficult for our shareholders to change the
composition of our board of directors in any one year, preventing them from changing the composition of management. In addition, the same provisions may discourage, delay, or
prevent a merger or acquisition that shareholders may consider favorable.
These provisions include:
•
authorizing our board of directors to issue “blank check” preferred stock without shareholder approval;
•
providing for a classified board of directors with staggered, three-year terms;
•
prohibiting cumulative voting in the election of directors;
•
authorizing the removal of directors only for cause and only upon the affirmative vote of the holders of two-thirds of the outstanding common shares entitled to vote
generally in the election of directors;
•
limiting the persons who may call special meetings of shareholders; and
•
establishing advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted on by shareholders at shareholder
meetings.
In addition, we have entered into a stockholders’ rights agreement, dated December 20, 2021, or the Stockholders’ Rights Agreement, pursuant to which our board of directors
may cause the substantial dilution of any person that attempts to acquire us without the approval of our board of directors.
These anti-takeover provisions, including provisions of our Stockholders’ Rights Agreement, could substantially impede the ability of our shareholders to benefit from a
change in control and, as a result, may adversely affect the value of our securities, if any, and the ability of our shareholders to realize any potential change of control premium.
Item 4.
Information on the Company
A.
History and Development of the Company
Performance Shipping Inc. (formerly Diana Containerships Inc.) is a corporation incorporated under the laws of the Republic of the Marshall Islands on January 7, 2010. Each of
our vessels is owned by a separate wholly owned subsidiary. Performance Shipping Inc. is the owner of all the issued and outstanding shares of the subsidiaries listed in Exhibit 8.1 to
this annual report. We maintain our principal executive offices at 373 Syngrou Avenue, 175 64 Palaio Faliro, Athens, Greece. Our telephone number at that address is +30 216 600 2400.
Our agent and authorized representative in the United States is our wholly owned subsidiary, established in the State of Delaware in July 2014 under the name Container Carriers (USA)
LLC and amended to change the name of the company to Performance Shipping USA LLC as of November 20, 2020, which is located at 2711 Centerville Road, Suite 400, Wilmington,
Delaware 19808. Our website is http://www.pshipping.com/. The SEC maintains a website that contains reports, proxy and information statements, and other information that we file
electronically with the SEC at http://www.sec.gov. The information contained on, or that can be accessed through, these websites is not incorporated by reference herein and does not
form part of this annual report.
Business Development, Capital Expenditures and Divestitures and Share History
On February 28, 2022, the election of Loïsa Ranunkel as a Class I Director and elections of Alex Papageorgiou and Mihalis Boutaris as Class III Directors were approved by the
requisite vote at our 2022 Annual Meeting. Symeon Palios, Giannakis (John) Evangelou and Christos Glavanis did not stand for re-election. Effective February 28, 2022, Antonios
Karavias and Reidar Brekke resigned from our board of directors, the size of our board of directors decreased from seven to five members, and Aliki Paliou was appointed as Chairperson
of our board of directors.
48

Table of Contents
On March 2, 2022, we entered into an unsecured credit facility with Mango Shipping Corp. (“Mango Shipping”), an affiliated entity whose beneficial owner is Aliki Paliou, for up
to $5.0 million, to be used for general working capital purposes. The facility, which was repayable in one year from the date of the agreement, was utilized in advances at our request and
bore interest of 9.0% per annum and commitment fees of 3.0% per annum on any undrawn amount. Arrangement fees of $0.2 million were payable on the date of the agreement.
On June 1, 2022, we completed a public offering of 508,000 units, each unit consisting of (i) one common share or a pre-funded warrant to purchase one common share at an
exercise price equal to $0.01 per common share, and (ii) one Class A Warrant to purchase one common share at an exercise price equal to $15.75 per Common Share (a “Class A Warrant”),
at a public offering price of $15.75 per unit.
In June 2022, we acquired the tanker vessel P. Sophia (formerly “Maran Sagitta”), a 2009-built Aframax tanker of 105,071 dwt for $27.6 million. The vessel was delivered to us in
July 2022.
On July 19, 2022, we issued 1,133,333 of our common shares in a registered direct offering concurrently with a private placement of warrants (the “July 2022 Warrants”)
exercisable to purchase up to 1,133,333 common shares for an exercise price of $5.25 (currently $1.65 per common share, as adjusted pursuant to the terms of the July 2022 Warrants), for
a purchase price of $5.25 per common share and July 2022 Warrant.
On August 16, 2022, in a registered direct offering, we issued 2,222,222 of our common shares and warrants to purchase up to 2,222,222 common shares (the “August 2022
Warrants”), each exercisable to purchase one common share for an exercise price of $6.75 (currently $1.65 per common share, as adjusted pursuant to the terms of the August 2022
Warrants), for a purchase price of $6.75 per share and August 2022 Warrant.
In August 2022, we acquired the tanker vessel P. Aliki (formerly “Alpine Amalia”), a 2010-built LR2 Aframax oil product tanker of 105,304 dwt, for $36.5 million. The vessel was
delivered to us in November 2022.
In September 2022, we acquired the tanker vessel P. Monterey (formerly “Phoenix Beacon”), a 2011-built Aframax tanker vessel of 105,525 dwt, for $35 million. The vessel was
delivered to us in December 2022.
In October 2022, we sold the 2007-built Aframax tanker vessel P. Fos for $34.0 million and delivered the vessel to her new owners in November 2022.
On October 17, 2022, we entered into a stock purchase agreement with Mango Shipping, pursuant to which we agreed to issue to Mango, in a private placement, 1,314,792
shares of our newly-designated Series C Preferred Shares in exchange for (i) all 657,396 Series B Preferred Shares held by Mango and (ii) the agreement by Mango to apply $4.93 million
(an amount equal to the aggregate cash conversion price payable upon conversion of such Series B Preferred Shares into Series C Preferred Shares pursuant to their terms) as a
prepayment by us of an unsecured credit facility agreement dated March 2, 2022 and made between us as borrower and Mango as lender, maturing in March 2023 and bearing interest at
9.0% per annum. We subsequently repaid the remaining amounts of $0.07 million due and terminated the credit facility. The transaction was approved by a special independent committee
of our board of directors.
In November 2022, we acquired the tanker vessel P. Long Beach (formerly “Fos Hamilton”), a 2013-built LR2 Aframax tanker vessel of 105,408 dwt, for $43.75 million. The vessel
was delivered to us in December 2022.
On November 8, 2022, our board of directors determined to effect a reverse stock split of our common shares at a ratio of one-for-fifteen. Our shareholders had previously
approved the reverse stock split at the Company’s Special Meeting of Shareholders held on November 7, 2022. The reverse stock split was effective as of the opening of trading on
November 15, 2022. All share amounts in this report, not including amounts incorporated by reference, have been retroactively adjusted to reflect this reverse stock split.
49

Table of Contents
On November 30, 2022, we regained compliance with the minimum bid price requirements for continued listing on the Nasdaq Capital Market, as a result of the closing bid price
of the Company’s common shares having been at $1.00 per share or greater for at least ten consecutive business days, from November 15, 2022 through November 29, 2022.
On December 9, 2022, we entered into an ATM Sales Agreement with Virtu Americas LLC (the “ATM Agreement”), as sales agent, pursuant to which we offered and sold, from
time to time, up to an aggregate of $30 million of our common shares. We terminated the ATM Agreement on February 27, 2023. Prior to termination, we issued and sold 365,196 common
shares under the ATM Agreement at an average price per share of $3.30, raising total gross proceeds of approximately $1.2 million, net of agent’s commissions.
On February 13, 2023, we notified our Series B preferred stockholders that pursuant to the effective registration statement on Form F-3 that we filed with the SEC on January 27,
2023, the holders of the Company’s issued and outstanding Series B Preferred Shares may at any time through and including March 15, 2023, convert, at the option of the holder, one
Series B Preferred Share, for additional cash consideration of $7.50 per converted Series B Preferred Share, into two shares of Series C Convertible Cumulative Perpetual Preferred Stock.
Upon the closing of the conversion period on March 15, 2023, 85,535 Series B preferred shares were converted to 171,070 Series C preferred shares, and we collected gross proceeds of
$0.6 million.
On February 22, 2023, the re-election of Andreas Michalopoulos and Loïsa Ranunkel, each as a Class I director was approved by the requisite vote at our 2023 Annual Meeting.
On February 28, 2023, we entered into a securities purchase agreement with certain unaffiliated institutional investors to purchase (i) 5,556,000 of our common shares, (ii) the
Series A Warrants to purchase 3,611,400 Common Shares and (iii) Series B warrants (the “Series B Warrants”) to purchase 4,167,000 Common Shares, at a purchase price of $2.25 per
common share together with the accompanying Series A and Series B Warrants in a registered direct offering. The terms of the Series A Warrants provided that, as an alternative to
exercise, they could be exchanged for common shares for no additional cash consideration under certain circumstances. The gross proceeds to us were approximately $12.5 million before
deducting the placement agent’s fees and other offering expenses. Subsequent to the closing, we issued 3,597,100 common shares in exchange for 3,597,100 Series A Warrants for no
additional cash consideration, according to the terms of the Series A Warrants.
On March 7, 2023, we entered into a shipbuilding contract with China Shipbuilding Trading Company Limited and Shanghai Waigaoqiao Shipbuilding Company Limited for the
construction of a 114,000 DWT LNG ready LR2 Aframax product/crude oil tanker for a gross contract price of $63.3 million. We expect to take delivery of the vessel (Hull 1515) in the third
quarter of 2025.
In April 2023, our board of directors authorized a share repurchase plan (the “April 2023 Repurchase Plan”) to purchase up to an aggregate of $2.0 million of our common shares.
Under the April 2023 Repurchase Plan, we repurchased a total of 2,222,936 common shares for a total amount of approximately $2.0 million, successfully completing the April 2023
Repurchase Plan in the third quarter of 2023.
On April 18, 2023, we received written notification from NASDAQ, indicating that because the closing bid price of our common stock for 30 consecutive business days was
below the minimum $1.00 per share bid price requirement for continued listing on The NASDAQ Capital Market, we were not in compliance with Nasdaq Listing Rule 5550(a)(2).
On August 7, 2023, we refinanced our existing loan facility with Nordea Bank Abp, filial i Norge (“Nordea”) by entering into a new revolving credit facility with Nordea of up to
$20.0 million. For more information regarding the new revolving credit facility, see “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Loan
Facilities—Nordea Bank Abp, Filial i Norge (Nordea).”
On August 15, 2023, we regained compliance with the minimum bid price requirements for continued listing on the Nasdaq Capital Market, as a result of the closing bid price of
the Company’s common shares having been at $1.00 per share or greater for at least ten consecutive business days, from August 1, 2023 through August 14, 2023. We regained such
compliance as a result of an organic increase in the market price of our shares, without the need to effect a reverse stock split.
50

Table of Contents
In August 2023, our board of directors authorized a new share repurchase plan (the “August 2023 Repurchase Plan”) to repurchase up to $2.0 million of our outstanding
common shares. As of its expiration on August 31, 2024, 327,100 common shares were repurchased for a total amount of approximately $0.7 million under the August 2023 Repurchase
Plan.
On September 29, 2023, 100,000 of the July 2022 Warrants and 100,000 of the August 2022 Warrants were exercised by their holders, generating net proceeds of $0.3 million for
us.
On October 11, 2023, Sphinx Investment Corp., a corporation incorporated under the laws of the Republic of the Marshall Islands (the “Offeror”), launched a cash tender offer to
purchase from all of our outstanding common shares and associated preferred stock purchase rights issued pursuant to our Stockholders’ Rights Agreement (the “Rights” and, together
with the common shares, the “Shares”), at a price of $3.00 per Share (without interest and less any applicable withholding taxes, upon the terms and subject to the conditions set forth in
(a) the Amended and Restated Offer to Purchase, dated October 30, 2023, as amended and supplemented by the Supplement to the Amended and Restated Offer to Purchase dated
December 5, 2023, and as further amended and (b) the related revised Notice of Guaranteed Delivery and the related revised Letter of Transmittal, as set forth in the Offeror’s Tender Offer
Statement on Schedule TO filed with the SEC on October 11, 2023, as amended) (the “Offer”). Unless the Offer is extended by the Offeror, the Offer and withdrawal rights thereunder will
expire at 11:59 p.m., New York City Time, on July 31, 2025.
In December 2023, we sold the 2007-built Aframax tanker vessel P. Kikuma for $39.3 million and delivered the vessel to her new owners.
On December 18, 2023, we completed the approximately $44.6 million voluntary prepayment of all of our existing loans with Piraeus Bank S.A. and released the security over our
vessels P. Monterey, P. Yanbu and P. Sophia. The prepayment was completed through the deployment of our excess liquidity.
On December 18, 2023, we entered into two shipbuilding contracts with China Shipbuilding Trading Co. Ltd. and Shanghai Waigaoqiao Shipbuilding Co. Ltd. for the
construction of two 114,000 DWT LNG-ready LR2 Aframax product/crude oil tanker vessels, for a purchase price of $64.845 million per vessel, payable in instalments, net of third-party
commission. The vessels (Hulls 1596 and 1597) are expected to be delivered in the third quarter of 2025 and in the first quarter of 2026, respectively.
During 2023, 57,490 Series C Preferred Shares were converted at the option of their holders into 1,064,207 common shares, calculated with an adjusted conversion price of
$1.3576.
On March 8, 2024, we entered into time charter contracts with Clearlake Shipping Pte Ltd for our three newbuilding Aframax tanker vessels. Each employment will be for a firm
period of five years with the charterer’s option to extend for a sixth and seventh year. The gross charter rate will be US$31,000 per vessel per day for the firm period and a base rate plus
profit share for the optional periods, if declared. Employment is expected to commence upon delivery of the vessels.
On April 30, 2024, we entered into a shipbuilding contract with Jiangsu Yangzijiang Shipbuilding Group Co., Ltd., Jiangsu New Yangzi Shipbuilding Co., Ltd., and Jiangsu Yangzi
Xinfu Shipbuilding Co., Ltd. for the construction of a scrubber fitted 75,000 DWT LR1 chemical/product oil tanker for a gross contract price of $56.5 million, with an option for the final
purchase price to be reduced to $54.1 million, should certain technical conditions exist at delivery. We expect to take delivery of the vessel (Hull 1624) in the first quarter of 2027.
On July 16, 2024, we entered into a sale and leaseback agreement with an unaffiliated Japanese third party for one of our newbuild LR2 Aframax tanker vessels. The bareboat
financing amount totals $44.3 million and, as part of this agreement, the vessel was sold and chartered back on a bareboat basis for an eight-year period from delivery at bareboat charter
rates equivalent to 96 monthly installments of $7,132 per day and a balloon payment of approximately $23.7 million payable together with the last installment, with an implied interest rate
of Term SOFR plus 2.425% per annum. We have continuous options to repurchase the vessel at predetermined rates following the second anniversary of the bareboat charter.
51

Table of Contents
On October 24, 2024, we entered into a sale and leaseback agreement with an unaffiliated third party for one of our newbuild LR2 Aframax tanker vessels. The bareboat financing
amount totals approximately US$45.39 million. As part of this agreement, the vessel was sold and then chartered back on a bareboat basis for a ten-year period starting from delivery from
the shipyard. The bareboat charter includes 120 monthly installments at a fixed rate of US$211,500 plus a variable rate calculated monthly at an implied interest rate of SOFR plus 2.1% per
annum. Additionally, a balloon payment of approximately $20 million payable together with the last installment for the repurchase of the vessel. We have continuous options to
repurchase the vessel at predetermined rates following the second anniversary of the bareboat charter.
On December 17, 2024, the re-election of Aliki Paliou as a Class II Director was approved by the requisite vote at our 2024 Annual Meeting.
During 2024, 4,460 Series C Preferred Shares were converted at the option of their holders into 82,482 common shares, calculated with an adjusted conversion price of $1.3576.
During 2024, 70,000 of the Series B Warrants were exercised by their holders, generating net proceeds of $0.2 million for us.
Recent Developments
Effective January 2025, our fleet manager, Unitized Ocean Transport Limited has been renamed to Performance Shipping Management Inc.
On March 5, 2025, we entered into a sale and leaseback agreement with an unaffiliated third party for one of our newbuild LR2 Aframax tanker vessels. The bareboat financing
amount totals $45 million and, as part of this agreement, the vessel will be sold and chartered back on a bareboat basis for an eight-year period from delivery at bareboat charter rates
equivalent to 96 monthly installments of $6,850 per day and a balloon payment of approximately $25 million payable together with the last installment, with an implied interest rate of Term
SOFR plus 2.05% per annum. We have continuous options to repurchase the vessel at predetermined rates following the second anniversary of the bareboat charter.
On March 13, 2025, we entered into a Memorandum of Agreement to sell the 2011-built, 105,400 dwt Aframax tanker vessel, P. Yanbu, to an unaffiliated third party for a gross
sale price of $39 million. The vessel was delivered to her new owner on March 24, 2025.
On April 7, 2025, we announced that we entered into a forward sale and exclusivity agreement with an unaffiliated third party, based on which the buyers are granted exclusive
rights to submit a bid for the conversion of the vessel P. Sophia, in an auction for the provision of a Floating Production Storage and Offloading (FPSO) vessel for charter to a national
oil company (the “Offshore Project”). If the buyer is awarded the Offshore Project by the expiration of the auction on April 5, 2026, the buyer will purchase the P. Sophia, for a gross sale
price of $36.05 million. Additionally, if the vessel is delivered to the buyer on or before September 30, 2025, the gross sale price will be increased by $1.0 million.
B.
Business Overview
We provide global shipping transportation services through the ownership of tanker vessels. As of the date of this annual report, our fleet consists of six Aframax tanker
vessels with a combined carrying capacity of 630,519 DWT and a weighted average age of approximately 13.9 years. Additionally, we expect to take delivery of two newbuild
LR2/Aframax tanker vessels in the third quarter of 2025, one newbuild LR2 Aframax product/crude oil tanker vessel in January 2026, and one newbuild eco-design LR1 tanker in the first
quarter of 2027. Founded in January 2010, our business initially focused on the ownership of container vessels. Over time, we have transitioned to a purely tanker fleet, successfully
exiting the containership sector in August 2020.
During 2024, 2023 and 2022, we had a fleet utilization of 99.2%, 98.7% and 96.8% respectively, our vessels achieved a daily time charter equivalent rate of $32,954, $36,954 and
$29,579, respectively, and we generated revenues from our vessels of $87.5 million, $108.9 million and $75.1 million, respectively.
52

Table of Contents
Set forth below is summary information concerning our operating fleet as of April 14, 2025.
Vessel
Year of
Build
Capacity
Builder
Charter Type
 
 
 
Aframax Tanker Vessels
 
BLUE MOON
2011
104,623 DWT
Sumitomo Heavy Industries Marine & Engineering Co., LTD.
Time charter
BRIOLETTE
2011
104,588 DWT
Sumitomo Heavy Industries Marine & Engineering Co., LTD.
Time charter
P. SOPHIA
2009
105,071 DWT
Hyundai Heavy Industries Co. LTD.
Pool
P. ALIKI
2010
105,304 DWT
Hyundai Heavy Industries Co. LTD.
Time charter
P. MONTEREY
2011
105,525 DWT
Hyundai Heavy Industries Co. LTD.
Time charter
P. LONG BEACH
2013
105,408 DWT
Hyundai Heavy Industries Co. LTD.
Time charter
Management of Our Fleet
The business of Performance Shipping Inc. is the ownership of vessels. Performance Shipping Inc. wholly owns, directly or indirectly, the subsidiaries which own the vessels
that comprise our fleet. The holding company sets the general overall direction for the company and interfaces with various financial markets. The day-to-day commercial and technical
management of our fleet, as well as the provision of administrative services relating to our fleet’s operations, have been carried out since March 1, 2013, by Performance Shipping
Management Inc. (ex Unitized Ocean Transport Limited), our in-house fleet manager. Pursuant to an Administrative Services Agreement, we pay our in-house fleet manager a fixed
monthly administrative fee of $10,000 in exchange for providing us with accounting, administrative, financial reporting, and other services necessary for the operation of our business. In
addition, in exchange for providing us with day-to-day commercial and technical services, we pay our fleet manager a commission of 2.00% of our gross revenues, a fixed management
fee of $15,000 per month for each vessel in operation, and a fixed monthly fee of $7,500 for any vessels under construction or laid-up. For as long as part of the management services
were assigned to third-party managers (see below), we paid to our fleet manager a reduced monthly management fee within the range of $1,000 to $5,000, and a commission of 1.00% or
2.00% of our gross revenues, depending on the level of involvement of the third-party managers. Furthermore, for as long as our vessels are chartered under pool arrangements, our fleet
manager receives no commission on the vessels’ gross revenues. All management fees and commissions payable to our fleet manager are considered inter-company transactions and are,
therefore, eliminated from our consolidated financial statements.
Business Strategy
Our primary objective is to operate our business on behalf of our shareholders in a manner that is consistent with our business strategy. The key elements of our strategy are:
Fleet
Modern, High Specification Fleet. We intend to operate a fleet of modern, high specification tanker vessels that include high cargo-carrying capacity and competitive fuel efficiency.
We believe these features will be commercially attractive to charterers because the high specifications will result in cost-effective vessels with increased flexibility, and we expect these
factors will, in turn, maximize our vessels’ utilization rates. We believe that owning a versatile, modern, well-maintained fleet reduces operating costs, improves the quality of service we
deliver, and enables us to secure employment with high-quality counterparties. The four vessels in our newbuilding program will significantly reduce our fleet age profile and will be
equipped with scrubbers and water ballast treatment systems, will feature the latest high-specification engines and comply with stringent emission requirements. Our decision to acquire
these three identical LR2 Aframax “sister” vessels, along with our first LR1 chemical/product oil tanker, reflects our focus on fuel efficiency and our commitment to participate in the
energy transition. As we grow our fleet, we intend to continue acquiring secondhand vessels built in well-established shipyards in South Korea, Japan, and China with high
specifications and fuel efficiency standards. Depending on market conditions, we may continue to opportunistically purchase newbuild vessels equipped with the latest high
specification engines and meeting the stringent emission requirements, which will be constructed in large and reputable shipyards and will result in an even more modern and highly
competitive fleet composition.
53

Table of Contents
Growing Sector Presence. While we cannot assure you that we will do so, we intend to grow our fleet over time primarily through selective acquisitions of vessels. This will increase our
market presence and enhance our attractiveness to charterers and other customers, including major oil companies, oil traders, and refineries. We believe that by expanding our fleet, we
will gain a significant presence in the tanker vessel market, enabling us to offer customers greater flexibility and a higher level of service while achieving greater efficiencies through
economies of scale and enhanced vessel utilization.
Continuous Fleet Renewal. We are focused on renewing our fleet as our vessels age. We plan to acquire younger vessels as we dispose of our older ones to continuously renew and
replace our fleet. We expect that this will, in part, be funded through our mandatory debt repayments and replacement reserves and will enable us to maintain a fleet of modern, high-
specification tankers.
Secondhand Acquisitions and Construction. We expect to grow our fleet primarily through selective acquisitions of secondhand tanker vessels from unaffiliated third parties and
through entering into newbuilding contracts. We may also acquire vessels upon their delivery from the shipyard. During 2023 and 2024, we entered into four shipbuilding contracts for
the construction of an eco-design LR1, and three LR2 tanker vessels, which we expect to take gradually delivery of from the third quarter 2025 to the first quarter of 2027. When
evaluating acquisitions, we will consider and analyze our expectation of fundamental developments in the seaborne transportation of crude oil and refined petroleum products, changes
in trading patterns, the cash flow currently earned and our expectation of future cash flows to be earned by the target vessel relative to its value, as well as its condition and technical
specifications.
Management
Significant Management Expertise. We believe that our executive management team has extensive public company and vessel operations experience. In the competitive tanker vessel
industry, charterers are focused on the quality of vessel operators and we believe that our wholly owned subsidiary fleet manager has a reputation as a respected commercial and
technical manager. The long experience of our executive, commercial and technical management team ensures we have established relationships with charterers, financial institutions,
insurers, suppliers, ship repair yards, and other industry participants. We believe that these relationships will assist us in further developing our position as a sought-after business
partner with our charterers and provide access to attractive acquisition opportunities.
Highly Efficient Operations. We believe that we have established our Company as a cost-efficient and reliable operator due to the skill of our executive management team, backed by an
experienced commercial and technical team comprised of industry veterans, and the quality and maintenance standards of our fleet. We intend to actively monitor and seek to control
vessel operating expenses without compromising the quality of our vessels by utilizing regular inspection and maintenance programs, employing and retaining qualified crew members,
and taking advantage of the economies of scale that we expect to enjoy when we acquire additional vessels.
Commercial
Balanced Fleet Deployment. Our commercial policy comprises of i) spot exposure, often through pool arrangements, via voyage charters and short-term time charters with a duration of
less than 12 months and ii) period exposure via medium to long term charters with a duration of up to 60 months. When available, we will also consider entering hybrid contracts such as
time charters with a fixed floor rate and profit-sharing participation in the spot market. Our commercial policy should provide us and our shareholders to with less exposure to cyclical
fluctuations in charter rates. Still, the spot market is very volatile, and our strategy will also expose us and our shareholders to periods when spot rates decline below the cash breakeven
level of our fleet. In line with our strategy, our current fleet of tankers operate and are expected to operate under voyage charters and through pool arrangements and period time
charters.
Established Commercial Relationships. We expect to capitalize on our commercial and technical management team’s long-standing relationships with leading charterers including
Aramco Trading Company, Marathon Maritime Company, Exxon Mobil, and AET Tankers. We believe that our experienced management team will assist us in securing employment for
our vessels and will provide us with an established and diverse customer base in both western and eastern geographical basins. Following their delivery to us, we expect all our vessels
to be acceptable for business by one or more major oil companies, oil traders, and refineries based on their inspections of our vessels and their review of our operational procedures.
54

Table of Contents
Financial
Maintain Low Leverage. Our policy is to incur an amount of debt that, upon its incurrence, does not cause our ratio of net debt-to-market value of our fleet to exceed our target of 35%.
We believe that maintaining a level of indebtedness at or below our target policy will enable us to operate effectively in adverse market conditions. On December 31, 2024, our
outstanding debt was $47.7million, we held approximately $71.3 million in cash and cash equivalents (including restricted cash of $1.0 million), and our ratio of net debt to the value of our
fleet was approximately -8%%. However, despite our current negative net leverage, the possible new debt financing, which is expected to be used to partially fund the construction costs
of our newbuilding vessels and will be incurred at the time of the vessels’ delivery to us, may increase our net debt-to-market value of our fleet, at or above our target level.
Equity Capital Reliance. Depending on market conditions, we may partially rely on follow-on offerings of common shares to fund the acquisition of additional vessels. Consistent with
our low leverage strategy, we may enter into new credit agreements or access the public or private debt markets to fund the remaining portion of these acquisitions. The issuance of
common shares to expand our fleet may generally increase our market capitalization and boost trading activity for our common shares, but there can be no assurances that such
increases will occur or be sustained. In addition, our potential reliance on follow-on offerings of our common shares may significantly dilute existing shareholders.
Governance
In-House Management. We wholly own, directly or indirectly, the subsidiaries that own the vessels comprising our fleet. Our executive management team’s responsibilities include
working to ensure the implementation of our business strategy, general corporate oversight, interfacing with financial markets, and supervising the day-to-day commercial and technical
management teams. The day-to-day commercial and technical management of our fleet, and the provision of administrative services relating to the fleet’s operations, is carried out by our
wholly owned subsidiary company, Performance Shipping Management Inc. (ex Unitized Ocean Transport Limited), our fleet manager. For accounting and administrative purposes only,
in exchange for providing us with commercial and technical services, we pay to our fleet manager  certain fees and commissions. These amounts are considered inter-company
transactions and are, therefore, eliminated from our consolidated financial statements.
Transparent Corporate Structure. In addition to performing all management functions in-house, we maintain a majority independent board of directors comprising of individuals with
extensive experience in all aspects of our business. We do not intend to enter into any transactions with related parties for the acquisition or disposal of vessels. Members of our
executive, commercial, and technical management teams have no other ownership in other tanker vessel companies, and do not have any executive positions in other public or private
shipping companies.
Our Customers
Our customers include national, regional, and international companies, such as ST Shipping Transport, Aramco Trading Company, Marathon Shipping, Exxon Mobil, AET
Tankers and Maersk Tankers. In 2024, four of our charterers accounted for 80% of our revenues: ST Shipping Transport (26%), Aramco Trading Company (16%), Marathon Maritime
Company (16%) and Maersk Tankers (ex Penfield Tankers (Aframax) LLC) (22%). In 2023, four of our charterers accounted for 84% of our revenues: ST Shipping Transport (28%),
Aramco Trading Company (11%), Signal Maritime Aframax Pool LTD (13%) and Penfield Tankers (Aframax) LLC (32%). In 2022, two of our charterers accounted for 59% of our revenues:
Signal Maritime Aframax Pool LTD (41%) and Penfield Tankers (Aframax) LLC (18%). We believe that developing strong relationships with the end-users of our services allows us to
better satisfy their needs with appropriate and capable vessels. A prospective charterer’s financial condition, creditworthiness, reliability, and track record are important factors in
negotiating our vessels’ employment.
55

Table of Contents
The Tanker Shipping Industry
The oil tanker shipping industry constitutes a vital link in the global energy supply chain, in which tanker vessels play a critical role by carrying large quantities of crude oil.
The rationale behind this is that only tanker vessels can efficiently and economically carry crude oil from one continent to the other and across the oceans. The shipping of crude oil is
the only transportation method that implies the lower cost per oil barrel compared to other methods, such as pipelines.
An oil tanker shipping company earns revenues by the freight rates paid for transportation capacity. Freight is paid for the movement of cargo between a load port and a
discharge port. The cost of moving the ship from a discharge port to the next load port is not directly compensated by the charterers in the freight payment but is an expense of the
owners if not on time charter.
Types of Crude Tanker Vessels
The main categories of crude tanker vessels are:
•
VLCCs, with an oil cargo carrying capacity in excess of 200,000 dwt (typically 300,000 to 320,000 dwt or approximately two million barrels). VLCCs generally trade on long-
haul routes from the Middle East and West Africa to Asia, Europe, and the U.S. Gulf or the Caribbean.
•
Suezmax tankers, with an oil cargo carrying capacity of approximately 120,000 to 200,000 dwt (typically 150,000 to 160,000 dwt or approximately one million barrels). Suezmax
tanker vessels are engaged in a range of crude oil trades across a number of major loading zones.
•
Aframax tankers, with an oil cargo carrying capacity of approximately 80,000 to 120,000 dwt (or approximately 500,000 barrels). Aframax tanker vessels are employed in
shorter regional trades, mainly in Northwest Europe, the Caribbean, the Mediterranean, and Asia.
Tanker Newbuilding Prices
The factors which influence new-build prices include ship type, shipyard capacity, demand for ships, “berth cover”, i.e., the forward book of business of shipyards, buyer
relationships with the yard, individual design specifications, including fuel efficiency or environmental features and the price of ship materials, engine and machinery equipment and
particularly the price of steel.
Tanker Secondhand Prices
Second-hand vessel prices are primarily influenced by trends in the supply and demand for vessel capacity. During extended periods of high demand, indicated by elevated
charter rates, secondhand vessel values tend to appreciate. Conversely, during periods of low demand, reflected by lower charter rates, vessel values tend to decline. Vessel values are
also influenced by age, specifications and the replacement cost (new-build price) of vessels up to five years old.
The sale and purchase (S&P) market, where vessels are sold and bought through specialized brokers, determines vessel values on a daily basis. The S&P market is transparent
and liquid, with a significant number of vessels changing hands annually.
Values for younger vessels tend to fluctuate on a percentage basis less than values for older vessels. This is due to the fact that younger vessels with a longer remaining
economic life are less susceptible to the level of charter rates than older vessels with limited remaining economic life.
The Crude Oil Tanker Freight Market
Charter Types
Employment of oil tanker vessels occurs through the following chartering options:
56

Table of Contents
Bareboat Charter: In this charter type, vessels are usually employed for several years. All voyage related costs such as bunkers, port dues, and daily operating expenses are
paid by the charterer. The owner of the vessel is entitled to monthly charter hire payments and covers the capital cost associated with the vessel.
Time Charter: Involves the use of the vessel for a number of months or years or for a trip between specific delivery and redelivery positions. The charterer covers all voyage
related costs while the owner receives monthly charter hire payments on a per day basis and pays all operating expenses and capital costs of the vessel.
Pool Charter: In this charter type, the vessel’s owner earns a portion of total revenues generated by the pool, net of expenses incurred by the pool. The amount allocated to
each pool participant vessel, is determined in accordance with an agreed-upon formula, which is determined by the margins awarded to each vessel in the pool based on the vessel’s age,
design and other performance characteristics.
Spot or Voyage Charter: Vessels are used for a single voyage for the carriage of a specific amount and type of cargo on a load port to discharge port. The owner covers the
repositioning cost of the ship as well as all expenses, namely voyage, operating, and capital costs of the ship.
Tanker Vessels Charter Rates
The main factors affecting vessel charter rates are primarily the supply and demand for tanker shipping. The shorter the charter period, the greater the vessel charter rate is
affected by the current supply to demand balance and by the current phase of the market cycle (high point or low point). For longer charter periods, vessel charter rates tend to be more
stable and less cyclical because the period may cover not only a particular phase of a market cycle but a full market cycle or several market cycles. Other factors affecting charter rates
include the age and characteristics of the ships (fuel consumption, speed), the price of new-built and secondhand ships (buying as an alternative to chartering ships), and market
conditions.
Seasonality
We operate our vessels in markets that have historically exhibited seasonal variations in demand and, as a result, charter rates. Historically, peaks in tanker vessel demand quite
often precede seasonal oil consumption peaks, as refiners and suppliers anticipate consumer demand. Seasonal peaks in oil demand can broadly be classified into two main categories:
(1) increased demand prior to Northern Hemisphere winters as heating oil consumption increases and (2) increased demand for gasoline prior to the summer driving season in the United
States. Unpredictable weather patterns and variations in oil reserves disrupt tanker scheduling. Unpredictable weather patterns and variations in oil reserves disrupt tanker scheduling.
This seasonality may result in quarter-to-quarter volatility in our operating results, as many of our vessels trade in the spot market. Seasonal variations in tanker vessel demand will
affect any spot market-related rates that we may receive.
Environmental and Other Regulations in the Shipping Industry
Government regulation and laws significantly affect the ownership and operation of our fleet. We are subject to international conventions and treaties, national, state, and local
laws and regulations in force in the countries in which our vessels may operate or are registered relating to safety and health and environmental protection, including the storage,
handling, emission, transportation, and discharge of hazardous and non-hazardous materials, and the remediation of contamination and liability for damage to natural resources.
Compliance with such laws, regulations, and other requirements, entails significant expense, including vessel modifications and implementation of certain operating procedures.
Our vessels are subject to both scheduled and unscheduled inspections by a range of governmental and private entities. These include local port authorities, national
authorities such as Port State Control or the U.S. Coast Guard (“USCG”), harbormasters, classification societies, flag state administrations, and, notably, charterers who conduct their
own assessments through terminal inspections and the SIRE 2.0 inspection regime.
SIRE 2.0, launched globally in Q4 2024 by the Oil Companies International Marine Forum, is the next-generation Ship Inspection Report Programme. It replaces the legacy SIRE
model with a risk-based, real-time digital inspection process tailored to each vessel's operational and technical profile. Inspections are conducted by specially trained and accredited
inspectors using a dynamic Vessel Inspection Questionnaire via tablet-based technology. The system aims to enhance safety, transparency, and environmental compliance across oil,
chemical, and gas tanker operations.
57

Table of Contents
Compliance with inspection standards requires the Company to maintain all necessary permits, licenses, certificates, and other operational authorizations. Failure to meet these
requirements may result in increased costs, delays, or the temporary suspension of vessel operations.
Increasing environmental concerns have created a demand for vessels that conform to stricter environmental standards. We are required to maintain operating standards for all
of our vessels that emphasize operational safety, quality maintenance, continuous training of our officers and crews, and compliance with U.S. and international regulations. We believe
that the operation of our vessels is in substantial compliance with applicable environmental laws and regulations and that our vessels have all material permits, licenses, certificates, or
other authorizations necessary for the conduct of our operations. However, because such laws and regulations frequently change and may impose increasingly stricter requirements, we
cannot predict the ultimate cost of complying with these requirements or the impact of these requirements on the resale value or useful lives of our vessels. In addition, a serious future
marine incident that causes significant adverse environmental impact could result in additional legislation or regulation that could negatively affect our profitability.
International Maritime Organization
The International Maritime Organization, the United Nations agency for maritime safety and the prevention of pollution by vessels (the “IMO”), has adopted the International
Convention for the Prevention of Pollution from Ships, 1973, as modified by the Protocol of 1978 relating thereto, collectively referred to as MARPOL 73/78 and herein as “MARPOL,”
the International Convention for the Safety of Life at Sea of 1974 (“SOLAS Convention”), International Convention on Standards of Training, Certification and Watchkeeping for
Seafarers, or STCW, and the International Convention on Load Lines of 1966 (the “LL Convention”). MARPOL establishes environmental standards relating to oil leakage or spilling,
garbage management, sewage, air emissions, handling and disposal of noxious liquids, and the handling of harmful substances in packaged forms. MARPOL applies to vessels of any
type, operating in the marine environment, and is broken into six Annexes, each of which regulates a different source of pollution. Annex I relates to oil leakage or spilling; Annexes II
and III relate to harmful substances carried in bulk in liquid or packaged form, respectively; Annexes IV and V relate to sewage and garbage management, respectively; and Annex VI,
lastly, relates to air emissions. Annex VI was separately adopted by the IMO in September of 1997.
Since 2014, the IMO’s Marine Environmental Protection Committee, or the MEPC, amendments to Annex I Condition Assessment Scheme, or “CAS.” have require compliance
with the 2011 International Code on the Enhanced Programme of Inspections during Surveys of Bulk Carriers and Oil Tankers, or “ESP Code,” which provides for enhanced inspection
programs. Amendments to the ESP Code addressing inconsistencies on examination of ballast tanks at annual surveys for bulk carriers and oil tankers will become effective July 1, 2024.
Air Emissions
Annex VI to MARPOL addresses air pollution from vessels. Effective May 2005, Annex VI sets limits on sulfur oxide and nitrogen oxide emissions from all commercial vessel
exhausts and prohibits “deliberate emissions” of ozone-depleting substances (such as halons and chlorofluorocarbons), emissions of volatile compounds from cargo tanks, and the
shipboard incineration of specific substances. Annex VI also includes a global cap on the sulfur content of fuel oil and allows for special areas to be established with more stringent
controls on sulfur emissions, as explained below. Emissions of “volatile organic compounds” from certain vessels and the shipboard incineration (from incinerators installed after
January 1, 2000) of certain substances (such as polychlorinated biphenyls) are also prohibited. We believe that all our vessels are currently compliant in all material respects with these
regulations.
58

Table of Contents
The IMO’s Marine Environment Protection Committee, or MEPC, adopted amendments to Annex VI regarding emissions of sulfur oxide, nitrogen oxide, particulate matter and
ozone-depleting substances which entered into force on July 1, 2010. The amended Annex VI seeks to further reduce air pollution by, among other things, implementing a progressive
reduction of the amount of sulfur contained in any fuel oil used on board ships. Effective January 1, 2020, there has been a global limit of 0.5% m/m sulfur oxide emissions limit (reduced
from 3.50%). This limitation can be met by using low-sulfur compliant fuel oil, alternative fuels or exhaust gas cleaning systems. Ships are now required to obtain bunker delivery notes
and International Air Pollution Prevention (“IAPP”) Certificates from their flag states that specify sulfur content. Additionally, at MEPC 73, amendments to Annex VI to prohibit the
carriage of bunkers above 0.5% sulfur on ships became effective on March 1, 2020. Fuels with higher sulfur content than required by Reg. 14 of Annex VI can still be delivered to a ship,
provided the ship uses equivalent measures, such as an EGCS. Additional amendments to Annex VI revising, among other terms, the definition of “Sulphur content of fuel oil” and “low-
flashpoint fuel” and pertaining to the sampling and testing of onboard fuel oil, became effective in April 2022. These regulations subject ocean-going vessels to stringent emissions
controls and may cause us to incur substantial costs.
MEPC 77 adopted a non-binding resolution which urges member states and ship operators to voluntarily use distillate or other cleaner alternative fuels or methods of
propulsion that are safe for ships and could contribute to the reduction of black carbon emissions from ships when operating in or near the Arctic.
Emission Control Areas (“ECAs”) are designated maritime zones where stricter limits on sulfur oxide (SOx) emissions apply. Since January 1, 2015, vessels operating within an
ECA have been prohibited from using fuel with a sulfur content exceeding 0.10% m/m. Annex VI of the MARPOL Convention outlines procedures for designating new ECAs and sets the
applicable sulfur standards.
Currently, the IMO has designated four ECAs: (i) the Baltic Sea, (ii) the North Sea, (iii) the North American area, and (iv) the United States Caribbean Sea area. In December 2022, the
MEPC adopted a resolution establishing the entire Mediterranean Sea as a new ECA. These rules entered into force on May 1, 2024, though vessels operating in the Mediterranean ECA
are exempt from the 0.10% sulfur standard until July 1, 2025.
Further amendments adopted at MEPC 82 designate the Canadian Arctic and the Norwegian Sea as ECAs, with enforcement beginning March 1, 2026. Vessels operating in these zones
will be subject to enhanced emission control requirements, which may lead to increased fuel costs and capital expenditures, particularly due to the use of low-sulfur fuel or emission
abatement technologies.
Additionally, some coastal regions in China have implemented local sulfur emission restrictions that may exceed international standards. If additional ECAs are approved by the
IMO, or if stricter emissions rules are adopted by the U.S. Environmental Protection Agency (“EPA”) or relevant U.S. states, the Company may face material increases in compliance
costs, including those related to retrofitting, fuel sourcing, or operational adjustments.
MEPC 79 adopted amendments to Annex VI on the reporting of mandatory values related to the implementation of the IMO short-term GHG reduction measure, including
attained Energy Efficiency Existing Ship Index (“EEXI”), carbon intensity indicator (“CII”) and rating values to the IMO DCS, which became effective May 1, 2024. MEPC 80 adopted the
2023 IMO Strategy on Reduction of GHG Emissions from Ships with enhanced targets to mitigate harmful emissions. The revised IMO GHG Strategy comprises a common ambition to
ensure an uptake of alternative zero and near-zero GHG fuels by 2030 and to achieve net-zero emissions from international shipping by 2050. In March 2024, MEPC 81 agreed on a draft
outline of an ‘IMO net-zero framework’ for cutting GHG emissions from international shipping, which lists regulations under MARPOL to be adopted or amended to allow a new global
pricing mechanism for maritime GHG emissions. At the conclusion of MEPC 82, a draft legal text was used as a basis for ongoing talks about mid-term GHG reduction measures, which are
expected to be adopted in 2025. The proposed mid-term measures include a goal-based marine fuel standard, phasing in the mandatory use of fuels with less GHG intensity, and a global
GHG emission pricing mechanism.
Amended Annex VI also establishes new tiers of stringent nitrogen oxide emissions standards for marine diesel engines, depending on their date of installation. Now Annex VI
provides for a three-tier reduction in NOx emissions from marine diesel engines, with the final tier (or Tier III) to apply to engines installed on vessels constructed on or after January 1,
2016 and which operate in the North American and U.S. Caribbean Sea ECA as well as ECAs designated in the future by the IMO. At MEPC 70 and MEPC 71, the MEPC approved the
North Sea and Baltic Sea as ECAs for nitrogen oxide for ships built on or after January 1, 2021. The EPA promulgated equivalent (and in some senses stricter) emissions standards in late
2009. Additionally, amendments to Annex II, which strengthen discharge requirements for cargo residues and tank washings in specified sea areas (including North West European
waters, the Baltic Sea area, Western European waters and the Norwegian Sea), came into effect in January 2021. If other ECAs are approved by the IMO, or other new or more stringent
requirements relating to emissions from marine diesel engines or port operations by vessels are adopted by the EPA or the states where we operate, compliance with these regulations
could entail significant capital expenditures or otherwise increase the costs of our operations.
59

Table of Contents
As determined at the MEPC 70, Regulation 22A of MARPOL Annex VI became effective as of March 1, 2018, and requires ships above 5,000 gross tonnage to collect and report
annual data on fuel oil consumption to an IMO database, with the first year of data collection having commenced on January 1, 2019. The IMO used such data as the first step in its
roadmap (through 2023) for developing its strategy to reduce greenhouse gas emissions from ships, as discussed further herein. Amendments to Annex VI requiring bunker delivery
notes to include a flashpoint of fuel oil or a statement that the flashpoint has been measured at or above 70°C as mandatory information, became effective May 1, 2024. Pursuant to MPC
80, in July 2023, the IMO adopted the 2023 IMO Strategy on Reduction of GHG Emissions from Ships, which identifies a number of levels of ambition, including (1) decreasing the carbon
intensity from ships through implementation of further phases of energy efficiency for new ships; (2) reducing carbon dioxide emissions per transport work, as an average across
international shipping, by at least 40% by 2030; and (3) pursuing net-zero GHG emissions by or around 2050. At the conclusion of MEPC 82, a draft legal text was used as a basis for
ongoing talks about mid-term GHG reduction measures, which are expected to be adopted in 2025. The proposed mid-term measures include a goal-based marine fuel standard, phasing in
the mandatory use of fuels with less GHG intensity, and a global GHG emission pricing mechanism.
As of January 1, 2013, MARPOL made mandatory certain measures relating to energy efficiency for ships. All ships are now required to develop and implement Ship Energy
Efficiency Management Plans (“SEEMPs”), and new ships must be designed in compliance with minimum energy efficiency levels per capacity mile as defined by the Energy Efficiency
Design Index (“EEDI”). Under these measures, by 2025, all newbuild ships built are required to be 30% more energy-efficient than those built-in 2014. Additionally, MEPC 75 adopted
amendments to MARPOL Annex VI which brought forward the effective date of the EEDI’s “phase 3” requirements from January 1, 2025, to April 1, 2022, for several ship types, including
gas carriers, general cargo ships, and LNG carriers. MEPC 81 adopted amendments to the guidelines for the development of SEEMPs, including methodology for collecting data. These
amendments will go into effect on August 1, 2025.
Additionally, MEPC 76 adopted amendments to Annex VI which impose new regulations to reduce greenhouse gas emissions from ships. The revised Annex VI entered into
force in November 2022, and includes requirements to assess and measure the energy efficiency of all ships and set the required attainment values, to reduce the carbon intensity of
international shipping. The requirements include (1) a technical requirement with the goal of reducing carbon intensity based on a new EEXI, and (2) operational carbon intensity
reduction requirements based on a new operational CII. The attained EEXI is required to be calculated for ships of 400 gross tonnage and above, in accordance with different values set
for ship types and categories. With respect to the CII requirement, which took effect January 1, 2023, ships of 5,000 gross tonnage are required to document and verify their actual annual
operational CII achieved against a determined required annual operational CII. All ships that fall under the new CII regime have to have a CII rating of C or above in order to be
compliant. Ships that have a CII rating of D for three consecutive years or E, are required to submit a corrective action plan, to show how the required index (C or above) would be
achieved or else they will be deemed non-compliant. The EEXI and CII certification requirements became effective in January 1, 2023. We have conducted a thorough baseline evaluation
of the current CII ratings of all vessels in the fleet. This includes analyzing historical data on fuel consumption, distances traveled, and cargo loads. We will use it to set clear
performance improvement targets for each vessel based on their baseline CII ratings. To achieve this the Company is currently investigating technologies to install advanced
performance monitoring systems on vessels to collect real-time data on fuel consumption, speed, and emissions. We will use this data to optimize operational efficiency and track
progress toward CII targets. We are also cooperating with the vessel’s charterers and commercial operators to implement speed optimization strategies, considering weather routing to
reduce fuel consumption while maintaining operational schedules, and collaborating with industry partners to share best practices.
Additionally, MEPC 76 adopted amendments requiring ships of 5,000 gross tonnage and above to revise their SEEMP to include a methodology for calculating the ship’s
attained annual operation CII and the required annual operational CII, on or before June 1, 2023. MEPC 76 also approved amendments to MARPOL Annex I to prohibit the use and
carriage for use as fuel of heavy fuel oil by ships in Arctic waters on and after July 1, 2024. For ships subject to Regulation 12A (oil fuel tank protection), the prohibition will become
effective on or after July 1, 2029.
60

Table of Contents
Pursuant to the IMO’s short-term targets for the reduction of greenhouse gas emissions in the shipping industry by 2030, we may incur costs to comply with these revised
standards. Additional or new conventions, laws, and regulations may be adopted that could require the installation of expensive emission control systems and could adversely affect our
business, results of operations, cash flows, and financial condition.
Safety Management System Requirements
The SOLAS Convention was amended to address the safe manning of vessels and emergency training drills. The Convention of Limitation of Liability for Maritime Claims (the
“LLMC”) sets limitations of liability for a loss of life or personal injury claim or a property claim against ship owners. We believe that our vessels are in substantial compliance with
SOLAS and LLMC standards.
Under Chapter IX of the SOLAS Convention, or the International Safety Management Code for the Safe Operation of Ships and Pollution Prevention (the “ISM Code”), our
operations are also subject to environmental standards and requirements. The ISM Code requires the party with operational control of a vessel to develop an extensive safety
management system that includes, among other things, the adoption of a safety and environmental protection policy setting forth instructions and procedures for operating its vessels
safely and describing procedures for responding to emergencies. The company’s technical management team has developed a functional Management System (MS), conforming to ISM
Code requirements, which includes a safety and environmental protection policy, safe operating procedures, defined levels of authority, procedures for internal audits, etc. The failure of
a vessel owner or bareboat charterer to comply with the ISM Code may subject such party to increased liability, may decrease available insurance coverage for the affected vessels, and
may result in a denial of access to, or detention in, certain ports.
The Military Sealift Command adopted amendments to modernize the Global Maritime Distress and Safety System (or GMDSS), which entered into force on January 1, 2024. The
amendments, which include amendments to SOLAS, may require vessel owners/operators to ensure their radio equipment is compliant.
The ISM Code requires that vessel operators obtain a safety management certificate for each vessel they operate. This certificate evidences compliance by a vessel’s
management with the ISM Code requirements for a management system. No vessel can obtain a safety management certificate unless its manager has been awarded a document of
compliance, issued by each flag state, under the ISM Code. We have obtained applicable documents of compliance for our offices and safety management certificates for all of our
vessels for which the certificates are required by the IMO. The document of compliance and safety management certificate is renewed as required.
Amendments to SOLAS chapter II-2, intended to prevent the supply of oil fuel not complying with SOLAS flashpoint requirements, requiring that ships carrying oil fuel must,
prior to bunkering, be provided with a declaration certifying that the oil fuel supplied is in conformity with SOLAS regulation II-2/4.2.1, will enter into effect January 1, 2026.
Regulation II-1/3-10 of the SOLAS Convention governs ship construction and stipulates that ships over 150 meters in length must have adequate strength, integrity, and
stability to minimize risk of loss or pollution. Goal-based standards amendments in SOLAS regulation II-1/3-10 entered into force in 2012, and from July 1, 2016 with respect to new oil
tankers and bulk carriers. Regulation II-1/3-10 requires that all oil tankers and bulk carriers of 150 meters in length and above, for which the building contract is placed on or after July 1,
2016, satisfy applicable structural requirements conforming to the functional requirements of the International Goal-based Ship Construction Standards for Bulk Carriers and Oil Tankers,
or GBS Standards. Effective July 1, 2024, amendments to the International Code on the Enhanced Programme of Inspections during Surveys of Bulk Carriers and Oil Tankers, 2011 became
effective, addressing inconsistencies on examination of ballast tanks at annual surveys for bulk carriers and oil tankers.
61

Table of Contents
Amendments to the SOLAS Convention Chapter VII apply to vessels transporting dangerous goods and require those vessels to comply with the International Maritime
Dangerous Goods Code (“IMDG Code”). Effective January 1, 2018, the IMDG Code includes (1) updates to the provisions for radioactive material, reflecting the latest provisions from
the International Atomic Energy Agency, (2) new marking, packing, and classification requirements for dangerous goods; and (3) new mandatory training requirements. Amendments
which took effect on January 1, 2020, also reflect the latest material from the UN Recommendations on the Transport of Dangerous Goods, including (1) new provisions regarding IMO
type 9 tank, (2) new abbreviations for segregation groups; and (3) special provisions for carriage of lithium batteries and vehicles powered by flammable liquid or gas. Amendments to
the IMDG Code relating to segregation requirements for certain substances, and classification and transport of carbon came into effect in June 2022. Updates to the IMDG Code, in line
with the updates to the United Nations Recommendations on the Transport of Dangerous Goods, which set the recommendations for all transport modes, became effective January 1,
2024.
The IMO has also adopted the International Convention on Standards of Training, Certification, and Watchkeeping for Seafarers (“STCW”). As of February 2017, all seafarers
are required to meet the STCW standards and have a valid STCW certificate. Flag states that have ratified SOLAS and STCW generally employ the classification societies, which have
incorporated SOLAS and STCW requirements into their class rules, to undertake surveys to confirm compliance.
Actions by the IMO’s Maritime Safety Committee and United States agencies indicate that cybersecurity regulations for the maritime industry are likely to be further developed
in the near future in an attempt to combat cybersecurity threats. For example, effective January 2021, cyber-risk management systems must be incorporated by shipowners and managers.
This might cause companies to create additional procedures for monitoring cybersecurity, which could require additional expenses and/or capital expenditures. The impact of such
regulations is hard to predict at this time.
Pollution Control and Liability Requirements
The IMO has negotiated international conventions that impose liability for pollution in international waters and the territorial waters of the signatories to such conventions. For
example, the IMO adopted an International Convention for the Control and Management of Ships’ Ballast Water and Sediments, or the BWM Convention, in 2004. The BWM
Convention entered into force on September 8, 2017. The BWM Convention requires ships to manage their ballast water to remove, render harmless, or avoid the uptake or discharge of
new or invasive aquatic organisms and pathogens within ballast water and sediments. The BWM Convention’s implementing regulations call for a phased introduction of mandatory
ballast water exchange requirements, to be replaced in time with mandatory concentration limits, and require all ships to carry a ballast water record book and an international ballast
water management certificate.
Specifically, ships over 400 gross tons generally must comply with a “D-1 standard,” requiring the exchange of ballast water only in open seas and away from coastal waters.
The “D-2 standard” specifies the maximum amount of viable organisms allowed to be discharged, and compliance dates vary depending on the IOPP renewal dates. For most ships,
compliance with the D-2 standard involves installing onboard systems to treat ballast water and eliminate unwanted organisms. BWMSs, which include systems that make use of
chemical, biocides, organisms, or biological mechanisms, or which alter the chemical or physical characteristics of the Ballast Water, must be approved per IMO Guidelines (Regulation D-
3). Under the BWM Convention amendments that entered into force in October 2019, BWMS installed on or after October 28, 2020, shall be approved per BWMS Code, while BWMS
installed before October 23, 2020, must be approved taking into account guidelines developed by the IMO or the BWMS Code. MEPC 72’s amendments to the BWM Convention
requires all ships to meet the D-2 standard The cost of compliance could increase for ocean carriers and may have a material effect on our operations. However, many countries already
regulate the discharge of ballast water carried by vessels from country to country to prevent the introduction of invasive and harmful species via such discharges. The U.S., for example,
requires vessels entering its waters from another country to conduct mid-ocean ballast exchange, or undertake some alternate measure, and comply with certain reporting requirements.
Amendments to the BWM Convention concerning commissioning testing of BWMS became effective in 2022, and other amendments concerning the form of the Ballast Water Record
Book entered into force on February 1, 2025.
62

Table of Contents
The IMO adopted the International Convention on Civil Liability for Oil Pollution Damage of 1969, as amended by different Protocols in 1976, 1984, and 1992, and amended in
2000 (the “CLC”). Under the CLC and depending on whether the country in which the damage results is a party to the 1992 Protocol to the CLC, a vessel’s registered owner may be
strictly liable for pollution damage caused in the territorial waters of a contracting state by discharge of persistent oil, subject to certain exceptions. The 1992 Protocol changed certain
limits on liability expressed using the International Monetary Fund currency unit, the Special Drawing Rights. The limits on liability have since been amended so that the compensation
limits on liability were raised. The right to limit liability is forfeited under the CLC where the spill is caused by the shipowner’s actual fault and under the 1992 Protocol where the spill is
caused by the shipowner’s intentional or reckless act or omission where the shipowner knew pollution damage would probably result. The CLC requires ships over 2,000 tons covered
by it to maintain insurance covering the liability of the owner in a sum equivalent to an owner’s liability for a single incident. We have protection and indemnity insurance for
environmental incidents. P&I Clubs in the International Group issue the required Bunkers Convention “Blue Cards” to enable signatory states to issue certificates. All of our vessels
have a CLC State-issued certificate attesting that the required insurance coverage is in force.
The IMO also adopted the International Convention on Civil Liability for Bunker Oil Pollution Damage (the “Bunker Convention”) to impose strict liability on ship owners
(including the registered owner, bareboat charterer, manager, or operator) for pollution damage in jurisdictional waters of ratifying states caused by discharges of bunker fuel. The Bunker
Convention requires registered owners of ships over 1,000 gross tons to maintain insurance for pollution damage in an amount equal to the limits of liability under the applicable national
or international limitation regime (but not exceeding the amount calculated per the LLMC). Concerning non-ratifying states, liability for spills or releases of oil carried as fuel in ship’s
bunkers typically is determined by the national or other domestic laws in the jurisdiction where the events or damages occur.
Ships are required to maintain a certificate attesting that they maintain adequate insurance to cover an incident. In jurisdictions, such as the United States where the Bunker
Convention has not been adopted, various legislative schemes or common law govern, and liability is imposed either based on fault or on a strict-liability basis.
Anti-Fouling Requirements
In 2001, the IMO adopted the International Convention on the Control of Harmful Anti-fouling Systems on Ships or the Anti-fouling Convention. The Anti-fouling Convention,
which entered into force on September 17, 2008, prohibits the use of organotin compound coatings to prevent the attachment of mollusks and other sea life to the hulls of vessels.
Vessels of over 400 gross tons engaged in international voyages will also be required to undergo an initial survey before the vessel is put into service, or before an International Anti-
fouling System Certificate is issued for the first time and subsequent surveys when the anti-fouling systems are altered or replaced. In 2023, amendments to the Anti-fouling Convention
came into effect which includes controls on the biocide cybutryne; Ships shall not apply or reapply anti-fouling systems containing cybutryne from January 1, 2023.
All of our vessels have obtained Anti-fouling System Certificates per the Anti-fouling Convention.
Compliance Enforcement
Noncompliance with the ISM Code or other IMO regulations may subject the shipowner or bareboat charterer to increased liability, may lead to decreases in available insurance
coverage for affected vessels and may result in the denial of access to, or detention in, some ports. The USCG and European Union authorities have indicated that vessels not in
compliance with the ISM Code by applicable deadlines will be prohibited from trading in U.S. and European Union ports, respectively. As of the date of this report, each of our vessels
has a valid Safety Management Certificate (“SMC”) per ISM Code, a document issued to the vessel which signifies that the Company and its shipboard management operate under the
approved Management System. However, there can be no assurance that such certificates will be maintained in the future. The IMO continues to review and introduce new regulations.
It is impossible to predict what additional regulations, if any, may be passed by the IMO and what effect if any, such regulations might have on our operations.
63

Table of Contents
United States Regulations
General
Newly elected President Donald Trump has signed a number of executive orders and directives that are likely to have an impact on U.S. regulations. For example, a regulatory
freeze was issued, which permits the withdrawal of rules sent to be published and authorizes those in charge of federal agencies to delay for 60 days the effective date of rules that have
been published but are not yet effective. This regulatory freeze impacts U.S. EPA decisions and proposed amendments. Additionally federal agencies have placed employees on leave as
a result of an executive order regarding diversity, equity and inclusion programs, which may impact implementation and enforcement of regulations. This and additional executive orders
could impact regulatory requirements.
The U.S. Oil Pollution Act of 1990 and the Comprehensive Environmental Response, Compensation and Liability Act
The U.S. Oil Pollution Act of 1990 (“OPA”) established an extensive regulatory and liability regime for the protection and cleanup of the environment from oil spills. OPA affects
all “owners and operators” whose vessels trade or operate within the U.S., its territories and possessions, or whose vessels operate in U.S. waters, which includes the U.S.’s territorial
sea and its 200 nautical miles exclusive economic zone around the U.S. The U.S. has also enacted the Comprehensive Environmental Response, Compensation and Liability Act
(“CERCLA”), which applies to the discharge of hazardous substances other than oil, except in limited circumstances, whether on land or at sea. OPA and CERCLA both define “owner
and operator” in the case of a vessel as any person owning, operating, or chartering by demise, the vessel. Both OPA and CERCLA impact our operations.
Under OPA, vessel owners and operators are “responsible parties” and are jointly, severally, and strictly liable (unless the spill results solely from the act or omission of a third
party, an act of God, or an act of war) for all containment and clean-up costs and other damages arising from discharges or threatened discharges of oil from their vessels, including
bunkers (fuel). OPA defines these other damages broadly to include:
(i)
injury to, destruction or loss of, or loss of use of, natural resources and related assessment costs;
(ii)
injury to, or economic losses resulting from, the destruction of real and personal property;
(iii)
loss of subsistence use of natural resources that are injured, destroyed, or lost;
(iv)
net loss of taxes, royalties, rents, fees or net profit revenues resulting from injury, destruction or loss of real or personal property, or natural resources;
(v)
lost profits or impairment of earning capacity due to injury, destruction, or loss of real or personal property or natural resources; and
(vi)
net cost of increased or additional public services necessitated by removal activities following a discharge of oil, such as protection from fire, safety or health hazards, and
loss of subsistence use of natural resources.
OPA contains statutory caps on liability and damages; such caps do not apply to direct cleanup costs. Effective March 2023, the USCG adjusted the limits of OPA liability for a
tank vessel, other than a single-hull tank vessel, over 3,000 gross tons liability to the greater of $2,500 per gross ton or $21,521,000 (subject to periodic adjustment for inflation), for non-
tank vessels, edible oil tank vessels, and any oil spill response vessels, to the greater of $1,300 per gross ton or $1,076,000 (subject to periodic adjustment for inflation). These limits of
liability do not apply if an incident was proximately caused by the violation of any applicable U.S. federal safety, construction, or operating regulation by a responsible party (or its
agent, employee, or a person acting pursuant to a contractual relationship), or a responsible party’s gross negligence or willful misconduct. The limitation on liability similarly does not
apply if the responsible party fails or refuses to (i) report the incident as required by law where the responsible party knows or has reason to know of the incident; (ii) reasonably
cooperate and assist as requested in connection with oil removal activities; or (iii) without sufficient cause, comply with an order issued under the Federal Water Pollution Act (Section
311 (c), (e)) or the Intervention on the High Seas Act.
64

Table of Contents
CERCLA contains a similar liability regime whereby owners and operators of vessels are liable for cleanup, removal, and remedial costs, as well as damages for injury to, or
destruction or loss of, natural resources, including the reasonable costs associated with assessing the same, and health assessments or health effects studies. There is no liability if the
discharge of a hazardous substance results solely from the act or omission of a third party, an act of God, or an act of war. Liability under CERCLA is limited to the greater of $300 per
gross ton or $5.0 million for vessels carrying a hazardous substance as cargo and the greater of $300 per gross ton or $500,000 for any other vessel. These limits do not apply (rendering
the responsible person liable for the total cost of response and damages) if the release or threat of release of a hazardous substance resulted from willful misconduct or negligence, or the
primary cause of the release was a violation of applicable safety, construction or operating standards or regulations. The limitation on liability also does not apply if the responsible
person fails or refuses to provide all reasonable cooperation and assistance as requested in connection with response activities where the vessel is subject to OPA.
OPA and CERCLA each preserve the right to recover damages under existing law, including maritime tort law. OPA and CERCLA both require owners and operators of vessels to
establish and maintain with the USCG evidence of financial responsibility sufficient to meet the maximum amount of liability to which the particular responsible person may be subject.
Vessel owners and operators may satisfy their financial responsibility obligations by providing proof of insurance, a surety bond, qualification as a self-insurer, or a guarantee. We
comply and plan to comply going forward with the USCG’s financial responsibility regulations by providing applicable certificates of financial responsibility.
The 2010 Deepwater Horizon oil spill in the Gulf of Mexico resulted in additional regulatory initiatives or statutes, including higher liability caps under OPA, new regulations
regarding offshore oil and gas drilling, and a pilot inspection program for offshore facilities. However, several of these initiatives and regulations have been or may be revised. For
example, the U.S. Bureau of Safety and Environmental Enforcement’s (“BSEE”) revised Production Safety Systems Rule (“PSSR”), effective December 27, 2018, modified and relaxed
certain environmental and safety protections under the 2016 PSSR. Additionally, in August 2023, the BSEE amended the Well Control Rule, which strengthens testing and performance
requirements, and may affect offshore drilling operations. Compliance with any new requirements of OPA and future legislation or regulations applicable to the operation of our vessels
could negatively impact the cost of our operations and adversely affect our business.
OPA permits individual U.S. states to adopt their own liability regimes for oil pollution incidents occurring within their jurisdiction, provided that such regimes meet or exceed
the minimum liability thresholds established under OPA. Several coastal states have enacted laws that impose strict liability for the discharge of oil or hazardous substances, including
removal costs and natural resource damage. In certain jurisdictions, these laws may be more stringent than federal requirements and, in some cases, impose unlimited liability for
pollution within state waters. However, not all states have issued implementing regulations that clearly define vessel owners’ responsibilities under these provisions.
To address this regulatory complexity, the Company has established a comprehensive Management System that outlines key operational procedures and compliance protocols
to ensure adherence to all applicable federal and state environmental laws in the ports where its vessels operate.
We currently maintain pollution liability coverage insurance for $1 billion per incident for each of our vessels. If the damages from a catastrophic spill were to exceed our
insurance coverage it could have an adverse effect on our business and results of operation.
Other United States Environmental Initiatives
The U.S. Clean Air Act of 1970 (including its amendments of 1977 and 1990) (“CAA”) requires the EPA to promulgate standards applicable to emissions of volatile organic
compounds and other air contaminants. Our vessels are subject to vapor control and recovery requirements for certain cargoes when loading, unloading, ballasting, cleaning and
conducting other operations in regulated port areas. The CAA also requires states to draft State Implementation Plans, or “SIPs,” designed to attain national health-based air quality
standards in each state, some of which regulate emissions resulting from vessel loading and unloading operations, which may affect our vessels. Although state-specific, SIPs may
include regulations concerning emissions resulting from vessel loading and unloading operations by requiring the installation of vapor control equipment. Our vessels operating in such
regulated port areas with restricted cargoes are equipped with vapor recovery systems that satisfy these existing requirements.
65

Table of Contents
The U.S. Clean Water Act (“CWA”) prohibits the discharge of oil, hazardous substances, and ballast water in U.S. navigable waters unless authorized by a duly issued permit or
exemption and imposes strict liability in the form of penalties for any unauthorized discharges. The CWA also imposes substantial liability for the costs of removal, remediation, and
damages and complements the remedies available under OPA and CERCLA. In 2015, the EPA expanded the definition of “waters of the United States” (“WOTUS”), thereby expanding
federal authority under the CWA. On December 30, 2022, the EPA and U.S. Army Corps of Engineers announced the final revised WOTUS rule, which was published on January 18, 2023.
In August 2023, the EPA and Department of the Army issued a final rule to amend the revised WOTUS definition to conform the definition of WOTUS to the U.S. Supreme Court’s
interpretation of the CWA in its decision dated May 25, 2023. The final rule became effective on September 8, 2023 and operates to limit the CWA. On March 12, 2025, the EPA announced
it would work with the U.S. Army Corp of Engineers further to review the definition of WOTUS further to the U.S. Supreme Court’s interpretation and undertake a rulemaking process to
revise the definition of WOTUS. During the rulemaking process, the EPA advised it would provide guidance implementing the pre-2015 definition of WOTUS.
The EPA and the USCG have also enacted rules relating to ballast water discharge, compliance with which requires the installation of equipment on our vessels to treat ballast
water before it is discharged or the implementation of other port facility disposal arrangements or procedures at potentially substantial costs, and/or otherwise restrict our vessels from
entering U.S. Waters. The EPA will regulate these ballast water discharges and other discharges incidental to the normal operation of certain vessels within United States waters
pursuant to the Vessel Incidental Discharge Act (“VIDA”), which was signed into law on December 4, 2018, and requires that the USCG develop implementation, compliance and
enforcement regulations regarding ballast water. On October 26, 2020, the EPA published a Notice of Proposed rulemaking for Vessel Incidental Discharge National Standards of
Performance under VIDA, and in November 2020, held virtual public meetings. On October 18, 2023, the EPA published a Supplemental Notice to the Vessel Incidental Discharge National
Standards of Performance, which shares new ballast water information that the EPA received from the USCG. On September 20, 2024, the EPA finalized national standards of performance
for non-recreational vessels 79-feet in length and longer with respect to incidental discharges and on October 9, 2024, the Vessel Incidental Discharge National Standards of Performance
were published. Within two years of publication, the USCG is required to develop corresponding implementation regulations. Currently USCG ballast water management regulations
adopted under NISA, require mid-ocean ballast exchange programs and installation of approved USCG technology for all vessels equipped with ballast water tanks bound for U.S. ports
or entering U.S. waters. Until new USCG regulations are final and enforceable, non-military non-recreational vessels at least 79 feet in length must continue to comply with the
requirements of the VGP, including submission of a Notice of Intent (“NOI”) or retention of a PARI form and submission of annual reports. We shall submit NOIs for our vessels where
required.
Compliance with the EPA, U.S Coast Guard, and state regulations requires the installation of ballast water treatment equipment on our vessels or the implementation of other
port facility disposal procedures at potentially substantial cost, or may otherwise restrict our vessels from entering U.S. waters.
European Union Regulations
In October 2009, the European Union amended a directive to impose criminal sanctions for illicit ship-source discharges of polluting substances, including minor discharges, if
committed with intent, recklessly, or with serious negligence, and the discharges individually or in the aggregate result in deterioration of the quality of water. Aiding and abetting the
discharge of a polluting substance may also lead to criminal penalties. The directive applies to all types of vessels, irrespective of their flag, but certain exceptions apply to warships or
where human safety or that of the ship is in danger. Criminal liability for pollution may result in substantial penalties or fines and increased civil liability claims. Regulation (EU) 2015/757
of the European Parliament and of the Council of 29 April 2015 (amending EU Directive 2009/16/EC) governs the monitoring, reporting, and verification of carbon dioxide emissions from
maritime transport, and, subject to some exclusions, requires companies with ships over 5,000 gross tonnage to monitor and report carbon dioxide emissions annually, which may cause
us to incur additional expenses. As of January 2019, large ships calling at EU ports have been required to collect and publish data on carbon dioxide emissions and other information.
The system entered into force on 1 March 2018. July 2020 saw the European Parliament’s Committee on Environment, Public Health and Food Safety vote in favor of the inclusion of
vessels of 5000 gross tons and above in the EU Emissions Trading System (in addition to voting for a revision to the monitoring, reporting, and verification of CO2 emissions). In
September 2020, the European Parliament adopted the proposal from the European Commission to amend the regulation on monitoring carbon dioxide emissions from maritime transport.
66

Table of Contents
On July 14, 2021, the European Commission published a package of draft proposals as part of its ‘Fit for 55’ environmental legislative agenda and as part of the wider EU Green
Deal growth strategy (the “Proposals”). There are two key initiatives relevant to maritime arising from the Proposals: (a) a bespoke emissions trading scheme for the maritime sector
which commenced in 2024 and which applies to all ships above a gross tonnage of 5,000; and (b) a FuelEU draft regulation which seeks to require all ships above a gross tonnage of
5,000 to carry on board a ‘FuelEU certificate of compliance’ from 30 June 2025 as evidence of compliance with the limits on the greenhouse gas intensity of the energy used on-board by
a ship and with the requirements on the use of on-shore power supply (OPS) at berth. ETS was agreed in December 2022 and FuelEU was passed into law on July 25, 2023 and entered
into force on January 1, 2025. More specifically, ETS is to apply gradually over the period from 2024 to 2026. In 2025 shipping companies would have to surrender 40% of ETS allowances
for 2024 emissions; in 2026 shipping companies would have to surrender 70% of ETS allowances for the 2025 emissions and 100% in 2027 2026 emissions. The cap under the ETS would
be set by taking into account EU MRV system emissions data for the years 2018 and 2019, adjusted, from 2021, and is to capture 100% of the emissions from intra-EU maritime voyages;
100% of emissions from ships at berth in EU ports; and 50% of emissions from voyages which start or end at EU ports (but the other destination is outside the EU). More recent
proposed amendments signal that 100% of non-EU emissions may be caught if the IMO does not introduce a global market-based measure by 2028. All maritime allowances will be
auctioned and there will be no free allocation for the shipping sector. From a risk management perspective, new systems, including personnel, data management systems, cost recovery
mechanisms, revised service agreement terms, and emissions reporting procedures will have to be put in place, at significant cost, to prepare for and manage the administrative aspect of
ETS compliance.
Additionally, on July 25, 2023, the European Council of the European Union adopted the Fuel EU Maritime Regulation 2023/1805 (“FuelEU”) under the FuelEU Initiative of its
“Fit-for-55” package which sets limitations on the acceptable yearly greenhouse gas intensity of the energy used by covered vessels. Among other things, the Maritime Fuel Regulation
requires that greenhouse gas intensity of fuel used by covered vessels is reduced by 2% starting January 1, 2025, with additional reductions contemplated every five years (up to 80%
by 2050). Shipping companies may enter into pooling mechanisms with other shipping companies in order to achieve compliance, bank surplus emissions and borrow compliance
balances from future years. A FuelEU Document of Compliance is required to be kept on board a vessel to show compliance by June 30, 2026. Both the ETS and FuelEU schemes have
significant impacts on the management of the vessels calling to EU ports, by increasing the complexity and monitoring of, and costs associated with the operation of vessels and
affecting the relationships with our time charterers.
Responsible recycling and scrapping of ships are becoming increasingly important issues for shipowners and charterers alike as the industry strives to replace old ships with
cleaner, more energy-efficient models. The recognition of the need to impose recycling obligations on the shipping industry is not new. In 2009, the IMO oversaw the creation of the
Hong Kong Ship Recycling Convention (the “Hong Kong Convention”), which sets standards for ship recycling. Concerned at the lack of progress in satisfying the conditions needed
to bring the Hong Kong Convention into force, the EU published its own Ship Recycling Regulation 1257/2013 (SRR) in 2013, to facilitate early ratification of the Hong Kong Convention
both within the EU and in other countries outside the EU. The 2013 regulations are vital to responsible ship recycling in the EU. SRR requires that, from 31 December 2020, all existing
ships sailing under the flag of EU member states and non-EU flagged ships calling at an EU port or anchorage must carry on board an Inventory of Hazardous Materials with a certificate
or statement of compliance, as appropriate. For EU-flagged vessels, a certificate (either an Inventory Certificate or Ready for Recycling Certificate) will be necessary, while non-EU-
flagged vessels will need a Statement of Compliance. Now that the Hong Kong Convention has been ratified and will enter into force on June 26, 2025, it is expected the EU Ship
Recycling Regulation will be reviewed in light of this.
The European Union has adopted several regulations and directives requiring, among other things, more frequent inspections of high-risk ships, as determined by the type, age,
and flag, as well as the number of times the ship has been detained. The European Union also adopted and extended a ban on substandard ships and enacted a minimum ban period and
a definitive ban for repeated offenses. The regulation also provided the European Union with greater authority and control over classification societies, by imposing more requirements
on classification societies and providing for fines or penalty payments for organizations that failed to comply. Furthermore, the EU has implemented regulations requiring vessels to use
reduced sulfur content fuel for their main and auxiliary engines. The EU Directive 2005/33/EC (amending Directive 1999/32/EC) introduced requirements parallel to those in Annex VI
relating to the sulfur content of marine fuels. In addition, the EU imposed a 0.1% maximum sulfur requirement for fuel used by ships at berths in the Baltic, the North Sea, and the English
Channel (the so-called “SOx-Emission Control Area”). As of January 2020, EU member states must also ensure that ships in all EU waters, except the SOx-Emission Control Area, use
fuels with a 0.5% maximum sulfur content.
67

Table of Contents
EU Directive 2004/35/CE (as amended) regarding the prevention and remedying of environmental damage addresses liability for environmental damage (including damage to
water, land, protected species, and habitats) based on the “polluter pays” principle. Operators whose activities caused the environmental damage are liable for the damage (subject to
certain exceptions). Concerning specified activities causing environmental damage, operators are strictly liable. The directive applies where damage has already occurred and where there
is an imminent threat of damage. The directive requires preventative and remedial actions, and that operators report environmental damage or an imminent threat of such damage.
In 2021, the EU adopted a European Climate Law (Regulation (EU) 2021/1119), establishing the aim of reaching net-zero greenhouse gas emissions in the EU by 2050, with an
intermediate target of reducing greenhouse gas emissions by at least 55% by 2030, compared to 1990 levels. In July 2021, the European Commission launched the Fit for 55 (described
above) to support the climate policy agenda.
On November 10, 2022, the EU Parliament adopted the Corporate Sustainability Reporting Directive (“CSRD”). EU member states have 18 months to integrate it into national law.
The CSRD will create new, detailed sustainability reporting requirements and will significantly expand the number of EU and non-EU companies subject to the EU sustainability reporting
framework. The required disclosures will go beyond environmental and climate change reporting to include social and governance matters (for example, respect for employee and human
rights, anti-corruption and bribery, corporate governance, and diversity and inclusion). In addition, it will require disclosure regarding the due diligence processes implemented by a
company in relation to sustainability matters and the actual and potential adverse sustainability impacts of an in-scope company’s operations and value chain. The CSRD will begin to
apply for financial years starting in 2024 to large EU and non-EU undertakings subject to certain financial and employee thresholds being met. New systems, personnel, data management
systems and reporting procedures will have to be put in place, at significant cost, to prepare for and manage the administrative aspect of CSRD compliance. We note that following the
publication of the Omnibus package of proposals on 26 February 2025 which are designed to simplify EU regulations and cut red tape, the application of all reporting requirements in the
CSRD for companies that are due to report in 2026 and 2027 is postponed and to 2028. If implemented into law, the Omnibus package will simplify compliance for SMEs and all companies
with up to 1,000 employees and 50 million turnover will be outside the scope of the CSRD. For the companies in scope (above 1,000 employees and 50 million turnover), the Commission
will adopt a delegated act to revise and simplify the existing sustainability reporting standards (ESRS). The proposed provisions in CSRD also create a derogation for companies with
more than 1,000 employees and a turnover below EUR 450 million by making the reporting of Taxonomy voluntary, and also, put a stronger emphasis on transition finance by introducing
the option of reporting on partial Taxonomy-alignment.
International Labour Organization
The International Labour Organization, a specialized agency of the United Nations, adopted the Maritime Labour Convention, 2006 (“MLC 2006”) to establish minimum
standards for the working and living conditions of seafarers. The MLC 2006 applies to all ships of 500 gross tonnage or more that are engaged in international voyages or fly the flag of a
ratifying Member State and operate between ports in different countries. To demonstrate compliance, affected vessels must carry both a Maritime Labour Certificate and a Declaration of
Maritime Labour Compliance, issued following inspection and approval by the vessel’s flag state. The Company has implemented a comprehensive Management System that establishes
working and living standards for all seafarers onboard, which exceed the minimum requirements of the MLC 2006. As of the date of this report, all Company vessels have been issued
valid MLC Certificates by their respective flag states. The MLC 2006 has been subject to periodic updates, with the most recent amendments entering into force on December 23, 2024,
addressing issues such as access to drinking water, internet connectivity, repatriation costs, and protections during public health emergencies.
68

Table of Contents
Greenhouse Gas Regulation
Currently, the emissions of greenhouse gases from international shipping are not subject to the Kyoto Protocol to the United Nations Framework Convention on Climate
Change, which entered into force in 2005 and according to which adopting countries have been required to implement national programs to reduce greenhouse gas emissions with
targets extended through 2020. In December 2009, more than 27 nations, including the U.S. and China, signed the Copenhagen Accord, which includes a non-binding commitment to
reduce greenhouse gas emissions. The 2015 United Nations Climate Change Conference in Paris resulted in the Paris Agreement, which entered into force on November 4, 2016, and does
not directly limit greenhouse gas emissions from ships. In January 2025, President Trump signed an executive order to start the process of withdrawing the United States from the Paris
Agreement; the withdrawal will take at least one year to complete.
At MEPC 70 and MEPC 71, a draft outline of the structure of the initial strategy for developing a comprehensive IMO strategy on the reduction of greenhouse gas emissions
from ships was approved. Following this roadmap, at MEPC 80 in July 2023, the IMO adopted the 2023 IMO Strategy on Reduction of GHG Emissions from Ships, which revoked the 2018
initial strategy. The 2023 IMO GHG Strategy identifies a number of levels of ambition, including: (i) decline of carbon intensity through further improvement of the energy efficiency for
new ships; (ii) decline of carbon intensity of international shipping, to reduce CO2 emissions by at least 40% by 2030, compared to 2008; (iii) uptake of zero or near-zero GHG emission
technologies, fuels, and/or energy sources, striving to represent 10% of the energy sources used by international shipping by 2030; and (iv) to reach net-zero GHG emission by or
around 2050. At the conclusion of MEPC 82, a draft legal text was used as a basis for ongoing talks about mid-term GHG reduction measures, which are expected to be adopted in 2025.
The proposed mid-term measures include a goal-based marine fuel standard, phasing in the mandatory use of fuels with less GHG intensity, and a global GHG emission pricing
mechanism. The latter could be in the form of a global carbon levy or in the form of a global emissions trading scheme thus removing the need for the existing fragmented and localized
schemes as are present in the EU, China, Japan and Singapore. UK too is consulting on introducing a UK based emissions trading scheme to apply from 2026 for ships above 5000GT but
for domestic voyages only (i.e voyages taking place between two UK ports). These regulations could cause us to incur additional substantial expenses.
As noted above, the 70th MEPC meeting in October 2016 adopted a mandatory data collection system (DCS) which requires ships above 5,000 gross tons to report
consumption data for fuel oil, hours under way and distance travelled. Unlike the EU MRV (see below), the IMO DCS covers any maritime activity carried out by ships, including
dredging, pipeline laying, ice-breaking, fish-catching and off-shore installations. The SEEMPs of all ships covered by the IMO DCS must include a description of the methodology for
data collection and reporting. After each calendar year, the aggregated data are reported to the flag state. If the data have been reported in accordance with the requirements, the flag
state issues a statement of compliance to the ship. Flag states subsequently transfer this data to an IMO ship fuel oil consumption database, which is part of the Global Integrated
Shipping Information System (GISIS) platform. IMO will then produce annual reports, summarizing the data collected. Thus, currently, data related to the GHG emissions of ships above
5,000 gross tons calling at ports in the European Economic Area (EEA) must be reported in two separate, but largely overlapping, systems: the EU MRV - which applies since 2018 - and
the IMO DCS - which applies since 2019. The proposed revision of Regulation (EU) 2015/757 adopted on 4 February 2019 aims to align and facilitate the simultaneous implementation of
the two systems, however it is still not clear when the proposal will be adopted.
IMO’s MEPC 76 adopted amendments to Annex VI that will require ships to reduce their greenhouse gas emissions. Effective November 1, 2022, the Revised MARPOL Annex
VI will enter into force. The revised Annex VI includes carbon intensity measures (requirements for ships to calculate their EEXI following technical means to improve their energy
efficiency and to establish their annual operational carbon intensity indicator and rating. MEPC 76 also adopted guidelines to support the implementation of the amendments.
In 2021, the EU adopted a European Climate Law (Regulation (EU) 2021/1119), establishing the aim of reaching net-zero greenhouse gas emissions in the EU by 2050, with an
intermediate target of reducing greenhouse gas emissions by at least 55% by 2030, compared to 1990 levels. In July 2021, the European Commission launched the Fit for 55 (described
above) to support the climate policy agenda. Starting in January 2018, large ships over 5,000 gross tonnage calling at EU ports have been required to collect and publish data on carbon
dioxide emissions and other information. As previously discussed, regulations relating to the inclusion of greenhouse gas emissions from the maritime sector in the European Union’s
carbon market are also forthcoming.
69

Table of Contents
In the United States, the EPA issued a finding that greenhouse gases endanger public health and safety, adopted regulations to limit greenhouse gas emissions from certain
mobile sources, and proposed regulations to limit greenhouse gas emissions from large stationary sources. The EPA or individual U.S. states could enact environmental regulations that
would affect our operations. On November 2, 2021, the EPA issued a proposed rule under the CAA designed to reduce methane emissions from oil and gas sources. In November 2022,
the EPA issued a supplemental proposal that would achieve more comprehensive emissions reductions and add proposed requirements for sources not previously covered. The EPA
held a public hearing in January 2023 on the proposal and in December 2023, issued a final rule to sharply reduce emissions of methane and other air pollution from oil and natural gas
operations, including storage vessels. In 2024, the EPA issued a final Waste Emissions Charge rule to reduce methane emissions, applicable to waste emissions from high-emitting oil and
gas facilities. On March 14, 2025, a Congressional resolution, signed by President Trump, disapproved the 2024 Waste Emissions Charge Rule, such that it is no longer in effect.
Any passage of climate control legislation or other regulatory initiatives by the IMO, the EU, the U.S., or other countries where we operate, or any treaty adopted at the
international level to succeed the Kyoto Protocol or Paris Agreement, that restricts emissions of greenhouse gases could require us to make significant financial expenditures which we
cannot predict with certainty at this time. Even in the absence of climate control legislation, our business may be indirectly affected to the extent that climate change may result in sea-
level changes or certain weather events.
Vessel Security Regulations
Since the terrorist attacks of September 11, 2001, in the United States, there have been a variety of initiatives intended to enhance vessel security, such as the U.S. Maritime
Transportation Security Act of 2002 (“MTSA”). To implement certain portions of the MTSA, the USCG issued regulations requiring the implementation of certain security requirements
aboard vessels operating in waters subject to the jurisdiction of the United States and at certain ports and facilities, some of which are regulated by the EPA.
Similarly, Chapter XI-2 of the SOLAS Convention imposes detailed security obligations on vessels and port authorities and mandates compliance with the International Ship
and Port Facility Security Code (the “ISPS Code”). The ISPS Code is designed to enhance the security of ports and ships against terrorism. To trade internationally, a vessel must attain
an International Ship Security Certificate (“ISSC”) from a recognized security organization approved by the vessel’s flag state. Ships operating without a valid certificate may be
detained, expelled from, or refused entry at a port until they obtain an ISSC. The various requirements, some of which are found in the SOLAS Convention, include, for example:
•
on-board installation of automatic identification systems to provide a means for the automatic transmission of safety-related information from among similarly equipped ships
and shore stations, including information on a ship’s identity, position, course, speed, and navigational status;
•
on-board installation of ship security alert systems, which do not sound on the vessel but only alert the authorities onshore;
•
the development of vessel security plans;
•
a ship identification number to be permanently marked on a vessel’s hull;
•
a continuous synopsis record kept onboard showing a vessel’s history, including the name of the ship, the state whose flag the ship is entitled to fly, the date on which the
ship was registered with that state, the ship’s identification number, the port at which the ship is registered and the name of the registered owner(s) and their registered
address; and
•
compliance with flag state security certification requirements.
The USCG regulations, intended to align with international maritime security standards, exempt non-U.S. vessels from MTSA vessel security measures, provided such vessels
have onboard a valid ISSC that attests to the vessel’s compliance with the SOLAS Convention security requirements and the ISPS Code. Future security measures could have a
significant financial impact on us.
70

Table of Contents
All vessels have been issued with ISSC, which is subject to Verifications that have ensured that the security system and any associated security equipment of the vessel fully
complies with the applicable requirements of MTSA and the ISPS Code, is in satisfactory condition and fit for the service for which the vessel is intended.
The cost of vessel security measures has also been affected by the escalation in the frequency of acts of piracy against ships, notably off the coast of Somalia, including the
Gulf of Aden and the Red Sea and Arabian Sea areas and the West Africa area, including the Gulf of Guinea. Substantial loss of revenue and other costs may be incurred as a result of
the detention of a vessel or additional security measures, and the risk of uninsured losses could significantly affect our business. The Company incurs additional costs in implementing
enhanced vessel security measures in accordance with Best Management Practices to Deter Piracy, including those outlined in the latest industry edition issued in March 2025. These
measures include compliance with recommended protocols for high-risk areas, and may also involve physical hardening of vessels as per additional security protocols required by
charterers.
Inspection by Classification Societies
Every commercial vessel must be classed by a classification society recognized by its country of registry and member of the International Association of Classification
Societies, or IACS. The classification society certifies that a vessel is constructed to specific structural standards and carries out regular surveys throughout the vessel’s service life to
ensure continuing compliance with the standards. The Classification Certificate issued is required to enable the vessel’s owner to register the ship and to obtain Marine Insurance on the
ship. Commercially, it is required to be produced before a vessel’s entry into ports or waterways and is of interest to Charterers and potential Buyers. The IACS has adopted harmonized
Common Structural Rules, or the Rules, which apply to oil tankers and bulk carriers contracted for construction on or after July 1, 2015. The Rules attempt to create a level of consistency
between IACS Societies. All of our vessels are certified as being “in class” by IACS recognized Classification Societies (e.g., Bureau Veritas, Lloyd’s Register of Shipping).
The Class and Statutory Certificates need to be renewed every five (5) years. A vessel must undergo a five-year survey cycle consisting of periodical surveys, such as annual
and intermediate surveys, and special or renewal surveys. Periodical surveys are carried out to confirm the vessel’s compliance with Rules and Regulations. In the scope of ensuring the
vessel’s structural integrity, a docking survey is required twice in the five-year cycle and without exceeding a 36 month interval between surveys. Vessels younger than fifteen (15) years
old can be exempted from the intermediate docking survey by an Underwater Inspection to Class acceptance. In lieu of a special survey, the vessel’s Machinery may be on a continuous
survey cycle, under which the machinery would be surveyed periodically over a five-year period. In addition, Hull and Construction are surveyed and tested, resulting in the renewal of
Class and Statutory Certificates. If any vessel does not maintain its class and/or fails any annual survey, intermediate survey, docking, or special survey, the vessel will be unable to
carry cargo between ports and will be unemployable and uninsurable, which could cause us to be in violation of certain covenants in our loan agreements. Any such inability to carry
cargo or be employed, or any such violation of covenants, could have a material adverse impact on our financial condition and results of operations.
Risk of Loss and Liability Insurance Coverage
General
The operation of any cargo vessel includes risks such as mechanical failure, physical damage, collision, property loss, cargo loss or damage, and business interruption due to
political circumstances in foreign countries, piracy incidents, hostilities, and labor strikes. In addition, there is always an inherent possibility of marine disaster, including oil spills and
other environmental mishaps, and the liabilities arising from owning and operating vessels in international trade. OPA, which imposes virtually unlimited liability upon shipowners,
operators and bareboat charterers of any vessel trading in the exclusive economic zone of the United States for certain oil pollution accidents in the United States, has made liability
insurance more expensive for shipowners and operators trading in the United States market.
71

Table of Contents
While we maintain hull and machinery insurance, war risks insurance, loss of hire, protection and indemnity cover and freight, demurrage and defense cover for our vessels in
amounts and with deductibles (if applicable) that we believe to be prudent to cover normal risks in our operations, we may not be able to achieve or maintain this level of coverage
throughout a vessel’s useful life. Furthermore, while we believe we procure adequate insurance coverage, not all risks can be insured, and there can be no guarantee that any specific
claim will be paid, or that we will always be able to obtain adequate insurance coverage at reasonable rates.
Hull and Machinery and War Risk Insurance
We maintain for our vessels marine hull and machinery and war risks insurance, which covers, among other risks, the risk of actual or constructive total loss. Our vessels are
each covered up to at least market value with deductibles which vary according to the size and value of the vessel.
Protection and Indemnity Insurance
Protection and indemnity insurance is provided by mutual protection and indemnity associations, or P&I Associations, and covers our third-party liabilities in connection with
our shipping activities. This includes third-party liability and other related expenses including injury or death of crew, passengers, and other third parties, loss or damage to cargo, claims
arising from collisions with other vessels, damage to other third-party property, pollution arising from oil or other substances, wreck removal, and salvage, towing and other related
costs. Protection and indemnity insurance is a form of mutual indemnity insurance, extended by protection and indemnity mutual associations.
We procure protection and indemnity insurance coverage for pollution in the amount of $1 billion per vessel per incident. The 12 P&I Associations that comprise the
International Group insure approximately 90% of the world’s commercial tonnage and have entered into a pooling agreement to reinsure each association’s liabilities. The International
Group’s website states that the Pool provides a mechanism for sharing all claims in excess of $10 million up to approximately $8.9 billion. As a member of certain P&I Associations which
are members of the International Group, we are subject to calls payable to the associations based on the group’s claim records as well as the claim records of all other members of the
individual associations and members of the pool of P&I Associations comprising the International Group. Supplemental calls may be made by the P&I Associations based on estimates
of premium income and anticipated and paid claims, and such estimates are adjusted each year by the board of directors of the P&I Associations until the closing of the relevant policy
year, which generally occurs within three years from the end of the policy year. We do not know whether any supplemental calls will be charged in respect of any policy year by the P&I
Associations in which the Company’s vessels are entered. To the extent we experience supplemental calls, our policy is to expense such amounts.
C.
Organizational Structure
We are a corporation incorporated under the laws of the Republic of the Marshall Islands on January 7, 2010. We are the sole owner of all of the issued and outstanding shares
of the subsidiaries listed in Exhibit 8.1 of this annual report.
D.
Property, Plants and Equipment
Our in-house fleet manager, Performance Shipping Management Inc., rents our office space from unrelated third parties and owns office furniture and equipment.
Our only material properties are the vessels in our fleet.
Item 4A.
Unresolved Staff Comments
Not applicable.
72

Table of Contents
Item 5.
Operating and Financial Review and Prospects
The following management’s discussion and analysis should be read in conjunction with our consolidated financial statements, and their notes included elsewhere in this
report. This discussion contains forward-looking statements that reflect our current views with respect to future events and financial performance. Our actual results may differ materially
from those anticipated in these forward-looking statements as a result of certain factors, such as those set forth in the section entitled “Item 3. Key Information—D. Risk Factors” and
elsewhere in this report.
A.
Operating Results
We have historically chartered our vessels to customers primarily through short-term and medium-term time charters, on spot voyages and pool arrangements. Under our time
charters, the charterer typically pays us a fixed daily charter hire rate and bears all voyage expenses, including the cost of bunkers (fuel oil) and port and canal charges. Under spot
charter arrangements, voyage expenses that are unique to a particular charter are paid for by us. For vessels operating in pooling arrangements, we earn a portion of total revenues
generated by the pool, net of expenses incurred by the pool. We remain responsible for paying the chartered vessel’s operating expenses, including the cost of crewing, insuring,
repairing and maintaining the vessel, the costs of spares and consumable stores, tonnage taxes, environmental costs, and other miscellaneous expenses. We also pay commissions to
unaffiliated shipbrokers for the arrangement of the relevant charter and have historically paid for a limited period of time management fees and commissions to third-party managers.
Factors Affecting Our Results of Operations
We believe that the important measures for analyzing trends in our results of operations consist of the following:
•
Ownership days. We define ownership days as the aggregate number of days in a period during which each vessel in our fleet has been owned by us. Ownership days are an
indicator of the size of our fleet over a period and affect both the amount of revenues and the amount of expenses that we record during a period.
•
Available days. We define available days as the number of our ownership days less the aggregate number of days that our vessels are off-hire due to scheduled repairs or
repairs under guarantee, vessel upgrades or special surveys, including the aggregate amount of time that we spend positioning our vessels for such events. The shipping
industry uses available days to measure the number of days in a period during which vessels should be capable of generating revenues.
•
Operating days. We define operating days, including ballast leg, as the number of available days in a period less the aggregate number of days that our vessels are off-hire.
The specific calculation counts as on-hire the days of the ballast leg of the spot voyages, as long as a charter party is in place. The shipping industry uses operating days to
measure the aggregate number of days in a period during which vessels actually generate revenues.
•
Fleet utilization. We calculate fleet utilization by dividing the number of our operating days during a period by the number of our available days during the period. The
shipping industry uses fleet utilization to measure a company’s efficiency in finding suitable employment for its vessels and minimizing the amount of days that its vessels
are off-hire for reasons other than scheduled repairs or repairs under guarantee, vessel upgrades and special surveys, including vessel positioning for such events.
•
Time Charter Equivalent (“TCE”) rates. We define TCE rates as revenue (voyage, time-charter and pool revenue), less voyage expenses during a period divided by the
number of our available days during the period, which is consistent with industry standards. Voyage expenses include port charges, bunker (fuel) expenses, canal charges
and commissions. TCE is a non-GAAP measure. TCE rate is a standard shipping industry performance measure used primarily to compare daily earnings generated by
vessels despite changes in the mix of charter types (i.e., voyage (spot) charters, time charters, and bareboat charters).
•
Daily Operating Expenses. We define daily operating expenses as total vessel operating expenses, which include crew wages and related costs, the cost of insurance and
vessel registry, expenses relating to repairs and maintenance, the costs of spares and consumable stores, lubricant costs, tonnage taxes, regulatory fees, environmental
costs, lay-up expenses and other miscellaneous expenses divided by total ownership days for the relevant period.
73

Table of Contents
The following table reflects our ownership days, available days, operating days, fleet utilization, TCE rate, and daily operating expenses for our fleet for the periods indicated.
 
 
For the year ended
December 31, 2024  
For the year ended
December 31, 2023  
For the year ended
December 31, 2022 
Ownership days
  
2,562 
  
2,901 
  
2,069 
Available days
  
2,525 
  
2,830 
  
2,039 
Operating days
  
2,506 
  
2,793 
  
1,974 
Fleet utilization
  
99.2%   
98.7%   
96.8%
Time charter equivalent (TCE) rate
 $
32,954 
 $
36,954 
 $
29,579 
Daily operating expenses
 $
7,712 
 $
7,537 
 $
6,683 
 
 
For the year ended
December 31, 2024  
For the year ended
December 31, 2023  
For the year ended
December 31, 2022 
Revenue
 $
87,445 
 $
108,938 
 $
75,173 
Less voyage expenses
 $
(4,237)
 $
(4,358)
 $
(14,861)
Voyage and time charter equivalent rates
 $
83,208 
 $
104,580 
 $
60,312 
Available days
  
2,525 
  
2,830 
  
2,039 
Time charter equivalent (TCE) rate
 $
32,954 
 $
36,954 
 $
29,579 
Revenue
Our revenues are driven primarily by the number of vessels in our fleet, the number of voyage days and the amount of daily charter hire that our vessels earn under charters
which, in turn, are affected by a number of factors, including:
•
the duration of our charters;
•
our decisions relating to vessel acquisitions and disposals;
•
the amount of time that we spend positioning our vessels;
•
the amount of time that our vessels spend in drydock undergoing repairs;
•
maintenance and upgrade work;
•
the age, condition, and specifications of our vessels;
•
levels of supply and demand in the shipping industry; and
•
other factors affecting spot market charter rates for vessels.
Vessels operating on time charters for a certain period of time provide more predictable cash flows over that period of time, but can yield lower profit margins than vessels
operating in the spot charter market during periods characterized by favorable market conditions. Vessels operating in the spot or pool charter market generate revenues that are less
predictable but may enable their owners to capture increased profit margins during periods of improvements in charter rates, although their owners would be exposed to the risk of
declining charter rates, which may have a materially adverse impact on financial performance. As we employ vessels on time and spot or pool charters, we mitigate our charter rates
fluctuation exposure.
Currently, the vessels in our fleet are employed either on pool charters or on time charters. Our charter agreements subject us to counterparty risk. In depressed market
conditions, charterers may seek to renegotiate the terms of their existing charter agreements or avoid their obligations under those contracts. Should a counterparty fail to honor its
obligations under agreements with us, we could sustain significant losses, which could have a material adverse effect on our business, financial condition, results of operations and cash
flows.
74

Table of Contents
Voyage Expenses
We incur voyage expenses that include port and canal charges, bunker (fuel oil) expenses and commissions. Port and canal charges and bunker expenses primarily increase in
periods during which vessels are employed on voyage charters because these expenses are for the account of the owner of the vessels, while they are on the account of the charterer
when vessels are time-chartered. Laid-up vessels, if any, do not incur bunkers costs. However, at times when our vessels are off-hire due to other reasons, we incur port and canal
charges and bunker expenses.
We have paid commissions ranging from 0% to 2.5% of the total daily charter hire rate of each charter to unaffiliated shipbrokers, depending on the number of brokers involved
with arranging the charter, and historically, we typically pay address commissions from 0% to 3.75% to our charterers. Additionally, Pure Brokerage and Shipping Corp, an affiliated
entity, receives from us a fixed commission of 1.25% on gross freight and hire income generated by the vessels, subject to the specific terms of each employment contract. Our in-house
fleet manager, Performance Shipping Management Inc. (ex Unitized Ocean Transport Limited), our wholly owned subsidiary, receives a commission that is equal to 2% of our gross
revenues in exchange for providing us with technical and commercial management services in connection with the employment of our fleet. However, this commission is eliminated from
our consolidated financial statements as an intercompany transaction.
Vessel Operating Expenses
Vessel operating expenses include crew wages and related costs, the cost of insurance and vessel registry, expenses relating to repairs and maintenance, the cost of spares and
consumable stores, tonnage taxes, regulatory fees, environmental costs, lay-up expenses, and other miscellaneous expenses. Other factors beyond our control, some of which may affect
the shipping industry in general, including, for instance, global epidemic and pandemic disruptions, inflationary pressures or the war in Ukraine and other global conflicts, which could
cause our crew costs and other operating expenses to increase, developments relating to market prices for crew wages and insurance, may also cause these expenses to increase. In
conjunction with our senior executive officers, our fleet manager has established an operating expense budget for each vessel and performs the day-to-day management of our vessels
under separate management agreements with our vessel-owning subsidiaries. We monitor the performance of our fleet manager by comparing actual vessel operating expenses with the
operating expense budget for each vessel.
Vessel Depreciation
We depreciate all our vessels on a straight-line basis over their estimated useful lives, which we estimate to be 25 years for our tanker vessels from the date of their initial
delivery from the shipyard. Depreciation is based on the cost less the estimated salvage values. Each vessel’s salvage value is the product of her light-weight tonnage and estimated
scrap rate, which is estimated at $350 per light-weight ton for all vessels in our fleet. We believe that these assumptions are common in the tanker industry.
General and Administrative Expenses
We incur general and administrative expenses, including our onshore related expenses such as legal and professional expenses. Certain of our general and administrative
expenses have been provided for under our Brokerage Services Agreement with Pure Brokerage and Shipping Corp. We also incur payroll expenses of employees and general and
administrative expenses reflecting the costs associated with running a public company, including board of director costs, director and officer insurance, investor relations, registrar and
transfer agent fees, and legal and accounting costs related to our compliance with public reporting obligations and the Sarbanes-Oxley Act of 2002. For 2025, we expect our general and
administrative expenses to remain relatively stable, as these expenses are largely fixed and not significantly impacted by changes in our fleet size. However, if inflation rates rise, we
anticipate  an increase in these expenses.
75

Table of Contents
Interest and Finance Costs
We have historically incurred interest expense and financing costs in connection with vessel-specific debt. As of December 31, 2024, our aggregate outstanding debt amounted
to $47.7 million. We expect to manage any exposure in interest rates through our regular operating and financing activities and, when deemed appropriate, through the use of derivative
financial instruments.
Interest Income
Interest earned on cash and cash equivalents and restricted cash constitutes our interest income, which is separately presented in the consolidated statement of operations. For
2025, we expect our interest income to remain relatively constant, should we maintain our current level of cash balances, and assuming that the interest rates remain approximately the
same.
Lack of Historical Operating Data for Vessels before their Acquisition
Consistent with shipping industry practice, other than inspection of the physical condition of the vessels and examinations of classification society records, there is no
historical financial due diligence process when we acquire vessels. Accordingly, we do not obtain the historical operating data for the vessels from the sellers because that information is
not material to our decision to make acquisitions, nor do we believe it would be helpful to potential investors in our common shares in assessing our business or profitability. Most
vessels are sold under a standardized agreement, which, among other things, provides the buyer with the right to inspect the vessel and the vessel’s classification society records. The
standard agreement does not give the buyer the right to inspect, or receive copies of, the historical operating data of the vessel. Prior to the delivery of a purchased vessel, the seller
typically removes from the vessel all records, including past financial records and accounts related to the vessel. In addition, the technical management agreement between the seller’s
technical manager and the seller is automatically terminated, and the vessel’s trading certificates are revoked by its flag state following a change in ownership.
Consistent with shipping industry practice, we treat the acquisition of a vessel (whether acquired with or without charter) as the acquisition of an asset rather than a business.
Although vessels are generally acquired free of charter, we have in the past, and we may in the future, acquire vessels with existing time charters. When a vessel has been under a
voyage charter, it is delivered to the buyer free of charter. It is rare in the shipping industry for the last charterer of the vessel under the seller to continue as the first charterer of the
vessel under the buyer. In most cases, when a vessel is under a time charter and the buyer wishes to assume that charter, the vessel cannot be acquired without the charterer’s consent
and the buyer entering into a separate direct agreement with the charterer to assume the charter. The purchase of a vessel itself does not transfer the charter, because it is a separate
service agreement between the vessel owner and the charterer.
When we purchase a vessel and assume or renegotiate a related time charter, we must take, among other things, the following steps before the vessel is ready to commence
operations:
•
obtain the charterer’s consent for us to become the new owner;
•
obtain the charterer’s consent for the appointment of a new technical manager;
•
obtain the charterer’s consent for reflagging of the vessel;
•
arrange for a new crew for the vessel;
•
replace all hired equipment on board, such as gas cylinders and communication equipment;
•
negotiate and enter into new insurance contracts for the vessel through our own insurance brokers;
•
register the vessel under a flag state and perform the related inspections in order to obtain new trading certificates from the flag state;
•
implement a new planned maintenance program for the vessel; and
•
ensure that the new technical manager obtains new certificates for compliance with the safety and vessel security regulations of the flag state.
76

Table of Contents
The following discussion is intended to help you understand how acquisitions of vessels affect our business and results of operations.
Our business is mainly comprised of the following elements:
•
acquisition and disposition of vessels;
•
employment and operation of our vessels; and
•
management of the financial, general and administrative elements involved in the conduct of our business and ownership of our vessels.
The employment and operation of our vessels mainly require the following components:
•
vessel maintenance and repair;
•
crew selection and training;
•
vessel spares and stores supply;
•
contingency response planning;
•
on board safety procedures auditing;
•
accounting;
•
vessel insurance arrangement;
•
vessel chartering;
•
vessel hire management;
•
vessel surveying; and
•
vessel performance monitoring.
The management of financial, general and administrative elements involved in the conduct of our business and ownership of vessels, mainly requires the following components:
•
management of our financial resources, including banking relationships, i.e., administration of bank loans and bank accounts;
•
management of our accounting system and records and financial reporting;
•
administration of the legal and regulatory requirements affecting our business and assets; and
•
management of the relationships with our service providers and customers.
The principal factors that may affect our profitability, cash flows and shareholders’ return on investment include:
•
rates and periods of charter hire;
•
levels of vessel operating expenses;
77

Table of Contents
•
depreciation expenses;
•
financing costs; and
•
fluctuations in foreign exchange rates.
See “Item 3. Key Information—D. Risk Factors” for additional factors that may affect our business.
Our Fleet - Comparison of Possible Excess of Carrying Value Over Estimated Charter-Free Market Value of our Vessels
In “Critical Accounting Estimates and Policies” we discuss our policy for impairing the carrying values of our vessels. Historically, the market values of vessels have
experienced volatility, which from time to time may be substantial. As a result, the charter-free market value of certain of our vessels may have declined below those vessels’ carrying
value, even though we would not impair those vessels’ carrying value under our accounting impairment policy. In 2024, 2023 and 2022, we did not record any impairment charge.
Based on: (i) the carrying value of each of our vessels as of December 31, 2024 plus the carrying value of any unamortized dry docking cost; and (ii) what we believe the charter-
free market value of each of our vessels was as of December 31, 2024, the aggregate carrying value of all of our vessels at the time exceeded their aggregate charter-free market values by
approximately $88.5 million, and also there were no individual vessels whose charter-free market value was below its book value.
Based on: (i) the carrying value of each of our vessels as of December 31, 2023 plus the carrying value of any unamortized dry docking cost; and (ii) what we believe the charter-
free market value of each of our vessels was as of December 31, 2023, the aggregate carrying value of all of our vessels exceeded their aggregate charter-free market values by
approximately $98.7 million, and also there were no individual vessels whose charter-free market value was below its book value.
Our estimates of charter-free market value assume that our vessels were all in good and seaworthy condition without need of repair and if inspected would be certified in class
without notations of any kind. Our estimates are based on information available from various industry sources, including:
•
reports by industry analysts and data providers that focus on our industry and related dynamics affecting vessel values;
•
news and industry reports of similar vessel sales;
•
offers that we may have received from potential purchasers of our vessels; and
•
vessel sale prices and values of which we are aware through both formal and informal communications with shipowners, shipbrokers, industry analysts, and various other
shipping industry participants and observers.
As we obtain information from various industry reports and other sources, our estimates of charter-free market values are inherently uncertain. In addition, vessel values are
highly volatile; as such, our estimates may not be indicative of the current or future charter-free market values of our vessels or prices that we could achieve if we were to sell them. We
also refer you to the risk factor under “Item 3. Key Information—D. Risk Factors” entitled “Tanker vessel values may fluctuate due to economic and technological factors, which may
adversely affect our financial condition, or result in the incurrence of a loss upon disposal of a tanker vessel, impairment losses, or increases in the cost of acquiring additional tanker
vessels”.
78

Table of Contents
 
  
   
  
Carrying Value of
vessels; net book value,
unamortized drydock
cost
(in millions of US
dollars)
 
Vessel
 
DWT
  
Year Built
  
At
December
31, 2024
  
At
December
31, 2023
 
1. Blue Moon
  
104,623   
2011  $
23.7  $
25.4 
2. Briolette
  
104,588   
2011  $
23.6  $
25.3 
3. P. Yanbu
  
105,391   
2011  $
17.7  $
18.8 
4. P. Sophia
  
105,071   
2009  $
24.8  $
25.2 
5. P. Aliki
  
105,304   
2010  $
31.6  $
34.0 
6. P. Monterey
  
105,525   
2011  $
30.8  $
32.9 
7. P. Long Beach
  
105,408   
2013  $
39.8  $
42.3 
Total Carrying Value
  
    
   $
192.0  $
203.9 
Critical Accounting Estimates and Policies
The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance
with U.S. GAAP. The preparation of consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues
and expenses and related disclosures of contingent assets and liabilities at the date of our financial statements. Actual results may differ from these estimates under different
assumptions and conditions.
Critical accounting policies are those that reflect significant judgments of uncertainties and potentially result in materially different results under different assumptions and
conditions. We have described below what we believe are our most critical accounting policies when we acquire and operate vessels, because they generally involve a comparatively
higher degree of judgment in their application. For a description of all our significant accounting policies, see Note 2 to our consolidated financial statements included in this annual
report.
Fair Value Measurements
We follow the provisions of ASC 820 “Fair Value Measurements and Disclosures”, which defines fair value and provides guidance for using fair value to measure assets and
liabilities. The guidance creates a fair value hierarchy of measurement and describes fair value as the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants in the market in which the reporting entity transacts. In accordance with the requirements of accounting guidance relating to Fair Value
Measurements, we classify and disclose our assets and liabilities carried at the fair value in one of the following categories:
Level 1: Quoted market prices in active markets for identical assets or liabilities;
Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data;
Level 3: Unobservable inputs that are not corroborated by market data.
The fair value measurement assumes that an instrument classified in the shareholders’ equity is transferred to a market participant at the measurement date. The transfer of an
instrument classified in shareholders’ equity assumes that the instrument would remain outstanding, and the market participant takes on the rights and responsibilities associated with
the instrument.
79

Table of Contents
The fair values of the Series B and Series C Preferred Shares at their issuance, as well as the fair value of the Series C Preferred Shares and of the Warrants that were assessed
on the date of triggering of their down-round feature, were determined through Level 3 of the fair value hierarchy as defined in FASB guidance for Fair Value Measurements, as they are
derived by using unobservable inputs. Determining the fair value of the equity instruments requires management to make judgments about the valuation methodologies, including the
unobservable inputs and other assumptions and estimates, which are significant in the fair value measurement of the preferred stock. For the estimation of the fair values of the Series C
Preferred Stock, we used the Black & Scholes and the discounted cash flow model, as applicable, and we also used significant unobservable inputs which are sensitive in nature and
subject to uncertainty, such as expected volatility and expected life of convertibility option. Indicatively, the expected volatility used in our various valuations during the year for the fair
value measurement of our Series C Preferred Stock fluctuated in a range from 86.83% to 118.14% from January 2023 to December 2023, depending, as applicable, on the expected life of
convertibility option which fluctuated between 1 and 5 years in the non-recurring fair value measurements performed during the year. As part of the methodology used to estimate the
fair values of these equity instruments, and specifically the value of the embedded convertibility option, which is perpetual in nature, the Company applied moneyness scenarios. Based
on these moneyness scenarios, it performed an analysis of the option deltas using different assumed expected life of the convertibility option (term) and equivalent (same term) historical
volatilities of the Company’s stock price to determine the most appropriate term and volatility inputs for the Black & Scholes option pricing formula. The Company selected the most
appropriate term and volatility inputs based on these moneyness scenarios considering the probability that the option will be in the money and thus will be exercised. Therefore, the
significant unobservable inputs of the fair value measurement, such as the expected life of the convertibility option (term) and (same term) historical volatility, are determined by applying
the option moneyness scenarios and therefore are considered highly interdependent. For example, applying a higher volatility input without altering the expected life of the convertibility
option (term) would increase the probability that the option will be exercised and would indicate that a shorter equivalent term should be applied to measure the fair value of the
instrument. On the other hand, applying a longer-term input without altering the volatility would increase the probability that the option will be exercised and would indicate that a lower
volatility should be applied to measure the fair value of the instrument. As such, the specific assumptions are deemed as complex in nature and highly sensitive, affecting the Company’s
earnings per share.
Accounting for Revenues
Since our vessels are employed under time charter contracts, voyage charters, and pool arrangements, we disaggregate our revenue from contracts with customers by the type
of charter (time charters, spot charters and pool arrangements).
We have determined that all of our time charter agreements contain a lease and are therefore accounted for as operating leases in accordance with ASC 842. Time charter
revenues are accounted for over the term of the charter as the service is provided. Vessels are chartered when a contract exists, and the vessel is delivered (commencement date) to the
charterer, for a fixed period of time, at rates that are generally determined in the main body of charter parties and the relevant voyage expenses burden the charterer (i.e., port dues, canal
tolls, pilotages, and fuel consumption). Upon delivery of the vessel, the charterer has the right to control the use of the vessel (under agreed prudent operating practices) as they have
the enforceable right to: (i) decide the delivery and redelivery time of the vessel; (ii) arrange the ports from which the vessel shall pass; (iii) give directions to the master of the vessel
regarding vessel’s operations (i.e., speed, route, bunkers purchases, etc.); (iv) sub-charter the vessel and (v) consume any income deriving from the vessel’s charter. Any off-hires are
recognized as incurred. The charterer may charter the vessel with or without the owner’s crew and other operating services. In the case of time charter agreements, the agreed hire rates
include compensation for part of the agreed crew and other operating services provided by the owner (non-lease components). We, as a lessor, elected to apply the practical expedient
which allowed us to account for the lease and the non-lease components of time charter agreements as one, as the criteria of the paragraphs ASC 842-10-15-42A through 42B are met.
80

Table of Contents
Spot, or voyage, charter is a charter where a contract is made in the spot market for the use of a vessel for a specific voyage for a specified freight rate per ton, regardless of time
to complete. We have determined that under voyage charters, the charterer has no right to control any part of the use of the vessel. Thus, our voyage charters do not contain a lease and
are accounted for in accordance with ASC 606. More precisely, we satisfy our single performance obligation to transfer cargo under the contract over the voyage period. Thus, revenues
from voyage charters on the spot market are recognized ratably from the date of loading (Notice of Readiness to the charterer, that the vessel is available for loading) to discharge date of
cargo (loading-to-discharge). Voyage charter payments are due upon discharge of the cargo. Demurrage revenue, which is included in voyage revenues, represents charterers’
reimbursement for any potential delays exceeding the allowed lay time as per charter party agreement, represents a form of variable consideration and is recognized as the performance
obligation is satisfied. We have taken the practical expedient not to disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or
less.
For vessels operating in pooling arrangements, we earn a portion of total revenues generated by the pool, net of expenses incurred by the pool. The amount allocated to each
pool participant vessel, including our vessels, is determined in accordance with an agreed-upon formula, which is determined by the margins awarded to each vessel in the pool based on
the vessel’s age, design and other performance characteristics. Revenue under pooling arrangements is accounted for as variable rate operating lease on the accrual basis and is
recognized in the period in which the variability is resolved. We recognize net pool revenue on a quarterly basis, when the vessel has participated in a pool during the period and the
amount of pool revenue can be estimated reliably based on the pool report. The allocation of such net revenue may be subject to future adjustments by the pool, however, such changes
are not expected to be material.
Impairment of Long-lived Assets
We follow ASC 360-10-40 “Impairment or Disposal of Long-Lived Assets”, which addresses financial accounting and reporting for the impairment or disposal of long-lived
assets. We review vessels for impairment whenever events or changes in circumstances (such as market conditions, the economic outlook, technological, regulatory and environmental
developments, obsolesce or damage to the asset, potential sales and other business plans) indicate that the carrying amount of a vessel plus her unamortized dry-dock costs may not be
recoverable. When the estimate of future undiscounted net operating cash flows, excluding interest charges, expected to be generated by the use of the vessel over her remaining useful
life and her eventual disposition is less than her carrying amount plus unamortized dry-dock costs, we evaluate the vessel for an impairment loss. The measurement of the impairment
loss is based on the fair value of the vessel. We determine the fair value of our vessels based on assumptions, by making use of available market data and taking into consideration third-
party valuations. We evaluate the carrying amounts and periods over which vessels are depreciated to determine if events have occurred which would require modification to their
carrying values or useful lives. In evaluating useful lives and carrying values of long-lived assets, management reviews certain indicators of potential impairment, such as undiscounted
projected operating cash flows, vessel sales and purchases, business plans, and overall market conditions. In developing estimates of future undiscounted cash flows, we make
assumptions and estimates about the vessels’ future performance, with the significant assumptions being related to charter rates and fleet utilization, while other assumptions include
vessels’ operating expenses, vessels’ residual value, dry-dock costs, and the estimated remaining useful life of each vessel. The assumptions used to develop estimates of future
undiscounted cash flows are based on historical trends as well as future expectations. We also take into account factors such as the vessels’ age and employment prospects under the
then current market conditions, and determine the future undiscounted cash flows considering its various alternatives, including sale possibilities existing for each vessel as of the
testing dates.
In detail, the projected net operating cash flows are determined by considering the historical and estimated vessels’ performance and utilization, as well as historical utilization
of other vessels of similar type and size considering our recent shift to the tanker market and the lack of extended historical data, the charter revenues from existing time charters for the
fixed fleet days and an estimated daily rate for the unfixed days (based on the most recent 10 year average historical rates available for each type of vessel) over the remaining estimated
life of each vessel, net of commissions, expected outflows for scheduled vessels’ maintenance and vessel operating expenses assuming an average annual inflation rate. Effective fleet
utilization, which is estimated based on the vessels’ historical performance, is included in our exercise, taking into account the period(s) each vessel is expected to undergo her
scheduled maintenance (dry docking and special surveys), assumptions in line with our historical performance since the acquisition of our tanker vessels, peers’ historical performance,
and our expectations for future fleet utilization under our fleet employment strategy. For 2024, 2023 and 2022, we assessed that there were no indications for potential impairment of any
of our vessels.
81

Table of Contents
RESULTS OF OPERATIONS
Year ended December 31, 2024, compared to the year ended December 31, 2023
Results of Operations
  
 
 
 
For the Years Ended December 31,
 
 
 
2024  
2023  
variation  
% change 
 
 
in millions of U.S. dollars
   
 
Revenue
 $
87.5  $
108.9  $
(21.4)   
(19.7)%
Voyage expenses
 $
(4.2)  $
(4.4)  $
0.2   
(4.5)%
Vessel operating expenses
 $
(19.8)  $
(21.9)  $
2.1   
(9.6)%
Depreciation and amortization of deferred charges
 $
(13.4)  $
(14.8)  $
1.4   
(9.5)%
General and administrative expenses
 $
(8.3)  $
(8.0)  $
(0.3)   
3.8%
Gain on vessels’ sale
 $
0.0  $
15.7  $
(15.7)   
(100)%
Interest and finance costs
 $
(1.4)  $
(9.6)  $
8.2   
(85.4)%
Loss from debt extinguishment
 $
0.0  $
(0.4)  $
0.4   
100%
Interest income
 $
3.3  $
3.3  $
0   
0%
Changes in fair value of warrants’ liability
 $
0.0  $
0.6  $
(0.6)   
(100)%
Net income
 $
43.7  $
69.4  $
(25.7)   
(37.0)%
Net Income. Net income for 2024 amounted to $43.7 million, compared to a net income of $69.4 million in 2023. The income of the year ended December 31, 2024, was lower as compared to
2023, mainly because of reduced ownership days after the sale of the vessel P. Kikuma in late 2023, which also resulted in a gain on sale of $15.7 million, included in 2023 statements of
operations.
Revenues. Revenues for 2024 amounted to $87.5 million, compared to $108.9 million in 2023. In 2024, revenues decreased mainly as a result of reduced ownership days after the sale of the
vessel P. Kikuma in late 2023, and partially due to lower TCE rates achieved in 2024. On average, the TCE’s achieved by our tanker vessels amounted to $32,954 in 2024 and $36,954 in
2023.
Voyage Expenses. Voyage expenses for 2024 amounted to $4.2 million, compared to $4.4 million in 2023. Voyage expenses mainly consist of bunkers costs, port and canal expenses, and
commissions paid to third-party brokers. The decrease in voyage expenses in 2024 compared to 2023 was mainly attributable to lower commissions, as commissions are a percentage on
revenues and follow their trend, and also due to reduced bunkers and port expenses as a result of lighter exposure to spot voyages in 2024 as compared to 2023.
Vessel Operating Expenses. Vessel operating expenses for 2024 amounted to $19.8 million, compared to $21.9 million in 2023, and mainly consist of crew wages and related costs,
consumables and stores, insurances, repairs and maintenance costs, environmental compliance and other miscellaneous expenses. The decrease in operating expenses is attributable to
reduced ownership days in 2024, and was partially offset by increased daily operating crew costs and environmental costs. On an average basis, daily operating expenses for our vessels
increased during the year ($7,712 in 2024, as compared to $7,537 in 2023).
Depreciation and Amortization of Deferred Charges. Depreciation and amortization of deferred charges in 2024 amounted to $13.4 million, compared to $14.8 million in 2023, and mainly
represent the depreciation expense and the amortization of the dry-dock costs for our vessels. The decrease in 2024 mainly attributable to decreased depreciation expense, as a result of
the sale of the vessel P. Kikuma in late 2023, while the dry-dock amortization remained almost unaltered across the years 2023-2024.
General and Administrative Expenses. General and administrative expenses for 2024 amounted to $8.3 million, compared to $8.0 million in 2023, and mainly consist of payroll expenses of
the office employees, consultancy fees, brokerage services fees, compensation cost on restricted stock awards, legal fees and audit fees. The increase in general administrative expenses
was mainly attributable to the increase in the costs associated with the Sphinx lawsuit, and partially to the increase in our legal fees. These increases were counterbalanced by decreased
salaries and bonuses, and also lower consultancy fees.
82

Table of Contents
Gain on Vessel’s Sale. During 2024, there have been no vessels’ disposals, while in 2023 there was a gain on sale of $15.7 million, which related to the sale of the vessel P. Kikuma.
Interest and Finance Costs. Interest and finance costs for 2024 amounted to $1.4 million, compared to $9.6 million in 2023, and includes the interest expense on our bank loans, and
imputed interest capitalized for our four newbuilding vessels. The decrease of interest and finance costs in 2024 is attributable to the decrease  in our average debt following the full
repayment of our indebtedness to Piraeus Bank during 2023 contributed to the lower costs, and also to the decrease in our loan interest rates, as our weighted average interest rate in
2024 was 6.91%, compared to 7.60% in 2023. Imputed interest, capitalized, increased to $2.4 million in 2024 from $0.5 million in 2023, as in 2024 we paid additional installments for all our
four newbuilding vessels.
Loss from Debt Extinguishment. Loss from debt extinguishment for 2023 amounted to $0.4 million, while there was no such loss in 2024.  Loss from debt extinguishment in 2023 related to
the write off of the unamortized financing costs of our loans with Piraeus Bank, which were fully repaid in 2023.
Changes in Fair Value of Warrants’ Liability. Changes in fair value of warrant’s liability for 2024 was negligible, while for 2023 they amounted to $0.6 million and represent the
subsequent changes in the fair values of our Series A Warrants, which were classified as non-current liabilities on our consolidated balance sheets.
Interest Income. Interest income for 2024 and 2023 amounted to $3.3 million and $3.3 million respectively, and mainly consisted of interest income received on deposits of cash and cash
equivalents. The interest income remained at the same levels in 2024 and 2023.
Year ended December 31, 2023, compared to the year ended December 31, 2022
Please refer to our annual report on Form 20-F for the year ended December 31, 2023, as filed with the SEC on March 28, 2024.
B.
Liquidity and Capital Resources
We have historically financed our capital requirements with cash flow from operations, equity contributions from shareholders, and long- and medium-term debt. Our operating
cash flow is generated from charters on our vessels, through our subsidiaries. Our main uses of funds have been capital expenditures for the acquisition of new vessels, expenditures
incurred in connection with ensuring that our vessels comply with international and regulatory standards, repayments of loans, and payments of dividends. At times when we are not
restricted by our lenders from acquiring additional vessels, we will require capital to fund vessel acquisitions and debt service.
During the COVD-19 pandemic, global financial markets, including financial markets in the U.S., experienced even greater relative volatility and a steep and abrupt downturn.
More recently, the war between Russia and Ukraine and resulting sanctions have disrupted supply chains and cause instability in the energy markets and the global economy, which
have experienced significant volatility. Credit markets and the debt and equity capital markets have been distressed, and the uncertainty surrounding the future of the global credit
markets has resulted in reduced access to credit worldwide, particularly for the shipping industry. These issues, along with significant write-offs in the financial services sector, the
repricing of credit risk, and the current weak economic conditions, have made, and will likely continue to make it difficult to obtain additional financing. The current state of global
financial markets and current economic conditions might adversely impact our ability to issue additional equity at prices that will not be dilutive to our existing shareholders or preclude
us from issuing equity at all.
83

Table of Contents
As of December 31, 2024 and 2023, our working capital, which is current assets minus current liabilities, including the current portion of long-term debt, was $64.0 million and
$64.6 million, respectively. Management monitors the Company’s liquidity position to ensure that it has access to sufficient funds to meet its forecasted cash requirements, including
debt service commitments, and to monitor compliance with the financial covenants within its loan facilities. Our loan facilities require that we maintain a minimum liquidity balance
(compensating cash balance) and a certain level of restricted cash throughout the life of the loans. Currently, and in the short- and long-term, our primary sources of funds are and are
expected to be available cash, cash from operations, proceeds from long-term debt and proceeds from equity offerings, or a combination of those. Our primary liquidity needs in the
short- and long-term are expected to include debt amortization, capital expenditures for the acquisition of new vessels, and the payment of preferred dividends. We believe that our
working capital will be sufficient to meet our liquidity needs and to comply with our banking covenants for at least twelve months from the end of the period presented in the financial
statements included in this report, and that these sources of funds which we anticipate being available to us will be sufficient to meet our long-term liquidity needs. For the upcoming 12
months from the date of this annual report, we expect to drawdown approximately $134.6 million under our sale and leaseback agreements, and we are obligated to make debt payments of
$7.5 million in the aggregate under the terms of our existing loan facilities, payments under our sale and leaseback agreements of our newbuilding vessels of $3.2 million, and dividends of
$1.9 million in the aggregate will accrue on our outstanding Series B Preferred Shares and Series C Preferred Shares, assuming that the number of our Series B Preferred Shares and Series
C Preferred Shares remained unaltered, and that such dividends are paid in cash. Installment payments under the shipbuilding contracts we entered into on March 7, 2023 and December
18, 2023 are tied to specific construction milestones, the timing of which is uncertain. With respect to the shipbuilding contract of Hull 1515 that we entered into in March 2023, we paid
the first installment of $9.5 million in April 2023, and further paid an instalment of $6.3 million in August 2024, and an instalment of $6.3 million in February 2025. We will further pay 10%
of the vessel’s purchase price at the milestone of launching of the vessel, and the remaining 55% of the purchase price is payable upon the vessel’s delivery. With respect to the
shipbuilding contract of the Hull 1596 that we entered into in December 2023, in January and October 2024, we paid the first and second installments of the purchase price in the amounts
of $9.7 million and $6.5 million, respectively, and we will additionally pay 10% of the purchase price at each of the milestones of keel laying, and launching of the vessel, and the
remaining 55% of the purchase price is payable upon the delivery of the vessel. With respect to the shipbuilding contract of the Hull 1597 that we entered into in December 2023, in
January 2024 and February 2025 we paid the first and second installments of the purchase price in the amounts of $9.7 million and $6.5 million, respectively, and we will additionally pay
10% of the purchase price at each of the milestones of keel laying, and launching of the vessel, and the remaining 55% of the purchase price is payable upon the delivery of the vessel.
As regards to the shipbuilding contract of the Hull 1624 that we entered into in April 2024, in June 2024 we paid the first installment of the purchase price in the amount of $8.5 million,
and we will additionally pay 10% of the purchase price at each of the milestones of steel cutting, keel laying, and launching of the vessel, and the remaining 55% of the purchase price is
payable upon the delivery of the vessel. For additional information on the amortization of our long-term debt obligations, see “—Loan Facilities.” For information on our future capital
expenditures, see “—Capital Expenditures.” In order to meet our liquidity needs, we may enter into new debt facilities in the future, as well as equity or debt instruments, although there
can be no assurance that we will be able to obtain additional debt or equity financing on terms acceptable to us, which will also depend on financial, commercial and other factors, as well
as a significant recovery in capital market conditions and a sustainable improvement in the tankers’ charter market, that are beyond our control.
Cash Flow
As of December 31, 2024, cash and cash equivalents amounted to $71.3 million (including restricted cash of $1.0 million and compensating cash balances of $10.0 million),
compared to $68.3 million (including restricted cash of $1.0 million and compensating cash balances of $10.0 million) for the prior year. We consider highly liquid investments such as time
deposits and certificates of deposit with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents are primarily held in U.S. dollars.
Net Cash Provided by Operating Activities
Net cash provided by operating activities in 2024 amounted to $59.9 million. Net cash provided by operating activities in 2023 amounted to $68.0 million. Net cash provided by
operating activities in 2022 amounted to $33.8 million. Cash from operations in 2024 decreased compared to 2023, mainly due to reduced ownership days of our fleet and to slightly lower
TCE, as compared to 2023. Cash from operations in 2023 increased compared to 2022, mainly due to the higher revenues generated during 2023 as a result of the recovery market
conditions in the tankers’ shipping industry which are depicted in the higher TCE achieved by the Company, as compared to 2022.
Net Cash (Used in) / Provided by Investing Activities
Net cash used in investing activities in 2024 was $47.4 million and consists of $47.2 million that we paid as advances and other capitalized costs for our newbuildings, $0.2
million that we paid for vessels’ improvement costs mainly relating to Panama canal fittings on one of our vessels, and $17 thousand we paid for equipment additions.
84

Table of Contents
Net cash provided by investing activities in 2023 was $25.7 million and consists of $37.6 million net proceeds received from the sale of one Aframax tanker vessel during the
year, $11.3 million that we paid as advances and other capitalized costs for our newbuildings, $0.1 million that we paid for vessel acquisitions, $0.5 million that we paid for vessels’
improvement costs mainly relating to the installation of the ballast water treatment system on certain of our vessels, and $38 thousand we paid for equipment additions.
Net cash used in investing activities in 2022 was $113.0 million and consists of $2.1 million we paid for vessels’ improvement costs mainly relating to the installation of the
ballast water treatment system on certain of our vessels, $143.4 million that we paid for the acquisition of four tanker vessels, $32.6 million net proceeds received from the sale of one
Aframax tanker vessel during the year, and $27 thousand we paid for equipment additions.
Net Cash (Used in) /  Provided by / Financing Activities
Net cash used in financing activities in 2024 was $9.4 million and consists of $7.5 million of bank loan repayments, $0.2 million proceeds from the exercise of warrants, $1.8
million that we paid as cash dividends to our preferred shareholders, and $0.2 million of payments of financing costs.
Net cash used in financing activities in 2023 was $65.1 million and consists of $75.4 million of bank loan repayments, $2.1 million of bank loan proceeds, $11.4 million net
proceeds from the issuance of units, common shares and warrants, $0.3 million proceeds from the exercise of warrants, $0.5 million proceeds from the issuance of preferred shares, $0.7
million net proceeds from the issuance of common shares under our ATM program, $2.8 million that we paid for the repurchase of our common shares and $1.9 million that we paid as
cash dividends to our preferred shareholders.
Net cash provided by financing activities in 2022 was $109.3 million and consists of $5 million of related parties loans proceeds, $108.6 million of bank loan proceeds, $70
thousands of repayments of related party loans, $30.3 million of bank loan repayments, $26.1 million proceeds from issuance of common shares, $1.8 million proceed from issuance of
common shares under our ATM program, $0.9 million that we paid for the repurchase of our common shares and $0.9 million that we paid as cash dividends to our shareholders.
Loan Facilities and Sale – Leaseback Agreements
As of December 31, 2024, we had $47.7 million of long-term debt outstanding under our bank loan facilities. As of April 15, 2025, we had $45.8 million aggregate amount of
indebtedness outstanding under our bank loan facilities.
As of December 31, 2023, we had $55.2 million of long-term debt outstanding under our bank loan facilities.
As of December 31, 2024 and 2023, and the date of this report, we have not used any derivative instruments for hedging purposes or other purposes.
Our loans are repayable in quarterly installments plus one balloon installment per loan agreement to be paid together with the last installment, and currently bear variable
interest at SOFR plus a fixed margin ranging from 0.65% to 2.60%. Their maturities fall due from November 2027 to August 2028. As of December 31, 2024, all our loans were collateralized
by four out of our seven tanker vessels. For a description of our loan facilities, please see Note 7 to our annual consolidated financial statements included elsewhere in this annual
report.
Nordea Bank Abp, Filial i Norge (Nordea):
On July 24, 2019, we, through two of our wholly owned subsidiaries (the “Initial Borrowers”), entered into a loan agreement with Nordea for a senior secured term loan facility of
up to $33.0 million (as amended from time to time, the “Nordea Facility”). The purpose of the loan facility was to partially finance the acquisition cost of the tanker vessels Blue Moon
and Briolette. In July and November 2019, the Initial Borrowers drew down the maximum amount of $16.5 million each.
85

Table of Contents
On December 23, 2019, we, through the “Initial Borrowers” and one new wholly owned subsidiary (collectively “the Borrowers”), entered into the first amendment and
restatement loan agreement with Nordea for a senior secured term loan facility of up to $47.0 million. The purpose of the amended agreement was to provide additional financing of up to
$14.0 million for the acquisition of the tanker vessel P. Fos, and in all other respects included identical terms to the initial agreement of July 2019, or the Initial Agreement. On January 22,
2020, we drew down the amount of $14.0 million to support the acquisition of the vessel P. Fos, whose delivery took place on January 27, 2020.
On March 20, 2020, we signed the second amendment and restatement loan agreement with Nordea for a senior secured term loan facility of up to $59.0 million. The purpose of
the second amendment and restatement loan agreement was to provide additional financing of up to $12.0 million for the acquisition of the tanker vessel P. Kikuma (ex FSL Shanghai),
and in all other respects included identical terms to the prior agreement of December 2019. On March 26, 2020, we drew down the amount of $12.0 million. The vessel P. Kikuma was
delivered to us on March 30, 2020.
On December 9, 2020, we refinanced the outstanding indebtedness relating to the vessels P. Fos and P. Kikuma in the aggregate amount of $21.2 million using a portion of the
proceeds from the Piraeus Facility (described below). Concurrently, we entered into a Supplemental Loan Agreement with Nordea, to amend the existing repayment schedules of the Blue
Moon and Briolette tranches and to amend the major shareholder’s clause included in the agreement. The First and Second Amendment and Restatement Loan Agreements, and the
Supplemental Loan Agreement with Nordea included substantially identical terms to the Initial Agreement.
In November 2021, Nordea provided their consent for a reduction of our minimum liquidity requirement from $9.0 million to $5.0 million, with an effective date December 31, 2021
through June 30, 2022, and effective July 1, 2022, the respective clause was reinstated to its initial requirements.
On August 7, 2023, we refinanced the Nordea Facility, which at that time had an outstanding balance (including interest) of $17.9 million, by entering into an agreement for a
Revolving Credit Facility (the “Nordea RCF”) in an amount not exceeding $20.0 million at any one time with Nordea, through certain wholly-owned subsidiaries. As such, we drew down
an amount of $2.1 million, which is reflected line item “Proceeds from Long-term bank debt” in the accompanying consolidated statements of cash flows. The Nordea RCF matures in 5
years from the signing date of the agreement.
As of December 31, 2024, the outstanding balance on the Nordea RCF was $15.8million.
Alpha Bank S.A.:
In November 2022, we, through our vessel-owning subsidiary of the vessel “P. Aliki” signed a loan agreement with Alpha Bank S.A (“Alpha Bank”), to support the acquisition
of the vessel by providing a secured term loan of up to $18.3 million, or the “P. Aliki” loan. The maximum loan amount was drawn down upon the vessel’s delivery to us in November
2022. As of December 31, 2024, the outstanding balance on the “P. Aliki” loan was $14.3 million.
In December 2022, we, through our vessel-owning subsidiary of the vessel “P. Long Beach” signed a loan agreement with Alpha Bank S.A, to support the acquisition of the
vessel by providing a secured term loan of up to $22.0 million, or the “P. Long Beach” loan. The maximum loan amount was drawn down upon the vessel’s delivery to us in December
2022. As of December 31, 2024, the outstanding balance on the “P. Long Beach” loan was $17.6 million.
In April 2024, we agreed with Alpha Bank to amend the interest rate clauses of the two loan agreements discussed above. We can, at our option, place in collateral accounts
amounts equal, or less, to each outstanding loan principal for the benefit of lowering the margin of the loans from 2.35% and 2.60% to 0.65%. The amounts placed in the collateral
accounts are not legally restricted as long as we have not received from the lenders any notice for an event of default, and may, at our option, be withdrawn from the respective collateral
accounts on the last day of an interest period with prior written notice to the Lender. Upon such withdrawal, the initial margin (2.35% for the “P. Long Beach” loan, and 2.60% for the “P.
Aliki” loan) shall reinstate on such part of the loan. Accordingly, as of December 31, 2024, we had placed in Alpha Bank’s collateral accounts the aggregate amount of $31.9 million, being
equal to the loans’ outstanding principal amounts, and these cash amounts are included in Cash and cash equivalents in our consolidated balance sheets.
86

Table of Contents
Piraeus Bank S.A.:
In June 2022, we, through our vessel-owning subsidiaries of the vessels “P. Sophia” and “P. Yanbu”, entered into a loan agreement with Piraeus Bank S.A. (“Piraeus Bank”) for a
senior secured term loan facility of up to $31.9 million. The purpose of this facility was to finance the acquisition of “P. Sophia” by up to $24.6 million and refinance the then- existing
indebtedness of $7.3 million of the vessel “P. Yanbu”. The Company utilized the full amount of $31.9 million in July 2022.
In November 2022, we, through our vessel-owning subsidiaries of the vessels “P. Monterey” and “P. Kikuma”, entered into a new loan agreement with Piraeus Bank for a senior
secured term loan facility of up to $37.4 million. The purpose of this facility was to finance the acquisition of “P. Monterey” by up to $29.6 million and refinance the then-existing
indebtedness of $7.8 million of the vessel “P. Kikuma.” We utilized an amount of $36.5 million in November 2022.
In November 2021, Piraeus Bank provided their consent for a reduction of our minimum liquidity requirement from $9.0 million to $5.0 million, with an effective date on and from
December 31, 2021 through September 30, 2022, and effective October 1, 2022, the respective clause was reinstated to its initial requirements.
On December 18, 2023, we completed the approximately $44.6 million voluntary prepayment of all of our existing loans with Piraeus Bank S.A. and released the security over our
vessels P. Monterey, P. Yanbu and P. Sophia. The prepayment was completed through the deployment of our excess liquidity. In light of the prepayments, as of December 31, 2023, no
amounts are outstanding under the Piraeus Bank loans.
Mango Shipping Corp.:
On March 2, 2022, we entered into an unsecured credit facility with Mango Shipping Corp., an affiliated entity whose beneficial owner is Aliki Paliou, for up to $5.0 million, to be
used for general working capital purposes. The loan had a term of one year from the date of the agreement, bore interest of 9.0% per annum, and was drawn in arrears at our request. The
agreement also provided for arrangement fees of $0.2 million payable on the date of the agreement, and commitment fees of 3.00% per annum on any undrawn amount until the maturity
date. We drew down the $5.0 million loan amount in two advances in March 2022.
On October 17, 2022, we entered into a stock purchase agreement with Mango pursuant to which we agreed to issue to Mango in a private placement 1,314,792 Series C
Preferred Stock in exchange for (i) all 657,396 Series B Preferred Shares held then by Mango, and (ii) the agreement by Mango to apply $4.9 million (an amount equal to the aggregate
cash conversion price payable upon conversion of such Series B Preferred Shares into Series C Preferred Shares pursuant to their terms) as a prepayment by us of the unsecured credit
facility. The transaction was approved by a special independent committee of our board of directors. On October 19, 2022, we repaid the remaining amounts due of $70, together with
accrued interest, and terminated the credit facility.
Sale-Leaseback Agreements:
On July 16, 2024, we entered into a sale and leaseback agreement with an unaffiliated third party for one of our newbuild LR2 Aframax tanker vessels. The bareboat financing
amount totals $44.3 million and as part of this agreement, the vessel will be sold and chartered back on a bareboat basis for an eight-year period from delivery at bareboat charter rates
equivalent to 96 monthly installments of $7,132 per day and a balloon payment of approximately $23.7 million payable together with the last installment, with an implied interest rate of
Term SOFR plus 2.425% per annum. We have continuous options to repurchase the vessel at predetermined rates following the second anniversary of the bareboat charter.
87

Table of Contents
On October 24 2024 we entered into a sale and leaseback agreement with an unaffiliated third party for one of our newbuild LR2 Aframax tanker vessels The bareboat financing
On October 24, 2024, we entered into a sale and leaseback agreement with an unaffiliated third party for one of our newbuild LR2 Aframax tanker vessels. The bareboat financing
amount totals approximately US$45.39 million. As part of this agreement, the vessel will be sold and then chartered back on a bareboat basis for a ten-year period starting from delivery
from the shipyard. The bareboat charter includes 120 monthly installments at a fixed rate of US$211,500 plus a variable rate calculated monthly at an implied interest rate of SOFR plus
2.1% per annum. Additionally, a balloon payment of approximately $20 million payable together with the last installment for the repurchase of the vessel. We have continuous options to
repurchase the vessel at predetermined rates following the second anniversary of the bareboat charter.
On March 5, 2025, we entered into a sale and leaseback agreement with an unaffiliated third party for one of our newbuild LR2 Aframax tanker vessels. The bareboat financing
amount totals $45 million and as part of this agreement, the vessel will be sold and chartered back on a bareboat basis for an eight-year period from delivery at bareboat charter rates
equivalent to 96 monthly installments of $6,850 per day and a balloon payment of approximately $25 million payable together with the last installment, with an implied interest rate of Term
SOFR plus 2.05% per annum. We have continuous options to repurchase the vessel at predetermined rates following the second anniversary of the bareboat charter.
Covenants and Security
Our loan facilities have financial covenants, which require us to maintain, among other things:
•
Minimum hull value of the financed vessels.
•
Minimum cash liquidity. As of December 31, 2024 and 2023, the maximum compensating cash balance required under our loan agreements amounted to $10.0 million and $10.0
million, respectively.
Our loan facilities also contain undertakings limiting or restricting us from, among other things:
•
Effecting dividend distributions following the occurrence of an event of default.
•
Effecting certain changes in shareholdings.
Our secured loan facilities are generally secured by, among other things:
•
A parent guarantee by Performance Shipping Inc.
•
First priority mortgages over the financed tanker vessels.
•
First priority assignments of earnings, insurances and of any charters exceeding durations of two years.
•
Pledge over the borrowers’ shares and over their earnings accounts.
•
Undertakings by the vessels’ managers.
As of December 31, 2024, and the date of this report, we were in compliance with all of our loan covenants.
Capital Expenditures
Our future capital expenditures relate to the purchase of vessels, building of vessels and vessel upgrades. Our primary sources of funds will be available cash, cash from
operations, proceeds from long-term debt and equity contributions from shareholders, or a combination of those.
On March 7, 2023, we entered into a shipbuilding contract with China Shipbuilding Trading Company Limited and Shanghai Waigaoqiao Shipbuilding Company Limited for the
construction of a product/crude oil tanker of approximately 114,000 dwt. The newbuilding (H1515) has a gross contract price of $63.3 million and we expect to take delivery of it in the
third quarter 2025. The purchase price of the newbuilding is payable in five instalments, with the first one at the signing of the contract at $9.5 million, the second, third and fourth at $6.3
million each at each of the milestones of steel cutting, keel laying, and launching of the vessel, and the final instalment for the balance of the amount or $34.9 million at the delivery of the
vessel.
88

Table of Contents
On December 18, 2023, we further entered into two shipbuilding contracts with China Shipbuilding Trading Co. Ltd. and Shanghai Waigaoqiao Shipbuilding Co. Ltd. for the
construction of two 114,000 DWT LNG-ready LR2 Aframax product/crude oil tanker vessels, at a gross purchase price of $64.8 million per vessel. The two vessels (Hulls 1596 and 1597)
are expected to be delivered in the third quarter 2025 and first quarter 2026, respectively. The purchase price for each newbuilding is payable in instalments as follows: 15% of the
purchase price is payable upon receipt of a refund guarantee; 10% of the purchase price is payable at each of the milestones of steel cutting, keel laying, and launching of the vessels,
and the remaining 55% of the purchase price is payable upon the delivery of the vessels.
Finally, on April 30, 2024, we entered into a shipbuilding contract with Jiangsu Yangzijiang Shipbuilding Group Co., Ltd., Jiangsu New Yangzi Shipbuilding Co., Ltd., and Jiangsu
Yangzi Xinfu Shipbuilding Co., Ltd. for the construction of a scrubber fitted 75,000 DWT LR1 chemical/product oil tanker for a gross contract price of $56.5 million. We expect to take
delivery of the vessel (Hull 1624) in the first quarter of 2027. The gross purchase price of the newbuilding is payable in five instalments, with the first one at the signing of the contract at
$8.4 million, the second, third and fourth at $5.7 million each at each of the milestones of steel cutting, keel laying, and launching of the vessel, and the final instalment for the balance of
the amount or $31.0 million at the delivery of the vessel. The final purchase price may be reduced to $54.1 million, should certain technical conditions exist at delivery.
We also expect to incur additional capital expenditures when our vessels undergo surveys. This process of recertification may require us to reposition these vessels from a
discharge port to shipyard facilities, which will reduce our operating days during the period. The loss of earnings associated with the decrease in operating days, together with the
capital needs for repairs and upgrades results in increased cash flow needs which we fund with cash on hand.
C.
Research and Development, Patents and Licenses, etc.
From time to time, we incur expenditures relating to inspections for acquiring new vessels that meet our standards. Such expenditures are capitalized to vessel’s cost upon such
vessel’s acquisition or expensed, if the vessel is not acquired, however, historically, such expenses were not material.
D.
Trend Information
Tanker Shipping Market
Global crude oil demand increased by 0.8% in 2024 and is currently projected to rise at a similar rate by 1.0% in 2025 (104.1 million barrels per day), while seaborne crude oil trade
is expected to grow by 1.6% in 2025 (39.7 million barrels per day) driven by an expected recovery in OPEC+ oil production.
Market conditions across the crude oil tanker sector appear balanced for 2025, as crude tanker dwt demand is projected to grow by 1.3% while the crude tanker fleet is projected
to grow marginally by 0.8%. Geopolitical events, such as the ongoing conflict between Russia and Ukraine and the reported missile attacks to vessels operating in the Red Sea area have
had a positive impact on ton mile demand growth as in both cases the disruptions have resulted in significant shifts in crude oil trade patterns towards longer-haul destinations, thus
supporting tanker charter rates and ton-mile demand. Nevertheless, the broader implications of such geopolitical events, combined with the uncertainty surrounding tighter sanctions,
remain challenging factors, with their long-term impact on the tanker markets yet to be determined.
According to industry sources, the average spot earnings for an Aframax tanker trading on selected routes (e.g., Intra-Asia, Med-Med, Black Sea-Med and others) in 2024 was a
daily TCE rate of $44,487. This compares to an estimated daily TCE rate of $56,827 in 2023.
The above market outlook update is based on information, data and estimates derived from industry sources, and there can be no assurances that such trends will continue or
that anticipated developments in tanker demand, fleet supply or other market indicators will materialize. While we believe the market and industry information included in this report to be
generally reliable, we have not independently verified any third-party information or verified that more recent information is not available. The statements in this “Trend Information”
section are forward-looking statements based on our current expectations and certain material assumptions and, accordingly, involve risks and uncertainties that could cause actual
results, performance and outcomes to differ materially from those expressed herein.
89

Table of Contents
Impact of War in Ukraine and other global conflicts
Furthermore, the ongoing war between Russia and the Ukraine has amplified volatility in the tanker market, disrupting supply chains and causing instability in the global
economy. The United States and the European Union, among other countries, announced sanctions against Russia, including sanctions targeting the Russian oil sector, among those a
prohibition on the import of oil from Russia to the United States. The ongoing conflict in Ukraine could result in the imposition of further economic sanctions against Russia and given
Russia’s role as a major global exporter of crude oil, the Company’s business may be adversely impacted. Currently, none of the Company’s contracts have been affected by the events in
Russia and Ukraine. In the short term, the effect of the invasion of Ukraine has been positive for the tanker market, yet the overall longer term effect on ton-mile demand is uncertain
given that cargoes exported previously from Russia will need to be substituted by cargoes from different sources due to the oil and oil products embargo enacted by the United States,
the European Union and the United Kingdom. As of December 31, 2024, and during the year ended December 31, 2024, the Company’s financial results have not been adversely affected
from the impact of war between Russia and Ukraine. However, it is possible that in the future third parties with whom the Company has or will have contracts may be impacted by such
events. While in general much uncertainty remains regarding the global impact of the conflict in Ukraine, it is possible that such tensions could adversely affect the Company’s business,
financial condition, results of operation and cash flows.
Following the outbreak of the 2023 Israel–Hamas war, missile attacks by the Houthis have been reported on vessels passing off Yemen’s coast in the Red Sea in December 2023.
This has caused several vessels to divert via the Cape of Good Hope in South Africa, in order to avoid transiting the Red Sea. The initial effect of Red Sea tensions on the tanker market
has been positive for the tanker market as the longer route via Cape of Good Hope is absorbing more vessels, thereby reducing supply. Looking forward, it is impossible to predict the
course of this conflict and whether there would be any serious escalation emanating from the current state of affairs. Similar to the war in Ukraine, we believe that a generalized conflict
involving several Middle Eastern nations would possibly result in higher inflation and possibly slower economic growth, which could potentially have an adverse effect on the demand
for crude oil and petroleum products. To the extent that Red Sea tensions remain contained to the region, the effects on the tanker market could be similar to what we have seen so far.
Apart from the effect on the tanker market, the current situation presents a significant safety hazard for all vessels transiting the Red Sea, and could ultimately potentially result in heavy
damage being sustained due to successful missile strikes.
Impact of Inflation and Interest Rate Increases
Also, we see near-term impacts on our business due to elevated inflation in the United States of America, Eurozone and other countries, including ongoing global prices
pressures in the wake of the war in Ukraine, political unrest and conflicts in the Middle East, driving up energy prices, commodity prices, which continue to have a moderate effect on our
operating expenses. Interest rates have increased rapidly and substantially as central banks in developed countries raise interest rates in an effort to subdue inflation. The eventual
implications of tighter monetary policy, and potentially higher long-term interest rates may drive a higher cost of capital for our business.
E.
Critical Accounting Estimates
For a description of all our principal accounting policies, see Note 2 to our annual consolidated financial statements included elsewhere in this annual report, and for our critical
accounting estimates, see the paragraph under “Item 5. Operating and Financial Review and Prospects—A. Operating Results” entitled “Critical Accounting Estimates and Policies”
discussed above.
Item 6.
Directors, Senior Management, and Employees
A.
Directors and Senior Management
Set forth below are the names, ages, and positions of our directors and executive officers. Our board of directors consists of five members elected annually on a staggered basis,
and each director elected holds office for a three-year term and until his or her successor is elected and has qualified, except in the event of such director’s death, resignation, removal, or
the earlier termination of his or her term of office. Officers are appointed from time to time by our board of directors and hold office until a successor is elected.
90

Table of Contents
Name
Age
 
Position
Andreas Michalopoulos
54
 
Class I Director, Chief Executive Officer and Secretary
Loïsa Ranunkel
47
 
Class I Director
Aliki Paliou
49
 
Class II Director and Chairperson of the Board
Alex Papageorgiou
53
 
Class III Director
Mihalis Boutaris
50
 
Class III Director
Anthony Argyropoulos
60
 
Chief Financial Officer
The term of the Class I directors expires in 2026, the term of the Class II directors expires in 2027, and the term of the Class III directors expires in 2025.
The business address of each officer and director is the address of our principal executive offices, which are located at 373 Syngrou Avenue, 175 64 Palaio Faliro, Athens,
Greece.
Biographical information concerning the directors and executive officers as of the date of this annual report is set forth below.
Andreas Michalopoulos has served as the Chief Executive Officer of Performance Shipping Inc. since October 2020 and as a Director since February 2020. From October 2019 to
October 2020, he served as our Deputy Chief Executive Officer. From January 13, 2010, to October 2020, he also served as our Chief Financial Officer. Andreas Michalopoulos served as
Chief Financial Officer and Treasurer of Diana Shipping Inc. from March 2006 to February 2020, and he also served as a Director of Diana Shipping Inc. from August 2018 to February
2020. He started his career in 1993 when he joined Merrill Lynch Private Banking in Paris. In 1995, he became an International Corporate Auditor with Nestle SA based in Vevey,
Switzerland and moved in 1998 to the position of Trade Marketing and Merchandising Manager. From 2000 to 2002, he worked for McKinsey and Company in Paris, France as an
Associate Generalist Consultant before joining a major Greek Pharmaceutical Group with U.S. R&D activity as a Vice President of International Business Development and Member of the
Executive Committee in 2002 where he remained until 2005. From 2005 to 2006, he joined Diana Shipping Agencies S.A. as a Project Manager. Andreas Michalopoulos graduated from
Paris IX Dauphine University with Honors in 1993 obtaining an MSc in Economics and a master’s degree in Management Sciences specialized in Finance. In 1995, he also obtained a
master’s degree in Business Administration from Imperial College, University of London. Andreas Michalopoulos is married to Aliki Paliou, who is also one of our Directors and current
Chairperson of our Board.
Loïsa Ranunkel has served as an independent Director of the Company and as the Chairman of our Compensation Committee since the 2022 annual meeting of shareholders.
She is an experienced insurance broker specializing in Trade Credit and Political Risks. Since 2018, she has been involved in overseeing the creation and the development of the Political
Risks Insurance (PRI) department at AU Group in Paris, a historical and world-leading broker specializing in securing and financing trade receivables. From 2014 to 2018, she worked as a
certified Political and Trade Credit Risks Insurance Broker in Greece with clients based in Greece and abroad, focusing on the construction industry, defense industry, renewable
energies, and shipbuilding. Loïsa Ranunkel began her career in the PRI market in 2006, when she was appointed manager of the Alcatel-Lucent global Political and Commercial Risks
program. Before entering the PRI market, she worked at HSBC Investment Bank as an information and communication expert and spent six years as a business development officer at
Egis Group - BDPA, a consulting firm specializing in international development assistance. Loïsa Ranunkel holds an MBA from the IAE - Paris Sorbonne.
Aliki Paliou has served as a Director since February 2020 and as Chairperson of our Board as of the 2022 annual meeting of shareholders. She also serves as Director, Vice-
President and Treasurer of Unitized Ocean Transport Limited since January 2020. From 2010 to 2015 she was employed as a Director and Treasurer of Alpha Sigma Shipping Corp. Aliki
Paliou studied Theatre Studies at the University of Kent in Canterbury, UK and obtained an M.A. in Scenography at Central Saint Martins School of Art and Design in London, UK. In
2005 she graduated with honors from the Greek School of Fine Art in Athens, Greece. She is married to Andreas Michalopoulos, our current Chief Executive Officer, Director and
Secretary.
91

Table of Contents
Alex Papageorgiou has served as an independent Director of the Company and as the Chairman of our Audit Committee since the 2022 annual meeting of shareholders. He has
over 25 years of experience in banking, capital markets, real estate, and shipping. Alex Papageorgiou previously served as the Chief Executive Officer of Hystead Limited, a retail real
estate company with over Euro 750 million in shopping mall assets located throughout Southeast Europe. He was also the founder and Chief Executive Officer of Assos Capital Limited, a
real estate private equity firm focused on real estate in Southeast Europe, as well as Assos Property Management EOOD, a leading retail property management company in Bulgaria. He
served as a Director of Seanergy Maritime Corp. (now Seanergy Maritime Holdings Corp.) from December 2008 to November 2009. From 2007 to 2008, he served as a non-executive
Director at First Business Bank in Athens, Greece. Between March 2005 and May 2006, he was the chief financial officer of Golden Energy Marine Corp., an international shipping
company transporting a variety of crude oil and petroleum products based in Athens, Greece. From March 2004 to March 2005, Alex Papageorgiou served as a director in the equities
group in the London office of Citigroup Global Markets Inc., where he was responsible for the management and development of Citigroup’s Portfolio Products business in the Nordic
region. From March 2001 to March 2004, Alex Papageorgiou served as a vice president in the equities group in the London office of Morgan Stanley & Co., where he was responsible for
Portfolio Product sales and sales-trading coverage for the Nordic region and the Dutch institutional client base. From April 1997 to March 2001, he was an associate at J.P. Morgan
Securities Ltd. in the Fixed Income and Investment Banking divisions. Alex Papageorgiou holds an MSC in Shipping, Trade and Finance from City University Business School in
London, UK and a BA (Hons) in Business Economics from Vrije Universiteit in Brussels, Belgium.
Mihalis Boutaris serves as an independent Director of the Company, as a member of our Audit Committee, and as a member of our Compensation Committee as of the 2022
annual meeting of shareholders. As a 5th-generation winemaker, he is the vice-president of Kir-Yianni and the secretary of the Yiannis Boutaris Foundation. He has worked for wineries in
California, Chile, France, and Greece. In 2006 Mihalis joined BCG as an associate and grew his track record by managing clean-tech joint ventures including eco-friendly biopesticides,
hydroelectric energy, and a pilot project of Motor Oil Hellas in concentrated solar power. In 2011 he moved to Shanghai to establish XiGu, a pioneering fine wine estate in Northwest
China, while growing Greek exports in Asia Pacific. In 2019 he became an advisor to the Innovation Office of NCSR “Demokritos” in Athens. A year later he also founded Athroa, a
venture studio backed by private investors & BigPi, one of the leading deep-tech VCs in Greece, that commercialized several patents by inventors in Greece and beyond. He graduated
from Harvard with a BA in philosophy and from UCDavis with a MSc in horticulture. He has served in the Greek Marine Corps and co-founded Arcturos, a wildlife NGO.
Anthony Argyropoulos has served as our Chief Financial Officer since October 2020. Anthony Argyropoulos is the founder of Seaborne Capital Advisors, an Athens, Greece
based financial advisory firm focused on the shipping and maritime industries. Prior to Seaborne Capital Advisors, Anthony Argyropoulos was a Partner at Cantor Fitzgerald & Co. until
September 2011, where he was responsible for the investment banking group’s activities in the maritime sector. Through early 2004, he was a Senior Vice President with Jefferies &
Company, Inc., where he was instrumental in developing their maritime investment banking practice. Anthony Argyropoulos graduated from Deree College, Athens, with a B.A. in
Economics and from Bentley College, Waltham, Mass. with an M.B.A. in Finance. He is a member of the Beta Gamma Sigma honor society of collegiate schools of business. He is a
frequent speaker in global shipping events, contributor to several publications and recipient of a number of awards.
B.
Compensation
Effective March 1, 2020, our senior management is remunerated based on their consultancy or employment agreements, as applicable. Pursuant to the consultancy agreement
we have in place with Anthony Argyropoulos, our Chief Financial Officer, we have agreed to pay Anthony Argyropoulos additional cash compensation in the amount of 0.35%, and
retroactively from September 2021 in the amount of 0.50%, of the consideration paid or received by us in connection with certain capital raising and other transactions.
For 2024, the aggregate fees and bonuses of our executive officers amounted to $1.5 million.
92

Table of Contents
During 2024, our non-executive directors received annual compensation in the aggregate amount of $30,000 plus reimbursement of their out-of-pocket expenses incurred while
attending any meeting of the board of directors or any board committee, and the chairperson of the board received annual compensation of $60,000. In addition, a committee chairman
received an additional $10,000 annually, and other committee members received an additional $5,000 annually. In addition, on October 12, 2023, a special committee was formed in
connection with the tender offer commenced by Sphinx Investments Corp. and any related matters, the members of which will receive $10,000 annually and the chairman $20,000 annually.
We do not have a retirement plan for our officers or directors. For 2024, fees, bonuses and expenses to non-executive directors amounted to $0.3 million.
On January 1, 2021, we granted to Anthony Argyropoulos, our Chief Financial Officer, stock options to purchase 8,000 of our common shares as share-based remuneration,
which can be exercised only when our stock price increases. The stock options are exercisable at a price range between $150.00 and $450.00 per share, for a term of five years. As of
December 31, 2024, and as of the date of this annual report, no stock options have been exercised.
In 2024, compensation costs relating to the aggregate amount of stock option awards amounted to $Nil. In addition, in 2024, compensation costs relating to restricted stock
awards that were issued in prior years were $Nil.
2015 Equity Incentive Plan
On May 5, 2015, we adopted an equity incentive plan, which we refer to as the 2015 Equity Incentive Plan, as amended from time to time, under which directors, officers,
employees, consultants and service providers of us and our subsidiaries and affiliates would be eligible to receive options to acquire common shares, stock appreciation rights, restricted
stock, restricted stock units and unrestricted common shares. On February 9, 2018, our board of directors adopted Amendment No 1 to the 2015 Equity Incentive Plan, solely to increase
the aggregate number of common shares issuable under the plan to 3,666 shares (as adjusted after the effectiveness of the reverse stock splits of November 2, 2020 and of November 15,
2022). Effective December 30, 2020, we amended and restated the 2015 Equity Incentive Plan, primarily to increase the aggregate number of common shares issuable under the plan to
35,922 (as adjusted after the effectiveness of the reverse stock split of November 15, 2022), and to extend the term. The plan will expire ten years from its date of adoption (as amended
and restated) unless terminated earlier by our board of directors. During the year ended December 31, 2020, we issued 4,481 restricted shares (as adjusted after the effectiveness of the
reverse stock split of November 15, 2022) under the plan to our executive officers and non-executive directors. On January 1, 2021, we granted to our Chief Financial Officer stock options
to purchase 8,000 (as adjusted after the effectiveness of the reverse stock split of November 15, 2022) of our common shares as share-based remuneration which can be exercised only
when our stock price increases. The stock options are exercisable at a price range between $150.00 and $450.00 per share, for a term of five years.
The 2015 Equity Incentive Plan is administered by our compensation committee, or such other committee of our board of directors as may be designated by the board to
administer the plan.
Under the terms of the 2015 Equity Incentive Plan, stock options and stock appreciation rights granted under the plan will have an exercise price per common share equal to the
market value of a common share on the date of grant, unless otherwise specifically provided in an award agreement, but in no event will the exercise price be less than the greater of (i)
the market value of a common share on the date of grant and (ii) the par value of one common share. Options and stock appreciation rights will be exercisable at times and under
conditions as determined by the plan administrator, but in no event will they be exercisable later than ten years from the date of grant.
The plan administrator may grant shares of restricted stock and awards of restricted stock units subject to vesting and forfeiture provisions and other terms and conditions as
determined by the plan administrator in accordance with the terms of the plan. Following the vesting of a restricted stock unit, the award recipient will be paid an amount equal to the
number of restricted stock units that then vest multiplied by the market value of a common share on the date of vesting, which payment may be paid in the form of cash or common
shares or a combination of both, as determined by the plan administrator. The plan administrator may grant dividend equivalents with respect to grants of restricted stock units.
Adjustments may be made to outstanding awards in the event of a corporate transaction or a change in capitalization or any other extraordinary event. In the event of a “change
in control” (as defined in the plan), unless otherwise provided by the plan administrator in an award agreement, awards then outstanding will become fully vested and exercisable in full.
93

Table of Contents
Our board of directors may amend the plan and may amend outstanding awards issued pursuant to the plan, provided that no such amendment may be made that would
materially impair any rights, or materially increase any obligations, of a grantee under an outstanding award without the consent of such grantee. Shareholder approval of plan
amendments will be required under certain circumstances. The plan administrator may cancel any award and amend any outstanding award agreement, except no such amendment shall
be made without shareholder approval if such approval is necessary to comply with any tax or regulatory requirement applicable to the outstanding award.
C.
Board Practices
Actions by our Board of Directors
Our amended and restated bylaws provide that vessel acquisitions and disposals from or to a related party and long term time charter employment with any charterer that is a
related party will require the unanimous approval of the independent members of our board of directors and that all other material related party transactions shall be subject to the
approval of a majority of the independent members of the board of directors.
Committees of our Board of Directors
Our Audit Committee, comprised of two members of our board of directors, is responsible for reviewing our accounting controls, recommending to the board of directors the
engagement of our independent auditors, and pre-approving audit and audit-related services and fees. Each member has been determined by our board of directors to be “independent”
under Nasdaq rules and the rules and regulations of the SEC. As directed by its written charter, the Audit Committee is responsible for reviewing all related party transactions for
potential conflicts of interest and all related party transactions are subject to the approval of the Audit Committee. Alex Papageorgiou serves as the Chairman of the Audit Committee.
We believe that Alex Papageorgiou qualifies as an Audit Committee financial expert as such term is defined under SEC rules. Mihalis Boutaris serves as a member of our Audit
Committee.
Our Compensation Committee, comprised of two independent directors, is responsible for, among other things, recommending to the board of directors our senior executive
officers’ compensation and benefits. Loïsa Ranunkel serves as the Chairman of the Compensation Committee and Mihalis Boutaris serves as a member of our Compensation Committee.
Our Executive Committee is responsible for the overall management of our business. Our Executive Committee is comprised of Aliki Paliou, our Director and Chairperson of our
Board, and Andreas Michalopoulos, our Chief Executive Officer.
We also maintain directors’ and officers’ insurance, pursuant to which we provide insurance coverage against certain liabilities to which our directors and officers may be
subject, including liability incurred under U.S. securities law.
D.
Employees
We crew our vessels with Filipino officers and crew members, who are referred to us by independent crewing agencies. The crewing agencies handle each seafarer’s training
and payroll. We ensure that all our seafarers have the qualifications and licenses required to comply with international regulations and shipping conventions. We typically crew our
vessels with more crew members than are required by the country of the vessel’s flag in order to allow for the performance of routine maintenance duties.
The following table presents the number of shoreside personnel employed by our in-house manager and the number of seafaring personnel employed by our vessel-owning
subsidiaries as of December 31, 2024, 2023, and 2022.
 
