TOP Ships Inc.
Annual Report 2013

Plain-text annual report

Morningstar® Document Research℠ FORM 20-FTOP SHIPS INC. - TOPSFiled: February 14, 2014 (period: December 31, 2013)Annual and transition report of foreign private issuers under sections 13 or 15(d)The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The userassumes all risks for any damages or losses arising from any use of this information, except to the extent such damages or losses cannot belimited or excluded by applicable law. Past financial performance is no guarantee of future results. UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, 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[X]ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2013OR[ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from _________________ to _________________OR[ ]SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934Date of event requiring this shell company report _________________Commission file number 000-50859TOP SHIPS INC.(Exact name of Registrant as specified in its charter) (Translation of Registrant's name into English) Republic of the Marshall Islands(Jurisdiction of incorporation or organization) 1 Vas. Sofias and Meg. Alexandrou Str, 15124 Maroussi, Greece(Address of principal executive offices) Alexandros Tsirikos, (Tel) +30 210 812 8180, atsirikos@topships.org, (Fax) +30 210 614 1273, 1 Vas.Sofias and Meg. Alexandrou Str, 15124 Maroussi, Greece (Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person) Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Securities registered or to be registered pursuant to Section 12(b) of the Act.Title of each class Name of each exchangeon which registered Common Stock par value $0.01 per share Nasdaq Global Select MarketSecurities 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, 2013, 17,287,534 shares of Common Stock, par value $0.01 per share, were outstanding.Indicate by check mark if the registrant is well-known seasoned issuer, as defined in Rule 405 of the Securities Act.Yes NoX 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 theSecurities Exchange Act of 1934. Yes NoX 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 1934from 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 duringthe 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 requirementsfor the past 90 days. Yes X No Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required tobe submitted and posted pursuant to Rule 405 of Regulation S-T (Sec.232.405 of this chapter) during the preceding 12 months (or for such shorter period thatthe registrant was required to submit and post such files). Yes X No Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer. See the definitions of "large acceleratedfiler" and "accelerated filer" in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer oAccelerated filer o Non-accelerated filer x Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:XU.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 NoX Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. TABLE OF CONTENTSPagePART I ITEM 1.IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS 1 ITEM 2.OFFER STATISTICS AND EXPECTED TIMETABLE 1 ITEM 3.KEY INFORMATION 1 ITEM 4.INFORMATION ON THE COMPANY30 ITEM 4A.UNRESOLVED STAFF COMMENTS 47 ITEM 5.OPERATING AND FINANCIAL REVIEW AND PROSPECTS 47 ITEM 6.DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES 80 ITEM 7.MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS 84 ITEM 8.FINANCIAL INFORMATION. 87 ITEM 9.THE OFFER AND LISTING. 88 ITEM 10.ADDITIONAL INFORMATION 90 ITEM 11.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 102 ITEM 12.DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES 104 PART II ITEM 13.DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES105 ITEM 14.MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS 105 ITEM 15.CONTROLS AND PROCEDURES 105 ITEM 16A.AUDIT COMMITTEE FINANCIAL EXPERT 107 ITEM 16B.CODE OF ETHICS 107 ITEM 16C.PRINCIPAL AUDITOR FEES AND SERVICES 107 ITEM 16D.EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES 107 ITEM 16E.PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS 107 ITEM 16F.CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT 108 ITEM 16G.CORPORATE GOVERNANCE 108 ITEM 16H.MINE SAFETY DISCLOSURE109 PART III ITEM 17.FINANCIAL STATEMENTS 109 ITEM 18.FINANCIAL STATEMENTS 109 ITEM 19.EXHIBITS109 Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTSMatters discussed in this report may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safeharbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-lookingstatements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements,which are other than statements of historical facts. Top Ships Inc. desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including thiscautionary statement in connection with this safe harbor legislation. This report and any other written or oral statements made by us or on our behalf mayinclude forward-looking statements, which reflect our current views with respect to future events and financial performance. When used in this report, thewords "anticipate," "believe," "expect," "intend," "estimate," "forecast," "project," "plan," "potential," "may," "should," and similar expressions identifyforward-looking statements. The forward-looking statements in this report are based upon various assumptions, many of which are based, in turn, upon further assumptions,including without limitation, management's examination of historical operating trends, data contained in our records and other data available from thirdparties. Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertaintiesand contingencies which are difficult or impossible to predict and are beyond our control, we cannot assure you that we will achieve or accomplish theseexpectations, beliefs or projections. In addition to these assumptions and matters discussed elsewhere herein and in the documents incorporated by reference herein, important factorsthat, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the strength of worldeconomies and currencies, general market conditions, including fluctuations in charterhire rates and vessel values, changes in demand in the shippingmarket, including the effect of changes in OPEC's petroleum production levels and worldwide oil consumption and storage, changes in regulatoryrequirements affecting vessel operating including requirements for double hull tankers, changes in our operating expenses, including bunker prices, dry-docking and insurance costs, changes in governmental rules and regulations or actions taken by regulatory authorities, changes in the price of our capitalinvestments, potential liability from pending or future litigation, general domestic and international political conditions, potential disruption of shipping routesdue to accidents, political events or acts by terrorists, and other important factors described from time to time in the reports filed by us with the Securities andExchange Commission, or the SEC. Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 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 Unless the context otherwise requires, as used in this report, the terms "Company," "we," "us," and "our" refer to Top Ships Inc. and all of itssubsidiaries, and "Top Ships Inc." refer only to Top Ships Inc. and not to its subsidiaries. We use the term deadweight ton or dwt, in describing the sizeof vessels. Dwt, expressed in metric tons each of which is equivalent to 1,000 kilograms, refers to the maximum weight of cargo and supplies that avessel can carry. Throughout this annual report, the conversion from Euros to U.S. dollars is based on the U.S. dollar/Euro exchange rate of 1.379 asof December 31, 2013, unless otherwise specified. A. Selected Financial Data The following table sets forth our selected historical consolidated financial data and other operating data for the years ended December 31, 2009,2010, 2011, 2012 and 2013. The following information should be read in conjunction with "Item 5. Operating and Financial Review and Prospects" and theconsolidated financial statements and related notes included herein. The following selected historical consolidated financial data is derived from ourconsolidated financial statements and notes thereto, which have been prepared in accordance with U.S. generally accepted accounting principles, or GAAP,and have been audited by Deloitte, Hadjipavlou, Sofianos & Cambanis S.A., or Deloitte, an independent registered public accounting firm. 1Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Year Ended December 31, U.S. Dollars in thousands, except per share data 2009 2010 2011 2012 2013 STATEMENT OF COMPREHENSIVE INCOME/(LOSS) Revenues 107,979 90,875 79,723 31,428 20,074 Other Income - - 872 - - Voyage expenses 3,372 2,468 7,743 1,023 663 Charter hire expense 10,827 480 2,380 - - Amortization of deferred gain on sale and leaseback of vesselsand write-off of seller's credit (7,799) - - - - Lease termination expense 15,391 - 5,750 - - Vessel operating expenses 23,739 12,853 10,368 814 745 Dry-docking costs 4,602 4,103 1,327 - - Management fees-third parties 419 159 439 - - Management fees-related parties - 3,131 5,730 2,345 1,351 General and administrative expenses 23,416 18,142 15,364 7,078 3,258 (Gain)/Loss on sale of vessels - (5,101) 62,543 - (14)Vessel Depreciation 31,585 32,376 25,327 11,458 6,429 Impairment on vessels 36,638 - 114,674 61,484 - (Gain) on disposal of subsidiaries - - - - (1,591) Operating (loss)/income (34,211) 22,264 (171,050) (52,774) 9,233 Interest and finance costs (13,969) (14,776) (16,283) (9,345) (7,443)Loss on derivative financial instruments (2,081) (5,057) (1,793) (447) (171)Interest income 235 136 95 175 131 Other (expense) income, net (170) (54) (81) (1,593) (342) Net (loss) income (50,196) 2,513 (189,112) (63,984) 1,408 Other Comprehensive income / (loss) 64 (51) - - - Comprehensive (loss)/income (50,132) 2,462 (189,112) (63,984) 1,408 (Loss) earnings per share, basic and diluted $(17.78) $0.82 $(29.99) $(3.77) $0.08 Weighted average common shares outstanding, basic 2,823,059 3,075,278 6,304,679 16,989,585 17,061,530 Weighted average common shares outstanding, diluted 2,823,059 3,077,741 6,304,679 16,989,585 17,111,530 2Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Year Ended December 31, U.S. dollars in thousands, except fleet data and averagedaily results 2009 2010 2011 2012 2013 BALANCE SHEET DATA Current assets 3,787 3,420 14,866 26,735 10,262 Total assets 675,149 622,091 296,373 211,415 27,868 Current liabilities, including current portion of long-term debt 427,953 366,609 219,690 193,630 8,605 Non-Current liabilities - - - 4,706 3,906 Total debt 399,087 337,377 193,749 172,619 - Common stock 311 322 171 172 174 Stockholders' equity 247,196 255,482 76,684 13,079 14,795 FLEET DATA Total number of vessels at end of period 13.0 13.0 7.0 7.0 0.0 Average number of vessels(1) 13.7 13.1 11.7 7.0 5.1 Total calendar days for fleet(2) 5,008 4,781 4,281 2,562 1,852 Total available days for fleet(3) 4,813 4,686 4,218 2,546 1,852 Total operating days for fleet(4) 4,775 4,676 4,180 2,544 1,852 Total time charter days for fleet 2,841 2,076 1,109 124 - Total bareboat charter days for fleet 1,934 2,555 2,551 2,420 1,852 Total spot market days for fleet - 45 520 - - Fleet utilization(5) 99.20% 99.80% 99.1% 99.92% 100.00% AVERAGE DAILY RESULTS Time charter equivalent(6) $21,907 $18,907 $17,220 $11,951 $10,484 Vessel operating expenses(7) $4,740 $2,688 $2,422 $318 $402 General and administrative expenses(8) $4,676 $3,795 $3,589 $2,763 $1,759 (1)Average number of vessels is the number of vessels that constituted our fleet (including leased vessels) for the relevant period, as measured by the sum ofthe number of days each vessel was a part of our fleet during the period divided by the number of calendar days in that period. (2)Calendar days are the total days the vessels were in our possession for the relevant period. Calendar days are an indicator of the size of our fleet over therelevant period and affect both the amount of revenues and expenses that we record during that period. (3)Available days are the number of calendar days less the aggregate number of days that our vessels are off-hire due to scheduled repairs or scheduledguarantee inspections in the case of newbuildings, vessel upgrades or special or intermediate surveys and the aggregate amount of time that we spendpositioning our vessels. Companies in the shipping industry generally use available days to measure the number of days in a period during which vesselsshould be capable of generating revenues. We determined to use available days as a performance metric, for the first time, in the second quarter and firsthalf of 2009. We have adjusted the calculation method of utilization to include available days in order to be comparable with shipping companies thatcalculate utilization using operating days divided by available days. (4)Operating days are the number of available days in a period less the aggregate number of days that our vessels are off-hire due to unforeseencircumstances. The shipping industry uses operating days to measure the aggregate number of days in a period that our vessels actually generate revenue. (5)Fleet utilization is calculated by dividing the number of operating days during a period by the number of available days during that period. The shippingindustry uses fleet utilization to measure a company's efficiency in finding suitable employment for its vessels and minimizing the number of days thatits vessels are off-hire for reasons other than scheduled repairs or scheduled guarantee inspections in the case of newbuildings, vessel upgrades, special orintermediate surveys and vessel positioning. We used a new calculation method for fleet utilization, for the first time, in the second quarter and first halfof 2009. In all prior filings and reports, utilization was calculated by dividing operating days by calendar days. We have adjusted the calculation methodin order to be comparable with most shipping companies, which calculate utilization using operating days divided by available days. 3Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. (6)Time charter equivalent rate, or TCE rate, is a measure of the average daily revenue performance of a vessel on a per voyage basis. Our method ofcalculating TCE rate is consistent with industry standards and is determined by dividing time charter equivalent revenues or TCE revenues by operatingdays for the relevant time period. TCE revenues are revenues minus voyage expenses. Voyage expenses primarily consist of port, canal and fuel costs thatare unique to a particular voyage, which would otherwise be paid by the charterer under a time charter contract, as well as commissions. TCE revenuesand TCE rate, which are non-GAAP measures, provide additional meaningful information in conjunction with shipping revenues, the most directlycomparable GAAP measure, because it assists our management in making decisions regarding the deployment and use of our vessels and in evaluatingtheir financial performance. The table below reflects the reconciliation of TCE revenues to revenues as reflected in the consolidated statements ofoperations and our calculation of TCE rates for the periods presented. (7)Daily vessel operating expenses, which include crew costs, provisions, deck and engine stores, lubricating oil, insurance, maintenance and repairs arecalculated by dividing vessel operating expenses by fleet calendar days for the relevant time period. (8)Daily general and administrative expenses are calculated by dividing general and administrative expenses by fleet calendar days for the relevant timeperiod. The following table reflects reconciliation of TCE revenues to revenues as reflected in the consolidated statements of operations and calculation of the TCE rate(all amounts are expressed in thousands of U.S. dollars, except for total operating days and average daily time charter equivalent amounts).U.S. dollars in thousands, except for total operating daysand average daily time charter equivalent 2009 2010 2011 2012 2013 On a consolidated basis Revenues $107,979 $90,875 $79,723 $31,428 $20,074 Less: Voyage expenses (3,372) (2,468) (7,743) (1,023) (663) Time charter equivalent revenues $104,607 $88,407 $71,980 $30,405 $19,411 Total operating days 4,775 4,676 4,180 2,544 1,852 Average Daily Time Charter Equivalent (TCE) $21,907 $18,907 $17,220 $11,951 $10,484 B. Capitalization and Indebtedness Not Applicable. C. Reasons for the Offer and Use of Proceeds Not Applicable.D. Risk FactorsThe following risks relate principally to the industry in which we operate and our business in general. Any of these risk factors could materially andadversely affect our business, financial condition or operating results and the trading price of our common stock. RISKS RELATED TO OUR INDUSTRY Our earnings may be adversely affected if we do not successfully employ our vessels once they are delivered. Given current market conditions, we will seek to deploy our vessels on time and bareboat charters in a manner that will help us achieve a steady flowof earnings. Although period charters provide relatively steady streams of revenue as well as a portion of the revenues generated by the charterer's deploymentof the vessels in the spot market or otherwise, vessels committed to period charters may not be available for spot voyages during an upturn in the tanker ordrybulk industry cycle, as the case may be, when spot voyages might be more profitable. If we can't employ our vessels on profitable time charters or tradethem in the spot market profitably, our results of operations and operating cash flow may suffer if rates achieved are not sufficient to cover respective vesseloperating and financial expenses. 4Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. The international tanker and drybulk industries are both cyclical and volatile and this may lead to reductions and volatility in our charterrates when we re-charter our vessels, our vessel values and our results of operations. The international tanker and drybulk industries in which we operate are cyclical with attendant volatility in charter hire rates, vessel values andindustry profitability. For both tankers and drybulk vessels, the degree of charter rate volatility among different types of vessels has varied widely. If we enterinto a charter when charter rates are low, our revenues and earnings will be adversely affected. In addition, a decline in charter hire rates likely will cause thevalue of our vessels to decline. Changes in spot rates and time charters can not only affect the revenues we will receive from operations, but can also affect the value of our vessels,even if they are employed under long-term time charters. Our ability to re-charter our vessels on the expiration or termination of their time or bareboat chartersand the charter rates payable under any renewal or replacement charters will depend upon, among other things, economic conditions in the tanker and drybulkmarket. Fluctuations in charter rates and vessel values result from changes in the supply and demand for vessels. Factors affecting the supply and demandfor our vessels are outside of our control and are unpredictable. The nature, timing, direction and degree of changes in tanker and drybulk industry conditionsare also unpredictable. Factors that influence demand for tanker and drybulk vessel capacity include: ·supply and demand for (i) refined petroleum products and crude oil for tankers and (ii) drybulk commodities for drybulk vessels; ·changes in (i) crude oil production and refining capacity and (ii) drybulk commodity production and resulting shifts in trade flows forcrude oil and petroleum products and trade flows of drybulk commodities; ·the location of regional and global crude oil refining facilities and drybulk commodities markets that affect the distance commodities are tobe moved by sea; ·global and regional economic and political conditions, including developments in international trade, fluctuations in industrial andagricultural production, and armed conflicts, terrorist activities and strikes; ·environmental and other legal and regulatory developments; ·currency exchange rates; ·weather, natural disasters and other acts of God, including hurricanes and typhoons; ·competition from alternative sources of energy and for other shipping companies and other modes of transportation; and ·international sanctions, embargoes, import and export restrictions, nationalizations, piracy and wars. The factors that influence the supply of ocean-going vessel capacity include: ·the number of newbuilding deliveries; ·current and expected purchase orders for vessels; ·the scrapping rate of older vessels; ·vessel freight rates; ·the price of steel and vessel equipment; ·technological advances in the design and capacity of vessels; ·potential conversion of vessels to alternative use; ·changes in environmental and other regulations that may limit the useful lives of vessels; ·port or canal congestion; 5Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. ·the number of vessels that are out of service at a given time; and ·changes in global crude oil and drybulk commodity production. The international tanker and drybulk shipping industries have experienced drastic downturns after experiencing historically highcharter rates and vessel values in early 2008, and a continued downturn in these markets may have an adverse effect on our earnings, impair thecarrying value of our vessels and affect compliance with our loan covenants. The Baltic Drybulk Index, or BDI, is a U.S. dollar daily average of charter rates that takes into account input from brokers around the worldregarding fixtures for various routes, dry cargoes and various drybulk vessel sizes and is issued by the London-based Baltic Exchange (an organizationproviding maritime market information for the trading and settlement of physical and derivative contracts). The BDI declined 94% in 2008 from a peak of11,793 in May 2008 to a low of 663 in December 2008 and has remained volatile since then. The BDI recorded a 25-year record low of 647 in 2012. Thedecline in charter rates was due to various factors, including the lack of trade financing for purchases of commodities carried by sea, which resulted in asignificant decline in cargo shipments, and the excess supply of iron ore in China, which resulted in falling iron ore prices and increased stockpiles inChinese ports and vessel oversupply. The decline in charter rates in the drybulk market affected the earnings, the value and, following periodic impairmentreviews, the carrying value of our drybulk vessels. As a result, this decline negatively affected asset values, cash flows and liquidity and hence compliancewith the covenants contained in our loan agreements. While the BDI has since increased to 1,398 as of January 16, 2014, there can be no assurance that thedrybulk charter market will increase further, and the market could decline. The Baltic Dirty Tanker Index, a U.S. dollar daily average of charter rates issued by the Baltic Exchange that takes into account input from brokersaround the world regarding crude oil fixtures for various routes and tanker vessel sizes, declined from a high of 2,347 in July 2008 to a low of 453 in mid-April 2009, which represents a decline of 80%. While the index rose to 1,222 as of January 16, 2014 there can be no assurance that the crude oil chartermarket will increase further, and the market could decline. The Baltic Clean Tanker Index fell from 1,509 points as of June 19, 2008, to 345 points as ofApril 4, 2009. The index rose to 908 as of December 23, 2011, but has since dropped again to 613 as of as of January 16, 2014. The dramatic decline incharter rates was due to various factors, including the significant fall in demand for crude oil and petroleum products, the consequent rising inventories ofcrude oil and petroleum products in the United States and in other industrialized nations and the corresponding reduction in oil refining, the dramatic fall inthe price of oil in 2008, and the restrictions on crude oil production that OPEC and other non-OPEC oil producing countries have imposed in an effort tostabilize the price of oil. Starting from 2009 and up to 2013, the above-mentioned factors affecting the Baltic Dirty and Clean Tanker Indices partiallysubsided, allowing for the modest recovery of rates and a stabilization of tanker vessel values; however, tanker vessel oversupply has suppressed anyincrease in rates or values due to increases in crude oil or oil product demand.A further decline in charter rates could have a material adverse effect on our business, financial condition and results of operations. If the charterrates in the tanker and drybulk market decline from their current levels, our future earnings may be adversely affected, we may have to record impairmentadjustments to the carrying values of our fleet and we may not be able to comply with the financial covenants in our loan agreements. The instability of the euro or the inability of countries to refinance their debts could have a material adverse effect on our revenue,profitability and financial position.As a result of the credit crisis in Europe, in particular in Greece, Cyprus, Italy, Ireland, Portugal and Spain, the European Commission created theEuropean Financial Stability Facility, or the EFSF, and the European Financial Stability Mechanism, or the EFSM, to provide funding to Eurozone countriesin financial difficulties that seek such support. In March 2011, the European Council agreed on the need for Eurozone countries to establish a permanentstability mechanism, the European Stability Mechanism, or the ESM, which was established on September 27, 2012 to assume the role of the EFSF and theEFSM in providing external financial assistance to Eurozone countries. Despite these measures, concerns persist regarding the debt burden of certain Eurozonecountries and their ability to meet future financial obligations and the overall stability of the euro. An extended period of adverse development in the outlook forEuropean countries could reduce the overall demand for oil and for drybulk cargoes and consequently for our services. These potential developments, ormarket perceptions concerning these and related issues, could affect our financial position, results of operations and cash flow.If economic conditions throughout the world do not improve, it will impede our operations. Negative trends in the global economy that emerged in 2008 continue to adversely affect global economic conditions. In addition, the world economycontinues to face a number of new challenges, including uncertainty related to continuing discussions in the United States regarding the federal debt ceilingand recent turmoil and hostilities in the Middle East, North Africa and other geographic areas and countries and continuing economic weakness in theEuropean Union. The deterioration in the global economy has caused, and may continue to cause, a decrease in worldwide demand for certain goods and,thus, shipping. We cannot predict how long the current market conditions will last. However, recent and developing economic and governmental factors,together with the concurrent decline in charter rates and vessel values, have had a material adverse effect on our results of operations, financial condition andcash flows, have caused the price of our common shares to decline and could cause the price of our common shares to decline further. 6Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. The economies of the United States, the European Union and other parts of the world continue to experience relatively slow growth or remain inrecession and exhibit weak economic trends. The credit markets in the United States and Europe have experienced significant contraction, deleveraging andreduced liquidity, and the U.S. federal government and state governments and European authorities continue to implement a broad variety of governmentalaction and/or new regulation of the financial markets. Global financial markets and economic conditions have been, and continue to be, severely disruptedand volatile. Since 2008, lending by financial institutions worldwide has remained at very low levels compared to the period proceeding 2008.Continued economic slowdown in the Asia Pacific region, especially in Japan and China, may exacerbate the effect on us of the recent slowdown inthe rest of the world. As a result, continued economic slowdown in the Asia Pacific region, especially in Japan and China, may have a material adverse effecton our business, financial position and results of operations, as well as our future prospects. Before the global economic financial crisis that began in 2008,China had one of the world's fastest growing economies in terms of gross domestic product, or GDP, which had a significant impact on shipping demand.The growth rate of China's GDP is estimated by government officials to average 7.6% for the year ended December 31, 2013, as compared to approximately7.8% for the year ended December 31, 2012, and continues to remain below pre-2008 levels. China has imposed measures to restrain lending, which mayfurther contribute to a slowdown in its economic growth. China and other countries in the Asia Pacific region may continue to experience slowed or evennegative economic growth in the future. Moreover, the current economic slowdown in the economies of the United States, the European Union and other Asiancountries may further adversely affect economic growth in China and elsewhere. Our financial condition and results of operations, as well as our futureprospects, would likely be impeded by a continuing or worsening economic downturn in any of these countries. We face risks attendant to changes in economic environments, changes in interest rates, and instability in the banking and securities markets aroundthe world, among other factors. We cannot predict how long the current market conditions will last. However, these recent and developing economic andgovernmental factors, together with the concurrent decline in charter rates and vessel values, may have a material adverse effect on our results of operationsand may cause the price of our common stock to decline. The current state of the global financial markets and current economic conditions may adversely impact our ability to obtain financing onacceptable terms and otherwise negatively impact our business. Global financial markets and economic conditions have been, and continue to be, volatile. Recently, operating businesses in the global economy havefaced tightening credit, weakening demand for goods and services, deteriorating international liquidity conditions, and declining markets. There has been ageneral decline in the willingness by banks and other financial institutions to extend credit, particularly in the shipping industry, due to the historically volatileasset values of vessels. As the shipping industry is highly dependent on the availability of credit to finance and expand operations, it has been negativelyaffected by this decline. Also, as a result of concerns about the stability of financial markets generally and the solvency of counterparties specifically, the cost of obtainingmoney from the credit markets has increased as many lenders have increased interest rates, enacted tighter lending standards, refused to refinance existing debtat all or on terms similar to current debt and reduced, and in some cases ceased, to provide funding to borrowers. Due to these factors, we cannot be certainthat financing will be available if needed and to the extent required, on acceptable terms. If financing is not available when needed, or is available only onunfavorable terms, we may be unable to meet our obligations as they come due or we may be unable to enhance our existing business, complete additionalvessel acquisitions or otherwise take advantage of business opportunities as they arise. If the current global economic environment persists or worsens, we may be negatively affected in the following ways: ·we may not be able to employ our vessels at charter rates as favorable to us as historical rates or at all or operate our vessels profitably; and ·the market value of our vessels could decrease, which may cause us to recognize losses if any of our vessels are sold or if their values areimpaired. The occurrence of any of the foregoing could have a material adverse effect on our business, results of operations, cash flows, financial conditionand ability to pay dividends. 7Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. We are subject to complex laws and regulations, including environmental regulations that can adversely affect the cost, manner orfeasibility of doing business. Our operations are subject to numerous laws and regulations in the form of international conventions and treaties, national, state and local laws andnational and international regulations in force in the jurisdictions in which our vessels will operate or are registered, which can significantly affect theownership and operation of our vessels. These regulations include, but are not limited to the International Convention for the Prevention of Pollution fromShips, or MARPOL, the International Convention on Load Lines of 1966, the International Convention on Civil Liability for Oil Pollution Damage of 1969,generally referred to as CLC, the International Convention on Civil Liability for Bunker Oil Pollution Damage, or Bunker Convention, the InternationalConvention for the Safety of Life at Sea of 1974, or SOLAS, the International Safety Management Code for the Safe Operation of Ships and for PollutionPrevention, or ISM Code, the International Convention for the Control and Management of Ships' Ballast Water and Sediments, or the BWM Convention, theU.S. Oil Pollution Act of 1990, or OPA, the Comprehensive Environmental Response, Compensation and Liability Act, or CERCLA, the U.S. Clean WaterAct, the U.S. Clean Air Act, the U.S. Outer Continental Shelf Lands Act, the U.S. Maritime Transportation Security Act of 2002, or the MTSA, andEuropean Union regulations. Compliance with such laws, regulations and standards, where applicable, may require installation of costly equipment oroperational changes and may affect the resale value or useful lives of our vessels. We may also incur additional costs in order to comply with other existingand future regulatory obligations, including, but not limited to, costs relating to air emissions, the management of ballast waters, maintenance and inspection,development and implementation of emergency procedures and insurance coverage or other financial assurance of our ability to address pollution incidents.These costs could have a material adverse effect on our business, results of operations, cash flows and financial condition. A failure to comply withapplicable laws and regulations may result in administrative and civil penalties, criminal sanctions or the suspension or termination of our operations.Environmental laws often impose strict liability for remediation of spills and releases of oil and hazardous substances, which could subject us toliability without regard to whether we were negligent or at fault. Under OPA, for example, owners, operators and bareboat charterers are jointly and severallystrictly liable for the discharge of oil within the 200-mile exclusive economic zone around the United States. Furthermore, the 2010 explosion of the DeepwaterHorizon and the subsequent release of oil into the Gulf of Mexico, or other events, may result in further regulation of the shipping industry, and modificationsto statutory liability schemes, which could have a material adverse effect on our business, financial condition, results of operations and cash flows. An oilspill could result in significant liability, including fines, penalties and criminal liability and remediation costs for natural resource damages under otherfederal, state and local laws, as well as third-party damages. We are required to satisfy insurance and financial responsibility requirements for potential oil(including marine fuel) spills and other pollution incidents. Although insurance covers certain environmental risks, there can be no assurance that suchinsurance will be sufficient to cover all such risks or that any claims will not have a material adverse effect on our business, results of operations, cash flowsand financial condition and our ability to pay dividends, if any, in the future. We are subject to international safety regulations and requirements imposed by classification societies and the failure to comply with theseregulations may subject us to increased liability, may adversely affect our insurance coverage and may result in a denial of access to, or detentionin, certain ports. The operation of our vessels is affected by the requirements set forth in the United Nations' International Maritime Organization's InternationalManagement Code for the Safe Operation of Ships and Pollution Prevention, or ISM Code. The ISM Code requires ship owners, ship managers and bareboatcharterers to develop and maintain an extensive "Safety Management System" that includes the adoption of a safety and environmental protection policy settingforth instructions and procedures for safe operation and describing procedures for dealing with emergencies. We expect that any vessels that we acquire in thefuture will be ISM Code-certified when delivered to us. The failure of a shipowner or bareboat charterer to comply with the ISM Code may subject it toincreased liability, may invalidate existing insurance or decrease available insurance coverage for the affected vessels and may result in a denial of access to, ordetention in, certain ports, including United States and European Union ports. In addition, the hull and machinery of every commercial vessel must be classed by a classification society authorized by its country of registry. Theclassification society certifies that a vessel is safe and seaworthy in accordance with the applicable rules and regulations of the country of registry of the vesseland the Safety of Life at Sea Convention. If a vessel does not maintain its class and/or fails any annual survey, intermediate survey or special survey, thevessel will be unable to trade between ports and will be unemployable, which will negatively impact our revenues and results from operations. 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, regulatoryframeworks to reduce greenhouse gas emissions. These regulatory measures may include, among others, adoption of cap and trade regimes, carbon taxes,increased efficiency standards, and incentives or mandates for renewable energy. In addition, although the emissions of greenhouse gases from internationalshipping currently are not subject to the Kyoto Protocol to the United Nations Framework Convention on Climate Change, a new treaty may be adopted in thefuture that includes restrictions on shipping emissions. Compliance with changes in laws, regulations and obligations relating to climate change could increaseour costs related to operating and maintaining our vessels and require us to install new emission controls, acquire allowances or pay taxes related to ourgreenhouse gas emissions, or administer and manage a greenhouse gas emissions program. Revenue generation and strategic growth opportunities may also beadversely affected. 8Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Adverse effects upon the oil and gas industry relating to climate change, including growing public concern about the environmental impact of climatechange, may also adversely affect demand for our services. For example, increased regulation of greenhouse gases or other concerns relating to climate changemay reduce the demand for oil and gas in the future or create greater incentives for use of alternative energy sources. Any long-term material adverse effect onthe oil and gas industry could have a significant financial and operational adverse impact on our business that we cannot predict with certainty at this time. Our vessels may suffer damage due to the inherent operational risks of the seaborne transportation industry and we may experienceunexpected dry-docking costs, which may adversely affect our business and financial condition. The operation of an ocean-going vessel carries inherent risks. Our vessels and their cargoes will be at risk of being damaged or lost because of eventssuch as marine disasters, bad weather and other acts of God, business interruptions caused by mechanical failures, grounding, fire, explosions andcollisions, human error, war, terrorism, piracy and other circumstances or events. These hazards may result in death or injury to persons, loss of revenues orproperty, the payment of ransoms, environmental damage, higher insurance rates, damage to our customer relationships or delay or re-routing, which mayalso subject us to litigation. If our vessels suffer damage, they may need to be repaired at a dry-docking facility. The costs of dry-dock repairs areunpredictable and may be substantial. We may have to pay dry-docking costs that our insurance does not cover in full. The loss of earnings while thesevessels are being repaired and repositioned, as well as the actual cost of these repairs, would decrease our earnings. In addition, space at dry-docking facilitiesis sometimes limited and not all dry-docking facilities are conveniently located. We may be unable to find space at a suitable dry-docking facility or ourvessels may be forced to travel to a dry-docking facility that is not conveniently located to our vessels' positions. The loss of earnings while these vessels areforced to wait for space or to steam to more distant dry-docking facilities would decrease our earnings. In the case of bareboat chartered vessels drydocking risks, expenses and loss of hire or freight revenue affect the bareboat charterer and not theshipowner, for the duration of the bareboat charter. The market value of our vessels, and those we may acquire in the future, may fluctuate significantly, which could cause us to incur lossesif we decide to sell them following a decline in their market values or we may be required to write down their carrying value, which will adverselyaffect our earnings. The fair market value of our vessels may increase and decrease depending on the following factors: ·general economic and market conditions affecting the international tanker and drybulk shipping industries; ·prevailing level of charter rates; ·competition from other shipping companies; ·types, sizes and ages of vessels; ·other modes of transportation; ·supply and demand for vessels; ·cost of newbuildings; ·price of steel; ·governmental or other regulations; and ·technological advances. If we sell any vessel at a time when vessel prices have fallen, the sale price may be less than the vessel's carrying amount in our financial statements,in which case we will realize a loss. Vessel prices can fluctuate significantly, and in the case where the market value falls below the carrying amount we willevaluate the asset for a potential impairment adjustment and may be required to write down the carrying amount of the vessel in our financial statements andincur a loss and a reduction in earnings, if the estimate of undiscounted cash flows, excluding interest charges, expected to be generated by the use of the assetis less than its carrying amount. See "Item 5. Operating and Financial Review and Prospects—Critical Accounting Policies—Impairment of Vessels." 9Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Increasing self-sufficiency in energy by the United States could lead to a decrease in imports of oil to that country, which to date has beenone of the largest importers of oil worldwide.The United States is expected to overtake Saudi Arabia as the world's top oil producer by 2017, according to an annual long-term report by theInternational Energy Agency ("IEA"). The steep rise in shale oil and gas production is expected to push the country toward self-sufficiency in energy.According to the IEA report a continued fall in U.S. oil imports is expected with North America becoming a net oil exporter by around 2030. In recent years, theshare of total U.S. consumption met by total liquid fuel net imports, including both crude oil and products, has been decreasing since peaking at over 60% in2005 and is expected to fall to around 39% in 2013 as a result of lower consumption and the substantial increase in domestic crude oil production. Aslowdown in oil imports to the United States, one of the most important oil trading nations worldwide, may result in decreased demand for our vessels andlower charter rates, which could have a material adverse effect on our business, results of operations, cash flows, financial condition and ability to make cashdistributions.An over-supply of drybulk carrier and/or tanker capacity may lead to reductions in charter hire rates and profitability. The supply of vessels generally increases with deliveries of new vessels and decreases with the scrapping of older vessels. The market supply ofdrybulk carriers has been increasing, and the number of drybulk carriers on order as of December 31, 2013, was estimated by market sources to beapproximately 20% of the existing global drybulk fleet, with the majority of deliveries expected during 2014 to 2015, although available data with regard tocancellations of existing newbuilding orders or delays of newbuilding deliveries are not always accurate. The market supply of tankers is affected by a number of factors such as demand for energy resources, oil and petroleum products, as well as strongoverall economic growth in part of the world economy, including Asia. As of December 31, 2013, newbuilding orders have been placed for an aggregate ofapproximately 11% of the existing global tanker fleet with the bulk of deliveries expected during 2014 to 2015. An over-supply of drybulk carrier and/or tanker capacity has already resulted in a reduction of charter hire rates. If further reduction occurs, wemay only be able to find a profitable charter for our vessels. The occurrence of these events could have a material adverse effect on our business, results ofoperations, cash flows, financial condition and ability to pay dividends. Our vessels may call on ports located in countries that are subject to restrictions imposed by the U.S. or other governments, which couldadversely affect our business, reputation and the market for our common stock. From time to time on charterers' instructions, our vessels may call on ports located in countries subject to sanctions and embargoes imposed by theUnited States government and countries identified by the U.S. government as state sponsors of terrorism, including Cuba, Iran, Sudan and Syria. The U.S.sanctions and embargo laws and regulations vary in their application, as they do not all apply to the same covered persons or proscribe the same activities,and such sanctions and embargo laws and regulations may be amended or strengthened over time. In 2010, the U.S. enacted the Comprehensive IranSanctions Accountability and Divestment Act, or CISADA, which expanded the scope of the Iran Sanctions Act. Among other things, CISADA expands theapplication of the prohibitions to companies such as ours and introduces limits on the ability of companies and persons to do business or trade with Iran whensuch activities relate to the investment, supply or export of refined petroleum or petroleum products. In addition, in 2012, President Obama signed ExecutiveOrder 13608 which prohibits foreign persons from violating or attempting to violate, or causing a violation of any sanctions in effect against Iran or facilitatingany deceptive transactions for or on behalf of any person subject to U.S. sanctions. Any persons found to be in violation of Executive Order 13608 will bedeemed a foreign sanctions evader and will be banned from all contacts with the United States, including conducting business in U.S. dollars. Also in 2012,President Obama signed into law the Iran Threat Reduction and Syria Human Rights Act of 2012, or the Iran Threat Reduction Act, which created newsanctions and strengthened existing sanctions. Among other things, the Iran Threat Reduction Act intensifies existing sanctions regarding the provision ofgoods, services, infrastructure or technology to Iran's petroleum or petrochemical sector. The Iran Threat Reduction Act also includes a provision requiring thePresident of the United States to impose five or more sanctions from Section 6(a) of the Iran Sanctions Act, as amended, on a person the President determinesis a controlling beneficial owner of, or otherwise owns, operates, or controls or insures a vessel that was used to transport crude oil from Iran to anothercountry and (1) if the person is a controlling beneficial owner of the vessel, the person had actual knowledge the vessel was so used or (2) if the personotherwise owns, operates, or controls, or insures the vessel, the person knew or should have known the vessel was so used. Such a person could be subject toa variety of sanctions, including exclusion from U.S. capital markets, exclusion from financial transactions subject to U.S. jurisdiction, and exclusion of thatperson's vessels from U.S. ports for up to two years.On November 24, 2013, the P5+1 (the United States, United Kingdom, Germany, France, Russia and China) entered into an interim agreement withIran entitled the "Joint Plan of Action" ("JPOA"). Under the JPOA it was agreed that, in exchange for Iran taking certain voluntary measures to ensure that itsnuclear program is used only for peaceful purposes, the U.S. and E.U. would voluntarily suspend certain sanctions for a period of six months. 10Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. On January 20, 2014, the U.S. and E.U. indicated that they would begin implementing the temporary relief measures provided for under the JPOA.These measures include, among other things, the suspension of certain sanctions on the Iranian petrochemicals, precious metals, and automotive industriesfrom January 20, 2014 until July 20, 2014.Although it is our intention to comply with the provisions of the JPOA, there can be no assurance that we will be in compliance in the future as suchregulations and U.S. Sanctions may be amended over time, and the U.S. retains the authority to revoke the aforementioned relief if Iran fails to meet itscommitments under the JPOA.Due to the nature of our business and the evolving nature of the foregoing sanctions and embargo laws and regulations, there can be no assurance thatwe will be in compliance at all times in the future, particularly as the scope of certain laws may be unclear and may be subject to changing interpretations. Anysuch violation could result in fines, penalties or other sanctions that could severely impact our ability to access U.S. capital markets and conduct ourbusiness, and could result in some investors deciding, or being required, to divest their interest, or not to invest, in us. In addition, certain institutionalinvestors may have investment policies or restrictions that prevent them from holding securities of companies that have contracts with countries identified bythe U.S. government as state sponsors of terrorism. The determination by these investors not to invest in, or to divest from, our common stock may adverselyaffect the price at which our common stock trades. Moreover, our charterers may violate applicable sanctions and embargo laws and regulations as a result ofactions that do not involve us or our vessels, and those violations could in turn negatively affect our reputation. In addition, our reputation and the market forour securities may be adversely affected if we engage in certain other activities, such as entering into charters with individuals or entities in countries subject toU.S. sanctions and embargo laws that are not controlled by the governments of those countries, or engaging in operations associated with those countriespursuant to contracts with third parties that are unrelated to those countries or entities controlled by their governments. Investor perception of the value of ourcommon stock may be adversely affected by the consequences of war, the effects of terrorism, civil unrest and governmental actions in these and surroundingcountries. World events could adversely affect our results of operations and financial condition. The continuing conflicts and recent developments in Korea, the Middle East, including Egypt, and North Africa, including Libya, and the presenceof the United States and other armed forces in Iraq and Afghanistan may lead to additional acts of terrorism and armed conflict around the world, which maycontribute to further economic instability in the global financial markets. These uncertainties could also adversely affect our ability to obtain additionalfinancing or, if we are able to obtain financing, to do so on terms unfavorable to us. In the past, 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. Acts of terrorism and piracy have alsoaffected vessels trading in regions such as the South China Sea. Any of these occurrences could have a material adverse impact on our business, financialcondition and results of operations. 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 South China Sea, the Indian Ocean and inthe Gulf of Aden off the coast of Somalia. Although the frequency of sea piracy worldwide decreased during 2013 to its lowest level since 2009, sea piracyincidents continue to occur, particularly in the Gulf of Aden off the coast of Somalia and increasingly in the Gulf of Guinea, with drybulk vessels andtankers particularly vulnerable to such attacks. If these piracy attacks result in regions in which our vessels are deployed being characterized by insurers as"war risk" zones by insurers or Joint War Committee "war and strikes" listed areas, premiums payable for such coverage could increase significantly andsuch insurance coverage may be more difficult to obtain. In addition, crew costs, including costs which may be incurred to the extent we employ onboardsecurity guards, could increase in such circumstances. We may not be adequately insured to cover losses from these incidents, which could have a materialadverse effect on us. In addition, detention hijacking as a result of an act of piracy against our vessels, or an increase in cost, or unavailability of insurancefor our vessels, could have a material adverse impact on our business, results of operations, cash flows, financial condition and ability to pay dividends andmay result in loss of revenues, increased costs and decreased cash flows to our customers, which could impair their ability to make payments to us under ourcharters. Changes in the economic and political environment in China and policies adopted by the government to regulate its economy may have amaterial adverse effect on our business, financial condition and results of operations. The Chinese economy differs from the economies of most countries belonging to the Organization for Economic Cooperation and Development, orOECD, in respects such as structure, government involvement, level of development, growth rate, capital reinvestment, allocation of resources, rate ofinflation and balance of payments position. Prior to 1978, the Chinese economy was a planned economy. Since 1978, increasing emphasis has been placedon the utilization of market forces in the development of the Chinese economy. Annual and five-year plans, or State Plans, are adopted by the Chinesegovernment in connection with the development of the economy. Although state-owned enterprises still account for a substantial portion of the Chineseindustrial output, in general, the Chinese government is reducing the level of direct control that it exercises over the economy through State Plans and othermeasures. There is an increasing level of freedom and autonomy in areas such as allocation of resources, production, pricing and management and a gradualshift in emphasis to a "market economy" and enterprise reform. Limited price reforms were undertaken, with the result that prices for certain commodities areprincipally determined by market forces. Many of the reforms are unprecedented or experimental and may be subject to revision, change or abolition basedupon the outcome of such experiments. If the Chinese government does not continue to pursue a policy of economic reform the level of imports to and exportsfrom China could be adversely affected which could adversely affect our business, operating results and financial condition. 11Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Increased inspection procedures and tighter import and export controls could increase costs and disrupt our business. International shipping is subject to various security and customs inspection and related procedures in countries of origin and destination. Inspectionprocedures can result in the seizure of, delay in the loading, off-loading or delivery of, the contents of our vessels or the levying of customs duties, fines orother 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 ofcertain types of cargo uneconomical or impractical. Any such changes or developments may have a material adverse effect on our business, financialcondition, and results of operations. Rising fuel prices may adversely affect our business. Fuel is a significant, if not the largest, operating expense for many of our shipping operations when our vessels are not under period charter. Theprice and supply of fuel is unpredictable and fluctuates based on events outside our control, including geopolitical developments, supply and demand for oiland gas, actions by OPEC, and other oil and gas producers, war and unrest in oil producing countries and regions, regional production patterns andenvironmental concerns. Currently fuel prices are near historical highs, however fuel may become even more expensive in the future, which may reduce theprofitability and competitiveness of our business versus other forms of transportation, such as truck or rail. When our vessels are under period employmentthe fuel cost is borne by the charterer. RISKS RELATED TO OUR COMPANY We will not generate any revenues until we take delivery of the newbuilding vessels we have agreed to acquire or identify and acquire othervessels. We have entered into Memoranda of Agreement, or MOAs, with two entities affiliated with the Company's President, Chief Executive Officer andDirector, Evangelos J. Pistiolis, to purchase two newbuilding product/chemical tankers to be built in Hyundai Mipo Dockyard Co., Ltd. for an aggregatepurchase price of $73.25 million. These vessels are expected to be delivered to us in the second quarter of 2014 and the third quarter of 2015. We do notcurrently have any operating vessels. Until we take delivery of the vessels we have agreed to acquire or identify and acquire additional vessels, we will notgenerate any revenues. However, we will continue to incur costs related to any efforts to identify other vessels for acquisition, interest expense for any debt weincur and general administrative expenses, including those related to being a public company. As a result, we will incur losses and are unlikely to be able topay dividends prior to operating our newbuilding vessels or any vessels we may acquire. Newbuilding projects are subject to risks that could cause delays. Pursuant to the MOAs, we have agreed to purchase two newbuilding vessels to be built in Hyundai Mipo Dockyard Co., Ltd. with expected delivery inthe second quarter of 2014 and the third quarter of 2015. Newbuilding construction projects are subject to risks of delay inherent in any large constructionproject from numerous factors, including shortages of equipment, materials or skilled labor, unscheduled delays in the delivery of ordered materials andequipment or shipyard construction, failure of equipment to meet quality and/or performance standards, financial or operating difficulties experienced byequipment vendors or the shipyard, unanticipated actual or purported change orders, inability to obtain required permits or approvals, design or engineeringchanges and work stoppages and other labor disputes, adverse weather conditions or any other events of force majeure. Yards failure to complete the project ontime may result in the delay of revenue from the vessel. If we are unable to obtain financing required to complete payments on our newbuildings, we may lose all or a portion of the paymentspreviously made. Pursuant to the MOAs, as of December 31, 2013, we have paid a $14.4 million installment to acquire two newbuilding vessels under construction atHyundai Mipo Dockyard Co., Ltd. Upon delivery of the vessels we will have a remaining installment under the MOAs in the amount of $58.9 million beforewe take possession of the vessels. We had, as of December 31, 2013, a cash balance of $9.7 million to fund these newbuilding vessels and other newbuildingor secondhand purchases. To fund the delivery installment for Hull S406, we have the option to pay in cash or shares. To fund the delivery installment forHull S418 and to acquire further vessels, we will be required to use cash or incur borrowings or raise capital through the sale of additional equity securities.Our ability to obtain bank financing or to access the capital markets for future offerings may be limited by our financial condition at the time of any suchfinancing or offering as well as by adverse market conditions resulting from, among other things, general economic conditions and contingencies anduncertainties that are beyond our control. If we are not able to borrow additional funds, raise other capital or utilize available cash on hand, we may not beable to take delivery of Hull S418 or acquire other newbuilding or secondhand vessels, which could have a material adverse effect on our business, financialcondition, results of operations and cash flows. If for any reason we fail to make a payment when due, which may result in a default under our MOAcontracts, or otherwise fail to take delivery of our vessel, we would be prevented from realizing potential revenues from this vessel, which could have amaterial adverse effect on our business, results of operations and financial condition. Additionally, we could also lose all or a portion of our payments to thesellers that were paid by us and we could be liable for penalties and damages under such contracts. Even if we are successful in obtaining necessary funds,incurring additional debt may significantly increase our interest expense and financial leverage, which could limit our financial flexibility and ability to pursueother business opportunities. 12Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. We are subject to certain risks with respect to our counterparties and contracts, and failure of such counterparties to meet their obligationscould cause us to suffer losses or negatively impact our results of operations and cash flows. In the future we may enter into various contracts, including pooling arrangements, charter agreements, shipbuilding contracts and credit facilities. Suchagreements subject us to counterparty risks. The ability of each of our counterparties to perform its obligations under a contract with us will depend on anumber of factors that are beyond our control and may include, among other things, general economic conditions, the condition of the maritime industry, theoverall financial condition of the counterparty, charter rates received for specific types of vessels, and various expenses. For example, the combination of areduction of cash flow resulting from declines in world trade, a reduction in borrowing bases under reserve-based credit facilities and the lack of availability ofdebt or equity financing may result in a significant reduction in the ability of charterers to make charter payments to us. In addition, in depressed marketconditions, charterers and customers may no longer need a vessel that is then under charter or contract or may be able to obtain a comparable vessel at lowerrates. As a result, charterers and customers may seek to renegotiate the terms of their existing charter agreements or avoid their obligations under thosecontracts. Should a counterparty fail to honor its obligations under agreements with us, we could sustain significant losses which could have a materialadverse effect on our business, financial condition, results of operations and cash flows. Due to market conditions, we may sell our newbuilding vessels at a loss.We have entered into MOAs for one 39,000 dwt product/chemical tanker and one 50,000 dwt product/chemical tanker both to be built at HyundaiMipo Dockyard Co., Ltd., and we currently own no other vessels. Since the summer of 2008, vessel values in both the drybulk and tanker industries havebeen very volatile. If vessel values decline, we may decide to sell the newbuilding vessels at a loss that would affect our cash flow and financial condition.Servicing future debt will limit funds available for other purposes and impair our ability to react to changes in our business. To finance our fleet expansion program, we intend to incur secured indebtedness. We must dedicate a portion of our cash flow from operations to paythe principal and interest on our indebtedness. These payments limit funds otherwise available for working capital, capital expenditures and other purposes.As of December 31, 2013, we had no indebtedness. Our future level of indebtedness increases the possibility that we may be unable to generate cash sufficientto pay, when due, the principal of, interest on or other amounts due in respect of, our indebtedness. Our future debt could also have other significantconsequences. For example, it could: ·increase our vulnerability to general economic downturns and adverse competitive and industry conditions; ·require us to dedicate a substantial portion, if not all, of our cash flow from operations to payments on our indebtedness, thereby reducingthe availability of our cash flow to fund working capital, capital expenditures and other general corporate purposes; ·limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; ·place us at a competitive disadvantage compared to competitors that have less debt or better access to capital; ·limit our ability to raise additional financing on satisfactory terms or at all; and ·adversely impact our ability to comply with the financial and other restrictive covenants in the indenture governing the notes and the creditagreements governing the debts of our subsidiaries, which could result in an event of default under such agreements. Furthermore, our future interest expense could increase if interest rates increase. If we do not have sufficient earnings, we may be required to refinanceall or part of our existing debt, sell assets, borrow more money or sell more securities, none of which we can guarantee we will be able to do. 13Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. If we fail to manage our planned growth properly, we may not be able to successfully expand our market share. We intend to continue to grow our fleet in the future. Our future growth will primarily depend on our ability to: ·generate excess cash flow so that we can invest without jeopardizing our ability to cover current and foreseeable working capital needs(including debt service); ·raise equity and obtain required financing for our existing and new operations; ·locate and acquire suitable vessels; ·identify and consummate acquisitions or joint ventures; ·integrate any acquired business successfully with our existing operations; ·hire, train and retain qualified personnel and crew to manage and operate our growing business and fleet; ·enhance our customer base; and ·manage expansion. Growing any business by acquisition presents numerous risks such as undisclosed liabilities and obligations, difficulty in obtaining additionalqualified personnel, managing relationships with customers and suppliers and integrating newly acquired operations into existing infrastructures. We may notbe successful in executing our growth plans and we may incur significant additional expenses and losses in connection therewith. Our ability to obtain additional debt financing may be dependent on our ability to charter our newbuilding vessels upon delivery, theperformance of our then-existing charters and the creditworthiness of our charterers. Our inability to charter our newbuilding vessels when they are delivered to us, and the actual or perceived credit quality of our charterers, and anydefaults by them, may materially affect our ability to obtain the additional capital resources that we will require to purchase additional vessels or maysignificantly increase our costs of obtaining such capital. Our inability to obtain financing, or at a higher than anticipated cost, may materially affect ourresults of operation and our ability to implement our business strategy. In the highly competitive international tanker and drybulk shipping markets, we may not be able to compete for charters with newentrants or established companies with greater resources. We will employ our newbuilding product/chemical tankers and any additional vessels we intend to acquire in a highly competitive market that iscapital intensive and highly fragmented. The operation of tanker and drybulk vessels and the transportation of cargoes shipped in these vessels, as well as theshipping industry in general, is extremely competitive. Competition arises primarily from other vessel owners, including major oil companies as well asindependent tanker and drybulk shipping companies, some of whom have substantially greater resources than we do. Competition for the transportation of oiland refined petroleum products and drybulk cargoes can be intense and depends on price, location, size, age, condition and the acceptability of the vessel andits operators to the charterers. Due in part to the highly fragmented market, competitors with greater resources could enter and operate larger fleets throughconsolidations or acquisitions that may be able to offer better prices and fleets than us. A limited number of financial institutions hold our cash including financial institutions located in Greece. A limited number of financial institutions, including institutions located in Greece, hold all of our cash. Our bank accounts have been depositedfrom time to time with banks in Monaco, Germany, United Kingdom and Greece amongst others. Of the financial institutions located in Greece, some aresubsidiaries of international banks and others are Greek financial institutions. These balances are not covered by insurance in the event of default by thesefinancial institutions. The occurrence of such a default could have a material adverse effect on our business, financial condition, results of operations andcash flows, and we may lose part or all of our cash that we deposit with such banks. 14Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. We may be subject to litigation that, if not resolved in our favor and not sufficiently insured against, could have a material adverse effecton us. We may be, from time to time, involved in various litigation matters. These matters may include, among other things, contract disputes, personalinjury claims, environmental claims or proceedings, asbestos and other toxic tort claims, employment matters, governmental claims for taxes or duties,securities litigation, and other litigation that arises in the ordinary course of our business. Although we intend to defend these matters vigorously, we cannotpredict with certainty the outcome or effect of any claim or other litigation matter, and the ultimate outcome of any litigation or the potential costs to resolvethem may have a material adverse effect on us. Insurance may not be applicable or sufficient in all cases and/or insurers may not remain solvent, which mayhave a material adverse effect on our financial condition. We may be unable to attract and retain key management personnel and other employees in the international tanker and drybulk shippingindustries, which may negatively impact the effectiveness of our management and our results of operations. Our success depends to a significant extent upon the abilities and efforts of our management team. All of our executive officers are employees ofCentral Mare Inc., or Central Mare which we refer to as our Fleet Manager, a related party controlled by the family of our Chief Executive Officer, and we haveentered into agreements with our Fleet Manager for the provision of our President, Chief Executive Officer, and Director, Evangelos Pistiolis, our ChiefFinancial Officer and Director, Alexandros Tsirikos, our Executive Vice President, Chairman and Director, Vangelis Ikonomou, and our Chief TechnicalOfficer, Demetris Souroullas. The loss of any of these individuals could adversely affect our business prospects and financial condition. Difficulty in hiringand retaining personnel could adversely affect our results of operations. We do not maintain "key man" life insurance on any of our officers. If labor interruptions are not resolved in a timely manner, they could have a material adverse effect on our business, results ofoperations, cash flows, financial condition and available cash. Our Fleet Manager will be responsible for recruiting, mainly through a crewing agent, the senior officers and all other crew members for ournewbuilding vessel and all other vessels we acquire. If not resolved in a timely and cost-effective manner, industrial action or other labor unrest could preventor hinder our operations from being carried out as we expect and could have a material adverse effect on our business, results of operations, cash flows,financial condition and available cash. If we expand our business, we will need to improve our operations and financial systems and staff; if we cannot improve these systems orrecruit suitable employees, our performance may be adversely affected. Our current operating and financial systems may not be adequate if we implement a plan to expand the size of our fleet, and our attempts to improvethose systems may be ineffective. If we are unable to operate our financial and operations systems effectively or to recruit suitable employees as we expand ourfleet, our performance may be adversely affected. A drop in spot charter rates may provide an incentive for some charterers to default on their charters, which could affect our cash flowand financial condition. When we enter into a time charter or bareboat charter, charter rates under that charter are fixed throughout the term of the charter. If the spot charterrates in the tanker or drybulk shipping industry, as applicable, become significantly lower than the time charter equivalent rates that some of our charterersare obligated to pay us under our then existing charters, the charterers may have incentive to default under that charter or attempt to renegotiate the charter. Ifour charterers fail to pay their obligations, we would have to attempt to re-charter our vessels at lower charter rates, and as a result we could sustain significantlosses which could have a material adverse effect on our cash flow and financial condition, which would affect our ability to meet our loan repaymentobligations if any, in which case our lenders could choose to accelerate our indebtedness and foreclose their liens, and we could be required to sell vessels inour fleet and our ability to continue to conduct our business would be impaired.An increase in operating costs could decrease earnings and available cash. Vessel operating costs include the costs of crew, fuel (for spot chartered vessels), provisions, deck and engine stores, insurance and maintenance andrepairs, which depend on a variety of factors, many of which are beyond our control. Some of these costs, primarily relating to insurance and enhancedsecurity measures, have been increasing. If any vessels we acquire suffer damage, they may need to be repaired at a drydocking facility. The costs ofdrydocking repairs are unpredictable and can be substantial. Increases in any of these expenses could decrease our earnings and available cash. In the case ofbareboat chartered vessels, operating expenses and loss of hire or freight revenue due to repairs or damages affect the bareboat charterer and not the shipowner,for the duration of the bareboat charter. 15Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. The aging of our fleet may result in increased operating costs in the future, which could adversely affect our earnings. In general, the cost of maintaining a vessel in good operating condition increases with the age of the vessel. As our fleet ages, operating and other costswill increase. In the case of bareboat charters, operating costs are borne by the bareboat charterer. Cargo insurance rates also increase with the age of a vessel,making older vessels less desirable to charterers. Governmental regulations, including environmental regulations, safety or other equipment standards relatedto the age of vessels may require expenditures for alterations, or the addition of new equipment to our vessels and may restrict the type of activities in whichour vessels may engage. As our fleet ages, market conditions might not justify those expenditures or enable us to operate our vessels profitably during theremainder of their useful lives. Unless we set aside reserves or are able to borrow funds for vessel replacement, our revenue will decline at the end of a vessel's useful life, whichwould adversely affect our business, results of operations and financial condition. Unless we maintain reserves or are able to borrow or raise funds for vessel replacement, we will be unable to replace the vessels in our fleet upon theexpiration of their remaining useful lives, which we estimate to be 25 years from the date of initial delivery from the shipyard. Our cash flows and income aredependent on the revenues earned by the chartering of our vessels to customers. If we are unable to replace the vessels in our fleet upon the expiration of theiruseful lives, our business, results of operations and financial condition will be materially and adversely affected. Purchasing and operating previously owned, or secondhand, vessels may result in increased operating costs and vessels off-hire, whichcould adversely affect our earnings. We may expand our fleet through the acquisition of previously owned vessels. While we rigorously inspect previously owned, or secondhand vesselsprior to purchase, this does not normally provide us with the same knowledge about their condition and cost of any required (or anticipated) repairs that wewould have had if these vessels had been built for and operated exclusively by us. Accordingly, we may not discover defects or other problems with suchvessels prior to purchase. Any such hidden defects or problems, when detected, may be expensive to repair, and if not detected, may result in accidents orother incidents for which we may become liable to third parties. Also, when purchasing previously owned vessels, we do not receive the benefit of warrantiesfrom the builders if the vessels we buy are older than one year. In general, the costs to maintain a vessel in good operating condition increase with the age andtype of the vessel. In the case of chartered-in vessels, we run the same risks. Governmental regulations, safety or other equipment standards related to the age of vessels may require expenditures for alterations, or the addition ofnew equipment, to our vessels and may restrict the type of activities in which the vessels may engage. As our vessels age, market conditions may not justifythose expenditures or enable us to operate our vessels profitably during the remainder of their useful lives. We may not have adequate insurance to compensate us if we lose any vessels that we acquire. We will carry insurance for all vessels we acquire against those types of risks commonly insured against by vessel owners and operators. Theseinsurances include hull and machinery insurance, protection and indemnity insurance, which includes environmental damage and pollution insurancecoverage and war risk insurance. Reasonable insurance rates can best be obtained when the size and the age/trading profile of the fleet is attractive. As a result,rates become less competitive as a fleet downsizes. In the future, we may not be able to obtain adequate insurance coverage at reasonable rates for the vessels we acquire. The insurers may not payparticular claims. Our insurance policies contain deductibles for which we will be responsible as well as limitations and exclusions which may neverthelessincrease our costs or lower our revenue. We may be subject to increased premium payments, or calls, if 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 and the claim records of our fleet managers aswell 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 andfinancial condition. 16Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Maritime claimants could arrest vessels we acquire, which could interrupt our cash flow. Crew members, suppliers of goods and services to a vessel, shippers of cargo and other parties may be entitled to a maritime lien against that vesselfor unsatisfied debts, claims or damages. In many jurisdictions, a maritime lienholder may enforce its lien by "arresting" or "attaching" a vessel throughforeclosure proceedings. The arrest or attachment of one or more vessels we acquire could result in a significant loss of earnings for the related off-hiredperiod. In addition, in jurisdictions where the "sister ship" theory of liability applies, a claimant may arrest the vessel which is subject to the claimant'smaritime lien and any "associated" vessel, which is any vessel owned or controlled by the same owner. In countries with "sister ship" liability laws, claimsmight be asserted against us or any of our vessels for liabilities of other vessels that we own. Governments could requisition vessels we acquire during a period of war or emergency, resulting in loss of earnings. A government could requisition vessels we acquire for title or hire. Requisition for title occurs when a government takes control of a vessel andbecomes the owner. Requisition for hire occurs when a government takes control of a vessel and effectively becomes the charterer at dictated charter rates.Generally, requisitions occur during a period of war or emergency. Government requisition of any vessels we acquire could negatively impact our revenuesshould we not receive adequate compensation. We may have to pay tax on U.S. source income, which would reduce our earnings. Under the U.S. Internal Revenue Code of 1986, or the Code, 50% of the gross shipping income of a vessel owning or chartering corporation, suchas ourselves and our subsidiaries, that is attributable to transportation that begins or ends, but that does not begin and end, in the U.S. is characterized asU.S. source shipping income and such income is subject to a 4% U.S. federal income tax without allowance for deduction, unless that corporation qualifiesfor exemption from tax under Section 883 of the Code. Although we have qualified for this statutory exemption in previous taxable years and have taken thisposition for U.S. federal income tax return reporting purposes and we expect to qualify for the 2013 taxable year, there are factual circumstances beyond ourcontrol that could cause us to lose the benefit of the exemption and thereby become subject to U.S. federal income tax on our U.S. source shipping income. Forexample, we would fail to qualify for exemption under Section 883 of the Code for a particular tax year if shareholders, each of whom owned, actually orunder applicable constructive ownership rules, a 5% or greater interest in the vote and value of our common stock, owned in the aggregate 50% or more of thevote and value of such stock, and "qualified shareholders" as defined by the Treasury regulation under Section 883 of the Code did not own, directly or underapplicable constructive ownership rules, sufficient shares in our closely-held block of common stock to preclude the shares in that closely-held block that arenot so owned from representing 50% or more of the value of our common stock for more than half of the number of days during the taxable year. Establishingsuch ownership by qualified shareholders will depend upon the status of certain of our direct or indirect shareholders as residents of qualifying jurisdictionsand whether those shareholders own their shares through bearer share arrangements. In addition, such shareholders will also be required to comply withownership certification procedures attesting that they are residents of qualifying jurisdictions, and each intermediary or other person in the chain of ownershipbetween us and such shareholders must undertake similar compliance procedures. Due to the factual nature of the issues involved, we may not qualify forexemption under Section 883 of the Code for any future taxable year. We are likely to be treated as a "passive foreign investment company," which could have adverse U.S. federal income tax consequences toU.S. shareholders. 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 least75% 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 assetsproduce or are held for the production of those types of "passive income." For purposes of these tests, "passive income" includes dividends, interest, gainsfrom the sale or exchange of investment property and rents and royalties other than rents and royalties which are received from unrelated parties in connectionwith the active conduct of a trade or business. Income derived from the performance of services does not constitute "passive income" for this purpose. U.S.shareholders of a PFIC are subject to a disadvantageous U.S. federal income tax regime with respect to the income derived by the PFIC, the distributions theyreceive from the PFIC and the gain, if any, they derive from the sale or other disposition of their shares in the PFIC. In general, income derived from the bareboat charter of a vessel should be treated as "passive income" for purposes of determining whether a foreigncorporation is a PFIC, and such vessel should be treated as an asset which produces or is held for the production of "passive income." On the other hand,income derived from the time charter of a vessel should not be treated as "passive income" for such purpose, but rather should be treated as services income;likewise, a time chartered vessel should generally not be treated as an asset which produces or is held for the production of "passive income." For our 2013 taxable year, we believe that at least 50% of the average value of our assets consisted of vessels which are bareboat chartered and at least75% of our gross income was derived from vessels on bareboat charter. Therefore, we expect to be treated as a PFIC for our 2013 taxable year. 17Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Our U.S. shareholders may face adverse U.S. federal income tax consequences and certain information reporting obligations as a result of us beingtreated as a PFIC. Under the PFIC rules, unless those shareholders make an election available under the Code (which election could itself have adverseconsequences for such shareholders, as discussed below under "Taxation– U.S. Federal Income Consequences—U.S. Federal Income Taxation of U.S.Holders"), such shareholders would be liable to pay U.S. federal income tax at the then prevailing income tax rates on ordinary income plus interest uponexcess distributions and upon any gain from the disposition of their common shares, as if the excess distribution or gain had been recognized ratably over theshareholder's holding period of the common shares. See "Taxation —U.S. Federal Income Consequences—U.S. Federal Income Taxation of U.S. Holders" fora more comprehensive discussion of the U.S. federal income tax consequences to U.S. shareholders as a result of our status as a PFIC. In addition, as a resultof being treated as a PFIC for the 2013 taxable year, any dividends paid by us during 2013 and 2014 will not be eligible to be treated as "qualified dividendincome," which would otherwise be eligible for preferential tax rates in the hands of non-corporate U.S. shareholders. Fluctuations in exchange rates could affect our results of operations because we generate a portion of our expenses in currencies otherthan U.S. dollars. We generate all of our revenues in U.S. dollars but incur certain expenses in currencies other than U.S. dollars, mainly Euros. During 2013,approximately 7.3% of our expenses were in Euros and approximately 0.2% were in currencies other than the U.S. dollar or Euro. This difference could lead tofluctuations in net income due to changes in the value of the U.S. dollar relative to the other currencies, in particular, the Euro. Should the Euro appreciaterelative to the U.S. dollar in future periods, our expenses will increase in U.S. dollar terms, thereby decreasing our net income. We have not hedged these risksand therefore our operating results could suffer as a result. Because the Public Company Accounting Oversight Board is not currently permitted to inspect our independent accounting firm, youmay not benefit from such inspections.Auditors of U.S. public companies are required by law to undergo periodic Public Company Accounting Oversight Board, or PCAOB, inspectionsthat assess their compliance with U.S. law and professional standards in connection with performance of audits of financial statements filed with the SEC.Certain European Union countries, including Greece, do not currently permit the PCAOB to conduct inspections of accounting firms established andoperating in such European Union countries, even if they are part of major international firms. The PCAOB conducted inspections in Greece in 2008 andevaluated our auditor's performance of audits of SEC registrants and our auditor's quality controls. The PCAOB issued its report which can be found on thePCAOB website. Currently, however, the PCAOB is unable to conduct inspections in Greece until a cooperation agreement between the PCAOB and the GreekAccounting & Auditing Standards Oversight Board is reached. Accordingly, unlike for most U.S. public companies, should the PCAOB again wish toconduct an inspection it is currently prevented from evaluating our auditor's performance of audits and its quality control procedures, and, unlikeshareholders of most U.S. public companies, our shareholders would be deprived of the possible benefits of such inspections.RISKS RELATED TO OUR COMMON SHARES Our share price may continue to be highly volatile, which could lead to a loss of all or part of a shareholder's investment. The market price of our common shares has fluctuated widely since our common shares began trading in July of 2004 on the Nasdaq NationalMarket, now the Nasdaq Global Select Market, which we refer to as Nasdaq. Over the last few years, the stock market has experienced price and volumefluctuations. This volatility has sometimes been unrelated to the operating performance of particular companies. During 2013, the closing price of our commonshares experienced a high of $2.40 on July 29, 2013 and a low of $0.74 on March 11, 2013. On August 21, 2012, we received a notification of deficiencyfrom Nasdaq stating that market value of our publicly-held shares fell below certain minimum requirements for listing on the Nasdaq Global Select Market,with a grace period of 180 calendar days to regain compliance. Nasdaq has since notified us that we regained compliance within the applicable grace period. Inaddition, because the market price of our common shares has dropped below $5.00 per share, brokers generally prohibit shareholders from using such sharesas collateral for borrowing in margin accounts. This inability to continue to use our common shares as collateral may lead to sales of such shares creatingdownward pressure on and increased volatility in the market price of our common shares. Furthermore, if the volatility in the market continues or worsens, itcould have a further adverse affect on the market price of our common shares, regardless of our operating performance. The market price of our common shares is due to a variety of factors, including: ·fluctuations in interest rates; ·fluctuations in the availability or the price of oil; 18Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. ·fluctuations in foreign currency exchange rates; ·announcements by us or our competitors; ·changes in our relationships with customers or suppliers; ·actual or anticipated fluctuations in our semi-annual and annual results and those of other public companies in our industry; ·changes in United States or foreign tax laws; ·actual or anticipated fluctuations in our operating results from period to period; ·shortfalls in our operating results from levels forecast by securities analysts; ·market conditions in the shipping industry and the general state of the securities markets; ·mergers and strategic alliances in the shipping industry; ·changes in government regulation; ·a general or industry-specific decline in the demand for, and price of, shares of our common stock resulting from capital market conditionsindependent of our operating performance; ·the loss of any of our key management personnel; and ·our failure to successfully implement our business plan. There may not be a continuing public market for you to resell our common shares. Our common shares began trading in July of 2004 on the Nasdaq National Market, and our common shares currently trade on the Nasdaq GlobalSelect Market; however, an active and liquid public market for our common shares may not continue and you may not be able to sell your common shares inthe future at the price that you paid for them or at all. As noted above, on August 21, 2012, we received a notification of deficiency from Nasdaq stating thatmarket value of our publicly-held shares fell below certain minimum requirements for listing on the Nasdaq Global Select Market, with a grace period of 180calendar days to regain compliance. Nasdaq has since notified us that we regained compliance within the applicable grace period. Further, lack of trading volume in our stock may affect investors' ability to sell their shares. Our common shares have been experiencing low dailytrading volumes in the market. As a result, an investor may be unable to sell all of such investor's shares in the desired time period, or may only be able to sellsuch shares at a significant discount to the previous closing price. Certain existing stockholders, who hold approximately 53.8% of our common stock, may have the power to exert control over us, whichmay limit your ability to influence our actions. As of the day of this report, Sovereign Holdings Inc., or Sovereign, a company that is wholly owned by our President, Chief Executive Officer andDirector, Evangelos J. Pistiolis, owns, directly or indirectly, approximately 53.8% of the outstanding shares of our common stock. Due to the number ofshares it owns, Sovereign has the power to exert considerable influence over our actions and to effectively control the outcome of matters on which ourshareholders are entitled to vote, including the election of our directors and other significant corporate actions. The interests of this stockholder may bedifferent from your interests. Shareholders may experience significant dilution as a result of future equity offerings or issuance if shares are sold at pricessignificantly below the price at which shareholders invested. We may issue additional shares of common stock or other equity securities of equal or senior rank in the future in connection with, among otherthings, future vessel acquisitions, repayment of outstanding indebtedness, or our equity incentive plan, without shareholder approval, in a number ofcircumstances. Our existing shareholders may experience significant dilution if we issue shares in the future at prices significantly below the price at whichprevious shareholders invested. 19Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Our issuance of additional shares of common stock or other equity securities of equal or senior rank would have the following effects: ·our existing shareholders' proportionate ownership interest in us will decrease; ·the amount of cash available for dividends payable on the shares of our common stock may decrease; ·the relative voting strength of each previously outstanding common share may be diminished; and ·the market price of the shares of our common stock may decline. Future issuances or sales, or the potential for future issuances or sales, of our common shares may cause the trading price of oursecurities to decline and could impair our ability to raise capital through subsequent equity offerings. We have issued a significant number of our common shares and we anticipate that we will continue to do so in the future. Shares to be issued inrelation to a future follow-on offering could cause the market price of our common shares to decline, and could have an adverse effect on our earnings per shareif and when we become profitable. In addition, future sales of our common shares or other securities in the public markets, or the perception that these salesmay occur, could cause the market price of our common shares to decline, and could materially impair our ability to raise capital through the sale ofadditional securities. We are incorporated in the Republic of the Marshall Islands, which does not have a well-developed body of corporate law and as a result,shareholders may have fewer rights and protections under Marshall Islands law than under a typical jurisdiction in the United States. Our corporate affairs are governed by our Amended and Restated Articles of Incorporation and By-laws and by the Marshall Islands BusinessCorporations Act, or BCA. The provisions of the BCA resemble provisions of the corporation laws of a number of states in the United States. However, therehave been few judicial cases in the Republic of the Marshall Islands interpreting the BCA. The rights and fiduciary responsibilities of directors under the lawof the Republic of the Marshall Islands are not as clearly established as the rights and fiduciary responsibilities of directors under statutes or judicial precedentin existence in certain United States jurisdictions. Shareholder rights may differ as well. While the BCA does specifically incorporate the non-statutory law, orjudicial case law, of the State of Delaware and other states with substantially similar legislative provisions, our public shareholders may have more difficultyin protecting their interests in the face of actions by the management, directors or controlling shareholders than would shareholders of a corporationincorporated in a United States jurisdiction. It may not be possible for investors to serve process on or enforce U.S. judgments against us. We and all of our subsidiaries are incorporated in jurisdictions outside the U.S. and substantially all of our assets and those of our subsidiaries arelocated outside the U.S. In addition, most of our directors and officers are non-residents of the U.S., and all or a substantial portion of the assets of these non-residents are located outside the U.S. As a result, it may be difficult or impossible for U.S. investors to serve process within the U.S. upon us, oursubsidiaries or our directors and officers or to enforce a judgment against us for civil liabilities in U.S. courts. In addition, you should not assume that courtsin the countries in which we or our subsidiaries are incorporated or where our assets or the assets of our subsidiaries are located (1) would enforce judgmentsof U.S. courts obtained in actions against us or our subsidiaries based upon the civil liability provisions of applicable U.S. federal and state securities laws or(2) would enforce, in original actions, liabilities against us or our subsidiaries based on those laws. Anti-takeover provisions in our organizational documents could have the effect of discouraging, delaying or preventing a merger,amalgamation or acquisition, which could reduce the market price of our common shares. Several provisions of our Amended and Restated Articles of Incorporation and our Amended and Restated Bylaws could make it difficult for ourshareholders 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; 20Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. ·authorizing the removal of directors only for cause and only upon the affirmative vote of the holders of at least 80% of the outstandingshares of our capital stock entitled to vote for the directors; ·prohibiting shareholder action by written consent unless the written consent is signed by all shareholders entitled to vote on the action; ·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 onby shareholders at shareholder meetings. In addition, we have entered into a Stockholders Rights Agreement that will make it more difficult for a third party to acquire us without the supportof our Board of Directors and principal shareholders. These anti-takeover provisions could substantially impede the ability of public shareholders to benefitfrom a change in control and, as a result, may reduce the market price of our common stock and your ability to realize any potential change of controlpremium. RISKS RELATED TO OUR RELATIONSHIP WITH OUR FLEET MANAGER AND ITS AFFILIATES Upon delivery of vessels we acquire, we will be dependent on our Fleet Manager to perform the day-to-day management of our fleet. Our executive management team consists of our President and Chief Executive Officer, Evangelos Pistiolis, our Chief Financial Officer, AlexandrosTsirikos, our Executive Vice President, Vangelis Ikonomou, and our Chief Technical Officer, Demetris Souroullas. Upon delivery of our newbuilding vesselsor any other vessels we acquire, we expect to subcontract the day-to-day vessel management of our fleet, including crewing, maintenance and repair to our FleetManager. Our Fleet Manager is a related party controlled by the family of our Chief Executive Officer. We will be dependent on our Fleet Manager for thetechnical and commercial operation of our fleet and the loss of our Fleet Manager's services or its failure to perform obligations to us could materially andadversely affect the results of our operations. If our Fleet Manager suffers material damage to its reputation or relationships it may harm our ability to: ·continue to operate our vessels and service our customers; ·renew existing charters upon their expiration; ·obtain new charters; ·obtain financing on commercially acceptable terms; ·obtain insurance on commercially acceptable terms; ·maintain satisfactory relationships with our customers and suppliers; and ·successfully execute our growth strategy. Our Fleet Manager is a privately held company and there may be limited or no publicly available information about it. Our Fleet Manager is a privately held company. The ability of our Fleet Manager to provide services for our benefit will depend in part on its ownfinancial strength. Circumstances beyond our control could impair our Fleet Manager's financial strength, and there may be limited publicly availableinformation about its financial strength. As a result, an investor in our common shares might have little advance warning of problems affecting our FleetManager, even though these problems could have a material adverse effect on us. Our Fleet Manager may have conflicts of interest between us and its other clients. Upon delivery of our newbuilding vessels, we expect to subcontract the day-to-day technical and commercial management of our fleet, includingcrewing, maintenance, supply provisioning and repair to our Fleet Manager. Our Fleet Manager will provide similar services for vessels owned by othershipping companies, and it may provide similar services to companies with which our Fleet Manager is affiliated. These responsibilities and relationshipscould create conflicts of interest between our Fleet Manager's performance of its obligations to us, on the one hand, and our Fleet Manager's performance of itsobligations to its other clients, on the other hand. These conflicts may arise in connection with the crewing, supply provisioning and operations of the vesselsin our fleet versus vessels owned by other clients of our Fleet Manager. In particular, our Fleet Manager may give preferential treatment to vessels owned byother clients whose arrangements provide for greater economic benefit to our Fleet Manager. These conflicts of interest may have an adverse effect on our resultsof operations. 21Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. ITEM 4. INFORMATION ON THE COMPANY A. History and Development of the Company Our predecessor, Ocean Holdings Inc., was formed as a corporation in January 2000 under the laws of the Republic of the Marshall Islands andrenamed Top Tankers Inc. in May 2004. In December 2007, Top Tankers Inc. was renamed Top Ships Inc. Our common stock is currently listed on theNasdaq Global Select Market under the symbol "TOPS." The current address of our principal executive office is 1 Vas. Sofias and Meg. Alexandrou Str,15124 Maroussi, Greece. The telephone number of our registered office is +30 210 812 8000. Business Development On July 26, 2011, we sold the M/V Astrale, which resulted in a loss of approximately $40.0 million. On August 31, 2011, we sold the M/V Amalfi, which resulted in a loss of approximately $29.5 million. On November 1, 2011, we entered into an agreement to sell the M/V Cyclades, which resulted in a loss of approximately $40 million. On November 21, 2011, we sold the M/T Ioannis P, which resulted in a gain of approximately $2.6 million. On December 29, 2011, we sold the M/V Pepito, which resulted in a loss of approximately $25.2 million. On January 1, 2013 we entered into an agreement with the owner of M/T Delos by which the termination fee of $ 5.3 million outstanding as ofDecember 31, 2012 is divided into two tranches; "Tranche A" ($4.5 million) that will bear interest of 3% plus Libor and "Tranche B" ($0.8 million) that willnot bear interest. This agreement provides for the repayment of Tranche A and Tranche B up to 2017.On March 27, 2013, we entered into an agreement with an unrelated third party to sell the M/T UACC Sila for a contracted price of $26million. The vessel was delivered to its new owners on April 30, 2013 and its respective debt was fully repaid.On April 15, 2013, we received a notice from the charterer of the M/T Miss Marilena that it has unilaterally reduced the daily rate payable to us from$14,400 to $11,500 for one year, beginning in April 2013, in violation of our charter agreement. As part of our agreement for securing the charterer's consentfor the sale of the shipowning company of the M/T Miss Marilena to an affiliate of the AMCI Poseidon Fund LP, we mutually agreed to waive our claims onany outstanding hire balance.On October 16, 2013, we sold the shipowning subsidiaries which own the six vessels of our fleet to an affiliate of the AMCI Poseidon Fund LP, foran aggregate cash consideration of approximately $173 million less approximately $135 million in debt and swap obligations of the shipowning companiesthat were assumed by the buyers. Following this sale we did not own any operating vessels.On December 5, 2013, we entered into an MOA to acquire a 39,000 dwt newbuilding product/chemical tanker from an entity affiliated with theCompany's President, Chief Executive Officer and Director, Evangelos J. Pistiolis. The newbuilding is scheduled for delivery from Hyundai Mipo DockyardCo., Ltd. in the third quarter of 2015. The purchase price of the newbuilding is $35.0 million and is payable as follows: 20% as an initial deposit and 80% ondelivery of the vessel.On December 16, 2013, we entered into an MOA to acquire a 50,000 dwt newbuilding product/chemical tanker with a time charter attached from anentity affiliated with the Company's President, Chief Executive Officer and Director, Evangelos J. Pistiolis. The newbuilding is scheduled for delivery fromHyundai Mipo Dockyard Co., Ltd. in the first quarter of 2015. The purchase price of the newbuilding is $37.0 million and is payable as follows: 20% as aninitial deposit and 80% on delivery of the vessel. As of December 31, 2013, our fleet consisted of two newbuilding vessels under construction and scheduled for delivery in the first and third quarterof 2015. As of December 31, 2012, our fleet consisted of seven owned vessels, including six Handymax tankers and one Supramax drybulk vessel, with totalcarrying capacity of 0.35 million dwt. In February 6, 2014 we agreed to cancel the MOA we had entered into in December 16, 2013 and entered into a new MOA to purchase another50,000 dwt newbuilding product/chemical tanker with a time charter from an entity also affiliated with the Company’s President, Chief Executive Officer andDirector, Evangelos J. Pistiolis, scheduled for delivery from Hyundai Mipo Dockyard Co., Ltd. in May 2014. The purchase price of the newbuilding is $38.3million, payable as follows: $7.4 million already paid on December 2013 for the purchase of the vessel we agreed on in December 16, 2013; $3.5 million incash payable in February 2014 and $27.4 million, payable in cash or shares at our option, on delivery of the vessel. 22Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. B. Business Overview We are a provider of international seaborne transportation services, carrying petroleum products and crude oil for the oil industry and drybulkcommodities for the steel, electric utility, construction and agriculture-food industries. As of the date of this annual report, our fleet of product/chemicaltankers consists of two newbuilding vessels: a 50,000 dwt and a 39,000 dwt product/chemical tanker, scheduled for delivery from Hyundai Mipo DockyardCo., Ltd. in the second quarter of 2014 and the third quarter of 2015, respectively. We do not own any operating vessels.We intend to continue to review the market in order to identify potential acquisition targets on accretive terms. We believe we have established a reputation in the international ocean transport industry for operating and maintaining vessels with high standards ofperformance, reliability and safety. We have assembled a management team comprised of executives who have extensive experience operating large anddiversified fleets of tankers and drybulk vessels, and who have strong ties to a number of national, regional and international oil companies, charterers andtraders. Our Fleet The following table presents our fleet list as of the date of this annual report TANKER VESSELSDelivery (per yardcontract)DwtTypeEmployment on deliveryDuration (years fixed+ options)Gross Rate per day fixed period/options Hull number S406Q2 201450,000MRT/C2+1$16,000 / $17,250Hull number S418Q3 201539,000MRN/A TOTAL DWT 89,000 Management of our Fleet Central Mare, a related party controlled by the family of our Chief Executive Officer, has been our Shipping Fleet Manager since July 1, 2010.During this period, Central Mare has performed all operational, technical and commercial functions relating to the chartering and operation of the vessels inour tanker and drybulk segments, and upon their delivery will perform these services for the newbuilding product/chemical tankers of our current fleet,pursuant to a letter agreement, or the Letter Agreement, entered into between Central Mare and Top Ships Inc. as well as management agreements betweenCentral Mare and our vessel-owning subsidiaries. Furthermore, the Letter Agreement provides for the provision of services in connection with compliance withSection 404 of the Sarbanes-Oxley Act of 2002, services rendered in relation to the maintenance of proper books and records, services in relation to financialreporting requirements under Commission and NASDAQ rules and regulations and information-system related services.Crewing and Employees As of the date of this annual report, our employees include our executive officers and one administrative employee whose services are provided by an agreementthrough Central Mare. In addition, Central Mare is responsible for recruiting, mainly through a crewing agent, the senior officers and all other crew membersfor our vessels. We believe the streamlining of crewing arrangements will ensure that all our vessels will be crewed with experienced seamen that have thequalifications and licenses required by international regulations and shipping conventions. The International Shipping IndustryThe seaborne transportation industry is a vital link in international trade, with ocean going vessels representing the most efficient and often the only method oftransporting large volumes of basic commodities and finished products. Demand for oil tankers is dictated by world oil demand and trade, which isinfluenced by many factors, including international economic activity; geographic changes in oil production, processing, and consumption; oil price levels;inventory policies of the major oil and oil trading companies; and strategic inventory policies of countries such as the United States, China and India. Thedrybulk trade is influenced by the underlying demand for the drybulk commodities, which, in turn, is influenced by the level of worldwide economic activity.Generally, growth in gross domestic product, or GDP, and industrial production correlate with peaks in demand for marine drybulk transportation services. 23Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Shipping demand, measured in tonne-miles, is a product of (a) the amount of cargo transported in ocean going vessels, multiplied by (b) the distanceover which this cargo is transported. The distance is the more variable element of the tonne-mile demand equation and is determined by seaborne tradingpatterns, which are principally influenced by the locations of production and consumption. Seaborne trading patterns are also periodically influenced by geo-political events that divert vessels from normal trading patterns, as well as by inter-regional trading activity created by commodity supply and demandimbalances. Tonnage of oil shipped is primarily a function of global oil consumption, which is driven by economic activity as well as the long-term impact ofoil prices on the location and related volume of oil production. Tonnage of oil shipped is also influenced by transportation alternatives (such as pipelines) andthe output of refineries.Demand for tankers and tonnage of oil shipped is primarily a function of global oil consumption, which is driven by economic activity as well as the long-term impact of oil prices on the location and related volume of oil production. The Baltic Dirty Tanker Index has modestly risen, after a steep decline thatstarted in mid-2008, and high volatility throughout 2009, 2010 and 2011. The Baltic Dirty Tanker Index declined from a high of 2,347 in July 2008 to a lowof 453 in mid-April 2009, which represents a decline of 80%, but has since modestly risen to 1,222 as of January 16, 2014. The Baltic Clean Tanker Indexfell from 1,509 as of June 19, 2008, to 345 as of April 4, 2009, but has modestly risen to 613 as of January 16, 2014. The dramatic decline in charter rateswas due to various factors, including the significant fall in demand for crude oil and petroleum products, the consequent rising inventories of crude oil andpetroleum products in the United States and in other industrialized nations and the corresponding reduction in oil refining, the dramatic fall in the price of oilin 2008, and the restrictions on crude oil production that OPEC, and other non-OPEC oil producing countries have imposed in an effort to stabilize the price ofoil. During 2010 and up to 2013, the above factors affecting the Baltic Dirty and Clean Tanker Indices subsided, allowing for the mild recovery of charterrates. According to the International Energy Agency, or the IEA, demand for oil and petroleum products was stronger in 2013, with the global oil productdemand rising to 91.2 million barrels per day, compared to 89.8 million barrels per day in 2012.The IEA expects 2014 oil demand to grow by 1.3% to 92.4 million barrels per day. However, throughout 2013, vessel oversupply has put pressureon charter rates and the respective Baltic Tanker indices. The price of crude oil reached historical highs in the summer of 2008 but declined sharply thereafter as a result of the deterioration in the worldeconomy, the collapse of financial markets, declining oil demand and bearish market sentiment. From 2009 up to 2013, oil prices started rising again amidst agrowing demand for oil, leading to a price of approximately $91.45 per barrel as of January 13, 2014. We strategically monitor developments in the tanker and drybulk shipping industry on a regular basis and, subject to market demand, will seek toenter into shorter or longer time or bareboat charters according to prevailing market conditions. We will compete for charters on the basis of price, vessel location, size, age and condition of the vessel, as well as on our reputation as an operator.We will arrange our time charters and bareboat charters through the use of brokers, who negotiate the terms of the charters based on market conditions. We willcompete primarily with owners of tankers in the Handymax class sizes. Ownership of tankers is highly fragmented and is divided among major oil companiesand independent vessel owners. The drybulk market is less fragmented with more small operators. Seasonality We will operate our tanker vessels in markets that have historically exhibited seasonal variations in demand and, therefore, charter rates. Thisseasonality may affect operating results. However, to the extent that our vessels are chartered at fixed rates on a long-term basis, seasonal factors will not havea significant direct effect on our business.Risk of Loss and Liability Insurance GenerallyThe operation of any cargo vessel includes risks such as mechanical failure, collision, property loss, cargo loss or damage and business interruptiondue to political circumstances in foreign countries, hostilities and labor strikes. In addition, there is always an inherent possibility of marine disaster,including oil spills and other environmental mishaps, and the liabilities arising from owning and operating vessels in international trade. OPA, which imposesvirtually unlimited liability upon owners, operators and demise charterers of any vessel for oil pollution accidents in the United States Exclusive EconomicZone, has made liability insurance more expensive for ship owners and operators trading in the United States market. While we will maintain hull andmachinery insurance, war risks insurance, protection and indemnity cover and freight, demurrage and defense cover for our future operating fleet in amountsthat we believe will be prudent to cover normal risks in our operations, we may not be able to achieve or maintain this level of coverage throughout a vessel'suseful life. Furthermore, while we believe that our intended future insurance coverage will be adequate, not all risks can be insured, and there can be noguarantee that any specific claim will be paid, or that we will always be able to obtain adequate insurance coverage at reasonable rates. 24Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Disclosure Pursuant to Section 219 of the Iran Threat Reduction and Syrian Human Rights ActSection 219 of the U.S. Iran Threat Reduction and Syria Human Rights Act of 2012, or the ITRA, added new Section 13(r) to the U.S. Securities ExchangeAct of 1934, as amended (the "Exchange Act") requiring each SEC reporting issuer to disclose in its annual and, if applicable, quarterly reports whether it orany of its affiliates have knowingly engaged in certain activities, transactions or dealings relating to Iran or with the Government of Iran or certain designatednatural persons or entities involved in terrorism or the proliferation of weapons of mass destruction during the period covered by the report. Pursuant to Section 13(r) of the Exchange Act, we note that for the period covered by this annual report, the vessel M/V Evian, prior to its sale in October2013, made one port call to Iran in 2013. The vessel made one call to the port of Bandar Abbas on August 29, 2013, loading iron ore. The vessel remained inthe port of Bandar Abbas for 26.3 days, from August 29, 2013 until September 24, 2013, and subsequently completed a voyage that lasted 35.8 dayscarrying the iron ore to another port. During this time the M/V Evian was on bareboat charter to an unrelated third party for $7,000 per day. Under the termsof the bareboat charter, and consistent with shipping industry practice, the charterer of the vessel pays the Company a daily charter rate and the chartererdirects the vessel's route, loading and discharge ports and the cargoes carried. Due to the nature of the bareboat charter it is difficult to compute the grossrevenue or net proceeds gained by the charterer from this port call and subsequent voyage. Environmental and Other Regulations Governmental laws and regulations significantly affect the ownership and operation of our vessels. We are subject to various internationalconventions, laws and regulations in force in the countries in which our vessels may operate or are registered. Compliance with such laws, regulations andother requirements entails significant expense, including vessel modification and implementation costs. A variety of government, quasi-governmental, and private organizations subject our vessels to both scheduled and unscheduled inspections. Theseorganizations include the local port authorities, national authorities, harbor masters or equivalent entities, classification societies, relevant flag state (country ofregistry) and charterers, particularly terminal operators and oil companies. Some of these entities require us to obtain permits, licenses, certificates andapprovals for the operation of our vessels. Our failure to maintain necessary permits, licenses, certificates or approvals could require us to incur substantialcosts or temporarily suspend operation of one or more of the vessels in our fleet, or lead to the invalidation or reduction of our insurance coverage. We believe that the heightened levels of environmental and quality concerns among insurance underwriters, regulators and charterers have led togreater inspection and safety requirements on all vessels and may accelerate the scrapping of older vessels throughout the industry. Increasing environmentalconcerns have created a demand for tankers that conform to stricter environmental standards. We are required to maintain operating standards for all of ourvessels that emphasize operational safety, quality maintenance, continuous training of our officers and crews and compliance with applicable local, nationaland international environmental laws and regulations. We believe that the operation of our vessels will be in substantial compliance with applicableenvironmental laws and regulations and that our vessels will have all material permits, licenses, certificates or other authorizations necessary for the conductof our operations; however, because such laws and regulations are frequently changed and may impose increasingly strict requirements, we cannot predict theultimate 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 futureserious marine incident that results in significant oil pollution or otherwise causes significant adverse environmental impact, such as the 2010 DeepwaterHorizon oil spill in the Gulf of Mexico, could result in additional legislation or regulation that could negatively affect our profitability. International Maritime Organization The United Nation's International Maritime Organization, or the IMO, is the United Nations agency for maritime safety and the prevention ofpollution by ships. The IMO has adopted several international conventions that regulate the international shipping industry, including but not limited, to theInternational Convention on Civil Liability for Oil Pollution Damage of 1969, generally referred to as CLC, the International Convention on Civil Liability forBunker Oil Pollution Damage, and the International Convention for the Prevention of Pollution from Ships of 1973, or the MARPOL Convention. TheMARPOL Convention is broken into six Annexes, each of which establishes environmental standards relating to different sources of pollution: Annex I relatesto 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 tosewage and garbage management, respectively; and Annex VI, adopted by the IMO in September of 1997, relates to air emissions. 25Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Air Emissions In September of 1997, the IMO adopted Annex VI to MARPOL to address air pollution. Effective May 2005, Annex VI sets limits on nitrogen oxideemissions from ships whose diesel engines were constructed (or underwent major conversions) on or after January 1, 2000. It also prohibits "deliberateemissions" of "ozone depleting substances," defined to include certain halons and chlorofluorocarbons. "Deliberate emissions" are not limited to times whenthe ship is at sea; they can for example include discharges occurring in the course of the ship's repair and maintenance. Emissions of "volatile organiccompounds" from certain tankers, and the shipboard incineration (from incinerators installed after January 1, 2000) of certain substances (such aspolychlorinated biphenyls (PCBs)) are also prohibited. Annex VI also includes a global cap on the sulfur content of fuel oil (see below). Annex VI seeks to further reduce air pollution by, among other things, implementing a progressive reduction of the amount of sulfur contained in anyfuel oil used on board ships. As of January 1, 2012, the amended Annex VI requires that fuel oil contain no more than 3.50% sulfur. By January 1, 2020,sulfur content must not exceed 0.50%, subject to a feasibility review to be completed no later than 2018. Sulfur content standards are even stricter within certain "Emission Control Areas" ("ECAs"). As of July 1, 2010, ships operating within an ECAwere not permitted to use fuel with sulfur content in excess of 1.0% (from 1.50%), which will be further reduced to 0.10% on January 1, 2015. AmendedAnnex VI establishes procedures for designating new ECAs. The Baltic Sea and the North Sea have been so designated. On August 1, 2012, certain coastalareas of North America were designated ECAs and effective January 1, 2014 the United States Caribbean Sea was designated an ECA. If other ECAs areapproved by the IMO or other new or more stringent requirements relating to emissions from marine diesel engines or port operations by vessels are adopted bythe EPA or the states where we operate, compliance with these regulations could entail significant capital expenditures or otherwise increase the costs of ouroperations. As of January 1, 2013, MARPOL made mandatory certain measures relating to energy efficiency for new ships. It makes the Energy EfficiencyDesign Index (EEDI) apply to all new ships, and the Ship Energy Efficiency Management Plan (SEEMP) apply to all ships. Amended Annex VI also establishes new tiers of stringent nitrogen oxide emissions standards for new marine engines, depending on their date ofinstallation. The U.S. Environmental Protection Agency promulgated equivalent (and in some senses stricter) emissions standards in late 2009. As a result ofthese designations or similar future designations, we may be required to incur additional operating or other costs. Safety Management System Requirements The IMO also adopted the International Convention for the Safety of Life at Sea, or SOLAS, and the International Convention on Load Lines, or LL,which impose a variety of standards that regulate the design and operational features of ships. The IMO periodically revises the SOLAS and LL standards.May 2012 SOLAS amendments entered into force as of January 1, 2014. The Convention on Limitation for Maritime Claims (LLMC) was recently amendedand the amendments are expected to go into effect on June 8, 2015. The amendments alter the limits of liability for a loss of life or personal injury claim and aproperty claim against ship owners. Our operations are also subject to environmental standards and requirements contained in the International Safety Management Code for the SafeOperation of Ships and for Pollution Prevention, or ISM Code, promulgated by the IMO under Chapter IX of SOLAS. The ISM Code requires the owner of avessel, or any person who has taken responsibility for operation of a vessel, to develop an extensive safety management system that includes, among otherthings, the adoption of a safety and environmental protection policy setting forth instructions and procedures for operating its vessels safely and describingprocedures for responding to emergencies. We will rely upon the safety management system that has been developed for our vessels for compliance with theISM Code. The ISM Code requires that vessel operators also obtain a safety management certificate for each vessel they operate. This certificate evidencescompliance by a vessel's management with code requirements for a safety management system. No vessel can obtain a certificate unless its manager has beenawarded a document of compliance, issued by each flag state, under the ISM Code. Our manager is in the process to obtain documents of compliance for itsoffices and safety management certificates for all of our vessels for which the certificates are required by the ISM Code. These documents of compliance andsafety management certificates are renewed as required. 26Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Noncompliance with the ISM Code and other IMO regulations may subject the shipowner or bareboat charterer to increased liability, may lead todecreases in, or invalidation of, available insurance coverage for affected vessels and may result in the denial of access to, or detention in, some ports. Pollution Control and Liability Requirements IMO has negotiated international conventions that impose liability for pollution in international waters and the territorial waters of the signatorynations to such conventions. For example, many countries have ratified and follow the liability plan adopted by the IMO and set out in the InternationalConvention on Civil Liability for Oil Pollution Damage of 1969, as amended by different Protocol in 1976, 1984, and 1992, and amended in 2000, or theCLC. 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 registeredowner is 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 of Special Drawing Rights. The limitson liability have since been amended so that compensation limits on liability were raised. The right to limit liability is forfeited under the CLC where the spillis caused by the shipowner's personal fault and under the 1992 Protocol where the spill is caused by the shipowner's personal act or omission by intentionalor reckless act or omission where the shipowner knew pollution damage would probably result. The CLC requires ships covered by it to maintain insurancecovering the liability of the owner in a sum equivalent to an owner's liability for a single incident. We believe that our protection and indemnity insurance willcover the liability under the plan adopted by the IMO. The IMO adopted the International Convention on Civil Liability for Bunker Oil Pollution Damage, or the Bunker Convention, to impose strictliability on shipowners for pollution damage in jurisdictional waters of ratifying states caused by discharges of bunker fuel. The Bunker Convention requiresregistered 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 applicablenational or international limitation regime (but not exceeding the amount calculated in accordance with the Convention on Limitation of Liability for MaritimeClaims of 1976, as amended). With respect to non-ratifying states, liability for spills or releases of oil carried as fuel in ship's bunkers typically isdetermined by the national or other domestic laws in the jurisdiction where the events or damages occur. In addition, the IMO adopted an International Convention for the Control and Management of Ships' Ballast Water and Sediments, or the BWMConvention, in February 2004. The BWM Convention's implementing regulations call for a phased introduction of mandatory ballast water exchangerequirements to be replaced in time with mandatory concentration limits. The BWM Convention will not become effective until 12 months after it has beenadopted by 30 states, the combined merchant fleets of which represent not less than 35% of the gross tonnage of the world's merchant shipping. To date, therehas not been sufficient adoption of this standard for it to take force. However, Panama may adopt this standard in the relatively near future, which would besufficient for it to take force. Upon entry into force of the BWM Convention, mid-ocean ballast exchange would be mandatory. Vessels would be required to beequipped with a ballast water treatment system that meets mandatory concentration limits not later than the first intermediate or renewal survey, whicheveroccurs first, after the anniversary date of delivery of the vessel in 2014, for vessels with ballast water capacity of 1500-5000 cubic meters, or after such datein 2016, for vessels with ballast water capacity of greater than 5000 cubic meters. If mid-ocean ballast exchange or ballast water treatment requirementsbecome mandatory, the cost of compliance could increase for ocean carriers. Although we do not believe that the costs of compliance with a mandatory mid-ocean ballast exchange would be material, it is difficult to predict the overall impact of such a requirement on our operations. The IMO continues to review and introduce new regulations. It is impossible to predict what additional regulations, if any, may be passed by theIMO and what effect, if any, such regulations might have on our operations. U.S. Regulations The U.S. Oil Pollution Act of 1990, or OPA, established an extensive regulatory and liability regime for the protection and cleanup of theenvironment from oil spills. OPA affects all "owners and operators" whose vessels trade in the United States, its territories and possessions or whose vesselsoperate in U.S. waters, which includes the U.S. territorial sea and its 200 nautical mile exclusive economic zone. The United States has also enacted theComprehensive Environmental Response, Compensation and Liability Act, or CERCLA, which applies to the discharge of hazardous substances other thanoil, 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 bydemise, the vessel. Accordingly, 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 theact 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 orthreatened discharges of oil from their vessels. OPA defines these other damages broadly to include: 27Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. ·injury to, destruction or loss of, or loss of use of, natural resources and related assessment costs; ·injury to, or economic losses resulting from, the destruction of real and personal property; ·net loss of taxes, royalties, rents, fees or net profit revenues resulting from injury, destruction or loss of real or personal property, or naturalresources; ·loss of subsistence use of natural resources that are injured, destroyed or lost; ·lost profits or impairment of earning capacity due to injury, destruction or loss of real or personal property or natural resources; and ·net cost of increased or additional public services necessitated by removal activities following a discharge of oil, such as protection fromfire, 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 July 31, 2009, the U.S. CoastGuard adjusted the limits of OPA liability to the greater of $2,000 per gross ton or $17.088 million for any double-hull tanker that is over 3,000 gross tons(subject to periodic adjustment for inflation), and our fleet is entirely composed of vessels of this size class. These limits of liability do not apply if an incidentwas proximately caused by the violation of an applicable U.S. federal safety, construction or operating regulation by a responsible party (or its agent, employeeor a person acting pursuant to a contractual relationship), or a responsible party's gross negligence or willful misconduct. The limitation on liability similarlydoes not apply if the responsible party fails or refuses to (i) report the incident where the responsibility party knows or has reason to know of the incident; (ii)reasonably cooperate and assist as requested in connection with oil removal activities; or (iii) without sufficient cause, comply with an order issued under theFederal Water Pollution Act (Section 311 (c), (e)) or the Intervention on the High Seas Act. CERCLA contains a similar liability regime whereby owners and operators of vessels are liable for cleanup, removal and remedial costs, as well asdamage for injury to, or destruction or loss of, natural resources, including the reasonable costs associated with assessing same, and health assessments orhealth 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 oran act of war. Liability under CERCLA is limited to the greater of $300 per gross ton or $5 million for vessels carrying a hazardous substance as cargo andthe 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 ofresponse and damages) if the release or threat of release of a hazardous substance resulted from willful misconduct or negligence, or the primary cause of therelease was a violation of applicable safety, construction or operating standards or regulations. The limitation on liability also does not apply if the responsibleperson fails or refused to provide all reasonable cooperation and assistance as requested in connection with response activities where the vessel is subject toOPA. OPA and CERCLA both require owners and operators of vessels to establish and maintain with the U.S. Coast Guard evidence of financialresponsibility sufficient to meet the maximum amount of liability to which the particular responsible person may be subject. Vessel owners and operators maysatisfy their financial responsibility obligations by providing a proof of insurance, a surety bond, qualification as a self-insurer or a guarantee. OPA permits individual states to impose their own liability regimes with regard to oil pollution incidents occurring within their boundaries, providedthey accept, at a minimum, the levels of liability established under OPA. Some states have enacted legislation providing for unlimited liability for discharge ofpollutants within their waters, however, in some cases, states which have enacted this type of legislation have not yet issued implementing regulations definingtanker owners' responsibilities under these laws. The 2010 Deepwater Horizon oil spill in the Gulf of Mexico may also result in additional regulatory initiatives or statutes, including the raising ofliability caps under OPA. For example, on August 15, 2012, the U.S. Bureau of Safety and Environmental Enforcement (BSEE) issued a final drilling safetyrule for offshore oil and gas operations that strengthens the requirements for safety equipment, well control systems, and blowout prevention practices.Compliance with any new requirements of OPA may substantially impact our cost of operations or require us to incur additional expenses to comply with anynew regulatory initiatives or statutes. Through our P&I Club membership, we expect to maintain pollution liability coverage insurance in the amount of $1 billion per incident for each ofour vessels. If the damages from a catastrophic spill were to exceed our insurance coverage, it could have a material adverse effect on our business, financialcondition, results of operations and cash flows. 28Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. The U.S. Clean Water Act, or CWA, prohibits the discharge of oil, hazardous substances and ballast water in U.S. navigable waters unlessauthorized by a duly-issued permit or exemption, and imposes strict liability in the form of penalties for any unauthorized discharges. The CWA also imposessubstantial liability for the costs of removal, remediation and damages and complements the remedies available under OPA and CERCLA. Furthermore, manyU.S. states that border a navigable waterway have enacted environmental pollution laws that impose strict liability on a person for removal costs and damagesresulting from a discharge of oil or a release of a hazardous substance. These laws may be more stringent than U.S. federal law. The United States Environmental Protection Agency, or EPA, has enacted rules requiring a permit regulating ballast water discharges and otherdischarges incidental to the normal operation of certain vessels within United States waters under the Vessel General Permit for Discharges Incidental to theNormal Operation of Vessels, or VGP. For a new vessel delivered to an owner or operator after September 19, 2009 to be covered by the VGP, the owner mustsubmit a Notice of Intent, or NOI, at least 30 days before the vessel operates in United States waters. On March 28, 2013 the EPA re-issued the VGP foranother five years. This VGP took effect on December 19, 2013. The VGP focuses on authorizing discharges incidental to operations of commercial vesselsand the new VGP contains numeric ballast water discharge limits for most vessels to reduce the risk of invasive species in US waters, more stringentrequirements for exhaust gas scrubbers and the use of environmentally acceptable lubricants. U.S. Coast Guard regulations adopted and proposed for adoption under the U.S. National Invasive Species Act, or NISA, impose mandatory ballastwater management practices for all vessels equipped with ballast water tanks entering U.S. waters, which could require the installation of equipment on ourvessels to treat ballast water before it is discharged or the implementation of other port facility disposal arrangements or procedures, and/or otherwise restrictour vessels from entering U.S. waters. In 2009, the U.S. Coast Guard proposed new ballast water management standards and practices, including limitsregarding ballast water releases. As of June 21, 2012, the U.S. Coast Guard implemented revised regulations on ballast water management by establishingstandards on the allowable concentration of living organisms in ballast water discharged from ships into U.S. waters. The revised ballast water standards areconsistent with those adopted by the IMO in 2004. Compliance with the EPA and the U.S. Coast Guard regulations could require the installation of equipment on our vessels to treat ballast water beforeit is discharged or the implementation of other port facility disposal arrangements or procedures at potentially substantial cost, and/or otherwise restrict ourvessels from entering U.S. waters. The U.S. Clean Air Act of 1970 (including its amendments of 1977 and 1990), or the CAA, requires the EPA to promulgate standards applicable toemissions of volatile organic compounds and other air contaminants. Our vessels will be subject to vapor control and recovery requirements for certain cargoeswhen loading, unloading, ballasting, cleaning and conducting other operations in regulated port areas. Should our vessels operate in such port areas withrestricted cargoes they will be equipped with vapor recovery systems that satisfy these requirements. The CAA also requires states to draft StateImplementation Plans, or SIPs, designed to attain national health-based air quality standards in each state. Although state-specific, SIPs may includeregulations concerning emissions resulting from vessel loading and unloading operations by requiring the installation of vapor control equipment. 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 indeterioration of the quality of water. Aiding and abetting the discharge of a polluting substance may also lead to criminal penalties. Member States wererequired to enact laws or regulations to comply with the directive by the end of 2010. Criminal liability for pollution may result in substantial penalties or finesand increased civil liability claims. Greenhouse Gas Regulation Currently, the emissions of greenhouse gases from international shipping are not subject to the Kyoto Protocol to the United Nations FrameworkConvention on Climate Change, which entered into force in 2005 and pursuant to which adopting countries have been required to implement nationalprograms to reduce greenhouse gas emissions. As of January 1, 2013 all new ships must comply with two new sets of mandatory requirements adopted by theIMO's Marine Environmental Protection Committee, MEPC, in July 2011 in part to address greenhouse gas emissions from ships. Currently operating shipsare required to develop Ship Energy Efficiency Management Plans, and minimum energy efficiency levels per capacity mile will apply to new ships. Theserequirements could cause us to incur additional compliance costs. The IMO is also planning to implement market-based mechanisms to reduce greenhouse gasemissions from ships at an upcoming MEPC session. The European Union has indicated that it intends to propose an expansion of the existing EuropeanUnion emissions trading scheme to include emissions of greenhouse gases from marine vessels, and in January 2012 the European Commission launched apublic consultation on possible measures to reduce greenhouse gas emissions from ships. In April 2013, the European Union Parliament rejected proposedchanges to the European Union Emissions law regarding carbon trading. In June 2013 the European Commission developed a strategy to integrate maritimeemissions into the overall European Union strategy to reduce greenhouse gas emissions. If the strategy is adopted by the European Parliament and Council,large vessels using European Union ports would be required to monitor, report and verify their carbon dioxide emissions beginning in January 2018. InDecember 2013, the European Union environmental ministers discussed draft rules to implement monitoring and reporting of carbon dioxide emissions fromships. 29Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. In the United States, the EPA has issued a finding that greenhouse gases endanger the public health and safety and has adopted regulations to limitgreenhouse gas emissions from certain mobile sources and has proposed regulations to limit greenhouse gases from large stationary sources. Although themobile source emissions regulations do not apply to greenhouse gas emissions from vessels, such regulation of vessels is foreseeable, and the EPA has inrecent years received petitions from the California Attorney General and various environmental groups seeking such regulation. Any climate control legislationor other regulatory initiatives adopted by the IMO, European Union, the U.S. or other countries where we operate, or any treaty adopted at the internationallevel to succeed the Kyoto Protocol, that restrict emissions of greenhouse gases could require us to make significant financial expenditures, including capitalexpenditures to upgrade our vessels, which we cannot predict with certainty at this time. International Labour Organization The International Labour Organization, or ILO, is a specialized agency of the UN with headquarters in Geneva, Switzerland. The ILO has adoptedthe Maritime Labor Convention 2006 (MLC 2006). A Maritime Labor Certificate and a Declaration of Maritime Labor Compliance will be required to ensurecompliance with the MLC 2006 for all ships above 500 gross tons in international trade. The MLC 2006 entered into force on August 20, 2013. MLC 2006requires us to develop new procedures to ensure full compliance with its requirements. Vessel Security Regulations Since the terrorist attacks of September 11, 2001, there have been a variety of initiatives intended to enhance vessel security. On November 25,2002, the U.S. Maritime Transportation Security Act of 2002, or the MTSA, came into effect. To implement certain portions of the MTSA, in July 2003, theU.S. Coast Guard issued regulations requiring the implementation of certain security requirements aboard vessels operating in waters subject to thejurisdiction of the United States. The regulations also impose requirements on certain ports and facilities, some of which are regulated by the U.S.Environmental Protection Agency (EPA). Similarly, in December 2002, amendments to SOLAS created a new chapter of the convention dealing specifically with maritime security. The newChapter V became effective in July 2004 and imposes various detailed security obligations on vessels and port authorities, and mandates compliance with theInternational Ship and Port Facilities Security Code, or the ISPS Code. The ISPS Code is designed to enhance the security of ports and ships againstterrorism. Amendments to SOLAS Chapter VII, made mandatory in 2004, apply to vessels transporting dangerous goods and require those vessels be incompliance with the International Maritime Dangerous Goods Code ("IMDG Code"). To trade internationally, a vessel must attain an International Ship Security Certificate, or ISSC, from a recognized security organization approvedby the vessel's flag state. Among the various requirements are: ·on-board installation of automatic identification systems to provide a means for the automatic transmission of safety-related informationfrom among similarly equipped ships and shore stations, including information on a ship's identity, position, course, speed andnavigational status; ·on-board installation of ship security alert systems, which do not sound on the vessel but only alert the authorities on shore; ·the development of vessel security plans; ·ship identification number to be permanently marked on a vessel's hull; ·a continuous synopsis record kept onboard showing a vessel's history, including the name of the ship, the state whose flag the ship isentitled to fly, the date on which the ship was registered with that state, the ship's identification number, the port at which the ship isregistered and the name of the registered owner(s) and their registered address; and ·compliance with flag state security certification requirements. Ships operating without a valid certificate, may be detained at port until it obtains an ISSC, or it may be expelled from port, or refused entry at port. The U.S. Coast Guard regulations, intended to align with international maritime security standards, exempt from MTSA vessel security measuresnon-U.S. vessels provided such vessels have on board a valid ISSC that attests to the vessel's compliance with SOLAS security requirements and the ISPSCode. 30Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Inspection by Classification Societies Every seagoing vessel must be "classed" by a classification society. The classification society certifies that the vessel is "in class," signifying thatthe vessel has been built and maintained in accordance with the rules of the classification society and complies with applicable rules and regulations of thevessel's country of registry and the international conventions of which that country is a member. In addition, where surveys are required by internationalconventions and corresponding laws and ordinances of a flag state, the classification society will undertake them on application or by official order, acting onbehalf of the authorities concerned. The classification society also undertakes on request other surveys and checks that are required by regulations and requirements of the flag state.These surveys are subject to agreements made in each individual case and/or to the regulations of the country concerned. For maintenance of the class, regular and extraordinary surveys of hull, machinery, including the electrical plant, and any special equipment classedare required to be performed as follows: Annual Surveys: For seagoing ships, annual surveys are conducted for the hull and the machinery, including the electrical plant, and whereapplicable for special equipment classed, within three months before or after each anniversary date of the date of commencement of the class period indicatedin the certificate. Intermediate Surveys: Extended annual surveys are referred to as intermediate surveys and typically are conducted two and one-half years aftercommissioning and each class renewal. Intermediate surveys are to be carried out at or between the occasion of the second or third annual survey. Class Renewal Surveys: Class renewal surveys, also known as special surveys, are carried out for the ship's hull, machinery, including theelectrical plant, and for any special equipment classed, at the intervals indicated by the character of classification for the hull. At the special survey, the vesselis thoroughly examined, including audio-gauging to determine the thickness of the steel structures. Should the thickness be found to be less than classrequirements, the classification society would prescribe steel renewals. The classification society may grant a one-year grace period for completion of thespecial survey. Substantial amounts of money may have to be spent for steel renewals to pass a special survey if the vessel experiences excessive wear andtear. In lieu of the special survey every four or five years, depending on whether a grace period was granted, a vessel owner has the option of arranging withthe classification society for the vessel's hull or machinery to be on a continuous survey cycle, in which every part of the vessel would be surveyed within afive-year cycle. At an owner's application, the surveys required for class renewal may be split according to an agreed schedule to extend over the entire period ofclass. This process is referred to as continuous class renewal. All areas subject to survey as defined by the classification society are required to be surveyed at least once per class period, unless shorter intervalsbetween surveys are prescribed elsewhere. The period between two subsequent surveys of each area must not exceed five years. Most vessels are also dry-docked every 30 to 36 months for inspection of the underwater parts and for repairs related to inspections. If any defectsare found, the classification surveyor will issue a "recommendation" which must be rectified by the ship owner within prescribed time limits.Most insurance underwriters make it a condition for insurance coverage that a vessel be certified as "in class" by a classification society which is amember of the International Association of Classification Societies. All new and secondhand vessels that we purchase must be certified prior to their deliveryunder our standard contracts and memorandum of agreement. If the vessel is not certified on the date of closing, we have no obligation to take delivery of thevessel.Customers Historically, our customers have included national, regional and international companies, and we have derived a significant part of our revenue from a smallnumber of charterers. In 2013, approximately 99% of our revenue derived from three charterers, Daelim H&L Co. Ltd., United Arab Chemical Carriers, Ltdand Perseveranza Di Navigatione S.p.a, which respectively provided 63%, 18% and 18% of our revenues. In 2012, approximately 89% of our revenuederived from three charterers, Daelim H&L Co. Ltd., United Arab Chemical Carriers, Ltd and Perseveranza Di Navigatione S.p.a, which respectivelyprovided 51%, 21% and 17% of our revenues. 31Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. C. Organizational Structure We are a Marshall Islands corporation with principal executive offices located at 1 Vas. Sofias and Meg. Alexandrou Str, 15124 Maroussi, Greece. We willown our vessels through wholly-owned subsidiaries that are incorporated in the Marshall Islands or other jurisdictions generally acceptable to lenders in theshipping industry. Our significant wholly-owned subsidiaries as of December 31, 2013 are listed in Exhibit 8.1 to this Annual Report on Form 20-F. D. Property, Plants and Equipment For a list of our fleet, please see "Item 4. Information on the Company—B. Business Overview —Our Fleet" above. We do not own any real property. We lease office space in Athens, Greece, located at 1, Vasilisis Sofias & Megalou Alexandrou Street, 151 24 Maroussi, Athens, Greece at a yearlyrent of $0.04 million. The amounts of yearly rent stated in this paragraph are based on the relevant exchange rate on December 31, 2013. ITEM 4A. UNRESOLVED STAFF COMMENTS None. ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS The following presentation of management's discussion and analysis is intended to discuss our financial condition, changes in financial conditionand results of operations, and should be read in conjunction with our historical consolidated financial statements and their notes included in this report. This discussion contains forward-looking statements that reflect our current views with respect to future events and financial performance. Ouractual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, such as those set forth in "Item 3.Key Information—Risk Factors" and elsewhere in this report. A.Operating Results Segments and Continuing Operations Following the acquisition of five drybulk vessels in 2007, we reported our income in two segments, the tanker segment and the drybulk segment. In2011, we sold four of our drybulk vessels and held the fifth drybulk vessel for sale, the M/V Evian. As a result, we determined that as of December 31,2011, our drybulk segment should be reflected as discontinued operations. During 2012, we entered into a bareboat agreement to charter-out the M/V Evianthrough December 15, 2014 at a rate of $7,000 per day and decided to change the plan of sale of the M/V Evian. As of December 31, 2012, we reclassified theM/V Evian as held for use. As a result, the Dry bulk business was reclassified to continuing operations for all periods presented. In evaluating the ongoingbusiness operations, the Company determined that since tankers and dry bulk carriers have similar economic characteristics, and as the chief operatingdecision maker reviews operating results solely by revenue per day and operating results of the fleet, we concluded that in 2012 and 2013 we operated underone segment. Factors Affecting our Results of Operations We believe that the important measures for analyzing trends in the results of our operations for both tankers and drybulk vessels consist of thefollowing: ·Calendar days. We define calendar days as the total number of days the vessels were in our possession for the relevant period. Calendardays are an indicator of the size of our fleet during the relevant period and affect both the amount of revenues and expenses that we recordduring that period. ·Available days. We define available days as the number of calendar days less the aggregate number of days that our vessels are off-hire dueto scheduled repairs, or scheduled guarantee inspections in the case of newbuildings, vessel upgrades or special or intermediate surveys andthe aggregate amount of time that we spend positioning our vessels. Companies in the shipping industry generally use available days tomeasure the number of days in a period during which vessels should be capable of generating revenues. We have adjusted the calculationmethod of utilization to include available days in order to be comparable with shipping companies that calculate utilization using operatingdays divided by available days. 32Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. ·Operating days. We define operating days as the number of available days in a period less the aggregate number of days that our vessels areoff-hire due to unforeseen circumstances. The shipping industry uses operating days to measure the aggregate number of days in a periodthat our vessels actually generate revenues. ·Fleet utilization. We calculate fleet utilization by dividing the number of operating days during a period by the number of available daysduring that period. The shipping industry uses fleet utilization to measure a company's efficiency in finding suitable employment for itsvessels and minimizing the number of days that its vessels are off-hire for reasons other than scheduled repairs or scheduled guaranteeinspections in the case of newbuildings, vessel upgrades, special or intermediate surveys and vessel positioning. In all prior filings andreports, utilization was calculated by dividing operating days by calendar days. We have adjusted the calculation method in order to becomparable with most shipping companies, which calculate utilization using operating days divided by available days. ·Spot Charter Rates. Spot charter rates are volatile and fluctuate on a seasonal and year-to-year basis. Fluctuations derive from imbalances inthe availability of cargoes for shipment and the number of vessels available at any given time to transport these cargoes. ·Bareboat Charter Rates. Under a bareboat charter party, all operating costs, voyage costs and cargo-related costs are covered by thecharterer, who takes both the operational and the shipping market risk. ·TCE Revenues / TCE Rates. We define TCE revenues as revenues minus voyage expenses. Voyage expenses primarily consist of port,canal and fuel costs that are unique to a particular voyage, which would otherwise be paid by a charterer under a time charter, as well ascommissions. We believe that presenting revenues net of voyage expenses neutralizes the variability created by unique costs associated withparticular voyages or the deployment of vessels on the spot market and facilitates comparisons between periods on a consistent basis. Wecalculate daily TCE rates by dividing TCE revenues by operating days for the relevant time period. TCE revenues include demurragerevenue, which represents fees charged to charterers associated with our spot market voyages when the charterer exceeds the agreed upontime required to load or discharge a cargo. We calculate daily direct vessel operating expenses and daily general and administrative expensesfor the relevant period by dividing the total expenses by the aggregate number of calendar days that we owned each vessel for the period. In accordance with GAAP measures, we report revenues in our income statements and include voyage expenses among our expenses. However, in theshipping industry the economic decisions are based on vessels' deployment upon anticipated TCE rates, and industry analysts typically measure shippingfreight rates in terms of TCE rates. This is because under time-charter and bareboat contracts the customer usually pays the voyage expenses, while undervoyage charters the ship-owner usually pays the voyage expenses, which typically are added to the hire rate at an approximate cost. Consistent with industrypractice, management uses TCE as it provides a means of comparison between different types of vessel employment and, therefore, assists the decision-making process. Voyage Revenues Our voyage revenues are driven primarily by the number of vessels in our fleet, the number of operating days during which our vessels generaterevenues and the amount of daily charterhire that our vessels earn under charters, which, in turn, are affected by a number of factors, including our decisionsrelating to vessel acquisitions and disposals, the amount of time that we spend positioning our vessels, the amount of time that our vessels spend in dry-dockundergoing repairs, maintenance and upgrade work, the duration of the charter, the age, condition and specifications of our vessels, levels of supply anddemand in the global transportation market for oil products or bulk cargo and other factors affecting spot market charter rates such as vessel supply anddemand imbalances. Vessels operating on period charters, time charters or bareboat charters provide more predictable cash flows, but can yield lower profit margins thanvessels operating in the short-term, or spot, charter market during periods characterized by favorable market conditions. Vessels operating in the spot chartermarket, either directly or through a pool arrangement, generate revenues that are less predictable, but may enable us to capture increased profit margins duringperiods of improvements in charter rates, although we are exposed to the risk of declining charter rates, which may have a materially adverse impact on ourfinancial performance. If we employ vessels on period charters, future spot market rates may be higher or lower than the rates at which we have employed ourvessels on period time charters. Under a time charter, the charterer typically pays us a fixed daily charter hire rate and bears all voyage expenses, including the cost of bunkers (fueloil) and port and canal charges. We remain responsible for paying the chartered vessel's operating expenses, including the cost of crewing, insuring, repairingand maintaining the vessel, the costs of spares and consumable stores, tonnage taxes and other miscellaneous expenses, and we also pay commissions toCentral Mare, one or more unaffiliated ship brokers and to in-house brokers associated with the charterer for the arrangement of the relevant charter. 33Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Under a bareboat charter, the vessel is chartered for a stipulated period of time which gives the charterer possession and control of the vessel,including the right to appoint the master and the crew. Under bareboat charters all voyage and operating costs are paid by the charterer. As of the date of this annual report we don't own any operating vessels. We may in the future operate vessels in the spot market until the vessels havebeen chartered under appropriate medium to long-term charters. Voyage Expenses Voyage expenses primarily consist of port charges, including canal dues, bunkers (fuel costs) and commissions. All these expenses, exceptcommissions, are paid by the charterer under a time charter or bareboat charter contract. The amount of voyage expenses are primarily driven by the routesthat the vessels travel, the amount of ports called on, the canals crossed and the price of bunker fuels paid. Charter Hire Expenses Charter hire expenses include lease payments for vessels we charter-in. In October 2010, we entered into a bareboat charter-in agreement for the M/TDelos that required us to make lease payments through September 2015, however, in October 15, 2011, we terminated the bareboat charter for the M/T Delosand redelivered the vessel to its owners. Vessel Operating Expenses Vessel operating expenses include crew wages and related costs, the cost of insurance, expenses relating to repairs and maintenance, the costs ofspares and consumable stores, tonnage taxes and value added tax, or VAT, and other miscellaneous expenses for vessels that we own or lease under ouroperating leases. We analyze vessel operating expenses on a U.S. dollar/day basis. Additionally, vessel operating expenses can fluctuate due to factors beyondour control, such as unplanned repairs and maintenance attributable to damages or regulatory compliance and factors which may affect the shipping industryin general, such as developments relating to insurance premiums, or developments relating to the availability of crew. Dry-docking Costs Dry-docking costs relate to regularly scheduled intermediate survey or special survey dry-docking necessary to preserve the quality of our vessels aswell as to comply with international shipping standards and environmental laws and regulations. Dry-docking costs can vary according to the age of thevessel, the location where the dry-dock takes place, shipyard availability, local availability of manpower and material, the billing currency of the yard, thenumber of days the vessel is off-hire and the diversion necessary in order to get from the last port of employment to the yard and back to a position for the nextemployment. Please see "Item 18. Financial Statements—Note 2—Significant Accounting Policies." In the case of tankers, dry-docking costs may also beaffected by new rules and regulations. For further information please see "Item 4. Information on the Company—B. Business Overview—EnvironmentalRegulations." Management Fees—Third Parties These costs relate to management fees to non-related parties. Management Fees—Related Parties Since July 1, 2010, Central Mare, a related party controlled by the family of our Chief Executive Officer, has been performing all of our operational,technical and commercial functions relating to the chartering and operation of our vessels, except for the M/T Delos, pursuant to a Letter Agreement concludedbetween Central Mare and us as well as management agreements concluded between Central Mare and our vessel-owning subsidiaries. For further informationplease see "Item 4. Information on the Company—B. Business Overview—Management of the Fleet." General and Administrative Expenses Our general and administrative expenses include executive compensation paid to Central Mare, a related party controlled by the family of our ChiefExecutive Officer, for the provision of our executive officers, office rent, legal and auditing costs, regulatory compliance costs, other miscellaneous officeexpenses, non-cash stock compensation, and corporate overhead. Central Mare provides the services of the individuals who serve in the position of ChiefExecutive Officer, Chief Financial Officer, Executive Vice President and Chief Technical Officer as well as certain administrative employees. For furtherinformation please see "Item 18. Financial Statements—Note 7—Transactions with Related Parties." 34Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. General and administrative expenses are mainly Euro denominated, except for some legal fees and share-based compensation related expenses and aretherefore affected by the conversion rate of the U.S. dollar versus the Euro. Interest and Finance Costs We have historically incurred interest expense and financing costs in connection with vessel-specific debt. Interest expense was directly related withthe repayment schedule of our loans, the then prevailing LIBOR and the relevant margin. Currently the only liability we have that bears interest that fluctuatesaccording to the prevailing LIBOR rates relates to the outstanding balance of the termination fee outstanding (see Note 20 to our consolidated financialstatements included herein). Inflation Inflation has not had a material effect on our expenses. In the event that significant global inflationary pressures appear, these pressures wouldincrease our operating, voyage, administrative and financing costs. In evaluating our financial condition, we focus on the above measures to assess our historical operating performance and we use future estimates ofthe same measures to assess our future financial performance. In assessing the future performance of our fleet, the greatest uncertainty relates to future charterrates at the expiration of a vessel's present period employment, whether under a time charter or a bareboat charter. Decisions about future purchases and salesof vessels are based on the availability of excess internal funds, the availability of financing and the financial and operational evaluation of such actions anddepend on the overall state of the shipping market and the availability of relevant purchase candidates. Lack of Historical Operating Data for Vessels Before Their Acquisition Although vessels are generally acquired free of charter, we have acquired (and may in the future acquire) some vessels with time charters. Where avessel has been under a voyage charter, the vessel is usually delivered to the buyer free of charter. It is rare in the shipping industry for the last charterer of thevessel 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 andthe 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 (a"novation agreement") with the charterer to assume the charter. The purchase of a vessel itself does not transfer the charter because it is a separate agreementbetween the vessel owner and the charterer. Where we identify any intangible assets or liabilities associated with the acquisition of a vessel, we allocate the purchase price to identified tangibleand intangible assets or liabilities based on their relative fair values. Fair value is determined by reference to market data and the discounted amount ofexpected future cash flows. Where we have assumed an existing charter obligation or entered into a time charter with the existing charterer in connection withthe purchase of a vessel at charter rates that are less than market charter rates, we record a liability, based on the difference between the assumed charter rateand the market charter rate for an equivalent vessel. Conversely, where we assume an existing charter obligation or enter into a time charter with the existingcharterer in connection with the purchase of a vessel at charter rates that are above market charter rates, we record an asset, based on the difference between themarket charter rate for an equivalent vessel and the contracted charter rate. This determination is made at the time the vessel is delivered to us, and such assetsand liabilities are amortized as a reduction or increase to revenue over the remaining period of the charter. During 2011, 2012 and 2013, we did not acquire any vessels with existing time charter arrangements. When we purchase a vessel and assume or renegotiate a related time charter, we must take the following steps before the vessel will be ready tocommence operations: ·obtain the charterer's consent to us as the new owner; ·obtain the charterer's consent to a new technical manager; ·in some cases, obtain the charterer's consent to a new flag for the vessel; ·arrange for a new crew for the vessel, and where the vessel is on charter, in some cases, the crew must be approved by the charterer; ·replace all hired equipment on board, such as gas cylinders and communication equipment; 35Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. ·negotiate and enter into new insurance contracts for the vessel through our own insurance brokers; and ·register the vessel under a flag state and perform the related inspections in order to obtain new trading certificates from the flag state. The following discussion is intended to help you understand how acquisitions of vessels affect our business and results of operations. Our businessis comprised of the following main elements: ·employment and operation of tanker and drybulk vessels; and ·management of the financial, general and administrative elements involved in the conduct of our business and ownership of tanker anddrybulk vessels. The employment and operation of our vessels require the following main components: ·vessel maintenance and repair; ·crew selection and training; ·vessel spares and stores supply; ·contingency response planning; ·onboard safety procedures auditing; ·accounting; ·vessel insurance arrangement; ·vessel chartering; ·vessel security training and security response plans (ISPS); ·obtain ISM certification and audit for each vessel within the six months of taking over a vessel; ·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 our vessels requires thefollowing main 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 affect our profitability, cash flows and shareholders' return on investment include: ·charter rates and periods of charter hire for our tanker and drybulk vessels; 36Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. ·utilization of our tanker and drybulk vessels (earnings efficiency); ·levels of our tanker and drybulk vessels' operating expenses and dry-docking costs; ·depreciation and amortization expenses; ·financing costs; and ·fluctuations in foreign exchange rates. RESULTS OF OPERATIONS FOR THE FISCAL YEARS ENDED DECEMBER 31, 2011, 2012 AND 2013 The following table depicts changes in the results of operations for 2013 compared to 2012 and 2012 compared to 2011. Year Ended December 31, Change YE12 v YE11 YE13 v YE12 2011 2012 2013 $ % $ % ($ in thousands) Voyage Revenues 79,723 31,428 20,074 (48,295) -60,6% (11,354) -36.1%Other Income 872 - - (872) -100.0 - -%Voyage expenses 7,743 1,023 663 (6,720) -86.8% (360) -35.2%Charter hire expense 2,380 - - (2,380) -100.0% - -%Lease terminationexpense 5,750 - - (5,750) -100.0 - -%Vessel operating expenses 10,368 814 745 (9,554) -92.1% (69) -8.5%Dry-docking costs 1,327 - - (1,327) -100.0% - -%Depreciation 25,327 11,458 6,429 (13,869) -54.8% (5,029) -43.9%Management fees-thirdparties 439 - - (439) -100.0% - -%Management fees-relatedparties 5,730 2,345 1,351 (3,385) -59.1% (994) -42.4%General andadministrative expenses 15,364 7,078 3,258 (8,286) -53.9% (3,820) -54.0%Loss/(Gain) on sale ofvessels 62,543 - (14) (62,543) -100.0% (14) -100.0%Gain on disposal ofsubsidiaries - - (1,591) - - (1,591) -100.0%Impairment on vessels 114,674 61,484 - (53,190) -46.4% (61,484) -100.0%Expenses 251,645 84,202 10,841 (167,443) -66.5% (73,361) -87.1%Operating income (loss) (171,050) (52,774) 9,233 118,276 -69.1% 62,007 -117.5%Interest and finance costs (16,283) (9,345) (7,443) ( 6,938) -42.6% ( 1,902) -20.4%Loss on derivativefinancial instruments (1,793) (447) (171) (1,346) -75.1% (276) -61.7%Interest income 95 175 131 80 84.2% (44) -25.1%Other, net (81) (1,593) (342) 1,512 1866.7% (1,251) -78.5%Total other expenses,net (18,062) (11,210) (7,825) 6,852 -37.9% 3,385 -30.2%Net income (loss) (189,112) (63,984) 1,408 125,128 -66.2% 65,392 -102.2% The table below presents the key measures for each of the years 2011, 2012 and 2013. Please see "Item 3. Key Information—A. Selected Financial Data" for areconciliation of Average Daily TCE to revenues. Year Ended December 31, Change 2011 2012 2013 YE12 v YE11 YE13 vYE12 ($ in thousands) % % FLEET** Total number of vessels at end of period 7.0 7.0 0.0 0.0% -100.0%Average number of vessels 11.7 7.0 5.1 -40.3% -27.5%Total operating days for fleet under spot charters 520 0.0 0.0 -100.0% 0.0%Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Total operating days for fleet under time charters 1,109 124 0.0 -88.8% -100.0%Total operating days for fleet under bareboat charters 2,551 2,420 1,852 -5.1% -23.5%Average TCE ($/day) 17,220 11,951 10,484 -30.6% -12.3% ** Includes a bareboat chartered-in vessel (M/T Delos) up to October 2011. 37Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Year on Year Comparison of Operating Results 1. Voyage Revenues Year Ended December 31, Change 2011 2012 2013 YE12 v YE11 YE13 v YE12 ($ in thousands) $ % $ % Revenues 79,723 31,428 20,074 (48,295) -60.6% (11,354) -36.1%2013 vs. 2012 During 2013, revenues decreased by $11.4 million, or 36.1%, compared to 2012. This decrease was mainly due to the disposal of the subsidiarieswhich owned our 6 operating vessels in October 2013 (namely M/Ts Miss Marilena, Lichtenstein, UACC Shams, Britto, Hongbo and M/V Evian) thatresulted in a revenue decrease of $6.1 million, due to the sale of M/T UACC Sila in April of 2013 that resulted in a revenue decrease of $2.5 million, due to awrite off of $1.8 million in 2013 relating to uncollected revenue from the charterer of M/V Evian, due to a write off of $0.6 million in 2013 relating touncollected revenue from the charterer of M/T Miss Marilena and due to a collection in 2012 of a demurrage related claim of $0.4 million for the M/T Timeless(the vessel's lease was terminated in 2008), absent in 2013. 2012 vs. 2011 During 2012, revenues decreased by $48.3 million, or 60.6%, compared to 2011. This is due to the absence of revenue from the M/V Amalfi thatwas sold in August 2011, which contributed to the revenue decrease by $3.3 million, the absence of revenue from the M/V Astrale that was sold in July 2011,which contributed to the revenue decrease by $3.5 million, the absence of revenue from the M/V Cyclades that was sold in November 2011, whichcontributed to the revenue decrease by $13.4 million, the absence of revenue from the M/T Ioannis P. that was sold in November 2011, which contributed tothe revenue decrease by $8.0 million, the absence of revenue from the M/V Pepito that was sold in December 2011, which contributed to the revenue decreaseby $9.7 million, the absence of revenue from the M/T Delos the charter of which was terminated in October 2011, which contributed to the revenue decreaseby $5.1 million, and due to the absence of revenue from the M/V Evian due to early termination of its charter in January 2012 and the rechartering of thevessel at a significantly lower rate, which contributed to the revenue decrease by $6.3 million. These decreases in revenue were partially offset by the collectionin 2012 of a demurrage related claim of $0.4 million for the M/T Timeless (the vessel's lease was terminated in 2008) and the fact that the M/T UACC Silaand the M/T UACC Shams were re-chartered in April and May 2011, respectively, with a higher rate that led to an increase of revenue in 2012 of $0.3 millionand $0.3 million, respectively. 2. Other Income In 2011, we recognized $0.9 million of other income, relating to income from the sale of lubricants and bunkers to the new charterers of the M/TUACC Sila and M/T UACC Shams. Expenses 1.Voyage expenses Year Ended December 31, Change 2011 2012 2013 YE12 v YE11 YE13 v YE12 ($ in thousands) $ % $ % Voyage Expenses 7,743 1,023 663 (6,720) -86.8% (360) -35.2%Voyage expenses primarily consist of port charges, including bunkers (fuel costs), canal dues and commissions. 2013 vs. 2012 During 2013, voyage expenses decreased by $0.4 million, or 35.2%, compared to 2012. This decrease was mainly due to the disposal of thesubsidiaries which owned our 6 operating vessels in October 2013 (namely M/Ts Miss Marilena, Lichtenstein, UACC Shams, Britto, Hongbo and M/VEvian) that resulted in decreased voyage expenses of $0.2 million, due to the absence of voyage expenses (mainly fuel) of the M/T Delos that contributed to thevoyage expenses decrease by $0.1 million, a write off of voyage expenses in 2012 relating to brokerage commissions for the vessel M/V Cyclades that was soldin November 2011 amounting to $0.1 million and the reduction of voyage expenses relating to brokerage commissions for the vessel M/T UACC Sila due toits sale in April 2013 amounting to $0.1 million. These decreases were offset by increased voyage expenses for M/V Evian amounting to $0.1 million. 38Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 2012 vs. 2011 During 2012, voyage expenses decreased by $6.7 million, or 86.8%, compared to 2011 mainly as a result of the absence of expenses from the M/TIoannis P. that was sold in November 2011, which contributed to the voyage expenses decrease by $4.2 million, and the absence of expenses from the M/TDelos, the charter of which was terminated in October 2011, which contributed to the voyage expenses decrease by $2.0 million and the absence of expensesfrom the M/V Cyclades that was sold in November 2011, which contributed to the voyage expenses decrease by $0.6 million. 2.Charter hire expensesIn 2011, we incurred $2.4 million of charter hire expenses due to chartering-in of the M/T Delos for 9.5 months. 3.Lease termination expense In 2011, we terminated the bareboat charter for the M/T Delos and redelivered the vessel to its owners. The termination agreement provided for thepayment of an early termination fee of $5.75 million. 4.Vessel operating expenses Year Ended December 31, Change 2011 2012 2013 YE12 v YE11 YE13 v YE12 ($ in thousands) $ % $ % Vessel OperatingExpenses 10,368 814 745 (9,554) -92.1% (69) -8.5% 2013 vs. 2012 During 2013, vessel operating expenses decreased by $0.1 million, or 8.5%, compared to 2012 due to the fact that in 2013 we incurred $0.1 millionless operating expenses for the M/V Evian compared to 2012 (see note 15). 2012 vs. 2011 During 2012, vessel operating expenses decreased by $9.6 million, or 92.1%, compared to 2011 due to the fact that in 2012 we only had one vessel,the M/V Evian on time charter for five months and all of our other vessels, including the M/V Evian, after May 2012 were on bareboat charter and incurredminimal operating expenses, mainly relating to insurance and inspections. 5.Dry-docking costsDuring 2011, dry-docking costs amounted to $1.3 million due to the drydocking of M/V Pepito. 