20-F

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 20-F

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

OR

 ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2014

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to

OR

 ☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report. . . . . . . . . . . . . . . .

Commission file number 001-33655

PARAGON SHIPPING INC.

(Exact name of Registrant as specified in its charter)

Paragon Shipping Inc.

(Translation of Registrant's name into English)

Republic of the Marshall Islands

(Jurisdiction of incorporation or organization)

15 Karamanli Ave., GR 166 73, Voula, Greece

(Address of principal executive offices)

Aikaterini Stoupa, +30 210 891 4600, k.stoupa@paragonshipping.gr

15 Karamanli Ave., GR 166 73, Voula, Greece

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

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

Title of each class	Name of each exchange on which registered
Common shares, $0.001 par value	Nasdaq Global Market
Preferred stock purchase rights	Nasdaq Global Market
8.375% Senior Notes due 2021	Nasdaq Global Market

Securities registered or to be registered pursuant to Section 12(g) of the Act: None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None

Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report: As of December 31, 2014, there were 24,809,142 shares of the registrant's Common Stock, par value $0.001 per share, outstanding.

Indicate by check mark if the registrant is a well‑known seasoned issuer, as defined in Rule 405 of the Securities Act.

☐ Yes    ☒  No

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

☐ Yes    ☒  No

Note-Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

☒  Yes    ☐ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

☒  Yes    ☐  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.  See the definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  ☐ Accelerated filer   ☒ Non-accelerated filer  ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP  ☒ International Financial Reporting Standards as issued by the International Accounting Standards  ☐ Other   ☐

If "Other" has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.

☐  Item 17   ☐ Item 18

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

☐ Yes    ☒  No

TABLE OF CONTENTS

FORWARD-LOOKING STATEMENTS	1
PART I	2

	Item 1.	Identity of Directors, Senior Management and Advisers	2
	Item 2.	Offer Statistics and Expected Timetable	2
	Item 3.	Key Information	2
	Item 4.	Information on the Company	32
	Item 4A.	Unresolved Staff Comments	49
	Item 5.	Operating and Financial Review and Prospects	49
	Item 6.	Directors, Senior Management and Employees	73
	Item 7.	Major Shareholders and Related Party Transactions	78
	Item 8.	Financial information	84
	Item 9.	Listing Details	85
	Item 10.	Additional Information	86
	Item 11.	Quantitative and Qualitative Disclosures about Market Risk	96
	Item 12.	Description of Securities Other than Equity Securities	97
PART II			98
	Item 13.	Defaults, Dividend Arrearages and Delinquencies	98
	Item 14.	Material Modifications to the Rights of Security Holders and Use of Proceeds	98
	Item 15.	Controls and Procedures	98
	Item 16.	Reserved	99
	Item 16A.	Audit Committee Financial Expert	99
	Item 16B.	Code of Ethics	99
	Item 16C.	Principal Accountant Fees and Services	100
	Item 16D.	Exemptions from the Listing Standards for Audit Committees	100
	Item 16E.	Purchases of Equity Securities by the Issuer and Affiliated Purchasers	100
	Item 16F.	Change in Registrant's Certifying Accountant	100
	Item 16G.	Corporate Governance	100
	Item 16H.	Mine Safety Disclosure	101
PART III			102
	Item 17.	Financial Statements	102
	Item 18.	Financial Statements	102
	Item 19.	Exhibits	102
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS			F-1

FORWARD-LOOKING STATEMENTS

Paragon Shipping Inc., or the Company, desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. This document and any other written or oral statements made by us or on our behalf may include forward-looking statements, which reflect our current views with respect to future events and financial performance. The words "believe," "except," "anticipate," "intends," "estimate," "forecast," "project," "plan," "potential," "will," "may," "should," "expect" and similar expressions identify forward-looking statements. The Company assumes no obligation to update or revise any forward-looking statements. Forward-looking statements in this annual report on Form 20-F and written or oral forward-looking statements attributable to the Company or its representatives after the date of this Form 20-F are qualified in their entirety by the cautionary statement contained in this paragraph and in other reports hereafter filed by the Company with the Securities and Exchange Commission, or the SEC.

The forward-looking statements in this document are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management's examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies, which are difficult or impossible to predict and are beyond our control, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections.

In addition to these important factors and matters discussed elsewhere herein, important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include: the strength of world economies, fluctuations in currencies and interest rates, general market conditions, including fluctuations in charter hire rates and vessel values, changes in demand in the drybulk shipping industry, changes in the Company's operating expenses, including bunker prices, dry-docking and insurance costs, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions, potential disruption of shipping routes due to accidents or political events, and other important factors described from time to time in the reports filed by the Company with the SEC.

Please note in this annual report, references to "we," "us," "our," and "the Company," all refer to Paragon Shipping Inc. and its subsidiaries, unless otherwise stated or the context otherwise requires.

1

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

A. Selected Consolidated Financial Data

The following table sets forth our selected consolidated financial data and other operating data, which are stated in U.S. dollars, other than share data, as of and for the years ended December 31, 2010, 2011, 2012, 2013 and 2014. The selected data is derived from our audited consolidated financial statements and notes thereto, which have been prepared in accordance with U.S. generally accepted accounting principles, or U.S. GAAP.

Our audited consolidated statements of operations, shareholders' equity and cash flows for the years ended December 31, 2012, 2013 and 2014, and the consolidated balance sheets at December 31, 2013 and 2014, together with the notes thereto, are included elsewhere in this annual report. The following data should be read in conjunction with "Item 5. Operating and Financial Review and Prospects," the consolidated financial statements, related notes and other financial information included elsewhere in this annual report.

Following the 10-for-1 reverse stock split effectuated on November 5, 2012, pursuant to which every ten shares of our common stock issued and outstanding were converted into one share of common stock, all share and per share amounts disclosed in the table below and in our consolidated financial statements included at the end of this annual report have been retroactively restated to reflect this change in capital structure. Please refer to "Item 4. Information on the Company – A. History and development of the Company."

	2010		2011			2012			2013			2014
STATEMENT OF COMPREHENSIVE INCOME / (LOSS) DATA
(Expressed in United States Dollars, except for share data)
Net revenue	$	111,700,109	$	86,907,967		$	50,300,679		$	56,256,756		$	54,763,678
Operating income / (loss)		34,121,346		(275,225,740	)		2,293,932			(2,954,345	)		(33,831,017	)
Net income / (loss)		22,895,280		(283,498,759	)		(17,557,125	)		(16,953,032	)		(51,796,181	)
Comprehensive income / (loss)		22,895,280		(283,498,759	)		(18,184,229	)		(16,585,739	)		(51,687,356	)
Earnings / (loss) per Class A common share, basic and diluted	$	4.43	$	(47.61	)	$	(2.84	)	$	(1.31	)	$	(2.18	)
Weighted average number of Class A common shares, basic and diluted		4,981,272		5,793,792			6,035,910			12,639,128			23,326,062
Dividends declared per Class A common share	$	2.00	$	0.50			—			—			—

2

	Year ended December 31,
	2010			2011			2012			2013			2014
OTHER FINANCIAL DATA
(Expressed in United States Dollars)
Net cash from / (used in) operating activities	$	60,613,801		$	45,467,429		$	13,376,809		$	4,563,696		$	(6,181,843	)
Net cash (used in) / from investing activities		(142,151,113	)		43,673,793			(15,702,244	)		(6,441,495	)		(104,546,565	)
Net cash (used in) / from financing activities		(17,634,931	)		(109,365,640	)		5,438,803			15,502,871			86,456,958

	As of December 31,
	2010		2011		2012		2013		2014
BALANCE SHEET DATA
(Expressed in United States Dollars)
Total current assets	$	55,503,278	$	37,457,564	$	31,333,204	$	44,220,084	$	26,688,017
Total assets		821,276,010		432,073,937		419,974,902		419,545,980		460,965,117
Total current liabilities		45,212,355		40,486,845		21,971,886		23,655,911		28,482,791
Long-term debt		282,757,012		169,096,000		181,114,926		162,857,176		210,064,414
Total liabilities		330,804,343		210,849,790		204,454,389		186,895,203		238,564,574
Capital stock		5,587		6,090		11,001		17,669		24,809
Total shareholders' equity / net assets		490,471,667		221,224,147		215,520,513		232,650,777		222,400,543

B. Capitalization and Indebtedness

Not applicable.

C. Reasons for the Offer and Use of Proceeds

Not applicable.

D. Risk Factors

Some of the following risks relate principally to us, the industry in which we operate and our business in general. Other risks relate principally to the securities market and ownership of our common shares. The occurrence of any of the events described in this section could significantly and negatively affect our business, financial condition, operating results or cash available for dividends or the trading price of our common shares.

Industry Specific Risk Factors

The drybulk shipping industry is cyclical and volatile, with charter hire rates and profitability currently at depressed levels, and the recent global economic recession has resulted in decreased demand for drybulk shipping, which has and may continue to negatively impact our operations.

The drybulk shipping industry is cyclical with attendant volatility in charter hire rates and profitability. The degree of charter hire rate volatility among different types of drybulk carriers varies widely; however, the continued downturn in the drybulk charter market has severely affected the entire drybulk shipping industry and charter hire rates for drybulk vessels have declined significantly from historically high levels in 2008. Fluctuations in charter rates result from changes in the supply of and demand for vessel capacity and changes in the supply of and demand for drybulk cargoes carried internationally at sea, including coal, iron ore, grain and minerals. Because the factors affecting the supply of and demand for vessels are outside of our control and are unpredictable, the nature, timing, direction and degree of changes in industry conditions are also unpredictable. We cannot assure you that we will be able to successfully charter our vessels in the future or renew existing charters upon their expiration or termination, all of which are scheduled to expire in 2015, assuming the earliest redelivery dates, at rates sufficient to allow us to meet our obligations or at all.

3

Factors that influence demand for vessel capacity include:

· supply of and demand for energy resources, commodities and drybulk cargoes;

· changes in the exploration or production of energy resources commodities, and drybulk cargoes;

· the location of regional and global exploration, production and manufacturing facilities;

· the location of consuming regions for energy resources, commodities and drybulk cargoes;

· the globalization of production and manufacturing;

· global and regional economic and political conditions, including armed conflicts and terrorist activities, embargoes and strikes;

· developments in international trade;

· changes in seaborne and other transportation patterns, including the distance cargo is transported by sea;

· environmental and other regulatory developments;

· currency exchange rates; and

· weather.

The factors that could influence the supply of vessel capacity include:

· the number of newbuilding deliveries;

· port and canal congestion;

· the scrapping rate of older vessels;

· vessel casualties; and

· the number of vessels that are out of service, namely those that are laid-up, dry-docked, awaiting repairs or otherwise not available for hire.

In addition to the prevailing and anticipated freight rates, factors that affect the rate of newbuilding, scrapping and laying-up include newbuilding prices, secondhand vessel values in relation to scrap prices, costs of bunkers and other operating costs, costs associated with classification society surveys, normal maintenance and insurance coverage, the efficiency and age profile of the existing drybulk fleet in the market and government and industry regulation of maritime transportation practices, particularly environmental protection laws and regulations. These factors influencing the supply of and demand for shipping capacity are outside of our control, and we may not be able to correctly assess the nature, timing and degree of changes in industry conditions.

We anticipate that the future demand for our drybulk carriers will be dependent upon economic growth in the world's economies, including China and India, seasonal and regional changes in demand, changes in the capacity of the global drybulk carrier fleet and the sources and supply of drybulk cargoes to be transported by sea. Given the large number of new drybulk carriers currently on order with the shipyards, the capacity of the global drybulk carrier fleet seems likely to increase and there can be no assurance that economic growth will resume or continue. Adverse economic, political, social or other developments could have a material adverse effect on our business and operating results.

4

The downturn in the drybulk carrier charter market has had and may continue to have an adverse effect on our revenues, earnings and profitability, and may adversely affect our ability to comply with our debt covenants.

The downturn in the drybulk charter market, from which we derive our revenues, has severely affected the entire drybulk shipping industry and our business. The Baltic Dry Index, or the BDI, an index published by the Baltic Exchange Limited of shipping rates for key drybulk routes, which has long been viewed as the main benchmark to monitor the movements of the drybulk vessel charter market and the performance of the entire drybulk shipping market, declined 94% from a peak of 11,793 in May 2008 to a low of 663 in December 2008 and has remained volatile since that time. During 2014, the BDI remained volatile, ranging from a high of 2,113 to a low of 723. The BDI recorded a 25-year record low of 509 in February 2015 and has since increased to 586 as of April 15, 2015.

The downturn and volatility in drybulk charter rates has had a number of adverse consequences for drybulk shipping, including, among other things:

· an absence of financing for vessels;

· no active second-hand market for the sale of vessels;

· extremely low charter rates, particularly for vessels employed in the spot market;

· widespread loan covenant defaults in the drybulk shipping industry; and

· declaration of bankruptcy by some operators, shipowners, as well as charterers.

The occurrence of one or more of these events could adversely affect our business, results of operations, cash flows and financial condition.

The decline and volatility in charter rates in the drybulk market also affects the value of our drybulk vessels, which follows the trends of drybulk charter rates, and earnings on our charters, and similarly, affects our cash flows, liquidity and ability to comply with the financial and security coverage ratio covenants contained in our debt agreements. There can be no assurance as to how long charter rates and vessel values will remain at their current levels and the market could decline. If charter rates and vessel values in the drybulk market decline and remain at low levels for any significant period in 2015, this will have an adverse effect on our revenues, profitability, cash flows and our ability to maintain compliance with the financial and security coverage ratio covenants contained in our debt agreements.

If economic conditions throughout the world do not improve, it will impede our results of operations, financial condition and cash flows, and could cause the market price of our common shares to further decline.

Negative trends in the global economy that emerged in 2008 continue to adversely affect global economic conditions. The world economy continues to face a number of challenges, including uncertainty related to the continuing discussions in the United States regarding the federal debt ceiling and turmoil and hostilities in the Middle East, North Africa and other geographic areas and countries and continuing economic weakness in the European Union. The downturn in the global economy has caused, and may continue to cause, a decrease in worldwide demand for certain goods and, thus, shipping. While market conditions have improved since 2008, continuing 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 and cash flows, have caused the price of our common shares to decline and could cause the price of our common shares to decline further.

The economies of the United States, the European Union and other parts of the world continue to experience relatively slow growth or remain in recession and exhibit weak economic trends. Over the past five years, credit markets in the United States and Europe have experienced significant contraction, deleveraging and reduced liquidity. While credit conditions are improving, global financial markets and economic conditions have been, and continue to be, disrupted and volatile. Since 2008, lending by financial institutions worldwide remains at lower levels compared to the period preceding 2008. As of December 31, 2014, we had total outstanding indebtedness of $230.8 million under our debt agreements, which include our credit and loan facilities and the indenture governing our 8.375% Senior Notes due 2021, or our Notes.

5

Continued economic slowdown in the Asia Pacific region, especially in Japan and China, may exacerbate the effect on us of the recent slowdown in the rest of the world. Before the global economic financial crisis that began in 2008, China had one of the world's fastest growing economies in terms of gross domestic product, or GDP, which had a significant impact on shipping demand. The growth rate of China's GDP is estimated to be around 7.4%, down from a growth rate of 7.7% for the year ended December 31, 2013, and remaining below pre-2008 levels. China and other countries in the Asia Pacific region may continue to experience slowed or even negative economic growth in the future. Our results of operations and ability to grow our fleet would be impeded by a continuing or worsening economic downturn in any of these countries.

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, the European Commission created the European Financial Stability Facility, or the EFSF, and the European Financial Stability Mechanism, or the EFSM, to provide funding to Eurozone countries in financial difficulties that seek such support. In September 2012, the European Council established a permanent stability mechanism, the European Stability Mechanism, or the ESM, to assume the role of the EFSF and the EFSM in providing external financial assistance to Eurozone countries. Despite these measures, concerns persist regarding the debt burden of certain Eurozone countries and their ability to meet future financial obligations and the overall stability of the Euro. Potential adverse developments in the outlook for European countries could reduce the overall demand for drybulk cargoes and for our services. Market perceptions concerning these and related issues could affect our financial position, results of operations and cash flow.

The current state of global financial markets and current economic conditions may adversely impact our ability to obtain additional financing or refinance our existing debt agreements on acceptable terms which may hinder or prevent us from expanding our business.

Global financial markets and economic conditions continue to be volatile. This volatility has negatively affected the general willingness of banks and other financial institutions to extend credit, particularly in the shipping industry, due to the historically volatile asset values of vessels.The current state of global financial markets might adversely impact our ability to issue additional equity at prices which will not be dilutive to our existing shareholders or preclude us from issuing equity at all.

Also, as a result of concerns about the stability of financial markets generally and the solvency of counterparties specifically, the cost of obtaining money from the credit markets has increased as many lenders have increased interest rates, enacted tighter lending standards, refused to refinance existing debt at 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 certain that additional financing will be available if needed and to the extent required, or that we will be able to refinance our existing debt agreements, on acceptable terms or at all. If additional financing or refinancing is not available when needed, or is available only on unfavorable terms, we may be unable to meet our obligations as they come due or we may be unable to enhance our existing business, complete additional vessel acquisitions or otherwise take advantage of business opportunities as they arise.

6

A decrease in the level of China's export of goods or an increase in trade protectionism could have a material adverse impact on our charterers' business and, in turn, could cause a material adverse impact on our results of operations, financial condition and cash flows.

China exports considerably more goods than it imports. Our vessels may be deployed on routes involving trade in and out of emerging markets, and our charterers' shipping and business revenue may be derived from the shipment of goods from the Asia Pacific region to various overseas export markets including the United States and Europe. Any reduction in or hindrance to the output of China-based exporters could have a material adverse effect on the growth rate of China's exports and on our charterers' business. For instance, the government of China has recently implemented economic policies aimed at increasing domestic consumption of Chinese-made goods. This may have the effect of reducing the supply of goods available for export and may, in turn, result in a decrease of demand for drybulk shipping. Additionally, though in China there is an increasing level of autonomy and a gradual shift in emphasis to a "market economy" and enterprise reform, many of the reforms, particularly some limited price reforms that result in the prices for certain commodities being principally determined by market forces, are unprecedented or experimental and may be subject to revision, change or abolition. The level of imports to and exports from China could be adversely affected by changes to these economic reforms by the Chinese government, as well as by changes in political, economic and social conditions or other relevant policies of the Chinese government.

Our operations expose us to the risk that increased trade protectionism will adversely affect our business. If the global economic recovery is undermined by downside risks and the recent economic downturn is prolonged, governments may turn to trade barriers to protect their domestic industries against foreign imports, thereby depressing the demand for shipping. Specifically, increasing trade protectionism in the markets that our charterers serve has caused and may continue to cause an increase in: (i) the cost of goods exported from China, (ii) the length of time required to deliver goods from China and (iii) the risks associated with exporting goods from China, as well as a decrease in the quantity of goods to be shipped.

Any increased trade barriers or restrictions on trade, especially trade with China, would have an adverse impact on our charterers' business, operating results and financial condition and could thereby affect their ability to make timely charter hire payments to us and to renew and increase the number of their time charters with us. This could have a material adverse effect on our business, results of operations and financial condition.

World events could adversely affect our results of operations and financial condition.

Terrorist attacks and the threat of future terrorist attacks around the world may cause uncertainty in the world's financial markets and may affect our business, operating results and financial condition.Continuing conflicts and recent developments in the Middle East, including Egypt, and North Africa, and the presence of U.S. or other armed forces in the Middle East, may lead to additional acts of terrorism and armed conflict around the world, which may contribute to further economic instability in the global financial markets. These uncertainties could also adversely affect our ability to obtain additional financing on terms acceptable to us or at all. In the past, political conflicts have also resulted in attacks on vessels, such as the attack on the MT Limburg, a vessel unaffiliated with us, in October 2002, mining of waterways and other efforts to disrupt international shipping, particularly in the Arabian Gulf region. Acts of terrorism and piracy have also affected vessels trading in regions such as the South China Sea and the Gulf of Aden off the coast of Somalia. Any of these occurrences could have a material adverse impact on our operating results.

In the highly competitive international shipping industry, we may not be able to compete for charters with new entrants or established companies with greater resources, and as a result, we may be unable to employ our vessels profitably, which may have a material adverse effect on our business, prospects, financial conditions, liquidity and results of operations.

We employ our vessels in a highly competitive market that is capital intensive and highly fragmented. Competition arises primarily from other vessel owners, some of whom have substantially greater resources than we have. Competition for the transportation of drybulk cargo is intense and depends on price, location, size, age, condition and the acceptability of the vessel and its operators to the charterers. Due in part to the highly fragmented market, many of our competitors with greater resources and access to capital than we have, could enter the drybulk shipping industry and operate larger fleets than we do through consolidations or acquisitions and may be able to offer lower charter rates and higher quality vessels than we are able to offer. If this were to occur, we may be unable to retain or attract new charterers on attractive terms or at all, which may have a material adverse effect on our business, prospects, financial condition, liquidity and results of operations.

7

Acts of piracy on ocean-going vessels have recently increased in frequency, which could adversely affect our business.

Acts of piracy have historically affected ocean-going vessels trading in regions of the world such as the South China Sea, the Indian Ocean, off the coast of West Africa and in the Gulf of Aden off the coast of Somalia. Although the frequency of sea piracy worldwide decreased during 2014 as compared to 2013, sea piracy incidents continue to occur, particularly in the Gulf of Aden off the coast of Somalia and increasingly in the Gulf of Guinea, with drybulk vessels and tankers particularly vulnerable to such attacks. If these piracy attacks occur in regions in which our vessels are deployed that insurers characterized as "war risk" zones, or Joint War Committee "war and strikes" listed areas, premiums payable for such coverage could increase significantly and such insurance coverage may be more difficult to obtain. In addition, crew costs, including due to employing onboard security guards, could increase in such circumstances. Furthermore, while we believe the charterer remains liable for charter payments when a vessel is seized by pirates, the charterer may dispute this and withhold charter hire until the vessel is released. A charterer may also claim that a vessel seized by pirates was not "on-hire" for a certain number of days and is therefore entitled to cancel the charter party, a claim that we would dispute.We may not be adequately insured to cover losses from these incidents, which could have a material adverse effect on us. In addition, any detention hijacking as a result of an act of piracy against our vessels, or an increase in cost, or unavailability, of insurance for our vessels, could have a material adverse impact on our business, financial condition and results of operations.

If our vessels call on ports located in countries that are subject to restrictions imposed by the U.S. or other governments, our reputation and the market for our common shares could be adversely affected.

From time to time on our charterers' instructions, our vessels may call on ports located in countries subject to sanctions and embargoes imposed by the U.S. government and countries identified by the U.S. government as state sponsors of terrorism, such as 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 Iran Sanctions Accountability and Divestment Act, or CISADA, amended the Iran Sanctions Act. Among other things, CISADA introduces limits on the ability of companies and persons to do business or trade with Iran when such activities relate to the investment, supply or export of refined petroleum or petroleum products. In addition, in 2012, President Obama signed Executive Order 13608 which prohibits foreign persons from violating or attempting to violate, or causing a violation of any sanctions in effect against Iran or facilitating any deceptive transactions for or on behalf of any person subject to U.S. sanctions. Any persons found to be in violation of Executive Order 13608 will be deemed a foreign sanctions evader and will be banned from all contacts with the United States, including conducting business in U.S. dollars. Also in 2012, President Obama signed into law the Iran Threat Reduction and Syria Human Rights Act of 2012, or the Iran Threat Reduction Act, which created new sanctions and strengthened existing sanctions. Among other things, the Iran Threat Reduction Act intensifies existing sanctions regarding the provision of goods, services, infrastructure or technology to Iran's petroleum or petrochemical sector. The Iran Threat Reduction Act also includes a provision requiring the President of the United States to impose five or more sanctions from Section 6(a) of the Iran Sanctions Act, as amended, on a person the President determines is a controlling beneficial owner of, or otherwise owns, operates, or controls or insures a vessel that was used to transport crude oil from Iran to another country and (1) if the person is a controlling beneficial owner of the vessel, the person had actual knowledge the vessel was so used or (2) if the person otherwise owns, operates, or controls, or insures the vessel, the person knew or should have known the vessel was so used. Such a person could be subject to a variety of sanctions, including exclusion from U.S. capital markets, exclusion from financial transactions subject to U.S. jurisdiction, and exclusion of that person's vessels from U.S. ports for up to two years.

On November 24, 2013, the P5+1 (the United States, United Kingdom, Germany, France, Russia and China) entered into an interim agreement with Iran entitled the "Joint Plan of Action," or the JPOA. Under the JPOA it was agreed that, in exchange for Iran taking certain voluntary measures to ensure that its nuclear program is used only for peaceful purposes, the U.S. and EU would voluntarily suspend certain sanctions for a period of six months. On January 20, 2014, the U.S. and E.U. indicated that they would begin implementing the temporary relief measures provided for under the JPOA. These measures include, among other things, the suspension of certain sanctions on the Iranian petrochemicals, precious metals, and automotive industries from January 20, 2014 until July 20, 2014. The U.S. initially extended the JPOA until November 24, 2014, and it has since extended it until June 30, 2015.

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Although we believe that we have been in compliance with all applicable sanctions and embargo laws and regulations, and intend to maintain such compliance, there can be no assurance that we will be in compliance in the future, particularly as the scope of certain laws may be unclear and may be subject to changing interpretations. Any such violation could result in fines, penalties or other sanctions that could severely impact our ability to access U.S. capital markets and conduct our business, and could result in some investors deciding, or being required, to divest their interest, or not to invest, in us. In addition, certain institutional investors may have investment policies or restrictions that prevent them from holding securities of companies that have contracts with countries identified by the U.S. government as state sponsors of terrorism. The determination by these investors not to invest in, or to divest from, our common shares may adversely affect the price at which our common shares trade. Moreover, our charterers may violate applicable sanctions and embargo laws and regulations as a result of actions that do not involve us or our vessels, and those violations could in turn negatively affect our reputation. In addition, our reputation and the market for our securities may be adversely affected if we engage in certain other activities, such as entering into charters with individuals or entities in countries subject to U.S. sanctions and embargo laws that are not controlled by the governments of those countries, or engaging in operations associated with those countries pursuant to contracts with third parties that are unrelated to those countries or entities controlled by their governments. Investor perception of the value of our common stock may be adversely affected by the consequences of war, the effects of terrorism, civil unrest and governmental actions in these and surrounding countries.

 An over-supply of drybulk carrier capacity may lead to a further reduction in charter rates, which may limit our ability to operate our vessels profitably.

The market supply of drybulk carriers has been increasing in large part as a result of the delivery of numerous newbuilding orders over the last few years, and the number of drybulk carriers on order still remains significant. These newbuildings were delivered in significant numbers starting at the beginning of 2006 and continued to be delivered in significant numbers through 2014. As of March 2015, newbuilding orders had been placed for an aggregate of about 20% of the current global drybulk fleet, with deliveries expected during the next three years.

An over-supply of drybulk carrier capacity, particularly in conjunction with the currently reduced level of demand for drybulk shipping, may result in a further reduction of charter hire rates or prolong the period during which low charter hire rates prevail. If the current low charter rate environment persists or worsens and the drybulk global fleet capacity increases due to the delivery of newbuildings or further redeployment of previously idle vessels, we may not be able to recharter our drybulk vessels upon the expiration or termination of our current charters, all of which are scheduled to expire in 2015, assuming the earliest redelivery dates, or charter our drybulk newbuilding vessels that are scheduled to be delivered to us from the second quarter of 2015 through the fourth quarter of 2015 for which we have not yet arranged employment, at rates suitable to meet our obligations or at all.

The market value of our vessels has declined and may further decline, which could limit the amount of funds that we can borrow and has triggered and could in the future trigger breaches of certain financial and security coverage ratio covenants contained in certain of our current and future debt agreements and we may incur a loss if we sell vessels following a decline in their market value.

The fair market value of our vessels has generally experienced high volatility and has declined significantly. The fair market value of our vessels may continue to fluctuate depending on a number of factors, including:

· prevailing level of charter rates;

· general economic and market conditions affecting the shipping industry, including competition from other shipping companies;

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· types, sizes and ages of vessels;

· supply of and demand for vessels;

· other modes of transportation;

· cost of newbuildings;

· governmental or other regulations;

· the need to upgrade secondhand and previously owned vessels as a result of charterer requirements, technological advances in vessel design or equipment or otherwise; and

· competition from other shipping companies and the availability of other modes of transportation.

In addition, as vessels grow older, they generally decline in value. If the fair market value of our vessels declines further, we may not be in compliance with certain covenants contained in our debt agreements and we may not be able to refinance our debt or obtain additional financing. If we are not able to comply with the covenants in our debt agreements, and are unable to remedy the relevant breach, our lenders could accelerate our debt and foreclose on our vessels. Furthermore, if we sell any of our owned vessels at a time when prices are depressed, our business, results of operations, cash flow and financial condition could be adversely affected. Moreover, if we sell vessels at a time when vessel prices have fallen and before we have recorded an impairment adjustment to our financial statements, the sale may be at a price less than the vessel's carrying amount in our financial statements, resulting in a loss and a reduction in earnings. In addition, if vessel values persist or decline further, we may have to record an impairment adjustment in our financial statements which could adversely affect our financial results.

Charter rates are subject to seasonal fluctuations, which could affect our operating results and the amount of available cash with which we can pay dividends, if any, in the future.

All of our vessels are currently employed on fixed rate time charters or voyage charters with expirations ranging from April 2015 to April 2016. Our vessels operate in markets that have historically exhibited seasonal variations in demand and, as a result, in charter hire rates. This seasonality may result in volatility in our operating results to the extent that we enter into new charter agreements, renew existing agreements during a time when charter rates are weaker or operate our vessels on the spot market, which could affect the amount of dividends, if any, that we pay to our shareholders from quarter to quarter. The drybulk carrier market is typically stronger in the fall and winter months in anticipation of increased consumption of coal and other raw materials in the northern hemisphere during the winter months. In addition, unpredictable weather patterns during these months tend to disrupt vessel scheduling and supplies of certain commodities. While this seasonality has not materially affected our operating results, it could materially affect our operating results and cash available for distribution to our shareholders as dividends, if any, in the future.

Rising fuel, or bunker prices, may adversely affect profits.

While we generally will not bear the cost of fuel, or bunkers, for vessels operating on time charters, fuel is a significant factor in negotiating charter rates. As a result, an increase in the price of fuel beyond our expectations may adversely affect our profitability at the time of charter negotiation. Fuel is also a significant, if not the largest, expense in our shipping operations when vessels are under voyage charter. The price and supply of fuel is unpredictable and fluctuates based on events outside our control, including geopolitical developments, supply and demand for oil and gas, actions by the Organization of Petroleum Exporting Countries, or OPEC, and other oil and gas producers, war and unrest in oil producing countries and regions, regional production patterns and environmental concerns.

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Further, fuel may become much more expensive in the future, which may reduce the profitability and competitiveness of our business versus other forms of transportation, such as truck or rail.

Compliance with safety and other vessel requirements imposed by classification societies may be very costly and may adversely affect our business.

The hull and machinery of every commercial vessel must be certified as being "in class" by a classification society authorized by its country of registry. The classification society certifies that a vessel is safe and seaworthy in accordance with the applicable rules and regulations of the country of registry of the vessel and the Safety of Life at Sea Convention.

A vessel must undergo annual surveys, intermediate surveys and special surveys. In lieu of a special survey, a vessel's machinery may be on a continuous survey cycle under which the machinery would be surveyed periodically over a five-year period. Every vessel is also required to be dry-docked every two and a half to five years for inspection of its underwater parts.

Compliance with the above requirements may result in significant expense. If any vessel does not maintain its class or fails any annual, intermediate or special survey, the vessel will be unable to trade between ports and will be unemployable and uninsurable, which could have a material adverse effect on our business, results of operations, cash flows, financial condition and ability to pay dividends.

We are subject to complex laws and regulations, including environmental regulations that can adversely affect the cost, manner or feasibility 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 and national and international regulations in force in the jurisdictions in which our vessels operate or are registered, which can significantly affect the ownership and operation of our vessels. These regulations include, but are not limited to, European Union Regulations, U.S. Oil Pollution Act of 1990, or OPA, the U.S. Comprehensive Environmental Response, Compensation and Liability Act of 1980, or CERCLA, the U.S. Clean Air Act, the U.S. Clean Water Act and the U.S. Marine Transportation Security Act of 2002, and regulations of the International Maritime Organization, or the IMO, including the International Convention for the Prevention of Pollution from Ships of 1975, the International Convention for the Prevention of Marine Pollution of 1973, the IMO International Convention for the Safety of Life at Sea of 1974 and the International Convention on Load Lines of 1966. Compliance with such laws, regulations and standards, where applicable, may require installation of costly equipment or operational 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 existing and 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 with applicable 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 to liability without regard to whether we were negligent or at fault. Under OPA, for example, owners, operators and bareboat charterers are jointly and severally strictly liable for the discharge of oil within the 200-mile exclusive economic zone around the United States. Furthermore, the 2010 explosion of the Deepwater Horizon and the subsequent release of oil into the Gulf of Mexico, or other events, may result in further regulation of the shipping industry, including modifications to statutory liability schemes, which could have a material adverse effect on our business, financial condition, results of operations and cash flows. An oil spill could result in significant liability, including fines, penalties, criminal liability, remediation costs and natural resource damages under other federal, 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 we have arranged insurance to cover certain environmental risks, there can be no assurance that such insurance 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 flows and financial condition and our ability to pay dividends, if any, in the future.

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Risks associated with operating ocean‑going vessels could affect our business and reputation, which could adversely affect our revenues and stock price.

The operation of ocean‑going vessels carries inherent risks. These risks include the possibility of:

· marine disaster;

· environmental accidents;

· cargo and property losses or damage;

· business interruptions caused by mechanical failure, human error, war, terrorism, political action in various countries, labor strikes or adverse weather conditions; and

· piracy.

These hazards may result in death or injury to persons, loss of revenues or property, environmental damage, higher insurance rates, damage to our customer relationships, delay or rerouting. If our vessels suffer damage, they may need to be repaired at a dry-docking facility. The costs of dry-dock repairs are unpredictable 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 these vessels are being repaired and repositioned, as well as the actual cost of these repairs, would decrease our earnings. In addition, space at dry-docking facilities is 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 our vessels 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 are forced to wait for space or to steam to more distant dry-docking facilities would decrease our earnings. The involvement of our vessels in an environmental disaster may also harm our reputation as a safe and reliable vessel owner and operator.

We are subject to international safety regulations and the failure to comply with these regulations may subject us to increased liability, may adversely affect our insurance coverage and may result in our vessels being denied access to, or detained in, certain ports.

The operation of our vessels is affected by the requirements set forth in the United Nations' International Maritime Organization's International Management Code for the Safe Operation of Ships and Pollution Prevention, or ISM Code. The ISM Code requires shipowners, ship managers and bareboat charterers to develop and maintain an extensive "Safety Management System" that includes the adoption of a safety and environmental protection policy setting forth instructions and procedures for safe operation and describing procedures for dealing with emergencies. If we fail to comply with the ISM Code, we may be subject to increased liability, may invalidate existing insurance or decrease available insurance coverage for our affected vessels and such failure may result in a denial of access to, or detention in, certain ports. Each of the vessels that has been delivered to us is ISM Code-certified. However, if we are subject to increased liability for non-compliance or if our insurance coverage is adversely impacted as a result of non-compliance, it may negatively affect our ability to pay dividends, if any, in the future. If any of our vessels are denied access to, or are detained in, certain ports, our revenues may be adversely impacted.

In addition, vessel classification societies also impose significant safety and other requirements on our vessels. In complying with current and future environmental requirements, vessel owners and operators may also incur significant additional costs in meeting new maintenance and inspection requirements, in developing contingency arrangements for potential spills and in obtaining insurance coverage. Government regulation of vessels, particularly in the areas of safety and environmental requirements, can be expected to become stricter in the future and require us to incur significant capital expenditures on our vessels to keep them in compliance.

The operation of our vessels is also affected by other government regulation in the form of international conventions, national, state and local laws and regulations in force in the jurisdictions in which the vessels operate, as well as in the country or countries of their registration. Because such conventions, laws, and regulations are often revised, we cannot predict the ultimate cost of complying with such conventions, laws and regulations or the impact thereof on the resale prices or useful lives of our vessels. Additional conventions, laws and regulations may be adopted which could limit our ability to do business or increase the cost of our doing business and which may materially adversely affect our operations. We are required by various governmental and quasi-governmental agencies to obtain certain permits, licenses, certificates, and financial assurances with respect to our operations.

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Increased inspection procedures, tighter import and export controls and new security regulations could increase costs and disrupt our business.

International shipping is subject to various security and customs inspection and related procedures in countries of origin, destination and trans-shipment points. These security procedures can result in cargo seizure, delays in the loading, offloading, trans-shipment or delivery and the levying of customs duties, fines or other penalties against us.

It is possible that changes to inspection procedures could impose additional financial and legal obligations on us. Changes to inspection procedures could also impose additional costs and obligations on our customers and may, in certain cases, render the shipment of certain types of cargo uneconomical or impractical. Any such changes or developments may have a material adverse effect on our business, financial condition and results of operations.

The operation of drybulk carriers has certain unique operational risks, which could adversely affect our earnings and cash flow.

The operation of drybulk carriers has certain unique risks. With a drybulk carrier, the cargo itself and its interaction with the vessel can be an operational risk. By their nature, drybulk cargoes are often heavy, dense, easily shifted, and react badly to water exposure. In addition, drybulk carriers are often subjected to battering treatment during unloading operations with grabs, jackhammers (to pry encrusted cargoes out of the hold) and small bulldozers. This treatment may cause damage to the vessel. Vessels damaged due to treatment during unloading procedures may be more susceptible to breach to the sea. Hull breaches in drybulk carriers may lead to the flooding of the vessels' holds. If a drybulk carrier suffers flooding in its forward holds, the bulk cargo may become so dense and waterlogged that its pressure may buckle the vessel's bulkheads leading to the loss of a vessel. If we are unable to adequately maintain our vessels we may be unable to prevent these events. Any of these circumstances or events could negatively impact our business, financial condition, results of operations and ability to pay dividends, if any, in the future. In addition, the loss of any of our vessels could harm our reputation as a safe and reliable vessel owner and operator.

Maritime claimants could arrest one or more of our vessels, 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 a vessel for unsatisfied debts, claims or damages. In many jurisdictions, a maritime lienholder may enforce its lien by "arresting" or "attaching" a vessel through foreclosure proceedings. For example, in November 2012, one of our vessels was arrested due to a prior sub-charterer's unsettled bunkering expenses. The respective vessel was detained for approximately 19 days and was released in December 2012, after the issuance of a letter of guarantee from Allseas Marine S.A., or Allseas, a company controlled by our Chairman, President, Chief Executive Officer and Interim Chief Financial Officer, Mr. Michael Bodouroglou, that is responsible for the commercial and technical management functions for our fleet and provides the services of our executive officers, and continued its employment. The arrest or attachment of one or more of our vessels could interrupt our cash flow and require us to pay large sums of money to have the arrest or attachment lifted. In addition, in some jurisdictions, such as South Africa, under the "sister ship" theory of liability, a claimant may arrest both the vessel which is subject to the claimant's maritime lien and any "associated" vessel, which is any vessel owned or controlled by the same owner. Claimants could attempt to assert "sister ship" liability against one vessel in our fleet for claims relating to another of our vessels.

Governments could requisition our vessels during a period of war or emergency, resulting in a loss of earnings.

A government could requisition one or more of our vessels for title or for hire. Requisition for title occurs when a government takes control of a vessel and becomes her owner, while requisition for hire occurs when a government takes control of a vessel and effectively becomes her charterer at dictated charter rates. Generally, requisitions occur during periods of war or emergency, although governments may elect to requisition vessels in other circumstances. Although we would be entitled to compensation in the event of a requisition of one or more of our vessels, the amount and timing of payment would be uncertain. Government requisition of one or more of our vessels may negatively impact our revenues and reduce the amount of cash we have available for distribution as dividends, if any, to our shareholders.

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Failure to comply with the U.S. Foreign Corrupt Practices Act could result in fines, criminal penalties and an adverse effect on our business.

We may operate in a number of countries throughout the world, including countries known to have a reputation for corruption. We are committed to doing business in accordance with applicable anti-corruption laws and have adopted a code of business conduct and ethics which is consistent and in full compliance with the U.S. Foreign Corrupt Practices Act of 1977, or the FCPA. We are subject, however, to the risk that we, our affiliated entities or our or their respective officers, directors, employees and agents may take actions determined to be in violation of such anti-corruption laws, including the FCPA. Any such violation could result in substantial fines, sanctions, civil and/or criminal penalties, curtailment of operations in certain jurisdictions, and might adversely affect our business, results of operations or financial condition. In addition, actual or alleged violations could damage our reputation and ability to do business. Furthermore, detecting, investigating, and resolving actual or alleged violations is expensive and can consume significant time and attention of our senior management.

We conduct business in China, where the legal system has inherent uncertainties that could limit the legal protections available to us.

All of our vessels are currently employed on fixed rate time charters or voyage charters with expirations ranging from April 2015 to April 2016. Some of our vessels may be chartered to Chinese customers or from time to time, on our charterers' instructions, our vessels may call on Chinese ports. Such charters and any additional charters that we enter into may be subject to new regulations in China that may require us to incur new or additional compliance or other administrative costs and may require that we pay to the Chinese government new taxes or other fees. Changes in laws and regulations, including with regards to tax matters, and their implementation by local authorities could affect our vessels chartered to Chinese customers as well as our vessels calling to Chinese ports and could have a material adverse impact on our business, financial condition and results of operations.

Company Specific Risk Factors

We have not been in compliance with certain of the financial and other covenants contained in certain of our loan and credit facilities, for which we have obtained waivers or amendments or refinanced the affected debt. If we are not in compliance with the original covenants when our existing waivers expire and if we are not successful in obtaining additional waivers or amendments or refinancing the affected debt, our lenders may declare an event of default and accelerate our outstanding indebtedness, which would impact our ability to continue to conduct our business.

Our loan and credit facilities, which are secured by mortgages on our vessels, require us to maintain specified financial ratios mainly to ensure that the market value of the mortgaged vessels under the applicable credit facility, as determined in accordance with the terms of that agreement, does not fall below a certain percentage of the outstanding amount of the loan, which we refer to as a security cover ratio, and to satisfy certain other financial covenants. In general, these other financial covenants require us to maintain (i) minimum liquidity; (ii) a maximum leverage ratio; (iii) a minimum interest coverage ratio; (iv) a minimum market adjusted net worth; (v) a minimum debt service coverage ratio; (vi) a minimum equity ratio; and (vii) a minimum working capital.

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A violation of the security cover ratio, unless cured as set forth under the applicable loan or credit facility, or a violation of any of the financial covenants contained in our debt agreements constitutes an event of default, which, unless waived or modified by our lenders, provides our lenders with the right to require us to post additional collateral, enhance our equity and liquidity, increase our interest payments, pay down our indebtedness to a level where we are in compliance with our loan covenants, sell vessels in our fleet and accelerate our indebtedness and foreclose their liens on our vessels, or may cause us to reclassify our indebtedness as current liabilities, which would impair our ability to continue to conduct our business. As a result of intense fluctuations in the drybulk charter market and the related fluctuation in vessel values, we were not in compliance with certain financial and security cover ratio covenants contained in certain of our loan and credit facilities in the past, and as such, we obtained waivers of the relevant covenant breaches, entered into amendments to the relevant facilities or refinanced the affected debt and deposited additional security to cure the shortfall in the security cover required to be maintained under the relevant facilities. See "Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Long-Term Debt."

As of December 31, 2014, we had $230.8 million of outstanding indebtedness, including $25.0 million related to our Notes. As of that date, we were in compliance with all of our debt covenants contained in our debt agreements, with the exception of the security cover ratio covenant contained in one of our loan agreements, for which we subsequently obtained a waiver until December 31, 2015. However, given the current drybulk charter rates, it is probable that we will not be in compliance with several financial covenants contained in certain of our loan and credit facilities on the applicable measurement dates in 2015. We are currently in negotiations with such lenders, but we may not be successful in obtaining additional waivers of covenant breaches or amendments to covenants contained in our debt agreements or refinancing the affected debt if we are not in compliance with the original covenants in our debt agreements when our existing waivers expire.

All of our debt agreements contain a cross-default provision that may be triggered by a default under one of our other debt agreements. Because of the presence of cross default provisions in all of our debt agreements, the refusal of any one lender to grant or extend a waiver could result in all of our indebtedness being accelerated even if our other lenders have waived covenant defaults under the respective debt agreements. As a result of the cross-default provisions included in our debt agreements, actual breaches existing under our debt agreements could result in defaults under all of our debt and the acceleration of such debt by our lenders and the foreclosure of their liens on our vessels, which would impair our ability to conduct our business and continue as a going concern. If our outstanding indebtedness, which amounted to $230.8 million as of December 31, 2014, is accelerated in full or in part, in the current financing environment we may not be able to refinance our debt or obtain additional financing. Moreover, any refinancing or additional financing may be more expensive and carry more onerous terms than those in our existing debt agreements. In addition, if we find it necessary to sell our vessels at a time when vessel prices are low, we will recognize losses and a reduction in our earnings, which could affect our ability to raise additional capital necessary for us to comply with our debt agreements.

Our debt agreements contain restrictive covenants that may limit our liquidity and corporate activities and if we receive additional waivers and/or amendments to our debt agreements, our lenders may impose additional operating and financial restrictions on us and/or modify the terms of our existing debt agreements.

Our debt agreements, including our 8.375% Senior Notes due 2021, impose operating and financial restrictions on us. These restrictions may limit our ability to:

· incur additional indebtedness;

· create liens on our assets;

· sell capital stock of our subsidiaries;

· make investments;

· engage in mergers or acquisitions;

· pay dividends;

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· make capital expenditures;

· compete effectively to the extent our competitors are subject to less onerous financial restrictions;

· adjust and alter existing charters;

· change the management of our vessels or terminate or materially amend the management agreement relating to each vessel; and

· sell our vessels.

In addition, under these covenants, we are required to maintain minimum liquidity as discussed in Note 9 to our consolidated financial statements included at the end of this annual report.

Therefore, our discretion is limited because we may need to obtain consent from our lenders in order to engage in certain corporate actions and commercial actions that we believe would be in the best interest of our business, and a denial of permission may make it difficult for us to successfully execute our business strategy or effectively compete with companies that are not similarly restricted. In addition, certain of our other debt agreements contain additional restrictions and impose maximum limits on the per share dividend that we may pay per annum and require that we maintain certain minimum liquidity following the payment of any dividends. Our lenders' interests may be different from ours, and we cannot guarantee that we will be able to obtain our lenders' consent when needed. In addition to the above restrictions, our lenders may require the payment of additional fees, require prepayment of a portion of our indebtedness to them, accelerate the amortization schedule for our indebtedness and increase the interest rates they charge us on our outstanding indebtedness. These potential restrictions and requirements may further limit our ability to pay dividends, if any, in the future to you, finance our future operations, make acquisitions or pursue business opportunities.

Moreover, in connection with any additional waivers of or amendments to our debt agreements that we obtain, our lenders may impose additional operating and financial restrictions on us or modify the terms of our existing debt agreements. These restrictions may further restrict our ability to, among other things, pay dividends, make capital expenditures or incur additional indebtedness, including through the issuance of guarantees.

Our ability to comply with the covenants and restrictions contained in our debt agreements may be affected by economic, financial and industry conditions and other factors beyond our control. Any default under our debt agreements that is not waived or amended by the required lenders could prevent us from paying dividends in the future. If we are unable to repay indebtedness, the lenders under our loan and credit facilities could proceed against the collateral securing that indebtedness. In such case, we may be unable to repay the amounts due under our loan and credit facilities. This could have serious consequences for our financial condition and results of operations and could cause us to become bankrupt or insolvent. Our ability to comply with these covenants in future periods will also depend substantially on the value of our assets, the rates we earn under our charters, our ability to obtain charters, our success at keeping our costs low and our ability to successfully implement our overall business strategy. Any future credit agreement or amendment or debt instrument may contain similar or more restrictive covenants.

We will need to procure additional financing in order to complete the construction of our newbuilding vessels, which may be difficult to obtain on acceptable terms or at all.

As of the date of this annual report, our newbuilding program was comprised of two Ultramax drybulk carriers under construction at Yangzhou Dayang Shipbuilding Co. Ltd., or Dayang, scheduled for delivery in the third quarter of 2015, and three Kamsarmax drybulk carriers under construction at Jiangsu Yangzijiang Shipbuilding Co., or Yangzijiang, scheduled for delivery between the second and fourth quarter of 2015. The estimated total contractual cost of our newbuilding vessels amounted to $148.2 million, of which an aggregate of $101.7 million was outstanding as of the date of this annual report and is due upon delivery of the vessels.

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In order to complete the construction of our newbuilding program, we will need to procure additional financing. We have entered into a senior secured loan facility with a syndicate of major European Banks led by Nordea Bank Finland Plc, or Nordea, to finance up to 60% of the market value of our two Ultramax newbuilding drybulk carriers, the Hull numbers DY4050 and DY4052, and two of our Kamsarmax newbuilding drybulk carriers, the Hull numbers YZJ1144 and YZJ1145, that are expected to be delivered between the second and third quarter of 2015. We have not yet secured financing for our remaining Kamsarmax drybulk newbuilding that is expected to be delivered in the fourth quarter of 2015. If for any reason we fail to take delivery of the newbuilding vessels described above, we would be prevented from realizing potential revenues from these vessels, we may be required to forego deposits on construction, which amounted to an aggregate of $46.5 million as of the date of this annual report, and we may incur additional costs and liability to the shipyard under the construction contracts.

In addition, the actual or perceived credit quality of our charterers and any defaults by them, may materially affect our ability to obtain the additional capital resources that we will require in order to meet our capital commitments, or may significantly increase our costs of obtaining such capital. Our inability to obtain additional financing at all or at a higher level than the anticipated cost, may materially affect our results of operation and our ability to implement our business strategy, including our ability to take delivery of our vessels under construction. Should additional financing not be available on favorable terms or at all, this would have a material adverse effect on our business, financial condition, results of operations and cash flows.

Our earnings may be adversely affected if we do not successfully employ our vessels or employ our vessels at low charter rates.

We primarily employ our vessels in the spot charter market, on short-term time charters or on voyage charters, ranging from 10 days to three months. However, depending on the time charter market, we may decide from time to time to employ our vessels on medium to long-term time charters. As of the date of this annual report, all of our vessels are currently employed on fixed rate time charters or voyage charters with expirations ranging from April 2015 to April 2016. We have not yet secured employment for our two Ultramax drybulk carriers and for our three Kamsarmax drybulk carriers under construction, which are scheduled to be delivered to us between the second and fourth quarter of 2015. As of the date of this annual report, prevailing drybulk carrier charter rates are below historical averages. In the past, charter rates for vessels have declined below operating costs of vessels. If our vessels become available for employment in the spot market or under new time charters during periods when charter rates are at depressed levels, we may have to employ our vessels at depressed charter rates, if we are able to secure employment for our vessels at all, which would lead to reduced or volatile earnings. Future charter rates may not be at a level that will enable us to operate our vessels profitably to allow us to repay our debt and meet our other obligations.

We may not be able to raise equity and debt financing sufficient to meet our capital and operating needs and to comply with the covenants contained in our debt agreements, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

We cannot assure you that the net proceeds from any future equity offering or debt financing would be sufficient to satisfy our capital and operating needs and enable us to comply with our various debt covenants. In such case, we may not be able to raise additional equity capital or obtain additional debt financing or refinance our existing indebtedness, if necessary. If we are not able to comply with the covenants contained in our debt agreements and our lenders choose to accelerate our indebtedness and foreclose their liens, we could be required to sell vessels in our fleet and our ability to continue to conduct our business would be impaired.

Certain existing stockholders, who hold approximately 28.3% of our outstanding common shares, may have the power to exert control over us, which may limit your ability to influence our actions.

As of the date of this annual report, Mr. Michael Bodouroglou, our Chairman, President, Chief Executive Officer and Interim Chief Financial Officer, beneficially owned a total of 7,056,064 common shares, or approximately 28.3% of our outstanding common shares, all of which are held indirectly through Innovation Holdings S.A., or Innovation Holdings, a company beneficially owned and controlled by Mr. Bodouroglou, and Loretto Finance Inc., or Loretto, a wholly owned subsidiary of Allseas, that is controlled by Mr. Bodouroglou and members of his family. Due to the number of shares he owns, Mr. Bodouroglou has the power to exert considerable influence over our actions and to effectively control the outcome of matters on which our shareholders are entitled to vote, including the election of our directors and other significant corporate actions. The interests of Mr. Bodouroglou may be different from your interests.

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We depend upon a few charterers for a significant part of our revenues and the failure of one or more of these charterers to meet their obligations under our time charter agreements could cause us to suffer losses or otherwise adversely affect our business and ability to comply with covenants in our debt agreements.

We derive a significant part of our charter hire from a small number of customers. For the year ended December 31, 2014, we derived 11.6% of our voyage revenues from one charterer, as presented in our audited consolidated financial statements, included elsewhere in this annual report. All of our vessels are currently employed on fixed rate time charters or voyage charters with expirations ranging from April 2015 to April 2016. If one or more of these charterers is unable to perform under one or more charters with us, or if a charterer exercises certain rights it may have to terminate the charter before its scheduled termination date, we could suffer a loss of revenues that could materially adversely affect our business, financial condition, results of operations and cash available for distribution as dividends to our shareholders.

The ability and willingness of each of our charterers to perform its obligations under a time charter agreement with us depends on a number of factors that are beyond our control and may include, among other things, general economic conditions, the condition of the drybulk shipping industry, the overall financial condition of the charterer, the loss of the relevant vessel, prolonged off-hire periods or the seizure of the relevant vessel for more than a specified number of days. In addition, charterers are sensitive to the commodity markets and may be impacted by market forces affecting commodities, such as iron ore, coal, grain, and other minor bulks. Moreover, in depressed market conditions, there have been reports of charterers renegotiating their charters or defaulting on their obligations under charters, and our customers may fail to pay charter hire or attempt to renegotiate charter rates.

If our charterers fail to meet their obligations to us or attempt to renegotiate our charter agreements, we could sustain significant losses which could have a material adverse effect on our business, financial condition, results of operations and cash flows, as well as our ability to pay dividends, if any, in the future, and compliance with covenants in our debt agreements, certain of which specifically require the maintenance of minimum charter rate levels and consider the termination of a charter to be an event of default. For further discussion of our charterers, please see "Item 4. Information on the Company—B. Business Overview—Our Customers."

A drop in spot charter rates may provide an incentive for some charterers to default on their charters.

When we enter into a time charter, charter rates under that charter are fixed for the term of the charter. All of our vessels are currently employed on fixed rate time charters or voyage charters with expirations ranging from April 2015 to April 2016. If the spot charter rates or short-term time charter rates in the drybulk shipping industry become significantly lower than the time charter equivalent rates that some of our charterers are obligated to pay us under our existing charters, the charterers may have incentive to default under that charter or attempt to renegotiate the charter. If our charterers fail to pay their obligations, we would have to attempt to recharter our vessels at lower charter rates, which would affect our ability to operate our vessels profitably and may affect our ability to comply with covenants contained in our debt agreements.

We are subject to certain risks with respect to our counterparties on contracts, and failure of such counterparties to meet their obligations could cause us to suffer losses or otherwise adversely affect our business.

We have entered into contracts with Dayang and Yangzijiang for the construction of two Ultramax drybulk carriers and three Kamsarmax drybulk carriers scheduled for delivery between the second and fourth quarter of 2015. The estimated total contractual cost of our newbuilding vessels amounted to $148.2 million, of which an aggregate of $101.7 million was outstanding as of the date of this annual report and is due upon delivery of the vessels.

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In the event our counterparty under the construction contracts discussed above does not perform under its agreements with us and we are unable to enforce certain refund guarantees with third party banks due to an outbreak of war, bankruptcy or otherwise, we may lose all or part of our investment, which would have a material adverse effect on our results of operations, financial condition and cash flows.

In addition, we enter into, among other things, charter parties, credit facilities with banks and interest rate swap agreements. Such agreements also subject us to counterparty risks. The ability of each of our counterparties to perform its obligations under a contract with us will depend on a number of factors that are beyond our control and may include, among other things, general economic conditions, the condition of the shipping sector, the overall financial condition of the counterparty, charter rates received for specific types of drybulk carriers, the supply and demand for commodities such as iron ore, coal, grain, and other minor bulks, and various expenses. Should a counterparty fail to honor its obligations under agreements with us, we could sustain significant losses which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

We may be required to recognize additional losses relating to our investment in Box Ships if the stock price of Box Ships' common share declines further.

As of the date of this annual report, we own 3,437,500 common shares, or approximately 11.0% of the outstanding common shares of Box Ships Inc. (NYSE: TEU), or Box Ships, a related party. As of March 31, 2014, June 30, 2014 and December 31, 2014, we considered the decline of the fair value of the investment in Box Ships as other than temporary and therefore, the investment was impaired and an aggregate loss of $8.6 million was recorded. The fair value of our investment in Box Ships based on the closing price of Box Ships' common shares on the NYSE on December 31, 2014, or $0.86, was $3.0 million.

If the stock price of Box Ships' common share declines further due to other than temporary reasons, we will be required to recognize additional losses. The fair value of our investment in Box Ships, based on the closing price of Box Ships' common share on the NYSE on April 15, 2015, of $1.06, was $3.6 million.

We may have difficulty properly managing our planned growth through acquisitions of our newbuilding vessels and additional vessels.

We intend to grow our business through the acquisition of our five contracted newbuilding vessels and we may make selective acquisitions of other additional secondhand and newbuilding vessels. Our future growth will primarily depend on our ability to locate and acquire suitable additional vessels, enlarge our customer base, operate and supervise newbuilding vessels we may order, and obtain required debt or equity financing on acceptable terms.

A delay in the delivery to us of any vessel we contract to acquire, including our five newbuilding vessels, or the failure of the seller or shipyard to deliver a vessel to us at all, could cause us to breach our obligations under a related charter and could adversely affect our earnings. In addition, the delivery of any of these vessels with substantial defects could have similar consequences.

A shipyard could fail to deliver a newbuilding on time or at all because of:

· work stoppages or other hostilities, political or economic disturbances that disrupt the operations of the shipyard;

· quality or engineering problems;

· bankruptcy or other financial crisis of the shipyard;

· a backlog of orders at the shipyard;

· weather interference or catastrophic events, such as major earthquakes or fires;

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· our requests for changes to the original vessel specifications or disputes with the shipyard; or

· shortages of or delays in the receipt of necessary construction materials, such as steel, or equipment, such as main engines, electricity generators and propellers.

In addition, we may seek to terminate a newbuilding contract due to market conditions, financing limitations, significant delay in the delivery of the vessels or other reasons. If for any reason we fail to take delivery of our five newbuilding vessels, we would be prevented from realizing potential revenues from these vessels, we may be required to forego deposits on construction, which amounted to an aggregate of $46.5 million as of the date of this annual report, and we may incur additional costs and liability to the shipyard under the construction contracts.

The delivery of any secondhand vessel we may agree to acquire could be delayed because of, among other things, hostilities or political disturbances, non-performance of the purchase agreement with respect to the vessels by the seller, our inability to obtain requisite permits, approvals or financing or damage to or destruction of the vessels while being operated by the seller prior to the delivery date.

During periods in which charter rates are high, vessel values generally are high as well, and it may be difficult to consummate vessel acquisitions or enter into newbuilding contracts at favorable prices. During periods when charter rates are low, we may be unable to fund the acquisition of newbuilding vessels, whether through lending or cash on hand. For these reasons, we may be unable to execute our growth plans or avoid significant expenses and losses in connection with our future growth efforts.

Our Board of Directors has determined to suspend the payment of cash dividends as a result of market conditions in the international shipping industry and, until such conditions improve, it is unlikely that we will reinstate the payment of dividends.

As a result of the market conditions in the international shipping industry, our Board of Directors, beginning with the first quarter of 2011, has suspended payment of our common share quarterly dividend. Our dividend policy is assessed by the Board of Directors from time to time. The suspension allows us to retain cash and increase our liquidity so we are in a better position to capitalize on investment opportunities during the weakened market conditions. Until market conditions improve, it is unlikely that we will reinstate the payment of dividends. In addition, other external factors, including restrictions on our ability to pay dividends under the terms of our loan and credit facilities, limit our ability to pay dividends.

For example, certain of our other loan and credit facilities restrict the amount of dividends we may pay to $0.50 per share per annum and limit the amount of quarterly dividends we may pay to 100% of our net income for the immediately preceding financial quarter. We are also required to maintain minimum liquidity after payment of dividends equal to the greater of the next six months' debt service, 8% of the total financial indebtedness or $1.0 million per vessel. Furthermore, according to the supplemental agreement we entered into with Unicredit Bank AG ("Unicredit") on March 27, 2015, we are not permitted to declare or pay any dividends until all the deferred amounts of the facility's repayment installments have been repaid in full.

Furthermore, we may not be permitted to pay dividends if we are in breach of the covenants contained in our debt agreements. The terms of our debt agreements contain a number of financial covenants and general covenants that require us to, among other things, maintain security cover ratios, minimum cash balances and insurance including, but not limited to, hull and machinery insurance in an amount at least equal to the fair market value of the vessels financed, as determined by third party valuations. We may not be permitted to pay dividends in any amount under our debt agreements if we are in default of any of these covenants or if we do not meet specified debt coverage ratios and minimum charter rate levels.

Moreover, the declaration and payment of dividends, if any, in the future will depend on the provisions of Marshall Islands law affecting the payment of dividends. Marshall Islands law generally prohibits the payment of dividends if the company is insolvent or would be rendered insolvent upon payment of such dividend and under Marshall Islands law, dividends may only be declared and paid out of surplus or, under certain circumstances, net profits.

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The derivative contracts we have entered into to hedge our exposure to fluctuations in interest rates could result in higher than market interest rates and charges against our income.

We have entered into interest rate swaps for purposes of managing our exposure to fluctuations in interest rates applicable to indebtedness under certain of our credit facilities, which were advanced at a floating rate based on LIBOR. Our hedging strategies, however, may not be effective and we may incur substantial losses if interest rates move materially differently from our expectations. Since our existing interest rate swaps do not, and future derivative contracts may not, qualify for treatment as hedges for accounting purposes, we recognize fluctuations in the fair value of such contracts in our statement of comprehensive income / (loss). In addition, our financial condition could be materially adversely affected to the extent we do not hedge our exposure to interest rate fluctuations under our financing arrangements. Any hedging activities we engage in may not effectively manage our interest rate exposure or have the desired impact on our financial conditions or results of operations. As of December 31, 2014, the fair value of our interest rate swaps was a liability of $0.5 million.

Substantial debt levels could limit our flexibility to obtain additional financing and pursue other business opportunities.

As of December 31, 2014, we had outstanding indebtedness of $230.8 million. We expect to incur additional indebtedness in order to fund the aggregate remaining purchase commitments for our five newbuilding vessels amounting to $101.7 million as of the date of this annual report, and any further growth of our fleet. This level of debt could have significant adverse consequences to our business and future prospects, including the following:

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

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

· we could become more vulnerable to general adverse economic and industry conditions, including increases in interest rates, particularly given our substantial indebtedness, some of which bears interest at variable rates;

· we may not be able to meet financial ratios included in our debt agreements due to market conditions or other events beyond our control, which could result in a default under these agreements and trigger cross-default provisions in our other debt agreements;

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

· our debt level may limit our flexibility in responding to changing business and economic conditions.

Our ability to service our debt will depend upon, among other things, our future financial and operating performance, which will be affected by prevailing economic conditions and financial, business, regulatory and other factors, some of which are beyond our control. If our operating income is not sufficient to service our current or future indebtedness, we will be forced to take actions, such as reducing or delaying our business activities, acquisitions, investments or capital expenditures, selling assets, restructuring or refinancing our debt or seeking additional equity capital. We may not be able to affect any of these remedies on satisfactory terms, or at all. In addition, a lack of liquidity in the debt and equity markets could hinder our ability to refinance our debt or obtain additional financing on favorable terms in the future.

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We may not be able to refinance indebtedness incurred under our debt agreements if we are not able to meet our debt service requirements relating to such indebtedness, or we may be unable to borrow under our existing or future debt agreements, which may adversely affect our business, financial condition, results of operations and cash flows.

As of December 31, 2014, we had outstanding indebtedness of $230.8 million. We cannot assure you that we will be able to refinance our indebtedness on terms that are acceptable to us or at all. For so long as we have outstanding indebtedness under our debt agreements, we will have to dedicate a portion of our cash flow from operations to pay the principal and interest of this indebtedness. We may not be able to generate cash flow in amounts that are sufficient for these purposes. If we are not able to satisfy these obligations, we may have to undertake alternative financing plans or sell our assets. The actual or perceived credit quality of our charterers, any defaults by them, and the market value of our fleet, among other things, may materially affect our ability to obtain alternative financing. In addition, debt service payments under our debt agreements or alternative financing may limit funds otherwise available for working capital, capital expenditures and other purposes. If we are unable to meet our debt obligations, our lenders could declare the debt, together with accrued interest and fees, to be immediately due and payable and foreclose on our fleet, which could result in the acceleration of other indebtedness that we may have at such time and the commencement of similar foreclosure proceedings by other lenders. In addition, if the recent financial difficulties experienced by financial institutions worldwide lead to such institutions being unable to meet their lending commitments, that inability could have a material adverse effect on our ability to meet our obligations and grow our fleet. If we are not able to borrow under our existing or future debt agreements and are unable to find alternative sources of financing on terms that are acceptable to us or at all, our business, financial condition, results of operations and cash flows may be materially adversely affected.

We may have difficulty effectively managing our planned growth.

Since the completion of our initial public offering in August 2007, we have increased the size of fleet from six drybulk carriers to sixteen drybulk carriers. In addition, as of the date of this annual report, our current newbuilding program consists of two Ultramax drybulk carriers and three Kamsarmax drybulk carriers that are scheduled to be delivered in 2015.

The addition to our fleet of the vessels described above has resulted in a significant increase in the size of our fleet and imposes significant additional responsibilities on our management and staff. While we expect our fleet to grow further, this may require us to increase the number of our personnel. We will also have to increase our customer base to provide continued employment for the new vessels.

Our future growth will primarily depend on our ability to:

· locate and acquire suitable vessels;

· identify and consummate acquisitions or joint ventures;

· integrating any acquired vessels successfully with our existing operations;

· enhance our customer base;

· manage our expansion; and

· obtain required financing on acceptable terms.

We may not be successful in executing our growth plans and we may incur significant expenses and losses in connection with our future growth. If we are not able to successfully grow the size of our company or increase the size of our fleet, our financial condition and results of operations may be adversely affected.

The expansion of our fleet may impose significant additional responsibilities on our management and the management and staff of Allseas and Seacommercial Shipping Services S.A., or Seacommercial, a company controlled by our Chairman, President, Chief Executive Officer and Interim Chief Financial Officer, Mr. Michael Bodouroglou, which, together with Allseas, is responsible for the commercial and technical management functions for our fleet. The expansion of our fleet may necessitate that we and Allseas and Seacommercial, together, the Managers, increase the number of personnel employed. The Managers may have to increase their customer base to provide continued employment of our fleet, and such costs will be passed on to us by the Managers.

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We are dependent on Allseas and Seacommercial for the commercial and technical management of our fleet, and are dependent on Allseas to provide us with our executive officers, and the failure of either of our Managers to satisfactorily perform their services may adversely affect our business.

We have entered into an executive services agreement with Allseas, pursuant to which Allseas provides the services of our executive officers, which include strategy, business development, marketing, finance and other services, who report directly to our Board of Directors. In connection with the respective agreement, Allseas is entitled to an executive services fee, plus incentive compensation. The agreement has an initial term of five years and automatically renews for successive five year terms unless sooner terminated in accordance with the agreement.

In addition, as we subcontract the commercial and technical management of our fleet, including crewing, maintenance and repair, to Allseas and Seacommercial, the loss of either of the Managers services or their failure to perform their obligations to us could materially and adversely affect the results of our operations. Although we may have rights against the Managers if they default on their obligations to us, you will have no recourse directly against either of the Managers. Further, our loan and credit facilities require the approval from our lenders to change our commercial and technical manager.

Since Allseas and Seacommercial are privately held companies and there is little or no publicly available information about our Managers, an investor could have little advance warning of potential problems that might affect the Managers that could have a material adverse effect on us.

The ability of the Managers to continue providing services for our benefit will depend in part on their own financial strength. Circumstances beyond our control could impair the Managers' financial strength, and because the Managers are privately held, it is unlikely that information about their financial strength would become public unless either of the Managers began to default on their obligations. As a result, an investor in our shares might have little advance warning of problems affecting the Managers, even though these problems could have a material adverse effect on us.

Our executive officers have affiliations with Allseas, Seacommercial and Box Ships, which may create conflicts of interest that may permit them to favor the interests of Allseas, Seacommercial and Box Ships and their affiliates above our interests and those of our shareholders.

Our Chairman, President, Chief Executive Officer and Interim Chief Financial Officer, Mr. Michael Bodouroglou, is the beneficial owner of all of the issued and outstanding capital stock of Allseas, Seacommercial and Crewcare Inc., or Crewcare, our manning agent, and our Chief Operating Officer, Mr. George Skrimizeas, is the President and director of Allseas and Seacommercial. These responsibilities and relationships could create conflicts of interest between us, on the one hand, and the Managers, on the other hand. These conflicts may arise in connection with the chartering, purchase, sale and operations of the vessels in our fleet versus other vessels managed by the Managers or other companies affiliated with the Managers and Mr. Bodouroglou. To the extent that entities affiliated with Mr. Bodouroglou, other than us, or the Managers own or operate vessels that may compete for employment or management services in the future, the Managers may give preferential treatment to vessels that are beneficially owned by related parties because Mr. Bodouroglou and members of his family may receive greater economic benefits. Mr. Bodouroglou granted to us a right of first refusal over future vessels that he or entities affiliated with him may seek to acquire in the future. However, we may not exercise our right to acquire all or any of these vessels in the future, and such vessels may compete with our fleet.

In addition, the Managers currently provide management services to vessels in Box Ships' fleet as well as our fleet. We have entered into an agreement with Box Ships and Mr. Michael Bodouroglou that provides that so long as (i) Mr. Bodouroglou is a director or executive officer of both our Company and Box Ships and (ii) we own at least 5% of the total issued and outstanding common shares of Box Ships, Box Ships will not, directly or indirectly, acquire or charter any drybulk carrier without our prior written consent and we will not, directly or indirectly, acquire or charter any containership without the prior written consent of Box Ships. To the extent that we believe it is in our interest to grant such consent and Box Ships acquires drybulk vessels, such vessels may compete with our fleet. The Managers are not parties to the non-competition agreement described above and, under the terms of the agreement, may provide vessel management services to drybulk vessels other than ours. These conflicts of interest may have an adverse effect on our results of operations.

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Furthermore, other conflicts of interest may arise between Box Ships, the Managers, and their affiliates, on the one hand, and us and our shareholders, on the other hand. For example, notwithstanding our non-competition agreement with Box Ships described above, Box Ships may claim other business opportunities that would benefit us, such as the hiring of employees, the acquisition of other businesses, or the entry into joint ventures, and in each case other than business opportunities in the drybulk shipping industry, and this could have a material adverse effect on our business, results of operations and cash flows.

Moreover, Mr. Bodouroglou also serves as the Chairman, President and Chief Executive Officer of Box Ships. Therefore, Mr. Bodouroglou, who advises our Board of Directors on the amount and timing of asset purchases and sales, capital expenditures, borrowings, issuances of additional capital stock and cash reserves, each of which can affect the amount of the cash available for distribution to our shareholders, may favor the interests of Box Ships or its affiliates and may not provide us with business opportunities that would benefit us. In addition, our executive officers and those of our Managers will not spend all of their time on matters related to our business.

Furthermore, Mr. Bodouroglou has fiduciary duties to manage our business in a manner that is beneficial to us and our shareholders and he has fiduciary duties to manage the business of Box Ships and its affiliates in a manner beneficial to such entities and their shareholders. Consequently, he may encounter situations in which his fiduciary obligations to Box Ships and us are in conflict. We believe the principal situations in which these conflicts may occur are in the allocation of business opportunities to Box Ships or us, such as with respect to the allocation and hiring of employees, the acquisition of other businesses or the entry into joint ventures, and in each case other than business opportunities in the drybulk shipping industry. The resolution of these conflicts may not always be in our best interest or that of our shareholders and could have a material adverse effect on our business, results of operations, cash flows and financial condition.

Although we have entered into a non-competition agreement with Box Ships and Mr. Michael Bodouroglou, as a result of the conflicts discussed above, the Managers may favor its own interests, the interests of Box Ships and the interests of its affiliates, and our executive officers may favor the interests of the Managers, Box Ships and its affiliates, over our interests and those of our shareholders, which could have a material adverse effect on our business, results of operations, cash flows and financial condition.

Purchasing and operating secondhand vessels may result in increased operating costs and reduced fleet utilization.

While we have the right to inspect previously owned vessels prior to our purchase of them and we intend to inspect all secondhand vessels that we acquire in the future, such an inspection does not provide us with the same knowledge about their condition that we would have if these vessels had been built for and operated exclusively by us. A secondhand vessel may have conditions or defects that we were not aware of when we bought the vessel and which may require us to incur costly repairs to the vessel. These repairs may require us to put a vessel into dry-dock which would reduce our fleet utilization. Furthermore, we usually do not receive the benefit of warranties on secondhand vessels.

We or our Managers may be unable to attract and retain key management personnel and other employees in the shipping industry, which may negatively impact the effectiveness of our management and results of operations.

Our success depends to a significant extent upon the abilities and efforts of our management team, including our ability to retain key members of our management team and to hire new members as may be necessary. As of the date of this annual report, we have two shoreside salaried employees and we reimburse Allseas for the services of our executive officers. The loss of any of these individuals could adversely affect our business prospects and financial condition. Difficulty in hiring and retaining replacement personnel could adversely affect our business, results of operations and ability to pay dividends. We do not intend to maintain "key man" life insurance on any of our officers or other members of our management team.

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We may not have adequate insurance to compensate us if we lose our vessels or to compensate third parties.

There are a number of risks associated with the operation of ocean-going vessels, including mechanical failure, collision, human error, war, terrorism, piracy, property loss, cargo loss or damage and business interruption due to political circumstances in foreign countries, hostilities and labor strikes. Any of these events may result in loss of revenues, increased costs and decreased cash flows. In addition, the operation of any vessel is subject to the inherent possibility of marine disaster, including oil spills and other environmental mishaps, and the liabilities arising from owning and operating vessels in international trade.

We are insured against tort claims and some contractual claims (including claims related to environmental damage and pollution) through memberships in protection and indemnity associations or clubs, or P&I Associations. As a result of such membership, the P&I Associations provide us coverage for such tort and contractual claims. We also carry hull and machinery insurance and war risk insurance for our fleet. We insure our vessels for third-party liability claims subject to and in accordance with the rules of the P&I Associations in which the vessels are entered. We also maintain insurance against loss of hire, which covers business interruptions that result in the loss of use of a vessel. We can give no assurance that we will be adequately insured against all risks and we cannot guarantee that any particular claim will be paid.

In addition, we may not be able to obtain adequate insurance coverage for our fleet in the future or renew our insurance policies on the same or commercially reasonable terms, or at all. For example, more stringent environmental regulations have led in the past to increased costs for, and in the future may result in the lack of availability of, protection and indemnity insurance against risks of environmental damage or pollution. Any uninsured or underinsured loss could harm our business, results of operations, cash flows, financial condition and ability to pay dividends in amounts anticipated or at all. In addition, our insurance may be voidable by the insurers as a result of certain of our actions, such as our ships failing to maintain certification with applicable maritime self-regulatory organizations. Furthermore, our insurance policies may not cover all losses that we incur, or that disputes over insurance claims will not arise with our insurance carriers. Any claims covered by insurance would be subject to deductibles, and since it is possible that a large number of claims may be brought, the aggregate amount of these deductibles could be material. In addition, our insurance policies are subject to limitations and exclusions, which may increase our costs or lower our revenues, thereby possibly having a material adverse effect on our business, results of operations, cash flows, financial condition and ability to pay dividends in amounts anticipated or at all.

The aging of our fleet may result in increased operating costs or loss of hire 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 of the date of this annual report, our fleet was comprised of eight Panamax drybulk carriers, two Ultramax drybulk carriers, two Supramax drybulk carriers and four Handysize drybulk carriers with an aggregate capacity of 980,380 dwt and an average age of 7.6 years. In addition, our newbuilding program consists of two Ultramax drybulk carriers and three Kamsarmax drybulk carriers that are scheduled to be delivered in 2015. As our fleet ages, we will incur increased costs. Older vessels are typically less fuel efficient and more costly to maintain than more recently constructed vessels due to improvements in engine technology. Cargo insurance rates increase with the age of a vessel, making older vessels less desirable to charterers. Governmental regulations and safety or other equipment standards related to the age of vessels may also require expenditures for alterations or the addition of new equipment to our vessels and may restrict the type of activities in which our vessels may engage. As our vessels age, market conditions may not justify those expenditures or enable us to operate our vessels profitably during the remainder of their useful lives.

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In addition, charterers actively discriminate against hiring older vessels. For example, Rightship, the ship vetting service maintained by Rio Tinto, Cargill and BHP-Billiton which has become the major vetting service in the drybulk shipping industry, ranks the suitability of vessels based on a scale of one to five stars. Most major carriers will generally not charter a vessel that Rightship has vetted with fewer than three stars. Rightship automatically downgrades any vessel over 18 years of age to two stars, which significantly decreases its chances of entering into a charter. Therefore, as our vessels approach and exceed 18 years of age, we may not be able to operate these vessels profitably during the remainder of their useful lives.

Because we generate all of our revenues in U.S. dollars but incur a portion of our expenses in other currencies, exchange rate fluctuations could have an adverse impact on our results of operations.

We generate substantially all of our revenues in U.S. dollars but certain of our expenses are incurred in currencies other than the U.S. dollar. This difference could lead to fluctuations in net income due to changes in the value of the U.S. dollar relative to these other currencies, in particular the Euro. Expenses incurred in foreign currencies against which the U.S. dollar falls in value could increase, decreasing our net income and cash flow from operations.

If the recent volatility in LIBOR continues, it could affect our profitability, earnings and cash flow.

We have entered into interest rate swap agreements converting floating interest rate exposure into fixed interest rates in order to economically hedge our exposure to fluctuations in prevailing market interest rates. However, our exposure to floating interest rate is only partially hedged. For more information on our interest rate swap agreements, refer to Note 10 to our consolidated financial statements included at the end of this annual report.

Historically, LIBOR has been volatile, with the spread between LIBOR and the prime lending rate widening significantly at times. These conditions are the result of the recent disruptions in the international credit markets. Because the interest rates borne by our outstanding indebtedness fluctuate with changes in LIBOR, if this volatility were to continue, it would affect the amount of interest payable on our debt, which in turn, could have an adverse effect on our profitability, earnings and cash flow.

Furthermore, interest in most loan agreements in our industry has been based on published LIBOR rates. Recently, however, lenders have insisted on provisions that entitle the lenders, in their discretion, to replace published LIBOR as the base for the interest calculation with their cost-of-funds rate. If we are required to agree to such a provision in future loan agreements, our lending costs could increase significantly, which would have an adverse effect on our profitability, earnings and cash flow.

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, as amended, or the Code, 50% of the gross shipping income of a vessel owning or chartering corporation, such as ourselves and our subsidiaries, that is attributable to transportation that begins or ends, but that does not both begin and end, in the United States is characterized as U.S. source shipping income and such income is subject to a 4% U.S. federal income tax without allowance for deductions, unless that corporation qualifies for exemption from tax under section 883 of the Code, or Section 883, and the Treasury Regulations promulgated thereunder.

We and each of our subsidiaries qualify for this statutory tax exemption and we take this position for U.S. federal income tax return reporting purposes. However, there are factual circumstances beyond our control that could cause us to lose the benefit of this tax exemption and thereby become subject to U.S. federal income tax on our U.S. source shipping income. For example, we would no longer qualify for exemption under Section 883 for a particular taxable year if shareholders resident in certain jurisdictions with a 5% or greater interest in our common shares owned, in the aggregate, 50% or more of our outstanding common shares for more than half the days during the taxable year. Due to the factual nature of the issues involved, we can give no assurances with regard to our tax-exempt status or that of any of our subsidiaries.

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If we or our subsidiaries are not entitled to the tax exemption under Section 883 for any taxable year, we or our subsidiaries would be subject during those years to a 4% U.S. federal income tax on our gross U.S. source shipping income (without allowance for deduction) under section 887 of the Code. The imposition of this tax could have a negative effect on our business and would result in decreased earnings available for distribution to our shareholders. In the absence of exemption from tax under Section 883, we would have been subject to a 4% tax on our gross U.S.-source shipping income equal to approximately $0.2 million for the year ended December 31, 2014.

U.S. tax authorities could treat us as a "passive foreign investment company," which could have adverse U.S. federal income tax consequences to U.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 least 75% of its gross income for any taxable year consists of certain types of "passive income" or (2) at least 50% of the average value of the corporation's assets produce, or are held for the production of, those types of "passive income." For purposes of these tests, "passive income" includes dividends, interest, gains from the sale or exchange of investment property, and rents and royalties other than rents and royalties which are received from unrelated parties in connection with the active conduct of a trade or business. For purposes of these tests, income derived from the performance of services does not constitute "passive income." U.S. shareholders of a PFIC are subject to a disadvantageous U.S. federal income tax regime with respect to the income derived by the PFIC, the distributions they receive from the PFIC and the gain, if any, they derive from the sale or other disposition of their shares in the PFIC.

Based on our current and proposed method of operation, we do not believe that we will be a PFIC with respect to any taxable year. In this regard, we intend to treat the gross income we derive or are deemed to derive from our time chartering activities as services income, rather than rental income. Accordingly, we believe that income from our time chartering activities does not constitute "passive income," and the assets that we own and operate in connection with the production of that income do not constitute assets that produce, or are held for the production of, "passive income."

There is, however, no direct legal authority under the PFIC rules addressing our proposed method of operation. We believe there is substantial legal authority supporting our position consisting of case law and U.S. Internal Revenue Service, or IRS, pronouncements concerning the characterization of income derived from time charters and voyage charters as services income for other tax purposes. However, we note that there is also authority which characterizes time charter income as rental income rather than services income for other tax purposes. Accordingly, no assurance can be given that the IRS or a court of law will accept our position, and there is a risk that the IRS or a court of law could determine that we are a PFIC. Moreover, no assurance can be given that we would not constitute a PFIC for any future taxable year if there were to be changes in the nature of our operations.

If the IRS were to find that we are or have been a PFIC for any taxable year, our U.S. shareholders would face adverse U.S. federal income tax consequences and information reporting obligations. Under the PFIC rules, unless those U.S. shareholders make an election available under the Code (which election could itself have adverse consequences for such U.S. shareholders), such U.S. shareholders would be liable to pay U.S. federal income tax at the then prevailing U.S. federal income tax rates on ordinary income plus interest upon "excess distributions" and upon any gain from the disposition of our common shares, as if such "excess distribution" or gain had been recognized ratably over the U.S. shareholder's holding period of our common shares. See "Item 10. Additional Information—E. Taxation—Material U.S., Marshall Islands Income Tax Considerations—U.S. Federal Income Taxation of U.S. Holders—Passive Foreign Investment Company Status and Significant Tax Consequences" for a more comprehensive discussion of the U.S. federal income tax consequences to U.S. shareholders if we are treated as a PFIC.

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We are a holding company, and we depend on the ability of our subsidiaries to distribute funds to us in order to satisfy our financial obligations and to make dividend payments, if any, in the future.

We are a holding company and our subsidiaries, which are wholly-owned by us, conduct all of our operations and own all of our operating assets. We have no significant assets other than the equity interests in our subsidiaries. As a result, our ability to make dividend payments, if any, in the future depends on our subsidiaries and their ability to distribute funds to us. We do not intend to obtain funds from other sources to pay dividends, if any, in the future.

In addition, the declaration and payment of dividends by us and our Marshall Islands and Liberian subsidiaries will depend on the provisions of Marshall Islands and Liberian law affecting the payment of dividends. Marshall Islands and Liberian law generally prohibits the payment of dividends other than from surplus or net profits or while a company is insolvent or would be rendered insolvent upon payment of such dividend.

Our ability to pay dividends, if any, in the future will also be subject to our satisfaction of certain financial covenants contained in our debt agreements. Certain of our other loan and credit facilities restrict the amount of dividends we may pay to $0.50 per share per annum and limit the amount of quarterly dividends we may pay to 100% of our net income for the immediately preceding financial quarter. We are also required to maintain minimum liquidity after payment of dividends equal to the greater of the next six months' debt service, 8% of the total financial indebtedness or $1.0 million per vessel. Furthermore, according to the supplemental agreement we entered into with Unicredit on March 27, 2015, we are not permitted to declare or pay any dividends until all the deferred amounts of the facility's repayment installments have been repaid in full.

As we expand our business, our Managers may need to improve our operating and financial systems and will need to recruit suitable employees and crew for our vessels on our behalf. If we are unable to do so, those systems may become ineffective, which could adversely affect our financial performance.

Our current operating and financial systems may not be adequate as we expand the size of our fleet and our attempts to improve those systems may be ineffective. In addition, as we expand our fleet, our Managers will need to recruit suitable additional seafarers and shoreside administrative and management personnel on our behalf. While our Managers have not experienced any difficulty in recruiting to date, we cannot guarantee that our Managers will be able to continue to hire suitable employees as we expand our fleet. If we or our crewing agent encounter business or financial difficulties, we may not be able to adequately staff our vessels. If our Managers are unable to grow our financial and operating systems or to recruit suitable employees on our behalf as we expand our fleet, our financial performance may be adversely affected.

Because our seafaring employees are covered by industry-wide collective bargaining agreements, failure of industry groups to renew those agreements may disrupt our operations and adversely affect our earnings.

As of December 31, 2014, 345 seafarers were employed, mainly by Crewcare, our manning agent, to crew our vessels. All of the seafarers employed on the vessels in our fleet are covered by industry-wide collective bargaining agreements that set basic standards. These agreements may not prevent labor interruptions. Any labor interruption could disrupt our operations and harm our financial performance.

It may not be possible for investors to enforce U.S. judgments against us.

We and all our subsidiaries are incorporated in jurisdictions outside the United States and substantially all of our assets and those of our subsidiaries are located outside the United States. In addition, all of our directors and officers are non-residents of the United States, and all or a substantial portion of the assets of these non-residents are located outside the United States. As a result, it may be difficult or impossible for U.S. investors to serve process within the United States upon us, our subsidiaries or our directors and officers or to enforce a judgment against us for civil liabilities in U.S. courts. In addition, you should not assume that courts in the countries in which we or our subsidiaries are incorporated or where our or the assets of our subsidiaries are located (1) would enforce judgments of U.S. courts obtained in actions against us or our subsidiaries based upon the civil liability provisions of applicable U.S. federal and state securities laws or (2) would enforce, in original actions, liabilities against us or our subsidiaries based on those laws.

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We may be subject to litigation that, if not resolved in our favor and not sufficiently insured against, could have a material adverse effect on us.

We may be, from time to time, involved in various litigation matters. These matters may include, among other things, contract disputes, personal injury claims, environmental claims or proceedings, asbestos and other toxic tort claims, employment matters, governmental claims for taxes or duties, and other litigation that arises in the ordinary course of our business. Although we intend to defend these matters vigorously, we cannot predict with certainty the outcome or effect of any claim or other litigation matter, and the ultimate outcome of any litigation or the potential costs to resolve them may have a material adverse effect on us. Insurance may not be applicable or sufficient in all cases and/or insurers may not remain solvent which may have a material adverse effect on our financial condition.

The Public Company Accounting Oversight Board is currently unable to inspect the audit work and practices of auditors operating in Greece, including our auditor.

Auditors of U.S. public companies are required by law to undergo periodic Public Company Accounting Oversight Board, or PCAOB, inspections that assess their compliance with U.S. law and professional standards in connection with the performance of audits of financial statements filed with the SEC. Certain European Union, or EU, countries, including Greece, do not permit the PCAOB to conduct inspections of accounting firms established and operating in EU countries, even if they are part of major international firms. Accordingly, unlike for most U.S. public companies, the PCAOB is currently prevented from evaluating our auditor's performance of audits and its quality control procedures, and, unlike the shareholders of most U.S. public companies, our shareholders are deprived of the possible benefits of such inspections. The PCAOB continues to pursue cooperative agreements with audit oversight authorities in other EU member states and jurisdictions around the world.

Risks Relating to Our Common Shares

The continued downturn in the drybulk carrier charter market has had a significant adverse impact on the market price of our common shares and may affect our ability to maintain our listing on NASDAQ or other securities exchange on which our common shares may be traded.

The continued downturn in the drybulk carrier charter market has caused the price of our common shares to decline significantly since 2008. On November 25, 2011, we received notification from the NYSE, on which we were then listed, that we were no longer in compliance with the NYSE's continued listing requirements because the average closing price of our common shares had fallen below $1.00 for a consecutive 30-trading day period. In November 2012, with the approval of shareholders at our 2012 annual general meeting of shareholders, we conducted a 10-for-1 reverse stock split of our issued and outstanding common shares in order to continue to meet the minimum continued listing standards of the NYSE. Subsequently, the NYSE notified us that we had regained compliance on December 19, 2012. In April of 2013, we voluntarily transferred the listing of our common stock to NASDAQ. Further declines in the trading price of our common shares may cause us to fail to meet certain of the continuing listing standards of NASDAQ, which could result in the delisting of our common shares. If our shares cease to be traded on the NASDAQ or on another national securities exchange, the price at which you may be able to sell your common shares of the company may be significantly lower than their current trading price or you may not be able to sell them at all. The failure of our common shares to be listed on the NASDAQ may also result in defaults under our credit facilities. We are currently in compliance with all applicable NASDAQ listing standards.

The market price of our common shares has fluctuated widely and may continue to fluctuate in the future.

The market price of our common shares has fluctuated widely since we became a public company in August 2007 and may continue to do so as a result of many factors, including our actual results of operations and perceived prospects, the prospects of our competition and of the shipping industry in general and in particular the drybulk sector, differences between our actual financial and operating results and those expected by investors and analysts, changes in analysts' recommendations or projections, changes in general valuations for companies in the shipping industry, particularly the drybulk sector, changes in general economic or market conditions and broad market fluctuations.

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The public market for our common shares may not continue to be active and liquid enough for you to resell our common shares in the future.

An active or liquid public market for our common shares may not continue going forward. Volatility in the stock market could have an adverse effect on the market price of our common shares and could impact a potential sale price if holders of our common shares decide to sell their shares.

The seaborne transportation industry has been highly unpredictable and volatile. The market for common shares in this industry may be equally volatile. The market price of our common shares may be influenced by many factors, many of which are beyond our control, including those already described above, as well as the following:

· actual or anticipated fluctuations in our quarterly and annual results and those of other public companies in our industry;

· announcements by us or our competitors of significant contracts, acquisitions or capital commitments;

· mergers and strategic alliances in the shipping industry;

· terrorist acts;

· future sales of our common shares or other securities;

· market conditions in the shipping industry;

· economic and regulatory trends;

· shortfalls in our operating results from levels forecast by securities analysts;

· announcements concerning us or our competitors;

· the general state of the securities market; and

· investors' perception of us and the drybulk shipping industry.

As a result of these and other factors, investors in our common shares may not be able to resell their shares at or above the price they paid for such shares. These broad market and industry factors may materially reduce the market price of our common shares, regardless of our operating performance.

Future sales of our common shares could cause the market price of our common shares to decline and our shareholders may experience dilution as a result of our on-going agreement to issue of shares of our common shares to Loretto Finance Inc.

The market price of our common shares could decline due to sales of a large number of shares in the market, including sales of shares by our large shareholders, or the perception that these sales could occur. These sales could also make it more difficult or impossible for us to sell equity securities in the future at a time and price that we deem appropriate to raise funds through future offerings of our common shares.

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In addition, in order to incentivize Allseas' continued services to us, we have entered into a tripartite agreement with Allseas and Loretto, a wholly-owned subsidiary of Allseas, pursuant to which in the event of a capital increase, an equity offering or the issuance of common shares to a third party or third parties in the future, other than common shares issued pursuant to our equity incentive plan, we have agreed to issue, at no cost to Loretto, additional common shares to Loretto in an amount equal to 2% of the total number of common shares issued pursuant to such capital increase, equity offering or third party issuance, as applicable. As of the date of this annual report, we had issued a total of 469,958 of our common shares to Loretto pursuant to this agreement.

Furthermore, our shareholders may incur additional dilution from any future equity offering and upon the issuance of additional shares of our common shares upon the exercise of options we have granted to certain of our officers and directors or upon the issuance of additional restricted common shares pursuant to our equity incentive plan.

Since we are incorporated in the Marshall Islands, which does not have a well-developed body of corporate law, you may have more difficulty protecting your interests than shareholders of a U.S. corporation.

Our corporate affairs are governed by our Amended and Restated Articles of Incorporation and Amended and Restated Bylaws and by the Marshall Islands Business Corporations Act, or the BCA. The provisions of the BCA resemble provisions of the corporation laws of a number of states in the United States. However, there have been few judicial cases in the Marshall Islands interpreting the BCA. The rights and fiduciary responsibilities of directors under the laws of the Marshall Islands are not as clearly established as the rights and fiduciary responsibilities of directors under statutes or judicial precedent in existence in the United States. The rights of shareholders of the Marshall Islands may differ from the rights of shareholders of companies incorporated in the United States. While the BCA provides that it is to be interpreted according to the laws of the State of Delaware and other states with substantially similar legislative provisions, there have been few, if any, court cases interpreting the BCA in the Marshall Islands, and we cannot predict whether Marshall Islands courts would reach the same conclusions as U.S. courts. Thus, you may have more difficulty in protecting your interests in the face of actions by the management, directors or controlling shareholders than would shareholders of a corporation incorporated in a U.S. jurisdiction which has developed a relatively more substantial body of case law.

Anti-takeover provisions in our organizational documents could make it difficult for our shareholders to replace or remove our current Board of Directors or have the effect of discouraging, delaying or preventing a merger or acquisition, which could adversely affect the market price of our common shares.

Several provisions of our Amended and Restated Articles of Incorporation and Amended and Restated Bylaws could make it difficult for our shareholders to change the composition of our Board of Directors in any one year, preventing them from changing the composition of management. In addition, the same provisions may discourage, delay or prevent a merger or acquisition that shareholders may consider favorable. These provisions:

· authorize our Board of Directors to issue "blank check" preferred stock without shareholder approval;

· provide for a classified Board of Directors with staggered, three year terms;

· prohibit cumulative voting in the election of directors;

· authorize the removal of directors only for cause and only upon the affirmative vote of the holders of at least 66 ²/₃% of our outstanding common shares entitled to vote for the directors;

· limit the persons who may call special meetings of shareholders;

· establish advance notice requirements for nominations for election to our Board of Directors or for proposing matters that can be acted on by shareholders at shareholder meetings; and

· restrict business combinations with interested shareholders.

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In addition, we have adopted a shareholder rights plan pursuant to which our Board of Directors may cause the substantial dilution of any person that attempts to acquire us without the approval of our Board of Directors. See "Item 10. Additional Information—B. Memorandum and Articles of Association—Stockholder Rights Plan."

The above anti-takeover provisions, including the provisions of our shareholder rights plan, could substantially impede the ability of public shareholders to benefit from a change in control and, as a result, may adversely affect the market price of our common shares and your ability to realize any potential change of control premium.

Item 4.Information on the Company

A.History and development of the Company

We are Paragon Shipping Inc. We were incorporated under the laws of the Republic of the Marshall Islands on April 26, 2006. Our executive offices are located at 15 Karamanli Ave, GR 166 73, Voula, Greece. Our telephone number at that address is +30 210 891 4600.

Business Development

Effective as of the close of trading on November 5, 2012, we effectuated a 10-for-1 reverse stock split of our issued and outstanding common shares. Our common shares commenced trading on the NYSE on a split-adjusted basis upon the open of trading on November 6, 2012. The reverse stock split was approved by shareholders at the 2012 annual general meeting of shareholders held on October 24, 2012 and by our Board of Directors on October 24, 2012. The reverse stock split reduced the number of our issued and outstanding common shares and affected all issued and outstanding common shares, as well as common shares underlying stock options outstanding immediately prior to the effectiveness of the reverse stock split. The number of our authorized common shares was not affected by the reverse split. No fractional shares were issued in connection with the reverse stock split. Shareholders who would have otherwise held a fractional share of our common stock as a result of the reverse stock split received a cash payment in lieu of such fractional share. The reverse stock split was completed in response to a notification we received on November 25, 2011 from the NYSE that we were no longer in compliance with the NYSE's continued listing requirements because the average closing price of our common shares had fallen below $1.00 for a consecutive 30-trading day period. Subsequent to the reverse stock split, the NYSE notified us that we had regained compliance with its continued listing criteria on December 19, 2012. Effective with the opening on April 12, 2013, our common shares ceased trading on the NYSE and commenced trading on NASDAQ.

On December 24, 2012, we entered into an agreement to sell 4,901,961 newly-issued common shares to Innovation Holdings, an entity beneficially owned by our Chairman, President, Chief Executive Officer and Interim Chief Financial Officer, Mr. Michael Bodouroglou, for total consideration of $10.0 million. The transaction closed on December 24, 2012. In connection with the transaction, we were granted the right to repurchase the common shares issued to Innovation Holdings in the private placement for the same price at which the shares were sold, which expired without being exercised upon our execution of definitive documentation relating to the restructuring of our debt, as discussed below. In addition, Innovation Holdings also received customary registration rights in respect of the common shares it received in the private placement. The documentation entered into in connection with the private placement was approved by the independent members of our Board of Directors.

As our common shares become eligible for re-sale under Rule 144, or if Innovation Holdings exercises its registration rights pursuant to the registration rights agreement discussed above, the volume of sales of our common shares on the Nasdaq Global Market or such other securities exchange on which our common shares are listed may increase, which could reduce the market value of our common shares.

On September 27, 2013, we completed a public offering of 6,000,000 of our common shares at $5.75 per share, including the full exercise of the over-allotment option granted to the underwriters to purchase up to 782,609 additional common shares. The net proceeds from the offering, which amounted to $31.9 million, net of underwriting discounts and commissions of $2.0 million and offering expenses of $0.5 million, were used to fund the initial deposits and other costs associated with the purchase of two Ultramax newbuilding drybulk carriers, the Hull numbers DY152 and DY153, as discussed below, and general corporate purposes.

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On February 18, 2014, we completed a public offering of 6,785,000 of our common shares at $6.25 per share, including the full exercise of the over-allotment option granted to the underwriters to purchase up to 885,000 additional common shares. The net proceeds from the offering amounted to $39.7 million, net of underwriting discounts and commissions and offering expenses payable by us.

On May 12, 2014, our Board of Directors authorized a share buyback program of up to $10.0 million for a period of twelve months. We expect to repurchase these shares in the open market, at times and prices that we consider to be appropriate, but we are not obligated under the terms of the program to repurchase any shares. Pursuant to the share buyback program, as of December 31, 2014, we had purchased and cancelled 30,000 of our common shares at an average price of $5.6820 per share.

On August 8, 2014, we completed the public offering of 1,000,000 of our 8.375% Senior Notes due 2021 pursuant to an effective shelf registration statement. The Notes were issued in minimum denominations of $25.00 and integral multiples of $25.00 in excess thereof, and bear interest at a rate of 8.375% per year, payable quarterly on each February 15, May 15, August 15 and November 15, commencing on November 15, 2014. The Notes will mature on August 15, 2021, and may be redeemed in whole or in part at any time or from time to time after August 15, 2017. The net proceeds from the offering amounted to approximately $23.9 million, net of underwriting discounts and commissions of $812,500, and offering expenses payable by the Company of $330,917. The Notes trade on NASDAQ under the symbol "PRGNL".

As of the date of this annual report, we had 24,909,142 common shares outstanding.

Vessel Acquisitions and Dispositions

Below is a discussion of our principal capital expenditures and divestitures since the beginning of our last three financial years to the date of this annual report.

On May 4 and on June 18, 2012, we took delivery of our first two newbuilding Handysize drybulk vessels, the M/V Prosperous Seas and the M/V Precious Seas, respectively. In 2012, we paid an amount of $29.3 million to the shipyard, representing the final installment of the respective vessels, which was financed from the syndicated secured loan facility led by Nordea and cash on hand.

On September 24, 2012, we agreed with Zhejiang Ouhua Shipbuilding, or Ouhua, to postpone the delivery dates of our remaining two Handysize drybulk and two 4,800 TEU containerships under construction and to change the apportionment of the advances already paid among the vessels under construction.

On January 29, 2013, we took delivery of our third Handysize drybulk vessel, the M/V Priceless Seas. In January 2013, we paid an amount of $1.4 million to the shipyard representing the final installment of the respective vessel, which was financed with cash on hand.

On October 3, 2013, following the completion of our public offering of 6,000,000 common shares, we completed the acquisition of shipbuilding contracts for two Ultramax newbuilding drybulk carriers from Allseas, the M/V Gentle Seas and the M/V Peaceful Seas. The acquisition cost of these two newbuildings was $26.5 million per vessel. In October 2013, we paid an amount of $8.1 million per vessel, and the balance of the contract price, or $18.4 million per vessel, would be payable upon the delivery of each vessel. Both vessels were delivered in October 2014. We paid to the shipyard the final installment of the two vessels, which was mainly financed from the loan facility with HSH Nordbank AG, or HSH, dated April 4, 2014.

In December 2013, we agreed to acquire, subject to certain closing conditions that were lifted in the first quarter of 2014, shipbuilding contracts for two additional Ultramax newbuilding drybulk carriers from Allseas. The Ultramax newbuildings are sister ships to the two Ultramax newbuildings we previously acquired, have a carrying capacity of 63,500 dwt each, and are currently under construction at Dayang with scheduled delivery in the third quarter of 2015. The acquisition cost of these two newbuildings is $28.3 million per vessel. In February 2014, we paid an amount of $5.6 million per vessel. In addition, upon commencement of the steel cutting of each vessel in the second quarter of 2014, we paid a second installment of $3.9 million per vessel. The balance of the contract price, or $18.8 million per vessel, will be payable upon the delivery of each vessel.

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In December 2013, we also entered into an agreement with Ouhua to cancel one of our two 4,800 TEU containership newbuilding contracts at no cost to us, to transfer the deposit to the remaining containership and to reduce its contract price from the original $57.5 million to $55.0 million.

On January 7, 2014, we took delivery of our fourth Handysize drybulk vessel, the M/V Proud Seas. In January 2014, an amount of $21.6 million was paid to the shipyard representing the final installment of the respective vessel, which was financed from the syndicated secured loan facility led by Nordea.

In March 2014, we entered into contracts with Yangzijiang for the construction of three Kamsarmax newbuilding drybulk carriers. The Kamsarmax newbuildings have a carrying capacity of 81,800 dwt each, with scheduled delivery between the second and fourth quarter of 2015. The acquisition cost of these three newbuildings is $30.6 million per vessel. In March 2014, we paid an amount of $9.2 million per vessel, and the balance of the contract price, or $21.4 million per vessel, will be payable upon the delivery of each vessel.

On April 25, 2014, we entered into a memorandum of agreement for the sale of our remaining 4,800 TEU containership newbuilding to an unrelated third party for $42.5 million, less 3% commission. In May 2014, we also agreed with the shipyard to reduce the contract price of the respective vessel by $0.8 million. The sale of the vessel and its transfer to the new owners was concluded on May 23, 2014. The net proceeds from the sale of the vessel amounted to $10.0 million and represent the difference between the net sale price of the vessel and the outstanding contractual obligation due to the shipyard upon delivery that was resumed by the vessel's new owners.

B.Business overview

Introduction

We are a global provider of shipping transportation services. We specialize in transporting drybulk cargoes, including such commodities as iron ore, coal, grain and other materials, along worldwide shipping routes.

As of the date of this annual report, our operating fleet consisted of eight Panamax drybulk carriers, two Ultramax drybulk carriers, two Supramax drybulk carriers and four Handysize drybulk carriers with an aggregate capacity of 980,380 dwt and an average age of 7.6 years.

Prior to April 2011, we owned and operated three containerships. In the second quarter of 2011, we sold these containerships to Box Ships, then our wholly-owned subsidiary. Box Ships completed its initial public offering in April, 2011, and we continue to own 3,437,500 shares of Box Ships, which, as of the date of this annual report, represents approximately 11.0% of Box Ships' issued and outstanding common shares.

In addition, as of the date of this annual report, our newbuilding program consisted of two Ultramax drybulk carriers and three Kamsarmax drybulk carriers that are scheduled to be delivered in 2015. The estimated total contractual cost of our newbuilding vessels amounted to $148.2 million, of which an aggregate of $101.7 million was outstanding as of the date of this annual report.

Allseas and Seacommercial are responsible for all commercial and technical management functions for our fleet, pursuant to long-term management agreements between Allseas, Seacommercial and each of our vessel-owning subsidiaries. Allseas and Seacommercial are beneficially owned by our Chairman, President, Chief Executive Officer and Interim Chief Financial Officer, Mr. Michael Bodouroglou.

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Our Fleet

The following tables present certain information concerning our fleet as of the date of this annual report.

Operating drybulk fleet

Vessel Name and Type	DWT	Year Built	Charter Type	Charterer Name	GrossDailyCharter Rate (1)	Re-delivery fromCharterer (2)
						Earliest	Latest
Panamax
Dream Seas	75,151	2009	Period	Amaggi S.A.	$ 7,000	May 2015	May 2015
Coral Seas	74,477	2006	Period	DS Norden A/S	$ 7,500	May 2015	Sep. 2015
Golden Seas	74,475	2006	Period	Glencore Grain B.V.	$ 7,050	Dec. 2015	Apr. 2016
Pearl Seas	74,483	2006	Period	Glencore Grain B.V.	$ 7,050	Dec. 2015	Apr. 2016
Diamond Seas	74,274	2001	Period	Swissmarine Asia Pte. Ltd.	$ 9,000	Apr. 2015	Jun. 2015
Deep Seas	72,891	1999	Period	Hudson Shipping Lines Inc.	$ 5,500	Jun. 2015	Jun. 2015
Calm Seas	74,047	1999	Period	Caravel Shipping Ltd.	$ 5,100	May 2015	May 2015
Kind Seas	72,493	1999	Period	Marubeni Corporation	$ 4,900	May 2015	May 2015
Total Panamax	592,291
Ultramax
Gentle Seas	63,350	2014	Period	Island View Shipping	$ 8,250	May 2015	May 2015
Peaceful Seas	63,331	2014	Period	Merit Chartering Pte. Ltd.	$ 5,600	Apr. 2015	Apr. 2015
Total Ultramax	126,681
Supramax
Friendly Seas	58,779	2008	Period	Oldendorff Carriers GmbH & Co. KG	$11,200	May 2015	May 2015
Sapphire Seas	53,702	2005	Period	Hengda International Ship. Limited	$ 5,000	May 2015	May 2015
Total Supramax	112,481
Handysize
Prosperous Seas	37,293	2012	Period	Bunge Latin America LLC	$ 7,000	Jul. 2015	Oct. 2015
Precious Seas	37,205	2012	Period	Cargill International S.A.	$ 8,000	Apr. 2015	Apr. 2015
Priceless Seas	37,202	2013	Voyage	Glencore Grain B.V.		Jun. 2015	Jun. 2015
Proud Seas	37,227	2014	Period	Brobulk Limited	$10,000	Apr. 2015	Apr. 2015
Total Handysize	148,927
Total	980,380

(1) Daily charter hire rates in this table do not reflect commissions, which are payable by us to third party chartering brokers and Seacommercial, ranging from 1.25% to 6.25%, including the 1.25% to Seacommercial.

(2) The date range provided represents the earliest and latest date on which the charterer may redeliver the vessel to us upon expiration of the charter.

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Drybulk Newbuildings we have agreed to acquire

Vessel Name	DWT		Shipyard	ExpectedShipyard Delivery
Ultramax
Hull no. DY4050		63,500	Yangzhou Dayang Shipbuilding Co. Ltd.		Q3 2015
Hull no. DY4052		63,500	Yangzhou Dayang Shipbuilding Co. Ltd.		Q3 2015
Total Ultramax		127,000
Kamsarmax
Hull no. YZJ1144		81,800	Jiangsu Yangzijiang Shipbuilding Co.		Q2 2015
Hull no. YZJ1145		81,800	Jiangsu Yangzijiang Shipbuilding Co.		Q2 2015
Hull no. YZJ1142		81,800	Jiangsu Yangzijiang Shipbuilding Co.		Q4 2015
Total Kamsarmax		245,400
Total		372,400

Management of Our Fleet and Agreements with Allseas and Seacommercial

Allseas and Seacommercial provide commercial and technical management services for our fleet, pursuant to long-term management agreements between Allseas and each of our vessel-owning subsidiaries. Technical management services include, among other things, arranging for and managing crews, vessel maintenance, dry-docking, repairs, insurance, maintaining regulatory and classification society compliance and providing technical support. Commercial management services include, among other things, negotiating charters for our vessels, monitoring various types of charters, monitoring the performance of our vessels, locating, purchasing, financing and negotiating the purchase and sale of our vessels, obtaining insurance for our vessels and finance and accounting functions.

Allseas and Seacommercial also provide commercial and technical management services for Box Ships' fleet. Allseas provides financial accounting and financial reporting services for Box Ships.

Allseas, a Liberian corporation based in Athens, Greece, was formed in 2000 as a ship management company and is wholly-owned by our Chairman, President, Chief Executive Officer and Interim Chief Financial Officer, Mr. Michael Bodouroglou. We believe that Allseas has established a reputation in the international shipping industry for operating and maintaining a fleet with high standards of performance, reliability and safety.Seacommercial, a Liberian company based in Athens, Greece, was formed in 2014 and is wholly-owned by Mr. Bodouroglou.

In addition, we have entered in to an accounting agreement with Allseas, pursuant to which Allseas provides financial accounting and financial reporting services. We have also entered into separate agreements with Allseas with respect to the provision of administrative services and certain executive services.  For additional information regarding the above-referenced agreements, and other agreements that we have with Allseas, Seacommercial and other affiliated companies, please see "Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Agreements with Our Managers."

Chartering of our Fleet

We primarily employ our vessels in the spot charter market, on short-term time charters or on voyage charters, ranging from 10 days to three months. However, depending on the time charter market, we may decide from time to time to employ our vessels on medium to long-term time charters. All of our vessels are currently employed on fixed rate time charters or voyage charters with expirations ranging from April 2015 to April 2016.

Time Charters

A time charter is a contract to charter a vessel for a fixed period of time at a specified or floating daily or index-based daily rate and can last from a few days to several years. Under a time charter, the charterer pays for the voyage expenses, such as port expenses, canal dues, war risk insurances and fuel costs, while the shipowner pays for vessel operating expenses, including, among other costs, crew costs, provisions, deck and engine stores, lubricating oil, insurance, maintenance and repairs and costs relating to a vessel's intermediate and special surveys.

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Spot Charters

A spot charter generally refers to a voyage charter or a trip charter or a short-term time charter.

Vessels operating in the spot market typically are chartered for a single voyage, which may last up to several weeks. Under a typical voyage charter in the spot market, the shipowner is paid an agreed-upon total amount on the basis of moving cargo from a loading port to a discharge port. In voyage charters, the charterer generally is responsible for any delay at the loading or discharging ports, and the shipowner is generally responsible for paying both vessel operating expenses and voyage expenses, including any bunker expenses, port fees, cargo loading and unloading expenses, canal tolls, agency fees and commissions.

Under a typical trip charter in the spot market, the shipowner is paid on the basis of moving cargo from a loading port to a discharge port at a set daily rate. The charterer is responsible for paying for bunkers and other voyage expenses, while the shipowner is responsible for paying vessel operating expenses. When the vessel is off-hire, or not available for service, the shipowner generally is not entitled to payment, unless the charterer is responsible for the circumstances giving rise to the lack of availability.

Our Customers

Our assessment of a charterer's financial condition, creditworthiness, reliability and track record are important factors in negotiating employment for our vessels. We believe that our management team's network of relationships and more generally our Managers' reputation and experience in the shipping industry will continue to provide competitive employment opportunities for our vessels in the future.

For the year ended December 31, 2014, approximately 11.6% of our revenue was derived from one of our charterers, Cargill International S.A.

On March 9, 2011, we received a notice of termination, effective immediately, from Korea Line Corporation, or KLC, a South Korean shipping company that filed a petition for rehabilitation in January 2011, relating to our time charter with KLC for the M/V Pearl Seas, which was originally scheduled to expire no earlier than in August 2011. Under the charter, we were entitled to a gross daily rate of $37,300, with an optional extension of up to an additional 26 to 28 months at the charterers' option at a gross daily rate of $32,500, plus a 50% profit share above that level. Revenues from our charter with KLC were 16.2% of our total revenues for the year ended December 31, 2010.We received all charter hire due on the vessel until January 29, 2011. On September 15, 2011, we entered into a settlement agreement with KLC in relation to the early termination of the respective time charter, while in March 2013, the Seoul Central District Court approved an amended KLC rehabilitation plan, pursuant to which we received an aggregate of $0.4 million in cash and 65,896 shares of KLC.

In 2014, we sold a total of 21,346 KLC shares at an average sale price of $23.52 per share. Following the sale of such shares, the number of KLC shares held by us was 44,550. The total cash received from the sale of these shares amounted to $0.5 million, net of commissions, which resulted in a net loss of $25,529 that was recorded in 2014.

Furthermore, in April 2015, we sold an additional 18,133 KLC shares at an average sale price of $22.62 per share. The total cash expected to be received from the sale of these shares amounts to $0.4 million, net of commissions (based on U.S. dollar/KRW exchange rate of $1.000:KRW1,096.92 as of April 15, 2015). As of the date of this annual report, the number of KLC shares held by us was 26,417.

The Drybulk Shipping Industry

The global drybulk carrier fleet may be divided into seven categories based on a vessel's carrying capacity. These categories consist of:

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· Very Large Ore Carriers (VLOC) have a carrying capacity of more than 200,000 dwt and are a comparatively new sector of the drybulk carrier fleet. VLOCs are built to exploit economies of scale on long-haul iron ore routes.

· Capesize vessels have a carrying capacity of 110,000-199,999 dwt. Only the largest ports around the world possess the infrastructure to accommodate vessels of this size. Capesize vessels are primarily used to transport iron ore or coal and, to a much lesser extent, grains, primarily on long-haul routes.

· Post-Panamax vessels have a carrying capacity of 90,000-109,999 dwt. These vessels tend to have a shallower draft and larger beam than a standard Panamax vessel with a higher cargo capacity. These vessels have been designed specifically for loading high cubic cargoes from draught restricted ports, although they cannot transit the Panama Canal.

· Panamax/Kamsarmax vessels have a carrying capacity of 68,000-89,999 dwt. These vessels carry coal, iron ore, grains, and, to a lesser extent, minor bulks, including steel products, cement and fertilizers. Panamax vessels are able to pass through the Panama Canal, making them more versatile than larger vessels with regard to accessing different trade routes. Most Panamax and Post-Panamax vessels are "gearless," and therefore must be served by shore-based cargo handling equipment.

· Ultramax vessels have a carrying capacity of 60,000-67,999 dwt. Ultramax vessels operate in a large number of geographically dispersed global trade routes, carrying primarily grains and minor bulks. Ultramax vessels are normally offering cargo loading and unloading flexibility with on-board cranes, while at the same time possessing the cargo carrying capability approaching conventional Panamax vessels.

· Handymax/Supramax vessels have a carrying capacity of 40,000-59,999 dwt. Like Ultramax vessels, Handymax vessels operate in a large number of geographically dispersed global trade routes, carrying primarily grains and minor bulks. Within the Handymax category there is also a sub-sector known as Supramax. Supramax vessels are ships between 50,000 to 59,999 dwt, normally offering cargo loading and unloading flexibility with on-board cranes.

· Handysize vessels have a carrying capacity of up to 39,999 dwt. These vessels are primarily involved in carrying minor bulk cargoes. Increasingly, ships of this type operate within regional trading routes, and may serve as trans-shipment feeders for larger vessels. Handysize vessels are well suited for small ports with length and draft restrictions. Their cargo gear enables them to service ports lacking the infrastructure for cargo loading and unloading.

The drybulk shipping market is the primary provider of global commodities transportation. Approximately one third of all seaborne trade is drybulk related.

The demand for drybulk carrier capacity is determined by the underlying demand for commodities transported in drybulk carriers, which in turn is influenced by trends in the global economy. Demand for drybulk carrier capacity is also affected by the operating efficiency of the global fleet, with port congestion, which has been a feature of the market since 2004, absorbing tonnage and therefore leading to a tighter balance between supply and demand. In evaluating demand factors for drybulk carrier capacity, we believe that drybulk carriers can be the most versatile element of the global shipping fleets in terms of employment alternatives. Drybulk carriers seldom operate on round trip voyages. Rather, the norm is triangular or multi-leg voyages. Hence, trade distances assume greater importance in the demand equation.

The supply of drybulk carriers is dependent on the delivery of new vessels and the removal of vessels from the global fleet, either through scrapping or loss. As of March 2015, the orderbook of new drybulk vessels scheduled to be delivered represented approximately 20% of the world drybulk fleet at that time, with most vessels on the orderbook expected to be delivered during the next three years. The level of scrapping activity is generally a function of scrapping prices in relation to current and prospective charter market conditions, as well as operating, repair and survey costs. Drybulk carriers at or over 25 years old are considered to be scrapping candidate vessels.

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Charter Hire Rates

Charter hire rates fluctuate by varying degrees amongst the drybulk carrier size categories. The volume and pattern of trade in a small number of commodities (major bulks) affect demand for larger vessels. Because demand for larger drybulk vessels is affected by the volume and pattern of trade in a relatively small number of commodities, charter hire rates (and vessel values) of larger ships tend to be more volatile. Conversely, trade in a greater number of commodities (minor bulks) drives demand for smaller drybulk carriers. Accordingly, charter rates and vessel values for those vessels are subject to less volatility. Charter hire rates paid for drybulk carriers are primarily a function of the underlying balance between vessel supply and demand. In addition, time charter rates will vary depending on the length of the charter period and vessel-specific factors, such as container capacity, age, speed and fuel consumption. Furthermore, the pattern seen in charter rates is broadly mirrored across the different charter types and between the different drybulk carrier categories.

In the time charter market, rates vary depending on the length of the charter period and vessel specific factors such as age, speed and fuel consumption. In the voyage charter market, rates are influenced by cargo size, commodity, port dues and canal transit fees, as well as delivery and re-delivery regions. In general, a larger cargo size is quoted at a lower rate per ton than a smaller cargo size. Routes with costly ports or canals generally command higher rates than routes with low port dues and no canals to transit. Voyages with a load port within a region that includes ports where vessels usually discharge cargo or a discharge port within a region that includes ports where vessels load cargo also are generally quoted at lower rates. This is because such voyages generally increase vessel utilization by reducing the unloaded portion (or ballast leg) that is included in the calculation of the return charter to a loading area.

Within the drybulk shipping industry, the charter hire rate references most likely to be monitored are the freight rate indices issued by the Baltic Exchange, such as the BDI. These references are based on actual charter hire rates under charter entered into by market participants as well as daily assessments provided to the Baltic Exchange by a panel of major shipbrokers. The Baltic Panamax Index is the index with the longest history. The Baltic Capesize Index and Baltic Handymax Index are of more recent origin.

In 2008, the BDI declined 94% from a peak of 11,793 in May 2008 to a low of 663 in December 2008 and has remained volatile since that time. During 2014, the BDI remained volatile, ranging from a high of 2,113 to a low of 723. The BDI recorded a 25-year record low of 509 in February 2015 and has since increased to 586 as of April 15, 2015.

Vessel Prices

Newbuilding prices are determined by a number of factors, including the underlying balance between shipyard output and capacity, raw material costs, freight markets and sometimes exchange rates. In the last few years, high levels of new ordering were recorded across all sectors of shipping. As a result, most of the major shipyards in Japan, South Korea and China had full orderbook until the end of 2011, although the downturn in freight rates and the lack of funding due to the wider global financial crisis has led, and is expected to continue to lead, to some of these orders being cancelled or delayed.

Newbuilding prices increased significantly between 2003 and 2008, due to tightness in shipyard capacity, high levels of new ordering and stronger freight rates. However, with the sudden and steep decline in freight rates, after August 2008 and lack of new vessel ordering, newbuilding vessel values started to decline. The values of vessels in the secondhand market rose sharply in 2004 and 2005 as a result of the steep increase in newbuilding prices and the strength of the charter market during that period, before declining in the early part of 2006, only to rise thereafter to reach historical highs in the third quarter of 2008. However, the significant downturn in freight rates since August 2008 has negatively impacted secondhand values. Currently, newbuilding and secondhand values remain well below the historically high levels reached in the third quarter of 2008.

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Competition

We operate in a highly competitive market based primarily on supply and demand. We compete for charters on the basis of price, vessel location, size, age and condition of the vessel, as well as on our reputation. Allseas arranges our charters through the use of brokers, who negotiate the terms of the charters based on market conditions. We compete primarily with other owners of drybulk carriers, many of which may have more resources than us and may operate vessels that are newer, and therefore more attractive to charterers, than our vessels. Ownership of drybulk carriers is highly fragmented and is divided among publicly listed companies, state controlled owners and independent shipowners. Some of our publicly listed competitors include Baltic Trading Inc. (NYSE: BALT), Diana Shipping Inc. (NYSE: DSX), DryShips Inc. (NASDAQ: DRYS), Eagle Bulk Shipping Inc. (NASDAQ: EGLE), Navios Maritime Holdings Inc. (NYSE: NM), Star Bulk Inc. (NASDAQ: SBLK), Safe Bulkers Inc. (NYSE: SB) and Scorpio Bulkers (NYSE: SALT).

In the future, entities affiliated with our Chairman, President, Chief Executive Officer and Interim Chief Financial Officer, Mr. Michael Bodouroglou, may seek to acquire drybulk carriers. One or more of these vessels may be managed by Allseas and may compete with the vessels in our fleet. Mr. Bodouroglou and entities affiliated with him, including Allseas, might be faced with conflicts of interest with respect to their own interests and their obligations to us.

Mr. Bodouroglou has entered into an agreement with us pursuant to which he and the entities which he controls will grant us a right of first refusal on any drybulk carrier that these entities may acquire in the future. In addition, we have entered into an agreement with Box Ships and Mr. Bodouroglou that provides that so long as (i) Mr. Bodouroglou is a director or executive officer of both our Company and Box Ships and (ii) we own at least 5% of the total issued and outstanding common shares of Box Ships, Box Ships will not, directly or indirectly, acquire or charter any drybulk carrier without our prior written consent and we will not, directly or indirectly, acquire or charter any containership vessel without the prior written consent of Box Ships.

Seasonality

Demand for vessel capacity has historically exhibited seasonal variations and, as a result, fluctuations in charter rates. This seasonality may result in quarter-to-quarter volatility in our operating results for vessels trading in the spot market. The drybulk carrier market is typically stronger in the fall and winter months in anticipation of increased consumption of coal and other raw materials in the northern hemisphere during the winter months. In addition, unpredictable weather patterns in these months tend to disrupt vessel scheduling and supplies of certain commodities.