 
As of December
31, 2024
  
As of December
31, 2023
  
As of December
31, 2022
 
Shoreside
  
34   
30   
30 
Seafaring
  
177   
179   
197 
Total
  
211   
209   
227 
94

Table of Contents
E.
Share Ownership
With respect to the total amount of common shares owned by our officers and directors individually and as a group, see “Item 7. Major Shareholders and Related Party
Transactions—A. Major Shareholders.”
F.
Disclosure of a registrant’s action to recover erroneously awarded compensation
None.
Item 7.
Major Shareholders and Related Party Transactions
A.
Major Shareholders
The following table sets forth current information regarding ownership of our common shares of which we are aware as of April 14, 2025, for (i) beneficial owners of five percent
or more of our common shares; and (ii) our officers and directors, individually and as a group. All of our shareholders, including the shareholders listed in this table, are entitled to one
vote for each common share held.
Name
 
Number of
Common Shares   
Percentage
Owned (1)
 
Mango Shipping Corp. (2)(4)
  
24,312,859   
66.2%
Mitzela Corp.(3)(4)
  
1,042,272   
7.7%
Sphinx Investment Corp.(5)
  
1,033,859   
8.3%
All officers and directors as a group
  
25,363,131   
67.1%
(1) Percentages based on 12,432,158 common shares outstanding as of April 14, 2025.
(2) This information is derived from Amendment No. 1 to Schedule 13D jointly filed with the SEC on September 1, 2023 by Mango Shipping Corp. and Aliki Paliou. Aliki Paliou, the
Chairperson of our board of directors, owns and controls Mango Shipping Corp. As a result, Aliki Paliou may be deemed to beneficially own shares held by Mango Shipping. Mango
Shipping acquired 156,803 common shares (as adjusted after the effectiveness of the reverse stock splits of November 2, 2020 and of November 15, 2022) from Taracan Investments S.A.
(“Taracan”), a Marshall Islands corporation ultimately beneficially owned by Symeon Palios, our Chairman of the Board until the 2022 annual shareholders meeting and former Chief
Executive Officer, pursuant to a Contribution Agreement dated September 29, 2020, by and between Taracan and Mango Shipping. In exchange, Mango Shipping issued 999 shares of its
own common stock to Taracan. Taracan thereafter distributed as dividend in kind such 999 shares of Mango Shipping (through an intermediary holding company) to its ultimate
beneficial owner, Symeon Palios. Subsequently, also on September 29, 2020, Symeon Palios transferred in a private transaction all of his interest in Mango Shipping to Aliki Paliou. We
conducted an exchange offer, pursuant to which we offered to exchange issued and outstanding Common Shares for newly issued shares of our Series B Convertible Cumulative
Perpetual Preferred Stock, which closed on January 27, 2022. Pursuant to the Exchange Offer, Mango Shipping exchanged 156,523 Common Shares (as adjusted after the effectiveness of
the reverse stock splits of November 2, 2020 and of November 15, 2022), representing the majority of the Common Shares beneficially owned by Mango Shipping at that time, for Series B
Preferred Shares at an exchange ratio of 0.28 Series B Preferred Shares per Common Share. On October 17, 2022, we entered into a stock purchase agreement with Mango Shipping,
pursuant to which we agreed to issue to Mango Shipping in a private placement 1,314,792 shares of our newly-designated Series C Preferred Shares in exchange for, in part, all 657,396
Series B Preferred Shares held by Mango Shipping. See “Related Party Transactions” for a description of the private placement transaction with Mango Shipping. Mango Shipping
beneficially owns 1,314,792 Series C Preferred Shares, or approximately 92% of the outstanding Series C Preferred Shares as of the date of this report. The Series C Preferred Shares carry
superior voting rights. For a description of the rights of the Series C Preferred Shares, see “Description of Securities,” attached hereto as Exhibit 2.5 and incorporated by reference herein,
and the risk factor under “Item 3. Key Information—D. Risk Factors” entitled “Aliki Paliou, the Chairperson of the Board, controls a majority of voting power over matters on which our
shareholders are entitled to vote, and accordingly, may exert considerable influence over us and may have interests that are different from the interests of our other shareholders.”
95

Table of Contents
(3) This information is derived from a Schedule 13D jointly filed with the SEC on September 1, 2023 by Mitzela Corp. and Andreas Michalopoulos. Andreas Michalopoulos, our Chief
Executive Officer, Director and Secretary, owns and controls Mitzela Corp. As a result, Andreas Michalopoulos may be deemed to beneficially own shares held by Mitzela Corp. Mitzela
Corp. beneficially owns 56,342 Series C Preferred Shares, or approximately 4% of the outstanding Series C Preferred Shares as of the date of this report.
(4) Aliki Paliou may be deemed to beneficially own 24,312,579 common shares through Mango Shipping Corp. issuable upon conversion of Series C Preferred Shares. Andreas
Michalopoulos may be deemed to beneficially own 1,041,852 common shares through Mitzela Corp. issuable upon conversion of Series C Preferred Shares. Additionally, Aliki Paliou may
be deemed to beneficially own 280 restricted common shares through Mango Shipping Corp. Andreas Michalopoulos may be deemed to beneficially own 420 restricted common shares
through Mitzela Corp. Anthony Argyropoulos, our Chief Financial Officer, holds stock options to purchase up to 8,000 of our common shares, which stock options we granted to
Anthony Argyropoulos as stock-based remuneration. The stock options are exercisable at a price range between $150.00 and $450.00 per share, for a term of five years. Anthony
Argyropoulos does not directly own any of our common shares. All other officers and directors each own 0% of our outstanding common shares.
(5) This information is derived from an Amendment No. 15 to Schedule 13D jointly filed with the SEC on February 5, 2025 by Sphinx Investment Corp., Maryport Navigation Corp. and
Mr. George Economou. Sphinx Investment Corp. is a wholly-owned subsidiary of Maryport Navigation Corp., which is a Liberian company owned by Mr. George Economou.
In the normal course of business, there have been institutional investors that buy and sell our shares, and significant changes in the percentage ownership of such investors
has occurred, as reflected in beneficial ownership reports filed with the SEC.
As of April 14, 2025, we had 8 shareholders of record, 1 of which was located in the United States, 1 of which was CEDE & CO., a nominee of The Depository Trust Company,
which is located in the United States and held an aggregate of 12,430,363 of our common shares, representing 99.9% of our outstanding common shares. CEDE & CO. is the sole record
shareholder of our Class B Preferred Shares and Class C Preferred Shares. We believe that the shares held by CEDE & CO. include shares beneficially owned by both holders in the
United States and non-U.S. beneficial owners. We are not aware of any arrangements the operation of which may at a subsequent date result in our change of control.
B.
Related Party Transactions
Pure Brokerage and Shipping Corp.
Pure Brokerage and Shipping Corp., or Pure, a company controlled by Aliki Paliou, our Chairperson of the board of directors, provides us with brokerage services since June 15,
2020, pursuant to a Brokerage Services Agreement for a fixed monthly fee of $3,000 for each of our owned tanker vessels. Additionally, Pure Brokerage and Shipping Corp, an affiliated
entity, receives from us a fixed commission of 1.25% on gross freight and hire income generated by the vessels, subject to the specific terms of each employment contract, and may also
receive sale and purchase brokerage commissions of 1.0% per transaction. For 2024, commissions and brokerage fees paid to Pure Brokerage amounted to $1.1 million and $0.3 million,
respectively.
Mango Shipping Corp.
On March 2, 2022, we entered into an unsecured credit facility with Mango Shipping, an affiliated entity whose beneficial owner is Aliki Paliou, for up to $5.0 million, to be used
for general working capital purposes. The facility, which is repayable in one year from the date of the agreement, will be utilized in advances at our request and will bear interest of 9.0%
per annum and commitment fees of 3.0% per annum on any undrawn amount. Arrangement fees of $0.2 million are payable on the date of the agreement. As of the date of this annual
report, $3.2 million have been drawn under the credit facility. On October 17, 2022, we entered into a stock purchase agreement with Mango Shipping, pursuant to which we agreed to
issue to Mango in a private placement 1,314,792 shares of our newly-designated Series C Preferred Shares in exchange for (i) all 657,396 Series B Preferred Shares held by Mango and (ii)
the agreement by Mango to apply $4.93 million (an amount equal to the aggregate cash conversion price payable upon conversion of such Series B Preferred Shares into Series C
Preferred Shares pursuant to their terms) as a prepayment by us of an unsecured credit facility dated March 2, 2022 and made between us as borrower and Mango as lender, maturing in
March 2023 and bearing interest at 9.0% per annum. We subsequently repaid the remaining amounts due and terminated the credit facility. The transaction was approved by a special
independent committee of our board of directors. For more information regarding the Series C Preferred Shares, please see our Form 6-K filed on October 21, 2022 and incorporated by
reference herein.
96

Table of Contents
C.
Interests of Experts and Counsel
Not applicable.
Item 8.
Financial information
A.
Consolidated Statements and Other Financial Information
See “Item 18. Financial Statements.”
Legal Proceedings
Between October 23, 2017, and December 15, 2017, three largely similar lawsuits were filed against the Company and three of its executive officers. On October 23, 2017, a
complaint captioned Jimmie O. Robinson v. Diana Containerships Inc., Case No. 2:17-cv-6160, was filed in the United States District Court for the Eastern District of New York (“Eastern
District”). The complaint was brought as a purported class action lawsuit on behalf of a putative class consisting of purchasers of common shares of the Company between January 26,
2017 and October 3, 2017. On October 25, 2017, a complaint captioned Logan Little v. Diana Containerships Inc., Case No. 2:17-cv-6236, was filed in the Eastern District. The complaint
was brought as a purported class action lawsuit on behalf of a putative class consisting of purchasers of common shares of the Company between January 26, 2017, and October 3, 2017.
On December 15, 2017, a complaint captioned Emmanuel S. Austin v. Diana Containerships Inc., Case No. 2:17-cv-7329, was filed in the Eastern District. The complaint was brought as a
purported class action lawsuit on behalf of a putative class consisting of purchasers of common shares of the Company between June 9, 2016, and October 3, 2017. The complaints
named as defendants, among others, the Company and three of its executive officers. The complaints asserted claims under Sections 9, 10(b) and/or 20(a) of the Securities Exchange Act
of 1934. On April 30, 2018, the Court consolidated the three lawsuits into the first-filed Robinson lawsuit, appointed lead plaintiffs and approved lead plaintiffs’ selection of lead
plaintiffs’ counsel. On July 13, 2018, lead plaintiffs filed a consolidated amended complaint (superseding the three initial complaints). On September 21, 2018, the defendants filed a
motion to dismiss the lawsuit. Briefing on that motion was concluded on November 30, 2018. On May 28, 2020, prior to any ruling on that motion, lead plaintiffs filed a superseding
second amended complaint. On July 22, 2020, the defendants filed a motion to dismiss the second amended complaint. Briefing on that motion concluded on October 9, 2020. On October
1, 2021, prior to any ruling on that motion, lead plaintiffs filed a superseding third amended complaint. On October 15, 2021, the defendants filed a motion to dismiss the third amended
complaint. Briefing on that motion concluded on November 5, 2021. This lawsuit was voluntarily dismissed by the plaintiffs in November 2024.
The Company, its Chief Executive Officer, Chairperson of the Board, five former directors of the Company, and two entities affiliated with the Company’s Chief Executive Officer
and Chairperson of the Board were named as defendants in a lawsuit commenced on October 27, 2023 in New York State Supreme Court, County of New York, by a purported shareholder
of the Company, Sphinx Investment Corp., the plaintiff. The complaint alleged, among other things, violations of fiduciary duties by the named defendants in connection with an
exchange offer commenced by the Company in December 2021. In January 2024, the defendants filed motions to dismiss the lawsuit. In August 2024, the Supreme Court of the State of
New York granted the Company’s motions to dismiss the litigation filed by Sphinx on October 27, 2023, on the basis that New York lacked personal jurisdiction over the defendants.
Subsequently, in August 2024, Sphinx initiated legal proceedings in the High Court of the Republic of the Marshall Islands against the same defendants that had been named in the New
York lawsuit. The complaint filed in the High Court is substantially similar to the complaint previously filed in New York. The defendants filed motions to dismiss the complaint in the
High Court of the Republic of the Marshall Islands. The parties have completed briefing on those motions to dismiss. The Company, although it cannot predict its outcome, believes that
the lawsuit is without merit and will vigorously defend against the lawsuit.
97

Table of Contents
Except as set forth above, we have not been involved in any legal proceedings which may have, or have had a significant effect on our business, financial position, results of
operations or liquidity, nor are we aware of any proceedings that are pending or threatened which may have a significant effect on our business, financial position, results of operations
or liquidity. From time to time, we may be subject to legal proceedings and claims in the ordinary course of business, principally personal injury and property casualty claims. We expect
that these claims would be covered by insurance, subject to customary deductibles and limitations. Those claims, even if lacking merit, could result in the expenditure of significant
financial and managerial resources.
Dividend Policy
Our board of directors has adopted a variable quarterly dividend policy, pursuant to which we may declare and pay a variable quarterly cash dividend to our common
shareholders. While we have declared and paid cash dividends on our common shares in the past, there can be no assurance that our board of directors will declare dividend payments
on common shares in the future. If declared, the quarterly dividend is expected to be paid each February, May, August and November and will be subject to reserves for the replacement
of our vessels, scheduled dry-dockings, intermediate and special surveys, dividends to holders of our preferred shares, if paid in cash, and other purposes as our board of directors may
from time to time determine are required, after taking into account contingent liabilities, the terms of any credit facility, our growth strategy and other cash needs as well as the
requirements of Marshall Islands law. In addition, any credit facilities that we may enter into in the future may include restrictions on our ability to pay dividends.
The declaration and payment of dividends, even during times when we have sufficient funds and are not restricted from declaring and paying dividends by our lenders or any
other party, will always be subject to the discretion of our board of directors. Our board of directors may review and amend our dividend policy from time to time, taking into
consideration our plans for future growth and other factors. The actual timing and amount of dividend payments on common shares, if any, will be determined by our board of directors
and will be affected by various factors, including our cash earnings, financial condition and cash requirements, dividend obligations to holders of our preferred shares, the loss of a
vessel, the acquisition of one or more vessels, required capital expenditures, reserves established by our board of directors, increased or unanticipated expenses, a change in our
dividend policy, additional borrowings or future issuances of securities, many of which will be beyond our control.
We are a holding company, and we depend on the ability of our subsidiaries to distribute funds to us to satisfy our financial obligations and to make dividend payments. In
times when we have debt outstanding, we intend to limit our dividends per common share, if common share dividend payments are reinstated, to the amount that we would have been
able to pay if we were financed entirely with equity. In addition, our existing or future credit facilities may include restrictions on our ability to pay dividends.
The shipping sector is highly cyclical and volatile. We cannot predict with accuracy the amount of cash flows our operations will generate in any given period. Our quarterly
dividends, if any, will vary significantly from quarter to quarter as a result of variations in our operating performance, cash flow, and other contingencies, and we cannot assure you that
we will generate available cash for distribution in any quarter, and so we may not declare and pay any dividends in certain quarters, or at all. Our ability to resume payment of dividends
will be subject to the limitations set forth above and in the section of this annual report entitled “Item 3. Key Information—D. Risk Factors.”
B.
Significant Changes
There have been no significant changes since the date of the annual consolidated financial statements included in this annual report, other than those described in “Note 14-
Subsequent Events” of our annual consolidated financial statements.
Item 9.
The Offer and Listing
A.
Offer and Listing Details
Our common shares have traded on the Nasdaq Global Market since January 19, 2011, on the Nasdaq Global Select Market since January 2, 2013, and on the Nasdaq Capital
Market since March 6, 2020. Our ticker symbol was “DCIX” through March 30, 2020, at which date it changed to “PSHG.”
98

Table of Contents
B.
Plan of Distribution
Not Applicable.
C.
Markets
Our common shares have traded on the Nasdaq Global Market since January 19, 2011, on the Nasdaq Global Select Market since January 2, 2013, and on the Nasdaq Capital
Market since March 6, 2020. Our ticker symbol was “DCIX” through March 30, 2020, at which date it changed to “PSHG.”
D.
Selling Shareholders
Not Applicable.
E.
Dilution
Not Applicable.
F.
Expenses of the Issue
Not Applicable.
Item 10.
Additional Information
A.
Share capital
Not Applicable.
B.
Memorandum and Articles of Association
Our amended and restated articles of incorporation and bylaws were filed as exhibits 3.1 and 3.2, respectively, to our registration statement on Form F-4 (File No. 333-169974)
filed with the SEC on October 15, 2010. The information contained in these exhibits is incorporated by reference herein.
Our amended and restated articles of incorporation were amended on (i) June 8, 2016, in connection with our one-for-eight reverse stock split, (ii) July 3, 2017, in connection with
our one-for-seven reverse stock split, (iii) July 25, 2017, in connection with our one-for-six reverse stock split, (iv) August 23, 2017, in connection with our one-for-seven reverse stock
split, (v) September 22, 2017, in connection with our one-for-three reverse stock split, (vi) November 1, 2017, in connection with our one-for-seven reverse stock split and (vii) October 30,
2020, in connection with our one-for-ten reverse stock split, (viii) November 1, 2017, in connection with our one-for-seven reverse stock split and (ix) November 14, 2022, in connection
with our one-for-fifteen reverse stock split. Copies of these articles of amendment to the amended and restated articles of incorporation of the Company were filed as exhibit 3.1 to our
reports on Form 6-K filed with the SEC on June 9, 2016, July 6, 2017, July 28, 2017, August 28, 2017, September 26, 2017, November 3, 2017, November 2, 2020 and hereto for our November
14, 2022 stock split respectively. The information contained in these exhibits is incorporated by reference herein. Additionally, (i) on March 21, 2017, we filed a Statement of Designations,
Preferences and Rights of our Series B-1 Convertible Preferred Stock, (ii) on March 21, 2017, we filed a Statement of Designations, Preferences and Rights of our Series B-2 Convertible
Preferred Stock, (iii) on May 30, 2017, we filed a Statement of Designations of Rights, Preferences and Privileges of our Series C Preferred Stock, (iv) on January 12, 2022, we filed an
Amended and Restated Certificate of Designations of Rights, Preferences and Privileges of our Series B Convertible Cumulative Perpetual Preferred Stock and (v) on October, 17, 2022,
we filed a Certificate of Designation of Series C Convertible Cumulative Redeemable Perpetual Preferred Shares. Our amended and restated articles of incorporation were further amended
on February 25, 2019, in connection with our name change from Diana Containerships Inc. to Performance Shipping Inc. A copy of these articles of amendment to the amended and
restated articles of incorporation is filed as an exhibit to this annual report and the information contained in such exhibit is incorporated by reference herein.
99

Table of Contents
A description of the material terms of our amended and restated articles of incorporation and bylaws is included in “Description of Securities,” attached hereto as Exhibit 2.5 and
incorporated by reference herein.
Description of Common Shares
Each outstanding common share entitles the holder to one vote on all matters submitted to a vote of shareholders. Subject to preferences that may be applicable to any
outstanding preferred shares, holders of common shares are entitled to receive ratably all dividends, if any, declared by our board of directors out of funds legally available for dividends.
Upon our dissolution or liquidation or the sale of all or substantially all of our assets, after payment in full of all amounts required to be paid to creditors and to the holders of our
preferred shares having liquidation preferences, if any, the holders of our common shares will be entitled to receive pro rata our remaining assets available for distribution. Holders of our
common shares do not have conversion, redemption or preemptive rights to subscribe to any of our securities. The rights, preferences and privileges of holders of common shares are
subject to the rights of the holders of our preferred shares, including our existing classes of preferred shares and any preferred shares we may issue in the future.
Description of Preferred Stock
Our amended and restated articles of incorporation authorize our board of directors to establish one or more series of preferred shares and to determine, with respect to any
series of preferred shares, the terms and rights of that series, including the designation of the series; the number of shares of the series; the preferences and relative, participating, option
or other special rights, if any, and any qualifications, limitations or restrictions of such series; and the voting rights, if any, of the holders of the series.
Stockholders’ Rights Agreement
On December 20, 2021, we entered into a Stockholders’ Rights Agreement, or the Rights Agreement, with Computershare Inc. as Rights Agent. Pursuant to the Rights
Agreement, each common share includes one right, or a Right, that entitles the holder to purchase from us one one-thousandth of a share of our Series A Participating Preferred Stock at
an exercise price of $750.00 per one one-thousandth of a Series A Preferred Stock, subject to specified adjustments. The Rights will separate from the common shares and become
exercisable only if a person or group acquires beneficial ownership of 10% or more of our common shares in a transaction not approved by our board of directors. In that situation, each
holder of a Right (other than the acquiring person, whose Rights will become void and will not be exercisable) will have the right to purchase, in lieu of one one-thousandth of a share of
Series A Preferred Stock, upon payment of the exercise price, a number of our common shares having a then-current market value equal to twice the exercise price. In addition, if we are
acquired in a merger or other business combination after an acquiring person acquires 10% or more of our common shares, each holder of the Right will thereafter have the right to
purchase, in lieu of one one-thousandth of a share of Series A Preferred Stock, upon payment of the exercise price, a number of common shares of the acquiring person having a then-
current market value equal to twice the exercise price. The acquiring person will not be entitled to exercise these Rights. Under the Rights Agreement’s terms, it will expire on December
20, 2031.
A copy of the Rights Agreement is filed as Exhibit 4.1 to our report on Form 6-K filed with the SEC on December 21, 2021.
C.
Material Contracts
The contracts included as exhibits to this annual report are the contracts we consider to be both material and not entered into in the ordinary course of business, which (i) are to
be performed in whole or in part on or after the filing date of this annual report or (ii) were entered into not more than two years before the filing date of this annual report. Other than
these agreements, we have no material contracts, other than contracts entered into in the ordinary course of business, to which we or any member of the group is a party. We refer you to
“Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources” for a discussion of our loan facilities and sale and leaseback agreements, “Item 4.
Information on the Company—B. Business Overview” and “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions” for a discussion of our
agreements with our related parties and “Item 6. Directors, Senior Management, and Employees—B. Compensation” for a discussion of our 2015 Equity Incentive Plan.
100

Table of Contents
D.
Exchange Controls
Under Republic of the Marshall Islands law, there are currently no restrictions on the export or import of capital, including foreign exchange controls or restrictions that affect
the remittance of dividends, interest or other payments to non-resident holders of our securities.
E.
Taxation
The following represents the opinion of our United States and Marshall Islands tax counsel, Watson Farley & Williams LLP, and is a summary of the material Marshall Islands
and U.S. federal income tax considerations of the ownership and disposition by a U.S. Holder and a Non-U.S. Holder, each as defined below, of our common shares. This discussion does
not purport to deal with the tax consequences of owning common shares to all categories of investors, who may be subject to special rules such as dealers in securities or commodities,
financial institutions, insurance companies, tax-exempt organizations, U.S. expatriates, persons liable for the alternative minimum tax, persons who hold common shares as part of a
straddle, hedge, conversion transaction or integrated investment, U.S. Holders whose functional currency is not the United States dollar, 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 subject to the “base erosion and anti-avoidance” tax and
investors that own, actually or under applicable constructive ownership rules, 10% or more of the vote or value of the Company’s equity. This discussion deals only with holders who
hold the common shares as a capital asset. You are encouraged to consult your own tax advisors concerning the overall tax consequences arising in your own particular situation under
U.S. federal, state, local or foreign law of the ownership of our common shares.
Marshall Islands Tax Considerations
In the opinion of Watson Farley & Williams LLP, the following are the material Marshall Islands tax consequences of the Company’s activities to the Company and of the
ownership of the Company’s common shares to its shareholders who are not residents of or domiciled or carrying on any commercial activity in the Marshall Islands. Under current
Marshall Islands law, the Company is not subject to tax on income or capital gains, no Marshall Islands withholding tax will be imposed upon payments of dividends by the Company to
its shareholders, and shareholders will not be subject to tax on the sale or other disposition of the Company’s common shares.
United States Federal Income Tax Considerations
The following discussion of U.S. federal income tax matters is based on the U.S. Internal Revenue Code of 1986, as amended, or the Code, judicial decisions, administrative
pronouncements, and existing and proposed regulations issued by the U.S. Department of the Treasury, all of which are subject to change, possibly with retroactive effect.
Taxation of Operating Income: In General
The following discussion addresses the U.S. federal income taxation of our operating income from the international operation of vessels.
Unless exempt from U.S. federal income taxation under the rules discussed below, a foreign corporation is subject to U.S. federal income taxation in respect of any income that is
derived from the use of vessels, from the hiring or leasing of vessels for use on a time, voyage or bareboat charter basis, from the participation in a pool, partnership, strategic alliance,
joint operating agreement, code sharing arrangements or other joint venture it directly or indirectly owns or participates in that generates such income, or from the performance of
services directly related to those uses, which we refer to as “shipping income,” to the extent that the shipping income is derived from sources within the United States. For these
purposes, 50% of shipping income that is attributable to transportation that begins or ends, but that does not both begin and end, in the United States constitutes income from sources
within the United States, which we refer to as “U.S.-source shipping income.”
101

Table of Contents
Shipping income attributable to transportation that both begins and ends in the United States is considered to be 100% from sources within the United States. We are not
permitted by law to engage in transportation that produces income which is considered to be 100% from sources within the United States. Shipping income attributable to transportation
exclusively between non-U.S. ports will be considered to be 100% derived from sources outside the United States. Shipping income derived from sources outside the United States will
not be subject to any U.S. federal income tax.
Exemption of Operating Income from U.S. Federal Income Taxation
Under Section 883 of the Code, or Section 883, we will be exempt from U.S. federal income taxation on our U.S.-source shipping income if:
•
we are organized in a foreign country that grants an “equivalent exemption” to corporations organized in the United States, or U.S. corporations; and
either:
•
more than 50% of the value of our common shares is owned, directly or indirectly, by qualified shareholders, which we refer to as the “50% Ownership Test,” or
•
our common shares are “primarily and regularly traded on an established securities market” in a country that grants an “equivalent exemption” to U.S. corporations or in the
United States, which we refer to as the “Publicly-Traded Test.”
The Marshall Islands, the jurisdiction where we are incorporated, grants an “equivalent exemption” to U.S. corporations. We anticipate that any of our shipowning subsidiaries
will be incorporated in a jurisdiction that provides an “equivalent exemption” to U.S. corporations. Therefore, we will be exempt from U.S. federal income taxation with respect to our U.S.-
source shipping income if either the 50% Ownership Test or the Publicly-Traded Test is met.
Publicly-Traded Test
In order to satisfy the Publicly-Traded Test, our common shares must be primarily and regularly traded on one or more established securities markets. The regulations under
Section 883 provide, in pertinent part, that shares of a foreign corporation will be considered to be “primarily traded” on an established securities market in a country if the number of
shares of each class of stock that are traded during any taxable year on all established securities markets in that country exceeds the number of shares in each such class that are traded
during that year on established securities markets in any other single country. Our common shares are “primarily traded” on the Nasdaq Capital Market, which is an established
securities market.
Under the regulations, stock of a foreign corporation will be considered to be “regularly traded” on an established securities market if one or more classes of stock representing
more than 50% of the outstanding stock, by both total combined voting power of all classes of stock entitled to vote and total value, are listed on such market, to which we refer as the
“listing threshold.”
It is further required that with respect to each class of stock relied upon to meet the listing threshold, (i) such class of stock is traded on the market, other than in minimal
quantities, on at least 60 days during the taxable year or one-sixth of the days in a short taxable year, which we refer to as the trading frequency test; and (ii) the aggregate number of
shares of such class of stock traded on such market during the taxable year is at least 10% of the average number of shares of such class of stock outstanding during such year or as
appropriately adjusted in the case of a short taxable year, which we refer to as the trading volume test. Even if these tests are not satisfied, the regulations provide that such trading
frequency and trading volume tests will be deemed satisfied if, as is expected to be the case with our common shares, such class of stock is traded on an established securities market in
the United States and such shares are regularly quoted by dealers making a market in such shares.
102

Table of Contents
Notwithstanding the foregoing, the regulations provide, in pertinent part, that a class of stock will not be considered to be “regularly traded” on an established securities market
for any taxable year in which 50% or more of the vote and value of the outstanding shares of such class are owned, actually or constructively under specified share attribution rules, on
more than half the days during the taxable year by persons who each own 5% or more of the vote and value of such class of stock, to which we refer as the “Five Percent Override Rule.”
For purposes of being able to determine the persons who actually or constructively own 5% or more of the vote and value of our common shares, or “5% Shareholders,” the
regulations permit us to rely on those persons that are identified on Schedule 13G and Schedule 13D filings with the SEC, as owning 5% or more of our common shares. The regulations
further provide that an investment company which is registered under the Investment Company Act of 1940, as amended, will not be treated as a 5% Shareholder for such purposes.
In the event the Five Percent Override Rule is triggered, the regulations provide that the Five Percent Override Rule will nevertheless not apply if we can establish that within
the group of 5% Shareholders, there are sufficient qualified shareholders for purposes of Section 883 to preclude non-qualified shareholders in such group from owning 50% or more of
our common shares for more than half the number of days during the taxable year.
We believe that we did not satisfy the Publicly-Traded Test during our 2024 taxable year.
50% Ownership Test
Under the regulations, a foreign corporation will satisfy the 50% Ownership Test for a taxable year if (i) for at least half of the number of days in the taxable year, more than 50%
of the value of its stock is owned, directly or constructively through the application of certain attribution rules prescribed by the regulations, by one or more shareholders who are
residents of foreign countries that grant “equivalent exemption” to corporations organized in the United States and (ii) the foreign corporation satisfies certain substantiation and
reporting requirements with respect to such shareholders.
We believe that we satisfied the 50% Ownership Test for our 2024 taxable year, and expect to satisfy the substantiation and reporting requirements to claim the benefits of the
50% Ownership Test. Therefore, we intend to take the position that we were exempt from U.S. federal income tax under Section 883 of the Code during our 2024 taxable year. However,
there can be no assurance that we will continue to satisfy the requirements of the 50% Ownership Test in future taxable years. Furthermore, the substantiation requirements are onerous
and therefore there can be no assurance that we would be able to satisfy them, even if our share ownership would otherwise satisfy the requirements of the 50% Ownership Test.
Taxation in Absence of Exemption
To the extent the benefits of Section 883 are unavailable, our U.S.-source shipping income, to the extent not considered to be “effectively connected” with the conduct of a U.S.
trade or business, as described below, would be subject to a 4% tax imposed by Section 887 of the Code on a gross basis, without the benefit of deductions, which we refer to as the 4%
gross basis tax regime. Since under the sourcing rules described above, no more than 50% of our shipping income would be treated as being derived from U.S. sources, the maximum
effective rate of U.S. federal income tax on our shipping income would never exceed 2% under the 4% gross basis tax regime.
To the extent our U.S.-source shipping income is considered to be “effectively connected” with the conduct of a U.S. trade or business, as described below, any such
“effectively connected” U.S.-source shipping income, net of applicable deductions, would be subject to the U.S. federal corporate income tax currently imposed at a rate of 21%. In
addition, we may be subject to an additional 30% “branch profits” tax on earnings effectively connected with the conduct of such trade or business, as determined after allowance for
certain adjustments, and on certain interest paid or deemed paid attributable to the conduct of such U.S. trade or business.
Our U.S.-source shipping income would be considered “effectively connected” with the conduct of a U.S. trade or business only if:
•
we have, or are considered to have, a fixed place of business in the United States involved in the earning of shipping income; and
103

Table of Contents
•
substantially all of our U.S.-source shipping income is attributable to regularly scheduled transportation, such as the operation of a vessel that follows a published schedule
with repeated sailings at regular intervals between the same points for voyages that begin or end in the United States (or, in the case of income from the bareboat chartering
of a vessel, is attributable to a fixed place of business in the United States).
We do not anticipate that we will have any vessel operating to or from the United States on a regularly scheduled basis. Based on the foregoing and on the expected mode of
our shipping operations and other activities, we do not anticipate that any of our U.S.-source shipping income will be “effectively connected” with the conduct of a U.S. trade or
business.
United States Federal Income Taxation of Gain on Sale of Vessels
Regardless of whether we qualify for exemption under Section 883 of the Code, we will not be subject to U.S. federal income taxation with respect to gain realized on a sale of a
vessel, provided the sale is considered to occur outside of the United States under U.S. federal income tax principles. In general, a sale of a vessel will be considered to occur outside of
the United States for this purpose if title to the vessel, and risk of loss with respect to the vessel, pass to the buyer outside of the United States. It is expected that any sale of a vessel
by us will be considered to occur outside of the United States.
United States Federal Income Taxation of U.S. Holders
In the opinion of Watson Farley & Williams LLP, the Company’s U.S. counsel, the following are the material U.S. federal income tax consequences to U.S. Holders, as defined
below, of the ownership and disposition of our common shares.
As used herein, the term “U.S. Holder” means a beneficial owner of common shares that is an individual U.S. citizen or resident, a U.S. corporation or other U.S. entity taxable as
a corporation, an estate the income of which is subject to U.S. federal income taxation regardless of its source, or a trust if a court within the United States is able to exercise primary
jurisdiction over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust.
If a partnership holds the common shares, the tax treatment of a partner will generally depend upon the status of the partner and upon the activities of the partnership. If you are
a partner in a partnership holding the common shares, you are encouraged to consult your tax advisor.
Distributions
Subject to the discussion of the passive foreign investment company, or PFIC, rules below, distributions made by us with respect to our common shares, other than certain pro-
rata distributions of our common shares, to a U.S. Holder will generally constitute dividends, which may be taxable as ordinary income or “qualified dividend income” as described in
more detail below, to the extent of our current and accumulated earnings and profits, as determined under U.S. federal income tax principles. Distributions in excess of our current and
accumulated earnings and profits will be treated first as a nontaxable return of capital to the extent of the U.S. Holder’s tax basis in such U.S. Holder’s common shares on a dollar-for-
dollar basis and thereafter as a capital gain. Because we are not a United States corporation, U.S. Holders that are corporations will not be entitled to claim a dividends-received
deduction with respect to any distributions they receive from us. Dividends paid with respect to our common shares will generally be treated as income from sources outside the United
States and will generally constitute “passive category income” or, in the case of certain types of U.S. Holders, “general category income” for purposes of computing allowable foreign tax
credits for U.S. foreign tax credit purposes.
104

Table of Contents
Dividends paid on our common shares to a U.S. Holder who is an individual, trust or estate, which we refer to as a U.S. Individual Holder, will generally be treated as “qualified
dividend income” that is taxable to such U.S. Individual Holders at preferential tax rates, provided that (1) the common shares are readily tradable on an established securities market in
the United States such as the Nasdaq Capital Market, on which our common shares are traded; (2) we are not a PFIC for the taxable year during which the dividend is paid or the
immediately preceding taxable year, as discussed below; (3) the U.S. Individual Holder has held the common shares for more than 60 days in the 121-day period beginning 60 days before
the date on which the common shares become ex-dividend; and (4) the U.S. Individual Holder is not under an obligation to make related payments with respect to positions in
substantially similar or related property.
There is no assurance that any dividends paid on our common shares will be eligible for these preferential rates in the hands of a U.S. Individual Holder. Any distributions out
of earnings and profits we pay which are not eligible for these preferential rates will be taxed as ordinary income to a U.S. Individual Holder.
Special rules may apply to any “extraordinary dividend,” generally, a dividend paid by us in an amount which is equal to or in excess of ten percent of a U.S. Holder’s adjusted
tax basis, or fair market value in certain circumstances, in a common share. If we pay an “extraordinary dividend” on our common shares that is treated as “qualified dividend income,”
then any loss derived by a U.S. Individual Holder from the sale or exchange of such common shares will be treated as long-term capital loss to the extent of such dividend.
Sale, Exchange or other Disposition of Common Shares
Subject to the discussion of the PFIC rules below, a U.S. Holder generally will recognize taxable gain or loss upon a sale, exchange or other disposition of our common shares in
an amount equal to the difference between the amount realized by the U.S. Holder from such sale, exchange or other disposition and the U.S. Holder’s tax basis in such stock. A U.S.
Holder’s tax basis in the common shares generally will equal the U.S. Holder’s acquisition cost less any prior return of capital. Such gain or loss will be treated as long-term capital gain
or loss if the U.S. Holder’s holding period is greater than one year at the time of the sale, exchange or other disposition and will generally be treated as U.S.-source income or loss, as
applicable, for U.S. foreign tax credit purposes. A U.S. Holder’s ability to deduct capital losses is subject to certain limitations.
PFIC Status and Significant Tax Consequences
Special U.S. federal income tax rules apply to a U.S. Holder that holds stock in a foreign corporation classified as a PFIC for U.S. federal income tax purposes. In general, we will
be treated as a PFIC with respect to a U.S. Holder if, for any taxable year in which such U.S. Holder held our common shares, either:
•
at least 75% of our gross income for such taxable year consists of passive income (e.g., dividends, interest, capital gains and rents derived other than in the active conduct of
a rental business), which we refer to as the income test; or
•
at least 50% of the average value of our assets during such taxable year produce, or are held for the production of, passive income, which we refer to as the asset test.
For purposes of determining whether we are a PFIC, cash will be treated as an asset which is held for the production of passive income. In addition, we will be treated as earning
and owning our proportionate share of the income and assets, respectively, of any of our subsidiary companies in which we own at least 25% of the value of the subsidiary’s stock or
other equity interest. Income earned, or deemed earned, by us in connection with the performance of services would not constitute passive income. By contrast, rental income would
generally constitute “passive income” unless we were treated under specific rules as deriving our rental income in the active conduct of a trade or business.
Our status as a PFIC will depend upon the operations of our vessels. Therefore, we can give no assurances as to whether we will be a PFIC with respect to any taxable year. In
making the determination as to whether we are a PFIC, we intend to treat the gross income we derive or are deemed to derive from the time chartering and voyage chartering activities of
us or any of our wholly owned subsidiaries as services income, rather than rental income. There is substantial legal authority supporting this position consisting of case law and IRS
pronouncements concerning the characterization of income derived from time charters and voyage charters as services income for other tax purposes. However, there is also authority
which characterizes time charter income as rental income rather than services income for other tax purposes. In the absence of any legal authority specifically relating to the statutory
provisions governing PFICs, the IRS or a court could disagree with our position. On the other hand, any income we derive from bareboat chartering activities will be treated as passive
income for purposes of the income test. Likewise, any assets utilized in bareboat chartering activities will be treated as generating passive income for purposes of the asset test.
105

Table of Contents
On the basis of the foregoing, we do not believe that we were a PFIC in 2024, and do not anticipate becoming a PFIC in the near future.
As discussed more fully below, if we were to be treated as a PFIC for any taxable year, a U.S. Holder would be subject to different taxation rules depending on whether the U.S.
Holder makes an election to treat us as a “Qualified Electing Fund,” which election we refer to as a “QEF election,” or a “mark-to-market” election with respect to our common shares. In
addition, if we are a PFIC, a U.S. Holder will be required to file IRS Form 8621 with the IRS.
Taxation of U.S. Holders Making a Timely QEF Election.
If a U.S. Holder makes a timely QEF election, which U.S. Holder we refer to as an “Electing Holder,” the Electing Holder must report each year for U.S. federal income tax
purposes such holder’s pro-rata share of our ordinary earnings and our net capital gain, if any, for our taxable year that ends with or within the taxable year of the Electing Holder,
regardless of whether or not distributions were received from us by the Electing Holder. The Electing Holder’s adjusted tax basis in the common shares will be increased to reflect taxed
but undistributed earnings and profits. Distributions of earnings and profits that had been previously taxed will result in a corresponding reduction in the adjusted tax basis in the
common shares and will not be taxed again once distributed. An Electing Holder would generally recognize capital gain or loss on the sale, exchange or other disposition of our common
shares. A U.S. Holder would make a QEF election with respect to any year that we are a PFIC by filing IRS Form 8621 with such holder’s U.S. federal income tax return. After the end of
each taxable year, we will determine whether we were a PFIC for such taxable year. If we determine or otherwise become aware that we are a PFIC for any taxable year, we expect to provide
each U.S. Holder with all necessary information, including a PFIC Annual Information Statement, in order to allow such holder to make a QEF election for such taxable year.
Taxation of U.S. Holders Making a “Mark-to-Market” Election.
Alternatively, if we were to be treated as a PFIC for any taxable year and, as we anticipate will continue to be the case, our shares are treated as “marketable stock,” a U.S. Holder
would be allowed to make a “mark-to-market” election with respect to our common shares, provided the U.S. Holder completes and files IRS Form 8621 in accordance with the relevant
instructions and related Treasury regulations. If that election is made, the U.S. Holder generally would include as ordinary income in each taxable year the excess, if any, of the fair market
value of the common shares at the end of the taxable year over such holder’s adjusted tax basis in the common shares. The U.S. Holder would also be permitted an ordinary loss in
respect of the excess, if any, of the U.S. Holder’s adjusted tax basis in the common shares over their fair market value at the end of the taxable year, but only to the extent of the net
amount previously included in income as a result of the mark-to-market election. A U.S. Holder’s tax basis in such holder’s common shares would be adjusted to reflect any such income
or loss amount. Gain realized on the sale, exchange or other disposition of our common shares would be treated as ordinary income, and any loss realized on the sale, exchange or other
disposition of the common shares would be treated as ordinary loss to the extent that such loss does not exceed the net mark-to-market gains previously included by the U.S. Holder.
Taxation of U.S. Holders Not Making a Timely QEF or Mark-to-Market Election.
Finally, if we were to be treated as a PFIC for any taxable year, a U.S. Holder who has not timely made a QEF or mark-to-market election for the first taxable year in which such
holder holds our common shares and during which we are treated as PFIC, whom we refer to as a “Non-Electing Holder,” would be subject to special rules with respect to (1) any excess
distribution (i.e., the portion of any distributions received by the Non-Electing Holder on our common shares in a taxable year in excess of 125% of the average annual distributions
received by the Non-Electing Holder in the three preceding taxable years, or, if shorter, the Non-Electing Holder’s holding period for the common shares), and (2) any gain realized on the
sale, exchange or other disposition of our common shares. Under these special rules:
106

Table of Contents
•
the excess distribution or gain would be allocated ratably to each day over the Non-Electing Holder’s aggregate holding period for the common shares;
•
the amount allocated to the current taxable year and any taxable year before we became a PFIC 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 tax deferral benefit would be imposed with respect to the resulting tax attributable to each such other taxable year.
These adverse tax consequences would not apply to a pension or profit-sharing trust or other tax-exempt organization that did not borrow funds or otherwise utilize leverage in
connection with its acquisition of our common shares. In addition, if a Non-Electing Holder who is an individual dies while owning our common shares, such holder’s successor
generally would not receive a step-up in tax basis with respect to such common shares.
Net Investment Income Tax
A U.S. Holder that is an individual or estate, or a trust that does not fall into a special class of trusts that is exempt from such tax, is subject to a 3.8% tax on the lesser of (1) such
U.S. Holder’s “net investment income” (or undistributed “net investment income” in the case of estates and trusts) for the relevant taxable year and (2) the excess of such U.S. Holder’s
modified adjusted gross income for the taxable year over a certain threshold (which in the case of individuals will be between $125,000 and $250,000, depending on the individual’s
circumstances). A U.S. Holder’s net investment income will generally include its gross dividend income and its net gains from the disposition of our common shares, unless such
dividends or net gains are derived in the ordinary course of the conduct of a trade or business (other than a trade or business that consists of certain passive or trading activities). Net
investment income generally will not include a U.S. Holder’s pro rata share of our income and gain if we are a PFIC and that U.S. Holder makes a QEF election, as described above in
“Taxation of U.S. Holders Making a Timely QEF Election.” However, a U.S. Holder may elect to treat inclusions of income and gain from a QEF election as net investment income. Failure
to make this election could result in a mismatch between a U.S. Holder’s ordinary income and net investment income. If you are a U.S. Holder that is an individual, estate or trust, you are
urged to consult your tax advisor regarding the applicability of the net investment income tax to your income and gains in respect of your investment in our common shares.
U.S. Federal Income Taxation of Non-U.S. Holders
A beneficial owner of our common shares, other than a partnership or entity treated as a partnership for U.S. federal income tax purposes, that is not a U.S. Holder is referred to
herein as a Non-U.S. Holder.
Non-U.S. Holders generally will not be subject to U.S. federal income tax or withholding tax on dividends received from us with respect to our common shares, unless that
income is effectively connected with the Non-U.S. Holder’s conduct of a trade or business in the United States. In general, if the Non-U.S. Holder is entitled to the benefits of certain U.S.
income tax treaties with respect to those dividends, that income is taxable only if it is attributable to a permanent establishment maintained by the Non-U.S. Holder in the United States.
Non-U.S. Holders generally will not be subject to U.S. federal income tax or withholding tax on any gain realized upon the sale, exchange or other disposition of our common
shares, unless:
•
the gain is effectively connected with the Non-U.S. Holder’s conduct of a trade or business in the United States. In general, if the Non-U.S. Holder is entitled to the benefits
of certain income tax treaties with respect to that gain, that gain is taxable only if it is attributable to a permanent establishment maintained by the Non-U.S. Holder in the
United States; or
•
the Non-U.S. Holder is an individual who is present in the United States for 183 days or more during the taxable year of disposition and other conditions are met.
107

Table of Contents
If the Non-U.S. Holder is engaged in a U.S. trade or business for U.S. federal income tax purposes, the income from the common shares, including dividends and the gain from
the sale, exchange or other disposition of the stock, that is effectively connected with the conduct of that trade or business will generally be subject to regular U.S. federal income tax in
the same manner as discussed in the previous section relating to the taxation of U.S. Holders. In addition, a corporate Non-U.S. Holder’s earnings and profits that are attributable to the
effectively connected income, subject to certain adjustments, may be subject to an additional branch profits tax at a rate of 30%, or at a lower rate as may be specified by an applicable
U.S. income tax treaty.
Backup Withholding and Information Reporting
In general, dividend payments, or other taxable distributions, made within the United States to you will be subject to information reporting requirements. Such payments will
also be subject to backup withholding tax if you are a non-corporate U.S. Holder and you:
•
fail to provide an accurate taxpayer identification number;
•
are notified by the IRS that you have failed to report all interest or dividends required to be shown on your U.S. federal income tax returns; or
•
in certain circumstances, fail to comply with applicable certification requirements.
Non-U.S. Holders may be required to establish their exemption from information reporting and backup withholding by certifying their status on an applicable IRS Form W-8.
If you sell your common shares through a U.S. office of a broker, the payment of the proceeds is subject to both U.S. backup withholding and information reporting unless you
certify that you are a non-U.S. person, under penalties of perjury, or you otherwise establish an exemption. If you sell your common shares through a non-U.S. office of a non-U.S. broker
and the sales proceeds are paid to you outside the United States, then information reporting and backup withholding generally will not apply to that payment. However, U.S. information
reporting requirements, but not backup withholding, will apply to a payment of sales proceeds, even if that payment is made to you outside the United States, if you sell your common
shares through a non-U.S. office of a broker that is a U.S. person or has certain other contacts with the United States, unless you certify that you are a non-U.S. person, under penalty of
perjury, or you otherwise establish an exemption.
Backup withholding is not an additional tax. Rather, you generally may obtain a refund of any amounts withheld under the backup withholding rules that exceed your U.S.
federal income tax liability by timely filing a refund claim with the IRS.
U.S. Holders who are individuals (and to the extent specified in applicable Treasury Regulations, certain U.S. entities) who hold “specified foreign financial assets” (as defined
in Section 6038D of the Code) are required to file IRS Form 8938 with information relating to the asset for each taxable year in which the aggregate value of all such assets exceeds $75,000
at any time during the taxable year or $50,000 on the last day of the taxable year (or such higher dollar amount as prescribed by applicable Treasury Regulations). Specified foreign
financial assets would include, among other assets, our common shares, unless the common shares are held through an account maintained with a U.S. financial institution. Substantial
penalties apply to any failure to timely file IRS Form 8938, unless the failure is shown to be due to reasonable cause and not due to willful neglect. Additionally, in the event a U.S. Holder
who is an individual (and to the extent specified in applicable Treasury regulations, a U.S. entity) that is required to file IRS Form 8938 does not file such form, the statute of limitations on
the assessment and collection of U.S. federal income taxes of such holder for the related tax year may not close until three years after the date that the required information is filed.
F.
Dividends and paying agents
Not Applicable.
G.
Statement by experts
Not Applicable.
108

Table of Contents
H.
Documents on display
We file reports and other information with the SEC. These materials, including this annual report and the accompanying exhibits, are available on the SEC’s website at
http://www.sec.gov as well as on our at website http://www.pshipping.com/. The information contained on, or that can be accessed through, these websites is not incorporated by
reference herein and does not form part of this annual report.
I.
Subsidiary information
Not Applicable.
J.
Annual Report to Security Holders
We are currently not required to provide an annual report to security holders in response to the requirements of Form 6-K.
Item 11.
Quantitative and Qualitative Disclosures about Market Risk
Interest Rates
We are exposed to market risks associated with changes in interest rates relating to our loan facilities, according to which we pay interest SOFR plus a margin; and as such,
increases in interest rates could affect our results of operations. An average increase of 1% in 2024 interest rates would have resulted in interest expenses of $0.6 million. As of December
31, 2024, we had $47.7 million of debt outstanding. In the future, we expect to manage any exposure in interest rates through our regular operating and financing activities and, when
deemed appropriate, through the use of derivative financial instruments. Global financial markets and economic conditions have been, and continue to be, volatile. Specifically, due to the
global epidemic and pandemic outbreak and the war in Ukraine and resulting sanctions which have disrupted supply chains and caused instability in the energy markets and the global
economy, credit markets and the debt and equity capital markets have been distressed, and the uncertainty surrounding the future of the global credit markets has resulted in reduced
access to credit worldwide, particularly for the shipping industry. These issues, along with significant write-offs in the financial services sector, the repricing of credit risk and the current
weak economic conditions, have made, and will likely continue to make, it difficult to obtain additional financing.
As of December 31, 2024, and 2023 we did not and have not designated any financial instruments as accounting hedging instruments.
Currency and Exchange Rates
We generate all of our revenues in U.S. dollars, but currently incur approximately half of our general and administrative expenses (around 60% in 2024 and 46% in 2023) and
have historically incurred a significant portion of our operating expenses (around 14% in 2024 and 15% in 2023) in currencies other than the U.S. dollar, primarily the Euro. For accounting
purposes, expenses incurred in Euros are converted into U.S. dollars at the exchange rate prevailing on the date of each transaction. The amount and frequency of some of these
expenses, such as vessel repairs, supplies and stores, may fluctuate from period to period. Depreciation in the value of the dollar relative to other currencies increases the dollar cost to
us of paying such expenses. The portion of our expenses incurred in other currencies could increase in the future, which could expand our exposure to losses arising from currency
fluctuations.
109

Table of Contents
While we have not mitigated the risk associated with exchange rate fluctuations through the use of financial derivatives, we may determine to employ such instruments in the
future in order to minimize this risk. Our use of financial derivatives would involve certain risks, including the risk that losses on a hedged position could exceed the nominal amount
invested in the instrument and the risk that the counterparty to the derivative transaction may be unable or unwilling to satisfy its contractual obligations, which could have an adverse
effect on our results. Because during 2024 and 2023, our Euro expenses represented 9% and 6%, respectively of our revenues, we do not consider the risk from exchange rate fluctuations
to be material for our results of operations and therefore, we are not engaged in derivative instruments to hedge part of those expenses.
Item 12.
Description of Securities Other than Equity Securities
Not Applicable.
110

Table of Contents
PART II
Item 13.
Defaults, Dividend Arrearages and Delinquencies
None.
Item 14.
Material Modifications to the Rights of Security Holders and Use of Proceeds
Pursuant to the Stockholders’ Rights Agreement dated December 20, 2021, each common share includes one preferred stock purchase right that entitles the holder to purchase
from us one-thousandth of a share of our Series A Participating Preferred Stock if any third party acquires beneficial ownership of 10% or more of our common shares without the
approval of our board of directors. See “Item 10. Additional Information—B. Memorandum and Articles of Association—Stockholders’ Rights Agreement.”
The superior voting rights of our Series C Preferred Shares limit the ability of our common shareholders to control or influence corporate matters. See “Description of
Securities,” attached hereto as Exhibit 2.5 and incorporated by reference herein, and the risk factor under “Item 3. Key Information—D. Risk Factors” entitled “Aliki Paliou, the
Chairperson of the Board, controls a majority of voting power over matters on which our shareholders are entitled to vote, and accordingly, may exert considerable influence over us and
may have interests that are different from the interests of our other shareholders.”
Item 15.
Controls and Procedures
a) Disclosure Controls and Procedures
Management, including our Chief Executive Officer and Chief Financial Officer, has conducted an evaluation of the effectiveness of our disclosure controls and procedures, as
defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of the end of the period covered by this report. Based upon that evaluation, our Chief Executive Officer and Chief
Financial Officer have concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit
to the SEC under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms.
b) Management’s Annual Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) of the Exchange Act.
Our internal control over financial reporting is a process designed under the supervision of our Chief Executive Officer and Chief Financial Officer to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of our financial statements for external reporting purposes in accordance with U.S. GAAP.
Management has conducted an assessment of the effectiveness of our internal control over financial reporting based on the framework established in Internal Control -
Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework). Based on this assessment, management has determined that
our internal control over financial reporting as of December 31, 2024, is effective.
c) Attestation Report of the Registered Public Accounting Firm
This annual report does not contain an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was
not subject to attestation by our registered public accounting firm since under the SEC adopting release implementing the Dodd-Frank Wall Street Reform and Consumer Protection Act
of 2010, companies that are non-accelerated filers are exempt from including auditor attestation reports in their Form 20-Fs.
d) Changes in Internal Control over Financial Reporting
None.
111

Table of Contents
Inherent Limitations on Effectiveness of Controls
Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls or our internal control over financial reporting
will prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s
objectives will be met. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or
fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in
decision-making can be faulty and that breakdowns can occur because of simple errors or mistakes. Controls can also be circumvented by the individual acts of some persons, by
collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future
events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls
effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with
policies or procedures.
Item 16.
[Reserved]
Item 16A.
Audit Committee Financial Expert
Alex Papageorgiou serves as the Chairman of our Audit Committee. Our board of directors has determined that Alex Papageorgiou qualifies as an “audit committee financial
expert” and is “independent” according to SEC rules.
Item 16B.
Code of Ethics
We have adopted a code of ethics that applies to officers, directors, employees and agents. Our code of ethics is posted on our website, http://www.pshipping.com, under
“How We Care-Code of Business Conduct and Ethics.” Information on or accessed through our website does not constitute a part of this annual report and is not incorporated by
reference herein. Copies of our Code of Ethics are available in print, free of charge, upon request to Performance Shipping Inc., 373 Syngrou Avenue, 175 64 Palaio Faliro, Athens, Greece.
We intend to satisfy any disclosure requirements regarding any amendment to, or waiver from, a provision of this Code of Ethics by posting such information on our website.
Item 16C.
Principal Accountant Fees and Services
a) Audit Fees
Our principal accountants, Ernst & Young (Hellas) Certified Auditors Accountants S.A., have billed us for audit services.
In 2024 and 2023, audit fees amounted to €189,000 or about $205,254 and €183,750 or about $200,000, respectively, at the then-prevailing exchange rates, and related to audit
services provided in connection with the audit and AS 4105 interim reviews of our consolidated financial statements.
In 2023, Ernst & Young (Hellas) Certified Auditors Accountants S.A., also billed us for services provided for the Company’s registration statements, which amounted €43,050 or
about $46,313, respectively, at the then-prevailing exchange rates. In 2024, no such fees existed.
b) Audit-Related Fees
In 2024 and 2023, no fees under this category existed.
c) Tax Fees
In 2024 and 2023, Ernst &Young LLP, have also billed us for tax services provided for the Company’s earnings and profits calculations, which amounted to $9,250 and $9,000 in
each of the respective years.
112

Table of Contents
d) All Other Fees
None.
e) Audit Committee’s Pre-Approval Policies and Procedures
Our Audit Committee is responsible for the appointment, replacement, compensation, evaluation and oversight of the work of our independent auditors. As part of this
responsibility, the Audit Committee pre-approves all audit and non-audit services performed by the independent auditors in order to assure that they do not impair the auditor’s
independence from the Company. The Audit Committee has adopted a policy which sets forth the procedures and the conditions pursuant to which services proposed to be performed
by the independent auditors may be pre-approved.
f) Audit Work Performed by Other Than Principal Accountant if Greater Than 50%
Not applicable.
Item 16D.
Exemptions from the Listing Standards for Audit Committees
Not applicable.
Item 16E.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
Not applicable.
Item 16F.
Change in Registrant’s Certifying Accountant
Not applicable.
Item 16G.
Corporate Governance
We have certified to Nasdaq that our corporate governance practices are in compliance with, and are not prohibited by, the laws of the Republic of the Marshall Islands.
Therefore, we are exempt from many of Nasdaq’s corporate governance practices other than the requirements regarding the disclosure of a going concern audit opinion, submission of a
listing agreement, notification to Nasdaq of non-compliance with Nasdaq corporate governance practices, prohibition on disparate reduction or restriction of shareholder voting rights,
and the establishment of an audit committee satisfying Nasdaq Listing Rule 5605(c)(3) and ensuring that such audit committee’s members meet the independence requirement of Listing
Rule 5605(c)(2)(A)(ii). The practices we follow in lieu of Nasdaq’s corporate governance rules applicable to U.S. domestic issuers are as follows:
•
As a foreign private issuer, we are not required to have an audit committee comprised of at least three members. Our audit committee is comprised of two members;
•
As a foreign private issuer, we are not required to adopt a formal written charter or board resolution addressing the nominations process. We do not have a nominations
committee, nor have we adopted a board resolution addressing the nominations process;
•
As a foreign private issuer, we are not required to hold regularly scheduled board meetings at which only independent directors are present;
•
In lieu of obtaining shareholder approval prior to the issuance of designated securities, we will comply with provisions of the Marshall Islands Business Corporations Act,
which allows the board of directors to approve share issuances;
113

Table of Contents
•
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 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. In addition, our bylaws provide that shareholders must give us
between 150 and 180 days advance notice to properly introduce any business at a meeting of shareholders.
Other than as noted above, we are in compliance with all other Nasdaq corporate governance standards applicable to U.S. domestic issuers.
Item 16H.
Mine Safety Disclosure
Not applicable.
Item 16I.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
Item 16J.
Insider Trading Policies
We have adopted an insider trading policy governing the purchase, sale, and other dispositions of our securities by directors, senior management, and employees. Our insider
trading policy is reasonably designed to promote compliance with applicable insider trading laws, rules and regulations, and any listing standards applicable to us. A copy of our Insider
Trading Policy has been filed as Exhibit 11.1 to this annual report.
Item 16K.
Cybersecurity
We believe that cybersecurity is fundamental to our operations and, as such, we are committed to maintaining robust governance and oversight of cybersecurity risks and
implementing comprehensive processes and procedures for identifying, assessing, and managing material risks from cybersecurity threats as part of our broader risk management system
and processes. Our cybersecurity risk management strategy prioritizes detection, analysis, and response to known, anticipated or unexpected threats; effective management of security
risks; and resiliency against incidents. With the ever‐changing cybersecurity landscape and continual emergence of new cybersecurity threats, our senior management team ensures that
significant resources are devoted to cybersecurity risk management and the technologies, processes and people that support it. We implement risk‐based controls to protect our
information, our information systems, our business operations, and our vessels.
Risk Management and Strategy
The safe and efficient operation of our business—including, but not limited to, billing, disbursements, accounting, vessel scheduling, and vessel operations—depends on
computer hardware and software systems. These information systems are vulnerable to security breaches by computer hackers and cyber terrorists. We rely on industry‐accepted
security measures and technology to securely maintain confidential and proprietary information on our information systems.
Our processes for assessing, identifying, and managing material risks from cybersecurity threats include:
•
Periodic discussion and assessment of perceived material cybersecurity risks.
•
Internal and external system assessments, such as penetration and vulnerability testing.
•
System protection measures, such as email filtering and access management.
•
Regular threat monitoring, both against the Company and against other companies in the industry.
•
Incident response procedures, for identification, reporting, and remediation.
•
Analysis of cybersecurity incidents and results of security operations monitoring.
•
Regular employee training.
•
Procedures designed to assist in complying with mandatory data protection legislation.
•
The existence and periodic review of internal cybersecurity policies.
We also have processes to oversee and identify cybersecurity risks from threats associated with our use of other service providers. More specifically, we periodically discuss
with our key third‐party managers the technical and organizational measures in place for cybersecurity. In terms of Software as a Service providers, we monitor the relevant IT security
measures through receiving and assessing third‐party assurance reports as well as protect against potential risk factors from them. The results of these processes are taken into
consideration in our annual risk assessment process, during which we identify mitigating actions and new security initiatives.
114

Table of Contents
Governance
Our Audit Committee has ultimate responsibility for the oversight of cybersecurity risks and responses to cybersecurity incidents, should they arise. The Audit Committee is
informed periodically regarding the status of initiatives undertaken by the IT department and internal auditors and other relevant functions to further reduce cybersecurity risk.
The key individuals responsible for the overall assessment and management of material risks from cybersecurity threats include the head of our IT (who possesses
approximately 20 years of experience with informational technology and cybersecurity risk management) and our or internal auditor, who brings extensive regulatory, risk assessment,
and organizational experience to the oversight of our internal processes.
This leadership team receives information regarding the monitoring, prevention, detection, mitigation, and remediation of cybersecurity incidents and proceeds with necessary
actions such as:
•
Updating relevant policies and procedures.
•
Implementing additional technical and organizational measures to reduce the level of cyber risk.
•
Engaging specialized third‐party service providers.
•
Assessing the materiality and determining disclosure obligations in the event of a cybersecurity incident.
•
Reporting to senior management.
Incident Management and Reporting
As part of our cybersecurity risk management system, our incident management teams track and log privacy and security incidents across our Company, including our vessels,
to remediate and resolve any such incidents. All incidents are reviewed regularly to determine whether further escalation is appropriate. Any incident assessed as potentially being or
potentially becoming material is immediately escalated for further assessment, and then reported to our senior management, who then consult with our Audit Committee. We consult with
our outside counsel as appropriate, including on materiality analysis and disclosure matters, and our senior management makes the final materiality determinations and disclosure and
other compliance decisions. Our senior management apprises our independent public accounting firm of matters and any relevant developments.
Where events occur that do not escalate to cybersecurity incidents, the details of the relevant assessments are communicated to senior management on an as‐needed basis.
However, if we were to become the subject of a cybersecurity incident, according to our policies, the key management would take the following steps:
1.
Conduct an incident investigation.
2.
Conduct an incident evaluation and classification.
3.
Undertake internal escalation to our executives.
4.
Pursue containment of the incident and recovery of any affected infrastructure.
5.
Conduct a materiality assessment.
6.
Determine reporting obligations.
7.
Report to the Audit Committee.
Training and Awareness
We have various information technology policies relating to cybersecurity. We also provide mandatory employee training on a periodic basis that reinforces our information
technology policies, standards, and practices, as well as the expectation that employees comply with these policies and identify and report potential cybersecurity risks. We also require
all employees, directors and officers to sign the company’s Privacy Policy for Personal Data protection.
Ongoing Investment and Potential Impact
We continue to invest in our cybersecurity systems and to enhance our internal controls and processes. Our business strategy, results of operations, and financial condition
have not been materially affected by risks from cybersecurity threats to date, but we cannot provide assurance that they will not be materially affected in the future by such risks or any
future material incidents. While we have dedicated significant resources to identifying, assessing, and managing these risks, our efforts may not be adequate, may fail to accurately
assess the severity of an incident, may not be sufficient to prevent or limit harm, or may fail to sufficiently remediate an incident in a timely fashion. Any such failure could harm our
business, reputation, results of operations, and financial condition.
For further information regarding the risks associated with cybersecurity, see the risk factor under “Item 3. Key Information—D. Risk Factors” entitled “A cyber‐attack could
materially disrupt our business”.
115

Table of Contents
PART III
Item 17.
Financial Statements
See “Item 18. Financial Statements.”
Item 18.
Financial Statements
The financial statements required by this “Item 18. Financial Statements” are filed as a part of this annual report beginning on page F-1.
Item 19.
Exhibits
Exhibit Number
Description
1.1
Amended and Restated Articles of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form F-4 (File
No. 333-169974), filed with the SEC on October 15, 2010).
1.2
Articles of Amendment to the Amended and Restated Articles of Incorporation of the Company, dated June 8, 2016 (incorporated by reference to Exhibit 3.3 to the
Company’s report on Form 6-K, filed with the SEC on June 9, 2016).
1.3
Articles of Amendment to the Amended and Restated Articles of Incorporation of the Company, dated July 3, 2017 (incorporated by reference to Exhibit 3.1 to the
Company’s report on Form 6-K, filed with the SEC on July 6, 2017).
1.4
Articles of Amendment to the Amended and Restated Articles of Incorporation of the Company, dated July 26, 2017 (incorporated by reference to Exhibit 3.1 to the
Company’s report on Form 6-K, filed with the SEC on July 28, 2017).
1.5
Articles of Amendment to the Amended and Restated Articles of Incorporation of the Company, dated August 23, 2017 (incorporated by reference to Exhibit 3.1 to the
Company’s report on Form 6-K, filed with the SEC on August 28, 2017).
1.6
Articles of Amendment to the Amended and Restated Articles of Incorporation of the Company, dated September 22, 2017 (incorporated by reference to Exhibit 3.1 to
the Company’s report on Form 6-K, filed with the SEC on September 26, 2017).
1.7
Articles of Amendment to the Amended and Restated Articles of Incorporation of the Company, dated November 1, 2017 (incorporated by reference to Exhibit 3.1 to
the Company’s report on Form 6-K, filed with the SEC on November 3, 2017).
1.8
Articles of Amendment to the Amended and Restated Articles of Incorporation of the Company, dated February 25, 2019 (incorporated by reference to Exhibit 1.8 to
the Company’s Annual Report on Form 20-F, filed with the SEC on March 18, 2019).
1.9
Articles of Amendment to the Amended and Restated Articles of Incorporation of the Company, dated October 30, 2020 (incorporated by reference to Exhibit 3.1 to the
Company’s report on Form 6K, filed with the SEC on November 2, 2020).
1.10
Articles of Amendment to the Amended and Restated Articles of Incorporation of the Company, dated November 15, 2022 (incorporated by reference to Exhibit 1.10 to
the Company’s report on Form 6-K, filed with the SEC on March 28, 2024).
1.11
Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form F-4 (File No. 333-169974),
filed with the SEC on October 15, 2010).
2.1
Form of Common Share Certificate (incorporated by reference to Exhibit 4.1 to the Company’s report on Form 6-K, filed with the SEC on November 2, 2020).
2.2
Statement of Designations of Rights, Preferences and Privileges of Series A Participating Preferred Stock of Performance Shipping Inc., dated August 2, 2010
(incorporated by reference to Exhibit 4.4 to the Company’s Registration Statement on Form F-4 (File No. 333-169974), filed with the SEC on October 15, 2010).
2.3
Amended and Restated Certificate of Designation, Preferences and Rights of the Series B Convertible Cumulative Perpetual Preferred Stock of Performance Shipping
Inc., dated January 12, 2022 (incorporated by reference to Exhibit 3.1 to the Company’s report on Form 6-K, filed with the SEC on February 4, 2022).
2.4
Certificate of Designation of Series C Convertible Cumulative Redeemable Perpetual Preferred Shares dated October 17, 2022 (incorporated by reference to Exhibit 99.2
to the Company’s report on Form 6-K, filed with the SEC on October 21, 2022).
2.5
Description of Securities*
4.1
Registration Rights Agreement dated April 6, 2010 (incorporated by reference to Exhibit 4.2 to the Company’s Registration Statement on Form F-4 (File No. 333-
169974), filed with the SEC on October 15, 2010).
4.2
Stockholders’ Rights Agreement dated December 20, 2021 (incorporated by reference to Exhibit 4.1 to the Company’s report on Form 6-K, filed with the SEC on
December 21, 2021).
4.3
Amended and Restated 2015 Equity Incentive Plan (incorporated by reference to Exhibit 1 to the Company’s report on Form 6-K, filed with the SEC on December 31,
2020).
4.4
Administrative Services Agreement with UOT (incorporated by reference to Exhibit 4.8 to the Company’s Annual Report on Form 20-F, filed with the SEC on March 26,
2014).
4.5
Form of Vessel Management Agreement with UOT (incorporated by reference to Exhibit 4.11 to the Company’s Annual Report on Form 20-F, filed with the SEC on
March 26, 2014).
4.6
Secured Loan Agreement dated 4 August 2023 among Taburao Shipping Company Inc. and Tarawa Shipping Company Inc. as borrowers, Performance Shipping Inc.
as guarantor, the financial institutions listed in schedule 1 thereto as lenders, Nordea Bank Abp as hedge counterparties and Nordea Bank Abp, filial I Norge as
bookrunner, agent, and security agent (incorporated by reference to Exhibit 4.6 to the Company’s report on Form 20-F, filed with the SEC on March 28, 2024).
116

Table of Contents
4.7
First Supplemental Agreement to Secured Loan Facility Agreement dated July 24, 2019 (incorporated by reference to Exhibit 4.8 to the Company’s Registration
Statement on Form F-1/A (File No. 333-255100), filed with the SEC on April 20, 2021).
4.8
Shipbuilding Contract dated March 7, 2023 among Nakaza Shipping Company Inc, China Shipbuilding Trading Company Limited and Shanghai Waigaoqiao
Shipbuilding Company Limited (incorporated by reference to Exhibit 4.9 to the Company’s Annual Report on Form 20-F, filed with the SEC on April 28, 2023).
4.9
Shipbuilding Contract for the construction of Hull No. H1596 dated December 18, 2023 among Sri Lanka Shipping Company Inc., China Shipbuilding Trading Company
Limited and Shanghai Waigaoqiao Shipbuilding Company Limited (incorporated by reference to Exhibit 4.9 to the Company’s report on Form 6-K, filed with the SEC on
March 28, 2024).
4.10
Shipbuilding Contract for the construction of Hull No. H1597 dated December 18, 2023 among Guadeloupe Shipping Company Inc., China Shipbuilding Trading
Company Limited and Shanghai Waigaoqiao Shipbuilding Company Limited (incorporated by reference to Exhibit 4.10 to the Company’s report on Form 6-K, filed with
the SEC on March 28, 2024).
4.11
Credit Facility dated March 2, 2022 between Mango Shipping Corp. and the Company (incorporated by reference to Exhibit 4.10 to the Company’s Annual Report on
Form 20-F, filed with the SEC on March 11, 2022).
4.12
Warrant Agency Agreement dated as of June 1, 2022 among the Company, Computershare Inc., and Computershare Trust Company, N.A. (incorporated by reference to
Exhibit 4.1 to the Company’s report on Form 6-K, filed with the SEC on June 2, 2022).
4.13
Form of Class A Common Share Purchase Warrant (incorporated by reference to Exhibit 4.2 to the Company’s report on Form 6-K, filed with the SEC on June 2, 2022).
4.14
Form of Securities Purchase Agreement between the Company and the purchasers thereto (incorporated by reference to Exhibit 4.2 to the Company’s report on Form 6-
K, filed with the SEC on July 20, 2022).
4.15
Form of Common Share Purchase Warrant (incorporated by reference to Exhibit 4.3 to the Company’s report on Form 6-K, filed with the SEC on July 20, 2022).
4.16
Form of Securities Purchase Agreement between the Company and the purchasers thereto (incorporated by reference to Exhibit 4.2 to the Company’s report on Form 6-
K, filed with the SEC on August 17, 2022).
4.17
Form of Common Share Purchase Warrant (incorporated by reference to Exhibit 4.3 to the Company’s report on Form 6-K, filed with the SEC on August 17, 2022).
4.18
Stock Purchase Agreement dated October 17, 2022 between Mango Shipping Corp. and the Company (incorporated by reference to Exhibit 99.3 to the Company’s
report on Form 6-K, filed with the SEC on October 21, 2022).
4.19
Loan Agreement dated November 1, 2022 between Alpha Bank S.A. as lender and Garu Shipping Company Inc., as borrower (incorporated by reference to Exhibit 4.19
to the Company’s Annual Report on Form 20-F, filed with the SEC on April 28, 2023).
4.20
Loan Agreement dated December 7, 2022 between Alpha Bank S.A., as lender and Arbar Shipping Company Inc., as borrower (incorporated by reference to Exhibit
4.21 to the Company’s Annual Report on Form 20-F, filed with the SEC on April 28, 2023).
4.21
Form of Securities Purchase Agreement dated as of February 28, 2023 between the Company and the purchasers thereto (incorporated by reference to Exhibit 4.2 to the
Company’s report on Form 6-K, filed with the SEC on March 3, 2023).
4.22
Form of Series A Common Share Purchase Warrant (incorporated by reference to Exhibit 4.3 to the Company’s report on Form 6-K, filed with the SEC on March 3,
2023).
4.23
Form of Series B Common Share Purchase Warrant (incorporated by reference to Exhibit 4.4 to the Company’s report on Form 6-K, filed with the SEC on March 3, 2023).
4.24
Shipbuilding Contract for the construction of Hull No. YZJ2024-1624 dated April 30, 2024 among Saint Barth Shipping Company Inc., Jiangsu Yangzijiang Shipbuilding
Group Co., Ltd., Jiangsu New Yangzi Shipbuilding Co., Ltd., and Jiangsu Yangzi Xinfu Shipbuilding Co., Ltd.*
117

Table of Contents
4.25
Bareboat Charterparty dated July 16, 2024, among Kenzan Kaiun Co., Limited, Azalea Line, S.A. and Nakaza Shipping Company Inc. for the P. Massport*
4.26
Memorandum of Agreement, dated July 16, 2024 among Nakaza Shipping Company Inc., Kenzan Kaiun Co., and Azalea Line, S.A. in respect of the P. Massport*
4.27
Guarantee in respect of the P. Massport dated July 16, 2024, among the registrant, Kenzan Kaiun Co., Limited and Azalea Line, S.A.*
4.28
Guarantee in respect of the P. Massport dated July 16, 2024, between the  Yano Kaiun Co., Ltd and Nakaza Shipping Company Inc.*
4.29
Bareboat Charterparty dated October 24, 2024, between Huican (Tianjin) Shipping Leasing Co., Ltd. and Sri Lanka Shipping Company Inc. for Hull No. H1596*
4.30
Guarantee in respect of Hull No. H1596 dated March 4, 2025, between the registrant and Huican (Tianjin) Shipping Leasing Co., Ltd.*
4.31
Bareboat Charterparty dated March 5, 2025, between T.A.C.K Shipping S.A. and Guadeloupe Shipping Company Inc. for the P. Marsaille*
4.32
Memorandum of Agreement, dated October 24, 2024 between Mustique Shipping Company Inc. and Huican (Tianjin) Shipping Leasing Co., Ltd. in respect of Hull No.
H1596*
4.33
Memorandum of Agreement, dated March 5, 2025 between Guadeloupe Shipping Company Inc. and T.A.C.K Shipping S.A. in respect of the P. Marsaille*
4.34
Guarantee in respect of the P. Marsaille dated March 5, 2025, between the registrant and T.A.C.K Shipping S.A.*
4.35
Guarantee in respect of the P. Marsaille dated March 5, 2025, between the Guadeloupe Shipping Company Inc. and Kowa Kaiun Co., Ltd.*
4.36
Memorandum of Agreement, dated February 17 2025 between Maloelap Shipping Company Inc. and MTC Engineering SDN BHD. in respect of the P. Sophia*
4.37
Memorandum of Agreement, dated March 13, 2025, between Arno Shipping Company Inc. and Concord Voyage Limited in respect of the P. Yanbu*
8.1
List of Subsidiaries*
11.1
Insider Trading Policy (incorporated by reference to Exhibit 11.1 to the Company’s report on Form 20-F, filed with the SEC on March 28, 2024).
12.1
Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer*
12.2
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer*
13.1
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
13.2
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
15.1
Consent of independent registered public accounting firm*
15.2
Consent of Watson Farley & Williams LLP*
97.1
Policy for the Recovery of Erroneously Awarded Compensation (incorporated by reference to Exhibit 97.1 to the Company’s report on Form 20-F, filed with the SEC on
March 28, 2024).
101
The following financial information from Performance Shipping Inc.’s Annual Report on Form 20-F for the fiscal year ended December 31, 2024, formatted as Inline
eXtensible Business Reporting Language (iXBRL): (1) Consolidated Balance Sheets as of December 31, 2024 and 2023; (2) Consolidated Statements of Operations for
the years ended December 31, 2024, 2023, and 2022; (3) Consolidated Statements of Comprehensive Income / (Loss) for the years ended December 31, 2024, 2023, and
2022; (4) Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2024, 2023, and 2022; (5) Consolidated Statements of Cash Flows for the
years ended December 31, 2024, 2023, and 2022; and (6) Notes to Consolidated Financial Statements.
104
Cover Page Interactive Data File (formatted as Inline eXtensible Business Reporting Language (iXBRL) and contained in Exhibit 101)
* Filed herewith.
118

Table of Contents
SIGNATURES
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its
behalf.
PERFORMANCE SHIPPING INC.
 
 
By:
/s/ Andreas Michalopoulos
 
 
Andreas Michalopoulos
 
Chief Executive Officer, Director and Secretary
 
 
Dated: April 16, 2025
119

Table of Contents
PERFORMANCE SHIPPING INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 
Pages
 
 
Report of Independent Registered Public Accounting Firm (PCAOB ID 1457)
F-2
 
 
Consolidated Balance Sheets as at December 31, 2024 and 2023
F-4
 
 
Consolidated Statements of Operations for the years ended December 31, 2024, 2023 and 2022
F-5
 
 
Consolidated Statements of Comprehensive Income for the years ended December 31, 2024, 2023 and 2022
F-6
 
 
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2024, 2023 and 2022
F-7
 
 
Consolidated Statements of Cash Flows for the years ended December 31, 2024, 2023 and 2022
F-8
 
 
Notes to Consolidated Financial Statements
F-9
F-1

Table of Contents
Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of Performance Shipping Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Performance Shipping Inc. (the Company) as of December 31, 2024 and 2023, the related consolidated statements of
operations, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to
as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at
December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with U.S. generally
accepted accounting principles.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits.
We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the
Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control
over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on
the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond
to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the
accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a
reasonable basis for our opinion.
F-2

Table of Contents
Critical audit matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the
audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.
The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the
critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
 
Impairment indicators for vessels held and used
 
 
Description of
the matter
As of December 31, 2024, the carrying value of the Company’s vessels, plus unamortized dry-dock costs was $191,963. As discussed in Note 2(l) to the consolidated
financial statements, the Company evaluates each vessel for impairment whenever events or changes in circumstances indicate that the carrying amount of a vessel
plus unamortized dry-dock costs may not be recoverable, in accordance with the guidance in ASC 360 – Property, Plant and Equipment (“ASC 360”).
 
Auditing the Company’s impairment indicator assessment was complex due to the judgment required to evaluate events or changes in circumstances affecting the
market and economic conditions in a cyclical and volatile industry, as well as the subjectivity involved in assessing potential indicators of impairment.
 
 
How we
addressed the
matter in our
audit
We analyzed management’s assessment of vessel impairment indicators against the accounting guidance in ASC 360. In order to test management’s assessment of the
developments in market conditions, our procedures included, among others, performing an analysis over the market charter rates and market prices, recent sales and
purchase activity for second-hand tanker vessels, as well as changes in third-party valuations using market information derived from external industry data. Our
procedures also included sensitivity analyses to evaluate the impact from potential sales. We assessed the Company’s disclosures in Note 2(l) to the consolidated
financial statements.
/s/ Ernst & Young (Hellas) Certified Auditors Accountants S.A.
We have served as the Company’s auditor since 2010.
Athens, Greece
April 16, 2025
F-3

Table of Contents
PERFORMANCE SHIPPING INC.
Consolidated Balance Sheets as at December 31, 2024 and 2023
(Expressed in thousands of U.S. Dollars, except for share and per share data)
ASSETS
 
December 31,
2024
 
 
December 31,
2023
 
CURRENT ASSETS:
  
   
 
Cash and cash equivalents
 $
70,314 
 $
67,267 
Accounts receivable, net (Note 3)
  
5,810 
  
8,280 
Inventories
  
549 
  
2,203 
Prepaid expenses and other assets
  
1,979 
  
2,164 
Total current assets
  
78,652 
  
79,914 
 
  
  
  
  
FIXED ASSETS:
  
  
  
  
Advances for vessels under construction and other vessels’ costs (Note 5) 
  
58,468 
  
11,303 
Vessels, net (Note 6)
  
189,577 
  
202,108 
Property and equipment, net
  
34 
  
44 
Total fixed assets
  
248,079 
  
213,455 
 
  
  
  
  
NON-CURRENT ASSETS:
  
  
  
  
Restricted cash, non-current (Note 7)
  
1,000 
  
1,000 
Right of use asset under operating leases
  
50 
  
99 
Deferred charges, net
  
2,386 
  
1,798 
Other non-current assets
  
226 
  
- 
Total non-current assets
  
3,662 
  
2,897 
Total assets
 $
330,393 
 $
296,266 
 
  
  
  
  
LIABILITIES AND STOCKHOLDERS’ EQUITY
  
  
  
  
 
  
  
  
  
CURRENT LIABILITIES:
  
  
  
  
Current portion of long-term bank debt, net of unamortized deferred fin. costs (Note 7)
 $
7,443 
 $
7,427 
Accounts payable, trade and other
  
2,214 
  
4,630 
Due to related parties (Note 4)
  
615 
  
245 
Accrued liabilities
  
2,820 
  
2,976 
Deferred revenue (Note 3)
  
930 
  
- 
Lease liabilities, current
  
50 
  
66 
EU allowances liability
  
789 
  
- 
Total current liabilities
  
14,861 
  
15,344 
 
  
  
  
  
LONG-TERM LIABILITIES:
  
  
  
  
Long-term bank debt, net of unamortized deferred financing costs (Note 7)
  
40,016 
  
47,459 
Other liabilities, non-current
  
246 
  
214 
Long-term lease liabilities
  
- 
  
33 
Commitments and contingencies (Note 8)
  
- 
  
- 
Fair value of warrants’ liability (Note 9) 
  
27 
  
32 
Total long-term liabilities
  
40,289 
  
47,738 
 
  
  
  
  
STOCKHOLDERS’ EQUITY:
  
  
  
  
Preferred stock, $0.01 par value; 25,000,000 shares authorized, 50,726 and 50,726 Series B, and 1,423,912 and 1,428,372 Series C issued and
outstanding as at December 31, 2024 and 2023, respectively (Note 9)
  
15 
  
15 
Common stock, $0.01 par value; 500,000,000 shares authorized; 12,432,158 and 12,279,676 issued and outstanding as at December 31, 2024
and 2023, respectively (Note 9)
  
124 
  
123 
Additional paid-in capital (Note 9)
  
534,269 
  
534,112 
Other comprehensive income
  
53 
  
49 
Accumulated deficit
  
(259,218)
  
(301,115)
Total stockholders’ equity
  
275,243 
  
233,184 
Total liabilities and stockholders’ equity
 $
330,393 
 $
296,266 
The accompanying notes are an integral part of these consolidated financial statements.
F-4

Table of Contents
PERFORMANCE SHIPPING INC.
Consolidated Statements of Operations
For the years ended December 31, 2024, 2023 and 2022
(Expressed in thousands of U.S. Dollars – except for share and per share data)
 
 
2024
  
2023
  
2022
 
REVENUE:
  
   
   
 
Revenue (Note 3)
 $
87,445 
 $
108,938 
 $
75,173 
 
  
  
  
  
  
  
EXPENSES:
  
  
  
  
  
  
Voyage expenses
  
4,237 
  
4,358 
  
14,861 
Vessel operating expenses
  
19,758 
  
21,866 
  
13,828 
Depreciation and amortization of deferred charges (Note 6)
  
13,336 
  
14,793 
  
9,281 
General and administrative expenses (Notes 4, 8 and 9)
  
8,306 
  
8,042 
  
6,751 
Gain on vessels’ sale (Note 6)
  
- 
  
(15,683)
  
(9,543)
(Reversal of) / Provision for credit losses (Note 3)
  
(7)
  
(37)
  
33 
Foreign currency losses / (gains)
  
1 
  
64 
  
(20)
    Operating income
 $
41,814 
 $
75,535 
 $
39,982 
 
  
  
  
  
  
  
OTHER INCOME / (EXPENSES)
  
  
  
  
  
  
Interest and finance costs (Notes 4, 5, 7, 9 and 10)
  
(1,345)
  
(9,598)
  
(3,966)
Loss from debt extinguishment 
  
- 
  
(387)
  
- 
Interest income
  
3,255 
  
3,302 
  
284 
Changes in fair value of warrants’ liability (Note 9)
  
6 
  
561 
  
- 
    Total other income / (expenses), net
 $
1,916 
 $
(6,122)
 $
(3,682)
 
  
  
  
  
  
  
Net income
 $
43,730 
 $
69,413 
 $
36,300 
 
  
  
  
  
  
  
Income allocated to participating securities (Note 11)
  
- 
  
(2)
  
(6)
Deemed dividend on Series B preferred stock upon exchange of common stock (Notes 9 and 11) 
  
- 
  
- 
  
(9,271)
Deemed dividend on Series C preferred stock upon exchange of Series B preferred stock and re-acquisition of loan due
to a related party (Notes 9 and 11) 
  
- 
  
- 
  
(6,944)
Deemed dividend to the Series C preferred stockholders due to triggering of a down-round feature (Notes 9 and 11) 
  
- 
  
(9,809)
  
(5,930)
Deemed dividend to the July and August 2022 warrants’ holders due to triggering of a down-round feature (Notes 9
and 11) 
  
- 
  
(789)
  
(1,116)
Dividends on preferred stock (Note 11) 
  
(1,833)
  
(1,889)
  
(1,030)
 
  
  
  
  
  
  
Net income attributable to common stockholders
 $
41,897 
 $
56,924 
 $
12,003 
 
  
  
  
  
  
  
Earnings per common share, basic (Note 11)
 $
3.39 
 $
5.43 
 $
6.49 
 
  
  
  
  
  
  
Earnings per common share, diluted (Note 11)
 $
1.11 
 $
1.91 
 $
3.02 
 
  
  
  
  
  
  
Weighted average number of common shares, basic (Note 11)
  
12,365,418 
  
10,491,316 
  
1,850,072 
 
  
  
  
  
  
  
Weighted average number of common shares, diluted (Note 11)
  
39,201,865 
  
35,539,671 
  
6,447,710 
The accompanying notes are an integral part of these consolidated financial statements.
F-5

Table of Contents
PERFORMANCE SHIPPING INC.
Consolidated Statements of Comprehensive Income
For the years ended December 31, 2024,  2023 and 2022
(Expressed in thousands of U.S. Dollars)
 
 
2024
  
2023
  
2022
 
 
  
   
   
 
Net income
 $
43,730 
 $
69,413 
 $
36,300 
Other comprehensive income / (loss) (Actuarial gain / (loss))
  
4 
  
(17)
  
68 
Comprehensive income
 $
43,734 
 $
69,396 
 $
36,368 
The accompanying notes are an integral part of these consolidated financial statements.
F-6

Table of Contents
PERFORMANCE SHIPPING INC.
Consolidated Statements of Stockholders’ Equity
For the years ended December 31, 2024, 2023 and 2022
(Expressed in thousands of U.S. Dollars – except for share and per share data)
 
Common Stock
  
Preferred Stock
  
Additional   
Other 
   
   
 
 
 
# of
  
Par
  
# of
  
# of
  
Par
  
Paid-in
  Comprehensive  Accumulated    
 
 
 
Shares
  
Value
  
B Shares   
C Shares   
Value
  
Capital
  
Income
  
Deficit
  
Total
 
Balance, December 31, 2021
  
337,500  $
3   
-   
-  $
-  $
457,487  $
(2)  $
(370,139)  $
87,349 
 - Net income
  
-   
-   
-   
-   
-   
-   
-   
36,300
  
36,300
 - Common shares exchanged for Series B   
(188,974)   
(1)   
793,657   
-   
8   
9,264   
-   
(9,271)   
- 
 - Compensation cost on restricted stock
and stock option awards (Note 9)
  
-   
-   
-   
-   
-   
107   
-   
-   
107 
 - Issuance of common stock under ATM
program, net of issuance costs
  
175,507   
2   
-   
-   
-   
1,786   
-   
-   
1,788 
 - Issuance of units, net of issuance costs   
508,000   
5   
-   
-   
-   
7,121   
-   
-   
7,126 
 - Issuance of common stock and July
2022 warrants, net of issuance costs
(Note 9) 
  
1,133,333   
11   
-   
-   
-   
5,260   
-   
-   
5,271 
 - Issuance of common stock and August
2022 warrants, net of issuance costs
  
2,222,222   
22   
-   
-   
-   
13,685   
-   
-   
13,707 
 - Series B preferred shares exchanged for
Series C preferred shares and re-
acquisition of loan due to a related
party
  
-   
-   
(657,396)   
1,314,792   
7   
11,867   
-   
(6,944)   
4,930 
 - Deemed dividend to the July 2022
warrants holders due to triggering of a
down-round feature
  
-   
-   
-   
-   
-   
214   
-   
(214)   
- 
 - Deemed dividend to the August 2022
warrants holders due to triggering of a
down-round feature (Note 9)
  
-   
-   
-   
-   
-   
902   
-   
(902)   
- 
 - Deemed dividend to the Series C
stockholders due to triggering of a
down-round feature
  
-   
-   
-   
-   
-   
5,930   
-   
(5,930)   
- 
 - Actuarial gain
  
-   
-   
-   
-   
-   
-   
68   
-   
68 
 - Dividends declared and paid on Series
B preferred shares (at $0.875 per share)   
-   
-   
-   
-   
-   
-   
-   
(530)   
(530)
 - Dividends declared and paid on Series
C preferred shares (at $0.3125 per
share) (Note 11)
  
-   
-   
-   
-   
-   
-   
-   
(411)   
(411)
Balance, December 31, 2022
  
4,187,588  $
42   
136,261   
1,314,792  $
15  $
513,623  $
66  $
(358,041)  $
155,705 
 - Net income
  
-   
-   
-   
-   
-   
-   
-   
69,413   
69,413 
 - Compensation cost on restricted stock
and stock option awards (Note 9)
  
-   
-   
-   
-   
-   
52   
-   
-   
52 
 - Issuance of common stock under ATM
program, net of issuance costs
  
224,817   
2   
-   
-   
-   
671   
-   
-   
673 
 - Actuarial loss
  
-   
-   
-   
-   
-   
-   
(17)   
-   
(17)
 - Issuance of common stock and Series B
warrants, net of issuance costs (Note
9)
  
5,556,000   
56   
-   
-   
-   
7,713   
-   
-   
7,769 
 - Alternative cashless exercise of Series
A warrants (Note 9)
  
3,597,100   
36   
-   
-   
-   
3,379   
-   
-   
3,415 
 - Series B preferred shares exchanged for
Series C preferred shares (Note 9)
  
-   
-   
(85,535)   
171,070   
-   
482   
-   
-   
482 
 - Series C preferred shares converted to
common shares
  
1,064,207   
11   
-   
(57,490)   
-   
(11)   
-   
-   
- 
 - Repurchase and retirement of common
stock, including expenses (Note 9)
  
(2,550,036)   
(26)   
-   
-   
-   
(2,723)   
-   
-   
(2,749)
 - Exercise of July 2022 and August 2022
warrants
  
200,000   
2   
-   
-   
-   
328   
-   
-   
330 
 - Deemed dividend to the July 2022
warrants holders due to triggering of a
down-round feature (Note 9)
  
-   
-   
-   
-   
-   
256   
-   
(256)   
- 
 - Deemed dividend to the August 2022
warrants holders due to triggering of a
down-round feature
  
-   
-   
-   
-   
-   
533   
-   
(533)   
- 
 - Deemed dividend to the Series C
stockholders due to triggering of a
down-round feature
  
-   
-   
-   
-   
-   
9,809   
-   
(9,809)   
- 
 - Dividends declared and paid on Series
B preferred shares (at $1.00 per share)
(Note 9)
  
-   
-   
-   
-   
-   
-   
-   
(55)   
(55)
 - Dividends declared and paid on Series
C preferred shares (at $1.25 per share)
(Note 11)
  
-   
-   
-   
-   
-   
-   
-   
(1,834)   
(1,834)
Balance, December 31, 2023
  
12,279,676  $
123   
50,726   
1,428,372  $
15  $
534,112  $
49  $
(301,115)  $
233,184 
 - Net income
  
-   
-   
-   
-   
-   
-   
-   
43,730   
43,730 
 - Exercise of Series B warrants (Note 9)
  
70,000   
1   
-   
-   
-   
157   
-   
-   
158 
 - Series C preferred shares converted to
common shares (Note 9)
  
82,482   
-   
-   
(4,460)   
-   
-   
-   
-   
- 
 - Actuarial gain
  
-   
-   
-   
-   
-   
-   
4   
-   
4 
 - Dividends declared and paid on Series
B preferred shares (at $1.00 per share)
(Note 9)
  
-   
-   
-   
-   
-   
-   
-   
(52)   
(52)
 - Dividends declared and paid on Series
C preferred shares (at $1.25 per share)
(Note 9)
  
-   
-   
-   
-   
-   
-   
-   
(1,781)   
(1,781)
Balance, December 31, 2024
  
12,432,158  $
124   
50,726   
1,423,912  $
15  $
534,269  $
53  $
(259,218)  $
275,243 
The accompanying notes are an integral part of these consolidated financial statements.
F-7

Table of Contents
PERFORMANCE SHIPPING INC.
Consolidated Statements of Cash Flows
For the years ended December 31, 2024, 2023 and 2022
(Expressed in thousands of U.S. Dollars)
 
 
2024
 
 
2023
  
2022
 
Cash Flows provided by Operating Activities:
  
   
   
 
Net income
 $
43,730 
 $
69,413 
 $
36,300 
Adjustments to reconcile net income to net cash provided by operating activities:
  
  
  
  
  
  
Depreciation and amortization of deferred charges (Note 6)
  
13,336 
  
14,793 
  
9,281 
Amortization of deferred financing costs
  
107 
  
244 
  
402 
Financing costs
  
- 
  
340 
  
- 
Changes in fair value of warrants’ liability
  
(6)
  
(561)
  
- 
Amortization of prepaid charter revenue 
  
- 
  
54 
  
(54)
Gain on vessel’s sale
  
- 
  
(15,683)
  
(9,543)
Compensation cost on restricted stock and stock option awards (Note 9)
  
- 
  
52 
  
107 
Loss from debt extinguishment
  
- 
  
387 
  
- 
Actuarial gain / (loss)
  
4 
  
(17)
  
68 
(Increase) / Decrease in:
  
  
  
  
  
  
Accounts receivable
  
3,232 
  
830 
  
(5,318)
Deferred voyage expenses
  
- 
  
20 
  
38 
Inventories
  
1,654 
  
834 
  
1,249 
Prepaid expenses and other assets
  
413 
  
406 
  
(854)
Right of use asset under operating leases
  
49 
  
64 
  
(79)
Other non-current assets
  
(226)
  
72 
  
189 
Increase / (Decrease) in:
  
  
  
  
  
  
Accounts payable, trade and other
  
(2,667)
  
16 
  
(293)
Due to related parties
  
370 
  
(90)
  
208 
Accrued liabilities
  
(244)
  
87 
  
1,592 
Deferred revenue
  
930 
  
(1,378)
  
1,378 
Other liabilities, non-current
  
32 
  
58 
  
(106)
Lease liabilities under operating leases
  
(49)
  
(64)
  
79 
Drydock costs
  
(769)
  
(1,922)
  
(797)
Net Cash provided by Operating Activities
 $
59,896 
 $
67,955 
 $
33,847 
Cash Flows (used in) / provided by Investing Activities:
  
  
  
  
  
  
Advances for vessels under construction and other vessel costs (Note 5)
  
(47,167)
  
(11,303)
  
- 
Vessel acquisitions and other vessels’ costs
  
- 
  
(64)
  
(143,440)
Proceeds from sale of vessels, net of expenses
  
- 
  
37,636 
  
32,626 
Payments for vessels’ improvements (Note 6)
  
(231)
  
(510)
  
(2,109)
Property and equipment additions
  
(17)
  
(38)
  
(27)
Net Cash (used in) / provided by Investing Activities
 $
(47,415)
 $
25,721 
 $
(112,950)
Cash Flows (used in) / provided by Financing Activities:
  
  
  
  
  
  
Proceeds from related party loans
  
- 
  
- 
  
5,000 
Proceeds from long-term bank debt
  
- 
  
2,141 
  
108,633 
Repayments of related party loans
  
- 
  
- 
  
(70)
Repayments / Prepayments of long-term bank debt (Note 7)
  
(7,533)
  
(75,421)
  
(30,327)
Issuance of common stock and warrants, net of issuance costs
  
- 
  
11,438 
  
26,104 
Proceeds from exercise of Series A and B warrants
  
158 
  
330 
  
- 
Issuance of preferred stock, net of expenses
  
- 
  
482 
  
- 
Common shares re-purchase and retirement, including expenses
  
- 
  
(2,749)
  
- 
Issuance of common stock under ATM program, net of issuance costs (Note 9)
  
- 
  
673 
  
1,788 
Payments of financing costs
  
(226)
  
(140)
  
(932)
Cash dividends (Note 11)
  
(1,833)
  
(1,889)
  
(941)
Net Cash (used in) / provided by Financing Activities
 $
(9,434)
 $
(65,135)
 $
109,255 
Net increase in cash, cash equivalents and restricted cash
 $
3,047 
 $
28,541 
 $
30,152 
Cash, cash equivalents and restricted cash at beginning of the year
 $
68,267 
 $
39,726 
 $
9,574 
Cash, cash equivalents and restricted cash at end of the year
 $
71,314 
 $
68,267 
 $
39,726 
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH
  
  
  
  
  
  
Cash and cash equivalents at the end of the year
 $
70,314 
 $
67,267 
 $
38,726 
Restricted cash at the end of the year
  
1,000 
  
1,000 
  
1,000 
Cash, cash equivalents and restricted cash at the end of the year
 $
71,314 
 $
68,267 
 $
39,726 
SUPPLEMENTAL CASH FLOW INFORMATION
  
  
  
  
  
  
Alternative cashless exercise of Series A warrants
 $
- 
 $
3,415 
 $
- 
Non-cash extinguishment of a related party debt through the issuance of Series C preferred shares
 $
- 
 $
- 
 $
4,930 
Non-cash investing activities
 $
- 
 $
- 
 $
64 
Interest payments, net of capitalized amounts
 $
3,528 
 $
9,135 
 $
3,123 
The accompanying notes are an integral part of these consolidated financial statements.
F-8

Table of Contents
PERFORMANCE SHIPPING INC.
Notes to Consolidated Financial Statements
2024, 2023 and 2022
(Expressed in thousands of US Dollars – except for share and per share and warrants data, unless otherwise stated)
1.
General Information
Company’s identity
The accompanying consolidated financial statements include the accounts of Performance Shipping Inc. (or “Performance”) and its wholly-owned subsidiaries (collectively, the
“Company”). Performance was incorporated as Diana Containerships Inc. on January 7, 2010, under the laws of the Republic of the Marshall Islands for the purpose of engaging in any
lawful act or activity under the Marshall Islands Business Corporations Act. On February 19, 2019, the Company’s Annual Meeting of Shareholders approved an amendment to the
Company’s Amended and Restated Articles of Incorporation to change the name of the Company from “Diana Containerships Inc.” to “Performance Shipping Inc.”, which was effected
on February 25, 2019.  The Company’s common shares trade on the Nasdaq Capital Market under the ticker symbol “PSHG”.
The Company is a global provider of shipping transportation services through the ownership of tanker vessels, while it owned container vessels since its incorporation through August
2020. The Company operates its fleet through Unitized Ocean Transport Limited (the “Manager” or “UOT”), a wholly-owned subsidiary. The fees payable to UOT are eliminated in
consolidation as intercompany transactions. Subsequent to the balance sheet date, UOT was renamed to Performance Shipping Management Inc. (Note 14).
 
Financial Statements’ presentation
On November 15, 2022, the Company effected a one-for-fifteen reverse stock split on its common stock. All share and per share amounts disclosed in the accompanying consolidated
financial statements give effect to these reverse stock splits retroactively for 2022.
Other matters
Various macroeconomic factors, including rising inflation, higher interest rates, global supply chain constraints, and the effects of overall economic conditions and uncertainties could
adversely affect the Company’s results of operations, financial condition, and ability to pay dividends. Additionally, fluctuations in spot charter rates for Aframax tankers may also
impact the Company’s revenues.
The world economy continues to face actual and potential challenges, including tariffs, trade wars, global public health threats, the outbreak or resurgence of pandemics and epidemics,
the Russia-Ukraine and Israel-Hamas wars, the conflict between Israel and Hezbollah, tensions in and around the Red Sea and between Russia and NATO, China and Taiwan disputes,
United States and China trade relations, instability between Iran and the West, hostilities between the United States and North Korea, political unrest and conflict in the Middle East, the
South China Sea and other regions, tensions between Israel and Iran, and tensions between the U.S. and China, the U.S. and Panama and the U.S. and the European Union and NATO
members. Currently, neither the Company’s contracts nor its financial results have been adversely affected by these challenges and conflicts. However, it is possible that third parties
with whom the Company has or will have future contracts may be impacted. The uncertainty surrounding the duration, breadth and global impact of these conditions may adversely
affect the Company’s business, financial condition, results of operation, and cash flows. The Company also monitors inflation in the United States, Eurozone, and other regions, which
may be impacted by global geo-political conditions and the likely shift in policy following numerous elections around the world. These pressures affect energy and commodity prices,
which may impact the Company’s operating expenses or increase cost of capital for the Company. Furthermore, the intensity, duration and economic impact of the Israel-Hamas war and
Houthi attacks on shipping in the Red Sea is uncertain. Sustained conflicts could decrease worldwide demand for certain goods, adversely affecting shipping and making the long-term
net impact on the tanker freight market and the Company’s business difficult to predict with any degree of accuracy.
F-9

Table of Contents
PERFORMANCE SHIPPING INC.
Notes to Consolidated Financial Statements
2024, 2023 and 2022
(Expressed in thousands of US Dollars – except for share and per share and warrants data, unless otherwise stated)
2.
Recent Accounting Pronouncements and Significant Accounting Policies
Recent Accounting Pronouncements
In November 2024, the FASB issued ASU 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of
Income Statement Expenses”. The standard is intended to require more detailed disclosure about specified categories of expenses (including employee compensation, depreciation, and
amortization) included in certain expense captions presented on the face of the income statement. This ASU is effective for fiscal years beginning after December 15, 2026, and for interim
periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The amendments may be applied either prospectively to financial statements issued for
reporting periods after the effective date of this ASU or retrospectively to all prior periods presented in the financial statements. The Company is currently assessing the impact this
standard will have on its consolidated financial statements.
In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2023-07, Segment Reporting (Topic 280): Improvements to
Reportable Segment Disclosures, which requires a public entity to disclose significant segment expenses and other segment items by reportable segment on an annual basis and expands
the extent of interim segment disclosures. The guidance is applied retrospectively to all periods presented in the financial statements, unless it is impracticable to do so. The ASU does
not change how a public entity identifies its operating segments, aggregates them, or applies the quantitative thresholds to determine its reportable segments. The Company adopted the
new standard effective January 1, 2024. The adoption of this ASU affected only the Company’s disclosures (refer to Note 2(y)), with no impact to its financial condition and results of
operations.
Significant Accounting Policies
(a) Principles of Consolidation: The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles and include
the accounts of Performance Shipping Inc. and its wholly-owned subsidiaries. During 2023 and 2024, the Company acquired four newly established subsidiaries named Nakaza Shipping
Company Inc., Sri Lanka Shipping Company Inc., Guadeloupe Shipping Company Inc. and Saint Barth Shipping Company Inc., in connection with the four shipbuilding contracts signed
(refer to Notes 5 and 8). All significant intercompany balances and transactions have been eliminated upon consolidation. Under Accounting Standards Codification (“ASC”) 810
“Consolidation”, the Company consolidates entities in which it has a controlling financial interest, by first considering if an entity meets the definition of a variable interest entity (“VIE”)
for which the Company is deemed to be the primary beneficiary under the VIE model, or if the Company controls an entity through a majority of voting interest based on the voting
interest model. The Company evaluates financial instruments, service contracts, and other arrangements to determine if any variable interests relating to an entity exist. The Company’s
evaluation did not result in an identification of variable interest entities as of December 31, 2024 and 2023.
(b) Use of Estimates: The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the
reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.
(c) Other Comprehensive Income: The Company follows the provisions of Accounting Standard Codification (ASC) 220, “Comprehensive Income”, which requires separate
presentation of certain transactions, which are recorded directly as components of stockholders’ equity. The Company presents Other Comprehensive Income in a separate statement.
F-10

Table of Contents
PERFORMANCE SHIPPING INC.
Notes to Consolidated Financial Statements
2024, 2023 and 2022
(Expressed in thousands of US Dollars – except for share and per share and warrants data, unless otherwise stated)
(d) Foreign Currency Translation: The functional currency of the Company is the U.S. Dollar because the Company operates its vessels in international shipping markets, and
therefore, primarily transacts business in U.S. Dollars. The Company’s accounting records are maintained in U.S. Dollars. Transactions involving other currencies during the years
presented are converted into U.S. Dollars using the exchange rates in effect at the time of the transactions. At the balance sheet dates, monetary assets and liabilities which are
denominated in other currencies are translated into U.S. Dollars at the period-end exchange rates. Resulting gains or losses are reflected separately in the accompanying consolidated
statements of operations.
(e) Cash and Cash Equivalents: The Company considers highly liquid investments such as time deposits, certificates of deposit and their equivalents with an original maturity of three
months or less to be cash equivalents. Interest earned on cash and cash equivalents and restricted cash is separately presented in the accompanying statement of operations in line
Interest Income.
(f) Restricted Cash:  Restricted cash includes minimum cash deposits required to be maintained under the Company’s borrowing arrangements.
(g) Accounts Receivable, net: The account mainly includes receivables from pool charterers, charterers for hire, freight and demurrage, net of provision for credit losses and allowances
for doubtful accounts – (refer to paragraphs (h) and (n), and to Note 3). Furthermore, effective January 1, 2024 and in accordance with the new applicable EU legislation, the account also
includes receivables for EU allowances (“EUAs”), being carbon credits used in the EU Emissions Trading Scheme, in relation with time -charterers and pool voyages in EU ports.
(h) Allowance for Doubtful Accounts and Provision for Credit Losses: The Company, in estimating its expected credit losses, gathers annual historical losses on its freight and
demurrage receivables and makes forward-looking adjustments in the estimated loss ratio, which is re-measured on an annual basis. The Company also assesses collectability for
receivables outside the scope of ASC 326 (i.e. accounts receivable from time and pool charter contracts accounted for in accordance with ASC 842, refer to paragraph (n)), by reviewing
them on a collective basis where similar characteristics exist, and on an individual basis when the Company identifies specific charterers with known disputes or collectability concerns.
The Company recognizes allowance for doubtful accounts deriving from the collectability assessment as direct reduction to lease income.
As of December 31, 2024 and 2023, the balance of the Company’s allowance for estimated credit losses on its outstanding freight and demurrage receivables and allowances for doubtful
accounts were in aggregate $131 and $171, respectively, and is included in Accounts receivable, net in the accompanying consolidated balance sheets.
For 2024, 2023 and 2022, the Provision for credit losses and write offs in the accompanying consolidated statements of operations includes changes in the provision of estimated losses
of $(7), $(85) and $(12), respectively, and it also includes an amount of $0, $48, and $45, respectively, representing demurrages write offs. No allowance was recorded on insurance claims
as of December 31, 2024 and 2023, as their balances were immaterial. In addition, no allowance was recorded for cash equivalents as the majority of cash balances as of the balance sheet
date was on time deposits with highly reputable credit institutions, for which periodic evaluations of the relative credit standing of those financial institutions are performed. Allowances
for doubtful accounts amounted to $114, $147 and $0, for the years ended December 31, 2024, 2023 and 2022, respectively.
(i) Inventories: Inventories consist of bunkers, lubricants and victualling. Bunkers inventory exist when the vessel operates under freight charter, or when on the balance sheet date a
vessel has been redelivered by her previous charterers and has not yet been delivered to new charterers, or remains idle. When the vessel operates under pool charters, the bunkers may
be in the possession of the Company, or of the pool, depending on the terms of the specific pool agreement. All inventories are stated at the lower of cost or net realizable value and cost
is determined by the first in, first out method. Net realizable value is defined as estimated selling prices in the ordinary course of business, less reasonably predictable costs of
completion, disposal and transportation.
F-11

Table of Contents
PERFORMANCE SHIPPING INC.
Notes to Consolidated Financial Statements
2024, 2023 and 2022
(Expressed in thousands of US Dollars – except for share and per share and warrants data, unless otherwise stated)
(j) Vessel Cost for Second-hand Vessels and Newbuildings: Vessels are stated at cost which consists of the contract price and costs incurred upon acquisition or delivery of a vessel
from a shipyard. All pre-delivery costs incurred during the construction of newbuildings, including interest, supervision and technical costs, are capitalized. Subsequent expenditures for
conversions and major improvements are also capitalized when they appreciably extend the life, increase the earnings capacity or improve the efficiency or safety of the vessels;
otherwise, these amounts are charged to expense as incurred. For vessels that on the balance sheet date were in the shipyard undergoing their scheduled special survey and the
installation of their ballast water treatment system, improvement costs of the period under consideration are capitalized in Other non-current assets in the accompanying consolidated
balance sheets. No such vessels existed for the Company as at December 31, 2024, and 2023.
(k) Vessel Depreciation: The Company depreciates its vessels on a straight-line basis over their estimated useful lives, after considering the estimated salvage value. Each vessel’s
salvage value is the product of her light-weight tonnage and estimated scrap rate, which is estimated at $0.35 per light-weight ton for the tanker vessels. Management estimates the
useful life of the Company’s tanker vessels to be 25 years from the date of initial delivery from the shipyard. Second-hand vessels are depreciated from the date of their acquisition
through their remaining estimated useful life. When regulations place limitations on the ability of a vessel to trade on a worldwide basis, the vessel’s useful life is adjusted at the date
such regulations are adopted.
(l) Impairment of Long-Lived Assets: The Company follows ASC 360-10-40 “Impairment or Disposal of Long-Lived Assets”, which addresses financial accounting and reporting for the
impairment or disposal of long-lived assets. The Company reviews vessels for impairment whenever events or changes in circumstances (such as market conditions, the economic
outlook technological regulatory and environmental developments obsolesce or damage to the asset potential sales and other business plans) indicate that the carrying amount of a
outlook, technological, regulatory and environmental developments, obsolesce or damage to the asset, potential sales and other business plans) indicate that the carrying amount of a
vessel plus her unamortized dry-dock costs may not be recoverable. When the estimate of future undiscounted net operating cash flows, excluding interest charges, expected to be
generated by the use of the vessel over her remaining useful life and her eventual disposition is less than her carrying amount plus unamortized drydock-costs, the Company evaluates
the vessel for impairment loss. The measurement of the impairment loss is based on the fair value of the vessel. The fair value of the vessel is determined based on assumptions by
making use of available market data and taking into consideration third-party valuations. The Company evaluates the carrying amounts and periods over which vessels are depreciated
to determine if events have occurred which would require modification to their carrying values or useful lives. In evaluating useful lives and carrying values of long-lived assets,
management reviews certain indicators of potential impairment, such as undiscounted projected operating cash flows, vessel sales and purchases, business plans and overall market
conditions. In developing estimates of future undiscounted cash flows, the Company makes assumptions and estimates about the vessels’ future performance, with the significant
assumptions being related to charter rates and fleet utilization, while other assumptions include vessels’ operating expenses, vessels’ residual value, dry-dock costs and the estimated
remaining useful life of each vessel. The assumptions used to develop estimates of future undiscounted cash flows are based on historical trends as well as future expectations. The
Company also takes into account factors such as the vessels’ age and employment prospects under the then current market conditions and determines the future undiscounted cash
flows considering its various alternatives, including sale possibilities existing for each vessel as of the testing dates.
In detail, the projected net operating cash flows are determined by considering the historical and estimated vessels’ performance and utilization, as well as historical utilization of other
vessels of similar type and size considering the Company’s recent shift to the tanker market and the lack of extended historical data, the charter revenues from existing time charters for
the fixed fleet days and an estimated daily rate for the unfixed days (based on the most recent 10 year average historical rates available for each type of vessel) over the remaining
estimated life of each vessel, net of commissions, expected outflows for scheduled vessels’ maintenance and vessel operating expenses assuming an average annual inflation rate. 
Effective fleet utilization, which is estimated based on the vessels’ historical performance, is included in the Company’s exercise taking into account the period(s) each vessel is expected
to undergo her scheduled maintenance (dry docking and special surveys), assumptions in line with the Company’s historical performance since the acquisition of its tanker vessels,
peers’ historical performance, and its expectations for future fleet utilization under its fleet employment strategy. For 2024, 2023 and 2022, the Company assessed that there were no
indications for potential impairment of any of its vessels, including vessels under construction.
F-12

Table of Contents
PERFORMANCE SHIPPING INC.
Notes to Consolidated Financial Statements
2024, 2023 and 2022
(Expressed in thousands of US Dollars – except for share and per share and warrants data, unless otherwise stated)
(m) Assets Held for Sale: The Company classifies assets or assets in disposal groups as being held for sale in accordance with ASC 360-10-45-9 “Long-Lived Assets Classified as Held
for Sale” when the following criteria are met: (i) management possessing the necessary authority has committed to a plan to sell the asset (disposal group); (ii)  the asset (disposal group)
is immediately available for sale on an “as is” basis; (iii) an active program to find the buyer and other actions required to execute the plan to sell the asset (disposal group) have been
initiated; (iv) the sale of the asset (disposal group) is probable, and transfer of the asset (disposal group) is expected to qualify for recognition as a completed sale within one year; and
(v) the asset (disposal group) is being actively marketed for sale at a price that is reasonable in relation to its current fair value and actions required to complete the plan indicate that it is
unlikely that significant changes to the plan will be made or that the plan will be withdrawn. In case a long-lived asset is to be disposed of other than by sale (for example, by
abandonment, in an exchange measured based on the recorded amount of the nonmonetary asset relinquished, or in a distribution to owners in a spinoff) the Company continues to
classify it as held and used until its disposal date. Long-lived assets or disposal groups classified as held for sale are measured at the lower of their carrying amount or fair value less
cost to sell. These assets are not depreciated once they meet the criteria to be held for sale. The review of the related criteria as of December 31, 2024 and 2023 did not result in held for
sale classification for any of the Company’s vessels.
(n) Revenues and Voyage Expenses: Since the Company’s vessels are employed under time, voyage and pool charter contracts, the Company disaggregates its revenue from contracts
with customers by the type of charter (time charters, spot charters and pool arrangements).
The Company has determined that all of its time charter agreements contain a lease and are therefore accounted for as operating leases in accordance with ASC 842. Time charter
revenues are accounted for over the term of the charter as the service is provided. Vessels are chartered when a contract exists and the vessel is delivered (commencement date) to the
charterer, for a fixed period of time, at rates that are generally determined in the main body of charter parties and the relevant voyage expenses burden the charterer (i.e. port dues, canal
tolls, pilotages and fuel consumption). Upon delivery of the vessel, the charterer has the right to control the use of the vessel (under agreed prudent operating practices) as they have
the enforceable right to: (i) decide the delivery and redelivery time of the vessel; (ii) arrange the ports from which the vessel shall pass; (iii) give directions to the master of the vessel
regarding vessel’s operations (i.e. speed, route, bunkers purchases, etc.); (iv) sub-charter the vessel and (v) consume any income deriving from the vessel’s charter. Any off-hires are
recognized as incurred. The charterer may charter the vessel with or without owner’s crew and other operating services. In the case of time charter agreements, the agreed hire rates
include compensation for part of the agreed crew and other operating services provided by the owner (non-lease components). The Company, as a lessor, elected to apply the practical
expedient which allowed it to account for the lease and the non-lease components of time charter agreements as one, as the criteria of the paragraphs ASC 842-10-15-42A through 42B are
met. Time-charter revenue is usually received in advance, and as such, deferred revenue represents cash received prior to the balance sheet date for which related service has not been
provided.
Spot, or voyage charter is a charter where a contract is made in the spot market for the use of a vessel for a specific voyage for a specified freight rate per ton, regardless of time to
complete. The Company has determined that under voyage charters, the charterer has no right to control any part of the use of the vessel. Thus, the Company’s voyage charters do not
contain lease and are accounted for in accordance with ASC 606. More precisely, the Company satisfies its single performance obligation to transfer cargo under the contract over the
voyage period. Thus, revenues from voyage charters on the spot market are recognized ratably from the date of loading (Notice of Readiness to the charterer, that the vessel is available
for loading) to discharge date of cargo (loading-to-discharge). Voyage charter payments are due upon discharge of the cargo. Demurrage revenue, which is included in voyage revenues,
represents charterers’ reimbursement for any potential delays exceeding the allowed lay time as per charter party agreement, represents a form of variable consideration and is recognized
as the performance obligation is satisfied. The Company has taken the practical expedient not to disclose the value of unsatisfied performance obligations for contracts with an original
expected length of one year or less.
For vessels operating in pooling arrangements, the Company earns a portion of total revenues generated by the pool, net of expenses incurred by the pool. The amount allocated to each
pool participant vessel, including the Company’s vessels, is determined in accordance with an agreed-upon formula, which is determined by the margins awarded to each vessel in the
pool based on the vessel’s age, design and other performance characteristics. Revenue under pooling arrangements is accounted for as variable rate operating lease on the accrual basis
and is recognized in the period in which the variability is resolved. The Company recognizes net pool revenue on a quarterly basis, when the vessel has participated in a pool during the
period and the amount of pool revenue can be estimated reliably based on the pool report. The allocation of such net revenue may be subject to future adjustments by the pool, however,
such changes are not expected to be material.
F-13

Table of Contents
PERFORMANCE SHIPPING INC.
Notes to Consolidated Financial Statements
2024, 2023 and 2022
(Expressed in thousands of US Dollars – except for share and per share and warrants data, unless otherwise stated)
As discussed above, under a time charter, specified voyage costs such as bunkers and port charges are paid by the charterer, while commissions are paid by the Company. Under spot
charter arrangements, voyage expenses that are unique to a particular charter are paid for by the Company. Commissions are expensed as incurred. Voyage expenses that qualify as
contract fulfilment costs (mainly consisting of bunkers expenses and port dues) and are incurred by the Company from the latter of the end of the previous vessel employment, provided
that the vessel is fixed, or from the date of inception of a voyage charter contract until the arrival at the loading port, are capitalized to Deferred Voyage Expenses and amortized ratably
over the total transit time of the voyage (loading-to-discharge). Vessel voyage expenses that do not qualify as contract fulfilment costs, and operating expenses are expensed when
incurred.
(o) Earnings per Common Share: Basic earnings per common share are computed by dividing net income attributable to common stockholders by the weighted average number of
common shares outstanding during the period. The two-class method is an earnings allocation formula that determines earnings per share for common stock and participating securities,
according to dividends declared and participation rights in undistributed earnings. Under this method, net earnings is reduced by the amount of dividends declared in the current period
for common shareholders and participating security holders. The remaining earnings or “undistributed earnings” are allocated between common stock and participating securities to the
extent that each security may share in earnings as if all of the earnings for the period had been distributed. Once calculated, the earnings per common share is computed by dividing the
net earnings attributable to common shareholders by the weighted average number of common shares outstanding during each year presented. Diluted earnings per common share
reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised. Diluted earnings attributable to common shareholders per common
share is computed by dividing the net earnings attributable to common shareholders by the weighted average number of common shares outstanding plus the dilutive effect of restricted
shares, warrants and options outstanding during the applicable periods computed using the treasury method and the dilutive effect of convertible securities during the applicable
periods computed using the “if converted” method. The two-class method is used for diluted earnings per common share when such is the most dilutive method, considering anti –
dilution sequencing as per ASC 260. In cases when the effect from restricted stock, options, warrants and convertible securities is anti-dilutive, such are not included in the diluted
earnings per common share calculation. For purposes of the if-converted calculation, the fixed conversion price of preferred convertible stock is used, unless the number of shares that
may be issued is variable, at which case the average market price of the period is used. (Note 11).
(p) Dry-Docking Costs: The Company follows the deferral method of accounting for dry-docking costs whereby actual costs incurred are deferred and amortized on a straight-line basis
over the period through the date the next dry-docking will be scheduled to become due. Unamortized dry-docking costs of vessels that are sold are written off and included in the
calculation of the resulting gain or loss in the year of the vessel’s sale. Unamortized dry-docking costs of vessels classified as held for sale are written off as impairment charges when
these vessels’ carrying values are impaired as a result of their classification. The unamortized dry-docking cost as of December 31, 2024, and 2023 was $2,386 and $1,798, respectively.
Amortization of dry-docking costs for 2024, 2023 and 2022 amounted to $548, $571 and $544, respectively, and is included in Depreciation and amortization of deferred charges in the
accompanying consolidated statement of operations. Also, in 2023 and 2022, deferred dry-dock costs which were written off in Gain on vessels’ sale in the accompanying consolidated
statement of operations amounted to $651 and $562, respectively.
(q) Financing Costs and Liabilities: Fees paid to lenders for obtaining new loans, or for refinancing existing ones which are determined as debt modifications, are deferred and recorded
as a contra to debt. As of December 31, 2024, the Company paid an amount $226 in connection with the sale and lease-back agreement of its Hull 1597, which is classified in Other non-
current assets in the accompanying consolidated balance sheets, and in Payments of financing costs in the accompanying consolidated statements of cash flows. Other fees paid for
obtaining financing not used at the balance sheet date are capitalized as deferred financing costs.  Fees are amortized to interest and finance costs over the life of the related debt using
the effective interest method. Discount premiums are accounted for similar to other financing fees. A loan liability is derecognized when the Company pays the creditor and is relieved of
its obligation for the liability. For loans repaid or refinanced that meet the criteria of debt extinguishment, the difference between the settlement price and the net carrying amount of the
debt being extinguished (which includes any deferred debt issuance costs) is recognized as a gain or loss in the statement of operations. In 2023, an amount of $387 being the
unamortized financing costs of the loans with Piraeus Bank, which were repaid in November and December 2023 (Note 7) has been recognized as Loss from debt extinguishment and is
separately presented in the accompanying 2023 consolidated statement of operations.
F-14

Table of Contents
PERFORMANCE SHIPPING INC.
Notes to Consolidated Financial Statements
2024, 2023 and 2022
(Expressed in thousands of US Dollars – except for share and per share and warrants data, unless otherwise stated)
During 2023, the Company has elected one of the optional expedients provided in ASU No. 2020 04 Reference Rate Reform (Topic 848), that allows entities with contract modifications
(within the scope of Topic 470), relating directly to the replacement of a reference rate with another interest rate index, to account for the modification as if the modification was not
substantial. That is, the original contract and the new contract shall be accounted for as if they were not substantially different from one another, and the modification shall not be
accounted for in the same manner as debt extinguishment. Also, in 2023, the Company’s loans’ transition from LIBOR to SOFR was completed.
(r) Repairs and Maintenance: All repair and maintenance expenses including underwater inspection expenses are expensed in the period incurred and included in Vessel operating
expenses in the accompanying consolidated statement of operations.
(s) Share-Based Payment: The Company issues restricted share awards which are measured at their grant date fair value and are not subsequently re-measured.  That cost is recognized
under the straight-line method over the period during which an employee is required to provide service in exchange for the award—the requisite service period (usually the vesting
period). At cases when part of the vesting of the restricted share award takes place on the grant date, then the corresponding compensation cost is recognized as incurred. When the
service inception date precedes the grant date, the Company accrues the compensation cost for periods before the grant date based on the fair value of the award at the reporting date.
In the period in which the grant date occurs, cumulative compensation cost is adjusted to reflect the cumulative effect of measuring compensation cost based on the fair value at the
grant date. Forfeitures of awards are accounted for when and if they occur. If an equity award is modified after the grant date, incremental compensation cost will be recognized in an
amount equal to the excess of the fair value of the modified award over the fair value of the original award immediately before the modification.
The Company also grants stock options as incentive-based compensation to certain of its officers, in accordance with the terms of the Company’s Equity Incentive Plan. Stock-based
compensation awards that are classified as equity and do not contain any market, service or performance conditions, are recognized on the grant date with a corresponding credit to
equity and are measured at fair value. The compensation cost of the Company’s stock-based compensation awards is included in general and administrative expenses in the consolidated
statement of operations (Note 9).
(t) Fair Value Measurements: The Company follows the provisions of ASC 820 “Fair Value Measurements and Disclosures”, which defines fair value and provides guidance for using
fair value to measure assets and liabilities. The guidance creates a fair value hierarchy of measurement and describes fair value as the price that would be received to sell an asset or paid
to transfer a liability in an orderly transaction between market participants in the market in which the reporting entity transacts. In accordance with the requirements of accounting
guidance relating to Fair Value Measurements, the Company classifies and discloses its assets and liabilities carried at the fair value in one of the following categories:
•
Level 1: Quoted market prices in active markets for identical assets or liabilities;
•
Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data;
•
Level 3: Unobservable inputs that are not corroborated by market data.
The fair value measurement assumes that an instrument classified in the shareholders’ equity is transferred to a market participant at the measurement date. The transfer of an instrument
classified in shareholders’ equity assumes that the instrument would remain outstanding, and the market participant takes on the rights and responsibilities associated with the
instrument.
F-15

Table of Contents
PERFORMANCE SHIPPING INC.
Notes to Consolidated Financial Statements
2024, 2023 and 2022
(Expressed in thousands of US Dollars – except for share and per share and warrants data, unless otherwise stated)
(u) Concentration of Credit Risk: Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist principally of cash and trade
accounts receivable. The Company places its temporary cash investments, consisting mostly of deposits, with various qualified financial institutions and performs periodic evaluations
of the relative credit standing of those financial institutions that are considered in the Company’s investment strategy. The Company limits its credit risk with accounts receivable by
performing ongoing credit evaluations of its customers’ financial condition and generally does not require collateral for its accounts receivable and does not have any agreements to
mitigate credit risk. For credit losses accounting on the Company’s financial assets refer to paragraph (h) above.
(v) Going Concern: The Company evaluates whether there is substantial doubt about its ability to continue as a going concern by applying the provisions of ASC 205-40. In more detail,
the Company evaluates whether there are conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern within one year from the date the
consolidated financial statements are issued. As part of such evaluation, the Company did not identify any conditions that raise substantial doubt about the entity’s ability to continue
as a going concern within one year from the date the consolidated financial statements are issued. Accordingly, the Company continues to adopt the going concern basis in preparing its
consolidated financial statements.
(w) Re-purchase and Retirement of Company’s Common Shares: All Company’s common shares re-purchased are immediately cancelled and retired, and the Company’s share capital is
accordingly reduced. The excess of the cost of the common shares over their par value is allocated in additional paid-in capital.
(x) Re-purchase and Retirement of Company’s Preferred Shares: All Company’s preferred shares re-purchased are immediately cancelled and retired, and the Company’s share capital
is accordingly reduced. Any difference between the fair value of the consideration transferred to the holders of the preferred stock and the carrying amount of the preferred stock
represents a return to (from) the preferred stockholder that should be treated in a manner similar to the treatment of dividends paid on preferred stock. If the fair value of the
consideration transferred plus any direct costs incurred in relation to the redemption, is less than the carrying amount of the preferred shares redeemed (net of any issuance costs), the
difference is credited to retained earnings. In addition, any possible excess between the fair value of the consideration paid for the re-purchase of preferred shares and the carrying
amount of the shares surrendered is reflected as gain which should be added to the net income to arrive at the net income available to common stockholders (Note 11).
(y) Segmental Reporting: The operation of the vessels is the main source of revenue generation, the services provided by the vessels are similar and they all operate under the same
economic environment. The Company’s Chief Executive Officer, who is identified as the chief operating decision maker (“CODM”) in accordance with ASC 280, Segment Reporting,
reviews operating results solely based on revenues of the fleet, without differentiating by type of vessel or by the length of ship employment for its customers, i.e. spot or time charters.
Additionally, the vessels do not operate in specific geographic areas, as they trade worldwide. The CODM uses consolidated net income as presented in the Company’s consolidated
statements of operations to assess performance and allocate resources. Such resources allocation is relied not only upon the reported segment’s results but also on CODM’s view and
estimates as to the future prospected of the segment. In addition, the CODM is provided on a regular basis with the consolidated operating expenses, deemed as significant and included
in the segment profit, presented in the Company’s consolidated statements of operations. As a result, the Company has determined that it operates under one reportable segment, that of
operating tanker vessels and the assets of such segment are presented under the caption Total assets in the consolidated balance sheets. The accounting policies applied to the
reportable segment are the same as those used in the preparation of the Company’s consolidated financial statements.
F-16

Table of Contents
PERFORMANCE SHIPPING INC.
Notes to Consolidated Financial Statements
2024, 2023 and 2022
(Expressed in thousands of US Dollars – except for share and per share and warrants data, unless otherwise stated)
(z) Exchange of Common Shares for Shares of Series B Convertible Preferred Stock: In cases of exchanges of common stock for preferred stock, the Company values separately the
common stock and the preferred stock on the date of the exchange. When the Company determines that on the measurement date there is an excess value of the preferred stock, as
compared to the fair value of the exchanged common stock, that value represents a dividend to the preferred holders, which should be deducted from the net income/(loss) to arrive at
the net income/(loss) available to common stockholders.
(aa) Exchange of Series B Convertible Preferred Stock and Related Party Loan for Series C Convertible Preferred Stock: The Company follows the provisions of ASC 470-50
“Modifications and Extinguishments” to determine whether exchange of preferred stock should be accounted for as a modification or extinguishment. For extinguishments, the Company
follows the accounting as per ASC 260-10-S99-2. Under that guidance, when equity-classified preferred shares are extinguished, the difference between (1) the fair value of the
consideration transferred to the holders of the preferred shares (i.e., the cash or the fair value of new instruments issued) and (2) the carrying amount of the preferred shares (net of
issuance costs) are subtracted from (or added to) net income to arrive at income available to common stockholders in the calculation of earnings/(losses) per share. As far as it concerns
extinguishment of related party loans, the Company follows provision of ASC 470-50-40-2, indicating that such extinguishment transactions may be in essence capital transactions.
(ab) Preferred Shares and Warrants Accounting: The Company follows the provision of ASC 480 “Distinguishing Liabilities from Equity” and ASC 815 “Derivatives and Hedging” to
determine the classification of certain freestanding financial instruments as permanent equity, temporary equity or liability. The Company, when assessing the accounting of the warrants,
the pre-funded warrants, the Series B Preferred Shares and the Series C Preferred Shares takes into consideration ASC 480 to determine whether the warrants, the pre-funded warrants,
the Series B Preferred Shares and the Series C Preferred Shares should be classified as permanent equity instead of temporary equity or liability. The Company further analyses the key
features of the warrants, the pre-funded warrants, the Series B and Series C Preferred Shares to determine whether these are more akin to equity or to debt. In its assessment, the
Company identifies any embedded features, examines whether these fall under the definition of a derivative according to ASC 815 applicable guidance or whether certain of these
features affect the classification. In cases when derivative accounting is deemed inappropriate, no bifurcation of these features is performed. For those warrants meeting the
classification of liability, the initial recognition is at fair value and are remeasured at each balance sheet date with the offsetting adjustments recorded in change in fair value of warrant
liabilities within the consolidated statements of operations. Upon settlement or termination, warrants classified as liabilities at fair value, are marked to their fair value at the settlement
date and then the liability settled. The Company values its warrants classified as liabilities using the Black-Scholes option pricing model (refer to Note 9).
(ac) Accounting of Down-Round Features: For preferred stock and warrants bearing down-round features, the Company evaluates whether there are circumstances that trigger the
down-round feature. At the date when the down-round features are triggered, the Company considers the provision of ASC 260-10-30-1 and measures the value of the effect of the
feature as the difference between (a) the fair value of the financial instrument (without the down-round feature) with a conversion price or exercise price (as applicable), corresponding to
the stated conversion or exercise price of the issued instrument before the conversion or exercise price reduction and (b) the fair value of the financial instrument (without the down-
round feature) with a conversion or exercise price, corresponding to the reduced conversion or exercise price upon the down-round feature being triggered (refer to Note 9). When the
Company determines that on the measurement date there is an excess value of the preferred stock or the warrant due to the triggering of the down-round feature, then this value
represents a deemed dividend to the preferred or to the warrant holders (as applicable), which should be deducted from the net income to arrive at the net income available to common
stockholders.
F-17

Table of Contents
PERFORMANCE SHIPPING INC.
Notes to Consolidated Financial Statements
2024, 2023 and 2022
(Expressed in thousands of US Dollars – except for share and per share and warrants data, unless otherwise stated)
3.
Revenue, Accounts Receivable, net and Deferred Revenue
The Company’s tanker vessels are employed under various types of charters and accordingly, the Company disaggregates its revenue from contracts with customers by the type of
charter (time charters, spot charters and pool charters).
Below are presented, per type of charter, the Company’s revenues for 2024, 2023 and 2022, and also the balance of Accounts receivable, net, for December 31, 2024 and 2023.
Charter type
 
2024
  
2023
  
2022
 
Time charters
 $
63,085 
 $
57,975 
 $
8,131 
Pool arrangements
  
23,378 
  
48,332 
  
43,712 
Voyage charters
  
982 
  
2,631 
  
23,330 
Total Revenue
 $
87,445 
 $
108,938 
 $
75,173 
 
As of December 31,
 
Charter type
 
2024
  
2023
 
Time charters
 $
2,063 
 $
2,638 
Pool arrangements
  
2,845 
  
5,213 
Voyage charters
  
902 
  
429 
Total Acc. Receivable, net
 $
5,810 
 $
8,280 
Contract assets included in the receivable balances from spot voyages amounted to $0 and $103 for December 31, 2024 and 2023, respectively.
Moreover, the charterers that accounted for more than 10% of the Company’s revenue are presented below:
Charterer
 
2024
 
 
2023
 
 
2022
 
A
  
16%   
11%   
- 
B
  
26%   
28%   
- 
C
  
16%   
- 
  
- 
D
  
- 
  
13%   
41%
E
  
22%   
32%   
18%
The maximum aggregate amount of loss due to credit risk, net of related allowances, that the Company would incur if the aforementioned charterers failed completely to perform
according to the terms of the relevant charter parties, amounted to $1,108 and to $7,947 as of December 31, 2024 and 2023, respectively.
Deferred Revenue relates solely to cash received up-front from the Company’s time-charter contracts and as of December 31, 2024, and 2023 it amounted to $930 and $0 respectively and
is separately presented in the accompanying consolidated balance sheets.
F-18

Table of Contents
PERFORMANCE SHIPPING INC.
Notes to Consolidated Financial Statements
2024, 2023 and 2022
(Expressed in thousands of US Dollars – except for share and per share and warrants data, unless otherwise stated)
4.
Transactions with Related Parties
(a)  Pure Brokerage and Shipping Corp. (“Pure Brokerage”): Pure Brokerage, a company controlled by the Company’s Chairperson of the Board and controlling shareholder Aliki
Paliou, provides brokerage services to the Company since June 15, 2020, pursuant to a Brokerage Services Agreement for a fixed monthly fee per each tanker vessel owned by the
Company. Pure Shipbroking may also, from time to time, receive sale and purchase commissions and chartering commissions on the gross revenue of the tanker vessels, depending on
the respective charter parties’ terms.
For 2024, 2023 and 2022, commissions to Pure Brokerage amounted to $1,079, $1,345 and $887, respectively, and are included in Voyage expenses in the accompanying consolidated
statements of operations. Also, for 2024, 2023 and 2022, brokerage fees to Pure Brokerage amounted to $340, $286 and $204, respectively, and are included in General and administrative
expenses in the accompanying consolidated statements of operations. As at December 31, 2024 and 2023, an amount of $485 and $245 respectively, was payable to Pure Brokerage and is
reflected in Due to related parties in the accompanying consolidated balance sheets.
(b)  Mango Shipping Corp (“Mango”): On March 2, 2022, the Company entered into an unsecured credit facility with Mango, whose beneficial owner is the Company’s Chairperson of
the Board and controlling shareholder Aliki Paliou, of up to $5,000, for general working capital purposes. The loan had a term of one year from the date of the agreement, bore interest of
9.0% per annum, and was drawn in arrears at the Company’s request. The agreement also provided for arrangement fees of $200 payable on the date of the agreement, and commitment
fees of 3.00% per annum on any undrawn amount until the maturity date. The Company drew down the $5,000 loan amount in two advances in March 2022, and repaid it in full on
October 17 and October 19, 2022 (see below the paragraph “Tender Offer to exchange common shares for Shares of Series B Cumulative Perpetual Preferred Stock”). For 2022, interest
and commitment fees incurred in connection with the Mango loan amounted to $277, and together with arrangement fees of $200 which were amortized and written off during 2022, are
included in Interest and finance costs in the accompanying consolidated statements of operations (Note 10).
Tender Offer to Exchange Common Shares for Shares of Series B Convertible Cumulative Perpetual Preferred Stock: In December 2021, the Company commenced an offer to
exchange up to 271,078 of its then issued and outstanding common shares, par value $0.01 per share, for newly issued shares of the Company’s Series B Convertible Cumulative
Perpetual Preferred Stock, par value $0.01, at a ratio of 4.20 Series B Preferred Shares for each common Share. The tender offer expired on January 27, 2022, and a total of 188,974 common
shares were validly tendered and accepted for exchange, which resulted in the issuance of 793,657 Series B Preferred Shares, out of which 657,396 were beneficially owned by Aliki Paliou
through Mango, and 28,171 were beneficially owned by Andreas Michalopoulos. On October 17, 2022, the Company entered into a stock purchase agreement with Mango pursuant to
which it agreed to issue to Mango in a private placement 1,314,792 Series C Preferred Stock in exchange for (i) all 657,396 Series B Preferred Shares held by Mango, and (ii) the agreement
by Mango to apply $4,930 (an amount equal to the aggregate cash conversion price payable upon conversion of such Series B Preferred Shares into Series C Preferred Shares pursuant
to their terms) as a prepayment by the Company of the unsecured credit facility. The transaction was approved by a special independent committee of the Company’s Board of Directors.
On October 19, 2022, the Company repaid the remaining amount due to the credit facility of $70, together with accrued interest, and terminated the agreement.
The Series B and the Series C Preferred stock is entitled to an annual dividend of 4.00% and 5.00%, respectively (Note 9). For 2022, dividends declared and paid to Mango on its Series B
preferred shares amounted to $411 (or $0.875 per each Series B preferred share) and were calculated for the period from February 2, 2022 (date of issuance of the Series B preferred shares)
until September 15, 2022. Following the issuance of the Series C preferred shares in October 2022 to Mango, the dividends on the Series B preferred shares held by Mango accrued until
the last dividend payment date, which was September 15, 2022. Additionally, for 2022, dividends declared and paid to Mango on its Series C preferred shares amounted to $411, (or
$0.3125 per each Series C preferred share), and were calculated for the period from September 15, 2022 until December 15, 2022. On December 31, 2022, accrued and not paid dividends on
the Series C preferred shares held by Mango, amounted to $82. For 2023 and 2024, dividends declared and paid to Mango on its Series C preferred shares amounted $1,643 and $1,643,
respectively (or $1.25 per each Series C preferred share). On December 31, 2024 and 2023, accrued and not paid dividends on the Series C preferred shares held by Mango, amounted to
$77 and $64, respectively. As of December 31, 2024 and 2023, Mango held no Series B preferred shares, and held 1,314,792 Series C preferred shares.
For the details of the terms of the Series B and C preferred stock, and the respective accounting treatment followed by the Company, refer to Note 9.
F-19

Table of Contents
PERFORMANCE SHIPPING INC.
Notes to Consolidated Financial Statements
2024, 2023 and 2022
(Expressed in thousands of US Dollars – except for share and per share and warrants data, unless otherwise stated)
5.
Advances for Vessels Under Construction and Other Vessels’ Costs
From March 2023 to April 2024, the Company, through its newly established subsidiaries named Nakaza Shipping Company Inc., Sri Lanka Shipping Company Inc., Guadeloupe Shipping
Company Inc., and Saint Barth Shipping Company Inc. entered into four shipbuilding contracts with Chinese shipyards for the construction of three product/crude oil tankers of
approximately 114,000 dwt each, and one product oil/chemical tanker of approximately 75,000 dwt. The newbuildings (named H1515, H1596, H1597 and H1624) have gross contract prices
of $63,250, $64,845, $64,845 and $56,533, respectively, and the Company expects to take delivery of them gradually from the third quarter 2025 to the first quarter 2027. The shipbuilding
contracts provide that the purchase price of each newbuilding will be paid in five installments, each falling at the contract signing, steel cutting, keel laying, launching, and at the
delivery of each vessel.
As of December 31, 2023, the Company had paid the first installment of $9,488 for Hull 1515, according to the terms of the shipbuilding contract. In addition, interest amounting to $540
and other paid costs amounting to $1,275 were capitalized to the vessels under construction and included in Advances for Vessels Under Construction and Other Vessels’ Costs in the
accompanying consolidated balance sheet as of December 31, 2023. During 2024, the Company paid the first installments for the three Hulls H1596, H1597 and H1624, and the second
installment for the Hulls H1515 and H1596, being $40,743 in aggregate, according to the terms of the shipbuilding contracts, which were capitalized in Advances for Vessels Under
Construction and Other Vessels’ Costs in the accompanying consolidated balance sheet of December 31, 2024, along with interest amounting to $2,435 and other paid costs of $3,989
relating to the four hulls.
 
 December 31, 2024  December 31, 2023 
Pre-delivery installments
 $
50,230 
 $
9,488 
Capitalized costs
  
8,238 
  
1,815 
Total
 $
58,468 
 $
11,303 
6.
Vessels, net
Vessels’ acquisitions and Vessels’ Improvements 
During 2023, the Company capitalized an amount $510, and also an amount of $450 was transferred from other non-current assets, representing costs for the installation of ballast water
treatment system on the vessel “P. Kikuma”. During 2024, the Company capitalized an amount $231 representing costs for the installation of Panama canal fittings on the vessel “P.
Sophia”. The amounts of $231 and $510, which were paid in 2024 and 2023, respectively, are reflected in line “Payments for vessels’ improvements” in the accompanying consolidated
statements of cash flows.
Vessels’ Disposals
In November 2023, the Company, through one of its subsidiaries, entered into a memorandum of agreement to sell the Aframax tanker vessel “P. Kikuma” to unrelated parties for an
aggregate gross price of $39,300. The vessel was delivered to her new owners in December 2023, and the Company received the sale proceeds in accordance with the terms of the
contract. For 2023, the gain on sale of vessels, net of direct to sale expenses, amounted to $15,683 and is reflected in Gain on vessel’s sale in the accompanying consolidated statement of
operations.
F-20

Table of Contents
PERFORMANCE SHIPPING INC.
Notes to Consolidated Financial Statements
2024, 2023 and 2022
(Expressed in thousands of US Dollars – except for share and per share and warrants data, unless otherwise stated)
The amounts of Vessels, net, in the accompanying consolidated balance sheets are analyzed as follows:
 
Vessels’ Cost
  
Accumulated
Depreciation
  
Net Book Value  
Balance, December 31, 2022
 $
254,296 
 $
(17,689)
 $
236,607 
- Vessels’ improvements transferred from other non-current assets
  
450 
  
- 
  
450 
- Vessels’ improvements
  
510 
  
- 
  
510 
- Vessel’s disposals
  
(27,098)
  
5,795 
  
(21,303)
- Depreciation
  
- 
  
(14,156)
  
(14,156)
Balance, December 31, 2023
 $
228,158 
 $
(26,050)
 $
202,108 
- Vessels’ improvements
  
231 
  
- 
  
231 
- Depreciation
  
- 
  
(12,762)
  
(12,762)
Balance, December 31, 2024
 $
228,389 
 $
(38,812)
 $
189,577 
7.
Long-Term Debt
The amount of long-term debt shown in the accompanying consolidated balance sheets is analyzed as follows:
 
 
December 31,
2024
  
Current
  
Non-
current
  
December 31,
  2023
  
Current
  
Non-
current
 
 
  
   
   
   
   
   
 
Nordea Bank secured term loan
 $
15,833 
 $
3,333 
 $
12,500 
 $
19,167 
 $
3,334 
 $
15,833 
Alpha Bank secured term loans
  
31,850 
  
4,200 
  
27,650 
  
36,050 
  
4,200 
  
31,850 
less unamortized deferred financing costs
  
(224)
  
(90)
  
(134)
  
(331)
  
(107)
  
(224)
Total debt, net of deferred financing costs
 $
47,459 
 $
7,443 
 $
40,016 
 $
54,886 
 $
7,427 
 $
47,459 
Secured Term Loans: The Company, through its vessel-owning subsidiaries, has entered into various long term loan agreements with certain financial institutions (as described below)
to partially finance the acquisition cost of its tanker vessels. All loans are repayable in quarterly installments plus one balloon installment per loan agreement to be paid together with the
last installment. The Company’s loans bear variable interest at SOFR plus a fixed margin, which during 2024 ranged from 0.65% to 2.60%. The loan maturities fall due from November 2027
to August 2028, and at each utilization date, arrangement fees ranging from 0.50% to 1.00% were paid. As of December 31, 2024, the term loans were collateralized by four of the
Company’s tanker vessels, whose aggregate net book value was $117,370.
Nordea Bank Abp, Filial i Norge (“Nordea Bank”)
On August 4, 2023, the Company refinanced the existing outstanding loan of the amount of $17,859 with Nordea Bank which was initially entered to partially finance the acquisition of
the vessels “Blue Moon” and “Briolette”, with a revolving credit in an aggregate amount not exceeding $20,000 at any one time. As such, the Company drew down an amount of $2,141.
The new loan has a duration of 5 years from the signing date of the agreement. The Company followed the applicable guidance of ASC 470 and concluded that the specific loan should
be treated as a term loan, however, if a prepayment occurs during the life of the facility, then the accounting guidance for revolving credit facilities would apply.
F-21

Table of Contents
PERFORMANCE SHIPPING INC.
Notes to Consolidated Financial Statements
2024, 2023 and 2022
(Expressed in thousands of US Dollars – except for share and per share and warrants data, unless otherwise stated)
Alpha Bank S.A (“Alpha Bank”)
In November 2022, the Company, through the vessel-owning subsidiary of the vessel “P. Aliki” signed a loan agreement with Alpha Bank, to support the acquisition of the vessel by
providing a secured term loan of up to $18,250. The maximum loan amount was drawn down upon the vessel’s delivery to the Company in November 2022.
Furthermore, in December 2022, the Company, through the vessel-owning subsidiary of the vessel “P. Long Beach” signed a loan agreement with Alpha Bank S.A, to support the
acquisition of the vessel by providing a secured term loan of up to $22,000. The maximum loan amount was drawn down upon the vessel’s delivery to the Company in December 2022.
Finally, in April 2024, the Company agreed with Alpha Bank to amend the interest rate clauses of the two loan agreements discussed above. The Company can, at its option, place in
collateral accounts amounts equal, or less, to each outstanding loan principal for the benefit of lowering the margin of the loans from 2.35% and 2.60% to 0.65%. The amounts placed in
the collateral accounts are not legally restricted as long as the Company has not received from the lenders any notice for an event of default, and may, at the Company’s option, be
withdrawn from the respective collateral accounts on the last day of an interest period with prior written notice to the Lender. Upon such withdrawal, the initial margin (2.35% for the “P.
Long Beach” loan, and 2.60% for the “P. Aliki” loan) shall reinstate on such part of the loan. Accordingly, as of December 31, 2024, the Company had placed in Alpha Bank’s collateral
accounts the aggregate amount of $31,850, being equal to the loans’ outstanding principal amounts, and these cash amounts are included in Cash and cash equivalents in the
accompanying consolidated balance sheets.
All loans are guaranteed by Performance Shipping Inc. and are also secured by first priority mortgages over the financed fleet, first priority assignments of earnings, insurances and of
any charters exceeding durations of certain length of time, pledge over the borrowers’ shares and over their earnings accounts, and vessels’ managers’ undertakings. The loan
agreements also require a minimum hull value of the financed vessels, impose restrictions as to dividend distribution following the occurrence of an event of default and changes in
shareholding, include customary financial covenants and require at all times during the facility period a minimum cash liquidity. As at December 31, 2024 and 2023, the maximum
compensating cash balance required under the Company’s loan agreements amounted to $10,000 and $10,000, respectively, and is included in Cash and cash equivalents in the
accompanying consolidated balance sheets. Also, as at December 31, 2024 and 2023, the restricted cash, being pledged deposits, required under the Company’s loan agreements
amounted to $1,000 and $1,000, respectively, and is included in Restricted cash, non-current in the accompanying consolidated balance sheets. As at December 31, 2024 and 2023, the
Company was in compliance with all of its loan covenants.
The weighted average interest rate of the Company’s bank loans for 2024, 2023 and 2022 was 6.91%, 7.60% and 4.85%, respectively.
For 2024, 2023 and 2022, interest expense on long-term bank debt amounted to $3,614, $9,039 and $3,191 and is included in Interest and finance costs in the accompanying consolidated
statement of operations. Accrued interest on bank debt as of December 31, 2024 and 2023, amounted to $380 and $294, respectively, and is included in Accrued liabilities in the
accompanying consolidated balance sheets.
As at December 31, 2024, the maturities of the drawn portions of the debt facilities described above, are as follows:
 
 Principal Repayment 
Year 1
 $
7,533 
Year 2
  
7,533 
Year 3
  
26,783 
Year 4
  
5,834 
Total  $
47,683 
F-22

Table of Contents
PERFORMANCE SHIPPING INC.
Notes to Consolidated Financial Statements
2024, 2023 and 2022
(Expressed in thousands of US Dollars – except for share and per share and warrants data, unless otherwise stated)
8.
Commitments and Contingencies
(a)  Various claims, suits, and complaints, including those involving government regulations and product liability, arise in the ordinary course of the shipping business. In addition,
losses may arise from disputes with charterers, agents, insurance and other claims with suppliers relating to the operations of the Company’s vessels. Currently, management is not
aware of any claims or contingent liabilities, which should be disclosed, or for which a provision should be established and has not in the accompanying consolidated financial
statements.
The Company accrues for the cost of environmental liabilities when management becomes aware that a liability is probable and is able to reasonably estimate the probable exposure.
Currently, management is not aware of any such claims or contingent liabilities, which should be disclosed, or for which a provision should be established in the accompanying
consolidated financial statements.
The Company’s vessels are covered for pollution in the amount of $1 billion per vessel per incident, by the protection and indemnity association (“P&I Association”) in which the
Company’s vessels are entered. The Company’s vessels are subject to calls payable to their P&I Association and may be subject to supplemental calls which are based on estimates of
premium income and anticipated and paid claims. Such estimates are adjusted each year by the Board of Directors of the P&I Association until the closing of the relevant policy year,
which generally occurs within three years from the end of the policy year.  Supplemental calls, if any, are expensed when they are announced and according to the period they relate to.
The Company is not aware of any supplemental calls outstanding in respect of any policy year.
(b)  As of December 31, 2024, the Company has entered into four shipbuilding contracts for the construction of four product/crude oil tankers (Note 5). As of December 31, 2024, the
remaining aggregate instalments under the contracts for the construction of Hulls H1515, H1596, H1597 and H1624 amount to $199,243.
(c)  As of December 31, 2024, part of the Company’s fleet was operating under time-charters. The minimum contractual annual charter revenues, net of related commissions to third
parties (including related parties), to be generated from the existing as of December 31, 2024, non-cancelable time charter contract for the operating fleet are estimated at $51,724 until
December 31, 2025, and at $12,041 until December 31, 2026.
(d)  The Company, its Chief Executive Officer, Chairperson of the Board, five former directors of the Company, and two entities affiliated with the Company’s Chief Executive Officer and
Chairperson of the Board were named as defendants in a lawsuit commenced on October 27, 2023 in New York State Supreme Court, County of New York, by the attorneys of a purported
shareholder of the Company, Sphinx Investment Corp., the plaintiff. The complaint alleged, among other things, violations of fiduciary duties by the named defendants in connection
with an exchange offer commenced by the Company in December 2021.  The plaintiff purported to seek, among other things, a declaration that the Series C Preferred Shares held by the
defendants are void and not entitled to vote; an order cancelling such Series C Preferred Shares, or, in the alternative, an order requiring the Company to issue additional Series C
Preferred Shares to non-defendant common stockholders to put them in the same economic, voting, governance and other position as they would have been in had the Series C Preferred
Shares issued to the defendants been cancelled; and unspecified damages in an amount, if any, to be proven at trial. In January 2024, the defendants filed motions to dismiss the lawsuit.
In August 2024, the Supreme Court of the State of New York granted the Company’s motions to dismiss the litigation filed by Sphinx on October 27, 2023, on the basis that New York
lacked personal jurisdiction over the defendants. Subsequently, in August 2024, Sphinx initiated legal proceedings in the High Court of the Republic of the Marshall Islands against the
same defendants that had been named in the New York lawsuit. The complaint filed in the High Court is substantially similar to the complaint previously filed in New York. The
defendants filed motions to dismiss the complaint in the High Court of the Republic of the Marshall Islands.  The parties have completed briefing on those motions to dismiss.  The
Company, although it cannot predict its outcome, believes that the lawsuit is without merit and will vigorously defend against the lawsuit.
F-23

Table of Contents
PERFORMANCE SHIPPING INC.
Notes to Consolidated Financial Statements
2024, 2023 and 2022
(Expressed in thousands of US Dollars – except for share and per share and warrants data, unless otherwise stated)
9.
Changes in Capital Accounts
(a)  Company’s Preferred Stock: As of December 31, 2024 and 2023, the Company’s authorized preferred stock consists of 25,000,000 shares of preferred stock, par value $0.01 per share.
Of these preferred shares, 1,250,000 have been designated Series A Preferred Shares, 1,200,000 have been designated Series B Preferred Shares, and 1,587,314 have been designated as
Series C Preferred Shares.
As of December 31, 2024, and 2023, 50,726 Series B preferred shares (of liquidation preference $1,268) and 1,423,912 and 1,428,372,  Series C Preferred Shares (of liquidation preference
$35,598 and $35,709), respectively, were issued and outstanding. As of December 31, 2024, and 2023, Aliki Paliou held through Mango (Note 4) 1,314,792 Series C Preferred Shares and nil
Series B Preferred Shares, and Andreas Michalopoulos held 56,342 Series C Preferred Shares and nil Series B Preferred Shares.
The material terms of the Series B Preferred Shares are as follows: 1) Dividends: The Company pays a 4.00% annual dividend on the Series B Preferred Shares, on a quarterly basis, either
in cash, or, at the Company’s option, through the issuance of additional common shares, valued at the volume-weighted average price of the common stock for the 10 trading days prior
to the dividend payment date; 2) Voting Rights: Each Series B Preferred Share has no voting rights; 3) Conversion Rights: Each Series B Preferred Share was convertible at the option of
the holder during the applicable conversion period, which expired on March 15, 2023, and for additional cash consideration of $7.50 per converted Series B Preferred Share, into two
Series C Preferred Shares (see description below); 4) Liquidation: Each Series B Preferred Share has a fixed liquidation preference of $25.00 per share; 5) Redemption: The Series B
Preferred Shares are not subject to mandatory redemption or to any sinking fund requirements, and will be redeemable at the Company’s option, at any time, on or after the date that is
the date immediately following the 15-month anniversary of the issuance date, at $25.00 per share plus accumulated and unpaid dividends thereon to and including the date of
redemption. Also, upon the occurrence of a liquidation event, holders of Series B Preferred Shares shall be entitled to receive out liquidating distribution or payment in full redemption of
such Series B Preferred Shares in an amount equal to $25.00, plus the amount of any accumulated and unpaid dividends thereon; 6) Rank: Finally, the Series B Preferred Shares rank
senior to common shares with respect to dividend distributions and distributions upon any liquidation, winding up or dissolution of the Company.
The material terms of the Series C Preferred Shares are as follows: 1) Dividends: Dividends on each Series C Preferred Share shall be cumulative and shall accrue at a rate equal to 5.00%
per annum of the Series C liquidation preference per Series C Preferred Share from the dividend payment date immediately preceding issuance, and can be paid either in cash, or, at the
Company’s option, through the issuance of additional common shares; 2) Voting Rights: Each holder of Series C Preferred Shares is entitled, from the date of issuance of the Series C
Preferred Shares, to a number of votes equal to the number of Common Shares into which such holder’s Series C Preferred Shares would then be convertible (notwithstanding the
requirement that the Series C Preferred Shares are convertible only after six months following the Original Issuance Date), multiplied by 10. The holders of Series C Preferred Shares shall
vote together as one class with the holders of Common Shares on all matters submitted to a vote of the Company’s shareholders (with certain exceptions); 3) Conversion Rights: The
Series C Preferred Shares are convertible into common shares (i) at the option of the holder: in whole or in part, at any time on or after the date that is the date immediately following the
six-month anniversary of the Original Issuance Date at a rate equal to the Series C liquidation preference, plus the amount of any accrued and unpaid dividends thereon to and including
the date of conversion, divided by an initial conversion price of $0.50, subject to adjustment from time to time, or (ii) mandatorily: on any date within the Series C Conversion Period, 
being any time on or after the date that is the date immediately following the six-month anniversary of October 17, 2022 (or “the Original Issuance Date”), on which less than 25% of the
authorized number of Series C Preferred Shares are outstanding and the volume-weighted average price of the common shares for the 10 trading days preceding such date exceeds 130%
of the conversion price in effect on such date, the Company may elect that all, or a portion of the outstanding Series C Preferred Shares shall mandatorily convert into common shares at
a rate equal to the Series C liquidation preference, plus the amount of any accrued and unpaid dividends thereon to and including such date, divided by the conversion price.  The
conversion price is subject to adjustment for any stock splits, reverse stock splits or stock dividends, and shall also be adjusted to the lowest price of issuance of common stock by the
Company for any registered offering following the Original Issuance Date, provided that such adjusted conversion price shall not be less than $0.50 (this conversion price adjustment
clause is further analyzed later); 4) Liquidation: Each Series C Preferred Share has a fixed liquidation preference of $25.00 per share; 5) Redemption: The Series C Preferred Shares are not
subject to mandatory redemption, and will be redeemable at the Company’s option, at any time, on or after the date that is the date immediately following the 15-month anniversary of the
issuance date, in whole or in part, at $25.00 per share plus accumulated and unpaid dividends thereon to and including the date of redemption. The Company shall effect any such
redemption by paying a) cash or, b) at the Company’s election, and provided on the date of the redemption notice less than 25% of the authorized number of Series C are outstanding,
shares of common stock valued at the volume-weighted average price of common stock for the last 10 trading days prior to the redemption date. Also, upon the occurrence of a
liquidation event, holders of Series C Preferred Shares shall be entitled to receive out liquidating distribution or payment in full redemption of such Series C Preferred Shares in an amount
equal to $25.00, plus the amount of any accumulated and unpaid dividends thereon; 6) Rank: The Series C Preferred Shares rank senior to common shares, and on a parity with the Series
B Preferred Stock, with respect to dividend distributions and distributions upon any liquidation.
F-24

Table of Contents
PERFORMANCE SHIPPING INC.
Notes to Consolidated Financial Statements
2024, 2023 and 2022
(Expressed in thousands of US Dollars – except for share and per share and warrants data, unless otherwise stated)
During 2023, a number of 85,535 Series B preferred shares were converted to 171,070 Series C preferred shares, and a number of  12,224  Series C preferred shares were converted to
225,447 common shares. During 2024, a number of 4,460 Series C preferred shares were converted to 82,482 common shares.
For 2024 and 2023, declared and paid dividends on Series B preferred shares amounted to $52 and $55 (or $1.00 per each Series B preferred share), respectively. As of December 31, 2024
and 2023, accrued and not paid dividends on the Series B preferred shares amounted to $2 and $2, respectively.
For 2024 and 2023, declared and paid dividends on the Series C preferred shares amounted to $1,781 and $1,834 (or $1.25 per each Series C preferred share), respectively, out of which
$1,643 and $1,643, respectively, were paid to Mango (Note 4). As of December 31, 2024 and 2023, accrued and not paid dividends on the Series C preferred shares, amounted to $84 and
$74, respectively.
The Company, when assessing the accounting of the Series B and Series C preferred stock, has taken into consideration the provisions of ASC 480 “Distinguishing Liabilities from
Equity” and ASC 815 “Derivatives and Hedging” and determined that the Series B and Series C preferred shares should be classified as permanent equity rather than temporary equity or
liability.
The Series B preferred stock was measured as of the date of closing of the tender offer, being January 27, 2022, at fair value on a non-recurring basis. Its fair value was determined
through Level 3 inputs of the fair value hierarchy as determined by management and amounted to $18,030. The fair value of the preferred stock weighted the probabilities: a) that the
Series B are not further exchanged for Preferred C shares, and b) that the Series B are converted to Series C on the applicable conversion date. The fair value of the conversion option
embedded in the Series C Preferred Shares was estimated using the Black & Scholes model. Moreover, the Company’s valuation used the following assumptions: (a) stated dividend
yields for the Series B preferred stock and Series C preferred stock, (b) cost of equity of 11.07%, based on the CAPM theory; (c) expected volatility of 77%, (d) risk free rate of 1.66%
determined by management using the applicable 5-year treasury yield as of the measurement date, (e) market value of common stock of $3.09 (which was the current market price as of the
date of the fair value measurement) and (f) expected life of convertibility option of the Series C preferred shares to common shares of 4 years. The Company applied moneyness scenarios
and determined the aforementioned assumptions of volatility and expected life of the convertibility option, which are considered highly interdependent. The Company’s valuation
determined that the exchange resulted in an excess value of the Series B preferred shares of $9,271, or $11.68 per preferred share, as compared to the fair value of the common shares
exchanged, that was transferred from the common holders to the preferred holders on the measurement date, and that that value represented a deemed dividend to the preferred holders
that should be deducted from the net income to arrive to the net income available to common stockholders (Note 11). The fair value of the common shares exchanged on the measurement
date of $8,759 was determined through Level 1 inputs of the fair value hierarchy (quoted market price on the date of the exchange).
The Series C preferred stock was measured as of the date of their issuance, being October 17, 2022, at fair value on a non-recurring basis. Its fair value was determined through Level 3
inputs of the fair value hierarchy as determined by management and amounted to $26,809. The fair value of the preferred stock was estimated as the sum of two components: a) the
“straight” preferred stock component, using the discounted cash flow model, and b) the embedded option component, using the Black & Scholes model. For this assessment, the
Company’s valuation used the following assumptions: (a) stated dividend yield for the Series C preferred stock, (b) cost of equity of 10.38%, based on the CAPM theory; (c) expected
volatility of 89%, (d) risk free rate of 4.23% determined by management using the applicable 5-year treasury yield as of the measurement date, (e) market value of common stock of $0.31
(which was the current market price as of the date of the fair value measurement), and (f) expected life of  convertibility option of the Series C preferred shares to common shares of 4
years. The Company applied moneyness scenarios and determined the aforementioned assumptions of volatility and expected life of the convertibility option, which are considered
highly interdependent. The Company’s valuation determined that the transaction resulted in an excess value of the Series C preferred shares of $6,944, or $5.28 per preferred share, as
compared to the sum of the amount of $4,930 (being the carrying value of the amount applied by the Company as a prepayment to the loan facility with Mango) and the carrying value of
the Series B preferred shares exchanged, that was transferred from the preferred Series B holders to the preferred Series C holders on the measurement date, and that that value
represented a deemed dividend to the preferred Series C holders that should be deducted from the net income to arrive to the net income available to common stockholders (Note 11).
The carrying value of the Series B preferred shares exchanged by Mango on the measurement date was $14,935.
F-25

Table of Contents
PERFORMANCE SHIPPING INC.
Notes to Consolidated Financial Statements
2024, 2023 and 2022
(Expressed in thousands of US Dollars – except for share and per share and warrants data, unless otherwise stated)
As discussed above, the conversion price adjustment clause of the Series C Preferred Shares provides for a reduction in the initial conversion price in case, any of the following, among
others, happens: a) upon stock dividend, split, or reverse stock split, or b) in case the Company issues equity securities at prices below the conversion price of the Series C preferred
shares then in effect. The Company concluded that the feature mentioned in b) above provides protection to investors in promising to give each Series C holder investor the lowest
pricing available to any other investors, rather than protecting against true economic dilution, and accordingly, this feature constitutes a down round feature. From October 17, 2022, to
January 26, 2023, because of the issuance of common shares through the ATM offering (as discussed below), the conversion price was eight times adjusted, and was gradually reduced
to $2.60, and finally, on March 1, 2023, due to the registered direct offering (discussed below) the conversion price was further reduced to $1.36.  To measure the effect of the down-round
feature the Company performed fair value measurements as determined through Level 3 inputs of the fair value hierarchy. As such, the fair value of the preferred stock was estimated as
the sum of two components: a) the “straight” preferred stock component, using the discounted cash flow model, and b) the embedded option component, using the Black & Scholes
model. For this assessment, the Company’s valuation used the following assumptions: (a) stated dividend yield for the Series C preferred stock, (b) cost of equity based on the CAPM
theory; (c) expected volatility, (d) risk free rate determined by management using the applicable 5-year treasury yield as of the measurement date, (e) market value of common stock
(which was the current market price as of the date of the fair value measurement), and (f) expected life of  convertibility option of the Series C preferred shares to common shares.
For this assessment the Company updated the Level 3 inputs as follows: (a) expected volatility in a range of 86.83% to 118.14% for the valuation of the instrument on the triggering dates,
and (b) expected life of convertibility option of the Series C preferred shares to common shares from 1 to 5 years. The Company applied moneyness scenarios and determined the
aforementioned assumptions of volatility and expected life of the convertibility option, which are considered highly interdependent. In this respect, the Company determined an
aggregate measurement of the down round feature of $9,809, which was accounted for as a deemed dividend that should be deducted from the net income to arrive to the net income
available to common stockholders (Note 11).
The fair value of the Series C Preferred Shares that were assessed on the dates of triggering of the down-round feature as discussed above, were determined through Level 3 of the fair
value hierarchy as defined in FASB guidance for Fair Value Measurements, as they are derived by using significant unobservable inputs. Determining the fair value of the preferred stock
requires management to make judgments about the valuation methodologies, including the unobservable inputs and other assumptions and estimates, which are significant in the
valuation of the preferred stock.
(b)  At The Market (“ATM”) Offering: On March 5, 2021, the Company entered into an At The Market Offering Agreement with H.C. Wainwright & Co., LLC (or the “Wainwright
ATM”), as sales agent, pursuant to which the Company could offer and sell, from time to time, up to an aggregate of $5,900 of its common shares, par value $0.01 per share. During 2022,
a total of 35,128 common shares were issued as part of the Company’s Wainwright ATM offering, and the net proceeds received, after deducting underwriting commissions and other
expenses, amounted to $1,338. The Company terminated the specific ATM agreement effective August 23, 2022.
Furthermore, on December 9, 2022, the Company entered into an At The Market Offering Agreement with Virtu Americas LLC (or the “Virtu ATM”), as sales agent, pursuant to which the
Company could offer and sell, from time to time, up to an aggregate of $30,000 of its common shares, par value $0.01 per share. During 2022, a total of 140,379 common shares were issued
as part of the Company’s Virtu ATM offering, and the net proceeds received, after deducting underwriting commissions and other expenses, amounted to $450. From January 1, 2023 and
up to February 27, 2023, when the Company terminated its Virtu ATM agreement, a total of 224,817 shares of the Company’s common stock were issued as part of the Company’s ATM
offering, and the net proceeds received, after deducting underwriting commissions and other expenses, amounted to $673.
F-26

Table of Contents
PERFORMANCE SHIPPING INC.
Notes to Consolidated Financial Statements
2024, 2023 and 2022
(Expressed in thousands of US Dollars – except for share and per share and warrants data, unless otherwise stated)
(c)  Equity Offerings of 2022: On June 1, 2022, the Company completed its underwritten public offering of 508,000 units at a price of $15.75 per unit. Each unit consists of one common
share (or pre-funded warrant in lieu thereof) and one Class A warrant (the “June 2022 Warrants”) to purchase one common share and was immediately separated upon issuance. Each
Class A warrant was immediately exercisable for one common share at an exercise price of $15.75 per share and has a maturity of five years from issuance and can be either physically
settled or through the means of a cashless exercise. The Company may at any time during the term of its warrants reduce the then current exercise price of each warrant to any amount
and for any period of time deemed appropriate by the board of directors of the Company, subject to terms disclosed in each warrants’ agreements. The warrants also contain a cashless
exercise provision, whereby if at the time of exercise, there is no effective registration statement, then the warrants can be exercised by means of a cashless exercise as disclosed in each
warrants’ agreements. The Class A warrants and the pre-funded warrants do not have any voting, dividend or participation rights, nor do they have any liquidation preferences. The
Company had granted the underwriters a 45-day option to purchase up to an additional 76,200 common shares and/or prefunded warrants and/or 76,200 Class A warrants, at the public
offering price, less underwriting discounts and commissions. The offering closed on June 1, 2022, and the Company received net proceeds, after underwriting discounts and
commissions and expenses, of $7,126 including the partial exercise of the over-allotment option by the underwriters of 59,366 Class A Warrants to purchase up to 59,366 common shares
at $0.01 per share.
Furthermore, on July 18, 2022, the Company completed a direct offering of 1,133,333 common shares and warrants to purchase up to 1,133,333 common shares (the “July 2022 Warrants”)
at a concurrent private placement. The combined effective purchase price for one common share and one warrant to purchase one common share was $5.25. Each warrant is immediately
exercisable for one common share at an initial exercise price of $5.25 per share, and will expire in five and a half years from issuance.
The July 2022 Warrants have similar terms to the June Warrants, with the only significant difference being the existence of an exercise price adjustment clause (discussed below), which
was assessed by the Company as a down round feature. From January 11, 2023, to January 26, 2023, the July 2022 Warrant’s exercise price was seven times adjusted because of the
issuance of common shares through the ATM offering,  and was gradually reduced to $2.60, while on March 1, 2023, due to the registered direct offering (discussed below) their exercise
price was further reduced to their floor price of $1.65.
Finally, on August 12, 2022, the Company entered into a securities purchase agreement with certain unaffiliated institutional investors to purchase 2,222,222 of its common shares and
warrants to purchase 2,222,222 common shares (the “August 2022 Warrants”) at a price of $6.75 per common share and accompanying warrant in a registered direct offering. The August
Warrants are immediately exercisable, expire five years from the date of issuance, and had an initial exercise price of $6.75 per common share.
The August 2022 Warrants have similar terms to the July 2022 Warrants, including the exercise price adjustment clause that constitutes a down-round feature. From January 11, 2023, to
January 26, 2023, the August 2022 Warrant’s exercise price was seven times adjusted because of the issuance of common shares through the ATM offering, and was gradually reduced
to $2.60, while on March 1, 2023, due to the registered direct offering (discussed below) their exercise price was further reduced to their floor price of $1.65.
The exercise price adjustment clause of the July 2022 and August 2022 Warrants provides for a reduction in the warrants’ initial exercise price in case the Company, subsequent to the
warrants issuance: a) issues equity securities at prices below the initial exercise price of the July 2022 and August 2022 Warrants, or b) the Company’s stock trades below the July 2022
and August 2022 Warrants’ exercise price during any of the five trading sessions following the issuance of such equity securities. The Company concluded that the specific feature
provides protection to investors in promising to give each warrant holder investor the lowest pricing available to any other investors, rather than protecting against true economic
dilution, and accordingly, this feature constitutes a down round feature. Following the ATM offering with Virtu (discussed previously) and the registered Direct Offering of March 2023
(discussed below) during which common shares were issued, the down round features of the July 2022 and August 2022 Warrants were triggered. As such in 2023, the down round
features were triggered on eight different dates, leading to a combined effect of an approximate value of $256 and $533, for the July 2022 and the August 2022 Warrants, respectively,
which were accounted for as deemed dividends (Note 11). The deemed dividends resulting from the re-valuation of the July 2022 and August 2022 Warrants are deducted from the net
income to arrive to the net income available to common stockholders (Note 11). The fair values of the warrants, that were assessed on the dates of triggering of the down-round features
as discussed previously, were determined through Level 3 of the fair value hierarchy as defined in FASB guidance for Fair Value Measurements, as they are derived by using significant
unobservable inputs such as historical volatility.
F-27

Table of Contents
PERFORMANCE SHIPPING INC.
Notes to Consolidated Financial Statements
2024, 2023 and 2022
(Expressed in thousands of US Dollars – except for share and per share and warrants data, unless otherwise stated)
As of December 31, 2023, the Company had 12,279,676 common shares outstanding, 567,366 of the June 2022 warrants were outstanding, and also 1,033,333 of the July 2022 and 2,122,222
of the August 2022 warrants remained outstanding. As of December 31, 2024, the Company had 12,432,158 common shares outstanding, all of the June 2022 warrants were outstanding,
and also 1,033,333 of the July 2022 and 2,122,222 of the August 2022 warrants remained outstanding.
(d)  Registered Direct Offering of March 2023: On March 3, 2023, the Company completed a registered direct offering of (i) 5,556,000 of its common shares, $0.01 par value per share, (ii)
Series A warrants to purchase up to 3,611,400 common shares and (iii) Series B warrants to purchase up to 4,167,000 common shares directly to several institutional investors. Each Series
A warrant and each Series B warrant are immediately exercisable upon issuance for one common share at an exercise price of $2.25 per share and expire five years after the issuance date.
Both Series A and Series B warrants have similar terms with the Class A Warrants, with the only significant difference being the “alternative cashless exercise feature” included in the
Series A warrants. In particular, each Series A warrant could become exchangeable for one common share beginning on the earlier of 30 days following the closing of the Offering and the
date on which the cumulative trading volume of the Company’s common shares following the date of entry into a securities purchase agreement with the purchasers in this offering
exceeds 15,000,000 shares. The alternative cashless exercise provisions were met on March 7, 2023.  The Company concluded that the Series B warrants met the criteria for equity
classification while the alternative cashless exercise of the Series A warrants, precludes the Series A warrants from being considered indexed to the Company’s stock. In this respect, the
Company recorded the Series A warrants as non-current liabilities under Fair value of warrants’ liability on the accompanying consolidated balance sheet, with subsequent changes in
their respective fair values recognized in line “Changes in fair value of warrants’ liability” in the accompanying consolidated statement of operations. Estimating fair values of liability-
classified financial instruments requires the development of estimates that may, and are likely to, change over the duration of the instrument with related changes in internal and external
market factors. In addition, option-based techniques are highly volatile and sensitive to changes in the trading market price of the Company’s common stock. Because liability-classified
financial instruments are carried at fair value, the Company’s financial results will reflect the volatility and changes in these estimates and assumptions. At closing, the Company received
proceeds of $11,438, net of placement agent’s fees and expenses, which is separately presented in line Issuance of units, common stock and warrants, net of issuance costs in the
accompanying consolidated cash flows. As of the date the Company completed the registered direct offering, the Company valued the Series A warrants using the Black-Scholes model
with a fair value of $1.11 per Series A Warrant or $4,009 in aggregate, while the remaining gross proceeds of the offering amounting to $8,492 (net proceeds of $7,769) where allocated to
common shares and Series B warrants with the residual value method. Issuance costs of $340 were expensed immediately in a prorated manner, taking into account the portion of the
liability recorded at inception included in Interest and finance costs in the accompanying consolidated statements of operations.
During 2023, the Company received notices of alternative cashless exercises for 3,597,100 Series A warrants for equal amount of common shares and marked the warrants to their fair
value at the settlement date and then settling the warrant liability. The outstanding Series A warrants as of December 31, 2024 and 2023, were 14,300 and 14,300, respectively. The value of
the outstanding Series A warrants as of December 31, 2024 and 2023 were $27 and $32, respectively, and are reflected in “Fair value of warrant’s liability” in the accompanying
consolidated balance sheets.
During 2024, 70,000 Series B warrants were exercised, and the Company received proceeds of $157. The outstanding Series B warrants as of December 31, 2023, and December 31, 2024,
were 4,167,000 and 4,097,000, respectively.
As of December 31, 2023 and December 31, 2024 the Company re-valued the outstanding Series A warrants. For 2023, a gain of $561 resulting from the change in the fair value of the
liability for the unexercised warrants and the settlements of the liability throughout the period, and for 2024 a gain of $6 representing changes in the fair value of the liability for the
unexercised warrants are presented in “Change in fair value of the warrant’s liability” in the accompanying consolidated statements of operations. The Series A warrants fair value as of
settlement and measurement dates per discussion above, was determined through Level 2 inputs of the fair value hierarchy as determined by management. The fair value of the Series A
warrants weighted the probability that the Series A warrants are alternatively cashless exercised for common shares, while the Black & Scholes model was applied under the following
assumptions: (a) expected volatility (d) risk free rate (e) market value of common stock of, which was the current market price as of the date of each fair value measurement. Fair value
sensitivity is driven by the stock price at the time of valuation and is limited in terms of the other parameters (Note 13).
  
F-28

Table of Contents
PERFORMANCE SHIPPING INC.
Notes to Consolidated Financial Statements
2024, 2023 and 2022
(Expressed in thousands of US Dollars – except for share and per share and warrants data, unless otherwise stated)
(e)  Share Buy-Back Plan: In April 2023, the Company’s Board of Directors authorized a share repurchase program (the “April 2023 Repurchase Plan”) to purchase up to an aggregate of
$2,000 of the Company’s common shares. Under the April 2023 Repurchase Plan, the Company repurchased in 2023 a total of 2,222,936 common shares for total  gross proceeds of $2,000,
successfully completing the April 2023 Repurchase Plan in the third quarter of 2023. In August 2023, the Company’s Board of Directors further authorized a new share repurchase plan
(the “August 2023 Repurchase Plan”) to repurchase up to $2,000 of the Company’s outstanding common shares. Under the August 2023 Repurchase Plan, the Company re-purchased
327,100 common shares for total gross proceeds of $723. In aggregate, the Company’s net proceeds for both the April 2023 and the August 2023 Repurchase Plans were $2,749.
(f)  Compensation Cost on Stock Option Awards: On January 1, 2021, the Company granted to its Chief Financial Officer stock options to purchase 8,000 of the Company’s common
shares as share-based remuneration. The stock options, which were granted pursuant to, and in accordance with, the Company’s Equity Incentive Plan, have been approved by the
Company’s board of directors, and have a term of five years. The exercise prices of the options are as follows: 2,000 shares for an exercise price of $150.00 per share, 1,667 shares for an
exercise price of $187.50 per share, 1,333 shares for an exercise price of $225.00 per share, 1,000 shares for an exercise price of $300.00 per share, 1,000 shares for an exercise price of
$375.00 per share, and 1,000 shares for an exercise price of $450.00 per share. Until December 31, 2024, 8,000 options were outstanding.
(g)  Compensation Cost on Restricted Common Stock: On December 30, 2020, the Company’s Board of Directors approved 4,481 restricted common shares, whose fair value was $320,
to be issued on the same date as an award to the Company’s directors. One fourth of the shares vested on December 30, 2020, and the remainder three fourths vested ratably over three
years from the issuance date. During 2023 and 2022, the aggregate compensation cost on restricted common stock amounted to $52 and $107 and is included in General and
administrative expenses in the accompanying consolidated statements of operations. As at December 31, 2024 and 2023, 31,441 restricted common shares remained reserved for issuance
under the Plan.
During 2024, 2023 and 2022, the movement of the restricted stock cost was as follows:
 
 Number of Shares  
Weighted Average
Grant Date Price  
Outstanding at December 31, 2021
  
2,240 
 $
71.40 
Granted
  
- 
  
- 
Vested
  
(1,890)
  
71.40 
Forfeited or expired
  
- 
  
- 
Outstanding at December 31, 2022
  
350 
 $
71.40 
Granted
  
- 
  
- 
Vested
  
(350)
  
71.40 
Forfeited or expired
  
- 
  
- 
Outstanding at December 31, 2023
  
- 
 $
- 
Granted
  
- 
  
- 
Vested
  
- 
  
- 
Forfeited or expired
  
- 
  
- 
Outstanding at December 31, 2024
  
- 
 $
- 
F-29

Table of Contents
PERFORMANCE SHIPPING INC.
Notes to Consolidated Financial Statements
2024, 2023 and 2022
(Expressed in thousands of US Dollars – except for share and per share and warrants data, unless otherwise stated)
10. Interest and Finance Costs
The amounts in the accompanying consolidated statements of operations are analyzed as follows:
 
 
2024
  
2023
  
2022
 
Interest expense on bank debt (Note 7)
 $
1,179 
 $
8,499 
 $
3,191 
Interest expense and other fees on related party debt (Note 4)
  
- 
  
- 
  
277 
Amortization of deferred financing costs on bank and related party debt
  
107 
  
244 
  
402 
Other financial expenses
  
- 
  
759 
  
- 
Commitment fees and other
  
59 
  
96 
  
96 
Total
 $
1,345 
 $
9,598 
 $
3,966 
11. Earnings per Share
All common shares issued (including the restricted shares issued under the equity incentive plan, or else) are the Company’s common stock and have equal rights to vote and participate
in dividends, subject to forfeiture provisions set forth in the applicable award agreements. Unvested shares granted under the Company’s incentive plan, or else, are entitled to receive
dividends which are not refundable, even if such shares are forfeited, and therefore are considered participating securities for basic and diluted earnings per share calculation purposes.
For 2024, 2023 and 2022, the Company paid aggregate dividends to its Series B and Series C preferred stockholders amounting to $1,833, $1,889 and $941, respectively. The calculation of
basic earnings per share does not consider the non-vested shares as outstanding until the time-based vesting restrictions have lapsed. The dilutive effect of share-based compensation
arrangements and for unexercised warrants that are in-the money, is computed using the treasury stock method, which assumes that the “proceeds” upon exercise of these awards or
warrants are used to purchase common shares at the average market price for the period, while the dilutive effect of convertible securities is computed using the “if converted” method.
In particular, for the preferred convertible stock that requires the payment of cash by the holder upon conversion, the proceeds assumed to be received shall be assumed to be applied to
purchase common stock under the treasury stock method and the convertible security shall be assumed to be converted under the “if-converted” method.
The computation of diluted earnings per share for 2023, reflects i) the potential dilution from conversion of outstanding preferred convertible Series B and C stock, calculated with the “if
converted” method which resulted in 24,596,069 shares, and ii) the potential dilution from the exercise of warrants Series A (either exercised during the period end or outstanding) using
the treasury stock method which resulted in 452,286 shares and the deduction of $561, related to the changes in fair value of Series A warrants’ liability, from net income attributable to
common stockholders. For 2024 the computation of diluted earnings per share reflects: i) the potential dilution from conversion of outstanding preferred convertible Series C stock (as
conversion from Series B preferred stock to Series C preferred stock was not applicable anymore) calculated with the “if converted” method and resulted in 26,278,338 shares, and ii) the
potential dilution from the exercise of the July and August warrants and the Series A warrants (either exercised during the period end, or outstanding) using the treasury stock method
which resulted in 558,109 shares, and the deduction of $6, related to the changes in fair value of Series A warrants’ liability, from net income attributable to common stockholders.
Securities that could potentially dilute basic earnings per share in the future that were not included in the computation of diluted earnings per share, because to do so would have anti-
dilutive effect, for 2023,  are any incremental shares resulting from the non-vested restricted share awards, all outstanding warrants considered to be out of the money (Class A Warrants,
July Warrants, August Warrants and Series B Warrants) and the non-exercised stock options calculated with the treasury stock method. For 2024, securities that could potentially dilute
basic earnings per share in the future that were not included in the computation of diluted earnings per share, because to do so would have anti-dilutive effect, are all outstanding
warrants considered to be out of the money (Class A Warrants and Series B Warrants) and the non-exercised stock options calculated with the treasury stock method.
F-30

Table of Contents
PERFORMANCE SHIPPING INC.
Notes to Consolidated Financial Statements
2024, 2023 and 2022
(Expressed in thousands of US Dollars – except for share and per share and warrants data, unless otherwise stated)
For 2023, net income is significantly adjusted by a deemed dividend to the Series C preferred stockholders due to triggering of a down-round feature of $9,809 (Note 9),  by a deemed
dividend to the holders of the July and August 2022 Warrants of $789 as a result of triggering of a down-round feature (Note 9), and also by an amount of $1,889 representing dividends
on Series B and Series C Preferred Stock (Note 9), to arrive at the net income attributable to common equity holders. For 2024, net income is adjusted by an amount of $1,833 representing
dividends on Series B and Series C Preferred Stock (Note 9), to arrive at the net income attributable to common equity holders.
The following table sets forth the computation for basic and diluted earnings per share:
 
 
2024
  
2023
  
2022
 
 
 
Basic EPS
  
Diluted EPS
  
Basic EPS
  
Diluted EPS
  
Basic EPS
  
Diluted EPS
 
Net income
 $
43,730 
 $
43,730 
 $
69,413 
 $
69,413 
 $
36,300 
 $
36,300 
less income allocated to participating securities
  
- 
  
- 
  
(2)
  
(2)
  
(6)
  
(2)
less deemed dividends on Series B preferred stock
upon exchange of common stock
  
- 
  
- 
  
- 
  
- 
  
(9,271)
  
(9,271)
less deemed dividends on Series C preferred stock
upon exchange of Series B preferred stock and re-
acquisition of loan due to a related party
  
- 
  
- 
  
- 
  
- 
  
(6,944)
  
- 
less deemed dividend to the Series C preferred
stockholders due to triggering of a down-round
feature
  
- 
  
- 
  
(9,809)
  
- 
  
(5,930)
  
(5,930)
less deemed dividend to the July and August
warrants’ holders due to triggering of a down-
round feature
  
- 
  
- 
  
(789)
  
(789)
  
(1,116)
  
(1,116)
less dividends on preferred stock
  
(1,833)
  
- 
  
(1,889)
  
(40)
  
(1,030)
  
(493)
less changes in value of warrants’ liability
  
- 
  
(6)
  
- 
  
(561)
  
- 
  
- 
Net income attributable to common stockholders
 $
41,897 
 $
43,724 
 $
56,924 
 $
68,021 
 $
12,003 
 $
19,488 
 
  
  
  
  
  
  
  
  
  
  
  
  
Weighted average number of common shares, basic   
12,365,418 
  
12,365,418 
  
10,491,316 
  
10,491,316 
  
1,850,072 
  
1,850,072 
Effect of dilutive shares
  
- 
  
26,836,447 
  
- 
  
25,048,355 
  
- 
  
4,597,638 
Weighted average number of common shares,
diluted
  
12,365,418 
  
39,201,865 
  
10,491,316 
  
35,539,671 
  
1,850,072 
  
6,447,710 
 
  
  
  
  
  
  
  
  
  
  
  
  
Earnings per common share
 $
3.39 
 $
1.11 
 $
5.43 
 $
1.91 
 $
6.49 
 $
3.02 
F-31

Table of Contents
PERFORMANCE SHIPPING INC.
Notes to Consolidated Financial Statements
2024, 2023 and 2022
(Expressed in thousands of US Dollars – except for share and per share and warrants data, unless otherwise stated)
12. Income Taxes
Under the laws of the countries of the companies’ incorporation and / or vessels’ registration, the companies are not subject to tax on international shipping income; however, they are
subject to registration and tonnage taxes, which are included in Vessel operating expenses in the accompanying consolidated statements of operations.
The Company is potentially subject to a four percent U.S. federal income tax on 50% of its gross income derived by its voyages that begin or end in the United States.  However, under
Section 883 of the Internal Revenue Code of the United States (the “Code”), a corporation is exempt from U.S. federal income taxation on its U.S.-source shipping income if: (a) it is
organized in a foreign country that grants an equivalent exemption from tax to corporations organized in the United States (an “equivalent exemption”); and (b) either (i) more than 50%
of the value of its common stock is owned, directly or indirectly, by “qualified shareholders,”, which is referred to as the “50% Ownership Test,” or (ii) its common stock is “primarily and
regularly traded on an established securities market” in the United States or in a country that grants an “equivalent exemption”, which is referred to as the “Publicly-Traded Test.”
The Marshall Islands, the jurisdiction where Performance Shipping Inc. and each of its vessel-owning subsidiaries are incorporated, grant an “equivalent exemption” to U.S.
corporations. Therefore, the Company would be exempt from U.S. federal income taxation with respect to its U.S.-source shipping income if either the 50% Ownership Test or the
Publicly-Traded Test is met.
Based on the trading and ownership of its stock, the Company believes that it satisfied the 50% Ownership Test for its 2024 taxable year and intends to take this position on its 2024 U.S.
federal income tax returns. Therefore, the Company does not expect to have any U.S. federal income tax liability for the year ended December 31, 2024.
13. Financial Instruments and Fair Value Disclosures
The carrying values of temporary cash investments, accounts receivable and accounts payable approximate their fair value due to the short-term nature of these financial instruments.
The fair values of long-term bank loans approximate the recorded values, due to their variable interest rates. The fair value of the Series A warrants liability is measured at each reporting
period end and at each settlement date using the Black & Scholes model for the valuation of these instruments, as discussed above (Note 9). The Company is exposed to interest rate
fluctuations associated with its variable rate borrowings and its objective is to manage the impact of such fluctuations on earnings and cash flows of its borrowings. Currently, the
Company does not have any derivative instruments to manage such fluctuations. During 2023, the Company measured on a non-recurring basis the fair values (excluding the down
round feature) of the Series C Preferred Shares (as discussed above Note 9 (b)), July 2022 and August 2022 Warrants using Level 3 inputs of the fair value hierarchy, before and after the
triggering of the down round features. These valuations resulted:
 
•
in a deemed dividend for the Company’s Series C Preferred Shares as of January 11, 2023, of $1,539 (Note 9),
 
•
in a deemed dividend for the Company’s Series C Preferred Shares as of January 12, 2023, of $447 (Note 9),
 
•
in a deemed dividend for the Company’s Series C Preferred Shares as of January 13, 2023, of $39 (Note 9),
 
•
in a deemed dividend for the Company’s Series C Preferred Shares as of January 19, 2023, of $250 (Note 9),
 
•
in a deemed dividend for the Company’s Series C Preferred Shares as of January 20, 2023, of $486 (Note 9),
 
•
in a deemed dividend for the Company’s Series C Preferred Shares as of January 25, 2023, of $1,486 (Note 9),
 
•
in a deemed dividend for the Company’s Series C Preferred Shares as of January 26, 2023, of $171 (Note 9),
 
•
in a deemed dividend for the Company’s Series C Preferred Shares as of March 1, 2023, of $5,391 (Note 9).
F-32

Table of Contents
PERFORMANCE SHIPPING INC.
Notes to Consolidated Financial Statements
2024, 2023 and 2022
(Expressed in thousands of US Dollars – except for share and per share and warrants data, unless otherwise stated)
As of December 31, 2023, the deemed dividend for the Company’s July 2022 Warrants and August 2022 Warrants that resulted from the fair value measurement of the down round
features of July 2022 and August 2022 Warrants amounted to $256 and $533, respectively, both triggered similarly to Series C Preferred Shares above (Note 9).
The Company recorded gain from the Series A warrants measured on non-recurring basis at settlement dates amounting to $244, and on recurring basis as of each measurement date
amounting to $317. The Series A Warrants fair value as of settlement and measurement dates per discussion above (Note 9 (g)), was determined through Level 2 inputs of the fair value
hierarchy as determined by management. As of December 31, 2024, and December 31, 2023, the Company measured on recurring basis the fair value of the outstanding Series A Warrants
at each measurement date of 14,300 Series A warrants at both dates, in the amount of $27 and $32, respectively. The Company measured on a non-recurring basis the fair value of Series
A Warrants on each of the respective exercise dates as follows (please refer to Note 9(g)):
 
•
on March 7, 2023, 42,900 Series A Warrants in the amount of $37,
 
•
on March 8, 2023, 1,811,550 Series A Warrants in the amount of $1,612,
 
•
on March 9, 2023, 400,400 Series A Warrants in the amount of $340,
 
•
on March 10, 2023, 320,450 Series A Warrants in the amount of $269,
 
•
on March 17, 2023, 14,300 Series A Warrants in the amount of $11,
 
•
on June 15, 2023, 575,250 Series A Warrants in the amount of $420,
 
•
on August 29, 2023, 432,250 Series A Warrants in the amount of $726.
During 2022, the Company measured on a non-recuring basis its newly-issued equity instruments on their appropriate measurement dates, using Level 3 inputs of the fair value
hierarchy. These valuations resulted:
•
for the Company’s Series B Preferred Shares as of January 27, 2022, which was the date of the instrument’s issuance, to a fair value of $18,030 (Note 9 (b)),
•
for the Company’s Series C Preferred Shares as of October 17, 2022, which was the date of the instrument’s issuance, to a fair value of $26,809 (Note 9 (b)).
Also, during 2022, the Company measured on a non-recurring basis the fair values of the Series C Preferred Shares, July 2022 and August 2022 Warrants, before and after the triggering
of the down round features. These valuations resulted:
•
in a deemed dividend for the Company’s Series C Preferred Shares as of December 12, 2022, of $5,930 (Note 9 (b)),
•
in a deemed dividend for the Company’s July 2022 Warrants as of August 18, 2022, of $22 (Note 9 (f)),
•
in a deemed dividend for the Company’s July 2022 Warrants as of December 12, 2022, of $192 (Note 9 (f)), and
•
in a deemed dividend for the Company’s August 2022 Warrants as of December 12, 2022, of $902 (Note 9 (f)).
F-33

Table of Contents
PERFORMANCE SHIPPING INC.
Notes to Consolidated Financial Statements
2024, 2023 and 2022
(Expressed in thousands of US Dollars – except for share and per share and warrants data, unless otherwise stated)
14. Subsequent Events
(a)
Renaming of Unitized Ocean Transport Limited to Performance Shipping Management Inc.: Effective January 2025, the Company’s in-house fleet manager, Unitized Ocean
Transport Limited, has officially been renamed Performance Shipping Management Inc.
(b)
Installment payments for newbuilding vessels: In February and April 2025, the Company paid the third installments for the Hull 1515 and the Hull 1596, amounting to $6,325
and $6,485, respectively, and in February 2025 the Company paid the second installment for the Hull 1597, amounting to $6,485, according to the terms of the shipbuilding
contracts (Notes 5 and 8).
(c)
Sale and Delivery of the vessel P. Yanbu: On March 13, 2025, the Company entered, through a separate wholly-owned subsidiary, into a Memorandum of Agreement for the sale
of the vessel “P. Yanbu”, for a gross purchase price of $39,000. The sale was successfully completed on March 24, 2025, upon delivery of the vessel to her new owners. The
Company is expected to generate in the first quarter of 2025 a gain on sale, before any commissions and other sale-related costs, of approximately $21,500.
(d)
Potential Sale of the vessel P. Sophia within the next twelve months: On April 7, 2025, the Company announced that it has entered through a separate wholly-owned
subsidiary, into a forward sale and exclusivity agreement with an unaffiliated third party, based on which the buyers are granted exclusive rights to submit a bid for the
conversion of the  vessel P. Sophia, in an auction for the provision of a Floating Production Storage and Offloading (FPSO) vessel for charter to a national oil company (the
“Offshore Project”).  If the buyer is awarded the Offshore Project by the expiration of the auction on April 5, 2026, the buyer will purchase the P. Sophia, for a gross sale price of
$36,050. Additionally, if the vessel is delivered to the buyer on or before September 30, 2025, the gross sale price will be increased by $1,000.
(e)
Dividend Payment to the Series B and Series C Preferred Stockholders: On April 7, 2025, the Company paid cash dividends to its Series B and Series C preferred stockholders
amounting to $13 (or $0.25 per share) and $445 (or $0.3125 per share), respectively, according to the terms of each preferred stock, out of which $411 were paid to Mango (Note
4).
F-34

Exhibit 2.5
 
DESCRIPTION OF THE REGISTRANT’S SECURITIES REGISTERED PURSUANT
 
TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934
 
As of December 31, 2024, Performance Shipping Inc. (the “Company”) had two classes of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended:
 
 
(1)
Common stock, $0.01 par value (the “common shares”); and
 
 
(2)
Preferred stock purchase rights (the “Preferred Stock Purchase Rights”).
 