6.Vessel depreciation Year Ended December 31, Change 2011 2012 2013 YE12 v YE11 YE13 v YE12 ($ in thousands) $ % $ % Vessel Depreciation 25,327 11,458 6,429 (13,869) -54.8% (5,029) -43.9% 2013 vs. 2012 During 2013, vessel depreciation decreased by $5 million, or 43.9%, compared to 2012. This decrease was mainly due to the disposal of thesubsidiaries which owned 5 of our vessels in October 2013 (namely M/Ts Miss Marilena, Lichtenstein, UACC Shams, Britto, and Hongbo) that resulted inthe reduction of depreciation expense of $3.7 million. Furthermore the absence of depreciation for M/T UACC Sila in 2013 (as it was held for sale up to April2013 and then sold), further reduced depreciation expense by $1.9 million. These decreases were offset by increased depreciation expense for M/V Evian in2013 that amounted to $0.6 million, as it was held for sale in 2012 while in 2013 it was treated as held for use. 39Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 2012 vs. 2011 During 2012, vessel depreciation decreased by $13.9 million, or 54.8%, compared to 2011. This is due to the employment of M/V Amalfi up to itssale in August 2011, which resulted in a depreciation expense of $1.6 million, the employment of the M/V Astrale up to its sale in July 2011, which resultedin a depreciation expense of $2.1, the employment of the M/V Cyclades up to its sale in November 2011, which resulted in a depreciation expense of $2.8million, the employment of the M/T Ioannis P. up to its sale in November 2011, which resulted in a depreciation expense of $1.0 million, the employment ofthe M/V Pepito up to its sale in December 2011, which resulted in a depreciation expense of $4.0 million and finally due to the fact that M/V Evian wasdepreciated in 2011 but not in 2012 since it was classified as held for sale resulting in a difference of $2.4 million. 7.Management fees—third partiesDuring 2011, sub-manager fees amounted to $0.4 million 8.Management fees—related partiesFees paid to International Ship Management for the management of the M/T Delos are included in Management Fees—related parties. Please see "Item18. Financial Statements—Note 7—Transactions with Related Parties." Year Ended December 31, Change 2011 2012 2013 YE12 v YE11 YE13 v YE12 ($ in thousands) $ % $ % Management fees—related parties 5,730 2,345 1,351 (3,385) -59.1% (994) -42.4%2013 vs. 2012 During 2013, management fees for related parties decreased by $1.0 million or 42.4% compared to 2012. This is due to a reduction of managementfees by $1.8 million that resulted from the renegotiation of the management fee structure that became effective from January 1, 2013 which resulted in adecrease in variable management fees and the cancelation of fixed management fees (see F. Tabular Disclosure of Contractual Obligations—Other ContractualObligations). This decrease was offset by an increase in management fees resulting from termination fees payable as per the shipmanagement agreementsbetween Central Mare and the vessel owning subsidiaries of the six vessels sold on October 16, 2013, due to early termination without 12 months notice, thatamounted to $0.8 million. 2012 vs. 2011 During 2012, management fees for related parties decreased by $3.4 million or 59.1% compared to 2011. This is due to the reduced vessel-relatedmanagement fees due to the sale of M/V Amalfi in August 2011, which contributed to the management fees decrease by $0.3 million, the reduced vessel-relatedmanagement fees due to the sale of M/V Astrale in July 2011, which contributed to the management fees decrease by $0.3 million, the reduced vessel-relatedmanagement fees due to the sale of M/V Cyclades in November 2011, which contributed to the management fees decrease by $0.4 million, the reduced vessel-related management fees due to the sale of M/T Ioannis P. in November 2011, which contributed to the management fees decrease by $0.4 million, the reducedvessel-related management fees due to the sale of M/V Pepito in December 2011, which contributed to the management fees decrease by $0.5 million, thereduced vessel-related management fees due to the termination of M/T Delos charter in October 2011, which contributed to the management fees decrease by$0.3 million, and finally due to the reduction in the non-vessel related accounting and reporting fees in 2011 fixed management fees, which contributed to themanagement fees decrease by $1.2 million. 9.General and administrative expensesGeneral and administrative expenses include executive compensation paid to Central Mare, a related party controlled by the family of our ChiefExecutive Officer, for the provision of our executive officers, office rent, legal and auditing costs, regulatory compliance costs, other miscellaneous officeexpenses, non-cash stock compensation, and corporate overhead. Central Mare provides the services of the individuals who serve in the position of ChiefExecutive Officer, Chief Financial Officer, Executive Vice President and Chief Technical Officer, and certain administrative employees. For furtherinformation, please see "Item 18. Financial Statements—Note 7—Transactions with Related Parties." 40Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Year Ended December 31, Change 2011 2012 2013 YE12 v YE11 YE13 v YE12 ($ in thousands) $ % $ % General andAdministrativeExpenses 15,364 7,078 3,258 (8,286) -53.9% (3,820) -54.0%2013 vs. 2012 During 2013, our general and administrative expenses decreased by $3.8 million, or 54.0%, compared to 2012. This decrease is mainly due to a reduction inmanager and employee related expenses of $1.8 million as a result of our management's effort to contain costs. Also, during 2013, legal and consulting feesdecreased by $0.8 million, depreciation of other fixed assets (non-vessels) decreased by $0.7 million, due to the acceleration of leasehold improvementsdepreciation in our Athens office in 2012 (see F. Tabular Disclosure of Contractual Obligations—Operating Leases), other general and administrative expensesdecreased by $0.6 million, rent expense decreased by $0.4 million, travelling expenses decreased by $0.2 million and utilities and repairs decreased by $0.1million. These decreases were offset by an increase in bonuses of $0.8 million. 2012 vs. 2011 During 2012, our general and administrative expenses decreased by $8.3 million, or 53.9%, compared to 2011. This decrease is mainly due to a reduction inmanager and employee related expenses of $2.3 million as a result of our management's effort to contain costs. Also, during 2012, bonuses decreased by $1.4million, stock-based compensation expense decreased by $1.0 million, mainly due to the fact that most of our award plans granted to our senior managementand directors matured and were not renewed. Additionally, travelling expenses decreased by $0.8 million, depreciation of other fixed assets (non-vessels)decreased by $0.8 million, due to the acceleration of leasehold improvements depreciation in our Athens office (see F. Tabular Disclosure of ContractualObligations—Operating Leases), legal and consulting fees decreased by $0.7, rent expense decreased by $0.6 million and, other general and administrativeexpenses decreased by $0.5 million and audit fees decreased by $0.2 million. 10.(Loss)/Gain on sale of vessels Year Ended December 31, Change 2011 2012 2013 YE12 v YE11 YE13 v YE12 ($ in thousands) $ % $ % Loss/(Gain) on sale ofvessels 62,543 - (14) (62,543) -100% (14) -100%In April 2013, we sold the M/T UACC Sila and realized an immaterial gain from the sale since, as of December 31, 2012, we classified the vesselas held for sale and measured it at the lower of the carrying amount and fair value less costs to sell.During 2012, we did not sell any vessels.During 2011, we recognized a gain of $2.6 million from the sale of the M/T Ioannis P, , a loss of $40.0 million from the sale of the M/V Cycladesand a loss of $25.1 million from the sale of the M/V Pepito. 11.Loss on disposal of subsidiariesOn October 16, 2013 we sold the shipowning subsidiaries which owned the six vessels of our fleet (namely M/Ts Miss Marilena, Lichtenstein, UACCShams, Britto, Hongbo and M/V Evian) to an affiliate of the AMCI Poseidon Fund LP, an unrelated party, for an aggregate cash consideration of $173 millionless $135 million in debt and swap obligations of the Shipowning companies that were assumed by the buyers. This transaction resulted in a gain of $1.6million. 12.Impairment on vessels Year Ended December 31, Change 2011 2012 2013 YE12 v YE11 YE13 v YE12 ($ in thousands) $ % $ % Impairment onvessels 114,674 61,484 - (53,190) -46.4% (61,484) -100% During 2013, we did not recognize an impairment loss. 41Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. During 2012, we classified the M/T UACC Sila as held for sale and wrote the vessel down to fair value less costs to sell, resulting in an impairmentcharge of $17.0 million. Furthermore, in December 2012, we tested the M/T Miss Marilena, M/T Lichtenstein, M/T UACC Shams, M/T Britto and M/THongbo for impairment and their probability-weighted undiscounted expected cash flows were determined to be lower than the vessels carrying values.Consequently, we wrote the vessels down to their fair values and recognized an impairment charge of $46.6. The impairment charge was partially offset by awrite-up of $2.1 million for the M/V Evian, due to our classification of the M/V Evian as held for use as at December 31, 2012 and our measurement of thevessel at its fair value (see Note 18 to our consolidated financial statements included herein). During 2011, before the sale of the M/V Amalfi and the M/V Astrale and impairment charge was recognized of $29.6 million and $40 million,respectively. Furthermore, in June 2011, we tested the M/V Evian for impairment and we determined that its probability-weighted undiscounted expected cashflows were lower than the vessel's carrying value and consequently we wrote the vessel down to its fair value less costs to sell and recognized an impairmentcharge of $32.1 million. Finally, in December 2011 we classified the M/V Evian as held for sale and wrote the vessel down to fair value less costs to sell,resulting in an additional impairment charge of $13 million. 13.Interest and Finance Costs Year Ended December 31, Change 2011 2012 2013 YE12 v YE11 YE13 v YE12 ($ in thousands) $ % $ % Interest and financecosts (16,283) (9,345) (7,443) 6,938 -42.6% 1,902 -20.4% 2013 vs. 2012 During 2013, interest and finance costs decreased by $1.9 million, or 20.3% compared to 2012. The decrease is mainly due to a $2.7 milliondecrease in interest expense mainly from the reduction of debt outstanding due to the sale of the six shipowning companies that owned our fleet together with alltheir outstanding loan balances to AMCI Products Limited in October 2013 and a $0.4 million decrease in amortization of the debt discount relating toconvertible loans (in 2012 we terminated the conversion feature of our Laurasia facilities). These decreases were offset by a $0.6 million increase in otherfinancing costs resulting mainly from a $0.5 million fee charged by the bank holding the mortgage on the M/T Hongbo in order to permit the sale of the ship-owning company of the vessel to AMCI Products Limited, an increase of $0.4 million in amortization of finance fees resulting mainly from a $0.4 millionaccelerated amortization of finance fees outstanding of M/T UACC Sila due its sale in April 2013, a $0.2 million of interest expense relating to the M/T Delostermination fee outstanding (see F. Tabular Disclosure of Contractual Obligations - Operating Leases) that was absent in 2012 and a $0.1 million increase inbank charges. 2012 vs. 2011 During 2012, interest and finance costs decreased by $6.9 million, or 42.6%, compared to 2011. The decrease is mainly due to a $3.6 milliondecrease in amortization of the debt discount relating to convertible loans (in 2012 we terminated the conversion feature of our Laurasia facilities), a $2.8million decrease in interest expense mainly due to the reduction of debt outstanding due to the reduction of our fleet in 2011 and a $0.8 million decrease inamortization of finance fees. This was offset by a $0.3 million increase in other financing costs. 14.Loss on derivative financial instruments Year Ended December 31, Change 201120122013 YE12 v YE11 YE13 v YE12 ($ in thousands) $ % $ % Loss on Derivative Financial Instruments (1,793) (447)(171) 1,346 -75.1% 276 -61.7% 2013 vs. 2012 During 2013, fair value loss on derivative financial instruments decreased by $0.3 million, mainly due to the maturity of one swap with PiraeusBank (ex Egnatia Bank) in June 2013 and the maturity of another swap by HSH Nordbank AG, or HSH, in March 2013. Furthermore, two swaps with HSHwere transferred on October 16, 2013 to AMCI Products Limited as per the agreement for the sale of the ship-owning company of M/V Evian. 42Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 2012 vs. 2011 During 2012, fair value loss on derivative financial instruments decreased by $1.3 million, mainly due to the reduction in the time to maturity of allof our swaps and also due to the reduction in our total notional exposure as we terminated one swap with HSH, in August 2011, in connection with the sale ofM/V Amalfi, we terminated two swaps with RBS in November 2011, in connection with the sale of M/T Ioannis P., and one DVB swap matured in March2012. B. Liquidity and Capital Resources Since our formation, our principal source of funds has been equity provided by our shareholders through equity offerings or at the market sales,operating cash flow and long-term borrowing. Our principal use of funds has been capital expenditures to establish and grow our fleet, maintain the quality ofour vessels, comply with international shipping standards and environmental laws and regulations, fund working capital requirements and make principalrepayments on outstanding loan facilities. Our business is capital intensive and its future success will depend on our ability to maintain a high-quality fleet through the acquisition of newervessels and the selective sale of older vessels. Our practice has been to acquire vessels using a combination of funds received from equity investors and bankdebt secured by mortgages on our vessels. Future acquisitions are subject to management's expectation of future market conditions, our ability to acquirevessels on favorable terms and our liquidity and capital resources. During 2011, we raised $7.0 million of equity capital through a Common Stock Purchase Agreement entered into with Sovereign Holdings Inc., acompany controlled by our Chief Executive Officer in order to meet the urgent short-term liquidity needs of the Company, especially debt service obligations(see Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions). As of December 31, 2013, we had no debt facilities in place. As of December 31, 2013, our cash balances amounted to $11.4 million. Of this amount, $1.7 million is inaccessible to the Company as a result ofbeing held as cash collateral for the interest rate swap agreement we have with Alpha Bank (see "ITEM 11. Quantitative and Qualitative Disclosures aboutMarket Risk" - Interest Rate Risk"). Working Capital Requirements and Sources of Capital As of December 31, 2013, we had a working capital surplus (current assets less current liabilities) of $1.7 million. This working capital surplusconsisted of the following (figures in millions): Total current assets 10.3 Other current liabilities 7.5 Current portion of derivative financial instruments 1.1 Total current liabilities 8.6 Working capital surplus 1.7 Less other capital requirements for the coming 12 months: Management Fees 0.2 Cash surplus (Working capital surplus less other capital requirements) 1.5 Our material capital requirements in the coming 12 months are expected to be as follows (figures in millions): Interest payments (swaps) 1.1 Termination fee payments for M/T Delos 0.8 Termination fee interest for M/T Delos 0.1 Management Fees 0.2 Total material capital requirements: 2.2 After the balance sheet date, on February 6, 2014, we agreed to cancel the MOA we had entered into in December 16, 2013 and entered into a newagreement to purchase another 50,000 dwt newbuilding product/chemical tanker with a time charter from an entity also affiliated with the Company’sPresident, Chief Executive Officer and Director, Evangelos J. Pistiolis, scheduled for delivery from Hyundai Mipo Dockyard Co., Ltd. in May 2014. Thepurchase price of the newbuilding is $38.3 million, payable as follows: $7.4 million already paid in December 2013 for the purchase of the vessel we agreedon December 16, 2013; $3.5 million in cash payable in February 2014 and $27.4 million, payable in cash or shares at our option, on delivery of the vessel.Hence including this subsequent to the balance sheet date event, in the coming 12 months we will incur capital expenditure relating to vessel acquisitions forthe above-mentioned vessel amounting to $30.9 million. Out of these $30.9 million, $3.5 million is payable in cash and $27.4 million is payable in cash orshares at our option. 43Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Our operating cash flow for 2014 is expected to decrease compared to 2013, since we do not expect to generate any revenue until we take delivery ofour first newbuilding vessel in Q2 2014. We expect to finance our capital requirements through our cash balances, bank debt proceeds, debt and / or equityofferings and other sources such as funds from our major shareholder. Furthermore, the agreement we entered into in February concerning the purchase of HullS406 provides us with the option to pay the seller either in cash or in company shares at a conversion rate to be agreed at that date. Cash Flow Information Unrestricted cash and cash equivalents were $0.0 as of December 31, 2012 and $9.7 as of December 31, 2013 respectively. Net Cash Provided by Operating Activities. Net cash provided by operating activities decreased by $12.0 million, or 79.5%, for 2013 to $3.1 million, compared to $15,1 million for 2012. Indetermining net cash provided by operating activities, net loss is adjusted for the effects of certain non-cash items such as depreciation and amortization,impairment losses, gains and losses from sales of vessels and unrealized gains and losses on derivative financial instruments. Non-cash adjustments to reconcile net income to net cash provided by operating activities for the year ended December 31, 2013 totaled $5.0 million.This consisted mainly of the following adjustments: $6.8 million of depreciation expenses; $1.8 million of amortization of deferred finance fees; $0.3 millionrelating to share-based compensation. These adjustments were partially offset by a $2.3 million gain from the valuation of derivative financial instruments anda $1.6 million gain from disposal of subsidiaries. The cash inflow from operations resulted mainly from a $1.0 million decrease in current assets and a $4.3million decrease in current liabilities. Non-cash adjustments to reconcile net loss to net cash provided by operating activities for the year ended December 31, 2012 totaled $74 million.This consisted mainly of the following adjustments: $61.5 million of impairment losses; $12.5 million of depreciation expenses; $1.8 million ofamortization of deferred finance fees and debt discount; $0.4 million relating to share-based compensation; $0.3 million from an increase in provisions fordoubtful accounts and $0.2 million from the loss on sale of other fixed assets. These adjustments were partially offset by a $2.7 million gain from thevaluation of derivative financial instruments. The cash inflow from operations resulted mainly from a $3.8 million decrease in current assets and a $1.3million increase in current liabilities. Net Cash Provided By Investing Activities. Net cash provided by investing activities during 2013 was $51.0 million, consisting primarily from $25.2 million in proceeds from the sale of avessel and $37.6 million in net proceeds from the disposal of subsidiaries and a decrease in restricted cash of $2.6 million and $0.1 million from the sale ofother fixed assets. These were partially offset by a $14.4 million cash outflow for vessel acquisitions. Net cash provided by investing activities during 2012 was $6.0 million, consisting primarily from a decrease in restricted cash of $5.9 million and$0.1 million from the sale of other fixed assets. Net Cash Used in Financing Activities. Net cash used in financing activities for 2013 was $44.3 million, consisting primarily of $30.4 million of debt prepayments, relating to theprepayment of the facility of M/T UACC Sila that was sold in April 2013 and the prepayment of all our bridge loans in October 2013, $11.1 million ofscheduled debt repayments and $2.8 million payment of finance fees mainly relating to the bridge loans we prepaid. Net cash used in financing activities for 2012 was $21.1 million, consisting primarily of $16.7 million of scheduled debt repayments and $5.0million of debt prepayments relating to application of pledged amounts towards the outstanding balances in our loans with HSH and the prepayment of abridge loan we took for working capital purposes from Shipping Financial Services, a related party ultimately controlled by the family of our Chief ExecutiveOfficer, in May 2012 and repaid less than a week later. This cash outflow was offset by $0.5 million of proceeds from bridge loans from the abovementionedbridge loan. C. Research and Development, Patents and Licenses, Etc. Not applicable. 44Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. D. Trend Information For industry trends, refer to industry disclosure under "Item 4. Information on the Company—B. Business Overview." For company-specifictrends, refer to "Item 5. Operating and Financial Review and Prospects—Operating Results." E.Off-Balance Sheet ArrangementsNone. F.Tabular Disclosure of Contractual ObligationsThe following table sets forth our contractual obligations and their maturity dates as of December 31, 2013 in millions of dollars: Payments due by period Contractual Obligations: Total Less than 1year 1-3years 3-5 years More than 5years (1) Operating leases A $0.4 $0.0 $0.1 $0.1 $0.2 (2) (i) Termination fee payments for M/T Delos B $4.7 $0.8 $1.6 $2.3 $0.0 (ii) Termination fee interest for M/T Delos C $0.3 $0.1 $0.2 $0.0 $0.0 (3) Management Fee D $0.2 $0.2 $0.0 $0.0 $0.0 (4) Vessel acquisitions E $57.6 $0.0 $57.6 $0.0 $0.0 Total $63.2 $1.1 $59.5 $2.4 $0.2 A. Relates to the minimum rentals payable for the office space. B.Relates to the termination fee installments payable to the owners of the M/T Delos (Tranche A and Trance B) (see F. Tabular Disclosure of ContractualObligations - Operating Leases). C. Relates to the interest payments deriving from the M/T Delos termination agreement. We have assumed an interest rate of 3.24% going forward (fixedmargin of 3% plus a LIBOR estimate of 0.24%) (see F. Tabular Disclosure of Contractual Obligations - Operating Leases). D.Relates to our obligation for monthly fees under our latest letter agreement with Central Mare. These fees cover the provision of information-system relatedservices and services in connection with compliance to the Section 404 of the Sarbanes-Oxley Act of 2002 as well as services rendered in relation to themaintenance of proper books and records and services in relation to financial reporting requirements under Commission and NASDAQ rules. These feeshave been estimated up to the delivery of our first newbuilding product tanker. Please see "Item 4. Information on the Company—B. Business Overview—Central Mare—Letter Agreement and Management Agreements." After the acquisition of Hull S406 that we agreed on February 6, 2014, we will have anoperating vessel in May 2014 so the management fees will be renegotiated. E.Relates to the remaining installments of for the acquisition of our two newbuilding vessels in Q1 and Q3 of 2015. Please see "ITEM 7. MajorShareholders and Related Party Transactions - B. Related Party Transactions - Newbuilding Acquisitions". Note that after the acquisition of Hull S406that we agreed on February 6, 2014, and the cancelation of the acquisition of the newbuilding vessel due for delivery in Q1 2015, the contractualobligations for vessel acquisitions will be $30.9 million in 2014 and $28.0 million in 2015. Out of the $30.9 million payable in 2014, $3.5 million ispayable in cash and $27.4 million is payable in cash or shares at our option. (1) Debt Facilities: As of December 31, 2013, we had no outstanding indebtedness. (a) HSH Credit Facilities:Following the sale of the ship-owning companies of the vessels M/V Evian, M/T Miss Marilena, M/T UACC Shams and M/T Britto on October16, 2013, the balance under the HSH credit facility was transferred to the buyers.(b) DVB Credit Facility: Following the sale of the ship-owning company of the vessel M/T Hongbo on October 16, 2013, the balance under the DVB credit facility wastransferred to the buyers.(c) Alpha Bank Credit Facility: Following the sale of the ship-owning company of the vessel M/T Lichtenstein on October 16, 2013, the balance under the Alpha Bank credit facilitywas transferred to the buyers.(d) Laurasia Trading Ltd Credit Facility This facility was repaid in full on October 17, 2013. Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 45Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. (e) Shipping Financial Services Inc. Credit Facility The facility was repaid in full on October 22, 2013. (f) Central Mare Inc. Credit Facility The facility was repaid in full on October 24, 2013. (2) Operating Leases: On October 1, 2010, we entered into a bareboat charter agreement to lease the M/T Delos until September 30, 2015 at an average daily rate of$5,219. The charter agreement included the option for the charterers to purchase the M/T Delos at the end of the five year charter period. The bareboat charteragreement was accounted for as an operating lease. We terminated this agreement on October 15, 2011 by agreeing to pay a termination fee of $5.75 million.On January 1, 2013, we entered into an agreement with the owner of M/T Delos by which the termination fee outstanding as of December 31, 2012 thatamounted to $5.31 million was divided into two tranches; "Tranche A" ($4.5 million) that bears an interest of 3% plus Libor and "Tranche B" ($0.8 million)that doesn't bear interest. This agreement provides for the repayment of Tranche A and Tranche B according to the following schedule. As of December 31,2013, the termination fee outstanding was $4.7 million. Year ending December 31, Tranche A oftheTerminationFee Tranche B oftheTerminationFee 2014 0.8 2015 0.8 2016 0.8 2017 1.5 0.8 3.9 0.8 Finally, according to this agreement we pay monthly interest payments. We lease office space at 1, Vassilisis Sofias & Megalou Alexandrou Street, 151 24 Maroussi, Greece from an unrelated party. Our lease is for aduration of 12 years and began on May 2006 with a lessee's option for an extension of 10 years. We currently pay $0.04 million annually under the lease. As aresult of this agreement, we made a revision in the useful life of certain assets that would have been amortized over the life of the lease. The revision in usefullife of these assets resulted in an accelerated depreciation of $0.56 million included in general and administrative expenses for 2010 and an accelerateddepreciation of $0.9 million included in general and administrative expenses for 2011. On January 1, 2013, the agreement was amended again to reduce theannual rent to $0.04 million (based on the U.S. Dollar/Euro exchange rate as of December 31, 2013). It was also agreed to revert occupancy in an even largerarea of the leased office space. All other terms of the lease remained unchanged. The revision in useful life of these assets resulted in an accelerated depreciationof $0.62 million included in general and administrative expenses for 2012. Other Contractual Obligations: Since July 1, 2010, Central Mare, a related party controlled by the family of our Chief Executive Officer, has been performing all of our operational,technical and commercial functions relating to the chartering and operation of our vessels, pursuant to a letter agreement concluded between Central Mare andTop Ships and management agreements concluded between Central Mare and our then vessel-owning subsidiaries. The letter agreement was amended onJanuary 1, 2012 resulting in a decrease in the fixed management fees, with all other terms remaining unchanged. On January 1, 2013 we amended the letteragreement again resulting in a decrease in the variable management fees to $250 per vessel per day that includes operational, technical and commercialfunctions, services in connection with compliance with Section 404 of the Sarbanes-Oxley Act of 2002, services rendered in relation to our maintenance ofproper books and records, services in relation to our financial reporting requirements under SEC and Nasdaq rules and regulations, the provision ofinformation-system related services, commercial operations and freight collection services, with all other terms remaining unchanged. On October 16, 2013 theletter agreement was amended again and it now provides for a fixed monthly fee of $15,000 for the provision of all the abovementioned services, for the periodwhen we do not have any ships. On September 1, 2010, we entered into separate agreements with Central Mare, a related party controlled by the family of our Chief ExecutiveOfficer, pursuant to which Central Mare furnishes our executive officers to us. These agreements were entered into in exchange for terminating prioremployment agreements. In addition, on March 1, 2011, we entered into an agreement with Central Mare, pursuant to which Central Mare furnishes certainadministrative employees. On July 1, 2012 both of these agreements were amended and the salaries of the executive officers were reduced as was the number ofadministrative employees provided. Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.46Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Other major capital expenditures will include funding the maintenance program of regularly scheduled intermediate survey or special survey dry-docking necessary to preserve the quality of our vessels as well as to comply with international shipping standards and environmental laws and regulations.Although we have some flexibility regarding the timing of this maintenance, the costs are relatively predictable. Management anticipates that the vessels that areyounger than 15 years are required to undergo in-water intermediate surveys 2.5 years after a special survey dry-docking and that such vessels are to be dry-docked every five years. Vessels 15 years or older are required to undergo dry-dock intermediate survey every 2.5 years and not use in-water surveys for thispurpose. The abovementioned capital expenditures are not borne by us when our vessels are employed on bareboat charters. Critical Accounting Policies: The discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which havebeen prepared in accordance with USGAAP. The preparation of those financial statements requires us to make estimates and judgments that affect the reportedamount of assets and liabilities, revenues and expenses and related disclosure of contingent assets and liabilities at the date of our financial statements. Actualresults may differ from these estimates under different assumptions or conditions. Critical accounting policies are those that reflect significant judgments or uncertainties, and potentially result in materially different results underdifferent assumptions and conditions. We have described below what we believe are our most critical accounting policies that involve a higher degree ofjudgment and the methods of their application. For a description of all of our significant accounting policies, see Note 2 to our consolidated financialstatements included herein. Vessel depreciation. We record the value of our vessels at their cost (which includes the contract price, pre-delivery costs incurred during theconstruction of newbuildings, capitalized interest and any material expenses incurred upon acquisition such as initial repairs, improvements and deliveryexpenses to prepare the vessel for its initial voyage) less accumulated depreciation. We depreciate our vessels on a straight-line basis over their estimated usefullives, estimated to be 25 years from the date of initial delivery from the shipyard. Depreciation is based on cost of the vessel less its residual value which isestimated to be $160 per light-weight ton. A decrease in the useful life of the vessel or in the residual value would have the effect of increasing the annualdepreciation charge. A decrease in the useful life of the vessel may occur as a result of poor vessel maintenance performed, harsh ocean-going and weather conditions thatthe vessel is subject to, or poor quality of the shipbuilding yard. When regulations place limitations over the ability of a vessel to trade on a worldwide basis,the vessel's useful life is adjusted at the date such regulations become effective. Weak freight markets may result in owners scrapping more vessels andscrapping them earlier due to unattractive returns. An increase in the useful life of the vessel may result from superior vessel maintenance performed, favorableocean-going and weather conditions the vessel is subjected to, superior quality of the shipbuilding yard, or high freight rates which result in owners scrappingthe vessels later due to attractive cash flows. Impairment of vessels: We evaluate the carrying amounts and periods over which long-lived assets are depreciated on a semi-annual basis todetermine if events have occurred which would require modification to their carrying values or useful lives. In evaluating useful lives and carrying values oflong-lived assets, we review certain indicators of potential impairment, such as undiscounted projected operating cash flows, vessel sales and purchases,business plans and overall market conditions. We determine undiscounted projected net operating cash flows for each vessel and compare it to the vessel'scarrying value. If the carrying value of the related vessel exceeds its undiscounted future net cash flows, the carrying value is reduced to its fair value. Weestimate fair market value primarily through the use of third-party valuations performed on an individual vessel basis. The carrying values of our vessels may not represent their fair market value at any point in time since the market prices of second-hand vessels tendto fluctuate with changes in charter rates and the cost of newbuildings. During the past few years, the market values of vessels have experienced particularvolatility, with substantial declines in many vessel classes. As a result, the charter-free market value, or basic market value, of certain of our vessels mayhave declined below those vessels' carrying value, even though we would not impair those vessels' carrying value under our accounting impairment policy, dueto our belief that future undiscounted cash flows expected to be earned by such vessels over their operating lives would exceed such vessels' carrying amounts. Although we believe that the assumptions used to evaluate potential impairment are reasonable and appropriate, such assumptions are highlysubjective. There can be no assurance as to how long charter rates and vessel values will remain at their currently low levels or whether they will improve byany significant degree. Charter rates may remain at depressed levels for some time which could adversely affect our revenue and profitability, and futureassessments of vessel impairment. 47Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. In order to perform the undiscounted cash flow test, we make assumptions about future charter rates, commissions, vessel operating expenses, dry-dock costs, fleet utilization, scrap rates used to calculate estimated proceeds at the end of vessels' useful lives and the estimated remaining useful lives of thevessels. These assumptions are based on historical trends as well as future expectations. The projected net operating cash flows are determined by consideringthe charter revenues from existing time charters for the fixed fleet days and an estimated daily time charter equivalent for the unfixed days (based on acombination of three-year time charter rates for the next three years and the most recent eight-year average of the one-year time charter rates for each vessels'category) over the remaining useful life of each vessel, which we estimate to be 25 years from the date of initial delivery from the shipyard. Expected outflowsfor scheduled vessels' maintenance and vessel operating expenses are based on historical data, and adjusted annually assuming an average annual inflationderived from the most recent twenty-year average consumer price index. Effective fleet utilization, average commissions, dry-dock costs and scrap values arealso based on historical data. During 2011, charter rates decreased, resulting in the deterioration of asset values, but the drybulk carriers experienced the steepest drop. We sold allour dry bulk vessels during 2011 with the exception of the M/V Evian, which we had classified as held for sale at December 31, 2011. As a result, werecorded an impairment loss of $114 million for the year ended December 31, 2011 that is included in the accompanying statement of operations. We did notrecord an impairment charge for our tanker vessels in 2011 because we determined that the undiscounted cash flows for these vessels exceeded their bookvalues. During 2012, vessel oversupply decreased charter rates and further decreased vessel values. We considered these conditions as indicators of apotential impairment for our vessels. In December 2012, we tested the M/T Miss Marilena, M/T Lichtenstein, M/T UACC Shams, M/T Britto and M/THongbo for impairment and assigned a medium probability to sell them. This assumption, together with the deteriorating charter rates, significantly reducedthe probability-weighted undiscounted expected cash flows, which we determined to be lower than the vessels carrying values. Consequently we wrote thevessels down to their fair values and recognized an impairment charge of $46.6 million. During 2013 and up to June 30, fears of vessel oversupply and market disruptions led to high charter rate volatility and to a further decrease invessel values. These are conditions that we considered to be indicators of potential impairment. We performed the undiscounted cash flow test as of June 30,2013 and determined that the carrying amounts of our vessels held for use were recoverable. Derivatives. We designate our derivatives based upon the criteria established by the FASB in its accounting guidance for derivatives and hedgingactivities. The accounting guidance for derivatives requires that an entity recognizes all derivatives as either assets or liabilities in the statement of financialposition and measure those instruments at fair value. The accounting for the changes in the fair value of the derivative depends on the intended use of thederivative and the resulting designation. For a derivative that does not qualify as a cash flow hedge, the change in fair value is recognized at the end of eachaccounting period on the income statement. For a derivative that qualifies as a cash flow hedge, the change in fair value is recognized at the end of eachreporting period in accumulated other comprehensive income / (loss) (effective portion) until the hedged item is recognized in income. The ineffective portion ofa derivative's change in fair value is immediately recognized in the income statement. We have not applied hedge accounting to our interest rate swaps. Additionally, we have not adjusted the fair value of our derivative liabilities for non-performance risk as we expect to be able to perform under the contractual terms of our derivative agreements, such as making cash payments at periodic netsettlement dates or upon termination. Please refer to "Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—WorkingCapital Requirements and Sources of Capital" for further information. 48Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. New accounting pronouncements: There are no significant effects from new accounting pronouncements. See "Item 18. Financial Statements—Note 2—Significant Accounting Policies –Recent Accounting Pronouncements." G. Safe Harbor Forward-looking information discussed in Item 5 includes assumptions, expectations, projections, intentions and beliefs about future events. Thesestatements are intended as "forward-looking statements." We caution that assumptions, expectations, projections, intentions and beliefs about future eventsmay and often do vary from actual results and the differences can be material. Please see "Cautionary Statement Regarding Forward-Looking Statements" inthis annual report. ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES A. Directors and Senior Management Set forth below are the names, ages and positions of our directors, executive officers and key employees. Members of our Board of Directors areelected annually on a staggered basis and each director elected holds office for a three-year term. On February 15, 2012, three of our directors, Roy Gibbs,Marios Hamboullas, and Yiannakis C. Economou resigned from our Board of Directors following a decision by the Board to reduce administrativecosts. Following such resignation, our Board of Directors resolved to reduce its size from seven to four members. As a result of the reduction in the size of ourboard, we now have one independent director serving on our Board of Directors. Officers are elected from time to time by vote of our Board of Directors and hold office until a successor is elected.NameAgePositionEvangelos J. Pistiolis41Director, President, Chief Executive OfficerVangelis G. Ikonomou49Director, Executive Vice President and Chairman of the BoardAlexandros Tsirikos40Director, Chief Financial OfficerMichael G. Docherty54DirectorDemetris P. Souroullas51Chief Technical OfficerBiographical information with respect to each of our directors and executives is set forth below. Evangelos J. Pistiolis founded our Company in 2000, is our President and Chief Executive Officer and has served on our Board of Directors sinceJuly 2004. Mr. Pistiolis graduated from Southampton Institute of Higher Education in 1999 where he studied shipping operations and from TechnicalUniversity of Munich in 1994 with a bachelor's degree in mechanical engineering. His career in shipping started in 1992 when he was involved with the day-to-day operations of a small fleet of drybulk vessels. From 1994 through 1995 he worked at Howe Robinson & Co. Ltd., a London shipbroker specializingin container vessels. While studying at the Southampton Institute of Higher Education, Mr. Pistiolis oversaw the daily operations of Compass United MaritimeContainer Vessels, a ship management company located in Greece. Vangelis G. Ikonomou is our Executive Vice President and Chairman and has served on our Board of Directors since July 2004. Prior to joining theCompany, Mr. Ikonomou was the Commercial Director of Primal Tankers Inc. From 2000 to 2002, Mr. Ikonomou worked with George Moundreas &Company S.A. where he was responsible for the purchase and sale of second-hand vessels and initiated and developed a shipping industry researchdepartment. Mr. Ikonomou worked, from 1993 to 2000, for Eastern Mediterranean Maritime Ltd., a ship management company in Greece, in the commercialas well as the safety and quality departments. Mr. Ikonomou holds a Masters degree in Shipping Trade and Finance from the City University BusinessSchool in London, a Bachelors degree in Business Administration from the University of Athens in Greece and a Navigation Officer Degree from the HigherState Merchant Marine Academy in Greece. Alexandros Tsirikos has served as our Chief Financial Officer since April 1, 2009. Mr. Tsirikos, is a UK qualified Chartered Accountant (ACA)and has been employed with Top Ships Inc. since July 2007 as our Corporate Development Officer. Prior to joining Top Ships Inc., Mr Tsirikos was amanager with PricewaterhouseCoopers, or PwC, where he worked as a member of the PwC Advisory team and the PwC Assurance team thereby drawingexperience both from consulting as well as auditing. As a member of the Advisory team, he lead and participated in numerous projects in the public and theprivate sectors, involving strategic planning and business modeling, investment analysis and appraisal, feasibility studies, costing and project management.As a member of the Assurance team, Mr. Tsirikos was part of the International Financial Reporting Standards, or IFRS, technical team of PwC Greece andlead numerous IFRS conversion projects for listed companies. He holds a Master's of Science in Shipping Trade and Finance from City University of Londonand a Bachelor's Degree with honors in Business Administration from Boston University in the United States. He speaks English, French and Greek. 49Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Michael G. Docherty has served on our Board of Directors since July 2004 and has been member of the Audit Committee since February 2012. Mr.Docherty is a founding partner of Independent Average Adjusters Ltd., an insurance claims adjusting firm located in Athens, Greece, which he co-founded in1997. Mr. Docherty has 26 years of international experience handling maritime insurance claims. Demetris P. Souroullas is Chief Technical Officer of Top Ships Inc. and has been with our Company since 2007. Prior to joining the Company,and from 2001 onwards, Mr. Souroullas held the positions of Chief Executive Officer for the Fleet of Admibros Shipmanagement Co. Ltd and Technical andGeneral Manager of LMZ Transoil Shipmanagement S.A. Prior to that, Mr. Souroullas worked with the Cyprus Bureau of Shipping where he started in 1988as a Surveyor and left in 2001 as the Head of Classification. Mr. Souroullas holds a Masters degree in Naval Architecture from the University of Newcastleupon Tyne, and a Bachelors degree in Maritime Technology from the University of Wales Institute of Science and Technology. B. Compensation During the fiscal year ended December 31, 2013, we paid to the members of our senior management and to our directors aggregate compensation of$1.7 million. We do not have a retirement plan for our officers or directors. On September 1, 2010, we entered into separate agreements with Central Mare, a related party controlled by the family of our Chief ExecutiveOfficer, pursuant to which Central Mare furnishes our four executive officers to us as described below. These agreements were entered into in exchange forterminating prior employment agreements. Under the terms of our agreement with our Chief Executive Officer, we are obligated to pay annual base salary, a minimum cash bonus and stockcompensation of 50,000 common shares of the Company to be issued at the end of each calendar year vesting on the grant date. The initial term of theagreement expires on August 31, 2014; however, the agreement shall be automatically extended for successive one-year terms unless Central Mare or theCompany provides notice of non-renewal at least sixty days prior to the expiration of the then applicable term. If our Chief Executive Officer's employment is terminated without cause, he is entitled to certain personal and household security costs. If he isremoved from the Board of Directors or not re-elected, then his employment terminates automatically without prejudice to Central Mare's rights to pursuedamages for such termination. In the event of a change of control, Mr. Pistiolis is entitled to receive a cash payment of three million Euros, plus 147,243 ofour common shares. The agreement also contains death and disability provisions. In addition, Mr. Pistiolis is subject to non-competition and non-solicitationundertakings. Under the terms of the agreement for our Executive Vice President and Chairman, we are obligated to pay annual base salary and additional incentivecompensation as determined by the Board of Directors. The initial term of the agreement expired on August 31, 2011 and is automatically extended forsuccessive one-year terms unless Central Mare or the Company provides notice of non-renewal at least sixty days prior to the expiration of the then applicableterm. If our Executive Vice President and Chairman is removed from the Board of Directors or not re-elected, then his employment terminates automaticallywithout prejudice to Central Mare's rights to pursue damages for such termination. In the event of a change of control, he is entitled to receive a cash paymentof three years' annual base salary. The Agreement also contains death and disability provisions. In addition, our Executive Vice President and Chairman issubject to non-competition and non-solicitation undertakings. Under the terms of the agreement for our Chief Financial Officer, we are obligated to pay annual base salary and stock compensation of 20,000common shares, which were issued on December 21, 2009, of which 10,000 common shares vested on December 21, 2010 and 10,000 common shares vestedon December 21, 2011. The initial term of the agreement expired on August 31, 2012, subject to automatic extension for successive one-year terms unlessCentral Mare or the Company provides notice of non-renewal at least sixty days prior to the expiration of the then applicable term. If our Chief Financial Officer is removed from the Board of Directors or not re-elected, then his employment terminates automatically withoutprejudice to Central Mare's rights to pursue damages for such termination. In the event of a change of control, our Chief Financial Officer is entitled to receivea cash payment equal to three years' annual base salary and 55,000 of our common shares. The Agreement also contains death and disability provisions. Inaddition, our Chief Financial Officer is subject to non-competition and non-solicitation undertakings. 50Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Under the terms of our agreement for our Chief Technical Officer, we are obligated to pay annual base salary and stock compensation of 24,999common shares which were issued on October 29, 2010 and which vest ratably over a period of 15 months beginning in October 2010 and ended in December2011. The initial term of the agreement expired on August 31, 2011, however the agreement is being automatically extended for successive one-year termsunless Central Mare or the Company provides notice of non-renewal at least sixty days prior to the expiration of the then applicable term. In the event of achange of control the Chief Technical Officer is entitled to receive a cash payment equal to three years' annual base salary. In addition, our Chief TechnicalOfficer is subject to non-competition and non-solicitation undertakings. Equity Incentive Plan In April 2005, our Board of Directors adopted our 2005 Stock Incentive Plan, which was amended and restated in December 2009, or the Plan,under which our officers, key employees and directors may be granted options to acquire common stock. A total of 33,333 shares of common stock wereinitially reserved for issuance under the Plan, which is administered by the Board of Directors. The number of shares of common stock reserved for issuanceunder the Plan is currently 400,000. The Plan also provides for the issuance of stock appreciation rights, dividend equivalent rights, restricted stock,unrestricted stock, restricted stock units, and performance shares at the discretion of our Board of Directors. The Plan expires 10 years from the date of itsadoption. Please see "Item 18. Financial Statements—Note 13—Stock Incentive Plan" describing grants provided since the Plan's adoption. On February 12, 2013, we granted 50,000 shares to our Chief Executive Officer which were issued to Sovereign Holdings Inc., a company whollyowned by our Chief Executive Officer. The shares vest six months from the date of grant, with any unvested restricted stock vesting upon his terminationfrom the Company for any reason (including resignation). However, as the shares granted to our CEO do not contain any future service vesting conditions, allsuch shares are considered vested shares on the grant date. The fair value of each share on the grant date was $1.05. On September 26, 2013, we granted 90,000 shares to two of our officers. The shares vest six months from the date of grant, with any unvestedrestricted stock vesting upon their termination from the Company for any reason (including resignation). However, as these shares do not contain any futureservice vesting conditions, all such shares are considered vested shares on the grant date. The fair value of each share on the grant date was $1.88. On December 18, 2013, we granted 50,000 shares to our Chief Executive Officer which were issued on January 17 2014 to Sovereign Holdings Inc.,a company wholly owned by our Chief Executive Officer. The shares vest six months from the date of grant, with any unvested restricted stock vesting uponhis termination from the Company for any reason (including resignation). However, as the shares granted to our CEO do not contain any future service vestingconditions, all such shares are considered vested shares on the grant date. The fair value of each share on the grant date was $1.60. C. Board Practices On February 15, 2012, three of our directors, Roy Gibbs, Marios Hamboullas, and Yiannakis C. Economou resigned from our Board of Directorsfollowing a decision by the board to reduce administrative costs. Following such resignation, our Board of Directors resolved to reduce its size from seven tofour members. As a result of the reduction in the size of our Board, we now have one independent director serving on our Board of Directors. Our Board of Directors is divided into three classes. Members of our Board of Directors are elected annually on a staggered basis, and each directorelected holds office for a three-year term. The term of our Class I director, Michael G. Docherty, expires at the annual general meeting of shareholders in2014. The term of our Class II director, Evangelos J. Pistiolis, expires at the annual general meeting of shareholders in 2015. The term of our Class IIIdirectors, Alexandros Tsirikos and Vangelis G. Ikonomou, expires at the annual general meeting of shareholders in 2016. Committees of the Board of Directors We currently have an audit committee composed of one independent member, which pursuant to a written audit committee charter, is responsible forreviewing our accounting controls and recommending to the Board of Directors, the engagement of our outside auditors. Michael G. Docherty, whosebiographical details are included in Item 6 of this Annual Report, is the sole member of the audit committee, and our Board of Directors has determined that heis independent under the corporate governance rules of the Nasdaq Global Select Market. Prior to February 15, 2012, the members of our audit committee wereRoy Gibbs, Marios Hamboullas and Yiannakis C. Economou. 51Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. In June 2007, we established a compensation committee and a nominating and governance committee. Both committees are currently composed of onemember, Michael G. Docherty, who is an independent director. Prior to February 15, 2012, the members of our compensation and nominating and corporategovernance committees were Michael G. Docherty, Marios Hamboullas and Yiannakis C. Economou. The compensation committee carries out the Board ofDirectors's responsibilities relating to compensation of our executive and non-executive officers and provides such other guidance with respect to compensationmatters as the Committee deems appropriate. The nominating and governance committee assists the Board of Directors in: (i) identifying, evaluating andmaking recommendations to the Board of Directors concerning individuals for selections as director nominees for the next annual meeting of stockholders or tootherwise fill vacancies in the Board of Directors; (ii) developing and recommending to the Board of Directors a set of corporate governance guidelines andprinciples applicable to the Company; and (iii) reviewing the overall corporate governance of the Company and recommending improvements to the Board ofDirectors from time to time. As a foreign private issuer we are exempt from certain requirements of the Nasdaq Global Select Market which are applicable to U.S. listedcompanies. For a listing and further discussion of how our corporate governance practices differ from those required of U.S. companies listed on the NasdaqGlobal Select Market, please see Item 16G of this Annual Report. D. Employees We have no direct employees and our four executive officers and one other administrative employee are furnished to us pursuant to agreements withCentral Mare, as described above. During 2011, 2012 and 2013, our wholly-owned subsidiary Top Tanker Management employed on average 16, 7 and 2employees, respectively, all of whom are shore-based. Our current Fleet Manager, Central Mare, ensures that all seamen have the qualifications and licensesrequired to comply with international regulations and shipping conventions, and that our vessels employ experienced and competent personnel. As of December31, 2011, 2012 and 2013, we employed no sea going employees, directly or indirectly through our sub-managers. E. Share Ownership The common shares beneficially owned by our directors and senior managers and/or companies affiliated with these individuals are disclosed in"Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions." ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS A. Major Shareholders The following table sets forth the beneficial ownership of our common shares, as of December 31, 2013, held by: (i) each person or entity that weknow beneficially owns 5% or more of our common stock; (ii) each of our executive officers, directors and key employees; and (iii) all our executive officers,directors and key employees as a group. All of the shareholders, including the shareholders listed in this table, are entitled to one vote for each share ofcommon stock held. Name and Address of Beneficial Owner(1) Number ofSharesOwned Percent ofClass Evangelos Pistiolis (2) 9,285,280 53.7%Vangelis G. Ikonomou * * Alexandros Tsirikos * * Michael G. Docherty * * Demetris P. Souroullas * * Executive Officers and Directors as a Group 9,386,876 54.3%_________*Less than one percent. (1)Unless otherwise indicated, the business address of each beneficial owner identified is c/o Top Ships Inc., 1 Vas. Sofias and Meg. Alexandrou Str,15124 Maroussi, Greece. 52Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. (2)Mr. Pistiolis may be deemed to beneficially own these shares through Sovereign Holdings Inc., or Sovereign, a company wholly owned by Mr.Pistiolis. Pursuant to a Common Stock Purchase Agreement dated August 24, 2011, we issued 2,566,406 common shares to Sovereign onSeptember 1, 2011, and 11,111,111 common shares on October 19, 2011. Please see "Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Sovereign Equity Line Transaction" for further details. On December 4, 2012, Sovereign sold, in three separateprivate transactions, 765,000 Common Shares at a price of $1.265 per share, 705,000 Common Shares at a price of $1.28 per share, and750,000 Common Shares at a price of $1.27 per share. On December 6, 2012, Sovereign sold, in four separate private transactions, 454,760Common Shares at a price of $1.31 per share, 430,000 Common Shares at a price of $1.31 per share, 655,413 Common Shares at a price of $1.30per share, and 350,000 Common Shares at a price of $1.27 per share. On May 23, 2013, Sovereign sold, in a private transaction, 794,720Common Shares at a price of $1.46 per share. As of February 11, 2014, we had 27 shareholders of record, 15 of which were located in the United States and held an aggregate of 2,999,827shares of our common stock, representing 17.3% of our outstanding shares of common stock. However, one of the U.S. shareholders of record is Cede & Co.,which held 2,999,405 shares of our common stock as of February 11, 2014. We believe that the shares held by Cede & Co. include shares of commonstock 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 whichmay at a subsequent date result in our change of control. B. Related Party Transactions Please see "Item 18. Financial Statements—Note 7—Transactions with Related Parties." Newbuilding Acquisitions On December 5, 2013, we agreed to acquire a 39,000 dwt newbuilding product/chemical tanker from Monte Carlo 37 Shipping Company Limited,an entity affiliated with the Company's President, Chief Executive Officer and Director, Evangelos J. Pistiolis. The newbuilding is scheduled for delivery fromHyundai Mipo Dockyard Co., Ltd. in the third quarter of 2015. The purchase price of the newbuilding is $35.0 million, and is payable as follows: 20% asan initial deposit and 80% on delivery of the vessel.On December 16, 2013, we agreed to acquire a 50,000 dwt newbuilding product/chemical tanker with a time charter attached from Monte Carlo OneShipping Company Limited, an entity affiliated with the Company's President, Chief Executive Officer and Director, Evangelos J. Pistiolis. The newbuildingis scheduled for delivery from Hyundai Mipo Dockyard Co., Ltd. in the first quarter of 2015. The purchase price of the newbuilding is $37.0 million, and ispayable as follows: 20% as an initial deposit and 80% on delivery of the vessel.On February 6, 2014, we agreed to cancel the MOA we had entered into in December 16, 2013 and entered into a new agreement to purchase another50,000 dwt newbuilding product/chemical tanker with a time charter from an entity also affiliated with the Company's President, Chief Executive Officer andDirector, Evangelos J. Pistiolis, scheduled for delivery from Hyundai Mipo Dockyard Co., Ltd. in May 2014. The purchase price of the newbuilding is $38.3million, payable as follows: $7.4 million already paid in December 2013 for the purchase of the vessel we agreed on in December 16, 2013; $3.5 million incash payable in February 2014 and $27.4 million, payable in cash or shares at our option, on delivery of the vessel. Central Mare Letter Agreement, Management Agreements, and Other Agreements: On May 12, 2010, the Board of Directors agreed to outsource all of the commercial and technical management of our vessels to Central Mare Inc., orCentral Mare, a related party controlled by the family of our Chief Executive Officer. Since July 1, 2010 Central Mare has been performing all operational,technical and commercial functions relating to the chartering and operation of our vessels, pursuant to a letter agreement, or the Letter Agreement, concludedbetween Central Mare and Top Ships as well as management agreements concluded between Central Mare and our vessel-owning subsidiaries. Furthermore theletter agreement provided for the provision of services in connection with compliance with Section 404 of the Sarbanes-Oxley Act of 2002, services rendered inrelation to the maintenance of proper books and records, services in relation to financial reporting requirements under Commission and NASDAQ rules andregulations and information-system related services.Pursuant to an amendment of the Letter Agreement in January 1, 2013, we paid a management fee of $250 per day per vessel up to June 30 2013 and$258 per day per vessel up to October 16 2013. That fee included all the abovementioned services.On October 16, 2013, following the sale of our entire fleet, the letter agreement was amended so that for the period when we do not have any ships,Central Mare will be entitled to a monthly retainer of $15,000 in relation to compliance with Section 404 of the Sarbanes-Oxley Act of 2002, services renderedin relation to the maintenance of proper books and records, services in relation to financial reporting requirements under Commission and NASDAQ rulesand regulations and information-system related services. 53Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Also Central Mare will receive a chartering commission of 1.25% on all freight, hire and demurrage revenues; a commission of 1.00% of all grosssale proceeds or the purchase price paid for vessels; a commission of 0.2% on derivative agreements and loan financing or refinancing and a newbuildingsupervision fee of Euro 437,091 or approximately $602,749 per newbuilding vessel. All the abovementioned commissions and fees will apply only in the casethat the service is provided. Furthermore, if required, Central Mare will also handle and settle all claims arising out of its duties under the management agreements (other thaninsurance and salvage claims) in exchange for a fee of Euro 164 or approximately $226 per person per eight-hour day. Finally legal fees for claims and generalcorporate services incurred by Central Mare on behalf of the Company will be reimbursed to Central Mare at cost. This letter agreement had an initial term of five years after which it will continue to be in effect until terminated by either party subject to a twelve-month advance notice of termination. Pursuant to the terms of the management agreement, all fees payable to Central Mare are adjusted upwards 3% per annum on each anniversary dateof the agreement. Transactions with the Manager in Euros are settled on the basis of the EUR/USD on the invoice date. On September 1, 2013 we entered into a termination agreement with Central Mare, whereby Central Mare agreed to provide us a 30% discount on thetermination fees that were payable as per the shipmanagement agreements between Central Mare and the vessel owning subsidiaries of the six vessels we soldon October 16, 2013, due to early termination without 12 months notice. The termination fees due to Central Mare amounted to $0.8 million. As of December 31, 2013, $0.8 million is payable to Central Mare, and is reflected in the consolidated balance sheets as due to related parties.On September 1, 2010, we entered into separate agreements with Central Mare pursuant to which Central Mare furnishes our executive officers to us.These agreements were entered into in exchange for terminating prior employment agreements. See "Item 6—Compensation." On March 1, 2011, we enteredinto an agreement with Central Mare pursuant to which Central Mare furnishes certain employees to us including Corporate Development Officer and InternalAuditor as well as certain administrative employees. Under the terms of this, we are obligated to pay an annual base salary. See "Item 18. Financial Statements—Note 7—Transactions with Related Parties." On July 1, 2012, these agreements were amended and the salaries of the executive officers were reduced.Pursuant to the amendment of these agreements, Central Mare will no longer furnish us a Corporate Development Officer and the number of the administrativeemployees has been reduced. On July 16, 2011, we entered into an unsecured credit facility with Central Mare for Euro 1.8 million ($2.38 million) to be used for general workingcapital purposes. We had undertaken to repay the loan within twelve months of its receipt, however it was extended for another twelve months on July 21,2012. The loan bore interest at a rate of 8% per annum. The loan was repaid in full on October 24, 2013. Shipping Financial Services Inc. Credit Facility On July 1, 2011 we entered into an unsecured credit facility with Shipping Financial Services Inc., a related party ultimately controlled by the familyof our Chief Executive Officer, for Euro 0.35 million ($0.46 million) to be used for general working capital purposes. We had undertaken to repay the loanwithin twelve months of its receipt, however it was extended for another twelve months on July 8, 2012. The loan bore interest at a rate of 8% per annum. Theloan was repaid in full on October 22, 2013. Provision of Office Space in Monaco by Central Shipping Monaco SAM In September 2011, we entered into a lease agreement for one year for the provision of office space in Monaco, effective from October 1, 2011 withCentral Shipping Monaco SAM, a related party controlled by the family of our Chief Executive Officer and President. This agreement was extended throughDecember 2012 and then terminated. The monthly rent was $0.01 million. Renovation of Office Space in Athens by Pyramis Technical Co. S.A. Pyramis Technical Co. S.A., a related party controlled by the father of our Chief Executive Officer and President, has been responsible for therenovation of our office space in Athens, Greece. As of December 31, 2013, the total contracted cost amounted to Euro 3.2 ($4.4 million) over a period ofapproximately seven years. 54Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Sovereign Equity Line Transaction On August 24, 2011, we entered into a Common Stock Purchase Agreement with Sovereign. In this transaction, commonly known as an equity line,Sovereign committed to purchase up to $10,000,000 of our common shares, to be drawn from time to time at our request in multiples of $500,000 over thefollowing 12 months ("the Sovereign Equity Line Transaction"). Shares purchased under the Common Stock Purchase Agreement are priced at the greater of(i) $0.45 per share and (ii) a per share price of 35% of the volume weighted average price of our common stock for the previous 12 trading days. Also onAugust 24, 2011, we entered into a registration rights agreement with Sovereign, pursuant to which Sovereign has been granted certain demand registrationrights with respect to the shares issued to Sovereign under the Common Stock Purchase Agreement. In addition, on August 24, 2011, we entered into a lock-upagreement with Sovereign, pursuant to which Sovereign agreed not to sell shares acquired pursuant to the Common Stock Purchase Agreement for a periodstarting 12 months from each acquisition of such shares. We entered the Sovereign Equity Line Transaction to meet urgent short-term liquidity needs, especially our debt service obligations. The discount atwhich our shares are sold under the equity line was evaluated in the context of our urgent liquidity needs, the lack of alternatives available to us to raise capitaldue to unfavorable market conditions, the flexibility provided by the Sovereign transaction and the 12 month lock-up agreement that accompanied thetransaction which made the shares illiquid for Sovereign. The Board established a special committee composed of independent directors (the "Special Committee") to consider the Sovereign Equity LineTransaction and make a recommendation to the Board. In the course of its deliberations, the Special Committee hired an independent investment bank whichhad never previously done any work for us or for Sovereign and obtained a fairness opinion from that investment bank. On August 24, 2011, the SpecialCommittee determined that the Sovereign Equity Line Transaction was fair to and in our best interest and the best interests of our shareholders. Upon therecommendation of the Special Committee, the Board approved the Sovereign Equity Line Transaction on August 24, 2011, and we entered into the CommonStock Purchase Agreement on that date. We drew down $2.0 million under the Common Stock Purchase Agreement at a price of $0.7793 per share on September 1, 2011, and on October19, 2011, we drew down $5.0 million at a price of $0.45 per share. 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 We have not been involved in any legal proceedings which may have, or have had, a significant effect on our business, financial position, results ofoperations or liquidity, nor are we aware of any proceedings that are pending or threatened which may have a significant effect on our business, financialposition, 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. Thoseclaims, even if lacking merit, could result in the expenditure of significant financial and managerial resources. Dividend Distribution Policy On April 6, 2006, our Board of Directors decided to discontinue our policy of paying regular quarterly dividends. The declaration and payment ofany future special dividends shall remain subject to the discretion of the Board of Directors and shall be based on general market and other conditionsincluding our earnings, financial strength and cash requirements and availability. B.Significant ChangesAll significant changes have been included in the relevant sections. 55Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. ITEM 9. THE OFFER AND LISTING. A. Offer and Listing Details Price Range of Common Stock The trading market for our common stock is the Nasdaq Global Select Market, on which the shares are listed under the symbol "TOPS." Thefollowing table sets forth the high and low market prices for our common stock since our initial public offering of common stock at $330.00 per share on July23, 2004, as reported by the Nasdaq Global Select Market. All share prices have been adjusted to account for a 1-for-10 reverse stock split of our commonstock effected on June 24, 2011. The high and low market prices for our common stock for the periods indicated were as follows: HIGH LOW For the Fiscal Year Ended December 31, 2013 $2.93 $0.70 For the Fiscal Year Ended December 31, 2012 $5.20 $0.88 For the Fiscal Year Ended December 31, 2011 $11.60 $1.00 For the Fiscal Year Ended December 31, 2010 $13.00 $6.20 For the Fiscal Year Ended December 31, 2009 $38.80 $6.74 For the Quarter Ended March 31, 2014 (through February 13, 2014) $2.11 $1.50 December 31, 2013 $2.10 $1.30 September 30, 2013 $2.93 $1.31 June 30, 2013 $1.74 $1.16 March 31, 2013 $1.55 $0.70 December 31, 2012 $1.45 $0.88 September 30, 2012 $1.87 $1.11 June 30, 2012 $3.75 $1.21 March 31, 2012 $2.89 $1.00 For the Month February 2014 (through February 13, 2014) $1.74 $1.50 January 2014 $2.11 $1.60 December 2013 $2,10 $1,47 November 2013 $1,90 $1,30 October 2013 $1,99 $1,41 September 2013 $2,93 $1,63 August 2013 $2,40 $1,83 B. Plan of Distribution Not applicable C. Markets Shares of our common stock trade on the Nasdaq Global Select Market under the symbol "TOPS." D. Selling Shareholders Not applicable. E. Dilution Not applicable. 56Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. F. Expenses of the Issue Not applicable. ITEM 10. ADDITIONAL INFORMATION A. Share Capital Not applicable. B. Memorandum and Articles of Association Our purpose is to engage in any lawful act or activity for which corporations may now or hereafter be organized under the Marshall Islands BusinessCorporations Act, or BCA. Our Amended and Restated Articles of Incorporation and Amended and Restated By-laws do not impose any limitations on theownership rights of our shareholders. Under our Amended and Restated By-laws, annual shareholder meetings will be held at a time and place selected by our Board of Directors. The meetingsmay be held in or outside of the Marshall Islands. Special meetings of the shareholders, unless otherwise prescribed by law, may be called for any purpose orpurposes at any time exclusively by the Board of Directors. Notice of every annual and special meeting of shareholders shall be given at least 15 but not morethan 60 days before such meeting to each shareholder of record entitled to vote thereat. Directors. Our directors are elected by a plurality of the votes cast at a meeting of the shareholders by the holders of shares entitled to vote in theelection. Our Amended and Restated Articles of Incorporation and Amended and Restated By-laws prohibit cumulative voting in the election of directors. The Board of Directors must consist of at least one member and not more than twelve, as fixed from time to time by the vote of not less than 662/3%of the entire board. Each director shall be elected to serve until the third succeeding annual meeting of shareholders and until his successor shall have beenduly elected and qualified, except in the event of his death, resignation, removal, or the earlier termination of his term of office. The Board of Directors has theauthority to fix the amounts which shall be payable to the members of our Board of Directors, and to members of any committee, for attendance at any meetingor for services rendered to us. Classified Board Our Amended and Restated Articles of Incorporation provide for the division of our Board of Directors into three classes of directors, with each classas nearly equal in number as possible, serving staggered, three-year terms. Approximately one-third of our Board of Directors will be elected each year. Thisclassified board provision could discourage a third party from making a tender offer for our shares or attempting to obtain control of our company. It couldalso delay shareholders who do not agree with the policies of the Board of Directors from removing a majority of the Board of Directors for two years. Election and Removal Our Amended and Restated Articles of Incorporation and Amended and Restated by-laws require parties other than the Board of Directors to giveadvance written notice of nominations for the election of directors. Our Amended and Restated articles of incorporation provide that our directors may beremoved only for cause and only upon the affirmative vote of the holders of at least 80% of the outstanding shares of our capital stock entitled to vote for thosedirectors. These provisions may discourage, delay or prevent the removal of incumbent officers and directors. Dissenters' Rights of Appraisal and Payment Under the Business Corporation Act of the Republic of the Marshall Islands, or BCA, our shareholders have the right to dissent from variouscorporate actions, including any merger or sale of all or substantially all of our assets not made in the usual course of our business, and receive payment of thefair value of their shares. In the event of any further amendment of the articles, a shareholder also has the right to dissent and receive payment for his or hershares if the amendment alters certain rights in respect of those shares. The dissenting shareholder must follow the procedures set forth in the BCA to receivepayment. In the event that, among other things, the institution of proceedings in the circuit court in the judicial circuit in the Marshall Islands in which ourMarshall Islands office is situated. The value of the shares of the dissenting we and any dissenting shareholder fail to agree on a price for the shares, the BCAprocedures involve shareholder is fixed by the court after reference, if the court so elects, to the recommendations of a court-appointed appraiser. 57Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 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 thetransaction to which the action relates. Anti-takeover Provisions of our Charter Documents Several provisions of our Amended and Restated Articles of Incorporation and Amended and Restated by-laws may have anti-takeover effects. Theseprovisions are intended to avoid costly takeover battles, lessen our vulnerability to a hostile change of control and enhance the ability of our Board of Directorsto maximize shareholder value in connection with any unsolicited offer to acquire us. However, these anti-takeover provisions, which are summarized below,could also discourage, delay or prevent (1) the merger or acquisition of our company by means of a tender offer, a proxy contest or otherwise, that ashareholder may consider in its best interest and (2) the removal of incumbent officers and directors. Business Combinations Our Amended and Restated Articles of Incorporation include provisions which prohibit the Company from engaging in a business combination withan interested shareholder for a period of three years after the date of the transaction in which the person became an interested shareholder, unless: ·prior to the date of the transaction that resulted in the shareholder becoming an interested shareholder, the Board approved either thebusiness combination or the transaction that resulted in the shareholder becoming an interested shareholder; ·upon consummation of the transaction that resulted in the shareholder becoming an interested shareholder, the interested shareholder ownedat least 85% of the voting stock of the corporation outstanding at the time the transaction commenced; ·at or subsequent to the date of the transaction that resulted in the shareholder becoming an interested shareholder, the business combinationis approved by the Board and authorized at an annual or special meeting of shareholders by the affirmative vote of at least 66 2/3% of theoutstanding voting stock that is not owned by the interested shareholder; and ·the shareholder became an interested shareholder prior to the consummation of the initial public offering. Limited Actions by Shareholders Our Amended and Restated Articles of Incorporation and our Amended and Restated By-laws provide that any action required or permitted to betaken 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 our Amended and Restated By-laws provide that only our Board of Directors may callspecial meetings of our shareholders and the business transacted at the special meeting is limited to the purposes stated in the notice. Accordingly, ashareholder may be prevented from calling a special meeting for shareholder consideration of a proposal over the opposition of our Board of Directors andshareholder consideration of a proposal may be delayed until the next annual meeting. 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 byour shareholders, to issue up to 20,000,000 shares of blank check preferred stock. Our Board of Directors may issue shares of preferred stock on termscalculated to discourage, delay or prevent a change of control of our company or the removal of our management. 58Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Super-majority Required for Certain Amendments to Our By-Laws On February 28, 2007, we amended our by-laws to require that amendments to certain provisions of our by-laws may be made when approved by avote of not less than 66 2/3% of the entire Board of Directors. These provisions that require not less than 66 2/3% vote of the Board of Directors to beamended are provisions governing: the nature of business to be transacted at our annual meetings of shareholders, the calling of special meetings by our Boardof Directors, any amendment to change the number of directors constituting our Board of Directors, the method by which our Board of Directors is elected, thenomination procedures of our Board of Directors, removal of our Board of Directors and the filling of vacancies on our Board of Directors. Stockholders Rights Agreement We entered into a Stockholders Rights Agreement with Computershare Investor Services, LLC, as Rights Agent, as of August 19, 2005. Under thisAgreement, we declared a dividend payable of one right, or Right, to purchase one one-thousandth of a share of our Series A Participating Preferred Stock foreach outstanding share of our common stock, par value U.S.$0.01 per share. The Rights will separate from the common stock and become exercisable after(1) the 10th day after public announcement that a person or group acquires ownership of 15% or more of our common stock or (2) the 10th business day (orsuch later date as determined by our Board of Directors) after a person or group announces a tender or exchange offer which would result in that person orgroup holding 15% or more of our common stock. On the distribution date, each holder of a right will be entitled to purchase for $25 (the "Exercise Price") afraction (1/1000th) of one share of our preferred stock which has similar economic terms as one share of common stock. If an acquiring person (an "AcquiringPerson") acquires more than 15% of our common stock then each holder of a right (except that Acquiring Person) will be entitled to buy at the exercise price, anumber of shares of our common stock which has a market value of twice the exercise price. If after an Acquiring Person acquires more than 15% of ourcommon stock, we merge into another company or we sell more than 50% of our assets or earning power, then each holder of right (except for those owned bythe acquirer) will be entitled to purchase at the Exercise Price, a number of shares of common stock of the surviving entity which has a then current marketvalue of twice the Exercise Price. Any time after the date an Acquiring Person obtains more than 15% of our common stock and before that Acquiring Personacquires more than 50% of our outstanding common stock, we may exchange each right owned by all other rights holders, in whole or in part, for one shareof our common stock. The rights expire on the earliest of (1) August 31, 2015 or (2) the exchange or redemption of the rights as described above. We canredeem the rights at any time on or prior to the earlier of a public announcement that a person has acquired ownership of 15% or more of our common stock,or the expiration date. The terms of the rights and the Stockholders Rights Agreement may be amended without the consent of the rights holders at any time onor prior to the Distribution Date. After the Distribution Date, the terms of the rights and the Stockholders Rights Agreement may be amended to make changesthat do not adversely affect the rights of the rights holders (other than the Acquiring Person). The rights do not have any voting rights. The rights have thebenefit of certain customary anti-dilution protections. C. Material Contracts Attached 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.Descriptions are included within Item 5.B. with respect to our credit facilities, and Item 7.B. with respect to our related party transactions. Other than these contracts, we have no other material contracts, other than contracts entered into in the ordinary course of business, to which we are aparty. D. Exchange controls The Marshall Islands impose no exchange controls on non-resident corporations. E. Taxation The following is a discussion of the material Marshall Islands and U.S. federal income tax considerations relevant to an investment decision by aU.S. Holder and a non U.S. Holder, each as defined below, with respect to the common stock. This discussion does not purport to deal with the taxconsequences of owning common stock to all categories of investors, some of which, such as dealers in securities and investors whose functional currency isnot the U.S. dollar, may be subject to special rules. You are encouraged to consult your own tax advisors concerning the overall tax consequences arising inyour own particular situation under U.S. federal, state, local or foreign law of the ownership of common stock. 59Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Marshall Islands Tax Consequences We are incorporated in the Republic of the Marshall Islands. Under current Marshall Islands law, we are not subject to tax on income or capitalgains, and no Marshall Islands withholding tax will be imposed upon payments of dividends by us to our shareholders. U.S. Federal Income Tax Consequences The following are the material United States federal income tax consequences to us of our activities and to U.S. Holders and non U.S. Holders, eachas defined below, of our common stock. The following discussion of U.S. federal income tax matters is based on the U.S. Internal Revenue Code of 1986, asamended (the "Code"), judicial decisions, administrative pronouncements, and existing and proposed regulations issued by the U.S. Department of theTreasury (the "Treasury Regulations"), all of which are subject to change, possibly with retroactive effect. The discussion below is based, in part, on thedescription of our business in "Information on the Company—Business Overview, Item 4.B." above and assumes that we conduct our business as describedin that section. Except as otherwise noted, this discussion is based on the assumption that we will not maintain an office or other fixed place of businesswithin the United States. References in the following discussion to "we" and "us" are to Top Ships Inc. and its subsidiaries on a consolidated basis. U.S. Federal Income Taxation of Our Company Taxation of Operating Income: In General Unless exempt from U.S. federal income taxation under the rules discussed below, a foreign corporation is subject to U.S. federal income taxation inrespect 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 theparticipation in a pool, partnership, strategic alliance, joint operating agreement, code sharing arrangements or other joint venture it directly or indirectly ownsor 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 theextent that the shipping income is derived from sources within the United States. For these purposes, 50% of shipping income that is attributable totransportation that begins or ends, but that does not both begin and end, in the United States constitutes income from sources within the United States, whichwe refer to as "U.S.-source shipping income." Shipping income attributable to transportation that both begins and ends in the United States is considered to be 100% from sources within theUnited States. We are not permitted by law to engage in transportation that produces income which is considered to be 100% from sources within the UnitedStates. Shipping income attributable to transportation exclusively between non-U.S. ports will be considered to be 100% derived from sources outside theUnited States. Shipping income derived from sources outside the United States will not be subject to any U.S. federal income tax. In the absence of exemption from tax under Section 883 of the Code, our gross U.S.-source shipping income would be subject to a 4% tax imposedwithout allowance for deductions as described below. Exemption of Operating Income from U.S. Federal Income Taxation Under Section 883 of the Code and the regulations there under, we will be exempt from U.S. federal income tax on our U.S.-source shipping incomeif: (1)we are organized in a foreign country, or our country of organization, that grants an "equivalent exemption" to corporations organized in theUnited States; and (2)either (A)more than 50% of the value of our stock is owned, directly or indirectly, by individuals who are "residents" of our country oforganization or of another foreign country that grants an "equivalent exemption" to corporations organized in the United States(each such individual a "qualified shareholder" and such individuals collectively, "qualified shareholders"), which we refer to asthe "50% Ownership Test," or 60Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. (B)our stock is "primarily and regularly traded on an established securities market" in our country of organization, in anothercountry 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 and Liberia, the jurisdictions where we and our ship-owning subsidiaries are incorporated, each grant an "equivalentexemption" to U.S. corporations. Therefore, we will be exempt from U.S. federal income tax with respect to our U.S.-source shipping income if either the 50%Ownership Test or the Publicly-Traded Test is met. Based on information provided in Schedule 13D and Schedule 13G filings with the SEC and ownership certificates that we obtained from certain ofour shareholders, we believe that we meet the 50% Ownership Test for the taxable year 2013 since more than 50% of the value of our common stock wasowned, directly or indirectly, by one or more qualified shareholders. Therefore, we believe that for taxable year 2013, we will be exempt from U.S. federalincome tax with respect to our U.S.