To the extent that we must enter into a new charter or renew an existing charter for a vessel in our fleet during a time when seasonal variations have reduced prevailing charter rates, our operating results may be adversely affected.

Permits and Authorizations

We are required by various governmental and quasi-governmental agencies to obtain certain permits, licenses and certificates with respect to our vessels. The kinds of permits, licenses and certificates required depend upon several factors, including the commodity transported, the waters where the vessel operates, the nationality of the vessel's crew and the age of the vessel. We have obtained all permits, licenses and certificates currently required to permit our vessels to operate. Additional laws and regulations, environmental or otherwise, may be adopted which could limit our ability to do business or increase the cost of doing business.

Environmental and Other Regulations

Government regulation significantly affects the ownership and operation of our vessels. We are subject to international conventions and treaties, national, state and local laws and regulations in force in the countries in which our vessels may operate or are registered relating to safety and health and environmental protection, including the storage, handling, emission, transportation and discharge of hazardous and non-hazardous materials, and the remediation of contamination and liability for damage to natural resources. Compliance with such laws, regulations and other requirements may entail significant expense, including vessel modifications and implementation of certain operating procedures.

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A variety of governmental and private entities subject our vessels to both scheduled and unscheduled inspections. These entities include the local port authorities, (applicable national authorities such as the U.S. Coast Guard and harbor masters), classification societies, flag state administrations (countries of registry) and charterers. Some of these entities require us to obtain permits, licenses, certificates and other authorizations for the operation of our vessels. Our failure to maintain necessary permits, licenses, certificates or authorizations could require us to incur substantial costs or could result in the operation of one or more of our vessels being temporarily suspended.

We believe that the heightened level of environmental and quality concerns among insurance underwriters, regulators and charterers is leading to greater inspection and safety requirements on all vessels and may accelerate the scrapping of older vessels throughout the shipping industry. Increasing environmental concerns have created a demand for vessels that conform to the stricter environmental standards. We are required to maintain operating standards for all of our vessels that emphasize operational safety, quality maintenance, continuous training of our officers and crews and compliance with United States and international regulations. We believe that the operation of our vessels is in substantial compliance with applicable environmental laws and regulations and that our vessels have all material permits, licenses, certificates or other authorizations necessary for the conduct of our operations as of the date of this annual report. However, because such laws and regulations are frequently changed and may impose increasingly stricter requirements, we cannot predict the ultimate cost of complying with these requirements, or the impact of these requirements on the resale value or useful lives of our vessels. In addition, a future serious marine incident that causes significant adverse environmental impact, such as the 2010 Deepwater Horizon oil spill, could result in additional legislation or regulation that could negatively affect our profitability.

The major environmental and safety laws and regulations applicable to the operation of our vessels are discussed below.

International Maritime Organization

The United Nations' International Maritime Organization (the "IMO") has adopted the International Convention for the Prevention of Marine Pollution from Ships, 1973, as modified by the Protocol of 1978 relating thereto (collectively referred to as MARPOL 73/78 and herein as "MARPOL"). MARPOL entered into force on October 2, 1983. It has been adopted by over 150 nations, including many of the jurisdictions in which our vessels operate. MARPOL sets forth pollution-prevention requirements applicable to drybulk carriers, among other vessels, and is broken into six Annexes, each of which regulates a different source of pollution. Annex I relates to oil leakage or spilling; Annexes II and III relate to harmful substances carried, in bulk, in liquid or packaged form, respectively; Annexes IV and V relate to sewage and garbage management, respectively; and Annex VI, lastly, relates to air emissions.

Air Emissions

In September of 1997, the IMO adopted Annex VI to MARPOL to address air pollution. Effective May 2005, Annex VI sets limits on nitrogen oxide emissions from ships whose diesel engines were constructed (or underwent major conversions) on or after January 1, 2000. It also prohibits "deliberate emissions" of "ozone depleting substances," defined to include certain halons and chlorofluorocarbons. "Deliberate emissions" are not limited to times when the ship is at sea; they can for example include discharges occurring in the course of the ship's repair and maintenance. Emissions of "volatile organic compounds" from certain tankers, and the shipboard incineration (from incinerators installed after January 1, 2000) of certain substances (such as polychlorinated biphenyls (PCBs)) are also prohibited. Annex VI also includes a global cap on the sulfur content of fuel oil and allows for special areas to be established with more stringent controls on sulfur emissions, known as Emission Control Areas ("ECAs") (see below).

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The IMO's Marine Environment Protection Committee, or MEPC, adopted amendments to Annex VI on October 10, 2008, which were entered into force on July 1, 2010. The amended Annex VI seeks to further reduce air pollution by, among other things, implementing a progressive reduction of the amount of sulfur contained in any fuel oil used on board ships. As of January 1, 2012, the amended Annex VI required that fuel oil contain no more than 3.50% sulfur (from the current cap of 4.50%). By January 1, 2020, sulfur content must not exceed 0.50%, subject to a feasibility review to be completed no later than 2018.

Sulfur content standards are even stricter within certain "Emission Control Areas," or ECAs. By July 1, 2010, ships operating within an ECA were not permitted to use fuel with sulfur content in excess of 1.0% (from 1.50%), which was further reduced to 0.10% on January 1, 2015. Amended Annex VI establishes procedures for designating new ECAs. Currently, the Baltic Sea and the North Sea have been so designated. Effective August 1, 2012, certain coastal areas of North America were designated ECAs; the United States Caribbean Sea adjacent to Puerto Rico and the U.S. Virgin Islands was also so designated as of January 1, 2014. Ocean-going vessels in these areas will be subject to stringent emissions controls and may cause us to incur additional costs. If other ECAs are approved by the IMO or other new or more stringent requirements relating to emissions from marine diesel engines or port operations by vessels are adopted by the EPA or the states where we operate, compliance with these regulations could entail significant capital expenditures or otherwise increase the costs of our operations.

As of January 1, 2013, MARPOL made mandatory certain measures relating to energy efficiency for ships. It makes the Energy Efficiency Design Index for new ships mandatory and the Ship Energy Efficiency Management Plan apply to all ships.

Amended Annex VI also establishes new tiers of stringent nitrogen oxide emissions standards for new marine engines, depending on their date of installation. The U.S. Environmental Protection Agency promulgated equivalent (and in some senses stricter) emissions standards in late 2009.

Safety Management System Requirements

The IMO also adopted the International Convention for the Safety of Life at Sea, or SOLAS, and the International Convention on Load Lines, or the LL Convention, which impose a variety of standards that regulate the design and operational features of ships. The IMO periodically revises the SOLAS and LL Convention standards.May 2012 SOLAS amendments entered into force as of January 1, 2014. The Convention on Limitation of Liability for Maritime Claims was recently amended and the amendments are expected to go into effective on June 8, 2015. The amendments alter the limits of liability for loss of life or personal injury claims and property claims against ship-owners.

The operation of our ships is also affected by the requirements set forth in Chapter IX of SOLAS, which sets forth the ISM Code. The ISM Code requires shipowners and bareboat charterers to develop and maintain an extensive "Safety Management System" that includes the adoption of a safety and environmental protection policy setting forth instructions and procedures for safe operation and describing procedures for dealing with emergencies. We rely upon the safety management system that our technical manager has developed for compliance with the ISM Code. The failure of a shipowner or bareboat charterer to comply with the ISM Code may subject such party to increased liability, may decrease available insurance coverage for the affected vessels and may result in a denial of access to, or detention in, certain ports.

The ISM Code requires that vessel operators obtain a safety management certificate, or SMC, for each vessel they operate. This certificate evidences compliance by a vessel's operators with the ISM Code requirements for a safety management system. No vessel can obtain an SMC under the ISM Code unless its manager has been awarded a document of compliance issued in most instances by the vessel's flag state. As of the date of this report, our appointed ship managers have obtained DOCs for their officers and SMCs for all of our vessels for which the certificates are required by the IMO, which are renewed as required.

Noncompliance with the ISM Code or other IMO regulations may subject the shipowner or bareboat charterer to increased liability, lead to decreases in available insurance coverage for affected vessels or result in the denial of access to, or detention in, some ports. As of the date of this report, each of our vessels is ISM Code certified. However, there can be no assurance that such certificate will be maintained.

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Pollution Control and Liability Requirements

The IMO adopted the International Convention for the Control and Management of Ships' Ballast Water and Sediments, or the BWM Convention, in February 2004. The BWM Convention's implementing regulations call for a phased introduction of mandatory ballast water exchange requirements, to be replaced in time with mandatory concentration limits. The BWM Convention will not enter into force until 12 months after it has been adopted by 30 states, the combined merchant fleets of which represent not less than 35% of the gross tonnage of the world's merchant shipping tonnage. To date, there has not been sufficient adoption of this standard for it to take force. Many of the implementation dates originally written into the BWM Convention have already passed, so that once the BWM Convention enters into force, the period for installation of mandatory ballast water exchange requirements would be extremely short, with several thousand ships a year needing to install ballast water management systems (BWMS). For this reason, on December 4, 2013, the IMO Assembly passed a resolution revising the application dates of the BWM Convention so that they are triggered by the entry into force date and not the dates originally in the BWM Convention. This in effect makes all vessels constructed before the entry into force date 'existing' vessels, and allows for the installation of a BWMS on such vessels at the first renewal survey following entry into force. If mid-ocean ballast exchange or ballast water treatment requirements become mandatory, the cost of compliance could increase for ocean carriers. Although we do not believe the costs of compliance with mandatory mid-ocean ballast exchange would be material, it is difficult to predict the overall impact of such a requirement on our operations.

The IMO adopted the International Convention on Civil Liability for Bunker Oil Pollution Damage, or the Bunker Convention, to impose strict liability on shipowners for pollution damage in jurisdictional waters of ratifying states caused by discharges of bunker fuel. The Bunker Convention requires registered owners of ships over 1,000 gross tons to maintain insurance for pollution damage in an amount equal to the limits of liability under the applicable national or international limitation regime (but not exceeding the amount calculated in accordance with the Convention on Limitation of Liability for Maritime Claims of 1976, as amended). With respect to non-ratifying states, liability for spills or releases of oil carried as fuel in ship's bunkers typically is determined by the national or other domestic laws in the jurisdiction where the events or damages occur.

The IMO continues to adopt new regulations. It is impossible to predict what additional regulations, if any, may be adopted by the IMO and what effect, if any, such regulations might have on our operations.

OPA and Comprehensive Environmental Response, Compensation and Liability Act

The U.S. Oil Pollution Act (OPA) established an extensive regulatory and liability regime for the protection and cleanup of the environment from oil spills. OPA affects all "owners and operators" whose vessels trade with the United States, its territories and possessions or whose vessels operate in United States waters, which includes the United States' territorial sea and its 200 nautical mile exclusive economic zone around the United States. The United States has also enacted the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), which applies to the discharge of hazardous substances other than oil, whether on land or at sea. OPA and CERCLA both define "owner and operator" in the case of a vessel as any person owning, operating or chartering by demise, the vessel. Both OPA and CERCLA impact our operations.

Under OPA, vessel owners and operators are "responsible parties" and are jointly, severally and strictly liable (unless the spill results solely from the act or omission of a third party, an act of God or an act of war) for all containment and clean-up costs and other damages arising from discharges or threatened discharges of oil from their vessels. OPA defines these other damages broadly to include:

(i) injury to, destruction or loss of, or loss of use of, natural resources and related assessment costs;

(ii) injury to, or economic losses resulting from, the destruction of real and personal property;

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(iii) net loss of taxes, royalties, rents, fees or net profit revenues resulting from injury, destruction or loss of real or personal property, or natural resources;

(iv) loss of subsistence use of natural resources that are injured, destroyed or lost;

(v) lost profits or impairment of earning capacity due to injury, destruction or loss of real or personal property or natural resources; and

(vi) net cost of increased or additional public services necessitated by removal activities following a discharge of oil, such as protection from fire, safety or health hazards, and loss of subsistence use of natural resources.

OPA contains statutory caps on liability and damages; such caps do not apply to direct cleanup costs. Effective July 31, 2009, the U.S. Coast Guard adjusted the limits of OPA liability for non-tank vessels (e.g. drybulk) to the greater of $1,000 per gross ton or $854,400 (subject to periodic adjustment for inflation). These limits of liability do not apply if an incident was proximately caused by the violation of an applicable U.S. federal safety, construction or operating regulation by a responsible party (or its agent, employee or a person acting pursuant to a contractual relationship), or a responsible party's gross negligence or willful misconduct. The limitation on liability similarly does not apply if the responsible party fails or refuses to (i) report the incident where the responsibility party knows or has reason to know of the incident; (ii) reasonably cooperate and assist as requested in connection with oil removal activities; or (iii) without sufficient cause, comply with an order issued under the Federal Water Pollution Act (Section 311 (c), (e)) or the Intervention on the High Seas Act.

CERCLA contains a similar liability regime whereby owners and operators of vessels are liable for cleanup, removal and remedial costs, as well as damage for injury to, or destruction or loss of, natural resources, including the reasonable costs associated with assessing same, and health assessments or health effects studies. There is no liability if the discharge of a hazardous substance results solely from the act or omission of a third party, an act of God or an act of war. Liability under CERCLA is limited to the greater of $300 per gross ton or $5.0 million for vessels carrying a hazardous substance as cargo and the greater of $300 per gross ton or $500,000 for any other vessel. These limits do not apply (rendering the responsible person liable for the total cost of response and damages) if the release or threat of release of a hazardous substance resulted from willful misconduct or negligence, or the primary cause of the release was a violation of applicable safety, construction or operating standards or regulations. The limitation on liability also does not apply if the responsible person fails or refused to provide all reasonable cooperation and assistance as requested in connection with response activities where the vessel is subject to OPA.

OPA and CERCLA both require owners and operators of vessels to establish and maintain with the U.S. Coast Guard evidence of financial responsibility sufficient to meet the maximum amount of liability to which the particular responsible person may be subject. Vessel owners and operators may satisfy their financial responsibility obligations by providing a proof of insurance, a surety bond, qualification as a self-insurer or a guarantee. We plan to comply with the U.S. Coast Guard's financial responsibility regulations by providing a certificate of responsibility evidencing sufficient self-insurance.

The 2010 Deepwater Horizon oil spill in the Gulf of Mexico may also result in additional regulatory initiatives or statutes, including the raising of liability caps under OPA. Compliance with any new requirements of OPA may substantially impact our cost of operations or require us to incur additional expenses to comply with any new regulatory initiatives or statutes. For example, on August 15, 2012, the U.S. Bureau of Safety and Environment Enforcement issued a final drilling safety rule for offshore oil and gas operations that strengthens the requirements for safety equipment, well control systems, and blowout prevention practices. Additional legislation or regulations applicable to the operation of our vessels that may be implemented in the future could adversely affect our business.

We currently maintain pollution liability coverage insurance in the amount of $1 billion per incident for each of our vessels. If the damages from a catastrophic spill were to exceed our insurance coverage, it could have a material adverse effect on our business, financial condition, results of operations and cash flows.

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OPA specifically permits individual states to impose their own liability regimes with regard to oil pollution incidents occurring within their boundaries, provided they accept, at a minimum, the levels of liability established under OPA and some states have enacted legislation providing for unlimited liability for oil spills. In some cases, states which have enacted such legislation have not yet issued implementing regulations defining vessel owners' responsibilities under these laws. We intend to comply with all applicable state regulations in the ports where our vessels call. We believe that we are in substantial compliance with all applicable existing state requirements. In addition, we intend to comply with all future applicable state regulations in the ports where our vessels call.

Other Environmental Initiatives

The Clean Water Act (CWA) prohibits the discharge of oil, hazardous substances and ballast water in U.S. navigable waters unless authorized by a duly-issued permit or exemption, and imposes strict liability in the form of penalties for any unauthorized discharges. The CWA also imposes substantial liability for the costs of removal, remediation and damages and complements the remedies available under OPA and CERCLA. Furthermore, many U.S. states that border a navigable waterway have enacted environmental pollution laws that impose strict liability on a person for removal costs and damages resulting from a discharge of oil or a release of a hazardous substance. These laws may be more stringent then U.S. federal law.

The EPA regulates the discharge of ballast water and other substances in U.S. waters under the CWA. EPA regulations require vessels 79 feet in length or longer (other than commercial fishing and recreational vessels) to comply with a Vessel General Permit authorizing ballast water discharges and other discharges incidental to the operation of vessels. The Vessel General Permit imposes technology and water-quality based effluent limits for certain types of discharges and establishes specific inspection, monitoring, recordkeeping and reporting requirements to ensure the effluent limits are met. On March 28, 2013, the EPA re-issued the VGP for another five years; this 2013 VGP took effect December 19, 2013. The 2013 VGP contains numeric ballast water discharge limits for most vessels to reduce the risk of invasive species in US waters, more stringent requirements for exhaust gas scrubbers and the use of environmentally acceptable lubricants. U.S. Coast Guard regulations adopted under the U.S. National Invasive Species Act, or NISA, also impose mandatory ballast water management practices for all vessels equipped with ballast water tanks entering or operating in U.S. waters. As of June 21, 2012, the U.S. Coast Guard implemented revised regulations on ballast water management by establishing standards on the allowable concentration of living organisms in ballast water discharged from ships in U.S. waters. The revised ballast water standards are consistent with those adopted by the IMO in 2004. The U.S. Coast Guard will review the practicability of implementing a more stringent ballast water discharge standard and publish results no later than January 1, 2016. Compliance with the EPA and the U.S. Coast Guard regulations could require the installation of certain engineering equipment and water treatment systems to treat ballast water before it is discharged or the implementation of other port facility disposal arrangements or procedures at potentially substantial cost, or may otherwise restrict our vessels from entering U.S. waters.

The U.S. Clean Air Act

The U.S. Clean Air Act of 1970 (including its amendments of 1977 and 1990) (the "CAA") requires the EPA to promulgate standards applicable to emissions of volatile organic compounds and other air contaminants. Our vessels are subject to vapor control and recovery requirements for certain cargoes when loading, unloading, ballasting, cleaning and conducting other operations in regulated port areas. Our vessels that operate in such port areas with restricted cargoes are equipped with vapor recovery systems that satisfy these requirements. The CAA also requires states to draft State Implementation Plans ("SIPs") designed to attain national health-based air quality standards in each state. Although state-specific, SIPs may include regulations concerning emissions resulting from vessel loading and unloading operations by requiring the installation of vapor control equipment. As indicated above, our vessels operating in covered port areas are already equipped with vapor recovery systems that satisfy these existing requirements.

European Union Regulations

In October 2009, the European Union amended a directive to impose criminal sanctions for illicit ship-source discharges of polluting substances, including minor discharges, if committed with intent, recklessly or with serious negligence and the discharges individually or in the aggregate result in deterioration of the quality of water. Aiding and abetting the discharge of a polluting substance may also lead to criminal penalties. Member States were required to enact laws or regulations to comply with the directive by the end of 2010. Criminal liability for pollution may result in substantial penalties or fines and increased civil liability claims. The directive applies to all types of vessels, irrespective of their flag, but certain exceptions apply to warships or where human safety or that of the ship is in danger.

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Greenhouse Gas Regulation

Currently, the emissions of greenhouse gases from international shipping are not subject to the Kyoto Protocol to the United Nations Framework Convention on Climate Change, which entered into force in 2005 and pursuant to which adopting countries have been required to implement national programs to reduce greenhouse gas emissions. However, in July 2011 the MEPC adopted two new sets of mandatory requirements to address greenhouse gas emissions from ships that entered into force in January 2013. Currently operating ships will be required to develop Ship Energy Efficiency Management Plans, and minimum energy efficiency levels per capacity mile, outlined in the Energy Efficiency Design Index, will apply to new ships. The MEPC is also considering market-based mechanisms to reduce greenhouse gas emissions from ships. The European Parliament and Council of Ministers are expected to endorse regulations that would require the monitoring and reporting of greenhouse gas emissions from marine vessels in 2015. For 2020, the EU made a unilateral commitment to reduce overall greenhouse gas emissions from its member states by 20% of 1990 levels. The EU also committed to reduce its emissions by 20% under the Kyoto Protocol's second period, from 2013 to 2020. 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. In December 2013 the European Union environmental ministers discussed draft rules to implement monitoring and reporting of carbon dioxide emissions from ships. In the United States, the EPA has issued a finding that greenhouse gases endanger the public health and safety and has adopted regulations to limit greenhouse gas emissions from certain mobile sources and large stationary sources. Although the mobile source emissions regulations do not apply to greenhouse gas emissions from vessels, such regulation of vessels is foreseeable, and the EPA has in recent years received petitions from the California Attorney General and various environmental groups seeking such regulation. Any passage of climate control legislation or other regulatory initiatives by the IMO, European Union, the U.S. or other countries where we operate, or any treaty adopted at the international level to succeed the Kyoto Protocol, that restrict emissions of greenhouse gases could require us to make significant financial expenditures which we cannot predict with certainty at this time.

International Labour Organization

The International Labour Organization (ILO) is a specialized agency of the UN with headquarters in Geneva, Switzerland. The ILO has adopted the Maritime Labor Convention 2006, or MLC 2006. A Maritime Labor Certificate and a Declaration of Maritime Labor Compliance will be required to ensure compliance with the MLC 2006 for all ships above 500 gross tons in international trade. The MLC 2006 will enter into force one year after 30 countries with a minimum of 33% of the world's tonnage have ratified it. On August 20, 2012, the required number of countries was met and MLC 2006 entered into force on August 20, 2013. The ratification of MLC 2006 will require us to develop new procedures to ensure full compliance with its requirements.

Vessel Security Regulations

Since the terrorist attacks of September 11, 2001 in the United States, there have been a variety of initiatives intended to enhance vessel security such as the Maritime Transportation Security Act of 2002, or MTSA. To implement certain portions of the MTSA, in July 2003, the U.S. Coast Guard issued regulations requiring the implementation of certain security requirements aboard vessels operating in waters subject to the jurisdiction of the United States. The regulations also impose requirements on certain ports and facilities, some of which are regulated by the U.S. Environmental Protection Agency, or the EPA.

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Similarly, in December 2002, amendments to SOLAS created a new chapter of the convention dealing specifically with maritime security. The new Chapter V became effective in July 2004 and imposes various detailed security obligations on vessels and port authorities, and mandates compliance with the International Ship and Port Facilities Security Code, or the ISPS Code. The ISPS Code is designed to enhance the security of ports and ships against terrorism. To trade internationally, a vessel must attain an International Ship Security Certificate, or ISSC, from a recognized security organization approved by the vessel's flag state. Among the various requirements are:

· on-board installation of automatic identification systems to provide a means for the automatic transmission of safety-related information from among similarly equipped ships and shore stations, including information on a ship's identity, position, course, speed and navigational status;

· on-board installation of ship security alert systems, which do not sound on the vessel but only alert the authorities on shore;

· the development of vessel security plans;

· ship identification number to be permanently marked on a vessel's hull;

· a continuous synopsis record kept onboard showing a vessel's history including the name of the ship, the state whose flag the ship is entitled to fly, the date on which the ship was registered with that state, the ship's identification number, the port at which the ship is registered and the name of the registered owner(s) and their registered address; and

· compliance with flag state security certification requirements.

Ships operating without a valid certificate may be detained at port until it obtains an ISSC, or it may be expelled from port, or refused entry at port.

Furthermore, additional security measures could be required in the future which could have a significant financial impact on us. The U.S. Coast Guard regulations, intended to be aligned with international maritime security standards, exempt non-U.S. vessels from MTSA vessel security measures, provided such vessels have on board a valid ISSC that attests to the vessel's compliance with SOLAS security requirements and the ISPS Code. We have implemented the various security measures addressed by the MTSA, SOLAS and the ISPS Code.

Inspection by Classification Societies

Every seagoing vessel must be "classed" by a classification society. The classification society certifies that the vessel is "in class," signifying that the vessel has been built and maintained in accordance with the rules of the classification society and complies with applicable rules and regulations of the vessel's country of registry and the international conventions of which that country is a member. In addition, where surveys are required by international conventions and corresponding laws and ordinances of a flag state, the classification society will undertake them on application or by official order, acting on behalf of the authorities concerned.

The classification society also undertakes on request other surveys and checks that are required by regulations and requirements of the flag state. These surveys are subject to agreements made in each individual case and/or to the regulations of the country concerned.

For maintenance of the class certification, regular and extraordinary surveys of hull, machinery, including the electrical plant, and any special equipment classed are required to be performed as follows:

Annual Surveys. For seagoing ships, annual surveys are conducted for the hull and the machinery, including the electrical plant, and where applicable for special equipment classed, within three months before or after each anniversary date of the date of commencement of the class period indicated in the certificate.

Intermediate Surveys. Extended annual surveys are referred to as intermediate surveys and typically are conducted two and one-half years after commissioning and each class renewal. Intermediate surveys are to be carried out at or between the occasion of the second or third annual survey.

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Class Renewal Surveys. Class renewal surveys, also known as special surveys, are carried out for the ship's hull, machinery, including the electrical plant and for any special equipment classed, at the intervals indicated by the character of classification for the hull. At the special survey the vessel is thoroughly examined, including audio-gauging to determine the thickness of the steel structures. Should the thickness be found to be less than class requirements, the classification society would prescribe steel renewals. The classification society may grant a one year grace period for completion of the special survey. Substantial amounts of money may have to be spent for steel renewals to pass a special survey if the vessel experiences excessive wear and tear. In lieu of the special survey every four or five years, depending on whether a grace period was granted, a shipowner has the option of arranging with the classification society for the vessel's hull or machinery to be on a continuous survey cycle, in which every part of the vessel would be surveyed within a five year cycle. At an owner's application, the surveys required for class renewal may be split according to an agreed schedule to extend over the entire period of class. This process is referred to as continuous class renewal.

All areas subject to survey as defined by the classification society are required to be surveyed at least once per class period, unless shorter intervals between surveys are prescribed elsewhere. The period between two subsequent surveys of each area must not exceed five years.

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 defects are found, the classification surveyor will issue a "recommendation" which must be rectified by the shipowner 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 a member of the International Association of Classification Societies. The International Association of Classification Societies adopted harmonized Common Rules that align with the IMO goal standards, in 2013.All our vessels are certified as being "in class" by Lloyd's Register of Shipping. All new and secondhand vessels that we purchase must be certified prior to their delivery under our standard purchase contracts and memorandum of agreement. If the vessel is not certified on the date of closing, we have no obligation to take delivery of the vessel.

Risk of Loss and Insurance Coverage

General

The operation of any vessel includes risks such as mechanical failure, collision, property loss, cargo loss or damage and business interruption due to political circumstances in foreign countries, piracy, hostilities and labor strikes. In addition, there is always an inherent possibility of marine disaster, including oil spills and other environmental mishaps, and the liabilities arising from owning and operating vessels in international trade. OPA, which imposes virtually unlimited liability upon owners, operators and demise charterers of vessels trading in the U.S. exclusive economic zone for certain oil pollution accidents in the United States, has made liability insurance more expensive for shipowners and operators trading in the U.S. market.

While we maintain hull and machinery insurance, war risks insurance, protection and indemnity cover, increased value insurance and freight, demurrage and defense cover for each of our vessels in amounts that we believe to be prudent to cover normal risks in our operations, we may not be able to achieve or maintain this level of coverage throughout a vessel's useful life. Furthermore, while we have procured what we consider to be adequate insurance coverage, not all risks can be insured against, specific claims may not be paid, and we may not be able to obtain adequate insurance coverage at reasonable rates.

Hull & Machinery Insurance

We maintain for all of our vessels marine hull and machinery insurance that covers the risk of actual or constructive total loss up to at least the fair market value of the vessels with deductibles that vary according to the size and value of each vessel. We also maintain increased value coverage for each of our vessels. Under this increased value coverage, in the event of total loss of a vessel, we would be entitled to recover amounts not recoverable under our hull and machinery policy due to any difference that might have arisen between the insured value of the vessel and the market value of the vessel.

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War Risks Insurance

Hull and machinery insurance does not cover the aforementioned risks of a vessel sailing into a war zone or piracy area. Those areas are established by the London-based Joint War Committee and we maintain such cover for all our vessels.

Protection and Indemnity Insurance

Protection and indemnity insurance is a form of mutual indemnity insurance, extended by protection and indemnity mutual associations, or "clubs", which insure our third party liabilities in connection with our shipping activities. This includes third-party liability and other related expenses resulting from the injury or death of crew and other third parties, the loss or damage to cargo, claims arising from collisions with other vessels, damage to other third-party property, pollution arising from oil or other substances and salvage, towing and other related costs, including wreck removal.

We have procured protection and indemnity insurance coverage for pollution in the amount of $1.0 billion per vessel per incident. The 13 principal underwriting member P&I Associations that comprise the International Group of P&I Clubs insure approximately 90% of the world's commercial tonnage and have entered into a pooling agreement to reinsure each association's liabilities. As a member of a P&I Association, which is a member of the International Group of P&I Clubs, we are subject to calls payable to the associations based on the group's claim records as well as the claim records of all other members of the individual associations and members of the pool of P&I Associations comprising the International Group of P&I Clubs.

FDD (Freight / Demurrage / Defense) Cover

The cover entitles the vessel owners to seek legal advice and assistance from the Club and reimbursement of costs incurred in connection with disputes or proceedings which are pursued by or against the vessel owners and which arise out of events which occur during the period of the insurance.

C.Organizational structure

Paragon Shipping Inc. is the sole owner of all of the issued and outstanding shares of the subsidiaries listed on Exhibit 8.1 to this annual report.

D.Property, plants and equipment

We do not own any material real property. We lease office space in Athens, Greece from Granitis Glyfada Real Estate Ltd, a company beneficially owned by our Chairman, President, Chief Executive Officer and Interim Chief Financial Officer. See "Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Lease of Office Space." In addition, for the vessels owned and for mortgages thereon, refer to "Our Fleet" discussed above, and "Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Long-Term Debt."

Item 4A.Unresolved Staff Comments

Not applicable.

Item 5.Operating and Financial Review and Prospects

The following discussion of our financial condition and results of operations should be read in conjunction with our historical consolidated financial statements and their notes included elsewhere in this annual report. The financial statements have been prepared in accordance with U.S. GAAP and are presented in U.S. Dollars unless otherwise indicated.

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This discussion includes forward-looking statements which, although based on assumptions that we consider reasonable, are subject to risks and uncertainties, which could cause actual events or conditions to differ materially from those currently anticipated and expressed or implied by such forward-looking statements. For a discussion of some of those risks and uncertainties, please see the section entitled "Forward-Looking Statements" at the beginning of this annual report and "Item 3. Key Information—D. Risk Factors."

A.Operating results

Overview

We are a global provider of shipping transportation services. We specialize in transporting drybulk cargoes, including such commodities as iron ore, coal, grain and other materials, along worldwide shipping routes.

As of the date of this annual report, our operating fleet consisted of eight Panamax drybulk carriers, two Ultramax drybulk carriers, two Supramax drybulk carriers and four Handysize drybulk carriers with an aggregate capacity of 980,380 dwt and an average age of 7.6 years.

Prior to April 2011, we owned and operated three containerships. In the second quarter of 2011, we sold these containerships to Box Ships, then our wholly-owned subsidiary. Box Ships completed its initial public offering in April, 2011, and we continue to own 3,437,500 shares of Box Ships, which, as of the date of this annual report, represented approximately 11.0% of Box Ships' outstanding common shares.

In addition, as of the date of this annual report, our newbuilding program consisted of our current newbuilding program consists of two Ultramax drybulk carriers and three Kamsarmax drybulk carriers that are scheduled to be delivered in 2015.

Allseas and Seacommercial are responsible for the commercial and technical management functions for our fleet, pursuant to long-term management agreements between Allseas, Seacommercial and each of our vessel-owning subsidiaries. Allseas and Seacommercial also provide commercial and technical management services for Box Ships' fleet. Allseas and Seacommercial are controlled by Mr. Bodouroglou.

We primarily employ our vessels in the spot charter market, on short-term time charters or on voyage charters, ranging from 10 days to three months. However, depending on the time charter market, we may decide from time to time to employ our vessels on medium to long-term time charters. All of our vessels are currently employed on fixed rate time charters or voyage charters with expirations ranging from April 2015 to April 2016.

Factors Affecting our Results of Operations

Our revenues consist of earnings under the charters on which we employ our vessels. We believe that the important measures for analyzing trends in the results of our operations consist of the following:

· Calendar days. We define calendar days as the total number of days in a period during which each vessel in our fleet was owned. Calendar days are an indicator of the size of the fleet over a period and affect both the amount of revenues and the amount of expenses that are recorded during that period.

· Available days. We define available days as the number of calendar days in a period less any off-hire days associated with scheduled dry-dockings or special or intermediate surveys. The shipping industry uses available days to measure the number of days in a period during which vessels should be capable of generating revenues.

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· Operating days. We define operating days as the total available days in a period less any off-hire days due to any reason, other than scheduled dry-dockings or special or intermediate surveys, including unforeseen circumstances. Any idle days relating to the days a vessel remains unemployed are included in operating days. The shipping industry uses operating days to measure the number of days in a period during which 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 days during that period. The shipping industry uses fleet utilization to measure a company's efficiency in finding suitable employment for its vessels and minimizing the amount of days that its vessels are off-hire for reasons other than scheduled repairs, vessel upgrades, vessel positioning, dry-dockings or special or intermediate surveys.

· Charter contracts. A period time charter and a trip time charter are generally contracts to charter a vessel for a specific period of time at a set daily rate. Under period time charters and trip time charters, the charterer pays substantially all of the voyage expenses, including port and canal charges, and bunkers (fuel) expenses, but the vessel owner pays the vessel operating expenses and commissions on gross time charter revenues. A spot market voyage charter is generally a contract to carry a specific cargo from a load port to a discharge port for an agreed upon total amount. In the case of a spot market voyage charter, the vessel owner pays voyage expenses (less specified amounts, if any, covered by the voyage charterer), commissions on gross revenues and vessel operating expenses. Whether our vessels are employed on time charters or on voyage charters, we pay for vessel operating expenses, which include crew costs, provisions, deck and engine stores, lubricating oil, insurance, maintenance and repairs. We are also responsible for each vessel's intermediate and special survey costs. Time charter rates are usually fixed during the term of the charter. Prevailing time charter rates fluctuate on a seasonal and year to year basis and may be substantially higher or lower from a prior time charter contract when the subject vessel is seeking to renew that prior charter or enter into a new charter with another charterer. Fluctuations in charter rates are caused by imbalances in the availability of cargoes for shipment and the number of vessels available at any given time to transport these cargoes. Fluctuations in time charter rates are influenced by changes in spot market rates.

Charter Revenues

Charter revenues are driven primarily by the number of vessels in our fleet, the number of operating days during which our vessels generate revenues and the amount of daily charter hire that our vessels earn under charters. These, in turn, are affected by a number of factors, including our decisions relating to vessel acquisitions and disposals, the amount of time that we spend positioning our vessels, the amount of time that our vessels spend in dry-dock undergoing repairs, maintenance and upgrade work, the age, condition and specifications of our vessels, levels of supply and demand in the shipping market and other factors affecting the charter rates for our vessels.

Vessels operating on period time charters provide more predictable cash flows, but can yield lower profit margins than vessels operating in the spot charter market during periods characterized by favorable market conditions. Vessels operating in the spot charter market generate revenues that are less predictable but may enable us to capture increased profit margins during periods of improvements in charter rates although we are exposed to the risk of declining charter rates, which may have a materially adverse impact on our financial performance. Future spot market rates may be higher or lower than the rates at which we have employed our vessels on period time charters.

Voyage Expenses

Our voyage expenses exclude commissions and consist of all costs that are unique to a particular voyage, primarily including port expenses, canal dues, war risk insurances, fuel costs and losses from the sale of bunkers to charterers and bunkers consumed during off-hire periods and while traveling to and from dry-docking.

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Vessel Operating Expenses

Our vessel operating expenses include crew wages and related costs, the cost of insurance, expenses relating to repairs and maintenance, the costs of spares and consumable stores, tonnage taxes and other miscellaneous expenses. We anticipate that our vessel operating expenses, which generally represent fixed costs, will fluctuate based primarily upon the size of our fleet. Other factors beyond our control, some of which may affect the shipping industry in general, including, for instance, developments relating to market prices for insurance and difficulty in obtaining crew, may also cause these expenses to increase.

Dry-docking Expenses

Dry-docking costs relate to the regularly scheduled intermediate survey or special survey dry-docking necessary to preserve the quality of our vessels as well as to comply with the regulations, the environmental laws and the international shipping standards. Dry-docking costs can vary according to the age of the vessel, the location where the dry-dock takes place, the shipyard availability, the local availability of manpower and material and the billing currency of the yard. We expense dry-docking costs as incurred.

Management Fees – Related Party

Management fees represent fees paid to Allseas in accordance with our management agreements and accounting agreement, which are discussed in "Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Agreements with Our Managers—Management Agreements" and "Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Agreements with Our Managers—Accounting Agreement."

Furthermore, in order to incentivize Allseas' continued services to us, on November 10, 2009, we entered into a tripartite agreement with Allseas and Loretto, a wholly-owned subsidiary of Allseas, pursuant to which in the event of a capital increase, an equity offering or the issuance of common shares to a third party or third parties in the future, other than the common shares issued pursuant to our equity incentive plan, we have agreed to issue, at no cost to Loretto, additional common shares in an amount equal to 2% of the total number of common shares issued pursuant to such capital increase, equity offering or third party issuance, as applicable. As of the date of this annual report, we have issued a total of 469,958 of our common shares to Loretto pursuant to this agreement. The fair value of the shares issued to Loretto is deemed share-based compensation for management services and is charged to earnings and recognized in paid-in-capital on the date we become liable to issue the shares. See "Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Agreement with Loretto."

Depreciation

We depreciate our vessels on a straight-line basis over their estimated useful lives. The estimated useful life of our vessels is determined to be 25 years from the date of their initial delivery from the shipyard. Depreciation is based on cost less an estimated residual value. Refer to "Critical Accounting Policies—Vessel Depreciation" discussed below.

General and Administrative Expenses

General and administrative expenses include fees payable under our administrative and executive services agreements with Allseas, which are discussed in "Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Agreements with Our Managers—Administrative Services Agreement" and "Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Agreements with Our Managers—Executive Services Agreement". In addition, general and administrative expenses include directors' fees, office rent, traveling expenses, communications, directors and officers insurance, legal, auditing, investor relations and other professional expenses and reflect the costs associated with running a public company.

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Furthermore, our general and administrative expenses include share-based compensation. For more information on the non-vested share awards issued as incentive compensation under our Equity Incentive Plan, please see "Item 6. Directors, Senior Management and Employees—E. Share Ownership—Equity Incentive Plan".

Interest and Finance Costs

We have incurred interest expense and financing costs in connection with vessel-specific debt relating to the acquisition of our vessels. We also expect to incur financing costs and interest expenses under our current and future credit facilities in connection with debt incurred to finance future acquisitions, as market conditions warrant.

Inflation

We expect that inflation will have only a moderate effect on our expenses under current economic conditions. In the event that significant global inflationary pressures appear, these pressures would increase, among other things, our operating, general and administrative, and financing costs. However, we expect our costs to increase based on the anticipated increased costs for crewing and lube oil.

Lack of Historical Operating Data for Vessels Before Their Acquisition

Consistent with shipping industry practice, other than inspection of the physical condition of the vessels and examinations of classification society records, neither we nor our affiliated entities conduct any historical financial due diligence process when we acquire vessels. Accordingly, neither we nor our affiliated entities have obtained the historical operating data for the vessels from the sellers because that information is not material to our decision to make acquisitions, nor do we believe it would be helpful to potential investors in assessing our business or profitability. Most vessels are sold under a standardized agreement, which, among other things, provides the buyer with the right to inspect the vessel and the vessel's classification society records. The standard agreement does not give the buyer the right to inspect, or receive copies of, the historical operating data of the vessel. Prior to the delivery of a purchased vessel, the seller typically removes from the vessel all records, including past financial records and accounts related to the vessel. In addition, the technical management agreement between the seller's technical manager and the seller is automatically terminated and the vessel's trading certificates are revoked by its flag state following a change in ownership.

Consistent with shipping industry practice, we treat the acquisition of vessels, (whether acquired with or without charter) from unaffiliated parties as the acquisition of an asset rather than a business. We intend to acquire vessels free of charter, although we have acquired certain vessels in the past which had time charters attached, and we may, in the future, acquire additional vessels with time charters attached. Where a vessel has been under a voyage charter, the vessel is delivered to the buyer free of charter, and it is rare in the shipping industry for the last charterer of the vessel in the hands of the seller to continue as the first charterer of the vessel in the hands of the buyer. In most cases, when a vessel is under time charter and the buyer wishes to assume that charter, the vessel cannot be acquired without the charterer's consent and the buyer entering into a separate direct agreement with the charterer to assume the charter. The purchase of a vessel itself does not generally transfer the charter, because it is a separate service agreement between the vessel owner and the charterer.

When we purchase a vessel and assume or renegotiate a related time charter, we must take the following steps before the vessel will be ready to commence operations:

· obtain the charterer's consent to us as the new owner;

· obtain the charterer's consent to a new technical manager;

· obtain the charterer's consent to a new flag for the vessel;

· arrange for a new crew for the vessel;

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· replace all hired equipment on board, such as gas cylinders and communication equipment;

· negotiate and enter into new insurance contracts for the vessel through our own insurance brokers;

· register the vessel under a flag state and perform the related inspections in order to obtain new trading certificates from the flag state;

· implement a new planned maintenance program for the vessel; and

· ensure that the new technical manager obtains new certificates for compliance with the safety and vessel security regulations of the flag state.

The below discussion is intended to help you understand how acquisitions of vessels affect our business and results of operations. Our business is comprised of the following main elements:

· employment and operation of our vessels; and

· management of the financial, general and administrative elements involved in the conduct of our business and ownership of our vessels.

The employment and operation of our vessels requires 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 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 the following main components:

· management of our financial resources, including banking relationships, such as the 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.

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The principal factors that affect our profitability, cash flows and shareholders' return on investment include:

· rates and periods of charter hire;

· levels of vessel operating expenses;

· depreciation expenses;

· financing costs; and

· fluctuations in foreign exchange rates.

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

In "—Critical Accounting Policies—Impairment of Long-lived Assets," we discuss our policy for impairing the carrying values of our vessels. Historically, the market values of vessels have experienced particular volatility, with substantial declines in many vessel classes. As a result, the charter-free market value, or basic market value, of certain of our vessels may have declined below those vessels' carrying value, even though we would not impair those vessels' carrying value under our accounting impairment policy, due to our belief that future undiscounted cash flows expected to be earned by such vessels over their operating lives would exceed such vessels' carrying amounts.

The table set forth below indicates (i) the carrying value of each of our vessels as of December 31, 2013 and 2014 (ii) which of our vessels we believe has a basic market value below its carrying value, and (iii) the aggregate difference between carrying value and market value represented by such vessels. This aggregate difference represents the approximate analysis of the amount by which we believe we would have to reduce our net income if we sold all of such vessels in the current environment, on industry standard terms, in cash transactions, and to a willing buyer where we are not under any compulsion to sell, and where the buyer is not under any compulsion to buy. For the purposes of this calculation, we have assumed that the vessels would be sold at a price that reflects our estimate of their current basic market values, as of December 31, 2013 and 2014, respectively. However, we are not holding our vessels for sale.

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

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

· news and industry reports of similar vessel sales;

· news and industry reports of sales of vessels that are not similar to our vessels where we have made certain adjustments in an attempt to derive information that can be used as part of our estimates;

· approximate market values for our vessels or similar vessels that we have received from shipbrokers, whether solicited or unsolicited, or that shipbrokers have generally disseminated;

· offers that we may have received from potential purchasers of our vessels; and

· vessel sale prices and values of which we are aware through both formal and informal communications with shipowners, shipbrokers, industry analysts and various other shipping industry participants and observers.

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As we obtain information from various industry and other sources, our estimates of basic market value are inherently uncertain. In addition, vessel values are highly volatile; as such, our estimates may not be indicative of the current or future basic market value of our vessels or prices that we could achieve if we were to sell them.

	Dwt	Year Built	Carrying Value as of December 31, 2013	Carrying Value as of December 31, 2014
Vessel and Type
Panamax
Dream Seas (1), (2)	75,151	2009	$35.8 million	$34.2 million
Coral Seas (1), (2)	74,477	2006	$22.1 million	$21.0 million
Golden Seas (1), (2)	74,475	2006	$22.1 million	$21.1 million
Pearl Seas (1), (2)	74,483	2006	$22.1 million	$21.0 million
Diamond Seas (1), (2)	74,274	2001	$18.5 million	$17.3 million
Deep Seas (1), (2)	72,891	1999	$24.2 million	$22.1 million
Calm Seas (1), (2)	74,047	1999	$25.2 million	$23.0 million
Kind Seas (1), (2)	72,493	1999	$25.9 million	$23.8 million
Ultramax
Gentle Seas (3)	63,350	2014	-	$27.3 million
Peaceful Seas (3)	63,331	2014	-	$27.5 million
Supramax
Friendly Seas (1), (2)	58,779	2008	$24.3 million	$23.2 million
Sapphire Seas (1), (2)	53,702	2005	$18.7 million	$17.8 million
Handysize
Prosperous Seas (1), (2)	37,293	2012	$21.5 million	$20.7 million
Precious Seas (1), (2)	37,205	2012	$21.9 million	$21.1 million
Priceless Seas (1), (2)	37,202	2013	$23.8 million	$22.9 million
Proud Seas (2), (3)	37,227	2014	-	$25.0 million
Total	980,380		$306.1 million	$369.0 million

_______________________________

(1)Indicates vessels for which we believe, as of December 31, 2013, the basic charter-free market value was lower than the vessel's carrying value. We believe that the aggregate carrying value of these vessels exceeds their aggregate basic charter-free market value as of December 31, 2013 by approximately $64.1 million. For the year ended December 31, 2013, no impairment was recorded on these vessels under our accounting impairment policy.

(2)Indicates vessels for which we believe, as of December 31, 2014, the basic charter-free market value was lower than the vessel's carrying value. We believe that the aggregate carrying value of these vessels exceeds their aggregate basic charter-free market value as of December 31, 2014, by approximately $93.3 million. For the year ended December 31, 2014, no impairment was recorded on these vessels under our accounting impairment policy.

 (3)M/V Proud Seas was delivered to us on January 7, 2014, while M/V Gentle Seas and M/V Peaceful Seas were delivered to us in October 2014.

All of our vessels are currently employed under fixed rate time charters or voyage charters with expirations ranging from April 2015 to April 2016. If we sell those vessels with the charters attached, the sale price may be affected by the relationship of the charter rate to the prevailing market rate for a comparable charter with the same terms.

We refer you to "Item 3. Key Information—D. Risk Factors—The market value of our vessels has declined and may further decline, which could limit the amount of funds that we can borrow and has triggered and could in the future trigger breaches of certain financial and security coverage ratio covenants contained in our current and future credit facilities and we may incur a loss if we sell vessels following a decline in their market value." In addition we refer you to the discussion in "Item 4. Information on the Company—B. Business overview—Vessel Prices."

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Critical Accounting Policies and Estimates

The discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of those financial statements requires us to make estimates and judgments in the application of our accounting policies that affect the reported amount of assets and liabilities, revenues and expenses and related disclosure of contingent assets and liabilities at the date of our financial statements. Actual results 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 under different assumptions and conditions. We have described below what we believe are our most critical accounting policies that involve a high degree of judgment and the methods of their application. For a description of all of our significant accounting policies, see Note 2 to our consolidated financial statements included elsewhere herein.

Vessel Depreciation:We record the value of our vessels at their cost (which includes acquisition costs directly attributable to the vessel and delivery expenditures, including pre-delivery expenses and expenditures made to prepare the vessel for its initial voyage) less accumulated depreciation. We depreciate our vessels on a straight-line basis over their estimated useful lives, after considering the estimated salvage value. We estimate the useful life of our vessels to be 25 years from the date of initial delivery from the shipyard (secondhand vessels are depreciated from the date of their acquisition through their remaining estimated useful life). An increase in the useful life of a vessel or in its residual value would have the effect of decreasing the annual depreciation and extending it into later periods. A decrease in the useful life of a drybulk vessel or in its residual value would have the effect of increasing the annual depreciation and extending it into later periods.

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 the vessel is subjected to, or poor quality of the shipbuilding or yard. When regulations place limitations over the ability of a vessel to trade on a worldwide basis, its remaining useful life is adjusted to end at the date such regulations preclude such vessel's further commercial use. Weak freight market rates result in owners scrapping more vessels, and scrapping them earlier in their lives due to the unattractive returns. An increase in the useful life of the vessel may occur as a result of superior vessel maintenance performed, favorable ocean going and weather conditions the vessel is subjected to, superior quality of the shipbuilding or yard, or high freight market rates, which result in owners scrapping the vessels later due to the attractive cash flows.

Each vessel's salvage value is equal to the product of its lightweight tonnage and estimated scrap rate, which, up until September 30, 2012, was estimated to be $150 per lightweight ton. In order to adjust the scrap rate estimates to be aligned with the current historical average scrap rate, effective from October 1, 2012, the Company adjusted the estimated scrap rate used to calculate the vessels' salvage value from $150 to $300 per lightweight ton. The increase in the estimated scrap rate will decrease the total vessel depreciation expense we would record, proportionally, for the remainder of the useful life of each vessel.

The estimated residual value of the vessels may not represent the fair market value at any one time since market prices of scrap values tend to fluctuate.

Impairment of Long-Lived Assets:We review our long-lived assets held and used for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. When the estimate of undiscounted cash flows, excluding interest charges, expected to be generated by the use of the asset is less than its carrying amount, we are required to evaluate the asset for an impairment loss. Measurement of the impairment loss is based on the fair value of the asset.

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The carrying values of our vessels may not represent their fair market value at any point in time since the market prices of secondhand vessels tend to fluctuate with changes in charter rates and the cost of newbuildings. Historically, both charter rates and vessel values tend to be cyclical. Declines in the fair value of vessels, prevailing market charter rates, vessel sale and purchase considerations, and regulatory changes in shipping industry, changes in business plans or changes in overall market conditions that may adversely affect cash flows are considered as potential impairment indicators. Based on our estimates of basic market value as described in "Item 5. Operating and Financial Review and Prospects—A. Operating results—Our Fleet—Comparison of Possible Excess of Carrying Value Over Estimated Charter-Free Market Value of our Vessels", in the event the independent market value of a vessel is lower than its carrying value, we determine undiscounted projected net operating cash flow for such vessel and compare it to the vessels carrying value.

The undiscounted projected net operating cash flows for each vessel are determined by considering the contracted charter revenues from existing time charters for the fixed vessel days and an estimated daily time charter equivalent for the unfixed days (based on the most recent ten year historical average of similar size vessels) over the remaining estimated life of the vessel, assumed to be 25 years from the date of initial delivery from the shipyard, net of brokerage commissions, the salvage value of each vessel, which is estimated to be $300 per lightweight ton, expected outflows for vessels' future dry-docking expenses and estimated vessel operating expenses, assuming an average annual inflation rate where applicable. We use the historical ten-year average as it is considered a reasonable estimation of expected future time charter rates over the remaining useful life of our vessels since we believe it represents a full shipping cycle and captures the highs and lows of the market. We utilize the standard deviation in order to eliminate the outliers of our sample before computing the historic ten-year average of the one-year time charter rate.

As of December 31, 2014, the estimated future daily time charter rates calculated using the standard deviation of the ten-year historical average of the one-year time charter rates, which were $18,093, $16,134, and $12,061 for Panamax, Supramax and Handysize drybulk carriers, respectively, were approximately 20.4% to 26.2% lower than the estimated future daily time charter rates calculated using the ten-year simple average of the one-year time charter rates, which were $24,518, $21,655, and $15,152 for Panamax, Supramax and Handysize drybulk carriers, respectively. There was no impairment indication identified for our two Ultramax drybulk carriers as of December 31, 2014. These assumptions are based on historical trends as well as future expectations. Although management believes that the assumptions used to evaluate potential impairment are reasonable and appropriate, such assumptions are highly subjective.

As of December 31, 2013, the testing indicated no impairment on any of our vessels. Our analysis for the year ended December 31, 2014, which also involved sensitivity tests on the future time charter rates (which is the input that is most sensitive to variations), allowing for decreases on time charter rates from our base scenario of up to approximately 13.8%, 26.3% and 21.1% for our Panamax, Supramax and Handysize drybulk carriers, respectively, indicated no impairment on any of our vessels. Based on this sensitivity testing, our vessels would be at risk of impairment if the estimation of the future daily time charter rates, calculated using the standard deviation of the ten-year historical average of the one-year time charter rates, declined below approximately $15,605, $11,899 and $9,514 for Panamax, Supramax and Handysize drybulk carriers, respectively.

Recent Accounting Pronouncements

Regarding recent accounting pronouncements the adoption of which would have an effect on our consolidated financial statements in the current period or future periods, refer to Note 2 to our consolidated financial statements included at the end of this annual report.

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Fleet Data and Average Daily Results

	2012			2013			2014
FLEET DATA
Calendar days for the fleet		4,099			4,717			5,241
Available days for the fleet		4,099			4,652			5,180
Operating days for the fleet		4,063			4,622			5,134
Average number of vessels(1)		11.2			12.9			14.4
Number of vessels at end of period		12			13			16
Average age of fleet as of year end		7			8			7
Fleet utilization(2)		99.1	%		99.4	%		99.1	%
AVERAGE DAILY RESULTS
Vessel operating expenses(3)	$	4,588		$	4,401		$	4,325
Dry-docking expenses(4)		-			360			418
Management fees - related party(5)		999			1,245			1,196
General and administrative expenses(6)		1,928			2,282			1,661

_________________________

(1) Average number of vessels is the number of vessels that constituted our fleet for the relevant period, as measured by the sum of the number of calendar days each vessel was a part of our fleet during the period divided by the number of days in the period.

(2) Fleet utilization is the percentage of time that our vessels were available for generating revenue and is determined by dividing operating days by available days of our fleet for the relevant period.

(3) Daily vessel operating expenses, which include crew costs, provisions, deck and engine stores, lubricating oil, insurance, maintenance and repairs, is calculated by dividing vessel operating expenses by fleet calendar days for the relevant time period.

(4) Daily dry-docking expenses are calculated by dividing dry-docking expenses by fleet calendar days for the relevant time period.

(5) Daily management fees - related party are calculated by dividing management fees - related party by fleet calendar days for the relevant time period.

(6) Daily general and administrative expenses are calculated by dividing general and administrative expenses by fleet calendar days for the relevant time period.

YEAR ENDED DECEMBER 31, 2014 COMPARED TO YEAR ENDED DECEMBER 31, 2013

The average number of vessels in our fleet was 14.4 for the year ended December 31, 2014, compared to 12.9 in the year ended December 31, 2013. The following analysis exhibits the primary driver of differences between these periods.

· Charter revenue—Charter revenue for the year ended December 31, 2014, was $58.1 million, compared to $59.5 million for the year ended December 31, 2013. The increase in the average number of vessels in our fleet and the corresponding increase in the number of operating days of our fleet from 4,622, for the year ended December 31, 2013, to 5,134, for the year ended December 31, 2014, were offset by the decrease in the charter rates earned by the vessels year over year as a result of the lower contracted rates due to the continued weakness in the drybulk market. After deducting commissions of $3.4 million, we had net revenue of $54.8 million in 2014, compared to $56.3 million net revenue, after deducting commissions of $3.3 million, in 2013.

· Voyage expenses, net—In 2014, our voyage expenses amounted to $14.7 million, compared to $6.7 million in 2013. The increase in our voyage expenses are due to the increased number of voyage and short-term time charters and mainly reflects an increase of $6.6 million in the bunkers consumed during voyage charters, off-hire periods, vessel positioning and traveling to and from dry-docking, net of gains or losses from the sale of bunkers to charterers. It also reflects an increase of $1.3 million in port charges and other related expenses for our vessels that were employed on voyage charters during the year ended December 31, 2014 and 2013, and an increase of $0.2 million in extra war risks insurances.

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· Vessel operating expenses—Vessel operating expenses amounted to $22.7 million, or $4,325 per vessel per day, for the year ended December 31, 2014, compared to $20.8 million, or $4,401 per vessel per day, for the year ended December 31, 2013. The increase in our operating expenses reflects mainly the increase in the average number of vessels in our fleet for 2014, compared to 2013. The decrease in the daily vessel operating expenses is due to our increasing economies of scale as we increase our fleet size.

· Dry-docking expenses—We incurred an aggregate of $2.2 million in dry-docking expenses for the year ended December 31, 2014, compared to $1.7 million for the year ended December 31, 2013. One Panamax and two Supramax vessels were dry-docked during 2013, while three of our Panamax vessels underwent dry-docking during 2014, resulting in higher dry-docking costs.

· Management fees - related party—We incurred an aggregate of $6.3 million, or $1,196 per vessel per day in management fees for the year ended December 31, 2014, compared to an aggregate of $5.9 million, or $1,245 per vessel per day in management fees for the year ended December 31, 2013. The increase in management fees mainly reflects the increase in the average number of vessels in our fleet year over year and the corresponding increase in the number of calendar days of our fleet.

· Depreciation—Depreciation of vessels for the year ended December 31, 2014 amounted to $18.4 million, compared to $17.0 million for the year ended December 31, 2013, reflecting the increased fleet size in 2014, compared to 2013.

· General and administrative expenses—General and administrative expenses for 2014 were $8.7 million, compared to $10.8 million for 2013. The $2.1 million decrease in general and administrative expenses relates mainly to the incentive compensation of $2.0 million that was awarded for the completion of our debt restructuring in 2013, and a $0.3 million decrease in other general and administrative expenses, partially offset by a $0.2 million increase in share based compensation due to the higher amortization effect of the granted share awards.

· Impairment loss—Impairment loss for the year ended December 31, 2014 of $15.7 million relates to the write down to fair value of the contract price of the 4,800 TEU containership newbuilding (refer to Note 5 to our consolidated financial statements included at the end of this annual report).

· Gain from sale of assets—The gain of $0.4 million for the year ended December 31, 2014 relates to the gain on the sale of the 4,800 TEU containership newbuilding that was concluded on May 23, 2014. No vessels were sold in 2013.

· Gain / loss from marketable securities, net—Loss from marketable securities, net, for the year ended December 31, 2014 of $25,529 relates to the sale of 21,346 shares of KLC at an average sale price of $23.52 per share that was concluded during 2014. Gain from marketable securities, net, for the year ended December 31, 2013 of $1.2 million includes a gain of $3.1 million relating to the initial measurement of the 58,483 additional shares of KLC that were issued to us on May 9, 2013, pursuant to the amended KLC rehabilitation plan that was approved by the Seoul Central District Court in March 2013, partially offset by an aggregate loss of $1.9 recognized in the third and fourth quarters of 2013 relating to the change in fair value of the total 65,896 KLC shares, which was considered as other than temporary.

· Other income / loss—Other loss for the year ended December 31, 2014 of $0.2 million relates mainly to a special contribution, which was paid in October 2014. According to the Greek Law 4301/2014, the charge is a voluntary contribution calculated based on the carrying capacity of our fleet, and is payable annually for four fiscal years, until 2017. Other income for the year ended December 31, 2013 of $0.6 million relates mainly to a cash compensation of $0.4 million received from KLC representing the present value of the total outstanding cash payments we were entitled to receive in connection with the amended KLC rehabilitation plan that was approved by the Seoul Central District Court in March 2013, and to claim recoveries of $0.2 million relating to a dispute regarding one of our vessels.

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· Interest and finance costs—Interest and finance costs for 2014 were $9.3 million, compared to $7.4 million for the previous year. The increase in the interest and finance costs was mainly due to the cancellation of the China Development Bank ("CDB") loan facility dated May 17, 2013, as well as the refinancing of the loan agreements with Bank of Scotland (dated December 4, 2007) and Nordea (dated May 5, 2011), and the resulting write off of the unamortized financing costs of $1.5 million relating to the respective facilities (refer to Notes 5 and 9 to our consolidated financial statements included at the end of this annual report). It is also due to the incurred interest expenses relating to our Senior Notes due 2021 that were issued in August 2014 and bear interest at a rate of 8.375% per year.

· Loss on derivatives, net—Loss on derivatives, net, for the year ended December 31, 2014 of $0.4 million consists of an unrealized gain of $0.5 million, representing a gain to record the change in fair value of our interest rate swaps for 2014, and realized expenses of $0.9 million incurred from interest rate swap settlements paid during the year. Loss on derivatives, net, for the year ended December 31, 2013 of $0.1 million consists of an unrealized gain of $0.8 million, representing a gain to record the change in fair value of our interest rate swaps for 2013, and realized expenses of $0.9 million incurred from interest rate swap settlements paid during the year.

· Interest income—Interest income for the year ended December 31, 2014 was $20,940, compared to $0.5 million in 2013, mainly reflecting the decrease in interest charged to Box Ships relating to the unsecured loan granted on May 27, 2011, which was fully repaid by Box Ships on October 18, 2013.

· Equity in net income of affiliate—Equity in net income of affiliate for the year ended December 31, 2014 was $0.5 million, compared to $1.7 million for the previous year. The decrease in equity in net income of affiliate is mainly associated with the decrease in earnings available to common shareholders of Box Ships for 2014, as compared to 2013.

· Loss on investment in affiliate—Loss on investment in affiliate of $8.8 million for the year ended December 31, 2014 consists of $0.2 million, relating to the dilution effect from the Company's non-participation in the public offering of 5,500,000 common shares of Box Ships, which was completed on April 15, 2014, as well as the aggregate impairment in investment in affiliate of $8.6 million, relating to the difference between the fair value and the book value of our investment in Box Ships as of March 31, 2014, June 30, 2014 and December 31, 2014, which was considered as other than temporary. Loss on investment in affiliate of $8.6 million for the year ended December 31, 2013 consists of $0.4 million, relating to the dilution effect from the Company's non-participation in the public offering of 4,000,000 common shares of Box Ships, which was completed on March 18, 2013, as well as an aggregate impairment loss of $8.2 million recorded in September 2013 and December 2013, relating to the difference between the fair value and the book value of our investment in Box Ships, which was considered as other than temporary.

· Net loss—As a result of the above factors, net loss in 2014 was $51.8 million, compared to $17.0 million for 2013.

YEAR ENDED DECEMBER 31, 2013 COMPARED TO YEAR ENDED DECEMBER 31, 2012

The average number of vessels in our fleet was 12.9 for the year ended December 31, 2013, compared to 11.2 in the year ended December 31, 2012. The following analysis exhibits the primary driver of differences between these periods.

· Charter revenue—Charter revenue for the year ended December 31, 2013, was $59.5 million, compared to $53.2 million for the year ended December 31, 2012. The increase in charter revenue reflects principally the increase in the average number of vessels in our fleet and the corresponding increase in the number of operating days of our fleet from 4,063 for 2012, to 4,622 for 2013, partially offset by the decrease in the charter rates earned by the vessels period over period, as a result of the lower contracted rates. After deducting commissions of $3.3 million, we had net revenue of $56.3 million in 2013, compared to $50.3 million net revenue, after deducting commissions of $2.9 million, in 2012. The increase in commissions is mainly due to the increase in the charter revenue earned by the vessels.

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· Voyage expenses, net—In 2013, our voyage expenses amounted to $6.7 million, compared to $1.9 million in 2012. The increase in our voyage expenses mainly reflects an increase of $4.0 million in the bunkers consumed during off-hire periods, vessel positioning and traveling to and from dry-docking (there were three dry-dockings in 2013, while there were no dry-dockings in 2012), net of gains or losses from the sale of bunkers to charterers. It also reflects an increase of $0.8 million in port charges and other related expenses, since one of our vessels was employed in three voyage charters in 2013, while in 2012 all of our vessels were employed under time charters.

· Vessel operating expenses—Vessel operating expenses amounted to $20.8 million, or $4,401 per vessel per day, for the year ended December 31, 2013, compared to $18.8 million, or $4,588 per vessel per day, for the year ended December 31, 2012. The increase in our operating expenses reflects mainly the increase in the average number of vessels in our fleet for 2013, compared to 2012. The decrease in the daily vessel operating expenses is due to our increasing economies of scale as we increase our fleet size.

· Management fees - related party—We incurred an aggregate of $5.9 million, or $1,245 per vessel per day in management fees for the year ended December 31, 2013, compared to an aggregate of $4.1 million, or $999 per vessel per day in management fees for the year ended December 31, 2012. The increase in daily management fees reflects primarily the share based compensation of $1.1 million that was recorded in 2013, relating to awards of shares to Loretto pursuant to our agreement with Loretto and Allseas, dated November 10, 2009, as discussed in "Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Agreements with Our Managers—Agreement with Loretto." There were no such awards for the year ended December 31, 2012. It also reflects the increase in the average number of vessels in our fleet for 2013, compared to 2012, and the corresponding increase in the number of calendar days of our fleet.

· Depreciation—Depreciation of vessels for the year ended December 31, 2013 amounted to $17.0 million, compared to $16.4 million for the year ended December 31, 2012. The increase in the depreciation of vessels reflects primarily the increased fleet size in 2013, compared to 2012, partially offset by the increase in the estimated scrap rate used to calculate the vessels' salvage value from $150 to $300 per lightweight ton, effective from October 1, 2012, as discussed in "Item 5. Operating and Financial Review and Prospects–A. Operating Results–Critical Accounting Policies–Vessel Depreciation."

· General and administrative expenses—General and administrative expenses for 2013 were $10.8 million, which include share-based compensation of $0.8 million, compared to $7.9 million for 2012, which include share-based compensation of $2.5 million. The $2.9 million increase in general and administrative expenses relates mainly to the $4.2 million in incentive compensation to directors and officers in 2013, while no such compensation was awarded in 2012, and a $0.4 million increase in other general and administrative expenses, partially offset by a $1.7 million decrease in share based compensation due to the lower amortization effect of the granted share awards.

· Gain from vessel early redelivery—Gain from vessel early redelivery for the year ended December 31, 2013 of $2.3 million mainly represents the total cash compensation, net of commissions, received due to the early termination of the M/V Coral Seas and M/V Deep Seas time charter agreements with Morgan Stanley Capital Group Inc.

· Loss from contract cancellation—Following the cancellation of one of our two containership newbuilding contracts as discussed in Note 5 to our consolidated financial statements included at the end of this annual report, we recorded a loss from contract cancellation of $0.6 million relating to capitalized expenses for the respective vessel recorded since 2010.

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· Gain from marketable securities, net—Gain from marketable securities, net, for the year ended December 31, 2013 of $1.2 million includes a gain of $3.1 million relating to the initial measurement of the 58,483 additional shares of KLC that were issued to us on May 9, 2013, pursuant to the amended KLC rehabilitation plan that was approved by the Seoul Central District Court in March 2013, partially offset by an aggregate loss of $1.9 recognized in the third and fourth quarters of 2013 relating to the change in fair value of the total 65,896 KLC shares, which was considered as other than temporary.

· Other income—Other income for the year ended December 31, 2013 of $0.6 million relates mainly to a cash compensation of $0.4 million received from KLC representing the present value of the total outstanding cash payments we were entitled to receive in connection with the amended KLC rehabilitation plan that was approved by the Seoul Central District Court in March 2013, and to claim recoveries of $0.2 million relating to a dispute regarding one of our vessels.

· Interest and finance costs—Interest and finance costs for 2013 were $7.4 million, compared to $6.7 million for the previous year. The increase in the interest and finance costs was mainly due to the cancellation of one of our two 4,800 TEU containership newbuilding contracts as discussed in Note 5 to our consolidated financial statements included at the end of this annual report, and the resulting write off of the unamortized financing costs relating to the respective vessel, partially offset by the decrease in the average outstanding indebtedness.

· Loss on derivatives, net—Loss on derivatives, net, for the year ended December 31, 2013 of $0.1 million consists of an unrealized gain of $0.8 million, representing a gain to record the change in fair value of our interest rate swaps for 2013, and realized expenses of $0.9 million incurred from interest rate swap settlements paid during the year. Loss on derivatives in 2012 of $0.7 million consisted of an unrealized gain of $2.0 million, representing a gain to record the change in fair value of our interest rate swaps for 2012, and realized expenses of $2.7 million incurred from interest rate swap settlements paid during the year. The decrease in the realized expenses mainly reflects the decreased weighted average notional amount, as well as the decreased weighted average fixed rate, applicable during 2013 as compared to 2012.

· Interest income—Interest income for the year ended December 31, 2013 was $0.5 million, compared to $0.7 million in 2012, mainly reflecting the $0.2 million decrease in interest charged to Box Ships relating to the unsecured loan granted on May 27, 2011, which was fully repaid by Box Ships on October 18, 2013.

· Equity in net income of affiliate—Equity in net income of affiliate for the year ended December 31, 2013 was $1.7 million, compared to $2.0 million for the previous year. The decrease in equity in net income of affiliate is mainly associated with the decrease in earnings available to common shareholders of Box Ships for 2013 as compared to 2012.

· Loss on investment in affiliate—Loss on investment in affiliate of $8.6 million for the year ended December 31, 2013 consists of $0.4 million, relating to the dilution effect from the Company's non-participation in the public offering of 4,000,000 common shares of Box Ships, which was completed on March 18, 2013, as well as an aggregate impairment loss of $8.2 million recorded in September 2013 and December 2013, relating to the difference between the fair value and the book value of our investment in Box Ships, which was considered as other than temporary. For the year ended December 31, 2012, the loss on investment in affiliate of $17.0 million consisted of $2.9 million, relating to the dilution effect from the Company's non-participation in the public offering of 4,285,715 common shares of Box Ships, which was completed on July 18, 2012, as well as an impairment loss of $14.1 million recorded in September 2012, relating to the difference between the fair value and the book value of our investment in Box Ships as of September 30, 2012, which was considered as other than temporary.

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· Net income / loss—As a result of the above factors, net loss in 2013 was $17.0 million, compared to $17.6 million for 2012.

B. Liquidity and Capital Resources

Our principal sources of funds are our operating cash flows, borrowings under our 8.375% Senior Notes due 2021 and loan and credit facilities, as well as equity provided by our shareholders. Our principal uses of funds are capital expenditures to grow our fleet, maintenance costs to ensure the quality of our vessels, compliance with international shipping standards and environmental laws and regulations, the funding of working capital requirements, principal repayments on loan facilities, and, with the discretion of our Board of Directors and subject to the consent of our lenders, the payment of dividends to our shareholders. Beginning with the first quarter of 2011, our Board of Directors suspended the payment of our quarterly dividend in light of the continued decline of charter rates and the related decline in asset values in the drybulk market. This suspension allows us to retain cash and increase our liquidity. Until market conditions improve, it is unlikely that we will reinstate the payment of dividends. In addition, restrictions under our loan and credit facilities and other external factors limit our ability to pay dividends. See "Item 8. Financial Information—Dividend Policy."

On February 18, 2014, we completed a public offering of 6,785,000 of our common shares at $6.25 per share, including the full exercise of the over-allotment option granted to the underwriters to purchase up to 885,000 additional common shares. The net proceeds from the offering amounted to $39.7 million net of underwriting discounts and commissions and other offering expenses payable by us.

On August 8, 2014, we completed the public offering of 1,000,000 of our 8.375% Senior Notes due 2021 pursuant to an effective shelf registration statement. The Notes were issued in minimum denominations of $25.00 and integral multiples of $25.00 in excess thereof, and bear interest at a rate of 8.375% per year, payable quarterly on each February 15, May 15, August 15 and November 15, commencing on November 15, 2014. The Notes will mature on August 15, 2021, and may be redeemed in whole or in part at any time or from time to time after August 15, 2017. The net proceeds from the offering amounted to approximately $23.9 million, net of underwriting discounts and commissions of $812,500, and offering expenses payable by the Company of $330,917. The Notes trade on NASDAQ under the symbol "PRGNL".

As of December 31, 2013, our newbuilding program consisted of one Handysize drybulk carrier (Hull no. 625), two Ultramax drybulk carriers (Hull numbers DY152 and DY153) and one 4,800 TEU containership with expected deliveries in 2014, as well as two Ultramax drybulk carriers (Hull numbers DY4050 and DY4052) with expected deliveries in 2015.

On January 7, 2014, we took delivery of our fourth Handysize drybulk vessel, the M/V Proud Seas. In January 2014, an amount of $21.6 million was paid to the shipyard representing the final installment of the respective vessel, which was financed from the syndicated secured loan facility led by Nordea dated May 5, 2011, as described in the discussion under the heading "Long-Term Debt" below.

In March 2014, we entered into contracts with Yangzijiang for the construction of three Kamsarmax newbuilding drybulk carriers. The Kamsarmax newbuildings have a carrying capacity of 81,800 dwt each, with scheduled delivery between the second and fourth quarter of 2015. The acquisition cost of these three newbuildings is $30.6 million per vessel. In March 2014, we paid an amount of $9.2 million per vessel, and the balance of the contract price, or $21.4 million per vessel, will be payable upon the delivery of each vessel.

On April 25, 2014, we entered into a memorandum of agreement for the sale of our remaining 4,800 TEU containership newbuilding to an unrelated third party for $42.5 million, less 3% commission. In May 2014, we also agreed with the shipyard to reduce the contract price of the respective vessel by $0.8 million. The sale of the vessel and its transfer to the new owners was concluded on May 23, 2014. The net proceeds from the sale of the vessel amounted to $10.0 million and represent the difference between the net sale price of the vessel and the outstanding contractual obligation due to the shipyard upon delivery that was resumed by the vessel's new owners.

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In October 2014, we took delivery of two Ultramax vessels, the M/V Gentle Seas and the M/V Peaceful Seas. In October 2014, an aggregate amount of $35.7 million was paid to the shipyard representing the final installment of the two vessels, which was mainly financed from the loan facility with HSH dated April 4, 2014, following a total drawdown of $34.4 million.

As of the date of this annual report, our newbuilding program consisted two Ultramax drybulk carriers and three Kamsarmax drybulk carriers that are scheduled to be delivered in 2015, with a total contractual cost of $148.2 million, of which an aggregate of $101.7 million was outstanding and expected to be due during 2015. We intend to finance the remaining construction costs of these vessels with cash on hand, operating cash flows, borrowings under our secured loan facilities with Nordea dated May 6, 2014, as described in the discussion under the heading "Long-Term Debt" below, and additional bank debt that we intend to arrange or proceeds from future equity and debt offerings.

If the current low charter rate environment persists or worsens, our forecasted operating cash flows, together with our existing cash and cash equivalents, may not be sufficient to meet our liquidity needs for the next 12 months. If this event occurs, we expect to finance all of our working capital requirements with additional bank debt and future equity or debt offerings, and we may also proceed with the sale of existing vessels, which is in line with our fleet renewal strategy.

As of December 31, 2014, we had approximately $230.8 million of outstanding indebtedness, as compared to $180.1 million of outstanding indebtedness as of December 31, 2013. As of December 31, 2014, the minimum principal payments for the outstanding debt required to be made in 2015, without taking into consideration the subsequent agreements with Commerzbank AG ("Commerzbank"), Unicredit and Bank of Ireland discussed under the heading "Long-Term Debt" below and in Note 9 to our consolidated financial statements included at the end of this annual report, amounted to $20.7 million. Restricted cash was $10.0 million and $13.9 million as of December 31, 2013 and 2014, respectively.We have an aggregate borrowing capacity of up to $78.0 million with respect to the undrawn portion of the syndicated loan facility led by Nordea dated May 6, 2014, for the partial financing of our outstanding newbuilding program. For more information regarding our loan and credit facilities please refer to the discussion under the heading "Long-Term Debt" below.

Our business is capital intensive and its future success will depend on our ability to maintain a high-quality fleet through the acquisition of newer vessels and, depending on the prevailing market conditions, the potential selective sale of older vessels. These acquisitions will be principally subject to management's expectation of future market conditions, as well as our ability to acquire vessels on favorable terms. Our dividend policy will also impact our future liquidity position.

We regularly monitor our currency exposure and, from time to time, may enter into currency derivative contracts to hedge this exposure if we believe fluctuations in exchange rates would have a negative impact on our liquidity. As of December 31, 2014, we had no currency derivative contracts.

We have limited our exposure to interest rate fluctuations that will impact our future liquidity position through the swap agreements as stated in "Item 11. Quantitative and Qualitative Disclosures about Market Risk." For information relating to our swap agreements, please see Note 10 to our consolidated financial statements included at the end of this annual report.

Cash Flows

Cash and cash equivalents as of December 31, 2014 amounted to $7.0 million, compared to $31.3 million as of December 31, 2013. We define working capital as current assets minus current liabilities. We had a working capital deficit of $1.8 million as of December 31, 2014, compared to working capital surplus of $20.6 million as of December 31, 2013. The decrease in our working capital is mainly due to a decrease in cash and cash equivalents of $24.3 million, a decrease in marketable securities of $0.7 million, an increase in the current portion of long-term debt of $3.5 million and an aggregate decrease of $0.5 million in the remaining current assets and current liabilities, partially offset by an increase in the current portion of restricted cash by $6.6. The overall cash position in the future may be negatively impacted by a decline in drybulk market rates if the current economic environment persists or worsens.

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Cash and cash equivalents as of December 31, 2013 amounted to $31.3 million, compared to $17.7 million as of December 31, 2012. Working capital was $20.6 million as of December 31, 2013, compared to $9.4 million as of December 31, 2012. This increase is mainly due to the increase in cash and cash equivalents by $13.6 million, as a result of the proceeds from the public offering completed in September 2013, and the increase from December 31, 2012 in marketable securities of $1.0 million, as a result of the 58,483 additional shares of KLC that were issued to us on May 9, 2013, partially offset by the increase in the current portion of long-term debt by $2.8 million, resulting from an increase in our scheduled quarterly debt repayments during the next twelve months, and by other fluctuations in the remaining current assets and current liabilities.

Operating Activities

Net cash used in operating activities was $6.2 million during 2014, compared to net cash from operating activities of $4.6 million during 2013. This decrease is mainly due to a lower charter revenue net of commissions by $1.5 million, an increase in expenses, including voyage expenses, vessel operating expenses, dry-docking expenses, management fees – related party and general and administrative expenses, that in the aggregate amounted to $8.8 million, a decrease in gain from vessel early redelivery of $2.3 million, an increase in cash paid for interest and finance costs of $0.7 million, a decrease in interest income of $0.5 million, a decrease in dividends received from Box Ships, excluding the return of investment in Box Ships, which is classified as cash flow from investing activities, of $1.6 million, partially offset by an increase in cash flows from changes in trade receivables, net, and other assets and liabilities that in the aggregate amounted to $5.1 million.

Net cash from operating activities was $4.6 million during 2013, compared to $13.4 million during 2012. This decrease is mainly due to an increase in expenses, including voyage expenses, vessel operating expenses, dry-docking expenses, management fees – related party and general and administrative expenses, that in the aggregate amounted to $13.8 million, a loss from contract cancellation of $0.3 million recorded in 2013, relating to the cancellation of one of our two 4,800 TEU containership newbuilding contracts, a decrease in dividends received from Box Ships, excluding the return of investment in Box Ships, which is classified as cash flow from investing activities, of $1.5 million, a decrease in interest income and other income that in the aggregate amounted to $0.3 million, and a decrease in cash flows from other assets and liabilities of $2.8 million, partially offset by an increase in charter revenue net of commissions of $6.0 million, a gain from vessel early redelivery of $2.3 million recorded in 2013, while no such gain was recorded in 2012, and a decrease in cash paid for loan interest and realized expenses incurred from our derivative contracts that in the aggregate amounted to $1.6 million.

Investing Activities

Net cash used in investing activities was $104.5 million for the year ended December 31, 2014. This mainly reflects the cash outflows of $100.7 million relating to the deliveries of the M/V Proud Seas, the M/V Gentle Seas and the M/V Peaceful Seas, the first installments for the Kamsarmax newbuilding drybulk carriers with Hull numbers YZJ1144, YZJ1145 and YZJ1142, and the outstanding contractual cost of the 4,800 TEU containership newbuilding that was offset by the net proceeds from the sale of the respective vessel to an unrelated third party in May 2014. It also reflects an increase in our restricted cash of $3.9 million, and the acquisition of other fixed assets of $0.5 million, partially offset by the proceeds from the sale of KLC share of $0.5 million. Net cash used in investing activities was $6.4 million for the year ended December 31, 2013. This mainly reflects the cash outflows of $20.3 million relating to the delivery of our Handysize newbuilding vessel, the M/V Priceless Seas, the initial deposits for the acquisition of two of our Ultramax newbuilding drybulk carriers and other costs incurred for the remaining of vessels under construction, and the acquisition of other fixed assets of $0.2 million, offset by a repayment from an affiliate of $14.0 million in relation to our loan agreement with Box Ships that was repaid in full on October 18, 2013, and a return of our investment in Box Ships of $0.1 million.

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Financing Activities

Net cash from financing activities was $86.5 million for the year ended December 31, 2014, which mainly reflects the proceeds from long-term debt of $179.1 million and the net proceeds of $39.7 million from the public offering of 6,785,000 Class A common shares completed in February 2014, offset by the long-term debt repayments of $128.5 million, the cash outflows of $0.2 million relating to the purchase of treasury stock pursuant to the share buyback program that was authorized by our Board of Directors in May 2014, and the payment of financing costs of $3.8 million. Net cash from financing activities was $15.5 million for the year ended December 31, 2013, which mainly reflects the net proceeds from the issuance of common shares of $31.8 million, offset by the long-term debt repayments of $15.4 million and the payment of financing costs of $0.9 million.

Long-Term Debt

Loan and Credit Facilities

We operate in a capital intensive industry which requires significant amounts of investment, and we fund a portion of this investment through long-term bank debt. As of December 31, 2014, we had six outstanding bank debt facilities with a combined outstanding balance of $205.8 million. These credit facilities have maturity dates between 2016 and 2021 and are repayable in quarterly principal installments and balloon payments due on maturity and bear interest based on floating rate LIBOR plus an applicable margin which ranges between 2.50% and 3.25%, excluding a 4.50% and a 5.00% margin applicable to any deferred amounts under two of our loan and credit facilities. The obligations under our debt facilities are secured by, among other things, first priority mortgages over the vessels financed by the relevant facility and first priority assignments of all insurances and earnings of the mortgaged vessels. As of December 31, 2014, the minimum principal payments for the outstanding debt required to be made in 2015, without taking into consideration the subsequent agreements with Commerzbank, Unicredit and Bank of Ireland discussed below and in Note 9 to our consolidated financial statements included at the end of this annual report, amounted to $20.7 million.

Our loan and credit facilities, as amended or refinanced, which are secured by mortgages on our vessels, contain financial and security covenants requiring us, among other things, to:

· maintain a minimum debt service coverage ratio;

· maintain a minimum market adjusted net worth;

· maintain a maximum leverage ratio;

· maintain a minimum interest coverage ratio;

· maintain a minimum equity ratio;

· maintain minimum working capital;

· maintain minimum cash equivalents per vessel in our fleet and minimum liquidity; and

· maintain minimum security cover ratios of the aggregate market value of the vessels securing the applicable loan to the principal amount outstanding under such loan.

A violation of the security cover ratio, unless cured as set forth under the applicable loan or credit facility, or a violation of any of the financial covenants contained in our loan and credit facilities constitutes an event of default under our loan and credit facilities, which, unless waived or modified by our lenders, provides our lenders with the right to require us to provide additional collateral, enhance our equity and liquidity, increase our interest payments, pay down our indebtedness to a level where we are in compliance with our loan covenants, sell vessels in our fleet and accelerate our indebtedness and foreclose their liens on our vessels, or may cause us to reclassify our indebtedness as current liabilities, which would impair our ability to continue to conduct our business.

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Furthermore, all of our loan and credit facilities contain a cross-default provision that may be triggered by a default under one of our other loan and credit facilities. A cross-default provision means that a default on one loan would result in a default on all of our other loans. Because of the presence of cross default provisions in all of our loan and credit facilities, the refusal of any one lender to grant or extend a waiver could result in all of our indebtedness being accelerated even if our other lenders have waived covenant defaults under the respective loan and credit facilities. If our indebtedness is accelerated in full or in part, in the current financing environment, we may not be able to refinance our debt or obtain additional financing and we could lose our vessels if our lenders foreclose their liens, which would adversely affect our ability to conduct our business. In addition, if we find it necessary to sell our vessels at a time when vessel prices are low, we will recognize losses and a reduction in our earnings, which could affect our ability to raise additional capital necessary for us to comply with our loan and credit facilities.

On January 7, 2014, we took delivery of our fourth Handysize drybulk vessel, the M/V Proud Seas. Upon the delivery of the vessel, we drew the total amount of the then undrawn portion of the syndicated secured loan facility led by Nordea (dated May 5, 2011) of $25.4 million, by mortgaging both the M/V Priceless Seas and the M/V Proud Seas.

In line with our intention to sell the 4,800 TEU containership newbuilding, in the first quarter of 2014 we mutually agreed with CDB to cancel the corresponding credit facility for the vessel.

On April 4, 2014, we completed the documentation for a new loan agreement with HSH for a $47.0 million secured loan facility for the refinancing of the M/V Friendly Seas and the partial financing of our first two Ultramax newbuilding drybulk carriers, the Hull numbers DY152 and DY153. For M/V Friendly Seas, HSH agreed to finance the lower of $12.6 million or 60% of the vessel's market value upon the respective drawdown date. For each of our two Ultramax vessels, HSH agreed to finance the lower of $17.2 million or 65% of the vessels' market value upon their delivery. On July 7, 2014, we completed the refinancing of the M/V Friendly Seas. We drew a total amount of $12.6 million and repaid in full the then outstanding indebtedness under the existing loan agreement with HSH (dated July 31, 2008). In addition, in October 2014, we took delivery of our first two Ultramax drybulk carriers; the M/V Gentle Seas and the M/V Peaceful Seas (Hull numbers DY152 and DY153). An aggregate amount of $35.7 million was paid to the shipyard representing the final installment of the two vessels, which was mainly financed from the loan facility with HSH, following a total drawdown of $34.4 million.

On April 8, 2014, we signed a supplemental agreement with HSBC Bank Plc ("HSBC") and agreed to amend the definitions of certain financial covenants, to prepay an amount of $0.8 million that was prepaid on April 10, 2014, and to reduce the outstanding scheduled quarterly installments from $400,000 to $380,000, commencing from the second quarter of 2014. In addition, on August 1, 2014, we agreed with HSBC to extend the existing waivers for the financial covenants relating to the minimum interest and debt service coverage ratios, from June 30, 2014 to December 31, 2015.

On May 6, 2014, we completed the documentation for a senior secured loan facility with a syndicate of major European banks led by Nordea in an amount of $160.0 million. This facility would be used for the refinancing of six vessels of our operating fleet (the four Handysize vessels M/V Prosperous Seas, M/V Precious Seas, M/V Priceless Seas and the M/V Proud Seas, and the Panamax vessels M/V Coral Seas and M/V Golden Seas), along with the financing of up to 60% of the market value of the remaining two Ultramax newbuilding drybulk carriers, the Hull numbers DY4050 and DY4052, and two of our Kamsarmax newbuilding drybulk carriers, the Hull numbers YZJ1144 and YZJ1145, that are expected to be delivered between the second and third quarter of 2015. On June 10, 2014, we completed the refinancing of the six vessels of our operating fleet discussed above. We drew a total amount of $81.8 million and repaid in full the then outstanding indebtedness under our existing loan agreements with Bank of Scotland (dated December 4, 2007) and Nordea (dated May 5, 2011).

On July 25, 2014, we agreed with Bank of Ireland to eliminate the financial covenant relating to the minimum debt service coverage ratio until the maturity of the loan. In addition, on September 30, 2014, we proceeded with a prepayment of $4.0 million with respect to our loan agreement with Bank of Ireland in return for a reduction in the next eight quarterly installments and an increase in the balloon at maturity.

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On July 30, 2014, we agreed with Unicredit, subject to certain closing conditions including a $7.0 million prepayment, to eliminate the financial covenants relating to the minimum debt service coverage ratio, the minimum market value adjusted net worth and the maximum leverage ratio until the maturity of the loan. In addition, we also agreed to increase the required ratio of the fair market value of mortgaged vessels to outstanding loan from 110% to 130% at all times. We prepaid the amount of $7.0 million on September 30, 2014.

On March 27, 2015, we entered into a loan supplemental agreement and agreed to amended terms with Unicredit, including the deferral of one and a portion of five of the scheduled quarterly installments due in the second quarter of 2015 through the third quarter of 2016, and the waiver of the minimum liquid assets requirement and the security ratio covenant until the maturity of the loan.

On March 27, 2015, we also agreed with Bank of Ireland to waive 50% of the scheduled quarterly installment that was due in the first quarter of 2015, until April 30, 2015.

On April 1, 2015, we agreed with Commerzbank to amend certain terms of the facility subject to final documentation and other conditions, including the deferral of a portion of the four scheduled quarterly installments due in 2015, and the waiver of the application of the financial and security cover ratio covenants contained in the facility, effective from December 31, 2014 until December 31, 2015. We also agreed to a $3.0 million partial prepayment, a portion of which was prepaid in the first quarter of 2015, while the balance is payable upon signing the final documentation.

As of December 31, 2014, we had $205.8 million of outstanding indebtedness to banks and we were in compliance with all of the covenants contained in our loan and credit facilities, with the exception of the security cover ratio covenant contained in our loan with Commerzbank, for which we subsequently obtained a waiver until December 31, 2015, as discussed above.

Given the current drybulk charter rates, it is probable that we will not be in compliance with the minimum working capital requirement and the minimum liquidity requirement contained in certain of our loan and credit facilities on the applicable measurement dates in 2015. As a result of the cross default provisions included in our debt agreements, actual breaches under our debt agreements could result in defaults under all of our debt and the acceleration of such debt by our lenders. Furthermore, based on our cash flow projections for 2015, cash on hand and cash provided by operating activities will not be sufficient to cover scheduled debt repayments due in 2015. We are currently in negotiations with such lenders to obtain waivers for the affected covenants. We are also exploring several alternatives aiming to manage our working capital requirements and other commitments if current drybulk charter rates remain at today's low levels including negotiations for the restructuring of our loans. Although there can be no assurance that a successful resolution will be reached with our lenders, we believe that the negotiations will be successful. Failure to obtain such waivers may result in our inability to maintain compliance with the affected covenants on the applicable measurement dates in 2015. If this event occurs, we may experience a material adverse effect on our business, financial condition, results of operations and cash flows, and as a result of which, we have presented all our borrowings as current. Our loan and credit facilities, as amended or refinanced, also contain other restrictions and customary events of default with respect to us and our applicable subsidiaries, such as a change of control, a cross-default with respect to financial indebtedness or a material adverse change in the financial position or prospects of the borrowers or us.

In addition, under the terms of our loan and credit facilities, our ability to pay dividends and make other payments or distributions to shareholders is subject to several restrictions as discussed in "Item 8. Financial Information—Dividend Policy."

Moreover, in connection with any additional waivers of covenant breaches contained in, or amendments to the terms of, our loan and credit facilities that we obtain, our lenders may impose additional operating and financial restrictions on us to the restrictions discussed above or further modify the terms of our existing loan and credit facilities. These additional restrictions may further restrict our ability to, among other things, pay dividends, make capital expenditures or incur additional indebtedness, including through the issuance of guarantees. In addition, our lenders may require the payment of additional fees, the prepayment of a portion of our indebtedness to them, the acceleration of the amortization schedule for our outstanding indebtedness and the increase the interest rates they charge us on our outstanding indebtedness.

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For more information regarding our loan and credit facilities as of December 31, 2014, please see Note 9 to our consolidated financial statements included at the end of this annual report.

8.375% Senior Notes due 2021

On August 8, 2014, we completed the public offering of 1,000,000 of our 8.375% Senior Notes due 2021 pursuant to an effective shelf registration statement. The Notes were issued in minimum denominations of $25.00 and integral multiples of $25.00 in excess thereof, and bear interest at a rate of 8.375% per year, payable quarterly on each February 15, May 15, August 15 and November 15, commencing on November 15, 2014. The Notes will mature on August 15, 2021, and may be redeemed in whole or in part at any time or from time to time after August 15, 2017. The net proceeds from the offering amounted to $23.9 million, net of underwriting discounts and commissions of $0.8 million, and offering expenses payable by the Company of $0.3 million. The Notes trade on NASDAQ under the symbol "PRGNL".

The indenture governing the Notes contains certain restrictive covenants, including limitations on asset sales and:

(a) Limitation on Borrowings. Net borrowings not to exceed 70% of our total assets.

(b) Limitation on Minimum Net Worth. Net worth to always exceed one hundred million dollars ($100,000,000).

As of December 31, 2014, we were in compliance with all of the covenants contained in our Notes.

In addition, if a Change of Control (as defined in the indenture governing Notes) occurs, we must repurchase the Notes at a purchase price of 101% of the principal amount of the Notes plus accrued and unpaid interest to, but excluding the date of repurchase. If a Limited Permitted Asset Sale (as defined in the indenture governing the Notes) occurs, we must offer to purchase a principal amount of the Notes equal to the Excess Proceeds (as defined in the indenture governing the Notes) of such Limited Permitted Asset Sale at a redemption price equal to 101% of the principal amount, plus accrued and unpaid interest to, but excluding, the date of repurchase.

In addition, if an event of default or an event or circumstance which, with the giving of any notice or the lapse of time, would constitute an event of default under the Notes has occurred and is continuing, or we are not in compliance with the covenant described under "Limitation on Borrowings" or "Limitation on Minimum Net Worth" or any payment of dividends or any form of distribution or return of capital would result in the Company not being in compliance with the covenant described under "(a) Limitation on Borrowings" or "(b) Limitation on Minimum Net Worth" above, then none of the Company or any of its subsidiaries will be permitted to declare or pay any dividends or return any capital to our equity holders (other than the Company or a wholly-owned subsidiary of the Company) or authorize or make any other distribution, payment or delivery of property or cash to our equity holders (other than the Company or a wholly-owned subsidiary of the Company), or redeem, retire, purchase or otherwise acquire, directly or indirectly, for value, any interest of any class or series of our equity interests (or acquire any rights, options or warrants relating thereto but not including convertible debt) now or hereafter outstanding and held by persons other than the Company or any wholly-owned subsidiary, or repay any subordinated loans to equity holders (other than the Company or a wholly-owned subsidiary of the Company) or set aside any funds for any of the foregoing purposes.

For more information on our Notes, please see the section entitled "Description of Notes" in our final prospectus supplement filed with the SEC on Form 424B5 on August 7, 2014.

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Financial Instruments

We have entered into interest rate swap agreements in order to hedge our variable interest rate exposure under our loan agreements discussed above. For more information on our interest rate swap agreements, refer to Note 10 to our consolidated financial statements included at the end of this annual report.

From time to time we may enter into foreign derivative instruments if we have a capital commitment in foreign currency. As of December 31, 2014, we had no currency derivative contracts.

C.Research and Development, Patents and Licenses

None.

D.Trend Information

We believe the principal factors that will affect our future results of operations are the economic, regulatory, political and governmental conditions that affect the shipping industry generally and that affect conditions in countries and markets in which our vessels engage in business. Other key factors that will be fundamental to our business, future financial condition and results of operations include:

· the demand for seaborne transportation services;

· the effective and efficient technical management of our vessels;

· our ability to satisfy technical, health, safety and compliance standards; and

· the strength of and growth in the number of our charterer relationships.

In addition to the factors discussed above, we believe certain specific factors will impact our combined and consolidated results of operations. These factors include:

· the charter hire earned by our vessels operating under our charters;

· our access to capital required to acquire additional vessels and/or to implement our business strategy;

· our ability to sell vessels at prices we deem satisfactory; and

· our level of debt and the related interest expense and amortization of principal.

Please read "Item 3. Key Information—D. Risk Factors" for a discussion of the material risks inherent in our business.

E.Off-balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

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F.Contractual Obligations

The following table sets forth our contractual obligations and their maturity dates as of December 31, 2014:

Contractual Obligations (amounts in thousands of U.S Dollars)	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Debt Agreements (1)	$	230,779	$	20,714	$	80,544	$	23,285	$	106,236
Interest Payments (1), (2)		41,013		9,420		14,923		10,734		5,936
Shipbuilding Contracts		101,701		101,701		-		-		-
Management Agreements (3)		24,687		5,818		9,435		9,421		13
Executive Services (4)		3,521		3,521		-		-		-
Accounting Services (5)		-		-		-		-		-
Rental Agreements (6)		122		44		78		-		-
Total	$	401,823	$	141,218	$	104,980	$	43,440	$	112,185

(1) The minimum annual principal payments for our Debt Agreements and the relating Interest Payments required to be made after December 31, 2014, do not take into consideration the subsequent agreements with Commerzbank, Unicredit and Bank of Ireland discussed under the heading "Long-Term Debt" above and in Note 9 to our consolidated financial statements included at the end of this annual report.

(2) Interest Payments refer to our expected interest payments of our debt agreements by taking into account our interest rate swaps currently in effect and based on an assumed LIBOR rate of 0.2551% being the 3 month LIBOR rate as of December 31, 2014.

(3) The amounts indicated in the above table are the minimum contractual obligations based on a daily management fee of €664.46 (or $806.65 based on the Euro/U.S. dollar exchange rate of €1.0000:$ 1.2140 as of December 31, 2014) per vessel, and includes the 1.25% charter hire commission for the vessels in our fleet under their time charters as of December 31, 2014, that will be paid to Seacommercial, based on the estimated redelivery dates assuming no off-hire days. Third party commissions on revenues are not included in the table above. In addition, the amounts also include minimum contractual obligations based on the management agreements with Allseas relating to the supervision of each of the contracted newbuildings pursuant to which we will pay: (1) a flat fee of $375,000 for the first 12 month period commencing from the respective steel cutting date of each vessel and thereafter the flat fee will be paid on a pro rata basis until we accept delivery of the respective vessel, and (2) a daily fee of €115.00 (or $139.61 based on the Euro/U.S. dollar exchange rate of €1.0000:$ 1.2140 as of December 31, 2014) per vessel, commencing from the date of the vessel's shipbuilding contract until we accept delivery of the respective vessel. The daily management fee of $806.65 and the daily newbuilding supervision fee of $139.61 do not incorporate any inflationary increases in the rates or changes which may be agreed in the future.

(4) The amounts indicated in the above table are the minimum executive services fee of €2.9 million (or $3.5 million based on the Euro/U.S. dollar exchange rate of €1.0000:$ 1.2140 as of December 31, 2014) per annum, and do not include any incentive compensation which our Board of Directors, at their discretion, may agree to pay.

(5) The above table does not take into consideration the renewal of the accounting services agreement for one year effective January 1, 2015, that was signed in February 2015. Accounting Services relate to the financial and accounting services fee of €250,000 (or $303,500 based on the Euro/U.S. dollar exchange rate of €1.0000:$ 1.2140 as of December 31, 2014) per annum, and the financial reporting fee of $30,000 per vessel per annum, in connection with the provision of services under the accounting services agreement.

(6) We lease office space in Athens, Greece. The term of the lease will expire on September 30, 2017 and the monthly rental for the first year is €3,000.00 (or $3,642.00 based on the Euro/U.S. dollar exchange rate of €1.0000:$ 1.2140 as of December 31, 2014) plus 3.6% tax, which will be adjusted thereafter annually for inflation increases. For the future minimum rent commitments, we excluded inflation increases as the impact on future results of operations will not be material.

G.Safe Harbor

See the section entitled "Forward Looking Statements" at the beginning of this annual report.

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Item 6.Directors, Senior Management and Employees

A.Directors and Senior Management

Set forth below are the names, ages and positions of our directors and executive officers. Our Board of Directors is elected annually, and each director elected holds office for a three-year term or until his successor shall have been duly elected and qualified, except in the event of his death, resignation, removal or the earlier termination of his term of office. Officers are elected from time to time by vote of our Board of Directors and hold office until a successor is elected. Mr. Robert Perri resigned as our Chief Financial Officer effective March 24, 2015 and the Board of Directors appointed Mr. Michael Bodouroglou, our Chairman, President and Chief Executive Officer, to act as Interim Chief Financial Officer. The business address for each director and executive officer is c/o Paragon Shipping Inc., 15 Karamanli Ave, GR 166 73, Voula, Greece.

Name	Age	Position
Michael Bodouroglou	60	Chairman, President, Chief Executive Officer, Interim Chief Financial Officer and Class C Director
George Skrimizeas	49	Chief Operating Officer
Nigel D. Cleave	56	Class B Director
Dimitrios Sigalas	70	Class A Director
Bruce Ogilvy	72	Class B Director
George Xiradakis	50	Class A Director

Biographical information with respect to each of our directors and executive officers is set forth below.

Michael Bodouroglou, our founder and Chief Executive Officer, has been involved in the shipping industry in various capacities for more than 35 years. He has served as our Chairman, President, Chief Executive Officer and director since our formation in April 2006. Mr. Bodouroglou has been appointed to act as our Interim Chief Financial Officer since March 2015. Mr. Bodouroglou also serves as the Chairman, President and Chief Executive Officer of Box Ships Inc., an affiliated company. Mr. Bodouroglou has owned and operated tanker and drybulk vessels since 1993. He is the founder of Allseas, which serves as the technical and commercial managing company to our fleet. Prior to 1993, Mr. Bodouroglou was employed as a technical superintendent supervising both tanker and drybulk vessels for various shipping companies. In 1977, Mr. Bodouroglou graduated with honors from the University of Newcastle-upon-Tyne in the United Kingdom with a Bachelor of Science in Marine Engineering and in 1978 he was awarded a Master of Science in Naval Architecture. Mr. Bodouroglou is a member of the Cayman Islands Shipowners' Advisory Council, the DNV GL Greek Committee and the Lloyd's Register Hellenic Advisory Committee. He is also a member of China Classification Society Mediterranean Committee (CCS), the RINA Hellenic Advisory Committee (Registro Italiano Navale) and the Greek Committee of Nippon Kaiji Kyokai (ClassNK). He is also member of the Board of the Swedish P&I Club and the Union of Greek Shipowners. Mr. Bodouroglou is the Honorary Consul for the Slovak Republic in Piraeus, the President of the Hellenic-Australian Business Council (HABC) and an Honorary Fellow of the Institute of Chartered Shipbrokers.

George Skrimizeas has been our Chief Operating Officer since November 2006. Mr. Skrimizeas has been general manager of Allseas since May 2006. From 1996 to 2006, Mr. Skrimizeas has held various positions in Allseas, Eurocarriers and their affiliates, including general manager, accounts and human resources manager, and finance and administration manager. Mr. Skrimizeas worked as accounts manager for ChartWorld Shipping from 1995 to 1996 and as accounts and administration manager for Arktos Investments Inc. from 1994 to 1995. From 1988 to 1994, Mr. Skrimizeas was accounts and administration manager for Candia Shipping Co. S.A. and accountant and chief accounting officer—deputy human resources manager in their Athens, Romania, Hong Kong and London offices. Mr. Skrimizeas received his Bachelor of Science degree in Business Administration from the University of Piraeus, Greece in 1988 and completed the coursework necessary to obtain his Master of Science in Finance from the University of Leicester, in the United Kingdom, in 2002. Mr. Skrimizeas is a member of the Hellenic Chamber of Economics, the Hellenic Management Association and the Hellenic Association of Chief Executive Officers.

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Nigel D. Cleave has served as a non-executive director of the Company since November 2006. In January 2011, Mr. Cleave was appointed to his current position of chief executive officer of Videotel, the leading provider of e-learning maritime blended training systems. Prior to this, Mr. Cleave held the position of chief executive officer of Elias Marine Consultants Limited, providing a broad range of professional services. In 2006, Mr. Cleave was appointed chief executive officer of PB Maritime Services Limited, a ship management and marine services company, having previously served as group managing director of Dobson Fleet Management Limited from 1993 to 2006, a ship management company based in Cyprus. From 1991 to 1993, Mr. Cleave held the position of deputy general manager at Cyprus based ship management company Hanseatic Shipping Co. Ltd. and from 1988 to 1991, held various fleet operation roles based in London. From 1975 to 1986, Mr. Cleave held various positions at The Cunard Steamship Company plc, including serving in the ranks of navigating cadet officer to second officer, as well as financial and planning assistant, assistant to the group company secretary and assistant operations manager. Mr. Cleave graduated from the Riversdale College of Technology in the United Kingdom with an O.N.C. in Nautical Science and today is a Fellow of the Chartered Institute of Shipbrokers and the Chairman of the Cayman Islands Shipowners' Advisory Council.

Bruce Ogilvy has served as a non-executive director of the Company since July 2007. From 2003 to 2005 Mr. Ogilvy served as a consultant to Stelmar Tankers (Management) Ltd. and from 1992 to 2002, he was managing director of Stelmar Tankers (U.K.) Ltd., a subsidiary of Stelmar Tankers (Management) Ltd., through which the group's commercial business, including chartering and sale and purchase activities, were carried out. In 1992, Mr. Ogilvy joined Stelios Haj-Ioannou to form Stelmar Tankers (Management) Ltd., and served on its Board of Directors from its inception to 2003. During his ten years with Stelmar Tankers (Management) Ltd., Stelmar Shipping Ltd. completed an initial public offering on the New York Stock Exchange in 2001 and a secondary listing in 2002. Prior to his association with Stelmar Tankers (Management) Ltd., Mr. Ogilvy served in various capacities, including chartering and sale and purchase activities with Shell International. Mr. Ogilvy graduated from Liverpool University, in the United Kingdom, in 1963 with a degree as Ship Master. Mr. Ogilvy served on the Council of Intertanko, an industry body that represents the interests of Independent tanker owners, since 1994 and on its Executive Board from 2003 until 2005. Mr. Ogilvy has been an active member of the Institute of Chartered Shipbrokers for over 30 years and has served as the Chairman of the Trust Fund of the Institute of Chartered Shipbrokers since September 2010, the Vice President of the Institute of Chartered Shipbrokers from October 2012 until November 2014 and since November 2014 the President of the Institute of Chartered Shipbrokers.

Dimitrios Sigalas has served as a non-executive director of the Company since March 2008. Mr. Sigalas served as a maritime journalist for the Greek daily newspaper "Kathimerini" from 1985 to 2008. Mr. Sigalas also served within the chartering department of Glafki (Hellas) Maritime Corporation, an Athens based shipowning company, from 1972 to 2006. In 1980 Mr. Sigalas was appointed to Head of the Dry and Tanker Chartering Department within Glafki (Hellas) Maritime Corporation. Mr. Sigalas graduated from Cardiff University, Wales, with a diploma in Shipping. Mr. Sigalas is also a member of the Institute of Freight Forwarders UK, and has served in the Merchant Navy after his graduation from the Navigation Academy of Hydra.

George Xiradakis has served as a non-executive director of the Company since July 2008. In his banking career (1991-1998) he served as Vice President of Credit Lyonnais Shipping Group and Head of European Shipping finance activities and as Head of Greek, Indian and Middle East Shipping. Since 1999, Mr. Xiradakis has been the Managing Director of XRTC Business Consultants Ltd., a consulting firm providing financial advice to the maritime industry. Mr. Xiradakis also provides financial advice to international shipping banks, shipping companies, as well as international and state organizations. Mr. Xiradakis has a certificate as a Deck Officer from the Hellenic Merchant Marine and he is a graduate of the Nautical Marine Academy of Aspropyrgos, Greece. He also holds a postgraduate Diploma in Commercial Operation of Shipping from London Metropolitan University, formerly known as City of London Polytechnic, and a Master of Science in Maritime Studies from the University of Wales College of Cardiff. Mr. Xiradakis is a member of the Board of Directors of DryShips Inc. (NASDAQ: DRYS) and from 2008 to 2009, Mr. Xiradakis was a member of the Board of Directors of Aries Maritime Transport, which has since changed its name to NewLead Holdings Ltd (NASDAQ: NEWL). Mr. Xiradakis is the President of the International Propeller Club of the United States – International Port of Piraeus Board, General Secretary of the Association of Banking and Shipping Executives of Hellenic Shipping, Board member of the Greek-China Friendship Association, and also a member of the Mediterranean Committee of China Classification Society, HELMEPA, the Marine Club of Piraeus, and the Sino-Greek Chamber of Commerce. In the past, Mr. Xiradakis also served as the Chairman and President of the National Center of Port Development in Greece and as the Chairman and President of Hellenic Public Real Estate Corporation.

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B.Compensation

Each of our non-employee directors receives annual compensation in the aggregate amount of €45,000 per annum (or $54,630 based on the Euro/U.S. dollar exchange rate of €1.0000:$1.2140 as of December 31, 2014), plus reimbursements for actual expenses incurred while acting in their capacity as a director. During 2014, we granted non-vested share awards to entities affiliated with our Chairman, President, Chief Executive Officer and Interim Chief Financial Officer and to other directors and officers as described below under the section entitled "—Equity Incentive Plan." We do not have a retirement plan for our officers or directors. In addition, each of our non-employee directors is also entitled to incentive compensation, at the discretion of our Board of Directors. During 2014, an aggregate amount of $0.4 million was charged relating to the remuneration of our non-employee directors, including incentive compensation.

Effective January 1, 2011, we entered into an executive services agreement with Allseas, pursuant to which Allseas provides the services of our executive officers, which include strategy, business development, marketing, finance and other services, who report directly to our Board of Directors. Under the amended agreement, after January 1, 2013, Allseas was entitled to an executive services fee of €2.7 million (or $3.3 million based on the Euro/U.S. dollar exchange rate of €1.0000:$1.2140 as of December 31, 2014) per annum, payable in equal monthly installments, plus incentive compensation. Effective January 1, 2014, the executive services fee was adjusted to €2.9 million (or $3.5 million based on the Euro/U.S. dollar exchange rate of €1.0000:$1.2140 as of December 31, 2014). The agreement has an initial term of five years and automatically renews for successive five year terms unless terminated earlier. See "Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Agreements with Our Managers—Executive Services Agreement."

In order to incentivize Allseas' continued services to us, on November 10, 2009, we entered into a tripartite agreement with Allseas and Loretto, a wholly-owned subsidiary of Allseas, pursuant to which in the event of a capital increase, an equity offering or the issuance of common shares to a third party or third parties in the future, other than common shares issued pursuant to our equity incentive plan, we have agreed to issue, at no cost to Loretto, additional common shares to Loretto in an amount equal to 2% of the total number of common shares issued pursuant to such capital increase, equity offering or third party issuance, as applicable. As of the date of this annual report, we had issued a total of 469,958 of our common shares to Loretto pursuant to this agreement. See "Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Agreement with Loretto."

C.Board Practices

Our Board of Directors consists of the five directors named above. Our Board of Directors is elected annually, and each director elected holds office for a three-year term or until his successor shall have been duly elected and qualified, except in the event of his death, resignation, removal or the earlier termination of his term of office. The term of our Class B directors, Messrs. Cleave and Ogilvy, expired at our 2014 annual general meeting of shareholders. At the 2014 annual general meeting, Messers. Cleave and Ogilvy were reelected as Class B Directors whose terms expire at our 2017 annual general meeting of shareholders. The term of our Class A directors, Messrs. Sigalas and Xiradakis, expires at our 2016 annual general meeting of shareholders. The term of our Class C director, Mr. Bodouroglou, expires at our 2015 annual general meeting of shareholders.

In keeping with the corporate governance rules of NASDAQ, from which we have derived our definition for determining whether a director is independent, our Board of Directors has determined that each of Messrs. Cleave, Sigalas, Ogilvy and Xiradakis, constituting a majority of our Board of Directors, is independent. Under the corporate governance rules of NASDAQ, a director is not considered independent unless the Board of Directors affirmatively determines that the director has no direct or indirect material relationship with us or our affiliates. In making this determination, our Board of Directors has broadly considered all facts and circumstances the Board of Directors deems relevant from the standpoint of the director and from that of persons or organizations with which the director has an affiliation.

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We have established an audit committee comprised of three directors, each of whom our Board of Directors has determined to be independent under Rule 10A-3 of the Securities Exchange Act of 1934, as amended, or the Exchange Act, as well as NASDAQ's independence rules. Our Board of Directors has also determined that each member of the audit committee has the financial experience required by Rule 5605 of NASDAQ's Equity Rules and other relevant experience necessary to carry out the duties and responsibilities of our audit committee. The members of the audit committee are Messrs. Cleave, Ogilvy and Xiradakis. Mr. Cleave serves as the chairman of our audit committee. Our audit committee has designated Mr. Xiradakis as our "audit committee financial expert," as such term is defined in Item 407 of SEC Regulation S-K promulgated by the SEC.

The audit committee is responsible for reviewing our accounting controls and recommending to the Board of Directors the engagement of our outside auditors, as well as for assisting our Board of Directors with its oversight responsibilities regarding the integrity of our financial statements, our compliance with legal and regulatory requirements, our independent registered public accounting firm's qualifications and independence, and the performance of our internal audit functions.

We have established a compensation committee comprised of three independent directors, which is responsible for recommending to the Board of Directors our senior executive officers' compensation and benefits. The members of the compensation committee are Messrs. Cleave, Ogilvy and Sigalas.

We have also established a nominating and corporate governance committee comprised of three independent directors, which is responsible for recommending to the Board of Directors nominees for directors for appointment to board committees and advising the Board of Directors with regard to corporate governance practices. The members of the nominating and corporate governance committee are Messrs. Cleave, Sigalas and Xiradakis.

We do not maintain any service contracts between us and any of our directors providing for benefits upon termination of their employment or service.

D.Crewing and Shore Employees

As of December 31, 2013 and 2014, we had two shoreside salaried employees. Allseas provides the services of our executive officers, who report directly to our Board of Directors, pursuant to an executive services agreement entered into between the Company and Allseas. As of December 31, 2013 and 2014, we had three shoreside executive officers, Mr. Bodouroglou, our Chairman, President and Chief Executive Officer, Mr. Robert Perri, our former Chief Financial Officer, and Mr. George Skrimizeas, our Chief Operating Officer. In addition, Mrs. Aikaterini Stoupa serves as our Corporate Secretary.

Allseas is responsible for recruiting, either directly or through a crewing agent, the senior officers and all other crew members for our vessels. Allseas subcontracts crewing services relating to our vessels to Crewcare, a company beneficially owned by Mr. Bodouroglou. We believe the streamlining of crewing arrangements helps to ensure that all our vessels will be crewed with experienced seamen that have the qualifications and licenses required by international regulations and shipping conventions.

Each of our vessel-owning subsidiaries has entered into manning agreements with Crewcare, pursuant to which Crewcare provides manning services and crew for each of our vessels. As of December 31, 2013 and 2014, 252 and 345 people were employed mainly by Crewcare to crew the vessels in our fleet, respectively. We have not experienced any material work stoppages due to labor disagreements since we commenced operations in April 2006.

E. Share Ownership

With respect to the total amount of common shares owned by all of our executive officers and directors, individually and as a group, see "Item 7. Major Stockholders and Related Party Transactions—A. Major Shareholders."

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Equity Incentive Plan

On October 11, 2006, we adopted an equity incentive plan, as amended and restated, under which our and our affiliates' officers, key employees, directors and consultants are eligible to receive equity awards. On October 15, 2012, we further amended and restated our amended and restated equity incentive plan to, among other things, increase the number of common shares reserved for issuance under the plan by 4,466,733 common shares to 9,966,733 common shares, which, after the 10-for-1 reverse stock split discussed above, was adjusted to 996,673 common shares, subject to further adjustment in the event of any future distribution, recapitalization, split, merger, consolidation or the like. On March 26, 2014, our Board of Directors approved to cancel the remaining common shares reserved for issuance under the equity incentive plan.

In addition, on March 26, 2014, we adopted a new equity incentive plan, under which our and our affiliates' officers, key employees, directors and consultants are eligible to receive equity awards. A total of 2,000,000 common shares are reserved for issuance under the plan. Our Board of Directors administers the plan. Under the terms of the plan, our Board of Directors is able to grant new options exercisable at a price per common share to be determined by our Board of Directors but in no event less than fair market value of the common share as of the date of grant. All options will expire ten years from the date of the grant. The plan also permits our Board of Directors to award restricted stock, restricted stock units, stock appreciation rights and unrestricted stock. The plan will expire on the tenth anniversary of the date the plan was adopted by our Board of Directors. As of the date of this annual report, we had 1,680,000 common shares remaining for issuance under the plan.

Options

There were no unvested options to purchase common shares as of December 31, 2014. As of December 31, 2014, there were outstanding and exercisable 2,800 options to purchase common shares, with an exercise price of $120.00, which vested in 2010.

Non-vested Share Awards

All the non-vested share awards granted by us are conditioned upon the holder's continued service as an employee of the Company or our Managers or a director of the Company, as applicable, through the applicable vesting date.

Details of our non-vested share awards granted subsequent to January 1, 2014 are noted below:

On January 31, 2014, we granted an aggregate of 32,000 non-vested share awards to employees of Allseas, with a grant date fair value of $6.67 per share, which will vest ratably over a two-year period commencing on December 31, 2014.

On December 10, 2014, we granted 200,000 non-vested common shares to Innovation Holdings, a company wholly owned and controlled by our Chairman, President, Chief Executive Officer and Interim Chief Financial Officer, Mr. Michael Bodouroglou, with a grant date fair value of $2.44 per share, which vest ratably over a two-year period commencing on December 31, 2015.

In addition, on December 10, 2014, we granted an aggregate of 20,000 non-vested common shares to our non-executive directors and employees of Allseas, with a grant date fair value of $2.44 per share, which vest ratably over a two-year period commencing on December 31, 2015.

On February 26, 2015, we granted an aggregate of 70,000 non-vested share awards to employees of Allseas, with a grant date fair value of $1.865 per share, which will vest ratably over a two-year period commencing on December 31, 2015.

On March 17, 2015, we granted an aggregate of 30,000 non-vested share awards to executive officers of Allseas, with a grant date fair value of $1.310 per share, which will vest ratably over a two-year period commencing on December 31, 2015.

For more information on our non-vested share awards, refer to Note 13 to our consolidated financial statements included at the end of this annual report.

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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 April 15, 2015, held by (i) the owners of more than five percent of outstanding common shares that we are aware of and (ii) the total number of common shares owned by our executive officers and directors.

Beneficial ownership is determined in accordance with the Commission's rules. All of our shareholders, including the shareholders listed in the table below, are entitled to one vote for each common share held.

Name and Address of Beneficial Owner(1)	Number of Shares Owned		Percent of Class(2)
Michael Bodouroglou(3)		7,056,064		28.3	%
Lloyd I. Miller, III(4)		1,419,426		5.7	%
All officers and directors, other than Michael Bodouroglou, as a group		*		*

*Less than one percent.

⁽¹⁾ Unless otherwise indicated, the business address of each beneficial owner identified is c/o Paragon Shipping Inc., 15 Karamanli Avenue, GR 16673, Voula, Greece.

⁽²⁾ Percentage amounts based on 24,909,142 common shares outstanding as of the date of this annual report.

⁽³⁾ Mr. Bodouroglou beneficially owns 6,586,106 of these shares through Innovation Holdings, a company beneficially owned and controlled by Mr. Bodouroglou and members of his family, and 469,958 of these shares through Loretto, a wholly owned subsidiary of Allseas that is controlled by Mr. Bodouroglou and members of his family. Innovation Holdings was awarded 200,000 common shares pursuant to an award granted under the Plan on December 10, 2014. Furthermore, Loretto received no common shares from March 26, 2014 to April 15, 2015, pursuant to the agreement we have entered into with Loretto and Allseas described in "Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Agreement with Loretto."

⁽⁴⁾ Information is based on a Schedule 13G/A filed by Lloyd I. Miller, III on February 5, 2015.

As of April 15, 2015, we had 51 shareholders of record, ten of which were located in the United States and held an aggregate of 17,612,978 of our common shares, representing 71% of our outstanding common shares. However, one of the U.S. shareholders of record is CEDE & CO., a nominee of The Depository Trust Company, which held 17,612,577 of our common shares as of April 15, 2015. Accordingly, we believe that the shares held by CEDE & CO. include common shares beneficially owned by both holders in the United States and non-U.S. beneficial owners. We are not aware of any arrangements the operation of which may at a subsequent date result in our change of control.

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B.Related Party Transactions

Agreements with Our Managers

Management Agreements

Management Agreement with Allseas

We have entered into separate management agreements with Allseas for each of the vessels in our operating fleet, pursuant to which Allseas is responsible for the commercial and technical management functions of our fleet.

Our management agreements with Allseas were amended and restated effective January 2, 2015. Effective from January 2, 2015, we and Allseas mutually agreed to cease a portion of the services that were provided by Allseas under the terms of the original management agreements, which were taken over by Seacommercial on substantially similar terms, as discussed further below. Allseas will be still responsible for the technical management and certain aspects of commercial management including, among other things, operations and freight collection services, obtaining insurance for our vessels and finance and accounting functions. Technical management services provided by Allseas includes, among other things, arranging for and managing crews, vessel maintenance, dry-docking, repairs, insurance, maintaining regulatory and classification society compliance and providing technical support. Our Chairman, President, Chief Executive Officer and Interim Chief Financial Officer, Mr. Michael Bodouroglou, is the sole shareholder of Allseas.

Under the terms of the amended and restated management agreements, Allseas has agreed to use its best efforts to provide management services upon our request in a commercially reasonable manner and may provide these services directly to us or subcontract for certain of these services with other entities. Allseas has in-house technical management capabilities, which it continues to expand. Allseas remains responsible for any subcontracted services under the management agreements. We have agreed to indemnify Allseas for losses it incurs in connection with the provision of these services, excluding losses caused by the gross negligence or willful misconduct of Allseas, its employees, subcontractors or agents. Under the agreements, Allseas' liability for losses caused solely by its gross negligence or willful default, or that of its employees, agents or subcontractors, is limited to ten times the annual management fee payable under the management agreements, except where such loss resulted from Allseas' intentional or reckless act or omission.

Each amended and restated management agreement has an initial term of five years and automatically renews for additional five-year periods, unless in each case, at least 30 days' advance written notice of termination is given by either party.

Under the amended and restated management agreements, Allseas is entitled to a technical management fee of €664.46 per vessel, per day (or $806.65 based on the Euro/U.S. dollar exchange rate of €1.0000:$1.2140 as of December 31, 2014), for the twelve months commencing June 1, 2014, payable on a monthly basis in advance, pro rata either for the calendar days these vessels are owned by us if the vessels are second-hand purchases, or from the date of the memorandum of agreement if the vessels are purchased directly from a shipyard. The technical management fee is adjusted annually based on the Eurozone inflation rate. Allseas is also entitled to (i) a superintendent fee of €500 per day (or $607 based on the Euro/U.S. dollar exchange rate of €1.0000:$1.2140 as of December 31, 2014), for each day in excess of five days per calendar year for which a superintendent performed on site inspection; and (ii) a lump sum fee of $15,000 for pre-delivery services, including legal fees, crewing and manning fees, manual preparation costs and other expenses related to preparing the vessel for delivery, rendered during the period from the date a memorandum of agreement is signed for the purchase of any such vessel until the delivery date. We have also entered into management agreements with Allseas relating to the supervision of each our contracted newbuilding vessels, pursuant to which Allseas is entitled to: (i) a flat fee of $375,000 per vessel for the first 12 month period commencing from the respective steel cutting date of each vessel and thereafter the flat fee will be paid on a pro rata basis until the vessels' delivery to us; (ii) a daily fee of €115.00 (or $139.61 based on the Euro/U.S. dollar exchange rate of €1.0000:$1.2140as of December 31, 2014) per vessel commencing from the date of the vessel's shipbuilding contract until we accept delivery of the respective vessel; and (iii) €500 (or $607 based on the Euro/U.S. dollar exchange rate of €1.0000:$1.2140as of December 31, 2014) per day for each day in excess of five days per calendar year for which a superintendent performed on site inspection. The term of the management agreements expires on the completion of the construction and delivery of the vessels to us and the agreements may be terminated by either party upon 30 days' advance written notice.