The following description sets forth certain material provisions of these securities. The following summary does not purport to be complete and is subject to, and is qualified in its
entirety by reference to, the applicable provisions of (i) the Company’s Amended and Restated Articles of Incorporation, as amended (the “Articles of Incorporation”) and (ii) the
Company’s Amended and Restated Bylaws (the “Bylaws”), each of which is incorporated by reference as an exhibit to the Annual Report on Form 20-F of which this Exhibit is a part. We
encourage you to refer to our Articles of Incorporation and Bylaws for additional information.
 
Please note in this description of securities, “we,” “us,” “our” and “the Company” all refer to Performance Shipping Inc. and its subsidiaries, unless the context requires otherwise.
 
Capitalized terms used but not defined herein have the meanings given to them in the Annual Report on Form 20-F of which this Exhibit is a part.
 
Purpose
Our purpose is to engage in any lawful act or activity for which corporations may now or hereafter be organized under the Marshall Islands Business Corporations Act, or BCA.
Our Third Amended and Restated Articles of Incorporation and Amended and Restated By-Laws, as further amended, do not impose any limitations on the ownership rights of our
shareholders.
 
Authorized Capitalization
 
Under our amended and restated articles of incorporation, our authorized capital stock consists of 500,000,000 common shares, par value $0.01 per share, of which
12,432,158 shares were issued and outstanding as of December 31, 2024 and April 14, 2025, respectively, and 25,000,000 preferred shares, par value $0.01 per share, of which 50,726 of our
Series B Preferred Shares and 1,423,912 of our Series C Preferred Shares were issued and outstanding as of December 31, 2024 and April 14, 2025, respectively.
 
DESCRIPTION OF COMMON SHARES
 
The respective number of common shares issued and outstanding as of the last day of the fiscal year for the Annual Report on Form 20-F to which this description is attached
or incorporated by reference as an exhibit, is provided on the cover page of such Annual Report on Form 20-F.
 
Each outstanding common share entitles the holder to one vote on all matters submitted to a vote of shareholders. Subject to preferences that may be applicable to any
outstanding preferred shares, holders of common shares are entitled to receive ratably all dividends, if any, declared by our board of directors out of funds legally available for dividends.
Upon our dissolution or liquidation or the sale of all or substantially all of our assets, after payment in full of all amounts required to be paid to creditors and to the holders of our
preferred shares having liquidation preferences, if any, the holders of our common shares will be entitled to receive pro rata our remaining assets available for distribution. Holders of our
common shares do not have conversion, redemption or preemptive rights to subscribe to any of our securities. The rights, preferences and privileges of holders of common shares are
subject to the rights of the holders of our preferred shares, including our existing classes of preferred shares and any preferred shares we may issue in the future.
 
1

Voting Rights
 
Each outstanding common share entitles the holder to one vote on all matters submitted to a vote of shareholders. At any annual or special general meeting of shareholders
where there is a quorum, the affirmative vote of a majority of the votes cast by holders of shares of stock represented at the meeting shall be the act of the shareholders. (Under the
Articles of Incorporation, at all meetings of shareholders except otherwise expressly provided by law, there must be present in person or proxy shareholders of record holding at least
one third of the shares issued and outstanding and entitled to vote at such meeting in order to constitute a quorum but if less than a quorum is present, a majority of those shares
present either in person or by proxy shall have power to adjourn any meeting until a quorum shall be present.)
 
Our Bylaws do not confer any conversion, redemption or preemptive rights attached to our common shares.
 
Dividend Rights
 
Subject to preferences that may be applicable to any outstanding preferred shares, holders of common shares are entitled to receive ratably all dividends, if any, declared by our
board of directors out of funds legally available for dividends.
 
Liquidation Rights
 
Upon our dissolution or liquidation or the sale of all or substantially all of our assets, after payment in full of all amounts required to be paid to creditors and to the holders of
our preferred shares having liquidation preferences, if any, the holders of our common shares will be entitled to receive pro rata our remaining assets available for distribution.
 
Variation of Rights
 
Generally, the rights or privileges attached to our common shares may be varied or abrogated by the rights of the holders of our preferred shares, including our existing classes
of preferred shares and any preferred shares we may issue in the future.
 
Limitations on Ownership
 
Under Marshall Islands law generally, there are no limitations on the right of non-residents of the Marshall Islands or owners who are not citizens of the Marshall Islands to
hold or vote our common shares.
 
DESCRIPTION OF PREFERRED SHARES
 
Our amended and restated articles of incorporation authorize our board of directors to establish one or more series of preferred shares and to determine, with respect to any
series of preferred shares, the terms and rights of that series, including:
 
•
the designation of the series;
 
•
the number of shares of the series;
 
•
the preferences and relative, participating, option or other special rights, if any, and any qualifications, limitations or restrictions of such series; and
 
•
the voting rights, if any, of the holders of the series.
 
Description of the Series B Convertible Cumulative Perpetual Preferred Stock
 
On December 21, 2021, we offered to exchange up to 271,078 of our then issued and outstanding common shares for newly issued shares of our Series B Convertible Cumulative
Perpetual Preferred Stock, par value $0.01 and liquidation preference $25.00 (the “Series B Preferred Shares”) at a ratio of 0.28 Series B Preferred Shares for each common share. The offer
expired on January 27, 2022 and a total of 188,974 common shares were validly tendered and accepted for exchange in the offer, which resulted in the issuance of 793,657 Series B
Preferred Shares.
The authorized number of Series B Preferred Shares was initially 1,200,000 and is currently 457,069 as a result of the cancellation of Series B Preferred Shares following their
repurchase or conversion. 50,726 Series B Preferred Shares are currently issued and outstanding.
The following description of the terms of the Series B Preferred Shares is a summary and does not purport to be complete and qualified in its entirety by the provisions of the
Amended and Restated Certificate of Designations of the Series B Preferred Shares, dated January 12, 2022, which is incorporated by reference herein.
2

Voting.  The Series B Preferred Shares have no voting rights except as set forth below, as set forth in the Certificate of Designation for the Series B Preferred Shares, or as
otherwise provided by Marshall Islands law. Unless we have received the affirmative vote or consent of the holders of at least two-thirds of the outstanding Series B Preferred Shares,
voting as a single class, we may not adopt any amendment to our articles of incorporation that materially and adversely alters the preferences, powers or rights of the Series B Preferred
Shares. On any matter described above in which the Series B Preferred Shareholders are entitled to vote as a class, whether separately or together with the holders of any Parity
Securities, such holders will be entitled to one vote per Series B Preferred Share.
Redemption.  The Series B Preferred Shares are redeemable. At any time on or after the date that is the date immediately following the 15-month anniversary of the Original
Issue Date of the Series B Preferred Shares, we may redeem, at our option, in whole or in part, the Series B Preferred Shares at a redemption price in cash equal to $25.00 plus any
accumulated and unpaid dividends thereon to and including the date of redemption. Any such optional redemption shall be effected only out of funds legally available for such purpose.
We may undertake multiple partial redemptions. The Series B Preferred Shares are not subject to mandatory redemption or to any sinking fund requirements.
Liquidation Preference. Upon any liquidation, dissolution or winding up of the Company, either voluntary or involuntary, the Series B Preferred Shares will rank (i) senior to (a)
common shares and (b) all Junior Securities (as such terms is defined in the Series B Certificate of Designation), (ii) pari passu with the Parity Securities (as such term is defined in the
Series B Certificate of Designation), including the Series C Preferred Shares, and (iii) junior to Senior Securities (as such term is defined in the Series B Certificate of Designation). The
Series B Preferred Shares shall be entitled to receive a payment equal to $25, plus the amount of any accumulated and unpaid dividends thereon (whether or not such dividends shall
have been declared) per Series B Preferred Share, in cash, concurrently with any distribution made to the holders of parity securities and before any distribution shall be made to the
holders of common shares or any other junior securities. The Series B Preferred Shares holder has no other rights to distributions upon any liquidation, dissolution or winding up of the
Company.
Conversion. Each Series B Preferred Share was convertible, at the option of the holder and for additional cash consideration of $7.50 per converted Series B Preferred Share, into
two Series C Preferred Shares. Such Series B Preferred Share conversion right was only exercisable during a 30-day period, such period commencing on the date that is the later of (i) the
date that is the date immediately following the one-year anniversary of the Original Issue Date and (ii) the date on which the Company notifies the holders of Series B Preferred Shares
that the issuance of Series C Preferred Shares upon exercise of the Series B Conversion Right is covered under an effective registration statement that is filed with the SEC under the
Securities Act or the date that the Company notifies the holders of Series B Preferred Shares that it has determined, in its sole discretion, that the issuance of such Series C Preferred
Shares is exempt from the registration requirements of the Securities Act (the “Conversion Period”). The Conversion Period expired on March 15, 2023.  During the Conversion Period,
85,535 Series B Preferred Shares were converted to 171,070 Series C Preferred Shares.
Dividends. Dividends on each Series B Preferred Share shall be cumulative and shall accrue at a rate equal to 4.00% per annum of the liquidation preference per Series B
Preferred Share from the Original Issuance Date.  When and if declared, the dividend payment dates for the Series B Preferred Shares shall be each June 15, September 15, December 15
and March 15. At the Company’s option, such dividends may be paid in common shares of the Company valued at the volume-weighted average price of the common shares for the 10
trading days prior to the Dividend Payment Date.
Listing. Currently, no market exists for the Series B Preferred Shares, and we do not intend to apply to list the Series B Preferred Shares on any stock exchange or in any trading
market.
Description of the Series C Convertible Cumulative Redeemable Perpetual Preferred Stock
On October 17, 2022 (the “Original Issuance Date”), we filed a Certificate of Designation (the “Series C Certificate of Designation”) with the Registrar of Corporations of the
Republic of the Marshall Islands pursuant to which we established our newly designated Series C Preferred Shares. The authorized number of Series C Preferred Shares is 1,587,314, of
which 1,423,912 Series C Preferred Shares are currently issued and outstanding.
3

The following description of the terms of the Series C Preferred Shares is a summary and does not purport to be complete and is qualified by reference to the Series C Certificate
of Designation filed as an exhibit to our Form 6-K filed on October 21, 2022 and incorporated herein by reference.
Voting.  Each holder of Series C Preferred Shares is entitled to a number of votes equal to the number of Common Shares into which such holder’s Series C Preferred Shares
would then be convertible (notwithstanding the requirement that the Series C Preferred Shares are convertible only after six months following the Original Issuance Date), multiplied by
10. Except as set forth in the Series C Certificate of Designation with respect to certain matters requiring the majority vote of the Series C Preferred Shares or as required by law, the
holders of Series C Preferred Shares shall vote together as one class with the holders of Common Shares on all matters submitted to a vote of our shareholders.
Redemption.  The Series C Preferred Shares are redeemable. The Company has the right at any time, on or after the date that is the date immediately following the 15-month
anniversary of the Original Issuance Date, to redeem, at its option, in whole or in part, the Series C Preferred Shares, provided that on the date of any Series C redemption notice, except
with respect to any redemption for cash, less than 25% of the authorized number of Series C Preferred Shares are outstanding. The redemption price per Series C Preferred Shares shall be
equal to $25.00 plus any accumulated and unpaid dividends thereon to and including the date of redemption, payable in cash or, at the Company’s election, Common Shares valued at the
volume-weighted average price of the Common Shares for the 10 trading days prior to the date of redemption. The Company may undertake multiple partial redemptions. The Series B
Preferred Shares are not subject to mandatory redemption or to any sinking fund requirements.
Liquidation Preference. Upon any liquidation, dissolution or winding up of the Company, either voluntary or involuntary, the Series C Preferred Shares will rank (i) senior to (a)
common shares and (b) all Junior Securities (as such terms is defined in the Series C Certificate of Designation), (ii) pari passu with the Parity Securities (as such term is defined in the
Series C Certificate of Designation), including the Series B Preferred Shares, and (iii) junior to Senior Securities (as such term is defined in the Series C Certificate of Designation). The
Series C Preferred Shares shall be entitled to receive a payment equal to $25, plus the amount of any accumulated and unpaid dividends thereon (whether or not such dividends shall
have been declared) per Series C Preferred Share, in cash, concurrently with any distribution made to the holders of parity securities and before ay distribution shall be made to the
holders of common shares or any other junior securities. The Series C Preferred Shares holder has no other rights to distributions upon any liquidation, dissolution or winding up of the
Company.
Conversion. The Series C Preferred Shares are convertible into common shares (i) at the option of the holder: in whole or in part, at a rate equal to the Series C liquidation
preference, plus the amount of any accrued and unpaid dividends thereon to and including the date of conversion, divided by a conversion price of $1.3576 per common share, subject
to adjustment from time to time, or (ii) mandatorily: on any date within the Series C Conversion Period on which less than 25% of the authorized number of Series C Preferred Shares are
outstanding and the volume-weighted average price of the common shares for the 10 trading days preceding such date exceeds 130% of the conversion price in effect on such date, the
Company may elect that all or a portion of the outstanding Series C Preferred Shares shall mandatorily convert into common shares at a rate equal to the Series C liquidation preference,
plus the amount of any accrued and unpaid dividends thereon to and including such date, divided by the conversion price.  The conversion price is subject to adjustment for any stock
splits, reverse stock splits or stock dividends, and shall also be adjusted to the lowest price of issuance of common shares by the Company for any registered offering following the
Original Issuance Date, provided that such adjusted conversion price shall not be less than $0.50. Any common shares issued upon conversion of the Series C Preferred Shares will be
exempt from registration pursuant to Section 3(a)(9) of the Securities Act.
Dividends. Dividends on each Series C Preferred Share shall be cumulative and shall accrue at a rate equal to 5.00% per annum of the liquidation preference per Series C
Preferred Share from the dividend payment date immediately preceding issuance.  When and if declared, the dividend payment dates for the Series C Preferred Shares shall be each June
15, September 15, December 15 and March 15. At the Company’s option, such dividends may be paid in Common Shares of the Company valued at the volume-weighted average price of
the common shares for the 10 trading days prior to the Dividend Payment Date.
4

Listing. Currently, no market exists for the Series C Preferred Shares, and we do not intend to apply to list the Series C Preferred Shares on any stock exchange or in any trading
market.
DESCRIPTION OF PREFERRED STOCK PURCHASE RIGHTS
 
On December 20, 2021, we entered into a new Stockholders’ Rights Agreement, or the Rights Agreement, with Computershare Inc. as Rights Agent. Pursuant to the Rights
Agreement, each share of our common stock includes one right, or a Right, that entitles the holder to purchase from us a unit consisting of one one-thousandth of a share of our Series A
Participating Preferred Stock at an exercise price of $750.00, subject to specified adjustments. The Rights will separate from the common stock and become exercisable only if a person or
group acquires beneficial ownership of 10% or more of our common stock in a transaction not approved by our board of directors. In that situation, each holder of a Right (other than the
acquiring person, whose Rights will become void and will not be exercisable) will have the right to purchase, upon payment of the exercise price, a number of shares of our common stock
having a then-current market value equal to twice the exercise price. In addition, if we are acquired in a merger or other business combination after an acquiring person acquires 10% or
more of our common stock, each holder of the Right will thereafter have the right to purchase, upon payment of the exercise price, a number of shares of common stock of the acquiring
person having a then-current market value equal to twice the exercise price. The acquiring person will not be entitled to exercise these Rights. Under the Rights Agreement's terms, it will
expire on December 20, 2031.
 
The Rights may have anti-takeover effects. The Rights will cause substantial dilution to any person or group that attempts to acquire us without the approval of our board of
directors. As a result, the overall effect of the Rights may be to render more difficult or discourage any attempt to acquire us. Because our board of directors can approve a redemption of
the Rights or a permitted offer, the Rights should not interfere with a merger or other business combination approved by our board of directors.
 
We have summarized the material terms and conditions of the Rights Agreement and the related Rights below.
 
Distribution and Transfer of Rights; Rights Certificates
 
The board of directors has declared a dividend of one Right for each outstanding Common Share. Prior to the Distribution Date referred to below:
 
•
the Rights will be evidenced by and trade with the certificates for the Common Shares (or, with respect to any uncertificated Common Shares registered in book entry form,
by notation in book entry), and no separate rights certificates will be distributed;
 
•
new Common Shares certificates issued after the Record Date will contain a legend incorporating the Rights Agreement by reference (for uncertificated Common Shares
registered in book entry form, this legend will be contained in a notation in book entry); and
 
•
the surrender for transfer of any certificates for Common Shares (or the surrender for transfer of any uncertificated Common Shares registered in book entry form) will also
constitute the transfer of the Rights associated with such Common Shares.
 
Rights will accompany any new Common Shares that are issued after the Record Date.
 
Distribution Date
 
Subject to certain exceptions specified in the Rights Agreement, the Rights will separate from the Common Shares and become exercisable following the earlier of (i) the 10th
calendar day (or such later date as may be determined by the board of directors) after the public announcement that a person or group of affiliated or associated persons (an “Acquiring
Person”) has acquired beneficial ownership of 10% or more of the Common Shares; or (ii) the 10th business day (or such later date as may be determined by the board of directors) after a
person or group announces a tender or exchange offer that would result in ownership by a person or group of 10% or more of the Common Shares. For purposes of the Rights
Agreement, beneficial ownership is defined to include the ownership of derivative securities.
 
The date on which the Rights separate from the Common Shares and become exercisable is referred to as the “Distribution Date.”
 
5

After the Distribution Date, the Company will mail Rights certificates to the Company’s stockholders (and in the case of uncertificated shares, by notation in book entry
accounts reflecting ownership) as of the close of business on the Distribution Date and the Rights will become transferable apart from the Common Shares. Thereafter, such Rights
certificates alone will represent the Rights.
 
Preferred Shares Purchasable Upon Exercise of Rights
 
After the Distribution Date, each Right will entitle the holder to purchase, for the Exercise Price, one one-thousandth of a Preferred Share having economic and other terms
similar to that of one Common Share. This portion of a Preferred Share is intended to give the stockholder approximately the same dividend, voting and liquidation rights as would one
Common Share, and should approximate the value of one Common Share.
 
More specifically, each one one-thousandth of a Preferred Share, if issued, will, among other things:
 
•
not be redeemable;
 
•
entitle holders to quarterly dividend payments in an amount per share equal to 1,000 times the aggregate per share amount of all cash dividends, and 1,000 times the
aggregate per share amount (payable in kind) of all non-cash dividends or other distributions other than a dividend payable in Common Shares or a subdivision of the
outstanding Common Shares (by reclassification or otherwise), declared on the Common Shares since the immediately preceding quarterly dividend payment date; and
 
•
entitle holders of Series A Participating Preferred Stock to 1,000 votes on all matters submitted to a vote of the stockholders of the Company.
 
Flip-In Trigger
 
If an Acquiring Person obtains beneficial ownership of 10% or more of the Common Shares, then each Right will entitle the holder thereof to purchase, for the Exercise Price, a
number of Common Shares (or, in certain circumstances, cash, property or other securities of the Company) having a then-current market value of twice the Exercise Price. However, the
Rights are not exercisable following the occurrence of the foregoing event until such time as the Rights are no longer redeemable by the Company, as further described below.
 
Following the occurrence of an event set forth in preceding paragraph, all Rights that are or, under certain circumstances specified in the Rights Agreement, were beneficially
owned by an Acquiring Person or certain of its transferees will be null and void.
 
Flip-Over Trigger
 
If, after an Acquiring Person obtains 10% or more of the Common Shares, (i) the Company merges into another entity; (ii) an acquiring entity merges into the Company; or (iii)
the Company sells or transfers 50% or more of its assets, cash flow or earning power, then each Right (except for Rights that have previously been voided as set forth above) will entitle
the holder thereof to purchase, for the Exercise Price, a number of shares of common stock of the person engaging in the transaction having a then-current market value of twice the
Exercise Price.
 
Redemption of the Rights
 
The Rights will be redeemable at the Company's option for $0.01 per Right (payable in cash, Common Shares or other consideration deemed appropriate by the board of
directors) at any time on or prior to the 10th business day (or such later date as may be determined by the board of directors) after the public announcement that an Acquiring Person
has acquired beneficial ownership of 10% or more of the Common Shares. Immediately upon the action of the board of directors ordering redemption, the Rights will terminate and the
only right of the holders of the Rights will be to receive the $0.01 redemption price. The redemption price will be adjusted if the Company undertakes a stock dividend or a stock split.
 
Exchange Provision
 
At any time after the date on which an Acquiring Person beneficially owns 10% or more of the Common Shares and prior to the acquisition by the Acquiring Person of 50% of
the Common Shares, the board of directors may exchange the Rights (except for Rights that have previously been voided as set forth above), in whole or in part, for Common Shares at
an exchange ratio of one Common Share per Right (subject to adjustment). In certain circumstances, the Company may elect to exchange the Rights for cash or other securities of the
Company having a value approximately equal to one Common Share.
 
6

Expiration of the Rights
 
The Rights expire on the earliest of (i) 5:00 p.m., New York City time, on December 20, 2031 (unless such date is extended); or (ii) the redemption or exchange of the Rights as
described above.
 
Amendment of Terms of Rights Agreement and Rights
 
The terms of the Rights and the Rights Agreement may be amended in any respect without the consent of the holders of the Rights on or prior to the Distribution Date.
Thereafter, the terms of the Rights and the Rights Agreement may be amended without the consent of the holders of Rights in order to (i) cure any ambiguities; (ii) shorten or lengthen
any time period pursuant to the Rights Agreement; or (iii) make changes that do not adversely affect the interests of holders of the Rights (other than an Acquiring Person or an affiliate
or associate of an Acquiring Person).
 
Voting Rights; Other Stockholder Rights
 
The Rights will not have any voting rights. Until a Right is exercised, the holder thereof, as such, will have no separate rights as stockholder of the Company.
 
Anti-Dilution Provisions
 
The board of directors may adjust the Exercise Price, the number of Preferred Shares issuable and the number of outstanding Rights to prevent dilution that may occur from a
stock dividend, a stock split or a reclassification of the Preferred Shares or Common Shares.
 
Taxes
 
The distribution of Rights should not be taxable for federal income tax purposes. However, following an event that renders the Rights exercisable or upon redemption of the
Rights, stockholders may recognize taxable income.
 
DESCRIPTION OF WARRANTS
Class A Warrants
On June 1, 2022, we completed a public offering of 508,000 units (as adjusted for the one-for-fifteen reverse stock split effective on November 15, 2022), each unit consisting of
(i) one common share or a pre-funded warrant to purchase one common share at an exercise price equal to $0.01 per common share, and (ii) one Class A Warrant to purchase one common
share at an initial exercise price equal to $15.75 per Common Share (a “Class A Warrant”), at a public offering price of $15.75 per unit.
At the time of the closing, the underwriters exercised and closed on part of their over-allotment option, and purchased Class A Warrants to purchase up to 59,366 common
shares.
As of April 14, 2025, Class A Warrants to purchase up to 567,366 common shares are outstanding.
The following summary of certain terms and provisions of the Class A Warrants is not complete and is subject to, and qualified in its entirety by the provisions of the form of
Class A Warrant, which was filed as Exhibit 4.2 to our Current Report on Form 6-K filed with the SEC on June 2, 2022 and is incorporated herein by reference.
Exercisability. The Class A Warrants are exercisable at any time after their original issuance and at any time up to the date that is five years after their original issuance. The
Class A Warrants are exercisable, at the option of each holder, in whole or in part by delivering to us a duly executed exercise notice and, at any time a registration statement registering
the issuance of the common shares underlying the warrants under the Securities Act is effective and available for the issuance of such shares, by payment in full in immediately available
funds for the number of common shares purchased upon such exercise. If a registration statement registering the issuance of the common shares underlying the Class A Warrants under
the Securities Act is not effective or available, the holder may, in its sole discretion, elect to exercise the Class A Warrants through a cashless exercise, in which case the holder would
receive upon such exercise the net number of common shares determined according to the formula set forth in the warrant. We may be required to pay certain amounts as liquidated
damages as specified in the warrants in the event we do not deliver common shares upon exercise of the warrants within the time periods specified in the warrants. No fractional common
shares will be issued in connection with the exercise of a warrant.
7

Exercise Limitation. A holder will not have the right to exercise any portion of the Class A Warrants if the holder (together with its affiliates) would beneficially own in excess of
4.99% (or, upon election by a holder prior to the issuance of any warrants, 9.99%) of the number of shares of our common shares outstanding immediately after giving effect to the
exercise, as such percentage ownership is determined in accordance with the terms of the warrants. However, any holder may increase or decrease such percentage to any other
percentage not in excess of 9.99%, upon at least 61 days’ prior notice from the holder to us with respect to any increase in such percentage.
Exercise Price. The exercise price for the Class A Warrants per whole common share purchasable upon exercise of the warrants is $15.75. The exercise price and number of
common shares issuable on exercise of the Class A Warrants are subject to appropriate adjustments in the event of certain stock dividends and distributions, stock splits, stock
combinations, reclassifications or similar events affecting our common shares. The exercise price of the Class A Warrants may also be reduced to any amount not less than $7.50 (as
adjusted for stock splits, reverse stock splits or stock dividends) and for any period of time at the sole discretion of our board of directors.
 Transferability. Subject to applicable laws, the Class A Warrants may be offered for sale, sold, transferred or assigned without our consent.
Exchange Listing. We do not intend to list the Class A Warrants on any securities exchange or other trading market. Without an active trading market, the liquidity of the Class
A Warrants will be limited.
Warrant Agent. The Class A Warrants were issued in registered form under a warrant agreement between Computershare Trust Company, N.A., as warrant agent, and us. The
warrants shall initially be represented only by one or more global warrants deposited with the warrant agent, as custodian on behalf of The Depository Trust Company (DTC) and
registered in the name of Cede & Co., a nominee of DTC, or as otherwise directed by DTC.
Fundamental Transactions. In the event of a fundamental transaction, as described in the Class A Warrants and generally including, with certain exceptions, any
reorganization, recapitalization or reclassification of our common shares, the sale, transfer or other disposition of all or substantially all of our properties or assets, our consolidation or
merger with or into another person, the acquisition of more than 50% of our outstanding common shares, or any person or group becoming the beneficial owner of 50% of the voting
power represented by our outstanding common shares, the holders of the warrants will be entitled to receive upon exercise of the warrants the kind and amount of securities, cash or
other property that the holders would have received had they exercised the warrants immediately prior to such fundamental transaction. In addition, in the event of a fundamental
transaction, we or the successor entity, at the request of a holder of Class A Warrants, will be obligated to purchase any unexercised portion of such Class A Warrants in accordance
with the terms of the Class A Warrants.
Rights as a Shareholder. Except as otherwise provided in the warrants or by virtue of such holder’s ownership of our common shares, the holder of a Class A Warrant does not
have the rights or privileges of a holder of our common shares, including any voting rights, until the holder exercises the warrant.
Governing Law. The Class A Warrants and the warrant agreement are governed by New York law.
July 2022 Warrants
On July 19, 2022, we issued approximately 1,133,333 of our common shares in a registered direct offering concurrently with a private placement of July 2022 Warrants to
purchase up to approximately 1,133,333 common shares, each exercisable to purchase one common share for an initial exercise price of $5.25, for a purchase price of $5.25 per common
share and Warrant. This private placement transaction was conducted pursuant to a Securities Purchase Agreement dated July 18, 2022.
July 2022 Warrants to purchase up to 1,033,333 common shares are currently outstanding.
The following summary of certain terms and provisions of the July 2022 Warrants is not complete and is subject to, and qualified in its entirety by the provisions of the form of
July 2022 Warrant, which was filed as Exhibit 4.3 to our Current Report on Form 6-K filed with the SEC on July 20, 2022 and is incorporated herein by reference.
8

Exercisability. The exercise price for the July 2022 Warrants per whole common share purchasable upon exercise of the warrants is currently $1.65, as adjusted pursuant to the
terms of the July 2022 Warrants subsequent to their issuance. The July 2022 Warrants are exercisable for a period of five and a half years commencing on the date of issuance. The July
2022 Warrants are exercisable, at the option of each holder, in whole or in part by delivering to us a duly executed exercise notice with payment in full in immediately available funds for
the number of common shares purchased upon such exercise. If a registration statement registering the resale of the common shares underlying the July 2022 Warrants under the
Securities Act is not effective or available at any time after the six month anniversary of the date of issuance of the July 2022 Warrants, the holder may, in its sole discretion, elect to
exercise the July 2022 Warrant through a cashless exercise, in which case the holder would receive upon such exercise the net number of common shares determined according to the
formula set forth in the Warrant.
 
Exercise Limitation. A holder will not have the right to exercise any portion of the July 2022 Warrant if the holder (together with its affiliates) would beneficially own in excess of
4.99% (or, upon election of the holder, 9.99%) of the number of our common shares outstanding immediately after giving effect to the exercise, as such percentage of beneficial ownership
is determined in accordance with the terms of the Warrants. However, any holder may increase or decrease such percentage, but not in excess of 9.99%, provided that any increase will
not be effective until the 61st day after such election.
Exercise Price Adjustment. The exercise price of the July 2022 Warrants is subject to appropriate adjustment in the event of certain stock dividends and distributions, stock
splits, stock combinations, reclassifications or similar events affecting our common shares and also upon any distributions of assets, including cash, stock or other property to our
stockholders. The exercise price of the July 2022 Warrants may also be reduced to any amount and for any period of time at the sole discretion of our board of directors subject to a floor
price of $1.65 (as adjusted for stock splits, reverse stock splits or stock dividends). In addition, the exercise price is also subject to an anti-dilution adjustment if we issue or are deemed
to have issued securities at a price lower than the then applicable exercise price, subject to a floor price of $1.65 (as adjusted for stock splits, reverse stock splits or stock dividends).
The Warrants require “buy-in” payments to be made by us for failure to deliver any shares of common stock issuable upon exercise.
Exchange Listing. There is no established trading market for the July 2022 Warrants and we do not expect a market to develop. In addition, we do not intend to apply for the
listing of the July 2022 Warrants on any national securities exchange or other trading market.
Fundamental Transactions. If a fundamental transaction occurs, then the successor entity will succeed to, and be substituted for us, and may exercise every right and power
that we may exercise and will assume all of our obligations under the July 2022 Warrants with the same effect as if such successor entity had been named in the warrant itself. If holders
of our common shares are given a choice as to the securities, cash or property to be received in a fundamental transaction, then the holder shall be given the same choice as to the
consideration it receives upon any exercise of the July 2022 Warrant following such fundamental transaction. In addition, the successor entity, at the request of warrant holders, will be
obligated to purchase any unexercised portion of the July 2022 Warrants in accordance with the terms of such Warrants.
Rights as a Shareholder. Except as otherwise provided in the July 2022 Warrants or by virtue of such holder’s ownership of our common shares, the holder of a July 2022
Warrant will not have the rights or privileges of a holder of our common shares, including any voting rights, until the issuance of common shares upon exercise of the warrant.
Resale/Registration Rights. We were required to file a registration statement providing for the resale of the common shares issued and issuable upon the exercise of the July
2022 Warrants and to use commercially reasonable efforts to cause such registration to become effective and to keep such registration statement effective at all times until no investor
owns any Warrants or shares issuable upon exercise thereof.  Such registration statement on Form F-3 (File No. 333-266946) was declared effective on August 29, 2022.
9

August 2022 Warrants
On August 16, 2022, we issued approximately 2,222,222 of our common shares and August 2022 Warrants to purchase up to approximately 2,222,222 common shares in a
registered direct offering, each exercisable to purchase one common share for an initial exercise price of $6.75, for a purchase price of $6.75 per share and August 2022 Warrant. This
issuance was conducted pursuant to a Securities Purchase Agreement dated August 12, 2022.
August 2022 Warrants to purchase up to 2,122,222 common shares are currently outstanding.
The following summary of certain terms and provisions of the August 2022 Warrants is not complete and is subject to, and qualified in its entirety by, the provisions of the form
of August 2022 Warrant, which was filed as Exhibit 4.3 to our Current Report on Form 6-K filed with the SEC on August 17, 2022 and is incorporated herein by reference.
Exercisability. The exercise price for the August 2022 Warrants per whole common share purchasable upon exercise of the warrants is currently $1.65, as adjusted pursuant to
the terms of the August 2022 Warrants subsequent to their issuance. The August 2022 Warrants are exercisable for a period of five years commencing on the date of issuance. The
August 2022 Warrants are exercisable, at the option of each holder, in whole or in part by delivering to us a duly executed exercise notice with payment in full in immediately available
funds for the number of common shares purchased upon such exercise. If a registration statement registering the resale of the common shares underlying the August 2022 Warrants
under the Securities Act is not effective or available at any time after the six month anniversary of the date of issuance of the August 2022 Warrants, the holder may, in its sole discretion,
elect to exercise the August 2022 Warrant through a cashless exercise, in which case the holder would receive upon such exercise the net number of common shares determined
according to the formula set forth in the Warrant.
Exercise Limitation. A holder will not have the right to exercise any portion of the August 2022 Warrant if the holder (together with its affiliates) would beneficially own in
excess of 4.99% (or, upon election of the holder, 9.99%) of the number of our common shares outstanding immediately after giving effect to the exercise, as such percentage of beneficial
ownership is determined in accordance with the terms of the Warrants. However, any holder may increase or decrease such percentage, but not in excess of 9.99%, provided that any
increase will not be effective until the 61st day after such election.
Exercise Price Adjustment. The exercise price of the August 2022 Warrants is subject to appropriate adjustment in the event of certain stock dividends and distributions, stock
splits, stock combinations, reclassifications or similar events affecting our common shares and also upon any distributions of assets, including cash, stock or other property to our
stockholders. The exercise price of the August 2022 Warrants may also be reduced to any amount and for any period of time at the sole discretion of our board of directors subject to a
floor price of $1.65 (as adjusted for stock splits, reverse stock splits or stock dividends). In addition, the exercise price is also subject to an anti-dilution adjustment if we issue or are
deemed to have issued securities at a price lower than the then applicable exercise price, subject to a floor price of $1.65 (as adjusted for stock splits, reverse stock splits or stock
dividends).
The Warrants require “buy-in” payments to be made by us for failure to deliver any shares of common stock issuable upon exercise.
Exchange Listing. There is no established trading market for the August 2022 Warrants and we do not expect a market to develop. In addition, we do not intend to apply for the
listing of the August 2022 Warrants on any national securities exchange or other trading market.
Fundamental Transactions. If a fundamental transaction occurs, then the successor entity will succeed to, and be substituted for us, and may exercise every right and power
that we may exercise and will assume all of our obligations under the August 2022 Warrants with the same effect as if such successor entity had been named in the warrant itself. If
holders of our common shares are given a choice as to the securities, cash or property to be received in a fundamental transaction, then the holder shall be given the same choice as to
the consideration it receives upon any exercise of the August 2022 Warrant following such fundamental transaction. In addition, the successor entity, at the request of warrant holders,
will be obligated to purchase any unexercised portion of the August 2022 Warrants in accordance with the terms of such Warrants.
10

Rights as a Shareholder. Except as otherwise provided in the August 2022 Warrants or by virtue of such holder’s ownership of our common shares, the holder of an August
2022 Warrant will not have the rights or privileges of a holder of our common shares, including any voting rights, until the issuance of common shares upon exercise of the warrant.
Series A Warrants
On March 3, 2023, we issued 5,556,000 of our common shares, Series A Warrants to purchase up to 3,611,400 common shares and Series B Warrants to purchase up to 4,167,000
common shares in a registered direct offering, with each Series A Warrant and Series B Warrant exercisable to purchase one common share for an initial exercise price of $2.25, for a
purchase price of $2.25 per share, 0.65 of a Series A Warrant and 0.75 of a Series B Warrant. This issuance was conducted pursuant to a Securities Purchase Agreement dated February
28, 2023.
Series A Warrants to purchase up to 14,300 common shares are currently outstanding.
The following summary of certain terms and provisions of the Series A Warrants is not complete and is subject to, and qualified in its entirety by, the provisions of the form of
Series A Warrant, which was filed as Exhibit 4.3 to our Current Report on Form 6-K filed with the SEC on March 3, 2023 and is incorporated herein by reference.
Exercisability. The Series A Warrants are exercisable for a period of five years commencing on the date of issuance. The Series A Warrants will be exercisable, at the option of
each holder, in whole or in part by delivering to us a duly executed exercise notice with payment in full in immediately available funds for the number of common shares purchased upon
such exercise. If a registration statement registering the issuance of the common shares underlying the Series A Warrants under the Securities Act is not effective or available at any time
after the date of issuance of the Series A Warrants, the holder may, in its sole discretion, elect to exercise the Series A Warrants through a cashless exercise, in which case the holder
would receive upon such exercise the net number of common shares determined according to the formula set forth in the Series A Warrant.
Exchangeability. Each Series A Warrant is exchangeable for one common share.
Exercise Limitation. A holder will not have the right to exercise any portion of the Series A Warrant if the holder (together with its affiliates) would beneficially own in excess of
4.99% (or, upon election of the holder, 9.99%) of the number of our common shares outstanding immediately after giving effect to the exercise, as such percentage of beneficial ownership
is determined in accordance with the terms of the Series A Warrants. However, any holder may increase or decrease such percentage, but not in excess of 9.99%, provided that any
increase will not be effective until the 61st day after such election.
Exercise Price Adjustment. The exercise price of the Series A Warrants is subject to appropriate adjustment in the event of certain stock dividends and distributions, stock
splits, stock combinations, reclassifications or similar events affecting our common shares and also upon any distributions of assets, including cash, stock or other property to our
stockholders. The exercise price of the Series A Warrants may also be reduced to any amount not below $0.11 and for any period of time at the sole discretion of our board of directors.
The Series A Warrants require “buy-in” payments to be made by us for failure to deliver any common shares issuable upon exercise.
Exchange Listing. There is no established trading market for the Series A Warrants and we do not expect a market to develop. In addition, we do not intend to apply for the
listing of the Series A Warrants on any national securities exchange or other trading market.
Fundamental Transactions. If a fundamental transaction occurs, then the successor entity will succeed to, and be substituted for us, and may exercise every right and power
that we may exercise and will assume all of our obligations under the Series A Warrants with the same effect as if such successor entity had been named in the Series A Warrant itself. If
holders of our common shares are given a choice as to the securities, cash or property to be received in a fundamental transaction, then the holder shall be given the same choice as to
the consideration it receives upon any exercise of the Series A Warrant following such fundamental transaction. In addition, we or the successor entity, at the request of Series A
Warrant holders, will be obligated to purchase any unexercised portion of the Series A Warrants in accordance with the terms of such Series A Warrants.
11

Rights as a Shareholder. Except as otherwise provided in the Series A Warrants or by virtue of such holder’s ownership of our common shares, the holder of a Series A Warrant
will not have the rights or privileges of a holder of our common shares, including any voting rights, until the issuance of common shares upon exercise or exchange of the Series A
Warrant.
Series B Warrants
On March 3, 2023, we issued 5,556,000 of our common shares, Series A Warrants to purchase up to 3,611,400 common shares and Series B Warrants to purchase up to 4,167,000
common shares in a registered direct offering, with each Series A Warrant and Series B Warrant exercisable to purchase one common share for an initial exercise price of $2.25, for a
purchase price of $2.25 per share, 0.65 of a Series A Warrant and 0.75 of a Series B Warrant. This issuance was conducted pursuant to a Securities Purchase Agreement dated February
28, 2023.
Series B Warrants to purchase up to 4,097,000 common shares are currently outstanding.
The following summary of certain terms and provisions of the Series B Warrants is not complete and is subject to, and qualified in its entirety by, the provisions of the form of
Series B Warrant, which was filed as Exhibit 4.4 to our Current Report on Form 6-K filed with the SEC on March 3, 2023 and is incorporated herein by reference.
Exercisability. The Series B Warrants are exercisable for a period of five years commencing on the date of issuance. The Series B Warrants will be exercisable, at the option of
each holder, in whole or in part by delivering to us a duly executed exercise notice with payment in full in immediately available funds for the number of common shares purchased upon
such exercise. If a registration statement registering the issuance of the common shares underlying the Series B Warrants under the Securities Act is not effective or available at any time
after the date of issuance of the Series B Warrants, the holder may, in its sole discretion, elect to exercise the Series B Warrants through a cashless exercise, in which case the holder
would receive upon such exercise the net number of common shares determined according to the formula set forth in the Series B Warrant.
Exercise Limitation. A holder will not have the right to exercise any portion of the Series B Warrant if the holder (together with its affiliates) would beneficially own in excess of
4.99% (or, upon election of the holder, 9.99%) of the number of our common shares outstanding immediately after giving effect to the exercise, as such percentage of beneficial ownership
is determined in accordance with the terms of the Series B Warrants. However, any holder may increase or decrease such percentage, but not in excess of 9.99%, provided that any
increase will not be effective until the 61st day after such election.
Exercise Price Adjustment. The exercise price of the Series B Warrants is subject to appropriate adjustment in the event of certain stock dividends and distributions, stock
splits, stock combinations, reclassifications or similar events affecting our common shares and also upon any distributions of assets, including cash, stock or other property to our
stockholders. The exercise price of the Series B Warrants may also be reduced to any amount not below $0.11 and for any period of time at the sole discretion of our board of directors.
The Series B Warrants require “buy-in” payments to be made by us for failure to deliver any common shares issuable upon exercise.
Exchange Listing. There is no established trading market for the Series B Warrants and we do not expect a market to develop. In addition, we do not intend to apply for the
listing of the Series B Warrants on any national securities exchange or other trading market.
Fundamental Transactions. If a fundamental transaction occurs, then the successor entity will succeed to, and be substituted for us, and may exercise every right and power
that we may exercise and will assume all of our obligations under the Series B Warrants with the same effect as if such successor entity had been named in the Series B Warrant itself. If
holders of our common shares are given a choice as to the securities, cash or property to be received in a fundamental transaction, then the holder shall be given the same choice as to
the consideration it receives upon any exercise of the Series B Warrant following such fundamental transaction. In addition, we or the successor entity, at the request of Series B Warrant
holders, will be obligated to purchase any unexercised portion of the Series B Warrants in accordance with the terms of such Series B Warrants.
12

Rights as a Shareholder. Except as otherwise provided in the Series B Warrants or by virtue of such holder’s ownership of our common shares, the holder of a Series B Warrant
will not have the rights or privileges of a holder of our common shares, including any voting rights, until the issuance of common shares upon exercise of the Series B Warrant.
 
Directors
 
Our directors are elected by a plurality of the votes cast by shareholders entitled to vote. There is no provision for cumulative voting.
 
Our board of directors must consist of at least three members. Our amended and restated articles of incorporation provide that the board of directors may only change the
number of directors by a vote of not less than two-thirds of the entire board. Directors are elected annually on a staggered basis, and each shall serve for a three-year term and until his
successor shall have been duly elected and qualified, except in the event of his death, resignation, removal, or the earlier termination of his term of office. Our board of directors has the
authority to fix the amounts which shall be payable to the members of the board of directors for attendance at any meeting or for services rendered to us.
 
Shareholder Meetings
 
Under our amended and restated bylaws, annual shareholder meetings will be held at a time and place selected by our board of directors. The meetings may be held in or outside
the Marshall Islands. Special meetings may be called for any purpose or purposes at any time by a majority of our board of directors, the chairman of our board of directors or an officer
of the Company who is also a director. Our board of directors may set a record date between 15 and 60 days before the date of any meeting to determine the shareholders that will be
eligible to receive notice and vote at the meeting. Shareholders of record holding at least one-third of the shares issued and outstanding and entitled to vote at such meetings, present in
person or by proxy, will constitute a quorum at all meetings of shareholders.
 
Dissenters’ Rights of Appraisal and Payment
 
Under the Marshall Islands Business Corporations Act, or the BCA, our shareholders have the right to dissent from various corporate actions, including any merger or
consolidation sale of all or substantially all of our assets not made in the usual course of our business, and receive payment of the fair value of their shares. In the event of any further
amendment of our amended and restated articles of incorporation a shareholder also has the right to dissent and receive payment for his or her shares if the amendment alters certain
rights in respect of those shares. The dissenting shareholder must follow the procedures set forth in the BCA to receive payment. In the event that we and any dissenting shareholder
fail to agree on a price for the shares, the BCA procedures involve, among other things, the institution of proceedings in the high court of the Republic of the Marshall Islands or in any
appropriate court in any jurisdiction in which the Company’s shares are primarily traded on a local or national securities exchange.
 
Shareholders’ Derivative Actions
 
Under the BCA, any of our shareholders may bring an action in our name to procure a judgment in our favor, also known as a derivative action, provided that the shareholder
bringing the action is a holder of common stock both at the time the derivative action is commenced and at the time of the transaction to which the action relates.
 
Limitations on Liability and Indemnification of Officers and Directors
 
The BCA authorizes corporations to limit or eliminate the personal liability of directors to corporations and their shareholders for monetary damages for breaches of directors’
fiduciary duties.
 
Our amended and restated bylaws provide that certain individuals, including our directors and officers, are entitled to be indemnified by us to the extent authorized by the BCA,
if such individuals acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the Company, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe their conduct was unlawful. We shall have the power to pay in advance expenses a director or officer incurred while defending a civil or
criminal proceeding, subject to certain conditions. We believe that these indemnification provisions and insurance are useful to attract and retain qualified directors and executive
officers.
 
13

The limitation of liability and indemnification provisions in our amended and restated bylaws may discourage shareholders from bringing a lawsuit against our directors for
breach of their fiduciary duties. These provisions may also have the effect of reducing the likelihood of derivative litigation against our directors and officers, even though such an
action, if successful, might otherwise benefit us and our shareholders. In addition, your investment may be adversely affected to the extent we pay the costs of settlement and damage
awards against our directors and officers pursuant to these indemnification provisions.
 
Anti-takeover Effect of Certain Provisions of our Amended and Restated Articles of Incorporation and Amended and Restated Bylaws
 
Several provisions of our amended and restated articles of incorporation and amended and restated bylaws may have anti-takeover effects. These provisions, which are
summarized below, are intended to avoid costly takeover battles, lessen our vulnerability to a hostile change of control and enhance the ability of our board of directors to maximize
shareholder value in connection with any unsolicited offer to acquire us. However, these anti-takeover provisions could also discourage, delay or prevent (i) the merger or acquisition of
our Company by means of a tender offer, a proxy contest or otherwise that a shareholder may consider in its best interest and (ii) the removal of incumbent officers and directors.
 
Blank Check Preferred Stock
 
Under the terms of our amended and restated articles of incorporation, our board of directors has authority, without any further vote or action by our shareholders, to issue up
to 25,000,000 shares of blank check preferred stock. Our board of directors may issue shares of preferred stock on terms calculated to discourage, delay or prevent a change of control of
our company or the removal of our management.
 
Classified Board of Directors
 
Our amended and restated articles of incorporation provide for the division of our board of directors into three classes of directors, with each class as nearly equal in number as
possible, serving staggered, three-year terms. Approximately one-third of our board of directors is elected each year. This classified board provision could discourage a third party from
making a tender offer for our shares or attempting to obtain control of us. It could also delay shareholders who do not agree with the policies of our board of directors from removing a
majority of our board of directors for two years.
 
Election and Removal of Directors
 
Our amended and restated articles of incorporation prohibit cumulative voting in the election of directors. Our amended and restated bylaws require parties other than the board
of directors to give advance written notice of nominations for the election of directors. Our amended and restated articles of incorporation also provide that our directors may be
removed only for cause and only upon the affirmative vote of two-thirds of the outstanding shares of our capital stock entitled to vote for those directors. These provisions may
discourage, delay or prevent the removal of incumbent officers and directors.
 
Limited Actions by Shareholders
 
Under the BCA, our amended and restated articles of incorporation and our amended and restated bylaws, any action required or permitted to be taken by our shareholders
must be effected at an annual or special meeting of shareholders or by the unanimous written consent of our shareholders. Our amended and restated articles of incorporation and
amended and restated bylaws provide that, unless otherwise prescribed by law, only a majority of our board of directors, the chairman of our board of directors or an officer of the
Company who is also a director may call special meetings of our shareholders, and the business transacted at the special meeting is limited to the purposes stated in the notice.
Accordingly, a shareholder may be prevented from calling a special meeting for shareholder consideration of a proposal over the opposition of our board of directors and shareholder
consideration of a proposal may be delayed until the next annual meeting.
 
14

Advance Notice Requirements for Shareholder Proposals and Director Nominations
 
Our amended and restated bylaws provide that shareholders seeking to nominate candidates for election as directors or to bring business before an annual meeting of
shareholders must provide timely notice of their proposal in writing to the corporate secretary. Generally, to be timely, a shareholder’s notice must be received at our principal executive
offices not less than 150 days nor more than 180 days prior to the one-year anniversary of the preceding year’s annual meeting. Our amended and restated bylaws also specify
requirements as to the form and content of a shareholder’s notice. These provisions may impede shareholders’ ability to bring matters before an annual meeting of shareholders or make
nominations for directors at an annual meeting of shareholders.
 
Registrar and Transfer Agent
 
The board of directors has the power and authority to make such rules and regulations as they may deem expedient concerning the issuance, registration and transfer of shares
of the Company’s stock, and may appoint transfer agents and registrars thereof.
 
Listing
 
Our common shares are listed on The Nasdaq Capital Market under the symbol “PSHG.”
 
Comparison of Marshall Island Law to Delaware Law
 
The following table provides a comparison between some statutory provisions of the Delaware General Company Law and the Marshall Islands Business Corporations Act relating to
shareholders’ rights.
Marshall Islands
 
Delaware
Shareholder Meetings
Held at a time and place as designated in the bylaws.
 
May be held at such time or place as designated in the certificate of incorporation or the
bylaws, or if not so designated, as determined by the board of directors.
 
 
Special meetings of the shareholders may be called by the board of directors or by such
person or persons as may be authorized by the articles of incorporation or by the bylaws.
 
Special meetings of the shareholders may be called by the board of directors or by such
person or persons as may be authorized by the certificate of incorporation or by the
bylaws.
 
 
May be held within or outside the Marshall Islands.
 
May be held within or outside Delaware.
 
 
Notice:
 
Notice:
 
 
Whenever shareholders are required to take any action at a meeting, written notice of the
meeting shall be given which shall state the place, date and hour of the meeting and,
unless it is an annual meeting, indicate that it is being issued by or at the direction of the
person calling the meeting. Notice of a special meeting shall also state the purpose for
which the meeting is called.
 
Whenever shareholders are required to take any action at a meeting, a written notice of the
meeting shall be given which shall state the place, if any, date and hour of the meeting, and
the means of remote communication, if any.
 
 
A copy of the notice of any meeting shall be given personally, sent by mail or by electronic
mail not less than 15 nor more than 60 days before the meeting.
 
Written notice shall be given not less than 10 nor more than 60 days before the meeting.
 
 
 
Marshall Islands
 
Delaware
Shareholders’ Voting Rights
Unless otherwise provided in the articles of incorporation, any action required to be taken
at a meeting of shareholders may be taken without a meeting, without prior notice and
without a vote, if a consent in writing, setting forth the action so taken, is signed by all the
shareholders entitled to vote with respect to the subject matter thereof, or if the articles of
incorporation so provide, by the holders of outstanding shares having not less than the
minimum number of votes that would be necessary to authorize or take such action at a
meeting at which all shares entitled to vote thereon were present and voted.
 
Any action required to be taken at a meeting of shareholders may be taken without a
meeting if a consent for such action is in writing and is signed by shareholders having not
fewer than the minimum number of votes that would be necessary to authorize or take
such action at a meeting at which all shares entitled to vote thereon were present and
voted.
 
15

Any person authorized to vote may authorize another person or persons to act for him by
proxy.
 
Any person authorized to vote may authorize another person or persons to act for him by
proxy.
 
Unless otherwise provided in the articles of incorporation or bylaws, a majority of shares
entitled to vote constitutes a quorum. In no event shall a quorum consist of fewer than
one-third of the shares entitled to vote at a meeting.
 
For stock corporations, the certificate of incorporation or bylaws may specify the number
of shares required to constitute a quorum but in no event shall a quorum consist of less
than one-third of shares entitled to vote at a meeting. In the absence of such
specifications, a majority of shares entitled to vote shall constitute a quorum.
 
 
When a quorum is once present to organize a meeting, it is not broken by the subsequent
withdrawal of any shareholders.
 
When a quorum is once present to organize a meeting, it is not broken by the subsequent
withdrawal of any shareholders.
 
 
The articles of incorporation may provide for cumulative voting in the election of directors.
 
The certificate of incorporation may provide for cumulative voting in the election of
directors.
 
Merger or Consolidation
Any two or more domestic corporations may merge into a single corporation if approved
by the board and if authorized by a majority vote of the holders of outstanding shares at a
shareholder meeting.
 
Any two or more corporations existing under the laws of the state may merge into a single
corporation pursuant to a board resolution and upon the majority vote by shareholders of
each constituent corporation at an annual or special meeting.
 
 
Any sale, lease, exchange or other disposition of all or substantially all the assets of a
corporation, if not made in the corporation’s usual or regular course of business, once
approved by the board, shall be authorized by the affirmative vote of two-thirds of the
shares of those entitled to vote at a shareholder meeting.
 
Every corporation may at any meeting of the board sell, lease or exchange all or
substantially all of its property and assets as its board deems expedient and for the best
interests of the corporation when so authorized by a resolution adopted by the holders of
a majority of the outstanding stock of the corporation entitled to vote.
 
 
Any domestic corporation owning at least 90% of the outstanding shares of each class of
another domestic corporation may merge such other corporation into itself without the
authorization of the shareholders of any corporation.
 
Any corporation owning at least 90% of the outstanding shares of each class of another
corporation may merge the other corporation into itself and assume all of its obligations
without the vote or consent of shareholders; however, in case the parent corporation is
not the surviving corporation, the proposed merger shall be approved by a majority of the
outstanding stock of the parent corporation entitled to vote at a duly called shareholder
meeting.
 
 
Any mortgage, pledge of or creation of a security interest in all or any part of the corporate
property may be authorized without the vote or consent of the shareholders, unless
otherwise provided for in the articles of incorporation.
 
Any mortgage or pledge of a corporation’s property and assets may be authorized without
the vote or consent of shareholders, except to the extent that the certificate of
incorporation otherwise provides.
16

 
 
 
 
 
 
Marshall Islands
 
Delaware
 
Directors
The board of directors must consist of at least one member.
 
The board of directors must consist of at least one member.
 
 
The number of board members may be changed by an amendment to the bylaws, by the
shareholders, or by action of the board under the specific provisions of a bylaw.
 
The number of board members shall be fixed by, or in a manner provided by, the bylaws,
unless the certificate of incorporation fixes the number of directors, in which case a change
in the number shall be made only by an amendment to the certificate of incorporation.
 
 
 
If the board is authorized to change the number of directors, it can only do so by a majority
of the entire board and so long as no decrease in the number shall shorten the term of any
incumbent director.
 
If the number of directors is fixed by the certificate of incorporation, a change in the
number shall be made only by an amendment of the certificate.
 
 
Removal:
 
Removal:
 
 
 
Any or all of the directors may be removed for cause by vote of the shareholders.
 
Any or all of the directors may be removed, with or without cause, by the holders of a
majority of the shares entitled to vote unless the certificate of incorporation otherwise
provides.
 
 
If the articles of incorporation or the bylaws so provide, any or all of the directors may be
removed without cause by vote of the shareholders.
 
In the case of a classified board, shareholders may effect removal of any or all directors
only for cause.
 
Dissenters’ Rights of Appraisal
Shareholders have a right to dissent from any plan of merger, consolidation or sale of all or
substantially all assets not made in the usual course of business, and receive payment of
the fair value of their shares. However, the right of a dissenting shareholder under the BCA
to receive payment of the appraised fair value of his shares shall not be available for the
shares of any class or series of stock, which shares or depository receipts in respect
thereof, at the record date fixed to determine the shareholders entitled to receive notice of
and to vote at the meeting of the shareholders to act upon the agreement of merger or
consolidation, were either (i) listed on a securities exchange or admitted for trading on an
interdealer quotation system or (ii) held of record by more than 2,000 holders. The right of
a dissenting shareholder to receive payment of the fair value of his or her shares shall not
be available for any shares of stock of the constituent corporation surviving a merger if the
merger did not require for its approval the vote of the shareholders of the surviving
corporation.
 
Appraisal rights shall be available for the shares of any class or series of stock of a
corporation in a merger or consolidation, subject to limited exceptions, such as a merger or
consolidation of corporations listed on a national securities exchange in which listed stock
is offered for consideration is (i) listed on a national securities exchange or (ii) held of
record by more than 2,000 holders.
 
 
A holder of any adversely affected shares who does not vote on or consent in writing to
an amendment to the articles of incorporation has the right to dissent and to receive
payment for such shares if the amendment:
 
 
17

 
 
 
 
Marshall Islands
 
Delaware
•          Alters or abolishes any preferential right of any outstanding shares having preference; or
•          Creates, alters, or abolishes any provision or right in respect to the redemption of any outstanding shares; or
•          Alters or abolishes any preemptive right of such holder to acquire shares or other securities; or
•          Excludes or limits the right of such holder to vote on any matter, except as such right may be limited by the voting rights given to new shares then being authorized of any
existing or new class.
 
Shareholder’s Derivative Actions
An action may be brought in the right of a corporation to procure a judgment in its favor,
by a holder of shares or of voting trust certificates or of a beneficial interest in such shares
or certificates. It shall be made to appear that the plaintiff is such a holder at the time of
bringing the action and that he was such a holder at the time of the transaction of which he
complains, or that his shares or his interest therein devolved upon him by operation of law. 
In any derivative suit instituted by a shareholder of a corporation, it shall be averred in the
complaint that the plaintiff was a shareholder of the corporation at the time of the
transaction of which he complains or that such shareholder’s stock thereafter devolved
upon such shareholder by operation of law.
 
 
A complaint shall set forth with particularity the efforts of the plaintiff to secure the
initiation of such action by the board or the reasons for not making such effort.
 
Other requirements regarding derivative suits have been created by judicial decision,
including that a shareholder may not bring a derivative suit unless he or she first demands
that the corporation sue on its own behalf and that demand is refused (unless it is shown
that such demand would have been futile).
Such action shall not be discontinued, compromised or settled, without the approval of the
High Court of the Republic of the Marshall Islands.
 
 
 
 
Reasonable expenses including attorney’s fees may be awarded if the action is successful.  
 
 
 
A corporation may require a plaintiff bringing a derivative suit to give security for
reasonable expenses if the plaintiff owns less than 5% of any class of outstanding shares
or holds voting trust certificates or a beneficial interest in shares representing less than 5%
of any class of such shares and the shares, voting trust certificates or beneficial interest of
such plaintiff has a fair value of  $50,000 or less.
 
 
18

Exhibit 4.24
 
SHIPBUILDING CONTRACT
(CONTRACT NO.: 2024YZJ849GR)
 
FOR CONSTRUCTION OF
ONE 75,000 DWT PRODUCT OIL / CHEMICAL TANKER
(HULL NO.: YZJ2024-1624)
 
BETWEEN
 
SAINT BARTH SHIPPING COMPANY INC.
 
AS BUYER
AND
JIANGSU YANGZIJIANG SHIPBUILDING GROUP CO., LTD.
 
AND
JIANGSU NEW YANGZI SHIPBUILDING CO., LTD.
AND
 
JIANGSU YANGZI XINFU SHIPBUILDING CO., LTD.
 
COLLECTIVELY AS SELLER
 
30TH APRIL, 2024

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
CONTENTS
SHIPBUILDING CONTRACT
6
 
 
ARTICLE I - DESCRIPTION AND CLASS.
8
 
1. DESCRIPTION
8
 
2. CLASSIFICATION, RULES AND REGULATIONS 
8
 
3. PRINCIPAL PARTICULARS AND DIMENSIONS OF THE VESSEL 
10
 
4. GUARANTEED SPEED 
10
 
5. GUARANTEED FUEL CONSUMPTION
10
 
6. GUARANTEED DEADWEIGHT 
10
 
7. SUBCONTRACTING
11
 
8. REGISTRATION 
12
 
9. BUYER AND CLASSIFICATION SOCIETY COMMUNICATION
12
 
10. IDENTIFICATION OF MATERIALS, ETC.
13
 
ARTICLE II - CONTRACT PRICE & TERMS OF PAYMENT 
14
 
 
1. CONTRACT PRICE 
14
 
 
2. CURRENCY 
14
 
 
3. TERMS OF PAYMENT 
15
 
4. METHOD OF PAYMENT
16
 
 
5. PREPAYMENT 
18
 
 
6. SECURITY FOR PAYMENT OF INSTALMENTS BEFORE DELIVERY
18
 
 
7. REFUNDS
19
 
 
ARTICLE III - ADJUSTMENT OF THE CONTRACT PRICE 
21
 
 
1. DELAYED DELIVERY
21
 
 
2. INSUFFICIENT SPEED 
22
 
 
3. EXCESSIVE FUEL CONSUMPTION 
23
 
 
4. INSUFFICIENT DEADWEIGHT 
25
 
 
5. EFFECT OF TERMINATION, CANCELLATION OR RESCISSION 
25
 
 
ARTICLE IV - SUPERVISION AND INSPECTION
27
Page 2 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
1. APPOINTMENT OF THE BUYER’S SUPERVISOR 
27
 
 
2. APPROVAL OF PLANS AND DRAWINGS 
27
 
 
3. SUPERVISION AND INSPECTION BY THE SUPERVISOR
28
 
 
4. LIABILITY OF THE SELLER
31
 
 
5. SALARIES AND EXPENSES 
32
 
 
6. REPLACEMENT OF SUPERVISOR 
32
 
 
ARTICLE V - MODIFICATION, CHANGES AND EXTRAS
33
 
 
1. HOW EFFECTED
33
 
 
2. CHANGES IN RULES AND REGULATIONS, ETC. 
33
 
 
3. SUBSTITUTION OF MATERIALS AND/OR EQUIPMENT
35
 
 
4. BUYER’S SUPPLIED ITEMS 
35
 
 
ARTICLE VI - TRIALS 
37
 
 
1. NOTICE 
37
 
 
2. HOW CONDUCTED 
38
 
 
3. TRIAL LOAD DRAFT 
39
 
 
4. METHOD OF ACCEPTANCE OR REJECTION 
39
 
 
5. DISPOSITION OF SURPLUS CONSUMABLE STORES 
41
 
 
6. EFFECT OF ACCEPTANCE 
41
 
 
ARTICLE VII - DELIVERY 
43
 
 
1. TIME AND PLACE
43
 
 
2. WHEN AND HOW EFFECTED
43
 
 
3. DOCUMENTS TO BE DELIVERED TO THE BUYER 
44
 
 
4. TITLE AND RISK 
 46
 
 
5. REMOVAL OF VESSEL 
46
 
 
6. TENDER OF THE VESSEL
47
 
 
ARTICLE VIII - DELAYS & EXTENSION OF TIME FOR DELIVERY
48
 
 
1. CAUSE OF PERMISSIBLE DELAYS
48
 
 
2. NOTICE OF DELAY
49
 
 
3. RIGHT TO CANCEL FOR EXCESSIVE DELAY
50
Page 3 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
4. DEFINITION OF PERMISSIBLE DELAY 
51
 
 
ARTICLE IX - WARRANTY OF QUALITY 
52
 
 
1. GUARANTEE OF MATERIAL AND WORKMANSHIP
52
 
 
2. NOTICE OF DEFECTS
53
 
 
3. REMEDY OF DEFECTS
53
 
 
4. EXTENT OF THE SELLER’S LIABILITY 
 55
 
 
ARTICLE X - CANCELLATION, REJECTION AND RESCISSION BY THE BUYER 
57
 
 
ARTICLE XI - BUYER’S DEFAULT
60
 
 
1. DEFINITION OF BUYER’S DEFAULT 
60
 
 
2. NOTICE OF DEFAULT 
61
 
 
3. INTEREST AND CHARGE 
61
 
 
4. DEFAULT BEFORE DELIVERY OF THE VESSEL 
62
 
 
5. SALE OF THE VESSEL 
62
 
 
ARTICLE XII - INSURANCE 
65
 
 
1. EXTENT OF INSURANCE COVERAGE
65
 
 
2. APPLICATION OF RECOVERED AMOUNT 
 65
 
 
3. TERMINATION OF THE SELLER’S OBLIGATION TO INSURE 
67
 
 
ARTICLE XIII - DISPUTES AND ARBITRATION 
68
 
 
1. RULES, REGULATIONS AND REQUIREMENTS OF CLASSIFICATION SOCIETY 
68
 
 
2. TECHINICAL MATTERS 
 68
 
 
3. PROCEEDINGS 
68
 
 
4. ALTERNATIVE SETTLEMENT BY AGREEMENT 
69
 
5. NOTICE OF AWARD
70
 
 
6. EXPENSES 
70
 
 
7. AWARD OF ARBITRATION
70
 
 
8. ENTRY IN COURT
70
 
 
9. ALTERATION OF DELIVERY TIME
70
Page 4 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
ARTICLE XIV - RIGHT OF ASSIGNMENT OR NOVATION 
71
 
 
ARTICLE XV - TAXES AND DUTIES 
72
 
 
1. TAXES
72 
 
 
2. DUTIES 
72
 
 
ARTICLE XVI - PATENTS, TRADEMARKS AND COPYRIGHTS 
73
 
 
ARTICLE XVII - NOTICE 
74
 
 
ARTICLE XVIII - EFFECTIVE DATE OF CONTRACT
76
 
 
ARTICLE XIX - INTERPRETATION
77 
 
 
1. LAW APPLICABLE 
77
 
 
2. DISCREPANCIES 
77
 
 
3. DEFINITION 
77
 
 
4. ENTIRE AGREEMENT 
78
 
 
EXHIBIT “A”: IRREVOCABLE LETTER OF REFUND GUARANTEE
80
 
 
EXHIBIT “B”: IRREVOCABLE LETTER OF CORPORATE GUARANTEE
87
Page 5 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
SHIPBUILDING CONTRACT
(CONTRACT NO.: 2024YZJ849GR)
FOR CONSTRUCTION OF
ONE 75,000 DWT PRODUCT OIL / CHEMICAL TANKER
(HULL NO.: YZJ2024-1624)
 
THIS CONTRACT, is made and entered into on this 30th day of April 2024, by and between
 
SAINT BARTH SHIPPING COMPANY INC., a corporation organized and existing under the Laws of Republic of the Marshall Islands, having its registered address at Trust Company
Complex, Ajeltake Road, Ajeltake Island, Majuro Marshall Islands MH96960 (hereinafter called the “BUYER”) on one part; and
 
JIANGSU YANGZIJIANG SHIPBUILDING GROUP CO., LTD., a corporation organized and existing under the Laws of the People’s Republic of China, having its registered office at No.1
Lianyi Road, Jingjiang Park of Jiangyin Economic Development Zone, Jingjiang City, Jiangsu Province, the People’s Republic of China (hereinafter called “JYS”), JIANGSU NEW
YANGZI SHIPBUILDING CO., LTD., a corporation organized and existing under the Laws of the People’s Republic of China, having its registered office at Jingjiang Park of Jiangyin
Economic Development Zone, Jingjiang City, Jiangsu Province, the People’s Republic of China (hereinafter called the “JNYS”) and JIANGSU YANGZI XINFU SHIPBUILDING CO., LTD.,
a corporation organized and existing under the Laws of the People’s Republic of China, having its registered office at Hongqiao Industrial Park, Taixing City, Jiangsu Province, the
People’s Republic of China (hereinafter called the “JYXS”) (hereinafter JYS, JNYS and JYXS are hereinafter collectively called the “SELLER”) on the other part.
 
JYS, JNYS and JYXS are severally and jointly liable under this CONTRACT. Any failure of any of them shall be deemed as if this failure is made by the SELLER.
 
Page 6 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
WITNESSETH
In consideration of the mutual covenants contained herein, the SELLER agrees to design, build, launch, equip, trial test and complete at the shipyard of JNYS located at  Jingjiang Park of
Jiangyin Economic Development Zone, Jingjiang City, Jiangsu Province, the People’s Republic of China (hereinafter called the “SHIPYARD”) and to sell and deliver to the BUYER after
completion and conclusion of successful sea trial in accordance with this CONTRACT and the SPECIFICATIONS of ONE (1) 75,000 DWT PRODUCT OIL / CHEMICAL TANKER as more
fully described in Article I hereof (hereinafter called the “VESSEL”), to be registered under the flag of Marshall Islands and the BUYER agrees to purchase and take delivery of the
aforesaid VESSEL from the SELLER and to pay for the same in accordance with the terms and conditions hereinafter set forth.
Page 7 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
ARTICLE I - DESCRIPTION AND CLASS
1.
DESCRIPTION
The VESSEL is a Product Oil / Chemical Tanker of 74,700 metric tons deadweight at scantling draft moulded of 13.70 meters of the class described below, having the SELLER’S Hull No.:
YZJ2024-1624 and shall be designed, constructed, equipped and completed identical to the vessel with the SELLER’s Hull No.: YZJ2023-1529 (hereinafter called the “Reference Vessel”) in
accordance with the following “Specifications”:
 
(a) Building Specification with Ref. No. SC5247F3-010-02SM dated 30th April 2024;
 
(b) General Arrangement Plan with Ref. No. SC2019-B5022F4-03 dated 30th April 2024;
 
(c) Midship Section with Ref. No. SC5247F3-010-04 dated 30th April 2024;  
(d) Makers List with Ref. No. SC5247F3-010-05PFM dated 30th April 2024;
(e) Buyer’s Comments on Building Specification with Ref. No. SC5247F3- 010D-02SM dated 30th April 2024 amending the documents listed at (a) to (c) above (“Specification
Addendum”).
attached hereto and signed by each of the parties to this CONTRACT (hereinafter collectively called the “SPECIFICATIONS”), making an integral part hereof.
 
2.
CLASSIFICATION, RULES AND REGULATIONS
The VESSEL, including its machinery, equipment and outfittings, shall be constructed in accordance with the rules and regulations which have already been issued/published, effective
and become compulsorily applicable on or before the date of signing this CONTRACT of Lloyd’s Register of Shipping (hereinafter called the “Classification Society”), and shall be
distinguished in the record by the symbol of:
 
+100A1, Double Hull Oil and Chemical Tanker, Ship Type 3, CSR, ESP, ShipRight(CM,ACS(B)),LI,*IWS,SPM4,ECO(P,VECS-L), +LMC,UMS,BWTS,IGS, EGCN(SCR), EGCS(Open, Partial),
With descriptive Note “shipRight(BWMP(S,T),IHM,SCM,SERS” and shall also comply with the rules and regulations and requirements of the regulatory authorities in respect of the
VESSEL as fully described in the SPECIFICATIONS.
Page 8 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
The requirements of the authorities as fully described in the SPECIFICATIONS including that of the Classification Society, Flag State and other regulatory bodies are to include any
additional rules or circulars thereof which have already been issued/published, effective and become compulsorily applicable on or before the date of signing this CONTRACT.
 
The SELLER shall arrange with the Classification Society to assign a representative or representatives (hereinafter called the “Classification Surveyor”) to the SHIPYARD for supervision
of the construction of the VESSEL.
 
All fees and charges incidental to classification of the VESSEL in compliance with all the rules, regulations and the requirements of this CONTRACT as described in the
SPECIFICATIONS which have already been issued/published, effective and become compulsorily applicable on or before the date of signing this CONTRACT as well as royalties, if any,
payable on account of the construction of the VESSEL shall be for the account of the SELLER, except as otherwise provided and agreed herein.
 
The key plans, materials and workmanship entering into the construction of the VESSEL shall at all times be subject to inspections and tests in accordance with the rules and regulations
of the Classification Society and other regulatory bodies as described in the SPECIFICATIONS and the SELLER shall ensure that all classification and other regulatory inspections take
place in good time and with satisfactory results.
 
Decisions of the head office of the Classification Society as to compliance or noncompliance with Classification rules and regulations shall be final and binding upon the parties hereto.
Page 9 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
3.
PRINCIPAL PARTICULARS AND DIMENSIONS OF THE VESSEL
(a) Hull:
Length, overall
abt. 228.00 m
Length, between perpendiculars
abt. 224.00 m
Breadth, moulded
36.00 m
Depth, moulded
20.00 m
Designed draft, moulded
12.20 m
Scantling draft, moulded
~13.70 m
(b) Propelling Machinery:
 
The VESSEL shall be equipped, in accordance with the SPECIFICATIONS, with one (1) set of MAN 5G60ME-C10.5-HPSCR type Main Engine.
4.
GUARANTEED SPEED
The SELLER guarantees that the service speed of the VESSEL after correction is to be not less than 14.5 knots (the “Guaranteed Speed”), in design draft of 12.20 m at main engine output
of 6,660 kW at 71.3 RPM (NCR) with 15% sea margin, with new and clean hull and propeller, smooth and deep water, calm sea condition with no wind, no wave and no current as
stipulated in the SPECIFICATIONS.
 
The trial speed shall be corrected for wind speed, wave and shallow water effect, etc. The correction method of the speed shall be as specified in the SPECIFICATIONS.
 
5.
GUARANTEED FUEL CONSUMPTION
The SELLER guarantees that the specific fuel oil consumption of the Main Engine in Tier II mode is not to exceed:
156.0 g/kwh (the “Guaranteed Fuel Consumption”) (Tolerance: + 6%) at NCR output (80.73 percent SMCR output) (6,660 kW at 71.3 RPM) measured during the Main Engine maker’s
shop trial under ISO3046-I ambient reference condition and diesel fuel oil having a lower calorific value of 42,700 KJ/kg.
 
6.
GUARANTEED DEADWEIGHT
The SELLER guarantees that the VESSEL is to have a deadweight of not less than 74,700 metric tons (the “Guaranteed Deadweight”) at the scantling draft moulded of 13.70 meters in sea
water of 1.025 specific gravity.
Page 10 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
The term, “Deadweight”, as used in this CONTRACT, shall be as defined in the SPECIFICATIONS.
 
The actual deadweight of the VESSEL expressed in metric tons shall be based on calculations made by the SELLER and checked by the BUYER, and all measurements necessary for such
calculations shall be performed in the presence of the BUYER’S supervisor(s) or the representative(s) authorized by the BUYER and the Classification Surveyor.
Should there be any dispute between the SELLER and the BUYER in connection with such calculations and/or measurements, the decision of the Classification Society shall be final and
binding upon the parties hereto.
 
7.
SUBCONTRACTING
The SELLER may, at its sole discretion and responsibility, subcontract part of the construction work of the VESSEL to any qualified subcontractors, subject to the BUYER’S prior written
consent in accordance with the SPECIFICATIONS, but always on the basis that final assembly into the VESSEL of any such work subcontracted, and delivery of the VESSEL, shall be at
the SHIPYARD. In any event the SELLER shall remain fully responsible for any part of the VESSEL and the construction work subcontracted in accordance with this CONTRACT and/or
the SPECIFICATIONS.
 
For purposes of this CONTRACT (and subject to final assembly, and delivery, at the SHIPYARD, as above), elements of the construction work (such as block and hatch cover
fabrication) can be also carried out by JIANGSU YANGZIJIANG SHIPBUILDING GROUP CO., LTD. and JIANGSU YANGZI XINFU SHIPBUILDING CO., LTD.
 
No subcontract shall bind or purport to bind the BUYER.
All subcontractors howsoever employed or engaged are hereby declared and agreed to be subcontractors employed or engaged by the SELLER and the SELLER agrees that it is and
shall remain fully responsible for and liable in respect of any subcontractors and/or their acts or omissions and shall not be relieved from any of its obligations and liabilities under this
CONTRACT and, without prejudice to the generality of the foregoing, the SELLER shall ensure control over supervision and scheduling of the all work related to this VESSEL done by
subcontractors.
 
Page 11 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
The SELLER hereby agrees that if any of its employees, servants or agents or those of the subcontractors appointed pursuant to this CONTRACT shall, in the reasonable opinion of the
BUYER’S representative, not be carrying out properly their duties and responsibilities under or pursuant to the terms of this CONTRACT, the BUYER shall be entitled (by giving written
notice to the SELLER) to draw the same to the attention of the SELLER and, if the BUYER considers it necessary, to request the SELLER to replace such person(s) if the same are its own
employees, servants or agents, or to use its reasonable endeavors to replace such person(s) if employees, servants or agents of a subcontractor. The SELLER shall investigate any such
request, and if found justified take appropriate action. Any such replacement shall be within such a time scale so as to ensure that the SELLER continues to carry out all of its duties and
obligations under or pursuant to this CONTRACT.
 
The BUYER will not contract directly with the suppliers in respect of items or materials in the Makers List with Ref. No. SC5247F3-010-05PFM dated
30th April 2024 agreed between the parties.
8.
REGISTRATION
The VESSEL shall be built by the SELLER to fly the flag of Marshall Islands and shall be registered by the BUYER at its own cost and expenses under the Laws of Marshall Islands at the
time of delivery and acceptance thereof.
 
9.
BUYER AND CLASSIFICATION SOCIETY COMMUNICATOIN
The SELLER accepts that the BUYER and Classification Society may communicate during the design, building, launching, equipping and completion of the VESSEL and the BUYER has
the right to have full access and be copied in the relevant technical correspondence and to attend meetings between the SELLER and the Classification Society if the BUYER so requires.
Page 12 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
10. IDENTIFICATION OF MATERIALS, ETC.
All parts, material, machinery and equipment allocated to the construction of the VESSEL by any of the SELLER’S companies shall be identified as belonging to the VESSEL and plainly
marked either with the hull number, or with other appropriate markings or symbols of identification according to the SHIPYARD’S normal practice.
 
(End of Article)
Page 13 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
ARTICLE II - CONTRACT PRICE & TERMS OF PAYMENT
1.
CONTRACT PRICE
The purchase price of the VESSEL delivered to the BUYER at the SHIPYARD is United States Dollars Fifty-Six Million Five Hundred and Thirty-Three Thousand Only (USD
56,533,000.00), net receivable by the SELLER (hereinafter called the “Contract Price”), which is exclusive of the cost for the BUYER’S Supplied Items as provided in Article V hereof and
shall be subject to upward or downward adjustment, if any, as hereinafter set forth in this CONTRACT.
 
The Contract Price shall include payment for services in the inspection, tests, survey and classification of the VESSEL which will be rendered by the Classification Society and/or
regulatory bodies as referred to in Article I Paragraph 2.
 
The Contract Price also includes all costs and expenses for supplying all necessary drawings and plans as stipulated in the SPECIFICATIONS except those to be furnished by the
BUYER for the VESSEL in accordance with the SPECIFICATIONS.
 
2.
CURRENCY
Any and all payments by the BUYER to the SELLER under this CONTRACT shall be made in United States Dollars.
If it is not possible due to a legal restriction applicable to the BUYER for the BUYER to make  payment in United States  Dollars, subject to mutual agreement and without prejudice to
BUYER’S obligation and SELLER’S rights under this CONTRACT, the parties shall discuss alternative arrangements for payment, including without limitation BUYER is entitled,
provided it can lawfully do so, to make payment in Euros (EUR) or Pounds sterling (GBP), converted at the rate obtained from Reuters on the date of payment, provided that BUYER may
lawfully do so, and SELLER may lawfully receive payment in such alternative currency, and the relevant payment shall be treated as having been properly made in accordance with this
CONTRACT. Subject to the foregoing, the SELLER, will, if necessary and provided it may lawfully do so, nominate an account with the Refund Guarantor bank designated in the correct
currency for receiving such payment.
 
Page 14 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
3.
TERMS OF PAYMENT
The Contract Price shall be paid by the BUYER to the SELLER in instalments as follows:
 
(a) 1st Instalment:
The sum of United States Dollars Eight Million Four Hundred and Seventy-Nine Thousand Nine Hundred and Fifty Only (USD 8,479,950.00) representing fifteen percent (15%) of the
Contract Price shall become due and payable and be paid by the BUYER or BUYER’S financing bank to the SELLER within five (5) banking days after the BUYER’S receipt of the
SELLER’S telefax or email notice of payment demand for this Instalment together with an invoice for the Instalment and the BUYER has received the Refund Guarantee by SWIFT as
stipulated in Paragraph 7 of this Article, but no earlier than 31st May 2024.
(b) 2nd Instalment:
The sum of United States Dollars Five Million Six Hundred and Fifty-Three Thousand and Three Hundred Only (USD 5,653,300.00) representing ten percent (10%) of the Contract Price
shall become due and payable and be paid by the BUYER or BUYER’S financing bank to the SELLER within five (5) banking days after the BUYER has received a telefax or email notice
of payment demand for this Instalment accompanied with an invoice for the Instalment and a copy of the statement of the Classification Society confirming that the steel cutting of the
first plate of the VESSEL has been carried out and completed at the SHIPYARD, but no earlier than 30th November 2025.
 
(c) 3rd Instalment:
The sum of United States Dollars Five Million Six Hundred and Fifty-Three Thousand and Three Hundred Only (USD 5,653,300.00) representing ten percent (10%) of the Contract Price
shall become due and payable and be paid by the BUYER or BUYER’S financing bank to the SELLER within five (5) banking days after the BUYER has received a telefax or email notice
of payment demand for this Instalment accompanied with an invoice for the Instalment and a copy of the statement of the Classification Society confirming that the keel laying of the
VESSEL has been carried out at the SHIPYARD, but no earlier than 28th February 2026.
Page 15 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
(d) 4th Instalment:
The sum of United States Dollars Five Million Six Hundred and Fifty-Three Thousand and Three Hundred Only (USD 5,653,300.00) representing ten percent (10%) of the Contract Price
shall become due and payable and be paid by the BUYER or BUYER’S financing bank to the SELLER within five (5) banking days after the BUYER has received a telefax or email notice
of payment demand for this Instalment accompanied with an invoice for the Instalment and a copy of the statement of the Classification Society confirming that the launching of the
VESSEL has been carried out at the SHIPYARD, but no earlier than 31st August 2026.
 
(e) 5th Instalment (Payment upon delivery of the VESSEL):
The sum of United States Dollars Thirty-One Million Ninety-Three Thousand One Hundred and Fifty Only (USD 31,093,150.00) representing fifty-five percent (55%) of the Contract Price
plus any increase or minus any decrease due to modifications and/or adjustments of the Contract Price in accordance with provisions of this CONTRACT, shall become due and payable
and be paid by the BUYER or BUYER financing bank to the SELLER concurrently with delivery and acceptance of the VESSEL. The SELLER shall send to the BUYER a telefax or email
demand for this Instalment accompanied with an invoice for the Instalment five (5) days prior to the scheduled date of delivery of the VESSEL.
 
4.
METHOD OF PAYMENT
(a) 1st Instalment:
The BUYER shall remit the amount of this Instalment in accordance with Article II, Paragraph 3(a) by telegraphic transfer to a bank account with the Refund Guarantor bank nominated
by the SELLER, for credit to the account of the SELLER.
 
However, if a due date falls on a day which is not a banking day, such due date shall fall due upon the first banking day next following.
Page 16 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
(b) 2nd Instalment:
The BUYER shall remit the amount of this Instalment in accordance with Article II, Paragraph 3(b) by telegraphic transfer to a bank account with the Refund Guarantor bank nominated
by the SELLER, for credit to the account of the SELLER.
 
(c) 3rd Instalment:
The BUYER shall remit the amount of this Instalment in accordance with Article II, Paragraph 3(c) by telegraphic transfer to a bank account with the Refund Guarantor bank nominated
by the SELLER, for credit to the account of the SELLER.
 
(d) 4th Instalment:
The BUYER shall remit the amount of this Instalment in accordance with Article II, Paragraph 3(d) by telegraphic transfer to a bank account with the Refund Guarantor bank nominated
by the SELLER, for credit to the account of the SELLER.
 
(e) 5th Instalment (Payable upon delivery of the VESSEL):
The BUYER shall, at least one (1) banking day prior to the scheduled date of delivery of the VESSEL, make a conditional payment by swift message MT103 accompanied by swift
message MT199, and such amount to be held in trust in the name of the BUYER or BUYER’S financing bank with a bank account with the Refund Guarantor bank nominated by the
SELLER, for a period of at least five (5) days following the scheduled delivery date of the VESSEL and covering the amount of this Instalment (as adjusted in accordance with the
provisions of this CONTRACT), with an irrevocable instruction that the said amount (or any other amount mutually agreed by the parties) shall be released to the SELLER against
presentation by the SELLER to the said bank nominated by the SELLER, of (i) a copy of the Protocol of Delivery and Acceptance duly signed by the authorized representatives of the
BUYER and the SELLER, (ii) a copy of release letter signed by the BUYER simultaneously with PODA, setting out the exact amount to be released to the SELLER. Interest, if any, accrued
from such deposit, shall be for the benefit of the BUYER.
Page 17 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
If the delivery of the VESSEL is not effected on or before the expiry of the aforesaid five (5) days period, the BUYER’S payment under this Paragraph 4(d) shall automatically be returned
to BUYER’S Bank plus accrued interest upon the expiry date and the SELLER shall be compelled to nominate a revised scheduled delivery date. However, when the new scheduled
delivery date is notified to the BUYER by the SELLER, the BUYER shall make the conditional payment in accordance with the same terms and conditions as set out above.
 
The above mechanism for conditional payment of the 5th Instalment is subject to agreement by the BUYER’S financing bank(s) in the period prior to delivery of the VESSEL. If
agreement cannot be reached on the terms of the conditional payment or the BUYER’S financing bank is not able to make such a conditional payment (for whatever reason), the parties
shall discuss alternative arrangements, which may include pre-positioning the 5th Instalment by means of a contractual escrow arrangement, subject to final agreement by the parties and
without prejudice to the BUYER’S obligation to pay the 5th Instalment against delivery of the VESSEL under and in accordance with this CONTRACT.
 
5.
PREPAYMENT
The BUYER shall have the right to make prepayment of any and all instalments before delivery of the VESSEL, by giving to the SELLER at least thirty (30) days prior written notice,
without any price adjustment of the VESSEL for such prepayment.
 
6.
SECURITY FOR PAYMENT OF INSTALMENTS BEFORE DELIVERY
The BUYER shall, concurrently with payment of 1st Instalment of the Contract Price, deliver to the SELLER an irrevocable and unconditional Letter of Corporate Guarantee (hereinafter
called the “Corporate Guarantee”) in favor of the SELLER issued by PERFORMANCE SHIPPING INC. of the Republic of the Marshall Islands (hereinafter called the “Corporate
Guarantor”) in order to secure the due and faithful performance of this CONTRACT by the BUYER, in the same form and substance as Exhibit “B”.
Page 18 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
7.
REFUNDS
All payments made by the BUYER prior to delivery of the VESSEL shall be in the nature of advance to the SELLER, and in the event this CONTRACT is terminated, rescinded or
cancelled by the BUYER, in accordance with the specific terms of this CONTRACT permitting such termination, rescission or cancellation, the SELLER shall refund to the BUYER in
United States Dollars the full amount of all sums already paid by the BUYER to the SELLER under this CONTRACT, together with interest (at the rate of five percent (5%) per annum)
from the respective payment date(s) to the date of remittance by telegraphic transfer of such refund to the account specified by the BUYER. The transfer and other bank charges of such
refund from the SELLER’S bank shall be for the SELLER’S account.
 
As security to the BUYER, the SELLER shall deliver to the BUYER on or before the SELLER’S receipt of the First Instalment (and in any event no later than ninety (90) days after the date
of this CONTRACT), an irrevocable Letter of Refund Guarantee (hereinafter called the “Refund Guarantee”), covering 1st, 2nd, 3rd, and 4th Instalments of the Contract Price plus interest
as aforesaid, to be issued by the SELLER’S nominated Bank in the People’s Republic of China (hereinafter called the “Refund Guarantor”), provided such bank is approved by the
BUYER and the BUYER’S financing bank in the form in Exhibit “A” annexed hereto, incorporating any changes which may be requested by the Refund Guarantor and which the BUYER
and the BUYER’S financing bank may agree.
 
All expenses in issuing and maintaining the Refund Guarantee by the Refund Guarantor shall be borne by the SELLER.
It is hereby understood by both parties that payment of any interest provided herein is by way of liquidated damages due to cancellation of this CONTRACT and not by way of
compensation for use of money.
 
If the SELLER is required to refund to the BUYER the instalments paid by the BUYER to the SELLER as provided in this Paragraph, the SELLER shall return to the BUYER all of the
BUYER’S Supplied Items which were not incorporated into the VESSEL and pay to the BUYER an amount equal to the cost to the BUYER of those BUYER’S Supplied Items incorporated
into the VESSEL.
Page 19 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
Upon email notice by the BUYER to be given no later than sixty (60) days before the Expiry Date of the Refund Guarantee requiring the SELLER to extend the Refund Guarantee, the
SELLER shall procure from the Refund Guarantor and deliver to the BUYER no later than thirty (30) days before the Expiry Date, either (i) an amendment to the Refund Guarantee
extending the Expiry Date by not less than sixty (60) days or (ii) a replacement refund guarantee on the same terms as the Refund Guarantee and issued by the same Refund Guarantor, or
otherwise on such terms and/or issued by such entity as the BUYER may approve in its absolute discretion, with an Expiry Date no earlier than sixty (60) days after the last effective
Expiry Date. (“Expiry Date” means the expiry date of the Refund Guarantee from time to time as stated in it, or as extended by an extension or replacement under this paragraph or
otherwise.) If, following delivery of the Refund Guarantee in accordance with this Article II Paragraph 7, the SELLER is required but fails to provide any amendment or replacement as
required by the preceding two sentences, such failure shall be deemed a repudiation of this CONTRACT by the SELLER and the BUYER shall have the option, on notice to the SELLER,
to terminate this CONTRACT under and in accordance with Article X of this CONTRACT.
 
(End of Article)
Page 20 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
ARTICLE III - ADJUSTMENT OF THE CONTRACT PRICE
The Contract Price of the VESSEL shall be subject to adjustments as hereinafter set forth. It is hereby understood by all parties that any reduction of the Contract Price is by way of
liquidated damages and not by way of penalty.
 
1.
DELAYED DELIVERY
(a) No adjustment shall be made, and the Contract Price shall remain unchanged for the first thirty (30) days of delay in delivery of the VESSEL beyond the Delivery Date as defined in
Article VII hereof ending as of twelve o’clock midnight China Standard Time (CST) of the thirtieth (30th) day of delay.
 
(b) If the delivery of the VESSEL is delayed more than thirty (30) days after the Delivery Date as defined in Article VII hereof, then, in such event, beginning at twelve o’clock midnight
China Standard Time (CST) of the thirtieth (30th) day after the date on which delivery is required under this CONTRACT, the Contract Price of the VESSEL shall be reduced by
deducting therefrom the sum of United States Dollars Thirteen Thousand Only (USD 13,000.00) per day of delay.
 
Unless the parties hereto agree otherwise, the total reduction in the Contract Price shall be deducted from the Fifth (5th) Instalment of the Contract Price and in any event (including
the event that the BUYER consents to take the VESSEL at the later delivery date after the expiration of two hundred and ten (210) days delay of delivery as described in Paragraph
1(c) of this Article) shall not be more than one hundred and eighty (180) days at the above specified rate of reduction after the thirty (30) days allowance, that is United States
Dollars Two Million Three Hundred and Forty Thousand Only (USD 2,340,000.00) being the maximum.
 
Page 21 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
(c) However, if the delay in the delivery of the VESSEL continues for a period of two hundred and ten (210) days after the Delivery Date as defined in Article VII, then in such event, the
BUYER may, at its option, rescind or cancel this CONTRACT in accordance with the provisions of Article X of this CONTRACT. The SELLER may at any time after the expiration of
the aforementioned two hundred and ten (210) days, if the BUYER has not served notice of rescission or cancellation pursuant to Article X, notify the BUYER of the date upon
which the SELLER estimates the VESSEL will be ready for delivery and demand in writing that the BUYER make an election, in which case the BUYER shall, within thirty (30) days
after such demand is received by the BUYER, either notify the SELLER of its decision to cancel this CONTRACT, or consent to take delivery of the VESSEL at an agreed future date,
it being understood and agreed by the parties hereto that, if the VESSEL is not delivered by such future date, the BUYER shall have the same right of cancellation upon the same
terms, as hereinabove provided.
 
(d) For the purpose of this Article, the delivery of the VESSEL shall not be deemed delayed and the Contract Price shall not be reduced when and if the Delivery Date of the VESSEL is
extended by reason of causes and provisions of Articles V, VI, XI, XII and XIII and other applicable Articles hereof on account of which this CONTRACT expressly provides for the
Delivery Date to be extended. The Contract Price shall not be adjusted or reduced if the delivery of the VESSEL is delayed by reason of permissible delays as defined in Article VIII
hereof.
2.
INSUFFICIENT SPEED
(a) The Contract Price of the VESSEL shall not be affected nor changed by reason of the actual speed (as determined by the Trial Run after correction according to the
SPECIFICATIONS) being less than three- tenths (3/10) of one (1) knot below the Guaranteed Speed as specified in Paragraph 4 of Article I of this CONTRACT.
(b) However, commencing with and including a deficiency of three-tenths (3/10) of one knot in actual speed (as determined by the Trial Run after correction according to the
SPECIFICATIONS) below the Guaranteed Speed as specified in Paragraph 4, Article I of this CONTRACT, the Contract Price shall be reduced as follows:
Page 22 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
In case of deficiency
at or above 0.30 but below 0.40 knot
USD 60,000.00
at or above 0.40 but below 0.50 knot
 USD 70,000.00
at or above 0.50 but below 0.60 knot
 USD 80,000.00
at or above 0.60 but below 0.70 knot
 USD 90,000.00
at or above 0.70 but below 0.80 knot
USD 100,000.00
at or above 0.80 but below 0.90 knot
USD 110,000.00
at or above 0.90 but below or equal to 1.00 knot
USD 120,000.00
(fractions of less than one-tenth (1/10) of a knot shall be regarded as a full one-tenth (1/10) of a knot)
(c) If the deficiency in actual speed (as determined by the Trial Run after correction according to the SPECIFICATIONS) of the VESSEL upon the Trial Run, is more than one (1) knot
below the Guaranteed Speed under this CONTRACT, then the BUYER may at its option reject the VESSEL and rescind or cancel this CONTRACT in accordance with provisions of
Article X of this CONTRACT or may accept the VESSEL at a reduction in the Contract Price as above provided, by United States Dollars Three Hundred and Eighty Thousand Only
(USD 380,000.00) being the maximum.
 
3.
EXCESSIVE FUEL CONSUMPTION
(a) The Contract Price of the VESSEL shall not be affected nor changed if the actual fuel consumption of the Main Engine, as determined by shop trial in manufacturer’s works as per
the SPECIFICATIONS, is greater than the Guaranteed Fuel Consumption as specified and required under the provisions of this CONTRACT and the SPECIFICATIONS if such actual
excess is equal to or less than six percent (6%).
 
(b) However, if the actual fuel consumption as determined by shop trial is greater than six percent (6%) above the Guaranteed Fuel Consumption then, the Contract Price shall be
reduced by the sum of United States Dollars Ninety Thousand Only (USD 90,000.00) for each full one percent (1%) increase in fuel consumption in excess of the above said six
percent (6%) (fractions of less than one per cent (1%) shall be regarded as a full one percent (1%)).
Page 23 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
(c) If as determined by shop trial such actual fuel consumption of the Main Engine is equal to or more than ten percent (10%) in excess of the Guaranteed Fuel Consumption, the
BUYER may, subject to the SELLER’S right to effect alterations or corrections as specified in the following sub-paragraph of Article III 3 (c) hereof at its option, reject the VESSEL
and rescind or cancel this CONTRACT, in accordance with the provisions of Article X of this CONTRACT or may accept the VESSEL at a reduction in the Contract Price by United
States Dollars Three Hundred and Sixty Thousand Only (USD 360,000.00) if such excess is just equal to 10% or United States Dollars Four Hundred Thousand Only (USD
400,000.00) if such excess is more than 10% being the maximum.
Notwithstanding the above, if as determined by shop trial such actual fuel consumption of the Main Engine is ten percent (10%) or more in excess of the Guaranteed Fuel
Consumption, the SELLER may investigate the cause of the non-conformity and the proper steps may promptly be taken to remedy the same and to make whatever corrections and
alterations and / or re-shop trial test or tests as may be necessary to correct such non-conformity without extra cost to the BUYER. Upon completion of such alterations or
corrections of such nonconformity, the SELLER shall promptly perform such further shop trials or any other tests, as may be deemed necessary to prove the fuel consumption of the
Main Engine’s conformity with the requirement of this CONTRACT and the SPECIFICATIONS and if found to be satisfactory, give the BUYER notice by telefax and/or email
confirmed in writing of such correction and as appropriate, successful completion accompanied by copies of such results, and the BUYER shall, within five (5) business days after
receipt of such notice, notify the SELLER by telefax and / or email confirmed in writing of its acceptance or reject the re-shop trial together with the reasons therefor. If the BUYER
fails to notify the SELLER by telefax and / or email confirmed in writing of its acceptance or rejection of the re-shop trial together with the reasons therefor within five (5) business
days period as provided herein, the BUYER shall be deemed to have accepted the shop trial. For the avoidance of doubt, if as determined by the repeat shop trial such actual fuel
consumption of the Main Engine is ten percent (10%) or more in excess of the Guaranteed Fuel Consumption, the BUYER may, at its option, either reject the Main Engine (and
terminate this CONTRACT in accordance with Article X) or require further rectification to meet the requirements of this CONTRACT and the SPECIFICATONS (in which case the
BUYER shall have the same rights again to accept or reject the further rectified Main Engine).
 
Page 24 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
4.
INSUFFICIENT DEADWEIGHT
(a) In the event that there is a deficiency in the actual deadweight of the VESSEL determined as provided in the SPECIFICATIONS, the Contract Price shall not be decreased if such
deficiency is nine hundred (900) metric tons or less below the Guaranteed Deadweight.
(b) However, the Contract Price shall be decreased by the sum of United States Dollars One Thousand Only (USD 1,000.00) for each full metric ton of such deficiency being more than
nine hundred (900) metric tons.
 
(c) In the event that there should be a deficiency in the VESSEL’S actual deadweight which exceeds one thousand and five hundred (1,500) metric tons below the Guaranteed
Deadweight, the BUYER may, at its option, reject the VESSEL and rescind or cancel this CONTRACT in accordance with the provisions of Article X of this CONTRACT, or may
accept the VESSEL with reduction in the Contract Price in the maximum amount of United States Dollars Six Hundred Thousand Only (USD 600,000.00).
5.
EFFECT OF TERMINATION, CANCELLATION OR RESCISSION
For the avoidance of doubt, if there is any excess or deficiency in the VESSEL’S speed, fuel consumption and/or deadweight, the SELLER shall use all reasonable endeavours to correct
the excess or deficiency up until the last date for delivery of the VESSEL.
 
It is expressly understood and agreed by the parties hereto that in any case, if the BUYER terminates, rescinds or cancels this CONTRACT under this CONTRACT, the BUYER shall not
be entitled to any liquidated damages.
 
However, the BUYER shall be entitled to a refund of all instalments of the Contract Price paid to the SELLER together with interest as provided in Article X up to the date of rescission of
this CONTRACT under this Article and until the SELLER refunds the instalment(s) paid by the BUYER to the SELLER.
Page 25 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
If the SELLER is required to refund to the BUYER the instalments paid by the BUYER to the SELLER as provided in this Paragraph, the SELLER shall return to the BUYER all of the
BUYER’S Supplied Items as stipulated in Article V which were not incorporated into the VESSEL and pay to the BUYER an amount equal to the cost to the BUYER of those BUYER’S
Supplied Items incorporated into the VESSEL.
 
The transfer and such other bank charges of such refund from the SELLER’S bank under this Article shall be for the SELLER’S account.
(End of Article)
Page 26 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
ARTICLE IV - SUPERVISION AND INSPECTION
1.
APPOINTMENT OF THE BUYER’S SUPERVISOR
The BUYER shall timely send to and maintain at the SHIPYARD at the BUYER’S own cost and expense, one or more representative(s) who shall be duly accredited in writing by the
BUYER (such representative(s) being hereinafter collectively and individually called the “Supervisor”) to attend inspections and tests relating to, and to supervise and survey the
construction by the SELLER of the VESSEL, her equipment and accessories, modifications to the SPECIFICATIONS, and the Delivery Date, approval of the plans and drawings, and any
other matters for which he is specifically authorized by the BUYER. The SELLER hereby warrants that the necessary invitation letter for the Supervisor to enter China will be issued on
demand provided that the Supervisor meets with the rules, regulations and Laws of the People’s Republic of China and the SELLER will provide its best assistance for issuance of visa
for the Supervisor. The BUYER undertakes to give the SELLER adequate notice for the application of visa.
 
2. APPROVAL OF PLANS AND DRAWINGS
(a) No drawings and/or plans shall be required to be submitted by the SELLER to the BUYER for approval. However, the SELLER shall provide the BUYER with one copy of the
drawings and/or plans in electronic version (PDF) duly approved by the buyer of the Reference Vessel and the Classification Society (with the comments, if any) for reference only.
(b) No model test or inclining test shall be required to be carried out for the VESSEL, however, the copy of the model test report and inclining test result of the Reference Vessel shall be
provided to the BUYER for reference only. The shop test, sea trial and mooring test shall be required to be performed as the subsequent vessel of the Reference Vessel.
 
(c) No modification to the construction of the VESSEL and/or the Specifications and/or plans and/or drawings shall be required or demanded by the BUYER.
 
(d) The final maker selection for the Reference Vessel on the Makers List shall be same applied to the VESSEL and the BUYER shall pay the same additional cost (if any) when the buyer
of the Reference Vessel selects such maker, and the payment for such additional cost accrued during the maker selection of the Reference Vessel shall be made together with 5th
Instalment on delivery of the VESSEL.
Page 27 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
(e) If there is any modification to the construction and/or plans and/or drawings and/or Specifications as required by the buyer of the Reference Vessel and there is any adjustment of
any terms of the Contract for the Reference Vessel, such adjustment/modification shall be correspondingly and automatically applied to the VESSEL as well.
 
3.
SUPERVISION AND INSPECTION BY THE SUPERVISOR
The necessary inspection of the VESSEL, its machinery, equipment and outfittings shall be carried out by the Classification Society or other applicable regulatory bodies, and/or
inspection team of the SELLER throughout the entire period of construction, in order to ensure that the construction of the VESSEL is duly performed in accordance with this
CONTRACT and the SPECIFICATIONS. The procedures for the inspections and the tests shall be in accordance with the SPECIFICATIONS.
 
The Supervisor shall have, at all times until delivery of the VESSEL, the right to attend all tests and inspect (during any actual working hours) the VESSEL, her engines, accessories and
materials at the SHIPYARD, its subcontractors’ premises or any other place where work is being done or materials are stored in connection with the VESSEL.
 
The SELLER shall provide the Supervisor with reasonable notice in advance of the date and place of tests and inspections for the convenience of their attendance both inside the
SHIPYARD and with respect to subcontractors works to ensure that the Supervisor is able to attend to such matters.
 
Whether or not the Supervisor has been present, the SELLER shall promptly deliver to the BUYER or the Supervisor the results of all tests and inspections.
 
The Supervisor shall to the extent, and within the limits of the authority conferred upon him by the BUYER, make decisions or give advice to the SELLER on behalf of the BUYER
promptly on all problems arising out of, or in connection with, the construction of the VESSEL and generally act in a reasonable manner with a view to cooperating with the SELLER in
the construction process of the VESSEL within the limits of the Supervisor’s authority. The decision, approval or written advice of the Supervisor within such limits shall be deemed to
have been given by the BUYER.
Page 28 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
In the event that the Supervisor discovers any construction or material or workmanship is not deemed  to conform  to the requirements of this CONTRACT and/or the SPECIFICATIONS,
the Supervisor shall be entitled to give the SELLER a notice in writing as to such nonconformity. Upon receipt of such notice from the Supervisor, the SELLER shall correct such
nonconformity if the SELLER agrees to his view. In case of dispute between the SELLER and the BUYER in respect of the notified non-conformity either party may submit the issue to
the head office of the Classification Society or to arbitration in accordance with Article XIII hereof. In any circumstances, the SELLER shall be entitled to proceed with the construction
of the VESSEL even if there exists discrepancy in the opinion between the BUYER and the SELLER, without however prejudice to the BUYER’S right for submitting the issue for
determination by the head office of the Classification Society or arbitration in accordance with the provisions hereof and without prejudice to the SELLER’S obligations to deliver the
VESSEL free of non-conformity of the SPECIFICATIONS and this CONTRACT. However the BUYER undertakes and assures the SELLER that the Supervisor shall carry out his
inspections in accordance with the SPECIFICATIONS, mutually agreed inspection procedure and schedule and usual shipbuilding practice and in a way as to minimize any increase in
building costs and delays in the construction of the VESSEL. Once a test/inspection has been witnessed and approved by the BUYER’S representatives, the same test/inspection should
not have to be repeated, provided it has been carried out in compliance with the requirements of the Classification Society and the SPECIFICATIONS and the test/inspection parameters
have been satisfactorily met.
The working hours of the Supervisor shall be arranged in accordance of the working schedule of the SELLER. The SELLER shall provide the Supervisor with at least one (1) day advance
notice of tests and inspections which the Supervisor shall attend within the SHIPYARD and at least three (3) days advance notice with respect to any other locations within China and at
least ten (10) days advance notice outside of China. Failure by the Supervisor to be present at such tests, trial and inspections after due notice to him as aforesaid shall be deemed to be
a waiver of the Supervisor’s right to be present. In the event that the SELLER needs an inspection to be made during non-working hours for smooth progress of work, the Supervisor
shall exercise his reasonable endeavors to attend such inspection provided that SELLER has given a reasonable advance notice to the Supervisor. If the Supervisor does not attend any
such tests having been given due notice to attend, the BUYER shall be obliged to accept the results of such tests on the basis of acceptance of such tests by the Classification Society
as the case may be and provided that defective work or material shall be corrected and/or replaced by the SELLER in accordance with this CONTRACT and the SPECIFICATIONS. In
case that the inspections for one specialty overlap for the same time at the same day, the inspection schedule may be adjusted, if practicable. In general, the daily inspections in the
SHIPYARD will commence at 09:00 hours and finish 17:00 hours except the special cases due to particular nature of the process. The SELLER shall make effort not to arrange inspections
during holidays or Sunday except inspections for paint or other emergent or special inspections.
Page 29 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
The SELLER agrees to furnish free of charge the Supervisor with office space and other reasonable facilities which shall include air conditioning, telephone and internet connections
according to SELLER’S practice at, or in the immediate vicinity of the SHIPYARD. But the fees for the communication like telephone, telefax, and internet etc. shall be borne by the
BUYER. At all times, during the construction of the VESSEL until delivery thereof, the Supervisor shall be given free and ready access to the VESSEL, her engines and accessories, and
to any other place where the work is being done, or the materials are being processed or stored, in connection with the construction of the VESSEL, including the yards, workshops,
stores of the SELLER and the premises of subcontractors of the SELLER, who are doing work or storing materials in connection with the VESSEL’S construction. The travel expenses for
the said access to SELLER’S subcontractors outside of Jiangsu Province shall be at BUYER’S account. The transportation, of any nature whatsoever, shall be provided to the Supervisor
by the BUYER except for transportation to such subcontractors’ premises within Jiangsu Province which shall be paid by SELLER.
 
The SELLER shall promptly provide to the Supervisor and/or his assistants and shall ensure that its subcontractors shall promptly provide all such information as he or they may
reasonably request in connection with the construction of the VESSEL and her engines, equipment and machinery.
Page 30 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
The obligations and liabilities of the SELLER, and the rights of the BUYER, under or pursuant to this CONTRACT shall not in any way be derogated from, diminished or impaired by any
act or omission of the BUYER and the Supervisor and assistant(s),the Classification Society or any other regulatory body (Provided that the preceding sentence is not intended to affect
the SELLER’S right to rely on any determination made by the Classification Society under and in accordance with this CONTRACT.). Any acceptance or other action or failure to attend
or act in connection with any inspections or approvals by the BUYER or the Supervisor shall in no way alter or diminish the SELLER’S responsibilities and obligations under this
CONTRACT.
 
4.
LIABILITY OF THE SELLER
The Supervisor engaged by the BUYER under this CONTRACT shall at all times be deemed to be in the employ of the BUYER. The SELLER shall be under no liability whatsoever to the
BUYER, the Supervisor, or the BUYER’S employees or agents for personal injuries, including death, during the time when they, or any of them, are on the VESSEL, or within the premises
of either the SELLER or its subcontractors, or are otherwise engaged in and about the construction of the VESSEL, unless, however, such personal injuries, including death, were caused
by negligence of the SELLER, or of any of the SELLER’S employees or agents or subcontractors. Nor shall the SELLER be under any liability whatsoever to the BUYER for damage to, or
loss or destruction of property in China of the BUYER or of the Supervisor, or of the BUYER’S employees or agents, unless such damage, loss or destruction was caused by negligence
of the SELLER, or of any of the SELLER’S employees or agents or subcontractors.
 
Neither the BUYER nor its Supervisor shall be liable to the SELLER, or to its assistant(s), or to the SELLER’S employees or agents for personal injuries, including death, during the time
they or any of them, are on the VESSEL, or within the premises of either the SELLER or its subcontractors, or are otherwise engaged in and about the construction of the VESSEL, unless
however, such personal injuries including death are caused by the negligence of the BUYER or its Supervisor. Nor shall the BUYER or its Supervisor be under any liability whatsoever to
the SELLER for damage to, or loss or destruction of property in China of the SELLER, its assistant(s), employees or agents, unless and to the extent such damage, loss or destruction
was caused by gross negligence or willful misconduct of the BUYER or its Supervisor.
Page 31 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
No act or omission of the Supervisor or his assistants shall, in any way, diminish the liability of the SELLER under Article IX (WARRANTY OF QUALITY) or relieve the SELLER of its
obligation in every respect to comply with this CONTRACT and with all the requirements that the Classification Society and/or other regulatory bodies may impose by virtue of the rules
and regulations mentioned in Article I of this CONTRACT before delivery of the VESSEL.
 
5.
SALARIES AND EXPENSES
 
All salaries and expenses of the Supervisor, or any other employees employed by the BUYER under this Article, shall be for the BUYER’S account.
 
6.
REPLACEMENT OF SUPERVISOR
The SELLER has the right to request the BUYER to replace any of the Supervisor who is deemed unsuitable and unsatisfactory for the proper progress of the VESSEL’S construction
together with reasons. The BUYER shall investigate the situation by sending its representative to the SHIPYARD if necessary, and if the BUYER considers that such SELLER’S request
is justified, the BUYER shall effect the replacement as soon as conveniently arrangeable.
 
(End of Article)
Page 32 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
ARTICLE V - MODIFICATION, CHANGES AND EXTRAS
1.
HOW EFFECTED
The Specifications and Plans in accordance with which the VESSEL is constructed, may not be modified and/or changed at any time:
 
(1) No modification to the construction of the VESSEL and/or the Specifications and/or plans and/or drawings shall be required or demanded by the BUYER.
 
(2) If there is any modification to the construction and/or plans and/or drawings and/or Specifications as required by the buyer of the Reference Vessel and there is any adjustment of
any terms of the Contract for the Reference Vessel, such adjustment/modification shall be correspondingly and automatically applied to the VESSEL.
 
2.
CHANGES IN RULES AND REGULATIONS, ETC.
 
(1) If, after the date of signing this CONTRACT, any requirements as to the rules and regulations as specified in this CONTRACT and the SPECIFICATIONS to which the construction
of the VESSEL is required to conform, are altered or changed by the Classification Society or the other regulatory bodies authorized to make such alterations or changes, the SELLER
and/or the BUYER, upon receipt of the notice thereof, shall transmit such information in full to each other in writing, whereupon within ten (10) days after receipt of the said notice
by the BUYER from the SELLER or vice versa, the BUYER shall instruct the SELLER in writing as to the alterations or changes, if any, to be made in the VESSEL which the BUYER, in
its sole discretion, shall decide. The SELLER shall promptly comply with such alterations or changes, if any in the construction of the VESSEL, provided that the BUYER shall first
agree:
 
(a) As to any increase or decrease in the Contract Price of the VESSEL that is occasioned by the cost for such compliance; and/or
 
(b) As to any extension in the time for delivery of the VESSEL that is necessary due to such compliance; and/or
Page 33 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
 
(c) As to any increase or decrease in the guaranteed figures of the VESSEL stipulated in Article I including but not limited to deadweight and speed of the VESSEL, if such
compliance results in increase or decrease in any of the guaranteed figures in Article I; and/or
 
 
(d) As to any other alterations in the terms of this CONTRACT or of SPECIFICATIONS or both, if such compliance makes such alterations of the terms necessary; and/or
 
 
(e) If the price is to be increased, then, in addition, as to providing to the SELLER additional securities reasonably satisfactory to the SELLER.
 
(2) If, due to whatever reasons, the parties shall fail to agree on the adjustment of the Contract Price or extension of the time for delivery or increase or decrease of the guaranteed
figures stipulated in Article I or providing additional security to the SELLER or any alteration of the terms of this CONTRACT, if any, provided that the alterations or changes are not
compulsory, then the SELLER shall be entitled to proceed with the construction of the VESSEL in accordance with, and the BUYER shall continue to be bound by the terms of this
CONTRACT and the SPECIFICATIONS without making any such alterations or changes.
(3) If the alterations or changes are compulsorily required to be made, then, notwithstanding any dispute between the parties relating to the adjustment of the Contract Price and/or
extension of the time for delivery and/or increase or decrease of the guaranteed figures stipulated in Article I and/or providing additional security to the SELLER and/or any
alteration of the terms of this CONTRACT and/or any other respect, the SELLER shall promptly comply with such alterations or changes first. The Delivery Date shall be further
extended for a period necessary for such compliance. The BUYER shall, in any event, bear the costs and expenses of such alterations or changes. Any dispute with regard to the
adjustment of the Contract Price and/or the extension of Delivery Date and/or any other disputes shall be determined by arbitration in accordance with Article XIII of this
CONTRACT.
Page 34 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
3.
SUBSTITUTION OF MATERIALS AND/OR EQUIPMENT
In the event that any of the materials and/or equipment required by the SPECIFICATIONS or otherwise under this CONTRACT for the construction of the VESSEL cannot be procured in
time to meet the SELLER’S construction schedule for the VESSEL, the SELLER may, provided the BUYER so agrees in writing, supply other materials and/or equipment of at least the
equivalent quality, capable of meeting the requirements of the Classification Society and of the rules, regulations, requirements and recommendations with which the construction of the
VESSEL must comply. Any agreement as to such substitution of materials shall be effected in the manner provided in Paragraph 1 of this Article.
 
4.
BUYER’S SUPPLIED ITEMS
The BUYER shall deliver to the SELLER at the SHIPYARD the items as specified in the SPECIFICATIONS which the BUYER shall supply on the BUYER’S account (the “BUYER’S
Supplied Items”) by the time designated by the SELLER.
 
Should the BUYER fail to deliver to the SELLER the BUYER’S Supplied Items within the time specified, the delivery of the VESSEL shall automatically be extended for a period of such
delay. In such event, the BUYER shall pay to the SELLER all losses and damages sustained by the SELLER due to such delay in the delivery of the BUYER’S Supplied Items and such
payment shall be made upon delivery of the VESSEL, provided that the SELLER shall have:
(a) furnished the BUYER with the time schedule referred to above, two (2) months prior to installation of the BUYER’S Supplied Items; and
(b) given the BUYER written notice of any delay in delivery of the BUYER’S Supplied Items and the necessary documents or advice for such supplies as soon as the delay occurs
which might give rise to a claim by the SELLER under this Paragraph.
If any delay in delivery of the BUYER’S Supplied Items should exceed ten (10) days, the SELLER shall be entitled to proceed with construction of the VESSEL without installation of such
items in or onto the VESSEL, without prejudice to the SELLER’S right hereinabove provided, and the BUYER shall accept the VESSEL so completed.
Page 35 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
The SELLER shall be responsible for storing, safekeeping and handling of the BUYER’S Supplied Items as specified in the SPECIFICATIONS after delivery to the SELLER and shall
install them on board the VESSEL at the SELLER’S expenses.
 
Upon arrival of such shipment of the BUYER’S Supplied Items, both parties shall undertake a joint unpacking inspection. If any damages are found to any of the BUYER’S Supplied
Items that make it unsuitable for installation, the SELLER shall be entitled to refuse to accept the damaged/defective item.
 
However, upon request by the BUYER, the SELLER shall assist the BUYER to
(i)
repair the damaged or defective item, if the SELLER is able to do so, and/or
 
(ii) accept delivery of a replacement item in good condition,
But, in any event above (i) and (ii) shall be subject to the BUYER’S acceptance of payment by the BUYER of any reasonable costs incurred by the SELLER and extension of Delivery
Date of the VESSEL accordingly.
If any of the BUYER’S Supplied Items is lost or damaged while in the custody of the SELLER, the SELLER shall be responsible for such loss or damage.
 
(End of Article)
Page 36 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
ARTICLE VI - TRIALS
1.
NOTICE
The trials shall start when the VESSEL is reasonably completed according to the SPECIFICATIONS and to a standard capable for the performance of adequate trials as set forth in this
Article.
 
The BUYER and the Supervisor shall receive from the SELLER at least fourteen (14) and seven (7) days estimated notice in advance and three (3) days definite notice in advance in
writing or by telefax or email, of the scheduled time and place of the VESSEL’S sea trial as described in the SPECIFICATIONS (hereinafter referred to as the “Trial Run”) and the BUYER
and the Supervisor shall promptly acknowledge receipt of such notice.
 
The BUYER’S representatives and/or the Supervisor shall be on board the VESSEL to witness such Trial Run and to check upon the performance of the VESSEL during the same. In the
event of failure of the BUYER’S representatives to be present at the Trial Run of the VESSEL after due notice to the BUYER and the Supervisor as provided above, the BUYER shall be
deemed to have waived its right to have its representatives on board the VESSEL during the Trial Run, and the SELLER shall conduct such Trial Run within presence of the Classification
Society but without the BUYER’S representatives being present, and in such case the BUYER shall be obliged to accept the VESSEL on the basis of a certificate jointly signed by the
SELLER and the Classification Society certifying that the VESSEL, after Trial Run subject to minor alterations and corrections as provided in this Article, if any, is found to conform to
this CONTRACT and the SPECIFICATIONS.
 
The SELLER hereby warrants that the necessary invitation letter for the BUYER’S representatives to enter China will be issued on demand otherwise the Trial Run shall be postponed
until after the BUYER’S representatives have arrived at the SHIPYARD and any delays as a result thereof shall not count as a permissible delay under Article VIII thereof. However,
should the nationalities and other personal particulars of the BUYER’S representative(s) be not acceptable to the SELLER in accordance with its best understanding of the relevant rules,
regulations and/or Laws of the People’s Republic of China then prevailing, then the BUYER shall, on the SELLER’S telefax or email demand, effect replacement of all or any of them as
soon as reasonably practicable. Otherwise the Delivery Date as stipulated in Article VII hereof shall be extended by the delays as caused by the BUYER.
 
Page 37 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
In the event of unfavorable weather on the date specified for the Trial Run, the same shall take place on the first available day thereafter that the weather conditions permit. The parties
hereto recognize that the weather conditions in Chinese waters, in which the Trial Run is to take place, are such that great changes in weather may arise momentarily and without warning
and, therefore, it is agreed that if during the Trial Run of the VESSEL, the weather should suddenly become unfavorable, as would have precluded the continuance of the Trial Run, the
Trial Run of the VESSEL shall be discontinued and postponed until the first favorable day next following, unless the BUYER shall assent by telefax or email of its acceptance of the
VESSEL on the basis of the Trial Run made prior to such sudden changes in weather conditions.
In the event that the Trial Run is postponed because of unfavorable weather conditions, such delay shall be regarded as a permissible delay, as specified in Article VIII hereof.
 
2.
HOW CONDUCTED
(a) All expenses in connection with Trial Run of the VESSEL are to be for the account of the SELLER, who, during the Trial Run and when subjecting the VESSEL to Trial Run, is to
provide, at its own expense, the necessary crew to comply with conditions of safe navigation. The Trial Run shall be conducted in the manner prescribed in this CONTRACT and the
SPECIFICATIONS and shall prove fulfillment of the performance required for the Trial Run as set forth in the SPECIFICATIONS.
 
The course of Trial Run shall be determined by the SELLER.
(b) The SELLER shall provide the VESSEL with the required quantities of water and fuel oil with exception of greases, lubricating oil and hydraulic oil which shall be supplied by the
BUYER for the conduct of the Trial Run or Trial Runs as prescribed in the SPECIFICATIONS. The fuel oil supplied by the SELLER and the greases, lubricating oil and hydraulic oil
supplied by the BUYER shall be in accordance with the applicable engine specifications, and the cost of the quantities of water, fuel oil, lubricating oil, hydraulic oil and greases
consumed during the Trial Run or Trial Runs shall be for the account of the SELLER.
 
Page 38 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
3.
TRIAL LOAD DRAFT
In addition to the supplies provided by the BUYER in accordance with sub-paragraph (b) of the preceding Paragraph 2 hereof, the SELLER shall provide the VESSEL with the required
quantity of fresh water and other stores as necessary for the conduct of the Trial Run. The necessary ballast (fresh and sea water and such other ballast as may be required) to bring the
VESSEL to the trial load draft as specified in the SPECIFICATIONS, shall be for the SELLER’S account.
 
4.
METHOD OF ACCEPTANCE OR REJECTION
(a) Upon completion of the Trial Run of the VESSEL, the SELLER shall analyze the result of the Trial Run, and if found to be in accordance with this CONTRACT and the
SPECIFICATIONS, give the BUYER notice in writing or by telefax or email (a) of successful completion of the Trial Run accompanied by its full report, and copies of all the results
and records, of all tests carried out and (b) of conformity of the VESSEL with the requirements of this CONTRACT and the SPECIFICATIONS and within five (5) business days
thereafter, the BUYER shall notify the SELLER by telefax or email of its acceptance of the VESSEL or of its rejection of the VESSEL together with the reasons therefor.
 
(b) However, should the result of the Trial Run indicate that the VESSEL or any part thereof including its equipment does not conform to the requirements of this CONTRACT and the
SPECIFICATIONS, then the SELLER shall investigate with the Supervisor the cause of failure and the proper steps shall be taken to remedy the same and shall make whatever
corrections and alterations to the VESSEL.
 
Page 39 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
(c) Upon completion of correction of such non-conformity, the SELLER shall promptly perform such further trials, or other test of the VESSEL, or the part or equipment thereof
concerned, as may be deemed necessary to prove the VESSEL’S compliance with the requirements of this CONTRACT and the SPECIFICATIONS, and if found to be in accordance
with this CONTRACT and the SPECIFICATIONS, give to the BUYER notice by telefax or email of such correction, and, as appropriate, successful completion accompanied by its full
updated report and copies of all such results and tests, and the BUYER shall, within five (5) business days thereafter, notify the SELLER by telefax or email of its acceptance of the
VESSEL or of the rejection of the VESSEL together with the reason therefor on the basis of the alterations and corrections and/or re-trial or re-trials by the SELLER.
 
(d) Any notice of rejection of the VESSEL shall state the most significant issues on which the VESSEL fails to conform with the requirements of this CONTRACT and the
SPECIFICATIONS.
 
(e) If the SELLER does not agree to the rejection by the BUYER of the VESSEL or any part or equipment thereof, the SELLER shall so advise the BUYER promptly, in which case either
the BUYER or the SELLER may submit any dispute as to the conformity thereof with the requirements of this CONTRACT and the SPECIFICATIONS to arbitration under Article XIII
hereof.
(f)
In the event that the BUYER fails to notify the SELLER by telefax or email of its acceptance or rejection of the VESSEL together with the main reasons therefor within five (5)
business days period as provided for in the above sub-paragraphs (a) and (c), the BUYER shall be deemed to have accepted the VESSEL.
 
(g) Any dispute arising among the parties hereto as to the result of any Trial Run or further tests or trials, as the case may be, of the VESSEL shall be resolved by reference to arbitration
as provided in Article XIII hereof.
 
(h) Nothing herein shall preclude the BUYER from accepting the VESSEL with its qualifications and/or remarks following the Trial Run and/or further tests or trials as aforesaid and the
SELLER shall be obliged to comply with and/or remove such qualifications and/or remarks (if such qualifications and/or remarks are consistent with the requirements of this
CONTRACT and the SPECIFICATIONS) at the time before effecting delivery of the VESSEL to the BUYER under this CONTRACT.
Page 40 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
(i)
In the event that the BUYER rejects any aspects of the performance of the VESSEL or its equipment tested on the Trial Run, the BUYER shall indicate the reason in its notice of such
rejection in what respect the aspect of the performance of the VESSEL, or any part or equipment thereof does not conform to this CONTRACT and/or the SPECIFICATIONS.
 
5.
DISPOSITION OF SURPLUS CONSUMABLE STORES
Should any amount of fuel oil, fresh water, or other unbroached consumable stores furnished by the SELLER for the Trial Run or Trial Runs and commissioning remain on board the
VESSEL at the time of acceptance thereof by the BUYER, the BUYER agrees to buy the same from the SELLER at the SELLER’S actual invoice price, and payment by the BUYER shall be
effected upon delivery of the VESSEL as provided in Article II 3(e) and 4(e) of this CONTRACT.
 
The BUYER shall supply greases, lubricating oil and hydraulic oil for the purpose of Trial Run or Trial Runs and commissioning at its own expenses and the SELLER will reimburse for the
amount of greases, lubricating oil and hydraulic oil actually consumed for the said Trial Run or Trial Runs and commissioning at the purchase price incurred by the BUYER, and payment
by the SELLER shall be effected upon delivery of the VESSEL as provided in Article II 3(e) and 4(e) of this CONTRACT. The lubricating oil and greases shall be in accordance with the
engine specifications and the BUYER shall decide and advise the SHIPYARD of the suppliers’ name for lubricating oil and greases prior to the work commencement of the VESSEL,
provided always that such suppliers shall be acceptable to the SHIPYARD and/or the manufacturers of all machinery.
6.
EFFECT OF ACCEPTANCE
The BUYER’S acceptance of the VESSEL by telefax or email notification sent to the SELLER, in accordance with the provisions set out above, shall be final and binding so far as
conformity of the VESSEL to this CONTRACT and the SPECIFICATIONS is concerned, and shall preclude the BUYER from refusing formal delivery by the SELLER of the VESSEL, as
hereinafter provided, if the SELLER complies with all other procedural requirements for delivery as provided in Article VII and save to the extent of any damage or loss which may occur
to the VESSEL in the period after acceptance until formal delivery.
Page 41 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
If, at the time of delivery of the VESSEL, there are minor deficiencies in the VESSEL, such deficiencies should be resolved in such way that if the deficiencies are of minor importance and
do not in any way affect the safety or the operation of the VESSEL (including, without limitation, the issue of all safety and trading certificates in accordance with Article VII), the
SELLER shall be nevertheless entitled to tender the VESSEL for delivery and the BUYER shall be nevertheless obliged to take delivery of the VESSEL, provided BUYER and SELLER
have agreed the time scale following delivery when such minor non-conformities or defects will be corrected by the SELLER.
 
However, the BUYER’S acceptance of the VESSEL shall not affect the BUYER’S right under Article IX hereof.
The SELLER nevertheless undertakes to use all reasonable endeavours to rectify such minor non-conformities and defects continuously up to the time for delivery of the VESSEL.
(End of Article)
Page 42 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
ARTICLE VII - DELIVERY
1.
TIME AND PLACE
 
The VESSEL shall be delivered safely afloat by the SELLER to the BUYER at the SHIPYARD or any other shipyard relating to the SELLER, in accordance with the SPECIFICATIONS and
with all Classification and Statutory Certificates and after completion of Trial Run (or, as the case may be, re-Trial or re-Trials) and acceptance by the BUYER in accordance with the
provisions of Article VI hereof on or before 31st March 2027, unless otherwise mutually agreed. In the event of delays in the construction of the VESSEL or any performance required
under this CONTRACT due to causes which under the terms of this CONTRACT permit extension of the time for delivery, the aforementioned time for delivery of the VESSEL shall be
extended accordingly.
 
The aforementioned date or such later date to which delivery is extended pursuant to the terms of this CONTRACT is herein called the “Delivery Date”.
 
The SELLER shall give the BUYER in writing not less than 120 days, 90 days and 60 days of preliminary notice of the delivery and to the extent practicable the SELLER shall notify and
confirm as soon as possible prior to such date of delivery. The SELLER shall also give thirty (30) days’ provisional notice of the date of delivery and not less than fourteen (14) days and
seven (7) days notice of the approximate date and five (5) days notice of the actual date on which the VESSEL will be ready for delivery.
 
However, the delivery of the VESSEL cannot be earlier than 12th January 2027 without prior written consent of the BUYER.
2.
WHEN AND HOW EFFECTED
Provided that the SELLER and the BUYER shall have fulfilled all of their respective obligations as stipulated in this CONTRACT, delivery of the VESSEL shall be effected forthwith by
the concurrent delivery by each of the parties hereto, one to the other, of a Protocol of Delivery and Acceptance signed by the parties hereto, acknowledging delivery of the VESSEL by
the SELLER and acceptance thereof by the BUYER. The Protocol of Delivery and Acceptance shall be prepared in duplicate and executed by each of the parties hereto.
Page 43 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
3.
DOCUMENTS TO BE DELIVERED TO THE BUYER
 
Upon delivery and acceptance of the VESSEL, the SELLER shall deliver to the BUYER the following documents which shall accompany the aforementioned Protocol of Delivery and
Acceptance:
(a) PROTOCOL OF TRIALS (including results of Main Engine Shop Trials) of the VESSEL made by the SELLER pursuant to the SPECIFICATIONS;
 
(b) PROTOCOL OF INVENTORY of the equipment of the VESSEL including spare parts and the like, all as specified in the SPECIFICATIONS, made by the SELLER;
 
(c) PROTOCOL OF STORES OF CONSUMABLE NATURE made by the SELLER referred to under Paragraph 5 of Article VI hereof;
(d) FINISHED DRAWINGS, MANUALS AND PLANS pertaining to the VESSEL as stipulated in the SPECIFICATIONS, made by the SELLER;
(e) PROTOCOL OF INCLINING OR DEADWEIGHT EXPERIMENT, made by the SELLER;
(f)
ALL CERTIFICATES required to be furnished upon delivery of the VESSEL pursuant to this CONTRACT, the SPECIFICATIONS and the customary shipbuilding practice, including
but not limited to:
 
 
(i)
Classification Certificate
(ii)
Safety Construction Certificate
(iii)
Safety Equipment Certificate
(iv)
Safety Radio Certificate
(v)
International Loadline Certificate
(vi)
International Tonnage Certificate
(vii)
Builder’s Certificate, duly notarized
The VESSEL will be delivered with class certificates, free of any conditions, and/or recommendations.
Page 44 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
Certificates shall be issued by relevant Authorities or Classification Society. The VESSEL shall comply with the above rules and regulations which have already been
issued/published, effective and become compulsorily applicable on or before the date of signing this CONTRACT. All the certificates shall be delivered in one (1) original to the
VESSEL and one (1) photocopy to the BUYER.
 
If the full term certificate or certificates are unable to be issued at the time of delivery by the Classification Society or any third party other than the SELLER, then the provisional
certificate or certificates as issued by the Classification Society or the third party other than the SELLER with the full term certificates to be furnished by the SELLER after delivery of
the VESSEL and in any event within six (6) months after delivery of the VESSEL and provided the provisional certificates so supplied shall be sufficient for the VESSEL to commence
and continue its normal trading.
 
(g) DECLARATION OF WARRANTY issued by the SELLER that the VESSEL is delivered to the BUYER free and clear of any liens, charges, claims, mortgages, or other encumbrances
upon the BUYER’S title thereto, and in particular, that the VESSEL is absolutely free of all burdens in the nature of imposts, taxes or charges imposed by the province or country of
the port of delivery, as well as of all liabilities of the SELLER to its subcontractors, employees and crews and/or all liabilities arising from the operation of the VESSEL in Trial Run or
Trial Runs, or otherwise, prior to delivery except as otherwise provided under this CONTRACT.
 
(h) COMMERCIAL INVOICE.
(i)
BILL OF SALE made by the SELLER transferring title to the VESSEL free of all liens, claims, mortgages and other encumbrances whatsoever.
 
(j)
BUILDER’S CERTIFICATE made by the SELLER.
Page 45 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
(k) Any other documents, including the attestation of any delivery documents, reasonably required by the BUYER in connection with the financing or registration of the VESSEL
provided that (1) the SELLER is able to provide such documents, (2) the BUYER agrees to bear all the reasonable documented costs and expenses which shall be paid by the BUYER
on or before the delivery (or the BUYER indemnifies the SELLER against such costs and expenses) (3) the BUYER shall provide its best cooperation and sufficient advance notice,
and (4) the construction and/or delivery of the VESSEL is not affected by such BUYER’S requirement of additional documents.
The SELLER agrees to obtain notarization and/or legalization/apostille of the BILL OF SALE and the BUILDER’S CERTIFICATE if so required by the VESSEL’S flag state and/or the
BUYER’S financiers.
 
4.
TITLE AND RISK
Title to and risk of the VESSEL shall pass to the BUYER only upon delivery and acceptance thereof having been completed as stated above; it being expressly understood that, until
such delivery is effected, title to the VESSEL and her equipment shall remain at all times with the SELLER and are at the entire risk of the SELLER. The title to the BUYER’S Supplied Items
as provided in Article V shall remain with the BUYER (except for Article XI 4(b)(i)) and the SELLER’S responsibility for such BUYER’S Supplied Items shall be as described in Article V.
 
5.
REMOVAL OF VESSEL
The BUYER shall take possession of the VESSEL immediately upon delivery and acceptance thereof, and shall remove the VESSEL from the premises of the SELLER within five (5) days
after delivery and acceptance thereof is effected. If the BUYER shall not remove the VESSEL from the premises of the SELLER within the aforesaid five (5) days, then, in such event,
without prejudice to the SELLER’S right to require the BUYER to remove the VESSEL immediately at any time thereafter, the BUYER shall pay to the SELLER the reasonable mooring
charge of the VESSEL.
Page 46 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
6.
TENDER OF THE VESSEL
If the BUYER fails to take delivery of the VESSEL after completion thereof according to this CONTRACT and the SPECIFICATIONS without justified reason, the SELLER shall have the
right to tender the VESSEL for delivery by notice in writing to the BUYER after compliance with all procedural requirements as above provided.
 
(End of Article)
Page 47 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
ARTICLE VIII - DELAYS & EXTENSION OF TIME FOR DELIVERY
 
1.
CAUSE OF PERMISSIBLE DELAYS
If, at any time after signing this CONTRACT, either the construction or delivery of the VESSEL or any performance required hereunder as a prerequisite of delivery of the VESSEL is
delayed by any of the following events which are beyond the control of the SELLER and/or of its subcontractors/suppliers, and which were not existing or could not have been avoided
by reasonable business planning and were not foreseeable or known to the SELLER at the date of this CONTRACT, and the effect of which could not have been avoided or reduced by
the exercise of due diligence by the SELLER and/or its subcontractors/suppliers, and which affect the construction schedule of the VESSEL including preparation for construction:
 
Acts of God, acts of state of government authorities, war or warlike conditions or other hostilities or preparations therefor, blockade, revolution, insurrection, mobilizations, civil war, civil
commotions, acts of the public enemy, terrorism, riots, strikes, lockouts or other labor disturbances, labor shortage, vandalism, sabotage (but not for riots, strikes, vandalism, sabotage or
lockouts affecting only the employees of the SELLER or its subcontractors/suppliers), plagues or other epidemics, quarantines, sand storm, snow disaster, local daily highest
temperature higher than 37 degree centigrade continuing for  three (3) days or more, prolonged failure, shortage or restriction of electric current from an outside source, short supply of
oil and/or gas due to general shortage, freight embargoes, delay or failure in transportation, import restrictions (but not for import restrictions affecting the SELLER or its subcontractors
by reason of the application of Sanctions), delay in delivery and/or short supply of timely ordered materials and/or machinery and/or equipment to be supplied by the
subcontractor/supplier if and to the extent that such delay or short supply is itself directly caused by one of the other events described in this Paragraph 1 as permissible delay events
and provided that such materials and equipment at the time of ordering could reasonably be expected by SELLER to be available and delivered in time, earthquakes, tidal waves, unusual
severe weather conditions, destruction of or damage to the SELLER or works of the SELLER and/or its subcontractors/suppliers, or of the VESSEL or any part thereof by accidental fire,
flood, typhoons, hurricanes, storms, landslides, accidental fire explosions, accidental collisions, or by any causes herein described, delays in the SELLER’S other commitments directly
resulting from any causes herein described which in turn delay the construction of the VESSEL or the SELLER’S performance under this CONTRACT, and intervention of Authorities of
People’s Republic of China over which the SELLER and/or its subcontractors/suppliers have no control, and any other causes which are specified in this CONTRACT as causes of
permissible delays of delivery of the VESSEL or other causes or accidents beyond control of the SELLER or its subcontractors/suppliers, as the case may be, or due to the delay, or
restriction on the Trial Run due to government orders, then, in the event of delay due to the happening of any of the aforementioned contingencies, the SELLER shall not be liable for
such delay and the time for delivery of the VESSEL under this CONTRACT shall be extended without any reduction in the Contract Price for a period of time equal to the actual effect on
the critical path construction schedule of the VESSEL but which shall not in any event exceed the total accumulated time of all such delays (and for this purpose, delays attributable to
two (2) or more concurrent events shall not be aggregated and shall not be count more than once), subject nevertheless to the BUYER’S right of cancellation under Paragraph 3 of this
Article and subject however to all the relevant provisions of this CONTRACT which authorize and permit extension of the time of delivery of the VESSEL, provided that:
Page 48 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
(a)
such delay or event has not been caused by any omission, act or negligence of the SELLER or its subcontractors/suppliers and
(b) the SELLER shall use all reasonable efforts to prevent or minimize any delay in the construction of the VESSEL resulting from such events (including the obtaining of items from
alternative sources).
 
2.
NOTICE OF DELAY
As soon as possible within seven (7) days from the date of commencement of any delay, on account of which the SELLER claims that it is entitled under this CONTRACT to an extension
of the time for delivery of the VESSEL, the SELLER shall advise the BUYER by telefax or email of the date such delay commenced, and the reasons therefor and shall supply the BUYER
with evidence to justify the delay claimed within thirty (30) business days thereafter.
Page 49 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
Likewise, as soon as possible within seven (7) days after such delay ends, the SELLER shall advise the BUYER by telefax or email of the date such delay ended and also shall notify the
BUYER of the period by which the date for delivery of the VESSEL is extended by reason of such delay.
 
Failure of the BUYER to acknowledge of SELLER’S notification of any claim for extension of the Delivery Date within seven (7) days after receipt by the BUYER of such notification,
shall be deemed to be a waiver by the BUYER of its right to object to such extension.
 
Failure by the SELLER to comply with the notice provisions in this Paragraph 2 shall preclude the SELLER from any right to extension of the Delivery Date.
 
3.
RIGHT TO CANCEL FOR EXCESSIVE DELAY
If the total accumulated time of (i) all permissible delays accrued under and in accordance with Paragraph 1 above aggregate to one hundred and eighty (180) days or more or (ii) all such
permissible delays and non-permissible delays aggregate to two hundred and forty (240) days or more, excluding delays determined by any arbitration tribunal as provided for in Article
XIII hereof or due to default in performance by the BUYER, or due to delays in delivery of the BUYER’S Supplied Items, and excluding delays due to causes which, under Article V,
Article VI, Article XI and Article XII hereof, permitting extension or postponement of the time for delivery of the VESSEL, then in such event, the BUYER may in accordance with the
provisions set out herein rescind or cancel this CONTRACT by serving upon the SELLER telefaxed or emailed notice of cancellation and the provisions of Article X of this CONTRACT
shall apply. Such rescission shall be effective as of the date of the notice thereof is received by the SELLER. If the BUYER has not served the notice of rescission as provided in Article
III(1) or Article VIII (3) the SELLER may at any time after expiration of the accumulated time of the delay in delivery, either two hundred ten (210) days in case of the non- permissible
delays in Article III Paragraph 1 or one hundred eighty (180) days in case of the permissible delays of Article VIII Paragraph 3 or two hundred forty (240) days in case of the total
permissible delays and non- permissible delays in Article VIII Paragraph 3, demand in writing that the BUYER shall make an election, in which case the BUYER shall, within thirty (30)
days after such demand is received by the BUYER either notify the SELLER of its intention to cancel, or consent to an extension of the time for delivery to a mutually agreed future date.
If the BUYER consents to an extension of the time for delivery to a mutually agreed future date, the SELLER shall remain liable at delivery for such liquidated damages accrued at time of
agreement of such extension as well as any additional liquidated damages accruing after the future date but always subject to the maximum liquidated damages USD 2,340,000.00 in
accordance with Article III Paragraph 1. It is understood and agreed by the parties hereto that if any further delay occurs on account of causes justifying cancellation as specified in this
CONTRACT, the BUYER shall have the same right of cancellation upon the same terms as hereinabove provided.
Page 50 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
4.
DEFINITION OF PERMISSIBLE DELAY
Delays on account of such causes as provided for in Paragraph 1 of this Article, but excluding any other extensions of a nature which under the terms of this CONTRACT permit
postponement of the Delivery Date, shall be understood to be (and are herein referred to as) permissible delays, and are to be distinguished from non-permissible delays on account of
which the Contract Price of the VESSEL is subject to adjustment as provided for in Article III hereof.
 
(End of Article)
Page 51 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
ARTICLE IX - WARRANTY OF QUALITY
1.
GUARANTEE OF MATERIAL AND WORKMANSHIP
The SELLER, for a period of twelve (12) months following delivery to the BUYER of the VESSEL, guarantees the VESSEL, her hull, engine and machinery and all parts and equipment
thereof that are manufactured or furnished or supplied by the SELLER and/or its subcontractors or suppliers under this CONTRACT including material, equipment (however excluding
any parts for the VESSEL which have been supplied by or on behalf of the BUYER) against all defects which are due to defective design, defective installation, materials, and/or poor
workmanship, construction, design, miscalculations or omissions or other improper acts by the SELLER and/or its subcontractors or suppliers provided that notice thereof shall have
been duly given to SELLER as prescribed below.
 
The SELLER agrees that upon the expiry of this guarantee it shall assign to the BUYER, all rights, title and interest that the SELLER may have in and to all guarantees or warranties given
by the supplier of any of the appurtenances and materials used in the construction and/or operation of the VESSEL. The SELLER agrees to render to the BUYER all reasonable
assistance in making any claim or taking any action against any such supplier, which claim or action shall be made and/or taken at the BUYER’S sole expense.
 
The full amount of any additional guarantees or warranties given by the SELLER’S subcontractors, suppliers, or manufacturers, if any, shall be duly transferred to the BUYER by the
SELLER to the maximum extent they are capable of being transferred in law but no such assignment shall discharge the SELLER from its responsibilities or obligation hereunder.
 
The BUYER shall be entitled on or after delivery and acceptance of the VESSEL to assign its rights under this Article to any purchaser or bareboat charterer or financier of the VESSEL
without the prior written consent of the SELLER. Notice of any such assignment shall be given by the BUYER to the SELLER.
 
Page 52 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
Any remedial work carried out in accordance with this Article shall in turn benefit from a further guarantee on the same terms as set out in this Article, such further guarantee to be for a
period of twelve (12) months from completion of such work, subject to that the overall maximum guarantee period for those above remedial parts shall not exceed eighteen (18) months
from the actual delivery date of the VESSEL.
 
2.
NOTICE OF DEFECTS
The BUYER shall notify the SELLER in writing, or by telefax or email of any defects for which a claim is made under this guarantee in the SELLER’S special claim form together with photo
showing defect or damaged part, as promptly as possible, but not later than seven (7) days after discovery thereof. The BUYER’S written notice shall describe the nature of the defect
and the extent of the damage caused thereby. The SELLER shall have no obligation under this guarantee for any defects discovered prior to the expiry date of this guarantee, unless
notice of such defects is received by the SELLER not later than twenty-one (21) days after such expiry date. Telefaxed or emailed advice with brief details explaining the nature of such
defect and extent of damage within the time limit(s) above and that a claim is forthcoming will be sufficient compliance with the requirements as to time.
3.
REMEDY OF DEFECTS
The SELLER shall remedy, at its expense, any defects against which the VESSEL or any part of the equipment thereof is guaranteed under this Article by making all necessary repairs
and/or replacements at the shipyard or elsewhere as provided for in (b) below. Such repairs and/or replacements will be made by the SELLER.
 
However, if the BUYER (acting reasonably) considers it is impractical to make the repair by the SELLER, and/or if forwarding by the SELLER of replacement parts, and materials cannot be
accomplished without impairing or delaying the operation or working schedule of the VESSEL, then, in any such event, the BUYER shall have the right to cause the necessary repairs or
replacements to be made elsewhere which is deemed suitable for the purpose, at the discretion of the BUYER provided that the BUYER shall first and in all events, will, as soon as
possible, give the SELLER notice in writing, or by telefax or email of the time and place such repairs will be made and, if the VESSEL is not thereby delayed, or her operation or working
schedule is not thereby delayed, or her operation or working schedule is not thereby impaired, the SELLER shall have the right to verify by its own representative(s) or that of
Classification Society the nature and extent of the defects complained of. The SELLER shall, in such cases, promptly advise the BUYER, by telefax or email, after such examination has
been completed, of its acceptance or rejection of the defects as ones that are subject to the guarantee herein provided.
 
Page 53 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
In any circumstances as set out below, the SELLER shall pay to the BUYER a sum in United States Dollars for the cost actually incurred by the BUYER for such repairs or replacements,
or calculated as the average cost for making similar repairs or replacements as quoted by a leading shipyard each in Singapore and Malaysia area, Shanghai, Guangzhou and Dalian,
whichever is lower, but excluding any indirect, special, exemplary, punitive and/or consequential losses and damages, arising from, or relating to or in connection with such repairs or
replacements (including but not limited to loss of hire, loss of contract, loss of profit, crew wage, cost of stores or inspection, customs, ship removal and towage, port and anchorage
charge, claims from third party):
 
(a) upon the SELLER’S acceptance of the defects as justifying remedy under this Article, or
 
(b) if the SELLER neither accepts nor rejects the defects as above provided, nor request arbitration within fifteen (15) days after its receipt of the BUYER’S notice of defects.
In any event, the VESSEL shall be taken at the BUYER’S cost and responsibility to the place elected, ready in all respects for such repairs or replacements.
 
Replacement parts or materials furnished to the BUYER by the SELLER for making repairs in an emergency under this guarantee elsewhere than at the SHIPYARD or in other facility of
the SELLER in People’s Republic of China shall be transported to the VESSEL at the place of such emergency repairs by air-freight at the SELLER’S expense. In the event the repairs are
not urgent and do not affect the seaworthiness of the VESSEL, such replacement parts shall be transported by sea freight to the VESSEL or to the place specified by the BUYER at the
SELLER’S expense.
 
Page 54 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
Any dispute under this Article shall be referred to arbitration in accordance with the provisions of Article XIII hereof.
 
4.
EXTENT OF THE SELLER’S LIABILITY
(a) The SELLER’S liability under this Article IX is strictly limited to the repair and/or replacement of any defects in the VESSEL which (i) are due to defective design, defective materials,
and/or poor workmanship, construction, design, miscalculation or omissions on the part of the SELLER and/or its subcontractors specified in Paragraph 1 of this Article, and (ii)
have been discovered and properly notified to the SELLER in accordance with Paragraph 2 of this Article (“DEFECT(s)”).
(b) The SELLER shall have no responsibility or liability for any other defects whatsoever in the VESSEL other than the DEFECT(s). The SELLER shall have no obligation and/or
liabilities with respect to defects discovered after the expiration of the guarantee period specified above.
 
(c) The SELLER shall not be obligated to repair, or to be liable for, damages to the VESSEL, or to any part of the equipment thereof, due to ordinary wear and tear or caused by the
defects other than those specified in Paragraph 1 above, nor shall there be any SELLER’S liability hereunder for defects in the VESSEL, or any part of the equipment thereof, caused
by fire or other accidents at sea or elsewhere (which fire or other accident is not directly caused or contributed to by a DEFECT), or accidents, or negligence in the maintenance of
the VESSEL on the part of the BUYER, its employees or agents including the VESSEL’S officers, crew and passengers, or any persons on or doing work on the VESSEL other than
the SELLER, its employees, agents or subcontractors, except caused by the maintenance of the VESSEL’S equipment in accordance with the SELLER’S supplier’s written
instructions. Likewise, the SELLER shall not be liable for defects in the VESSEL, or the equipment or any part thereof, due to repairs or replacement which were made by those other
than the SELLER and/or their subcontractors and/or not in accordance with this Article. The SELLER shall not be responsible for any DEFECT(s) in any part of the VESSEL which
subsequent to delivery of the VESSEL has been replaced or in any way repaired by any other contractor other than in accordance with this Article.
 
Page 55 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
(d) Upon delivery of the VESSEL to the BUYER, in accordance with the terms of this CONTRACT, the SELLER shall thereby and thereupon be released of all responsibility and liability
whatsoever and howsoever arising under or by virtue of this CONTRACT (save in respect of those obligations to the BUYER expressly provided for in this Article IX and in Article
XVI (patents, trademarks and copyright)). Nor shall The SELLER in any circumstances, be responsible or liable for (i) any consequential, indirect or special losses, damages or
expenses whatsoever or howsoever arising; or (ii) any losses, damages or expenses for loss of time, loss of profit, loss of earnings or demurrage, regardless of whether such losses,
damages or expenses are the direct or indirect result of any DEFECT(s) or are the direct or indirect result of repairs or other works done to the VESSEL to remedy such DEFECT(s).
(e) The guarantee provided in this Article and the obligations and the liabilities of the SELLER hereunder are exclusive and in lieu of and the BUYER hereby waives all other remedies,
warranties, guarantees, liabilities or conditions, express or implied, arising by law, customary, statutory or otherwise (including without limitation any obligations of the SELLER with
respect to fitness, merchantability and consequential damages) or whether or not occasioned by the SELLER’S negligence. The guarantee contained in this Article shall not be
extended, altered or varied except by a written instrument signed by the duly authorized representatives of the SELLER and the BUYER.
 
(f)
In case of the sale of the VESSEL from the BUYER to a new owner during the above stipulated guarantee period or if the BUYER bareboat charters the VESSEL, the SELLER agrees
that BUYER may assign the remaining guarantee period to the new owner or bareboat charterer, which shall in no circumstances exceed twelve (12) months from the date of delivery
of the VESSEL to the BUYER provided that this shall not impose any more obligations and /or liabilities to the SELLER than those contained in the original guarantee as set out
herein.
(End of Article)
Page 56 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
ARTICLE X - CANCELLATION, REJECTION AND RESCISSION BY THE BUYER
1.
All payments made by the BUYER prior to the delivery of the VESSEL shall be in the nature of advance to the SELLER. In the event the BUYER shall exercise its right of termination,
cancellation and/or rescission of this CONTRACT under and pursuant to any of the provisions of this CONTRACT specifically permitting the BUYER to do so, then the BUYER
shall notify the SELLER in writing or by telefax or email, and such termination, cancellation and/or rescission shall be effective as of the date the notice thereof is received by the
SELLER, unless, by the time of the attempted delivery of the aforesaid notice, the SELLER as a corporate body has ceased its corporate existence and the notice hereunder cannot
be served on it (or on any duly appointed officer, liquidator, receiver or trustee), and it is only under such circumstances the notice of rescission shall be deemed to be received in
such method as set forth in Article XVII hereof.
 
In addition to the BUYER’S right of cancellation and /or rescission of this CONTRACT under and pursuant to any of the provisions of this CONTRACT specifically permitting the
BUYER to do so, the BUYER shall be entitled to rescind or terminate this CONTRACT upon occurrence of any of the following events:
 
(a) The SELLER applies for or consents to the appointment of a receiver, trustee or liquidator or an order is made by any competent court or resolutions are passed by the Board of
Directors and /or shareholders and /or creditor(s) of the SELLER for the appointment of a liquidator, receiver, trustee, administrator or similar officer of the SELLER, or any final
and effective order is made by any competent court for the winding-up or liquidation of the SELLER, provided however that it shall not be deemed as SELLER’S default under
this sub-paragraph (a) hereof if in any such case the SELLER is engaged in a bona fide restructure of its business or amalgamation or merger without insolvency which does not
prejudice its creditors and /or the SELLER (each of the preceding an “Insolvency Event”). For the avoidance of doubt, the BUYER’S right of termination shall arise if either of
the companies constituting the “SELLER” suffers an Insolvency Event; or
Page 57 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
 
(b) failure of the SELLER to (i) issue the Refund Guarantee within ninety (90) days of the date this CONTRACT is executed by all parties or (ii) maintain or extend the Refund
Guarantee, in each case in accordance with Paragraph 7 of Article II hereof or failure to maintain the necessary approvals; or
 
 
(c) if, by reason or in consequence of any Sanctions imposed on, applying to, or affecting, the SELLER, or the SELLER’S parent company, or the Refund Guarantor, the BUYER is
prevented or prohibited from performing its obligations under this CONTRACT or taking delivery of, removing from China, registering, operating or otherwise having full and
unrestricted use of the VESSEL, or it is or becomes impossible for the BUYER to demand or receive payment under the Refund Guarantee when it would otherwise be entitled to
do so.
 
 
(d) if an Insolvency Event occurs with respect to the Refund Guarantor and if the SELLER is unable to substitute the Refund Guarantor with the new one that is acceptable to the
BUYER within ninety (90) days.
  
2.
Thereupon the SELLER shall refund in United States Dollars to the BUYER the full amount of all sums paid by the BUYER to the SELLER on account of the VESSEL, unless the
SELLER disputes the BUYER’S cancellation and/or rescission by instituting arbitration in accordance with Article XIII. If the BUYER’S cancellation or rescission of this
CONTRACT is disputed by the SELLER by instituting arbitration as aforesaid, then no refund shall be made by the SELLER, until the arbitration award between the BUYER and the
SELLER which shall be in favour of the BUYER, declaring the BUYER’S cancellation and/or rescission justified, is made and delivered to the SELLER, provided that the parties
acknowledge that the BUYER shall nevertheless be entitled to demand repayment from the Refund Guarantor under the Refund Guarantee notwithstanding any such dispute
between the parties to this CONTRACT.
In the event that the SELLER is obligated to make refundment, the SELLER shall pay the BUYER interest in United States Dollars at the rate of five percent (5%) per annum, if the
termination, cancellation or rescission of this CONTRACT is exercised by the BUYER under and pursuant to any of the provisions of this CONTRACT specifically permitting the
BUYER to do so, on the amount required herein to be refunded to the BUYER computed from the respective dates when such sums were received by the bank account as nominated
by the SELLER pursuant to Article II 4(a), 4(b), 4(c), 4(d) from the BUYER to the date of remittance by telegraphic transfer of such refund to the BUYER by the SELLER.
 
Page 58 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
3.
Upon such refund by the SELLER to the BUYER, all obligations, duties and liabilities of each of the parties hereto to the other under this CONTRACT shall be forthwith completely
discharged.
 
4.
The remedy set out in this Article X shall be the sole remedy of the BUYER in the event of termination, cancellation or rescission by the BUYER of this CONTRACT under and
pursuant to any of the provisions of this CONTRACT specifically permitting the BUYER to do so, or in the event of any other termination, cancellation or rescission of this
CONTRACT by the BUYER due to the SELLER’s breach of contract.
(End of Article)
Page 59 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
ARTICLE XI - BUYER’S DEFAULT
1.
DEFINITION OF BUYER’S DEFAULT
The BUYER shall be deemed in default of its obligation under this CONTRACT if any of the following events occurs:
(a) The BUYER fails to pay the First or Second or Third or Fourth Instalment to the SELLER when any such Instalment(s) becomes due and payable under the provisions of Article II
hereof and the BUYER has not effected payment thereof together with interest thereon at the rate provided at Article XI Paragraph 3 below within four (4) business days of being
notified by the SELLER of such non payment; or
 
(b) The BUYER fails to pay the Fifth Instalment to the SELLER concurrently with the delivery of the VESSEL by the SELLER to the BUYER in accordance with Paragraph 3(e) and 4(e) of
Article II hereof; or
 
(c) The BUYER fails to take delivery of the VESSEL within three (3) banking days, when the VESSEL is duly tendered for delivery by the SELLER under the provisions of Article VII
hereof.
 
(d) The BUYER applies for or consents to the appointment of a receiver, trustee or liquidator or an order is made by any competent court or resolutions are passed by the Board of
Directors and /or shareholders and /or creditor(s) of the BUYER for the appointment of a liquidator, receiver, trustee, administrator or similar officer of the BUYER, or any final and
effective order is made by any competent court for the winding- up or liquidation of the BUYER, provided however that it shall not be deemed as BUYER’S default under this sub-
paragraph (d) hereof if in any such case the BUYER is engaged in a bona fide restructure of its business or amalgamation or merger without insolvency which does not prejudice its
creditors and /or the BUYER.
 
(e) failure of the BUYER to issue or maintain the Corporate Guarantee as per Paragraph 6 of Article II hereof;
 
Page 60 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
(f)
if, by reason or in consequence of any Sanctions imposed on, applying to, or affecting, the BUYER or the Corporate Guarantor, the SELLER is prevented or prohibited from
performing its obligations under this CONTRACT, or from receiving payment of the Contract Price.
 
(g) if an Insolvency Event as described in the sub-paragraph (d) above occurs with respect to the Corporate Guarantor and if the BUYER is unable to substitute the Corporate
Guarantor with the new one that is acceptable to the BUYER within ninety (90) days.
 
2.
NOTICE OF DEFAULT
If the BUYER is in default of payment or in performance of its obligations as provided hereinabove, the SELLER shall notify the BUYER to that effect by telefax or email after the date of
occurrence of the default as per Paragraph 1 of this Article and the BUYER shall forthwith acknowledge by telefax or email to the SELLER that such notification has been received.
 
In case the BUYER does not give the aforesaid telefax or email acknowledgment to the SELLER within three (3) days it shall be deemed that such notification has been duly received by
the BUYER.
Without prejudice to the foregoing, if the circumstances described in Article II Paragraph 2 apply, the parties shall discuss the possibility of paying in an alternative currency as
described therein.
3.
INTEREST AND CHARGE
If the BUYER is in default of payment as to any instalment as provided in Paragraph 1 (a) and/or 1(b) of this Article, the BUYER shall pay interest on such instalment at the rate of five
percent (5%) per annum for a period from the date when such instalment(s) becomes due and payable under the provisions of Article II hereof to the date of the payment of the full
amount, including all aforesaid interest. In case the BUYER shall fail to take delivery of the VESSEL when required to as provided in Paragraph 1 (c) of this Article, the BUYER shall be
deemed in default of payment of the Fifth (5th) Instalment and shall pay interest thereon at the same rate as aforesaid from and including the day on which the VESSEL is tendered for
delivery by the SELLER, as provided in Article VII Paragraph 6 hereof.
Page 61 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
4.
DEFAULT BEFORE DELIVERY OF THE VESSEL
(a) If any default by the BUYER occurs as defined in Paragraph 1 (a) or 1 (b) or 1 (c) of this Article, the Delivery Date shall, be automatically postponed for a period of continuance of
such default by the BUYER.
(b) If any such default as defined in Paragraph 1 (a) or 1 (b), 1 (c) or 1 (e) of this Article continues for a period of fifteen (15) days following written notice by the SELLER of the default
or any such default as defined in Paragraph 1 (d), 1 (f) or 1 (g) of this Article committed or suffered by the BUYER occurs, then, the SELLER shall have all following rights and
remedies:
 
 
(i)
The SELLER may, at its option, cancel or rescind this CONTRACT, provided the SELLER has notified the BUYER of such default pursuant to Paragraph 2 of this Article, by
giving notice of such effect to the BUYER by telefax or email. Upon receipt by the BUYER of such telefax or email notice of cancellation or rescission, all of the BUYER’S
Supplied Items shall forthwith become the sole property of the SELLER, and the VESSEL and all its equipment and machinery shall be at the sole disposal of the SELLER for sale
or otherwise; and
 
 
(ii) In the event of such cancellation or rescission of this CONTRACT, the SELLER shall be entitled to retain any instalment or instalments of the Contract Price paid by the BUYER
to the SELLER on account of this CONTRACT.
 
5.
SALE OF THE VESSEL
 
 
(a) In the event of termination, cancellation or rescission of this CONTRACT as above provided, the SELLER shall have full right and power either to complete or not to complete
the VESSEL as it deems fit, and to sell the VESSEL at a public or private sale on such terms and conditions as the SELLER thinks fit without being answerable for any loss or
damage occasioned to the BUYER thereby.
 
The SELLER shall use its reasonable efforts to obtain the best terms possible.
Page 62 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
In the case of sale of the VESSEL, the SELLER shall give telefax or email notice to the BUYER.
 
(b) In the event of the sale of the VESSEL in its completed state, the proceeds of sale received by the SELLER shall be applied firstly to payment of all expenses attending such sale
and otherwise incurred by the SELLER as a result of the BUYER’S default, and then to payment of all unpaid instalments and/or unpaid balance of the Contract Price and
interest on such instalment at the interest rate as specified in the relevant provisions set out above from the respective due dates thereof to the date of application.
 
 
(c) In the event of the sale of the VESSEL in its incomplete state, the proceeds of sale received by the SELLER shall be applied firstly to all expenses attending such sale and
otherwise incurred by the SELLER as a result of the BUYER’S default, and then to payment of all costs of construction of the VESSEL (such costs of construction, as herein
mentioned, shall include but are not limited to all costs of labor and/or prices paid or to be paid by the SELLER for the equipment and/or technical design and/or materials
purchased or to be purchased, installed and/or to be installed on the VESSEL) and/or any fees, charges, expenses and/or royalties incurred and/or to be incurred for the VESSEL
less the instalments so retained by the SELLER, and compensation to the SELLER for a reasonable sum of loss of profit which the SELLER would have been entitled to receive if
the VESSEL had been completed and delivered.
 
 
(d) In either of the above events of sale, if the proceeds of sale exceed the total of the amounts to which such proceeds are to be applied as aforesaid, the SELLER shall promptly
pay the excesses to the BUYER without interest, provided, however that the amount of each payment to the BUYER shall in no event exceed the total amount of instalments
already paid by the BUYER and the cost of the BUYER’S Supplied Items, if any.
 
Page 63 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
 
(e) If the proceeds of sale are insufficient to pay such total amounts payable as aforesaid, the BUYER and/or the Corporate Guarantor shall promptly pay the deficiency to the
SELLER upon request.
 
 
(f)
The remedy set out in this Article XI shall be the sole remedy of the SELLER in the event of termination, cancellation or rescission by the SELLER of this CONTRACT due to
BUYER’S Default, or in the event of any other termination, cancellation or rescission of this CONTRACT by the SELLER due to the BUYER’s breach of contract.
(End of Article)
Page 64 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
ARTICLE XII - INSURANCE
1.
EXTENT OF INSURANCE COVERAGE
From the time of keel-laying of the first section of the VESSEL until the same is completed, delivered to and accepted by the BUYER, the SELLER shall, at its own cost and expense, keep
the VESSEL and all machinery, materials, equipment, appurtenances and outfit, delivered to the SELLER for the VESSEL or built into, or installed in or upon the VESSEL, including the
BUYER’S Supplied Items, fully insured with one of first class Chinese insurance companies for SELLER’S risk, under coverage corresponding to London Institute of Builder’s Risks
clause (but without exclusion for earthquakes or volcanic eruptions).
 
The amount of such insurance coverage shall, up to the date of delivery of the VESSEL, be in an amount at least equal to, but not limited to, the aggregate of all instalments and any
other payments made by the BUYER to the SELLER and including accrued interest at five percent (5%) per annum on BUYER’S instalments and including the value of the BUYER’S
Supplied Items. One copy of each of the SELLER’S risk insurance policy shall be delivered to the BUYER upon the BUYER’S request. Any deductible set forth in the above policy or
places of insurance shall be borne solely for the account of the SELLER. The policy referred to hereinabove shall be taken out in the name of the SELLER and all losses under such
policy shall be payable to the SELLER as per Paragraph 2 of this Article below.
 
2.
APPLICATION OF RECOVERED AMOUNT
(a) Partial Loss:
In the event the VESSEL shall be damaged by any insured cause whatsoever prior to acceptance and delivery thereof by the BUYER and in the further event that such damage shall not
constitute an actual or a constructive total loss of the VESSEL, the SELLER shall apply the amount recovered under the insurance policy referred to in Paragraph 1 of this Article to the
repair of such damage satisfactory to the Classification Society and other institutions or authorities as described in the SPECIFICATIONS without additional expenses to the BUYER,
and the BUYER shall accept the VESSEL under this CONTRACT if completed and if it is upon delivery in all respects in accordance with this CONTRACT and the SPECIFICATIONS and
not make any claim for any consequential loss or depreciation.
 
Page 65 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
(b) Total Loss:
However, in the event that the VESSEL is determined to be an actual or a constructive total loss, the SELLER shall either:
 
(i)
By the mutual agreement between the parties hereto, proceed in accordance with terms of this CONTRACT, in which case the amount recovered under said insurance policy shall be
applied to the reconstruction and/or repair of the VESSEL’S damages and/or reinstallation of the BUYER’S Supplied Items, provided the parties hereto shall have first agreed in
writing as to such reasonable extension of the Delivery Date and adjustment of other terms of this CONTRACT including the Contract Price as may be necessary for the completion
of such reconstruction; or
 
(ii) If due to whatever reasons the parties fail to agree on the above, then refund immediately to the BUYER the amount of all instalments paid to the SELLER under this CONTRACT
with interest, at the rate of five percent (5%) per annum for a period from the respective dates when such instalments were received by the bank account as nominated by the
SELLER pursuant to Article II 4(a), 4(b), 4(c), 4(d) from the BUYER to the date of remittance by telegraphic transfer of such refund to the BUYER by the SELLER, and return to the
BUYER all of the BUYER’S Supplied Items which were not incorporated into the VESSEL and pay to the BUYER an amount equal to the cost to the BUYER of those BUYER’S
Supplied Items incorporated into the VESSEL, whereupon this CONTRACT shall be deemed to be canceled and all rights, duties, liabilities and obligations of each of the parties to
the other shall terminate forthwith.
 
Page 66 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
Within thirty (30) days after receiving telefax or email notice of any damage to the VESSEL constituting an actual or a constructive total loss, the BUYER shall notify the SELLER by
telefax or email of its agreement or disagreement under this sub-paragraph. In the event the BUYER fails to so notify the SELLER, then such failure shall be construed as a disagreement
on the part of the BUYER. This CONTRACT shall be deemed as rescinded and canceled and the BUYER receive the refund as hereinabove provided and the provisions hereof shall
apply.
3.
TERMINATION OF THE SELLER’S OBLIGATION TO INSURE
The SELLER’S obligation to insure the VESSEL hereunder shall cease and terminate forthwith upon delivery thereof to and acceptance by the BUYER.
 
(End of Article)
Page 67 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
ARTICLE XIII - DISPUTES AND ARBITRATION
1.
RULES, REGULATIONS AND REQUIREMENTS OF CLASSIFICATION SOCIETY
 
In the event that any dispute shall arise as to the conformity and compliance of any construction of the VESSEL, her machinery and equipment or material (including substitution of
materials) or workmanship thereof and/or thereon, and/or in respect of interpretation of the SPECIFICATIONS with the Classification Society requirements, such dispute shall be
submitted to the head office of the Classification Society whose decision as to whether or not such construction or material meets the Classification Society requirements shall be final.
 
2.
TECHINICAL MATTERS
Any dispute or disagreement between the parties relating to any technical matter not governed by or relating to the rules and regulations of the Classification Society may be referred to
an expert. The appointment of the expert shall be mutually agreed between the parties, however if they fail to do so within 7 days from the day that the relevant technical matter has been
notified to the other party, then the matter shall be referred to the head office of the Classification Society, and they shall appoint the expert. Such expert shall give his opinion as an
expert and not as an arbitrator and his opinion shall not be final and binding on the parties who shall be at liberty to refer the matter to the arbitration if they do not agree with such
opinion.
 
3.
PROCEEDINGS
Except as provided in Paragraphs 1 and 2 above, all disputes, controversies or differences which may arise between the parties as to any matter arising out of or relating to this
CONTRACT or any stipulation herein or with respect thereto which cannot be settled by the parties themselves shall be finally settled by arbitration in London Maritime Arbitrators
Association (“LMAA”) in London, England, in accordance with English laws, and the Arbitration Act 1996 of the United Kingdom or any re-enactment or statutory modification thereof
for the time being in force, and LMAA’s then prevailing arbitration rules.
Page 68 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
Either party may demand arbitration of any such disputes by giving written notice to the other party. Any demand for arbitration by either party hereto shall state the name of the
arbitrator appointed by such party and shall also state specifically the question or questions as to which such party is demanding arbitration. Within twenty (20) days after receipt of
notice of such demand for arbitration, the other party shall in turn appoint a second arbitrator. The two arbitrators thus appointed shall thereupon select a third arbitrator, and the three
arbitrators so named shall constitute the board of arbitration (hereinafter called the “Arbitration Board”) for the settlement of such dispute.
 
In the event however, that said other party should fail to appoint a second arbitrator as aforesaid within twenty (20) days following receipt of notice of demand of arbitration, it is agreed
that such party shall thereby be deemed to have accepted and appointed as its own arbitrator the one already appointed by the party demanding arbitration, and the arbitration shall
proceed forthwith before this sole arbitrator, who alone, in such event, shall constitute the Arbitration Board. And in the further event that the two arbitrators appointed respectively by
the parties hereto as aforesaid should be unable to reach agreement on the appointment of the third arbitrator within twenty (20) days from the date on which the second arbitrator is
appointed, either party of the said two arbitrators may apply to the President of the London Maritime Arbitrators Association to appoint the third arbitrator. The award of the arbitration,
made by the sole arbitrator or by the majority of the three arbitrators as the case may be, shall be final, conclusive and binding upon the parties hereto.
 
4.
ALTERNATIVE SETTLEMENT BY AGREEMENT
Notwithstanding the preceding provisions of this Article, it is recognized that in the event of any dispute or difference of opinion arising in regard to the construction of the VESSEL, her
machinery and equipment, or concerning the quality of materials or workmanship thereof or thereon, such dispute may be referred to the Classification Society upon mutual agreement of
the parties hereto. In such case, the opinion of the Classification Society shall be final and binding on the parties hereto.
Page 69 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
5.
NOTICE OF AWARD
Notice of any award shall immediately be given in writing or by telefax or email confirmed in writing to the SELLER and the BUYER.
 
6.
EXPENSES
The arbitrator(s) shall determine which party shall bear the expenses of the arbitration or the proportion of such expenses which each party shall bear.
 
Notwithstanding the foregoing, each party shall bear the expense of presenting its own witness and evidence to the Arbitration Board.
 
7.
AWARD OF ARBITRATION
 
Award of arbitration shall be final and binding upon the parties concerned.
8.
ENTRY IN COURT
Judgment on any award may be entered in any court of competent jurisdiction.
 
9.
ALTERATION OF DELIVERY TIME
In the event of reference to arbitration of any dispute arising out of matters occurring prior to delivery of the VESSEL, the SELLER shall not be entitled to extend the Delivery Date as
defined in Article VII hereof and the BUYER shall not be entitled to postpone its acceptance of the VESSEL on the Delivery Date or on such newly planned time of delivery of the
VESSEL as declared by the SELLER.
 
However, if the construction of the VESSEL is affected by any arbitration or court proceeding, the arbitrators shall be asked to include in the arbitration award a finding as to what extent
the SELLER shall be permitted to extend the Delivery Date.
 
(End of Article)
Page 70 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
ARTICLE XIV - RIGHT OF ASSIGNMENT OR NOVATION
Neither of the parties hereto shall assign or novate this CONTRACT to any other individual, firm, company or corporation or any other third parties without the expressly prior written
consent of the other party, except that this CONTRACT may be:
 
(i)
assigned in accordance with the express provisions of this CONTRACT;
(ii) assigned by way of security to a bank or financier providing finance to the BUYER in connection with the VESSEL; or
(iii) assigned to another company by BUYER with the prior written approval of the SELLER, such approval not to be unreasonably withheld or delayed; or
(iv) novated to another company that is a member of the same group of companies as whose ships are managed by Unitized Ocean Transport Limited of the Republic of the Marshall
Islands.
Provided that in the case of any such assignment or novation under Article XIV (i) or (ii) or (iv) above, the payment obligations of the BUYER continue to be guaranteed by
PERFORMANCE SHIPPING INC. as provided in Article II.6. The SELLER will in such case enter into such acknowledgement of assignment and/or novation agreement as the SELLER
may approve, such approval not to be unreasonably withheld or delayed.
 
(End of Article)
Page 71 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
ARTICLE XV - TAXES AND DUTIES
1.
TAXES
All taxes including stamp duties, levies, if any, incurred in connection with this CONTRACT in the People’s Republic of China shall be borne by the SELLER. Any taxes and/or duties
imposed upon those items or services procured by the SELLER in the People’s Republic of China or elsewhere for the construction of the VESSEL shall be borne by the SELLER. All
taxes on income of the SELLER shall be borne by the SELLER.
 