-source shipping income. In addition, as discussed below, we believe that we also meet the Publicly Traded Test for thetaxable year 2013. Treasury Regulations provide, in pertinent part, that stock of a foreign corporation will be considered to be "primarily traded" on an establishedsecurities market if the number of shares of each class of stock that are traded during any taxable year on all established securities markets in that countryexceeds the number of shares in each such class that are traded during that year on established securities markets in any other single country. Our commonstock, which is our sole class of issued and outstanding stock, is and we anticipate will continue to be "primarily traded" on the Nasdaq Global SelectMarket. Under the Treasury Regulations, our common stock will be considered to be "regularly traded" on an established securities market if one or moreclasses of our stock representing more than 50% of our outstanding shares, by total combined voting power of all classes of stock entitled to vote and totalvalue, is listed on the market, which we refer to as the "listing threshold." Since our common stock, our sole class of stock, is listed on the Nasdaq GlobalSelect Market, we will satisfy 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 be 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 "tradingfrequency test"; and (ii) the aggregate number of shares of such class of stock traded on such market is at least 10% of the average number of shares of suchclass 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." Webelieve we will satisfy the trading frequency and trading volume tests. Even if this were not the case, the Treasury Regulations provide that the tradingfrequency and trading volume tests will be deemed satisfied if, as is the case with our common stock, such class of stock is traded on an establishedsecurities market in the United States and such stock is regularly quoted by dealers making a market in such stock. Notwithstanding the foregoing, the Treasury Regulations provide, in pertinent part, that a class of our stock will not be considered to be "regularlytraded" on an established securities market for any taxable year if 50% or more of the vote and value of the outstanding shares of such class of stock areowned, actually or constructively under specified stock attribution rules, on more than half the days during the taxable year by persons who each own 5% ormore of the vote and value of the outstanding shares of such class of stock, which we refer to as the "5% Override Rule." For purposes of being able to determine the persons who own 5% or more of our stock, or "5% Shareholders," the Treasury Regulations permit us torely on those persons that are identified on Schedule 13G and Schedule 13D filings with the SEC, as having a 5% or more beneficial interest in our commonstock. The Treasury Regulations further provide that an investment company identified on a SEC Schedule 13G or Schedule 13D filing which is registeredunder the Investment Company Act of 1940, as amended, will not be treated as a 5% shareholder for such purposes. In the event the 5% Override Rule is triggered, the Treasury Regulations provide that the 5% Override Rule will not apply if we can establish thatamong the closely-held group of 5% Shareholders, there are sufficient 5% Shareholders that are considered to be qualified shareholders for purposes of Section883 of the Code to preclude non-qualified 5% Shareholders in the closely-held group from owning 50% or more of each class of our stock for more than halfthe number of days during such year. To establish and substantiate this exception to the 5% Override Rule, our 5% Shareholders who are qualifiedshareholders for purposes of Section 883 of the Code must comply with ownership certification procedures attesting that they are residents of qualifyingjurisdictions, and each intermediary or other person in the chain of ownership between us and such 5% Shareholder must undertake similar complianceprocedures. For the 2013 taxable year, we believe that the 5% Override Rule was triggered as 50% or more of the vote and value of our common stock was ownedby 5% Shareholders on more than half of the days during the taxable year. Nevertheless, we believe that we qualify for the exception to the 5% Override Rulebecause each 5% Shareholder is a qualified shareholder for purposes of Section 883 of the Code and the substantiation requirements have beensatisfied. Therefore, we believe that we qualified for the exemption under Section 883 of the Code for the 2013 taxable year. However, due to the factual natureof the issues, no assurances can me made that we will continue to qualify for the benefits of Section 883 of the Code for any future taxable year. 61Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Taxation in the Absence of Exemption under Section 883 of the Code To the extent the benefits of Section 883 of the Code are unavailable, our U.S.-source shipping income, to the extent not considered to be "effectivelyconnected" 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 grossbasis, 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 than50% 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 shippingincome would never exceed 2% under the 4% gross basis tax regime. To the extent the benefits of the exemption under Section 883 of the Code are unavailable and 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, netof applicable deductions, would be subject to the U.S. federal corporate income tax currently imposed at rates of up to 35%. In addition, we may be subject tothe 30% "branch profits" tax on earnings effectively connected with the conduct of such U.S. trade or business, as determined after allowance for certainadjustments, 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 ·substantially all of our U.S.-source shipping income is attributable to regularly scheduled transportation, such as the operation of a vesselthat follows a published schedule with repeated sailings at regular intervals between the same points for voyages that begin or end in theUnited States. We do not currently have, nor intend to have or permit circumstances that would result in having, any vessel operating to the United States on aregularly scheduled basis. Based on the foregoing and on the expected mode of our shipping operations and other activities, we believe that none of our U.S.-source shipping income will be "effectively connected" with the conduct of a U.S. trade or business. U.S. 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 togain 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, asale 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 tothe 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. U.S. Federal Income Taxation of U.S. Holders As used herein, the term "U.S. Holder" means a beneficial owner of our common stock that ·is a U.S. citizen or resident, 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 theadministration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust; ·owns the common stock as a capital asset, generally, for investment purposes; and ·owns less than 10% of our common stock for U.S. federal income tax purposes. If a partnership holds our common stock, the tax treatment of a partner of such partnership will generally depend upon the status of the partner andupon the activities of the partnership. If you are a partner in a partnership holding our common stock, you are encouraged to consult your tax advisor. 62Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Distributions Subject to the discussion of passive foreign investment companies, or PFIC, below, any distributions made by us with respect to our common stockto a U.S. Holder will generally constitute dividends to the extent of our current or accumulated earnings and profits, as determined under U.S. federal incometax principles. Distributions in excess of such earnings and profits will be treated first as a nontaxable return of capital to the extent of the U.S. Holder's taxbasis in his common stock on a dollar-for-dollar basis and thereafter as capital gain. Because we are not a U.S. corporation, U.S. Holders that arecorporations will not be entitled to claim a dividends received deduction with respect to any distributions they receive from us. Dividends paid with respect toour common stock will generally be treated as "passive category income" for purposes of computing allowable foreign tax credits for U.S. foreign tax creditpurposes. Dividends paid on our common stock to a U.S. Holder who is an individual, trust or estate (a "U.S. Non-Corporate Holder") will generally be treatedas "qualified dividend income" that is taxable to such U.S. Non-Corporate Holder at preferential tax rates provided that (1) the common stock is readilytradable on an established securities market in the United States (such as the Nasdaq Global Select Market on which our common stock is traded); (2) we arenot a PFIC for the taxable year during which the dividend is paid or the immediately preceding taxable year (as discussed in more detail below); (3) the U.S.Non-Corporate Holder has owned the common stock for more than 60 days in the 121-day period beginning 60 days before the date on which the commonstock becomes ex-dividend; and (4) the U.S. Non-Corporate Holder is not under an obligation to make related payments with respect to positions insubstantially similar or related property. As discussed below, we believe that we were treated as a PFIC for our 2013 taxable year. Assuming this is the case, any dividends paid by us during2013 and 2014 will not be treated as "qualified dividend income" in the hands of a U.S. Non-Corporate Holder. Any dividends we pay which are not eligiblefor the preferential rates applicable to "qualified dividend income" will be taxed as ordinary income to a U.S. Non-Corporate 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 10% of ashareholder's adjusted tax basis in a common share. If we pay an "extraordinary dividend" on our common stock that is treated as "qualified dividendincome," then any loss derived by a U.S. Non-Corporate Holder from the sale or exchange of such common stock will be treated as long-term capital loss tothe extent of such dividend. Sale, Exchange or other Disposition of Common Stock Subject to the discussion of our status as a PFIC below, a U.S. Holder generally will recognize taxable gain or loss upon a sale, exchange or otherdisposition of our common stock in an amount equal to the difference between the amount realized by the U.S. Holder from such sale, exchange or otherdisposition and the U.S. Holder's tax basis in such stock. Such gain or loss will be treated as long-term capital gain or loss if the U.S. Holder's holding periodis greater than one year at the time of the sale, exchange or other disposition. Such capital gain or loss 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. 3.8% Tax on Net Investment Income For taxable years beginning after December 31, 2012, a U.S. Holder that is an individual, estate, or, in certain cases, a trust, will generally be subject to a3.8% tax on the lesser of (1) the U.S. Holder's net investment income for the taxable year and (2) the excess of the U.S. Holder's modified adjusted grossincome for the taxable year over a certain threshold (which in the case of individuals is between $125,000 and $250,000). A U.S. Holder's net investmentincome will generally include distributions made by us which constitute a dividend for U.S. federal income tax purposes and gain realized from the sale,exchange or other disposition of our common stock. This tax is in addition to any income taxes due on such investment income. If you are a U.S. Holder that is an individual, estate or trust, you are encouraged to consult your tax advisors regarding the applicability of the 3.8%tax on net investment income to the ownership and disposition of our common stock. Passive Foreign Investment Company 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 incometax purposes. In general, we will be treated as a PFIC with respect to a U.S. Holder if, for any taxable year in which such holder held our common stock, either ·at least 75% of our gross income for such taxable year consists of passive income (e.g., dividends, interest, capital gains and rents derivedother than in the active conduct of a rental business); or 63Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. ·at least 50% of the average value of the assets held by the corporation during such taxable year produce, or are held for the production of,passive income. For purposes of determining whether we are a PFIC, we will be treated as earning and owning our proportionate share of the income and assets,respectively, of any of our subsidiary corporations in which we own at least 25% of the value of the subsidiary's stock. Income earned, or deemed earned, byus in connection with the performance of services would not constitute "passive income" for these purposes. By contrast, rental income would generallyconstitute "passive income" unless we were treated under specific rules as deriving our rental income in the active conduct of a trade or business. In general, income derived from the bareboat charter of a vessel will be treated as "passive income" for purposes of determining whether we are aPFIC and such vessel will be treated as an asset which produces or is held for the production of "passive income." On the other hand, income derived fromthe time charter of a vessel should not be treated as "passive income" for such purpose, but rather should be treated as services income; likewise, a timechartered vessel should generally not be treated as an asset which produces or is held for the production of "passive income." For our 2013 taxable year, at least 50% of the average value of our assets consisted of vessels which were bareboat chartered and at least 75% of ourgross income was derived from vessels on bareboat charter. Therefore, we believe that we were a PFIC for our 2013 taxable year. Since we are a PFIC, a U.S. Holder will be treated as owning his proportionate share of the stock of any of our subsidiaries which is a PFIC. Weexpect that certain of our subsidiaries were PFICs in 2013 and, therefore, a U.S. Holder will be treated as owning stock in such PFICs. The PFIC rulesdiscussed below will apply on a company-by-company basis with respect to us and each of our subsidiaries which is treated as a PFIC. Since we are a PFIC, a U.S. Holder will be subject to different taxation rules depending on whether the U.S. Holder (1) makes an election to treat usas a "Qualified Electing Fund," which is referred to as a "QEF election," (2) makes a "mark-to-market" election with respect to our common stock, or (3)makes no election and, therefore, is subject to the Default PFIC Regime (as defined below). As discussed in detail below, making a QEF election or a mark-to-market election generally will mitigate the otherwise adverse U.S. federal income tax consequences under the Default PFIC Regime. However, the mark-to-market election may not be possible with respect to our subsidiaries which are treated as PFICs. Assuming we are treated as a PFIC, a U.S. Holder will haveto file IRS Form 8621 with the U.S. Internal Revenue Service, or the IRS, under Section 1298(f) of the Code. The QEF Election We do not intend to provide U.S. Holders with the necessary information to make and maintain a QEF election. Accordingly, U.S. Holders will notbe able to make or maintain a QEF election with respect to our common stock. U.S. Holders who have made a QEF election with respect to our common stockprior to the 2013 taxable year should be aware that the IRS has wide discretion to invalidate or terminate their QEF election if we do not provide the necessaryinformation, and with respect to a termination the IRS has the discretion to determine the effective date of the termination. The IRS also has wide discretion indetermining the U.S. federal income tax consequences of an invalidation or termination of a QEF election, including treating the invalidation or termination asa deemed sale of our common stock on the last day of our taxable year during which the QEF election was effective. Any gain, but not loss, would berecognized by the U.S. Holder and appropriate adjustments would be made to the tax basis and holding period of the U.S. Holder's common stock. The IRSalso has the authority to subject to the U.S. Holder to any other terms and conditions that the IRS determines are necessary to ensure compliance with the PFICrules. If a U.S. Holder who has made a QEF election with respect to our common stock prior to the 2013 taxable year makes a mark-to-market election, asdiscussed below, for the 2013 taxable year, such U.S. Holder's QEF election will automatically terminate. The termination of the QEF election would beeffective on the last day of the U.S. Holder's taxable year preceding the first taxable year for which the mark-to-market election is in effect with respect to ourcommon stock. If you are a U.S. Holder who has made a QEF election with respect to our common stock prior to the 2013 taxable year, you are stronglyencouraged to consult your tax advisor regarding the consequences of not receiving from us the information necessary to maintain the QEF electionand the U.S. federal income tax consequences to you of the invalidation or termination of your QEF election, including whether you shouldautomatically terminate your QEF election by making a mark-to-market election with respect to our common stock for the 2013 taxable year. 64Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Taxation of U.S. Holders Making a "Mark-to-Market" Election Making the Election. Alternatively, if, as is anticipated, our common stock is treated as "marketable stock," a U.S. Holder would be allowed tomake a "mark-to-market" election with respect to the common stock, provided the U.S. Holder completes and files IRS Form 8621 in accordance with therelevant instructions and related Treasury Regulations. The common stock will be treated as "marketable stock" for this purpose if it is "regularly traded" ona "qualified exchange or other market." The common stock will be "regularly traded" on a qualified exchange or other market for any calendar year duringwhich it is traded (other than in de minimis quantities) on at least 15 days during each calendar quarter. A "qualified exchange or other market" means eithera U.S. national securities exchange that is registered with the SEC, the Nasdaq, or a foreign securities exchange that is regulated or supervised by agovernmental authority of the country in which the market is located and which satisfies certain regulatory and other requirements. We believe that theNasdaq Global Select Market should be treated as a "qualified exchange or other market" for this purpose. However, it should be noted that a separate mark-to-market election would need to be made with respect to each of our subsidiaries which is treated as a PFIC. The stock of these subsidiaries is not expected tobe "marketable stock." Therefore, a "mark-to-market" election is not expected to be available with respect to these subsidiaries. Current Taxation and Dividends. If the "mark-to-market" election is made, the U.S. Holder generally would include as ordinary income in eachtaxable year the excess, if any, of the fair market value of the common stock at the end of the taxable year over such U.S. Holder's adjusted tax basis in thecommon stock 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 itscommon stock over its fair market value at the end of the taxable year, but only to the extent of the net amount previously included in income as a result of themark-to-market election. Any income inclusion or loss under the preceding rules should be treated as gain or loss from the sale of common stock for purposesof determining the source of the income or loss. Accordingly, any such gain or loss generally should be treated as U.S.-source income or loss for U.S. foreigntax credit limitation purposes. A U.S. Holder's tax basis in his common stock would be adjusted to reflect any such income or loss amount. Distributions byus to a U.S. Holder who has made a mark-to-market election generally will be treated as discussed above under "Taxation—U.S. Federal Income Taxation ofU.S. Holders—Distributions." Sale, Exchange or Other Disposition. Gain realized on the sale, exchange, redemption or other disposition of the common stock would be treated asordinary income, and any loss realized on the sale, exchange, redemption or other disposition of the common stock would be treated as ordinary loss to theextent that such loss does not exceed the net mark-to-market gains previously included in income by the U.S. Holder. Any loss in excess of such previousinclusions would be treated as a capital loss by the U.S. Holder. A U.S. Holder's ability to deduct capital losses is subject to certain limitations. Any suchgain or loss generally should be treated as U.S.-source income or loss for U.S. foreign tax credit limitation purposes. Taxation of U.S. Holders Not Making a Timely QEF or "Mark-to-Market" Election Finally, a U.S. Holder who does not make either a QEF election or a "mark-to-market" election, or a U.S. Holder whose QEF election is invalidatedor terminated, or a Non-Electing Holder, would be subject to special rules, or the Default PFIC Regime, with respect to (1) any excess distribution (i.e., theportion of any distributions received by the Non-Electing Holder on the common stock in a taxable year in excess of 125% of the average annual distributionsreceived by the Non-Electing Holder in the three preceding taxable years, or, if shorter, the Non-Electing Holder's holding period for the common stock), and(2) any gain realized on the sale, exchange, redemption or other disposition of the common stock. Under the Default PFIC Regime: ·the excess distribution or gain would be allocated ratably over the Non-Electing Holder's aggregate holding period for the common stock; ·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 oftaxpayer for that year, and an interest charge for the deemed tax deferral benefit would be imposed with respect to the resulting taxattributable to each such other taxable year. Any distributions other than "excess distributions" by us to a Non-Electing Holder will be treated as discussed above under "Taxation—U.S. FederalIncome Taxation of U.S. Holders—Distributions." 65Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. These penalties would not apply to a pension or profit sharing trust or other tax-exempt organization that did not borrow funds or otherwise utilizeleverage in connection with its acquisition of the common stock. If a Non-Electing Holder who is an individual dies while owning the common stock, suchNon-Electing Holder's successor generally would not receive a step-up in tax basis with respect to the common stock. U.S. Federal Income Taxation of "Non-U.S. Holders" A beneficial owner of common stock (other than a partnership) that is not a U.S. Holder is referred to herein as a "Non-U.S. Holder." Dividends on Common Stock 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 ourcommon stock, unless that income is effectively connected with a trade or business conducted by the Non-U.S. Holder in the United States. If the Non-U.S.Holder is entitled to the benefits of a U.S. income tax treaty with respect to those dividends, that income is taxable only if it is attributable to a permanentestablishment maintained by the Non-U.S. Holder in the United States. Sale, Exchange or Other Disposition of Common Stock 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 otherdisposition of our common stock, unless: ·the gain is effectively connected with a trade or business conducted by the Non-U.S. Holder in the United States. If the Non-U.S. Holder isentitled to the benefits of a U.S. income tax treaty with respect to that gain, that gain is taxable only if it is attributable to a permanentestablishment 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 andother conditions are met. 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 stock, includingdividends 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 willgenerally be subject to 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, inthe case of a corporate Non-U.S. Holder, the earnings and profits of such Non-U.S. Holder that are attributable to effectively connected income, subject tocertain 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. incometax 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 reportingrequirements. In addition, such payments will 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 anapplicable IRS Form W-8. 66Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. If you sell your common stock to or through a U.S. office of a broker, the payment of the proceeds is subject to both U.S. backup withholding andinformation 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 yourcommon stock 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 andbackup withholding generally will not apply to that payment. However, U.S. information reporting requirements, but not backup withholding, will apply to apayment of sales proceeds, even if that payment is made to you outside the United States, if you sell your common stock through a non-U.S. office of abroker that is a U.S. person or has some other contacts with the United States. Backup withholding tax is not an additional tax. Rather, you generally mayobtain a refund of any amounts withheld under backup withholding rules that exceed your U.S. federal income tax liability by filing a refund claim with theIRS. Individuals who are U.S. Holders (and to the extent specified in applicable Treasury Regulations, certain individuals who are Non-U.S. Holders andcertain U.S. entities) who hold "specified foreign financial assets" (as defined in Section 6038D of the Code) are required to file IRS Form 8938 withinformation 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 assetswould include, among other assets, our common shares, unless the 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 an individual U.S. Holder (and to the extent specified in applicable Treasury regulations, an individual Non-U.S. Holder or a U.S.entity) that is required to file IRS Form 8938 does not file such form, the statute of limitations on the assessment and collection of U.S. federal income taxes ofsuch holder for the related tax year may not close until three years after the date that the required information is filed. U.S. Holders (including U.S. entities)and Non-U.S. Holders are encouraged to consult their own tax advisors regarding their reporting obligations under this legislation. F. Dividends and Paying Agents Not applicable. G. Statement by Experts Not applicable. H. Documents on Display We file annual reports and other information with the SEC. You may read and copy any document we file with the SEC at its public reference roomat 100 F Street, N.E., Room 1580, Washington, D.C. 20549. You may also obtain copies of this information by mail from the public reference section of theSEC, 100 F Street, N.E., Room 1580, Washington, D.C. 20549, at prescribed rates. Please call the SEC at 1-800-SEC-0330 for further information on theoperation of the public reference room. Our SEC filings are also available to the public at the web site maintained by the SEC at http://www.sec.gov, as well ason our website at http://www.topships.org. I. Subsidiary Information Not applicable. ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Our Risk Management Policy Our primary market risks relate to adverse movements in freight rates in the product tanker market. Our policy is to continuously monitor ourexposure to other business risks, including the impact of changes in interest rates, currency rates, and bunker prices on earnings and cash flows. We assessthese risks and, when appropriate, enter into derivative contracts with credit-worthy counterparties to minimize our exposure to the risks. With regard tobunker prices, as our employment policy for our vessels has been and is expected to continue to be with a high percentage of our fleet on period employment,we are not directly exposed with respect to those vessels to increases in bunker fuel prices, as these are the responsibility of the charterer under period charterarrangements. 67Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Interest Rate Risk As of December 31, 2013 we bear no interest rate risk since we have no senior outstanding indebtedness and our only interest rate swap arrangementis not pegged to a floating interest rate. The only exposure we have to floating interest rates relates to the outstanding balance of the termination fee outstanding(see Note 20 to our consolidated financial statements included herein). Set forth below is a table of our interest rate swap arrangements as of December 31, 2013 and 2012 (in thousands of U.S. dollars). Counterparty SWAPNumber (Nr) NotionalAmount PeriodEffective Date Interest RatePayable Fair Value - Liability December 31,2013 December 31,2012** December 31,2013 ALPHA BANK 1 $20,000 7 yearsMarch 30, 2008 $ $(2,785) $(1,697) $20,000 $ $(2,785) $(1,697) ** The total value of our interest rate swap arrangements as of December 31, 2012 was $5,811. Two of our interest rate swap arrangements as of December31, 2012 have since matured and another two were transferred on October 16, 2013 to the new owners of Jeke Shipping Company Limited. (owner of the M/TEvian) in accordance with the stock purchase agreement for the disposal of the subsidiary. The table above presents a comparison of the value of our interestrate swap arrangements as of December 31, 2013 with their value on December 31, 2012. SWAP Nr 1. Under this SWAP agreement, we received an upfront amount of $1.5 million. During the first year, we received a fixed rate of 5.25% and paida fixed rate of 5.50%. From the second year, we receive quarterly a fixed rate of 5.25% and we pay a rate of 5.10%, if either of two conditions are met: i) thedifference between the 10 year Euro swap rate and the 2 year Euro swap rate is greater or equal than -0.15% and ii) the six month USD LIBOR is between1.00% and 6.00%. Otherwise, we pay 10.85% less 5.75% multiplied by a cushion consisting of the number of days that either of the above two conditions arenot met, divided by the total number of days of the period multiplied by the previous quarter's cushion. The first cushion, as of the end of the first year, wasset to 1. During the third and fourth quarter of 2009, the six month USD LIBOR has been consistently below 1% and the cushion has become zero. As a resultwe will be paying 10.85% until the instrument's maturity date. Foreign Exchange Rate Fluctuation We generate all of our revenues in U.S. dollars but incur certain expenses in currencies other than U.S. dollars, mainly Euro. During 2013,approximately 7.3% of our expenses were in Euro and approximately 0.2% were in other currencies than the U.S. dollar or Euro. For accounting purposes,expenses incurred in other currencies are converted into U.S. dollars at the exchange rate prevailing on the date of each transaction. We have not hedgedcurrency exchange risks associated with our expenses and our operating results could be adversely affected as a result. We constantly monitor the U.S. dollarexchange rate and we try to achieve the most favorable exchange rates from the financial institutions we work with. Based on our total expenses for the year ended December 31, 2012, and using as an average exchange rate of $1.2861 / 1 Euro, a 5% decrease in theexchange rate to $1.2218 / 1 Euro, would result in an expense saving of approximately $0.35 million. Based on our total expenses for the year ended December31, 2013, and using as an average exchange rate of $1.328 / 1 Euro, a 5% decrease in the exchange rate to $1.262 / 1 Euro, would result in an expense savingof approximately $0.06 million. ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES Not Applicable. PART II ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES Neither we nor any of our subsidiaries have been subject to a material default in the payment of principal, interest, a sinking fund or purchase fundinstallment or any other material default that was not cured within 30 days. 68Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS Not Applicable. ITEM 15. CONTROLS AND PROCEDURES a) Disclosure Controls and Procedures Management, under the supervision and with the participation of the Chief Executive Officer and the Chief Financial Officer, evaluated theeffectiveness of the design and operation of our disclosure controls and procedures pursuant to Rules 13a-15(e) or 15d-15(e) promulgated under the SecuritiesExchange Act of 1934 (the "Exchange Act"), as of the end of the period covered by this annual report, as of December 31, 2013. The term disclosure controls and procedures are defined under SEC rules as controls and other procedures of an issuer that are designed to ensurethat information required to be disclosed by the issuer in the reports that it files or submits under the Exchange Act is recorded, processed, summarized andreported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls andprocedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated andcommunicated to the issuer's management, including its principal executive and principal financial officers, or persons performing similar functions, asappropriate to allow timely decisions regarding required disclosure. There are inherent limitations to the effectiveness of any system of disclosure controls andprocedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosurecontrols and procedures can only provide reasonable assurance of achieving their control objectives. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures areeffective as of December 31, 2013. b) Management's Annual Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) and15d-15(f) promulgated under the Exchange Act. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Exchange Act as a process designed by, orunder the supervision of, our principal executive and principal financial officers and effected by our Board of Directors, management and other personnel, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles and includes those policies and procedures that: ·Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets ofthe Company; ·Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance withgenerally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations ofCompany's management and directors; and ·Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets thatcould have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. A control system, no matter howwell designed and operated, can provide only reasonable, not absolute, assurance that the control system's objectives will be met. Our disclosure controls andprocedures are designed to provide reasonable assurance of achieving their objectives. The design of a control system must reflect the fact that there areresource constraints, and the benefits of controls must be considered relative to their costs. 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 offraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and thatbreakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two ormore 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 offuture events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Also, projections ofany evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degreeof compliance with the policies or procedures may deteriorate. 69Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Our management with the participation of our Chief Executive Officer and Chief Financial Officer assessed the effectiveness of our internal controlover financial reporting as of December 31, 2013. In making this assessment, the Company used the control criteria framework issued by the Committee ofSponsoring Organizations of the Treadway Commission, or COSO, published in its report entitled Internal Control—Integrated Framework. As a result of itsassessment, the Chief Executive Officer and Chief Financial Officer concluded that our internal controls over financial reporting are effective as of December31, 2013. 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 Act, 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 There were no changes in our internal control over financial reporting that occurred during the period covered by this annual report that havematerially effected or are reasonably likely to materially affect, our internal control over financial reporting. ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT We have established an audit committee composed of one independent member that is responsible for reviewing our accounting controls andrecommending to the Board of Directors the engagement of our outside auditors. We do not believe it is necessary to have a financial expert, as defined in Item 407 of Regulation S-K, because our Board of Directors has determinedthat the member of the audit committee has the financial experience and other relevant experience necessary to effectively perform the duties and responsibilitiesof the audit committee. ITEM 16B. CODE OF ETHICS The Board of Directors has adopted a Corporate Code of Business Ethics and Conduct that applies to all employees, directors and officers, thatcomplies with applicable guidelines issued by the SEC. The finalized Code of Ethics has been approved by the Board of Directors and was distributed to allemployees, directors and officers. We will also provide any person a hard copy of our code of ethics free of charge upon written request. Shareholders maydirect their requests to the attention of Mr. Alexandros Tsirikos at our registered address and phone number. ITEM 16C. PRINCIPAL AUDITOR FEES AND SERVICES Aggregate fees billed to the Company for the years ended December 2012 and 2013 represent fees billed by our principal accounting firm, Deloitte,the other member firms of Deloitte Touche Tohmatsu, and their respective affiliates (collectively, "Deloitte & Touche"). U.S. dollars in thousands, Year Ended 2012 2013 Audit Fees 117.1 120.8 Our audit committee pre-approves all audit, audit-related and non-audit services not prohibited by law to be performed by our independent auditorsand associated fees prior to the engagement of the independent auditor with respect to such services. ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES Not applicable. ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS Not applicable. 70Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 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 theMarshall Islands. Therefore, we are exempt from many of Nasdaq's corporate governance practices other than the requirements regarding the disclosure of agoing 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 Rule5605(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 inlieu of Nasdaq's corporate governance rules applicable to U.S. domestic issuers are as follows: ·Majority Independent Board. Nasdaq requires, among other things, that a listed company has a Board of Directors comprised of amajority of independent directors. As permitted under Marshall Islands law, our Board of Directors is comprised of one independentdirector and 3 executive directors. ·Audit Committee. Nasdaq requires, among other things, that a listed company has an audit committee with a minimum of threeindependent members, at least one of whom meets certain standards of financial sophistication. As permitted under Marshall Islands law,our audit committee consists of one independent director who is not required to satisfy these financial sophistication standards. ·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 MarshallIslands Business Corporations Act, which allows the Board of Directors to approve share issuances. ·As a foreign private issuer, we are not required to solicit proxies or provide proxy statements to Nasdaq pursuant to Nasdaq corporategovernance rules or Marshall Islands law. Consistent with Marshall Islands law and as provided in our bylaws, we will notify ourshareholders of meetings between 15 and 60 days before the meeting. This notification will contain, among other things, informationregarding business to be transacted at the meeting. In addition, our bylaws provide that shareholders must give us between 120 and 180days 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. PART III ITEM 17. FINANCIAL STATEMENTS See Item 18. ITEM 18. FINANCIAL STATEMENTS The following financial statements beginning on page F-1 are filed as a part of this annual report. 71Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. ITEM 19. EXHIBITSNumberDescription of Exhibits 1.1Second Amended and Restated Articles of Incorporation of Top Ships Inc. (1)1.2Amended and Restated By-Laws of the Company, as adopted on February 28, 2007 (3)2.1Form of Share Certificate (2)4.1Top Ships Inc. Amended and Restated 2005 Stock Incentive Plan (4)4.2Stockholders Rights Agreement with Computershare Investor Services, LLC, as Rights Agent as of August 19, 2005 (5)4.3 Amendment No. 1 to the Stockholders Rights Agreement with Computershare Investor Services, LLC, as Rights Agent, dated August 24, 2011 (7)4.4Form of bareboat commercial management agreement with Central Mare Inc. (Hongbo) (6)4.5Form of non-bareboat commercial management and technical management agreement with Central Mare Inc. (Amalfi) (6)4.6Form of technical management agreement with TMS Shipping Ltd. (Delos) (6)4.7Form of commercial management agreement with Central Mare Inc. (Delos) (6)4.8Form of commercial technical and commercial management agreement with International Ship Management Inc. (Delos) (8)4.11Shipping Financial Services Inc Credit Facility dated July 1, 2011 (8)4.12Supplemental Agreement dated July 8, 2012 between Top Ships Inc. and Shipping Financial Services Inc. to the Credit Facility dated July 1, 2011(9)4.13Central Mare Inc Credit Facility dated July 16, 2011 (8)4.14Supplemental Agreement dated July 21, 2012 between Top Ships Inc. and Central Mare Inc. to the Credit Facility dated July 16, 2011 (9)4.15Common Stock Purchase Agreement with Sovereign Holdings Inc., dated as of August 24, 2011 (8)4.16Registration Rights Agreement with Sovereign Holdings Inc., dated as of August 24, 2011 (8)4.17Amended and Restated Loan Agreement, dated August 15, 2012 between Top Ships Inc. and Laurasia Trading Ltd. (9)4.18Addendum Number 1 dated August 15, 2012 to the Amended and Restated Loan Agreement dated August 15, 2012 between Top Ships Inc. andLaurasia Trading Ltd. (9)4.19Stock Purchase Agreement dated September 5, 2013, between Top Ships Inc. and AMCI Products Limited with respect to Jeke Shipping CompanyLimited, Warhol Shipping Company Limited, Indiana R Shipping Company Limited and Britto Shipping Company Limited4.20Stock Purchase Agreement dated September 5, 2013, between Top Ships Inc. and AMCI Products Limited with respect to Hongbo ShippingCompany Limited4.21Stock Purchase Agreement dated September 5, 2013, between Top Ships Inc. and AMCI Products Limited with respect to Lichtenstein ShippingCompany Limited4.22Amendment to Stock Purchase Agreement dated September 5, 2013, between Top Ships Inc. and AMCI Products Limited with respect toLichtenstein Shipping Company Limited, dated October 10, 20134.23Memorandum of Agreement dated December 5, 2013, between Top Ships Inc. and Monte Carlo 37 Shipping Company Limited4.24Termination of Memorandum of Agreement dated December 5, 2013, between Top Ships Inc. and Monte Carlo 37 Shipping Company Limited,dated February 6, 20144.25Memorandum of Agreement dated December 16, 2013, between Top Ships Inc. and Monte Carlo One Shipping Company Limited4.26Memorandum of Agreement dated February 6, 2014, between Top Ships Inc. and Million Hope Maritime S.A.8.1List of subsidiaries of the Company12.1Rule 13a-14(a)/15d-14(a) Certification of the Company's Principal Executive Officer12.2Rule 13a-14(a)/15d-14(a) Certification of the Company's Principal Financial Officer13.1Certification of the Company's Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of theSarbanes-Oxley Act of 200213.2Certification of the Company's Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of theSarbanes-Oxley Act of 2002101The following materials from the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2013, formatted in eXtensibleBusiness Reporting Language (XBRL): (i) Consolidated Balance Sheets as of December 31, 2012 and 2013; (ii) Consolidated Statements ofComprehensive Income/ (Loss) for the years ended December 31, 2011, 2012 and 2013; (iii) Consolidated Statements of Stockholders' Equity forthe years ended December 31, 2011, 2012 and 2013; (iv) Consolidated Statements of Cash Flows for the years ended December 31, 2011, 2012 and2013; and (v) Notes to Consolidated Financial Statements___________________(1)Incorporated by reference to the Company's Current Report on Form 6-K, filed on June 24, 2011 (2)Incorporated by reference to the Company's Annual Report on Form 20-F, filed on June 29, 2009 (File No. 000-50859)(3)Incorporated by reference to the Company's Current Report on Form 6-K filed on March 9, 2007 (4)Incorporated by reference to the Company's Annual Report on Form 20-F, filed on April 13, 2006 (File No. 000-50589) (5)Incorporated by reference to the Company's Registration Statement on Form 8-A (File No. 000-50859) (6)Incorporated by reference to the Company's Annual Report on Form 20-F, filed on April 12, 2011 (File No. 000-50859) (7)Incorporated by reference to Amendment No. 1 to the Company's Registration Statement on Form 8-A (File No. 000-50859)(8)Incorporated by reference to the Company's Annual Report on Form 20-F, filed on April 11, 2012 (File No. 000-50859)Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. (9)Incorporated by reference to the Company's Annual Report on Form 20-F, filed on May 1, 2013 (File No. 000-50859) 72Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 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 signthis annual report on its behalf. TOP SHIPS INC. (Registrant) Date: February 14, 2014By:/s/ Evangelos Pistiolis Evangelos Pistiolis President, Chief Executive Officer, and Director 73Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. TOP SHIPS INC. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Report of Independent Registered Public Accounting Firm F-1 Consolidated Balance Sheets as of December 31, 2012 and 2013F-2 Consolidated Statements of Comprehensive Income/ (Loss) for the years ended December 31, 2011, 2012 and 2013F-4 Consolidated Statements of Stockholders' Equity for the years ended December 31, 2011, 2012 and 2013F-5 Consolidated Statements of Cash Flows for the years ended December 31, 2011, 2012 and 2013F-6 Notes to Consolidated Financial StatementsF-8 Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Board of Directors and Stockholders ofTop Ships Inc.,Majuro, Republic of the Marshall IslandsWe have audited the accompanying consolidated balance sheets of Top Ships Inc. and subsidiaries (the “Company”) as of December 31, 2013 and 2012, andthe related consolidated statements of comprehensive income/(loss), stockholders' equity, and cash flows for each of the three years in the period endedDecember 31, 2013. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinionon these financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require thatwe plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is notrequired to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal controlover financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion onthe effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on atest basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimatesmade by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2013and 2012, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2013, in conformity with accountingprinciples generally accepted in the United States of America. /s/ Deloitte Hadjipavlou, Sofianos & Cambanis S.A.February 14, 2014Athens, Greece F-1Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. TOP SHIPS INC.CONSOLIDATED BALANCE SHEETSDECEMBER 31, 2012 AND 2013 (Expressed in thousands of U.S. Dollars - except share and per share data) December 31, December 31, 2012 2013 ASSETS CURRENT ASSETS: Cash and cash equivalents - 9,706 Trade accounts receivable 399 - Advances to various creditors 47 38 Prepayments and other (Note 9) 1,089 518 Vessel held for sale (Note 6) 25,200 - Total current assets 26,735 10,262 FIXED ASSETS: Advances for vessels acquisitions / under construction (Note 5) - 14,400 Vessels, net (Notes 4) 177,292 - Other fixed assets, net 1,851 1,467 Total fixed assets 179,143 15,867 OTHER NON CURRENT ASSETS: Restricted cash (Note 18) 5,537 1,739 Total assets 211,415 27,868 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Current portion of debt (Note 10) 150,395 - Debt from related parties (Note 10) 2,632 - Debt related to vessel held for sale (Note 10) 19,592 - Derivative financial instruments (Note 18) 5,811 1,135 Due to related parties (Notes 1 and 7) 2,150 807 Accounts payable 3,732 2,082 Accrued liabilities 6,659 4,581 Unearned revenue 2,659 - Total current liabilities 193,630 8,605 NON-CURRENT LIABILITIES: Derivative financial instruments (Note 18) - 562 Other non-current liabilities (Note 20) 4,706 3,906 F-2Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Total non-current liabilities 4,706 4,468 COMMITMENTS AND CONTINGENCIES (Note 11) Total liabilities 198,336 13,073 STOCKHOLDERS' EQUITY: Preferred stock, $0.01 par value; 20,000,000 shares authorized; none issued - - Common stock, $0.01 par value; 1,000,000,000 shares authorized; 17,147,534 and 17,287,534 shares issued andoutstanding at December 31, 2012 and December 31, 2013 (Note 12) 172 174 Additional paid-in capital (Note 12) 292,961 293,304 Accumulated other comprehensive income 37 - Accumulated deficit (280,091) (278,683) Total stockholders' equity 13,079 14,795 Total liabilities and stockholders' equity 211,415 27,868 The accompanying notes are an integral part of these consolidated financial statements. F-3Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. TOP SHIPS INC. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME/ (LOSS)FOR THE YEARS ENDED DECEMBER 31, 2011, 2012 AND 2013(Expressed in thousands of U.S. Dollars - except share and per share data) 2011 2012 2013 REVENUES: Revenues 79,723 31,428 20,074 Other income 872 - - EXPENSES: Voyage expenses (Note 15) 7,743 1,023 663 Charter hire expenses (Note 8) 2,380 - - Lease termination expenses (Note 8) 5,750 - - Vessel operating expenses (Note 15) 10,368 814 745 Dry-docking costs 1,327 - - Vessel depreciation (Note 4) 25,327 11,458 6,429 Management fees-third parties 439 - - Management fees-related parties (Notes 1 and 7) 5,730 2,345 1,351 General and administrative expenses 15,364 7,078 3,258 (Gain) on disposal of subsidiaries (Note 19) - - (1,591)Loss/(Gain) on sale of vessels (Note 4) 62,543 - (14)Impairment on vessels (Note 4) 114,674 61,484 - Operating (loss)/income (171,050) (52,774) 9,233 OTHER INCOME (EXPENSES): Interest and finance costs (Notes 10 and 16) (16,283) (9,345) (7,443)Loss on derivative financial instruments (Note 18) (1,793) (447) (171)Interest income 95 175 131 Other, net (81) (1,593) (342) Total other expenses, net (18,062) (11,210) (7,825) Net income/(loss) (189,112) (63,984) 1,408 Other comprehensive (loss)/income - - - Comprehensive (loss)/income (189,112) (63,984) 1,408 (Loss)/earnings per common share, basic (Note 14) (30.00) (3.77) 0.08 (Loss)/earnings per common share, diluted (Note 14) (30.00) (3.77) 0.08 Weighted average common shares outstanding, basic 6,304,679 16,989,585 17,061,530 Weighted average common shares outstanding, diluted 6,304,679 16,989,585 17,111,530 The accompanying notes are an integral part of these consolidated financial statements. F-4Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. TOP SHIPS INC.CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITYFOR THE YEARS ENDED DECEMBER 31, 2011, 2012 AND 2013(Expressed in thousands of U.S. Dollars - except share and per share data) Accumulated Additional Other Common Stock Paid-in Comprehensive Accumulated # of Shares Par Value Capital (Loss) Income Deficit Total BALANCE, December 31, 2010 3,420,067 34 282,406 37 (26,995) 255,482 Net Loss - - - - (189,112) (189,112)Stock-based compensation (Note 13) 49,967 - 1,412 - - 1,412 Equity component of convertible loans - - 2,000 - - 2,000 Cancellation of fractional shares (17) - -- - - - - Issuance of common stock, net 13,677,517 137 6,765 - - 6,902 BALANCE, December 31, 2011 17,147,534 171 292,583 37 (216,107) 76,684 Net Loss - - - - (63,984) (63,984)Stock-based compensation (Note 13) - 1 378 - 379 BALANCE, December 31, 2012 17,147,534 172 292,961 37 (280,091) 13,079 Net Income - - - - 1,408 1,408 Stock-based compensation (Note 13) 140,000 2 343 - - 345 Other comprehensive income - - - (37) - (37)BALANCE, December 31, 2013 17,287,534 174 293,304 - (278,683) 14,795 The accompanying notes are an integral part of these consolidated financial statements. F-5Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. TOP SHIPS INC. CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2011, 2012 AND 2013 (Expressed in thousands of U.S. Dollars) 2011 2012 2013 Cash Flows provided by Operating Activities: Net (loss)/income (189,112) (63,984) 1,408 Adjustments to reconcile net (loss)/income to net cash provided by operating activities: Depreciation 27,156 12,510 6,763 Amortization and write off of deferred financing costs 2,234 1,437 1,815 Amortization of debt discount 3,965 371 - Translation gain of foreign currency denominated loan (294) 70 - Provision for service leaving indemnities (37)Stock-based compensation expense 1,412 378 345 Change in fair value of derivative financial instruments (Note 18) (2,835) (2,656) (2,313)Loss on sale of other fixed assets 81 178 3 Loss/(Gain) on sale of vessels 62,543 - (14)(Gain) on disposal of subsidiaries (Note 19) - - (1,591)Vessels impairment charge 114,674 61,484 - Provision for doubtful accounts - 256 - Increase (Decrease) in: Trade accounts receivable (2,189) 1,281 384 Deferred vessel lease payments 543 - - Insurance claims (876) 4 - Inventories 660 - - Advances to various creditors (57) 105 9 Prepayments and other 632 462 571 Due from related parties (74) 74 - Other long term receivable (1,841) 1,841 - Increase (Decrease) in: Due to related parties (234) 587 (1,343)Accounts payable 2,473 (4,426) (1,650)Other non-current liabilities - 4,706 (800)Accrued liabilities (75) (136) 68 Unearned revenue (3,007) 587 (548) Net Cash provided by Operating Activities 15,779 15,129 3,070 Cash Flows provided by Investing Activities: Advances for vessels under construction (Note 5) - - (14,400)Insurance claims recoveries 872 - - Decrease in restricted cash 6,158 5,949 2,563 Net proceeds from sale of vessels (Note 4) 118,220 - 25,214 Net proceeds from disposal of subsidiaries (Note 19) - - 37,552 Net proceeds from sale of other fixed assets 35 60 65 Acquisition of other fixed assets (356) (7) - Net Cash provided by Investing Activities 124,929 6,002 50,994 F-6Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Cash Flows used in Financing Activities: Proceeds from convertible debt 2,000 - - Proceeds from debt 2,782 500 - Principal payments of debt (27,637) (16,656) (11,120)Prepayment of debt (124,000) (4,975) (30,326)Derivative financial instrument termination payments (364) - - Proceeds from issuance of common stock, net of issuance costs 6,833 - - Payment of financing costs (616) - (2,837) Net Cash used in Financing Activities (141,002) (21,131) (44,283) Net (decrease)/increase in cash and cash equivalents (294) - 9,781 Cash and cash equivalents at beginning of year - - - Effect of exchange rate changes on cash 294 - (75) Cash and cash equivalents at end of the year - - 9,706 SUPPLEMENTAL CASH FLOW INFORMATION Interest paid net of capitalized interest 10,180 6,837 5,621 The accompanying notes are an integral part of these consolidated financial statements. F-7Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. NOTES TO CONSOLIDATED FINANCIAL STATEMENTSAS OF DECEMBER 31, 2012 AND 2013AND FOR THE YEARS ENDED DECEMBER 31, 2011, 2012 AND 2013(Expressed in thousands of United States Dollars – except share, per share data and rate per day, unless otherwise stated) 1. Basis of Presentation and General Information:The accompanying consolidated financial statements include the accounts of Top Ships Inc. (formerly Top Tankers Inc. and Ocean Holdings Inc.) and itswholly owned subsidiaries (collectively the "Company"). Ocean Holdings Inc. was formed on January 10, 2000, under the laws of Marshall Islands, wasrenamed to Top Tankers Inc. and Top Ships Inc. in May 2004 and December 2007 respectively.Top Ships Inc. is the sole owner of all outstanding shares of the following subsidiary companies as of December 31, 2013. The following list is not exhaustiveas the Company has other subsidiaries relating to vessels that have been sold. Companies Date ofIncorporation Country ofIncorporation Activity1TOP Tanker Management Inc. May 2004 Marshall Islands Management Company2Lyndon International Co. October 2013 Marshall Islands Dormant CompanyDuring 2011, 2012 and 2013 the company was the sole owner of all outstanding shares of the following subsidiary shipowning companies: Shipowning Companies with vessels inoperations during year ended December31,201, 2012 and 2013 Date ofIncorporation Country ofIncorporation Vessel1Jeke Shipping Company Limited ("Jeke") July 2007 Liberia Evian (acquired February 2008, sold October2013) (Note 4)2Warhol Shipping Company Limited("Warhol") July 2008 Liberia Miss Marilena (delivered February 2009, soldOctober 2013) (Note 4)3Lichtenstein Shipping Company Limited("Lichtenstein") July 2008 Liberia Lichtenstein (delivered February 2009, soldOctober 2013) (Note 4)4Indiana R Shipping Company Limited("Indiana R") July 2008 Liberia UACC Shams (delivered March 2009, soldOctober 2013) (Note 4)5Britto Shipping Company Limited ("Britto") July 2008 Liberia Britto (delivered May 2009, sold October 2013)(Note 4)6Hongbo Shipping Company Limited("Hongbo") July 2008 Liberia Hongbo (delivered August 2009, sold October2013) (Note 4)7Banksy Shipping Company Limited("Banksy") July 2008 Liberia UACC Sila (delivered March 2009 , sold April2013) (Note 4)8Ilisos Shipping Company Limited ("Ilisos") April 2005 Marshall Islands Ioannis P (acquired November 2005, soldNovember 2011)9Amalfi Shipping Company Limited("Amalfi") July 2007 Marshall Islands Amalfi (acquired December 2007, sold August2011)10Japan I Shipping Company Limited("Japan I") August 2007 Liberia Pepito (acquired March 2008, sold December2011)11Japan II Shipping Company Limited("Japan II") August 2007 Liberia Astrale (acquired May 2008, sold July 2011)12Japan III Shipping Company Limited("Japan III") August 2007 Liberia Cyclades (acquired December 2007, soldNovember 2011) Shipowning Companies with vesselsunder lease during 2011 Date ofIncorporation Country ofIncorporation Vessel13Mytikas Shipping Company Limited("Mytikas") February 2004 Marshall Islands Delos (lease started October, 1, 2010, leaseterminated October 2011)The Company is an international provider of worldwide seaborne crude oil and petroleum products transportation services and of drybulk transportationservices. F-8Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. NOTES TO CONSOLIDATED FINANCIAL STATEMENTSAS OF DECEMBER 31, 2012 AND 2013AND FOR THE YEARS ENDED DECEMBER 31, 2011, 2012 AND 2013(Expressed in thousands of United States Dollars – except share, per share data and rate per day, unless otherwise stated) On October 16, 2013 the Company sold the shipowning subsidiaries which owned the six vessels of the Company's fleet (namely M/Ts Miss Marilena,Lichtenstein, UACC Shams, Britto, Hongbo and M/V Evian) to an affiliate of the AMCI Poseidon Fund LP, an unrelated party (see Note 19). Following thissale the Company does not own any operating vessels.During 2011, 2012, and 2013, five, three and three charterers individually accounted for more than 10% of the Company's revenues as follows:Charterer Year Ended December 31, 2011 2012 2013 A 11% - - B - - - C 20% 51% 63% D 12% - - E 12% - - F 13% - - G - 21% 18% H - 17% 18% Management of Company VesselsAs of December 31 2013, the Company had outsourced to Central Mare Inc. ("Central Mare"), a related party controlled by the family of the Company's ChiefExecutive Officer, all operational, technical and commercial functions relating to the chartering and operation of the Company's vessels. The Companyoutsourced the above functions pursuant to a letter agreement concluded between Central Mare and the Company and management agreements concludedbetween Central Mare and the Company's vessel-owning subsidiaries on July 1, 2010. Furthermore, the letter agreement provided for the provision of servicesin connection with compliance with Section 404 of the Sarbanes-Oxley Act of 2002, services rendered in relation to the Company's maintenance of properbooks and records, services in relation to the financial reporting requirements of the Company under Commission and NASDAQ rules and regulations andinformation-system related services (see Note 7). In relation to the vessel M/T Delos in 2010 the Company had outsourced technical management and crewing to Titan Owning Company Ltd ("TMSTankers"), whereas operational monitoring of the vessel was outsourced to Central Mare, a related party, both agreements were effective from October 1, 2010.On June 1, 2011 the Company transferred the full management of M/T Delos to International Ship Management Inc., a related party (Note 7) up to the date ofthe vessels lease termination on October 15, 2011. As of December 31, 2012 and 2013 the net amount due to Central Mare was $2,150 and $807 respectively and is included in Due to related parties, which areseparately presented in the accompanying consolidated balance sheets (Note 7).Management fees paid to related parties and management fees paid to third parties are presented separately in the accompanying consolidated statements ofoperations and are summarized as follows: For the year ended December 31,2011 December 31,2012 December 31,2013 Management Fees –Related Parties (Note 7) Central Mare Inc 5,575 2,345 1,351 International Shipmanagement Inc 155 - - Total 5,730 2,345 1,351 Management Fees –Third Parties ST Shipping and Transport Pte. Limited 10 - - TMS Tankers 384 - - Heidmar Inc 45 - - Total 439 - - F-9Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. NOTES TO CONSOLIDATED FINANCIAL STATEMENTSAS OF DECEMBER 31, 2012 AND 2013AND FOR THE YEARS ENDED DECEMBER 31, 2011, 2012 AND 2013(Expressed in thousands of United States Dollars – except share, per share data and rate per day, unless otherwise stated) 2. Significant Accounting Policies:(a)Principles of Consolidation: The accompanying consolidated financial statements have been prepared in accordance with U.S generally acceptedaccounting principles ("U.S GAAP") and include the accounts and operating results of Top Ships Inc. and its wholly-owned subsidiaries referred to inNote 1. Intercompany balances and transactions have been eliminated in consolidation.(b)Use of Estimates: The preparation of consolidated financial statements in conformity with U.S. GAAP generally accepted accounting principles requiresmanagement to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilitiesat the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results coulddiffer from those estimates. Critical estimates mainly include impairment of vessels, vessel useful lives and residual values, provision for doubtfulaccounts and fair values of derivative instruments.(c)Foreign Currency Translation: The Company's functional currency is the U.S. Dollar because all vessels operate in international shipping markets,and therefore primarily transact business in U.S. Dollars. The Company's books of accounts are maintained in U.S. Dollars. Transactions involvingother currencies during the year 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 to U.S. Dollars based on the year-end exchange rates. Lossesfrom foreign currency translation amounted to $48 and $0 for the years ended December 31, 2012 and 2013, respectively and are reflected in General andadministrative expenses in the accompanying consolidated statement of comprehensive income/(loss).(d)Cash and Cash Equivalents: The Company considers highly liquid investments such as time deposits and certificates of deposit with an originalmaturity of three months or less to be cash equivalents.(e)Restricted Cash: The Company considers amounts that are pledged, blocked, held as cash collateral, required to be maintained with a specific bank orbe maintained by the Company as an overall cash position as part of a loan agreement, as restricted and these amounts are presented separately on thebalance sheets (Note 18).(f)Trade Accounts Receivable, net: The amount shown as Trade Accounts Receivable, net at each balance sheet date, includes estimated recoveries fromcharterers for hire, freight and demurrage billings, net of a provision for doubtful accounts. At each balance sheet date, all potentially uncollectibleaccounts are assessed individually, combined with the application of a historical recoverability ratio, for purposes of determining the appropriateprovision for doubtful accounts. Provision for doubtful accounts at December 31, 2012 and 2013 totaled $576 and $574 respectively, and issummarized as follows: Provision fordoubtfulaccounts Balance, December 31, 2011 1,187 —Additions 20 —Reversals / write-offs (631)Balance, December 31, 2012 576 —Additions 18 —Reversals / write-offs (20)Balance, December 31, 2013 574 (g)Insurance Claims: Insurance claims, relating mainly to crew medical expenses and hull and machinery incidents are recorded upon collection oragreement with the relevant party of the collectible amount when collectability is probable.(h)Inventories: Inventories consist of bunkers, lubricants and consumable stores which are stated at the lower of cost or market. Cost, which consists ofthe purchase price, is determined by the first in, first out method.(i)Vessel Cost: Vessels are stated at cost, which consists of the contract price, pre-delivery costs incurred during the construction of new buildings,capitalized interest and any material expenses incurred upon acquisition (improvements and delivery costs). Subsequent expenditures for conversions andmajor improvements are also capitalized when they appreciably extend the life, increase the earning capacity or improve the efficiency or safety of thevessels. Repairs and maintenance are charged to expense as incurred and are included in Vessel operating expenses in the accompanying consolidatedstatements of comprehensive income/(loss).Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. F-10Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. NOTES TO CONSOLIDATED FINANCIAL STATEMENTSAS OF DECEMBER 31, 2012 AND 2013AND FOR THE YEARS ENDED DECEMBER 31, 2011, 2012 AND 2013(Expressed in thousands of United States Dollars – except share, per share data and rate per day, unless otherwise stated) (j)Impairment of Long-Lived Assets: The Company reviews its long-lived assets held and used for impairment whenever events or changes incircumstances indicate that the carrying amount of the assets may not be recoverable. When the estimate of undiscounted cash flows, excluding interestcharges, expected to be generated by the use of the asset is less than its carrying amount, the Company evaluates the asset for an impairment loss.Measurement of the impairment loss is based on the fair value of the asset. In this respect, management regularly reviews the carrying amount of thevessels in connection with the estimated recoverable amount for each of the Company's vessels (Notes 4 and 6). (k)Vessel Depreciation: Depreciation is calculated using the straight-line method over the estimated useful life of the vessels, after deducting the estimatedsalvage value. Each vessel's salvage value is equal to the product of its lightweight tonnage and estimated scrap rate. Management estimates the useful lifeof the Company's vessels to be 25 years from the date of initial delivery from the shipyard. Second hand vessels are depreciated from the date of theiracquisition through their remaining estimated useful life. When regulations place limitations over the ability of a vessel to trade on a worldwide basis, itsuseful life is adjusted at the date such regulations are adopted.(l)Long Lived Assets held for sale and discontinued operations: The Company classifies vessels as being held for sale when the following criteria aremet: (a) Management, having the authority to approve the action, commits to a plan to sell the asset, (b) The asset is available for immediate sale in itspresent condition subject only to terms that are usual and customary for sales of such assets, (c) An active program to locate a buyer and other actionsrequired to complete the plan to sell the asset have been initiated, (d) The sale of the asset is probable and transfer of the asset is expected to qualify forrecognition as a completed sale, within one year, (e) The asset is being actively marketed for sale at a price that is reasonable in relation to its current fairvalue, (f) 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 bewithdrawn.Long-lived assets classified as held for sale are measured at the lower of their carrying amount or fair value less costs to sell. These vessels are notdepreciated once they meet the criteria to be classified as held for sale (Note 6). The results of operations of a component that either has been disposed ofor is classified as held for sale, are reported in discontinued operations if both of the following conditions are met: (a) the operations and cash flows of thecomponent have been (or will be) eliminated from the ongoing operations of the Company as a result of the disposal transaction and (b) the entity will nothave any significant continuing involvement in the operations of the component after the disposal transaction (Note 6).Long-lived assets previously classified as held for sale that are classified as held and used are revalued at the lower of (i) the carrying amount of the assetbefore it was classified as held for sale, adjusted for any depreciation expense that would have been recognized had the asset been continuously classifiedas held and used and (ii) the fair value of the asset at the date that the Company decided not to sell the asset (Note 18).(m)Other Fixed Assets, Net: Net other fixed assets consist of furniture, office equipment, cars and leasehold improvements, stated at cost, which consistsof the purchase / contract price less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful life of theassets, while leasehold improvements are depreciated over the lease term, as presented below:DescriptionUseful Life (years)Leasehold improvementsUntil the end of the lease term (December 2024)Cars6Office equipment5Furniture and fittings5Computer equipment3(n)Accounting for Dry-Docking Costs: All dry-docking costs are accounted for under the direct expense method, under which they are expensed asincurred and are reflected separately in the accompanying consolidated statements of comprehensive income/(loss). F-11Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. NOTES TO CONSOLIDATED FINANCIAL STATEMENTSAS OF DECEMBER 31, 2012 AND 2013AND FOR THE YEARS ENDED DECEMBER 31, 2011, 2012 AND 2013(Expressed in thousands of United States Dollars – except share, per share data and rate per day, unless otherwise stated) (o)Financing Costs: Fees incurred and paid to the lenders for obtaining new loans or refinancing existing ones are recorded as a contra to debt and such feesare amortized to interest expense over the life of the related debt using the effective interest method. Unamortized fees relating to loans repaid or refinancedare expensed when a repayment or refinancing is made and charged to interest and finance costs.(p)Convertible Debt: The Company evaluates debt securities ("Debt") for beneficial conversion features. A beneficial conversion feature is present when theconversion price per share is less than the market value of the common stock at the commitment date. The intrinsic value of the feature is then measuredas the difference between the conversion price and the market value multiplied by the number of shares into which the Debt is convertible and is recordedas debt discount with an offsetting amount increasing additional paid-in-capital. The debt discount is accreted to interest expense over the term of the Debtwith any unamortized discount recognized as interest expense upon conversion of the Debt. The total intrinsic value of the feature is limited to the proceedsallocated to the Debt instrument. On August 15, 2012 the conversion feature of our bridge loans with Laurasia was terminated and as of December 31,2013 the Company has no convertible short or long term debt.(q)Pension and Retirement Benefit Obligations—Crew: The ship-owning companies included in the consolidation employ the crew on board undershort-term contracts (usually up to nine months) and accordingly, they are not liable for any pension or post retirement benefits.(r)Staff leaving Indemnities – Administrative personnel: The Company's employees are entitled to termination payments in the event of dismissal orretirement with the amount of payment varying in relation to the employee's compensation, length of service and manner of termination (dismissed orretired). Employees who resign, or are dismissed with cause are not entitled to termination payments. The Company's liability at December 31, 2012 and2013 amounted to $11 and $4 respectively. (s)Accounting for Revenue and Expenses: Revenues are generated from bareboat charter, time charter, voyage charter agreements and pool arrangements.A bareboat charter is a contract in which the vessel owner provides the vessel to the charterer for a fixed period of time at a specified daily rate, which isgenerally payable monthly in advance, and the customer generally assumes all risks and costs of operation during the charter term. A time charter is acontract for the use of a vessel for a specific period of time and a specified daily charter hire rate, which is generally payable monthly in advance. Profitsharing represents the excess between an agreed daily base rate and the actual rate generated by the vessel every quarter, if any, and is settled and recordedon a quarterly basis. Under a voyage charter, revenue, including demurrage and associated voyage costs, with the exception of port expenses which arerecorded as incurred, are recognized on a proportionate performance method over the duration of the voyage. A voyage is deemed to commence upon thelatest between the completion of discharge of the vessel's previous cargo and the charter party date of the current voyage and is deemed to end upon thecompletion of discharge of the current cargo. Demurrage income represents payments by the charterer to the Company when loading or discharging timeexceeded the stipulated time in the voyage charter. Vessel operating expenses are expensed as incurred. Unearned revenue represents cash received prior toyear-end related to revenue applicable to periods after December 31 of each year. Under a pool arrangement, the pool charters-in a vessel on a time charterbasis but the daily charter hire is not fixed but it depends on the total return that the pool is able to achieve by operating all its vessels in the spot market.When vessels are acquired with time charters attached and the rates on such charters are below market on the acquisition date, the Company allocates thetotal cost between the vessel and the fair value of below market time charter based on the relative fair values of the vessel and the liability acquired. Thefair value of the attached time charter is computed as the present value of the difference between the contractual amount to be received over the term of thetime charter and management's estimates of the market time charter rate at the time of acquisition. The fair value of below market time charter is amortizedover the remaining period of the time charter as an increase to revenues.The Company pays commissions to ship brokers associated with arranging our charters. The commissions that the Company pays range from 1.25% to3.10% of the total daily charter hire rate of each charter. Commissions are paid by the Company and are recognized over the related charter period andincluded in voyage expenses.(t)Stock Incentive Plan: All share-based compensation related to the grant of restricted and/or unrestricted shares provided to employees and to non-employee directors, for their services as directors, is included in General and administrative expenses in the consolidated statements of comprehensiveincome/(loss). The shares that do not contain any future service vesting conditions are considered vested shares and recognized in full on the grant date.The shares that contain a time-based service vesting condition are considered non-vested shares on the grant date and recognized on a straight-line basisover the vesting period. The shares, vested and non-vested are measured at fair value, which is equal to the market value of the Company's commonstock on the grant date. Compensation cost for awards with graded vesting is recognized on a straight-line basis over the requisite service period for eachseparately vesting portion of the award as if the award was, in-substance, multiple awards. F-12Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. NOTES TO CONSOLIDATED FINANCIAL STATEMENTSAS OF DECEMBER 31, 2012 AND 2013AND FOR THE YEARS ENDED DECEMBER 31, 2011, 2012 AND 2013(Expressed in thousands of United States Dollars – except share, per share data and rate per day, unless otherwise stated) (u)Earnings / (Loss) per Share: Basic earnings/(loss) per share are computed by dividing net income or loss available to common stockholders' by theweighted average number of common shares deemed outstanding during the year. Diluted earnings/(loss) per share reflect the potential dilution that couldoccur if securities or other contracts to issue common stock were exercised. For purposes of calculating diluted earnings per share the denominator of thediluted earnings per share calculation includes the incremental shares assumed issued under the treasury stock method weighted for the period the non-vested shares were outstanding, with the exception of the 147,244 shares, granted to the Company's CEO, which will vest in the event of change ofcontrol. Consequently, those shares are excluded from the remaining non-vested shares (Note 14). The dilutive effect of convertible debt outstanding shallbe reflected in diluted EPS by application of the if-converted method. In applying the if-converted method, conversion shall not be assumed for purposesof computing diluted EPS if the effect would be antidilutive.(v)Related Parties: The Company considers as related parties: the affiliates of the Company; entities for which investments are accounted for by the equitymethod; principal owners of the Company; its management; members of the immediate families of principal owners of the Company; and other partieswith which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent thatone of the transacting parties might be prevented from fully pursuing its own separate interests. Another party also is a related party if it can significantlyinfluence the management or operating policies of the transacting parties and can significantly influence the other to an extent that one or more of thetransacting parties might be prevented from fully pursuing its own separate interests. An Affiliate is a party that, directly or indirectly through one or moreintermediaries, controls, is controlled by, or has common control with the Company. Control is the possession, direct or indirect, of the power to direct orcause the direction of the management and policies of an enterprise through ownership, by contract and otherwise. Immediate Family is family memberswhom a principal owner or a member of management might control or influence or by whom they might be controlled or influenced because of the familyrelationship. Management is the persons who are responsible for achieving the objectives of the Company and who have the authority to establish policiesand make decisions by which those objectives are to be pursued. Management normally includes members of the board of directors, the CEO, the CFO,Vice President and CTO in charge of principal business functions and other persons who perform similar policy making functions. Persons withoutformal titles may also be members of management. Principal owners are owners of record or known beneficial owners of more than 10% of the votinginterests of the Company. (w) Derivatives and Hedging: The Company records every derivative instrument (including certain derivative instruments embedded in othercontracts) in the balance sheet as either an asset or liability measured at its fair value, with changes in the derivatives' fair value recognized currently inearnings unless specific hedge accounting criteria are met. The Company has not applied hedge accounting for its derivative instruments during theperiods presented.The fair value of derivative liabilities was not adjusted for nonperformance risk as the Company, as one of the parties to a derivative transaction expectsto be able to perform under the contractual terms of its derivative agreements, such as making cash payments at periodic net settlement dates or upontermination.(x)Financial instruments: Financial liabilities are classified as either financial liabilities at 'fair value through the profit and loss' ("FVTPL") or 'otherfinancial liabilities'. Financial instruments classified as FVTPL are recognized at fair value in the balance sheet when the Company has an obligation toperform under the contractual provisions of those instruments. Financial instruments are classified as liabilities or equity in accordance with thesubstance of the contractual arrangement. Changes in the financial instruments are recognized in earnings. Other financial liabilities (includingborrowings and trade and other payables) are subsequently measured at amortized cost using the effective interest rate method. (y)Recent Accounting PronouncementsThere are no recent accounting pronouncements issued during 2013 whose adoption would have a material effect on the Company's consolidated financialstatements in the current year or expected to have an impact on future years.(z)Segment Reporting: The Chief Operating Decision Marker ("CODM") receives financial information and evaluates the Company's operations bycharter revenues and not by the length, type of vessel or type of ship employment for its customers (i.e. time or bareboat charters) or by geographicalregion as the charterer is free to trade the vessel worldwide and as a result, the disclosure of geographic information is impracticable. The CODM does notuse discrete financial information to evaluate the operating results for each such type of charter or vessel. Although revenue can be identified for thesetypes of charters or vessels, management cannot and does not identify expenses, profitability or other financial information for these various types ofcharters or vessels. As a result, management, including the chief operating decision maker, reviews operating results solely by revenue per day andoperating results of the fleet, and thus the Company has determined that it operates as one reportable segment. F-13Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. NOTES TO CONSOLIDATED FINANCIAL STATEMENTSAS OF DECEMBER 31, 2012 AND 2013AND FOR THE YEARS ENDED DECEMBER 31, 2011, 2012 AND 2013(Expressed in thousands of United States Dollars – except share, per share data and rate per day, unless otherwise stated) 3. Going Concern:As of December 31, 2012, the Company was in breach of loan covenants with certain banks relating to EBITDA, overall cash position (minimum liquiditycovenants), adjusted net worth, book equity and asset cover. As a result of these covenant breaches and due to cross default provisions contained in all of theCompany's bank facilities, the Company was in breach of all its loan facilities and has classified all its debt and derivative financial instruments as current.The amount of long term debt and derivative financial instruments that have been reclassified and presented together with current liabilities amount to$172,619 and $5,811 respectively (Note 10). As of December 31, 2013 the Company had no indebtedness, since all the debt facilities were either fully repaidor transferred to the buyer of the Company's shipowning companies (see Note 10 and 19). The consolidated financial statements have been prepared assuming that the Company will continue as a going concern. Accordingly, the consolidatedfinancial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, the amounts and classificationof liabilities, or any other adjustments that might result should the Company be unable to continue as a going concern.4. Vessels, net:The amounts in the accompanying consolidated balance sheets are analyzed as follows: Vessel Cost AccumulatedDepreciation Net BookValue Balance, December 31, 2011 296,107 (31,087) 265,020 —Reclassified from vessel held for sale 10,414 - 10,414 —Depreciation - (11,458) (11,458)—Impairment (104,029) 42,545 (61,484)— Vessel held for sale (25,200) - (25,200)Balance, December 31, 2012 177,292 - 177,292 —Depreciation - (6,429) (6,429)— Disposals (177,292) 6,429 (170,863)Balance, December 31, 2013 - - - During 2012, vessel oversupply decreased charter rates and further decreased vessel values. These were conditions that the Company considered to beindicators of potential impairment for its vessels. In December 2012, the Company tested the M/T Miss Marilena, M/T Lichtenstein, M/T UACC Shams,M/T Britto and M/T Hongbo for impairment and assigned a medium probability to sell them. This assumption together with the deteriorating charter ratessignificantly reduced the probability weighted undiscounted expected cash flows, which were determined to be lower than the vessels carrying values.Consequently, the Company wrote the vessels down to their fair values and recognized an impairment charge of $46,592 (see Note 18).In December 2012 the Company reclassified the M/V Evian as held and used resulting from its assessment that the vessel would not be sold and that it wouldcontinue to earn revenue within the following year and measured the vessel at its fair value, resulting in a write-up of $2,086 (see Note 18).In December 2012 the Company classified the M/T UACC Sila as held for sale and wrote the vessel down to fair value less costs to sell, resulting in animpairment charge of $16,978 (see Note 6). The vessel was sold on March 27, 2013 to an unrelated third party for a price of $26,000. The vessel wasdelivered to its new owners on April 30, 2013. A gain of $14 was recognized upon vessel's delivery, which is included in the Company's consolidatedstatement of comprehensive income/ (loss). F-14Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. NOTES TO CONSOLIDATED FINANCIAL STATEMENTSAS OF DECEMBER 31, 2012 AND 2013AND FOR THE YEARS ENDED DECEMBER 31, 2011, 2012 AND 2013(Expressed in thousands of United States Dollars – except share, per share data and rate per day, unless otherwise stated) In October 2013 the Company sold the shipowning companies of the M/Ts Miss Marilena, Lichtenstein, UACC Shams, Britto, Hongbo and M/V Evian to anaffiliate of the AMCI Poseidon Fund LP (see Note 19).5. Advances for Vessels Acquisitions / Under Construction: On December 5, 2013, the Company agreed to acquire a 39,000 dwt ECO-type newbuilding product/chemical tanker with a time charter attached from anentity affiliated with the Company's President, Chief Executive Officer and Director, Evangelos J. Pistiolis. The newbuilding is scheduled for delivery fromHyundai Mipo Dockyard Co., Ltd. in the third quarter of 2015. The purchase price of the newbuilding is $35,000, and is payable as follows: 20% as aninitial deposit and 80% on delivery of the vessel. The Company is under discussions with a number of banks regarding the financing of the vessel. The initialdeposit was paid in two installments, the first on December 5, 2013 and the second on December 19, 2013 bringing the total to $7,000 which is included inAdvances for vessels acquisitions / under construction, in the accompanying consolidated balance sheets.On December 16, 2013, the Company agreed to acquire a 50,000 dwt ECO-type newbuilding product/chemical tanker with a time charter attached from anentity affiliated with the Company's President, Chief Executive Officer and Director, Evangelos J. Pistiolis. The newbuilding is scheduled for delivery fromHyundai Mipo Dockyard Co., Ltd. in the first quarter of 2015. Upon its delivery the vessel will enter into a time charter with a high quality charterer for 2years at a rate of $16,000 per day. The charterer has the option to extend the charter for an additional year at a rate of $17,250 per day. The purchase price ofthe newbuilding is $37,000, and is payable as follows: 20% as an initial deposit and 80% on delivery of the vessel. The Company is under discussions with anumber of banks regarding the financing of the vessel. The initial deposit was paid in two installments, the first on December 16, 2013 and the second onDecember 19, 2013 bringing the total to $7,400 and it is also included in Advances for vessels acquisitions / under construction, in the accompanyingconsolidated balance sheets.6. Assets Held for Sale:As of December 31, 2012, the M/T UACC Sila met the criteria to be classified as held for sale. Consequently the Company treated the vessel as held for saleand classified it as a short term asset measured at the lower of the carrying amount and fair value less costs to sell as determined by the Company andsupported by an unrelated third party offer to buy the vessel. The related loan was also classified as short term in a separate balance sheet line from other shortterm debt. Furthermore, the Company recognized an impairment charge of $16,978 to reduce the carrying value to the fair value less costs to sell that isincluded in the accompanying statements of consolidated income/ (loss). The Company sold the vessel to an unrelated party on April 30, 2013 for $26,000. 