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Additional vessels that we may acquire in the future may be managed by Allseas or unaffiliated management companies.

Brokerage Agreement with Seacommercial

On January 2, 2015, we entered into a Sale & Purchase ("S&P") and Charter Brokerage Services Agreement with Seacommercial, a Liberian company, pursuant to agreements with each vessel owning subsidiary. Mr. Michael Bodouroglou, the Company's Chairman, President, Chief Executive Officer and Interim Chief Financial Officer, is the sole shareholder and Managing Director of Seacommercial. The services provided under these agreements include, among other things, negotiating charters for our vessels, monitoring various types of charters, monitoring the performance of our vessels under charter, locating, purchasing, financing and negotiating the purchase and sale of our vessels. These agreements have an initial term of five years and automatically extend for successive five year term, unless, in each case, at least 30 days' advance written notice of termination is given by either party. In addition, the agreements may be terminated by either party for cause, as set forth in the agreements, on at least 30 days' advance written notice. The agreements provide for (i) a fee equal to 1.25% of the gross freight, demurrage and charter hire collected from the employment of our vessels; and (ii) a fee equal to 1.00% calculated on the price as stated in the relevant memorandum of agreement for any vessel bought or sold on our behalf.

Compensation Agreements

Compensation Agreement with Allseas

We have entered into a compensation agreement with Allseas, which was amended and restated effective January 2, 2015, whereby in the event that Allseas is involuntarily terminated as the manager of our fleet, we shall compensate Allseas with a sum equal to (i) three years of management fees and commissions, based on the fleet at the time of termination; and (ii) €3.0 million (or $3.6 million based on the Euro/U.S. dollar exchange rate of €1.0000:$1.2140as of December 31, 2014), provided that Seacommercial will not receive this termination fee in the event that we terminate the agreements with Seacommercial for cause. The agreement shall continue for so long as Allseas serves as a manager of our fleet and may be terminated at any time by the mutual agreement of the parties or by either party in the event of a material breach of the terms and provisions by the other party.

Compensation Agreement with Seacommercial

On January 2, 2015, we entered into a Compensation Agreement with Seacommercial, whereby in the event that Seacommercial is involuntarily terminated as the broker of our fleet (including the termination by Seacommercial of the agreements for cause), we shall compensate Seacommercial with an amount equal to the sum of three years of charter brokerage commissions, based on the fleet at the time of termination, provided that Seacommercial will not receive this termination fee in the event that we terminate the agreements with Seacommercial for cause.

Administrative Services Agreement

We have entered into an administrative service agreement with Allseas, pursuant to which Allseas provides telecommunication services, secretarial and reception personnel and equipment, security facilities, office cleaning services and information technology services. Allseas is entitled to reimbursement on a quarterly basis of all costs and expenses incurred in connection with the provisions of its services under the agreement.

Accounting Agreement

We have entered into an accounting agreement with Allseas pursuant to which Allseas is entitled to a fee of €250,000 (or $303,500 based on the Euro/U.S. dollar exchange rate of €1.0000:$ 1.2140as of December 31, 2014) per annum, payable quarterly, for the provision of financial accounting services, and a fee of $30,000 per vessel per annum, payable quarterly, for the provision of financial reporting services.

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Agreement with Loretto

We, Allseas, and Loretto, a wholly-owned subsidiary of Allseas, have entered into a tripartite agreement, pursuant to which in the event of a capital increase, an equity offering or the issuance of common shares to a third party or third parties in the future, other than common shares issued pursuant to our equity incentive plan (as the same may be further amended, amended and restated, supplemented or otherwise modified) or any future equity incentive plans we may adopt, we have agreed to issue, at no cost to Loretto, additional common shares in an amount equal to 2% of the total number of common shares issued pursuant to such capital increase, equity offering or third party issuance, as applicable. In accordance with the terms of the agreement, any common shares to be issued to Loretto under the agreement may only be issued once the capital increase, equity offering or third party issuance giving rise to the obligation to issue shares to Loretto under the agreement has closed and any applicable contingencies, forfeiture rights or conditions precedent relating to such capital increase, equity offering or third party issuance have lapsed or expired or have been cancelled or terminated, unless otherwise agreed by the mutual agreement of the parties. Accordingly, as of the date of this annual report, we have issued to Loretto a total of 469,958of our common shares.

Executive Services Agreement

We have entered into an executive services agreement with Allseas, pursuant to which Allseas provides the services of our executive officers, which include strategy, business development, marketing, finance and other services, who report directly to our Board of Directors. Allseas is entitled to an executive services fee of €2.9 million (or $3.5 million based on the Euro/U.S. dollar exchange rate of €1.0000:$1.2140as of December 31, 2014) per annum. The agreement has an initial term of five years and automatically renews for successive five year terms unless sooner terminated. If the respective agreement is terminated by Allseas either for "good reason" or as a result of "change of control," as such terms are defined in the agreement, or terminated by us without "cause", as defined in the agreement, Allseas will be entitled to receive (i) the amount of the executive services fee payable through the "termination date," as defined in the agreement; (ii) compensation equal to three years' annual executive services fee then applicable; and (iii) an amount of our common shares equal to 5% of our then issued and outstanding common shares.

Manning Agreements

Allseas subcontracts crewing services relating to our vessels to Crewcare, a Philippines company beneficially owned by our Chairman, President, Chief Executive Officer and Interim Chief Financial Officer, Mr. Michael Bodouroglou. Each of our vessel-owning subsidiaries has entered into a manning agreement with Crewcare. Manning services are provided under the agreements in exchange for a monthly fee of $95 per seaman for all officers and crew who served on board each vessel, plus a recruitment fee of $120 per seaman, payable on a one-off basis. In addition, the agreements also provide for a fee of $30 per seaman for in-house training and a fee of $50 per seaman for extra in-house training. The fees under the manning agreements are subject to amendment on an annual basis.

$10.0 Million Private Placement

On December 24, 2012, we entered into an agreement to sell 4,901,961 newly-issued common shares to Innovation Holdings, an entity beneficially owned by our Chairman, President, Chief Executive Officer and Interim Chief Financial Officer, Mr. Michael Bodouroglou, for total consideration of $10.0 million. The transaction closed on December 24, 2012. In connection with the transaction, we were granted the right to repurchase the common shares issued to Innovation Holdings in the private placement for the same price per share at which the shares were sold, which expired without being exercised upon our execution of definitive documentation relating to the restructuring of our debt. In addition, Innovation Holdings also received customary registration rights in respect of the common shares it received in the private placement. The documentation entered into in connection with the private placement was approved by the independent members of our Board of Directors.

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Cadetship Program Agreement

On October 5, 2013, each of our ship-owning subsidiaries entered into a cadetship program agreement with Crewcare, pursuant to which Crewcare, at its own cost, is responsible for recruiting and training cadets to be assigned to the vessels. These services are being provided in exchange for a lump sum fee of $5,000 per cadet employed on board the vessel for one-year on board training. The agreement has an initial term of one year with the option to renew for one more year by mutual agreement.

Right of First Refusal

Our Chairman, President, Chief Executive Officer and Interim Chief Financial Officer, Mr. Michael Bodouroglou, has entered into a letter agreement with us which includes a provision requiring Mr. Bodouroglou to use commercially reasonable efforts to cause each company controlled by Mr. Bodouroglou to allow us to exercise a right of first refusal to acquire any drybulk carrier, after Mr. Bodouroglou or an affiliated entity of his enters into an agreement that sets forth terms upon which he or it would acquire a drybulk carrier. Pursuant to this letter agreement, Mr. Bodouroglou will notify a committee of our independent directors of any agreement that he or an affiliated entity has entered into to purchase a drybulk carrier and will provide the committee of our independent directors a 7 calendar day period in respect of a single vessel transaction, or a 14 calendar day period in respect of a multi-vessel transaction, from the date that he delivers such notice to our audit committee, within which to decide whether or not to accept the opportunity and nominate a subsidiary of ours to purchase the vessel or vessels, before Mr. Bodouroglou will accept the opportunity or offer it to any of his other affiliates. The opportunity offered to us will be on no less favorable terms than those offered to Mr. Bodouroglou and his affiliates. A committee of our independent directors will require a simple majority vote to accept or reject this offer.

Loan agreement with Box Ships

On May 27, 2011, we agreed to make available to Box Ships an unsecured loan of up to $30.0 million for the purpose of partly financing the acquisition of Box Ships' initial fleet and general corporate purposes, including meeting working capital needs, which Box Ships drew in full in May 2011. On March 11, 2013, we agreed to amend the terms of the loan agreement. Pursuant to the amended agreement, we agreed to extend the maturity of the loan for one year, from April 19, 2013 to April 19, 2014. During the remaining term of the loan, Box Ships was required to make quarterly principal installment payments in the amount of $1.0 million each, commencing on April 19, 2013, with a final balloon payment due on the maturity date. In consideration for the amendment of the loan agreement, Box Ships agreed to pay an amendment fee of $65,000 and to increase the margin from 4.0% to 5.0%. On October 18, 2013, Box Ships proceeded with the full repayment of the outstanding balance of the respective loan.

Non-Competition Agreement with Box Ships and Our Chairman, President, Chief Executive Officer and Interim Chief Financial Officer

We have entered into an agreement with Box Ships and our Chairman, President, Chief Executive Officer and Interim Chief Financial Officer, Mr. Michael Bodouroglou, reflecting, among others, for so long as (i) Mr. Bodouroglou is a director or executive officer of both our Company and Box Ships and (ii) we own at least 5% of the total issued and outstanding common shares of Box Ships, the provisions described below:

Box Ships will not, directly or indirectly, acquire or charter any drybulk carrier without our prior written consent, and we will not, directly or indirectly, acquire or charter any containership without the prior written consent of Box Ships. In addition, under the terms of the agreement, we agreed to grant Box Ships a right of first offer on any proposed sale, transfer or other disposition of any containership owned by us. Furthermore, we will also grant Box Ships a right of first refusal over any employment opportunity for a containership presented or available to us with respect to any vessel owned by us, other than our 4,800 TEU containership newbuilding, the C/V Box King, subject to the option agreement with Box Ships described below.

Notwithstanding this agreement, Box Ships may claim business opportunities that would benefit us, such as the hiring of employees, the acquisition of other businesses, or the entry into joint ventures, and in each case other than business opportunities in the drybulk shipping industry, and this could have a material adverse effect on our business, results of operations, cash flows, financial condition and ability to pay dividends.

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If we no longer beneficially own shares representing at least 5% of the total issued and outstanding common shares of Box Ships or Mr. Michael Bodouroglou is no longer a director or executive officer of both our Company and Box Ships, then our obligations under this agreement will terminate.

Vessel Option Agreement with Box Ships

We entered into an agreement with Box Ships, pursuant to which we granted Box Ships the option to acquire our initial two 4,800 TEU containerships under construction, both of which were scheduled to be delivered to us during the second quarter of 2014, by way of a novation of the relevant construction contract from us at any time prior to the applicable vessel's delivery to us, or purchase of such vessel at any time after its delivery to us, so long as the vessel is owned by us at such time. In December 2013, with the consent of Box Ships, we entered into an agreement with Ouhua to cancel one of our two 4,800 TEU containership newbuilding contracts at no cost to us, to transfer the deposit to the remaining vessel and to reduce the contract price from the original $57.5 million to $55.0 million. In addition, following Box Ships' consent, on April 25, 2014, we entered into a memorandum of agreement for the sale of the remaining 4,800 TEU containership newbuilding to an unrelated third party for $42.5 million, less 3% commission. The sale of the vessel and its transfer to the new owners was concluded on May 23, 2014. Following such sale, the vessel option agreement with Box Ships was terminated.

On April 25, 2014, we entered into a memorandum of agreement for the sale of the remaining 4,800 TEU containership newbuilding to an unrelated third party for $42.5 million, less 3% commission. In May 2014, we also agreed with the shipyard to reduce the contract price of the respective vessel by $0.8 million. The sale of the vessel and its transfer to the new owners was concluded on May 23, 2014.

Registration Rights Agreements

On April 19, 2011, we entered into a registration rights agreement with Box Ships and Neige International Inc., or Neige International, a company controlled by our Chairman, President, Chief Executive Officer and Interim Chief Financial Officer, Mr. Michael Bodouroglou, as nominee for Proplous Navigation S.A., or Proplous Navigation, a company also controlled by Mr. Bodouroglou, pursuant to which Box Ships granted us and Neige International, and our affiliates or transferees, certain registration rights with respect to our common shares of Box Ships. Pursuant to the agreement, we and Neige International, and our affiliates and transferees, have the right, subject to certain terms and conditions, to require Box Ships, on up to three separate occasions following April 19, 2012, the anniversary of the closing of the initial public offering of Box Ships, to register under the Securities Act, common shares of Box Ships held by us and Neige International, or our affiliates or transferees, for offer and sale to the public (including by way of underwritten public offering) and incidental or "piggyback" rights permitting participation by Box Ships in certain registrations of its common shares.

In addition, in connection with the private placement to Innovation Holdings that closed on December 24, 2012, we entered into a registration rights agreement, dated as of December 24, 2012, with Innovation Holdings, pursuant to which we granted certain customary registration rights to Innovation Holdings in respect of the common shares issued and sold to Innovation Holdings in the private placement. Under the registration rights agreement, Innovation Holdings, or its transferees, have the right, subject to certain terms and conditions, to require us to register under the Securities Act for offer and sale to the public, including by way of underwritten public offering, the common shares issued and sold to Innovation Holdings pursuant to the purchase agreement we entered into with Innovation Holdings in connection with the private placement.

Lease of Office Space

We have entered into a rental agreement to lease office space in Athens, Greece, with Granitis Glyfada Real Estate Ltd., a company beneficially owned by our Chairman, President, Chief Executive Officer and Interim Chief Financial Officer. The term of the lease is for five years, expiring on September 30, 2017. Effective October 1, 2012, the monthly rental was €3,000 (or $3,642 based on the Euro/U.S. dollar exchange rate of €1.0000:$1.2140as of December 31, 2014), plus 3.6% tax, and thereafter would be adjusted annually for inflation increases in accordance with the official Greek inflation rate.

For more information on our related party transactions, refer to Note 4 to our consolidated financial statements included at the end of this annual report.

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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

To our knowledge, we are not currently a party to any material lawsuit that, if adversely determined, would have a material adverse effect on our financial position, results of operations or liquidity. As such, we do not believe that pending legal proceedings, taken as a whole, should have any significant impact on our financial statements. From time to time in the future, we may be subject to legal proceedings and claims in the ordinary course of business, principally personal injury and property casualty claims. Those claims, even if lacking merit, could result in the expenditure of significant financial and managerial resources. We have not been involved in any legal proceedings which may have, or have had a significant effect on our financial position, results of operations or liquidity, and we are not aware of any proceedings that are pending or threatened which may have a significant effect on our financial position, results of operations or liquidity.

Dividend Policy

In light of the continued decline of charter rates and the related decline in asset values in the drybulk market, as well as a highly challenged financing environment, our Board of Directors, beginning with the first quarter of 2011, has suspended payment of our common share quarterly dividend. Our dividend policy will be assessed by the Board of Directors from time to time. The suspension allows us to retain cash and increase our liquidity so we are in a better position to capitalize on investment opportunities during the weakened market conditions. Until market conditions improve, it is unlikely that we will reinstate the payment of dividends. In addition, other external factors, such as our lenders imposing restrictions on our ability to pay dividends under the terms of our debt agreements, may limit our ability to pay dividends.

Our previous dividend policy was to declare and pay quarterly dividends to the holders of our common shares in March, May, August and November of each year in amounts substantially equal to our available cash flow from operations during the previous quarter, less cash expenses for that quarter (principally vessel operating expenses and interest expense) and any reserves our Board of Directors determined we should maintain for reinvestment in our business to cover, among other things, dry-docking, intermediate and special surveys, liabilities and other obligations, interest expense and debt amortization, acquisitions of additional assets and working capital.

The declaration and payment of any dividend is subject to the discretion of our Board of Directors. The timing and amount of future dividend payments, if any, will depend on our earnings, financial condition, cash requirements and availability, fleet renewal and expansion, the restrictions in our debt agreements, the provisions of Marshall Islands law affecting the payment of dividends and other factors.

Because we are a holding company with no material assets other than the shares of our subsidiaries, which will directly own the vessels in our fleet, our ability to pay dividends will depend on the earnings and cash flow of our subsidiaries and their ability to pay dividends to us. We cannot assure you that, after the expiration or termination of our charters, we will have any sources of income from which dividends may be paid.

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In addition, certain of our other loan and credit facilities restrict the amount of dividends we may pay to $0.50 per share per annum and limit the amount of quarterly dividends we may pay to 100% of our net income for the immediately preceding financial quarter. We are also required to maintain minimum liquidity after payment of dividends equal to the greater of the next six months' debt service, 8% of our total financial indebtedness or $1.0 million per vessel. Furthermore, according to the supplemental agreement we entered into with Unicredit on March 27, 2015, we are not permitted to declare or pay any dividends until all the deferred amounts of the facility's repayment installments have been repaid in full. See Note 9 to our consolidated financial statements included at the end of this annual report.

Further, we may not be permitted to pay dividends if we are in breach of the covenants contained in our debt agreements. The terms of our debt agreements contain a number of financial covenants and general covenants that require us to, among other things, maintain security cover ratios, minimum cash balances and insurance including, but not limited to, hull and machinery insurance in an amount at least equal to the fair market value of the vessels financed, as determined by third party valuations. We may not be permitted to pay dividends in any amount under our debt agreements if we are in default of any of these covenants or if we do not meet specified debt coverage ratios and minimum charter rate levels.

We believe that, under current law any future dividend payments we make from our then current and accumulated earnings and profits, as determined under U.S. federal income tax principles, would constitute "qualified dividend income" and, as a consequence, non-corporate U.S. shareholders would generally be subject to the same preferential U.S. federal income tax rates applicable to long-term capital gains with respect to such dividend payments. Distributions in excess of our earnings and profits, as so calculated, will be treated first as a non-taxable return of capital to the extent of a U.S. shareholder's tax basis in its common shares on a dollar-for-dollar basis and thereafter as a capital gain. Please see "Item 10. Additional Information—E. Taxation" for additional information relating to the tax treatment of our dividend payments.

B.Significant Changes

There have been no significant changes since the date of the annual consolidated financial statements included in this annual report.

Item 9.Listing Details

Our common shares commenced trading on the NASDAQ Global Market on August 9, 2007 under the symbol "PRGN." On March 24, 2010, our common shares stopped trading on the NASDAQ Global Market and commenced trading on the NYSE under the symbol "PRGN". On April 19, 2013, our common shares stopped trading on the NYSE and commenced trading on the NASDAQ Global Market under the symbol "PRGN." In addition, our Notes started trading on the NASDAQ on September 5, 2014 under the ticker symbol "PRGNL". The following table sets forth the high and low closing prices for each of the periods indicated for our shares of common stock, as adjusted for the 10-for-1 reverse stock split effective November 5, 2012.

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	High		Low
For the year ended December 31,
2010	$	51.60	$	33.90
2011	$	34.40	$	5.90
2012	$	9.50	$	1.97
2013	$	9.11	$	2.56
2014	$	8.09	$	2.31
	High		Low
For the quarter ended
March 31, 2013	$	5.44	$	2.56
June 30, 2013	$	5.35	$	3.54
September 30, 2013	$	9.11	$	4.00
December 31, 2013	$	7.51	$	4.58
March 31, 2014	$	8.09	$	6.03
June 30, 2014	$	6.90	$	4.96
September 30, 2014	$	5.96	$	3.99
December 31, 2014	$	3.81	$	2.31
March 31, 2015	$	2.66	$	0.95
	High		Low
For the month ended
October 2014	$	3.71	$	2.82
November 2014	$	3.81	$	3.24
December 2014	$	2.99	$	2.31
January 2015	$	2.66	$	1.65
February 2015	$	1.95	$	1.78
March 2015	$	1.78	$	0.95
April 2015 (1)	$	0.90	$	0.82

(1) Through and including April 15, 2015.

Item 10.Additional Information

A. Share Capital

Not applicable.

B. Memorandum and articles of association

Our Amended and Restated Articles of Incorporation were filed as Exhibit 1 to our Report on Form 6-K filed with the SEC on April 21, 2010 and incorporated by reference into Exhibit 3.1 to our Registration Statement on Form F-3 (Registration No. 333-164370) declared effective by the SEC on February 5, 2010. We filed Articles of Amendment to our amended and restated articles of incorporation on Form 6-K filed with the SEC on November 6, 2012, which were incorporated by reference into our Registration Statement on Form F-3 (Registration No. 333-164370), pursuant to which we effectuated a 10-for-1 reverse stock split of our issued and outstanding common shares, par value $0.001 per share, effective as of the close of trading on the NYSE on November 5, 2012. Our common shares commenced trading on the NYSE on a split-adjusted basis upon the open of trading on November 6, 2012. The reverse stock split was approved by shareholders at our annual general meeting of shareholders held on October 24, 2012. The reverse stock split reduced the number of our issued and outstanding common shares from approximately 61.0 million to approximately 6.1 million and affected all issued and outstanding common shares, as well as common shares underlying stock options outstanding immediately prior to the effectiveness of the reverse stock split. The number of our authorized common shares was not affected by the reverse split. No fractional shares were issued in connection with the reverse stock split.

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Our Amended and Restated Bylaws were filed as Exhibit 99.1 to our Report on Form 6-K filed with the SEC on August 15, 2007 and incorporated by reference into Exhibit 3.2 to our Registration Statement on Form F-1 (Registration No. 333-143481) declared effective by the SEC on July 16, 2007. The information contained in these exhibits is incorporated by reference herein.

A description of the material terms of our Amended and Restated Articles of Incorporation and Amended and Restated Bylaws is included in the section entitled "Description of Capital Stock" in our Registration Statement on Form F-3 (Registration No. 333-152979) and is incorporated by reference herein, provided that since the date of that Registration Statement, certain information regarding our authorized capitalization, stockholder rights agreement and the listing of our common shares has been amended as follows:

Authorized Capitalization

Under our amended and restated articles of incorporation, our authorized capital stock consists of 780,000,000 registered shares of stock, of which:

· 750,000,000 shares are designated as Class A common stock, par value $0.001 per share;

· 5,000,000 shares are designated as Class B Common stock, par value $0.001 per share;

· 25,000,000 shares are designated as preferred stock, par value $0.001 per share, of which 1,000,000 shares are designated Series A Participating Preferred Stock in connection with the adoption of our Stockholders Rights Agreement described under "—Stockholders Rights Agreement."

As of the date of this annual report, we had issued and outstanding 24,909,142 common shares.

Stockholder Rights Plan

We adopted a stockholder rights plan on January 4, 2008, and declared a dividend distribution of one preferred stock purchase right to purchase one one-thousandth of our Series A Participating Preferred Stock for each outstanding share of our common stock, par value $0.001 per share to shareholders of record at the close of business on February 1, 2008. Each right entitles the registered holder, upon the occurrence of certain events, to purchase from us one one-thousandth of a share of Series A Participating Preferred Stock at an exercise price of $75, subject to adjustment, or additional common shares. The rights will expire on the earliest of (i) February 1, 2018 or (ii) redemption or exchange of the rights. The plan was designed to enable us to protect shareholder interests in the event that an unsolicited attempt is made for a business combination with or takeover of us. We believe that the shareholder rights plan should enhance the Board of Directors' negotiating power on behalf of shareholders in the event of a coercive offer or proposal. We are not currently aware of any such offers or proposals and adopted the plan as a matter of prudent corporate governance. On December 16, 2009, we amended the plan to exclude Innovation Holdings, Michael Bodouroglou, and their affiliated entities, from the definition of "acquiring person."

Listing

Our common shares are listed on the NASDAQ Global Market under the symbol "PRGN."

C. Material Contracts

We refer you to "Item 5. Operating and Financial Review and Prospects—B. Liquidity and capital resources—Loan and Credit Facilities" and "Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions" for a discussion of our material agreements that we have entered into during the two-year period immediately preceding the date of this annual report.

Other than the agreements discussed in the aforementioned sections of this annual report, we have no material contracts, other than contracts entered into in the ordinary course of business, to which we or any member of the group is a party.

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D. Exchange Controls

Under Marshall Islands law, there are currently no restrictions on the export or import of capital, including foreign exchange controls or restrictions that affect the remittance of dividends, interest or other payments to non-resident holders of our common stock.

E. Taxation

MATERIAL U.S. AND MARSHALL ISLANDS INCOME TAX CONSIDERATIONS

The following is a discussion of the material U.S. and Marshall Islands income tax considerations applicable to us, and to a U.S. Holder and a Non-U.S. Holder, each as defined below, of the ownership of our common shares. This discussion does not purport to deal with the tax consequences of owning our common shares to all categories of shareholders, some of which, such as dealers in securities, investors whose functional currency is not the U.S. dollar and investors that own, actually or under applicable constructive ownership rules, 10% or more of our common shares, may be subject to special rules. This discussion deals only with shareholders who hold our common shares as capital assets. Shareholders are encouraged to consult their own tax advisors concerning the overall tax consequences arising in their particular situation under U.S. federal, state, local or foreign law of the ownership of our common shares.

Marshall Islands Tax Considerations

We are incorporated in the Republic of the Marshall Islands. Under current Marshall Islands law, we are not subject to tax on income or capital gains, and no Marshall Islands withholding tax will be imposed upon payments of dividends by us to our shareholders.

U.S. Federal Income Tax Considerations

The following are the material U.S. federal income tax consequences of our activities and to U.S. Holders and Non-U.S. Holders, each as defined below, of the ownership of our common shares. The following discussion of U.S. federal income tax matters is based on the Code, judicial decisions, administrative pronouncements, and existing and proposed regulations issued by the U.S. Department of the Treasury, or the Treasury Regulations, all of which are subject to change, possibly with retroactive effect. The discussion below is based, in part, on the description of our business as provided above and assumes that we conduct our business as described therein. References in the following discussion to the "Company," "we" and "us" are to Paragon Shipping Inc. and its subsidiaries on a consolidated basis.

U.S. Federal Income Taxation of the 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 tax in respect of any income that is derived from (i) the use of vessels, (ii) the hiring or leasing of vessels for use on a time, voyage or bareboat charter basis, (iii) the participation in a pool, partnership, strategic alliance, joint operating agreement, code-sharing arrangements or other joint venture it directly or indirectly owns or participates in that generates such income, or (iv) the performance of services directly related to those uses, which we refer to collectively as "shipping income," to the extent that such shipping income is derived from sources within the United States. For these purposes, 50% of shipping income that is attributable to transportation that begins or ends, but that does not both begin and end, in the United States constitutes income from sources within the United States, which we refer to as "U.S.-source shipping income."

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Shipping income attributable to transportation that both begins and ends in the United States is considered to be 100% from sources within the United States. We are not permitted by law to engage in transportation that produces income which is considered to be 100% from sources within the United States.

Shipping income attributable to transportation exclusively between non-U.S. ports will be considered to be 100% derived from sources outside the United States. Shipping income derived from sources outside the United States will not be subject to any U.S. federal income tax.

In the absence of exemption from tax under Section 883, our gross U.S.-source shipping income would be subject to a 4% tax imposed without allowance for deductions, as described below.

Exemption of Operating Income from U.S. Federal Income Taxation

Under Section 883, we will be exempt from U.S. federal income taxation on our U.S.-source shipping income if:

(i) We are organized in a "qualified foreign country," which is one that grants an equivalent exemption from taxation to corporations organized in the United States in respect of the shipping income for which exemption is being claimed under Section 883, which we refer to as the Country of Organization Requirement; and

(ii) We can satisfy any one of the following two stock ownership requirements for more than half the days during the taxable year:

· one or more classes of our stock are "primarily and regularly" traded on an established securities market located in the United States or a "qualified foreign country," which we refer to as the Publicly-Traded Test; or

· more than 50% of our stock, in terms of value, are beneficially owned by any combination of one or more individuals who are residents of a "qualified foreign country" or foreign corporations that satisfy the Country of Organization requirement and the publicly-traded test, which we refer to as the 50% Ownership Test.

The U.S. Treasury Department has recognized the Marshall Islands and Liberia, the jurisdictions where we and our ship-owning subsidiaries are incorporated, as granting an "equivalent exemption" to U.S. corporations. Accordingly, we and our ship-owning subsidiaries satisfy the Country of Organization Requirement. Therefore, we will be exempt from U.S. federal income taxation with respect to our U.S.-source shipping income if we satisfy either the 50% Ownership Test or the Publicly-Traded Test.

We did not satisfy the 50% Ownership Test for the 2014 Taxable Year. Our ability to satisfy the Publicly-Traded Test is discussed below. The Treasury Regulations under Section 883 provide, in pertinent part, that stock of a foreign corporation will be considered to be "primarily traded" on an established securities 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 country exceeds the number of shares in each such class that are traded during that year on established securities markets in any other single country. During 2014, our common shares were "primarily traded" on the NASDAQ.

Under the same Treasury Regulations, stock of a foreign corporation will be considered to be "regularly traded" on an established securities market if one or more classes of its stock representing more than 50% of its outstanding shares, by total combined voting power of all classes of stock entitled to vote and total value, is listed on the market, which we refer to as the "listing requirement." Since our common shares, which are our sole class of issued and outstanding shares, are listed on the NASDAQ, we will satisfy the listing requirement.

The Treasury Regulations further require that with respect to each class of stock relied upon to meet the listing requirement: (i) such class of the stock is traded on the market, other than in minimal quantities, on at least 60 days during the taxable year or 1/6 of the days in a short taxable year, which we refer to as the "trading frequency test" and (ii) the aggregate number of shares of such class of stock traded on such market is at least 10% of the average number of shares of such class of stock outstanding during such year or as appropriately adjusted in the case of a short taxable year, which we refer to as the "trading volume test." We believe our common shares will satisfy the trading frequency and trading volume tests. Even if this were not the case, the Treasury Regulations provide that the trading frequency and trading volume tests will be deemed satisfied by a class of stock if, as we expect to be the case with common shares, such class of stock is traded on an established securities market in the United States and such class of stock is regularly quoted by dealers making a market in such stock.

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Notwithstanding the foregoing, the Treasury Regulations provide, in pertinent part, that our common shares will not be considered to be "regularly traded" on an established securities market for any taxable year in which 50% or more of our outstanding common shares are owned, actually or constructively under specified stock attribution rules, on more than half the days during the taxable year by persons who each own 5% or more of our common shares, which we refer to as the "5% Override Rule."

For purposes of determining the persons who own 5% or more of our outstanding common shares, or "5% Shareholders," the Treasury Regulations permit us to rely on Schedule 13G and Schedule 13D filings with the SEC to identify persons who have a 5% or more beneficial interest in our common shares. The Treasury Regulations further provide that an investment company which is registered under the Investment Company Act of 1940, as amended, will not be treated as a 5% Shareholder for such purposes.

In the event the 5% Override Rule is triggered, the Treasury Regulations provide that the 5% Override Rule will nevertheless not apply if we can establish, in accordance with specified ownership certification procedures, that within the group of 5% Shareholders there are sufficient "qualified shareholders" for purposes of Section 883 to preclude "non-qualified shareholders" in such group from owning, actually or constructively, 50% or more of our common shares for more than half the number of days during the taxable year.

We believe that we satisfied the Publicly-Traded Test for the 2014 Taxable Year and were not subject to the 5% Override Rule. Therefore, we believe that we were exempt from U.S. federal income tax on our U.S. source shipping income for the 2014 Taxable Year. However, there is no assurance that we will continue to qualify for the benefits of Section 883 for any future taxable year. For example, there is a risk that we could no longer qualify for the Section 883 exemption for a particular taxable year if 5% Shareholders were to own 50% or more of our outstanding common shares on more than half the days of the taxable year. Under these circumstances, we would be subject to the 5% Override Rule and we would not qualify for the Section 883 exemption unless we could establish that our shareholding during the taxable year was such that non-qualified 5% Shareholders did not own 50% or more of our common shares on more than half the days of the taxable year. Under the Treasury Regulations, we would have to satisfy certain substantiation requirements regarding the identity of our shareholders. These requirements are onerous and there is no assurance that we would be able to satisfy them.

Taxation in Absence of Exemption under Section 883

To the extent the tax exemption of Section 883 is unavailable, our U.S.-source shipping income, to the extent not considered to be "effectively connected" with the conduct of a U.S. trade or business, as described below, would be subject to a 4% tax imposed by Section 887 of the Code on a gross basis, without the benefit of deductions, which we refer to as the "4% gross basis tax regime." Since under the sourcing rules described above, no more than 50% of our shipping income would be treated U.S.-source shipping income, the maximum effective rate of U.S. federal income tax on our shipping income would never exceed 2% under the 4% gross basis tax regime. In the year ended December 31, 2014, approximately 21.2% of our shipping income was attributable to the transportation of cargoes either to or from a U.S. port and approximately 10.6% of our shipping income was U.S.-source shipping income. In the absence of exemption from tax under Section 883, we would have been subject to a 4% tax on our gross U.S.-source shipping income equal to approximately $0.2 million for the year ended December 31, 2014.

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To the extent that the exemption under Section 883 is 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, net of applicable deductions, would be subject to the U.S. federal corporate income tax currently imposed at rates of up to 35%. In addition, we may be subject to the 30% "branch profits" tax on earnings "effectively connected" with the conduct of such trade or business, as determined after allowance for certain adjustments, and on certain interest paid or deemed paid attributable to the conduct of our U.S. trade or business. However, under all of our charter party agreements, these taxes would be recovered from the charterers.

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 vessel that follows a published schedule with repeated sailings at regular intervals between the same points for voyages that begin or end in the United States.

We do not intend to have any vessel operating to or from the United States on a regularly scheduled basis. Based on the foregoing and on the expected mode of our shipping operations and other activities, we 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, we will not be subject to U.S. federal income tax with respect to gain realized on a sale of a vessel, provided the sale is considered to occur outside of the United States under U.S. federal income tax principles. In general, a sale of a vessel will be considered to occur outside of the United States for this purpose if title to the vessel, and risk of loss with respect to the vessel, pass to the buyer outside of the United States. It is expected that any sale of a vessel by us will be considered to occur outside of the United States.

U.S. Federal Income Taxation of U.S. Holders

As used herein, the term "U.S. Holder" means a beneficial owner of our common shares 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 the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust.

If a partnership holds our common shares, the tax treatment of a partner will generally depend upon the status of the partner and upon the activities of the partnership. If you are a partner in a partnership holding our common shares, you are encouraged to consult your tax advisor.

Distributions

Subject to the discussion of PFICs below, any distributions made by us with respect to our common shares to a U.S. Holder will generally constitute dividends, which may be taxable as ordinary income or "qualified dividend income" as described in more detail below, to the extent of our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Distributions in excess of our earnings and profits will be treated first as a nontaxable return of capital to the extent of the U.S. Holder's tax basis in its common shares on a dollar-for-dollar basis, and thereafter as capital gain. Because we are not a U.S. corporation, U.S. Holders that are corporations will not be entitled to claim a dividends received deduction with respect to any distributions they receive from us. Dividends paid with respect to our common shares will generally be treated as "passive category income" or, in the case of certain types of U.S. Holders, "general category income" for purposes of computing allowable foreign tax credits for U.S. foreign tax credit purposes.

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Dividends paid on our common shares to a U.S. Holder who is an individual, trust or estate, or a U.S. Individual Holder, will generally be treated as "qualified dividend income" that is taxable to such U.S. Individual Holder at preferential tax rates provided that: (1) we are not a PFIC for the taxable year during which the dividend is paid or the immediately preceding taxable year (which we do not believe we are, have been or will be); (2) the common shares are readily tradable on an established securities market in the United States (such as the NASDAQ, on which our common shares are listed), and (3) the U.S. Individual Holder has owned the common shares for more than 60 days in the 121-day period beginning 60 days before the date on which the common shares become ex-dividend. There is no assurance that any dividends paid on our common shares will be eligible for these preferential rates in the hands of a U.S. Individual Holder.

Special rules may apply to any "extraordinary dividend," generally a dividend in an amount which is equal to or in excess of 10% of a shareholder's adjusted basis (or fair market value in certain circumstances) in its common shares. If we pay an "extraordinary dividend" on our common shares and such dividend is treated as "qualified dividend income," then any loss derived by a U.S. Individual Holder from the sale or exchange of such common shares will be treated as long-term capital loss to the extent of such dividend.

Sale, Exchange or other Disposition of Our Common Shares

Assuming we do not constitute a PFIC for any taxable year, a U.S. Holder generally will recognize taxable gain or loss upon a sale, exchange or other disposition of our common shares in an amount equal to the difference between the amount realized by the U.S. Holder from such sale, exchange or other disposition and the U.S. Holder's tax basis in such common shares. Such gain or loss will be treated as long-term capital gain or loss if the U.S. Holder's holding period in such common shares is greater than one year at the time of the sale, exchange or other disposition. Otherwise, such gain or loss will be treated as short-term capital gain or loss. 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. Individual Holder's ability to deduct capital losses is subject to certain limitations.

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 income tax purposes. In general, we will be treated as a PFIC with respect to a U.S. Holder if, for any taxable year in which such U.S. Holder held our common shares, either:

· at least 75% of our gross income for such taxable year consists of passive income (e.g., dividends, interest, capital gains, and rents derived other than in the active conduct of a rental business); or

· at least 50% of the average value of the assets held by the corporation during such taxable year produce, or are held for the production of, passive income (including cash).

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, by us in connection with the performance of services would not constitute passive income. By contrast, rental income would generally constitute passive income unless we were treated under specific rules as deriving our rental income in the active conduct of a trade or business.

Based on our current operations and future projections, we do not believe that we have been or are, nor do we expect to become, a PFIC with respect to any taxable year. Although there is no legal authority directly on point, and we are not relying upon an opinion of counsel on this issue, our belief is based principally on the position that, for purposes of determining whether we are a PFIC, the gross income we derive, or are deemed to derive, from the time chartering and voyage chartering activities of our wholly-owned subsidiaries should constitute services income, rather than rental income. Correspondingly, such income should not constitute passive income, and the assets that we or our wholly-owned subsidiaries own and operate in connection with the production of such income, in particular, the vessels, should not constitute assets that produce, or are held for the production of, passive income. We believe there is substantial legal authority supporting our position consisting of case law and IRS pronouncements concerning the characterization of income derived from time charters and voyage charters as services income for other tax purposes. However, there is also authority which characterizes time charter income as rental income rather than services income for other tax purposes. In the absence of any legal authority specifically relating to the statutory provisions governing PFICs, the IRS or a court could disagree with our position. In addition, although we intend to conduct our affairs in a manner to avoid being classified as a PFIC with respect to any taxable year, we cannot assure you that the nature of our operations will not change in the future.

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As discussed more fully below, if we were to be treated as a PFIC for any taxable year, a U.S. Holder would be subject to different taxation rules depending on whether the U.S. Holder makes an election to treat us as a "qualified electing fund," which election we refer to as a "QEF election." As an alternative to making a QEF election, a U.S. Holder could elect to mark our common shares to market, which election we refer to as the "mark-to-market election," as discussed below. In addition, for taxable years beginning on or after March 18, 2010, a U.S. Holder of shares in a PFIC will be required to file an annual information return containing information regarding the PFIC as required by applicable Treasury Regulations.

Under specified constructive ownership rules, if we are treated as a PFIC, then a U.S. Holder will be treated as owning its proportionate share of the stock of any our subsidiaries that are treated as PFICs. Such a U.S. Holder would be permitted to make a QEF election in respect of any such PFIC subsidiary, so long as we timely provide the information necessary for such election, which we currently intend to do in such circumstances. However, such a U.S. Holder would not be permitted to make a mark-to-market election in respect of such U.S. Holder's indirect interest in any such PFIC subsidiary. The application of the PFIC rules is complicated and U.S. Holders are encouraged to consult with their tax advisors regarding the application of such rules in their particular circumstances.

Taxation of U.S. Holders Making a Timely QEF Election

If a U.S. Holder makes a timely QEF election, which U.S. Holder we refer to as an Electing Holder, the Electing Holder must report each year for U.S. federal income tax purposes its pro rata share of our ordinary earnings and net capital gain, if any, for our taxable year that ends with or within the taxable year of such Electing Holder, regardless of whether or not distributions were received from us by the Electing Holder. The Electing Holder's adjusted tax basis in the common shares would be increased to reflect taxed but undistributed earnings and profits. Distributions of earnings and profits previously taxed will result in a corresponding reduction in the adjusted tax basis in the common shares and will not be taxed again once distributed. An Electing Holder would generally recognize capital gain or loss on the sale, exchange or other disposition of our common shares. A U.S. Holder would make a QEF election with respect to any taxable year that we are a PFIC by filing IRS Form 8621 with its U.S. federal income tax return. If we were aware that we were to be treated as a PFIC for any taxable year, we would provide each U.S. Holder with all necessary information in order to make the QEF election described above. A U.S. Holder who is treated as constructively owning shares in any of our subsidiaries which are treated as PFICs would be required to make a separate QEF election with respect to each such PFIC subsidiary.

Taxation of U.S. Holders Making a Mark-to-Market Election

Alternatively, if we were to be treated as a PFIC for any taxable year and our common shares are treated as "marketable stock," as we believe is the case, a U.S. Holder would be allowed to make a mark-to-market election with respect to our common shares, provided the U.S. Holder completes and files IRS Form 8621 in accordance with the relevant instructions and related Treasury Regulations. If that election is made, the U.S. Holder generally would include as ordinary income in each taxable year the excess, if any, of the fair market value of the common shares at the end of the taxable year over such U.S. Holder's adjusted tax basis in the common shares. The U.S. Holder would also be permitted an ordinary loss in respect of the excess, if any, of the U.S. Holder's adjusted tax basis in the common shares over its fair market value at the end of the taxable year, but only to the extent of the net amount previously included in income as a result of the mark-to-market election. A U.S. Holder's tax basis in its common shares would be adjusted to reflect any such income or loss amounts. Gain realized on the sale, exchange or other disposition of our common shares would be treated as ordinary income, and any loss realized on the sale, exchange or other disposition of the common shares would be treated as ordinary loss to the extent that such loss does not exceed the net mark-to-market gains previously included by the U.S. Holder. A mark-to-market election would not be available for any of our subsidiaries that are treated as PFICs.

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Taxation of U.S. Holders Not Making a Timely QEF or Mark-to-Market Election

Finally, if we were to be treated as a PFIC for any taxable year, a U.S. Holder who does not make either a QEF election or a mark-to-market election for such taxable year, whom we refer to as a Non-Electing Holder, would be subject to special rules with respect to: (1) any excess distribution (i.e., the portion of any distributions received by the Non-Electing Holder on our common shares in a taxable year in excess of 125% of the average annual distributions received by such Non-Electing Holder in the three preceding taxable years, or, if shorter, the Non-Electing Holder's holding period for the common shares), and (2) any gain realized on the sale, exchange or other disposition of our common shares. Under these special rules:

· the excess distribution or gain would be allocated ratably over the Non-Electing Holders' aggregate holding period for the common shares;

· the amount allocated to the current taxable year and any taxable year before we became a PFIC would be taxed as ordinary income; and

· the amount allocated to each of the other taxable years would be subject to U.S. federal income tax at the highest rate of tax in effect for the applicable class of taxpayer for that year, and an interest charge for the deemed tax deferral benefit would be imposed with respect to the resulting tax attributable to each such other taxable year.

These penalties would not apply to a pension or profit sharing trust or other tax-exempt organization that did not borrow funds or otherwise utilize leverage in connection with its acquisition of our common shares. If a Non-Electing Holder who is an individual dies while owning our common shares, such Non-Electing Holder's successor generally would not receive a step-up in tax basis with respect to such common shares.

U.S. Federal Income Taxation of Non-U.S. Holders

A beneficial owner of common shares that is not a U.S. Holder (other than a foreign partnership) is referred to herein as a Non-U.S. Holder.

Dividends on Common Shares

A Non-U.S. Holder generally will not be subject to U.S. federal income or withholding tax on dividends received from us with respect to our common shares, unless that income is "effectively connected" with such Non-U.S. Holder's conduct of a trade or business 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, such income is subject to U.S. federal income tax only if it is attributable to a permanent establishment maintained by such Non-U.S. Holder in the United States.

Sale, Exchange or Other Disposition of Our Common Shares

Non-U.S. Holders generally will not be subject to U.S. federal income or withholding tax on any gain realized upon the sale, exchange or other disposition of our common shares, unless:

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· the gain is "effectively connected" with the Non-U.S. Holder's conduct of a trade or business 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 that gain, that gain is subject to U.S. federal income tax only if attributable to a permanent establishment maintained by such Non-U.S. Holder in the United States; or

· the Non-U.S. Holder is an individual who is present in the United States for 183 days or more during the taxable year of disposition and other conditions are met.

If the Non-U.S. Holder is engaged in a U.S. trade or business for U.S. federal income tax purposes, the income from the common shares, including dividends and any gain from the sale, exchange or other disposition of the common shares that is "effectively connected" with the conduct of that U.S. trade or business will generally be subject to regular U.S. federal income tax in the same manner as discussed in the previous section relating to the U.S. federal income taxation of U.S. Holders. In addition, in the case of a corporate Non-U.S. Holder, earnings and profits attributable to such "effectively connected" income, with certain adjustments, may be subject to an additional "branch profits" tax at a rate of 30%, or at a lower rate as may be specified by an applicable U.S. income tax treaty.

Backup Withholding and Information Reporting

In general, dividend payments, or other taxable distributions, made within the United States will be subject to information reporting requirements. Such payments will also be subject to "backup withholding" if paid to a non-corporate U.S. Holder who:

· fails to provide an accurate taxpayer identification number;

· is notified by the IRS that it has failed to report all interest or dividends required to be shown on its U.S. federal income tax returns; or

· in certain circumstances, fails to comply with applicable certification requirements.

Non-U.S. Holders may be required to establish their exemption from information reporting and backup withholding by certifying their status on an appropriate IRS Form W-8.

If a shareholder sells its common shares to or through a U.S. office or broker, the payment of the proceeds is subject to both U.S. backup withholding and information reporting unless the shareholder certifies under penalties of perjury that it is a non-U.S. person or the shareholder otherwise establishes an exemption. If the shareholder sells its common shares through a non-U.S. office of a non-U.S. broker and the sales proceeds are paid to the shareholder outside the United States, then information reporting and backup withholding generally will not apply to that payment. However, U.S. information reporting requirements, but not backup withholding, will apply to a payment of sales proceeds, even if that payment is made to the shareholder outside the United States, if the shareholder sells its common shares through a non-U.S. office of a broker that is a U.S. person or has certain other contacts with the United States.

Backup withholding is not an additional tax. Rather, a taxpayer generally may obtain a refund of any amounts withheld under backup withholding rules that exceed the taxpayer's U.S. federal income tax liability by filing a refund claim with the IRS.

Pursuant to recently enacted legislation, individuals who are U.S. Holders (and to the extent specified in applicable Treasury regulations, certain individuals who are Non-U.S. Holders and certain U.S. entities) who hold "specified foreign financial assets" (as defined in Section 6038D of the Code) are required to file IRS Form 8938 with information relating to the asset for each taxable year in which the aggregate value of all such assets exceeds $75,000 at any time during the taxable year or $50,000 on the last day of the taxable year (or such higher dollar amount as prescribed by applicable Treasury regulations). Specified foreign financial assets would include, among other assets, the common shares, unless the shares held through an account maintained with a U.S. financial institution. Substantial penalties apply to any failure to timely file IRS Form 8938, unless the failure is shown to be due to reasonable cause and not due to willful neglect. Additionally, in the event an individual U.S. Holder (and to the extent specified in applicable Treasury regulations, an individual Non-U.S. Holder or a U.S. entity) that is required to file IRS Form 8938 does not file such form, the statute of limitations on the assessment and collection of U.S. federal income taxes of such holder for the related tax year may not close until three years after the date that the required information is filed. U.S. Holders (including U.S. entities) and Non-U.S. Holders are encouraged consult their own tax advisors regarding their reporting obligations under this legislation.

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Other Taxes

We encourage each shareholder to consult with its own tax advisor as to the particular tax consequences to it of holding and disposing of our common shares, including the applicability of any state, local or foreign tax laws and any proposed changes in applicable law.

F. Dividends and paying agents

Not applicable.

G. Statement by experts

Not applicable.

H. Documents on display

We file reports and other information with the SEC. These materials, including this annual report and the accompanying exhibits, may be inspected and copied at the public reference facilities maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549, or from the SEC's website http://www.sec.gov. You may obtain information on the operation of the public reference room by calling 1 (800) SEC-0330 and you may obtain copies at prescribed rates. Our filings are also available on our website at http://www.paragonship.com. This web address is provided as an inactive textual reference only. Information on our website does not constitute a part of this annual report.

I. Subsidiary information

Not applicable.

Item 11.Quantitative and Qualitative Disclosures about Market Risk

Concentration of Credit Risk

Financial instruments, which potentially subject us to significant concentrations of credit risk, consist principally of trade accounts receivable, amounts due from related parties and cash and cash equivalents. We limit our credit risk with accounts receivable by performing ongoing credit evaluations of our customers' financial condition and generally do not require collateral for our trade accounts receivable. In addition, we also limit our exposure by diversifying among customers. The amounts due from related parties mainly relate to advance payments to Allseas to cover working capital equal to one month's worth of estimated operating expenses. We place our cash and cash equivalents with high credit quality financial institutions. We are exposed to credit risk in the event of non-performance by counterparties to derivative instruments. However, we limit our exposure by diversifying among counterparties considering their credit ratings.

Interest Rates

The international drybulk and containership industries are capital intensive industries, requiring significant amounts of investment. Much of this investment is provided in the form of long term debt. Our debt usually contains interest rates that fluctuate with London Inter-Bank Offered Rate, or LIBOR. Increasing interest rates could adversely impact future earnings. In order to mitigate this specific market risk we entered into interest rate swap agreements. The purpose of the agreements was to manage interest cost and the risk associated with changing interest rates by limiting our exposure to interest rate fluctuations within the ranges stated below. During 2013 and 2014, LIBOR was below the floor rates and thus we paid the floor rates. As an indication of the extent of our sensitivity to interest rates changes based upon our debt level and interest rate swap agreements, a 100 basis points increase in interest rates would have resulted in a net increase in interest expense (including interest rate swap agreements) of approximately $1.1 million and $1.4 million for the years ended December 31, 2013 and 2014, respectively.

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Foreign exchange rate fluctuation

We generate all of our revenues in U.S. dollars and incurred approximately 27% of our expenses in currencies other than U.S. dollars (mainly in Euros) for each of the years ended December 31, 2013 and 2014. This increase mainly relates to the increase in the amounts that were payable in Euros under our Agreements with Allseas as discussed in "Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions". For accounting purposes, expenses incurred in currencies other than into U.S. dollars, are converted into U.S. dollars at the exchange rate prevailing on the date of each transaction. We do not normally hedge currency exchange risks relating to operations and our operating results could be adversely affected as a result. However, due to our relatively low percentage exposure to currencies other than our base currency, which is the U.S. dollar, we believe that such currency movements will not have a material effect on us and as such we do not hedge these exposures as the amounts involved do not make hedging economic. The impact of a 10% increase in exchange rates, on the level of expenses incurred for the years ended December 31, 2013 and 2014 in currencies other than U.S. dollars, would be approximately $1.0 million and $1.1 million, respectively.

Item 12.Description of Securities Other than Equity Securities

A.Debt securities

Not applicable.

B.Warrants and rights

Not applicable.

C.Other securities

Not applicable.

D.American depository shares

Not applicable.

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PART II

Item 13.Defaults, Dividend Arrearages and Delinquencies

See "Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Loan and Credit Facilities."

Item 14.Material Modifications to the Rights of Security Holders and Use of Proceeds

Stockholder Rights Plan

We have adopted a stockholder rights plan, pursuant to which each of our common shares includes one preferred stock purchase right that entitles the holder to purchase from us a unit consisting of one one-thousandth of a share of our Series A Preferred Stock or additional common shares if any third party seeks to acquire control of a substantial amount of our common shares without the approval of our Board of Directors, subject to certain limitations and exceptions. See "Item 10. Additional Information—B. Memorandum and Articles of Association—Stockholder Rights Plan."

Item 15.Controls and Procedures

a) Disclosure Controls and Procedures

Management, including our Chief Executive Officer and our Chief Financial Officer, has conducted an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this report. Disclosure controls and procedures are defined under SEC rules as controls and other procedures that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within required time periods. Disclosure controls and procedures include controls and procedures designed to ensure that information is accumulated and communicated to the issuer's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosures.

There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives.

Based upon that evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that our disclosure controls and procedures are effective as of December 31, 2014.

b) Management's Annual Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) of the Exchange Act. Our internal control over financial reporting is a process designed under the supervision of our Chief Executive Officer and our Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for external reporting purposes in accordance with U.S. GAAP.

Our internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of our financial statements in accordance with U.S. GAAP, and that our receipts and expenditures are being made in accordance with authorizations of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

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Management has conducted an assessment of the effectiveness of our internal control over financial reporting based on the framework established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework). Based on this assessment, management has determined that our internal control over financial reporting as of December 31, 2014 is effective.

However, because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements even when determined to be effective and can only provide reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.

Ernst & Young (Hellas) Certified Auditors-Accountants S.A., our independent registered public accounting firm, has audited the financial statements included herein and our internal control over financial reporting and has issued an attestation report on the effectiveness of our internal control over financial reporting as of December 31, 2014, which is included in "Item 18. Financial Statements" of this annual report.

c) Attestation Report of the Registered Public Accounting Firm

Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to the rules of the Securities and Exchange Commission that permit the Company to provide only management's report in this annual report. In order to enhance transparency to our shareholders, we decided not to make use of such relaxation.

The report of Ernst & Young (Hellas) Certified Auditors-Accountants S.A. is included in "Item 18. Financial Statements" of this annual report.

d) Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting that occurred during the period covered by this annual report that has materially affected, or is reasonably likely to affect, our internal control over financial reporting.

Item 16.Reserved

Item 16A. Audit Committee Financial Expert

On May 19, 2009, our audit committee designated George Xiradakis as our "audit committee financial expert," as that term is defined in Item 407 of Regulation S-K promulgated by the SEC. Our Board of Directors has determined that Mr. Xiradakis is independent according to Rule 10A-3 of the Exchange Act and NASDAQ independence rules. Prior to May 2009, we did not believe it was necessary to have an "audit committee financial expert," as defined in Item 407 of SEC Regulation S-K, because our Board of Directors had determined that each member of the audit committee had the financial experience required by Rule 5605 of NASDAQ's Equity Rules and other relevant experience necessary to carry out the duties and responsibilities of the audit committee.

Item 16B.Code of Ethics

We have adopted a Corporate Code of Business Ethics and Conduct, or Code of Ethics, which applies to our officers, directors, agents and employees. Our Code of Ethics is posted on our website: http://www.paragonship.com, under "Profile" and "Code of Ethics." Copies of our Code of Ethics are available in print, without charge, upon request to Paragon Shipping Inc., 15 Karamanli Ave., GR 166 73, Voula, Greece. We intend to satisfy any disclosure requirements regarding any amendment to, or waiver from, a provision of our Code of Ethics by posting such information on our website within 5 business days following the date of the amendment or waiver.

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Item 16C.Principal Accountant Fees and Services

The table below sets forth the total fees for the services performed by our principal accountants Ernst & Young Hellas Certified Auditors-Accountants S.A., which we refer to as the Independent Registered Public Accounting Firm. The table below also identifies these amounts by category of services:

	2013		2014
	Stated in USD
Audit fees	$	516,348	$	516,539
Audit-related fees		-		-
Tax fees		-		-
All other fees		-		-
Total	$	516,348	$	516,539

Audit fees represent compensation for professional services rendered for the (i) audit of the consolidated financial statements and internal control over financial reporting of the Company; (ii) for the review of the quarterly financial information; and (iii) services in connection with the registration statements and related consents and comfort letters and any other audit services required for SEC or other regulatory filings by Paragon or its subsidiaries.

The audit committee charter sets forth our policy regarding retention of the independent auditors, giving the audit committee responsibility for the appointment, replacement, compensation, evaluation and oversight of the work of the independent auditors. As part of this responsibility, our audit committee pre-approves the audit and non-audit services performed by our independent auditors in order to assure that they do not impair the auditor's independence from the Company. Engagements for proposed services to be performed by the independent auditors either may be separately pre-approved by the audit committee or entered into pursuant to detailed pre-approval policies and procedures established by the audit committee, as long as the audit committee is informed on a timely basis of any engagement entered into on that basis. The audit committee separately pre-approved all engagements and fees paid to our principal accountant in 2014.

Item 16D.Exemptions from the Listing Standards for Audit Committees

Not applicable.

Item 16E.Purchases of Equity Securities by the Issuer and Affiliated Purchasers

None.

Item 16F.Change in Registrant's Certifying Accountant

None.

Item 16G.Corporate Governance

Pursuant to an exception for foreign private issuers, we, as a Marshall Islands company, are not required to comply with the corporate governance practices followed by U.S. companies under the NASDAQ listing standards. We believe that our established practices in the area of corporate governance are in line with the spirit of the NASDAQ standards and provide adequate protection to our shareholders. In this respect, we have voluntarily adopted NASDAQ required practices, such as (a) having a majority of independent directors, (b) establishing audit, compensation and nominating committees comprised entirely of independent directors; and (c) adopting and disclosing a Code of Ethics for directors, officers and employees and promptly disclosing any waivers of or amendments to such code.

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The significant differences between our corporate governance practices and the practices required by the NASDAQ are set forth below.

Executive Sessions

NASDAQ requires that all independent directors of listed companies meet in an executive session at least once a year. As permitted under Marshall Islands law and our amended and restated bylaws, our independent directors do not regularly hold executive sessions without management and we do not expect them to do so in the future.

Shareholder Approval of Equity Compensation Plans

NASDAQ requires listed companies to obtain prior shareholder approval to adopt or materially revise any equity compensation plan. As permitted under Marshall Islands law and our amended and restated bylaws, we do not need prior shareholder approval to adopt or revise equity compensation plans, including our equity incentive plan.

Item 16H.Mine Safety Disclosure

Not applicable.

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 PART III

Item 17.Financial Statements

See "Item 18. Financial Statements."

Item 18.Financial Statements

The following financial statements beginning on page F-1 are filed as a part of this annual report.

Item 19.Exhibits

Exhibit Number	Description
1.1	Amended and Restated Articles of Incorporation of Paragon Shipping Inc., incorporated by reference to Exhibit 1 to the Company's Report on Form 6-K, filed with the SEC on April 21, 2010.

1.2 Article of Amendment to the Amended and Restated Articles of Incorporation of Paragon Shipping Inc., incorporated by reference to Exhibit 1.1 to the Company's Report on Form 6-K, filed with the SEC on November 6, 2012.

1.3 Amended and Restated By-laws of the Company, incorporated by reference to Exhibit 99.1 to the Company's Report on Form 6-K, filed with the SEC on August 15, 2007.

2.1 Form of Share Certificate, incorporated by reference to Exhibit 4.1 to the Company's Registration Statement on Form F-1 (File No. 333-143481), filed with the SEC on June 4, 2007.

4.1 Form of Amended and Restated Registration Rights Agreement, incorporated by reference to Exhibit 10.3 to the Company's Registration Statement on Form F-1 (File No. 333-144687), filed with the SEC on July 30, 2007.

4.2 Form of Initial Purchaser Registration Rights Agreement, incorporated by reference to Exhibit 10.4 to the Company's Registration Statement on Form F-1/A (File No. 333-143481), filed with the SEC on June 4, 2007.

4.3 Innovation Holdings Registration Rights Agreement, incorporated by reference to Exhibit 10.5 to the Company's Registration Statement on Form F-1 (File No. 333-143481), filed with the SEC on June 4, 2007.

4.4 Amended and Restated Equity Incentive Plan, incorporated by reference to Exhibit 4.5 to the Company's Annual Report on Form 20-F, filed with the SEC on March 4, 2011.

4.5 Stockholders Rights Agreement, incorporated by reference to Exhibit 4.1 to the Company's Registration Statement (File No. 001-33655), filed with the SEC on January 4, 2008.

4.6 First Amendment to Stockholders Rights Agreement, incorporated by reference to Exhibit 4.2 to the Company's Registration Statement (File No. 001-33655), filed with the SEC on March 18, 2010.

4.7 Form of Management Agreement, incorporated by reference to Exhibit 10.2 to the Company's Registration Statement (File No. 333-143481), filed with the SEC on June 4, 2007.

4.8 Form of Amended Management Agreement, incorporated by reference to Exhibit 4.9 to the Company's Annual Report on Form 20-F, filed with the SEC on March 4, 2011.

4.9 Form of Addendum No. 1 to Management Agreement, incorporated by reference to Exhibit 4.58 to the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2011, filed with the SEC on April 27, 2012.

4.10 Form of Management Agreement for newbuilding vessels under construction, incorporated by reference to Exhibit 4.10 to the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2010, filed with the SEC on March 4, 2011.

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4.11 Supplemental Letter, dated May 24, 2011, to a Commerzbank AG Senior Secured Revolving Credit Facility, dated November 29, 2007, as amended and supplemented, incorporated by reference to Exhibit 4.13 to the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2011, filed with the SEC on April 27, 2012.

4.12 Supplemental Letter, dated August 1, 2011, to a Commerzbank AG Senior Secured Revolving Credit Facility, dated November 29, 2007, as amended and supplemented, incorporated by reference to Exhibit 4.14 to the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2011, filed with the SEC on April 27, 2012.

4.13 Loan Agreement, dated August 12, 2011, by and among Paragon Shipping Inc., as Borrower, and the banks and financial institutions listed therein, as Lenders, and Commerzbank AG, as Agent, Arranger and Security Trustee, and Commerzbank AG, as Swap Bank, relating to a secured term loan facility of up to $57,000,000, incorporated by reference to Exhibit 4.15 to the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2011, filed with the SEC on April 27, 2012.

4.14 Amending and Restating Agreement, dated February 8, 2013, by and among Paragon Shipping Inc., as Borrower, and Reading Navigation Co., Donna Marine Co. and Protea International Inc., as Owners, and the banks and financial institutions listed therein, as Lenders, and Commerzbank AG, as Agent, Arranger and Security Trustee,. And Commerzbank AG, as Swap Bank, relating to an amended and restated secured term loan facility of (originally) up to $57,000,000, incorporated by reference to Exhibit 4.14 to the Company's Annual Report on Form 20-F, filed with the SEC on April 3, 2013.

4.15 Form of Loan Agreement, dated November 19, 2007, by and among Paragon Shipping Inc., as Borrower, and the banks and financial institutions listed therein, as Lenders, and UniCredit Bank AG (formerly known as Bayerische Hypo-und Vereinsbank AG), as Agent, Arranger and Security Trustee, and UniCredit Bank AG (formerly known as Bayerische Hypo-und Vereinsbank AG), relating to a secured credit facility of up to $90,000,000, incorporated by reference to Exhibit 4.17 to the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2010, filed with the SEC on March 4, 2011.

4.16 Form of Third Supplemental Agreement, dated December 29, 2010, relating to a Loan Agreement, dated November 19, 2007, by and among Paragon Shipping Inc., as Borrower, and the banks and financial institutions listed therein, as Lenders, and UniCredit Bank AG (formerly known as Bayerische Hypo-und Vereinsbank AG), as Agent, Arranger and Security Trustee, and UniCredit Bank AG (formerly known as Bayerische Hypo-und Vereinsbank AG), relating to a secured credit facility of up to $90,000,000, as amended, incorporated by reference to Exhibit 4.18 to the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2010, filed with the SEC on March 4, 2011.

4.17 Fourth Supplemental Agreement, dated October 27, 2011, relating to a secured credit facility of up to $90,000,000, to Paragon Shipping Inc., as Borrower, provided by the banks and financial institutions listed therein, as Lenders, UniCredit Bank AG, as Arranger, Agent and Security Trustee, and UniCredit Bank AG, as Swap Bank, incorporated by reference to Exhibit 4.21 to the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2011, filed with the SEC on April 27, 2012.

4.18 Fifth Supplemental Agreement, dated November 30, 2012, relating to a secured credit facility of up to $90,000,000 to Paragon Shipping Inc., as Borrower, provided by the banks and financial institutions listed therein, as Lenders, Unicredit Bank AG, as Arranger, Agent and Security Trustee, and Unicredit Bank AG, as Swap Bank, incorporated by reference to Exhibit 10.1 to the Company's Registration Statement on Form F-1 (File No. 333-185467), filed with the SEC on December 13, 2012.

4.19 Supplemental Letter, dated December 15, 2011, to a loan agreement, dated December 4, 2007 (as supplemented and amended and amended and restated) made between Paragon Shipping Inc., as Borrower, the banks and financial institutions listed therein, as Lenders, Bank of Scotland plc, as Agent, Mandated Lead Arranger, Underwriter and Security Trustee, and Bank of Scotland plc, as Swap Bank, relating to a secured revolving credit facility of up to $89,000,000, incorporated by reference to Exhibit 4.28 to the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2011, filed with the SEC on April 27, 2012.

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4.20 Supplemental Letter, dated April 26, 2012, by and among Paragon Shipping Inc., as Borrower, and the banks and financial institutions listed therein, as Lenders, and Bank of Scotland plc, as Agent, Mandated Lead Arranger, Underwriter and Security Trustee, and Bank of Scotland plc, as Swap Bank, relating to a secured revolving credit facility of (originally) up to $89,000,000, incorporated by reference to Exhibit 4.20 to the Company's Annual Report on Form 20-F, filed with the SEC on April 3, 2013.

4.21 Second Amending and Restating Agreement, dated November 30, 2012, by and among Paragon Shipping Inc., as Borrower, and Imperator I Maritime Company and Canyon I Navigation Corp., as Owners, and the banks and financial institutions listed therein, as Lenders, and Bank of Scotland plc, as Agent, Mandated Lead Arranger, Underwriter and Security Trustee, and Bank of Scotland plc, as Swap Bank, relating to an amended and restated revolving credit facility of (originally) up to $89,000,000, incorporated by reference to Exhibit 10.2 to the Company's Registration Statement on Form F-1 (File No. 333-185467), filed with the SEC on December 13, 2012.

4.22 Form of Loan Agreement, dated March 30, 2009, by and among Paragon Shipping Inc., as Borrower, and the banks and financial institutions listed therein, as Lenders, and the banks and financial institutions listed therein, as Swap Banks, and The Governor and Company of the Bank of Ireland, as Arranger, Agent and Security Trustee, relating to a term loan facility of up to $30,000,000, incorporated by reference to Exhibit 99.6 to the Company's Report on Form 6-K, filed with the SEC on April 7, 2009.

4.23 Form of Supplemental Agreement, dated March 23, 2010, by and among Paragon Shipping Inc., as Borrower, and the banks and financial institutions listed therein, as Lenders, and the banks and financial institutions listed therein, as Swap Banks, and The Governor and Company of the Bank of Ireland, as Arranger, Agent and Security Trustee, relating to a loan agreement, dated March 30, 2009, for a term loan facility of up to $30,000,000, incorporated by reference to Exhibit 4.29 to the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2010, filed with the SEC on March 4, 2011.

4.24 Supplemental Letter, dated December 23, 2011, relating to the Loan Agreement, dated March 30, 2009, by and among Paragon Shipping Inc., as Borrower, and the banks and financial institutions listed therein, as Lenders, and the banks and financial institutions listed therein, as Swap Banks, and The Governor and Company of the Bank of Ireland, as Arranger, Agent and Security Trustee, as supplemented by the Supplemental Agreement, dated March 23, 2010, relating to a term loan facility of up to $30,000,000, incorporated by reference to Exhibit 4.31 to the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2011, filed with the SEC on April 27, 2012.

4.25 Second Supplemental Agreement, dated November 28, 2012, by and among Paragon Shipping Inc., as Borrower, and the banks and financial institutions listed therein, as Lenders, and the banks and financial institutions listed therein, as Swap Banks, and The Governor and Company of the Bank of Ireland, as Arranger, Agent and Security Trustee, relating to the Loan Agreement, dated March 30, 2009 (as amended), for a term loan facility of up to $30,000,000, incorporated by reference to Exhibit 10.3 to the Company's Registration Statement on Form F-1 (File No. 333-185467), filed with the SEC on December 13, 2012.

4.26 Form of Loan Agreement, dated July 31, 2008, by and among Paragon Shipping Inc., as Borrower, and the banks and financial institutions listed therein, as Lenders, and HSH Nordbank AG, as Agent and Security Trustee, and HSH Nordbank AG, as Swap Bank, relating to a loan facility of up to $51,500,000, incorporated by reference to Exhibit 99.2 to the Company's Report on Form 6-K, filed with the SEC on April 7, 2009.

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4.27 Form of Supplemental Agreement, dated April 3, 2009, by and among Paragon Shipping Inc., as Borrower, and the banks and financial institutions listed therein, as Lenders, and HSH Nordbank AG, as Agent and Security Trustee, and HSH Nordbank AG, as Swap Bank, relating to a secured loan facility of (originally) up to $51,500,000, incorporated by reference to Exhibit 99.7 to the Company's Report on Form 6-K, filed with the SEC on April 7, 2009.

4.28 Form of Waiver Letter, dated March 1, 2010, relating to the Loan Agreement, dated July 31, 2008, as amended and supplemented by a First Supplemental Agreement, dated April 3, 2009, incorporated by reference to Exhibit 4.32 to the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2010, filed with the SEC on March 4, 2011.

4.29 Form of Second Supplemental Agreement, dated April 16, 2010, by and among Paragon Shipping Inc., as Borrower, and the banks and financial institutions listed therein, as Lenders, and HSH Nordbank AG, as Agent and Security Trustee, and HSH Nordbank AG, as Swap Bank, relating to a secured loan facility of (originally) up to $51,500,000, incorporated by reference to Exhibit 4.33 to the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2010, filed with the SEC on March 4, 2011.

4.30 Waiver Letter, dated August 5, 2011, relating to the Loan Agreement, dated July 31, 2008, as amended and supplemented, incorporated by reference to Exhibit 4.36 to the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2011, filed with the SEC on April 27, 2012.

4.31 Third Supplemental Agreement, dated September 1, 2011, by and among Paragon Shipping Inc., as Borrower, and the banks and financial institutions listed therein, as Lenders, and HSH Nordbank AG, as Agent and Security Trustee, and HSH Nordbank AG, as Swap Bank, relating to a secured loan facility of (originally) up to $51,500,000, incorporated by reference to Exhibit 4.37 to the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2011, filed with the SEC on April 27, 2012.

4.32 Supplemental Letter, dated July 17, 2012, to the Loan Agreement, dated July 31, 2008 (as amended and supplemented by three supplemental agreements dated, respectively, April 3, 2009, April 16, 2010 and September 1, 2011), by and among Paragon Shipping Inc., as Borrower, and the banks and financial institutions listed therein, as Lenders, and HSH Nordbank AG, as Agent and Security Trustee, and HSH Nordbank AG, as Swap Bank, relating to a secured loan facility of (originally) up to $51,500,000, incorporated by reference to Exhibit 4.32 to the Company's Annual Report on Form 20-F, filed with the SEC on April 3, 2013.

4.33 Supplemental Letter, dated January 22, 2013, to the Loan Agreement, dated July 31, 2008 (as amended and supplemented by three supplemental agreements dated, respectively, April 3, 2009, April 16, 2010 and September 1, 2011, and a supplemental letter, dated July 17, 2012), by and among Paragon Shipping Inc., as Borrower, and the banks and financial institutions listed therein, as Lenders, and HSH Nordbank AG, as Agent and Security Trustee, and HSH Nordbank AG, as Swap Bank, relating to a secured loan facility of (originally) up to $51,500,000, incorporated by reference to Exhibit 4.33 to the Company's Annual Report on Form 20-F, filed with the SEC on April 3, 2013.

4.34 Form of Loan Agreement, dated July 2, 2010, by and between Eris Shipping S.A., as Borrower, and HSBC Bank plc, as Lender, relating to a $22,000,000 secured loan incorporated by reference to Exhibit 4.34 to the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2010, filed with the SEC on March 4, 2011.

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4.35 First Supplemental Agreement, dated November 30, 2012, by and among Eris Shipping S.A., as Borrower, and Paragon Shipping Inc., as Guarantor, and HSBC Bank plc, as Lender, relating to a $22,000,000 secured loan facility agreement, dated July 2, 2010, incorporated by reference to Exhibit 10.4 to the Company's Registration Statement on Form F-1 (File No. 333-185467), filed with the SEC on December 13, 2012, as further supplemented by letter agreement dated March 14, 2014, filed herewith as Exhibit 4.35.

4.36 Loan Agreement, dated April 21, 2011, by and between Paragon Shipping Inc., as Borrower, and Credit Suisse AG, as Lender, relating to a secured term loan facility of $26,000,000, incorporated by reference to Exhibit 4.40 to the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2011, filed with the SEC on April 27, 2012.

4.37 Loan Agreement, dated May 5, 2011, by and among Paragon Shipping Inc., as Borrower, and the banks and financial institutions listed therein, as Lenders, and the banks and financial institutions listed therein, as Lead Arrangers and Swap Banks, and Nordea Bank Finland plc, London Branch, as Agent, Bookrunner and Security Trustee, relating to a $89,515,000 facility, incorporated by reference to Exhibit 4.41 to the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2011, filed with the SEC on April 27, 2012.

4.38 Notice of Partial Cancellation of Total Commitments, dated August 5, 2011, relating to a $89,515,000 term loan facility, dated May 5, 2011, by and among Paragon Shipping Inc., as Borrower, and the banks and financial institutions listed therein, as Lenders, and the banks and financial institutions listed therein, as Lead Arrangers and Swap Banks, and Nordea Bank Finland plc, London Branch, as Agent, Bookrunner and Security Trustee, incorporated by reference to Exhibit 4.42 to the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2011, filed with the SEC on April 27, 2012.

4.39 Waiver and Amendment Letter, dated January 13, 2012, relating to a $89,515,000 term loan facility, dated May 5, 2011, by and among Paragon Shipping Inc., as Borrower, and the banks and financial institutions listed therein, as Lenders, and the banks and financial institutions listed therein, as Lead Arrangers and Swap Banks, and Nordea Bank Finland plc, London Branch, as Agent, Bookrunner and Security Trustee, incorporated by reference to Exhibit 4.43 to the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2011, filed with the SEC on April 27, 2012.

4.40 Supplemental Agreement, dated January 29, 2013, by and among Paragon Shipping Inc., as Borrower, and the banks and financial institutions listed therein, as Lenders, and the banks and financial institutions listed therein, as Lead Arrangers and Swap Banks, and Nordea Bank Finland plc, London Branch, as Agent, Bookrunner and Security Trustee, and Ovation Services Inc., Coral Ventures Inc., Winselet Shipping & Trading Co. Ltd, Aminta International S.A. and Adonia Enterprises S.A., as Guarantors, relating to a facility of (originally) up to $89,515,100; incorporated by reference to Exhibit 4.40 to the Company's Annual Report on Form 20-F, filed with the SEC on April 3, 2013.

4.41 Purchase Agreement between the Company, Allseas Marine S.A. and Loretto Finance Inc., dated November 10, 2009, incorporated by reference to Exhibit 10.21 to the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2009, filed with the SEC on March 31, 2010.

4.42 Supplemental Agreement between the Company, Allseas Marine S.A. and Loretto Finance Inc. relating to Purchase Agreement between the Company, Allseas Marine S.A. and Loretto Finance Inc., dated November 10, 2009; incorporated by reference to Exhibit 4.42 to the Company's Annual Report on Form 20-F, filed with the SEC on April 3, 2013.

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4.43 Purchase Agreement between Eridanus Trader Co. and a company to be nominated by Box Ships Inc., dated April 19, 2011, for the purchase of the Box Trader, incorporated by reference to Exhibit 4.13 to the Annual Report on Form 20-F of Box Ships Inc. for the fiscal year ended December 31, 2011, filed with the SEC on March 16, 2012.

4.44 Purchase Agreement between Ardelia Navigation Limited and a company to be nominated by Box Ships Inc., dated April 19, 2011, for the purchase of the Box Voyager, incorporated by reference to Exhibit 4.14 to the Annual Report on Form 20-F of Box Ships Inc. for the fiscal year ended December 31, 2011, filed with the SEC on March 16, 2012.

4.45 Purchase Agreement between Delfis Shipping Company S.A. and a company to be nominated by Box Ships Inc., dated April 19, 2011, for the purchase of the CMA CGM Kingfish, incorporated by reference to Exhibit 4.15 to the Annual Report on Form 20-F of Box Ships Inc. for the fiscal year ended December 31, 2011, filed with the SEC on March 16, 2012.

4.46 Loan Agreement between Box Ships Inc., as Borrower, and Paragon Shipping Inc., as Lender, relating to an unsecured loan of up to $30.0 million, incorporated by reference to Exhibit 4.17 to the Annual Report on Form 20-F of Box Ships Inc. for the fiscal year ended December 31, 2011, filed with the SEC on March 16, 2012.

4.47 First Supplemental Agreement, dated March 11, 2013, relating to a unsecured term loan facility of up to $30,000,000 to Box Ships Inc., as Borrower, provided by Paragon Shipping Inc., as Lender; incorporated by reference to Exhibit 4.47 to the Company's Annual Report on Form 20-F, filed with the SEC on April 3, 2013.

4.48 Purchase Option Agreement between Box Ships Inc. and Paragon Shipping Inc., incorporated by reference to Exhibit 4.18 to the Annual Report on Form 20-F of Box Ships Inc. for the fiscal year ended December 31, 2011, filed with the SEC on March 16, 2012, as amended and restated by the Amended and Restated Purchase Option Agreement dated November 15, 2013, filed herewith as Exhibit 4.48.

4.49 Non-Competition Agreement between Box Ships Inc., Paragon Shipping and Michael Bodouroglou, incorporated by reference to Exhibit 4.11 to the Annual Report on Form 20-F of Box Ships Inc. for the fiscal year ended December 31, 2011, filed with the SEC on March 16, 2012.

4.50 Registration Rights Agreement between Paragon Shipping, Neige International Inc., as nominee for Proplous Navigation S.A. and Box Ships Inc., incorporated by reference to Exhibit 4.12 to the Annual Report on Form 20-F of Box Ships Inc. for the fiscal year ended December 31, 2011, filed with the SEC on March 16, 2012.

4.51 Form of Manning Agreement between vessel owning subsidiaries of Paragon Shipping Inc. and Crewcare Inc., incorporated by reference to Exhibit 4.53 to the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2011, filed with the SEC on April 27, 2012.

4.52 Administrative Services Agreement, dated November 12, 2008, between Paragon Shipping Inc. and Allseas Marine S.A., incorporated by reference to Exhibit 4.54 to the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2011, filed with the SEC on April 27, 2012.

4.53 Accounting Agreement Renewal, dated January 23, 2010, between Paragon Shipping Inc. and Allseas Marine S.A., incorporated by reference to Exhibit 4.55 to the Company's Annual Report on Form 20-F, filed with the SEC on April 27, 2012.

4.54 Addendum No. 1, dated June 1, 2010, to the Accounting Agreement Renewal, dated January 23, 2010, between Paragon Shipping Inc. and Allseas Marine S.A., incorporated by reference to Exhibit 4.56 to the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2011, filed with the SEC on April 27, 2012.

4.55 Accounting Agreement Renewal 2012, dated February 16, 2012 between Paragon Shipping Inc. and Allseas Marine S.A., incorporated by reference to Exhibit 4.57 to the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2011, filed with the SEC on April 27, 2012.

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4.56 Accounting Agreement Renewal 2014, dated February 19, 2014 between Paragon Shipping Inc. and Allseas Marine S.A.

4.57 Share Purchase Agreement, dated as of December 24, 2012, by and between the Company and Innovation Holdings S.A., incorporated by reference to Exhibit 4.56 to the Company's Annual Report on Form 20-F, filed with the SEC on April 3, 2013.

4.58 Registration Rights Agreement, dated as of December 24, 2012, by and between the Company and Innovation Holdings S.A., incorporated by reference to Exhibit 4.57 to the Company's Annual Report on Form 20-F, filed with the SEC on April 3, 2013.

4.59 Executive Services Agreement, dated January 27, 2011, by and between Paragon Shipping Inc. and Allseas Marine S.A., incorporated by reference to Exhibit 4.58 to the Company's Annual Report on Form 20-F, filed with the SEC on April 3, 2013.

4.60 Addendum No. 1 to Executive Services Agreement, dated January 27, 2011, by and between Paragon Shipping Inc. and Allseas Marine S.A., incorporated by reference to Exhibit 4.59 to the Company's Annual Report on Form 20-F, filed with the SEC on April 3, 2013.

4.61 Addendum No. 2 to Executive Services Agreement, dated January 27, 2011, by and between Paragon Shipping Inc. and Allseas Marine S.A., incorporated by reference to Exhibit 4.60 to the Company's Annual Report on Form 20-F, filed with the SEC on April 3, 2013.

4.62 Paragon Shipping Inc. 2014 Equity Incentive Plan, dated March 26, 2014.

4.63 Form of Amended and Restated Management Agreement between vessel owning subsidiaries of Paragon Shipping Inc. and Allseas Marine S.A.

4.64 Form of S&P and Charter Brokerage Services Agreement between vessel owning subsidiaries of Paragon Shipping Inc. and Seacommercial Service S.A.

4.65 Amended and Restated Compensation Agreement, dated January 2, 2015, between Paragon Shipping Inc. and Allseas Marine S.A.

4.66 Compensation Agreement, dated January 2, 2015, between Paragon Shipping Inc. and Seacommercial Shipping Services S.A.

4.67 Base Indenture dated August 8, 2014 between the Company and Deutsche Bank Trust Company Americas, as trustee, relating to the Company's 8.375% Senior Notes due 2021, incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 6-K, filed with the SEC on August 12, 2014.

4.68 First Supplemental Indenture dated August 8, 2014 between the Company and Deutsche Bank Trust Company Americas, as trustee, relating to the Company's 8.375% Senior Notes due 2021, incorporated by reference to Exhibit 4.2 to the Company's Current Report on Form 6-K, filed with the SEC on August 12, 2014.

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4.69	Loan Agreement, dated April 4, 2014, by and between Alcyone International Marine Inc., Neptune International Shipping and Trading S.A. and Paloma Marine S.A., as joint and several Borrower, and the banks and financial institutions listed therein, as Lenders, and HSH Nordbank AG, as Agent, Mandated Lead Arranger, Swap Bank and Security Trustee, relating to a senior secured post-delivery term loan facility of $47,000,000, to part finance the acquisition cost of two Ultramax bulk carriers and re-finance existing indebtedness secured on a Supramax bulk carrier named "Friendly Seas."
4.70	Loan Agreement, dated May 6, 2014, by and between Paragon Shipping Inc., as Borrower, and the  banks and financial institutions listed therein, as Lenders, and the banks and financial institutions listed therein, as Lead Arrangers and Swap Banks, and Nordea Bank Finland PLC London Branch, as Agent, Bookrunner and as Security Trustee, relating to a $160,000,000 facility to finance and/or refinance two Kamsarmax bulk carriers, four Handysize bulk carriers, two Panamax bulk carriers and two Ultramax bulk carriers.
4.71	Sixth Supplemental Agreement, dated September 30, 2014, relating to a secured credit facility of up to $90,000,000 to Paragon Shipping Inc., as Borrower, provided by the banks and financial institutions listed therein, as Lenders, Unicredit Bank AG, as Arranger, Agent and Security Trustee, and Unicredit Bank AG, as Swap Bank.
4.72	Seventh Supplemental Agreement, dated March 27, 2015, relating to a secured credit facility of up to $90,000,000 to Paragon Shipping Inc., as Borrower, provided by the banks and financial institutions listed therein, as Lenders, Unicredit Bank AG, as Arranger, Agent and Security Trustee, and Unicredit Bank AG, as Swap Bank.
4.73	Third Supplemental Agreement, dated September 30, 2012, by and among Paragon Shipping Inc., as Borrower, and the banks and financial institutions listed therein, as Lenders, and the banks and financial institutions listed therein, as Swap Banks, and The Governor and Company of the Bank of Ireland, as Arranger, Agent and Security Trustee, relating to the Loan Agreement, dated March 30, 2009 (as amended), for a term loan facility of up to $30,000,000.
8.1	Subsidiaries of Paragon Shipping Inc.
12.1	Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer
12.2	Rule 13a-14(a)/15d-14(a) Certification of Interim Principal Financial Officer
13.1	Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
13.2	Certification of Interim Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
15.1	Consent of Independent Registered Accounting Firm.
101	The following financial information from Paragon Shipping Inc.'s Annual Report on Form 20-F for the fiscal year ended December 31, 2014, formatted in Extensible Business Reporting Language (XBRL): (1) Consolidated Balance Sheets as of December 31, 2013 and 2014; (2) Consolidated Statements of Comprehensive Loss for the years ended December 31, 2012, 2013, and 2014; (3) Consolidated Statements of Shareholders' Equity for the years ended December 31, 2012, 2013, and 2014; (4) Consolidated Statements of Cash Flows for the years ended December 31, 2012, 2013, and 2014; and (5) Notes to Consolidated Financial Statements.

109

SIGNATURES

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

PARAGON SHIPPING INC.
By:	/s/ Michael Bodouroglou
Name:	Michael Bodouroglou
Title:	Chairman, President, Chief Executive Officer and Interim Chief Financial Officer

Dated: April 17, 2015

110

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page
Report of Independent Registered Public Accounting Firm	F-2
Consolidated Balance Sheets as of December 31, 2013 and 2014	F‑4
Consolidated Statements of Comprehensive Loss for the years ended December 31, 2012, 2013, and 2014	F‑5
Consolidated Statements of Shareholders' Equity for the years ended December 31, 2012, 2013, and 2014	F‑6
Consolidated Statements of Cash Flows for the years ended December 31, 2012, 2013, and 2014	F‑7
Notes to Consolidated Financial Statements	F‑8

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Shareholders of Paragon Shipping Inc.

We have audited the accompanying consolidated balance sheets of Paragon Shipping Inc. (the "Company") as of December 31, 2014 and 2013, and the related consolidated statements of comprehensive loss, shareholders' equity, and cash flows for each of the three years in the period ended December 31, 2014. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on 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 that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made 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, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Paragon Shipping Inc. at December 31, 2014 and 2013, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2014, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Paragon Shipping Inc.'s internal control over financial reporting as of December 31, 2014, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated April 17, 2015 expressed an unqualified opinion thereon.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company reports that it is probable not to be able to meet certain of the restrictive covenants included in certain of its bank loan agreements and meet scheduled debt principal repayments within 2015. These conditions raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 3. The 2014 consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets amounts, amounts and classification of liabilities, or any other adjustments that might result in the event the Company is unable to continue as a going concern.

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

Athens, Greece

April 17, 2015

F-2

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON INTERNAL CONTROL OVER FINANCIAL REPORTING

The Board of Directors and Shareholders of Paragon Shipping Inc.

We have audited Paragon Shipping Inc.'s internal control over financial reporting as of December 31, 2014, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). Paragon Shipping Inc.'s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management's Annual Report on Internal Control over Financial Reporting for the year ended December 31, 2014. Our responsibility is to express an opinion on the company's internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, Paragon Shipping Inc. maintained, in all material respects, effective internal control over financial reporting as of December 31, 2014, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Paragon Shipping Inc. as of December 31, 2014 and 2013, and the related consolidated statements of comprehensive loss, shareholders' equity, and cash flows for each of the three years in the period ended December 31, 2014 of Paragon Shipping Inc. and our report dated April 17, 2015, expressed an unqualified opinion thereon that included an explanatory paragraph regarding Paragon Shipping Inc.'s ability to continue as a going concern.

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

Athens, Greece

April 17, 2015

F-3

Paragon Shipping Inc.
Consolidated Balance Sheets
As of December 31, 2013 and 2014
(Expressed in United States Dollars - except for share data)
	Notes	2013			2014
Assets
Current assets
Cash and cash equivalents			31,301,957			7,030,507
Restricted cash			325,000			6,929,172
Trade receivables, net	Note 2		8,536,240			7,021,588
Other receivables			599,988			1,273,132
Prepaid expenses			549,276			503,109
Due from related parties	Note 4		146,051			843,510
Inventories			1,145,243			2,131,464
Marketable securities	Note 11		1,616,329			955,535
Total current assets			44,220,084			26,688,017
Fixed assets
Vessels, net	Note 6		306,135,916			369,032,973
Advances for vessels under construction	Note 5		45,209,166			49,971,703
Other fixed assets, net	Note 2		595,840			922,565
Total fixed assets, net			351,940,922			419,927,241
Investment in affiliate	Note 8		11,309,375			2,956,250
Interest rate swaps	Notes 10, 11		87,295			66,475
Other assets	Note 7		2,303,304			4,367,134
Restricted cash			9,685,000			6,960,000
Total Assets			419,545,980			460,965,117
Liabilities and Shareholders' Equity
Current liabilities
Trade accounts payable			2,543,468			2,766,734
Accrued expenses			2,054,903			4,012,238
Due to related parties	Note 4		82,074			166,354
Interest rate swaps	Notes 10, 11		980,465			589,896
Deferred income			737,251			233,245
Current portion of long-term debt	Note 9		17,257,750			20,714,324
Total current liabilities			23,655,911			28,482,791
Long-term liabilities
Long-term debt	Note 9		162,857,176			210,064,414
Interest rate swaps	Notes 10, 11		382,116			17,369
Total long-term liabilities			163,239,292			210,081,783
Total Liabilities			186,895,203			238,564,574
Commitments and Contingencies	Note 17
Shareholders' Equity
Preferred shares, $0.001 par value; 25,000,000 authorized; none issued and outstanding	Note 12		-			-
Class A common shares, $0.001 par value; 750,000,000 authorized;17,669,442 and 24,809,142 issued and outstanding at December 31, 2013 and 2014, respectively	Note 12		17,669			24,809
Class B common shares, $0.001 par value; 5,000,000 authorized; none issued and outstanding	Note 12		-			-
Additional paid-in capital	Note 12		493,803,591			535,233,573
Accumulated other comprehensive loss	Note 11		(259,811	)		(150,986	)
Accumulated deficit			(260,910,672	)		(312,706,853	)
Total Shareholders' Equity			232,650,777			222,400,543
Total Liabilities and Shareholders' Equity			419,545,980			460,965,117

The accompanying notes are an integral part of the consolidated financial statements.

F-4

Paragon Shipping Inc.
Consolidated Statements of Comprehensive Loss
For the years ended December 31, 2012, 2013 and 2014
(Expressed in United States Dollars - except for share data)
	Notes	2012			2013			2014
Revenue
Charter revenue			53,218,975			59,530,645			58,138,104
Commissions (including related party of $646,987, $750,533 and $708,153 in 2012, 2013 and 2014, respectively)	Note 4		(2,918,296	)		(3,273,889	)		(3,374,426	)
Net Revenue			50,300,679			56,256,756			54,763,678
Expenses / (Income)
Voyage expenses, net			1,855,964			6,668,998			14,744,648
Vessels operating expenses (including related party of $660,474, $797,143 and $1,282,699 in 2012, 2013 and 2014, respectively)	Note 4		18,808,084			20,758,513			22,666,036
Dry-docking expenses (including related party of $0, $109,248 and $123,840 in 2012, 2013 and 2014, respectively)	Note 4		-			1,698,217			2,193,110
Management fees - related party	Notes 4, 12		4,094,744			5,874,416			6,266,270
Depreciation	Note 6		16,386,426			16,986,584			18,357,377
General and administrative expenses (including related party of $3,304,116, $7,670,556 and $5,775,899 in 2012, 2013 and 2014, respectively)	Notes 4, 13		7,901,762			10,764,001			8,707,819
Impairment loss			-			-			15,695,282
Bad debt provisions			124,717			-			130,720
Gain from sale of assets (net of vessel sale & purchase commissions to related party of $0, $0, and $745,000 in 2012, 2013 and 2014, respectively)	Notes 4, 5		-			-			(402,805	)
Gain from vessel early redelivery	Note 14		-			(2,267,818	)		-
Loss from contract cancellation (including related party of $0, $444,421 and $0 in 2012, 2013 and 2014, respectively)	Notes 4, 5		-			568,658			-
(Gain) / loss from marketable securities, net	Note 11		(414,235	)		(1,202,094	)		25,529
Other (income) / loss	Note 14		(750,715	)		(638,374	)		210,709
Operating Income / (Loss)			2,293,932			(2,954,345	)		(33,831,017	)
Other Income / (Expenses)
Interest and finance costs			(6,744,917	)		(7,440,190	)		(9,324,395	)
Loss on derivatives, net	Notes 10, 11		(714,074	)		(95,288	)		(387,740	)
Interest income (including related party of $675,856, $504,326 and $0 in 2012, 2013 and 2014, respectively)	Note 4		728,503			531,028			20,940
Equity in net income of affiliate	Note 8		1,986,590			1,652,339			471,079
Gain from debt extinguishment			1,893,254			-			-
Loss on investment in affiliate	Notes 8, 11		(16,985,066	)		(8,620,372	)		(8,840,343	)
Foreign currency (loss) / gain			(15,347	)		(26,204	)		95,295
Total Other Expenses, net			(19,851,057	)		(13,998,687	)		(17,965,164	)
Net Loss			(17,557,125	)		(16,953,032	)		(51,796,181	)
Other Comprehensive Income / (Loss)
Unrealized (loss) / gain on cash flow hedges	Note 11		(847,943	)		131,112			131,238
Transfer of realized loss on cash flow hedges to "Interest and finance costs"	Note 11		174,869			312,069			98,656
Equity in other comprehensive (loss) / income of affiliate	Note 8		(107,083	)		77,165			16,139
Unrealized loss on change in fair value of marketable securities	Note 11		(827,377	)		(2,064,265	)		(162,737	)
Transfer of loss on change in fair value of marketable securities to "(Gain) / loss from marketable securities, net"	Note 11		980,430			1,911,212			25,529
Total Other Comprehensive (Loss) / Income			(627,104	)		367,293			108,825
Comprehensive Loss			(18,184,229	)		(16,585,739	)		(51,687,356	)
Loss per Class A common share, basic and diluted	Note 16	$	(2.84	)	$	(1.31	)	$	(2.18	)
Weighted average number of Class A common shares, basic and diluted	Note 16		6,035,910			12,639,128			23,326,062

The accompanying notes are an integral part of the consolidated financial statements.

F-5

Paragon Shipping Inc.

Consolidated Statements of Shareholders' Equity 

For the years ended December 31, 2012, 2013 and 2014

(Expressed in United States Dollars - except for share data)

	Class A Shares
										Accumulated
							Additional			Other
	Number of			Par			Paid-in			Comprehensive			Accumulated
	Shares			Value			Capital			Loss			Deficit			Total
Balance January 1, 2012		6,089,826			6,090			447,618,572			-			(226,400,515	)		221,224,147
Issuance of Class A common shares		4,901,961			4,902			9,938,991			-			-			9,943,893
Issuance of non-vested Class A common share awards		9,800			10			(10	)		-			-			-
Cancellation of non-vested Class A common share awards		(184	)		(1	)		1			-			-			-
Share based compensation		-			-			2,536,702			-			-			2,536,702
Net Loss		-			-			-			-			(17,557,125	)		(17,557,125	)
Other comprehensive loss		-			-			-			(627,104	)		-			(627,104	)
Balance December 31, 2012		11,001,403			11,001			460,094,256			(627,104	)		(243,957,640	)		215,520,513
Issuance of Class A common shares		6,218,039			6,218			31,854,532			-			-			31,860,750
Issuance of non-vested Class A common share awards		450,000			450			(450	)		-			-			-
Share based compensation		-			-			1,855,253			-			-			1,855,253
Net Loss		-			-			-			-			(16,953,032	)		(16,953,032	)
Other comprehensive income		-			-			-			367,293			-			367,293
Balance December 31, 2013		17,669,442			17,669			493,803,591			(259,811	)		(260,910,672	)		232,650,777
Issuance of Class A common shares		6,920,700			6,921			39,734,231			-			-			39,741,152
Cancellation of Class A common shares		(30,000	)		(30	)		(170,431	)		-			-			(170,461	)
Issuance of non-vested Class A common share awards		252,000			252			(252	)		-			-			-
Cancellation of non-vested Class A common share awards		(3,000	)		(3	)		3			-			-			-
Share based compensation		-			-			1,866,431			-			-			1,866,431
Net Loss		-			-			-			-			(51,796,181	)		(51,796,181	)
Other comprehensive income		-			-			-			108,825			-			108,825
Balance December 31, 2014		24,809,142			24,809			535,233,573			(150,986	)		(312,706,853	)		222,400,543

The accompanying notes are an integral part of the consolidated financial statements.

F-6

Paragon Shipping Inc.
Consolidated Statements of Cash Flows
For the years ended December 31, 2012, 2013 and 2014
(Expressed in United States Dollars - except for share data)
	2012			2013			2014
Cash flows from operating activities
Net Loss		(17,557,125	)		(16,953,032	)		(51,796,181	)
Adjustments to reconcile net loss to net cash provided by operating activities
Depreciation		16,386,426			16,986,584			18,357,377
Impairment loss		-			-			15,695,282
Loss on investment in affiliate		16,985,066			8,620,372			8,840,343
Gain from sale of assets		-			-			(402,805	)
Amortization and write off of financing costs		447,573			941,733			2,108,716
Bad debt provisions		124,717			-			130,720
Share based compensation		2,536,702			1,855,253			1,866,431
Write off of capitalized expenses from contract cancellation		-			232,495			-
(Gain) / loss from marketable securities, net		(414,235	)		(1,202,094	)		25,529
Gain from debt extinguishment		(1,893,254	)		-			-
Unrealized gain on interest rate swaps		(2,017,297	)		(834,829	)		(504,602	)
Equity in net income of affiliate, net of dividends received		1,202,991			-			(471,079	)
Changes in assets and liabilities:
Trade receivables, net		(1,334,013	)		(6,475,787	)		1,383,932
Other receivables		97,564			129,779			(673,144	)
Prepaid expenses		157,502			(103,672	)		46,167
Inventories		(9,444	)		(221,313	)		(868,623	)
Due from related parties		(1,587,798	)		2,336,607			(861,314	)
Trade accounts payable		148,323			(64,969	)		75,994
Accrued expenses		(467,604	)		148,956			1,285,140
Due to related parties		84,705			(2,631	)		84,280
Deferred income		486,010			(829,756	)		(504,006	)
Net cash from / (used in) operating activities		13,376,809			4,563,696			(6,181,843	)
Cash flow from investing activities
Net proceeds from sale of assets		-			-			9,995,000
Acquisition of vessels and capital expenditures		(32,042,752	)		(20,368,088	)		(110,664,356	)
Proceeds from the sale of marketable securities		-			-			498,056
Repayment from affiliate		1,000,000			14,000,000			-
Return of investment in affiliate		522,918			135,160			-
Other fixed assets		(172,410	)		(208,567	)		(496,093	)
Release of / (increase in) restricted cash		14,990,000			-			(3,879,172	)
Net cash used in investing activities		(15,702,244	)		(6,441,495	)		(104,546,565	)
Cash flows from financing activities
Proceeds from long-term debt		28,908,750			-			179,144,427
Repayment of long-term debt		(32,758,319	)		(15,427,250	)		(128,480,615	)
Purchase of treasury stock		-			-			(170,460	)
Payment of financing costs		(673,709	)		(912,441	)		(3,777,546	)
Proceeds from the issuance of Class A common shares		10,000,000			34,500,000			42,235,790
Class A common shares offering costs		(37,919	)		(2,657,438	)		(2,494,638	)
Net cash from financing activities		5,438,803			15,502,871			86,456,958
Net increase / (decrease) in cash and cash equivalents		3,113,368			13,625,072			(24,271,450	)
Cash and cash equivalents at the beginning of the period		14,563,517			17,676,885			31,301,957
Cash and cash equivalents at the end of the period		17,676,885			31,301,957			7,030,507
Supplemental disclosure of cash flow information
Cash paid during the period for interest (excluding capitalized interest)		5,122,625			5,201,707			5,000,188
Non-cash investing activities - unpaid capital expenditures for acquisition of vessels		-			-			572,561
Non-cash financing activities - unpaid financing costs		269,616			-			395,000

The accompanying notes are an integral part of the consolidated financial statements.

F-7

Paragon Shipping Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars – except for share data)

1.Basis of Presentation and General Information

Basis of Presentation: Paragon Shipping Inc. ("Paragon") is a public company incorporated in the Republic of the Marshall Islands on April 26, 2006 and is engaged in the ocean transportation of drybulk cargoes worldwide through the ownership and operation of drybulk carriers. In December 2006, Paragon established a branch in Greece under the provision of Law 89 of 1967, as amended.

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") and include the accounts of Paragon Shipping Inc. and its wholly-owned subsidiaries (collectively the "Company") as discussed below, as of December 31, 2013 and 2014 and for the years ended December 31, 2012, 2013 and 2014.

Drybulk Vessel Owning Subsidiaries:

Vessel Owning Company	Date of Incorporation	Country of Incorporation	Vessel's Name	Delivery Date	Built	DWT
Trade Force Shipping S.A.	November 15, 2006	Marshall Islands	Deep Seas	December 2006	1999	72,891
Frontline Marine Company	November 15, 2006	Marshall Islands	Calm Seas	December 2006	1999	74,047
Fairplay Maritime Ltd.	November 15, 2006	Marshall Islands	Kind Seas	December 2006	1999	72,493
Donna Marine Co.	July 4, 2007	Marshall Islands	Pearl Seas	August 2007	2006	74,483
Protea International Inc.	July 17, 2007	Liberia	Sapphire Seas	August 2007	2005	53,702
Reading Navigation Co.	July 17, 2007	Liberia	Diamond Seas	September 2007	2001	74,274
Imperator I Maritime Company	September 27, 2007	Marshall Islands	Coral Seas	November 2007	2006	74,477
Canyon I Navigation Corp.	September 27, 2007	Marshall Islands	Golden Seas	December 2007	2006	74,475
Paloma Marine S.A.	June 19, 2008	Liberia	Friendly Seas	August 2008	2008	58,779
Eris Shipping S.A.	April 8, 2010	Liberia	Dream Seas	July 2010	2009	75,151
Coral Ventures Inc.	August 5, 2009	Liberia	Prosperous Seas	May 2012	2012	37,293
Winselet Shipping And Trading Co. Ltd.	April 6, 2010	Liberia	Precious Seas	June 2012	2012	37,205
Aminta International S.A.	May 5, 2010	Liberia	Priceless Seas	January 2013	2013	37,202
Adonia Enterprises S.A.	May 5, 2010	Liberia	Proud Seas (1)	January 2014	2014	37,227
Alcyone International Marine Inc.	June 17, 2013	Liberia	Gentle Seas (1)	October 2014	2014	63,350
Neptune International Shipping & Trading S.A.	June 17, 2013	Liberia	Peaceful Seas (1)	October 2014	2014	63,331

(1) Refer to Notes 5 and 9

F-8

Paragon Shipping Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars – except for share data)

1.Basis of Presentation and General Information - Continued

Vessel Under Construction Owning Subsidiaries:

Vessel Owning Company	Date of Incorporation	Country of Incorporation	Hull Number	Type	Expected Delivery	DWT
Amphitrite Shipping Inc.	June 17, 2013	Liberia	DY4050 (1)	Drybulk Carrier	2015	63,500
Mirabel International Maritime Co.	June 17, 2013	Liberia	DY4052 (1)	Drybulk Carrier	2015	63,500
Dolphin Sunrise Limited	February 25, 2014	Marshall Islands	YZJ1144 (1)	Drybulk Carrier	2015	81,800
Nautilus Investment Limited	February 25, 2014	Marshall Islands	YZJ1145 (1)	Drybulk Carrier	2015	81,800
Oceanus Investments Limited	February 25, 2014	Marshall Islands	YZJ1142 (1)	Drybulk Carrier	2015	81,800

(1) Refer to Note 5

Non-Vessel Owning Subsidiaries:

Non-Vessel Owning Company	Date of Incorporation	Country of Incorporation
Camelia Navigation S.A.	November 15, 2006	Marshall Islands
Explorer Shipholding Limited	November 15, 2006	Marshall Islands
Epic Investments Inc.	December 21, 2006	Marshall Islands
Opera Navigation Co. (1)	December 21, 2006	Marshall Islands
Ovation Services Inc. (1)	September 16, 2009	Marshall Islands
Irises Shipping Ltd. (1)	October 6, 2009	Marshall Islands
Letitia Shipping Limited (1)	May 4, 2010	Marshall Islands
Nereus Navigation Ltd. (1)	May 4, 2010	Marshall Islands
Ardelia Navigation Limited (1)	June 15, 2010	Liberia
Eridanus Trading Co. (1)	July 1, 2010	Liberia
Delfis Shipping Company S.A. (1)	February 7, 2011	Liberia

(1) In March and April 2015, the Company proceeded with the dissolution of the respective subsidiaries since they were no longer active

The Company outsources the technical and commercial management of its vessels to Allseas Marine S.A. ("Allseas") and Seacommercial Shipping Services S.A. ("Seacommercial"), both related parties wholly owned by Mr. Michael Bodouroglou, the Company's Chairman, President, Chief Executive Officer and Interim Chief Financial Officer (refer to Note 4).

As of December 31, 2014, Mr. Michael Bodouroglou beneficially owned 28.4% of the Company's common stock.

F-9

Paragon Shipping Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars – except for share data)

1.Basis of Presentation and General Information - Continued

Major Charterers: The following charterers individually accounted for more than 10% of the Company's charter revenue for the years ended December 31, 2012, 2013 and 2014:

Charterer	Percentage of charter revenue
	2012			2013			2014
Intermare Transport GmbH		24.1	%		13.4	%		-
Morgan Stanley Capital Group Inc.		15.7	%		-			-
Mansel Ltd.		16.6	%		-			-
Cargill International S.A.		19.2	%		33.6	%		11.6	%
Total		75.6	%		47.0	%		11.6	%

2.Significant Accounting Policies

(a) Principles of Consolidation: The consolidated financial statements incorporate the financial statements of the Company. Income and expenses of subsidiaries acquired or disposed of during the period are included in the consolidated statements of comprehensive income / (loss) from the effective date of acquisition and up to the effective date of disposal, as appropriate. All intercompany balances and transactions have been eliminated. Paragon, as the holding company, determines whether it has a controlling financial interest in an entity by first evaluating whether the entity is a voting interest entity or a variable interest entity. Under ASC 810 "Consolidation" a voting interest entity is an entity in which the total equity investment at risk is sufficient to enable the entity to finance itself independently and provides the equity holders with the obligation to absorb losses, the right to receive residual returns and the right to make financial and operating decisions. The holding company consolidates voting interest entities in which it owns all, or at least a majority (generally, greater than 50%) of the voting interest. Variable interest entities ("VIE") are entities as defined under ASC 810 that in general either do not have equity investors with voting rights or that have equity investors that do not provide sufficient financial resources for the entity to support its activities. The determination of whether a reporting entity is required to consolidate another entity is based on, among other things, the other entity's design and purpose and the reporting entity's power, through voting or similar rights, to direct the activities of the other entity that most significantly impact the other entity's economic performance. A controlling financial interest in a VIE is present when a company has the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE, or both. Only one reporting entity, known as the primary beneficiary, is expected to be identified as having a controlling financial interest and thus is required to consolidate the VIE. The Company evaluates all arrangements that may include a variable interest in an entity to determine if it may be the primary beneficiary, and would be required to include assets, liabilities and operations of a VIE in its consolidated financial statements. As of December 31, 2013 and 2014, no such interest existed.

(b) Use of Estimates: The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

F-10

Paragon Shipping Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars – except for share data)

2.Significant Accounting Policies - Continued

(c) Other Comprehensive Income / (Loss): The Company follows the accounting guidance relating to "Comprehensive Income," which requires separate presentation of certain transactions that are recorded directly as components of stockholders' equity. The Company has elected to present net income / (loss) and other comprehensive income / (loss) in a single continuous statement of comprehensive income / (loss) in its consolidated financial statements.

(d) Foreign Currency Translation: The functional currency of the Company is the U.S. Dollar. For other than derivative instruments, each asset, liability, revenue, expense, gain or loss arising from a foreign currency transaction is measured and recorded in the functional currency using the exchange rate in effect at the date of the transaction. As of balance sheet date, monetary assets and liabilities that are denominated in a currency other than the functional currency are adjusted to reflect the exchange rate prevailing at the balance sheet date and any gains or losses are included in the statements of comprehensive income / (loss). As of December 31, 2013 and 2014, the Company had no foreign currency derivative instruments.

(e) Cash and Cash Equivalents: The Company considers highly liquid investments such as time deposits and certificates of deposit with an original maturity of three months or less to be cash equivalents.

(f) Restricted Cash: Restricted cash represents pledged cash deposits or minimum liquidity required to be maintained under the Company's borrowing arrangements or in relation to bank guarantees issued on behalf of the Company. In the event that the obligation to maintain such deposits is expected to be terminated within the next twelve months, or relates to general minimum liquidity requirements with no obligation to retain such funds in retention accounts, these deposits are classified as current assets. Otherwise they are classified as non-current assets.

(g) Trade Receivables (net):Trade receivables (net), reflect the receivables from charters, net of an allowance for doubtful accounts. At each balance sheet date, all potentially uncollectible accounts are assessed individually for purposes of determining the appropriate provision for doubtful accounts. Allowance for doubtful accounts as of December 31, 2013 and 2014 was $265,751 and $409,226, respectively.

(h) Insurance Claims: The Company records insurance claim recoveries for insured losses incurred on damages to fixed assets and for insured crew medical expenses under Other receivables. Insurance claims are recorded, net of any deductible amounts, at the time the Company's fixed assets suffer insured damages or when crew medical expenses are incurred, recovery is probable under the related insurance policies and the Company can make an estimate of the amount to be reimbursed following submission of the insurance claim.

(i) Inventories: Inventories consist of lubricants and stores on board the vessels. When vessels are unemployed or are operating under voyage charters, bunkers on board are also recorded in inventories. Inventories are stated at the lower of cost or market. Cost is determined by the first in, first out method.

(j) Vessel Cost: Vessels are stated at cost, which consists of the contract price, less discounts, plus any direct expenses incurred upon acquisition, including improvements, commission paid, delivery expenses and other expenditures to prepare the vessel for her initial voyage. Financing costs incurred during the construction period of the vessels are also capitalized and included in the vessels' cost. Subsequent expenditures for conversions and major improvements are also capitalized when they appreciably extend the life, increase the earning capacity or improve the efficiency or safety of the vessels. Repairs and maintenance are expensed as incurred.

F-11

Paragon Shipping Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars – except for share data)

2.Significant Accounting Policies - Continued

(k) Impairment of Long-Lived Assets: The Company reviews its long-lived assets "held and used" for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. When the estimate of future undiscounted cash flows, excluding interest charges, 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. The Company measures an impairment loss as the difference between the carrying value of the asset and its fair value. In this respect, management regularly reviews the carrying amount of the vessels in connection with the estimated recoverable amount for each of the Company's vessels.

The undiscounted projected net operating cash flows for each vessel are determined by considering the contracted charter revenues from existing charters for the fixed vessel days and an estimated daily time charter equivalent for the unfixed days (based on the most recent ten year historical average of similar size vessels) over the remaining estimated life of the vessel, assumed to be 25 years from the date of initial delivery from the shipyard, net of brokerage commissions, the salvage value of each vessel, which is estimated to be $300 per lightweight ton, expected outflows for vessels' future dry-docking expenses and estimated vessel operating expenses, assuming an average annual inflation rate where applicable. The Company uses the historical ten-year average as it is considered a reasonable estimation of expected future charter rates over the remaining useful life of the Company's vessels since it represents a full shipping cycle that captures the highs and lows of the market. The Company utilizes the standard deviation in order to eliminate the outliers of the sample before computing the historic ten-year average of the one-year time charter rate.

(l) Vessel Depreciation: Depreciation is computed using the straight-line method over the estimated useful life of the vessels, after considering the estimated salvage value. Each vessel's salvage value is equal to the product of its lightweight tonnage and estimated scrap rate, which up until September 30, 2012, was estimated to be $150 per lightweight ton. In order to align the scrap rate estimates with the historical average scrap rate, effective from October 1, 2012, the Company adjusted the estimated scrap rate used to calculate the vessels' salvage value from $150 to $300 per lightweight ton. The impact of the increase in the estimated scrap rate is a decrease in depreciation expense going forward.

Management estimates the useful life of the Company's vessels to be 25 years from the date of initial delivery from the shipyard, including secondhand vessels. Secondhand vessels are depreciated from the date of their acquisition through their remaining estimated useful life.

(m) Other Fixed Assets: Other fixed assets consist of computer systems installed on board the vessels to improve their efficiency, software and a vehicle. Other fixed assets are stated at cost, less accumulated depreciation. Depreciation is calculated using the straight-line method over the useful life of the assets, which is estimated to be 5 years for the computer systems software, and 6 years for the Company's vehicle. Depreciation charged in the years ended December 31, 2012, 2013 and 2014 amounted to $135,095, $164,527 and $203,357, respectively.

(n) Investments in Affiliate: Investments in the common stock of entities, in which the Company has significant influence over operating and financial policies, are accounted for using the equity method. Under this method, the investment in the affiliate is initially recorded at cost and is adjusted to recognize the Company's share of the earnings or losses of the investee after the acquisition date and is adjusted for impairment whenever facts and circumstances indicate that a decline in fair value below the cost basis is other than temporary. The amount of the adjustment is included in the determination of net income / (loss). Differences between the carrying amount of the investment in affiliate and the amount of the Company's underlying equity in the net assets of the affiliate is amortized over the remaining life of the affiliate's tangible and intangible assets, and is included in Equity in net income / (loss) of affiliate in the consolidated statements of comprehensive income / (loss). Dividends received from an affiliate reduce the carrying amount of the investment. When the Company's share of losses in an affiliate equals or exceeds its interest in the affiliate, the Company does not recognize further losses, unless the Company has incurred obligations or made payments on behalf of the affiliate.

F-12

Paragon Shipping Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars – except for share data)

2.Significant Accounting Policies - Continued

(o) Dry-docking and Special Survey Costs: Dry-docking and special survey costs are expensed in the period incurred.

(p) Financing Costs:Financing fees incurred for obtaining new loans and credit facilities are deferred and amortized to interest expense over the respective loan or credit facility using the effective interest rate method. Any unamortized balance of costs relating to loans repaid or refinanced is expensed in the period the repayment or refinancing is made, subject to the accounting guidance regarding debt extinguishment. Any unamortized balance of costs related to credit facilities repaid is expensed in the period. Any unamortized balance of costs relating to credit facilities refinanced are deferred and amortized over the term of the respective credit facility in the period the refinancing occurs, subject to the provisions of the accounting guidance relating to Debt – Modifications and Extinguishments. The unamortized financing costs are reflected in Other assets in the accompanying balance sheets.

(q) Debt restructurings: The Company accounts for debt modifications or restructuring as troubled debt restructuring when a lender for economic or legal reasons related to the Company's financial situation grants a concession that it would not otherwise consider. These concessions may include a reduction in the interest rate, principal or accrued interest, extension of the maturity date or other actions intended to minimize potential losses. The Company considers a lender to have granted a concession if the Company's effective interest rate on the restructured debt is less than the effective interest rate of the old debt immediately before the restructuring. The Company considersthe total future cash flows (defined as principal plus interest) of the restructured debt in comparison with the carrying value of the original debt. If a debt modification or restructuring is determined to be a troubled debt restructuring, the Company reduces the carrying amount of the debt when the debt balance is greater than the total future cash flows under the new terms, in which case a gain is recognized. When the total future cash flows of the restructured debt are greater than the carrying value at the date of amendment, the carrying value of the original debt is not adjusted. In a troubled debt restructuring in which the Company agrees to transfer assets to fully settle the debt, the Company recognizes a gain on restructuring for the difference between the carrying amount of the debt and the more clearly evident of: (a) the fair value of the transferred assets or (b) the fair value of the settled debt.

(r) Pension and Retirement Benefit Obligations—Crew: The vessel owning companies employ the crew on board under short-term contracts (usually up to nine months) and, accordingly, they are not liable for any pension or post-retirement benefits.

F-13

Paragon Shipping Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars – except for share data)

2.Significant Accounting Policies - Continued

(s) Revenue and Expenses: Revenue is recognized when a charter agreement exists, the vessel is made available to the charterer and collection of the related revenue is reasonably assured.

Time Charter Revenue: Time charter revenues are recorded ratably over the term of the charter as service is provided, including the amortization / accretion of the above / below market acquired time charters, where applicable. When two or more time charter rates are involved during the life term of a charter agreement, the Company recognizes revenue on a straight-line basis, and income accrued or deferred as a result is included in Other receivables or Deferred income, respectively. Time charter revenues received in advance of the provision of charter service are recorded as deferred income, and recognized when the charter service is rendered.

Revenue / Voyage charters: Voyage charter is a charter where a contract is made in the spot market for the use of a vessel for a specific voyage for a specified freight rate per ton. If a charter agreement exists and collection of the related revenue is reasonably assured, revenue is recognized as it is earned ratably during the duration of the period of each voyage. A voyage is deemed to commence upon the latest 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 the completion of discharge of the current cargo. Demurrage income represents payments by a charterer to a vessel owner when loading or discharging time exceeds the stipulated time in the voyage charter and is recognized as it is earned.

Commissions: Charter hire commissions are deferred and amortized over the related charter period and are presented separately in the accompanying consolidated statements of comprehensive loss.

Voyage Expenses: Voyage expenses exclude commissions and consist of all costs that are unique to a particular voyage, primarily including port expenses, canal dues, war risk insurances and fuel costs. Voyage expenses also include losses from the sale of bunkers to charterers and bunkers consumed during off-hire periods and while traveling to and from dry-docking.

Vessel Operating Expenses: Vessel operating expenses are accounted for as incurred on the accrual basis. Vessel operating expenses include crew wages and related costs, the cost of insurance, expenses relating to repairs and maintenance, the cost of spares and consumable stores, and other miscellaneous expenses.

(t) Share based Compensation: Share based payments to employees and directors, including grants of employee and directors stock options, are recognized in the statements of comprehensive income / (loss) based on their grant date fair values and amortized over the required service period.

(u) Segment Reporting: The Company reports financial information and evaluates its operations by charter revenues and not by the length of ship employment for its customers (i.e., spot vs. time charters) or by geographical region as the charterer is free to trade the vessel worldwide and, as a result, the disclosure of geographical information is impracticable. The Company does not have discrete financial information to evaluate the operating results for each type of charter. Although revenue can be identified for these types of charters, management cannot and does not identify expenses, profitability or other financial information for these charters. As a result, management, including the Chief Executive Officer being the chief operating decision maker, reviews operating results solely by revenue per day and operating results of the fleet, and thus the Company has determined that it operates under one reportable segment.

F-14

Paragon Shipping Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars – except for share data)

2.Significant Accounting Policies - Continued

(v) Derivatives: The Company enters into interest rate swap agreements to manage its exposure to fluctuations of interest rate risk associated with its borrowings. All derivatives are recognized in the consolidated financial statements at their fair value. The fair value of the interest rate derivatives is based on a discounted cash flow analysis. When such derivatives do not qualify for hedge accounting, the Company recognizes their fair value changes in current period earnings. When the derivatives qualify for hedge accounting, the Company recognizes the effective portion of the gain or loss on the hedging instrument directly in other comprehensive income / (loss), while the ineffective portion, if any, is recognized immediately in current period earnings. The Company, at the inception of the transaction, documents the relationship between the hedged item and the hedging instrument, as well as its risk management objective and the strategy of undertaking various hedging transactions. The Company also assesses at hedge inception of whether the hedging instruments are highly effective in offsetting changes in the cash flows of the hedged items.

The Company discontinues cash flow hedge accounting if the hedging instrument expires and it no longer meets the criteria for hedge accounting or designation is revoked by the Company. At that time, any cumulative gain or loss on the hedging instrument recognized in equity is kept in equity until the forecasted transaction occurs. When the forecasted transaction occurs, any cumulative gain or loss on the hedging instrument is recognized in current period earnings. If a hedged transaction is no longer expected to occur, the net cumulative gain or loss recognized in equity is transferred to current period earnings as financial income or expense.

(w) Fair value of financial instruments: The fair value of the interest rate derivatives is based on a discounted cash flow analysis.

In accordance with the requirements of accounting guidance relating to Fair Value Measurements, the Company classifies and discloses its assets and liabilities carried at fair value 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.

(x) Earnings per Share (EPS): The computation of basic earnings per share is based on the weighted average number of common shares outstanding during the period determined using the two-class method of computing earnings per share. Non-vested share awards issued are included in the two-class method and income attributable to non-vested share awards is deducted from the net income reported for purposes of calculating net income available to common shareholders used in the computation of basic earnings per share. The computation of diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised. Such securities include non-vested share awards for which the assumed proceeds upon grant are deemed to be the amount of compensation cost attributable to future services and are not yet recognized and common shares issuable upon exercise of the Company's outstanding warrants, to the extent that they are dilutive, using the treasury method.

(y) Subsequent Events: The Company evaluates subsequent events or transactions up to the date in which the financial statements are issued according to the requirements of ASC 855.

F-15

Paragon Shipping Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars – except for share data)

2.Significant Accounting Policies - Continued

(z) Recent Accounting Pronouncements:

The Financial Accounting Standards Board ("FASB") and the International Accounting Standards Board ("IASB") jointly issued a standard that will supersede virtually all of the existing revenue recognition guidance in U.S. GAAP and is effective for annual periods beginning on or after December 15, 2016. The standard establishes a five-step model that will apply to revenue earned from a contract with a customer (with limited exceptions), regardless of the type of revenue transaction or the industry. The standard's requirements will also apply to the recognition and measurement of gains and losses on the sale of some non-financial assets that are not an output of the entity's ordinary activities (e.g., sales of property, plant and equipment or intangibles). Extensive disclosures will be required, including disaggregation of total revenue; information about performance obligations; changes in contract asset and liability account balances between periods and key judgments and estimates. Management is in the process of accessing the impact of the new standard on Company's financial position and performance.

In August 2014, the FASB issued Accounting Standards Update ("ASU") No. 2014-15 – Presentation of Financial Statements - Going Concern. ASU 2014-15 provides guidance about management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures. ASU 2014-15 requires an entity's management to evaluate at each reporting period based on the relevant conditions and events that are known at the date of financial statements are issued, whether there are conditions or events, that raise substantial doubt about the entity's ability to continue as a going concern within one year after the date that the financial statements are issued and to disclose the necessary information. ASU 2014-15 is effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted.

3. Going Concern

As of December 31, 2014, the Company was in compliance with the financial and security ratio covenants contained in its debt agreements, with the exception of the security cover ratio covenant contained in the facility with Commerzbank AG. The respective breach was subsequently cured as in April 2015, the Company agreed with Commerzbank AG to waive the application of the security cover ratio covenant contained in the facility effective from December 31, 2014 until December 31, 2015 as discussed in Note 9.

Given the current drybulk charter rates, it is probable that the Company will not be in compliance with the minimum working capital requirement and the minimum liquidity requirement contained in certain of its loan and credit facilities on the applicable measurement dates in 2015. Furthermore, based on the Company's cash flow projections for 2015, cash on hand and cash provided by operating activities will not be sufficient to cover scheduled debt repayments due in 2015.