2.
DUTIES
The SELLER shall indemnify the BUYER for, and hold it harmless against, any duties imposed in the People’s Republic of China upon materials and equipment which under the terms of
this CONTRACT and/or the SPECIFICATIONS will, or may be, supplied by the BUYER from the abroad for installation in the VESSEL as well as any duties imposed in the People’s
Republic of China upon running stores, provisions and supplies furnished by the BUYER from abroad to be stocked on board the VESSEL and also from the payment of export duties, if
any, to be imposed upon the VESSEL as a whole or upon any of its parts or equipment.
 
(End of Article)
Page 72 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
ARTICLE XVI - PATENTS, TRADEMARKS AND COPYRIGHTS
The machinery and equipment of the VESSEL may bear the patent number, trademarks or trade names of the manufacturers. The SELLER shall defend and save harmless the BUYER from
patent liability or claims of patent infringement of any nature or kind, including costs and expenses for, or on account of any patented or patentable invention made or used in the
performance of this CONTRACT and also including cost and expense of litigation, if any.
 
Nothing contained herein shall be construed as transferring any patent or trademark rights or copyright in equipment covered by this CONTRACT, and all such rights are hereby
expressly reserved to the true and lawful owners thereof.
The SELLER’S indemnity hereunder does not extend to equipment or parts supplied by the BUYER to the SELLER if any.
 
The SELLER retains (if any) all patents, copyrights and other intellectual property rights with respect to the SPECIFICATIONS and plans and working drawings, technical descriptions,
calculations, test results and other data, information and documents concerning the design and construction of the VESSEL (the “IPR”) and grants to the BUYER an irrevocable,
worldwide, non-exclusive, royalty free licence in the IPR for all purposes relating to the ownership, operation, maintenance, repair and modification, sale and chartering of the VESSEL,
and the BUYER undertakes not to disclose the same or divulge any information contained therein to any third parties save for the aforementioned purposes or otherwise with the prior
written consent of the SELLER.
 
(End of Article)
Page 73 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
ARTICLE XVII - NOTICE
Any and all notices demands, instructions, advices and communications in connection with this CONTRACT shall be addressed as follows:
 
To the BUYER:
Address : c/o Unitized Ocean Transport Limited
373 Syngrou Ave. & 2-4 Ymittou str., 17564, Palaio Faliro,
Athens, Greece
 
Technical contact information: Mr. Argyris Chachalis
Telephone
Email:
Commercial Contact information: Mr. Andreas Michalopoulos
Telephone:
Email:
To the SELLER:
JIANGSU YANGZIJIANG SHIPBUILDING GROUP CO., LTD.
JIANGSU NEW YANGZI SHIPBUILDING CO., LTD.
JIANGSU YANGZI XINFU SHIPBUILDING CO., LTD.
Address
:
Jingjiang Park of Jiangyin Economic Development Zone,
Jingjiang City, Jiangsu Province,
the People’s Republic of China
Tele No.
:
Telefax No.
:
E-mail 
:
 
Attention
:
Mr. Ji Hong Fei
Any change of address shall be communicated in writing by email, telefax, courier or registered mail by the party making such change to the other party and in the event of failure to give
such notice of change, communications addressed to the party at their last known address shall be deemed sufficient.
Page 74 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
Any and all notices, requests, demands, instructions, advice and communications in connection with this CONTRACT shall be deemed to be given at, and shall become effective from,
the time when the same is delivered to the address of the party to be served, provided, however, that registered airmail shall be deemed to be delivered ten (10) days after the date of
dispatch, express courier service shall be deemed to be delivered five (5) days after the date of dispatch, and telefax acknowledged by answerbacks or emails moved to the “Sent” box
shall be deemed to be delivered upon dispatch.
 
Any and all notices, communications, SPECIFICATIONS and drawings in connection with this CONTRACT shall be written in the English language and each party hereto shall have no
obligation to translate them into any other language.
 
(End of Article)
Page 75 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
ARTICLE XVIII - EFFECTIVE DATE OF CONTRACT
This CONTRACT shall become effective upon signing of this CONTRACT by the parties hereto.
(End of Article)
Page 76 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
ARTICLE XIX - INTERPRETATION
1.
LAW APPLICABLE
This CONTRACT has been prepared in English and shall be executed in duplicate and in such number of additional copies as may be required by either party respectively.
 
The parties hereto agree that the validity and interpretation of this CONTRACT and of each Article and part hereof as well as any non-contractual obligations arising under or in
connection with this CONTRACT be governed by and interpreted in accordance with the Laws of England.
2.
DISCREPANCIES
All general language or requirements embodied in the SPECIFICATIONS are intended to amplify, explain and implement the requirements of this CONTRACT. However, in the event that
any language or requirements so embodied in the SPECIFICATIONS permit an interpretation inconsistent with any provision of this CONTRACT, then in each and every such event the
applicable provisions of this CONTRACT shall prevail and govern. The SPECIFICATIONS and plans are also intended to explain each other, and anything shown on the plans and not
stipulated in the SPECIFICATIONS or stipulated in the SPECIFICATIONS and not shown on the plans shall be deemed and considered as if embodied in both. In the event of conflict
between the SPECIFICATIONS and plans, the SPECIFICATIONS shall prevail and govern.
 
However, with regard to such inconsistency or contradiction between this CONTRACT and the SPECIFICATIONS as may later occur by any change or changes in the SPECIFICATIONS
agreed upon by and among the parties hereto after execution of this CONTRACT, then such change or changes shall prevail and govern.
 
3.
DEFINITION
In absence of stipulation of “banking day(s)” or “business day(s)”, the “day” or “days” shall be taken as “calendar day” or “calendar days”.
 
Page 77 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
For the purpose of this CONTRACT, “Banking Day(s)” or “banking day(s)” shall mean days, excluding Saturdays, Sundays and public holidays in New York, Athens, London, Oslo and
Beijing.
 
“Business Day(s)” or “business day(s)” shall mean days, excluding Saturdays, Sundays and public holidays in Greece and China.
“Sanctions” shall mean economic, financial or trade sanctions or embargoes enacted or imposed by law or regulation or other restrictive measure or policy and administered or enforced
from time to time by (a) the United Nations Security Council, (b) the US government, (c) the European Union or any of its member states’ governments, (d) the United Kingdom, (e) the
People’s Republic of China, (f) Singapore or (g) by any other generally recognized country which is not itself the subject of any official sanction or prohibition on dealings imposed by
any of the foregoing (whether through the Office of Foreign Assets Control of the U.S. Department of Treasury, the United States Department of State, the United States Department of
Commerce or His Majesty’s Treasury or otherwise).
 
4.
ENTIRE AGREEMENT
This CONTRACT including the attachments at Article I Paragraph 1 constitutes the entire agreement and understanding between the parties hereto and supersedes  all  prior 
negotiations,  representations, undertaking  and agreements on any subject matter of this CONTRACT.
 
(End of Article)
Page 78 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
In WITNESS WHEREOF, the parties hereto have caused this CONTRACT to be duly executed on the day and year first above written.
 
THE BUYER:
 
SAINT BARTH SHIPPING COMPANY INC.
By:
Name:
Title:
THE SELLER:
 
JIANGSU YANGZIJIANG SHIPBUILDING GROUP CO., LTD.
By:
Name:Ren Letian
Title:  Legal Representative
 
JIANGSU NEW YANGZI SHIPBUILDING CO., LTD.
By:
Name:Ren Letian
Title:  Legal Representative
 
JIANGSU YANGZI XINFU SHIPBUILDING CO., LTD.
By:
Name:Ren Letian
Title:  Legal Representative
Page 79 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
EXHIBIT “A”: IRREVOCABLE LETTER OF REFUND GUARANTEE
TO:
ADDRESS: 
Dear Sirs,
We, [     ], hereby issue our irrevocable letter of guarantee no. [             ] in favour of SAINT BARTH SHIPPING COMPANY INC., a corporation organized and existing under the Laws of
Republic of the Marshall Islands, having its registered address at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro Marshall Islands MH96960 (hereinafter referred to as
the “Buyer”), for account of (a) Jiangsu Yangzijiang Shipbuilding Group Co., Ltd., a corporation organized and existing under the Laws of the People’s Republic of China, having its
registered office at No. 1 Lianyi Road, Jingjiang Park of Jiangyin Economic Development Zone, Jingjiang City, Jiangsu Province, the People’s Republic of China, (b) Jiangsu New Yangzi
Shipbuilding Co., Ltd., a corporation organized and existing under the Laws of the People’s Republic of China, having its registered office at Jingjiang Park of Jiangyin Economic
Development Zone, Jingjiang City, Jiangsu Province, the People’s Republic Of China and (c) Jiangsu Yangzi Xinfu Shipbuilding Co., Ltd., a corporation organized and existing under the
Laws of the People’s Republic of China, having its registered office at Hongqiao Industrial Park, Taixing City, Jiangsu Province, the People’s Republic of China (hereinafter collectively
referred to as the “Seller”), at the application of the Seller and in consideration of the readiness of the Buyer in making advance payment to the Seller under the shipbuilding contract no.
2024YZJ849GR dated 30th April 2024 made by and between the Buyer and the Seller (such contract as may from time to time be further amended, varied, supplemented, assigned or
novated hereinafter, with or without our consent referred to as the “Contract”), for the design, construction and sale of one (1) 75,000 DWT Product Oil / Chemical Tanker having the
Seller’s hull no. YZJ2024-1624 (hereinafter called the “Vessel”).
 
Page 80 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
1.
We hereby irrevocably, absolutely and unconditionally guarantee as a primary obligor and not as a surety that we shall pay to the Buyer on Buyer’s first written demand (provided
only such demand is made in accordance with Clause 2 below) an amount stated in the Buyer’s demand of up to but not exceeding (when aggregated with all other demands made
under this letter of guarantee), United States Dollars Twenty-Five Million Four Hundred and Thirty-Nine Thousand Eight Hundred and Fifty Only (USD 25,439,850.00) (hereinafter
the “Limit”), representing the first installment of United States Dollars Eight Million Four Hundred and Seventy-Nine Thousand Nine Hundred and Fifty Only (USD 8,479,950.00), the
second installment of United States Dollars Five Million Six Hundred and Fifty-Three Thousand and Three Hundred Only (USD 5,653,300.00), the third installment of United States
Dollars Five Million Six Hundred and Fifty-Three Thousand and Three Hundred Only (USD 5,653,300.00) and the fourth installment of United States Dollars Five Million Six Hundred
and Fifty-Three Thousand and Three Hundred Only (USD 5,653,300.00) due under Article II of the Contract, (in order to secure repayment to you as and when the Buyer becomes
entitled to a refund of the advance payment(s) made to the Seller, or any part thereof, prior to the delivery of the Vessel in connection with or under the terms and conditions of the
Contract, should the Seller fail to make such repayment), together with interest at the rate of 5 pct (five percent) per annum from the respective dates of receipt by the Seller of each
of the installments referred to in this Clause 1 to the date of remittance by telegraphic transfer of our payment, within thirty (30) days after our receipt of your demand complying
with Clause 2 of this letter of guarantee.
 
2.
Any demand by the Buyer under Clause 1 shall state the amount demanded and contain a statement certifying that the Buyer’s demand for refund has been made to the Seller in
conformity with Article X of the Contract and the Seller has not yet made the refund. Any such demand, if not submitted by SWIFT, shall be signed by or on behalf of the Buyer.
 
3.
We shall make payment to the Buyer under this letter of guarantee by telegraphic transfer in United States Dollars free of bank charges, remittance fees, taxes and other applicable
withholdings (and without any set-off, counterclaim, or other deductions whatsoever) the amount to be refunded as set out in the Buyer’s demand in accordance with Clause 2, but
not exceeding the Limit plus the interest described above.
Page 81 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
4.
We hereby acknowledge and agree that payment of any interest hereunder is by way of liquidated damages due to rescission of the Contract and not by way of compensation for
use of the money.
5.
Your demands and notices in connection with this letter of guarantee shall be validly given if sent to us through your bank by authenticated SWIFT (to SWIFT code: [  ]) or by
courier to our office authenticated by your bank as follows:
 
[          ]
Address: [          ]
Tel: [  ]
 
6.
This letter of guarantee shall become effective from the time of the actual receipt of the first installment by the Seller, at its account no. [ ] with us and the amounts guaranteed under
this letter of guarantee shall correspond to the payment(s) actually made by you from time to time under the Contract prior to the delivery and acceptance by you of the Vessel
(together with interest calculated as described above). However, the available amount under this letter of guarantee (including, for clarity, under Clause 9) shall in no event exceed
the Limit together with interest calculated as described above for the period from the date of receipt by the Seller of the installment to the date of remittance by telegraphic transfer of
such refund by us.
 
7.
This letter of guarantee shall expire and terminate (a) upon the receipt by the Buyer of the full sum guaranteed hereunder from the Seller or ourselves under this letter of guarantee,
(b) upon delivery to us of a protocol of delivery and acceptance for the Vessel duly signed by the authorised representatives of the Seller and the Buyer, or (c) [25th March 2028],
whichever occurs earliest (the “Expiry”). This guarantee is valid until the occurrence of one of the three aforementioned events, except that, in the event that there exists an
arbitration (or appeal) between the Buyer and the Seller before expiration of this letter of guarantee, then the validity of this letter of guarantee shall be automatically further extended
until the date which is sixty (60) days after (1) the date of issue of the final arbitration award, or (2) in the event of appeal(s), the final court judgment is published, or (3) a settlement
agreement between the Seller and the Buyer in relation to the dispute becomes effective. For the avoidance of doubt, if a valid demand under this letter of guarantee is received by
us on or before Expiry, we shall remain obliged to make payment under this letter of guarantee after Expiry. Upon Expiry, except as provided in the preceding sentence, this letter of
guarantee shall become null and void.
Page 82 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
8.
In the event that we receive written notification from the Buyer or the Seller within thirty (30) days after the Buyer’s demand under Clause 1 has been received by us, advising of any
dispute between the Buyer and the Seller as to whether the Seller shall be liable to repay the installment(s) made by the Buyer and, consequently, whether the Buyer shall have the
right to demand payment from us and that such dispute has been referred to arbitration in accordance with Article XIII of the Contract, we shall be entitled to withhold and defer
payment to the Buyer under this guarantee until final award has been published under such arbitration, or in the event of appeal(s) the final court judgment has been published, or,
as the case may be, a settlement agreement between the Seller and the Buyer has been signed. Thereafter, we shall not be obligated to make any payment to the Buyer unless and
until required by Clause 9.
 
9.
If a sum is adjudged to be due to the Buyer by the Seller pursuant to the final arbitration award or the final court judgment or the settlement agreement, we shall refund to the Buyer
to the extent the final arbitration award or the final court judgment or the settlement agreement, thus orders but not exceeding the Limit plus the interest described above, upon
receipt of the Buyer’s further written demand for payment, provided that Buyer’s demand for payment is accompanied by a copy of the final arbitration award or the final court
judgment or the settlement agreement as the case may be, and the Buyer’s written statement that the Seller has failed to pay the amount demanded within 30 days after the date of
the final arbitration award, the final court judgment or the settlement agreement.
 
Page 83 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
10. We hereby agree that this letter of guarantee shall be construed as an independent, continuing and unconditional obligation and without regard to the validity or unenforceability of
any other agreement or instrument and, for clarity, without regard to defence, set-off or counterclaim or any other circumstance whatsoever which might constitute an equitable or
legal discharge of our obligation hereunder. No action or failure to act on the Buyer’s part shall relieve us of any our obligations hereunder.
 
11. For clarity, our obligations under this letter of guarantee shall not be discharged or impaired or otherwise prejudiced in any manner by any delay in the construction or delivery of
the Vessel howsoever caused or by the giving of any time or indulgence whatsoever granted to the Seller, or by any amendment or supplement or modification to the Contract
whether made with or without our knowledge (and we agree that any amendment or supplement or modification to the Contract does not require our prior consent) or by the
liquidation, insolvency (or any other equivalent procedure) or other financial failure of or dissolution of the Seller, or by any invalidity, irregularity or unenforceability, if any, of the
terms of the Contract, or by any other act, event or circumstance which could or might, but for this provision, operate to discharge, impair, diminish or otherwise prejudice our
obligations under this letter of guarantee. We further waive and disclaim all rights whatsoever to claim sovereign immunity for ourselves or our assets in respect of any claim or
proceedings brought against us under or in respect of this letter of guarantee.
12. This letter of guarantee shall continue to be effective or reinstated, as the case may be, if payment of any amount made or referred to hereunder or herein is rescinded or must
otherwise be returned by the Buyer upon the insolvency, bankruptcy or reorganization (or any such analogous event under the laws of any jurisdiction including without limitation
the People’s Republic of China) of the Seller or otherwise, all as though any such payment had not been made.
 
13. Any and all payments by us under this letter of guarantee shall be made without any set off or counter claim and without deduction or withholding for or on account of any present
or future taxes, duties or charges whatsoever unless we are compelled by law to deduct or withhold the same. In the latter event we shall make the minimum deduction or
withholding permitted and shall pay such additional amounts as may be necessary in order that the net amount received by you after such deductions or withholdings is equal to
the amount which would have been received by you had no such deduction or withholding been required to be made.
 
Page 84 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
14. All rights, title and interest in or under this letter of guarantee, shall be assignable to any party to whom the Buyer may assign rights under Article XIV of the Contract, by giving
written notice to us. If requested by the Buyer or the Buyer’s financier, we shall provide a written acknowledgement of such assignment.
 
15. This letter of guarantee shall be exclusively governed by and construed and interpreted in accordance with the laws of England.
 
16. Any dispute arising under or in connection with this letter of guarantee, including questions of validity and existence, shall be referred to arbitration in London before a tribunal of
three arbitrators, such arbitration shall be conducted in accordance with the Arbitration Act 1996 (or any statutory modification or reenactment thereof) and the London Maritime
Arbitrators Association (LMAA) Terms current at the time when the arbitration proceedings are commenced, in London, England. The seat of the arbitration shall be England, even
where any hearing takes place outside England. The language of the arbitration shall be English.
 
17. We hereby confirm that we are permitted by our head office and the laws of the People’s Republic of China and have full power and authority to issue this guarantee with this
wording and to perform our obligations hereunder and especially to designate English law as the applicable law to this Letter of Refund Guarantee and London, England as the place
of arbitration, and according to the LMAA Rules in force at the time of the proceedings.
 
18. With regards to rules, regulations and requirements of foreign exchange imposed by or pursuant to the laws and regulations of the People’s Republic of China, we hereby confirm
that we have obtained all necessary approvals and authorizations to issue this guarantee in foreign currency (US Dollars) and with this wording and that we are authorized to effect
payment hereunder in foreign currency (US dollars) and to transfer funds out of the People’s Republic of China in case of utilization.
 
Page 85 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
19. If it is not possible due to Sanctions or due to other legal restriction for us to make payment in United States Dollars, we undertake, provided we can lawfully do so, to make payment
in Euros (EUR) or Pounds sterling (GBP), converted at the rate obtained from Reuters on the banking day prior to the date of payment, to such account (designated in the correct
currency for receiving such payment) as the Buyer shall nominate, and the relevant payment shall be treated as having been properly made in accordance with this guarantee.
 
For the purposes of this provision, “Sanctions” shall mean economic, financial or trade sanctions or embargoes enacted or imposed by law or regulation or other restrictive measure
or policy and administered or enforced from time to time by (a) the United Nations Security Council, (b) the US government, (c) the European Union or any of its member states’
governments, (d) the United Kingdom, (e) the Republic of Singapore or (f) by any other generally recognized country which is not itself the subject of any official sanction or
prohibition on dealings imposed by any of the foregoing (whether through the Office of Foreign Assets Control of the U.S. Department of Treasury, the United States Department of
State, the United States Department of Commerce or His Majesty’s Treasury or otherwise).
 
very truly yours,
for and on behalf of
[●]
Page 86 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
Exhibit “B”: Irrevocable Letter of Corporate Guarantee
Date:
From: PERFORMANCE SHIPPING INC.
To: Jiangsu Yangzijiang Shipbuilding Group Co., Ltd.,
Jiangsu New Yangzi Shipbuilding Co., Ltd.
and Jiangsu Yangzi Xinfu Shipbuilding Co., Ltd.
(Collectively called as the “Seller”)
 
Dear sirs,
1.
In consideration of your entering into a shipbuilding contract (contract no.: 2024YZJ849GR) dated 30th April 2024 (the “Shipbuilding Contract”) with SAINT BARTH SHIPPING
COMPANY INC., a corporation organized and existing under the Laws of Republic of the Marshall Islands, having its registered address at Trust Company Complex, Ajeltake Road,
Ajeltake Island, Majuro Marshall Islands MH96960 as the Buyer (the “Buyer”) for the construction of one (1) 75,000 DWT Product Oil / Chemical Tanker known as the Seller’s hull
no.: YZJ2024-1624 (the “Vessel”), we, PERFORMANCE SHIPPING INC., a corporation organized and existing under the Laws of the Republic of the Marshall Islands, having its
registered address at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro Marshall Islands MH96960, hereby irrevocably, absolutely and unconditionally guarantee, as
the primary obligor and not merely as the surety, the due and punctual payment by the Buyer of each and all of the 1st, 2nd 3rd and 4th instalments of the contract price amounting
to a total sum of United States Dollars Twenty-Five Million Four Hundred and Thirty-Nine Thousand Eight Hundred and Fifty Only (USD 25,439,850.00) as specified in Paragraph 2
below.
2.
The instalments guaranteed hereunder, pursuant to the terms of the Shipbuilding Contract, comprise the 1st instalment in the amount of United States Dollars Eight Million Four
Hundred and Seventy-Nine Thousand Nine Hundred and Fifty Only (USD 8,479,950.00), the 2nd instalment in the amount of United States Dollars Five Million Six Hundred and
Fifty-Three Thousand and Three Hundred Only (USD 5,653,300.00), the 3rd instalment in the amount of United States Dollars Five Million Six Hundred and Fifty-Three Thousand
and Three Hundred Only (USD 5,653,300.00) and 4th instalment in the amount of United States Dollars Five Million Six Hundred and Fifty-Three Thousand and Three Hundred Only
(USD 5,653,300.00).
 
Page 87 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
3.
We also irrevocably, absolutely and unconditionally guarantee, as primary obligor and not merely as surety, the due and punctual payment by the Buyer of interest on each
instalment guaranteed hereunder at the rate of five percent (5%) per annum from and including the first day after the due date of payment of the 1st, 2nd, 3rd and 4th instalments
until the date of full payment by us of such amount guaranteed hereunder, and on the terms and conditions provided herein.
 
4.
In the event that the Buyer fails to punctually pay any instalment guaranteed hereunder or the Buyer fails to pay any interest thereon, and any such default continues for a period of
fifteen (15) days, then, upon receipt by us of your first written demand, we shall within five (5) New York Banking Days pay to you or your assignee the amount which the Buyer has
failed to pay, together with the interest as specified in paragraph 3 hereof, without requesting you to take any or further action, procedure or step against the Buyer or with respect
to any other security which you may hold.
5.
Subject to Clause 11, but notwithstanding any other provision of this guarantee, our obligation to pay any amount under this guarantee is coextensive with, and does not exceed,
that of the Buyer to pay the same amounts under the Shipbuilding Contract, and we are entitled to take any defence or objection to liability or obligation to pay which is available to
the Buyer.
 
6.
We hereby agree that at your option this guarantee and the undertaking hereunder shall be assignable to and if so assigned shall inure to the benefit of any third party designated
by you or your financing bank/institution as your assignee as if any such third party or your financing bank/institution were originally named herein. It is not otherwise assignable.
Page 88 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
7.
Any payment by us under this guarantee shall be made in United States Dollars by telegraphic transfer to a receiving bank nominated by you for credit to your nominated account,
in favour of you or your assignee.
 
8.
Our obligations under this guarantee shall not be affected or prejudiced by any dispute between you as the Seller and the Buyer under the shipbuilding contract or by the Seller’s
delay in the construction and/or delivery of the vessel, due to whatever causes or by any variation or extension of their terms thereof or by any security or other indemnity now or
hereafter held by you in respect thereof, or by any time or indulgence granted by you or any other person in connection therewith, or by any invalidity or unenforceability of the
terms thereof, or by any act, omission, fact or circumstances whatsoever, which could or might, but for the foregoing, diminish in any way our obligations under this guarantee.
 
9.
All claims, demands, statements and notices in connection with this letter of guarantee shall be in writing signed by one of your officers and may be served on us by any of the
following means:
 
(a) by hand or by courier or registered mail to address: 373 Syngrou Avenue, 175 64, P. Faliro, Athens, Greece (or such other address as we may notify to you in writing) with
attention: Aikaterini Oikonomea; or
 
(b) by fax (fax no:; attention: Aikaterini Oikonomea);
or
 
(c) by email  (email address:
; attention: Aikaterini Oikonomea). In case we do not give the telefax or email acknowledgement to you within three (3) days, it shall be deemed that such claims, demands,
statements or notices has been duly received by us.
10. This letter of guarantee shall come into full force and effect upon delivery to you of this guarantee and shall continue in force and effect until the vessel is delivered to and accepted
by the Buyer and the Buyer shall have performed all its obligations for taking delivery thereof, or until the full payment of all 1st, 2nd, 3rd and 4th instalments of the contract price
together with the aforesaid interest by the Buyer or us, whichever first occurs.
Page 89 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
11. The maximum amount, however, that we are obliged to pay to you under this guarantee shall not exceed the aggregate amount of all the 1st, 2nd, 3rd and 4th instalments guaranteed
hereunder in the total amount of United States Dollars Twenty-Five Million Four Hundred and Thirty-Nine Thousand Eight Hundred and Fifty Only (USD 25,439,850.00) plus interest
as stated above in paragraph 3.
 
12. All payments by us under this guarantee shall be made without any set- off or counterclaim and without deduction or withholding for or on account of any taxes, duties, or charges
whatsoever unless we are compelled by law to deduct or withhold the same.
 
In the latter event we shall make the minimum deduction or withholding permitted and will pay such additional amounts as may be necessary in order that the net amount received
by you after such deductions or withholdings shall equal the amount which would have been received had no such deduction or withholding been required to be made.
 
13. This letter of guarantee shall be construed in accordance with and governed by the laws of England.
 
All disputes, controversies or differences which may arise between the parties as to any matter arising out of or relating to this letter of guarantee or any stipulation herein or with
respect thereto which cannot be settled by the parties themselves shall be finally settled by arbitration in London, in accordance with English law, and the LMAA Rules in force at
the time of the proceedings.
 
Either party may demand arbitration of any such disputes by giving written notice to the other party. Any demand for arbitration by either party hereto shall state the name of the
arbitrator appointed by such party and shall also state specifically the question or questions as to which such party is demanding arbitration. Within twenty (20) days after receipt
of notice of such demand for arbitration, the other party shall in turn appoint a second arbitrator. The two arbitrators thus appointed shall thereupon select a third arbitrator, and the
three arbitrators so named shall constitute the board of arbitration (hereinafter called the “Arbitration Board”) for the settlement of such dispute.
Page 90 of 91

SHIPBUILDING CONTRACT
HULL NO.: YZJ2024-1624
In the event however, that said other party should fail to appoint a second arbitrator as aforesaid within twenty (20) days following receipt of notice of demand of arbitration, it is
agreed that such party shall thereby be deemed to have accepted and appointed as its own arbitrator the one already appointed by the party demanding arbitration, and the
arbitration shall proceed forthwith before this sole arbitrator, who alone, in such event, shall constitute the Arbitration Board. And in the further event that the two arbitrators
appointed respectively by the parties hereto as aforesaid should be unable to reach agreement on the appointment of the third arbitrator within twenty (20) days from the date on
which the second arbitrator is appointed, either party of the said two arbitrators may apply to the President of the London Maritime Arbitrators Association to appoint the third
arbitrator. The award of the arbitration, made by the sole arbitrator or by the majority of the three arbitrators as the case may be, shall be final, conclusive and binding upon the
parties hereto.
 
14. This letter of guarantee shall have expired as aforesaid, you will return the same to us without any request or demand from us.
 
15. In witness whereof, we have caused this letter of guarantee to be executed and delivered by our duly authorized representative the day and year above written.
very truly yours
PERFORMANCE SHIPPING INC.
by:
name:
title:
 
Page 91 of 91

Exhibit 4.25A
BARECON 2017
STANDARD BAREBOAT CHARTER PARTY   PART I
 1.    Place and date
16 July 2024
 2.    Owners (Cl. 1)
(i) Name:
Kenzan Kaiun Co., Limited (99%) and Azalea Line, S.A. (1%) both guaranteed by Yano
Kaiun Co., Ltd.
(ii) Place of registered office:
1276-1, Ko, Go, Namikata-cho, lmabari City, Ehime Pref, Japan (Kenzan Kaiun Co.,
Limited) and Paseo del Mar and Pacific Avenues, costa del Este, MMG Tower, 23rd
floor, Panama City, Republic of Panama (Azalea Line, S.A.)
(iii) Law of registry:
Japan (Kenzan Kaiun Co., Limited) and Panama
(Azalea Line, S.A.)
  3.     Charterers (Cl. 1)
(i)     Name: Nakaza Shipping Company Inc.
guaranteed by Performance Shipping Inc.
 
(ii)   Place of registered office:
Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, The Marshall
Islands MH 96960
 
(iii)   Law of registry:
The Republic of the Marshall Islands
 
  
   
 
 4.    Vessel (Cl. 1 and 3)
(i) Name: HULL H1515 tbn “P. MASSPORT”
(ii) IMO Number: 9997476
(iii) Flag State: Marshall Islands or Liberia
(iv)  Type: LR2 Tanker
  (v) GT/NT:
(vi)  Summer DWT:
(vii) When/where built: Shanghai Waigaoqiao
Shipbuilding
(viii)  Classification Society: IACS classification society in Charterer’s option
 
 5.    Date of last special survey by the Vessel’s Classification Society
N/A
  6.    Validity of class certificate (state number of months to apply)
(i)    Delivery (Cl. 3): N/A
(ii)   Redelivery (Cl. 10): minimum 3 months
 
 7.    Latent Defects (state number of months to apply) (Cl. 1,3)
N/A
  8.    Port or place of delivery (Cl. 3)
As per MOA Clause 5
 
 9.    Delivery notices (Cl. 4)
N/A
  10.  Time for delivery (Cl. 4)
As per MOA Clause 5
 
 11.  Cancelling date (Cl. 4,5)
30 April 2026
  12.  Port or place of redelivery (Cl.10)
Worldwide range, safely afloat at an accessible safe berth or anchorage at a safe
port or place (excluding war risk areas in accordance with the terms of the
Vessel’s insurances), in Charterers’ option.  
 
 13.  Redelivery notices (Cl. 10)
Thirty (30) and twenty (20), fifteen (15), seven (7), and three running days’
approximate notices and two (2) running days’ definite notice
  14.  Trading limits (Cl. 11)
World Wide trading within institute Warranty Limits (IWL), provided that,
Charterers shall be permitted to trade outside of IWL if they pay any applicable
premium and/or expenses. North Korea, Russia and any other states or regions
sanctioned by UN, USA, EU, UK or Japan shall be excluded. If Charterers call at a
 
Copyright © 2017 Norwegian Shipbrokers’ Association. All rights reserved.

STANDARD BAREBOAT CHARTER PARTY   PART I
  
  
state which results in a breach of sanctions applicable to the Charterers and/or the
Vessel then Charterers to undertake to indemnify Owners in accordance with
Clause 22 and Clause 51.
 
  
   
 
 15. Bunker fuels, unused oils and greases (optional, state if (a) (actual net price), or (b)
(current net market price) to apply) (CI. 9)
N/A
  16.   Charter period (Cl. 2)
8 years from Delivery
 
 17.  Charter hire (state currency and amount) (Cl. 2,10 and 15)
(i)   Charter hire:
A: Fixed part: USD 7,132 per day; plus
B: Floating part: (1M CME SOFR +2.425% Margin) x No of days/360 x Loan
Outstanding
Margin as per line 27
Loan Outstanding as per Clause 49
 
(ii)  Charter hire for optional period: N/A
  18.     Optional period and notice (Cl. 2)
(i)   State extension period in months: N/A
(ii)   State when declarable: N/A
 
 19. Rate of interest payable (Cl. 15(g))
1 Month CME TERM SOFR plus 2.425 percentage points per annum
  20. Owners’ bank details (state beneficiary and bank account) (Cl. 15)
The Nishi-Nippon City Bank Ltd.
 
Branch Code:
SWIFT Code:
USD Account No :
Account Name:
Beneficiary:
 
 21.  New class and other regulatory requirements (Cl. 13(b))
(i)  State if 13(b)(i) or (ii) to apply: Clause 13(b)(I) to apply
(ii)  Threshold amount (AMT): N/A
(iii)  Vessel’s expected remaining life in years on the Delivery Date: N/A
 22. Mortgage(s), if any (state if 16(a) or (b) to apply; if 16(b) applies state date of Financial Instrument and name of Mortgagee(s)/Place of business) (CI. 1, 16)
First priority ship mortgage in favor of the Nishi-Nippon City Bank Ltd. Japan
 
 23.  Insured Total Loss value (Cl. 17)
See Clause 47
  24.  Insuring party (state if Cl. 17(b) (Charterers to insure) or Cl. 17(c) (Owners to insure)
to apply)
Clause 17(b)
And See Clause 47
 
 25. Performance guarantee (state amount and entity) (Cl. 27) (optional)
See Clause 43
 
 26.  Dispute Resolution (state 33(a), 33(b), 33(c) or 33(d); if 33(c) is agreed, state Singapore or English law; if 33(d) is agreed, state governing law and place of arbitration) (Cl. 33)
(a) English law, London arbitration
 
Copyright © 2017 Norwegian Shipbrokers’ Association. All rights reserved.

STANDARD BAREBOAT CHARTER PARTY   PART I
 27.   Newbuilding Vessel (indicate with “yes” or “no” whether PART III applies and if “yes”, complete details below) (optional)
No
(i)    Name of Builders:
(ii)   Hull number:
(iii)  Date of newbuilding contract:
(iv)  Liquidated damages for physical defects or deficiencies (state party):
(v)  Liquidated damages for delay in delivery (state party):
 
  
   
 
 28. Purchase Option (indicate with “yes” or “no” whether PART IV applies) (optional)
 
No, see however Clause 45
  29.  Bareboat Charter Registry (indicate with “yes” or ‘‘no” whether PART V applies and
if “yes”, complete details below) (optional) No
(i)   Underlying Registry: N/A
(ii)  Bareboat Charter Registry: N/A
 
 30. Notice to Owners (state full style details for serving notices) (Cl. 34)
Kenzan Kaiun Co., Limited
1276-1, Ko, Go, Namikata-cho, lmabari City,
Ehime pref, Japan
Email:
Attention: Yutaka Yano
 
Azalea Line, S.A.
Paseo del Mar and Pacific Avenues,costa del
Este, MMG Tower ,23rd floor, Panama
City,Republic of Panama
Email: 
Attention: Yutaka Yano
  31. Notice to Charterers (state full style details for serving notices) (Cl. 34)
Nakaza Shipping Company Inc.
c/o Unitized Ocean Transport Limited
373 Syngrou Ave. & 2-4 Ymittou str.,
17564, Palaio Faliro, Athens,
Greece
Email:          
Attention:    Mr. Andreas Nikolaos
Michalopoulos
 
 
   
 
 
It is mutually agreed that this Charter Party shall be performed subject to the conditions contained in this Charter Party which shall include PART I, and PART II and Rider Clauses 39-
55. In the event of a conflict of conditions, the provisions of PART I shall prevail over those of PART II and Rider Clauses 39-55 to the extent of such conflict but no further. It is further
mutually agreed that PART III and/or PART IV and/or PART V shall only apply and only form part of this Charter Party if expressly agreed and stated in BOX 27, 28 and 29. If PART III
and/or PART IV and/or PART V applies, it is further agreed that in the event of a conflict of conditions, the provisions of PART I and PART II shall prevail over those of PART III and/or
PART IV and/or PART V to the extent of such conflict but nor further.
 Kenzan Kaiun Co., Limited
Signature (Owners)
  Nakaza Shipping Company Inc.
Signature (Charterers)
 
  
   
 
 /s/ Yutaka Yano
  /s/ Andreas Nikolaos Michalopoulos
 
 Name: Yutaka Yano
  Name: Andreas Nikolaos Michalopoulos
 
 Title: Director
  Title: Director
 
Copyright © 2017 Norwegian Shipbrokers’ Association. All rights reserved.

STANDARD BAREBOAT CHARTER PARTY   PART I
 Azalea Line, S.A.
   
 
 Signature (Owners)
   
 
  
   
 
 /s/ Yutaka Yano
   
 
 Name: Yutaka Yano
   
 
 Title: Director/President
   
 
 Yano Kaiun Co., Ltd.
  Performance Shipping  Inc.
 
 Signature (Guarantor)
  Signature (Guarantor)
 
  
   
 
 /s/ Yutaka Yano
  /s/ Andreas Nikolaos Michalopoulos
 Name: Yutaka Yano
  Name: Andreas Nikolaos Michalopoulos
 
 Title: Director/Representative Director
  Title: Director/Chief Executive Officer
 
  
   
 
Copyright © 2017 Norwegian Shipbrokers’ Association. All rights reserved.

PART II
BARECON 2017 STANDARD BAREBOAT CHARTER PARTY
0
1.
Definitions
1
 
 
2
 
In this Charter Party:
3
 
 
4
 
“Banking Day” means a day on which banks are open in the places stated in Boxes 30 and 31, New York,
5
 
Tokyo, London, Athens, Shanghai and, for payments in US dollars, in New York. 
6
 
 
7
 
“Builder” means Shanghai Waigaoqiao Shipbuilding Company Limited, a corporation organized and existing
8
 
under the laws of the People’s Republic of China, having its registered office at 3001 Zhouhai Road, Pudong
9
 
New District, Shanghai 200137, the People’s Republic of China
10
 
 
11
 
“Building Contract” means the ship building contract dated 7 March 2023 (as amended by Addendum no.1
12
 
dated 7 March 2023) made between the Construction Seller and the Sellers as buyer.
13
 
 
14
 
“Charterers” means the party identified in Box 3.
15
 
 
16
 
“Charterers’ Event of Default” has the meaning given to it in Clause 31(a) and a Charterers’ Event of Default
17
 
is “continuing” if such Charterers’ Event of Default has not been remedied by the Charterers or waived by the
18
 
Owners.
19
 
 
20
 
‘‘Compulsory Acquisition” has the meaning given to it in Clause 30(b).
21
 
 
22
 
“Construction Seller” means together (i) the Builder and (ii) China Shipbuilding Trading Company Limited, a
23
 
company incorporated and existing under the laws of the People’s Republic of China, having its registered
24
 
office at 56(Yi), Zhongguancun Nan Da Jie, Beijing 100044, the People’s Republic of China.
25
 
 
26
 
“Crew” means the Master, officers and ratings and any other personnel employed on board the Vessel.
27
 
 
28
 
“Delivery Date” means the date of delivery of the Vessel by the Owners to the Charterers under this Charter
29
 
Party.
30
 
 
31
 
“Financial Instrument’’ means the mortgage, deed of covenant or other such financial security instrument as
32
 
identified in Box 22.
33
 
 
34
 
“Fixed Hire” means the fixed part of the Charter Hire identified in Box 17(i)(A).
35
 
 
36
 
“Flag State” means the flag state in Box 4 or such other flag state to which the Charterers may have re-
37
 
registered the Vessel with the Owners’ consent during the Charter Period.
38
 
 
39
 
“Guarantees” has the meaning ascribed to it in Clause 43
40
 
 
41
 
“Latent Defect” means a defect which could not be discovered on such an examination as a reasonably
42
 
careful skilled person would make.
43
 
44
 
“Margin” means 2.425% per annum.
45
 
 
46
 
“MOA” means the Memorandum of Agreement entered into between the Owners (as buyers) and the
47
 
Charterers (as sellers) dated 16 July 2024.
48
 
 
49
 
“Mortgagee” means The Nishi-Nippon City Bank Ltd.
50
 
 
51
 
“Outstanding Principal” means at any relevant time the aggregate of the amount of $44,250,000 less the
52
 
aggregate Fixed Hire which has at any relevant time been received by the Owners in accordance with this
53
 
Charter Party.
Copyright © 2017 Norwegian Shipbrokers’ Association. All rights reserved.

PART II
BARECON 2017 STANDARD BAREBOAT CHARTER PARTY
54
 
55
 
“Owners” means the party identified in Box 2.
56
 
57
 
“Parties” means the Owners and the Charterers.
58
 
59
 
“Permitted Liens” means:
60
 
61
 
(i)      any liens for unpaid master’s and crew’s wages in accordance with first class ship ownership and 
62
management practice and not being enforced through arrest; or
63
 
64
 
(ii)     general average and salvage not being enforced through arrest; or
65
 
66
 
(iii)    liens in favour of suppliers, necessaries and other similar liens arising by operation of law or in the
67
 
ordinary course of trading, operation, repair or maintenance of the Vessel, such liens not being enforced
68
 
through arrest and not as a result of failure of payment by the Charterers, their agents or any sub-
69
 
charterers of the Vessel; or
70
 
71
 
(iv)    any security interest created by any security documents granted by the Charterers in relation to the 
72
 
Vessel; or
73
 
74
 
(v)  any liens created by or on the instructions or with the prior consent of the Owners.
75
 
76
 
“Purchase Option” has the meaning ascribed to it in Clause 45
77
 
78
 
“Owners’ Put Option” has the meaning ascribed to it in Clause 46.
79
 
80
 
“QEL” has the meaning ascribed to it in Clause 43
81
 
82
 
“Total Loss” means an actual, constructive, compromised, agreed or arranged total loss of the Vessel under
83
 
the insurances.
84
 
85
 
“Variable Hire” means the floating part of the Charter Hire identified in Box 17(i)(B).
86
 
87
 
“Vessel” means the vessel described in Box 4 including its equipment, machinery, boilers, fixtures and fittings.
88
 
89
2.
Charter Period
90
 
91
 
The Owners have agreed to let and the Charterers have agreed to hire the Vessel for the period stated in  
92
 
Box 16 (“Charter Period”). The Charter Period shall commence simultaneously with delivery of the Vessel by
93
 
the Charterers as sellers to the Owners as buyers under the MOA and subject to the terms and conditions of
94
 
this Charter Party shall end on the date falling eight (8) years from the Delivery Date.
95
 
96
 
The Charterers shall have the option to extend the Charter Period by the period stated it Box 18(i), at the rate
97
 
stated in-Box 17(ii), which option shall be exercised by written notice to the Owners latest as stated in Box
98
 
18(ii).
99
 
100
 
Subject to the terms and conditions herein provided, during the Charter Period the Vessel shall be in the full
101
 
possession and at the absolute disposal for all purposes of the Charterers and under their complete control
102
 
in every respect.
103
104
3.
Delivery See Clause 39, 40 and 41
105
 
106
 
107
 
(not-applicable when-Part III-applies, as stated in Box 27).
Copyright © 2017 Norwegian Shipbrokers’ Association. All rights reserved.

PART II
BARECON 2017 STANDARD BAREBOAT CHARTER PARTY
108
 
 
109
(a)   The Owners shall deliver the Vessel in a seaworthy cοndition and in every respect ready for service under
110
 
this Charter Party and in accordance with the particulars stated in Boxes 4 to 6.
111
 
 
112
 
If the Charterers have inspected the Vessel prior to delivery, the Vessel shall be delivered by the Owners in
113
 
the same condition as at the time of inspection, fair wear and tear excepted.
114
 
 
115
 
The Vessel shall be delivered by the Owners and taken over by the Charterers at the port or place stated in
116
 
Box 8 at such readily accessible safe berth or mooring as the Charterers may direct.
117
 
 
118
(b)   The Vessel shall be properly documented on delivery in accordance with the laws and regulations of the Flag
119
State and the requirements of the classification Society stated in Box 4. TheVessel upon delivery shall have
120
her survey cycles up to date and class certificates valid and unextended for at least the number of months
121
stated in Box 6(i) free of any conditions recommendations. If Box 6(i) is not filled in, then six (6) months
122
shall apply.
123
 
 
124
(c)
Without prejudice to the Charterer’s rights with respect to any breach by the Owners of (i) this Charter Party
125
 
or (ii) any laws and/or sanctions, the delivery of the Vessel by the Owners and the taking over of the Vessel
126
 
by the Charterers shall constitute a full performance by the Owners of all the Owners’ obligations under this
127
 
Clause, and thereafter the Charterers shall not be entitled to make or assert any claim against the Owners on
128
 
account of any conditions, representations or warranties expressed or implied with respect to the Vessel but
129
 
the Owners shall be liable for the cost of but not the time for repairs or renewals arising out of Latent Defects
130
 
in the Vessel existing at the time of delivery under this Charter Party, provided such Latent Defects manifest
131
 
themselves within the number of months after delivery stated in Box 7. If Box 7 is not filled in, then twelve (12)
132
 
months shall apply.
133
 
 
134
4.
Time for Delivery See Clause 39
135
 
 
136
 
(not applicable when Part III applies, as stated in Box 27)
137
 
 
138
 
The Vessel shall not be delivered before the date stated in Box 10 without the Charterers’ consent and the
139
 
Owners shall exercise due diligence to deliver the Vessel not later than the date stated in Box 11.
140
 
 
141
 
The Owners shall keep the Charterers informed of the Vessel’s itinerary for voyage leading up to delivery
142
 
and shall serve the Charterers with the number of days approximate/definite notices of the Vessel’s delivery
143
 
stated in Box 9. Following the tender of any such notices the Owners shall give or allow to be given to the
144
 
Vessel only such further employment orders as are reasonably expected when given to allow delivery to
145
 
occur by the date notified.
146
 
 
147
5.
Cancelling See Clause 39
148
 
 
149
 
(not applicable when Part III applies, as stated in Box 27)
150
 
 
151
(a)   Should the Vessel not be delivered by the cancelling date stated in Box 11, the Charterers shall have the
152
 
option of cancelling this Charter Ρarty.
153
 
 
154
(b)   If it appears that the Vessel will be delayed beyond the cancelling date; the Owners may, as soon as they are
155
in a position to state with reasonable certainty the day on which the Vessel should be ready, give notice thereof
156
to the Charterers asking whether they will exercise their option of cancelling, and the option must then be
157
declared within three (3) Banking Days of the receipt by the Charterers of such notice. If the Charterers do
158
not then exercise their option of cancelling the readiness date stated in the Owners’ notice shall be substituted
159
for the cancelling date stated in Box 11 for the purpose of this Clause 5 (Cancelling)
160
161
(c)   Cancellation under this Clause 5 (Cancelling) shall be without prejudice to any claim the Charterers may
Copyright © 2017 Norwegian Shipbrokers’ Association. All rights reserved.

PART II
BARECON 2017 STANDARD BAREBOAT CHARTER PARTY
162
otherwise have-against the Owners under this Charter Party-
163
164
6.
Familiarisation
165
166
(a)   The Charterers shall have the right to place a maximum of two-(2) representatives board the Vessel at
167
their sole risk and expense for a reasonable period prior to the delivery of the Vessel.
168
169
The Charterers and the Charterers’ representatives shall sign the Oweners’ usual letter of indemnity prior to
170
embarkation:
171
172
(b)
The Owners shall have the right to place a maximum of two (2) representatives on board the Vessel at their
173
sole risk and expense for a reasonable period at a convenient port for a maximum of (60) days prior to
174
expected date of redelivery of the Vessel subject to not causing any disruption to the Vessel’s itinerary or
175
operations.
176
177
 
The Owners and the Owners’ representatives shall sign the Charterers’ usual letter of indemnity prior to
178
 
embarkation.
179
 
180
(c)
Such representatives shall be onboard for the purpose of familiarisation and in the capacity of observers only,
181
 
and they shall not interfere in any respect with the operation of the Vessel and follow the Master’s instructions.
182
 
The Owners representatives while onboard shall be allowed use of the Vessel’s communication systems while
183
 
on board but such use shall never interfere with the Vessel’s operation. Charterer shall cooperate with Owners
184
 
representatives reasonable comments, requests and questions which they may have for familiarisation
185
 
purpose. Costs for communication to be settled by Owners upon redelivery. This clause shall not apply if the
186
 
Charterers exercise their Purchase Option as set out in Clause 45 or the Owners exercise their Put Option as 
187
 
set out in Clause 46.
188
 
 
189
7. 
Surveys on Delivery and Redelivery See Clause 42
190
 
 
191
(a)   The Owners and Charterers shall each appoint and pay for their respective surveyors for the purpose of
192
determining and agreeing in writing the condition of the Vessel at the time of delivery and redelivery hereunder,
193
The Owners shall bear all the Vessel’s expenses related to the on-hire survey including loss of time, if any.
194
The Charterers shall bear all the-Vessel’s expenses related to the off-hire survey including loss of time, if any.
195
 
 
196
(b)   Divers inspection on delivery/redeliνery
197
 
 
198
 
The Charterers shall have the option at delivery and the Owners shall have the option at redelivery, at their
199
 
respective time, cost and expenses, tο arrange fοr an underwater inspection by a diver approved by the
200
 
Classification Society, in the presence of a Classification Sociely surveyor, to determine the condition of the
201
 
rudder, propeller, bottom and other underwater parts of the Vessel. Not earlier than 45 days or later than 30
202
 
days or if not possible then as soon as the Vessel becomes available before re-delivery of the Vessel, the
203
 
Owners and the Charterers shall jointly agree upon the appointment of a surveyor for the purpose of
204
 
determining the condition of the Vessel at the time of re-delivery hereunder. The surveyor, whose decision
205
 
shall be final and binding on both parties, shall report in writing, specifying all items, if any, which have not
206
 
been properly maintained in accordance with the terms and conditions of the Charter and the work required
207
 
to correct such deficiencies. The costs of such a surveyor shall be equally shared between the parties. In the
208
 
event that the parties are not able to agree upon a single surveyor, each shall appoint their own and the two
209
 
surveyors so appointed shall conduct a joint survey of the Vessel. In such an event each party shall pay their
210
 
own appointed surveyor’s costs. The survey shall be carried out at the point of re-delivery and in Charterers
211
 
time. Any works required as a result of such survey shall be carried out by Charterers prior to their re-delivery
212
 
of the Vessel. Charterers shall have the option to pay a compensation based on the surveyors’ assessment
213
 
to the Owners for any works required instead of performing the required works before redelivery (unless the
214
 
required works are class affecting). In the event that two surveyors so appointed disagree, the matter shall
215
 
be referred to arbitration in accordance with Clause 33. This clause shall not apply if the Charterers exercise
Copyright © 2017 Norwegian Shipbrokers’ Association. All rights reserved.

PART II
BARECON 2017 STANDARD BAREBOAT CHARTER PARTY
216
their Purchase Option as set out in Clause 45 or the Owners exercise their Put Option as set out in Clause
217
46.
218
219
8.    Ιnventοries
220
221
A complete inventory of the Vessel’s equipment, οutfit, spare parts and consumable stores on board the
222
Vessel shall be made by the parties οn delivery and redelivery οf the Vessel.
223
224
9.
Bunker fuels, oils and greases
225
226
On redelivery, Owners to pay for all bunkers, fuels and unused lubrication and hydraulic oils and greases in  
227
storage tanks and unopened drums in accordance with, either:
228
229
(a)    Charterers’ last invoice price paid (not to be older than 6 months); or otherwise.
230
231
(b)    if such invoices are not available on account of the Vessel being employed on sub time charter, the sub- 
232
time charter prices; or otherwise
233
234
(c)    the current market price prevailing at the port of redelivery (or, if unavailable, at the nearest bunkering 
235
port).
236
237
The Charterers and the Owners, respectively, shall at the time οf delivery and redelivery take over and pay
238
for all bunker fuels and unused lubricating and hydraulic oils and greases in storage tanks and unopened
239
drums at:
240
241
(a)*  The actual price paid (excluding barging expenses) as evidenced by invoices or vouchers.
242
243
(b)*  The current market price (exduding barging expenses) at the port and date of delivery/redelivery of the Vessel
244
or, if unavailable, at the nearest bunkring port.
245
246
*Subclauses(a)and(b)are alternatives; state alternative agreed in Box 15. If Box 15 is not filled in then
247
subclause(a)shall apply.
248
249
10.
Redelivery
250
251
At the expiration of the Charter Period the Vessel shall be redelivered by the Charterers and taken over by
252
the Owners at the port or place stated in Box 12 at such readily accessible safe berth or mooring as the
253
Οwners Charterers may direct (acting reasonably).
254
255
The Charterers shall keep the Owners informed of the Vessel’s itinerary for the voyage leading up to 
256
redelivery and shall serve the Owners with the number of days approximate/definite notices or the Vessel’s 
257
redelivery stated in Box 13.
258
259
The Charterers warrant that they will not permit the Vessel to commence a voyage (including any preceding
260
ballast voyage) which cannot reasonably be expected to be completed in time to allow redelivery of the
261
Vessel within the Charter Period and in accordance with the notices given. Notwithstanding the above, should
262
the Charterers fail to redeliver the Vessel within the Charter Period, the Charterers shall pay the daily
263
equivalent to the rate of hire stated in Box 17(i) applicable at the time plus ten (10) per cent or the market
264
rate, whichever is the higher, for the number of days by which the Charter Period is exceeded. Such payment
265
of enhanced hire rate shall be without prejudice to any claims the Owners may have against the Charterers
266
in this respect.
267
All other terms, conditions and provisions of this Charter Party shall continue to apply.
268
269
Subject to the provisions of Clause 13 (Maintenance and Operation), the Vessel shall be redelivered to the
Copyright © 2017 Norwegian Shipbrokers’ Association. All rights reserved.

PART II
BARECON 2017 STANDARD BAREBOAT CHARTER PARTY
270
Owners in the same condition and class as that in which it was delivered, fair wear and tear not affecting
271
class excepted.
272
273
The Vessel upon redelivery shall have her survey cycles up to date and class certificates valid and
274
unextended for at least the number of months agreed in Box 6(ii) free of any conditions or recommendations
275
by the Classification Society or the relevant authorities at the time of redelivery. If Box 6(1) is not filled in,
276
then six (6) months shall apply.
277
278
All plans, drawings and manuals (excluding ISM/ISPS manuals) and maintenance records shall remain on
279
board and accessible to the Owners upon redelivery. Any other technical documentation regarding the Vessel
280
which may be in the Charterers’ possession shall promptly after redelivery be forwarded to the Owners at
281
their expense, if they so request. The Charterers may keep the Vessel’s log books but the Owners shall have
282
the right to make copies of the same.
283
284
This clause shall not apply if the Charterers exercise their Purchase Option in Clause 45 of this Charter Party
285
or the Owners exercise their Put Option in Clause 46 in which event a Protocol of Delivery and Acceptance 
286
will be signed.
287
288
11.
Trading Restrictions
289
290
The Vessel shall be employed in lawful trades for the carriage of lawful merchandise within the trading limits
292
stated in Box 14.
293
294
The Charterers undertake not to employ the Vessel or allow the Vessel to be employed otherwise than in
295
conformity with the terms of the contracts of insurance (including any warranties expressed or implied therein)
295
without first obtaining the consent of the insurers to such employment and complying with such requirements
296
as to additional premium or otherwise as the insurers may require. In case insurers’ consent is required,
297
Charterers will notify the Owners in writing, which notification may be by way of copying in the Owners in the
298
Charterers’ relevant notice to the insurers prior to the intended entry into such area, and, upon reasonable
299
request by the Owners, furnishing the Owners with the proof of extension of the insurance coverages
300
practically obtainable within a reasonable period from such request.
301
302
303
The Charterers will not do or permit to be done anything which might cause any breach or infringement of 
304
the laws and regulations of the Flag State, or of the places where the Vessel trades.
305
306
Notwithstanding any other provisions contained in this Charter Party it is agreed that nuclear fuels or
307
radioactive products or waste are specifically excluded from the cargo permitted to be loaded or carried under
308
this Charter Party. This exclusion does not apply to radio-isotopes used or intended to be used for any
309
Industrial, commercial, agricultural, medical or scientific purposes provided the Owners’ prior approval has
310
been obtained to loading thereof.
311
312
12.
Contracts of Carriage
313
314
(a)
The Charterers areshall use reasonable commercial efforts to procure that all documents issued during
315
the Charter Period evidencing the terms and conditions agreed in respect of carriage of goods shall contain
316
a paramount clause which shall incorporate the Hague or Hague-Visby Rules unless any other legislation
317
relating to carrier’s liability for cargo is compulsorily applicable in the trade. The documents shall also
318
contain the New Jason Clause and the Both-to-Blame Collision Clause.
319
320
(b)   The-Charterers are to procure that all passenger tickets issued during the Charter Period for the carriage
321
of passengers and their luggage under this Charter Party shall contain a paramount clause which shall
322
incorporate the Athens Convention Relating to the Carriage of Passengers and their Luggage by sea, 1974,
323
and any protocol thereto, unless any other legislation relating to carrier’s liability for passengers and their
Copyright © 2017 Norwegian Shipbrokers’ Association. All rights reserved.

PART II
BARECON 2017 STANDARD BAREBOAT CHARTER PARTY
324
luggage is cοmpulsorily applicable in the trade.
325
326
13.
Maintenance and Operation
327
328
(a)
Maintenance
329
330
During the Charter Period the Vessel shall be in the full possession and at the absolute disposal for all
331
purposes of the Charterers and under their complete control in every respect, unless Charter’s Default
332
occurred. The Charterers shall properly maintain the Vessel in a good state of repair, in efficient operating
333
condition and in accordance with good commercial maintenance practice and, at their own expense, maintain
334
the Vessel’s Class with the Classification Society stated in Box 4 and all necessary certificates. The Charterers
335
shall have the option to change the Vessel’s Classification Society to any I ACS classification society but time
336
and cost to be for Charterers’ account.
337
338
(b)
New Class and Other Regulatory Requirements
339
340
(i)*In the event of any structural changes or new equipment becoming necessary for the continued
341
operation of the Vessel by reason of new class requirements or by compulsory legislation (“Required
342
Modification”), all such costs shall be for the Charterers’ account.
343
In the event of any improvement deemed necessary by the Charterers in connection with the operation
344
of the Vessel, or structural changes or new equipment being necessary for the continued operation of
345
the Vessel by reason of new class requirements or by compulsory legislation, the cost of compliance
346
shall be for the Charterers’ account. Notwithstanding the foregoing, Charterers are allowed to make
347
improvements to the Vessel provided cost of the same to be for Charterers account.
348
349
(ii)* In the event of any structural changes or new equipment becoming necessary for the continued
350
operation of the Vessel by reason οf a Required Modification, the costs shall be apportioned as follows:
351
352
(1)    if the costs of the Required Modification are less than the amount stated in Box 21(ii), such
353
         costs shall be for the Charterers’ account;
354
355
(2)    if the costs of the Required Modification are greater than the amount stated in Box 21(i), the
356
Charterers’ portion of costs shall be apportioned using the fοrmula below; all costs other than
357
the Charterers’ portion of costs shall be for the Owners’ account.
358
359
ΑMT=agreed amount stated in Box-21(ii)
360
361
CRM=cost of Required Modification
362
363
MEL=mοdificatiοn’s expected life in years
364
365
VEL=the Vessel’s expected remaining life in years stated in Box-21(iii)
366
367
RPY=remaining charter period in years
368
369
(i) If the Required Modification is expected to last for the remaining life of the Vessel, then:
370
371
Charterers’ portion of costs= CRM/VEL x RPY
372
373
(ii) If the Required Modification is not expected to last for the remaining life of the Vessel, then:
374
375
Charterers’ portion of costs = CRM/MEL x RPY
376
377
*Subclauses 13(b)(i) and 13(b)(ii) are alternatives, state alternative agreed in Box 21(i). If Boc 21(i) is nοt
Copyright © 2017 Norwegian Shipbrokers’ Association. All rights reserved.

PART II
BARECON 2017 STANDARD BAREBOAT CHARTER PARTY
378
filled in, then subclause 13(b)(i) shall-apply.
379
380
(c)
Financial Security
381
382
The Charterers shall maintain financial security or responsibility in respect of third party liabilities as required
383
by any government, including federal, state or municipal or other division or authority thereof, to enable the
384
Vessel, without penalty or charge, lawfully to enter, remain at, or leave any port, place, territorial or contiguous
385
waters of any country, state or municipality in performance of this Charter Party without any delay. This
386
obligation shall apply whether or not such requirements have been lawfully imposed by such government or
387
division or authority thereof. The Charterers shall make and maintain all arrangements by bond or otherwise
388
as may be reasonably necessary to satisfy such requirements at the Charterers’ sole expense and the
389
Charterers shall indemnify the Owners against all direct consequences whatsoever (including loss of time)
390
for any failure or inability to do so.
391
392
(d)
Operation of the Vessel
393
394
The Charterers shall at their own expense crew, victual, navigate, operate, supply, fuel, maintain and repair
395
the Vessel during the Charter Period and they shall be responsible for all costs and expenses whatsoever
396
relating to their use and operation of the Vessel, including any taxes and fees. The Crew shall be the servants
397
of the Charterers for all purposes whatsoever, even if for any reason appointed by the Owners.
398
399
(e)
Information to Owners
400
401
The Charterers shall keep the Owners advised of the intended employment, planned dry-docking and major
402
repairs of the Vessel, as reasonably required by the Owners.
403
404
(f)
Flag and Name of Vessel
405
406
The Owners have no right to change the name or flag of the Vessel during the Charter Period. During the
407
Charter Period, the Charterers shall have the liberty to paint the Vessel in their own colours, install and display
408
their funnel insignia and fly their own house flag. The Charterers shall also have the liberty, with the Owners’
409
prior written consent, which shall not be unreasonably withheld or delayed, to change the flag and/or the name
410
of the Vessel during the Charter Period by providing 30 days prior notice to the Owners and such expense
411
shall be for Charterer’s account. In case Charterers do not exercise their Purchase Option as set out in Clause
412
45 or the Owners do not exercise their Put Option as set out in Clause 46, painting and re-painting, instalment
413
and re-instalment, registration and re-registration at re-delivery, if required by the Owners, shall be at the
414
Charterers’ expense and time. Any annual tonnage tax plus Agency fee and tonnage tax arising as a result
415
of a flag change undertaken by the Charterers shall be for the account of the Charterers during the Charter
416
period. Change of flag (including Bareboat flag registration) during charter period to be accepted/agreed by
417
Owners and Charterers which to be Charterers’ Account (which agreement not to be unreasonably withheld
418
or delayed).
419
Any cost and fee for initial registration of title to the Vessel and legal documentation cost for documenting the
420
lease and security to be Charterers’ account; however such cost not to exceed USD15,000.
421
422
(g)
Changes to the Vessel
423
424
Subject to subclause 13(b) (New Class and Other Regulatory Requirements), the Charterers shall make no
425
structural or substantial changes to the Vessel without the Owners’ prior written approval. If the Owners agree
426
to such changes, the Charterers shall, if the Owners so require, restore the Vessel, prior to redelivery of the
427
Vessel, to its former condition.
428
429
Subclause 13(b) notwithstanding, Charterers are permitted to make improvements to the Vessel provided
430
cost of same to be for Charterers’ account.
431
Copyright © 2017 Norwegian Shipbrokers’ Association. All rights reserved.

PART II
BARECON 2017 STANDARD BAREBOAT CHARTER PARTY
432
Charterers to inform to the Owners any changes or improvement occurred and to provide any documents or 
433
certificate for such changes or improvement.
434
435
(h)
Use of the Vessel’s Outfit and Equipment
436
437
The Charterers shall have the use of all outfit, equipment and spare parts on board the Vessel at the time of
438
delivery, provided the same or their substantial equivalent shall be returned to the Owners on redelivery in
439
the same good order and condition as on delivery as per the inventory (see Clause 8 (Inventories), ordinary
440
wear and tear excepted. The Charterers shall from time to time during the Charter Period replace such
441
equipment that become becomes unfit for use. The Charterers shall procure that all repairs to or replacement
442
of any damaged, worn or lost parts or equipment will be effected in such manner (both as regards
443
workmanship and quality of materials, including spare parts) as not to materially diminish the value of the
444
Vessel.
445
446
The Charterers have the right to fit additional equipment at their expense and risk but the Charterers shall
447
remove such equipment at the end of the Charter Period if requested by the Owners (acting reasonably). Any
448
hired equipment on board the Vessel at the time of delivery shall be kept and maintained by the Charterers.
449
and the Charterers shall assume the obligations and liabilities of the Owners under any lease contracts in
450
connection therewith and shall reimburse the Owners for all expenses incurred in cοnnectiοn therewith, also
451
for any new hired equipment required in order to comply with any regulations.
452
453
(i)
Periodical Dry-Docking
454
455
The Charterers shall dry-dock the Vessel and clean and paint her underwater parts whenever the same may
456
be necessary, but not less than once every sixty (60) calendar months or such other period as may be required
457
by the Classification Society or Flag State.
458
459
14.
Inspection during the Charter Period
460
461
Not more than once in each calendar year during the Charter Period, the Owners shall have the right at any
462
time after giving reasonable notice to the Charterers (provided that such inspection shall not delay or interfere
463
with the Vessel’s operation and/or trading and/or loading or unloading) to inspect the Vessel or instruct a duly
464
authorised surveyor to carry out such inspection on their behalf to ascertain its condition and satisfy
465
themselves that the Vessel is being properly repaired and maintained or for any other reasonable commercial
466
reason they consider necessary (provided it does not unduly interfere with the commercial operation of the
467
Vessel). The Owners’ representative and the surveyor shell sign the Charterers usual letter of indemnity prior
468
to embarkation.
469
470
The fees for such inspections shall be paid for by the Owners. All time used in respect of inspection shall be
471
for the Charterers’ account and form part of the Charter Period.
472
473
The Charterers shall also permit the Owners to inspect the Vessel’s class records, log books, certificates,
474
maintenance and other records whenever requested and shall whenever required by the Owners when
475
reasonably required upon the Owners’ request and shall furnish them the Owners with full information
476
regarding any casualties or other accidents or damage to the Vessel as may be requested by the Owners.
477
478
15.
Hire
479
480
(a)
The Charterers shall pay hire due to the Owners punctually in accordance with the terms of this Charter Party.
481
482
(b)
The Charterers shall pay to the Owners for the hire of the Vessel a lump sum in the amount the rate stated in
483
Box 17(i) which shall be payable not later than monthlyevery thirty (30) running days in advance, the first lump
484
sum being payable on the Delivery Date and hour of the Vessel’s delivery to the Charterers subsequent sums
485
falling due at consecutive monthly periods on the corresponding calendar day thereafter (each such day the
Copyright © 2017 Norwegian Shipbrokers’ Association. All rights reserved.

PART II
BARECON 2017 STANDARD BAREBOAT CHARTER PARTY
486
 
“Hire Payment Date”). Hire shall be paid continuously throughout the Charter Period, subject to the terms of
487
 
this Charter Party. Each payment of Fixed Hire shall be deemed to have been applied on receipt by the
488
 
Owners towards reducing the Outstanding Principal.
489
 
 
490
(c)
Payment of hire shall be made to the Owners’ bank account stated in Box 20.
491
 
 
492
 
All payments of Charter: hire and any other payments due under this Charter shall be made without any set-
493
 
off whatsoever and free and clear of any withholding or deduction for, or on account of, any present or future
494
 
income, freight, stamp or other taxes, levies, imposts, duties, fees, charges, restrictions or conditions of any
495
 
nature unless required by law. If the Charterers are required by any authority in any country to make any
496
 
withholding or deduction from any such payment, the sum due from the Charterers in respect of such payment
497
 
will be increased to the extent necessary to ensure that, after the making of such withholding or deduction the
498
Owners receive a net sum equal to the amount which it would have received had no such deduction or
499
withholding been required to be made. If tax regulations change during the Charter Period, the Owners shall
500
notify the Charterers as soon as they become aware and will provide reasonable co-operation in order to
501
avoid any additional expenses to Charterers. However, where there is a failure to make punctual payment of
502
hire due to oversight, negligence, errors or omissions on the part of the Charterers or their bankers, the
503
Owners shall give the Charterers five (5) Banking Days to rectify the failure, and when so rectified within five
504
(5) Banking Days following the Owners’ notice, the payment shall stand as regular and punctual. Failure by
505
the Charterers to pay hire within five (5) Banking Days of their receiving the Owners’ notice as provided herein,
506
shall entitle the Owners to withdraw the Vessel from the service of the Charterers and terminate the Charter
507
without further notice.
508
509
(d)
If the Charterers fail to make punctual payment of hire due, the Owners shall give the Charterers threefive
510
(35) Banking Days written notice to rectify the failure, and when so rectified within those threefive (35) Banking
511
Days following the Owners’ notice, the payment shall stand as punctual.
512
 
513
Failure by the Charterers to pay hire due in full within threefive (35) Banking Days of their receiving a written
514
notice from Owners shall entitle the Owners, without prejudice to any other rights or claims the Owners may
515
have against the Charterers, to terminate this Charter Party at any time thereafter, as long as hire remains
516
outstanding.
517
 
518
(e)
If the Owners choose not to exercise any of the rights afforded to them by this Clause in respect of any
519
 
particular late payment of hire, or a series of late payments of hire, under the Charter Party, this shall not be
520
 
construed as a waiver of their right to terminate the Charter Party.
521
 
 
522
(f)
Any delay in payment of hire shall entitle the Owners to interest at the rate per annum as agreed in Box 19. If
523
 
Box 19 has-not been filled in, the one month Interbank offered rate in London (LIBOR or its successor) for the
524
 
currency state in Box 17, as quoted on the date when the hire fell due, increased by three(3) per cent, shall
525
 
apply.
526
 
 
527
(g)
Payment of interest due under Subclause 15(g) shall be made within seven (7) running days of the date of
528
 
the Owners’ invoice specifying the amount payable or, in the absence of an invoice, at the time of the next
529
 
Hire Payment Date.
530
 
531
(h)
Final payment of hire, if for a period of less than thirty (30)-running-daysone calendar month, shall be
532
 
calculated proportionally according to the number of days and hours remaining before redelivery to the
533
 
Owners or delivery by the Owners to the Charters should Charterers exercise the Purchase Option or Owners
534
 
exercise the Put Option and advance payment to be effected accordingly. 
535
536
(i) 
The Charterer may prepay the BBC Hire with at least one (1) month prior written notice to the Owners. Such
537
 
prepayment (the “Prepayment Amount”) shall be in multiples of USD 1,000,000 (United States Dollars one
538
 
million). Any such prepayments shall be applied against the Outstanding Charter Hire Principal under this
539
 
Charter Party and the fixed portion of BBC Hire (as referred as “Fixed Rate” in Box 17 of Part I hereof) shall
Copyright © 2017 Norwegian Shipbrokers’ Association. All rights reserved.

PART II
BARECON 2017 STANDARD BAREBOAT CHARTER PARTY
540
 
be recalculated (and reduced pro rata over the remaining BBC Period) with effect from the next month. The
541
 
amounts of the Purchase Option Prices, Owners Put Option prices and Minimum Insured Value shall be
542
 
correspondingly recalculated (and reduced) according to the Outstanding Charter Hire Principal after
543
 
application of such Prepayment Amount. Each such prepayment of the Charter Hire shall be permitted only if
544
 
the Owner/Mortgagee and the Charterer shall mutually agree to the amount of the remaining Charter Hire,
545
 
Purchase Option Price, Owners Put Option Price and Minimum Insured Value so recalculated.
546
 
 
547
(j)
Any moneys required under this Agreement to be paid by the Charterers to the Owners or any of them shall
548
 
be validly paid, if paid to the Owners’ bank account stated in Box 20, and by such payment to the Owners’
549
 
bank account stated in Box 20 any payor shall be validly released from its obligation to make such payment.
550
 
 
551
16.
Mortgage
552
 
 
553
 
(only to apply if Box 22 has been appropriately filled in)
554
555
(a)*  The Owners warrant that they have not effected any mοrtgage(s) of the Vessel and that they shall not effect
556
any mortgage (s) without the prior consent of the charterers, whiεh shall not be unreasonably withheld.
557
558
(b)* Subject to the provisions of any quiet enjoyment letter (including, for the avoidance of doubt, the QEL), the
559
Vessel chartered under this Charter Party is financed by a mortgage according to the Financial Instrument.
560
 
The Charterers undertake upon the written request of the Owners to comply, and provide such customary
561
 
information and documents relating to the Vessel and/or the Charterers as may be reasonably required to
562
 
enable the Owners to comply with all such instructions or directions in regard to the employment, insurances,
563
 
operation, repairs and maintenance of the Vessel as laid down in the Financial Instrument (which Owners
564
 
warrant are always in conformity with, and shall not impose any additional obligations on Charterers, with
565
 
regards to employment, insurance, operation, repairs and maintenance provisions of this Charter Party) or
566
 
as may be directed from time to time during the currency of the Charter Party by the mortgagee(s) in
567
 
conformity with the Financial Instrument, including the display or posting of such notices as the Mortgagees
568
 
may require. The Charterers cοnfirm that, for this purpose, they have acquainted themselves with all relevant
569
 
terms, conditions and provisions of the Financial Instrument and agree to acknowledge this in writing in any
570
 
form that may be required by the mοrtgagee(s). The Financial instrument shall secure an amount of up to the
571
 
Outstanding Principal and shall be enforceable by the Mortgagee only if there has occurred and is continuing
572
 
a Charterers’ Event of Default under this Charter Party. The Owners warrant that they have not effected any
573
 
mortgage(s) other than stated in Box 22 and that they shall not agree to any amendment of the mortgage(s)
574
 
referred to in Box 22 or effect any other mortgage(s) without the prior consent of the Charterers, which shall
575
 
not be unreasonably withheld.
576
 
 
577
 
*(Optional, Subclauses 16(a) and 16(b) are alternatives; indicate alternative agreed in Box 22)
578
 
 
579
17.
Insurance See also Clause 47
580
 
 
581
 
 
582
(a)
General
583
 
(i) The value of the Vessel for hull and machinery (including increased value) and war risks insurance is the
584
 
sum stated in Box 23, or such other sum as the parties may from time to time agree in writing. The party
585
 
insuring the Vessel shall do so on such terms and conditions and with such insurers as the other party shall
586
 
approve in writing, which approve shall not be unreasonably withheld, and shall name the other party as co
587
 
assured.
588
 
589
 
(ii) [Notwithstanding that the pParties are co assured], these insurance provisions shall neither exclude nor
590
 
discharge liability between the Owners and the Charterers under this Charter Party, but are intended to secure
591
 
payment of the loss insurance proceeds as a first resort to make good the Owners’ loss. If such payment is
592
made to the Owners it shall be treated as satisfaction (but not exclusion or discharge) of the Charterers’
593
liability towards the Owners. For the avoidance of doubt, such payment is no bar to a claim by the Owners
Copyright © 2017 Norwegian Shipbrokers’ Association. All rights reserved.

PART II
BARECON 2017 STANDARD BAREBOAT CHARTER PARTY
594
and/or their insurers against the Charterers to seek indemnity by way of subrogation.
595
596
(iii) Nothing herein shall prejudice any right of recovery of the Owners or the Charterers (or their insurers)
597
against third parties.
598
599
(b)* Charterers to Insure
600
601
(i) During the Charter Period the Vessel shall be kept insured by the Charterers at their expense against hull
602
and machinery, war, and protection and indemnity risks (and any risks against which it is compulsory to insure
603
for the operation of the Vessel, including maintaining financial security in accordance with subclause 13(c)
604
(Financial Security)).
605
606
(ii) Such insurances shall be arranged by the Charterers to protect the interests of the Owners and the
607
Charterers and the mortgagee(s) (if any), and the Charterers shall be at liberty to protect under such
608
insurances the interests of any managers manager they may appoint.
609
610
(iii) The Charterers shall upon the written request of the Owners, provide information and promptly execute
611
such customary documents as may be reasonably required to enable the Owners to comply with the insurance
612
provisions of the Financial instrument, provided that such documents are not prejudicial to the Charterers’
613
interests.
614
615
(c)*  Owners to Insure
616
617
(i) During the Charter Period the Vessel shall be kept insured by the Owners at their expense against hull and
618
machinery and war risks. The Charterers shall progress claims for recovery against any third parties for the
619
benefit of the Owners’ and the Charterers’ respective interests.
620
621
(ii) During the Charter Period the Vessel shall be kept insured by the Charterers at their expense against
622
Protection and Indemnity risk (and any risks against which it is compulsory to insure fer the operation of the
623
Vessel, including maintaining financial security in accordance with subclause 13(c) (Financial Security)).
624
625
(iii) In the event that any act or-negligence of the Charterers prejudices any of the insurances herein provided,
626
the Charterers shall pay to the Owners all losses and indemnity the Οwners against all claims and demands
627
which would otherwise have been covered-by such insurances.   
628
629
*Subclauses  17(b) and 17(c) are alternatives, state alternative agreed in Box 24. If Box 24 is not filled in, then
630
subclause 17(b) (Charterers to insure) shall apply.
631
632
18.   Repairs
633
634
(a)    Subject to the provisiοns of any Financial Instrument, and the approval of the Owners, the Charterers shall
635
effect all insured repairs, and undertake settlement of all miscellaneous expenses in connection with such
636
repairs as well as all insured charges, expenses and liabilities.  
637
638
To the extent of coverage under the insurances provided for under the provisions of subclause 17(c) (Owners
639
to Insure), the Charterers shall be reimbursed under the Owners’ insurances for such expenditures upon
640
presentation of accounts.
641
642
(b)   The Charterers shall remain responsible for and effect repairs and settlement of costs and expenses incurred
643
thereby in respect of repairs not covered by the insurances and/or not exceeding any deductibles-provided for
644
in the insurances.
645
646
(c)   All time used for repairs under the provisions of subclauses 18(a) and 18(b) and for repairs οf Latent Defects
647
according to Clauses 3 (Delivery) above, including any deviation, shall be for the Charterer’s account and shall
Copyright © 2017 Norwegian Shipbrokers’ Association. All rights reserved.

PART II
BARECON 2017 STANDARD BAREBOAT CHARTER PARTY
648
form part οf the Charter Period.
649
650
19.
Total loss
651
652
(a)
The Charterers shall be liable to the Owners by way of damages if the Vessel becomes a Total Loss. Subject
653
to the provisions of any Financial Instrument, if the Vessel becomes a Total Loss, all insurance payments for
654
such loss shall be paid in accordance with Clause 47 to the Owners (or the Mortgagees as assignees thereof)
655
who shall distribute the monies between the Owners (or the Mortgagees as assignees thereof) and the
656
Charterers in accordance with Clause 47accοrding to their respective interests, which (distribution) shall
657
satisfy and discharge the Charterers’ liability to the Owners under the terms hereof. The Charterers undertake
658
to notify the Owners and the mortgagee(s), if any, of any occurrences in consequence of which the Vessel is
659
likely to become a Total Loss.
660
661
(b)
Notwithstanding any other clause herein, it is recognised that the Charterers have a continuing obligation to
662
protect and preserve the Vessel as an asset of the Owners. The Charterers shall have a continuing duty after
663
the termination of the Charter Party to preserve and present claims on behalf of Owners and Charterers and/or
664
any subrogated insurers against any third party held responsible for the Total Loss during the Charter Period
665
and account for any recovery achieved.
666
667
(c)
The Owners or the Charterers, as the case may be, shall upon the request of the other pParty (acting
668
reasonably), promptly execute such documents as may be required to enable the other pParty to abandon
669
the Vessel to the insurers and claim a constructive total loss.
670
671
20.
Lien
672
673
The Owners shall have a lien upon all cargoes, hires and freights (including deadfreight and demurrage)
674
belonging or due to the Charterers or any sub-charterers, or to the extent permitted bylaw or equity, for any
675
amounts due under this Charter Party and the Charterers shall have a lien on the Vessel for all monies paid
676
in advance and not earned. The Owners and the Charterers shall provide the amount of any such lien upon
677
the other pParty’s reasonable request, provided that such request shall not be made by either pParty more
678
than twice in any calendar year during the Charter Period
679
680
21.
Non-Lien
681
682
The Charterers will not suffer, nor permit to be continued, any lien or encumbrance incurred by them or their
683
agents, which might have priority over the title and interest of Owners in the Vessel (other than any Permitted
684
Liens).
685
686
22.
Indemnity
687
688
(a)
The Charterers shall indemnify the Owners against any direct and proven loss, damage or expense arising
689
out of or in relation to the operation of the Vessel by the Charterers, and against any lien of whatsoever nature
690
arising cut of an event occurring during the Charter Period (other than a Permitted Lien). This shall include
691
indemnity for any direct and proven loss, damage or expense arising out of or in relation to any international
692
convention which may impose liability upon the Owners or sanctions implemented by the United Nations,
693
European Union, United States of America or United Kingdom or Japan.
694
695
(b)
Without prejudice to the generality of the foregoing, the Charterers agree to indemnify the Owners against all
696
direct and proven consequences or liabilities arising from the Master, officers or agents signing bills of lading
697
or other documents.
698
699
(c)
If the Vessel is arrested or otherwise detained for any reason whatsoever other than those covered in
700
subclause (d), the Charterers shall at their own expense take all reasonable steps to secure that within a
701
reasonable time the Vessel is released, including the provision of bail.
Copyright © 2017 Norwegian Shipbrokers’ Association. All rights reserved.

PART II
BARECON 2017 STANDARD BAREBOAT CHARTER PARTY
702
703
(d)
If the Vessel is arrested or otherwise detained by reason of a claim or claims against the Owners and/or any
704
other company or other entity which belongs to the same group of companies of which the Owners are part,
705
or which is otherwise associated or related to, or affiliated with, the Owners, the Owners shall at their own
706
expense take all reasonable steps to secure that within a reasonable time the Vessel is released, including
707
the provision of bail. If within a 45 days period after such arrest or detainment, the Vessel is not so released,
708
the Charterers may, at their option but without obligation to do so, take all necessary steps to obtain such
709
release, and all expenses of the Charterers in connection therewith shall be reimbursed by the Owners on
710
demand, and the Owners shall take reasonable steps to minimise any costs to the Charterer arising out of
711
any such arrest.
712
713
In such circumstances the Owners shall indemnify the Charterers against any loss, damage or expense
714
incurred by the Charterers (including hire paid under this Charter Party) as a direct consequence of such
715
arrest or detention.
716
717
(e)
The indemnities of the Charterers under this Clause 22 shall not extend to events occurring after the end of
718
Charter Period, but as to any event occurring before the end of the Charter Period shall continue in full force
719
and effect notwithstanding the termination of the chartering of the Vessel under this Charter Party for any
720
reason until four (4) years from the early termination of this Charter or the end of the Charter Period or the
721
sale of the Vessel by the Owners to any person, provided that if, prior to the expiry of the aforesaid period of
722
four (4) years, any event or dispute arises in respect of which the Owners are to be indemnified under this
723
Clause 22, the indemnities of the Charterers under this Clause 22 shall continue in full force and effect until
724
the Owners have been fully indemnified in accordance with this Clause 22.
725
726
(f)
The Owners will notify the Charterers as soon as they become aware of any claim against the Owners which
727
may give rise to indemnification under this Clause 22. The Owners will not settle any claims or discharge any
728
court judgments in respect of any claim unless it has first negotiated with the Charterers in good faith for a
729
reasonable period of time, provided that the Owners may settle any claim or discharge any court judgment if
730
failure so to do would give rise to substantial losses or damages for, or reputational damage to, the Owners.
731
732
(g)
The Owners will not, and the Charterers will, be responsible for the conduct of any claim or potential claim that
733
may give rise to an indemnity liability of the Charterers under this Clause 22 and the Charterers may be entitled
734
(at their own cost end expense) to take such actions as they may reasonably deem fit to defend or avoid
735
liability under any such claim or take action against any third party in respect of liability under any such claim.
736
737
(h)
The Charterer to undertake to the Owner and the Owner’s Financiers to protect, cover, compensate for any
738
claim, damage and loss caused by oil pollution and any cargo claim (clean or dirty).
739
740
23.
Salvage
741
742
All salvage and towage performed by the Vessel shall be for the Charterers’ benefit and the cost of repairing
743
damage occasioned thereby shall be borne by the Charterers.
744
745
24.
Wreck Removal
746
747
If the Vessel becomes a wreck, or any part of the Vessel is lost or abandoned, and is an obstruction to
748
navigation or poses a hazard and has to be raised, removed, destroyed, marked or lit by order of any lawful
749
authority having jurisdiction over the area or as a result of any applicable law, the Charterers shall be liable
750
for any and all direct and documented expenses in connection with raising, removal, destruction, lighting or
751
making of the Vessel and shall indemnify the Owners against any direct and proven sums whatsoever, which
752
the Owners become liable to pay as a consequence.
753
754
25.
General Average
755
Copyright © 2017 Norwegian Shipbrokers’ Association. All rights reserved.

PART II
BARECON 2017 STANDARD BAREBOAT CHARTER PARTY
756
The Owners shall not contribute to General Average.
757
758
26.
Assignment, Novation, Sub-Charter and Sale See also Clauses 43 and 44
759
760
(a)
The Charterers shall not assign or novate this Charter Party nor sub-charter the Vessel on a bareboat basis
761
except with the prior consent in writing of the Owners, which shall not be unreasonably withheld or delayed,
762
and subject to such terms and conditions as the Owners shall approve.
763
764
(b)
See also Clauses 43 and 44 The Owners shall not sell the Vessel during the currency of this Charter Party
765
except with the prior written consent of the Charterers which shall not be unreasonably withheld, and subject
766
to the buyer accepting a novation of this Charter Party.
767
768
(c)   The Owners shall be entitled to assign their rights under this Charter Party.
769
770
27.
Performance Guarantee See Clause 43
771
772
(Optional, to apply only if Box 25 filled in)
773
774
The Charterers undertake to furnish before delivery of the Vessel, a guarantee or bond in the amount of and
775
from the entity stated in Box 25 in a form acceptable to the Owners as guarantee for full performance of their
776
obligations under this Charter Party,
777
778
28.
Anti-Corruption
779
780
(a)
The pParties agree that in connection with the performance of this Charter pParty they shall each:
781
782
(i) comply at all times with all applicable anti-corruption legislation end have procedures in place that are, to
783
the best of its knowledge and belief, designed to prevent the commission of any offence under such legislation
784
by any member of its organisation and/or by any person providing services for it or on its behalf; and
785
786
(ii) make and keep books, records, and accounts which in reasonable detail accurately and fairly reflect the
787
transactions in connection with this Charter Party.
788
789
(b)
If either pParty fails to comply with any applicable anti-corruption legislation, it shall defend and indemnify the
790
other pParty against any fine, penalty, liability, loss or damage and for any related costs (including, without
791
limitation, court costs and legal fees) arising from such breach.
792
793
(c)
Without prejudice to any of Its other rights under this Charter pParty, either pParty may terminate this Charter
794
pParty without incurring any liability to the other pParty if:
795
796
(i) at any time the other pParty or any member of its organisation has committed a breach of any applicable
797
anti-corruption legislation in connection with this Charter pParty; and
798
799
(ii) such breach causes the non breaching pParty to be in breach of any applicable anti-corruption legislation.
800
801
Any such right to terminate must be exercised without undue delay.
802
803
(d)
Each pParty represents and warrants that in connection with the negotiation of this Charter Party neither it
804
nor any member of its organisation has committed any breach of applicable anti-corruption legislation. Breach
805
of this subclause (d) shall entitle the other pParty to terminate the Charter Party without incurring any liability
806
to the other.
807
808
29.
Sanctions and Designated Entitles
809
Copyright © 2017 Norwegian Shipbrokers’ Association. All rights reserved.

PART II
BARECON 2017 STANDARD BAREBOAT CHARTER PARTY
810
(a)
The provisions of this clause shall apply in relation to any applicable sanction, prohibition or restriction
811
imposed on any specified persons, entitles or bodies including the designation of specified vessels or fleets
812
and Owners or Charterers under United Nations Resolutions or trade or economic applicable sanctions, laws
813
or regulations of the European Union or the United States of America or the United Kingdom or Japan.
814
815
(b)
The Owners and Charterers respectively warrant for themselves (and in respect of any sub-charterer or
816
manager which belongs to the same group of companies of which the Charterers are part, the Charterers
817
hereby undertake to fake necessary steps to ensure) (and in the case of any sub charter, the Charterers
818
further warrant in respect of any sub charteιers, shippers receivers, or cargo interests) that at the date of this
819
fixture and throughout the duration of this Charter Party they are not subject to any of the sanctions,
820
prohibitions, restrictions or designation referred to in subclause (a) which prohibit or render unlawful any
821
performance under this Charter Party. The Owners further warrant that the Vessels not a designated vessel.
822
823
(c)
If at any time during the performance of this Charter pParty either Party becomes aware that the other Party
824
is in breach of warranty in this Clause, the pParty not in breach shall comply with the laws and regulations of
825
any Government to which that pParty or the Vessel is subject, and follow any orders or directions which may
826
be given by any body acting with powers to compel compliance, including where applicable the Owners’ Flag
827
State. In the absence of any such orders, directions, law or regulations, the pParty not in breach may, in its
828
option, terminate the Charter Party forthwith in accordance with Clause 31 (Termination). However, in the
829
event that a sub-charterer managing or other parties who have any contractual relationships with the
830
Charterers in respect of the Vessel are subject to sanctions, prohibitions, restrictions or designation referred
831
to in subclause (a), Owners may not terminate the Charter Party before giving Charterers a reasonable period
832
to take necessary measures to remedy such breach and to ensure such a breach does not continue.
833
834
(d)
If, in compliance with the provisions of this Clause, anything is done or is not done, such shall not be deemed
835
a deviation but shall be considered sue fulfilment of this Charter Party.
836
837
(e)
Notwithstanding anything in this Clause to the contrary, the Owners or the Charterers shall not be required to
838
do anything which constitutes a violation of the laws and regulations of any state to which either of them is
839
subject.
840
841
(f)
The Owners or the Charterers shall be liable to indemnify the other pParty against any and all direct and
842
proven claims, losses, damage, costs and fines whatsoever suffered by the other pParty resulting from any
843
breach of warranty in this Clause. If such calling constitutes a breach of sanctions, then Charterers to
844
undertake to indemnify Owners against all direct and proven loss and costs sustained as a result of such
845
violation. Charterers shall indemnify the Owners and hold the Owners harmless in respect of any direct and
846
proven liability, loss, damage or expenses of whatsoever nature which the Owners may sustain resulting from
847
the operation of the Vessel (including but not limited to hereunder those arising from Vessel entering/operating
848
in war area or warlike area).
849
850
30.
Requisition /Acquisition
851
852
(a)
In the event of the requisition for hire of the Vessel by any governmental or other competent authority at any
853
time during the Charter Period, this Charter Party shall not be deemed to be frustrated or otherwise terminated.
854
The Charterers shall continue to pay hire according to the Charter Party until the time when the Charter Party
855
would have expired or terminated pursuant to any of the provisions hereof. However, if any requisition hire or
856
compensation is received by the Owners for the remainder of the Charter Period or the period of the requisition,
857
whichever is shorter, it shall be payable by the Owners to the Charterers.
858
859
(b)
In the event of the Owners being deprived of their ownership in the Vessel by any compulsory acquisition of
860
the Vessel or requisition for title by any governmental or other competent authority (hereinafter referred to as
861
“Compulsory Acquisition”), then, irrespective of the date during the Charter Period when Compulsory
862
Acquisition may occur, this Charter Party shall be deemed terminated as of the date of such Compulsory
863
Acquisition. In such event hire to be considered as earned and to be paid up to the date and time of such
Copyright © 2017 Norwegian Shipbrokers’ Association. All rights reserved.

PART II
BARECON 2017 STANDARD BAREBOAT CHARTER PARTY
864
Compulsory Acquisition. The Owners shall be entitled to any compensation received for such Compulsory
865
Acquisition, which shall be applied towards reducing the Outstanding Principal.
866
867
31.
Termination
868
869
(a)
Charterers’ Default
870
871
The Owners shall be entitled to terminate this Charter Party by written notice to the Charterers and to claim
872
damages including, but not limited to, for the loss of the reminder remainder of the Charter Party under the
873
following circumstances, each of which shall be a “Charterers’ Event of Default” for the purposes of this
874
Charter Partyand to claim damages including, but not limited to, for the loss of the reminder remainder of-the
875
Charter Party.
876
877
(i) Non-payment of hire (see Clause15 (Hire)), subject to all applicable grace periods.
878
879
(ii) Charterers’ failure to comply with the requirements of:
880
881
(1) Clause 11 (Trading Restrictions); or
882
883
(2) Subclause 17(b) (Charterers to insure)
884
885
and, if capable of remedy, such requirement is not remedied within 30 days of the earlier of the date on which
886
(A) the Charterers became aware of the failure to comply and (B) the Charterers’ received the Owners’ written
887
notification do to so.
888
889
(iii) The Charterers do not rectify any failure to comply with the requirements of subclause 13(a) (Maintenance)
890
as soon as practically possible after the Owners have notified them to do so, unlessand in any event so that
891
the Vessel’s insurance cover is not prejudiced by such failure.
892
893
(iv) If the Charterers are in breach of any material provisions of this Charter Party other than those referred
894
to in Clause 31 (a)(i), (ii) and (iii) above, and if capable of remedy, such breach is not rectified by the Charterers
895
within 30 days of the earlier of the date on which (A) the Charterers became aware of the failure to comply
896
and (B) the Charterers’ received the Owners’ written notification do to so.
897
898
(b)
Owners’ Default
899
900
The Charterers shall be entitled to terminate this Charter Party with immediate effect by written notice to the
901
Owners and to claim damages including, but not limited to, for the loss of the remainder of the Charter Party:
902
903
(i) If the Owners shall by any act or omission be in breach of their obligations under this Charter Party to the
904
extent that the Charterers are deprived of the use, operation, possession or enjoyment of the Vessel and such
905
breach continues for a period of fourteenthirty (1430) running days after written notice thereof has been given
906
by the Charterers to the Owners; or
907
908
(ii) if the Owners fail to arrange or maintain the insurances in accordance with subclause 17(e) (owners to
909
Insure).
910
911
(c)
Loss of Vessel
912
913
This Charter Party shall be deemed to be terminated, without prejudice to any accrued rights or obligations,
914
if the Vessel becomes lost either when it has become an actual total loss or agreement has been reached
915
with the Vessel’s underwriters in respect of its constructive total loss or if such agreement with the Vessel’s
916
underwriters is net reached it is adjudged by a competent tribunal that a constructive loss of the Vessel has
917
occurred, or has been declared missing. The date upon which the Vessel is to be treated as declared missing
Copyright © 2017 Norwegian Shipbrokers’ Association. All rights reserved.

PART II
BARECON 2017 STANDARD BAREBOAT CHARTER PARTY
918
shall be ten (10) days after the Vessel was last reported or when the Vessel is recorded as missing by the
919
Vessel’s underwriters, whichever occurs first.
920
921
(d)
Bankruptcy
922
923
Either pParties shall be entitled to terminate this Charter Party with immediate effect by written notice to the
924
other pParties if that other pParties has a petition presented for its winding up or administration or any other
925
action is taken with a view to its winding up (otherwise than for the purpose of solvent reconstruction or
926
amalgamation), or becomes bankrupt or commits an act of bankruptcy, or makes any arrangement or
927
composition for the benefit or creditors, or has a receiver or manager or administrative receiver or
928
administrator or liquidator appointed in respect of any of its assets, or suspends payments, or anything
929
analogous to any of the foregoing under the law of any jurisdiction happens to it, or ceases or threatens to
930
cease to carry on business.
931
932
(e)
The termination of this Charter Party shall be without prejudice to all rights accrued due between the Parties
933
prior to the date of termination and to any claim that pParty might have.
934
935
32.
Repossession
936
937
in the event of the early termination of this Charter Party in accordance with the applicable provisions of this
938
Charter Party, the Owners shall have the right to repossess the Vessel from the Charterers at its current or
939
next port of call, or at a port or place convenient to them without hindrance or interference by the Charterers,
940
courts or local authorities. Pending physical repossession of the Vessel, the Charterers shall hold the Vessel
941
as gratuitous bailee only to the Owners. The Owners shall arrange for an authorised representative to board
942
the deemed to be repossessed by the Owners from the Charterers upon the boarding of the Vessel by the
943
Owners representative. All arrangements and expenses relating to the settling of wages, disembarkation and
944
repatriation of the Crew shall be the sole responsibility of the Charterers.
945
946
33.
BIMCO Dispute Resolution Clause 2017
947
948
(a)* This Charter Party shall be governed by and construed in accordance with English law and any dispute arising
949
out of or in connection with this Charter Party shall be referred to arbitration in London in accordance with
950
the Arbitration Act 1996 or any statutory modification or re-enactment thereof save to the extent necessary to
951
give effect to the provisions of this Clause.
952
953
The arbitration shall be conducted in accordance with the London Maritime Arbitrators Association (LMAA)
954
Terms current at the time when the arbitration proceedings are commenced.
955
956
The reference shall be to three arbitrators. A pParty wishing to refer a dispute to arbitration shall appoint its
957
arbitrator and send notice of such appointment in writing to the other pParty requiring the other pParty to
958
appoint its own arbitrator within fourteen (14) calendar days of that notice and stating that it will appoint its
959
arbitrator as sole arbitrator unless the other pParty appoints its own arbitrator and gives notice that it has done
960
so within the fourteen (14) days specified. If the other pParty does not appoint its own arbitrator and give
961
notice that it has done so within the fourteen (14) days specified, the pParty referring a dispute to arbitration
962
may, without the requirement of any further prior notice to the other pParty, appoint its arbitrator as sole
963
arbitrator and shall advise the other pParty accordingly. The award of the sole arbitrator shall be binding on
964
both pParties as if he had been appointed by agreement.
965
966
Nothing herein shall prevent the pParties agreeing in writing to vary these provisions to provide for the
967
appointment of a sole arbitrator.
968
969
In cases where neither the claim nor any counterclaim exceeds the sum of USD 100,000 (or such other sum
970
as the pParties may agree) the arbitration shall be conducted in accordance with the LMAA Small Claims
971
Procedure current at the time when the arbitration proceedings are commenced.
Copyright © 2017 Norwegian Shipbrokers’ Association. All rights reserved.

PART II
BARECON 2017 STANDARD BAREBOAT CHARTER PARTY
972
973
In cases where the claim or any counterclaim exceeds the sum agreed for the LMAA Small Claims Procedure
974
and neither the claim nor any counterclaim exceeds the sum of USD 400,000 (or such other sum as the
975
parties may agree) the arbitration shall be conducted in accordance with the LMAA Intermediate Claims
976
Procedure current at the time when the arbitration proceedings are commenced.
977
978
(b)*  This Charter Party shall be governed by U.S. maritime law or if this Charter Party is not maritime contract
979
under U.S. law, by the laws of the state of New York. Any dispute arising out of or in connection with this
980
Charter Party shall be referred tο three (3) persons at New York, one to be appointed by each of the parties
981
hereto, and the third by the two so chosen. The decision of the arbitrators or any two of them shall be final,
982
and for the purposes of enforcing any award judgment may be entered on an award by any court of
983
competent jurisdiction The proceedings shall be conducted in accordance with the SMA Rules current as of
984
the date of this Charter Party.
985
986
In cases where neither the claim nor any counterclaim exceeds the sum of USD 100,000 (or such other sum
987
as the parties may agree) the arbitration shall be conducted in accordance with the SMA Rules for Shortened
988
Arbitration Procedure current as of the date of this Charter Party.
989
990
(c)*  This Charter Party shall be governed by and construed in accordance with Singapore**/English** law.
991
992
Any dispute arising out of or in connection with this Charter Party, including any question regarding its
993
existence validity or termination shall be referred to and finally resolved by arbitration in Singapore in
994
accordance with the Singapore International Arbitration Act (Chapter 143A) and any statutory modification or
995
re enactment thereof save to the extent necessary to give effect to the provisions of this Clause.
996
997
The arbitration shall be conducted in accordance with the Singapore International Arbitration Act (Chapter 143A) and any statutory modification or
998
Maritime Arbitration (SCMA) current at the time when the arbitration proceedings are commenced.
999
1000
The reference to arbitration of disputes under this Clause shall be to three arbitrators. A party wishing to refer
1001
a dispute to arbitration shall appoint its arbitrator and send notice of such appointment in writing to the other
1002
party requiring the other party to appoint its own arbitrator and give notice that it has done so within fourteen
1003
(14) calendar days of that notice and stating that it will appoint its own arbitrator as sole arbitrator unless the
1004
other party appoints Its own arbitrator and gives notice that it has done so within the fourteen (14) days
1005
spesifιed. lf the other party does not give notice that it has done sο within the fourteen (14) days specified,
1006
the party referring a dispute to arbitration may, without the requirement of any further priοr notice to the other
1007
party, appoint its arbitrator as sole arbitrator and shall advise the other party accοrdingly. The award of a sole
1008
arbitrator shall be binding on both parties as if he had been appointed by agreement.
1009
1010
Nothing herein shall prevent the parties agreeing in writing to vary these provisions to provide for the
1011
appointment of a sole arbitrator.
1012
1013
In cases where neither the claim nor any counterclaim exceeds the sum of USD 150,000 (or such other sum
1014
as the parties may agree) the arbitration shall be conducted before a single arbitrator in accordance with the
1015
SCMA Small Claims Procedure current at the time when the arbitration proceedings are commenced.
1016
1017
**Delete whichever does not apply. If neither or bοth are deleted, then English law shall apply by default.
1018
1019
(d)*  This Charter Party shall by and construed in accordance with the laws of the place mutually
1020
agreed by the Parties and any dispute arising out of or in connection with this Charter Party shall be referred
1021
to arbitration at a mutually agreed place, subject to the procedures applicable these.
1022
1023
(e)
The pParties may agree at any time to refer to mediation any difference and/or dispute arising out of or in
1024
connection with this Charter Party. In the case of any dispute in respect of which arbitration has been
1025
commenced under subclause (a), (c) or (d), the following shall apply.
Copyright © 2017 Norwegian Shipbrokers’ Association. All rights reserved.

PART II
BARECON 2017 STANDARD BAREBOAT CHARTER PARTY
1026
1027
(i) Either pParty may at any time and from time to time elect to refer the dispute or part of the dispute to
1028
meditation by service on the other pParty of a written notice (the “Mediation Notice”) calling on the other
1029
pParty to agree to mediation.
1030
1031
(ii) The other pParty shall thereupon within fourteen (14) calendar days of receipt of the Mediation Notice
1032
confirm that they agree to mediation, in which case the pParties shall thereafter agree a mediator within a
1033
further fourteen (14) calendar days, falling which on the application of either party a mediator will be
1034
appointed promptly by the Arbitration Tribunal (” the Tribunal”) or such person as the Tribunal may designate
1035
for that purpose. The mediation shall be conducted in such place and in accordance with such procedure and
1036
on such terms as the pParties may agree or, in the event of disagreement, as may be set by the mediator.
1037
1038
(iii) If the other pParty does not agree to mediate, that fact may be brought to the attention of the Tribunal and
1039
may be taken into account by the Tribunal when allocating the costs of the arbitration as between the pParties.
1040
1041
(iv) The mediation shall not affect the right of either party to seek such relief or take such steps as it considers
1042
necessary to protect its interest.
1043
1044
(v) Either party may advise the Tribunal that they have agreed to mediation. The arbitration procedure shall
1045
continue during the conduct of the mediation but the Tribunal may take the mediation timetable into account
1046
when setting the timetable for steps in the arbitration.
1047
1048
(vi) Unless otherwise agreed or specified in the mediation terms, each pParty shall bear its own costs incurred
1049
in the mediation and the parties shall share equally the mediator’s costs and expenses.
1050
1051
(vii) The mediation process shall be without prejudice and confidential and no information or documents
1052
disclosed during it shall be revealed to the Tribunal except to the extent that they are disclosable under the
1053
law and procedure governing the arbitration.
1054
1055
(Note: The pParties should be aware that the mediation process may not necessarily Interrupt time limits.)
1056
1057
*Subclauses (a), (b), (c) and (d) are alternatives; indicate alternative agreed in Box 26.
1058
1059
If Box 26 in Ρart I is not appropriately filled in, subclause (a) of this Clause shall apply Subclause (e) shall
1060
apply in all cases except for alternative (b)
1061
1062
34.
Notice
1063
1064
AlI notices, requests and other communications required or permitted by any clause of this Charter Party
1065
shall be given in writing and shall be sufficiently given or transmitted if delivered by hand, email, express
1066
courier service or registered mail and addressed if to the Owners as stated in Box 30 or such other address
1067
or email address as the Owners may hereafter designate in writing, and if to the Charterers as stated in Box
1068
31 or such other address or email address as the Charterers may hereafter designate in writing. Any such
1069
communication shall be deemed to have been given on the date of actual receipt by the pParty to which it is
1070
addressed.
1071
Any notice or other communication sent to the Charterers by Kenzan Kaiun Co., Limited or Azalea Line, S.A.
1072
shall be deemed as having been sent by both Kenzan Kaiun Co., Limited end Azalea Line, S.A. Any notice or
1073
other communication sent by the Charterers to Kenzan Kaiun Co., Limited or Azalea Line, S.A. shall be
1074
deemed as having been sent to both Kenzan Kaiun Co., Limited and Azalea Line, S.A.
1075
1076
1077
35.
Partial Validity
1078
1079
If by reason of any enactment or judgment any provision of this Charter Party shall be deemed or held to be
Copyright © 2017 Norwegian Shipbrokers’ Association. All rights reserved.

PART II
BARECON 2017 STANDARD BAREBOAT CHARTER PARTY
1080
illegal, void or unenforceable in whole or in part, all other provisions of this Charter Party shall be unaffected
1081
thereby and shall remain in full force and effect.
1082
1083
36.
Entire Agreement
1084
1085
This Charter Party is the entire agreement of the parties, which supersedes all previsions written or oral
1086
understandings and which may not be modified except by a written amendment signed by both parties.
1087
1088
37.
Headings
1089
1090
The headings of this Charter Party are for identification only and shall not be deemed to be part hereof or be
1091
taken into consideration in the interpretation or construction of this Charter Party.
1092
1093
38.
Singular/Plural
1094
1095
The singular includes the plural and vice versa as the context admits or requires.
Copyright © 2017 Norwegian Shipbrokers’ Association. All rights reserved.

PART III
BARECON 2017 STANDARD BAREBOAT CHARTER PARTY
PROVISIONS TO APPLY FOR NEWBUILDING VESSELS ONLY
(OPTINAL, only applicable if 27 has been completed)
1096
1.
Specifications and Building Contract
1097
1098
(a)   The Vessel shall be constructed in accordance with the building contract between the Builders and the Owners
1099
including the specifications and plans incοrporated thereln (“Building Contract”). Τhe Owners shall provide
1100
the Charterers with a copy of the Building Contract to the extent relevant tο this Charter Party.
1101
1102
(b)   No variations shall be made to the Building Contract without the Charterer prior written consent. The
1103
Charterers shall be entitled to request change orders in accordance with the Building Cοntract. Any additional
1104
costs or consequences due to Charterers change orders shall be borne by the Charterers.
1105
1106
(c)   The Owners and the Charterers will liaise and cooperate in all matters regarding the construction of the Vessel
1107
and the Building Contract. The Charterers shall have the right to send their representative to the Builders’
1108
yard tο inspect the Vessel during its construction.
1109
1110
(d)   The Owners shall assign their guarantee rights under the Building Contract to the Charterers, if permitted. If
1111
not permitted, the Owners shall exercise their guarantee rights against the Builders for the benefit of the
1112
Charterers. The Charterers shall be obliged to accept such sums as the Owners are reasonably able to
1113
recover under the guarantee provisions of the Building Contract.
1114
1115
2.   Delivery and Cancellation
1116
1117
(a)   (i) Subject to the provisions of Clause 3 (Liquidated Damages) hereunder, the Charterers shall be obliged to
1118
accept the Vessel from the Owners, cοnstructed and delivered in accordance with the Building Contract and
1119
including buyers’ supplies, on the date of delivery by the Builders. The Charterers undertake that having
1120
accepted the Vessel they will not thereafter raise any claims against the Owners in respect of the Vessel’s
1121
performance or specification or defects, if any.
1122
1123
(ii) The date of delivery for purpose of this Charter shall be the date (the “Delivery Date”) when the Vessel is
1124
in fact delivered by the Builders to the owners in accordance with the Building Contrast whether that is before
1125
or after the scheduled delivery date under the Building Contract. The Owners shall be under no responsibility
1126
for any delay whatsoever in delivery of the Vessel to the Charterers under this Charter Party, except to the
1127
extent caused solely by the Οwners’ acts or omissions resulting in a default by the owners under the Building
1128
Contract. The Owners shall be responsible to the Charterers for any direct losses incurred by the Charterers,
1129
if the Vessel is not delivered to the Owners due solely to the Owners’ acts or omissions resulting in a default
1130
by the Owners under the Building Contract.
1131
1132
(iii)  The Owners and the Charterers shall on the Delivery Date sign a Protocol of Delivery and Acceptance
1133
evidencing delivery of the Vessel hereunder.   
1134
1135
(b)   (i) The Owners’ obligation to charter the Vessel to the Charterers hereunder is conditional upon delivery of
1136
the Vessel to the Owners by the Builders in accordance with the Building Contract.
1137
1138
(ii) If for any reason other than a default by the Owners under the Building Contract, the Builders become
1139
entitled under that Contract not to deliver the Vessel and exercise that right, the Owners shall be entitled to
1140
cancel this Charter Party by written notice to the Charterers.
1141
1142
(iii) If for any reason the Owners become entitled to cancel the Building Contract and exercise that right, the
1143
Owners shall be entitled to cancel this Charter Party by written notice to the Charterers. If, however, the
1144
Owners do not exercise their right to cancel the Building Contract, the Charterers shall be entitled to cancel
1145
this Charter Party by written notice to the Owners.
1146
1147
3.   Liquidated Damages
1148
1149
(a)   Any liquidated damages for physical defects or deficiencies and any costs incurred in pursuing a claim therefor
Copyright © 2017 Norwegian Shipbrokers’ Association. All rights reserved.

PART III
BARECON 2017 STANDARD BAREBOAT CHARTER PARTY
PROVISIONS TO APPLY FOR NEWBUILDING VESSELS ONLY
(OPTINAL, only applicable if 27 has been completed)
1150
shall be credited to the party stated in Box 27(iv) or if net filled in shall be shared equally between the parties.
1151
1152
(b)
Any liquidated damages for delay in delivery under the Building Contract and any costs incurred in pursuing
1153
a claim therefor shall be credited to the party stated in Box 27(v) or if not filled in shall be shared equally
1154
between the parties.
Copyright © 2017 Norwegian Shipbrokers’ Association. All rights reserved.

PART IV
BARECON 2017 STANDARD BAREBOAT CHARTER PARTY
PURCHASE OPTION
(OPTINAL, only applicable if Box 28 has been completed)
1155
See  Clause 45
1156
1.   The Charterers shall have an option to purchase the Vessel (the “Purchase Option”) exercisable on each of
1157
the dates stated below as follows:  
1158
 Date (state number οf months after delivery of the
Vessel)
 Purchase Price (the “Purchase Option Price”)
  
  
 
(months)
 
(amount and currency)
  
  
  
  
  
  
 
 
 
 
1159
 
 
1160
2.   To exercise their Purchase Option, the Charterers shall notify the Owners in writing not later than six (6)
1161
months prior to the relevant date stated in the table above. Such notification shall not be withdrawn or
1162
cancelled.  
1163
1164
3.   If the Charterers exercise their Purchase Option, the ownership of theVessel shalt be transferred to them on
1165
the relevant date. If such date is not Banking Day, the ownership of the Vessel shall be transferred on the
1166
next Banking Day, οn a strictly “as is/where is” basis, at the Charterers’ sole cost and expense.  
1167
1168
4.  The Owners shall obtain and provide the Charterers with such documents and take such actions as the
1169
Charterers may reasonably request to facilitate the sale and the registration of the Vessel under the flag
1170
designated by the charterers.   
1171
1172
5.  The Owners warrant that the Vessel at the time of transfer of ownership shall be free of any of Owners’
1173
encumbrance or mortgage and that they have not committed any act or omission which would Impair title to
1174
the Vessel.
1175
1176
6.   The Owners make no representation or warranty as to the seaworthiness, value, condition, design,
1177
merchantability or operation of the Vessel, or as to the quality οf the material, equipment or workmanship in
1178
the Vessels, or as to the fitness of the Vessel for any particular trade.
1179
1180
7.   In exchange fοr the transfer οf ownership οf the Vessel, the Charterers shall pay the Purchase Option Price
1181
to the bank account nominated by the Owners together with any unpaid charter hire and other amounts due
1182
and payable under this Charter Party.
1183
1184
8.   Upon payment and transfer of ownership in accordance with Clause 7 above, this Charter Party and all rights
1185
and obligations of the parties shall terminate without prejudice to all rights accrued due between the parties
1186
prior to the date of termination and any claim that either party might have.
Copyright © 2017 Norwegian Shipbrokers’ Association. All rights reserved.

PART V
BARECON 2017 STANDARD BAREBOAT CHARTER PARTY
PROVISIONS TO APPLY FOR VESSELS REGISTERED IN A BAREBOAT CHARTER REGISTRY
(OPTIONAL, only to apply if expressly agreed and stated in Box 29)
1187
1.   Definitions
1188
1189
“Barebοat Charter Registry” shall mean the registry stated in Βox 29(ii) whose flag the Vessel will fly and in
1190
which the Charterers are registered as the bareboat charterers during the period of this Charter Party.
1191
1192
“Underlying Registry” shall mean the registry stated in Box 29(i) in which the Owners of the Vessel are
1193
registered as Owners and to which jurisdiction and control of the Vessel will revert upon termination of the
1194
Βarebοat Charter registration.
1195
1196
2.   The Owners have agreed to and the Charterers shall arrange for the Vessel to be registered under the
1197
Bareboat Charter Registry. The Charterers shall be responsible for all costs thereof.
1198
1199
3.   Upon termination of this Charter Party for any reason whatsoever the Charterers shall immediately arrange
1200
for the deletion of the Vessel from the Bareboat Registry.
1201
1202
4.   In the event of the Vessel being deleted from the Βarebοat Charter Registry due to any defauIt by the Owners,
1203
the Charterers shall have the right to terminate this Charter forthwith and without prejudice  to any other claim
1204
they may have against the Owners under this Charter Party.
Copyright © 2017 Norwegian Shipbrokers’ Association. All rights reserved.

Exhibit 4.25B
Rider Clauses 39 to 55
 
to be deemed incorporated to the
 
Bareboat Charter Party
 
Dated 16 July 2024
 
(the “Charter”)
 
Between
 
 
Nakaza Shipping Company Inc. as Charterers
 
 Kenzan Kaiun Co., Limited and Azalea Line, S.A. as Owners
 
in respect of the vessel
 
 
 
MT “HULL H1515” tbn “P. MASSPORT”
39.
Delivery
 
(a)   This Charter Party constitutes the lease financing of the Vessel which is currently under construction under the Building Contract for the account of the Charterers, and to be
sold to the Owners as finance lessor under the MOA.
 
The Owners’ obligations to charter the Vessel to the Charterers here under are conditional upon (i) delivery of the Vessel to the Charterers by the Construction Seller under the
Building Contract and (ii) delivery of the Vessel by the Charterers to the Owners under the MOA.
If the Building Contract is cancelled, rescinded or otherwise terminated for any reason whatsoever or the Vessel is not delivered by the Construction Seller to the Charterers under
the Building Contract or is rejected by the Charterers under the Building Contract for any reason whatsoever, then the Charterers shall give written notice thereof to the Owners
and upon Owners’ receipt of such notice, the MOA and this Charter Party shall, save as hereafter provided, cease to have effect without any liability on the parties hereto and the
parties shall be released from all obligations, liabilities and responsibilities hereunder, save that initial registration of title to the Vessel and legal documentation cost for
documenting the lease and security to be Charterer’s account such cost not to exceed USD15,000.
 
The Charterers shall take delivery of the Vessel under this Charter Party immediately after delivery by the Charterers as sellers to the Owners as buyers under the MOA, and the
Owners shall deliver the Vessel to the Charterers under this Charter Party immediately after the Owners take delivery of the Vessel under the MOA.
 
In the event that the Vessel is not delivered under the MOA or the MOA is cancelled, terminated or rescinded for any reason, this Charter shall automatically terminate without any
liability between the parties hereunder and initial registration of title to the Vessel and legal documentation cost for documenting the lease and security to be Charterer’s account
such cost not to exceed USD15,000.
(b)  It is acknowledged that the Charterers shall, by way of purchase from the Owners or otherwise, at the time of delivery of the Vessel under this Clause 39, own any bunkers,
unused lubricating and hydraulic oils and greases in storage tanks an unopened drums and unused stores and provisions (hereinafter referred to as the “Bunkers”) remaining on
board the Vessel on the Delivery Date and as a result the Owners and the Charterers will not settle the Bunkers at the time of delivery of the Vessel under this Charter Party.
 
(c) (USD44,250,000*(1 month CME TERM SOFR at the time of remittance + 2.0%)/360) (the “Remittance Interest Cost”) from the day of remittance of the fund till the closing date
to be covered by Charterers provided that no Remittance Interest Cost shall be payable if the delay is due to Owners’ default, negligence or wilful misconduct.
 

The extra interest cost, if any, shall be paid together with the second hire payment due under the terms of this Charter Party.
 
(d) The Charterers undertake to assign all their rights, benefits and remedies under article IX (Warranty of Quality) of the Building Contract and any guarantee granted to the
Charterers by any supplier or vendor of any equipment (together, a “Builder’s Warranty”) and (ii) on the Delivery Date, provided that the Assignments of Guarantees can be
agreed upon, notify the Construction Seller and, as soon as practicably possible thereafter, any such supplier or vendor of such assignments (the “Assignments of Guarantees”).
 
In respect of any repairs, replacements or defects which appear within the first 12 months from delivery by the Construction Seller or within such other period as may be stipulated
in a guarantee of any supplier, the Owners shall, as assignees of the rights of the Charterers pursuant to the Assignments of Guarantees, issue a power of attorney in favour of
the Charterers to authorize the Charterers, up to but not after the occurrence of a Charterers’ Event of Default, to compel the Construction Seller or any supplier or vendor to repair,
replace or remedy any defects or to recover from the Construction Seller or any supplier any expenditure incurred in carrying out such repairs, replacements or remedies.
Notwithstanding the Assignment of Guarantees, the Owners shall have no obligation to enforce or follow up on any guarantee or warranty thereby assigned, and it shall be the
Charterers’ sole responsibility to enforce such guarantees, liaise and make arrangements with the Construction Seller and relevant supplier and/or vendor as they see fit, all at their
own expense.
 
Any liquidated damages for physical defects or deficiencies shall be deemed to be earnings for the purposes of this Charter and shall be used for the repair of any defects or
deficiencies or for the compensation of the Charterers in respect of all documented expenses and costs incurred by the Charterers in respect thereof.
 
The costs of pursuing a claim or claims against the Construction Seller or any supplier under this Clause (including any liability to the Construction Seller) shall be borne by the
Charterers and the Charterers shall fully indemnify the Owners for any liability for which the Owners may be liable pursuant to such claim or claims.
 
Any sum recovered pursuant to a Builder’s Warranty of over $500,000 shall be paid to the Owners but so that:
 
(i)          the sum received by the Owners shall be paid over to the Charterers upon the Charterers providing evidence satisfactory to the Owners that the repairs in respect of which
such payment have been completed and that all repair accounts and other liabilities connected therewith have been paid by the Charterers; and
 
(ii)          with the prior written consent of the Owners, be paid on account of the repairs which are being carried out; and any other such sum recovered pursuant to a Builder’s
Warranty shall be paid to the Charterers which shall apply it in completing all repairs in respect of which such money was received.
40.
Conditions for delivery
 
 
a)
Prior to delivery of the Vessel under this Charter Party, each of the Parties shall exchange the following documents:
 
 
(I)
a copy of this Charter Party executed by each Party;
 
 
(ii)
a copy of the memorandum and articles of association (or equivalent documents) (and all amendments thereto) of the Owners and the Charterers;

 
(iii)
a copy of certificate of good standing or equivalent, stating all directors of the Owners and the Charterers dated not earlier than thirty (30) Banking Days prior to the
date of delivery of the Vessel to the Owners, with the original to follow as soon as possible after delivery of the Vessel, to the Owners;
 
(iv)
A PDF copy of one (1) Resolutions of the Board of Directors of the Charterers, authorising, approving and ratifying the BBCP and the MOA and any further addenda
thereto, authorising nominated individuals as signatories of and empowering these and/or other individuals to execute the Power of Attorney referred to below, the
Bill of Sale and all other documents required for the sale and delivery of the Vessel to the Owners, duly executed on behalf of the Charterers;
 
(v)
A PDF copy of one (1) Resolutions of the Board of Directors of the Charterers’ Guarantor, authorising, approving and ratifying (i) the MOA any further addenda
thereto, (ii) the BBCP and any further addenda thereto, (iii) the Performance Guarantee, authorising nominated individuals as signatories of and empowering these
and/or other individuals to execute the Power of Attorney duly executed on behalf of the Charterers’ Guarantor;
 
 
(vi)
A PDF copy of one (1) Resolutions of the Board of Directors of the Owners, authorising, approving and ratifying the BBCP and the MOA and any further addenda
thereto, authorising nominated individuals as signatories of and empowering these and/or other individuals to execute the Power of Attorney referred to below, the
Bill of Sale and all other documents required for the sale and delivery of the Vessel to the Owners, duly executed on behalf of the Owners;
 
 
(vii)
A PDF copy of one (1) Resolutions of the Board of Directors of the Owners’ Guarantor, authorising, approving and ratifying (i) the MOA and any further addenda
thereto, (ii) the BBCP and any further addenda thereto, (iii) the Performance Guarantee, authorising nominated individuals as signatories of and empowering these
and/or other individuals to execute the Power of Attorney duly executed on behalf of the Owners’ Guarantor:
 
(viii)
A PDF copy of one (1) Power of Attorney in favor of the persons who are to act on behalf of Charterers and Charterers’ Guarantors in connection with above (vi) and
(vii), with the original to follow as soon as possible after delivery of the Vessel to the Owners:
 
 
(ix)
A PDF copy of one (1) Power of Attorney in favor of the persons who are to act on behalf of Owners and Owners• Guarantors in connection with above (iv) and (v),
with the original to follow as soon as possible after delivery of the Vessel to the Owners;
 
(x)
the Guarantees and QEL referred to in Clause 43, duly executed; and
 
 
(xi)
a copy of the protocol of delivery and acceptance in relation to the Vessel executed by the Owners and the Charterers:
 
(xii)
such other documents as each of the.Owner and Charterer may reasonably require,
 
41.
Vessel’s condition on delivery
 
The Vessel shall be delivered under this Charter Party in the same condition and with the same equipment, inventory and spare parts as she is delivered to the Owners under the
MOA. The Charterers know the Vessel’s condition at the time of delivery, and expressly agree that the Vessel’s condition as delivered under the MOA is acceptable and in
accordance with the provisions of this Charter Party. The Vessel shall be delivered to the Charterers under this Charter Party strictly “as is/where is”. The Owners neither make nor
shall be deemed to have made or given any representation or warranty whether statutory or otherwise and whether express or implied as to the seaworthiness, value, condition,
quality, merchantability, design, description, operation, suitability or fitness for use for any purpose of the Vessel (with everything belonging to her), or as to the absence of any
latent or other defects, whether or not discoverable, or as to the absence of any obligations based on strict liability in tort, which are hereby excluded (hereinafter collectively,
referred to as the “Vessel’s Conditions”).
 

The Charterers hereby acknowledge and agree that they have not relied upon any representation, condition or warranty, whether statutory or otherwise and whether express or
implied as to any Vessel’s Conditions, in entering into this Charter Party, and accordingly the Charterers shall have no claim against the Owners under this Charter Party or
otherwise whatsoever in relation to the Vessel’s Conditions.
 
42.
Survey and Inspection on re-delivery of the Vessel
 
 
(a)
Condition of Vessel
 
The Vessel with everything belonging to her shall be at the Charterers’ risk and expense until she is re- delivered to the Owners, but subject to the terms and
conditions of this Charter Party she shall be re- delivered and taken over as she was at the lime of the survey(s) in accordance with this Clause 42, fair wear and
tear excepted.
 
(b)
Survey:
 
Not earlier than 45 days or later than 30 days (or if not possible then as soon as the Vessel becomes available) before re-delivery of the Vessel, the Owners and the Charterers shall
jointly agree upon the appointment of a surveyor for the purpose of determining the condition of the Vessel at the time of re-delivery hereunder.
The surveyor, whose decision shall be final and binding on both Parties, shall report in writing, specifying all items, if any, which have not been properly maintained in accordance
with the terms and conditions of the Charter and the work required to repair such deficiencies.
The costs of such a surveyor shall be equally shared between the Parties. In the event that the parties are not able to agree upon a single surveyor, each shall appoint their own
and the two surveyors so appointed shall conduct a joint survey of the Vessel. In such an event, each Party shall pay their own appointed surveyor’s costs.
The survey shall be carried out at the point of re-delivery and in Charterers time and shall not interfere with the operation of the Vessel. Any works required as a result of such
survey shall be carried out by Charterers prior to their re-delivery of the Vessel. In the event that two surveyors so appointed disagree, the matter shall be referred to arbitration in
accordance with Clause 33.
 
This clause shall not apply if Charterers exercise their purchase option as set out in Clause 45 or if Owners exercise their Put Option as set out in Clause 46.
 
(c)
Underwater Inspection:
In connection with the redelivery of the Vessel under the Charter, the Vessel shall not be dry-docked unless required by the Classification Society. In lieu of dry-docking, Owners
shall have the right to appoint a diver acceptable to the Classification Society to undertake an underwater inspection at a convenient port with due consultation between Owners
and Charterers. Such divers’ inspection shall be carried out at Owners’ expense (unless damage affecting the class is found, in which case the Charterers shall bear the cost) and
without interference to the Vessel’s normal operation.
 
Should such underwater inspection reveal damages that affect the class of the Vessel whereby such damage repairs cannot be made to the Vessel without dry-docking and the
Classification Society will not grant an extension, then Vessel is to be dry-docked as soon as possible by Charterers to repair such damages to the Classification Society’s
satisfaction at Charterers’ time and expense.

If in the opinion of the Classification Society the damages do not necessitate immediate dry-docking, then the Classification Society shall issue a certificate showing the extent
and place of damage and Charterers shall repair same to the satisfaction of the Classification Society at next dry-docking, provided that such dry-docking is within the Charter
Period. If the next Classification Society dry-docking is after the re-delivery of the Vessel under this Charter Party, the Charterers shall in their option (i) repair such damages before
redelivery of the Vessel hereunder or (ii) provide the Owners with an agreed lump sum, (the Charterers and the Owners shall each select a reputable shipyard in the redelivery
range and obtain from such shipyard a quotation for the cost of repairs of the damage. The estimated cost of repairs shall be refined as the average of the two quotations obtained
from the two shipyards), a first class bank guarantee or sum a cash deposit to be provided, in the Charterers’ option, covering the expected costs of such repairs.
 
This Clause 42 shall not apply if the Charterers exercise their Purchase Option as set out in Clause 45 or the Owners exercise their Put Option as set out in Clause 46.
43.
Owners’ Assignment, Performance Guarantee and Quiet Enjoyment Letter
The Owners may not assign, transfer or novate their rights and in the case of a novation, obligations under this Charter without the prior written consent of the Charterers.
Subject to the Mortgagee providing a quiet enjoyment letter, the Owners may assign their rights under this Charter Party to the Mortgagee, including but not limited to
assignments of earnings and assignment of this Charter.
 
The Charterers are entitled to require a quiet enjoyment letter (the “QEL”) from the Mortgagee or such other financiers of the Owners, substantially in the form attached hereto as
Appendix D, which confirms that the Charterers shall have free use of the Vessel under this Charter Party (including the right to exercise the Purchase Option) while there has
occurred no Charterers’ Event of Default which is continuing under this Charter Party. The Owners shall procure that the Mortgagee or (as the case may be) such other financiers
will provide the quiet enjoyment letter to the Charterers as a condition precedent to the Owners’ entry into the Financial Instrument on or before the Delivery Date.
The performance of the Charterers hereunder shall be guaranteed by Performance Shipping Inc. whereas the performance of the Owners shall be guaranteed by Yano Kaiun Co.,
Ltd. (each, a “Guarantee”) The guarantees shall be In the format attached hereto as appendix B.
 
Upon delivery of the Vessel under this Charter Party, the Owners and the Charterers shall execute an assignment of insurances with the Owners’ financier in a form and substance
acceptable to each party thereto (but each acting reasonably). under which (inter alia) the Owners and the Charterers assign and agree to assign any and all their respective
interests on insurance proceeds in respect of the Vessel to the extent as required by this Charter Party.
 
44.
Transfer of the Vessel
 
(a)
Any change of ownership of the Vessel or of the legal and/or beneficial ownership of the Owners during the Charter Period shall require the Charterers’ prior written
approval which Charterers shall be at full discretion whether to grant or decline.
 
(b)
Each of the Owners and Charterers shall during the Charter Period be entitled to assign their position under the Charter Party to another third party entity. Such right shall
be subject to (i) the prior written consent of the other Party, such consent not be unreasonable withheld, and (ii) that the guarantees granted by Performance Shipping Inc.
and Yano Kaiun Co.. Ltd. shall continue to remain in full force and effect irrespective of the said assignment(s) under the Charter. Each Party shall bear their own costs
related to such assignment.
 

(c)
If, as a result of a change in law relating specifically to the circumstances of the Charterers and/or the Owners after the date of this Charter Party there would be material
adverse economic consequences to the Charterers of them continuing to perform their obligations under this Charter Party the Charterers shall have the option, to novate
this Charter Party to an affiliate provided always that, notwithstanding such novation, this Charter Party would continue on identical terms (save for logical, consequential
or mutually agreed amendments) and Performance Shipping Inc. shall remain jointly and severally liable with such affiliate to the Owners for performance of all obligations
by such affiliate pursuant lo this Charter Party after such novation.
 
The Charterers agree and undertake to enter into (and procure that such affiliate and Performance Shipping Inc. enter into) or deliver lo the Owners any such documents as
the Owners (at their sole discretion) shall reasonably require in connection with such novation, including but not limited to such additional security documents and legal
opinions as the Owners may reasonably require. Any reasonable and properly documented costs or expenses (including but not limited to legal costs) in relation to such
novation and any conditions imposed by the Owners in giving their consent shall be borne by the Charterers.
(d)
In the event of the early termination of this Charter Party by the Owners due to a Charterers’ Event of Default which is continuing or due to any of the circumstances
described in Clause 31(d) occurring to the Charterers, unless the Charterers have paid to the Owners the full amount of the then Outstanding Principal plus any other sums
due from the Charterers to the Owners under this Charter Party, the Owners shall be entitled to sell the Vessel, whereupon they shall retain from the relevant proceeds an
amount equal to the then Outstanding Principal plus any other sums then due from the Charterers to the Owners under this Charter Party and, thereafter, pay the excess to
the Charterers.
 
45.
Charterers’ Purchase Option
 
The Charterers or its nominee shall have an option to purchase the Vessel from the Owners commencing from the date falling twenty-four months after the Delivery Date (the
“Purchase Option Commencement Date”) for the duration of the Charter Period (the “Purchase Option”) at the following prices (the “Purchase Option Price”) or pro rata for the
current year:
 
The Purchase Option Price to be paid to the Owners upon delivery of the Vessel:
The Purchase Option Price = A- [ (A-B) / 365 x C]
Where:
 
A: the amount indicted below of the end of the year immediately prior to the applicable delivery date;
B: the amount indicted below of the end of the year of such delivery date; and
C: the actual number of days from the beginning of the year to which the delivery date belongs:
 
(i)
at a price of the Outstanding Principal x 102.00% at the end of year 2 of the Charter Period;
(ii)
at a price of the Outstanding Principal x 101.65% at the end of year 3 of the Charter Period;
(iii)
at a price of the Outstanding Principal x 101.20% at the end of year 4 of the Charter Period;
(iv)
at a price of the Outstanding Principal x 100.75% at the end of year 5 of the Charter Period;
(v)
at a price of the Outstanding Principal plus USD40,000 at the end of year 6 of the Charter Period;
(vi)
at a price of the Outstanding Principal plus USD40,000 at the end of year 7 of the Charter Period;
(vii)
at a price of the Outstanding Principal plus USD40,000 at the end of year 8 of the Charter Period.
 
If a breach by the Owners in the performance of any of their obligations under this Charter Party occurs and is continuing, then the Charterers may exercise their Purchase Option
earlier than the Purchase Option Commencement Date, provided that in the event the Charterers exercise their Purchase Option and the relevant breach is subsequently remedied,
such remedy shall not affect the exercise of the Purchase Option. The Purchase Option Price shall in such event be set at as follows or pro-rata for the current year:
 

at a price of USD 44,250,000.00 at the end of year 0 of the Charter Period;
at a price of USD 41,647,059.00 at the end of year 1 of the Charter Period;
Registration cost, and bank related costs including lifting charge and escrow agent fees, if any, shall be for the Charterer’s account; however such cost not to exceed USD 10,000.
 
The Charterers must give a minimum of 75 (seventy-five) calendar days’ notice to the Owners of their intention to buy the Vessel. The Purchase Option Price to be paid to the
Owners upon delivery of the Vessel is in accordance with clause 3 of the memorandum of agreement attached to this Charter Party as Appendix A. The Vessel shall be delivered as
soon as possible after expiry of the 75 (seventy-five) days’ notice and Owners undertake to render all necessary assistance in order to achieve this. Once the Purchase Option has
been exercised by Charterers, they may not withdraw same.
The Charterers or its nominee shall accept the Vessel on an “AS IS, WHERE IS” basis and the Owners shall take such steps to obtain and furnish such documents as may
reasonably be required by the Charterers (or their nominee) in order to transfer the legal and beneficial title and interest in the Vessel to the Charterers (or their nominee) (including
without limitation a bill of sale in respect of the Vessel executed and (if required) notarized) and take such other actions as the Charterers may reasonably request in order to
facilitate the sale and re-registration of the Vessel under such flag as the Charterers may designate.
With respect to such sale, the Owners warrant that the Vessel at such sale shall be free of any encumbrances, mortgages, charters, maritime liens and any other debts whatsoever
(in each case, created by the Owners) created or incurred by the Owners and that the Owners have not committed any act or omission which would impair title to the Vessel and
Owners hereby agree to indemnify and hold harmless Charterers in respect of any and all damages, costs and expenses whatsoever resulting from any breach of such warranty.
Upon completion of such purchase of the Vessel as set out in this Clause 45 or in the subsequent Clause 46, this Charter Party and all further rights and obligations of the Parties
hereunder (except for indemnities and other obligations that by their nature should survive the termination of this Charter Party) shall terminate.
 
46.
Owners’ Put Option
 
The Owners have the option to sell the Vessel back to the Charterers or its nominee at the end of the eight (8) year of this Charter Party. In case Charterers have not exercised their
Purchase Option75 (seventy-five) calendar days before the end of the Charter Period at the latest, the Owners may exercise their Put Option, in which case the Charterer shall
purchase the Vessel for the Outstanding Principal plus USD 40,000 (“Put Option Fee”). The Owners must give a minimum of 60 (sixty) days’ notice of their intention to sell the
Vessel. The Put Option Price shall be paid to the Owners upon delivery of the Vessel, which shall take place on the last day of the Charter Period.
 
The Charterers or its nominee shall accept the Vessel on an “AS IS, WHERE IS” basis and the Owners shall, take such steps to obtain and furnish such documents as may
reasonably be required by the Charterers (or their nominee) in order to transfer the legal and beneficial title and interest in the Vessel to the Charterers (or their nominee) (including
without limitation a bill of sale in respect of the Vessel executed and (if required) notarized) and take such other actions as the Charterers may reasonably request in order lo
facilitate the sale and re-registration of the Vessel under such flag as the Charterers may designate.

With respect to such sale, the Owners warrant that the Vessel at such sale shall be free of any encumbrances, mortgages, charters, maritime liens and any other debts whatsoever
(in each case, created by the Owners) created or incurred by the Owners and that the Owners have not committed any act or omission which would impair title to the Vessel and
Owners hereby agree to indemnify and hold harmless Charterers in respect of any and all damages, costs and expenses whatsoever resulting from any breach of such warranty.
Registration cost, and bank related costs including lifting charge and escrow agent fees, if any, shall be for the Charterer’s account; however such cost not to exceed USD 10,000.
 
47.
Insurance
 
(a)
The Charterers undertake with the Owners that throughout the Charter Period:
 
(i)
without prejudice to their obligations under Clause 17 hereof, they will keep the Vessel insured on such terms as widely accepted in the commercial shipping market
and shall be reasonably acceptable to the Owners and the Mortgagee with such insurers (including P&I and war risks associations) as shall be reasonably
acceptable to the Owners with deductibles reasonably acceptable to the Owners and that any P&I association which is a member of the International Group of P&I
Clubs and H&M underwriters with security rating A. The Charterers shall advise the Owners of their current H&M underwriters for the Owners’ approval, such
approval not to be unreasonably withheld or delayed (it being agreed and understood by the Charterers that there shall be no element of self-insurance or insurance
through captive insurance companies without the prior written consent of the Owners);
 
(ii)
the policies in respect of the insurances against fire and usual marine risks and the policies or entries in respect of the insurances against war risks shall, in each
case, be endorsed to the effect that payment of a claim for a Total Loss will be made to the Owners (or the Mortgagees as assignees thereof) (who shall upon the
receipt thereof apply the same in the manner described in Clause 47(e) hereof);
 
(iii)
the Charterers shall procure that duplicates of all cover notes, policies and certificates of entry shall be furnished to the Owners for their custody, upon request;
(iv)
the Charterers shall procure that the insurers and the war risk and protection and indemnity associations with which the Vessel is entered shall:
 
(A)
provide the Owners and (if applicable) the Mortgagee with a letter or letter of undertaking in standard market form, and
 
(B)
supply to the Owners such information in relation to the insurances effected, or to be effected, with them as the Owners may from time to lime reasonably
require; and
 
(v)
the Charterers shall procure that the policies, entries or other instruments evidencing the insurances are endorsed to the effect that the insurers shall give to the
Owners not less than fourteen (14) days prior written notification of any amendment, suspension, cancellation or termination of the insurances, unless subject to any
automatic termination/cancellation of cover provisions in the relevant insurances, in which event, if such insurances are automatically terminated/cancelled, Owners
shall be advised promptly and Charterers shall immediately procure re-instatement or replacement insurances of those terminated/cancelled insurances.

(b)
Notwithstanding anything to the contrary contained in Clauses 17 and 47 (b) hereof, the Vessel shall be kept insured during the Charter Period in respect of marine and war risks
on hull and machinery basis for not less than the total insured value (H&M value, Hull Interest and freight interest) specified in column (b) in the table set out below in respect of
the one-yearly period during the Charter Period specified in column (a) (on the assumption that the first such period commenced on the Delivery Date) against such amount
(hereinafter referred to as the “Minimum Insured Value”):
 (a)
 (b)
 Year
 Minimum Insured Value
 1
 48,675,000
 2
 45,811,765
 3
 42,948,529
 4
 40 085,294
 5
 37,222,059
 6
 34 358,824
 7
 31,495,588
 8
 28,632,353
(c)
If the Vessel becomes a Total Loss or becomes subject to Compulsory Acquisition, the chartering of the Vessel to the Charterers hereunder shall cease and the Charterers shall:-
 
(i)
immediately pay to the Owners all hire, and any other amounts, which have fallen due for payment under this Charter Party and have not been paid as at up to the date on
which the Total Loss or Compulsory Acquisition occurred as described below (the “Date of Loss”) together with interest thereon as set out in Clause 15 (g) and shall cease
to be under any liability to pay any hire, but not any other amounts, thereafter becoming due and payable under this Charter Party. All hire and any other amounts prepaid
by the Charterers relating to the period after the Date of Loss, and any insurance proceeds received by the Owners and/or their mortgagee after payment by the Charterers
as aforesaid, shall be forthwith refunded by the Owners and any hire paid in advance to be adjusted/reimbursed.
 
(ii)
For the purpose of ascertaining the Date of Loss:-
 
(A)
an actual total loss of the Vessel shall be deemed to have occurred at noon (London time) on the actual date the Vessel was lost but in the event of the date of the
loss being unknown the actual total loss shall be deemed lo have occurred at noon (London time) on the date on which it is acknowledged by the insurers to have
occurred;
 
 
(B)
a constructive, compromised, agreed, or arranged total loss of the Vessel shall be deemed to have occurred at noon (London time) on the date that notice claiming
such a total loss of the Vessel is given to the insurers, or, if the insurers do not admit such a claim, at the date and time at which a total loss is subsequently admitted
by the insurers or the date and time adjudged by a competent court of law or arbitration tribunal to have occurred. Either the Owners or, with the prior written
consent of the Owners (such consent not to be unreasonably withheld), the Charterers shall be entitled to give notice claiming a constructive total lose but prior to
the giving of such notice there shall be consultation between the Charterers and the Owners and the Party proposing to give such notice shall be supplied with all
such information as such Party may request; and
 
 
(C)
Compulsory Acquisition shall be deemed to have occurred at the time of occurrence of the relevant circumstances described in Clause 30(b) hereof.
 
(d)
(i) All moneys up to the Minimum Insured Value payable under the insurances effected by the Charterers pursuant to Clauses 17 and 47, or other compensation, in respect of a
Total Loss or pursuant to Compulsory Acquisition of the Vessel shall be received in full by the Owners (or the mortgagees as assignees thereof) and applied by the Owners (or, as
the case may be, the mortgagees) as follows:        
 

FIRSTLY, in payment of all the Owners’ or the Charterers’ reasonable and properly incurred costs incidental lo the collection thereof,
 
SECONDLY, in or towards payment to the Owners (to the extent that the Owners have not already received the same in full) of a sum equal to the Purchase Option Price as per the
table in Clause 45 immediately above, for the year in which the Date of Loss occurs and which shall be calculated pro rata per diem,
 
THIRDLY, towards any other applicable sums due from the Charterers to the Owners under this Charter Party, and
 
FORTHLY, in payment of any surplus to the Charterers by way of a rebate of hire and compensation for early termination.
If, in accordance with the terms of the relevant Loss Payable Clause, any part of the insurance proceeds or compensation payable under this sub-clause (d)(i) is received and
applied by the mortgagees as assignees toward payment of the indebtedness due to such mortgagees by the Owners pursuant to the Financial Instrument, then the remainder of
such insurance proceeds shall be distributed between the Owners and the Charterers in accordance with the order set out in this sub-clause (d)(i) above and, for the purposes of
such distribution, the afore-mentioned part of the insurance proceeds received by the mortgagees shall reduce the afore-mentioned sums payable to the Owners accordingly.
Under no circumstances will the sum of the insurance proceeds or compensation received under this sub-clause (d)(i) and applied by the mortgagees as assignees toward
payment of the indebtedness due to such mortgagees by the Owners pursuant to the Financial Instrument, exceed the aggregate sum payable to the Owners in accordance with
this sub-clause (d)(i) above.
 
(ii) Any moneys in excess of the Minimum Insured Value payable under the insurances effected by the Charterers pursuant to Clauses 17 and 47, or other compensation, in respect
of a Total Loss or pursuant to Compulsory Acquisition of the Vessel shall be received in full by the Charterers.
 
(e)
In respect of partial losses, any payment by underwriters not exceeding USD 500,000 shall be paid directly to the Charterers who shall apply the same for the repair, salvage or
other charges involved or as a reimbursement if the Charterers fully repaired the damage to the satisfaction of the Owners and paid all of the salvage or other charges in respect of
which payment is made. Any moneys in excess of USD 500,000 payable under such insurance (other than in respect of a Total Loss) shall be paid to the Charterers subject to the
prior written consent of the Owners or the Owners’ mortgagee but such consent shall not be unreasonably withheld or delayed. In the absence of such prior written consent the
money shall be paid to the Owners or the Owners’ mortgagee.
 
(f)
The provisions of Clauses 17 and 47 hereof shall not apply in any way to the proceeds of any additional insurance cover effected by the Owners and / or the Charterers for their
own account and benefit.
 
(g)
The Charterers shall promptly notify the Owners of:
 
(i)
any accident to the Vessel involving repairs the cost of which exceeds USD500,000 or the equivalent in any other currencies; or
 
 
(ii)
any occurrence in consequence whereof the Vessel has become a Total Loss or Compulsory Acquisition.          

48.
Inconsistency
In case of any inconsistency between (i) the standard terms of this Charter Party and (ii) the amendments and Rider 39 to 53 (inclusive), the latter shall prevail.
 
49.
Loan Outstanding for Interest Portion
 
In the charter hire structure set out in Box 17, the Variable Hire shall be calculated as follows:
 
(X) x (Y) x (Z) + (A)
 
 
Where:
 
X
 =
Amount of the loan outstanding (as set out in the table below)
 
Y
 =
(Margin) + (1-month CME TERM SOFR)
 
Z
 =
Number of days during the hire period in question
 
A
 =
360 days.
The 1-month CME TERM SOFR to be used is the one published by CME GROUP five (5) Banking Days prior to the hire payment due date. Should the 3-month CME TERM SOFR
published by CME GROUP turn negative, then zero (0) to be applied in calculation of hire payment.
In case that CME TERM SOFR ceases to be available, the Owners shall reasonably designate the alternative interest rate after consultation with the Charterers but such rate shall
not exceed the cost to the Mortgagee of funding the outstanding loan balance on the Vessel from any reasonable source and such rate so applied shall only apply for so long as
CME TERM SOFR remains unavailable.
Loan Outstanding
(USD)
 
 
(USD)
 
1st Year
1st Month
44 250 000
 
2nd Year
13th Month
41 647 059
1st Year
2nd Month
44 033 088
2nd Year
14th Month
41 430 147
1st Year
3rd Month
43 816 176
2nd Year
15th Month
41 213 235
1st Year
4th Month
43 599 265
2nd Year
16th Month
40 996 324
1st Year
5th Month
43 382 353
2nd Year
17th Month
40 779 412
1st Year
6th Month
43 165 441
2nd Year
18th Month
40 562 500
1st Year
7th Month
42 948 529
2nd Year
19th Month
40 345 588
1st Year
8th Month
42 731 618
2nd Year
20th Month
40 128 676
1st Year
9th Month
42 514 706
2nd Year
21st Month
39 911 765
1st Year
10th Month
42 297 794
2nd Year
22nd Month
39 694 853
1st Year
11th Month
42 080 882
2nd Year
23rd Month
39 477 941
1st Year
12th Month
41 863 971
2nd Year
24th Month
39 261 029
3rd Year
25th Month
39 044 118
4th Year
37th Month
36 441 176
3rd Year
26th Month
38 827 206
4th Year
38th Month
36 224 265
3rd Year
27th Month
38 610 294
4th Year
39th Month
36 007 353
3rd Year
28th Month
38 393 382
 
4th Year
40th Month
35 790 441
3rd Year
29th Month
38 176 471
4th Year
41st Month
35 573 529
3rd Year
30th Month
37 959 559
4th Year
42nd Month
35 356 618
3rd Year
31st Month
37 742647
4th Year
43rd Month
35 139 706
3rd Year
32nd Month
37 525 735
4th Year
44th Month
34 922 794
3rd Year
33th Month
37 308 824
4th Year
45th Month
34 705 882
3rd Year
34th Month
37 091 912
4th Year
46th Month
34 488 971
3rd Year
35th Month
36 875 000
4th Year
47th Month
34 272 059
3rd Year
36th Month
36 658 088
4th Year
48th Month
34 055 147
5th Year
49th Month
33 838 235
6th Year
61st Month
31 235 294
5th Year
50th Month
33 621 324
6th Year
62nd Month
31 018 382
5th Year
51st Month
33 404 412
 
6th Year
63rd Month
30 801 471
5th Year
52nd Month
33 187 500
6th Year
64th Month
30 584 559
5th Year
53rd Month
32 970 588
 
6th Year
65th Month
30 367 647
5th Year
54th Month
32 753 676
 
6th Year
66th Month
30 150 735
5th Year
55th Month
32 536 765
 
6th Year
67th Month
29 933 824
5th Year
56th Month
32 319 853
6th Year
68th Month
29 716 912
5th Year
57th Month
32 102 941
 
6th Year
69th  Month
29 500 000
5th Year
58th Month
31 886 029
6th Year
70th Month
29 283 088
5th Year
59th Month
31 669118
6th Year
71st Month
29 066 176
5th Year
60th Month
31 452 206
6th Year
72nd Month
28 849 265
7th Year
73rd Month
28 632 353
 
8th Year
85th Month
26 029 412
7th Year
74th Month
28 415 441
8th Year
86th Month
25 812 500
7th Year
75th Month
28 198 529
8th Year
87th Month
25 595 588
7th Year
76th Month
27 981 618
8th Year
88th Month
25 378 676
7th Year
77th Month
27 764 706
8th Year
89th Month
25 161 765
7th Year
78th Month
27 547 794
8th Year
90th Month
24 944 853
7th Year
79th Month
27 330 882
8th Year
91st Month
24 727 941
7th Year
80th Month
27 113 971
8th Year
92nd Month
24 511 029
7th Year
81st Month
26 897 059
8th Year
93rd Month
24 294 118
7th Year
82nd Month
26 680 147
8th Year
94th Month
24 077 206
7th Year
83rd Month
26 463 235
8th Year
95th Month
23 860 294
7th Year
84th Month
26 246 324
8th Year
96th Month
23 643 382
 
 
 

50.
Disclosure
The Charterers shall supply the Owners as soon as reasonably practicable, but in any event (i) within one hundred and eighty (180) days after the end of each of its financial
years, the audited financial statements of Performance Shipping Inc. for that financial year.
51.
Money laundering, sanctions, anti-corruption:
 
Notwithstanding any other clause in this Charter, each Party warrants, represents and undertakes to the other Party on a continuing basis:
 
(Money laundering):
that it, and parties acting on its behalf in relation to this Charter, shall observe and abide with, including but not limited any law, official requirement or other regulatory measure or
procedure implemented to combat money laundering as defined in any laws or regulations applicable to such Party, and
 
(Sanctions):
that it, nor any of their directors and, executive managers and ultimate owners. are or will become sanctioned by USA, the UK, Japan, the European union or the United Nations or
any other nation or governmental body or organization relevant  to the trading of the Vessel under this Charter to the extent that non-compliance by it would result in an actual
breach of any applicable sanctions, and
 
that it, its directors and executive managers, has not been a party, directly, to any contract or conduct in contravention of any applicable sanctions legislation or directives of
either the USA, the UK, Japan, the European union or the United Nations or any other nation or governmental body or organization relevant to the trading of the Vessel under this
Charter to the extent that non-compliance by it would result in an actual breach of any applicable sanctions. Moreover, the Party is acting for itself only and is not acting on behalf
of any other individual or corporation, and
(Anti-corruption):
that it, its directors, performance guarantors, executive managers and ultimate owners of the Charterers; shall comply with all applicable anti-corruption laws, regulations and
contractual provisions, including without limitation the US Foreign Corrupt Practices Act and the UK Bribery Act, and
that it, its directors, performance guarantors, executive managers and ultimate owners of the Charterers; shall not, directly or through third parties, in relation to the Charter, give,
promise or attempt to give, or approve or authorize the giving of, anything of value to any person, any public official or any entity for the purpose of:
 
-
securing any improper advantage for either Party; 
 
-
inducing or influencing anyone improperly to take action or refrain from taking action in order for either Party to obtain or retain business, or to secure the direction of
business to either Party;
 
-
inducing or influencing anyone to use his/her influence with any Government or public international organization for such purpose; and.

that:
 
-
to the best of its knowledge, none of its directors, executive managers or owners nor the directors, executive managers and owners of affiliated companies; have carried out
any of the actions described above;
 
-
all remuneration received under this Charter is solely intended as compensation for the services expressly provided under this Charter, including the Parties’ related
documented costs and expenses, and that it is not receiving remuneration for any other purpose; and,
 
-
neither the Party, nor any of its affiliated companies, directors, executive managers or owners shall use any part of said remuneration for any purpose prohibited under this
Clause 51.
(Indemnification):
if such calling constitute a breach of sanctions, then Charterers to undertake to indemnify Owners against all direct and proven loss and costs sustained as a result of such
violation. Charterers shall indemnify the Owners and hold the Owners harmless in respect of any direct and proven liability, loss, damage or expenses of whatsoever nature which
the Owners may sustain resulting from the operation of the Vessel (including but not limited to hereunder those arising from Vessel entering/operating in war area or warlike area).
 
(Others):
that neither it, its directors, executive managers and owners, nor the directors, executive managers and owners of affiliated companies; have been suspended from doing business
in any form subject to investigation or charged with or sentenced for relevant criminal behaviour, fraud, false statements, corruption or other related activities;
52.
Confidentiality
 
The discussions between the Parties shall be kept strictly confidential by both Parties and may only be disclosed to each Party’s advisors and financiers on a need to know basis,
and as may be required to be disclosed under applicable law, regulatory rules and regulations. government authorities or relevant stock exchange rules.
53.
Obligations of the Owners
Kenzan Kaiun Co., Limited and Azalea Line, S.A. are jointly and severally liable for the due performance of all of the obligations of the Owners under this Agreement and each is
jointly and severally liable for the obligations of the other.
 
54.
Counterparts
 
This Charter Party may be executed in any number of counterparts and any single counterpart or set of counterparts signed, in either case, by all the parties hereto
shall be deemed to constitute a full and original agreement for all purposes.
55.
EU ETS
 
“Emission Allowances” means an allowance, credit, quota, permit or equivalent, representing a right of a vessel to emit a specified quantity of greenhouse gas emissions
recognized by the Emission Scheme, or generally in connection with emissions, carbon reduction or other environmental or sustainability measures relating to the operation of the
Vessel.
“Emission Scheme” means a greenhouse gas emissions trading scheme and any emissions, carbon reduction or other environmental or sustainability measures relating to the
Vessel, which for the purposes of this Clause shall include (without limitation) the European Union Emissions Trading System and any other similar systems imposed by any
similar or equivalent international, regional, national or local scheme implemented by the IMO or any other authority that regulate the issuance, allocation, trading or surrendering
of Emission Allowances.

(i)
The Charterer shall be the sole responsible party for compliance of all Emission Scheme obligations in relation to the Vessel, and whether or not such obligations are,
pursuant to any domestic or international law or regulation, directed to the Owner as registered or beneficial owner of the Vessel.
(ii)
Notwithstanding sub-paragraph (i) above, the Charterer shall be permitted to sub-delegate such Emission Scheme responsibility on to any entity, including without
limitation to the relevant holder of Document of Compliance under the ISM Code in respect of the Vessel. Such sub-delegation shall be documented and copy of such
documentation shall be made available to the Owner.
 
(iii)
The Charterers shall co-operate with the Owner and assist the Owner to deliver all such forms as are required to be filed to any relevant authorities in relation to the
delegation and assumption of any Emission Scheme responsibilities.
 
(iv)
Without limiting the foregoing, throughout the Charter Period the Charterer, or any mandated by the Charterer entity, shall provide and pay for the Emission Allowances
corresponding to the Vessel’s emissions under the scope of the applicable Emission Scheme without any delay whatsoever.
 
(v)
Emission Allowances, taxes, charges, levies, fees, fines, costs or expenses incurred or imposed in connection with any Emissions Scheme, shall be for the Charterers’
account and are to be settled directly by them or their mandated entity.
 
(vi)
The Charterer shall ensure that the Charterer, or any mandated by the Charterer entity, shall comply, acknowledge in writing in any form that may be reasonably required,
and provide all such information and documents to the Owner as necessary to enable the Owners and any Emission Scheme obliger to document and evidence to any
authority their delegation/mandating of all Emission Scheme obligations in relation to the Vessel (and the assumption of same by the relevant mandated entity), as may be
required from time to time during the Charter Period by the Owner, any manager or other mandated entity, and any relevant Emission Scheme authority, in conformity with
the provisions of this Clause. In relation to the Emission Scheme being the European Union Emissions Trading System, the Owner and the Charterer, or any mandated by
the Charterer entity, shall complete and sign a mandate form in form and substance as required (from time to time) by the EU Commission Implementing Regulation (EU)
2023/2599, the Directive 2003/87/EC, currently and indicatively in form as appended hereto (Appendix C) (the “Mandate Form”).
(vii)
The Owner undertake to relay to the Charterer, without delay, any information that might be received by the Owner for any reason whatsoever, including by error of any
authority, and which might relate to compliance with any Emission Scheme.
 

IN WITNESS HEREOF the Owners and the Charterers have signed and executed TWO COPIES of this Agreement the day and year first written.
 Kenzan Kaiun Co., Limited
Signature (Owners)
 Nakaza Shipping Company Inc.
Signature (Charters)
 
 /s/ Andreas Nikolaos Michalopoulos
 /s/ Yutaka Yano 
 Name: Andreas Nikolaos Michalopoulos
 Name: Yutaka Yano
 Title: Director
 Title: Director
  
 Azalea Line, S.A.
  
 Signature (Owners)
  
  
  
 /s/ Yutaka Yano
  
 Name: Yutaka Yano
  
 Title: Director/President
  
 Yano Kaiun Co., Ltd.
 Performance Shipping Inc.
 Signature (Guarantor)
 Signature (Guarantor)
 
  
 /s/ Yutaka Yano
 /s/ Andreas Nikolaos Michalopoulos
 Name: Yutaka Yano
 Name: Andreas Nikolaos Michalopoulos
 Title: Director/Representative Director
 Title: Director/Chief Executive Officer
 
List of Appendices:
Appendix A:
Memorandum of Agreement for purchase option
Appendix B: 
Form of performance guarantees
Appendix C:
Mandate Form of EU-ETS Obligation
Appendix D: 
Form of Quiet Enjoyment Letter
 

Exhibit 4.26
MEMORANDUM OF AGREEMENT
SALESFORM 2012
 
 
 
Norwegian Shipbrokers’ Association’s
 
Memorandum of Agreement for sale and purchase of ships
1
Dated: 16 July 2024
2
3
Nakaza Shipping Company Inc. of the Republic of the Marshall Islands guaranteed by Performance
4
Shipping Inc., of the Republic of the Marshall Islands, hereinafter called the “Sellers”, have agreed to sell, and
5
6
Kenzan Kaiun Co., Limited (99%) of Japan and Azalea Line, S.A. (1%) of the Republic of Panama,
7
guaranteed by Yano Kaiun Co., Ltd. of Japan, hereinafter called the “Buyers”, have agreed to buy:
8
9
Name of vessel: MT “P. MASSPORT” (New building LR2 Tanker “Hull H1515”)
10
11
IMO Number: 9997476
12
13
Classification Society:
14
15
Class Notation:
16
17
Year of Build:          2025
18
19
Builder/Yard: Shanghai Waigaoqiao Shipbuilding Company Limited, PRC.
20
21
Flag: Marshall Islands or Liberia or Malta to be mutually agreed, or Portugal if acceptable to the Buyers and its
22
financiers, or any other jurisdiction proposed by the Sellers and approved by the Buyers, such approval not to
23
be unreasonably denied or delayed.
24
25
Place of Registration:
26
27
GT/NT:
28
29
hereinafter called the “Vessel”, on the following terms and conditions:
30
31
This Agreement is subject to, and forms part of, a transaction involving the sale, purchase and the lease financing
32
of the Vessel, pursuant to the BBCP.
33
34
The Vessel is currently under construction under the Building Contract. The Sellers’ obligation to sell and deliver
35
the Vessel to the Buyers under this Agreement is conditional upon the delivery of the Vessel to the Sellers by the
36
Construction Seller pursuant to the terms of the Building Contract.
37
38
Definitions
39
40
“Banking Days” are days on which banks are open both in the country of the currency stipulated for the Purchase
41
Price in Clause 1 (Purchase Price) and in the place of closing stipulated in Clause 8 (Documentation) and New
42
York, London, Tokyo, Athens, and Shanghai.
 
 
43
“BBCP” means Bareboat Charter Party dated 16 July 2024 made between the Sellers as the Charterers and the
44
Buyers as the Owners together with any addenda thereto.
45
46
“Builder” means Shanghai Waigaoqiao Shipbuilding Company Limited, a corporation organized and existing under
47
the laws of the People’s Republic of China, having its registered office at 3001 Zhouhai Road, Pudong New District,
48
Shanghai 200137, the People’s Republic of China.
49
 
50
“Construction Seller’s Bank” means an account (state details of bank account) at the Builder’s Bank.
51
52
Bank Name:
53
Branch Name:
54
Bank Address:
55
Account name:
 
Copyright © 2012 Norwegian Shipbrokers’ Association. All rights reserved.
 

56
Account Number:
57
Swift Code:
58
Intermediary Bank.
59
Swift Code:
60
61
“Building Contract” means the ship building contract dated 7 March 2023 (as amended by Addendum no.1 dated
62
7 March 2023) made between the Construction Seller and the Sellers as buyer.
63
64
“Buyer’s Bank” means Nishi-Nippon City Bank Ltd.
 
 
65
“Buyers’ Nominated Flag State” means Marshall or Liberia flag
 
 
66
“Class” means the class notation referred to above.
 
 
67
“Classification Society” means the Society referred to above.
68
69
“Charterers” means Charterers as defined in the BBCP.
70
71
“Construction Seller” means together (i) the Builder and (ii) China Shipbuilding Trading Company Limited, a
72
company incorporated and existing under the laws of the People’s Republic of China, having its registered office
73
at 56(Yi), Zhongguancun Nan Da Jie, Beijing 100044, the People’s Republic of China.
74
75
“Delivery Date” means that date on which the Vessel is delivered by the Sellers to the Buyers under this
76
Agreement.
77
78
“Deposit” shall have the meaning given in Clause (Deposit).
 
 
79
“Deposit Holder” means (state name and location οf Deposit Holder) οr, if left blank, the Sellers’ Bank, which
80
shall hold and release the Deposit in accordance with this Agreement.
 
 
81
“In writing” or “written” means a letter handed over from the Sellers to the Buyers or vice versa, a registered
82
letter, email or telefax.
83
84
“Net Finance Amount” means USD 44,250,000.00 (United States Dollars Forty-Four Million Two Hundred Fifty
85
Thousand).
86
87
“Owners” means Owners as defined in the BBCP.
 
 
88
“Parties” means the Sellers and the Buyers.
 
 
89
“Purchase Price” means the price for the Vessel as stated in Clause 1 (Purchase Price).
 
 
90
“Sellers’ Account” means an account (state details of bank account) at the Sellers’ Bank.
91
92
Bank Name: XXX
93
Branch Name: XXX
94
Bank Address: XXX
95
Account name: XXX
96
Account Number: XXX
97
USD IBAN: XXX
98
Swift Code: XXX
99
Intermediary Bank: XXX
100
Swift Code: XXX
101
102
“Sellers’ Bank” means
103
104
1. Purchase Price
 
Copyright © 2012 Norwegian Shipbrokers’ Association. All rights reserved.
 

105
106
The Purchase Price is USD 44,250,000.00 (state currency and amount both in words and figures) (United
107
States Dollars Forty-Four Million Two Hundred Fifty Thousand).
108
109
2.
Deposit (clause not applicable)
110
111
As security for the correct fulfilment of this Agreement the Buyers-shall lodge a deposit of % (percent) or
112
if left blank,10% (ten per cent),of the Purchase Price (the “ Deposit) in an interest bearing account for the 
113
Parties with the Deposit Holder within three (3) Banking Days after the date that:
114
115
(i) this Agreement has been signed by the Parties and exchanged in original or by e-mail οr telefax; and
116
117
(ii) the Deposit Holder has confirmed in writing to the Parties that the accοunt has been opened:
118
119
The Deposit shall be released in accordance with joint written instructions of the Parties. Interest, if any, 
120
shall be credited to the Buyers: Any fee charged for holding and releasing the Deposit shall be borne 
121
equally by the Parties, The Parties shall provide to the Deposit Holder all necessary documentation to open  
122
end maintain the account without delay:
123
124
3.
Payment
125
126
Please see Additional Clause 22 (Payment).
127
128
On delivery of the Vessel, but not later than three (3) Banking Days after the date that Notice of Readiness
129
has been given in accordance with Clause 5 (Time and place of delivery and notices)
130
131
(i)the Deposit shall be released to the Sellers; and
132
133
(ii)the balance of The Purchase Price (less Charterers’ Down Payment as per BBCP clause 49) and all other
134
sums payable on delivery by the Buyers to the Sellers under this Agreement shall be paid in full free of bank
135
charges to the Sellers’ Account Purchase Price shall be paid into a suspense account with the Sellers’ Bank
136
with conditional payment method set out in a MT 199 SWIFT message not later than two (2) Banking Days
137
prior to Delivery with Irrevocable and unconditional instruction to be released to Sellers upon presentation of
138
a fixed copy of the Protocol of Delivery and Acceptance signed by both the Sellers and the Buyers.
139
and all other sums payable on delivery by the Buyers to the Sellers under this Ageement shall be paid in full
140
free of bank charges to the Sellers Account,
141
142
4.
Inspection
143
144
The Buyers confirm that prior to the date of this Agreement they have received (i) a copy of the Building
145
Contract, (ii) full specifications and drawings (including makers list), (iii) up-to-date photographs of the Vessel
146
and (iv) any other information which they requested to enable the Buyers and their advisors to assess the
147
condition of the Vessel, and the Buyers confirm that they hereby accept the technical condition of the Vessel.
148
Therefore,
149
150
(a)*  The Buyers have inspected and accepted the Vessel’s classification records. The Buyers have also
151
inspected the Vessel at/in            (state place) on             (state date) and have accepted the Vessel
152
following this inspection and the sale is outright and definite, subject only to the terms and conditions of this
153
Agreement.
154
155
(b)*  (i) The Buyers shall have the right to inspect the Vessel’s classificatiοn records and declare whether same
156
are accepted or not within                       (state date/period).
157
158
(ii) The Sellers shall make the Vessel available for inspection at/in                      (state place/range) within
159
(state date/period):
160
 
Copyright © 2012 Norwegian Shipbrokers’ Association. All rights reserved.
 

161
The Buyers shall undertake the inspection without undue delay to the Vessel. Should the Buyers cause
162
undue delay they shall compensate the Sellers for the losses thereby incurred
163
164
The Buyers shall inspect the Vessel without opening up and without cost to the Sellers.
165
166
During the inspection the Vessel’s deck and engine log books shall be made available for examination by
167
the Buyers.
168
169
The sale shall become outright and definite subject only to the terms and conditions of this Agreement;
170
provided that the Sellers receive written notice of acceptance of the Vessel from the Buyers within seventy
171
two (72) hours after completion of such inspection or after the date/last day of the period stated in Clause
172
4(b)(ii), whichever is earlier:
173
174
Should the Buyers fail to undertake the inspection as scheduled and/or notice of acceptance of the Vessel’s
175
classification records and/or of the Vessel not be received by the Sellers as aforesaid, the Deposit together
176
with Interest earned if any shall be released-immediately to the Buyers, whereafter this Agreement shall be
177
null and void.
178
179
*4(a) and 4(b) are alternatives; delete whichever is not applicable in the absence of deletiοns alternative
180
4(a) shall apply.
181
182
5.
Time and place of delivery and notices
183
184
(a)  The Vessel shall be delivered and taken over as is where is safely afloat alongside a quay or pier at a safe
185
and accessible berth or anchorage at the shipyard of the Builder in the Sellers’ option.
186
187
Expected time of delivery: the expected date of delivery of the Vessel under the Building Contract Notice of 
188
Readiness shall not be tendered before: XX XXX 2025
189
190
Cancelling Date (see Clauses 5(d) 6(a)(i), and 14): 30 April 2026
191
192
(b)  The Sellers shall keep the Buyers well informed with regards to the actual delivery date of the Vessel of the
193
Vessel’s itinerary and shall provide the Buyers with twenty (20), fifteen (15), seven (7) and three (3) and
194
three (3) days’ approximate notice and three (3) two (2) Banking Days’ definite notice of the date of delivery.
195
Timing of delivery to be mutually agreed by Sellers and Buyers.
196
When the Vessel is at the place of delivery and physically ready for delivery in accordance with this
197
Agreement, the Sellers shall give the Buyers a written Notice of Readiness for delivery.
198
199
The Buyers hereby confirm that, in accordance with the terms and conditions provided herein, the delivery
200
of the Vessel by the Sellers under this Agreement will take place simultaneously with the delivery of the
201
Vessel to the Sellers under the Building Contract.
202
203
6.
Divers Inspection / Drydocking (clause not applicable)
204
205
(a)* (i) The Buyers shall have the option at their cost and expense to arrange for an underwater inspection by a
206
diver approved by the Classification Society prior to the delivery of the Vessel. Such option shall be
207
declared latest nine (9) days prior to the Vessel’s intended date of readiness for delivery as notified by the
208
Sellers pursuant to Clause 5(b) of this Agreement. The Sellers shall at their cost and expense make the
209
Vessel available for such inspection. This inspection shall be carried out without undue delay and in the
210
presence of a Classification Society surveyor arranged for by the Sellers and paid for by the Buyers. The
211
Buyers’ representative(s) shall have the right to be present at the diver’s inspection as observer(s) only
212
without interfering with the work or decisions of the Classification Society surveyor. The extent of the
213
inspection and the conditions under which it is performed shall be to the satisfaction of the Classification
214
Society. If the conditions at the place of delivery are unsuitable for such inspection, the Sellers shall at their
215
cost and expense make the Vessel available at a suitable alternative place near to the delivery port, in
216
which event the Cancelling Date shall be extended by the additional time required for such positioning and
217
the subsequent re-positioning. The Sellers may not tender Notice of Readiness prior to completion of the  
 
Copyright © 2012 Norwegian Shipbrokers’ Association. All rights reserved.
 

218
underwater inspection,
219
220
(ii) If the rudder propeller, bottom or other υnderwater parts below the deepest load line are found broken
221
damaged or defective so as to affect the Vessels class; then (1) unless repairs can be carried out afloat to 
222
the satisfaction of the Classification Society; the Sellers shall arrange for the Vessel tο be drydocked at their 
223
expense for inspection by the Classification Society of the Vessel’s underwater parts below the deepest load
224
line, the extent of the inspection being in accordance  with the Classification Society’s rules (2) such defects 
225
shall be made good by the Sellers at their cost and expense to the satisfaction of the Classification Society
226
without condition/recommendation** and (3) the Sellers shall pay for the underwater inspection and the 
227
Classification Seciety’s attendance. 
228
229
Notwithstanding anything to the contrary in this Agreement, if the Classification Society do not require the
230
aforementioned defects to be rectified before the next class drydocking survey, the Sellers shall be entitled
231
to deliver the Vessel with these defects against a deduction from the Purchase Price of the estimated direct
232
cost (of labour and materials) of carrying out the repairs to the satisfaction of the Classification Society,
233
whereafter the Buyers shall have no further rights whatsoever in respect of the defects and/or repairs. The
234
estimated direct cost of the repairs shall be the average of quotes for the repair work obtained from two
235
reputable independent shipyards at or in the vicinity of the port of delivery, one to be obtained by each of the
236
Parties within two (2) Banking Days from the date of the imposition of the condition/recommendation, unless
237
the Parties agree otherwise. Should either of the Parties fail to obtain such a quote within the stipulated time
238
then the quote duly obtained by the other Party shall be the sole basis for the estimate of the direct repair
239
costs. The Sellers may not tender Notice of Readiness prior to such estimate having been established.
240
241
(iii) If the Vessel is to be drydocked pursuant to Clause 6(a)(ii) and no suitable dry docking facilities are
242
available at the port of delivery, the Sellers shall take the Vessel to a port where suitable drydocking facilities
243
are available whether within or outside the delivery range as per clause 5(a). Once drydocking has taken
244
place the Sellers shall deliver the Vessel at a port with in the delivery range as per Clause 5(a) which shall,
245
for the purpose of this Clause, become the row port of delivery. In such event the Cancelling Date shall be
246
extended by the additional time required for the drydocking and extra steaming but limited to a maximum of
247
fourteen (14) days.
248
249
(b)*  The Sellers shall place the Vessel in drydock at the port of delivery for inspection by the Classification
250
Society of the Vessel’s underwater parts below the deepest load line, the extent of the inspection being in-
251
accordance with the Classification Society’s rules. If the rudder, propeller, bottom or other underwater parts
252
below the deepest load line are found broken, damaged or defective so as to affect the Vessel’s class, such
253
defects shall be made good at the Sellers’ cost and expense to the satisfaction of the Classification Society
254
without condition/recommendation**. In such event the Sellers are also to pay for the costs and expenses in
255
connection with putting the Vessel in and taking her out of drydock-including the drydock dues and the
256
Classification Society’s fees. The Sellers shall also pay for these costs and expenses if parts of the tailshaft
257
system are condemned or found defective or broken so as to affect the Vessel’s class, In all other cases,
258
the Buyers shall pay the aforesaid costs and expenses due and fees.
259
260
(c)  If the Vessel is drydocked pursuant to Clause S(a)(ii) or G(b) above:
261
 
 
262
(i) The Classification Society may require survey of the tailshaft system, the extent of the survey being to the
263
satisfaction. of the Classification surveyor. If such survey is not required by the Classification Society, the
264
Buyers shall have the option to require the tailshaft to be drawn and surveyed by the Classification Society,
265
the extent of the survey being in accordance with the Classification Society’s rules for tailshaft survey and
266
consistent with the current stage of the Vessel’s survey cycle. The Buyers shall declare whether they require
267
the tailshaft to be drawn and surveyed not later than by the completion of the inspection by the
268
Classification Society. The drawing and refitting of the tailshaft shall be arranged by the Sellers. Should any
269
parts of the tailshaft system be condemned or found defective so as to affect the Vessel’s class, those parts
270
shall be renewed or made good at the Sellers cost and expense to the satisfaction of Classification Society
271
without condition/recommendation**
272
273
(ii) The costs and expenses relating to the survey of the tailshaft system shall be borne by the Buyers
274
unless the Classification Society requires such survey to be carried out or if carts of the system are
 
Copyright © 2012 Norwegian Shipbrokers’ Association. All rights reserved.
 

275
condemned or found defective or broken so as to affect the Vessel’s class; in which case the Sellers shall
276
pay these costs and expenses.
277
278
(iii)the Buyer’s reρresentative(s) shall have the right to be present in the drydock, as observer(s) only 
279
without interfering with the work or decisions of the Classification Society surveyor.
280
281
(iv) The Buyers shall have the right to have the underwater parts of the Vessel cleaned and painted at their
282
risk, cost and expense without interfering with the Sellers’ or the Classification Society surveyor’s work, if
283
any, and without affecting the Vessel’s timely delivery. If however, the Buyers’ work in drydock is still in
284
progress when the Sellers have completed the work which the Sellers are required to do, the additional
285
docking time needed to complete the Buyers’ work shall be for the Buyers’ risk, cost and expense. In the
286
event that the Buyers’ work requires such additional time, the Sellers may upon completion of the Sellers’
287
work tender Notice of Readiness for delivery whilst the Vessel is still drydock and, notwithstanding
288
Clause 5(a), the Buyers shall be obliged to take delivery in accordance with Clause 3 (Payment), whether the
289
Vessel is in dry dock or not.
290
291
*6(a) and 6(ab) are alternatives; delete whichever is not applicable in the absence of deletiοns, alternative 
292
6(a) shall apply. 
293
294
**Notes or memoranda, if any in the surveyor’s report which are accepted by the Classification Society
295
without condition/recommendation are not to be taken into account.
296
297
7.
Spares, bunkers and other items
298
299
The Sellers shall deliver the Vessel to the Buyers with everything belonging to her on board and on shore.
300
All spare parts and spare equipment including spare tail-end shaft(s) and/or spare propeller(s)/propeller
301
blade(s), if any, belonging to the Vessel at the time of Inspection delivery used or unused, whether on board
302
or not shall become remain the Buyers’ Seller’s property, but-spares on order are excluded. Forwarding
303
charges; if any, shall be for the Buyers’ account. The-Sellers are not required to replace spare parts
304
including spare tail end shaft(s) and spare propeller(s)/propeller blade(s) which are taken out of spare and 
305
used as replacement prior to delivery, but the replaced items shall be the property of the Buyers. Unused
306
stores and provisions shall be included in the sale and be taken over by the Buyers without extra payment.
307
308
Library and forms exclusively for use in the Sellers’ vessel(s) and-captain’s, officers’ and crew’s personal
309
belongings including the slop chest are excluded from the sale without compensation as well as the
310
following additional items:            (include list)
311
312
Items on board which are on hire or owned by third parties, listed as follows, are excluded from the sale
313
without compensation:           (include list)
314
315
Items on board at the time of inspection delivery which are on hire or owned by third parties, not listed
316
above, shall be replaced or procured by remain with the Sellers prior to delivery at their cost and expense.
317
Any remaining bunkers and unused lubricating and hydraulic oils and greases in storage tanks and
318
unopened drums shall remain the property of the Sellers and shall not form part of the sale.
319
320
The Buyers shall take over remaining bunkers and unused lubricating and hydraulic οils and greases in
321
storage tanks and unopened drums and pay either
322
323
(a)*  the actual net price (excluding barging expenses) as evidenced by invoices or vouchers; or
324
325
(b)*  the current net market price (excluding barging expenses) at the port and date of delivery of Vessel or, if
326
unavailable, at the nearest bunkering port,
327
328
for the quantities taken over.
329
330
Payment under this Clause shall be made at the same time and place and in the same currency as the
331
Purchase Prise:
 
Copyright © 2012 Norwegian Shipbrokers’ Association. All rights reserved.
 