7.Transactions with Related Parties:(a)Pyramis Technical Co. S.A.: Pyramis Technical Co. S.A. is wholly owned by the father of the Company's Chief Executive Officer and has beenresponsible for the renovation of the Company's premises. From January 2006 up to December 31, 2013 Euro 3,741 or $4,937 has been paid and relativeleasehold improvements with a carrying value of $493 are included in renovation works which are included in "Other fixed assets, net", that areseparately presented in the accompanying consolidated balance sheets. (b)Central Mare Inc. ("Central Mare") – Letter Agreement and Management Agreements: On May 12, 2010, the Company's Board of Directorsagreed to outsource all of the commercial and technical management of the Company's vessels to Central Mare Inc., or Central Mare, a related partycontrolled by the family of the Company's Chief Executive Officer. Since July 1, 2010 Central Mare has been performing all operational, technical andcommercial functions relating to the chartering and operation of the Company vessels, pursuant to a letter agreement, or the Letter Agreement, concludedbetween Central Mare and the Company as well as management agreements concluded between Central Mare and the Company's vessel-owningsubsidiaries. Furthermore the letter agreement provided for the provision of services in connection with compliance with Section 404 of the Sarbanes-OxleyAct of 2002, services rendered in relation to the Company's maintenance of proper books and records, services in relation to the financial reportingrequirements of the Company under Commission and NASDAQ rules and regulations and information-system related services. F-15Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. NOTES TO CONSOLIDATED FINANCIAL STATEMENTSAS OF DECEMBER 31, 2012 AND 2013AND FOR THE YEARS ENDED DECEMBER 31, 2011, 2012 AND 2013(Expressed in thousands of United States Dollars – except share, per share data and rate per day, unless otherwise stated) Pursuant to an amendment of the Letter Agreement on January 1, 2013, the Company paid a management fee of $250 US dollars per day per vessel up toJune 30 2013 and $258 US dollars per day per vessel up to October 16 2013. That fee included all the above mentioned services. On October 16, 2013the letter agreement was amended again and it now provides for a fixed monthly fee of $15 for the provision of all the above mentioned services, for theperiod when the Company doesn't have any shis, for the period when the Company doesn’t have any ships. Also Central Mare will receive a chartering commission of 1.25% on all freight, hire and demurrage revenues; a commission of 1.00% of all gross saleproceeds or the purchase price paid for vessels; a commission of 0.2% on derivative agreements and loan financing or refinancing and a newbuildingsupervision fee of Euro 437 or approximately $603 per newbuilding vessel. All the abovementioned commissions and fees will apply only in the case thatthe service is provided. Furthermore, if required, Central Mare will also handle and settle all claims arising out of its duties under the management agreements (other thaninsurance and salvage claims) in exchange for a fee of Euro 164 or approximately $226 US Dollars per person per eight-hour day. Finally legal fees forclaims and general corporate services incurred by Central Mare on behalf of the Company will be reimbursed to Central Mare at cost.This letter agreement had an initial term of five years after which it will continue to be in effect until terminated by either party subject to a twelve-monthadvance notice of termination. Pursuant to the terms of the management agreement, all fees payable to Central Mare are adjusted upwards 3% per annum on each anniversary date of theagreement. Transactions with the Manager in Euros are settled on the basis of the EUR/USD on the invoice date. On September 1, 2013 we entered into a termination agreement with Central Mare, whereby Central Mare agreed to provide us a 30% discount on thetermination fees that were payable as per the shipmanagement agreements between Central Mare and the vessel owning subsidiaries of the six vessels wesold on October 16, 2013, due to early termination without 12 months notice. The termination fees due to Central Mare amounted to $846. (c)International Ship Management Inc. ("International"): on June 1, 2011, the Company decided to outsource all of the commercial and technicalmanagement of M/T Delos to International Ship Management Inc., or International, a related party controlled by the family of the Company's ChiefExecutive Officer, with terms similar to the ones between the Company and Central Mare. The management agreement ended in October 15, 2011 whenthe bareboat charter of the vessel with the Company was terminated. No termination fees were charged for the termination of the said agreement. (d) Central Mare Inc. ("Central Mare") – Executive Officers and Other Personnel Agreements: On September 1, 2010, the Company entered intoseparate agreements with Central Mare pursuant to which Central Mare provides the Company with its executive officers. These agreements were enteredinto in exchange for terminating prior agreements. Under the terms of the agreement for the Company's Chief Executive Officer, the Company is obligated to pay an annual base salary, a minimum cashbonus and stock compensation of 50,000 common shares of the Company to be issued at the end of each calendar year (see Note 13). The initial term of the agreement expires on August 31, 2014; however the agreement shall be automatically extended for successive one-year terms unlessCentral Mare or the Company provides notice of non-renewal at least sixty days prior to the expiration of the then applicable term. Under the terms of the agreement for the Company's Executive Vice President and Chairman, the Company is obligated to pay an annual base salary andadditional incentive compensation as determined by the board of directors. The initial term of the agreement expired on August 31, 2011; however theagreement shall automatically be extended for successive one-year terms unless Central Mare or the Company provides notice of non-renewal at least sixtydays prior to the expiration of the then applicable term. F-16Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. NOTES TO CONSOLIDATED FINANCIAL STATEMENTSAS OF DECEMBER 31, 2012 AND 2013AND FOR THE YEARS ENDED DECEMBER 31, 2011, 2012 AND 2013(Expressed in thousands of United States Dollars – except share, per share data and rate per day, unless otherwise stated) Under the terms of the agreement for the Company's Chief Financial Officer, the Company is obligated to pay an annual base salary. The initial term ofthe agreement expired on August 31, 2012; however the agreement shall automatically be extended for successive one-year terms unless Central Mare or theCompany provides notice of non-renewal at least sixty days prior to the expiration of the then applicable term. Under the terms of the agreement for the Company's Chief Technical Officer, the Company is obligated to pay an annual base salary. The initial term ofthe agreement expired on August 31, 2011, however the agreement shall automatically be extended for successive one-year terms unless Central Mare or theCompany provides notice of non-renewal at least sixty days prior to the expiration of the then applicable term. In the event of a change of control the ChiefTechnical Officer is entitled to receive a cash payment equal to three years' annual base salary. In addition, our Chief Technical Officer is subject to non-competition and non-solicitation undertakings. On March 1, 2011, the Company entered into an agreement with Central Mare pursuant to which, Central Mare furnishes certain administrativeemployees. Under the terms of this agreement the Company is obligated to pay an annual base salary.On July 1, 2012 the Executive Officers and Other Personnel Agreements were amended and the salaries of the executive officers were reduced as was thenumber of administrative employees provided.As of December 31, 2013 the net amount due to Central Mare was $807 and is included in Due to related parties, which is separately presented in theaccompanying consolidated balance sheets. The amount concerns $722 related to executive officers and other personnel expenses, $37 related tomanagement fees, $46 related to management agreement termination and $1 related to commissions on sale and purchase of vessels. The fees charged by Central Mare for the year ended December 31, 2012 and 2013 are as follows: Year Ended December 31, 2011 2012 2013 Management Fees $5,575 $2,345 $505 Management fees related party - Statement ofcomprehensive income/ (loss)Executive officers and other personnel expenses $5,405 $2,349 $1,760 General and administrative expenses -Statement of comprehensive income/ (loss)Superintendent Fees $184 $29 - Vessel operating expenses - Statement ofcomprehensive income/ (loss)Commission for sale of vessels $39 - $260 (Gain)/loss on sale of vessels - Statement ofcomprehensive income/ (loss)Commission on charter hire agreements $1,216 $275 $150 Voyage expenses - Statement of comprehensiveincome/ (loss)Management agreement termination fees $672 - $846 Management fees related party - Statement ofcomprehensive income/ (loss)Total $13,901 $4,998 $3,521 (e)Sovereign Equity Line Transaction: On August 24, 2011, the Company entered into a Common Stock Purchase Agreement with Sovereign HoldingsInc. ("Sovereign"), which is controlled by the Company's Chief Executive Officer and President. In this transaction, commonly known as an equity line,Sovereign committed to purchase up to $10,000 of the Company's common shares, to be drawn from time to time at the Company's request in multiplesof $500 over the following 12 months ("the Sovereign Equity Line Transaction"). Shares purchased under the Common Stock Purchase Agreement arepriced at the greater of (i) $0.45 per share and (ii) a per share price of 35% of the volume weighted average price of our common stock for the previous 12trading days. Also on August 24, 2011, the Company entered into a registration rights agreement with Sovereign, pursuant to which Sovereign has beengranted certain demand registration rights with respect to the shares issued to Sovereign under the Common Stock Purchase Agreement. In addition, onAugust 24, 2011, the Company entered into a lock-up agreement with Sovereign, pursuant to which Sovereign agreed not to sell shares acquired pursuantto the Common Stock Purchase Agreement for a period starting 12 months from each acquisition of such shares. F-17Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. NOTES TO CONSOLIDATED FINANCIAL STATEMENTSAS OF DECEMBER 31, 2012 AND 2013AND FOR THE YEARS ENDED DECEMBER 31, 2011, 2012 AND 2013(Expressed in thousands of United States Dollars – except share, per share data and rate per day, unless otherwise stated) The Sovereign Equity Line Transaction was entered into to meet urgent short-term liquidity needs, especially the Company's debt service obligations. Thediscount at which the shares are sold under the equity line was evaluated in the context of the Company's urgent liquidity needs, the lack of alternativesavailable to the Company to raise capital due to unfavorable market conditions, the flexibility provided by the Sovereign transaction and the 12 monthlock-up agreement that accompanied the transaction that made the shares illiquid for Sovereign. The Board established a special committee composed of independent directors (the "Special Committee") to consider the Sovereign Equity LineTransaction and make a recommendation to the Board. In the course of its deliberations, the Special Committee hired an independent investment bankwhich had never previously done any work for the Company or for Sovereign and obtained a fairness opinion from that investment bank. On August24, 2011, the Special Committee determined that the Sovereign Equity Line Transaction was fair to and in the Company's best interest and the bestinterests of its shareholders. Upon the recommendation of the Special Committee, the Board approved the Sovereign Equity Line Transaction on August24, 2011 and the Company entered into the Agreement on that date. The Company drew down $2,000 under the Common Stock Purchase Agreement at a price of $0.7793 per share on September 1, 2011, and on October19, 2011, the Company drew down $5,000 at a price of $0.45 per share. Financial instruments classified as FVTPL are recognized at fair value in the balance sheet when the Company has an obligation to perform under thecontractual provisions of those instruments. Financial instruments are classified as liabilities or equity in accordance with the substance of the contractualarrangement. Changes in the financial instruments are recognized in earnings. (f)Central Shipping Monaco SAM: On September 21, 2011, the Company entered into a lease agreement for one year for the provision of office space inMonaco, effective from October 1, 2011 with Central Shipping Monaco SAM, a related party controlled by the family of the Company's Chief ExecutiveOfficer and President. This agreement was extended up to December 12, 2012 and then terminated. This termination did not result in any additional feesor costs. (g)Central Mare Inc. ("Central Mare") – Credit Facility: On July 16, 2011 the Company entered into an unsecured credit facility with Central Mare forEuro 1,800 ($2,372 applying the $U.S. Dollar/Euro exchange rate as of December 31, 2012) to be used for general working capital purposes. The loanwas fully repaid on October 22, 2013. (h) Shipping Financial Services Inc Credit Facility: On July 1, 2011 the Company entered into an unsecured credit facility with Shipping FinancialServices Inc, a related party ultimately controlled by the family of our Chief Executive Officer, for Euro 350 ($461 applying the $U.S. Dollar/Euroexchange rate as of December 31, 2012) to be used for general working capital purposes. The loan was fully repaid on October 24, 2013. 8. Leases: A. Lease arrangements, under which the company acts as the lesseei) Operating lease M/T Delos:On October 1, 2010, the Company entered into a bareboat charter agreement to lease vessel M/T Delos until September 30, 2015 for a variable rate per year.Additionally, the Company agreed to pay $480 together with the first hire. The bareboat charter agreement was accounted for as operating lease. Charterers hadcertain options by the end of the normal charter period (five years) to purchase the vessel. F-18Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. NOTES TO CONSOLIDATED FINANCIAL STATEMENTSAS OF DECEMBER 31, 2012 AND 2013AND FOR THE YEARS ENDED DECEMBER 31, 2011, 2012 AND 2013(Expressed in thousands of United States Dollars – except share, per share data and rate per day, unless otherwise stated) During the years ended December 31, 2011, 2012 and 2013, lease payments relating to the bareboat charters of the vessel were $2,380, $0 and $0 respectivelyand are included in Charter hire expense in the accompanying consolidated statements of comprehensive income/(loss). On October 15, 2011 the Companyterminated the bareboat charter agreement resulting in a termination expense of $5,750 included in "Lease Termination Expense" in the accompanyingconsolidated statements of comprehensive income/(loss) for the year ended December 31, 2011. As of December 31, 2012 and 2013 the outstanding amount ofthe termination fee was $5,306 and $4,706 respectively (see Note 20).ii) Office lease:In January 2006, Top Tanker Management entered into an agreement to lease office space in Athens, Greece, with an unrelated party. In September 2010 theagreement was amended and the new monthly rent starting then was renegotiated down to Euro 41 or $55 (based on the U.S. Dollar/Euro exchange rate as ofDecember 31, 2010) and it was agreed to revert occupancy in certain areas of the leased office space by the end of April 2011, with all other terms remainingunchanged. On September 1, 2011, the agreement was amended again and the new monthly rent was renegotiated down to Euro 8 or $10.4 (based on the U.S.Dollar/Euro exchange rate as of December 31, 2011). It was also agreed to revert occupancy in a larger area of the leased office space. In January 1, 2013, theagreement was amended again and the new monthly rent was renegotiated down to Euro 2.5 or $3.4 (based on the U.S. Dollar/Euro exchange rate as ofDecember 31, 2013) and the annual adjustment for inflation increase plus 1% clause was removed. It was also agreed to revert occupancy in an even largerarea of the leased office space and to extend the duration of the lease to December 31, 2024. All other terms of the lease remained unchanged. General andadministrative expenses for the years ended December 31, 2011, 2012 and 2013 include $531, $127 and $40, respectively, for rent expense. As a result of theabove mentioned agreements for the reversion of occupancy in certain areas of the leased office space the Company made a revision in the useful life of certainleasehold improvements that would have been amortized over the life of the lease, resulting in accelerated depreciation of $931 and $621 in 2011 and 2012respectively which are included in the consolidated statement of comprehensive income/ (loss).In May 2007, Top Tankers (U.K) Limited entered into a lease agreement for office space in London. The lease agreement was valid from June 2007 and wouldcontinue until either party gave to the other one calendar month written notice. The annual lease was GBP 20 or $32 (based on the U.S. Dollar/GBP exchangerate as of December 31, 2009), payable quarterly in advance. In September 2010, Top Tankers (U.K) Limited entered into a new lease agreement for officespace in London. The new lease agreement was valid from September 2010 and would continue until either party gave to the other one calendar month writtennotice. The new annual lease was GBP 12 or $19 (based on the U.S. Dollar/GBP exchange rate as of December 31, 2012). This agreement was terminated inSeptember 30, 2012. General and administrative expenses for the years ended December 31, 2011, 2012 and 2013 include $19, $14 and $0, respectively, forrent expense.In November 2009, Top Ships Inc. entered into a lease agreement for office space in London. The initial agreement was signed on November 15, 2009 andexpired on November 14, 2010. The agreement was extended for another year with all terms remaining unchanged. On November 15, 2011 the agreement wasextended for another year with all terms remaining unchanged. Finally the agreement was terminated on June 30, 2012. The monthly rent was GBP 26 or $42(based on the U.S. Dollar/GBP exchange rate as of December 31, 2012). General and administrative expenses for the year ended December 31, 2011, 2012 and2013 include $498, $247 and $0 for rent expense.In September 2011, Top Ships Inc. entered into a lease agreement for office space in Monaco with Central Shipping Monaco SAM, a Company which iscontrolled by the Company's Chief Executive Officer and President. The monthly rent was Euro 5 or $7 (based on the U.S. Dollar/Euro exchange rate as ofDecember 31, 2012). This agreement was extended up to December 2012 and then terminated. This termination did not result in any additional fees. Generaland administrative expenses for the year ended December 31, 2012 and 2013 include $87 and $0 for rent expense respectively. F-19Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. NOTES TO CONSOLIDATED FINANCIAL STATEMENTSAS OF DECEMBER 31, 2012 AND 2013AND FOR THE YEARS ENDED DECEMBER 31, 2011, 2012 AND 2013(Expressed in thousands of United States Dollars – except share, per share data and rate per day, unless otherwise stated) iii) Future minimum lease payments:The Company's future minimum lease payments required to be made after December 31, 2013, related to the existing at December 31, 2013 leases are asfollows:Year ending December 31, Office Lease 2014 41 2015 41 2016 41 2017 41 2018 41 2019 and thereafter 246 Total 451 B. Lease arrangements, under which the company acts as the lessori) Charter agreements:All of the Company's time charters and bareboat charters are classified as operating leases. Revenues under operating leases are recognized when a charteragreement exists, charter rate is fixed and determinable, the vessel is made available to the lessee and collection of related revenue is reasonably assured.As of December 31, 2013, the Company did not operate any vessels and hence has no future time-charter receipts.9. Prepayments and Other:The amounts shown in the accompanying consolidated balance sheets are analyzed as follows: December 31,2012 December 31,2013 Prepaid expenses 77 54 Other receivables 1,012 464 Total 1,089 518 10. Debt:The amounts in the accompanying consolidated balance sheets are analyzed as follows: Borrower / Vessel(s) December 31, December 31, 2012 2013 HSH Warhol / Miss Marilena 29,456 - Indiana / Tyrrhenian Wave 21,224 - Britto / Britto 26,393 - Jeke / Evian (ex Papillon) 15,662 - DVB Hongbo / Hongbo 24,289 - Hongbo / Bridge Loan 3,520 - ALPHA Lichtenstein / Lichtenstein 26,819 - LAURASIA TRADING The Company 3,032 - Total 150,395 - Less-current portion (150,395) - LOANS FROM RELATED PARTIES CENTRAL MARE INC The Company 2,218 - SHIPPING FINANCIAL SERVICES INC The Company 414 - Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Total loans from related parties 2,632 Borrower / Vessel(s) December 31, December 31, 2012 2013 Banksy / Ionian Wave* 19,592 - Debt related to Vessel held for sale 19,592 - *M/T UACC Sila as of December 31, 2012 was classified as held for sale. F-20Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. NOTES TO CONSOLIDATED FINANCIAL STATEMENTSAS OF DECEMBER 31, 2012 AND 2013AND FOR THE YEARS ENDED DECEMBER 31, 2011, 2012 AND 2013(Expressed in thousands of United States Dollars – except share, per share data and rate per day, unless otherwise stated) (a) HSH:As of December 31, 2012, the Company's subsidiaries had a total outstanding balance with HSH of $93,664, excluding unamortized financing fees of$929, under two facilities (bulker financing and product tanker financing), as follows: Bulker FinancingM/V Evian: At December 31, 2012, Jeke had a loan outstanding of $15,768, maturing in February 2015, excluding unamortized financing fees of $106.Product Tanker FinancingWarhol: At December 31, 2012, Warhol had a loan outstanding of $29,712, maturing in February 2019, excluding unamortized financing fees of $256.Indiana: At December 31, 2012, Indiana had a loan outstanding of $21,527, maturing in March 2019, excluding unamortized financing fees of $303.Britto: At December 31, 2012, Britto had a loan outstanding of $26,658, maturing in May 2019, excluding unamortized financing fees of $265.On October 16, 2013, the Company sold the shipowning companies of the vessels M/V Evian, M/T Miss Marilena, M/T UACC Shams and M/T Brittotogether with all their outstanding loan balances with HSH. For further details, refer to Note 19. (b) DVB:As of December 31, 2012, the Company's subsidiaries had a total outstanding balance with DVB of $48,247, excluding unamortized financing fees of $846,under one facility, as follows:Tranche A:Tranche A-Banksy: As of December 31, 2012, Banksy had a loan outstanding of $20,000, excluding unamortized financing fees of $408.Tranche A-Hongbo: As of December 31, 2012, Hongbo had a loan outstanding of $24,727, excluding unamortized financing fees of $438.Tranche B: As of December 31, 2012 the outstanding amount of Tranche B, was $3,520.On October 16, 2013, the Company sold the shipowning company of the vessel M/V Hongbo together with its outstanding loan balance with DVB. Forfurther details, refer to Note 19. F-21Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. NOTES TO CONSOLIDATED FINANCIAL STATEMENTSAS OF DECEMBER 31, 2012 AND 2013AND FOR THE YEARS ENDED DECEMBER 31, 2011, 2012 AND 2013(Expressed in thousands of United States Dollars – except share, per share data and rate per day, unless otherwise stated) (c) ALPHA:As of December 31, 2012, the Company's subsidiary Lichtenstein had a loan outstanding of $27,000, maturing in February 2019, excluding unamortizedfinancing fees of $181.On October 16, 2013, the Company sold the shipowning company of the vessel M/V Lichtenstein together with its outstanding loan balance with ALPHA. Forfurther details, refer to Note 19.Other loansLaurasia Trading Ltd Credit Facility:As of December 31, 2012, the outstanding amount under the Laurasia Trading Ltd credit facility was $3.25 million. The facility was repaid in full onOctober 17, 2013. Shipping Financial Services Inc Credit Facility: As of December 31, 2012, the outstanding amount under the Shipping Financial Services Inc credit facility was Euro 350 ($462 applying the $U.S.Dollar/Euro exchange rate as of December 31, 2012). The facility was repaid in full on October 22, 2013.Central Mare Inc Credit Facility: As of December 31, 2012, the outstanding amount under the Central Mare Inc credit facility was Euro 1,800 ($ 2,375 applying the $U.S. Dollar/Euroexchange rate as of December 31, 2012). The facility was repaid in full on October 24, 2013. Debt Covenants:As of December 31, 2013 the Company had no indebtedness and hence no requirements stemming from loan covenants. Interest Expense: Interest expense for the years ended December 31, 2011, 2012 and 2013, amounted to $10,068, $7,240 and $4,644 respectively and isincluded in interest and finance costs in the accompanying consolidated statements of comprehensive income/(loss) (Note 16). Interest expense for 2013includes $139 of interest for M/T Delos termination fee (see Note 20).Financing Costs: The additions in deferred financing costs amounted to $1,128 and $724 during the years ended December 31, 2012 and 2013. For 2012as well as for 2013, these figures are due to the successive one-year extensions of the Laurasia, Central Mare and Shipping Financial Services facilities.The weighted average interest rates, as of December 31, 2012 and 2013, excluding all swaps, were 3.55% and 3.7%, respectively.The vessel-owning subsidiary companies with outstanding loans had restricted net assets amounting to $15,806 and $0 as of December 31, 2012 and 2013,respectively. 11. Commitments and Contingencies:Various claims, suits, and complaints, including those involving government regulations and product liability, arise in the ordinary course of the shippingbusiness. In addition, losses may arise from disputes with charterers, agents, insurance and other claims with suppliers relating to the operations of theCompany's vessels. Currently, management is not aware of any such claims or contingent liabilities, which should be disclosed, or for which a provisionshould be established in the accompanying consolidated financial statements. F-22Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. NOTES TO CONSOLIDATED FINANCIAL STATEMENTSAS OF DECEMBER 31, 2012 AND 2013AND FOR THE YEARS ENDED DECEMBER 31, 2011, 2012 AND 2013(Expressed in thousands of United States Dollars – except share, per share data and rate per day, unless otherwise stated) On December 5 and December 16 of 2013, the Company agreed to acquire two newbuilding product/chemical tankers with attached time charters attachedfrom two entities affiliated with the Company's President, Chief Executive Officer and Director, Evangelos J. Pistiolis. The newbuilding vessels are scheduledfor delivery from Hyundai Mipo Dockyard Co., Ltd. in the first and third quarter of 2015. The purchase price of the newbuilding vessels is $35,000 and$37,000 respectively, and is payable as follows: 20% as an initial deposit and 80% on delivery of the vessels (see Note 5).The Company accrues for the cost of environmental liabilities when management becomes aware that a liability is probable and is able to reasonably estimatethe probable exposure. Currently, management is not aware of any such claims or contingent liabilities, which should be disclosed, or for which a provisionshould be established in the accompanying consolidated financial statements. 12. Common Stock and Additional Paid-In Capital:Reverse Stock Split: On June 24, 2011, the Company effected a 1-for-10 reverse stock split of its common stock. There was no change in the number ofauthorized common shares of the Company. All share and per share amounts in these consolidated financial statements have been adjusted to reflect this stocksplit. The par value of the Company's common shares remained unchanged at $0.01 per share.13. Stock Incentive Plan:Starting on July 1, 2005 and on various grant dates (the "grant dates") thereafter, as outlined below, the Company granted shares pursuant to the Company's2005 Stock Incentive Plan as from time to time amended ("the Plan"), which was adopted in April 2005 to provide certain key persons (the "Participants"), onwhose initiatives and efforts the successful conduct of the Company's business depends, and who are responsible for the management, growth and protectionof the Company's business, with incentives to: (a) enter into and remain in the service of the Company, a Company's subsidiary, or Company's joint venture,(b) acquire a proprietary interest in the success of the Company, (c) maximize their performance, and (d) enhance the long-term performance of the Company(whether directly or indirectly) through enhancing the long-term performance of a Company subsidiary or Company joint venture. The granted shares have noexercise price and constitute a bonus in nature.In the case where restricted shares were granted, there were signed "Restricted Stock Agreements" between the Company and the Participants on the respectivegrant dates. Under these agreements, the Participants have the right to receive dividends and the right to vote the shares, subject to the following restrictions: i. Grants to Company's CEO. The Company's CEO shall not sell, assign, exchange, transfer, pledge, hypothecate or otherwise dispose of or encumber anyof the shares other than to a Company, which is wholly owned by the Company's CEO. The restrictions lapse on the earlier of (i) the time specified in therelevant Restricted Stock Agreement or (ii) the termination of the Company's CEO employment with the Company for any reason. As the shares granted to theCompany's CEO do not contain any future service vesting conditions, all such shares are considered vested shares on the grant date. ii. Grants to Other Participants. The Participants (officers, independent and executive members of the Board, Company's employees and consultants) shall notsell, assign, exchange, transfer, pledge, hypothecate or otherwise dispose of or encumber any of the shares. The restrictions lapse on the time specified in therelevant Restricted Stock Agreement conditioned upon the Participant's continued employment with the Company from the date of the agreement until the datethe restrictions lapse (the "vesting period").In the event the Participant's employment with the Company terminates for any reason before the end of the vesting period, that Participant shall forfeit allrights to all Shares that have not yet vested as of such date of termination. Dividends earned during the vesting period will not be returned to the Company,even if the unvested shares are ultimately forfeited. As these Shares granted to other than the CEO Participants contain a time-based service vesting condition,such shares are considered non-vested shares on the grant date. F-23Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. NOTES TO CONSOLIDATED FINANCIAL STATEMENTSAS OF DECEMBER 31, 2012 AND 2013AND FOR THE YEARS ENDED DECEMBER 31, 2011, 2012 AND 2013(Expressed in thousands of United States Dollars – except share, per share data and rate per day, unless otherwise stated) The following table presents grants pursuant to the Plan's issuance from 2009 onwards: Grant Date Number ofShares Issued to Vesting Period (according to the way stock-based compensationis expensed)December 21, 2009 30,000 New Non-Executive Directors proportionately over a period of 5 yearsDecember 21, 2009 50,000 CEO on the grant dateOctober 29, 2010 24,999 Officer 15 equal monthly installments (1st vesting on the grant date)October 29, 2010 49,999 Officer 15 equal monthly installments (1st vesting on the grant date)December 2, 2010 50,000 CEO on the grant dateDecember 1, 2011 50,000 CEO on the grant dateFebruary 12, 2013 50,000 CEO on the grant dateSeptember 26, 2013 50,000 Officer on the grant dateSeptember 26, 2013 40,000 Officer on the grant dateDecember 18, 2013 50,000 CEO on the grant date All share amounts have been adjusted for the 1:3 reverse stock split effected on March 20, 2008 and the 1:10 reverse stock split effected on June 24, 2011.A summary of the status of the Company's non-vested shares as of December 31, 2013 and movement during the year ended December 31, 2013, is presentedbelow: Non-vestedShares Weightedaverage grantdate fairvalue As of January 1, 2013 154,744 $52.25 Granted and issued shares 140,000 $1.52 Granted and non issued shares 50, 000 $1.60 Vested (197,500) $3.41 As of December 31, 2013 147,244 $52.32 The compensation expense recognized in the years ended December 31, 2011, 2012 and 2013 was $1,412, $378 and $345 and is included in General andadministrative expenses in the consolidated statements of comprehensive income/(loss). As of December 31, 2013, the total unrecognized compensation costrelated to non-vested share awards is $0. The weighted average grant date fair value of shares granted, vested and forfeited for the years 2011, 2012 and 2013was $47.95, $52.25 and $52.32 respectively.The total fair value of shares vested during the years ended December 31, 2012 and 2013 was $51 and $309 respectively.On December 18, 2013 the Board of Directors granted 50,000 shares to the Company's Chief Executive Officer at a price of $1.60 per share to be issued toSovereign Holdings Inc., a company wholly owned by our Chief Executive Officer, in accordance with the CEO's employment contract dated September 1,2010. The shares vest six months from the date of grant, with any unvested restricted stock vesting upon his termination from the Company for any reason(including resignation). However, as the shares granted to the Company's Chief Executive Officer do not contain any future service vesting conditions, allsuch shares are considered vested shares on the grant date. The compensation expense of $80 is included in General and administrative expenses in theconsolidated statements of comprehensive income/(loss) for the year ended December 31, 2013. These shares were issued on January 17, 2014.The Company estimates the future forfeitures of non-vested shares to be immaterial. The Company will, however, re-evaluate the reasonableness of itsassumption at each reporting period. F-24Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. NOTES TO CONSOLIDATED FINANCIAL STATEMENTSAS OF DECEMBER 31, 2012 AND 2013AND FOR THE YEARS ENDED DECEMBER 31, 2011, 2012 AND 2013(Expressed in thousands of United States Dollars – except share, per share data and rate per day, unless otherwise stated) No dividends were paid in the years ended December 31, 2011, 2012 and 2013.14. Earnings (loss) Per Common Share:All shares issued (including non-vested shares issued under the Plan) are the Company's common stock and have equal rights to vote and participate individends and in undistributed earnings. Non-vested shares do not have a contractual obligation to share in the losses. Dividends declared during the periodfor non-vested common stock as well as undistributed earnings allocated to non-vested stock are deducted from net income / (loss) attributable to commonshareholders for the purpose of the computation of basic earnings per share in accordance with two-class method as required by relevant guidance. Thedenominator of the basic earnings per common share excludes any non vested shares as such are not considered outstanding until the time-based vestingrestriction has elapsed. For purposes of calculating diluted earnings per share the denominator of the diluted earnings per share calculation includes the incremental shares assumedissued under the treasury stock method weighted for the period the non-vested shares were outstanding, with the exception of the 147,244 shares, granted to theCompany's CEO, which will vest in the event of change of control. Consequently, those shares are excluded from the remaining non-vested shares. The components of the calculation of basic and diluted earnings per share for the years ended December 31, 2011, 2012 and 2013 are as follows: Year Ended December 31, 2011 2012 2013 Net (loss) income $(189,112) $(63,984) $1,408 Net (loss) income available to common shareholders $(189,112) $(63,984) $1,408 Weighted average common shares outstanding, basic 6,304,679 16,989,585 17,061,530 Weighted average common shares outstanding, diluted 6,304,679 16,989,585 17,111,530 (Loss) / income per common share, basic and diluted $(30.00) $(3.77) $0.08 For the years ended December 31 2011, 2012 and 2013, 180,244, 154,744 and 147,244 shares respectively, of non-vested shares as at the end of each year,were not included in the computation of diluted earnings per share because to do so would have been antidilutive for the periods presented.15. Voyage and Vessel Operating Expenses:The amounts in the accompanying consolidated statements of comprehensive income/(loss) are as follows (expressed in thousands of U.S. Dollars):Voyage Expenses Year Ended December 31, 2011 2012 2013 Port charges 1,141 24 18 Bunkers 4,684 177 125 Commissions 1,918 822 520 Total 7,743 1,023 663 F-25Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. NOTES TO CONSOLIDATED FINANCIAL STATEMENTSAS OF DECEMBER 31, 2012 AND 2013AND FOR THE YEARS ENDED DECEMBER 31, 2011, 2012 AND 2013(Expressed in thousands of United States Dollars – except share, per share data and rate per day, unless otherwise stated) Vessel Operating Expenses Year Ended December 31, 2011 2012 2013 Crew wages and related costs 5,415 361 - Insurance 1,165 83 47 Repairs and maintenance 1,356 179 689 Spares and consumable stores 2,369 184 - Taxes (Note 17) 63 7 9 Total 10,368 814 745 During 2013, the bareboat charterer of the M/V Evian failed to pay operating expenses of the vessel, as per the bareboat charter party. Hence the Company, inorder to avoid the detention of M/V Evian, paid a portion of the operating expenses that the bareboat charterer incurred in 2013 and that related mainly torepairs and maintenance expenses16. Interest and Finance Costs:The amounts in the accompanying consolidated statements of comprehensive income/(loss) are analyzed as follows (expressed in thousands of U.S. Dollars):Interest and Finance Costs Year Ended December 31, 2011 2012 2013 Interest on debt (Note 10) 10,068 7,240 4,644 Bank charges 16 297 964 Amortization and write-off of financing fees 2,234 1,437 1,835 Amortization of debt discount 3,965 371 - Total 16,283 9,345 7,443 17. Income Taxes:Marshall Islands, Cyprus and Liberia do not impose a tax on international shipping income. Under the laws of Marshall Islands, Cyprus and Liberia, thecountries of the companies' incorporation and vessels' registration, the companies are subject to registration and tonnage taxes, which have been included invessels' operating expenses in the accompanying consolidated statements of comprehensive income/(loss).Pursuant to the United States Internal Revenue Code of 1986, as amended (the "Code"), U.S. source income from the international operations of ships isgenerally exempt from U.S. tax if the Company operating the ships meets both of the following requirements, (a) the Company is organized in a foreigncountry that grants an equivalent exception to corporations organized in the United States and (b) either (i) more than 50% of the value of the Company's stockis owned, directly or indirectly, by individuals who are "residents" of the Company's country of organization or of another foreign country that grants an"equivalent exemption" to corporations organized in the United States (50% Ownership Test) or (ii) the Company's stock is "primarily and regularly traded onan established securities market" in its country of organization, in another country that grants an "equivalent exemption" to United States corporations, or inthe United States (Publicly-Traded Test). Under the regulations, a Company's stock will be considered to be "regularly traded" on an established securities market if (i) one or more classes of its stockrepresenting more than 50 percent of its outstanding shares, by voting power and value, is listed on the market and is traded on the market, other than inminimal quantities, on at least 60 days during the taxable year; and (ii) the aggregate number of shares of stock traded during the taxable year is at least 10%of the average number of shares of the stock outstanding during the taxable year. F-26Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. NOTES TO CONSOLIDATED FINANCIAL STATEMENTSAS OF DECEMBER 31, 2012 AND 2013AND FOR THE YEARS ENDED DECEMBER 31, 2011, 2012 AND 2013(Expressed in thousands of United States Dollars – except share, per share data and rate per day, unless otherwise stated) The Marshall Islands, where the Company is incorporated, grants an "equivalent exemption" to United States corporations. Therefore, the Company is exemptfrom United States federal income taxation with respect to U.S.-source shipping income if either the 50% Ownership Test or the Publicly-Traded Test is met.The Company believes that for periods prior to its initial public offering in July 2004, it satisfied the 50% Ownership Test. The Company also believes thatfor periods subsequent to its initial public offering, it satisfies the Publicly-Traded Test on the basis that more than 50% of the value of its stock is primarilyand regularly traded on the Nasdaq National Market and, therefore, the Company and its subsidiaries are entitled to exemption from U.S. federal income tax,in respect of their U.S. source shipping income. 18. Derivative Financial Instruments:The principal financial assets of the Company consist of cash on hand and at banks and accounts receivable due from charterers. The principal financialliabilities of the Company consist of accounts payable due to suppliers, termination fee outstanding (see Note 20) and an interest rate swap agreement.a) Interest rate risk: As of December 31, 2013 the Company bears no interest rate risk relating to the variability of the cash flows since there is nooutstanding senior debt and the only interest rate swap arrangement is not pegged to a floating interest rate. The only exposure the Company retains toFloating interest rates relates to the outstanding balance of the termination fee outstanding (see Note 20).b) Credit risk: Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist principally of cash andtrade accounts receivable.The Company places its temporary cash investments, consisting mostly of deposits, with high credit qualified financial institutions. The Companyperforms periodic evaluations of the relative credit standing of those financial institutions with which it places its temporary cash investments. TheCompany limits its credit risk with accounts receivable by performing ongoing credit evaluations of its customers' financial condition and generallydoes not require collateral for its accounts receivable.c) Fair value: The carrying values of cash and cash equivalents, restricted cash, accounts receivable and accounts payable are reasonable estimates of theirfair value due to the short-term nature of these financial instruments. The carrying value of the termination fee outstanding approximates its fair value asthis represents an interest bearing liability pegged to floating Libor rates. The Company considers its creditworthiness when determining the fair value ofthe credit facilities. The carrying value approximates the fair market value for the floating rate loans. The fair value of interest rate swaps is determinedusing a discounted cash flow method taking into account current and future interest rates and the creditworthiness of both the financial instrumentcounterparty and the Company. The estimated fair value of the Company's derivatives outstanding as at December 31, 2012 and 2013, as detailed below, approximates their carrying values.Counterparty SWAPNumber (Nr) NotionalAmount PeriodEffective Date Interest RatePayable Fair Value - Liability December 31,2013 December 31,2012** December 31,2013 ALPHA 1 $20,000 7 yearsMarch 30, 2008 10.85% (2,785) (1,697)** The total value of the Company's interest rate swap arrangements as of December 31, 2012 was $5,811. Two of our interest rate swap arrangements as ofDecember 31, 2012 matured on March 27, 2013 and June 30, 2013 respectively and another two were transferred on October 16, 2013 to the new owners ofJeke Shipping Company Limited. (owner of the M/T Evian) in accordance with the stock purchase agreement for the disposal of the subsidiary (see Note19). The table above presents a comparison of the value of our interest rate swap arrangements as of December 31, 2013 with it's corresponding value onDecember 31, 2012. F-27Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. NOTES TO CONSOLIDATED FINANCIAL STATEMENTSAS OF DECEMBER 31, 2012 AND 2013AND FOR THE YEARS ENDED DECEMBER 31, 2011, 2012 AND 2013(Expressed in thousands of United States Dollars – except share, per share data and rate per day, unless otherwise stated) The Company entered into interest rate swap transactions to manage interest costs and the risk associated with changing interest rates with respect to itsvariable interest rate loans and credit facilities. These interest rate swap transactions fixed the interest rates based on predetermined ranges in current LIBORrates. As of December 31, 2013, the Company's outstanding interest rate swap had a combined notional amount of $20,000.The Company has entered into an agreement with Alpha bank relating to the Alpha bank Swap, according to which, the Company has pledged an amount of$1,739 as of December 31, 2013 to an account controlled by Alpha bank as a cash collateral for the repayment of interest of the Alpha bank Swap.The Company follows the accounting guidance for Fair Value Measurements and Disclosures. This guidance enables the reader of the financial statements toassess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determinefair values. The statement requires assets and liabilities carried at fair value to be classified and disclosed in one of the following three 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 Company pays a fixed rate and receives a fixed rate for its remaining interest rate swap with Alpha bank. The fair values of those derivatives determinedthrough Level 2 of the fair value hierarchy are derived principally from or corroborated by observable market data. Inputs include quoted prices for similarassets, liabilities (risk adjusted) and market-corroborated inputs, such as market comparables, interest rates, yield curves and other items that allow value tobe determined.As of December 31, 2013, no fair value measurements for assets or liabilities under Level 1 or Level 3 were recognized in the Company's consolidatedfinancial statements.The following table summarizes the valuation of the Company's assets measured at fair value on a non-recurring basis as of December, 31, 2013. No itemswere measured at fair value on a non-recurring basis at December 31, 2013.Items Measured at Fair Value on a Nonrecurring Basis Fair Value Measurements December 31,2012 Quoted pricesin active marketsfor identical assets Significantotherobservableinputs UnobservableInputs Gains/ Non – Recurring Measurements: Level 1 Level 2 Level 3 (Losses) Long-lived assets held for sale $25,200 $25,200 $(16,978)Long-lived assets held and used $164,792 $164,792 $( 46,592)Long-lived assets previously held for sale andcurrently held and used $12,500 $12,500 $2,086 In accordance with the provisions of relevant guidance, a long-lived asset held for sale, namely M/T UACC Sila, with a carrying amount of $42,178 waswritten down to its fair value of $25,200, resulting in an impairment charge of $16,978, which was included in the accompanying consolidated statement ofcomprehensive income/ (loss) for December 31, 2012 (see Note 4). The fair value of the impaired vessel was determined based on a market approach, whichconsisted of quotations from well respected brokers regarding vessels with similar characteristics as compared to the Company's vessels. As a result, theCompany classified this long-lived asset held for sale as Level 2. F-28Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. NOTES TO CONSOLIDATED FINANCIAL STATEMENTSAS OF DECEMBER 31, 2012 AND 2013AND FOR THE YEARS ENDED DECEMBER 31, 2011, 2012 AND 2013(Expressed in thousands of United States Dollars – except share, per share data and rate per day, unless otherwise stated) In accordance with the provisions of relevant guidance, long-lived assets held and used, namely M/T Miss Marilena, M/T Lichtenstein, M/T UACCSchams, M/T Britto and M/T Hongo, with a total carrying amount of $211,384 were written down to a total fair value of $164,792, resulting in animpairment charge of $46,592, which was also included in the accompanying consolidated statement of comprehensive income/ (loss)for December 31, 2012(see Note 4).The fair value of the impaired vessels was determined by a combination of market approach, which consisted of quotations from well respectedbrokers regarding vessels with similar characteristics as compared to the Company's vessels, that determined the charter-free vessel value (level 2) and acharter valuation based on the Company's projections employing assumptions used by market participants (level 3). The Company has split its approach intwo sections: (i) Charter-free value of the vessel. Charter-free value was determined from quotations from well respected brokers regarding vessels with similarcharacteristics with the vessels of the Company. This market approach was deemed more objective mainly due to the multitude of transactions of comparableassets in the active and liquid shipping S & P market. Valuation inputs from the market approach are considered Level 2 in the fair value hierarchy, since theCompany uses a valuation derived from prices in observed transactions. (ii) Value of the charter. The valuation of the attached timecharter on three of theCompany's impaired tankers entailed the discounting of the differential between the current long period timecharter for a similar vessel and the timecharteralready attached to the vessel for the duration of the latter. The source of the current long period timecharter rates were third party independent shipbrokers.Apart from the long period timecharter rates, budgeted operating expenses and the discount rate that the Company used, there were no other assumptions usedin the discounting model. The discount rate used by the Company took into account the cost of equity of the company, the country risk of the charterer'scountry and the default rate of the charterer. The operating expenses used were management estimates based on the management's experience in operating thistype of vessel. The charter valuation, since it entails the use of judgments and assumptions, was individually considered a level 3 approach. Howeveraccording to ASC 820-10-35-37 (Applying ASU 2011-04) if the level 3 part of the valuation is deemed insignificant (18.7% of the total value was derived fromlevel 3 inputs) from the Company the prevailing level would be level 2, hence the Company characterized the valuation approach as a Level 2 in its entirety.In accordance with the provisions ASC 360-10-35-44, long-lived assets previously classified as held for sale that were classified as held and used as ofDecember 31, 2012 with a carrying amount of $10,414 were valued at $12,500, resulting in a write-up of $2,086, which was included in the accompanyingconsolidated statement of comprehensive income/ (loss) for the year ended December 31, 2012 (see Note 4). According to the provisions of abovementionedguidance the Company measured (i) the carrying amount of the vessel before it was classified as held for sale, adjusted for any depreciation expense thatwould have been recognized had the vessel been continuously classified as held and used and (ii) the fair value of the vessel on December 31, 2012, whichwas the date that the Company decided not to sell the asset. The Company determined that the lower value of the two above measurements was the fair value ofthe vessel on December 31, 2012 and used that as fair value. The fair value of the vessel on December 31, 2012 was determined based on a market approach,which consisted of quotations from well respected brokers regarding vessels with similar characteristics as compared to our vessels. As a result, the Companyclassified this long-lived asset held and used as Level 2.The following tables summarize the valuation of our derivative financial instruments as of December 31, 2012 and 2013 respectively: As of December 31, 2012 Fair Value Measurement at Reporting Date Using Quoted Prices in Total ActiveMarkets forIdentical Assets(Level 1) SignificantOtherObservableInputs(Level 2) SignificantOtherUnobservableInputs(Level 3) Interest rate swaps $5,811 - $5,811 - As of December 31, 2013 Fair Value Measurement at Reporting Date Using Quoted Prices in Total ActiveMarkets forIdentical Assets(Level 1) SignificantOtherObservableInputs(Level 2) SignificantOtherUnobservableInputs(Level 3) Interest rate swaps $1,697 - $1,697 - F-29Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. NOTES TO CONSOLIDATED FINANCIAL STATEMENTSAS OF DECEMBER 31, 2012 AND 2013AND FOR THE YEARS ENDED DECEMBER 31, 2011, 2012 AND 2013(Expressed in thousands of United States Dollars – except share, per share data and rate per day, unless otherwise stated) The Company's interest rate swaps did not qualify for hedge accounting. The Company marks to market the fair market value of the interest rate swaps at theend of every period and reflects the resulting unrealized gain or loss during the period in "Gain / (loss) on derivative financial instruments" in its consolidatedstatement of comprehensive income/ (loss) as well as presents the fair value at the end of each period in the balance sheet. Information on the location andamounts of derivative fair values in the consolidated balance sheets and derivative losses in the consolidated statements of comprehensive income/(loss) arepresented below: Liability Derivatives December 31, 2012 December 31, 2013 Derivatives not designated as hedging instruments Balance Sheet Location Fair Value Balance Sheet Location Fair Value Balance Sheet Location Fair Value Interest rate swapsCurrent liabilities –Derivative financialinstruments $5,811 Current liabilities –Derivative financialinstruments $1,135 Non Current liabilities –Derivative financialinstruments $562 Total Derivatives notdesignated as hedginginstruments $5,811 $1,135 $562 In year ended December 31, 2012 due to covenant breaches we classified all our derivative financial instruments as current (see Note 3). Amount of Loss/(Gain) Recognized in Statement ofComprehensive Income/ (Loss) Derivative Instruments not designated ashedging instrumentsLocation of Loss/(Gain) recognized inIncome on DerivativeDecember 31,2011 December 31,2012 December 31,2013 Interest rate swapsLoss/(Gain) on derivative financial instruments $(2,835) $(2,656) $(2,313) Total Loss/(Gain) on Derivatives $(2,835) $(2,656) $(2,313)The Company has treated the Sovereign transaction as a freestanding financial instrument settled in the Company's common stock according to guidanceunder ASC 480-10 and as such the obligation is recognized in the balance sheet at fair value with changes in its fair value recorded in earnings. The Companydidn't recognize an obligation deriving from the Sovereign financial instrument as of December 31, 2011 since the Company is not obliged in any way to issueshares further shares or draw down the remaining $3 million under the Sovereign Transaction and has made no commitment to Sovereign to do so. Hence theinstrument was not valued and hence there were no changes in its fair value to be recorded in earnings. For the same reason, no changes in the Sovereignfinancial instrument's fair value were recorded in earnings during the year ended December 31, 2012. Finally the Company did not recognize an obligationderiving from the Sovereign financial instrument as of December 31, 2012 since the Sovereign financial instrument matured in August 25, 2012.19. Gain on disposal of subsidiaries:On October 16, 2013 the Company sold the shipowning subsidiaries which owned the six vessels of the Company's fleet (namely M/Ts Miss Marilena,Lichtenstein, UACC Shams, Britto, Hongbo and M/V Evian) to an affiliate of the AMCI Poseidon Fund LP, an unrelated party, for an aggregate cashconsideration of $173,000 less $135,448 in net debt and swap obligations of the Shipowning companies that were assumed by the buyers. A gain from thedisposal of subsidiaries of $1,591 was recognized, which is included in the Company's consolidated statement of comprehensive income/ (loss). F-30Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. NOTES TO CONSOLIDATED FINANCIAL STATEMENTSAS OF DECEMBER 31, 2012 AND 2013AND FOR THE YEARS ENDED DECEMBER 31, 2011, 2012 AND 2013(Expressed in thousands of United States Dollars – except share, per share data and rate per day, unless otherwise stated) 20. Other Non Current LiabilitiesOn October 1, 2010, the Company entered into a bareboat charter agreement to lease vessel M/T Delos until September 30, 2015 for a variable rate per year. OnOctober 15, 2011 the Company terminated the bareboat charter agreement resulting in a termination expense of $5,750 included in "Lease TerminationExpense" in the accompanying consolidated statements of comprehensive income/(loss) for the year ended December 31, 2011. As of December 31, 2012, theoutstanding amount of the termination fee was $5,306 (see Note 8).On January 1, 2013 the Company entered into an agreement with the owner of M/T Delos by which the termination fee outstanding as of December 31, 2012was divided into two tranches, "Tranche A" ($4,500) that bears interest of 3% plus Libor and "Tranche B" ($806) that doesn't bear interest. This agreementprovides for the repayment of Tranche A and Tranche B according to the following schedule.Year ending December 31, Tranche A oftheTerminationFee Tranche B oftheTerminationFee 2014 800 2015 800 2016 800 2017 1,500 806 3,900 806 Finally, according to this agreement the Company pays monthly interest payments. As of December 31, 2013 the non-current part of the termination fee is$3,906.21. Subsequent Events On February 6, 2014 the Company agreed to cancel the MOA that it had entered into on December 16, 2013 and entered into a new MOA to purchase another50,000 dwt newbuilding product/chemical tanker with a time charter from an entity also affiliated with the Company's President, Chief Executive Officer andDirector, Evangelos J. Pistiolis, scheduled for delivery from Hyundai Mipo Dockyard Co., Ltd. in May 2014. This cancellation didn't entail any penalties.The purchase price of the newbuilding is $38,250 payable as follows: $7,400 already paid on December 16, 2013 for the purchase of the vessel we agreed onin December 16, 2013, which as of December 31, 2013 is recorded under "Advances for Vessels Acquisitions" (see Note 5), $3,500 payable in cash inFebruary 2014 and $27,350 payable in cash or shares at the Company's option on delivery of the vessel. F-31Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Exhibit 4.19 EXECUTION VERSION STOCK PURCHASE AGREEMENT THIS STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of September 5, 2013, is entered into by and between TopShips Inc., a Marshall Islands corporation ("Seller"), and AMCI Products Limited, a Marshall Islands corporation ("Purchaser"). WHEREAS, Seller desires to sell to Purchaser, and Purchaser desires to purchase from Seller, all of the issued and outstanding capitalstock of certain subsidiaries of Seller; NOW, THEREFORE, in consideration of the premises and mutual covenants and obligations hereinafter set forth and other good andvaluable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller and Purchaser intending to be legally bound, hereby agree asfollows: ARTICLE IDEFINITIONS The following capitalized terms used in this Agreement shall have the following respective meanings: "Additional Purchase Agreements" means the separate Stock Purchase Agreements, of even date herewith, between Purchaser and Sellerwith respect to the shares of Lichtenstein Shipping Company Limited and of Hongbo Shipping Company Limited, respectively. "Affiliate" means a person that directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under commoncontrol with, another person. "Bank" means HSH Nordbank AG. "Books and Records" means minutes books, stock books, stock ledgers, books of account, manuals, general, financial, warranty andshipping records, invoices, members, customer and supplier lists, correspondence, engineering, maintenance and operating records, advertising andpromotional materials, credit records of customers and other documents, records and files, in each case related to the business of the Subsidiaries, excludingfinancial and tax books, records and files (or copies thereof) necessary for Seller to comply with its financial reporting and tax obligations. "Cash Consideration" means an amount as specified on Schedule B hereto. "Charterers" means Daelim Corporation, Perseveranza, Morgant and UACC. "Contract" means any agreement, arrangement, contract, commitment, understanding, letter of intent, term sheet or other instrument,whether written or oral, together with each amendment, supplement or side letter relating thereto. Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. "Control" including the terms "controlling," "controlled by" and "under common control with," means the possession, directly orindirectly, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting shares, by contractor otherwise. "Liability" means all indebtedness, obligations and other liabilities and contingencies of a person, whether absolute, accrued, contingent,fixed or otherwise, or whether due or to become due, including, without limitation, intercompany indebtedness, obligations and other intercompany liabilitiesand contingencies and suits, claims or litigation. "Lien" means, with respect to any property or asset (including the Shares), any lien (statutory or otherwise), mortgage, pledge, charge,security interest, hypothecation, community property interest, equitable interest, servitude, option, right (including rights of first refusal), restriction(including restrictions on voting, transfer or other attribute of ownership), lease, license, other rights of occupancy, adverse claim, reversion, reverter,preferential arrangement or any other encumbrance in respect of such property or asset. "Material Adverse Effect" means, with respect to Seller, a Subsidiary or Purchaser, any fact, change, effect, event or occurrence that (A)has, or would reasonably be expected to have, individually or in the aggregate, a material adverse effect on the assets (including the Vessels), Liabilities,business, financial condition or results of operations of Seller, such Subsidiary or Purchaser, as the case may be, or (B) would prevent or materially delaySeller or Purchaser, as the case may be, from performing its obligations under this Agreement in any material respect; provided, however, that a MaterialAdverse Effect will not be deemed to result from or arise out of (a) any change in general economic conditions in any countries in which Seller, a Subsidiary orPurchaser operate which is not unique to, and does not disproportionately impact, Seller, a Subsidiary or Purchaser, as the case may be, (b) any change orevent generally affecting companies operating in the industries or markets in which Seller, the Subsidiaries or Purchaser operates which is not unique to, anddoes not disproportionately impact, Seller, a Subsidiary or Purchaser, as the case may be, (c) any change in accounting requirements or in any law applicableto Seller, a Subsidiary or Purchaser, including the proposal or adoption of any new law or change in the interpretation or enforcement of any existing law, or(d) any change resulting from the execution of this Agreement or the consummation of any of the transactions contemplated hereby, including any changeresulting from or arising out of any announcement relating to this Agreement or the transactions contemplated hereby. "Morgant" means Morgant Navigation Corp. "Net Assumed Loan and Swap Amount" has the meaning specified on Schedule B hereto. "Permitted Liens" means (i) Liens securing the Assumed Loans and Swaps, (ii) Liens for taxes that are not yet due and payable or that arebeing contested in good faith by appropriate proceedings, (iii) statutory Liens of landlords and workers', carriers' and mechanics' or other like Liens incurredin the ordinary course of business consistent with past practices for amounts that are not yet due and payable or that are being contested in good faith, (iv)other maritime liens, charges and encumbrances incidental to the conduct of the business of a Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Subsidiary or the ownership and operation of a Subsidiary's Vessel which do not in the aggregate materially detract from the value of such Subsidiary's Vesselor materially impair the use thereof in the operation of its business. "Perseveranza" means Perseveranza DiNavigazione SPA. "Purchase Price" means (a) the Cash Consideration and (b) the Net Assumed Loan and Swap Amount. "Seller Disclosure Schedule" means the Disclosure Schedule to this Agreement of Seller, dated the date hereof. "Shares" means all of the issued and outstanding capital stock, and all outstanding options, rights and warrants to purchase securities, ofeach of the Subsidiaries to be sold by Seller and purchased by Purchaser in accordance with the terms hereof. "Stockholder Approval" means the approval by the stockholders of Seller of this Agreement and the Additional Purchase Agreements andthe transactions contemplated hereby and thereby. "Subsidiary" means each of the corporations listed on Schedule A hereto. "Swap Counterparties" means HSH Nordbank AG. "Vessels" means, collectively, the Evian, the Miss Marilena, the UACC Shams and the Britto which are owned by the Subsidiaries asreflected on Schedule A hereto, and each being individually referred to as a "Vessel". ARTICLE IIPURCHASE AND SALE OF SHARES SECTION 2.1. Purchase and Sale of the Shares. Upon the terms and subject to the conditions set forth in this Agreement, at theClosing, Seller will sell, transfer and deliver, and Purchaser will purchase from Seller, the Shares (free and clear of all Liens other than Liens securing theAssumed Loans and Swaps) for the Purchase Price. Such payment of the Cash Consideration shall be paid in accordance with Section 2.3(a). SECTION 2.2. Closing. The consummation of the transactions contemplated by this Agreement (the "Closing") shall take place at theoffices of Top Ships, Vass Sofias, Maroussi, Greece, at 10:00 a.m. (local time) on a date to be specified by the parties which shall be no later than fifteen (15)business days after satisfaction (or waiver as provided herein) of the conditions set forth in Article VI (other than those conditions that by their nature will besatisfied at the Closing), unless another time, date and/or place is agreed to in writing by the parties. The date upon which the Closing occurs is hereinreferred to as the "Closing Date." The Closing will be deemed effective as of 11:59 p.m. on the Closing Date (the "Effective Time"). By way of example, ifthe Stockholder Approval is obtained on September 25, 2013 and all other conditions are then satisfied, the Closing shall (unless otherwise agreed by theparties) take place no later than on October 16, 2013. Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. SECTION 2.3. Transactions to be Effected at the Closing. (a) At the Closing, Purchaser will:(i) pay to Seller, by transfer of immediately available funds in accordance with instructions to be provided by Seller, the CashConsideration;(ii) all copies of definitive documentation providing for assumption by Purchaser of the Assumed Loans and Swaps; and(iii) deliver to Seller all other documents, instruments or certificates required to be delivered by Purchaser at or prior to the Closingpursuant to this Agreement (including Section 6.1(b) hereof).(b) At the Closing, Seller will deliver to Purchaser:(i) a certificate or certificates representing the Shares duly endorsed or accompanied by stock powers duly endorsed in blank andwith any required stock transfer tax stamps affixed or with evidence of payment of any stamp duty or any other applicable tax;(ii) all other documents and instruments necessary to vest in Purchaser all of Seller's right, title and interest in and to the Shares, freeand clear of all Liens other than Liens securing the Assumed Loans and Swaps);(iii) all copies of the consents, approvals and notices obtained or provided to or from the Bank and the Swap Counterparties and theCharterers, as the case may be, in form and substance satisfactory to Purchaser (Purchaser having, prior to execution of this Agreement, seen theconsents or proposed consent terms of such parties and determined them to be satisfactory), including definitive documentation providing forassumption by Purchaser of the Assumed Loans and Swaps as of the Closing Date;(iv) evidence of (A) Seller's assumption of the Excluded Liabilities, (B) the termination of the Contracts set forth on Schedule C,including any agreements between the Subsidiaries, on the one hand, and Seller or any Affiliate of Seller on the other hand and (C) the cancellation ofany amounts or obligations owing by the Subsidiaries to Seller or any Affiliate of Seller;(v) the Books and Records;(vi) the resignations, effective as of the Closing, described in Section 6.1(a)(vi);(vii) a copy of (A) the certificate of incorporation, as amended (or similar incorporation or formation documents), of each Subsidiary,certified by the Registrar of Corporations (or comparable authority) of the jurisdiction in which each such entity is incorporated or organized, as of adate not earlier than three business days prior to the Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Closing and accompanied by a certificate of the Secretary or Assistant Secretary of each such entity, dated as of the Closing, stating that noamendments have been made to such certificate of incorporation (or similar incorporation or formation documents) since such date and (B) all otherorganizational documents of each Subsidiary, certified by the Secretary or Assistant Secretary of each such entity;(viii) good standing certificates for each Subsidiary from the Registrar of Corporations (or comparable authority) of the jurisdiction inwhich case such entity is incorporated or organized dated as of a date not earlier than three business days prior to the Closing; and(ix) all other documents, instruments or certificates required to be delivered by Seller at or prior to the Closing pursuant to thisAgreement (including Section 6.1 hereof).SECTION 2.4. Retained Assets and Liabilities. (a) Notwithstanding the sale and delivery of the Shares pursuant to Section 2.3, Purchaser and Seller hereby agree that Seller will not sell,assign, transfer or convey and Purchaser will not purchase, acquire or accept the right to (1) any insurance proceeds or other amounts received by Purchaseror Seller after the Effective Time relating to or arising from the period prior to the Effective Time, including those relating to the Zachello claim for UACCShams (ex Tyrrhenian Wave), and (2) any amounts received with respect to accounts receivable for charterhire from Morgant or Perseveranza relating toperiods prior to the Effective Time. In respect of clause (2) of the immediately preceding sentence, Purchaser shall pay over to Seller all amounts in excess of$11,500 per day received from Perseveranza after the Effective Time until the earlier of (i) such time as the accounts receivable from Perseveranza relating toperiods prior to the Effective Time are paid in full or (ii) such time as the charter for the Miss Marilena with Perseveranza is terminated. If after the EffectiveTime, Purchaser terminates the charter for the Miss Marilena with Perseveranza in exchange for an early termination payment from Perseveranza, Purchasershall pay Seller an amount equal to (x) $400,000 less (y) any amounts received by or paid to Seller with respect to payments from Perseveranza after theEffective Time pursuant to this Section 2.4(a), within ten (10) business days of the receipt of such early termination payment by wire transfer in accordancewith instructions to be provided by Seller.(b) Notwithstanding the sale and delivery of the Shares pursuant to Section 2.3, except for obligations under the loan agreements secured byfirst priority mortgages on the Vessels owned by the Subsidiaries and obligations under outstanding interest rate swap arrangements each as specificallyprovided in Schedule 2.4(b) to the Seller Disclosure Schedule (the "Assumed Loans and Swaps"), neither Purchaser nor any Subsidiary of Seller (whichbecomes a subsidiary of Purchaser at the Effective Time) nor any of Purchaser's Affiliates shall assume or be obligated to pay or perform any other Liabilitiesof Seller or any Subsidiary existing at or prior to the Effective Time, which excluded Liabilities shall include any pre-Effective Time liabilities under contractsor other arrangements with Affiliates or third parties (such unassumed Liabilities, the "Excluded Liabilities"). From and after the Effective Time, Seller shallassume, pay and perform (when due) all Excluded Liabilities, and Purchaser shall pay and perform (when due), or shall cause the Subsidiaries to pay andperform (when due) all Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. other Liabilities of or related to the Subsidiaries or the Vessels relating to the period after the Effective Time (the "Purchaser Assumed Liabilities"). Purchaseragrees to perform, or cause the Subsidiaries to perform, and be liable for, all post-Effective Time obligations under the Material Contracts (other than thoseContracts set forth on Schedule C hereto which are to be terminated).(c) For the avoidance of doubt, other than the Assumed Loans and Swaps, Seller shall remain liable for any Liability, claim, cost, expense orlitigation relating to and arising from (1) the ownership or operation of any Vessel prior to the Effective Time, (2) the conduct of the business of Seller and itsSubsidiaries prior to the Effective Time and (3) the termination of any Contracts set forth on Schedule C hereto, including the agreements between CentralMare or any other Affiliate of Seller, including the management agreements, and the Subsidiary.(d) Any amounts received by Purchaser or by Seller which represent payment for services, accounts receivable or accruals relating to both pre-Effective Time and post-Effective Time periods shall be apportioned and paid over by Seller to Purchaser or by Purchaser to Seller, as applicable, inaccordance with their relative rights thereto under this Section 2.4. Invoices or other demands for payment received by Purchaser or by Seller after theEffective Time which reflect both Excluded Liabilities and Purchaser Assumed Liabilities shall be apportioned and satisfied by Seller and Purchaser, asapplicable, in accordance with their respective obligations with respect thereto under this Section 2.4.(e) Within 45 days after the Closing Date, Seller will prepare and deliver to Purchaser a balance sheet, as of the Closing Date, for eachSubsidiary prepared in accordance with generally accepted accounting practices in the United States.ARTICLE IIIREPRESENTATIONS AND WARRANTIES OF PURCHASER Purchaser hereby represents and warrants to Seller as follows: SECTION 3.1. Incorporation. Purchaser is a corporation validly existing and in good standing under the laws of the Republic of theMarshall Islands, and has the power and authority to enter into, and perform all of its obligations under, this Agreement. This Agreement has been dulyand validly authorized, executed and delivered by Purchaser and constitutes a valid and binding obligation of Purchaser, enforceable against Purchaser inaccordance with its terms. SECTION 3.2 No Conflicts. The execution, delivery and performance by the Purchaser of this Agreement will not (with or without noticeor lapse of time, or both) (i) result in any violation of any provision of its articles of incorporation or bylaws, (ii) conflict with or constitute breach of, ordefault under, or give any person the right to terminate or accelerate any payment due under, or result in the creation or imposition of any lien, encumbrance,security interest, pledge, mortgage, charge or other claim against it or any of its assets, under any agreement, contract, charter, lease, loan agreement, license,indenture, mortgage, note commitment or other arrangement to which it is a party or by which any of its assets may be bound (including any materialContract), or (iii) result in any violation of any applicable law, Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. statute, rule or regulation or order, permit or authorization of any governmental authority or court. SECTION 3.3 Consents. No material consent, approval, license, permit, order or authorization of, or registration, declaration or filingwith, any U.S. federal, state, local or foreign governmental authority or any other person is required in connection with Purchaser's execution, delivery andperformance of this Agreement or its consummation of the transactions contemplated hereby. SECTION 3.4 Authorization. The execution, delivery and performance by Purchaser of this Agreement and the consummation byPurchaser of the transactions contemplated hereby are within Purchaser's corporate powers and have been duly authorized by all necessary corporate action onthe part of Purchaser. This Agreement constitutes a valid and binding agreement of Purchaser enforceable against Purchaser in accordance with its terms. SECTION 3.5 Investment Representation. Purchaser acknowledges that the Shares have not been registered under U.S. federal or statesecurities laws and are being sold in reliance upon an exemption therefrom. Purchaser is acquiring the Shares for its own account for investment purposesonly, and not with a view to the resale or distribution thereof. ARTICLE IVREPRESENTATIONS AND WARRANTIES OF SELLER Seller hereby represents and warrants to Purchaser as follows: SECTION 4.1 Incorporation. Seller is a corporation validly existing and in good standing under the laws of the Republic of the MarshallIslands, and has the power and authority to enter into, and perform all of its obligations under, this Agreement. Except for the Stockholder Approval, thisAgreement has been duly and validly authorized, executed and delivered by Seller and constitutes a valid and binding obligation of Seller, enforceable againstSeller in accordance with its terms. SECTION 4.2 No Conflicts. The execution, delivery and performance by Seller of this Agreement will not (with or without notice or lapseof time, or both) (i) result in any violation of any provision of the articles of incorporation or bylaws or other governing instruments of Seller or anySubsidiary, (ii) except for required consents set forth on Schedule 4.3 of the Seller Disclosure Schedules, conflict with or constitute a breach or default under,or give any person the right to terminate and accelerate any payment due under, or result in the creation or imposition of any Lien, encumbrance, securityinterest, pledge, mortgage, charge, other claim under, any agreement, charter, contract, lease, loan agreement, license, indenture, mortgage, note, commitmentor other arrangement, to which Seller or any Subsidiary is a party or by which any of its or their assets may be bound or (iii) result in any violation of anyapplicable law, statute, rule or regulation, order, permit or authorization of any governmental authority or court. SECTION 4.3 Consents. No material consent, approval, license, permit, order or authorization of, or registration, declaration or filingwith, any governmental authority or Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. any other person (including with respect to any Subsidiary) is required in connection with Seller's execution, delivery and performance of this Agreement or itsconsummation of the transactions contemplated hereby, other than those specifically set forth on Schedule 4.3 of the Seller Disclosure Schedules. SECTION 4.4 Title to Shares. Seller has, and will convey to Purchaser at the Closing, good and valid title to the Shares free and clearof any Liens, encumbrances or adverse claims of any kind, including any claims, Liens, pledges, options, stockholder agreements and voting agreements,other than the other than Liens securing the Assumed Loans and Swaps. The sale and delivery of the Shares being purchased hereunder are not subject to anypreemptive rights, rights of first refusal or other right or encumbrance in favor of or any other person. SECTION 4.5 Subsidiaries. Each Subsidiary has been duly incorporated and is validly existing in good standing under the laws of thejurisdiction of its incorporation and has the power and authority to conduct its business as it is now conducted. The Shares constitute all of the issued andoutstanding capital stock and other securities of the Subsidiaries. There are no outstanding options, warrants or other rights to acquire any capital stock orother securities of any Subsidiary. Schedule 4.5 of the Seller Disclosure Schedule lists each Subsidiary of the Seller, including its name, jurisdiction ofincorporation or formation, its authorized, issued and outstanding capital stock and other outstanding securities, and the holders thereof and the names of itsofficers and directors. SECTION 4.6 Authorization; Approvals. (a) The execution, delivery and performance by Seller of this Agreement and theconsummation by Seller of the transactions contemplated hereby are within Seller's corporate powers and have been duly authorized by all necessary corporateaction on the part of Seller other than the Stockholder Approval. This Agreement constitutes a valid and binding agreement of Seller enforceable against Sellerin accordance with its terms.(b) At a meeting duly called and held, the Seller's Board of Directors (the "Seller's Board") has (i) unanimously determined that this Agreementand the transactions contemplated hereby and the Additional Purchase Agreements and the transactions contemplated thereby are fair to and in the best interestsof Seller and the Seller's stockholders, (ii) unanimously approved and declared advisable this Agreement and the Additional Purchase Agreements and thetransactions contemplated hereby and thereby, (iii) unanimously recommended that the approval of this Agreement and the Additional Purchase Agreementsand the transactions contemplated hereby and thereby be submitted to the Seller Stockholder Meeting (as defined below), and (iv) unanimously adopted therecommendation by the Seller's Board for approval of this Agreement and the Additional Purchase Agreements and the transactions contemplated hereby andthereby by the stockholders of Seller (such recommendation, the "Recommendation") (subject to Section 5.7(b)), which resolutions have not beensubsequently rescinded, modified or amended in any respect.(c) Seller has taken all action required to be taken by it in order to exempt this Agreement and the Additional Purchase Agreements and thetransactions contemplated hereby and thereby from, and this Agreement, the Additional Purchase Agreements and such transactions are exempt from, therequirements of any "moratorium", "control share", "fair price", "affiliate transaction", Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. "business combination" or other anti-takeover laws and regulations of the Republic of the Marshall Islands (or other applicable jurisdiction) or any comparableprovisions contained in Seller's articles of incorporation (including Article L thereof) or bylaws.SECTION 4.7 Capitalization. The authorized capital of Seller consists of (i) 1,000,000,000 shares of Common Stock of which17,147,535 are outstanding and (ii) 20,00,000,000 shares of Preferred Stock, par value $0.01 per share, none of which are outstanding. There are nooutstanding options, rights, warrants or other commitments of Seller or of any of the Subsidiaries to issue any capital stock or other securities of Seller or anyof the Subsidiaries, and neither Seller nor any Subsidiary has any contingent or other obligation to purchase, redeem or otherwise acquire any of its capitalstock or other securities. The Common Stock of Seller is the only security of Seller whose holders having voting rights. SECTION 4.8 Vessels. (a) Section 4.8(a) of the Seller Disclosure Schedule contains a list of all vessels owned by the Subsidiaries (the"Vessels") including the name, registered owner, capacity (gross tonnage or deadweight tonnage, as specified therein), year built, classification society, officialnumber and flag state of each Vessel. Other than the Vessels, none of the Subsidiaries owns, leases or charters any vessels. Except as set forth in Section4.8(a) of the Seller Disclosure Schedule, each Vessel has been operated in compliance with all Maritime Guidelines and Laws, except where such failure to bein compliance has not had and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. Each of the Subsidiariesare qualified to own and operate the Vessels under applicable Laws, including the Laws of each Vessel's flag state, except where such failure to be qualifiedwould not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. Each Vessel has all national and international operatingand trading certificates and endorsements, each of which is valid, that are required for the operation of such Vessel in the trades and geographic areas in whichit is operated, except where such failure to be qualified would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.(b) Each Vessel is classed by any of Lloyd's Register of Shipping, American Bureau of Shipping, Det Norske Veritas, Korean Register or aclassification society which is a full member of the International Association of Classification Societies and is materially in class with all class and tradingcertificates valid through the date of this Agreement and, to the knowledge of Seller, (i) no event has occurred and no condition exists that would cause anysuch Vessel's class to be suspended or withdrawn, and (ii) each such Vessel is free of average damage affecting its class.(c) With respect to each of the Vessels, one of the Subsidiaries is the sole owner of such Vessel and has good title to such Vessel free and clearof all Liens other than Permitted Liens and those described in Seller's Annual Report on Form 20-F for the year ended December 31, 2012 (the "20-F"). Purchaser has, prior to execution of this Agreement, physically inspected each Vessel and accepted the condition thereof.SECTION 4.9 Assets of the Subsidiaries. (a) Each of the Subsidiaries has good and valid title to each of its assets, rights andproperties, including its Vessel, free and clear of any Liens, charges and encumbrances of any kind, except for Permitted Liens. Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. (b) The assets, rights and properties of the Subsidiaries, and their permits and authorizations with respect thereto, are all the assets, rights,properties, permits and authorizations required by it for the conduct of its businesses in all material respects as heretofore conducted and will providePurchaser with the ability to own and operate such assets and properties and to conduct such businesses in substantially the same manner as they have beenconducted heretofore.SECTION 4.10 Contracts.(a) Section 4.10 of the Seller Disclosure Schedule lists the following Contracts (each a "Material Contract") to which any of the Subsidiaries isa party or a Vessel is subject or to which Seller is a party in relation to a Subsidiary or a Vessel:(i) each Contract, indenture, credit agreement, loan agreement, security agreement, mortgage, guarantee, note or other evidence ofindebtedness, or other agreement relating to indebtedness in excess of $1,000,000, including all documents related to any sale/leaseback or otherfinancing arrangement; (ii) each Contract relating to the financing of any Vessel; (iii) each Contract pursuant to which a Vessel is leased or chartered by Seller or any of the Subsidiaries to or from another person,including all charters, contracts of affreightment and other employment arrangements; (iv) each material operating agreement, management agreement, crewing agreement, brokerage agreement and other services agreementwith respect to any Vessel; (v) each Contract, including any option, with respect to the purchase, sale chartering, leasing or financing of any Vessel; (vi) each Contract that grants any right of first refusal, right of first offer, purchase option or similar right or that limits or purports tolimit the ability of Seller or any of the Subsidiaries to own, operate, charter, lease, sell, transfer, pledge or otherwise dispose of any Vessel; (vii) each voting agreement relating to Seller or any of the Subsidiaries or registration rights agreement relating to any of theSubsidiaries. (b) Seller has heretofore made available to Purchaser true and complete copies of each of the Material Contracts (including any amendments,supplements or side letters with respect thereto) set forth in Section 4.10 of the Seller Disclosure Schedule. All Material Contracts are in full force andeffect. Each of the Material Contracts is a legal and valid obligation of, and enforceable in accordance with its terms against, the respective partiesthereto. Except as disclosed in the 20-F, neither Seller nor any of the Subsidiaries is in material violation or breach of or default under (or with notice or lapseof time, or both, would be in violation or breach of or default under) the terms of any such Material Contract. To the knowledge of Seller, Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. no other party to any Material Contract is in material breach of or in default under such Material Contract or advised Seller that it will not perform any of itsmaterial obligations under any such Material Contract. Neither Seller nor any of the Subsidiaries has received any notice of breach, default or termination ornon-renewal (or proposed breach, default, termination or non-renewal) with respect to any Material Contracts.SECTION 4.11 Litigation; Claims. (a) There is no arbitration, lawsuit, claim, investigation or proceeding (each, an "Action") pendingor, to the knowledge of Seller, threatened in writing against Seller or any of the Subsidiaries that (a) challenges or seeks to enjoin, alter, prevent or delay thetransactions contemplated hereby or (b) has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. Noofficer or director or any of the Subsidiaries or is a defendant in any Action commenced by any stockholder of Seller or any of the Subsidiaries with respect tothe performance of his duties as an officer or a director of Seller or any such Subsidiary under any applicable law, rule or regulation of anyjurisdiction. There is no unsatisfied judgment, penalty or award against Seller or any of the Subsidiaries. Neither Seller nor any of the Subsidiaries issubject to any orders or decrees of governmental authority, court or arbitral body that have had or would, individually or in the aggregate, reasonably beexpected to have a Material Adverse Effect. (b) There are no outstanding insurance claims with respect to any assets or business of any Subsidiary. To the knowledge of Seller, there areno other claims by or against any person with respect to the assets or business of any Subsidiary or any grounds therefor. SECTION 4.12 Certain Business Practices. None of the Subsidiaries nor any director, officer, agent or employee of any of theSubsidiaries has (a) used any funds for unlawful contributions, gifts, entertainment or other expenses relating to political activity or for the business of any ofthe Subsidiaries, (b) paid any bribe or kickback, illegal political contribution, payment from corporate funds which was incorrectly recorded on the booksand records of any of the Subsidiaries or made any unlawful payment from corporate funds to foreign or domestic government officials or employees or toforeign or domestic political parties or campaigns or violated any provision of the U.S. Foreign Corrupt Practices Act or the U.K. Bribery Act, or (c) made anyother unlawful payment. SECTION 4.13 Taxes. Seller and the Subsidiaries have filed all U.S. Federal, state, local and non-U.S. tax returns that are required to befiled and have paid all taxes (including any assessments, fines or penalties) shown by such returns or otherwise assessed, which are due and payable, exceptfor any such taxes, assessments, fines or penalties currently being contested in good faith and for which they have provided adequate reserves; and there is notax deficiency which has been or might reasonably be expected to be asserted or threatened against the Company or any of the Subsidiaries. SECTION 4.14 No Fees. No finder's, broker's, financial advisory or other fees or commissions are payable to any person by Seller or anySubsidiary in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby. Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. SECTION 4.15 No Other Representations or Warranties. Other than the representations and warranties expressly contained in thisArticle IV, Seller makes no other representations or warranties, express or implied, relating to the Subsidiaries, the Shares, the Vessels or the transactionscontemplated hereby, and any such other representation or warranty is hereby disclaimed. ARTICLE VCOVENANTS AND AGREEMENTSSECTION 5.1. Conduct of Business. Prior to the Closing (or the earlier termination of this Agreement), Seller agrees not to allow any ofthe Subsidiaries to (i) effect any change in its authorized capitalization, including any securities issuance, stock split, stock dividend, recapitalization,reorganization or reclassification; (ii) incur any material Liability outside the ordinary course of business; (iii) dispose of assets or subject any assets to anyLien, claim or encumbrance; (iv) declare or pay any dividend or make any distribution or redeem or repurchase any of its outstanding securities; (v) issueany options, warrants or other rights to acquire securities; (vi) enter into any Material Contract; (vii) make any capital expenditure in excess of $20,000without the prior written consent of Purchaser; (viii) conduct its business other than in the ordinary course consistent with past practice; or (ix) agree to do anyof the foregoing. SECTION 5.2. Stockholder Meeting; Regulatory Undertaking. (a) Seller has taken or shall take, as soon as reasonably practicablefollowing the date of this Agreement, all action necessary to duly call, give notice of, convene and hold a meeting of its stockholders (the "Seller StockholdersMeeting") for the sole purpose of seeking the Stockholder Approval. Seller shall (i) prepare and cause a proxy statement (the "Proxy Statement",) and otherappropriate solicitation materials, relating to the Stockholder Approval to be mailed to Seller's stockholders as promptly as practicable after the date of thisAgreement and (ii) subject to Section 5.7(b), solicit the Stockholder Approval. The Seller's Board shall recommend to the holders of shares of Common Stockof Seller that they give the Stockholder Approval and shall include such recommendation in the Proxy Statement, except to the extent that Seller's Board shallhave made a change in Recommendation as permitted by Section 5.7(b). Seller agrees that its obligations to hold the Seller Stockholders Meeting pursuant tothis Section 5.2(a) shall not be affected by the commencement, public proposal, public disclosure or communication to Seller of any Acquisition Proposal orby the making of any change in Recommendation. (b) Purchaser shall have the right to review and comment on the Proxy Statement and any proxy solicitation materials prior to theirdissemination and shall provide such information as Seller may reasonably request for inclusion in the Proxy Statement. (c) Prior to the date of this Agreement, Purchaser has received voting agreements, substantially in the form of Exhibit A to this Agreement,from the holders of the outstanding common stock of Seller specified on Schedule D hereto. (d) Subject to the terms and conditions of this Agreement, Seller shall use its reasonable best efforts to take, or cause to be taken, all actionsand to do, or cause to be done, all things necessary, proper or advisable under applicable law to consummate the transactions contemplated by this Agreement,including (i) preparing and filing as promptly as practicable Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. with any governmental authority or other third party all documentation to effect all necessary filings, notices, petitions, statements, registrations, submissionsof information, applications and other documents, and (ii) obtaining and maintaining all approvals, consents, registrations, permits, authorizations and otherconfirmations required to be obtained from any governmental authority or other third party that are necessary, proper or advisable to consummate thetransactions contemplated by this Agreement; provided that the obligations set forth in this sentence shall not be deemed to have been breached as a result ofactions by Seller or its Subsidiaries permitted by Section 5.7(b). SECTION 5.3. Indemnification. (a) Subject to the limitations set forth in this Section 5.3, Purchaser hereby agrees to indemnify andhold harmless Seller and Seller's Affiliates (collectively, the "Seller Indemnified Parties") from and against any losses, claims, damages, liabilities, costs andexpenses, including, without limitation, taxes, interest, penalties and attorneys' fees and expenses (collectively "Damages"), asserted against, resulting to,imposed upon or incurred by any Seller Indemnified Party, directly or indirectly, by reason of or resulting from (i) a breach by Purchaser of any covenant oragreement of Purchaser in this Agreement, including with respect to the Purchaser Assumed Liabilities or the Assumed Loans and Swaps, or (ii) anymisinterpretation or breach of a warranty of Purchaser in this Agreement. (b) Subject to the limitations set forth in this Section 5.3, Seller hereby agrees to indemnify and hold harmless Purchaser and Purchaser'sAffiliates (collectively, the "Purchaser Indemnified Parties") from and against any Damages asserted against, resulting to, imposed upon or incurred by anyPurchaser Indemnified Party, directly or indirectly, by reason of or resulting from (i) a breach or violation of any covenant or agreement of Seller in thisAgreement, including with respect to Excluded Liabilities, or (ii) any misrepresentation or breach of warranty of Seller in this Agreement. (c) If any investigation, action or other proceeding (each a "Proceeding") is initiated against any Seller Indemnified Party or PurchaserIndemnified Party (each for this purpose an "Indemnitee") by any third party and such Indemnitee intends to seek indemnification from the Seller or Purchaser(each for this purpose an "Indemnitor"), as applicable, under this Section 5.3 on account of its involvement in such Proceeding, then such Indemnitee willgive prompt notice to the applicable Indemnitor of such Proceeding; provided, that the failure to so notify such Indemnitor will not relieve such Indemnitor ofits obligations under this Section 5.3, but will reduce such obligations by the amount of damages or increased costs and expenses attributable to such failure togive notice. Upon receipt of such notice, such Indemnitor will diligently defend against such Proceeding on behalf of such Indemnitee at its own expense usingcounsel reasonably acceptable to such Indemnitee; provided, that if such Indemnitor fails or refuses to conduct such defense, or such Indemnitee has beenadvised by counsel that it may have defenses available to it which are different from or in addition to those available to such Indemnitor, or that its interests insuch Proceeding are adverse to such Indemnitor's interests, then such Indemnitee may defend against such Proceeding, with one counsel selected by Indemniteewho shall be reasonably acceptable to Indemnitor, at such Indemnitor's expense. Such Indemnitor or Indemnitee, as applicable, may participate in anyProceeding being defended against by the other at its own expense, and will not settle any Proceeding without the prior consent of the other, which consent willnot be unreasonably withheld; provided, that the consent of an Indemnitor is not required if such Indemnitor failed or refused to defend the Indemnitee in theProceeding that Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. is being settled. Such Indemnitor and Indemnitee will cooperate with each other in the conduct of any such Proceeding.(d) Claims for indemnification under Section 5.3(a)(ii) and 5.3(b)(ii) may only be asserted within the following time periods: (A) claims arising out of (i) any breach of Sections 4.1, 4.4, 4.5, 4.6(a), 4.9(a), 4.12, 4.13 and 4.14 (collectively, "Seller'sFundamental Warranties"), or (ii) any breach of Sections 3.1 and 3.4 (collectively, "Buyer's Fundamental Warranties"), and any claims arising out of fraud,may be asserted at any time; and (B) all other claims may be asserted for a period of 18 months after the Closing Date. (e) Notwithstanding any other provision hereof: (A) no Indemnitor will have any indemnification obligations under Section 5.3(a)(ii)(exclusive of a breach involving any ofPurchaser's Fundamental Warranties or fraud) or Section 5.3(b)(ii) (exclusive of a breach involving any of Seller's Fundamental Warranties or fraud) unlessand until the claims asserted against such Indemnitor exceed 1% of the Cash Consideration in the aggregate (the "Basket Amount"), in which case suchIndemnitor shall only be liable for the amount by which the aggregate of all such claims exceeds the Basket Amount; (B) Seller's aggregate indemnification obligations under Section 5.3(b) are capped at the Purchase Price; (C) Neither party will have any liability (for indemnification or otherwise) for any claims (i) for punitive, exemplary, or specialdamages of any nature, (ii) for indirect or consequential damages, including damages for lost profit, lost business opportunity, or damage to businessreputation, or (iii) that, at the time notice thereof is delivered to the other party, are contingent, speculative, or unquantified; (D) The amount of losses for which an Indemnitee may be entitled to seek indemnification under this Agreement will be reduced by theamount of any insurance proceeds or other payments from third parties received by such Indemnitee with respect to such loss and the amount of anydeduction, credit or other Tax benefit that such Indemnitee is entitled to with respect to such loss. If an Indemnitee, after having received any indemnificationpayment pursuant to this Agreement with respect to a loss, subsequently receives any insurance proceeds or other payment or recognizes any deduction, creditor other Tax benefit with respect to such loss, such Indemnitee will promptly refund and pay to the Indemnitor an amount equal to such insurance proceeds,payment, or other benefit; (E) Each Indemnitee will use its commercially reasonable efforts to mitigate any losses with respect to which it may be entitled to seekindemnification pursuant to this Agreement; and Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. (F) If an Indemnitee is indemnified for any losses pursuant to this Agreement with respect to any claim by a third party, then theIndemnitor will be subrogated to all rights and remedies of the Indemnitee against such third party, and the Indemnitee will cooperate with and assist theIndemnitor in asserting all such rights and remedies against such third party. (f) THE PARTIES HERETO AGREE THAT, EXCEPT IN THE CASE OF FRAUD, (X) THE INDEMNIFICATION PROVISIONSCONTAINED IN SECTION 5.3 CONSTITUTE THE SOLE AND EXCLUSIVE REMEDIES OF THE PARTIES HERETO FOR ANY BREACH OFANY REPRESENTATION, WARRANTY COVENANT OR OBLIGATION CONTAINED IN THIS AGREEMENT, AND (Y) TO THE FULLESTEXTENT PERMITTED BY LAW, ALL OTHER RIGHTS AND REMEDIES OF THE PARTIES ARISING UNDER OR IN CONNECTION WITH THISAGREEMENT ARE HEREBY WAIVED AND RELEASED; PROVIDED THAT NOTHING HEREIN SHALL LIMIT OR IMPAIR A PARTY'S RIGHTTO OBTAIN SPECIFIC PERFORMANCE OR OTHER INJUNCTIVE RELIEF WITH RESPECT TO ANY SUCH BREACH OF ANY SUCHREPRESENTATION, WARRANTY, COVENANT OR OBLIGATION. (g) Any indemnification payments under this Section 5.3 will be treated, for tax purposes, as adjustments to the Purchase Price. SECTION 5.4. Release of Guarantees. Purchaser agrees to use its commercially reasonable best efforts to cause the Bank and the SwapCounterparties to release in full, contingent upon and effective as of the Closing of this Agreement, all Liabilities, guarantees and other obligations of Seller andits Affiliates (other than the Subsidiaries) with respect to the Assumed Loans and Swaps (including, without limitation, by means of providing substituteguarantees thereof from Purchaser). SECTION 5.5. Public Announcements. Seller and Purchaser shall consult with each other before issuing any press release or makingany other public statement with respect to this Agreement or the transactions contemplated hereby and, except as may be required by applicable laws or anylisting agreement with or rule of any securities exchange, neither Seller or Purchaser shall issue any such press release or make any such public statementwithout the consent of the other party. SECTION 5.6. Notifications. Each of Seller and Purchaser shall promptly notify the other of: (a) any notice or other communication from any person alleging that the consent of such person is or may be required in connection with thetransactions contemplated by this Agreement; (b) any notice or other communication from any governmental authority in connection with the transactions contemplated by this Agreement; (c) any actions, suits, claims, investigations or proceedings commenced or, to its knowledge, threatened against, relating to or involving orotherwise affecting Seller or any of its Subsidiaries or Purchaser, as the case may be, that, if pending on the date of Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. this Agreement, would have been required to have been disclosed pursuant to any Section of this Agreement; (d) any inaccuracy of any representation or warranty contained in this Agreement at any time during the term hereof that could reasonably beexpected to cause any of the conditions set forth in Article VI not to be satisfied; and (e) any failure of that party to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it hereunder. SECTION 5.7. No Solicitation. (a) Subject to Section 5.7(b), after the date hereof and prior to the earlier of the termination of thisAgreement pursuant to Article VII and the Effective Time, Seller and the Subsidiaries shall not, directly or indirectly, (i) solicit, initiate or knowingly take anyaction to facilitate or encourage the submission of any Acquisition Proposal, (ii) enter into or participate in any discussions or negotiations with, furnish anyinformation relating to Seller or any of the Subsidiaries or afford access to the business, properties, assets, books or records of Seller or any of theSubsidiaries to any third party with respect to inquiries regarding, or the making or, an Acquisition Proposal, (iii) fail to make, withdraw or modify theRecommendation of Seller's Board that stockholders vote in favor of Stockholder Approval, (iv) grant any waiver or release under any standstill or similaragreement with respect to any class of equity securities of Seller or any of its Subsidiaries, or (v) approve, recommend or enter into (or publicly propose to doany of the foregoing) any agreement in principle, letter of intent, merger agreement, acquisition agreement or similar instrument relating to an AcquisitionProposal. For purposes hereof, "Acquisition Proposal" means any offer, proposal or indication of interest by a third party relating to any transaction or seriesof transactions involving (A) any acquisition or purchase, directly or indirectly, of 15% or more of the consolidated assets of Seller and/or any of theSubsidiaries, (B) any tender offer or exchange offer that, if consummated, would result in a third party beneficially owning 15% or more of the votingsecurities of Seller, or (C) a merger, consolidation, share exchange, recapitalization or similar transaction involving Seller or any of the Subsidiaries. (b) Notwithstanding the foregoing:(i) Prior to the Seller Stockholder Meeting, Seller, directly or indirectly through its representatives, may (A) engage in negotiations ordiscussions with any third party that has made (and not withdrawn) after the date of this Agreement a bona fide, written Acquisition Proposal that(x) did not result from a breach or violation of the provisions of Section 5.7(a), and (y) the Seller's Board reasonably believes in good faith, afterconsulting with its outside legal and financial advisors, would reasonably be expected to lead to a Superior Proposal, and (B) thereafter furnish tosuch third party or its representatives or its financing sources non-public information relating to Seller or any of the Subsidiaries pursuant to aconfidentiality agreement (a copy of which shall be provided for informational purposes only to Purchaser) with such third party with terms no lessfavorable to Seller than those contained in Seller's confidentiality agreement with Purchaser and containing additional provisions that expresslypermit Seller to comply with the terms of this Section 5.7 if, in the case of either clause (A) or (B), the Seller's Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Board determines in good faith, after consultation with outside legal counsel, that the failure to take such action is reasonably likely to result in abreach of its fiduciary duties under applicable law and Seller shall have provided Purchaser two (2) business days notice of its intention to take anyaction discussed in clause (A) or (B); provided that all such information provided or made available to such third party (to the extent that suchinformation has not been previously provided or made available to Purchaser) is provided or made available to Purchaser prior to or substantiallyconcurrently with the time it is provided or made available to such third party.(ii) Prior to the Seller Stockholder Meeting, Seller may, following receipt of and on account of a Superior Proposal, terminate thisAgreement to enter into a definitive agreement with respect to, a Superior Proposal, or the Seller's Board may change its Recommendation inconnection with such Superior Proposal, if such Superior Proposal did not result from a breach or violation of the provisions of Section 5.7 and theSeller's Board reasonably determines in good faith, after consultation with outside legal and financial advisors, that in light of such SuperiorProposal, the failure of the Seller's Board to take such action is reasonably likely to result in a breach of its fiduciary duties under applicable law;provided, however, Seller shall not be entitled to terminate this Agreement or change the Seller's Board's Recommendation in connection with aSuperior Proposal unless (A) Seller promptly notifies Purchaser, in writing, at least five (5) business days (the "Notice Period") before making sucha change of Seller's Board Recommendation or terminating this Agreement to enter into (or causing a Subsidiary to enter into) a definitive agreementwith respect to a Superior Proposal, of its intention to take such action with respect to such Superior Proposal, which notice shall state expressly thatSeller has received an Acquisition Proposal that the Seller's Board has determined to be a Superior Proposal and that the Seller's Board intends tochange its Recommendation and/or Seller intends to terminate this Agreement to enter into a definitive agreement with respect to such SuperiorProposal; (B) Seller attaches to such notice the most current version of the proposed agreement and the identity of the third party making suchSuperior Proposal; (C) during the Notice Period, if requested by Purchaser, Seller has, and has directed its representatives to, engaged in negotiationswith Purchaser in good faith to amend this Agreement or increase the Purchase Price in such a manner that such Superior Proposal ceases toconstitute a Superior Proposal; and (D) following the Notice Period, the Seller's Board shall have determined in good faith, taking into account anychanges to this Agreement or increase to the Purchase Price made or proposed in writing by Purchaser, that such Superior Proposal continues toconstitute a Superior Proposal; provided, however that with respect to any applicable Superior Proposal, any amendment to the financial terms orany other material amendment to a term of such Superior Proposal shall require a new written notice by Seller and a new Notice Period, and no suchtermination of this Agreement by Seller or change in the Seller's Board's Recommendation in connection with such Superior Proposal may be madeduring any Notice Period.(c) Seller and the Seller's Board shall not take any of the actions referred to in Section 5.7 (b) unless Seller shall have first complied with theapplicable requirements of this Section 5.7 (c). Seller shall notify Purchaser promptly (but in no event later than 24 hours) after receipt by Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Seller (or any of its representatives) of any Acquisition Proposal, including the material terms and conditions thereof and the identity of the person makingsuch Acquisition Proposal and its proposed financing sources, and shall keep Purchaser reasonably informed on a prompt basis (but in any event no laterthan 24 hours) as to the status (including changes or proposed changes to the material terms) of such Acquisition Proposal. Seller shall also notify Purchaserpromptly (but in no event later than 24 hours) after receipt by Seller of any request for non-public information relating to Seller or any of the Subsidiaries orfor access to the business, properties, assets, books or records of Seller or any of the Subsidiaries by any third party that has informed Seller that it isconsidering making, or has made, an Acquisition Proposal.(d) Definition of Superior Proposal. For purposes of this Agreement, "Superior Proposal" means a bona fide, unsolicited written AcquisitionProposal (provided that, for the purposes of this definition, references to "15%" in the definition of Acquisition Proposal shall be deemed replaced withreferences to "100%") that (i) is not subject to any financing condition and for which financing has been fully committed or is on hand (with respect to whichPurchaser has received written evidence of such person's ability to fully finance its Acquisition Proposal), (ii) the Seller's Board determines in good faith, afterconsidering the advice of its outside counsel and its financial advisor, is reasonably likely to be consummated in accordance with its terms, taking intoaccount all aspects of the proposal and the identity of the person making the Acquisition Proposal, and (iii) the Seller's Board determines in good faith, afterconsidering the advice of its financial advisor, would result in a transaction more favorable, from a financial point of view to Seller's stockholders than thetransactions contemplated by this Agreement and the Additional Purchase Agreements (taken as a whole), after taking into account any amendment to thisAgreement or increase the Purchase Price proposed by Purchaser.ARTICLE VICLOSING CONDITIONSSECTION 6.1. (a) The obligation of Purchaser to purchase the Shares from Seller is subject to the satisfaction, or waiver by Purchaser, ofthe following conditions: (i) The representations and warranties of Seller set forth herein shall be true and correct in all material respects on and as of theClosing Date as if made on and as of such date. Seller shall have timely performed all of its obligations hereunder to be performed by it on or prior tosuch date. Seller shall at Closing have delivered to Purchaser a certificate to the foregoing effect and to the effect that all other conditions to theClosing to be satisfied by Seller have been satisfied;(ii) The Stockholder Approval shall have been obtained and all other necessary approvals, authorizations, consents or waivers fromany governmental authority shall have been obtained on terms reasonably acceptable to the Purchaser;(iii) Any required consent with respect to the Assumed Loans and Swaps shall have been obtained on terms reasonably acceptable toPurchaser (Purchaser having, prior to execution of this Agreement, seen the consents or proposed consent terms of such parties and determined themto be satisfactory) and satisfactory evidence thereof shall have been provided to Purchaser, including definitive documentation providing for Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. assumption by Purchaser of the Assumed Loans and Swaps as of the Closing Date;(iv) Any required consent of the Charterers under existing charters for the Vessels shall have been obtained on terms reasonablyacceptable to Purchaser (Purchaser having, prior to execution of this Agreement, seen the consents or proposed consent terms of such parties anddetermined them to be satisfactory) and satisfactory evidence thereof shall have been provided to Purchaser;(v) Seller shall at Closing have tendered stock certificates evidencing the Shares, duly endorsed in blank and free and clear of anyLiens other than other than Liens securing the Assumed Loans and Swaps;(vi) The officers and directors of each of the Subsidiaries shall have tendered their resignations;(vii) Each of the Contracts listed on Schedule C hereto shall have been terminated without cost to Purchaser or any of the Subsidiaries;(viii) Seller shall have taken all actions necessary to assume, and shall have assumed, all Excluded Liabilities from the Subsidiaries;(ix) During the period from the date of this Agreement until the Closing, no event has occurred that has had, or could reasonably beexpected to have, a Material Adverse Effect on the Subsidiaries, taken as a whole; or(x) There shall be pending no litigation against any of Seller, Purchaser or any Subsidiary seeking to delay or enjoin the transactionscontemplated hereby or by the Additional Purchase Agreements or which, if decided adversely to Seller or any Subsidiary, would have a MaterialAdverse Effect on any of them; and(xi) No default by the Seller or breach of any representation, warranty, covenant or agreement by the Seller shall exist under anAdditional Purchase Agreement nor shall any Additional Purchase Agreement have been terminated.(b) The obligation of Seller to sell the Shares to Purchaser is subject to the satisfaction, or waiver by Seller, of the following conditions:(i) The representations and warranties of Purchaser set forth herein shall be true and correct in all material respects on and as of theClosing Date as if made on and as of such date. Purchaser shall have timely performed all of its obligations hereunder to be performed by it on orprior to such date. Purchaser shall have delivered to Seller a certificate to the foregoing effect and to the effect that all other conditions to the Closingto be satisfied by Purchaser have been satisfied;(ii) The Stockholder Approval shall have been obtained and all necessary approvals, authorizations, consents or waivers from anygovernmental authority shall Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. have been obtained;(iii) Purchaser shall at Closing have tendered to Seller payment in full of the Cash Consideration for the Shares;(iv) Seller shall have received evidence reasonably satisfactory to Seller that the Bank and the Swap Counterparties have released infull all Liabilities, guarantees and other obligations of Seller and its Affiliates (other than the Subsidiaries) with respect to the Assumed Loans andSwaps; and(v) There shall be pending no litigation against any of Seller, Purchaser or any Subsidiary seeking to delay or enjoin the transactionscontemplated hereby.ARTICLE VIITERMINATION AND AMENDMENT SECTION 7.1. Termination. This Agreement may be terminated at any time: (a) by mutual written consent of Purchaser and Seller;(b) by either Purchaser or Seller if (i) there has been a breach of any representation, warranty, covenant or agreement on the part of the otherparty set forth in this Agreement which breach has not been cured within five business days following receipt by the breaching party of notice of such breachand which breach is reasonably likely to have a Material Adverse Effect, or (ii) if any permanent injunction or other order of a court or other competentauthority preventing the consummation of the transactions contemplated hereby shall have become final and non-appealable;(c) by Seller, prior to receipt of the Stockholder Approval, in accordance with Section 5.7(b), provided that Seller pays to Purchaser theTermination Fee amount due pursuant to Section 7.5(b) in accordance with the terms specified therein, and immediately following termination of thisAgreement Seller (or its Subsidiaries) enters into a definitive agreement with respect to a Superior Proposal;(d) by Purchaser, if an Additional Purchase Agreement has been terminated and if Seller was obligated to pay Purchaser a termination fee as aresult of such termination under such terminated Additional Purchase Agreement, Seller shall pay to Purchaser the Termination Fee amount due pursuant toSection 7.5(b) hereof in accordance with the terms specified therein upon termination of this Agreement pursuant to this Section 7.1(d);(e) by either Purchaser or Seller if, for any reason, the Closing shall not have occurred on or before November 30, 2013; provided, however,that the right to terminate this Agreement under this Section 7.1(d) shall not be available to any party whose failure to fulfill any obligation under thisAgreement has been the cause of, or resulted in, the failure of the Closing to have occurred on or prior to such date; or(f) by either Purchaser or Seller if any required approval of the stockholders of Seller Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. of this Agreement and the transactions contemplated hereby shall not have obtained by reason of the failure to obtain the required affirmative vote at a dulyheld meeting of stockholders or at any adjournment thereof.SECTION 7.2. Effect of Termination. In the event of termination of this Agreement by either Seller or Purchaser as provided in Section7.1, this Agreement shall forthwith become void and there shall be no liability or obligation on the part of Purchaser or Seller or their respective officers ordirectors except (y) with respect to Sections 4.14, 7.5 and this Section 7.2 and (z) to the extent that such termination results from the willful breach by a partyhereto of any of its representations, warranties, covenants or agreements set forth in this Agreement. SECTION 7.3. Amendment. This Agreement may be amended by the parties hereto at any time before or after any required approval ofthis Agreement and the transactions contemplated hereby by the stockholders of Seller, but, after any such approval, no amendment shall be made which bylaw requires any further approval by such stockholders without such further approval. This Agreement may not be amended except by an instrument inwriting signed on behalf of each of the parties hereto. SECTION 7.4. Extension; Waiver. Any party may: (a) extend the time for the performance of any of the obligations or other acts of theother party hereto, (b) waive any inaccuracies in the representations and warranties of the other party contained herein or in any document delivered pursuanthereto and (c) waive compliance by the other party with any of the agreements, covenants or conditions contained herein. Any agreement on the part of a partyhereto to any such extension or waiver shall be valid only if set forth in a written instrument signed on behalf of such party, and no such extension or waivershall be construed as an extension or waiver of any other obligation, inaccuracy or compliance with any other provision. SECTION 7.5. Fees and Expenses. (a) Except as otherwise expressly provided herein, all costs and expenses incurred in connectionwith this Agreement and the transactions contemplated hereby shall be paid by the party incurring such expense; provided, however, that Purchaser agrees topay up to $25,000 of legal fees and expenses incurred in connection with the preparation, negotiation and execution of definitive documentation providing forthe assumption by Purchaser of the Assumed Loans and Swaps. (b) If this Agreement is terminated by Seller pursuant to Section 7.1(c) or, if applicable, Section 7.1(d), then Seller shall pay to Purchaser, inimmediately available funds, the Termination Fee at the time of such termination. "Termination Fee" means $666,667. Purchaser agrees that, upon anytermination of the Agreement under circumstances where the Termination Fee is payable by Seller and such Termination Fee is paid in full, Purchaser shall beprecluded from any other remedy against Seller, at law in equity or otherwise, and Purchaser shall not seek any other recovery, judgment or damages of anykind. Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. SECTION 7.6. Further Assurances. At any time and from time to time both before and after the Closing, the parties agree to cooperatewith each other, to execute and deliver such other documents, instruments of transfer or assignment, files, books and records and do all such further acts andthings as may be necessary or desirable to carry out the transactions contemplated hereunder. ARTICLE VIIIMISCELLANEOUS SECTION 8.1. Governing Law and Choice of Forum. This Agreement shall be governed by and construed under the law of the State ofNew York without regard to its choice of law provisions. Any proceeding commenced by either party hereto seeking to enforce any provision of, or arising outof or relating to this Agreement or the transactions contemplated hereby shall be brought in New York state or federal court located in New York County in theState of New York, and each of the parties hereby irrevocably consents to the exclusive jurisdiction of such courts in any such proceeding and irrevocablyvaries, to the fullest extent permitted by law, any objection it may now or hereafter have to the laying of the venue of such proceeding in any such court of thatany such proceeding brought in any such court has been brought in an inconvenient forum. SECTION 8.2. Assignment. Neither this Agreement nor any right, remedy, obligation or liability arising hereunder shall be assignable byeither Seller or Purchaser without the other's prior written consent. SECTION 8.3. Notices. All notices, requests, claims, demands and other communications required or permitted to be given hereunderwill be in writing and will be given when delivered by hand or sent by registered or certified mail (postage prepaid, return receipt requested) or by overnightcourier (providing proof of delivery) or by telecopy (providing confirmation of transmission). All such notices, requests, claims, demands or othercommunications will be addressed as follows: (a) if to Purchaser, to: AMCI Products Limitedc/o AMCI Poseidon475 Steamboat Road, 2nd FloorGreenwich, CT 06830Telephone No.: +1 (203) 531-3820Fax No.: +1 203-625-9231Attention: Chief Executive Officer With a copy to: Morgan, Lewis & Bockius LLP101 Park AvenueNew York, New York 10178Telephone No.: (212) 309-6050 Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Fax No.: (212) 309-6001Attention: Stephen P. Farrell(b) If to Seller, to: Top Ships Inc.1 Vass Sofias, Maroussi 15124GreeceTelephone No.: 011-30-210-8128182Fax No.: 011-30-210-6141272Attention: Alexandros Tsirikos, Chief Financial Officer With a copy to: Seward & Kissel LLPOne Battery Park PlazaNew York, New York 10004Telephone No.: (212) 574-1223Fax No.: (212) 480-8421Attention: Gary J. Wolfe or such other address as Seller or Purchaser shall have specified to the other party in writing in accordance with Section 8.3. SECTION 8.4. Binding Effect. The provisions of this Agreement shall be binding upon and accrue to the benefit of the parties hereto andtheir respective heirs, legal representatives, successors and permitted assigns. SECTION 8.5. Section and Other Headings; Interpretation. The section and other headings herein are for convenience of referenceonly, do not constitute part of this Agreement and shall not be deemed to limit or otherwise affect any of the provisions hereof. SECTION 8.6. Counterparts. This Agreement may be executed in counterparts, each of which when so executed and delivered shall bedeemed to be an original and all of which together shall be deemed to be one and the same agreement. SECTION 8.7. Entire Agreement; Waiver, Amendment. This Agreement contains the entire agreement of the parties with respect to thesubject matter hereof and supersedes any and all prior agreements, understandings or undertakings, written or oral. Neither this Agreement nor any provisionhereof shall be waived, amended, modified, changed, discharged or terminated except by an instrument in writing, signed by the party against whom anywaiver, amendment, modification, change, discharge or termination is sought. [Signature page follows] Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the date first above written. TOPS SHIPS INC. By:/s/ Alexandros Tsirikos Name:Alexandros Tsirikos Title:Attorney-in-fact AMCI PRODUCTS LIMITED By:/s/ Stamatis Molaris Name:Stamatis Molaris Title:Director Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Schedule A1. Jeke Shipping Company Limited (owner of the Evian)2. Warhol Shipping Company Limited (owner of the Miss Marilena)3. Indiana R Shipping Company Limited (owner of the UACC Shams)4. Britto Shipping Company Limited (owner of the Britto) Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Schedule BCash ConsiderationAn amount equal to $103,000,000 minus (a) the outstanding debt under the loan agreements of the Subsidiaries or of the Seller in relation to the Subsidiaries orthe Vessels as of the Closing Date, plus (b) the retention cash under each such loan agreement as of the Closing Date, minus (c) any obligations under theswap arrangements relating to the Subsidiaries or the Vessels as of the date five days before the Closing Date, as evidenced by HSH valuation to be providedfive days before Closing Date (the sum of (a), (b) and (c), the "Net Assumed Loan and Swap Amount"). Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Schedule CContracts to be Terminated-Management Agreements between the Subsidiaries and Central Mare-All other Related Party Agreements, other than the ship brokerage agreements with Central Shipbroking Limited set forth on Schedule 4.10 to the SellerDisclosure Schedules with respect to the existing bareboat charters for the Vessels Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Schedule DSeller Shareholder Voting AgreementsSovereign Holdings Inc.[Evangelos Pistiolis] Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Exhibit A[Form of Voting Agreement]VOTING AGREEMENT September ___, 2013AMCI Products Limitedc/o AMCI Poseidon475 Steamboat Road, 2nd FloorGreenwich, CT 06830Re: Voting of Common Stock of Top Ships Inc.Gentlemen:In order to induce AMCI Products Limited ("Purchaser") to execute and deliver those certain Stock Purchase Agreements, each dated as of September5, 2013 (the "Stock Purchase Agreements"), by and between Top Ships Inc. ("Seller") and Purchaser pursuant to which Seller is selling all of the outstandingCommon Stock and other securities of certain of its subsidiaries to Purchaser, the undersigned is entering into this agreement with Purchaser. The undersigned beneficially owns ______ shares of Common Stock of Seller. The undersigned hereby revokes any and all proxies and votingagreements it has heretofore given or entered into with respect to such shares of Common Stock and other securities. Until such time as any of the Stock Purchase Agreements are terminated in accordance with their terms (at which time this voting agreement shallalso terminate), the undersigned hereby agrees to vote, or cause to be voted, at each meeting of stockholders of Seller (or pursuant to any written consent of thestockholders of Seller) at which such stockholders consider a proposal to approve any of the Stock Purchase Agreements and the transactions contemplatedthereby, all shares of Common Stock beneficially owned by it, in favor of such proposal and against any other proposal which might delay or inhibit orconflict with the transactions contemplated by the Stock Purchase Agreements. Prior to the earlier of the completion of the Closing under each of the Stock Purchase Agreements and the termination of each of the Stock PurchaseAgreements in accordance with their respective terms, the undersigned will not sell or dispose of any shares of Common Stock it beneficially owns or engagein any other transaction which would impair its ability to fulfill its obligations hereunder. The voting agreement contained herein may not be revoked, except by an amendment, modification or termination signed by each of the partieshereto. Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. The invalidity or unenforceability of any provision of this Voting Agreement shall not affect the validity or enforceability of any other provision ofthis Voting Agreement. In addition to any and all other remedies that may be available at law in the event of any breach of this Voting Agreement, each partyhereto shall be entitled to specific performance of the agreements and obligations hereunder of the parties hereto and to such other injunctive or other equitablerelief as may be granted by a court of competent jurisdiction. This Voting Agreement shall be governed by and construed in accordance with the laws of the Republic of the Marshall Islands. This Voting Agreement may be signed in counterparts, each of which shall be an original and all of which together shall constitute one and the sameinstrument. * * *IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written. [Stockholder] By: Name: Title: ACCEPTED:AMCI Products Limited By: Name:Title:Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Exhibit 4.20 EXECUTION VERSION STOCK PURCHASE AGREEMENT THIS STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of September 5, 2013, is entered into by and between TopShips Inc., a Marshall Islands corporation ("Seller"), and AMCI Products Limited, a Marshall Islands corporation ("Purchaser"). WHEREAS, Seller desires to sell to Purchaser, and Purchaser desires to purchase from Seller, all of the issued and outstanding capitalstock of certain subsidiaries of Seller; NOW, THEREFORE, in consideration of the premises and mutual covenants and obligations hereinafter set forth and other good andvaluable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller and Purchaser intending to be legally bound, hereby agree asfollows: ARTICLE IDEFINITIONS The following capitalized terms used in this Agreement shall have the following respective meanings: "Additional Purchase Agreements" means the separate Stock Purchase Agreements, of even date herewith, between Purchaser and Sellerwith respect to the shares of Jeke Shipping Company Limited, Warhol Shipping Company Limited, Indiana R Shipping Company Limited and BrittoShipping Company Limited and of Lichtenstein Shipping Company Limited, respectively. "Affiliate" means a person that directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under commoncontrol with, another person. "Bank" means DVB Bank America N.V. "Books and Records" means minutes books, stock books, stock ledgers, books of account, manuals, general, financial, warranty andshipping records, invoices, members, customer and supplier lists, correspondence, engineering, maintenance and operating records, advertising andpromotional materials, credit records of customers and other documents, records and files, in each case related to the business of the Subsidiaries, excludingfinancial and tax books, records and files (or copies thereof) necessary for Seller to comply with its financial reporting and tax obligations. "Cash Consideration" means an amount as specified on Schedule B hereto. "Charterers" means Daelim Corporation."Contract" means any agreement, arrangement, contract, commitment, understanding, letter of intent, term sheet or other instrument,whether written or oral, together with each amendment, supplement or side letter relating thereto. Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. "Control" including the terms "controlling," "controlled by" and "under common control with," means the possession, directly orindirectly, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting shares, by contractor otherwise. "Liability" means all indebtedness, obligations and other liabilities and contingencies of a person, whether absolute, accrued, contingent,fixed or otherwise, or whether due or to become due, including, without limitation, intercompany indebtedness, obligations and other intercompany liabilitiesand contingencies and suits, claims or litigation. "Lien" means, with respect to any property or asset (including the Shares), any lien (statutory or otherwise), mortgage, pledge, charge,security interest, hypothecation, community property interest, equitable interest, servitude, option, right (including rights of first refusal), restriction(including restrictions on voting, transfer or other attribute of ownership), lease, license, other rights of occupancy, adverse claim, reversion, reverter,preferential arrangement or any other encumbrance in respect of such property or asset. "Material Adverse Effect" means, with respect to Seller, a Subsidiary or Purchaser, any fact, change, effect, event or occurrence that (A)has, or would reasonably be expected to have, individually or in the aggregate, a material adverse effect on the assets (including the Vessels), Liabilities,business, financial condition or results of operations of Seller, such Subsidiary or Purchaser, as the case may be, or (B) would prevent or materially delaySeller or Purchaser, as the case may be, from performing its obligations under this Agreement in any material respect; provided, however, that a MaterialAdverse Effect will not be deemed to result from or arise out of (a) any change in general economic conditions in any countries in which Seller, a Subsidiary orPurchaser operate which is not unique to, and does not disproportionately impact, Seller, a Subsidiary or Purchaser, as the case may be, (b) any change orevent generally affecting companies operating in the industries or markets in which Seller, the Subsidiaries or Purchaser operates which is not unique to, anddoes not disproportionately impact, Seller, a Subsidiary or Purchaser, as the case may be, (c) any change in accounting requirements or in any law applicableto Seller, a Subsidiary or Purchaser, including the proposal or adoption of any new law or change in the interpretation or enforcement of any existing law, or(d) any change resulting from the execution of this Agreement or the consummation of any of the transactions contemplated hereby, including any changeresulting from or arising out of any announcement relating to this Agreement or the transactions contemplated hereby. "Net Assumed Loan Amount" has the meaning specified on Schedule B hereto. "Permitted Liens" means (i) Liens securing the Assumed Loans, (ii) Liens for taxes that are not yet due and payable or that are beingcontested in good faith by appropriate proceedings, (iii) statutory Liens of landlords and workers', carriers' and mechanics' or other like Liens incurred in theordinary course of business consistent with past practices for amounts that are not yet due and payable or that are being contested in good faith, (iv) othermaritime liens, charges and encumbrances incidental to the conduct of the business of a Subsidiary or the ownership and operation of a Subsidiary's Vesselwhich do not in the aggregate materially detract from the value of such Subsidiary's Vessel or materially impair the use thereof in the operation of its business. 2Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. "Purchase Price" means (a) the Cash Consideration and (b) the Net Assumed Loan Amount."Seller Disclosure Schedule" means the Disclosure Schedule to this Agreement of Seller, dated the date hereof. "Shares" means all of the issued and outstanding capital stock, and all outstanding options, rights and warrants to purchase securities,ofeach of the Subsidiaries to be sold by Seller and purchased by Purchaser in accordance with the terms hereof. "Stockholder Approval" means the approval by the stockholders of Seller of this Agreement and the Additional Purchase Agreements andthe transactions contemplated hereby and thereby. "Subsidiary" means each of the corporations listed on Schedule A hereto. "Vessel" means the Hongbo, which is owned by the Subsidiary as reflected on Schedule A hereto. ARTICLE IIPURCHASE AND SALE OF SHARES SECTION 2.1. Purchase and Sale of the Shares. Upon the terms and subject to the conditions set forth in this Agreement, at theClosing, Seller will sell, transfer and deliver, and Purchaser will purchase from Seller, the Shares (free and clear of all Liens other than Liens securing theAssumed Loans) for the Purchase Price. Such payment of the Cash Consideration shall be paid in accordance with Section 2.3(a). SECTION 2.2. Closing. The consummation of the transactions contemplated by this Agreement (the "Closing") shall take place at theoffices of Top Ships, Vass Sofias, Maroussi, Greece, at 10:00 a.m. (local time) on a date to be specified by the parties which shall be no later than fifteen (15)business days after satisfaction (or waiver as provided herein) of the conditions set forth in Article VI (other than those conditions that by their nature will besatisfied at the Closing), unless another time, date and/or place is agreed to in writing by the parties. The date upon which the Closing occurs is hereinreferred to as the "Closing Date." The Closing will be deemed effective as of 11:59 p.m. on the Closing Date (the "Effective Time"). By way of example, ifthe Stockholder Approval is obtained on September 25, 2013 and all other conditions are then satisfied, the Closing shall (unless otherwise agreed by theparties) take place no later than on October 16, 2013. SECTION 2.3. Transactions to be Effected at the Closing. (a) At the Closing, Purchaser will:(i) pay to Seller, by transfer of immediately available funds in accordance with instructions to be provided by Seller, the CashConsideration; 3Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. (ii) all copies of definitive documentation providing for assumption by Purchaser of the Assumed Loans; and(iii) deliver to Seller all other documents, instruments or certificates required to be delivered by Purchaser at or prior to the Closingpursuant to this Agreement (including Section 6.1(b) hereof).(b) At the Closing, Seller will deliver to Purchaser:(i) a certificate or certificates representing the Shares duly endorsed or accompanied by stock powers duly endorsed in blank andwith any required stock transfer tax stamps affixed or with evidence of payment of any stamp duty or any other applicable tax;(ii) all other documents and instruments necessary to vest in Purchaser all of Seller's right, title and interest in and to the Shares, freeand clear of all Liens other than Liens securing the Assumed Loans) ;(iii) all copies of the consents, approvals and notices obtained or provided to or from the Bank and the Charterers, as the case may be,in form and substance satisfactory to Purchaser (Purchaser having, prior to execution of this Agreement, seen the consents or proposed consent termsof such Charterers and determined them to be satisfactory), including definitive documentation providing for assumption by Purchaser of theAssumed Loans as of the Closing Date;(iv) evidence of (A) Seller's assumption of the Excluded Liabilities, (B) the termination of the Contracts set forth on Schedule C,including any agreements between the Subsidiaries, on the one hand, and Seller or any Affiliate of Seller on the other hand and (C) the cancellation ofany amounts or obligations owing by the Subsidiaries to Seller or any Affiliate of Seller; 4Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. (v) the Books and Records;(vi) the resignations, effective as of the Closing, described in Section 6.1(a)(vi);(vii) a copy of (A) the certificate of incorporation, as amended (or similar incorporation or formation documents), of each Subsidiary,certified by the Registrar of Corporations (or comparable authority) of the jurisdiction in which each such entity is incorporated or organized, as of adate not earlier than three business days prior to the Closing and accompanied by a certificate of the Secretary or Assistant Secretary of each suchentity, dated as of the Closing, stating that no amendments have been made to such certificate of incorporation (or similar incorporation or formationdocuments) since such date and (B) all other organizational documents of each Subsidiary, certified by the Secretary or Assistant Secretary of eachsuch entity;(viii) good standing certificates for each Subsidiary from the Registrar of Corporations (or comparable authority) of the jurisdiction inwhich case such entity is incorporated or organized dated as of a date not earlier than three business days prior to the Closing; and(ix) all other documents, instruments or certificates required to be delivered by Seller at or prior to the Closing pursuant to thisAgreement (including Section 6.1 hereof).SECTION 2.4. Retained Assets and Liabilities. (a) Notwithstanding the sale and delivery of the Shares pursuant to Section 2.3, Purchaser and Seller hereby agree that Seller will not sell,assign, transfer or convey and Purchaser will not purchase, acquire or accept the right to any insurance proceeds or other amounts received by Purchaser orSeller after the Effective Time relating to or arising from the period prior to the Effective Time.(b) Notwithstanding the sale and delivery of the Shares pursuant to Section 2.3, except for obligations under the loan agreements secured byfirst priority mortgages on the Vessels owned by the Subsidiaries each as specifically provided in Schedule 2.4(b) to the Seller Disclosure Schedule (the"Assumed Loans"), neither Purchaser nor any Subsidiary of Seller (which becomes a subsidiary of Purchaser at the Effective Time) nor any of Purchaser'sAffiliates shall assume or be obligated to pay or perform any other Liabilities of Seller or any Subsidiary existing at or prior to the Effective Time, whichexcluded Liabilities shall include any pre-Effective Time liabilities under contracts or other arrangements with Affiliates or third parties (such unassumedLiabilities, the "Excluded Liabilities"). From and after the Effective Time, Seller shall assume, pay and perform (when due) all Excluded Liabilities, andPurchaser shall pay and perform (when due), or shall cause the Subsidiaries to pay and perform (when due) all other Liabilities of or related to theSubsidiaries or the Vessels relating to the period after the Effective Time (the "Purchaser Assumed Liabilities"). Purchaser agrees to perform, or cause theSubsidiaries to perform, and be liable for, all post-Effective Time obligations under the Material Contracts (other than those Contracts set forth on Schedule Chereto which are to be terminated).(c) For the avoidance of doubt, other than the Assumed Loans, Seller shall remain liable for any Liability, claim, cost, expense or litigationrelating to and arising from (1) the ownership or operation of any Vessel prior to the Effective Time, (2) the conduct of the business of Seller and itsSubsidiaries prior to the Effective Time and (3) the termination of any Contracts set forth on Schedule C hereto, including the agreements between CentralMare or any other Affiliate of Seller, including the management agreements, and the Subsidiary.(d) Any amounts received by Purchaser or by Seller which represent payment for services, accounts receivable or accruals relating to both pre-Effective Time and post-Effective Time periods shall be apportioned and paid over by Seller to Purchaser or by Purchaser to Seller, as applicable, inaccordance with their relative rights thereto under this Section 2.4. Invoices or other demands for payment received by Purchaser or by Seller after theEffective Time which reflect both Excluded Liabilities and Purchaser Assumed Liabilities shall be apportioned and satisfied by Seller and Purchaser, asapplicable, in accordance with their respective obligations 5Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. with respect thereto under this Section 2.4.(e) Within 45 days after the Closing Date, Seller will prepare and deliver to Purchaser a balance sheet, as of the Closing Date, for eachSubsidiary prepared in accordance with generally accepted accounting practices in the United States.ARTICLE IIIREPRESENTATIONS AND WARRANTIES OF PURCHASER Purchaser hereby represents and warrants to Seller as follows: SECTION 3.1. Incorporation. Purchaser is a corporation validly existing and in good standing under the laws of the Republic of theMarshall Islands, and has the power and authority to enter into, and perform all of its obligations under, this Agreement. This Agreement has been duly andvalidly authorized, executed and delivered by Purchaser and constitutes a valid and binding obligation of Purchaser, enforceable against Purchaser inaccordance with its terms. SECTION 3.2 No Conflicts. The execution, delivery and performance by the Purchaser of this Agreement will not (with or without noticeor lapse of time, or both) (i) result in any violation of any provision of its articles of incorporation or bylaws, (ii) conflict with or constitute breach of, ordefault under, or give any person the right to terminate or accelerate any payment due under, or result in the creation or imposition of any lien, encumbrance,security interest, pledge, mortgage, charge or other claim against it or any of its assets, under any agreement, contract, charter, lease, loan agreement, license,indenture, mortgage, note commitment or other arrangement to which it is a party or by which any of its assets may be bound (including any materialContract), or (iii) result in any violation of any applicable law, statute, rule or regulation or order, permit or authorization of any governmental authority orcourt. SECTION 3.3 Consents. No material consent, approval, license, permit, order or authorization of, or registration, declaration or filingwith, any U.S. federal, state, local or foreign governmental authority or any other person is required in connection with Purchaser's execution, delivery andperformance of this Agreement or its consummation of the transactions contemplated hereby. SECTION 3.4 Authorization. The execution, delivery and performance by Purchaser of this Agreement and the consummation byPurchaser of the transactions contemplated hereby are within Purchaser's corporate powers and have been duly authorized by all necessary corporate action onthe part of Purchaser. This Agreement constitutes a valid and binding agreement of Purchaser enforceable against Purchaser in accordance with its terms. SECTION 3.5 Investment Representation. Purchaser acknowledges that the Shares have not been registered under U.S. federal or statesecurities laws and are being sold in reliance upon an exemption therefrom. Purchaser is acquiring the Shares for its own account for investment purposesonly, and not with a view to the resale or distribution thereof. 6Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. ARTICLE IVREPRESENTATIONS AND WARRANTIES OF SELLER Seller hereby represents and warrants to Purchaser as follows: SECTION 4.1 Incorporation. Seller is a corporation validly existing and in good standing under the laws of the Republic of the MarshallIslands, and has the power and authority to enter into, and perform all of its obligations under, this Agreement. Except for the Stockholder Approval, thisAgreement has been duly and validly authorized, executed and delivered by Seller and constitutes a valid and binding obligation of Seller, enforceable againstSeller in accordance with its terms. SECTION 4.2 No Conflicts. The execution, delivery and performance by Seller of this Agreement will not (with or without notice or lapseof time, or both) (i) result in any violation of any provision of the articles of incorporation or bylaws or other governing instruments of Seller or anySubsidiary, (ii) except for required consents set forth on Schedule 4.3 of the Seller Disclosure Schedules, conflict with or constitute a breach or default under,or give any person the right to terminate and accelerate any payment due under, or result in the creation or imposition of any Lien, encumbrance, securityinterest, pledge, mortgage, charge, other claim under, any agreement, charter, contract, lease, loan agreement, license, indenture, mortgage, note, commitmentor other arrangement, to which Seller or any Subsidiary is a party or by which any of its or their assets may be bound or (iii) result in any violation of anyapplicable law, statute, rule or regulation, order, permit or authorization of any governmental authority or court. SECTION 4.3 Consents. No material consent, approval, license, permit, order or authorization of, or registration, declaration or filingwith, any governmental authority or any other person (including with respect to any Subsidiary) is required in connection with Seller's execution, delivery andperformance of this Agreement or its consummation of the transactions contemplated hereby, other than those specifically set forth on Schedule 4.3 of the SellerDisclosure Schedules. SECTION 4.4 Title to Shares. Seller has, and will convey to Purchaser at the Closing, good and valid title to the Shares free and clearof any Liens, encumbrances or adverse claims of any kind, including any claims, Liens, pledges, options, stockholder agreements and voting agreements,other than the other than Liens securing the Assumed Loans. The sale and delivery of the Shares being purchased hereunder are not subject to any preemptiverights, rights of first refusal or other right or encumbrance in favor of or any other person. SECTION 4.5 Subsidiaries. Each Subsidiary has been duly incorporated and is validly existing in good standing under the laws of thejurisdiction of its incorporation and has the power and authority to conduct its business as it is now conducted. The Shares constitute all of the issued andoutstanding capital stock and other securities of the Subsidiaries. There are no outstanding options, warrants or other rights to acquire any capital stock orother securities of any Subsidiary. Schedule 4.5 of the Seller Disclosure Schedule lists each Subsidiary of the Seller, including its name, jurisdiction ofincorporation or formation, its authorized, issued and 7Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. outstanding capital stock and other outstanding securities, and the holders thereof and the names of its officers and directors. SECTION 4.6 Authorization; Approvals. (a) The execution, delivery and performance by Seller of this Agreement and theconsummation by Seller of the transactions contemplated hereby are within Seller's corporate powers and have been duly authorized by all necessary corporateaction on the part of Seller other than the Stockholder Approval. This Agreement constitutes a valid and binding agreement of Seller enforceable against Sellerin accordance with its terms.(b) At a meeting duly called and held, the Seller's Board of Directors (the "Seller's Board") has (i) unanimously determined that this Agreement andthe transactions contemplated hereby and the Additional Purchase Agreements and the transactions contemplated thereby are fair to and in the best interests ofSeller and the Seller's stockholders, (ii) unanimously approved and declared advisable this Agreement and the Additional Purchase Agreements and thetransactions contemplated hereby and thereby, (iii) unanimously recommended that the approval of this Agreement and the Additional Purchase Agreementsand the transactions contemplated hereby and thereby be submitted to the Seller Stockholder Meeting (as defined below), and (iv) unanimously adopted therecommendation by the Seller's Board for approval of this Agreement and the Additional Purchase Agreements and the transactions contemplated hereby andthereby by the stockholders of Seller (such recommendation, the "Recommendation") (subject to Section 5.7(b)), which resolutions have not beensubsequently rescinded, modified or amended in any respect.(c) Seller has taken all action required to be taken by it in order to exempt this Agreement and the Additional Purchase Agreements and thetransactions contemplated hereby and thereby from, and this Agreement, the Additional Purchase Agreements and such transactions are exempt from, therequirements of any "moratorium", "control share", "fair price", "affiliate transaction", "business combination" or other anti-takeover laws and regulations ofthe Republic of the Marshall Islands (or other applicable jurisdiction) or any comparable provisions contained in Seller's articles of incorporation (includingArticle L thereof) or bylaws.SECTION 4.7 Capitalization. The authorized capital of Seller consists of (i) 1,000,000,000 shares of Common Stock of which17,147,535 are outstanding and (ii) 20,00,000,000 shares of Preferred Stock, par value $0.01 per share, none of which are outstanding. There are nooutstanding options, rights, warrants or other commitments of Seller or of any of the Subsidiaries to issue any capital stock or other securities of Seller or anyof the Subsidiaries, and neither Seller nor any Subsidiary has any contingent or other obligation to purchase, redeem or otherwise acquire any of its capitalstock or other securities. The Common Stock of Seller is the only security of Seller whose holders having voting rights. SECTION 4.8 Vessels. (a) Section 4.8(a) of the Seller Disclosure Schedule contains a list of all vessels owned by the Subsidiaries (the"Vessels") including the name, registered owner, capacity (gross tonnage or deadweight tonnage, as specified therein), year built, classification society, officialnumber and flag state of each Vessel. Other than the Vessels, none of the Subsidiaries owns, leases or charters any vessels. Except as set forth in Section4.8(a) of the Seller Disclosure Schedule, each Vessel has been operated in compliance 8Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. with all Maritime Guidelines and Laws, except where such failure to be in compliance has not had and would not reasonably be expected to have, individuallyor in the aggregate, a Material Adverse Effect. Each of the Subsidiaries are qualified to own and operate the Vessels under applicable Laws, including the Lawsof each Vessel's flag state, except where such failure to be qualified would not reasonably be expected to have, individually or in the aggregate, a MaterialAdverse Effect. Each Vessel has all national and international operating and trading certificates and endorsements, each of which is valid, that are requiredfor the operation of such Vessel in the trades and geographic areas in which it is operated, except where such failure to be qualified would not reasonably beexpected to have, individually or in the aggregate, a Material Adverse Effect.(b) Each Vessel is classed by any of Lloyd's Register of Shipping, American Bureau of Shipping, Det Norske Veritas, Korean Register or aclassification society which is a full member of the International Association of Classification Societies and is materially in class with all class and tradingcertificates valid through the date of this Agreement and, to the knowledge of Seller, (i) no event has occurred and no condition exists that would cause anysuch Vessel's class to be suspended or withdrawn, and (ii) each such Vessel is free of average damage affecting its class.(c) With respect to each of the Vessels, one of the Subsidiaries is the sole owner of such Vessel and has good title to such Vessel free and clearof all Liens other than Permitted Liens and those described in Seller's Annual Report on Form 20-F for the year ended December 31, 2012 (the "20-F"). Purchaser has, prior to execution of this Agreement, physically inspected each Vessel and accepted the condition thereof.SECTION 4.9 Assets of the Subsidiaries. (a) Each of the Subsidiaries has good and valid title to each of its assets, rights andproperties, including its Vessel, free and clear of any Liens, charges and encumbrances of any kind, except for Permitted Liens.(b) The assets, rights and properties of the Subsidiaries, and their permits and authorizations with respect thereto, are all the assets, rights,properties, permits and authorizations required by it for the conduct of its businesses in all material respects as heretofore conducted and will providePurchaser with the ability to own and operate such assets and properties and to conduct such businesses in substantially the same manner as they have beenconducted heretofore.SECTION 4.10 Contracts.(a) Section 4.10 of the Seller Disclosure Schedule lists the following Contracts (each a "Material Contract") to which any of the Subsidiaries isa party or a Vessel is subject or to which Seller is a party in relation to a Subsidiary or a Vessel:(i) each Contract, indenture, credit agreement, loan agreement, security agreement, mortgage, guarantee, note or other evidence ofindebtedness, or other agreement relating to indebtedness in excess of $1,000,000, including all documents related to any sale/leaseback or otherfinancing arrangement; 9Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. (ii) each Contract relating to the financing of any Vessel; (iii) each Contract pursuant to which a Vessel is leased or chartered by Seller or any of the Subsidiaries to or from another person,including all charters, contracts of affreightment and other employment arrangements; (iv) each material operating agreement, management agreement, crewing agreement, brokerage agreement and other services agreementwith respect to any Vessel; (v) each Contract, including any option, with respect to the purchase, sale chartering, leasing or financing of any Vessel; (vi) each Contract that grants any right of first refusal, right of first offer, purchase option or similar right or that limits or purports tolimit the ability of Seller or any of the Subsidiaries to own, operate, charter, lease, sell, transfer, pledge or otherwise dispose of any Vessel; (vii) each voting agreement relating to Seller or any of the Subsidiaries or registration rights agreement relating to any of theSubsidiaries. (b) Seller has heretofore made available to Purchaser true and complete copies of each of the Material Contracts (including any amendments,supplements or side letters with respect thereto) set forth in Section 4.10 of the Seller Disclosure Schedule. All Material Contracts are in full force andeffect. Each of the Material Contracts is a legal and valid obligation of, and enforceable in accordance with its terms against, the respective partiesthereto. Except as disclosed in the 20-F, neither Seller nor any of the Subsidiaries is in material violation or breach of or default under (or with notice or lapseof time, or both, would be in violation or breach of or default under) the terms of any such Material Contract. To the knowledge of Seller, no other party toany Material Contract is in material breach of or in default under such Material Contract or advised Seller that it will not perform any of its materialobligations under any such Material Contract. Neither Seller nor any of the Subsidiaries has received any notice of breach, default or termination or non-renewal (or proposed breach, default, termination or non-renewal) with respect to any Material Contracts.SECTION 4.11 Litigation; Claims. (a) There is no arbitration, lawsuit, claim, investigation or proceeding (each, an "Action") pending or, to theknowledge of Seller, threatened in writing against Seller or any of the Subsidiaries that (a) challenges or seeks to enjoin, alter, prevent or delay the transactionscontemplated hereby or (b) has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. No officer or directoror any of the Subsidiaries or is a defendant in any Action commenced by any stockholder of Seller or any of the Subsidiaries with respect to the performanceof his duties as an officer or a director of Seller or any such Subsidiary under any applicable law, rule or regulation of any jurisdiction. There is nounsatisfied judgment, penalty or award against Seller or any of the Subsidiaries. Neither Seller nor any of the Subsidiaries is subject to any orders or decreesof governmental authority, court or arbitral body that have had or would, individually or in the aggregate, reasonably be expected to have a Material AdverseEffect. 10Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. (b) There are no outstanding insurance claims with respect to any assets or business of any Subsidiary. To the knowledge of Seller, there areno other claims by or against any person with respect to the assets or business of any Subsidiary or any grounds therefor.SECTION 4.12 Certain Business Practices. None of the Subsidiaries nor any director, officer, agent or employee of any of theSubsidiaries has (a) used any funds for unlawful contributions, gifts, entertainment or other expenses relating to political activity or for the business of any ofthe Subsidiaries, (b) paid any bribe or kickback, illegal political contribution, payment from corporate funds which was incorrectly recorded on the booksand records of any of the Subsidiaries or made any unlawful payment from corporate funds to foreign or domestic government officials or employees or toforeign or domestic political parties or campaigns or violated any provision of the U.S. Foreign Corrupt Practices Act or the U.K. Bribery Act, or (c) made anyother unlawful payment.SECTION 4.13 Taxes. Seller and the Subsidiaries have filed all U.S. Federal, state, local and non-U.S. tax returns that are required to befiled and have paid all taxes (including any assessments, fines or penalties) shown by such returns or otherwise assessed, which are due and payable, exceptfor any such taxes, assessments, fines or penalties currently being contested in good faith and for which they have provided adequate reserves; and there is notax deficiency which has been or might reasonably be expected to be asserted or threatened against the Company or any of the Subsidiaries.SECTION 4.14 No Fees. No finder's, broker's, financial advisory or other fees or commissions are payable to any person by Seller or anySubsidiary in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby.SECTION 4.15 No Other Representations or Warranties. Other than the representations and warranties expressly contained in thisArticle IV, Seller makes no other representations or warranties, express or implied, relating to the Subsidiaries, the Shares, the Vessels or the transactionscontemplated hereby, and any such other representation or warranty is hereby disclaimed.ARTICLE VCOVENANTS AND AGREEMENTSSECTION 5.1. Conduct of Business. Prior to the Closing (or the earlier termination of this Agreement), Seller agrees not to allow any ofthe Subsidiaries to (i) effect any change in its authorized capitalization, including any securities issuance, stock split, stock dividend, recapitalization,reorganization or reclassification; (ii) incur any material Liability outside the ordinary course of business; (iii) dispose of assets or subject any assets to anyLien, claim or encumbrance; (iv) declare or pay any dividend or make any distribution or redeem or repurchase any of its outstanding securities; (v) issueany options, warrants or other rights to acquire securities; (vi) enter into any Material Contract; (vii) make any capital expenditure in excess of $20,000without the prior written consent of Purchaser; (viii) conduct its business other than in the ordinary course consistent with past practice; or (ix) agree to do anyof the foregoing. 11Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. SECTION 5.2. Stockholder Meeting; Regulatory Undertaking. (a) Seller has taken or shall take, as soon as reasonably practicablefollowing the date of this Agreement, all action necessary to duly call, give notice of, convene and hold a meeting of its stockholders (the "Seller StockholdersMeeting") for the sole purpose of seeking the Stockholder Approval. Seller shall (i) prepare and cause a proxy statement (the "Proxy Statement",) and otherappropriate solicitation materials, relating to the Stockholder Approval to be mailed to Seller's stockholders as promptly as practicable after the date of thisAgreement and (ii) subject to Section 5.7(b), solicit the Stockholder Approval. The Seller's Board shall recommend to the holders of shares of Common Stockof Seller that they give the Stockholder Approval and shall include such recommendation in the Proxy Statement, except to the extent that Seller's Board shallhave made a change in Recommendation as permitted by Section 5.7(b). Seller agrees that its obligations to hold the Seller Stockholders Meeting pursuant tothis Section 5.2(a) shall not be affected by the commencement, public proposal, public disclosure or communication to Seller of any Acquisition Proposal orby the making of any change in Recommendation. (b) Purchaser shall have the right to review and comment on the Proxy Statement and any proxy solicitation materials prior to their dissemination andshall provide such information as Seller may reasonably request for inclusion in the Proxy Statement. (c) Prior to the date of this Agreement, Purchaser has received voting agreements, substantially in the form of Exhibit A to this Agreement, from theholders of the outstanding common stock of Seller specified on Schedule E hereto.(d) Subject to the terms and conditions of this Agreement, Seller shall use its reasonable best efforts to take, or cause to be taken, all actions and todo, or cause to be done, all things necessary, proper or advisable under applicable law to consummate the transactions contemplated by this Agreement,including (i) preparing and filing as promptly as practicable with any governmental authority or other third party all documentation to effect all necessaryfilings, notices, petitions, statements, registrations, submissions of information, applications and other documents, and (ii) obtaining and maintaining allapprovals, consents, registrations, permits, authorizations and other confirmations required to be obtained from any governmental authority or other thirdparty that are necessary, proper or advisable to consummate the transactions contemplated by this Agreement; provided that the obligations set forth in thissentence shall not be deemed to have been breached as a result of actions by Seller or its Subsidiaries permitted by Section 5.7(b).SECTION 5.3. Indemnification. (a) Subject to the limitations set forth in this Section 5.3, Purchaser hereby agrees to indemnify andhold harmless Seller and Seller's Affiliates (collectively, the "Seller Indemnified Parties") from and against any losses, claims, damages, liabilities, costs andexpenses, including, without limitation, taxes, interest, penalties and attorneys' fees and expenses (collectively "Damages"), asserted against, resulting to,imposed upon or incurred by any Seller Indemnified Party, directly or indirectly, by reason of or resulting from (i) a breach by Purchaser of any covenant oragreement of Purchaser in this Agreement, including with respect to the Purchaser Assumed Liabilities or the Assumed Loans, or (ii) any misinterpretation orbreach of a warranty of Purchaser in this Agreement. 12Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. (b) Subject to the limitations set forth in this Section 5.3, Seller hereby agrees to indemnify and hold harmless Purchaser and Purchaser'sAffiliates (collectively, the "Purchaser Indemnified Parties") from and against any Damages asserted against, resulting to, imposed upon or incurred by anyPurchaser Indemnified Party, directly or indirectly, by reason of or resulting from (i) a breach or violation of any covenant or agreement of Seller in thisAgreement, including with respect to Excluded Liabilities, or (ii) any misrepresentation or breach of warranty of Seller in this Agreement.(c) If any investigation, action or other proceeding (each a "Proceeding") is initiated against any Seller Indemnified Party or PurchaserIndemnified Party (each for this purpose an "Indemnitee") by any third party and such Indemnitee intends to seek indemnification from the Seller or Purchaser(each for this purpose an "Indemnitor"), as applicable, under this Section 5.3 on account of its involvement in such Proceeding, then such Indemnitee willgive prompt notice to the applicable Indemnitor of such Proceeding; provided, that the failure to so notify such Indemnitor will not relieve such Indemnitor ofits obligations under this Section 5.3, but will reduce such obligations by the amount of damages or increased costs and expenses attributable to such failure togive notice. Upon receipt of such notice, such Indemnitor will diligently defend against such Proceeding on behalf of such Indemnitee at its own expense usingcounsel reasonably acceptable to such Indemnitee; provided, that if such Indemnitor fails or refuses to conduct such defense, or such Indemnitee has beenadvised by counsel that it may have defenses available to it which are different from or in addition to those available to such Indemnitor, or that its interests insuch Proceeding are adverse to such Indemnitor's interests, then such Indemnitee may defend against such Proceeding, with one counsel selected by Indemniteewho shall be reasonably acceptable to Indemnitor, at such Indemnitor's expense. Such Indemnitor or Indemnitee, as applicable, may participate in anyProceeding being defended against by the other at its own expense, and will not settle any Proceeding without the prior consent of the other, which consent willnot be unreasonably withheld; provided, that the consent of an Indemnitor is not required if such Indemnitor failed or refused to defend the Indemnitee in theProceeding that is being settled. Such Indemnitor and Indemnitee will cooperate with each other in the conduct of any such Proceeding.(d) Claims for indemnification under Section 5.3(a)(ii) and 5.3(b)(ii) may only be asserted within the following time periods:(A) claims arising out of (i) any breach of Sections 4.1, 4.4, 4.5, 4.6(a), 4.9(a), 4.12, 4.13 and 4.14 (collectively, "Seller'sFundamental Warranties"), or (ii) any breach of Sections 3.1 and 3.4 (collectively, "Buyer's Fundamental Warranties"), and any claims arising out of fraud,may be asserted at any time; and(B) all other claims may be asserted for a period of 18 months after the Closing Date.(e) Notwithstanding any other provision hereof:(A) no Indemnitor will have any indemnification obligations under Section 5.3(a)(ii)(exclusive of a breach involving any ofPurchaser's Fundamental Warranties or fraud) or Section 5.3(b)(ii) (exclusive of a breach involving any of Seller's Fundamental Warranties or 13Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. fraud) unless and until the claims asserted against such Indemnitor exceed 1% of the Cash Consideration in the aggregate (the "Basket Amount"), in whichcase such Indemnitor shall only be liable for the amount by which the aggregate of all such claims exceeds the Basket Amount;(B) Seller's aggregate indemnification obligations under Section 5.3(b) are capped at the Purchase Price;(C) Neither party will have any liability (for indemnification or otherwise) for any claims (i) for punitive, exemplary, or specialdamages of any nature, (ii) for indirect or consequential damages, including damages for lost profit, lost business opportunity, or damage to businessreputation, or (iii) that, at the time notice thereof is delivered to the other party, are contingent, speculative, or unquantified; (D) The amount of losses for which an Indemnitee may be entitled to seek indemnification under this Agreement will be reduced bythe amount of any insurance proceeds or other payments from third parties received by such Indemnitee with respect to such loss and the amount of anydeduction, credit or other Tax benefit that such Indemnitee is entitled to with respect to such loss. If an Indemnitee, after having received any indemnificationpayment pursuant to this Agreement with respect to a loss, subsequently receives any insurance proceeds or other payment or recognizes any deduction, creditor other Tax benefit with respect to such loss, such Indemnitee will promptly refund and pay to the Indemnitor an amount equal to such insurance proceeds,payment, or other benefit; (E) Each Indemnitee will use its commercially reasonable efforts to mitigate any losses with respect to which it may be entitled to seekindemnification pursuant to this Agreement; and (F) If an Indemnitee is indemnified for any losses pursuant to this Agreement with respect to any claim by a third party, then theIndemnitor will be subrogated to all rights and remedies of the Indemnitee against such third party, and the Indemnitee will cooperate with and assist theIndemnitor in asserting all such rights and remedies against such third party.(f) THE PARTIES HERETO AGREE THAT, EXCEPT IN THE CASE OF FRAUD, (X) THE INDEMNIFICATION PROVISIONSCONTAINED IN SECTION 5.3 CONSTITUTE THE SOLE AND EXCLUSIVE REMEDIES OF THE PARTIES HERETO FOR ANY BREACH OFANY REPRESENTATION, WARRANTY COVENANT OR OBLIGATION CONTAINED IN THIS AGREEMENT, AND (Y) TO THE FULLESTEXTENT PERMITTED BY LAW, ALL OTHER RIGHTS AND REMEDIES OF THE PARTIES ARISING UNDER OR IN CONNECTION WITH THISAGREEMENT ARE HEREBY WAIVED AND RELEASED; PROVIDED THAT NOTHING HEREIN SHALL LIMIT OR IMPAIR A PARTY'S RIGHTTO OBTAIN SPECIFIC PERFORMANCE OR OTHER INJUNCTIVE RELIEF WITH RESPECT TO ANY SUCH BREACH OF ANY SUCHREPRESENTATION, WARRANTY, COVENANT OR OBLIGATION. 14Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. (g) Any indemnification payments under this Section 5.3 will be treated, for tax purposes, as adjustments to the Purchase Price.SECTION 5.4. Release of Guarantees. Purchaser agrees to use its commercially reasonable best efforts to cause the Bank to release infull, contingent upon and effective as of the Closing of this Agreement, all Liabilities, guarantees and other obligations of Seller and its Affiliates (other than theSubsidiaries) with respect to the Assumed Loans (including, without limitation, by means of providing substitute guarantees thereof from Purchaser). SECTION 5.5. Public Announcements. Seller and Purchaser shall consult with each other before issuing any press release or makingany other public statement with respect to this Agreement or the transactions contemplated hereby and, except as may be required by applicable laws or anylisting agreement with or rule of any securities exchange, neither Seller or Purchaser shall issue any such press release or make any such public statementwithout the consent of the other party. SECTION 5.6. Notifications. Each of Seller and Purchaser shall promptly notify the other of: (a) any notice or other communication from any person alleging that the consent of such person is or may be required in connection with thetransactions contemplated by this Agreement; (b) any notice or other communication from any governmental authority in connection with the transactions contemplated by this Agreement; (c) any actions, suits, claims, investigations or proceedings commenced or, to its knowledge, threatened against, relating to or involving or otherwiseaffecting Seller or any of its Subsidiaries or Purchaser, as the case may be, that, if pending on the date of this Agreement, would have been requiredto have been disclosed pursuant to any Section of this Agreement; (d) any inaccuracy of any representation or warranty contained in this Agreement at any time during the term hereof that could reasonably be expectedto cause any of the conditions set forth in Article VI not to be satisfied; and (e) any failure of that party to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it hereunder. SECTION 5.7. No Solicitation. (a) Subject to Section 5.7(b), after the date hereof and prior to the earlier of the termination of thisAgreement pursuant to Article VII and the Effective Time, Seller and the Subsidiaries shall not, directly or indirectly, (i) solicit, initiate or knowingly take anyaction to facilitate or encourage the submission of any Acquisition Proposal, (ii) enter into or participate in any discussions or negotiations with, furnish anyinformation relating to Seller or any of the Subsidiaries or afford access to the business, properties, assets, books or records of Seller or any of theSubsidiaries to any third party with respect to inquiries regarding, or the making or, an Acquisition Proposal, (iii) fail to make, withdraw or modify the 15Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Recommendation of Seller's Board that stockholders vote in favor of Stockholder Approval, (iv) grant any waiver or release under any standstill or similaragreement with respect to any class of equity securities of Seller or any of its Subsidiaries, or (v) approve, recommend or enter into (or publicly propose to doany of the foregoing) any agreement in principle, letter of intent, merger agreement, acquisition agreement or similar instrument relating to an AcquisitionProposal. For purposes hereof, "Acquisition Proposal" means any offer, proposal or indication of interest by a third party relating to any transaction or seriesof transactions involving (A) any acquisition or purchase, directly or indirectly, of 15% or more of the consolidated assets of Seller and/or any of theSubsidiaries, (B) any tender offer or exchange offer that, if consummated, would result in a third party beneficially owning 15% or more of the votingsecurities of Seller, or (C) a merger, consolidation, share exchange, recapitalization or similar transaction involving Seller or any of the Subsidiaries. (b) Notwithstanding the foregoing:(i) Prior to the Seller Stockholder Meeting, Seller, directly or indirectly through its representatives, may (A) engage in negotiations ordiscussions with any third party that has made (and not withdrawn) after the date of this Agreement a bona fide, written Acquisition Proposal that(x) did not result from a breach or violation of the provisions of Section 5.7(a), and (y) the Seller's Board reasonably believes in good faith, afterconsulting with its outside legal and financial advisors, would reasonably be expected to lead to a Superior Proposal, and (B) thereafter furnish tosuch third party or its representatives or its financing sources non-public information relating to Seller or any of the Subsidiaries pursuant to aconfidentiality agreement (a copy of which shall be provided for informational purposes only to Purchaser) with such third party with terms no lessfavorable to Seller than those contained in Seller's confidentiality agreement with Purchaser and containing additional provisions that expresslypermit Seller to comply with the terms of this Section 5.7 if, in the case of either clause (A) or (B), the Seller's Board determines in good faith, afterconsultation with outside legal counsel, that the failure to take such action is reasonably likely to result in a breach of its fiduciary duties underapplicable law and Seller shall have provided Purchaser two (2) business days notice of its intention to take any action discussed in clause (A) or(B); provided that all such information provided or made available to such third party (to the extent that such information has not been previouslyprovided or made available to Purchaser) is provided or made available to Purchaser prior to or substantially concurrently with the time it is providedor made available to such third party.(ii) Prior to the Seller Stockholder Meeting, Seller may, following receipt of and on account of a Superior Proposal, terminate thisAgreement to enter into a definitive agreement with respect to, a Superior Proposal, or the Seller's Board may change its Recommendation inconnection with such Superior Proposal, if such Superior Proposal did not result from a breach or violation of the provisions of Section 5.7 and theSeller's Board reasonably determines in good faith, after consultation with outside legal and financial advisors, that in light of such SuperiorProposal, the failure of the Seller's Board to take such action is reasonably likely to result in a breach of its fiduciary duties under applicable law;provided, however, Seller shall not be entitled to terminate this Agreement or change the Seller's Board's Recommendation in connection with a 16Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Superior Proposal unless (A) Seller promptly notifies Purchaser, in writing, at least five (5) business days (the "Notice Period") before making sucha change of Seller's Board Recommendation or terminating this Agreement to enter into (or causing a Subsidiary to enter into) a definitive agreementwith respect to a Superior Proposal, of its intention to take such action with respect to such Superior Proposal, which notice shall state expressly thatSeller has received an Acquisition Proposal that the Seller's Board has determined to be a Superior Proposal and that the Seller's Board intends tochange its Recommendation and/or Seller intends to terminate this Agreement to enter into a definitive agreement with respect to such SuperiorProposal; (B) Seller attaches to such notice the most current version of the proposed agreement and the identity of the third party making suchSuperior Proposal; (C) during the Notice Period, if requested by Purchaser, Seller has, and has directed its representatives to, engaged in negotiationswith Purchaser in good faith to amend this Agreement or increase the Purchase Price in such a manner that such Superior Proposal ceases toconstitute a Superior Proposal; and (D) following the Notice Period, the Seller's Board shall have determined in good faith, taking into account anychanges to this Agreement or increase to the Purchase Price made or proposed in writing by Purchaser, that such Superior Proposal continues toconstitute a Superior Proposal; provided, however that with respect to any applicable Superior Proposal, any amendment to the financial terms orany other material amendment to a term of such Superior Proposal shall require a new written notice by Seller and a new Notice Period, and no suchtermination of this Agreement by Seller or change in the Seller's Board's Recommendation in connection with such Superior Proposal may be madeduring any Notice Period.