The Company is currently in negotiations with such lenders to obtain waivers for the affected covenants. The Company is also exploring several alternatives aiming to manage its working capital requirements and other commitments if current drybulk charter rates remain at today's low levels including negotiations for the restructuring of its loans. As management believes that the negotiations will be successful, the accompanying consolidated financial statements were prepared assuming that the Company will continue as a going concern. Therefore, the accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets and liabilities, or any other adjustments that might result in the event the Company is unable to continue as a going concern.

F-16

Paragon Shipping Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars – except for share data)

4.Transactions with Related Parties

(a) Allseas: The following amounts charged by Allseas are included in the accompanying consolidated statements of comprehensive loss:

	2012		2013		2014
Included in Commissions
(1(i)) Charter hire commissions	$	646,987	$	750,533	$	708,153
Netted against Gain from sale of assets
(1(ii)) Vessel sale & purchase commissions	$	-	$	-	$	745,000
Included in Vessel operating expenses
(1(v)) Superintendent fees	$	338,826	$	399,626	$	481,200
Included in Dry-docking expenses
(1(v)) Superintendent fees	$	-	$	109,248	$	123,840
Management fees - related party
(1(iii)) Management fees	$	3,428,548	$	4,104,271	$	4,628,813
(2) Financial accounting and reporting services		666,196		720,361	$	757,442
(3) Loretto agreement		-		1,049,784	$	880,015
Total Management fees	$	4,094,744	$	5,874,416	$	6,266,270
Included in General and administrative expenses
(4) Administrative fees	$	36,085	$	38,598	$	37,746
(7) Executive services agreement	$	3,228,438	$	7,582,634	$	5,689,152

The following amounts charged by Allseas are capitalized and are included in vessels cost and advances for vessels under construction in the accompanying consolidated balance sheets: technical management and superintendent fees relating to newbuilding vessels (refer to 5–Newbuilding Supervision Agreement), and vessel purchase commissions (refer to 1(ii)–Vessel Commissions), which in the aggregate amounted to $1,588,512 and $3,804,918 for the years ended December 31, 2013 and 2014, respectively.

Following the cancellation of the newbuilding contract relating to Hull no. 656 as discussed in Note 5, for the year ended December 31, 2013, the Company recorded a loss from contract cancellation of $568,658 relating to capitalized expenses for Hull no. 656, which includes technical management and superintendent fees (refer to 5–Newbuilding Supervision Agreement) charged by Allseas that in the aggregate amounted to $444,421.

F-17

Paragon Shipping Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars – except for share data)

4.Transactions with Related Parties - Continued

(a) Allseas - Continued

(1) Ship-Owning Company Management Agreements

(i) Charter Hire Commissions - The Company paid Allseas 1.25% of the gross freight, demurrage and charter hire collected from the employment of the vessels ("Charter Hire Commission"), which are presented separately in the accompanying consolidated statements of comprehensive loss.

(ii) Vessel Commissions- The Company also paid Allseas a fee equal to 1.00% of the purchase price of any vessel bought, constructed or sold on behalf of the Company, calculated in accordance with the relevant memorandum of agreement, ("Vessel Commission"). Vessel commissions relating to vessel sale is included in the determination of the gain / loss on sale of assets presented in the accompanying consolidated statements of comprehensive loss. Vessel commissions relating to vessels bought or constructed are capitalized and included in vessels cost and advances for vessels under construction in the accompanying consolidated balance sheets.

(iii) Management Services - Each of the ship-owning companies has a management agreement with Allseas, under which management services are provided in exchange for a fixed daily fee per vessel. This fee is subject to adjustment on June 1 of each year based on the official Eurozone inflation rate. For the period from January 1, 2012 to May 31, 2012, the Company paid Allseas a management fee of €636.74 per vessel per day, while effective June 1, 2012, Allseas management fee was adjusted to €652.02 per vessel per day. Effective June 1, 2013, Allseas management fee was adjusted to €661.15 per vessel per day, while effective June 1, 2014, Allseas management fee was adjusted to €664.46 per vessel per day.

(iv) Pre-Delivery Services – A lump sum fee of $15,000 is payable to Allseas for pre-delivery services provided during the period from the date of the Memorandum of Agreement for the purchase of the vessel, until the date of delivery.

(v) Superintendent Services – Allseas is entitled to a superintendent fee of €500per day for each day in excess of 5 days per calendar year for which a Superintendent performed on site inspection.

In January 2015, the Company's vessel owning subsidiaries signed amended and restated management agreements with Allseas, according to which a portion of the services that were previously provided by Allseas have been ceased. Pursuant to the terms of the amended and restated management agreements, effective January 2, 2015, Allseas is no longer providing chartering and sale and purchase services, and as such the fees related to these services have been terminated.

(2) Accounting Agreement – Allseas is entitled to a fee of €250,000 per annum, payable quarterly, for the provision of financial accounting services, and a fee of $30,000 per vessel per annum, payable quarterly, for the provision of financial reporting services. These fees are included in Management fees - related party in the accompanying consolidated statements of comprehensive loss. For the years ended December 31, 2012, 2013 and 2014, an amount of $666,196, $720,361 and $757,442 respectively, was paid to Allseas for financial accounting and reporting services. In February 2015, the Company agreed to renew the term of the agreement for one additional year, effective January 1, 2015.

F-18

Paragon Shipping Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars – except for share data)

4.Transactions with Related Parties - Continued

(a) Allseas - Continued

(3) Tripartite Agreement between the Company, Allseas and Loretto Finance Inc. - On November 10, 2009, the Company, Allseas, and Loretto Finance Inc. ("Loretto"), a wholly owned subsidiary of Allseas, signed a tripartite agreement, as clarified and amended by a supplemental agreement, effective from December 1, 2012, whereby in the event of a capital increase, an equity offering or the issuance of common shares to a third party or third parties in the future, other than common shares issued pursuant to the Company's equity incentive plan as discussed in Note 13 (as the same may be further amended, amended and restated, supplemented or otherwise modified) or any future equity incentive plans may be adopted, the Company will issue, at no cost to Loretto, additional common shares in an amount equal to 2% of the total number of common shares issued pursuant to such capital increase, equity offering or third party issuance, as applicable. In accordance with the terms of the agreement, any common shares to be issued to Loretto under the agreement may only be issued once the capital increase, equity offering or third party issuance giving rise to the obligation to issue shares to Loretto under the agreement has closed and any applicable contingencies, forfeiture rights or conditions precedent relating to such capital increase, equity offering or third party issuance have lapsed or expired or have been cancelled or terminated, unless otherwise agreed by the mutual agreement of the parties. The fair value of the shares issued for no consideration are accounted as share based payment and presented as Management fees - related party in the year granted in the statement of comprehensive income / (loss). Accordingly, as of December 31, 2014, the Company has granted and issued to Loretto a total of 469,958 Class A common shares, of which 135,700 were issued in 2014.

In connection with the public offering that was completed in February 2014 (refer to Note 12), effective February 18, 2014, 135,700 Class A common shares, representing the 2% of the 6,785,000 Class A common shares sold in the public offering, were granted to Loretto. The fair value of such shares based on the average of the high-low trading price of the shares on February 18, 2014, was $880,015, which was recorded as share based compensation and is included in Management fees – related party in the accompanying consolidated statement of comprehensive loss for the year ended December 31, 2014.

(4) Administrative Service Agreement - The Company entered into an administrative service agreement with Allseas on November 12, 2008. Under the agreement, Allseas provides telecommunication services, secretarial and reception personnel and equipment, security facilities, office cleaning services and information technology services. The agreement provides that all costs and expenses incurred in connection with the provision of the above services by Allseas to be reimbursed on a quarterly basis.

F-19

Paragon Shipping Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars – except for share data)

4.Transactions with Related Parties - Continued

(a) Allseas - Continued

(5) Newbuildings Supervision Agreement - The Company has entered into management agreements with Allseas relating to the supervision of each of the contracted newbuilding vessels, pursuant to which Allseas is entitled to: (1) a flat fee of $375,000 per vessel for the first 12 month period commencing from the respective steel cutting date of each vessel, and thereafter the flat fee will be paid on a pro rata basis until the vessel's delivery to the Company, (2) a daily fee of €115 per vessel commencing from the date of the vessel's shipbuilding contract until the Company accepts delivery of the respective vessel, and (3) €500 per day for each day in excess of 5 days per calendar year for which a superintendent performed on site inspection.

(6) Compensation Agreement – The Company has entered into a compensation agreement with Allseas whereby in the event that Allseas is involuntarily terminated as the manager of its fleet, it shall compensate Allseas with an amount equal to the sum of (i) three years of the most recent management fees and commissions, based on the fleet at the time of termination, and (ii) €3,000,000 (or $3,642,000 based on the Euro/U.S. dollar exchange rate of €1.0000:$1.2140 as of December 31, 2014).

(7) Executive Services Agreement – Effective January 1, 2011, the Company entered into an executive services agreement with Allseas, pursuant to which Allseas provides the services of the executive officers, which include strategy, business development, marketing, finance and other services, who report directly to the Company's Board of Directors. Under the agreement, prior to January 1, 2013, Allseas was entitled to an executive services fee of €2,500,000 per annum, payable in equal monthly installments, plus incentive compensation. Effective January 1, 2013, the executive services fee was adjusted to €2,700,000 per annum, while effective January 1, 2014, the executive services fee was adjusted to €2,900,000 per annum. The agreement has an initial term of five years and automatically renews for a successive five-year term unless sooner terminated. On March 6, 2013, the Company amended the terms of the termination clause of the executive services agreement, whereby, if the respective agreement is terminated by Allseas either for "good reason" or as a result of "change of control", as such terms are defined in the agreement, or terminated by the Company without "cause", as defined in the agreement, Allseas will be entitled to receive (i) the amount of the executive services fee payable through the "termination date," as defined in the agreement; (ii) compensation equal to three years' annual executive services fee then applicable; and (iii) an amount of the Company's common shares equal to 5% of the then issued and outstanding shares of the Company. For the year ended December 31, 2012, an amount of $3,228,438 was paid to Allseas for the services of the executive officers, while no incentive compensation was remitted. For the year ended December 31, 2013, an amount of $7,582,634 was paid to Allseas for the services of the executive officers, which includes incentive compensation of $3,993,000. For the year ended December 31, 2014, an amount of $5,689,152 was paid to Allseas for the services of the executive officers, which includes incentive compensation of $1,848,900.

Each month, the Company funds a payment to Allseas to cover working capital equal to one month's worth of estimated operating expenses. At each balance sheet date, the excess of the amount funded to Allseas over payments made by Allseas for operating expenses is reflected as Due from related parties. As of December 31, 2013 and 2014, the amount due from Allseas was $146,051 and $843,510, respectively.

F-20

Paragon Shipping Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars – except for share data)

4.Transactions with Related Parties - Continued

 (b) Seacommercial: In January 2015, the Company's vessel owning subsidiaries signed brokerage services agreements with Seacommercial. Pursuant to the agreements, effective January 2, 2015, Seacommercial provides full brokerage services in exchange for fees representing the 1.25% Charter Hire Commission and the 1.00% Vessel Commission.

(c) Granitis Glyfada Real Estate Ltd. ("Granitis") - Leasing: On September 13, 2007 and effective as of October 1, 2007, the Company entered into a rental agreement to lease office space in Athens, Greece, with Granitis, a company beneficially owned by the Company's Chairman, President, Chief Executive Officer and Interim Chief Financial Officer. The term of the lease was for 5 years beginning October 1, 2007 and expired on September 30, 2012. The monthly rental for the first year was €2,000, plus 3.6% tax, and thereafter would be adjusted annually for inflation increases in accordance with the official Greek inflation rate. On October 1, 2012, the rental agreement was renewed for an additional term of 5 years, beginning October 1, 2012 and expiring September 30, 2017, pursuant to which the monthly rental for the first year is €3,000, plus 3.6% tax, and thereafter will be adjusted annually for inflation increases in accordance with the official Greek inflation rate. Rent expense under this lease amounted to $39,593, $49,324 and $49,001 for the years ended December 31, 2012, 2013 and 2014, respectively, and is included in General and administrative expenses in the accompanying consolidated statements of comprehensive loss.

 (d) Crewcare Inc. ("Crewcare"):

(1) Manning Agency Agreements – Each of the Company's ship-owning subsidiaries has a manning agency agreement with Crewcare, a company beneficially owned by the Company's Chief Executive Officer, based in Manila, Philippines. Under the agreements, manning services are provided in exchange for a fixed monthly fee of $95 per seaman for all officers and crew who serve on board each vessel, plus a recruitment fee of $120 per seaman, payable on a one-off basis. In addition, the agreements also provide for a fee of $30 per seaman for in-house training, and a fee of $50 per seaman for extra in-house training. The expenses incurred amounted to $321,648, $382,517 and $441,499 for the years ended December 31, 2012, 2013 and 2014, respectively, and are included in Vessels operating expenses. Administrative services are also being provided which represent payment of crew wages and related costs on behalf of the Company.

(2) Cadetship Program Agreements – On October 5, 2013, each of the Company's ship-owning subsidiaries entered into a cadetship program agreement with Crewcare, pursuant to which Crewcare, at its own cost, is responsible for recruiting and training cadets to be assigned to the vessels. These services are being provided in exchange for a lump sum fee of $5,000 per cadet employed on board the vessel for one-year on board training. The agreement has an initial term of one year with the option to renew for one more year by mutual agreement. The agreement was renewed for one additional year, effective October 5, 2014. The expenses incurred for the years ended December 31, 2013 and 2014, amounted to $15,000 and $360,000, respectively, and are included in Vessels operating expenses.

The balances due to Crewcare amounted to $82,074 and $166,354 as of December 31, 2013 and 2014, respectively.

(e) Box Ships Inc.: As of December 31, 2013 and 2014, the Company held 13.6% and 11.0% of Box Ships' common stock, respectively. The decrease in the percentage of Box Ships' common stock held by the Company is mainly due to the Company's non-participation in the public offering of 5,500,000 common shares of Box Ships, which was completed on April 15, 2014 (refer to Note 8).

F-21

Paragon Shipping Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars – except for share data)

4.Transactions with Related Parties - Continued

(e) Box Ships Inc. - Continued

On May 27, 2011, the Company granted Box Ships an unsecured loan of $30,000,000. The loan was initially payable in one installment on the second anniversary of the Box Ships IPO on April 19, 2013. The loan bore interest at LIBOR plus a margin of 4.00%. As of December 31, 2012, the outstanding loan balance due from Box Ships was $14,000,000. On February 28, 2013, Box Ships prepaid an amount of $1,000,000 and reduced the outstanding balance of the respective loan to $13,000,000. In addition, on March 11, 2013, the Company agreed to amend certain terms of the loan agreement. Pursuant to the amended agreement, the Company agreed to extend the maturity of the loan for one year, from April 19, 2013 to April 19, 2014. During the remaining term of the loan, Box Ships was required to make quarterly principal installments in the amount of $1,000,000 each, with a final balloon payment of $9,000,000 due on the maturity date. In consideration for the amendment of the loan agreement, Box Ships agreed to pay an amendment fee of $65,000, which is included in Interest income in the accompanying consolidated statement of comprehensive loss for the year ended December 31, 2013, and to increase the margin from 4.00% to 5.00%. In April 2013, Box Ships paid the amendment fee of $65,000. Pursuant to the amended loan agreement, on April 19, 2013 and on July 19, 2013, Box Ships proceeded with the first two quarterly principal installment payments of $1,000,000 each. In addition, on August 5, 2013, Box Ships prepaid an amount of $5,000,000 and reduced the outstanding balance of the respective loan to $6,000,000, which was fully repaid on October 18, 2013. For the years ended December 31, 2012, 2013 and 2014, interest charged on the respective loan amounted to $675,856, $439,326 and $0, respectively.

5.Advances for Vessels Under Construction

Advances for vessels under construction relate to the installments paid that were due to the respective shipyard including capitalized expenses.

In December 2013, the Company agreed to acquire, subject to certain closing conditions that were lifted in the first quarter of 2014, shipbuilding contracts for two additional Ultramax newbuilding drybulk carriers from Allseas (Hull numbers DY4050 and DY4052). The Ultramax newbuildings have a carrying capacity of 63,500 dwt each and are currently under construction at Yangzhou Dayang Shipbuilding Co. Ltd., with scheduled delivery in the third quarter of 2015. The acquisition cost of these two newbuildings is $28,250,000 per vessel, or $56,500,000 in the aggregate. In February 2014, the Company paid a first installment of $5,592,661 per vessel. In addition, in February 2014, an amount of $282,500 per vessel was paid to Allseas, representing vessel purchase commissions equal to 1% of the acquisition cost, pursuant to the newbuilding supervision agreements between the respective ship-owning companies and Allseas. Upon commencement of the steel cutting of each vessel in the second quarter of 2014, the Company paid a second installment of $3,884,530 per vessel. The balance of the contract price, or $18,772,809 per vessel, will be payable upon the delivery of each vessel.

In December 2013, the Company also entered into an agreement with Zhejiang Ouhua Shipbuilding, to cancel one of its two 4,800 TEU containership newbuilding contracts (Hull no. 656) at no cost to the Company, to transfer the deposit to the remaining containership (C/V Box King) and to reduce its contract price from the original $57,500,000 to $55,000,000.

F-22

Paragon Shipping Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars – except for share data)

5.Advances for Vessels Under Construction - Continued

As of December 31, 2013, the Company's newbuilding program consisted of one Handysize drybulk carrier (Hull no. 625), two Ultramax drybulk carriers (Hull numbers DY152 and DY153) and one 4,800 TEU containership (C/V Box King) with expected deliveries in 2014, as well as two Ultramax drybulk carriers (Hull numbers DY4050 and DY4052) with expected deliveries in 2015.

On January 7, 2014, the Company took delivery of its fourth Handysize drybulk carrier; the M/V Proud Seas (Hull no. 625). In January 2014, an amount of $21,637,078 was paid to the shipyard representing the final installment of the respective vessel, which was financed from the syndicated secured loan facility led by Nordea Bank Finland Plc dated May 5, 2011 (refer to Note 9).

In March 2014, the Company entered into contracts with Jiangsu Yangzijiang Shipbuilding Co. for the construction of three Kamsarmax newbuilding drybulk carriers (Hull numbers YZJ1144, YZJ1145 and YZJ1142). The Kamsarmax newbuildings have a carrying capacity of 81,800 dwt each, with scheduled delivery between the second and fourth quarter of 2015. The acquisition cost of these three newbuildings is $30,550,000 per vessel, or $91,650,000 in the aggregate. In March 2014, the Company paid a first installment of $9,165,000 per vessel. In addition, in March 2014, an amount of $305,500 per vessel was paid to Allseas, representing vessel purchase commission equal to 1% of the acquisition cost, pursuant to the newbuilding supervision agreements between the respective ship-owning companies and Allseas. The balance of the contract price, or $21,385,000 per vessel, will be payable upon the delivery of each vessel.

As of March 31, 2014, the Company assessed as probable the potential sale of the remaining containership under construction, the C/V Box King. As a result of the Company's intention to sell such vessel, an impairment loss of $15,695,282 was recorded in the first quarter of 2014 and is included in the accompanying consolidated statement of comprehensive loss for the year ended December 31, 2014. The impairment loss was based on the Company's best estimate of the fair value of the vessel on a time charter free basis, and is in line with the sale price of the memorandum of agreement that the Company entered into on April 25, 2014, for the sale of the vessel to an unrelated third party, as discussed below.

On April 25, 2014, the Company entered into a memorandum of agreement for the sale of its 4,800 TEU containership newbuilding to an unrelated third party for $42,500,000, less 3% commission. In May 2014, the Company also agreed with the shipyard to reduce the contract price of the respective vessel by $770,000. In addition, the Company mutually agreed with China Development Bank to cancel the corresponding credit facility for the vessel, as discussed in Note 9.

The sale of the C/V Box King and its transfer to the new owners was concluded on May 23, 2014, and a gain of $402,805 was incurred. The net proceeds from the sale of the vessel amounted to $9,995,000 and represent the difference between the net sale price of the vessel and the outstanding contractual obligation due to the shipyard upon delivery that was resumed by the vessel's new owners.

In October 2014, the Company took delivery of the two Ultramax drybulk carriers; the M/V Gentle Seas and the M/V Peaceful Seas (Hull numbers DY152 and DY153). In October 2014, an aggregate amount of $35,672,940 was paid to the shipyard representing the final installment of the two vessels, which was mainly financed from the loan facility with HSH Nordbank AG dated April 4, 2014, following a total drawdown of $34,400,000 (refer to Note 9).

As of December 31, 2014, the Company's newbuilding program consisted of two Ultramax drybulk carriers (Hull numbers DY4050 and DY4052) and three Kamsarmax drybulk carriers (Hull numbers YZJ1144, YZJ1145 and YZJ1142) with scheduled delivery between the second and fourth quarter of 2015.

F-23

Paragon Shipping Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars – except for share data)

6.Vessels, Net

	Vessel		Accumulated			Net Book
	Cost		Depreciation			Value
Balance January 1, 2013	$	351,611,923	$	(53,235,483	)	$	298,376,440
Newbuilding deliveries		24,581,533		-			24,581,533
Depreciation for the period		-		(16,822,057	)		(16,822,057	)
Balance December 31, 2013	$	376,193,456	$	(70,057,540	)	$	306,135,916
Newbuilding deliveries		81,051,077		-			81,051,077
Depreciation for the period		-		(18,154,020	)		(18,154,020	)
Balance December 31, 2014	$	457,244,533	$	(88,211,560	)	$	369,032,973

All Company's vessels were first-priority mortgaged as collateral to the loans and credit facilities and related interest rate swaps outstanding as of December 31, 2014.

On January 29, 2013, the Company took delivery of the Handysize drybulk carrier; the M/V Priceless Seas.

During 2014, the Company took delivery of the Handysize drybulk carrier; the M/V Proud Seas, and the two Ultramax drybulk carriers; the M/V Gentle Seas and the M/V Peaceful Seas (refer to Notes 5 and 9).

7.Other Assets

Other assets of $2,303,304 and $4,367,134 as of December 31, 2013 and 2014, respectively, include deferred financing costs of $2,297,121 and $4,360,951, respectively, and utility deposits related to the leased office space of $6,183 at December 31, 2013 and 2014.

The deferred financing costs comprise:

Balance January 1, 2013	$	2,596,029
Additions		642,825
Amortization		(941,733	)
Balance December 31, 2013	$	2,297,121
Additions		4,172,546
Amortization		(2,108,716	)
Balance December 31, 2014	$	4,360,951

F-24

Paragon Shipping Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars – except for share data)

8.Investment in Affiliate

The following table is a reconciliation of the Company's investment in affiliate as presented on the accompanying consolidated balance sheets:

Balance January 1, 2013	$	19,987,743
Equity in net income of affiliate		1,652,339
Equity in other comprehensive income of affiliate		77,165
Dividends received		(1,787,500	)
Dilution effect		(390,821	)
Impairment in investment in affiliate		(8,229,551	)
Balance December 31, 2013	$	11,309,375
Equity in net income of affiliate		471,079
Equity in other comprehensive income of affiliate		16,139
Dilution effect		(221,679	)
Impairment in investment in affiliate		(8,618,664	)
Balance December 31, 2014	$	2,956,250

As of December 31, 2013 and 2014, the Company held 3,437,500 shares or 13.6% and 11.0% of Box Ships' common stock, respectively. The decrease in the percentage of Box Ships' common stock held by the Company is mainly due to the Company's non-participation in the public offering of 5,500,000 common shares of Box Ships, which was completed on April 15, 2014. The Company, on the basis of significant influence exercised over Box Ships through its shareholdings and shared executive management, accounted for its investment in Box Ships under the equity method and is separately reflected on Company's consolidated balance sheets.

The loss on investment in affiliate of $8,620,372 for the year ended December 31, 2013, consists of $390,821, relating to the dilution effect from the Company's non-participation in the public offering of 4,000,000 common shares of Box Ships, which was completed on March 18, 2013, as well as the aggregate impairment in investment in affiliate of $8,229,551, relating to the difference between the fair value and the book value of the Company's investment in Box Ships, which the Company considered as other than temporary (refer to Note 11).

The loss on investment in affiliate of $8,840,343, for the year ended December 31, 2014, consists of $221,679, relating to the dilution effect from the Company's non-participation in the public offering of 5,500,000 common shares of Box Ships, which was completed on April 15, 2014, as well as the aggregate impairment in investment in affiliate of $8,618,664, relating to the difference between the fair value and the book value of the Company's investment in Box Ships, which the Company considered as other than temporary (refer to Note 11).

Summarized financial information in respect of Box Ships Inc. is set out below:

	Year ended December 31,
INCOME STATEMENT DATA	2013		2014
Net revenue	$	69,836,201	$	49,864,674
Operating income		23,631,192		1,966,947
Net income	$	15,307,658	$	2,623,515
	As of December 31,
BALANCE SHEET DATA		2013		2014
Total current assets	$	31,691,262	$	22,011,255
Total non-current assets		397,915,376		375,837,950
Total assets		429,606,638		397,849,205
Total current liabilities		184,434,021		140,886,944
Total long-term liabilities	$	453,248	$	282,375

F-25

Paragon Shipping Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars – except for share data)

9.Long-Term Debt

The table below presents a breakdown of the Company's long-term debt as of December 31, 2013 and 2014:

		2013		2014
(a)	Commerzbank AG (August 12, 2011)	$	47,550,000	$	43,375,000
(b)	Unicredit Bank AG (November 19, 2007)		22,587,000		14,606,500
(c)	Bank of Scotland Plc (December 4, 2007)		33,616,864		-
(d)	Bank of Ireland (March 30, 2009)		13,400,000		8,350,000
(e-1)	HSH Nordbank AG (July 31, 2008)		20,625,000		-
(e-2)	HSH Nordbank AG (April 4, 2014)		-		46,713,600
(f)	HSBC Bank Plc (July 2, 2010)		16,800,000		14,460,000
(g-1)	Nordea Bank Finland Plc (May 5, 2011)		25,536,062		-
(g-2)	Nordea Bank Finland Plc (May 6, 2014)		-		78,273,638
(h)	Senior unsecured notes due 2021		-		25,000,000
Total		$	180,114,926	$	230,778,738

Disclosed as follows in the Consolidated Balance Sheets
Current portion of long-term debt	$	17,257,750	$	20,714,324
Long-term debt		162,857,176		210,064,414
Total	$	180,114,926	$	230,778,738

As of December 31, 2014, the minimum annual principal payments for the outstanding debt required to be made after the balance sheet date, excluding the subsequent agreements with Commerzbank AG, Unicredit Bank AG and Bank of Ireland discussed below, are as follows:

To December 31,
2015	$	20,714,324
2016		32,226,824
2017		48,317,324
2018		11,642,324
2019		11,642,324
Thereafter		106,235,618
Total	$	230,778,738

F-26

Paragon Shipping Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars – except for share data)

9.Long-Term Debt - Continued

(a) Commerzbank AG (August 12, 2011): On April 1, 2015, the Company agreed with Commerzbank AG ("Commerzbank") to amend certain terms of the facility, including the deferral of a portion of its four scheduled quarterly installments due in 2015, and the waiver of the application of the financial and security cover ratio covenants contained in the facility, effective from December 31, 2014 until December 31, 2015. The Company also agreed to a $3,000,000 partial prepayment, a portion of which was prepaid in the first quarter of 2015, while the balance is payable upon signing the final documentation.

The main terms and conditions of the loan agreement dated August 12, 2011, as subsequently amended, are as follows:

· The loan agreement is secured by a first priority mortgage on the vessels: M/V Sapphire Seas, M/V Pearl Seas and M/V Diamond Seas.

· The loan bears interest at LIBOR, plus any mandatory costs, plus a margin of (i) 3.00% on the outstanding amount of the loan, less any amounts that are deferred, and (ii) 4.50% on the amounts of the loan that have been deferred.

· Excluding the agreement dated April 1, 2015 discussed above, the outstanding loan amount as of December 31, 2014 of $43,375,000 was required to be repaid in 11 consecutive quarterly installments of $1,425,000, plus a balloon repayment of $27,700,000 payable simultaneously with the final installment in the third quarter of 2017.

Following the agreement dated April 1, 2015, and after giving effect to the $3,000,000 partial prepayment discussed above, the outstanding loan amount of $40,375,000 is required to be repaid in 4 consecutive quarterly installments of $712,500, followed by 7 consecutive quarterly installments of $1,425,000, plus a balloon repayment of $27,550,000 payable simultaneously with the final installment in the third quarter of 2017.

Covenants (as defined in the respective loan agreement):

· The ratio of EBITDA to net interest expenses is waived until December 31, 2015, and thereafter shall not be less than 3.00:1.00.

· The market value adjusted net worth of the Company is waived until December 31, 2015, and thereafter shall not be less than $100,000,000.

· Maintain liquid assets requirement is waived until December 31, 2015, and thereafter shall equal an amount of no less than $650,000 per vessel at all times.

· The ratio of maximum net debt to total assets expressed as a percentage is waived until December 31, 2015, and thereafter shall not exceed 80%.

· The aggregate fair market value of the mortgaged vessels to outstanding loan ratio is waived until December 31, 2015, and thereafter shall exceed 120%.

F-27

Paragon Shipping Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars – except for share data)

9.Long-Term Debt - Continued

(b) Unicredit Bank AG (November 19, 2007): On September 13, 2013, the Company agreed with Unicredit Bank AG ("Unicredit") to extend the expiration date of the existing waiver relating to the financial covenant of total liabilities to EBITDA ratio for two quarters, from January 1, 2014 to July 1, 2014, for a nominal fee and an advance payment of $1,500,000 to partially prepay the upcoming three quarterly loan installments, starting with the installment due in the fourth quarter of 2013. The advance payment of $1,500,000 was paid on September 13, 2013. On January 20, 2014, the Company agreed with Unicredit to extend the existing waiver relating to the financial covenant of total liabilities to EBITDA ratio until January 1, 2015. On July 30, 2014, the Company agreed with Unicredit, subject to certain closing conditions including a $7,000,000 prepayment, to eliminate the financial covenants relating to the minimum debt service coverage ratio, the minimum market value adjusted net worth and the maximum leverage ratio until the maturity of the loan. In addition, the Company also agreed to increase the required ratio of the fair market value of mortgaged vessels to outstanding loan from 110% to 130% at all times. The Company prepaid the amount of $7,000,000 on September 30, 2014, which was applied against a pro-rate reduction of the remaining installments, excluding the balloon repayment. Furthermore, on March 27, 2015, the Company entered into a loan supplemental agreement and agreed to amended terms with Unicredit, including the deferral of one and a portion of five of its scheduled quarterly installments due in the second quarter of 2015 through the third quarter of 2016, and the waiver of the minimum liquid assets requirement and the security ratio covenant until the maturity of the loan.

The main terms and conditions of the loan agreement dated November 19, 2007, as subsequently amended, are as follows:

· The loan agreement is secured by a first priority mortgage on the vessels: M/V Calm Seas and M/V Deep Seas.

· The loan bears interest at LIBOR, plus a margin of (i) 2.75% on the outstanding amount of the loan, less any amounts that are deferred, and (ii) 5.00% on the amounts of the loan that have been deferred, excluding any amounts deferred pursuant to the supplemental agreement dated March 27, 2015.

· Excluding the supplemental agreement dated March 27, 2015 discussed above, the outstanding loan amount as of December 31, 2014 of $14,606,500 is required to be repaid in 7 consecutive quarterly installments of $480,500, plus a balloon repayment of $11,243,000 payable simultaneously with the final installment in the third quarter of 2016.

Following the supplemental agreement dated March 27, 2015 discussed above, the outstanding loan amount as of December 31, 2014 of $14,606,500 is required to be repaid in 1 quarterly installment of $480,500 in the first quarter of 2015, while no installment is due in the second quarter of 2015, followed by 5 consecutive quarterly installments of $240,250, plus a balloon repayment of $12,924,750 payable simultaneously with the final installment in the third quarter of 2016.

Covenants: The financial and security cover ratio covenants contained in the facility have been permanently waived until the maturity of the loan, pursuant to the supplemental agreement dated March 27, 2015.

(c) Bank of Scotland Plc (December 4, 2007): On June 10, 2014, the Company completed the refinancing of the M/V Coral Seas and the M/V Golden Seas as discussed below, and repaid in full the then outstanding indebtedness under its existing loan agreement with Bank of Scotland Plc dated December 4, 2007.

F-28

Paragon Shipping Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars – except for share data)

9.Long-Term Debt - Continued

(d) Bank of Ireland (March 30, 2009): On July 25, 2014, the Company agreed with Bank of Ireland to eliminate the financial covenant relating to the minimum debt service coverage ratio until the maturity of the loan. In addition, on September 30, 2014, the Company proceeded with a prepayment of $4,000,000 with respect to its loan agreement with Bank of Ireland in return for a reduction in the next eight quarterly installments and an increase in the balloon at maturity. In addition, on March 27, 2015, the Company agreed with Bank of Ireland to waive 50% of the installment due in the first quarter of 2015, until April 30, 2015.

The main terms and conditions of the loan agreement dated March 30, 2009, as subsequently amended, are as follows:

· The loan agreement is secured by a first priority mortgage on the vessel M/V Kind Seas.

· The loan bears interest at LIBOR, plus a margin of 2.50%.

· The outstanding loan amount as of December 31, 2014, of $8,350,000 is required to be repaid in 3 consecutive quarterly installments of $350,000, followed by 4 consecutive quarterly installments of $400,000, followed by 3 consecutive quarterly installments of $1,000,000, plus a balloon repayment of $2,700,000 payable simultaneously with the final installment in the second quarter of 2017.

Covenants (as defined in the respective loan agreement):

· The minimum requirement of market value adjusted net worth of the Company is waived until December 31, 2014 and thereafter, shall not be less than $50,000,000.

· The leverage ratio is waived until December 31, 2014 and thereafter, shall not be greater than 0.80:1.00.

· Minimum liquid assets requirement is waived until December 31, 2014 and thereafter, the Company shall maintain liquid assets in an amount of no less than $500,000 per vessel at all times.

· The fair market value of the mortgaged vessel to outstanding loan ratio is waived until December 31, 2014 and thereafter, shall exceed 110%.

(e-1) HSH Nordbank AG (July 31, 2008): On July 7, 2014, the Company completed the refinancing of the M/V Friendly Seas as discussed below, and repaid in full the then outstanding indebtedness under its existing loan agreement with HSH Nordbank AG ("HSH") dated July 31, 2008.

F-29

Paragon Shipping Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars – except for share data)

9.Long-Term Debt - Continued

(e-2) HSH Nordbank AG (April 4, 2014): On April 4, 2014, the Company completed the documentation for a new loan agreement with HSH for a $47,000,000 secured loan facility for the refinancing of the M/V Friendly Seas and the partial financing of the first two Ultramax newbuilding drybulk carriers, the Hull numbers DY152 and DY153. For M/V Friendly Seas, HSH agreed to finance the lower of $12,600,000 or 60% of the vessel's market value upon the respective drawdown date. For each of the two Ultramax vessels, HSH agreed to finance the lower of $17,200,000 or 65% of the vessels' market value upon their delivery. On July 7, 2014, the Company completed the refinancing of the M/V Friendly Seas. The Company drew a total amount of $12,600,000 and repaid in full the then outstanding indebtedness under its existing loan agreement with HSH (dated July 31, 2008). In addition, in October 2014, the Company took delivery of its first two Ultramax drybulk carriers; the M/V Gentle Seas and the M/V Peaceful Seas (Hull numbers DY152 and DY153). The Company drew a total amount of $34,400,000, which was used for the payment of the final installment of the two vessels to the shipyard (refer to Note 5).

The main terms and conditions of the loan agreement dated April 4, 2014 are as follows:

· The loan agreement is secured by a first priority mortgage on the vessels: M/V Friendly Seas, M/V Gentle Seas and M/V Peaceful Seas.

· The loan bears interest at LIBOR, plus a margin of 3.25%.

· The outstanding loan amount as of December 31, 2014, of $46,713,600 consists of the following: (i) $12,313,600 relating to the M/V Friendly Seas, which is required to be repaid in 26 consecutive quarterly installments of $286,400, plus a balloon repayment of $4,867,200 payable simultaneously with the final installment in the second quarter of 2021, and (ii) $34,400,000 relating to the M/V Gentle Seas and the M/V Peaceful Seas, which is required to be repaid in 28 consecutive quarterly installments of $506,000, plus a balloon repayment of $20,232,000 payable simultaneously with the final installment in the fourth quarter of 2021.

Covenants (as defined in the respective loan agreement):

· The aggregate fair market value of the mortgaged vessels to outstanding loan ratio shall exceed 125%.

F-30

Paragon Shipping Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars – except for share data)

9.Long-Term Debt - Continued

 (f) HSBC Bank Plc (July 2, 2010): On April 8, 2014, the Company signed a supplemental agreement with HSBC Bank Plc ("HSBC") and agreed to amend the definitions of certain financial covenants, to prepay an amount of $800,000 that was prepaid on April 10, 2014, and to reduce the outstanding scheduled quarterly installments from $400,000 to $380,000, commencing from the second quarter of 2014. In addition, on August 1, 2014, the Company agreed with HSBC to extend the existing waivers for the financial covenants relating to the minimum interest and debt service coverage ratios, from June 30, 2014 to December 31, 2015.

The main terms and conditions of the loan agreement dated July 2, 2010, as subsequently amended, are as follows:

· The loan is secured by a first priority mortgage on the vessel M/V Dream Seas.

· The loan bears interest at LIBOR, plus a margin of 3.00%.

· The outstanding loan amount as of December 31, 2014, of $14,460,000 is required to be repaid in 23 consecutive quarterly installments of $380,000, plus a balloon repayment of $5,720,000 payable simultaneously with the final installment in the third quarter of 2020.

Covenants (as defined in the respective loan agreement):

· The ratio of total net debt to EBITDA shall be applicable and not exceed 9.00:1.00 from January 1, 2016 until December 31, 2016 and 8.00:1.00 thereafter.

· The ratio of EBITDA to interest expense shall be applicable and not be less than 2.50:1.00 from January 1, 2016 until the final maturity of the facility.

· The market value adjusted net worth of the Company shall be at least $50,000,000 until December 31, 2013 and $100,000,000 thereafter.

· The ratio of total net debt to value adjusted total assets shall be applicable and not greater than 0.80:1.00 from January 1, 2014 until the final maturity of the facility.

· The fair market value of the mortgaged vessel to outstanding loan ratio shall exceed 105% until December 31, 2013, 110% until December 31, 2014 and 120% thereafter.

F-31

Paragon Shipping Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars – except for share data)

9.Long-Term Debt - Continued

(g-1) Nordea Bank Finland Plc (May 5, 2011): On January 7, 2014, we took delivery of our fourth Handysize drybulk vessel; the M/V Proud Seas (refer to Notes 5 and 6). Upon the delivery of the vessel, we drew the total amount of the then undrawn portion of the facility of $25,394,427, by mortgaging both the M/V Priceless Seas and the M/V Proud Seas. On June 10, 2014, the Company completed the refinancing of the M/V Prosperous Seas, the M/V Precious Seas, the M/V Priceless Seas and the M/V Proud Seas as discussed below, and repaid in full the then outstanding indebtedness under its existing syndicated loan facility led by Nordea Bank Finland Plc ("Nordea") dated May 5, 2011.

(g-2) Nordea Bank Finland Plc (May 6, 2014): On May 6, 2014, the Company completed the documentation for a senior secured loan facility with a syndicate of major European banks led by Nordea in an amount of $160,000,000. This facility will be used for the refinancing of six vessels of its operating fleet (the four Handysize vessels M/V Prosperous Seas, M/V Precious Seas, M/V Priceless Seas and the M/V Proud Seas, and the Panamax vessels M/V Coral Seas and M/V Golden Seas), along with the financing of up to 60% of the market value of the remaining two Ultramax newbuilding drybulk carriers, the Hull numbers DY4050 and DY4052, and two of its Kamsarmax newbuilding drybulk carriers, the Hull numbers YZJ1144 and YZJ1145, that are expected to be delivered between the second and fourth quarter of 2015. On June 10, 2014, the Company completed the refinancing of the six vessels of its operating fleet discussed above. The Company drew a total amount of $81,750,000 and repaid in full the then outstanding indebtedness under its existing loan agreements with Bank of Scotland Plc (dated December 4, 2007) and Nordea (dated May 5, 2011). Such refinancing resulted in the write off of the unamortized financing costs of the respective facilities of $1,027,694, which is included in Interest and finance costs in the accompanying consolidated statement of comprehensive loss for the year ended December 31, 2014.

The main terms and conditions of the loan agreement dated May 6, 2014 are as follows:

· The loan is secured by a first priority mortgage on the vessels: M/V Coral Seas, M/V Golden Seas, M/V Prosperous Seas, M/V Precious Seas, M/V Priceless Seas and M/V Proud Seas.

· The loan bears interest at LIBOR, plus any mandatory costs, plus a margin of 3.20%.

· The outstanding loan amount as of December 31, 2014, of $78,273,638 is required to be repaid in 22 consecutive quarterly installments of $1,738,181, plus a balloon repayment of $40,033,656 payable simultaneously with the final installment in the second quarter of 2020.

F-32

Paragon Shipping Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars – except for share data)

9.Long-Term Debt - Continued

(g-2) Nordea Bank Finland Plc (May 6, 2014) - Continued

Covenants (as defined in the respective loan agreement):

· The Company shall maintain a positive working capital at all times, excluding any balloon repayments of long-term loan facilities.

· There is available to the Company cash and cash equivalents (including restricted but unpledged cash representing minimum liquidity required to be maintained under any financial indebtedness) which are not subject to any security interest, in an amount of not less than the greater of (i) 6% of total financial indebtedness and (ii) $750,000 per vessel owned on the last day of the relevant test period. In the event that the Company pays any dividend or makes any other form of distribution, after the payment of such dividend or the making of such distribution there is available to the Company cash and cash equivalents in an amount of not less than the greater of (i) 8% of total financial indebtedness and (ii) $1,000,000 per vessel owned on the last day of the relevant test period.

· The ratio of market value adjusted shareholders' equity to the market value adjusted total assets shall be equal to or greater than 30%.

· The aggregate fair market value of the mortgaged vessels to outstanding loan ratio shall exceed 135%.

(h) Senior unsecured notes due 2021: On August 8, 2014, the Company completed the offering of 1,000,000 senior unsecured notes due 2021 ("Notes"), pursuant to its effective shelf registration statement. The Notes were issued in minimum denominations of $25.00 and integral multiples of $25.00 in excess thereof, and bear interest at a rate of 8.375% per year, payable quarterly on each February 15, May 15, August 15 and November 15, commencing on November 15, 2014. The Notes will mature on August 15, 2021, and may be redeemed in whole or in part at any time or from time to time after August 15, 2017. The net proceeds from the offering amounted to $23,856,583, net of underwriting discounts and commissions of $812,500, and offering expenses payable by the Company of $330,917. The Notes trade on NASDAQ under the symbol "PRGNL".

The indenture governing the Notes contains certain restrictive covenants, including limitations on asset sales and:

· Limitation on Borrowings: Net borrowings not to exceed 70% of total assets.

· Limitation on Minimum Net Worth: Net worth to always exceed $100,000,000.

China Development Bank (May 17, 2013): Following the sale of the 4,800 TEU containership newbuilding as discussed in Note 5, in the first quarter of 2014 the Company mutually agreed with China Development Bank to cancel the corresponding credit facility for the vessel. Such cancelation resulted in the write off of the unamortized financing costs of the respective facility of $483,054, which is included in Interest and finance costs in the accompanying consolidated statement of comprehensive loss for the year ended December 31, 2014.

F-33

Paragon Shipping Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars – except for share data)

9.Long-Term Debt - Continued

Additional Covenants: Each of the above loan and credit facilities are secured by first priority mortgages on all vessels described in Note 1, first assignments of all freights, earnings and insurances. They also contain covenants that require the Company to maintain adequate insurance coverage and to obtain the lender's consent before it changes the flag, class or management of the vessels, or enter into a new line of business. The facilities include customary events of default, including those relating to a failure to pay principal or interest, a breach of covenant, representation and warranty, a cross‑default to other indebtedness and non-compliance with security documents, and prohibits the Company from paying dividends if the Company is in default on its facilities and if, after giving effect to the payment of the dividend, the Company is in breach of a covenant.

In addition, each of the above loan and credit facilities require a minimum balance of cash and cash equivalents to be maintained at all times with the respective lender, ranging from $400,000 to $750,000 per mortgaged vessel, in excess of any additional cash collateral to be maintained, as defined by the respective loan agreements.

Certain of the above loan and credit facilities restrict the amount of dividends the Company may pay to $0.50 per share per annum and limit the amount of quarterly dividends the Company may pay to 100% of its net income for the immediately preceding financial quarter. In addition, under the existing loan and credit facilities, the Company is required to maintain minimum liquidity after payment of dividends equal to the greater of the next six months' debt service, 8% of total financial indebtedness or $1,000,000 per vessel. Furthermore, according to the supplemental agreement the Company entered into with Unicredit on March 27, 2015 as discussed above, the Company is not permitted to declare or pay any dividends until all the deferred amounts of the facility's repayment installments have been repaid in full.

Covenants Compliance: As of December 31, 2014, the Company was in compliance with all debt covenants with respect to its debt agreements, with the exception of the security cover ratio covenant contained in the facility with Commerzbank. The respective breach was subsequently cured as in April 2015, the Company agreed with Commerzbank to waive the application of the security cover ratio covenant contained in the facility effective from December 31, 2014 until December 31, 2015 as discussed above.

Given the current drybulk charter rates, it is probable that the Company will not be in compliance with the minimum working capital requirement and the minimum liquidity requirement contained in certain of its loan and credit facilities on the applicable measurement dates in 2015. Furthermore, based on the Company's cash flow projections for 2015, cash on hand and cash provided by operating activities will not be sufficient to cover scheduled debt repayments due in 2015. The Company is currently in negotiations with such lenders to obtain waivers for the affected covenants. The Company is also exploring several alternatives aiming to manage its working capital requirements and other commitments if current drybulk charter rates remain at today's low levels including negotiations for the restructuring of its loans.

Other Information: As of December 31, 2014, the Company had an aggregate borrowing capacity of up to $78,000,000 with respect to the undrawn portion of the syndicated loan facility led by Nordea (dated May 6, 2014), for the partial financing of the outstanding newbuilding program as discussed above.

The interest cost charged for the years ended December 31, 2012, 2013 and 2014 amounted to $5,673,906, $6,129,911 and $7,451,854, respectively.

The capitalized interest for the years ended December 31, 2012, 2013 and 2014 amounted to $611,655, $786,263 and $1,618,836, respectively.

The weighted average interest rate for the years ended December 31, 2012, 2013 and 2014 was 2.76%, 3.21% and 3.53%, respectively.

F-34

Paragon Shipping Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars – except for share data)

10.Interest Rate Swaps

The Company enters into interest rate swap transactions to manage interest costs and the risk associated with changing interest rates with respect to its variable interest rate loans and credit facilities. These interest rate swap transactions fix the interest rates as described below.

As of December 31, 2013 and 2014, the Company's outstanding interest rate swaps had a combined notional amount of $68,976,781 and $56,208,156, respectively. Details of the interest rate swap agreements which were effective during 2013 and 2014 are outlined below:

Interest rate swaps that did not qualify for hedge accounting:

Counterparty	Effective date	Termination date	Notional amount As of December 31, 2013		Notional amount As of December 31, 2014		Fixed rate			Floating rate
Unicredit Bank AG (1)	August 27, 2010	August 27, 2015	$	35,700,000	$	25,500,000		2.465	%	3-month LIBOR
HSBC Bank Plc (2)	April 10, 2012	April 10, 2017		-	$	4,560,000		1.485	%	3-month LIBOR
HSH Nordbank AG (3)	May 8, 2012	May 5, 2017		-	$	9,562,500		1.220	%	3-month LIBOR
Nordea Bank Finland Plc (4)	May 4, 2012	March 31, 2017		-	$	5,918,792		1.140	%	3-month LIBOR
Nordea Bank Finland Plc (5)	June 18, 2012	May 4, 2017		-	$	5,885,615		1.010	%	3-month LIBOR
HSH Nordbank AG (6)	August 6, 2012	May 5, 2017		-	$	4,781,250		0.980	%	3-month LIBOR
TOTAL			$	35,700,000	$	56,208,157

Interest rate swaps that qualified for hedge accounting:

Counterparty	Effective date	Termination date	Notional amount As of December 31, 2013		Notional amount As of December 31, 2014		Fixed rate			Floating rate
HSBC Bank Plc (2)	April 10, 2012	April 10, 2017	$	5,040,000		-		1.485	%	3-month LIBOR
HSH Nordbank AG (3)	May 8, 2012	May 5, 2017	$	10,312,500		-		1.220	%	3-month LIBOR
Nordea Bank Finland Plc (4)	May 4, 2012	March 31, 2017	$	6,401,958		-		1.140	%	3-month LIBOR
Nordea Bank Finland Plc (5)	June 18, 2012	May 4, 2017	$	6,366,073		-		1.010	%	3-month LIBOR
HSH Nordbank AG (6)	August 6, 2012	May 5, 2017	$	5,156,250		-		0.980	%	3-month LIBOR
TOTAL			$	33,276,781		-

⁽¹⁾ The notional amount reduces by $2,550,000 on a quarterly basis up until the expiration of the interest rate swap.

⁽²⁾ The notional amount reduces by $120,000 on a quarterly basis up until the expiration of the interest rate swap.

⁽³⁾ The notional amount reduces by $187,500 on a quarterly basis up until the expiration of the interest rate swap.

⁽⁴⁾ The notional amount reduces by $120,792 on a quarterly basis up until the expiration of the interest rate swap.

⁽⁵⁾ The notional amount reduces by $120,115 on a quarterly basis up until the expiration of the interest rate swap.

⁽⁶⁾ The notional amount reduces by $93,750 on a quarterly basis up until the expiration of the interest rate swap.

Following the $800,000 prepayment to HSBC and the refinancing of the loan agreements with HSH dated July 31, 2008 and Nordea dated May 5, 2011 as discussed in Note 9, the Company reassessed the criteria for hedge accounting with respect to the corresponding interest rate swaps and concluded that same were no longer met. Accordingly, all the above interest rate swaps did not qualify for hedge accounting as of December 31, 2014.

11.Financial Instruments and Fair Value Disclosures

The principal financial assets of the Company consist of cash and cash equivalents, restricted cash, trade receivables, amounts due from related parties, an investment in affiliate and marketable securities available for sale. The principal financial liabilities of the Company consist of long-term bank loans, senior unsecured notes due 2021, interest rate swaps, trade accounts payable, amounts due to related parties and accrued liabilities.

(a) Interest rate risk: The Company's long-term bank loans are based on LIBOR and hence the Company is exposed to movements in LIBOR. The Company entered into interest rate swap agreements, discussed in Note 10, in order to hedge its variable interest rate exposure.

F-35

Paragon Shipping Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars – except for share data)

11.Financial Instruments and Fair Value Disclosures - Continued

(b) Concentration of credit risk: Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist principally of trade receivables, amounts due from related parties and cash and cash equivalents. The Company limits its credit risk with trade receivables by performing ongoing credit evaluations of its customers' financial condition and generally does not require collateral for its trade receivables. In addition, the Company also limits its exposure by diversifying among customers. The amounts due from related parties mainly relate to advance payments to Allseas to cover working capital equal to one month's worth of estimated operating expenses. The Company places its cash and cash equivalents with high credit quality financial institutions. The Company performs periodic evaluations of the relative credit standing of those financial institutions. The Company is exposed to credit risk in the event of non-performance by counterparties to derivative instruments. However, the Company limits its exposure by diversifying among counterparties considering their credit ratings.

(c) Fair value: The carrying values of cash and cash equivalents, restricted cash, trade receivables, amounts due from related parties, trade accounts payable, amounts due to related parties and accrued liabilities are reasonable estimates of their fair value due to the short-term nature of these financial instruments. The fair value of long-term bank loans approximate their carrying value, predominantly due to the variable interest rate nature thereof. Derivative financial instruments are stated at fair values.

The Company's Notes trade on NASDAQ under the symbol "PRGNL" and therefore are considered Level 1 items in accordance with the fair value hierarchy. As of December 31, 2014, the fair value of the Company's Notes based on their quoted close price of $17.00 per Note was $17,000,000 in the aggregate.

When the interest rate swap contracts qualify for hedge accounting, the Company recognizes the effective portion of the gain / (loss) on the hedging instruments directly in other comprehensive income / (loss) in the statement of shareholders' equity, while any ineffective portion, if any, is recognized immediately in current period statement of comprehensive income / (loss). When the interest rate swap contracts do not qualify for hedge accounting, the Company recognizes their fair value changes in current period statement of comprehensive income / (loss).

Information on the location and amounts of derivative fair values in the consolidated balance sheets and derivative gains / (losses) in the consolidated statements of comprehensive income / (loss) and shareholders' equity are shown below:

Derivative Instruments – Balance Sheet Location

		December 31, 2013			December 31, 2014
	Balance Sheet Location	Fair Value			Fair Value
Derivatives designated as hedging instruments
Interest rate swaps	Non-Current Assets – Interest rate swaps	$	(87,295	)	$	-
Interest rate swaps	Current liabilities – Interest rate swaps		294,505			-
Interest rate swaps	Long-Term Liabilities – Interest rate swaps		22,683			-
	Subtotal	$	229,893		$	-
Derivatives not designated as hedging instruments
Interest rate swaps	Non-Current Assets – Interest rate swaps	$	-		$	(66,475	)
Interest rate swaps	Current liabilities – Interest rate swaps		685,960			589,896
Interest rate swaps	Long-Term Liabilities – Interest rate swaps		359,433			17,369
	Subtotal	$	1,045,393		$	540,790
Total derivatives		$	1,275,286		$	540,790

F-36

Paragon Shipping Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars – except for share data)

11. Financial Instruments and Fair Value Disclosures - Continued

Effect of Derivative Instruments designated as hedging instruments

Gain Recognized in Accumulated Other Comprehensive Loss – Effective Portion

	Year Ended December 31,
	2013		2014
Interest rate swaps	$	131,112	$	131,238
Total	$	131,112	$	131,238

Location of Loss Transferred from Accumulated Other Comprehensive Loss in Statements of Comprehensive Loss – Effective Portion

		Year Ended December 31,
		2013			2014
Interest rate swaps – Realized Loss	Interest and finance costs	$	(312,069	)	$	(98,656	)
Total		$	(312,069	)	$	(98,656	)

There was no ineffective portion of the gain / (loss) on the hedging instruments for the years ended December 31, 2013 and 2014.

Effect of Derivative Instruments not designated as hedging instruments

		Year Ended December 31,
	Location of Gain / (Loss) Recognized		2013			2014
Interest rate swaps – Fair value	Loss on derivatives, net	$	834,829		$	504,602
Interest rate swaps – Realized Loss	Loss on derivatives, net		(930,117	)		(892,342	)
Net loss on derivatives		$	(95,288	)	$	(387,740	)

Financial Instruments and Assets that are measured at fair value on a recurring basis

Interest rate swaps

The fair value of the Company's interest rate swap agreements (refer to Note 10) is determined using a discounted cash flow approach based on market-based LIBOR swap yield rates. LIBOR swap rates are observable at commonly quoted intervals for the full terms of the swaps and therefore are considered Level 2 items in accordance with the fair value hierarchy.

The following table summarizes the valuation of the Company's interest rate swaps as of December 31, 2013 and 2014.

	Significant Other Observable Inputs (Level 2)
Financial Instruments	December 31, 2013			December 31, 2014
Interest rate swaps – asset	$	(87,295	)	$	(66,475	)
Interest rate swaps – liability		1,362,581			607,265
Total	$	1,275,286		$	540,790

F-37

Paragon Shipping Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars – except for share data)

11. Financial Instruments and Fair Value Disclosures - Continued

Financial Instruments and Assets that are measured at fair value on a recurring basis - Continued

Marketable securities – shares of Korea Line Corporation ("KLC"):

The number of KLC shares held by the Company was 65,896 and 44,550 as of December 31, 2013 and 2014, respectively. These marketable securities have readily determinable fair values and are classified as available for sale. Such marketable securities are measured subsequently at fair value in the accompanying consolidated balance sheets. Unrealized gains / (losses) from available for sale securities are excluded from the statement of comprehensive income / (loss) and are recognized in accumulated other comprehensive income / (loss) until realized.

Pursuant to the amended KLC rehabilitation plan, on May 9, 2013, 58,483 additional shares of KLC were issued to the Company, increasing the total number of KLC shares held by the Company to 65,896. Based on the closing price of KLC shares as of May 9, 2013, the fair value of the 58,483 additional KLC shares was $3,113,306, which was recognized as gain from marketable securities, net and is included in the accompanying consolidated statement of comprehensive loss for the year ended December 31, 2013. The decline of the fair value of the total 65,896 KLC shares as of September 30, 2013 and December 31, 2013, based on the respective latest publicly available information, was considered as other than temporary and therefore an aggregate loss of $1,911,212 was recognized. The respective loss is included in gain from marketable securities, net in the accompanying consolidated statement of comprehensive loss for the year ended December 31, 2013, after reclassifying this amount from the Company's other comprehensive income / (loss).

In 2014, the Company sold a total of 21,346 KLC shares at an average sale price of $23.52 per share. Following the sale of such shares, the number of KLC shares held by the Company was 44,550. The total cash received from the sale of these shares amounted to $498,056, net of commissions. A loss from marketable securities, net, of $25,529 was recorded for the year ended December 31, 2014, after reclassifying same from the Company's other comprehensive income / (loss).

The fair value of the 44,550 KLC shares as of December 31, 2014, based on the respective latest publicly available information, was $955,535. The corresponding loss on change in the fair value of $137,208 was recognized in other comprehensive income / (loss).

Furthermore, in April 2015, the Company sold an additional 18,133 KLC shares at an average sale price of $22.62 per share. Following the sale of such shares, the number of KLC shares held by the Company was 26,417. The total cash expected to be received from the sale of these shares amounts to $406,808, net of commissions (based on U.S. dollar/KRW exchange rate of $1.000:KRW1,096.92 as of April 15, 2015).

Location of Recognized Gain / (Loss) from Marketable Securities

		Year Ended December 31,
	Location of Gain / (Loss) Recognized	2013 Gain / (Loss)			2014 Gain / (Loss)
Marketable securities – Initial measurement	(Gain) / loss from marketable securities, net	$	3,113,306		$	-
Marketable securities – Realized Loss	(Gain) / loss from marketable securities, net		(1,911,212	)		(25,529	)
Net gain / (loss) from marketable securities		$	1,202,094		$	(25,529	)

The fair value of the KLC shares is based on quoted prices of KLC share of stock (Korea SE: KS) and is considered to be determined through Level 1 inputs of the fair value hierarchy.

The following table summarizes the valuation of the KLC shares as of December 31, 2013 and 2014.

	Quoted Prices in Active Markets (Level 1)
Financial Assets	December 31, 2013			December 31, 2014
KLC Shares – Marketable Securities		$	1,616,329		$	955,535

F-38

Paragon Shipping Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars – except for share data)

11. Financial Instruments and Fair Value Disclosures - Continued

Financial Assets that are measured at fair value on a non-recurring basis

Investment in Box Ships Inc.:

For the years ended December 31, 2013 and 2014, in accordance with the accounting guidance relating to loss in value of an investment that is other than a temporary decline, the Company recognized an impairment loss on its investment in Box Ships' common shares.

The decline in the fair value of the investment in Box Ships based on the closing price of Box Ships' common share as of September 30, 2013 and December 31, 2013, was considered as other than temporary and therefore an aggregate loss of $8,229,551 was recognized. The respective loss is included in loss on investment in affiliate in the accompanying consolidated statement of comprehensive loss for the year ended December 31, 2013.

The decline in the fair value of the investment in Box Ships based on the closing price of Box Ships' common share as of March 31, 2014, June 30, 2014 and December 31, 2014, was considered as other than temporary and therefore an aggregate loss of $8,618,664 was recognized. The respective loss is included in loss on investment in affiliate in the accompanying consolidated statement of comprehensive loss for the year ended December 31, 2014.

Location of Impairment Loss on Investment in Affiliate

		Year Ended December 31,
	Location of Loss Recognized	2013				2014
Dilution effect	Loss on investment in affiliate		$	(390,821	)		$	(221,679	)
Impairment loss	Loss on investment in affiliate			(8,229,551	)			(8,618,664	)
Loss on investment in affiliate			$	(8,620,372	)		$	(8,840,343	)

The fair value of the investment in Box Ships is based on quoted prices of Box Ships share of stock (NYSE: TEU) and is considered to be determined through Level 1 inputs of the fair value hierarchy.

The following table summarizes the valuation of the Company's investment in Box Ships as of December 31, 2013 and 2014.

	Quoted Prices in Active Markets (Level 1)
Financial Assets	December 31, 2013		December 31, 2014
Investment in equity affiliate – Box Ships Inc.	$	11,309,375	$	2,956,250

The fair value of the investment in Box Ships, based on the closing price of Box Ships' common share on the NYSE on April 15, 2015, of $1.06, was $3,643,750.

As of December 31, 2013 and 2014, the Company did not have any assets or liabilities measured at fair value on a recurring or non-recurring basis, other than the ones discussed above.

F-39

Paragon Shipping Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars – except for share data)

12.Capital Structure

(a)Common Stock:

Under the amended and restated articles of incorporation, the Company's authorized common stock consists of 755,000,000 shares of common stock, par value $0.001 per share, divided into 750,000,000 Class A common shares and 5,000,000 Class B common shares.

Each holder of Class A common shares is entitled to one vote on all matters submitted to a vote of shareholders. Subject to preferences that may be applicable to any outstanding shares of preferred stock, holders of Class A common shares are entitled to receive ratably all dividends, if any, declared by the Company's Board of Directors out of funds legally available for dividends. Upon dissolution, liquidation or sale of all or substantially all of the Company's assets, after payment in full of all amounts required to be paid to creditors and to the holders of preferred stock having liquidation preferences, if any, Class A common shareholders are entitled to receive pro rata the Company's remaining assets available for distribution. Holders of Class A common shares do not have conversion, redemption or pre-emptive rights.

On December 24, 2012, the Company entered into an agreement to sell 4,901,961 newly-issued Class A common shares to Innovation Holdings, an entity beneficially owned by Mr. Michael Bodouroglou, the Company's Chairman, President, Chief Executive Officer and Interim Chief Financial Officer, for a total consideration of $10,000,000. The transaction closed on December 24, 2012. In addition, Innovation Holding also received customary registration rights in respect of the common shares it received in the private placement. The documentation entered into in connection with the private placement was approved by the independent member of the Company's Board of Directors.

Effective February 15, 2013, 98,039 Class A common shares, representing the 2.0% of the 4,901,961 newly-issued Class A common shares sold to Innovation Holdings discussed above, were granted to Loretto. The fair value of such shares based on the average of the high-low trading price of the shares on February 15, 2013, was $335,784, which was recorded as share based compensation and is included in Management fees – related party in the accompanying consolidated statement of comprehensive loss for the year ended December 31, 2013.

F-40

Paragon Shipping Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars – except for share data)

12.Capital Structure - Continued

(a)Common Stock - Continued

On September 27, 2013, the Company completed a public offering of 6,000,000 of its Class A common shares at $5.75 per share, including the full exercise of the over-allotment option granted to the underwriters to purchase up to 782,609 additional common shares. The net proceeds from the offering, which amounted to $31,881,984, net of underwriting discounts and commissions of $2,070,000 and other offering expenses of $548,016, would be used to fund the initial deposits and other costs associated with the purchase of two Ultramax newbuilding drybulk carriers, the Hull numbers DY152 and DY153, as discussed in Note 5, and general corporate purposes. In connection with the offering, effective September 27, 2013, 120,000 Class A common shares, representing the 2.0% of the 6,000,000 Class A common shares sold in the public offering, were granted to Loretto. The fair value of such shares based on the average of the high-low trading price of the shares on September 27, 2013, was $714,000, which was recorded as share based compensation and is included in Management fees – related party in the accompanying consolidated statement of comprehensive loss for the year ended December 31, 2013.

On February 18, 2014, the Company completed a public offering of 6,785,000 of its Class A common shares at $6.25 per share, including the full exercise of the over-allotment option granted to the underwriters to purchase up to 885,000 additional common shares. The net proceeds from the offering amounted to $39,741,152, net of underwriting discounts and commissions and other offering expenses payable by the Company. In connection with the offering, effective February 18, 2014, 135,700 Class A common shares, representing the 2.0% of the 6,785,000 Class A common shares sold in the public offering, were granted to Loretto. The fair value of such shares based on the average of the high-low trading price of the shares on February 18, 2014, was $880,015, which was recorded as share based compensation and is included in Management fees – related party in the accompanying consolidated statement of comprehensive loss for the year ended December 31, 2014.

On May 12, 2014, the Company's Board of Directors authorized a share buyback program of up to $10,000,000 for a period of twelve months. The Company expects to repurchase these shares in the open market, at times and prices that are considered to be appropriate by the Company, but is not obligated under the terms of the program to repurchase any shares. Pursuant to the share buyback program, as of December 31, 2014, the Company had purchased and cancelled 30,000 of its common shares at an average price of $5.6820 per share.

As of December 31, 2013 and 2014, the Company had a total of 17,669,442 and 24,809,142 Class A common shares outstanding, respectively, and no other class of shares outstanding.

(b)Preferred Stock:

Under the amended and restated articles of incorporation, the Company's authorized preferred stock consists of 25,000,000 shares of preferred stock, par value $0.001 per share, and there was none issued and outstanding at December 31, 2013 and 2014.

F-41

Paragon Shipping Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars – except for share data)

13.Share Based Payments

Equity incentive plan – October 11, 2006

On October 11, 2006, the Company adopted an equity incentive plan, under which the officers, key employees and directors of the Company will be eligible to receive options to acquire shares of Class A common shares. The Board of Directors administers the plan. Under the terms of the plan, the Board of Directors are able to grant new options exercisable at a price per Class A common share to be determined by the Board of Directors but in no event less than fair market value as of the date of grant. The plan also permits the Board of Directors to award non-vested share units, non-qualified options, stock appreciation rights and non-vested shares.

On March 26, 2014, the Company's Board of Directors approved to cancel the remaining Class A common shares reserved for issuance under the equity incentive plan.

Equity incentive plan – March 26, 2014

On March 26, 2014, the Company adopted an equity incentive plan, under which the officers, key employees and directors of the Company will be eligible to receive options to acquire shares of Class A common shares. A total of 2,000,000 Class A common shares were reserved for issuance under the plan. The Board of Directors administers the plan. Under the terms of the plan, the Board of Directors are able to grant new options exercisable at a price per Class A common share to be determined by the Board of Directors but in no event less than fair market value as of the date of grant. The plan also permits the Board of Directors to award non-vested share units, non-qualified options, stock appreciation rights and non-vested shares.

(a)Options

As of December 31, 2013 and 2014, there were 2,800 options with an exercise price of $120.00 outstanding and exercisable, which vested in 2010. Their weighted average remaining contractual life was 1.89 years as of December 31, 2014.

There were no unvested share options as of December 31, 2013 and 2014.

(b)Non-vested share awards

Until the forfeiture of any non-vested share award, all non-vested share awards regardless of whether vested, the grantee has the right to vote such non-vested share awards, to receive and retain all regular cash dividends paid on such non-vested share awards with no obligation to return the dividend if employment ceases and to exercise all other rights provided that the Company will retain custody of all distributions other than regular cash dividends made or declared with respect to the non-vested share awards. All share awards are conditioned upon the option holder's continued service as an employee of the Company, or a director through the applicable vesting date. The Company estimates the forfeitures of non-vested share awards to be immaterial. The Company will, however, re-evaluate the reasonableness of its assumption at each reporting period.

The accounting guidance relating to the Share based payments describes two generally accepted methods of accounting for non-vested share awards with a graded vesting schedule for financial reporting purposes: 1) the "accelerated method", which treats an award with multiple vesting dates as multiple awards and results in a front‑loading of the costs of the award and 2) the "straight-line method" which treats such awards as a single award. Management has selected the straight-line method with respect to the non-vested share awards because it considers each non-vested share award to be a single award and not multiple awards, regardless of the vesting schedule. Additionally, the "front‑loaded" recognition of compensation cost that results from the accelerated method implies that the related employee services become less valuable as time passes, which management does not believe to be the case. The grant date fair value is considered to be the average between the relevant highest and lowest price recorded on the grant date.

F-42

Paragon Shipping Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars – except for share data)

13.Share Based Payments - Continued

Equity incentive plan - Continued

(b)Non-vested share awards - Continued

The details of the non-vested share awards as of December 31, 2014, are outlined as follows:

Equity incentive plan – October 11, 2006

Grant date	Final Vesting date	Total shares granted		Grant date fair value		Shares cancelled		Shares vested		Non-vested share awards
November 26, 2013	December 31, 2015		200,000	$	5.165		-		100,000		100,000
November 26, 2013	December 31, 2015		12,000	$	5.165		-		6,000		6,000
December 19, 2013	December 31, 2015		16,000	$	6.380		-		8,000		8,000
January 31, 2014	December 31, 2015		32,000	$	6.670		3,000		14,500		14,500
TOTAL			260,000				3,000		128,500		128,500

Equity incentive plan – March 26, 2014

Grant date	Final Vesting date	Total shares granted		Grant date fair value		Shares cancelled		Shares vested		Non-vested share awards
December 10, 2014	December 31, 2016		200,000	$	2.440		-		-		200,000
December 10, 2014	December 31, 2016		20,000	$	2.440		-		-		20,000
TOTAL			220,000				-		-		220,000

F-43

Paragon Shipping Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars – except for share data)

13.Share Based Payments - Continued

Equity incentive plan - Continued

(b)Non-vested share awards - Continued

A summary of the activity for non-vested share awards for the year ended December 31, 2014 is as follows:

	Number of Shares			Weighted Average Fair Value
Non-vested, December 31, 2013		339,000		$	4.75
Granted		252,000			3.64
Cancelled		(3,000	)		6.67
Vested		(239,500	)		4.63
Non-vested, December 31, 2014		348,500		$	4.15

The remaining unrecognized compensation cost amounting to $1,189,936 as of December 31, 2014, is expected to be recognized over the remaining weighted average period of 1.3 year, according to the contractual terms of those non-vested share awards.

On February 26, 2015, 70,000 non-vested Class A common shares were granted to employees of Allseas, with a grant date fair value of $1.865 per share, which will vest ratably over a two-year period commencing on December 31, 2015.

On March 17, 2015, 30,000 non-vested Class A common shares were granted to executive officers of Allseas, with a grant date fair value of $1.310 per share, which will vest ratably over a two-year period commencing on December 31, 2015.

Share based compensation amounted to $2,536,702, $805,469 and $986,416 for the years ended December 31, 2012, 2013 and 2014, respectively and is included in general and administrative expenses.

14.Gain from Vessel Early Redelivery and Other (Income) / Expenses

Gain from vessel early redelivery represents income recognized in connection with the early termination of period time charters resulting from a request of the respective vessel charterers for which the Company received cash compensation of $0, $2,267,818 and $0 in 2012, 2013 and 2014, respectively.

Other income for the year ended December 31, 2012, relates mainly to claim recoveries for damages that had been incurred in one of the Company's vessels of $703,422, and to a cash compensation of $29,137 received from KLC as the first annual installment in connection with the settlement agreement dated September 15, 2011.

Other income for the year ended December 31, 2013, relates mainly to a cash compensation of $402,596 received from KLC representing the present value of the total outstanding cash payments the Company was entitled to receive in connection with the settlement agreement dated September 15, 2011 and pursuant to the amended KLC rehabilitation plan that was approved by the Seoul Central District Court in March 2013, and to claim recoveries of $218,634 relating to a dispute regarding one of the Company's vessels.

During the third quarter of 2014, the Company recognized a charge of $250,283, in relation to a special contribution, which was paid in October 2014. According to the Greek Law 4301/2014, the charge is a voluntary contribution calculated based on the carrying capacity of the Company's fleet, and is payable annually for four fiscal years, until 2017. The special contribution is included in Other expenses in the accompanying consolidated statement of comprehensive loss for the year ended December 31, 2014.

F-44

Paragon Shipping Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars – except for share data)

15.Income Taxes

The Company and its subsidiaries are incorporated either in the Marshall Islands or Liberia and under the laws of the Marshall Islands and Liberia, are not subject to income taxes.

The Company is also subject to United States federal income taxation in respect of income that is derived from the international operation of ships and the performance of services directly related thereto ("Shipping Income"), unless exempt from United States federal income taxation.

If the Company does not qualify for the exemption from tax under Section 883, it will be subject to a 4% tax on its "U.S. source shipping income," imposed without the allowance for any deductions. For these purposes, "U.S. source shipping income" means 50% of the shipping income that will be derived by the Company that is attributable to transportation that begins or ends, but that does not both begin and end, in the United States. For 2012, 2013 and 2014, the Company qualified for the benefits of Section 883.

16.Earnings per Share ("EPS")

The following table sets forth the computation of basic and diluted net loss per share for the years ended December 31, 2012, 2013 and 2014:

Basic EPS – Class A Common Shares

The two class method EPS is calculated as follows:

	Years Ended December 31,
Numerators	2012			2013			2014
Net loss	$	(17,557,125	)	$	(16,953,032	)	$	(51,796,181	)
Less: Net loss attributable to non-vested share awards		444,326			351,877			832,333
Net loss attributable to common shareholders	$	(17,112,799	)	$	(16,601,155	)	$	(50,963,848	)
Denominators
Weighted average common shares outstanding, basic and diluted		6,035,910			12,639,128			23,326,062
Net loss per common share, basic and diluted:	$	(2.84	)	$	(1.31	)	$	(2.18	)

Weighted Average Shares – Basic - In calculating basic EPS, the Company includes the effect of vested share awards and Class A common shares issued for exercised stock option awards from the date they are issued or vested.

Weighted Average Shares – Diluted - In calculating diluted EPS, the Company includes the potential dilution that could occur if securities or other contracts to issue common stock were exercised. In calculating diluted EPS, the following dilutive securities are included in the shares outstanding unless their effect is anti-dilutive:

• Unvested share awards outstanding under the Company's Stock Incentive Plan

• Class A common shares issuable upon exercise of the Company's outstanding options

The Company excluded the dilutive effect of 2,800 (2012 and 2013: 2,800) stock option awards, and 348,500 (2012: 58,335 and 2013: 339,000) non-vested share awards in calculating dilutive EPS for its Class A common shares as their effect was anti-dilutive.

F-45

Paragon Shipping Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars – except for share data)

17.Commitments and Contingencies

From time to time the Company expects to be subject to legal proceedings and claims in the ordinary course of business, principally personal injury and property casualty claims. Such claims, even if lacking in merit, could result in the expenditure of significant financial and managerial resources. The Company is not aware of any claim or contingent liability, which is reasonably possible and should be disclosed, or probable and for which a provision should be established in the accompanying financial statements.

Rental Expense

In relation to the rental agreement with Granitis as discussed in Note 4, fixed future minimum non-cancelable rent commitments as of December 31, 2014, based on the Euro/U.S. dollar exchange rate of €1.0000:$1.2140 as of December 31, 2014, amount to:

For the year ending	Amount
December 31, 2015	$	44,508
December 31, 2016		44,508
December 31, 2017		33,381
Total	$	122,397

Charter Hire

Future minimum charter hire receipts, based on vessels committed to non-cancelable time charter contracts (including fixture recaps) as of December 31, 2014, net of commissions are:

For the year ending	Amount
December 31, 2015	$	4,308,843
Total	$	4,308,843

Charter hires are not generally received when a vessel is off-hire, including time required for normal periodic maintenance of the vessel. In arriving at the minimum future charter revenues, an estimated off-hire time of 18 days to perform any scheduled dry-docking on each vessel has been deducted, and it has been assumed that no additional off-hire time is incurred, although there is no assurance that such estimate will be reflective of the actual off-hire in the future.

Newbuildings

Future newbuilding installments based on the non-cancelable newbuilding contracts as of December 31, 2014 are:

For the year ending	Amount
December 31, 2015	$	101,700,617
Total	$	101,700,617

F-46

Paragon Shipping Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars – except for share data)

18.Subsequent Events

Related Party Agreements

In January 2015, the Company's vessel owning subsidiaries signed amended and restated management agreements with Allseas, and brokerage services agreements with Seacommercial, as discussed in Note 4.

Inactive Non-Vessel Owning Subsidiaries

In March and April 2015, the Company proceeded with the dissolution of certain inactive non-vessel owning subsidiaries, as discussed in Note 1.

Loan and Credit Facilities

In March and April 2015, the Company agreed with Unicredit and Commerzbank to amend certain terms of the facilities, including the deferral or the partial deferral of certain scheduled quarterly installments, and the waiver of certain financial and security cover ratio covenants, as discussed in Note 9.

In addition, on March 27, 2015, the Company agreed with Bank of Ireland to waive 50% of the installment due in the first quarter of 2015, until April 30, 2015, as discussed in Note 9.

Sale of KLC Shares

In April 2015, the Company sold a total of 18,133 KLC shares at an average sale price of $22.62 per share, as discussed in Note 11.

F-47

EX-4.66

Exhibit 4.66

COMPENSATION AGREEMENT

This Compensation Agreement (the "Agreement") is made as of the 2^nd day of January 2015, by and between Paragon Shipping Inc., a Marshall Islands corporation (the "Company"), and Seacommercial Shipping Services S.A., a Liberian corporation ("Seacommercial").

W I T N E S S E T H:

WHEREAS, the Company is engaged directly and/or through its subsidiaries (collectively the "Paragon Group") primarily in the ownership, operation, management and chartering of bulk carriers (the "Paragon Group Business"); and

WHEREAS, Seacommercial has expertise in the shipping industry for providing chartering brokerage services as well as sale and purchase ("S&P") brokerage services; and

WHEREAS, the Company has requested Seacommercial and Seacommercial has agreed, to provide services to the Paragon Group in connection with the chartering and S&P of the Paragon Group Business (the "Brokerage Services"); and

WHEREAS, Seacommercial has entered into S&P and charter brokerage services agreements with certain of the Paragon Group entities (the "Brokerage Agreements"); and

WHEREAS, the Company has determined that the Brokerage Services provided to the Company by Seacommercial pursuant to the Brokerage Agreements are of significant value for the success of the Company, and that the service of Seacommercial should be procured and incentivized; and

                        WHEREAS it is in the best interests of the Company and its shareholders that, in order to retain the services provided to the Company by Seacommercial, in the event that Seacommercial is subject to involuntary termination as the provider of the Brokerage Services to the Company's fleet, Seacommercial should be compensated by the Company with a sum equal to three years of charter brokerage commissions payable under the Brokerage Agreements, based on the current fleet at the time of termination.Furthermore, any existing or other form of termination fee(s) or compensation due to Seacommercial contained within the respective Brokerage Agreements shall become null and void. In this respect relevant addenda would be drawn up accordingly

NOW, THEREFORE, the parties hereby agree as follows:

1.The Company shall procure that Seacommercial shall remain the provider of the Brokerage Services to the Paragon Group at all times.

2.In the event that Seacommercial is terminated without cause as the provider of the Brokerage Services to the Paragon Group Companies, except for the cases provided  in Clauses 11.02 or 11.03 of the Brokerage Agreements or by reason of default by gross negligence or misconduct of the Broker, its Directors, officers and/or employees in the performance under the Brokerage Agreements, such case shall constitute an involuntary termination ("Involuntary Termination").

3.In the event that Seacommercial is subject to Involuntary Termination, the Company should compensate Seacommercial with a sum equal to three years of the charter brokerage commissions payable under the Brokerage Agreements, based on the commissions payable with respect to the charters of the current fleet at the time of termination. Such sum shall be paid in cash to Seacommercial immediately on the date of such termination.

4.This Agreement shall come into effect commencing as of today and shall continue for the period that Seacommercial serves as the Brokerage Services provider of Paragon Group Business (unless sooner terminated on the basis of any other provision of this Agreement) (the "Term").

5.Termination.  This Agreement, unless otherwise agreed in writing between the parties, shall be terminated as follows:

(a)At the end of the Term unless extended by mutual agreement in writing.

(b) The parties, by mutual agreement, may terminate this Agreement at any time.

(c) Either party may terminate this Agreement for any material breach of its terms and provisions by the other party.

6.Assignments.  This Agreement is not assignable by either party without the prior written consent of the other.

7.Entire Agreement.  This Agreement constitutes the entire and only agreement between the parties in relation to its subject matter and replaces and extinguishes all prior agreements, undertakings, arrangements, understandings or statements of any nature made by the parties or any of them whether oral or written with respect to such subject matter.

8.Amendments.  No modification, alteration or waiver of any of the provisions of this Agreement shall be effective unless in writing and signed on behalf of each of the parties. The headings in this Agreement do not form part thereof.

9.Notices.  Every notice, request, demand or other communication under this Agreement shall:

(a)be in writing delivered personally, by courier or served through a process server;

(b)be deemed to have been when delivered personally or through courier or served at the address below; and

(c)be sent:

(i) If to the Company, to:

PARAGON SHIPPING INC.

15 Karamanli Ave.,

Voula 16673,

Athens, Greece

(ii) if to Seacommercial, to:

SEACOMMERCIAL SHIPPING SERVICES S.A.

15 Karamanli Ave.,

Voula 16673,

Athens, Greece

or to such other person or address, as is notified by the relevant party to the other parties to this Agreement and such notification shall not become effective until notice of such change is actually received by the other parties.  Until such change of person or address is notified, any notification to the above addresses are agreed to be validly effected for the purposes of this Agreement.

10.Governing Law and Jurisdiction.

This Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to conflict of laws principles.  Any legal action or proceeding in connection with this Agreement or the performance hereof may be brought in the state and federal courts located in the Borough of Manhattan, City, County and State of New York, and the parties hereby irrevocably submit to the non-exclusive jurisdiction of such courts for the purpose of any such action or proceeding.  The parties hereby irrevocably waive trial by jury in any action, proceeding or claim brought by any party hereto or beneficiary hereof on any matter whatsoever arising out of or in any way connected with this agreement.

This Agreement may be executed in written counterparts which together shall constitute one instrument.

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above written.

SEACOMMERCIAL SHIPPING SERVICES S.A.		PARAGON SHIPPING INC.
By:	/s/ George Skrimizeas	By:	/s/ Robert Perri
Name: George Skrimizeas		Name: Robert Perri
Title: Director		Title: Chief Financial Officer

EX-4.62

Exhibit 4.62

PARAGON SHIPPING INC. NEW 2014 EQUITY INCENTIVE PLAN

MARCH 26, 2014

Paragon Shipping Inc., a Marshall Islands corporation (the "Company"), initially adopted the Paragon Shipping Inc. 2006 Equity Incentive Plan (the "Original Plan") in 2006, under which an aggregate of 1,500,000 shares of Class A common stock of the Company, par value $0.001 per share ("Common Stock"), were reserved for issuance.

The Original Plan was amended and restated in August 2009 (the "Amended and Restated Plan") to increase the total number of shares of Common Stock reserved for issuance under the Amended and Restated Plan to 2,500,000.

The Amended and Restated Plan was further amended and restated in November 2009 (the "Second Amended and Restated Plan") to further increase the total number of shares of Common Stock reserved for issuance under the Second Amended and Restated Plan to 5,500,000.

The Amended and Restated Plan was further amended and restated in October 2012 (the "Third Amended and Restated Plan") to further increase the total number of shares of Common Stock reserved for issuance under the Third Amended and Restated Plan to 9,966,733, which, following the 10-for-1 reverse stock split effectuated on November 5, 2012, was adjusted to 996,673 Class A Common Shares.

As of the date set forth above, 928,272 out of 996,673 shares of Common Stock have been issued under the Third Amended and Restated Plan.

The Compensation Committee of the Company has proposed and the Board of Directors has approved to discontinue the 2006 Equity Incentive Plan as amended by the Amended and Restated Plan, the Second Amended and Restated Plan and the Third Amended and Restated Plan (the "2006 Plan") as per Clauses 1.2 and 3.1 therein, with the effect that (1) outstanding awards granted the 2006 Plan shall remain subject to the terms of such plan and the applicable award agreement and (2) no further awards shall be issued under the 2006 Plan.

ARTICLE I. General

1.1. Purpose

The Paragon Shipping Inc. New 2014  Equity Incentive Plan (the "Plan") is designed to provide certain Key Persons (as defined below), whose initiative and efforts are deemed to be important to the successful conduct of the business of the Company, with incentives to (a) enter into and remain in the service of the Company and its Affiliates (as defined below), (b) acquire a proprietary interest in the success of the Company, (c) maximize their performance and (d) enhance the long-term performance of the Company.

1.2. Administration

(a)  Administration.  The Plan shall be administered by the Compensation Committee of the Company's Board of Directors (the "Board"), or such other committee of the Board as may be designated by the Board to administer the Plan (the "Administrator"); provided that (i) in the event the Company is subject to Section 16 of the U.S. Securities Exchange Act of 1934, as amended (the "1934 Act"), the Administrator shall be composed of two or more directors, each of whom is a "Non‑Employee Director" (a "Non‑Employee Director") under Rule 16b-3 (as promulgated and interpreted by the Securities and Exchange Commission (the "SEC") under the 1934 Act, or any successor rule or regulation thereto as in effect from time to time ("Rule 16b-3")) and (ii) the Administrator shall be composed solely of two or more directors who are "independent directors" under the rules of any stock exchange on which the Company's Common Stock (as defined below) is traded; provided further, however, that, (A)  the requirement in the preceding clause (i) shall apply only when required to exempt an Award (as defined below) intended to qualify for an exemption under the applicable provisions referenced therein, (B) the requirement in the preceding clause (ii) shall apply only when required pursuant to the applicable rules of the applicable stock exchange and (C) if at any time the Administrator is not so composed as required by the preceding provisions of this sentence, that fact will not invalidate any grant made, or action taken, by the Administrator hereunder that otherwise satisfies the terms of the Plan.  Subject to the terms of the Plan, applicable law and the applicable rules and regulations of any stock exchange on which the Common Stock is listed for trading, and in addition to other express powers and authorizations conferred on the Administrator by the Plan, the Administrator shall have the full power and authority to: (1) designate the Key Persons to receive Awards under the Plan; (2) determine the types of Awards granted to a participant under the Plan; (3) determine the number of shares to be covered by, or with respect to which payments, rights or other matters are to be calculated with respect to, Awards; (4) determine the terms and conditions of any Awards; (5) determine whether, and to what extent, and under what circumstances, Awards may be settled or exercised in cash, shares, other securities, other Awards or other property, or cancelled, forfeited or suspended, and the methods by which Awards may be settled, exercised, cancelled, forfeited or suspended; (6) determine whether, to what extent, and under what circumstances cash, shares, other securities, other Awards, other property and other amounts payable with respect to an Award shall be deferred, either automatically or at the election of the holder thereof or the Administrator; (7) construe, interpret and implement the Plan and any Award Agreement (as defined below); (8) prescribe, amend, rescind or waive rules and regulations relating to the Plan, including rules governing its operation, and appoint such agents as it shall deem appropriate for the proper administration of the Plan; (9) correct any defect, supply any omission and reconcile any inconsistency in the Plan or any Award Agreement; and (10) make any other determination and take any other action that the Administrator deems necessary or desirable for the administration of the Plan.  Unless otherwise expressly provided in the Plan, all designations, determinations, interpretations and other decisions under or with respect to the Plan or any Award shall be within the sole discretion of the Administrator, may be made at any time and shall be final, conclusive and binding upon all Persons (as defined below).

(b)  Administrator Action.  Actions of the Administrator shall be taken by the vote of a majority of its members.  Any action may be taken by a written instrument signed by a majority of the Administrator members without notice to the other members, and action so taken shall be fully effective as if it had been taken by a vote at a meeting.  Except to the extent prohibited by applicable law, the applicable rules of a stock exchange or any charter, by-laws or other agreement governing the Administrator, the Administrator may allocate all or any portion of its responsibilities and powers to any one or more of its members and may delegate all or any part of its responsibilities to any Person or Persons selected by it; provided, however, that in no event shall an officer of the Company be delegated the authority to grant Awards to, or amend Awards held by, the following individuals: (i) individuals who are subject to Section 16 of the 1934 Act, to the extent applicable, or (ii) officers of the Company to whom authority to grant or amend Awards has been delegated hereunder or directors of the Company; provided, further, that any delegation of administrative authority shall only be permitted to the extent it is permissible under applicable securities laws (including, without limitation, Rule 16b-3, to the extent applicable) and the rules of any applicable stock exchange.  Any delegation hereunder shall be subject to the restrictions and limits that the Administrator specifies at the time of such delegation, and the Administrator may at any time rescind the authority so delegated or appoint a new delegatee.  At all times, the delegatee appointed under this Section 1.2(b) shall serve in such capacity at the pleasure of the Administrator.

(c)  Indemnification.  No member of the Board, the Administrator or any officer or employee of the Company or an Affiliate or any of their agents (each such Person, a "Covered Person") shall be liable for any action taken or omitted to be taken or any determination made in good faith with respect to the Plan or any Award hereunder.  Each Covered Person shall be indemnified and held harmless by the Company against and from (i) any loss, cost, liability or expense (including attorneys' fees) that may be imposed upon or incurred by such Covered Person in connection with or resulting from any action, suit or proceeding to which such Covered Person may be a party or in which such Covered Person may be involved by reason of any action taken or omitted to be taken under the Plan or any Award Agreement and (ii) any and all amounts paid by such Covered Person, with the Company's approval, in settlement thereof, or paid by such Covered Person in satisfaction of any judgment in any such action, suit or proceeding against such Covered Person; provided that the Company shall have the right, at its own expense, to assume and defend any such action, suit or proceeding and, once the Company gives notice of its intent to assume the defense, the Company shall have sole control over such defense with counsel of the Company's choice.  The foregoing right of indemnification shall not be available to a Covered Person to the extent that a court of competent jurisdiction in a final judgment or other final adjudication, in either case not subject to further appeal, determines that the acts or omissions of such Covered Person giving rise to the indemnification claim resulted from such Covered Person's bad faith, fraud or willful criminal act or omission or that such right of indemnification is otherwise prohibited by law or by the Company's Articles of Incorporation or Bylaws (in each case, as amended and/or restated).  The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which Covered Persons may be entitled under the Company's Articles of Incorporation or Bylaws (in each case, as amended and/or restated), as a matter of law, or otherwise, or any other power that the Company may have to indemnify such Persons or hold them harmless.

(d)  Delegation of Authority to Senior Officers.  The Administrator may, in accordance with and subject to the terms of Section 1.2(b), delegate, on such terms and conditions as it determines, to one or more senior officers of the Company the authority to make grants of Awards to Key Persons of the Company and its Subsidiaries (as defined below) (including any such prospective employee) and consultants or service providers to (including Persons who are employed by or provide services to any entity that is itself a consultant or service provider to) the Company and its Subsidiaries.

(e)  Awards to Non-Employee Directors.  Notwithstanding anything to the contrary contained herein, the Board may, in its sole discretion, at any time and from time to time, grant Awards to Non-Employee Directors or administer the Plan with respect to such Awards.  In any such case, the Board shall have all the authority and responsibility granted to the Administrator herein with respect to such Awards.

1.3. Persons Eligible for Awards

The Persons eligible to receive Awards under the Plan are those directors, officers and employees (including any prospective officer or employee) of the Company and its Subsidiaries and Affiliates and consultants and service providers to (including Persons who are employed by or provide services to any entity that is itself a consultant or service provider to) the Company and its Subsidiaries and Affiliates (collectively, "Key Persons") as the Administrator shall select.

1.4. Types of Awards

Awards may be made under the Plan in the form of (a) stock options, (b) stock appreciation rights, (c) restricted stock, (d) restricted stock units, (e) unrestricted stock, (f) dividend equivalents and (g) other equity-based or equity-related Awards, all as more fully set forth in the Plan.  The term "Award" means any of the foregoing that are granted under the Plan.

1.5. Shares Available for Awards; Adjustments for Changes in Capitalization

(a)  Maximum Number.  Subject to adjustment as provided in Section 1.5(c), the aggregate number of shares of Common Stock with respect to which Awards may at any time be granted under the Plan shall be 2,000,000.  The following shares of Common Stock shall again become available for Awards under the Plan: (i) any shares that are subject to an Award under the Plan and that remain unissued upon the cancellation or termination of such Award for any reason whatsoever; (ii) any shares of restricted stock forfeited pursuant to the Plan or the applicable Award Agreement; provided that any dividend equivalent rights with respect to such shares that have not theretofore been directly remitted to the grantee are also forfeited; and (iii) any shares in respect of which an Award is settled for cash without the delivery of shares to the grantee.  Any shares tendered or withheld to satisfy the grant or exercise price or tax withholding obligation pursuant to any Award shall again become available to be delivered pursuant to Awards under the Plan.

(b)  Source of Shares.  Shares issued pursuant to the Plan may be authorized but unissued Common Stock or treasury shares.  The Administrator may direct that any stock certificate evidencing shares issued pursuant to the Plan shall bear a legend setting forth such restrictions on transferability as may apply to such shares.

(c)  Adjustments.  i)  In the event that any dividend or other distribution (whether in the form of cash, Company shares, other securities or other property), stock split, reverse stock split, reorganization, merger, consolidation, split-up, combination, repurchase or exchange of Company shares or other securities of the Company, issuance of warrants or other rights to purchase Company shares or other securities of the Company, or other similar corporate transaction or event, other than an Equity Restructuring (as defined below), affects the Company shares such that an adjustment is determined by the Administrator to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan or with respect to an Award, then the Administrator shall, in such manner as it may deem equitable, adjust any or all of the number of shares or other securities of the Company (or number and kind of other securities or property) with respect to which Awards may be granted under the Plan.

(ii)  The Administrator is authorized to make adjustments in the terms and conditions of, and the criteria included in, Awards in recognition of unusual or nonrecurring events (including the events described in Section 1.5(c)(i) or the occurrence of a Change in Control (as defined below), other than an Equity Restructuring) affecting the Company, any Affiliate, or the financial statements of the Company or any Affiliate, or of changes in applicable rules, rulings, regulations or other requirements of any governmental body or securities exchange, accounting principles or law, whenever the Administrator determines that such adjustments are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan or with respect to an Award, including providing for (A) adjustment to (1) the number of shares or other securities of the Company (or number and kind of other securities or property) subject to outstanding Awards or to which outstanding Awards relate and (2) the Exercise Price (as defined below) with respect to any Award and (B) a substitution or assumption of Awards, accelerating the exercisability or vesting of, or lapse of restrictions on, Awards, or accelerating the termination of Awards by providing for a period of time for exercise prior to the occurrence of such event, or, if deemed appropriate or desirable, providing for a cash payment to the holder of an outstanding Award in consideration for the cancellation of such Award (it being understood that, in such event, any option or stock appreciation right having a per share Exercise Price equal to, or in excess of, the Fair Market Value (as defined below) of a share subject to such option or stock appreciation right may be cancelled and terminated without any payment or consideration therefor); provided, however, that with respect to options and stock appreciation rights, unless otherwise determined by the Administrator, such adjustment shall be made in accordance with the provisions of Section 424(h) of the Code (as defined below).

(iii)  In the event of (A) a dissolution or liquidation of the Company, (B) a sale of all or substantially all the Company's assets or (C) a merger, reorganization or consolidation involving the Company or one of its Subsidiaries, the Administrator shall have the power to:

(1)  provide that outstanding options, stock appreciation rights, restricted stock units (including any related dividend equivalent right) and/or other Awards granted under the Plan shall either continue in effect, be assumed or an equivalent award shall be substituted therefor by the successor entity or a parent or subsidiary entity;

(2)  cancel, effective immediately prior to the occurrence of such event, options, stock appreciation rights, restricted stock units (including each dividend equivalent right related thereto) and/or other Awards granted under the Plan outstanding immediately prior to such event (whether or not then exercisable) and, in full consideration of such cancellation, pay to the holder of such Award a cash payment in an amount equal to the excess, if any, of the Fair Market Value (as of a date specified by the Administrator) of the shares subject to such Award (or the value of such Award, as determined by the Administrator, if not based on the Fair Market Value of shares) over the aggregate Exercise Price of such Award (or the grant price of such Award, if any, if applicable)(it being understood that, in such event, any option or stock appreciation right having a per share Exercise Price equal to, or in excess of, the Fair Market Value of a share subject to such option or stock appreciation right may be cancelled and terminated without any payment or consideration therefor); or

(3)  notify the holder of an option or stock appreciation right in writing or electronically that each option and stock appreciation right shall be fully vested and exercisable for a period of 30 days from the date of such notice, or such shorter period as the Administrator may determine to be reasonable, and the option or stock appreciation right shall terminate upon the expiration of such period (which period shall expire no later than immediately prior to the consummation of the corporate transaction).

(iv)  In connection with the occurrence of any Equity Restructuring, and notwithstanding anything to the contrary in this Section 1.5(c):

(A)  the number and type of securities or other property subject to each outstanding Award and the Exercise Price or grant price thereof, if applicable, shall be equitably adjusted; and

(B)  the Administrator shall make such equitable adjustments, if any, as the Administrator may deem appropriate to reflect such Equity Restructuring with respect to the aggregate number and kind of shares that may be issued under the Plan (including, but not limited to, adjustment of the limitation set forth in Section 1.5(a)).  The adjustments provided under this Section 1.5(c)(iv) shall be nondiscretionary and shall be final and binding on the affected participant and the Company.

1.6. Definitions of Certain Terms

(a)  The "Fair Market Value" of a share of Common Stock on any day shall be the closing price on the New York Stock Exchange, or such other primary stock exchange upon which such shares are then listed, as reported for such day in The Wall Street Journal (or, if not reported in The Wall Street Journal, such other reliable source as the Administrator may determine), or, if no such price is reported for such day, the average of the high bid and low asked price of Common Stock as reported for such day.  If no quotation is made for the applicable day, the Fair Market Value of a share of Common Stock on such day shall be determined in the manner set forth in the preceding sentence for the next preceding trading day.  Notwithstanding the foregoing, if there is no reported closing price or high bid/low asked price that satisfies the preceding sentences, or if otherwise deemed necessary or appropriate by the Administrator, the Fair Market Value of a share of Common Stock on any day shall be determined by such methods or procedures as shall be established from time to time by the Administrator.  The "Fair Market Value" of any property other than Common Stock shall be the fair market value of such property determined by such methods or procedures as shall be established from time to time by the Administrator.

(b)  Unless otherwise set forth in the applicable Award Agreement, in connection with a termination of employment or consultancy/service relationship or a dismissal from Board membership, for purposes of the Plan, the term "for Cause" shall be defined as follows:

(i)  if there is an employment, severance, consulting, service, change in control or other agreement governing the relationship between the grantee, on the one hand, and the Company or an Affiliate, on the other hand, that contains a definition of "cause" (or similar phrase), for purposes of the Plan, the term "for Cause" shall mean those acts or omissions that would constitute "cause" under such agreement; or

(ii)  if the preceding clause (i) is not applicable to the grantee, for purposes of the Plan, the term "for Cause" shall mean any of the following:

(A)  any failure by the grantee substantially to perform the grantee's employment or consulting/service or Board membership duties;

(B)  any excessive unauthorized absenteeism by the grantee;

(C)  any refusal by the grantee to obey the lawful orders of the Board or any other Person to whom the grantee reports;

(D)  any act or omission by the grantee that is or may be injurious to the Company or any Affiliate, whether monetarily, reputationally or otherwise;

(E)  any act by the grantee that is inconsistent with the best interests of the Company or any Affiliate;

(F)  the grantee's gross negligence that is injurious to the Company or any Affiliate, whether monetarily, reputationally or otherwise;

(G)  the grantee's material violation of any of the policies of the Company or an Affiliate, as applicable, including, without limitation, those policies relating to discrimination or sexual harassment;

(H)  the grantee's material breach of his or her employment or service contract with the Company or any Affiliate;

(I)  the grantee's unauthorized (1) removal from the premises of the Company or any Affiliate of any document (in any medium or form) relating to the Company or any Affiliate or the customers or clients of the Company or any Affiliate or (2) disclosure to any Person of any of the Company's, or any Affiliate's, confidential or proprietary information;

(J)  the grantee's being convicted of, or entering a plea of guilty or nolo contendere to, any crime that constitutes a felony or involves moral turpitude; and

(K)  the grantee's commission of any act involving dishonesty or fraud.

Any rights the Company or any Affiliate may have under the Plan in respect of the events giving rise to a termination or dismissal "for Cause" shall be in addition to any other rights the Company or any Affiliate may have under any other agreement with a grantee or at law or in equity.  Any determination of whether a grantee's employment or consultancy/service relationship is (or is deemed to have been) terminated "for Cause" shall be made by the Administrator.  If, subsequent to a grantee's voluntary termination of employment or consultancy/service relationship or involuntary termination of employment or consultancy/service relationship without Cause, it is discovered that the grantee's employment or consultancy/service relationship could have been terminated "for Cause", the Administrator may deem such grantee's employment or consultancy/service relationship to have been terminated "for Cause" upon such discovery and determination by the Administrator.

(c)  "Affiliate" shall mean (i) any entity that, directly or indirectly, is controlled by, controls or is under common control with, the Company and (ii) any entity in which the Company has a significant equity interest, in either case as determined by the Administrator.

(d)  "Subsidiary" shall mean any entity in which the Company, directly or indirectly, has a 50% or more equity interest.

(e)  "Exercise Price" shall mean (i) in the case of options, the price specified in the applicable Award Agreement as the price-per-share at which such share can be purchased pursuant to the option or (ii) in the case of stock appreciation rights, the price specified in the applicable Award Agreement as the reference price-per-share used to calculate the amount payable to the grantee.

(f)  Unless otherwise set forth in the applicable Award Agreement, "Disability" shall mean the grantee's being unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or the grantee's, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the grantee's employer.  The existence of a Disability shall be determined by the Administrator.

(g)  "Equity Restructuring" shall mean a non-reciprocal transaction between the Company and its stockholders, such as a stock dividend, stock split, spin-off, rights offering or recapitalization through a large, nonrecurring cash dividend, that affects the shares of Common Stock (or other securities of the Company) or the share price thereof and causes a change in the per share value of the shares underlying outstanding Awards.

(h)  "Person" shall mean any individual, firm, corporation, partnership, limited liability company, trust, incorporated or unincorporated association, joint venture, joint stock company, governmental body or other entity of any kind.

(i)  "Repricing" shall mean (i) lowering the Exercise Price of an option or a stock appreciation right after it has been granted, (ii) the cancellation of an option or a stock appreciation right in exchange for cash or another Award when the Exercise Price exceeds the Fair Market Value of the underlying shares subject to the Award and (iii) any other action with respect to an option or a stock appreciation right that is treated as a repricing under (A) generally accepted accounting principles or (B) any applicable stock exchange rules.

(j)  "Code" shall mean the U.S. Internal Revenue Code of 1986, as amended.

ARTICLE II. Awards Under The Plan

2.1. Agreements Evidencing Awards

Each Award granted under the Plan shall be evidenced by a written certificate ("Award Agreement"), which shall contain such provisions as the Administrator may deem necessary or desirable and which may, but need not, require execution or acknowledgment by a grantee.  The Award shall be subject to all of the terms and provisions of the Plan and the applicable Award Agreement.

2.2. Grant of Stock Options and Stock Appreciation Rights

(a)  Stock Option Grants.  The Administrator may grant stock options ("options") to purchase shares of Common Stock from the Company to such Key Persons, and in such amounts and subject to such vesting and forfeiture provisions and other terms and conditions, as the Administrator shall determine, subject to the provisions of the Plan.  No option will be treated as an "incentive stock option" for purposes of the Code.  It shall be the intent of the Administrator to not grant an Award in the form of stock options to any Key Person who is then subject to the requirements of Section 409A of the Code with respect to such Award if the Common Stock underlying such Award does not then qualify as "service recipient stock" for purposes of Section 409A.  Furthermore, it shall be the intent of the Administrator, in granting options to Key Persons who are subject to Section 409A and/or 457 of the Code, to structure such options so as to comply with the requirements of Section 409A and/or 457 of the Code, as applicable.

(b)  Stock Appreciation Right Grants; Types of Stock Appreciation Rights.  The Administrator may grant stock appreciation rights to such Key Persons, and in such amounts and subject to such vesting and forfeiture provisions and other terms and conditions, as the Administrator shall determine, subject to the provisions of the Plan.  The terms of a stock appreciation right may provide that it shall be automatically exercised for a payment upon the happening of a specified event that is outside the control of the grantee and that it shall not be otherwise exercisable.  Stock appreciation rights may be granted in connection with all or any part of, or independently of, any option granted under the Plan.  It shall be the intent of the Administrator to not grant an Award in the form of stock appreciation rights to any Key Person (i) who is then subject to the requirements of Section 409A of the Code with respect to such Award if the Common Stock underlying such Award does not then qualify as "service recipient stock" for purposes of Section 409A or (ii) if such Award would create adverse tax consequences for such Key Person under Section 457A of the Code.  Furthermore, it shall be the intent of the Administrator, in granting stock appreciation rights to Key Persons who are subject to Section 409A and/or 457 of the Code, to structure such stock appreciation rights so as to comply with the requirements of Section 409A and/or 457 of the Code, to the extent applicable.

(c)  Nature of Stock Appreciation Rights.  The grantee of a stock appreciation right shall have the right, subject to the terms of the Plan and the applicable Award Agreement, to receive from the Company an amount equal to (i) the excess of the Fair Market Value of a share of Common Stock on the date of exercise of the stock appreciation right over the Exercise Price of the stock appreciation right, multiplied by (ii) the number of shares with respect to which the stock appreciation right is exercised.  Each Award Agreement with respect to a stock appreciation right shall set forth the Exercise Price of such Award and, unless otherwise specifically provided in the Award Agreement, the Exercise Price of a stock appreciation right shall equal the Fair Market Value of a share of Common Stock on the date of grant; provided that in no event may such Exercise Price be less than the greater of (A) the Fair Market Value of a share of Common Stock on the date of grant and (B) the par value of a share of Common Stock.  Payment upon exercise of a stock appreciation right shall be in cash or in shares of Common Stock (valued at their Fair Market Value on the date of exercise of the stock appreciation right) or any combination of both, all as the Administrator shall determine.  Repricing of stock appreciation rights granted under the Plan shall not be permitted (1) to the extent such action could cause adverse tax consequences to the grantee under Sections 409A or 457A of the Code or (2) without prior shareholder approval, to the extent such approval would be required to be obtained by the Company pursuant to the applicable rules of any applicable stock exchange on which the Common Stock is then listed, and any action that would be deemed to result in a Repricing of a stock appreciation right shall be deemed null and void if it would cause such adverse tax consequences or if any requisite shareholder approval related thereto is not obtained prior to the effective time of such action.  Upon the exercise of a stock appreciation right granted in connection with an option, the number of shares subject to the option shall be reduced by the number of shares with respect to which the stock appreciation right is exercised.  Upon the exercise of an option in connection with which a stock appreciation right has been granted, the number of shares subject to the stock appreciation right shall be reduced by the number of shares with respect to which the option is exercised.

(d)  Option Exercise Price.  Each Award Agreement with respect to an option shall set forth the Exercise Price of such Award and, unless otherwise specifically provided in the Award Agreement, the Exercise Price of an option shall equal the Fair Market Value of a share of Common Stock on the date of grant; provided that in no event may such Exercise Price be less than the greater of (i) the Fair Market Value of a share of Common Stock on the date of grant and (ii) the par value of a share of Common Stock.  Repricing of options granted under the Plan shall not be permitted (1) to the extent such action could cause adverse tax consequences to the grantee under Sections 409A or 457A of the Code or (2) without prior shareholder approval, to the extent such approval would be required to be obtained by the Company pursuant to the applicable rules of any applicable stock exchange on which the Common Stock is then listed, and any action that would be deemed to result in a Repricing of an option shall be deemed null and void if it would cause such adverse tax consequences or if any requisite shareholder approval related thereto is not obtained prior to the effective time of such action.

2.3. Exercise of Options and Stock Appreciation Rights

Subject to the other provisions of this Article II and the Plan, each option and stock appreciation right granted under the Plan shall be exercisable as follows:

(a)  Timing and Extent of Exercise.  Options and stock appreciation rights shall be exercisable at such times and under such conditions as determined by the Administrator and set forth in the corresponding Award Agreement, but in no event shall any portion of such Award be exercisable subsequent to the tenth anniversary of the date on which such Award was granted.  Unless the applicable Award Agreement otherwise provides, an option or stock appreciation right may be exercised from time to time as to all or part of the shares as to which such Award is then exercisable.

(b)  Notice of Exercise.  An option or stock appreciation right shall be exercised by the filing of a written notice with the Company or the Company's designated exchange agent (the "Exchange Agent"), on such form and in such manner as the Administrator shall prescribe.

(c)  Payment of Exercise Price.  Any written notice of exercise of an option shall be accompanied by payment for the shares being purchased.  Such payment shall be made: (i) by certified or official bank check (or the equivalent thereof acceptable to the Company or its Exchange Agent) for the full option Exercise Price; (ii) with the consent of the Administrator, which consent shall be given or withheld in the sole discretion of the Administrator, by delivery of shares of Common Stock having a Fair Market Value (determined as of the exercise date) equal to all or part of the option Exercise Price and a certified or official bank check (or the equivalent thereof acceptable to the Company or its Exchange Agent) for any remaining portion of the full option Exercise Price; or (iii) at the sole discretion of the Administrator and to the extent permitted by law, by such other provision, consistent with the terms of the Plan, as the Administrator may from time to time prescribe (whether directly or indirectly through the Exchange Agent), or by any combination of the foregoing payment methods.

(d)  Delivery of Certificates Upon Exercise.  Subject to Sections 3.2, 3.4 and 3.13, promptly after receiving payment of the full option Exercise Price, or after receiving notice of the exercise of a stock appreciation right for which the Administrator determines payment will be made partly or entirely in shares, the Company or its Exchange Agent shall (i) deliver to the grantee, or to such other Person as may then have the right to exercise the Award, a certificate or certificates for the shares of Common Stock for which the Award has been exercised or, in the case of stock appreciation rights, for which the Administrator determines will be made in shares or (ii) establish an account evidencing ownership of the stock in uncertificated form. If the method of payment employed upon an option exercise so requires, and if applicable law permits, an optionee may direct the Company or its Exchange Agent, as the case may be, to deliver the stock certificate(s) to the optionee's stockbroker.

(e)  No Stockholder Rights.  No grantee of an option or stock appreciation right (or other Person having the right to exercise such Award) shall have any of the rights of a stockholder of the Company with respect to shares subject to such Award until the issuance of a stock certificate to such Person for such shares or an account in the name of the grantee evidences ownership of stock in uncertificated form.  Except as otherwise provided in Section 1.5(c), no adjustment shall be made for dividends, distributions or other rights (whether ordinary or extraordinary, and whether in cash, securities or other property) for which the record date is prior to the date such stock certificate is issued or the date an account evidencing ownership of the stock in uncertificated form notes receipt of such stock.

2.4. Termination of Employment/Service; Death Subsequent to a Termination of Employment/Service

(a)  General Rule.  Except to the extent otherwise provided in paragraphs (b), (c), (d), (e) or (f) of this Section 2.4 or Section 3.5(b)(iii), a grantee who incurs a termination of employment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates may exercise any outstanding option or stock appreciation right on the following terms and conditions: (i) exercise may be made only to the extent that the grantee was entitled to exercise the Award on the date of termination of employment or consultancy/service relationship, as applicable; and (ii) exercise must occur within three months after termination of employment or consultancy/service relationship but in no event after the original expiration date of the Award; it being understood that then outstanding options and stock appreciation rights shall not be affected by a change of employment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates so long as the grantee continues to be a director, officer or employee of, or a consultant or service provider to (or a Person employed by or providing services to any entity that that is itself a consultant or service provider to), the Company or any of its Subsidiaries or Affiliates.

(b)  Dismissal "for Cause".  If a grantee incurs a termination of employment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates "for Cause", all options and stock appreciation rights not theretofore exercised shall immediately terminate upon such termination of employment or consultancy/service relationship.

(c)  Retirement.  If a grantee incurs a termination of employment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates as the result of his or her retirement (as defined below), then any outstanding option or stock appreciation right shall, to the extent exercisable at the time of such retirement, remain exercisable for a period of three years after such retirement; provided that in no event may such option or stock appreciation right be exercised following the original expiration date of the Award.  For this purpose, unless otherwise set forth in the applicable Award Agreement, "retirement" shall mean a grantee's resignation of employment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates, with the Company's or its applicable Affiliate's prior consent, on or after (i) his or her 65th birthday, (ii) the date on which he or she has attained age 60 and completed at least five years of service with the Company or one or more of its Affiliates (using any method of calculation the Administrator deems appropriate) or (iii) if approved by the Administrator, on or after his or her having completed at least 20 years of service with the Company or one or more of its Affiliates (using any method of calculation the Administrator deems appropriate).

(d)  Disability.  If a grantee incurs a termination of employment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates by reason of a Disability, then any outstanding option or stock appreciation right shall, to the extent exercisable at the time of such termination, remain exercisable for a period of one year after such termination; provided that in no event may such option or stock appreciation right be exercised following the original expiration date of the Award.

(e)  Death.

(i)  Termination of Employment/Service as a Result of Grantee's Death.  If a grantee incurs a termination of employment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates as the result of his or her death, then any outstanding option or stock appreciation right shall, to the extent exercisable at the time of such death, remain exercisable for a period of one year after such death; provided that in no event may such option or stock appreciation right be exercised following the original expiration date of the Award.

(ii)  Restrictions on Exercise Following Death.  Any such exercise of an Award following a grantee's death shall be made only by the grantee's executor or administrator or other duly appointed representative reasonably acceptable to the Administrator, unless the grantee's will specifically disposes of such Award, in which case such exercise shall be made only by the recipient of such specific disposition.  If a grantee's personal representative or the recipient of a specific disposition under the grantee's will shall be entitled to exercise any Award pursuant to the preceding sentence, such representative or recipient shall be bound by all the terms and conditions of the Plan and the applicable Award Agreement which would have applied to the grantee.

(f)  Administrator Discretion.  The Administrator may, in writing, waive or modify the application of the foregoing provisions of this Section 2.4.

2.5. Transferability of Options and Stock Appreciation Rights

Except as otherwise specifically provided in this Plan or the applicable Award Agreement evidencing an option or stock appreciation right, during the lifetime of a grantee, each such Award granted to a grantee shall be exercisable only by the grantee, and no such Award may be sold, assigned, transferred, pledged or otherwise encumbered or disposed of other than by will or by the laws of descent and distribution.  The Administrator may, in any applicable Award Agreement evidencing an option or stock appreciation right, permit a grantee to transfer all or some of the options or stock appreciation rights to (a) the grantee's spouse, children or grandchildren ("Immediate Family Members"), (b) a trust or trusts for the exclusive benefit of such Immediate Family Members or (c) other parties approved by the Administrator.  Following any such transfer, any transferred options and stock appreciation rights shall continue to be subject to the same terms and conditions as were applicable immediately prior to the transfer.

2.6. Grant of Restricted Stock

(a)  Restricted Stock Grants.  The Administrator may grant restricted shares of Common Stock to such Key Persons, in such amounts and subject to such vesting and forfeiture provisions and other terms and conditions as the Administrator shall determine, subject to the provisions of the Plan.  A grantee of a restricted stock Award shall have no rights with respect to such Award unless such grantee accepts the Award within such period as the Administrator shall specify by accepting delivery of a restricted stock Award Agreement in such form as the Administrator shall determine.

(b)  Issuance of Stock Certificate.  Promptly after a grantee accepts a restricted stock Award in accordance with Section 2.6(a), subject to Sections 3.2, 3.4 and 3.13, the Company or its Exchange Agent shall issue to the grantee a stock certificate or stock certificates for the shares of Common Stock covered by the Award or shall establish an account evidencing ownership of the stock in uncertificated form.  Upon the issuance of such stock certificates, or establishment of such account, the grantee shall have the rights of a stockholder with respect to the restricted stock, subject to: (i) the nontransferability restrictions and forfeiture provisions described in the Plan (including paragraphs (d) and (e) of this Section 2.6); (ii) in the Administrator's sole discretion, a requirement, as set forth in the Award Agreement, that any dividends paid on such shares shall be held in escrow and, unless otherwise determined by the Administrator, shall remain forfeitable until all restrictions on such shares have lapsed; and (iii) any other restrictions and conditions contained in the applicable Award Agreement.

(c)  Custody of Stock Certificate.  Unless the Administrator shall otherwise determine, any stock certificates issued evidencing shares of restricted stock shall remain in the possession of the Company (or such other custodian as may be designated by the Administrator) until such shares are free of any restrictions specified in the applicable Award Agreement.  The Administrator may direct that such stock certificates bear a legend setting forth the applicable restrictions on transferability.

(d)  Nontransferability.  Shares of restricted stock may not be sold, assigned, transferred, pledged or otherwise encumbered or disposed of prior to the lapsing of all restrictions thereon, except as otherwise specifically provided in this Plan or the applicable Award Agreement.  The Administrator at the time of grant shall specify the date or dates (which may depend upon or be related to the attainment of performance goals and other conditions) on which the nontransferability of the restricted stock shall lapse.

(e)  Consequence of Termination of Employment/Service.  Unless otherwise set forth in the applicable Award Agreement, (i) a grantee's termination of employment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates for any reason (other than death or Disability) shall cause the immediate forfeiture of all shares of restricted stock that have not yet vested as of the date of such termination of employment or consultancy/service relationship and (ii) if a grantee incurs a termination of employment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates as the result of his or her death or Disability, all shares of restricted stock that have not yet vested as of the date of such termination shall immediately vest as of such date; it being understood that then outstanding restricted stock Awards shall not be affected by a change of employment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates so long as the grantee continues to be a director, officer or employee of, or a consultant or service provider to (or a Person employed by or providing services to any entity that that is itself a consultant or service provider to), the Company or any of its Subsidiaries or Affiliates.  Unless otherwise determined by the Administrator, all dividends paid on shares forfeited under this Section 2.6(e) that have not theretofore been directly remitted to the grantee shall also be forfeited, whether by termination of any escrow arrangement under which such dividends are held or otherwise.  The Administrator may, in writing, waive or modify the application of the foregoing provisions of this Section 2.6(e).

2.7. Grant of Restricted Stock Units

(a)  Restricted Stock Unit Grants.  The Administrator may grant restricted stock units to such Key Persons, and in such amounts and subject to such vesting and forfeiture provisions and other terms and conditions, as the Administrator shall determine, subject to the provisions of the Plan.  A restricted stock unit granted under the Plan shall confer upon the grantee a right to receive from the Company, conditioned upon the occurrence of such vesting event as shall be determined by the Administrator and specified in the Award Agreement, the number of such grantee's restricted stock units that vest upon the occurrence of such vesting event multiplied by the Fair Market Value of a share of Common Stock on the date of vesting.  Payment upon vesting of a restricted stock unit shall be in cash or in shares of Common Stock (valued at their Fair Market Value on the date of vesting) or both, all as the Administrator shall determine, and such payments shall be made to the grantee at such time as provided in the Award Agreement, which the Administrator shall intend to be (i) if Section 409A of the Code is applicable to the grantee, within the period required by Section 409A such that it qualifies as a "short-term deferral" pursuant to Section 409A and the Treasury Regulations issued thereunder, unless the Administrator shall provide for deferral of the Award intended to comply with Section 409A, (ii) if Section 457A of the Code is applicable to the grantee, within the period required by Section 457A(d)(3)(B) such that it qualifies for the exemption thereunder, or (iii) if Sections 409A and 457A of the Code are not applicable to the grantee, at such time as determined by the Administrator.

(b)  Dividend Equivalents.  The Administrator may include in any Award Agreement with respect to a restricted stock unit a dividend equivalent right entitling the grantee to receive amounts equal to the ordinary dividends that would be paid, during the time such Award is outstanding and unvested, and/or, if payment of the vested Award is deferred, during the period of such deferral following such vesting event, on the shares of Common Stock underlying such Award if such shares were then outstanding.  In the event such a provision is included in a Award Agreement, the Administrator shall determine whether such payments shall be (i) paid to the holder of the Award, as specified in the Award Agreement, either (A) at the same time as the underlying dividends are paid, regardless of the fact that the restricted stock unit has not theretofore vested, (B) at the time at which the Award's vesting event occurs, conditioned upon the occurrence of the vesting event, (C) once the Award has vested, at the same time as the underlying dividends are paid, regardless of the fact that payment of the vested restricted stock unit has been deferred, and/or (D) at the time at which the corresponding vested restricted stock units are paid, (ii) made in cash, shares of Common Stock or other property and (iii) subject to such other vesting and forfeiture provisions and other terms and conditions as the Administrator shall deem appropriate and as shall be set forth in the Award Agreement.

(c)  Consequence of Termination of Employment/Service.  Unless otherwise set forth in the applicable Award Agreement, (i) a grantee's termination of employment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates for any reason (other than death or Disability) shall cause the immediate forfeiture of all restricted stock units that have not yet vested as of the date of such termination of employment or consultancy/service relationship and (ii) if a grantee incurs a termination of employment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates as the result of his or her death or Disability, all restricted stock units that have not yet vested as of the date of such termination shall immediately vest as of such date; it being understood that then outstanding restricted stock units shall not be affected by a change of employment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates so long as the grantee continues to be a director, officer or employee of, or a consultant or service provider to (or a Person employed by or providing services to any entity that that is itself a consultant or service provider to), the Company or any of its Subsidiaries or Affiliates.  Unless otherwise determined by the Administrator, any dividend equivalent rights on any restricted stock units forfeited under this Section 2.7(c) that have not theretofore been directly remitted to the grantee shall also be forfeited, whether by termination of any escrow arrangement under which such dividends are held or otherwise.  The Administrator may, in writing, waive or modify the application of the foregoing provisions of this Section 2.7(c).

(d)  No Stockholder Rights.  No grantee of a restricted stock unit shall have any of the rights of a stockholder of the Company with respect to such Award unless and until a stock certificate is issued with respect to such Award upon the vesting of such Award or an account in the name of the grantee evidences ownership of stock in uncertificated form (it being understood that the Administrator shall determine whether to pay any vested restricted stock unit in the form of cash or Company shares or both), which issuance shall be subject to Sections 3.2, 3.4 and 3.13.  Except as otherwise provided in Section 1.5(c), no adjustment to any restricted stock unit shall be made for dividends, distributions or other rights (whether ordinary or extraordinary, and whether in cash, securities or other property) for which the record date is prior to the date such stock certificate, if any, is issued or the date an account evidencing ownership of the stock in uncertificated form notes receipt of such stock.

(e)  Transferability of Restricted Stock Units.  Except as otherwise specifically provided in this Plan or the applicable Award Agreement evidencing a restricted stock unit, no restricted stock unit granted under the Plan may be sold, assigned, transferred, pledged or otherwise encumbered or disposed of other than by will or by the laws of descent and distribution.  The Administrator may, in any applicable Award Agreement evidencing a restricted stock unit, permit a grantee to transfer all or some of the restricted stock units to (i) the grantee's Immediate Family Members, (ii) a trust or trusts for the exclusive benefit of such Immediate Family Members or (iii) other parties approved by the Administrator.  Following any such transfer, any transferred restricted stock units shall continue to be subject to the same terms and conditions as were applicable immediately prior to the transfer.

2.8. Grant of Unrestricted Stock

The Administrator may grant (or sell at a purchase price at least equal to par value) shares of Common Stock free of restrictions under the Plan to such Key Persons and in such amounts and subject to such forfeiture provisions as the Administrator shall determine.  Shares may be thus granted or sold in respect of past services or other valid consideration.