332
333
“inspection” in this Clause 7, shall mean the Buyers’ inspection according to Clause 4(a) or 4(b)
334
(inspection), if applicable. If the Vessel is taken over without inspection, the date of this Agreement shall be
335
the relevant date.
336
337
*(a) and (b) are alternatives; delete whichever is not applicable. In the absence of deletions alternative (a)
338
shall aρply.
339
340
8.
Documentation
341
342
The place of closing: Virtual closing or physically at the Builder, to be confirmed.
343
344
In exchange for payment of the Purchase Price, Sellers shall furnish the Buyers with delivery documents
345
reasonably required by the Buyers. These documents shall be listed in an addendum hereto, namely
346
“Addendum no 1: List of delivery documents”, and regarding such documents that are not available prior to
347
the closing, Sellers shall furnish the Buyers with the final draft of such documents no later than three (3)
348
Banking Days prior to the date of closing for the purpose of carrying out the closing smoothly.
349
350
(a)  In exchange for payment of the Purchase Price the Sellers shall provide the Buyers with the following
351
delivery documents:
352
353
(i) Legal Bill(s) of Sale in a form recordable in the Βuyers’ Nominated Flag State, transferring title of the
354
Vessel and stating that the Vessel is free from all mortgages, encumbrances and maritime liens οr any other
355
debts whatsoever; duly notarially attested and legalized or apostilled,  as required by the Buyers’ Nominated
356
Flag State;
357
358
(ii) Evidence that all necessary cοrporate, sharehοlder and οther action has been taken by the Sellers to
359
authorise the execution, delivery and perfοrmance of this Agreement;
360
361
(iii) Power of Attorney of the Sellers appointing one or more representatives to act on behalf of the Sellers in
362
the performance of this Agreement; duly notarially attested and legalized or apostilled (as appropriate);
363
364
(iv) Certificate or Transcript of Registry issued by the competent authorities of the flag state on the date of
365
delivery evidencing the Sellers’ ownership of the Vessel and that the Vessel is free from registered
366
encumbrances and mortgages, tο be faxed or e-mailed by such authority to the closing meeting with the
367
original to be sent to the Buyers as soon  as possible after delivery of the Vessel;
368
369
(v) Declaration of Class it (depending on the Classification-Society) a Class Maintenance Certificate issued
370
within three (3) Banking Days prior to delivery confirming that the Vessel is in Class free of
371
condition/recommendation;
372
373
(vi) Certificate of Deletion of the Vessel from the Vessel’s registry or other official evidence of deletion
374
appropriate to the Vessel’s registry at the time of delivery, or, in the event that the registry does not as a
375
matter of practice issue such dοcumentatiοn immediately, a written undertaking by the Sellers to effect
376
deletion from the Vessels registry forthwith and provide a certificate or other official evidence of deletion to
377
the Buyers promptly and latest within four(4) weeks after the Purchase Price has been paid end the Vessel
378
has been delivered;
379
380
(vii) A copy of the Vessel’s Cοntinuοus Synopsis Record certifying the date on which the Vessel ceased to
381
be registered with the Vessel’s registry, or, in the event that the registry does not as a matter of practice
382
issue such certificate immediately, a written undertaking from the Sellers to provide the copy of this
383
certificate promptly upon it being issued together with evidence of submission by the Sellers of a duly
384
executed Form 2 stating the date on which the Vessel shall cease to be registered with the Vessel’s registry;
385
386
(viii) Commercial Invoice for-the Vessel;
387
388
(ix) Commercial Invoice(s) for bunkers-lubricating and hydraulic oils and greases;
 
Copyright © 2012 Norwegian Shipbrokers’ Association. All rights reserved.
 

389
 
390
 
(x) Α copy of the Sellers’ letter to their satellite cοmmunication provider cancelling the Vessel’s
391
 
communications contract which is to be sent immediately after delivery of the Vessel;
392
 
393
 
(xi) Any additional documents as may reasonably be required by the competent authorities of the Buyers’
394
 
Nominated Flag State for the purpose of registering the Vessel, provided the Buyers notify the Sellers of any
395
 
such documents as soon as possible after the date of thisAgreement; and
396
 
 
397
 
(xii) The Sellers’ letter of confirmation that to the best of their knowledge; the Vessel is not black listed by
398
 
any nation or international organisation.
399
 
 
400
(b) At the time of delivery the Buyers shall provide the Sellers with:
401
  
402
 (i) Evidence that all necessary corporate, shareholder and other action has been taken by the Buyers to-
403
 authorise the execution delivery and performance of this Αgreement; and
404
 
405
 (ii) Power of Attorney of the Buyers appointing one or more representatives to act on behalf of the Buyers in
406
 authorise the execution delivery and performance of this Αgreement; and
407
 
408
(c) If any of the documents listed in Sub clauses (a) and (b) above are not in the English language they shall be
409
 accompanied by an English translation by an authorised translator or certified by a lawyer qualified to
410
 practice in the country of the translated language.
411
 
412
(d)  The Parties shall to the extent possible exchange copies, drafts or samples of the documents listed in Sub
413
 clause (a) and Sub clause (b) above for review and comment by the other party not later than (state number
414
 of days), or if left blank, nine (9) days prior to the Vessel’s intended date of readiness for delivery as notified
415
 by the Sellers pursuant to Clause 5(b) of this Agreement.
416
 
417
(e)  Concurrent with the exchange of documents in Sub clause (a) and Sub clause (b) above, the Sellers shall
418
 also hand to the Buyers the classification certificate (s) as well as all plans, drawings and manuals,
419
 (excluding ISM/SPS manuals), which are on board the Vessel. Other certificates which are on board the
420
 Vessel shall also be handed over to the Buyers unless the Sellers are required to retain same, in which case
421
 the Buyers have the right to take copies.
422
 
423
(f)  Other technical documentation which may be in the Sellers’ possession shall promptly after delivery be
424
 forwarded to the Buyers at their expense, if they so request. The Sellers may keep the Vessel’s log books
425
 but the Buyers have the right to take copies of same.
426
  
427
(g)  The Parties shall sign and deliver to each other a Protocol of Delivery and Acceptance confirming the date
428
 and time of delivery of the Vessel from the Sellers to the Buyers.
429
 
 
430
9.
Encumbrances
431
 
 
432
 
The Sellers warrant that the Vessel, at the time of delivery, is free from all charters, encumbrances,
433
 
mortgages and maritime liens or any other debts whatsoever, and is not subject to Port State or other
434
 
administrative detentions. The Sellers hereby undertake to indemnify the Buyers against all consequences
435
 
of claims made against the Vessel which have been incurred prior to the time of delivery.
436
 
 
437
10.
Taxes, fees and expenses
438
 
439
 
Any cost and fee for initial registration of title to the Vessel and legal documentation cost for documenting
440
 
the lease and security to be Charterer’s account; however such cost not to exceed USD15,000.
441
 
Any tonnages taxes for Owners’ flag and Charterers’ flag to be Charterers account.
442
 
Any taxes, fee and expenses in connection with the purchase and registration in the Buyers’ Nominated
443
 
Flag State shall be for the Buyers’ account, whereas similar charges in connection with the closing of the
444
 
Sellers’ register shall be for the Sellers’ account.
445
 
 
 
Copyright © 2012 Norwegian Shipbrokers’ Association. All rights reserved.
 

446
11.
Condition of delivery
447
448
The Vessel with everything belonging to her shall be at the Sellers’ risk and expense until she is delivered to
449
the Buyers, but subject to the terms and conditions of this Agreement she shall be delivered and taken over
450
“as is where is” she was at the time of inspection delivery, fair wear and tear excepted. The Vessel shall be
451
delivered to the Buyers only once she is in all respects ready in accordance with the Building Contract.
452
453
However, the Vessel shall be delivered free of cargo and free of stowaways with her Class maintained
454
without conditiοn/recοmmendatiοn*, free of average damage affecting the Vessel’s class, and with her
455
classification  certificates and national certificated as well as all other certificates the Vessel had at the time
456
of inspection, valid and unextended without condition/recommendation* by the Classification Society or the
457
relevant authorities at the time of delivery.
458
459
“Inspection” in this Clause 11, shall mean the Buyers’ inspection according  tο Clauses 4(a) or 4(b)
460
(Inspections) if applicable. If the Vessel is taken over without inspection, the date of this Agreement shall be
461
the relevant date.
462
463
*Notes and memoranda, if any, in the surveyor’s report which are accepted by the Classification Society
464
without condition/recοmmendatiοn are nοt to be taken into account.
465
466
12.
Name/markings (clause not applicable)
467
468
Upon delivery the Buyers Undertake to change the name of the Vessel and alter funnel markings.
469
470
13.
Buyers’ default
471
472
Should the Deposit not be lodged in accordance with Clause 2 (Deposit), the Sellers have the right to
473
cancel this Agreement, and they shall be entitled to claim compensation for their losses and for all expenses
474
incurred together with interest.
475
476
Should the Purchase Price not be paid in accordance with Additional Clause 322 (Payment), the Sellers
477
have the right to cancel this Agreement, and the Buyers shall make due compensation to the Sellers for
478
their direct and documented losses and expenses. in which case the Deposit together with interest earned, if
479
and, shall be released to the Sellers. If  the Deposit does not cover their loss, the-Sellers shall be entitled to
480
claim further compensation for their losses and for all expenses incurred together with interest.
481
482
14.
Sellers’ default
483
484
Should the Sellers fail to give Notice of Readiness in accordance with Clause 5(b) or fail to be ready to
485
validly complete a legal transfer by the Cancelling Date the Buyers shall have the option of cancelling this
486
Agreement. To this purpose, the Sellers shall advise Buyers the relevant extension of the Cancelling Date
487
and request them to declare within three (3) Banking Days whether they accept such extension or cancel
488
this Agreement. Failure of the Buyers to reply to the said notice of the Sellers shall be deemed an
489
acceptance by the Buyers of the extension of the Cancelling Date as proposed by Sellers. If after Notice of
490
Readiness has been given but before the Buyers have taken delivery, the Vessel ceases to be physically
491
ready or delivery and is not made physically ready again by the Cancelling Date and new Notice of
492
Readiness given, the Buyers shall retain their option to cancel. In the event that the Buyers elect to cancel
493
this Agreement the Deposit together with interest earned if any, shall be released to them immediately.
494
495
Should the Sellers fail to give Notice of Readiness by the Cancelling Date as may be extended or fail to be
496
ready to validly complete a legal transfer as aforesaid they shall make due compensation to the Buyers in
497
the amount of USD 30,000 plus any documented reasonable legal costs (if any) of the Buyers for the initial
498
registration of title to the Vessel and legal documentation cost for documenting the lease and security such
499
costs not to exceed USD15,000 for their loss and for all expenses together with interest if their failure is due
600
to proven negligence and whether or not the Buyers cancel this Agreement.
501
502
If the Building Contract is cancelled, rescinded or otherwise terminated for any reason whatsoever or the
 
Copyright © 2012 Norwegian Shipbrokers’ Association. All rights reserved.
 

503
Vessel is not delivered by the Construction Seller to the Sellers under the Building Contract or is rejected by
504
 
the Sellers for any reason whatsoever, then the Sellers shall give written notice thereof to the Buyers and
505
 
upon Buyers’ receipt of such notice, this Agreement shall cease to have effect without any liability on the
506
 
parties hereto and the parties shall be released from all obligations, liabilities and responsibilities hereunder,
507
 
save for the obligation of the Sellers to pay to the Buyers a termination fee in the sum of USD30,000 plus any
508
 
documented reasonable legal costs (if any) of the Buyers for the initial registration of title to the Vessel and
509
 
legal documentation cost for documenting the lease and security such costs not to exceed USD15,000.
510
 
 
511
 
The Sellers shall be entitled to terminate this Agreement at any time before the date of delivery of the Vessel
512
 
under the Building Contract by a 180 calendar days’ written notice to the Buyers, whereupon this Agreement
513
 
shall cease to have effect without any liability on the parties hereto and the parties shall be released from all
514
 
obligations, liabilities and responsibilities hereunder, save for the obligation of the Sellers to pay to the Buyers
515
 
a termination fee in the sum of USD30,000 plus any documented reasonable legal costs (if any) of the Buyers
516
 
for the initial registration of title to the Vessel and legal documentation cost for documenting the lease and
517
 
security such costs not to exceed USD 15,000
518
 
 
519
15.
Buyers’ representatives (clause not applicable)
520
 
 
521
 
After this Agreement has been signed by the Parties and the Deposit has been lodged, the Buyers have the
522
 
right to place two (2) representatives en beard the Vessel at their sole risk and expense.
523
 
524
 
These representatives are on board for the purpose of familiarization and in the capacity of observers only,
525
 
and they shall not interfere if any respect with the operation of the Vessel. The Buyers and the Buyers’
526
 
representatives shall sign the Sellers’ P&I Club’s standard letter of indemnity prior to their embarkation.
527
 
 
528
16.
Law and Arbitration
529
 
 
530
(a)*This Agreement and all non contractual obligations arising out of or in connection with it shall be governed
531
 
by and construed in accordance with English law and any dispute arising out of or in connection with this
532
 
Agreement shall be referred to arbitration in London in accordance with the Arbitration Act 1996 or any
533
 
statutory modification or re- enactment thereof save to the extent necessary to give effect to the provisions
534
 
of this Clause.
535
 
 
536
 
The arbitration shall be conducted in accordance with the London Maritime Arbitrators Association (LMAA)
537
 
Terms current at the time when the arbitration proceedings are commenced.
538
 
 
539
 
The reference shall be to three arbitrators. A party wishing to refer a dispute to arbitration shall appoint its
540
 
arbitrator and send notice of such appointment in writing to the other party requiring the other party to
541
 
appoint its own arbitrator within fourteen (14) calendar days of that notice and stating that it will appoint its
542
 
arbitrator as sole arbitrator unless the other party appoints its own arbitrator and gives notice that it has
543
 
done so within the fourteen (14) days specified. If the other party does not appoint its own arbitrator and
644
 
give notice that it has done so within the fourteen (14) days specified, the party referring a dispute to
645
 
arbitration may, without the requirement of any further prior notice to the other party, appoint its arbitrator as
546
 
sole arbitrator and shall advise the other party accordingly. The award of a sole arbitrator shall be binding on
547
 
both Parties as if the sole arbitrator had been appointed by agreement.
548
 
 
549
 
In case where neither the claim nor any counterclaim exceeds the sum of US$100,000 the arbitration shall
550
 
be conducted in accordance with the LMAA Small Claims Procedure current at the time when the arbitration
551
 
proceedings are commenced.
552
 
 
553
 (b)*This Agreement shall be governed by and construed in accordance with Title 9 of the United States Code
554
 
and the substantive law (not including the choice of law rules) of the state οf Νew Υork and any dispute
566
 
arising out of or in connection with this Agreement shall be referred to three (3) persons at New York, one to
566
 
be appointed by each of the parties hereto, and the third by the two so chosen; their decision οr that οf any
567
 
two of them shall be final, and for the purposes of enforcing any award, judgment may be entered on an
558
 
award by any court of competent jurisdiction. The proceedings shall be conducted in accordance with the
559
 
rules of the Society of Maritime Arbitrators, inc
 
Copyright © 2012 Norwegian Shipbrokers’ Association. All rights reserved.
 

560
 
561
 
in cases where neither the claim nor any counterclaim exceeds the sum of US$100,000 the arbitration shall
562
 
be cοndυcted in accοrdance with the Shortened Arbitration Procedure of the Society of Maritime Arbitrators,
563
 
inc
564
 
 
565
 (C) This Agreement shall be governed by and construed in accordance with the laws of (state place)
566
 
and any dispute arising out of or in connection with this Agreement shall be referred to arbitration at (state
567
 
place), subject to the procedures applicable there.
568
 
 
569
 
*16(a), 16(b) and 16(c) are alternatives; delete whichever is not applicable. In the absence of deletions,
570
 
alternative 16(a) shall apply.
571
 
 
572
17.
Notices
573
 
 
574
 
All notices to be provided under this Agreement shall be in writing.
575
 
 
576
 
Contact details for recipients of notices are as follows:
577
 
 
578
 
For the Buyers:
579
 
Kenzan Kaiun Co., Limited
580
 
1276-1, Ko, Go, Namikata-cho, Imabari City, Ehime pref, Japan
581
 
Email:
582
 
Attention: Yutaka Yano
583
 
 
584
 
Azalea Line., S.A.
585
 
Paseo del Mar and Pacific Avenues, costa del Este, MMG Tower, 23rd floor,
586
 
Panama City, Republic of Panama
587
 
Email: 
588
 
Attention: Yutaka Yano
589
 
 
590
 
 
591
 
For the Sellers:
592
 
Nakaza Shipping Company Inc.
593
 
c/o Unitized Ocean Transport Limited
594
 
373 Syngrou Ave. & 2-4 Ymittou str.,
595
 
17564, Palaio Faliro, Athens,
596
 
Greece
597
 
Email: 
598
 
Attention: 
 Mr. Andreas Nikolaos Michalopoulos
599
 
600
 
Any notice, request or other communication sent to the Sellers by Kenzan Kaiun Co., Limited or Azalea Line
601
 
S.A. shall be deemed as having been sent by both Kenzan Kaiun Co., Limited and Azalea Line, S.A. Any
602
 
notice, request or other communication sent by the Sellers to Kenzan Kaiun Co., Limited or Azalea Line, S.A.
603
 
shall be deemed as having been sent to both Kenzan Kaiun Co., Limited and Azalea Line, S.A.
604
 
605
18.
Entire Agreement
606
 
607
 
The terms of this Agreement and the terms of the BBCP comprise the entire agreement between the Buyers
608
 
and the Sellers in relation to the sale and purchase of the Vessel and supersede all previous agreements
609
 
whether oral or written between the Buyers and the Sellers in relation hereto.
610
 
The written terms of this Agreement comprise the entire agreement between the Buyers and the Sellers in
611
 
relation to the sale and purchase of the Vessel and supersede all previous agreements whether oral or
612
 
written between the Parties in relation thereto.
613
 
614
 
Each of the Parties acknowledges that in entering into this Agreement it has not relied on and shall have no
615
 
right or remedy in respect of any statement, representation, assurance or warranty (whether or not made
616
 
negligently) other than as is expressly set out in this Agreement.
 
Copyright © 2012 Norwegian Shipbrokers’ Association. All rights reserved.
 

617
 
 
618
 
Any terms Implied into this Agreement by any applicable statute or law are hereby excluded to the extent
619
 
that such exclusion can legally be made. Nothing in this Clause shall limit or exclude any liability for fraud.
620
 
 
621
19.
Delivery under BBCP
622
 
 
623
 
The Buyers (as Owners) and the Sellers (as Charterers) have entered into the BBCP whereby the Vessel is
624
 
to be chartered on delivery for such period and on such terms and conditions more particularly described in
625
 
the BBCP. The Parties acknowledge that the Sellers’ obligation to sell and the Buyers’ obligation to
626
 
purchase the Vessel under this Agreement is conditional upon the delivery of the Vessel under and pursuant
627
 
to the MOA and the simultaneous delivery of the Vessel by the Buyers (as Owners) to the Sellers (as
628
 
Charterers) under the BBCP. If any event occurs before delivery of the Vessel under this Agreement that
629
 
renders the MOA or the BBCP null and void or to be terminated for any reason whatsoever, this Agreement
630
 
shall be null and void and each Party shall be discharged and released from any and all of its respective
631
 
obligations under this Agreement.
632
 
 
633
20.
Assignment
634
 
 
635
 
Neither party shall be entitled to assign or transfer its rights under this Agreement without the prior written
636
 
consent of the other.
637
 
 
638
21.
Sanctions
639
 
 
640
 (a) In this Agreement, the following provisions shall apply where any applicable sanction, prohibition or
641
 
restriction is imposed on any specified persons, entities or bodies including the designation of any specified
642
 
vessels or fleets under United Nations Resolutions or trade or economic applicable sanctions, laws or
643
 
regulations of the European Union or United States of America or the United Kingdom or Japan.
644
 
 
645
(b) The Sellers hereby warrant that at the date of entering into this Agreement and continuing until the Vessel
646
 
has been delivered from the Sellers to the Buyers in accordance with this Agreement:
647
 
 
648
 
(i) none of the Sellers, their directors, officers, and employees is subject to any of the sanctions,
649
 
prohibitions, restrictions or designation referred to in sub-clause (a);
650
 
 
651
 
(ii) the Sellers are selling as principals and not as agent, trustee or nominee of any person with whom 652 
652
 
transactions are prohibited or restricted under sub-clause (a);
653
 
 
654
 
(iii) the Vessel is not a designated vessel under any of the sanctions, prohibitions, restrictions or designation
655
 
referred to in sub-clause (a);
656
 
 
657
 (c) The Buyers hereby warrant that at the date of entering into this Agreement and continuing until the Vessel
658
 
has been delivered from the Sellers to the Buyers in accordance with this Agreement:
659
 
 
660
 
(i) none of the Buyers, their directors, officers, employees and agents is subject to any of the sanctions,
661
 
prohibitions, restrictions or designation referred to in sub-clause (a);
662
 
 
663
 
(ii) the Buyers are purchasing as principals and not as agent, trustee or nominee of any person with whom
664
 
transactions are prohibited or restricted under sub-clause (a).
665
 
 
666
 
(iii) The Buyers warrant that the proceeds of the Purchase Price have not been derived from any activities
667
 
which are in breach of sanctions or from a person or entity subject to or targeted by sanctions.
668
 
 
669
22.
Payment
670
 
 
671
 (a) At least two (2) Banking days (Japan time) prior to the scheduled Delivery Date, the balance of the Net
672
 
Finance Amount (“USD 44,250,090”) shall be remitted to the account of the Sellers, or the Construction
673
 
Seller as the case may be, as notified in writing by the Sellers to the Buyers. The method of payment the
 
Copyright © 2012 Norwegian Shipbrokers’ Association. All rights reserved.
 

674
Net Finance Amount shall be agreed between the Buyers, Sellers, Sellers’ Bank and Buyer’s Bank, or as
675
the case may be the Builder’s bank, by using corresponding MT199 SWIFT with quadripartite agreement or
676
a similar mutually agreed method (e.g. an Escrow Agreement with an international law firm acting as
677
Escrow Agent on behalf of Buyers and Sellers, in which case the Escrow Agent’s costs not to exceed USD
678
10,000 and to be split 50/50 between the Seller and the Buyer).
679
680
(b) The Sellers shall provide remittance request to the Buyers prior to five (5) banking days before the
681
scheduled delivery date. The Buyers to request their financier to remit the fund only after the remittance
682
notice has been received.
683
684
(c) In case of using a suspense account or Escrow Account, the Buyers shall remit the Net Finance Amount two
685
(2) Banking days prior to the scheduled Delivery Date and such fund to be released only by instruction from
686
the Buyers after confirming Protocol of Delivery and Acceptance has been signed by the Sellers and
687
Buyers.
688
689
(d) USD 44,250,000* (1 month CME TERM SOFR at the time of remittance + 2.0%)/360) per day (the
690
“Remittance Interest Cost”) from the day of remittance of the fund till the actual Delivery Date to be covered
691
by Sellers/Charterers.
692
693
Any charge from the Buyers’ Bank including intermediate bank(s), if any, incurred for remitting shall be for
694
Buyers account.
695
696
Any fees including “holding/lifting” charges requested by the Sellers’ Bank including intermediate bank(s),
697
shall be for Sellers’ account.
698
699
Any fees including holding/lifting charges requested by the Builders’ Bank including intermediate bank(s),
700
shall be for Sellers’ account.
701
702
703
23.
Warranty of Quality
704
On the delivery of the Vessel under this Agreement, the Sellers undertake to assign to the Buyers all their
705
rights, interest and title under the relevant article of the Building Contract dealing with the Vessel’s so called
706
warranty of quality, such assignment being subject to the consent of the Construction Seller.
707
708
24.
Obligations of the Buyers
709
Kenzan Kaiun Co., Limited and Azalea Line, S.A. are jointly and severally liable for the due performance of
710
all of the obligations of the Buyers under this Agreement and each is jointly and severally liable for the
711
obligations of the other.
712
713
714
25.
Counterparts
715
 
 
716
This Agreement may be executed in any number of counterparts and any single counterpart or set of
717
counterparts signed, in either case, by all the parties hereto shall be deemed to constitute a full and original
718
 
agreement for all purposes.
 Kenzan Kaiun Co., Limited Signature (Buyers)
 Nakaza Shipping Company Inc.
 
 Signature (Sellers)
 
 
 /s/ Yutaka Yano
 /s/ Andreas Nikolaos Michalopoulos
 Name: Yutaka Yano
 Name: Andreas Nikolaos Michalopoulos
 Title: Director
 Title: Director/Chief Executive Officer
Copyright © 2012 Norwegian Shipbrokers’ Association. All rights reserved.

 Azalea Line, S.A.
 
719
 Signature (Buyers)
 
  
 
 /s/ Yutaka Yano
 
 Name: Yutaka Yano
 
 Title: Director/President
 
  
 
 Yano Kaiun Co., Ltd.
 Performance Shipping Inc.
 Signature (Guarantor)
 Signature (Guarantor)
 
 
 /s/ Yutaka Yano
 /s/ Andreas Nikolaos Michalopoulos
 Name: Yutaka Yano
 Name: Andreas Nikolaos Michalopoulos
 Title: Director/Representative Director
 Title: Director
Copyright © 2012 Norwegian Shipbrokers’ Association. All rights reserved.

Exhibit 4.27
CHARTERER PERFORMANCE GUARANTEE
IN RESPECT OF THE BAREBOAT CHARTER PARTY (BARECON 2017)
DATED 16 July 2024
MV HULL H1515 tbn “P. MASSPORT”
 
16 July 2024
 
To: Kenzan Kaiun Co., Limited and Azalea Line, S.A.
From: Performance Shipping Inc. (“Guarantor”)
 
Reference is made to Barecon 2017 Bareboat Charter Party and the rider clauses and annexures thereto, dated 16 July 2024 (as amended from time to time, hereinafter referred to
as the “Bareboat Charter Party”), between Nakaza Shipping Company Inc. (hereinafter referred to as “Charterers”) and Kenzan Kaiun Co., Limited and Azalea Line, S.A.
(hereinafter referred to as “Owners”).
1.
In consideration of the Owners entering into the Bareboat Charter Party with the Charterers, we, Performance Shipping Inc., a company organized and existing under the laws of the
Marshall Islands having our registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, The Marshall Islands MH 96960, and being the parent company of
the Charterers, irrevocably and unconditionally guarantee to the Owners and their successors, transferees and assigns the due and punctual performance of all present and future
obligations of the Charterers under the Bareboat Charter Party.
2.
If at any time, the Charterers default in the performance of any terms, provisions, conditions and obligations under the Bareboat Charter Party, we, Performance Shipping Inc. will as
primary obligor and not merely as a surety perform or cause to be performed each and every one of the terms, provisions, conditions and obligations of the Charterer under the
Bareboat Charter Party and will pay on demand any sum in connection with non-performance by the Charterers of any of the terms, provisions, conditions and obligations under the
Bareboat Charter Party that is not paid when it is due and payable.
3.
Any demand made by the Owners under this Performance Guarantee shall be made in writing signed by an authorized signatory of the Owners and shall specify the default of the
Charterers and shall be accompanied by a copy of the notice of such default served on the Charterers by the Owners together with a statement (if any) that the Charterers have failed
to remedy such default within any applicable grace period.
 
4.
The Owners may make more than one demand under this Performance Guarantee
 
5.
Our obligations under this Performance Guarantee shall not be affected by any act, omission, matter or thing, which, but for this paragraph would reduce, release or prejudice any of
our obligations under this Performance Guarantee (without limitation and whether or not known to it or to ourselves), including:
 
 
(a)
any waiver, release or consent granted to, or composition with the Charterers or any other person;
(b)
any incapacity or lack of power, authority or legal personality of or dissolution or change in the legal or beneficial ownership, the members or status of the Charterers or any
other person;
 
(c)
any amendment or variation, however fundamental, to the terms and conditions of the Bareboat Charter Party;
- 1 -

(d)
any unenforceability, illegality or invalidity of any obligation under the Bareboat Charter Party; or
 
(e)
any insolvency, bankruptcy, reorganization, reconstruction, rehabilitation, liquidation or amalgamation of the Charterers, or appointment of any receiver, administrative receiver
or administrator of any of the Charterers’ assets, or any other similar proceedings.
 
We hereby waive (a) any right we may have of first requiring the Owners to take any action, obtain any judgment or enforce any other rights against the Charterers before claiming
from us under this Performance Guarantee, save that a demand must first be made against the Charterers and (b) to the extent permitted by law, all defences of a surety to which we
may be entitled by statute or otherwise, including, protest, presentment, demand for performance, notice of default or non-performance and notice of dishonour.
6.
All payments under this Performance Guarantee shall be made in full without set off or deduction. If any tax or other sum must be deducted from any amount payable by ourselves
under this Performance Guarantee, we shall pay such additional amounts as are necessary to ensure that the Owners receive a net amount equal to the full amount they would have
received before such deductions.
 
7.
The provisions of Clause 34 (Notices) of the Bareboat Charter Party shall apply (mutatis mutandis) to this Performance Guarantee as if it were set out in full with references to this
Performance Guarantee substituted for references to the Bareboat Charter Party and with references to us as Guarantor substituted for references to the Charterers.
 
8.
This Performance Guarantee shall be binding upon the undersigned, its successors and assignees and shall inure to the benefit of and be enforceable by the Owners, their
successors and assignees. We shall have no right to delegate nor assign any of the obligations or liabilities undertaken in this Performance Guarantee without the prior written
consent of the Owners.
 
9.
If, at any time, any provision of this Performance Guarantee is or becomes illegal, invalid or unenforceable in any respect under any law of any jurisdiction, neither the legality,
validity or enforceability of the remaining provisions of this Performance Guarantee under the law of that jurisdiction nor the legality, validity or enforceability of such provision
under the law of any other jurisdiction will in any way be affected or impaired.
10. This Performance Guarantee is intended to create legal relations between us.
 
11. We make the following representations and warranties:
 
(a)
we are a corporation, duly incorporated or formed and validly existing under the laws of our jurisdiction of incorporation or formation;
(b)
the obligations expressed to be assumed by us in this Performance Guarantee are, subject to any general principles of law or equity limiting our obligations which are applicable
to creditors generally, legal, valid, binding and enforceable obligations;
(c)
the entry into and performance by us of this Performance Guarantee do not and will not:
(i)
conflict with any law or regulation applicable to us, our constitutional documents or any agreement or instrument binding upon us or any of our assets, subject to
any general principles of law limiting our obligations which are applicable to creditors generally; or
- 2 -

 
(ii)
constitute a default or termination event (however described) under any agreement or instrument binding on us or any of our assets which would have a material
adverse effect on our ability to perform our payment obligations under this Performance Guarantee; and
 
(d)
subject to any general principles of law limiting our obligations which are applicable to creditors generally, all authorisations necessary for us to enter into and perform this
Performance Guarantee have been obtained and are in full force and effect.
 
12. Subject to the provisions of this Performance Guarantee, in no circumstances whatsoever shall our liability hereunder exceed the liability of the Charterers under the Bareboat Charter
Party.
 
13. This Performance Guarantee and any non-contractual obligations arising from or in connection with it shall be governed by and construed in accordance with English law.
 
14. Clause 33 (Bimco Dispute Resolution Clause 2017) of the Bareboat Charter Party shall apply to this Performance Guarantee as if it was expressly incorporated in this Performance
Guarantee with any necessary modifications.
- 3 -

Yours faithfully,
Performance Shipping Inc.
By:
/s/ Andreas Nikolaos Michalopoulos
 
Name: Andreas Nikolaos Michalopoulos
Title: Director / Chief Executive Officer
By our execution of this Performance Guarantee we agree to the terms of this Performance Guarantee and to be bound by it.
 
Dated: 16 July 2024
Acknowledged and agreed by:
 
Kenzan Kaiun Co., Limited
By:
/s/ Yutaka Yano
 
Name: Yutaka Yano
Title: Director
 
Dated: 16 July 2024
Azalea Line, S.A. 
By:
/s/ Yutaka Yano
 
Name: Yutaka Yano
Title: Director/President 
 
Dated: 16 July 2024
- 4 -

Exhibit 4.28
OWNER PERFORMANCE GUARANTEE
IN RESPECT OF THE BAREBOAT CHARTER PARTY (BARECON 2017)
 DATED 16 July 2024
MV HULL H1515
 
16 July 2024 
To: Nakaza Shipping Company Inc.
From: Yano Kaiun Co., Ltd. (“Guarantor”)
Reference is made to Barecon 2017 Bareboat Charter Party and the rider clauses and annexures thereto, Dated 16 July 2024 (as amended from time to time, hereinafter referred to
as the “Bareboat Charter Party”), between Nakaza Shipping Company Inc. (hereinafter referred to as “Charterers”) and Kenzan Kaiun Co., Limited and Azalea Line, S.A.
(hereinafter referred to as “Owners”).
 
1.
In consideration of the Charterers entering into the Bareboat Charter Party with the Owners, we, Yano Kaiun Co., Ltd., a company organized and existing under the laws of Japan
having our registered office at 1276-1, Ko, Go, Namikata-cho, lmabari City,Ehime pref 799-2110, Japan and being the parent company of the Owners, hereby irrevocably and
unconditionally guarantee to the Charterers and their successors, transferees and assigns the due and punctual performance of all present and future obligations of the Owners
under the Bareboat Charter Party.
2.
If at any time, the Owners or any of them default in the performance of any terms, provisions, conditions and obligations under the Bareboat Charter Party, we Yano Kaiun Co.,
Ltd. will as primary obligor and not merely a surety perform or cause to be performed each and every one of the terms, provisions, conditions and obligations of the Owners or any
of them under the Bareboat Charter Party and will pay on demand any sum in connection with non- performance by the Owners or any of them of any of the terms, provisions,
conditions and obligations under the Bareboat Charter Party that is not paid when it is due and payable.
 
3.
Any demand made by the Charterers under this Performance Guarantee shall be made in writing signed by an authorized signatory of the Charterers and shall specify the default of
the Owners and shall be accompanied by a copy of the notice of such default served on the Owners by the Charterers together with a statement (if any) that the Owners have failed
to remedy such default within any applicable grace period.
4.
The Charterers may make more than one demand under this Performance Guarantee.
5.
Our obligations under this Performance Guarantee shall not be affected by any act, omission, matter or thing, which, but for this paragraph would reduce, release or prejudice any of
our obligations under this Performance Guarantee (without limitation and whether or not known to it or to ourselves), including:
(a) any waiver, release or consent granted to, or composition with the Owners or any of them or any other person;
 
(b) any incapacity or lack of power, authority or legal personality of or dissolution or change in the legal or beneficial ownership, the members or status of the Owners or any of
them or any other person;
 
(c) any amendment or variation, however fundamental, to the terms and conditions of the Bareboat Charter Party;
 
- 1 - 
 

(d) any unenforceability, illegality or invalidity of any obligation under the Bareboat Charter Party; or
 
(e) any insolvency, bankruptcy, reorganization, reconstruction, rehabilitation, liquidation or amalgamation of the Owners or any of them, or appointment of any receiver,
administrative receiver or administrator of any of the Owners’ assets, or any other similar proceedings.
 
We hereby waive (a) any right we may have of first requiring the Charterers to take any action, obtain any judgment or enforce any other rights against the Owners before claiming from
us under this Performance Guarantee, save that a demand must first be made against the Owners and (b) to the extent permitted by law, all defences of a surety to which we may be
entitled by statute or otherwise, including, protest, presentment, demand for performance, notice of default or non- performance and notice of dishonour.
6.
All payments under this Performance Guarantee shall be made in full without set off or deduction. If any tax or other sum must be deducted from any amount payable by ourselves
under this Performance Guarantee, we shall pay such additional amounts as are necessary to ensure that the Charterers receive a net amount equal to the full amount they would
have received before such deductions.
7.
The provisions of Clause 34 (Notices) of the Bareboat Charter Party shall apply (mutatis mutandis) to this Performance Guarantee as if it were set out in full with references to this
Performance Guarantee substituted for references to the Bareboat Charter Party and with references to us as Guarantor substituted for references to the Owners.
8.
This Performance Guarantee shall be binding upon the undersigned, its successors and assignees and shall inure to the benefit of and be enforceable by the Charterers, their
successors and assignees. We shall have no right to delegate nor assign any of the obligations or liabilities undertaken in this Performance Guarantee without the prior written
consent of the Charterers.
9.
If, at any time, any provision of this Performance Guarantee is or becomes illegal, invalid or unenforceable in any respect under any law of any jurisdiction, neither the legality,
validity or enforceability of the remaining provisions of this Performance Guarantee under the law of that jurisdiction nor the legality, validity or enforceability of such provision
under the law of any other jurisdiction will in any way be affected or impaired.
10. This Performance Guarantee is intended to create legal relations between us.
11. We make the following representations and warranties:
 
(a) we are a corporation, duly incorporated or formed and validly existing under the laws of our jurisdiction of incorporation or formation;
 
(b) the obligations expressed to be assumed by us in this Performance Guarantee are, subject to any general principles of law or equity limiting our obligations which are applicable
to creditors generally, legal, valid, binding and enforceable obligations;
(c) the entry into and performance by us of this Performance Guarantee do not and will not:
(i)
conflict with any law or regulation applicable to us, our constitutional documents or any agreement or instrument binding upon us or any of our assets, subject to any
general principles of law limiting our obligations which are applicable to creditors generally; or
 
- 2 - 
 

(ii) constitute a default or termination event (however described) under any agreement or instrument binding on us or any of our assets which would have a material adverse
effect on our ability to perform our payment obligations under this Performance Guarantee; and
 
(d) subject to any general principles of law limiting our obligations which are applicable to creditors generally, all authorisations necessary for us to enter into and perform this
Performance Guarantee have been obtained and are in full force and effect.
12. Subject to the provisions of this Performance Guarantee, in no circumstances whatsoever shall our liability hereunder exceed the liability of the Owners under the Bareboat Charter
Party.
13. This Performance Guarantee and any non-contractual obligations arising from or in connection with it shall be governed by, and construed in accordance with, English law.
 
14. Clause 33 (Bimco Dispute Resolution Clause 2017) of the Bareboat Charter Party shall apply to this Performance Guarantee as if it was expressly incorporated in this Performance
Guarantee with any necessary modifications.
 
- 3 - 
 

Yours faithfully,
 
 
 
Yano Kaiun Co., Ltd.
 
 
 
By:
 /s/ Yutaka Yano
 
Name: Yutaka Yano
 
Title: Director/Representative Director
 
 
By our execution of this Performance Guarantee we agree to the terms of this Performance Guarantee and to be bound by it.
Dated: 16 July 2024
Acknowledged and agreed by:
 
 
 
Nakaza Shipping Company Inc.
 
 
 
By:  /s/ Andreas Nikolaos Michalopoulos
 
 
Name: Andreas Nikolaos Michalopoulos
Title: Director
 
 
 
Dated: 16 July 2024
 
- 4 - 
 

Exhibit 4.29
 
JFVSPV2024L110-01
1. Shipbroker
N/A
2. Place and date
 
24 October 2024
 3. Owners/Place of business (Cl. 1)
4. Bareboat Charterers/Place of business (Cl. 1)
 
 
 
 
Huican (Tianjin) Shipping Leasing Co., Ltd., a corporation incorporated under the
laws of the People’s Republic of China whose registered oﬃce is at Room 202,
No.6262, Aozhou Road, (Dongjiang Comprehensive Free Trade Zone), Tianjin Pilot
Free Trade Zone (No. 10214, Dongjiang Business Secretary Service Co., Ltd. Free
Trade Zone)
Sri Lanka Shipping Company Inc., a corporation incorporated and existing under the
laws of the Republic of Marshall Islands whose registered address is at Trust
Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands
MH96960
 
 
 
 
5. Vessel’s name, call sign and ﬂag (Cl. 1 and 3)
 
Hull No. H1596, TBA, The Republic of the Marshall Islands
 
 
 
 
6. Type of Vessel
7. GT/NT
 
 
 
 
Product/Crude Oil Tanker
 
As per Shipbuilding Contract
 
 
 
 
8
When/Where built
9. Total DWT (abt.) in metric tons on summer 
 
 
 
 
2026/China
 
freeboard
 
 
 
 
 
As per Shipbuilding Contract
 
 
 
 
10. Classiﬁcaton Society (Cl. 3)
11. Date of last special survey by the Vessel’s 
 
classiﬁcaton society
 
Lloyd’s Register (LR)
 
 
 
 
Not applicable
 
12. Further particulars of Vessel (also indicate minimum number of months’ validity of class certificates agreed acc. to Cl. 3)
 
 
 
 
 
N/A
 
 
 
 
 
 
 
 
 
 
Copyright © 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon document will constitute an infringement of BIMCO’s copyright.
Explanatory notes are available from BIMCO at www.bimco.org. First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001.

13. Port or Place of delivery (Cl. 3)
Back to back with MOA delivery
14. Time for delivery (Cl. 4)
SEE CLAUSE 34
15. Cancelling date (Cl. 5)
SEE CLAUSE 33
 
 
 
 
 
 
16.  Port or Place of redelivery (Cl. 15)
17.  No. of months’ validity of trading and class 
certificates upon redelivery (Cl. 15)
SEE CLAUSE 40
SIX (6) MONTHS
 
 
 
 
18. Running days’ notice if other than stated in Cl. 4
19. Frequency of dry-docking (Cl. 10(g))
N/A
In accordance with Classiﬁcation Society or
requirements of Flag State
 
 
 
 
20. Trading limits (Cl. 6)
 
 
 
 
 
 
 
Worldwide within International Navigating Limits or otherwise covered by the Insurances reasonably , please also see Clause 46.1(s)
 
 
 
 
21. Charter period (Cl. 2)
22. Charter hire (Cl. 11)
 
SEE CLAUSE 32
 
SEE CLAUSE 36
 
 
 
 
23. New class and other safety requirements (state percentage of Vessel’s insurance value acc. to Box 29)(Cl. 10(a)(ii))
 
 
 
 
 
 N/A
 
 
 
 
 
 
24.  Rate of interest payable acc. to Cl. 11 (f) and, if applicable, acc. to PART IV
 25. Currency and method of payment (Cl. 11)
 
 
 
 
 
SEE CLAUSE 36
 
USD/BANK TRANSFER
 
 
 
 
26. Place of payment; also state beneﬁciary and bank account (Cl. 11)
27. Bank guarantee/bond (sum and place) (Cl. 24) (optional)
 
 
 
 
 
To be paid into the Operating Account
 
SEE CLAUSE 24
 
 
 
 
28.  Mortgage(s), if any (state whether 12(a) or (b) applies; if 12(b) applies state date of
Financial Instrument and name of Mortgagee(s)/Place of business) (Cl. 12)
29 Insurance (hull and machinery and war risks) (state value acc. to Cl. 13(f) or, if
applicable, acc. to Cl. 14(k)) (also state if Cl. 14 applies)
 
 
 
 
 
 SEE CLAUSE 57.2
 
SEE CLAUSE 38 - CLAUSE 14 DOES NOT APPLY
 
 
 
 
30. Additonal insurance cover, if any, for Owners’ account limited to (Cl. 13(b) or, if
applicable, Cl. 14(g))
31. Additonal insurance cover, if any, for Charterers’ account limited to (Cl. 13(b) or, if
applicable, Cl. 14(g))
 
 
 
 
 
SEE CLAUSE 38
 
N/A
 
 
 
 
32.  Latent defects (only to be ﬁlled in if period other than stated in Cl. 3)
 33.  Brokerage commission and to whom payable (Cl. 27)
 
 
 
 
 
N/A
 
N/A
 
 
 
 
Copyright © 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon document will constitute an infringement of BIMCO’s copyright.
Explanatory notes are available from BIMCO at www.bimco.org. First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001.

34.  Grace period (state number of clear banking days) (Cl. 28)
35. Dispute Resolution (state 30(a), 30(b) or 30(c); if 30(c) agreed Place of Arbitration must
be stated (Cl. 30)
 
 
 
 
 
N/A
 
choose an item   SEE CLAUSE 30(a)
 
 
 
 
 36.  War cancellation (indicate countries agreed) (Cl. 26(f))
 
 
 
 
 
 
 
N/A
 
 
 
 
 
 
 37.   Newbuilding Vessel (indicate with “yes” or “no” whether PART III applies) (optional)
38. Name and place of Builders (only to be ﬁlled in if PART III applies)
 
 
 
 
 
No, Part III does not apply
 
N/A
 
 
 
 
39.  Vessel’s Yard Building No. (only to be ﬁlled in if PART III applies)
40.  Date of Building Contract (only to be ﬁlled in if PART III applies)
 
 
 
 
41. Liquidated damages and costs shall accrue to (state party acc. to Cl. 1)
 
 
 
 
 
 
 
(a)  N/A
 
 
 
 
 
 
 
(b)
 
 
 
 
 
 
 
(c)
 
 
 
 
 
42.  Hire/Purchase agreement (indicate with “yes” or “no” whether PART IV applies)
(optional)
43.  Bareboat Charter Registry (indicate with “yes” or “no” whether PART V applies)
(optional)
 
 
 
 
 
NO, PART IV DOES NOT APPLY
 
NO, PART V DOES NOT APPLY
 
 
 
 
44.  Flag and Country of the Bareboat Charter Registry (only to be ﬁlled in if PART V
applies)
45. Country of the Underlying Registry (only to be ﬁlled in if PART V applies)
 
 
 
 
 
N/A
 
N/A
 
 
 
 
46.  Number of additional clauses covering special provisions, if agreed
 
 
 
 
 
 
 
CLAUSE 32 TO CLAUSE 59
 
 
 
 
 
 
(1)  PREAMBLE - It is mutually agreed that this Contract shall be performed subject to the conditions contained in this Charter which shall include PART I and PART II. In the event of a
conﬂict of conditions, the provisions of PART I shall prevail over those of PART II to the extent of such conﬂict but no further. It is further mutually agreed that PART III and/or PART IV
and/or PART V shall only apply and only form part of this Charter if expressly agreed and stated in Boxes 37, 42 and 43. If PART III and/or PART IV and/or PART V apply, it is further
agreed that in the event of a conﬂict of conditions, the provisions of PART I and PART II shall prevail over those of PART III and/or PART IV and/or PART V to the extent of such
conﬂict but no further.
 
(2) BACKGROUND
(A)  Pursuant to the Shipbuilding Contract, the Charterers have agreed to purchase and the SBC Sellers have agreed to sell the Vessel subject to and in accordance with the terms and
conditions therein.
(B)   Pursuant to the Initial MOA, the Charterers have agreed to sell and the Sellers have agreed to buy the Vessel from the Charterers subject to and in accordance with the terms and
conditions of the Initial MOA.
(C) Pursuant to the MOA, the Sellers have agreed to sell and the Owners have agreed to buy the Vessel from the Sellers subject to and in accordance with the terms and conditions of the
MOA.
(D) Subject to and in accordance with the terms of this Charter, the Oweners have agreed to bareboat charter the vessel to the Charters.
Copyright © 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon document will constitute an infringement of BIMCO’s copyright.
Explanatory notes are available from BIMCO at www.bimco.org. First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001.

Signature (Owners)
Signature (Charterers)
 
 
/s/ Zhang Xinhang
/s/ Andreas Nikolaos Michalopoulos
For and on behlf of
For and on behlf of
Huican (Tianjin) Shipping Leasing Co,., Ltd. 
Sri Lanka Shipping Company Inc.
Name :  Zhang Xinhang
Name: Andreas Nikolaos Michalopoulos
Title:    Attorney-in-fact
Title : Attorney- in-fact
Copyright © 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon document will constitute an infringement of BIMCO’s copyright.
Explanatory notes are available from BIMCO at www.bimco.org. First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001.

PART II
1
1.
Deﬁnitions
2
In this Charter, the following terms shall have the meanings hereby assigned to them:
 
3
“The Owners” shall mean the party identiﬁed in Box 3;
 
4
“The Charterers” shall mean the party identiﬁed in Box 4;
 
5
“The Vessel” shall mean the vessel named in Box 5 and with particulars as stated in Boxes 6 to 12.
 
6
“Financial Instrument” means the mortgage, deed of covenant or other such ﬁnancial security instrument as
7
annexed to this Charter and stated in Box 28.
 
8
2.
Charter Period
9
In consideration of the hire detailed in Box 22, the Owners have agreed to let and the Charterers have agreed to
10
hire the Vessel for the period stated in Box 21 (“The Charter Period”). See also Clause 32.
 
11
3.
Delivery
12
(not applicable when Part III applies, as indicated in Box 37)
 
13
(a) The Owners shall before and at the time of delivery exercise due diligence to make the Vessel seaworthy and in
14
every respect ready in hull, machinery and equipment for service under this Charter.
 
15
The Vessel shall be delivered by the Owners and taken over by the Charterers at the port or place indicated in
16
Box 13 in such ready safe berth as the Charterers may direct.
 
17
(b) The Vessel shall be properly documented on delivery in accordance with the laws of the Flag State ﬂag state indicated in
18
Box 5 and the requirements of the classiﬁcation society stated in Box 10. The Vessel upon delivery shall have her
19
survey cycles up to date and trading and class certiﬁcates valid for at least the number of months agreed in Box
20
12.
21
(c) The delivery of the Vessel by the Owners and the taking over of the Vessel by the Charterers shall constitute a
22
full performance by the Owners of all the Owners’ obligations under this Clause 3, and thereafter the Charterers
23
shall not be entitled to make or assert any claim against the Owners on account of any conditions,
24
representations or warranties expressed or implied with respect to the Vessel but the Owners shall be liable for
25
the cost of but not the time for repairs or renewals occasioned by latent defects in the Vessel, her machinery or
26
appurtenances, existing at the time of delivery under this Charter, provided such defects have manifested
27
themselves within twelve (12) months after delivery unless otherwise provided in Box 32.
 
28 
4.
Time for Delivery ( See Clause 34)
29
(not applicable when Part III applies, as indicated in Box 37)
 
30
The Vessel shall not be delivered before the date indicated in Box 14 without the Charterers’ consent and the
31
Owners shall exercise due diligence to deliver the Vessel not later than the date indicated in Box 15.
 
32
Unless otherwise agreed in Box 18, the Owners shall give the Charterers not less than thirty (30) running days’
33
preliminary and not less than fourteen (14) running days’ deﬁnite notice of the date on which the Vessel is
34
expected to be ready for delivery. The Owners shall keep the Charterers closely advised of possible changes in
35
the Vessel’s position.
 
36
5.
Cancelling (See Clause 33)
37
(not applicable when Part III applies, as indicated in Box 37)
 
38
(a) Should the Vessel not be delivered latest by the cancelling date indicated in Box 15, the Charterers shall have the
39
option of cancelling this Charter by giving the Owners notice of cancellation within thirty-six (36) running hours
40
after the cancelling date stated in Box 15, failing which this Charter shall remain in full force and eﬀect.

PART II
41
(b) If it appears that the Vessel will be delayed beyond the cancelling date, the Owners may, as soon as they are in
42
a position to state with reasonable certainty the day on which the Vessel should be ready, give notice thereof to
43
the Charterers asking whether they will exercise their option of cancelling, and the option must then be declared
44
within one hundred and sixty-eight (168) running hours of the receipt by the Charterers of such notice or within
45
thirty-six (36) running hours after the cancelling date, whichever is the earlier. If the Charterers do not then
46
exercise their option of cancelling, the seventh day after the readiness date stated in the Owners’ notice shall be
47
substituted for the cancelling date indicated in Box 15 for the purpose of this Clause 5.
 
48
(c) Cancellation under this Clause 5 shall be without prejudice to any claim the Charterers may otherwise have on
49
the Owners under this Charter.
 
50
6.
Trading Restrictions
51
The Vessel shall be employed in lawful trades for the carriage of suitable lawful merchandise operation within the trading
52
limits indicated in Box 20.
 
53
The Charterers undertake not to employ the Vessel or suﬀer the Vessel to be employed otherwise than in
54
conformity with the terms of the contracts of insurance (including any warranties expressed or implied therein)
55
without ﬁrst obtaining the consent of the insurers to such employment and complying with such requirements
56
as to extra premium or otherwise as the insurers may prescribe.
 
57
The Charterers also undertake not to employ the Vessel or suﬀer her employment in any trade or business which
58
is forbidden by the law of any country to which the Vessel may sail or is otherwise illicit or in carrying illicit or
59
prohibited goods or in any manner whatsoever which may render her liable to condemnation, destruction,
60
seizure or conﬁscation.
 
61
Notwithstanding any other provisions contained in this Charter it is agreed that nuclear fuels or radioactive
62
products or waste are speciﬁcally excluded from the cargo permitted to be loaded or carried under this Charter.
63
This exclusion does not apply to radio-isotopes used or intended to be used for any industrial, commercial,
64
agricultural, medical or scientiﬁc purposes provided the Owners’ prior approval has been obtained to loading
65
thereof.
 
66
7.
Surveys on Delivery and Redelivery (See Clause 40.6)
67
(not applicable when Part III applies, as indicated in Box 37)
 
68
The Owners and Charterers shall each appoint surveyors for the purpose of determining and agreeing in writing
69
the condition of the Vessel at the time of delivery and redelivery hereunder. The Owners shall bear all expenses
70
of the On-hire Survey including loss of time, if any, and the Charterers shall bear all expenses of the Oﬀ-hire
71
Survey including loss of time, if any, at the daily equivalent to the rate of hire or pro rata thereof.
 
72
8.
Inspection (See Clause 46A)
73
The Owners shall have the right at any time after giving reasonable notice to the Charterers to inspect or survey
74
the Vessel or instruct a duly authorised surveyor to carry out such survey on their behalf:
 
75
(a) to ascertain the condition of the Vessel and satisfy themselves that the Vessel is being properly repaired and
76
maintained. The costs and fees for such inspection or survey shall be paid by the Owners unless the Vessel is
77
found to require repairs or maintenance in order to achieve the condition so provided;
 
78
(b) in dry-dock if the Charterers have not dry-docked Her in accordance with Clause 10(g). The costs and fees for
79
such inspection or survey shall be paid by the Charterers; and
 
80 
(c) for any other commercial reason they consider necessary (provided it does not unduly interfere with the
81
commercial operation of the Vessel). The costs and fees for such inspection and survey shall be paid by the
82
Owners.
 
83
All time used in respect of inspection, survey or repairs shall be for the Charterers’ account and form part of the

PART II
 
84
Charter Period.
 
85
The Charterers shall also permit the Owners to inspect the Vessel’s log books whenever requested and shall
86
whenever required by the Owners furnish them with full information regarding any casualties or other accidents
87
or damage to the Vessel.
 
88
9.
Inventories, Oil and Stores
89
A complete inventory of the Vessel’s entire equipment, outfit including spare parts, appliances and of all
90
consumable stores on board the Vessel shall be made by the Charterers in conjunction with the Owners on
91
delivery and again on redelivery of the Vessel. The Charterers and the Owners, respectively, shall at the time of
92
delivery and redelivery take over and pay for all bunkers, lubricating oil, unbroached provisions, paints, ropes
93
and other consumable stores (excluding spare parts) in the said Vessel at the then current market prices at the
94
ports of delivery and redelivery, respectively. The Charterers shall ensure that all spare parts listed in the
95
inventory and used during the Charter Period are replaced at their expense prior to redelivery of the Vessel. The Charteres shall also provide the Owners with a complete
inventory of all bunkers, lubricating oil, unbroached provisions, paints, ropes and other consumable stores in the Vessel on redelivery of the Vessel.
 
96
10. Maintenance and Operation
97
(a) (i) Maintenance and Repairs - During the Charter Period the Vessel shall be in the full possession and at the
98
absolute disposal for all purposes of the Charterers and under their complete control in every respect. The
99
Charterers shall maintain the Vessel, her machinery, boilers, appurtenances and spare parts in a good state of
100
repair, in eﬃcient operating condition and in accordance with good commercial maintenance practice and,
101
except as provided for in Clause 14(l), if applicable, at their own expense they shall at all times keep the Vessel’s
102
Class fully up to date with the Classiﬁcation Society indicated in Box 10 and maintain all other necessary
103
certiﬁcates in force at all times.
 
104
(ii) New Class and Other Safety Requirements - In the event of any improvement, structural changes or new
105
equipment becoming necessary for the continued operation of the Vessel by reason of new class requirements
106
or by compulsory legislation, such changes can be made without the prior written consent of the Owners and the Charterers shall ensure that the same are complied with and
the time and cost of compliance shall be on the Charterers’ account. costing (excluding the Charterers’ loss of time) more than the percentage stated in
107
Box 23, or if Box 23 is left blank, 5 per cent of the Vessel’s insurance value as stated in Box 29, then the extent, if
108
any, to which the rate of hire shall be varied and the ratio in which the cost of compliance shall be shared between
109
the parties concerned in order to achieve a reasonable distribution thereof as between the Owners and the
110
Charterers having regard, inter alia, to the length of the period remaining under this Charter shall, in the absence
111
of agreement, be referred to the dispute resolution method agreed in Clause 30.
 
112
(iii) Financial Security - The Charterers shall maintain ﬁnancial security or responsibility in respect of third party
113
liabilities as required by any government, including federal, state or municipal or other division or authority
114
thereof, to enable the Vessel, without penalty or charge, lawfully to enter, remain at, or leave any port, place,
115
territorial or contiguous waters of any country, state or municipality in performance of this Charter without any
116
delay. This obligation shall apply whether or not such requirements have been lawfully imposed by such
117
government or division or authority thereof.
 
118
The Charterers shall make and maintain all arrangements by bond or otherwise as may be necessary to satisfy
119
such requirements at the Charterers’ sole expense and the Charterers shall indemnify the Owners against all
120
consequences whatsoever (including loss of time) for any failure or inability to do so.
 
121
(b) Operation of the Vessel - The Charterers shall at their own expense and by their own procurement man, victual,
122
navigate, operate, supply, fuel and, whenever required, repair the Vessel during the Charter Period and they
123
shall pay all charges and expenses of every kind and nature whatsoever incidental to their use and operation of
124
the Vessel under this Charter, including annual ﬂag state fees and any foreign general municipality and/or state
125
taxes. The Master, oﬃcers and crew of the Vessel shall be the servants of the Charterers for all purposes
126
whatsoever, even if for any reason appointed by the Owners.

PART II
127
Charterers shall comply with the regulations regarding oﬃcers and crew in force in the country of the Vessel’s
128
ﬂag or any other applicable law.
 
129
(c) The Charterers shall keep the Owners and the mortgagee(s) advised of the intended employment, planned dry-
130
docking and major repairs of the Vessel, as reasonably required.
 
131
(d) Flag and Name of Vessel – During the Charter Period, the Charterers shall have the liberty to paint the Vessel in
132
their own colours, install and display their funnel insignia and ﬂy their own house ﬂag. The Charterers shall also
133
have the liberty, with the Owners’ consent, which shall not be unreasonably withheldand which, subject to Clause 41.4, shall be granted in the case of a ﬂag of the relevant
Flag State, to change the ﬂag and/or
134
the name of the Vessel during the Charter Period. Painting and re-painting, instalment and re-instalment,
135
registration and re-registration, if required by the Owners, shall be at the Charterers’ expense and time.
 
136
(e) Changes to the Vessel – Subject to Clause 10(a)(ii), the Charterers shall make no structural changes in the Vessel
137
or changes in the machinery, boilers, appurtenances or spare parts thereof without in each instance ﬁrst securing
138
the Owners’ approval thereof. If the Owners so agree, the Charterers shall, if the Owners so require, restore the
139
Vessel to its former condition before the termination of this Charter.
 
140
(f)
Use of the Vessel’s Outfit, Equipment and Appliances - The Charterers shall have the use of all outfit, equipment,
141
and appliances on board the Vessel at the time of delivery, provided the same or their substantial equivalent
142
shall be returned to the Owners on redelivery in the same good order and condition as when received, ordinary
143
wear and tear excepted. The Charterers shall from time to time during the Charter Period replace such items of
144
equipment as shall be so damaged or worn as to be unﬁt for use. The Charterers are to procure that all repairs
145
to or replacement of any damaged, worn or lost parts or equipment be eﬀected in such manner (both as regards
146
workmanship and quality of materials) as not to diminish the value of the Vessel. Title of any equipment so replaced shall, unless agreed between the Owners and the
Charterers, remain with the Owners. The Charterers have the right
147
to ﬁt additional equipment at their expense and risk (provided that no permanent structural damage is caused to the Vessel by reason of such installation) and but the
Charterers shall, at their expense remove such equipment and make good any damage caused by the ﬁtting or removal of such additional equipment at the end
148
of the period if requested by the Owners at the time of redelivery of the Vessel. Any equipment including radio equipment on hire on the Vessel at
149
time of delivery shall be kept and maintained by the Charterers and the Charterers shall assume the obligations
150
and liabilities of the Owners under any lease contracts in connection therewith and shall reimburse the Owners
151
for all expenses incurred in connection therewith, also for any new equipment required in order to comply with
152
radio regulations.
 
153
(g) Periodical Dry-Docking - The Charterers shall dry-dock the Vessel and clean and paint her underwater parts
154
whenever the same may be necessary, but not less than once during the period stated in Box 19 or, if Box 19 has
155
been left blank, every sixty (60) calendar months after delivery or such other period as may be required by the
156
Classiﬁcation Society or ﬂag state.
 
157
11. Hire (See Clause 36)
158
(a) The Charterers shall pay hire due to the Owners punctually in accordance with the terms of this Charter in respect
159
of which time shall be of the essence.
 
160
(b) The Charterers shall pay to the Owners for the hire of the Vessel a lump sum in the amount indicated in Box 22
161
which shall be payable not later than every thirty (30) running days in advance, the ﬁrst lump sum being payable
162
on the date and hour of the Vessel’s delivery to the Charterers. Hire shall be paid continuously throughout the
163
Charter Period.
 
164
(c) Payment of hire shall be made in cash without discount in the currency and in the manner indicated in Box 25
165
and at the place mentioned in Box 26.

PART II
166
(d) Final payment of hire, if for a period of less than thirty (30) running days, shall be calculated proportionally
167
according to the number of days and hours remaining before redelivery and advance payment to be eﬀected
168
accordingly.
 
169
(e) Should the Vessel be lost or missing, hire shall cease from the date and time when she was lost or last heard of.
170
The date upon which the Vessel is to be treated as lost or missing shall be ten (10) days after the Vessel was last
171
reported or when the Vessel is posted as missing by Lloyd’s, whichever occurs ﬁrst. Any hire paid in advance to
172
be adjusted accordingly.
 
173
(f)
Any delay in payment of hire shall entitle the Owners to interest at the rate per annum as agreed in Box 24. If
174
Box 24 has not been ﬁlled in, the three months Interbank oﬀered rate in London (LIBOR or its successor) for the
175
currency stated in Box 25, as quoted by the British Bankers’ Association (BBA) on the date when the hire fell due,
176
increased by 2 per cent, shall apply.
 
177
(g) Payment of interest due under sub-clause 11(f) shall be made within seven (7) running days of the date of the
178
Owners’ invoice specifying the amount payable or, in the absence of an invoice, at the time of the next hire
179
payment date.
 
180
12. Mortgage
181
(only to apply if Box 28 has been appropriately ﬁlled in)
 
182
(a)* The Owners warrant that they have not eﬀected any mortgage(s) of the Vessel and that they shall not eﬀect any
183
mortgage(s) without the prior consent of the Charterers, which shall not be unreasonably withheld.
 
184
(b)* The Vessel chartered under this Charter may be is ﬁnanced by a mortgage(s) according to the Financial Instruments.
185
The Charterers undertake to comply, and provide such information and documents to enable the Owners to
186
comply, with all such instructions or directions in regard to the employment, insurances, operation, repairs and
187
maintenance of the Vessel as laid down in the Financial Instruments or as may be reasonably directed from time to time
188
during the currency of the Charter by the mortgagee(s) in conformity with each the Financial Instrument (if any). The
189
Charterers conﬁrm that, for this purpose, they have acquainted themselves with all relevant terms, conditions
190
and provisions of the Financial Instrument and agree to acknowledge each Financial Instrument (if any) this in writing in any form that may be
191
required by the mortgagee(s). The Owners warrant that they have not eﬀected any mortgage(s) other than stated
192
in Box 28 and that they shall not agree to any amendment of the mortgage(s) referred to in Box 28 or eﬀect any
193
other mortgage(s) without the prior consent of the Charterers, which shall not be unreasonably withheld.
194
*(Optional, Clauses 12(a) and 12(b) are alternatives; indicate alternative agreed in Box 28).
 
195
13. Insurance and Repairs (See also Clause 38)
196
(a) Without prejudice to Clause 38, dDuring the Charter Period the Vessel shall be kept insured by the Charterers at their expense against hull and
197
machinery, war and Protection and Indemnity risks (and any risks against which it is compulsory to insure for the
198
operation of the Vessel, including but not limited to maintaining ﬁnancial security in accordance with sub-clause 10(a)(iii)) in such
199
form as the Owners shall in writing approve, which approval shall not be unreasonably withheld. Such insurances
200
shall be arranged by the Charterers to protect the interests of both the Owners and the Charterers and the
201
mortgagee(s) (if any), and the Charterers shall be at liberty to protect under such insurances the interests of any
202
managers they may appoint. Insurance policies shall cover the Owners and the Charterers according to their
203
respective interests.

PART II
204
Subject to the provisions of the agreed loss payable clauses,the Financial Instrument, if any, and the approval of the Owners and the insurers,
205
the Charterers shall eﬀect all insured repairs and shall undertake settlement and reimbursement from the
206
insurers of all costs in connection with such repairs as well as insured charges, expenses and liabilities to the
207
extent of coverage under the insurances herein provided for.
208
The Charterers also to remain responsible for and to eﬀect repairs and settlement of costs and expenses incurred
209
thereby in respect of all other repairs not covered by the insurances and/or not exceeding any possible
210
franchise(s) or deductibles provided for in the insurances.
211
All time used for repairs under the provisions of sub-clause 13(a) and for repairs of latent defects according to
212
Clause 3(c) above, including any deviation, shall be for the Charterers’ account.
 
213
(b) If the conditions of the above insurances permit additional insurance to be placed by the parties, such cover shall
214
be limited to the amount for each party set out in Box 30 and Box 31, respectively. The Owners or the Charterers
215
as the case may be shall immediately furnish the Owners other party with particulars of any additional insurance eﬀected,
216
including copies of any cover notes or policies and the written consent of the insurers of any such required
217
insurance in any case where the consent of such insurers is necessary.
 
218
(c) The Charterers shall upon the request of the Owners, provide information and promptly execute such documents
219
as may be required to enable the Owners to comply with the insurance provisions of each the Financial Instrument (if any).
 
220
(d) Subject to the provisions of the Financial Instrument, if any, sShould the Vessel become an actual, constructive,
221
compromised or agreed a Ttotal Lloss under the insurances required under sub-clause 13(a), all insurance payments
222
for such loss shall be paid to the Owners (or if applicable, its ﬁnanciers) in accordance with the agreed loss payable clauses. who shall distribute the moneys between the
Owners and the Charterers
223
according to their respective interests. The Charterers undertake to notify the Owners and the mortgagee(s), if
224
any, of any occurrences in consequence of which the Vessel is likely to become a Ttotal Lloss as deﬁned in this
225
Clause.
 
226
(e) The Owners shall upon the request of the Charterers, promptly execute such documents as may be required to
227
enable the Charterers to abandon the Vessel to insurers and claim a constructive total loss.
 
228
(f)
For the purpose of insurance coverage against hull and machinery and war risks under the provisions of sub-
229
clause 13(a), the value of the Vessel is the sum indicated in Clause 38Box 29.
 
230
14. Insurance, Repairs and Classiﬁcation
231
(Optional, only to apply if expressly agreed and stated in Box 29, in which event Clause 13 shall be considered
232
deleted).
 
233
(a) During the Charter Period the Vessel shall be kept insured by the Owners at their expense against hull and
234
machinery and war risks under the form of policy or policies attached hereto. The Owners and/or insurers shall
235
not have any right of recovery or subrogation against the Charterers on account of loss of or any damage to the
236
Vessel or her machinery or appurtenances covered by such insurance, or on account of payments made to
237
discharge claims against or liabilities of the Vessel or the Owners covered by such insurance. Insurance policies
238
shall cover the Owners and the Charterers according to their respective interests.
 
239
(b) During the Charter Period the Vessel shall be kept insured by the Charterers at their expense against Protection
240
and Indemnity risks (and any risks against which it is compulsory to insure for the operation of the Vessel,
241
including maintaining ﬁnancial security in accordance with sub-clause 10(a)(iii)) in such form as the Owners shall
242
in writing approve which approval shall not be unreasonably withheld.

PART II
243
(c) In the event that any act or negligence of the Charterers shall vitiate any of the insurance herein provided, the
244
Charterers shall pay to the Owners all losses and indemnify the Owners against all claims and demands which
245
would otherwise have been covered by such insurance.
 
246
(d) The Charterers shall, subject to the approval of the Owners or Owners’ Underwriters, eﬀect all insured repairs,
247
and the Charterers shall undertake settlement of all miscellaneous expenses in connection with such repairs as
248
well as all insured charges, expenses and liabilities, to the extent of coverage under the insurances provided for
249
under the provisions of sub-clause 14(a).
250
The Charterers to be secured reimbursement through the Owners’ Underwriters for such expenditures upon
251
presentation of accounts.
 
252
(e) The Charterers to remain responsible for and to eﬀect repairs and settlement of costs and expenses incurred
253
thereby in respect of all other repairs not covered by the insurances and/or not exceeding any possible
254
franchise(s) or deductibles provided for in the insurances.
 
255
(f)
All time used for repairs under the provisions of sub-clauses 14(d) and 14(e) and for repairs of latent defects
256
according to Clause 3 above, including any deviation, shall be for the Charterers’ account and shall form part of
257
the Charter Period.
 
258
The Owners shall not be responsible for any expenses as are incident to the use and operation of the Vessel for
259
such time as may be required to make such repairs.
260
(g) If the conditions of the above insurances permit additional insurance to be placed by the parties such cover shall
261
be limited to the amount for each party set out in Box 30 and Box 31, respectively. The Owners or the Charterers
262
as the case may be shall immediately furnish the other party with particulars of any additional insurance eﬀected,
263
including copies of any cover notes or policies and the written consent of the insurers of any such required
264
insurance in any case where the consent of such insurers is necessary.
 
265
(h) Should the Vessel become an actual, constructive, compromised or agreed total loss under the insurances
266
required under sub-clause 14(a), all insurance payments for such loss shall be paid to the Owners, who shall
267
distribute the moneys between themselves and the Charterers according to their respective interests.
 
268
(i)
If the Vessel becomes an actual, constructive, compromised or agreed total loss under the insurances arranged
269
by the Owners in accordance with sub-clause 14(a), this Charter shall terminate as of the date of such loss.
 
270
(j)
The Charterers shall upon the request of the Owners, promptly execute such documents as may be required to
271
enable the Owners to abandon the Vessel to the insurers and claim a constructive total loss.
 
272
(k) For the purpose of insurance coverage against hull and machinery and war risks under the provisions of sub-
273
clause 14(a), the value of the Vessel is the sum indicated in Box 29.
 
274
(l)
Notwithstanding anything contained in sub-clause 10(a), it is agreed that under the provisions of Clause 14, if
275
applicable, the Owners shall keep the Vessel’s Class fully up to date with the Classiﬁcation Society indicated in
276
Box 10 and maintain all other necessary certiﬁcates in force at all times.
 
277
15. Redelivery - See Clause 40
278
At the expiration of the Charter Period the Vessel shall be redelivered by the Charterers to the Owners at a safe
279
and ice-free port or place as indicated in Box 16, in such ready safe berth as the Owners may direct. The
280
Charterers shall give the Owners not less than thirty (30) running days’ preliminary notice of expected date, range
281
of ports of redelivery or port or place of redelivery and not less than fourteen (14) running days’ deﬁnite notice
282
of expected date and port or place of redelivery.
 
283
Any changes thereafter in the Vessel’s position shall be notiﬁed immediately to the Owners.
 
284
The Charterers warrant that they will not permit the Vessel to commence a voyage (including any preceding

PART II
285
ballast voyage) which cannot reasonably be expected to be completed in time to allow redelivery of the Vessel
286
within the Charter Period. Notwithstanding the above, should the Charterers fail to redeliver the Vessel within
287
the Charter Period, the Charterers shall pay the daily equivalent to the rate of hire stated in Box 22 plus 10 per
288
cent or to the market rate, whichever is the higher, for the number of days by which the Charter Period is
289
exceeded. All other terms, conditions and provisions of this Charter shall continue to apply.
 
290
Subject to the provisions of Clause 10, the Vessel shall be redelivered to the Owners in the same or as good
291
structure, state, condition and class as that in which she was delivered, fair wear and tear not aﬀecting class
292
excepted.
 
293
The Vessel upon redelivery shall have her survey cycles up to date and trading and class certiﬁcates valid for at
294
least the number of months agreed in Box 17.
295
16. Non-Lien
296
The Charterers will not suﬀer, nor permit to be continued, any lien or encumbrance incurred by them or their
297
agents, which might have priority over the title and interest of the Owners in the Vessel (except for Permitted Security Interests). The Charterers further
298
agree to fasten to the Vessel in a conspicuous place and to keep so fastened during the Charter Period a notice
299
reading as follows:
 
300
“This Vessel is the property of (name of Owners). It is under charter to (name of Charterers) and by the terms of
301
the Charter Party neither the Charterers nor the Master have any right, power or authority to create, incur or
302
permit to be imposed on the Vessel any lien whatsoever or a notice in such form as may be required by any mortgagee.”
 
303
17. Indemnity (See Additional Clauses generally)
304
(a) The Charterers shall indemnify the Owners against any loss, damage or expense incurred by the Owners arising
305
out of or in relation to the operation of the Vessel by the Charterers, and against any lien of whatsoever nature
306
arising out of an event occurring during the Charter Period. If the Vessel be arrested or otherwise detained by
307
reason of claims or liens arising out of her operation hereunder by the Charterers, the Charterers shall at their
308
own expense take all reasonable steps to secure that within a reasonable time the Vessel is released, including
309
the provision of bail.
 
310
Without prejudice to the generality of the foregoing, the Charterers agree to indemnify the Owners against all
311
consequences or liabilities arising from the Master, oﬃcers or agents signing Bills of Lading or other documents.
 
312
(b) If the Vessel be arrested or otherwise detained by reason of a claim or claims against the Owners, the Owners
313
shall at their own expense take all reasonable steps to secure that within a reasonable time the Vessel is released,
314
including the provision of bail.
 
315
In such circumstances the Owners shall indemnify the Charterers against any loss, damage or expense incurred
316
by the Charterers (including hire paid under this Charter) as a direct consequence of such arrest or detention.
 
317
18. Lien
 
318
The Owners to have a lien upon all cargoes, sub-hires and sub-freights belonging or due to the Charterers or any
319
sub-charterers and any Bill of Lading freight for all claims under this Charter, and the Charterers to have a lien on
320
the Vessel for all moneys paid in advance and not earned.
 
321
19. Salvage
322
All salvage and towage performed by the Vessel shall be for the Charterers’ beneﬁt and the cost of repairing
323
damage occasioned thereby shall be borne by the Charterers.
 
324
20. Wreck Removal
325
In the event of the Vessel becoming a wreck or obstruction to navigation the Charterers shall indemnify the

PART II
 
326
Owners against any sums whatsoever which the Owners shall become liable to pay and shall pay in consequence
327
of the Vessel becoming a wreck or obstruction to navigation.
 
328
21. General Average
 
329
The Owners shall not contribute to General Average.
 
330
22. Assignment, Sub-Charter and Sale (See Clause 57)
 
331
(a) The Charterers shall not assign this Charter nor sub-charter the Vessel on a bareboat basis except with the prior
332
consent in writing of the Owners, which shall not be unreasonably withheld, and subject to such terms and
333
conditions as the Owners shall approve.
 
334
(b) The Owners shall not sell the Vessel during the currency of this Charter except with the prior written consent of
335
the Charterers, which shall not be unreasonably withheld, and subject to the buyer accepting an assignment of
336
this Charter.
 
337
23. Contracts of Carriage
 
338
(a)* The Charterers are to procure that all documents issued during the Charter Period evidencing the terms and
339
conditions agreed in respect of carriage of goods shall contain a paramount clause incorporating any legislation
340
relating to carrier’s liability for cargo compulsorily applicable in the trade; if no such legislation exists, the
341
documents shall incorporate the Hague-Visby Rules. The documents shall also contain the New Jason Clause and
 
342
the Both-to-Blame Collision Clause.
 
343
(b)* The Charterers are to procure that all passenger tickets issued during the Charter Period for the carriage of
344
passengers and their luggage under this Charter shall contain a paramount clause incorporating any legislation
345
relating to carrier’s liability for passengers and their luggage compulsorily applicable in the trade; if no such
346
legislation exists, the passenger tickets shall incorporate the Athens Convention Relating to the Carriage of
347
Passengers and their Luggage by Sea, 1974, and any protocol thereto.
 
348
*Delete as applicable.
 
349
24. CorporateBank Guarantee
 
350
(Optional, only to apply if Box 27 ﬁlled in)
 
351
The Charterers undertake to furnish, on or about the date of this Charter a corporatebefore delivery of the Vessel, a ﬁrst class bank guarantee from the Guarantoror bond in
the
 
352 -
sum and at the place as indicated in Box 27 as guarantee and the other Security Documents for full performance of their obligations under this
353
Charter.
 
354
25. Requisition/Acquisition
 
355
(a) Subject to the provisions for the Financial Insrtuments (if any), iIn the event of the Requisition for Hire of the Vessel by any governmental or other competent authority
356
(hereinafter referred to as “Requisition for Hire”) irrespective of the date during the Charter Period when
357
“Requisition for Hire” may occur and irrespective of the length thereof and whether or not it be for an indeﬁnite
358
or a limited period of time, and irrespective of whether it may or will remain in force for the remainder of the
359
Charter Period, this Charter shall not be deemed thereby or thereupon to be frustrated or otherwise terminated
360
and the Charterers shall continue to pay the stipulated hire in the manner provided by this Charter until the time
361
when the Charter would have terminated pursuant to any of the provisions hereof always provided however that if all hire has been paid by the Charterers hereunder then
362
in the event of “Requisition for Hire” any Requisition Hire or compensation is received or receivable by the Owners , the same
363
shall be payable to the Charterers during the remainder of the Charter Period or the period of the “Requisition
364
for Hire” whichever be the shorter.

PART II
365
(b) In the event of the Owners being deprived of their ownership in the Vessel by any Compulsory Acquisition of the
366
Vessel or requisition for title by any governmental or other competent authority (hereinafter referred to as
367
“Compulsory Acquisition”), then, irrespective of the date during the Charter Period when “Compulsory
368
Acquisition” may occur, this Charter shall be deemed terminated as of the date of such “Compulsory Acquisition”.
369
In such event Charter Hire to be considered as earned and to be paid up to the date and time of such “Compulsory
370
Acquisition”.
 
371
26. War
 
372
(a) Subject to the provisions of the Financial Insr tuments (if any), fFor the purpose of this Clause, the words “War Risks” shall include any war (whether actual or threatened),
act
373
of war, civil war, hostilities, revolution, rebellion, civil commotion, warlike operations, the laying of mines
374
(whether actual or reported), acts of piracy, acts of terrorists, acts of hostility or malicious damage, blockades
375
(whether imposed against all vessels or imposed selectively against vessels of certain ﬂags or ownership, or
376
against certain cargoes or crews or otherwise howsoever), by any person, body, terrorist or political group, or
 
377
the Government of any state whatsoever, which may be dangerous or are likely to be or to become dangerous
378
to the Vessel, her cargo, crew or other persons on board the Vessel.
 
379
(b) Without ﬁrst obtaining the written consent of the Owners and complying with the terms of Clause 38 and such other requirements (including but not limited to payment of
extra insurance premiums) as may be prescribed by the insurers, the Vessel The Vessel, unless the written consent of the Owners be ﬁrst obtained, shall not continue to or go
through any
380
port, place, area or zone (whether of land or sea), or any waterway or canal, where it reasonably appears that
381
the Vessel, her cargo, crew or other persons on board the Vessel, in the reasonable judgement of the Owners,
382
may be, or are likely to be, exposed to War Risks. Should the Vessel be within any such place as aforesaid, which
383
only becomes dangerous, or is likely to be or to become dangerous, after her entry into it, the Owners shall have
384
the right to require the Vessel to leave such area.
 
385
(c) The Vessel shall not load contraband cargo, or to pass through any blockade, whether such blockade be imposed
386
on all vessels, or is imposed selectively in any way whatsoever against vessels of certain ﬂags or ownership, or
387
against certain cargoes or crews or otherwise howsoever, or to proceed to an area where she shall be subject,
388
or is likely to be subject to a belligerent’s right of search and/or conﬁscation.
 
389 
(d) If the insurers of the war risks insurance, when Clause 14 is applicable, should require payment of premiums
390
and/or calls because, pursuant to the Charterers’ orders, the Vessel is within, or is due to enter and remain within,
391
any area or areas which are speciﬁed by such insurers as being subject to additional premiums because of War
392
Risks, then such premiums and/or calls shall be reimbursed by the Charterers to the Owners at the same time as
393
the next payment of hire is due.
394
(e) The Charterers shall have the liberty:
395
(i) to comply with all orders, directions, recommendations or advice as to departure, arrival, routes, sailing in
396
convoy, ports of call, stoppages, destinations, discharge of cargo, delivery, or in any other way whatsoever, which
397
are given by the Government of the Nation under whose ﬂag the Vessel sails, or any other Government, body or
398
group whatsoever acting with the power to compel compliance with their orders or directions;
 
399
(ii) to comply with the orders, directions or recommendations of any war risks underwriters who have the
400
authority to give the same under the terms of the war risks insurance;
 
401
(iii) to comply with the terms of any resolution of the Security Council of the United Nations, any directives of
402
the European Community, the eﬀective orders of any other Supranational body which has the right to issue and
403
give the same, and with national laws aimed at enforcing the same to which the Owners are subject, and to obey
404
the orders and directions of those who are charged with their enforcement.

PART II
405
(f)
In the event of outbreak of war (whether there be a declaration of war or not)
406
(i) between any two or more of the following countries: the United States of America; Russia; the United Kingdom;
407
France; and the People’s Republic of China,
 
408
(ii) between any two or more of the countries stated in Box 36, both the Owners and the Charterers shall have
409
the right to cancel this Charter, whereupon the Charterers shall redeliver the Vessel to the Owners in accordance
410
with Clause 15, if the Vessel has cargo on board after discharge thereof at destination, or if debarred under this
411
Clause from reaching or entering it at a near, open and safe port as directed by the Owners, or if the Vessel has
412
no cargo on board, at the port at which the Vessel then is or if at sea at a near, open and safe port as directed by
413
the Owners. In all cases hire shall continue to be paid in accordance with Clause 11 and except as aforesaid all
414
other provisions of this Charter shall apply until redelivery.
 
415
27. Commission
416
The Owners to pay a commission at the rate indicated in Box 33 to the Brokers named in Box 33 on any hire paid
417
under the Charter. If no rate is indicated in Box 33, the commission to be paid by the Owners shall cover the
418
actual expenses of the Brokers and a reasonable fee for their work.
 
419
If the full hire is not paid owing to breach of the Charter by either of the parties the party liable therefor shall
420
indemnify the Brokers against their loss of commission.
 
421
Should the parties agree to cancel the Charter, the Owners shall indemnify the Brokers against any loss of
422
commission but in such case the commission shall not exceed the brokerage on one year’s hire.
 
423
28. Termination (See Clause 40 and 44)
424
(a) Charterers’ Default
 
425
The Owners shall be entitled to withdraw the Vessel from the service of the Charterers and terminate the Charter
426
with immediate eﬀect by written notice to the Charterers if:
 
427
(i) the Charterers fail to pay hire in accordance with Clause 11. However, where there is a failure to make punctual
428
payment of hire due to oversight, negligence, errors or omissions on the part of the Charterers or their bankers,
429
the Owners shall give the Charterers written notice of the number of clear banking days stated in Box 34 (as
430
recognised at the agreed place of payment) in which to rectify the failure, and when so rectiﬁed within such
431
number of days following the Owners’ notice, the payment shall stand as regular and punctual.
 
432
Failure by the Charterers to pay hire within the number of days stated in Box 34 of their receiving the Owners’
433
notice as provided herein, shall entitle the Owners to withdraw the Vessel from the service of the Charterers and
434
terminate the Charter without further notice;
 
435
(ii) the Charterers fail to comply with the requirements of:
 
436
(1)  Clause 6 (Trading Restrictions)
 
437
(2)  Clause 13(a) (Insurance and Repairs)
 
438
provided that the Owners shall have the option, by written notice to the Charterers, to give the Charterers a
439
speciﬁed number of days grace within which to rectify the failure without prejudice to the Owners’ right to
440
withdraw and terminate under this Clause if the Charterers fail to comply with such notice;
 
441
(iii) the Charterers fail to rectify any failure to comply with the requirements of sub-clause 10(a)(i) (Maintenance
442
and Repairs) as soon as practically possible after the Owners have requested them in writing so to do and in any
443
event so that the Vessel’s insurance cover is not prejudiced.
444 
(b) Owners’ Default

PART II
 
445
If the Owners shall by any act or omission be in breach of their obligations under this Charter to the extent that
446
the Charterers are deprived of the use of the Vessel and such breach continues for a period of fourteen (14)
447
running days after written notice thereof has been given by the Charterers to the Owners, the Charterers shall
448
be entitled to terminate this Charter with immediate eﬀect by written notce to the Owners.
449
(c) Loss of Vessel
 
450
This Charter shall be deemed to be terminated if the Vessel becomes a total loss or is declared as a constructive
451
or compromised or arranged total loss. For the purpose of this sub-clause, the Vessel shall not be deemed to be
452
lost unless she has either become an actual total loss or agreement has been reached with her underwriters in
453
respect of her constructive, compromised or arranged total loss or if such agreement with her underwriters is
454
not reached it is adjudged by a competent tribunal that a constructive loss of the Vessel has occurred.
 
455 
(d) Either party shall be entitled to terminate this Charter with immediate eﬀect by written notice to the other party
456
in the event of an order being made or resolution passed for the winding up, dissolution, liquidation or
457
bankruptcy of the other party (otherwise than for the purpose of reconstruction or amalgamation) or if a receiver
458
is appointed, or if it suspends payment, ceases to carry on business or makes any special arrangement or
459
composition with its creditors.
460
(e) The termination of this Charter shall be without prejudice to all rights accrued due between the parties prior to
461
the date of termination and to any claim that either party might have.
 
462
29. Repossession
463
In the event of the termination of this Charter in accordance with the applicable provisions of Clause 4428, the
464
Owners shall have the right to repossess the Vessel from the Charterers at her current or next port of call, or at
465
a port or place convenient to them without hindrance or interference by the Charterers, courts or local
466
authorities. Pending physical repossession of the Vessel in accordance with this Clause 29, the Charterers shall
467
hold the Vessel as gratuitous bailee only to the Owners and the Charterers shall procure that the master and crew follow the orders and directions of the Owners. The Owners
shall arrange for an authorised
468
representative to board the Vessel as soon as reasonably practicable following the termination of the Charter.
469
The Vessel shall be deemed to be repossessed by the Owners from the Charterers upon the boarding of the
470
Vessel by the Owners’ representative. All arrangements and expenses relating to the settling of wages,
471
disembarkation and repatriation of the Charterers’ Master, oﬃcers and crew shall be the sole responsibility of
472
the Charterers.
 
473
30. Dispute Resolution
474
(a)* This Contract Charter and any non-contractual obligations arising out of or in connection with it, shall be governed by and construed in accordance with English law.
(b)     This Charter shall be governed by and construed in accordance with English law and any dispute arising out of or in connection with this Charter shall be
referred to arbitration in London in accordance with the Arbitration Act 1996 or any statutory modiﬁcation or reenactment thereof save to the extent necessary to
give eﬀect to the provisions of this Clause. The seat of the arbitration shall be England, even where the hearing takes place outside England.
 
(c)     The arbitration shall be conducted in accordance with the London Maritime Arbitrators Association (LMAA) Terms current at the time when the arbitration
proceedings are commenced.
(d)     The reference shall be to three arbitrators, one to be appointed by each party and the third, subject to the provisions of the LMAA Terms, by the two so
appointed. A party wishing to refer a dispute to arbitration shall appoint its arbitrator and send notice of such appointment in writing to the other party requiring the
other party to appoint its own arbitrator within 14 calendar days of that notice and stating that it will appoint its arbitrator as sole arbitrator unless the other party
appoints its own arbitrator and gives notice that it has done so within the

PART II
14 days speciﬁed. If the other party does not appoint its own arbitrator and give notice that it has done so within the 14 days speciﬁed in the notice, the party referring a
dispute to arbitration may, without the requirement of any further prior notice to the other party, appoint its arbitrator as sole arbitrator and shall advise the other party
accordingly . The award of a sole arbitrator shall be binding on both parties as if the arbitrator had been appointed by agreement.
 
(e)     Nothing herein shall prevent the parties agreeing in writing to vary these provisions to provide for the appointment of a sole arbitrator.
 
(f)     In cases where neither the claim nor any counterclaim exceeds the sum of US$100,000 (or such other sum as the parties may agree) the arbitration shall be conducted in
accordance with the LMAA Small Claims Procedure current at the time when the arbitration proceedings are commenced. In cases where the claim or any counterclaim
exceeds the sum agreed for the LMAA Small Claims Procedure and neither the claim nor the counterclaim exceeds the sum of US$400,000 (or such other sum as the parties
may agree) the parties may further agree that the arbitration shall be conducted in accordance with the LMAA Intermediate Claims Procedure current at the time when the
arbitration proceedings and commenced. Where the reference is to three arbitrators the procedure for making appointments shall be in accordance with the procedure for
full arbitration stated above.
and any dispute arising out of
475
or in connection with this Contract shall be referred to arbitration in London in accordance with the Arbitration
476
Act 1996 or any statutory modiﬁcation or re-enactment thereof save to the extent necessary to give eﬀect to the
477
provisions of this Clause.
 
478
The arbitration shall be conducted in accordance with the London Maritime Arbitrators Association (LMAA)
479
Terms current at the time when the arbitration proceedings are commenced.
 
480
The reference shall be to three arbitrators. A party wishing to refer a dispute to arbitration shall appoint its
481
arbitrator and send notice of such appointment in writing to the other party requiring the other party to appoint
482
its own arbitrator within 14 calendar days of that notice and stating that it will appoint its arbitrator as sole
483
arbitrator unless the other party appoints its own arbitrator and gives notice that it has done so within the 14
484
days speciﬁed. If the other party does not appoint its own arbitrator and give notice that it has done so within
485
the 14 days speciﬁed, the party referring a dispute to arbitration may, without the requirement of any further
486
prior notice to the other party, appoint its arbitrator as sole arbitrator and shall advise the other party accordingly.
487
The award of a sole arbitrator shall be binding on both parties as if he had been appointed by agreement.
 
488
Nothing herein shall prevent the parties agreeing in writing to vary these provisions to provide for the
 
489
appointment of a sole arbitrator.
 
490
In cases where neither the claim nor any counterclaim exceeds the sum of US$50,000 (or such other sum as the
491
parties may agree) the arbitration shall be conducted in accordance with the LMAA Small Claims Procedure
492
current at the time when the arbitration proceedings are commenced.
493
(b)* This Contract shall be governed by and construed in accordance with Title 9 of the United States Code and the
494
Maritime Law of the United States and any dispute arising out of or in connection with this Contract shall be
495
referred to three persons at New York, one to be appointed by each of the parties hereto, and the third by the
496
two so chosen; their decision or that of any two of them shall be ﬁnal, and for the purposes of enforcing any
497
award, judgement may be entered on an award by any court of competent jurisdiction. The proceedings shall be
498
conducted in accordance with the rules of the Society of Maritime Arbitrators, Inc.
499
In cases where neither the claim nor any counterclaim exceeds the sum of US$50,000 (or such other sum as the
500
parties may agree) the arbitration shall be conducted in accordance with the Shortened Arbitration Procedure
501
of the Society of Maritime Arbitrators, Inc. current at the time when the arbitration proceedings are commenced.
 
502
(c)* This Contract shall be governed by and construed in accordance with the laws of the place mutually agreed by
503
the parties and any dispute arising out of or in connection with this Contract shall be referred to arbitration at a

PART II
504
mutually agreed place, subject to the procedures applicable there.
 
505 
(d) Notwithstanding (a), (b) or (c) above, the parties may agree at any time to refer to mediation any diﬀerence
506
and/or dispute arising out of or in connection with this Contract.
 
507
In the case of a dispute in respect of which arbitration has been commenced under (a), (b) or (c) above, the
508
following shall apply:
 
509
(i) Either party may at any time and from time to time elect to refer the dispute or part of the dispute to mediation
510
by service on the other party of a written notice (the “Mediation Notice”) calling on the other party to agree to
511
mediation.
 
512
(ii) The other party shall thereupon within 14 calendar days of receipt of the Mediation Notice conﬁrm that they
513
agree to mediation, in which case the parties shall thereafter agree a mediator within a further 14 calendar days,
514
failing which on the application of either party a mediator will be appointed promptly by the Arbitration Tribunal
515
(“the Tribunal”) or such person as the Tribunal may designate for that purpose. The mediation shall be conducted
516
in such place and in accordance with such procedure and on such terms as the parties may agree or, in the event
517
of disagreement, as may be set by the mediator.
 
518
(iii) If the other party does not agree to mediate, that fact may be brought to the attention of the Tribunal and
519
may be taken into account by the Tribunal when allocating the costs of the arbitration as between the parties.
 
520
(iv) The mediation shall not aﬀect the right of either party to seek such relief or take such steps as it considers
521
necessary to protect its interest.
 
522
(v) Either party may advise the Tribunal that they have agreed to mediation. The arbitration procedure shall
523
continue during the conduct of the mediation but the Tribunal may take the mediation timetable into account
524
when setting the timetable for steps in the arbitration.
 
525
(vi) Unless otherwise agreed or speciﬁed in the mediation terms, each party shall bear its own costs incurred in
 
526
the mediation and the parties shall share equally the mediator’s costs and expenses.
 
527
(vii) The mediation process shall be without prejudice and conﬁdential and no information or documents
528
disclosed during it shall be revealed to the Tribunal except to the extent that they are disclosable under the law
529
and procedure governing the arbitration.
 
530
(Note: The parties should be aware that the mediation process may not necessarily interrupt time limits.)
 
531 
(e) If Box 35 in Part I is not appropriately ﬁlled in, sub-clause 30(a) of this Clause shall apply. Sub-clause 30(d) shall
532
apply in all cases.
 
533
*Sub-clauses 30(a), 30(b) and 30(c) are alternatives; indicate alternative agreed in Box 35.
534
31. Notices (See Clause 43)
535
(a) Any notice to be given by either party to the other party shall be in writing and may be sent by fax, telex,
536
registered or recorded mail or by personal service.
 
537
(b) The address of the Parties for service of such communication shall be as stated in Boxes 3 and 4 respectively.

PART III
1
1.
Speciﬁcations and Building Contract
2 
(a) The Vessel shall be constructed in accordance with the Building Contract (hereafter called “the Building Contract”)
3
as annexed to this Charter, made between the Builders and the Owners and in accordance with the speciﬁcations
4
and plans annexed thereto, such Building Contract, speciﬁcations and plans having been counter-signed as
5
approved by the Charterers.
6
(b) No change shall be made in the Building Contract or in the speciﬁcations or plans of the Vessel as approved by
7
the Charterers as aforesaid, without the Charterers’ consent.
 
8
(c) The Charterers shall have the right to send their representative to the Builders’ Yard to inspect the Vessel during
9
the course of her construction to satisfy themselves that construction is in accordance with such approved
10
speciﬁcations and plans as referred to under sub-clause (a) of this Clause.
 
11
(d) The Vessel shall be built in accordance with the Building Contract and shall be of the description set out therein.
12
Subject to the provisions of sub-clause 2(c)(ii) hereunder, the Charterers shall be bound to accept the Vessel from
13
the Owners, completed and constructed in accordance with the Building Contract, on the date of delivery by the
14
Builders. The Charterers undertake that having accepted the Vessel they will not thereafter raise any claims
15
against the Owners in respect of the Vessel’s performance or speciﬁcation or defects, if any.
 
16
Nevertheless, in respect of any repairs, replacements or defects which appear within the ﬁrst 12 months from
17
delivery by the Builders, the Owners shall endeavour to compel the Builders to repair, replace or remedy any
18
defects or to recover from the Builders any expenditure incurred in carrying out such repairs, replacements or
19
remedies.
 
20
However, the Owners’ liability to the Charterers shall be limited to the extent the Owners have a valid claim
21
against the Builders under the guarantee clause of the Building Contract (a copy whereof has been supplied to
22
the Charterers). The Charterers shall be bound to accept such sums as the Owners are reasonably able to recover
23
under this Clause and shall make no further claim on the Owners for the diﬀerence between the amount(s) so
24
recovered and the actual expenditure on repairs, replacement or remedying defects or for any loss of time
25
incurred.
 
26
Any liquidated damages for physical defects or deﬁciencies shall accrue to the account of the party stated in Box
27
41(a) or if not ﬁlled in shall be shared equally between the parties.
 
28
The costs of pursuing a claim or claims against the Builders under this Clause (including any liability to the Builders)
29
shall be borne by the party stated in Box 41(b) or if not ﬁlled in shall be shared equally between the parties.
 
30 
2.
Time and Place of Delivery
31
(a) Subject to the Vessel having completed her acceptance trials including trials of cargo equipment in accordance
32
with the Building Contract and speciﬁcations to the satisfaction of the Charterers, the Owners shall give and the
33
Charterers shall take delivery of the Vessel aﬂoat when ready for delivery and properly documented at the
34
Builders’ Yard or some other safe and readily accessible dock, wharf or place as may be agreed between the
35
parties hereto and the Builders. Under the Building Contract the Builders have estimated that the Vessel will be
36
ready for delivery to the Owners as therein provided but the delivery date for the purpose of this Charter shall
37
be the date when the Vessel is in fact ready for delivery by the Builders after completion of trials whether that
38
be before or after as indicated in the Building Contract. The Charterers shall not be entitled to refuse acceptance
39
of delivery of the Vessel and upon and after such acceptance, subject to Clause 1(d), the Charterers shall not be
40
entitled to make any claim against the Owners in respect of any conditions, representations or warranties,
41
whether express or implied, as to the seaworthiness of the Vessel or in respect of delay in delivery.

PART III
42 
(b) If for any reason other than a default by the Owners under the Building Contract, the Builders become entitled
43
under that Contract not to deliver the Vessel to the Owners, the Owners shall upon giving to the Charterers
44
written notice of Builders becoming so entitled, be excused from giving delivery of the Vessel to the Charterers
45
and upon receipt of such notice by the Charterers this Charter shall cease to have eﬀect.
 
46
(c) If for any reason the Owners become entitled under the Building Contract to reject the Vessel the Owners shall,
47
before exercising such right of rejection, consult the Charterers and thereupon
 
48
(i) if the Charterers do not wish to take delivery of the Vessel they shall inform the Owners within seven (7)
49
running days by notice in writing and upon receipt by the Owners of such notice this Charter shall cease
50
to have eﬀect; or
 
51
(ii) if the Charterers wish to take delivery of the Vessel they may by notice in writing within seven (7)
52
running days require the Owners to negotiate with the Builders as to the terms on which delivery should
53
be taken and/or refrain from exercising their right to rejection and upon receipt of such notice the
54
Owners shall commence such negotiations and/or take delivery of the Vessel from the Builders and
55
deliver her to the Charterers;
 
56
(iii) in no circumstances shall the Charterers be entitled to reject the Vessel unless the Owners are able to
57
reject the Vessel from the Builders;
 
58
(iv) if this Charter terminates under sub-clause (b) or (c) of this Clause, the Owners shall thereafter not be
59
liable to the Charterers for any claim under or arising out of this Charter or its termination.
 
60
(d) Any liquidated damages for delay in delivery under the Building Contract and any costs incurred in pursuing a
61
claim therefor shall accrue to the account of the party stated in Box 41(c) or if not ﬁlled in shall be shared
62
equally between the parties.
 
63
3.
Guarantee Works
64
If not otherwise agreed, the Owners authorise the Charterers to arrange for the guarantee works to be
65
performed in accordance with the building contract terms, and hire to continue during the period of guarantee
66
works. The Charterers have to advise the Owners about the performance to the extent the Owners may request.
 
67
4.
Name of Vessel
68
The name of the Vessel shall be mutually agreed between the Owners and the Charterers and the Vessel shall be
69
painted in the colours, display the funnel insignia and ﬂy the house ﬂag as required by the Charterers.
 
70
5.
Survey on Redelivery
71
The Owners and the Charterers shall appoint surveyors for the purpose of determining and agreeing in writing
72
the condition of the Vessel at the time of redelivery.
 
73
Without prejudice to Clause 15 (Part II), the Charterers shall bear all survey expenses and all other costs, if any,
74
including the cost of docking and undocking, if required, as well as all repair costs incurred. The Charterers shall
75
also bear all loss of time spent in connection with any docking and undocking as well as repairs, which shall be
76
paid at the rate of hire per day or pro rata.

PART IV
 
1
On expiration of this Charter and provided the Charterers have fulﬁlled their obligations according to Part I and
2
II as well as Part III, if applicable, it is agreed, that on payment of the ﬁnal payment of hire as per Clause 11 the
3
Charterers have purchased the Vessel with everything belonging to her and the Vessel is fully paid for.
 
4
In the following paragraphs the Owners are referred to as the Sellers and the Charterers as the Buyers.
 
5
The Vessel shall be delivered by the Sellers and taken over by the Buyers on expiration of the Charter.
 
6
The Sellers guarantee that the Vessel, at the time of delivery, is free from all encumbrances and maritime liens
7
or any debts whatsoever other than those arising from anything done or not done by the Buyers or any existing
8
mortgage agreed not to be paid oﬀ by the time of delivery. Should any claims, which have been incurred prior to
9
the time of delivery be made against the Vessel, the Sellers hereby undertake to indemnify the Buyers against all
10
consequences of such claims to the extent it can be proved that the Sellers are responsible for such claims. Any
11
taxes, notarial, consular and other charges and expenses connected with the purchase and registration under
12
Buyers’ ﬂag, shall be for Buyers’ account. Any taxes, consular and other charges and expenses connected with
13
closing of the Sellers’ register, shall be for Sellers’ account.
 
14
In exchange for payment of the last month’s hire instalment the Sellers shall furnish the Buyers with a Bill of Sale
15
duly attested and legalized, together with a certiﬁcate setting out the registered encumbrances, if any. On
16
delivery of the Vessel the Sellers shall provide for deletion of the Vessel from the Ship’s Register and deliver a
17
certiﬁcate of deletion to the Buyers.
 
18
The Sellers shall, at the time of delivery, hand to the Buyers all classiﬁcation certificaties (for hull, engines, anchors,
19
chains, etc.), as well as all plans which may be in Sellers’ possession.
 
20
The Wireless Installation and Nautical Instruments, unless on hire, shall be included in the sale without any extra
21
payment.
 
22
The Vessel with everything belonging to her shall be at Sellers’ risk and expense untl she is delivered to the
23
Buyers, subject to the conditions of this Contract and the Vessel with everything belonging to her shall be
24
delivered and taken over as she is at the time of delivery, after which the Sellers shall have no responsibility for
25
possible faults or deﬁciencies of any description.
 
26
The Buyers undertake to pay for the repatriation of the Master, oﬃcers and other personnel if appointed by the
27
Sellers to the port where the Vessel entered the Bareboat Charter as per Clause 3 (Part II) or to pay the equivalent
28
cost for their journey to any other place.

PART V
1.
1.
Deﬁnitions
 
2
For the purpose of this PART V, the following terms shall have the meanings hereby assigned to them:
 
3
“The Bareboat Charter Registry” shall mean the registry of the State whose ﬂag the Vessel will ﬂy and in which
4
the Charterers are registered as the bareboat charterers during the period of the Bareboat Charter.
 
5
“The Underlying Registry” shall mean the registry of the state in which the Owners of the Vessel are registered
6
as Owners and to which jurisdiction and control of the Vessel will revert upon termination of the Bareboat
7
Charter Registration.
 
8
2.
Mortgage
9
The Vessel chartered under this Charter is ﬁnanced by a mortgage and the provisions of Clause 12(b) (Part II)
10
shall apply.
 
11
3.
Termination of Charter by Default
12
If the Vessel chartered under this Charter is registered in a Bareboat Charter Registry as stated in Box 44, and if
13
the Owners shall default in the payment of any amounts due under the mortgage(s) speciﬁed in Box 28, the
14
Charterers shall, if so required by the mortgagee, direct the Owners to re-register the Vessel in the Underlying
15
Registry as shown in Box 45.
 
16
In the event of the Vessel being deleted from the Bareboat Charter Registry as stated in Box 44, due to a default
17
by the Owners in the payment of any amounts due under the mortgage(s), the Charterers shall have the right to
18
terminate this Charter forthwith and without prejudice to any other claim they may have against the Owners
19
under this Charter.

JFVSPV2024L110-01
EXECUTION VERSION
ADDITIONAL CLAUSES TO BARECON 2001
Clause 32
– CHARTER PERIOD
2
Clause 33
– CANCELLATION
2
Clause 34
– DELIVERY OF VESSEL
2
Clause 35
– QUIET ENJOYMENT
4
Clause 36
– CHARTERHIRE
4
Clause 37
– POSSESSION OF VESSEL
8
Clause 38
– INSURANCE
8
Clause 39
– WARRANTIES RELATING TO VESSEL
14
Clause 40
– TERMINATION, REDELIVERY AND TOTAL LOSS
16
Clause 41
– FEES AND EXPENSES
20
Clause 42
– NO WAIVER OF RIGHTS
21
Clause 43
– NOTICES
21
Clause 44
– TERMINATION EVENTS
22
Clause 44A
– MANDATORY SALE
25
Clause 45
– REPRESENTATIONS AND WARRANTIES
26
Clause 46
– CHARTERERS’ UNDERTAKINGS
29
Clause 47
– PURCHASE OPTION
38
Clause 48
– PURCHASE OBLIGATION
39
Clause 49
– SALE OF THE VESSEL
39
Clause 50
– INDEMNITIES
40
Clause 51
– NO SET-OFF OR TAX DEDUCTION
43
Clause 52
– INCREASED COSTS
43
Clause 53
– FATCA
44
Clause 54
– CONFIDENTIALITY
46
Clause 55
– PARTIAL INVALIDITY
47
Clause 56
– SETTLEMENT OR DISCHARGE CONDITIONAL
47
Clause 57
– CHANGES TO THE PARTIES
47
Clause 58
– MISCELLANEOUS
49
Clause 59
– DEFINITIONS
50
SCHEDULE 1 –
ACCEPTANCE CERTIFICATE
70
SCHEDULE 2 –
CONDITIONS PRECEDENT
71
SCHEDULE 3
77
EXECUTION PAGE
83

CLAUSE 32  – CHARTER PERIOD
 
32.1
For the avoidance of doubt, notwithstanding the fact that the Charter Period shall commence on the Delivery Date, this Charter shall be:
 
(a)
in full force and effect; and
 
(b)
valid, binding and enforceable against the parties hereto,
 
with effect from the date hereof until the end of the Charter Period (subject to the terms of this Charter).
 
32.2
The Charter Period shall, subject to the terms of this Charter, commence from the Delivery Date and end on one hundred and twenty (120) months from the Delivery Date.
 
CLAUSE 33  – CANCELLATION
 
If:
 
(a)
the Vessel has not been delivered to the Owners under the MOA on or before the Cancelling Date; or
 
(b)
it becomes unlawful for the Owners (as buyers under the MOA) to perform or comply with any or all of their obligations under the MOA or any of the obligations of the Owners
under MOA is not or ceases to be legal, valid, binding and enforceable; or
 
(c)
the MOA expires, is cancelled, terminated, rescinded or suspended or otherwise ceases to remain in full force and effect for any reason,
 
then this Charter shall immediately terminate and be cancelled (with the exception of Clause 50 (Indemnities) and other provisions hereof and any other Leasing Document
expressed to survive such termination or cancellation) without the need for either of the Owners or the Charterers to take any action whatsoever and the Owners shall be
entitled to retain all fees, expenses and any other amounts paid by the Charterers under Clause 41 (Fees and Expenses) and any clause in the MOA and if such fees have not
been paid, the Charterers shall forthwith pay such fees and expenses to the Owners, and it is agreed by the Parties that such payment shall be irrevocable and unconditional
and is acknowledged by the Charterers to be proportionate as to amount, having regard to the legitimate interest of the Owners, in protecting against the Owners’ risk of the
Charterers failing to perform their obligations under this Charter.
 
CLAUSE 34  – DELIVERY OF VESSEL
 
34.1
This Charter is part of a transaction involving the sale, purchase of the Vessel by the Owners from the Sellers and the demise chartering of the Vessel by the Owners to the
Charterers, and constitutes one of the Leasing Documents.
 
34.2
The obligation of the Owners to charter the Vessel to the Charterers hereunder is subject to and conditional upon:
 
(a)
the delivery of the Vessel to the Charterers by the SBC Sellers and acceptance of the Vessel by the Charterers pursuant to the Shipbuilding Contract;
 
(b)
the delivery of the Vessel to the Sellers by the Charterers and acceptance of the Vessel by the Sellers pursuant to the Initial MOA;
2
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

(c)
the delivery of the Vessel to the Owners by the Sellers pursuant to the MOA and, for the purposes of this Charter, the Vessel shall be deemed delivered to the Charterers
simultaneously with delivery of the Vessel to the Owners pursuant to the MOA and at delivery the Charterers shall, subject to Clause 9, keep all bunkers, lubrication oil,
unbroached provisions, paints, ropes and other consumable stores in the Vessel which were delivered under the MOA;
 
(d)
no Potential Termination Event or Termination Event having occurred from the date of this Charter up to and including the Delivery Date, which is continuing;
 
(e)
the representations and warranties contained in Clause 45 being true and correct on the date hereof, the Prepositioning Date and on the Delivery Date;
 
(f)
Delivery occurring on or before the Cancelling Date;
 
(g)
the Owners having received from the Charterers:
 
(i)
on or prior to the date falling three (3) Business Days prior to the Prepositioning Date (or such other period as the Owners may agree in their sole discretion or as
otherwise specified in Part A of Schedule 2), the documents or evidence set out in Part A of Schedule 2 (Conditions Precedent) in form and substance satisfactory to
them;
 
(ii)
on the Delivery Date and prior to or simultaneously with the Owners executing a dated and timed copy of the protocol of delivery and acceptance evidencing delivery
of the Vessel under the MOA and a dated and timed copy of the Acceptance Certificate, the documents or evidence set out in Part B of Schedule 2 (Conditions
Precedent) in form and substance satisfactory to them; and
 
(iii)
after Delivery, the documents and evidence set out in Part C of Schedule 2 in form and substance satisfactory to them within the time periods set out thereunder,
 
and if any of the documents listed in sub-clauses (i) to (iii) above are not in the English language then they shall, if required by the Owners, be accompanied by an English
translation.
 
34.3
The conditions precedent specified in Clause 34.2(g) are inserted for the sole benefit of the Owners and may be waived or deferred in whole or in part and with or without
conditions by the Owners. Upon the requirements of Clause 34.2 being fulfilled or waived to the satisfaction of the Owners, the Owners shall give notice thereof in writing to the
Charterers.
 
34.4
On delivery to and acceptance by the Owners (as buyers under the MOA) of the Vessel under the MOA from the Sellers (as sellers under the MOA) and subject to the
provisions of this Clause, the Vessel shall be deemed to have been delivered on an “as is where is” basis to, and accepted without reservation by, the Charterers under this
Charter and the Charterers shall become and be entitled to the possession and use of the Vessel on and subject to the terms and conditions of this Charter.
 
34.5
On Delivery, as evidence of the commencement of the Charter Period, the Charterers shall sign and deliver to the Owners, the Acceptance Certificate. Without prejudice to this
Clause, the Charterers shall be deemed to have accepted the Vessel under this Charter and the commencement of the Charter Period having started, on Delivery even if for
whatever reason, the Acceptance Certificate is not signed.
 
34.6
Without prejudice to and notwithstanding the provisions of this Clause, the Charterers shall not be entitled for any reason whatsoever to refuse to accept delivery of the Vessel
under this Charter once the Vessel has been delivered to and accepted by the Owners (as buyers under the MOA) under the MOA from the Sellers (as sellers under the MOA),
and the Owners shall not be liable for any losses, costs or expenses whatsoever or howsoever arising.
3
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

34.7
Without prejudice to Clause 9 (Inventories, Oil and Stores), the Owners shall not be obliged to deliver the Vessel to the Charterers with any bunkers and unused lubricating oils
and greases in storage tanks and unopened drums of the Vessel.
 
CLAUSE 35  – QUIET ENJOYMENT
 
35.1
Provided that the Charterers do not breach any terms of this Charter or any other Leasing Document, the Owners hereby agree not to disturb or interfere with the Charterers’
lawful use, possession and quiet enjoyment of the Vessel during the Charter Period.
 
35.2
The Owners shall, on or prior to executing a ship mortgage over the Vessel in favour of a Owners’ Financier as permitted under Clause 57.2(b)(i), procure that the Owners’
Financier enters into a quiet enjoyment agreement with the Charterers on such terms as may be agreed between the Owners, the Owners’ Financier and the Charterers.
 
CLAUSE 36  – CHARTERHIRE
 
36.1
In consideration of the Owners agreeing to charter the Vessel to the Charterers under this Charter at the request of the Charterers, the Charterers hereby irrevocably and
unconditionally agree to pay to the Owners the Charterhire in accordance with this Clause 36 (Charterhire).
 
36.2
Commencing on and from the Prepositioning Date, the Charterers shall pay, on each Hire Payment Date, an instalment of Charterhire to the Owners monthly in arrears and each
instalment of Charterhire shall consist of:
 
(a)
the Fixed Charterhire; and
 
(b)
a variable component (the “Variable Charterhire”), which shall be calculated by applying the applicable Interest Rate on the Quotation Day of the relevant Hire Period to the
Outstanding Principal as at the date immediately prior to such Hire Payment Date (which, for the avoidance of doubt, shall be the Purchase Price in respect of the first
Charterhire instalment), for the actual number of days elapsed within the relevant Hire Period. For the avoidance of doubt, in relation to a Hire Payment Date, the Variable
Charterhire shall be calculated as follows:
 
Outstanding
Principal as at
such date
immediately
prior to such Hire
Payment Date
x
Applicable
Interest Rate
x
Number of days of the relevant Hire Period
immediately prior to such Hire Payment Date
360
The Parties agree for good and valuable consideration that as this is a finance charter the calculation of Charterhire may commence from the Prepositioning Date
notwithstanding that the Vessel has not been delivered on that date.
 
36.3
The Vessel shall not at any time be deemed off-hire and the Charterers’ obligation to pay all Charterhire and any other amounts payable under this Charter shall be absolutely
and unconditionally payable under any and all circumstances and shall not be affected by any circumstances of any nature whatsoever including, but not limited to:
 
(a)
any set off, counterclaim, recoupment, defence, claim or other right which the Charterers may at any time have against the Owners or any other person for any reason
whatsoever including, without limitation, any act, omission or breach on the part of the Owners under this Charter or any other agreement at any time existing between the
Owners and the Charterers;
4
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

(b)
any change, extension, indulgence or other act or omission in respect of any indebtedness or obligation of the Charterers, or any sale, exchange, release or surrender of, or other
dealing in, any security for any such indebtedness or obligation;
 
(c)
any unavailability of the Vessel, including, any title defect or encumbrance or any dispossession of the Vessel by title paramount or otherwise;
 
(d)
any modification (including, but not limited to, the installation of scrubbers) being performed on the Vessel or any part thereof;
 
(e)
any defect in the seaworthiness, condition, value, design, merchantability, operation or fitness for use of the Vessel or the ineligibility of the Vessel for any particular trade, or for
registration or documentation under the laws of any relevant jurisdiction;
 
(f)
the Total Loss or any damage to or forfeiture or court marshal’s or other sale of the Vessel unless such sale is solely caused by a default by the Owners in respect of any
Financial Indebtedness of the Owners and the Owners fail to remedy such default within 30 days of the occurrence of such default and if applicable, the relevant Owners’
Financier has not entered into a quiet enjoyment agreement with the Charterers pursuant to Clause 35.2;
 
(g)
any libel, attachment, levy, detention, sequestration or taking into custody of the Vessel or any restriction or prevention of or interference with or interruption or cessation in,
the use or possession thereof by the Charterers;
 
(h)
any insolvency, bankruptcy, reorganization, arrangement, readjustment, dissolution, liquidation or similar proceedings by or against the Charterers or any other Obligor;
 
(i)
any invalidity, unenforceability, lack of due authorization or other defects, or any failure or delay in performing or complying with any of the terms and provisions of this Charter
or any of the Leasing Documents by any party to this Charter or any other person;
 
(j)
any enforcement or attempted enforcement by the Owners of their rights under this Charter or any of the Leasing Documents executed or to be executed pursuant to this
Charter;
 
(k)
any loss of use of the Vessel due to deficiency or default or strike of officers or crew, fire, breakdown, damage, accident, defective cargo or any other cause which would or
might but for this provision have the effect of terminating or in any way affecting any obligation of the Charterers under this Charter; or
 
(l)
any prevention, delay, deviation or disruption in the use of the Vessel resulting from the wide outbreak of any viruses or any other highly infectious or contagious diseases
(including the 2019 novel coronavirus), including but not limited to those caused by:
 
(i)
closure of ports;
 
(ii)
prohibitions or restrictions against the Vessel calling at or passing through certain ports;
 
(iii)
restriction in the movement of personnel and/or shortage of labour affecting the operation of the Vessel or the operation of the ports (including stevedoring
operations);
 
(iv)
quarantine regulations affecting the Vessel, its cargo, the crew members or relevant port personnel;
 
(v)
fumigation or cleaning of the Vessel; or
5
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

(vi)
any claims raised by any Sub-charterer or manager of the Vessel that a force majeure event or termination event (or any other analogous event howsoever called) has
occurred under the relevant charter agreement or management agreement (as the case may be) of the Vessel as a result of the outbreak of such virus or disease.
 
36.4
All payments of the Charterhire and any other moneys payable hereunder shall be made in Dollars.
 
36.5
Time of payment of the Charterhire and any other payments by the Charterers shall be of the essence of this Charter and shall be received by the Owners in same day available
funds and not later than 5.00 pm (Beijing time) on the due date of such payment.
 
36.6
All Charterhire and any moneys payable hereunder shall be payable by the Charterers to the Owners to such account as the Owners may notify the Charterers in writing. For the
avoidance of doubt, the Charterers’ obligation to pay any Charterhire and any moneys payable hereunder is not conditional upon the Charterers’ receipt of such notification.
 
36.7
Payment of the Charterhire and any other amounts payable by the Charterers to the Owners under the Leasing Documents shall be at the Charterers’ risk until receipt by the
Owners.
 
36.8
All stamp duty, value added tax, withholding or other taxes and import and export duties and all other similar types of charges which may be levied or assessed on or in
connection with:
 
(a)
the operation of this Charter in respect of the hire and all other payments to be made pursuant to this Charter and the remittance thereof to the Owners; and
 
(b)
the import, export, purchase, delivery and re-delivery of the Vessel,
 
shall be borne by the Charterers. The Charterers shall pay, if applicable, value added tax and other similar tax levied on any Charterhire and other payments payable under this
Charter by addition to, and at the time of payment of, such amounts.
 
36.9
If the Charterers fail to make any payment due under this Charter on the due date, they shall pay interest on such late payment at the default rate of 4.35% per annum plus
Reference Rate applicable to the Hire Period in which the due date of such payment falls, and accruing from the date on which such payment became due until the date of
receipt of the payment thereof. For the avoidance of doubt, any default interest (if unpaid) arising on any late payment will be compounded with that late payment at the end of
the Hire Period applicable to that late payment but will remain immediately due and payable. The Charterers and the Owners agree that such default interest is proportionate as
to amount, having regard to the legitimate interest of the Owners, in protecting the Owners’ risk of the Charterers failing to perform its obligations under this Charter.
 
36.10
All Variable Charterhire, any interest including default interest and any other payments under this Charter which are of an annual or periodic nature (apart from the Fixed
Charterhire) shall accrue from day to day and shall be calculated on the basis of the actual number of days elapsed and a 360 day year.
 
36.11
Any payment which is due to be made on a day which is not a Business Day, it shall be made on the preceding Business Day.
 
36.12
For the purposes of determining the Variable Charterhire, if no Term SOFR for one (1) month is available for that Hire Period, there shall be no Reference Rate for that Hire Period
and Clause 36.14 (Cost of funds) shall apply.
 
36.13
If before close of business in Beijing on the date falling one (1) Business Day after the Quotation Day for the relevant Hire Period, the Owners notify the Charterers their cost of
funds would be in excess of the Reference Rate for that Hire Period then Clause 36.14 (Cost of funds) shall apply to the Outstanding Principal or that part of the Outstanding
Principal (as applicable) for that Hire Period.
6
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

36.14
Cost of funds.
 
(a)
If this Clause applies for a Hire Period, the applicable Interest Rate shall be the percentage rate per annum which is the aggregate of:
 
(i)
the Margin; and
 
(ii)
the cost notified by the Owners (expressed as an annual rate of interest) of funding the Outstanding Principal during such Hire Period as reasonably determined by the
Owners,
 
provided that if the rate pursuant to (ii) above is less than zero, the relevant rate shall be deemed to be zero.
 
(b)
If this Clause applies pursuant to Clause 36.13 above and the Owners or the Charterers so requires, the Owners and the Charterers shall enter into negotiations (for a period not
more than 30 days) with a view to agreeing a substitute basis for determining the rate of interest or (as the case may be) an alternative basis for funding. Subject to Clause 36.15,
any substitute or alternative basis agreed pursuant to this Clause shall, with the prior written consent of the Parties, be binding on the Parties.
 
(c)
If a substitute basis is not so agreed pursuant to Clause 36.14(b) or the amendment or waiver to the terms of the Leasing Documents is not so agreed pursuant to Clause 36.15,
 
(i)
Clause 36.14 (a) (Cost of funds) shall apply to the Outstanding Principal or that part of the Outstanding Principal (as applicable) for any relevant Hire Period; and
 
(ii)
the Charterers shall have the option to purchase the Vessel on the applicable Purchase Option Date at the applicable Purchase Option Price, subject always to giving
the Owners no less than three (3) months’ prior written notice and for the avoidance of doubt, subject to Clauses 47.2 and 47.3, and provided that at the date of such
prior notice and such Purchase Option Date no Termination Event has occurred which is continuing, whereupon the Charterers shall pay the applicable Purchase
Option Price to the Owners and upon the Owners’ receipt in full of the Purchase Option Price, the Owners shall transfer the legal and beneficial ownership of the Vessel
in accordance with Clause 47.4.
 
36.15
If a Published Rate Replacement Event has occurred in relation to the Published Rate, the Owners and/or the Charterers are entitled to request any amendment or waiver to the
terms of the Leasing Documents with the prior written consent of the Owners or the Charterers (as the case may be) (and such costs reasonably incurred in relation to such
amendment or waiver shall be borne by the Charterers), which relates to:
 
(a)
providing for the use of a Replacement Reference Rate in the place of (or in addition to) that Published Rate; and
 
(b)
 
(i)
aligning any provision of any Leasing Document to the use of that Replacement Reference Rate;
 
(ii)
enabling that Replacement Reference Rate to be used for the calculation of interest under this Charter (including, without limitation, any consequential changes
required to enable that Replacement Reference Rate to be used for the purposes of this Charter);
7
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

(iii)
implementing market conventions applicable to that Replacement Reference Rate;
 
(iv)
providing for appropriate fallback (and market disruption) provisions for that Replacement Reference Rate; or
 
(v)
adjusting the pricing to reduce or eliminate, to the extent reasonably practicable, any transfer of economic value from one Party to another as a result of the application
of that Replacement Reference Rate (and if any adjustment or method for calculating any adjustment has been formally designated, nominated or recommended by the
Relevant Nominating Body, the adjustment shall be determined on the basis of that designation, nomination or recommendation),
 
and pending any such amendment or waiver and the Replacement Reference Rate being utilised under the Leasing Documents to calculate the Interest Rate, Clause 36.14 (Cost
of funds) shall apply to the calculation of the Interest Rate.
 
CLAUSE 37  – POSSESSION OF VESSEL
 
37.1
The Charterers shall not, without the prior written consent of the Owners, assign, mortgage or pledge the Vessel or any interest therein and shall not permit the creation of any
Security Interest thereon other than Permitted Security Interests.
 
37.2
The Charterers shall promptly notify in writing any party (as the Owners may request), including any Sub-charterer, that the Vessel is the property of the Owners and the
Charterers shall provide the Owners with a copy of such written notification and satisfactory evidence that such party has received such written notification.
 
37.3
If the Vessel is arrested, seized, impounded, forfeited, detained or taken out of their possession or control (whether or not pursuant to any distress, execution or other legal
process), the Charterers shall procure the release of the Vessel (whether by providing bail or procuring the provision of security or otherwise do such lawful things as the
circumstances may require) no later than 30 days from such event and shall immediately notify the Owners of such event and shall indemnify the Owners against all
documented losses, costs or charges incurred by the Owners by reason thereof in re-taking possession or otherwise in re-acquiring the Vessel.
 
37.4
The Charterers shall pay and discharge or cause any Sub-charterer of the Vessel to pay and discharge all obligations and liabilities whatsoever which have given or may give
rise to liens on or claims enforceable against the Vessel and take (and shall procure that any such Sub- charterer shall take) all steps to prevent an arrest (threatened or
otherwise) of the Vessel.
 
37.5
Without prejudice to Clause 10(a)(ii) (New Class and Other Safety Requirements), any time and costs associated with the re-designing, installation, inspection or docking of the
Vessel for the purposes of complying with the requirements of any applicable regulations or conventions which come into force after the date of this Charter, including without
limitation to, the International Convention for the Control and Management of Ships’ Ballast Water and Sediments, shall be for the account of the Charterers.
 
Clause 38    – INSURANCE
 
38.1
The Charterers shall at their expense procure that such insurances are effected at all times during the Charter Period in form and substance satisfactory to the Owners and the
Owners’ Financier (if any):
 
(a)
in Dollars;
 
(b)
in the case of fire and usual marine risks (including hull and machinery and/or increased value insurance) and war risks (including blocking and trapping), on an agreed value
basis for an amount equal to the higher of (i) one hundred and twenty per cent (120%) of the then current Outstanding Principal and (ii) the prevailing Market Value of the Vessel
at the relevant time;
8
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

(c)
in the case of oil pollution liability risks for the Vessel, for an aggregate amount equal to the highest level of cover from time to time available under protection and indemnity
club entry and in the international marine insurance market and for an amount of not less than US$1,000,000,000;
 
(d)
in relation to protection and indemnity risks (including freight, demurrage and defence cover), in respect of the full tonnage of the Vessel and with a member of the International
Group of P&I Clubs, and freight, demurrage and defence cover or such other independent and reputable protection and indemnity club member (in each case, which is
acceptable to the Owners and the Owners’ Financier (if any));
 
(e)
on terms acceptable to the Owners and the Owners’ Financier (if any);
 
(f)
through approved brokers and with first class international insurers and/or underwriters notified to the Owners (including have a Standard & Poor’s rating of BBB+ or above, a
Moody’s rating of A or above or an AM Best rating of A- or above) or, in the case of war risks and protection and indemnity risks, in a war risks and protection and indemnity
risks associations as notified to the Owners and the Owners’ Financier (if any) (including being a member of the International Group of P&I Clubs); and
 
(g)
on no less favourable terms as may be required under the terms of any Sub-charter.
 
38.2
In addition to the terms set out in Clause 13(a), the Charterers shall procure that the obligatory insurances shall:
 
(a)
subject always to paragraph (b), name the Owners, the Charterers, the Approved Manager as the only named assureds, unless the interest of every other named assured or co-
assured is limited:
 
(i)
in respect of any obligatory insurances for hull and machinery and war risks;
 
(1)
to any provable out-of-pocket expenses that they have incurred and which form part of any recoverable claim on underwriters; and
 
(2)
to any third-party liability claims where cover for such claims is provided by the policy (and then only in respect of discharge of any claims made against
them); and
 
(ii)
in respect of any obligatory insurances for protection and indemnity risks, to any recoveries they are entitled to make by way of reimbursement following discharge of
any third-party liability claims made specifically against them,
 
and every other named assured or co-assured has undertaken in writing to the Owners or the Owners’ Financier if any (in such form as they require) that any deductible shall be
apportioned between the Charterers and every other named assured or co-assured in proportion to the gross claims made by or paid to each of them and that they shall do all
things necessary and provide all documents, evidence and information to enable the Owners and the Owners’ Financier (if any) in accordance with the terms of the loss payable
clause, to collect or recover any moneys which at any time become payable in respect of the obligatory insurances;
9
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

(b)
whenever the Owners or the Owners’ Financier (if any) requires:
 
(i)
in respect of fire and other usual marine risks and war risks, name (or be amended to name) the same as additional named assured for their rights and interests,
warranted no operational interest and with full waiver of rights of subrogation against such Owners’ Financiers, but without such Owners’ Financiers thereby being
liable to pay (but having the right to pay) premiums, calls or other assessments in respect of such insurance;
 
(ii)
in relation to protection and indemnity risks, name (or be amended to name) the same as additional insured or co-assured for their rights and interests to the extent
permissible under the relevant protection and indemnity club rules; and
 
(iii)
name the Owners’ Financier (as applicable) and the Owners (as applicable) as respectively the first ranking loss payee and the second ranking loss payee (and in the
absence of any financiers, name the Owners as the first ranking loss payee) in accordance with the terms of the relevant loss payable clauses approved by the Owners’
Financier and the Owners with such directions for payment in accordance with the terms of such relevant loss payable clause, as the Owners and the Owners’
Financier (if any) may specify;
 
(c)
provide that all payments by or on behalf of the insurers under the obligatory insurances to the Owners and/or the Owners’ Financier (as applicable) shall be made without set-
off, counterclaim or deductions or condition whatsoever;
 
(d)
provide that such obligatory insurances shall be primary without right of contribution from other insurances which may be carried by the Owners and/or the Owners’ Financier
(if any);
 
(e)
provide that the Owners and/or the Owners’ Financier (if any) may make proof of loss if the Charterers fail to do so; and
 
(f)
provide that if any obligatory insurance is cancelled, or if any change is made in the coverage which adversely affects the interest of the Owners and/or the Owners’ Financier
(if any), or if any obligatory insurance is allowed to lapse for non-payment of premium, such cancellation, change or lapse shall not be effective with respect to the Owners
and/or the Owners’ Financier (if any) for thirty (30) days (or seven (7) days in the case of war risks) after receipt by the Owners and/or the Owners’ Financier (if any) of prior
written notice from the insurers of such cancellation, change or lapse.
 
38.3
The Charterers shall:
 
(a)
at least five (5) days prior to Delivery (or such lesser period agreed by the parties), notify in writing the Owners (copied to the Owners’ Financier (if any)) of the terms and
conditions of all Insurances;
 
(b)
at least five (5) days before the expiry of any obligatory insurance or otherwise before the appointment of any new brokers (or other insurers) and any protection and indemnity
or war risks association through which obligatory insurances are taken from time to time pursuant to this Clause 38 (Insurance), notify the Owners (copied to the Owners’
Financier (if any)) of the brokers (or other insurers) and any protection and indemnity or war risks association through or with whom the Charterers propose to renew that
obligatory insurance and of the proposed terms of renewal and obtain the Owners’ approval to such matters;
 
(c)
at least five (5) days before the expiry of any obligatory insurance, procure that such obligatory insurance is renewed or to be renewed on its expiry date in accordance with the
provisions of this Charter;
 
(d)
procure that the approved brokers and/or the war risks and protection and indemnity associations with which such a renewal is effected shall promptly after the renewal or the
effective date of the new insurance and protection and indemnity cover notify the Owners (copied to the Owners’ Financier (if any)) in writing of the terms and conditions of the
renewal; and
10
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

(e)
as soon as practicable after the expiry of any obligatory insurance, deliver to the Owners a letter of undertaking as required by this Charter in respect of such Insurances for the
Vessel as renewed pursuant to Clause 38.3(c) together with copies of the relevant policies or cover notes or entry certificates duly endorsed with the interest of the Owners
and/or the Owners’ Financier (if any).
 
38.4
The Charterers shall ensure that all insurance companies and/or underwriters, and/or (if any) insurance brokers provide the Owners with all certified copies of policies, cover
notes and certificates of entry relating to the obligatory insurances which they are to effect or renew and of a letter or letters or undertaking in a form reasonably required by the
Owners and/or the Owners’ Financier (if any) and including undertakings by the insurance companies and/or underwriters that:
 
(a)
they will have endorsed on each policy, immediately upon issue, a loss payable clause and a notice of assignment complying with the provisions of this Charter and the
Financial Instruments;
 
(b)
they will hold the benefit of such policies and such insurances, to the order of the Owners and/or the Owners’ Financier (if any) and/or such other party in accordance with the
said loss payable clause;
 
(c)
they will advise the Owners and the Owners’ Financier (if any) promptly of any change to the terms of the obligatory insurances of which they are aware;
 
(d)
they will notify the Owners and the Owners’ Financier (if any) not less than fourteen (14) days before the expiry of the obligatory insurances, in the event of their not having
received notice of renewal instructions from the Charterers and, in the event of their receiving instructions to renew, they will promptly notify the Owners and the Owners’
Financier (if any) of the terms of the instructions; and
 
(e)
if any of the obligatory insurances form part of any fleet cover, the Charterers shall procure that the insurance broker(s), or leading insurer, as the case may be, undertakes to the
Owners and the Owners’ Financier (if any) that such insurance broker or insurer will not set off against any sum recoverable in respect of a claim relating to the Vessel under
such obligatory insurances any premiums due in respect of any other vessel under any fleet cover of which the Vessel forms a part or any premium due for other insurances,
they waive any lien on the policies, or any sums received under them, which they might have in respect of such premiums, and they will not cancel such obligatory insurances
by reason of non-payment of such premiums or other amounts, and will arrange for a separate policy to be issued in respect of the Vessel forthwith upon being so requested by
the Owners and/or the Owners’ Financier (if any) and where practicable.
 
38.5
The Charterers shall ensure that any protection and indemnity and/or war risks associations in which the Vessel is entered provides the Owners and the Owners’ Financier (if
any) with:
 
(a)
a copy of the certificate of entry for the Vessel as soon as such certificate of entry is issued;
 
(b)
a letter or letters of undertaking in such form as may be required by the Owners and/or the Owners’ Financier (if any) or in such association’s standard form; and
 
(c)
a certified copy of each certificate of financial responsibility for pollution by oil or other Environmentally Sensitive Material issued by the relevant certifying authority in relation
to the Vessel if the Vessel is to trade in the United States of America or the Exclusive Economic Zone.
 
38.6
The Charterers shall ensure that all policies relating to the obligatory insurances are deposited with the approved brokers through which the insurances are effected or renewed.
11
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

38.7
The Charterers shall procure that all premiums or other sums payable in respect of the obligatory insurances are punctually paid and produce all relevant receipts when so
required by the Owners.
 
38.8
The Charterers shall ensure that any guarantees required by a protection and indemnity or war risks association are promptly issued and remain in full force and effect.
 
38.9
The Charterers shall neither do nor omit to do (nor permit to be done or not to be done) any act or thing which would or might render any obligatory insurance invalid, void,
voidable or unenforceable or render any sum payable under an obligatory insurance repayable in whole or in part; and, in particular:
 
(a)
the Charterers shall procure that all necessary action is taken and all requirements are complied with which may from time to time be applicable to the obligatory insurances, and
(without limiting the obligations contained in this Clause) ensure that the obligatory insurances are not made subject to any exclusions or qualifications to which the Owners
have not given their prior approval (unless such exclusions or qualifications are made in accordance with the rules of a protection and indemnity association which is a member
of the International Group of protection and indemnity associations;
 
(b)
the Charterers shall not make or permit any changes relating to the classification or classification society or manager or operator of the Vessel unless such changes have first
been approved by the underwriters of the obligatory insurances or the Owners;
 
(c)
the Charterers shall procure that all quarterly or other voyage declarations which may be required by the protection and indemnity risks association in which the Vessel is
entered to maintain cover for trading to the United States of America and Exclusive Economic Zone (as defined in the United States Oil Pollution Act 1990 or any other
applicable legislation) are made and the Charterers shall promptly provide the Owners with copies of such declarations and a copy of the certificate of financial responsibility;
and
 
(d)
the Charterers shall not employ the Vessel, nor allow it to be employed, otherwise than in conformity with the terms and conditions of the obligatory insurances, without first
obtaining the consent of the insurers and the Owners and complying with any requirements (as to extra premium or otherwise) which the insurers and the Owners specify.
 
38.10
The Charterers shall not:
 
(a)
make or agree to any alteration to the terms of any obligatory insurance;
 
(b)
waive any right relating to any obligatory insurance; or
 
(c)
allow any person (except the Approved Manager) to be co-assured under any of the Insurances,
 
without the prior written consent of the Owners and the Owners’ Financier , and for the purposes of this Clause 38.10, The Charterers shall not settle, compromise or abandon
any claim under any obligatory insurance for Total Loss or for a Major Casualty, and shall do all things necessary and provide all documents, evidence and information to
enable the Owners to collect or recover any moneys which at any time become payable in respect of the obligatory insurances.
 
38.11
The Charterers shall provide the Owners upon written request copies of the following documents/information as the Owners may reasonably require:
 
(a)
after the occurrence of a Termination Event which is continuing, all communications, between the Charterers and:
12
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

(i)
the approved brokers; and
 
(ii)
the approved protection and indemnity and/or war risks associations; and
 
(iii)
the first class international insurers and/or underwriters, which relate directly or indirectly to:
 
(A)
the Charterers’ obligations relating to the obligatory insurances including, without limitation, all requisite declarations and payments of additional premiums or
calls; and
 
(B)
any credit arrangements made between the Charterers and any of the persons referred to in paragraphs (i) or (ii) relating wholly or partly to the effecting or
maintenance of the obligatory insurances; and
 
(b)
any communication with all parties involved in case of a claim under any of the Vessel’s insurances.
 
38.12
The Charterers shall promptly provide the Owners (or any persons which they may designate) with:
 
(a)
any information which the Owners or the Owners’ Financier (or any such designated person) may request for the purpose of:
 
(i)
obtaining or preparing any report from an independent marine insurance broker as to the adequacy of the obligatory insurances effected or proposed to be effected;
and/or
 
(ii)
effecting, maintaining or renewing any such insurances as are referred to in Clause 13(a) or dealing with or considering any matters relating to any such insurances;
and
 
(b)
prior to the occurrence of a Termination Event, a yearly report of any claim under any of the Vessel’s insurances which does not constitute a Major Casualty and after the
occurrence of a Termination Event which is continuing, copies of all communications between all parties in case of a claim under any of the Vessel’s insurances.
 
38.13
If one or more of the obligatory insurances are not effected and maintained with first class international insurers or are effected with an insurance or captive subsidiary of the
Owners or the Charterers, then the Charterers shall procure, at their own expense, that the relevant insurers maintain in full force and effect facultative reinsurances with
reinsurers and through brokers, in each case, of recognised standing and acceptable in all respects to the Owners. Any reinsurance policy shall include, if and when permitted
by law, a cut-through clause in a form acceptable to the Owners. The Charterers shall procure that underwriters of the primary insurances assign each reinsurance to the
relevant financiers in full, if required.
 
38.14
The Charterers shall be solely responsible and indemnify the Owners in respect of all premiums and other costs and expenses which are incurred by (i) the Owners in
connection with or with a view to effecting, maintaining or renewing a lessors’ or innocent owner’s interest insurance and a lessor’s or innocent owners’ additional perils
(pollution) insurance or any similar protective shipowner insurance that is taken out in respect of the Vessel and/or (ii) the Owners’ Financier (if any) in connection with or with a
view to effecting, maintaining or renewing a mortgagee’s interest insurance and a mortgagee’s additional perils (pollution) insurance that is taken out in respect of the Vessel. In
each case, the amount of the insurances referred to in this Clause 38.14 shall be equal to at least one hundred and twenty per cent (120%) of the Outstanding Principal at the
relevant time.
 
38.15
The Charterers shall:
13
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

(a)
at the expense of the Charterers, furnish the Owners once a year (or, after a Termination Event has occurred or if there has been a material change in the terms of any obligatory
insurances taken out in connection with Clause 38 (Insurance), as many times per year as the Owners may require) with a detailed report signed by an independent firm of
marine insurance brokers or consultants appointed by the Owners dealing with the Insurances and stating the opinion of such firm as to the adequacy of the Insurances;
 
(b)
reimburse the Owners any expenses incurred by the Owners in obtaining the reports described in Clause 38.15(a); and
 
(c)
procure that there is delivered to the insurance brokers or consultants described in Clause 38.15(a) such information in relation to the Insurances as such brokers or consultants
may require.
 
38.16
The Charterers shall keep the Vessel insured at their expense against such other risks which the Owners or the Owners’ Financier shall at it sole discretion consider reasonable
for a prudent shipowner or operator to insure against at the relevant time (as notified by the Owners) and which are, at that time, generally insured against by owners or
operators of vessels similar to the Vessel (including but not limited to kidnap and ransom insurances, freight demurrage and defence insurances and loss of hire insurances,
which the Charterers acknowledge shall fall within the scope of this clause).
 
38.17
The Charterers shall, in the event that any Approved Manager or any co-assured makes a claim under any obligatory insurances taken out in connection with this Clause 38
(Insurance) but is unable to or otherwise fails to pay in full any deductible in connection with such claim (in an amount as apportioned between the Charterers and every other
assured in proportion to the gross claims made by or paid to each of them), pay such shortfall in deductible payable on behalf of the Approved Manager or co-assured.
 
38.18
Subject to the provisions of the agreed loss payable clauses and the Leasing Documents, and the approval of the Owners and the insurers, the Charterers shall effect all insured
repairs and shall undertake settlement and reimbursement from the insurers of all costs in connection with such repairs as well as insured charges, expenses and liabilities to the
extent of coverage under the Insurances. For the avoidance of doubt, the Charterers shall remain responsible for and to effect repairs and settlement of costs and expenses
incurred thereby in respect of all repairs not covered by the Insurances and/or not exceeding any possible franchise(s) or deductibles provided for in the Insurances. All time
used for repairs under this Clause 38.18 shall be for the Charterers’ account.
 
CLAUSE 39 – WARRANTIES RELATING TO VESSEL
 
39.1
It is expressly agreed and acknowledged that the Owners are not the manufacturer or original supplier of the Vessel which has been purchased by the Owners (as buyers under
the MOA) from the Sellers (as sellers under the MOA) pursuant to the MOA for the purpose of then chartering the Vessel to the Charterers hereunder and that no condition,
term, warranty or representation of any kind is or has been given to the Charterers by or on behalf of the Owners in respect of the Vessel (or any part thereof).
 
39.2
All conditions, terms or warranties express or implied by the law relating to the specifications, quality, description, merchantability or fitness for any purpose of the Vessel (or
any part thereof) or otherwise are hereby expressly excluded.
 
39.3
The Charterers agree and acknowledge that the Owners shall not be liable for any claim, loss, damage, expense, injury, death, delay or other liability of any kind or nature caused
directly or indirectly by the Vessel, whether onboard the Vessel or otherwise, or by any inadequacy thereof or the use or performance thereof or any repairs thereto or servicing
thereof and irrespective of whether such claim, loss, damage, expense, injury, death, delay or other liability shall arise from the unseaworthiness of the Vessel, and the Charterers
shall not by reason thereof be released from any liability to pay any Charterhire or other payment due under this Charter or any of the other Leasing Documents.
14
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

39.4
The Charterers agree and acknowledge that the Owners are not operating the Vessel and the liability to surrender any Emission Allowances in respect of the Vessel under any
applicable Emission Scheme shall lie with the Charterers and/or any other organisation or person whom the Charterers have contractually agreed to take over all duties and
responsibilities (including any Sub-charterer or the Approved Manager of the Vessel) imposed by the ISM Code, and the Charterers hereby agree that:
 
(i)
they shall or shall procure that any other organisation or person whom the Charterers have contractually agreed to take over all duties and responsibilities imposed by
the ISM Code (including the Approved Manager or any Sub-charterer of the Vessel) will:
 
(A)
surrender any Emission Allowances in respect of the Vessel under any applicable Emission Scheme; and
 
(B)
promptly upon the Owners’ request, provide and submit such signed mandate letter in the form required by the Owners and the relevant authority and
provide any other information and documents as required by the Owners (acting reasonably) and/or the relevant authority in relation to any applicable
Emission Scheme; and
 
(ii)
with the cooperation of the Owners to the extent strictly required by the relevant rules and regulations and without prejudice to the Owners’ rights under the Leasing
Documents, they shall fulfil all obligations which may be imposed on the Owners as registered owner of the Vessel by the MARPOL Carbon Intensity Regulations.
 
39.5
Without prejudice to Clause 39.4, in relation to EU ETS:
 
(a)
the Charterers acknowledge that if the Vessel stops at ports in the European Union, they will incur liabilities under EU ETS and Fuel EU Maritime;
 
(b)
the Charterers acknowledge and agree that if they intend to sail the Vessel into ports in the European Union, the Charterers and/or any other organisation or person whom the
Charterers have contractually agreed to take over all duties and responsibilities (including any Sub-charterer or the Approved Manager of the Vessel) imposed by the ISM Code
shall register the Vessel as the “shipping company” as required under the EU ETS and shall comply in all respects with the EU ETS and Fuel EU Maritime;
 
(c)
if required by the Owners (acting reasonably), the Charterers and/or any other organisation or person whom the Charterers have contractually agreed to take over all duties and
responsibilities (including any Sub-charterer or the Approved Manager of the Vessel) imposed by the ISM Code shall provide a letter in a format to be agreed by the Owners
confirming that they have assumed responsibility for the operation of the Vessel from the Owners (the “ETS and Fuel EU Maritime Letter”);
 
(d)
the Charterers and/or any other organisation or person whom the Charterers have contractually agreed to take over all duties and responsibilities (including any Sub-charterer
or the Approved Manager of the Vessel) imposed by the ISM Code shall submit the ETS and Fuel EU Maritime Letter to the relevant administering authority upon registration of
the Vessel pursuant to the EU ETS and shall promptly provide the Owners (which shall be no later than fourteen (14) days (or such longer period mutually agreed by the Owners
and the Charterers) of the Owners’ demand) with evidence of such registration; and
15
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

(e)
if required by the Owners, they shall enter and shall exercise its best efforts to procure that any other organisation or person whom they have contractually agreed to take over
all duties and responsibilities imposed by the ISM Code (including any Approved Sub-Charterer or the Approved Manager of the Vessel) enters an agreement with the Owner
setting out how the parties will co-operate to exchange, review and analyse all relevant data and information relating to the ETS and Fuel EU Maritime as required to enable the
parties to ensure compliance with the EU ETS and Fuel EU Maritime in accordance with the parties’ obligations under Clauses 39.4, 39.5 and 39.6 (the “ETS and Fuel EU
Maritime Agreement”).
 
39.6
The Charterers shall (and they shall procure that each of the Approved Manager and the Sub-charterer shall):
 
(a)
co-operate and exchange all relevant Emissions Data and information with each other in a timely manner to:
 
(i)
facilitate compliance by the Charterers and/or any other organisation or person whom the Charterers have contractually agreed to take over all duties and responsibilities
(including any Sub-charterer or the Approved Manager of the Vessel) imposed by the ISM Code and any other Emission Scheme Participant with any applicable Emission
Scheme; and
 
(ii)
enable the Charterers and any other Emission Scheme Participant to calculate the amount of Emission Allowances in respect of the Vessel which are required to be surrendered
to the relevant Emission Scheme Authority for that Emission Scheme during the Charter Period; and
 
(b)
promptly supply to the relevant Emission Scheme Authority relating to any applicable Emission Scheme with all relevant Emissions Data documents (including without
limitation, any relevant mandating documents required in connection with surrendering the relevant Emission Allowances to the relevant Emission Scheme Authority relating to
the relevant Emission Scheme) required to be provided to such Emission Scheme Authority relating to such Emission Scheme,
 
and to do all such things necessary or advisable to ensure that the Owners, the Charterers, each Emission Scheme Participant and the Vessel will be in compliance with all
Environmental Laws.
 
CLAUSE 40    – TERMINATION, REDELIVERY AND TOTAL LOSS
 
40.1
If the Termination Purchase Price becomes payable in accordance with Clause 44.2 (Termination Events), it is agreed by the Parties that payment of the Termination Purchase
Price is deemed to be proportionate as to amount, having regard to the legitimate interests of the Owners, in protecting against the Owners’ risk of the Charterers failing to
perform its obligations under this Charter.
 
40.2
Upon the Termination Notice Date, the Charterers’ right to possess and operate the Vessel shall immediately cease (without in any way affecting the Charterers’ obligation to
pay the Termination Purchase Price).
 
40.3
Upon irrevocable receipt of the Termination Purchase Price by the Owners pursuant to Clause 44.2 (Termination Events) in full:
(a)
this Charter shall terminate (provided that any provision hereof expressed to survive such termination shall do so in accordance with its terms); and
 
(b)
the Owners shall, at the cost of the Charterers, transfer the legal and beneficial ownership of the Vessel on an “as is where is” basis to the Charterers and shall execute a bill of
sale, duly notarised and legalised at the cost of the Charterers, and a protocol of delivery and acceptance, and, at the cost and upon request of the Charterers, provide a
certificate of ownership and encumbrance showing the Vessel is free from registered encumbrance created by the Owners issued by the Flag State and any other necessary
documents that are relevant to the Owners for the re-registration of the Vessel, and such transfer otherwise made in accordance with Clause 49.1.
 
16
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

40.4
If the Charterers fail to make any payment of the Termination Purchase Price on the due date thereof:
 
(a)
interest on such outstanding amount shall accrue in accordance with Clause 36.9; and
 
(b)
(i)
the Charterers shall upon the Owners’ prior written request (at the Owners’ sole discretion), be obliged to (and at the Charterers’ own cost) redeliver the Vessel to the
Owners at such ready and nearest safe port as the Owners may require; further and for the avoidance of doubt, the Owners shall be entitled (at the Owners’ sole
discretion) to operate the Vessel as they may require and may create whatsoever interests thereon, including without limitation charterparties or any other form of
employment contracts. The Earnings of the Vessel during such period less its operational expenses (including, without limitation, any maintenance costs of, and costs
for fuel, bunkering or oils for, the Vessel) (the “Net Trading Proceeds”) shall be applied against the Termination Purchase Price and any other amounts payable under
the Leasing Documents pursuant to Clause 54A (General Application of Proceeds) and if such use of the Vessel results in the Owners suffering a loss then such
losses shall, for the avoidance of doubt, be included in the indemnities contained in Clause 50 (Indemnities) and be added to the Termination Purchase Price. Upon
redelivery of the Vessel this Charter shall terminate save for the provisions set out in Clause 36.9, this Clause 40(Termination, Redelivery and Total Loss) and Clause 50
(Indemnities) and any other provisions expressed to survive termination or that are cross referred to in the survived clauses or are required to survive to enable proper
construction of the survived terms; and/or
 
(ii)
the Charterers shall at any time after the Termination Notice Date be entitled to find a purchaser for the Vessel whereupon the Charterers shall, by notice in writing to
the Owners, identify a third party acceptable to the Owners to purchase the Vessel (the “Sale Notice”) and procure completion of such sale (A) within 45 days from the
Termination Notice Date (the “Initial Exclusivity Period”) or (B) such other longer period (but in any event not exceeding 90 days from the Termination Notice Date)
(the “Extended Exclusivity Period”) provided however that (x) the Charterers have served the Sale Notice on the Owners within the Initial Exclusivity Period; and (y)
the Charterers have, prior to the expiry of the Initial Exclusivity Period, paid an amount of US$850,000 (“Sale Deposit”) to such account as the Owners may notify the
Charterers in writing which shall be applied against the Termination Purchase Price pursuant to Clause 54A (General Application of Proceeds); and
 
(iii)
the Owners shall, after the Exclusivity Period or if applicable, the Extended Exclusivity Period, if the Vessel has not yet been sold and transferred to a new buyer (and
such sale has not been completed) within the Exclusivity Period or the Extended Exclusivity Period (as the case may be), then the Owner shall, be entitled (at the
Owners’ sole discretion) to sell the Vessel,
17
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

in either case, the sale proceeds (after deducting all fees, taxes, disbursements, any maintenance costs of, and costs for fuel, bunkering or oils for, the Vessel and any
other costs and expenses incurred by the Owners in connection with such sale) (the “Net Sales Proceeds”) derived from such sale shall be applied against the
Termination Purchase Price pursuant to Clause 54A (General Application of Proceeds) and any other amounts payable under Clause 50 (Indemnities) in any manner
the Owners deem fit and any excess of such amount after such application shall be paid to the Charterers. If the Net Sales Proceeds are not in an amount sufficient to
discharge in full the Termination Purchase Price and any other amounts payable under Clause 50 (Indemnities), the Charterers shall continue to be liable for the
shortfall and interest shall continue to accrue on such shortfall in accordance with Clause 36.9. Upon completion of such sale by the Owners, this Charter shall
terminate save for Clause 36.9, this Clause 40.4(b)(ii), Clause 50 (Indemnities) and any other provisions expressed to survive termination or that are cross referred to in
the survived clauses or are required to survive to enable proper construction of the survived terms;
 
(c)
the Charterers shall, upon the Owners’ prior written request (at the Owners’ sole discretion) be obliged to (and at the Charterers’ own cost) redeliver the Vessel to the Owners at
such ready and nearest safe port as the Owners may require following prior consultation with the Charterers; and as from such redelivery the Owners shall maintain ownership
of such Vessel and own, operate or sell or otherwise use it in any manner they deem fit and notify the Charterers in writing (the “Termination Value Notice”) they shall apply the
then Market Value of the Vessel (the “Termination Value”), against the Termination Purchase Price and all other amounts payable to the Owners under this Charter unless the
Charterers notify in writing their disagreement on the Termination Value within three (3) days from the date of the Termination Value Notice, then a second Approved Valuer shall
be selected by the Charterers and the second valuation prepared on the same terms and conditions as set out in paragraphs (a), (b), (d), (e) and (f) of the definition of “Market
Value” in Clause 59.1 shall be provided immediately to the Owners and the Termination Value shall be the arithmetic mean of such two valuations and shall be binding to the
Owners and the Charterers, and provided that if the difference in the two valuations obtained is more than ten per cent. (10%) of the lower valuation obtained, a third Approved
Valuer shall be selected by the Owners and the third valuation shall be prepared on the same terms and conditions as set out in paragraphs (a), (b), (d), (e) and (f) of the
definition of “Market Value” in Clause 59.1 and the Termination Value shall be the arithmetic mean of such three valuations and shall be binding to the Owners and the
Charterers. Upon application of the Termination Value under this Clause 40.4(c), if:
 
(i)
the amount of the Termination Value is in excess of the aggregate amounts due to the Owners under this Charter at the relevant time, such excess will be paid to the
Charterers provided that the Owners are satisfied that no Obligor has any actual liability to it under or in connection with any Leasing Document; or
 
(ii)
in case the amount of the Termination Value is not sufficient to discharge in full the aggregate amounts due to the Owners under this Charter following such application
the Charterers shall continue to be liable for the shortfall and interest shall continue to accrue on such shortfall in accordance with Clause 36.9.
 
Any terms expressly provided to survive post-termination of this Charter shall continue to be in full force and effect at all times thereafter.
 
40.5
If the Charterers are required to redeliver the Vessel to the Owners pursuant to Clause 40.4, at the time of redelivery to the Owners (at the Charterers’ cost and expense):
 
(a)
the Charterers shall ensure that the Vessel shall:
 
(i)
be in compliance with its Insurances;
18
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

(ii)
be in an equivalent class as she was as at the Delivery Date without any overdue recommendation or condition, and with valid trading certificates for not less than
three (3) months and free of average damage affecting the Vessel’s classification and in the same or as good structure, state, condition and classification as that in
which she was deemed on the Delivery Date, fair wear and tear not affecting the Vessel’s classification excepted;
 
(iii)
have passed her any applicable special surveys on or before their due date at the Charterers’ time and expense without any condition or outstanding issue and to the
satisfaction of the Classification Society;
 
(iv)
have her survey cycles up to date and trading and class certificate valid for at least the number of months agreed in Box 17;
 
(v)
be redelivered to the Owners together with all spare parts and spare equipment as were on board at the time of Delivery, and any such spare parts and spare equipment
on board at the time of re-delivery shall be taken over by the Owners free of charge;
 
(vi)
be free of any cargo and Security Interest (save for Permitted Security Interests);
(vii)
be free of officers and crew (unless otherwise agreed by the Owners);
 
(viii)
have had her underwater parts treated with ample anti-fouling to last for the ensuing period up to the next scheduled dry docking of the Vessel; and
 
(ix)
be redelivered to the Owners together with all material information generated during the Charter Period in respect of the use, possession, operation, navigation,
utilization of lubricating oil and the physical condition of the Vessel, whether or not such information is contained in the Charterers’ equipment, computer or property;
and
 
(b)
the Charterer shall use their best endeavours to ensure that the Vessel shall be free of any charter and other employment unless the Owners wish to retain the continuance of
any such existing charter.
 
40.6
The Owners shall have the right to appoint (at the Charterers’ cost and expense) surveyor(s) for the purpose of determining the condition of the Vessel at redelivery. The
findings of the surveyor appointed by the Owners (the “Owners’ Surveyor”) shall be conclusive. The Charterers shall provide the Owners’ Surveyor with all such facilities and
access to the Vessel as may be required to enable such Owners’ Surveyor to conduct its survey of the Vessel and shall take all such actions as may be recommended by the
Owners’ Surveyor to ensure that the Vessel shall be redelivered to the Owners in accordance with Clause 40.5.
 
40.7
The Owners have no obligation to accept redelivery of the Vessel until they are satisfied that the Vessel has been put into the redelivery conditions as set out in Clause 40.5 and
other relevant conditions of this Charter. Moreover, the Owners reserve all rights to recover from the Charterers any costs, expenses and/or liabilities incurred or suffered by
them (including, without limitation, the costs of any docking and/or repairs which may be required to restore the Vessel to the structure, state, condition and class as that in
which the Vessel was delivered (fair wear and tear not affecting class excepted, but without any recommendations or conditions as to class)) as a result of the Vessel not being
redelivered in accordance with the terms of this Charter.
19
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

40.8
The Owners shall, at the time of the redelivery of the Vessel, take over all bunkers, lubricating oil, unbroached provisions, paints, ropes and other consumable stores in the
Vessel at no cost to the Owners. The bunkers on board the Vessel at redelivery shall be measured or verified by the Owners’ Surveyor on redelivery. The measurement or
verification of measurement of the bunkers on redelivery by the Owners’ Surveyor shall be binding on the Parties. The value attributable to the bunkers on redelivery shall be
such applicable volume of bunkers in metric tons multiplied by the applicable price per metric ton, as evidenced by invoices and vouchers from the last bunkering port provided
by the Charterers or the Approved Sub-charterer (as the case may be). Such value of bunkers on redelivery is referred to as the “Termination Bunker Value”.
40.9
Throughout the Charter Period, the Charterers shall bear the full risk of any Total Loss of or any other damage to the Vessel howsoever arising. If the Vessel, for any reason,
becomes a Total Loss after Delivery, the Charterers shall subject to Clause 40.11 pay the Termination Purchase Price to the Owners on the earlier of (“Total Loss Payment Date”):
 
(a)
the date falling ninety (90) days after such Total Loss has occurred; and
 
(b)
the date of receipt by the Owners and/or the Owners’ Financers (if any) of the Total Loss Proceeds.
 
40.10
Upon such receipt by the Owners of the Termination Purchase Price, this Charter shall terminate (without prejudice to any provision of this Charter expressed to survive
termination) but until such receipt, the Charterers shall remain liable to make all payments of Charterhire and all other amounts to the Owners under this Charter, notwithstanding
that the Vessel has become a Total Loss.
 
40.11
Any Total Loss Proceeds unconditionally received by the Owners (or the Owners’ Financiers in accordance with the terms of the relevant loss payable clause) shall be applied
in accordance with Clause 54A (General Application of Proceeds) and shall satisfy the obligation of the Charterers to pay the Termination Purchase Price to the extent received
by the Owners or the Owners’ Financiers (in accordance with the terms of the relevant loss payable clause). The obligation of the Charterers to pay the Termination Purchase
Price shall remain unaffected and exist regardless of whether any of the insurers have agreed or refused to meet or has disputed in good faith, the claim for Total Loss.
 
40.12
If the Total Loss Proceeds unconditionally received by the Owners and/or the Owners’ Financiers in accordance with the terms of the relevant loss payable clause) are less than
the Termination Purchase Price, the Charterers shall pay such shortfall to the Owners on the Total Loss Payment Date.
 
40.13
The Owners shall have no obligation to supply to the Charterers with a replacement vessel following the occurrence of a Total Loss.
 
CLAUSE 41    – FEES AND EXPENSES
 
41.1
Without prejudice to any other rights of the Owners hereunder, the Charterers shall promptly pay to the Owners on written demand on a full indemnity basis all costs, charges
and expenses incurred by the Owners in collecting any Charterhire or any other amounts not paid on the due date under this Charter and in remedying any other failure of the
Charterers to observe the terms and conditions of this Charter.
 
41.2
Whether or not any of the transactions contemplated hereby are consummated, all documented costs and expenses (including, but not limited to, legal costs, expenses and
other disbursements reasonably incurred by the Owners’ legal counsels) incurred by the Owners in the negotiation and execution of all documentation in relation to this Charter,
and the Leasing Documents shall be for the account of the Charterers.
20
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

41.3
Whether or not any of the transactions contemplated hereby are consummated, all documented costs and expenses incurred by the Owners in relation to the acquisition and
registration of the Vessel by the Owners in the Owners’ name in the Flag State together with any and all fees (including but not limited to any vessel registration, tonnage fees,
notarisation fees, legalisation fees, fees to insurance advisers, resident agent fees and process agent fees) payable by the Owners to such Flag State to maintain and/or renew
such registration shall be for the account of the Charterers. Without prejudice to the foregoing, if the Flag State requires the Owners to establish a physical presence or office in
the jurisdiction of such Flag State, all fees, costs and expenses payable by the Owners to establish and maintain such physical presence or office shall be for the account of the
Charterers.
 
41.4
If the Charterers request for a change of Flag State, the Charterers shall pay or reimburse the Owners (as the case may be) in respect of all documented costs, expenses and/or
taxes which are payable to effect such change.
 
41.5
If there is any amendment, waiver or consent whether requested by the Owners or any of the Obligors, the Charterers shall on demand pay or reimburse the Owners for the
amount of all costs and expenses (including, without limitation, legal fees) reasonably incurred by the Owners in responding to, evaluating, negotiating, implementing or
documenting such request, amendment, waiver, requirement and any actual or contemplated agreement in relation thereto, including (without limitation) all costs and expenses
(including, without limitation, legal fees) reasonably incurred by the Owners in relation to negotiation or entry into of any amendment, supplement, waiver or consent relating to
the use of the Replacement Reference Rate, ensuring and confirming that all the Leasing Documents remain valid and fully perfected following such amendment, supplement,
waiver or consent.
 
41.6
The Charterers shall on demand pay or reimburse the Owners for the amount of all costs and expenses (including, without limitation, legal fees) incurred by the Owners in
connection with the enforcement of, or the preservation of any rights under, any Leasing Document or any Security Interest created thereunder and with any proceedings
instituted by or against the Owners as a consequence of entering into any Leasing Document, taking or holding any Security Interests created thereunder or enforcing those
rights, including (without limitation) any losses, costs and expenses which the Owners may from time to time sustain, incur or become liable by reason of the Owners being the
registered owner of the Vessel and/or being deemed by any court or authority to be an operator or controller, or in any way concerned in the operation or control, of the Vessel.
 
CLAUSE 42     – NO WAIVER OF RIGHTS
 
42.1
No neglect, omission, delay or indulgence on the part of either Party in enforcing the terms and conditions of this Charter shall prejudice the strict rights of that party or be
construed as a waiver thereof nor shall any single or partial exercise of any right of either Party preclude any other or further exercise thereof.
 
42.2
No right or remedy conferred upon either Party by this Charter shall be exclusive of any other right or remedy provided for herein or by law and all such rights and remedies
shall be cumulative.
 
CLAUSE 43     – NOTICES
 
43.1
Any notice, certificate, demand or other communication to be served, given made or sent under or in relation to this Charter shall be in English and in writing and (without
prejudice to any other valid method or giving making or sending the same) shall be deemed sufficiently given or made or sent if sent by registered post or by email to the
following respective addresses:
21
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

(A)
to the Owners:
c/o
Jiangsu Financial Leasing Co., Ltd.
Address: 9/F, No.1 Building, No.99 East Jialingjiang Street,
Nanjing, Jiangsu Province, P.R. China
Attention: ZHANG Xinhang/TENG Huaigang
Email:
(B)
to the Charterers:
c/o
Performance Shipping Management Inc.
Address: 373 Syngrou Ave. & 2-4 Ymittou str.
17564, Palaio Faliro, Athens, Greece
Attention: Mr. Andreas Nikolaos Michalopoulos
Email:
or, if a party hereto changes its address or email, to such other address or email as that party may notify to the other.
 
43.2
Any such communication shall be deemed to have reached the party to whom it was addressed (a) when delivered (in case of a registered letter), or (b) when actually received in
readable form (in case of an email). A notice or other such communication received on a non-working day or after 5.00 p.m. in the place of receipt shall be deemed to be served
on the next following working day in such place.
 
CLAUSE 44     – TERMINATION EVENTS
 
44.1
The Owners and the Charterers hereby agree that any of the following events shall constitute a Termination Event:
 
(a)
any Obligor fails to pay or the Owners do not receive on the due date any amount payable pursuant to a Leasing Document, unless such failure to pay is caused by a technical
error and payment is made within seven (7) Business Days of its due date;
 
(b)
the Charterers breach or omit to observe or perform any of their undertakings in Clause 45.1(ff), Clause 46(j), Clause 46(k), Clause 46(l), Clause 46(o), Clause 46(p), Clause 46(r),
Clause 46(s), Clause 46(t), Clause 46(u), Clause 46(w), Clause 46(y) and Clause 46(hh) or the Guarantor breaches or omits to observe or perform any of its undertakings
contained in the Guarantee;
 
(c)
the Charterers fail to obtain and/or maintain the Insurances required under Clause 38 in accordance with the provisions thereof or any insurer in respect of such Insurances
cancels the Insurances or disclaims liability with respect thereto;
 
(d)
any Obligor commits any other breach of, or omits to observe or perform, any of their other obligations or undertakings in this Charter or any other Leasing Document (other
than a breach referred to in paragraphs (a), (b) or (c) above) unless such breach or omission is in the opinion of the Owners, remediable and such Obligor remedies such breach
or omission to the satisfaction of the Owners within ten (10) Business Days of the Owners giving notice to the Charterers or (if earlier) any Obligor becoming aware of the failure
to comply
 
(e)
any representation or warranty made by any Obligor in or pursuant to any Leasing Document, or in any notice or other document, certificate or statement delivered by it
pursuant thereto or in connection therewith is or proves to be untrue or misleading in a material way when it is made;
 
(f)
any of the following occurs in relation to any Financial Indebtedness of the Charterers or the Guarantor:
22
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

(i)
any Financial Indebtedness of the Charterers or the Guarantor is not paid when due or, if so payable, on demand after any applicable grace period has expired; or
 
(ii)
any Financial Indebtedness of the Charterers or the Guarantor is declared to be or otherwise becomes due and payable prior to its specified maturity as a result of an
event of default (howsoever described) and not as a consequence of the exercise of any voluntary right of prepayment, and following the expiry of any applicable
grace period;
 
(iii)
any commitment for any Financial Indebtedness is cancelled or suspended by any of its creditors as a result of an event of default (howsoever described) and not as a
consequence of the exercise of any voluntary right of prepayment, and following the expiry of any applicable grace period;
 
(iv)
any of its creditors declares any Financial Indebtedness due and payable prior to its specified maturity as a result of an event of default (howsoever described) and not
as a consequence of the exercise of any voluntary right of prepayment, and following the expiry of any applicable grace period; or
 
(v)
any overdraft, loan, note issuance, acceptance credit, letter of credit, guarantee, foreign exchange or other facility, or any swap or other derivative contract or
transaction, relating to any Financial Indebtedness of the Charterers or the Guarantor ceases to be available or becomes capable of being terminated or declared due
and payable or cash cover is required or becomes capable of being required, as a result of any termination event or event of default (howsoever defined),
 
provided that no Termination Event will occur under this paragraph (f) if, (A) in respect of the Charterers, the aggregate amount of the Financial Indebtedness falling within sub-
paragraphs (i) to (v) above is less than US$1,000,000 (or its equivalent in any other currency or currencies) and (B) in respect of the Guarantor, the aggregate amount of the
Financial Indebtedness falling within sub-paragraphs (i) to (v) above is less than US$10,000,000 (or its equivalent in any other currency or currencies).
 
(g)
any of the following occurs in relation to the Charterers or the Guarantor:
 
(i)
it becomes unable to pay their debts as they fall due; or
 
(ii)
the value of its assets is less than its liabilities (taking into account contingent and prospective liabilities); or
 
(iii)
any of its assets are subject to any form of execution, attachment, arrest, sequestration or distress which is not discharged within (A) in the case of the Charterers,
thirty (30) days and (B) in the case of the Guarantor, sixty (60) days; or
 
(iv)
any administrative or other receiver is appointed over all or a part of the assets of the Charterers or the Guarantor unless as part of a solvent reorganisation which has
been approved by the Owners (which approval shall not be unreasonably delayed or withheld); or
 
(v)
it makes any formal declaration of bankruptcy or any formal statement to the effect that they are insolvent, or a winding up or administration order is made in relation to
the Charterers or the Guarantor, or the shareholders or directors of the Charterers or the Guarantor pass a resolution to the effect that they should be wound up, placed
in administration or cease to carry on business; or
 
(vi)
a petition is presented in any Relevant Jurisdiction for the winding up or administration, or the appointment of a provisional liquidator, of the Charterers or the
Guarantor unless the petition is being contested in good faith and on substantial grounds and is dismissed or withdrawn within twenty-one (21) days of the
presentation of the petition; or
23
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

(vii)
the Charterers or the Guarantor petitions a court, or presents any proposal for, any form of judicial or non-judicial suspension or deferral of payments, reorganisation of
their debt (or certain of their debt) or arrangement with all or a substantial proportion (by number or value) of their creditors or of any class of them or any such
suspension or deferral of payments, reorganisation or arrangement is effected by court order, contract or otherwise; or
 
(viii)
any meeting of the shareholders or board of directors of the Charterers or the Guarantor is summoned for the purpose of considering a resolution or proposal to
authorise or take any action of a type described in paragraph (iii) to (vii) above;
 
(ix)
in a country other than England and Wales, any event occurs or any procedure is commenced which, in the reasonable opinion of the Owners, is similar to any of the
foregoing referred to in paragraphs (iii) to (vii) above inclusive; or
 
(x)
any expropriation, attachment, sequestration, distress or execution (or any analogous process in any jurisdiction) affects any asset or assets of the Charterers or the
Guarantor which is not released within (A) in the case of the Charterers, thirty (30) days and (B) in the case of the Guarantor, sixty (60) days from its occurrence;
 
(h)
the Charterers or the Guarantor suspends or ceases or threatens to suspend or cease carrying on its business;
 
(i)
any consent, approval, authorisation, license or permit necessary to enable the Charterers or any Approved Sub-charterer to operate or sub charter the Vessel or to enable any
of them to comply with any provision of this Charter, the other Leasing Documents, or any Transaction Document to which it is a party or to ensure that the obligations of the
Charterers and the Approved Sub-charterer are legal, valid, binding or enforceable is not granted, expires without being renewed, is revoked or becomes liable to revocation or
any condition of such a consent, approval, authorisation, license or permit is not fulfilled;
 
(j)
any event or circumstance occurs which has or is reasonably likely to have a Material Adverse Effect;
 
(k)
the Vessel is subject to any form of execution, attachment, arrest, sequestration or distress which is not discharged within thirty (30) days (or such longer period as the Owners
may agree);
 
(l)
this Charter or any Leasing Document or any Security Interest created by a Leasing Document:
 
(i)
is expired (and not extended in accordance with the terms thereunder), cancelled, terminated, rescinded or suspended or otherwise ceases to remain in full force and
effect for any reason or no longer constitutes valid, binding and enforceable obligations of any party to that document for any reason whatsoever; or
 
(ii)
is amended or varied without the prior written consent of the Owners, except for any amendment or variation which is expressly permitted by this Charter or any other
relevant Leasing Document;
 
(m)
an Obligor rescinds, repudiates or terminates a Leasing Document or any Transaction Document to which it is a party;
 
(n)
it is or has become:
24
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

(i)
unlawful or prohibited, whether as a result of the introduction of a new law, an amendment to an existing law or a change in the manner in which an existing law is or
will be interpreted or applied; or
 
(ii)
contrary to, or inconsistent with, any regulation,
 
for any Obligor to maintain or give effect to any of its obligations under this Charter or any of the other Leasing Documents to which it is a party in the manner it is
contemplated under such Leasing Document or any of the obligations of any Obligor under any Leasing Document to which it is a party are not or cease to be legal, valid,
binding and enforceable;
 
(o)
without prejudice to any of the express obligations of the Obligors under the Leasing Documents, in the opinion of the Owners (acting reasonably) anything whatsoever is
done or omitted to be done by an Obligor which would result in that Owners being in breach of or made subject to Sanctions, or at risk of being in breach of or made subject to
Sanctions;
 
(p)
the Security Interest constituted by any Leasing Document is in any way imperilled or in jeopardy;
 
(q)
any “event of default” or “termination event” (or any other similar events or circumstances and each as however described) occurs under the Initial Sub-Charter or the Initial
Sub-Charter is terminated or cancelled or is no longer valid, legal or binding for any reason; or
 
(r)
any Sub-charterer (including Approved Sub-charterer) of the Vessel becomes a Restricted Person or has engaged in any activities which would result in a violation of Anti-
Money Laundering Laws or Sanctions.
 
44.2
Upon the occurrence of any Termination Event which is continuing, the Owners may issue a written notice to the Charterers terminating the leasing of the Vessel under this
Charter (the “Termination Notice”) and demanding payment of the Termination Purchase Price, whereupon the Charterers shall be obliged to pay the Termination Purchase
Price to the Owners on the date specified by the Owners in their sole discretion in the Termination Notice (the “Termination Notice Date”).
 
44.3
For the avoidance of doubt, notwithstanding any action taken by the Owners following a Termination Event, the Charterers shall remain liable for the outstanding obligations
on their part to be performed under this Charter.
 
44.4
Without limiting the generality of the foregoing or any other rights of the Owners, upon the occurrence of a Termination Event which is continuing, the Owners shall have the
sole and exclusive right and power to (i) settle, compromise, compound, adjust or defend any actions, suits or proceedings relating to or pertaining to the Vessel and this Charter
and (ii) make proof of loss, appear in and prosecute any action arising from any policy or policies of insurance maintained pursuant to this Charter, and settle, adjust or
compromise any claims for loss, damage or destruction under, or take any other action in respect of, any such policy or policies and (iii) change or appoint a new manager for
the Vessel other than an Approved Manager and the appointment of the Approved Manager may be terminated immediately without any recourse to the Owners.
 
44.5
Each Termination Event shall either be a breach of condition by the Charterers where it involves a breach of this Charter or any of the other Leasing Documents by the
Charterers or shall otherwise be an agreed terminating event, the occurrence of which gives rise to a right of the Owners to terminate the leasing of the Vessel under this Charter
and to exercise their rights under this clause.
 
25
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

CLAUSE 44A      MANDATORY SALE
44A.1
If it becomes unlawful for (i) the Owners to perform, or the Owners are prohibited from performing, in any applicable jurisdiction any of their obligations, or (ii) the Owners to
exercise, or the Owners are prohibited from exercising, in any applicable jurisdiction any of their rights and remedies, in each case, in the manner contemplated by this Charter or
any other Leasing Document to which they are a party (including as a result of any Sanctions), the Owners shall notify the Charterers of this event and the Charterers shall be
required to pay the applicable Mandatory Sale Price to the Owners within thirty (30) days following such notice by the Owners or, if earlier, the date specified by the Owners in
the notice delivered to the Charterers (being no earlier than the last day of any applicable grace period permitted by law), and this Charter shall terminate in accordance with the
procedures set out in Clause 44A.2. For the avoidance of doubt, no Termination Event will be deemed to occur if the circumstances set out in this Clause occur provided that
the Charterers comply with their obligations as set out in this Clause 44A.1.
 
44A.2
If the Mandatory Sale Price becomes payable in accordance with Clause 44A.1, the same shall be payable in consideration of the purchase and transfer of the legal and
beneficial title of the Vessel pursuant to Clause 49 (Sale of the Vessel). The day on which the applicable Mandatory Sale Price is paid pursuant to Clause 44A.1 is a “Mandatory
Sale Date” and such transfer of Vessel provided therein is a “Mandatory Sale”.
 