(c) Seller and the Seller's Board shall not take any of the actions referred to in Section 5.7 (b) unless Seller shall have first complied with theapplicable requirements of this Section 5.7 (c). Seller shall notify Purchaser promptly (but in no event later than 24 hours) after receipt by Seller (or any of itsrepresentatives) of any Acquisition Proposal, including the material terms and conditions thereof and the identity of the person making such AcquisitionProposal and its proposed financing sources, and shall keep Purchaser reasonably informed on a prompt basis (but in any event no later than 24 hours) as tothe status (including changes or proposed changes to the material terms) of such Acquisition Proposal. Seller shall also notify Purchaser promptly (but in noevent later than 24 hours) after receipt by Seller of any request for non-public information relating to Seller or any of the Subsidiaries or for access to thebusiness, properties, assets, books or records of Seller or any of the Subsidiaries by any third party that has informed Seller that it is considering making, orhas made, an Acquisition Proposal.(d) Definition of Superior Proposal. For purposes of this Agreement, "Superior Proposal" means a bona fide, unsolicited written AcquisitionProposal (provided that, for the purposes of this definition, references to "15%" in the definition of Acquisition Proposal shall be deemed replaced withreferences to "100%") that (i) is not subject to any financing condition and for which financing has been fully committed or is on hand (with respect to whichPurchaser has received written evidence of such person's ability to fully finance its Acquisition Proposal), (ii) the Seller's Board determines in good faith, afterconsidering the advice of its outside counsel and its financial advisor, is reasonably likely to be consummated in accordance with its terms, taking intoaccount all aspects of the proposal and the identity of the person making the 17Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Acquisition Proposal, and (iii) the Seller's Board determines in good faith, after considering the advice of its financial advisor, would result in a transactionmore favorable, from a financial point of view to Seller's stockholders than the transactions contemplated by this Agreement and the Additional PurchaseAgreements (taken as a whole), after taking into account any amendment to this Agreement or increase the Purchase Price proposed by Purchaser.ARTICLE VICLOSING CONDITIONSSECTION 6.1. (a) The obligation of Purchaser to purchase the Shares from Seller is subject to the satisfaction, or waiver by Purchaser, ofthe following conditions: (i) The representations and warranties of Seller set forth herein shall be true and correct in all material respects on and as of theClosing Date as if made on and as of such date. Seller shall have timely performed all of its obligations hereunder to be performed by it on or prior tosuch date. Seller shall at Closing have delivered to Purchaser a certificate to the foregoing effect and to the effect that all other conditions to theClosing to be satisfied by Seller have been satisfied;(ii) The Stockholder Approval shall have been obtained and all other necessary approvals, authorizations, consents or waivers fromany governmental authority shall have been obtained on terms reasonably acceptable to the Purchaser;(iii) Any required consent with respect to the Assumed Loans shall have been obtained on terms reasonably acceptable to Purchaser(Purchaser having, prior to execution of this Agreement, seen the consents or proposed consent terms of such parties and determined them to besatisfactory) and satisfactory evidence thereof shall have been provided to Purchaser, including definitive documentation providing for assumptionby Purchaser of the Assumed Loans as of the Closing Date;(iv) Any required consent of the Charterers under existing charters for the Vessels shall have been obtained on terms reasonablyacceptable to Purchaser (Purchaser having, prior to execution of this Agreement, seen the consents or proposed consent terms of such parties anddetermined them to be satisfactory) and satisfactory evidence thereof shall have been provided to Purchaser;(v) Seller shall at Closing have tendered stock certificates evidencing the Shares, duly endorsed in blank and free and clear of anyLiens other than other than Liens securing the Assumed Loans;(vi) The officers and directors of each of the Subsidiaries shall have tendered their resignations;(vii) Each of the Contracts listed on Schedule C hereto shall have been terminated without cost to Purchaser or any of the Subsidiaries; 18Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. (viii) Seller shall have taken all actions necessary to assume, and shall have assumed, all Excluded Liabilities from the Subsidiaries;(ix) During the period from the date of this Agreement until the Closing, no event has occurred that has had, or could reasonably beexpected to have, a Material Adverse Effect on the Subsidiaries, taken as a whole; or(x) There shall be pending no litigation against any of Seller, Purchaser or any Subsidiary seeking to delay or enjoin the transactionscontemplated hereby or by the Additional Purchase Agreements or which, if decided adversely to Seller or any Subsidiary, would have a MaterialAdverse Effect on any of them; and(xi) No default by the Seller or breach of any representation, warranty, covenant or agreement by the Seller shall exist under anAdditional Purchase Agreement nor shall any Additional Purchase Agreement have been terminated.(b) The obligation of Seller to sell the Shares to Purchaser is subject to the satisfaction, or waiver by Seller, of the following conditions:(i) The representations and warranties of Purchaser set forth herein shall be true and correct in all material respects on and as of theClosing Date as if made on and as of such date. Purchaser shall have timely performed all of its obligations hereunder to be performed by it on orprior to such date. Purchaser shall have delivered to Seller a certificate to the foregoing effect and to the effect that all other conditions to the Closingto be satisfied by Purchaser have been satisfied;(ii) The Stockholder Approval shall have been obtained and all necessary approvals, authorizations, consents or waivers from anygovernmental authority shall have been obtained;(iii) Purchaser shall at Closing have tendered to Seller payment in full of the Cash Consideration for the Shares;(iv) Seller shall have received evidence reasonably satisfactory to Seller that the Bank has released in full all Liabilities, guarantees andother obligations of Seller and its Affiliates (other than the Subsidiaries) with respect to the Assumed Loans; and(v) There shall be pending no litigation against any of Seller, Purchaser or any Subsidiary seeking to delay or enjoin the transactionscontemplated hereby.ARTICLE VIITERMINATION AND AMENDMENT SECTION 7.1. Termination. This Agreement may be terminated at any time: (a) by mutual written consent of Purchaser and Seller; 19Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. (b) by either Purchaser or Seller if (i) there has been a breach of any representation, warranty, covenant or agreement on the part of the otherparty set forth in this Agreement which breach has not been cured within five business days following receipt by the breaching party of notice of such breachand which breach is reasonably likely to have a Material Adverse Effect, or (ii) if any permanent injunction or other order of a court or other competentauthority preventing the consummation of the transactions contemplated hereby shall have become final and non-appealable;(c) by Seller, prior to receipt of the Stockholder Approval, in accordance with Section 5.7(b), provided that Seller pays to Purchaser theTermination Fee amount due pursuant to Section 7.5(b) in accordance with the terms specified therein, and immediately following termination of thisAgreement Seller (or its Subsidiaries) enters into a definitive agreement with respect to a Superior Proposal;(d) by Purchaser, if an Additional Purchase Agreement has been terminated and if Seller was obligated to pay Purchaser a termination fee as aresult of such termination under such terminated Additional Purchase Agreement, Seller shall pay to Purchaser the Termination Fee amount due pursuant toSection 7.5(b) hereof in accordance with the terms specified therein upon termination of this Agreement pursuant to this Section 7.1(d);(e) by either Purchaser or Seller if, for any reason, the Closing shall not have occurred on or before November 30, 2013; provided, however,that the right to terminate this Agreement under this Section 7.1(d) shall not be available to any party whose failure to fulfill any obligation under thisAgreement has been the cause of, or resulted in, the failure of the Closing to have occurred on or prior to such date; or(f) by either Purchaser or Seller if any required approval of the stockholders of Seller of this Agreement and the transactions contemplatedhereby shall not have obtained by reason of the failure to obtain the required affirmative vote at a duly held meeting of stockholders or at any adjournmentthereof.SECTION 7.2. Effect of Termination. In the event of termination of this Agreement by either Seller or Purchaser as provided in Section7.1, this Agreement shall forthwith become void and there shall be no liability or obligation on the part of Purchaser or Seller or their respective officers ordirectors except (y) with respect to Sections 4.14, 7.5 and this Section 7.2 and (z) to the extent that such termination results from the willful breach by a partyhereto of any of its representations, warranties, covenants or agreements set forth in this Agreement. SECTION 7.3. Amendment. This Agreement may be amended by the parties hereto at any time before or after any required approval ofthis Agreement and the transactions contemplated hereby by the stockholders of Seller, but, after any such approval, no amendment shall be made which bylaw requires any further approval by such stockholders without such further approval. This Agreement may not be amended except by an instrument inwriting signed on behalf of each of the parties hereto. 20Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. SECTION 7.4. Extension; Waiver. Any party may: (a) extend the time for the performance of any of the obligations or other acts of theother party hereto, (b) waive any inaccuracies in the representations and warranties of the other party contained herein or in any document delivered pursuanthereto and (c) waive compliance by the other party with any of the agreements, covenants or conditions contained herein. Any agreement on the part of a partyhereto to any such extension or waiver shall be valid only if set forth in a written instrument signed on behalf of such party, and no such extension or waivershall be construed as an extension or waiver of any other obligation, inaccuracy or compliance with any other provision. SECTION 7.5. Fees and Expenses. (a) Except as otherwise expressly provided herein, all costs and expenses incurred in connectionwith this Agreement and the transactions contemplated hereby shall be paid by the party incurring such expense; provided, however, that Purchaser agrees topay all legal fees and expenses incurred in connection with the preparation, negotiation and execution of definitive documentation providing for the assumptionby Purchaser of the Assumed Loans. (b) If this Agreement is terminated by Seller pursuant to Section 7.1(c) or, if applicable, Section 7.1(d), then Seller shall pay to Purchaser, inimmediately available funds, the Termination Fee at the time of such termination. "Termination Fee" means $166,666. Purchaser agrees that, upon anytermination of the Agreement under circumstances where the Termination Fee is payable by Seller and such Termination Fee is paid in full, Purchaser shall beprecluded from any other remedy against Seller, at law in equity or otherwise, and Purchaser shall not seek any other recovery, judgment or damages of anykind.SECTION 7.6. Further Assurances. At any time and from time to time both before and after the Closing, the parties agree to cooperatewith each other, to execute and deliver such other documents, instruments of transfer or assignment, files, books and records and do all such further acts andthings as may be necessary or desirable to carry out the transactions contemplated hereunder. ARTICLE VIIIMISCELLANEOUS SECTION 8.1. Governing Law and Choice of Forum. This Agreement shall be governed by and construed under the law of the State ofNew York without regard to its choice of law provisions. Any proceeding commenced by either party hereto seeking to enforce any provision of, or arising outof or relating to this Agreement or the transactions contemplated hereby shall be brought in New York state or federal court located in New York County in theState of New York, and each of the parties hereby irrevocably consents to the exclusive jurisdiction of such courts in any such proceeding and irrevocablyvaries, to the fullest extent permitted by law, any objection it may now or hereafter have to the laying of the venue of such proceeding in any such court of thatany such proceeding brought in any such court has been brought in an inconvenient forum. SECTION 8.2. Assignment. Neither this Agreement nor any right, remedy, obligation or liability arising hereunder shall be assignable byeither Seller or Purchaser without the other's prior written consent. 21Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. SECTION 8.3. Notices. All notices, requests, claims, demands and other communications required or permitted to be given hereunderwill be in writing and will be given when delivered by hand or sent by registered or certified mail (postage prepaid, return receipt requested) or by overnightcourier (providing proof of delivery) or by telecopy (providing confirmation of transmission). All such notices, requests, claims, demands or othercommunications will be addressed as follows: (a) if to Purchaser, to: AMCI Products Limitedc/o AMCI Poseidon475 Steamboat Road, 2nd FloorGreenwich, CT 06830Telephone No.: +1 (203) 531-3820Fax No.: +1 203-625-9231Attention: Chief Executive OfficerWith a copy to:Morgan, Lewis & Bockius LLP101 Park AvenueNew York, New York 10178Telephone No.: (212) 309-6050Fax No.: (212) 309-6001Attention: Stephen P. Farrell(b) If to Seller, to: Top Ships Inc.1 Vass Sofias, Maroussi 15124GreeceTelephone No.: 011-30-210-8128182Fax No.: 011-30-210-6141272Attention: Alexandros Tsirikos, Chief Financial OfficerWith a copy to:Seward & Kissel LLPOne Battery Park PlazaNew York, New York 10004Telephone No.: (212) 574-1223Fax No.: (212) 480-8421Attention: Gary J. Wolfe or such other address as Seller or Purchaser shall have specified to the other party in writing in accordance with Section 8.3. 22Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. SECTION 8.4. Binding Effect. The provisions of this Agreement shall be binding upon and accrue to the benefit of the parties hereto andtheir respective heirs, legal representatives, successors and permitted assigns. SECTION 8.5. Section and Other Headings; Interpretation. The section and other headings herein are for convenience of referenceonly, do not constitute part of this Agreement and shall not be deemed to limit or otherwise affect any of the provisions hereof. SECTION 8.6. Counterparts. This Agreement may be executed in counterparts, each of which when so executed and delivered shall bedeemed to be an original and all of which together shall be deemed to be one and the same agreement. SECTION 8.7. Entire Agreement; Waiver, Amendment. This Agreement contains the entire agreement of the parties with respect to thesubject matter hereof and supersedes any and all prior agreements, understandings or undertakings, written or oral. Neither this Agreement nor any provisionhereof shall be waived, amended, modified, changed, discharged or terminated except by an instrument in writing, signed by the party against whom anywaiver, amendment, modification, change, discharge or termination is sought. [Signature page follows] 23Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the date first above written. TOPS SHIPS INC. By:/s/ Alexandros Tsirikos Name:Alexandros Tsirikos Title:Attorney-in-fact AMCI PRODUCTS LIMITED By:/s/ Stamatis Molaris Name:Stamatis Molaris Title:Director 24Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Schedule A1. Hongbo Shipping Company Limited (owner of the Hongbo) 25Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Schedule BCash ConsiderationAn amount equal to $35,000,000 minus (a) the outstanding debt under the loan agreements of the Subsidiaries or of the Seller in relation to the Subsidiaries orthe Vessels as of the Closing Date, plus (b) the retention cash under each such loan agreement as of the Closing Date (the sum of (a) and (b), the "Net AssumedLoan Amount"). 26Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Schedule CContracts to be Terminated-Management Agreements between the Subsidiaries and Central Mare-All other Related Party Agreements, other than the ship brokerage agreement with Central Shipbroking Limited set forth on Schedule 4.10 to the SellerDisclosure Schedule with respect to the existing bareboat charter for the Vessel 27Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Schedule DSeller Shareholder Voting AgreementsSovereign Holdings Inc.[Evangelos Pistiolis] 28Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Exhibit A[Form of Voting Agreement]VOTING AGREEMENT September ___, 2013AMCI Products Limitedc/o AMCI Poseidon475 Steamboat Road, 2nd FloorGreenwich, CT 06830Re: Voting of Common Stock of Top Ships Inc.Gentlemen:In order to induce AMCI Products Limited ("Purchaser") to execute and deliver those certain Stock Purchase Agreements, each dated as of September5, 2013 (the "Stock Purchase Agreements"), by and between Top Ships Inc. ("Seller") and Purchaser pursuant to which Seller is selling all of the outstandingCommon Stock and other securities of certain of its subsidiaries to Purchaser, the undersigned is entering into this agreement with Purchaser. The undersigned beneficially owns ____ shares of Common Stock of Seller. The undersigned hereby revokes any and all proxies and votingagreements it has heretofore given or entered into with respect to such shares of Common Stock and other securities. Until such time as any of the Stock Purchase Agreements are terminated in accordance with their terms (at which time this voting agreement shallalso terminate), the undersigned hereby agrees to vote, or cause to be voted, at each meeting of stockholders of Seller (or pursuant to any written consent of thestockholders of Seller) at which such stockholders consider a proposal to approve any of the Stock Purchase Agreements and the transactions contemplatedthereby, all shares of Common Stock beneficially owned by it, in favor of such proposal and against any other proposal which might delay or inhibit orconflict with the transactions contemplated by the Stock Purchase Agreements. Prior to the earlier of the completion of the Closing under each of the Stock Purchase Agreements and the termination of each of the Stock PurchaseAgreements in accordance with their respective terms, the undersigned will not sell or dispose of any shares of Common Stock it beneficially owns or engagein any other transaction which would impair its ability to fulfill its obligations hereunder. The voting agreement contained herein may not be revoked, except by an amendment, modification or termination signed by each of the partieshereto. 29Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. The invalidity or unenforceability of any provision of this Voting Agreement shall not affect the validity or enforceability of any other provision ofthis Voting Agreement. In addition to any and all other remedies that may be available at law in the event of any breach of this Voting Agreement, each partyhereto shall be entitled to specific performance of the agreements and obligations hereunder of the parties hereto and to such other injunctive or other equitablerelief as may be granted by a court of competent jurisdiction. This Voting Agreement shall be governed by and construed in accordance with the laws of the Republic of the Marshall Islands. This Voting Agreement may be signed in counterparts, each of which shall be an original and all of which together shall constitute one and the sameinstrument. * * *IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written. [Stockholder] By: Name: Title: ACCEPTED:AMCI PRODUCTS LIMITED By: Name:Title: 30 Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Exhibit 4.21 EXECUTION VERSION STOCK PURCHASE AGREEMENT THIS STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of September 5, 2013, is entered into by and between TopShips Inc., a Marshall Islands corporation ("Seller"), and AMCI Products Limited, a Marshall Islands corporation ("Purchaser"). WHEREAS, Seller desires to sell to Purchaser, and Purchaser desires to purchase from Seller, all of the issued and outstanding capitalstock of certain subsidiaries of Seller; NOW, THEREFORE, in consideration of the premises and mutual covenants and obligations hereinafter set forth and other good andvaluable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller and Purchaser intending to be legally bound, hereby agree asfollows: ARTICLE I DEFINITIONS The following capitalized terms used in this Agreement shall have the following respective meanings: "Additional Purchase Agreements" means the separate Stock Purchase Agreements, of even date herewith, between Purchaser and Sellerwith respect to the shares of Jeke Shipping Company Limited, Warhol Shipping Company Limited, Indiana R Shipping Company Limited and BrittoShipping Company Limited and of Hongbo Shipping Company Limited, respectively. "Affiliate" means a person that directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under commoncontrol with, another person. "Bank" means Alpha Bank A.E. "Books and Records" means minutes books, stock books, stock ledgers, books of account, manuals, general, financial, warranty andshipping records, invoices, members, customer and supplier lists, correspondence, engineering, maintenance and operating records, advertising andpromotional materials, credit records of customers and other documents, records and files, in each case related to the business of the Subsidiaries, excludingfinancial and tax books, records and files (or copies thereof) necessary for Seller to comply with its financial reporting and tax obligations. "Cash Consideration" means an amount as specified on Schedule B hereto. "Charterers" means Daelim Corporation."Contract" means any agreement, arrangement, contract, commitment, understanding, letter of intent, term sheet or other instrument,whether written or oral, together with each amendment, supplement or side letter relating thereto. Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. "Control" including the terms "controlling," "controlled by" and "under common control with," means the possession, directly orindirectly, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting shares, by contractor otherwise. "Liability" means all indebtedness, obligations and other liabilities and contingencies of a person, whether absolute, accrued, contingent,fixed or otherwise, or whether due or to become due, including, without limitation, intercompany indebtedness, obligations and other intercompany liabilitiesand contingencies and suits, claims or litigation. "Lien" means, with respect to any property or asset (including the Shares), any lien (statutory or otherwise), mortgage, pledge, charge,security interest, hypothecation, community property interest, equitable interest, servitude, option, right (including rights of first refusal), restriction(including restrictions on voting, transfer or other attribute of ownership), lease, license, other rights of occupancy, adverse claim, reversion, reverter,preferential arrangement or any other encumbrance in respect of such property or asset. "Material Adverse Effect" means, with respect to Seller, a Subsidiary or Purchaser, any fact, change, effect, event or occurrence that (A)has, or would reasonably be expected to have, individually or in the aggregate, a material adverse effect on the assets (including the Vessels), Liabilities,business, financial condition or results of operations of Seller, such Subsidiary or Purchaser, as the case may be, or (B) would prevent or materially delaySeller or Purchaser, as the case may be, from performing its obligations under this Agreement in any material respect; provided, however, that a MaterialAdverse Effect will not be deemed to result from or arise out of (a) any change in general economic conditions in any countries in which Seller, a Subsidiary orPurchaser operate which is not unique to, and does not disproportionately impact, Seller, a Subsidiary or Purchaser, as the case may be, (b) any change orevent generally affecting companies operating in the industries or markets in which Seller, the Subsidiaries or Purchaser operates which is not unique to, anddoes not disproportionately impact, Seller, a Subsidiary or Purchaser, as the case may be, (c) any change in accounting requirements or in any law applicableto Seller, a Subsidiary or Purchaser, including the proposal or adoption of any new law or change in the interpretation or enforcement of any existing law, or(d) any change resulting from the execution of this Agreement or the consummation of any of the transactions contemplated hereby, including any changeresulting from or arising out of any announcement relating to this Agreement or the transactions contemplated hereby. "Net Assumed Loan Amount" has the meaning specified on Schedule B hereto. "Permitted Liens" means (i) Liens securing the Assumed Loans, (ii) Liens for taxes that are not yet due and payable or that are beingcontested in good faith by appropriate proceedings, (iii) statutory Liens of landlords and workers', carriers' and mechanics' or other like Liens incurred in theordinary course of business consistent with past practices for amounts that are not yet due and payable or that are being contested in good faith, (iv) othermaritime liens, charges and encumbrances incidental to the conduct of the business of a Subsidiary or the ownership and operation of a Subsidiary's Vesselwhich do not in the aggregate materially detract from the value of such Subsidiary's Vessel or materially impair the use thereof in the operation of its business. 2Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. "Purchase Price" means (a) the Cash Consideration and (b) the Net Assumed Loan Amount."Seller Disclosure Schedule" means the Disclosure Schedule to this Agreement of Seller, dated the date hereof. "Shares" means all of the issued and outstanding capital stock, and all outstanding options, rights and warrants to purchase securities, ofeach of the Subsidiaries to be sold by Seller and purchased by Purchaser in accordance with the terms hereof. "Stockholder Approval" means the approval by the stockholders of Seller of this Agreement and the Additional Purchase Agreements andthe transactions contemplated hereby and thereby. "Subsidiary" means each of the corporations listed on Schedule A hereto. "Vessel" means the Lichtenstein, which is owned by the Subsidiary as reflected on Schedule A hereto. ARTICLE IIPURCHASE AND SALE OF SHARES SECTION 2.1. Purchase and Sale of the Shares. Upon the terms and subject to the conditions set forth in this Agreement, at theClosing, Seller will sell, transfer and deliver, and Purchaser will purchase from Seller, the Shares (free and clear of all Liens other than Liens securing theAssumed Loans) for the Purchase Price. Such payment of the Cash Consideration shall be paid in accordance with Section 2.3(a). SECTION 2.2. Closing. The consummation of the transactions contemplated by this Agreement (the "Closing") shall take place at theoffices of Top Ships, Vass Sofias, Maroussi, Greece, at 10:00 a.m. (local time) on a date to be specified by the parties which shall be no later than fifteen (15)business days after satisfaction (or waiver as provided herein) of the conditions set forth in Article VI (other than those conditions that by their nature will besatisfied at the Closing), unless another time, date and/or place is agreed to in writing by the parties. The date upon which the Closing occurs is hereinreferred to as the "Closing Date." The Closing will be deemed effective as of 11:59 p.m. on the Closing Date (the "Effective Time"). By way of example, ifthe Stockholder Approval is obtained on September 25, 2013 and all other conditions are then satisfied, the Closing shall (unless otherwise agreed by theparties) take place no later than on October 16, 2013. SECTION 2.3. Transactions to be Effected at the Closing. (a) At the Closing, Purchaser will:(i) pay to Seller, by transfer of immediately available funds in accordance with the instructions to be provided by Seller, the CashConsideration; 3Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. (ii) all copies of definitive documentation providing for assumption by Purchaser of the Assumed Loans; and(iii) deliver to Seller all other documents, instruments or certificates required to be delivered by Purchaser at or prior to the Closingpursuant to this Agreement (including Section 6.1(b) hereof).(b) At the Closing, Seller will deliver to Purchaser:(i) a certificate or certificates representing the Shares duly endorsed or accompanied by stock powers duly endorsed in blank andwith any required stock transfer tax stamps affixed or with evidence of payment of any stamp duty or any other applicable tax;(ii) all other documents and instruments necessary to vest in Purchaser all of Seller's right, title and interest in and to the Shares, freeand clear of all Liens other than Liens securing the Assumed Loans);(iii) all copies of the consents, approvals and notices obtained or provided to or from the Bank and the Charterers, as the case may be,in form and substance satisfactory to Purchaser (Purchaser having, prior to execution of this Agreement, seen the consents or proposed consent termsof such Charterers and determined them to be satisfactory), including definitive documentation providing for assumption by Purchaser of theAssumed Loans as of the Closing Date;(iv) evidence of (A) Seller's assumption of the Excluded Liabilities, (B) the termination of the Contracts set forth on Schedule C,including any agreements between the Subsidiaries, on the one hand, and Seller or any Affiliate of Seller on the other hand and (C) the cancellation ofany amounts or obligations owing by the Subsidiaries to Seller or any Affiliate of Seller;(v) the Books and Records;(vi) the resignations, effective as of the Closing, described in Section 6.1(a)(vi);(vii) a copy of (A) the certificate of incorporation, as amended (or similar incorporation or formation documents), of each Subsidiary,certified by the Registrar of Corporations (or comparable authority) of the jurisdiction in which each such entity is incorporated or organized, as of adate not earlier than three business days prior to the Closing and accompanied by a certificate of the Secretary or Assistant Secretary of each suchentity, dated as of the Closing, stating that no amendments have been made to such certificate of incorporation (or similar incorporation or formationdocuments) since such date and (B) all other organizational documents of each Subsidiary, certified by the Secretary or Assistant Secretary of eachsuch entity; 4Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. (viii) good standing certificates for each Subsidiary from the Registrar of Corporations (or comparable authority) of the jurisdiction inwhich case such entity is incorporated or organized dated as of a date not earlier than three business days prior to the Closing; and(ix) all other documents, instruments or certificates required to be delivered by Seller at or prior to the Closing pursuant to thisAgreement (including Section 6.1 hereof).SECTION 2.4. Retained Assets and Liabilities; Escrow. (a) Notwithstanding the sale and delivery of the Shares pursuant to Section 2.3, Purchaser and Seller hereby agree that Seller will not sell,assign, transfer or convey and Purchaser will not purchase, acquire or accept the right to any insurance proceeds or other amounts received by Purchaser orSeller after the Effective Time relating to or arising from the period prior to the Effective Time.(b) Notwithstanding the sale and delivery of the Shares pursuant to Section 2.3, except for obligations under the loan agreements secured byfirst priority mortgages on the Vessels owned by the Subsidiaries as specifically provided in Schedule 2.4(b) to the Seller Disclosure Schedule (the "AssumedLoans"), neither Purchaser nor any Subsidiary of Seller (which becomes a subsidiary of Purchaser at the Effective Time) nor any of Purchaser's Affiliatesshall assume or be obligated to pay or perform any other Liabilities of Seller or any Subsidiary existing at or prior to the Effective Time, which excludedLiabilities shall include any pre-Effective Time liabilities under contracts or other arrangements with Affiliates or third parties (such unassumed Liabilities,the "Excluded Liabilities"). From and after the Effective Time, Seller shall assume, pay and perform (when due) all Excluded Liabilities, and Purchaser shallpay and perform (when due), or shall cause the Subsidiaries to pay and perform (when due) all other Liabilities of or related to the Subsidiaries or the Vesselsrelating to the period after the Effective Time (the "Purchaser Assumed Liabilities"). Purchaser agrees to perform, or cause the Subsidiaries to perform, and beliable for, all post-Effective Time obligations under the Material Contracts (other than those Contracts set forth on Schedule C hereto which are to beterminated).(c) For the avoidance of doubt, other than the Assumed Loans, Seller shall remain liable for any Liability, claim, cost, expense or litigationrelating to and arising from (1) the ownership or operation of any Vessel prior to the Effective Time, (2) the conduct of the business of Seller and itsSubsidiaries prior to the Effective Time and (3) the termination of any Contracts set forth on Schedule C hereto, including the agreements between CentralMare or any other Affiliate of Seller, including the management agreements, and the Subsidiary.(d) Any amounts received by Purchaser or by Seller which represent payment for services, accounts receivable or accruals relating to both pre-Effective Time and post-Effective Time periods shall be apportioned and paid over by Seller to Purchaser or by Purchaser to Seller, as applicable, inaccordance with their relative rights thereto under this Section 2.4. Invoices or other demands for payment received by Purchaser or by Seller after theEffective Time which reflect both Excluded Liabilities and Purchaser Assumed Liabilities shall be apportioned and satisfied by Seller and Purchaser, asapplicable, in accordance with their respective obligations 5Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. with respect thereto under this Section 2.4.(e) Within 45 days after the Closing Date, Seller will prepare and deliver to Purchaser a balance sheet, as of the Closing Date, for eachSubsidiary prepared in accordance with generally accepted accounting practices in the United States.(f) (i) On the first to occur of the Closing Date or the date when a closing occurs with respect to either of the Additional Purchase Agreements,Purchaser will deposit $1,000,000 (the "Alpha Bank Escrow Amount") into an escrow account.(ii) If Bank has provided its consent to the transactions contemplated by this Agreement in accordance with Section 6.1(a)(iii) on or prior to March31, 2014, the Alpha Bank Escrow Amount shall be (x) released to Purchaser upon full repayment of the credit facility secured by a first prioritymortgage over the Vessel (the "Alpha Bank Credit Facility"), provided such repayment occurs on or prior to March 31, 2014, or (y) released andpaid to Seller on April 1, 2014 if the Alpha Bank Credit Facility has not been repaid in full prior to that date.(iii) If Bank has not provided its consent to the transactions contemplated by this Agreement in accordance with Section 6.1(a)(iii) on or prior toMarch 31, 2014, the Alpha Bank Escrow Amount shall be (x) released to Purchaser upon full repayment of the Alpha Bank Credit Facility, providedsuch repayment occurs on or prior to April 30, 2014, or (y) released and paid to Seller on May 1, 2014 if the Alpha Bank Credit Facility has notbeen repaid in full prior to that date.ARTICLE IIIREPRESENTATIONS AND WARRANTIES OF PURCHASER Purchaser hereby represents and warrants to Seller as follows: SECTION 3.1. Incorporation. Purchaser is a corporation validly existing and in good standing under the laws of the Republic of theMarshall Islands, and has the power and authority to enter into, and perform all of its obligations under, this Agreement. This Agreement has been duly andvalidly authorized, executed and delivered by Purchaser and constitutes a valid and binding obligation of Purchaser, enforceable against Purchaser inaccordance with its terms. SECTION 3.2 No Conflicts. The execution, delivery and performance by the Purchaser of this Agreement will not (with or without noticeor lapse of time, or both) (i) result in any violation of any provision of its articles of incorporation or bylaws, (ii) conflict with or constitute breach of, ordefault under, or give any person the right to terminate or accelerate any payment due under, or result in the creation or imposition of any lien, encumbrance,security interest, pledge, mortgage, charge or other claim against it or any of its assets, under any agreement, contract, charter, lease, loan agreement, license,indenture, mortgage, note commitment or other arrangement to which it is a party or by which any of its assets may be bound (including any materialContract), or (iii) result in any violation of any applicable law, 6Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. statute, rule or regulation or order, permit or authorization of any governmental authority or court. SECTION 3.3 Consents. No material consent, approval, license, permit, order or authorization of, or registration, declaration or filingwith, any U.S. federal, state, local or foreign governmental authority or any other person is required in connection with Purchaser's execution, delivery andperformance of this Agreement or its consummation of the transactions contemplated hereby. SECTION 3.4 Authorization. The execution, delivery and performance by Purchaser of this Agreement and the consummation byPurchaser of the transactions contemplated hereby are within Purchaser's corporate powers and have been duly authorized by all necessary corporate action onthe part of Purchaser. This Agreement constitutes a valid and binding agreement of Purchaser enforceable against Purchaser in accordance with its terms. SECTION 3.5 Investment Representation. Purchaser acknowledges that the Shares have not been registered under U.S. federal or statesecurities laws and are being sold in reliance upon an exemption therefrom. Purchaser is acquiring the Shares for its own account for investment purposesonly, and not with a view to the resale or distribution thereof. ARTICLE IVREPRESENTATIONS AND WARRANTIES OF SELLER Seller hereby represents and warrants to Purchaser as follows: SECTION 4.1 Incorporation. Seller is a corporation validly existing and in good standing under the laws of the Republic of the MarshallIslands, and has the power and authority to enter into, and perform all of its obligations under, this Agreement. Except for the Stockholder Approval, thisAgreement has been duly and validly authorized, executed and delivered by Seller and constitutes a valid and binding obligation of Seller, enforceable againstSeller in accordance with its terms. SECTION 4.2 No Conflicts. The execution, delivery and performance by Seller of this Agreement will not (with or without notice or lapseof time, or both) (i) result in any violation of any provision of the articles of incorporation or bylaws or other governing instruments of Seller or anySubsidiary, (ii) except for required consents set forth on Schedule 4.3 of the Seller Disclosure Schedules, conflict with or constitute a breach or default under,or give any person the right to terminate and accelerate any payment due under, or result in the creation or imposition of any Lien, encumbrance, securityinterest, pledge, mortgage, charge, other claim under, any agreement, charter, contract, lease, loan agreement, license, indenture, mortgage, note, commitmentor other arrangement, to which Seller or any Subsidiary is a party or by which any of its or their assets may be bound or (iii) result in any violation of anyapplicable law, statute, rule or regulation, order, permit or authorization of any governmental authority or court. SECTION 4.3 Consents. No material consent, approval, license, permit, order or authorization of, or registration, declaration or filingwith, any governmental authority or any 7Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. other person (including with respect to any Subsidiary) is required in connection with Seller's execution, delivery and performance of this Agreement or itsconsummation of the transactions contemplated hereby, other than those specifically set forth on Schedule 4.3 of the Seller Disclosure Schedules. SECTION 4.4 Title to Shares. Seller has, and will convey to Purchaser at the Closing, good and valid title to the Shares free and clearof any Liens, encumbrances or adverse claims of any kind, including any claims, Liens, pledges, options, stockholder agreements and voting agreements,other than the other than Liens securing the Assumed Loans. The sale and delivery of the Shares being purchased hereunder are not subject to any preemptiverights, rights of first refusal or other right or encumbrance in favor of or any other person. SECTION 4.5 Subsidiaries. Each Subsidiary has been duly incorporated and is validly existing in good standing under the laws of thejurisdiction of its incorporation and has the power and authority to conduct its business as it is now conducted. The Shares constitute all of the issued andoutstanding capital stock and other securities of the Subsidiaries. There are no outstanding options, warrants or other rights to acquire any capital stock orother securities of any Subsidiary. Schedule 4.5 of the Seller Disclosure Schedule lists each Subsidiary of the Seller, including its name, jurisdiction ofincorporation or formation, its authorized, issued and outstanding capital stock and other outstanding securities, and the holders thereof and the names of itsofficers and directors. SECTION 4.6 Authorization; Approvals. (a) The execution, delivery and performance by Seller of this Agreement and theconsummation by Seller of the transactions contemplated hereby are within Seller's corporate powers and have been duly authorized by all necessary corporateaction on the part of Seller other than the Stockholder Approval. This Agreement constitutes a valid and binding agreement of Seller enforceable against Sellerin accordance with its terms.(b) At a meeting duly called and held, the Seller's Board of Directors (the "Seller's Board") has (i) unanimously determined that this Agreement andthe transactions contemplated hereby and the Additional Purchase Agreements and the transactions contemplated thereby are fair to and in the best interests ofSeller and the Seller's stockholders, (ii) unanimously approved and declared advisable this Agreement and the Additional Purchase Agreements and thetransactions contemplated hereby and thereby, (iii) unanimously recommended that the approval of this Agreement and the Additional Purchase Agreementsand the transactions contemplated hereby and thereby be submitted to the Seller Stockholder Meeting (as defined below), and (iv) unanimously adopted therecommendation by the Seller's Board for approval of this Agreement and the Additional Purchase Agreements and the transactions contemplated hereby andthereby by the stockholders of Seller (such recommendation, the "Recommendation") (subject to Section 5.7(b)), which resolutions have not beensubsequently rescinded, modified or amended in any respect.(c) Seller has taken all action required to be taken by it in order to exempt this Agreement and the Additional Purchase Agreements and thetransactions contemplated hereby and thereby from, and this Agreement, the Additional Purchase Agreements and such transactions are exempt from, therequirements of any "moratorium", "control share", "fair price", "affiliate transaction", 8Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. "business combination" or other anti-takeover laws and regulations of the Republic of the Marshall Islands (or other applicable jurisdiction) or any comparableprovisions contained in Seller's articles of incorporation (including Article L thereof) or bylaws.SECTION 4.7 Capitalization. The authorized capital of Seller consists of (i) 1,000,000,000 shares of Common Stock of which17,147,535 are outstanding and (ii) 20,00,000,000 shares of Preferred Stock, par value $0.01 per share, none of which are outstanding. There are nooutstanding options, rights, warrants or other commitments of Seller or of any of the Subsidiaries to issue any capital stock or other securities of Seller or anyof the Subsidiaries, and neither Seller nor any Subsidiary has any contingent or other obligation to purchase, redeem or otherwise acquire any of its capitalstock or other securities. The Common Stock of Seller is the only security of Seller whose holders having voting rights. SECTION 4.8 Vessels. (a) Section 4.8(a) of the Seller Disclosure Schedule contains a list of all vessels owned by the Subsidiaries (the"Vessels") including the name, registered owner, capacity (gross tonnage or deadweight tonnage, as specified therein), year built, classification society, officialnumber and flag state of each Vessel. Other than the Vessels, none of the Subsidiaries owns, leases or charters any vessels. Except as set forth in Section4.8(a) of the Seller Disclosure Schedule, each Vessel has been operated in compliance with all Maritime Guidelines and Laws, except where such failure to bein compliance has not had and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. Each of the Subsidiariesare qualified to own and operate the Vessels under applicable Laws, including the Laws of each Vessel's flag state, except where such failure to be qualifiedwould not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. Each Vessel has all national and international operatingand trading certificates and endorsements, each of which is valid, that are required for the operation of such Vessel in the trades and geographic areas in whichit is operated, except where such failure to be qualified would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.(b) Each Vessel is classed by any of Lloyd's Register of Shipping, American Bureau of Shipping, Det Norske Veritas, Korean Register or aclassification society which is a full member of the International Association of Classification Societies and is materially in class with all class and tradingcertificates valid through the date of this Agreement and, to the knowledge of Seller, (i) no event has occurred and no condition exists that would cause anysuch Vessel's class to be suspended or withdrawn, and (ii) each such Vessel is free of average damage affecting its class.(c) With respect to each of the Vessels, one of the Subsidiaries is the sole owner of such Vessel and has good title to such Vessel free and clearof all Liens other than Permitted Liens and those described in Seller's Annual Report on Form 20-F for the year ended December 31, 2012 (the "20-F"). Purchaser has, prior to execution of this Agreement, physically inspected each Vessel and accepted the condition thereof.SECTION 4.9 Assets of the Subsidiaries. (a) Each of the Subsidiaries has good and valid title to each of its assets, rights andproperties, including its Vessel, free and clear of any Liens, charges and encumbrances of any kind, except for Permitted Liens. 9Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. (b) The assets, rights and properties of the Subsidiaries, and their permits and authorizations with respect thereto, are all the assets, rights,properties, permits and authorizations required by it for the conduct of its businesses in all material respects as heretofore conducted and will providePurchaser with the ability to own and operate such assets and properties and to conduct such businesses in substantially the same manner as they have beenconducted heretofore.SECTION 4.10 Contracts.(a) Section 4.10 of the Seller Disclosure Schedule lists the following Contracts (each a "Material Contract") to which any of the Subsidiaries isa party or a Vessel is subject or to which Seller is a party in relation to a Subsidiary or a Vessel:(i) each Contract, indenture, credit agreement, loan agreement, security agreement, mortgage, guarantee, note or other evidence ofindebtedness, or other agreement relating to indebtedness in excess of $1,000,000, including all documents related to any sale/leaseback or otherfinancing arrangement; (ii) each Contract relating to the financing of any Vessel; (iii) each Contract pursuant to which a Vessel is leased or chartered by Seller or any of the Subsidiaries to or from another person,including all charters, contracts of affreightment and other employment arrangements; (iv) each material operating agreement, management agreement, crewing agreement, brokerage agreement and other services agreementwith respect to any Vessel; (v) each Contract, including any option, with respect to the purchase, sale chartering, leasing or financing of any Vessel; (vi) each Contract that grants any right of first refusal, right of first offer, purchase option or similar right or that limits or purports tolimit the ability of Seller or any of the Subsidiaries to own, operate, charter, lease, sell, transfer, pledge or otherwise dispose of any Vessel; (vii) each voting agreement relating to Seller or any of the Subsidiaries or registration rights agreement relating to any of theSubsidiaries. (b) Seller has heretofore made available to Purchaser true and complete copies of each of the Material Contracts (including any amendments,supplements or side letters with respect thereto) set forth in Section 4.10 of the Seller Disclosure Schedule. All Material Contracts are in full force andeffect. Each of the Material Contracts is a legal and valid obligation of, and enforceable in accordance with its terms against, the respective partiesthereto. Except as disclosed in the 20-F, neither Seller nor any of the Subsidiaries is in material violation or breach of or default under (or with notice or lapseof time, or both, would be in violation or breach of or default under) the terms of any such Material Contract. To the knowledge of Seller, 10Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. no other party to any Material Contract is in material breach of or in default under such Material Contract or advised Seller that it will not perform any of itsmaterial obligations under any such Material Contract. Neither Seller nor any of the Subsidiaries has received any notice of breach, default or termination ornon-renewal (or proposed breach, default, termination or non-renewal) with respect to any Material Contracts.SECTION 4.11 Litigation; Claims. (a) There is no arbitration, lawsuit, claim, investigation or proceeding (each, an "Action") pendingor, to the knowledge of Seller, threatened in writing against Seller or any of the Subsidiaries that (a) challenges or seeks to enjoin, alter, prevent or delay thetransactions contemplated hereby or (b) has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. Noofficer or director or any of the Subsidiaries or is a defendant in any Action commenced by any stockholder of Seller or any of the Subsidiaries with respect tothe performance of his duties as an officer or a director of Seller or any such Subsidiary under any applicable law, rule or regulation of anyjurisdiction. There is no unsatisfied judgment, penalty or award against Seller or any of the Subsidiaries. Neither Seller nor any of the Subsidiaries issubject to any orders or decrees of governmental authority, court or arbitral body that have had or would, individually or in the aggregate, reasonably beexpected to have a Material Adverse Effect.(b) There are no outstanding insurance claims with respect to any assets or business of any Subsidiary. To the knowledge of Seller, there areno other claims by or against any person with respect to the assets or business of any Subsidiary or any grounds therefor.SECTION 4.12 Certain Business Practices. None of the Subsidiaries nor any director, officer, agent or employee of any of theSubsidiaries has (a) used any funds for unlawful contributions, gifts, entertainment or other expenses relating to political activity or for the business of any ofthe Subsidiaries, (b) paid any bribe or kickback, illegal political contribution, payment from corporate funds which was incorrectly recorded on the booksand records of any of the Subsidiaries or made any unlawful payment from corporate funds to foreign or domestic government officials or employees or toforeign or domestic political parties or campaigns or violated any provision of the U.S. Foreign Corrupt Practices Act or the U.K. Bribery Act, or (c) made anyother unlawful payment.SECTION 4.13 Taxes. Seller and the Subsidiaries have filed all U.S. Federal, state, local and non-U.S. tax returns that are required to befiled and have paid all taxes (including any assessments, fines or penalties) shown by such returns or otherwise assessed, which are due and payable, exceptfor any such taxes, assessments, fines or penalties currently being contested in good faith and for which they have provided adequate reserves; and there is notax deficiency which has been or might reasonably be expected to be asserted or threatened against the Company or any of the Subsidiaries.SECTION 4.14 No Fees. No finder's, broker's, financial advisory or other fees or commissions are payable to any person by Seller or anySubsidiary in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby. 11Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. SECTION 4.15 No Other Representations or Warranties. Other than the representations and warranties expressly contained in thisArticle IV, Seller makes no other representations or warranties, express or implied, relating to the Subsidiaries, the Shares, the Vessels or the transactionscontemplated hereby, and any such other representation or warranty is hereby disclaimed.ARTICLE VCOVENANTS AND AGREEMENTSSECTION 5.1. Conduct of Business. Prior to the Closing (or the earlier termination of this Agreement), Seller agrees not to allow any ofthe Subsidiaries to (i) effect any change in its authorized capitalization, including any securities issuance, stock split, stock dividend, recapitalization,reorganization or reclassification; (ii) incur any material Liability outside the ordinary course of business; (iii) dispose of assets or subject any assets to anyLien, claim or encumbrance; (iv) declare or pay any dividend or make any distribution or redeem or repurchase any of its outstanding securities; (v) issueany options, warrants or other rights to acquire securities; (vi) enter into any Material Contract; (vii) make any capital expenditure in excess of $20,000without the prior written consent of Purchaser; (viii) conduct its business other than in the ordinary course consistent with past practice; or (ix) agree to do anyof the foregoing. SECTION 5.2. Stockholder Meeting; Regulatory Undertaking. (a) Seller has taken or shall take, as soon as reasonably practicablefollowing the date of this Agreement, all action necessary to duly call, give notice of, convene and hold a meeting of its stockholders (the "Seller StockholdersMeeting") for the sole purpose of seeking the Stockholder Approval. Seller shall (i) prepare and cause a proxy statement (the "Proxy Statement",) and otherappropriate solicitation materials, relating to the Stockholder Approval to be mailed to Seller's stockholders as promptly as practicable after the date of thisAgreement and (ii) subject to Section 5.7(b), solicit the Stockholder Approval. The Seller's Board shall recommend to the holders of shares of Common Stockof Seller that they give the Stockholder Approval and shall include such recommendation in the Proxy Statement, except to the extent that Seller's Board shallhave made a change in Recommendation as permitted by Section 5.7(b). Seller agrees that its obligations to hold the Seller Stockholders Meeting pursuant tothis Section 5.2(a) shall not be affected by the commencement, public proposal, public disclosure or communication to Seller of any Acquisition Proposal orby the making of any change in Recommendation. (b) Purchaser shall have the right to review and comment on the Proxy Statement and any proxy solicitation materials prior to their dissemination andshall provide such information as Seller may reasonably request for inclusion in the Proxy Statement. (c) Prior to the date of this Agreement, Purchaser has received voting agreements, substantially in the form of Exhibit A to this Agreement, from theholders of the outstanding common stock of Seller specified on Schedule D hereto.(d) Subject to the terms and conditions of this Agreement, Seller shall use its reasonable best efforts to take, or cause to be taken, all actions and todo, or cause to be done, all things necessary, proper or advisable under applicable law to consummate the transactions contemplated by this Agreement,including (i) preparing and filing as promptly as practicable 12Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. with any governmental authority or other third party all documentation to effect all necessary filings, notices, petitions, statements, registrations, submissionsof information, applications and other documents, and (ii) obtaining and maintaining all approvals, consents, registrations, permits, authorizations and otherconfirmations required to be obtained from any governmental authority or other third party that are necessary, proper or advisable to consummate thetransactions contemplated by this Agreement; provided that the obligations set forth in this sentence shall not be deemed to have been breached as a result ofactions by Seller or its Subsidiaries permitted by Section 5.7(b).SECTION 5.3. Indemnification. (a) Subject to the limitations set forth in this Section 5.3, Purchaser hereby agrees to indemnify andhold harmless Seller and Seller's Affiliates (collectively, the "Seller Indemnified Parties") from and against any losses, claims, damages, liabilities, costs andexpenses, including, without limitation, taxes, interest, penalties and attorneys' fees and expenses (collectively "Damages"), asserted against, resulting to,imposed upon or incurred by any Seller Indemnified Party, directly or indirectly, by reason of or resulting from (i) a breach by Purchaser of any covenant oragreement of Purchaser in this Agreement, including with respect to the Purchaser Assumed Liabilities or the Assumed Loans, or (ii) any misinterpretation orbreach of a warranty of Purchaser in this Agreement. (b) Subject to the limitations set forth in this Section 5.3, Seller hereby agrees to indemnify and hold harmless Purchaser and Purchaser'sAffiliates (collectively, the "Purchaser Indemnified Parties") from and against any Damages asserted against, resulting to, imposed upon or incurred by anyPurchaser Indemnified Party, directly or indirectly, by reason of or resulting from (i) a breach or violation of any covenant or agreement of Seller in thisAgreement, including with respect to Excluded Liabilities, or (ii) any misrepresentation or breach of warranty of Seller in this Agreement.(c) If any investigation, action or other proceeding (each a "Proceeding") is initiated against any Seller Indemnified Party or PurchaserIndemnified Party (each for this purpose an "Indemnitee") by any third party and such Indemnitee intends to seek indemnification from the Seller or Purchaser(each for this purpose an "Indemnitor"), as applicable, under this Section 5.3 on account of its involvement in such Proceeding, then such Indemnitee willgive prompt notice to the applicable Indemnitor of such Proceeding; provided, that the failure to so notify such Indemnitor will not relieve such Indemnitor ofits obligations under this Section 5.3, but will reduce such obligations by the amount of damages or increased costs and expenses attributable to such failure togive notice. Upon receipt of such notice, such Indemnitor will diligently defend against such Proceeding on behalf of such Indemnitee at its own expense usingcounsel reasonably acceptable to such Indemnitee; provided, that if such Indemnitor fails or refuses to conduct such defense, or such Indemnitee has beenadvised by counsel that it may have defenses available to it which are different from or in addition to those available to such Indemnitor, or that its interests insuch Proceeding are adverse to such Indemnitor's interests, then such Indemnitee may defend against such Proceeding, with one counsel selected by Indemniteewho shall be reasonably acceptable to Indemnitor, at such Indemnitor's expense. Such Indemnitor or Indemnitee, as applicable, may participate in anyProceeding being defended against by the other at its own expense, and will not settle any Proceeding without the prior consent of the other, which consent willnot be unreasonably withheld; provided, that the consent of an Indemnitor is not required if such Indemnitor failed or refused to defend the Indemnitee in theProceeding that 13Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. is being settled. Such Indemnitor and Indemnitee will cooperate with each other in the conduct of any such Proceeding.(d) Claims for indemnification under Section 5.3(a)(ii) and 5.3(b)(ii) may only be asserted within the following time periods:(A) claims arising out of (i) any breach of Sections 4.1, 4.4, 4.5, 4.6(a), 4.9(a), 4.12, 4.13 and 4.14 (collectively, "Seller'sFundamental Warranties"), or (ii) any breach of Sections 3.1 and 3.4 (collectively, "Buyer's Fundamental Warranties"), and any claims arising out of fraud,may be asserted at any time; and(B) all other claims may be asserted for a period of 18 months after the Closing Date.(e) Notwithstanding any other provision hereof:(A) no Indemnitor will have any indemnification obligations under Section 5.3(a)(ii)(exclusive of a breach involving any ofPurchaser's Fundamental Warranties or fraud) or Section 5.3(b)(ii) (exclusive of a breach involving any of Seller's Fundamental Warranties or fraud) unlessand until the claims asserted against such Indemnitor exceed 1% of the Cash Consideration in the aggregate (the "Basket Amount"), in which case suchIndemnitor shall only be liable for the amount by which the aggregate of all such claims exceeds the Basket Amount;(B) Seller's aggregate indemnification obligations under Section 5.3(b) are capped at the Purchase Price;(C) Neither party will have any liability (for indemnification or otherwise) for any claims (i) for punitive, exemplary, or specialdamages of any nature, (ii) for indirect or consequential damages, including damages for lost profit, lost business opportunity, or damage to businessreputation, or (iii) that, at the time notice thereof is delivered to the other party, are contingent, speculative, or unquantified; (D) The amount of losses for which an Indemnitee may be entitled to seek indemnification under this Agreement will be reduced bythe amount of any insurance proceeds or other payments from third parties received by such Indemnitee with respect to such loss and the amount of anydeduction, credit or other Tax benefit that such Indemnitee is entitled to with respect to such loss. If an Indemnitee, after having received any indemnificationpayment pursuant to this Agreement with respect to a loss, subsequently receives any insurance proceeds or other payment or recognizes any deduction, creditor other Tax benefit with respect to such loss, such Indemnitee will promptly refund and pay to the Indemnitor an amount equal to such insurance proceeds,payment, or other benefit; (E) Each Indemnitee will use its commercially reasonable efforts to mitigate any losses with respect to which it may be entitled to seekindemnification pursuant to this Agreement; and 14Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. (F) If an Indemnitee is indemnified for any losses pursuant to this Agreement with respect to any claim by a third party, then theIndemnitor will be subrogated to all rights and remedies of the Indemnitee against such third party, and the Indemnitee will cooperate with and assist theIndemnitor in asserting all such rights and remedies against such third party.(f) THE PARTIES HERETO AGREE THAT, EXCEPT IN THE CASE OF FRAUD, (X) THE INDEMNIFICATION PROVISIONSCONTAINED IN SECTION 5.3 CONSTITUTE THE SOLE AND EXCLUSIVE REMEDIES OF THE PARTIES HERETO FOR ANY BREACH OFANY REPRESENTATION, WARRANTY COVENANT OR OBLIGATION CONTAINED IN THIS AGREEMENT, AND (Y) TO THE FULLESTEXTENT PERMITTED BY LAW, ALL OTHER RIGHTS AND REMEDIES OF THE PARTIES ARISING UNDER OR IN CONNECTION WITH THISAGREEMENT ARE HEREBY WAIVED AND RELEASED; PROVIDED THAT NOTHING HEREIN SHALL LIMIT OR IMPAIR A PARTY'S RIGHTTO OBTAIN SPECIFIC PERFORMANCE OR OTHER INJUNCTIVE RELIEF WITH RESPECT TO ANY SUCH BREACH OF ANY SUCHREPRESENTATION, WARRANTY, COVENANT OR OBLIGATION.(g) Any indemnification payments under this Section 5.3 will be treated, for tax purposes, as adjustments to the Purchase Price.SECTION 5.4. Release of Guarantees. Purchaser agrees to use its commercially reasonable best efforts to cause the Bank to release infull, contingent upon and effective as of the Closing of this Agreement, all Liabilities, guarantees and other obligations of Seller and its Affiliates (other than theSubsidiaries) with respect to the Assumed Loans (including, without limitation, by means of providing substitute guarantees thereof from Purchaser). SECTION 5.5. Public Announcements. Seller and Purchaser shall consult with each other before issuing any press release or makingany other public statement with respect to this Agreement or the transactions contemplated hereby and, except as may be required by applicable laws or anylisting agreement with or rule of any securities exchange, neither Seller or Purchaser shall issue any such press release or make any such public statementwithout the consent of the other party. SECTION 5.6. Notifications. Each of Seller and Purchaser shall promptly notify the other of: (a) any notice or other communication from any person alleging that the consent of such person is or may be required in connection with thetransactions contemplated by this Agreement; (b) any notice or other communication from any governmental authority in connection with the transactions contemplated by this Agreement; (c) any actions, suits, claims, investigations or proceedings commenced or, to its knowledge, threatened against, relating to or involving or otherwiseaffecting Seller or any of its Subsidiaries or Purchaser, as the case may be, that, if pending on the date of 15Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. this Agreement, would have been required to have been disclosed pursuant to any Section of this Agreement; (d) any inaccuracy of any representation or warranty contained in this Agreement at any time during the term hereof that could reasonably be expectedto cause any of the conditions set forth in Article VI not to be satisfied; and (e) any failure of that party to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it hereunder. SECTION 5.7. No Solicitation. (a) Subject to Section 5.7(b), after the date hereof and prior to the earlier of the termination of thisAgreement pursuant to Article VII and the Effective Time, Seller and the Subsidiaries shall not, directly or indirectly, (i) solicit, initiate or knowingly take anyaction to facilitate or encourage the submission of any Acquisition Proposal, (ii) enter into or participate in any discussions or negotiations with, furnish anyinformation relating to Seller or any of the Subsidiaries or afford access to the business, properties, assets, books or records of Seller or any of theSubsidiaries to any third party with respect to inquiries regarding, or the making or, an Acquisition Proposal, (iii) fail to make, withdraw or modify theRecommendation of Seller's Board that stockholders vote in favor of Stockholder Approval, (iv) grant any waiver or release under any standstill or similaragreement with respect to any class of equity securities of Seller or any of its Subsidiaries, or (v) approve, recommend or enter into (or publicly propose to doany of the foregoing) any agreement in principle, letter of intent, merger agreement, acquisition agreement or similar instrument relating to an AcquisitionProposal. For purposes hereof, "Acquisition Proposal" means any offer, proposal or indication of interest by a third party relating to any transaction or seriesof transactions involving (A) any acquisition or purchase, directly or indirectly, of 15% or more of the consolidated assets of Seller and/or any of theSubsidiaries, (B) any tender offer or exchange offer that, if consummated, would result in a third party beneficially owning 15% or more of the votingsecurities of Seller, or (C) a merger, consolidation, share exchange, recapitalization or similar transaction involving Seller or any of the Subsidiaries. (b) Notwithstanding the foregoing:(i) Prior to the Seller Stockholder Meeting, Seller, directly or indirectly through its representatives, may (A) engage in negotiations ordiscussions with any third party that has made (and not withdrawn) after the date of this Agreement a bona fide, written Acquisition Proposal that(x) did not result from a breach or violation of the provisions of Section 5.7(a), and (y) the Seller's Board reasonably believes in good faith, afterconsulting with its outside legal and financial advisors, would reasonably be expected to lead to a Superior Proposal, and (B) thereafter furnish tosuch third party or its representatives or its financing sources non-public information relating to Seller or any of the Subsidiaries pursuant to aconfidentiality agreement (a copy of which shall be provided for informational purposes only to Purchaser) with such third party with terms no lessfavorable to Seller than those contained in Seller's confidentiality agreement with Purchaser and containing additional provisions that expresslypermit Seller to comply with the terms of this Section 5.7 if, in the case of either clause (A) or (B), the Seller's 16Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Board determines in good faith, after consultation with outside legal counsel, that the failure to take such action is reasonably likely to result in abreach of its fiduciary duties under applicable law and Seller shall have provided Purchaser two (2) business days notice of its intention to take anyaction discussed in clause (A) or (B); provided that all such information provided or made available to such third party (to the extent that suchinformation has not been previously provided or made available to Purchaser) is provided or made available to Purchaser prior to or substantiallyconcurrently with the time it is provided or made available to such third party.(ii) Prior to the Seller Stockholder Meeting, Seller may, following receipt of and on account of a Superior Proposal, terminate thisAgreement to enter into a definitive agreement with respect to, a Superior Proposal, or the Seller's Board may change its Recommendation inconnection with such Superior Proposal, if such Superior Proposal did not result from a breach or violation of the provisions of Section 5.7 and theSeller's Board reasonably determines in good faith, after consultation with outside legal and financial advisors, that in light of such SuperiorProposal, the failure of the Seller's Board to take such action is reasonably likely to result in a breach of its fiduciary duties under applicable law;provided, however, Seller shall not be entitled to terminate this Agreement or change the Seller's Board's Recommendation in connection with aSuperior Proposal unless (A) Seller promptly notifies Purchaser, in writing, at least five (5) business days (the "Notice Period") before making sucha change of Seller's Board Recommendation or terminating this Agreement to enter into (or causing a Subsidiary to enter into) a definitive agreementwith respect to a Superior Proposal, of its intention to take such action with respect to such Superior Proposal, which notice shall state expressly thatSeller has received an Acquisition Proposal that the Seller's Board has determined to be a Superior Proposal and that the Seller's Board intends tochange its Recommendation and/or Seller intends to terminate this Agreement to enter into a definitive agreement with respect to such SuperiorProposal; (B) Seller attaches to such notice the most current version of the proposed agreement and the identity of the third party making suchSuperior Proposal; (C) during the Notice Period, if requested by Purchaser, Seller has, and has directed its representatives to, engaged in negotiationswith Purchaser in good faith to amend this Agreement or increase the Purchase Price in such a manner that such Superior Proposal ceases toconstitute a Superior Proposal; and (D) following the Notice Period, the Seller's Board shall have determined in good faith, taking into account anychanges to this Agreement or increase to the Purchase Price made or proposed in writing by Purchaser, that such Superior Proposal continues toconstitute a Superior Proposal; provided, however that with respect to any applicable Superior Proposal, any amendment to the financial terms orany other material amendment to a term of such Superior Proposal shall require a new written notice by Seller and a new Notice Period, and no suchtermination of this Agreement by Seller or change in the Seller's Board's Recommendation in connection with such Superior Proposal may be madeduring any Notice Period.(c) Seller and the Seller's Board shall not take any of the actions referred to in Section 5.7 (b) unless Seller shall have first complied with theapplicable requirements of this Section 5.7 (c). Seller shall notify Purchaser promptly (but in no event later than 24 hours) after receipt by 17Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Seller (or any of its representatives) of any Acquisition Proposal, including the material terms and conditions thereof and the identity of the person makingsuch Acquisition Proposal and its proposed financing sources, and shall keep Purchaser reasonably informed on a prompt basis (but in any event no laterthan 24 hours) as to the status (including changes or proposed changes to the material terms) of such Acquisition Proposal. Seller shall also notify Purchaserpromptly (but in no event later than 24 hours) after receipt by Seller of any request for non-public information relating to Seller or any of the Subsidiaries orfor access to the business, properties, assets, books or records of Seller or any of the Subsidiaries by any third party that has informed Seller that it isconsidering making, or has made, an Acquisition Proposal.(d) Definition of Superior Proposal. For purposes of this Agreement, "Superior Proposal" means a bona fide, unsolicited written AcquisitionProposal (provided that, for the purposes of this definition, references to "15%" in the definition of Acquisition Proposal shall be deemed replaced withreferences to "100%") that (i) is not subject to any financing condition and for which financing has been fully committed or is on hand (with respect to whichPurchaser has received written evidence of such person's ability to fully finance its Acquisition Proposal), (ii) the Seller's Board determines in good faith, afterconsidering the advice of its outside counsel and its financial advisor, is reasonably likely to be consummated in accordance with its terms, taking intoaccount all aspects of the proposal and the identity of the person making the Acquisition Proposal, and (iii) the Seller's Board determines in good faith, afterconsidering the advice of its financial advisor, would result in a transaction more favorable, from a financial point of view to Seller's stockholders than thetransactions contemplated by this Agreement and the Additional Purchase Agreements (taken as a whole), after taking into account any amendment to thisAgreement or increase the Purchase Price proposed by Purchaser.ARTICLE VICLOSING CONDITIONSSECTION 6.1. (a) The obligation of Purchaser to purchase the Shares from Seller is subject to the satisfaction, or waiver by Purchaser, ofthe following conditions: (i) The representations and warranties of Seller set forth herein shall be true and correct in all material respects on and as of theClosing Date as if made on and as of such date. Seller shall have timely performed all of its obligations hereunder to be performed by it on or prior tosuch date. Seller shall at Closing have delivered to Purchaser a certificate to the foregoing effect and to the effect that all other conditions to theClosing to be satisfied by Seller have been satisfied;(ii) The Stockholder Approval shall have been obtained and all other necessary approvals, authorizations, consents or waivers fromany governmental authority shall have been obtained on terms reasonably acceptable to the Purchaser;(iii) Any required consent with respect to the Assumed Loans shall have been obtained on terms reasonably acceptable to Purchaser(Purchaser having, prior to execution of this Agreement, seen the consents or proposed consent terms of such parties and determined them to besatisfactory) and satisfactory evidence thereof shall have been provided to Purchaser, including definitive documentation providing for assumptionby 18Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Purchaser of the Assumed Loans as of the Closing Date;(iv) Any required consent of the Charterers under existing charters for the Vessels shall have been obtained on terms reasonablyacceptable to Purchaser (Purchaser having, prior to execution of this Agreement, seen the consents or proposed consent terms of such parties anddetermined them to be satisfactory) and satisfactory evidence thereof shall have been provided to Purchaser;(v) Seller shall at Closing have tendered stock certificates evidencing the Shares, duly endorsed in blank and free and clear of anyLiens other than other than Liens securing the Assumed Loans;(vi) The officers and directors of each of the Subsidiaries shall have tendered their resignations;(vii) Each of the Contracts listed on Schedule C hereto shall have been terminated without cost to Purchaser or any of the Subsidiaries;(viii) Seller shall have taken all actions necessary to assume, and shall have assumed, all Excluded Liabilities from the Subsidiaries;(ix) During the period from the date of this Agreement until the Closing, no event has occurred that has had, or could reasonably beexpected to have, a Material Adverse Effect on the Subsidiaries, taken as a whole; or(x) There shall be pending no litigation against any of Seller, Purchaser or any Subsidiary seeking to delay or enjoin the transactionscontemplated hereby or by the Additional Purchase Agreements or which, if decided adversely to Seller or any Subsidiary, would have a MaterialAdverse Effect on any of them; and(xi) No default by the Seller or breach of any representation, warranty, covenant or agreement by the Seller shall exist under anAdditional Purchase Agreement nor shall any Additional Purchase Agreement have been terminated.(b) The obligation of Seller to sell the Shares to Purchaser is subject to the satisfaction, or waiver by Seller, of the following conditions:(i) The representations and warranties of Purchaser set forth herein shall be true and correct in all material respects on and as of theClosing Date as if made on and as of such date. Purchaser shall have timely performed all of its obligations hereunder to be performed by it on orprior to such date. Purchaser shall have delivered to Seller a certificate to the foregoing effect and to the effect that all other conditions to the Closingto be satisfied by Purchaser have been satisfied;(ii) The Stockholder Approval shall have been obtained and all necessary approvals, authorizations, consents or waivers from anygovernmental authority shall 19Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. have been obtained;(iii) Purchaser shall at Closing have tendered to Seller payment in full of the Cash Consideration for the Shares;(iv) Seller shall have received evidence reasonably satisfactory to Seller that the Bank has released in full all Liabilities, guarantees andother obligations of Seller and its Affiliates (other than the Subsidiaries) with respect to the Assumed Loans; and(v) There shall be pending no litigation against any of Seller, Purchaser or any Subsidiary seeking to delay or enjoin the transactionscontemplated hereby.ARTICLE VIITERMINATION AND AMENDMENT SECTION 7.1. Termination. This Agreement may be terminated at any time: (a) by mutual written consent of Purchaser and Seller;(b) by either Purchaser or Seller if (i) there has been a breach of any representation, warranty, covenant or agreement on the part of the otherparty set forth in this Agreement which breach has not been cured within five business days following receipt by the breaching party of notice of such breachand which breach is reasonably likely to have a Material Adverse Effect, or (ii) if any permanent injunction or other order of a court or other competentauthority preventing the consummation of the transactions contemplated hereby shall have become final and non-appealable;(c) by Seller, prior to receipt of the Stockholder Approval, in accordance with Section 5.7(b), provided that Seller pays to Purchaser theTermination Fee amount due pursuant to Section 7.5(b) in accordance with the terms specified therein, and immediately following termination of thisAgreement Seller (or its Subsidiaries) enters into a definitive agreement with respect to a Superior Proposal;(d) by Purchaser, if an Additional Purchase Agreement has been terminated and if Seller was obligated to pay Purchaser a termination fee as aresult of such termination under such terminated Additional Purchase Agreement, Seller shall pay to Purchaser the Termination Fee amount due pursuant toSection 7.5(b) hereof in accordance with the terms specified therein upon termination of this Agreement pursuant to this Section 7.1(d);(e) by either Purchaser or Seller if, for any reason, the Closing shall not have occurred on or before May 30, 2014; provided, however, that theright to terminate this Agreement under this Section 7.1(d) shall not be available to any party whose failure to fulfill any obligation under this Agreement hasbeen the cause of, or resulted in, the failure of the Closing to have occurred on or prior to such date; or(f) by either Purchaser or Seller if any required approval of the stockholders of Seller of this Agreement and the transactions contemplatedhereby shall not have obtained by reason of 20Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. the failure to obtain the required affirmative vote at a duly held meeting of stockholders or at any adjournment thereof.SECTION 7.2. Effect of Termination. In the event of termination of this Agreement by either Seller or Purchaser as provided in Section7.1, this Agreement shall forthwith become void and there shall be no liability or obligation on the part of Purchaser or Seller or their respective officers ordirectors except (y) with respect to Sections 4.14, 7.5 and this Section 7.2 and (z) to the extent that such termination results from the willful breach by a partyhereto of any of its representations, warranties, covenants or agreements set forth in this Agreement. SECTION 7.3. Amendment. This Agreement may be amended by the parties hereto at any time before or after any required approval ofthis Agreement and the transactions contemplated hereby by the stockholders of Seller, but, after any such approval, no amendment shall be made which bylaw requires any further approval by such stockholders without such further approval. This Agreement may not be amended except by an instrument inwriting signed on behalf of each of the parties hereto. SECTION 7.4. Extension; Waiver. Any party may: (a) extend the time for the performance of any of the obligations or other acts of theother party hereto, (b) waive any inaccuracies in the representations and warranties of the other party contained herein or in any document delivered pursuanthereto and (c) waive compliance by the other party with any of the agreements, covenants or conditions contained herein. Any agreement on the part of a partyhereto to any such extension or waiver shall be valid only if set forth in a written instrument signed on behalf of such party, and no such extension or waivershall be construed as an extension or waiver of any other obligation, inaccuracy or compliance with any other provision. SECTION 7.5. Fees and Expenses. (a) Except as otherwise expressly provided herein, all costs and expenses incurred in connectionwith this Agreement and the transactions contemplated hereby shall be paid by the party incurring such expense; provided, however, that Purchaser agrees topay all legal fees and expenses incurred in connection with the preparation, negotiation and execution of definitive documentation providing for the assumptionby Purchaser of the Assumed Loans. (b) If this Agreement is terminated by Seller pursuant to Section 7.1(c) or, if applicable, Section 7.1(d), then Seller shall pay to Purchaser, inimmediately available funds, the Termination Fee at the time of such termination. "Termination Fee" means $166,667. Purchaser agrees that, upon anytermination of the Agreement under circumstances where the Termination Fee is payable by Seller and such Termination Fee is paid in full, Purchaser shall beprecluded from any other remedy against Seller, at law in equity or otherwise, and Purchaser shall not seek any other recovery, judgment or damages of anykind.SECTION 7.6. Further Assurances. At any time and from time to time both before and after the Closing, the parties agree to cooperatewith each other, to execute and deliver such other documents, instruments of transfer or assignment, files, books and records and do all such further acts andthings as may be necessary or desirable to carry out the transactions contemplated hereunder. 21Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. ARTICLE VIIIMISCELLANEOUS SECTION 8.1. Governing Law and Choice of Forum. This Agreement shall be governed by and construed under the law of the State ofNew York without regard to its choice of law provisions. Any proceeding commenced by either party hereto seeking to enforce any provision of, or arising outof or relating to this Agreement or the transactions contemplated hereby shall be brought in New York state or federal court located in New York County in theState of New York, and each of the parties hereby irrevocably consents to the exclusive jurisdiction of such courts in any such proceeding and irrevocablyvaries, to the fullest extent permitted by law, any objection it may now or hereafter have to the laying of the venue of such proceeding in any such court of thatany such proceeding brought in any such court has been brought in an inconvenient forum. SECTION 8.2. Assignment. Neither this Agreement nor any right, remedy, obligation or liability arising hereunder shall be assignable byeither Seller or Purchaser without the other's prior written consent. SECTION 8.3. Notices. All notices, requests, claims, demands and other communications required or permitted to be given hereunderwill be in writing and will be given when delivered by hand or sent by registered or certified mail (postage prepaid, return receipt requested) or by overnightcourier (providing proof of delivery) or by telecopy (providing confirmation of transmission). All such notices, requests, claims, demands or othercommunications will be addressed as follows: (a) if to Purchaser, to: AMCI Products Limitedc/o AMCI Poseidon475 Steamboat Road, 2nd FloorGreenwich, CT 06830Telephone No.: +1 (203) 531-3820Fax No.: +1 203-625-9231Attention: Chief Executive OfficerWith a copy to:Morgan, Lewis & Bockius LLP101 Park AvenueNew York, New York 10178Telephone No.: (212) 309-6050Fax No.: (212) 309-6001Attention: Stephen P. Farrell(b) If to Seller, to: Top Ships Inc. 22Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 1 Vass Sofias, Maroussi 15124GreeceTelephone No.: 011-30-210-8128182Fax No.: 011-30-210-6141272Attention: Alexandros Tsirikos, Chief Financial OfficerWith a copy to:Seward & Kissel LLPOne Battery Park PlazaNew York, New York 10004Telephone No.: (212) 574-1223Fax No.: (212) 480-8421Attention: Gary J. Wolfe or such other address as Seller or Purchaser shall have specified to the other party in writing in accordance with Section 8.3. SECTION 8.4. Binding Effect. The provisions of this Agreement shall be binding upon and accrue to the benefit of the parties hereto andtheir respective heirs, legal representatives, successors and permitted assigns. SECTION 8.5. Section and Other Headings; Interpretation. The section and other headings herein are for convenience of referenceonly, do not constitute part of this Agreement and shall not be deemed to limit or otherwise affect any of the provisions hereof. SECTION 8.6. Counterparts. This Agreement may be executed in counterparts, each of which when so executed and delivered shall bedeemed to be an original and all of which together shall be deemed to be one and the same agreement. SECTION 8.7. Entire Agreement; Waiver, Amendment. This Agreement contains the entire agreement of the parties with respect to thesubject matter hereof and supersedes any and all prior agreements, understandings or undertakings, written or oral. Neither this Agreement nor any provisionhereof shall be waived, amended, modified, changed, discharged or terminated except by an instrument in writing, signed by the party against whom anywaiver, amendment, modification, change, discharge or termination is sought. [Signature page follows] 23Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the date first above written. TOPS SHIPS INC. By:/s/ Alexandros Tsirikos Name:Alexandros Tsirikos Title:Attorney-in-fact AMCI PRODUCTS LIMITED By:/s/ Stamatis Molaris Name:Stamatis Molaris Title:Director 24Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Schedule A1. Lichtenstein Shipping Company Limited (owner of the Lichtenstein) 25Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Schedule BCash ConsiderationAn amount equal to $35,000,000 minus (a) the outstanding debt under the loan agreements of the Subsidiaries or of the Seller in relation to the Subsidiaries orthe Vessels as of the Closing Date, plus (b) the retention cash under each such loan agreement as of the Closing Date (the sum of (a) and (b), the "Net AssumedLoan Amount"). 26Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Schedule CContracts to be Terminated-Management Agreements between the Subsidiaries and Central Mare-All other Related Party Agreements, other than the ship brokerage agreement with Central Shipbroking Limited set forth on Schedule 4.10 to the SellerDisclosure Schedule with respect to the existing bareboat charter for the Vessel 27Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Schedule DSeller Shareholder Voting AgreementsSovereign Holdings Inc.[Evangelos Pistiolis] 28Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Exhibit A[Form of Voting Agreement]VOTING AGREEMENT September ___, 2013AMCI Products Limitedc/o AMCI Poseidon475 Steamboat Road, 2nd FloorGreenwich, CT 06830Re: Voting of Common Stock of Top Ships Inc.Gentlemen:In order to induce AMCI Products Limited ("Purchaser") to execute and deliver those certain Stock Purchase Agreements, each dated as of September5, 2013 (the "Stock Purchase Agreements"), by and between Top Ships Inc. ("Seller") and Purchaser pursuant to which Seller is selling all of the outstandingCommon Stock and other securities of certain of its subsidiaries to Purchaser, the undersigned is entering into this agreement with Purchaser. The undersigned beneficially owns ____ shares of Common Stock of Seller. The undersigned hereby revokes any and all proxies and votingagreements it has heretofore given or entered into with respect to such shares of Common Stock and other securities. Until such time as any of the Stock Purchase Agreements are terminated in accordance with their terms (at which time this voting agreement shallalso terminate), the undersigned hereby agrees to vote, or cause to be voted, at each meeting of stockholders of Seller (or pursuant to any written consent of thestockholders of Seller) at which such stockholders consider a proposal to approve any of the Stock Purchase Agreements and the transactions contemplatedthereby, all shares of Common Stock beneficially owned by it, in favor of such proposal and against any other proposal which might delay or inhibit orconflict with the transactions contemplated by the Stock Purchase Agreements. Prior to the earlier of the completion of the Closing under each of the Stock Purchase Agreements and the termination of each of the Stock PurchaseAgreements in accordance with their respective terms, the undersigned will not sell or dispose of any shares of Common Stock it beneficially owns or engagein any other transaction which would impair its ability to fulfill its obligations hereunder. 29Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. The voting agreement contained herein may not be revoked, except by an amendment, modification or termination signed by each of the partieshereto. The invalidity or unenforceability of any provision of this Voting Agreement shall not affect the validity or enforceability of any other provision ofthis Voting Agreement. In addition to any and all other remedies that may be available at law in the event of any breach of this Voting Agreement, each partyhereto shall be entitled to specific performance of the agreements and obligations hereunder of the parties hereto and to such other injunctive or other equitablerelief as may be granted by a court of competent jurisdiction. This Voting Agreement shall be governed by and construed in accordance with the laws of the Republic of the Marshall Islands. This Voting Agreement may be signed in counterparts, each of which shall be an original and all of which together shall constitute one and the sameinstrument. * * *IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written. [Stockholder] By: Name: Title: ACCEPTED:AMCI Products Limited By: Name:Title: 30 Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.[Top Ships Letterhead] October 10, 2013AMCI Products Limitedc/o AMCI Poseidon475 Steamboat Road, 2nd FloorGreenwich, CT 06830 Re:Stock Purchase Agreement (the "Lichtenstein SPA") dated September 5, 2013 between Top Ships Inc. and AMCI Products Limited for the purchase and sale of Lichtenstein Shipping Company Limited Dear Sirs:Reference is made to the Lichtenstein SPA. Capitalized terms used herein shall have the meanings ascribed to such terms in theLichtenstein SPA. The parties desire to amend the Lichtenstein SPA as reflected herein. Section 2.4(f) of the Lichtenstein SPA is hereby amended to read in its entirety as follows: "(f) (i) On the first to occur of (A) the date of the closing of the direct or indirect sale by Purchaser of the Evian or of Jeke ShippingCompany Limited, or (B) March 31, 2014, Purchaser will (unless the Alpha Bank Credit Facility has been repaid in full by such date) deposit $1,000,000(the "Alpha Bank Escrow Amount") into an escrow account. (ii) If Bank has provided its consent to the transactions contemplated by this Agreement in accordance with Section 6.1(a)(iii) on or priorto March 31, 2014, the Alpha Bank Escrow Amount shall be (x) released to Purchaser upon full repayment of the credit facility secured by a first prioritymortgage over the Vessel (the "Alpha Bank Credit Facility"), provided such repayment occurs on or prior to March 31, 2014, or (y) released and paid to Selleron April 1, 2014 if the Alpha Bank Credit Facility has not been repaid in full prior to that date. (iii) If Bank has not provided its consent to the transactions contemplated by this Agreement in accordance with Section 6.1(a)(iii) on orprior to March 31, 2014, the Alpha Bank Escrow Amount shall be (x) released to Purchaser upon full repayment of the Alpha Bank Credit Facility, providedsuch repayment occurs on or prior to April 30, 2014, or (y) released and paid to Seller on May 1, 2014 if the Alpha Bank Credit Facility has not been repaidin full prior to that date." Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.AMCI Product LimitedPage 2 Except as amended herein, the Lichtenstein SPA is hereby ratified and confirmed, and shall continue in full force and effect subject to itsoriginal terms and conditions as amended hereby. Please execute and deliver a copy of this letter agreement to confirm your agreement to the foregoing. Very truly yours, TOP SHIPS INC. By: /s/ Evangelos Pistiolis DirectorConfirmed and Agreed:AMCI PRODUCTS LIMITEDBy: /s/ Stamatis V. Molaris Stamatis V. MolarisDirectorSource: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Exhibit 4.23 MEMORANDUM OF AGREEMENT Dated: 5 December 2013Norwegian Shipbroker' Association'sMemorandum of Agreement for saleand purchase of ships. Adopted byThe Baltic and InternationalMaritime Council (BIMCO) in 1956.Code-nameSALEFORM 1993Revised 1966, 1983 and 1986/87. Monte Carlo 37 Shipping Company Limited of Marshall Islands Hereinafter called the Sellers, have agreed to sell, and Top Ships Inc. of Marshall Islands or nominee Hereinafter called the Buyers, have agreed to buy Name: Hull Nr S418 Classification Society/Class: ABSBuilt: By: Hyundai Mipo Dockyard Co., Ltd Flag: Place of registration: Call Sign: Grt/Nrt: Register IMO Number: Hereinafter called the Vessel, on the following terms and conditions: Definition "Banking days" are days on which banks are open both in the country of the currency stipulated for the Purchase Price in Clause 1 and in the place of closing stipulated in Clause 8. "In writing" or "written" means a letter handed over from the Sellers to the Buyers or vice versa,a registered letter, telex, telefax or other modern form of written communication. "Classification Society" or "Class" means the Society referred to in line 4. 1. Purchase price Thirty Five Million US Dollars ($35,000,000) 2. Deposit As security for the correct fulfilment of this Agreement the Buyers shall pay a deposit of 10% 20%(twenty ten percent) of the Purchase Price, i.e. Seven Million US Dollars ($7,000,000) within -3 bankingdays —from the date of this Agreement. This deposit shall be paid as follows: deposit shall be refundedwitplaced withALPHA BANK AESHIPPING FINANCE DIVISION89, AKTI MIAOULI185-38 PIRAEUS GREECESWIFT: CRBAGRAAXXXBENEFICIARY: MONTE CARLO 37 SHIPPING COMPANY LIMITEDACCOUNT No: 960-01-5006022056IRAN: GR60 0140 9600 9600 1500 6022 056USD CORRESPONDENT: CITIBANK NA 399 PARK AVENUENEW YORK, N.Y 10022 USASWIFT: CITIUS33XXX1 2 3 4 5 6 7 8 9 10 1112 1314 15 16 17 181920 21222324 25 26 272829 Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. and held by them into a joint account for the Sellers and the Buyers, to be released in accordance withjoint written instructions of the Sellers and the Buyers. interest, if any, to be credited to the Buyers. Anyfee charged for holding the said deposit shall be borne equally by the Sellers and the Buyers. 3. Payment The balance of the Purchase Price shall be paid in full free of bank charges toAcount to be nominated on delivery of vessel, but not later than 3 banking days after the Vessel is in every respect physicallyready for delivery in accordance with the terms and conditions of this Agreement andNotice of Readiness has been given in accordance with clause 5. The buyer has the right to make thedelivery payment directly to the shipyard as per the Shipbuilding Contract dated 11 Oct 2013. 4. a)* b)* * 5.Inspections Buyer has the right to inspect the vessel at any time during the construction period of thevessel at Vinashin Shipyard.The Buyers have inspected and accepted the Vessel's classification records. The Buyers havealso inspected the Vessel at/in onand have accepted the Vessel following this inspection and the sale is outright and definite,subject only to the terms and conditions of this Agreement. The Buyers shall have the right to inspect the Vessel's classification records and declarewhether same are accepted or not within The Seller shall provide for inspection of the Vessel at/in The Buyers shall undertake the inspection without undue delay to the Vessel. Should theBuyers cause undue delay they shall compensate the Sellers for the losses thereby incurred.The Buyers shall inspect the Vessel without opening up and without cost to the Sellers.During the inspection, the Vessel's deck and engine log books shall be made available forexamination by the Buyers. If the Vessel is accepted after such inspection, the sale shallbecome outright and definite, subject only to the terms and conditions of this Agreement,provided the Sellers receive written notice of acceptance from the Buyers within 72 hoursafter completion of such inspection.Should notice of acceptance of the Vessel's classification records and of the Vessel not bereceived by the Sellers as aforesaid, the deposit together with interest earned shall bereleased immediately to the Buyers, whereafter this Agreement shall be null and void. 4a) and 4b) are alternatives; delete whichever is not applicable. In the absence of deletions,alternative 4a) to apply. Notice, time and place of delivery30 31323334 3536 37 3839404142434445464748 4950 5152 a) b) c) The Sellers shall keep the Buyers well informed of the Vessel's construction process andshall deliver the vessel simultaneously with the delivery of the vessel from the yard to theSeller. itinerary and shallprovide the Buyers with and days notice of the estimated time of arrival at the intended placeof drydocking/underwater inspection/delivery. When the Vessel is at the place of delivery andin every respect physically ready for delivery in accordance with this Agreement, the Sellersshall give the Buyers a written Notice of Readiness for delivery. The Vessel shall be delivered and taken over at Vinashin Shipyard safely afloat at a safe andaccessible berth or anchorage at/in as per shipbuilding contract dated 11 Oct 2013which the Buyer has seen and acknowledges in the Sellers' option. Expected time of delivery: by 15 August 2015 permissible and non permissible delays as per shipbuilding contract dated 11 Oct 2013 which the Buyer has seen andacknowledges.53545556 5758 59 60 61 6263646566Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.67 Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Date of cancelling (see clauses 5 c),6 b) (iii)and 14): as per shipbuilding contract dated 11Oct 2013 which the Buyer has seen and acknowledges. If the Sellers anticipate that, notwithstanding the exercise of clue diligence by them, theVessel will not be ready for delivery by the cancelling date they may notify the Buyers inwriting stating the date when they anticipate that the Vessel will be ready for delivery andpropose a new cancelling date, Upon receipt of such notification the Buyers shall have theoption of either cancelling this Agreement in accordance with Clause 14 within 7 runningdays of receipt of the notice or of accepting the new date as the new cancelling date. If theBuyers have not declared their option within 7 running days of receipt of the Sellers'notification or if the Buyers accept the new date, the date proposed in the Sellers' notificationshall be deemed to be the new cancelling date and shall be substituted for the cancelling datestipulated in line 61.If this Agreement is maintained with the new cancelling date all other terms and conditionshereof including those contained in Clauses 5 a) and 5 c) shall remain unaltered and in fullforce and effect. Cancellation or failure to cancel shall be entirely without prejudice to anyclaim for damages the Buyers may have under Clause 14 for the Vessel not being ready bythe original cancelling date.68697071 7273747576 d) 6. a)** b)**Should the Vessel become an actual, constructive or compromised total loss before deliverythe deposit shall be refunded immediately to the Buyerswhereafter this Agreement shall be null and void. Drydocking/Divers Inspection The Sellers shall place the Vessel in drydock at the port of delivery for inspection by theClassification Society of the Vessel' s underwater parts below the deepest load line, theextent of the inspection being in accordance with Classification Society's rules. If therudder, propeller, bottom or other underwater parts below the deepest load line are foundbroken, damaged or defective so as to affect the Vessel' s class, such defects shall be madegood at the Sellers' expense to the satisfaction of the Classification Society withoutcondition/recommendation*. (i) The Vessel is to be delivered without drydocking. However, the Buyers shallhave the right at their expense to arrange for an underwater inspection by a diver approvedby the Classification society prior to the delivery of the Vessel. The Sellers shall at theircost make the Vessel available for such inspection. The extent of the inspection and theconditions under which it is performed shall be to the satisfaction of the ClassificationSociety. If the conditions at the port of delivery are unsuitable for such inspection, theSellers shall make the Vessel available at a suitable alternative place near to the deliveryport. (ii) If the rudder, propeller, bottom or other underwater parts below the deepest load lineare found broken, damaged or defective so as to effect the Vessel's class, then unlessrepairs can be carried out afloat to the satisfaction of the Classification society, the Sellersshall arrange for the Vessel to be drydocked at their expense for inspection by theClassification society of the Vessel' s underwater parts below the deepest load line, theextent of the inspection being in accordance with the Classification Society's rules. If therudder, propeller, bottom or other underwater parts below the deepest load line are foundbroken, damaged or defective so as to effect the Vessel' s class, such defects shall be madegood by the Sellers at their expense to the satisfaction of the classification societywithout condition/recommendation*. In such event the Sellers are to pay also for the cost ofthe underwater inspection and the Classification Society's attendance. (iii) If the Vessel is to be drydocked pursuant to Clause 6 b) (ii) and no suitable dry-docking facilities are available at the port of delivery, the Sellers shall take the Vesselto a port where suitable drydocking facilities are available ,whether within or outside thedelivery range as per Clause 5 b). Once drydocking has taken place the Sellers shall deliverthe Vessel at a port within the delivery range as per clause 5 b) which shall, for thepurpose of this clause, become the new port of delivery. In such event the cancelling date777879 80 81828384858687 8889909192939495 96979899100101102103104105106 107108109110111112Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. c)provided for in clause 5 b) shall be extended by the additional time required for thedry-docking and extra steaming, but limited to a maximum of 14 running days. If the vessel is drydocked pursuant to Clause 6 a) or 6 b) above (i) the Classification Society may require survey of the tailshaft system, the extent ofthe survey being to the satisfaction of the Classification surveyor. If such survey is notrequired by the Classification Society, the Buyers shall have the right to require the tailshaftto be drawn and surveyed by Classification Society, the extent of the survey being inaccordance with the Classification Society's rules for tailshaft survey and consistent withthe current stage of the Vessel survey cycle. The Buyers shall declare whether theyrequire the tailshaft to be drawn and surveyed not later than by the completion of theinspection of the Classification Society. The drawing and refitting of the tailshaft shall bearranged by the Sellers. Should any parts of the tailshaft system be condemned or founddefective so as to effect the Vessel' s class, those parts shall be renewed or made good atthe Sellers' expense to the satisfaction of the Classification Society withoutcondition/recommendation*.113114 115 116117118119120121122123124125126127 (ii) the expenses relating to the survey of the tailshaft system shall be borneby the Buyers unless the Classification Society requires such survey to be carried out , inwhich case the Sellers shall pay these expenses. The Sellers shall also pay the expensesif the Buyers require the survey and parts of the system are condemned or found defectiveor broken so as to effect the vessel' s class*. (iii) the expenses in connection with putting the Vessel in and taking her outof drydock, including the drydock dues and the Classification Society' s fees shall be paid bythe Sellers if the Classification Society issues any condition/recommendation* as a resultof the survey or if it requires survey of the tailshaft system. In all other cases the Buyersshall pay the aforesaid expenses, dues and fees. (iv) the Buyers' representative shall have the right to be present in the drydock, butwithout interfering with the work or decisions of the Classification surveyor. (v) the Buyers shall have the right to have the underwater parts of the Vesselcleaned and painted at their risk and expense without interfering with the Sellers' or theClassifications surveyor's work, if any, and without affecting the Vessel' s timely delivery. If,however, the Buyers' work in drydock is still in progress when the Sellers havecompleted the work which the Sellers are required to do, the additional docking timeneeded to complete the Buyers' work shall be for the Buyers' risk and expense. In the event that the Buyers' work requires such additional time, the Sellers may upon completion of theSellers' work tender Notice of Readiness for delivery whilst the Vessel is still in drydockand the Buyers shall be obliged to take delivery in accordance with Clause 3 , whetherthe vessel is in drydock or not and irrespective of Clause 5 b). * Notes, if any, in the surveyor's report which are accepted by the classification Societywithout condition/recommendation are not to be taken into account. ** 6a)and 6 b) are alternatives; delete whichever is not applicable. In the absence of deletions,alternative 6 a) to apply. 7. Spares/bunkers, etc. as per shipbuilding contract dated 3 December 2012.The Sellers shall deliver the Vessel to the Buyers with everything belonging to her on board and on shore.All spare parts and spare equipment including spare tail-end shaft(s) and/or spare propeller(s)/propellerblade(s), if any, belonging to the Vessel at the time of inspection used orunused, whether on board or not shall become the Buyers' property, but spares on order are to be excluded. Forwarding charges, if any, shall be for the Buyers' account. The Sellers are not required toreplace spare parts including spare tail-end shaft(s) and spare propeller(s)/propeller blade(s) which128129130131132 133134135136137 138139 140141142143144145146147148149 150151 152153 154 155156157158159160161 Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. are taken out of spare and used as replacement prior to delivery, but the replaced items shall be the property of the Buyers. The radio installation and navigational equipment shall be included in the salewithout extra payment if they are the property of the Sellers. Unused stores and provisions shall beincluded in the sale and be taken over by the Buyers without extra payment. The Sellers have the right to take ashore crockery, plates, cutlery, linen and other articles bearing theSeller's flag or name, provided they replace same with similar unmarked items. Library, forms, etc.,exclusively for use in the Sellers' vessel(s),shall be excluded without compensation. Captain'sOfficers' and Crew's personal belongings including the slop chest are to be excluded from the sale,as well as the following additional items (including items on hire): The Buyers shall take over the remaining bunkers and unused lubricating oils in storage tanks andsealed drums and pay the current net marked price (excluding barging expenses) at the port and dateof delivery of the Vessel.Payment under this Clause shall be made at the same time and place and in the same currency asthe Purchase Price.162163164 165166167168169 170171172173174 8. Documentation. The place of closing : ULSAN KOREA or Vietnam or Athens In exchange for payment of the Purchase Price the Sellers shall furnish the Buyers with deliverydocuments, namely: a) Legal Bill of Sale in a form recordable in the country in which the Buyers are to register the Vessel, warranting that the Vessel is free from all encumbrances,mortgages and maritime liens or any other debts or claims whatsoever, duly notarially attested and legalized by the consul of such country or other competent authority. b) Current Certificate of Ownership issued by the competent authorities of the flag state of the Vessel. c) Confirmation of Class issued within 72 hours prior to delivery. d) Current Certificate issued by the competent authorities stating that the Vessel is free from register encumbrances. e) Certificate of deletion of the Vessel from the Vessel' s registry or other official evidence of deletion appropriate to the Vessel' s registry at the time of delivery, or, in the event that the registry does not as a matter of practice issue such documentation immediately, a written undertaking by the Sellers to effect deletion from the Vessel' s registry forthwith and furnish a Certificate or other official evidence of deletion to the Buyers promptly and latest within 4 (four) weeks after the purchase Price has been paid and the Vessel has been delivered. f) Any such additional documents as may reasonably be required by the competent authorities for the purpose of registering the Vessel provided the Buyers notify the Sellers of any such documents as soon as possible after the date of this Agreement. At the time of delivery the Buyers and Sellers shall sign and deliver to each other a Protocol ofDelivery and Acceptance confirming the date and time of delivery of the Vessel from theSellers to the Buyers. At the time of delivery the Sellers shall hand to the Buyers the classification certificate(s) aswell as all plans etc., which are on board the Vessel. Other certificates which are on board theVessel shall alsobe handed over to the Buyers unless the Sellers are required to retain same, inwhich casethe Buyers to have the right to take copies. Other technical documentation which maybe in the Sellers' possession shall be promptly forwarded to the Buyers at Buyers expense, ifthey so request. The Sellers may keep the Vessel' s log books but the Buyers to have the right to takecopies of same.175 176 177178 179180181182 183184 185 186187 188189190191192193 194195196 197198199 200201202203204205206 Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 9. Encumbrances The Sellers warrant that the Vessel, at the time of delivery, is free from all charters, encumbrances,mortgages and maritime liens or any other debts whatsoever. The Sellers hereby undertaketo indemnify the Buyers against all consequences of claims made against the Vessel which havebeen incurred prior to the time of delivery. 10. Taxes,etc. Any taxes, fees and expenses in connection with the purchase and registration under the Buyers' flagshall be for the Buyers account, where as similar charges in connection with the closing of the Sellers'register shall be for the Sellers' account.207 208209210211 212 213214215 11. Condition on delivery The Vessel with everything belonging to her shall be at the Sellers' risk and expense until she isdelivered to the Buyers, but subject to the terms and conditions of this Agreements she shall bedelivered and taken over as she was at the time of inspection, fair wear and tear excepted.However, the Vessel shall be delivered with her class maintained without condition/recommendation*,free of average damage affecting the Vessel's class, and with her classification certificates andnational certificates, as well as all other certificates the Vessel had at the time of inspection, valid andunextended without condition/recommendation* by Class or relevant authorities at the time ofdelivery."Inspection" in this Clause 11, shall mean the Buyers' inspection according to Clause 4 a) or 4 b), ifapplicable, or the buyers inspection prior to the signing of this Agreement. If the Vessel istaken over without inspection, the date of this Agreement shall be the relevant date. * Notes, if any, in the surveyor' s reports which are accepted by the Classification Society without condition/recommendation are not to be taken into account. 12. Name/markings Upon delivery the Buyers undertake to change the name of the Vessel and alter funnel markings. 13. Buyers' default Should the deposit not be paid in accordance with Clause 2, the Sellers have the right to cancel thisAgreement, and they shall be entitled to claim compensation for their losses and for all expensesincurred together with interest.Should the Purchase Price not be paid in accordance with Clause 3, the Sellers have the right tocancel the Agreement, in which case the deposit together with interest earned shall be released to theSellers. If the deposit does not cover their loss , the Sellers shall be entitled to claim furthercompensation for their losses and for all expenses incurred together with interest. 14. Sellers' default Should the Sellers fail to give Notice of Readiness in accordance with Clause 5 a) or fail to be readyto validly complete a legal transfer by the date stipulated in line 63 the Buyers shall havethe option of cancelling this Agreement provided always that the Sellers shall be granted amaximum of 3 banking days after Notice of Readiness has been given to make arrangementsfor the documentation set out in Clause 8. If after Notice of Readiness has been given but beforethe Buyers have taken delivery, the Vessel ceases to be physically ready for delivery and is notmade physically ready again in every respect by the date stipulated in line 63 and new Notice ofReadiness given, the Buyers shall retain their option to cancel. In the event that the Buyers electto cancel this Agreement the deposit together with interest earned shall be released to themimmediately.Should the Sellers fail to give Notice of Readiness by the date stipulated in line 63 or fail to be readyto validly complete a legal transfer as aforesaid they shall make due compensation to the Buyers fortheir loss and for all expenses together with interest if their failure is due to proven216 217218219220221222223224225226227 228229 230 231 232 233234235236237238239 240 241242243244245246247248249250251252253Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.negligence and whether or not the Buyers cancel this Agreement.254 Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 15. Buyers' representatives After this Agreement has been signed by both parties and the deposit has been lodged, the Buyershave the right to place two representatives on board the Vessel at their sole risk and expense uponarrival at on or aboutThese representatives are on board for the purpose of familiarisation and in the capacity ofobservers only, and they shall not interfere in any respect with the operation of the Vessel. TheBuyers' representatives shall sign the Sellers' letter of indemnity prior to their embarkation.255 256257258259260261 16. a)* b)* c)* *Arbitration This Agreement shall be governed by and construed in accordance with English law andany dispute arising out of this Agreement shall be referred to arbitration in London inaccordance with the Arbitration Acts 1950 and 1979 or any statutory modification orre-enactment thereof for the time being in force, one arbitrator being appointed by eachparty. On the receipt by one party of the nomination in writing of the other party' s arbitrator,that party shall appoint their arbitrator within fourteen days, failing which the decision of thesingle arbitrator appointed shall apply. If two arbitrators properly appointed shall not agree theyshall appoint an umpire whose decision shall be final.. This Agreement shall be governed by and construed in accordance with Title 9 of theUnited Stage Code and the Law of the State of New York and should any dispute arise out ofthis Agreement, the matter in dispute shall be referred to three persons at New York, one tobe appointed by each of the parties hereto, and the third by the two so chosen; theirdecision or that of any two of them shall be final, and for purpose of enforcing any award, thisAgreement may be made a rule of the Court.The proceedings shall be conducted in accordance with the rules of the Society of MaritimeArbitrators Inc. New York. Any dispute arising out of this Agreement shall be referred to arbitration at , subject to the procedures applicable there. The laws of shall govern this Agreement. 16a),16b)and 16c) are alternatives; delete whichever is not applicable. In the absence ofdeletions, alternative 16 a) to apply.262 263264265266267268269270 271272273274275276277278 279280281 282283 Clause 17 THE PRICE, TERMS AND CONDITIONS OF THE SALE TO BE KEPT STRICTLY PRIVATE ANDCONFIDENTIAL BY ALL PARTIES CONCERNED. HOWEVER, THE BUYER BEING PUBLICLY LISTEDCOMPANY HAS THE RIGHT TO ANNOUNCE THE PURCHASE TO THE MARKET. SHOULD THE DETAILS OF THE SALE BECOME KNOWN OR REPORTED IN THE MARKET, NEITHER THEBUYERS NOR THE SELLERS SHALL HAVE THE RIGHT TO CANCEL THIS CONTRACT. Clause 18As the Vessel is currently under construction the Buyer agrees to purchase the Vessel on a backto back basis and in accordance with the provisions of the Shipbuilding contract dated 11 Oct2013 which he has seen and approved. FOR THE SELLERS FOR THE BUYERS /s/ Stylianos Giamanis /s/ Alexandros Tsirikos Stylianos Giamanis Alexandros Tsirikos Director Director ………………………………………. ………………………………………….. Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Exhibit 4.24 TERMINATION OF MOA"Hull 5407"THIS TERMINATION AGREEMENT (the "Agreement") is made on the 6th day of February, 2014 by and among Monte Carlo OneShipping Company Limited (the "Seller"), a limited liability company organized and existing under the laws of the Marshall Islands, and Top Ships Inc. (the"Buyer"), a corporation organized and existing under the laws of the Marshall Islands. Capitalized terms used herein as defined terms and not otherwisedefined herein shall have the meanings ascribed thereto in the MOA (as hereinafter defined).WHEREAS, the Seller and the Buyer are parties to an MOA, dated December le 2013, (the "MOA"), pursuant to which the Seller agreed tosell Hull 5407 (the "Vessel"), to the Buyer on the terms and conditions provided therein;WHEREAS, the Seller and the Biyers wish to terminate the MOA.NOW, THEREFORE, in consideration of the premises and the mutual agreements contained herein, the parties hereto agree as follows:The Seller and the Buyer hereby agree that with effect from 6th day of Feb (the "Effective Date") the MOA has been terminated, (ii) theSeller has accepted such termination of the Vessel under the MOA, and (iii) the MOA, has been terminated and has no further force and effect; provided,however, that such termination shall not in any manner affect or impair any rights and claims of the parties under the MOA arising prior to the Effective Dateexcept as otherwise provided herein.In consideration of the agreement contained herein of the Seller to the termination of the MOA, the Seller and the Buyer hereby agree that the depositpaid by the Byuer will remain with the Seller and to be applied for the purchase by the Buyer of the Hull 5406 also in the same beneficial ownership of theSeller.Each of the parties hereto represents and warrants to the other party hereto that:(a) it is duly organized or formed and is validly existing and in good standing under the laws of its jurisdiction of formation and is duly qualified to dobusiness and is in good standing under the laws of each state, country or other jurisdiction wherein such qualification is necessary in order to enable it toperform its respective obligations under this Agreement;(b) it has full power to carry on its business as now being conducted and to enter into and perform its obligation under this Agreement;(c) it has complied with all statutory, regulatory and other requirements relative to such business and such agreements;(d) all necessary corporate or limited liability company action has been taken to authorize, and all necessary consents and authorities have been obtainedand remain in full force and effect to permit such party to enter into and perform its respective obligations under this Agreement.No authorization, consent or approval of, the giving of notice to, the registration with, or the taking of any other action by or with respect to any governmentalauthority or any other person is necessary to permit such party to enter into and perform its respective obligations under this Agreement;(e) the obligations expressed to be assumed by such party under this Agreement are legal and valid obligations, binding on and enforceable against suchparty in accordance with the terms of this Agreement;(f) the execution and delivery of this Agreement, and the performance thereof by such party,do not violate or contravene (i) any applicable law or regulation existing at the date hereof; (ii) the certificate of formation or limited liability company agreementof such party; or (iii) any contractual restriction binding upon such party under any other agreement;(g) this Agreement has been duly executed and delivered by an officer or other authorizedsignatory of such party, authorized to execute and deliver this Agreement on its behalf and constitutes the legal, valid and binding obligation thereof,enforceable thereagainst in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, moratorium and otherlaws affecting the rights of creditors generally and by general principles of equity.Except as specifically provided herein, this Agreement shall not confer any rights or remedies upon any person other than the parties hereto and theirrespective successors and assigns.This Agreement may be signed in any number of counterparts, each of which shall be an original with the same effect as if the signatures thereto andhereto were upon the same instrument.This Agreement shall be governed by and construed in accordance with the laws specified in the MOA.No amendments of any provision of this Agreement shall be valid unless the same shall be in writing and signed by all of the parties hereto.[Signature Page Follows]IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of the day and year first written above.Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. MONTE CARLO ONE SHIPPING COMPANY LIMITED By /s/ Ioannis Lymperopoulos Name:IOANNIS LYMPEROPOULOS Title:PRESIDENT / TREASURER TOP SHIPS INC By /s/ Evangelos Ikonomou Name:Evangelos Ikonomou Title:DirectorSource: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Exhibit 4.26 MEMORANDUM OF AGREEMENT Dated: 16 December 2013Norwegian Shipbroker' Association's Memo-randum of Agreement for sale and purchase ofships. Adopted by The Baltic and InternationalMaritime Council (BIMCO) in 1956.Code-nameSALEFORM 1993Revised 1966, 1983 and 1986/87. Monte Carlo One Shipping Company Limited of Marshall Islands Hereinafter called the Sellers, have agreed to sell, and Top Ships Inc. of Marshall Islands or nominee Hereinafter called the Buyers, have agreed to buy Name: Hull Nr S407 Classification Society/Class: ABSBuilt: By: Hyundai Mipo Dockyard Co., Ltd Flag: Place of registration: Call Sign: Grt/Nrt: Register IMO Number: Hereinafter called the Vessel, on the following terms and conditions: Definition "Banking days" are days on which banks are open both in the country of the currency stipulated for the Purchase Price in Clause 1 and in the place of closing stipulated in Clause 8. "In writing" or "written" means a letter handed over from the Sellers to the Buyers or vice versa,a registered letter, telex, telefax or other modern form of written communication. "Classification Society" or "Class" means the Society referred to in line 6. 1. Purchase price Thirty Seven million US Dollars ($37,000,000) 2. Deposit As security for the correct fulfilment of this Agreement the Buyers shall pay a deposit of 10% 20%(twenty ten per cent) of the Purchase Price, i.e. Seven Million Four Hundred US Dollars ($7,400,000)within -3 banking days -from the date of this Agreement. This deposit shall be paid as follows: depositshall be refunded witplaced with ALPHA BANK A.E.SHIPPING FINANCE DIVISION89, AKTI MIAOULI185-38 PIRAEUS GREECESWIFT: CRBAGRAABENEFICIARY: MONTE CARLO ONE SHIPPING COMPANY LIMITEDACCOUNT No: 960 01 5006 021256IBAN: GR29 0140 9600 9600 1500 6021 256 USD CORRESPONDENT: CITIBANK NA399 PARK AVENUENEW YORK, N.Y 10022 USA1 2 3 4 5 6 7 8 9 10 1112 1314 15 16 17 181920 21222324 25 26 272829Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.SWIFT: CITIUS33XXX Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. and held by them into a joint account for the Sellers and the Buyers, to be released in accordance withjoint written instructions of the Sellers and the Buyers. interest, if any, to be credited to the Buyers. Any\ fee charged for holding the said deposit shall be borne equally by the Sellers and the Buyers. 3. Payment The balance of the Purchase Price shall be paid in full free of bank charges toAccount to be nominated on delivery of vessel, but not later than 3 banking days after the Vessel is in every respect physicallyready for delivery in accordance with the terms and conditions of this Agreement andNotice of Readiness has been given in accordance with clause 5. The buyer has the right to make thedelivery payment directly to the shipyard as per the Shipbuilding Contract dated 7th February 2013. 4. a)* b)* * 5.Inspections Buyer has the right to inspect the vessel at any time during the construction period of thevessel at Vinashin Shipyard.The Buyers have inspected and accepted the Vessel's classification records. The Buyers havealso inspected the Vessel at/in onand have accepted the Vessel following this inspection and the sale is outright and definite,subject only to the terms and conditions of this Agreement. The Buyers shall have the right to inspect the Vessel's classification records and declarewhether same are accepted or not within The Seller shall provide for inspection of the Vessel at/in The Buyers shall undertake the inspection without undue delay to the Vessel. Should theBuyers cause undue delay they shall compensate the Sellers for the losses thereby incurred.The Buyers shall inspect the Vessel without opening up and without cost to the Sellers.During the inspection, the Vessel's deck and engine log books shall be made available forexamination by the Buyers. If the Vessel is accepted after such inspection, the sale shallbecome outright and definite, subject only to the terms and conditions of this Agreement,provided the Sellers receive written notice of acceptance from the Buyers within 72 hoursafter completion of such inspection.Should notice of acceptance of the Vessel's classification records and of the Vessel not bereceived by the Sellers as aforesaid, the deposit together with interest earned shall bereleased immediately to the Buyers, whereafter this Agreement shall be null and void. 4a) and 4b) are alternatives; delete whichever is not applicable. In the absence of deletions,alternative 4a) to apply. 30 31323334 3536 37 3839404142434445464748 4950 51 a) b) c)Notice, time and place of delivery The Sellers shall keep the Buyers well informed of the Vessel's construction process andshall deliver the vessel simultaneously with the delivery of the vessel from the yard to theSeller. itinerary and shallprovide the Buyers with and days notice of the estimated time of arrival at the intended placeof drydocking/underwater inspection/delivery. When the Vessel is at the place of delivery andin every respect physically ready for delivery in accordance with this Agreement, the Sellersshall give the Buyers a written Notice of Readiness for delivery. The Vessel shall be delivered and taken over at Vinashin Shipyard safely afloat at a safe andaccessible berth or anchorage at/in as per shipbuilding contract dated 7th Feb 2013 whichthe Buyer has seen and acknowledges. in the Sellers' option. Expected time of delivery: by 31 March 2015 permissible and non permissible delays as per shipbuilding contract dated 7th Feb 2013 which the Buyer has seen andacknowledges. 5253545556 5758 59 60 61 6263646566Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 67 Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Date of cancelling (see clauses 5 c),6 b) (iii)and 14): as per shipbuilding contract dated 07thFeb 2013which the Buyer has seen and acknowledges. If the Sellers anticipate that, notwithstanding the exercise of due diligence by them, theVessel will not be ready for delivery by the cancelling date they may notify the Buyers inwriting stating the date when they anticipate that the Vessel will be ready for delivery andpropose a new cancelling date. Upon receipt of such notification the Buyers shall have theoption of either cancelling this Agreement in accordance with Clause 14 within 7 runningdays of receipt of the notice or of accepting the new date as the new cancelling date. If theBuyers have not declared their option within 7 running days of receipt of the Sellers'notification or if the Buyers accept the new date, the date proposed in the Sellers' notificationshall be deemed to be the new cancelling date and shall be substituted for the cancelling datestipulated in line 69,70. If this Agreement is maintained with the new cancelling date all other terms and conditionshereof including those contained in Clauses 5 a) and 5 c) shall remain unaltered and in fullforce and effect. Cancellation or failure to cancel shall be entirely without prejudice to anyclaim for damages the Buyers may have under Clause 14 for the Vessel not being ready bythe original cancelling date. 68697071 7273747576 d) 6. a)**Should the Vessel become an actual, constructive or compromised total loss before deliverythe deposit shall be refunded immediately to the Buyerswhereafter this Agreement shall be null and void. Drydocking/Divers Inspection The Sellers shall place the Vessel in drydock at the port of delivery for inspection by theClassification Society of the Vessel' s underwater parts below the deepest load line, theextent of the inspection being in accordance with Classification Society's rules. If therudder, propeller, bottom or other underwater parts below the deepest load line are foundbroken, damaged or defective so as to affect the Vessel' s class, such defects shall be madegood at the Sellers' expense to the satisfaction of the Classification Society without777879 80 818283848586 b)** condition/recommendation*. (i) The Vessel is to be delivered without drydocking. However, the Buyers shallhave the right at their expense to arrange for an underwater inspection by a diver approvedby the Classification society prior to the delivery of the Vessel. The Sellers shall at theircost make the Vessel available for such inspection. The extent of the inspection and theconditions under which it is performed shall be to the satisfaction of the ClassificationSociety. If the conditions at the port of delivery are unsuitable for such inspection, theSellers shall make the Vessel available at a suitable alternative place near to the deliveryport. (ii) If the rudder, propeller, bottom or other underwater parts below the deepest load lineare found broken, damaged or defective so as to effect the Vessel's class, then unlessrepairs can be carried out afloat to the satisfaction of the Classification society, the Sellersshall arrange for the Vessel to be drydocked at their expense for inspection by theClassification society of the Vessel' s underwater parts below the deepest load line, theextent of the inspection being in accordance with the Classification Society's rules. If therudder, propeller, bottom or other underwater parts below the deepest load line are foundbroken, damaged or defective so as to effect the Vessel' s class, such defects shall be madegood by the Sellers at their expense to the satisfaction of the classification societywithout condition/recommendation*. In such event the Sellers are to pay also for the cost ofthe underwater inspection and the Classification Society's attendance. (iii) If the Vessel is to be drydocked pursuant to Clause 6 b) (ii) and no suitable dry-docking facilities are available at the port of delivery, the Sellers shall take the Vesselto a port where suitable drydocking facilities are available ,whether within or outside the87 8889909192939495 96979899100101102103104105106 107108109Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. delivery range as per Clause 5 b). Once drydocking has taken place the Sellers shall deliverthe Vessel at a port within the delivery range as per clause 5 b) which shall, for thepurpose of this clause, become the new port of delivery. In such event the cancelling date 110111112 Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. c) provided for in clause 5 b) shall be extended by the additional time required for thedry-docking and extra steaming, but limited to a maximum of 14 running days. If the vessel is drydocked pursuant to Clause 6 a) or 6 b) above (i) the Classification Society may require survey of the tailshaft system, the extent ofthe survey being to the satisfaction of the Classification surveyor. If such survey is notrequired by the Classification Society, the Buyers shall have the right to require the tailshaftto be drawn and surveyed by Classification Society, the extent of the survey being inaccordance with the Classification Society's rules for tailshaft survey and consistent withthe current stage of the Vessel survey cycle. The Buyers shall declare whether theyrequire the tailshaft to be drawn and surveyed not later than by the completion of theinspection of the Classification Society. The drawing and refitting of the tailshaft shall bearranged by the Sellers. Should any parts of the tailshaft system be condemned or founddefective so as to effect the Vessel' s class, those parts shall be renewed or made good atthe Sellers' expense to the satisfaction of the Classification Society withoutcondition/recommendation*. 113114 115 116117118119120121122123124125126127 (ii) the expenses relating to the survey of the tailshaft system shall be borneby the Buyers unless the Classification Society requires such survey to be carried out , inwhich case the Sellers shall pay these expenses. The Sellers shall also pay the expensesif the Buyers require the survey and parts of the system are condemned or found defectiveor broken so as to effect the vessel' s class*. (iii) the expenses in connection with putting the Vessel in and taking her outof drydock, including the drydock dues and the Classification Society' s fees shall be paid bythe Sellers if the Classification Society issues any condition/recommendation* as a resultof the survey or if it requires survey of the tailshaft system. In all other cases the Buyersshall pay the aforesaid expenses, dues and fees. (iv) the Buyers' representative shall have the right to be present in the drydock, butwithout interfering with the work or decisions of the Classification surveyor. (v) the Buyers shall have the right to have the underwater parts of the Vesselcleaned and painted at their risk and expense without interfering with the Sellers' or theClassifications surveyor's work, if any, and without affecting the Vessel' s timely delivery. If,however, the Buyers' work in drydock is still in progress when the Sellers havecompleted the work which the Sellers are required to do, the additional docking timeneeded to complete the Buyers' work shall be for the Buyers' risk and expense. In the event that the Buyers' work requires such additional time, the Sellers may upon completion of theSellers' work tender Notice of Readiness for delivery whilst the Vessel is still in drydockand the Buyers shall be obliged to take delivery in accordance with Clause 3 , whetherthe vessel is in drydock or not and irrespective of Clause 5 b). * Notes, if any, in the surveyor's report which are accepted by the classification Societywithout condition/recommendation are not to be taken into account. ** 6a)and 6 b) are alternatives; delete whichever is not applicable. In the absence ofdeletions, alternative 6 a) to apply. 7. Spares/bunkers, etc. as per shipbuilding contract dated 7th Feb 2013The Sellers shall deliver the Vessel to the Buyers with everything belonging to her on board and on shore.All spare parts and spare equipment including spare tail-end shaft(s) and/or spare propeller(s)/propellerblade(s), if any, belonging to the Vessel at the time of inspection used orunused, whether on board or not shall become the Buyers' property, but spares on order are to be128129130131132 133134135136137 138139 140141142143144145146147148149 150151 152153 154 155156157158159Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. excluded. Forwarding charges, if any, shall be for the Buyers' account. The Sellers are not required toreplace spare parts including spare tail-end shaft(s) and spare propeller(s)/propeller blade(s) which160161 Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. are taken out of spare and used as replacement prior to delivery, but the replaced items shall be the property of the Buyers. The radio installation and navigational equipment shall be included in the salewithout extra payment if they are the property of the Sellers. Unused stores and provisions shall beincluded in the sale and be taken over by the Buyers without extra payment. The Sellers have the right to take ashore crockery, plates, cutlery, linen and other articles bearing theSeller's flag or name, provided they replace same with similar unmarked items. Library, forms, etc.,exclusively for use in the Sellers' vessel(s),shall be excluded without compensation. Captain'sOfficers' and Crew's personal belongings including the slop chest are to be excluded from the sale,as well as the following additional items (including items on hire): The Buyers shall take over the remaining bunkers and unused lubricating oils in storage tanks andsealed drums and pay the current net marked price (excluding barging expenses) at the port and dateof delivery of the Vessel.Payment under this Clause shall be made at the same time and place and in the same currency asthe Purchase Price.162163164 165166167168169 170171172173174 8. Documentation. The place of closing : ULSAN KOREA or Vietnam or Athens In exchange for payment of the Purchase Price the Sellers shall furnish the Buyers with deliverydocuments, namely: a) Legal Bill of Sale in a form recordable in the country in which the Buyers are to register the Vessel, warranting that the Vessel is free from all encumbrances,mortgages and maritime liens or any other debts or claims whatsoever, duly notarially attested and legalized by the consul of such country or other competent authority. b) Current Certificate of Ownership issued by the competent authorities of the flag state of the Vessel. c) Confirmation of Class issued within 72 hours prior to delivery. d) Current Certificate issued by the competent authorities stating that the Vessel is free from register encumbrances. e) Certificate of deletion of the Vessel from the Vessel' s registry or other official evidence of deletion appropriate to the Vessel' s registry at the time of delivery, or, in the event that the registry does not as a matter of practice issue such documentation immediately, a written undertaking by the Sellers to effect deletion from the Vessel' s registry forthwith and furnish a Certificate or other official evidence of deletion to the Buyers promptly and latest within 4 (four) weeks after the purchase Price has been paid and the Vessel has been delivered. f) Any such additional documents as may reasonably be required by the competent authorities for the purpose of registering the Vessel provided the Buyers notify the Sellers of any such documents as soon as possible after the date of this Agreement. At the time of delivery the Buyers and Sellers shall sign and deliver to each other a Protocol ofDelivery and Acceptance confirming the date and time of delivery of the Vessel from theSellers to the Buyers. At the time of delivery the Sellers shall hand to the Buyers the classification certificate(s) aswell as all plans etc., which are on board the Vessel. Other certificates which are on board theVessel shall alsobe handed over to the Buyers unless the Sellers are required to retain same, inwhich casethe Buyers to have the right to take copies. Other technical documentation whichmay be in the Sellers' possession shall be promptly forwarded to the Buyers at Buyers expense, ifthey so request. The Sellers may keep the Vessel' s log books but the Buyers to have the right to takecopies of same.175 176 177178 179180181182 183184 185 186187 188189190191192193 194195196 197198199 200201202203204205206Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 9. Encumbrances The Sellers warrant that the Vessel, at the time of delivery, is free from all charters, encumbrances,mortgages and maritime liens or any other debts whatsoever. The Sellers hereby undertaketo indemnify the Buyers against all consequences of claims made against the Vessel which havebeen incurred prior to the time of delivery. 10. Taxes,etc. Any taxes, fees and expenses in connection with the purchase and registration under the Buyers' flagshall be for the Buyers account, where as similar charges in connection with the closing of the Sellers'register shall be for the Sellers' account. 207 208209210211 212 213214215 11. Condition on delivery The Vessel with everything belonging to her shall be at the Sellers' risk and expense until she isdelivered to the Buyers, but subject to the terms and conditions of this Agreements she shall bedelivered and taken over as she was at the time of inspection, fair wear and tear excepted.However, the Vessel shall be delivered with her class maintained without condition/recommendation*,free of average damage affecting the Vessel's class, and with her classification certificates andnational certificates, as well as all other certificates the Vessel had at the time of inspection, valid andunextended without condition/recommendation* by Class or relevant authorities at the time ofdelivery."Inspection" in this Clause 11, shall mean the Buyers' inspection according to Clause 4 a) or 4 ifapplicable, or the buyers inspection prior to the signing of this Agreement . If the Vessel is taken overwithout inspection, the date of this Agreement shall be the relevant date. * Notes, if any, in the surveyor' s reports which are accepted by the Classification Society without condition/recommendation are not to be taken into account. 12. Name/markings Upon delivery the Buyers undertake to change the name of the Vessel and alter funnelmarkings. 13. Buyers' default Should the deposit not be paid in accordance with Clause 2, the Sellers have the right to cancel thisAgreement, and they shall be entitled to claim compensation for their losses and for all expensesincurred together with interest.Should the Purchase Price not be paid in accordance with Clause 3, the Sellers have the right tocancel the Agreement, in which case the deposit together with interest earned shall be released to theSellers. If the deposit does not cover their loss , the Sellers shall be entitled to claim furthercompensation for their losses and for all expenses incurred together with interest. 14. Sellers' default Should the Sellers fail to give Notice of Readiness in accordance with Clause 5 a) or fail to be readyto validly complete a legal transfer by the date stipulated in line 63 the Buyers shall havethe option of cancelling this Agreement provided always that the Sellers shall be granted amaximum of 3 banking days after Notice of Readiness has been given to make arrangementsfor the documentation set out in Clause 8. If after Notice of Readiness has been given but beforethe Buyers have taken delivery, the Vessel ceases to be physically ready for delivery and is notmade physically ready again in every respect by the date stipulated in line 63 and new Notice ofReadiness given, the Buyers shall retain their option to cancel. In the event that the Buyers electto cancel this Agreement the deposit together with interest earned shall be released to them216 217218219220221222223224225226227 228229 230 231 232 233234235236237238239 240 241242243244245246247248249250Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.immediately.Should the Sellers fail to give Notice of Readiness by the date stipulated in line 63 or fail to be readyto validly complete a legal transfer as aforesaid they shall make due compensation to the Buyers fortheir loss and for all expenses together with interest if their failure is due to provennegligence and whether or not the Buyers cancel this Agreement.251252253254 Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 15. Buyers' representatives After this Agreement has been signed by both parties and the deposit has been lodged, the Buyershave the right to place two representatives on board the Vessel at their sole risk and expense uponarrival at on or aboutThese representatives are on board for the purpose of familiarisation and in the capacity ofobservers only, and they shall not interfere in any respect with the operation of the Vessel. TheBuyers' representatives shall sign the Sellers' letter of indemnity prior to their embarkation. 255 256257258259260261 16. a)* b)* c)* *Arbitration This Agreement shall be governed by and construed in accordance with English law andany dispute arising out of this Agreement shall be referred to arbitration in London inaccordance with the Arbitration Acts 1950 and 1979 or any statutory modification orre-enactment thereof for the time being in force, one arbitrator being appointed by eachparty. On the receipt by one party of the nomination in writing of the other party' s arbitrator, thatparty shall appoint their arbitrator within fourteen days, failing which the decision of the singlearbitrator appointed shall apply. If two arbitrators properly appointed shall not agree they shallappoint an umpire whose decision shall be final.. This Agreement shall be governed by and construed in accordance with Title 9 of theUnited Stage Code and the Law of the State of New York and should any dispute arise out ofthis Agreement, the matter in dispute shall be referred to three persons at New York, one tobe appointed by each of the parties hereto, and the third by the two so chosen; theirdecision or that of any two of them shall be final, and for purpose of enforcing any award, thisAgreement may be made a rule of the Court.The proceedings shall be conducted in accordance with the rules of the Society of MaritimeArbitrators Inc. New York. Any dispute arising out of this Agreement shall be referred to arbitration at , subject to the procedures applicable there. The laws of shall govern this Agreement. 16a),16b)and 16c) are alternatives; delete whichever is not applicable. In the absence ofdeletions, alternative 16 a) to apply.262 263264265266267268269270 271272273274275276277278 279280281 282283 Clause 17 THE PRICE, TERMS AND CONDITIONS OF THE SALE TO BE KEPT STRICTLY PRIVATE ANDCONFIDENTIAL BY ALL PARTIES CONCERNED. HOWEVER, THE BUYER BEING PUBLICLY LISTEDCOMPANY HAS THE RIGHT TO ANNOUNCE THE PURCHASE TO THE MARKET. SHOULD THE DETAILS OF THE SALE BECOME KNOWN OR REPORTED IN THE MARKET, NEITHER THEBUYERS NOR THE SELLERS SHALL HAVE THE RIGHT TO CANCEL THIS CONTRACT. Clause 18As the Vessel is currently under construction the Buyer agrees to purchase the Vessel on a backto back basis and in accordance with the provisions of the Shipbuilding contract dated 7th Feb2013which he has seen and approved. FOR THE SELLERS FOR THE BUYERS /s/ Ioannis Lymperopoulos /s/ Alexandros Tsirikos Ioannis Lymperopoulos Alexandros Tsirikos Director Director 16/12/2013 ………………………………………. ………………………………………….. Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Exhibit 4.26 MEMORANDUM OF AGREEMENT Dated: 6th Feb 2014Norwegian Shipbroker' Association'sMemorandum of Agreement for saleand purchase of ships. Adopted byThe Baltic and InternationalMaritime Council (BIMCO) in 1956.Code-nameSALEFORM 1993Revised 1966, 1983 and 1986/87. Million Hope Maritime S.A of Marshall Islands Hereinafter called the Sellers, have agreed to sell, and Top Ships Inc. of Marshall Islands or nominee Hereinafter called the Buyers, have agreed to buy Name: Hull Nr S406 Classification Society/Class: ABSBuilt: By: Hyundai Mipo Dockyard Co., Ltd Flag: Place of registration: Call Sign: Grt/Nrt: Register IMO Number: Hereinafter called the Vessel, on the following terms and conditions: Definition "Banking days" are days on which banks are open both in the country of the currency stipulated for the Purchase Price in Clause 1 and in the place of closing stipulated in Clause 8. "In writing" or "written" means a letter handed over from the Sellers to the Buyers or vice versa,a registered letter, telex, telefax or other modern form of written communication. "Classification Society" or "Class" means the Society referred to in line 6. 1. Purchase price Thirty Eight million Two Hundred and Fifty ($38,250,000) 2. Deposit As security for the correct fulfilment of this Agreement the Buyers shall pay a deposit of USD10,900,000 out of which the amount of USD 7,400,000 has already been paid to Monte CarloOne Shipping Company Limited, a company of same beneficial ownership. The remaing USD3,500,000 is to be paid within 3 banking days from the date of this Agreement. This depositshall be paid as follows: ALPHA BANK A.E.89, AKTI MIAOULI18538 PIRAEUS GREECESWIFT ADDRESS:CRBAGRAANEW Account Number: 960-00-2007014186NEW IBAN: GR73 0140 9600 9600 0200 7014 186 1 2 3 4 5 6 7 8 9 10 1112 1314 15 16 17 181920 21222324 25 26 Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. BENEFICIARY: MILLION HOPE MARITIME SACORRESPONDING BANK:EUR: DEUTSCHE BANK AG, 12-21 TAUNUSANLAGE, FRANKFURT AM MAINSWIFT ADDRESS: DEUTDEFFXXX and held by them into a joint account for the Sellers and the Buyers, to be released inaccordance with joint written instructions of the Sellers and the Buyers. interest, if any, to becredited to the Buyers. Any fee charged for holding the said deposit shall be borne equally bythe Sellers and the Buyers. 3. Payment The balance of the Purchase Price i.e USD 27,350,000 shall be paid in full free of bank chargesto an account to be nominated on delivery of vessel, but not later than 3 banking days after the Vessel is in every respectphysically ready for delivery in accordance with the terms and conditions of this Agreement andNotice of Readiness has been given in accordance with clause 5. The buyer has the right tomake the delivery payment directly to the shipyard as per the Shipbuilding Contract dated 3December 2012. The Buyers has also the right to pay the whole amount in shares at aconversion rate to be agreed between the parties before the delivery of the Vessel. 2728294. a)* b)* * 5.Inspections Buyer has the right to inspect the vessel at any time during the construction period of thevessel at Vinashin Shipyard.The Buyers have inspected and accepted the Vessel's classification records. The Buyers havealso inspected the Vessel at/in onand have accepted the Vessel following this inspection and the sale is outright and definite,subject only to the terms and conditions of this Agreement. The Buyers shall have the right to inspect the Vessel's classification records and declarewhether same are accepted or not within The Seller shall provide for inspection of the Vessel at/in The Buyers shall undertake the inspection without undue delay to the Vessel. Should theBuyers cause undue delay they shall compensate the Sellers for the losses thereby incurred.The Buyers shall inspect the Vessel without opening up and without cost to the Sellers.During the inspection, the Vessel's deck and engine log books shall be made available forexamination by the Buyers. If the Vessel is accepted after such inspection, the sale shallbecome outright and definite, subject only to the terms and conditions of this Agreement,provided the Sellers receive written notice of acceptance from the Buyers within 72 hoursafter completion of such inspection.Should notice of acceptance of the Vessel's classification records and of the Vessel not bereceived by the Sellers as aforesaid, the deposit together with interest earned shall bereleased immediately to the Buyers, whereafter this Agreement shall be null and void. 4a) and 4b) are alternatives; delete whichever is not applicable. In the absence of deletions,alternative 4a) to apply. 30 31323334 3536 37 3839404142434445464748 4950 51 Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. a) b) c)Notice, time and place of delivery The Sellers shall keep the Buyers well informed of the Vessel's construction process andshall deliver the vessel simultaneously with the delivery of the vessel from the yard to theSeller. itinerary and shallprovide the Buyers with and days notice of the estimated time of arrival at the intended placeof drydocking/underwater inspection/delivery. When the Vessel is at the place of delivery andin every respect physically ready for delivery in accordance with this Agreement, the Sellersshall give the Buyers a written Notice of Readiness for delivery. The Vessel shall be delivered and taken over at Vinashin Shipyard safely afloat at a safe andaccessible berth or anchorage at/in as per shipbuilding contract dated 3 December 2012which the Buyer has seen and acknowledges in the Sellers' option. Expected time of delivery: on or about 31st May, 2014 plus three months from the date ofdelivery of the yard, subject to permissible and non permissible delays as pershipbuilding contract dated 3 December 2012 which the Buyer has seen andacknowledges. Date of cancelling (see clauses 5 c),6 b) (iii)and 14): as per shipbuilding contract dated 3December 2012 which the Buyer has seen and acknowledges. If the Sellers anticipate that, notwithstanding the exercise of due diligence by them, theVessel will not be ready for delivery by the cancelling date they may notify the Buyers inwriting stating the date when they anticipate that the Vessel will be ready for delivery andpropose a new cancelling date. Upon receipt of such notification the Buyers shall have theoption of either cancelling this Agreement in accordance with Clause 14 within 7 runningdays of receipt of the notice or of accepting the new date as the new cancelling date. If theBuyers have not declared their option within 7 running days of receipt of the Sellers'notification or if the Buyers accept the new date, the date proposed in the Sellers' notificationshall be deemed to be the new cancelling date and shall be substituted for the cancelling datestipulated in line 69,70. If this Agreement is maintained with the new cancelling date all other terms and conditionshereof including those contained in Clauses 5 a) and 5 c) shall remain unaltered and in fullforce and effect. Cancellation or failure to cancel shall be entirely without prejudice to anyclaim for damages the Buyers may have under Clause 14 for the Vessel not being ready bythe original cancelling date.5253545556 5758 59 60 61 62636465666768697071 7273747576 d) 6. a)**Should the Vessel become an actual, constructive or compromised total loss before deliverythe deposit shall be refunded immediately to the Buyerswhereafter this Agreement shall be null and void. Drydocking/Divers Inspection The Sellers shall place the Vessel in drydock at the port of delivery for inspection by theClassification Society of the Vessel' s underwater parts below the deepest load line, theextent of the inspection being in accordance with Classification Society's rules. If therudder, propeller, bottom or other underwater parts below the deepest load line are foundbroken, damaged or defective so as to affect the Vessel' s class, such defects shall be madegood at the Sellers' expense to the satisfaction of the Classification Society without777879 80 818283848586 Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. b)** c)condition/recommendation*. (i) The Vessel is to be delivered without drydocking. However, the Buyers shallhave the right at their expense to arrange for an underwater inspection by a diver approvedby the Classification society prior to the delivery of the Vessel. The Sellers shall at theircost make the Vessel available for such inspection. The extent of the inspection and theconditions under which it is performed shall be to the satisfaction of the ClassificationSociety. If the conditions at the port of delivery are unsuitable for such inspection, theSellers shall make the Vessel available at a suitable alternative place near to the deliveryport. (ii) If the rudder, propeller, bottom or other underwater parts below the deepest load lineare found broken, damaged or defective so as to effect the Vessel's class, then unlessrepairs can be carried out afloat to the satisfaction of the Classification society, the Sellersshall arrange for the Vessel to be drydocked at their expense for inspection by theClassification society of the Vessel' s underwater parts below the deepest load line, theextent of the inspection being in accordance with the Classification Society's rules. If therudder, propeller, bottom or other underwater parts below the deepest load line are foundbroken, damaged or defective so as to effect the Vessel' s class, such defects shall be madegood by the Sellers at their expense to the satisfaction of the classification societywithout condition/recommendation*. In such event the Sellers are to pay also for the cost ofthe underwater inspection and the Classification Society's attendance. (iii) If the Vessel is to be drydocked pursuant to Clause 6 b) (ii) and no suitable dry-docking facilities are available at the port of delivery, the Sellers shall take the Vesselto a port where suitable drydocking facilities are available ,whether within or outside thedelivery range as per Clause 5 b). Once drydocking has taken place the Sellers shall deliverthe Vessel at a port within the delivery range as per clause 5 b) which shall, for thepurpose of this clause, become the new port of delivery. In such event the cancelling dateprovided for in clause 5 b) shall be extended by the additional time required for thedry-docking and extra steaming, but limited to a maximum of 14 running days. If the vessel is drydocked pursuant to Clause 6 a) or 6 b) above (i) the Classification Society may require survey of the tailshaft system, the extent ofthe survey being to the satisfaction of the Classification surveyor. If such survey is notrequired by the Classification Society, the Buyers shall have the right to require the tailshaftto be drawn and surveyed by Classification Society, the extent of the survey being inaccordance with the Classification Society's rules for tailshaft survey and consistent withthe current stage of the Vessel survey cycle. The Buyers shall declare whether theyrequire the tailshaft to be drawn and surveyed not later than by the completion of theinspection of the Classification Society. The drawing and refitting of the tailshaft shall bearranged by the Sellers. Should any parts of the tailshaft system be condemned or founddefective so as to effect the Vessel' s class, those parts shall be renewed or made good atthe Sellers' expense to the satisfaction of the Classification Society withoutcondition/recommendation*.87 8889909192939495 96979899100101102103104105106 107108109110111112113114 115 116117118119120121122123124125126127 (ii) the expenses relating to the survey of the tailshaft system shall be borneby the Buyers unless the Classification Society requires such survey to be carried out , inwhich case the Sellers shall pay these expenses. The Sellers shall also pay the expensesif the Buyers require the survey and parts of the system are condemned or found defective 128129130131 Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. or broken so as to effect the vessel' s class*. (iii) the expenses in connection with putting the Vessel in and taking her outof drydock, including the drydock dues and the Classification Society' s fees shall be paid bythe Sellers if the Classification Society issues any condition/recommendation* as a resultof the survey or if it requires survey of the tailshaft system. In all other cases the Buyersshall pay the aforesaid expenses, dues and fees. (iv) the Buyers' representative shall have the right to be present in the drydock, butwithout interfering with the work or decisions of the Classification surveyor. (v) the Buyers shall have the right to have the underwater parts of the Vesselcleaned and painted at their risk and expense without interfering with the Sellers' or theClassifications surveyor's work, if any, and without affecting the Vessel' s timely delivery. If,however, the Buyers' work in drydock is still in progress when the Sellers havecompleted the work which the Sellers are required to do, the additional docking timeneeded to complete the Buyers' work shall be for the Buyers' risk and expense. In the event that the Buyers' work requires such additional time, the Sellers may upon completion of theSellers' work tender Notice of Readiness for delivery whilst the Vessel is still in drydockand the Buyers shall be obliged to take delivery in accordance with Clause 3 , whetherthe vessel is in drydock or not and irrespective of Clause 5 b). * Notes, if any, in the surveyor's report which are accepted by the classification Societywithout condition/recommendation are not to be taken into account. ** 6a)and 6 b) are alternatives; delete whichever is not applicable. In the absence ofdeletions,alternative 6 a) to apply. 7. Spares/bunkers, etc. as per shipbuilding contract dated 3 December 2012. The Sellers shall deliver the Vessel to the Buyers with everything belonging to her on boardand on shore. All spare parts and spare equipment including spare tail-end shaft(s) and/or sparepropeller(s)/propeller blade(s), if any, belonging to the Vessel at the time of inspection used orunused, whether on board or not shall become the Buyers' property, but spares on order are tobe excluded. Forwarding charges, if any, shall be for the Buyers' account. The Sellers are notrequired toreplace spare parts including spare tail-end shaft(s) and spare propeller(s)/propeller blade(s)whichare taken out of spare and used as replacement prior to delivery, but the replaced items shall bethe property of the Buyers. The radio installation and navigational equipment shall be includedin the salewithout extra payment if they are the property of the Sellers. Unused stores and provisions shallbeincluded in the sale and be taken over by the Buyers without extra payment. The Sellers have the right to take ashore crockery, plates, cutlery, linen and other articlesbearing theSeller's flag or name, provided they replace same with similar unmarked items. Library, forms,etc.,exclusively for use in the Sellers' vessel(s),shall be excluded without compensation. Captain'sOfficers' and Crew's personal belongings including the slop chest are to be excluded from thesale,as well as the following additional items (including items on hire):132 133134135136137 138139 140141142143144145146147148149 150151 152153 154 155156157158159160161162163164 165166167168169 170171172173174 Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. The Buyers shall take over the remaining bunkers and unused lubricating oils in storage tanksandsealed drums and pay the current net marked price (excluding barging expenses) at the port anddateof delivery of the Vessel.Payment under this Clause shall be made at the same time and place and in the same currencyasthe Purchase Price. 8. Documentation. The place of closing : ULSAN KOREA or Vietnam or Athens In exchange for payment of the Purchase Price the Sellers shall furnish the Buyers with deliverydocuments, namely: a) Legal Bill of Sale in a form recordable in the country in which the Buyers are to register the Vessel, warranting that the Vessel is free from all encumbrances,mortgages and maritime liens or any other debts or claims whatsoever, duly notarially attested and legalized by the consul of such country or other competent authority. b) Current Certificate of Ownership issued by the competent authorities of the flag state of the Vessel. c) Confirmation of Class issued within 72 hours prior to delivery. d) Current Certificate issued by the competent authorities stating that the Vessel is free from register encumbrances. e) Certificate of deletion of the Vessel from the Vessel' s registry or other official evidence of deletion appropriate to the Vessel' s registry at the time of delivery, or, in the event that the registry does not as a matter of practice issue such documentation immediately, a written undertaking by the Sellers to effect deletion from the Vessel' s registry forthwith and furnisha Certificate or other official evidence of deletion to the Buyers promptly and latest within 4 (four) weeks after the purchase Price has been paid and the Vessel has been delivered. f) Any such additional documents as may reasonably be required by the competent authorities for the purpose of registering the Vessel provided the Buyers notify the Sellers of any such documents as soon as possible after the date of this Agreement. At the time of delivery the Buyers and Sellers shall sign and deliver to each other a Protocol ofDelivery and Acceptance confirming the date and time of delivery of the Vessel from theSellers to the Buyers. At the time of delivery the Sellers shall hand to the Buyers the classification certificate(s) aswell as all plans etc., which are on board the Vessel. Other certificates which are on board theVessel shall alsobe handed over to the Buyers unless the Sellers are required to retain same, inwhich casethe Buyers to have the right to take copies. Other technical documentation whichmaybe in the Sellers' possession shall be promptly forwarded to the Buyers at Buyers expense, ifthey so request. The Sellers may keep the Vessel' s log books but the Buyers to have the right totakecopies of same. 9. Encumbrances The Sellers warrant that the Vessel, at the time of delivery, is free from all charters,175 176 177178 179180181182 183184 185 186187 188189190191192193 194195196 197198199 200201202203204205206 207 208209210211 Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. encumbrances,mortgages and maritime liens or any other debts whatsoever. The Sellers hereby undertaketo indemnify the Buyers against all consequences of claims made against the Vessel which havebeen incurred prior to the time of delivery. 10. Taxes,etc. Any taxes, fees and expenses in connection with the purchase and registration under the Buyers'flagshall be for the Buyers account, where as similar charges in connection with the closing of theSellers'register shall be for the Sellers' account. 212 213214215 11. Condition on delivery The Vessel with everything belonging to her shall be at the Sellers' risk and expense until she isdelivered to the Buyers, but subject to the terms and conditions of this Agreements she shall bedelivered and taken over as she was at the time of inspection, fair wear and tear excepted.However, the Vessel shall be delivered with her class maintained withoutcondition/recommendation*,free of average damage affecting the Vessel's class, and with her classification certificates andnational certificates, as well as all other certificates the Vessel had at the time of inspection,valid andunextended without condition/recommendation* by Class or relevant authorities at the time ofdelivery."Inspection" in this Clause 11, shall mean the Buyers' inspection according to Clause 4 a) or 4b), ifapplicable, or the buyers inspection prior to the signing of this Agreement . If the Vessel istaken overwithout inspection, the date of this Agreement shall be the relevant date. * Notes, if any, in the surveyor' s reports which are accepted by the Classification Society without condition/recommendation are not to be taken into account. 12. Name/markings Upon delivery the Buyers undertake to change the name of the Vessel and alter funnelmarkings. 13. Buyers' default Should the deposit not be paid in accordance with Clause 2, the Sellers have the right to cancelthisAgreement, and they shall be entitled to claim compensation for their losses and for allexpensesincurred together with interest.Should the Purchase Price not be paid in accordance with Clause 3, the Sellers have the right tocancel the Agreement, in which case the deposit together with interest earned shall be releasedto theSellers. If the deposit does not cover their loss , the Sellers shall be entitled to claim furthercompensation for their losses and for all expenses incurred together with interest. 14. Sellers' default216 217218219220221222223224225226227 228229 230 231 232 233234235236237238239 240 241242243244245246247248 Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Should the Sellers fail to give Notice of Readiness in accordance with Clause 5 a) or fail to bereadyto validly complete a legal transfer by the date stipulated in line 63 the Buyers shall havethe option of cancelling this Agreement provided always that the Sellers shall be granted amaximum of 3 banking days after Notice of Readiness has been given to make arrangementsfor the documentation set out in Clause 8. If after Notice of Readiness has been given butbeforethe Buyers have taken delivery, the Vessel ceases to be physically ready for delivery and is notmade physically ready again in every respect by the date stipulated in line 63 and new Notice ofReadiness given, the Buyers shall retain their option to cancel. In the event that the Buyers electto cancel this Agreement the deposit together with interest earned shall be released to themimmediately.Should the Sellers fail to give Notice of Readiness by the date stipulated in line 63 or fail to bereadyto validly complete a legal transfer as aforesaid they shall make due compensation to theBuyers fortheir loss and for all expenses together with interest if their failure is due to provennegligence and whether or not the Buyers cancel this Agreement. 15. Buyers' representatives After this Agreement has been signed by both parties and the deposit has been lodged, theBuyershave the right to place two representatives on board the Vessel at their sole risk and expenseuponarrival at on or aboutThese representatives are on board for the purpose of familiarisation and in the capacity ofobservers only, and they shall not interfere in any respect with the operation of the Vessel. TheBuyers' representatives shall sign the Sellers' letter of indemnity prior to their embarkation.249250251252253254 255 256257258259260261 16. a)* b)* c)* *Arbitration This Agreement shall be governed by and construed in accordance with English law andany dispute arising out of this Agreement shall be referred to arbitration in London inaccordance with the Arbitration Acts 1950 and 1979 or any statutory modification orre-enactment thereof for the time being in force, one arbitrator being appointed by eachparty. On the receipt by one party of the nomination in writing of the other party' s arbitrator,that party shall appoint their arbitrator within fourteen days, failing which the decision of thesingle arbitrator appointed shall apply. If two arbitrators properly appointed shall not agree theyshall appoint an umpire whose decision shall be final.. This Agreement shall be governed by and construed in accordance with Title 9 of theUnited Stage Code and the Law of the State of New York and should any dispute arise out ofthis Agreement, the matter in dispute shall be referred to three persons at New York, one tobe appointed by each of the parties hereto, and the third by the two so chosen; theirdecision or that of any two of them shall be final, and for purpose of enforcing any award, thisAgreement may be made a rule of the Court.The proceedings shall be conducted in accordance with the rules of the Society of MaritimeArbitrators Inc. New York. Any dispute arising out of this Agreement shall be referred to arbitration at , subject to the procedures applicable there. The laws of shall govern this Agreement. 16a),16b)and 16c) are alternatives; delete whichever is not applicable. In the absence ofdeletions, alternative 16 a) to apply.262 263264265266267268269270 271272273274275276277278 279280281 282283 Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Clause 17 THE PRICE, TERMS AND CONDITIONS OF THE SALE TO BE KEPT STRICTLY PRIVATE AND CONFIDENTIAL BY ALL PARTIES CONCERNED. HOWEVER, THEBUYER BEING PUBLICLY LISTED COMPANY HAS THE RIGHT TO ANNOUNCE THEPURCHASE TO THE MARKET. SHOULD THE DETAILS OF THE SALE BECOMEKNOWN OR REPORTED IN THE MARKET, NEITHER THE BUYERS NOR THESELLERS SHALL HAVE THE RIGHT TO CANCEL THIS CONTRACT. Clause 18As the Vessel is currently under construction the Buyer agrees to purchase the Vessel on a back to back basis and in accordance with the provisions of the Shipbuilding contractdated 3 December 2012 which he has seen and approved. FOR THE SELLERS FOR THE BUYERS /s/ Stylianos Giamanis /s/ Evangelos Ikonomou Stylianos Giamanis Evangelos Ikonomou Director ………………………………………. ………………………………………….. Copyright: Norwegian Shipbrokers' Assocation, Oslo, Norway.Printed and sold by S-Gruppen A/S, Halvorsen & Larsen, Oslo, Norway.Fax: 47-22-25 28 69. Phone: 47-22-25 81 90 Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Exhibit 8.1 Name of Significant SubsidiaryCountry of IncorporationPortion of Ownership InterestBanksy Shipping Company LimitedLiberia100%Britto Shipping Company LimitedLiberia100%Hongbo Shipping Company LimitedLiberia100%Indiana R Shipping Company LimitedLiberia100%Jeke Shipping Company LimitedLiberia100%Lichtenstein Shipping Company LimitedLiberia100%Top Tanker Management Inc.Marshall Islands100%Warhol Shipping Company LimitedLiberia100% Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Exhibit 12.1CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICERI, Evangelos J. Pistiolis, certify that:1. I have reviewed this annual report on Form 20-F of Top Ships Inc.;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 statementsmade, 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 financialcondition, 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 ExchangeAct 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 companyand have:(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure thatmaterial information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly duringthe 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, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance withgenerally 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 thedisclosure 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 reportthat has materially affected, or is reasonably likely to materially affect, the company's internal control over financial reporting; and5. The company's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to thecompany'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 toadversely 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 overfinancial reporting.Date: February 14, 2014/s/ Evangelos J. Pistiolis Evangelos J. Pistiolis Chief Executive Officer (Principal Executive Officer) Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Exhibit 12.2CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICERI, Alexandros Tsirikos, certify that:1. I have reviewed this annual report on Form 20-F of Top Ships Inc.;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 statementsmade, 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 financialcondition, 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 ExchangeAct 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 companyand have:(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure thatmaterial information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly duringthe 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, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance withgenerally 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 thedisclosure 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 reportthat has materially affected, or is reasonably likely to materially affect, the company's internal control over financial reporting; and5. The company's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to thecompany'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 toadversely 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 overfinancial reporting.Date: February 14, 2014/s/ Alexandros Tsirikos Alexandros Tsirikos Chief Financial Officer (Principal Financial Officer) Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Exhibit 13.1 PRINCIPAL EXECUTIVE OFFICER CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 In connection with this Annual Report of Top Ships Inc. (the "Company") on Form 20-F for the year ended December 31, 2013 as filed with the Securities andExchange Commission (the "SEC") on or about the date hereof (the "Report"), I, Evangelos J. Pistiolis, Chief Executive Officer of the Company, certify,pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the SEC or its staff uponrequest. Date: February 14, 2014 /s/ Evangelos J. Pistiolis Evangelos J. Pistiolis Chief Executive Officer (Principal Executive Officer) Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Exhibit 13.2 PRINCIPAL FINANCIAL OFFICER CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 In connection with this Annual Report of Top Ships Inc. (the "Company") on Form 20-F for the year ended December 31, 2013 as filed with the Securities andExchange Commission (the "SEC") on or about the date hereof (the "Report"), I, Alexandros Tsirikos, 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 uponrequest. Date: February 14, 2014 /s/ Alexandros Tsirikos Alexandros Tsirikos Chief Financial Officer (Principal Financial Officer) Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Source: TOP SHIPS INC., 20-F, February 14, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.

Continue reading text version or see original annual report in PDF format above