2.9. Other Stock-Based Awards

Subject to the provisions of the Plan (including, without limitation, Section 3.16), the Administrator shall have the sole and complete authority to grant to Key Persons other equity-based or equity-related Awards in such amounts and subject to such terms and conditions as the Administrator shall determine; provided that any such Awards must comply with applicable law and, to the extent deemed desirable by the Administrator, Rule 16b-3.

2.10. Dividend Equivalents

Subject to the provisions of the Plan (including, without limitation, Section 3.16), in the discretion of the Administrator, an Award, other than an option or stock appreciation right, may provide the Award recipient with dividends or dividend equivalents, payable in cash, shares, other securities, other Awards or other property, on a current or deferred basis, on such terms and conditions as may be determined by the Administrator, including, without limitation, payment directly to the Award recipient, withholding of such amounts by the Company subject to vesting of the Award, or reinvestment in additional shares, restricted shares or other Awards.

ARTICLE III. Miscellaneous

3.1. Amendment of the Plan; Modification of Awards

(a)  Amendment of the Plan.  The Board may from time to time suspend, discontinue, revise or amend the Plan in any respect whatsoever, except that no such amendment shall materially impair any rights or materially increase any obligations under any Award theretofore made under the Plan without the consent of the grantee (or, upon the grantee's death, the Person having the rights to the Award).  For purposes of this Section 3.1, any action of the Board or the Administrator that in any way alters or affects the tax treatment of any Award shall not be considered to materially impair any rights of any grantee.

(b)  Stockholder Approval Requirement.  If required by applicable rules or regulations of a national securities exchange or the SEC, the Company shall obtain stockholder approval with respect to any amendment to the Plan that (i) expands the types of Awards available under the Plan, (ii) materially increases the aggregate number of shares which may be issued under the Plan, except as permitted pursuant to Section 1.5(c), (iii) materially increases the benefits to participants under the Plan, including any material change to (A) permit, or that has the effect of, a Repricing of any outstanding Award, (B) reduce the price at which shares or options to purchase shares may be offered or (C) extend the duration of the Plan, or (iv) materially expands the class of Persons eligible to receive Awards under the Plan.

(c)  Modification of Awards.  The Administrator may cancel any Award under the Plan.  The Administrator also may amend any outstanding Award Agreement, including, without limitation, by amendment which would: (i) accelerate the time or times at which the Award becomes unrestricted, vested or may be exercised; (ii) waive or amend any goals, restrictions or conditions set forth in the Award Agreement; or (iii) waive or amend the operation of Sections 2.4, 2.6(e) or 2.7(c) with respect to the termination of the Award upon termination of employment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates; provided, however, that no such amendment shall be made without shareholder approval if such approval is necessary to comply with any tax or regulatory requirement applicable to the Award.  However, any such cancellation or amendment (other than an amendment pursuant to Section 1.5, 3.5 or 3.16) that materially impairs the rights or materially increases the obligations of a grantee under an outstanding Award shall be made only with the consent of the grantee (or, upon the grantee's death, the Person having the right to the Award).  In making any modification to an Award (e.g., an amendment resulting in a direct or indirect reduction in the Exercise Price or a waiver or modification under Section 2.4(f), 2.6(e) or 2.7(c)), the Administrator may consider the implications, if any, of such modification under the Code with respect to Sections 409A and 457A of the Code with respect to Awards granted under the Plan to individuals subject to such provisions of the Code.

3.2. Consent Requirement

(a)  No Plan Action Without Required Consent.  If the Administrator shall at any time determine that any Consent (as defined below) is necessary or desirable as a condition of, or in connection with, the granting of any Award under the Plan, the issuance or purchase of shares or other rights thereunder, or the taking of any other action thereunder (each such action being hereinafter referred to as a "Plan Action"), then such Plan Action shall not be taken, in whole or in part, unless and until such Consent shall have been effected or obtained to the full satisfaction of the Administrator.

(b)  Consent Defined.  The term "Consent" as used herein with respect to any Plan Action means (i) any and all listings, registrations or qualifications in respect thereof upon any securities exchange or under any federal, state or local law, rule or regulation, (ii) any and all written agreements and representations by the grantee with respect to the disposition of shares, or with respect to any other matter, which the Administrator shall deem necessary or desirable to comply with the terms of any such listing, registration or qualification or to obtain an exemption from the requirement that any such listing, qualification or registration be made and (iii) any and all consents, clearances and approvals in respect of a Plan Action by any governmental or other regulatory bodies or any other Person.

3.3. Nonassignability

Except as provided in Sections 2.4(e), 2.5, 2.6(d) or 2.7(e),(a) no Award or right granted to any Person under the Plan or under any Award Agreement shall be assignable or transferable other than by will or by the laws of descent and distribution and (b) all rights granted under the Plan or any Award Agreement shall be exercisable during the life of the grantee only by the grantee or the grantee's legal representative or the grantee's permissible successors or assigns (as authorized and determined by the Administrator).  All terms and conditions of the Plan and the applicable Award Agreements will be binding upon any permitted successors or assigns.

3.4. Taxes

(a)  Withholding.  A grantee or other Award holder under the Plan shall be required to pay, in cash, to the Company, and the Company and its Affiliates shall have the right and are hereby authorized to withhold from any Award, from any payment due or transfer made under any Award or under the Plan or from any compensation or other amount owing to such grantee or other Award holder, the amount of any applicable withholding taxes in respect of an Award, its grant, its exercise, its vesting, or any payment or transfer under an Award or under the Plan, and to take such other action as may be necessary in the opinion of the Company to satisfy all obligations for payment of such taxes.  Whenever shares of Common Stock are to be delivered pursuant to an Award under the Plan, with the approval of the Administrator, which the Administrator shall have sole discretion whether or not to give, the grantee may satisfy the foregoing condition by electing to have the Company withhold from delivery shares having a value equal to the amount of minimum tax required to be withheld.  Such shares shall be valued at their Fair Market Value as of the date on which the amount of tax to be withheld is determined.  Fractional share amounts shall be settled in cash.  Such a withholding election may be made with respect to all or any portion of the shares to be delivered pursuant to an Award as may be approved by the Administrator in its sole discretion.

(b)  Liability for Taxes.  Grantees and holders of Awards are solely responsible and liable for the satisfaction of all taxes and penalties that may arise in connection with Awards (including, without limitation, any taxes arising under Sections 409A and 457A of the Code), and the Company shall not have any obligation to indemnify or otherwise hold any such Person harmless from any or all of such taxes.  The Administrator shall have the discretion to organize any deferral program, to require deferral election forms, and to grant or, notwithstanding anything to the contrary in the Plan or any Award Agreement, to unilaterally modify any Award in a manner that (i) conforms with the requirements of Sections 409A and 457A of the Code (to the extent applicable), (ii) voids any participant election to the extent it would violate Sections 409A or 457A of the Code (to the extent applicable) and (iii) for any distribution event or election that could be expected to violate Section 409A of the Code, make the distribution only upon the earliest of the first to occur of a "permissible distribution event" within the meaning of Section 409A of the Code or a distribution event that the participant elects in accordance with Section 409A of the Code.  The Administrator shall have the sole discretion to interpret the requirements of the Code, including, without limitation, Sections 409A and 457A, for purposes of the Plan and all Awards.

3.5. Change in Control

(a)  Change in Control Defined.  Unless otherwise set forth in the applicable Award Agreement, for purposes of the Plan, "Change in Control" shall mean the occurrence of any of the following:

(i)  any "person" (as defined in Section 13(d)(3) of the 1934 Act), company or other entity acquires "beneficial ownership" (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of more than 50% of the aggregate voting power of the capital stock ordinarily entitled to elect directors of the Company; provided, however, that no Change in Control shall have occurred in the event of such an acquisition by (A) the Company, (B) any trustee or other fiduciary holding securities under an employee benefit plan of the Company or an Affiliate, (C) any company or other entity owned, directly or indirectly, by the holders of the voting stock ordinarily entitled to elect directors of the Company in substantially the same proportions as their ownership of the aggregate voting power of the capital stock ordinarily entitled to elect directors of the Company immediately prior to such acquisition or (D) any entity which Mr. Michael Bodouroglou directly or indirectly "controls" (as defined in Rule 12b-2 under the 1934 Act));

(ii)  the sale of all or substantially all the Company's assets in one or more related transactions to any "person" (as defined in Section 13(d)(3) of the 1934 Act), company or other entity; provided, however, that no Change in Control shall have occurred in the event of such a sale (A) to a Subsidiary which does not involve a material change in the equity holdings of the Company, (B) to an entity which Mr. Michael Bodouroglou directly or indirectly controls or (C) to an entity (the "Acquiring Entity") which has acquired all or substantially all the Company's assets if, immediately following such sale, 50% or more of the aggregate voting power of the capital stock ordinarily entitled to elect directors of the Acquiring Entity (or, if applicable, the ultimate parent entity that directly or indirectly has "beneficial ownership" (as defined in paragraph (i) above) of more than 50% of the aggregate voting power of the capital stock ordinarily entitled to elect directors of the Acquiring Entity) is "beneficially owned" (as defined in paragraph (i) above) by the holders of the voting stock ordinarily entitled to elect directors of the Company immediately prior to such sale in substantially the same proportions as the aggregate voting power of the capital stock ordinarily entitled to elect directors of the Company immediately prior to such sale;

(iii)  any merger, consolidation, reorganization or similar event of the Company or any Subsidiary; provided, however, that no Change in Control shall have occurred in the event 50% or more of the aggregate voting power of the capital stock ordinarily entitled to elect directors of the surviving entity (or, if applicable, the ultimate parent entity that directly or indirectly has beneficial ownership of more than 50% of the aggregate voting power of the capital stock ordinarily entitled to elect directors of the surviving entity) is "beneficially owned" (as defined in paragraph (i) above) by the holders of the voting stock ordinarily entitled to elect directors of the Company immediately prior to such event in substantially the same proportions as the aggregate voting power of the capital stock ordinarily entitled to elect directors of the Company immediately prior to such event;

(iv)  the approval by the Company's stockholders of a plan of complete liquidation or dissolution of the Company; or

(v)  during any period of 12 consecutive calendar months, individuals:

(A) who were directors of the Company on the first day of such period, or

(B) whose election or nomination for election to the Board was recommended or approved by at least a majority of the directors then still in office who were directors of the Company on the first day of such period, or whose election or nomination for election were so approved,

shall cease to constitute a majority of the Board.

Notwithstanding the foregoing, unless otherwise set forth in the applicable Award Agreement, for each Award subject to Section 409A of the Code, a Change in Control shall be deemed to have occurred under this Plan with respect to such Award only if a change in the ownership or effective control of the Company or a change in the ownership of a substantial portion of the assets of the Company shall also be deemed to have occurred under Section 409A of the Code, provided that such limitation shall apply to such Award only to the extent necessary to avoid adverse tax effects under Section 409A of the Code.

(b)  Effect of a Change in Control.  Unless the Administrator provides otherwise in an Award Agreement, upon the occurrence of a Change in Control:

(i)  notwithstanding any other provision of this Plan, any Award then outstanding shall become fully vested and any forfeiture provisions thereon imposed pursuant to the Plan and the applicable Award Agreement shall lapse and any Award in the form of an option or stock appreciation right shall be immediately exercisable;

(ii)  to the extent permitted by law and not otherwise limited by the terms of the Plan, the Administrator may amend any Award Agreement in such manner as it deems appropriate;

(iii)  a grantee who incurs a termination of employment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates for any reason, other than a termination or dismissal "for Cause", concurrent with or within one year following the Change in Control may exercise any outstanding option or stock appreciation right, but only to the extent that the grantee was entitled to exercise the Award on the date of such termination of employment or consultancy/service relationship, until the earlier of (A) the original expiration date of the Award and (B) the later of (x) the date provided for under the terms of Section 2.4 without reference to this Section 3.5(b)(iii) and (y) the first anniversary of the grantee's termination of employment or consultancy/service relationship.

(c)  Miscellaneous.  Whenever deemed appropriate by the Administrator, any action referred to in paragraph (b)(ii) of this Section 3.5 may be made conditional upon the consummation of the applicable Change in Control transaction.

3.6. Operation and Conduct of Business

Nothing in the Plan or any Award Agreement shall be construed as limiting or preventing the Company or any Affiliate from taking any action with respect to the operation and conduct of their business that they deem appropriate or in their best interests, including any or all adjustments, recapitalizations, reorganizations, exchanges or other changes in the capital structure of the Company or any Affiliate, any merger or consolidation of the Company or any Affiliate, any issuance of Company shares or other securities or subscription rights, any issuance of bonds, debentures, preferred or prior preference stock ahead of or affecting the Common Stock or other securities or rights thereof, any dissolution or liquidation of the Company or any Affiliate, any sale or transfer of all or any part of the assets or business of the Company or any Affiliate, or any other corporate act or proceeding, whether of a similar character or otherwise.

3.7. No Rights to Awards

No Key Person or other Person shall have any claim to be granted any Award under the Plan.

3.8. Right of Discharge Reserved

Nothing in the Plan or in any Award Agreement shall confer upon any grantee the right to continue his or her employment with the Company or any of its Affiliates, his or her consultancy/service relationship with the Company or any of its Affiliates or his or her position as a director of the Company or any of its Affiliates or affect any right that the Company or any of its Affiliates may have to terminate such employment or consultancy/service relationship or service as a director.

3.9. Non-Uniform Determinations

The Administrator's determinations and the treatment of Key Persons and grantees and their beneficiaries under the Plan need not be uniform and may be made and determined by the Administrator selectively among Persons who receive, or who are eligible to receive, Awards under the Plan (whether or not such Persons are similarly situated).  Without limiting the generality of the foregoing, the Administrator shall be entitled, among other things, to make non-uniform and selective determinations, and to enter into non-uniform and selective Award Agreements, as to (a) the Persons to receive Awards under the Plan, (b) the types of Awards granted under the Plan, (c) the number of shares to be covered by, or with respect to which payments, rights or other matters are to be calculated with respect to, Awards and (d) the terms and conditions of Awards.

3.10. Other Payments or Awards

Nothing contained in the Plan shall be deemed in any way to limit or restrict the Company from making any award or payment to any Person under any other plan, arrangement or understanding, whether now existing or hereafter in effect.

3.11. Headings

Any section, subsection, paragraph or other subdivision headings contained herein are for the purpose of convenience only and are not intended to expand, limit or otherwise define the contents of such section, subsection, paragraph or subdivision.

3.12. Effective Date and Term of Plan

(a)  Adoption; Stockholder Approval.  The Plan was adopted by the Board on February 19, 2014.  The Board may, but need not, make the granting of any Awards under the Plan subject to the approval of the Company's stockholders.

(b)  Termination of Plan.  The Board may terminate the Plan at any time.  All Awards made under the Plan prior to its termination shall remain in effect until such Awards have been satisfied or terminated in accordance with the terms and provisions of the Plan and the applicable Award Agreements.  No Awards may be granted under the Plan following the tenth anniversary of the date on which the Plan was adopted by the Board.

3.13. Restriction on Issuance of Stock Pursuant to Awards

The Company shall not permit any shares of Common Stock to be issued pursuant to Awards granted under the Plan unless such shares of Common Stock are fully paid and non-assessable under applicable law.  Notwithstanding anything to the contrary in the Plan or any Award Agreement, at the time of the exercise of any Award, at the time of vesting of any Award, at the time of payment of shares of Common Stock in exchange for, or in cancellation of, any Award, or at the time of grant of any unrestricted shares under the Plan, the Company and the Administrator may, if either shall deem it necessary or advisable for any reason, require the holder of an Award (a) to represent in writing to the Company that it is the Award holder's then-intention to acquire the shares with respect to which the Award is granted for investment and not with a view to the distribution thereof or (b) to postpone the date of exercise until such time as the Company has available for delivery to the Award holder a prospectus meeting the requirements of all applicable securities laws; and no sharesshall be issued or transferred in connection with any Award unless and until all legal requirements applicable to the issuance or transfer of such shares have been complied with to the satisfaction of the Company and the Administrator.  The Company and the Administrator shall have the right to condition any issuance of shares to any Award holder hereunder on such Person's undertaking in writing to comply with such restrictions on the subsequent transfer of such shares as the Company or the Administrator shall deem necessary or advisable as a result of any applicable law, regulation or official interpretation thereof, and all share certificates delivered under the Plan shall be subject to such stop transfer orders and other restrictions as the Company or the Administrator may deem advisable under the Plan, the applicable Award Agreement or the rules, regulations and other requirements of the SEC, any stock exchange upon which such shares are listed, and any applicable securities or other laws, and certificates representing such shares may contain a legend to reflect any such restrictions.  The Administrator may refuse to issue or transfer any shares or other consideration under an Award if it determines that the issuance or transfer of such shares or other consideration might violate any applicable law or regulation or entitle the Company to recover the same under Section 16(b) of the 1934 Act, and any payment tendered to the Company by a grantee or other Award holder in connection with the exercise of such Award shall be promptly refunded to the relevant grantee or other Award holder.  Without limiting the generality of the foregoing, no Award granted under the Plan shall be construed as an offer to sell securities of the Company, and no such offer shall be outstanding, unless and until the Administrator has determined that any such offer, if made, would be in compliance with all applicable requirements of any applicable securities laws.

3.14. Requirement of Notification of Election Under Section 83(b) of the Code

If an Award recipient, in connection with the acquisition of Company shares under the Plan, makes an election under Section 83(b) of the Code (to include in gross income in the year of transfer the amounts specified in Section 83(b) of the Code), the grantee shall notify the Administrator of such election within ten days of filing notice of the election with the U.S. Internal Revenue Service, in addition to any filing and notification required pursuant to regulations issued under Section 83(b) of the Code.

3.15. Severability

If any provision of the Plan or any Award is or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to any Person or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Administrator, such provision shall be construed or deemed amended to conform to the applicable laws or, if it cannot be construed or deemed amended without, in the determination of the Administrator, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, Person or Award and the remainder of the Plan and any such Award shall remain in full force and effect.

3.16. Sections 409A and 457A

To the extent applicable, the Plan and Award Agreements shall be interpreted in accordance with Sections 409A and 457A of the Code and Department of Treasury regulations and other interpretive guidance issued thereunder.  Notwithstanding any provision of the Plan or any applicable Award Agreement to the contrary, in the event that the Administrator determines that any Award may be subject to Section 409A or 457A of the Code, the Administrator may adopt such amendments to the Plan and the applicable Award Agreement or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Administrator determines are necessary or appropriate to (i) exempt the Plan and Award from Sections 409A and 457A of the Code and/or preserve the intended tax treatment of the benefits provided with respect to the Award, or (ii) comply with the requirements of Sections 409A and 457A of the Code and related Department of Treasury guidance and thereby avoid the application of penalty taxes under Sections 409A and 457A of the Code.

3.17. Forfeiture; Clawback

The Administrator may, in its sole discretion, specify in the applicable Award Agreement that any realized gain with respect to options or stock appreciation rights and any realized value with respect to other Awards shall be subject to forfeiture or clawback, in the event of (a) a grantee's breach of any non-competition, non-solicitation, confidentiality or other restrictive covenants with respect to the Company or any Affiliate, (b) a grantee's breach of any employment or consulting agreement with the Company or any Affiliate, (c) a grantee's termination for Cause or (d) a financial restatement that reduces the amount of compensation under the Plan previously awarded to a grantee that would have been earned had results been properly reported.

3.18. No Trust or Fund Created

Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company or any Affiliate and an Award recipient or any other Person.  To the extent that any Person acquires a right to receive payments from the Company or any Affiliate pursuant to an Award, such right shall be no greater than the right of any unsecured general creditor of the Company or its Affiliate.

3.19. No Fractional Shares

No fractional shares shall be issued or delivered pursuant to the Plan or any Award, and the Administrator shall determine whether cash, other securities, or other property shall be paid or transferred in lieu of any fractional shares or whether such fractional shares or any rights thereto shall be canceled, terminated, or otherwise eliminated.

3.20. Governing Law

The Plan will be construed and administered in accordance with the laws of the State of New York, without giving effect to principles of conflict of laws.

EX-4.63

Exhibit 4.63

AMENDED AND RESTATED MANAGEMENT AGREEMENT

This AMENDED AND RESTATED MANAGEMENT AGREEMENT(the "Agreement") is made effective as of January 2^nd, 2015 among ALLSEAS MARINE S.A., a Liberian company (the "Manager") and [                 ], a [                     ] company ("Owner").

WHEREAS, the Owner and the Manager have entered into a Management Agreement dated [                                  ] as amended from time to time for the management of the [                          ] (the "Vessel");

WHEREAS, the Owner and the Manager wish to cease a portion of the services that are provided by the Manager under the terms of the Agreement;

NOW, THEREFORE, in consideration of the mutual covenants and premises of the parties hereto and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

CLAUSE 1: APPOINTMENT

The Owner hereby appoints the Manager as the Technical and Commercial Manager of the Vessel to provide full technical and commercial services and the Manager hereby accepts such appointment on the terms and conditions of this Agreement.

The Manager undertakes to use its best endeavors to provide its Management Services specified in the clauses agreed herein below, on behalf of the Owner in accordance with sound ship management practice.

The Manager may at its sole discretion appoint sub-managers, at any time throughout the duration of this Agreement, to discharge any of the Manager's duties.

CLAUSE 2: TERM

This Agreement shall come into effect as of January 2^nd, 2015 and shall continue for a period of five years.

Thereafter it shall renew for further continuous periods of five years, unless written notice is given by either party at least thirty (30) days prior to the expiration of the term of this Agreement.

Notwithstanding the foregoing, this Agreement may be terminated pursuant to Clause 12 of this Agreement.  Any notice of termination pursuant to Clause 12 of this Agreement shall not be effective until thirty (30) days following its having been delivered, unless otherwise mutually agreed in writing.

CLAUSE 3: THE MANAGER'S GENERAL OBLIGATIONS

The Manager shall, on behalf of the Owner, attend to the day-to-day technical and commercial management of the Vessel in accordance with sound technical and commercial shipping industry standards.

In the exercise of its duties hereunder the Manager shall act fully in accordance with the reasonable policies, guidelines and instructions from time to time communicated to it by the Owner and serve the Owner faithfully and diligently in the performance of this Agreement, according to technical and commercial shipping industry standards.

In the performance of this Agreement, the Manager shall protect the interests of the Owner in all matters directly or indirectly relating to the Vessel.

The Manager shall ensure that adequate manpower is employed by it to perform its obligations under this agreement. Insofar as practicable, it shall use its best efforts to ensure fair distribution of available manpower, supplies and services as between the Vessel and all other vessels under its management.

CLAUSE 4: MANAGER'S POWER

The Manager is entitled to carry out its duties under the terms of this Agreement as provided in relative clauses herein as the Owner's agent at its own discretion.

In the performance of this Agreement, the Manager shall be authorized to perform the services described in Clauses 5 and 6 and to do all such things or take all such actions related to such performance in accordance with technical and commercial industry standards.

The Manager is under no circumstances authorized to mortgage or otherwise encumber the Vessel, as security for loans or other amounts due. To the extent permitted by law, the Manager will take all reasonable measures to avoid creating liens on the Vessel for services or necessaries, which are not the responsibility of the Owner.

CLAUSE 5: TECHNICAL MANAGEMENT SERVICES

v CREWING

01.  The Manager shall provide adequate and properly qualified Crew for the Vessel as required by the Owner, provision of which includes but is not limited to the following functions:

2

· Employment of master, officers, and crew (hereinafter collectively referred to as the "Crew") of the Vessel;

· Arrangement of transportation of the Crew, including repatriation;

· Training of the Crew;

· Supervision of the efficiency of the Crew and administration of all other Crew matters such as planning for the manning of the Vessel;

· Payroll arrangement;

· Arrangements and administration of pensions and Crew insurance;

· Discipline and union negotiations;

· Enforcement of appropriate standing orders.

v REPAIRS AND MAINTENANCE

The Manager shall provide technical management which includes, but is not limited to the following functions:

02.  Provisions of competent personnel to supervise the maintenance and general efficiency of the Vessel;

03.  Arrangement and supervision of drydockings, repairs, alterations and upkeep of the Vessel to the standards required by the Owner provided that the Manager shall be entitled to incur the necessary expenditure to ensure that the Vessel will comply with all requirements and recommendations of the classification society and with the laws and regulations of the country of registry of the Vessel and of the places where the Vessel trades;

04.  Arrangement of the supply of necessary provisions, stores, spares and lubricating oil;

05.  Appointment of surveyors and technical consultants as the Manager may consider from time to time to be necessary;

06.  Development, implementation and maintenance of a Safety Management System (SMS) in accordance with the ISM Code;

07.  Maintaining the Vessel in such condition as to be acceptable to charterers;

08.  Arranging surveys associated with the commercial operation of the Vessel.

CLAUSE 6: COMMERCIAL MANAGEMENT SERVICES

v SALE AND PURCHASE

01.  The Manager shall perform class records review and physical inspection and inform the Owner on the findings of such review and inspection. Any costs incurred by the Manager for inspection of such vessels for possible purchase to be fully reimbursed by the Owner.

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02.  The Manager shall perform all functions necessary to allow owners to take physical delivery of the vessel and proceed with managing same under the terms of this contract.

03.  For vessel(s) to be sold by the Owner the Manager shall perform all functions necessary to enable the Owner to physically deliver the vessel to her contractual buyer.

v OPERATIONS AND FREIGHT COLLECTION

04.  To arrange the scheduling of the Vessel according to the terms of the Vessel's employment.

05.  To carry out all necessary communications with shippers, charterers and others involved with their receiving and handling of the Vessel at the loading and discharging ports, including notices required under the terms of the Vessel's employment.

On behalf of and in the name of the Owner to issue or cause to be issued to shippers customary bills of lading or other documents required under the terms of the Vessel's employment.

The Owner authorizes the Manager to permit cargo discharge in accordance with Letter of Indemnities issued, or invocation of same, and signed by the charterers and/or bank, working as per Owner's P&I Club regulations and instructions.

06.  To invoice on behalf of the Owner all freights and other sums due to Owner and accounts receivables arising from the operation of the Vessel. To give receipts therefore, to make any and all claims for monies due to Owner and to issue releases upon receipt of payment of such claims and in connection with the settlement of such claims.

To furnish the Master of the Vessel with appropriate voyage instructions and monitor voyage performance.

The Manager will use its best efforts to achieve the most economical, efficient and quick dispatch of the Vessel between ports and at ports and terminals.

07.  With prior consent of the Owner, to institute, defend, intervene in, settle, compromise or abandon any legal proceedings by or against the Owner or by or against the Vessel or which in any way concerns the Vessel, their freight, earnings and disbursements or concerning the crew and officers on board the Vessel and for the purposes of this clause the expression "Legal Proceedings" shall include arbitration, civil, regulatory and criminal proceedings of all kinds. The handling of all such claims and legal matters shall always be consistent with the instructions and requirements of the Vessels' P&I Club, Hull Underwriters, or other insurers.

To provide the Owner with the following services:

• Appoint and negotiate fees for vessel husbandry agents at ports when necessary.

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• Negotiate, arrange and stem fuel requirements as required for intended trading.

• Arranging berths or anchorages.

• Arranging for entry and clearance of the Vessel and all other services relating to the Vessel's movements in port, including tugs and pilots.

• Preparing laytime statements and or hire statements including obtaining port documents and expense supports necessary for such calculation.

v INSURANCE

08.  The Manager shall arrange such insurances as the Owner shall have instructed or agreed, in particular as regards insured values, deductibles and franchises.

All insurance policies shall be in the joint names of the Owner and the Manager provided that, unless the Manager give express prior consent, no liability to pay premiums or P&I calls shall be imposed on the Manager, notwithstanding the restrictions on P&I cover which would thereby result.

v ACCOUNTING

09.  The Manager shall establish an accounting system which meets the requirements of the Owner and provide regular accounting services, supply regular reports and records in accordance herewith;

Maintain the records of all costs and expenditures incurred hereunder as well as data necessary or proper for the settlement of accounts between the parties.

v AUDITING

10.  The Manager shall at all times maintain and keep true and correct accounts and shall make the same available for inspection and auditing by the Owner and such times as may be mutually agreed.

v BUDGETS AND THE MANAGEMENT OF FUNDS

11.  The Manager shall present to the Owner annually a budget for the following twelve months in such form as the Owner requires.

Subsequent annual budgets shall be prepared by the Manager and submitted to the Owner not less than one month before the anniversary date of the Manager's financial year.

The Owner shall indicate to the Manager its acceptance and approval of the annual budget within one month of presentation and in the absence of any such indication the Manager shall be entitled to assume that the Owner has accepted the said budget.

Following the agreement of the budget, the Manager shall prepare and present to the owner its estimate for the working capital requirement of the Vessel and the manager shall each month update this estimate. Based thereon, the Manager shall each month request the Owner for the funds required to run the Vessel for the ensuing month, including the payment of any occasional or extraordinary item of expenditure, such as emergency repair costs, additional insurance premiums, bunkers or provisions. Such funds shall be received by the Manager within ten days after the receipt of such request and shall be held to the credit of the Owner in a separate account.

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The Owner shall place with the Manager for the duration of this Agreement an amount equal to one months' estimated running expenses as a working capital reserve. Upon termination of this Agreement all moneys remaining within the working capital reserve shall be returned to the Owner subject to the terms and conditions of this Agreement.

The Manager shall produce a quarterly comparison between budgeted and actual expenditure of the Vessel, if required to do so by the Owner.

Notwithstanding anything contained herein, the Manager shall in no circumstances be required to use or commit its own funds to finance the provision of the management Services.

CLAUSE 7: ADMINISTRATION

01.  The Manager shall, at its own expense, provide all office accommodations, office equipment, communication, office stationery and office staff, as is required for the provision of its services hereunder.

The Manager will be reimbursed for all costs and expenses reasonably incurred in respect of the provisions of Clause 7.01, as provided for in the Administrative Services Agreement signed between the Manager and Paragon Shipping Inc. on 12/11/2008 and in any renewal or amendment there of.

02.  The manager shall handle and settle all claims arising out of the Management Services hereunder.

The Manager shall also have power to obtain legal or technical or other outside expert advice in relation to the handling and settlement of claims and disputes or all other matters effecting the interest of the Owner in respect of the Vessel.

The Owner shall arrange for the provision of any necessary guarantee, bond or security.

Any costs incurred by the Manager in carrying out its obligations according to this Clause 7.02 and under this Agreement in general, shall be settled by the Owner.

CLAUSE 8: REMUNERATION

01.  The Owner shall pay the Manager a Management Fee of Euro 664,46 per day, payable monthly in advance. Such fee shall be adjusted in accordance with the official Eurozone inflation rate annually by the 1st June of each year, starting as of June 1, 2015.

It is further agreed that the Owner shall pay to the Manager a lump sum fee of US$ 15,000 (Fifteen Thousand US Dollars) for pre-delivery services rendered by the Manager to the Owner.

02.  The Manager shall at no extra cost to the Owner, provide its own office accommodation, office staff and stationary.

03.  Unless the Agreement is terminated by the Owner in accordance with Clauses 12.02, 12.03(c) and 12.03(d) of this Agreement or by reason of default by gross negligence or misconduct of Manager, its Directors, officers and/or employees in the performance under this Agreement, upon termination of this Agreement in relation to the Vessel, the Management Fee will be continued for 90 days from the date of termination. This is to cover operational and accounting costs of finalizing the Vessels' disbursements, demurrage, etc. In addition, the Owner shall continue to pay the following:

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· Crew support costs for a further period of three calendar months

· An equitable proportion of any management staff redundancy costs which may materialise.

04.  In the event that the Manager is subject to termination without cause as the commercial and technical manager of the Vessel, except for the cases provided in Clauses 12.02 or 12.03 of this Agreement or by reason of default by gross negligence or misconduct of Manager, its Directors, officers and/or employees in the performance under this Agreement, such case shall constitute an involuntary termination ("Involuntary Termination").

05.  In the event that the Manager is subject to Involuntary Termination,then the provisions of the Compensation Agreement between the Manager and Paragon Shipping Inc. dated 03/01/2010 forming an integral part of this Agreement, or any renewal or amendment thereof, shall be applied.

*SUPERINTENDENTS' FEES

06.  When necessary or desirable to evaluate the Vessel's physical condition, and/ or supervise ship board activities, and/or attend to repairs and drydockings the Manager shall arrange for visitations by a Superintendent at various intervals during the term of this Agreement.

Should it be necessary for a Superintendent to visit the Vessel for a period greater than 5 days during any successive twelve month term (the first term commencing from the date of this Agreement) the Manager shall be entitled to charge the Owner with Euro 500 for every additional day.

CLAUSE 9: INDEMNITY

01.  Except as provided in 9.02 below, neither the Manager nor any officer, director, shareholder or employee thereof shall be liable to the Owner or to any third party, including any Master, Officer or Crewmember employed on the Vessel or in connection therewith, for any loss or damage arising directly or indirectly out of the performance by the Manager of any of its obligations in respect of the Vessel under this Agreement. The Owner shall indemnify and hold harmless and defend the Manager of any of its obligations in respect of the Vessel under this Agreement. The Owner shall indemnify and hold harmless and defend the Manager, its officers, directors, shareholders and employees against any and all claims and demands (including costs and reasonable attorneys fees of defending such claim or demand) and any other losses or liabilities arising directly or indirectly out of the performance by the Manager of any of its duties in respect of the Vessel under this Agreement.

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02.  The provisions of Clause 9.01 shall not apply with respect to any loss, Damage, claim, demand, or liability if and to the extent that the same results for Manager's, its officers', Directors', Shareholders' or Employees' gross negligence or willful misconduct in the performance of its duties under this Agreement.

03.  Clause 9 shall survive termination of this Agreement.

04.  Liability to Owners

Without prejudice to the liability/indemnity clauses referred to in this Agreement,  the Managers shall be under no liability whatsoever to the Owners for any loss, damage, delay or expenses of whatsoever nature, whether direct or indirect, (including but not limited to loss of profit arising out of or in connection with detention of or delay to the Vessel) and howsoever arising in the course of performance of the Management Services unless same is proved to have resulted solely from the gross negligence or willful default of the Managers or their employees, or agents or sub-contractors employed by them in connection with the Vessel, in which case (save where loss, damage, delay or expenses has resulted form the Managers 'personal act or omission committed with the intent to cause same or recklessly and with knowledge that such loss, damage, delay or expenses  would probably result) the Managers' liability for each incident or series of incidents giving rise to a claim or claims shall never exceed a total of ten times the annual management fee payable hereunder.

CLAUSE 10: HIMALAYA

It is hereby expressly agreed that no employee or agent of the Manager (including every sub-contractor form time to time employed by the Manager) shall, in any circumstances whatsoever, be under any liability whatsoever to the Owner for any loss, damage or delay of whatsoever kind arising or resulting directly or indirectly from any act, neglect or default on his part while acting in the course of, or in connection with his employment. Without prejudice to the generality of the foregoing provisions in this clause, every exemption, limitation, condition and liberty herein contained and every right, exemption from liability, defense and immunity of whatsoever nature applicable to the Manager or to which the Manager is entitled hereunder, shall also be available and shall extend to protect every such employee or agent of the Manager acting as aforesaid. For the purpose of all the foregoing provisions of this clause, the Manager is or shall be deemed to be acting as agent or trustee on behalf of and for the benefit of all persons who are or might be his servants or agents from time to time (including sub-contractors as aforesaid) and all such persons shall to this extent be or be deemed to be parties to this Agreement.

CLAUSE 11: FORCE MAJEURE

01.  Neither party shall be liable to the other for loss or damage resulting from delay or failure to perform this Agreement, or any contract hereunder, either in whole or in part, when any such delay or failure shall be due to causes beyond its control due to civil war, insurrections, strikes, riots, fires, floods, explosions, earthquakes, serious accidents, or any acts of God, or failure of  transportation, epidemics, quarantine restrictions, or labor trouble causing cessation, slow down, or interruption of work.

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02.  In the event that a situation giving rise to force majeure which prevents a party from performing under this Agreement, the parties shall confer as to the further fulfillment or termination of this Agreement.

CLAUSE 12: TERMINATION

01.  The Manager shall be entitled to terminate the Agreement by notice in writing if any moneys payable by the Owner shall not have been received in the Manager's nominated account within ten days of payment having been requested in writing by the Manager. The Manager shall also be entitled to terminate this Agreement by notice in writing if after the receipt of written notice of objection thereto from the Manager to the Owner, the Owner proceeds to employ the Vessel in a trade or in a manner which is, in the opinion of the Manager, likely to be detrimental to its reputation as Manager or be prejudicial to the commercial interest of the Manager.

02.  The Owner shall be entitled to terminate Manager's appointment hereunder by providing notice as per clause 2 to the Manager if:

a) any money payable to the Owner under or pursuant to this Agreement are not paid or accounted for in full by the Manager in accordance with the provisions of this Agreement, or

b) the Manager repeatedly neglects or fails to perform its principal duties or to meet its material obligations under his Agreement

03.  Notwithstanding the provision in Clause 2 and Clauses 12.01 and 12.02 of this Agreement and without prejudice to the accrued rights, if any, or Remedies of the parties under or pursuant hereof, this Agreement will be terminated:

a) if the Owner ceases to be the owner of a Vessel by reason of a sale thereof; or

b) if the Vessel becomes an actual or constructive or compromised or arranged total loss; or

c) if the Vessel is requisitioned for title or any other compulsory acquisition of a Vessel occurs,  otherwise than by requisition for hire; or

d) if the Vessel is captured, seized, detained or confiscated by any government or persons acting or purporting to act on behalf of any government and is not released from such capture, seizure, detention or confiscation; the Agreement shall no longer apply to that ship; or

e) if the Owner or the Manager ceased to carry on business, or a substantial of the business, properties or assets of either such party is seized or appropriated.

f) if an order is made against the Owner or the Manager by any competent court or other appropriate authority or resolution passed for bankruptcy, dissolution or winding-up or for the appointment of a liquidator, manager, receiver or trustee of a party or of all or a substantial part of its assets, save for the purposes of amalgamation or re-organization (not involving or arising out of insolvency)

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    04.  For the purpose of clause 12.03 hereof:

a) the date upon which the Vessel is to be treated as having been sold or otherwise disposed of shall be the date on which the Owner ceases to be registered as Owners of the Vessel.

b) the Vessel shall not be deemed to be lost unless either the Vessel has become an actual total loss or agreement has been reached with the Underwriters in respect of her constructive, compromised or arranged total loss or if such agreement with the Underwriters is not reached, it is adjudged by a competent tribunal that a constructive loss of the vessel has occurred.

c) the termination of this Agreement shall be without prejudice to all rights accrued between  the Manager and the Owner prior to the date of termination.

05.  Notwithstanding any other provision of this Agreement, this Agreement shall terminate if there is a change of control of the Owner's parent company (the "Parent").  For purposes of this Section 12.05, a change of control of the Parent shall mean the occurrence of any of the following and shall constitute an Involuntary Termination:

(i)  the sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the Parent's assets, other than a disposition to Box Ships Inc. or any of its affiliates;

(ii)  the adoption by the Parent's board of directors of a plan of liquidation or dissolution of the Parent;

(iii)  the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any "person" (as such term is used in Section 13(d)(3) of the U.S. Securities Exchange Act of 1934), other than Box Ships Inc. or any of its affiliates, becomes the beneficial owner, directly or indirectly, of a majority of the Parent's voting shares, measured by voting power rather than number of shares;

(iv)  if, at any time, the Parent becomes insolvent, admits in writing its inability to pay its debts as they become due, is adjudged bankrupt or declares its bankruptcy or makes an assignment for the benefit of creditors, a proposal or similar action under the bankruptcy, insolvency or other similar laws of any applicable jurisdiction or commences or consents to proceedings relating to it under any reorganization, arrangement, readjustment of debt, dissolution or liquidation law or statute of any jurisdiction;

(v)  the Parent consolidates with, or merges with or into, any person (other than Box Ships Inc. or any of its affiliates), or any such person consolidates with, or merges with or into, the Parent, in any such event pursuant to a transaction in which outstanding shares of the Parent's common stock are converted into or exchanged for cash, securities or other property, or receives a payment of cash, securities or other property, other than any such transaction where any shares of the Parent's common stock outstanding immediately prior to such transaction is converted into or exchanged for voting stock of the surviving or transferee person constituting a majority of the outstanding voting power of such surviving or transferee person immediately after giving effect to such issuance; and

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(vi)  the first day on which a majority of the members of the Parent's board of directors are not continuing directors of the Parent.  The term "continuing directors" means, as of any date of determination, any member of the Parent's board of directors who was:

(a) a member of the board of directors of the Parent on the date immediately after the closing of the Parent's offering; or

(b) nominated for election or elected to the Parent's board of directors with the approval of a majority of the directors then in office who were either directors immediately after the closing of this offering or whose nomination or election was previously so approved.

CLAUSE 13: MODIFICATION OF AGREEMENT

No modification or any further representation, promise, or agreement in connection with subject matter under this Agreement shall be binding, unless made in writing and signed on behalf of the parties by duly authorized representatives.

CLAUSE 14: ASSIGNABILITY OF AGREEMENT

This Agreement is not assignable by either party without the prior written consent of the other.

CLAUSE 15: CONFIDENTIALITY

Except as may be required by applicable law, any non-public or confidential information relating to the business or affairs of the Owner or the Owner's principals obtained by the Manager in the performance of this Agreement shall be kept strictly confidential.

Except as may be required by applicable law this Agreement including all terms, details conditions and period is to be kept private and confidential and beyond the reach of any third party.

Except as may be required by applicable law, any non-public or confidential information relating to the business or affairs of the Manager and/or the Manager's Principals

obtained by the Owner or the Owner's Principals in the performance of this Agreement shall be kept strictly confidential.

Confidential Information shall not include information that is now or subsequently becomes generally publicly known or available by publication, commercial use, or otherwise, through no act or fault of any of the parties;

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The Confidential Information may be disclosed only to the employees, directors, lawyers or consultants of any party or of its affiliated, parent, daughter or related companies or subsidiaries having the need to know the same for the purpose of performing this Agreement by the parties and where such employees, directors, lawyers or consultants are bound by similar restrictions of confidentiality not to disclose the same.

In the event any party is ordered by any court of law or administrative tribunal to disclose any Confidential Information, such party shall provide to the other party a written notice of the forced disclosure as soon as practicable.

CLAUSE 16: GOVERNING LAW

This Agreement shall be governed by and construed in accordance with English Law.

CLAUSE 17: ARBITRATION

01.  All disputes arising out of this Agreement shall be arbitrated at London in the following manner. One arbitrator is to be appointed by each of the parties hereto and a third by the two so chosen. Their decision or that of any two of them shall be final and for the purpose of enforcing any award, this Agreement may be made a rule of the court. The arbitrators shall be commercial persons, conversant with shipping matters. Such arbitration is to be conducted in accordance with the rules of the London Maritime Arbitrators Association terms current at the time when the arbitration proceedings are commenced and in accordance with the Arbitration Act 1996 or any statutory modification or reenactment thereof.

02.  In the event that the Owner or the Manager shall state a dispute and designated an Arbitrator in writing, the other party shall have twenty (20) days, excluding Saturdays, Sundays and legal holidays to designate it's arbitrator, failing which the appointed arbitrator can render an award hereunder.

03.  Until such time as the arbitrators finally close the hearings, either party shall have the right, by written notice served on the arbitrators and on the other party, to specify further disputes or differences under this Agreement for hearing and determination.

04.  The arbitrators may grant any relief and render an award, which they or a majority of them deem just and equitable and within the scope of the Agreement of the parties, including but not limited to the posting of security. Awards pursuant to this Clause may include costs, including a reasonable allowance for attorneys' fees and judgments may be entered upon any award made herein in any court having jurisdiction.

CLAUSE 18: NOTICES

01.  Any notice or other communication required to be given or made hereunder shall be in writing and may be served by sending same by registered airmail electronic-mail, telex, facsimile, or by delivering the same (against receipt)  to the address of the party to be served to such address as may from time to time be notified by that party for this purpose.

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02.  Any notice served by post as aforesaid shall be deemed conclusively duly Served five days after the same shall have posted. Notices served by telex aforesaid shall be deemed conclusively to have been served on the day following of the same, provided evidence of transmission appears on the particular notice.

03.  Notices to the Manager shall be made as follows:

ALLSEAS MARINE S.A.

15 KARAMANLI AVE.

166 73 VOULA ATHENS, GREECE

PHONE : + 30 210 89 14 600

FAX     :   + 30 210 89 95 085

E-MAIL: info@allseas.gr

Notices to the Owner shall be made as follows:

[]

C/O PARAGON SHIPPING INC.

15 KARAMANLI AVE.

166 73 VOULA, ATHENS, GREECE

PHONE: + 30 89 14 600

FAX: +30 89 95 088

E-MAIL: info@paragonshipping.com

CLAUSE 19: ENTIRE AGREEMENT

This Agreement contains the entire agreement of the parties with respect to the subject matter hereof and supersedes all prior agreements and understandings, either verbal or written, between the parties with respect to such subject matter, and no amendment of any provision hereof will be binding upon any party unless in writing and signed by the party agreeing to such amendment.

For and behalf of the Manager                                          For and behalf of the Owner

_____________________                                                    ________________________

     George Skrimizeas                                                               Aikaterini Stoupa

      Attorney-in-Fact                                                                   Attorney-in-Fact

The foregoing is consented to and joined solely with respect to Clause 8.05 by Paragon  Shipping Inc.

For and behalf of Paragon Shipping Inc.

____________________

Robert Perri

Attorney-in Fact

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EX-4.64

Exhibit 4.64

S&P AND CHARTER BROKERAGE SERVICES AGREEMENT

This S&P AND CHARTER BROKERAGE SERVICES AGREEMENT (the "Agreement") is made effective as of January 2^nd, 2015 among SEACOMMERCIAL SHIPPING SERVICES S.A., a Liberian company (the "Broker") and [     ], a [                 ] company ("Owner").

WHEREAS, the Owner is the registered owner of [                                   ] registered under the flag of [                                      ] (the "Vessel").

WHEREAS, the Owner wishes to appoint the Broker with effect as of the date hereof, to provide, subject to the terms and conditions set forth herein, chartering brokerage services for the Vessel as well as sale and purchase (S&P) brokerage services.

WHEREAS, the Broker is willing and is able to provide such services upon the terms and conditions set forth below.

NOW, THEREFORE, in consideration of the mutual covenants and premises of the parties hereto and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

CLAUSE 1: APPOINTMENT

The Owner hereby appoints the Broker to provide full brokerage services and the Broker hereby accepts such appointment on the terms and conditions of this Agreement.

The Broker undertakes to use its best endeavors to provide its services specified in the clauses agreed herein below, on behalf of the Owner.

The Broker may at its sole discretion appoint sub-brokers, at any time throughout the duration of this Agreement, to discharge any of the Broker's duties.

CLAUSE 2: TERM

This Agreement shall come into effect as of January 2^nd, 2015 and shall continue for a period of five years.

Thereafter it shall renew for further continuous periods of five years, unless written notice is given by either party at least thirty (30) days prior to the expiration of the term of this Agreement.

Notwithstanding the foregoing, this Agreement may be terminated pursuant to Clause 9 of this Agreement.  Any notice of termination pursuant to Clause 9 of this Agreement shall not be effective until thirty (30) days following its having been delivered, unless otherwise mutually agreed in writing.

CLAUSE 3: BROKER'S POWER

The Broker is entitled to carry out its duties under the terms of this Agreement as provided in relative clauses herein at its own discretion.

In the performance of this Agreement, the Broker shall be authorized to perform the services described herein and to do all such things or take all such actions related to such performance in accordance with international shipping industry standards.

CLAUSE 4: BROKERAGE SERVICES: SALE AND PURCHASE

01.The Broker shall identify vessels for purchase and make recommendation to the Owner as to whether any vessel should be bought.

02.After approval has been granted by the Owner for the purchase of the identified vessel, the Broker shall proceed to secure the best possible terms and conditions in accordance with industry standards in favor of the Owner.

03.The Broker will on Owner's request market the Vessel for sale, solicit offers, negotiate the sale of any Owner's vessel under the best possible terms and conditions in accordance with industry standards.

CLAUSE 5: BROKERAGE SERVICES: CHARTERING

01.The Broker will seek and negotiate employment for the Vessel under voyage or period charter or under any other form of contract and on behalf of the Owner to approve, conclude and execute any such contract.

RIDER CLAUSE to 5.01

In the event that the Broker is providing similar services to any bulk carriers ships that are not owned by the Owner, the Broker agrees that consistent with the availability, suitability and positioning of the Owner's vessels, any chartering contract of a duration of six months or more will be offered in the first instance to bulk carriers operated by the Owner.

02.The Broker shall have the authority to fix voyage charters in accordance with the trading restrictions defined in Clauses 5.04 and 5.05.

03.The Broker will fix the Vessel and Broker's other vessels (each an "Other Vessel") in a fair manner.

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04.The Broker will use due diligence to ensure that the Vessel will be employed between safe ports, safe anchorages and safe berths, so far as this can be established by exercising due diligence.

05.The Broker will include in the Charter Parties an appropriate War Risks Clause, Clause Paramount and any other Owner's protective clauses where applicable in accordance with the custom of trade.

CLAUSE 6: ADMINISTRATION

01.The Broker shall, at its own expense, provide all office accommodations, office equipment, communication, office stationery and office staff, as is required for the provision of its services hereunder.

02.Notwithstanding the provisions of Clause 6.01 the Broker will be reimbursed for all extraordinary costs and expenses reasonably incurred.

CLAUSE 7: REMUNERATION

01.In consideration of the obligations undertaken by the Broker in this Agreement, the Owners shall pay the Broker a commission fee equal to one and a quarter of one percent (1.25%) of all monies earned by the vessel.  Such fees shall be payable in USD, and payable to the Broker on the dates when such monies are paid or otherwise collected.  For the avoidance of any doubt and regardless of clause 7.04, chartering commissions shall survive the termination of this agreement under all circumstances until the termination of the charter party in force.

02.The Owner shall also pay a commission fee equal to one percent (1.0%) calculated on the MOA price for any vessel bought or sold for and on behalf of the Owner.

03.The Broker shall at no extra cost to the Owner, provide its own office accommodation, office staff and stationary.

04.  In the event that the Broker is subject to termination without cause as the provider of chartering brokerage services and sale and purchase brokerage services for the Vessel, except for the cases provided in Clauses 11.02 or 11.03 of this Agreement or by reason of default by gross negligence or misconduct of the Broker, its Directors, officers and/or employees in the performance under this Agreement, such case shall constitute an involuntary termination ("Involuntary Termination").

05.In the event that the Broker is subject to Involuntary Termination, then the provisions of the Compensation Agreement between the Broker and Paragon Shipping Inc. dated 01/11/2014 forming an integral part of this Agreement, or any renewal thereof, shall be applied.

CLAUSE 8: INDEMNITY

01.Except as provided in 8.02 below, neither the Broker nor any officer, director, shareholder or employee thereof shall be liable to the Owner or to any third party, for any loss or damage arising directly or indirectly from the performance by the Broker of any of its obligations in respect of the Vessel under this Agreement. The Owner shall indemnify and hold harmless and defend the Broker of any of its obligations in respect of the Vessel under this Agreement. The Owner shall indemnify and hold harmless and defend the Broker, its officers, directors, shareholders and employees against any and all claims and demands (including costs and reasonable attorneys fees of defending such claim or demand) and any other losses or liabilities arising directly or indirectly out of the performance by the Broker of any of its duties in respect of the Vessel under this Agreement.

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02.The provisions of Clause 8.01 shall not apply with respect to any loss, damage, claim, demand, or liability if and to the extent that the same results for Broker's, its officers', Directors', Shareholders' or Employees' gross negligence or willful misconduct in the performance of its duties under this Agreement.

03.Clause 8 shall survive termination of this Agreement.

04.Liability to Owners

Without prejudice to the liability/indemnity clauses referred to in this Agreement,  the Broker shall be under no liability whatsoever to the Owner for any loss, damage, delay or expenses of whatsoever nature, whether direct or indirect, and howsoever arising in the course of performance of the services provided unless same is proved to have resulted solely from the gross negligence or willful default of the Broker's or his employees, or agents or sub-contractors employed by them in connection with the Vessel, in which case (save where loss, damage, delay or expenses has resulted from the Broker's personal act or omission committed with the intent to cause same or recklessly and with knowledge that such loss, damage, delay or expenses  would probably result)the Broker's liability for each incident or series of incidents giving rise to a claim or claims shall never exceed a total of ten times the annual charter brokerage commission payable under this Agreement, based on the commission payable with respect to the charter of the Vessel at the time of the incident.

CLAUSE 9: HIMALAYA

It is hereby expressly agreed that no employee or agent of the Broker (including every sub-contractor form time to time employed by the Broker) shall, in any circumstances whatsoever, be under any liability whatsoever to the Owner for any loss, damage or delay of whatsoever kind arising or resulting directly or indirectly from any act, neglect or default on his part while acting in the course of, or in connection with his employment. Without prejudice to the generality of the foregoing provisions in this clause , every exemption, limitation, condition and liberty herein contained and every right, exemption from liability, defense and immunity of whatsoever nature applicable to the Broker or to which the Broker is entitled hereunder, shall also be available and shall extend to protect every such employee or agent of the Broker acting as aforesaid. For the purpose of all the foregoing provisions of this clause, the Broker is or shall be deemed to be acting as agent or trustee on behalf of and for the benefit of all persons who are or might be his servants or agents from time to time (including sub-contractors as aforesaid) and all such persons shall to this extent be or be deemed to be parties to this Agreement.

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CLAUSE 10: FORCE MAJEURE

01.Neither party shall be liable to the other for loss or damage resulting from delay or failure to perform this Agreement, or any contract hereunder, either in whole or in part, when any such delay or failure shall be due to causes beyond its control due to civil war, insurrections, strikes, riots, fires, floods, explosions, earthquakes, serious accidents, or any acts of God, or failure of  transportation, epidemics, quarantine restrictions, or labor trouble causing cessation, slow down, or interruption of work.

02.In the event that a situation giving rise to force majeure which prevents a party from performing under this Agreement, the parties shall confer as to the further fulfillment or termination of this Agreement.

CLAUSE 11: TERMINATION

01.The Broker shall be entitled to terminate the Agreement by notice in writing if any moneys payable by the Owner shall not have been received in the Broker's nominated account within ten days of payment having been requested in writing by the Broker.

02.The Owner shall be entitled to terminate Broker's appointment hereunder by providing notice as per clause 2 to the Broker if the Broker repeatedly neglects or fails to perform its principal duties or to meet its material obligations under his Agreement

03.Notwithstanding the provision in Clause 2 and Clauses 11.01 and 11.02 of this Agreement and without prejudice to the accrued rights, if any, or remedies of the parties under or pursuant hereof, this Agreement will be terminated:

a) if the Owner ceases to be the owner of a Vessel by reason of a sale thereof; or

b) if the Vessel becomes an actual or constructive or compromised or arranged total loss; or

c) if the Vessel is requisitioned for title or any other compulsory acquisition of a Vessel occurs,  otherwise than by requisition for hire; or

d) if the Vessel is captured, seized, detained or confiscated by any government or persons acting or purporting to act on behalf of any government and is not released from such capture, seizure, detention or confiscation; the Agreement shall no longer apply to that ship; or

e) if the Owner or the Broker ceased to carry on business, or a substantial of the business, properties or assets of either such party is seized or appropriated.

f) if an order is made against the Owner or the Broker by any competent court or other appropriate authority or resolution passed for bankruptcy, dissolution or winding-up or for the appointment of a liquidator, manager, receiver or trustee of a party or of all or a substantial part of its assets, save for the purposes of amalgamation or re-organization (not involving or arising out of insolvency)

04. For the purpose of clause 9.03 hereof:

a) the date upon which the Vessel is to be treated as having been sold or otherwise disposed of shall be the date on which the Owner ceases to be registered as owner of the Vessel.

b) the Vessel shall not be deemed to be lost unless either the Vessel has become an actual total loss or agreement has been reached with the Underwriters in respect of her constructive, compromised or arranged total loss or if such agreement with the Underwriters is not reached, it is adjudged by a competent tribunal that a constructive loss of the vessel has occurred.

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c) the termination of this Agreement shall be without prejudice to all rights accrued between  Broker and the Owner prior to the date of termination.

0.5 Notwithstanding any other provision of this Agreement, this Agreement shall terminate if there is a change of control of the Owner's parent company (the "Parent").  For purposes of this Section 11.05, a change of control of the Parent shall mean the occurrence of any of the following and shall constitute an Involuntary Termination:

(i) the sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the Parent's assets, other than a disposition to Box Ships Inc. or any of its affiliates;

(ii) the adoption by the Parent's board of directors of a plan of liquidation or dissolution of the Parent;

(iii) the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any "person" (as such term is used in Section 13(d)(3) of the U.S. Securities Exchange Act of 1934), other than Box Ships Inc. or any of its affiliates, becomes the beneficial owner, directly or indirectly, of a majority of the Parent's voting shares, measured by voting power rather than number of shares;

(iv) if, at any time, the Parent becomes insolvent, admits in writing its inability to pay its debts as they become due, is adjudged bankrupt or declares its bankruptcy or makes an assignment for the benefit of creditors, a proposal or similar action under the bankruptcy, insolvency or other similar laws of any applicable jurisdiction or commences or consents to proceedings relating to it under any reorganization, arrangement, readjustment of debt, dissolution or liquidation law or statute of any jurisdiction;

(v) the Parent consolidates with, or merges with or into, any person (other than Box Ships  Inc. or any of its affiliates), or any such person consolidates with, or merges with or into, the Parent, in any such event pursuant to a transaction in which outstanding shares of the Parent's common stock are converted into or exchanged for cash, securities or other property, or receives a payment of cash, securities or other property, other than any such transaction where any shares of the Parent's common stock outstanding immediately prior to such transaction is converted into or exchanged for voting stock of the surviving or transferee person constituting a majority of the outstanding voting power of such surviving or transferee person immediately after giving effect to such issuance; and

(vi) the first day on which a majority of the members of the Parent's board of directors are not continuing directors of the Parent.  The term "continuing directors" means, as of any date of determination, any member of the Parent's board of directors who was:

(a) a member of the board of directors of the Parent on the date immediately after the closing of the Parent's offering; or

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(b) nominated for election or elected to the Parent's board of directors with the approval of a majority of the directors then in office who were either directors immediately after the closing of this offering or whose nomination or election was previously so approved.

CLAUSE 12: MODIFICATION OF AGREEMENT

No modification or any further representation, promise, or agreement in connection with subject matter under this Agreement shall be binding, unless made in writing and signed on behalf of the parties by duly authorized representatives.

CLAUSE 13: ASSIGNABILITY OF AGREEMENT

This Agreement is not assignable by either party without the prior written consent of the other.

CLAUSE 14: CONFIDENTIALITY

Except as may be required by applicable law, any non-public or confidential information relating to the business or affairs of the Owner or the Owner's principals obtained by the Broker in the performance of this Agreement shall be kept strictly confidential.

Except as may be required by applicable law this Agreement including all terms, details conditions and period is to be kept private and confidential and beyond the reach of any third party.

Except as may be required by applicable law, any non-public or confidential information relating to the business or affairs of the Broker and/or the Broker's principals obtained by the Owner or the Owner's principals in the performance of this Agreement shall be kept strictly confidential.

Confidential Information shall not include information that is now or subsequently becomes generally publicly known or available by publication, commercial use, or otherwise, through no act or fault of any of the parties;

The Confidential Information may be disclosed only to the employees, directors, lawyers or consultants of any party or of its affiliated, parent, daughter or related companies or subsidiaries having the need to know the same for the purpose of performing this Agreement by the parties and where such employees, directors, lawyers or consultants are bound by similar restrictions of confidentiality not to disclose the same.

In the event any party is ordered by any court of law or administrative tribunal to disclose any Confidential Information, such party shall provide to the other party a written notice of the forced disclosure as soon as practicable.

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CLAUSE 15: GOVERNING LAW

This Agreement shall be governed by and construed in accordance with English Law.

CLAUSE 16: ARBITRATION

01.All disputes arising out of this Agreement shall be arbitrated at London in the following manner. One arbitrator is to be appointed by each of the parties hereto and a third by the two so chosen. Their decision or that of any two of them shall be final and for the purpose of enforcing any award, this Agreement may be made a rule of the court. The arbitrators shall be commercial persons, conversant with shipping matters. Such arbitration is to be conducted in accordance with the rules of the London Maritime Arbitrators Association terms current at the time when the arbitration proceedings are commenced and in accordance with the Arbitration Act 1996 or any statutory modification or reenactment thereof.

02.In the event that the Owner or the Broker shall state a dispute and designated an Arbitrator in writing, the other party shall have twenty (20) days, excluding Saturdays, Sundays and legal holidays to designate it's arbitrator, failing which the appointed arbitrator can render an award hereunder.

03.Until such time as the arbitrators finally close the hearings, either party shall have the right, by written notice served on the arbitrators and on the other party, to specify further disputes or differences under this Agreement for hearing and determination.

04.The arbitrators may grant any relief and render an award, which they or a majority of them deem just and equitable and within the scope of the Agreement of the parties, including but not limited to the posting of security. Awards pursuant to this Clause may include costs, including a reasonable allowance for attorneys' fees and judgments may be entered upon any award made herein in any court having jurisdiction.

CLAUSE 17: NOTICES

01.Any notice or other communication required to be given or made hereunder shall be in writing and may be served by sending same by registered airmail electronic-mail, telex, facsimile, or by delivering the same (against receipt)  to the address of the party to be served to such address as may from time to time be notified by that party for this purpose.

02.Any notice served by post as aforesaid shall be deemed conclusively duly Served five days after the same shall have posted. Notices served by telex aforesaid shall be deemed conclusively to have been served on the day following of the same, provided evidence of transmission appears on the particular notice.

03.Notices to the Broker shall be made as follows:

SEACOMMERCIAL SHIPPING SERVICES S.A.

15 KARAMANLI AVE.

166 73 VOULA ATHENS, GREECE

PHONE : + 30 210 88 89 000

FAX     :   + 30 210 89 95 088

E-MAIL: info@seacommercial.gr

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Notices to the Owner shall be made as follows:

[]

C/O PARAGON SHIPPING INC.

15 KARAMANLI AVE.

166 73 VOULA, ATHENS, GREECE

PHONE: + 30 89 14 600

FAX: +30 89 95 088

E-MAIL: info@paragonshipping.gr

CLAUSE 18: ENTIRE AGREEMENT

This Agreement contains the entire agreement of the parties with respect to the subject matter hereof and supersedes all prior agreements and understandings, either verbal or written, between the parties with respect to such subject matter, and no amendment of any provision hereof will be binding upon any party unless in writing and signed by the party agreeing to such amendment.

For and on behalf of the Broker                                      For and on behalf of the Owner

_____________________                                                    ________________________

     George Skrimizeas                                                                  Aikaterini Stoupa

      Attorney-in-Fact                                                                   Attorney-in-Fact

The foregoing is consented to and joined solely with respect to Clause 7.05 by Paragon Shipping Inc.

For and behalf of Paragon Shipping Inc.

____________________

Robert Perri

Attorney-in Fact

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EX-4.65

Exhibit 4.65

AMENDED AND RESTATED COMPENSATION AGREEMENT

This Amended and Restated Compensation Agreement (the Agreement") is made as of the 2^nd day of January 2015, by and between Paragon Shipping Inc., a Marshall islands corporation (the "Company" or "Paragon"), and Allseas Marine S.A., a Liberian corporation ("Allseas").

W I T N E S S E T H:

WHEREAS, the Company and Allseas previously entered into a Compensation Agreement dated January 3^rd, 2010 (the "Original Compensation Agreement"), and each of the Company and Allseas acknowledges and agrees that the provisions of the Original Compensation Agreement are hereby superseded and replaced by the provisions hereof; and

WHEREAS, the Company is engaged directly and/or through its subsidiaries (collectively the "Paragon Group") primarily in the ownership, operation, management and chartering of bulk carriers (the "Paragon Group Business"); and

WHEREAS, Allseas has expertise in the shipping industry and in the provision of technical and commercial management services; and

WHEREAS, the Company has requested Allseas, and Allseas has agreed, to provide technical and commercial management services to the Paragon Group in connection with the management and administration of the Paragon Group Business (the "Management Services"); and

WHEREAS, Allseas has entered into commercial and technical management agreements with certain of the Paragon Group entities (the "Management Agreements"); and

WHEREAS, the Company has determined that services provided to the Company by Allseas pursuant to the Management Agreements are of significant value for the continued success of the Company, and that the continued service of Allseas should be procured and incentivized; and

WHEREAS, it is in the best interests of the Company and its shareholders that, in order to retain the services provided to the Company by Allseas, in the event that Allseas is subject to involuntary termination as the technical and commercial manager of the Company's fleet, Allseas should be compensated by the Company with a sum equal to three years of management fees and commissions payable under the Management Agreements, based on the current fleet at the time of termination, in addition to €3,000,000 being paid in cash to Allseas immediately on the date of such termination. Furthermore, any existing or other form of termination fee(s) or compensation due to Allseas contained within the respective Management Agreements shall become null and void. In this respect relevant addenda would be drawn up accordingly.

NOW, THEREFORE, the parties hereby agree as follows:

1.The Company shall procure that Allseas shall remain the manager and administrator of the Paragon Group Business and shall provide its commercial and technical services to the Paragon Group at all times.

2.In the event that Allseas is terminated without cause as the manager and administrator of the Paragon Group Business, except for the cases provided in Clauses 12.02 or 12.03 of the Management Agreements or by reason of default by gross negligence or misconduct of Manager, its Directors, officers and/or employees in the performance under the Management Agreements, such case shall constitute an involuntary termination ("Involuntary Termination").

3.In the event that Allseas is subject to Involuntary Termination, the Company should compensate Allseas with a sum equal to three years of management fees and commissions payable under the Management Agreements, based on the current fleet at the time of termination, in addition to €3,000,000 (three million Euros) being paid in cash to Allseas, immediately on the date of such termination.

4.This Agreement shall come into effect commencing as of today and shall continue for the period that Allseas serves as commercial and technical manager of the Paragon Group Business (unless sooner terminated on the basis of any other provision of this Agreement) (the "Term").

5.Termination. This Agreement, unless otherwise agreed in writing between the parties, shall be terminated as follows:

(a) At the end of the Term unless extended by mutual agreement in writing.

(b) The parties, by mutual agreement, may terminate this Agreement at any time.

(c) Either party may terminate this Agreement for any material breach of its terms and provisions by the other party.

6.Assignments. This Agreement is not assignable by either party without the prior written consent of the other.

7.Entire Agreement. This Agreement constitutes the entire and only agreement between the parties in relation to its subject matter and replaces and extinguishes all prior agreements, undertakings, arrangements, understandings or statements of any nature made by the parties or any of them whether oral or written with respect to such subject matter.

8.Amendments. No modification, alteration or waiver of any of the provisions of this Agreement shall be effective unless in writing and signed on behalf of each of the parties. The headings in this Agreement do not form part thereof.

9.Notices. Every notice, request, demand or other communication under this Agreement shall:

(a)be in writing delivered personally, by courier or served through a process server;

(b)be deemed to have been when delivered personally or through courier or served at the address below; and

(c)be sent:

(i) If to the Company. to:

PARAGON SHIPPINGINC.

15 Karamanli Ave.,

Voula 16673,

Athens, Greece

(ii) if to Allseas, to:

ALLSEAS MARINE S.A.

15 Karamanli Ave.,

Voula 16673,

Athens, Greece

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or to such other person or address, as is notified by the relevant party to the other parties to this Agreement and such notification shall not become effective until notice of such change is actually received by the other parties. Until such change of person or address is notified, any notification to the above addresses are agreed to he validly effected for the purposes of this Agreement.

10.Governing Law and Jurisdiction.

This Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to conflict of laws principles. Any legal action or proceeding in connection with this Agreement or the performance hereof may be brought in the state and federal courts located in the Borough of Manhattan, City, County and State of New York, and the parties hereby irrevocably submit to the non-exclusive jurisdiction of such courts for the purpose of any such action or proceeding. The parties hereby irrevocably waive trial by jury in any action, proceeding or claim brought by any party hereto or beneficiary hereof on any matter whatsoever arising out of or in any way connected with this agreement.

This Agreement may be executed in written counterparts which together shall constitute one instrument.

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above written.

ALLSEAS MARINE S.A.		PARAGON SHIPPING INC.
By:	/s/ George Skrimizeas	By:	/s/ Robert Perri
Name:  George Skrimizeas Title:    Director		Name:  Robert Perri Title:    Chief Financial Officer

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EX-4.69

Exhibit 4.69

Dated 4 April 2014

ALCYONE INTERNATIONAL MARINE INC.

NEPTUNE INTERNATIONAL SHIPPING AND TRADING S.A. and

PALOMA MARINE S.A.

as joint and several Borrowers

and

THE BANKS AND FINANCIAL INSTITUTIONS

listed in Schedule 1

as Lenders

and

HSH NORDBANK AG

as Agent, Mandated Lead Arranger, Swap Bank

and Security Trustee

LOAN AGREEMENT

relating to a senior secured post-delivery term loan facility of up to US$47,000,000

to part finance the acquisition cost of two Ultramax bulk carriers

currently under construction at Yangzhou Dayang Shipbuilding Co. Ltd.

and re-finance existing indebtedness secured on a Supramax bulk carrier named "FRIENDLY SEAS"

Watson, Farley & Williams

Index

Clause		Page
1	Interpretation	1
2	Facility	17
3	Position of the Lenders and Swap Bank	18
4	Drawdown	18
5	Interest	20
6	Interest Periods	22
7	Default Interest	23
8	Repayment and Prepayment	24
9	Conditions Precedent	27
10	Representations and Warranties	28
11	General Undertakings	31
12	Corporate Undertakings	36
13	Insurance	37
14	Ship Covenants	43
15	Security Cover	48
16	Payments and Calculations	49
17	Application of Receipts	51
18	Application of Earnings; Swap Payments	52
19	Events of Default	55
20	Fees and Expenses	59
21	Indemnities	61
22	No Set-Off or Tax Deduction	64
23	Illegality, etc.	65
24	Increased Costs	65
25	Set-Off	67
26	Transfers and Changes in Lending Offices	68
27	Variations and Waivers	72
28	Notices	73
29	Joint  and Several Liability	75
30	Supplemental	76
31	Law and Jurisdiction	77
Schedule 1  Lenders and Commitments		79
Schedule 2  Drawdown Notice		80
Schedule 3  Condition Precedent Documents		81
Schedule 4  Mandatory Cost Formula		84
Schedule 5  Designation Notice		86
Schedule 6  Transfer Certificate		87
Schedule 7  Power of Attorney		91
Schedule 8  Form of Compliance Certificate		92
Execution Pages		93

THIS AGREEMENT is made on         April 2014

BETWEEN

(1) PALOMA MARINE S.A., ALCYONE INTERNATIONAL MARINE INC. and NEPTUNE INTERNATIONAL SHIPPING AND TRADING S.A. each a corporation duly incorporated and existing under the laws of Liberia whose registered office is at 80 Broad Street, Monrovia Liberia as joint and several Borrowers;

(2) THE BANKS AND FINANCIAL INSTITUTIONS  listed in Schedule 1, as Lenders;

(3) HSH NORDBANK AG acting through its office at Gerhart-Hauptmann-Platz 50, D-20095 Hamburg, Germany, as Agent;

(4) HSH NORDBANK AG acting through its office at Gerhart-Hauptmann-Platz 50, D-20095 Hamburg, Germany, as Mandated Lead Arranger;

(5) HSH NORDBANK AG acting through its office at Gerhart-Hauptmann-Platz 50, D-20095 Hamburg, Germany, as Security Trustee; and

(6) HSH NORDBANK AG acting through its office at Martensdamm 6, D-24103 Kiel, Germany, as Swap Bank.

BACKGROUND

(A) The Lenders have agreed to make available to the Borrowers a senior secured post-delivery term loan facility of up to US$47,000,000 in three tranches as follows:

(i) a tranche in an amount of up to the lesser of (AA) US$17,200,000 and (BB) 65 per cent. of the Initial Market Value of Ship A;

(ii) a tranche in an amount of up to the lesser of (AA) US$17,200,000 and (BB) 65 per cent. of the Initial Market Value of Ship B; and

(iii) a tranche in an amount of up to the lesser of (AA) US$12,600,000 and (BB) 60 per cent. of the Initial Market Value of Ship C,

for the purpose of financing part of the acquisition cost of each of Ship A and Ship B, respectively, payable pursuant to the relevant Shipbuilding Contract and re-financing existing indebtedness secured on Ship C.

(B) The Swap Bank has agreed to enter into interest rate swap transactions with the Borrowers from time to time to hedge the Borrowers' exposure under this Agreement to interest rate fluctuations.

(C) The Lenders and the Swap Bank have agreed to share pari passu in the security to be granted to the Security Trustee pursuant to this Agreement.

IT IS AGREED as follows:

1 INTERPRETATION

1.1 Definitions

Subject to Clause 1.5, in this Agreement:

"Account" means each of the Earnings Accounts, the Liquidity Account, the Swap Account and the Retention Account and, in the plural, means all of them;

"Account Pledge" means, in relation to each Account, a deed creating security in respect of that Account in the Agreed Form and, in the plural, means all of them;

"Affected Lender" has the meaning given in Clause 5.7;

"Agency and Trust Agreement" means the agency and trust agreement dated the same date as this Agreement and made between the same parties;

"Agent" means HSH Nordbank AG, acting in such capacity through its office at Gerhart-Hauptmann-Platz 50, D-20095 Hamburg, Germany, or any successor of it appointed under clause 5 of the Agency and Trust Agreement;

"Agreed Form"  means in relation to any document, that document in the form approved in writing by the Agent (acting on the instructions of all the Lenders) or as otherwise approved in accordance with any other approval procedure specified in any relevant provisions of any Finance Document;

"Applicable Lender" has the meaning given in Clause 5.2;

"Approved Broker" means Arrow Research Ltd., Braemer Seascope, Barry Rogliano Salles, H. Clarkson & Co. Ltd., SSY Valuation Services Ltd., Maersk Brokers K/S, RS Platou Shipbrokers A/S, Howe Robinson, Galbraith's Limited, EA Gibson Shipbrokers Limited and Fearnleys A/S and, in the plural, means all of them;

"Approved Charter" means, in respect of a Ship, a time charter in respect of that Ship  having a duration of not less than 12 months and, in the plural, means all of them;

"Approved Flag"  means, in relation to a Ship, the flag of the Republic of Liberia, the Marshall Islands or such other flag as the Agent may approve as the flag on which that Ship is or, as the case may be, shall be registered;

"Approved Flag State"  means, in relation to a Ship, the Republic of Liberia, the Marshall Islands or any other country in which the Agent may approve that that Ship is or, as the case may be, shall be registered;

"Approved Manager" means, in relation to each Ship, Allseas Marine S.A., a corporation incorporated in Liberia having its registered office at 80 Broad Street, Monrovia, Liberia, maintaining an office (in accordance with Greek law 89) at 15 Karamanli Avenue, 166 73 Voula, Greece or any other company which the Agent (acting on the instructions of the Majority Lenders) may approve from time to time as the commercial and/or technical manager of that Ship;

"Approved Manager's Undertaking" means, in relation to each Ship, a letter of undertaking including (inter alia) an assignment of the Approved Manager's rights, title and interests in the Insurances executed or, as the context may require, to be executed by the Approved Manager in favour of the Security Trustee in the Agreed Form agreeing certain matters in relation to the Approved Manager, serving as technical or, as the case may be, commercial manager of that Ship and subordinating its rights against that Ship and the Borrower which is the owner thereof to the rights of the Creditor Parties under the Finance Documents and, in the plural, means all of them;

"Assignable Charter" means, in relation to a Ship, any time charterparty in respect of that Ship for a term of at least, or which by virtue of any option extensions is at least equal to, 12 months or any bareboat charterparty (including, without limitation, any Approved Charter), consecutive voyage charter or contract of affreightment in respect of such Ship of a duration (or capable of exceeding a duration) of 12 months or more and any guarantee of such charter or any bareboat

2

charter in respect of that Ship and any guarantee of such bareboat charter, be entered into by the Borrower which is the owner thereof and a charterer or, as the context may require, bareboat charter and, in the plural, means all of them;

"Availability Period" means the period commencing on the date of this Agreement and ending on:

(a) in the case of:

(i) Tranche A, 28 October 2014;

(ii) Tranche B, 28 January 2015; and

(iii) Tranche C, 30 April 2014,

(or such later date as the Agent may, with the authorisation of the Lenders, agree with the Borrowers); or

(b) if earlier, the date on which the Total Commitments are fully borrowed, cancelled or terminated;

"Balloon Instalment" has the meaning given in Clause 8.1(b)(ii);

"Basel III" means, together:

(a) the agreements on capital requirements, a leverage ratio and liquidity standards contained in "Basel III: A global regulatory framework for more resilient banks and banking systems", "Basel III: International framework for liquidity risk measurement, standards and monitoring" and "Guidance for national authorities operating the countercyclical capital buffer" published by the Basel Committee on Banking Supervision in December 2010, each as amended, supplemented or restated;

(b) the rules for global systemically important banks contained in "Global systemically important banks: assessment methodology and the additional loss absorbency requirement - Rules text" published by the Basel Committee on Banking Supervision in November 2011, as amended, supplemented or restated; and

(c) any further guidance or standards published by the Basel Committee on Banking Supervision relating to "Basel III";

"Borrower" means each of Borrower A, Borrower B and Borrower C, and, in the plural, means all of them;

"Borrower A" means Alcyone International Marine Inc., a corporation incorporated and existing in the Republic of Liberia whose registered office is at 80 Broad Street, Monrovia, Liberia;

"Borrower B" means Neptune International Shipping and Trading S.A., a corporation incorporated and existing in the Republic of Liberia whose registered office is at 80 Broad Street, Monrovia, Liberia;

"Borrower C" means Paloma Marine S.A., a corporation incorporated and existing in the Republic of Liberia whose registered office is at 80 Broad Street, Monrovia, Liberia;

"Break Costs" has the meaning given in Clause 21.2;

"Builder"  means Yangzhou Dayang Shipbuilding Co Ltd, a company incorporated in the Peoples' Republic of China whose registered office is at Lidian town, Hanjiang District, Yangzhou City, Jiangsu Province, 225006, the Peoples' Republic of China;

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"Business Day"  means a day (other than a Saturday or Sunday) on which banks are open for general business in London, Athens, Piraeus, Beijing and Hamburg and, in respect of a day on which a payment is required to be made under a Finance Document, also in New York City;

"Cancellation Notice"  has the meaning given in Clause 8.6;

"Charterparty Assignment"  means, in relation to a Ship, an assignment of the rights of the Borrower who is the owner of that Ship under any Assignable Charter relative thereto executed or, as the context may require, to be executed by that Borrower in favour of the Security Trustee in the Agreed Form and, in the plural, means all of them;

"Commitment"  means, in relation to a Lender, the amount set opposite its name in Schedule 1, or, as the case may require, the amount specified in the relevant Transfer Certificate, as that amount may be reduced, cancelled or terminated in accordance with this Agreement (and "Total Commitments"  means the aggregate of the Commitments of all the Lenders);

"Compliance Certificate" means a certificate in the form set out in Schedule 8 (or in any other form which the Agent approves or requires) to be provided at the times and in the manner set out in Clause 11.18;

"Confirmation" and "Early Termination Date", in relation to any continuing Designated Transaction, have the meanings given in the Master Agreement;

"Contractual Currency" has the meaning given in Clause 21.6;

"Contribution" means, in relation to a Lender, the part of the Loan which is owing to that Lender;

"Corporate Guarantee" means a corporate guarantee of the obligations of the Borrowers under this Agreement, the Master Agreement and the other Finance Documents to which each Borrower is a party executed or, as the context may require, to be executed by the Corporate Guarantor in the Agreed Form;

"Corporate Guarantor"  means Paragon Shipping Inc., a corporation incorporated in the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960;

"Cost of Funding" means, in relation to a Lender, the rate per annum determined by that Lender to be the rate at which deposits in Dollars are offered to that Lender by leading banks in the London Interbank Market at that Lender's request at or about 11.00 a.m. (London time) on the Quotation Date for an Interest Period and for a period equal to that Interest Period and for delivery on the first Business Day of it, or, if that Lender uses other ways than the London Interbank Market to fund deposits in Dollars, such rate as determined by that Lender to be the Lender's cost of funding deposits in Dollars for that Interest Period;

"Creditor Party"  means the Agent, the Security Trustee, the Mandated Lead Arranger, any Lender or the Swap Bank, whether as at the date of this Agreement or at any later time and, in the plural, means all of them;

"Delivery Date"  means the date each Ship A and Ship B is delivered by the Builder to, and accepted by, the relevant Borrower under the relevant Shipbuilding Contract;

"Designated Transaction" means a Transaction which fulfils the following requirements:

(a) it is entered into by the Borrowers pursuant to the Master Agreement with the Swap Bank which, at the time the Transaction is entered into, is also a Lender;

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(b) its purpose is the hedging of the Borrowers' exposure under this Agreement to fluctuations in LIBOR arising from the funding of the Loan (or any part thereof) for a period expiring no later than the final Repayment Date; and

(c) it is designated by the Swap Bank, by delivery by the Swap Bank to the Borrowers and the Agent of a notice of designation in the form set out in Schedule 5, as a Designated Transaction for the purposes of the Finance Documents;

"Dollars" and "$" means the lawful currency for the time being of the United States of America;

"Drawdown Date" means, in respect of each Tranche, the date requested by the Borrowers for that Tranche to be borrowed, or (as the context requires) the date on which that Tranche is actually borrowed;

"Drawdown Notice" means a notice in the form set out in Schedule 2 (or in any other form which the Agent approves or reasonably requires);

"Earnings"  means, in relation to a Ship, all moneys whatsoever which are now, or later become, payable (actually or contingently) to the Borrower owning that Ship or the Security Trustee and which arise out of the use or operation of that Ship, including (but not limited to):

(a) except to the extent that they fall within paragraph (b):

(i) all freight, hire and passage moneys;

(ii) compensation payable to that Borrower in the event of requisition of the Ship owned by it for hire;

(iii) remuneration for salvage and towage services;

(iv) demurrage and detention moneys;

(v) damages for breach (or payments for variation or termination) of any charterparty or other contract for the employment of that Ship; and

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

(b) if and whenever that Ship is employed on terms whereby any moneys falling within paragraphs (a)(i) to (vi) are pooled or shared with any other person, that proportion of the net receipts of the relevant pooling or sharing arrangement which is attributable to that Ship;

"Earnings Account" means, in relation to a Ship, an account in the name of the Borrower owning that Ship with the Agent in Hamburg designated "[Name of Borrower] ‑ Earnings Account", or any other account (with that or another office of the Agent) which replaces this account and is designated by the Agent as the Earnings Account in respect of that Ship for the purposes of this Agreement in accordance with the Agent's instructions and, in the plural, means all of them;

"Environmental Claim"  means:

(a) any claim by any governmental, judicial or regulatory authority which arises out of an Environmental Incident or an alleged Environmental Incident or which relates to any Environmental Law; or

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(b) any claim by any other person which relates to an Environmental Incident or to an alleged Environmental Incident,

and "claim" means a claim for damages, compensation, fines, penalties or any other payment of any kind whether or not similar to the foregoing; an order or direction to take, or not to take, certain action or to desist from or suspend certain action; and any form of enforcement or regulatory action, including the arrest or attachment of any asset;

"Environmental Incident"  means, in relation to a Ship:

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

(b) any incident in which Environmentally Sensitive Material is released from a vessel other than that Ship and which involves a collision between that Ship and such other vessel or some other incident of navigation or operation, in either case, in connection with which that Ship is actually or potentially liable to be arrested, attached, detained or injuncted and/or that Ship and/or the Borrower which is the owner thereof and/or any operator or manager of that Ship is at fault or allegedly at fault or otherwise liable to any legal or administrative action; or

(c) any other incident in which Environmentally Sensitive Material is released otherwise than from that Ship and in connection with which that Ship is actually or potentially liable to be arrested and/or where the Borrower which is the owner thereof and/or any operator or manager of that Ship is at fault or allegedly at fault or otherwise liable to any legal or administrative action;

"Environmental Law"  means any law relating to pollution or protection of the environment, to the carriage of Environmentally Sensitive Material or to actual or threatened releases of Environmentally Sensitive Material;

"Environmentally Sensitive Material"  means oil, oil products and any other substance (including any chemical, gas or other hazardous or noxious substance) which is (or is capable of being or becoming) polluting, toxic or hazardous;

"Event of Default"  means any of the events or circumstances described in Clause 19.1;

"Existing Indebtedness"  means at any date the outstanding Financial Indebtedness secured on Ship C pursuant to a loan agreement dated 31 July 2008 (as amended and supplemented from time to time) and made between (i) Paragon Shipping Inc. as borrower, (ii) the banks and financial institutions listed in schedule 1 thereto as lenders and (iii) HSH Nordbank AG as swap bank, agent and security trustee in respect of a loan facility of (originally) up to  $51,500,000;

"Finance Documents"  means together:

(a) this Agreement;

(b) the Master Agreement;

(c) the Master Agreement Assignment;

(d) the Corporate Guarantee;

(e) the Agency and Trust Agreement;

(f) the General Assignments;

(g) the Mortgages;

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(h) the Account Pledges;

(i) any Charterparty Assignment;

(j) the Approved Manager's Undertaking; and

(k) any other document (whether creating a Security Interest or not) which is executed at any time by any Borrower, the Corporate Guarantor, the Approved Manager or any other person as security for, or to establish any form of subordination or priorities arrangement in relation to, any amount payable to the Lenders and/or the Swap Bank under this Agreement or any of the other documents referred to in this definition and, in the singular, means any of them;

"Financial Indebtedness"  means, in relation to a person (the "debtor"), any actual or contingent liability of the debtor:

(a) for principal, interest or any other sum payable in respect of any moneys borrowed or raised by the debtor;

(b) under any loan stock, bond, note or other security issued by the debtor;

(c) under any acceptance credit, guarantee or letter of credit facility made available to the debtor;

(d) under a financial lease, a deferred purchase consideration arrangement or any other agreement having the commercial effect of a borrowing or raising of money by the debtor;

(e) under any interest or currency swap or any other kind of derivative transaction entered into by the debtor or, if the agreement under which any such transaction is entered into requires netting of mutual liabilities, the liability of the debtor for the net amount;

(f) under receivables sold or discounted (other than any receivables to the extent that they are sold on a non-recourse basis); or

(g) under a guarantee, indemnity or similar obligation entered into by the debtor in respect of a liability of another person which would fall within (a) to (e) if the references to the debtor referred to the other person;

"Financial Year"  means, in relation to each of the Borrowers, the Corporate Guarantor and the Group, each period of 1 year commencing on 1 January in respect of which their individual or, as the case may be, consolidated accounts are or ought to be prepared;

"Fleet Vessel" means all of the vessels (including, but not limited to, the Ships) from time to time wholly owned by members of the Group and, in the singular, means any of them;

"GAAP" means generally accepted accounting principles as from time to time in effect in the United States of America;

"General Assignment"  means, in relation to a Ship, a general assignment of (inter alia) the Earnings, the Insurances and any Requisition Compensation relative to that Ship executed or, as the context may require, to be executed by the Borrower which is the owner thereof in favour of the Security Trustee in the Agreed Form and, in the plural, means all of them;

"Group"  means, together, the Corporate Guarantor and its subsidiaries (direct or indirect including, but not limited to, the Borrowers) from time to time during the Security Period and "member of the Group" shall be construed accordingly;

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"IACS"  means the International Association of Classification Societies;

"Initial Market Value"  means, in relation to each Ship, the Market Value thereof calculated in accordance with the valuation(s) relative thereto referred to in paragraph 4 of Schedule 3, Part B;

"Instalment" has the meaning given in Clause 8.1(b)(i);

"Insurances" means, in relation to a Ship:

(a) all policies and contracts of insurance or, as the case may be, reinsurance (if applicable), including entries of that Ship in any protection and indemnity or war risks association, effected in respect of that Ship, its Earnings or otherwise in relation to it; and

(b) all rights (including, without limitation, any and all rights or claims which the Borrower owning that Ship may have under or in connection with any cut-through clause relative to any reinsurance contract relating to the aforesaid policies or contracts of insurance) and other assets relating to, or derived from, any of the foregoing, including any rights to a return of a premium;

"Interest Period" means a period determined in accordance with Clause 6;

"ISM Code"  means the International Safety Management Code (including the guidelines on its implementation), adopted by the International Maritime Organisation as the same may be amended or supplemented from time to time (and the terms "safety management system", "Safety Management Certificate" and "Document of Compliance" have the same meanings as are given to them in the ISM Code);

"ISPS Code"  means the International Ship and Port Facility Security Code as adopted by the International Maritime Organisation, as the same may be amended or supplemented from time to time;

"ISSC"  means a valid and current International Ship Security Certificate issued under the ISPS Code;

"Lender"  means, subject to Clause 26.6, a bank or financial institution listed in Schedule 1 and acting through its branch indicated in Schedule 1 (or through another branch notified to the Agent under Clause 26.15) or its transferee, successor or assign;

"LIBOR"  means, for an Interest Period:

(a) the rate per annum equal to the offered quotation for deposits in Dollars for a period equal to, or as near as possible equal to, the relevant Interest Period which appears on the Screen Rate; or

(b) if no rate is quoted on the Screen Rate, the rate per annum determined by the Agent to be the rate (rounded upwards, if necessary, to the nearest one-sixteenth of one per cent.) at which deposits in Dollars are offered to each Reference Bank as at the rate at which deposits in Dollars are offered to that Reference Bank by leading banks in the London Interbank Market at that Reference Bank's request at or about 11.00 a.m. (London time) on the Quotation Date for that Interest Period for a period equal to that Interest Period and for delivery on the first Business Day of it;

"LIBOR Correction Rate" means, at any relevant time in relation to an Applicable Lender, the rate per annum by which that Lender's Cost of Funding exceeds LIBOR;

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"Liquidity Account" means an account in the joint names of the Borrowers with the Agent in Hamburg designated "Paloma Marine S.A., Alcyone International Marine Inc. and Neptune International Shipping and Trading S.A. –Liquidity Account", or any other account (with that or another office of the Agent which is designated by the Agent as the Liquidity Account for the purposes of this Agreement);

"Liquidity Amount" has the meaning given in Clause 11.17;

"Loan"  means the principal amount for the time being outstanding under this Agreement;

"LSW 1189" means the London Standard Wording for marine insurances which incorporates the German direct mortgage clause;

"Major Casualty"  means, in relation to a Ship, any casualty to the Ship in respect of which the claim or the aggregate of the claims against all insurers, before adjustment for any relevant franchise or deductible, exceeds $500,000 or the equivalent in any other currency;

"Majority Lenders"  means:

(a) before a Tranche has been advanced, Lenders whose Commitments total 66.67 per cent. of the Total Commitments; and

(b) after a Tranche has been advanced, Lenders whose Contributions total 66.67 per cent. of the Loan;

"Mandated Lead Arranger" means HSH Nordbank AG, acting in such capacity through its office at Gerhart-Hauptmann-Platz 50, D-20095 Hamburg, Germany, or any successor;

"Mandatory Cost" means the percentage rate per annum calculated by the Agent in accordance with Schedule 4;

"Margin" means 3.25 per cent. per annum;

"Market Value" means, in relation to each Ship and each of the other Fleet Vessels, the market value thereof determined in accordance with Clause 15.3;

"Master Agreement" means the master agreement (on the 1992 or 2002 ISDA (Multicurrency-Crossborder) form) in the Agreed Form made between the Borrowers and the Swap Bank and includes all Designated Transactions from time to time entered into and Confirmations from time to time exchanged under the master agreement;

"Master Agreement Assignment" means the assignment of the Master Agreement executed or, as the context may require, to be executed by the Borrowers in favour of the Security Trustee in the Agreed Form;

"Material Adverse Change" means any event or series of events (including, without limitation, any withdrawal of any material license or governmental or regulatory approval in respect of any Ship or any Borrower or any Borrower's business (except if contested with suspensive effect and otherwise contested in good faith by the Borrowers) which, in the opinion of the Majority Lenders, is likely to have a Material Adverse Effect;

"Material Adverse Effect" means a material adverse effect on:

(a) the business, property, assets, liabilities, operations or condition (financial or otherwise) of a Borrower and/or any Security Party taken as a whole;

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(b) the ability of a Borrower and/or any Security Party to (i) comply with or perform any of its obligations or (ii) discharge any of its liabilities, under any Finance Document as they fall due; or

(c) the validity, legality or enforceability of any Finance Document;

"Mortgage" means, in relation to a Ship, the first preferred or, as the case may be, priority ship mortgage on that Ship and, if required pursuant to the laws of the applicable Approved Flag State, a deed of covenant collateral thereto executed or, as the context may require to be executed by the Borrower which is to be the owner thereof in favour of the Security Trustee in the Agreed Form and, in the plural, means all of them;

"Mortgaged Ship" means a Ship which is subject to a Mortgage at the relevant time and, in the plural, means all of them;

"Negotiation Period"  has the meaning given in Clause 5.10;

"Notifying Lender"  has the meaning given in Clause 21.2,  23.1 or Clause 24.1 as the context requires;

"Payment Currency"  has the meaning given in Clause 21.6;

"Permitted Security Interests"  means:

(a) Security Interests created by the Finance Documents;

(b) liens for unpaid crew's wages in accordance with usual maritime practice;

(c) liens for salvage;

(d) liens arising by operation of law for not more than 2 months' prepaid hire under any charter in relation to a Ship not prohibited by this Agreement;

(e) liens for master's disbursements incurred in the ordinary course of trading and any other lien arising by operation of law or otherwise in the ordinary course of the trading, chartering, operation, repair or maintenance of a Ship, provided such liens do not secure amounts more than 30 days overdue (unless the overdue amount is being contested by the relevant Borrower in good faith by appropriate steps) and subject, in the case of liens for repair or maintenance, to Clause 14.13(d);

(f) any Security Interest created in favour of a plaintiff or defendant in any action of the court or tribunal before whom such action is brought as security for costs and expenses while a Borrower is prosecuting or defending such action in good faith by appropriate steps; and

(g) Security Interests arising by operation of law in respect of taxes which are not overdue for payment other than taxes being contested in good faith by appropriate steps and in respect of which appropriate reserves have been made;

"Pertinent Document"  means:

(a) any Finance Document;

(b) any policy or contract of insurance contemplated by or referred to in Clause 13 or any other provision of this Agreement or another Finance Document;

(c) any other document contemplated by or referred to in any Finance Document; and

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(d) any document which has been or is at any time sent by or to a Servicing Bank in contemplation of or in connection with any Finance Document or any policy, contract or document falling within paragraphs (b) or (c);

"Pertinent Jurisdiction", in relation to a company, means:

(a) England and Wales;

(b) the country under the laws of which the company is incorporated or formed;

(c) a country in which the company has the centre of its main interests or which the company's central management and control is or has recently been exercised;

(d) a country in which the overall net income of the company is subject to corporation tax, income tax or any similar tax;

(e) a country in which assets of the company (other than securities issued by, or loans to, related companies) having a substantial value are situated, in which the company maintains a branch or permanent place of business, or in which a Security Interest created by the company must or should be registered in order to ensure its validity or priority; and

(f) a country the courts of which have jurisdiction to make a winding up, administration or similar order in relation to the company, whether as a main or territorial or ancillary proceedings, or which would have such jurisdiction if their assistance were requested by the courts of a country referred to in paragraphs (b) or (c);

"Pertinent Matter"  means:

(a) any transaction or matter contemplated by, arising out of, or in connection with a Pertinent Document; or

(b) any statement relating to a Pertinent Document or to a transaction or matter falling within paragraph (a),

and covers any such transaction, matter or statement, whether entered into, arising or made at any time before the signing of this Agreement or on or at any time after that signing;

"Potential Event of Default"  means an event or circumstance which, with the giving of any notice, the lapse of time, a determination of the Majority Lenders and/or the satisfaction of any other condition, would constitute an Event of Default;

"Prepayment Date" has the meaning given in Clause 15.2;

"Prepayment Notice" has the meaning given in Clause 8.5(b);

"Quotation Date"  means, in relation to any Interest Period (or any other period for which an interest rate is to be determined under any provision of a Finance Document), the day on which quotations would ordinarily be given by leading banks in the London Interbank Market for deposits in the currency in relation to which such rate is to be determined for delivery on the first day of that Interest Period or other period;

"Reference Bank" means, subject to Clause 26.18, each of the Hamburg branch of HSH Nordbank AG or any of its respective successors and any other bank or financial institution selected by the Agent (acting on the instructions of the Majority Lenders);

"Relevant Person"  has the meaning given in Clause 19.9;

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"Repayment Date"  means a date on which a repayment is required to be made under Clause 8;

"Requisition Compensation"  includes all compensation or other moneys payable by reason of any act or event such as is referred to in paragraph (b) of the definition of "Total Loss";

"Retention Account" means an account in the joint names of the Borrowers with the Agent in Hamburg designated " Alcyone International Marine Inc.,  Neptune International Shipping and Trading S.A. and Paloma Marine S.A.,  – Retention Account", or any other account (with that or another office of the Agent) which replaces this account and is designated by the Agent as the Retention Account for the purposes of this Agreement in accordance with the Agent's instructions;

"Screen Rate" means the London interbank offered rate administered by the ICE Benchmark Administration Limited (or any other person which takes over the administration of that rate) for Dollars for the relevant period displayed on pages LIBOR01 or LIBOR02 of the Reuters screen (or any replacement Reuters page which displays that rate) or on the appropriate page of such other information service which publishes that rate from time to time in place of Reuters. If such page or service ceases to be available, the Agent may specify another page or service displaying the relevant rate after consultation with the Borrowers;

"Secured Liabilities"  means all liabilities which the Borrowers, the Corporate Guarantor, the Security Parties or any of them have, at the date of this Agreement or at any later time or times, under or in connection with any Finance Document or any judgment relating to any Finance Document; and for this purpose, there shall be disregarded any total or partial discharge of these liabilities, or variation of their terms, which is effected by, or in connection with, any bankruptcy, liquidation, arrangement or other procedure under the insolvency laws of any country;

"Security Cover Ratio" means, at any relevant time, the aggregate of (i) the aggregate of the Market Value of the Mortgaged Ships, (ii) the net realisable value of any additional security provided at that time under Clause 15 and (iii) the Liquidity Amount standing to the credit of the Liquidity Account at that time pursuant to Clause 11.17, expressed as a percentage of the Loan;

"Security Interest"  means:

(a) a mortgage, charge (whether fixed or floating) or pledge, any maritime or other lien or any other security interest of any kind;

(b) the rights of a plaintiff under an action in rem in which the vessel concerned has been arrested or a writ has been issued or similar step taken; and

(c) any arrangement entered into by a person (A) the effect of which is to place another person (B) in a position which is similar, in economic terms, to the position in which B would have been had he held a security interest over an asset of A; but paragraph (c) does not apply to a right of set off or combination of accounts conferred by the standard terms of business of a bank or financial institution;

"Security Party"  means the Corporate Guarantor, the Approved Manager and any other person (except a Creditor Party) who, as a surety or mortgagor, as a party to any subordination or priorities arrangement, or in any similar capacity, executes a document falling within the final paragraph of the definition of "Finance Documents" and, in the plural, means all of them;

"Security Period"  means the period commencing on the date of this Agreement and ending on the date on which the Agent notifies the Borrowers, the Security Parties and the other Creditor Parties that:

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(a) all amounts which have become due for payment by a Borrower or any Security Party under the Finance Documents have been paid;

(b) no amount is owing or has accrued (without yet having become due for payment) under any Finance Document;

(c) neither a Borrower nor any Security Party has any future or contingent liability under Clauses 20, 21 or 22 or any other provision of this Agreement or another Finance Document; and

(d) the Agent, the Mandated Lead Arranger, the Security Trustee and the Majority Lenders do not consider that there is a significant risk that any payment or transaction under a Finance Document would be set aside, or would have to be reversed or adjusted, in any present or possible future bankruptcy of a Borrower or a Security Party or in any present or possible future proceeding relating to a Finance Document or any asset covered (or previously covered) by a Security Interest created by a Finance Document;

"Security Trustee"  means HSH Nordbank AG, acting in such capacity through its office at Gerhart-Hauptmann-Platz 50, D-20095 Hamburg, Germany, or any successor of it appointed under clause 5 of the Agency and Trust Agreement;

"Servicing Bank" means the Agent or the Security Trustee;

"Ship" means each of Ship A, Ship B and Ship C and, in the plural, means all of them;

"Ship A" means an Ultramax bulk carrier of approximately 63,500 metric tons deadweight which is currently under construction by the Builder for Borrower A pursuant to the relevant Shipbuilding Contract, currently having Builder's Hull No. DY152 and which is to be purchased by that Borrower and registered in its ownership under an Approved Flag in accordance with the laws of the applicable Approved Flag State;

"Ship B" means an Ultramax bulk carrier of approximately 63,500 metric tons deadweight which is currently under construction by the Builder for Borrower B pursuant to the relevant Shipbuilding Contract, currently having Builder's Hull No. DY153 and which is to be purchased by that Borrower and registered in its ownership under an Approved Flag in accordance with the laws of the applicable Approved Flag State;

"Ship C" means the 2008-built Supramax bulk carrier of 58,779 metric tons deadweight currently registered in the ownership of Borrower C under an Approved Flag in accordance with the laws of the relevant Approved Flag State with IMO Number 9394832 and with the name "FRIENDLY SEAS";

"Shipbuilding Contract" means, in the case of:

(a) Ship A, the shipbuilding contract dated 17 June 2013 (as amended and supplemented from time to time) made between the Builder and Borrower A for the construction and sale by the Builder and the purchase by that Borrower, of Ship A; and

(b) Ship B, the shipbuilding contract dated 17 June 2013 (as amended and supplemented from time to time) made between the Builder and Borrower B for the construction and sale by the Builder and the purchase by that Borrower, of Ship B,

and, in the plural, means both of them;

"Swap Account" means an account in the joint names of the Borrowers with the Agent in Hamburg designated " Alcyone International Marine Inc., Neptune International Shipping

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and Trading S.A. and Paloma Marine S.A. – Swap Account", or any other account (with that or another office of the Agent) which replaces this account and is designated by the Agent as the Swap Account for the purposes of this Agreement in accordance with the Agent's instructions;

"Swap Bank" means HSH Nordbank AG, acting in such capacity through its office at Martensdamm 6, D-24103 Kiel, Germany;

"Swap Exposure" means, as at any relevant date, the amount certified by the Swap Bank to the Agent to be the aggregate net amount in Dollars which would be payable by the Borrowers to the Swap Bank under (and calculated in accordance with) section 6(e)(i) (Payments on Early Termination) of the Master Agreement if an Early Termination Date  had occurred on the relevant date in relation to all continuing Designated Transactions;

"Total Loss"  means, in relation to a Ship:

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

(b) any expropriation, confiscation, requisition or acquisition of that Ship, whether for full or part consideration, a consideration less than its proper value, a nominal consideration or without any consideration, which is effected by any government or official authority or by any person or persons claiming to be or to represent a government or official authority unless it is within 3 months from the date of such occurrence redelivered to the full control of the Borrower owning that Ship;

(c) any condemnation of that Ship by any tribunal or by any person or persons claiming to be a tribunal; and

(d) any arrest, capture, seizure, confiscation or detention of that Ship (including any hijacking or theft) unless it is within 3 months from the date of such occurrence redelivered to the full control of the Borrower owning that Ship;

"Total Loss Date"  means, in relation to a Ship:

(a) in the case of an actual loss of that Ship, the date on which it occurred or, if that is unknown, the date when that Ship was last heard of;

(b) in the case of a constructive, compromised, agreed or arranged total loss of that Ship, the earliest of:

(i) the date on which a notice of abandonment is given to the insurers; and

(ii) the date of any compromise, arrangement or agreement made by or on behalf of the Borrower owning that Ship with that Ship's insurers in which the insurers agree to treat that Ship as a total loss; and

(c) in the case of any other type of total loss, on the date (or the most likely date) on which it appears to the Agent that the event constituting the total loss occurred;

"Tranche A" means, in relation to Ship A, an amount of up to the lesser of:

(a) 65 per cent. of the Initial Market Value of Ship A; and

(b) $17,200,000,

or, as the context may require, the principal amount outstanding at any relevant time;

"Tranche B" means, in relation to Ship B, an amount of up to the lesser of:

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(c) 65 per cent. of the Initial Market Value of Ship B; and

(d) $17,200,000,

or, as the context may require, the principal amount outstanding at any relevant time;

"Tranche C" means, in relation to Ship C, an amount of up to the lesser of:

(e) 60 per cent. of the Initial Market Value of Ship C; and

(f) $12,600,000,

or, as the context may require, the principal amount outstanding at any relevant time;

"Tranches" means, together, Tranche A, Tranche B and Tranche C and, in the singular means, either of them;

"Transaction"  has the meaning given in the Master Agreement;

"Transfer Certificate"  has the meaning given in Clause 26.2; and

"Trust Property" has the meaning given in clause 3.1 of the Agency and Trust Agreement.

1.2 Construction of certain terms

In this Agreement:

"administration notice"  means a notice appointing an administrator, a notice of intended appointment and any other notice which is required by law (generally or in the case concerned) to be filed with the court or given to a person prior to, or in connection with, the appointment of an administrator;

"approved"  means, for the purposes of Clause 13, approved in writing by the Agent at its discretion;

"asset"  includes every kind of property, asset, interest or right, including any present, future or contingent right to any revenues or other payment;

"company"  includes any partnership, joint venture and unincorporated association;

"consent"  includes an authorisation, consent, approval, resolution, licence, exemption, filing, registration, notarisation and legalisation;

"contingent liability"  means a liability which is not certain to arise and/or the amount of which remains unascertained;

"document"  includes a deed; also a letter, fax or e-mail;

"excess risks"  means, in relation to a Ship, the proportion of claims for general average, salvage and salvage charges not recoverable under the hull and machinery policies in respect of the Ship in consequence of its insured value being less than the value at which the Ship is assessed for the purpose of such claims;

"expense"  means any kind of cost, charge or expense (including all legal costs, charges and expenses) and any applicable value added or other tax;

"gross negligence" means a form of negligence which is distinct from ordinary negligence, in which the due diligence and care which are generally to be exercised have been disregarded

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to a particularly high degree, in which the plainest deliberations have not been made and that which should be most obvious to everybody has not been followed;

"law"  includes any form of delegated legislation, any treaty or international convention and any regulation or resolution of the Council of the European Union, the European Commission, the United Nations or its Security Council;

"legal or administrative action"  means any legal proceeding or arbitration and any administrative or regulatory action or investigation;

"liability"  includes every kind of debt or liability (present or future, certain or contingent), whether incurred as principal or surety or otherwise;

"months"  shall be construed in accordance with Clause 1.3;

"obligatory insurances"  means, in relation to a Ship, all insurances effected, or which the Borrower owning that Ship is obliged to effect, under Clause 13 or any other provision of this Agreement or another Finance Document;

"parent company"  has the meaning given in Clause 1.4;

"person"  "  includes any individual, any partnership, any company; any state, political sub-division of a state and local or municipal authority; and any international organisation;

"policy", in relation to any insurance, includes a slip, cover note, certificate of entry or other document evidencing the contract of insurances or its terms;

"protection and indemnity risks"  means the usual risks covered by a protection and indemnity association managed in London, including pollution risks and the proportion (if any) of any sums payable to any other person or persons in case of collision which are not recoverable under the hull and machinery policies by reason of the incorporation in them of clause 6 of the International Hull Clauses (1/11/02 or 1/11/03), clause 8 of the Institute Time Clauses (Hulls) (1/11/95) or clause 8 of the Institute Time Clauses (Hulls) (1/10/83) or the Institute Amended Running Down Clause (1/10/71) or any equivalent provision;

"regulation"  includes any regulation, rule, official directive, request or guideline (either having the force of law or compliance with which is reasonable in the ordinary course of business of the party concerned) of any governmental, intergovernmental or supranational body, agency, department or regulatory, self‑regulatory or other authority or organisation;

"subsidiary"  has the meaning given in Clause 1.4;

"successor" includes any person who is entitled (by assignment, novation, merger or otherwise) to any person's rights under this Agreement or any other Finance Document (or any interest in those rights) or who, as administrator, liquidator or otherwise, is entitled to exercise those rights; and in particular references to a successor include a person to whom those rights (or any interest in those rights) are transferred or pass as a result of a merger, division, reconstruction or other reorganisation of it or any other person;

"tax"  includes any present or future tax, duty, impost, levy or charge of any kind which is imposed by any state, any political sub-division of a state or any local or municipal authority (including any such imposed in connection with exchange controls), and any connected penalty, interest or fine; and

"war risks"  includes the risk of mines and all risks excluded by clause 29 of the International Hull Clauses (1/11/02 or 1/11/03), clause 24 of the Institute Time Clauses (Hulls)(1/11/95) or clause 23 of the Institute Time Clauses (Hulls) (1/10/83).

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1.3 Meaning of "month"

A period of one or more "months" ends on the day in the relevant calendar month numerically corresponding to the day of the calendar month on which the period started ("the numerically corresponding day"), but:

(a) on the Business Day following the numerically corresponding day if the numerically corresponding day is not a Business Day or, if there is no later Business Day in the same calendar month, on the Business Day preceding the numerically corresponding day; or

(b) on the last Business Day in the relevant calendar month, if the period started on the last Business Day in a calendar month or if the last calendar month of the period has no numerically corresponding day,

and "month" and "monthly" shall be construed accordingly.

1.4 Meaning of "subsidiary"

A company (S) is a subsidiary of another company (P) if:

(a) a majority of the issued shares in S (or a majority of the issued shares in S which carry unlimited rights to capital and income distributions) are directly owned by P or are indirectly attributable to P; or

(b) P has direct or indirect control over a majority of the voting rights attaching to the issued shares of S; or

(c) P has the direct or indirect power to appoint or remove a majority of the directors of S; or

(d) P otherwise has the direct or indirect power to ensure that the affairs of S are conducted in accordance with the wishes of P,

and any company of which S is a subsidiary is a parent company of S.

1.5 General Interpretation

In this Agreement:

(a) references to, or to a provision of, a Finance Document or any other document are references to it as amended or supplemented, whether before the date of this Agreement or otherwise;

(b) references to, or to a provision of, any law include any amendment, extension, re-enactment or replacement, whether made before the date of this Agreement or otherwise;

(c) words denoting the singular number shall include the plural and vice versa; and

(d) Clauses 1.1 to 1.5 apply unless the contrary intention appears.

1.6 Headings

In interpreting a Finance Document or any provision of a Finance Document, all clause, sub-clause and other headings in that and any other Finance Document shall be entirely disregarded.

2 FACILITY

2.1 Amount of facility

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Subject to the other provisions of this Agreement, the Lenders shall make available to the Borrowers a senior secured term loan facility of up to $47,000,000, in three Tranches, Tranche A, Tranche B and Tranche C.

2.2 Lenders' participations in Tranches

Subject to the other provisions of this Agreement, each Lender shall participate in each Tranche in the proportion which, as at the relevant Drawdown Date, its Commitment bears to the Total Commitments.

2.3 Purpose of Tranche

The Borrowers undertake with each Creditor Party to use each Tranche only for the purpose stated in the preamble to this Agreement.

3 POSITION OF THE LENDERS AND SWAP BANK

3.1 Interests several

The rights of the Lenders and of the Swap Bank under this Agreement and under the Master Agreement are several.

3.2 Individual right of action

Each Lender and the Swap Bank shall be entitled to sue for any amount which has become due and payable by the Borrowers to it under this Agreement or under the Master Agreement without joining the Agent, the Security Trustee, any other Lender or the Swap Bank as additional parties in the proceedings.

3.3 Proceedings requiring Majority Lender consent

Except as provided in Clause 3.2, neither Lender nor the Swap Bank may commence proceedings against the Borrowers or any Security Party in connection with a Finance Document or the Master Agreement without the prior consent of the Majority Lenders.

3.4 Obligations several

The obligations of the Lenders under this Agreement and of the Swap Bank under the Master Agreement are several; and a failure of a Lender to perform its obligations under this Agreement or a failure of the Swap Bank to perform its obligations under the Master Agreement shall not result in:

(a) the obligations of the other Lenders or the Swap Bank being increased; nor

(b) a Borrower, any Security Party, any other Lender or the Swap Bank being discharged (in whole or in part) from its obligations under any Finance Document or under the Master Agreement;

and in no circumstances shall a Lender or the Swap Bank have any responsibility for a failure of another Lender or the Swap Bank to perform its obligations under this Agreement or the Master Agreement.

4 DRAWDOWN

4.1 Request for a Tranche

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Subject to the following conditions, the Borrowers may request a Tranche to be advanced by ensuring that the Agent receives a completed Drawdown Notice not later than 11.00 a.m. (Hamburg time) 3 Business Days prior to the relevant Drawdown Date.

4.2 Availability

The conditions referred to in Clause 4.1 are that:

(a) a Drawdown Date has to be a Business Day during the Availability Period;

(b) each Tranche shall not exceed an amount equal to the lesser of:

(i) in the case of Tranche A and Tranche B:

(A) 65 per cent. of the Initial Market Value of the Ship to which that Tranche relates; and

(B) $17,200,000; and

(ii) in the case of Tranche C:

(A) 60 per cent. of the Initial Market Value of Ship C; and

(B) $12,600,000; and

(c) Tranche A and Tranche B shall be applied in financing part of the acquisition cost of the Ship it relates to;

(d) Tranche C shall be applied in re-financing Existing Indebtedness secured on Ship C; and

(e) the aggregate amount of the Tranches shall not exceed the Total Commitments.

4.3 Notification to Lenders of receipt of a Drawdown Notice

The Agent shall promptly notify the Lenders that it has received a Drawdown Notice and shall inform each Lender of:

(a) the amount of the Tranche to which that Drawdown Notice relates and the relevant Drawdown Date;

(b) the amount of that Lender's participation in that Tranche; and

(c) the duration of the first Interest Period in respect of that Tranche.

4.4 Drawdown Notice irrevocable

Each Drawdown Notice must be duly signed by a duly authorised signatory of each Borrower; and once served, it cannot be revoked without the prior consent of the Agent, acting on the authority of the Majority Lenders.

4.5 Lenders to make available Contributions

Subject to the provisions of this Agreement, each Lender shall, on and with value on each Drawdown Date, make available to the Agent for the account of the Borrowers the amount due from that Lender on that Drawdown Date under Clause 2.2.

4.6 Disbursement of Tranche

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Subject to the provisions of this Agreement, the Agent shall on each Drawdown Date pay to the Borrowers the amounts which the Agent receives from the Lenders under Clause 4.5; and that payment to the Borrowers shall be made:

(a) to the account which the Borrowers specify in the relevant Drawdown Notice; and

(b) in the like funds as the Agent received the payments from the Lenders.

5 INTEREST

5.1 Payment of normal interest

Subject to the provisions of this Agreement, interest on each Tranche in respect of each Interest Period relative to that Tranche shall be paid by the Borrowers on the last day of that Interest Period.

5.2 Normal rate of interest

Subject to the provisions of this Agreement, the rate of interest on each Tranche in respect of an Interest Period relative to that Tranche shall be the aggregate of (i) the Margin, (ii) the Mandatory Cost (if any), (iii) LIBOR for that Interest Period and (iv) if a Lender (the "Applicable Lender") notifies the Agent at least 3 Business Days before the start of that Interest Period that its Cost of Funding exceeds LIBOR on the Quotation Date for that Interest Period, additionally in respect of that Applicable Lender's Contribution, the LIBOR Correction Rate applicable to that Applicable Lender for that Interest Period.

5.3 Payment of accrued interest

In the case of an Interest Period of longer than 3 months (subject to the prior agreement of the Agent in accordance with Clause 6.2(c)), accrued interest shall be paid every 3 months during that Interest Period and on the last day of that Interest Period.

5.4 Notification of Interest Periods and rates of normal interest

The Agent shall notify the Borrowers and each Lender of:

(a) each rate of interest; and

(b) the duration of each Interest Period,

as soon as reasonably practicable after each is determined.

5.5 Obligation of Reference Banks to quote

A Reference Bank which is a Lender shall use all reasonable efforts to supply the quotation required of it for the purposes of fixing a rate of interest under this Agreement unless that Reference Bank ceases to be a Lender pursuant to Clause 26.18.

5.6 Absence of quotations by Reference Banks

If any Reference Bank fails to supply a quotation, the Agent shall determine the relevant LIBOR on the basis of the quotations supplied by the other Reference Bank or Banks; but if 2 or more of the Reference Banks fail to provide a quotation, the relevant rate of interest shall be set in accordance with the following provisions of this Clause 5.

5.7 Market disruption

The following provisions of this Clause 5 apply if:

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(a) no rate is quoted on the Screen Rate and 2 or more of the Reference Banks do not, before 1.00 p.m. (London time) on the Quotation Date for an Interest Period, provide quotations to the Agent in order to fix LIBOR; or

(b) at least 3 Business Days before the start of an Interest Period, the Agent is notified by a Lender (the "Affected Lender") that for any reason it is unable to obtain Dollars in the London Interbank Market in order to fund its Contribution (or any part of it) during the Interest Period.

5.8 Notification of market disruption

The Agent shall promptly notify the Borrowers and each of the Lenders and the Swap Bank stating the circumstances falling within Clause 5.7 which have caused its notice to be given.

5.9 Suspension of drawdown

If the Agent's notice under Clause 5.8 is served before a Tranche is advanced:

(a) in the case falling within Clause 5.7(a), the Lender's obligation to advance that Tranche; and

(b) in the case falling within Clause 5.7(b), the Affected Lender's obligation to participate in that Tranche,

shall be suspended while the circumstances referred to in the Agent's notice continue.

5.10 Negotiation of alternative rate of interest

If the Agent's notice under Clause 5.8 is served after a Tranche is made available, the Borrowers, the Agent, the Lenders or (as the case may be) the Affected Lender and the Swap Bank shall use reasonable endeavours to agree, within 30 days after the date on which the Agent serves its notice under Clause 5.8 (the "Negotiation Period"), an alternative interest rate or (as the case may be) an alternative basis for the Lenders or (as the case may be) the Affected Lender to fund or continue to fund their or its Contribution during the Interest Period concerned.

5.11 Application of agreed alternative rate of interest

Any alternative interest rate or an alternative basis which is agreed during the Negotiation Period shall take effect in accordance with the terms agreed.

5.12 Alternative rate of interest in absence of agreement

If an alternative interest rate or alternative basis is not agreed within the Negotiation Period, and the relevant  circumstances are continuing at the end of the Negotiation Period, then the Agent shall, with the agreement of each Lender or (as the case may be) the Affected Lender, set an interest period and interest rate representing the Cost of Funding of the Lenders or (as the case may be) the Affected Lender in Dollars or in any available currency of their or its Contribution plus the Margin and the Mandatory Cost (if any); and the procedure provided for by this Clause 5.12 shall be repeated if the relevant circumstances are continuing at the end of the interest period so set by the Agent.

5.13 Notice of prepayment

If the Borrowers do not agree with an interest rate set by the Agent under Clause 5.12, the Borrowers may give the Agent not less than 15 Business Days' notice of their intention to prepay the Loan or, as the case may be, the relevant Contribution of the Affected Lender at the end of the interest period set by the Agent.

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5.14 Prepayment; termination of Commitments

A notice under Clause 5.13 shall be irrevocable; the Agent shall promptly notify the Lenders or (as the case may require) the Affected Lender of the Borrowers' notice of intended prepayment; and:

(a) on the date on which the Agent serves that notice, the Total Commitments or (as the case may require) the Commitment of the Affected Lender shall be cancelled; and

(b) on the last Business Day of the interest period set by the Agent, the Borrowers shall prepay (without premium or penalty) the Loan or, as the case may be, the Affected Lender's Contribution, together with accrued interest thereon at the applicable rate plus the Margin and the Mandatory Cost (if any).

5.15 Application of prepayment

The provisions of Clauses 8.10 and 8.11(a) shall apply in relation to the prepayment.

5.16 Transactions under the Master Agreement

The Borrowers shall enter into the Master Agreement with the Swap Bank on the date of this Agreement and they agree that the Swap Bank shall have a right of first refusal to conclude Designated Transactions under the Master Agreement to hedge the Borrowers' exposure to interest rate fluctuations.  The Borrowers shall cooperate in good faith with the Swap Bank in negotiating the terms of the Designated Transactions.

6 INTEREST PERIODS

6.1 Commencement of Interest Periods

The first Interest Period applicable to a Tranche shall commence on the Drawdown Date in respect of that Tranche and each subsequent Interest Period shall commence on the expiry of the preceding Interest Period.

6.2 Duration of normal Interest Periods

Subject to Clauses 6.3 and 6.4, each Interest Period in respect of each Tranche shall be:

(a) 3 or 6  months as notified by the Borrowers to the Agent not later than 11.00 a.m. (Hamburg time) 2 Business Days before the commencement of the Interest Period in respect of that Tranche;

(b) 3 months, if the Borrowers fail to notify the Agent by the time specified in paragraph (a); or

(c) such other period as the Agent may, with the authorisation of the Majority Lenders, agree with the Borrowers subject to market availability.

6.3 Duration of Interest Periods for Instalments

In respect of an amount due to be repaid under Clause 8 on a particular Repayment Date, an Interest Period in respect of the Tranche to which that Repayment Date relates shall end on that Repayment Date.

6.4 Non-availability of matching deposits for Interest Period selected

If, after the Borrowers have selected and the Lenders have agreed an Interest Period in respect of any Tranche longer than 6 months, any Lender notifies the Agent by 11.00 a.m. (Hamburg time) on the third Business Day before the commencement of that Interest Period

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that it is not satisfied that deposits in Dollars for a period equal to that Interest Period will be available to it in the London Interbank Market when the Interest Period commences, the Interest Period shall be of 3 months.

7 DEFAULT INTEREST

7.1 Payment of default interest on overdue amounts

The Borrowers shall pay interest in accordance with the following provisions of this Clause 7 on any amount payable by the Borrowers under any Finance Document which the Agent, the Security Trustee or the other designated payee does not receive on or before the relevant date, that is:

(a) the date on which the Finance Documents provide that such amount is due for payment; or

(b) if a Finance Document provides that such amount is payable on demand, the date on which the demand is served; or

(c) if such amount has become immediately due and payable under Clause 19.4, the date on which it became immediately due and payable.

7.2 Default rate of interest

Interest shall accrue on an overdue amount from (and including) the relevant date until the date of actual payment (as well after as before judgment) at the rate per annum determined by the Agent to be 2.50 per cent. above:

(a) in the case of an overdue amount of principal, the higher of the rates set out at Clauses 7.3(a) and 7.3(b); or

(b) in the case of any other overdue amount, the rate set out at Clause 7.3(b).

7.3 Calculation of default rate of interest

The rates referred to in Clause 7.2 are:

(a) the rate applicable to the overdue principal amount immediately prior to the relevant date (but only for any unexpired part of any then current Interest Period applicable to it);

(b) the aggregate of the Margin, any LIBOR Correction Rate and the Mandatory Cost (if any) plus, in respect of successive periods of any duration (including at call) up to 3 months which the Agent may select from time to time:

(i) LIBOR; or

(ii) if the Agent (after consultation with the Reference Banks) determines that Dollar deposits for any such period are not being made available to any Reference Bank by leading banks in the London Interbank Market in the ordinary course of business, a rate from time to time determined by the Agent by reference to the cost of funds to the Reference Banks from such other sources as the Agent (after consultation with the Reference Banks) may from time to time determine.