CLAUSE 45     – REPRESENTATIONS AND WARRANTIES
 
45.1
The Charterers represent and warrant to the Owners as of the date hereof, and on each day henceforth until the last day of the Charter Period (unless expressly provided
otherwise), as follows:
 
(a)
the Charterers are (i) wholly legally and beneficially owned and (ii) controlled by the Guarantor;
 
(b)
the Guarantor is listed in the NASDAQ Capital Market;
 
(c)
each Obligor is duly incorporated and validly existing and, if applicable, in good standing under the laws of its jurisdiction of its incorporation;
 
(d)
each Obligor has the corporate capacity, and has taken all corporate actions and obtained all consents, approvals, authorisations, licenses or permits necessary for it:
 
(i)
to execute each of the Leasing Documents, any Transaction Document to which it is a party; and
 
(ii)
to comply with and perform its obligations under each of the Leasing Documents, any Transaction Document to which it is a party;
 
(e)
the entry into and performance by any Obligor by it of, and the transactions contemplated by, each Leasing Document, any Transaction Document to which it is a party do not
and will not conflict with:
 
(i)
any law or regulation applicable to it;
 
(ii)
its constitutional documents; or
 
(iii)
any agreement or instrument binding upon it or constitute a default or termination event (however described) under any such agreement or instrument;
 
(f)
all the consents, approvals, authorisations, licenses or permits referred to in Clause 45.1(d) remain in force and nothing has occurred which makes any of them liable to
revocation;
26
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

(g)
each of the Leasing Documents to which an Obligor is a party constitutes such Obligor’s legal, valid and binding obligations enforceable against such party in accordance with
its respective terms and any relevant insolvency laws affecting creditors’ rights generally;
 
(h)
no third party has any Security Interest, other than the Permitted Security Interests, or any other interest, right or claim over, in or in relation to the Vessel, this Charter or any
moneys payable hereunder and/or any of the other Leasing Documents;
 
(i)
other than Permitted Security Interests, none of the issued shares of the Charterers is subject to any Security Interest, deposited by way of security or otherwise charged in
favour of any person;
 
(j)
all payments which an Obligor is liable to make under any Leasing Document to which such Obligor is a party may be made by such party without deduction or withholding for
or on account of any tax payable under the laws of the jurisdiction of incorporation;
 
(k)
each Obligor has paid all taxes applicable to, or imposed on or in relation to it, its business or if applicable, the Vessel, except for those being contested in good faith with
adequate reserves;
 
(l)
the choice of governing law as stated in each Leasing Document to which an Obligor is party to and the agreement by such party to refer disputes to the relevant courts or
tribunals as stated in such Leasing Document are valid and binding against such Obligor;
 
(m)
no Obligor nor any of their assets are entitled to immunity on the grounds of sovereignty or otherwise from any legal action or proceeding (which shall include, without
limitation, suit, attachment prior to judgment, execution or other enforcement);
 
(n)
the obligations of each Obligor under each Leasing Document to which it is a party, are the direct, general and unconditional obligations of such Obligor and rank at least pari
passu with all other present and future unsecured and unsubordinated creditors of such Obligor save for any obligation which is mandatorily preferred by law and not by virtue
of any contract;
 
(o)
each Security Document creates (or once entered into, will create) the Security Interest which it is expressed to create with the ranking and priority it is expressed to have;
 
(p)
no Obligor is a US Tax Obligor, and none of them have established a place of business in the United States of America;
 
(q)
no Obligor or their respective Affiliates, and as at the date of this Charter, none of their respective directors, officers. employees or agents:
 
(i)
is a Restricted Person;
 
(ii)
is owned or controlled by or acting directly or indirectly on behalf of or for the benefit of a Restricted Person;
 
(iii)
owns or controls, or is or becomes an Affiliate of, a Restricted Person;
 
(iv)
has a Restricted Person serving as a director, officer or an employee; or
 
(v)
has received notice or is aware of any claim, action, suit, proceedings or investigations against it with respect to Sanctions;
 
(r)
each of the Obligors and their Affiliates, and as at the date of this Charter, their respective directors, officers, employees and agents, are in compliance with all Sanctions laws,
and none of them have been or are currently being investigated on compliance with Sanctions, they have not received notice or are aware of any claim, action, suit or
proceeding against any of them with respect to Sanctions and they have not taken any action to evade the application of Sanctions;
 
27
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

(s)
the Vessel is not subject to Sanction and is not employed, operated or managed in any manner which (i) is contrary to any Sanctions and in particular, the Vessel is not used by
or to benefit any party which is a Restricted Person or trade to any Restricted Country or otherwise to any area or country where trading the Vessel to such area or country
would constitute a breach of any Sanctions; or (ii) would trigger the operation of any sanctions limitation or exclusion clause in any insurance documentation;
 
(t)
none of the Obligor and to the best of the Charterers’ knowledge after due and careful enquiry, none of the Approved Sub-charterer is in breach of any laws or regulations
relating to the Vessel and its ownership, employment, operation, management and registration, including, without limitation, the ISM Code, the ISPS Code, all Environmental
Laws, the laws of the Vessel’s registry and in particular, all Anti-Money Laundering Laws, Anti-Terrorism Financing Laws and/or Business Ethics Laws and each of the Obligors
has instituted and maintained systems, controls, policies and procedures designed to:
 
(i)
prevent and detect incidences of bribery and corruption, money laundering and terrorism financing; and
 
(ii)
promote and achieve compliance with Anti-Money Laundering Laws, Anti-Terrorism Financing Laws and Business Ethics Laws;
 
(u)
the copy of each Transaction Document provided to the Owner is a true and complete copy of the same and there have been no amendments, supplements or variations to the
same without the prior written consent of the Owner;
 
(v)
each Transaction Document is valid, binding and enforceable against the parties thereto in accordance with its terms;
 
(w)
none of the Obligors nor any of their assets, in each case, has any right to immunity from set off, legal proceedings, attachment prior to judgment or other attachment or
execution of judgement on the grounds of sovereign immunity or otherwise;
 
(x)
none of the Obligors is insolvent or in liquidation or administration or subject to any other formal or informal insolvency procedure, and no receiver, administrative receiver,
administrator, liquidator, trustee or analogous officer has been appointed in respect of any Obligor or all or material part of their assets;
 
(y)
no Termination Event or Potential Termination Event is continuing;
 
(z)
as at the date of this Charter, the Vessel is commercially and technically managed under an Approved Management Agreement which remains in full force and effect;
 
(aa)
as at the date of this Charter, other than the Shipbuilding Contract, the Initial MOA, this Charter and the Initial Sub-Charter, the Charterers have not entered into any other
investments, any sale or leaseback agreements, any off-balance sheet transaction or incurred any other liability or obligation (including without limitation, any Financial
Indebtedness of any obligations under a guarantee) except:
 
(i)
liabilities and obligations under the Leasing Documents to which they are or, as the case may be, will be a party; or
 
(ii)
liabilities or obligations incurred in the normal course of its business of trading, operating and chartering, maintaining and repairing the Vessel;
28
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

(bb)
any factual information provided by the Charterers (or on their behalf) to the Owners was true and accurate in all material respects as at the date it was provided or as the date at
which such information was stated;
 
(cc)
the entry by each Obligor into any Leasing Document does not in any way cause any breach, and is in all respects permitted, under the terms of any document which it is
entered into;
 
(dd)
any factual information provided by the Charterers to the Owners for compliance of the Anti-Money Laundering Laws was true and accurate in all respects as at the date it was
provided or as the date at which such information was stated;
 
(ee)
as at the date of this Charter, none of the Obligors, and to the best of the Charterers’ knowledge after due and careful enquiry, or any Sub-charterer (including Approved Sub-
charterer) of the Vessel or any counterparties involved in any transactions of the Obligors has engaged in any activities which would result in a violation of Anti-Money
Laundering Laws or Sanctions; and
 
(ff)
that in relation to the Initial Sub-Charter:
 
(i)
there are no unresolved disputes and no pending claims between the Initial Sub- Charterer and the Charterer;
 
(i)
no event or circumstance is outstanding which constitutes a default under the Initial Sub-Charter;
 
(ii)
there are no amounts outstanding under the Initial Sub-Charter or due, owing or payable and unpaid by the Initial Sub-Charterer to the Charterers thereunder;
 
(ii)
there has not occurred any force majeure event (or such other similar event howsoever described under the terms of the Initial Sub-Charter), default or any event
entitling either the Charterers or Initial Sub-Charterer to terminate the Initial Sub-Charter; and
(iii)
the Initial Sub-Charterer is fully aware of the transactions contemplated under this Charter.
 
CLAUSE 46      – CHARTERERS’ UNDERTAKINGS
 
46.1
The Charterers undertake that they shall comply or procure compliance with the following undertakings commencing from the date hereof and up to the last day of the Charter
Period:
 
(a)
there shall be sent to the Owners:
 
(i)
as soon as possible, but in no event later than one hundred and eighty (180) days after the end of each financial year of the Guarantor, the audited annual financial
statements of the Guarantor;
 
(ii)
as soon as possible, but in no event later than one hundred and eighty (180) days after the end of each financial year of the Charterers, the unaudited annual financial
statements of the Charterers or at the Charterers’ option, an alternative operational review of the Charterers; and
 
(iii)
as soon as possible, but in no event later than ninety (90) days after the end of each half year of the Guarantor, the unaudited semi-annual financial statements of the
Guarantor, in each case, the Charterers shall procure that each set of financial statements and reports delivered pursuant to Clause 46.1(a) will:
 
29
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

(A)
be prepared in accordance with all applicable laws and generally accepted accounting principles consistently applied;
 
(B)
give a true and fair view of (if audited) or fairly representing (if unaudited) the state of affairs of the Guarantor at the date of those accounts and of their profit
for the period to which those accounts relate;
 
(C)
fully disclose or provide for all significant liabilities of the Charterers and/or the Guarantor (as appropriate) and its subsidiaries; and
 
(D)
if not in the English language, be accompanied by an English translation duly certified as to its correctness;
 
(b)
they will, after the occurrence of a Termination Event or a Potential Termination Event, provide to the Owners copies of all notices and minutes relating to any of their
extraordinary shareholders’ meeting which are despatched to the Charterers’ shareholders or creditors or any class of them;
 
(c)
they will provide or will procure that each Obligor (other than the Third Party Manager) and use their best endeavours to procure that the Third Party Manager provides the
Owners, prior to the occurrence of a Termination Event, at the Owners’ reasonable request and after the occurrence of a Termination Event, from time to time, with details of any
legal, arbitral or administrative action, proceedings or investigations involving such Obligor or the Vessel as soon as such action is instituted or it becomes apparent to such
Obligor that it is likely to be instituted;
 
(d)
they will, and will procure that each other Obligor will, obtain and promptly renew or procure the obtainment or renewal of and provide copies of, from time to time, any
necessary consents, approvals, authorisations, licenses or permits of any regulatory body or authority for the transactions contemplated under each Leasing Document to
which it is a party (including without limitation to sell, charter and operate the Vessel);
 
(e)
they will, and will procure that each other Obligor will, ensure that the Vessel shall be free of encumbrances and liens except for Permitted Security Interest and any
encumbrances or liens permitted in writing by the Owners and any mortgages granted by the Owners in favour of the Owners’ Financier;
 
(f)
they will not, and will procure that each other Obligor will not, create, assume or permit to exist any Security Interest of any kind upon any Leasing Document to which such
Obligor is a party, and if applicable, the Vessel, in each case other than the Permitted Security Interests;
 
(g)
they will at their own cost, and will procure that each other Obligor will:
 
(i)
do all that such Obligor to ensure that any Leasing Document to which such Obligor is a party validly creates the obligations and the Security Interests which such
Obligor purports to create; and
 
(ii)
without limiting the generality of paragraph (i), promptly register, file, record or enrol any Leasing Document to which such Obligor is a party with any court or
authority in all relevant jurisdictions, pay any stamp duty, registration or similar tax in all relevant jurisdictions in respect of any Leasing Document to which such
Obligor is a party, give any notice or take any other step which, is or has become necessary or desirable for any such Leasing Document to be valid, enforceable or
admissible in evidence or to ensure or protect the priority of any Security Interest which such Obligor creates;
30
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

(h)
they will notify the Owners as soon as they become aware of the occurrence of any of the following events:
 
(i)
any default by any Approved Sub-charterer, the Approved Manager, the SBC Sellers or the Charterers of the terms of any Transaction Document;
 
(ii)
an event of default or termination event howsoever called under the terms of any Transaction Document entitling either (x) the Charterers to terminate such Transaction
Document or (y) the relevant Approved Sub-charterer to terminate any Approved Sub-charter which has not been unconditionally waived by such Approved Sub-
charterer;
 
(iii)
any damage caused to the Vessel by any reason whatsoever which results, or may be expected to result, in repairs on the Vessel which exceed US$500,000;
 
(iv)
any safety incidents taking place on board the Vessel which has or is likely to have a Material Adverse Effect;
 
(v)
any casualty or occurrence as a result of which the Vessel has become a Major Casualty or a Total Loss, or is, by the passing of time or otherwise, likely to become, a
Total Loss;
 
(vi)
any Environmental Claim of a value which exceed US$500,000 which is made against the Charterers, Approved Sub-charterer or any Approved Manager in connection
with the Vessel or any Environmental Incident;
 
(vii)
any arrest or detention of the Vessel, any exercise or purported exercise of any lien on that Vessel or its Earnings or any requisition of that Vessel for hire; and
 
(viii)
any modification or alteration of the Vessel of a value which exceed US$500,000,
 
and will keep the Owners fully up-to-date with all developments and the Charterers will, if so requested by the Owners, provide any such certificate signed by its officer(s),
confirming that there exists no Potential Termination Event or Termination Event;
 
(i)
they will, and will procure that each other Obligor will, provide the Owners with:
 
(i)
as soon as practicable after receiving the request by the Owner, any additional financial or other information relating to themselves and/or the Vessel (including, but
not limited to the condition and location of the Vessel and any other information relating to Anti-Money Laundering Laws, any “know your customer” or other
regulatory checks required to be carried out by the Owners);
 
(ii)
as soon as practicable after receiving the request by the Owner, any additional financial or other information relating to any other matter relevant to, or to any provision
of any Leasing Document to which it is a party, including, without limitation, annual operating budgets and forecasts; and
 
(iii)
at least half-yearly throughout the Charter Period or upon the reasonable request by the Owners, details of the employment, management and pooling arrangement of
the Vessel.
 
(j)
comply, or procure compliance, and will procure that each other Obligor will comply or procure compliance, with all laws or regulations relating to the Vessel and its
construction, ownership, employment, operation, management and registration, including the ISM Code, the ISPS Code, all Environmental Laws and the laws of the Vessel’s
registry provided that any non-compliance shall not materially adversely affect the obligations of an Obligor under each Leasing Document to which it is a party, and will obtain,
comply with and do that is necessary to maintain in full force and effect all applicable Environmental Approvals;
 
31
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

(k)
subject to Clause 10(d) of this Charter, the Vessel shall be registered under the Flag State;
 
(l)
from and including the Delivery Date for the duration of the Charter Period, the Vessel maintains the highest standards required for the purpose of the relevant trade of the
Vessel and classed with the Vessel’s Classification Society, free from any overdue recommendations or qualifications affecting that the Vessel’s class.
 
(m)
upon request, they will provide or they will procure to be provided to the Owners the report(s) of the survey(s) conducted pursuant to Clause 7 of this Charter in form and
substance satisfactory to the Owners;
 
(n)
they shall not, and shall procure that no other Obligor will, enter into any form of merger, demerger, sub-division, amalgamation or other reorganization, consolidation, corporate
reconstruction or change of ownership;
 
(o)
with the exception of the Initial Sub-charter, they shall not permit the sub-chartering of the Vessel:
 
(i)
on a bareboat charter/demise charter basis unless otherwise permitted by the Owner and subject to Clause 46.1(p) below; or
 
(ii)
on a time charter basis exceeding twelve (12) months (taking into account any optional extensions thereto), other than under an Approved Sub-charter and provided
that as a condition precedent to the execution of any such Approved Sub- charter, the Charterers:
 
(A)
obtain the Owners prior written consent (such consent shall not be unreasonably withheld or delayed) of such Approved Sub-Charter and provide the
Owners with detailed information about the intended Approved Sub-Charterer and proposed terms of the Approved Sub-Charter and any further information
which the Owners may reasonably request; and
 
(B)
upon the execution of such Approved Sub-charter, assign all their rights and interests under such Approved Sub-charter in a manner acceptable to the
Owners, acting reasonably and shall use their best endeavours to procure that the relevant Approved Sub-charterer gives a written acknowledgment of such
assignment provided if the relevant Approved Sub-charter contains any assignment restriction, then the Charterers shall procure that the relevant Approved
Sub-charterer gives a written acknowledgment of such assignment to the Owners, in each case, in form and substance acceptable to the Owners and within
the time period provided for in the General Assignment;
 
(p)
in the case of any bareboat charter or demise charter of the Vessel, they shall obtain the Owners’ written consent prior to such bareboat charter or demise charter (as the case
may be) being entered into, and shall assign such charter to the Owners and procure that the relevant sub-charterer to such demise charter enters into an agreement for the
assignment of its rights and interests in the Earnings, Insurances and Requisition Compensation of the Vessel to the Owners in form and substance acceptable to the Owners;
 
(q)
they shall not declare, make or pay, any dividend or other distribution (or interest on any unpaid dividend or other distribution) (whether in cash or in kind) on or in respect of
its authorised and issued shares (including any class of its share) following the occurrence of a Termination Event which is continuing or which would result in a Termination
Event;
32
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

(r)
they shall comply and shall procure that each of the other Obligors complies with all laws and regulations in respect of Sanctions, and in particular, they shall and shall procure
that each of the other Obligors implement and maintain in effect policies and procedures designed to promote and ensure compliance by them and their respective directors,
officers and employees with Sanctions laws and regulations implemented from time to time;
 
(s)
without limiting Clause 46.1(r), they will procure that:
 
(i)
the Vessel shall not be operated, employed, managed, used by or for the benefit of a Restricted Person;
 
(ii)
the Vessel shall not be employed in trading with any Restricted Person or in any manner contrary to Sanctions or published boycotts imposed by any of the United
Nations, the European Union, the United States of America, the United Kingdom or the People’s Republic of China;
 
(iii)
notwithstanding any other provision of this Charter, the Vessel shall not be permitted to call at any port in any Restricted Country or any area or country where trading
in such area or country would constitute or would be reasonably expected to constitute a breach of Sanctions;
 
(iv)
the Vessel shall not be traded in any manner which would trigger the operation of any sanctions limitation or exclusion clause (or similar) in the Insurances or in any
manner which would result in any Obligor or any Sub-charterer or the Owners becoming a Restricted Person; and
 
(v)
that each charterparty in respect of the Vessel shall contain, for the benefit of the Owners, language which gives effect to the provisions of this Clause and which
permits refusal of employment or voyage orders if compliance would result in a breach of Sanctions and which prohibits trading to any Restricted Country;
 
(t)
they shall and shall procure that each other Obligor shall:
 
(i)
comply with all Anti-Money Laundering Laws, Anti-Terrorism Financing Laws and Business Ethics Laws; and
 
(ii)
maintain systems, controls, policies and procedures designed to promote and ensure ongoing compliance by them and their respective directors, officers and
employees with Anti-Money Laundering Laws, Anti-Terrorism Financing Laws and Business Ethics Laws; and
 
(u)
they shall use their best endeavours to procure that any Sub-charterer complies with all Anti- Money Laundering Laws, Anti-Terrorism Financing Laws and Business Ethics
Laws;
 
(v)
they shall not use, or permit or authorise any person to directly or indirectly use, the Purchase Price or lend, invest, contribute or otherwise make available the Purchase Price to
or for any other person for any purpose or otherwise in a manner which would result in a violation of Anti-Money Laundering Laws, Anti-Terrorism Financing Laws or Business
Ethics Laws;
 
(w)
they shall, and shall procure that each other Obligor, promptly notify the Owners in writing immediately upon being aware of any non-compliance, by any of their respective
officers, directors, employees, consultants, agents or intermediaries with any laws and regulations relating to Sanctions, Anti-Money Laundering Laws, Anti-Terrorism
Financing Laws and/or Business Ethics Laws, whereupon they shall, and shall procure that each other Obligor take all necessary steps to dismiss and remove such officer,
director, employee, consultant, agent or intermediary with immediate effect;
 
(x)
in respect of the management of the Vessel:
33
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

(i)
they shall ensure that the Vessel be commercially and/or technically managed under an Approved Management Agreement and in accordance with:
 
(A)
the relevant regulations, requirements and recommendations of the Classification Society;
 
(B)
the relevant regulations, requirements and recommendations of the Flag State;
 
(C)
any applicable IMO regulations (including but not limited to the ISM Code, the ISPS Code and MARPOL);
 
(D)
all other applicable regulations, requirements and recommendations;
 
(E)
the Charterers’ and the Approved Managers’ operations and maintenance manuals;
 
(F)
engine manufacturers’ recommended maintenance and service schedules;
 
(G)
builder’s operations and maintenance manuals; and
 
(H)
recommended maintenance and service schedules of all installed equipment and pipework; and
 
(ii)
they shall not appoint or permit to be appointed any commercial and/or technical manager of the Vessel unless it is an Approved Manager appointed on terms
acceptable to the Owners and the Owners’ Financier (if any) and the Approved Manager has (within ten (10) days upon entering into the relevant Approved
Management Agreement) entered into a Manager’s Undertaking;
 
(y)
save with the prior written consent of the Owners, they shall not, and shall procure that they shall not agree or enter into any transaction, arrangement, document or do or omit
to do anything which will have the effect of varying, amending or supplementing the terms of any Transaction Document;
 
(z)
they shall ensure that all Earnings and any other amounts received by them in connection with the Vessel are paid into the Operating Account and the Owners shall have access
to any information in relation to the Operating Account;
 
(aa)
they shall not enter into any other investments, any sale or leaseback agreements, any off- balance sheet transaction or incur any other liability or obligation (including without
limitation, any Financial Indebtedness of any obligations under a guarantee) except:
 
(i)
liabilities and obligations under the Leasing Documents to which it is or, as the case may be, will be a party; or
 
(ii)
liabilities or obligations reasonably incurred in the normal course of its business of trading, operating and chartering, maintaining and repairing the Vessel;
 
(bb)
any transaction entered into with their Affiliates shall be on arm’s length basis and in good faith;
 
(cc)
they will ensure and procure that:
 
(i)
the Market Value of the Vessel shall be ascertained at the expenses of the Charterers from time to time in the following circumstances:
34
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

 
(aa)
upon the occurrence of a Termination Event which is continuing, at any time at the request of the Owners; and
 
 
(bb)
in the absence of Termination Event at least once every calendar year during the Charter Period, with such report to be dated no more than thirty (30) calendar
days prior to every anniversary of the Delivery Date occurring within the Charter Period or on such other date as the Owners may request; and
 
(ii)
the Charterers shall pay the Owners the amount of the fees and expenses incurred by the Owners in connection with any matter arising out of this paragraph (cc)
provided that subject to no Termination Event has occurred and is continuing, the Charterers shall bear the cost of no more than one (1) valuation report each calendar
year;
 
(dd)
they shall ensure that no Financial Indebtedness shall at any time be due and owing by the Charterers, unless fully subordinated to the rights of the Owners under the Leasing
Documents in a manner satisfactory to the Owners (in their sole discretion);
 
(ee)
in respect of an Approved Sub-charter which contains an option to extend the charter period, they shall notify the Owners as soon as they become aware that the relevant
Approved Sub- charterer does not intend to, or has not by the date falling thirty (30) days prior to the date on which such Approved Sub-charter will expire, exercise the
relevant option to extend the same;
 
(ff)
except with the Owners’ prior written consent, they shall not deactivate or lay up the Vessel;
 
(gg)
they will not:
 
(i)
enter into any borrowing except for loans or advances from other members of the Group which are unsecured and fully subordinated to the rights of the Owners under
the Leasing Documents in a manner acceptable to the Owners;
 
(ii)
give or allow any to be outstanding, any guarantee or indemnity to or for the benefit of any person in respect of any obligation of any other person or enter into any
document under which they assume any liability of any other person other than:
 
(A)
any guarantee or indemnity given or expressly allowed under the terms of the Leasing Documents (including Clause 37.3); or
 
(B)
any guarantee or indemnity given in the ordinary course of business and maintaining and operating the Vessel of an amount not exceeding US$1,500,000
provided that, if the amount of such guarantee or indemnity shall exceed US$1,500,000, the Charterers shall request prior approval from the Owners
(which shall not be unreasonably withheld or delayed);
 
(iii)
enter into any material agreement other than the Leasing Documents or any other agreement in the ordinary course of business of maintaining and operating the Vessel
to the extent otherwise permitted under the terms of the Leasing Documents;
 
(iv)
enter into a single transaction or a series of transactions (whether related or not) and whether voluntary or involuntary to sell, lease, transfer or otherwise dispose of
any asset (including without limitation the Vessel, its Earnings or its Insurances);
 
(v)
without prejudice to the above sub-paragraphs (i) to (iv), enter into any transaction (whether with their Affiliate or otherwise) which are, in any respect, less favourable
than those which they could obtain in a bargain made at arms’ length;
 
(hh)
they will ensure that the Purchase Price will be utilised solely for working capital of the Group and enabling the Group to finance the purchase of the Vessel; and
35
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

(ii)
the Vessel will not be permitted to trade in any zone which is declared a war zone by any government or the Vessel’s war risks insurers, unless the Charterers have (i) obtained
the written consent of the Owners prior to engaging in any such trading and (ii) (at the Charterers’ expense) effected all necessary special, additional or modified insurance
cover for trading in such war zone and have complied with the terms of Clause 38 (Insurance) any requirement as may be prescribed by the insurers;
 
(jj)
the Charterers shall comply, and will procure that each other Obligor (other than any Third Party Manager) and use their best endeavours to procure any Sub-charterer and any
Third Party Manager will comply with all Sanctions and all laws and regulations relating to it, the Vessel and the construction, ownership, employment, operation, management
and registration of the Vessel , including the ISM Code, the ISPS Code (including, but not limited to, the maintenance of an ISSC), all Environmental Laws, all Anti-Money
Laundering Laws, Business Ethics Laws and the laws of the Vessel’s registry, and in particular, they shall effect and maintain a sanctions compliance policy which, inter alia,
implements the recommendations of the Sanctions Advisory, to ensure compliance with all such laws and regulations implemented from time to time, including, without
limitation, they will, and will procure that each other Obligor and will procure each Sub-charterer will:
 
(i)
conduct their activities in a manner consistent with Sanctions;
 
(ii)
have sufficient resources in place to ensure execution of and compliance with their own Sanctions policies by their personnel, e.g., direct hires, contractors, and staff;
 
(iii)
ensure subsidiaries and Affiliates comply with the relevant policies, as applicable;
 
(iv)
have relevant controls in place to monitor automatic identification system (AIS) transponders;
 
(v)
have controls in place to screen and assess onboarding or offloading cargo in areas they determine to present a high risk;
 
(vi)
have controls to assess authenticity of bills of lading, as necessary; and
 
(vii)
have controls in place consistent with the Sanctions Advisory; and
 
(kk)
 
(i)
The Charterers undertake that it will at all times comply, and require compliance by:
 
(A)
all Sub-charterers of the Vessel; and
 
(B)
all parties (each a “Counterparty”) with whom the Charterers or a Sub- charterer enters into a contract of carriage in respect of the Vessel,
 
with the Russian Oil Price Cap Measures.
 
(ii)
Without prejudice to the generality of paragraph (i) above, the Charterers undertake that it will prior to the Vessel first commencing lifting or loading of Russian Oil
Products for a Qualifying Voyage or the effective date of the contract between the Charterers and their applicable Counterparty (whichever is earlier) and, for each
Qualifying Voyage throughout the duration of that contract, prior to lifting or loading of Russian Oil Products obtain:
 
(A)
price information demonstrating that the Russian Oil Products were purchased at or below the applicable price cap; or
36
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

(B)
a signed attestation from its applicable Counterparty that the Russian Oil Products were purchased at or below the applicable price cap; or
 
(C)
documentary evidence that the purchase of the Russian Oil Products was pursuant to a licence or an exception granted by the relevant authority in each
applicable jurisdiction.
 
(iii)
In addition to the general undertaking at paragraph (i) above, the Charterers shall promptly, and in any event no later than 30 days after the Vessel commencing lifting
or loading for each Qualifying Voyage provide to the Owners such of the following as the Owners shall specify:
 
(A)
price information demonstrating that the Russian Oil Products were purchased at or below the applicable price cap; and/or
 
(B)
an attestation signed by an authorised signatory in such form as may be agreed by the Owners confirming that the Charterers have complied in all respects
with the Russian Oil Price Cap Measures; and/or
 
(C)
documentary evidence that the purchase of the Russian Oil Products was pursuant to a licence or an exception granted by the relevant authority in each
applicable jurisdiction.
 
(iv)
Without prejudice to the generality of paragraph (i) above, the Charterers undertake to the Owners that it will ensure that any Sub-charter or other contract of carriage
in respect of the Vessel will include for the benefit of the Charterers provisions requiring the Sub-charterer or person to whom the Charterers have sub-let the Vessel or
with whom it has entered into a contract of carriage to comply with the Russian Oil Price Cap Measures and to provide such information and documentation at such
times as is necessary for the Charterers to comply with this Clause 46.1(kk).
 
(v)
The Charterers undertake that they will:
 
(A)
provide the Owners with such information, and at such times, as it may require for the purposes of the Owners satisfying any record keeping obligations
applicable to it or an Affiliate under the Russian Oil Price Cap Measures;
 
(B)
promptly upon request and within 30 days of any request provide the Owners with such other information in relation to compliance with the Russian Oil Price
Cap Measures as the Owners may from time to time reasonably request including without limitation any information relating to ancillary costs as may be
specified from time to time pursuant to the Russian Oil Price Cap Measures.
 
The obligations in this paragraph (v) are continuing and, in particular, shall survive and remain binding on the Charterers until all attestations and such other
information as may be requested pursuant to this paragraph (v) have been received in satisfactory form by the Owners.
 
(vi)
The Charterers shall undertake appropriate due diligence on its counterparties to satisfy itself, based on the information available, of the reliability and accuracy of any
information provided by such counterparties for the purposes of or relating to satisfying the requirements of paragraph (ii) above.
 
(vii)
The Charterers agree that the Owners may forward all attestations and other documents which the Charterers may from time to time deliver to the Owners pursuant to
paragraphs (iii) and (v) above to any applicable regulators or to any other party to which the Owners may be required to forward or disclose such attestations or other
documents in accordance with the Russian Oil Price Cap Measures.
 
37
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

(viii)
The Charterers acknowledge and agrees that the Owners may request any attestations, other documents and information pursuant to this Clause 46.1(kk) and disclose
the same to enable an Affiliate of the Owners to satisfy any requirement of the Russian Oil Price Measures.
 
CLAUSE 46A – INSPECTION OF VESSEL
 
46A.1
The Owners shall have the right to, at the costs and fees of the Charterers, request an inspection report in respect of the Vessel issued by a surveyor approved by the Owners
annually or inspect or survey the Vessel or instruct a duly authorized surveyor to carry out such survey on their behalf:
 
(a)
to, up to once every calendar year (subject to provision of reasonable advance notices and without undue disruption or delay to the operation and safety of the Vessel)
ascertain the condition of the Vessel and satisfy themselves that the Vessel is being properly repaired and maintained; and
 
(b)
in dry-dock if the Charterers have not dry-docked the Vessel in accordance with Clause 10(g).
 
46A.2
The Owners shall have the right to, at the costs and fees of the Charterers, inspect or survey the Vessel or instruct a duly authorized surveyor to carry out such survey on their
behalf at any time following the occurrence of a Potential Termination Event or Termination Event.
 
46A.3
All time used in respect of inspection, survey or repairs shall be for the Charterers’ account and form part of the Charter Period.
 
46A.4
The Charterers shall also permit the Owners to inspect the Vessel’s log books whenever requested and shall whenever required by the Owners furnish them with full information
regarding any casualties or other accidents or damage to the Vessel.
 
CLAUSE 47     – PURCHASE OPTION
 
47.1
If the Charterers have not exercised their Purchase Option under Clause 36.14(ii)(ii), the Charterers shall have the option to purchase the Vessel on the applicable Purchase
Option Date at the applicable Purchase Option Price, subject always to giving the Owners no less than three (3) months’ prior written notice and provided that at the date of
such prior notice and such Purchase Option Date no Termination Event has occurred which is continuing.
 
47.2
A Purchase Option Notice shall be signed by a duly authorised officer or attorney of the Charterers and, once delivered to the Owners, is irrevocable and the Charterers shall be
bound to pay to the Owners the applicable Purchase Option Price on the applicable Purchase Option Date.
 
47.3
Only one Purchase Option Notice may be served throughout the duration of the Charter Period.
 
47.4
Upon the Owners’ receipt in full of the applicable Purchase Option Price, the Owners shall transfer the legal and beneficial ownership of the Vessel on an “as is where is” basis
(and otherwise in accordance with the terms and conditions set out at Clause 49 (Sale of the Vessel)) to the Charterers or their nominee approved by the Owners and shall
execute a bill of sale, duly notarised and legalised at the cost of the Charterers, and a protocol of delivery and acceptance, and, at the cost and upon request of the Charterers,
provide a certificate of ownership and encumbrance showing the Vessel is free from registered encumbrance created by the Owners issued by the Flag State and any other
document strictly necessary to transfer the title of the Vessel to the Charterers (and to the extent required for such purposes the Vessel shall be deemed first to have been
redelivered to the Owners).
38
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

CLAUSE 48      – PURCHASE OBLIGATION
 
48.1
Subject to the other provisions of this Charter, in consideration of the Owners entering into this Charter, provided all moneys owing and payable under this Charter have been
fully and irrevocably paid to the Owners, the Charterers shall on the Maturity Date, be obliged to purchase from the Owners all of the Owners’ beneficial and legal right, title and
interest in the Vessel and all belonging to her and the Owners and the Charterers shall perform their obligations referred to in Clause 49 (Sale of the Vessel) and the Charterers
shall pay the Purchase Obligation Price on the Hire Payment Date of the final instalment of Charterhire payable under Clause 36.2 (together with the final instalment of
Charterhire payable under Clause 36.2) (unless the Owners agree otherwise in writing and upon such terms and conditions as the Owners may deem fit in their absolute
discretion).
 
CLAUSE 49      – SALE OF THE VESSEL
 
49.1
All legal and beneficial interest and title in the Vessel shall be transferred to the Charterers by the Owners upon receipt by the Owners of the applicable Purchase Option Price,
Purchase Obligation Price or the Termination Purchase Price (as the case may be) or the completion of the Mandatory Sale under Clause 44A (Mandatory Sale) on an “as is
where is” basis and on the following terms and conditions:
 
(a)
the Charterers expressly agree and acknowledge that no condition, warranty or representation of any kind is or has been given by or on behalf of the Owners in respect of the
Vessel or any part thereof, and accordingly the Charterers confirm that they have not, in entering into this Charter, relied on any condition, warranty or representation by the
Owners or any person on the Owners’ behalf, express or implied, whether arising by law or otherwise in relation to the Vessel or any part thereof, including, without limitation,
warranties or representations as to the description, suitability, quality, merchantability, fitness for any purpose, value, state, condition, appearance, safety, durability, design or
operation of any kind or nature of the Vessel or any part thereof, and the benefit of any such condition, warranty or representation by the Owners is hereby irrevocably and
unconditionally waived by the Charterers to the extent permissible under applicable law, the Charterers hereby also waive any rights which they may have in tort in respect of
any of the matters referred to under this Clause and irrevocably agree that (i) the Owners shall have no greater liability in tort in respect of any such matter than they would
have in contract after taking account of all of the foregoing exclusions; (ii) no third party making any representation or warranty relating to the Vessel or any part thereof is the
agent of the Owners nor has any such third party authority to bind the Owners thereby and (iii) notwithstanding anything contained above, nothing contained herein is
intended to obviate, remove or waive any rights or warranties or other claims relating thereto which the Charterers (or their nominee acceptable to the Owners) or the Owners
may have against the manufacturer or supplier of the Vessel or any third party;
 
(b)
the Vessel shall be free from any registered mortgages or any other liens, encumbrances or debts created or permitted to exist by the Owners (save for those mortgages, liens,
encumbrances or debts created under the Leasing Documents whether by the Owners and/or the Charterers);
 
(c)
the applicable Purchase Option Price or the Purchase Obligation Price or the Termination Purchase Price or the Mandatory Sale Price (as the case may be) shall be paid by the
Charterers to the Owners on respectively the applicable Purchase Option Date or the Maturity Date or the Termination Notice Date or the Mandatory Sale Date, together with
unpaid amounts of Charterhire and other moneys owing by or accrued or due from the Charterers under this Charter on or prior to the applicable Purchase Option Date or the
Maturity Date or the Termination Notice Date or the Mandatory Sale Date (as the case may be) which remain unpaid; and
39
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

(d)
upon the applicable Purchase Option Price or the Purchase Obligation Price or the Termination Purchase Price or the Mandatory Sale Price (as the case may be) and all other
moneys payable under this Charter being fully and irrevocably paid to the Owners on, and in accordance with, the terms set forth in this Charter (except in the case of Total
Loss) the Owners agree (at the cost of the Charterers) to enter into (i) a bill of sale, (ii) a protocol of delivery and acceptance and (iii) any other document strictly necessary to
transfer the title of the Vessel to the Charterers, and the Vessel shall accordingly be deemed delivered to the Charterers on the date and time set out in such protocol of delivery
and acceptance (and to the extent required for such purposes the Vessel shall be deemed first to have been redelivered to the Owners). For the avoidance of doubt, all the fees
and expenses (including, without limitation, legal fees) incurred by the Owners in connection with the transfer pursuant to this Clause 49 shall be borne by the Charterers.
 
CLAUSE 50      – INDEMNITIES
 
50.1
The Charterers shall upon the Owners’ demand, fully indemnify, and keep indemnified and paid to the Owners any such amounts in respect of all claims, expenses, liabilities,
losses, taxes, fees (including, but not limited to, any tax applied to any such amounts, any interest or penalties applied to such amounts and any vessel registration and tonnage
fees) suffered or incurred by or imposed on the Owners arising from this Charter and any Leasing Document, whether prior to, during or after termination of this Charter and
whether or not the Vessel is in the possession or the control of the Charterers, including, without limitation:
 
(a)
as a result of incorporating the Owners in the relevant jurisdiction selected by the Charterers or required for the purpose of flying the flag of the Vessel in a particular
jurisdiction;
 
(b)
in connection with delivery, possession, performance, control, registration, repair, survey, insurance, maintenance, manufacture, purchase, financing, re-financing, ownership
and operation of the Vessel by the Owners;
 
(c)
in connection with the prevention or release of liens or detention of or requisition, use, operation or redelivery, sale or disposal of the Vessel or any part of it;
 
(d)
in connection with putting the Vessel in a re-deliverable condition in accordance with this Charter;
 
(e)
as a consequence of any non-compliance or breach by any Obligor of any applicable tax laws or regulations or any losses caused to the Owners by any failure of the Charterers
to comply with their obligations under Clause 51 (No Set-off or Tax Deduction) of this Charter (including where any such failure is occasioned by the applicable law preventing
the Charterers from paying without deduction and/or from grossing up);
 
(f)
all premia and other expenses which are incurred by (i) the Owners in connection with or with a view to effecting, maintaining or renewing lessors’ or innocent owners’ interest
insurance and lessors’ or innocent owners’ additional perils (pollution) insurance or any similar protective shipowner insurance that is taken out in respect of the Vessel on such
terms and conditions as the Owners may from time to time impose, and/or (ii) the Owners or the Owners’ Financier (if any) in connection with or with a view to effecting,
maintaining or renewing a mortgagee’s interest insurance and a mortgagee’s additional perils (pollution) insurance that is taken out in respect of the Vessel on such terms and
conditions as the Owners or the Owners’ Financier (if any) may from time to time impose. In each case, the amount of the insurances referred to in this clause shall be equal to at
least one hundred and twenty per cent (120%) of the Outstanding Principal at the relevant time;
 
(g)
all premia and expenses incurred by the Owners and/or the Owners’ Financier (if any) in respect of any other insurances which the Owners and/or the Owners’ Financier (if any)
deem necessary and take out in respect of the Vessel, including, but without limitation to, any freight, demurrage and defence cover on such terms and conditions as the Owners
may from time to time effect pursuant to Clause 38 (Insurance);
40
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

(h)
all other premia and expenses incurred by the Owners and/or the Owners’ Financier (if any) in respect of the Insurances of the Vessel pursuant to Clause 38 (Insurance);
 
(i)
all loss or damage to the Vessel (insofar as the Owners shall not be reimbursed by the proceeds of any insurance in respect thereof) however caused occurring at any time or
times before physical possession thereof is retaken by the Owners, reasonable wear and tear to the Vessel only excepted;
 
(j)
all losses, costs or charges incurred by the Owners by reason thereof in re-taking possession or otherwise in re-acquiring the Vessel pursuant to Clause 37 (Possession of
Vessel);
 
(k)
all losses, costs, charges and expenses incurred by the Owners in collecting any Charterhire or other payments not paid on the due date under this Charter and in remedying
any other failure of the Charterers to observe the terms and conditions of this Charter;
 
(l)
all losses, reasonable costs and expenses incurred by the Owners as a result of steps taken by the Owners under Clause 44A (Inspection of Vessel);
 
(m)
all losses, costs and expenses incurred by the Owners in connection with any proposed modifications, repairs, replacement, installation or alteration of the Vessel pursuant to
the terms of this Charter;
 
(n)
any such losses, liabilities, costs or expenses the Owners determine will be or has been (directly or indirectly) suffered for or on account of any tax by them in respect of any
Leasing Document, together with any interest, penalties, costs and expenses payable or incurred;
 
(o)
in connection with or following the occurrence of a Termination Event or a Potential Termination Event or any breach of any terms of any Leasing Document; and
 
(p)
all costs and expenses (including legal fees) incurred by the Owners in connection with the enforcement of, or the preservation of any rights under, any Leasing Document or
any Security Interest created thereunder and with any proceedings instituted by or against the Owners as a consequence of entering into any Leasing Document, taking or
holding any Security Interests created thereunder or enforcing those rights, including, without limitation, any losses, costs and expenses which the Owners may from time to
time sustain, incur or become liable by reason of the Owners being the registered owner of the Vessel and/or being deemed by any court or authority to be an operator or
controller, or in any way concerned in the operation or control, of a Vessel.
 
Without prejudice to its generality, this Clause covers any claims, expenses, liabilities and losses which arise, or are asserted, under or in connection with any law relating to
safety at sea, the ISM Code, the ISPS Code, the MARPOL Protocol, any Environmental Law or any Sanctions or in connection with any Environmental Claim.
 
50.2
Without prejudice to the above Clause 50.1, if any sum (a “Sum”) due from an Obligor under the Leasing Documents, or any order, judgment or award given or made in relation
to a Sum, has to be converted from the currency (the “First Currency”) in which that Sum is payable into another currency (the “Second Currency”) for the purpose of:
 
(a)
making or filing a claim or proof against that Obligor; or
 
(b)
obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings,
41
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

the Charterers shall, as an independent obligation, on demand, indemnify the Owners against any cost, loss or liability arising out of or as a result of the conversion including
any discrepancy between (A) the rate of exchange used to convert that Sum from the First Currency into the Second Currency and (B) the rate or rates of exchange available to
that person at the time of its receipt of that Sum.
 
50.3
The obligations of the Charterers under Clause 50 and in respect of any Security Interest created pursuant to the Security Documents will not be affected or discharged by an
act, omission, matter or thing which would reduce, release or prejudice any of its obligations under Clause 50 or in respect of any Security Interest created pursuant to the
Security Documents (without limitation and whether or not known to it or any Obligor) including:
 
(a)
any time, waiver or consent granted to, or composition with, any Obligor or other person;
 
(b)
the release of any other Obligor or any other person under the terms of any composition or arrangement with any creditor of the Obligor or any of its affiliates;
 
(c)
the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect or delay in perfecting, or refusal or neglect to take up or enforce, or delay in
taking or enforcing any rights against, or security over assets of, any Obligor or other person or any non-presentation or non-observance of any formality or other requirement
in respect of any instrument or any failure to realise the full value of any security;
 
(d)
any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of an Obligor or any other person;
 
(e)
any amendment, novation, supplement, extension, restatement (however fundamental and whether or not more onerous) or replacement of any Leasing Document or any other
document or security;
 
(f)
any unenforceability, illegality or invalidity of any obligation of any person under any Security Document or any other document or security; or
 
(g)
any insolvency or similar proceedings.
 
50.4
Notwithstanding anything to the contrary herein (but subject and without prejudice to Clause 33 (Cancellation)) and without prejudice to any right to damages or other claim
which the Charterers may have at any time against the Owners under this Charter, the indemnities provided by the Charterers in favour of the Owners shall continue in full force
and effect notwithstanding any breach of the terms of this Charter or termination of this Charter pursuant to the terms hereof or termination of this Charter by the Owners.
 
50.5
All rights which the Charterers have at any time (whether in respect of this Charter or any other transaction) against the other Obligor or any of them shall be fully subordinated
to the rights of the Owners under the Leasing Documents and until the end of this Charter and unless the Owners otherwise direct, the Charterers shall not exercise any rights
which it may have (whether in respect of this Charter or any other transaction) by reason of performance by it of its obligations under the Leasing Documents or by reason of
any amount becoming payable, or liability arising, under this Clause:
 
(a)
to be indemnified by the Guarantor;
 
(b)
to claim any contribution from any third party providing security for, or any other guarantor of, or the Guarantor’s obligations under the Leasing Documents;
 
(c)
to take any benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Guarantor under the Leasing Documents or of any other guarantee
or security taken pursuant to, or in connection with, the Leasing Documents by any of the aforesaid parties;
42
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

(d)
to bring legal or other proceedings for an order requiring the Guarantor to make any payment, or perform any obligation, in respect of any Leasing Document;
 
(e)
to exercise any right of set-off against the Guarantor; and/or
 
(f)
to claim or prove as a creditor of the Guarantor,
 
and if the Charterers receive any benefit, payment or distribution in relation to such rights it shall hold that benefit, payment or distribution to the extent necessary to enable all
amounts which may be or become payable to the Owners by the Guarantor under or in connection with the Leasing Documents to be repaid in full on trust for the Owners and
shall promptly pay or transfer the same to the Owners as may be directed by the Owners.
 
50.6
The Charterers hereby irrevocably agree to indemnify and hold harmless the Owners against any claim, expense, liability or loss incurred by the Owners (and which is notified to
the Charterers) in liquidating or employing deposits from the Owners’ Financier or third parties to fund the acquisition of the Vessel pursuant to the MOA, on or prior to the
Delivery Date.
 
50.7
Notwithstanding anything to the contrary herein (but subject and without prejudice to Clause 33 (Cancellation)) and without prejudice to any right to damages or other claim
which the Charterers may have at any time against the Owners under this Charter, the indemnities provided by the Charterers in favour of the Owners shall continue in full force
and effect notwithstanding any breach of the terms of this Charter or termination of this Charter pursuant to the terms hereof or termination of this Charter by the Owners.
 
CLAUSE 51      – NO SET-OFF OR TAX DEDUCTION
 
51.1
All payments of the Charterhire, the Purchase Obligation Price, the applicable Purchase Option Price, the Termination Purchase Price or and any other payment made from the
Charterers to enable the Owners to pay all amounts under a Leasing Document shall be paid punctually:
 
(a)
without any form of set-off, cross-claim, condition or counterclaim; and
 
(b)
free and clear of any tax deduction or withholding unless required by law.
 
51.2
Without prejudice to Clause 51.1, if the Charterers are required by law to make a tax deduction from any payment:
 
(a)
the Charterers shall notify the Owners as soon as they become aware of the requirement; and
 
(b)
the amount due in respect of the payment shall be increased by the amount necessary to ensure that the Owners receive and retain (free from any liability relating to the tax
deduction) a net amount which, after the tax deduction, is equal to the full amount which they would otherwise have received.
 
51.3
In this Clause “tax deduction” means any deduction or withholding for or on account of any present or future tax, other than a FATCA Deduction.
 
CLAUSE 52      – INCREASED COSTS
 
52.1
This Clause 52 applies if the Owners notify the Charterers that they consider (acting in good faith) that as a result of:
 
(a)
the introduction or alteration after the date of this Charter of a law or an alteration after the date of this Charter in the manner in which a law is interpreted or applied
(disregarding any effect which relates to the application to payments under this Charter of a tax on the Owners’ overall net income); or
43
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

(b)
complying with any regulation (including any which relates to capital adequacy or liquidity controls or which affects the manner in which the Owners allocates capital resources
to their obligations under this Charter) which is introduced, or altered, or the interpretation or application of which is altered, after the date of this Charter,
 
the Owners (or a parent company of them) or the Owners’ Financier has incurred or will incur an “increased cost”.
 
52.2
In this Clause 52, “increased cost” means, in relation to the Owners or the Owners’ Financier:
 
(a)
an additional or increased cost incurred as a result of, or in connection with, as the case may be, (i) the Owners having entered into, or being a party to, this Charter, of funding
the acquisition of the Vessel pursuant to the MOA or performing their obligations under this Charter or (ii) the Owner’s Financier entering into the funding arrangements
described under Clause 57.2(a);
 
(b)
a reduction in the amount of any payment to the Owners under this Charter or in the effective return which such a payment represents to the Owners on their capital;
 
(c)
an additional or increased cost of funding the acquisition of the Vessel pursuant to the MOA; or
 
(d)
a liability to make a payment, or a return foregone, which is calculated by reference to any amounts received or receivable by the Owners under this Charter,
 
and for the purposes of this Clause 52.2 the Owners may in good faith allocate or spread costs and/or losses among their assets and liabilities (or any class of their assets and
liabilities) on such basis as they consider appropriate.
 
52.3
Subject to the terms of Clause 52.1, the Charterers shall pay to the Owners, on the Owners’ demand, the amounts which the Owners from time to time notify the Charterers to be
necessary to compensate the Owners for the increased cost.
 
CLAUSE 53      – FATCA
 
53.1
Defined terms. For the purposes of this Clause 53, the following terms shall have the following meanings:
 
“Code” means the United States Internal Revenue Code of 1986, as amended.
“FATCA” means:
 
(a)
sections 1471 to 1474 of the Code or any associated regulations;
 
(b)
any treaty, law or regulation of any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction, which (in either case) facilitates
the implementation of any law or regulation referred to in paragraph (a) above; or
 
(c)
any agreement pursuant to the implementation of any treaty, law or regulation referred to in paragraphs (a) or (b) above with the IRS, the US government or any governmental or
taxation authority in any other jurisdiction.
44
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

“FATCA Deduction” means a deduction or withholding from a payment under this Charter or the Leasing Documents required by or under FATCA.
 
“FATCA Exempt Party” means a Relevant Party that is entitled under FATCA to receive payments free from any FATCA Deduction.
 
“Relevant Party” means any of the parties to this Charter and the Leasing Documents.
 
“IRS” means the United States Internal Revenue Service or any successor taxing authority or agency of the United States government.
 
53.2
FATCA Information.
 
(a)
Subject to paragraph (c) below, each Relevant Party shall within ten (10) Business Days of a reasonable request by another Relevant Party:
 
 
(i)
confirm to the other party whether it is:
 
(A)
a FATCA Exempt Party; or
 
 
(B)
not a FATCA Exempt Party; and
 
(ii)
supply to the other Relevant Party such forms, documentation and other information relating to its status under FATCA (including its applicable “passthru payment
percentage” or other information required under the US Treasury Regulations or other official guidance including intergovernmental agreements) as the other Relevant
Party reasonably requests for the purposes of the other Relevant Party’s compliance with FATCA.
 
(b)
If a Relevant Party confirms to any other Relevant Party pursuant to paragraph 53.2(a)(i) above that it is a FATCA Exempt Party and it subsequently becomes aware that it is not,
or has ceased to be a FATCA Exempt Party, that Relevant Party shall notify all other Relevant Parties reasonably promptly.
 
(c)
Paragraph (a) above shall not oblige any Relevant Party to do anything which would or might in its reasonable opinion constitute a breach of:
 
(i)
any law or regulation
 
(ii)
any fiduciary duty; or
 
(iii)
any duty of confidentiality.
 
(d)
If a Relevant Party fails to confirm its status or to supply forms, documentation or other information requested in accordance with paragraph (a) above (including, for the
avoidance of doubt, where paragraph (c) above applies), then such Relevant Party shall be treated for the purposes of the Leasing Documents (and payments under it) as if it is
not a FATCA Exempt Party until such time as the Relevant Party in question provides the requested confirmation, forms, documentation or other information.
 
53.3
FATCA Deduction and gross-up by Relevant Party
 
(a)
If the representation made by the Charterers under Clause 45.1(p) proves to be untrue or misleading such that the Charterers are required to make a FATCA Deduction, the
Charterers shall make the FATCA Deduction and any payment required in connection with that FATCA Deduction within the time allowed and in the minimum amount required
by FATCA.
45
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

(b)
If the Charterers are required to make a FATCA Deduction then the Charterers shall increase the payment due from them to the Owners to an amount which (after making any
FATCA Deduction) leaves an amount equal to the payment which would have been due if no FATCA Deduction had been required.
 
(c)
The Charterers shall promptly upon becoming aware that they must make a FATCA Deduction (or that there is any change in the rate or basis of a FATCA Deduction) notify the
Owners accordingly. Within thirty (30) days of the Charterers making either a FATCA Deduction or any payment required in connection with that FATCA Deduction, the
Charterers shall deliver to the Owners evidence satisfactory to the Owners that the FATCA Deduction has been made or (as applicable) any appropriate payment paid to the
relevant governmental or taxation authority.
 
53.4
FATCA Deduction by Owners
 
The Owners may make any FATCA Deduction they are required by FATCA to make, and any payment required in connection with that FATCA Deduction, and the Owners shall
not be required to increase any payment in respect of which they make such a FATCA Deduction or otherwise compensate the recipient for that FATCA Deduction.
 
53.5
FATCA Mitigation.
 
Notwithstanding any other provision to this Charter, if a FATCA Deduction is or will be required to be made by any party under Clause 53.3 in respect of a payment to the
Owners as a result of the Owners not being a FATCA Exempt Party, the Owners shall have the right to transfer their interest in the Vessel (and this Charter) to any person
nominated by the Owners and all costs in relation to such transfer shall be for the account of the Charterers.
 
CLAUSE 54      – CONFIDENTIALITY
 
54.1
The Parties agree to keep the terms and conditions of this Charter and any other Leasing Documents (the “Confidential Information”) strictly confidential, provided that a Party
may disclose Confidential Information in the following cases:
 
(a)
it is already known to the public or becomes available to the public other than through the act or omission of the disclosing Party;
 
(b)
it is required to be disclosed under the applicable laws of any Relevant Jurisdiction, by a governmental order, decree, regulation or rule, by an order of a court, tribunal or listing
exchange of the Relevant Jurisdiction, provided that the disclosing Party shall give written notice of such required disclosure to the other Party prior to the disclosure;
 
(c)
in filings with a court or arbitral body in proceedings in which the Confidential Information is relevant and in discovery arising out of such proceedings;
 
(d)
to any other party to a Leasing Document;
 
(e)
to (or through) whom a Party assigns or transfers (or may potentially assign or transfer) all or any of its rights and/or obligations under one or more Leasing Document (as
permitted by the terms thereof), provided that such person receiving Confidential Information shall undertake that it would not disclose Confidential Information to any other
party save for circumstances arising which are similar to those described under this Clause or such other circumstances as may be permitted by all Parties;
 
(f)
to any of the following persons on a need to know basis:
 
 
(i)
a shareholder or an Affiliate of either Party or a party referred to in paragraph (d) (including the employees, officers and directors thereof);
46
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

(ii)
professional advisers retained by a disclosing party; or
 
(iii)
persons advising on, providing or considering the provision of financing to the disclosing party or an Affiliate,
 
provided that the disclosing party shall exercise due diligence to ensure that no such person shall disclose Confidential Information to any other party save for circumstances
arising which are similar to those described under this Clause or such other circumstances as may be permitted by all Parties; or
 
(g)
with the prior written consent of all Parties.
 
CLAUSE 54A  – GENERAL APPLICATION OF PROCEEDS
 
Any Net Trading Proceeds, Net Sales Proceeds, Total Loss Proceeds, Sale Deposit, any proceeds realised by the Owners in connection with the enforcement of the Security
Documents (unless otherwise specified in the Security Documents) shall be applied in the following order of application against amounts payable under the Leasing
Documents:
 
(a)
firstly, in or towards any amounts outstanding under the Leasing Documents other than the Termination Purchase Price (including but not limited to any costs and expenses
incurred in the enforcement of the Security Documents, to the extent these are not covered under the Termination Purchase Price);
 
(b)
secondly, in or towards satisfaction of the Charterers’ obligation to pay the Termination Purchase Price (or such portion of it that then remains unpaid) in any order of
application in the amounts comprising the Termination Purchase Price as the Owners may determine; and
 
(c)
thirdly, upon satisfaction in full of all amounts payable to the Owners under the Leasing Documents, in payment of any surplus to the Charterers, but subject always to no
actual or contingent liabilities existing at the relevant time.
 
CLAUSE 55      – PARTIAL INVALIDITY
 
If, at any time, any provision of a Leasing Document is or becomes illegal, invalid or unenforceable in any respect under any law of any jurisdiction, neither the legality, validity
or enforceability of the remaining provisions under the law of that jurisdiction nor the legality, validity or enforceability of such provision under the law of any other jurisdiction
will in any way be affected or impaired.
 
CLAUSE 56      – SETTLEMENT OR DISCHARGE CONDITIONAL
 
56.1
Any settlement or discharge under any Leasing Document between the Owners and any Obligor or any other person shall be conditional upon no security or payment to the
Owners by any Obligor or any other person being set aside, adjusted or ordered to be repaid, whether under any insolvency law or otherwise.
 
56.2
If the Owners consider that an amount paid or discharged by, or on behalf of, an Obligor in purported payment or discharge of an obligation of that Obligor to the Owners under
the Leasing Documents is capable of being avoided or otherwise set aside on the liquidation or administration of that Obligor or otherwise, then that amount shall not be
considered to have been unconditionally and irrevocably paid or discharged for the purposes of the Leasing Documents.
 
CLAUSE 57      – CHANGES TO THE PARTIES
 
57.1
Assignment or transfer by the Charterers
47
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

The Charterers shall not assign their rights or transfer by novation any of their rights and obligations under the Leasing Documents except with the prior consent in writing of
the Owners.
 
57.2
Assignment or transfer by the Owners
 
Subject to Clause 35 above, the Charterers acknowledge that, at any time during the Charter Period:
 
(a)
the Owners are entitled, without the prior consent of the Charterers, to enter into certain funding arrangements with their financier(s), (the “Owners’ Financier”) in relation to
the acquisition of the Vessel pursuant to the MOA and the chartering of the Vessel to the charterers under this Charter, which funding arrangements may be secured, inter alia,
by the relevant Financial Instruments;
 
(b)
the Owners may do any of the following as security for the funding arrangements referred to in paragraph (a) above, in each case, without the prior consent of the Charterers:
 
(i)
execute a ship mortgage over the Vessel or any other Financial Instrument in favour of an Owners’ Financier;
 
(ii)
assign their rights and interests to, in or in connection with this Charter and any other Leasing Document in favour of that Owners’ Financier;
 
(iii)
assign their rights and interests to, in or in connection with the Insurances, the Earnings and the Requisition Compensation of the Vessel in favour of that Owners’
Financier; and
 
(iv)
enter into any other document or arrangement which is necessary to give effect to such financing arrangements.
 
57.3
The Charterers undertake to comply, and provide such information and documents reasonably required to enable the Owners to comply, with all such instructions or directions
in regard to the employment, insurances, operation, repairs and maintenance of the Vessel as laid down in any Financial Instrument or as may be directed from to time during the
currency of this Charter by the Owners’ Financier in conformity with any Financial Instrument. The Charterers further agree and acknowledge all relevant terms, conditions and
provisions of each Financial Instrument (if any) and agree to acknowledge this in writing in any form that may be reasonably required by the Owners’ Financier.
 
57.4
The Owners may transfer by novation (or otherwise) any of its rights and obligations under the Leasing Documents and/or sell the Vessel at any time with the consent of the
Charterers (such consent not to be unreasonably withheld or delayed), provided that such consent would not be required if such transfer is made:
 
(i)
to another lessor or financial institution or trust, fund, leasing company or other entity which is regularly engaged in or established for the purpose of making,
purchasing or investing in loans, securities or other financial assets and provided that they are not a Restricted Person or has not engaged in any activity that is in
breach of Sanctions;
 
(ii)
to an affiliate of the Owners;
 
(iii)
at such time following the occurrence of a Termination Event which is continuing; or
 
(iv)
in accordance with the Charterers’ exercise of the applicable Purchase Option under Clause 36.14(ii)(ii) or Clause 47 or of the Purchase Obligation under Clause 48.
48
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

57.5
Following any change in the registered ownership of the Vessel permitted pursuant to Clause 57.4, this Charter would continue on identical terms (save for logical,
consequential or mutually agreed amendments), and the Charterers hereby agree that they shall be liable to the aforesaid new owner of the Vessel for its performance of all
obligations pursuant to this Charter after change of the registered ownership of the Vessel from the Owners to such new owner and shall procure that the Guarantor shall each
execute a guarantee in favour of the new owners for the inter alia, obligations of the Charterers under this Charter, in substantially in the same form as the Guarantee (or such
other form as the Guarantor and the new owners may agree).
 
57.6
The Charterers agree and undertake to enter into any such usual documents as the Owners shall require to complete or perfect the transfer of the Vessel (with the benefit and
burden of this Charter) pursuant to this Clause 57, at no cost to the Charterers.
 
CLAUSE 58       – MISCELLANEOUS
 
58.1
The Charterers waive any rights of sovereign immunity which they or any of their assets may enjoy in any jurisdiction and subjects itself to civil and commercial law with
respect to their obligations under this Charter.
 
58.2
No term of this Charter is enforceable under the Contracts (Rights of Third Parties) Act 1999 by a person who is not party to this Charter.
 
58.3
This Charter and each Leasing Document may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single
copy of this Charter or that Leasing Document, as the case may be.
 
58.4
These additional clauses shall be read together with the BARECON 2001, and shall constitute a single instrument. In the case of any conflict between the provisions of these
additional terms and the BARECON 2001, these additional terms shall prevail.
 
58.5
This Charter contains all the understandings and agreements of whatsoever kind and nature existing between the parties in respect of this Charter, the rights, interests,
undertakings agreements and obligations of the parties to this Charter and shall supersede all previous and contemporaneous negotiations and agreements.
 
58.6
The termination of this Charter for any cause whatsoever shall not affect the right of the Owners to recover from the Charterers any money due to the Owners on or before the
termination in consequence thereof and all other rights of the Owners (including, but not limited to, any rights, benefits or indemnities which are expressly provided to continue
after the termination of this Charter) are reserved hereunder.
 
58.7
Nothing in this Charter creates, constitutes or evidences any partnership, joint venture, agency, trust or employer/employee relationship between the parties, and neither Party
may make, or allow to be made any representation that any such relationship exists between the parties. Neither Party shall have the authority to act for, or incur any obligation
on behalf of, the other party, except as expressly provided in this Charter.
 
58.8
The rights, powers and remedies provided in this Charter are cumulative and not exclusive of any rights, powers or remedies at law or in equity unless specifically otherwise
stated.
 
58.9
The Owners may set off any matured and/or contingent obligation due from any Obligor under the Leasing Documents (to the extent beneficially owned by the Owners) against
any obligation (whether matured or not) owed by the Owners to that or any other Obligor, regardless of the place of payment or currency of either obligation. If the obligations
are in different currencies, the Owners may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off. Other than as
explicitly set out in the Leasing Documents, no member of the Group may set off any matured and/or contingent obligation due from the Owners under the Leasing Documents
(to the extent beneficially owned by any Obligor) against any obligation (whether matured or not) owed by any member of the Group to the Owners, regardless of the place of
payment or currency of either obligation.
49
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

CLAUSE 59          – DEFINITIONS
 
59.1
In this Charter the following terms shall have the meanings ascribed to them below:
 
“Acceptance Certificate” means a certificate substantially in the form set out in Schedule 1 to be signed by the Charterers at Delivery.
 
“Account Bank” means DNB Bank ASA - London Branch or such bank as may be notified to the Owners and as may be approved in writing by the Owners.
 
“Account Security” means the document creating security over the Operating Account executed or to be executed by the Charterers in favour of the Owners, in the agreed
form.
 
“Affiliate” means in relation to any person, a subsidiary of that person or a Holding Company of that person or any other subsidiary of that Holding Company.
 
“Anti-Money Laundering Laws” means all applicable financial record-keeping and reporting requirements, anti-money laundering statutes (including all applicable rules and
regulations thereunder) and all applicable related or similar laws, rules, regulations or guidelines, of all jurisdictions including and without limitation, the United States of
America, the United Kingdom, the European Union and the People’s Republic of China (including, without limitation, Anti- Money Laundering Law of the People’s Republic of
China (中华人民共和国反洗钱法) and Notice of the People’s Bank of China on Issues Concerning Enhancing Anti-Money Laundering Customer Identification Work (中国人
民银行关于加强反洗钱客户身份识别有关工作的通知)) and which in each case are (a) issued, administered or enforced by any governmental agency having jurisdiction over
any Obligor or the Owners; (b) of any jurisdiction in which any Obligor or the Owners conduct business; or (c) to which any Obligor or the Owners is subjected or subject to.
 
“Anti-Terrorism Financing Laws” means all applicable anti-terrorism laws, rules, regulations or guidelines of any jurisdiction, including and not limited to the United States of
America or the People’s Republic of China which are: (a) issued, administered or enforced by any governmental agency, having jurisdiction over any Obligor or the Owners; (b)
of any jurisdiction in which any Obligor or the Owners conduct business; or (c) to which any Obligor or the Owners are subjected or subject to.
 
“Approved Management Agreement” means the management agreement in respect of the Vessel dated 18 December 2023 executed by the Charterers as owners and the
Approved Manager as commercial manager and technical manager, or such other commercial and/or technical management agreement in respect of the Vessel as may be
approved by the Owners in writing.
 
“Approved Manager” means Performance Shipping Management Inc. of Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960, or any
other international and reputable manager which may, with the prior written approval of the Owners, be appointed as a commercial and/or technical manager of the Vessel.
 
“Approved Sub-charter” means:
 
 
(a)
the Initial Sub-Charter; and
 
 
(b)
any other charter or employment of the Vessel which have been approved in writing by the Owners pursuant to Clause 46(o).
50
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

“Approved Sub-charterer” means:
 
 
(a)
the Initial Sub-Charterer; or
 
 
(b)
any other sub-charterer of the Vessel which is a party to an Approved Sub-charter which shall be approved by the Owners in writing.
 
“Approved Valuer” means Clarksons & Platou, Howe Robinson, Barry Rogliano Salles, Graig, MB Shipbroker, VesselsValue, Arrow Shipbroking Group, Braemar ACM
Shipbroking, Fearnleys AS and Simpson Spence & Young or such other independent and reputable shipbroker nominated by the Charterers and approved by the Owners.
 
“Breakfunding Costs” means all breakfunding costs and expenses incurred or payable by the Owners when a repayment or prepayment under the relevant funding
arrangement entered into by the Owners for the purpose of financing Purchase Price (or any part thereof) do not fall on a Hire Payment Date, a Purchase Option Date or a
Termination Notice Date, as the case may be.
 
“Builder” has the meaning given to such term under the MOA.
 
“Business Day” means a day on which banks are open for business in the principal business centres of People’s Republic of China, Greece and the Flag State and
 
 
(a)
in respect of a day on which a payment is required to be made or other dealing is due to take place under this Charter in Dollars, also a day on which commercial banks
are open in New York City; and
 
 
(b)
in respect of any Quotation Day or any date on which Reference Rate is to be determined, also a day which is a US Government Securities Business Day.
 
“Business Ethics Law” means any laws, regulations and/or other legally binding requirements or determinations in relation to corruption, fraud, collusion, bid-rigging or anti-
trust, human rights violations (including forced labour and human trafficking) which are applicable to any Obligor or the Owners or to any jurisdiction where activities are
performed and which shall include but not be limited to (i) the United Kingdom Bribery Act 2010 and (ii) the United States Foreign Corrupt Practices Act 1977 and all rules and
regulations under each of (i) and (ii).
 
“Buyers” means the Owners acting in their capacity as buyer of the Vessel under the MOA.
 
“Cancelling Date” means 30 September 2026 or such later date as may be specified by the Owners and agreed by the Charterers.
 
“Charterhire” means each of, or as the context may require, all of the monthly instalments of hire payable under this Charter comprising of a Fixed Charterhire element and a
Variable Charterhire element.
 
“Charter Period” means the period commencing on the Delivery Date and described in Clause
32.2 unless it is either terminated earlier or extended in accordance with the provisions of this Charter.
 
“CISADA” means the United States Comprehensive Iran Sanctions, Accountability and Divestment Act of 2010 as it applies to non-US persons.
 
“Classification Society” means the vessel classification society referred to in Box 10 (Classification Society) of this Charter or any other generally recognised first class
classification society that is a member of IACS and approved by the Owners.
51
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

“Counterparty” has the meaning given to it in Clause 46(kk)(i)(B).
“Delivery” means the time when:
 
(a)
the Owners obtain title to the Vessel from the Sellers in accordance with the terms of the MOA; and
 
(b)
the Charterers accept delivery of the Vessel from the Owners in accordance with the terms of this Charter.
 
“Delivery Date” means the date on which Delivery takes place.
 
“Dollars”, “$” and “US$” mean the lawful currency for the time being of the United States of America.
 
“Earnings” means all moneys whatsoever which are now, or later become, payable (actually or contingently) and which arise out of the use or operation of the Vessel, including
(but not limited to):
 
 
(a)
all freight, hire and passage moneys, compensation payable in the event of requisition of the Vessel for hire, remuneration for salvage and towage services, demurrage
and detention moneys and damages for breach (or payments for variation or termination) of any charterparty or other contract for the employment of the Vessel; and
 
 
(b)
if and whenever the Vessel is employed on terms whereby any moneys falling within paragraph (a) are pooled or shared with any other person, that proportion of the
net receipts of the relevant pooling or sharing arrangement which is attributable to the Vessel;
 
“Emission Allowances” means an allowance, credit, quota, permit or equivalent, representing a right of a vessel to emit a specified quantity of greenhouse gas emissions
recognised by the Emission Scheme.
 
“Emissions Data” means the Vessel’s compliance with Emission Scheme, EU MRV and FEMREG.
 
“Emission Scheme” means a greenhouse gas emissions trading scheme which for the purposes of this Charter shall include the EU ETS and any other similar systems imposed
by applicable lawful authorities that regulate the issuance, allocation, trading or surrendering of Emission Allowances.
 
“Emission Scheme Authority” means in relation to an Emission Scheme, the relevant authority administering or otherwise implementing such Emissions Scheme.
 
“Emission Scheme Participant” means in relation to an Emission Scheme, any person which is responsible for complying with the requirements of such Emissions Scheme.
 
“Environmental Approval“ means any present or future permit, ruling, variance or other authorisation, consent, approval, resolution, licence, exemption or registration required
under any Environmental Law.
 
“Environmental Claim” means:
 
 
(a)
any claim by any governmental, judicial or regulatory authority which arises out of an Environmental Incident or which relates to any Environmental Law; or
 
 
(b)
any claim by any other person which relates to an Environmental Incident,
52
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

and “claim” means a claim for damages, compensation, fines, penalties or any other payment; an order or direction to take, or not to take, certain action or to desist from or
suspend certain action; and any form of enforcement or regulatory action, including the arrest or attachment of any asset;
 
“Environmental Incident” means:
 
 
(a)
any release of Environmentally Sensitive Material from the Vessel; or
 
 
(b)
any incident in which Environmentally Sensitive Material is released from a vessel other than the Vessel and which involves a collision between the Vessel and such
other vessel or some other incident of navigation or operation, in either case, in connection with which the Vessel is actually liable to be arrested, attached, detained or
injuncted and/or the Vessel and/or the Owners and/or the Charterers and/or the Approved Sub-charterer and/or any other operator or manager of the Vessel is at fault
or otherwise liable to any legal or administrative action; or
 
 
(c)
any other incident involving the Vessel in which Environmentally Sensitive Material is released otherwise than from the Vessel and in connection with which the Vessel
is actually arrested and/or where the Owners and/or the Charterers and/or the Approved Sub-charterer and/or any other operator or manager of the Vessel is at fault or
otherwise liable to any legal or administrative action.
 
“Environmental Law” means any present or future law relating to pollution or protection of human health or the environment, to conditions in the workplace, to the carriage,
generation, handling, storage, use, release or spillage of Environmentally Sensitive Material or to actual or threatened releases of Environmentally Sensitive Material including
any law pertaining to any Emission Scheme.
 
“Environmentally Sensitive Material” means oil, oil products and any other substances (including any chemical, gas or other hazardous or noxious substance) which are (or
are capable of being or becoming) polluting, toxic or hazardous.
 
“Escrow Agreement” has the meaning given to such term in the MOA.
 
“ETS and Fuel EU Maritime Agreement” shall have the meaning as defined under Clause 39.5(e).
 
“ETS and Fuel EU Maritime Letter” shall have the meaning as defined under Clause 39.5(c).
 
“EU ETS” means the European Union Emissions Trading System specifically applicable to shipping pursuant to the European Directive 2023/959 amending European Directive
2003/87/EC and Commission Implementing Regulation (EU) 2023/2599 of 22 November 2023 laying down rules for the application of Directive 2003/87/EC of the European
Parliament and of the Council as regards the administration of shipping companies by administering authorities in respect of a shipping company.
 
“EU MRV” means the European Regulation 2023/957 of the European Parliament and of the Council of 10 May 2023 amending Regulation (EU) 2015/757 in order to provide for
the inclusion of maritime transport activities in the EU ETS and for the monitoring, reporting and verification of emissions of additional greenhouse gases and emissions from
additional ship types.
 
“Extended Exclusivity Period” has the meaning given to it under Clause 40.4(b)(ii).
53
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

“Flag State” means the flag state as stated in Box 5 of this Charter or such other reputable flag state as may be approved in writing by the Owners.
 
“Financial Indebtedness” means, in relation to a person (the “debtor”), a liability of the debtor:
 
 
(a)
for principal, interest or any other sum payable in respect of any moneys borrowed or raised by the debtor;
 
 
(b)
under any loan stock, bond, note or other security issued by the debtor;
 
 
(c)
under any acceptance credit, guarantee or letter of credit facility made available to the debtor;
 
(d)
under a financial lease, a deferred purchase consideration arrangement (other than deferred payments for assets or services obtained on normal commercial terms in the
ordinary course of business) or any other agreement having the commercial effect of a borrowing or raising of money by the debtor;
 
(e)
under any foreign exchange transaction, any interest or currency swap or any other kind of derivative transaction entered into by the debtor or, if the agreement under
which any such transaction is entered into requires netting of mutual liabilities, the liability of the debtor for the net amount; or
 
(f)
under a guarantee, indemnity or similar obligation entered into by the debtor in respect of a liability of another person which would fall within paragraphs (a) to (e) if
the references to the debtor referred to the other person;
 
“Financial Instruments” means any mortgage, deed of covenant, the general assignment or such other financial security instruments as may be granted to the Owners’
Financier as security for the obligations of the Owners in relation to the financing of the acquisition of the Vessel.
 
“Fixed Charterhire” means the portion of Charterhire payable on each Hire Payment Date in an amount set out in Schedule 3.
 
“Fuel EU Maritime” or “FEMREG” means Fuel EU Maritime Regulation 2023/1805 dated 13 September 2023 on the use of renewable and low-carbon fuels in maritime transport,
and amending Directive 2009/16/EC.
 
“General Assignment” means the general assignment in agreed form which is executed or to be executed by the Charterers in favour of the Owners in respect of the Vessel,
pursuant to which the Charterers shall, inter alia, assign its rights in relation to (i) Insurances, Earnings and Requisition Compensation; (ii) any Approved Sub-charter and any
guarantee of such Approved Sub-charter (if any) and (iii) the SBC Sellers’ warranties under the Shipbuilding Contract, in favour of the Owners.
 
“Group” means the Guarantor and its subsidiaries (whether directly or indirectly owned) from time to time.
 
“Guarantee” means a guarantee executed or to be executed by the Guarantor in favour of the Owners on or about the date hereof.
 
“Guarantor” means Performance Shipping Inc., a corporation incorporated and existing under the laws of the Republic of the Marshall Islands whose registered address is at
Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960.
 
“Hire Payment Date” means each of, or as the context may require, any of:
54
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

(a)
in respect of the first Charterhire instalment, the date falling one (1) month after the Prepositioning Date provided that if such date falls after the 20th day in the relevant
calendar month, the first Charterhire instalment shall be payable on the 20th day in the relevant calendar month;
 
(b)
in respect of each subsequent instalment of Charterhire (other than the final Charterhire instalment), the date falling one (1) month after the preceding Hire Payment
Date; and
 
(c)
in respect of the final Charterhire instalment, the Maturity Date,
 
such that there is a total of one hundred and twenty (120) Hire Payment Dates during the Charter Period.
 
“Hire Period” means each consecutive period commencing from the Prepositioning Date, provided that:
 
(a)
the first Hire Period shall commence on the Prepositioning Date and end on the first Hire Payment Date;
 
(b)
each subsequent Hire Period (apart from the final Hire Period) shall be any one (1) month’s duration and shall commence on the last day of the previous Hire Period and
end on the next occurring Hire Payment Date;
 
(c)
any Hire Period which would otherwise overrun a Hire Payment Date shall instead end on that Hire Payment Date; and
 
(d)
the final Hire Period shall end on the Maturity Date.
 
“Holding Company” means, in relation to a person, any other person in relation to which it is a subsidiary.
 
“IAPPC” means a valid international air pollution prevention certificate for the Vessel issued pursuant to the MARPOL Protocol.
 
“Initial Exclusivity Period” has the meaning given to it under Clause 40.4(b)(ii).
 
“Initial MOA” means the memorandum of agreement entered or to be entered into between the Charterers as seller and the Sellers as buyer executed or to be executed in respect
of the sale and purchase of the Vessel.
 
“Initial Sub-Charter” means the time charter party of the Vessel entered into by the Charterers as disponent owner and the Initial Sub-Charterer as sub-charterer dated 8 March
2024.
 
“Initial Sub-Charterer” means Clearlake Shipping Pte Ltd. of Singapore.
“Insurances” means:
 
(a)
all policies and contracts of insurance, including entries of the Vessel in any protection and indemnity or war risks association, which are effected in respect of the
Vessel or otherwise in relation to it whether before, on or after the date of this Charter; and
 
(b)
all rights and other assets relating to, or derived from, any of the foregoing, including any rights to a return of a premium and any rights in respect of any claim whether
or not the relevant policy, contract of insurance or entry has expired on or before the date of this Charter;
55
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

“Interest Rate” means, in relation to each Hire Period and subject to Clause 36.14, the percentage rate of interest per annum which is the aggregate of (a) Margin and (b) the
applicable Reference Rate for such Hire Period.
 
“ISM Code” means the International Safety Management Code (including the guidelines on its implementation), adopted by the International Maritime Organisation Assembly
as Resolutions A.741 (18) and A.788 (19), as the same may be amended or supplemented from time to time (and the terms “safety management system”, “Safety Management
Certificate” and “Document of Compliance” have the same meanings as are given to them in the ISM Code).
 
“ISPS Code” means the International Ship and Port Security Code as adopted by the Conference of Contracting Governments to the Safety of Life at Sea Convention 1974 on 13
December 2002 and incorporated as Chapter XI-2 of the Safety of Life at Sea Convention 1974, as the same may be supplemented or amended from time to time.
 
“ISSC” means an International Ship Security Certificate issued under the ISPS Code.
 
“Leasing Documents” means this Charter, the Side Letter, the Initial MOA, the MOA, the Guarantee, the Security Documents, any ETS and Fuel EU Maritime Agreement and
such document as may be designated as a Leasing Document by the Owners and the Charterers from time to time.
 
“Major Casualty” means any casualty to the Vessel in respect of which the claim or the aggregate of the claims against all insurers, before adjustment for any relevant franchise
or deductible, exceeds US$500,000, or the equivalent in any other currency.
 
“Manager’s Undertakings” means the letter of undertaking, in agreed form, to be executed by the Approved Manager under which, amongst others, the Approved Manager
agrees to assign their rights (if any) in Insurances in favour of the Owners as well as subordinate their rights against the Charterers to the rights of the Owners.
 
“Mandatory Sale” has the meaning given to that term in Clause 44A.2.
“Mandatory Sale Date” has the meaning given to that term in Clause 44A.2.
 
“Mandatory Sale Price” means, in respect of the Mandatory Sale Date, the aggregate of the aggregate of:
 
(a)
the Outstanding Principal as at the Mandatory Sale Date;
 
(b)
any accrued but unpaid Variable Charterhire, as at the Mandatory Sale Date;
 
(c)
any Breakfunding Costs;
 
(d)
any documented costs incurred and documented expenses incurred by the Owners in locating, repossessing or recovering the Vessel or collecting any payments due
under this Charter or in obtaining the due performance of the obligations of the Charterers under this Charter or the other Leasing Documents and any default interest
in relation thereto;
56
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

(e)
any losses, liabilities, documented costs and documented expenses (including, without limitation, legal fees) reasonably incurred by the Owners in connection with the
exercise of the Mandatory Sale under Clause 44A; and
 
(f)
all other amounts due and outstanding under this Charter and the other Leasing Documents together with any applicable interest thereon.
 
“Margin” means 2.10% per annum.
 
“Market Value” means, in relation to the Vessel , the valuation of the Vessel shown by one
(1) valuation report and prepared:
 
(a)
at the cost of the Charterers and addressed to the Owners:
 
(b)
on a date no earlier than thirty (30) days prior to the relevant date of determination;
 
(c)
by an Approved Valuer nominated by the Owners;
 
(d)
without physical inspection of the Vessel;
 
(e)
on the basis of a sale for prompt delivery for cash on normal arm’s length commercial terms as between a willing seller and a willing buyer, free of any existing charter or
other contract of employment or such other basis as may be agreed by the Owners; and
 
(f)
less an amount determined by the Owners as being an amount equal to the amount of the usual and reasonable expenses which would be reasonably likely to be
incurred in connection with a sale described in paragraph (e) above after deducting expenses which would be incurred in connection with the sale of the Vessel.
“MARPOL Carbon Intensity Regulations” means the regulations contained in Chapters 1, 2 and 4 of Revised MARPOL Annex VI which relate to “Regulations on the Carbon
Intensity of International Shipping” and Resolution MEPC.328(76) implementing the CII and any associated guidelines and/or subsequent amendments, including the Ship
Energy Efficiency Management Plan (SEEMP).
 
“MARPOL Protocol” means Annex VI (Regulations for the Prevention of Air Pollution from Ships) to the International Convention for the Prevention of Pollution from Ships
1973 (as amended in 1978 and 1997).
 
“Material Adverse Effect” means, in the reasonable opinion of the Owners, a material adverse effect on:
 
(a)
the business, operations, property, condition (financial or otherwise) or prospects of any Obligor and their respective subsidiaries taken as a whole;
 
(b)
the ability of any Obligor to perform its obligations under any Leasing Document and/or any Transaction Document to which it is a party; or
 
(c)
the validity or enforceability of, or the effectiveness or ranking of any Security Interests granted pursuant to any of the Leasing Documents or the rights or remedies of
the Owners under any of the Leasing Documents.
 
“Maturity Date” means the earlier of (a) the date falling 120 months after the Prepositioning Date and (b) the last day of the Charter Period.
57
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

“MOA” means the memorandum of agreement dated on or about the date of this Charter and entered into by the Sellers and the Buyers in relation to the sale and purchase of
the Vessel.
 
“Net Sales Proceeds” has the meaning given to it under Clause 40.4(b)(iii).
“Net Trading Proceeds” has the meaning given to it under Clause 40.4(b)(i).
 
“Obligor” means any of the Charterers, the Sellers, the Guarantor, any Approved Manager and any other party providing security for the Charterers’ obligations under this
Charter pursuant to a Security Document or otherwise.
 
“Operating Account” means, an account designated as an “Operating Account” in the name of the Charterers with the Account Bank or any other replacement earnings
account in the name of the Charterers with any other bank which may, with the prior written consent of the Owners, be opened.
 
“Original Financial Statements” means the audited financial statements of the Guarantor for the financial year ended 31 December 2023.
 
“Original Jurisdiction” means, in relation to each Obligor or any Approved Sub-charterer, the jurisdiction under whose laws they are incorporated as at the date of this
Charter.
 
“Outstanding Principal” means, as at any date (for the purposes of this definition only, the “Relevant Date”) the relevant amount in Schedule 3 which is stated as such under
the column headed “Outstanding Principal” and corresponding to the Hire Payment Date falling immediately prior to the Relevant Date, provided that (i) if the Outstanding
Principal is reduced in accordance with this Charter (for any reason other than payment of Charterhire), the Owners shall provide an updated Schedule 3 to the Charterers to
reflect such reduction of the Outstanding Principal which new Schedule 3 shall be binding on the Parties and shall be deemed to replace the then existing Schedule 3 of this
Charter and be incorporated into the Charter, and (ii) the Owners may amend and replace Schedule 3 in writing and notify the same to the Charterers (whereupon such amended
Schedule 3 shall replace the original Schedule 3 and is deemed a part of this Charter ab initio) from time to time to reflect the Outstanding Principal calculated based on the
Purchase Price.
 
“Owners’ Financier” shall have the meaning as defined under 57.2(a).
 
“Party” means any party to this Charter.
 
“Payment Notice” shall have the meaning given to such term in the MOA.
“Permitted Security Interests” means:
(a)
Security Interests created by a Leasing Document or a Financial Instrument;
 
(b)
liens for unpaid master’s and crew’s wages in accordance with the ordinary course of operation of the Vessel or in accordance with usual reputable maritime practice
and not more than thirty (30) days overdue;
 
(c)
liens for salvage;
 
(d)
any other liens arising by operation of law or otherwise in the ordinary course of the operation, repair or maintenance of the Vessel provided such liens do not secure
amounts more than 30 days overdue (unless the overdue amount is being contested in good faith by appropriate steps and for the payment of which adequate reserves
are held and provided further that such proceedings do not give rise to a material risk of the Vessel or any interest in it being seized, sold, forfeited or lost);
58
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

(e)
any Security Interest created in favour of a plaintiff or defendant in any action of the court or tribunal before whom such action is brought as security for costs and
expenses where the Charterers are prosecuting or defending such action in good faith by appropriate steps; and
 
(f)
Security Interests arising by operation of law in respect of taxes which are not overdue or for payment of taxes which are overdue for payment but which are being
contested by the Owners or the Charterers in good faith by appropriate steps and in respect of which adequate reserves have been made.
 
“Potential Termination Event” means, an event or circumstance which, with the giving of any notice, the lapse of time and/or the satisfaction of any other condition, would
constitute a Termination Event.
 
“Prepositioning Date” has the meaning ascribed to such term in the MOA.
“Published Rate” means Term SOFR for a tenor of one (1) month.
 
“Published Rate Replacement Event” means, in relation to a Published Rate:
 
(a)
the methodology, formula or other means of determining that Published Rate has, in the opinion of the Owners and the Charterers, materially changed;
(b)
 
(i)
the administrator of that Published Rate or its supervisor publicly announces that such administrator is insolvent;
 
(ii)
information is published in any order, decree, notice, petition or filing, however described, of or filed with a court, tribunal, exchange, regulatory authority or
similar administrative, regulatory or judicial body which reasonably confirms that the administrator of that Published Rate is insolvent,
 
provided that, in each case, at that time, there is no successor administrator to continue to provide that Published Rate;
 
(iii)
the administrator of that Published Rate publicly announces that it has ceased or will cease to provide that Published Rate permanently or indefinitely and, at
that time, there is no successor administrator to continue to provide that Published Rate;
 
(iv)
the supervisor of the administrator of that Published Rate publicly announces that such Published Rate has been or will be permanently or indefinitely
discontinued; or
 
(v)
the administrator of that Published Rate or its supervisor announces that that Published Rate may no longer be used; or
 
(c)
the administrator of that Published Rate (or the administrator of an interest rate which is a constituent element of that Published Rate) determines that that Published
Rate should be calculated in accordance with its reduced submissions or other contingency or fallback policies or arrangements and either:
 
(i)
the circumstance(s) or event(s) leading to such determination are not (in the opinion of the Owners) temporary;
59
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

(ii)
that Published Rate is calculated in accordance with any such policy or arrangement for a period no less than a reasonable time period as determined by the
Owners; or
 
in the opinion of the Charterers and the Owners, that Published Rate is otherwise no longer appropriate for the purposes of calculating interest under this Charter.
 
“Purchase Obligation” means the purchase obligation referred to in Clause 48.
 
“Purchase Obligation Price” means the relevant amount in Schedule 3 which is stated as such under the column headed “Purchase Obligation Price”.
 
“Purchase Option” means the early purchase option which the Charterers are entitled to exercise pursuant to Clause 36.14(ii)(ii) or Clause 47.
 
“Purchase Option Date” means:
 
(a)
in the event that the Purchase Option is exercised pursuant to Clause 36.14(ii)(ii), any date specified by the Charterers in relevant Purchase Option Notice; and
 
(b)
in the event that the Purchase Option is exercised pursuant to Clause 47, any date after the second anniversary of the Delivery Date specified by the Charterers in the
relevant Purchase Option Notice.
 
“Purchase Option Fee” means:
 
(a)
if the Purchase Option is exercised pursuant to Clause 36.14(ii)(ii) and on or before the second (2nd) anniversary of the Delivery Date, two per cent. (2%) of such
Outstanding Principal as at the applicable Purchase Option Date;
 
(b)
if the Purchase Option is exercised after the second (2nd) anniversary of the Delivery Date and on or before the third (3rd) anniversary of the Delivery Date, one point
five per cent. (1.5%) of such Outstanding Principal as at the applicable Purchase Option Date;
 
(c)
if the Purchase Option is exercised after the third (3rd) anniversary of the Delivery Date and on or before the fourth (4th) anniversary of the Delivery Date, one per cent.
(1%) of such Outstanding Principal as at the applicable Purchase Option Date;
 
(d)
if the Purchase Option is exercised after the fourth (4th) anniversary of the Delivery Date and on or before the fifth (5th) anniversary of the Delivery Date, zero point
five per cent. (0.5%) of such Outstanding Principal as at the applicable Purchase Option Date; and
 
(e)
if the Purchase Option is exercised after the fifth (5th) anniversary of the Delivery Date, zero per cent (0%) of such Outstanding Principal as at the applicable Purchase
Option Date.
 
“Purchase Option Notice” means the prior written notice served by the Charterers to the Owners pursuant to Clause 36.14(ii)(ii) or Clause 47.1 in relation to the applicable
Purchase Option.
 
“Purchase Option Price” means the aggregate of:
 
(a)
the Outstanding Principal as at the applicable Purchase Option Date;
60
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

(b)
the applicable Purchase Option Fee;
 
(c)
any accrued but unpaid Variable Charterhire as at the applicable Purchase Option Date;
 
(d)
any Breakfunding Costs;
 
(e)
any costs and expenses incurred by the Owners (and the Owners’ Financier (if any)) in locating, repossessing or recovering the Vessel or collecting any payments due
under this Charter or in obtaining the due performance of the obligations of the Charterers under this Charter or the other Leasing Documents and any default interest
in relation thereto;
 
(f)
any losses, liabilities, costs and expenses (including, without limitation, legal fees) incurred by the Owners in connection with the exercise of the applicable Purchase
Option; and
 
(g)
all other amounts due and outstanding under this Charter and the other Leasing Documents together with any applicable interest thereon.
 
“Purchase Price” has the meaning ascribed to such term in the MOA.
 
“Qualifying Voyage” means the period between the Russian Oil Product being lifted or loaded onto the Vessel whether at the loading port or from another vessel, or otherwise,
and its discharge, whether at a discharge port or onto another vessel, or otherwise.
 
“Quotation Day” means in relation to a Hire Period for which an Interest Rate is to be determined, two (2) US Government Securities Business Days before the first day of that
Hire Period unless market practice differs in the relevant syndicated loan market in which case the Quotation Day will be determined by the Owners in accordance with that
market practice (and if quotations would normally be given on more than one day, the Quotation Day will be the last of those days).
 
“Reference Rate” means, in respect of a Hire Period, subject to Clauses 36.13 and 36.14:
 
(a)
the applicable Term SOFR for a period of one (1) month as of the relevant Quotation Day; or
 
(b)
as otherwise determined pursuant to Clause 36.12,
 
and if, in either case, that rate is less than zero, the Reference Rate shall be deemed to be zero.
 
“Relevant Nominating Body” means any applicable central bank, regulator or other supervisory authority or a group of them, or any working group or committee sponsored or
chaired by, or constituted at the request of, any of them or the Financial Stability Board.
 
“Replacement Reference Rate” means a reference rate which is:
 
(a)
formally designated, nominated or recommended as the replacement for a Published Rate by;
 
(i)
the administrator of that Published Rate (provided that the market or economic reality that such reference rate measures is the same as that measured by that
Published Rate); or
61
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

(ii)
any Relevant Nominating Body;
 
and if replacements have, at the relevant time, been formally designated, nominated or recommended under both paragraphs, the “Replacement Reference Rate” will
be the replacement under paragraph (ii) above;
 
(b)
in the opinion of the Owners and the Charterers, generally accepted in the international or any relevant domestic syndicated loan markets as the appropriate successor
or alternative to a Published Rate; or
(c)
in the opinion of the Owners and the Charterers, an appropriate successor or alternative to a Published Rate.
 
“Relevant Jurisdiction” means, in relation to each Obligor or any Approved Sub-charterer:
 
(a)
its Original Jurisdiction;
 
(b)
any jurisdiction where any property owned by it and charged under a Leasing Document is situated;
 
(c)
any jurisdiction where it conducts its business; and
 
(d)
any jurisdiction whose laws govern the perfection of any of the Leasing Documents entered into by it creating a Security Interest;
 
“Requisition Compensation” includes all compensation or other moneys payable by reason of any act or event such as is referred to in paragraph (c) of the definition of “Total
Loss”.
 
“Restricted Countries” means those countries or territories subject to country-wide or territory-wide Sanctions and/or trade embargoes or whose government is the target of
Sanctions, in particular but not limited to pursuant to the U.S.’s Office of Foreign Asset Control of the U.S. Department of Treasury (“OFAC”) including at the date of this
Charter, but without limitation, Iran, Cuba, Iran, North Korea, Syria and Crimea and Venezuela and any additional countries or territories based on respective country-wide or
territory-wide Sanctions being imposed by OFAC or any of the regulative bodies referred to in the definition of Restricted Persons.
 
“Restricted Person” means any person who is the subject of Sanctions (whether designated by name or by reason of being included in a class of persons to whom the
applicable Sanctions apply in accordance with their terms) or against whom Sanctions are directed, including, without limitation, as a result of being (a) owned or controlled
directly or indirectly by any person which is a designated target of Sanctions, or (b) organized under the laws of, or a citizen or resident of, any Restricted Country, or otherwise
a target of Sanctions.
 
“Russian Oil Price Cap Measures” means the Russian oil price cap restrictions and requirements imposed by law or regulation of the United Kingdom, the Council of the
European Union and the United States of America and any other similar restrictions on the supply or delivery or maritime transportation of Russian Oil Products applicable to
any person as amended from time to time.
 
“Russian Oil Products” means oil and oil products falling within commodity codes 2709 or 2710 which originate in or are consigned from Russia.
 
“Sale Deposit” has the meaning given to it under Clause 40.4(b)(ii).
62
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

“Sale Notice” has the meaning given to it under Clause 40.4(b)(ii).
 
“Sanctions” means any sanctions (including US “secondary sanctions”), embargoes, freezing provisions, prohibitions or other restrictions relating to trading, doing business,
investment, exporting, financing or making assets available (or other activities similar to or connected with any of the foregoing):
 
(a)
imposed, administered, enacted or enforced by law or regulation of the United Kingdom, the Council of the European Union, the People’s Republic of China, the United
Nations or its Security Council or the US (including, but not limited to, “secondary sanctions” imposed by the US), the Hong Kong SAR, the Flag State or any
government, official institution or agency of any of the foregoing, whether or not any Obligor is legally bound to comply with the foregoing; or
 
(b)
otherwise imposed by any law or regulation binding on any Obligor or to which an Obligor is subject.
 
“Sanctions Advisory” means the Sanctions Advisory for the Maritime Industry, Energy and Metals Sectors, and Related Communities issued May 14, 2020 by the US
Department of the Treasury, Department of State and Coast Guard, as may be amended or supplemented, and any similar future advisory.
 
“SBC Sellers” has the meaning given to such term in the MOA.
 
“Security Documents” means each of the Account Security, the General Assignment, the Shares Security Deed, the Manager’s Undertaking, and any other security documents
granting a Security Interest in respect of the obligations of the Charterers under or in connection with this Charter.
 
“Security Interest” means:
 
(a)
a mortgage, charge (whether fixed or floating) or pledge, any maritime or other lien or any other security interest of any kind;
 
(b)
the security rights of a plaintiff under an action in rem; or
 
(c)
any other right which confers on a creditor or potential creditor a right or privilege to receive the amount actually or contingently due to it ahead of the general
unsecured creditors of the debtor concerned; however this paragraph (c) does not apply to a right of set off or combination of accounts conferred by the standard
terms of business of a bank or financial institution;
 
“Sellers” means Mustique Shipping Company Inc. of the Republic of the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake
Island, Majuro, Marshall Islands MH96960 acting in their capacity as seller of the Vessel under the MOA.
 
“Shares Security Deed” means the shares security deed and ancillaries thereto in the agreed form executed or to be executed, inter alia, by the Guarantor in favour of the
Owners over all the shares held by the Guarantor in the Charterers.
 
“Shipbuilding Contract” has the meaning given to such term under the MOA.
 
“Shipbuilding Contract Delivery Instalment” has the meaning given to such term under the MOA.
63
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

“Side Letter” means the side letter to be dated on or about the date of this Charter and entered into by the Owners and the Charterers in respect of this Charter.
 
“Sub-charter” means, as the context requires, any Approved Sub-charter, any other sub- charter or other form of contract for employment in respect of the Vessel to be entered
into by the Charterers (as disponent owners) and any other Sub-charterer, whether or not already in existence.
 
“Sub-charterer” means any charterer under a Sub-charter.
 
“Swap Losses” means the amount (if any) payable by the Owners to their counterparty under any interest rate swap arrangement entered into by the Owners in connection with
the hedging of their interest rate swap exposure in respect of the Leasing Documents, in relation to an unwinding of the whole or part of any interest rate swap transaction
entered between the Owners and such counterparty under such interest rate swap arrangement(s).
 
“Term SOFR” means the term SOFR reference rate administered by CME Group Benchmark Administration Limited (or any other person which takes over the administration of
that rate) for the relevant period published (before any correction, recalculation or republication by the administrator) by CME Group Benchmark Administration Limited (or any
other person which takes over the publication of that rate).
 
“Termination Bunker Value” has the meaning given to such term in Clause 40.8.
“Termination Notice Date” shall have the meaning as defined under Clause 44.2.
“Termination Event” means any event described in Clause 44.
 
“Termination Fee” means two per cent. (2%) of the Outstanding Principal provided that the Termination Purchase Price becomes payable in accordance with Clause 40.9 or
Clause 44.2 (Termination Events).
 
“Termination Purchase Price” means, in respect of any date (for the purposes of this definition only, the “Relevant Date”), the aggregate of:
 
(a)
the Outstanding Principal as at the Relevant Date;
 
(b)
any accrued but unpaid Variable Charterhire, as at the Relevant Date;
 
(c)
Termination Fee as at the Relevant Date (if applicable);
 
(d)
any Breakfunding Costs;
 
(e)
any Swap Losses;
 
(f)
any documented direct costs, losses, liabilities and expenses incurred by the Owners as a result of the early termination of this Charter including but not limited to any
legal costs, any agency or broker fees incurred in attempting to re-charter or otherwise dispose of the Vessel;
 
(g)
any liabilities, costs and expenses incurred by the Owners (and the Owners’ Financier (if any)) in maintaining, locating, repossessing, berthing, insuring, maintaining or
recovering the Vessel or collecting any payments due under this Charter or in obtaining the due performance of the obligations of the Charterers under this Charter or
the other Leasing Documents and any default interest in relation thereto; and
64
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

(h)
aside from the amounts described under paragraphs (a) to (g) above, and without double recovery, any other moneys due and owing under the Leasing Documents at
the Relevant Date (including but not limited to insurance premiums, indemnity amounts and any default interest accruing under Clause 36.9 which are due and owing),
 
LESS the Termination Bunker Value, but only if:
 
(i)
the Vessel has been redelivered to Owners’ full possession and control in accordance with Clause 40 (Termination, Redelivery and Total Loss) and the Vessel is (A)
subsequently sold (in which case the bunkers on board at redelivery shall form part of the sale proceeds of the Vessel) or (B) chartered out and only to the extent and in
respect of any amount actually received by the Owners in relation to the bunkers on board at redelivery;
 
(ii)
the bunkers on board at redelivery belong to the Charterers and not any other party; and
 
(iii)
the Charterers provide evidence that they have paid the relevant bunker supplier (or the Approved Sub-charterer, if applicable) for such bunkers in full.
 
“Third Party Manager” means each or, as the context may require, any Approved Manager which is not an Affiliate of the Charterers.
 
“Total Loss” means:
 
(a)
in the case of an actual loss of the Vessel the date on which it occurred or if that is unknown the date when the Vessel was last heard of;
(a)
in the case of an actual loss of the Vessel, the date on which it occurred or, if that is unknown, the date when the Vessel was last heard of;
 
(b)
in the case of a constructive, compromised, agreed or arranged total loss of the Vessel, the earlier of:
 
(i)
the date on which a notice of abandonment is given to the insurers; and
 
(ii)
the date of any compromise, arrangement or agreement made by or on behalf of the Owners with the insurers in which the insurers agree to treat the Vessel as a
Total Loss;
 
(c)
in the case of any expropriation, confiscation, requisition or acquisition of the Vessel whether for full consideration, a consideration less than its proper value, a
nominal consideration or without any consideration, which is effected by any government or official authority or by any person or persons claiming to be or to
represent a government or official authority (excluding a requisition for hire for a fixed period not exceeding 1 year without any right to an extension), on the date on
which the expropriation, confiscation, requisition or, as the case may be, the acquisition of the Vessel is completed by delivery of the Vessel to the relevant government
or official authority or the person or persons claiming to be or to represent the relevant government or official authority unless it is redelivered within sixty(60) days to
the full control of the Owners or the Charterers; and
 
(d)
in the case of any arrest, condemnation, capture, seizure or detention of the Vessel (including any hijacking, act of piracy or theft), unless it is redelivered within one
hundred twenty (120) days to the full control of the Owners or the Charterers, the date falling on the expiration of such days.
 
“Total Loss Payment Date” has the meaning given to that term in Clause 40.9.
65
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

“Total Loss Proceeds” means the proceeds of any policy or contract of insurance or any Requisition Compensation in each case arising in respect of a Total Loss.
 
“Transaction Documents” means collectively:
 
(a)
the Approved Management Agreement;
 
(b)
the Shipbuilding Contract; and
 
(c)
any Approved Sub-charter,
 
and “Transaction Document” means each or any of them, as the context may require.
 
“US Government Securities Business Day” means any day other than:
 
(a)
a Saturday or a Sunday; and
 
(b)
a day on which the Securities Industry and Financial Markets Association (or any successor organisation) recommends that the fixed income departments of its
members be closed for the entire day for purposes of trading in US Government securities.
 
“US Tax Obligor” means (a) a person which is resident for tax purposes in the United States of America or (b) a person some or all of whose payments under the Leasing
Documents are from sources within the United States for United States federal income tax purposes.
 
“Variable Charterhire” has the meaning ascribed to it in Clause 36.2(b).
 
“Vessel” means one (1) product tanker with hull number H1596 to be registered under the Flag State under construction by the Builder pursuant to the terms of the Shipbuilding
Contract.
 
59.2
In this Charter:
 
“agreed form” means, in relation to a document, such document in a form agreed in writing between the Owners and the Charterers and, if required by the Owners in their sole
discretion, the Owners’ Financier;
 
“asset” includes every kind of property, asset, interest or right, including any present, future or contingent right to any revenues or other payment;
 
“company” includes any partnership, joint venture and unincorporated association;
 
“consent” includes an authorisation, consent, approval, resolution, licence, exemption, filing, registration, notarisation and legalisation;
 
“contingent liability” means a liability which is not certain to arise and/or the amount of which remains unascertained;
 
“continuing” means, in relation to any Termination Event, a Termination Event which has not been waived by the Owners and in relation to any Potential Termination Event, a
Potential Termination Event which has not been waived by the Owners or remedied to the satisfaction of the Owners;
 
“control” over a particular company means the power (whether by way of ownership of shares, proxy, contract, agency or otherwise) to:
66
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

(a)
cast, or control the casting of, more than 51 per cent, of the maximum number of votes that might be cast at a general meeting of such company; or
 
(b)
appoint or remove all, or the majority, of the directors or other equivalent officers of such company; or
 
(c)
give directions with respect to the operating and financial policies of such company with which the directors or other equivalent officers of such company are obliged
to comply;
 
“days” means each running day in a calendar year; “document” includes a deed; also a letter, fax or telex;
 
“expense” means liabilities, obligations, losses, damages, penalties, fines, fees, claims, actions, proceedings, judgement, order or other sanction, lien, salvage, general average,
suits, costs, expenses and disbursements, including reasonable legal fees and expenses, of whatsoever kind and nature;
 
“law” includes any order or decree, any form of delegated legislation, any treaty or international convention and any regulation or resolution of the Council of the European
Union, the European Commission, the United Nations or its Security Council;
 
“legal or administrative action” means any legal proceeding or arbitration and any administrative or regulatory action or investigation;
 
“liability” includes every kind of debt or liability (present or future, certain or contingent), whether incurred as principal or surety or otherwise;
 
“months” shall be construed in accordance with Clause 59.3;
 
the Owners’ “cost of funds” in relation to the Outstanding Principal or any part thereof is a reference to the average cost (determined either on an actual or a notional basis)
which the Owners would incur if they were to fund or finance, from whatever source(s) they may reasonably select, an amount equal to the amount of the Outstanding Principal
or any part thereof for a period equal in length to the Hire Period of the Outstanding Principal or any part thereof;
 
“person” includes any company; any state, political sub-division of a state and local or municipal authority; and any international organisation;
 
“policy”, in relation to any insurance, includes a slip, cover note, certificate of entry or other document evidencing the contract of insurance or its terms;
 
“protection and indemnity risks” means the usual risks covered by a protection and indemnity association which is a member of the International Group of P&I Clubs including
pollution risks, extended passenger cover and the proportion (if any) of any sums payable to any other person or persons in case of collision which are not recoverable under
the hull and machinery policies by reason of the incorporation in them of clause 6 of the International Hull Clauses (1/11/02 or 1/11/03), clause 8 of the Institute Time Clauses
(Hulls)(1/10/83) or clause 8 of the Institute Time Clauses (Hulls) (1/11/1995) or the Institute Amended Running Down Clause (1/10/71) or any equivalent provision;
 
“regulation” includes any regulation, rule, official directive, request or guideline whether or not having the force of law of any governmental, intergovernmental or
supranational body, agency, department or regulatory, self-regulatory or other authority or organisation;
 
“subsidiary” has the meaning given in Clause 59.4;
67
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

“tax” includes any present or future tax, duty, impost, levy or charge of any kind which is imposed by any state, any political sub-division of a state or any local or municipal
authority (including any such imposed in connection with exchange controls), and any connected penalty, interest or fine but excludes any tax in respect of the Owner’ income
under the laws of jurisdiction of the Owners’ incorporation.
 
59.3
Meaning of “month”. A period of one or more “months” ends on the day in the relevant calendar month numerically corresponding to the day of the calendar month on which
the period started (“the numerically corresponding day”), but:
 
(a)
on the Business Day preceding the numerically corresponding day if the numerically corresponding day is not a Business Day; or
 
(b)
on the last Business Day in the relevant calendar month, if the period started on the last Business Day in a calendar month or if the last calendar month of the period
has no numerically corresponding day;
 
and “month” and “monthly” shall be construed accordingly.
 
59.4
Meaning of “subsidiary”. A company (S) is a subsidiary of another company (P) if:
 
(a)
a majority of the issued shares in S (or a majority of the issued shares in S which carry unlimited rights to capital and income distributions) are directly owned by P or
are indirectly attributable to P; or
 
(b)
P has direct or indirect control over a majority of the voting rights attaching to the issued shares of S; or
 
(c)
P has the direct or indirect power to appoint or remove a majority of the directors of S; or
 
(d)
P otherwise has the direct or indirect power to ensure that the affairs of S are conducted in accordance with the wishes of P; or
 
(e)
and any company of which S is a subsidiary is a parent company of S.
 
59.5
In this Charter:
 
(a)
references to a Leasing Document or any other document being in the form of a particular appendix or to any document referred to in the recitals include references to
that form with any modifications to that form which the Owners approve;
 
(b)
references to, or to a provision of, a Leasing Document or any other document are references to it as amended or supplemented, whether before the date of this Charter
or otherwise;
 
(c)
references to, or to a provision of, any law include any amendment, extension, re- enactment or replacement, whether made before the date of this Charter or otherwise;
and
 
(d)
words denoting the singular number shall include the plural and vice versa.
68
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

59.6
Headings. In interpreting a Leasing Document or any provision of a Leasing Document, all clauses, sub-clauses and other headings in that and any other Leasing Document
shall be entirely disregarded.
69
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

SCHEDULE 1 ACCEPTANCE CERTIFICATE
 
SRI  LANKA  SHIPPING  COMPANY  INC.  (the  “Charterers”)  hereby  acknowledges  that  at_______________________ hours on______________________ , there was
delivered to, and accepted by, the Charterers the Vessel known as m.t. “[●]”, registered in the name of HUICAN (TIANJIN) SHIPPING LEASING CO., LTD. (the “Owners”) under the
flag of the [●] with IMO number [●] under a bareboat charter dated______________________(the “Charter”) and made between the Owners and the Charterers and that Delivery (as
defined in the Charter) thereupon took place and that, accordingly, the Vessel is and will be subject to all the terms and conditions contained in the Charter.
 
The Charterers warrant that the representations and warranties made by them in Clause 45 of the Charter remain correct and that no Termination Event (as defined in the Charter) has
occurred and is continuing at the date of this Acceptance Certificate.
 
Name:
 
Title:
 
for and on behalf of
 
SRI LANKA SHIPPING COMPANY INC.
 
Date:
 
70
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

SCHEDULE 2
CONDITIONS PRECEDENT
PART A
The following are the documents referred to in Clause 34.2(g)(i):
 
1
Corporate Authority
 
1.1
A copy of the constitutional documents of each Obligor.
 
1.2
If required, a copy of the resolutions of the board of directors (or equivalent) of each such Obligor:
 
(a)
approving the terms of, and the transactions contemplated by, the Leasing Documents to which it is a party and resolving that it execute the Leasing Documents to which it is a
party;
 
(b)
authorising a specified person or persons to execute the Leasing Documents to which it is a party on its behalf; and
 
(c)
authorising a specified person or persons, on its behalf, to sign and/or dispatch all documents and notices to be signed and/or dispatched by it under, or in connection with, the
Leasing Documents to which it is a party.
 
1.3
If required, an original of the power of attorney of any party to a Leasing Document authorising a specified person or persons to execute the Leasing Documents to which it is a
party.
 
1.4
If required, a specimen of the signature of each person authorised by the resolution referred to in paragraph 1.2 above.
 
1.5
If required, a copy of the resolutions signed by all the holder(s) of the issued shares of any Obligor (except the Sellers and the Guarantor), approving the terms of, and the
transactions contemplated by such Leasing Document.
 
1.6
A certificate of an officer of each Obligor to which it is a party to a Leasing Document to a Leasing Document certifying that each copy document relating to it specified in this
Schedule 2 Part A is correct, complete and in full force and effect as at a date no earlier than the date of this Charter.
 
2
Leasing Documents
 
2.1
Duly executed copies of each Leasing Document (other than the General Assignment, the Manager’s Undertaking, the Shares Security Deed and the Account Security) and of
each document to be delivered under each of them.
 
2.2
Duly executed copies (but undated) of the General Assignment, the Manager’s Undertaking, the Shares Security Deed and the Account Security, and of each document to be
delivered under each of them, except for the acknowledgment by the Account Bank under the Account Security and the acknowledgments by the Initial Sub-Charterer and the
SBC Sellers under the General Assignment.
 
2.3
Evidence that the Operating Account has been opened.
71
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

3
Commercial Invoice
 
3.1
A commercial invoice for the Vessel stating the Purchase Price in the form and substance acceptable to the Owners to be received by the Owners not later than three (3)
Business Days prior to the Prepositioning Date.
 
4
Vessel Documents
 
4.1
A copy of an executed Approved Management Agreement establishing that the Vessel will, as from the Delivery Date, be managed by the Approved Manager.
 
4.2
A copy of the Document of Compliance of the Approved Manager in respect of technical management of the Vessel.
 
4.3
A copy of the Vessel’s class certificate evidencing that the Vessel maintains such classification (free of all overdue recommendations and conditions) as is acceptable to the
Owners.
 
4.4
Copies of the Vessel’s Safety Management Certificate (together with any other details of the applicable safety management system which the Owners require) and of any other
documents required under the ISM Code and the ISPS Code (including without limitation an ISSC and IAPPC).
 
4.5
Confirmation from the Builder that the Vessel has been free of encumbrances and liens during the construction period.
 
5
Legal opinions
 
5.1
An agreed form legal opinion by English legal advisers to the Owners on such matters on the laws of England in relation to the documents listed in paragraphs 2.1 and 2.2 of
Part A of this Schedule, in form and substance acceptable to the Owners.
 
5.2
Agreed forms of legal opinions by lawyers appointed by the Owners on such matters relating to the documents listed in paragraphs 2.1 and 2.2 of Part A of this Schedule,
concerning the laws of the Republic of the Marshall Islands and such other relevant jurisdictions as the Owners may require, in form and substance acceptable to the Owners.
 
6
Vessel Insurances
 
6.1
Evidence that the Vessel is or will be on Delivery insured in the manner required under Clause 38.1.
 
6.2
In respect of the Vessel, agreed form of letters of undertaking and certificates of entry (as the case may be) relating to insurances as set out in Clause 38 acknowledged by the
relevant insurer, insurance broker, protection and indemnity association or war risks association (as the case may be).
 
6.3
In respect of the Vessel, an insurance report by an insurance advisor appointed by the Owners (but at the cost of the Charterers) in an agreed form acceptable to the Owners.
 
7
Initial Sub Charter
 
7.1
A copy of the duly executed Initial Sub-Charter.
 
7.2
Evidence to the satisfaction of the Owners that the Initial Sub-Charterer agrees to pay the charterhire and other amounts due to be paid under the Initial Sub-Charter to the
Operating Account throughout the Charter Period.
72
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

8
Others
 
8.1
A copy of the executed Escrow Agreement.
 
8.2
A copy of a letter issued by the SBC Sellers stating that all amounts due and payable to the SBC Sellers under the Shipbuilding Contract (other than the Shipbuilding Contract
Delivery Instalment) have been paid and that no other disputes or pending claims exist under the Shipbuilding Contract;
 
8.3
A copy of the SBC Sellers’ notice under the Shipbuilding Contract requesting payment of the Shipbuilding Contract Delivery Instalment.
 
8.4
Evidence that all fees, costs and expenses then due from the Charterers to the Owners under the Leasing Documents have been paid to and received by, or will be paid to and
received by, the Owners.
 
8.5
Evidence that any process agent referred to under the Leasing Documents has accepted its appointment.
 
8.6
Copies of the Original Financial Statements.
 
8.7
Such evidence relating to an Obligor as the Buyers may reasonably require for their (or their financiers) to be able to satisfy each of their “know your customer” or similar
identification procedures in relation to the Leasing Documents.
 
8.8
A copy of any other consents, approvals, authorisation or other document, opinion or assurance which the Buyers consider to be reasonably desirable in connection with the
entry into and performance of the transactions contemplated by any of the documents listed in paragraph 2 of Part A of this Schedule or for the validity and enforceability of
such documents.
 
8.9
Such other information and documents as the Owners may reasonably require by giving notice to the Charterers.
73
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

PART B
 
The following are the documents referred to in Clause 34.2(g)(ii):
 
1
Bringdown Certificates
 
1.1
If required, a certificate of an officer of each Obligor to which it is a party to a Leasing Document to a Leasing Document certifying that each copy document relating to it
specified in this Schedule 2 Part A is correct, complete and in full force and effect as at a date no earlier than the Delivery Date.
 
2
Security Documents
 
2.1
Duly executed and dated copies of each of the Leasing Documents and of each document to be delivered under each of them referred to in paragraph 2.2 of Schedule 2 Part A.
 
3
Vessel Documents in relation to Title
 
3.1
Documentary evidence that the Vessel:
 
(a)
has been delivered by the SBC Sellers to the Charterers pursuant to the terms of the Shipbuilding Contract, where such documents shall include, in particular:
 
(i)
the original notarized and if required, legalised copies of the bill of sale and builder’s certificate duly executed by the SBC Sellers (and where executed by an attorney of
the SBC Sellers, together with such original notarized power of attorneys of the SBC Sellers); and
 
(ii)
the original protocol of delivery and acceptance duly executed by the SBC Sellers and the Charterers;
 
(b)
any other document required to be delivered by the SBC Sellers to the Charterers (in their capacity as buyers) on delivery under the terms of the Shipbuilding Contract;
 
(c)
has been delivered by the Charterers to the Sellers pursuant to the terms of the Initial MOA, where such documents shall include, in particular:
 
(i)
the bill of sale in a form recordable in the Flag State, transferring title of the Vessel by the Charterers to the Sellers and stating that the Vessel is free from all mortgages,
encumbrances and liens (whether maritime or otherwise) or any other debts whatsoever, duly notarially attested and legalised or apostilled as may be required by the
Flag State; and
 
(ii)
the original (if required by the Flag State) or a copy of the protocol of delivery and acceptance duly executed by the Charterers and the Sellers;
 
(d)
is or will be definitively and permanently registered in the name of the Owners under the Flag State, in the absolute and unencumbered ownership of the Owners, where such
documents shall include, in particular:
 
(i)
a certificate or transcript or an email confirmation issued by the competent authorities of the Flag State on the date of Delivery evidencing the Sellers’ ownership of the
Vessel and that the Vessel is free from registered encumbrances and mortgages;
74
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

(ii)
the bill of sale in a form recordable in the Flag State, transferring title of the Vessel by the Sellers to the Owners and stating that the Vessel is free from all mortgages,
encumbrances and maritime liens (whether maritime or otherwise) or any other debts whatsoever, duly notarially attested and legalised or apostilled as may be required
by the Flag State;
 
(iii)
the original (if required by the Flag State) or a copy of the protocol of delivery and acceptance duly executed by the Sellers and the Owners; and
 
(iv)
any additional documents as may be required by the competent authorities of the Flag State for the purpose of registering the Vessel in the name of the Owners on the
Delivery Date.
 
4
Initial Sub-Charter
 
4.1
Evidence to the satisfaction of the Owners that the Vessel has been delivered to and accepted by the Initial Sub-Charterer under the Initial Sub Charter on the Delivery Date.
 
5
Others
 
5.1
Evidence that any fees, costs and expenses then due from the Charterers to the Owners under the Leasing Documents have been paid to and received by, or will be paid to and
received by, the Owners, on Delivery of the Vessel.
 
5.2
Such other documents as the Owners may reasonably require by giving notice to the Charterers.
75
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

PART C
 
The following are the documents referred to in Clause 34.2(g)(iii):
 
1
Legal opinions
 
Not later than three (3) Business Days after the Delivery Date, issued signed copies of the legal opinions referred to in paragraphs 5.1 and 5.2 of Schedule 2 Part A.
 
2
Security Documents
 
To the extent not already provided under Part A and Part B of Schedule 2, duly executed acknowledgment by the Account Bank under the Account Security and
acknowledgments by the Initial Sub-Charterer and the SBC Sellers under the General Assignment within the time prescribed under the Account Security and General
Assignment respectively.
 
3
Insurances
 
(a)
Not later than five (5) Business Days after the Delivery Date, receipt of copies of the executed letters of undertaking and certificates of entry (as the case may be) relating to
insurances as set out in Clause 38 acknowledged by the relevant insurer, insurance broker, protection and indemnity association or war risks association (as the case may be),
each in the agreed form under paragraph 6.2 of Schedule 2 Part A.
 
(b)
Not later than ten (10) Business Days after the Delivery Date, the signed insurance report in the form agreed under paragraph 6.3 of Schedule 2 Part A.
 
4
Transcript of Registry
 
(a)
Transcript of Registry issued by the competent authorities of the Flag State on the Delivery Date evidencing the Owners’ ownership of the Vessel.
 
5
Not later than fifteen (15) days after the Delivery Date, originals of the documents required under paragraphs 1.2, 1.3, 1.4, 1.5, 1.6 and 2.1 of Part A and paragraph 1.1 of Part B.
76
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

SCHEDULE 3
 
Hire Payment Date
Outstanding Principal
(USD)
Fixed Charterhire
(USD)
Purchase Obligation
Price (USD)
 
45,391,500.00
 
1st Hire Payment Date
45,180,000.00
211,500.00
N/A
2nd Hire Payment Date
44,968,500.00
211,500.00
N/A
3rd Hire Payment Date
44,757,000.00
211,500.00
N/A
4th Hire Payment Date
44,545,500.00
211,500.00
N/A
5th Hire Payment Date
44,334,000.00
211,500.00
N/A
6th Hire Payment Date
44,122,500.00
211,500.00
N/A
7th Hire Payment Date
43,911,000.00
211,500.00
N/A
8th Hire Payment Date
43,699,500.00
211,500.00
N/A
9th Hire Payment Date
43,488,000.00
211,500.00
N/A
10th Hire Payment Date
43,276,500.00
211,500.00
N/A
 11th Hire Payment Date
43,065,000.00
211,500.00
N/A
 12th Hire Payment Date
42,853,500.00
211,500.00
N/A
 13th Hire Payment Date
42,642,000.00
211,500.00
N/A
 14th Hire Payment Date
42,430,500.00
211,500.00
N/A
 15th Hire Payment Date
42,219,000.00
211,500.00
N/A
 16th Hire Payment Date
42,007,500.00
211,500.00
N/A
 17th Hire Payment Date
41,796,000.00
211,500.00
N/A
 18th Hire Payment Date
41,584,500.00
211,500.00
N/A
 19th Hire Payment Date
41,373,000.00
211,500.00
N/A
77
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

 20th Hire Payment Date
41,161,500.00
211,500.00
N/A
 21st Hire Payment Date
40,950,000.00
211,500.00
N/A
 22nd Hire Payment Date
40,738,500.00
211,500.00
N/A
 23rd Hire Payment Date
40,527,000.00
211,500.00
N/A
 24th Hire Payment Date
40,315,500.00
211,500.00
N/A
 25th Hire Payment Date
40,104,000.00
211,500.00
N/A
 26th Hire Payment Date
39,892,500.00
211,500.00
N/A
 27th Hire Payment Date
39,681,000.00
211,500.00
N/A
 28th Hire Payment Date
39,469,500.00
211,500.00
N/A
 29th Hire Payment Date
39,258,000.00
211,500.00
N/A
 30th Hire Payment Date
39,046,500.00
211,500.00
N/A
31st Hire Payment Date
38,835,000.00
211,500.00
N/A
 32nd Hire Payment Date
38,623,500.00
211,500.00
N/A
33rd Hire Payment Date
38,412,000.00
211,500.00
N/A
34th Hire Payment Date
38,200,5011.00
211,500.00
N/A
35th Hire Payment Date
37,989,000.00
211,500.00
N/A
 36th Hire Payment Date
37,777,500.00
211,500.00
N/A
37th Hire Payment Date
37,566,000.00
211,500.00
N/A
38th Hire Payment Date
37,354,500.00
211,500.00
N/A
39th Hire Payment Date
37,143,000.00
211,500.00
N/A
40th Hire Payment Date
36,931,500.00
211,500.00
N/A
41st Hire Payment Date
36,720,000.00
211,500.00
N/A
78
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

 42nd Hire Payment Date
36,508,500.00
211,500.00
N/A
43rd Hire Payment Date
36,297,000.00
211,500.00
N/A
44th Hire Payment Date
36,085,500.00
211,500.00
N/A
45th Hire Payment Date
35,874,000.00
211,500.00
N/A
46th Hire Payment Date
35,662,500.00
211,500.00
N/A
47th Hire Payment Date
35,451,000.00
211,500.00
N/A
 48th Hire Payment Date
35,239,500.00
211,500.00
N/A
49th Hire Payment Date
35,028,000.00
211,500.00
N/A
 50th Hire Payment Date
34,816,500.00
211,500.00
N/A
 51st Hire Payment Date
34,605,000.00
211,500.00
N/A
 52nd Hire Payment Date
34,393,500.00
211,500.00
N/A
 53rd Hire Payment Date
34,182,000.00
211,500.00
N/A
 54th Hire Payment Date
33,970,500.00
211,500.00
N/A
 55th Hire Payment Date
33,759,000.00
211,500.00
N/A
 56th Hire Payment Date
33,547,500.00
211,500.00
N/A
 57th Hire Payment Date
33,336,000.00
211,500.00
N/A
 58th Hire Payment Date
33,124,500.00
211,500.00
N/A
 59th Hire Payment Date
32,913,000.00
211,500.00
N/A
60th Hire Payment Date
32,701,500.00
211,500.00
N/A
61st Hire Payment Date
32,490,000.00
211,500.00
N/A
 62nd Hire Payment Date
32,278,500.00
211,500.00
N/A
63rd Hire Payment Date
32,067,000.00
211,500.00
N/A
79
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

 64th Hire Payment Date
31,855,500.00
211,500.00
N/A
65th Hire Payment Date
31,644,000.00
211,500.00
N/A
 66th Hire Payment Date
31,432,500.00
211,500.00
N/A
 67th Hire Payment Date
31,221,000.00
211,500.00
N/A
 68th Hire Payment Date
31,009,500.00
211,500.00
N/A
 69th Hire Payment Date
30,798,000.00
211,500.00
N/A
 70th Hire Payment Date
30,586,500.00
211,500.00
N/A
 71st Hire Payment Date
30,375,000.00
211,500.00
N/A
 72nd Hire Payment Date
30,163,500.00
211,500.00
N/A
73rd Hire Payment Date
20,952,000.00
211,500.00
N/A
74th Hire Payment Date
29,740,500.00
211,500.00
N/A
 75th Hire Payment Date
29,529,000.00
211,500.00
N/A
 76th Hire Payment Date
29,317,500.00
211,500.00
N/A
 77th Hire Payment Date
29,106,000.00
211,500.00
N/A
 78th Hire Payment Date
28,894,500.00
211,500.00
N/A
 79th Hire Payment Date
28,683,000.00
211,500.00
N/A
 80th Hire Payment Date
28,471,500.00
211,500.00
N/A
 81st Hire Payment Date
28,260,000.00
211,500.00
N/A
 82nd Hire Payment Date
28,048,500.00
211,500.00
N/A
 83rd Hire Payment Date
27,837,000.00
211,500.00
N/A
84th Hire Payment Date
27,625,500.00
211,500.00
N/A
85th Hire Payment Date
27,414,000.00
211,500.00
N/A
80
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

86th Hire Payment Date
27,202,500.00
211,500.00
N/A
87th Hire Payment Date
26,991,000.00
211,500.00
N/A
88th Hire Payment Date
26,779,500.00
211,500.00
N/A
89th Hire Payment Date
26,568,000.00
211,500.00
N/A
90th Hire Payment Date
26,356,500.00
211,500.00
N/A
91st Hire Payment Date
26,145,000.00
211,500.00
N/A
92nd Hire Payment Date
25,933,500.00
211,500.00
N/A
93rd Hire Payment Date
25,722,000.00
211,500.00
N/A
94th Hire Payment Date
25,510,500.00
211,500.00
N/A
95th Hire Payment Date
25,299,000.00
211,500.00
N/A
96th Hire Payment Date
25,087,500.00
211,500.00
N/A
97th Hire Payment Date
24,876,000.00
211,500.00
N/A
98th Hire Payment Date
24,664,500.00
211,500.00
N/A
99th Hire Payment Date
24,453,000.00
211,500.00
N/A
100th Hire Payment Date
24,241,500.00
211,500.00
N/A
101st Hire Payment Date
24,030,000.00
211,500.00
N/A
102nd Hire Payment Date
23,818,500.00
211,500.00
N/A
103rd Hire Payment Date
23,607,000.00
211,500.00
N/A
104th Hire Payment Date
23,395,500.00
211,500.00
N/A
105th Hire Payment Date
23,184,000.00
211,500.00
N/A
106th Hire Payment Date
22,972,500.00
211,500.00
N/A
107th Hire Payment Date
22,761,000.00
211,500.00
N/A
81
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

 108th Hire Payment Date
22,549,500.00
211,500.00
N/A
 109th Hire Payment Date
22,338,000.00
211,500.00
N/A
110th Hire Payment Date
22,126,500.00
211,500.00
N/A
 111th Hire Payment Date
21,915,000.00
211,500.00
N/A
 112th Hire Payment Date
21,703,500.00
211,500.00
N/A
 113th Hire Payment Date
21,492,000.00
211,500.00
Ν/Α
114th Hire Payment Date
21,280,500.00
211,500.00
Ν/Α
115th Hire Payment Date
21,069,000.00
211,500.00
N/A
116th Hire Payment Date
20,857,500.00
211,500.00
N/A
117th Hire Payment Date
20,646,000.00
211,500.00
N/A
118th Hire Payment Date
20,434,500.00
211,500.00
N/A
119th Hire Payment Date
20,223,000.00
211,500.00
Ν/A
120th Hire Payment Date
0
211,500.00
20,011,500.00
82
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

EXECUTION PAGE
 
OWNERS
 
 
 
 
 
 
SIGNED BY
 
)
for and on behalf of
 
)
HUICAN(TITANJIN) SHIPPING LEASING CO., LTD.
)
in the presence of
9/F, No. 1 Building, No.99 East
)
Witness’ signature:
Witness’ name:
Witness’ address:
)
)
)
Zhang Xinhang
 
Jialingajiang Street, Nanjing, Jiangsu
 
Attorney-in-fact
 
Province, P.R. China
 
 
CHARTERERS
 
 
 
SIGNED BY
 
)
attorney-in-fact
 
)
for and on behalf of
 
)
SRI LANKA SHIPPING COMPANY INC.
)
in the presence of
Witness’s signature:
Witness’s name:
Witness’ address:
)
)
)
)
Andreas Nikolaos
Michalopoulos
83
SINGAPORE/91403408v9
JSFL Performance - BBC Additional Clauses

Exhibit 4.30
 EXECUTION VERSION
Dated      4 March 2025    
PERFORMANCE SHIPPING INC.
 as Guarantor
-and-
HUICAN (TIANJIN) SHIPPING LEASING CO., LTD.
as Owner
GUARANTEE
 
relating to a Bareboat Charter in respect of one (1) product tanker with hull number H1596
dated 24 October 2024
 
WATSON FARLEY
&
WILLIAMS

 
INDEX
 
Clause
 
Page
 
 
 
1
INTERPRETATION
1
 
 
 
2
GUARANTEE
2
 
 
 
3
LIABILITY AS PRINCIPAL AND INDEPENDENT DEBTOR
3
 
 
 
4
EXPENSES
5
 
 
 
5
ADJUSTMENT OF TRANSACTIONS
5
 
 
 
6
PAYMENTS
5
 
 
 
7
INTEREST
6
 
 
 
8
ENFORCEMENT
6
 
 
 
9
REPRESENTATIONS AND WARRANTIES
6
 
 
 
10
UNDERTAKINGS
8
 
 
 
11
FINANCIAL COVENANTS
11
 
 
 
12
JUDGMENTS AND CURRENCY INDEMNITY
13
 
 
 
13
SET-OFF
13
 
 
 
14
SUPPLEMENTAL
13
 
 
 
15
ASSIGNMENT
15
 
 
 
16
NOTICES
15
 
 
 
17
INVALIDITY OF LEASING DOCUMENTS
16
 
 
 
18
CONFIDENTIALITY
16
 
 
 
19
INCORPORATION OF BAREBOAT CHARTER PROVISIONS
17
 
 
 
20
GOVERNING LAW AND ARBITRATION
17
 
 
 
SCHEDULE 1  FORM OF COMPLIANCE CERTIFICATE
 19
 
 
 
EXECUTION PAGE
20 

THIS GUARANTEE is made on          4 March 2025   .
BETWEEN
 
(1)
PERFORMANCE SHIPPING INC., a corporation incorporated and existing under the laws of the Republic of the Marshall Islands with registration number 38911 whose
registered address is atTrust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 (the “Guarantor”); and
(2)
HUICAN (TIANJIN) SHIPPING LEASING CO., LTD., a corporation incorporated under the laws of the People’s Republic of China and whose registered office is Room 202, No.
6262, Aozhou Road, (Dongjiang Comprehensive Free Trade Zone), Tianjin Pilot Free Trade Zone (No. 10214, Dongjiang Business Secretary Service Co., Ltd. Free Trade Zone)
(the “Owner”, which expression includes its successors and assigns).
 
BACKGROUND
(A)
By a memorandum of agreement dated   4 March 2025   {as amended and supplemented from time to time, the “Initial MOA”) and made between (i) Sri Lanka Shipping Company
Inc. (the “Bareboat Charterer”) as sellers and (ii) Mustique Shipping Company Inc. of the Republic of the Marshall Islands (the “Sellers”) as buyers, the Bareboat Charterer
has agreed to sell and deliver and the Sellers has agreed to purchase and accept the legal and beneficial title of the Vessel pursuant to the terms and conditions contained
therein.
 
(B)
By a memorandum of agreement dated   24 October 2024    (as amended and supplemented from time to time, the “MOA”) and made between (i) the Sellers as sellers and (ii) the
Owner as buyers, the Sellers has agreed to sell and deliver and the Owner has agreed to purchase and accept the legal and beneficial title of the Vessel pursuant to the terms and
conditions contained therein.
(C)
By a bareboat charterparty dated    24 October 2024    (with all its annexes and side letters and as further amended and supplemented from time to time, collectively, the
“Bareboat Charter”) and made between (i) the Bareboat Charterer as bareboat charterers and (ii) the Owner as owners, the Owner has agreed to bareboat charter the Vessel to
the Bareboat Charterer pursuant to the terms and conditions contained therein.
 
(D)
It is one of the conditions precedent to the chartering of the Vessel by the Owner to the Bareboat Charterer under the Bareboat Charter that the Guarantor enters into this
Guarantee.
(E)
This Guarantee is the Guarantee referred to in the Bareboat Charter.
IT IS AGREED as follows:
 
1
INTERPRETATION
 
1.1
Defined expressions. Words and expressions defined in the Bareboat Charter shall have the same meanings when used in this Guarantee unless the context otherwise requires.
 
1.2
Construction of certain terms.    In this Guarantee:
 
“bankruptcy” includes a liquidation, receivership or administration and any form of suspension of payments, arrangement with creditors or reorganisation under any corporate
or insolvency law of any country.
“Compliance Certificate” means a certificate in the form set out in Schedule 1 (Form of Compliance Certificate) or in any other form agreed between the Guarantor and the
Owner.
 
 1
 
 
 
JSFL Performance - Guarantee 
SINGAPORE/91408044vll

“FATCA” means:
(a)
sections 1471 to 1474 of the Code or any associated regulations;
 
(b)
any treaty, law or regulation of any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction, which (in either case)
facilitates the implementation of any law or regulation referred to in paragraph (a) above; or
(c)
any agreement pursuant to the implementation of any treaty, law or regulation referred to in paragraphs (a) or (b) above with the IRS, the US government or any
governmental or taxation authority in any other jurisdiction.
 
“FATCA Deduction” means a deduction or withholding from a payment under this Guarantee required by or under FATCA.
 
“FATCA Exempt Party” means a Party that is entitled under FATCA to receive payments free from any FATCA Deduction.
 
“IRS” means the United States Internal Revenue Service or any successor taxing authority or agency of the United States government.
“Party” means a party to this Guarantee.
“Secured Liabilities” means all present and future obligations and liabilities (whether actual or contingent and whether owed jointly or severally or in any other capacity
whatsoever) of the Bareboat Charterer to the Owner under or in connection with any Leasing Documents or any judgment relating to any Leasing Documents and for this
purpose, there shall be disregarded any total or partial discharge of these liabilities, or variation of their terms, which is effected by, or in connection with, any bankruptcy,
liquidation, arrangement or other procedure under the insolvency laws of any country.
“Security Period” means the period commencing on the date hereof and ending on the date on which the Owner is satisfied that the Secured Liabilities have been irrevocably
and unconditionally paid and discharged in full in accordance with the terms of the Bareboat Charter and the other Leasing Documents.
 
2
GUARANTEE
2.1
Guarantee and indemnity.  The Guarantor unconditionally and irrevocably:
 
(a)
guarantees the due payment of all amounts payable by the Bareboat Charterer under or in connection with the Leasing Documents (or any of them) to which it is a party;
 
(b)
guarantees the punctual performance by the Bareboat Charterer of all its obligations under or in connection with the Leasing Documents (or any of them) to which it is a party;
(c)
undertakes to pay to the Owner, immediately on the Owner’s demand as if it was the principal obligor, any such amount which is not paid by the Bareboat Charterer when due
and payable under or in connection with the Leasing Documents (or any of them) to which the Bareboat Charterer is a party; and
 
(d)
undertakes to fully indemnify, as an independent and primary obligation, the Owner immediately on its demand in respect of all claims, expenses, liabilities, costs and losses
which are made or brought against or incurred by the Owner as a result of or in connection with any obligation or liability of the Bareboat Charterer under the Leasing
Documents to which the Bareboat Charterer is a party and/or any obligation or liability guaranteed by the Guarantor being or becoming unenforceable, invalid, void or illegal;
and the amount recoverable under this indemnity shall be equal to the amount which the Owner would otherwise have been entitled to recover under the Leasing Documents to
which the Bareboat Charterer is a party.
 
 2
 
 
 
JSFL Performance - Guarantee 
SINGAPORE/91408044vll

2.2
No limit on number of demands. The Owner may serve more than one demand under Clause 2.1 (Guarantee and indemnity).
2.3
Guarantee of whole amount.
 
This Guarantee shall be construed and take effect as a guarantee of all amounts due to the Owner under the Leasing Documents (or any of them) to which the Bareboat
Charterer is a party.
 
3
LIABILITY AS PRINCIPAL AND INDEPENDENT DEBTOR
3.1
Principal and independent debtor. The Guarantor shall be liable under this Guarantee as a principal and independent debtor and accordingly it shall not have, as regards this
Guarantee, any of the rights or defences of a surety.
 
3.2
Waiver of defences.  The obligations of the Guarantor under this Guarantee and in respect of any Leasing Document will not be affected or discharged by an act, omission,
matter or thing which, but for this Clause 3.2 (Waiver of defences), would reduce, release or prejudice any of its obligations under this Guarantee or in respect of any Security
Interest created or intended to be created by any of the Leasing Documents (without limitation and whether or not known to it or the Owner) including without limitation:
 
(a)
any time, waiver or consent granted to, or composition with, the Bareboat Charterer or other person;
 
(b)
the release of any other Obligor or any other person under the terms of any composition or arrangement with any creditor of any member of the Group;
 
(c)
the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect or delay in perfecting, take up or enforce, any rights against, or security over
assets of, the Bareboat Charterer or other person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to
realise the full value of any security;
(d)
any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of the Bareboat Charterer or any other person;
 
(e)
any amendment, novation, supplement, extension, restatement (however fundamental and whether or not more onerous) or replacement of any Leasing Document or any other
document or security;
 
(f)
any unenforceability, illegality or invalidity of any obligation of any person under any Leasing Document or any other document or security; or
(g)
any insolvency or similar proceedings.
3.3
Reinstatement. If any discharge, release or arrangement (whether in respect of the obligations of the Bareboat Charterer or any security for those obligations or otherwise) is
made by the Owner in whole or in part on the basis of any payment, security or other disposition which is avoided or must be restored in insolvency, liquidation, administration
or otherwise, without limitation, then the liability of the Guarantor under this Guarantee will continue or be reinstated as if the discharge, release or arrangement had not
occurred.
 
 3
 
 
 
JSFL Performance - Guarantee 
SINGAPORE/91408044vll

3.4
Immediate recourse. The Guarantor waives any right it may have of first requiring the Owner to proceed against or enforce any other rights or security or claim payment from
any person (including without limitation to commence any proceedings under any Leasing Document or to enforce any Security Interest) before claiming or commencing
proceedings under this Guarantee. This waiver applies irrespective of any law or any provision of a Leasing Document to the contrary.
3.5
Appropriations
Until all amounts which may be or become payable by the Bareboat Charterer under or in connection with the Leasing Documents have been irrevocably paid in full, the Owner
(or any trustee or agent on its behalf) may:
(a)
refrain from applying or enforcing any other moneys, security or rights held or received by the Owner (or any trustee or agent on its behalf) in respect of those amounts, or
apply and enforce the same in such manner and order as it sees fit (whether against those amounts or otherwise) and the Guarantor shall not be entitled to the benefit of the
same; and
 
(b)
hold in an interest-bearing suspense account any moneys received from the Guarantor or on account of the Guarantor’s liability under this Guarantee.
 
3.6
Deferral of Guarantor’s rights
All rights which the Guarantor at any time has (whether in respect of this Guarantee, a mortgage or any other transaction) against the Bareboat Charterer, any other Obliger or
their respective assets shall be fully subordinated to the rights of the Owner under the Leasing Documents and until the end of the Security Period and unless the Owner
otherwise directs, the Guarantor will not exercise any rights which it may have (whether in respect of any Leasing Document to which it is a party or any other transaction) by
reason of performance by it of its obligations under the Leasing Documents or by reason of any amount being payable, or liability arising, under this Guarantee:
(a)
to be indemnified by an Obligor;
 
(b)
to claim any contribution from any third party providing security for, or any other guarantor of, any Obligor’s obligations under the Leasing Documents;
 
(c)
to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Owner under the Leasing Documents or of any other guarantee or
security taken pursuant to, or in connection with, the Leasing Documents by the Owner;
 
(d)
to bring legal or other proceedings for an order requiring any Obliger to make any payment, or perform any obligation, in respect of which the Guarantor has given a guarantee,
undertaking or indemnity under Clause 2.1 (Guarantee and indemnity);
 
(e)
to exercise any right of set-off against any Obligor; and/or
(f)
to claim or prove as a creditor of any Obliger in competition with the Owner.
 
If the Guarantor receives any benefit, payment or distribution in relation to such rights it shall hold that benefit, payment or distribution to the extent necessary to enable all
amounts which may be or become payable to the Owner by the Obliger under or in connection with the Leasing Documents to be repaid in full on trust for the Owner and shall
promptly pay or transfer the same to the Owner, for application in accordance with clause 54A of the Bareboat Charter.
 
 4
 
 
 
JSFL Performance - Guarantee 
SINGAPORE/91408044vll

3.7
Additional security. This Guarantee is in addition to and is not in any way prejudiced by any other guarantee or security now or subsequently held by the Owner.
3.8
Guarantor Intent.
 
Without prejudice to the generality of Clause 3.2 (Waiver of defences), the Guarantor expressly confirms that it intends that this Guarantee and any Security Interest created
by it under any Leasing Document shall extend from time to time to any (however fundamental) variation, increase, extension or addition of or to any of the Leasing
Documents.
 
4
EXPENSES
4.1
Costs of preservation of rights, enforcement etc. The Guarantor shall pay to the Owner on its demand the amount of all expenses (including, without limitation, out of pocket
expenses and legal fees) incurred by the Owner in connection with the enforcement of, or the preservation of any rights under this Guarantee or any other Leasing Document,
including any advice, claim or proceedings relating to this Guarantee or any other Leasing Document.
 
4.2
Fees and expenses payable under Leasing Documents. Clause 4.1 (Costs of preservation of rights, enforcement etc.) is without prejudice to the Guarantor’s liabilities in respect
of the Bareboat Charterer’s obligations under clause 41 (fees and expenses) of the Bareboat Charter and under similar provisions of any other Leasing Documents.
 
5
ADJUSTMENT OF TRANSACTIONS
5.1
Reinstatement of obligation to pay. The Guarantor shall pay to the Owner on its demand any amount which the Owner is required, or agrees, to pay pursuant to any claim by, or
settlement with, a trustee in bankruptcy of any other Obligor on the ground that any Leasing Document to which that Obligor is a party, or a payment by that Obligor relating to
any Leasing Document, was invalid or on any similar ground.
6
PAYMENTS
6.1
Method of payments. Any amount due under this Guarantee shall be paid:
 
(a)
in immediately available funds;
(b)
to such account as the Owner may from time to time notify to the Guarantor;
 
(c)
without any form of set-off, cross-claim or condition; and
(d)
free and clear of any tax deduction or withholding for or on account of any tax payable except a tax deduction or withholding which the Guarantor is required by law to make.
6.2
Grossing-up for taxes. If the Guarantor is required by law to make a tax deduction, the amount due to the Owner shall be increased by the amount necessary to ensure that the
Owner receives and retains a net amount which, after the tax deduction, is equal to the full amount that it would otherwise have received.
6.3
In this Clause “tax deduction” means any deduction or withholding for or on account of any present or future tax, other than a FATCA Deduction.
 
6.4
Indemnity and evidence of payment of taxes.
(a)
The Guarantor shall fully indemnify the Owner on the Owner’s demand in respect of all claims, expenses, liabilities and losses incurred by the Owner by reason of any failure of
the Guarantor to make any tax deduction or by reason of any increased payment not being made on the due date for such payment in accordance with Clause 6.2 (Grossing-up
for taxes).
 
 5
 
 
 
JSFL Performance - Guarantee 
SINGAPORE/91408044vll

(b)
Within twenty (20) Business Days after making tax deduction, the Guarantor shall deliver to the Owner any receipts, certificates or other documentary evidence satisfactory to
the Owner that the tax had been paid to the appropriate taxation authority.
 
7
INTEREST
 
7.1
Accrual of interest. Any amount due under this Guarantee shall carry interest following the date on which the Owner demands payment of it until it is actually paid, unless
interest on that same amount also accrues under the relevant Leasing Document.
7.2
Calculation of interest. Interest under this Guarantee shall be calculated and accrue in the same way as interest under clause 36.9 of the Bareboat Charter, as applicable.
 
7.3
Guarantee extends to interest payable under Leasing Documents. For the avoidance of doubt, it is confirmed that this Guarantee covers all interest payable under the Leasing
Documents.
 
8
ENFORCEMENT
8.1
No requirement to commence proceedings against any other Obligor. The Owner will not need to commence any proceedings under, or enforce any Security Interest created by
any other Leasing Document before claiming or commencing proceedings under this Guarantee.
8.2
Conclusive evidence of certain matters. As against the Guarantor:
 
(a)
any judgment or order of a court in any Relevant jurisdiction or award of an arbitration tribunal in London in connection with Bareboat Charter; and
(b)
any statement or admission of the Bareboat Charterer in connection with the Bareboat Charter,
 
shall be binding and conclusive as to all matters of fact and law to which it relates.
 
8.3
Suspense account.  The Owner may, for the purpose of claiming or proving in an insolvency of the Bareboat Charterer, place any sum received or recovered under or by virtue of
this Guarantee on a separate interest bearing suspense or other nominal account without applying it in satisfaction of the Bareboat Charterer’s or Guarantor’s obligations under
any Leasing Document.
 
9
REPRESENTATIONS AND WARRANTIES
9.1
General. The Guarantor represents and warrants to the Owner, as at the date of this Guarantee and throughout the Security Period, as follows.
 
9.2
Status.
 
(a)
The Guarantor is duly incorporated and validly existing and, if applicable, in good standing under the laws of the Republic of the Marshall Islands.
 
(b)
The Guarantor is not a US Tax Obligor and has not established a place of business in the United States of America.
 
9.3
Corporate power. The Guarantor has the corporate capacity, and has taken all corporate actions and obtained all consents, approvals, authorisations, licenses or permits
necessary for it:
 
(a)
to execute this Guarantee or any other Leasing Document to which it is a party; and
 
 6
 
 
 
JSFL Performance - Guarantee 
SINGAPORE/91408044vll

(b)
to make all the payments contemplated by, and to comply with and perform its obligations under this Guarantee or any other Leasing Document to which it is a party.
 
9.4
Consents in force. All the consents, approvals, authorisations, licenses or permits referred to in Clause 9.3 (Corporate power) remain in force and nothing has occurred which
makes any of them liable to revocation.
 
9.5
Legal validity. This Guarantee and the other Leasing Documents to which it is a party constitute the Guarantor’s legal, valid and binding obligations enforceable against the
Guarantor in accordance with their terms subject to any relevant insolvency laws affecting creditors’ rights generally.
 
9.6
No third party Security Interests. Without limiting the generality of Clause 9.5 (Legal validity), at the time of the execution and delivery of this Guarantee and any other
Security Document to which the Guarantor is a party:
(a)
the Guarantor will have the right to create all the Security Interests which the Security Document purports to create; and
(b)
no third party will have any Security Interest (except for Permitted Security Interests) or any other interest, right or claim over, in or in relation to any asset to which any such
Security Interest, by its terms, relates.
9.7
No conflicts. The entry into and performance by the Guarantor of this Guarantee and the other Leasing Document to which it is a party and the transactions contemplated by,
each Leasing Document to which it is a party do not and will not conflict with:
 
(a)
any law or regulation applicable to it; or
 
(b)
the constitutional documents of the Guarantor; or
 
(c)
any agreement or instrument binding upon it or constitute a default or termination event (however described) under any such agreement or instrument.
 
9.8
No withholding taxes. All payments which the Guarantor is liable to make under this Guarantee and the other Leasing Documents to which it is a party may be made without
deduction or withholding for or on account of any tax payable under any laws of its jurisdiction of incorporation.
 
9.9
No default. No Termination Event or Potential Termination Event is continuing or might reasonably be expected to result from the entry into and performance of this Guarantee or
any other Leasing Document.
9.10
Information. All information which has been provided in writing by or on behalf of the Guarantor to the Owner in connection with any Leasing Document satisfies the
requirements of Clause 10.2 (Information provided to be accurate); all audited and unaudited accounts which have been so provided satisfies the requirements of Clause 10.4
(Form of financial statements); and there has been no material adverse effect in the financial position or state of affairs of the Guarantor from that disclosed in the latest of those
accounts.
 
9.11
No litigation. No legal or administrative action involving the Guarantor which involves claim(s) amounting in aggregate to more than US$5,000,000 or which has or is likely to
have a Material Adverse Effect (other than those publicly known and available prior to the execution of this Guarantee and the Bareboat Charter) has been commenced or taken.
 
 
 7
 
 
 
JSFL Performance - Guarantee 
SINGAPORE/91408044vll

9.12
Sanction.
(a)
The Guarantor and each other Obligor and their respective Affiliates, and as at the date of this Guarantee, their respective directors, officers, employees and agents are in
compliance with all Sanctions laws.
(b)
Neither the Guarantor nor any other Obligors or their respective Affiliates, and as at the date of this Guarantee, none of their respective directors, officers, employees or agents:
 
(i)
is a Restricted Person;
 
(ii)
is owned or controlled by or acting directly or indirectly on behalf of or for the benefit of a Restricted Person;
(iii)
owns or controls, or is or becomes an Affiliate of, a Restricted Person;
 
(iv)
has a Restricted Person serving as a director, officer or an employee; or
(v)
has received notice or is aware of any claim, action, suit, proceedings or investigations against any of them with respect of Sanctions.
 
9.13
Anti-Money Laundering and other Laws. The Guarantor and each other Obligor is not in breach of Anti-Money Laundering Laws, Anti-Terrorism Financing Laws and/or
Business Ethics Laws and each Obligor has instituted and maintained systems, controls, policies and procedures designed to:
 
(i)
prevent and detect incidences of bribery and corruption, money-laundering and terrorism financing; and
(ii)
promote and achieve compliance with Anti-Money Laundering Laws, Anti-Terrorism Financing Laws and Business Ethics Laws.
9.14
Choice of law. The choice of governing law as stated in this Guarantee or each other Leasing Document to which the Guarantor is a party and the agreement by the relevant
parties thereto to refer disputes to the relevant courts or tribunals as stated in such document are valid and binding against such parties.
 
9.15
Pari passu. The obligations of the Guarantor under this Guarantee and each other Leasing Document to which Guarantor is a party, are the direct, general and unconditional
obligations of the Guarantor and rank at least pari passu with all other present and future unsecured and unsubordinated creditors of it save for any obligation which is
mandatorily preferred by law and not by virtue of any contract.
 
9.16
Provisions of Leasing Documents. The Guarantor is fully familiar with and agrees with all provisions of the Leasing Documents to which the Bareboat Charterer is a party.
 
9.17
No waiver.  No oral or written statement has been made to the Guarantor by or on behalf of the Owner which could be construed as a waiver of any provisions of this Guarantee
or a statement of intention not to enforce this Guarantee in accordance with its terms.
10
UNDERTAKINGS
10.1
General. The Guarantor undertakes with the Owner to comply with the following provisions of this Clause 10 (Undertakings) at all times during the Security Period, except as
the Owner may otherwise permit.
10.2
Information provided to be accurate. All financial and other information which is provided in writing by or on behalf of the Guarantor under or in connection with this Guarantee
will be true and not misleading and will not omit any material fact or consideration.
 
 8
 
 
 
JSFL Performance - Guarantee 
SINGAPORE/91408044vll

10.3
Provision of financial statements. The Guarantor will send to the Owner:
(a)
as soon as possible, but in no event later than one hundred and eighty (180) days after the end of each financial year of the Guarantor, the audited annual financial statements of
the Guarantor; and
(b)
as soon as possible, but in no event later than ninety {90) days after the end of each half year of the Guarantor, the unaudited semi-annual financial statements of the Guarantor.
 
10.4
Form of financial statements. All accounts (audited and unaudited) delivered under Clause 10.3 (Provision of financial statements) will:
 
(a)
be prepared in accordance with all applicable laws and generally accepted accounting principles consistently applied;
 
(b)
give a true and fair view of (if audited) or fairly representing (if unaudited) the state of affairs of the Guarantor at the date of those accounts and of their profit for the period to
which those accounts relate;
 
(c)
fully disclose or provide for all significant liabilities of the Guarantor and its subsidiaries; and
(d)
if not in the English language, be accompanied by an English translation duly certified as to its correctness.
 
10.5
Shareholder and creditor notices. The Guarantor will, after the occurrence of a Termination Event or a Potential Termination Event, provide the Owner copies of all notices and
minutes relating to any of its extraordinary shareholders’ meeting which are despatched to the Guarantor’s shareholders or creditors or any class of them.
 
10.6
Consents. The Guarantor will maintain in force and promptly obtain or renew, and will, upon the request of the Owner, promptly send certified copies to the Owner of, all
consents required:
 
(a)
for the Guarantor to perform its obligations under this Guarantee and any other Leasing Document to which it is a party; and
(b)
for the validity or enforceability of this Guarantee and any other Leasing Document to which it is a party,
 
and the Guarantor will comply with the terms of all such consents.
 
10.7
Maintenance of Security Interests.  The Guarantor will:
(a)
at its own cost, do all that it reasonably can to ensure that any Leasing Document to which it is a party validly creates the obligations and the Security Interests which it
purports to create; and
(b)
without limiting the generality of paragraph (a) above, at its own cost, promptly register, file, record or enrol any Leasing Document to which it is a party with any court or
authority in all Relevant Jurisdictions, pay any stamp duty, registration or similar tax in all Relevant Jurisdictions in respect of any Leasing Document to which it is a party, give
any notice or take any other step which, is or has become necessary or desirable for any such Leasing Document to which it is a party to be valid, enforceable or admissible in
evidence or to ensure or protect the priority of any Security Interest which it creates.
 
 
 9
 
 
 
JSFL Performance - Guarantee 
SINGAPORE/91408044vll

10.8
Notification of litigation. The Guarantor will provide, and will procure that each other Obligor (other than the Third Party Manager) and will use their best endeavours to procure
that the Third Party Manager provides, the Owner, prior to the occurrence of a Termination Event, at the Owner’s reasonable request and after the occurrence of a Termination
Event, from time to time, with details of any legal, arbitral or administrative action, proceedings or investigations involving the Guarantor or such other Obliger as soon as such
action is instituted or it becomes apparent to the Guarantor that it is likely to be instituted.
 
10.9
Notification of default. The Guarantor will notify the Owner as soon as practicable the Guarantor has become aware of:
 
(a)
the occurrence of a Termination Event or a Potential Termination Event; or
 
(b)
any matter which indicates that a Termination Event or a Potential Termination Event may have occurred,
and will thereafter keep the Owner fully up-to-date with all developments.
 
10.10
Maintenance of status. The Guarantor will maintain its separate corporate existence as a corporation and remain in good standing under the laws of the Republic of the Marshall
Islands.
10.11
Negative Pledge. The Guarantor shall procure that the Bareboat Charterer will not, create, assume or permit to exist any Security Interest of any kind over any of the Bareboat
Charterer’s assets present or future except for Permitted Security Interests.
10.12
Pari passu. The Guarantor shall procure that its liabilities under this Guarantee will rank at least pari passu with all its other present and future unsecured liabilities, except for
liabilities which are mandatorily preferred by law.
 
10.13
No disposal of assets, change of business. The Guarantor:
 
(a)
shall not make any substantial change to the nature of its business or its corporate structure from that existing at the date of this Guarantee; and
(b)
shall procure that the Bareboat Charterer will not sell, transfer, lease (other than in relation to the chartering of the Vessel under an Approved Sub-charter) or otherwise dispose
any of its assets, whether by one transaction or a number of transactions, whether related or not, except in the usual course of its trading operations.
10.14
No payment of dividend. The Guarantor shall not declare, make or pay, and shall procure that the Bareboat Charterer will not declare, make or pay, any dividend or other
distribution (or interest on any unpaid dividend or other distribution) (whether in cash or in kind) on or in respect of its authorised and issued shares (including any class of its
share) following the occurrence of a Termination Event which is continuing or which would result in a Termination Event.
10.15
No merger etc. The Guarantor shall not, and shall procure that no other Obligor will, enter into any form of merger, demerger, sub-division, amalgamation or other reorganisation,
consolidation, corporate reconstruction or change of ownership.
10.16
Sanctions. The Guarantor shall comply, and shall procure that each other Obligor complies, with all laws and regulations in respect of Sanctions, and in particular, they shall and
shall procure that each of the other Obligors implement and maintain in effect policies and procedures designed to promote and ensure compliance by them and their respective
directors, officers and employees with Sanctions laws and regulations implemented from time to time.
10.17
Compliance with Anti-Money Laundering Laws and other Laws.
 
The Guarantor:
 
 10
 
 
 
JSFL Performance - Guarantee 
SINGAPORE/91408044vll

(a)
shall, and shall procure that each other Obligor will, promptly notify the Owner in writing immediately upon being aware of any non-compliance, by any of its respective officers,
directors, employees, consultants, agents or intermediaries, with any laws and regulations relating to Sanctions, Anti-Money Laundering Laws, Anti-Terrorism Financing Laws
and/or Business Ethics Laws, whereupon it shall, and shall procure that each other Obligor take all necessary steps to dismiss and remove such officer, director, employee,
consultant, agent or intermediary with immediate effect; and
 
(b)
shall, and shall procure that each other Obligor shall:
(i)
comply with all Anti-Money Laundering Laws, Anti-Terrorism Financing Laws and Business Ethics Laws; and
 
(ii)
maintain systems, controls, policies and procedures designed to promote and ensure ongoing compliance by it and its respective directors, officers and employees with
Anti-Money Laundering Laws, Anti-Terrorism Financing Laws and Business Ethics Laws; and
(c)
procure the Bareboat Charterer not use, or permit or authorise any person to directly or indirectly use the Purchase Price or lend, invest, contribute or otherwise make available
the Purchase Price to or for any other person for any purpose or otherwise in a manner which would result in a violation of Anti-Money Laundering Laws, Anti-Terrorism
Financing Laws or Business Ethics Laws.
10.18
FATCA. The Guarantor shall not, and shall procure that the Bareboat Charterer will not become a US Tax Obligor, and they have not established a place of business in the United
Kingdom or the United States of America.
 
10.19
No change of control. Save for the Owner’s prior written consent, they shall ensure that no Change of Control shall occur.
 
10.20
Most favoured nation. The Guarantor shall promptly notify the Owner of the terms of any financial covenants given from time to time by the Guarantor or any of its subsidiaries
to their banks or other financiers, and if the Owner considers that those terms are more favourable to those banks or financiers than those set out in Clause 11 below, then the
Guarantor shall provide amended financial covenants on equivalent terms to those deemed by the Owner to be more favourable and acceptable to the Owner.
 
11
FINANCIAL COVENANTS
 
11.1
Financial covenants. The Guarantor shall ensure that, at all times throughout the Security Period:
(a)
Minimum liquidity. an aggregate amount of (a) Cash and (b) Cash Equivalents not less than the higher of:
(i)
US$9,000,000 for a total five (5) Fleet Vessels plus US$500,000 per Fleet Vessel (over and above five (5) Fleet Vessels), if any; and
(ii)
7.5% of the Total Debt.
 
(b)
Minimum working capital. the Working Capital greater than zero dollars; and
 
(c)
Minimum Equity Ratio. a Value Adjusted Equity Ratio at a minimum of 35%.
Whereby:
 
 11
 
 
 
JSFL Performance - Guarantee 
SINGAPORE/91408044vll

“Cash” means, at any date of determination under this Guarantee, the aggregate value of the Guarantor and its subsidiaries credit balances on any deposit, savings or current
account and cash in hand to which the Guarantor and/or its subsidiaries (as applicable) have free, immediate and direct access but excluding any such credit balances and cash
subject to Security Interest (other than Permitted Security Interest) at any time.
 
“Cash Equivalents” means, at any date of determination under this Guarantee, the aggregate value of the Group’s:
 
(i)   certificates of deposit of, or overnight bank deposits with, any commercial bank whose short-term securities are rated at least A-2 by Standard and Poor’s Rating Group and
P-3 by Moody’s Investor Services, Inc. having maturities of six (6) months or less from the date of acquisition;
(ii)  commercial paper of, or money market accounts or funds with or issued by, an issuer rated at least A-2 by Standard & Poor’s Ratings Group and P-3 by Moody’s Investor
Services, Inc. and having an original tenor of six (6) months or less; and
(iii) medium term fixed or floating rate notes of an issuer rated at least AA- by Standard & Poor’s Rating Group and/or Aa3 by Moody’s Investor Services, Inc. at the time of
acquisition and having a remaining term of six (6) months or less from the date of acquisition,
but excluding any of those assets subject to a Security Interest (other than Permitted Security Interest) at any time;
 
“Fleet Market Value” means in relation to a Fleet Vessel, the market value of such Fleet Vessel determined by a valuation to be provided by the Guarantor or the Bareboat
Charterer and acceptable to the Owner on the basis of a charter-free sale for prompt delivery for cash at arm’s length on normal commercial terms as between a willing seller and
a willing buyer and at the cost of the Guarantor and the Bareboat Charterer.
 
“Fleet Vessels” means all of the vessels (including, but not limited to, the Vessel) from time to time wholly owned (whether directly or indirectly) by the Guarantor and, in the
singular, means any of them.
 
“Total Debt” means, at any time during the Security Period, the aggregate amount of the Financial Indebtedness all the members of the Group at that time as shown in the most
recent financial reports accounts delivered or to have been delivered to the Owner pursuant to Clause 10.3 (Provision of financial statements).
“Value Adjusted Equity Ratio” means the amount of the Guarantor’s total shareholders’ equity as reflected in the most recent financial reports accounts delivered or to have
been delivered to the Owner pursuant to Clause 10.3 (Provision of financial statements) adjusted by the difference between the Fleet Market Value and the book value of the
Fleet Vessels divided by market value adjusted total assets, as evidenced by the most recent financial reports accounts delivered or to have been delivered to the Owner
pursuant to Clause 10.3 (Provision of financial statements).
“Working Capital” means the consolidated current assets minus the consolidated current liabilities {next year’s instalment on long-tern’\ debt and subordinated shareholder
loans shall be excluded from the current liabilities).
 
11.2
Compliance Certificate.
 
(a)
The Guarantor shall supply to the Owner, a Compliance Certificate setting out (in reasonable detail) computations as to compliance with Clause 11.1 (Financial covenants)
together with:
 
 12
 
 
 
JSFL Performance - Guarantee 
SINGAPORE/91408044vll

(i)
the audited annual financial statements of the Guarantor to be provided to the Owner in accordance with Clause 10.3(a) (Provision of financial statements); and/or
 
(ii)
the unaudited semi-annual financial statements of the Guarantor to be provided to the Owner in accordance with Clause 10.3(b) (Provision of financial statements).
(b)
Each Compliance Certificate shall be signed by an officer of the Guarantor.
 
12
JUDGMENTS AND CURRENCY INDEMNITY
 
12.1
Judgments relating to Leasing Documents. This Guarantee shall cover any amount payable by the Bareboat Charterer under or in connection with any judgment relating to any
Leasing Document.
 
12.2
Currency indemnity. If any sum (a “Sum”) due from the Guarantor to the Owner under this Guarantee or under any order, award or judgment given or made in relation to a Sum,
has to be converted from the currency (the “First Currency”) in which that Sum is payable into another currency (the “Second Currency”) for the purpose of:
 
(a)          making or filing a claim or proof against the Guarantor; or
 
obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings, the Guarantor shall, as an independent obligation, on demand,
indemnify the Owner against any cost, loss or liability arising out of or as a result of the conversion including any discrepancy between (A) the rate of exchange used to
convert that Sum from the First Currency into the Second Currency and (B) the rate or rates of exchange available to that person at the time of its receipt of that Sum.
 
13
SET-OFF
13.1
Application of credit balances. The Owner may, following the occurrence of a Termination Event which is continuing, without prior notice:
(a)
apply any balance (whether or not then due) which at any time stands to the credit of any account in the name of the Guarantor at any office in any country of either an Affiliate
of the Owner or the Owner’s Financiers in or towards satisfaction of any sum then due from the Guarantor to the Owner under this Guarantee and any other Leasing Document;
and
 
(b)
for that purpose:
 
(i)
break, or alter the maturity of, all or any part of a credit balance of the Guarantor;
 
(ii)
convert or translate all or any part of any credit balance into Dollars; and
 
(iii)
enter into any other transaction or make any entry with regard to any credit balance which the Owner considers appropriate.
13.2
Existing rights unaffected. The Owner shall not be obliged to exercise any of its rights under Clause 13.1(Application of credit balances); and those rights shall be without
prejudice and in addition to any right of set-off, combination of accounts, charge, lien or other right or remedy to which the Owner is entitled (whether under the general law or
any document).
14
SUPPLEMENTAL
 
14.1
Continuing guarantee. This Guarantee shall remain in force as a continuing security at all times from the date of this Guarantee up to the last day of the Security Period.
 
 13
 
 
 
JSFL Performance - Guarantee 
SINGAPORE/91408044vll

14.2
Rights cumulative, non-exclusive. The Owner’s rights under and in connection with this Guarantee are cumulative, may be exercised as often as appears expedient and shall not
be taken to exclude or limit any right or remedy conferred by law.
 
14.3
No impairment of rights under Guarantee. If the Owner omits to exercise, delays in exercising or invalidly exercises any of its rights under this Guarantee, that shall not impair
that or any other right of the Owner under this Guarantee.
14.4
Severability of provisions. If any provision of this Guarantee is or subsequently becomes void, illegal, unenforceable or otherwise invalid, that shall not affect the validity,
legality or enforceability of its other provisions.
14.5
Guarantee not affected by other security. This Guarantee shall not impair, nor be impaired by, any other guarantee, any Security Interest or any right of set-off or netting or to
combine accounts which the Owner may now or later hold in connection with the Leasing Documents.
14.6
Guarantor bound by Bareboat Charter. The Guarantor is fully familiar with, and agrees to all the provisions of the Bareboat Charter and the other Leasing Documents to which it
is not a party.
 
14.7
Applicability of provisions of Guarantee to other Security Interests. Any Security Interest which the Guarantor creates (whether at the time at which it signs this Guarantee or at
any later time) to secure any liability under this Guarantee shall be a principal and independent security, and Clauses 3 (Liability as principal and independent debtor) and 17
(Invalidity of Leasing Documents) shall, with any necessary modifications, apply to it, notwithstanding that the document creating the Security Interest neither describes it as a
principal or independent security nor includes provisions similar to Clauses 3 (Liability as principal and independent debtor) and 17 (Invalidity of Leasing Documents).
 
14.8
Applicability of provisions of Guarantee to other rights. Clauses 3 (Liability as principal and independent debtor) and 17 (Invalidity of Leasing Documents) shall also apply
to any right of set-off or netting or to combine accounts which the Guarantor creates by an agreement entered into at the time of this Guarantee or at any later time
(notwithstanding that the agreement does not include provisions similar to Clauses 3 (Liability as principal and independent debtor) and 17 (Invalidity of Leasing
Documents)), being an agreement referring to this Guarantee.
 
14.9
Third party rights. A person who is not a party to this Guarantee has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any
term of this Guarantee.
 
14.10
Counterpart. This Guarantee may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of this
Guarantee.
14.11
Immunity. The Guarantor waives any rights of sovereign immunity which it or any of its assets may enjoy in any jurisdiction and subjects itself to civil and commercial law with
respect to their obligations under this Guarantee.
 
14.12
FATCA Information.
 
(a)
Subject to paragraph (c) below, each Party shall, within ten (10) Business Days of a reasonable request by the other Party:
 
(i)
confirm to the other Party whether it is:
 
 
(A)
a FATCA Exempt Party; or
 
 14
 
 
 
JSFL Performance - Guarantee 
SINGAPORE/91408044vll

(B)
not a FATCA Exempt Party; and
 
(ii)
supply to the other Party such forms, documentation and other information relating to its status under FATCA (including its applicable “passthru payment percentage”
or other information required under the US Treasury Regulations or other official guidance including intergovernmental agreements) as the other Party reasonably
requests for the purposes of the other Party’s compliance with FATCA.
 
(b)
If a Party confirms to the other Party pursuant to paragraph 14.12(a)(i) above that it is a FATCA Exempt Party and it subsequently becomes aware that it is not, or has ceased to
be a FATCA Exempt Party, that Party shall notify the other Party reasonably promptly.
(c)
Paragraph (a) above shall not oblige any Party to do anything which would or might in its reasonable opinion constitute a breach of:
 
(i)
any law or regulation;
 
(ii)
any fiduciary duty; or
 
(iii)
any duty of confidentiality.
 
(d)
If a Party fails to confirm its status or to supply forms, documentation or other information requested in accordance with paragraph (a) above (including, for the avoidance of
doubt, where paragraph (c) above applies), then such Party shall be treated for the purposes of the Leasing Documents (and payments under it) as if it is not a FATCA Exempt
Party until such time as the Party in question provides the requested confirmation, forms, documentation or other information.
 
15
ASSIGNMENT
 
15.1
Assignment or transfer Guarantor. The Guarantor shall not assign any of its rights or transfer by novation of its rights and obligations under this Guarantee.
 
15.2
Assignment by Owner. The Owner may assign or transfer its rights under and in connection with this Guarantee to the same extent as it may do so under the Bareboat Charter.
 
16
NOTICES
 
16.1
Notices. Any notice, certificate, demand or other communication to be served, given made or sent under or in relation to this Guarantee shall be in English and in writing and
(without prejudice to any other valid method or giving making or sending the same) shall be deemed sufficiently given or made or sent if sent by registered post, fax or by email
to the following respective addresses:
 
 
(A)          
 
to the Owner:
c/o
Jiangsu Financial Leasing Co., Ltd.
Address: 9/F, No.1 Building, No.99 East Jialingjiang Street,
Nanjing, Jiangsu Province, P.R. China
Attention: ZHANG Xinhang/TENG Huaigang
 
Email: /
 
 
 
 
 
(B)
to the Guarantor:
 
c/o
Performance Shipping Management Inc.
Address: 373 Syngrou Ave. & 2-4 Ymittou str.
17564, Palaio Faliro, Athens, Greece
Email:
 
 15
 
 
 
JSFL Performance - Guarantee 
SINGAPORE/91408044vll

or, if a party hereto changes its address or fax number, to such other address or fax number as that party may notify to the other.
 
16.2
Any such communication shall be deemed to have reached the party to whom it was addressed (a)  when delivered (in case of a registered letter), or (b) when actually received
in readable form (in case of an email). A notice or other such communication received on a non-working day or after 5.00 p.m. in the place of receipt shall be deemed to be served
on the next following working day in such place.
16.3
Validity of demands. A demand under this Guarantee shall be valid notwithstanding that it is served:
 
(a)
on the date on which the amount to which it relates is payable by the Bareboat Charterer under a Leasing Document;
 
(b)
at the same time as the service of a Termination Notice under clause 44.2 of the Bareboat Charter;
and a demand under this Guarantee may refer to all amounts payable under or in connection with a Leasing Document without specifying a particular sum or aggregate sum.
17
INVALIDITY OF LEASING DOCUMENTS
 
17.1
Invalidity of Leasing Documents. In the event of:
 
(a)
any Leasing Document now being or later becoming, with immediate or retrospective effect, void, illegal, unenforceable or otherwise invalid for any other reason whatsoever,
whether of a similar kind or not; or
 
(b)
without limiting the scope of paragraph (a), a bankruptcy or insolvency of the Bareboat Charterer, the introduction of any law or any other matter resulting in the Bareboat
Charterer being discharged from liability under any Leasing Document, or any Leasing Document ceasing to operate (for example, by interest ceasing to accrue),
 
this Guarantee shall cover any amount which would have been or become payable under or in connection with a Leasing Document if such Leasing Document had been and
remained entirely valid, legal and enforceable, or such Obliger had not suffered bankruptcy or insolvency, or any combination of such events or circumstances, as the case may
be, and such Obligor had remained fully liable under it for liabilities whether invalidly incurred or validly incurred but subsequently retrospectively invalidated; and references
in this Guarantee to amounts payable by the Obliger under or in connection with a Leasing Document shall include references to any amount which would have so been or
become payable as aforesaid.
 
18
CONFIDENTIALITY
The Parties agree to keep the terms and conditions of this Guarantee (the “Confidential Information”) strictly confidential, provided that a Party may disclose Confidential
Information in the following cases:
(a)
it is already known to the public or becomes available to the public other than through the act or omission of the disclosing Party;
(b)
it is required to be disclosed under the applicable laws of any Relevant Jurisdiction or by a governmental order, decree, regulation or rule, by an order of a court, tribunal or
listing exchange of the Relevant Jurisdiction, provided that the disclosing Party shall give written notice of such required disclosure to the other Party prior to the disclosure;
 
 16
 
 
 
JSFL Performance - Guarantee 
SINGAPORE/91408044vll

(c)
in filings with a court or arbitral body in proceedings in which the Confidential Information is relevant and in discovery arising out of such proceedings;
(d)
to any other party to a Leasing Document;
 
(e)
to (or through) whom a Party assigns or transfers (or may potentially assign or transfer) all or any of its rights and/or obligations under one or more Leasing Document (as
permitted by the terms thereof), provided that such person receiving Confidential Information shall undertake that it would not disclose Confidential Information to any other
party save for circumstances arising which are similar to those described under this Clause or such other circumstances as may be permitted by all Parties;
 
(f)
to any of the following persons on a need to know basis:
(i)
a shareholder or an affiliate of either Party or a party referred to in paragraph (d) (including the employees, officers and directors thereof);
 
(ii)
professional advisers retained by a disclosing party; or
(iii)
persons advising on, providing or considering the provision of financing to the disclosing party or an affiliate,
provided that the disclosing party shall exercise due diligence to ensure that no such person shall disclose Confidential Information to any other party save for circumstances
arising which are similar to those described under this Clause 18 or such other circumstances as may be permitted by all Parties; or
 
(g)
with the prior written consent of all Parties.
 
19
INCORPORATION OF BAREBOAT CHARTER PROVISIONS
 
19.1
The following provisions of the Bareboat Charter apply to this Guarantee as if they were expressly incorporated therein with any necessary modifications:
 
clause 42 (no waiver of rights); and
clause 51 (no set-off or tax deduction).
 
19.2
Clause 19.1 (Incorporation of Bareboat Charter provisions) is without prejudice to the application to this Guarantee of any provision of the Bareboat Charter which, by its
terms, applies or relates to this Guarantee.
 
20
GOVERNING LAW AND ARBITRATION
 
20.1
This Guarantee and any non-contractual obligations arising out of or in connection with it shall be governed by and construed in accordance with English law.
 
20.2
This Guarantee shall be governed by and construed in accordance with English law and any dispute arising out of or in connection with this Guarantee shall be referred to
arbitration in London in accordance with the Arbitration Act 1996 or any statutory modification or reenactment thereof save to the extent necessary to give effect to the
provisions of this Clause. The seat of the arbitration shall be England, even where the hearing takes place outside England.
 
 17
 
 
 
JSFL Performance - Guarantee 
SINGAPORE/91408044vll

20.3
The arbitration shall be conducted in accordance with the London Maritime Arbitrators Association (LMAA) Terms current at the time when the arbitration proceedings are
commenced.
20.4
The reference shall be to three arbitrators, one to be appointed by each party and the third, subject to the provisions of the LMAA Terms, by the two so appointed. A party
wishing to refer a dispute to arbitration shall appoint its arbitrator and send notice of such appointment in writing to the other party requiring the other party to appoint its own
arbitrator within 14 calendar days of that notice and stating that it will appoint its arbitrator as sole arbitrator unless the other party appoints its own arbitrator and gives notice
that it has done so within the 14 days specified. If the other party does not appoint its own arbitrator and give notice that it has done so within the 14 days specified in the
notice, the party referring a dispute to arbitration may, without the requirement of any further prior notice to the other party, appoint its arbitrator as sole arbitrator and shall
advise the other party accordingly. The award of a sole arbitrator shall be binding on both parties as if the arbitrator had been appointed by agreement.
20.5
Nothing herein shall prevent the parties agreeing in writing to vary these provisions to provide for the appointment of a sole arbitrator.
 
20.6
In cases where neither the claim nor any counterclaim exceeds the sum of US$100,000 (or such other sum as the parties may agree) the arbitration shall be conducted in
accordance with the LMAA Small Claims Procedure current at the time when the arbitration proceedings are commenced. In cases where the claim or any counterclaim exceeds
the sum agreed for the LMAA Small Claims Procedure and neither the claim nor the counterclaim exceeds the sum of US$400,000 (or such other sum as the parties may agree) the
parties may further agree that the arbitration shall be conducted in accordance with the LMAA Intermediate Claims Procedure current at the time when the arbitration
proceedings and commenced. Where the reference is to three arbitrators the procedure for making appointments shall be in accordance with the procedure for full arbitration
stated above.
THIS GUARANTEE has been executed and delivered as a deed on the date stated at the beginning of this Guarantee.
 
 18
 
 
 
JSFL Performance - Guarantee 
SINGAPORE/91408044vll

SCHEDULE 1
FORM OF COMPLIANCE CERTIFICATE
 
To: HUICAN (TIANJIN} SHIPPING LEASING CO., LTD.
From:
PERFORMANCE SHIPPING INC.
 
Date:                                                  
Dear Sirs
 
1.
We refer to a guarantee dated                                (“Guarantee”) issued by us in favour of you.
2.
This is the Compliance Certificate referred to under Clause 11.2 of the Guarantee. Terms defined in the Guarantee have the same meaning when used in this Compliance Certificate
unless given a different meaning in this Compliance Certificate.
3.
We enclose with this certificate a copy of the [audited annual financial statements of the Guarantor for the financial year ended on                    ] / [unaudited semi-annual financial 
statements  of  the  Guarantor  for  the  financial  half  year  ended  on                             ].
4.
The accounts referred to in paragraph 3 above (i) have been prepared in accordance with all applicable laws and accounting principles consistently applied, (ii) give a true and
fair view of the state of affairs of the Bareboat Charterer, the Guarantor and the Group at the date of the accounts and (iii) fully disclose or provide for all significant liabilities of
the Bareboat Charterer, the Guarantor and the Group.
5.
We also enclose copies of the valuations of all the Fleet Vessels which were used in calculating the Fleet Market Value, as at                             and our calculations of the financial
covenants set out in Clause 11.1 of the Guarantee.
6.
We represent and warrant that no Termination Event or Potential Termination Event has occurred as at the date of this Compliance Certificate except for the following matter or
event (set out all material details or matters or events).
7.
In addition, we confirm compliance with the financial covenants set out in Clause 11.1 of the Guarantee for the 12 months ending as at the date to which the enclosed accounts
are prepared.
8.
We certify that, based on the calculations enclosed herein, as at                                     : 
(a)
The (a) Cash and (b) Cash Equivalents are                                ; 
 
(b)
the Working Capital is                              ; and
 
(c) 
the Value Adjusted Equity Ratio is                                    . 
9.
This Compliance Certificate shall be governed by, and construed in accordance with, English law.
 Signed:  
 
 
 
 
 
 PERFORMANCE SHIPPING INC.
 