7.4 Notification of interest periods and default rates

The Agent shall promptly notify the Lenders and the Borrowers of each interest rate determined by the Agent under Clause 7.3 and of each period selected by the Agent for the purposes of paragraph 7.3(b) of that Clause; but this shall not be taken to imply that

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the Borrowers are liable to pay such interest only with effect from the date of the Agent's notification.

7.5 Payment of accrued default interest

Subject to the other provisions of this Agreement, any interest due under this Clause shall be paid on the last day of the period by reference to which it was determined; and the payment shall be made to the Agent for the account of the Creditor Party to which the overdue amount is due.

7.6 Compounding of default interest

Any such interest which is not paid at the end of the period by reference to which it was determined shall thereupon be compounded.

7.7 Application to Master Agreement

For the avoidance of doubt, this Clause 7 does not apply to any amount payable under the Master Agreement in respect of any continuing Transaction as to which section 2(e) (Default Interest and Compensation) of the Master Agreement shall apply.

8 REPAYMENT AND PREPAYMENT

8.1 Amount of Instalments

The Borrowers shall repay:

(a) each of Tranche A and Tranche B, by:

(i) 28 equal consecutive quarterly instalments, each in the amount of $253,000 (each an "Instalment A" and, together, the "Instalments A"); and

(ii) a balloon instalment in the amount of $10,116,000 (the "Balloon Instalment A"); and

(b) Tranche C, by:

(i) 28 equal consecutive quarterly instalments (each an "Instalment B" and, together, the "Instalments B" and, together with the Instalments A, the "Instalments" and each an "Instalment"), each in the amount of $286,400; and

(ii) a balloon instalment (the "Balloon Instalment B" and, together with the Balloon Instalment A, the "Balloon Instalments" and each a "Balloon Instalment") in the amount of $4,580,800,

Provided that if the amount drawn down is less than $17,200,000 in the case of Tranche A and Tranche B and $12,600,000 in the case of Tranche C, each Instalment in respect of that Tranche and the relevant Balloon Instalment shall be reduced pro rata by an amount equal to the undrawn amount.

8.2 Repayment Dates

The first Instalment in respect of each Tranche shall be repaid on the date falling 3 months after the Drawdown Date in respect of that Tranche, each subsequent Instalment shall be repaid at three-monthly intervals thereafter and the last Instalment in respect of that Tranche, shall be repaid, together with the Balloon Instalment in respect of that Tranche, on the earlier of (a) the date falling 84 months after the Drawdown Date in respect of that

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Tranche and (b) in the case of (i) Tranche A, 27 October 2021, (ii) Tranche B, 28 January 2022 and (iii) Tranche C, 1 April 2021.

8.3 Final Repayment Date

On the final Repayment Date, the Borrowers shall additionally pay to the Agent for the account of the Creditor Parties all other sums then accrued or owing under any Finance Document.

8.4 Voluntary prepayment

Subject to the following conditions, the Borrowers may prepay the whole or any part of the Loan on the last day of an Interest Period.

8.5 Conditions for voluntary prepayment

The conditions referred to in Clause 8.4 are that:

(a) a partial prepayment shall be $500,000 or a higher integral multiple thereof (or such other amount acceptable to the Agent in its sole discretion);

(b) the Agent has received from the Borrowers at least 5 Business Days' prior written notice (the "Prepayment Notice") specifying the amount to be prepaid and the date on which the prepayment is to be made;

(c) the Borrowers have provided evidence satisfactory to the Agent that any consent required by the Borrowers or any Security Party in connection with the prepayment has been obtained and remains in force, and that any requirement relevant to this Agreement which affects the Borrowers or any Security Party has been complied with; and

(d) the Borrowers have complied with Clauses 8.13 and 8.14 on or prior to the date of prepayment.

8.6 Optional facility cancellation

The Borrowers shall be entitled, upon giving to the Agent not less than 5 Business Days' prior written notice (the "Cancellation Notice") which notice shall be irrevocable and shall, at the option of the Borrowers, specify whether such cancellation will be applied against a specific Tranche, in which case the Borrowers will specify the Tranche against which that cancellation should be applied. A failure by the Borrowers to make such a designation shall result in the cancellation being applied equally between the three Tranches to cancel, in whole or in part, and, if in part, by an amount not less than $500,000 or a higher multiple thereof (or such other amount acceptable to the Agent in its sole discretion), the undrawn balance of the Total Commitments. Upon such cancellation taking effect on expiry of a Cancellation Notice the several obligations of the Lenders to make their respective Commitments available in relation to the portion of the Total Commitments to which such Cancellation Notice relates shall terminate.

8.7 Cancellation Notice or Prepayment Notice

The Agent shall notify the Lenders promptly upon receiving a Cancellation Notice or Prepayment Notice, and shall provide, in the case of a Prepayment Notice, any Lender which so requests with a copy of any document delivered by the Borrowers under Clause 8.5(c).

8.8 Mandatory prepayment

The Borrowers shall be obliged to prepay the Relevant Amount if a Ship:

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

(b) becomes a Total Loss, on the earlier of the date falling 90 days after the Total Loss Date and the date of receipt by the Security Trustee of the proceeds of insurance relating to such Total Loss.

In this Clause 8.8:

"Relevant Amount" means an amount equal to the greater of:

(i) the Tranche to which the Ship being sold or which has become a Total Loss relates; and

(ii) an amount which after the application of the prepayment to be made pursuant to Clause 8.11(b) results in the Security Cover Ratio being the greater of (A) 125 per cent. and (B) the percentage which applied immediately prior to the applicable event described in paragraph (a) or (b) of this Clause 8.8.

8.9 Effect of Prepayment Notice and Cancellation Notice

Neither a Prepayment Notice nor a Cancellation Notice may be withdrawn or amended without the consent of the Agent, given with the authorisation of the Majority Lenders, and:

(a) in the case of a Prepayment Notice, the amount specified in that Prepayment Notice shall become due and payable by the Borrowers on the date for prepayment specified in that Prepayment Notice; and

(b) in the case of a Cancellation Notice, the amount cancelled shall be permanently cancelled and may not be borrowed.

8.10 Amounts payable on prepayment

A prepayment shall be made together with accrued interest (and any other amount payable under Clause 21 or otherwise) in respect of the amount prepaid and, if the prepayment is not made on the last day of an Interest Period together with any sums payable under Clause 21.1(b) but without premium or penalty.

8.11 Application of partial prepayment

Each partial prepayment shall be applied:

(a) if made pursuant to Clauses 5.13, 8.4, 8.14, 15.2, 19.2, 23.3 or 24.5, proportionately between each Tranche and thereafter pro rata against the Instalments in respect of the Tranches which are at the time being outstanding and the relevant Balloon Instalments; and

(b) if made pursuant to Clause 8.8, first towards full repayment of the Tranche related to the Ship being sold or which has become a Total Loss, and any balance shall thereafter be applied towards reduction of the other Tranches outstanding at the time, first against the Balloon Instalment in respect of these Tranches and, thereafter, against the then outstanding Instalments which are at the time being outstanding in inverse order of maturity.

8.12 No reborrowing

No amount prepaid may be reborrowed.

8.13 Unwinding of Designated Transactions

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On or prior to any repayment or prepayment under this Clause 8 or any other provision of this Agreement, the Borrowers shall wholly or partially reverse, offset, unwind or otherwise terminate one or more of the continuing Designated Transactions so that the notional principal amount of the continuing Designated Transactions thereafter remaining does not and will not in the future (taking into account the scheduled amortisation) exceed the amount of the Loan as reducing from time to time thereafter pursuant to Clause 8.1.

8.14 Prepayment of Swap Benefit

If a Designated Transaction is terminated in circumstances where the Swap Bank would be obliged to pay an amount to the Borrowers under the Master Agreement, the Borrowers hereby agree that such payment shall be applied in prepayment of the Loan in accordance with the provisions of Clause 8.11(a) and authorise the Swap Bank to pay such amount to the Agent for such purpose.

9 CONDITIONS PRECEDENT

9.1 Documents, fees and no default

Each Lender's obligation to contribute to a Tranche is subject to the following conditions precedent:

(a) that, on or before the date of this Agreement, the Agent receives:

(i) the documents described in Part A of Schedule 3 in form and substance satisfactory to the Agent and its lawyers;

(ii) payment in full of the arrangement fee payable pursuant to Clause 20.1(a); and

(iii) payment in full of any expenses payable pursuant to Clause 20.2 which are due and payable on the date of this Agreement;

(b) that, on or before the Delivery Date, in the case of Ship A and Ship B and the Drawdown Date of Tranche C, the Agent receives:

(i) the documents described in Part B of Schedule 3 in form and substance satisfactory to the Agent and its lawyers;

(i) payment of any accrued commitment fee payable pursuant to paragraph (c) or, as the case may be (d) of Clause 20.1; and

(ii) payment of any expenses payable pursuant to Clause 20.2 which are due and payable on the Drawdown Date;

(c) in the case of the first Drawdown Date to occur under this Agreement, the Agent receives the structuring fee payable pursuant to Clause 20.1(b);

(d) that both at the date of each Drawdown Notice and at the relevant Drawdown Date:

(i) no Event of Default or Potential Event of Default has occurred or would result from the borrowing of the relevant Tranche;

(ii) the representations and warranties in Clause 10 and those of any Borrower or any Security Party which are set out in the other Finance Documents would be true and not misleading if repeated on each of those dates with reference to the circumstances then existing; and

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(iii) none of the circumstances contemplated by Clause 5.7 has occurred and is continuing; and

(iv) there has been no Material Adverse Change; and

(e) that, if the ratio set out in Clause 15.1 were applied immediately following the borrowing of a Tranche, the Borrowers would not be obliged to provide additional security or prepay part of the Loan under that Clause; and

(f) that the Agent has received, and found to be acceptable to it, any further opinions, consents, agreements and documents in connection with the Finance Documents which the Agent may, with the authorisation of the Majority Lenders, request by notice to the Borrowers prior to the relevant Drawdown Date.

9.2 Waiver of conditions precedent

If the Majority Lenders, at their discretion, permit a Tranche to be borrowed before certain of the conditions referred to in Clause 9.1 are satisfied, the Borrowers shall ensure that those conditions are satisfied within 5 Business Days after the relevant Drawdown Date (or such longer period as the Agent may, with the authorisation of the Majority Lenders, specify).

10 REPRESENTATIONS AND WARRANTIES

10.1 General

Each Borrower represents and warrants to each Creditor Party as follows.

10.2 Status

Each Borrower is duly incorporated, validly existing and in good standing under the laws of Liberia.

10.3 Share capital and ownership

Borrower A and Borrower B each have an authorised share capital of 500 registered/bearer shares of US$0.01 par value and Borrower C has an authorised share capital of 500 registered/bearer shares with no par value. All of which shares have been issued in registered form and the legal title and beneficial ownership of all those shares is held, free of any Security Interest or other claim, by the Corporate Guarantor.

10.4 Corporate power

Each Borrower has the corporate capacity, and has taken all corporate action and obtained all consents necessary for it:

(a) to execute the Finance Documents to which that Borrower is a party and any Assignable Charter;

(b) in the case of Borrower A and Borrower B, to execute the Shipbuilding Contract to which it is a party and to purchase and pay for the Ship to be owned by it; and

(c) to borrow under this Agreement, to enter into Designated Transactions under the Master Agreement and to make all the payments contemplated by, and to comply with, those Finance Documents to which it is a party.

10.5 Consents in force

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All the consents referred to in Clause 10.4 remain in force and nothing has occurred which makes any of them liable to revocation.

10.6 Legal validity; effective Security Interests

The Finance Documents to which each Borrower is a party, do now or, as the case may be, will, upon execution and delivery (and, where applicable, registration as provided for in the Finance Documents):

(a) constitute that Borrower's legal, valid and binding obligations enforceable against that Borrower in accordance with their respective terms; and

(b) create legal, valid and binding Security Interests enforceable in accordance with their respective terms over all the assets to which they, by their terms, relate,

subject to any relevant insolvency laws affecting creditors' rights generally.

10.7 No third party Security Interests

Without limiting the generality of Clause 10.6, at the time of the execution and delivery of each Finance Document to which each Borrower is a party:

(a) that Borrower will have the right to create all the Security Interests which that Finance Document purports to create; and

(b) no third party will have any Security Interest (except for Permitted Security Interests) or any other interest, right or claim over, in or in relation to any asset to which any such Security Interest, by its terms, relates.

10.8 No conflicts

The execution by each Borrower of each Finance Document to which it is a party, by Borrower A and Borrower B of each Shipbuilding Contract and the borrowing of the Loan (or any part thereof), and its compliance with each Finance Document to which it is a party will not involve or lead to a contravention of:

(a) any law or regulation; or

(b) the constitutional documents of that Borrower; or

(c) any contractual or other obligation or restriction which is binding on that Borrower or any of its assets,

and will not have a Material Adverse Effect.

10.9 No withholding taxes

All payments which each Borrower is liable to make under the Finance Documents to which it is a party may be made without deduction or withholding for or on account of any tax payable under any law of any Pertinent Jurisdiction.

10.10 No default

No Event of Default or Potential Event of Default has occurred.

10.11 Information

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All information which has been provided in writing by or on behalf of the Borrowers or any Security Party to any Creditor Party in connection with any Finance Document satisfied the requirements of Clause 11.5; all audited and unaudited accounts and financial statements which have been so provided satisfied the requirements of Clause 11.7; and there has been no change in the financial position or state of affairs of any Borrower, the Corporate Guarantor or the Group (or any member thereof) from that disclosed in the latest of those accounts which is likely to have a Material Adverse Effect.

10.12 No litigation

No legal or administrative action involving any Borrower or any Security Party (including action relating to any alleged or actual breach of the ISM Code or the ISPS Code) has been commenced or taken or, to any Borrower's knowledge, is likely to be commenced or taken which would, in either case, be likely to have a Material Adverse Effect.

10.13 Compliance with certain undertakings

At the date of this Agreement, the Borrowers are in compliance with Clauses 11.2, 11.4, 11.9, 11.13, 13, 14.3 and 14.10.

10.14 Taxes paid

Each Borrower has paid all taxes applicable to, or imposed on or in relation to that Borrower, its business or the Ship owned by it.

10.15 ISM Code and ISPS Code compliance

All requirements of the ISM Code and the ISPS Code as they relate to the Borrowers, the Approved Manager and the Ships have been complied with.

10.16 No Money laundering

Each Borrower:

(a) will not, and will procure that no Security Party, to the extent applicable, will, in connection with this Agreement or any of the other Finance Documents, contravene or permit any subsidiary to contravene, any law, official requirement or other regulatory measure or procedure implemented to combat "money laundering" (as defined in Article 1 of the Directive 2005/60/EC of the European Parliament and of the Council of the European Union of 26 October 2005) and comparable United States Federal and state laws.  Each Borrower shall further submit any documents and declarations on request, if such documents or declarations are required by any Creditor Party to comply with its domestic money laundering and/or legal identification requirements; and

(b) confirms that it is the beneficiary within the meaning of the German Anti Money Laundering Act (Gesetz über das Aufspüren von Gewinnen aus schweren Straftaten (Geldwäschegesetz)), acting for its own account and not for or on behalf of any other person for each part of the Loan made or to be made available to it under this Agreement.  That is to say, it acts for its own account and not for or on behalf of anyone else.

Each Borrower will promptly inform the Agent by written notice, if it is not or ceases to be the beneficiary and will provide in writing the name and address of the beneficiary.

The Agent shall promptly notify the Lenders of any written notice it receives under this Clause 10.16.

10.17 No immunity

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Each Borrower is subject to suit and to commercial law and neither it nor any of its properties have any right of immunity from suit, execution, attachment or other legal process in Liberia.

10.18 Choice of law

The choice of the laws of England to govern the Loan Agreement and those other Finance Documents which are expressed to be governed by the laws of England, the laws of Germany to govern the Account Pledges and the laws of the applicable Approved Flag State to govern the Mortgages (other than any applicable deed of covenant which shall be governed by English law), constitutes a valid choice of law and the submission by the Borrowers or, as the case may be, the relevant Security Parties thereunder to the non-exclusive jurisdiction of the Courts of England or, in the case of the Account Pledges, Germany or, in the case of the Mortgages, the applicable Approved Flag State is a valid submission and does not contravene the laws of Liberia and the laws of England or, in the case of the Account Pledges, Germany or, in the case of the Mortgages, the applicable Approved Flag State, will be applied by the Courts of Liberia if the Loan Agreement or those other Finance Documents or any claim thereunder comes under their jurisdiction upon proof of the relevant provisions of the laws of England or, in the case of the Account Pledges, Germany or, in the case of the Mortgages, the applicable Approved Flag State.

10.19 Repetition

The representations and warranties in this Clause 10 shall be deemed to be repeated by the Borrowers:

(a) on the date of service of each Drawdown Notice;

(b) on each Drawdown Date; and

(c) with the exception of Clauses 10.9, 10.10, 10.11 and 10.12, on the first day of each Interest Period and on the date of any Compliance Certificate issued pursuant to Clause 11.18,

as if made with reference to the facts and circumstances existing on each such day.

10.20 Validity and completeness of the Shipbuilding Contracts

Each Shipbuilding Contract constitutes valid, binding and enforceable obligations of the parties thereto in accordance with its terms and:

(a) the copies of the Shipbuilding Contracts delivered to the Agent before the date of this Agreement is a true and complete copy;

(b) no amendments or additions to each Shipbuilding Contract have been agreed nor has the relevant Borrower or a Builder waived any of their respective rights hereunder.

10.21 No rebates etc.

There is no agreement or understanding to allow or pay any rebate, premium, commission, discount or other benefit or payment to Borrower A, Borrower B, the Builder or a third party in connection with the purchase of Ship A or Ship B, other than as disclosed to the Agent in writing on or prior to the date of this Agreement.

11 GENERAL UNDERTAKINGS

11.1 General

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Each Borrower undertakes with each Creditor Party to comply with the following provisions of this Clause 11 at all times during the Security Period except as the Agent may, with the authorisation of the Majority Lenders, otherwise permit.

11.2 Title; negative pledge

Each Borrower will:

(a) hold the legal title to, and own the entire beneficial interest in the Ship owned by it, her Insurances and Earnings, free from all Security Interests and other interests and rights of every kind, except for those created by the Finance Documents and the effect of assignments contained in the Finance Documents and except for Permitted Security Interests;

(b) not create or permit to arise any Security Interest (except for Permitted Security Interests) over any other asset, present or future (including, but not limited to, the Borrowers' rights against the Swap Bank under the Master Agreement or all or any part of the Borrowers' interest in any amount payable to the Borrowers by the Swap Bank under the Master Agreement); and

(c) procure that its liabilities under the Finance Documents to which it is a party rank at least pari passu with all its other present and future unsecured liabilities, except for liabilities which are mandatorily preferred by law.

11.3 No disposal of assets

No Borrower will transfer, lease or otherwise dispose of:

(a) all or a substantial part of its assets (including the Ships), whether by one transaction or a number of transactions, whether related or not; or

(b) any debt payable to it or any other right (present, future or contingent right) to receive a payment, including any right to damages or compensation,

but paragraph (a) does not apply to any charter of a Ship.

11.4 No other liabilities or obligations to be incurred

No Borrower will incur any liability or obligation (including, without limitation, any Financial Indebtedness or any obligations under a guarantee) except:

(a) liabilities and obligations under the Finance Documents and/or the Assignable Charter and/or the Shipbuilding Contract to which it is or, as the case may be, will be a party;

(b) liabilities or obligations reasonably incurred in the normal course of its business of trading, operating and chartering, maintaining and repairing the Ship owned by it (including, without limitation, any shareholder loan subject to the rights of the shareholder which is the provider of such loan being fully subordinated in writing and otherwise in a manner acceptable to the Agent (acting on the instructions of the Majority Lenders) to the rights of the Creditor Parties under the Finance Documents but excluding any investments, any sale or lease back agreements and any off-balance-sheet obligations); and

(c) in the case of Borrower C, liabilities and obligations in connection with the Existing Indebtedness until it is re-financed under this Agreement.

11.5 Information provided to be accurate

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All financial and other information, including but not limited to factual information, exhibits and reports, which is provided in writing by or on behalf of a Borrower under or in connection with any Finance Document will be true and not misleading and will not omit any material fact or consideration.

11.6 Provision of financial statements

Each Borrower will send or procure that there are sent to the Agent:

(a) as soon as possible, but in no event later than 180 days after the end of each Financial Year of that Borrower and the Corporate Guarantor, the individual unaudited annual financial statements of that Borrower and the consolidated audited annual financial statements of the Group for that Financial Year (commencing with the financial statements for the Financial Year which ended on 31 December 2013), in the case of the unaudited annual financial statements of that Borrower, duly certified as to their correctness by the chief financial officer of the Corporate Guarantor; and

(b) as soon as possible, but in no event later than 90 days after the end of each 6-month period ending on 30 June and 31 December in each Financial Year of that Borrower or, as the case may be, the Corporate Guarantor, the semi-annual individual unaudited financial statements in respect of that Borrower or, in the case of the Corporate Guarantor, the semi-annual consolidated unaudited financial statements of the Group, in each case, for that 6-month period (commencing with the financial statements for the 6-month period ending on 30 June 2014), duly certified as to their correctness by the chief financial officer of the Corporate Guarantor; and

(c) promptly after each request by the Agent, such further financial or other information in respect of that Borrower, each Ship, the Corporate Guarantor, the other Security Parties and the Group (including, without limitation, any information regarding any sale and purchase agreements, investment brochures, shipbuilding contracts and charter agreements) as may be requested by the Agent.

11.7 Form of financial statements

All accounts delivered under Clause 11.6 will:

(a) be prepared in accordance with all applicable laws and generally acceptable accounting principles consistently applied and, in the case of any audited financial statements, be prepared by an approved auditor;

(b) give a true and fair view of the state of affairs of each Borrower, the Corporate Guarantor and the Group at the date of those accounts and of its profit for the period to which those accounts relate; and

(c) fully disclose or provide for all significant liabilities of each Borrower, the Corporate Guarantor and the Group.

11.8 Shareholder or creditor notices and press releases

Each Borrower will send the Agent, at the same time as they are despatched, copies of all communications which are despatched to that Borrower's shareholders or creditors or any class of them and copies of any press releases issued by any Borrower or any Security Party, unless such communications are available through the internet.

11.9 Consents

Each Borrower will maintain in force and promptly obtain or renew, and will promptly send certified copies to the Agent of, all consents required:

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(a) for that Borrower to perform its obligations under any Finance Document and/or any Assignable Charter and/or Shipbuilding Contract to which it is or, as the case may be, will be a party;

(b) for the validity or enforceability of any Finance Document and/or Assignable Charter and/or the Shipbuilding Contract to which it is or, as the case may be, will be a party; and

(c) for that Borrower to continue to own and operate the Ship owned by it,

and that Borrower will comply with the terms of all such consents.

11.10 Maintenance of Security Interests

Each Borrower will:

(a) at its own cost, do all that it is necessary to ensure that any Finance Document validly creates the obligations and the Security Interests which it purports to create; and

(b) without limiting the generality of paragraph (a), at its own cost, promptly register, file, record or enrol any Finance Document with any court or authority in all Pertinent Jurisdictions, pay any stamp, registration or similar tax in all Pertinent Jurisdictions in respect of any Finance Document, give any notice or take any other step which, in the opinion of the Majority Lenders, is or has become necessary or desirable for any Finance Document to be valid, enforceable or admissible in evidence or to ensure or protect the priority of any Security Interest which it creates.

11.11 Notification of litigation

Each Borrower will provide the Agent with details of any legal or administrative action involving that Borrower, any Security Party, the Approved Manager or the Ship owned by it, the Earnings or the Insurances in respect of that Ship as soon as such action is instituted or it becomes apparent to that Borrower that it is likely to be instituted, unless it is clear that the legal or administrative action cannot be considered material in the context of any Finance Document, and each Borrower shall procure that reasonable measures are taken to defend any such legal or administrative action.

11.12 No amendment to the Assignable Charter

No Borrower will agree to any amendment or supplement to, or waive or fail to enforce, the Assignable Charter to which it is a party.

11.13 Principal place of business

Each Borrower will maintain its place of business, and keep its corporate documents and records, at the address stated in Clause 28.2(a); and no Borrower will establish, or do anything as a result of which it would be deemed to have, a place of business in any country other than Liberia or Greece.

11.14 Confirmation of no default

Each Borrower will, within 2 Business Days after service by the Agent of a written request, serve on the Agent a notice which is signed by a director of that Borrower and which:

(a) states that no Event of Default or Potential Event of Default has occurred; or

(b) states that no Event of Default or Potential Event of Default has occurred, except for a specified event or matter, of which all material details are given.

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The Agent may serve reasonable requests under this Clause 11.14 from time to time but only if asked to do so by a Lender or Lenders having Contributions exceeding 10 per cent. of the Loan or (if none of the Tranches have been advanced) Commitments exceeding 10 per cent. of the Total Commitments; and this Clause 11.14 does not affect the Borrowers' obligations under Clause 11.15.

11.15 Notification of default

Each Borrower will promptly notify the Agent of:

(a) the occurrence of an Event of Default or a Potential Event of Default; or

(b) any matter which indicates that an Event of Default or a Potential Event of Default may have occurred,

and will keep the Agent fully up-to-date with all developments.

11.16 Provision of copies and translation of documents

Each Borrower will supply the Agent with a sufficient number of copies of the documents referred to above to provide 1 copy for each Creditor Party; and if the Agent so requires in respect of any of those documents, the Borrowers will provide a certified English translation or have them notarised and/or legalised by a competent authority.

11.17 Minimum liquidity

The Borrowers undertake to maintain in the Liquidity Account, as from each Drawdown Date and at all times thereafter during the Security Period, credit balances in the amount of $400,000 in relation to the Ship to which that Drawdown Date relates (the " Required Amount"),  Provided that if at any time during the Security Period a Mortgaged Ship is sold, the Required Amount in respect of that Mortgaged Ship may be released to the Borrowers subject to no Event of Default or Potential Event of Default being in existence at the relevant time or resulting from such release.

11.18 Compliance Check

Compliance with the undertakings contained in Clauses 11.17 and 15.1 shall be determined on 30 June and 31 December in each Financial Year of that Borrower and the Group, being, in each case, the date on which the Borrowers and the Corporate Guarantor shall deliver at the same time it delivers the financial statements in accordance with Clause 11.6 to the Agent a Compliance Certificate, demonstrating (inter alia) their compliance (or not, as the case may be) with the provisions of such Clauses duly signed by the chief financial officer of the Corporate Guarantor.

11.19 Compliance Certificate

(a) The Borrowers shall deliver to the Agent, together with each set of financial statements delivered to the Agent pursuant to paragraphs (a) and (b) of Clause 11.6, a Compliance Certificate.

(b) Each Compliance Certificate shall be duly signed by one director of each Borrower and the Corporate Guarantor, evidencing (inter alia) the Borrower's compliance (or not, as the case may be) with the provisions of Clauses 11.17, 12.3(b) and 15.1.

11.20 No amendment to the Shipbuilding Contract

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Neither Borrower A nor Borrower B will agree to any material amendment or supplement to, or waive or fail to enforce, the Shipbuilding Contract to which it is a party or any of its provisions.

11.21 "Know your customer" checks

If:

(a) the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the date of this Agreement;

(b) any change in the status of any Borrower or any Security Party after the date of this Agreement; or

(c) a proposed assignment or transfer by a Lender of any of its rights and obligations under this Agreement to a party that is not a Lender prior to such assignment or transfer,

obliges the Agent or any Lender (or, in the case of paragraph (c), any prospective new Lender) to comply with "know your customer" or similar identification procedures in circumstances where the necessary information is not already available to it, the Borrowers shall promptly upon the request of the Agent or the Lender concerned supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself or on behalf of any Lender) or the Lender concerned (for itself or, in the case of the event described in paragraph (c), on behalf of any prospective new Lender) in order for the Agent, the Lender concerned or, in the case of the event described in paragraph (c), any prospective new Lender to carry out and be satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.

12 CORPORATE UNDERTAKINGS

12.1 General

Each Borrower also undertakes with each Creditor Party to comply with the following provisions of this Clause 12 at all times during the Security Period except as the Agent may, with the authorisation of the Majority Lenders, otherwise permit in writing.

12.2 Maintenance of status

Each Borrower will maintain its separate corporate existence and remain in good standing under the laws of the Liberia.

12.3 Negative undertakings

No Borrower will:

(a) change the nature of its business; or

(b) pay any dividend or make any other form of distribution or effect any form of redemption, purchase or return of share capital if an Event of Default has occurred at the relevant time or an Event of Default will result from the payment of a dividend or the making of any other form of distribution; or

(c) provide any form of credit or financial assistance to:

(i) a person who is directly or indirectly interested in that Borrower's share or loan capital; or

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(ii) any company in or with which such a person is directly or indirectly interested or connected,

or enter into any transaction with or involving such a person or company on terms which are, in any respect, less favourable to that Borrower than those which it could obtain in a bargain made at arms' length;

(d) open or maintain any account with any bank or financial institution except accounts with the Agent and the Security Trustee for the purposes of the Finance Documents;

(e) issue, allot or grant any person a right to any shares in its capital or repurchase or reduce its issued share capital;

(f) acquire any shares or other securities other than US or UK Treasury bills and certificates of deposit issued by major North American or European banks, or enter into any transaction in a derivative other than any Designated Transactions; or

(g) enter into any form of amalgamation, merger or de-merger, acquisition, divesture, split-up, or any form of reconstruction or reorganisation.

13 INSURANCE

13.1 General

Each Borrower also undertakes with each Creditor Party to comply with the following provisions of this Clause 13 at all times during the Security Period except as the Agent may, with the authorisation of the Majority Lenders, otherwise permit.

13.2 Maintenance of obligatory insurances

Each Borrower shall keep the Ship owned by it insured at the expense of that Borrower against:

(a) fire and usual marine risks (including hull and machinery and excess risks);

(b) war risks (including, without limitation, protection and indemnity war risks with a separate limit not less than hull value);

(c) protection and indemnity risks (including, without limitation, protection and indemnity war risks in excess of the amount for war risks (hull) and oil pollution liability risks) in each case in the highest amount available in the international insurance market); and

(d) any other risks the insurance of which the Security Trustee acting on the instructions of the Majority Lenders, having regard to practices, recommendations and other circumstances prevailing at the relevant time, may from time to time require by notice to that Borrower.

13.3 Terms of obligatory insurances

Each Borrower shall effect such insurances in such amounts in such currency and upon such terms and conditions (including, without limitation, any LSW 1189 or, in the opinion of the Security Trustee, comparable mortgage clause) as shall from time to time be approved in writing by the Security Trustee in its sole discretion, but in any event as follows:

(a) in Dollars;

(b) in the case of fire and usual marine risks and war risks, on an agreed value basis in an amount equal to at least the higher of (i) an amount which, when aggregated with the amount for which the other Mortgaged Ship is insured pursuant to this Clause 13.3(b) is

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equal to 120 per cent. of the aggregate of (A) the Loan and (B) the principal amount secured by any equal or prior ranking Security Interest on that Ship and (ii) the Market Value of that Borrower's Ship;

(c) in the case of oil pollution liability risks, for an amount equal to the highest level of cover from time to time available under basic protection and indemnity club entry (with the International Group of Protection and Indemnity Clubs) and the international marine insurance market (currently $1,000,000,000 for any one accident or occurrence);

(d) in relation to protection and indemnity risks in respect of the full value and tonnage of that Ship;

(e) in relation to war risks insurance, extended to cover piracy and terrorism where excluded under the fire and usual marine risks insurance;

(f) on approved terms and conditions;

(g) such other risks of whatever nature and howsoever arising in respect of which insurance would be maintained by a prudent owner of a vessel similar to that Ship; and

(h) through approved brokers and with approved insurance companies and/or underwriters or, in the case of war risks and protection and indemnity risks, in approved war risks and protection and indemnity risks associations which are members of the International Group of Protection and Indemnity Associations, and have a Standard & Poor's rating of at least BBB- or a comparable rating by any other rating agency acceptable to the Security Trustee (acting with the authorisation of the Majority Lenders).

13.4 Further protections for the Creditor Parties

In addition to the terms set out in Clause 13.3, each Borrower shall, and shall procure that:

(a) it and any and all third parties who are named assured or co-assured under any obligatory insurance shall assign their interest in any and all obligatory insurances and other Insurances if so required by the Agent;

(b) whenever the Security Trustee requires, the obligatory insurances name (or be amended to name) the Security Trustee as additional named assured for its rights and interests, warranted no operational interest and with full waiver of rights of subrogation they may have under any applicable law against the Security Trustee but without the Security Trustee thereby being liable to pay (but having the right to pay) premiums, calls or other assessments in respect of such insurance;

(c) the interest of the Security Trustee as assignee and as loss payee shall be duly endorsed on all slips, cover notes, policies, certificates of entry or other instruments of insurance in respect of the obligatory insurances;

(d) the obligatory insurances shall name the Security Trustee as sole loss payee with such directions for payment as the Security Trustee may specify;

(e) the obligatory insurances shall provide that all payments by or on behalf of the insurers under the obligatory insurances to the Security Trustee shall be made without set-off, counterclaim or deductions or condition whatsoever;

(f) the obligatory insurances shall provide that the insurers shall waive, to the fullest extent permitted by English law, their entitlement (if any) (whether by statute, common law, equity, or otherwise) to be subrogated to the rights and remedies of the Security Trustee in respect of any rights or interests (secured or not) held by or available to the Security Trustee in respect of the Secured Liabilities, until the Secured Liabilities shall have been fully repaid

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and discharged, except that the insurers shall not be restricted by the terms of this paragraph (f) from making personal claims against persons (other than any Borrower or any Creditor Party) in circumstances where the insurers have fully discharged their liabilities and obligations under the relevant obligatory insurances;

(g) the obligatory insurances shall provide that the obligatory insurances shall be primary without right of contribution from other insurances effected by the Security Trustee or any other Creditor Party;

(h) the obligatory insurances shall provide that the Security Trustee may make proof of loss if that Borrower fails to do so; and

(i) the obligatory insurances shall provide that if any obligatory insurance is cancelled, or if any substantial change is made in the coverage which adversely affects the interest of the Security Trustee, or if any obligatory insurance is allowed to lapse for non‑payment of premium, such cancellation, charge or lapse shall only be effective against the Security Trustee 14 days (or 7 days in the case of war risks) after receipt by the Security Trustee of prior written notice from the insurers of such cancellation, change or lapse.

13.5 Renewal of obligatory insurances

Each Borrower shall:

(a) at least 14 days before the expiry of any obligatory insurance effected by it:

(i) notify the Security Trustee of the brokers, underwriters, insurance companies and any protection and indemnity or war risks association through or with whom that Borrower proposes to renew that obligatory insurance and of the proposed terms and conditions of renewal; and

(ii) seek the Security Trustee's approval to the matters referred to in paragraph (i);

(b) at least 7 days before the expiry of any obligatory insurance, renew that obligatory insurance in accordance with the Security Trustee's approval pursuant to paragraph (a); and

(c) procure that the approved brokers and/or the war risks and protection and indemnity associations with which such a renewal is effected shall promptly after the renewal notify the Security Trustee in writing of the terms and conditions of the renewal.

13.6 Copies of policies; letters of undertaking

Each Borrower shall ensure that all approved brokers provide the Security Trustee with pro forma copies of all cover notes and policies relating to the obligatory insurances which they are to effect or renew and of a letter or letters of undertaking in a form required by the Security Trustee and including undertakings by the approved brokers that:

(a) they will have endorsed on each policy, immediately upon issue, a loss payable clause and a notice of assignment complying with the provisions of Clause 13.4;

(b) they will hold such policies, and the benefit of such insurances, to the order of the Security Trustee in accordance with the said loss payable clause;

(c) they will advise the Security Trustee immediately of any material change to the terms of the obligatory insurances;

(d) they will notify the Security Trustee, not less than 14 days before the expiry of the obligatory insurances, in the event of their not having received notice of renewal instructions from that

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Borrower or its agents and, in the event of their receiving instructions to renew, they will promptly notify the Security Trustee of the terms of the instructions; and

(e) they will not set off against any sum recoverable in respect of a claim relating to the Ship owned by that Borrower under such obligatory insurances any premiums or other amounts due to them or any other person whether in respect of that Ship or otherwise, they waive any lien on the policies, or any sums received under them, which they might have in respect of such premiums or other amounts, and they will not cancel such obligatory insurances by reason of non-payment of such premiums or other amounts, and will arrange for a separate policy to be issued in respect of that Ship forthwith upon being so requested by the Security Trustee provided that the general or, as the case may be, individual conditions of such insurances permit.

13.7 Copies of certificates of entry; letters of undertaking

Each Borrower shall ensure that any protection and indemnity and/or war risks associations in which the Ship owned by that Borrower is entered provides the Security Trustee with:

(a) a certified copy of the certificate of entry for that Ship;

(b) a letter or letters of undertaking in such form as may be required by the Security Trustee;

(c) where required to be issued under the terms of insurance/indemnity provided by that Borrower's protection and indemnity association, a certified copy of each United States of America voyage quarterly declaration (or other similar document or documents) made by that Borrower in accordance with the requirements of such protections and indemnity association; and

(d) a certified copy of each certificate of financial responsibility for pollution by oil or other Environmentally Sensitive Material issued by the relevant certifying authority or, as the case may be, protection and indemnity associations in relation to that Ship (if applicable).

13.8 Deposit of original policies

Each Borrower shall ensure that all policies relating to obligatory insurances effected by it are deposited with the approved brokers through which the insurances are effected or renewed.

13.9 Payment of premiums

Each Borrower shall punctually pay all premiums or other sums payable in respect of the obligatory insurances effected by it and produce all relevant receipts when so required by the Security Trustee.

13.10 Guarantees

Each Borrower shall ensure that any guarantees required by a protection and indemnity or war risks association are promptly issued and remain in full force and effect.

13.11 Restrictions on employment

Each Borrower shall not employ the Ship owned by it, nor shall permit it to be employed, outside the cover provided by any obligatory insurances.

13.12 Compliance with terms of insurances

Each Borrower shall not do nor omit to do (nor permit to be done or not to be done) any act or thing which would or might render any obligatory insurance invalid, void, voidable or

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unenforceable or render any sum payable under an obligatory insurance repayable in whole or in part; and, in particular it shall:

(a) take all necessary action and comply with all requirements which may from time to time be applicable to the obligatory insurances, and (without limiting the obligation contained in Clause 13.6(c)) ensure that the obligatory insurances are not made subject to any exclusions or qualifications to which the Security Trustee has not given its prior approval;

(b) not make any changes relating to the classification or classification society or manager or operator of the Ship owned by it approved by the underwriters of the obligatory insurances;

(c) make (and promptly supply copies to the Agent (upon its request)) of all quarterly or other voyage declarations which may be required by the protection and indemnity risks association in which that Ship is entered to maintain cover for trading to the United States of America and Exclusive Economic Zone (as defined in the United States Oil Pollution Act 1990 or any other applicable legislation) and, if applicable, shall procure that the Approved Manager complies with this requirement; and

(d) not employ that Ship, nor allow it to be employed, otherwise than in conformity with the terms and conditions of the obligatory insurances, without first obtaining the consent of the insurers and complying with any requirements (as to extra premium or otherwise) which the insurers specify.

13.13 Alteration to terms of insurances

Each Borrower shall neither make nor agree to any alteration to the terms of any obligatory insurance or waive any right relating to any obligatory insurance.

13.14 Settlement of claims

Each Borrower shall not settle, compromise or abandon any claim under any obligatory insurance for Total Loss or for a Major Casualty, and shall make all reasonable efforts and provide all documents, evidence and information to enable the Security Trustee to collect or recover any moneys which at any time become payable in respect of the obligatory insurances and shall make all reasonable efforts to ensure such collection or recovery is made.

13.15 Provision of copies of communications

Each Borrower shall provide the Security Trustee when so reasonably requested, at the time of each such communication, copies of all written communications between that Borrower and:

(a) the approved brokers;

(b) the approved protection and indemnity and/or war risks associations; and

(c) the approved insurance companies and/or underwriters, which relate directly or indirectly to:

(i) that Borrower's obligations relating to the obligatory insurances including, without limitation, all requisite declarations and payments of additional premiums or calls; and

(ii) any credit arrangements made between that Borrower and any of the persons referred to in paragraphs (a), (b) or (c) relating wholly or partly to the effecting or maintenance of the obligatory insurances.

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13.16 Provision of information and further undertakings

In addition, each Borrower shall promptly provide the Security Trustee (or any persons which it may designate) with any information which the Security Trustee (or any such designated person) requests for the purpose of:

(a) obtaining or preparing any report from an independent marine insurance broker as to the adequacy of the obligatory insurances effected or proposed to be effected; and/or

(b) effecting, maintaining or renewing any such insurances as are referred to in Clause 13.17 or dealing with or considering any matters relating to any such insurances,

and that Borrower shall:

(i) do all things necessary and provide the Agent and the Security Trustee with all documents and information to enable the Security Trustee to collect or recover any moneys in respect of the Insurances which are payable to the Security Trustee pursuant to the Finance Documents; and

(ii) promptly provide the Agent with full information regarding any Major Casualty in consequence whereof the Ship owned by that Borrower has become or may become a Total Loss and agree to any settlement of such casualty or other accident or damage to that Ship only with the Agent's prior written consent, such consent not to be unreasonably withheld,

and that Borrower shall, forthwith upon demand, indemnify the Security Trustee in respect of all fees and other expenses incurred by or for the account of the Security Trustee in connection with any such report as is referred to in paragraph (a).

13.17 Mortgagee's interest and additional perils insurances

The Security Trustee shall be entitled from time to time to effect, maintain and renew all or any of the following insurances in such amounts, on such terms, through such insurers and generally in such manner as the Majority Lenders may from time to time consider appropriate:

(a) a mortgagee's interest insurance providing for the indemnification of the Creditor Parties for any losses under or in connection with any Finance Document (in an amount of up to 120 per cent. of the Loan) which directly or indirectly result from loss of or damage to a Ship or a liability of that Ship or of the Borrower owning that Ship, being a loss or damage which is prima facie covered by an obligatory insurance but in respect of which there is a non-payment (or reduced payment) by the underwriters by reason of, or on the basis of an allegation concerning:

(i) any act or omission on the part of that Borrower, of any operator, charterer, manager or sub-manager of that Ship or of any officer, employee or agent of that Borrower or of any such person, including any breach of warranty or condition or any non-disclosure relating to such obligatory insurance;

(ii) any act or omission, whether deliberate, negligent or accidental, or any knowledge or privity of that Borrower, any other person referred to in paragraph (i) above, or of any officer, employee or agent of that Borrower or of such a person, including the casting away or damaging of that Ship and/or that Ship being unseaworthy; and/or

(iii) any other matter capable of being insured against under a mortgagee's interest marine insurance policy whether or not similar to the foregoing; and

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(b) a mortgagee's interest additional perils insurance providing for the indemnification of the Creditor Parties against, among other things, any possible losses or other consequences of any Environmental Claim, including the risk of expropriation, arrest or any form of detention of a Ship, the imposition of any Security Interest over that Ship and/or any other matter capable of being insured against under a mortgagee's interest additional perils policy whether or not similar to the foregoing, and in an amount of up to 110 per cent. of the Loan,

and the Borrowers shall upon demand fully indemnify the Security Trustee in respect of all premiums and other expenses which are incurred in connection with or with a view to effecting, maintaining or renewing any such insurance or dealing with, or considering, any matter arising out of any such insurance.

13.18 Modification of insurance requirements

The Security Trustee shall notify the Borrowers of any proposed modification under Clause 13.18 to the requirements of this Clause 13 which the Security Trustee reasonably considers appropriate in the circumstances, and such modification shall take effect on and from the date it is notified in writing to the Borrowers as an amendment to this Clause 13 and shall bind the Borrowers accordingly from the date the Borrowers acknowledge in writing that they have been notified respectively.

13.19 Compliance with mortgagee's instructions

The Security Trustee shall be entitled (without prejudice to or limitation of any other rights which it may have or acquire under any Finance Document) to require a Ship to remain at any safe port or to proceed to and remain at any safe port designated by the Security Trustee until the Borrower owning that Ship implements any amendments to the terms of the obligatory insurances and any operational changes required as a result of a notice served under Clause 13.19

14 SHIP COVENANTS

14.1 General

Each Borrower also undertakes with each Creditor Party to comply with the following provisions of this Clause 14 at all times during the Security Period except as the Agent, with the authorisation of the Majority Lenders, may otherwise permit in writing (and in the case of Clause 14.5, such permission not to be unreasonably withheld).

14.2 Ship's name and registration

Each Borrower shall keep the Ship owned by it registered in its name under an Approved Flag; shall not do, omit to do or allow to be done anything as a result of which such registration might be cancelled or imperilled; and shall not change the name or port of registry of that Ship.

14.3 Repair and classification

Each Borrower shall, and shall procure that the Approved Manager shall, keep the Ship owned by that Borrower in a good and safe condition and state of repair, sea and cargo worthy in all respects:

(a) consistent with first-class ship ownership and management practice;

(b) so as to maintain the highest class free of overdue recommendations and conditions, with a classification society which is a member of IACS and acceptable to the Agent save for the China Classification Society and the Russian Maritime Registry of Shipping Provided that

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China Classification Society may be acceptable as a secondary classification society as long as the Ship is classed by a classification society in all respects acceptable to the Agent;

(c) so as to comply with all laws and regulations applicable to vessels registered at ports in Liberia, the Approved Flag State or to vessels trading to any jurisdiction to which that Ship may trade from time to time, including but not limited to the ISM Code and the ISPS Code,

and the Agent shall be given power of attorney in the form attached as Schedule 7 to act on behalf of that Borrower in order to, inspect the class records and any files held by the classification society and to require the classification society to provide the Agent or any of its nominees with any information, document or file, it might request and the classification society shall be fully entitled to rely hereon without any further inquiry.

14.4 Classification society undertaking

Each Borrower shall instruct the classification society referred to in Clause 14.3 (and procure that the classification society undertakes with the Security Trustee) in relation to its Ship:

(a) to send to the Security Trustee, following receipt of a written request from the Security Trustee, certified true copies of all original class records and any other related records held by the classification society in relation to the Ship owned by that Borrower;

(b) to allow the Security Trustee (or its agents), at any time and from time to time, to inspect the original class and related records of that Ship at the offices of the classification society and to take copies of them;

(c) to notify the Security Trustee immediately in writing if the classification society:

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

(ii) becomes aware of any facts or matters which may result in or have resulted in a change, suspension, discontinuance, withdrawal or expiry of that Ship's class under the rules or terms and conditions of that Borrower's or that Ship's membership of the classification society;

(d) following receipt of a written request from the Security Trustee:

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

(ii) if that Borrower is in default of any of its contractual obligations or liabilities to the classification society, to specify to the Security Trustee in reasonable detail the facts and circumstances of such default, the consequences thereof, and any remedy period agreed or allowed by the classification society.

14.5 Modification

No Borrower shall make any modification or repairs to, or replacement of, its Ship or equipment installed on it which would or might materially alter the structure, type or performance characteristics of that Ship or materially reduce its value.

14.6 Removal of parts

No Borrower shall remove any material part of its Ship, or any item of equipment installed on, that Ship unless the part or item so removed is forthwith replaced by a suitable part or item which is in the same condition as or better condition than the part or item removed, is

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free from any Security Interest or any right in favour of any person other than the Security Trustee and becomes on installation on that Ship the property of that Borrower and subject to the security constituted by the relevant Mortgage (if applicable) Provided that a Borrower may install equipment owned by a third party if the equipment can be removed without any risk of damage to the Ship owned by it.

14.7 Surveys

Each Borrower shall submit the Ship owned by it regularly to all periodical or other surveys which may be required for classification purposes and, if so required by the Security Trustee provide the Security Trustee, with copies of all survey reports.

14.8 Inspection

Each Borrower shall permit the Security Trustee (by surveyors or other persons appointed by it for that purpose) to board the Ship owned by that Borrower at all reasonable times to inspect its condition or to satisfy themselves about proposed or executed repairs and shall afford all proper facilities for such inspections at the Borrowers' expense, and if the inspector or surveyor appointed by the Security Trustee under this Clause is of the opinion that there are any technical, commercial or operational actions being undertaken or omitted to be undertaken by the Borrower which is the owner of that Ship or the Approved Manager which affect the operation or value of that Ship, the Borrowers shall forthwith (at their expense) on the Security Trustee's demand remedy such action or inaction.

14.9 Prevention of and release from arrest

Each Borrower shall promptly discharge:

(a) all liabilities which give or may give rise to maritime or possessory liens on or claims enforceable against the Ship owned by it, the Earnings or the Insurances in respect of that Ship;

(b) all taxes, dues and other amounts charged in respect of that Ship, the Earnings or the Insurances in respect of that Ship; and

(c) all other outgoings whatsoever in respect of that Ship, the Earnings or the Insurances in respect of that Ship,

and, forthwith upon receiving notice of the arrest of that Ship, or of its detention in exercise or purported exercise of any lien or claim, that Borrower shall procure its release by providing bail or otherwise as the circumstances may require.

14.10 Compliance with laws etc.

Each Borrower shall:

(a) comply, or procure compliance with the ISM Code, the ISPS Code, all Environmental Laws and all other laws or regulations relating to the Ship owned by it, its ownership, operation and management or to the business of that Borrower;

(b) not employ that Ship nor allow its employment in any manner contrary to any law or regulation in any relevant jurisdiction including but not limited to the ISM Code and the ISPS Code; and

(c) in the event of hostilities in any part of the world (whether war is declared or not), not cause or permit that Ship to enter or trade to any zone which is declared a war zone by any government or by that Ship's war risks insurers unless the prior written consent of the

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Security Trustee has been given and that Borrower has (at its expense) effected any special, additional or modified insurance cover which the Security Trustee may require.

14.11 Provision of information

Each Borrower shall promptly provide the Security Trustee with any information which it requests regarding:

(a) the Ship owned by it, its employment, position and engagements;

(b) the Earnings and payments and amounts due to the master and crew of that Ship;

(c) any expenses incurred, or likely to be incurred, in connection with the operation, maintenance or repair of that Ship and any payments made in respect of that Ship;

(d) any towages and salvages; and

(e) its compliance, the Approved Manager's compliance and the compliance of that Ship with the ISM Code and the ISPS Code,

and, upon the Security Trustee's request, provide copies of any current charter relating to that Ship, of any current charter guarantee and copies of that Borrower's or the Approved Manager's Document of Compliance, Safety Management Certificate and ISSC.

14.12 Notification of certain events

Each Borrower shall immediately notify the Security Trustee by letter, of:

(a) its entry into a demise charter in respect of the Ship owned by it for any period;

(b) its entry into any time or consecutive voyage charter in respect of the Ship owned by it for a term which exceeds, or which by virtue of any optional extensions may exceed, 12 months;

(c) any casualty which is a Major Casualty;

(d) any occurrence as a result of which the Ship owned by it has become a Total Loss;

(e) any requirement, condition or recommendation made by any insurer or classification society or by any competent authority which is not immediately complied with;

(f) any arrest or detention of that Ship, any exercise or purported exercise of any lien on that Ship or its Earnings or any requisition of that Ship for hire;

(g) any intended dry docking of that Ship;

(h) any Environmental Claim made against that Borrower or in connection with that Ship, or any Environmental Incident;

(i) any claim for breach of the ISM Code or the ISPS Code being made against that Borrower, the Approved Manager or otherwise in connection with that Ship;

(j) any other matter, event or incident, actual or threatened, the effect of which will or could lead to the ISM Code or the ISPS Code not being complied with; or

(k) its entry  into any agreement or arrangement for the postponement of any date on which any Earnings are due, the reduction of the amount of any Earnings or otherwise for the release or adverse alteration of any right of that Borrower to any Earnings,

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and that Borrower shall keep the Security Trustee advised in writing on a regular basis and in such detail as the Security Trustee shall require of that Borrower's, the Approved Manager's or any other person's response to any of those events or matters.

14.13 Restrictions on chartering, appointment of managers etc.

No Borrower shall, in relation to the Ship owned by it:

(a) enter into any charter in relation to that Ship under which more than 2 months' hire (or the equivalent) is payable in advance;

(b) appoint a manager of that Ship other than the Approved Manager or agree to any alteration to the terms of the Approved Manager's appointment;

(c) charter that Ship otherwise than on bona fide arm's length terms at the time when that Ship is fixed;

(d) de-activate or lay-up that Ship; or

(e) put that Ship into the possession of any person for the purpose of work being done upon it in an amount exceeding or likely to exceed $500,000 (or the equivalent in any other currency) unless that person has first given to the Security Trustee and in terms satisfactory to it a written undertaking not to exercise any lien on that Ship or its Earnings for the cost of such work or for any other reason.

14.14 Notice of Mortgage

Each Borrower shall keep the Mortgage relative to its Ship registered against that Ship as a valid first preferred or, as the case may be, priority mortgage, carry on board that Ship a certified copy of that Mortgage and place and maintain in a conspicuous place in the navigation room and the Master's cabin of that Ship a framed printed notice stating that that Ship is mortgaged by that Borrower to the Security Trustee.

14.15 Sharing of Earnings

No Borrower shall enter into any agreement or arrangement for the sharing of any Earnings other than a profit sharing exceeding an agreed charter hire rate under a charter party Provided that it is not a part of any pool arrangement.

14.16 ISPS Code

Each Borrower shall comply with the ISPS Code and in particular, without limitation, shall:

(a) procure that the Ship owned by it and the company responsible for that Ship's compliance with the ISPS Code comply with the ISPS Code; and

(b) maintain for that Ship an ISSC; and

(c) notify the Agent immediately in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the ISSC.

14.17 Charterparty Assignment

If a Borrower enters into an Assignable Charter, it shall, on or prior to the date of such Assignable Charter:

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(a) execute in favour of the Security Trustee a Charterparty Assignment (such Charterparty Assignment to be notified to, acknowledged by, the relevant charterer and any charter guarantor); and

(b) without limiting the generality of the above, if that Assignable Charter is a bareboat charter, procure that the bareboat charterer shall execute in favour of the Security Trustee an assignment of (inter alia) all its rights, title and interest in and to the Insurances in respect of that Ship effected either by the Borrower owning that Ship or by the bareboat charterer and a customary letter of undertaking in favour of the Security Trustee whereby (inter alia) the interests of the bareboat charterer under the bareboat charter are subordinated to the interests of the Security Trustee under the Finance Documents, each in the Agreed Form,

and shall deliver to the Agent such other documents equivalent to those referred to at paragraphs 3, 4, 5,7 and 9 of Schedule 3, Part A as the Agent may require.

15 SECURITY COVER

15.1 Minimum required security cover

Clause 15.2 applies if the Agent notifies the Borrowers that:

(a) the aggregate of the Market Value of the Mortgaged Ships; plus

(b) the net realisable value of any additional security previously provided under this Clause 15; plus

(c) the Liquidity Amount standing to the credit of the Liquidity Account pursuant to Clause 11.17 at the relevant time,

is below an amount equal to 125 per cent. of the Loan.

15.2 Provision of additional security; prepayment

If the Agent serves a notice on the Borrowers under Clause 15.1, the Borrowers shall prepay such part at least of the Loan as will eliminate the shortfall on or before the date falling 14 Business Days after the date on which the Agent's notice is served under Clause 15.1 (the "Prepayment Date") unless at least 1 Business Day before the Prepayment Date the Borrowers have provided, or ensured that a third party has provided, additional security which, in the opinion of the Majority Lenders, has a net realisable value at least equal to the shortfall and is documented in such terms as the Agent may, with the authorisation of the Majority Lenders, approve or require.

15.3 Valuation of Ships

The Market Value of each Mortgaged Ship or any Fleet Vessel at any date is that shown by taking the arithmetic means of two valuations issued by 2 Approved Brokers, one of which is to be selected and appointed by the Agent and the other to be selected by the Borrowers and appointed by the Agent (unless the Borrowers do not select an Approved Broker within 14 days after the Agent's request to receive a valuation of a Mortgaged Ship, in which case the Agent shall select and appoint a second Approved Broker):

(a) each valuation to be addressed to the Agent and prepared:

(i) as at a date not more than 14 days previously;

(ii) with or without physical inspection of the Ship or, as the case may be, Fleet Vessel (as the Agent may require);

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(iii) on the basis of a sale for prompt delivery for cash on normal arm's length commercial terms as between a willing seller and a willing buyer, free of any existing charter or other contract of employment; and

(iv) after deducting the estimated amount of the usual and reasonable expenses which would be incurred in connection with the sale,

Provided that if the difference between the 2 valuations in respect of a Mortgaged Ship or a Fleet Vessel obtained at any one time pursuant to this Clause 15.3 is greater than 15 per cent., a valuation shall be commissioned from a third Approved Broker selected and appointed by the Agent. Such valuation shall be conducted in accordance with this Clause 15.3 and the Market Value of that Mortgaged Ship or Fleet Vessel (as the case may be) in such circumstances shall be the average of all three valuations.

15.4 Value of additional vessel security

The net realisable value of any additional security which is provided under Clause 15.2 and which consists of a Security Interest over a vessel shall be that shown by a valuation complying with the requirements of Clause 15.3.

15.5 Valuations binding

Any valuation under Clause 15.2, 15.3 or 15.4 shall be binding and conclusive as regards the Borrowers, as shall be any valuation which the Majority Lenders make of any additional security which does not consist of or include a Security Interest.

15.6 Provision of information

The Borrowers shall promptly provide the Agent and any Approved Broker or expert acting under Clause 15.3 or 15.4 with any information which the Agent or that Approved Broker or expert may request for the purposes of the valuation; and, if the Borrowers fail to provide the information by the date specified in the request, the valuation may be made on any basis and assumptions which that Approved Broker or the Majority Lenders (or the expert appointed by them) consider prudent.

15.7 Frequency of valuations

The Borrowers acknowledge and agree that the Agent may commission valuation(s) of any Ship at least twice annually and at such other times as the Agent may deem necessary.

15.8 Payment of valuation expenses

Without prejudice to the generality of the Borrowers' obligations under Clauses 20.2, 20.3 and 21.4, the Borrowers shall, on demand, pay the Agent the amount of the fees and expenses of any Approved Broker or expert instructed by the Agent under this Clause and all legal and other expenses incurred by any Creditor Party in connection with any matter arising out of this Clause.

16 PAYMENTS AND CALCULATIONS

16.1 Currency and method of payments

All payments to be made by the Lenders or by any  Borrower under a Finance Document shall be made to the Agent or to the Security Trustee, in the case of an amount payable to it:

(a) by not later than 11.00 a.m. (New York City time) on the due date;

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(b) in same day Dollar funds settled through the New York Clearing House Interbank Payments System (or in such other Dollar funds and/or settled in such other manner as the Agent shall specify as being customary at the time for the settlement of international transactions of the type contemplated by this Agreement);

(c) in the case of an amount payable by a Lender to the Agent or by any Borrower to the Agent or any Lender, to the account of the Agent at JP Morgan Chase Bank, New York (SWIFT Code CHASUS33) (Account No. 001-1-331 808 in favour of HSH Nordbank AG, Hamburg, SWIFT Code HSHNDEHH; Reference " Alcyone International Marine Inc., Neptune International Shipping and Trading S.A. and Paloma Marine S.A.") or to such other account with such other bank as the Agent may from time to time notify to the Borrowers; and

(d) in the case of an amount payable to the Security Trustee, to such account as it may from time to time notify to the Borrowers and the other Creditor Parties.

16.2 Payment on non-Business Day

If any payment by a Borrower under a Finance Document would otherwise fall due on a day which is not a Business Day:

(a) the due date shall be extended to the next succeeding Business Day; or

(b) if the next succeeding Business Day falls in the next calendar month, the due date shall be brought forward to the immediately preceding Business Day,

and interest shall be payable during any extension under paragraph (a) at the rate payable on the original due date.

16.3 Basis for calculation of periodic payments

All interest and commitment fee and any other payments under any Finance Document which are of an annual or periodic nature shall accrue from day to day and shall be calculated on the basis of the actual number of days elapsed and a 360 day year.

16.4 Distribution of payments to Creditor Parties

Subject to Clauses 16.5, 16.6 and 16.7:

(a) any amount received by the Agent under a Finance Document for distribution or remittance to a Lender, the Swap Bank or the Security Trustee shall be made available by the Agent to that Lender, the Swap Bank or, as the case may be, the Security Trustee by payment, with funds having the same value as the funds received, to such account as the Lender, the Swap Bank or the Security Trustee may have notified to the Agent not less than 5 Business Days previously; and

(b) amounts to be applied in satisfying amounts of a particular category which are due to the Lenders and/or the Swap Bank generally shall be distributed by the Agent to each Lender and the Swap Bank pro rata to the amount in that category which is due to it.

16.5 Permitted deductions by Agent

Notwithstanding any other provision of this Agreement or any other Finance Document, the Agent may, before making an amount available to a Lender or the Swap Bank, deduct and withhold from that amount any sum which is then due and payable to the Agent from that Lender or the Swap Bank under any Finance Document or any sum which the Agent is then entitled under any Finance Document to require that Lender or the Swap Bank to pay on demand.

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16.6 Agent only obliged to pay when monies received

Notwithstanding any other provision of this Agreement or any other Finance Document, the Agent shall not be obliged to make available to a Borrower or any Lender or the Swap Bank any sum which the Agent is expecting to receive for remittance or distribution to that Borrower or that Lender or the Swap Bank until the Agent has satisfied itself that it has received that sum.

16.7 Refund to Agent of monies not received

If and to the extent that the Agent makes available a sum to a Borrower or a Lender or the Swap Bank, without first having received that sum, that Borrower or (as the case may be) the Lender or the Swap Bank concerned shall, on demand:

(a) refund the sum in full to the Agent; and

(b) pay to the Agent the amount (as certified by the Agent) which will indemnify the Agent against any funding or other loss, liability or expense incurred by the Agent as a result of making the sum available before receiving it.

16.8 Agent may assume receipt

Clause 16.7 shall not affect any claim which the Agent has under the law of restitution, and applies irrespective of whether the Agent had any form of notice that it had not received the sum which it made available.

16.9 Creditor Party accounts

Each Creditor Party shall maintain accounts showing the amounts owing to it by the Borrowers and each Security Party under the Finance Documents and all payments in respect of those amounts made by the Borrowers and any Security Party.

16.10 Agent's memorandum account

The Agent shall maintain a memorandum account showing the amounts advanced by the Lenders and all other sums owing to the Agent, the Security Trustee and each Lender from the Borrowers and each Security Party under the Finance Documents and all payments in respect of those amounts made by the Borrowers and any Security Party.

16.11 Accounts prima facie evidence

If any accounts maintained under Clauses 16.9 and 16.10 show an amount to be owing by a Borrower or a Security Party to a Creditor Party, those accounts shall be prima facie evidence that that amount is owing to that Creditor Party.

17 APPLICATION OF RECEIPTS

17.1 Normal order of application

Except as any Finance Document may otherwise provide, any sums which are received or recovered by any Creditor Party under or by virtue of any Finance Document shall be applied:

(a) FIRST: in or towards satisfaction of any amounts then due and payable under the Finance Documents in the following order and proportions:

(i) firstly, in or towards satisfaction pro rata of all amounts then due and payable to the Creditor Parties under the Finance Documents other than those amounts referred to

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at paragraphs (ii) and (iii) (including, but without limitation, all amounts payable by a Borrower under Clauses 20, 21 and 22 of this Agreement or by a Borrower or any Security Party under any corresponding or similar provision in any other Finance Document);

(ii) secondly, in or towards satisfaction pro rata of any and all amounts of interest or default interest payable to the Creditor Parties under the Finance Documents (and, for this purpose, the expression "interest" shall include any net amount which a Borrower shall have become liable to pay or deliver under section 2(e) (Obligations) of the Master Agreement but shall have failed to pay or deliver to the Swap Bank at the time of application or distribution under this Clause 17); and

(iii) thirdly, in or towards satisfaction pro rata of the Loan and the Swap Exposure (in the case of the latter, calculated as at the actual Early Termination Date applying to each particular Designated Transaction, or if no such Early Termination Date shall have occurred, calculated as if an Early Termination Date occurred on the date of application or distribution hereunder);

(b) SECONDLY: in retention (in an interest bearing account) of an amount equal to any amount not then due and payable under any Finance Document but which the Agent, by notice to the Borrowers (or any of them), the Security Parties and the other Creditor Parties, states in its opinion will either or may become due and payable in the future and, upon those amounts becoming due and payable, in or towards satisfaction of them in accordance with the provisions of Clause 17.1(a); and

(c) THIRDLY: any surplus shall be paid to the Borrowers or to any other person appearing to be entitled to it.

17.2 Variation of order of application

The Agent may, with the authorisation of the Majority Lenders and the Swap Bank, by notice to the Borrowers, the Security Parties and the other Creditor Parties provide for a different manner of application from that set out in Clause 17.1 either as regards a specified sum or sums or as regards sums in a specified category or categories.

17.3 Notice of variation of order of application

The Agent may give notices under Clause 17.2 from time to time; and such a notice may be stated to apply not only to sums which may be received or recovered in the future, but also to any sum which has been received or recovered on or after the third Business Day before the date on which the notice is served.

17.4 Appropriation rights overridden

This Clause 17 and any notice which the Agent gives under Clause 17.2 shall override any right of appropriation possessed, and any appropriation made, by a Borrower or any Security Party.

18 APPLICATION OF EARNINGS; SWAP PAYMENTS

18.1 Payment of Earnings and swap payments

Each Borrower undertakes with each Creditor Party to ensure that, throughout the Security Period:

(a) it shall maintain the Accounts with the Agents;

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(b) (and subject only to the provisions of the General Assignment to which it is a party) all Earnings of the Ship owned by it are paid to the Earnings Account for that Ship;

(c) the Liquidity Amount required to be maintained pursuant to Clause 11.17 shall be maintained in the Liquidity Account;

(d) all payments by the Swap Bank to the Borrowers under each Designated Transaction are paid to the Swap Account and at least 1 day prior to any payment required to be made under a Designated Transaction, ensure there are sufficient funds in the Swap Account in order to be able to effect such payment; and

(e) no sum may be withdrawn from the Swap Account (other than by the Agent for the purposes of Clause 18.3), without the prior written consent of the Agent.

18.2 Monthly retentions

The Borrowers undertake with each Creditor Party to ensure that, in each calendar month of the Security Period commencing on the date falling one month after the Drawdown Date of each Tranche and on the same day in each subsequent month, there is transferred in respect of that Tranche to the Retention Account (in respect of sub- clauses (a) and (b)) out of the Earnings received in the relevant Earnings Account during the preceding calendar month:

(a) one-third of the amount of the Instalment falling due in respect of that Tranche under Clause 8.1 on the next Repayment Date; and

(b) the relevant fraction of the aggregate amount of interest on that Tranche which is payable on the next due date for payment of interest under this Agreement;

and the Borrowers irrevocably authorise the Agent to make those transfers.

The "relevant fraction", in relation to paragraph (b), is a fraction of which the numerator is 1 and the denominator the number of months comprised in the then current Interest Period (or, if the period is shorter, the number of months from the later of the commencement of the current Interest Period in respect of that Tranche or the last due date for payment of interest to the next due date for payment of interest in respect of that Tranche under this Agreement).

18.3 Shortfall in Earnings

If the aggregate Earnings received in the Earnings Accounts are insufficient in any month for the required amount to be transferred to the Retention Account and/or the Swap Account (as the case may be) under Clause 18.2, the Borrowers immediately make up the amount of the insufficiency into the Retention Account or the Swap Account (as the case may be).

18.4 Application of retentions

(a) Until an Event of Default or a Potential Event of Default occurs, the Agent shall on each Repayment Date and on each due date for the payment of interest under this Agreement distribute to the Lenders in accordance with Clause 16.4 so much of the then balance on the Retention Account as equals:

(i) the Instalment due on that Repayment Date pursuant to Clause 8.1; or

(ii) the amount of interest in respect of the Loan payable on that interest payment date,

in discharge of the Borrowers' liability for that Instalment or that interest; and

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(b) on each due date for payment under the Master Agreement, transfer to the Swap Bank in accordance with Clause 16.4 so much of the then balance on the Swap Account as equals the net amount which is payable by the Borrowers to the Swap Bank in respect of any Designated Transaction in discharge of the Borrowers' liability for that amount.

18.5 Interest accrued on Accounts

Any credit balance on the Accounts shall bear interest at the rate from time to time offered by the Agent to its customers for Dollar deposits of similar amounts and for periods similar to those for which such balances appear to the Agent likely to remain on such Account.

18.6 Release of accrued interest

Interest accruing on each Account under Clause 18.5 shall be released to the Borrowers on each Repayment Date unless an Event of Default or a Potential Event of Default has occurred or, in the case of the Retention Account and the Swap Account, the then credit balance thereon is less than what would have been the balance had the full amount required by Clause 18.1 and 18.2 (and Clause 18.3, if applicable) been transferred in that and each previous month.

18.7 Withdrawals from Accounts

Each Borrower shall, in any calendar month, after having transferred all amounts due or which will become due to the Retention Account and the Swap Account in such calendar month in accordance with Clause 18.2, be entitled to withdraw any balance standing to the credit of the Earnings Account maintained by it Provided that no Event of Default or Potential Event of Default has occurred which is continuing at that time or will result from such withdrawal.

18.8 Location of Accounts

Each Borrower shall promptly:

(a) comply with any requirement of the Agent as to the location or re-location of the Accounts (or any of them); and

(b) execute any documents which the Agent specifies to create or maintain in favour of the Security Trustee a Security Interest over (and/or rights of set-off, consolidation or other rights in relation to) the Accounts (or any of them).

18.9 Debits for fees, expenses etc.

The Agent shall be entitled (but not obliged) from time to time to debit any Account without prior notice in order to discharge any amount due and payable under Clauses 20 or 21 to a Creditor Party or payment of which any Creditor Party has become entitled to demand under Clauses 20 or 21.

18.10 Borrowers' obligations unaffected

The provisions of this Clause 18 (as distinct from a distribution effected under Clause 18.4) do not affect:

(a) the liability of the Borrowers to make payments of principal and interest on the due dates; or

(b) any other liability or obligation of the Borrowers or any Security Party under any Finance Document.

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18.11 Restriction on withdrawal

During the Security Period no sum may be withdrawn from the Liquidity Account, the Retention Account or the Swap Account (other than by the Agent for application in accordance with Clause 18.4), without the prior written consent of the Agent.

19 EVENTS OF DEFAULT

19.1 Events of Default

An Event of Default occurs if:

(a) any Borrower or any Security Party fails to pay within 3 Business Days after the applicable due date or (if so payable) on demand, within 3 Business Days after the making of such demand, any sum payable under a Finance Document or under any document relating to a Finance Document; or

(b) any breach occurs of Clause 9.2, 11.2, 11.3, 11.16, 11.17, 11.18, 11.19, 11.20, 12.2, 12.3, 13.2, 14.2, 15.2, 18.1 or 18.2; or

(c) any breach by any Borrower or any Security Party occurs of any provision of a Finance Document (other than a breach covered by paragraphs (a) or (b)) which, in the opinion of the Majority Lenders, is capable of remedy, and such default continues unremedied 15 Business Days after written notice from the Agent requesting action to remedy the same; or

(d) (subject to any applicable grace period specified in the Finance Document) any breach by any Borrower or any Security Party occurs of any provision of a Finance Document (other than a breach falling within paragraphs (a), (b) or (c)); or

(e) any representation, warranty or statement made by, or by an officer of, a Borrower or a Security Party in a Finance Document or in a Drawdown Notice or any other notice or document relating to a Finance Document is untrue or misleading when it is made or repeated ; or

(f) any of the following occurs in relation to any Financial Indebtedness of a Relevant Person:

(i) any Financial Indebtedness of a Relevant Person is not paid when due or, if so payable, on demand; or

(ii) any Financial Indebtedness of a Relevant Person becomes due and payable or capable of being declared due and payable prior to its stated maturity date as a consequence of any event of default; or

(iii) a lease, hire purchase agreement or charter creating any Financial Indebtedness of a Relevant Person is terminated by the lessor or owner or becomes capable of being terminated as a consequence of any termination event; or

(iv) any overdraft, loan, note issuance, acceptance credit, letter of credit, guarantee, foreign exchange or other facility, or any swap or other derivative contract or transaction, relating to any Financial Indebtedness of a Relevant Person ceases to be available or becomes capable of being terminated as a result of any event of default, or cash cover is required, or becomes capable of being required, in respect of such a facility as a result of any event of default; or

(v) any Security Interest securing any Financial Indebtedness of a Relevant Person becomes enforceable; or

(g) any of the following occurs in relation to a Relevant Person:

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(i) a Relevant Person becomes unable to pay its debts as they fall due; or

(ii) any assets of a Relevant Person are subject to any form of execution, attachment, arrest, sequestration or distress or any form of freezing order; or

(iii) any administrative or other receiver is appointed over any asset of a Relevant Person; or

(iv) an administrator is appointed (whether by the court or otherwise) in respect of a Relevant Person; or

(v) any formal declaration of bankruptcy or any formal statement to the effect that a Relevant Person is insolvent or likely to become insolvent is made by a Relevant Person or by the directors of a Relevant Person or, in any proceedings, by a lawyer acting for a Relevant Person; or

(vi) a provisional liquidator is appointed in respect of a Relevant Person, a winding up order is made in relation to a Relevant Person or a winding up resolution is passed by a Relevant Person; or

(vii) a resolution is passed, an administration notice is given or filed, an application or petition to a court is made or presented or any other step is taken by (aa) a Relevant Person, (bb) the members or directors of a Relevant Person, (cc) a holder of Security Interests which together relate to all or substantially all of the assets of a Relevant Person, or (dd) a government minister or public or regulatory authority of a Pertinent Jurisdiction for or with a view to the winding up of that or another Relevant Person or the appointment of a provisional liquidator or administrator in respect of that or another Relevant Person, or that or another Relevant Person ceasing or suspending business operations or payments to creditors, save that this paragraph does not apply to a fully solvent winding up of a Relevant Person other than a Borrower or the Corporate Guarantor which is, or is to be, effected for the purposes of an amalgamation or reconstruction previously approved by the Majority Lenders and effected not later than 3 months after the commencement of the winding up; or

(viii) an administration notice is given or filed, an application or petition to a court is made or presented or any other step is taken by a creditor of a Relevant Person (other than a holder of Security Interests which together relate to all or substantially all of the assets of a Relevant Person) for the winding up of a Relevant Person or the appointment of a provisional liquidator or administrator in respect of a Relevant Person in any Pertinent Jurisdiction, unless the proposed winding up, appointment of a provisional liquidator or administration is being contested in good faith, on substantial grounds and not with a view to some other insolvency law procedure being implemented instead and either (aa) the application or petition is dismissed or withdrawn within 30 days of being made or presented, or (bb) within 30 days of the administration notice being given or filed, or the other relevant steps being taken, other action is taken which will ensure that there will be no administration and (in both cases (aa) or (bb)) the Relevant Person will continue to carry on business in the ordinary way and without being the subject of any actual, interim or pending insolvency law procedure; or

(ix) a Relevant Person or its directors take any steps (whether by making or presenting an application or petition to a court, or submitting or presenting a document setting out a proposal or proposed terms, or otherwise) with a view to obtaining, in relation to that or another Relevant Person, any form of moratorium, suspension or deferral of payments, reorganisation of debt (or certain debt) or arrangement with all or a substantial proportion (by number or value) of creditors or of any class of them or any such moratorium, suspension or deferral of payments, reorganisation or

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arrangement is effected by court order, by the filing of documents with a court, by means of a contract or in any other way at all; or

(x) any meeting of the members or directors, or of any committee of the board or senior management, of a Relevant Person is held or summoned for the purpose of considering a resolution or proposal to authorise or take any action of a type described in paragraphs (iv) to (ix) or a step preparatory to such action, or (with or without such a meeting) the members, directors or such a committee resolve or agree that such an action or step should be taken or should be taken if certain conditions materialise or fail to materialise; or

(xi) in a country other than England, any event occurs, any proceedings are opened or commenced or any step is taken which, in the opinion of the Majority Lenders is similar to any of the foregoing; or

(h) any Borrower or any Security Party ceases or suspends carrying on its business or a part of its business which, in the opinion of the Majority Lenders, is material in the context of this Agreement; or

(i) it becomes unlawful in any Pertinent Jurisdiction or impossible:

(i) for any Borrower, the Corporate Guarantor or any other Security Party to discharge any liability under a Finance Document or to comply with any other obligation which the Majority Lenders consider material under a Finance Document; or

(ii) for the Agent, the Security Trustee, the Lenders or the Swap Bank to exercise or enforce any right under, or to enforce any Security Interest created by, a Finance Document; or

(j) any official consent necessary to enable a Borrower to own, operate or charter its Ship or to enable a Borrower or any Security Party to comply with any provision which the Majority Lenders consider material of a Finance Document or any Assignable Charter is not granted, expires without being renewed, is revoked or becomes liable to revocation or any condition of such a consent is not fulfilled; or

(k) it appears to the Majority Lenders that, without their prior consent, a change has occurred or probably has occurred after the date of this Agreement in the legal and beneficial ownership of any of the shares in a Borrower or in the control of the voting rights attaching to any of those shares; or

(l) any provision which the Majority Lenders consider material of a Finance Document proves to have been or becomes invalid or unenforceable, or a Security Interest created by a Finance Document proves to have been or becomes invalid or unenforceable or such a Security Interest proves to have ranked after, or loses its priority to, another Security Interest or any other third party claim or interest; or

(m) the security constituted by a Finance Document is in any way imperilled or in jeopardy; or

(n) any of the following occurs in relation to the Master Agreement:

(i) notice of an Early Termination Date is given by the Lender under Section 6(a) of the Master Agreement; or

(ii) a person entitled to do so gives notice of Early Termination Date under Section (b) of the Master Agreement; or

(iii) an Event of Default (as defined in Section 14 of the Master Agreement) occurs; or

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(iv) the Master Agreement is terminated, cancelled, suspended, rescinded or revoked or otherwise ceases to remain in full force and effect for any reason except with the consent of the Lender; or

(o) any other event occurs or any other circumstances arise or develop including, without limitation:

(i) a change in the financial position, state of affairs or prospects of any Borrower, the Corporate Guarantor, any other Security Party or the Group; or

(ii) any accident or other event involving a Ship or another vessel owned, chartered or operated by a Relevant Person; or

(iii) the threat or commencement of legal or administrative action involving any Borrower, any Ship, the Approved Manager or any Security Party,

which constitutes a Material Adverse Change.

19.2 Actions following an Event of Default.  On, or at any time after, the occurrence of an Event of Default:

(a) the Agent may, and if so instructed by the Majority Lenders, the Agent shall:

(i) serve on the Borrowers a notice stating that the Commitments and all other obligations of each Lender to the Borrowers under this Agreement are cancelled; and/or

(ii) serve on the Borrowers a notice stating that the Loan or any part thereof, all or any accrued interest and all or any other amounts accrued or owing under this Agreement are immediately due and payable or are due and payable on demand; and/or

(iii) take any other action which, as a result of the Event of Default or any notice served under paragraph (i) or (ii), the Agent and/or the Lenders are entitled to take under any Finance Document or any applicable law; and/or

(b) the Security Trustee may, and if so instructed by the Agent, acting with the authorisation of the Majority Lenders, the Security Trustee shall take any action which, as a result of the Event of Default or any notice served under paragraph (a)(i) or (a)(ii), the Security Trustee, the Agent, the Mandated Lead Arranger and/or the Lenders and/or the Swap Bank are entitled to take under any Finance Document or any applicable law.

19.3 Termination of Commitments

On the service of a notice under Clause 19.2(a)(i), the Commitments and all other obligations of each Lender to the Borrowers under this Agreement shall be cancelled.

19.4 Acceleration of Loan

On the service of a notice under Clause 19.2(a)(ii), the Loan (or any part thereof), all accrued interest and all or any other amounts accrued or owing from the Borrowers (or any of them) or any Security Party under this Agreement and every other Finance Document shall become immediately due and payable or, as the case may be, payable on demand.

19.5 Multiple notices; action without notice

The Agent may serve notices under Clauses 19.2(a)(i) or 19.2(a)(ii) simultaneously or on different dates and it and/or the Security Trustee may take any action referred to in Clause

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19.2 if no such notice is served or simultaneously with or at any time after the service of both or either of such notices.

19.6 Notification of Creditor Parties and Security Parties

The Agent shall send to each Lender, the Swap Bank, the Security Trustee and each Security Party a copy or the text of any notice which the Agent serves on the Borrowers under Clause 19.2; but the notice shall become effective when it is served on the Borrowers, and no failure or delay by the Agent to send a copy or the text of the notice to any other person shall invalidate the notice or provide any Borrower or any Security Party with any form of claim or defence.

19.7 Creditor Party's rights unimpaired

Nothing in this Clause shall be taken to impair or restrict the exercise of any right given to individual Lenders or the Swap Bank under a Finance Document or the general law; and, in particular, this Clause is without prejudice to Clause 3.1.

19.8 Exclusion of Creditor Party liability

No Creditor Party, and no receiver or manager appointed by the Security Trustee, shall have any liability to a Borrower or a Security Party:

(a) for any loss caused by an exercise of rights under, or enforcement of a Security Interest created by, a Finance Document or by any failure or delay to exercise such a right or to enforce such a Security Interest; or

(b) as mortgagee in possession or otherwise, for any income or principal amount which might have been produced by or realised from any asset comprised in such a Security Interest or for any reduction (however caused) in the value of such an asset,

except that this does not exempt a Creditor Party or a receiver or manager from liability for losses shown to have been directly and mainly caused by the dishonesty or the wilful misconduct of such Creditor Party's own officers and employees or (as the case may be) such receiver's or manager's own partners or employees.

19.9 Relevant Persons

In this Clause 19, a "Relevant Person" means a Borrower, the Corporate Guarantor, any other Security Party and any other member of the Group.

19.10 Interpretation

In Clause 19.1(f) references to an event of default or a termination event include any event, howsoever described, which is similar to an event of default in a facility agreement or a termination event in a finance lease; and in Clause 19.1(g) "petition" includes an application.

19.11 Position of Swap Bank

Neither the Agent nor the Security Trustee shall be obliged, in connection with any action taken or proposed to be taken under or pursuant to the foregoing provisions of this Clause 19, to have any regard to the requirements of the Swap Bank except to the extent that the Swap Bank is also a Lender.

20 FEES AND EXPENSES

20.1 Arrangement, structuring and commitment fees

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The Borrowers shall pay to the Agent:

(a) on the date of this Agreement a non-refundable arrangement fee in the amount equal to $235,000 (representing 0.50 per cent. of the Total Commitments) for distribution among the Lenders pro rata to their Commitments;

(b) a non-refundable structuring fee in the amount of $235,000 (representing 0.50 per cent. of the Total Commitments) to be paid on or prior to the first Drawdown Date to occur under this Agreement for the Agent's own account;

(c) a non-refundable commitment fee, payable quarterly in arrears at the rate of 1 per cent. per annum on the undrawn or un-cancelled amount of Tranche A, for distribution among the Lenders pro rata to their Commitments, during the period from (and including) 13 December 2013 (being the date of the Borrowers' acceptance of the Agent's firm offer letter regarding the Loan, the "Acceptance Date") to the earlier of (i) the Drawdown Date in respect of Tranche A and (ii) the last day of the Availability Period in respect of Tranche A (and on the last day of such period); and

(d) a non-refundable commitment fee, at the rate of 1 per cent. per annum on the undrawn or uncancelled amount of Tranche B, payable quarterly in arrears for distribution among the Lenders pro rata to their Commitments, during the period from (and including) the Acceptance Date to the earlier of (i) the Drawdown Date in respect of Tranche B and (ii) the last day of the Availability Period in respect of Tranche B (and on the last day of such period).

20.2 Costs of negotiation, preparation etc.

The Borrowers shall pay to the Agent on its demand the amount of all expenses incurred by the Agent or the Security Trustee in connection with the negotiation, preparation, execution or registration of any Finance Document or any related document or with any transaction contemplated by a Finance Document or a related document.

20.3 Costs of variations, amendments, enforcement etc.

The Borrowers shall pay to the Agent, on the Agent's demand, for the account of the Creditor Party concerned, the amount of all expenses incurred by a Creditor Party in connection with:

(a) any amendment or supplement (or any proposal for such an amendment or supplement) requested (or, in the case of a proposal, made) by or on behalf of the Borrowers and relating to a Finance Document or any other Pertinent Document;

(b) any consent, waiver or suspension of rights by the Lenders, the Swap Bank, the Majority Lenders or the Creditor Party concerned or any proposal for any of the foregoing requested (or, in the case of a proposal, made) by or on behalf of the Borrowers under or in connection with a Finance Document or any other Pertinent Document;

(c) the valuation of any security provided or offered under and pursuant to Clause 15 or any other matter relating to such security; or

(d) any step taken by the Lender concerned or the Swap Bank with a view to the preservation, protection, exercise or enforcement of any rights or Security Interest created by a Finance Document or for any similar purpose including, without limitation, any proceedings to recover or retain proceeds of enforcement or any other proceedings following enforcement proceedings until the date all outstanding indebtedness to the Creditor Parties under the Finance Documents, the Master Agreement and any other Pertinent Document is repaid in full.

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There shall be recoverable under paragraph (d) the full amount of all legal expenses, whether or not such as would be allowed under rules of court or any taxation or other procedure carried out under such rules.

20.4 Documentary taxes

The Borrowers shall promptly pay any tax payable on or by reference to any Finance Document, and shall, on the Agent's demand, fully indemnify each Creditor Party against any claims, expenses, liabilities and losses resulting from any failure or delay by the Borrowers to pay such a tax.

20.5 Certification of amounts

A notice which is signed by 2 officers of a Creditor Party, which states that a specified amount, or aggregate amount, is due to that Creditor Party under this Clause 20 and which indicates (without necessarily specifying a detailed breakdown) the matters in respect of which the amount, or aggregate amount, is due shall be prima facie evidence that the amount, or aggregate amount, is due.

21 INDEMNITIES

21.1 Indemnities regarding borrowing and repayment of Loan

The Borrowers shall fully indemnify the Agent and each Lender on the Agent's demand and the Security Trustee on its demand in respect of all claims, expenses, liabilities and losses which are made or brought against or incurred by that Creditor Party, or which that Creditor Party reasonably and with due diligence estimates that it will incur, as a result of or in connection with:

(a) a Tranche not being borrowed on the date specified in the relevant Drawdown Notice for any reason other than a default by the Lender claiming the indemnity after the relevant Drawdown Notice has been served in accordance with the provisions of this Agreement;

(b) the receipt or recovery of all or any part of the Loan or an overdue sum otherwise than on the last day of an Interest Period or other relevant period;

(c) any failure (for whatever reason) by the Borrowers (or any of them) to make payment of any amount due under a Finance Document on the due date or, if so payable, on demand (after giving credit for any default interest paid by the Borrowers on the amount concerned under Clause 7); and

(d) the occurrence and/or continuance of an Event of Default or a Potential Event of Default and/or the acceleration of repayment of the Loan under Clause 19,

and in respect of any tax (other than tax on its overall net income) for which a Creditor Party is liable in connection with any amount paid or payable to that Creditor Party (whether for its own account or otherwise) under any Finance Document.

21.2 Break Costs

If a Lender (the "Notifying Lender") notifies the Agent that as a consequence of receipt or recovery of all or any part of the Loan (a "Payment") on a day other than the last day of an Interest Period applicable to the sum received or recovered the Notifying Lender has or will, with effect from a specified date, incur Break Costs:

(a) the Agent shall promptly notify the Borrowers of a notice it receives from a Notifying Lender under this Clause 21.2;

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(b) the Borrowers shall, within 5 Business Days of the Agent's demand, pay to the Agent for the account of the Notifying Lender the amount of such Break Costs; and

(c) the Notifying Lender shall, as soon as reasonably practicable, following a request by the Borrowers, provide a certificate confirming the amount of the Notifying Lender's Break Costs for the Interest Period in which they accrue, such certificate to be, in the absence of manifest error, conclusive and binding on the Borrowers.

In this Clause 21.2, "Break Costs" means, in relation to a Payment the amount (if any) by which:

(i) the interest which the Notifying Lender, should have received in respect of the sum received or recovered from the date of receipt or recovery of such Payment to the last day of the then current Interest Period applicable to the sum received or recovered had such Payment been made on the last day of such Interest Period;

exceeds

(ii) the amount which the Notifying Lender, would be able to obtain by placing an amount equal to such Payment on deposit with a leading bank in the London Interbank Market for a period commencing on the Business Day following receipt or recovery of such Payment (as the case may be) and ending on the last day of the then current Interest Period applicable to the sum received or recovered.

21.3 Other breakage costs

Without limiting its generality, Clause 21.1 covers any claim, expense, liability or loss, including (without limitation) a loss of a prospective profit, incurred by a Lender in borrowing, liquidating or re-employing deposits from third parties acquired, contracted for or arranged to fund, effect or maintain all or any part of its Contribution and/or any overdue amount (or an aggregate amount which includes its Contribution or any overdue amount) other than claims, expenses, liabilities and losses which are shown to have been directly and mainly caused by the gross negligence or wilful misconduct of the officers or employees of the Creditor Party concerned.

21.4 Miscellaneous indemnities

The Borrowers shall fully indemnify each Creditor Party severally on their respective demands, without prejudice to any of their other rights under any of the Finance Documents, in respect of all claims, expenses, liabilities and losses which may be made or brought against or sustained or incurred by a Creditor Party, in any country, as a result of or in connection with:

(a) any action taken, or omitted or neglected to be taken, under or in connection with any Finance Document by the Agent, the Security Trustee or any other Creditor Party or by any receiver appointed under a Finance Document;

(b) investigating any event which the Creditor Party concerned reasonably believes constitutes an Event of Default or Potential Event of Default;

(c) acting or relying on any notice, request or instruction which the Creditor Party concerned reasonably believes to be genuine, correct and appropriately authorised; or

(d) any other Pertinent Matter,

other than claims, expenses, liabilities and losses which are shown to have been directly and mainly caused by the dishonesty, gross negligence or wilful misconduct of the officers or employees of the Creditor Party concerned.

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Without prejudice to its generality, Clause 21.1 and this Clause 21.4 cover any claims, expenses, liabilities and losses which arise, or are asserted, under or in connection with any law relating to safety at sea, the ISM Code, the ISPS Code or any Environmental Law.

21.5 Environmental Indemnity

Without prejudice to its generality, Clause 21.4 covers any claims, demands, proceedings, liabilities, taxes, losses or expenses of every kind which arise, or are asserted, under or in connection with any law relating to safety at sea, pollution or the protection of the environment, the ISM Code or the ISPS Code.

21.6 Currency indemnity

If any sum due from a Borrower or any Security Party to a Creditor Party under a Finance Document or under any order, award or judgment relating to a Finance Document (a "Sum") has to be converted from the currency in which the Finance Document provided for the Sum to be paid (the "Contractual Currency") into another currency (the "Payment Currency") for the purpose of:

(a) making, filing or lodging any claim or proof against a Borrower or any Security Party, whether in its liquidation, any arrangement involving it or otherwise; or

(b) obtaining an order, judgment or award from any court or other tribunal in relation to any litigation or arbitration proceedings; or

(c) enforcing any such order, judgment or award,

the Borrowers shall as an independent obligation, within 3 Business Days of demand, indemnify the Creditor Party to whom that Sum is due against any cost, loss or liability arising when the payment actually received by that Creditor Party is converted at the available rate of exchange back into the Contractual Currency including any discrepancy between (A) the rate of exchange actually used to convert the Sum from the Payment Currency into the Contractual Currency and (B) the available rate of exchange.

In this Clause 21.6, the "available rate of exchange" means the rate at which the Creditor Party concerned is able at the opening of business (London time) on the Business Day after it receives the Sum to purchase the Contractual Currency with the Payment Currency.

Each Borrower waives any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency other than that in which it is expressed to be payable.

If any Creditor Party receives any Sum in a currency other than the Contractual Currency, the Borrowers shall indemnify in full the Creditor Party concerned against any cost, loss or liability arising directly or indirectly from any conversion of such Sum to the Contractual Currency.

This Clause 21.6 creates a separate liability of each Borrower which is distinct from its other liabilities under the Finance Documents and which shall not be merged in any judgment or order relating to those other liabilities.

21.7 Application to Master Agreement

For the avoidance of doubt, Clause 21.6 does not apply in respect of sums due from the Borrowers to the Swap Bank under or in connection with the Master Agreement as to which sums the provisions of section 8 (Contractual Currency) of the Master Agreement shall apply.

21.8 Certification of amounts

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A notice which is signed by 2 officers of a Creditor Party, which states that a specified amount, or aggregate amount, is due to that Creditor Party under this Clause 21 and which indicates (without necessarily specifying a detailed breakdown) the matters in respect of which the amount, or aggregate amount, is due shall be prima facie evidence that the amount, or aggregate amount, is due.

21.9 Sums deemed due to a Lender

For the purposes of this Clause 21, a sum payable by the Borrowers to the Agent or the Security Trustee for distribution to a Lender shall be treated as a sum due to that Lender.

22 NO SET-OFF OR TAX DEDUCTION

22.1 No deductions

All amounts due from the Borrowers under a Finance Document shall be paid:

(a) without any form of set‑off, counter-claim or condition; and

(b) free and clear of any tax deduction except a tax deduction which a Borrower is required by law to make.

22.2 Grossing-up for taxes

If, at any time, a Borrower is required by law, regulation or regulatory requirement to make a tax deduction from any payment due under a Finance Document:

(a) that Borrower shall notify the Agent as soon as it becomes aware of the requirement;

(b) the amount due in respect of the payment shall be increased by the amount necessary to ensure that, after the making of such tax deduction, each Creditor Party receives on the due date for such payment (and retains free from any liability relating to the tax deduction) a net amount which is equal to the full amount which it would have received had no such tax deduction been required to be made; and

(c) that Borrower shall pay the full amount of the tax required to be deducted to the appropriate taxation authority promptly in accordance with the relevant law, regulation or regulatory requirement, and in any event before any fine or penalty arises.

22.3 Indemnity and evidence of payment of taxes

The Borrowers shall fully indemnify each Creditor Party on the Agent's demand in respect of all claims, expenses, liabilities and losses incurred by any Creditor Party by reason of any failure of the Borrowers (or any of them) to make any tax deduction or by reason of any increased payment not being made on the due date for such payment in accordance with Clause 22.2.  Within 30 days after making any tax deduction, the Borrowers or, as the case may be, the relevant Borrower shall deliver to the Agent any receipts, certificates or other documentary evidence satisfactory to the Agent that the tax had been paid to the appropriate taxation authority.

22.4 Exclusion of tax on overall net income

In this Clause 22 "tax deduction" means any deduction or withholding from any payment due under a Finance Document for or on account of any present or future tax except tax on a Creditor Party's overall net income.

22.5 Application to Master Agreement

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For the avoidance of doubt, Clause 22 does not apply in respect of sums due from the Borrowers to the Swap Bank under or in connection with the Master Agreement as to which sums the provisions of section 2(d) (Deduction or Withholding for Tax) of the Master Agreement shall apply.

23 ILLEGALITY, ETC.

23.1 Illegality

This Clause 23 applies if a Lender (the "Notifying Lender") notifies the Agent that it has become, or will with effect from a specified date, become:

(a) unlawful or prohibited as a result of the introduction of a new law, an amendment to an existing law or a change in the manner in which an existing law is or will be interpreted or applied; or

(b) contrary to, or inconsistent with, any regulation,

for the Notifying Lender to perform, maintain or give effect to any of its obligations under this Agreement in the manner contemplated by this Agreement or to fund or maintain the Loan.

23.2 Notification of illegality

The Agent shall promptly notify the Borrowers, the Security Parties, the Security Trustee and the other Lenders of the notice under Clause 23.1 which the Agent receives from the Notifying Lender.

23.3 Prepayment; termination of Commitment

On the Agent notifying the Borrowers under Clause 23.2, the Notifying Lender's Commitment shall be immediately cancelled; and thereupon or, if later, on the date specified in the Notifying Lender's notice under Clause 23.1 as the date on which the notified event would become effective the Borrowers shall prepay the Notifying Lender's Contribution on the last day of the then current Interest Period in accordance with Clauses 8.10 and 8.11.

24 INCREASED COSTS

24.1 Increased costs

This Clause 24 applies if a Lender (the "Notifying Lender") notifies the Agent that the Notifying Lender considers that as a result of:

(a) the introduction or alteration after the date of this Agreement of a law or an alteration after the date of this Agreement in the manner in which a law is interpreted or applied (disregarding any effect which relates to the application to payments under this Agreement of a tax on the Lender's overall net income); or

(b) complying with any regulation (including any which relates to capital adequacy or liquidity controls or which affects the manner in which the Notifying Lender allocates capital resources to its obligations under this Agreement) which is introduced, or altered, or the interpretation or application of which is altered, after the date of this Agreement; or

(c) the implementation or application of or compliance with the "International Convergence of Capital Measurement and Capital Standards, a Revised Framework" published by the Basel Committee on Banking Supervision in June 2004 in the form existing on the date of this Agreement (the "Basel II Accord") or any other  law or regulation implementing the Basel II

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Accord or any of the approaches provided for and allowed to be used by banks under or in connection with the Basel II Accord, in each case when compared to the cost of complying with such regulations as determined by the Agent (or parent company of it) on the date of this Agreement (whether such implementation, application or compliance is by a government, regulator, supervisory authority, the Notifying Lender or its holding company); or

(d) the implementation or application of or compliance with Basel III or any law or regulation which implements or applies Basel III (regardless of the date on which it is enacted, adopted or issued and regardless of whether any such implementation, application or compliance is by a government, regulator, the Notifying Lender or any of its affiliates) is that the Notifying Lender (or a parent company of it),

the Notifying Lender (or a parent company of it) has incurred or will incur an "increased cost".

24.2 Meaning of "increased cost"

In this Clause 24, "increased cost" means, in relation to a Notifying Lender:

(a) an additional or increased cost incurred as a result of, or in connection with, the Notifying Lender having entered into, or being a party to, this Agreement or a Transfer Certificate, of funding or maintaining its Commitment or Contribution or performing its obligations under this Agreement, or of having outstanding all or any part of its Contribution or other unpaid sums;

(b) a reduction in the amount of any payment to the Notifying Lender under this Agreement or in the effective return which such a payment represents to the Notifying Lender or on its capital;

(c) an additional or increased cost of funding all or maintaining all or any of the advances comprised in a class of advances formed by or including the Notifying Lender's Contribution or (as the case may require) the proportion of that cost attributable to the Contribution; or

(d) a liability to make a payment, or a return foregone, which is calculated by reference to any amounts received or receivable by the Notifying Lender under this Agreement,

but not an item attributable to a change in the rate of tax on the overall net income of the Notifying Lender (or a parent company of it) or an item covered by the indemnity for tax in Clause 21.1 or by Clause 22.

For the purposes of this Clause 24.2 the Notifying Lender may in good faith allocate or spread costs and/or losses among its assets and liabilities (or any class of its assets and liabilities) on such basis as it considers appropriate.

24.3 Notification to Borrowers of claim for increased costs

The Agent shall promptly notify the Borrowers and the Security Parties of the notice which the Agent received from the Notifying Lender under Clause 24.1.

24.4 Payment of increased costs

The Borrowers shall pay to the Agent, not later than 5 days after the Agent's demand, for the account of the Notifying Lender the amounts which the Agent from time to time notifies the Borrowers that the Notifying Lender has specified to be necessary to compensate the Notifying Lender for the increased cost.

24.5 Notice of prepayment

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If the Borrowers are not willing to continue to compensate the Notifying Lender for the increased cost under Clause 24.4, the Borrowers may give the Agent not less than 14 days' notice of their intention to prepay the Notifying Lender's Contribution at the end of an Interest Period.

24.6 Prepayment; termination of Commitment

A notice under Clause 24.5 shall be irrevocable; the Agent shall promptly notify the Notifying Lender of the Borrowers' notice of intended prepayment; and:

(a) on the date on which the Agent serves that notice, the Commitment of the Notifying Lender shall be cancelled; and

(b) on the date specified in its notice of intended prepayment, the Borrowers shall prepay (without premium or penalty) the Notifying Lender's Contribution, together with accrued interest thereon at the applicable rate plus the Margin and the Mandatory Cost (if any).

24.7 Application of prepayment

Clauses 8.10 and 8.11(a) shall apply in relation to the prepayment.

25 SET-OFF

25.1 Application of credit balances

Each Creditor Party may without prior notice:

(a) apply any balance (whether or not then due) which at any time stands to the credit of any account in the name of a Borrower at any office in any country of that Creditor Party in or towards satisfaction of any sum then due from that Borrower to that Creditor Party under any of the Finance Documents; and

(b) for that purpose:

(i) break, or alter the maturity of, all or any part of a deposit of that Borrower;

(ii) convert or translate all or any part of a deposit or other credit balance into Dollars; and

(iii) enter into any other transaction or make any entry with regard to the credit balance which the Creditor Party concerned considers appropriate.

25.2 Existing rights unaffected

No Creditor Party shall be obliged to exercise any of its rights under Clause 25.1; and those rights shall be without prejudice and in addition to any right of set-off, combination of accounts, charge, lien or other right or remedy to which a Creditor Party is entitled (whether under the general law or any document).

25.3 Sums deemed due to a Lender

For the purposes of this Clause 25, a sum payable by the Borrowers to the Agent or the Security Trustee for distribution to, or for the account of, a Lender shall be treated as a sum due to that Lender; and each Lender's proportion of a sum so payable for distribution to, or for the account of, the Lenders shall be treated as a sum due to such Lender.

25.4 No Security Interest

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This Clause 25 gives the Creditor Parties a contractual right of set-off only, and does not create any equitable charge or other Security Interest over any credit balance of any Borrower.

26 TRANSFERS AND CHANGES IN LENDING OFFICES

26.1 Transfer by Borrower

No Borrower may assign or transfer any of its rights, liabilities or obligations under any Finance Document.

26.2 Transfer by a Lender

Subject to Clause 26.4, a Lender (the "Transferor Lender") may at any time, without needing the consent of the Borrowers or any Security Party, cause:

(a) its rights in respect of all or part of its Contribution; or

(b) its obligations in respect of all or part of its Commitment; or

(c) a combination of (a) and (b); or

(d) all or part of its credit risk under this Agreement and the other Finance Documents,

to be syndicated to or, (in the case of its rights) assigned, pledged or transferred to, or (in the case of its obligations) pledged or assumed by, any other bank, or financial institution or to a trust, fund or other entity which is regularly engaged in or established for the purpose of making, purchasing or investing in loans, securities or other financial assets (a "Transferee Lender") by delivering to the Agent a completed certificate in the form set out in Schedule 6 with any modifications approved or required by the Agent (a "Transfer Certificate") executed by the Transferor Lender and the Transferee Lender.

However any rights and obligations of the Transferor Lender in its capacity as Agent or Security Trustee will have to be dealt with separately in accordance with the Agency and Trust Agreement.

26.3 Transfer Certificate, delivery and notification

As soon as reasonably practicable after a Transfer Certificate is delivered to the Agent, it shall (unless it has reason to believe that the Transfer Certificate may be defective):

(a) sign the Transfer Certificate on behalf of itself, the Borrowers, the Security Parties, the Security Trustee and each of the other Lenders and the Swap Bank;

(b) on behalf of the Transferee Lender, send to each Borrower and each Security Party letters or faxes notifying them of the Transfer Certificate and attaching a copy of it; and

(c) send to the Transferee Lender copies of the letters or faxes sent under paragraph (b) above.

26.4 Effective Date of Transfer Certificate

A Transfer Certificate becomes effective on the date, if any, specified in the Transfer Certificate as its effective date, Provided that it is signed by the Agent under Clause 26.3 on or before that date.

26.5 No transfer without Transfer Certificate

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Except as provided in Clause 26.17, no assignment or transfer of any right or obligation of a Lender under any Finance Document (other than the Master Agreement) is binding on, or effective in relation to, any Borrower, any Security Party, the Agent or the Security Trustee unless it is effected, evidenced or perfected by a Transfer Certificate.

26.6 Lender re-organisation; waiver of Transfer Certificate

However, if a Lender enters into any merger, de-merger or other reorganisation as a result of which all its rights or obligations vest in another person (the "successor"), the Agent may, if it sees fit, by notice to the successor and the Borrowers and the Security Trustee waive the need for the execution and delivery of a Transfer Certificate; and, upon service of the Agent's notice, the successor shall become a Lender with the same Commitment and Contribution as were held by the predecessor Lender.

26.7 Effect of Transfer Certificate

A Transfer Certificate takes effect in accordance with English law as follows:

(a) to the extent specified in the Transfer Certificate, all rights and interests (present, future or contingent) which the Transferor Lender has under or by virtue of the Finance Documents (other than the Master Agreement) are assigned to the Transferee Lender absolutely, free of any defects in the Transferor Lender's title and of any rights or equities which any Borrower or any Security Party had against the Transferor Lender;

(b) the Transferor Lender's Commitment is discharged to the extent specified in the Transfer Certificate;

(c) the Transferee Lender becomes a Lender with the Contribution previously held by the Transferor Lender and a Commitment of an amount specified in the Transfer Certificate;

(d) the Transferee Lender becomes bound by all the provisions of the Finance Documents (other than the Master Agreement) which are applicable to the Lenders generally, including those about pro-rata sharing and the exclusion of liability on the part of, and the indemnification of, the Agent and the Security Trustee and, to the extent that the Transferee Lender becomes bound by those provisions (other than those relating to exclusion of liability), the Transferor Lender ceases to be bound by them;

(e) any part of the Loan which the Transferee Lender advances after the Transfer Certificate's effective date ranks in point of priority and security in the same way as it would have ranked had it been advanced by the transferor, assuming that any defects in the transferor's title and any rights or equities of any Borrower or any Security Party against the Transferor Lender had not existed;

(f) the Transferee Lender becomes entitled to all the rights under the Finance Documents (other than the Master Agreement) which are applicable to the Lenders generally, including but not limited to those relating to the Majority Lenders and those under Clause 5.5 and Clause 20, and to the extent that the Transferee Lender becomes entitled to such rights, the Transferor Lender ceases to be entitled to them; and

(g) in respect of any breach of a warranty, undertaking, condition or other provision of a Finance Document or any misrepresentation made in or in connection with a Finance Document (other than the Master Agreement), the Transferee Lender shall be entitled to recover damages by reference to the loss incurred by it as a result of the breach or misrepresentation, irrespective of whether the original Lender would have incurred a loss of that kind or amount.

The rights and equities of any Borrower or any Security Party referred to above include, but are not limited to, any right of set off and any other kind of cross-claim.

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26.8 Maintenance of register of Lenders

During the Security Period the Agent shall maintain a register in which it shall record the name, Commitment, Contribution and administrative details (including the lending office) from time to time of each Lender holding a Transfer Certificate and the effective date (in accordance with Clause 26.4) of the Transfer Certificate; and the Agent shall make the register available for inspection by any Lender, the Security Trustee and the Borrowers during normal banking hours, subject to receiving at least 3 Business Days' prior notice.

26.9 Reliance on register of Lenders

The entries on that register shall, in the absence of manifest error, be conclusive in determining the identities of the Lenders and the amounts of their Commitments and Contributions and the effective dates of Transfer Certificates and may be relied upon by the Agent and the other parties to the Finance Documents for all purposes relating to the Finance Documents.

26.10 Authorisation of Agent to sign Transfer Certificates

The Borrowers, the Security Trustee, each Lender and the Swap Bank irrevocably authorises the Agent to sign Transfer Certificates on its behalf.  The Borrower and each Security Party irrevocably agrees to the transfer procedures set out in this Clause 26 and to the extent the cooperation of the Borrowers and/or any Security Party shall be required to effect any such transfer, the Borrowers and such Security Party shall take all necessary steps to afford such cooperation Provided that this shall not result in any additional costs to the Borrowers or such Security Party.

26.11 Registration fee

In respect of any Transfer Certificate, the Agent shall be entitled to recover a registration fee of $2,500 from the Transferor Lender or (at the Agent's option) the Transferee Lender.

26.12 Sub-participation; subrogation assignment

A Lender may sub-participate or include in a securitisation or similar transaction all or any part of its rights and/or obligations under or in connection with the Finance Documents (other than the Master Agreement) without the Borrowers' prior consent and without serving a notice thereon and the Lenders may assign without the Borrowers' prior consent and without serving a notice thereon, in any manner and terms agreed by the Majority Lenders, the Agent and the Security Trustee, all or any part of those rights to an insurer or surety who has become subrogated to them.  The Borrowers shall, and shall procure that each Security Party shall, do everything requested by the Agent or any Lender to assist and co-operate with that Lender to achieve a successful securitisation or similar transaction.

26.13 Sub-division, split, modification or re-tranching

Any Lender may, in its sole discretion, sub-divide, split, sever, modify or re-tranche its part of the Loan into one or more parts subject to the overall cost of the Loan applicable towards the Borrowers remaining unchanged, if such changes are necessary in order to achieve a successful execution of a securitisation, syndication or any other capital market exit of the Loan.

26.14 Disclosure of information

A Lender may, without the prior consent of the Borrowers, the Corporate Guarantor or any other Security Party, disclose to a potential Transferee Lender or sub participant as well as, where relevant, to rating agencies, trustees and accountants, any financial or other information which that Lender has received in relation to the Loan, the Borrowers (or any of

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them), the Corporate Guarantor and any other Security Party or their affairs and collateral or security provided under or in connection with any Finance Document, their financial circumstances and any other information whatsoever, as that Lender may deem reasonably necessary or appropriate in connection with the potential syndication, the assessment of the credit risk and the ongoing monitoring of the Loan by any potential Transferee Lender and that Lender shall be released from its obligation of secrecy and from banking confidentiality.

In the event any such potential Transferee Lender, sub-participant, rating agency, trustee or accountant is not already bound by any legal obligation of secrecy or banking confidentiality, the Lender concerned shall require such other party to sign a confidentiality agreement. The Borrowers shall, and shall procure that the Corporate Guarantor and any other Security Party shall:

(a) provide the Creditor Parties (or any of them) with all information deemed, reasonably, necessary by the Creditor Parties (or any of them) for the purposes of any transfer, syndication or sub-participation to be effected pursuant to this Clause 26;

(b) procure that the directors and officers of each Borrower, the Corporate Guarantor or any other Security Party, are available to participate in any meeting with any Transferee Lender or any rating agency at such times and places as the Creditor Parties may reasonably request on notice (to be served on the Borrowers reasonably in advance) to that Borrower, the Corporate Guarantor or that Security Party; and

(c) permit any Transferee Lender to board any Ship at all reasonable times to inspect its condition with reasonable notice to the Borrowers (after taking into consideration the relevant Ships' schedule).

The Borrowers shall not and shall ensure than no Security Party will publish any details regarding the Loan or any of the Finance Documents without the Agent's prior written consent.

26.15 Change of lending office

A Lender may change its lending office by giving notice to the Agent and the change shall become effective on the later of:

(a) the date on which the Agent receives the notice; and

(b) the date, if any, specified in the notice as the date on which the change will come into effect.

26.16 Notification

On receiving such a notice, the Agent shall notify the Borrowers and the Security Trustee; and, until the Agent receives such a notice, it shall be entitled to assume that a Lender is acting through the lending office of which the Agent last had notice.

26.17 Security over Lenders' rights

In addition to the other rights provided to Lenders under this Clause 26, each Lender may without consulting with or obtaining consent from any Borrower or any Security Party, at any time charge, assign or otherwise create a Security Interest in or over (whether by way of collateral or otherwise) all or any of its rights under any Finance Document (other than the Master Agreement) to secure obligations of that Lender including, without limitation:

(a) any charge, assignment or other Security Interest to secure obligations to a federal reserve or central bank; and

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(b) in the case of any Lender which is a fund, any charge, assignment or other Security Interest granted to any holders (or trustee or representatives of holders) of obligations owed, or securities issued, by that Lender as security for those obligations or securities,

except that no such charge, assignment or Security Interest shall:

(i) release a Lender from any of its obligations under the Finance Documents or substitute the beneficiary of the relevant charge, assignment or Security Interest for the Lender as a party to any of the Finance Documents; or

(ii) require any payments to be made by any Borrower or any Security Party or grant to any person any more extensive rights than those required to be made or granted to the relevant Lender under the Finance Documents.

26.18 Replacement of a Reference Bank

If any Reference Bank ceases to be a Lender or is unable on a continuing basis to supply quotations for the purposes of Clause 5 then, unless the Borrowers, the Agent and the Majority Lenders otherwise agree, the Agent, acting on the instructions of the Majority Lenders, and after consulting the Borrowers, shall appoint another bank (whether or not a Lender) to be a replacement Reference Bank; and, when that appointment comes into effect, the first‑mentioned Reference Bank's appointment shall cease to be effective.

27 VARIATIONS AND WAIVERS

27.1 Required consents

(a) Subject to Clause 27.2 (Exceptions) any term of the Finance Documents may be amended or waived only with the consent of the Majority Lenders and the Borrowers and any such amendment or waiver will be binding on all Creditor Parties and the Borrowers.

(b) Any instructions given by the Majority Lenders will be binding on all the Creditor Parties.

(c) The Agent may effect, on behalf of any Creditor Party, any amendment or waiver permitted by this Clause.

27.2 Exceptions

(a) An amendment or waiver that has the effect of changing or which relates to:

(i) the definition of "Majority Lenders" or "Finance Documents" in Clause 1.1 (Definitions);

(ii) an extension to the date of payment of any amount under the Finance Documents;

(iii) a reduction in the Margin or a reduction in the amount of any payment of principal, interest fees, commission or other amount payable under any of the Finance Documents;

(iv) an increase in or an extension of any Lender's Commitment;

(v) any provision which expressly requires the consent of all the Lenders; or

(vi) Clause 3 (Position of the Lenders and Swap Banks), Clause 11.5 (Information provided to be accurate), 11.6 (Provision of financial statements) and 11.7 (Form of financial statements), Clause 26 (Transfers and Changes in Lending Offices) or this Clause 27.2;

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(vii) any release of any Security Interest, guarantee, indemnities or subordination arrangement created by any Finance Document;

(viii) any change of the currency in which the Loan is provided or any amount is payable under any of the Finance Documents;

(ix) an extension of the Availability Period; and

(x) change clauses 16.4 (Distribution of payment to Creditor Parties) and 22 (Grossing-up),

may not be effected without the prior written consent of all Lenders.

(b) An amendment or waiver which relates to the rights or obligations of the Agent, the Arranger or the Security Trustee may not be effected without the consent of the Agent, the Arranger or the Security Trustee, as the case may be.

27.3 Exclusion of other or implied variations

Except for a document which satisfies the requirements of Clauses 27.1 and 27.2, no document, and, subject to Clause 27.4, no act, course of conduct, failure or neglect to act, delay or acquiescence on the part of the Creditor Parties or any of them (or any person acting on behalf of any of them) shall result in the Creditor Parties or any of them (or any person acting on behalf of any of them) being taken to have varied, waived, suspended or limited, or being precluded (permanently or temporarily) from enforcing, relying on or exercising:

(a) a provision of this Agreement or another Finance Document; or

(b) an Event of Default; or

(c) a breach by a Borrower or a Security Party of an obligation under a Finance Document or the general law; or

(d) any right or remedy conferred by any Finance Document or by the general law,

and there shall not be implied into any Finance Document any term or condition requiring any such provision to be enforced, or such right or remedy to be exercised, within a certain or reasonable time.

27.4 Deemed consent

With respect to any amendment, variation, waiver, suspension or limit requested by any party to this Agreement and which requires the approval of all the Lenders or the Majority Lenders (as the case may be), the Agent shall provide each Lender with written notice of such request accompanied by such detailed background information as may be reasonably necessary (in the opinion of the Agent) to determine whether to approve such action.  A Lender shall be deemed to have approved such action if such Lender fails to object to such action by written notice to the Agent within 10 days of that Lender's receipt of the Agent's notice or such other time as the Agent may state in the relevant notice as being the time available for approval of such action.

28 NOTICES

28.1 General.  Unless otherwise specifically provided, any notice under or in connection with any Finance Document shall be given by letter or fax; and references in the Finance Documents to written notices, notices in writing and notices signed by particular persons shall be construed accordingly.

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28.2 Addresses for communications.  A notice by letter or fax shall be sent:

(a)	to the Borrowers:	c/o the Approved Manager 15 Karamanli Avenue 166 73 Voula Greece Fax No: +30 210 8995 085
(b)	to a Lender:	At the address below its name in Schedule 1 the case may require) in the relevant Transfer Certificate.
(c)	to the Agent and Security Trustee:	HSH Nordbank AG CRM Shipping Europe & Offshore Gerhart-Hauptmann-Platz 50 20095 Hamburg Germany Fax No: +49 40 3333 34118
		Respectively for administrative purposes:
		HSH Nordbank AG
		Loan and Collateral Management Shipping International Fax No: +49 40 3333 34118
(d)	to the Swap Bank:	Martensdamm 6 D-24103 Kiel Germany Fax No: +49 40 3333 34086

or to such other address as the relevant party may notify the Agent or, if the relevant party is the Agent or the Security Trustee, the Borrowers, the Lenders, the Swap Bank and the Security Parties.

28.3 Effective date of notices

Subject to Clauses 28.4 and 28.5:

(a) a notice which is delivered personally or posted shall be deemed to be served, and shall take effect, at the time when it is delivered; and

(b) a notice which is sent by fax shall be deemed to be served, and shall take effect, 2 hours after its transmission is completed.

28.4 Service outside business hours

However, if under Clause 28.3 a notice would be deemed to be served:

(a) on a day which is not a business day in the place of receipt; or

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(b) on such a business day, but after 5 p.m. local time,

the notice shall (subject to Clause 28.5) be deemed to be served, and shall take effect, at 9 a.m. on the next day which is such a business day.

28.5 Illegible notices

Clauses 28.3 and 28.4 do not apply if the recipient of a notice notifies the sender within 1 hour after the time at which the notice would otherwise be deemed to be served that the notice has been received in a form which is illegible in a material respect.

28.6 Valid notices

A notice under or in connection with a Finance Document shall not be invalid by reason that its contents or the manner of serving it do not comply with the requirements of this Agreement or, where appropriate, any other Finance Document under which it is served if:

(a) the failure to serve it in accordance with the requirements of this Agreement or other Finance Document, as the case may be, has not caused any party to suffer any significant loss or prejudice; or

(b) in the case of incorrect and/or incomplete contents, it should have been reasonably clear to the party on which the notice was served what the correct or missing particulars should have been.

28.7 Electronic communication

Any communication to be made between the Agent and a Lender or Swap Bank or a Borrower or any Security Party under or in connection with the Finance Documents may be made by electronic mail or other electronic means, if the Agent and, in the case of a communication to a Creditor Party, the relevant Creditor Party:

(a) agree that, unless and until notified to the contrary, this is to be an accepted form of communication;

(b) notify each other in writing of their electronic mail address and/or any other information required to enable the sending and receipt of information by that means; and

(c) notify each other of any change to their respective addresses or any other such information supplied to them.

Any electronic communication made between the Agent and a Lender or the Swap Bank will be effective only when actually received in readable form and, in the case of any electronic communication made by a Creditor Party to the Agent, only if it is addressed in such a manner as the Agent shall specify for this purpose.

28.8 English language

Any notice under or in connection with a Finance Document shall be in English.

28.9 Meaning of "notice"

In this Clause 28, "notice" includes any demand, consent, authorisation, approval, instruction, waiver or other communication.

29 JOINT  AND SEVERAL LIABILITY

29.1 General

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All liabilities and obligations of the Borrowers under this Agreement shall, whether expressed to be so or not, be several and, if and to the extent consistent with Clause 29.2, joint.

29.2 No impairment of Borrower's obligations

The liabilities and obligations of a Borrower shall not be impaired by:

(a) this Agreement being or later becoming void, unenforceable or illegal as regards the other Borrower;

(b) any Lender, the Swap Bank or the Security Trustee entering into any rescheduling, refinancing or other arrangement of any kind with the other Borrower;

(c) any Lender, the Swap Bank or the Security Trustee releasing the other Borrower or any Security Interest created by a Finance Document; or

(d) any combination of the foregoing.

29.3 Principal debtors

Each Borrower declares that it is and will, throughout the Security Period, remain a principal debtor for all amounts owing under this Agreement and the Finance Documents and no Borrower shall in any circumstances be construed to be a surety for the obligations of the other Borrower under this Agreement.

29.4 Subordination

Subject to Clause 29.5, during the Security Period, no Borrower shall:

(a) claim any amount which may be due to it from the other Borrower whether in respect of a payment made, or matter arising out of, this Agreement or any Finance Document, or any matter unconnected with this Agreement or any Finance Document; or

(b) take or enforce any form of security from the other Borrower for such an amount, or in any other way seek to have recourse in respect of such an amount against any asset of the other Borrower; or

(c) set off such an amount against any sum due from it to the other Borrower; or

(d) prove or claim for such an amount in any liquidation, administration, arrangement or similar procedure involving the other Borrower or other Security Party; or

(e) exercise or assert any combination of the foregoing.

29.5 Borrowers' required action

If during the Security Period, the Agent, by notice to a Borrower, requires it to take any action referred to in paragraphs (a) to (d) of Clause 29.4, in relation to the other Borrower, that Borrower shall take that action as soon as practicable after receiving the Agent's notice.

30 SUPPLEMENTAL

30.1 Rights cumulative, non-exclusive

The rights and remedies which the Finance Documents give to each Creditor Party are:

(a) cumulative;

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(b) may be exercised as often as appears expedient; and

(c) shall not, unless a Finance Document explicitly and specifically states so, be taken to exclude or limit any right or remedy conferred by any law.

30.2 Severability of provisions

If any provision of a Finance Document is or subsequently becomes void, unenforceable or illegal, that shall not affect the validity, enforceability or legality of the other provisions of that Finance Document or of the provisions of any other Finance Document.

30.3 Counterparts

A Finance Document may be executed in any number of counterparts.

30.4 Third party rights

A person who is not a party to this Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Agreement.

30.5 Benefit and binding effect

The terms of this Agreement shall be binding upon, and shall enure to the benefit of, the parties hereto and their respective (including subsequent) successors and permitted assigns and transferees.

31 LAW AND JURISDICTION

31.1 English law

This Agreement and any non-contractual obligations arising out of or in connection with it shall be governed by, and construed in accordance with, English law.

31.2 Exclusive English jurisdiction

Subject to Clause 31.3, the courts of England shall have exclusive jurisdiction to settle any Dispute.

31.3 Choice of forum for the exclusive benefit of the Creditor Parties

Clause 31.2 is for the exclusive benefit of the Creditor Parties, each of which reserves the right:

(a) to commence proceedings in relation to any Dispute in the courts of any country other than England and which have or claim jurisdiction to that Dispute; and

(b) to commence such proceedings in the courts of any such country or countries concurrently with or in addition to proceedings in England or without commencing proceedings in England.

No Borrower shall commence any proceedings in any country other than England in relation to a Dispute.

31.4 Process agent

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Each Borrower irrevocably appoints Hill Dickinson Services (London) Ltd. at its registered office for the time being, presently at Irongate House, Duke's Place, London EC3A 7HX, England, to act as its agent to receive and accept on its behalf any process or other document relating to any proceedings in the English courts which are connected with a Dispute.

31.5 Creditor Party rights unaffected

Nothing in this Clause 31 shall exclude or limit any right which any Creditor Party may have (whether under the law of any country, an international convention or otherwise) with regard to the bringing of proceedings, the service of process, the recognition or enforcement of a judgment or any similar or related matter in any jurisdiction.

31.6 Meaning of "proceedings" and "Dispute"

In this Clause 31, "proceedings" means proceedings of any kind, including an application for a provisional or protective measure and a "Dispute" means any dispute arising out of or in connection with this Agreement (including a dispute relating to the existence, validity or termination of this Agreement) or any non-contractual obligation arising out of or in connection with this Agreement.

THIS AGREEMENT has been entered into on the date stated at the beginning of this Agreement.

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SCHEDULE 1
LENDERS AND COMMITMENTS

Lender	Lending Office	Commitment (US Dollars)
HSH Nordbank AG	Gerhart-Hauptmann-Platz 50 20095 Hamburg Germany	47,000,000

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SCHEDULE 2
DRAWDOWN NOTICE

To: HSH Nordbank AG

       Gerhart-Hauptmann-Platz 50

      20095 Hamburg

      Germany

Attention: Credit Risk Management Shipping[l]

DRAWDOWN NOTICE

1 We refer to the loan agreement (the "Loan Agreement") dated [l] 2014 and made between ourselves, as Borrowers, the Lenders referred to therein, and yourselves as Agent, Mandated Lead Arranger, as Security Trustee and as Swap Bank in connection with a facility of up to US$47,000,000. Terms defined in the Loan Agreement have their defined meanings when used in this Drawdown Notice.

2 We request to borrow Tranche [A][B][C]:

(a) Amount of Tranche [A][B][C]: US$[l];

(b) Drawdown Date: [l];

(c) Duration of the first Interest Period shall be 3 months; and

(d) Payment instructions : account in our name and numbered [l] with [l] of [l].

3 We represent and warrant that:

(e) the representations and warranties in Clause 10 of the Loan Agreement would remain true and not misleading if repeated on the date of this notice with reference to the circumstances now existing; and

(f) no Event of Default or Potential Event of Default has occurred or will result from the borrowing of that Tranche.

4 This notice cannot be revoked without the prior consent of the Majority Lenders.

5 [We authorise you to deduct the structuring fee payable pursuant to in Clause 20.1 and any accrued commitment fee payable pursuant to Clause 20.1[(c)][(d)].

[Name of Signatory]

Director

for and on behalf of

ALCYONE INTERNATIONAL MARINE INC. and

NEPTUNE INTERNATIONAL SHIPPING AND TRADING S.A.

PALOMA MARINE S.A.

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SCHEDULE 3
CONDITION PRECEDENT DOCUMENTS

PART A

The following are the documents referred to in Clause 9.1(a) required before service of the first Drawdown Notice.

1 A duly executed original of:

(a) this Agreement;

(b) the Master Agreement;

(c) the Master Agreement Assignment;

(d) the Corporate Guarantee;

(e) the Agency and Trust Agreement; and

(f) the Account Pledges.

2 Copies of the certificate of incorporation and constitutional documents of each Borrower, the Corporate Guarantor and any other Security Party and any company registration documents in respect of any Borrower, the Corporate Guarantor,  any other Security Party (including, without limitation, any corporate register excerpts) required by the Agent and a list of all members of the Group.

3 Copies of resolutions of the directors and shareholder of each Borrower and the directors and, if appropriate, shareholders of each Security Party authorising the execution of each of the Finance Documents to which each is a party and, in the case of a Borrower, authorising named officers to give the Drawdown Notices and other notices under this Agreement and, in the case of Borrower A and Borrower B, ratifying the execution of the Shipbuilding Contract to which it is a party.

4 The original of any power of attorney under which any Finance Document is executed on behalf of a Borrower, the Corporate Guarantor or any other Security Party.

5 Copies of all consents which any Borrower, the Corporate Guarantor or any other Security Party requires to enter into, or make any payment under, any Finance Document and in the case of Borrower A and Borrower B, the Shipbuilding Contracts.

6 The originals of any mandates or other documents required in connection with the opening or operation of the Accounts.

7 Documentary evidence that the agent for service of process named in Clause 31 has accepted its appointment.

8 Any documents required by the Agent in respect of each Borrower, the Corporate Guarantor and any other Security Party to satisfy the Lenders' "know your customer" requirements.

9 Favourable legal opinions from lawyers appointed by the Agent on such matters concerning the laws of Liberia, the Approved Flag State and such other relevant jurisdictions as the Agent may require.

10 Copies of each Shipbuilding Contract and of all documents signed or issued by the relevant Borrower and the Builder under or in connection with it.

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11 Such documentary evidence as the Agent and its legal advisers may reasonably require in relation to the due authorisation and execution by the Builder of each Shipbuilding Contract and of all documents to be executed by the Builder thereunder.

12 If the Agent so requires, in respect of any of the documents referred to above, a certified English translation prepared by a translator approved by the Agent.

PART B

The following are the documents referred to in Clause 9.1(b) required in the case of Ship A and Ship B on or before the Delivery Date but prior to the release of the relevant funds to the Builder and in the case of Ship C, the Drawdown Date relevant thereto. In Part B of this Schedule 3, the following definitions have the following meanings:

(a) "Relevant Borrower" means the Borrower which is the owner of the Relevant Ship; and

(b) "Relevant Ship" means the Ship which is relevant to the Tranche being advanced on the relevant Drawdown Date.

1 A duly executed original of the Mortgage, the General Assignment and any Charterparty Assignment relating to any Assignable Charter (and of each document to be delivered by each of them) each in respect of the Relevant Ship.

2 Documentary evidence that:

(a) the Relevant Ship is definitively and permanently registered in the name of the Relevant Borrower under an Approved Flag in accordance with the laws of the applicable Approved Flag State;

(b) the Relevant Ship is in the absolute and unencumbered ownership of the Relevant Borrower save as contemplated by the Finance Documents;

(c) where the Relevant Ship is Ship A or Ship B, it has been unconditionally delivered by the Builder to, and accepted by, the Relevant Borrower under the relevant Shipbuilding Contract, and the contract price payable thereunder (in addition to the part to be financed by the relevant Tranche) has been duly paid in full (together with a copy of each of the documents delivered by the Builder to that Borrower under that Shipbuilding Contract (including but not limited to the bill of sale, the commercial invoice and the protocol of delivery and acceptance);

(d) the Relevant Ship maintains the class specified in Clause 14.3(b) with a first class classification society which is a member of IACS as the Agent may approve free of all overdue recommendations and conditions of such classification society;

(e) the Mortgage relating to the Relevant Ship has been duly registered or recorded against that Ship as a valid first preferred or, as the case may be, priority mortgage in accordance with the laws of the applicable Approved Flag State;

(f) the Relevant Ship is insured in accordance with the provisions of this Agreement and all requirements therein in respect of insurances have been complied with; and

(g) if the Relevant Ship is subject to an Approved Charter, the Relevant Ship is delivered to the relevant charterer in accordance with the terms of that Approved Charter.

3 Documents establishing that the Relevant Ship will, as from the relevant Drawdown Date, be managed by the Approved Manager on terms acceptable to the Lenders, together with:

(a) the Approved Manager's Undertaking relative thereto; and

82

(b) copies of the Approved Manager's Document of Compliance and of that Ship's Safety Management Certificate (together with any other details of the applicable safety management system which the Agent requires); and

(c) a copy of the ISSC in respect of the Relevant Ship.

4 Two valuations of the Relevant Ship prepared by two Approved Brokers appointed by the Agent, one of which nominated by the Agent and the other by the Borrowers, each addressed to the Agent, stated to be for the purposes of this Agreement and otherwise prepared in accordance with Clause 15.3 which shows a value for that Ship in an amount which will be sufficient to satisfy the Borrowers' obligations under Clause 15.1.

5 Evidence satisfactory to the Agent that the Minimum Liquidity in respect of the Relevant Ship is standing to the credit of the relevant Liquidity Account pursuant to Clause 11.17.

6 A certified true copy of any Approved Charter applicable to the Relevant Ship duly executed by the parties thereto.

7 A favourable opinion from an independent insurance consultant acceptable to the Agent on such matters relating to the insurances for the Relevant Ship as the Agent may require.

8 Favourable legal opinions from lawyers appointed by the Agent on such matters concerning the law of the applicable Approved Flag State on which the Relevant Ship is or is to be registered and such other relevant jurisdictions as the Agent may require.

9 Evidence that the arrangement fee, the structuring fee and the commitment fee payable to the Agent pursuant to Clause 20.1 have been paid by the Borrowers.

10 Any financial statements required pursuant to Clause 11.6.

11 A written statement duly signed by the Borrowers and the Corporate Guarantor stating that no Event of Default is in existence as at the Drawdown Date.

12 Any other documents or evidence as the Agent may request from the Borrowers.

13 If the Agent so requires, in respect of any of the documents referred to above, a certified English translation prepared by a translator approved by the Agent.

Each of the documents specified in (i) paragraphs 2 and 3 of Part A shall be notarised or legalised by a competent authority acceptable to the Agent and (ii) paragraph 5 and 6 of Part A and every other copy document delivered under this Schedule shall be certified as a true and up to date copy by a Borrower.

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SCHEDULE 4
MANDATORY COST FORMULA

1 The Mandatory Cost is an addition to the interest rate to compensate Lenders for the cost of compliance with (a) the requirements of the Financial Services Authority (or any other authority which replaces all or any of its functions) or (b) the requirements of the European Central Bank.

2 On the first day of each Interest Period (or as soon as possible thereafter) the Agent shall calculate, as a percentage rate, a rate (the"Additional Cost Rate") for each Lender, in accordance with the paragraphs set out below.  The Mandatory Cost will be calculated by the Agent as a weighted average of the Lenders' Additional Cost Rates (weighted in proportion to the percentage participation of each Lender in the relevant Tranche) and will be expressed as a percentage rate per annum.

3 The Additional Cost Rate for any Lender lending from a lending office in a Participating Member State will be the percentage notified by that Lender to the Agent.  This percentage will be certified by that Lender in its notice to the Agent to be its reasonable determination of the cost (expressed as a percentage of that Lender's participation in all Tranches made from that lending office) of complying with the minimum reserve requirements of the European Central Bank in respect of loans made from that lending office.

4

5 The Additional Cost Rate for any Lender lending from a lending office in the United Kingdom will be calculated by the Agent as follows:

E x 0.01	per cent. per annum
300

Where:

E is designed to compensate Lenders for amounts payable under the Fees Rules and is calculated by the Agent as being the average of the most recent rates of charge supplied by the Reference Banks to the Agent pursuant to paragraph 6 below and expressed in pounds per £1,000,000.

6 For the purposes of this Schedule:

(a) "Eligible Liabilities" and "Special Deposits" have the meanings given to them from time to time under or pursuant to the Bank of England Act 1998 or (as may be appropriate) by the Bank of England;

(b) "Fees Rules"  means the rules on periodic fees contained in the FSA Supervision Manual or such other law or regulation as may be in force from time to time in respect of the payment of fees for the acceptance of deposits;

(c) "Fee Tariffs"  means the fee tariffs specified in the Fees Rules under the activity group A.1 Deposit acceptors (ignoring any minimum fee or zero rated fee required pursuant to the Fees Rules but taking into account any applicable discount rate);

84

(d) "Participating Member State"  means any member state of the European Union that adopts or has adopted the euro as its lawful currency in accordance with legislation of the European Union relating to European Monetary Union; and

(e) "Tariff Base"  has the meaning given to it in, and will be calculated in accordance with, the Fees Rules.

7 If requested by the Agent, the Reference Banks shall, as soon as practicable after publication by the Financial Services Authority, supply to the Agent, the rate of charge payable by the Reference Bank to the Financial Services Authority pursuant to the Fees Rules in respect of the relevant financial year of the Financial Services Authority (calculated for this purpose by the Reference Banks as being the average of the Fee Tariffs applicable to the Reference Banks for that financial year) and expressed in pounds per £1,000,000 of the Tariff Base of the Reference Banks.

8 Each Lender shall supply any information required by the Agent for the purpose of calculating its Additional Cost Rate.  In particular, but without limitation, each Lender shall supply the following information in writing on or prior to the date on which it becomes a Lender:

(a) the jurisdiction of its lending office; and

(b) any other information that the Agent may reasonably require for such purpose.

Each Lender shall promptly notify the Agent in writing of any change to the information provided by it pursuant to this paragraph.

9 The rates of charge of the Reference Banks for the purpose of E above shall be determined by the Agent based upon the information supplied to it pursuant to paragraph 6 above and on the assumption that, unless a Lender notifies the Agent to the contrary, each Lender's obligations in relation to cash ratio deposits and special Deposits are the same as those of a typical bank from its jurisdiction of incorporation with a lending office in the same jurisdiction as its lending office.

10 The Agent shall have no liability to any person if such determination results in an Additional Cost Rate which over or under compensates any Lender and shall be entitled to assume that the information provided by any Lender or the Reference Banks pursuant to paragraphs 3, 6 and 7 above is true and correct in all respects.

11 The Agent shall distribute the additional amounts received as a result of the Mandatory Cost to the Lenders on the basis of the Additional Cost Rate for each Lender based on the information provided by each Lender and the Reference Banks pursuant to paragraphs 3, 6 and 7 above.

12 Any determination by the Agent pursuant to this Schedule in relation to a formula, the Mandatory Cost, an Additional Cost Rate or any amount payable to a Lender shall, in the absence of manifest error, be conclusive and binding on all parties.

13 The Agent may from time to time, after consultation with the Borrowers and the Lenders, determine and notify to all parties any amendments which are required to be made to this Schedule in order to comply with  any change in law, regulation or any requirements from time to time imposed by the Financial Services Authority or the European Central Bank (or, in any case, any other authority which replaces all or any of its functions) and any such determination shall, in the absence of manifest error, be conclusive and binding on all parties.

85

SCHEDULE 5
DESIGNATION NOTICE

To:	Paloma Marine S.A. Alcyone Inernational Marine Inc. and Neptune International Shipping and Trading S.A. c/o Star Bulk Management Inc. 40 Agiou Konstantinou Maroussi Greece
	-and-
	HSH Nordbank AG Gerhart-Hauptmann-Platz 50 20095 Hamburg Germany Attention: [Loans Administration]

[date]

Dear Sirs

Loan Agreement dated [l] 2014 (the "Loan Agreement") and made between (i) Alcyone International Marine Inc., Neptune International Shipping and Trading S.A. and Paloma Marine S.A., as joint and several Borrowers, (ii) the Lenders, (iii) the Swap Bank, (iv) and ourselves as Agent, Mandated Lead Arranger, Swap Bank and Security Trustee

Words and expressions defined in the Loan Agreement shall be used in this Designation Notice.

We refer to:

1 the Loan Agreement;

2 the Master Agreement dated as of [l] made between yourselves and the Swap Bank; and

3 a Confirmation delivered pursuant to the said Master Agreement dated [l] and addressed by the Swap Bank to yourselves.

In accordance with the terms of the Loan Agreement, we hereby give you notice of the said Confirmation and hereby confirm that the Transaction evidenced by it will be designated as a "Designated Transaction" for the purposes of the Loan Agreement and the Finance Documents.

Yours faithfully

______________________

for and on behalf of

HSH NORDBANK AG

86

SCHEDULE 6
TRANSFER CERTIFICATE

The Transferor and the Transferee accept exclusive responsibility for ensuring that this Certificate and the transaction to which it relates comply with all legal and regulatory requirements applicable to them respectively.

To:HSH Nordbank AG for itself and for and on behalf of each Borrower, each Security Party, the Security Trustee, each Lender and the Swap Bank, as defined in the Loan Agreement referred to below.

[l]

1 This Certificate relates to a Loan Agreement (the "Loan Agreement") dated [l] 2014 and made between (1) Paloma Marine S.A., Alcyone International Marine Inc. and Neptune International Shipping and Trading S.A. (together, the "Borrowers" and each a "Borrower") as joint and several Borrowers, (2) the banks and financial institutions named therein as Lenders, (3) HSH Nordbank AG as Swap Bank, (4) HSH Nordbank AG as Agent (5) HSH Nordbank AG as Mandated lead Arranger and (6) HSH Nordbank AG as Security Trustee for a loan facility of up to US$47,000,000.

2 In this Certificate, terms defined in the Loan Agreement shall, unless the contrary intention appears, have the same meanings and:

"Relevant Parties"  means the Agent, each Borrower, each Security Party, the Security Trustee, each Lender and the Swap Bank;

"Transferor"  means [full name] of [lending office]; and

"Transferee"  means [full name] of [lending office].

3 The effective date of this Certificate is [l]  Provided that this Certificate shall not come into effect unless it is signed by the Agent on or before that date.

4 The Transferor assigns to the Transferee absolutely all rights and interests (present, future or contingent) which the Transferor has as Lender under or by virtue of the Loan Agreement and every other Finance Document (other than the Master Agreement) in relation to [l] per cent. of its Contribution, which percentage represents $[l].

5 By virtue of this Certificate and Clause 26 of the Loan Agreement, the Transferor is discharged [entirely from its Commitment which amounts to $[l]] [from [l] per cent. of its Commitment, which percentage represents $[l]] and the Transferee acquires a Commitment of $[l].]

6 The Transferee undertakes with the Transferor and each of the Relevant Parties that the Transferee will observe and perform all the obligations under the Finance Documents (other than the Master Agreement) which Clause 26 of the Loan Agreement provides will become binding on it upon this Certificate taking effect.

7 The Agent, at the request of the Transferee (which request is hereby made) accepts, for the Agent itself and for and on behalf of every other Relevant Party, this Certificate as a Transfer Certificate taking effect in accordance with Clause 26 of the Loan Agreement.

8 The Transferor:

(a) warrants to the Transferee and each Relevant Party that:

87

(i) the Transferor has full capacity to enter into this transaction and has taken all corporate action and obtained all consents which are in connection with this transaction; and

(ii) this Certificate is valid and binding as regards the Transferor;

(b) warrants to the Transferee that the Transferor is absolutely entitled, free of encumbrances, to all the rights and interests covered by the assignment in paragraph 4 above; and

(c) undertakes with the Transferee that the Transferor will, at its own expense, execute any documents which the Transferee reasonably requests for perfecting in any relevant jurisdiction the Transferee's title under this Certificate or for a similar purpose.

9 The Transferee:

(a) confirms that it has received a copy of the Loan Agreement and each of the other Finance Documents;

(b) agrees that it will have no rights of recourse on any ground against either the Transferor, the Agent, the Mandated Lead Arranger, the Security Trustee, any Lender or the Swap Bank in the event that:

(i) any of the Finance Documents prove to be invalid or ineffective;

(ii) any Borrower or any Security Party fails to observe or perform its obligations, or to discharge its liabilities, under any of the Finance Documents;

(iii) it proves impossible to realise any asset covered by a Security Interest created by a Finance Document, or the proceeds of such assets are insufficient to discharge the liabilities of the Borrowers or any Security Party under the Finance Documents;

(c) agrees that it will have no rights of recourse on any ground against the Agent, the Mandated Lead Arranger, the Security Trustee, any Lender or the Swap Bank in the event that this Certificate proves to be invalid or ineffective;

(d) warrants to the Transferor and each Relevant Party that:

(i) it has full capacity to enter into this transaction and has taken all corporate action and obtained all consents which it needs to take or obtain in connection with this transaction; and

(ii) this Certificate is valid and binding as regards the Transferee; and

(e) confirms the accuracy of the administrative details set out below regarding the Transferee.

10 The Transferor and the Transferee each undertake with the Agent, the Mandated Lead Arranger and the Security Trustee severally, on demand, fully to indemnify the Agent and/or the Security Trustee and/or the Mandated Lead Arranger in respect of any claim, proceeding, liability or expense (including all legal expenses) which they or either of them may incur in connection with this Certificate or any matter arising out of it, except such as are shown to have been mainly and directly caused by the gross and culpable negligence or dishonesty of the Agent's, the Mandated Lead Arranger's or the Security Trustee's own officers or employees.

11 The Transferee shall repay to the Transferor on demand so much of any sum paid by the Transferor under paragraph 10 as exceeds one-half of the amount demanded by the Agent, the Mandated Lead Arranger or the Security Trustee in respect of a claim, proceeding, liability or expense which was not reasonably foreseeable at the date of this Certificate; but

88

nothing in this paragraph shall affect the liability of each of the Transferor and the Transferee to the Agent, the Mandated Lead Arranger or the Security Trustee for the full amount demanded by it.

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

Agent

Signed for itself and for and on behalf of itself

as Agent and for every other Relevant Party

HSH Nordbank AG

By:

Date:

89

Administrative Details of Transferee

Name of Transferee:

Lending Office:

Contact Person

(Loan Administration Department):

Telephone:

Fax:

Contact Person

(Credit Administration Department):

Telephone:

Fax:

Account for payments:

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

90

SCHEDULE 7
POWER OF ATTORNEY

Know all men by these presents that [borrower's name] (the "Company"), a company incorporated in [ ] and having its registered address at [address] irrevocably and by way of security appoints HSH Nordbank AG (the "Attorney") of Gerhart-Hauptmann-Platz 50, D-20095 Hamburg, Germany its attorney, to act in the name of the Company and to exercise any right, entitlement or power of the Company in relation to [name of classification society] (the "Classification Society") and/or to the classification records of any vessel owned, controlled or operated by the Company including, without limitation, such powers or entitlement as the Company may have to inspect the class records and any files held by the Classification Society in relation to any such vessel and to require the Classification Society to provide to the Attorney or to any of its nominees any information, document or file which the Attorney may request

Ratification of actions of attorney.  For the avoidance of doubt and without limiting the generality of the above, it is confirmed that the Company hereby ratifies any action which the Attorney takes or purports to take under this Power of Attorney and the Classification Society shall be entitled to rely hereon without further enquiry.

Delegation.  The Attorney may exercise its powers hereunder through any officer or through any nominee and/or may sub‑delegate to any person or persons (including a Receiver and persons designated by him) all or any of the powers (including the discretions) conferred on the Attorney hereunder, and may do so on terms authorising successive sub‑delegations.

this Power of Attorney was executed by the Company as a Deed on [date].]

EXECUTED as a DEED by	)
[name of Company]	)
acting by two directors or one director	)
and the company secretary	)
Director:
Director/Secretary:

91

SCHEDULE 8
FORM OF COMPLIANCE CERTIFICATE

To:HSH Nordbank AG

Gerhart-Hauptmann-Platz 50

D-20095 Hamburg

Germany

[l] 201[l]

Dear Sirs,

We refer to a loan agreement dated [l] 2014 (the "Loan Agreement") made between (amongst others) yourselves and us, Alcyone International Marine Inc., Neptune International Shipping and Trading S.A. and Paloma Marine S.A., as joint and several borrowers in relation to a term loan facility of up to $47,000,000.

Words and expressions defined in the Loan Agreement shall have the same meaning when used in this compliance certificate.

The Borrowers and the Corporate Guarantor represent that no Event of Default or Potential Event of Default has occurred as at the date of this certificate [except for the following matter or event [set out all material details of matter or event]].  In addition as of [l], the Borrowers and the Corporate Guarantor confirm compliance with the minimum liquidity requirements set out in Clause 11.17 and the security cover ratio set out in Clause 15.1, of the Loan Agreement for the 6-month period ending on the date of this certificate

We now certify that, as at [l]:

(a) the aggregate of the Liquidity Amount standing to the credit of the Liquidity Account is $[l]; and

(b) the ratio set out in Clause 15.1 is at [l] per cent.

This certificate shall be governed by, and construed in accordance with, English law.

Chief Financial Officer	Director
PARAGON SHIPPING INC.	ALCYONE INTERNATIONAL MARINE INC.
Director	Director
NEPTUNE INTERNATIONAL SHIPPING AND TRADING S.A.	PALOMA MARINE S.A.

92

EXECUTION PAGES

BORROWERS
SIGNED by Maria Stefanou		)	/s/ Maria Stefanou
		)
for and on behalf of		)
ALCYONE INTERNATIONAL MARINE INC.		)
in the presence of:	Pat Skala Watson, Farley & Williams 348 Syngrou Avenue 176 74 Kallithea Athens-Greece	)	/s/ Pat Skala
SIGNED by Maria Stefanou		)	/s/ Maria Stefanou
		)
for and on behalf of		)
NEPTUNE INTERNATIONAL SHIPPING AND TRADING S.A.		)
in the presence of:	Pat Skala Watson, Farley & Williams 348 Syngrou Avenue 176 74 Kallithea Athens-Greece	)	/s/ Pat Skala
SIGNED by Maria Stefanou		)	/s/ Maria Stefanou
		)
for and on behalf of		)
PALOMA MARINE S.A.		)
in the presence of:	Pat Skala Watson, Farley & Williams 348 Syngrou Avenue 176 74 Kallithea Athens-Greece	)	/s/ Pat Skala
LENDERS
SIGNED by Jennifer Mary Greengrass		)	/s/ Jennifer Mary Greengrass
for and on behalf of		)
HSH NORDBANK AG		)
		)
in the presence of:	Pat Skala Watson, Farley & Williams 348 Syngrou Avenue 176 74 Kallithea Athens-Greece	)	/s/ Pat Skala

93

SWAP BANK
SIGNED by Jennifer Mary Greengrass		)	/s/Jennifer Mary Greengrass
		)
for and on behalf of		)
HSH NORDBANK AG		)
in the presence of:	Pat Skala Watson, Farley & Williams 348 Syngrou Avenue 176 74 Kallithea Athens-Greece	)	/s/ Pat Skala
AGENT
SIGNED by Jennifer Mary Greengrass		)	/s/Jennifer Mary Greengrass
		)
for and on behalf of		)
HSH NORDBANK AG		)
in the presence of:	Pat Skala Watson, Farley & Williams 348 Syngrou Avenue 176 74 Kallithea Athens-Greece	)	/s/ Pat Skala
MANDATED LEAD ARRANGER
SIGNED by Jennifer Mary Greengrass		)	/s/Jennifer Mary Greengrass
		)
for and on behalf of		)
HSH NORDBANK AG		)
in the presence of:	Pat Skala Watson, Farley & Williams 348 Syngrou Avenue 176 74 Kallithea Athens-Greece	)	/s/ Pat Skala
SECURITY TRUSTEE
SIGNED by Jennifer Mary Greengrass		)	/s/Jennifer Mary Greengrass
		)
for and on behalf of		)
HSH NORDBANK AG		)
in the presence of:	Pat Skala Watson, Farley & Williams 348 Syngrou Avenue 176 74 Kallithea Athens-Greece	)	/s/ Pat Skala

94

EX-4.70

Execution version

Exhibit 4.70

Dated 6 May 2014

PARAGON SHIPPING INC.

as Borrower

and

THE BANKS AND FINANCIAL INSTITUTIONS listed in Schedule 1 Part A

as Lenders

and

THE BANKS AND FINANCIAL INSTITUTIONS Listed in Schedule 1 Part B

as Lead Arrangers and Swap Banks

and

NORDEA BANK FINLAND PLC London Branch

as Agent, Bookrunner and as Security Trustee

LOAN AGREEMENT

relating toa US$160,000,000 facility to finance and/or refinancetwo Kamsarmax bulk carriers, four Handysize bulk carriers, two Panamax bulk carriers and two Ultramax bulk carriers

Watson, Farley & Williams

Index

Clause		Page
1	Interpretation	1
2	Facility	23
3	Position of the Lenders and swap banks	23
4	Drawdown	24
5	Interest	26
6	Interest Periods	28
7	Default Interest	29
8	Repayment and Prepayment	30
9	Conditions Precedent	33
10	Representations and Warranties	34
11	General Undertakings	38
12	Corporate Undertakings	42
13	Insurance	45
14	Ship Covenants	50
15	Security Cover	54
16	Payments and Calculations	56
17	Application of Receipts	58
18	Application of Earnings	59
19	Events of Default	59
20	Fees and Expenses	64
21	Indemnities	66
22	No Set-Off or Tax Deduction	68
23	Illegality, etc	70
24	Increased Costs	71
25	Set-Off	72
26	Transfers and Changes in Lending Offices	73
27	Variations and Waivers	79
28	Notices	80
29	Supplemental	82
30	Law and Jurisdiction	83
Schedules
Schedule 1		85
	Part A Lenders and Commitments	85
	Part B Lead Arrangers and Swap banks	86
Schedule 2 Drawdown Notice		87
Schedule 3 Condition Precedent Documents		88
	Part A	88
	Part B	89
	Part C	91
Schedule 4 Transfer Certificate		93
Schedule 5 Ships, Owners, Accounts, Classification and Approved Flag Details		97
Schedule 6 Form of Compliance Certificate		1
Schedule 7 Designation Notice		3
Execution
Execution Pages		4

THIS AGREEMENT is made onMay

PARTIES

(1) PARAGON SHIPPING INC., a corporation incorporated in the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 (the "Borrower")

(2) THE BANKS AND FINANCIAL INSTITUTIONS a listed in Part A of Schedule 1, as "Lenders"

(3) THE BANKS AND FINANCIAL INSTITUTIONS listed in Part B of Schedule 1, as "Lead Arrangers"

(4) THE BANKS AND FINANCIAL INSTITUTIONS listed in Part B of Schedule 1, as "Swap Banks"

(5) NORDEA BANK FINLAND PLC, London Branch, as "Agent"

(6) NORDEA BANK FINLAND PLC, London Branch, as "Bookrunner"

(7) NORDEA BANK FINLAND PLC, London Branch, as "Security Trustee"

BACKGROUND

(A) The Lenders have agreed to make available to the Borrower a facility of up to $160,000,000 for the purpose of:

(i) financing sixty per cent. (60%) of the fair market value at delivery of two Ultramax bulk carriers type vessels which are to be constructed by Builder A for, and purchased by, the relevant Owners listed in Schedule 5 (Ships, Owners, Accounts, Classification and Approved Flag Details);

(ii) financing sixty per cent. (60%) of the fair market value at delivery of two Kamsarmax bulk carriers which are to be constructed by Builder B for, and purchased by the relevant Owners listed in Schedule 5 (Ships, Owners, Accounts, Classification and Approved Flag Details);

(iii) to refinance the Existing Indebtedness in respect of the Existing Ships; and

(iv) for the general corporate and working capital purposes of the Borrower and its subsidiaries.

(B) The Lenders have agreed that, subject to the terms of this Agreement, the Swap Banks may enter into interest rate swap transactions with the Borrower from time to time to hedge the Borrower's exposure under this Agreement to interest rates fluctuations.

(C) The Lenders have agreed to share with the Swap Banks the security to be granted to the Security Trustee pursuant to this Agreement on the terms described herein.

OPERATIVE PROVISIONS

1 Interpretation

1.1 Definitions

Subject to Clause 1.5 (General Interpretation), in this Agreement:

"Accounts Security Deed" means a deed creating security in respect of each Earnings Account to be executed by each Owner in favour of the Security Trustee in the Agreed Form.

"Advance" means the principal amount of each borrowing by the Borrower under this Agreement.

"Advance Drawdown Amount" means the amount of the loan available in respect of each Newbuilding as specified in Schedule 5 (Ships, Owners, Accounts, Classification and Approved Flag Details).

"Affected Lender" has the meaning given in Clause 5.7 (Market disruption).

"Agency and Trust Agreement" means the agency and trust agreement dated the same date as this Agreement and made between the same parties.

"Agent" means Nordea Bank Finland Plc, London Branch acting in such capacity through its office at City Place House, 55 Basinghall Street, London EC2V 5NB, or any successor of it appointed under clause 5 of the Agency and Trust Agreement.

"Agreed Form" means in relation to any document, that document in the form approved in writing by the Agent (acting on the instructions of all of the Lenders) and the Borrower or as otherwise approved in accordance with any other approval procedure specified in any relevant provision of any Finance Document.

"Applicable Accounts" means, as at the date of calculation or, as the case may be, in respect of an accounting period, the annual audited consolidated accounts and financial statements of the Group or the quarterly unaudited accounts and financial statements of the Group, in each case, which the Borrower is obliged to deliver to the Agent pursuant to Clause 11.6 (Provision of financial statements).

"Approved Broker" means any one of Clarkson (London), Braemar Seascope (London), Fearnleys (Oslo), Howe Robinson (London), R.S. Platou Shipbrokers (Oslo) and Maersk Brokers (Copenhagen) or such other broker nominated by the Borrower and consented to by the Agent acting on the instructions of the Majority Lenders (such consent not to be unreasonably withheld or delayed).

"Approved Charter" means any time charterparty in respect of a Ship of a duration (or capable of being or exceeding a duration whether for a fixed period or by option for extension) of 24 months or more.

"Approved Charter Assignment" means, in relation to an Approved Charter, a specific deed of assignment of the rights of the relevant Owner in respect of that Approved Charter, in the Agreed Form and in the plural means any or all of them.

"Approved Flag" means Liberian, the Marshall Islands, Panamanian or Maltese or such flag as the Agent may on the instructions of the Majority Lenders in their sole and absolute discretion, at the request of the Borrower, approve as the flag on which a Ship shall be registered.

"Approved Flag State" means Liberia, the Marshall Islands, Panama or Malta or any other country in which the Agent may, on the instructions of all the Lenders in their sole and absolute discretion, at the request of the Borrower, approve that a Ship be registered.

"Approved Manager" means Allseas Marine S.A., a corporation organised and existing under the laws of the Republic of Liberia, having its registered office at 80 Broad Street, Monrovia, Liberia and maintaining an office at 15 Karamanli Street, 166 73 Voula, Greece or any other company which the Agent may, with the authorisation of the Majority Lenders, approve from time to time as the technical and/or commercial manager of a Ship.

"Approved Management Agreement" means, in relation to a Ship, an agreement in relation to the technical and/or commercial management of that Ship entered

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into or to be entered into by the Approved Manager and the relevant Owner on such terms which the Agent may, on the instructions of all the Lenders in their sole and absolute discretion approve and in the plural means any or all of them.

"Approved Manager's Undertaking" means, in relation to a Ship, a letter of undertaking executed or to be executed by the Approved Manager in favour of the Agent, agreeing certain matters in relation to the Approved Manager of that Ship and subordinating its rights against such Ship and the relevant Owner to the rights of the Creditors Parties under the Finance Documents, in the Agreed Form and in the plural means any or all of them.

"Availability Period" means the period commencing on the date of this Agreement and ending on:

(a) in the case of the Term Loan, the date falling 90 days after the Closing Date (or such later date as the Agent may, with the authorisation of all of the Lenders, agree with the Borrower);

(b) in the case of each Newbuilding Loan, the earlier of (i) the Delivery Date for the relevant Newbuilding and (ii) 30 March 2016; or

(c) if earlier, the date on which the Total Commitments are fully borrowed, cancelled or terminated.

"Balloon Amount" means the aggregate principal amount of each Advance under either the Term Loan and/or each Newbuilding Loan (as the case may be) which is outstanding on the Final Repayment Date.

"Basel III" means, together:

(a) the agreements on capital requirements, a leverage ratio and liquidity standards contained in "Basel III: A global regulatory framework for more resilient banks and banking systems", "Basel III: International framework for liquidity risk measurement, standards and monitoring" and "Guidance for national authorities operating the countercyclical capital buffer" published by the Basel Committee on Banking Supervision in December 2010, each as amended, supplemented or restated;

(b) the rules for global systemically important banks contained in "Global systemically important banks: assessment methodology and the additional loss absorbency requirement - Rules text" published by the Basel Committee on Banking Supervision in November 2011, as amended, supplemented or restated; and

any further guidance or standards published by the Basel Committee on Banking Supervision relating to "Basel III".

"Bodouroglou Family" means, together, each of the following:

(a) Mr. Michael Bodouroglou;

(b) all the lineal descendants in direct line of Mr. Michael Bodouroglou;

(c) a husband or wife, or former husband or wife, or widower or widow of any of the above persons;

(d) the estates, trusts or legal representatives of which any of the above persons are the beneficiaries; and

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(e) each company (other than a member of the Borrower's Group) legally or beneficially owned or (as the case may be) controlled by one or more of the persons or entities which would fall within paragraphs (a) to (d) of this definition,

and each one of the above shall be referred to as "a member of the Bodouroglou Family".

"Bookrunner" means Nordea Bank Finland Plc, London Branch acting in such capacity through its office at City Place House, 55 Basinghall Street, London EC2V 5NB.

"Break Costs" means the amount (if any) by which:

(a) the interest which a Lender should have received for the period from the date of receipt of all or any part of its participation in an Advance to the last day of the current Interest Period in respect of such Advance, had the principal amount received been paid on the last day of that Interest Period; exceeds

(b) the amount which that Lender would be able to obtain by placing an amount equal to the principal amount received by it on deposit with a leading bank in the Interbank Market for a period starting on the Business Day following receipt or recovery and ending on the last day of the current Interest Period.

"Builder" means either Builder A or Builder B as the case may be and in the plural means both of them.

"Builder A" means Yangzhou Dayang Shipbuilding Co. Ltd., a company incorporated in the People's Republic of China whose registered office is at Lidian Town, Hanjiang District, Yangzhou City, Jiangsu Province 225006, the People's Republic of China.

"Builder B" means, together:

(a) Jiangsu Tianchen Marine Import & Export Co., Ltd. a company incorporated in the People's Republic of China whose registered office is at Room 602, No. 260 Furong Road, Jiangyin City, Jiangsu Province, the People's Republic of China; and

(b) acting collectively as the shipbuilder:

(i) Jiangsu New Yangzi Shipbuilding Co., Ltd. a company incorporated in the People's Republic of China whose registered office is at 1# Lianyi Road, Jiangyin-Jingjiang Industry Zone, Jiangyin City, Jiangsu Province, 214532, the People's Republic of China; and

(ii) Jiangsu Yangzijiang Shipbuilding Co. Ltd., a company incorporated in the People's Republic of China whose registered office is at 38 Shiyugang Road, Jiangyin City, Jiangsu Province, 214431, the People's Republic of China.

"Business Day" means a day on which banks are open in London and, in respect of a day on which a payment is required to be made under a Finance Document, also in Amsterdam, in Frankfurt and in New York City.

"Cash" means the aggregate of:

(a) cash in hand legally and beneficially owned by the Borrower; and

(b) cash deposits legally and beneficially owned by the Borrower, and which are deposited with:

(i) the Lenders;

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(ii) any other deposit taking institution having a rating of at least A from Standard & Poor's Rating Group Services or the equivalent with any other principal credit rating agency in the United States of America or Europe; or

(iii) any other bank or financial institution approved by the Agent (on behalf of the Majority Lenders),

which in each case:

(A) is free from any Security Interest, other than pursuant to the Finance Documents;

(B) is otherwise at the free and unrestricted disposal of the Borrower;

(C) in the case of cash in hand or cash deposits held by the Borrower which is (in the opinion of the Agent, upon such documents and evidence as the Agent may require the Borrower to provide in order to form the basis of such opinion) capable or, upon the occurrence of an Event of Default, would become capable of being paid without restriction to the Borrower within five (5) Business Days of its request or demand therefore either by way of a dividend or by way of a repayment of principal (or the payment of interest thereon) in respect of an intercompany loan from the Borrower to that subsidiary.

"Cash Equivalent" means at any time:

(a) any investment in marketable debt obligations issued or guaranteed by:

(i) a government; or

(ii) an instrumentality or agency of a government,

and in respect of (i) and (ii) having a credit rating of either A or higher by Standard & Poor's Rating Group Services or the equivalent with any other principal credit rating agency in the United States of America or Europe, maturing within one year after the relevant date of calculation and not convertible or exchangeable to any other security;

(b) commercial paper (debt obligations) not convertible or exchangeable to any other security:

(i) for which a recognised trading market exists;

(ii) issued by an issuer incorporated in the United States of America, the United Kingdom;

(iii) which matures within one year after the relevant date of calculation; and

(iv) which has a credit rating of at least A or higher by Standard & Poor's Rating Group Services or the equivalent with any other principal credit rating agency in the United States of America or Europe;

(c) any investment in money market funds which:

(i) have a credit rating of either A or higher by Standard & Poor's Rating Group Services or the equivalent with any other principal credit rating agency in the United States of America or Europe;

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(ii) invest substantially all their assets in securities of the types described in paragraphs (a) to (b) above; and

(iii) can be turned into cash on not more than 5 days' notice; or

(d) any other debt security approved by the Agent (on behalf of the Majority Lenders), in each case, to which any member of the Group is alone (or together with other members of the Group) beneficially entitled at that time and which is not issued or guaranteed by any member of Group or subject to any Security Interest.

"Change of Control" means if two or more persons acting in concert or any individual person (other than the Bodouroglou Family) either (i) acquires legally or beneficially and either directly or indirectly an ownership interest and/or voting rights in excess of 50% of the issued share capital of the Borrower and/or (ii) has the right to ability to control, either directly or indirectly, the affairs or composition of the majority of the board of directors (or the equivalent of it) of the Borrower.

"Closing Date" means the date of this Agreement.

"Code" means the United States Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated and rulings issued thereunder.

"Commitment" means, in relation to a Lender, the amount set opposite its name in Part Part A of Schedule 1, or, as the case may require, the amount specified in the relevant Transfer Certificate, as that amount may be reduced, cancelled or terminated in accordance with this Agreement (and "Total Commitments" means the aggregate of the Commitments of all the Lenders).

"Compliance Certificate" means a certificate substantially in the form set out in Schedule 6 (Form of Compliance Certificate).

"Confirmation" and "Early Termination Date", in relation to any continuing Transaction, have the meanings given in the Master Agreement.

"Contract Price" means, in relation to each Newbuilding, the purchase price payable by the relevant Owner to the relevant Builder pursuant to the relevant Shipbuilding Contract in respect of that Newbuilding being at the date of this Agreement as set out in Schedule 5 (Ships, Owners, Accounts, Classification and Approved Flag Details).

"Contractual Currency" has the meaning given in Clause 21.4 (Currency indemnity).

"Contribution" means, in relation to a Lender, the part of the Loan which is owing to that Lender (and "Total Contributions" means the aggregate of the Contributions of all the Lenders).

"Creditor Party" means the Agent, the Security Trustee, the Lead Arrangers, the Bookrunner, any Lender and/or the Swap Banks, whether as at the date of this Agreement or at any later time.

"Deed of Release" means each deed releasing the relevant Existing Security in a form acceptable to the Agent and in the plural means both of them.

"Default" means an event or circumstance which, with the giving of any notice, the lapse of time, a determination of the Majority Lenders and/or the satisfaction of any other condition, would constitute an Event of Default.

"Defaulting Lender" means any Lender:

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(a) which has failed to make available the relevant proportion of its Commitment in respect of any Advance or has given notice to the Agent that it will not make such amount available by the relevant Drawdown Date pursuant to Clause 4.3 (Notification to Lenders of receipt of a Drawdown Notice); or

(b) which has otherwise rescinded or repudiated a Finance Document; or

(c) with respect to which an Insolvency Event has occurred and is continuing,

unless, in the case of paragraph (a) above:

(i) its failure to pay is caused by:

(A) administrative or technical error; or

(B) a Disruption Event; and

payment is made within 5 Business Days of its due date; or

(ii) the Lender is disputing in good faith whether it is contractually obliged to make the relevant payment.

"Delivery Date" means, in relation to a Newbuilding, the date on which that Newbuilding is delivered to, and accepted by, the relevant Owner under the Shipbuilding Contract for that Newbuilding.

"Designated Transaction" means a Transaction which fulfils the following requirements:

(a) it is entered into by the Borrower pursuant to the Master Agreement with a Swap Bank;

(b) its purpose is the hedging of all or part of the Borrower's exposure under this Agreement to fluctuations in LIBOR arising from the funding of the Loan, or any part of it for a period expiring no later than the Final Repayment Date; and

(c) it is designated by the Borrower, by delivery by the Borrower to the Agent of a notice of designation substantially in the form set out in Schedule 7 (Designation Notice), as a Designated Transaction for the purposes of the Finance Documents.

"Disruption Event" means either or both of:

(a) a material disruption to those payment or communications systems or to those financial markets which are, in each case, required to operate in order for payments to be made in connection with the Loan (or otherwise in order for the transactions contemplated by the Finance Documents to be carried out) which disruption is not caused by, and is beyond the control of, a party to this Agreement (a "Party"); or

(b) the occurrence of any other event which results in a disruption (of a technical or systems-related nature) to the treasury or payments operations of a Party preventing that, or any other, Party:

(i) from performing its payment obligations under the Finance Documents; or

(ii) from communicating with other parties in accordance with the terms of the Finance Documents,

and which (in each case) is not caused by, and is beyond the control of, the Party whose operations are disrupted.

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"Dollars" and "$" means the lawful currency for the time being of the United States of America.

"Drawdown Date" means, in relation to an Advance, the date requested by the Borrower for the Advance to be made, or (as the context requires) the date on which the Advance is actually made.

"Drawdown Notice" means a notice in the form set out in Schedule 2 (Drawdown Notice) (or in any other form which the Agent approves or reasonably requires).

"Earnings" means all moneys whatsoever which are now, or later become, payable (actually or contingently) to the relevant Owner or the Security Trustee and which arise out of the use or operation of the Ship, including (but not limited to):

(a) except to the extent that they fall within paragraph (b):

(i) all freight, hire and passage moneys;

(ii) compensation payable to the relevant Owner or the Security Trustee in the event of requisition of the Ship for hire;

(iii) remuneration for salvage and towage services;

(iv) demurrage and detention moneys;

(v) damages for breach (or payments for variation or termination) of any charterparty or other contract for the employment of the Ship; and

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

(b) if and whenever the Ship is employed on terms whereby any moneys falling within paragraphs (a)(i) to (vi) are pooled or shared with any other person, that proportion of the net receipts of the relevant pooling or sharing arrangement which is attributable to the Ship.

"Earnings Account" means an account in the name of the Borrower with the Agent in London with the number 0045431301 and an account in the name of each Owner with the Agent in London with the account number specified in Schedule 5 (Ships, Owners, Accounts, Classification and Approved Flag Details), or any other account which is designated by the Agent as an Earnings Account for the purposes of this Agreement and in the plural means any or all of them.

"Environmental Claim" means:

(a) any claim by any governmental, judicial or regulatory authority which arises out of an Environmental Incident or an alleged Environmental Incident or which relates to any Environmental Law; or

(b) any claim by any other person which relates to an Environmental Incident or to an alleged Environmental Incident,

and "claim" means a claim for damages, compensation, fines, penalties or any other payment of any kind whether or not similar to the foregoing; an order or direction to take, or not to take, certain action or to desist from or suspend certain action; and any form of enforcement or regulatory action, including the arrest or attachment of any asset.

"Environmental Incident" means:

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

(b) any incident in which Environmentally Sensitive Material is released from a vessel other than a Ship as a result of a collision between a Ship and such other vessel or some other incident of navigation or operation, in either case, in connection with which a Ship is actually or potentially liable to be arrested, attached, detained or injuncted and/or any Ship and/or the Borrower and/or any Owner and/or the Approved Manager and/or any operator or manager of the Ship is at fault or allegedly at fault or otherwise liable to any legal or administrative action; or

(c) any other incident in which Environmentally Sensitive Material is released otherwise than from a Ship and in connection with which a Ship is actually or potentially liable to be arrested and/or where the Borrower and/or any Owner and/or the Approved Manager and/or any operator or manager of a Ship is at fault or allegedly at fault or otherwise liable to any legal or administrative action.

"Environmental Law" means any law relating to pollution or protection of the environment, to the carriage of Environmentally Sensitive Material or to actual or threatened releases of Environmentally Sensitive Material.

"Environmentally Sensitive Material" means oil, oil products and any other substance (including any chemical, gas or other hazardous or noxious substance) which is (or is capable of being or becoming) polluting, toxic or hazardous.

"ERISA" means the United States Employee Retirement Income Security Act of 1974, as amended, and the regulations promulgated and rulings issued thereunder.

"ERISA Affiliate" means a trade or business (whether or not incorporated) that, together with the Borrower or any subsidiary of it, would be deemed to be a single employer under Section 414 of the Code.

"Event of Default" means any of the events or circumstances described in Clause 19.1 (Events of Default) and is "continuing" if it has not been remedied or waived.

"Existing Facility" means each of the following vessel financings which are both in existence at the date of this Agreement and to which the Borrower is a party:

(a) the $89,515,100 term loan facility to finance the PRECIOUS SEAS, PROSPEROUS SEAS, PRICELESS SEAS and PROUD SEAS made available to the Borrower pursuant to a loan agreement dated 5 May 2011 made between the Borrower as borrower, the lenders party thereto and Nordea Bank Finland Plc as agent, bookrunner and security trustee; and

(b) the $89,000,000 term loan facility to finance the CORAL SEAS and the GOLDEN SEAS made available pursuant to a loan agreement dated 4 December 2007 made between the Borrower as borrower, the lenders party thereto and Bank of Scotland plc as agent, arranger and security trustee,

and in the plural means both of them.

"Existing Facility Agent" means each "Agent" as such term is defined in each Existing Facility and in the plural means both of them.

"Existing Indebtedness" means, at any date, the aggregate outstanding Financial Indebtedness

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of the Borrower on that date under the Existing Facilities.

"Existing Security" means any Security Interest created to secure the Existing Indebtedness.

"Existing Ship" means each vessel listed in items 1 to 6 of Schedule 5 (Ships, Owners, Accounts, Classification and Approved Flag Details) which is registered in the name of the relevant Owner under an Approved Flag and secures an Existing Facility and in the plural means any or all of them.

"FATCA" means

(a) sections 1471 to 1474 of the Code or any associated regulations or other official guidance;

(b) any treaty, law, regulation or other official guidance enacted in any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction, which (in either case) facilitates the implementation of paragraph (a) above; or

(c) any agreement pursuant to the implementation of paragraphs (a) or (b) above with the US Internal Revenue Service, the US government or any governmental or taxation authority in any other jurisdiction.

"FATCA Application Date" means:

(a) in relation to a "withholdable payment" described in section 1473(1)(A)(i) of the Code (which relates to payments of interest and certain other payments from sources within the US), 1 July 2014;

(b) in relation to a "withholdable payment"  described in section 1473(1)(A)(ii) of the Code (which relates to "gross proceeds" from the disposition of property of a type that can produce interest from sources within the US), 1 January 2017; or

(c) in relation to a "passthru payment" described in section 1471(d)(7) of the Code not falling within paragraphs (a) or (b) above, 1 January 2017,

or, in each case, such other date from which such payment may become subject to a deduction or withholding required by FATCA as a result of any change in FATCA after the date of this Agreement.

"FATCA Deduction" means a deduction or withholding from a payment under a Finance Document required by or under FATCA.

"FATCA Exempt Party" means a party to a Finance Document that is entitled to receive payments free from any FATCA Deduction.

"FATCA FFI" means a foreign financial institution as defined in section 1471(d)(4) of the Code which could be required to make a FATCA Deduction.

"FATCA Non-Exempt Lender" means any Lender who is not a FATCA Exempt Party.

"FATCA Protected Lender"means any Lender irrevocably designated as a "FATCA Protected Lender" by the Borrower by notice to that Lender and the Agent as least six months prior to the earliest FATCA Application Date for a payment by a Party to that Lender (or to the Agent for the account of that Lender).

"Final Repayment Date" means the date falling on the sixth anniversary of the date of the Closing Date.

"Finance Documents" means:

(a) this Agreement;

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(b) the Agency and Trust Agreement;

(c) the Guarantees;

(d) the Master Agreement Assignments;

(e) the General Assignments;

(f) the Mortgages;

(g) the Accounts Security Deeds;

(h) any Approved Charter Assignment;

(i) the Approved Manager's Undertakings;

(j) the Shares Pledges; and

(k) any other document (whether creating a Security Interest or not) which is executed at any time by the Borrower or any Owner or any other person as security for, or to establish any form of subordination or priorities arrangement in relation to, any amount payable to the Lenders and/or the Swap Banks under this Agreement or the Master Agreements or any of the other documents referred to in this definition.

"Financial Indebtedness" means, in relation to a person (the "debtor"), a liability of the debtor:

(a) for principal, interest or any other sum payable in respect of any moneys borrowed or raised by the debtor;

(b) under any loan stock, bond, note or other security issued by the debtor;

(c) under any acceptance credit, guarantee or letter of credit facility or dematerialised equivalent made available to the debtor;

(d) under a financial lease, a deferred purchase consideration arrangement or any other agreement having the commercial effect of a borrowing or raising of money by the debtor;

(e) under any foreign exchange transaction, any interest or currency swap or any other kind of derivative transaction entered into by the debtor or, if the agreement under which any such transaction is entered into requires netting of mutual liabilities, the liability of the debtor for the net amount; or

(f) under a guarantee, indemnity or similar obligation entered into by the debtor in respect of a liability of another person which would fall within paragraphs (a) to (e) if the references to the debtor referred to the other person.

"Financial Year" means, in relation to the Group, each period of 1 year commencing on 1 January and ending on 31 December (inclusive) in respect of which its consolidated accounts are or ought to be prepared.

"Fleet Vessels" means all of the vessels from time to time wholly owned by members of the Group (each a "Fleet Vessel").

"Foreign Pension Plan" means any plan, fund (including without limitation, any superannuation fund) or other similar program established or maintained outside the United States of America by the Borrower or any one or more of its subsidiaries primarily for the

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benefit of its or their employees residing outside the United States of America, which plan, fund or other similar program provides, or results in, retirement income, a deferral of income in contemplation of retirement or payments to be made upon termination of employment, and which plan is not subject to ERISA or the Code.

"GAAP" means generally accepted accounting principles as from time to time in effect in the United States of America.

"General Assignment" means, in relation to a Ship, a general assignment of the Earnings, the Insurances, any Requisition Compensation and the rights of the relevant Owner under the relevant Approved Management Agreement in respect of that Ship to be executed by the relevant Owner in favour of the Security Trustee in the Agreed Form and in the plural means any or all of them.

"Group" means the Borrower and its subsidiaries from time to time during the Security Period and "member of the Group" shall be construed accordingly.

"Guarantee" means, in relation to an Owner, an on-demand guarantee in the Agreed Form to be given by that Owner in favour of the Security Trustee, irrevocably and unconditionally guaranteeing the obligations of the Borrower under this Agreement, the other Finance Documents and the Master Agreements and, in the plural, means any or all of them.

"IACS" means the International Association of Classification Societies or any successor organisation.

"Insolvency Event" in relation to a Lender means that Lender:

(a) is dissolved (other than pursuant to a consolidation, amalgamation or merger);

(b) becomes insolvent or is unable to pay its debts or fails or admits in writing its inability generally to pay its debts as they become due;

(c) makes a general assignment, arrangement, or composition with or for the benefit of its creditors;

(d) institutes or has instituted against it, by a regulator, supervisor or any similar official with primary insolvency, rehabilitative or regulatory jurisdiction over it in the jurisdiction of its incorporation or organisation or the jurisdiction of its head or home office, a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors' rights, or a petition is presented for its winding-up or liquidation by it or such regulator, supervisor or similar official;

(e) has instituted against it a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors' rights, or a petition is presented for its winding-up or liquidation, and, in the case of any such proceeding or petition instituted or presented against it, such proceeding or petition is instituted or presented by a person or entity not described in paragraph (d) above and:

(i) results in a judgment of insolvency or bankruptcy or the entry of an order for relief or the making of an order for its winding-up or liquidation; or

(ii) is not dismissed, discharged, stayed or restrained in each case within 30 days of the institution or presentation thereof;

(f) has a resolution passed for its winding-up, official management or liquidation (other than pursuant to a consolidation, amalgamation or merger);

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(g) seeks or becomes subject to the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official for it or for all or substantially all its assets (other than, for so long as it is required by law or regulation not to be publicly disclosed, any such appointment which is to be made, or is made, by a person or entity described in paragraph (d) above);

(h) has a secured party take possession of all or substantially all its assets or has a distress, execution, attachment, sequestration or other legal process levied, enforced or sued on or against all or substantially all its assets and such secured party maintains possession, or any such process is not dismissed, discharged, stayed or restrained, in each case within 30 days thereafter;

(i) causes or is subject to any event with respect to it which, under the applicable laws of any jurisdiction, has an analogous effect to any of the events specified in paragraphs (a) to (h) above; or

(j) takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the foregoing acts.

"Insurances" means in relation to a Ship:

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

(b) all rights and other assets relating to, or derived from, any of the foregoing, including any rights to a return of a premium and any rights in respect of any claim whether or not the relevant policy, contract of insurance or entry has expired before the date of this Agreement.

"Interest Period" means a period determined in accordance with Clause 6 (Interest Periods).

"ISM Code" means the International Safety Management Code (including the guidelines on its implementation), adopted by the International Maritime Organisation, as the same may be amended or supplemented from time to time (and the terms "safety management system", "Safety Management Certificate" and "Document of Compliance" have the same meanings as are given to them in the ISM Code).

"ISPS Code" means the International Ship and Port Facility Security Code as adopted by the International Maritime Organisation, as the same may be amended or supplemented from time to time.

"ISSC" means a valid and current International Ship Security Certificate issued under the ISPS Code.

"Lead Arranger" means a bank or financial institution listed in Part B of Schedule 1.

"Lender" means a bank or financial institution listed in Part A of Schedule 1 acting through its branch indicated in Part A of Schedule 1 (or through another branch notified to the Borrower under Clause 26.14 (Change of lending office)) or its permitted transferee, successor or assign.

"LIBOR" means, for an Interest Period:

(a) the rate per annum equal to the offered quotation for deposits in Dollars for a period equal to, or as near as possible equal to, the relevant Interest Period which appears on Reuters Page Libor 01 at or about 11.00 a.m. (London time) on the

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Quotation Date for that Interest Period (and, for the purposes of this Agreement, "Reuters Page Libor 01" means the display designated as "Page Libor 01" on the Reuters Service or such other page as may replace Page Libor 01 on that service for the purpose of displaying rates comparable to that rate or on such other service as may be nominated by ICE Benchmark Administration Limited for the purpose of displaying ICE Benchmark Administration Limited Settlement Rates for Dollars); or

(b) if no rate is quoted on Reuters Page Libor 01, the rate per annum determined by the Agent to be the arithmetic mean (rounded upwards, if necessary, to the nearest one‑sixteenth of one per cent.) of the rates per annum notified to the Agent by each Reference Bank as the rate at which deposits in Dollars are offered to that Reference Bank by leading banks in the London Interbank Market at that Reference Bank's request at or about 11.00 a.m. (London time) on the Quotation Date for that Interest Period for a period equal to that Interest Period and for delivery on the first Business Day of it,

and if any such rate is below zero, LIBOR will be deemed to be zero.  References above to ICE Benchmark Administration Limited shall be construed to include any other person who takes over the administration of the London interbank offered rate.

"Loan" means the principal amount for the time being outstanding under this Agreement.

"Major Casualty" means any casualty to the Ship in respect of which the claim or the aggregate of the claims against all insurers, after adjustment for any relevant franchise or deductible exceeds $1,000,000 or the equivalent in any other currency.

"Majority Lenders" means:

(a) before an Advance has been made, Lenders the aggregate of whose Commitments total at least 66²/₃ per cent. of the Total Commitments; and

(b) after an Advance has been made, Lenders the aggregate of whose Contributions total at least 66²/₃ per cent. of the Total Contributions.

"Margin" means three point two zero per cent. (3.20%) per annum.

"Margin Stock" has the meaning specified in Regulation U of the Board of Governors of the United States Federal Reserve System and any successor regulations thereto, as in effect from time to time.

"Market Value" means, in respect of each Ship and each other Fleet Vessel, the market value thereof determined from time to time in accordance with Clause 15.3 (Valuation of Ship).

"Master Agreement" means any master agreement (on 2002 ISDA (Multicurrency - Crossborder) form) made or to be made between the Borrower and a Swap Bank and includes all Transactions from time to time entered into and Confirmations from time to time exchanged thereunder and in the plural means any or all of them.

"Master Agreement Assignment" means, in relation to each Master Agreement, the assignment of that Master Agreement executed or to be executed by the Borrower in favour of the Security Trustee, in Agreed Form and in the plural means any or all of them.

"Material Adverse Effect" means, in the opinion of the Majority Lenders, a material adverse effect on:

(a) the business, assets, nature of assets, operations, property, liabilities, condition or prospects (financial or otherwise) of the Group; or

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(b) the ability of an Obligor to perform its obligations under any Master Agreement or any of the Finance Documents to which it is a party; or

(c) the validity or enforceability of, or the effectiveness or ranking of any Security Interest granted or purporting to be granted pursuant to any of, the Finance Documents or any Master Agreement or the rights or remedies of any Finance Party under any of the Finance Documents or any Master Agreement.

"Mortgage" means, in relation to a Ship, the first preferred ship mortgage on that Ship under the applicable Approved Flag to be executed by the relevant Owner in favour of the Security Trustee in the Agreed Form, and in the plural means any or all of them.

"Multiemployer Plan" means, at any time, a "multiemployer plan" as defined in Section 4001(a)(3) of ERISA to which the Borrower or any subsidiary of it or any ERISA Affiliate has any liability or obligation to contribute or has within any of the six preceding plan years had any liability or obligation to contribute.

"Newbuilding" means each vessel listed at items 7 to 10 of Schedule 5 (Ships, Owners, Accounts, Classification and Approved Flag Details) which is to be constructed by the relevant Builder for, and purchased by, the relevant Owner under the relevant Shipbuilding Contract and upon delivery registered in the name of the relevant Owner under an Approved Flag and in the plural means any or all of them.

"Newbuilding Loan" means each part of the Loan to be made available to the Borrower to finance the lesser of (i) sixty per cent. (60%) of the Market Value of each Newbuilding at the relevant Delivery Date and (ii) an aggregate amount for all of the Newbuildings which does not exceed $78,000,000; and in the plural means all of them.

"Non-Consenting Lender" means any Lender which does not and continues not to consent or agree to a request of the Borrower or the Agent (at the request of the Borrower) to give a consent in relation to, or to agree to a waiver or amendment of, any provision of the Finance Documents which requires the approval of all of the Lenders if the Majority Lenders have consented or agreed to such waiver or amendment.

"Notifying Lender" has the meaning given in Clause 23.1 (Illegality) or Clause 24.1 (Increased costs) as the context requires.

"Obligors" means the Borrower and each Owner and, in the singular, means any of them.

"Owners" means each wholly-owned single purpose subsidiary of the Borrower, either incorporated in the Marshall Islands with its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960 or incorporated and existing in the Republic of Liberia with its registered office at 80 Broad Street, Monrovia, Liberia and listed in Schedule 5 (Ships, Owners, Accounts, Classification and Approved Flag Details), each of which is or will become, following the delivery of its Ship, the owner of that Ship (and "Owners" means any or all one of them).

"Party" means each party to this Agreement.

"Payment Currency" has the meaning given in Clause 21.4 (Currency indemnity).

"Permitted Security Interests" means:

(a) Security Interests created by the Finance Documents;

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

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(c) liens for salvage;

(d) liens arising by operation of law for not more than 2 months' prepaid hire under any charter in relation to a Ship not prohibited by this Agreement;

(e) liens for master's disbursements incurred in the ordinary course of trading and any other lien arising by operation of law or otherwise in the ordinary course of the operation, repair or maintenance of a Ship, provided such liens do not secure amounts more than 30 days overdue (unless the overdue amount is being contested by the Borrower or the relevant Owner in good faith by appropriate steps) and subject, in the case of liens for repair or maintenance, to Clause 14.13 (Restrictions on chartering, appointment of managers etc.);

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

(g) Security Interests arising by operation of law in respect of taxes which are not overdue for payment or in respect of taxes being contested in good faith by appropriate steps.

"Pertinent Document" means:

(a) any Finance Document;

(b) any policy or contract of insurance contemplated by or referred to in Clause 13 (Insurance) or any other provision of this Agreement or another Finance Document;

(c) any other document contemplated by or referred to in any Finance Document; and

(d) any document which has been or is at any time sent by or to a Servicing Bank in contemplation of or in connection with any Finance Document or any policy, contract or document falling within paragraphs (b) or (c).

"Pertinent Jurisdiction", in relation to a company, means:

(a) England and Wales;

(b) the country under the laws of which the company is incorporated or formed;

(c) a country in which the company has the centre of its main interests or in which the company's central management and control is or has recently been exercised;

(d) a country in which the overall net income of the company is subject to corporation tax, income tax or any similar tax;

(e) a country in which assets of the company (other than securities issued by, or loans to, related companies) having a substantial value are situated, in which the company maintains a branch or permanent place of business, or in which a Security Interest created by the company must or should be registered in order to ensure its validity or priority; and

(f) a country the courts of which have jurisdiction to make a winding up, administration or similar order in relation to the company, whether as main or territorial or ancillary proceedings or which would have such jurisdiction if their assistance were requested by the courts of a country referred to in paragraphs (b) or (c).

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"Pertinent Matter" means:

(a) any transaction or matter contemplated by, arising out of, or in connection with a Pertinent Document; or

(b) any statement relating to a Pertinent Document or to a transaction or matter falling within paragraph (a);

and covers any such transaction, matter or statement, whether entered into, arising or made at any time before the signing of this Agreement or on or at any time after that signing.

"Plan" means any employee benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect to which the Borrower or any subsidiary of it or ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.

"Prohibited Person" means any person (whether designated by name or by reason of being included in a class of persons) against whom Sanctions are directed.

"Quarter Date" means each of 31 March, 30 June, 30 September and 31 December in each year.

"Quotation Date" means, in relation to any period for which an interest rate is to be determined under any provision of a Finance Document, the day which is 2 Business Days before the first day of that period, unless market practice differs in the London Interbank Market for a currency, in which case the Quotation Date will be determined by the Agent in accordance with market practice in the London Interbank Market (and if quotations would normally be given by leading banks in the London Interbank Market on more than one day, the Quotation Date will be the last of those days).

"Reference Banks" means, subject to Clause 26.16 (Replacement of Reference Bank), the London branches of each of Nordea Bank Finland Plc, Skandinaviska Enskilda Banken AB (publ) and ITF International Transport Finance Suisse AG.

"Relevant Person" has the meaning given in Clause 19.9 (Relevant Persons).

"Repayment Date" means a date on which a repayment is required to be made under Clause 8 (Repayment and Prepayment).

"Requisition Compensation" includes all compensation or other moneys payable by reason of any act or event such as is referred to in paragraph (b) of the definition of "Total Loss".

"Restricted Party" means a person that:

(a) is listed on or owned or controlled by a person listed on any Sanctions List (whether designated by name or by reason of being included in a class of person);

(b) with which any Obligor or member of the Guarantor's Group is prohibited from dealing or otherwise engaging in a transaction with by any Sanctions;

(c) is directly or indirectly owned by or controlled by a person referred to in (a) and/or (b) above; or

(d) owns or controls a person referred to in (a) and/or (b) above.

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"Sanctions" means the economic or financial sanctions laws and/or regulations or trade embargoes imposed by any Sanctions Authority.

"Sanctions Authority" means the Kingdom of Norway, the United Kingdom, the United Nations, the European Union, the United States of America and any authority acting on behalf of any of them in connection with Sanctions.

"Sanctions List" means any list of persons or entities published in connection with Sanctions by or on behalf of any Sanctions Authority.

"Scheduled Delivery Date" means the delivery date in relation to each Newbuilding as specified in Schedule 5 (Ships, Owners, Accounts, Classification and Approved Flag Details) and set out in the relevant Shipbuilding Contract.

"Secured Liabilities" means all liabilities which the Borrower, the Security Parties or any of them have, at the date of this Agreement or at any later time or times, under or in connection with any Finance Document or any Master Agreement or any judgment relating to any Finance Document or any Master Agreement; and for this purpose, there shall be disregarded any total or partial discharge of these liabilities, or variation of their terms, which is effected by, or in connection with, any bankruptcy, liquidation, arrangement or other procedure under the insolvency laws of any country, Provided however that the liabilities which the Borrower, the Security Parties or any of them have at any time to the Swap Banks (or any of them) under or in connection with the Master Agreement shall as between the Creditor Parties rank in accordance with the terms set out in the Agency and Trust Agreement.

"Security Interest" means:

(a) a mortgage, charge (whether fixed or floating) or pledge, any maritime or other lien or any other security interest of any kind;

(b) the security rights of a plaintiff under an action in rem; and

(c) any arrangement entered into by a person (A) the effect of which is to place another person (B) in a position which is similar, in economic terms, to the position in which B would have been had he held a security interest over an asset of A; but this paragraph (c) does not apply to a right of set off or combination of accounts conferred by the standard terms of business of a bank or financial institution.

"Security Party" means each Owner and any other person (except a Creditor Party or the Approved Manager) who, as a surety or mortgagor, as a party to any subordination or priorities arrangement, or in any similar capacity, executes a document falling within the last paragraph of the definition of "Finance Documents", and in the plural means any or all of them.

"Security Period" means the period commencing on the date of this Agreement and ending on the date on which the Agent notifies the Borrower, the Security Parties and the Lenders that:

(a) all amounts which have become due for payment by the Borrower or any Security Party under the Finance Documents and the Master Agreements have been paid;

(b) no amount is owing or has accrued (without yet having become due for payment) under any Finance Document or any Master Agreement;

(c) neither the Borrower nor any Security Party has any future or contingent liability under Clause 20 (Fees and Expenses), 21 (Indemnities) or 22 (No Set-Off or Tax

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Deduction) or any other provision of this Agreement or another Finance Document or a Master Agreement; and

(d) the Agent, the Security Trustee, the Majority Lenders and the Swap Banks do not consider that there is a significant risk that any payment or transaction under a Finance Document would be set aside, or would have to be reversed or adjusted, in any present or possible future bankruptcy of the Borrower or a Security Party or in any present or possible future proceeding relating to a Finance Document or any asset covered (or previously covered) by a Security Interest created by a Finance Document.

"Security Trustee" means Nordea Bank Finland Plc, London Branch, acting in such capacity through its office at City Place House, 55 Basinghall Street, London EC2V 3NB or any successor of it appointed under clause 5 of the Agency and Trust Agreement.

"Servicing Bank" means the Agent or the Security Trustee.

"Shares Pledge" means the deeds creating security over the share capital of each of the Owners in the Agreed Form and in the plural means any or all of them.

"Ship" means each Newbuilding and each Existing Ship and in the plural means any or all of them.

"Shipbuilding Contract" means, in relation to each Newbuilding, the relevant shipbuilding contract and dated 17 June 2013 in the case of hulls DY4050 and DY4052 and made between Builder A and the relevant Owner; and dated 26 February 2014 in the case of hulls 1144 and 1145 and made between Builder B and the relevant Owner, for the construction by the relevant Builder of that Newbuilding and its purchase by the relevant Owner as each may be supplemented and amended from time to time.

"SMC" means a safety management certificate issued in respect of the Ship in accordance with Rule 13 of the ISM Code.

"Swap Banks" means each of the Lead Arrangers or their affiliates as listed in Part B of Schedule 1.

"Swap Exposure" means, as at any relevant date, the amount certified by the Swap Banks to be the aggregate net amount in Dollars which would be payable by the Borrower to the Swap Banks under (and calculated in accordance with) the applicable provisions of each Master Agreement if an Early Termination Date had occurred on the relevant date in relation to all continuing Transactions entered into between the Borrower and the Swap Banks.

"Term Loan" means that part of the Loan made or to be made available to the Borrower to refinance the Existing Indebtedness in a principal amount not exceeding $82,000,000.

"Test Period" means the period from the beginning of the current Financial Year to the last date of the relevant financial quarter to which the Applicable Accounts relate.

"Total Financial Indebtedness" means the aggregate Financial Indebtedness of the Borrower and all members of the Group (without double counting for guarantee obligations).

"Total Loss" means:

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

(b) any expropriation, confiscation, requisition or acquisition of a Ship, whether for full consideration, a consideration less than its proper value, a nominal consideration or without any consideration, which is effected by any government or official authority

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or by any person or persons claiming to be or to represent a government or official authority (excluding a requisition for hire for a fixed period not exceeding 1 year without any right to an extension) unless it is within 3 months redelivered to the Owner's full control; and

(c) any condemnation of the Ship by any tribunal or by any person claiming to be a tribunal; and

(d) any arrest, capture, seizure or detention of a Ship (including any hijacking or theft) unless it is within 3 months redelivered to the Owner's full control.

"Total Loss Date" means:

(a) in the case of an actual loss of a Ship, the date on which it occurred or, if that is unknown, the date when that Ship was last heard of;

(b) in the case of a constructive, compromised, agreed or arranged total loss of a Ship, the earliest of:

(i) the date on which a notice of abandonment is given to the insurers; and

(ii) the date of any compromise, arrangement or agreement made by or on behalf of the relevant Owner with that Ship's insurers in which the insurers agree to treat that Ship as a total loss; and

(c) in the case of any other type of total loss, on the date (or the most likely date) on which it appears to the Agent that the event constituting the total loss occurred.

"Transaction" has the meaning given in the Master Agreement.

"Transfer Certificate" has the meaning given in Clause 26.2 (Transfer by a Lender).

"Trust Property" has the meaning given in clause 3.1 of the Agency and Trust Agreement.

"US Tax Obligor" means the Borrower if it is resident for tax purposes in the United States of America or any Obligor some or all of whose payments under the Finance Documents are from sources within the United States for US federal income tax purposes.

1.2 Construction of certain terms

In this Agreement:

"administration notice" means a notice appointing an administrator, a notice of intended appointment and any other notice which is required by law (generally or in the case concerned) to be filed with the court or given to a person prior to, or in connection with, the appointment of an administrator.

"approved" means, for the purposes of Clause 13 (Insurance), approved in writing by the Agent.

"asset" includes every kind of property, asset, interest or right, including any present, future or contingent right to any revenues or other payment.

"company" includes any partnership, joint venture and unincorporated association.

"consent" includes an authorisation, consent, approval, resolution, licence, exemption, filing, registration, notarisation and legalisation.

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"contingent liability" means a liability which is not certain to arise and/or the amount of which remains unascertained.

"document" includes a deed; also a letter or fax.

"excess risks" means, in relation to a ship, the proportion of claims for general average, salvage and salvage charges not recoverable under the hull and machinery policies in respect of the Ship in consequence of its insured value being less than the value at which the Ship is assessed for the purpose of such claims.

"expense" means any kind of documented cost, charge or expense (including all legal costs, charges and expenses) and any applicable value added or other tax.

"law" includes any order or decree, any form of delegated legislation, any treaty or international convention and any regulation or resolution of the Council of the European Union, the European Commission, the United Nations or its Security Council.

"legal or administrative action" means any legal proceeding or arbitration and any administrative or regulatory action or investigation.

"liability" includes every kind of debt or liability (present or future, certain or contingent), whether incurred as principal or surety or otherwise.

"months" shall be construed in accordance with Clause 1.3 (Meaning of "month").

"obligatory insurances" means all insurances effected, or which the Owner is obliged to effect, under Clause 13 (Insurance) or any other provision of this Agreement or another Finance Document.

"parent company" has the meaning given in Clause 1.4 (Meaning of "subsidiary" and "parent").

"person" includes any company; any state, political sub-division of a state and local or municipal authority; and any international organisation.

"policy", in relation to any insurance, includes a slip, cover note, certificate of entry or other document evidencing the contract of insurance or its terms.

"protection and indemnity risks" means the usual risks covered by a protection and indemnity association managed in London, including pollution risks and the proportion (if any) of any sums payable to any other person or persons in case of collision which are not recoverable under the hull and machinery policies by reason of the incorporation in them of clause 6 of the International Hull Clauses (1/11/02 or 1/11/03), clause 8 of the Institute Time Clauses (Hulls) (1/11/95) or clause 8 of the Institute Time Clauses (Hulls) (1/10/83) or the Institute Amended Running Down Clause (1/10/71) or any equivalent provision.

"regulation" includes any regulation, rule, official directive, request or guideline whether or not having the force of law of any governmental, intergovernmental or supranational body, agency, department or regulatory, self‑regulatory or other authority or organisation.

"subsidiary" has the meaning given in Clause 1.4 (Meaning of "subsidiary" and "parent").

"tax" includes any present or future tax, duty, impost, levy or charge of any kind which is imposed by any state, any political sub-division of a state or any local or municipal authority (including any such imposed in connection with exchange controls), and any connected penalty, interest or fine.

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"war risks" includes the risk of mines and all risks excluded by clause 29 of the International Hull Clauses (1/11/02 or 1/11/03), clause 24 of the Institute Time Clauses (Hulls)(1/11/95) or clause 23 of the Institute Time Clauses (Hulls) (1/10/83).

1.3 Meaning of "month"

A period of one or more "months" ends on the day in the relevant calendar month numerically corresponding to the day of the calendar month on which the period started ("the numerically corresponding day"), but:

(a) on the Business Day following the numerically corresponding day if the numerically corresponding day is not a Business Day or, if there is no later Business Day in the same calendar month, on the Business Day preceding the numerically corresponding day; or

(b) on the last Business Day in the relevant calendar month, if the period started on the last Business Day in a calendar month or if the last calendar month of the period has no numerically corresponding day,

and "month" and "monthly" shall be construed accordingly.

1.4 Meaning of "subsidiary" and "parent"

A company (S) is a subsidiary of another company (P) if:

(a) a majority of the issued shares in S (or a majority of the issued shares in S which carry unlimited rights to capital and income distributions) are directly owned by P or are indirectly attributable to P; or

(b) P has direct or indirect control over a majority of the voting rights attaching to the issued shares of S; or

(c) P has the direct or indirect power to appoint or remove a majority of the directors of S; or

(d) P otherwise has the direct or indirect power to ensure that the affairs of S are conducted in accordance with the wishes of P;

and any company of which S is a subsidiary is a parent company of S.

1.5 General Interpretation

In this Agreement:

(a) references to, or to a provision of, a Finance Document, the Master Agreement or any other document are references to it as amended or supplemented, whether before the date of this Agreement or otherwise;

(b) references to, or to a provision of, any law or regulation include any amendment, extension, re-enactment or replacement, whether made before the date of this Agreement or otherwise;

(c) words denoting the singular number shall include the plural and vice versa;

(d) Clauses 1.1 (Definitions) to 1.5 (General Interpretation) apply unless the contrary intention appears; and

(e) an Event of Default or Default is "continuing" if it has not been remedied or waived.

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1.6 Headings

In interpreting a Finance Document or any provision of a Finance Document, all clause, sub-clause and other headings in that and any other Finance Document shall be entirely disregarded.

2 FACILITY

2.1 Amount of facility

Subject to the other provisions of this Agreement, the Lenders shall make a loan facility up to the amount of $160,000,000 available to the Borrower.

2.2 Lenders' participations in Loan

Subject to the other provisions of this Agreement, each Lender shall participate in each Advance in the proportion which, as at the relevant Drawdown Date, its Commitment bears to the Total Commitments.

2.3 Purpose of Loan

The Borrower undertakes with each Creditor Party to use each Advance only for the purpose stated in the preamble to this Agreement.

3 POSITION OF THE LENDERS AND SWAP BANKS

3.1 Interests several

The rights of the Lenders and of the Swap Banks under this Agreement and under the Master Agreements are several.

3.2 Individual rights of action

Each Lender and each Swap Bank shall be entitled to sue for any amount which has become due and payable by the Borrower to it under this Agreement or under a Master Agreement without joining the Bookrunner, the Lead Arranger, the Agent, the Security Trustee, any Lender or any Swap Bank as individual parties to the proceedings.

3.3 Proceedings requiring the Majority Lenders' consent

Except as provided under Clause 3.2 (Individual rights of action), neither any Lender nor any Swap Bank may commence proceedings against the Borrower or any Security Party in connection with a Finance Document or a Master Agreement or for any misrepresentation or breach of warranty by the Borrower or a Security Party under or connected with a Finance Document or a Master Agreement without the prior consent of the Majority Lenders.

3.4 Obligations several

The obligations of the Lenders under this Agreement and of the Swap Banks under the Master Agreement are several; and a failure of a Lender to perform its obligations under this Agreement or a failure of a Swap Bank to perform its obligations under the Master Agreement shall not result in:

(a) the obligations of the other Lenders and/or the other Swap Bank being increased; nor

(b) the Borrower, any Security Party, any other Lender or the other Swap Banks being discharged (in whole or in part) from its obligations under any Finance Document or under a Master Agreement;

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and in no circumstances shall a Lender or a Swap Bank have any responsibility for a failure of another Lender to perform its obligations under this Agreement or a Master Agreement.

3.5 Designation notice

The Agent shall promptly send to each of the Lenders a copy of any swap designation notice (as referred to in paragraph (c) of the definitions of Designated Transaction) which it receives from the Borrower.

3.6 Reliance on action of Agent

The Borrower and each Security Party shall be entitled to assume that the Majority Lenders have duly given any instruction or authorisation which, under any provision of a Finance Document, is required in relation to any action which the Agent has taken or is about to take.

4 DRAWDOWN

4.1 Request for Advance

Subject to the following conditions, the Borrower may request an Advance to be made by ensuring that the Agent receives a completed Drawdown Notice not later than 11.00 a.m. (London time) 5 Business Days prior to the intended Drawdown Date.

4.2 Availability

The conditions referred to in Clause 4.1 (Request for Advance) are that:

(a) a Drawdown Date has to be a Business Day during the relevant Availability Period;

(b) there shall be up to five (5) Advances but more than one (1) Advance may be drawn down on the same day;

(c) each Advance shall be made at the same time as, and as part or all of either:

(i) in respect of the Advance under the Term Loan, the repayment by the Borrower of the Existing Indebtedness; or

(ii) in respect of each Advance under a Newbuilding Loan, the payment by the Borrower on behalf of the relevant Owner to the relevant Builder of the relevant delivery instalment in relation to a Newbuilding (however in no case shall any Advance of a Newbuilding Loan be made prior to the relevant Newbuilding's Delivery Date);

(d) the amount of each Advance shall not exceed:

(i) in respect of the Advance under the Term Loan, the lower of (A) $82,000,000 and (B) sixty per cent. (60%) of the aggregate Market Value of the Existing Ships;

(ii) in respect of each Advance under a Newbuilding Loan:

(A) in respect of each Newbuilding to be delivered by Builder A, the lower of (1) $19,000,000 and (2) sixty per cent. (60%) of the Market Value of that Newbuilding at the relevant Delivery Date; and

(B) in respect of each Newbuilding to be delivered by Builder B, the lower of (1) $20,000,000 and (2) sixty per cent. (60%) of the Market Value of that Newbuilding as at the relevant Delivery Date,

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provided that the aggregate amount of the Advances under all Newbuilding Loans shall not exceed $78,000,000;

(e) the aggregate amount of the Advances shall not exceed the Total Commitments; and

(f) if the ratio set out in Clause 15.1 (Minimum required security cover) were applied immediately following the making of such Advance and the Borrower would be obliged to provide additional security or prepay part of the Loan under that Clause 15 (Security Cover), then the amount of the Advance shall be reduced to an amount whereby such additional security or prepayment would no longer be required.

4.3 Notification to Lenders of receipt of a Drawdown Notice

The Agent shall promptly notify the Lenders that it has received a Drawdown Notice and shall inform each Lender of:

(a) the amount of the Advance and the Drawdown Date;

(b) the amount of that Lender's participation in the Advance; and

(c) the duration of the first Interest Period.

4.4 Drawdown Notice irrevocable

A Drawdown Notice must be signed by a duly authorised signatory of the Borrower; and once served, a Drawdown Notice cannot be revoked without the prior consent of the Agent, acting on the authorisation of the Majority Lenders.

4.5 Lenders to make available Contributions

Subject to the provisions of this Agreement, each Lender shall, on and with value on each Drawdown Date, make available to the Agent for the account of the Borrower the amount due from that Lender on that Drawdown Date under Clause 2.2 (Lenders' participations in Loan).

4.6 Disbursement of Advance

Subject to the provisions of this Agreement, the Agent shall on each Drawdown Date pay to the Borrower the amounts which the Agent receives from the Lenders under Clause 4.5 (Lenders to make available Contributions); and that payment to the Borrower shall be made either:

(i) in the case of the Advance of Term Loan, to the account of each relevant Existing Facility Agent under each Existing Facility Agreement which is specified by the Borrower to refinance the Existing Indebtedness; or

(ii) in the case of each Advance under a Newbuilding Loan, to the account of the relevant Builder on behalf of the relevant Owner which the Borrower specifies in the Drawdown Notice subject to such payment being held to the order of the Agent for release upon actual delivery of the relevant Newbuilding,

in each case in the like funds as the Agent received the payments from the Lenders.

4.7 Disbursement of Advance to third party

The payment by the Agent under Clause 4.6 (Disbursement of Advance) to an account of the Builder shall constitute the making of the Advance and the Borrower shall at that time

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become indebted, as principal and direct obligor, to each Lender in an amount equal to that Lender's Contribution.

4.8 Designated Transactions under a Master Agreement

(a) The Borrower may at any time conclude Designated Transactions with any Swap Bank pursuant to the relevant Master Agreement for the purpose of swapping its interest payment obligations and managing its exposure to fluctuation in LIBOR under this Agreement.  The Borrower agrees that signature of the Master Agreement does not commit the relevant Swap Bank to conclude Designated Transactions, or even to offer terms for doing so, but does provide a contractual framework within which Designated Transactions may be concluded and secured, assuming that mutually acceptable terms can be agreed at the relevant time.

(b) The Lenders agree that, to enable the Borrower to secure its obligations to the Swap Banks under the Master Agreement, the security of the other Finance Documents shall be held by the Security Trustee not only to secure the Borrower's obligations under this Agreement but also the Borrower's obligations under the Master Agreement on the terms set out in Clause 17 (Application of Receipts).

5 INTEREST

5.1 Payment of normal interest

Subject to the provisions of this Agreement, interest on the Loan in respect of each Interest Period shall be paid by the Borrower on the last day of that Interest Period.

5.2 Normal rate of interest

Subject to the provisions of this Agreement, the rate of interest on the Loan in respect of an Interest Period shall be the aggregate of the Margin and LIBOR for that Interest Period.

5.3 Payment of accrued interest

In the case of an Interest Period longer than 3 months, accrued interest shall be paid every 3 months during that Interest Period and on the last day of that Interest Period.

5.4 Notification of Interest Periods and rates of normal interest

The Agent shall notify the Borrower and each Lender of:

(a) each rate of interest; and

(b) the duration of each Interest Period,

as soon as reasonably practicable after each is determined.

5.5 Obligation of Reference Banks to quote

A Lender which is a Reference Bank shall use all reasonable efforts to supply the quotation required of it for the purposes of fixing a rate of interest under this Agreement.

5.6 Absence of quotations by Reference Banks

If any Reference Bank fails to supply a quotation, the Agent shall determine the relevant LIBOR on the basis of the quotations supplied by the other Reference Bank or Banks; but if 2 or more of the Reference Banks fail to provide a quotation, the relevant rate of interest shall be set in accordance with the following provisions of this Clause 5 (Interest).

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5.7 Market disruption

The following provisions of this Clause 5 (Interest) apply if:

(a) no rate is quoted on Reuters Page Libor 01 and 2 or more of the Reference Banks do not, before 1.00 p.m. (London time) on the Quotation Date for an Interest Period, provide quotations to the Agent in order to fix LIBOR; or

(b) at least 1 Business Day before the start of an Interest Period, Lenders having Commitments amounting to more than 50 per cent. of the Total Commitments notify the Agent that LIBOR fixed by the Agent would not accurately reflect the cost to those Lenders of funding their respective Contributions (or any part of them) during the Interest Period in the London Interbank Market at or about 11.00 a.m. (London time) on the Quotation Date for the Interest Period; or

(c) at least 1 Business Day before the start of an Interest Period, the Agent is notified by a Lender (the "Affected Lender") that for any reason it is unable to obtain Dollars in the London Interbank Market in order to fund its Contribution (or any part of it) during that Interest Period.

5.8 Notification of market disruption

The Agent shall promptly notify the Borrower and each of the Lenders of the occurrence of an event falling within Clause 5.7 (Market disruption) and stating the circumstances which have caused such notice to be given.

5.9 Suspension of drawdown

If the Agent serves notice under Clause 5.8(Notification of market disruption) before an Advance is made:

(a) in a case falling within Clause 5.7(a), the Lenders' obligations to make the Advance concerned;

(b) in a case falling within Clause 5.7(b), the obligations of the Lenders that have notified the Agent pursuant to that Clause to make the Advance concerned; and

(c) in a case falling within Clause 5.7(c), the Affected Lender's obligation to participate in the Advance concerned,

shall be suspended while the circumstances referred to in the Agent's notice continue.

5.10 Alternative basis of interest or funding

If the Agent serves notice under Clause 5.8(Notification of market disruption) after an Advance has been made, then in relation to the Loan or any Advances for any Interest Period, then the rate of interest on each Lender's share of the Loan or such Advance for the Interest Period shall be the rate per annum which is the sum of:

(a) the Margin; and

(b) the rate notified to the Agent by that Lender as soon as practicable and in any event before interest is due to be paid in respect of that Interest Period, to be that which expresses as a percentage rate per annum the cost to that Lender of funding its participation in the Loan or such Advance from whatever source it may reasonably select.

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5.11 Notice of prepayment

If the Borrower does not agree with an interest rate notified by a Lender under Clause 5.10 (Alternative basis of interest or funding), the Borrower may give the Agent not less than 15 Business Days' notice of its intention to prepay that Lender's Contribution at the end of the interest period.

5.12 Prepayment; termination of Commitments

A notice under Clause 5.11 (Notice of prepayment) shall be irrevocable; the Agent shall promptly notify the Lenders of the Borrower's notice of intended prepayment of any Lender's Contribution and:

(a) on the date on which the Agent serves that notice, that Lender's Commitment shall be cancelled; and

(b) on the last Business Day of the interest period, the Borrower shall prepay (without premium or penalty) that Lender's Contribution together with accrued interest thereon at the applicable rate plus the Margin.

5.13 Application of prepayment

The provisions of Clause 8 (Repayment and Prepayment) shall apply in relation to the prepayment.

6 INTEREST PERIODS

6.1 Commencement of Interest Periods

The first Interest Period applicable to an Advance shall commence on the Drawdown Date applicable to it and each subsequent Interest Period shall commence on the expiry of the preceding Interest Period.

6.2 Duration of normal Interest Periods

Subject to Clauses 6.3 (Duration of Interest Periods for repayment instalments) and 6.4 (Non-availability of matching deposits for Interest Period selected), each Interest Period (with the exception of the final Interest Period for each Advance which shall be of such duration as to expire on the Final Repayment Date) shall be:

(a) 1, 3 or 6 months;

(b) 3 months, if the Borrower fails to notify the Agent in the Drawdown Notice for that Advance; or

(c) such other period as the Agent may, with the authorisation of all the Lenders, agree with the Borrower.

6.3 Duration of Interest Periods for repayment instalments

In respect of an amount due to be repaid under Clause 8 (Repayment and Prepayment) on a particular Repayment Date, an Interest Period shall end on that Repayment Date.

6.4 Non-availability of matching deposits for Interest Period selected

If, after the Borrower has selected and the Lenders have agreed an Interest Period longer than 6 months, any Lender notifies the Agent by 11.00 a.m. (London time) on the third Business Day before the commencement of the Interest Period that it is not satisfied that

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deposits in Dollars for a period equal to the Interest Period will be available to it in the London Interbank Market when the Interest Period commences, the Interest Period shall be of 6 months.

7 DEFAULT INTEREST

7.1 Payment of default interest on overdue amounts

The Borrower shall pay interest in accordance with the following provisions of this Clause 7 (Default Interest) on any amount payable by the Borrower under any Finance Document which the Agent, the Security Trustee or the other designated payee does not receive on or before the relevant date, that is:

(a) the date on which the Finance Documents provide that such amount is due for payment; or

(b) if a Finance Document provides that such amount is payable on demand, the date falling 3 Business Days after the date on which the demand is served; or

(c) if such amount has become immediately due and payable under Clause 19.4 (Acceleration of Loan), the date on which it became immediately due and payable.

7.2 Default rate of interest

Interest shall accrue on an overdue amount from (and including) the relevant date until the date of actual payment (as well after as before judgment) at the rate per annum determined by the Agent to be 2 per cent. above:

(a) in the case of an overdue amount of principal, the higher of the rates set out at Clauses 7.3(a) and (b); or

(b) in the case of any other overdue amount, the rate set out at paragraph (b) of Clause 7.3 (Calculation of default rate of interest).

7.3 Calculation of default rate of interest

The rates referred to in Clause 7.2 (Default rate of interest) are:

(a) the rate applicable to the overdue principal amount immediately prior to the relevant date (but only for any unexpired part of any then current Interest Period);

(b) the aggregate of the Margin plus, in respect of successive periods of any duration (including at call) up to 3 months which the Agent may select from time to time:

(i) LIBOR; or

(ii) if the Agent (after consultation with the Reference Banks) determines that Dollar deposits for any such period are not being made available to any Reference Bank by leading banks in the London Interbank Market in the ordinary course of business, a rate from time to time determined by the Agent by reference to the cost of funds to the Reference Banks from such other sources as the Agent (after consultation with the Reference Banks) may from time to time determine.

7.4 Notification of interest periods and default rates

The Agent shall promptly notify the Lenders and the Borrower of each interest rate determined by the Agent under Clause 7.3 (Calculation of default rate of interest) and of each period selected by the Agent for the purposes of paragraph (b) of that Clause; but this

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shall not be taken to imply that the Borrower is liable to pay such interest only with effect from the date of the Agent's notification.

7.5 Payment of accrued default interest

Subject to the other provisions of this Agreement, any interest due under this Clause shall be paid on the last day of the period by reference to which it was determined; and the payment shall be made to the Agent for the account of the Creditor Party to which the overdue amount is due.

7.6 Compounding of default interest

Any such interest which is not paid at the end of the period by reference to which it was determined shall thereupon be compounded.

7.7 Application to Master Agreement

For the avoidance of doubt, this Clause 7 (Default Interest) does not apply to any amount payable under the Master Agreement in respect of any continuing Designated Transaction as to which the relevant provisions of the Master Agreement shall apply.

8 REPAYMENT AND PREPAYMENT

8.1 Amount of repayment instalments

The Borrower shall repay:

(a) the Term Loan by (i) equal consecutive quarterly instalments based on a repayment profile which would reduce the portion of the Term Loan relating to each Existing Ship to zero when that Existing Ship is 16 years of age and (ii) the relevant Balloon Amount; and

(b) each Advance of a Newbuilding Loan by (i) equal consecutive quarterly instalments each in an amount equal to one sixtieth (1/60th) of the relevant Advance and (ii) the relevant Balloon Amount, as the same may from time to time be reduced in accordance with Clause 8.11 (Application of partial prepayment) below.

8.2 Repayment Dates

The first instalment for the Advance under the Term Loan shall be repaid on the date falling 3 months after the Closing Date and the first instalment for each Advance under a Newbuilding Loan shall be repaid on the date falling 3 months after the Delivery Date for that Newbuilding and subsequent quarterly instalments for each Advance shall be repaid on each date falling 3 months after the first such Repayment Date for that Advance and the last instalment and the Balloon Amount for each Advance shall be repaid on the Final Repayment Date.

8.3 Final Repayment Date

On the Final Repayment Date, the Borrower shall additionally pay to the Agent for the account of the Creditor Parties all other sums then accrued or owing under any Finance Document.

8.4 Voluntary prepayment

Subject to the following conditions, the Borrower may prepay the whole or any part of the Loan at any time.

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8.5 Conditions for voluntary prepayment

The conditions referred to in Clause 8.4 (Voluntary prepayment) are that:

(a) a partial prepayment shall be $1,000,000 or an integral multiple of $1,000,000;

(b) the Agent has received from the Borrower at least 3 Business Days' prior written notice specifying the Advance or Advances to be prepaid, the amount to be prepaid and the date on which the prepayment is to be made; and

(c) the Borrower has provided evidence satisfactory to the Agent that any consent required by the Borrower or any Security Party in connection with the prepayment has been obtained and remains in force, and that any requirement relevant to this Agreement which affects the Borrower or any Security Party has been complied with.

8.6 Effect of notice of prepayment

A prepayment notice may not be withdrawn or amended without the consent of the Agent, given with the authorisation of the Majority Lenders, and the amount specified in the prepayment notice shall become due and payable by the Borrower on the date for prepayment specified in the prepayment notice.

8.7 Notification of notice of prepayment

The Agent shall notify the Lenders promptly upon receiving a prepayment notice.

8.8 Mandatory prepayment

The Borrower shall be obliged:

(i) to prepay the Term Loan and cancel the Commitments in relation thereto in an amount equal to the aggregate amount of the Term Loan then outstanding and the undrawn Commitments multiplied by a fraction the numerator of which is the Market Value of the relevant Existing Ship and the denominator of which is the aggregate of the Market Values of all the Existing Ships; and/or

(ii) to prepay in full and cancel the Commitments in relation thereto in respect of the relevant Advance under the relevant Newbuilding Loan;

if:

(a) an Existing Ship or the relevant Newbuilding is sold, on or before the date on which the sale is completed by delivery of the relevant Ship to the buyer; or

(b) in the case of a Newbuilding:

(i) any of the events specified in Article X or XI of the relevant Shipbuilding Contract occurs; or

(ii) the relevant Shipbuilding Contract is cancelled, terminated, rescinded or suspended or otherwise ceases to remain in force for any reason; or

(iii) the relevant Newbuilding has not for any reason been delivered to, and accepted by, the Borrower under the Shipbuilding Contract by the Scheduled Delivery Date; or

(iv) the relevant Owner has sold, assigned or transferred its rights under the relevant Shipbuilding Contract without the prior written consent of the Agent; or

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(c) the relevant Existing Ship or Newbuilding becomes a Total Loss, on the earlier of the date falling 120 days after the Total Loss Date and the date of receipt by the Security Trustee of the proceeds of insurance relating to such Total Loss.

8.9 Mandatory repayment and cancellation of FATCA Protected Lenders

(a) If on the date falling six months before the earliest FATCA Application Date for any payment by a Party to a FATCA Protected Lender (or to the Agent for the account of that Lender), that Lender is not a FATCA Exempt Party and, in the opinion of that Lender (acting reasonably), that Party will, as a consequence, be required to make a FATCA Deduction from a payment to that Lender (or to the Agent for the account of that Lender) on or after that FATCA Application Date (a "FATCA Event"):

(i) that Lender shall, reasonably promptly after that date, notify the Agent of that FATCA Event and the relevant FATCA Application Date;

(ii) if, on the date falling one month before such FATCA Application Date, that FATCA Event is continuing and that Lender has not been replaced pursuant to Clause 26.19 (replacement of Lender by Borrower):

(A) that Lender may, at any time between one month and two weeks before such FATCA Application Date, notify the Agent;

(B) upon the Agent notifying the Borrower, the Commitment of that Lender will be immediately cancelled; and

(C) the Borrower shall repay that Lender's participation in the Loan made to the Borrower on the last day of the Interest Period for the Loan occurring after the Agent has notified the Company or, if earlier, the last Business Day before the relevant FATCA Application Date.

8.10 Amounts payable on prepayment

A prepayment shall be made together with accrued interest (and any other amount payable under Clause 21 (Indemnities) or otherwise) in respect of the amount prepaid and, if the prepayment is not made on the last day of an Interest Period together with any sums payable under paragraph (b) of Clause 21.1 (Indemnities regarding borrowing and repayment of Loan) but without premium or penalty.

8.11 Application of partial prepayment

Each partial prepayment shall be applied against the repayment instalments specified in Clause 8.1 (Amount of repayment instalments) and the Balloon Amount for the relevant Advance or Advances on a pro rata basis.

8.12 No reborrowing

No amount prepaid or repaid may be reborrowed.

8.13 Voluntary cancellation of Commitments

Subject to the following conditions, the Borrower may cancel the whole or any part of the Total Commitments.

8.14 Conditions for cancellation of Commitments

The conditions referred to in Clause 8.13 (Voluntary cancellation of Commitments) are that:

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(a) a partial cancellation shall be $1,000,000 or a higher integral multiple of $1,000,000; and

(b) the Agent has received from the Borrower at least three (3) Business Days' prior written notice specifying the amount of the Total Commitments to be cancelled and the date on which the cancellation is to take effect.

8.15 Effect of notice of cancellation

The service of a cancellation notice given under 8.14 (Conditions for cancellation of Commitments shall cause the amount of the Total Commitments specified in the notice to be permanently cancelled and any partial cancellation shall be applied against the Commitments of each Lender pro rata.

8.16 Unwinding of Transactions

On or prior to any repayment or prepayment under this Clause 8 (Repayment and Prepayment) or any other provision of this Agreement, the Borrower shall wholly or partially reverse, offset, unwind or otherwise terminate one or more of the continuing Transactions so that the notional principal amount of the continuing Transactions thereafter remaining does not and will not in the future (taking into account the scheduled amortisation) exceed the amount of the Loan as reducing from time to time thereafter pursuant to Clause 8.1 (Amount of repayment instalments).

9 CONDITIONS PRECEDENT

9.1 Documents, fees and no default

Each Lender's obligation to contribute to an Advance is subject to the following conditions precedent:

(a) that, on or before the Closing Date, the Agent receives the documents described in Part A of Schedule 3 (Condition Precedent Documents) in form and substance satisfactory to the Agent;

(b) that, on or before the service of the first Drawdown Notice, the Agent receives all accrued commitment fee payable pursuant to Clause 20.1 (Commitment fees) and has received payment of the expenses referred to in Clause 20.2 (Costs of negotiation, preparation etc.);

(c) that, on or before the Drawdown Date in respect of the Term Loan the Agent receives the documents described in Part B of Schedule 3 (Condition Precedent Documents) in form and substance satisfactory to the Agent;

(d) that, on or before the each Drawdown Date in respect of each Advance under a  Newbuilding Loan, the Agent receives the documents described in Part C of Schedule 3 (Condition Precedent Documents) in form and substance satisfactory to the Agent;

(e) that both at the date of each Drawdown Notice and at each Drawdown Date:

(i) no Event of Default or Default has occurred or would result from the borrowing of the Loan;

(ii) the representations and warranties in Clause 10 (Representations and Warranties) and those of the Borrower or any Security Party which are set out in the other Finance Documents would be true and not misleading if repeated on each of those dates with reference to the circumstances then existing; and

(iii) none of the circumstances contemplated by Clause 5.7 (Market disruption) has occurred and is continuing; and

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(f) there has been no Material Adverse Effect;

(g) that, if the ratio set out in Clause 15.1 (Minimum required security cover) were applied immediately following the making of the Advance, the Borrower would not be obliged to provide additional security or prepay part of the Loan under that Clause; and

(h) that the Agent has received, and found to be acceptable to it, any further opinions, consents, agreements and documents in connection with the Finance Documents which the Agent may, with the authorisation of the Majority Lenders, request by notice to the Borrower prior to the Drawdown Date.

9.2 Waiver of conditions precedent

If the Majority Lenders, at their discretion, permit an Advance to be borrowed before certain of the conditions referred to in Clause 9.1 (Documents, fees and no default) are satisfied, the Borrower shall ensure that those conditions are satisfied within such period after the Drawdown Date as the Agent may, with the authorisation of the Majority Lenders, specify.

10 REPRESENTATIONS AND WARRANTIES

10.1 General

The Borrower represents and warrants to each Creditor Party as follows.

10.2 Status

The Borrower is duly incorporated and validly existing and in good standing under the laws of the Marshall Islands and each of the Owners is duly incorporated and validly existing and in good standing under the laws of the Marshall Islands or Liberia (as the case may be).

10.3 Share capital and ownership

The Borrower has an authorised share capital of $780,000 divided into 780,000,000 registered shares.

10.4 Corporate power of the Borrower

The Borrower has the corporate capacity, and has taken all corporate action and obtained all consents necessary for it:

(a) to execute the Finance Documents to which the Borrower is a party and the Master Agreements; and

(b) to borrow under this Agreement, to enter into Transactions under any Master Agreement and to make all the payments contemplated by, and to comply with, those Finance Documents to which it is a party and any Master Agreement.

10.5 Corporate power of the Owners

Each Owner has the corporate capacity, and has taken all corporate action and obtained all consents necessary for it:

(a) if relevant, to execute the relevant Shipbuilding Contract, to purchase and pay for the relevant Newbuilding under such Shipbuilding Contract and to register that Newbuilding in its name under an Approved flag;

(b) to execute the Finance Documents to which the Owner is a party; and

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(c) to borrow and to make all the payments contemplated by, and to comply with, those Finance Documents to which it is a party.

10.6 Consents in force

All the consents referred to in Clauses 10.4 (Corporate power of the Borrower) and 10.5 (Corporate power of the Owners) remain in force and nothing has occurred which makes any of them liable to revocation.

10.7 Legal validity; effective Security Interests

The Finance Documents and any Master Agreement to which the Borrower or any Owner is a party do now or, as the case may be, will, upon execution and delivery (and, where applicable, registration as provided for in the Finance Documents):

(a) constitute the Borrower's or that Owner's (as the case may be) legal, valid and binding obligations enforceable against the Borrower or that Owner (as the case may be) in accordance with their respective terms; and

(b) create legal, valid and binding Security Interests enforceable in accordance with their respective terms over all the assets to which they, by their terms, relate,

subject to any relevant insolvency laws affecting creditors' rights generally.

10.8 No third party Security Interests

Without limiting the generality of Clause 10.7 (Legal validity; effective Security Interests), at the time of the execution and delivery of each Finance Document to which the Borrower or the relevant Owner is a party:

(a) the Borrower or that Owner will have the right to create all the Security Interests which that Finance Document purports to create; and

(b) no third party will have any Security Interest (except for Permitted Security Interests) or any other interest, right or claim over, in or in relation to any asset to which any such Security Interest, by its terms, relates.

10.9 No conflicts

The execution by the Borrower and of each Owner of each Finance Document to which it is a party and execution by the Borrower of any Master Agreement, and the borrowing by the Borrower of the Loan, and their respective compliance with each Finance Document to which they are a party will not involve or lead to a contravention of:

(a) any law or regulation; or

(b) the constitutional documents of the Borrower or the relevant Owner; or

(c) any contractual or other obligation or restriction which is binding on the Borrower or the relevant Owner or any of their assets.

10.10 No withholding taxes

All payments which the Borrower or any Owner is liable to make under the Finance Documents may be made without deduction or withholding for or on account of any tax payable under any law of any Pertinent Jurisdiction.

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10.11 No default

No Event of Default or Default has occurred and is continuing.

10.12 Information

All information which has been provided in writing by or on behalf of the Borrower or any Security Party to any Creditor Party in connection with any Finance Document satisfied the requirements of Clause 11.5 (Information provided to be accurate); all audited and unaudited accounts which have been so provided satisfied the requirements of Clause 11.7 (Form of financial statements); and there has been no material adverse change in the financial position or state of affairs of the Borrower or the Owners from that disclosed in the latest of those accounts.

10.13 No litigation

No legal or administrative action involving the Borrower or any Owner (including action relating to any alleged or actual breach of the ISM Code or the ISPS Code) has been commenced or taken or, to the Borrower's knowledge, is likely to be commenced or taken which in either case would be likely to have a Material Adverse Effect.

10.14 Validity and completeness of the Shipbuilding Contracts and the Deeds of Release

(a) Each of the Deeds of Release constitutes legal, valid, binding and enforceable obligations of the relevant Existing Facility Agent.

(b) Each Shipbuilding Contract constitutes valid, binding and enforceable obligations of the relevant Owner respectively in accordance with its terms.

(c) The copies of the Shipbuilding Contracts delivered to the Agent before the date of this Agreement are true and complete copies.

(d) No amendments or additions to the Shipbuilding Contracts have been agreed nor has any Owner or either Builder waived any of their respective rights under a Shipbuilding Contract.

10.15 No rebates etc.

There is no agreement or understanding to allow or pay any rebate, premium, commission, discount or other benefit or payment (howsoever described) to any Owner or to the Borrower or, to the best of the Borrower's knowledge, to either Builder or a third party in connection with the purchase by each of the Owners of the relevant Newbuildings, other than as disclosed to the Lenders in writing on or prior to the date of this Agreement.

10.16 Compliance with certain undertakings

At the date of this Agreement, the Borrower is in compliance with Clauses 11.2 (Title; Negative Pledge), 11.4 (No other liabilities or obligations to be incurred), 11.9 (Consents) and 11.13 (Principal place of business).

10.17 Taxes paid

The Borrower and each Owner has paid all taxes applicable to, or imposed on or in relation to the Borrower, that Owner, its business or the Ships.

10.18 ISM Code and ISPS Code compliance

All requirements of the ISM Code and the ISPS Code as they relate to the Borrower, each Owner, the Approved Manager and the Ship have been complied with.

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10.19 No money laundering

Without prejudice to the generality of Clause 2.2 (Lenders' participations in Loan), in relation to the borrowing by the Borrower of the Loan, the performance and discharge by the Borrower and each Owner of its obligations and liabilities under the Finance Documents and the Master Agreement, and the transactions and other arrangements effected or contemplated by the Finance Documents to which the Borrower or each Owner is a party and the Master Agreement, the Borrower for itself and on behalf of each Owner confirms (i) that it is acting for its own account, (ii) that it will use the proceeds of the Loan for its own benefit, under its full responsibility and exclusively for the purposes specified in this Agreement and (iii) that the foregoing will not involve or lead to contravention of any law, official requirement or other regulatory measure or procedure implemented to combat "money laundering" (as defined in Article 1 of the Directive 2005/60/EC of the European parliament and of the (Council).

10.20 Sanctions

(a) Each Obligor, their joint ventures, and their respective directors, officers, employees, agents or representatives is in compliance with all Sanctions.

(b) No Obligor, their joint ventures, and their respective directors, officers, employees, agents or representatives:

(i) is a Restricted Party, is owned or controlled by a Restricted Party or is involved in any transaction through which it could reasonably become a Restricted Party; or

(ii) has received notice of or is aware of any claim, action, suit, proceeding or investigation against it with respect to Sanctions.

10.21 No immunity

The Borrower is not, nor is any of its assets (including each Owner) entitled to immunity on the grounds of sovereignty or otherwise from any legal action or proceeding (which shall include, without limitation, suite attachment prior to judgement, execution or other enforcement).

10.22 Compliance with applicable laws

The Borrower and, as relevant, each Owner is at all times in compliance with all applicable laws or regulations, including but not limited to all Environmental Laws unless an appropriate waiver or suspension in connection thereto has been obtained.

10.23 Ownership of the Owners

The Borrower is the sole legal and beneficial owner of the entire authorised share capital of each of the Owners.

10.24 Pension plans

None of the Owners or the Borrower maintains any Plan, Multiemployer Plan or Foreign Pension Plan.

10.25 Margin stock

The Borrower is not engaged in the business of extending credit for the purpose of purchasing or carrying Margin Stock and no proceeds of any Advance will be used to buy or carry any Margin Stock or to extend credit to others for the purpose of buying or carrying any Margin Stock.

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10.26 Investment company, public utility, etc.

The Borrower is not:

(a) an "investment company," or an "affiliated person" of, or "promoter" or "principal underwriter" for, an "investment company," as such terms are defined in the Investment Company Act of 1940, as amended; or

(b) a "public utility" within the meaning of the United States Federal Power Act of 1920, as amended.

11 GENERAL UNDERTAKINGS

11.1 General

The Borrower undertakes with each Creditor Party to comply with the following provisions of this Clause 11 (General Undertakings) at all times during the Security Period (save that in the case of Clause 11.9 (Consents) any such obligation related to a Newbuilding will start when such Newbuilding is delivered to its Owner) except as the Agent may, with the authorisation of the Majority Lenders, otherwise permit.

11.2 Title; Negative Pledge

The Borrower will:

(a) hold the legal title to, and own the entire beneficial interest in each Owner free from all Security Interests and other interests and rights of every kind, except for those created by the Finance Documents; and

(b) procure that each Owner will not create or permit to arise any Security Interest over any other asset, present or future other than Permitted Security Interests or in the normal course of its business of acquiring, financing and operating the Ship which is owned by such Owner and, in the case of the Borrower, will not create or permit to arise any Security Interest over any rights against the Swap Banks under any Master Agreement (other than under the Finance Documents); and

(c) procure that its liabilities under the Finance Documents to which it is a party and the Master Agreement and the liabilities of each Owner under the Finance Documents to which it is a party do and will rank at least pari passu with all their other present and future unsecured liabilities, except for liabilities which are mandatorily preferred by law.

11.3 No disposal of assets

The Borrower will not transfer, lease or otherwise dispose of all or a substantial part of its assets, whether by one transaction or a number of transactions, whether related or not and will procure that each Owner will not transfer, lease or otherwise dispose of:

(a) all or a substantial part of its assets, whether by one transaction or a number of transactions, whether related or not; or

(b) any debt payable to it or any other right (present, future or contingent right) to receive a payment, including any right to damages or compensation.;

but paragraph (a) does not apply to any charter of the Ship as to which Clause 14.13 (Restrictions on chartering, appointment of managers etc.) applies.

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11.4 No other liabilities or obligations to be incurred

The Borrower will procure that each Owner will not incur any liability or obligation except liabilities and obligations under the relevant Shipbuilding Contract (if applicable) and the Finance Documents to which it is a party and liabilities or obligations reasonably incurred in the ordinary course of operating and chartering the relevant Ship.

11.5 Information provided to be accurate

All financial and other information which is provided in writing by or on behalf of the Borrower and any Owner under or in connection with any Finance Document will be true and not misleading and will not omit any material fact or consideration.

11.6 Provision of financial statements

The Borrower will send to the Agent:

(a) as soon as possible, but in no event later than 120 days after the end of each Financial Year of the Borrower, the audited consolidated accounts of the Borrower and its subsidiaries;

(b) as soon as possible, but in no event later than 60 days after the end of each quarter in each Financial Year of the Borrower:

(i) unaudited consolidated income statements, balance sheets and cash flow statements of the Borrower and its subsidiaries and unaudited individual accounts of the Borrower certified as to their correctness by the chief financial officer of the Borrower; and

(ii) quarterly Compliance Certificates (including supporting schedules); and

(c) as soon as possible, but in no event later than 60 days after the end of each Financial Year of the Borrower, a budget and financial projections of the Borrower and its subsidiaries, on a consolidated basis, which shows all anticipated income and expenditure of the Borrower and its subsidiaries, on a consolidated basis, during the next three Financial Years of the Borrower provided in good faith by the chief financial officer of the Borrower.

11.7 Form of financial statements

All accounts (audited and unaudited) delivered under Clause 11.6 (Provision of financial statements) will:

(a) be prepared in accordance with all applicable laws and GAAP consistently applied;

(b) give a true and fair view of the state of affairs of the Borrower and its subsidiaries at the date of those accounts and of their profit for the period to which those accounts relate; and

(c) fully disclose or provide for all significant liabilities of the Borrower and its subsidiaries.

11.8 Shareholder and creditor notices

The Borrower will send the Agent, at the same time as they are despatched, copies of all communications which are despatched to the Borrower's shareholders (unless prohibited by law or regulation to do so) unless such communications are available through the internet.

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11.9 Consents

The Borrower will maintain in force and promptly obtain or renew, and will promptly send certified copies to the Agent of, all consents or waivers of such consents (including, without limitation, any governmental and third party consents) required:

(a) for the Borrower an each Owner to perform its obligations under any Finance Document to which it is a party or the Master Agreements;

(b) for the validity or enforceability of any Finance Document to which it or any Owner is a party or the Master Agreements; and

(c) for each Owner to continue to own and operate the Ship owned by it,

and the Borrower will comply (or procure compliance, as the case may be) with the terms of all such consents unless a waiver in relation thereto has been obtained .

11.10 Maintenance of Security Interests

The Borrower will:

(a) at its own cost, do all that it reasonably can and procure that each Owner does all that it reasonably can to ensure that any Finance Document validly creates the obligations and the Security Interests which it purports to create; and

(b) without limiting the generality of paragraph (a), at its own cost, promptly register, file, record or enrol any Finance Document with any court or authority in all Pertinent Jurisdictions, pay any stamp, registration or similar tax in all Pertinent Jurisdictions in respect of any Finance Document, give any notice or take any other step which, in the opinion of the Majority Lenders, is or has become necessary for any Finance Document to be valid, enforceable or admissible in evidence or to ensure or protect the priority of any Security Interest which it creates.

11.11 Notification of litigation

The Borrower will provide the Agent with details of any legal or administrative action involving the Borrower, any Security Party, the Approved Manager or the Ships, their Earnings as soon as such action is instituted or it becomes apparent to the Borrower that it is likely to be instituted, unless it is clear that the legal or administrative action cannot be considered material in the context of any Finance Document.

11.12 Amendment to Shipbuilding Contracts

The Borrower will procure that no Owner of a Newbuilding will agree to any amendment or supplement to the Shipbuilding Contract to which it is a party, or to any of its provisions, which would materially affect the type of vessel being constructed, or its deadweight, or its class notation, or have a material adverse effect on the market value of the relevant Newbuilding.

11.13 Principal place of business

The Borrower will maintain its place of business, and keep its corporate documents and records, at the address stated at paragraph (a) of Clause 28.2 (Addresses for communications), and the Borrower will not establish, or do anything as a result of which it would be deemed to have, a place of business in any country other than the Marshall Islands and Greece.

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11.14 Confirmation of no default

The Borrower will, within 2 Business Days after service by the Agent of a written request, serve on the Agent a notice which is signed by the chief financial officer of the Borrower and which:

(a) states that no Event of Default or Default has occurred and is continuing; or

(b) states that no Event of Default or Default has occurred and is continuing, except for a specified event or matter, of which all material details are given.

The Agent may serve requests under this Clause 11.4 (No other liabilities or obligations to be incurred) from time to time but only if asked to do so by a Lender or Lenders having Contributions exceeding 10 per cent. of the Loan or (if the Loan has not been made) Commitments exceeding 10 per cent of the Total Commitments; and this Clause 11.4 (No other liabilities or obligations to be incurred) does not affect the Borrower's obligations under Clause 11.15 (Notification of default).

11.15 Notification of default

The Borrower will notify the Agent as soon as the Borrower becomes aware of:

(a) the occurrence of an Event of Default or a Default; or

(b) any matter which indicates that an Event of Default or a Default may have occurred or may occur;

and will keep the Agent fully up‑to‑date with all developments.

11.16 Provision of further information

(a) The Borrower will, as soon as practicable after receiving the Agent's relevant request, provide the Agent (unless prohibited by law or regulation to do so) with any additional financial or other information relating:

(i) to the Borrower, the Group, the Fleet Vessels, the Ships, their Insurances, their Earnings or the Owners (including, but not limited to, any sales or purchases of Fleet Vessels, the incurrence of Financial Indebtedness, the refinancing or restructuring of any loan or credit facilities and details of the employment of the Fleet Vessels) as the Agent may require (unless prohibited by law or regulation to do so); or

(ii) to any other matter relevant to, or to any provision of, a Finance Document,

which may be requested by the Agent, the Security Trustee or any Lender at any time.

(b) The Borrower shall, and shall procure that each Obligor shall, supply to the Agent, promptly upon becoming aware of them, the details of any claim, action, suit, proceeding or investigation with respect to Sanctions against it, any of its direct or indirect owners, subsidiaries, any of their joint ventures or any of their respective directors, officers, employees, agents or representatives.

11.17 Provision of copies and translation of documents

The Borrower will supply the Agent with a sufficient number of copies of the documents referred to above to provide 1 copy for each Creditor Party; and if the Agent so requires in respect of any of those documents, the Borrower will provide a certified English translation prepared by a translator approved by the Agent.

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11.18 Ownership

The Borrower shall ensure that (a) it shall remain the direct owner of the whole of the issued share capital of each Owner and (b) there shall be no change in the legal and beneficial ownership of the shares in each Owner.

11.19 Financial Year

The Borrower shall not change the beginning and end dates of its Financial Year.

11.20 Pari passu ranking

Each Obligor's payment obligations under this Agreement and any other Finance Document to which it is a party shall rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors, except for obligations mandatorily preferred by law applying to companies generally.

11.21 Know your customer requirements

Promptly upon the Agent's request each Obligor will supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent in order for each Creditor Party to carry out and be satisfied with the results of all necessary "know your client" or other checks which it is required to carry out in relation to the transactions contemplated by the Finance Documents and to the identity of any parties to the Finance Documents (other than Creditor Parties) and their directors and officers.

11.22 Use of proceeds

No proceeds of any Advance of the Loan shall be made available, directly or indirectly, to or for the benefit of a Restricted Party nor shall they be otherwise directly or indirectly, applied in a manner or for a purpose prohibited by Sanctions.

12 CORPORATE UNDERTAKINGS

12.1 General

The Borrower also undertakes with each Creditor Party to comply with the following provisions of this Clause 12 (Corporate Undertakings) at all times during the Security Period except as the Agent may, with the authorisation of the Majority Lenders, otherwise permit.

12.2 Maintenance of status

The Borrower will maintain its separate corporate existence and remain in good standing under the laws of the Republic of the Marshall Islands.

12.3 Maintenance of listing

The Borrower will at all times maintain the listing of its common shares, par value $0.001 per share, on Nasdaq.  For the avoidance of doubt, the Borrower shall not be permitted to cease to do any of the following (i) list such common shares on Nasdaq and (ii) maintain its reporting company status.

12.4 Negative undertakings

The Borrower will not and shall procure that each Owner will not:

(a) change the nature of its business; or

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(b) in the case of the Borrower only, pay any dividend or make any other form of distribution or effect any form of redemption, purchase or return of share capital if (i) an Event of Default has occurred and has not been remedied or (ii) an Event of Default will result from the payment of a dividend or the making of any other form of distribution or (iii) after the payment of such dividend or the making of such distribution the minimum liquidity (as calculated in accordance with Clause 12.6(b) below) after such distribution shall be less than the greater of (A) eight per cent. (8%) of Total Financial Indebtedness or (B) $1,000,000 multiplied by the number of Fleet Vessels, but, for the avoidance of doubt, subject to the provisions of this Clause 12.4(b) each Owner is permitted at any time, in such manner and as many times as it deems fit to pay dividend or make any other form of distribution or effect any form of redemption, purchase or return of share capital to the Borrower; or

(c) provide any form of credit or financial assistance to:

(i) a person who is directly or indirectly interested in the Borrower's or that Owner's share or loan capital; or

(ii) any company in or with which such a person is directly or indirectly interested or connected,

or enter into any transaction with or involving such a person or company on terms which are, in any respect, less favourable to the Borrower or the Owner than those which it could obtain in a bargain made at arms' length;

(d) allow any Owner to open or maintain, any account with any bank or financial institution except accounts with the Agent for the purposes of the Finance Documents;

(e) allow any Owner to issue, allot or grant any person a right to any shares in its capital or repurchase or reduce its issued share capital;

(f) allow any Owner to acquire any shares or other securities other than US or UK Treasury bills and certificates of deposit issued by major North American or European banks or enter into any transaction in a derivative other than Transactions;

(g) enter into any form of amalgamation, merger or de-merger or any form of reconstruction or reorganisation;

(h) in the case of each Owner only, incur any new Financial Indebtedness or allow any lien to arise in respect of its assets or its Ship save for a Permitted Security Interest arising in the ordinary course of business.

12.5 Subordination of rights of Borrower

All rights which the Borrower at any time has against any Owner or its assets shall be fully subordinated to the rights of the Creditor Parties under the Finance Documents; and in particular, the Borrower shall not during the Security Period:

(a) claim, or in a bankruptcy of any Owner prove for, any amount payable to the Borrower by any Owner, whether in respect of this or any other transaction;

(b) take or enforce any Security Interest for any such amount; or

(c) claim to set off any such amount against any amount payable by the Borrower to any Owner.