 
 19
 
 
 
JSFL Performance - Guarantee 
SINGAPORE/91408044vll

EXECUTION PAGE
GUARANTOR
 
EXECUTED AND DELIVERED AS A DEED
)
for and on behalf of
)
PERFORMANCE SHIPPING INC.
)
acting by Andreas Nikolaos Michalopoulos
)
its attorney-in-fact
)
and witnessed by:
)
 
 
 /s/ Aikaterini Oikonomea
 
Witness’ Name: Aikaterini Oikonomea
Witness’ address: 373 Syngras  Ave, 17564,
Palaio  Faliro, Athens
Greece
OWNER
 
 
 
 
 
EXECUTED AND DELIVERED AS A DEED
)
 
for and on behalf of
)
 
HUICAN (TIANJIN) SHIPPING LEASING CO., LTD.
)
 
acting by
)
 
its legal representative 
)
 
and witnessed by:
)
 
 
 
 
 
 
 
 
Witness’ Name: 
 
 
Witness’ Address:
 
 
 
 
 20
 
 
 
JSFL Performance - Guarantee 
SINGAPORE/91408044vll

EXECUTION PAGE
GUARANTOR
 
 
 
EXECUTED AND DELIVERED AS A DEED
)
 
for and on behalf of
)
 
PERFORMANCE SHIPPING INC.
)
 
acting by
)
 
its attorney-in-fact 
)
 
and witnessed by:
)
 
 
 
 
 
 
Witness’ Name:
 
Witness’ address:
 
OWNER
 
 
EXECUTED AND DELIVERED AS A DEED
)
for and on behalf of
)
HUICAN (TIANJIN) SHIPPING LEASING CO., LTD.
)
acting by
)
its legal representative 
)
and witnessed by:
)
 
 /s/ Tao Yanhua
 
Witness Name: Tao Yanhua
Witness’ Address:
 
 21
 
 
 
JSFL Performance - Guarantee 
SINGAPORE/91408044vll

Exhibit 4.31A
 
BARECON 2017
 
STANDARD BAREBOAT CHARTER PARTY
PART I
 1.    Place and date
      05 March 2025
 2.    Owners (Cl. 1)
(i)Name: T.A.C.K. SHIPPING, S.A. guaranteed by
Kowa Kaiun Co., Ltd.
(ii)  Place of registered office:
World Trade Center, 53rd Street, Urbanizacion
Marbella, 5th Floor, Suite 502, Panama City,
Republic of Panama
(iii) Law of registry:
Panama
  3.    Charterers (Cl. 1)
(i)    Name: GUADELOUPE SHIPPING COMPANY INC.
guaranteed by Performance Shipping Inc.
 
(ii)   Place of registered office:
Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, The Marshall
Islands MH 96960
 
(iii) Law of registry: The Republic of the Marshall Islands
 
  
   
 
 4.    Vessel (Cl. 1 and 3)
(i) Name: HULL H1597 “P. MARSEILLE”
(ii) IMO Number: 1057218
(iii) Flag State: Marshall Islands or Liberia
(iv)  Type: LR2 Tanker
  (v) GT/NT:
(vi)  Summer DWT:
(vii) When/where built: Shanghai Waigaoqiao Shipbuilding
(viii)  Classification Society: IACS classification society in Charterer’s option
 
 5.    Date of last special survey by the Vessel’s Classification Society
    N/A
  6.    Validity of class certificate (state number of months to apply)
(i)    Delivery (Cl. 3): N/A
(ii)   Redelivery (Cl. 10): minimum 3 months
 
 7.    Latent Defects (state number of months to apply) (Cl. 1,3)
N/A
  8.     Port or place of delivery (Cl. 3)
 As per MOA Clause 5
 
 9.    Delivery notices (Cl. 4)
N/A
  10.  Time for delivery (Cl. 4)
As per MOA Clause 5
 
 11.  Cancelling date (Cl. 4,5)
31 October 2026
  12.  Port or place of redelivery (Cl.10)
Worldwide range, safely afloat at an accessible safe berth or anchorage at a safe
port or place (excluding war risk areas in accordance with the terms of the
Vessel’s Insurances), in Charterers’ option.
 
 13.  Redelivery notices (Cl. 10)
Thirty (30) and twenty (20), fifteen (15), seven (7), and three running days’
approximate notices and two (2) running days’ definite notice
  14.  Trading limits (Cl. 11)
World Wide trading within institute Warranty Limits (IWL), provided that,
Charterers shall be permitted to trade outside of IWL if they pay any applicable
premium and/or expenses. North Korea, Russia and any other states or regions
sanctioned by UN, USA, EU, UK or Japan shall be excluded. If Charterers call at a
state which results in a breach of sanctions applicable to the Charterers and/or the
Vessel then Charterers to undertake to indemnify Owners in accordance with
Clause 22 and
 
Copyright © 2017 Norwegian Shipbrokers’ Association.
All rights reserved.
 

STANDARD BAREBOAT CHARTER PARTY
PART I
  
  Clause 51.
 
 15. Bunker fuels, unused oils and greases (optional, state if (a) (actual net price), or (b)
(current net market price) to apply) (Cl. 9)
N/A
  16.  Charter period (Cl. 2)
8 years from Delivery
 
 17.  Charter hire (state currency and amount) (Cl. 2,10 and 15)
(i)   Charter hire:
A: Fixed part: USD 6,850 per day; plus
B: Floating part: (1M CME  TERM SOFR +2.05% Margin) x No of days/360 x Loan
Outstanding
Margin as per line 44
Loan Outstanding as per Clause 49
 
(ii)  Charter hire for optional period: N/A
  18.     Optional period and notice (Cl. 2)
(i)   State extension period in months: N/A
(ii)   State when declarable: N/A
 
 19. Rate of interest payable (Cl. 15(g))
1 month CME TERM SOFR plus 2.05 percentage points per annum
  20.  Owners’ bank details (state beneficiary and bank account) (Cl. 15)
The Nishi-Nippon City Bank Ltd.
 
Branch Code:
SWIFT Code:
USD Account No :
Account Name:
Beneficiary:
 
 21.  New class and other regulatory requirements (Cl. 13(b))
(i)  State if 13(b)(i) or (ii) to apply: Clause 13(b)(I) to apply
(ii)  Threshold amount (AMT): N/A
(iii)  Vessel’s expected remaining life in years on the Delivery Date: N/A
 22.   Mortgage(s), if any (state if 16(a) or (b) to apply; if 16 (b) applies state date of Financial Instrument and name of Mortgagee(s)/Place of business) (Cl. 1, 16)
First priority ship mortgage in favor of the Nishi-Nippon City Bank Ltd. Japan
 23.  Insured Total Loss value (Cl. 17)
See Clause 47
  24.  Insuring party (state if Cl. 17(b) (Charterers to insure) or Cl. 17(c) (Owners to insure)
to apply)
Clause 17(b)
And See Clause 47
 
 25. Performance guarantee (state amount and entity) (Cl. 27) (optional)
See Clause 43
 
 26.  Dispute Resolution (state 33(a), 33(b), 33(c) or 33(d); if 33(c) is agreed, state Singapore or English law; if 33(d) is agreed, state governing law and place of arbitration) (Cl. 33)
(a) English law, London arbitration
 
 27.   Newbuilding Vessel (indicate with “yes” or “no” whether PART III applies and if “yes”, complete details below) (optional)
No
 
Copyright © 2017 Norwegian Shipbrokers’ Association.
All rights reserved.
 

STANDARD BAREBOAT CHARTER PARTY
PART I
 (i)    Name of Builders:
(ii)   Hull number:
(iii)  Date of newbuilding contract:
(iv)  Liquidated damages for physical defects or deficiencies (state party):
(v)  Liquidated damages for delay in delivery (state party):
 
 28. Purchase Option (indicate with “yes” or “no” whether PART IV applies) (optional)
 
No, see however Clause 45
  29.  Bareboat Charter Registry (indicate with “yes” or ‘‘no” whether PART V applies and
if “yes”, complete details below) (optional) No
(i)   Underlying Registry: N/A
(ii)  Bareboat Charter Registry: N/A
 
 30. Notice to Owners (state full style details for serving notices) (Cl. 34)
c/o Kowa Kaiun Co., Ltd.
470-1 Oaza Nagashima,
Kaminoseki-cho, Kumage-gun,
Yamaguchi, Japan
Email:
Attention: Takayuki Hanada
  31. Notice to Charterers (state full style details for serving notices) (Cl. 34)
GUADELOUPE SHIPPING COMPANY INC.
c/o PERFORMANCE SHIPPING MANAGEMENT INC.
373 Syngrou Ave. & 2-4 Ymittou str., 17564, Palaio Faliro, Athens, Greece
Email: 
Attention: Mr. Andreas Nikolaos
Michalopoulos
 
 
   
 
It is mutually agreed that this Charter Party shall be performed subject to the conditions contained in this Charter Party which shall include PART I, and PART II and Rider Clauses 39-
54. In the event of a conflict of conditions, the provisions of PART I shall prevail over those of PART II and Rider Clauses 39-54 to the extent of such conflict but no further. It is further
mutually agreed that PART III and/or PART IV and/or PART V shall only apply and only form part of this Charter Party if expressly agreed and stated in BOX 27, 28 and 29. If PART III
and/or PART IV and/or PART V applies, it is further agreed that in the event of a conflict of conditions, the provisions of PART I and PART II shall prevail over those of PART III and/or
PART IV and/or PART V to the extent of such conflict but nor further.
 
 T.A.C.K. SHIPPING, S.A.
Signature (Owners)
  GUADELOUPE SHIPPING COMPANY INC.
Signature(Charterers)
 
 
  
 
  
  /s/ Andreas Nikolaos Michalopoulos
 
 Name: Takayuki Hanada
Title: Representative Director / Treasurer
  Name: Andreas Nikolaos Michalopoulos
Title: Director / Attorney-in-fact
 
  
   
 
 Kowa Kaiun Co., Ltd.
  Performance Shipping Inc.
 
 Signature (Guarantor)
  Signature (Guarantor)
 
  
   
 
  
  /s/ Andreas Nikolaos Michalopoulos
 
 Name: Takayuki Hanada
Title: Executive Director
  Name: Andreas Nikolaos Michalopoulos
Title: Director / Chief Executive Officer
 
 
  
 
Copyright © 2017 Norwegian Shipbrokers’ Association.
All rights reserved.
 

PART II
BARECON 2017 STANDARD BAREBOAT CHARTER PARTY
0
1.
Definition
1
 
 
2
 
In this Charter Party:
3
 
 
4
 
“Banking Day” means a day on which banks are open in the places stated in Boxes 30 and 31, New York,
5
 
Tokyo, London, Athens, Shanghai and, for payments in US dollars, in New York.
6
 
 
7
 
“Builder” means Shanghai Waigaoqiao Shipbuilding Company Limited, a corporation organized and existing
8
 
under the laws of the People’s Republic of China, having its registered office at 3001 Zhouhai Road, Pudong
9
 
New District, Shanghai 200137, the People’s Republic of China
10
 
11 
 
“Building Contract” means the ship building contract dated 18 December 2023 (as amended by Addendum
12
 
no.1 dated 18 December 2023) made between the Construction Seller and the Sellers as buyer.
13
 
 
14
 
“Charterers” means the party identified in Box 3.
15
 
 
16 
 
“Charterers’ Event of Default” has the meaning given to it in Clause 31(a) and a Charterers’ Event of Default
17
 
is “continuing” if such Charterers’ Event of Default has not been remedied by the Charterers or waived by the
18
 
Owners.
19
 
 
20
 
“Compulsory Acquisition” has the meaning given to it in Clause 30(b).
21
 
22
 
“Construction Seller” means together (i) the Builder and (ii) China Shipbuilding Trading Company Limited, a
23 
 
company incorporated and existing under the laws of the People’s Republic of China, having its registered
24
 
office al 56(Yi), Zhongguancun Nan Da Jie, Beijing 100044, the People’s Republic of China.
25
 
 
26
 
“Crew” means the Master, officers and ratings and any other personnel employed on board the Vessel.
27
 
 
28
 
“Delivery Date” means the date of delivery of the Vessel by the Owners to the Charterers under this Charter
29
 
Party.
30
 
 
31    
 
“Financial Instrument” means the mortgage, deed of covenant or other such financial security instrument as
32  
 
identified in Box 22.
33
 
 
34   
 
“Fixed Hire” means the fixed part of the Charter Hire identified in Box 17(i)(A).
35
 
 
36  
 
“Flag State” means the flag state in Box 4 or such other flag state to which the Charterers may have re-
37
 
registered the Vessel with the Owners’ consent during the Charter Period.
38
 
 
39
 
“Guarantees” has the meaning ascribed to it in Clause 43
40
 
 
41 
 
“Latent Defect” means a defect which could not be discovered on such an examination as a reasonably
42
 
careful skilled  person would make.
43
 
 
44
 
“Margin” means 2.05% per annum.
45
 
46
 
“MOA” means the Memorandum of Agreement entered into between the Owners (as buyers) and the
47 
 
 Charterers (as sellers) dated 05 March 2025.
48
 
49
 
“Mortgagee” means The Nishi-Nippon City Bank Ltd.
50
 
 
51  
 
“Outstanding Principal” means at any relevant time the aggregate of the amount of $45,000,000 less the
52 
 
aggregate Fixed Hire which has at any relevant time been received by the Owners in accordance with this
53    
 
Charter Party.
 
Copyright © 2017 Norwegian Shipbrokers’ Association.
All rights reserved.
 

PART II
BARECON 2017 STANDARD BAREBOAT CHARTER PARTY
54
 
55
 
“Owners” means the party identified in Box 2.
56
 
 
57
 
“Parties” means the Owners and the Charterers.
58
 
 
59
 
“Permitted Liens” means:
60
 
 
61
 
(i)   any liens for unpaid master’s and crew’s wages in accordance with first class ship ownership and
62
 
management practice and not being enforced through arrest; or
63
 
 
64
 
(ii)   general average and salvage not being enforced through arrest; or
65
66
 
(iii)  liens in favour of suppliers, necessaries and other similar liens arising by operation of law or in the
67
 
ordinary course of trading, operation, repair or maintenance of the Vessel, such liens not being enforced
68
 
through arrest and not as a result of failure of payment by the Charterers, their agents or any sub-
69
 
charterers of the Vessel; or
70
 
71
 
(iv)  any security interest created by any security documents granted by the Charterers in relation to the
72
 
Vessel; or
73
 
 
74
 
(v)   any liens created by or on the instructions or with the prior consent of the Owners.
75
 
 
76
 
“Purchase Option” has the meaning ascribed to it in Clause 45
77
 
 
78
 
“Owners’ Put Option” has the meaning ascribed to it in Clause 46.
79
 
 
80
 
“QEL” has the meaning ascribed to it in Clause 43
81
 
 
82
 
“Total Loss” means an actual, constructive, compromised, agreed or arranged total loss of the Vessel under
83 
 
the insurances.
84
 
85
 
“Variable Hire” means the floating part of the Charter Hire identified In Box 17(i)(B).
86
 
87  
 
“Vessel” means the vessel described in Box 4 including its equipment, machinery, boilers, fixtures and fittings.
88
 
   
89   
2.
Charter Period
90
 
 
91
 
The Owners have agreed to let and the Charterers have agreed to hire the Vessel for the period stated in
92
 
Box 16 (“Charter Period”). The Charter Period shall commence simultaneously with delivery of the Vessel by
93
 
the Charterers as sellers to the Owners as buyers under the MOA and subject to the terms and conditions of
94
 
this Charter Party shall end on the date falling eight (8) years from the Delivery Date.
95
 
 
96
 
The Charterers shall have the option to extend the Charter Period by the period stated in Box 18(i) at the rate
97
 
stated in Box 17(ii), which option shall be exercised by written notice to the Owners latest as stated in Box
98
 
18(ii).
99
 
 
100
 
Subject to the terms and conditions herein provided, during the Charter Period the Vessel shall be in the full
101
 
possession and at the absolute disposal for all purposes of the Charterers and under their complete control
102
 
in every respect.
103
 
 
104
3.
Delivery See Clause 39, 40 and 41
105
 
 
106
 
 
107
 
(not applicable when Part III applies, as stated in Box 27).
Copyright © 2017 Norwegian Shipbrokers’ Association.
All rights reserved.
 

PART II
BARECON 2017 STANDARD BAREBOAT CHARTER PARTY
108
  
109
(a)   The Owners shall deliver the Vessel in a seaworthy condition and in every respect ready for service under
110
this Charter Party and in accordance with the particulars stated in Boxes 4 to 6.
111
112
If the Charterers have inspected the Vessel prior to delivery, the Vessel shall be delivered by the Owners in
113
the same condition as at the time of inspection, fair wear and tear excepted.
114
115
The Vessel shall be delivered by the Owners and taken over by the Charterers at the port or place stated in
116
Box 8 at such readily accessible safe berth or mooring as the Charterers may direct.
117
 
 
118
(b) The Vessel shall be properly documented on delivery in accordance with the laws and regulations of the Flag
119
State and the requirements of the Classification Society stated in Box 4. The Vessel upon delivery shall have
120
her survey cycles up-to-date and class certificates valid and unextended for at least the number of months
121
stated in Box 6(i) free of any conditions or recommendations. If Box 6(i) is not filled in, then six (6) months
122
shall apply.
123
124
(c)   Without prejudice to the Charterer’s rights with respect to any breach by the Owners of (i) this Charter Party 
125
or (ii) any laws and/or sanctions, the delivery of the Vessel by the Owners and the taking over of the Vessel
126
by the Charterers shall constitute a full performance by the Owners of all the Owners’ obligations under this
127
Clause, and thereafter the Charterers shall not be entitled to make or assert any claim against the Owners on
128
account of any conditions, representations or warranties expressed or implied with respect to the Vessel but
129
the Owners shall be liable for the cost of but not the time for repairs or renewals arising out of Latent Defects
130
in the Vessel existing at the time of delivery under this Charter Party, provided such Latent Defects manifest
131
themselves within the number of months after delivery stated in Box 7. If Box 7 is not filled in, then twelve (12)
132
months shall apply.
133
134
4.
Time for Delivery See Clause 39
135
136
(not applicable when Part III applies, as stated in Box 27)
137
138
The Vessel shall not be delivered before the date stated in Box 10 without the Charterers’ consent and the
139
Owners shall exercise due diligence to deliver the Vessel not later than the date stated in Box 11.
140
141
The Owners shall keep the Charterers informed of the Vessel’s itinerary for voyage leading up to delivery
142
and shall serve the Charterers with the number of days approximate/definite notice of the Vessel’s delivery
143
stated in Box 9. Following the tender of any such notices the Owners shall give or allow to be given to the
144
Vessel only such further employment orders as are reasonably expected when given to allow delivery to 
145
occur by the date noticed.
146
 
147
5.
Cancelling See Clause 39
148
149
(not applicable when Part III applies, as stated in Box 27)
150
151
(a)   Should the Vessel not be delivered by the cancelling date stated in Box 11, the Charterers shall have the
152
option of cancelling this Charter Party.
153
154
(b)   If it appears that the Vessel will be delayed beyond the cancelling date, the Owners may, as soon as they are
155
in a position to state with reasonable certainty the day on which the Vessel should be ready, serve notice thereof
156
to the Charterers asking whether they will exercise their option of cancelling, and the option must then be
157
declared within three (3) Banking Days after receipt by the Charterers of such notice. If the Charterers do
158
not then exercise their option of cancelling, the new date of readiness as notified shall be substituted
159
for the cancelling date stated in Box 11 for the purpose of this Clause 5 (Cancelling).
160
161
(c)   Cancellation under this Clause 5 (Cancelling) shall be without prejudice to any claim the Charterers may
Copyright © 2017 Norwegian Shipbrokers’ Association.
All rights reserved.
 

PART II
BARECON 2017 STANDARD BAREBOAT CHARTER PARTY
162
otherwise have against the Owners under this Charter Party.
163
164
6.
Familiarisation
165
166
(a)   The Charterers shall have the right to place a maximum of two (2) representatives on board the Vessel at
167
their sole risk and expense for a reasonable period prior to the delivery of the Vessel.
168
169
The Charterers and the Charterers’ representatives shall sign the Owners’ usual letter of indemnity prior to
170
embarkation.
171
172
(b)  The Owners shall have the right to place a maximum of two (2) representatives on board the Vessel at their
173
sole risk and expense for a reasonable-period at a convenient port for a maximum of (60) days prior to
174
expected date of  redelivery of the Vessel subject to not causing any disruption to the Vessel’s itinerary or
175
operations.
176
177
The Owners and the Owners’ representatives shall sign the Charterers’ usual letter of indemnity prior to
178
embarkation.
179
180
(c)   Such representatives shall be on board for the purpose of familiarisation and in the capacity of observers only,
181
and they shall not interfere in any respect with the operation of the Vessel and follow the Master’s instructions.
182
The Owners representatives while onboard shall be allowed use of the Vessel’s communication systems while
183
on board but such use shall never interfere with the Vessel’s operation. Charterer shall cooperate with Owners
184
representatives reasonable comments, requests and questions which they may have for familiarisation
185
purpose. Costs for communication to be settled by Owners upon redelivery. This clause shall not apply if the
186
Charterers exercise their Purchase Option as set out in Clause 45 or the Owners exercise their Put Option as
187
set out in Clause 46.
188
189
7.
Surveys on Delivery and Redelivery See Clause 42
190
191
(a)  The Owners and Charterers shall each appoint and pay for their respective surveyors for the purpose of
192
determining and agreeing in writing the condition of the Vessel at the time of delivery and redelivery hereunder.
193
The Owners shall bear all the Vessel’s expenses related to the on-hire survey including loss of time, if any.
194
The Charterers shall bear all the Vessel’s expenses related to the off-hire survey including loss of time, if any.
195
196
(b) Divers’ inspection on delivery/re-delivery
197
198
The Charterers shall have the option at delivery and the Owners shall have the option at redelivery, at their
199
respective time, cost and expense, to arrange for an underwater inspection by a diver approved by the
200
Classification Society, in the presence of a Classification Society surveyor, to determine the condition of the
201
rudder, propeller, bottom and other underwater parts of the Vessel.Not earlier than 45 days or later than 30
202
days or if not possible then as soon as the Vessel becomes available before re-delivery of the Vessel, the
203
Owners and the Charterers shall jointly agree upon the appointment of a surveyor for the purpose of
204
determining the condition of the Vessel at the time of re-delivery hereunder. The surveyor, whose decision
205
shall be final and binding on both parties, shall report in writing, specifying all items, if any, which have not
206
been properly maintained in accordance with the terms and conditions of the Charter and the work required
207
to correct such deficiencies. The costs of such a surveyor shall be equally shared between the parties. In the
208
event that the parties are not able to agree upon a single surveyor, each shall appoint their own and the two
209
surveyors so appointed shall conduct a joint survey of the Vessel. In such an event each party shall pay their
210
own appointed surveyor’s costs. The survey shall be carried out at the point of re-delivery and in Charterers
211
time. Any works required as a result of such survey shall be carried out by Charterers prior to their re-delivery
212
of the Vessel. Charterers shall have the option to pay a compensation based on the surveyors’ assessment
213
to the Owners for any works required instead of performing the required works before redelivery (unless the
214
required works are class affecting). In the event that two surveyors so appointed disagree, the matter shall
215
be referred to arbitration in accordance with Clause 33. This clause shall not apply if the Charterers exercise
Copyright © 2017 Norwegian Shipbrokers’ Association.
All rights reserved.
 

PART II
BARECON 2017 STANDARD BAREBOAT CHARTER PARTY
216
their Purchase Option as set out in Clause 45 or the Owners exercise their Put Option as set out in Clause
217
46.
218
219
8.
Inventories
220
221
A complete inventory of the Vessel’s equipment, outfit, spare parts and consumable stores on board the
222
Vessel shall be made by the parties on delivery and redelivery of the Vessel.
223
224
9.
Bunker fuels, oils and greases
225
226
On redelivery, Owners to pay for all bunkers, fuels and unused lubrication and hydraulic oils and greases in
227
storage tanks and unopened drums in accordance with, either:
228
229
(a)   Charterers’ last invoice price paid (not to be older than 6 months); or otherwise
230
231
(b)   if such invoices are not available on account of the Vessel being employed on sub time charter, the sub-
232
time charter prices; or otherwise
233
234
(c)   the current market price prevailing at the port of redelivery (or, if unavailable, at the nearest bunkering
235
port).
236
237
The Charterers and the Owners, respectively, shall at the time of delivery and redelivery take over and pay
238
for all bunker fuels and unused lubricating and hydraulic oils and greases in storage tanks and unopened
239
drums at:
240
241
(a)*
 The actual price-paid (excluding barging expenses) as evidenced by invoices or vouchers.
242
243
(b)*
The current market price (excluding barging expenses) at the port and date of delivery/redelivery of the Vessel
244
or, if unavailable, at the nearest bunkering port.
245
246
*Subclauses(a)and(b)are alternatives; state alternative agreed in-Box 15 is not filled in, then
247
subclause(a)shall apply.
248
249
10.
Redelivery
250
251
At the expiration of the Charter Period the Vessel shall be redelivered by the Charterers and taken over by
252
the Owners at the port or place stated in Box 12 at such readily accessible safe berth or mooring as the
253
Owners Charterers may direct (acting reasonably).
254
255
The Charterers shall keep the Owners informed of the Vessel’s itinerary for the voyage leading up to
256
redelivery and shall serve the Owners with the number of days approximate/definite notices of the Vessel’s
257
redelivery stated in Box 13.
258
259
The Charterers warrant that they will not permit the Vessel to commence a voyage (including any preceding
260
ballast voyage) which cannot reasonably be expected to be completed in time to allow redelivery of the
261
Vessel within the Charter Period and in accordance with the notices given. Notwithstanding the above, should
262
the Charterers fail to redeliver the Vessel within the Charter Period, the Charterers shall pay the daily
263
equivalent to the rate of hire stated in Box 17(i) applicable at the time plus ten (10) per cent or the market
264
rate, whichever is the higher, for the number of days by which the Charter Period is exceeded. Such payment
265
of enhanced hire rate shall be without prejudice to any claims the Owners may have against the Charterers
266
in this respect.
267
All other terms, conditions and provisions of this Charter Party shall continue to apply.
268
269
Subject to the provisions of Clause 13 (Maintenance and Operation), the Vessel shall be redelivered to the
Copyright © 2017 Norwegian Shipbrokers’ Association.
All rights reserved.
 

PART II
BARECON 2017 STANDARD BAREBOAT CHARTER PARTY
270
 
Owners in the same condition and class as that in which it was delivered, fair wear and tear not affecting
271
 
class excepted.
272
 
273
 
The Vessel upon redelivery shall have her survey cycles up lo date and class certificates valid and
274
 
unextended for at least the number of months agreed in Box 6(ii) free of any conditions or recommendations
275
 
by the Classification Society or the relevant authorities at the time of redelivery. If Box 6(1) is not filled in,
276
 
then six (6) months shall apply. 
277
278
 
All plans, drawings and manuals (excluding ISM/ISPS manuals) and maintenance records shall remain on
279
 
board and accessible to the Owners upon redelivery. Any other technical documentation regarding the Vessel
280
 
which may be in the Charterers’ possession shall promptly after redelivery be forwarded to the Owners at
281
 
their expense, if they so request. The Charterers may keep the Vessel’s log books but the Owners shall have
282
 
the right to make copies of the same.
283
 
 
284
 
This clause shall not apply if the Charterers exercise their Purchase Option in Clause 45 of this Charter Party
285
 
or the Owners exercise their Put Option in Clause 46 in which event a Protocol of Delivery and Acceptance
286
 
will be signed.
287
 
288
11.
 Trading Restrictions
289
 
290
 
The Vessel shall be employed in lawful trades for the carriage of lawful merchandise within the trading limits
291
 
stated in Box 14.
292
 
293
 
The Charterers undertake not to employ the Vessel or allow the Vessel to be employed otherwise than in
294
 
conformity with the terms of the contracts of insurance (including any warranties expressed or implied therein)
295
 
without first obtaining the consent of the insurers to such employment and complying with such requirements
296
 
as to additional premium or otherwise as the insurers may require. In case insurers’ consent is required,
297
 
Charterers will notify the Owners in writing, which notification may be by way of copying in the Owners in the
298
 
Charterers’ relevant notice to the insurers prior to the intended entry into such area, and, upon reasonable
299
 
request by the Owners, furnishing the Owners with the proof of extension of the insurance coverages
300
 
practically obtainable within a reasonable period from such request.
301
 
302
 
The Charterers will not do or permit to be done anything which might cause any breach or infringement of
303
 
the laws and regulations of the Flag State, or of the places where the Vessel trades.
304
 
305
 
Notwithstanding any other provisions contained in this Charter Party it is agreed that nuclear fuels or
306
 
radioactive products or waste are specifically excluded from the cargo permitted to be loaded or carried under
307
this Charter Party. This exclusion does not apply to radio-isotopes used or intended to be used for any
308
Industrial, commercial, agricultural, medical or scientific purposes provided the Owners’ prior approval has
309
been obtained to loading thereof. 
310
311
12.
Contracts of Carriage
312
 
313
 
(a)  The Charterers are shall use reasonable commercial efforts to procure that all documents issued during
314
 
the Charter Period evidencing the terms and conditions agreed in respect of carriage of goods shall contain
315
 
a paramount clause which shall incorporate the Hague or Hague-Visby Rules unless any other legislation
316
relating to carrier’s liability for cargo is compulsorily applicable in the trade. The documents shall also
317
contain the New Jason Clause and the Both-to-Blame Collision Clause.
318
319
 
(b)  The Charterers are to procure that all passenger tickets issued during the Charter Period for the carriage
320
of passengers and their luggage under this Charter Party shall contain a paramount clause-which shall
321
incorporate the Athens Convention Relating to the Carriage of Passengers and their Luggage by sea, 1974,
322
and any protocol thereto, unless any other legislation relating to carrier’s liability for passengers and their
323
luggage is compulsorily applicable in the trade.
Copyright © 2017 Norwegian Shipbrokers’ Association.
All rights reserved.
 

PART II
BARECON 2017 STANDARD BAREBOAT CHARTER PARTY
324
 
 
325
13.
Maintenance and Operation
326
 
 
327
(a)
Maintenance
328
 
329
 
During the Charter Period the Vessel shall be in the full possession and at the absolute disposal for all
330
 
purposes of the Charterers and under their complete control in every respect, unless Charter’s Default
331
 
occured. The Charterers shall properly maintain the Vessel in a good state of repair, in efficient operating
332
 
condition and in accordance with good commercial maintenance practice and, at their own expense, maintain
333
 
the Vessel’s Class with the Classification Society stated in Box 4 and all necessary certificates. The Charterers
334
 
shall have the option to change the Vessel’s Classification Society to any JAGS classification society but time
335
 
and cost to be for Charterers’ account.
336
 
337
(b)
New Class and Other Regulatory Requirements
338
339
 
(i)*     In the event of any structural changes or new equipment becoming necessary for the continued
340
 
operation of the vessel by reason of new class requirements or by compulsory legislation (“Requires
341
 
Modification”) all such costs shall be for the Charterers’ account.
342
 
In the event of any improvement deemed necessary by the Charterers in connection with the operation
343
 
of the Vessel, or structural changes or new equipment being necessary for the continued operation of
344
 
the Vessel by reason of new class requirements or by compulsory legislation, the cost of compliance
345
 
shall be for the Charterers’ account. Notwithstanding the foregoing, Charterers are allowed to make
346
 
improvements to the Vessel provided cost of the same to be for Charterers account.
347
 
348
 
(ii)*   In the event of any structural changes or new equipment becoming necessary for the continued
349
 
operation of the Vessel by reason of a Required Modification, the costs shall be appointed as follows:
350
 
351
 
(1)   if the costs of the Required Modification are less than the amount stated in Box 21(ii), such
352
 
costs shall be for the Charterers’ account;
353
 
354
 
(2)   if the costs of the Required Modification are greater than the amount stated in Box 21(ii), the
355
 
charterers’ portion of costs shall be apportioned using the formula below, all costs other than
356
 
the Charterers’ portion of costs shall be for the Owners’ account.
357
358
 
AMT =agreed amount stated in Box 21(ii)
359
 
 
360
 
GRM=cost of Required Modification.
361
 
 
362
 
MEL=modification’s expected life in years
363
364
 
VEL =the Vessel’s expected remainIng life in years stated in Box 21(iii)
365
 
 
366
 
RPY =remaining Charter period in years
367
 
368
 
(i) If the Required Modification is expected to last for the remaining life of the Vessel, then;
369
 
370
 
Charterers’ portion of costs = CRM/VEL x RPY
371
 
372
 
(ii) If the Requires Modification is not expected to last for the remaining life-of-.the Vessel, then:
373
 
374
 
Charterers’ portion of costs= CRM/MEL x RPY
375
 
376
 
Subclauses 13(b)(i) and 13(b)(ii) are alternatives, state alternative agreed in Box 21(i). If Box 21(i) is not
377
 
filled in, then subclause 13(b)(i) shall apply.
Copyright © 2017 Norwegian Shipbrokers’ Association.
All rights reserved.
 

PART II
BARECON 2017 STANDARD BAREBOAT CHARTER PARTY
378
 
379
(c)
Financial Security
380
381
 
The Charterers shall maintain financial security or responsibility in respect of third party liabilities as required
382
 
by any government, including federal, state or municipal or other division or authority thereof, to enable the
383
 
Vessel, without penalty or charge, lawfully to enter, remain at, or leave any port, place, territorial or contiguous
384
 
waters of any country, state or municipality in performance of this Charter Party without any delay. This
385
 
obligation shall apply whether or not such requirements have been lawfully imposed by such government or
386
 
division or authority thereof. The Charterers shall make and maintain all arrangements by bond or otherwise
387
as may be reasonably necessary to satisfy such requirements at the Charterers’ sole expense and the
388
Charterers shall indemnify the Owners against all direct consequences whatsoever (including loss of time)
389
for any failure or inability to do so.
390
 
 
391
(d)
Operation of the Vessel
392
393
 
The Charterers shall at their own expense crew, victual, navigate, operate, supply, fuel, maintain and repair
394
the Vessel during the Charter Period and they shall be responsible for all costs and expenses whatsoever
395
relating to their use and operation of the Vessel, including any taxes and fees. The Crew shall be the servants
396
of the Charterers for all purposes whatsoever, even if for any reason appointed by the Owners.
397
398
(e)
 Information to Owners
399
400
 
The Charterers shall keep the Owners advised of the intended employment, planned dry-docking and major
401
repairs of the Vessel, as reasonably required by the Owners.
402
403
(f)
Flag and Name of Vessel
404
 
 
405
 
The Owners have no right to change the name or flag of the Vessel during the Charter Period. During the
406
Charter Period, the Charterers shall have the liberty to paint the Vessel in their own colours, install and display
407
their funnel insignia and fly their own house flag. The Charterers shall also have the liberty, with the Owners’
408
prior written consent, which shall not be unreasonably withheld or delayed, to change the flag and/or the name
409
 
of the Vessel during the Charter Period by providing 30 days prior notice to the Owners and such expense
410
shall be for Charterer’s account. In case Charterers do not exercise their Purchase Option as set out in Clause
411
 
45 or the Owners do not exercise their Put Option as set out in Clause 46, painting and re-painting, instalment
412
and re-instalment, registration and re-registration at re-delivery, if required by the Owners, shall be at the
413
Charterers’ expense and time. Any annual tonnage tax plus Agency fee and tonnage tax arising as a result
414
of a flag change undertaken by the Charterers shall be for the account of the Charterers during the Charter
415
period. Change of flag (including Bareboat flag registration) during charter period to be accepted/agreed by
416
Owners and Charterers which to be Charterers’ Account (which agreement not to be unreasonably withheld
417
or delayed).
418
 
Any cost and fee for initial registration of title to the Vessel and legal documentation cost for documenting the
419
lease and security to be Charterers’ account; however such cost not to exceed USD15,000.
420
421
(g)
Changes to the Vessel
422
 
423
 
Subject to-subclause 13(b) (New Class-and Other Regulatory Requirements), the Charterers shall make no
424
structural or substantial changes to the Vessel without the Owner’s prior written approval. If the Owner’s agree
425
to such changes, the Charterers shall, if-the Owners so require, restore the Vessel, prior to redelivery of the
426
Vessel, to its former condition.
427
428
 
Subclause 13(b) notwithstanding, Charterers are permitted to make improvements to the Vessel provided
429
 
cost of same to be for Charterers’ account.
430
431
 
Charterers to inform to the Owners any changes or improvement occurred and to provide any documents or
Copyright © 2017 Norwegian Shipbrokers’ Association.
All rights reserved.
 

PART II
BARECON 2017 STANDARD BAREBOAT CHARTER PARTY
432
 
certificate for such changes or improvement.
433
 
 
434
(h)
Use of the Vessel’s Outfit and Equipment
435
 
 
436
 
The Charterers shall have the use of all outfit, equipment and spare parts on board the Vessel at the time of
437
 
delivery, provided the same or their substantial equivalent shall be returned to the Owners on redelivery in
438
 
the same good order and condition as on delivery as the inventory (see Clause 8 (inventories)), ordinary
439
 
wear and tear excepted. The Charterers shall from time to time during the Charter Period replace such
440
 
equipment that become becomes unfit for use. The Charterers shall procure that all repairs to or replacement
441
 
of any damaged, worn or lost parts or equipment will be effected in such manner (both as regards
442
 
workmanship and quality of materials, including spare parts) as not to materially diminish the value of the
443
 
Vessel.
444
 
 
445
 
The Charterers have the right to fit additional equipment at their expense and risk but the Charterers shall
446
 
remove such equipment at the end of the Charter Period if requested by the Owners (acting reasonably). Any
447
 
hired equipment on board the Vessel at the time of delivery shall be kept and maintained by the Charterers
448
 
and the Charterers shall assume the obligations and liabilities of the Owners under any lease contracts in
449
 
connection therewith and shall reimburse the Owners for all expenses incurred in connection therewith, also
450
 
for any new hired equipment required in order to comply with any regulations.
451
 
 
452
(i)
Periodical Dry-Docking
453
 
 
454
 
The Charterers shall dry-dock the Vessel and clean and paint her underwater parts whenever the same may
455
 
be necessary, but not less than once every sixty (60) calendar months or such other period as may be required
456
 
by the Classification Society or Flag State.
457
 
 
458
 14.
Inspection during the Charter Period
459
 
 
460
 
Not more than once in each calendar year during the Charter Period, the Owners shall have the right at any
461
 
time after giving reasonable notice to the Charterers (provided that such inspection shall not delay or interfere
462
 
with the Vessel’s operation and/or trading and/or loading or unloading) to inspect the Vessel or instruct a duly
463
 
authorised surveyor to carry out such inspection on their behalf to ascertain its condition and satisfy
464
 
themselves that the Vessel is being properly repaired and maintained or for any other reasonable commercial
465
 
reason they consider necessary (provided it does not unduly interfere with the commercial operation of the
466
 
Vessel). The Owners’ representative and the surveyor shall sign the Charterers usual letter of indemnity prior
467
 
to embarkation.
468
 
 
469
 
The fees for such inspections shall be paid for by the Owners. All time used in respect of inspection shall be
470
 
for the Charterers’ account and form part of the Charter Period.
471
 
 
472
 
The Charterers shall also permit the Owners to inspect the Vessel’s class records, log books, certificates,
473
 
maintenance and other records whenever requested and shall whenever required by the Owners when
474
 
reasonably required upon the Owners’ request and shall furnish them the Owners with full information
475
 
regarding any casualties or other accidents or damage to the Vessel as may be requested by the Owners.
476
 
 
477
 15.
Hire
478
 
 
479
 (a)
The Charterers shall pay hire due to the Owners punctually in accordance with the terms of this Charter Party.
480
 
 
481
 (b)
The Charterers shall pay to the Owners for the hire of the Vessel a lump sum in the-amount the rate stated in
482
 
Box 17(i) which shall be payable not later than monthly every thirty (30) running days in advance, the first lump
483
 
sum being payable on the Delivery Date and hour of the Vessel’s delivery to the Charterers subsequent sums
484
 
falling due al consecutive monthly periods on the corresponding calendar day thereafter (each such day the
485
 
“Hire Payment Date”). Hire shall be paid continuously throughout the Charter Period, subject to the terms of
Copyright © 2017 Norwegian Shipbrokers’ Association.
All rights reserved.
 

PART II
BARECON 2017 STANDARD BAREBOAT CHARTER PARTY
486
 
this Charter Party. Each payment of Fixed Hire shall be deemed to have been applied on receipt by the
487
 
Owners towards reducing the Outstanding Principal.
488
 
 
489
 (c)
Payment of hire shall be made to the Owners’ bank account stated in Box 20.
490
 
 
491
 
All payments of Charter hire and any other payments due under this Charter shall be made without any set-
492
 
off whatsoever and free and clear of any withholding or deduction for, or on account of, any present or future
493
 
income, freight, stamp or other taxes, levies, imposts, duties, fees, charges, restrictions or conditions of any
494
 
nature unless required by law. If the Charterers are required by any authority in any country to make any
495
 
withholding or deduction from any such payment, the sum due from the Charterers in respect of such payment
496
 
will be increased to the extent necessary to ensure that, after the making of such withholding or deduction the
497
 
Owners receive a net sum equal to the amount which it would have received had no such deduction or
498
 
withholding been required to be made. If tax regulations change during the Charter Period, the Owners shall
499
 
notify the Charterers as soon as they become aware and will provide reasonable co-operation in order to
500
 
avoid any additional expenses to Charterers. However, where there is a failure to make punctual payment of
501
 
hire due to oversight, negligence, errors or omissions on the part of the Charterers or their bankers, the
502
 
Owners shall give the Charterers five (5) Banking Days to rectify the failure, and when so rectified within five
503
 
(5) Banking Days following the Owners’ notice, the payment shall stand as regular and punctual. Failure by
504
 
the Charterers to pay hire within five (5) Banking Days of their receiving the Owners’ notice as provided herein,
505
 
shall entitle the Owners to withdraw the Vessel from the service of the Charterers and terminate the Charter
506
 
without further notice.
507
 
 
508
(d)
If the Charterers fail to make punctual payment of hire due, the Owners shall give the Charterers threefive
509
 
(35) Banking Days written notice to rectify the failure, and when so rectified within those threefive (35) Banking
510
 
Days following the Owners’ notice, the payment shall stand as punctual.
511
 
 
512
 
Failure by the Charterers to pay hire due in full within threefive (35) Banking Days of their receiving a written
513
 
notice from Owners shall entitle the Owners, without prejudice to any other rights or claims the Owners may
514
 
have against the Charterers, to terminate this Charter Party at any time thereafter, as long as hire remains
515
 
outstanding.
516
 
 
517
(e)
If the Owners choose not to exercise any of the rights afforded to them by this Clause in respect of any
518
 
particular late payment of hire, or a series of late payments of hire, under the Charter Party, this shall not be
519
 
construed as a waiver of their right to terminate the Charter Party.
520
 
 
521
(f)
Any delay in payment of hire shall entitle the Owners to interest at the rate per annum as agreed in Box 19. If
522
 
Box 19 has not been filled in the one month Interbank offered rate in London (LIBOR or its successor) for the
523
 
currency state in Box 17, as quoted on the date when the hire fell due, increased by three (3) per cent, shall
524
 
apply.
525
 
 
526
(g)
Payment of interest due under Subclause 15(g) shall be made within seven (7) running days of the date of
527
 
the Owners’ invoice specifying the amount payable or, in the absence of an invoice, at the time of the next
528
 
Hire Payment Date.
529
 
 
530
(h)
Final payment of hire, if for a period of less than thirty (30) running daysone calendar month, shall be
531
 
calculated proportionally according to the number of days and hours remaining before redelivery to the
532
 
Owners or delivery by the Owners to the Charters should Charterers exercise the Purchase Option or Owners
533
 
exercise the Put Option and advance payment to be effected accordingly.
534
 
 
535
(i)
The Charterer may prepay the BBC Hire with at least two (2) month prior written notice to the Owners. Such
536
 
prepayment (the “Prepayment Amount’’) shall be in multiples of  USD 1,000,000 (United States Dollars one
537
 
million) and shall be maximum only two times per annum. Any such prepayments shall be applied against the
538
 
Outstanding Charter Hire Principal under this Charter Party and the fixed portion of BBC Hire (as referred as
539
 
“Fixed Rate” in Box 17 of Part I hereof) shall be recalculated (and reduced pro rata over the remaining BBC
Copyright © 2017 Norwegian Shipbrokers’ Association.
All rights reserved.
 

PART II
BARECON 2017 STANDARD BAREBOAT CHARTER PARTY
540
 
Period) with effect from the next month. The amounts of the Purchase Option Prices, Owners Put Option prices
541
 
and Minimum Insured Value shall be correspondingly recalculated (and reduced) according to the
542
 
Outstanding Charter Hire Principal after application of such Prepayment Amount. Each such prepayment of
543
 
the Charter Hire shall be permitted only if the Owner/Mortgagee and the Charterer shall mutually agree to the
544
 
amount of the remaining Charter Hire, Purchase Option Price, Owners Put Option Price and Minimum Insured
545
 
Value so recalculated.
546
 
 
547
(j)
Any moneys required under this Agreement to be paid by the Charterers to the Owners or any of them shall
548
 
be validly paid, if paid to the Owners’ bank account stated in Box 20, and by such payment to the Owners
549
 
bank account stated in Box 20 any payor shall be validly released from its obligation to make such payment.
550
 
 
551
 16.
Mortgage
552
 
 
553
 
(only to apply if Box 22 has been appropriately filled in)
554
 
 
555
 (a)*
 The Owners warrant that they have not effected any mortgage(s) of the Vessel and that they shall not effect
556
 
any mortgage(s) without the prior consent of the charterers, which shall not be unreasonably withheld.
557
 
 
558
(b)*
Subject to the provisions of any quiet enjoyment letter (including, for the avoidance of doubt, the QEL), the
559
 
Vessel chartered under this Charter Party is financed by a mortgage according to the Financial Instrument.
560
 
The Charterers undertake upon the written request of the Owners to comply, and provide such customary
561
 
information and documents relating to the Vessel and/or the Charterers as may be reasonably required  to
562
 
enable the Owners to comply with all such instructions or directions in regard to the employment, insurances
563
 
operation, repairs and maintenance of the Vessel as laid down in the Financial Instrument (which Owners
564
 
warrant are always in conformity with, and shall not impose any additional obligations on Charterers, with
565
 
regards to employment, insurance, operation, repairs and maintenance provisions of this Charter Party) or
566
 
as may be directed from time to time during the currency of the Charter Party by the mortgagee(s) in
567
 
conformity with the Financial Instrument, including the display or posting of such notices as the Mortgagees
568
 
may require. The Charterers confirm that, for this-purpose, they have acquainted themselves with all relevant
569
 
terms, conditions and provisions of the Financial Instrument and agree to acknowledge this in writing in any
570
 
form that may be required by the mortgagee(s).The Financial Instrument shall secure an amount of up to the
571
 
Outstanding Principal and shall be enforceable by the Mortgagee only if there has occurred and is continuing
572
 
a Charterers’ Event of Default under this Charter Party The Owners warrant that they have not effected any
573
 
mortgage(s) other than stated in Box 22 and that they shall not agree to any amendment of the mortgage(s)
574
 
referred to in Box 22 or effect any other mortgage(s) without the prior consent of the Charterers, which small
575
 
not be unreasonably withheld.
576
 
 
577
 
*(Optional, Subclauses 16(a) and 16(b) are alternatives; indicate alternative agreed in Box 22)
578
 
 
579
17.
Insurance See also Clause 47
580
 
 
581
(a)
General
582
 
 
583
 
(i) The value of the Vessel for hull and machinery (including increased value) and war risks insurance is the
584
 
sum stated in Box 23, or such other sum as the parties may from time to time agree in writing. The party
585
 
insuring the Vessel shall do so on such terms and conditions and with such insurers as the other party shall
586
 
approve in writing, which approve shall not be unreasonably withheld, and shall name the other party as co
587
 
assured.
588
 
 
589
 
(ii) [Notwithstanding that the pParties are co-assured], these insurance provisions shall neither exclude nor
590
 
discharge liability between the Owners and the Charterers under this Charter Party, but are intended to secure
591
 
payment of the loss insurance proceeds as a first resort to make good the Owners’ loss. If such payment is
592
 
made to the Owners it shall be treated as satisfaction (but not exclusion or discharge) of the Charterers
593
 
liability towards the Owners. For the avoidance of doubt, such payment is no bar to a claim by the Owners
Copyright © 2017 Norwegian Shipbrokers’ Association.
All rights reserved.
 

PART II
BARECON 2017 STANDARD BAREBOAT CHARTER PARTY
594
 
and/or their insurers against the Charterers to seek indemnity by way of subrogation
 595
 
 
596
 
(iii) Nothing herein shall prejudice any right of recovery of the Owners or the Charterers (or their insurers)
597
 
against third parties.
598
 
 
599
(b)*
Charterers to Insure
600
 
 
601
 
(i) During the Charter Period the Vessel shall be kept insured by the Charterers at their expense against hull
602
 
and machinery, war, and protection and indemnity risks (and any risks against which it is compulsory to insure
603
 
for the operation of the Vessel, including maintaining financial security in accordance with subclause 13(c)
604
 
(Financial Security)).
605
 
 
606
 
(ii) Such insurances shall be arranged by the Charterers to protect the interests of the Owners and the
607
 
Charterers and the mortgagee(s) (if any), and the Charterers shall be at liberty to protect under such
608
 
insurances the interests of any managers manager they may appoint.
609
 
 
610
 
(iii) The Charterers shall upon the written request of the Owners, provide information and promptly execute
611
 
such customary documents as may be reasonably required to enable the Owners to comply with the insurance
612
 
provisions of the Financial Instrument, provided that such documents are not prejudicial to the Charterers’
613
 
interests.
614
 
 
615
 (c)*
Owners to Insure
616
 
 
617
 
(i) During the Charter Period the Vessel shall be kept insured by the Owners at their expense against hull and
618
 
machinery and war risks. The Charterers shall progress claims for reoovery against any third parties for the
619
 
benefit of the Owners’ and the Charterers’ respective interests
620
 
 
621
 
(ii) During the Charter Period the Vessel shall be kept insured by the Charterers at their expense against
622
 
Protection and Indemity risk (and any risks against which it is compulsory to insure for the operation of the
623
 
Vessel, including maintaining financial security in accordance with subclause 13(c) (Financial Security)
624
 
 
625
 
(iii) In the-event that any act or negligence of the Charterers prejudices any of the insurances herein provided,
626
 
the Charterers shall pay to the Owners all losses and indemnify the Owners against all claims and demands
627
 
which would otherwise have been covered by such insurances.
628
 
 
629
 
*Subclauses 17(b) and 17(c) are alternatives, state alternative agreed in Box 24. If Box 24 is not filled in, then
630
 
subclause 17(b) (Charterers to Insure) shall apply.
631
 
 
632
 18. 
Repairs
633
 
 
634
(a)
Subject to the provisions of any Financial Instrument, and the approval of the Owners, the Charterers shall
635
effect all the insured repairs, and undertake settlement of all miscellaneous expenses in connection with such
636
repairs as well as all insured charges, expenses and liabilities
637
 
 
638
To the extent of coverage under the insurances provided for under the provisions of subclause 17(c) (Owners
639
 
to Insure), the Charterers shall be reimbursed under the Owners’ insurances for such expenditures upon
640
 
presentation of accounts.
641
 
 
642
  (b)
The Charterers shall remain responsible for and effect repairs and settlement of costs and expenses incurred
643
thereby in respect of repairs not covered by the insurances and/o not exceeding any deductibles provided for
644
in the insurances.
645
 
646
 (c)
 All time used for repairs under the provisions of subclauses 18(a) and 18(b) and for repairs of Latent Defects
647
according to Clause 3 (Delivery) above including any deviation, shall be for the Charterer’s account and shall
 
 
 
 
Copyright © 2017 Norwegian Shipbrokers’ Association.
All rights reserved.
 

PART II
BARECON 2017 STANDARD BAREBOAT CHARTER PARTY
648
 
form part of the Charter Period.
649
 
 
650
19.
Total loss
651
 
 
652
(a)
The Charterers shall be liable to the Owners by way of damages if the Vessel becomes a Total Loss. Subject
653
 
to the provisions of any Financial Instrument, if the Vessel becomes a Total Loss, all insurance payments for
654
 
such loss shall be paid in accordance with Clause 47 to the Owners (or the Mortgagees as assignees thereof)
655
 
who shall distribute the monies between the Owners (or the Mortgagees as assignees thereof) and the
656
 
Charterers in accordance with Clause 47according to their respective interests, which (distribution) shall
657
 
satisfy and discharge the Charterers’ liability to the Owners under the terms hereof. The Charterers undertake
658
 
to notify the Owners and the mortgagee(s), if any, of any occurrences in consequence of which the Vessel is
659
 
likely to become a Total Loss. 
660
 
 
661
(b)
Notwithstanding any other clause herein, it is recognised that the Charterers have a continuing obligation to
662
 
protect and preserve the Vessel as an asset of the Owners. The Charterers shall have a continuing duty after
663
 
the termination of the Charter Party to preserve and present claims on behalf of Owners and Charterers and/or
664
 
any subrogated insurers against any third party held responsible for the Total Loss during the Charter Period
665
 
and account for any recovery achieved. 
666
 
 
667
(c)
 The Owners or the Charterers, as the case may be, shall upon the request of the other pParty (acting
668
 
reasonably), promptly execute such documents as may be required to enable the other pParty to abandon
669
 
the Vessel to the insurers and claim a constructive total loss. 
670
 
 
671
20.
 Lien
672
 
 
673
 
The Owners shall have a lien upon all cargoes, hires and freights (including deadfreight and demurrage)
674
 
belonging or due to the Charterers or any sub-charterers, or to the extent permitted by law or equity, for any
675
 
amounts due under this Charter Party and the Charterers shall have a lien on the Vessel for all monies paid
676
 
in advance and not earned. The Owners and the Charterers shall provide the amount of any such lien upon
677
 
the other pParty’s reasonable request, provided that such request shall not be made by either pParty more
678
 
than twice in any calendar year during the Charter Period
679
 
 
680
21.
 Non-Lien
681
 
 
682
 
The Charterers will not suffer, nor permit to be continued, any lien or encumbrance incurred by them or their
683
 
agents, which might have priority over the title and interest of Owners in the Vessel (other than any Permitted
684
 
Liens).
685
 
 
686
22.
Indemnity
687
 
 
688
(a)
The Charterers shall indemnify the Owners against any direct and proven loss, damage or expense arising
689
 
out of or in relation to the operation of the Vessel by the Charterers, and against any lien of whatsoever nature
690
 
arising out of an event occurring during the Charter Period (other than a Permitted Lien). This shall include
691
 
indemnity for any direct and proven loss, damage or expense arising out of or in relation to any international
692
 
convention which may impose liability upon the Owners or sanctions implemented by the United Nations,
693
 
European Union, United States of America or United Kingdom or Japan.
694
 
 
695
(b)
Without prejudice to the generality of the foregoing, the Charterers agree to indemnify the Owners against all
696
 
direct and proven consequences or liabilities arising from the Master, officers or agents signing bills of lading
697
 
or other documents. 
698
 
 
699
(c)
 If the Vessel is arrested or otherwise detained for any reason whatsoever other than those covered in
700
 
subclause (d), the Charterers shall at their own expense take all reasonable steps to secure that within a
701
 
reasonable time the Vessel is released, including the provision of bail.
Copyright © 2017 Norwegian Shipbrokers’ Association.
All rights reserved.
 

PART II
BARECON 2017 STANDARD BAREBOAT CHARTER PARTY
702
 
 
703
 (d) If the Vessel is arrested or otherwise detained by reason of a claim or claims against the Owners and/or any
704
 
other company or other entity which belongs to the same group of companies of which the Owners are part,
705
 
or which is otherwise associated or related lo, or affiliated with, the Owners, the Owners shall at their own
706
 
expense take all reasonable steps to secure that within a reasonable time the Vessel is released, including
707
 
the provision of bail. If within a 45 days period after such arrest or detainment, the Vessel is not so released,
708
 
the Charterers may, at their option but without obligation to do so, take all necessary steps to obtain such
709
 
release, and all expenses of the Charterers in connection therewith shall be reimbursed by the Owners on
710
 
demand, and the Owners shall take reasonable steps to minimise any costs to the Charterer arising out of
711
 
any such arrest.
712
 
713
 
In such circumstances the Owners shall indemnify the Charterers against any loss, damage or expense
714
 
incurred by the Charterers (including hire paid under this Charter Party) as a direct consequence of such
715
 
arrest or detention. 
716
 
 
71’7
(e)
The indemnities of the Charterers under this Clause 22 shall not extend to events occurring after the end of
718
 
Charter Period, but as to any event occurring before the end of the Charter Period shall continue in full force
719
 
and effect notwithstanding the termination of the chartering of the Vessel under this Charter Party for any
720
reason until four (4) years from the early termination of this Charter or the end of the Charter Period or the
721
 
sale of the Vessel by the Owners to any person, provided that if, prior to the expiry of the aforesaid period of
722
 
four (4) years, any event or dispute arises in respect of which the Owners are to be indemnified under this
723
 
Clause 22, the indemnities of the Charterers under this Clause 22 shall continue in full force and effect until
724
 
the Owners have been fully indemnified in accordance with this Clause 22.
725
 
 
726
(f)
The Owners will notify the Charterers as soon as they become aware of any claim against the Owners which
727
 
may give rise to indemnification under this Clause 22. The Owners will not settle any claims or discharge any
728
 
court judgments in respect of any claim unless it has first negotiated with the Charterers in good faith for a
729
 
reasonable period of time, provided that the Owners may settle any claim or discharge any court judgment if
730
 
failure so to do would give rise to substantial losses or damages for, or reputational damage to, the Owners.
731
 
 
732
(g)
The Owners will not, and the Charterers will, be responsible for the conduct of any claim or potential claim that
733
 
may give rise to an indemnity liability of the Charterers under this Clause 22 and the Charterers may be entitled
734
 
(at their own cost and expense) to take such actions as they may reasonably deem fit to defend or avoid
735
 
liability under any such claim or take action against any third party in respect of liability under any such claim.
736
 
 
737
(h)
 The Charterer to undertake to the Owner and the Owner’s Financiers to protect, cover, compensate for any
738
 
claim, damage and loss caused by oil pollution and any cargo claim (clean or dirty).
739
 
 
740
23.
 Salvage
741
 
 
742
 
All salvage and towage performed by the Vessel shall be for the Charterers’ benefit and the cost of repairing
743
 
damage occasioned thereby shall be borne by the Charterers. 
744
 
 
745
24.
 Wreck Removal
746
 
747
 
If the Vessel becomes a wreck, or any part of the Vessel is lost or abandoned, and is an obstruction to
748
 
navigation or poses a hazard and has to be raised, removed, destroyed, marked or lit by order of any lawful
749
 
authority having jurisdiction over the area or as a result of any applicable law, the Charterers shall be liable
750
 
for any and all direct and documented expenses in connection with raising, removal, destruction, lighting or
751
 
making of the Vessel and shall indemnify the Owners against any direct and proven sums whatsoever, which
752
 
the Owners become liable to pay as a consequence. 
753
 
 
754
25.
General Average
755
 
 
                 
Copyright © 2017 Norwegian Shipbrokers’ Association.
All rights reserved.
 

PART II
BARECON 2017 STANDARD BAREBOAT CHARTER PARTY
756
The Owners shall not contribute to General Average.
757
758
26.
Assignment, Novation, Sub-Charter and Sale See also Clauses 43 and 44
759
760
(a)
The Charterers shall not assign or novate this Charter Party nor sub-charter the Vessel on a bareboat basis
761
except with the prior consent in writing of the Owners, which shall not be unreasonably withheld or delayed,
762
and subject to such terms and conditions as the Owners shall approve.
763
764
(b)
 See also Clauses 43 and 44. The Owners shall not sell the Vessel during the currency of this Charter Party
765
except with the prior written consent of the Charterers, which shall not be unreasonably withheld, and subject
766
to the buyer accepting a novation of this Charter Party.
767
768
(c)    The Owners shall be entitled to assign their rights under this Charter Party.
769
770
27.
Performance Guarantee See Clause 43
771
772
(Optional, to apply only if Box 25 filled in)
773
774
The Charterers undertake to furnish, before delivery of the Vessel, a guarantee or bond in the amount of and
775
from the entity stated in Box 25 in a form acceptable to the Owners as guarantee for full performance of their
776
obligations under this Charter Party.
777
778
28.
Anti-Corruption
779
780
(a)
The pParties agree that in connection with the performance of this Charter Party they shall each:
781
782
(i) comply at all times with all applicable anti-corruption legislation and have procedures in place that are, to
783
the best of its knowledge and belief, designed to prevent the commission of any offence under such legislation
784
by any member of its organisation and/or by any person providing services for it or on its behalf; and
785
786
(ii) make and keep books, records, and accounts which in reasonable detail accurately and fairly reflect the
787
transactions in connection with this Charter Party.
788
789
(b)
If either pParty fails to comply with any applicable anti-corruption legislation, it shall defend and indemnify the
790
other pParty against any fine, penalty, liability, loss or damage and for any related costs (including, without
791
limitation, court costs and legal fees) arising from such breach.
792
793
(c)
Without prejudice to any of its other rights under this Charter Party, either pParty may terminate this Charter
794
Party without incurring any liability to the other pParty if:
795
796
(i) at any time the other pParty or any member of its organisation has committed a breach of any applicable
797
anti-corruption legislation in connection with this Charter Party; and
798
799
(ii) such breach causes the non-breaching pParty to be in breach of any applicable anti-corruption legislation.
800
801
Any such right to terminate must be exercised without undue delay.
802
803
(d)
Each pParty represents and warrants that in connection with the negotiation of this Charter Party neither it
804
nor any member of its organisation has committed any breach of applicable anti-corruption legislation. Breach
805
of this subclause (d) shall entitle the other pParty to terminate the Charter Party without incurring any liability
806
to the other.
807
808
29.
Sanctions and Designated Entitles
809
Copyright © 2017 Norwegian Shipbrokers’ Association.
All rights reserved.
 

PART II
BARECON 2017 STANDARD BAREBOAT CHARTER PARTY
810
(a)
The provisions of this clause shall apply in relation to any applicable sanction, prohibition or restriction
811
imposed on any specified persons, entitles or bodies including the designation of specified vessels or fleets
812
and Owners or Charterers under United Nations Resolutions or trade or economic applicable sanctions, laws
813
or regulations of the European Union or the United States of America or the United Kingdom or Japan.
814
815
(b)
The Owners and Charterers respectively warrant for themselves (and in respect of any sub-charterer or
816
manager which belongs to the same group of companies of which the Charterers are part, the Charterers
817
hereby undertake to take necessary steps to ensure) (and in the case of any sub-charter, the Charterers
818
 further warrant in respect of any sub-charterers, shippers, receivers, or cargo interests) that at the date of this
819
fixture and throughout the duration of this Charter Party they are not subject to any of the sanctions,
820
prohibitions, restrictions or designation referred to in subclause (a) which prohibit or render unlawful any
821
performance under this Charter Party.The Owners further warrant that the Vessel is not a designated vessel.
822
823
(c)
If at any time during the performance of this Charter Party either pParty becomes aware that the other pParty
824
is in breach of warranty in this Clause, the pParty not in breach shall comply with the laws and regulations of
825
any Government to which that pParty or the Vessel is subject, and follow any orders or directions which may
826
be given by any body acting with powers to compel compliance, including where applicable the Owners’ Flag
827
State. In the absence of any such orders, directions, law or regulations, the pParty not in breach may, in its
828
option, terminate the Charter Party forthwith in accordance with Clause 31 (Termination). However, In the
829
event that a sub-charterer managing or other parties who have any contractual relationships with the
830
Charterers in respect of the Vessel are subject to sanctions, prohibitions, restrictions or designation referred
831
to in subclause (a), Owners may not terminate the Charter Party before giving Charterers a reasonable period
832
to take necessary measures to remedy such breach and to ensure such a breach does not continue.
833
834
(d)
If, in compliance with the provisions of this Clause, anything is done or is not done, such shall not be deemed
835
a deviation but shall be considered sue fulfilment of this Charter Party.
836
837
(e)
Notwithstanding anything in this Clause to the contrary, the Owners or the Charterers shall not be required to
838
do anything which constitutes a violation of the laws and regulations of any state to which either of them is
839
subject.
840
841
(f)
The Owners or the Charterers shall be liable to indemnify the other pParty against any and all direct and
842
proven claims, losses, damage, costs and fines whatsoever suffered by the other pParty resulting from any
843
breach of warranty in this Clause. If such calling constitutes a breach of sanctions, then Charterers to
844
undertake to indemnify Owners against all direct and proven Joss and costs sustained as a result of such
845
violation. Charterers shall indemnify the Owners and hold the Owners harmless in respect of any direct and
846
proven liability, loss, damage or expenses of whatsoever nature which the Owners may sustain resulting from
847
the operation of the Vessel (including but not limited to hereunder those arising from Vessel entering/operating
848
in war area or warlike area).
849
 
 
850
30.
Requisition/Acquisition
851
 
 
852
(a)
 In the event of the requisition for hire of the Vessel by any governmental or other competent authority at any
853
time during the Charter Period, this Charter Party shall not be deemed to be frustrated or otherwise terminated.
854
The Charterers shall continue to pay hire according to the Charter Party until the time when the Charter Party
855
would have expired or terminated pursuant to any of the provisions hereof. However, if any requisition hire or
856
compensation is received by the Owners for the remainder of the Charter Period or the period of the requisition,
857
whichever is shorter, it shall be payable by the Owners to the Charterers.
858
859
(b)
In the event of the Owners being deprived of their ownership in the Vessel by any compulsory acquisition of
860
the Vessel or requisition for title by any governmental or other competent authority (hereinafter referred to as
861
“Compulsory Acquisition”), then, irrespective of the date during the Charter Period when Compulsory
862
Acquisition may occur, this Charter Party shall be deemed terminated as of the date of such Compulsory
863
Acquisition. In such event hire to be considered as earned and to be paid up to the date and time of such
Copyright © 2017 Norwegian Shipbrokers’ Association.
All rights reserved.
 

PART II
BARECON 2017 STANDARD BAREBOAT CHARTER PARTY
864
 
Compulsory Acquisition. The Owners shall be entitled to any compensation received for such Compulsory
865
 
Acquisition, which shall be applied towards reducing the Outstanding Principal.
866
 
 
867
31. 
 Termination
868
 
869
(a)
 Charterers’ Default
870
 
 
871
 
The Owners shall be entitled to terminate this Charter Party by written notice to the Charterers and to claim
872
 
damages including, but not limited to, for the loss of the reminder remainder of the Charter Party under the
873
 
following circumstances, each of which shall be a “Charterers’ Event of Default” for the purposes of this
874
 
Charter Partyand to claim damages including,-but-not limited to, for the loss of the reminder--remainder of the
875
 
Charter Party:
876
 
 
877
 
(i) Non-payment of hire (see Clause15 (Hire)), subject to all applicable grace periods.
878
879
 
(ii) Charterers’ failure to comply with the requirements of:
880
 
 
881
 
(1) 
Clause 11 (Trading Restrictions); or
882
 
 
883
 
(2)  Subclause 17(b) (Charterers to Insure)
884
 
885
 
and, if capable of remedy, such requirement is not remedied within 30 days of the earlier of the date on which
886
 
(A) the Charterers became aware of the failure to comply and (B) the Charterers’ received the Owners’ written
887
 
notification to do so.
888
 
 
889
 
(iii) The Charterers do not rectify any failure to comply with the requirements of subclause 13(a) (Maintenance)
890
 
as soon as practically possible after the Owners have notified them to do so, unlessand in any event so that
891
 
the Vessel’s insurance cover is not prejudiced by such failure.
892
 
 
893
 
(iv) If the Charterers are in breach of any material provisions of this Charter Party other than those referred
894
 
to in Clause 31 (a)(i), (ii) and (iii) above, and if capable of remedy, such breach is not rectified by the Charterers
895
 
within 30 days of the earlier of the date on which (A) the Charterers became aware of the failure to comply
896
 
and (B) the Charterers’ received the Owners’ written notification do to so. 
897
 
 
898
(b)
 Owners’ Default
899
 
900
 
The Charterers shall be entitled to terminate this Charter Party with immediate effect by written notice to the
901
 
Owners and to claim damages including, but not limited to, for the loss of the remainder of the Charter Party:
902
 
 
903
 
(i) If the Owners shall by any act or omission be in breach of their obligations under this Charter Party to the
904
 
extent that the Charterers are deprived of the use, operation, possession or enjoyment of the Vessel and such
905
 
breach continues for a period of fourteenthirty (1430) running days after written notice thereof has been given
906
 
by the Charterers to the Owners; or 
907
 
 
908
 
(ii) if the Owners fail to arrange or maintain the insurances in accordance with subclause17(c) (Owners to 
909
 
Insure).
910
 
 
911
(c)
Loss of Vessel 
912
 
 
913
 
This Charter Party shall be deemed to be terminated, without prejudice to any accrued rights or obligations,
914
 
if the Vessel becomes lost either when it has become an actual total loss or agreement has been reached
915
 
with the Vessel’s underwriters in respect of its constructive total loss or if such agreement with the Vessel’s
916
 
underwriters is not reached it is adjudged by a competent tribunal that a constructive loss of the Vessel has
917
 
occurred, or has been declared missing. The date upon which the Vessel is to be treated as declared missing
Copyright © 2017 Norwegian Shipbrokers’ Association.
All rights reserved.
 

PART II
BARECON 2017 STANDARD BAREBOAT CHARTER PARTY
918
 
shall be ten (10) days after the Vessel was last reported or when the Vessel is recorded as missing by the
919
 
Vessel’s underwriters, whichever occurs first. 
920
 
 
921
(d)
Bankruptcy
922
 
 
923
 
Either pParties shall be entitled to terminate this Charter Party with immediate effect by written notice to the
924
 
other pParties if that other pParties has a petition presented for its winding up or administration or any other
925
 
action is taken with a view to its winding up (otherwise than for the purpose of solvent reconstruction or
926
 
amalgamation), or becomes bankrupt or commits an act of bankruptcy, or makes any arrangement or
927
 
composition for the benefit or creditors, or has a receiver or manager or administrative receiver or
928
 
administrator or liquidator appointed in respect of any of its assets, or suspends payments, or anything
929
 
analogous to any of the foregoing under the law of any jurisdiction happens to it, or ceases or threatens to
930
 
cease to carry on business. 
931
 
 
932
(e)
The termination of this Charter Party shall be without prejudice to all rights accrued due between the pParties
933
 
prior to the date of termination and to any claim that pParty might have. 
934
 
 
935
32.
 Repossession
936
 
 
937
 
In the event of the early termination of this Charter Party in accordance with the applicable provisions of this
938
 
Charter Party, the Owners shall have the right to repossess the Vessel from the Charterers at its current or
939
 
next port of call, or at a port or place convenient to them without hindrance or interference by the Charterers,
940
 
courts or local authorities. Pending physical repossession of the Vessel, the Charterers shall hold the Vessel
941
 
as gratuitous bailee only to the Owners. The Owners shall arrange for an authorised representative to board
942
 
the deemed to be repossessed by the Owners from the Charterers upon the boarding of the Vessel by the
943
 
Owners’ representative. All arrangements and expenses relating to the settling of wages, disembarkation and
944
 
repatriation of the Crew shall be the sole responsibility of the Charterers. 
945
 
 
946
33.
 BIMCO Dispute Resolution Clause 2017
947
948
(a)* This Charter Party shall be governed by and construed in accordance with English law and any dispute arising
949
 
out of or in connection with this Charter Party shall be referred to arbitration in London in accordance with
950
 
the Arbitration Act 1996 or any statutory modification or re-enactment thereof save to the extent necessary to
951
 
give effect to the provisions of this Clause. 
952
 
 
953
 
The arbitration shall be conducted in accordance with the London Maritime Arbitrators Association (LMAA)
954
 
Terms current at the time when the arbitration proceedings are commenced.
955
 
956
 
The reference shall be to three arbitrators. A pParty wishing to refer a dispute to arbitration shall appoint its
957
 
arbitrator and send notice of such appointment in writing to the other pParty requiring the other pParty to
958
 
appoint its own arbitrator within fourteen (14) calendar days of that notice and stating that it will appoint its
959
 
arbitrator as sole arbitrator unless the other pParty appoints its own arbitrator and gives notice that it has done
960
 
so within the fourteen (14) days specified. If the other pParty does not appoint its own arbitrator and give
961
 
notice that it has done so within the fourteen (14) days specified, the pParty referring a dispute to arbitration
962
 
may, without the requirement of any further prior notice to the other pParty, appoint its arbitrator as sole
963
 
arbitrator and shall advise the other pParty accordingly. The award of the sole arbitrator shall be binding on
964
 
both pParties as if he had been appointed by agreement. 
965
 
 
966
 
Nothing herein shall prevent the pParties agreeing in writing to vary these provisions to provide for the
967
 
appointment of a sole arbitrator. 
968
 
 
969
 
In cases where neither the claim nor any counterclaim exceeds the sum of USD 100,000 (or such other sum
970
 
as the pParties may agree) the arbitration shall be conducted in accordance with the LMAA Small Claims
971
 
Procedure current at the time when the arbitration proceedings are commenced.
Copyright © 2017 Norwegian Shipbrokers’ Association.
All rights reserved.
 

PART II
BARECON 2017 STANDARD BAREBOAT CHARTER PARTY
972
 
 
973
 
In cases where the claim or any counterclaim exceeds the sum agreed for the LMAA Small Claims Procedure
974
 
and neither the claim nor any counterclaim exceeds the sum of USO 400,000 (or such other sum as the
975
 
pParties may agree) the arbitration shall be conducted in accordance with the LMAA Intermediate Claims
976
 
Procedure current at the time when the arbitration proceedings are commenced.
977
 
 
978
(b)* This Charter Party shall be governed by U.S. maritime law or, if this Charter Party is not a maritime contract
979
 
under U.S. law, by the laws of the state of New York. Any dispute arising out of or in connection with this
980
 
Charter Party shall-be referred to three (3) persons at New York, one to be appointed by each of the parties
981
 
hereto, and the third by the two so-chosen. The decision of the arbitrators or any two of them shall be final,
982
 
and for the purposes of enforcing any award, judgment may be entered on an award by any court of
983
 
competent jurisdiction. The proceedings shall be conducted in accordance with the SMA Rules current as of
984
 
the date of this Charter Party. 
985
 
 
986
 
In cases where neither the claim nor any counterclaim exceeds the sum of USD 100,000 (or such other sum 
987
 
as the parties may agree) the arbitration shall be conducted in accordance with the SMA Rules for Shortened
988
 
Arbitration Procedure current as of the date of this-Charter Party.
989
 
 
990
(c)* This charter Party shall be governed by-and construed in accordance with Singapore**/English**law.
991
 
 
992
 
Any dispute arising out of or in connection with this Charter Party, including any question regarding its
993
 
existence, validity or termination shall be referred to and finally resolved by arbitration in Singapore in    
994 
 
accordance with the Singapore lnternational Arbitration Act (Chapter143A) and any statutory modification or
995
 
re-enactment thereof save to the extent necessary to give effect to the provisions of this Clause.
996
997
 
The arbitration shall be conducted in accordance with the Arbitration Rules of the Singapore Chamber of
998
 
Maritime Arbitration (SCMA) current at the time when the arbitration proceedings are commenced. 
999
 
 
1000
 
The reference to arbitration of disputes under this Clause shall be to three arbitrators. A party wishing to refer
1001
 
a dispute to arbitration shall appoint its arbitrator and send notice of such appointment in Writing to the other
1002
 
party requiring the other party to appoint its own arbitrator and give notice that it has done so within fourteen
1003
 
(14) calendar days of that notice and stating that it will appoint its own arbitrator as sole arbitrator unless the
1004
 
other party appoints its own arbitrator and gives notice that it has done so within the fourteen (14) days
1005
 
specified. If the other party does not give notice that it has done so within the fourteen (14) days specified,
1006
 
the party referring a dispute to arbitration-may, without the requirement of any further prior notice to the other
1007
 
party, appoint its arbitrator as sole arbitrator and shall advise the other party accordingly. The award of a sole
1008
 
arbitrator shall be binding on both parties as if he had been appointed by agreement.
1009
 
 
1010
 
Nothing herein shall prevent the parties agreeing in writing to vary these provisions to provide for the
1011
 
appointment of a sole arbitrator. 
1012
 
1013
 
In cases where neither the claim nor any counterclaim exceeds the sum of USD 150,000 (or such ether sum
1014
 
as the parties may agree) the arbitration shall be conducted before a single-arbitrator in accordance with the
1015
 
SCMA Small Claims Procedure current at the time when the arbitration proceedings are commenced.
1016
 
1017
 
**Delete whichever does not apply. If neither or both are deleted, then English law shall apply by default.
1018
 
 
1019
(d)* This Charter Party shall be governed by and construed in accordance with the laws of the place mutually
1020
 
agreed by the Parties and any dispute arising out of or in connection with this Charter Party shall be referred
1021
 
the arbitration at a mutually agreed place, subject to the procedures applicable there.
1022
 
 
1023
 
(e) The pParties may agree at any time to refer to mediation any difference and/or dispute arising out of or in
1024
 
connection with this Charter Party. In the case of any dispute in respect of which arbitration has been
1025
 
commenced under subclause (a), (c) or (d), the following shall apply:
Copyright © 2017 Norwegian Shipbrokers’ Association.
All rights reserved.
 

PART II
BARECON 2017 STANDARD BAREBOAT CHARTER PARTY
1026
 
 
1027
 
(i) Either pParty may at any time and from time to time elect to refer the dispute or part of the dispute to
1028
meditation by service on the other pParty of a written notice (the “Mediation Notice”) calling on the other 
1029
 
pParty to agree to mediation.
1030
 
 
1031
 
(ii) The other pParty shall thereupon within fourteen (14) calendar days of receipt of the Mediation Notice
1032
 
confirm that they agree to mediation, in which case the pParties shall thereafter agree a mediator within a 
1033
 
further fourteen (14) calendar days, falling which on the application of either pParty a mediator will be
1034
 
appointed promptly by the Arbitration Tribunal(” the Tribunal”) or such person as the Tribunal may designate
1035
 
for that purpose. The mediation shall be conducted in such place and in accordance with such procedure and 
1036
 
on such terms as the pParties may agree or, in the event of disagreement, as may be set by the mediator.
1037
 
 
1038
 
(iii) If the other pParty does not agree to mediate, that fact may be brought to the attention of the Tribunal and
1039
 
may be taken into account by the Tribunal when allocating the costs of the arbitration as between the pParties.
1040
 
 
1041
 
(iv) The mediation shall not affect the right of either pParty to seek such relief or take such steps as it considers
1042
necessary to protect its interest. 
1043
 
 
1044
 
(v) Either pParty may advise the Tribunal that they have agreed to mediation. The arbitration procedure shall
1045
 
continue during the conduct of the mediation but the Tribunal may take the mediation timetable into account
1046
 
when setting the timetable for steps in the arbitration.
1047
 
 
1048
 
(vi) Unless otherwise agreed or specified in the mediation terms, each pParty shall bear its own costs incurred
1049
 
in the mediation and the pParties shall share equally the mediator’s costs and expenses.
1050
 
 
1051
 
(vii) The mediation process shall be without prejudice and confidential and no information or documents
1052
 
disclosed during it shall be revealed to the Tribunal except to the extent that they are disclosable under the
1053
 
law and procedure governing the arbitration.
1054
 
 
1055
 
(Note: The pParties should be aware that the mediation process may not necessarily interrupt time limits.)
1056
 
 
1057
 
*Subclauses (a), (b), (c) and (d) are alternatives; indicate alternative agreed in Box 26.
1058
 
 
1059
 
If Box 26 in Part I is not appropriately filled in, subclause (a) of this Clause-shall apply. Subclause (e) shall
1060
 
apply in all cases except for alternative (b) 
1061
 
1062
34.
Notice
1063
 
 
1064
 
All notices, requests and other communications required or permitted by any clause of this Charter Party
1065
 
shall be given in writing and shall be sufficiently given or transmitted if delivered by hand, email, express 
1066
 
courier service or registered mail and addressed if to the Owners as stated in Box 30 or such other address
1067
 
or email address as the Owners may hereafter designate in writing, and if to the Charterers as stated in Box
1068
 
31 or such other address or email address as the Charterers may hereafter designate in writing. Any such
1069
 
communication shall be deemed to have been given on the date of actual receipt by the pParty to which it is
1070
 
addressed.
1071
 
 
1072
35.
Partial Validity
1073
 
 
1074
 
If by reason of any enactment or judgment any provision of this Charter Party shall be deemed or held to be
1075
 
illegal, void or unenforceable in whole or in part, all other provisions of this Charter Party shall be unaffected 
1076
 
thereby and shall remain in full force and effect.
1077
 
 
1078
36.
 Entire Agreement
1079
 
Copyright © 2017 Norwegian Shipbrokers’ Association.
All rights reserved.
 

PART II
BARECON 2017 STANDARD BAREBOAT CHARTER PARTY
1080
 
 This Charter Party is the entire agreement of the parties, which supersedes all previsions written or oral 
1081
 
understandings and which may not be modified except by a written amendment signed by both parties.
1082
 
 
1083
37. Headings
1084
 
 
1085
 
The headings of this Charter Party are for identification only and shall not be deemed to be part hereof or be 
1086
 
taken into consideration in the interpretation or construction of this Charter Party.
1087
 
 
1088
38.
 Singular/Plural
1089
 
 
1090
 
The singular includes the plural and vice versa as the context admits or requires
Copyright © 2017 Norwegian Shipbrokers’ Association.
All rights reserved.
 

PART III
BARECON 2017 STANDARD BAREBOAT CHARTER PARTY
PROVISIONS TO APPLY FOR NEWBUILDING VESSELS ONLY
(OPTINAL, only applicable if 27 has been completed)
1091
1.
Specifications and Building Contract
1092
 
 
1093
(a)   The Vessel shall be constructed in accordance with the building contract between the Builders and the Owners
1094
 
including the specifications and plans incorporated therein (“Building Contract”). The Owners shall provide
1095
 
the Charterers with copy of the Building Contract to the extent relevant to this Charter Party.
1096
 
 
1097
(b)   No variations shall be made to the Building Contract without the Charterers’ prior written consent. The
1098
 
Charterers shall be entitled to request change orders in accordance with the Building Contract. Any additional
1099
 
costs or consequences due to Charterers’ change orders shall be borne by the Charterers.  
1100
 
 
1101
(c)    The Owners and the Charterers will liaise and cooperate in all matters regarding the construction of the Vessel
1102
 
and the Building Contract. The Charterers shall have the right to send their representative to the Builders’
1103
 
yard to inspect the Vessel during its construction.
1104
 
 
1105
(d)   The Owners shall assign their guarantee rights under the Building Contract to the Charterers, if permitted. If
1106
 
not permitted, the Owners shall exercise their guarantee rights against the Builders for the benefit of the
1107
 
Charterers. The Charterers shall be obliged to accept such sums as the Owners are reasonably able to 
1108
 
recover under the guarantee provisions of the Building Contract.
1109
 
 
1110
2.      Delivery and Cancellation
1111
 
1112   
(a)   (i) Subject to the provisions of Clause 3 (Liquidated Damages) hereunder, the Charterers shall be obliged to
1113
 
accept the Vessel from the Owners, constructed and delivered in accordance with the Building Contract and 
1114
 
including buyers supplies, on the date of delivery  by the Builders. The Charterers undertake that having
1115
 
accepted the Vessel they will not thereafter raise any claims against the Owners in respect of the Vessel’s
1116
 
performance or specification of defects, if any:
1117
 
1118
(ii) The date of delivery for purpose of this Charter shall be the date (“the Delivery Date”) when the Vessel is
1119
 in fact delivered by the Builders to the Owners in accordance  with the Building Contract, whether that is before 
1120
or after the scheduled delivery date under the Building Contract. The Owners shall be under no responsibility.
1121
for any delay whatsoever in delivery of the Vessel to the Charterers under this Charter Party, except to the 
1122
extent caused solely by the Owners’ acts or omissions resulting in a default by the Owners under the Building
1123
Contract. The Owners shall be responsible to the Charterers for any direct losses incurred by the Charterers, 
1124
if the Vessel is not delivered to the Owners due solely to the Owners’ acts or omissions resulting in a default
1125
by-the Owners under the Building Contract.
1126
1127
(iii) The Owners and the Charterers shall on the Delivery Date sign a Protocol of Delivery and Acceptance
1128
evidencing delivery of the Vessel hereunder.
1129
 
1130
(b)   (i) The Owners’ obligation to charter the Vessel to the Charterers hereunder is conditional upon delivery of
1131
the Vessel to the Owners by the Builders in accordance with the Building Contract.
1132
1133
(ii) If for any reason other than a default by the under the Building Contract, the Builders become 
1134
entitled under that Contract not to deliver the Vessel and exercise that right, the Owners shall be entitled to 
1135
cancel this Charter Party-by written notice to the Charterers.
1136
1137
(iii) If for any reason the Owners become entitled to cancel the Building Contract and exercise that right, the
1138
Owners shall be entitled to cancel this Charter Party by written notice to the Charterers. If, however, the 
1139
Owners do not exercise their right to cancel the Building Contract, the Charterers shall be entitled to cancel
1140
this Charter Party by written notice to the Owners.
1141
1142
3.     Liquidated Damages
1143
 
1144
(a)    Any liquidated damages for physical defects or deficiencies and any costs incurred in pursuing a claim therefor
Copyright © 2017 Norwegian Shipbrokers’ Association.
All rights reserved.
 

PART III
BARECON 2017 STANDARD BAREBOAT CHARTER PARTY
PROVISIONS TO APPLY FOR NEWBUILDING VESSELS ONLY
(OPTINAL, only applicable if 27 has been completed)
1145
 
shall be created in Box 27(iv) or if not filled in shall be shared equally between the parties.
1146
 
1147
(b)
Any liquidated damages for delay in delivery under the Building Contract and any costs incurred in pursuing
1148
 
a claim therefor shall be credited to the party stated in Box 27(v) or if not filled in shall be shared equally
1149
 
between the parties.
Copyright © 2017 Norwegian Shipbrokers’ Association.
All rights reserved.
 

PART IV 
BARECON 2017 STANDARD BAREBOAT CHARTER PARTY
PURCHASEOPTION
(OPTINAL, only applicable if Box 28 has been completed)
1150
See Clause 45
1151
1.  The Charterers shall have an option to purchase the Vessel (the “Purchase Option”) exercisable on each of 
1152
the dates stated below as follows:
1153
 
 
 Date (state number of months after delivery of the Vessel)
 Purchase Price (the “Purchase Option Price”)
 
(months)
 (amount and currency)
 
1154
 
 
1155
2.     To exercise their Purchase Option, the Charterers shall notify the Owners in writing not later than six (6) 
1156
months prior to the relevant date stated In the table above. Such notification shall not be withdrawn or 
1157
cancelled
1158
 
 
1159
3.     If theCharterers exercise their Purchase Option, the ownership of the Vessel shall be transferred to them on 
1160
the relevant date. If such date is not Banking Day, the-ownership of the Vessel shall be transferred on the 
1161
next Banking Day, on a strictly “as is/where is” basis, at-the Charterers’ sole cost and expense.
1162
 
 
1163
4.     The Owners shall-obtain and provide the Charterers with such-documents and take such actions as the 
1164
Charterers may reasonably request to facilitate the sale and the registration of the Vessel under the flag 
1165
designated by the Charterers.
1166
 
 
1167
5.     The Owners warrant that the Vessel at the time of transfer of ownership shall be free of any of Owners
1168
encumbrance or mortgage and that they have not committed any act or omission which would impair title to 
1169
the Vessel.
1170
 
 
1171
6-     The Owners make no representation or warranty as to the seaworthiness, value, condition, design, 
1172
 
merchantability or operation of the Vessel, or as to the quality of the material, equipment or workmanship in .
1173
 
the Vessels, or as to the fitness of the Vessel for any particular trade.
1174
 
 
1175
7.      In exchange for the transfer of ownership of the Vessel, the Charterers shall pay the Purchase Option Price.
1176
to the bank account nominated by the Owners together with any unpaid charter hire and other amounts due 
1177
and payable under this Charter Party.
1178
 
 
1179
8.     Upon payment and transfer of ownership in accordance with Clause 7 above, this Charter Party and all rights
1180
and obligations of the parties shall terminate without prejudice to all rights accrued due between the parties
1181
 prior to the date of termination and any claim that either party might have.
Copyright © 2017 Norwegian Shipbrokers’ Association.
All rights reserved.
 

PART V 
BARECON 2017 STANDARD BAREBOAT CHARTER PARTY
PROVISIONS TO APPLY FOR VESSELS REGISTERED IN A BAREBOAT CHARTER REGISTRY
(OPTIONAL, only to apply if expressly agreed and stated in Box 29)
1182
1.     Definitions
1183
 
1184
 
“Bareboat Charter Registry” shall mean the registry stated in Box 29(ii) whose flag the Vessel will fly and in 
1185
 
which the Charterers are registered as the bareboat charterers during the period of this Charter Party.
1186
 
 
1187
 
“Underlying Registry’’ shall mean the registry slated in Box 29(i) in which the Owners of the Vessel are
1188
 
 registered as Owners and to which jurisdiction and control of the Vessel will revert upon termination of the
1189
 
Bareboat Charter registration.
1190
 
 
1191
 2.    The Owners have agreed to and the Charterers shall arrange for the Vessel to be registered under the 
1192
 
Bareboat Charter Registry. The Charterers shall be responsible for all costs thereof.
1193
 
 
1194
3.     Upon termination of this Charter Party for any reason whatsoever the  Charterers shall immediately arrange
1195
 
for the deletion of the Vessel from the Bareboat Registry.
1196
 
 
1197
4.     ln the event of the Vessel being deleted from the Bareboat Charter Registry due to any default by the Owners,
1198
 
the Charterers shall have the right terminate this Charter forthwith and without prejudice to any other claim 
1199
 
they may have against the Owners under this Charter Party.
Copyright © 2017 Norwegian Shipbrokers’ Association.
All rights reserved.
 

Exhibit 4.31B
Rider Clauses 39 to 54
to be deemed incorporated to the
Bareboat Charter Party
Dated 05 March 2025
(the “Charter”)
Between
GUADELOUPE SHIPPING COMPANY INC. as Charterers
T.A.C.K. SHIPPING, S.A. as Owners
in respect of the vessel
MT “HULL H1597” tbn “P. MARSEILLE”
39.
Delivery
 
(a) This Charter Party constitutes the lease financing of the Vessel which is currently under construction under the Building Contract for the account of the Charterers, and to be
sold to the Owners as finance lessor under the MOA.
 
The Owners’ obligations to charter the Vessel to the Charterers hereunder are conditional upon (i) delivery of the Vessel to the Charterers by the Construction Seller under the
Building Contract and (ii) delivery of the Vessel by the Charterers to the Owners under the MOA.
 
If the Building Contract is cancelled, rescinded or otherwise terminated for any reason whatsoever or the Vessel is not delivered by the Construction Seller to the Charterers
under the Building Contract or is rejected by the Charterers under the Building Contract for any reason whatsoever, then the Charterers shall give written notice thereof to the
Owners and upon Owners’ receipt of such notice, the MOA and this Charter Party shall, save as hereafter provided, cease to have effect without any liability on the parties
hereto and the parties shall be released from all obligations, liabilities and responsibilities hereunder, save that initial registration of title to the Vessel and legal documentation
cost for documenting the lease and security to be Charterer’s account such cost not to exceed USD15,000.
 
The Charterers shall take delivery of the Vessel under this Charter Party immediately after delivery by the Charterers as sellers to the Owners as buyers under the MOA, and the
Owners shall deliver the Vessel to the Charterers under this Charter Party immediately after the Owners take delivery of the Vessel under the MOA.
 
In the event that the Vessel is not delivered under the MOA or the MOA is cancelled, terminated or rescinded for any reason, this Charter shall automatically terminate without
any liability between the parties hereunder and initial registration of title to the Vessel and legal documentation cost for documenting the lease and security to be Charterer’s
account such cost not to exceed USD15,000.
 
(b) It is acknowledged that the Charterers shall, by way of purchase from the Owners or otherwise, at the time of delivery of the Vessel under this Clause 39, own any bunkers,
unused lubricating and hydraulic oils and greases in storage tanks and unopened drums and unused stores and provisions (hereinafter referred to as the “Bunkers”) remaining
on board the Vessel on the Delivery Date and as a result the Owners and the Charterers will not settle the Bunkers at the time of delivery of the Vessel under this Charter Party.
 
(c) {USD45,000,000*(1 month CME TERM SOFR at the time of remittance + 2.0%)/360) (the “Remittance Interest Cost”) from the day of remittance of the fund till the closing
date to be covered by Charterers provided that no Remittance Interest Cost shall be payable if the delay is due to Owners’ default, negligence or wilful misconduct.

The extra interest cost, if any, shall be paid together with the second hire payment due under the terms of this Charter Party.
 
(d) The Charterers undertake to assign all their rights, benefits and remedies under article IX (Warranty of Quality) of the Building Contract and any guarantee granted to the
Charterers by any supplier or vendor of any equipment (together, a “Builder’s Warranty”) and (ii) on the Delivery Date, provided that the Assignments of Guarantees can be
agreed upon, notify the Construction Seller and, as soon as practicably possible thereafter, any such supplier or vendor of such assignments (the “Assignments of
Guarantees”).
 
In respect of any repairs, replacements or defects which appear within the first 12 months from delivery by the Construction Seller or within such other period as may be
stipulated in a guarantee of any supplier, the Owners shall, as assignees of the rights of the Charterers pursuant to the Assignments of Guarantees, issue a power of attorney in
favour of the Charterers to authorize the Charterers, up to but not after the occurrence of a Charterers’ Event of Default, to compel the Construction Seller or any supplier or
vendor to repair, replace or remedy any defects or to recover from the Construction Seller or any supplier any expenditure incurred in carrying out such repairs, replacements or
remedies.
Notwithstanding the Assignment of Guarantees, the Owners shall have no obligation to enforce or follow up on any guarantee or warranty thereby assigned, and it shall be the
Charterers’ sole responsibility to enforce such guarantees, liaise and make arrangements with the Construction Seller and relevant supplier and/or vendor as they see fit, all at
their own expense.
 
Any liquidated damages for physical defects or deficiencies shall be deemed to be earnings for the purposes of this Charter and shall be used for the repair of any defects or
deficiencies or for the compensation of the Charterers in respect of all documented expenses and costs incurred by the Charterers in respect thereof.
 
The costs of pursuing a claim or claims against the Construction Seller or any supplier under this Clause (including any liability to the Construction Seller} shall be borne by the
Charterers and the Charterers shall fully indemnify the Owners for any liability for which the Owners may be liable pursuant to such claim or claims.
 
Any sum recovered pursuant to a Builder’s Warranty of over $500,000 shall be paid to the Owners but so that:
(i)        the sum received by the Owners shall be paid over to the Charterers upon the Charterers providing evidence satisfactory to the Owners that the repairs in respect of
which such payment have been completed and that all repair accounts and other liabilities connected therewith have been paid by the Charterers; and
(ii)        with the prior written consent of the Owners, be paid on account of the repairs which are being carried out; and any other such sum recovered pursuant to a Builder’s
Warranty shall be paid to the Charterers which shall apply it in completing all repairs in respect of which such money was received.
40.
Conditions for delivery
 
a)
Prior to delivery of the Vessel under this Charter Party, each of the Parties shall exchange the following documents:
(i)
a copy of this Charter Party executed by each Party;
 
(ii)
a copy of the memorandum and articles of association (or equivalent documents) (and all amendments thereto) of the Owners and the Charterers;

(iii)
a copy of certificate of good standing or equivalent, stating all directors of the Owners and the Charterers dated not earlier than thirty (30) Banking Days prior to
the date of delivery of the Vessel to the Owners, with the original to follow as soon as possible after delivery of the Vessel, to the Owners;
 
(iv)
A PDF copy of one (1) Resolutions of the Board of Directors of the Charterers, authorising, approving and ratifying the BBCP and the MOA and any further
addenda thereto, authorising nominated individuals as signatories of and empowering these and/or other individuals to execute the Power of Attorney referred to
below, the Bill of Sale and all other documents required for the sale and delivery of the Vessel to the Owners, duly executed on behalf of the Charterers;
 
(v)
A PDF copy of one (1) Resolutions of the Board of Directors of the Charterers• Guarantor, authorising, approving and ratifying (i) the MOA any further addenda
thereto, (ii) the BBCP and any further addenda thereto, (iii) the Performance Guarantee, authorising nominated individuals as signatories of and empowering these
and/or other individuals to execute the Power of Attorney duly executed on behalf of the Charterers’ Guarantor;
 
(vi)
A PDF copy of one (1) Resolutions of the Board of Directors of the Owners, authorising, approving and ratifying the BBCP and the MOA and any further addenda
thereto, authorising nominated individuals as signatories of and empowering these and/or other individuals to execute the Power of Attorney referred to below,
the Bill of Sale and all other documents required for the sale and delivery of the Vessel to the Owners, duly executed on behalf of the Owners;
 
(vii)
A PDF copy of one (1) Resolutions of the Board of Directors of the Owners’ Guarantor, authorising, approving and ratifying (i) the MOA and any further addenda
thereto, (ii) the BBCP and any further addenda thereto, (iii) the Performance Guarantee, authorising nominated individuals as signatories of and empowering these
and/or other individuals to execute the Power of Attorney duly executed on behalf of the Owners’ Guarantor;
(viii)
A PDF copy of one (1) Power of Attorney in favor of the persons who are to act on behalf of Charterers and Charterers’ Guarantors in connection with above (vi)
and (vii), with the original to follow as soon as possible after delivery of the Vessel to the Owners;
 
(ix)
A PDF copy of one (1) Power of Attorney in favor of the persons who are to act on behalf of Owners and Owners’ Guarantors in connection with above (iv) and
(v), with the original to follow as soon as possible after delivery of the Vessel to the Owners;
(x)
the Guarantees and QEL referred to in Clause 43, duly executed; and
 
(xi)
a copy of the protocol of delivery and acceptance in relation to the Vessel executed by the Owners and the Charterers;
 
(xii)
such other documents as each of the Owner and Charterer may reasonably require.
 
41.
Vessel’s condition on delivery
 
The Vessel shall be delivered under this Charter Party in the same condition and with the same equipment, inventory and spare parts as she is delivered to the Owners under the
MOA The Charterers know the Vessel’s condition at the time of delivery, and expressly agree that the Vessel’s condition as delivered under the MOA is acceptable and in
accordance with the provisions of this Charter Party. The Vessel shall be delivered to the Charterers under this Charter Party strictly “as is/where is”. The Owners neither make
nor shall be deemed to have made or given any representation or warranty whether statutory or otherwis e  a n d  whether express or impli e d  a s  t o  t h e
seaworthiness, value, condition, quality, merchantability, design, description, operation, suitability or fitness for use for any purpose of the Vessel (with everything belonging to
her), or as to the absence of any latent or other defects, whether or not discoverable, or as to the absence of any obligations based on strict liability in tort, which are hereby
excluded (hereinafter collectively, referred to as the “Vessel’s Conditions”).

The Charterers hereby acknowledge and agree that they have not relied upon any representation, condition or warranty, whether statutory or otherwise and whether express or
implied as to any Vessel’s Conditions, in entering into this Charter Party, and accordingly the Charterers shall have no claim against the Owners under this Charter Party or
otherwise whatsoever in relation to the Vessel’s Conditions.
 
42.
Survey and Inspection on re-delivery of the Vessel
(a)
Condition of Vessel
 
The Vessel with everything belonging to her shall be at the Charterers’ risk and expense until she is re-delivered to the Owners, but subject to the terms and conditions of this
Charter Party she shall be re-delivered and taken over as she was at the time of the survey(s) in accordance with this Clause 42, fair wear and tear excepted.
 
(b)
Survey:
 
Not earlier than 45 days or later than 30 days (or if not possible then as soon as the Vessel becomes available) before re-delivery of the Vessel, the Owners and the Charterers
shall jointly agree upon the appointment of a surveyor for the purpose of determining the condition of the Vessel at the time of re- delivery hereunder.
 
The surveyor, whose decision shall be final and binding on both Parties, shall report in writing, specifying all items, if any, which have not been properly maintained in
accordance with the terms and conditions of the Charter and the work required to repair such deficiencies.
The costs of such a surveyor shall be equally shared between the Parties. In the event that the parties are not able to agree upon a single surveyor, each shall appoint their own
and the two surveyors so appointed shall conduct a joint survey of the Vessel. In such an event, each Party shall pay their own appointed surveyor’s costs.
 
The survey shall be carried out at the point of re-delivery and in Charterers time and shall not interfere with the operation of the Vessel. Any works required as a result of such
survey shall be carried out by Charterers prior to their re-delivery of the Vessel. In the event that two surveyors so appointed disagree, the matter shall be referred to arbitration
in accordance with Clause 33.
This clause shall not apply if Charterers exercise their purchase option as set out in Clause 45 or if Owners exercise their Put Option as set out in Clause 46.
 
(c)
Underwater Inspection:
In connection with the redelivery of the Vessel under the Charter, the Vessel shall not be dry-docked unless required by the Classification Society. In lieu of dry-docking, Owners
shall have the right to appoint a diver acceptable to the Classification Society to undertake an underwater inspection at a convenient port with due consultation between
Owners and Charterers. Such divers’ inspection shall be carried out at Owners’ expense (unless damage affecting the class is found, in which case the Charterers shall bear the
cost) and without interference to the Vessel’s normal operation.
Should such underwater inspection reveal damages that affect the class of the Vessel whereby such damage repairs cannot be made to the Vessel without dry-docking and the
Classification Society will not grant an extension, then Vessel is to be dry-docked as soon as possible by Charterers to repair such damages to the Classification Society’s
satisfaction at Charterers’ time and expense.

If in the opinion of the Classification Society the damages do not necessitate immediate dry-docking, then the Classification Society shall issue a certificate showing the extent
and place of damage and Charterers shall repair same to the satisfaction of the Classification Society at next dry-docking, provided that such dry-docking is within the Charter
Period. If the next Classification Society dry-docking is after the re-delivery of the Vessel under this Charter Party, the Charterers shall in their option (i) repair such damages
before redelivery of the Vessel hereunder or (ii) provide the Owners with an agreed lump sum, (the Charterers and the Owners shall each select a reputable shipyard in the
redelivery range and obtain from such shipyard a quotation for the cost of repairs of the damage. The estimated cost of repairs shall be refined as the average of the two
quotations obtained from the two shipyards), a first class bank guarantee or sum a cash deposit to be provided, in the Charterers’ option, covering the expected costs of such
repairs.
 
This Clause 42 shall not apply if the Charterers exercise their Purchase Option as set out in Clause 45 or the Owners exercise their Put Option as set out in Clause 46.
43.
Owners’ Assignment, Performance Guarantee and Quiet Enjoyment Letter
 
The Owners may not assign, transfer or novate their rights and in the case of a novation, obligations under this Charter without the prior written consent of the Charterers.
Subject to the Mortgagee providing a quiet enjoyment letter, the Owners may assign their rights under this Charter Party to the Mortgagee, including but not limited to
assignments of earnings and assignment of this Charter.
The Charterers are entitled to require a quiet enjoyment letter (the “QEL”) from the Mortgagee or such other financiers of the Owners, substantially in the form attached hereto
as Appendix D, which confirms that the Charterers shall have free use of the Vessel under this Charter Party (including the right to exercise the Purchase Option) while there has
occurred no Charterers’ Event of Default which is continuing under this Charter Party. The Owners shall procure that the Mortgagee or (as the case may be) such other
financiers will provide the quiet enjoyment letter to the Charterers as a condition precedent to the Owners’ entry into the Financial Instrument on or before the Delivery Date.
The performance of the Charterers hereunder shall be guaranteed by Performance Shipping Inc. whereas the performance of the Owners shall be guaranteed by Kowa Kaiun
Co., Ltd. (each, a “Guarantee”) The guarantees shall be in the format attached hereto as appendix B.
 
Upon delivery of the Vessel under this Charter Party, the Owners and the Charterers shall execute an assignment of insurances with the Owners’ financier in a form and
substance acceptable to each party thereto (but each acting reasonably), under which (inter alia) the Owners and the Charterers assign and agree to assign any and all their
respective interests on insurance proceeds in respect of the Vessel to the extent as required by this Charter Party.
 
44.
Transfer of the Vessel
 
(a)
Any change of ownership of the Vessel or of the legal and/or beneficial ownership of the Owners during the Charter Period shall require the Charterers’ prior written
approval which Charterers shall be at full discretion whether to grant or decline.
(b)
Each of the Owners and Charterers shall during the Charter Period be entitled to assign their position under the Charter Party to another third party entity. Such right shall
be subject to (i) the prior written consent of the other Party, such consent not be unreasonable withheld, and (ii) that the guarantees granted by Performance Shipping
Inc. and Kowa Kaiun Co., Ltd. shall continue to remain in full force and effect irrespective of the said assignment(s) under the Charter. Each Party shall bear their own
costs related to such assignment.

(c)
If, as a result of a change in law relating specifically to the circumstances of the Charterers and/or the Owners after the date of this Charter Party there would be material
adverse economic consequences to the Charterers of them continuing to perform their obligations under this Charter Party the Charterers shall have the option, to novate
this Charter Party to an affiliate provided always that, notwithstanding such novation, this Charter Party would continue on identical terms (save for logical,
consequential or mutually agreed amendments) and Performance Shipping Inc. shall remain jointly and severally liable with such affiliate to the Owners for performance of
all obligations by such affiliate pursuant to this Charter Party after such novation.
The Charterers agree and undertake to enter into (and procure that such affiliate and Performance Shipping Inc. enter into) or deliver to the Owners any such documents
as the Owners (at their sole discretion) shall reasonably require in connection with such novation, including but not limited to such additional security documents and
legal opinions as the Owners may reasonably require. Any reasonable and properly documented costs or expenses (including but not limited to legal costs) in relation to
such novation and any conditions imposed by the Owners in giving their consent shall be borne by the Charterers.
 
(d)
In the event of the early termination of this Charter Party by the Owners due to a Charterers’ Event of Default which is continuing or due to any of the circumstances
described in Clause 31(d) occurring to the Charterers, unless the Charterers have paid to the Owners the full amount of the then Outstanding Principal plus any other
sums due from the Charterers to the Owners under this Charter Party, the Owners shall be entitled to sell the Vessel, whereupon they shall retain from the relevant
proceeds an amount equal to the then Outstanding Principal plus any other sums then due from the Charterers to the Owners under this Charter Party and, thereafter, pay
the excess to the Charterers.
 
45.
Charterers’ Purchase Option
 
The Charterers or its nominee shall have an option to purchase the Vessel from the Owners commencing from the date falling twenty-four months after the Delivery Date (the
“Purchase Option Commencement Date”) for the duration of the Charter Period (the “Purchase Option”) at the following prices (the “Purchase Option Price”) or pro rata for the
current year:
 
The Purchase Option Price to be paid to the Owners upon delivery of the Vessel:
The Purchase Option Price = A - [ (A-B) / 365 x C]
 
Where:
 
A: the amount indicted below of the end of the year immediately prior to the applicable delivery date;
B: the amount indicted below of the end of the year of such delivery date; and
C: the actual number of days from the beginning of the year to which the delivery date belongs:
(i)
at a price of the Outstanding Principal x 102.00% at the end of year 2 of the Charter Period;
(ii)
at a price of the Outstanding Principal x 101.65% at the end of year 3 of the Charter Period;
(iii)
at a price of the Outstanding Principal x 101.20% at the end of year 4 of the Charter Period;
(iv)
at a price of the Outstanding Principal plus USD40,000 at the end of year 5 of the Charter Period;
(v)
at a price of the Outstanding Principal plus USD40,000 at the end of year 6 of the Charter Period;
(vi)
at a price of the Outstanding Principal plus USD40,000 at the end of year 7 of the Charter Period;
(vii)
at a price of the Outstanding Principal plus USD40,000 at the end of year 8 of the Charter Period.
 

If a breach by the Owners in the performance of any of their obligations under this Charter Party occurs and is continuing, then the Charterers may exercise their Purchase
Option earlier than the Purchase Option Commencement Date, provided that in the event the Charterers exercise their Purchase Option and the relevant breach is subsequently
remedied, such remedy shall not affect the exercise of the Purchase Option. The Purchase Option Price shall in such event be set at as follows or pro-rata for the current year:
 
at a price of USD 45,000,000.00 at the end of year 0 of the Charter Period;
at a price of USD 42,500,000.00 at the end of year 1 of the Charter Period;
Registration cost, and bank related costs including lifting charge and escrow agent fees, if any, shall be for the Charterer’s account; however such cost not to exceed USD
10,000.
The Charterers must give a minimum of 75 (seventy-five) calendar days’ notice to the Owners of their intention to buy the Vessel. The Purchase Option Price to be paid to the
Owners upon delivery of the Vessel is in accordance with clause 3 of the memorandum of agreement attached to this Charter Party as Appendix A. The Vessel shall be delivered
as soon as possible after expiry of the 75 (seventy-five) days’ notice and Owners undertake to render all necessary assistance in order to achieve this. Once the Purchase
Option has been exercised by Charterers, they may not withdraw same.
 
The Charterers or its nominee shall accept the Vessel on an “AS IS, WHERE IS” basis and the Owners shall take such steps to obtain and furnish such documents as may
reasonably be required by the Charterers (or their nominee) in order to transfer the legal and beneficial title and interest in the Vessel to the Charterers (or their nominee)
(including without limitation a bill of sale in respect of the Vessel executed and (if required) notarized) and take such other actions as the Charterers may reasonably request in
order to facilitate the sale and re-registration of the Vessel under such flag as the Charterers may designate.
 
With respect to such sale, the Owners warrant that the Vessel at such sale shall be free of any encumbrances, mortgages, charters, maritime liens and any other debts
whatsoever (in each case, created by the Owners) created or incurred by the Owners and that the Owners have not committed any act or omission which would impair title to
the Vessel and Owners hereby agree to indemnify and hold harmless Charterers in respect of any and all damages, costs and expenses whatsoever resulting from any breach of
such warranty.
Upon completion of such purchase of the Vessel as set out in this Clause 45 or in the subsequent Clause 46, this Charter Party and all further rights and obligations of the
Parties hereunder (except for indemnities and other obligations that by their nature should survive the termination of this Charter Party) shall terminate.
 
46.
Owners’ Put Option
 
The Owners have the option to sell the Vessel back to the Charterers or its nominee at the end of the eight (8) year of this Charter Party. In case Charterers have not exercised
their Purchase Option75 (seventy-five) calendar days before the end of the Charter Period at the latest, the Owners may exercise their Put Option, in which case the Charterer
shall purchase the Vessel for the Outstanding Principal plus USD 40,000 (“Put Option Fee”). The Owners must give a minimum of 60 (sixty) days’ notice of their intention to sell
the Vessel. The Put Option Price shall be paid to the Owners upon delivery of the Vessel, which shall take place on the last day of the Charter Period.
The Charterers or its nominee shall accept the Vessel on an “AS IS, WHERE IS” basis and the Owners shall, take such steps to obtain and furnish such documents as may
reasonably be required by the Charterers (or their nominee) in order to transfer the legal and beneficial title and interest in the Vessel to the Charterers (or their nominee)
(including without limitation a bill of sale in respect of the Vessel executed and (if required) notarized) and take such other actions as the Charterers may reasonably request in
order to facilitate the sale and re-registration of the Vessel under such flag as the Charterers may designate.

With respect to such sale, the Owners warrant that the Vessel at such sale shall be free of any encumbrances, mortgages, charters, maritime liens and any other debts
whatsoever (in each case, created by the Owners) created or incurred by the Owners and that the Owners have not committed any act or omission which would impair title to
the Vessel and Owners hereby agree to indemnify and hold harmless Charterers in respect of any and all damages, costs and expenses whatsoever resulting from any breach of
such warranty.
Registration cost, and bank related costs including lifting charge and escrow agent fees, if any, shall be for the Charterer’s account; however such cost not to exceed USD
10,000.
47.
Insurance
 
(a)
The Charterers undertake with the Owners that throughout the Charter Period:
 
(i)
without prejudice to their obligations under Clause 17 hereof, they will keep the Vessel insured on such terms as widely accepted in the commercial shipping market and
shall be reasonably acceptable to the Owners and the Mortgagee with such insurers (including P&I and war risks associations) as shall be reasonably acceptable to the
Owners with deductibles reasonably acceptable to the Owners and that any P&I association which is a member of the International Group of P&I Clubs and H&M
underwriters with security rating A. The Charterers shall advise the Owners of their current H&M underwriters for the Owners’ approval, such approval not to be
unreasonably withheld or delayed (it being agreed and understood by the Charterers that there shall be no element of self-insurance or insurance through captive
insurance companies without the prior written consent of the Owners);
 
(ii)
the policies in respect of the insurances against fire and usual marine risks and the policies or entries in respect of the insurances against war risks shall, in each case, be
endorsed to the effect that payment of a claim for a Total Loss will be made to the Owners (or the Mortgagees as assignees thereof) (who shall upon the receipt thereof
apply the same in the manner described in Clause 47(e) hereof);
 
(iii)
the Charterers shall procure that duplicates of all cover notes, policies and certificates of entry shall be furnished to the Owners for their custody, upon request;
 
(iv)
the Charterers shall procure that the insurers and the war risk and protection and indemnity associations with which the Vessel is entered shall:
 
(A)
provide the Owners and (if applicable) the Mortgagee with a letter or letter of undertaking in standard market form, and
(B)
supply to the Owners such information in relation to the insurances effected, or to be effected, with them as the Owners may from time to time reasonably require;
and
(v)
the Charterers shall procure that the policies, entries or other instruments evidencing the insurances are endorsed to the effect that the insurers shall give to the Owners
not less than fourteen (14) days prior written notification of any amendment, suspension, cancellation or termination of the insurances, unless subject to any automatic
termination/cancellation of cover provisions in the relevant insurances, in which event, if such insurances are automatically terminated/cancelled, Owners shall be advised
promptly and Charterers shall immediately procure re-instatement or replacement insurances of those terminated/cancelled insurances.

(b)
Notwithstanding anything to the contrary contained in Clauses 17 and 47 (b) hereof, the Vessel shall be kept insured during the Charter Period in respect of marine and war risks
on hull and machinery basis for not less than the total insured value (H&M value, Hull Interest and freight interest) specified in column(b) in the table set out below in respect of
the one-yearly period during the Charter Period specified in column (a) (on the assumption that the first such period commenced on the Delivery Date) against such amount
(hereinafter referred to as the “Minimum Insured Value”):
 
 (a)
 (b)
 Year
 Minimum Insured Value
 1
 USD 49 500,000
 2
 USD 46,750,000
 3
 USD 44,000,000
 4
 USD 41,250,000
 5
 USD 38,500,000
 6
 USD 35,750,000
 7
 USD 33,000,000
 8
 USD 30,250,000
(c)
If the Vessel becomes a Total Loss or becomes subject to Compulsory Acquisition, the chartering of the Vessel to the Charterers hereunder shall cease and the Charterers shall:-
 
(i)
immediately pay to the Owners all hire, and any other amounts, which have fallen due for payment under this Charter Party and have not been paid as at up to the date on
which the Total Loss or Compulsory Acquisition occurred as described below (the “Date of Loss”) together with interest thereon as set out in Clause 15 (g) and shall cease
to be under any liability to pay any hire, but not any other amounts, thereafter becoming due and payable under this Charter Party. All hire and any other amounts prepaid
by the Charterers relating to the period after the Date of Loss, and any insurance proceeds received by the Owners and/or their mortgagee after payment by the Charterers
as aforesaid, shall be forthwith refunded by the Owners and any hire paid in advance to be adjusted/reimbursed.
(ii)
For the purpose of ascertaining the Date of Loss:-
(A) an actual total loss of the Vessel shall be deemed to have occurred at noon (London time) on the actual date the Vessel was lost but in the event of the date of the loss
being unknown the actual total loss shall be deemed to have occurred at noon (London time) on the date on which it is acknowledged by the insurers to have occurred;
 
(B)
a constructive, compromised, agreed, or arranged total loss of the Vessel shall be deemed to have occurred at noon (London time) on the date that notice claiming such a
total loss of the Vessel is given to the insurers, or, if the insurers do not admit such a claim, at the date and time at which a total loss is subsequently admitted by the
insurers or the date and time adjudged by a competent court of law or arbitration tribunal to have occurred. Either the Owners or, with the prior written consent of the
Owners (such consent not to be unreasonably withheld), the Charterers shall be entitled to give notice claiming a constructive total lose but prior to the giving of such
notice there shall be consultation between the Charterers and the Owners and the Party proposing to give such notice shall be supplied with all such information as such
Party may request; and
 
(C)
Compulsory Acquisition shall be deemed to have occurred at the time of occurrence of the relevant circumstances described in Clause 30(b) hereof.
 
(d)
(i) All moneys up to the Minimum Insured Value payable under the insurances effected by the Charterers pursuant to Clauses 17 and 47, or other compensation, in respect of a
Total Loss or pursuant to Compulsory Acquisition of the Vessel shall be received in full by the Owners (or the mortgagees as assignees thereof) and applied by the Owners (or, as
the case may be, the mortgagees) as follows:

FIRSTLY, in payment of all the Owners’ or the Charterers’ reasonable and properly incurred costs incidental to the collection thereof,
 
SECONDLY, in or towards payment to the Owners (to the extent that the Owners have not already received the same in full) of a sum equal to the Purchase Option Price as per
the table in Clause 45 immediately above, for the year in which the Date of Loss occurs and which shall be calculated pro rata per diem,
THIRDLY, towards any other applicable sums due from the Charterers to the Owners under this Charter Party, and
 
FORTHLY, in payment of any surplus to the Charterers by way of a rebate of hire and compensation for early termination.
 
If, in accordance with the terms of the relevant Loss Payable Clause, any part of the insurance proceeds or compensation payable under this sub-clause (d)(i) is received and
applied by the mortgagees as assignees toward payment of the indebtedness due to such mortgagees by the Owners pursuant to the Financial Instrument, then the remainder
of such insurance proceeds shall be distributed between the Owners and the Charterers in accordance with the order set out in this sub-clause (d)(i) above and, for the
purposes of such distribution, the afore-mentioned part of the insurance proceeds received by the mortgagees shall reduce the afore-mentioned sums payable to the Owners
accordingly. Under no circumstances will the sum of the insurance proceeds or compensation received under this sub-clause (d)(i) and applied by the mortgagees as assignees
toward payment of the indebtedness due to such mortgagees by the Owners pursuant to the Financial Instrument exceed the aggregate sum payable to the Owners in
toward payment of the indebtedness due to such mortgagees by the Owners pursuant to the Financial Instrument, exceed the aggregate sum payable to the Owners in
accordance with this sub-clause (d)(i) above.
 
(ii) Any moneys in excess of the Minimum Insured Value payable under the insurances effected by the Charterers pursuant to Clauses 17 and 47, or other compensation, in
respect of a Total Loss or pursuant to Compulsory Acquisition of the Vessel shall be received in full by the Charterers.
 
(e)
In respect of partial losses, any payment by underwriters not exceeding USD 500,000 shall be paid directly to the Charterers who shall apply the same for the repair, salvage or
other charges involved or as a reimbursement if the Charterers fully repaired the damage to the satisfaction of the Owners and paid all of the salvage or other charges in respect of
which payment is made. Any moneys in excess of USD 500,000 payable under such insurance (other than in respect of a Total Loss) shall be paid to the Charterers subject to the
prior written consent of the Owners or the Owners’ mortgagee but such consent shall not be unreasonably withheld or delayed. In the absence of such prior written consent the
money shall be paid to the Owners or the Owners’ mortgagee.
 
(f) The provisions of Clauses 17 and 47 hereof shall not apply in any way to the proceeds of any additional insurance cover effected by the Owners and/ or the Charterers for their
own account and benefit.
(g)
The Charterers shall promptly notify the Owners of:
 
(i) any accident to the Vessel involving repairs the cost of which exceeds USD500,000 or the equivalent in any other currencies; or
 
(ii) any occurrence in consequence whereof the Vessel has become a Total Loss or Compulsory Acquisition.

48.
Inconsistency
 
In case of any inconsistency between (i) the standard terms of this Charter Party and (ii) the amendments and Rider 39 to 53 (inclusive), the latter shall prevail.
49.
Loan Outstanding for Interest Portion
 
In the charter hire structure set out in Box 17, the Variable Hire shall be calculated as follows:
 
(X) x (Y) x (Z) ÷ (A)
Where:
X         =       Amount of the loan outstanding (as set out in the table below)
Y         =      (Margin) + (1-month CME TERM SOFR)
Z          =      Number of days during the hire period in question
A         =      360 days.
The 1-month CME TERM SOFR to be used is the one published by CME GROUP five (5) Banking Days prior to the hire payment due date. Should the 3-month CME TERM
SOFR published by CME GROUP turn negative, then zero (0) to be applied in calculation of hire payment.
 
In case that CME TERM SOFR ceases to be available, the Owners shall reasonably designate the alternative interest rate after consultation with the Charterers but such rate
shall not exceed the cost to the Mortgagee of funding the outstanding loan balance on the Vessel from any reasonable source and such rate so applied shall only apply for so
long as CME TERM SOFR remains unavailable.
Loan Outstanding
(USD) 
 
 
 
 (USD)
1st Year
1st Month
45,000,000
 
 2nd Year
13th Month
 42,500,000
 1st Year
2nd Month
44,791,667
 
 2nd Year
14th Month
 42,291,667
 1st Year
3rd Month
44,583,333
 
 2nd Year
15th Month
 42,083,333
 1st Year
4th Month
44,375,000
 
 2nd Year
16th Month
 41,875,000
 1st Year
5th Month
44,166,667
 
 2nd Year
17th Month
 41,666,667
 1st Year
6th Month
43,958,333
 
 2nd Year
18th Month
 41,458,333
 1st Year
7th Month
43,750,000
 
 2nd Year
19th Month
 41,250,000
 1st Year
8th Month
43,541,667
 
 2nd Year
20th Month
 41,041,667
 1st Year
9th Month
43,333,333
 
 2nd Year
21st Month
 40,833,333
 1st Year
10th Month
43,125,000
 
 2nd Year
22nd Month
 40,625,000
 1st Year
11th Month
42,916,667
 
 2nd Year
23rd Month
 40,416,667
 1st Year
12th Month
42,708,333
 
 2nd Year
24th Month
 40,208,333
  3rd Year
 25th Month
40,000,000
 
 4th Year
 37th Month
37,500,000 
  3rd Year
 26th Month
39,791,667
 
 4th Year
 38th Month
37,291,667
  3rd Year
 27th Month
 39,583,333
 
 4th Year
 39th Month
37,083,333
  3rd Year
 28th Month
39,375,000
 
 4th Year
 40th Month
 36,875,000
  3rd Year
 29th Month
39,166,667
 
 4th Year
41st Month
 36,666,667
  3rd Year
 30th Month
38,958,333
 
 4th Year
 42nd Month
 36,458,333
  3rd Year
 31st Month
38,750,000
 
 4th Year
 43rd Month
 36,250,000
  3rd Year
 32nd Month
38,541,667
 
 4th Year
 44th Month
 36,041,667
  3rd Year
 33rd Month
38,333,333
 
 4th Year
 45th Month
 35,833,333
  3rd Year
 34th Month
 38,125,000
 
 4th Year
 46th Month
 35,625,000
  3rd Year
 35th Month
 37,916,667
 
 4th Year
 47th Month
 35,416,667
  3rd Year
36th Month
37,708,333
 
 4th Year
 48th Month
 35,208,333
5th Year
 49th Month
35,000,000
 
6th Year
 61st Month
 32,500,000
 5th Year
 50th Month
 34,791,667
 
 6th Year
 62nd Month
 32,291,667
 5th Year
 51st Month
 34,583,333
 
 6th Year
 63rd Month
 32,083,333
 5th Year
 52nd Month
34,375,000
 
 6th Year
 64th Month
 31,875,000
 5th Year
 53rd Month
 34,166,667
 
6th Year 
 65th Month
 31,666,667
 5th Year
 54th Month
33,958,333
 
6th Year 
 66th Month
 31,458,333
 5th Year
 55th Month
 33,750,000
 
 6th Year
 67th Month
 31,250,000
 5th Year
 56th Month
33,541,667
 
 6th Year
 68th Month
 31,041,667
 5th Year
 57th Month
 33,333,333
 
 6th Year
 69th Month
 30,833,333
 5th Year
58th Month
33,125,000
 
 6th Year
 70th Month
 30,625,000
 5th Year
 59th Month
32,916,667
 
 6th Year
 71st Month
 30,416,667
 5th Year
 60th Month
32,708,333
 
 6th Year
 72nd Month
 30,208,333

7th Year
73rd Month
30,000,000
 
8th Year
85th Month
27,500,000
7th Year
74th Month
29,791,667
8th Year
86th Month
27,291,667
7th Year
75th Month
29,583,333
8th Year
87th Month
27,083,333
7th Year
76th Month
29,375,000
8th Year
88th Month
26,875,000
7th Year
77th Month
29,166,667
8th Year
89th Month
26,666,667
7th Year
78th Month
28,958,333
8th Year
90th Month
26,458,333
7th Year
79th Month
28,750,000
8th Year
91st Month
26,250,000
7th Year
80th Month
28,541,667
8th Year
92nd Month
26,041,667
7th Year
81st Month
28,333,333
8th Year
93rd Month
25,833,333
7th Year
82nd Month
28,125,000
8th Year
94th Month
25,625,000
7th Year
83rd Month
27,916,667
8th Year
95th Month
25,416,667
7th Year
84th Month
27,708,333
8th Year
96th Month
25,208,333
 
50.
Disclosure
The Charterers shall supply the Owners as soon as reasonably practicable, but in any event i) within one hundred and eighty (180) days after the end of each of its financial
years, the audited financial statements of Performance Shipping Inc. for that financial year.
 
51.
Money laundering, sanctions, anti-corruption:
 
Notwithstanding any other clause in this Charter, each Party warrants, represents and undertakes to the other Party on a continuing basis:
 
(Money laundering):
that it, and parties acting on its behalf in relation to this Charter, shall observe and abide with, including but not limited any law, official requirement or other regulatory measure
or procedure implemented to combat money laundering as defined in any laws or regulations applicable to such Party, and
 
(Sanctions):
that it, nor any of their directors and, executive managers and ultimate owners, are or will become sanctioned by USA, the UK, Japan, the European union or the United Nations
or any other nation or governmental body or organization relevant to the trading of the Vessel under this Charter to the extent that non-compliance by it would result in an
actual breach of any applicable sanctions, and
that it, its directors and executive managers, has not been a party, directly, to any contract or conduct in contravention of any applicable sanctions legislation or directives of
either the USA, the UK, Japan, the European union or the United Nations or any other nation or governmental body or organization relevant to the trading of the Vessel under
this Charter to the extent that non-compliance by it would result in an actual breach of any applicable sanctions. Moreover, the Party is acting for itself only and is not acting on
behalf of any other individual or corporation, and
(Anti-corruption):
that it, its directors, performance guarantors, executive managers and ultimate owners of the Charterers; shall comply with all applicable anti-corruption laws, regulations and
contractual provisions, including without limitation the US Foreign Corrupt Practices Act and the UK Bribery Act, and
 
that it, its directors, performance guarantors, executive managers and ultimate owners of the Charterers; shall not, directly or through third parties, in relation to the
Charter, give, promise or attempt to give, or approve or authorize the giving of, anything of value to any person, any public official or any entity for the purpose of:
 
-
securing any improper advantage for either Party;
 
-
inducing or influencing anyone improperly to take action or refrain from taking action in order for either Party to obtain or retain business, or to secure the direction of
business to either Party;
 
-
inducing or influencing anyone to use his/her influence with any Government or public international organization for such purpose; and that:

 
-
to the best of its knowledge, none of its directors, executive managers or owners nor the directors, executive managers and owners of affiliated companies; have carried out
any of the actions described above;
 
-
all remuneration received under this Charter is solely intended as compensation for the services expressly provided under this Charter, including the Parties’ related
documented costs and expenses, and that it is not receiving remuneration for any other purpose; and,
 
-
neither the Party, nor any of its affiliated companies, directors, executive managers or owners shall use any part of said remuneration for any purpose prohibited under this
Clause 51.
(Indemnification):
if such calling constitute a breach of sanctions, then Charterers to undertake to indemnify Owners against all direct and proven loss and costs sustained as a result of such
violation. Charterers shall indemnify the Owners and hold the Owners harmless in respect of any direct and proven liability, loss, damage or expenses of whatsoever nature
which the Owners may sustain resulting from the operation of the Vessel (including but not limited to hereunder those arising from Vessel entering/operating in war area or
warlike area).
 
(Others):
that neither it, its directors, executive managers and owners, nor the directors, executive managers and owners of affiliated companies; have been suspended from doing
business in any form subject to investigation or charged with or sentenced for relevant criminal behaviour, fraud, false statements, corruption or other related activities;
52.
Confidentiality
The discussions between the Parties shall be kept strictly confidential by both Parties and may only be disclosed to each Party’s advisors and financiers on a need to know
basis, and as may be required to be disclosed under applicable law, regulatory rules and regulations, government authorities or relevant stock exchange rules.
 
53.
Counterparts
 
This Charter Party may be executed in any number of counterparts and any single counterpart or set of counterparts signed, in either case, by all the parties hereto shall be
deemed to constitute a full and original agreement for all purposes.
 
54.
EU ETS
“Emission Allowances” means an allowance, credit, quota, permit or equivalent, representing a right of a vessel to emit a specified quantity of greenhouse gas emissions
recognized by the Emission Scheme, or generally in connection with emissions, carbon reduction or other environmental or sustainability measures relating to the operation of
the Vessel.
“Emission Scheme” means a greenhouse gas emissions trading scheme and any emissions, carbon reduction or other environmental or sustainability measures relating to the
Vessel, which for the purposes of this Clause shall include (without limitation) the European Union Emissions Trading System and any other similar systems imposed by any
similar or equivalent international, regional, national or local scheme implemented by the IMO or any other authority that regulate the issuance, allocation, trading or
surrendering of Emission Allowances.
(i)
The Charterer shall be the sole responsible party for compliance of all Emission Scheme obligations in relation to the Vessel, and whether or not such obligations are,
pursuant to any domestic or international law or regulation, directed to the Owner as registered or beneficial owner of the Vessel.

(ii)
Notwithstanding sub-paragraph (i) above, the Charterer shall be permitted to sub-delegate such Emission Scheme responsibility on to any entity, including without
limitation to the relevant holder of Document of Compliance under the ISM Code in respect of the Vessel. Such sub-delegation shall be documented and copy of such
documentation shall be made available to the Owner.
 
(iii)
The Charterers shall co-operate with the Owner and assist the Owner to deliver all such forms as are required to be filed to any relevant authorities in relation to the
delegation and assumption of any Emission Scheme responsibilities.
 
(iv)
Without limiting the foregoing, throughout the Charter Period the Charterer, or any mandated by the Charterer entity, shall provide and pay for the Emission
Allowances corresponding to the Vessel’s emissions under the scope of the applicable Emission Scheme without any delay whatsoever.
 
(v)
Emission Allowances, taxes, charges, levies, fees, fines, costs or expenses incurred or imposed in connection with any Emissions Scheme, shall be for the Charterers’
account and are to be settled directly by them or their mandated entity.
 
(vi)
The Charterer shall ensure that the Charterer, or any mandated by the Charterer entity, shall comply, acknowledge in writing in any form that may be reasonably
required, and provide all such information and documents to the Owner as necessary to enable the Owners and any Emission Scheme obligor to document and
evidence to any authority their delegation/mandating of all Emission Scheme obligations in relation to the Vessel (and the assumption of same by the relevant
mandated entity), as may be required from time to time during the Charter Period by the Owner, any manager or other mandated entity, and any relevant Emission
Scheme authority, in conformity with the provisions of this Clause. In relation to the Emission Scheme being the European Union Emissions Trading System, the
Owner and the Charterer, or any mandated by the Charterer entity, shall complete and sign a mandate form in form and substance as required (from time to time) by
the EU Commission Implementing Regulation (EU) 2023/2599, the Directive 2003/87/EC, currently and indicatively in form as appended hereto (Appendix C) (the
“Mandate Form”).
(vii)
The Owner undertake to relay to the Charterer, without delay, any information that might be received by the Owner for any reason whatsoever, including by error of
any authority, and which might relate to compliance with any Emission Scheme.
IN WITNESS HEREOF the Owners and the Charterers have signed and executed TWO COPIES of this Agreement the day and year first written.
 T.A.C.K. SHIPPING, S.A.
 GUADELOUPE SHIPPING COMPANY INC.
 Signature (Owners)
 Signature (Charterers)
 
 /s/ Andreas Nikolaos Michalopoulos
 Name: Takayuki Hanada
 Name: Andreas Nikolaos Michalopoulos
 Title: Representative Director / Treasurer
 Title: Director / Attorney-in-fact
 Kowa Kaiun Co., Ltd.
 Performance Shipping Inc.
 Signature (Guarantor)
 Signature (Guarantor)
  
  /s/ Andreas Nikolaos Michalopoulos
 Name: Takayuki Hanada
 Name: Andreas Nikolaos Michalopoulos
 Title: Executive Director
 Title: Director/ Chief Executive Officer

List of Appendices:
 
Appendix A:          Memorandum of Agreement for purchase option
Appendix B:          Form of performance guarantees
Appendix C:          Mandate Form of EU-ETS Obligation
Appendix D:          Form of Quiet Enjoyment Letter

 Exhibit 4.32
JFLSPV2024S110-01
 
Dated:       24 October 2024
 
1
Mustique Shipping Company Inc., a corporation incorporated and existing under the laws of the Republic of Marshall Islands whose registered address is at Trust
Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 hereinafter called the Sellers, have agreed to sell, and
2
Huican (Tianjin) Shipping Leasing Co., Ltd., a corporation incorporated under the laws of the People’s Republic of China whose registered office is at Room 202,
No.6262, Aozhou Road, (Dongjiang Comprehensive Free Trade Zone), Tianjin Pilot Free Trade Zone (No. 10214, Dongjiang Business Secretary Service Co., Ltd. Free
Trade Zone) hereinafter called the Buyers, have agreed to buy
3
Name: Hull No. H1596
4
Classiﬁcation Society/Class: As per Shipbuilding Contract
5
Built: 2026/China By: China Shipbuilding Trading Company Limited and Shanghai Waigaoqiao Shipbuilding Company Limited
6
Flag: The Republic of Marshall Island           Place of Registration: The Republic of Marshall Island 
7
Call Sign: TBA Grt/Nrt: As per Shipbuilding Contract
8
RegisterIMO Number: TBA
9
hereinafter called the Vessel, on the following terms and conditions:
 
 
10
Definitions
 
 
11
“Banking days” are days on which banks are open both in the country of the currency
12
stipulated for the Purchase Price in Clause 1 and in the place of closing stipulated in Clause 8.
13
“In writing” or “written” means a letter handed over from the Sellers to the Buyers or vice versa,
14
a registered letter, telex, telefax or other modern form of written communication.
15
“C Society” or “Class” means the Society referred to in line 4.
16
1.
Purchase Price (see Clause 17)
 
 
 
17
2.
Deposit
18
As security for the correct fulﬁlment of this Agreement the Buyers shall pay a deposit of 10 %
19
(ten per cent) of the Purchase Price within banking days from the date of this
20
Agreement. This deposit shall be placed with
21
and held by them in a joint account for the Sellers and the Buyers, to be released in accordance
22
with joint written instructions of the Sellers and the Buyers. Interest, if any, to be credited to the
23
Buyers. Any fee charged for holding the said deposit shall be borne equally by the Sellers and the
24
Buyers.
25
3.
Payment
26
The said Purchase Price shall be paid in full free of bank charges in line with to
27
on delivery of the Vessel, Clause 17 of the Agreement. but not later than 3 banking days after the Vessel is in every respect
28
physically ready for delivery in accordance with the terms and conditions of this Agreement and
29
Notice of Readiness has been given in accordance with Clause 5.
30
4.
Inspections
31
a)* The Buyers have inspected and accepted the Vessel’s classiﬁcation records. The Buyers
32
have also inspected the Vessel at/in on
33
and have accepted the Vessel following this inspection and the sale is outright and deﬁnite,
This document is a computer generated SALEFORM 1993 form printed by authority of the Norwegian Shipbrokers’ Association. Any insertion or deletion to the form must be clearly visible. In the event of any
modiﬁcation made to the pre-printed text of this document which is not clearly visible, the text of the original approved document shall apply. BIMCO and the Norwegian Shipbrokers’ Association assume no
responsibility for any loss, damage or expense as a result of discrepancies between the original approved document and this computer generated document.

34
subject only to the terms and conditions of this Agreement.
 
 
35
b)* The Buyers shall have the right to inspect the Vessel’s classiﬁcation records and declare
36
whether same are accepted or not within
37
The Sellers shall provide for inspection of the Vessel at/in
38
The Buyers shall undertake the inspection without undue delay to the Vessel. Should the
39
Buyers cause undue delay they shall compensate the Sellers for the losses thereby incurred.
40
The Buyers shall inspect the Vessel without opening up and without cost to the Sellers.
41
During the inspection, the Vessel’s deck and engine log books shall be made available for
42
examination by the Buyers. If the Vessel is accepted after such inspection, the sale shall
43
become outright and deﬁnite, subject only to the terms and conditions of this Agreement,
44
provided the Sellers receive written notice of acceptance from the Buyers within 72 hours
45
after completion of such inspection.
 
 
46
Should notice of acceptance of the Vessel’s classiﬁcation records and of the Vessel not be
47
received by the Sellers as aforesaid, the deposit together with interest earned shall be
48
released immediately to the Buyers, whereafter this Agreement shall be null and void.
49
* 4 a) and 4 b) are alternatives; delete whichever is not applicable. In the absence of deletions,
 
 
50
alternative 4 a) to apply.
51
5.
Notices, time and place of delivery
52
a) The Sellers shall keep the Buyers well informed of the Vessel’s itinerary and shall
53
provide the Buyers with 10 and 5, 3 and 1, , and days notice of the estimated time of arrival at the
54
intended place of drydocking/underwater inspection/delivery. When the Vessel is at the place
55
of delivery and in every respect physically ready for delivery in accordance with this
56
Agreement, the Sellers shall give the Buyers a written Notice of Readiness for delivery at least three (3) Business Days before the Prepositioning Date, subject to
the fulﬁllment of the Remittance Conditions Precedent.
57
b) The Vessel shall be delivered and taken over safely aﬂoat at a safe and accessible berth or
58
anchorage at/in such location as agreed between the Sellers and the Buyers
59
in the Sellers’ option.
60
(i) Expected time of delivery: between 0000 to 2359 hours
61
(ii) Date of cancelling (see Clauses 5 c), 6 b) (iii) and 14): See “Cancelling Date” in the Bareboat Charter
62
c) If the Sellers anticipate that, notwithstanding the exercise of due diligence by them, the
63
Vessel will not be ready for delivery by the cancelling date they may notify the Buyers in
64
writing stating the date when they anticipate that the Vessel will be ready for delivery and
65
propose a new cancelling date. Upon receipt of such notiﬁcation the Buyers shall have the
66
option of either cancelling this Agreement in accordance with Clause 14 within 7 running
67
days of receipt of the notice or of accepting the new date as the new cancelling date. If the
68
Buyers have not declared their option within 7 running days of receipt of the Sellers’
69
notiﬁcation or if the Buyers accept the new date, the date proposed in the Sellers’ notiﬁcation
70
shall be deemed to be the new cancelling date and shall be substituted for the cancelling
71
date stipulated in line 61.
 
 
72
If this Agreement is maintained with the new cancelling date all other terms and conditions
73
hereof including those contained in Clauses 5 a) and 5 c) shall remain unaltered and in full
74
force and eﬀect. Cancellation or failure to cancel shall be entirely without prejudice to any
75
claim for damages the Buyers may have under Clause 14 for the Vessel not being ready by
76
the original cancelling date.
 
 
77
d) Should the Vessel become an actual, constructive or compromised total loss before delivery
78
the deposit together with interest earned shall be released immediately to the Buyers
79
whereafter this Agreement shall be null and void.
80
6.
Drydocking/Divers Inspection
81
a)** The Sellers shall place the Vessel in drydock at the port of delivery for inspection by the
This document is a computer generated SALEFORM 1993 form printed by authority of the Norwegian Shipbrokers’ Association. Any insertion or deletion to the form must be clearly visible. In the event of any
modiﬁcation made to the pre-printed text of this document which is not clearly visible, the text of the original approved document shall apply. BIMCO and the Norwegian Shipbrokers’ Association assume no
responsibility for any loss, damage or expense as a result of discrepancies between the original approved document and this computer generated document.

82
Classiﬁcation Society of the Vessel’s underwater parts below the deepest load line, the
83
extent of the inspection being in accordance with the Classiﬁcation Society’s rules. If the
84
rudder, propeller, bottom or other underwater parts below the deepest load line are found
85
broken, damaged or defective so as to aﬀect the Vessel’s class, such defects shall be made
86
good at the Sellers’ expense to the satisfaction of the Classiﬁcation Society without
87
condition/recommendation*.
88
b)** (i) The Vessel is to be delivered without drydocking. However, the Buyers shall
89
have the right at their expense to arrange for an underwater inspection by a diver approved
90
by the Classiﬁcation Society prior to the delivery of the Vessel. The Sellers shall at their
91
cost make the Vessel available for such inspection. The extent of the inspection and the
92
conditions under which it is performed shall be to the satisfaction of the Classiﬁcation
93
Society. If the conditions at the port of delivery are unsuitable for such inspection, the
94
Sellers shall make the Vessel available at a suitable alternative place near to the delivery
95
port.
96
(ii) If the rudder, propeller, bottom or other underwater parts below the deepest load line
97
are found broken, damaged or defective so as to aﬀect the Vessel’s class, then unless
98
repairs can be carried out aﬂoat to the satisfaction of the Classiﬁcation Society, the Sellers
99
shall arrange for the Vessel to be drydocked at their expense for inspection by the
100
Classiﬁcation Society of the Vessel’s underwater parts below the deepest load line, the
101
extent of the inspection being in accordance with the Classiﬁcation Society’s rules. If the
102
rudder, propeller, bottom or other underwater parts below the deepest load line are found
103
broken, damaged or defective so as to aﬀect the Vessel’s class, such defects shall be made
104
good by the Sellers at their expense to the satisfaction of the Classiﬁcation Society
105
without condition/recommendation*. In such event the Sellers are to pay also for the cost of
106
the underwater inspection and the Classiﬁcation Society’s attendance.
107
(iii) If the Vessel is to be drydocked pursuant to Clause 6 b) (ii) and no suitable dry-
108
docking facilities are available at the port of delivery, the Sellers shall take the Vessel
109
to a port where suitable drydocking facilities are available, whether within or outside the
110
delivery range as per Clause 5 b). Once drydocking has taken place the Sellers shall deliver
111
the Vessel at a port within the delivery range as per Clause 5 b) which shall, for the
112
purpose of this Clause, become the new port of delivery. In such event the cancelling date
113
provided for in Clause 5 b)) shall be extended by the additional time required for the
114
drydocking and extra steaming, but limited to a maximum of 14 running days.
115
c) If the Vessel is drydocked pursuant to Clause 6 a) or 6 b) above
116
(i) the Classiﬁcation Society may require survey of the tailshaft system, the extent of
117
the survey being to the satisfaction of the Classiﬁcation surveyor. If such survey is not
118
required by the Classiﬁcation Society, the Buyers shall have the right to require the tailshaft
119
to be drawn and surveyed by the Classiﬁcation Society, the extent of the survey being in
120
accordance with the Classiﬁcation Society’s rules for tailshaft survey and consistent with
121
the current stage of the Vessel’s survey cycle. The Buyers shall declare whether they
122
require the tailshaft to be drawn and surveyed not later than by the completion of the
123
inspection by the Classiﬁcation Society. The drawing and reﬁtting of the tailshaft shall be
124
arranged by the Sellers. Should any parts of the tailshaft system be condemned or found
125
defective so as to aﬀect the Vessel’s class, those parts shall be renewed or made good at
126
the Sellers’ expense to the satisfaction of the Classiﬁcation Society without
127
condition/recommendation*.
128
(ii) the expenses relating to the survey of the tailshaft system shall be borne
129
by the Buyers unless the Classiﬁcation Society requires such survey to be carried out, in
130
which case the Sellers shall pay these expenses. The Sellers shall also pay the expenses
131
if the Buyers require the survey and parts of the system are condemned or found defective
132
or broken so as to aﬀect the Vessel’s class*.
This document is a computer generated SALEFORM 1993 form printed by authority of the Norwegian Shipbrokers’ Association. Any insertion or deletion to the form must be clearly visible. In the event of any
modiﬁcation made to the pre-printed text of this document which is not clearly visible, the text of the original approved document shall apply. BIMCO and the Norwegian Shipbrokers’ Association assume no
responsibility for any loss, damage or expense as a result of discrepancies between the original approved document and this computer generated document.

133
(iii) the expenses in connection with putting the Vessel in and taking her out of
134
drydock, including the drydock dues and the Classiﬁcation Society’s fees shall be paid by
135
the Sellers if the Classiﬁcation Society issues any condition/recommendation* as a result
136
of the survey or if it requires survey of the tailshaft system. In all other cases the Buyers
137
shall pay the aforesaid expenses, dues and fees.
 
 
138
(iv) the Buyers’ representative shall have the right to be present in the drydock, but
139
without interfering with the work or decisions of the Classiﬁcation surveyor.
 
 
140
(v) the Buyers shall have the right to have the underwater parts of the Vessel
141
cleaned and painted at their risk and expense without interfering with the Sellers’ or the
142
Classiﬁcation surveyor’s work, if any, and without aﬀecting the Vessel’s timely delivery. If,
143
however, the Buyers’ work in drydock is still in progress when the Sellers have
144
completed the work which the Sellers are required to do, the additional docking time
145
needed to complete the Buyers’ work shall be for the Buyers’ risk and expense. In the event
146
that the Buyers’ work requires such additional time, the Sellers may upon completion of the
147
Sellers’ work tender Notice of Readiness for delivery whilst the Vessel is still in drydock
148
and the Buyers shall be obliged to take delivery in accordance with Clause 3, whether
149
the Vessel is in drydock or not and irrespective of Clause 5 b).
 
 
150
*Notes, if any, in the surveyor’s report which are accepted by the Classiﬁcation Society
151
without condition/recommendation are not to be taken into account.
 
 
152
**6 a) and 6 b) are alternatives; delete whichever is not applicable. In the absence of deletions,
153
alternative 6 a) to apply.
154
7.
Spares/bunkers, etc.
155
The Sellers shall deliver the Vessel to the Buyers with everything belonging to her on board and on
156
shore. All spare parts and spare equipment including spare tail-end shaft(s) and/or spare
157
propeller(s)/propeller blade(s), if any, belonging to the Vessel at the time of inspection used or
158
unused, whether on board or not shall become the Buyers’ property, but spares on order are to be
159
excluded. Forwarding charges, if any, shall be for the Buyers’ account. The Sellers are not required to
160
replace spare parts including spare tail - end shaft(s) and spare propeller(s)/propeller blade(s) which
161
are taken out of spare and used as replacement prior to delivery, but the replaced items shall be the
162
property of the Buyers. The radio installation and navigational equipment shall be included in the sale
163
without extra payment if they are the property of the Sellers. Unused stores and provisions shall be
164
included in the sale and be taken over by the Buyers without extra payment.
 
 
165
The Sellers have the right to take ashore crockery, plates, cutlery, linen and other articles bearing the
166
Sellers’ ﬂag or name, provided they replace same with similar unmarked items. Library, forms, etc.,
167
exclusively for use in the Sellers’ vessel(s), shall be excluded without compensation. Captain’s,
168
Oﬃcers’ and Crew’s personal belongings including the slop chest are to be excluded from the sale,
169
as well as the following additional items (including items on hire):
 
 
170
The Buyers shall take over the remaining bunkers and unused lubricating oils in storage tanks and
171
sealed drums without costs. and pay the current net market price (excluding barging expenses) at the port and date
172
of delivery of the Vessel.
173
Payment under this Clause shall be made at the same time and place and in the same currency as
174
the Purchase Price.
175
8.
Documentation
176
The place of closing: Such place to be nominated by the Sellers and agreed by the Buyers or otherwise via telephone and/or video conference as agreed by the Sellers and
the Buyers.
177
In exchange for payment of the Purchase Price the Sellers shall furnish the Buyers with delivery
178
documents, namely: Payment of the Purchase Price shall be conditional upon the fulﬁlment of the Remittance Conditions Precedent.
This document is a computer generated SALEFORM 1993 form printed by authority of the Norwegian Shipbrokers’ Association. Any insertion or deletion to the form must be clearly visible. In the event of any
modiﬁcation made to the pre-printed text of this document which is not clearly visible, the text of the original approved document shall apply. BIMCO and the Norwegian Shipbrokers’ Association assume no
responsibility for any loss, damage or expense as a result of discrepancies between the original approved document and this computer generated document.

179
a) Legal Bill of Sale in a form recordable in (the country in which the Buyers are
180
to register the Vessel), warranting that the Vessel is free from all encumbrances, mortgages
181
and maritime liens or any other debts or claims whatsoever, duly notarially attested and
182
legalized by the consul of such country or other competent authority.
 
 
183
b) Current Certiﬁcate of Ownership issued by the competent authorities of the ﬂag state of
184
the Vessel.
 
 
185
c) Conﬁrmation of Class issued within 72 hours prior to delivery.
 
 
186
d) Current Certiﬁcate issued by the competent authorities stating that the Vessel is free from
187
registered encumbrances.
 
 
188
e) Certiﬁcate of Deletion of the Vessel from the Vessel’s registry or other oﬃcial evidence of
189
deletion appropriate to the Vessel’s registry at the time of delivery, or, in the event that the
190
registry does not as a matter of practice issue such documentation immediately, a written
191
undertaking by the Sellers to eﬀect deletion from the Vessel’s registry forthwith and furnish a
192
Certiﬁcate or other oﬃcial evidence of deletion to the Buyers promptly and latest within 4
193
(four) weeks after the Purchase Price has been paid and the Vessel has been delivered.
 
 
194
f) Any such additional documents as may reasonably be required by the competent authorities
195
for the purpose of registering the Vessel, provided the Buyers notify the Sellers of any such
196
documents as soon as possible after the date of this Agreement.
 
 
197
At the time of delivery the Buyers and Sellers shall sign and deliver to each other a Protocol of
198
Delivery and Acceptance conﬁrming the date and time of delivery of the Vessel from the Sellers to the
199
Buyers.
 
 
200
At the time of delivery the Sellers shall hand to the Buyers the classiﬁcation certiﬁcate(s) as well as all
201
plans etc., which are on board the Vessel,. together with oOther certiﬁcates which are on board the Vessel shall remain on board the Vessel and also the
202
be handed over to the Buyers unless the Sellers shall provide the Buyers with copies of these documents.are required to retain same, in which case the
203
Buyers to have the right to take copies. Other technical documentation which may
204
be in the Sellers’ possession shall be promptly forwarded to the Buyers at their expense, if they so
205
request. The Sellers may keep the Vessel’s log books but the Buyers to have the right to take
206
copies of same.
207
9.
Encumbrances
208
The Sellers warrant that the Vessel, at the time of delivery, is free from all charters (other than the Approved Sub-charter (as deﬁned in the Bareboat Charter) and the
Bareboat Charter), encumbrances,
209
mortgages and liens (whether maritime or otherwise) maritime liens or any other debts whatsoever. The Sellers hereby undertake
210
to indemnify the Buyers against all consequences of claims made against the Vessel which have
211
been incurred prior to the time of delivery.
212
10.  Taxes, etc.
213
Any taxes, fees and expenses in connection with the purchase of the Vessel and registration under the Buyers’ ﬂag
214
shall be for the Buyers’ account, whereas similar charges and in connection with the closing of the Sellers’
215
register shall be for the Sellers’ account.
216
11.   Condition on delivery
217
The Vessel with everything belonging to her shall be at the Sellers’ risk and expense until she is
218
delivered to the Buyers, but subject to the terms and conditions of this Agreement she shall be
219
delivered and taken over as she was at the time of inspection, fair wear and tear excepted.
 
 
220
However, the Vessel shall be delivered with her class maintained without condition/recommendation*,
This document is a computer generated SALEFORM 1993 form printed by authority of the Norwegian Shipbrokers’ Association. Any insertion or deletion to the form must be clearly visible. In the event of any
modiﬁcation made to the pre-printed text of this document which is not clearly visible, the text of the original approved document shall apply. BIMCO and the Norwegian Shipbrokers’ Association assume no
responsibility for any loss, damage or expense as a result of discrepancies between the original approved document and this computer generated document.

221
free of average damage affecting the Vessel’s class, and with her classiﬁcation certiﬁcates and
222
national certiﬁcates, as well as all other certiﬁcates the Vessel had at the time of inspection, valid and
223
unextended without condition/recommendation* by Class or the relevant authorities at the time of
224
delivery.
 
 
225
“Inspection” in this Clause 11, shall mean the Buyers’ inspection according to Clause 4 a) or 4 b), if
226
applicable, or the Buyers’ inspection prior to the signing of this Agreement. If the Vessel is taken over
227
without inspection, the date of this Agreement shall be the relevant date.
 
 
228
* Notes, if any, in the surveyor’s report which are accepted by the Classiﬁcation Society
229
without condition/recommendation are not to be taken into account.
230
12.  Name/markings
231
Upon delivery the Buyers undertake to change the name of the Vessel and alter funnel markings.
232
13.  Buyers’ default
 
Should the deposit not be paid in accordance with Clause 2, the Sellers have the right to cancel this Agreement, and they shall be entitled to claim
compensation for their losses and for all expenses incurred together with interest.
 
 
 
Should the Purchase Price not be paid in accordance with Clause 3, the Sellers have the right to
 
cancel the Agreement, in which case the deposit together with interest earned shall be released to the Sellers. If the deposit does not cover their loss, the
Sellers shall be entitled to claim further compensation for their losses and for all expenses incurred together with interest.
240
14.  Sellers’ default
241
Should the Sellers fail to give Notice of Readiness in accordance with Clause 5 a) or fail to be ready
242
to validly complete a legal transfer by the date stipulated in line 61 the Buyers shall have
243
the option of cancelling this Agreement provided always that the Sellers shall be granted a
244
maximum of 3 banking days after Notice of Readiness has been given to make arrangements
245
for the documentation set out in Clause 8. If after Notice of Readiness has been given but before
246
the Buyers have taken delivery, the Vessel ceases to be physically ready for delivery and is not
247
made physically ready again in every respect by the date stipulated in line 61 and new Notice of
248
Readiness given, the Buyers shall retain their option to cancel. In the event that the Buyers elect
249
to cancel this Agreement the deposit together with interest earned shall be released to them
250
immediately.
 
 
251
Should the Sellers fail to give Notice of Readiness by the date stipulated in line 61 or fail to be ready
252
to validly complete a legal transfer as aforesaid they shall make due compensation to the Buyers for
253
their loss and for all expenses together with interest if their failure is due to proven
254
negligence and whether or not the Buyers cancel this Agreement unless the Sellers’ failure arises directly due to the Buyers’ default.
255
15.  Buyers’ representatives
256
After this Agreement has been signed by both parties and the deposit has been lodged, the Buyers
257
have the right to place two representatives on board the Vessel at their sole risk and expense upon
258
arrive at on or about
 
 
259
These representatives are on board for the purpose of familiarisation and in the capacity of
260
observers only, and they shall not interfere in any respect with the operation of the Vessel. The
261
Buyers’ representatives shall sign the Sellers’ letter of indemnity prior to their embarkation.
262
16.  Arbitration
See Clause 29
263
a)* This Agreement shall be governed by and construed in accordance with English law and
264
any dispute arising out of this Agreement shall be referred to arbitration in London in
This document is a computer generated SALEFORM 1993 form printed by authority of the Norwegian Shipbrokers’ Association. Any insertion or deletion to the form must be clearly visible. In the event of any
modiﬁcation made to the pre-printed text of this document which is not clearly visible, the text of the original approved document shall apply. BIMCO and the Norwegian Shipbrokers’ Association assume no
responsibility for any loss, damage or expense as a result of discrepancies between the original approved document and this computer generated document.

 

EXECUTION VERSION
 
RIDER CLAUSES TO
MEMORANDUM OF AGREEMENT
DATED 24 October      2024
 
CLAUSE 17 – PAYMENT OF PURCHASE PRICE
 
(a)
The purchase price (“Purchase Price”) of the Vessel shall be the lower of (a) US$45,391,500 and (b) the amount equivalent to 70% of the Shipbuilding Contract Price.
(b)
Subject to (i) the Payment Notice being delivered to the Buyers not later than three (3) Business Days prior to the Prepositioning Date (or such shorter period as the Buyers and
the Sellers may agree); (ii) the fulfilment of the Remittance Conditions Precedent to the satisfaction of the Buyers on or prior to the date of the Payment Notice and (iii) the
Escrow Agent has confirmed in writing (including by email) to the Parties that the Escrow Account has been opened and is ready to receive funds, the Buyers shall give
instructions to their bank to make remittance of the Purchase Price to the Escrow Account which shall be held by the Escrow Agent in accordance with the Escrow Agreement
as soon as possible but in any event no later than one (1) Business Day before the Scheduled Delivery Date (the “Prepositioning Date”).
 
(c)
Subject to the Delivery Conditions Precedent having been satisfied and further subject to the terms of the Escrow Agreement, the Purchase Price shall be released from the
Escrow Agent’s account and remitted into such account(s) nominated by the Sellers and/or the SBC Sellers and accepted by the Buyers in accordance with the terms of the
Escrow Agreement.
 
(d)
Interest shall accrue on a daily basis on the Purchase Price at the Interest Rate applicable to the first Hire Period from the Prepositioning Date to:
 
 
(i)
in the event that the Vessel is delivered to the Buyers on the Delivery Date, the Delivery Date (but excluding such date for calculation purposes); or
 
(ii)
in the event that the Vessel is not delivered to the Buyers on the Delivery Date, the earlier of (A) the date that such prepositioned funds are returned to the Buyers by
the Escrow Agent in accordance with the Escrow Agreement, or (B) the date that the Sellers repay such funds to the Buyers pursuant to the terms of this Agreement.
 
Such interest accrued under this clause shall be payable on the Buyers’ demand.
 
(e)
The interest accrued under Clause 17(d) shall be payable:
 
(i)
in the event that the Vessel is delivered to the Buyers on the Delivery Date, on the first Hire Payment Date (which for the avoidance of doubt shall be included in the
first Charterhire Instalment); and
 
(ii)
in the event that the Vessel is not delivered to the Buyers on the Delivery Date, on the Buyers’ demand.
 
CLAUSE 18 – OBLIGATION TO PURCHASE THE VESSEL
 
The Buyers’ obligation to purchase the Vessel under this Agreement is conditional upon:
 
(a)
The Prepositioning Date, Scheduled Delivery Date and the Delivery Date all falling on a Business Day and on or before the Cancelling Date;
 
(b)
the fulfilment by the Sellers of the Remittance Conditions Precedent and the Delivery Conditions Precedent;
JSFL Performance - MOA Rider Clauses
SINGAPORE/91403403v5
1

(c)
no Potential Termination Event or Termination Event having occurred and is continuing or which will occur as a result of the performance by the Sellers or Buyers of their
respective obligations under this Agreement; and
 
(d)
the simultaneous delivery to and acceptance by the Charterers (in their capacity as buyers) of the Vessel in accordance with the terms of the Shipbuilding Contract;
 
(e)
the simultaneous delivery to and acceptance by the Sellers (in the capacity as buyers) of the Vessel in accordance with the terms of the Initial MOA; and
 
(f)
the simultaneous delivery to and acceptance by the Charterers (in their capacity as bareboat charterer) of the Vessel in accordance with the terms of the Bareboat Charter.
 
CLAUSE 19 – CONDITION OF VESSEL
 
The Sellers hereby acknowledge that with respect to the sale and purchase of the Vessel pursuant to the terms of this Agreement, the Buyers are relying on the Sellers in all respects to
check all matters concerning the Vessel, including its safety, condition, quality and fitness for purposes and delivery of the Vessel.
 
CLAUSE 20 – REPRESENTATIONS AND WARRANTIES OF SELLERS
 
The Sellers represent and warrant to the Buyers on the date hereof, the Prepositioning Date and on the Delivery Date that:
 
(a)
they are duly incorporated and validly existing under the laws of their jurisdiction of incorporation;
 
(b)
they have the requisite power and authority to enter into and perform this Agreement and this Agreement constitutes their valid, legal and binding obligations in accordance
with its terms;
 
(c)
the execution and performance by them of this Agreement will not breach or constitute a default under their constitutional documents or any agreement, instrument, order,
judgment or other restriction which binds the Sellers;
 
(d)
they will, on the Delivery Date, immediately before Delivery, have good and marketable title to the Vessel and are the sole legal and beneficial owner of the Vessel;
 
(e)
the Vessel will, on Delivery, be:
 
(i)
in a good and safe condition and state of repair consistent with first class ship ownership and management practice;
 
(ii)
is classed with the Classification Society at the highest classification available for vessels of its type and is free of all overdue recommendations or conditions; and
 
(iii)
has her survey cycles up-to-date and all trading and class certificates valid for at least three (3) months;
 
(f)
on Delivery, the Vessel will be free from all Security Interests;
 
(g)
the Vessel is free of all charters (other than the Bareboat Charter and any Approved Sub-charter);
 
(h)
they:
 
(i)
are not a Restricted Person;
 
(ii)
they are not owned or controlled by or acting directly on behalf of or for the benefit of, a Restricted Person; and
JSFL Performance - MOA Rider Clauses
SINGAPORE/91403403v5
2

(iii)
they do not own or control a Restricted Person;
 
(iv)
neither they nor any of their directors, officers or employees, or, to the best of their knowledge, their agents have received notice or are aware of any claim, action, suit,
proceeding or investigation against them with respect to Sanctions;
 
(i)
no proceeds of the Purchase Price shall be made available, directly or indirectly, to or for the benefit of a Restricted Person nor shall they be otherwise directly or indirectly,
applied in a manner or for a purpose prohibited by Sanctions; and
 
(j)
that the Charterers have paid all instalments payable under the Shipbuilding Contract to the SBC Sellers (other than the Shipbuilding Contract Delivery Instalment) and no other
amount is due from the Charterers (in their capacity as buyer) to the SBC Sellers under the terms of the Shipbuilding Contract.
 
CLAUSE 21 – PHYSICAL PRESENCE
 
If the Flag State requires the Buyers to have a physical presence or office in the Flag State, all fees, costs and expenses arising out of or in connection with the establishment and
maintenance of such physical presence or office by the Buyers shall be borne by the Sellers.
 
CLAUSE 22 – NOTICE, TIME AND PLACE OF DELIVERY
 
(a)
The Sellers shall keep the Buyers well informed of the proposed Delivery Date of the Vessel (including providing the Buyers with copies of all notices of the delivery schedule
received from the SBC Sellers) and shall in any event specify the Scheduled Delivery Date in the Payment Notice.
 
(b)
The Vessel shall be delivered and taken over safely afloat at the yard of the Builder.
 
(c)
The Delivery shall be required to take place on or before the Cancelling Date.
 
CLAUSE 23 – COSTS AND EXPENSES
 
(a)
The Sellers shall indemnify and pay such amounts to the Buyers in respect of all costs, claims, expenses, liabilities, losses and fees (including but not limited to any reasonable
and documented legal fees, and any vessel registration and tonnage fees) suffered or incurred by or imposed on the Buyers in connection with the delivery, registration and
purchase of the Vessel by the Buyers, or otherwise arising from the Buyers’ non-performance of their obligations under this Agreement.
 
(b)
The indemnities provided by the Sellers under this Clause shall continue in full force and effect regardless of (i) any termination of this Agreement (save where arising directly
from a default of the Buyers of their obligations under this Agreement) and (ii) whether the Vessel is in the possession or control of the Sellers or otherwise.
 
CLAUSE 24 - BUYERS’ FURTHER RIGHTS ON TERMINATION
 
If:
 
(a)
a Potential Termination Event or a Termination Event occurs and is continuing prior to Delivery;
 
(b)
it becomes unlawful or illegal for the Buyers to perform their obligations under this Agreement;
 
(c)
the Vessel becomes a Total Loss prior to the Delivery Date; or
 
(d)
the Buyers’ right to cancel arises under Clause 14 for failure of the Sellers to deliver the Vessel by the Cancelling Date,
JSFL Performance - MOA Rider Clauses
SINGAPORE/91403403v5
3

the Buyers shall have the right (in their absolute discretion save for paragraph (c) above where such termination will be immediate and automatic as from the date of the Total
Loss) to terminate this Agreement immediately by written notice to the Sellers and such termination shall become effective on the date of such written notification (or such other
date as the Buyers may specify in such notice), whereupon:
 
(i)
the Buyers and Sellers shall cease to have any rights or obligations in relation to each other under this Agreement, provided however that, subject to and in
consideration of the Buyers entering into this Agreement and the Bareboat Charter as at the date hereof, the Buyers shall be entitled to retain all expenses, fees or
other amounts paid by the Sellers under this Agreement and the other Leasing Documents, and it is agreed by the Parties that such payment shall be irrevocable and
unconditional and is acknowledged by the Sellers to be proportionate as to amount, having regard to the legitimate interest of the Buyers, in protecting against the
Buyers’ risk of the Sellers failing to perform their obligations under this Agreement; and
 
(ii)
the Sellers shall be obliged to immediately refund or procure that there be immediately refunded in full to the Buyers, any portion of the Purchase Price remitted or
transferred by the Buyers under this Agreement, as at the date of such termination.
 
CLAUSE 25 - COUNTERPARTS
 
This Agreement may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of this Agreement.
 
CLAUSE 26 - NOTICES
 
Any notice, certificate, demand or other communication to be served, given, made or sent under or in relation to this Agreement shall be in English and in writing and (without prejudice
to any other valid method or giving, making or sending the same) shall be deemed sufficiently given or made or sent if sent by registered post or by email to the following respective
address:
 
(a)
For the Buyers: - 
c/o
Jiangsu Financial Leasing Co., Ltd.
Address: 9/F, No.1 Building, No.99 East Jialingjiang Street, Nanjing,
Jiangsu Province, P.R. China
Attention: ZHANG Xinhang/TENG Huaigang
Email:
 
(b)
For the Sellers: 
c/o
Performance Shipping Management Inc.
Address: 373 Syngrou Ave. & 2-4 Ymittou str.
17564, Palaio Faliro, Athens, Greece
Attention: Mr. Andreas Nikolaos Michalopoulos
Email: 
 
CLAUSE 27 – ENTIRE AGREEMENT
 
(a)
The written terms of this Agreement hereto comprise the entire agreement between the Buyers and the Sellers in relation to the sale and purchase of the Vessel and supersede all
previous agreements whether oral or written between the Parties in relation thereto.
JSFL Performance - MOA Rider Clauses
SINGAPORE/91403403v5
4

(b)
Each of the Parties acknowledges that in entering into this Agreement it has not relied on and shall have no right or remedy in respect of any statement, representation,
assurance or warranty (whether or not made negligently) other than as is expressly set out in this Agreement.
 
(c)
Any terms implied into this Agreement by any applicable statute or law are hereby excluded to the extent that such exclusion can legally be made. Nothing in this Clause shall
limit or exclude any liability of fraud.
 
CLAUSE 28 – ASSIGNMENT AND TRANSFER
 
(a)
The Sellers shall not assign or transfer (whether by novation or otherwise) their rights and/or obligations under this Agreement except with the Buyers’ prior written consent.
 
(b)
The Buyers may assign or transfer (whether by novation or otherwise) any of their rights under this Agreement with prior written notice to the Sellers, following which the
Sellers shall execute such documents and do all such things as reasonably required by the Buyers to facilitate or effect such assignment or transfer.
 
(c)
Each of the Sellers and Buyers shall bear their own costs arising from any assignment or transfer as permitted under this Clause.
 
CLAUSE 29 – GOVERNING LAW AND ARBITRATION
 
(a)
This Agreement and any non-contractual obligations arising under or in connection with it, shall be governed by and construed in accordance with English law.
 
(b)
This Agreement shall be governed by and construed in accordance with 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 or any statutory modification or reenactment thereof save to the extent necessary to give effect to the
provisions of this Clause. The seat of the arbitration shall be England, even where the hearing takes place outside England.
 
(c)
The arbitration shall be conducted in accordance with the London Maritime Arbitrators Association (LMAA) Terms current at the time when the arbitration proceedings are
commenced.
 
(d)
The reference shall be to three arbitrators, one to be appointed by each party and the third, subject to the provisions of the LMAA Terms, by the two so appointed. A party
wishing to refer a dispute to arbitration shall appoint its arbitrator and send notice of such appointment in writing to the other party requiring the other party to appoint its own
arbitrator within 14 calendar days of that notice and stating that it will appoint its arbitrator as sole arbitrator unless the other party appoints its own arbitrator and gives notice
that it has done so within the 14 days specified. If the other party does not appoint its own arbitrator and give notice that it has done so within the 14 days specified in the
notice, the party referring a dispute to arbitration may, without the requirement of any further prior notice to the other party, appoint its arbitrator as sole arbitrator and shall
advise the other party accordingly. The award of a sole arbitrator shall be binding on both parties as if the arbitrator had been appointed by agreement.
 
(e)
Nothing herein shall prevent the parties agreeing in writing to vary these provisions to provide for the appointment of a sole arbitrator.
 
(f)
In cases where neither the claim nor any counterclaim exceeds the sum of US$100,000 (or such other sum as the parties may agree) the arbitration shall be conducted in
accordance with the LMAA Small Claims Procedure current at the time when the arbitration proceedings are commenced. In cases where the claim or any counterclaim exceeds
the sum agreed for the LMAA Small Claims Procedure and neither the claim nor the counterclaim exceeds the sum of US$400,000 (or such other sum as the parties may agree) the
parties may further agree that the arbitration shall be conducted in accordance with the LMAA Intermediate Claims Procedure current at the time when the arbitration
proceedings and commenced. Where the reference is to three arbitrators the procedure for making appointments shall be in accordance with the procedure for full arbitration
stated above.
JSFL Performance - MOA Rider Clauses
SINGAPORE/91403403v5
5

CLAUSE 30 – DEFINITIONS
 
(a)
Unless otherwise specified herein, capitalised terms in this Agreement shall have the same meaning as in the Bareboat Charter. Furthermore, in this Agreement:
 
“Bareboat Charter” means the bareboat charterparty in respect of the Vessel dated on or about the date hereof and entered into between the Buyers as owner and the
Charterers as bareboat charterer.
 
“Builder” means Shanghai Waigaoqiao Shipbuilding Co., Ltd., a corporation organised and existing under the laws of the People’s Republic of China, having its registered
office at 3001 Zhouhai Road, Pudong New District, Shanghai 200137, the People’s Republic of China.
 
“Business Day” means a day on which banks are open for business in People’s Republic of China, Greece, Hong Kong and the Flag State and in respect of a day on which a
payment is required to be made or other dealing is due to take place under this Agreement in Dollars, also a day on which commercial banks are open in New York City.
 
“Charterers” means Sri Lanka Shipping Company Inc., a corporation incorporated and existing under the laws of the Republic of the Marshall Islands whose registered
address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960.
 
“Delivery” means the passing of the legal and beneficial interest in the Vessel from the Sellers to the Buyers pursuant to the terms of this Agreement.
 
“Delivery Conditions Precedent” means the conditions precedent detailed in Clause 34.2(g)(ii) of the Bareboat Charter.
 
“Delivery Date” means the date on which Delivery occurs.
 
“Escrow Account” means the account identified as the “Escrow Account” in the Escrow Agreement.
 
“Escrow Agent” means Watson Farley & Williams acting through its office at Suites 4610-4619, Jardine House, 1 Connaught Place, Hong Kong.
 
“Escrow Agreement” means the escrow agreement made or to be made among the Parties, the SBC Sellers and the Escrow Agent setting out the terms of appointment of the
Escrow Agent and the manner in which the Escrow Agent will hold and release the Purchase Price (or part thereof).
 
“Flag State” means the Republic of Marshall Islands or such flag state of the Vessel as may be agreed in writing by the Buyers and the Sellers.
 
“Party” means any party to this Agreement.
 
“Payment Notice” means the form to be submitted by the Sellers to the Buyers to request for the Buyers’ payment of the Purchase Price, which shall be in the form set out in
Schedule 1 and which shall be signed by at least one officer of the Sellers.
 
“Purchase Price” shall have the meaning ascribed thereto under Clause 17(a).
 
“Remittance Conditions Precedent” means the conditions precedent detailed in Clause 34.2(g)(i) of the Bareboat Charter.
 
“SBC Sellers” means, collectively, (i) the Builder and (ii) China Shipbuilding Trading Company Limited, a corporation organised and existing under the laws of the People’s
Republic of China, having its registered office at 56(Yi) Zhongguancun Nan Da Jie, Beijing 100044, the People’s Republic of China.
JSFL Performance - MOA Rider Clauses
SINGAPORE/91403403v5
6

“Scheduled Delivery Date” means the expected date of delivery of the Vessel proposed by the Sellers and agreed by the Buyers set out in the Payment Notice which shall
always be on a Business Day on or before the Cancelling Date.
 
“Shipbuilding Contract” means the shipbuilding contract dated 18 December 2023 entered into between the Charterers (in their capacity as buyer) and the SBC Sellers (in their
capacity as sellers) for the construction, sale and purchase of the Vessel as amended and supplemented by the Addendum No. 1 dated 18 December 2023 and as may from time
to time be further amended, supplemented or addended (to the extent permitted under the Leasing Documents).
 
“Shipbuilding Contract Delivery Instalment” means the final instalment of the Shipbuilding Contract Price (as may be adjusted on an upwards or downwards basis under the
terms of the Shipbuilding Contract, in each case evidenced on the invoice to be issued by the SBC Sellers) payable by the Charterers (in their capacity as buyers) to the SBC
Sellers under clause 3(e) of article II of the Shipbuilding Contract.
 
“Shipbuilding Contract Price” means the contract price payable by the Charterers (in their capacity as buyers) to the SBC Sellers under the Shipbuilding Contract, being as at
the date hereof US$64,845,000, as may be adjusted on an upwards or downwards basis under the terms thereof.
 
“Vessel” means the product tanker with hull number H1596 to be named m.t. P. TOKYO to be registered under the flag of the Republic of Marshall Islands under construction by
the Builder pursuant to the Shipbuilding Contract.
 
(b)
Clauses 59.2 to 59.6 of the Bareboat Charter apply, with any necessary modifications, to this Agreement.
JSFL Performance - MOA Rider Clauses
SINGAPORE/91403403v5
7

SCHEDULE 1
 
FORM OF PAYMENT NOTICE
 
To:
HUICAN (TIANJIN) SHIPPING LEASING CO., LTD.
Date:
Memorandum of Agreement dated _________________________ (the “Agreement”)
in relation to the ship with hull number [●] (the “Vessel”)
1.
We refer to the Agreement made between us in relation to the Vessel.
 
2.
This is the Payment Notice as defined in the Agreement.
 
3.
Capitalised terms in this Payment Notice have the meanings set out in the Agreement unless otherwise defined herein.
 
4.
The Scheduled Delivery Date is  
 
5.
We  hereby  request  that,  pursuant  to Clause 17 of  the  Agreement  an  amount  of $_________________________ (“Purchase Price”) be held and released in accordance
with the Escrow Agreement with account details below (being the Escrow Account) and such payment shall be deemed satisfaction of your obligation under Clause 17 of the
Agreement to make payment of such amount:
 
Account Name:
[●]
Beneficiary Bank
[●]
Branch
[●]
Beneficiary Bank SWIFT Code
[●]
IBAN
[●]
Account Number
[●]
Quote Reference
Hull Number [●] – Purchase Price
 
6.
We further represent and warrant that no Termination Event or Potential Termination Event (each as defined in the Bareboat Charter) has occurred.
 
7.
This Payment Notice is irrevocable once issued (unless otherwise agreed by the Buyers).
 
8.
We agree that the payment of the Purchase Price when remitted according to paragraph 5 above shall constitute a full discharge of the Buyers’ obligation to make payment of the
Purchase Price under the Agreement.
JSFL Performance - MOA Rider Clauses
SINGAPORE/91403403v5
8

Yours faithfully,
 
 
Name:
Title: Attorney-in-fact
for and on behalf of
 
Mustique Shipping Company Inc.
Date:
JSFL Performance - MOA Rider Clauses
SINGAPORE/91403403v5
9

EXECUTION PAGE
BUYERS
 
 
 
 
 
 
SIGNED BY
 
)
for and on behalf of
 
)
HUICAN(TITANJIN) SHIPPING LEASING CO., LTD.
)
in the presence of
9/F, No. 1 Building, No.99 East
)
Witness’ signature:
Witness’ name:
Witness’ address:
)
)
)
Zhang Xinhang
 
Jialingajiang Street, Nanjing, Jiangsu
 
Attorney-in-fact
 
Province, P.R. China
 
 
SELLERS
 
 
 
 
SIGNED BY
 
)
attorney-in-fact
 
)
for and on behalf of
 
)
MUSTIQUE SHIPPING COMPANY INC.
)
in the presence of
Witness’s signature:
Witness’s name:
Witness’ address:
)
)
)
)
Andreas Nikolaos Michalopoulos
JSFL Performance - MOA Rider Clauses
SINGAPORE/91403403v5
 10

Exhibit 4.33
 MEMORANDUM OF AGREEMENT
SALESFORM 2012
 
Norwegian Ship brokers• Association’s
 
Memorandum of Agreement for sale and purchase of ships
 
1
Dated: 05 March 2025
2
3
GUADELOUPE SHIPPING COMPANY INC. of the Republic of the Marshall Islands guaranteed by
4
Performance Shipping Inc., of the Republic of the Marshall Islands, hereinafter called the “Sellers”, have
5
agreed to sell, and 6
6
 
7
T.A.C.K. SHIPPING, S.A. of the Republic of Panama, guaranteed by Kowa Kain Co., Ltd. of Japan,
8
hereinafter called the “Buyers”, have agreed to buy:
9
 
10
Name of vessel: MT “P. MARSEILLE” (New building LR2 Tanker “Hull H1597”)
11
 
12
IMO Number: 1057218
13
14
Classification Society:_____________
15
16
Class Notation:___________
17
18
Year of Build: __________2026
19
20
Builder/Yard: Shanghai Waigaoqiao Shipbuilding Company Limited, PRC.
21
 
22
Flag: Marshall Islands or Liberia or Malta to be mutually agreed, or Portugal if acceptable to the Buyers
23
and its financiers, or any other jurisdiction proposed by the Sellers and approved by the Buyers, such
24
approval not to be unreasonably denied or delayed.
25
 
26
Place of Registration:
27
 
28
GT/NT:
29
30
hereinafter called the “Vessel”, on the following terms and conditions:
31
32
This Agreement is subject to, and forms part of, a transaction involving the sale, purchase and the lease financing
33
of the Vessel, pursuant to the BBCP.
34
35
The Vessel is currently under construction under the Building Contract. The Sellers’ obligation to sell and deliver
36
the Vessel to the Buyers under this Agreement is conditional upon the delivery of the Vessel to the Sellers by the
37
Construction Seller pursuant to the terms of the Building Contract.
38
39
Definitions
40
“Banking Days” are days on which banks are open both in the country of the currency stipulated for the Purchase
41
Price in Clause 1 (Purchase Price) and in the place of closing stipulated in Clause 8 (Documentation) and New
42
York, London, Tokyo, Athens, and Shanghai.
 
 
43
“BBCP” means Bareboat Charter Party dated 05 March 2025 made between the Sellers as the Charterers and
44
the Buyers as the Owners together with any addenda thereto.
45
 
46
“Builder” means Shanghai Waigaoqiao Shipbuilding Company Limited, a corporation organized and existing under
47
the laws of the People’s Republic of China, having its registered office at 3001 Zhouhai Road, Pudong New District,
48
Shanghai 200137, the People’s Republic of China.
49
50
“Construction Seller’s Bank” means an account (state details of bank account) at the Builder’s Bank.
51
52
Bank Name:
53
Branch Name:
54
Bank Address.
55
Account name:
56
Account Number:
Copyright © 2012 Norwegian Shipbrokers’ Association.   All rights reserved. 
 

57
Swift Code:
58
Intermediary Bank:
59
Swift Code:
60
61
“Building Contract” means the ship building contract dated 18 December 2023 (as amended by Addendum no.1
62
dated 18 December 2023) made between the Construction Seller and the Sellers as buyer.
63
64
“Buyer’s Bank” means Nishi-Nippon City Bank Ltd.
 
 
65
“Buyers’ Nominated Flag State” means Marshall Islands or Liberian flag
66
“Class” means the class notation referred to above.
67
“Classification Society” means the Society referred to above.
68
69
“Charterers” means Charterers as defined in the BBCP.
70
71
“Construction Seller” means together (i) the Builder and (ii) China Shipbuilding Trading Company Limited, a
72
company incorporated and existing under the laws of the People’s Republic of China, having its registered office
73
at 56(Yi), Zhongguancun Nan Da Jie, Beijing 100044, the People’s Republic of China.
74
75
“Delivery Date” means that date on which the Vessel is delivered by the Sellers to the Buyers under this
76
Agreement.
77
 
78
“Deposit” shall have the meaning given in Clause 2 (Deposit).
 
79
“Deposit Holder” means          (state name and location of Deposit Holder) or, if left blank, the Sellers’ Bank, which
80
shall hold and release the Deposit in accordance with this Agreement.
 
 
81
“In writing” or “written” means a letter handed over from the Sellers to the Buyers or vice versa, a registered
82
letter, email or telefax.
83
84
“Net Finance Amount” means USD 45,000,000.00 (United States Dollars Forty-Five Million).
85
86
“Owners” means Owners as defined in the BBCP.
 
 
87
“Parties” means the Sellers and the Buyers.
 
 
88
“Purchase Price” means the price for the Vessel as stated in Clause 1 (Purchase Price).
89
“Sellers’ Account” means an account (state details of bank account) at the Sellers’ Bank.
90
91
Bank Name:
92
Branch Name:
93
Bank Address:
94
Account name:
95
Account Number:
96
USD IBAN:
97
Swift Code:
98
Intermediary Bank:
99
Swift Code:
100
101
“Sellers’ Bank” means ..................................
102
103 
1.
Purchase Price
Copyright © 2012 Norwegian Shipbrokers’ Association.   All rights reserved. 
 

104
  
105
The Purchase Price is USD 45,000,000.00 (state currency and amount both in words and figures) (United
106
 States Dollars Forty-Five Million).
107
  
108
2.
Deposit (clause not applicable)
109
 
 
110
As security for the correct fulfilment of this Agreement the Buyers shall lodge a deposit of  % (per cent) or,
111
 
if left blank,10% (ten per cent), of the Purchase Price (the “Deposit”) in an interest bearing account for the 
112
 
Parties with the Deposit Holder within three (3) Banking Days after the date that:
113
114
(i) this Agreement has been signed by the Parties and exchanged in original or by e mail or telefax; and
115
 
116
 
(ii) the Deposit Holder has confirmed in writing to the Parties that the account has been opened.
117
 
118
The Deposit shall be released in accordance with joint written instructions of the Parties. Interest, if any,
119
shall be credited to the Buyers. Any fee charged for holding and releasing the Deposit shall be borne
220
 
equally by the Parties. The Parties shall provide to the Deposit Holder all necessary documentation to open
121
 
and maintain the account without delay.
122
 
 
123
3.
Payment
124
 
 
125
Please see Additional Clause 22 (Payment).
126
 
 
127
On delivery of the Vessel, but not later than three (3) Banking Days after the date that Notice of Readiness
128
 
has been given in accordance with Clause 5 (Time and place of delivery and notices):
129
 
130
(i) the Deposit shall be released to the Sellers; and
131
 
132
(ii) the balance of The Purchase Price (less Charterers’ Down Payment as per BBCP clause 49) and all other
133
 
sums payable on delivery by the Buyers to the Sellers under this Agreement shall be paid in full free of bank
134
 
charges to the Sellers’ Account. Purchase Price shall be paid into a suspense account with the Sellers’ Bank
135
 
with conditional payment method set out in a MT 199 SWIFT message not later than two (2) Banking Days
136
 
prior to Delivery with irrevocable and unconditional instruction to be released to Sellers upon presentation of
137
 
a fixed copy of the Protocol of Delivery and Acceptance signed by both the Sellers and the Buyers.
138
 
and all other sums payable on delivery by the Buyers to the Sellers under this Ageement shall be paid in full
139
 
free of bank charges to the Sellers’ Account.
140
 
 
141
4.
Inspection
142
 
 
143
The Buyers confirm that prior to the date of this Agreement they have received (i) a copy of the Building
144
 
Contract, (ii) full specifications and drawings (including makers list), (iii) up-to-date photographs of the Vessel
145
 
and (iv) any other information which they requested to enable the Buyers and their advisors to assess the
146
 
condition of the Vessel, and the Buyers confirm that they hereby accept the technical condition of the Vessel.
147
 
Therefore,
148
 
 
149
(a)* The Buyers have inspected and accepted the Vessel’s classification records. The Buyers have also
150
inspected the Vessel at/in              (state place) on               (state date) and have accepted the Vessel
151
following this inspection and the sale is outright and definite, subject only to the terms and conditions of this 
152
Agreement.
153
154
(b)* (i) The Buyers shall have the right to inspect the Vessel’s classification records and declare whether same 
155
are accepted or not within               (state date/period).-
156
157
(ii) The Sellers shall make the Vessel available for inspection at/in                (state place/range) within
158
(state date/period).
159
Copyright © 2012 Norwegian Shipbrokers’ Association.   All rights reserved. 
 

160
 
The Buyers shall undertake the inspection without undue delay to the Vessel. Should the Buyers cause
16l
 
undue delay they shall compensate the Sellers for the losses thereby incurred.
162
 
163
 
The Buyers shall inspect the Vessel without opening up and without cost to the Sellers.
164
 
165
 
During the inspection, the Vessel’s deck and engine log books shall be made available for examination by
166
 
the Buyers.
167
 
168
 
The sale shall become outright and definite, subject only to the terms and conditions of this Agreement,
169
 
provided that the Sellers receive written notice of acceptance of the Vessel from the Buyers within seventy
170
 
two (72) hours after completion of such inspection or after the date/last day of the period stated in Clause
171
 
4(b)(ii), whichever is earlier.
172
 
 
173
 
Should the Buyers fail to undertake the inspection as scheduled and/or notice of acceptance of the Vessel’s
174
 
classification records and/or of the Vessel not be received by the Sellers as aforesaid, the Deposit together
175
 
with interest earned, if any, shall be released immediately to the Buyers, whereafter this Agreement shall be
176
 
null and void.
177
 
178
 
*4(a) and 4(b) are alternatives; delete whichever is not applicable. In the absence of deletions, alternative
179
 
4(a) shall apply.
180
 
 
181
5.
Time and place of delivery and notices
182
 
 
183
(a)
The Vessel shall be delivered and taken over as is where is safely afloat alongside a quay or pier at a safe
184
 
and accessible berth or anchorage at the shipyard of the Builder in the Sellers’ option.
185
 
 
186
 
Expected time of delivery: the expected date of delivery of the Vessel under the Building Contract tNotice of
187
 
Readiness shall not be tendered before: XX XXX 2025
188
 
 
189
 
Cancelling Date (see Clauses 5(d) 6(a)(i), and 14): 31 October 2026
190
 
 
191
(b)
The Sellers shall keep the Buyers well informed with regards to the actual delivery date of the Vessel of the
192
 
Vessel’s itinerary and shall provide the Buyers with twenty (20), fifteen (15), seven (7) and three (3) and
193
 
three (3) days’ approximate notice and three (3) two (2) Banking Days’ definite notice of the date of delivery.
194
 
Timing of delivery to be mutually agreed by Sellers and Buyers.
195
 
When the Vessel is at the place of delivery and physically ready for delivery in accordance with this
196
 
Agreement, the Sellers shall give the Buyers a written Notice of Readiness for delivery.
197
 
 
198
 
The Buyers hereby confirm that, in accordance with the terms and conditions provided herein, the delivery
199
 
of the Vessel by the Sellers under this Agreement will take place simultaneously with the delivery of the
200
 
Vessel to the Sellers under the Building Contract.
201
 
 
202
6.
Divers Inspection  / Drydocking (clause not applicable)
203
 
 
204
(a)* (i) The Buyers shall have the option at their cost and expense to arrange for an underwater inspection by a
205
 
diver approved by the Classification Society prior to the delivery of the Vessel. Such option shall be
206
 
declared latest nine (9) days prior to the Vessel’s intended date of readiness for delivery as notified by the
207
 
Sellers pursuant to Clause 5(b) of this-Agreement. The Sellers shall at their cost and expense make the
208
 
Vessel available for such inspection. This inspection shall be carried out without undue delay and in the
209
 
presence of a Classification Society surveyor arranged for by the Sellers and paid for by the Buyers. The
210
 
Buyers’ representative(s) shall have the right to be present at the diver’s inspection as observer(s) only
211
 
without interfering with the work or decisions of the Classification Society surveyor. The extent of the
212
 
inspection and the conditions under which it is performed shall be to the satisfaction of the Classification
213
 
Society. If the conditions at the place of delivery are unsuitable for such inspection, the Sellers shall at their
214
 
cost and expense make the Vessel available at a suitable alternative place near to the delivery port, in
215
 
which event the Canceling Date sha1l be extended by the additional time required for such positioning and
216
 
the subsequent re positioning. The Sellers may not tender Notice of Readiness prior to completion of the
Copyright © 2012 Norwegian Shipbrokers’ Association.   All rights reserved. 
 

217
 
underwater inspection.
218
 
219
 
(ii) If the rudder, propeller, bottom or other underwater parts below the deepest load line are found broken,
220
 
damaged or defective so as to affect the Vessel’s class, then (1) unless repairs can be carried out afloat to
221
 
the satisfaction of the Classification Society, the Sellers shall arrange for the Vessel to be drydocked at their
222
 
expense for inspection by the Classification Society of the Vessel’s underwater parts below the deepest load
223
 
line, the extent of the inspection being in accordance with the Classification Society’s rules (2) such defects
224
 
shall be made good by the Sellers at their cost and expense to the satisfaction of the Classification Society
225
 
without condition/recommendation** and (3) the Sellers shall pay for the underwater inspection and the
226
 
Classification Society’s attendance.
227
 
228
 
Notwithstanding anything to the contrary in this Agreement, if the Classification Society do not require the
229
 
aforementioned defects to be rectified before the next class drydocking survey, the Sellers shall be entitled
230
 
to deliver the Vessel with these defects against a deduction from the Purchase Price of the estimated direct
231
 
cost (of labour and materials) of carrying out the repairs to the satisfaction of the Classification Society,
232
 
whereafter the Buyers shall have no further rights whatsoever in respect of the defects and/or repairs. The
233
estimated direct cost of the repairs shall be the average of quotes for the repair work obtained from two
234
 
reputable independent shipyards at or in the vicinity of the port of delivery, one to be obtained by each of the
235
 
Parties within two (2) Banking Days from the date of the imposition of the condition/recommendation, unless
236
 
the Parties agree otherwise. Should either of the Parties fail to obtain such a quote within the stipulated time
237
 
then the quote duly obtained by the other Party shall be the sole basis for the estimate of the direct repair
238
 
costs. The Sellers may not tender Notice of Readiness prior to such estimate having been established.
239
 
240
 
(iii) if the Vessel is to be drydocked pursuant to Clause 6(a)(ii) and no suitable dry docking facilities are
241
 
available at the port of delivery, the Sellers shall take the Vessel to a port where suitable drydocking facilities
242
 
are available, whether within or outside the delivery range as per Clause 5(a). Once drydocking has taken
243
 
place the Sellers shall deliver the Vessel at a port within the delivery range as per Clause 5(a) which shall,
244
 
for the purpose of this Clause, become the new port of delivery. In such event the Cancelling Date shall be
245
 
extended by the additional time required for the drydocking and extra steaming, but limited to a maximum of
246
 
fourteen (14) days.
247
 
248
(b)* The  Sellers shall place the Vessel in drydock at the port of delivery for inspection by the Classification
249
 
Society of the Vessel’s underwater parts below the deepest load line, the extent of the inspection being in
250
 
accordance with the Classification Society’s rules. If the rudder, propeller, bottom or other underwater parts
251
 
below the deepest load line are found broken, damaged or defective so as to affect the Vessel’s class, such
252
 
defects shall be made good at the Sellers’ cost and expense to the satisfaction of the Classification Society
253
 
without condition/recommendation**. In such event the Sellers are also to pay for the costs and expenses in
254
 
connection with putting the Vessel in and taking her out of drydock, including the drydock dues and the
255
 
Classification Society’s fees. The Sellers shall also pay for these costs and expenses if parts of the tailshaft
256
 
system are condemned or found defective or broken so as to affect the Vessel’s class. In all other cases,
257
 
the Buyers shall pay the aforesaid costs and expenses, due and fees.
258
 
259
(c)
If the Vessel is drydocked pursuant to Clause 6(a)(ii) or 6(b) above:
260
 
261
 
(i) The Classification Society may require survey of the tailshaft system, the extent of the survey being to the
262
 
satisfaction of the Classification surveyor. If such survey is not required by the Classification Society, the
263
 
Buyers shall have the option to require the tailshaft to be drawn and surveyed by the classification Society,
264
 
the extent of the survey being in accordance with the Classification Society’s rule for tailshaft survey and
265
 
consistent with the current stage of the Vessel’s survey cycle. The Buyers shall declare whether they require
266
 
the tailshaft to be drawn and surveyed not later than by the completion of the inspection by the
267
 
Classification Society. The drawing and refitting of the tailshaft shall be arranged by the Sellers. Should any
268
 
parts of the tailshaft system be condemned or found defective so as to affect the Vessel’s class, those parts
269
 
shall be renewed or made good at the Sellers’ cost and expense to the satisfaction of Classification Society
270
 
without condition/recommendation**.
271
 
272
 
(ii) The costs and expenses relating to the survey of the tailshaft system shall be borne by the Buyers
273
 
unless the Classification Society requires such survey to be carried out or if parts of the system are
Copyright © 2012 Norwegian Shipbrokers’ Association.   All rights reserved. 
 

274
 
condemned or found defective or broken so as to affect the Vessel’s class, in which case the Sellers shall
275
pay these costs and expenses.
276
 
 
277
 
(iii) The Buyers’ representative(s) shall have the right to be present in the drydock as observer(s) only
278
 
without interfering with the work decisions of the Classification Society surveyor.
279
 
280
 
(iv) The Buyers shall have the right to have the underwater parts of the Vessel cleaned and painted at their
281
 
risk, cost and expense without interfering with the Sellers’ or the Classification Society surveyors’ work, if
282
 
any, and without affecting the Vessel’s timely delivery. If, however, the Buyers’ work in drydock is still in
283
 
progress when the Sellers have completed the work which the Sellers are required to do, the additional
284
 
docking time needed to complete the Buyers’ work shall be for the Buyers’ risk, cost and expense. In the
285
 
event that the Buyers’ work requires such additional time, the Sellers may upon completion of the Sellers’
286
 
work tender Notice of Readiness for delivery whilst the Vessel is still in drydock and, notwithstanding Clause
287
 5(a), the Buyers shall be obliged to take delivery in accordance with Clause 3 (Payment), whether the
288
Vessel is in drydock or not.
289
290
*6(a) and 6(b) are alternatives; delete whichever is not applicable. In the absence of deletions, alternative
291
6(a) shall apply.
292
293
**Notes or memoranda, if any, in the surveyors’s report which are accepted by the Classification Society
294
 
without condition/recommendation are not to be taken into account.
295
 
 
296
7.
Spares, bunkers and other items
297
 
 
298
 
The Sellers shall deliver the Vessel to the Buyers with everything belonging to her on board and on shore.
299
 
All spare parts and spare equipment including spare tail-end shaft(s) and/or spare propeller(s)/propeller
300
 
blade(s), if any, belonging to the Vessel at the time of inspection delivery used or unused, whether on board
301
 
or not shall become remain the Buyers’ Seller’s property. but-spares on order are excluded. Forwarding
302
 
charges, if any, shall be for the Buyers’ account. The Sellers are not required to replace spare parts
303
 
including spare tail end shaft(s) and spare propeller(s)/propeller blade(s) which are taken out of spare and
304
 
used as replacement prior to delivery, but the replaced items shall be the property of the Buyers. Unused
305
 
stores and previsions shall be included in the sale and be taken over by the Buyers without extra payment.
306
 
307
 
Library and forms exclusively for use in the Sellers’ vessel(s) and captain’s, officers’ and crew’s personal
308
 
belongings including the slop chest are excluded from the sale without compensation, as well as the
309
 
following additional items:         (include list)
310
 
 
311
 
Items on board which are on hire or owned by third parties, listed as follows, are excluded from the sale
312
 
without compensation:             (include list)
313
 
 
314
 
Items on board at the time of inspection delivery which are on hire or owned by third parties, not listed
315
 
above, shall be replaced or procured by remain with the Sellers prior to delivery at their cost and expense.
316
 
Any remaining bunkers and unused lubricating and hydraulic oils and greases in storage tanks and
317
 
unopened drums shall remain the property of the Sellers and shall not form part of the sale.
318
 
 
319
 
The Buyers shall take over remaining bunkers and unused lubricating and hydraulic oils and greases in
320
 
storage tanks and unopened drums and pay either:
321
 
322
(a)* the actual net price (excluding barging expenses) as evidenced by invoices or vouchers; or
323
324
(b)* the current net market price (excluding barging expenses) at the port and date of delivery of Vessel or, if
325
 
unavailable, at the nearest bunkering port,
326
 
327
 
for the quantities taken over.
328
 
329
 
Payment under this Clause shall be made at the same time and place and in the same currency as the
330
 
Purchase Price.
Copyright © 2012 Norwegian Shipbrokers’ Association.   All rights reserved. 
 

331
 
 
332
 
“inspection” in this Clause 7,shall mean the Buyers’ inspection according to Clause 4(a) or 4(b)
333
 
(inspection), if applicable. If the Vessel is taken over without inspection, the date of this Agreement shall be
334
 
the relevant date.
335
 
336
 
*(a) and (b) are alternatives, delete whichever is not applicable. In the absence of deletions alternative (a)
337
 
shall apply.
338
 
 
339
8.
Documentation
340
 
 
341
 
The place of closing: Virtual closing or physically at the Builder, to be confirmed.
342
 
 
343
 
In exchange for payment of the Purchase Price, Sellers shall furnish the Buyers with delivery documents  
344
 
reasonably required by the Buyers. These documents shall be listed in an addendum hereto, namely
345
 
‘‘Addendum no 1: List of delivery documents”, and regarding such documents that are not available prior to 
346
 
the closing, Sellers shall furnish the Buyers with the final draft of such documents no later than three (3) 
347
 
Banking Days prior to the date of closing for the purpose of carrying out the closing smoothly.
348
 
 
349
(a)
In exchange for payment of the Purchase Price the Sellers shall provide the Buyers with the following
350
 
delivery documents:
351
 
352
 
(i) Legal Bill(s) of Sale in a form recordable in the Buyers’s Nominated Flag State, transferring title of the
353
 
Vessel and stating that the Vessel is free from all mortgages, encumbrances and maritime liens or any other 
354
 
debts whatsoever, duly notarially attested and legalized or apostilled, as required by the Buyers’ Nominated
355
 
Flag State;
356
 
357
 
(ii) Evidence that all necessary corporate, shareholder and other action has been taken by the Sellers to
358
 
authorise the execution, delivery and performance of this Agreement;
359
 
360
 
(iii) Power of Attorney of the Sellers appointing one or more representatives to act on behalf of the Sellers in
361
 
the performance of this Agreement, duly notarially attested and legalized or apostilled (as appropriate);
362
 
363
 
(iv) Certificate or Transcript of Registry issued by the, competent authorities of the flag state on the date of 
364
 
delivery evidencing the Sellers’ ownership of the Vessel and that the Vessel is free from registered
365
 
encumbrances and mortgages,to be faxed or e mailed by such authority to the closing meeting with the
366
 
original to be sent to the Buyers as soon as possible after delivery of the Vessel;
367
 
368
 
(v) Declaration of Class or (depending on the Classification Society) a Class Maintenance Certificate 
369
 
issued within three (3) Banking Days prior to delivery confirming that the Vessel is in Class free of
370
 
condition/recommendation;
371
 
372
 
(vi) Certificate of Deletion of the Vessel from the registry or other official evidence of deletion
373
 
appropriate to the Vessel’s registry at the time of delivery, or, in the event that the registry does not as a
374
 
matter of practice issue such documentation immediately, a written undertaking by the Sellers to effect 
375
 
deletion from the Vessel’s registry forthwith and provide a certificate or other official evidence of deletion to
376
 
the Buyers promptly and latest within four(4) weeks after the Purchase Price has been paid and the Vessel
377
 
has been delivered;
378
 
379
 
(vii) A copy of the Vessel’s Continuous Synopsis Record certifying the date on which the Vessel ceased to
380
 
be registered with the Vessel’s registry, or, in the-event that the registry does not as a matter of practice
381
 
issue such certificate immediately, a written undertaking from the Sellers to provide the copy of this 
382
 
certificate promptly upon it being issued together with evidence of submission by the Sellers of a duly
383
 
executed Form 2 stating the date on which the Vessel shall cease to be registered with the Vessel’s registry;
384
 
385
 
(viii) Commercial Invoice for the Vessel;
386
 
387
 
(ix) Commercial Invoice(s) for bunkers, lubricating and hydraulic oils and greases;
Copyright © 2012 Norwegian Shipbrokers’ Association.   All rights reserved. 
 

388
 
 
389
 
(x) A copy of the Seller’s letter to their satellite communication provider cancelling the Vessel’s
390
 
communications contract which is to be sent immediately after delivery of the Vessel;
391
 
392
 
(xi) Any additional documents as may reasonably be required by the competent authorities of the Buyers’
393
 
Nominated Flag State for the purpose of registering the Vessel, provided the Buyers notify the Sellers of any
394
 
such documents as soon as possible after the date of this Agreement; and
395
 
396
 
(xii) The Seller’s letter of confirmation that to the best of their knowledge, the Vessel is not black listed by
397
 
Any nation or international organisation.
398
 
399
(b)
At the time of delivery the Buyers shall provide the Sellers with:
400
 
401
 
(i) Evidence that all necessary corporate, shareholder and other action has been taken by the Buyers to
402
 
authorise the execution, delivery and performance of this Agreement; and
403
 
404
 
(ii) Power of Attorney of the Buyers appointing one or more representatives to act on behalf of the Buyers in
405
 
the performance of this Agreement, duly notarially attested and legalised or apostilled (as appropriate).
406
 
407
(c)
If any of the documents listed in Sub clauses (a) and (b) above are not in the English language they shall be
408
 
accompanied by an English translation by an authorised translator or certified by a lawyer qualified to
409
 
practice in the country of the translated language.
410
 
411
(d)
The Parties shall to the extent possible exchange copies, drafts or samples of the documents listed in Sub
412
 
clause (a) and Sub clause (b) above for review and comment by the other party not later than ( state number
413
 
of days), or if left blank, nine (9) days prior to the Vessel’s intended date of readiness for delivery as notified
414
 
by the Sellers pursuant to Clause 5(b) of this Agreement.
415
 
416
(e)
Concurrent with the exchange of documents in Sub-clause (a) and Sub-clause (b) above, the Sellers shall
417
 
also hand to the Buyers the classification certificate(s) as well as all plans, drawings and manuals,
418
 
(excluding ISM/ISPS manuals), which are on board the Vessel. Other certificates which are on board the
419
 
Vessel shall also be handed over to the Buyers unless the Sellers required to retain same, in which case
420
 
the Buyers have the right to take copies.
421
 
422
(f)
Other technical documentation which may be in the Sellers’ possession shall promptly after delivery be
423
 
forwarded to the Buyers at their expense, if they so request. The Sellers may keep the Vessel’s log books
424
 
but the Buyers have the right to take copies of same.
425
 
 
426
(g)
The Parties shall sign and deliver to each other a Protocol of Delivery and Acceptance confirming the date
427
 
and time of delivery of the Vessel from the Sellers to the Buyers.
428
 
 
429
9.
Encumbrances
430
 
 
431
 
The Sellers warranty that the Vessel, at the time of delivery, is free from all charters, encumbrances,
432
 
mortgages and maritime liens or any other debts whatsoever, and is not subject to Port State or other
433
 
administrative detentions. The Sellers hereby undertake to indemnify the Buyers against all consequences
434
 
of claims made against the Vessel which have been incurred prior to the time of delivery.
435
 
 
436
10.
Taxes, fees and expenses
437
 
 
438
 
Any cost and fee for initial registration of title to the Vessel and legal documentation cost for documenting
439
 
the lease and security to be Charterer’s account; however such cost not to exceed USD15,000.
440
 
Any tonnages taxes for Owners’ flag and Charterers’ flag to be Charterers account.
441
 
Any taxes, fees and expenses in connection with the purchase and registration in the Buyers’ Nominated
442
 
Flag State shall be for the Buyers’ account, whereas similar charges in connection with the closing of the
443
 
Sellers’ register shall be for the Sellers’ account.
444
 
 
Copyright © 2012 Norwegian Shipbrokers’ Association.   All rights reserved. 
 

445
11.
Condition of delivery
446
 
 
447
 
The Vessel with everything belonging to her shall be at the Sellers’ risk and expenses until she is delivered to
448
 
the Buyers, but subject to the terms and conditions of this Agreement she shall be delivered and taken over
449
 
“as is where is” she was at the time of inspection delivery, fair wear and tear excepted. The Vessel shall be
450
 
delivered to the Buyers only once she is in all respects ready in accordance with the Building Contract.
451
 
 
452
 
However, the Vessel shall be delivered free of cargo and free of stowaways with her Class maintained
453
 
without condition/recommendation*, free of average damage affecting the Vessel’s class, and with her
454
 
classification certificates and national certificates, as well as all other certificates the Vessel had at the time
455
 
of inspection, valid and unextended without condition/recommendation* by the Classification Society or the
456
 
relevant authorities at the time of delivery.   
457
 
458
 
“Inspection” in the Clause 11, shall mean the Buyers’ inspection according to Clause 4(a) or 4(b)
459
 
(Inspections), if applicable. If the Vessel is taken over without inspection, the date of this Agreement shall be
460
 
the relevant date.   
461
 
462
 
*Notes and memoranda, if any, in the surveyor’s report which are accepted by the Classification Society
463
 
without condition/recommendation are not to be taken into account. 
464
 
 
465
12.
Name/markings (clause not applicable)
466
 
 
467
 
Upon delivery the Buyers undertake to change the name of the Vessel and alter funnel markings.
468
 
 
469
13.
Buyers’ default
470
 
 
471
 
Should the Deposit not be lodged in accordance with Clause 2 (Deposit), the Sellers have the right to
472
 
cancel this Agreement, and they shall be entitled to claim compensation for their losses and for all expenses
473
 
incurred together with interest.
474
 
 
475
Should the Purchase Price not be paid in accordance with Additional Clauses 322 (Payment), the Sellers
476
 
have the right to cancel this Agreement, and the Buyers shall make due compensation to the Sellers for
477
 
their direct and documented losses and expenses.in which case the Deposit together with interest earned, if
478
 
any, shall be released to the Sellers. If the Deposit does not cover their loss, the Sellers shall be entitled to
479
 
claim further compensation for their losses and for all expenses incurred together with interest.
480
 
 
481
14.
Sellers’ default
482
 
 
483
 
Should the Sellers fail to give Notice of Readiness in accordance with Clause 5(b) or fail to be ready to
484
 
validly complete a legal transfer by the Cancelling Date the Buyers shall have the option of cancelling this
485
 
Agreement. To this purpose, the Sellers shall advise Buyers the relevant extension of the Cancelling Date
486
 
and request them to declare within three (3) Banking Days whether they accept such extension or cancel
487
 
this Agreement. Failure of the Buyers to reply to the said notice of the Sellers shall be deemed an
488
 
acceptance by the Buyers of the extension of the Cancelling Date as proposed by Sellers. If after Notice of
489
 
Readiness has been given but before the Buyers have taken delivery, the Vessel ceases to be physically
490
 
ready for delivery and is not made physically ready again by the Cancelling Date and new Notice of
491
 
Readiness given, the Buyers shalt retain their option to cancel. In the event that tho Buyers elect to cancel
492
 
this Agreement, the Deposit together with interest earned, if any, shall be released te them immediately.
493
 
 
494
 
Should the Sellers fail to give Notice of Readiness by the Cancelling Date as may be extended or fail to be
495
 
ready to validly complete a legal transfer as aforesaid they shall make due compensation to the Buyers in
496
 
the amount of USD 30,000 plus any documented reasonable legal costs (if any) of the Buyers for the initial
497
 
registration of title to the Vessel and legal documentation cost for documenting the lease and security such
498
 
costs not to exceed USD15,000 for their loss and for all expenses together with interest if their failure is due
499
 
to proven negligence and whether or not the Buyers cancel this Agreement.
500
 
501
 
If the Building Contract is cancelled, rescinded or otherwise terminated for any reason whatsoever or the
Copyright © 2012 Norwegian Shipbrokers’ Association.   All rights reserved. 
 

502
 
Vessel is not delivered by the Construction Seller to the Sellers under the Building Contract or is rejected by
503
 
the Sellers for any reason whatsoever, then the Sellers shall give written notice thereof to the Buyers and
504
 
upon Buyers’ receipt of such notice, this Agreement shall cease to have effect without any liability on the
505
 
parties hereto and the parties shall be released from all obligations, liabilities and responsibilities hereunder,
506
 
save for the obligation of the Sellers to pay to the Buyers a termination fee in the sum of USD30,000 plus any
507
 
documented reasonable legal costs (if any) of the Buyers for the initial registration of title to the Vessel and
508
 
legal documentation cost for documenting the lease and security such costs not to exceed USD15,000.
509
 
 
510
 
The Sellers shall be entitled to terminate this Agreement at any time before the date of delivery of the Vessel
511
 
under the Building Contract by a 180 calendar days’ written notice to the Buyers, whereupon this Agreement
512
 
shall cease to have effect without any liability on the parties hereto and the parties shall be released from all
513
 
obligations, liabilities and responsibilities hereunder, save for the obligation of the Sellers to pay to the Buyers
514
 
a termination fee in the sum of USD30,000 plus any documented reasonable legal costs (if any) of the Buyers
515
 
for the initial registration of title to the Vessel and legal documentation cost for documenting the lease and
516
 
security such costs not to exceed USD15,000
517
 
 
518
15 Buyers’ representatives (clause not applicable)
519
 
520
 
After this Agreement has been Signed by the Parties and the Deposit has been lodged, the Buyers have the
521
 
right to place two (2) representatives on board the-Vessel at-their-sole risk and expense.
522
 
 
523
 
These representatives are on-board for the purpose of familiarization  and in the capacity of observers only,
524
and they shall not interfere in any respect with the operation of the Vessel. The  Buyers and the Buyers’
525
 
representatives  shall sign the Seller’ P&I Club’s standard letter of indemnity prior to their embarkation.
526
 
 
527
 16. Law and Arbitration
528
 
 
529
 (a)* This Agreement and all non contractual obligations arising out of or in connection with it shall be governed
530
 
by and construed in accordance with English law and any dispute arising out of or in connection with this
531
 
Agreement shall be referred to arbitration in London in accordance with the Arbitration Act 1996 or any
532
 
statutory modification or re- enactment thereof save to the extent necessary to give effect to the provisions
533
 
of this Clause.
534
 
 
535
 
The arbitration shall be conducted in accordance with the London Maritime Arbitrators Association (LMAA)
536
 
Terms current at the time when the arbitration proceedings are commenced.
537
 
 
538
 
The reference shall be to three arbitrators. A party wishing to refer a dispute to arbitration shall appoint its
539
 
arbitrator and send notice of such appointment in writing to the other party requiring the other party to
540
 
appoint its own arbitrator within fourteen (14) calendar days of that notice and stating that it will appoint its
541
 
arbitrator as sole arbitrator unless the other party appoints its own arbitrator and gives notice that it has
542
 
done so within the fourteen (14) days specified. If the other party does not appoint its own arbitrator and
543
 
give notice that it has done so within the fourteen (14) days specified, the party referring a dispute to
544
 
arbitration may, without the requirement of any further prior notice to the other party, appoint its arbitrator as
545
 
sole arbitrator and shall advise the other party accordingly. The award of a sole arbitrator shall be binding on
546
 
both Parties as if the sole arbitrator had been appointed by agreement.
547
 
 
548
 
In case where neither the claim nor any counterclaim exceeds the sum of US$100,000 the arbitration shall
549
 
be conducted in accordance with the LMAA Small Claims Procedure current at the time when the arbitration
550
 
proceedings are commenced.
551
 
 
552
(b)* This Agreement shall be governed by and construed in-accordance with Title 9 of the United States  Code 
553
 
and the substantive law (not including the choice of law rules) of the state of New York and any dispute
554
 
arising out of or in connection with this Agreement shall be referred to three (3) persons at New York, one to
555
 
be appointed by each of the parties hereto, and the third by the two so chosen; there decision or that of any
556
 
two of them shall be final, and for the purposes of enforcing any award, judgment may be entered on an
557
 
award by any court of competent jurisdiction. The proceedings shall be conducted in accordance with the
558
 
rules of the Society of Maritime Arbitrators, Inc.
Copyright © 2012 Norwegian Shipbrokers’ Association.   All rights reserved. 
 

559
 
 
560
 
In cases where neither the claim nor any counterclaim exceeds the sum of US$100,000 the arbitration shall
561
be conducted in accordance with the Shortened Arbitration Procedure of the Society of Maritime Arbitrators,
562
 
Inc.
563
 
 
564
(C)
This Agreement shall be governed by and construed in accordance with the laws of          (state place)
565
and any dispute arising out of or in connection with this Agreement shall be referred to arbitration at (state
566
place), subject to the procedures applicable-there.
567
 
 
568
 
*16(a), 16(b) and 16(c) are alternatives; delete whichever is not applicable. In the absence of deletions,
569
 
alternative 16(a) shall apply.
570
 
 
571
 17. Notices
572
 
573
 
All notices to be provided under this Agreement shall be in writing.
574
 
 
575
 
Contact details for recipients of notices are as follows:
576
 
 
577
 
For the Buyers:
578
 
Kowa Kaiun Co., Ltd.
579
 
470-1 Oaza Nagashima, Kaminoseki-cho, Kumage-gun, Yamaguchi, Japan
580
 
Email:  
581
 
Attention:   Takayuki Hanada
582
 
 
583
 
 
584
 
For the Sellers:
585
 
GUADELOUPE SHIPPING COMPANY INC.
586
 
c/o PERFORMANCE SHIPPING MANAGEMENT INC.
587
 
373 Syngrou Ave. & 2-4 Ymittou str.,
588
 
17564, Palaio Faliro, Athens,
589
 
Greece
590
 
Email: 
591
 
Attention: Mr. Andreas Nikolaos Michalopoulos
592
 
 
593
 18. Entire Agreement
594
 
 
595
 
The terms of this Agreement and the terms of the BBCP comprise the entire agreement between the Buyers
596
 
and the Sellers in relation to the sale and purchase of the Vessel and supersede all previous agreements
597
 
whether oral or written between the Buyers and the Sellers in relation hereto.
598
The written terms of this Agreement comprise the entire agreement between the Buyers and the Sellers in
599
 
relation to the sale and purchase of the Vessel and supersede all previous agreements whether oral or
600
written between the Parties in relation thereto.
601
 
 
602
 
Each of the Parties acknowledges  that in entering into this Agreement it has not relied on and shall have no
603
 
right or remedy in respect of any statement, representation, assurance or warranty (whether or not made
604
negligently) other than as is expressly set out in this Agreement.
605
 
 
606
Any terms implied into this Agreement by applicable statute or law are hereby excluded to the extent
607
that such exclusion can legally be made. Nothing in this Clause shall limit or exclude any liability for fraud.  
608
 
 
609
19. Delivery under BBCP
610
 
 
611
 
The Buyers (as Owners) and the Sellers (as Charterers) have entered into the BBCP whereby the Vessel is
612
 
to be chartered on delivery for such period and on such terms and conditions more particularly described in
613
 
the BBCP. The Parties acknowledge that the Sellers’ obligation to sell and the Buyers’ obligation to
614
 
purchase the Vessel under this Agreement is conditional upon the delivery of the Vessel under and pursuant
615
 
to the MOA and the simultaneous delivery of the Vessel by the Buyers (as Owners) to the Sellers (as
Copyright © 2012 Norwegian Shipbrokers’ Association.   All rights reserved. 
 

616
 
Charterers) under the BBCP. If any event occurs before delivery of the Vessel under this Agreement that 
617
 
renders the MOA or the BBCP null and void or to be terminated for any reason whatsoever, this Agreement
618
 
shall be null and void and each Party shall be discharged and released from any and all of its respective
619
 
obligations under this Agreement.
620
 
 
621
20. Assignment
622
 
 
623
 
Neither party shall be entitled to assign or transfer its rights under this Agreement without the prior written 
624
 
consent of the other.
625
 
 
626
21. Sanctions
627
 
 
628
(a) In this Agreement, the following provisions shall apply where any applicable sanction, prohibition or
629
 
restriction is imposed on any specified persons, entities or bodies including the designation of any specified
630
 
vessels or fleets under United Nations Resolutions or trade or economic applicable sanctions, laws or
631
 
regulations of the European Union or United States of America or the United Kingdom or Japan.
632
 
 
633
(b) The Sellers hereby warrant that at the date of entering into this Agreement and continuing until the Vessel
634
 
has been delivered from the Sellers to the Buyers in accordance with this Agreement:
635
 
 
636
 
(i) none of the Sellers, their directors, officers, and employees is subject to any of the sanctions,
637
 
prohibitions, restrictions or designation referred to in sub-clause (a);
638
 
 
639
(ii) the Sellers are selling as principals and not as agent, trustee or nominee of any person with whom 
640
 
transactions are prohibited or restricted under sub-clause (a);
641
 
642
 
(iii) the Vessel is not a designated vessel under any of the sanctions, prohibitions, restrictions or designation
643
 
referred to in sub-clause (a);
644
 
 
645
(c) The Buyers hereby warrant that at the date of entering into this Agreement and continuing until the Vessel
646
 
has been delivered from the Sellers to the Buyers in accordance with this Agreement:
647
 
 
648
 
(i) none of the Buyers, their directors, officers, employees and agents is subject to any of the sanctions,
649
 
prohibitions, restrictions or designation referred to in sub-clause (a);
650
 
 
651
 
(ii) the Buyers are purchasing as principals and not as agent, trustee or nominee of any person with whom
652
 
transactions are prohibited or restricted under sub-clause (a).
653
 
 
654
 
(iii) The Buyers warrant that the proceeds of the Purchase Price have not been derived from any activities
655
 
which are in breach of sanctions or from a person or entity subject to or targeted by sanctions.
656
 
 
657
22. Payment
658
 
 
659
(a) At least two (2) Banking days (Japan time) prior to the scheduled Delivery Date, the balance of the Net
660
 
Finance Amount (“USD 45,000,000”) shall be remitted to the account of the Sellers, or the Construction
661
 
Seller as the case may be, as notified in writing by the Sellers to the Buyers. The method of payment the
662
 
Net Finance Amount shall be agreed between the Buyers, Sellers, Sellers’ Bank and Buyer’s Bank, or as
663
 
the case may be the Builder’s bank, by using corresponding MT199 SWIFT with quadripartite agreement or
664
 
a similar mutually agreed method (e.g. an Escrow Agreement with an international law firm acting as
665
 
Escrow Agent on behalf of Buyers and Sellers, in which case the Escrow Agent’s costs not to exceed USD
666
 
10,000 and to be split 50/50 between the Seller and the Buyer).
667
 
 
668
(b) The Sellers shall provide remittance request to the Buyers prior to five (5) banking days before the
669
 
scheduled delivery date. The Buyers to request their financier to remit the fund only after the remittance
670
 
notice has been received.
671
 
 
672
(c)
In case of using a suspense account or Escrow Account, the Buyers shall remit the Net Finance Amount two
Copyright © 2012 Norwegian Shipbrokers’ Association.   All rights reserved. 
 

673
 
(2) Banking days prior to the scheduled Delivery Date and such fund to be released only by instruction from
674
 
the Buyers after confirming Protocol of Delivery and Acceptance has been signed by the Sellers and
675
 
Buyers.
676
 
 
677
 (d) USD 45,000,000*(1 month CME TERM SOFR at the time of remittance + 2.0%)/360) per day (the
678
 
“Remittance Interest Cost”) from the day of remittance of the fund till the actual Delivery Date to be covered
679
 
by Sellers/Charterers.
680
 
 
681
 
Any charge from the Buyers’ Bank including intermediate bank(s), if any, incurred for remitting shall be for
682
 
Buyers’ account.
683
 
 
684
 
Any fees including holding/lifting charges requested by the Sellers’ Bank including intermediate bank(s),
685
 
shall be for Sellers’ account.
686
 
 
687
 
Any fees including holding/lifting charges requested by the Builders’ Bank including intermediate bank(s),
688
 
shall be for Builders’ account.
689
 
 
690
 
 
691
 23. Warranty of Quality
692
 
On the delivery of the Vessel under this Agreement, the Sellers undertake to assign to the Buyers all their
693
 
rights, interest and title under the relevant article of the Building Contract dealing with the Vessel’s so called
694
 
warranty of quality, such assignment being subject to the consent of the Construction Seller.
695
 
 
696
 24. Counterparts
697
 
This Agreement may be executed in any number of counterparts and any single counterpart or set of
698
 
counterparts signed, in either case, by all the parties hereto shall be deemed to constitute a full and original
699
 
agreement for all purposes.
700
 
 
701
 
 
T.A.C.K. SHIPPING, S.A.
 GUADELOUPE SHIPPING COMPANY INC.
 Signature (Buyers)
 Signature (Sellers)
  
  
 
/s/ Andreas Nikolaos Michalopoulos
 Name: Takayuki Hanada
 Name: Andreas Nikolaos Michalopoulos
 Title: Representative Director / Treasurer
 Title: Director / Attorney-in-fact
 Kowa Kaiun Co., Ltd.
 Performance Shipping Inc.
 Signature (Guarantor)
 Signature (Guarantor)
  
  
  
 /s/ Andreas Nikolaos Michalopoulos
 Name: Takayuki Hanada
 Name: Andreas Nikolaos Michalopoulos
 Title: Executive Director
 Title: Director / Chief Executive Officer
Copyright © 2012 Norwegian Shipbrokers’ Association.   All rights reserved. 
 

Exhibit 4.34
 
CHARTERER PERFORMANCE GUARANTEE
IN RESPECT OF THE BAREBOAT CHARTER PARTY (BARECON 2017)
DATED 05 March 2025
MV HULL H1597 tbn “P. MARSEILLE’’
 
05 March 2025
 
To: T.A.C.K. SHIPPING, S.A.
From: Performance Shipping Inc. (“Guarantor”)
Reference is made to Barecon 2017 Bareboat Charter Party and the rider clauses and annexures thereto, dated 05 March 2025 (as amended from time to time, hereinafter referred to
as the “Bareboat Charter Party”), between GUADELOUPE COMPANY INC. (hereinafter referred to as “Charterers”) and T.A.C.K. SHIPPING, S.A. (hereinafter referred to as
“Owners”).
 
1.
In consideration of the Owners entering into the Bareboat Charter Party with the Charterers, we, Performance Shipping Inc., a company organized and existing under the laws of the
Marshall Islands having our registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, The Marshall Islands MH 96960, and being the parent company of
the Charterers, irrevocably and unconditionally guarantee to the Owners and their successors, transferees and assigns the due and punctual performance of all present and future
obligations of the Charterers under the Bareboat Charter Party.
 
2.
If at any time, the Charterers default in the performance of any terms, provisions, conditions and obligations under the Bareboat Charter Party, we, Performance Shipping Inc. will as
primary obligor and not merely as a surety perform or cause to be performed each and every one of the terms, provisions, conditions and obligations of the Charterer under the
Bareboat Charter Party and will pay on demand any sum in connection with non-performance by the Charterers of any of the terms, provisions, conditions and obligations under the
Bareboat Charter Party that is not paid when it is due and payable.
 
3.
Any demand made by the Owners under this Performance Guarantee shall be made in writing signed by an authorized signatory of the Owners and shall specify the default of the
Charterers and shall be accompanied by a copy of the notice of such default served on the Charterers by the Owners together with a statement (if any) that the Charterers have failed
to remedy such default within any applicable grace period.
 
4.
The Owners may make more than one demand under this Performance Guarantee
 
5.
Our obligations under this Performance Guarantee shall not be affected by any act, omission, matter or thing, which, but for this paragraph would reduce, release or prejudice any of
our obligations under this Performance Guarantee (without limitation and whether or not known to it or to ourselves), including:
 
 
(a) any waiver, release or consent granted to, or composition with the Charterers or any other person;
 
(b) any incapacity or lack of power, authority or legal personality of or dissolution or change in the legal or beneficial ownership, the members or status of the Charterers or any
other person;
 
(c) any amendment or variation, however fundamental, to the terms and conditions of the Bareboat Charter Party;
 
- 1 -

(d) any unenforceability, illegality or invalidity of any obligation under the Bareboat Charter Party; or
 
(e) any insolvency, bankruptcy, reorganization, reconstruction, rehabilitation, liquidation or amalgamation of the Charterers, or appointment of any receiver, administrative receiver
or administrator of any of the Charterers’ assets, or any other similar proceedings.
 
We hereby waive (a) any right we may have of first requiring the Owners to take any action, obtain any judgment or enforce any other rights against the Charterers before claiming
from us under this Performance Guarantee, save that a demand must first be made against the Charterers and (b) to the extent permitted by law, all defences of a surety to which we
may be entitled by statute or otherwise, including, protest, presentment, demand for performance, notice of default or non-performance and notice of dishonour.
 
6.
All payments under this Performance Guarantee shall be made in full without set off or deduction. If any tax or other sum must be deducted from any amount payable by ourselves
under this Performance Guarantee, we shall pay such additional amounts as are necessary to ensure that the Owners receive a net amount equal to the full amount they would have
received before such deductions.
 
7.
The provisions of Clause 34 (Notices) of the Bareboat Charter Party shall apply (mutatis mutandis) to this Performance Guarantee as if it were set out in full with references to this
Performance Guarantee substituted for references to the Bareboat Charter Party and with references to us as Guarantor substituted for references to the Charterers.
 
8.
This Performance Guarantee shall be binding upon the undersigned, its successors and assignees and shall inure to the benefit of and be enforceable by the Owners, their
successors and assignees. We shall have no right to delegate nor assign any of the obligations or liabilities undertaken in this Performance Guarantee without the prior written
consent of the Owners.
 
9.
If, at any time, any provision of this Performance Guarantee is or becomes illegal, invalid or unenforceable in any respect under any law of any jurisdiction, neither the
legality, validity or enforceability of the remaining provisions of this Performance Guarantee under the law of that jurisdiction nor the legality, validity or enforceability of such
provision under the law of any other jurisdiction will in any way be affected or impaired.
 
10. This Performance Guarantee is intended to create legal relations between us.
 
11. We make the following representations and warranties:
 
(a) we are a corporation, duly incorporated or formed and validly existing under the laws of our jurisdiction of incorporation or formation;
 
(b) the obligations expressed to be assumed by us in this Performance Guarantee are, subject to any general principles of law or equity limiting our obligations which are applicable
to creditors generally, legal, valid, binding and enforceable obligations;
 
(c) the entry into and performance by us of this Performance Guarantee do not and will not:
 
(i)
conflict with any law or regulation applicable to us, our constitutional documents or any agreement or instrument binding upon us or any of our assets, subject to any
general principles of law limiting our obligations which are applicable to creditors generally; or
- 2 -

(ii)
constitute a default or termination event (however described) under any agreement or instrument binding on us or any of our assets which would have a material
adverse effect on our ability to perform our payment obligations under this Performance Guarantee; and
 
(d) subject to any general principles of law limiting our obligations which are applicable to creditors generally, all authorisations necessary for us to enter into and perform this
Performance Guarantee have been obtained and are in full force and effect.
 
12. Subject to the provisions of this Performance Guarantee, in no circumstances whatsoever shall our liability hereunder exceed the liability of the Charterers under the Bareboat
Charter Party.
 
13. This Performance Guarantee and any non-contractual obligations arising from or in connection with it shall be governed by and construed in accordance with English law.
14. Clause 33 (Bimco Dispute Resolution Clause 2017) of the Bareboat Charter Party shall apply to this Performance Guarantee as if it was expressly incorporated in this Performance
Guarantee with any necessary modifications.
- 3 -

Yours faithfully,
 
Performance Shipping Inc.
 
By:
/s/ Andreas Nikolaos Michalopoulos
 
Name: Andreas Nikolaos Michalopoulos 
Title: Director / Chief Executive Officer
 
By our execution of this Performance Guarantee we agree to the terms of this Performance Guarantee and to be bound by it.
 
Dated: 05 March 2025
 
Acknowledged and agreed by:
 
T.A.C.K. SHIPPING, S.A.
 
By:
/s/ Takayuki Hanada
Name: Takayuki Hanada
Title: Representative Director / Treasurer
 
Dated: 05 March 2025
- 4 -

Exhibit 4.35
OWNER PERFORMANCE GUARANTEE
IN RESPECT OF THE BAREBOAT CHARTER PARTY (BARECON 2017)
DATED 05 March 2025
MV HULL H1597 tbn “P. MARSEILLE”
05 March 2025
 
To: GUADELOUPE SHIPPING COMPANY INC.
From: Kowa Kaiun Co., Ltd. (“Guarantor”)
Reference is made to Barecon 2017 Bareboat Charter Party and the rider clauses and annexures thereto, dated 05 March 2025 (as amended from time to time, hereinafter referred to
as the “Bareboat Charter Party”), between GUADELOUPE SHIPPING COMPANY INC. (hereinafter referred to as “Charterers”) and T.A.C.K. SHIPPING, S.A. (hereinafter referred
to as “Owners”).
1.
In consideration of the Charterers entering into the Bareboat Charter Party with the Owners, we, Kowa Kaiun Co., Ltd. a company organized and existing under the laws of Japan
having our registered office at 470-1 Oaza Nagashima, Kaminoseki-cho, Kumage-gun, Yamaguchi, Japan and being the parent company of the Owners, hereby irrevocably and
unconditionally guarantee to the Charterers and their successors, transferees and assigns the due and punctual performance of all present and future obligations of the Owners
under the Bareboat Charter Party.
 
2.
If at any time, the Owners or any of them default in the performance of any terms, provisions, conditions and obligations under the Bareboat Charter Party, we Kowa Kaiun Co., Ltd.
will as primary obligor and not merely a surety perform or cause to be performed each and every one of the terms, provisions, conditions and obligations of the Owners or any of
them under the Bareboat Charter Party and will pay on demand any sum in connection with non-performance by the Owners or any of them of any of the terms, provisions,
conditions and obligations under the Bareboat Charter Party that is not paid when it is due and payable.
 
3.
Any demand made by the Charterers under this Performance Guarantee shall be made in writing signed by an authorized signatory of the Charterers and shall specify the default of
the Owners and shall be accompanied by a copy of the notice of such default served on the Owners by the Charterers together with a statement (if any) that the Owners have failed
to remedy such default within any applicable grace period.
 
4.
The Charterers may make more than one demand under this Performance Guarantee.
 
5.
Our obligations under this Performance Guarantee shall not be affected by any act, omission, matter or thing, which, but for this paragraph would reduce, release or prejudice any of
our obligations under this Performance Guarantee (without limitation and whether or not known to it or to ourselves), including:
 
(a) any waiver, release or consent granted to, or composition with the Owners or any of them or any other person;
 
(b) any incapacity or lack of power, authority or legal personality of or dissolution or change in the legal or beneficial ownership, the members or status of the Owners or any of
them or any other person;
 
(c) any amendment or variation, however fundamental, to the terms and conditions of the Bareboat Charter Party;
- 1 -

(d) any unenforceability, illegality or invalidity of any obligation under the Bareboat Charter Party; or
 
(e) any insolvency, bankruptcy, reorganization, reconstruction, rehabilitation, liquidation or amalgamation of the Owners or any of them, or appointment of any receiver,
administrative receiver or administrator of any of the Owners’ assets, or any other similar proceedings.
 
We hereby waive (a) any right we may have of first requiring the Charterers to take any action, obtain any judgment or enforce any other rights against the Owners before claiming from
us under this Performance Guarantee, save that a demand must first be made against the Owners and (b) to the extent permitted by law, all defences of a surety to which we may be
entitled by statute or otherwise, including, protest, presentment, demand for performance, notice of default or non-performance and notice of dishonour.
 
6.
All payments under this Performance Guarantee shall be made in full without set off or deduction. If any tax or other sum must be deducted from any amount payable by ourselves
under this Performance Guarantee, we shall pay such additional amounts as are necessary to ensure that the Charterers receive a net amount equal to the full amount they would
have received before such deductions.
 
7.
The provisions of Clause 34 (Notices) of the Bareboat Charter Party shall apply (mutatis mutandis) to this Performance Guarantee as if it were set out in full with references to this
Performance Guarantee substituted for references to the Bareboat Charter Party and with references to us as Guarantor substituted for references to the Owners.
 
8.
This Performance Guarantee shall be binding upon the undersigned, its successors and assignees and shall inure to the benefit of and be enforceable by the Charterers, their
successors and assignees. We shall have no right to delegate nor assign any of the obligations or liabilities undertaken in this Performance Guarantee without the prior written
consent of the Charterers.
9.
If, at any time, any provision of this Performance Guarantee is or becomes illegal, invalid or unenforceable in any respect under any law of any jurisdiction, neither the legality,
validity or enforceability of the remaining provisions of this Performance Guarantee under the law of that jurisdiction nor the legality, validity or enforceability of such provision
under the law of any other jurisdiction will in any way be affected or impaired.
 
10. This Performance Guarantee is intended to create legal relations between us.
 
11. We make the following representations and warranties:
 
(a) we are a corporation, duly incorporated or formed and validly existing under the laws of our jurisdiction of incorporation or formation;
 
(b) the obligations expressed to be assumed by us in this Performance Guarantee are, subject to any general principles of law or equity limiting our obligations which are applicable
to creditors generally, legal, valid, binding and enforceable obligations;
 
(c) the entry into and performance by us of this Performance Guarantee do not and will not:
 
 
(i)
conflict with any law or regulation applicable to us, our constitutional documents or any agreement or instrument binding upon us or any of our assets, subject to any
general principles of law limiting our obligations which are applicable to creditors generally; or
- 2 -

(ii) constitute a default or termination event (however described) under any agreement or instrument binding on us or any of our assets which would have a material adverse
effect on our ability to perform our payment obligations under this Performance Guarantee; and
 
(d) subject to any general principles of law limiting our obligations which are applicable to creditors generally, all authorisations necessary for us to enter into and perform this
Performance Guarantee have been obtained and are in full force and effect.
12. Subject to the provisions of this Performance Guarantee, in no circumstances whatsoever shall our liability hereunder exceed the liability of the Owners under the Bareboat Charter
Party.
13. This Performance Guarantee and any non-contractual obligations arising from or in connection with it shall be governed by, and construed in accordance with, English law.
 
14. Clause 33 (Bimco Dispute Resolution Clause 2017) of the Bareboat Charter Party shall apply to this Performance Guarantee as if it was expressly incorporated in this Performance
Guarantee with any necessary modifications.
- 3 -

Yours faithfully,
 
Kowa Kaiun Co., Ltd.
By: /s/ Takayuki Hanada
 
Name: Takayuki Hanada
Title: Executive Director
 
 
By our execution of this Performance Guarantee we agree to the terms of this Performance Guarantee and to be bound by it.
Dated: 05 March 2025
Acknowledged and agreed by:
GUADELOUPE SHIPPING COMPANY INC.
By: /s/ Andreas Nikolaos Michalopoulos
Name: Andreas Nikolaos Michalopoulos 
Title: Director/ Attorney-in-fact  
 
Dated: 05 March 2025
- 4 -

Exhibit 4.36
SALEFORM 2012
MEMORANDUM OF AGREEMENT
Norwegian Shipbrokers’ Association’s
Memorandum of Agreement for sale and purchase of ships
PART I
1
Dated: MOA Effective Date
 
 
2
MALOELAP SHIPPING COMPANY INC. of the Republic of the Marshall Islands (Name of sellers), hereinafter
 
called the “Sellers”, have agreed to sell, and
 
 
3
MTC ENGINEERING SDN BHD. of Malaysia (Name of buyers), hereinafter called the “Buyers”, have agreed to
 
buy:
 
 
4
Name of vessel: P. SOPHIA
 
 
5
IMO Number: 9414034
 
 
6
Classification Society: American Bureau of Shipping
 
 
7
Class Notation: (+)[A1], Oil Carrier, ESP, (E), (+)[AMS], (+)[ACCU], CSR, AB-CM, RW, VEC-L, BWT, GP, RES, TCM, CRC
 
Service Restriction: Unrestricted Service.
 
8
Year of Build: 2009 Builder/Yard: Hyundai Heavy Industries Co Ltd, South Korea
 
 
9
Flag: Marshall Islands Place of Registration: Majuro GT/NT: 57,017.00 / 32,411.00
 
 
10
hereinafter called the “Vessel”, on the following terms and conditions:
 
 
11
Definitions.
 
 
12
“Banking Days” are days on which banks are open both in the country of
13
the currency stipulated for the Purchase Price in Clause 1 (Purchase Price) and in the place of closing stipulated in Clause 8
14
(Documentation) and Malaysia, Singapore, Greece and Marshall Islands (add additional jurisdictions as
appropriate).
 
 
15
“Buyers’ Nominated Flag State” means Panama, Liberia, Bahamas, Bermuda, Marshall Islands, Malaysia or
Singapore in Buyers’ option (state flag state).
 
 
“Exclusivity Agreement” means the exclusivity agreement regarding the Vessel dated 17th February 2025 made
 
between the Parties.
 
 
“MOA Effective Date” as defined in the Exclusivity Agreement.
 
 
“Expiry Date” as defined in the Exclusivity Agreement.
 
 
“Oil Company” as defined in the Exclusivity Agreement.
 
 
16
“Class” means the class notation referred to above.
 
 
17
“Classification Society” means the Society referred to above.
 
 
18
“Deposit” shall have the meaning given in Clause 2 (Deposit)
 
 
19
“Deposit Holder” means HFW, Singapore (state name and location of Deposit Holder), or, if left blank, the 
20
Sellers’ Bank, which shall hold and release the Deposit, the balance of the Purchase Price plus an estimated
 
amount for payment of bunkers and lubricating oil/greases and any other charges and money and sums
 
whatsoever payable on delivery by the Buyers in accordance with this Agreement.
 
 
“Deposit Holder’s Account” means the account indicated in the Escrow Agreement held with the Deposit Holder’s Bank.
Copyright © 2012 Norwegian Shipbrokers’ Association. All rights reserved. Published by BIMCO. No part of this BIMCO SmartCon document may be copied, reproduced or distributed in any form without the
prior written permission of the Norwegian Shipbrokers’ Association. Explanatory notes are available from BIMCO at www.bimco.org. Adopted by BIMCO in 1956, revised 1966, 1983, 1986/87, 1993 and 2012.

Bank.
“Deposit Holder’s Bank” means the bank indicated in the Escrow Agreement.
“Escrow Agreement” means the escrow agreement in respect of the Deposit and the Balance Payment entered
into after signing of this Agreement amongst the Sellers, the Buyers and the Deposit Holder.
21
“In writing” or “written” means a letter handed over from the Sellers to the Buyers or vice versa, a
22
registered letter, e-mail or telefax.
23
“Parties” means the Sellers and the Buyers.
24
“Purchase Price” means the price for the Vessel as stated in Clause 1 (Purchase Price).
25
“Sellers’ Account” means an account in the name of the Sellers (state details of bank account) at the Sellers’
Bank.
26
“Sellers’ Bank” means (state name of bank, branch and details) or, if left blank, the bank
27
notified by the Sellers to the Buyers and the Deposit Holder for receipt of the Deposit, the balance of the
Purchase Price and any money and sums whatsoever payable on delivery by the Buyers.
28
1.
Purchase Price
29
The Purchase Price is USD 36,050,000 (United States Dollars Thirty Six Million Fifty Thousand only). (state
currency and amount both in words and figures). If the Vessel is delivered to the Buyers on or before 30
September 2025, then the Purchase Price to be USD 37,050,000 (United States Dollars Thirty Seven Million Fifty
Thousand only).
30
2.
Deposit
31
As security for the correct fulfilment of this Agreement the Buyers shall lodge a deposit of
32
% (ten per cent) or, if left blank, 10% (ten per cent) of the Purchase Price (the
33
“Deposit”) in an interest bearing account for the Parties with the Deposit Holder within three (3)
34
Banking Days after the date that:
35
(i) The MOA Effective Date this Agreement has been signed by the Parties and exchanged in original or by
36
e-mail or telefax; and
(ii) the Escrow Agreement between the Parties and the Deposit Holder has been entered into, is fully executed
and exchanged in original or by e-mail; and
37
(iii) the Deposit Holder has confirmed in writing to the Parties that the account has been
38
fully opened and is ready. to receive funds.
39
The Deposit shall be released in accordance with joint written instructions of the Parties
40
Interest, if any, shall be credited to the Buyers. Any fee charged for holding and releasing the
41
Deposit shall be borne equally by the Parties. The Parties shall provide to the Deposit Holder
42
all necessary documentation to open and maintain the account without delay (including but not limited to KYC
 
requirements).
43
3.
Payment
44
On delivery of the Vessel, but not later than three (3) Banking Days after the date that Notice of
45
Readiness has been given in accordance with Clause 5 (Time and place of delivery and
46
notices):
47
the Deposit shall be released to the Sellers as per the Escrow Agreement in immediately available funds, net,
free of any bank charges; and
48
(ii) the balance of the Purchase Price (the “Balance Money”) and all other sums payable on delivery by the Buyers
Copyright © 2012 Norwegian Shipbrokers’ Association. All rights reserved. Published by BIMCO. No part of this BIMCO SmartCon document may be copied, reproduced or distributed in any form without the
prior written permission of the Norwegian Shipbrokers’ Association. Explanatory notes are available from BIMCO at www.bimco.org. Adopted by BIMCO in 1956, revised 1966, 1983, 1986/87, 1993 and 2012.

49
to the Sellers under this Agreement held in the Deposit Holder’s Account shall be paid released in full free in
immediately available funds, net, of bank charges to the
50
Sellers’ Account, in accordance with the terms of this Agreement and the Escrow Agreement.
The Buyers shall remit the Balance Money including the value of the estimated bunker and lubricating oils
remaining on board at the time of delivery and any other charges and money whatsoever (the “Agreed Extra” and
together with the Balance Money shall constitute the “Balance Payment”) to be paid by the Buyers to the Sellers 
in accordance with this Agreement and the Escrow Agreement by telegraphic transfer to the Deposit Holder’s
Account held with the Deposit Holder at least two (2) Banking Days prior to the intended date of delivery of the
Vessel as per the 3 days approximate Notice of Readiness (see Clause 5b). The Balance Payment shall remain to
the order of the Buyers and will be released in accordance with the terms of this Agreement and the Escrow
Agreement.
The Deposit and the Balance Payment shall be irrevocably and unconditionally released to the Sellers’ account in
accordance with the terms of this Agreement and the Escrow Agreement against the Seller’s presentation and
handing over to the Deposit Holder of:
(a) Protocol of Delivery and Acceptance executed but not timed, by both Sellers and Buyers authorized
representatives; and
(b) duly executed written irrevocable instructions of the Buyers’ authorized representatives to proceed to their
release.
Any surplus money after the release of the Deposit and the Balance Payment shall be remitted back to the Buyers 
in accordance with the provisions of the Escrow Agreement.
In exchange of the delivery documents as agreed in the Addendum No. 1 and as per Clause 8 of this Agreement,
and upon:
1. Execution and submission to the Deposit Holder of the duly executed irrevocable and unconditional release
instructions for the Deposit and the Balance Payment; and
2. Confirmation from the Deposit Holder that the Deposit and Balance Payment has been remitted to the Sellers
Account accompanied by the SWIFT copy (or copies, as the case may be) issued by the Deposit Holder’s Bank
concerning the payment of the Deposit and the Balance Payment,
the Protocol of Delivery and Acceptance will be timed and dated and the Vessel will immediately be legally and
physically delivered to the Buyers; relevant procedure to be described in a closing memo which to be agreed by
the Sellers, the Buyers and the Deposit Holder not later than five (5) Banking Days prior to the intended date of
delivery of the Vessel. Notice of Readiness can be serviced anytime, including non-Banking Days.
The Deposit Holder’s fee for holding and releasing the Deposit and the Balance Payment according to this
agreement and the Escrow Agreement shall be equally shared between the Sellers and the Buyers.
51
4.
Inspection
52
(a)* The Buyers have inspected and accepted the Vessel’s classification records. The Buyers 
53
have will also inspected the Vessel at/in Porto Rosales, Argentina (state place) on around 15-20th February
2025 (state date) by hiring an independent marine surveyor and will have to confirm
54
acceptanceed of the Vessel following this inspection no later than 2 Banking Days after issuance of the inspection
report by the independent marine surveyor following such confirmation by the Buyers and the sale is outright
and definite, subject only
55
to the terms and conditions of this Agreement.
56
(b)* The Buyers shall have the right to inspect the Vessel’s classification records and declare
Copyright © 2012 Norwegian Shipbrokers’ Association. All rights reserved. Published by BIMCO. No part of this BIMCO SmartCon document may be copied, reproduced or distributed in any form without the
prior written permission of the Norwegian Shipbrokers’ Association. Explanatory notes are available from BIMCO at www.bimco.org. Adopted by BIMCO in 1956, revised 1966, 1983, 1986/87, 1993 and 2012.

57
whether same are accepted or not within (state date/period).
58
The Sellers shall make the Vessel available for inspection at/in (state place/range) within
59
(state date/period).
60
The Buyers shall undertake the inspection without undue delay to the Vessel. Should the
61
Buyers cause undue delay they shall compensate the Sellers for the losses thereby incurred.
62
The Buyers shall inspect the Vessel without opening up and without cost to the Sellers.
63
During the inspection, the Vessel’s deck and engine log books shall be made available for
64
examination by the Buyers.
65
The sale shall become outright and definite, subject only to the terms and conditions of this
66
Agreement, provided that the Sellers receive written notice of acceptance of the Vessel from
67
the Buyers within seventy-two (72) hours after completion of such inspection or after the
68
date/last day of the period stated in Line 59, whichever is earlier
69
Should the Buyers fail to undertake the inspection as scheduled and/or notice of acceptance of
70
the Vessel’s classification records and/or of the Vessel not be received by the Sellers as
71
aforesaid, the Deposit together with interest earned, if any, shall be released immediately to the
72
Buyers, whereafter this Agreement shall be null and void.
73
*4(a) and 4(b) are alternatives; delete whichever is not applicable. In the absence of deletions,
74
alternative 4(a) shall apply.
75
5.
Time and place of delivery and notices
76
(a) The Vessel shall be delivered and taken over safely afloat at a safe and accessible berth or
77
anchorage at/in Singapore (OPL excepted) or Johor, Malaysia (OPL EXCEPTED) (state place/range) in the Sellers’
option.
78
Notice of Readiness shall not be tendered before: 10 calendar days after the MOA Effective Date (date)
79
Cancelling Date (see Clauses 5(c), 6 (a)(i), 6 (a)(iii) and 14): 120 (hundred twenty) days after the MOA Effective
Date.
80
(b) The Sellers shall keep the Buyers well informed of the Vessel’s itinerary and shall
81
provide the Buyers with twenty (20), ten (10), five (5) and three (3) days’  approximate notice  and one (1) day
definite notice of the date the
82
Sellers intend to tender Notice of Readiness and of the intended place of delivery.
83
When the Vessel is at the place of delivery and physically ready for delivery in accordance with
84
this Agreement, the Sellers shall give the Buyers a written Notice of Readiness for delivery. The Buyers shall take
over the Vessel latest within three (3) Banking Days from the day of receipt of such Notice of Readiness.
 
 
85
(c) If the Sellers anticipate that, notwithstanding the exercise of due diligence by them, the
86
Vessel will not be ready for delivery by the Cancelling Date they may notify the Buyers in writing
87
stating the date when they anticipate that the Vessel will be ready for delivery and proposing a
88
new Cancelling Date. Upon receipt of such notification the Buyers shall have the option of
89
either cancelling this Agreement in accordance with Clause 14 (Sellers’ Default) within three (3)
90
Banking Days of receipt of the notice or of accepting the new date as the new Cancelling Date.
91
If the Buyers have not declared their option within three (3) Banking Days of receipt of the
92
Sellers’ notification or if the Buyers accept the new date, the date proposed in the Sellers’
93
notification shall be deemed to be the new Cancelling Date and shall be substituted for the
94
Cancelling Date stipulated in line 79.
95
If this Agreement is maintained with the new Cancelling Date all other terms and conditions
96
hereof including those contained in Clauses 5(b) and 5(d) shall remain unaltered and in full
97
force and effect.
98
(d) Cancellation, failure to correct or acceptance of the new Cancelling Date shall be entirely
Copyright © 2012 Norwegian Shipbrokers’ Association. All rights reserved. Published by BIMCO. No part of this BIMCO SmartCon document may be copied, reproduced or distributed in any form without the
prior written permission of the Norwegian Shipbrokers’ Association. Explanatory notes are available from BIMCO at www.bimco.org. Adopted by BIMCO in 1956, revised 1966, 1983, 1986/87, 1993 and 2012.

99
without prejudice to any claim for direct costs and damages the Buyers may have under Clause 14 (Sellers’
100
Default) for the Vessel not being ready by the original Cancelling Date.
101
(e) Should the Vessel become an actual, constructive or compromised total loss before delivery
102
the Deposit together with interest earned, if any, shall be released immediately to the Buyers
103
whereafter this Agreement shall be null and void.
104
6.
Divers Inspection / Drydocking
105
(a)*
106
(i) The Buyers shall have the option at their cost and expense to request Sellers to arrange for an underwater
107
inspection by a diver approved by the Classification Society prior to the delivery of the
108
Vessel. Such option shall be declared latest nine (9) days prior to the Vessel’s intended
109
date of readiness for delivery as notified by the Sellers pursuant to Clause 5(b) of this
110
Agreement. The Sellers shall at their cost and expense make the Vessel available for
111
such inspection. This inspection shall be carried out without undue, and in any case latest within 24 hours after
notification by the Sellers that the Vessel has arrived at the delivery port and is available for an underwater
inspection, delay and in the
112
presence of a Classification Society surveyor arranged for by the Sellers and paid for by
113
the Buyers. The Buyers’ representative(s) shall have the right to be present at the diver’s
114
inspection as observer(s) only without interfering with the work or decisions of the
115
Classification Society surveyor. The extent of the inspection and the conditions under
116
which it is performed shall be to the satisfaction of the Classification Society. If the
117
conditions at the place of delivery are unsuitable for such inspection, the Sellers shall at
118
their cost and expense make the Vessel available at a suitable alternative place near to
119
the delivery port, in which event the Cancelling Date shall be extended by the additional
120
time required for such positioning and the subsequent re-positioning. The Sellers may
121
not tender Notice of Readiness prior to completion of the underwater inspection.
122
(ii) If the rudder, propeller, bottom or other underwater parts below the deepest load line are
123
found broken, damaged or defective so as to affect the Vessel’s class, then (1) unless
124
repairs can be carried out afloat to the satisfaction of the Classification Society, the
125
Sellers shall arrange for the Vessel to be drydocked at their expense for inspection by
126
the Classification Society of the Vessel’s underwater parts below the deepest load line,
127
the extent of the inspection being in accordance with the Classification Society’s rules (2)
128
such defects shall be made good by the Sellers at their cost and expense to the
129
satisfaction of the Classification Society without condition/recommendation** and (3) the
130
Sellers shall pay for the underwater inspection and the Classification Society’s
131
attendance.
132
Notwithstanding anything to the contrary in  this Agreement, if the Classification Society
133
do not require the aforementioned defects to be rectified before the next class
134
drydocking survey, the Sellers shall be entitled to deliver the Vessel with these defects
135
against a deduction from the Purchase Price of the estimated direct cost (of labour and
136
materials) of carrying out the repairs to the satisfaction of the Classification Society,
137
whereafter the Buyers shall have no further rights whatsoever in respect of the defects
138
and/or repairs. The estimated direct cost of the repairs shall be the average of quotes
139
for the repair work obtained from two reputable independent shipyards with capably of drydocking and repairing
a vessel of this type or in the
140
vicinity of the port of delivery, one to be obtained by each of the Parties within two (2)
141
Banking Days from the date of the imposition of the condition/recommendation, unless
142
the Parties agree otherwise. Should either of the Parties fail to obtain such a quote within
143
the stipulated time then the quote duly obtained by the other Party shall be the sole basis
144
for the estimation of the direct repair costs. The Sellers may not tender Notice of
145
Readiness prior to such estimate having been established.
146
(iii) If the Vessel is to be drydocked pursuant to Clause 6(a)(ii) and no suitable dry docking
Copyright © 2012 Norwegian Shipbrokers’ Association. All rights reserved. Published by BIMCO. No part of this BIMCO SmartCon document may be copied, reproduced or distributed in any form without the
prior written permission of the Norwegian Shipbrokers’ Association. Explanatory notes are available from BIMCO at www.bimco.org. Adopted by BIMCO in 1956, revised 1966, 1983, 1986/87, 1993 and 2012.

147
facilities are available at the port of delivery, the Sellers shall take the Vessel to a port
148
where suitable drydocking facilities are available, whether within or outside the delivery
149
range as per Clause 5(a). Once drydocking has taken place the Sellers shall deliver the
150
Vessel at a port within the delivery range as per Clause 5(a). With this in mind, for the purpose
151
of this Clause, become the new port of delivery. In such event the Cancelling Date shall
152
be extended by the additional time required for the drydocking and extra steaming, but
153
limited to a maximum of fourteen (14) days.
154
(b)* The Sellers shall place the Vessel in drydock at the port of delivery for inspection by the
155
Classification Society of the Vessels’ underwater parts below the deepest load line, the extent
156
of the inspection being in accordance with the Classification Society’s rules. If the rudder,
157
propeller, bottom or other underwater parts below the deepest load line are found broken,
158
damaged or defective so as to affect the Vessel’s class, such defects shall be made good at the
159
Sellers’ cost and expense to the satisfaction of the Classification Society without
160
condition/recommendation**. In such event the Sellers are also to pay for the costs and
161
expenses in connection with putting the Vessel in and taking her out of drydock, including the
162
drydock dues and the Classification Society’s fees. The Sellers shall also pay for these costs
163
and expenses if parts of the tailshaft system are condemned or found defective or broken so as
164
to affect the Vessel’s class. In all other cases, the Buyers shall pay the aforesaid costs and
165
expenses, dues and fees.
166
(c) If the Vessel is drydocked pursuant to Clause 6 (a)(ii) or 6 (b) above:
167
(i) The Classification Society may require survey of the tailshaft system, the extent of the
168
survey being to the satisfaction of the Classification Society. If such survey is
169
not required by the Classification Society, the Buyers shall have the option to require the
170
tailshaft to be drawn and surveyed by the Classification Society, the extent of the survey
171
being in accordance with the Classification Society’s rules for tailshaft survey and
172
consistent with the current stage of the Vessel’s survey cycle. The Buyers shall declare
173
whether they require the tailshaft to be drawn and surveyed not later than by the
174
completion of the inspection by the Classification Society. The drawing and refitting of
175
the tailshaft shall be arranged by the Sellers. Should any parts of the tailshaft system be
176
condemned or found defective so as to affect the Vessel’s class, those parts shall be
177
renewed or made good at the Sellers’ cost and expense to the satisfaction of
178
Classification Society without condition/recommendation**.
 
179
(ii) The costs and expenses relating to the survey of the tailshaft system shall be borne by
180
the Buyers unless the Classification Society requires such survey to be carried out or if
181
parts to the system are condemned or found defective or broken so as to affect the
182
Vessel’s class, in which case the Sellers shall pay these costs and expenses.
 
183
(iii) The Buyers’ representative(s) shall have the right to be present in the drydock, as
184
observer(s) only without interfering with the work or decisions of the Classification
185
Society surveyor.
 
186
(iv) The Buyers shall have the right to have the underwater parts of the Vessel cleaned
187
and painted at their risk, cost and expense without interfering with the Sellers’ or the
188
Classification Society surveyor’s work, if any, and without affecting the Vessel’s timely
189
delivery. If, however, the Buyers’ work in drydock is still in progress when the
190
Sellers have completed the work which the Sellers are requires to do, the additional
191
docking time needed to complete the Buyers’ work shall be for the Buyers’ risk, cost and
192
expense. In the event that the Buyers’ work requires such additional time, the Sellers
193
may upon completion of the Sellers’ work tender Notice of Readiness for delivery whilst
194
the Vessel is still in drydock and, notwithstanding Clause 5(a), the Buyers shall be
195
obliged to take delivery in accordance with Clause 3 (Payment), whether the Vessel is in
196
drydock or not.
 
197
*6 (a) and 6 (b) are alternatives; delete whichever is not applicable. In the absence of deletions,
Copyright © 2012 Norwegian Shipbrokers’ Association. All rights reserved. Published by BIMCO. No part of this BIMCO SmartCon document may be copied, reproduced or distributed in any form without the
prior written permission of the Norwegian Shipbrokers’ Association. Explanatory notes are available from BIMCO at www.bimco.org. Adopted by BIMCO in 1956, revised 1966, 1983, 1986/87, 1993 and 2012.

198
alternative 6 (a) shall apply.
199
**Notes or memoranda, if any, in the surveyor’s report which are accepted by the Classification
200
Society without condition/recommendation are not to be taken into account.
201
7.
Spares, bunkers and other items
202
The Sellers shall deliver the Vessel to the Buyers with everything belonging to her on board
203
and on shore. All spare parts and spare equipment including spare tail-end shaft(s) and/or
204
spare propeller(s)/propeller blade(s), if any, belonging to the Vessel at the time of inspection
205
used or unused, whether on board or not shall become the Buyers’ property, but spares on
206
order are excluded. Forwarding charges, if any, shall be for the Buyers’ account. The Sellers
207
are not required to replace spare parts including spare tail-end shaft(s) and spare
208
propeller(s)/propeller blade(s) which are taken out of spare and used as replacement prior to
209
delivery, but the replaced items shall be the property of the Buyers. Unused stores and
210
provisions shall be included in the sale and be taken over by the Buyers without extra payment.
 
211
Library and forms exclusively for use in the Sellers’ vessel(s) and captain’s, officers’ and crew’s
212
personal belongings including the slop chest are excluded from the sale without compensation,
213
as well as the following additional items: A list to be provided and incorporated into the Agreement by way of
 
an Addendum To be attached (include list)
 
214
Items on board which are on hire or owned by third parties, listed as follows, are excluded from
215
the sale without compensation: A list to be provided and incorporated into the Agreement by way of an
 
Addendum (include list)
 
216
Items on board at the time of inspection which are on hire or owned by third parties, not listed
217
above, shall be replaced or procured by the Sellers prior to delivery at their cost and expense.
218
The Buyers shall take over remaining bunkers and unused lubricating and hydraulic oils and
219
greases in storage tanks and unopened drums and pay either:
 
220
(a) *the actual net price basis FIFO calculation (excluding barging expenses) as evidenced by latest actual invoices 
 
or vouchers or at Sellers’/time charterers’/pool’s last net purchase prices; or
 
221
(b) The current market price (excluding barging expenses) at the port and date of delivery
222
of the Vessel or, if unavailable, at the nearest bunkering port
 
223
for the quantities taken over.
 
The quantities of bunkers and unused lubricating oils/hydraulic oil/greases remaining on board shall be measured
 
and established by a joint survey of the Seller’s Chief Engineer (acting as Sellers’ representative) and the Buyer’s
 
familiarization crew on board (acting as Buyers’ representative on board) two (2) days prior to the expected date
 
of delivery. Agreed allowance for consumption for the period between the joint survey and the time of physical
 
delivery will be subtracted from the figures found during the said survey.
 
224
Payment under this Clause shall be made at the same time and place and in the same
225
currency as the Purchase Price.
 
226
“inspection” in this Clause 7, shall mean the Buyers’ inspection according to Clause 4(a) or 4(b)
227
(Inspection), if applicable. If the Vessel is taken over without inspection, the date of this
228
Agreement shall be the relevant date.
 
229
*(a) and (b) are alternatives, delete whichever is not applicable. In the absence of deletions
230
alternative (a) shall apply.
 
231
8.
Documentation.
232
The place of closing: Deposit holder’s premises or virtually. And all the original documents to be couriered to
 
the Buyers / Sellers.
 
233
(a) In exchange for payment of the Purchase Price and all other sums payable on delivery by the Buyers to the
 
Sellers under this Agreement the Sellers shall provide the Buyers with the documents reasonably required for the
Copyright © 2012 Norwegian Shipbrokers’ Association. All rights reserved. Published by BIMCO. No part of this BIMCO SmartCon document may be copied, reproduced or distributed in any form without the
prior written permission of the Norwegian Shipbrokers’ Association. Explanatory notes are available from BIMCO at www.bimco.org. Adopted by BIMCO in 1956, revised 1966, 1983, 1986/87, 1993 and 2012.

 
deletion and registration of the Vessel, and the Buyers shall provide the Sellers with all documents (indicatively
 
corporate, shareholding etc.) evidencing Buyers’ lawful actions to authorise the execution, delivery and
 
performance of this Agreement. These documents to be mutually agreed between Buyers and Sellers as
 
promptly as possible and to form an Addendum to this Agreement, but the agreement and execution of such
 
Addendum and any disputes thereof shall not prejudice this agreement nor shall delay the lodging of the
 
Deposit. Should the Parties fail to agree such Addendum, the below Clause 8 will be reinstated and apply. In
 
exchange for payment of the Purchase Price the Sellers shall provide the Buyers with the
234
following delivery documents:
 
235
(i) Legal Bill(s) of Sale in a form recordable in the Buyers’ Nominated Flag State,
236
transferring title of the Vessel and stating that the Vessel is free from all mortgages,
237
encumbrances and maritime liens or any other debts whatsoever, duly notarially attested
238
and legalised or apostilled, as required by the Buyers’ Nominated Flag State;
 
239
(ii) Evidence that all necessary corporate, shareholder and other action has been taken by
240
the Sellers to authorise the execution, delivery and performance of this Agreement;
 
241
(iii) Power of Attorney of the Sellers appointing one or more representatives to act on behalf
242
of the Sellers in the performance of this Agreement, duly notarially attested and legalised
243
or apostilled (as appropriate);
 
244
(iv) Certificate or Transcript of Registry issued by the competent authorities of the flag state
245
on the date of delivery evidencing the Sellers’ ownership of the Vessel and that the
246
Vessel is free from registered encumbrances and mortgages, to be faxed or e-mailed by
247
such authority to the closing meeting with the original to be sent to the Buyers as soon as
248
possible after delivery of the Vessel;
 
249
(v) Declaration of Class or (depending on the Classification Society) a Class Maintenance
250
Certificate issued within three (3) Banking Days prior to delivery confirming that the
251
Vessel is in Class free of condition/recommendation;
 
252
(vi) Certificate of Deletion of the Vessel from the Vessel’s registry or other official evidence of
253
deletion appropriate to the Vessel’s registry at the time of delivery, or, in the event that
254
the registry does not as a matter of practice issue such documentation immediately, a
255
written undertaking by the Sellers to effect deletion from the Vessel’s registry forthwith
256
and provide a certificate or other official evidence of deletion to the Buyers promptly and
257
latest within four (4) weeks after the Purchase Price has been paid and the Vessel has
258
been delivered;
 
259
(vii) A copy of the Vessel’s Continuous Synopsis Record certifying the date on which the
260
Vessel ceased to be registered with the Vessel’s registry, or, in the event that the registry
261
does not as a matter of practice issue such certificate immediately, a written undertaking
262
by the Sellers to provide the original of this certificate promptly upon it being issued
263
together with evidence of submission by the Sellers of a duly executed Form 2 stating
264
the date on which the Vessel shall cease to be registered with the Vessel’s registry;
 
265
(viii) Commercial Invoice for the Vessel;
 
266
(ix) Commercial Invoice(s) for bunkers, lubricating and hydraulic oils and greases;
 
267
(x) A copy of the Sellers’ letter to their satellite communication provider cancelling the
268
Vessel’s communications contract which is to be sent immediately after delivery of the
269
Vessel;
 
270
(xi) Any additional delivery documents as may reasonably be required by the competent authorities of
271
the Buyers’ Nominated Flag State for the purpose of registering the Vessel, provided the
272
Buyers notify the Sellers of any such documents as soon as possible after the date of
273
this Agreement. The list of documents to be furnished by each of the Parties to be mutually agreed within two
 
(2) weeks of the date of this Agreement and the said list to be incorporated into the Agreement by way of an
Copyright © 2012 Norwegian Shipbrokers’ Association. All rights reserved. Published by BIMCO. No part of this BIMCO SmartCon document may be copied, reproduced or distributed in any form without the
prior written permission of the Norwegian Shipbrokers’ Association. Explanatory notes are available from BIMCO at www.bimco.org. Adopted by BIMCO in 1956, revised 1966, 1983, 1986/87, 1993 and 2012.

 
Addendum. If the Parties cannot agree on documentation within two (2) weeks of the date of this Agreement,
 
the wording in item (i) – (x) shall be reinstated and apply.; and
 
274
(xii) The Sellers’ letter of confirmation that to the best of their knowledge, the Vessel is not
275
black listed by any nation or international organisation; and
 
 
(xiii) A letter on Sellers’ letterhead warranting that to the best of their knowledge the Vessel has not been
 
involved in a grounding affecting vessel’s class, serious casualty or collision incident since her last drydock. Such
 
undertaking to be provided by the Sellers only in case the Vessel is delivered without Underwater Inspection A
 
letter on Sellers’ letterhead warranting that to the best of their knowledge the Vessel has not been involved in a
 
grounding, serious casualty or collision incident since built.
 
276
(b) At the time of delivery the Buyers shall provide the Sellers with:
 
277
(i) Evidence that all necessary corporate, shareholder and other action has been taken by
278
the Buyers to authorise the execution, delivery and performance of this Agreement; and
 
279
(ii) Power of Attorney of the Buyers appointing one or more representatives to act on behalf
280
of the Buyers in the performance of this Agreement, duly notarially attested and legalised
281
or apostilled (as appropriate).
 
282
(c) If any of the documents listed in the Addendum Sub clauses (a) and (b) above are not in the English
283
language they shall be accompanied by an English translation by an authorised translator or
284
certified by a lawyer qualified to practice in the country of the translated language.
 
285
(d) The Parties shall to the extent possible exchange copies, drafts or samples of the
286
documents listed in the Addendum Sub clause (a) and Sub clause (b) above for review and comment by the
287
other party, without undue delay, not later than (state number of days), or if left blank, nine (9) days prior to the
288
Vessel’s intended date of readiness for delivery as notified by the Sellers pursuant to
289
Clause 5(b) of this Agreement.
 
290
(e) Concurrent with the exchange of documents in the Addendum Sub clause (a) and Sub clause (b) above,
291
the Sellers shall also hand to the Buyers the classification certificate(s) as well as all plans,
292
drawings and manuals, (excluding ISM/ISPS manuals, Vessel Response Plan for OPA 90 and SOPEP), which are on
 
board the Vessel. Other
293
certificates which are on board the Vessel shall also be handed over to the Buyers unless
294
the Sellers are required to retain same, in which case the Buyers have the right to take copies.
 
295
(f) Other technical documentation which may be in the Sellers’ possession shall promptly after
296
delivery be forwarded to the Buyers at their expense, if they so request. The Sellers may keep
297
the Vessel’s log books but the Buyers have the right to take copies of same up to six (6) months back counting as
 
from the date the Sellers render Notice of Readiness with all relevant personal data protected by EU GDPR
 
regulation erased. The Buyers undertake that the copies of the log books are solely for their internal reference
 
and shall not be shared with any external person or entity.
 
298
(g) The Parties shall sign and deliver to each other a Protocol of Delivery and Acceptance
299
confirming the date and time of delivery of the Vessel from the Sellers to the Buyers.
 
300
9.
Encumbrances
 
301
The Sellers warrant that the Vessel, at the time of delivery, is free from all charters,
302
encumbrances, mortgages and maritime liens or any other debts whatsoever, and is not subject
303
to Port State or other administrative detentions. The Sellers hereby undertake to indemnify the
304
Buyers against all consequences of claims made against the Vessel which have been incurred
305
prior to the time of delivery.
 
306
10.
Taxes, fees and expenses
 
307
Any taxes, fees and expenses in connection with the purchase and registration in the Buyers’
308
Nominated Flag State shall be for the Buyers’ account, whereas similar charges in connection
Copyright © 2012 Norwegian Shipbrokers’ Association. All rights reserved. Published by BIMCO. No part of this BIMCO SmartCon document may be copied, reproduced or distributed in any form without the
prior written permission of the Norwegian Shipbrokers’ Association. Explanatory notes are available from BIMCO at www.bimco.org. Adopted by BIMCO in 1956, revised 1966, 1983, 1986/87, 1993 and 2012.

309
with the closing of the Sellers’ register shall be for the Sellers’ account.
 
310
11.
Condition on delivery
 
311
The Vessel with everything belonging to her shall be at the Sellers’ risk and expense until she is
312
delivered to the Buyers, but subject to the terms and conditions of this Agreement she shall be
313
delivered and taken over as she was at the time of inspection, fair wear and tear excepted.
 
314
However, the Vessel shall be delivered free of cargo with her cargo tanks hot water washed after the last cargo,
 
ready for gas-free man entry, and with all cargo tank washings confined in the slop tanks only if the Buyers first
 
pay extra US$ 200,000.00 to the Sellers’ account and free of stowaways with her Class
315
maintained without condition/recommendation*, free of average damage affecting the Vessel’s
316
class, and with her classification certificates and national certificates, as well as all other
 
317
certificates the Vessel had at the time of inspection, valid and unextended without
318
condition/recommendation by the Classification Society or the relevant authorities at the time
319
of delivery. The Sellers shall use their best endeavours to ensure that all continuous survey cycles for Hull and
 
Machinery are clean, fully up to date, and free of any outstanding recommendations, conditions of class, or
 
unextended surveys at the time of delivery. The cancelling date shall be extended by any additional time required
 
for tank cleaning and gas freeing operations.
 
 
320
“Inspection” in this Clause 11, shall mean the Buyers’ inspection according to Clause 4(a) or
321
4(b) (Inspections), if applicable. If the Vessel is taken over without inspection, the date of this
322
Agreement shall be the relevant date.
 
323
* Notes and memoranda, if any, in the surveyor’s report which are accepted by the Classification
324
Society without condition/recommendation are not to be taken into account.
 
325
12.
Name/markings
 
 
326
Within reasonable time and latest within five (5) calendar days afterUpon delivery the Buyers undertake to
 
change the name of the Vessel and alter funnel
327
markings. Buyers to provide proof of the Vessel name change to the Sellers immediately upon effecting same
 
according to this Clause.
 
328
13.
Buyers’ default
 
329
Should the Deposit not be lodged in accordance with Clause 2 (Deposit), the Sellers have the
330
right to cancel this Agreement, and they shall be entitled to claim compensation for their losses
331
and for all expenses incurred together with interest with interest rate at six (6) percent.
332
Should the Purchase Price not be paid in accordance with Clause 3 (Payment), the Sellers
333
have the right to cancel this Agreement, in which case the Deposit together with interest
334
earned, if any, shall be released to the Sellers. If the Deposit does not cover their loss, the
335
Sellers shall be entitled to claim further compensation for their losses and for all expenses
336
incurred together with interest.
 
337
14.
Sellers’ default
 
338
Should the Sellers fail to give Notice of Readiness in accordance with Clause 5(b) or fail to be
339
ready to validly complete a legal transfer by the Cancelling Date the Buyers shall have the
340
option of cancelling this Agreement. If after Notice of Readiness has been given but before
341
the Buyers have taken delivery, the Vessel ceases to be physically ready for delivery and is not
342
made physically ready again by the Cancelling Date and new Notice of Readiness given, the
343
Buyers shall retain their option to cancel. In the event that the Buyers elect to cancel this
344
Agreement, the Deposit together with interest earned, if any, shall be released to them
345
immediately.
 
346
Should the Sellers fail to give Notice of Readiness by the Cancelling Date or fail to be ready to
347
validly complete a legal transfer as aforesaid they shall make due compensation to the Buyers
348
for their loss and for all expenses together with interest if their failure is due to proven
349
negligence and whether or not the Buyers cancel this Agreement.
Copyright © 2012 Norwegian Shipbrokers’ Association. All rights reserved. Published by BIMCO. No part of this BIMCO SmartCon document may be copied, reproduced or distributed in any form without the
prior written permission of the Norwegian Shipbrokers’ Association. Explanatory notes are available from BIMCO at www.bimco.org. Adopted by BIMCO in 1956, revised 1966, 1983, 1986/87, 1993 and 2012.

350
15.
Buyers’ representatives
 
 
 
351
After this Agreement has been signed by the Parties and the Deposit has been confirmed as lodged, the
352
Buyers have the right to place two (2) representatives on board the Vessel during the last laden voyage prior
 
Vessel’s intended delivery at their sole risk and
353
expense and subject to the Vessel’s safe manning requirements and those of the Sellers and/or Ship Manager in
 
relation to Covid-19 or any other safety precautions.
 
 
Once at port of delivery and on delivery only, Buyers to have the right place two (2) further Buyers’
 
representatives onboard, to assist with the delivery procedure, subject always to vessel’s safe manning and local
 
regulations.
 
 
354
These representatives are on board for the purpose of familiarisation and in the capacity of
355
observers only, and they shall not interfere in any respect with the operation of the Vessel. The
356
Buyers and the Buyers’ representatives shall sign the Sellers’ P&I Club’s standard letter of
357
indemnity prior to their embarkation and the Buyers shall pay US$20 per day per representative for victualling
 
plus any communication expenses at cost as presented by the Seller at the time of delivery. All Buyers’
 
representatives that are due to board the Vessel shall a) be seamen and members of the Buyers’ crew; and b)
 
sign Sellers’ P&I Club’s standard Letter of Indemnity prior boarding the Vessel.
 
 
The Buyers’ representatives while on board the Vessel shall at all times comply and follow Sellers’ Covid-19 and
 
epidemic safety procedures.
 
358
16.
Law and Arbitration
 
359
(a) *This Agreement shall be governed by and construed in accordance with English law and
360
any dispute arising out of or in connection with this Agreement shall be referred to arbitration in
361
London in accordance with the Arbitration Act 1996 or any statutory modification or re-
362
enactment thereof save to the extent necessary to give effect to the provisions of this Clause.
 
363
The arbitration shall be conducted in accordance with the London Maritime Arbitrators
364
Association (LMAA) Terms current at the time when the arbitration proceedings are
365
commenced.
 
366
The reference shall be to three arbitrators. A party wishing to refer a dispute to arbitration shall
367
appoint its arbitrator and send notice of such appointment in writing to the other party requiring
368
the other party to appoint its own arbitrator within fourteen (14) calendar days of that notice and
369
stating that it will appoint its arbitrator as sole arbitrator unless the other party appoints its own
370
arbitrator and gives notice that it has done so within the fourteen (14) days specified. If the
371
other party does not appoint its own arbitrator and give notice that it has done so within the
372
fourteen (14) days specified, the party referring a dispute to arbitration may, without the
373
requirement of any further prior notice to the other party, appoint its arbitrator as sole arbitrator
374
and shall advise the other party accordingly. The award of a sole arbitrator shall be binding on
375
both Parties as if the sole arbitrator had been appointed by agreement.
 
376
In cases where neither the claim nor any counterclaim exceeds the sum of US$100,000 the
377
arbitration shall be conducted in accordance with the LMAA Small Claims Procedure current at
378
the time when the arbitration proceedings are commenced.
 
379
(b) *This Agreement shall be governed by and construed in accordance with Title 9 of the
380
United States Code and the substantive law (not including the choice of law rules) of the State
381
of New York and any dispute arising out of or in connection with this Agreement shall be
382
referred to three (3) persons at New York, one to be appointed by each of the parties hereto,
383
and the third by the two so chosen; their decision or that of any two of them shall be final, and
384
for the purposes of enforcing any award, judgment may be entered on an award by any court of
385
competent jurisdiction. The proceedings shall be conducted in accordance with the rules of the
386
Society of Maritime Arbitrators, Inc.
 
387
In cases where neither the claim nor any counterclaim exceeds the sum of US$100,000 the
Copyright © 2012 Norwegian Shipbrokers’ Association. All rights reserved. Published by BIMCO. No part of this BIMCO SmartCon document may be copied, reproduced or distributed in any form without the
prior written permission of the Norwegian Shipbrokers’ Association. Explanatory notes are available from BIMCO at www.bimco.org. Adopted by BIMCO in 1956, revised 1966, 1983, 1986/87, 1993 and 2012.

388
arbitration shall be conducted in accordance with the Shortened Arbitration Procedure of the
389
Society of Maritime Arbitrators, Inc.
 
390
(c) This Agreement shall be governed by and construed in accordance with the laws of
391
(state place) and any dispute arising out of or in connection with this Agreement shall be
392
referred to arbitration at (state place), subject to the procedures applicable there.
 
393
*16(a), 16(b) and 16(c) are alternatives; delete whichever is not applicable. In the absence of
394
deletions, alternative 16(a) shall apply.
 
395
17.
Notices
 
396
All notices to be provided under this Agreement shall be in writing.
 
397
Contact details for recipients of notices are as follows:
 
398
For the Buyers:
 
MTC ENGINEERING SDN BHD
 
MKN Embassy Techzone, Jalan Teknokrat 2
 
Cyberjaya, 63000 Sepang, Selangor
 
Malaysia
 
399
For the Sellers:        
 
MALOELAP SHIPPING COMPANY INC.
 
c/o PERFORMANCE SHIPPING MANAGEMENT INC.
 
373 Syngrou Ave., 17564, Palaio Faliro, Athens
 
Greece
 
400
18.
Entire Agreement
 
401
The written terms of this Agreement comprise the entire agreement between the Buyers and
402
the Sellers in relation to the sale and purchase of the Vessel and supersede all previous
403
agreements whether oral or written between the Parties in relation thereto.
 
404
Each of the Parties acknowledges that in entering into this Agreement it has not relied on and
405
shall have no right or remedy in respect of any condition, covenant, promise, term, statement, representation,
 
assurance or
406
warranty (whether or not made negligently) other than as is expressly set out in this Agreement.
 
407
Any terms condition, covenant, promise, terms, statement, representation, assurance or warranty capable of
 
being implied into this Agreement by any applicable statutecustom, practice, statute (including without
 
limitation, the Sale of Goods Act or any statutory modification or re-enactment thereof), or law are hereby
 
excluded to
408
the extent that such exclusion can legally be made. Nothing in this Clause shall limit or exclude
409
any liability for fraud.
19. Confidentiality
All details of this transaction to be kept strictly private and confidential. This Agreement and its negotiation and
terms (the “Confidential Information”) are private and confidential between the Buyers, the Sellers and their
affiliates, and the Parties or their affiliates shall not disclose Confidential Information to any other person without
the prior written consent of the disclosing party, provided that nothing in
 
 
this clause shall preclude a party from disclosing Confidential Information:
 
 
1. to the ultimate shareholders of such party, its affiliates and co-investors and its and their members, advisory
 
committee members, directors, officers, employees, consultants, agents, representatives, professional advisers,
 
insurers, auditors, financiers and to the Vessel’s technical and commercial managers (collectively, the “Nominated
Copyright © 2012 Norwegian Shipbrokers’ Association. All rights reserved. Published by BIMCO. No part of this BIMCO SmartCon document may be copied, reproduced or distributed in any form without the
prior written permission of the Norwegian Shipbrokers’ Association. Explanatory notes are available from BIMCO at www.bimco.org. Adopted by BIMCO in 1956, revised 1966, 1983, 1986/87, 1993 and 2012.

Representatives”);
2. to the extent required in connection with the employment of the vessel; to the Vessel’s actual or potential
charterers;
3. to the extent required by law or regulation or any governmental or other authority or the rules of any
relevant stock exchange, indicatively the US SEC and NASDAQ;
4. for financing and registration purposes of the Vessel; or
5. which is in the public domain, other than as a result of breach of this clause by or through such party. Should
however details of the sale become known or reported on the market, neither the Buyers nor the Sellers shall
have the right to withdraw from the sale or to fail to fulfil their obligations under this Agreement.
20. Trade and Economic Compliance –
Notwithstanding any other clause in this Agreement:-
a) The Buyers, for themselves and their holding companies, affiliates, associates, directors, senior executives and
officers, and shareholders warrant, represent and undertake to the Sellers, that at the date of entering into this
Agreement and continuing until the Buyers have paid the purchase price in full and taken possession of the
Vessel on delivery by the Sellers, neither the Buyers nor any person or entity on whose behalf or under whose
direction the Buyers act or assist, nor any person or entity who the Buyers may nominate to take delivery and
transfer of title of the Vessel, or to facilitate any aspect of this transaction are designated pursuant to any trade
and economic sanctions, prohibitions or restrictions imposed by a Sanctions Authority, are 50% or more owned
or controlled by any such person or entity, or based, organized or resident in a country or territory whose
government is the target of sanctions or that is the subject of comprehensive (i.e., country-wide or territory-
wide) Sanctions (including, as of the date of signature of this contract, Russia, the Donetsk People’s Republic,
Luhansk People’s Republic and Crimea regions of Ukraine, Cuba, Iran, North Korea, Venezuela, Belarus and Syria)
(a “Sanctioned Entity”) and that entry into and performance of this Agreement is not prohibited or restricted by,
and will not
expose the Sellers, their managers, the Vessel or their employees to sanctions, prohibitions or restrictions under
any trade or economic sanctions, prohibitions or restrictions (“Sanctions”). For this purpose, a “Sanctions
Authority” means the US, UN, EU, UK, Switzerland, any governmental agencies or
departments of the foregoing and of any other applicable sanctions authority, applicable to Parties.
b) The Sellers, for themselves and their holding companies, affiliates, associates, directors, senior executives and
officers, and shareholders warrant, represent and undertake to the Buyers, that at the date of entering into this
Agreement and continuing until the Buyers have paid the purchase price in full and taken possession of the
Vessel on delivery by the Sellers, neither the Sellers nor any person or entity on whose behalf or under whose
direction the Sellers act or assist, nor the Vessel are a Sanctioned Entity and that entry into and performance of
this Agreement is not prohibited or restricted by, and will not expose the Buyers to Sanctions.
c) The Vessel is sold on condition that it, and its components, shall not be sold, transferred, released, exported,
chartered, provided or used by the Buyers, or any person deriving title or access to the Vessel under them, for
any purpose or in any activity which would expose the Sellers, their managers, the Vessel or their employees to
Sanctions. The Buyers undertake that such provision will apply in case of the sale of the vessel to the next
purchaser, however, Buyers cannot ensure the application of this clause for subsequent transactions which are
beyond their reasonable control. In the event the sale by the Buyers
to the next purchaser becomes subject to, or in violation of Sanctions, the Buyers shall notify the Sellers upon
receipt of such info.
Copyright © 2012 Norwegian Shipbrokers’ Association. All rights reserved. Published by BIMCO. No part of this BIMCO SmartCon document may be copied, reproduced or distributed in any form without the
prior written permission of the Norwegian Shipbrokers’ Association. Explanatory notes are available from BIMCO at www.bimco.org. Adopted by BIMCO in 1956, revised 1966, 1983, 1986/87, 1993 and 2012.

d) If at any time before delivery the Sellers become aware of any actual breach of the warranty, representation,
undertaking and condition contained in paragraph (a), or (c), the Sellers may cancel this Agreement by written
notice to the Buyers, without liability to the Buyers, and shall be entitled to compensation for their proven losses
and all expenses they have incurred. The Buyers shall indemnify the Sellers, their managers and employees on
demand against any and all sanctions, prohibitions,
restrictions, claims, loss or liability whatsoever and howsoever arising directly as a result of breach of the
warranty, representation and undertaking and condition contained in paragraph (a) or (c), whether or not the
Sellers cancel this Agreement.
e) If at any time before delivery the Buyers become aware of any actual breach of the warranty, representation,
undertaking and condition contained in paragraph (b), the Buyers shall comply with Sanctions to which the
Buyers or the Vessel are subject and follow any orders or directions which may be given by any Sanctions
Authority, acting with powers to compel compliance and irrespective of any such orders, directions, laws or
regulations, the Buyers are entitled to compensation for their proven direct losses and expenses they have
incurred due to such a breach whether or not they cancel this Agreement.
f) No act or omission of the Sellers shall at any time constitute a waiver of this Clause 20; and the warranties,
representations and undertakings contained in this Clause 20 are deemed repeated and in remain in effect before
and after delivery, whether or not delivery occurs. g) Notwithstanding anything in this clause to the contrary,
Buyers and Sellers shall not be required to do anything which constitutes a violation of the Sanctions laws and
regulations to which either of them is subject. The Buyers shall complete the Ship Sale Questionnaire as set out in
Schedule C hereto and the Counterparty
Questionnaire which will be sent by the Sellers to Buyer’s e-mail address as provided in Clause 17 of this
Agreement as soon as practicable after the date of this Agreement and in any event before delivery of the Vessel,
failing which the Sellers shall have the right to terminate this Agreement by written notice to the Buyers, without
any liability to the Buyers, and shall be entitled to compensation for their proven losses and all expenses they
have incurred. Buyer’s response and warranties therein are deemed correct, valid and repeated at the time of
Delivery.
21. Anti-Corruption Obligation
(a)   Buyers and Sellers each agree, undertake and warrant to the other on a continuing basis that:
(i)    that it complies with the Bribery Act 2010 of the United Kingdom, the United States Foreign Corrupt
Practices Act of 1977 and any anti-corruption laws and statutes, rules or regulations issued, administered or
enforced by Greece, United Kingdom, the United States of America, or any other jurisdiction in which the Sellers
or Buyers conduct business or operations and any related or similar rules, regulations or guidelines, issued,
administered or enforced by any applicable government entity or proceeding by or before any applicable court or
government entity.
(ii)    in connection with the MOA each Party will comply with all applicable anti-corruption legislation and have
procedures in place that are, to the best of its knowledge and belief, designed to prevent the commission of any
offence under such legislation by any member of its organisation or by any person or entity providing services for
it or on its behalf in connection with this MOA; and
(iii)   in connection with the negotiation of this MOA neither it nor any member of its organisation has committed
any breach of applicable anti-corruption legislation.
(b)    If at any time before delivery the Buyers have breached any applicable anti-corruption legislation in
connection with this MOA, the Sellers may cancel this MOA by written notice to the Buyers, without liability to
the Sellers, and shall be entitled to compensation for their proven losses and all expenses they have incurred. The
Sellers shall be under no obligation to procure the return of the Deposit (or any interest thereon) to the Buyers;
Copyright © 2012 Norwegian Shipbrokers’ Association. All rights reserved. Published by BIMCO. No part of this BIMCO SmartCon document may be copied, reproduced or distributed in any form without the
prior written permission of the Norwegian Shipbrokers’ Association. Explanatory notes are available from BIMCO at www.bimco.org. Adopted by BIMCO in 1956, revised 1966, 1983, 1986/87, 1993 and 2012.

and the Deposit shall be released to the Sellers if and to the extent that release of the Deposit is permitted under
the applicable national, international and supranational anti- corruption laws and regulations. The Buyers shall
defend and indemnify Sellers against any and all fines, penalties, claims, proven losses, damages, costs (including,
without limitation, court fees and legal costs), expenses and liabilities whatsoever and howsoever arising directly
as a result of such breach, whether or not the Sellers cancel this MOA.
(c)    If at any time before delivery the Sellers have breached any applicable anti-corruption legislation in
connection with this MOA, the Buyers may cancel this MOA (as per lines 343-344) by written notice to the Sellers,
without liability to the Buyers, and in addition to that they should be entitled to compensation for their proven
direct losses and expenses they have incurred as a result of such breach.
(d)   Any such right to terminate must be exercised without undue delay.
22. Sanctions Clause
The Buyers and Sellers each represent, warrant and undertake to each other that at the date of entering into this
Agreement and continuing until the Buyers have paid the purchase price in full and taken possession of the
Vessel on delivery by the Sellers neither they nor any of their holding companies, affiliates or directors, senior
executives or officers, or to their knowledge, any person on whose behalf they are acting in connection with this
Agreement, is an individual or entity (“Person”) that is, or is 50% or more owned or controlled by, a Person (or
Persons) that is the subject of any economic or financial sanctions or trade embargoes administered or enforced
by the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”), the U.S. Departments of State
or Commerce, the United Nations Security Council (“UNSC”), the European Union (“EU”), Switzerland, the United
Kingdom (“UK”) or other applicable sanctions authority (collectively “Sanctions”) or based, organized or resident
in a country or territory that is the subject of comprehensive (i.e., country-wide or territory-wide) Sanctions
(including, as of the date of signature of this contract, Russia, Crimea, Cuba, Iran, North Korea, Venezuela, Belarus
and Syria). If at any time during the performance of this Agreement either party becomes aware that the other
party is in breach of warranty as aforesaid, the party not in breach may terminate this Agreement forthwith. The
party in breach shall be liable to indemnify the other party against any and all claims, losses, damages, costs and
fines whatsoever suffered by the other party resulting from any breach of warranty as aforesaid and in
accordance with this Agreement.
This Clause 22 to read in conjunction with Clause 20 above.
23. Further Operations Clause
23.1 The Buyers irrevocably and unconditional represent that they have purchased the Vessel for further
operations for a period at least six (6) months from the date of this Agreement (the Minimum Period).
23.2 The Buyers expressly undertake that the Vessel will not be scrapped, disposed of, dismantled, recycled,
reclaimed, regenerated, recovered and/or any other purpose whatsoever similar thereto (Recycling), in full or in
part for the duration of the Minimum Period.
23.3 The Buyers irrevocably and unconditionally warrant that any recycling after the Minimum Period, whether
done by the Buyers or any third party, shall be undertaken in accordance with:
(i) the 2009 Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships
(which shall apply even if not in force);
(ii) The EU Ship Recycling Regulation (IEC/1257/2013) or the EU Waste Regulation (EEC/1013/2006) (as
applicable);
(iii) The Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal.
Copyright © 2012 Norwegian Shipbrokers’ Association. All rights reserved. Published by BIMCO. No part of this BIMCO SmartCon document may be copied, reproduced or distributed in any form without the
prior written permission of the Norwegian Shipbrokers’ Association. Explanatory notes are available from BIMCO at www.bimco.org. Adopted by BIMCO in 1956, revised 1966, 1983, 1986/87, 1993 and 2012.

1989, as amended.
(iv) The guidelines standards and regulations issued from time to time by the IMO (International Maritime
Organization) related to Recycling; and
(v) Any other laws, standards, regulations or rules which are applicable to Recycling, including without limitation
any national, international, state or local environmental or waste laws.
23.4 The Buyers warrant that the Buyers will include this Clause (including the same obligation as this Sub Clause
1.4) in the sales agreement, if the vessel is sold to any third party, whether or not the sale is for the purpose of
recycling.
23.5 The Buyers shall indemnify and hold harmless the Sellers from and against any loss, liability, penalty, claim,
fine or costs (including legal costs) which the Sellers may incur due to a breach by the Buyers of any of the
provisions of this Clause.
23.6 The Sellers shall be entitled (in addition to any other remedy to which they may be entitled in law or in
equity) to injunctive relief, including specific performance, to enforce such obligations, and if any action should
be brought in equity to enforce any of the provisions of this Agreement, the Buyers shall not raise the defence
that there is an adequate remedy at law.
24. The Buyer hereby warrants that they do not intend to call at any port in Russia with the Vessel (whether to
load or discharge cargo or otherwise) for so long as EU, USA, UK, UN sanctions targeting the export of crude oil
and petroleum products from Russia are in place, and the Buyer agrees to provide the Seller, on request, with
necessary information to demonstrate compliance with this warranty.
For and on behalf of the Sellers
For and on behalf of the Buyers
Name: Andreas Nicolaos Michalopoulos
Name: MOHD FAUZI BIN YA’AKOB
Title: Director / Attorney-in-fact
Title: DIRECTOR
Date: 17th February 2025
Date: 17th February 2025
/s/ Andreas Nicolaos Michalopoulos
/s/ MOHD FAUZI BIN YA’AKOB
Copyright © 2012 Norwegian Shipbrokers’ Association. All rights reserved. Published by BIMCO. No part of this BIMCO SmartCon document may be copied, reproduced or distributed in any form without the
prior written permission of the Norwegian Shipbrokers’ Association. Explanatory notes are available from BIMCO at www.bimco.org. Adopted by BIMCO in 1956, revised 1966, 1983, 1986/87, 1993 and 2012.

Exhibit 4.37
MEMORANDUM OF AGREEMENT
SALEFORM 2012
 
Norwegian Shipbrokers’ Association’s
 
Memorandum of Agreement for sale and purchase of ships
1
Dated: 13 March 2025
2
ARNO SHIPPING COMPANY INC. a company Incorporated in the Republic of the Marshall Islands with
Its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands, MH
96960 (Name-of sellers), hereinafter called the “Sellers”, have agreed to sell, and
3
CONCORD VOYAGE LIMITED (Company Registry No. 76385248), Unit 2406b 24/F Low Block, Grand
Millennium Plaza, 181 Queen’s Rd, Central Sheung Wan, Hong Kong (Name-ef-buyers), hereinafter called the
“Buyers”, have agreed to buy:
4
Name of vessel: P. YANBU
5
IMO Number: 9460564
6
Classification Society: LR
7
Class Notation: 
100A1 Double Hull Oil Tanker, ESP, ShipRight CM, FDA, SDA), *IWS, LI, DSPM4
8
Year of Build: 2011 Builder/Yard: Sumitomo Heavy Industries, Ltd.
9
Flag: Marshall Islands Place of Registration: Majuro GT/NT: 55,909 / 29,810
10
hereinafter called the “Vessel”, on the following terms and conditions:
11
Definitions
12
‘‘Agreement” means this Memorandum of Agreement, as it may be amended, supplemented
annexed, varied or supplemented from time to time.
“Banking Days” are days on which banks are open both in the country of the currency stipulated for
13
the Purchase Price in Clause 1 (Purchase Price) and in the place of closing stipulated in Clause 8
14
(Documentation) and U.S., UK, Greece, Hong Kong, Beijing (PRC), Dubai (UAE). (add additional jurisdictions as
appropriate):
15
“Buyers’ Nominated Flag State” means the Republic of Panama (state flag state).
16
“Class” means the class notation referred to above.
17
“Classification Society” means the Society referred to above.
18
“Deposit” shall have the meaning given in Clause 2 (Deposit)
19
“Deposit Holder” means Haridass Ho & Partners, 4 Shenton Way, #10-03/06 SGX Centre 2 Singapore
068807 or Oon Bazul LLP, 36 Robinson Rd, #08-01/06 City House, Singapore 068877 (state name and
location of Deposit Holder) or, if left blank, the
20
Sellers’ Bank, which shall hold and release the Deposit and the Balance Payment in accordance with this
Agreement and the Escrow Agreement.
Copyright © 2012 Norwegian Shipbrokers’ Association. All rights reserved. Published by BIMCO. No part of this BIMCO SmartCon document may be
copied, reproduced or distributed in any form without the prior written permission of the Norwegian Shipbrokers’ Association. Explanatory notes
are available from BIMCO at www.bimco.org. Adopted by BIMCO in 1956, revised 1966, 1983, 1986/87, 1993 and 2012.

“Deposit Holder’s Account” means the account indicated in the Escrow Agreement held with the Deposit
Holder’s Bank.
“Deposit Holder’s Bank” means the bank indicated in the Escrow Agreement
“Escrow Agreement” means the escrow agreement in respect of the Deposit and the Balance Payment
entered into after signing of this Agreement amongst the Sellers, the Buyers and the Deposit Holder.
21
“In writing” or “written” means a letter handed over from the Sellers to the Buyers or vice versa, a
22
registered letter, e-mail or telefax.
23
“Parties” means the Sellers and the Buyers.
24
“Purchase Price” means the price for the Vessel as stated in Clause 1 (Purchase Price).
25
“Sellers’ Account” means an account in the name of the Sellers at the Sellers* Bank.
26
“Sellers’ Bank” means (state name of bank, branch and details) or, if left blank, the bank
27
notified by the Sellers to the Buyers for receipt of the balance of the Purchase Price.
28
1.
Purchase Price
29
The Purchase Price is US$ 39,000,000.- (United States Dollars Thirty-Nine Million only) (state currency and
amount both in words and figures).
30
2.
Deposit
31
As security for the correct fulfilment of this Agreement the Buyers shall lodge a deposit of
32
15% (Fifteen per cent) or, ifleft blank, 10% (ten percent), of the Purchase Price (the
33
“Deposit”) in an interest bearing account for the Parties with the Deposit Holder within three (3)
34
Banking Days after the date that:
35
(i) this Agreement has been signed by the Parties and exchanged in original or by
36
e-mail or telefax;
(ii) the Escrow Agreement between the Parties and the Deposit Holder has been entered into, is fully
executed and exchanged in original or by e-mail; and
37
(iii) the Deposit Holder has confirmed in writing to the both Parties that the account has been
38
opened and is ready to receive funds.
39
The Deposit shall be released in accordance with joint written instructions of the Parties.
40
Interest, if any, shall be credited to the Buvers. Any fee charged for holding and releasing the
41
Deposit, Balance Payment shall be borne equally by the Parties. The Parties shall provide the Deposit Holder
with
42
all necessary documentation to (including but not limited to KYC requirements) to open and maintain the
account without delay and latest within two (2) Banking Days after execution of this Agreement by both the
Sellers and the Buyers.
43
3.
Payment
44
On delivery of the Vessel, but not later than three (3) Banking Days after the date that Notice of
45
Readiness has been given in accordance with Clause 5 (Time and place of delivery and
46
notices):
Copyright © 2012 Norwegian Shipbrokers’ Association. All rights reserved. Published by BIMCO. No part of this BIMCO SmartCon document may be
copied, reproduced or distributed in any form without the prior written permission of the Norwegian Shipbrokers’ Association. Explanatory notes
are available from BIMCO at www.bimco.org. Adopted by BIMCO in 1956, revised 1966, 1983, 1986/87, 1993 and 2012.

47
(i) the Deposit shall be relessed to the Sellers as per the Escrow Agreement in immediately available
funds, net, free of any bank charges; and
48
(ii) the balance of the Purchase Price (the “Balance Money”) and all other sums payable on delivery by the
Buyers
49
to the Sellers under this Agreement held in the Deposit Holder’s Account shall be released in full in
immediately avsilable funds, net, free of bank charges to the
50
Sellers’ Account. in accordance with the terms of this Agreement and the Escrow Agreement.
The Buyers shall remit the Balance Money Including the value of the estimated bunker and lubricating olls
remaining on board at the time of delivery and any other charges and money whatsoever (the “Agreed
Extra” and together with the Balance Money shall constitute the “Balance Payment”) to be paid by the
Buyers to the Sellers in accordance with this Agreement and the Escrow Agreement by telegraphic
transfer to the Deposit Holder’s Account held with the Deposit Holder at least two (2) Banking Days prior
to the intended date of delivery of the Vessel as per the 2/1 days definite Notice of Readiness (see Clause
5b). The Balance Money Payment shall remain to the order of the Buyers and will be released in
accordance with the terms of this Agreement and the Escrow Agreement
The Deposit and the Balance Payment shall be irrevocably and unconditionally released to
the Sellers’ account in accordance with the terms of this Agreement and the Escrow Agreement against
the Seller’s presentation and handing over to the Deposit Holder of:
(a) Protocol of Delivery and Acceptance executed but not timed, by both Sellers and Buyers authorized
representatives; and
(b) duly executed written irrevocable instructions of the Buyers’ authorized representatives to proceed
to their release.
Any surplus money after the release of the Deposit and the Balance Payment shall be remitted back to the
Buyers in accordance with the provisions of the Escrow Agreement.
In exchange of the delivery documents as agreed in the Addendum No. 1 and as per Clause 8 of this
Agreement, and upon:
1. Execution and submission to the Deposit Holder of the duly executed irrevocable and unconditional
release instructions for the Deposit and the Balance Payment; and
2. Confirmation from the Deposit Holder that the Deposit and Balance Money has been remitted to the
Sellers Account accompanied by the SWIFT copy (or copies, as the case may be) issued by the Deposit
Holder’s Bank concerning the payment of the Deposit and the Balance Payment,
the Protocol of Delivery and Acceptance will be timed and dated and the Vessel will immediately be
legally and physically delivered to the Buyers; relevant procedure to be described in a closing memo
which to be agreed by the Sellers, the Buyers and the Deposit Holder not later than five (5) Banking Days
prior to the intended date of delivery of the Vessel. Notice of Readiness can be serviced anytime,
including non-Banking Days.
51
4.
Inspection
52
(a)* The Buyers have waived their right to inspect the Vessel and have reviewed the Vessel’s complete class
records on 17 January 2025 and approved and accepted the Vessel’s classification records. The
Buyers
53
have also inspected the vessel at/in (state place) on (state date) and have
54
accepted the Vessel following this said reviews/approvals, and inspection of her classification records and
the sale is outright and definite, subject only
55
to the terms and conditions of this Agreement.
56
(b)* The Buyers shall have the right to inspect the Vessel’s classification records and declare
57
whether same are accepted or not within (state date/peried).
58
The Sellers shall make the Vessel available for inspection at/in (state place/range) within
Copyright © 2012 Norwegian Shipbrokers’ Association. All rights reserved. Published by BIMCO. No part of this BIMCO SmartCon document may be
copied, reproduced or distributed in any form without the prior written permission of the Norwegian Shipbrokers’ Association. Explanatory notes
are available from BIMCO at www.bimco.org. Adopted by BIMCO in 1956, revised 1966, 1983, 1986/87, 1993 and 2012.

59
(state date/period).
60
The Buyers shall undertake the inspcction without undue delay to the Vessel. Should the
61
Buyers cause undue delay they shall compensate the Sellers for the losses thereby incurred.
62
The Buyers shall inspect the Vessel without opening up and without cost to the Sellers.
63
During the inspcction, the Vessel’s deck and engine log books shall be made available for
64
cxamination by the Buyers.
65
The sale shall become outright and definite, subject only to the terms and conditions of this
66
Λgreement, provided that the Sellers receive written notice of acceptance of the Vessel from
67
the Buyers within seventy two (72) hours after completion of such inspection or after the
68
date/last day of the period stated in Line 59, whichever is earlier.
69
Should the Buyers fail to undertake the inspcction as scheduled and/or notice of acceptance of
70
the Vessel’s classification records and/or of the Vessel not be received by the Sellers as
71
aforesaid, the Deposit together with interest earned, if any, shall be rel ased immediately to the
72
Buyers, wher after this LVrccmcnt shall be null and void.
73
*4(a) and 4(b) are alternatives; delete whichever is not applicable. In the absence of deletions,
74
alternative 4(a) shall apply.
75
5.
Time and place of delivery and notices
76
(a) The Vessel shall be delivered and taken over safely afloat at a safe and accessible berth or 
77
anchorage at Le Havre, France (state place/range) in the Sellers’ option.
78
Notice of Readiness (“NOR”) shall not be tendered before: 19th March 2025          in Sellers’ option
79
Cancelling Date (see Clauses 5(c), 6 (a)(i), 6 (a) (iii) and 14): 26th March 2025
Sellers will not perform any additional voyage or enter into a new charterparty after the date in line 84,
without Buyer’s concurrence.
80
(b) The Sellers shall keep the Buyers well informed of the Vessel’s itinerary and shall
 
81
provide the Buyers with twenty (20), ten (10), seven (7), five (5 and three (3) days’ approximate notice, and two (2) and one (1) definite days’ notice of the date the
 
82
Sellers intend to tender Notice of Readiness and of the intended place of delivery. Delivery shall take place on a Banking Day.
 
83
When the Vessel is at the place of delivery and physically and documentarily ready for delivery in accordance with
84
this Agreement, the Sellers shall give the Buyers a written Notice of Readiness for delivery.
The Buyers shall take over the Vessel latest within three (3) Banking Days from the day of receipt of such
Notice of Readiness for Delivery.
In the event the Buyers do not take delivery of the Vessel within the period specified above, the Buyers shall
pay to the Sellers USO 15,000 (United States Dollars Fifteen Thousand only) for each/ per calendar day of the
delay up to the tenth (10th) day of the delay as liquidated damages. If the delay exceeds ten (10) calendar
days, then the Sellers shall have the right to cancel this Agreement and claim damages for their losses flowing
therefrom.
 
85
(c) If the Sellers anticipate that, notwithstanding the exercise of due diligence by them, the
86
Vessel will not be ready for delivery by the Cancelling Date they may notify the Buyers in writing
87
stating the date when they anticipate that the Vessel will be ready for delivery and proposing a
88
new Cancelling Date. Upon receipt of such notification the Buyers shall have the option of
Copyright © 2012 Norwegian Shipbrokers’ Association. All rights reserved. Published by BIMCO. No part of this BIMCO SmartCon document may be
copied, reproduced or distributed in any form without the prior written permission of the Norwegian Shipbrokers’ Association. Explanatory notes
are available from BIMCO at www.bimco.org. Adopted by BIMCO in 1956, revised 1966, 1983, 1986/87, 1993 and 2012.

89
either cancelling this Agreement in accordance with Clause 14 (Sellers’ Default) within three (3)
90
Banking calendar Days of receipt of the notice or of accepting the new date as the new Cancelling Date.
91
If the Buyers have not declared their option within three (3) Banking calendar Days of receipt of the
92
Sellers’ notification or if the Buyers accept the new date, the date proposed in the Sellers’
93
notification shall be deemed to be the new Cancelling Date and shall be substituted for the
94
Cancelling Date stipulated in line 79.
 
95
If this Agreement is maintained with the new Cancelling Date all other terms and conditions
96
hereof including those contained in Clauses 5(b) and 5(d) shall remain unaltered and in full
97
force and effect.
 
98
(d) Cancellation, failure to cancel or acceptance of the new Cancelling Date shall be entirely
99
without prejudice to any claim for direct costs and damages the Buyers may have under Clause 14 (Sellers’
100
Default) for the Vessel not being ready by the original Cancelling Date.
 
101
(e) Should the Vessel become an actual, constructive or compromised total loss before delivery
or not be able to be delivered through outbreak of war, political reasons, restraint of Governments, Princes or
people or any other cause which either Party hereto cannot prevent or control,
102
the Deposit together with interest earned, if any, shall be released immediately to the Buyers
103
whereafter this Agreement shall be null and void and neither Party shall have an obligation or liability of
any nature whatsoever to the other Party.
 
104 6.
Divers Inspection / Drydocking
105
(a)*
106
(i) The Buyers shall have the option at their cost and expense to arrange for an underwater
107
inspection by a diver approved by the Classification Society prior to the delivery of the
108
Vessel. Such option shall be declared latest nine (9) days prior to the Vessel’s intended
109
date of readiness for delivery as notified by the Sellers pursuant to Clause 5(b) of this
110
Agreement. The Sellers shall at their cost and expense make the Vessel available for
111
such inspection. This inspection shall be carried out without undue delay, and latest within 24 hours after
notification by the Sellers that the Vessel has arrived at the delivery port and is available for an underwater
inspection, and in the
112
presence of a Classification Society surveyor arranged for by the Sellers and paid for by
113
the Buyers. The Buyers’ representative(s) shall have the right to be present at the diver’s
114
inspection as observer(s) only without interfering with the work or decisions of the
115
Classification Society surveyor. The extent of the inspection and the conditions under
116
which it is performed shall be to the satisfaction of the Classification Society. If the
117
conditions at the place of delivery are unsuitable for such inspection, the Sellers shall at
118
their cost and expense make the Vessel available at a suitable alternative place near to
119
the delivery port, in which event the Cancelling Date shall be extended by the additional
120
time required for such positioning and the subsequent re-positioning. In such event, the Sellers have the
right to choose this alternative port as the new port of delivery, provided Buyers’ crew change is possible.
The Sellers may
121
not tender Notice of Readiness prior to completion of the underwater inspection.
122
(ii) If the rudder, propeller, bottom or other underwater parts below the deepest load line are
123
found broken, damaged or defective so as to affect the Vessel’s class, then (1) unless
124
repairs can be carried out afloat to the satisfaction of the Classification Society, the
125
Sellers shall arrange for the Vessel to be drydocked at their expense for inspection by
126
the Classification Society of the Vessel’s underwater parts below the deepest load line,
127
the extent of the inspection being in accordance with the Classification Society’s rules (2)
128
such defects shall be made good by the Sellers at their cost and expense to the
129
satisfaction of the Classification Society without condition/recommendation** and (3) the
130
Sellers shall pay for the underwater inspection and the Classification Society’s
131
attendance.
Copyright © 2012 Norwegian Shipbrokers’ Association. All rights reserved. Published by BIMCO. No part of this BIMCO SmartCon document may be
copied, reproduced or distributed in any form without the prior written permission of the Norwegian Shipbrokers’ Association. Explanatory notes
are available from BIMCO at www.bimco.org. Adopted by BIMCO in 1956, revised 1966, 1983, 1986/87, 1993 and 2012.

132
Notwithstanding anything to the contrary in this Agreement, if the Classification Society
133
do not require the aforementioned defects to be rectified before the next class
134
drydocking survey, the Sellers shall be entitled to deliver the Vessel with these defects
135
against a deduction from the Purchase Price of the estimated direct cost (of labour and
136
materials) of carrying out the repairs to the satisfaction of the Classification Society,
137
whereafter the Buyers shall have no further rights whatsoever in respect of the defects
138
and/or repairs. The estimated direct cost of the repairs shall be the average of quotes
139
for the repair work obtained from two reputable independent shipyards at or in the
140
vicinity of the port of delivery, one to be obtained by each of the Parties within two (2)
141
Banking Days from the date of the imposition of the condition/recommendation, unless
142
the Parties agree otherwise. Should either of the Parties fail to obtain such a quote within
143
the stipulated time then the quote duly obtained by the other Party shall be the sole basis
144
for the estimate of the direct repair costs. The Sellers may not tender Notice of
145
Readiness prior to such estimate having been established.
 
146
(iii) If the Vessel is to be drydocked pursuant to Clause 6(a)(ii) and no suitable dry-docking
147
facilities are available at the port of delivery, the Sellers shall take the Vessel to a port
148
where suitable drydocking facilities are available, whether within or outside the delivery
149
range as per Clause 5(a). Once drydocking has taken place the Sellers shall deliver the
150
Vessel at a port within the delivery range as per Clause 5(a) which shall, for the purpose
151
of this Clause, become the new port of delivery. In such event the Cancelling Date shall
152
be extended by the additional time required for the drydocking and extra steaming, but
153
limited to a maximum of fourteen (14) days.
 
154
(b)* The Sellers shall place the Vessel in drydock at the port of delivery for inspection by the
155
Classification Socicty of the Vessel’s underwater parts below the deepest load line, the extent
156
of the inspection being in accordance with the Classification Socicty’s rules. If the rudder,
157
propeller, bottom other underwater parts below the deepest load line are found broken
158
damaged or defectives as to affect the Vessel’s class, such defects shall be made good at the
159
Sellers’ cost and expense to the satisfaction of the Classification Society without
160
condition/recommendation**. In such event the Sellers are also to pay for the costs and
161
expenses in connection with putting the Vcsscl in and taking her out of drydock, including the
162
drydock dues and the Classification Society’s fees. The Sellers shall also pay for these costs
163
and expenses if parts of the tailshaft system are condemned or found defective or broken so as
164
to affect the Vessel’s class. In all other cases, the Buyers shall pay the aforesaid costs and
165
expenses, ducs and fees.
166
(c) If the Vessel is drydocked pursuant to Clause 6 (a)(ii) or 6 (b) above:
 
167
(i) The Classification Society may require survey of the tailshaft system, the extent of the
168
survey being to the satisfaction of the Classification surveyor. If such survey is
169
not required by the Classification Society, the Buyers shall have the option to require the
170
tailshaft to be drawn and surveyed by the Classification Society, the extent of the survey
171
being in accordance with the Classification Society’s rules for tailshaft survey and
172
consistent with the current stage of the Vessel’s survey cycle. The Buyers shall declare
173
whether they require the tailshaft to be drawn and surveyed not later than by the
174
completion of the inspection by the Classification Society. The drawing and refitting of
175
the tailshaft shall be arranged by the Sellers. Should any parts of the tailshaft system be
176
condemned or found defective so as to affect the Vessel’s class, those parts shall be
177
renewed or made good at the Sellers’ cost and expense to the satisfaction of
178
Classification Society without condition/recommendation**.
 
179
(ii) The costs and expenses relating to the survey of the tailshaft system shall be borne by
180
the Buyers unless the Classification Society requires such survey to be carried out or if
Copyright © 2012 Norwegian Shipbrokers’ Association. All rights reserved. Published by BIMCO. No part of this BIMCO SmartCon document may be
copied, reproduced or distributed in any form without the prior written permission of the Norwegian Shipbrokers’ Association. Explanatory notes
are available from BIMCO at www.bimco.org. Adopted by BIMCO in 1956, revised 1966, 1983, 1986/87, 1993 and 2012.

181
parts of the system are condemned or found defective or broken so as to affect the
182
Vessel’s class, in which case the Sellers shall pay these costs and expenses.
183
(iii) The Buyers’ representative(s) shall have the right to be present in the drydock, as
184
observer(s) only without interfering with the work or decisions of the Classification
185
Society surveyor.
 
186
(iv) The Buyers shall have the right to have the underwater parts of the Vessel cleaned
187
and painted at their risk, cost and expense without interfering with the Sellers’ or the
188
Classification Society surveyor’s work, if any, and without affecting the Vessel’s timely
189
delivery. If, however, the Buyers’ work in drydock is still in progress when the
190
Sellers have completed the work which the Sellers are required to do, the additional
191
docking time needed to complete the Buyers’ work shall be for the Buyers’ risk, cost and
192
expense. In the event that the Buyers’ work requires such additional time, the Sellers
193
may upon completion of the Sellers’ work tender Notice of Readiness for delivery whilst
194
the Vessel is still in drydock and, notwithstanding Clause 5(a), the Buyers shall be
195
obliged to take delivery in accordance with Clause 3 (Payment), whether the Vessel is in
196
drydock or not.
 
197
*6 (a) and 6 (b) are alternatives; delete whichever is not applicable. In the absence of deletions,
198
alternative 6 (a) shall apply.
 
199
**Notes or memoranda, if any, in the surveyor’s report which are accepted by the Classification
200
Society without condition/recommendation are not to be taken into account.
 
201
7. Spares, bunkers and other items
 
202
The Sellers shall deliver the Vessel to the Buyers with everything belonging to her on board
203
and on shore. All spare parts and spare equipment including spare tail-end shaft(s) and/or
204
spare propeller(s)/propeller blade(s), if any, belonging to the Vessel at the time of this Agreement
205
used or unused, whether on board or not shall become the Buyers’ property, but spares on
206
order are excluded. Forwarding charges, if any, shall be for the Buyers’ account. The Sellers
207
are not required to replace spare parts including spare tail-end shaft(s) and spare
208
propeller(s)/propeller blade(s) which are taken out of spare and used as replacement prior to
209
delivery, but the replaced items shall be the property of the Buyers. Unused stores and
210
provisions shall be included in the sale and be taken over by the Buyers without extra payment.
211
Library and forms exclusively for use in the Sellers’ vessel(s) and captain’s, officers’ and crew’s
212
personal belongings including the slop chest are excluded from the sale without compensation,
213
as well as the following additional items:        (include list) Such list to be incorporated into this Agreement
through an Addendum
214
Items on board which are on hire or owned by third parties, listed as follows, are excluded from
215
the sale without compensation:       (include list) Such list to be incorporated into this Agreement
through an Addendum
216
items on board at the time of inspection which are on hire or owned by third parties, not listed
217
above, shall be replaced or procured by the Sellers prior to delivery at their cost and expense.
218
The Buyers shall take over remaining bunkers and unbroached, unopened and unused lubricating and
hydraulic oils and
219
greases that have not passed through the Vessels main system, and in storage tanks and unopened drums
and pay either extra to the Sellers: 
 
220
(a) *the actual net price basis FIFO calculation (excluding barging expenses) as evidenced by latest invoices
or vouchers; or at Sellers’/ time charterers’/ pool’s last net purchase prices;
Copyright © 2012 Norwegian Shipbrokers’ Association. All rights reserved. Published by BIMCO. No part of this BIMCO SmartCon document may be
copied, reproduced or distributed in any form without the prior written permission of the Norwegian Shipbrokers’ Association. Explanatory notes
are available from BIMCO at www.bimco.org. Adopted by BIMCO in 1956, revised 1966, 1983, 1986/87, 1993 and 2012.

One (1) calendar day prior to the anticipated date of delivery of the Vessel, the quantities of bunkers,
lubricating and hydraulic oils and greases remaining on board shall be measured jointly by the Seller’s
Chief Engineer (acting as Sellers’ representative) and the Buyer’s familiarization crew on board (acting as
Buyers’ representative) with an agreed allowance of reasonable consumption up to the actual physical
delivery and a relevant statement to be agreed and signed by both Parties. Agreed allowance for
consumption for the period between the joint survey and the time of physical delivery will be subtracted
from the figures agreed in said survey and shall be included in the above statement. The Buyers shall pay
for the quantities mentioned in the aforesaid duly executed statement in United States Dollars according
to Clause 3 of this Agreement.
 
221
(b) *the current net market price (excluding barging expenses) at the port and date of delivery
222
of thc Vessel or, if unavailable, at thc nearest bunkering port,
223
for the quantities taken over.
 
224
Payment under this Clause shall be made at the same time and place and in the same
225
currency as the Purchase Price.
226
“inspection” in this Clause 7, shall mean the Buyers’ inspection according to Clause 4(a) or 4(b)
227
(Inspection), if applicable. If the Vessel is taken over without inspection, the date of this
228
Agreement shall be the relevant date.
229
*(a) and (b) are alternatives, delete whichever is not applicable. In the absence of deletions
230
alternative (a) shall apply.
 
231
8. Documentation
232
The place of closing: in the premises of the Deposit Holder with the physical presence of the Parties, or by
virtual/ electronic attendance of the Parties’ authorised representatives.
In exchange for payment of the Purchase Price and Agreed Extra the Sellers shall provide the Buyers with
the Closing documents, which are to be mutually agreed between Buyers and Sellers as promptly as possible
and to form an Addendum to this Agreement, but the agreement and execution of such Addendum shall not
delay the lodging of the Deposit. Otherwise as per NSF 2012.
 
233
(a) In exchange for payment of the Purchase Price and the Extras the Sellers shall provide the Buyers with the
234             following delivery documents:
235             (i) Two Legal Bill(s) of Sale in a form recordablc in the Buyers’ Nominatcd Flag State;
236             transferring title of the Vessel and stating that the Vessel is free from all mortgages,
237             encumbrances tax and maritime liens or any other debts whatsoever, duly notarially attested
238             and legalised or apostillcd, as required by the Buyers’ Nominated Flag State;
239             (ii) Original True extract copy of written resolution f Sellers’ Board of Director resolving and approving the
scale of the Vessel, approvine and/ or ratifying the execution of the MIA, any and all Addenda therete as well as the
Completion Services Agreement entered into by and among the Sellers, the Buyers and the Deposit Holder (the “Escrow
Agreement”) and authorizing the issuance of a Power of Attorney to specific person(s) to execute any addenda to the
MOA, the Escrow Agreement and any addenda thereto, the Bill of Sale, Protocol of Delivery and Acceptance and all
other documents and to deal with all matters relating to the completion of the sale and transfer of  title to the Buyers
pursuant to the MOA. The resolution shall be certified by a Notary and legalized by apostille.Evidence that all necessary
corporate, shareholder and other action has been taken by
240            the Sellers to authorise the execution, delivery and performance of this Agreement;
241             (iii) (iii) One (1) Original Extract of the Shareholder(s)’ resolutions resolving and approving the resolutions of
the Sellers’ Board of Directors duly notarised and apostilled
                       (iv) Power of Attorncy of the Sellers issued in line with the above appointing one or more representatives to
act on behalf
Copyright © 2012 Norwegian Shipbrokers’ Association. All rights reserved. Published by BIMCO. No part of this BIMCO SmartCon document may be
copied, reproduced or distributed in any form without the prior written permission of the Norwegian Shipbrokers’ Association. Explanatory notes
are available from BIMCO at www.bimco.org. Adopted by BIMCO in 1956, revised 1966, 1983, 1986/87, 1993 and 2012.

242             of the Sellers in the performance of this Agreement, duly notarially attested and legalised
243              or apostillcd (as appropriatc);
 
244             (iv) (v)Scanned copy of Sellers’ Certificate of Good Standing and Certificate of Incumbency issued by the
competent authority showing the company is in good standing, their authorized person(s)/directors and shareholders
and dated not earlier than (7) seven banking days prior the date of closing.
(vi) Scanned copy of the Sellers’ Certificate of Incorporation, Articles of Incorporation and By Laws,
certified as true and complete by a Director or lawyer of the Sellers.
(viii) Certificate or Transcript of Registry issued by the competent authoritics of the flag state
245             on the date of delivery evidencing the Sellers’ ownership of the Vessel and that the
246             Vessel is free from registered encumbrances and mortgages, to be faxed or e-mailed by
247             such authority to the closing meeting prior release of Purchase Price with the original to be sent to the Buyers as
soon as
248             possible after delivery of the Vessel;
249             (viii) Declaration of Class or (depending on the Classification Society) a Class Maintenance
250             Certificate issued within three (3) Banking Days prior to delivery confirming that the
251             Vessel is in Class free of condition/recommendation;
253             (ixvi) (ix)         Permission to Sale issued by the flag registration authority of the Vessel.
                   (x)Certificate of Deletion of the Vessel from the Vessel’s registry or other official evidence of
253             deletion appropriate to the Vessel’s registry at the time of delivery, or, in the event that
254             the registry does not as a matter of practice issue such documentation immediately, a
255             written undertaking by the Sellers to effect deletion from the Vessel’s registry forthwith
256             and provide a certificate or othcr official evidence of deletion to the Buyers promptly and
257             latest within four (4) weeks after the Purchase Price has been paid and the Vessel has
258             been delivered;
259             (xi vii) A copy of the Vessel’s Continuous Synopsis Record certifying the date on which the
260             Vessel ceased to be registered with the Vessel’s registry, or, in the event that the registry
261             does not as a matter of practice issue such certificate immediately, a written undertaking
262             from the Sellers to provide the copy of this certificate promptly upon it being issued
263             together with evidence of submission by the Sellers of a duly executed Form 2 stating
264             the date on which the Vessel shall cease to be registered with the Vessel’s registry;
265             (xii viii) Commercial Invoice for the Vessel marked fully paid;
266             (ixiii) Commercial Invoice(s) for bunkers, lubricating and hydraulic oils and greases marked fully paid;
268             (xiv) A copy of the Sellers’ letter to their satellite communication provider cancelling the
                  Vessel’s communications contract which is to be sent immediately after delivery of the
                  Vessel and a Letter of Undertaking from Sellers to cancel their communication Vessel’s
communications contract which is to be sent immediately after delivery of the
269            Vessel;
270             (xvi) Any additional documents as may revsonably be required by the competent authoritics of
271             the Buyers’ Nominated Flag State for the purpose of registering the Vessel, provided the
272             Buyers notify the Sellers of any such documents as soon as possible after the date of
273            this Agreement; and
274             (xvi ii) The Sellers’ letter of confirmation signed by a Director or authorised person that to the best of their
knowledge, the Vessel is not
275             black listed by any nation or international organisationorganization nor is subject to sanctions, prohibitions or
designations anywhere in the world and that the Sellers are not designated, as well as the Vessel is not a sanctioned
Vessel, under US, EU (or any of its member states) or UK or the UN.
Copyright © 2012 Norwegian Shipbrokers’ Association. All rights reserved. Published by BIMCO. No part of this BIMCO SmartCon document may be
copied, reproduced or distributed in any form without the prior written permission of the Norwegian Shipbrokers’ Association. Explanatory notes
are available from BIMCO at www.bimco.org. Adopted by BIMCO in 1956, revised 1966, 1983, 1986/87, 1993 and 2012.

                      (xvii) ) A letter of confirmation from Master confirming that all crew wages have been paid in full until the
time and date of delivery.
                  (xix) Copies f the passport f Sole Director f the Sellers and of the attorncy in fact/ authoriscd signatory
who signed or shall sign the MOA, Escrow Agreement, release instructions and the delivery documents.
(xx) Letter of Undertaking dated on the date of Delivery signed by the Sellers’ Director or duly authoriscd attorncy in
fact to send the original documents stated above (where available) to the Buyers within seven (7) Banking Days from
Delivery of the Vessel.
Statement of compliance for IMO DCS and DOC for EU MRV (Updated fuel oil consumption till date of delivery, as
required by ΙMO), to be provided well after the Vessels’ delivery (DOC for EU MRV for years 2022,2023 and 2021, and
SOC for IMO DCS data for years 2022, 2023m 2024
276             (b) At the time of delivery the Buyers shall provide the Sellers with:
277             (i) Evidence that all necessary corporate, shareholder and other action has been taken by
278             the Buyers to authorise the execution, delivery and performance of this Agreement; and
279             (ii) Power of Attorney of the Buyers appointing one or more representatives to act on behalf
280            of the Buyers in the performance of this Agreement, duly notarially attested and legalised
281             or apostilled (as appropriate).
282
(c) If any of the documents listed in the Addendum are not in the English
283
language they shall be accompanied by an English translation by an authorised translator or
284
certified by a lawyer qualified to practice in the country of the translated language.
285
(d) The Parties shall to the extent possible exchange copies, drafts or samples of the
286
documents listed in the Addendum for review and comment by the
287
other party without undue delay (state number of days), or if left blank, nine (9) days prior to the
288
Vessels intended date of readiness for delivery as notificd by the Sellers pursuant to
289
Clause 5(b) of this Agreement.
290
(e) Concurrent with the exchange of documents in the Addendum above,
291
the Sellers shall also hand to the Buyers the classification certificate(s) as well as all plans,
292
drawings and manuals, (excluding ISM/ISPS manuals) manuals, Vessel Response Plan for OPA 90 and
SOPEP), which are on board the Vessel. Other
293
certificates which are on board the Vessel shall also be handed over to the Buyers unless
294
the Sellers are required to retain same, in which case the Buyers have the right to take copies.
 
295
(f) Other technical and operational documentation which may be in the Sellers’ possession shall promptly
after
296
delivery be forwarded to the Buyers at their expense, if they so request. The Sellers may keep
297
the Vessel’s log books but the Buyers have the right to take copies of same up to six (6) months back
counting as from the date the Sellers tender Notice of Readiness with all relevant personal data protected
by EU GDPR regulation erased. The Buyers undertake that the copies of the log books are solely for their
internal reference and shall not share same with any external person or entity.
Sellers to provide last 5 port clearance on board the Vessel at time of Delivery.
298
(g) The Parties shall sign and deliver to each other a Protocol of Delivery and Acceptance
299
confirming the date and time of delivery of the Vessel from the Sellers to the Buyers.
300 9.
Encumbrances
301
The Sellers warrant that the Vessel, at the time of delivery, is free from all charters,
302
encumbrances, mortgages and maritime liens or any other debts whatsoever, and is not subject
303
to Port State or other administrative detentions. The Sellers hereby undertake to indemnify the
Copyright © 2012 Norwegian Shipbrokers’ Association. All rights reserved. Published by BIMCO. No part of this BIMCO SmartCon document may be
copied, reproduced or distributed in any form without the prior written permission of the Norwegian Shipbrokers’ Association. Explanatory notes
are available from BIMCO at www.bimco.org. Adopted by BIMCO in 1956, revised 1966, 1983, 1986/87, 1993 and 2012.

304
Buyers against all consequences of claims made against the Vessel which have been incurred
305
prior to the time of delivery.
 
306 10.
Taxes, fees and expenses
307
Any taxes, fees and expenses in connection with the purchase and registration in the Buyers’
308
Nominated Flag State shall be for the Buyers’ account, whereas similar charges in connection
309
with the closing of the Sellers’ register shall be for the Sellers’ account.
310 11.
Condition on delivery
 
311
The Vessel with everything belonging to her shall be at the Sellers’ risk and expense until she is
312
delivered to the Buyers, but subject to the terms and conditions of this Agreement she shall be
313
delivered and taken over in substantially the same condition as she was at the time of inspection of her
records according to Clause 4 of this Agreement, fair wear and tear excepted.
 
314
However, the Vessel shall be delivered free of slops, free of cargo and free of stowaways with her current Class
315
maintained without condition/recommendation*, free of average damage affecting the Vessel’s
316
class, and with her classification certificates and national/ international trading certificates, as well as all other
317
certificates the Vessel had at the time of inspection, clean and valid and unextended for min. 3 months without
318
condition/recommendation* by the Classification Society or the relevant authorities at the time
319
of delivery.
 
320
“inspection” in this Clause 11, shall mean the Buyers’ inspection according to Clause 4(a) or
321
4(b) (Inspections), if applicable. If the Vessel is taken over without inspection, the date of this
322
Agreement shall be the relevant date.
323
*Notes and memoranda, if any, in the surveyor’s report which are accepted by the Classification
324
Society without condition/recommendation are not to be taken into account.
325 12.
Name/markings
326
Upon delivery the Buyers undertake to change the name of the Vessel and alter funnel
327
markings.
328 13.
Buyers’ default
329
Should the Deposit not be lodged in accordance with Clause 2 (Deposit), the Sellers have the
330
right to cancel this Agreement, and they shall be entitled to claim compensation for their losses
331
and for all expenses incurred together with interest.
332
Should the Purchase Price not be paid in accordance with Clause 3 (Payment), the Sellers
333
have the right to cancel this Agreement, in which case the Deposit together with interest
334
earned, if any, shall be released to the Sellers. If the Deposit does not cover their loss, the
335
Sellers shall be entitled to claim further compensation for their losses and for all expenses
336
incurred together with interest.
337 14.
Sellers’ default
338
Should the Sellers fail to give Notice of Readiness in accordance with Clause 5(b) or fail to be
339
ready to validly complete a legal transfer by the Cancelling Date the Buyers shall have the
340
option of cancelling this Agreement. If after Notice of Readiness has been given but before
341
the Buyers have taken delivery, the Vessel ceases to be physically ready for delivery and is not
342
made physically ready again by the Cancelling Date and new Notice of Readiness given, the
343
Buyers shall retain their option to cancel. In the event that the Buyers elect to cancel this
344
Agreement, the Deposit together with interest earned, if any, shall be released to them
Copyright © 2012 Norwegian Shipbrokers’ Association. All rights reserved. Published by BIMCO. No part of this BIMCO SmartCon document may be
copied, reproduced or distributed in any form without the prior written permission of the Norwegian Shipbrokers’ Association. Explanatory notes
are available from BIMCO at www.bimco.org. Adopted by BIMCO in 1956, revised 1966, 1983, 1986/87, 1993 and 2012.

345
immediately.
346
Should the Sellers fail to give Notice of Readiness by the Cancelling Date or fail to be ready to
347
validly complete a legal transfer as aforesaid they shall make due compensation to the Buyers
348
for their loss and for all expenses together with interest if their failure is due to proven
349
negligence and whether or not the Buyers cancel this Agreement.
350 15.
Buyers’ representatives
351
After this Agreement has been signed by the Parties and the Deposit has been confirmed as lodged, the
352
Buyers have the right to place two (2) representatives on board the Vessel during the last voyage prior
Vessel’s intended delivery at their sole risk and
353
expense and subject to the requirements of the Sellers and/or Ship Manager in relation to Covid-19
or any other safety precaution.
Once at port of delivery and on delivery only, Buyers to have the right place one (1) further Buyers’
representative onboard, to assist with the delivery procedure, subject always to vessel’s safe
manning and local regulations.
354
These representatives are on board for the purpose of familiarisation and in the capacity of
355
observers only, and they shall not interfere in any respect with the operation of the Vessel. The
356
Buyers and the Buyers’ representatives shall sign the Sellers’ P&I Club’s standard letter of
357
indemnity prior to their embarkation and the Buyers shall pay US$20 per day per representative for
victualling plus any communication expenses at cost as presented by the Seller at the time of delivery. All
Buyers’ representatives that are due to board the Vessel shall a) be seamen and members of the Buyers’
crew; and b) sign Sellers’ P&I Club’s standard Letter of Indemnity prior boarding the Vessel.
The Buyers’ representatives while on board the Vessel shall at all times comply and follow Sellers’ Covid-
19 and epidemic safety procedures.
 
358 16.
Law and Arbitration
359
(a) *This Agreement shall be governed by and construed in accordance with English law and
360
any dispute arising out of or in connection with this Agreement shall be referred to arbitration in
361
London in accordance with the Arbitration Act 1996 or any statutory modification or re-
362
enactment thereof save to the extent necessary to give effect to the provisions of this Clause.
 
363
The arbitration shall be conducted in accordance with the London Maritime Arbitrators
364
Association (LMAA) Terms current at the time when the arbitration proceedings are
365
commenced.
366
The reference shall be to three arbitrators. A party wishing to refer a dispute to arbitration shall
367
appoint its arbitrator and send notice of such appointment in writing to the other party requiring
368
the other party to appoint its own arbitrator within fourteen (14) calendar days of that notice and
369
stating that it will appoint its arbitrator as sole arbitrator unless the other party appoints its own
370
arbitrator and gives notice that it has done so within the fourteen (14) days specified. If the
371
other party does not appoint its own arbitrator and give notice that it has done so within the
372
fourteen (14) days specified, the party referring a dispute to arbitration may, without the
373
requirement of any further prior notice to the other party, appoint its arbitrator as sole arbitrator
374
and shall advise the other party accordingly. The award of a sole arbitrator shall be binding on
375
both Parties as if the sole arbitrator had been appointed by agreement.
376
In cases where neither the claim nor any counterclaim exceeds the sum of US$100,000 the
377
arbitration shall be conducted in accordance with the LMAA Small Claims Procedure current at
378
the time when the arbitration proceedings are commenced.
 
379
(b) *This Λgreement shall be governed by and construed in accordance with Title 9 of the
380
United States Code and the substantive law (not including the choice of law rules) of the State
Copyright © 2012 Norwegian Shipbrokers’ Association. All rights reserved. Published by BIMCO. No part of this BIMCO SmartCon document may be
copied, reproduced or distributed in any form without the prior written permission of the Norwegian Shipbrokers’ Association. Explanatory notes
are available from BIMCO at www.bimco.org. Adopted by BIMCO in 1956, revised 1966, 1983, 1986/87, 1993 and 2012.

381
of New York and any dispute arising out of or in connection with this Agreement shall be
382
referred to three (3) persons at New York, one to be appointed by each of the parties hereto,
383
and the third by the two so chosen; their decision or that of any two of them shall be final, and
384
for the purposes of enforcing any award, judgment may be entered on an award by any court of
385
competent jurisdiction. The proccedings shall be conductcd in accerdance with the rules of the
386
Society of Maritime Arbitrators, Inc.
387
In cases where neither the claim nor any counterclaim exceeds the sum of US$ 100,000 the
388
arbitration shall be conducted in accordance with the Shortened Arbitration Proecdure of the
389
Society of Maritime Arbitrators, Inc.
 
390
(c) This Agreement shall be governed by and construed in accordance with the laws of
391
(state place) and any dispute arising out of or in connection with this Agreement shall be
392
referred to arbitration at          (state place), subject to the procedures applicable there.
 
393
*16(a), 16(b) and 16(e) are alternatives; delete whichever is not applicable. In the absence of
394
deletions, alternative 16(a) shall apply.
395 17.
Notices
 
396
All notices to be provided under this Agreement shall be in writing.
397
Contact details for recipients of notices are as follows:
398
For the Buyers: Concord Voyage Limited
Unit 2406b 24/F Low Block, Grand Millennium Plaza, 181 Queen’s Rd, Central Sheung Wan, Hong Kong
399
For the Sellers: c/o PERFORMANCE SHIPPING MANAGEMENT INC.
373 Syngrou Ave. & 2-4 Ymittou str.
17564, Palaio Faliro, Athens, Greece
Tel: +
Email: 
 
400 18.
Entire Agreement
401
The written terms and conditions of this Agreement comprise the entire agreement between the Buyers and
402
the Sellers in relation to the sale and purchase of the Vessel and supersede all previous
403
agreements whether oral or written between the Parties in relation thereto to the subject matter of this
Agreement.
 
404
Each of the Parties acknowledges that in entering into this Agreement it has not relied on and
405
shall have no right or remedy in respect of any condition, covenant, promise, term, statement, representation, assurance or
406
warranty (whether or not made negligently) other than as is expressly set out in this Agreement.
407
Any terms condition, covenant, promise, terms, statement, representation, assurance or warranty capable
of being implied into this Agreement by any applicable statute or law are custom, practice, statute
(including without limitation, the Sale of Goods Act or any statutory modification or re-enactment
thereof), or law is hereby excluded to
408
the extent that such exclusion can legally be made. Nothing in this Clause shall limit or exclude
409
any liability for fraud.
19. Confidentiality
Copyright © 2012 Norwegian Shipbrokers’ Association. All rights reserved. Published by BIMCO. No part of this BIMCO SmartCon document may be
copied, reproduced or distributed in any form without the prior written permission of the Norwegian Shipbrokers’ Association. Explanatory notes
are available from BIMCO at www.bimco.org. Adopted by BIMCO in 1956, revised 1966, 1983, 1986/87, 1993 and 2012.

All details of this transaction to be kept strictly private and confidential. This Agreement and its negotiation and terms (the “Confidential Information”) are private
and confidential between the Buyers, the Sellers and their affiliates, and the Parties or their affiliates shall not disclose Confidential Information to any other person
without the prior written consent of the disclosing party, provided that nothing in this clause shall preclude a party from disclosing Confidential Information:
 
1. to the ultimate shareholders of such party, its affiliates and co-investors and its and their members, advisory committee members, directors, officers, employees,
consultants, agents, representatives, professional advisers, insurers, auditors, financiers and to the Vessel’s technical and commercial managers (collectively, the
“Nominated Representatives”);
2. to the extent required in connection with the employment of the vessel, to the Vessel’s actual or potential charterers;
3. to the extent required by law or regulation or any governmental or other authority, or the rules of any relevant stock exchange, indicatively the US SEC and NASDAQ;
4. for financing and registration purposes of the Vessel; or
5. which is in the public domain, other than as a result of breach of this clause by or through such party. Should however details of the sale become known or reported on
the market, neither the Buyers nor the Sellers shall have the right to withdraw from the sale or to fail to fulfil their obligations under this Agreement.
 
20. Trade and Economic Compliance
Notwithstandingany other clause in this Agreement:-
a) The Buyers, for themselves and their holding companies, affiliates, associates, directors, senior executives and officers, and shareholders warrant, represent and
undertake to the Sellers, that at the date of entering into this Agreement and continuing until the Buyers have paid the purchase price in full andtaken possession of the
Vessel on delivery by the Sellers, neither the Buyers nor any person or entity on whose behalf or under whose direction the Buyers act or assist, nor any person or entity
who the Buyers may nominate to take delivery and transfer of title of the Vessel, or to facilitate any aspect of this transaction are designated pursuant to any trade and
economic sanctions, prohibitions or restrictions imposed by a Sanctions Authority, are 50% or more owned or controlled by any such person or entity, or based, organized
or resident in a country or territory whose government is the target of sanctions or that is the subject of comprehensive (i.e., country-wide or territory-wide) Sanctions
(including, as of the date of signature of this contract, Russia, the Donetsk People’s Republic, Luhansk People’s Republic and Crimea regions of Ukraine, Cuba, Iran,
North Korea, Venezuela, Belarus and Syria) (a “Sanctioned Entity”) and that entry into andperformance of this Agreement is not prohibited or restricted by, and will not
expose the Sellers, their managers, the Vessel or their employees to sanctions, prohibitions or restrictions under any trade or economic sanctions, prohibitions or
restrictions (“Sanctions”). For this purpose, a “Sanctions Authority” means the US, UN, EU, UK, Switzerland, any governmental agencies or
departments of the foregoing and any other applicable sanctions authority, applicable to Parties.
 
b) The Sellers, for themselves and their holding companies, affiliates, associates, directors, senior executives and officers, and shareholders warrant, represent and
undertake to the Buyers, that at the date of entering into this Agreement and continuing until the Buyers have paid the purchase price in full andtaken possession of the
Vessel on delivery by the Sellers, neither the Sellers nor any person or entity on whose behalf or under whose direction the Sellers act or assist, nor the Vessel are a
Sanctioned Entity and that entry into andperformance of this Agreement is not prohibited or restricted by, and will not expose the Buyers to Sanctions.
c) The Vessel is sold on condition that it, and its components, shall not be sold, transferred, released, exported, chartered, provided or used by the Buyers, or any
person deriving title or access to the Vessel under them, for any purpose or in any activity which would expose the Sellers, their managers, the Vessel or their
employees to Sanctions. The Buyers undertake that such provision will apply in case of the sale of the vessel to the next purchaser, however, Buyers cannot ensure
the application of this clause for subsequent transactions which are beyond their reasonable control. In the event the sale by the Buyers
Copyright © 2012 Norwegian Shipbrokers’ Association. All rights reserved. Published by BIMCO. No part of this BIMCO SmartCon document may be
copied, reproduced or distributed in any form without the prior written permission of the Norwegian Shipbrokers’ Association. Explanatory notes
are available from BIMCO at www.bimco.org. Adopted by BIMCO in 1956, revised 1966, 1983, 1986/87, 1993 and 2012.

to the next purchaser becomes subject to, or in violation of Sanctions, the Buyers shall notify the Sellers upon receipt of such info.
d) If at any time before delivery the Sellers become aware of any actual breach of the warranty, representation, undertaking and condition contained in paragraph (a)
or (c), the Sellers may cancel this Agreement by written notice to the Buyers, without liability to the Buyers, and shall be entitled to compensation for their proven
losses and all expenses they have incurred. The Buyers shall indemnify the Sellers, their managers and employees on demand against any and all sanctions,
prohibitions, restrictions, claims, loss or liability whatsoever and howsoever arising directly as a result of breach of the warranty, representation and undertaking
and condition contained in paragraph (a) or (c), whether or not the Sellers cancel this Agreement.
 
e) If at any time before delivery the Buyers become aware of any actual breach of the warranty, representation, undertaking and condition contained in paragraph (b),
the Buyers shall comply with Sanctions to which the Buyers or the Vessel are subject and follow any orders or directions which may be given by any Sanctions
Authority, acting with powers to compel compliance and irrespective of any such orders, directions, laws or regulations, the Buyers are entitled to compensation for
their proven direct losses and expenses they have incurred due to such a breach whether or not they cancel this Agreement.
f) No act or omission of the Sellers shall at any time constitute a waiver of this Clause 20; and the warranties, representations and undertakings contained in this
Clause 20 are deemed repeated and remain in effect before and after delivery, whether or not delivery occurs. g) Notwithstandinganything in this clause to the
contrary, Buyers and Sellers shall not be required to do anything which constitutes a violation of the Sanctions laws and regulations to which either of them is
subject. The Buyers shall complete the Ship Sale Questionnaire as set out in Schedule C hereto and the Counterparty Questionnaire which will be sent by the
Sellers to Buyer’s e-mail address as provided in Clause 17 of this Agreement as soon as practicable after the date of this Agreement and in any event before delivery
of the Vessel, failing which the Sellers shall have the right to terminate this Agreement by written notice to the Buyers, without anyliability to the Buyers, and shall
be entitled to compensation for their proven losses and all expenses they have incurred. Buyer’s response and warranties therein are deemed correct, valid and
repeated at the time of Delivery.
 
21. Anti-Corruption Obligation
(a)          Buyers and Sellers each agree, undertake and warrant to the other on a continuing basis that:
 
(i)          that it complies with the Bribery Act 2010 of the United Kingdom, the United States Foreign Corrupt Practices Act of 1977 and any anti-corruption laws and
statutes, rules or regulations issued, administered or enforced by Greece, United Kingdom, the United States of America, or any other jurisdiction in which the
Sellers or Buyers conduct business or operations and any related or similar rules, regulations or guidelines, issued, administered or enforced by any applicable
government entity or proceeding by or before any applicable court or government entity.
(ii)          in connection with the MOA each Party will comply with all applicable anti-corruption legislation and have procedures in place that are, to the best of its
knowledge and belief, designed to prevent the commission of any offence under such legislation by any member of its organisation or by any person or entity
providing services for it or on its behalf in connection with this MOA; and
(iii)          in connection with the negotiation of this MOA neither it nor any member of its organisation has committed any breach of applicable anti-corruption
legislation.
 
(b)          If at any time before delivery the Buyers have breached any applicable anti-corruption legislation in connection with this MOA, the Sellers may cancel this
MOA by written notice to the Buyers, without liability to the Sellers, and shall be entitled to compensation for their proven losses and all expenses they have
incurred. The Sellers shall be under no obligation to procure the return of the Deposit (or any interest thereon) to the Buyers; and the Deposit shall be released to
the Sellers if and to the extent that
Copyright © 2012 Norwegian Shipbrokers’ Association. All rights reserved. Published by BIMCO. No part of this BIMCO SmartCon document may be
copied, reproduced or distributed in any form without the prior written permission of the Norwegian Shipbrokers’ Association. Explanatory notes
are available from BIMCO at www.bimco.org. Adopted by BIMCO in 1956, revised 1966, 1983, 1986/87, 1993 and 2012.

release of the Deposit is permitted under the applicable national, international and supranational anti-corruption laws and regulations. The Buyers shall defend and
indemnify Sellers against any and all fines, penalties, claims, proven losses, damages, costs (including, without limitation, court fees and legal costs), expenses and
liabilities whatsoever and howsoever arising directly as a result of such breach, whether or not the Sellers cancel this MOA.
 
(c)    If at any time before delivery the Sellers have breached any applicable anti-corruption legislation in connection with this MOA, the Buyers may cancel this
MOA (as per lines 343-344) by written notice to the Sellers, without liability to the Buyers, and in addition to that they should be entitled to compensation for their
proven direct losses and expenses they have incurred as a result of such breach.
 
(d)      Any such right to terminate must be exercised without undue delay.
 
22.  Sanctions Clause
The Buyers and Sellers each represent, warrant and undertake to each other that at the date of entering into this Agreement and continuing until the Buyers have
paid the purchase price in full and taken possession of the Vessel on delivery by the Sellers neither they nor any of their holding companies, affiliates or directors,
senior executives or officers, or to their knowledge, any person on whose behalf they are acting in connection with this Agreement, is an individual or entity
(“Person”) that is, or is 50% or more owned or controlled by, a Person (or Persons) that is the subject of any economic or financial sanctions or trade embargoes
administered or enforced by the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) the U.S. Departments of State or Commerce, the
United Nations Security Council (“UNSC”), the European Union (“EU”), Switzerland, the United Kingdom (“UK”) or other applicable sanctions authority
(collectively, “Sanctions”) or based, organized or resident in a country or territory that is the subject of comprehensive (i.e., country-wide or territory-wide)
Sanctions (including, as of the date of signature of this contract, Russia, Crimea, Cuba, Iran, North Korea, Venezuela, Belarus and Syria). If at any time during the
performance of this Agreement either party becomes aware that the other party is in breach of warranty as aforesaid, the party not in breach may terminate this
Agreement forthwith. The party in breach shall be liable to indemnify the other party against any and all claims, losses, damage, costs and fines whatsoever suffered
by the other party resulting from any breach of warranty as aforesaid and in accordance with this Agreement.
 
This Clause 22 to read in conjunction with Clause 20 above.
 
23. Onward Trading Clause
 
Buyers represent and warrant that:
a)      Buyers are purchasing the Vessel for continued operation, and
b)      Buyers have no intentions or plans to recycle the Vessel within the 12 months following delivery to the Buyers under this Agreement (unless the Vessel is declared a
casualty by her insurers).
 
However should he Buyers’ intentions or plans change, the Buyers undertake and warrant that the Vessel shall be recycled in compliance with the applicable
laws/regulations/conventions in relations to the recycling of Vessels and/or the disposal of waste including but not limited to the Regulation (EU)No. 1257/2013 of the
European Parliament and of the Council of 20 November 2013 on ship recycling (the EU Ship Recycling Regulation) and the Hong Kong international Convention for
the Sale and Environmentally Sound Recycling of Ships.
 
c. If the Buyers are in in breach of the above provisions, they will compensate the Sellers for any loss or expense suffered by them or related companies in the Sellers’
group and/or the Vessel’s present managers.
 
24.
No assignment and transfer
No Party shall assign or transfer any of its rights or obligations under this Agreement without the prior written consent of the other Party. Save as expressly provided
elsewhere in this Agreement, no person
Copyright © 2012 Norwegian Shipbrokers’ Association. All rights reserved. Published by BIMCO. No part of this BIMCO SmartCon document may be
copied, reproduced or distributed in any form without the prior written permission of the Norwegian Shipbrokers’ Association. Explanatory notes
are available from BIMCO at www.bimco.org. Adopted by BIMCO in 1956, revised 1966, 1983, 1986/87, 1993 and 2012.

who is not a party to this Agreement shall have any right under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Agreement.
 
25. Anti- Money Laundering
Each Party warrants that from the date of this Agreement and on a continuing basis that it complies with any anti-money laundering and anti-corruption laws and
statutes, rules or regulations issued, administered or enforced by Greece, United Kingdom, the United States of America, or any other jurisdiction in which the
Sellers or Buyers conduct business or operations and any related or similar rules, regulations or guidelines, issued, administered or enforced by any applicable
government entity or proceeding by or before any applicable court or government entity and ensure it has instituted and maintained procedures designed to promote
and achieve compliance with such laws. In the event of breach of the aforesaid warranty, the non-breaching party shall have the right to terminate this Agreement
with no liability to the other party.
 
26. Disease
For the purposes of this clause “Disease” means COVID-19 (any mutation of COVID-19 and/or any other disease for which restrictions apply). “Restrictions”
means any mandatory order of authorities or other circumstances that relate to the Disease that prevent either:
(i) the Sellers’ master, officers or crew disembarking from the Vessel and travelling from the place of delivery to their country of residence; or
 
(ii) the Buyers’ master, officers or crew travelling to the place of delivery from their country of residence or boarding the vessel at the time of delivery. Pursuant to
Clause 5, the Sellers’ nominated intended place of delivery shall be a port/place where, according to the information provided to the Sellers at/before
the time of its nomination, there are no restrictions as per above at the time of nomination.
(a) If, prior to the arrival of the Vessel at the intended place of delivery, the Sellers reasonably believe that they will be unable to deliver or the Buyers reasonably
believe that they will be unable to take delivery of the Vessel at the intended place of delivery due to Restrictions, then the party affected shall notify the other party
without delay, and in any event no later than the day the Sellers’ give their three (3) day notice pursuant to Clause 5 of this Agreement. Then Sellers and Buyers shall
discuss in good faith and cooperate in order to quickly find the best/nearest “Alternative Place of Delivery”. In such event, the Cancelling Date shall be extended by
the time taken for the Vessel to move from her location at the time of the new nomination until she arrives at the Alternative Place of Delivery.
 
(b) If, after the arrival of the Vessel at the intended place of delivery, such place suddenly becomes subject to Restrictions, the Sellers shall nominate, and move the
Vessel to, an Alternative Place of Delivery, and the Sellers shall keep the Buyers advised about the expected new delivery date, but no new pre-delivery notices shall be
required to be given by the Sellers. The Cancelling Date shall be extended by the additional time required for such repositioning of the Vessel (as advised by the
Sellers, acting reasonably). In case the restrictions come into place after Sellers have tendered Notice of readiness, such Notice of Readiness shall not be considered
valid until the vessel is moved to “Alternate Place of
Delivery” and Notice of Readiness tendered again.
 
(c) Any additional bunkers consumed arising from the Vessel proceeding to an Alternative Place of Delivery instead of the place of deliver originally
nominated in accordance with Clause 5 shall be shared on a 50:50 basis, against presentation of reasonable supporting documentation.
 
(d) If the Vessel or its crew is/are quarantined at any place, then all time in connection with such quarantine shall
automatically extend the Cancelling Qate by the period required for the Vessel or the crew to be released from
quarantine.
 
/s/ Andreas Nikolaos Michalopoulos
/s/ Elzod Erkinjonov
For and on behalf of the Sellers
For and on behalf of the Buyers
 
Name: Andreas Nikolaos Michalopoulos
Name: Elzod Erkinjonov
Title: Attorney-in-fact
Title: Director
Copyright © 2012 Norwegian Shipbrokers’ Association. All rights reserved. Published by BIMCO. No part of this BIMCO SmartCon document may be
copied, reproduced or distributed in any form without the prior written permission of the Norwegian Shipbrokers’ Association. Explanatory notes
are available from BIMCO at www.bimco.org. Adopted by BIMCO in 1956, revised 1966, 1983, 1986/87, 1993 and 2012.

Exhibit 8.1
List of Subsidiaries as at December 31, 2024
Name of Subsidiary
Place of Incorporation
Performance Shipping Management Inc. (ex Unitized Ocean Transport Limited)
Marshall Islands
 
 
Taburao Shipping Company Inc.
Marshall Islands
 
 
Tarawa Shipping Company Inc.
Marshall Islands
 
 
Arno Shipping Company Inc.
Marshall Islands
 
 
Maloelap Shipping Company Inc.
Marshall Islands
 
 
Garu Shipping Company Inc.
Marshall Islands
 
 
Bock Shipping Company Inc.
Marshall Islands
 
 
Arbar Shipping Company Inc.
Marshall Islands
 
 
Nakaza Shipping Company Inc.
Marshall Islands
 
 
Sri Lanka Shipping Company Inc.
Marshall Islands
 
 
Guadeloupe Shipping Company Inc.
Marshall Islands
 
 
Toka Shipping Company Inc.
Marshall Islands
 
 
Saint Barth Shipping Company Inc.
Marshall Islands
 
 
Mustique Shipping Company Inc.
Marshall Islands
 
 
Rongelap Shipping Company Inc.
Marshall Islands
 
 
Rongerik Shipping Company Inc.
Marshall Islands
 
 
Utirik Shipping Company Inc.
Marshall Islands
 
 
Oruk Shipping Company Inc.
Marshall Islands
 
 
Performance Shipping USA LLC
Delaware, USA

Exhibit 12.1
CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER
I, Andreas Michalopoulos, certify that:
1.           I have reviewed this annual report on Form 20-F of Performance Shipping Inc. (the “Company”);
2.          Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.          Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of
operations and cash flows of the Company as of, and for, the periods presented in this report;
4.          The Company's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:
(a)         Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material
information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is
being prepared;
(b)        Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles;
(c)          Evaluated the effectiveness of the Company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)         Disclosed in this report any change in the Company's internal control over financial reporting that occurred during the period covered by the annual report that has
materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting; and
5.          The Company's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company's auditors and
the audit committee of the Company's board of directors (or persons performing the equivalent functions):
(a)          All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect
the Company's ability to record, process, summarize and report financial information; and
(b)         Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal control over financial reporting.
Date: April 16, 2025
/s/ Andreas Michalopoulos
Andreas Michalopoulos
Chief Executive Officer, Director and Secretary (Principal Executive Officer)

Exhibit 12.2
CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICER
I, Anthony Argyropoulos, certify that:
1.          I have reviewed this annual report on Form 20-F of Performance Shipping Inc. (the “Company”);
2.          Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.          Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of
operations and cash flows of the Company as of, and for, the periods presented in this report;
4.          The Company's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:
(a)         Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material
information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is
being prepared;
(b)        Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles;
(c)          Evaluated the effectiveness of the Company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)         Disclosed in this report any change in the Company's internal control over financial reporting that occurred during the period covered by the annual report that has
materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting; and
5.          The Company's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company's auditors and
the audit committee of the Company's board of directors (or persons performing the equivalent functions):
(a)         All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect
the Company's ability to record, process, summarize and report financial information; and
(b)        Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal control over financial reporting.
Date: April 16, 2025
/s/ Anthony Argyropoulos
Anthony Argyropoulos
Chief Financial Officer (Principal Financial Officer)

Exhibit 13.1
 
PRINCIPAL EXECUTIVE OFFICER CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350
 
In connection with this Annual Report of Performance Shipping Inc. (the “Company”) on Form 20-F for the year ended December 31, 2024 as filed with the Securities and Exchange
Commission (the “SEC”) on or about the date hereof (the “Report”), I, Andreas Michalopoulos, Chief Executive Officer, Director and Secretary of the Company, certify, pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
 
(1)
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
 
(2)
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
 
A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the SEC or its staff upon request.
 
Date: April 16, 2025
/s/Andreas Michalopoulos
Andreas Michalopoulos
Chief Executive Officer, Director and Secretary (Principal Executive Officer)

Exhibit 13.2
PRINCIPAL FINANCIAL OFFICER CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350
 
In connection with this Annual Report of Performance Shipping Inc. (the “Company”) on Form 20-F for the year ended December 31, 2024 as filed with the Securities and Exchange
Commission (the “SEC”) on or about the date hereof (the “Report”), I, Anthony Argyropoulos, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
 
 
(1)
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
 
 
(2)
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
 
A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the SEC or its staff upon request.
 
Date: April 16, 2025
/s/ Anthony Argyropoulos
Anthony Argyropoulos
Chief Financial Officer (Principal Financial Officer)

Exhibit 15.1
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in the following Registration Statements:
(1)
Registration Statement (Form F-3 No. 333-271398) of Performance Shipping Inc.,
(2)
Registration Statement (Form F-3 No. 333-266946) of Performance Shipping Inc., and
(3)
Registration Statement (Form F-3 No. 333-197740) of Performance Shipping Inc.;
of our report dated April 16, 2025, with respect to the consolidated financial statements of Performance Shipping Inc. included in this Annual Report (Form 20-F) of Performance Shipping
Inc. for the year ended December 31, 2024.
/s/ Ernst & Young (Hellas) Certified Auditors Accountants S.A.
Athens, Greece
April 16, 2025

Exhibit 15.2
CONSENT OF WATSON FARLEY & WILLIAMS LLP
Reference is made to the annual report on Form 20-F of Performance Shipping Inc. (the “Company”) for the year ended December 31, 2024 (the “Annual Report”) and the registration
statements on Form F-3 (Registration No. 333-271398, Registration No. 333-266946 and Registration No. 333-197740) of the Company, including the prospectuses contained therein (the
“Registration Statements”). We hereby consent to (i) the filing of this letter as an exhibit to the Annual Report, which is incorporated by reference into the Registration Statements and
(ii) each reference to us and the discussions of advice provided by us in the Annual Report under the section “Item 10. Additional Information-E. Taxation” and to the incorporation by
reference of the same in the Registration Statements, in each case, without admitting we are “experts” within the meaning of the Securities Act of 1933, as amended, or the rules and
regulations of the U.S. Securities and Exchange Commission promulgated thereunder with respect to any part of the Registration Statements.
/s/ Watson Farley & Williams LLP
Watson Farley & Williams LLP
New York, New York
April 16, 2025