12.6 Financial Covenants

The Borrower shall ensure that:

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(a) in the case of paragraph (b)(i) of Clause 12.6 (Financial Covenants) and paragraph (b)(ii) of Clause 12.6 (Financial Covenants) at all times during the relevant Test Period; and

(b) in the case of paragraph (b)(iii) of Clause 12.6 (Financial Covenants) on the last date of the relevant Test Period,

the Group on a consolidated basis shall comply with the following covenants:

(i) Minimum Working Capital

The sum of total current assets (including restricted but unpledged cash representing minimum liquidity required to be maintained under any Financial Indebtedness) less current liabilities shall be not less than $0 (excluding balloon amounts of long term facilities falling due during such Test Period).

(ii) Minimum Liquidity

There is available to the Borrower Cash and Cash Equivalents (including restricted but unpledged cash representing minimum liquidity required to be maintained under any Financial Indebtedness) which are not subject to any Security Interest in an amount of not less than the greater of (i) 6% of Total Financial Indebtedness and (ii) $750,000 multiplied by the number of Fleet Vessels owned by the Group on the last day of the relevant Test Period.

(iii) Minimum Equity Ratio

The ratio of market value adjusted shareholders' equity of the Borrower to the market value of the assets owned by the Group on the last day of such Test Period shall at all times be equal to or greater than thirty per cent. (30%).

12.7 Compliance Check

Compliance with the undertakings contained in Clause 12.6 (Financial Covenants) for the relevant Test Period in each Financial Year and with the ratio specified in Clause 15.1 (Minimum required security cover) shall (in addition to the provisions of Clause 15 (Security Cover) be determined:

(a) at the time the Agent receives the audited consolidated accounts of the Group and the unaudited consolidated accounts of the Group (pursuant to paragraph (a) of Clause 11.6 (Provision of financial statements) and paragraph (b) of Clause 11.6 (Provision of financial statements) respectively), by reference to the unaudited consolidated accounts in the case of the first three financial quarters in each Financial Year and for the fourth financial quarter in each Financial Year, initially by reference to the unaudited consolidated accounts for the relevant fourth quarter and, once available, by reference to the audited consolidated accounts for that Financial Year of the Group; and

(b) at any other time as the Lender may reasonably request.

At the same time as it delivers the consolidated accounts referred to in Clause 11.6 (Provision of financial statements), the Borrower shall deliver to the Lender a Compliance Certificate, in the form set out in Schedule 6 (Form of Compliance Certificate), demonstrating its compliance (or not, as the case may be) with the provisions of Clause 12.6 (Financial Covenants) and with the provisions of Clause 15 (Security Cover) signed by the chief financial officer of the Borrower.

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12.8 Sanctions

The Borrower shall ensure that none of its, nor any of their subsidiaries, respective directors, officers, employees, agents or representatives or any other persons (including but not limited to each Owner) acting on any of their behalf, is a person listed on any Sanctions List.

13 INSURANCE

13.1 General

The Borrower also undertakes with each Creditor Party to procure that each Owner shall comply with the following provisions of this Clause 13 (Insurance) at all times during the Security Period (after the relevant Ship has been delivered to it under the Shipbuilding Contract) except as the Agent may, with the authorisation of the Majority Lenders, otherwise permit.

13.2 Maintenance of obligatory insurances

The Borrower shall procure that each Owner shall keep the Ship insured at the expense of that Owner against:

(a) fire and usual marine risks (including hull and machinery, increased value and excess risks);

(b) war risks (including terrorism, piracy and confiscation);

(c) protection and indemnity risks (other than loss of hire or political risks); and

(d) any other risks against which the Security Trustee considers, having regard to practices and other circumstances prevailing at the relevant time, it would in the opinion of the Security Trustee be reasonable for the relevant Owner to insure and which are specified by the Security Trustee by notice to the Borrower.

13.3 Terms of obligatory insurances

The Borrower shall procure that each Owner shall effect such insurances:

(a) in Dollars;

(b) in the case of fire and usual marine risks and war risks, in an amount on an agreed value basis at least the greater of (i) all amounts which when aggregated with the insured value of any other Ship subject to a Mortgage is at least 120 per cent. of the Loan and (ii) the Market Value of that Ship.  Provided however that each Ship must be insured by way of a hull and machinery policy at an agreed insured value (excluding freight interest) of not less than the greater of (i) 80% of the Market Value of such Ship or (ii) an amount which when aggregated with the agreed insured values under all the other hull and machinery policies for the other Ships subject to a Mortgage is not less than the principal amount of the Loan, with the remaining cover able to be insured by way of Hull Interest and/or Freight Interest; and

(c) in the case of oil pollution liability risks, for an aggregate amount equal to the highest level of cover from time to time available under basic protection and indemnity club entry and in the international marine insurance market (currently $1,000,000,000);

(d) in relation to protection and indemnity risks in respect of the Ship's full value and tonnage of the Ship owned by that Owner;

(e) on approved terms; and

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(f) through approved brokers and with approved insurance companies and/or underwriters or, in the case of war risks and protection and indemnity risks, in approved war risks and protection and indemnity risks associations.

13.4 Further protections for the Creditor Parties

In addition to the terms set out in Clause 13.3 (Terms of obligatory insurances), the Borrower shall procure that the obligatory insurances shall:

(a) subject always to paragraph (b), name the relevant Owner as the sole named assured unless the interest of every other named assured is limited:

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

(A) to any provable out-of-pocket expenses that it has incurred and which form part of any recoverable claim on underwriters; and

(B) to any third party liability claims where cover for such claims is provided by the policy (and then only in respect of discharge of any claims made against it); and

(ii) in respect of any obligatory insurances for protection and indemnity risks, to any recoveries it is entitled to make by way of reimbursement following discharge of any third party liability claims made specifically against it;

and every other named assured has undertaken in writing to the Security Trustee (in such form as it requires) that any deductible shall be apportioned between the relevant Owner and every other named assured in proportion to the gross claims made or paid by each of them and that it shall do all things necessary and provide all documents, evidence and information to enable the Security Trustee to collect or recover any moneys which at any time become payable in respect of the obligatory insurances;

(b) whenever the Security Trustee requires, name (or be amended to name) the Security Trustee as additional named assured for its rights and interests, warranted no operational interest and with full waiver of rights of subrogation against the Security Trustee, but without the Security Trustee thereby being liable to pay (but having the right to pay) premiums, calls or other assessments in respect of such insurance;

(c) name the Security Trustee as loss payee with such directions for payment as the Security Trustee may specify;

(d) provide that all payments by or on behalf of the insurers under the obligatory insurances to the Security Trustee shall be made without set‑off, counterclaim or deductions or condition whatsoever;

(e) provide that such obligatory insurances shall be primary without right of contribution from other insurances which may be carried by the Security Trustee or any other Creditor Party; and

(f) provide that the Security Trustee may make proof of loss if the Owner fails to do so.

13.5 Renewal of obligatory insurances

The Borrower shall procure that each Owner shall:

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(a) at least 21 days before the expiry of any obligatory insurance:

(i) notify the Security Trustee of the brokers (or other insurers) and any protection and indemnity or war risks association through or with whom that Owner proposes to renew that obligatory insurance and of the proposed terms of renewal; and

(ii) obtain the Security Trustee's approval to the matters referred to in paragraph (i);

(b) at least 14 days before the expiry of any obligatory insurance, renew that obligatory insurance in accordance with the Security Trustee's approval pursuant to paragraph (a); and

(c) procure that the approved brokers and/or the war risks and protection and indemnity associations with which such a renewal is effected shall promptly after the renewal notify the Security Trustee in writing of the terms and conditions of the renewal.

13.6 Copies of policies; letters of undertaking

The Borrower shall procure that each Owner shall ensure that all approved brokers provide the Security Trustee with pro forma copies of all policies relating to the obligatory insurances which they are to effect or renew and of a letter or letters or undertaking in a form required by the Security Trustee and including undertakings in their standard approved format issued by the approved brokers that:

(a) they will have endorsed on each policy, immediately upon issue, a loss payable clause and a notice of assignment complying with the provisions of Clause 13.4 (Further protections for the Creditor Parties);

(b) they will hold such policies, and the benefit of such insurances, to the order of the Security Trustee in accordance with the said loss payable clause;

(c) they will advise the Security Trustee immediately of any material change to the terms of the obligatory insurances;

(d) they will notify the Security Trustee, not less than 14 days before the expiry of the obligatory insurances, in the event of their not having received notice of renewal instructions from the relevant Owner or its agents and, in the event of their receiving instructions to renew, they will promptly notify the Security Trustee of the terms of the instructions; and

(e) they will not set off against any sum recoverable in respect of a claim relating to the relevant Ship under such obligatory insurances any premiums or other amounts due to them or any other person whether in respect of such  Ship or otherwise, they waive any lien on the policies, or any sums received under them, which they might have in respect of such premiums or other amounts, and they will not cancel such obligatory insurances by reason of non‑payment of such premiums or other amounts, and will arrange for a separate policy to be issued in respect of such  Ship forthwith upon being so requested by the Security Trustee.

13.7 Copies of certificates of entry

The Borrower shall procure that each Owner shall ensure that any protection and indemnity and/or war risks associations in which the Ship owned by it is entered provides the Security Trustee with:

(a) a certified copy of the certificate of entry for that Ship;

(b) a letter or letters of undertaking in the standard approved form usually issued by such protection and indemnity and/or war risks association as may be required by the Security Trustee; and

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(c) a certified copy of each certificate of financial responsibility for pollution by oil or other Environmentally Sensitive Material issued by the relevant certifying authority in relation to that Ship.

13.8 Deposit of original policies

The Borrower shall procure that each Owner shall ensure that all policies relating to obligatory insurances are deposited with the approved brokers through which the insurances are effected or renewed.

13.9 Payment of premiums

The Borrower shall procure that each Owner shall punctually pay all premiums or other sums payable in respect of the obligatory insurances and produce all relevant receipts when so required by the Security Trustee.

13.10 Guarantees

The Borrower shall procure that each Owner shall ensure that any guarantees required by a protection and indemnity or war risks association are promptly issued and remain in full force and effect.

13.11 Compliance with terms of insurances

The Borrower shall procure that no Owner shall do (or permit to be done or not to be done) any act or thing which would or might render any obligatory insurance invalid, void, voidable or unenforceable or render any sum payable under an obligatory insurance repayable in whole or in part; and, in particular:

(a) the Borrower shall procure that each Owner shall take all necessary action and comply with all requirements which may from time to time be applicable to the obligatory insurances, and (without limiting the obligation contained in paragraph (c) of Clause 13.6 (Copies of policies; letters of undertaking) ensure that the obligatory insurances are not made subject to any exclusions or qualifications to which the Security Trustee has not given its prior approval;

(b) the Borrower shall procure that each Owner shall not make any changes relating to the classification or classification society or manager or operator of the Ship owned by it unless approved by the underwriters of the obligatory insurances;

(c) the Borrower shall procure that each Owner shall make (and promptly supply copies to the Agent of) all quarterly or other voyage declarations which may be required by the protection and indemnity risks association in which the Ship is entered to maintain cover for trading to the United States of America and Exclusive Economic Zone (as defined in the United States Oil Pollution Act 1990 or any other applicable legislation); and

(d) the Borrower shall procure that no Owner shall employ the relevant Ship, nor allow it to be employed, otherwise than in conformity with the terms and conditions of the obligatory insurances, without first obtaining the consent of the insurers and complying with any requirements (as to extra premium or otherwise) which the insurers specify.

13.12 Alteration to terms of insurances

The Borrower shall procure that no Owner shall make or agree to any alteration to the terms of any obligatory insurance nor waive any right relating to any obligatory insurance.

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13.13 Settlement of claims

The Borrower shall procure that no Owner shall settle, compromise or abandon any claim under any obligatory insurance for Total Loss or for a Major Casualty, and shall do all things necessary and provide all documents, evidence and information to enable the Security Trustee to collect or recover any moneys which at any time become payable in respect of the obligatory insurances.

13.14 Provision of copies of communications

The Borrower shall procure that each Owner shall provide the Security Trustee, at the time of each such communication, copies of all written communications: (i) at all times in relation to the renewal of insurances; and (ii) at all times following the occurrence of a Default or an Event of Default which is continuing, in relation to all other communications, between each Owner and:

(a) the approved brokers; and

(b) the approved protection and indemnity and/or war risks associations; and

(c) the approved insurance companies and/or underwriters, which relate directly or indirectly to:

(i) that Owner's obligations relating to the obligatory insurances including, without limitation, all requisite declarations and payments of additional premiums or calls; and

(ii) any credit arrangements made between the Owner and any of the persons referred to in paragraphs (a) or (b) relating wholly or partly to the effecting or maintenance of the obligatory insurances.

13.15 Provision of information

In addition, the Borrower shall procure that each Owner shall promptly provide the Security Trustee (or any persons which it may designate) with any information which the Security Trustee (or any such designated person) requests for the purpose of:

(a) obtaining or preparing any report from an independent marine insurance broker as to the adequacy of the obligatory insurances effected or proposed to be effected; and/or

(b) effecting, maintaining or renewing any such insurances as are referred to in Clause 13.16 (Mortgagee's interest insurances) or dealing with or considering any matters relating to any such insurances,

and the Borrower shall procure that each Owner shall, forthwith upon demand, indemnify the Security Trustee in respect of all documented fees and other expenses incurred by or for the account of the Security Trustee in connection with any such report as is referred to in paragraph (a).

13.16 Mortgagee's interest insurances

The Security Trustee shall be entitled from time to time to effect, maintain and renew a mortgagee's interest marine insurance policy in such amounts, on such terms, through such insurers and generally in such manner as the Security Trustee may from time to time consider appropriate and the Borrower shall upon demand fully indemnify the Security Trustee in respect of all premiums and other expenses which are incurred in connection with or with a view to effecting, maintaining or renewing any such insurance or dealing with, or considering, any matter arising out of any such insurance.

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14 SHIP COVENANTS

14.1 General

The Borrower also undertakes with each Creditor Party to procure that each Owner shall comply with the following provisions of this Clause 14 (Ship Covenants) at all times during the Security Period (after the relevant Ship has been delivered to it under the relevant Shipbuilding Contract) except as the Agent, with the authorisation of the Majority Lenders, may otherwise permit.

14.2 Ship's name and registration

The Borrower shall procure that each Owner shall keep the Ship registered in its name under an Approved Flag; shall not do or omit to do or allow to be done anything as a result of which such registration might be cancelled or imperilled; and shall not change the name or port of registry of the Ship.

14.3 Repair and classification

The Borrower shall procure that each Owner shall keep the Ship in a good and safe condition and state of repair:

(a) consistent with first‑class ship ownership and management practice;

(b) so as to maintain the classification set out opposite each Ship in Schedule 5 (Ships, Owners, Accounts, Classification and Approved Flag Details) with a classification society which is a member of IACS and acceptable to the Agent (acting on the instructions of the Majority Lenders); and

(c) so as to comply with all laws and regulations applicable to vessels registered at ports in the applicable Approved Flag State or to vessels trading to any jurisdiction to which the Ship may trade from time to time, including but not limited to the ISM Code or the ISPS Code.

14.4 Classification society undertaking

The Borrower shall use best efforts to procure that each Owner shall instruct the classification society referred to in Clause 14.3 (Repair and classification) (and procure that the classification society undertakes with the Security Trustee):

(a) to send to the Security Trustee, following receipt of a written request from the Security Trustee, certified true copies of all original class records held by the classification society in relation to the Ship owned by that Owner;

(b) to allow the Security Trustee (or its agents), at any time and from time to time, to inspect the original class and related records of that Owner and the Ship owned by it at the offices of the classification society and to take copies of them;

(c) to notify the Security Trustee immediately in writing if the classification society:

(i) receives notification from the relevant Owner or any person that the classification society of the Ship owned by it is to be changed; or

(ii) becomes aware of any facts or matters which may result in or have resulted in a change, suspension, discontinuance, withdrawal or expiry of that Ship's class under the rules or terms and conditions of the Owner's or that Ship's membership of the classification society; and

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(d) following receipt of a written request from the Security Trustee:

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

(ii) if the relevant Owner is in default of any of its contractual obligations or liabilities to the classification society, to specify to the Security Trustee in reasonable detail the facts and circumstances of such default, the consequences of such default, and any remedy period agreed or allowed by the classification society.

14.5 Modification

The Borrower shall procure that no Owner shall make any modification or repairs to, or replacement of, the Ship or equipment installed on it which would or might materially alter the structure, type or performance characteristics of such Ship or materially reduce its value.

14.6 Removal of parts

The Borrower shall procure that no Owner shall remove any material part of that Ship, or any item of equipment installed on, a Ship unless the part or item so removed is forthwith replaced by a suitable part or item which is in the same condition as or better condition than the part or item removed, is free from any Security Interest or any right in favour of any person other than the Security Trustee and becomes on installation on that Ship the property of the relevant Owner and subject to the security constituted by the relevant Mortgage Provided that an Owner may not install equipment owned by a third party on the Ship unless such equipment is leased and installed in the ordinary course of business and can be removed without any risk of damage to the Ship owned by it and without incurring significant expense; and provided further that an Owner may remove obsolete equipment or equipment no longer required to ensure compliance with the rules and regulations of the classification society of that Ship.

14.7 Surveys

The Borrower shall procure that each Owner shall submit the Ship owned by it regularly to all periodical or other surveys which may be required for classification purposes (but, which for the avoidance of doubt, shall not restrict an Owner asking for, and obtaining, an extension of a survey whenever it considers appropriate to do so) and, if so required by the Security Trustee provide the Security Trustee, with copies of all survey reports.

14.8 Inspection

The Borrower shall procure that each Owner shall permit the Security Trustee (by surveyors or other persons appointed by it for that purpose) to board the Ship owned by it at all reasonable times to inspect its condition or to satisfy themselves about proposed or executed repairs and shall afford all proper facilities for such inspections.

14.9 Prevention of and release from arrest

The Borrower shall procure that each Owner shall promptly discharge:

(a) all liabilities which give or may give rise to maritime or possessory liens on or claims enforceable against the Ship owned by it, the Earnings or the Insurances;

(b) all taxes, dues and other amounts charged in respect of the Ship owned by it, the Earnings or the Insurances; and

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(c) all other outgoings whatsoever in respect of the Ship owned by it, the Earnings or the Insurances,

and, forthwith upon receiving notice of the arrest of the Ship owned by it, or of its detention in exercise or purported exercise of any lien or claim, each Owner shall procure its release by providing bail or otherwise as the circumstances may require.

14.10 Compliance with laws etc

The Borrower shall procure that each Owner shall:

(a) comply, or procure compliance with all laws or regulations;

(i) relating to its business generally; or

(ii) relating to the ownership, employment, operation and management of the Ship owned by it,

including but not limited to the ISM Code, the ISPS Code, all Environmental Laws and all Sanctions;

(b) without prejudice to the generality of paragraph (a) above, not employ the Ship owned by it nor allow its employment in any manner contrary to any laws or regulations, including but not limited to the ISM Code, the ISPS Code, all Environmental Laws and all Sanctions; and

(c) in the event of hostilities in any part of the world (whether war is declared or not), not cause or permit the Ship owned by it to enter or trade to any zone which is declared a war zone by any government or by that Ship's war risks insurers unless the prior written consent of the Security Trustee has been given and that Owner has (at its expense) effected any special, additional or modified insurance cover which the Security Trustee may require.

14.11 Provision of information

The Borrower shall procure that each Owner shall promptly provide the Security Trustee with any information which it requests regarding:

(a) the Ship owned by it, its employment, position and engagements;

(b) the Earnings and payments and amounts due to the Ship's master and crew;

(c) any expenses incurred, or likely to be incurred, in connection with the operation, maintenance or repair of the Ship owned by it and any payments made in respect of the Ship;

(d) any towages and salvages; and

(e) the Owner's, the Approved Manager's or relevant Ship's compliance with the ISM Code and the ISPS Code,

and, upon the Security Trustee's request, provide copies of any current charter relating to the Ship and of any current charter guarantee, and copies of that Owner's or the Approved Manager's Document of Compliance.

14.12 Notification of certain events

The Borrower shall procure that each Owner shall immediately notify the Security Trustee by fax of:

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(a) any casualty which is or is likely to be or to become a Major Casualty;

(b) any occurrence as a result of which the Ship owned by it has become or is, by the passing of time or otherwise, likely to become a Total Loss;

(c) any requirement or recommendation made by any insurer or classification society or by any competent authority which is not complied with in accordance with its terms;

(d) any arrest or detention of the Ship owned by it, any exercise or purported exercise of any lien on that Ship or its Earnings or any requisition of that Ship for hire;

(e) any intended dry docking of the Ship owned by it which is scheduled to last 10 running days or more or is in respect of maintenance or repairs at a cost in excess of $1,000,000;

(f) any Environmental Claim made against the Owner or in connection with the Ship owned by it, or any Environmental Incident;

(g) any claim for breach of the ISM Code or the ISPS Code being made against that Owner, the Approved Manager or otherwise in connection with the Ship owned by it; or

(h) any other matter, event or incident, actual or threatened, the effect of which will or could lead to the ISM Code or ISPS Code not being complied with,

and that Owner shall keep the Security Trustee advised in writing on a regular basis and in such detail as the Security Trustee shall require of that Owner's, the Approved Manager's or any other person's response to any of those events or matters.

14.13 Restrictions on chartering, appointment of managers etc.

The Borrower shall procure that no Owner shall:

(a) let the Ship owned by it on demise charter for any period;

(b) charter the Ship owned by it otherwise than on bona fide arm's length terms at the time when the Ship is fixed; or

(c) appoint a manager of the Ship other than the Approved Manager or agree to any alteration to the terms of the Approved Manager's appointment.

14.14 Notice of Mortgage.  The Borrower shall procure that each Owner shall keep the Mortgage registered against the Ship owned by it as a valid first preferred mortgage, carry on board the Ship a certified copy of the relevant Mortgage and place and maintain in a conspicuous place in the navigation room and the Master's cabin of the Ship a framed printed notice stating that the Ship is mortgaged by that Owner to the Security Trustee.

14.15 Sharing of Earnings

The Borrower shall procure that no Owner shall enter into any agreement or arrangement for the sharing of any Earnings.

14.16 ISPS Code

The Borrower shall procure that each Owner shall comply with the ISPS Code and in particular, without limitation, shall:

(a) procure that the Ship and the company responsible for that Ship's compliance with the ISPS Code comply with the ISPS Code; and

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(b) maintain for the Ship owned by it an ISSC;  and

(c) notify the Agent immediately in writing of any actual or threatened withdrawal, suspension, cancellation or modification of such  ISSC.

14.17 Approved Charter Assignment

If any Owner enters into any Approved Charter, the Borrower shall procure that the relevant Owner shall execute in favour of the Security Trustee an Approved Charter Assignment and shall:

(a) following the occurrence of an Event of Default and while the same is continuing serve notice of the Approved Charter Assignment on the charterer and use reasonable endeavours to procure that the charterer acknowledges such notice in such form as the Agent (acting on the instructions of all of the Lenders) may approve or require; and

(b) deliver to the Agent such other documents equivalent to those referred to at paragraphs 3, 4 and 5 of Part A of Schedule 3 (Condition Precedent Documents), as the Lender may require.

15 SECURITY COVER

15.1 Minimum required security cover

Clause 15.2 (Provision of additional security; prepayment) applies if (after a Ship has been delivered to an Owner under the Shipbuilding Contract) the Agent notifies the Borrower that:

(a) the aggregate Market Value (determined as provided in Clause 15.3 (Valuation of Ship)) of the delivered Ships subject to a Mortgage; plus

(b) the net realisable value of any additional security previously provided under this Clause 15 (Security Cover),

is below 135 per cent. of the Loan.

15.2 Provision of additional security; prepayment

If the Agent serves a notice on the Borrower under Clause 15.1 (Minimum required security cover), the Borrower shall prepay such part (at least) of the Loan as will eliminate the shortfall on or before the date falling 1 month after the date on which the Agent's notice is served under Clause 15.1 (Minimum required security cover) (the "Prepayment Date") unless at least 1 Business Day before the Prepayment Date it has provided, or ensured that a third party has provided, additional security which, in the opinion of the Majority Lenders, has a net realisable value at least equal to the shortfall and which has been documented in such terms as the Agent may, with the authorisation of the Majority Lenders, approve or require.

15.3 Valuation of Ship

The Market Value of a Ship (or any other Fleet Vessel) at any date (a "Valuation") is that shown by the arithmetic mean of two valuations, each valuation to be prepared:

(a) as at a date not more than 21 days previously;

(b) by an Approved Broker selected by the Borrower;

(c) with or without physical inspection of the relevant Ship (as the Lender may require); and

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(d) on the basis of a sale for prompt delivery for cash on normal arm's length commercial terms as between a willing seller and a willing buyer, free of any existing charter or other contract of employment;

15.4 Value of additional vessel security

The net realisable value of any additional security which is provided under Clause 15.2 (Provision of additional security; prepayment) and which consists of a Security Interest over a vessel shall be that shown by a Valuation complying with the requirements of Clause 15.3 (Valuation of Ship).

15.5 Valuations binding

Any Valuation under Clauses 15.2 (Provision of additional security; prepayment), 15.3 (Valuation of Ship) or 15.4 (Value of additional vessel security) shall be binding and conclusive as regards the Borrower, as shall be any valuation which the Majority Lenders make of any additional security which does not consist of or include a Security Interest.

15.6 Provision of information

The Borrower shall promptly provide the Agent and any Approved Broker or expert acting under Clauses 15.3 (Valuation of Ship) or 15.4 (Value of additional vessel security) with any information which the Agent or the Approved Broker or expert may request for the purposes of any valuation; and, if the Borrower fails to provide the information by the date specified in the request, the valuation may be made on any basis and assumptions which the Approved Broker or the Majority Lenders (or the expert appointed by them) consider prudent.

15.7 Payment of valuation expenses

Without prejudice to the generality of the Borrower's obligations under Clauses 20.2 (Costs of negotiation, preparation etc.), 20.3 (Costs of variations, amendments, enforcement etc.) and 21.3 (Miscellaneous indemnities), the Borrower shall, on demand, pay the Agent the amount of the fees and expenses of any Approved Broker or expert instructed by the Agent under this Clause (provided that no more than one Valuation per delivered Ship subject to a Mortgage per Test Period and one additional Valuation per such Ships per year shall be payable by the Borrower, save if an Event of Default has occurred which is continuing in which case the Borrower shall be liable to pay for all valuations that take place during the period such Event of Default is continuing, or where additional valuations are required in connection with the Borrower invoking the provisions of Clause 15.9 (Release of additional security)) and all legal and other expenses incurred by any Creditor Party in connection with any matter arising out of this Clause.

15.8 Application of prepayment

Clause 8 shall apply in relation to any prepayment pursuant to paragraph (b) of Clause 15.2 (Provision of additional security; prepayment).

15.9 Release of additional security

If at the time of delivery of a Compliance Certificate to the Agent:

(a) the aggregate Market Value (determined as provided in Clause 15.3 (Valuation of Ship)) of the delivered Ships subject to a Mortgage; plus

(b) the net realisable value of any additional security previously provided under this Clause 15 (Security Cover),

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is above 135 per cent. of the Loan (without taking account of the additional security whose release the Borrower is requesting pursuant to this Clause 15.9 (Release of additional security)) then, upon written notice from the Borrower to the Agent, the Agent will, subject to being indemnified to its satisfaction against the cost of doing so, release any such additional security previously provided under this Clause 15 (Security Cover) (which shall include any related guarantees or undertakings relating thereto) in such order as it shall in its absolute discretion determine, to the extent that the minimum required security cover specified in Clause 15.1 (Minimum required security cover) would be maintained following such release  Provided that at the relevant time no Default or Event of Default is in existence or will result from such release.

16 PAYMENTS AND CALCULATIONS

16.1 Currency and method of payments

All payments to be made by the Lenders or by the Borrower under a Finance Document shall be made to the Agent or to the Security Trustee, in the case of an amount payable to it:

(a) by not later than 11.00 a.m. (New York City time) on the due date;

(b) in same day Dollar funds settled through the New York Clearing House Interbank Payments System (or in such other Dollar funds and/or settled in such other manner as the Agent shall specify as being customary at the time for the settlement of international transactions of the type contemplated by this Agreement);

(c) in the case of an amount payable by a Lender to the Agent or by the Borrower to the Agent or any Lender, to the account of the Agent at JP Morgan Chase Bank NA, New York, Swift Code: CHASUS33 (Account: Nordea Bank Finland plc, London Branch, Account No. 400 807 041, Swift Code: NDEAGB2L), or to such other account with such other bank as the Agent may from time to time notify to the Borrower and the other Creditor Parties; and

(d) in the case of an amount payable to the Security Trustee, to such account as it may from time to time notify to the Borrower and the other Creditor Parties.

16.2 Payment on non-Business Day

If any payment by the Borrower under a Finance Document would otherwise fall due on a day which is not a Business Day:

(a) the due date shall be extended to the next succeeding Business Day; or

(b) if the next succeeding Business Day falls in the next calendar month, the due date shall be brought forward to the immediately preceding Business Day;

and interest shall be payable during any extension under paragraph (a) at the rate payable on the original due date.

16.3 Basis for calculation of periodic payments

All interest and commitment fee and any other payments under any Finance Document which are of an annual or periodic nature shall accrue from day to day and shall be calculated on the basis of the actual number of days elapsed and a 360 day year.

16.4 Distribution of payments to Creditor Parties

Subject to Clauses 16.5 (Permitted deductions by Agent), 16.6 (Agent only obliged to pay when monies received) and 16.7 (Refund to Agent of monies not received):

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(a) any amount received by the Agent under a Finance Document for distribution or remittance to a Lender or the Security Trustee shall be made available by the Agent to that Lender or, as the case may be, the Security Trustee by payment, with funds having the same value as the funds received, to such account as the Lender or the Security Trustee may have notified to the Agent not less than 5 Business Days previously; and

(b) amounts to be applied in satisfying amounts of a particular category which are due to the Lenders generally shall be distributed by the Agent to each Lender pro rata to the amount in that category which is due to it.

16.5 Permitted deductions by Agent

Notwithstanding any other provision of this Agreement or any other Finance Document, the Agent may, before making an amount available to a Lender, deduct and withhold from that amount any sum which is then due and payable to the Agent from that Lender under any Finance Document or any sum which the Agent is then entitled under any Finance Document to require that Lender to pay on demand.

16.6 Agent only obliged to pay when monies received

Notwithstanding any other provision of this Agreement or any other Finance Document, the Agent shall not be obliged to make available to the Borrower or any Lender any sum which the Agent is expecting to receive for remittance or distribution to the Borrower or that Lender until the Agent has satisfied itself that it has received that sum.

16.7 Refund to Agent of monies not received

If and to the extent that the Agent makes available a sum to the Borrower or a Lender, without first having received that sum, the Borrower or (as the case may be) the Lender concerned shall, on demand:

(a) refund the sum in full to the Agent; and

(b) pay to the Agent the amount (as certified by the Agent) which will indemnify the Agent against any funding or other loss, liability or expense incurred by the Agent as a result of making the sum available before receiving it.

16.8 Agent may assume receipt

Clause 16.7 (Refund to Agent of monies not received) shall not affect any claim which the Agent has under the law of restitution, and applies irrespective of whether the Agent had any form of notice that it had not received the sum which it made available.

16.9 Creditor Party accounts

Each Creditor Party shall maintain accounts showing the amounts owing to it by the Borrower and each Security Party under the Finance Documents and the Master Agreements and all payments in respect of those amounts made by the Borrower and any Security Party.

16.10 Agent's memorandum account

The Agent shall maintain a memorandum account showing the amounts advanced by the Lenders and all other sums owing to the Agent, the Security Trustee and each Lender from the Borrower and each Security Party under the Finance Documents and all payments in respect of those amounts made by the Borrower and any Security Party.

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16.11 Accounts prima facie evidence

If any accounts maintained under Clauses 16.9 (Creditor Party accounts) and 16.10 (Agent's memorandum account) show an amount to be owing by the Borrower or a Security Party to a Creditor Party, those accounts shall be prima facie evidence that that amount is owing to that Creditor Party.

17 APPLICATION OF RECEIPTS

17.1 Normal order of application

Except as any Finance Document may otherwise provide, any sums which are received or recovered by any Creditor Party under or by virtue of any Finance Document shall be applied:

(a) FIRST: in or towards satisfaction of any amounts then due and payable to the Servicing Banks (or any of them) pursuant to the terms of the Finance Documents;

(b) SECONDLY: in or towards satisfaction of any other amounts then due and payable under the Finance Documents on a pari passu basis as between each of such Finance Documents;

(c) THIRDLY: in retention of an amount equal to any amount not then due and payable under any Finance Document but which the Agent, by notice to the Borrower, the Security Parties and the other Creditor Parties, states in its opinion will or may become due and payable in the future and, upon those amounts becoming due and payable, in or towards satisfaction of them in accordance with the provisions of paragraph (a) of Clause 17.1 (Normal order of application).1;

(d) FOURTHLY:  in or towards satisfaction of any amounts then due and payable on a pro rata basis to the Swap Banks under the Master Agreement;

(e) FIFTHLY:  in retention of an amount equal to any amount not then due and payable under any Master Agreement but which the relevant Swap Bank by notice to the Borrower, the Security Parties and the other Creditor Parties, states in its opinion will or may become due and payable in the future and, upon those amounts becoming due and payable, in or towards satisfaction of them in accordance with the provisions of paragraph (d) Clause 17.1 (Normal order of application); and

(f) SIXTHLY:  any surplus shall be paid to the Borrower or to any other person appearing to be entitled to it.

17.2 Variation of order of application

The Agent may, with the authorisation of the Majority Lenders, by notice to the Borrower, the Security Parties and the other Creditor Parties provide for a different manner of application from that set out in Clause 17.1 (Normal order of application) either as regards a specified sum or sums or as regards sums in a specified category or categories Provided always that any amendments that purport to change the order of priority in which the Agent is to apply proceeds as between the Finance Documents and any Master Agreements under Clause 17.1 (Normal order of application) shall require the consent of all Lenders.

17.3 Notice of variation of order of application

The Agent may give notices under Clause 17.2 (Variation of order of application) from time to time; and such a notice may be stated to apply not only to sums which may be received or recovered in the future, but also to any sum which has been received or recovered (but not already applied) on or after the third Business Day before the date on which the notice is served.

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17.4 Appropriation rights overridden

This Clause 17 and any notice which the Agent gives under Clause 17.2 (Variation of order of application) shall override any right of appropriation possessed, and any appropriation made, by the Borrower or any Security Party.

18 APPLICATION OF EARNINGS

18.1 Payment of Earnings

The Borrower undertakes with each Creditor Party to ensure that, throughout the Security Period (and subject only to the provisions of the General Assignments), all the Earnings of a Ship are paid to the Earnings Account for that Ship.

18.2 Location of accounts

The Borrower shall promptly and shall procure that each Owner shall promptly:

(a) comply with any requirement of the Agent as to the location or re‑location of any Earnings Account (or any of them); and

(b) execute any documents which the Agent specifies to create or maintain in favour of the Security Trustee a Security Interest over (and/or rights of set-off, consolidation or other rights in relation to) the relevant Earnings Account.

18.3 Debits for expenses etc.

The Agent shall be entitled (but not obliged) from time to time to debit the Earnings Account with prior notice to the Borrower (other than at any time following an Event of Default which is continuing, in which case no such prior notice shall be required) in order to discharge any amount due and payable under Clause 20 (Fees and Expenses) or 21 (Indemnities) to a Creditor Party or payment of which any Creditor Party has become entitled to demand under Clause 20 (Fees and Expenses) or 21 (Indemnities).

18.4 Borrower's obligations unaffected

The provisions of this Clause 18 (Application of Earnings) do not affect:

(a) the liability of the Borrower to make payments of principal and interest on the due dates; or

(b) any other liability or obligation of the Borrower or any Security Party under any Finance Document.

19 EVENTS OF DEFAULT

19.1 Events of Default

An Event of Default occurs if:

(a) the Borrower or any Security Party fails to pay within one (1) Business Day of when due, any sum payable under a Finance Document or under any document relating to a Finance Document; or

(b) any breach occurs of Clause 9.2 (Waiver of conditions precedent), 11.2 (Title; Negative Pledge), 11.3 (No disposal of assets), 12.2 (Maintenance of status), 12.4 (Negative undertakings), 12.5 (Subordination of rights of Borrower), 12.6 (Financial Covenants), 12.8 (Sanctions), 13 (Insurance) or 15.2 (Provision of additional security; prepayment); or

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(c) any breach by the Borrower or any Security Party occurs of any provision of a Finance Document (other than a breach covered by paragraphs (a) or (b)) which, in the opinion of the Majority Lenders, is capable of remedy, and such default continues unremedied three (3) days after written notice from the Agent requesting action to remedy the same; or

(d) (subject to any applicable grace period specified in the Finance Document) any breach by the Borrower or any Security Party occurs of any provision of a Finance Document (other than a breach falling within paragraphs (a), (b) or (c)); or

(e) any representation, warranty or statement made or repeated by, or by an officer of, the Borrower or a Security Party in a Finance Document or in a Drawdown Notice or any other notice or document relating to a Finance Document is materially untrue or misleading when it is made or repeated; or

(f) any of the following occurs in relation to any Financial Indebtedness of a Relevant Person which alone or in aggregate exceeds $10,000,000:

(i) any Financial Indebtedness of a Relevant Person is not paid when due; or

(ii) any Financial Indebtedness of a Relevant Person is due and payable prior to its stated maturity date as a consequence of any event of default; or

(iii) a lease, hire purchase agreement or charter creating any Financial Indebtedness of a Relevant Person is terminated by the lessor or owner as a consequence of any termination event; or

(iv) any overdraft, loan, note issuance, acceptance credit, letter of credit, guarantee, foreign exchange or other facility, or any swap or other derivative contract or transaction, relating to any Financial Indebtedness of a Relevant Person ceases to be available or becomes capable of being terminated as a result of any event of default, or cash cover is required, or becomes capable of being required, in respect of such a facility as a result of any event of default; or

(v) any Security Interest securing any Financial Indebtedness of a Relevant Person becomes enforceable; or

(g) any of the following occurs in relation to a Relevant Person:

(i) a Relevant Person becomes, in the opinion of the Majority Lenders, unable to pay its debts as they fall due; or

(ii) any Relevant Person fails to pay or discharge any final non-appealable order or judgement or any assets of a Relevant Person are subject to any form of execution, attachment, arrest, sequestration or distress in respect of a sum of, or sums aggregating, $10,000,000 or more or the equivalent in another currency; or

(iii) any administrative or other receiver is appointed over any asset of a Relevant Person; or

(iv) an administrator is appointed (whether by the court or otherwise) in respect of a Relevant Person; or

(v) any formal declaration of bankruptcy or any formal statement to the effect that a Relevant Person is insolvent or likely to become insolvent is made by a Relevant Person or by the directors of a Relevant Person or, in any proceedings, by a lawyer acting for a Relevant Person; or

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(vi) a provisional liquidator is appointed in respect of a Relevant Person, a winding up order is made in relation to a Relevant Person or a winding up resolution is passed by a Relevant Person; or

(vii) a resolution is passed, an administration notice is given or filed, an application or petition to a court is made or presented or any other step is taken by (aa) a Relevant Person, (bb) the members or directors of a Relevant Person, (cc) a holder of Security Interests which together relate to all or substantially all of the assets of a Relevant Person, or (dd) a government minister or public or regulatory authority of a Pertinent Jurisdiction for or with a view to the winding up of that or another Relevant Person or the appointment of a provisional liquidator or administrator in respect of that or another Relevant Person, or that or another Relevant Person ceasing or suspending business operations or payments to creditors, save that this paragraph does not apply to a fully solvent winding up of a Relevant Person other than the Borrower which is, or is to be, effected for the purposes of an amalgamation or reconstruction previously approved by the Majority Lenders and effected not later than 3 months after the commencement of the winding up; or

(viii) an administration notice is given or filed, an application or petition to a court is made or presented or any other step is taken by a creditor of a Relevant Person (other than a holder of Security Interests which together relate to all or substantially all of the assets of a Relevant Person) for the winding up of a Relevant Person or the appointment of a provisional liquidator or administrator in respect of a Relevant Person in any Pertinent Jurisdiction, unless the proposed winding up, appointment of a provisional liquidator or administration is being contested in good faith, on substantial grounds and not with a view to some other insolvency law procedure being implemented instead and either (aa) the application or petition is dismissed or withdrawn within 30 days of being made or presented, or (bb) within 30 days of the administration notice being given or filed, or the other relevant steps being taken, other action is taken which will ensure that there will be no administration and (in both cases (aa) or (bb)) the Relevant Person will continue to carry on business in the ordinary way and without being the subject of any actual, interim or pending insolvency law procedure; or

(ix) a Relevant Person or its directors take any steps (whether by making or presenting an application or petition to a court, or submitting or presenting a document setting out a proposal or proposed terms, or otherwise) with a view to obtaining, in relation to that or another Relevant Person, any form of moratorium, suspension or deferral of payments, reorganisation of debt (or certain debt) or arrangement with all or a substantial proportion (by number or value) of creditors or of any class of them or any such moratorium, suspension or deferral of payments, reorganisation or arrangement is effected by court order, by the filing of documents with a court, by means of a contract or in any other way at all; or

(x) any meeting of the members or directors, or of any committee of the board or senior management, of a Relevant Person is held or summoned for the purpose of considering a resolution or proposal to authorise or take any action of a type described in paragraphs (iv) to (ix) or a step preparatory to such action, or (with or without such a meeting) the members, directors or such a committee resolve or agree that such an action or step should be taken or should be taken if certain conditions materialise or fail to materialise; or

(xi) in a Pertinent Jurisdiction other than England, any event occurs, any proceedings are opened or commenced or any step is taken which, in the opinion of the Majority Lenders is similar to any of the foregoing; or

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(h) the Borrower or any Owner ceases or suspends carrying on its business or a part of its business which, in the opinion of the Majority Lenders, is material in the context of this Agreement; or

(i) it becomes unlawful in any Pertinent Jurisdiction or impossible:

(i) for the Borrower or any Security Party to discharge any liability under a Finance Document or to comply with any other obligation which the Majority Lenders consider material under a Finance Document; or

(ii) for the Agent, the Security Trustee, the Lenders or the Swap Banks to exercise or enforce any right under, or to enforce any Security Interest created by, a Finance Document, unless all of the Lenders are satisfied that, through the implementation of alternative arrangements satisfactory to all of the Lenders, the unlawfulness or impossibility will be overcome or rectified within a reasonable period of time without jeopardising in any way the position of the of the Creditor Parties under this Agreement, the Master Agreements or any of the other Finance Documents, or the Security Interests created pursuant to the Finance Documents; or

(j) any official consent necessary to enable an Owner to own, operate or charter the Ship or to enable that Owner, the Borrower or any Security Party to comply with any provision which the Majority Lenders consider material of a Finance Document or the Shipbuilding Contract is not granted, expires without being renewed, is revoked or becomes liable to revocation or any condition of such a consent is not fulfilled; or

(k) it appears to the Majority Lenders that, without their prior consent, a Change of Control has occurred or probably has occurred after the date of this Agreement in the ultimate beneficial ownership of any of the shares in the Borrower or in the ultimate control of the voting rights attaching to any of those shares; or

(l) the shares of the Borrower cease to be listed on Nasdaq; or

(m) any provision which the Majority Lenders consider material of a Finance Document proves to have been or becomes invalid or unenforceable, or a Security Interest created by a Finance Document proves to have been or becomes invalid or unenforceable or such a Security Interest proves to have ranked after, or loses its priority to, another Security Interest or any other third party claim or interest; or

(n) the security constituted by a Finance Document is in any way imperilled or in jeopardy; or

(o) any Owner ceases to be a direct wholly-owned subsidiary of the Borrower; or

(p) an Event of Default (as defined in Section 14 of any Master Agreement) occurs; or

(q) any Master Agreement is terminated, cancelled, suspended, rescinded or revoked or otherwise ceases to remain in full force and effect for any reason except with the consent of the Lender; or

(r) any other event occurs or any other circumstances arise or develop including, without limitation:

(i) a change in the financial position, state of affairs or prospects of the Group since 31 December 2013; or

(ii) any accident or other event involving a Ship or another vessel owned, chartered or operated by a Relevant Person,

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in the light of which the Majority Lenders consider that there is a significant risk that the Borrower or the relevant Owner is, or will later become, unable to discharge its liabilities under the Finance Documents as they fall due; or

(s) at any time, any Obligor is not in compliance with all material Environmental Laws relating to the Ship, its ownership, operation and management or to the business of that Obligor.

19.2 Actions following an Event of Default

On, or at any time after, the occurrence of an Event of Default:

(a) the Agent may, and if so instructed by the Majority Lenders, the Agent shall:

(i) serve on the Borrower a notice stating that all or part of the Commitments and of the other obligations of each Lender to the Borrower under this Agreement are cancelled; and/or

(ii) serve on the Borrower a notice stating that all or part of the Loan together with accrued interest and all other amounts accrued or owing under this Agreement are immediately due and payable or are due and payable on demand; and/or

(iii) take any other action which, as a result of the Event of Default or any notice served under paragraph (i) or (ii), the Agent and/or the Lenders are entitled to take under any Finance Document or any applicable law; and/or

(b) the Security Trustee may, and if so instructed by the Agent, acting with the authorisation of the Majority Lenders, the Security Trustee shall take any action which, as a result of the Event of Default or any notice served under paragraph (a) (i) or (ii), the Security Trustee, the Agent and/or the Lenders and/or the Swap Banks are entitled to take under any Finance Document or any applicable law.

19.3 Termination of Commitments

On the service of a notice under paragraph (a)(i) of Clause 19.2 (Actions following an Event of Default) the Commitments and all other obligations of each Lender to the Borrower under this Agreement shall be cancelled.

19.4 Acceleration of Loan

On the service of a notice under paragraph (a)(ii) of Clause 19.2 (Actions following an Event of Default), all or, as the case may be, the part of the Loan specified in the notice together with accrued interest and all other amounts accrued or owing from the Borrower or any Security Party under this Agreement and every other Finance Document shall become immediately due and payable or, as the case may be, payable on demand.

19.5 Multiple notices; action without notice

The Agent may serve notices under paragraph (a)(i) or (ii) of 19.2 (Actions following an Event of Default) simultaneously or on different dates and it and/or the Security Trustee may take any action referred to in Clause 19.2 (Actions following an Event of Default) if no such notice is served or simultaneously with or at any time after the service of both or either of such notices.

19.6 Notification of Creditor Parties and Security Parties

The Agent shall send to each Lender, the Security Trustee and each Security Party a copy or the text of any notice which the Agent serves on the Borrower under Clause 19.2 (Actions following an Event of Default); but the notice shall become effective when it is served on the

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Borrower, and no failure or delay by the Agent to send a copy or the text of the notice to any other person shall invalidate the notice or provide the Borrower or any Security Party with any form of claim or defence.

19.7 Creditor's rights unimpaired

Nothing in this Clause shall be taken to impair or restrict the exercise of any right given to individual Lenders or individual Swap Banks under a Finance Document, the Master Agreement or the general law; and, in particular, this Clause is without prejudice to Clause 3.1 (Interests several).

19.8 Exclusion of Creditor Party liability

No Creditor Party, and no receiver or manager appointed by the Security Trustee, shall have any liability to the Borrower, a Security Party or the Approved Manager:

(a) for any loss caused by an exercise of rights under, or enforcement of a Security Interest created by, a Finance Document or by any failure or delay to exercise such a right or to enforce such a Security Interest; or

(b) as mortgagee in possession or otherwise, for any income or principal amount which might have been produced by or realised from any asset comprised in such a Security Interest or for any reduction (however caused) in the value of such an asset,

except that this does not exempt a Creditor Party or a receiver or manager from liability for losses shown to have been directly and mainly caused by the dishonesty or the wilful misconduct of such Creditor Party's own officers and employees or (as the case may be) such receiver's or manager's own partners or employees.

19.9 Relevant Persons

In this Clause 19 (Events of Default), a "Relevant Person" means the Borrower, a Security Party, and any company which is a subsidiary of the Borrower or a Security Party or of which the Borrower or a Security Party is a subsidiary but excluding any company which is dormant and the value of whose gross assets is $50,000 or less.

19.10 Interpretation

In paragraph (f) of Clause 19.1 (Events of Default), references to an event of default or a termination event include any event, howsoever described, which is similar to an event of default in a facility agreement or a termination event in a finance lease; and in paragraph (g) of Clause 19.1 (Events of Default) "petition" includes an application.

19.11 Position of Swap Banks

Neither the Agent nor the Security Trustee shall be obliged, in connection with any action taken or proposed to be taken under or pursuant to the foregoing provisions of this Clause 19 (Events of Default), to have any regard to the requirements of any of the Swap Banks except to the extent that such Swap Bank is also a Lender.

20 FEES AND EXPENSES

20.1 Commitment fees

The Borrower shall pay to the Agent quarterly in arrears on each Quarter Date during the period from (and including) the Closing Date of this Agreement to the last date of the Availability Period and on the last day of that period or earlier; for the account of the Lenders, a commitment fee at the rate of one point one two per cent. (1.12%) per annum on

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the amount of the Total Commitments less the amount of the Loan, for distribution among the Lenders pro rata to their Commitments.

20.2 Costs of negotiation, preparation etc.

The Borrower shall pay to the Agent on its demand the amount of all reasonable and documented expenses (including, without limitation, the reasonable legal fees of counsel to the Agent and Bookrunner and any maritime or local counsel) incurred by the Agent or the Security Trustee in connection with the negotiation, preparation, execution or registration of any Finance Document or any related document or with any transaction contemplated by a Finance Document or a related document.

20.3 Costs of variations, amendments, enforcement etc.

The Borrower shall pay to the Agent, on the Agent's demand, for the account of the Creditor Party concerned, the amount of all reasonable and documented (other than in the case of paragraph (d)) expenses (including, without limitation, the reasonable legal fees of counsel to the Agent and Bookrunner and any maritime or local counsel) incurred by a Creditor Party in connection with:

(a) any amendment or supplement to a Finance Document, or any proposal for such an amendment to be made;

(b) any consent or waiver by the Lenders, the Majority Lenders or the Creditor Party concerned under or in connection with a Finance Document, or any request for such a consent or waiver;

(c) the valuation of any security provided or offered under Clause 15 (Security Cover) or any other matter relating to such security; or

(d) any step taken by the Creditor Party concerned with a view to the protection, exercise or enforcement of any right or Security Interest created by a Finance Document or for any similar purpose.

There shall be recoverable under paragraph (d) the full amount of all legal expenses, whether or not such as would be allowed under rules of court or any taxation or other procedure carried out under such rules.

20.4 Documentary taxes

The Borrower shall promptly pay any tax payable on or by reference to any Finance Document, and shall, on the Agent's demand, fully indemnify each Creditor Party against any claims, expenses, liabilities and losses resulting from any failure or delay by the Borrower to pay such a tax.

20.5 Financial Services Authority fees

The Borrower shall pay to the Agent, on the Agent's demand, for the account of the Lender concerned the amounts which the Agent from time to time notifies the Borrower that a Lender has notified the Agent to be necessary to compensate it for the cost attributable to its Contribution resulting from the imposition from time to time under or pursuant to the Bank of England Act 1998 and/or by the Bank of England and/or by the Financial Services Authority (or other United Kingdom governmental authorities or agencies) of a requirement to pay fees to the Financial Services Authority calculated by reference to liabilities used to fund its Contribution.

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20.6 Certification of amounts

A notice which is signed by 2 officers of a Creditor Party, which states that a specified amount, or aggregate amount, is due to that Creditor Party under this Clause 20 (Fees and Expenses) and which indicates the matters in respect of which the amount, or aggregate amount, is due shall be prima facie evidence that the amount, or aggregate amount, is due.  Upon request by the Borrower, the Agent shall provide details of the relevant amounts.

21 INDEMNITIES

21.1 Indemnities regarding borrowing and repayment of Loan

The Borrower shall fully indemnify the Agent and each Lender on the Agent's demand and the Security Trustee on its demand in respect of all claims, expenses, liabilities and losses which are made or brought against or incurred by that Creditor Party, or which that Creditor Party reasonably and with due diligence estimates that it will incur, as a result of or in connection with:

(a) an Advance not being borrowed on the date specified in the Drawdown Notice for any reason other than a default by the Lender claiming the indemnity;

(b) Break Costs;

(c) any failure (for whatever reason) by the Borrower to make payment of any amount due under a Finance Document on the due date or, if so payable, on demand (after giving credit for any default interest paid by the Borrower on the amount concerned under Clause 7 (Default Interest)) after taking into account any applicable grace periods;

(d) the occurrence of an Event of Default or a Default and/or the acceleration of repayment of the Loan under Clause 19 (Events of Default),

and in respect of any tax (other than tax on its overall net income) for which a Creditor Party is liable in connection with any amount paid or payable to that Creditor Party (whether for its own account or otherwise) under any Finance Document.

21.2 Breakage Costs

Without limiting its generality, Clause 21.1 (Indemnities regarding borrowing and repayment of Loan) covers any claim, expense, liability or loss, incurred by a Lender:

(a) in liquidating or employing deposits from third parties acquired or arranged to fund or maintain all or any part of its Contribution and/or any overdue amount (or an aggregate amount which includes its Contribution or any overdue amount); and

(b) in terminating, or otherwise in connection with, any interest and/or currency swap or any other transaction entered into (whether with another legal entity or with another office or department of the Lender concerned) to hedge any exposure arising under this Agreement or that part which the Lender concerned determines is fairly attributable to this Agreement of the amount of the liabilities, expenses or losses (including losses of prospective profits) incurred by it in terminating, or otherwise in connection with, a number of transactions of which this Agreement is one.

21.3 Miscellaneous indemnities

The Borrower shall fully indemnify each Creditor Party severally on their respective demands in respect of all claims, expenses, liabilities and losses which may be made or brought against or incurred by a Creditor Party, in any country, as a result of or in connection with:

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(a) any action taken, or omitted or neglected to be taken, under or in connection with any Finance Document by the Agent, the Security Trustee or any other Creditor Party or by any receiver appointed under a Finance Document; or

(b) any civil penalty or fine against, and all reasonable costs and expenses (including reasonable fees of counsel and disbursements) incurred in connection with or the defence thereof by, the Agent or any other Creditor Party as a result of conduct of any Obligor or any of their partners, directors, officers, employees, agents or advisors, that violates any Sanctions; or

(c) any other Pertinent Matter,

other than claims, expenses, liabilities and losses which are shown to have been caused by the dishonesty or wilful misconduct of the officers or employees of the Creditor Party concerned.

Without prejudice to its generality, this Clause 21.3 (Miscellaneous indemnities) covers any claims, expenses, liabilities and losses which arise, or are asserted, under or in connection with any law relating to safety at sea, the ISM Code, the ISPS Code or any Environmental Law.

21.4 Currency indemnity

If any sum due from the Borrower or any Security Party to a Creditor Party under a Finance Document or under any order or judgment relating to a Finance Document has to be converted from the currency in which the Finance Document provided for the sum to be paid (the "Contractual Currency") into another currency (the "Payment Currency") for the purpose of:

(a) making or lodging any claim or proof against the Borrower or any Security Party, whether in its liquidation, any arrangement involving it or otherwise; or

(b) obtaining an order or judgment from any court or other tribunal; or

(c) enforcing any such order or judgment,

the Borrower shall indemnify the Creditor Party concerned against the loss arising when the amount of the payment actually received by that Creditor Party is converted at the available rate of exchange into the Contractual Currency.

In this Clause 21.4 (Currency indemnity), the "available rate of exchange" means the rate at which the Creditor Party concerned is able at the opening of business (London time) on the Business Day after it receives the sum concerned to purchase the Contractual Currency with the Payment Currency.

This Clause 21.4 (Currency indemnity) creates a separate liability of the Borrower which is distinct from its other liabilities under the Finance Documents and which shall not be merged in any judgment or order relating to those other liabilities.

21.5 Application of Master Agreement

For the avoidance of doubt, Clause 21.4 (Currency indemnity) does not apply in respect of sums due from the Borrower to the Lender under or in connection with the Master Agreement as to which sums the provisions of Section 8 (Contractual Currency) of the Master Agreement shall apply.

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21.6 Certification of amounts

A notice which is signed by 2 officers of a Creditor Party, which states that a specified amount, or aggregate amount, is due to that Creditor Party under this Clause 21 (Indemnities) and which indicates (without necessarily specifying a detailed breakdown) the matters in respect of which the amount, or aggregate amount, is due shall be prima facie evidence that the amount, or aggregate amount, is due.

21.7 Sums deemed due to a Lender

For the purposes of this Clause 21 (Indemnities), a sum payable by the Borrower to the Agent or the Security Trustee for distribution to a Lender shall be treated as a sum due to that Lender.

22 NO SET-OFF OR TAX DEDUCTION

22.1 No deductions

All amounts due from the Borrower under a Finance Document shall be paid:

(a) without any form of set‑off, cross-claim or condition; and

(b) free and clear of any tax deduction except a tax deduction which the Borrower is required by law to make.

22.2 Grossing-up for taxes

If the Borrower is required by law to make a tax deduction from any payment:

(a) the Borrower shall notify the Agent as soon as it becomes aware of the requirement;

(b) the Borrower shall pay the tax deducted to the appropriate taxation authority promptly, and in any event before any fine or penalty arises; and

(c) the amount due in respect of the payment shall be increased by the amount necessary to ensure that each Creditor Party receives and retains (free from any liability relating to the tax deduction) a net amount which, after the tax deduction, is equal to the full amount which it would otherwise have received.

22.3 Evidence of payment of taxes

Within 1 month after making any tax deduction, the Borrower shall deliver to the Agent documentary evidence satisfactory to the Agent that the tax had been paid to the appropriate taxation authority.

22.4 Exclusion of tax on overall net income

In this Clause 22 (No Set-Off or Tax Deduction) "tax deduction" means any deduction or withholding for or on account of any present or future tax except tax on a Creditor Party's overall net income or a FATCA Deduction.

22.5 Value Added Tax

(a) All amounts expressed to be payable under a Finance Document by any party to a Creditor Party shall be deemed to be exclusive of any VAT.  If VAT is chargeable on any supply made by any Creditor Party to any part in connection with a Finance Document, that party shall pay to the Creditor Party (in additional to and at the same time as paying the consideration) an amount equal to the amount of the VAT.

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(b) Where a Finance Document requires any party to reimburse a Creditor Party for any costs or expenses, that party shall also at the same time pay and indemnify the Creditor Party against all VAT incurred by the Creditor Party in respect of the costs or expenses to the extent that the Finance Party reasonably determines that it is not entitled to credit or repayment of the VAT.

22.6 Application of Master Agreement

For the avoidance of doubt, Clause 22 (No Set-Off or Tax Deduction) does not apply in respect of sums due from the Borrower under or in connection with a Master Agreement as to which sums the provisions of Section 2(d) (Deduction or Withholding for Tax) of the Master Agreement shall apply.

22.7 FATCA

(a) FATCA Information

(i) Subject to paragraph (iii) below, each party to a Finance Document shall, within 10 Business Days of a reasonable request by another party to the Finance Documents:

(A) confirm to that other party whether it is a FATCA Exempt Party or is not a FATCA Exempt Party; and

(B) supply to the requesting party such forms, documentation and other information relating to its status under FATCA (including its applicable "passthru percentage" or other information required under the U.S. Treasury regulations or other official guidance including intergovernmental agreements or treaties) as the requesting party reasonably requests for the purposes of such requesting party's compliance with FATCA.

(ii) If a party to any Finance Document confirms to another party pursuant to paragraph (a)(i) of Clause 22.7 (FATCA) above that it is a FATCA Exempt Party and it subsequently becomes aware that it is not, or has ceased to be a FATCA Exempt Party, that party shall notify that other party and the Agent reasonably promptly.

(iii) Paragraph (i) above shall not oblige any Creditor Party to do anything which would or might in its reasonable opinion constitute a breach of any law or regulation, any policy of that Creditor Party, any fiduciary duty or any duty of confidentiality, or to disclose any confidential information (including, without limitation, its tax returns and calculations); provided, however, that information required (or equivalent to the information so required) by United States Internal Revenue Service Forms W-8 or W-9 (or any successor forms) shall not be treated as confidential information of such Creditor Party for purposes of this paragraph (iii).

(iv) If a party to any Finance Document fails to confirm its status or to supply forms, documentation or other information requested in accordance with paragraph (i) above (including, for the avoidance of doubt, where paragraph (iii) above applies), then

(A) if that party failed to confirm whether it is (and/or remains) a FATCA Exempt Party then such party shall be treated for the purposes of the Finance Documents as if it is not a FATCA Exempt Party; and

(B) if that party failed to confirm its applicable passthru percentage then such party shall be treated for the purposes of the Finance Documents (and payments made thereunder) as if its applicable passthru percentage is one hundred per cent. (100%),

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until (in each case) such time as the party in question provides the requested confirmation, forms, documentation or other information.

(b) FATCA Deduction

(i) Each Party may make any FATCA Deduction it is required to make by FATCA, and any payment required in connection with that FATCA Deduction, and no Party shall be required to increase any payment in respect of which it makes such a FATCA Deduction or otherwise compensate the recipient of the payment for that FATCA Deduction.

(ii) Each Party shall promptly, upon becoming aware that it must make a FATCA Deduction (or that there is any change in the rate or the basis of such FATCA Deduction) notify the Party to whom it is making the payment and, in addition, shall notify the Company, the Agent and the other Creditor Parties.

23 ILLEGALITY, ETC

23.1 Illegality

This Clause 23 (Illegality, etc) applies if a Lender (the "Notifying Lender") notifies the Agent that it has become, or will with effect from a specified date, become unlawful or prohibited or contrary to, or inconsistent with, any regulation, for the Notifying Lender to maintain or give effect to any of its obligations under this Agreement in the manner contemplated by this Agreement or to fund or maintain its Contribution.

23.2 Notification of illegality

The Agent shall promptly notify the Borrower, the Security Parties, the Security Trustee and the other Lenders of the notice under Clause 23.1 (Illegality) which the Agent receives from the Notifying Lender.

23.3 Prepayment; termination of Commitment

On the Agent notifying the Borrower under Clause 23.2 (Notification of illegality), the Notifying Lender's Commitment shall terminate; and thereupon or, if later, on the date specified in the Notifying Lender's notice under Clause 23.1 (Illegality) as the date on which the notified event would become effective the Borrower shall prepay the Notifying Lender's Contribution in accordance with Clause 8 (Repayment and Prepayment).

23.4 Mitigation

If circumstances arise which would result in a notification under Clause 23.1 (Illegality) then, without in any way limiting the rights of the Notifying Lender under Clause 23.3 (Prepayment; termination of Commitment), the Notifying Lender shall use reasonable endeavours to transfer its obligations, liabilities and rights under this Agreement and the Finance Documents to another office or financial institution not affected by the circumstances but the Notifying Lender shall not be under any obligation to take any such action if, in its opinion, to do would or might:

(a) have an adverse effect on its business, operations or financial condition; or

(b) involve it in any activity which is unlawful or prohibited or any activity that is contrary to, or inconsistent with, any regulation; or

(c) involve it in any expense (unless indemnified to its satisfaction) or tax disadvantage.

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24 INCREASED COSTS

24.1 Increased costs

This Clause 24 (Increased Costs) applies if a Lender (the "Notifying Lender") notifies the Agent that the Notifying Lender considers that as a result of:

(a) the introduction or alteration after the date of this Agreement of a law or an alteration after the date of this Agreement in the manner in which a law is interpreted or applied (disregarding any effect which relates to the application to payments under this Agreement of a tax on the Lender's overall net income); or

(b) complying with any regulation (including any which relates to capital adequacy or liquidity controls or which affects the manner in which the Notifying Lender allocates capital resources to its obligations under this Agreement) which is introduced, or altered, or the interpretation or application of which is altered, after the date of this Agreement; or

(c) compliance with the implementation by the applicable authorities of the matters set out in Basel III and the continuing application of the same.

the Notifying Lender (or a parent company of it) has incurred or will incur an "increased cost".

24.2 Meaning of "increased cost"

In this Clause 24 (Increased Costs), "increased cost" means, in relation to a Notifying Lender:

(a) an additional or increased cost incurred as a result of, or in connection with, the Notifying Lender having entered into, or being a party to, this Agreement or a Transfer Certificate, of funding or maintaining its Commitment or Contribution or performing its obligations under this Agreement, or of having outstanding all or any part of its Contribution or other unpaid sums;

(b) a reduction in the amount of any payment to the Notifying Lender under this Agreement or in the effective return which such a payment represents to the Notifying Lender or on its capital;

(c) an additional or increased cost of funding all or maintaining all or any of the advances comprised in a class of advances formed by or including the Notifying Lender's Contribution or (as the case may require) the proportion of that cost attributable to the Contribution; or

(d) a liability to make a payment, or a return foregone, which is calculated by reference to any amounts received or receivable by the Notifying Lender under this Agreement;

(e) but not an item attributable to a change in the rate of tax on the overall net income of the Notifying Lender (or a parent company of it) or an item covered by the indemnity for tax in Clause 22.1 (No deductions) or by Clause 22 (No Set-Off or Tax Deduction) or attributable to a FATCA Deduction by a Party or an item arising directly out of the implementation or application of or compliance with the "International Convergence of Capital Measurement and Capital Standards, a Revised Framework" published by the Basel Committee on Banking Supervision in June 2004, substantially in the form existing on the date of this Agreement ("Basel II") or any other law or regulation which implements Basel II (whether such implementation, application or compliance is by a government, regulator, Creditor Party or any of its affiliates) Provided that the exclusion in this paragraph shall not include Basel III irrespective of whether this is implemented or applied pursuant to Basel II.

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For the purposes of this Clause 24.2 (Meaning of "increased cost") the Notifying Lender may in good faith allocate or spread costs and/or losses among its assets and liabilities (or any class of its assets and liabilities) on such basis as it considers appropriate.

24.3 Notification to Borrower of claim for increased costs

The Agent shall promptly notify the Borrower and the Security Parties of the notice which the Agent received from the Notifying Lender under Clause 24.1 (Increased costs).

24.4 Payment of increased costs

The Borrower shall pay to the Agent, on the Agent's demand, for the account of the Notifying Lender the amounts which the Agent from time to time notifies the Borrower that the Notifying Lender has specified to be necessary to compensate the Notifying Lender for the increased cost.

24.5 Notice of prepayment

If the Borrower is not willing to continue to compensate the Notifying Lender for the increased cost under Clause 24.4 (Payment of increased costs), the Borrower may give the Agent not less than 14 days' notice of its intention to prepay the Notifying Lender's Contribution at the end of an Interest Period.

24.6 Prepayment; termination of Commitment

A notice under Clause 24.5 (Notice of prepayment) shall be irrevocable; the Agent shall promptly notify the Notifying Lender of the Borrower's notice of intended prepayment; and:

(a) on the date on which the Agent serves that notice, the Commitment of the Notifying Lender shall be cancelled; and

(b) on the date specified in its notice of intended prepayment, the Borrower shall prepay (without premium or penalty) the Notifying Lender's Contribution, together with accrued interest thereon at the applicable rate plus the Margin and any Break Costs.

24.7 Application of prepayment

Clause 8 (Repayment and Prepayment) shall apply in relation to the prepayment.

25 SET-OFF

25.1 Application of credit balances

Each Creditor Party may with prior notice (other than at any time following an Event of Default which is continuing, in which case no prior notice shall be required):

(a) apply any balance (whether or not then due) which at any time stands to the credit of any account in the name of the Borrower at any office in any country of that Creditor Party in or towards satisfaction of any sum then due from the Borrower to that Creditor Party under any of the Finance Documents; and

(b) for that purpose:

(i) break, or alter the maturity of, all or any part of a deposit of the Borrower;

(ii) convert or translate all or any part of a deposit or other credit balance into Dollars; and

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(iii) enter into any other transaction or make any entry with regard to the credit balance which the Creditor Party concerned considers appropriate.

25.2 Existing rights unaffected

No Creditor Party shall be obliged to exercise any of its rights under Clause 25.1 (Application of credit balances); and those rights shall be without prejudice and in addition to any right of set‑off, combination of accounts, charge, lien or other right or remedy to which a Creditor Party is entitled (whether under the general law or any document).

25.3 Sums deemed due to a Lender

For the purposes of this Clause 25 (Set-Off), a sum payable by the Borrower to the Agent or the Security Trustee for distribution to, or for the account of, a Lender shall be treated as a sum due to that Lender; and each Lender's proportion of a sum so payable for distribution to, or for the account of, the Lenders shall be treated as a sum due to such Lender.

25.4 No Security Interest

This Clause 25 (Set-Off) gives the Creditor Parties a contractual right of set‑off only and does not create any equitable charge or other Security Interest over any credit balance of the Borrower.

26 TRANSFERS AND CHANGES IN LENDING OFFICES

26.1 Transfer by Borrower

The Borrower may not, without the consent of the Agent, given on the instructions of all the Lenders transfer any of its rights, liabilities or obligations under any Finance Document.

26.2 Transfer by a Lender

Subject to Clause 26.4 (Effective Date of Transfer Certificate), a Lender (the "Transferor Lender") may at any time with the consent (such consent not to be unreasonably withheld) of the Borrower, Provided that (i) no Default has occurred due to the occurrence of an event of the kind specified in paragraphs (a) or (g) of Clause 19.1 (Events of Default) and (ii) no Event of Default has occurred in which case no consent is required, but without the consent of any other Security Party, cause:

(a) its rights in respect of all or part of its Contribution; or

(b) its obligations in respect of all or part of its Commitment; or

(c) a combination of (a) and (b),

but subject always to a minimum amount of $10,000,000 (or, if lower, the aggregate of its Commitments and Contributions) and the approval of the Agent, to be (in the case of its rights) transferred to, or (in the case of its obligations) assumed by, another bank, financial institution or trust, fund or other entity (whose assets are managed by a Lender) which is regularly engaged in or established for the purpose of making, purchasing or investing in loans, securities or other financial assets (a "Transferee Lender") by delivering to the Agent a completed certificate in the form set out in Schedule 4 (Transfer Certificate) with any modifications approved or required by the Agent (a "Transfer Certificate") executed by the Transferor Lender and the Transferee Lender Provided that a Lender may make such transfer (i) to another Lender; (ii) to any wholly owned subsidiary of it, to its parent company or to another subsidiary of its parent company (including, without limitation, pursuant to a merger, de-merger or reorganization) in which case the provisions of Clause 26.6 (Lender re-organisation; waiver of Transfer Certificate) shall apply; (iii) to a trust, fund or other entity

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which is regularly engaged in or established for the purpose of making purchasing or investing in loans, securities or other financial assets, which is advised by, or the assets of which are managed or serviced by, a Lender or (iv) to a bank or financial institution which has, at any time previously, been a Lender, in each case without the consent of the Borrower and the fee referred to in Clause 26.11 shall not apply in relation to any such transfer.

However any rights and obligations of the Transferor Lender in its capacity as Agent or Security Trustee will have to be dealt with separately in accordance with the Agency and Trust Agreement.

26.3 Transfer Certificate, delivery and notification

As soon as reasonably practicable after a Transfer Certificate is delivered to the Agent, it shall (unless it has reason to believe that the Transfer Certificate may be defective):

(a) sign the Transfer Certificate on behalf of itself, the Borrower, the Security Parties, the Security Trustee, the Lead Arrangers, the Bookrunner, each of the other Lenders and each of the Swap Banks;

(b) on behalf of the Transferee Lender, send to the Borrower and each Security Party letters or faxes notifying them of the Transfer Certificate and attaching a copy of it;

(c) send to the Transferee Lender copies of the letters or faxes sent under paragraph (b) above,

but the Agent shall only be obliged to execute a Transfer Certificate delivered to it by the Transferor Lender and the Transferee Lender once it is satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to the transfer to that Transferee Lender.

26.4 Effective Date of Transfer Certificate

A Transfer Certificate becomes effective on the date, if any, specified in the Transfer Certificate as its effective date Provided that it is signed by the Agent under Clause 26.3 (Transfer Certificate, delivery and notification) on or before that date.

26.5 No transfer without Transfer Certificate

Except as provided in Clause 26.17 (Security over Lenders' rights), no assignment or transfer of any right or obligation of a Lender under any Finance Document is binding on, or effective in relation to, the Borrower, any Security Party, the Agent or the Security Trustee unless it is effected, evidenced or perfected by a Transfer Certificate.

26.6 Lender re-organisation; waiver of Transfer Certificate

However, if a Lender transfers to any wholly owned subsidiary of it, to its parent company or to another subsidiary of its parent company or enters into any merger, de-merger or other reorganisation as a result of which all its rights or obligations vest in another person (in each case the "successor"), the Agent may, if it sees fit, by notice to the successor and the Borrower and the Security Trustee waive the need for the execution and delivery of a Transfer Certificate; and, upon service of the Agent's notice, the successor shall become a Lender with the same Commitment and Contribution as were held by the predecessor Lender.

26.7 Effect of Transfer Certificate

A Transfer Certificate takes effect in accordance with English law as follows:

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(a) to the extent specified in the Transfer Certificate, all rights and interests (present, future or contingent) which the Transferor Lender has under or by virtue of the Finance Documents are assigned to the Transferee Lender absolutely, free of any defects in the Transferor Lender's title and of any rights or equities which the Borrower or any Security Party had against the Transferor Lender;

(b) the Transferor Lender's Commitment is discharged to the extent specified in the Transfer Certificate;

(c) the Transferee Lender becomes a Lender with the Contribution previously held by the Transferor Lender and a Commitment of an amount specified in the Transfer Certificate;

(d) the Transferee Lender becomes bound by all the provisions of the Finance Documents which are applicable to the Lenders generally, including those about pro‑rata sharing and the exclusion of liability on the part of, and the indemnification of, the Agent and the Security Trustee and, to the extent that the Transferee Lender becomes bound by those provisions (other than those relating to exclusion of liability), the Transferor Lender ceases to be bound by them;

(e) any part of the Loan which the Transferee Lender advances after the Transfer Certificate's effective date ranks in point of priority and security in the same way as it would have ranked had it been advanced by the transferor, assuming that any defects in the transferor's title and any rights or equities of the Borrower or any Security Party against the Transferor Lender had not existed;

(f) the Transferee Lender becomes entitled to all the rights under the Finance Documents which are applicable to the Lenders generally, including but not limited to those relating to the Majority Lenders and those under Clause 5.7 (Market disruption)and Clause 20 (Fees and Expenses), and to the extent that the Transferee Lender becomes entitled to such rights, the Transferor Lender ceases to be entitled to them; and

(g) in respect of any breach of a warranty, undertaking, condition or other provision of a Finance Document or any misrepresentation made in or in connection with a Finance Document, the Transferee Lender shall be entitled to recover damages by reference to the loss incurred by it as a result of the breach or misrepresentation, irrespective of whether the original Lender would have incurred a loss of that kind or amount.

The rights and equities of the Borrower or any Security Party referred to above include, but are not limited to, any right of set off and any other kind of cross‑claim.

26.8 Maintenance of register of Lenders

During the Security Period the Agent shall maintain a register in which it shall record the name, Commitment, Contribution and administrative details (including the lending office) from time to time of each Lender holding a Transfer Certificate and the effective date (in accordance with Clause 26.4 (Effective Date of Transfer Certificate)) of the Transfer Certificate; and the Agent shall make the register available for inspection by any Lender, the Security Trustee and the Borrower during normal banking hours, subject to receiving at least 3 Business Days' prior notice.

26.9 Reliance on register of Lenders

The entries on that register shall, in the absence of manifest error, be conclusive in determining the identities of the Lenders and the amounts of their Commitments and Contributions and the effective dates of Transfer Certificates and may be relied upon by the Agent and the other parties to the Finance Documents for all purposes relating to the Finance Documents.

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26.10 Authorisation of Agent to sign Transfer Certificates

The Borrower, the Security Trustee and each Lender irrevocably authorise the Agent to sign Transfer Certificates on its behalf.

26.11 Registration fee

In respect of any Transfer Certificate, the Agent shall be entitled to recover a registration fee of $3,500 from the Transferor Lender or (at the Agent's option) the Transferee Lender.  Such fee is not to be reimbursed to the payee by the Borrower or any other Security Party.

26.12 Sub-participation; subrogation assignment

A Lender may sub‑participate all or any part of its rights and/or obligations under or in connection with the Finance Documents without the consent of, or any notice to, the Borrower, any Security Party, the Agent or the Security Trustee; and the Lenders may assign, in any manner and terms agreed by the Majority Lenders, the Agent and the Security Trustee, all or any part of those rights to an insurer or surety who has become subrogated to them.

26.13 Disclosure of information

A Lender may disclose to a potential Transferee Lender or sub‑participant any information which that Lender has received in relation to any Obligor, any Security Party or their affairs under or in connection with any Finance Document, unless the information is clearly of a confidential nature.  Without prejudice to the foregoing, a Lender may disclose any financial information delivered by the Borrower or any Obligor hereunder and such other information in relation to that Obligor and its subsidiaries which it may obtain pursuant to this Agreement to authorities in any countries where that Lender, its subsidiaries, branches and representative officers or any other entity of that Lender are represented to:

(c) any authority or person to whom information is required or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority or similar body, the rules of any relevant stock exchange or pursuant to any applicable law or regulation;

(d) any authority or person for the purposes of publicity or the dissemination of market data, provided that only general information relating to this Agreement, including the names of the parties, the loan amount and the overall structure, may be disclosed; and

(e) the Relevant Persons (as listed below) only if the Agent and/or each Lender deems such disclosure to be necessary or desirable for (1) the carrying out of its duties, obligations, commitments and banking activities and/or (2) purposes of its internal cross-selling, assets liabilities and risk management policy,

"Relevant Persons" means, for the purposes of this Clause 26.13, any or all of the following in relation to (a) and (b) above as the case may be:

(i) the authorities of any Pertinent Jurisdiction;

(ii) subsidiaries, branches and representative offices of any of the Creditor Parties and any other entity of its group;

(iii) rating agencies, auditors, insurance and reinsurance brokers, professional advisers, insurers and reinsurers provided that such person is bound by a duty of confidentiality;

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(iv) if necessary, financial institutions and institutional or other investors who are or might wish to be involved in securitisation schemes, hedging agreements, participations or any other risk transfer arrangements, with the previous written consent of the Borrower (such consent not to be unreasonably withheld or delayed); or

(v) any person to whom disclosure may be necessary in connection with, and for the purposes of, any litigation, arbitrations, administrative or other investigations, proceedings or disputes.

26.14 Change of lending office

A Lender may change its lending office by giving notice to the Agent and the change shall become effective on the later of:

(a) the date on which the Agent receives the notice; and

(b) the date, if any, specified in the notice as the date on which the change will come into effect.

26.15 Notification

On receiving such a notice, the Agent shall notify the Borrower and the Security Trustee; and, until the Agent receives such a notice, it shall be entitled to assume that a Lender is acting through the lending office of which the Agent last had notice.

26.16 Replacement of Reference Bank

If any Reference Bank ceases to be a Lender or is unable on a continuing basis to supply quotations for the purposes of Clause 5 (Interest) then, unless the Borrower, the Agent and the Majority Lenders otherwise agree, the Agent, acting on the instructions of the Majority Lenders, and after consulting the Borrower, shall appoint another bank (whether or not a Lender) to be a replacement Reference Bank; and, when that appointment comes into effect, the first‑mentioned Reference Bank's appointment shall cease to be effective.

26.17 Security over Lenders' rights

In addition to the other rights provided to Lenders under this Clause 26 (Transfers and Changes in Lending Offices), each Lender may without consulting with or obtaining consent from the Borrower or any Security Party, at any time charge, assign or otherwise create a Security Interest in or over (whether by way of collateral or otherwise) all or any of its rights under any Finance Document to secure obligations of that Lender including, without limitation:

(a) any charge, assignment or other Security Interest to secure obligations to a federal reserve or central bank; and

(b) in the case of any Lender which is a fund, any charge, assignment or other Security Interest granted to any holders (or trustee or representatives of holders) of obligations owed, or securities issued, by that Lender as security for those obligations or securities;

except that no such charge, assignment or Security Interest shall:

(i) release a Lender from any of its obligations under the Finance Documents or substitute the beneficiary of the relevant charge, assignment or Security Interest for the Lender as a party to any of the Finance Documents; or

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(ii) require any payments to be made by the Borrower or any Security Party or grant to any person any more extensive rights than those required to be made or granted to the relevant Lender under the Finance Documents.

26.18 Tax indemnity, tax gross-up and increased costs on assignment, transfer and change of lending office

If:

(a) a Lender assigns or transfers any rights or obligations under the Finance Documents pursuant to Clause 26.2 (Transfer by a Lender) or changes its lending office; and

(b) as a result of circumstances existing at the date the assignment, transfer or change occurs the Borrower would be obliged to make a payment to the Transferee Lender or Lender acting through its new lending office under Clause 21.1 (Indemnities regarding borrowing and repayment of Loan) in respect of any tax, Clause 22 (No Set-Off or Tax Deduction) or Clause 24 (Increased Costs),

then the Transferee Lender or the Lender acting through its new lending office is only entitled to receive payment under those Clauses to the same extent as the Transferor Lender or the Lender acting through its previous lending office would have been if the assignment, transfer or change had not occurred.

26.19 Replacement of Lender by Borrower

At any time whenno Default and/or Event of Default has occurred, the Borrower may, in respect of:

(a) a Lender whose costs of funds charged to the Borrower are (in the Borrower's reasonable opinion) materially higher than those of the other Lenders generally;

(b) a Lender which is a FATCA Protected Lender who ceases or shall cease to be a FATCA Exempt Party;

(c) a Lender which is a Defaulting Lender; or

(d) a Lender which is a Non-Consenting Lender,

by giving 10 Business Days' notice to the Agent and that Lender (the "Outgoing Lender") replace the Outgoing Lender by requiring it to (and the Outgoing Lender must) transfer in accordance with Clause 26 all (and not part only) of its rights and obligations under this Agreement to a Lender or other bank (a "Replacement Lender") selected by the Borrower and which is acceptable to the Agent (acting reasonably) for a purchase price in cash payable at the time of transfer equal to the outstanding principal amount of the Outgoing Lender's Contribution and all accrued interest, break costs and other amounts payable in relation to that Contribution under this Agreement and the other Finance Documents.

Any transfer of rights and obligations of an Outgoing Lender under this Clause is subject to the following conditions:

(i) neither the Agent nor the Outgoing Lender will have any obligation to the Borrower to find a Replacement Lender;

(ii) the transfer must take place no later than 10 Business Days after the Borrower's notice referred to above; and

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(iii) in no event will the Outgoing Lender be required to pay or surrender to the Replacement Lender any of the fees received by the Outgoing Lender under this Agreement and the other Finance Documents.

27 VARIATIONS AND WAIVERS

27.1 Variations, waivers etc. by Majority Lenders

Subject to Clause 27.2 (Variations, waivers etc. requiring agreement of all Lenders), a document shall be effective to vary, waive, suspend or limit any provision of a Finance Document, or any Creditor Party's rights or remedies under such a provision or the general law, only if the document is signed, or specifically agreed to by fax, by the Borrower, by the Agent on behalf of the Majority Lenders, by the Agent and the Security Trustee in their own rights, and, if the document relates to a Finance Document to which a Security Party is party, by that Security Party.

27.2 Variations, waivers etc. requiring agreement of all Lenders

However, as regards the following, Clause 27.1 (Variations, waivers etc. by Majority Lenders) applies as if the words "by the Agent on behalf of the Majority Lenders" were replaced by the words "by or on behalf of every Lender":

(a) a reduction in the Margin or change in the calculation of LIBOR;

(b) a postponement to the date for, or a reduction in the amount of, any payment of principal, interest, fees or other sum payable under this Agreement;

(c) an increase in or extension of any Lender's Commitment;

(d) a change to the definition of "Majority Lenders";

(e) the replacement or release of any Obligor;

(f) any amendment or waiver if the Agent or a Lender in its sole discretion believes that it may constitute a "material modification" within the meaning of FATCA that may result (directly or indirectly) in any party to any Finance Document being required to make a FATCA Deduction and the Agent or that Lender (as the case may be) notifies the Borrower and (if relevant) the Agent accordingly, that the amendment or waiver may, unless that Lender is a FATCA Protected Lender, not be effected without the consent  of the Agent or that Lender;

(g) a change to Clause 3 (Position of the Lenders and swap banks) or this Clause 27 (Variations and Waivers);

(h) any release of, or material variation to, a Security Interest, guarantee, indemnity or subordination arrangement set out in a Finance Document; and

(i) any other change or matter as regards which this Agreement or another Finance Document expressly provides that each Lender's consent is required.

27.3 Exclusion of other or implied variations

Except for a document which satisfies the requirements of Clauses 27.1 (Variations, waivers etc. by Majority Lenders) and 27.2 (Variations, waivers etc. requiring agreement of all Lenders), no document, and no act, course of conduct, failure or neglect to act, delay or acquiescence on the part of the Creditor Parties or any of them (or any person acting on behalf of any of them) shall result in the Creditor Parties or any of them (or any person acting on behalf of any of them) being taken to have varied, waived, suspended or limited, or being precluded (permanently or temporarily) from enforcing, relying on or exercising:

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(a) a provision of this Agreement or another Finance Document; or

(b) an Event of Default; or

(c) a breach by the Borrower or a Security Party of an obligation under a Finance Document or the general law; or

(d) any right or remedy conferred by any Finance Document or by the general law,

and there shall not be implied into any Finance Document any term or condition requiring any such provision to be enforced, or such right or remedy to be exercised, within a certain or reasonable time.

27.4 Variations, waivers etc. in respect of the Agent

Notwithstanding the above, any document which purports to vary, waive, suspend or limit any provision of a Finance Document relating to rights or obligations of the Agent, or any of the Agent's obligations, rights or remedies under such a provision or the general law, shall only be effective if the document is signed, or specifically agreed to by fax, by Agent acting in its own right.

27.5 Notification of variations, waivers etc. by the Agent

No amendment or waiver may be made before the date falling ten Business Days after the terms of that amendment or waiver have been notified by the Agent to the Lenders, unless each Lender is a "FATCA Protected Lender". The Agent shall notify the Lenders reasonably promptly of any amendments or waivers proposed by the Borrower.

28 NOTICES

28.1 General

Unless otherwise specifically provided, any notice under or in connection with any Finance Document shall be given by letter or fax and references in the Finance Documents to written notices, notices in writing and notices signed by particular persons shall be construed accordingly.

28.2 Addresses for communications

A notice by letter of fax shall be sent:

(a)	to the Borrower:	Paragon Shipping Inc. 15 Karamanli Street 166 73 Voula Greece Fax No: + (30) 210 899 5085 Attn: Chief Financial Officer
(b)	to a Lender:	At the address below its name in Schedule 1 Part A or (as the case may require) in the relevant Transfer Certificate.
(c)	to the Lead Arrangers and Swap Banks:	At the address below its name in Schedule 1 Part B
(d)	to the Agent:	Nordea bank Finland Plc, London Branch City Place House 55 Basinghall Street London EC2V 5NB Fax No.: + 44 20 7726 9102 Attn:  Nordea Loan Administration

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	with a copy to:
		Fax No.: +44 20 7726 9188 Attn:  Nordea Shipping London
(e)	to the Security Trustee:	Nordea bank Finland Plc, London Branch City Place House 55 Basinghall Street London EC2V 5NB Fax No: + 44 20 7726 9102 Attn:  Nordea Loan Administration
	with a copy to:
		Fax No.: +44 20 7726 9188 Attn:  Nordea Shipping London

or to such other address as the relevant party may notify the Agent or, if the relevant party is the Agent or the Security Trustee, the Borrower, the Lenders and the Security Parties.

28.3 Effective date of notices

Subject to Clauses 28.4 (Service outside business hours) and 28.5 (Illegible notices):

(a) a notice which is delivered personally or posted shall be deemed to be served, and shall take effect, at the time when it is delivered; and

(b) a notice which is sent by fax shall be deemed to be served, and shall take effect, 2 hours after its transmission is completed.

28.4 Service outside business hours

However, if under Clause 28.3 (Effective date of notices) a notice would be deemed to be served:

(a) on a day which is not a business day in the place of receipt; or

(b) on such a business day, but after 5 p.m. local time,

the notice shall (subject to Clause 28.5 (Illegible notices)) be deemed to be served, and shall take effect, at 9 a.m. on the next day which is such a business day.

28.5 Illegible notices

Clauses 28.3 (Effective date of notices) and 28.4 (Service outside business hours) do not apply if the recipient of a notice notifies the sender within 1 hour after the time at which the notice would otherwise be deemed to be served that the notice has been received in a form which is illegible in a material respect.

28.6 Valid notices

A notice under or in connection with a Finance Document shall not be invalid by reason that its contents or the manner of serving it do not comply with the requirements of this Agreement or, where appropriate, any other Finance Document under which it is served if:

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(a) the failure to serve it in accordance with the requirements of this Agreement or other Finance Document, as the case may be, has not caused any party to suffer any significant loss or prejudice;  or

(b) in the case of incorrect and/or incomplete contents, it should have been reasonably clear to the party on which the notice was served what the correct or missing particulars should have been.

28.7 Electronic communication

Any communication to be made between the Agent and a Lender under or in connection with the Finance Documents may be made by electronic mail or other electronic means, if the Agent and the relevant Lender:

(a) agree that, unless and until notified to the contrary, this is to be an accepted form of communication;

(b) notify each other in writing of their electronic mail address and/or any other information required to enable the sending and receipt of information by that means; and

(c) notify each other of any change to their respective addresses or any other such information supplied to them.

28.8 Effectiveness of electronic communication

Any electronic communication made between the Agent and a Lender will be effective only when actually received in readable form and, in the case of any electronic communication made by a Lender to the Agent, only if it is addressed in such a manner as the Agent shall specify for this purpose.

28.9 English language

Any notice under or in connection with a Finance Document shall be in English.

28.10 Meaning of "notice"

In this Clause 28 (Notices), "notice" includes any demand, consent, authorisation, approval, instruction, waiver or other communication.

29 SUPPLEMENTAL

29.1 Rights cumulative, non-exclusive

The rights and remedies which the Finance Documents give to each Creditor Party are:

(a) cumulative;

(b) may be exercised as often as appears expedient; and

(c) shall not, unless a Finance Document explicitly and specifically states so, be taken to exclude or limit any right or remedy conferred by any law.

29.2 Severability of provisions

If any provision of a Finance Document is or subsequently becomes void, unenforceable or illegal, that shall not affect the validity, enforceability or legality of the other provisions of that Finance Document or of the provisions of any other Finance Document.

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29.3 Counterparts

A Finance Document may be executed in any number of counterparts.

29.4 Third Party rights

A person who is not a party to this Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Agreement.

30 LAW AND JURISDICTION

30.1 English law

This Agreement and any non-contractual obligations arising out of or in connection with it shall be governed by, and construed in accordance with, English law.

30.2 Exclusive English jurisdiction

Subject to Clause 30.3 (Choice of forum for the exclusive benefit of the Creditor Parties), the courts of England shall have exclusive jurisdiction to settle any Dispute.

30.3 Choice of forum for the exclusive benefit of the Creditor Parties

Clause 30.2 (Exclusive English jurisdiction) is for the exclusive benefit of the Creditor Parties, each of which reserves the right:

(a) to commence proceedings in relation to any Dispute in the courts of any country other than England and which have or claim jurisdiction to that Dispute; and

(b) to commence such proceedings in the courts of any such country or countries concurrently with or in addition to proceedings in England or without commencing proceedings in England.

The Borrower shall not commence any proceedings in any country other than England in relation to a Dispute.

30.4 Process agent

The Borrower irrevocably appoints Hill Dickinson Services (London) Limited at its registered office for the time being, presently at Duke's Place, London EC3A 7HS, England, to act as its agent to receive and accept on its behalf any process or other document relating to any proceedings in the English courts which are connected with a Dispute.

30.5 Creditor Party rights unaffected

Nothing in this Clause 30 (Law and Jurisdiction) shall exclude or limit any right which any Creditor Party may have (whether under the law of any country, an international convention or otherwise) with regard to the bringing of proceedings, the service of process, the recognition or enforcement of a judgment or any similar or related matter in any jurisdiction.

30.6 Meaning of "proceedings"

In this Clause 30 (Law and Jurisdiction), "proceedings" means proceedings of any kind, including an application for a provisional or protective measure and a "Dispute" means any dispute arising out of or in connection with this Agreement (including a dispute relating to the existence, validity or termination of this Agreement) or any non-contractual obligation arising out of or in connection with this Agreement.

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This Agreement has been entered into on the date stated at the beginning of this agreement.

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SCHEDULE 1

PART A
LENDERS AND COMMITMENTS

Lender	Lending Office	Commitment (US Dollars)
Nordea Bank Finland plc, London Branch	City Place House55 Basinghall StreetLondon EC2V 5NB Fax: +44 (0) 20 7726 9188 Attn: Shipping Department	50,000,000
with a  copy to	Fax: +44(0)207726 9102 Attn: Loan Administration
Skandinaviska Enskilda Banken AB (publ)	SE-10640 Stockholm Sweden	45,000,000
contact for credit matters	P.O. Box 1843, VikaFilipstad Brygge 1NO-0123 Oslo Norway Email: Attn: Trine von Erpecom / Egil Aarrestad
NIBC Bank N.V.	Carnegieplein 42517 KJ The Hague The Netherlands Fax: +31 (0) 70 342 5577 Attn: Michael de Visser / Gertjan Van Speybroeck	35,000,000
ITF International Transport Finance Suisse AG	Wasserwerkstrasse 12CH-8006 Zurich Switzerland Fax: +41 44 3656 213 Attn: Ms Natalja Formuzala	30,000,000

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PART B
LEAD ARRANGERS AND SWAP BANKS

Lead Arrangers and Swap Banks	Office
Nordea Bank Finland plc, London Branch	City Place House55 Basinghall StreetLondon EC2V 5NB Fax: +44 (0) 20 7726 9188 Attn: Shipping Department
	Copy fax: +44 (0) 20 7726 9102 Attn: Loan Administration
Skandinaviska Enskilda Banken AB (publ)	SE-10640 Stockholm Sweden
contact for credit matters	P.O. Box 1843, VikaFilipstad Brygge 1NO-0123 Oslo Norway Email : Attn: Trine von Erpecom / Egil Aarrestad
NIBC Bank N.V.	Carnegieplein 42517 KJ The Hague The Netherlands Fax: +31 (0) 70 342 5577Attn: Michael de Visser / Gertjan Van Speybroeck
Lead Arranger	Office
ITF International Transport Finance Suisse AG	Wasserwerkstrasse 12CH-8006 Zurich Switzerland Fax: +41 44 3656 213 Attn: Ms Natalja Formuzala

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SCHEDULE 2
DRAWDOWN NOTICE

To:	Nordea Bank Finland Plc, London Branch City Place House 55 Basinghall Street London EC2V 5NB
	Attention: [Loans Administration]	[l]

DRAWDOWN NOTICE

1 We refer to the loan agreement (the "Loan Agreement") dated [l] 2014 and made between ourselves, as Borrower, the Lenders Lead Arrangers and Swap Banks referred to therein, and yourselves as Agent, Borrower and as Security Trustee in connection with a facility of up to US$160,000,000.  Terms defined in the Loan Agreement have their defined meanings when used in this Drawdown Notice.

2 We request to borrow an Advance as follows:

(a) Amount: US$[l];

(b) Drawdown Date:  [l];

(c) Duration of the first Interest Period shall be [l] months; and

(d) Payment instructions: account of [l] and numbered [l] with [l] of [l].

3 We represent and warrant that:

(a) the representations and warranties in Clause 10 of the Loan Agreement would remain true and not misleading if repeated on the date of this notice with reference to the circumstances now existing; and

(b) no Event of Default or Default has occurred or will result from the borrowing of the Loan.

4 This notice cannot be revoked without the prior consent of the Majority Lenders.

[Name of Signatory]

Director

for and on behalf of

PARAGON SHIPPING INC.

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SCHEDULE 3
CONDITION PRECEDENT DOCUMENTS

PART A

The following are the documents referred to in paragraph (a) of Clause 9.1 (Documents, fees and no default).

1 A duly executed original of each Finance Document (and of each document required to be delivered by each Finance Document) other than those referred to in Part B and Part C.

2 Copies of the certificate of incorporation and constitutional documents of the Borrower and each Security Party.

3 Copies of resolutions of the shareholders and directors of the Borrower and each Security Party as may be required authorising the execution of each of the Finance Documents to which the Borrower or that Security Party is a party and, in the case of the Borrower, authorising named officers to give the Drawdown Notices and other notices under this Agreement and in the case of each Owner ratifying the execution of the Shipbuilding Contract.

4 The original of any power of attorney under which any Finance Document is executed on behalf of the Borrower or a Security Party.

5 Copies of all consents which the Borrower or any Security Party requires to enter into, or make any payment under, any Finance Document or the Shipbuilding Contracts.

6 The originals of any mandates or other documents required in connection with the opening or operation of the Earnings Accounts.

7 Copies of the Shipbuilding Contracts and of all documents signed or issued by the relevant Owner or the Builder (or both of them) under or in connection with it.

8 Documentary evidence that the agent for service of process named in Clause 30 (Law and Jurisdiction) has accepted its appointment.

9 Any documents required by the Creditor Parties in respect of the Borrower, each Owner and any other Security Party to satisfy that Creditor Party's "know your customer" requirements.

10 Favourable legal opinions from lawyers appointed by the Agent on such matters concerning the laws of Liberia and the Marshall Islands and such other relevant jurisdictions as the Agent may require.

11 That the Bookrunner shall have received Commitments from Lenders sufficient to fully subsidise the entire Loan (i.e. $160,000,000),

12 If the Agent so requires, in respect of any of the documents referred to above, a certified English translation prepared by a translator approved by the Agent.

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PART B

The following are the documents referred to in paragraph (c) of Clause 9.1 (Documents, fees and no default).

1 A certificate of an authorised signatory of the Borrower and each Owner certifying that each copy document which it is required to provide under this Part B of Schedule 2 (Drawdown Notice) ( is correct, complete and in full force and effect as at the Drawdown Date of the Advance under the Term Loan.

2 An original of the Deed of Release and of each document to be delivered under or pursuant to it, together with evidence satisfactory to the Agent of its due execution by the parties to it.

3 A duly executed original of [the Shares Pledge,] the Mortgage, the General Assignment and the Approved Charter Assignment (if applicable) in respect of each Existing Ship and/or the relevant Owner (as the case may be) and of each document to be delivered under or pursuant to each of them.

4 Documentary evidence that each Existing Ship:

(a) is definitively and permanently registered in the name of the relevant Owner under the Approved Flag applicable to the Existing Ship;

(a) is in the absolute and unencumbered ownership of the relevant Owner save as contemplated by the Finance Documents;

(b) maintains the class with the Classification Society as provided in paragraph (a) of Clause 14.3 (Repair and classification) free of all recommendations and conditions of such Classification Society;

(c) the Mortgage in respect of the relevant Existing Ship has been duly recorded as a valid first preferred ship mortgage in accordance with the laws of the jurisdiction of its Approved Flag

(d) is insured in accordance with the provisions of this Agreement and all requirements in this Agreement in respect of insurances have been complied with; and

(e) (if applicable) the relevant ship has been delivered to and accepted by the relevant charterer pursuant to an Approved Charter.

5 Documents establishing that each Existing Ship will, as from the Drawdown Date of the Advance under the Term Loan, be managed commercially by the Approved Manager and on terms acceptable to the Lenders, together with:

(a) the Approved Manager's Undertaking in respect of the relevant Existing Ship in favour of the Agent; and

(f) copies of the Approved Manager's Document of Compliance and of the relevant Existing Ship's Safety Management Certificate (together with any other details of the applicable safety management system which the Agent requires) and of any other documents required under the ISM Code and the ISPS Code in relation to the Existing Ship including without limitation an ISSC.

6 A favourable opinion from an independent insurance consultant acceptable to the Agent on such matters relating to the Insurances for the Existing Ships as the Agent may require.

7 [A valuation of each Existing Ship, addressed to the Agent on behalf of the Creditor Parties, stated to be for the purposes of this Agreement and dated not earlier than 14 days before

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the Drawdown Date for the Advance under the Term Loan from an Approved Valuer which shows a value for each Existing Ship of not less than 60 per cent. of the Loan (after the Advance under the Term Loan has been utilised).]

8 (If applicable) a copy of the Approved Charter in respect of the relevant Existing Ships.

9 Legal opinions of the legal advisers to the Agent in the jurisdiction of the Approved Flag of each Existing Ship Liberia and the Marshall Islands and such other relevant jurisdictions as the Facility Agent may require.

10 Evidence that the fees, costs and expenses then due from the Borrower pursuant to Clause 20 (Fees and Expenses) have been paid or will be paid by the Drawdown Date.

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PART C

The following are the documents referred to in paragraph (d) of Clause 9.1 (Documents, fees and no default).

1 A certificate of an authorised signatory of the Borrower and each Owner certifying that each copy document which it is required to provide under this Part C of Schedule 2 (Drawdown Notice) is correct, complete and in full force and effect as at the Drawdown Date of the Advance under a Newbuilding Loan.

2 A duly executed original of the Shares Pledge, the Mortgage, the General Assignment and the Approved Charter Assignment (if applicable) in respect of the relevant Ship and/or the relevant Owner (and of each document to be delivered by each of them).

3 Documentary evidence that:

(a) the relevant Ship has been unconditionally delivered by the Builder to, and accepted by, the relevant Owner under the relevant Shipbuilding Contract, and the full purchase price payable under the relevant Shipbuilding Contract (in addition to the part to be financed by the Loan) has been duly paid;

(b) the relevant Ship is definitively and permanently registered in the name of the relevant Owner under an Approved Flag;

(c) the relevant Ship is in the absolute and unencumbered ownership of the relevant Owner save as contemplated by the Finance Documents;

(d) the relevant Ship maintains the class with the Classification Society as provided in paragraph (a) of Clause 14.3 (Repair and classification) free of all recommendations and conditions of such Classification Society;

(e) the Mortgage in respect of the relevant Ship has been duly recorded against the Ship as a valid first preferred ship mortgage in accordance with the laws of the Approved Flag State;

(f) the relevant Ship is insured in accordance with the provisions of this Agreement and all requirements therein in respect of insurances have been complied with; and

(g) (if applicable) the relevant Ship has been delivered to and accepted by the relevant charterer pursuant to an Approved Charter.

4 Documents establishing that the relevant Ship will, as from it Delivery Date, be managed by the Approved Manager on terms acceptable to the Lenders, together with:

(a) the Approved Manager Undertaking in respect of the relevant Ship in favour of the Agent; and

(b) copies of the Approved Manager's Document of Compliance (DOC) and of the Ship's Safety Management Certificate (SMC) (together with any other details of the applicable safety management system which the Agent requires) and of any other documents required under the ISM Code and the ISPS Code (including without limitation) an ISSC.

5 Favourable legal opinions from lawyers appointed by the Agent on such matters concerning the laws of the applicable Approved Flag State and such other relevant jurisdictions as the Agent may require.

6 A valuation of the relevant Ship to be determined by two Approved Brokers selected by the Agent in accordance with Clause 15.4 (Value of additional vessel security) and addressed to the Agent dated no earlier than 14 days prior to the Delivery Date for the relevant Ship.

91

7 (if applicable) a copy of the Approved Charter in respect of the relevant Ship.

8 A favourable opinion from an independent insurance consultant acceptable to the Agent on such matters relating to the insurances for the Ship as the Agent may require.

9 Evidence that the fees, costs and expenses then due from the Borrower pursuant to Clause 20 (Fees and Expenses) have been paid or will be paid by the Drawdown Date.

10 If the Agent so requires, in respect of any of the documents referred to above, a certified English translation prepared by a translator approved by the Agent.

Each of the documents specified in paragraphs 2, 3, 5 and 7 of Part A and every other copy document delivered under this Schedule shall be certified as a true and up to date copy by a director or the secretary (or equivalent officer) of the Borrower or the relevant Owner.

92

SCHEDULE 4
TRANSFER CERTIFICATE

The Transferor and the Transferee accept exclusive responsibility for ensuring that this Certificate and the transaction to which it relates comply with all legal and regulatory requirements applicable to them respectively.

To: [Name of Agent] for itself and for and on behalf of the Borrower, [each Security Party], the Security Trustee, each Lender, the Lead Arrangers, the Bookrunner and the Swap Banks as defined in the Loan Agreement referred to below.

[l]

1 This Certificate relates to a Loan Agreement (the "Loan Agreement") dated [l] and made between (1) [l] (the "Borrower"), (2) the banks and financial institutions named therein, (3) the banks and financial institutions named therein as Lead Arrangers and Swap Banks, (4) [l] as Bookrunner, (5) [l] as Agent and (6) [l] as Security Trustee for a loan facility of up to US$160,000,000.

2 In this Certificate, terms defined in the Loan Agreement shall, unless the contrary intention appears, have the same meanings and:

"Relevant Parties" means the Agent, the Borrower, [each Security Party], the Security Trustee and each Lender;

"Transferor" means [full name] of [lending office]; and

"Transferee" means [full name] of [lending office].

3 The effective date of this Certificate is [l] Provided that this Certificate shall not come into effect unless it is signed by the Agent on or before that date.

4 The Transferor assigns to the Transferee absolutely all rights and interests (present, future or contingent) which the Transferor has as Lender under or by virtue of the Loan Agreement and every other Finance Document in relation to [l] per cent. of its Contribution, which percentage represents $[l].

5 By virtue of this Transfer Certificate and Clause 26 of the Loan Agreement, the Transferor is discharged [entirely from its Commitment which amounts to $[l]] [from [l] per cent. of its Commitment, which percentage represents $[l]] and the Transferee acquires a Commitment of $[l].

6 The Transferee undertakes with the Transferor and each of the Relevant Parties that the Transferee will observe and perform all the obligations under the Finance Documents which Clause 26 of the Loan Agreement provides will become binding on it upon this Certificate taking effect.

7 The Agent, at the request of the Transferee (which request is hereby made) accepts, for the Agent itself and for and on behalf of every other Relevant Party, this Certificate as a Transfer Certificate taking effect in accordance with Clause 26 of the Loan Agreement.

8 The Transferor:

(a) warrants to the Transferee and each Relevant Party that:

93

(i) the Transferor has full capacity to enter into this transaction and has taken all corporate action and obtained all consents which are in connection with this transaction; and

(ii) this Certificate is valid and binding as regards the Transferor;

(b) warrants to the Transferee that the Transferor is absolutely entitled, free of encumbrances, to all the rights and interests covered by the assignment in paragraph 4; and

(c) undertakes with the Transferee that the Transferor will, at its own expense, execute any documents which the Transferee reasonably requests for perfecting in any relevant jurisdiction the Transferee's title under this Certificate or for a similar purpose.

9 The Transferee:

(a) confirms that it has received a copy of the Loan Agreement and each other Finance Document;

(b) agrees that it will have no rights of recourse on any ground against any of the Borrower, the Transferor, the Agent, the Security Trustee or any Lender in the event that:

(i) any of the Finance Documents prove to be invalid or ineffective,

(ii) the Borrower or any Security Party fails to observe or perform its obligations, or to discharge its liabilities, under any of the Finance Documents; and

(iii) it proves impossible to realise any asset covered by a Security Interest created by a Finance Document, or the proceeds of such assets are insufficient to discharge the liabilities of the Borrower or Security Party under the Finance Documents;

(c) agrees that it will have no rights of recourse on any ground against the Agent, the Security Trustee or any Lender in the event that this Certificate proves to be invalid or ineffective;

(d) warrants to the Transferor and each Relevant Party that:

(i) it has full capacity to enter into this transaction and has taken all corporate action and obtained all consents which it needs to take or obtain in connection with this transaction; and

(ii) this Certificate is valid and binding as regards the Transferee; and

(e) confirms the accuracy of the administrative details set out below regarding the Transferee.

10 The Transferor and the Transferee each undertake with the Agent and the Security Trustee severally, on demand, fully to indemnify the Agent and/or the Security Trustee in respect of any claim, proceeding, liability or expense (including all legal expenses) which they or either of them may incur in connection with this Certificate or any matter arising out of it, except such as are shown to have been mainly and directly caused by the gross and culpable negligence or dishonesty of the Agent's or the Security Trustee's own officers or employees.

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

94

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

Agent

Signed for itself and for and on behalf of itself

as Agent and for every other Relevant Party

[Name of Agent]

By:

Date:

95

Administrative Details of Transferee

Name of Transferee:

Lending Office:

Contact Person

(Loan Administration Department):

Telephone:

Fax:

Contact Person

(Credit Administration Department):

Telephone:

Fax:

Account for payments:

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

96

SCHEDULE 5
SHIPS, OWNERS, ACCOUNTS, CLASSIFICATION AND APPROVED FLAG DETAILS

Ship	Owner	Account No	Type/dwt	Classification	Place of Incorporation / Approved Flag	Contract Price ($)	AdvanceDrawdown Amount ($)	Scheduled/Actual Delivery Date
PROSPEROUS SEAS	Coral Ventures Inc	0045357201	Handysize / 37,293	LR + 100A1 Bulk Carrier, CSR, BC-A, (Holds No 2, 4 may be empty) GRAB [25], ESP, Ship Right CM, Ship Right ACS[B], Ice Class 1C, *IWS, LI, EP, +LMC, UMS Ship Right descriptive notes BWMP[S+F], SCM	Liberia / Liberia	N/A	N/A	4 May 2012
PRECIOUS SEAS	Winselet Shipping & Trading Co. Ltd.	0045358501	Handysize / 37,205	LR + 100A1 Bulk Carrier, CSR, BC-A, (Holds No 2, 4 may be empty) GRAB [25], ESP, Ship Right CM, Ship Right ACS[B], Ice Class 1C, *IWS, LI, EP, +LMC, UMS Ship Right descriptive notes BWMP[S+F], SCM	Liberia / Liberia	N/A	N/A	18 June 2012

97

Ship	Owner	Account No	Type/dwt	Classification	Place of Incorporation / Approved Flag	Contract Price ($)	AdvanceDrawdown Amount ($)	Scheduled/Actual Delivery Date
PRICELESS SEAS	Aminta International S.A.	0045359801	Handysize / 37,202	LR + 100A1 Bulk Carrier, CSR, BC-A, (Holds No 2, 4 may be empty) GRAB [25], ESP, Ship Right CM, Ship Right ACS[B], Ice Class 1C, *IWS, LI, EP, +LMC, UMS Ship Right descriptive notes BWMP[S+F], SCM	Liberia / Liberia	N/A	N/A	29 January 2013
PROUD SEAS	Adonia Enterprises S.A.	0045361101	Handysize / 37,200	LR + 100A1 Bulk Carrier, CSR, BC-A, (Holds No 2, 4 may be empty) GRAB [25], ESP, Ship Right CM, Ship Right ACS[B], Ice Class 1C, *IWS, LI, EP, +LMC, UMS Ship Right descriptive notes BWMP[S+F], SCM	Liberia / Liberia	N/A	N/A	7 January 2014
CORAL SEAS	Imperator I Maritime Company	46901602	Panamax 74,477	[GL +100A5 Bulk Carrier ESP RSD DBC DG C1D11 Strengthened for Heavy Cargo Hold No. 2, 4 and 6 may be empty, Hold No. 4 may be ballasted]	Marshall Islands / Liberia	N/A	N/A	21 November 2007

98

Ship	Owner	Account No	Type/dwt	Classification	Place of Incorporation / Approved Flag	Contract Price ($)	AdvanceDrawdown Amount ($)	Scheduled/Actual Delivery Date
GOLDEN SEAS	Canyon I Navigation Corp	46900302	Panamax 74,475	[GL +100A5 Bulk Carrier ESP RSD DBC DG C1D11 Strengthened for Heavy Cargo Hold No. 2, 4 and 6 may be empty, Hold No. 4 may be ballasted]	Marshall Islands / Liberia	N/A	N/A	10 December 2006
DY4050	Amphitrite Shipping Inc.	46897702	Ultramax 63,500	BV 1+ +HULL, +MACH, Bulk Carrier CSR, BC-A (holds 2, 4 may be empty) ESP, unrestricted navigation, GRAB[25], VeriSTARHULL, +AUT-UMS, GREEN PASSPORT, CLEANSHIP, MONSHAFT, INWATERSURVEY	Liberia / Malta, Marshall Islands or Liberia (as per the Shipbuilding Contract)	25,896,869	19,000,000	30 April 2015

99

Ship	Owner	Account No	Type/dwt	Classification	Place of Incorporation / Approved Flag	Contract Price ($)	AdvanceDrawdown Amount ($)	Scheduled/Actual Delivery Date
DY4052	Mirabel International Maritime Co.	46899002	Ultramax 63,500	BV 1+ +HULL, +MACH, Bulk Carrier CSR, BC-A (holds 2, 4 may be empty) ESP, unrestricted navigation, GRAB[25], VeriSTARHULL, +AUT-UMS, GREEN PASSPORT, CLEANSHIP, MONSHAFT, INWATERSURVEY	Liberia / Malta, Marshall Islands or Liberia (as per the Shipbuilding Contract)	25,896,869	19,000,000	30 June 2015
1144	Dolphin Sunrise Ltd.	46895102	Kamsarmax 81,800	+A1 (E) Bulk Carrier, CSR, CPS, BC-A {Holds 2, 4, and 6 may be empty}, Grab[20], AB-CM, ESP, UWILD, +AMS, +ACCU, TCM	Marshall Islands / to be confirmed (as per the Shipbuilding Contract)	30,550,000	20,000,000	30 April 2015
1145	Nautilus Investment Limited	46896402	Kamsarmax 81,800	+A1 (E) Bulk Carrier, CSR, CPS, BC-A {Holds 2, 4, and 6 may be empty}, Grab[20], AB-CM, ESP, UWILD, +AMS, +ACCU, TCM	Marshall Islands / to be confirmed (as per the Shipbuilding Contract)	30,550,000	20,000,000	30 June 2015

100

SCHEDULE 6
FORM OF COMPLIANCE CERTIFICATE

To: Nordea Bank Finland Plc, London Branch City Place House 55 Basinghall Street London EC2V 5NB

Date: [l]

Dear Sirs

We refer to a loan agreement dated [l] 2014 (the "Loan Agreement") made between Paragon Shipping Inc. as borrower and the Lenders, Lead Arranges and Swap Banks referred to therein and yourselves as Agent, Bookrunner and as Security Trustee.

Words and expressions defined in the Loan Agreement shall have the same meaning when used in this compliance certificate.

We enclose with this certificate a copy of the [unaudited consolidated accounts for the Group for the 3-month period ended [l]]/[the audited consolidated annual accounts of the Group for the year ended [l]].  The accounts (i) have been prepared in accordance with all applicable laws and GAAP consistently applied, (ii) give a true and fair view of the state of affairs of the Group at the date of the accounts and of its profit for the period to which the accounts relate and (iii) fully disclose or provide for all significant liabilities of the Group.

We also enclose copies of the valuations of all the Fleet Vessels which were used in calculating the Market Values of the Fleet Vessels as at [l].

The Borrower represents that no Event of Default has occurred as at the date of this certificate [except for the following matter or event [set out all material details of matter or event]].  In addition as of [l], the Borrower confirms compliance with the financial covenants set out in Clause 12.6 of the Loan Agreement for the 3 months ending as at the date to which the enclosed accounts are prepared.

We now certify that, for the Group on a consolidated basis, as at [l];

(a) total current assets (including restricted but unpledged cash representing minimum liquidity required to be maintained under any Financial Indebtedness) less current liabilities is $[l], calculated as shown in Appendix A versus the required amount of $ 0;

(b) there is available to the Borrower and all the other members of the Group freely disposable cash and cash equivalents (including restricted but unpledged cash representing minimum liquidity required to be maintained under any Financial Indebtedness) not subject to any Security Interest an aggregate amount of $[l] calculated as shown in Appendix B versus the required amount of $ [l];

(c) market value adjusted shareholders' equity of the Borrower to total market value adjusted assets of the Group was at all times equal to or greater than [l] calculated as claims in Appendix C;

(d) the ratio of the aggregate Market Value (determined as provided in Clause 15.3 (Valuation of Ship)) of the Ships subject to a Mortgage (plus the net realisable value of any additional security previously provided under Clause 15 (Security Cover)) to the Loan is [l]:1.00, calculated as shown in Appendix D versus the required ratio of 135%.

We further refer to Clause 12.4 (b) of the Loan Agreement and hereby certify that, as at [insert date of each dividend payment declaration] and on the date hereof the Borrower [has or has not] [declared or paid dividends] to its shareholders [in the amount of $[l] [insert dividend details per relevant period covered by relevant financial statements] [and no Event of Default had occurred and was continuing at the time of declaration or payment of such dividends nor will result or has resulted from the declaration or payment of such dividends]

This Certificate shall be governed by, and construed in accordance with, English law.

________________________

[l]

Authorised Signatory

PARAGON SHIPPING INC.

2

SCHEDULE 7
DESIGNATION NOTICE

To:	Nordea Bank Finland plc, London Branch
	as Agent
Attn:	Loans Administration
cc:	Shipping Department

[l

Dear Sirs

Loan Agreement dated [l] 2014 made between (i) Paragon Shipping Inc. as Borrower, (ii) the Lenders, (iii) the Swap Banks, (iv) the Lead Arrangers, (v) the Bookrunner, (vi) the Security Trustee and (vii) the Agent (the "Loan Agreement").

We refer to:

1 the Loan Agreement;

2 the Master Agreement dated [l] made between  [l] as Swap Bank and the Borrower; and

3 a Confirmation (as defined in the said Master Agreement) delivered pursuant to the said Master Agreement dated [l] and addressed by to us.

In accordance with the terms of the Loan Agreement, we hereby give you notice of the said Confirmation and hereby confirm that the Transaction evidenced by it complies with the requirements to be, and will be designated as a "Designated Transaction" for the purposes of the Loan Agreement and the Finance Documents.

Yours faithfully

for and on behalf of	Countersigned for and on behalf of
Paragon Shipping Inc.	[l] as Swap Bank

3

EXECUTION PAGES

BORROWERS
SIGNED by George Macheras	)	/s/ George Macheras
	)	Attorney –in-fact
for and on behalf of	)
PARAGON SHIPPING INC.	)	/s/ Kulraj Badhesha
in the presence of:	)	Attorney –in-Fact
/s/ Meryl Rowlands
Meryl Rowlands
Trainee Solicitor
London EC2A 2HB
LENDERS
SIGNED by Patrick Smith	)	/s/ Patrick Smith
	)	Attorney –in-Fact
for and on behalf of	)
NORDEA BANK FINLAND PLC, LONDON BRANCH	)
in the presence of:	)
/s/ Meryl Rowlands
Meryl Rowlands
Trainee Solicitor
London EC2A 2HB
SIGNED by Patrick Smith	)	/s/ Patrick Smith
	)	Attorney –in-Fact
for and on behalf of	)
NIBC BANK N.V.	)
in the presence of:	)
/s/ Meryl Rowlands
Meryl Rowlands
Trainee Solicitor
London EC2A 2HB
SIGNED by Patrick Smith	)	/s/ Patrick Smith
	)	Attorney –in-Fact
for and on behalf of	)
ITF INTERNATIONAL TRANSPORT FINANCE SUISSE AG	)
in the presence of:	)
/s/ Meryl Rowlands
Meryl Rowlands
Trainee Solicitor
London EC2A 2HB
SIGNED by Patrick Smith	)	/s/ Patrick Smith
	)	Attorney –in-Fact
for and on behalf of	)
SKANDINAVISKA ENSKILDA BANKEN AB (PUBL)	)
in the presence of:	)
/s/ Meryl Rowlands
Meryl Rowlands
Trainee Solicitor
London EC2A 2HB

4

LEAD ARRANGERS
SIGNED by Patrick Smith	)	/s/ Patrick Smith
	)	Attorney –in-Fact
for and on behalf of	)
NORDEA BANK FINLAND PLC, LONDON BRANCH	)
in the presence of:	)
/s/ Meryl Rowlands
Meryl Rowlands
Trainee Solicitor
London EC2A 2HB
SIGNED by Patrick Smith	)	/s/ Patrick Smith
	)	Attorney –in-Fact
for and on behalf of	)
NIBC BANK N.V.	)
in the presence of:	)
/s/ Meryl Rowlands
Meryl Rowlands
Trainee Solicitor
London EC2A 2HB
SIGNED by Patrick Smith	)	/s/ Patrick Smith
	)	Attorney –in-Fact
for and on behalf of	)
ITF INTERNATIONAL TRANSPORT FINANCE SUISSE AG	)
in the presence of:	)
/s/ Meryl Rowlands
Meryl Rowlands
Trainee Solicitor
London EC2A 2HB
SIGNED by Patrick Smith	)	/s/ Patrick Smith
	)	Attorney –in-Fact
for and on behalf of	)
SKANDINAVISKA ENSKILDA BANKEN AB (PUBL)	)
in the presence of:	)
/s/ Meryl Rowlands
Meryl Rowlands
Trainee Solicitor
London EC2A 2HB
SWAP BANKS
SIGNED by Patrick Smith	)	/s/ Patrick Smith
	)	Attorney –in-Fact
for and on behalf of	)
NORDEA BANK FINLAND PLC, LONDON BRANCH	)
in the presence of:	)
/s/ Meryl Rowlands
Meryl Rowlands
Trainee Solicitor
London EC2A 2HB

5

SIGNED by Patrick Smith	)	/s/ Patrick Smith
	)	Attorney –in-Fact
for and on behalf of	)
NIBC BANK N.V.	)
in the presence of:	)
/s/ Meryl Rowlands
Meryl Rowlands
Trainee Solicitor
London EC2A 2HB
SIGNED by Patrick Smith	)	/s/ Patrick Smith
	)	Attorney –in-Fact
for and on behalf of	)
SKANDINAVISKA ENSKILDA BANKEN AB (PUBL)	)
in the presence of:	)
/s/ Meryl Rowlands
Meryl Rowlands
Trainee Solicitor
London EC2A 2HB
BOOKRUNNER
SIGNED by Patrick Smith	)	/s/ Patrick Smith
	)	Attorney –in-Fact
for and on behalf of	)
NORDEA BANK FINLAND PLC, LONDON BRANCH	)
in the presence of:	)
/s/ Meryl Rowlands
Meryl Rowlands
Trainee Solicitor
London EC2A 2HB
AGENT
SIGNED by Patrick Smith	)	/s/ Patrick Smith
	)	Attorney –in-Fact
for and on behalf of	)
NORDEA BANK FINLAND PLC, LONDON BRANCH	)
in the presence of:	)
/s/ Meryl Rowlands
Meryl Rowlands
Trainee Solicitor
London EC2A 2HB
SECURITY TRUSTEE
SIGNED by Patrick Smith	)	/s/ Patrick Smith
	)	Attorney –in-Fact
for and on behalf of	)
NORDEA BANK FINLAND PLC, LONDON BRANCH	)
in the presence of:	)
/s/ Meryl Rowlands
Meryl Rowlands
Trainee Solicitor
London EC2A 2HB

6

EX-4.71

Exhibit 4.71

Private & Confidential

Dated 30 September 2014

SIXTH SUPPLEMENTAL AGREEMENT

relating to a secured credit facility of

up to US$90,000,000

to

PARAGON SHIPPING INC.

as Borrower

provided by

THE BANKS AND FINANCIAL INSTITUTIONS

listed in schedule 1

as Lenders

Arranger, Agent and Security Trustee

UNICREDIT BANK AG

(formerly known as BAYERISCHE HYPO- UND VEREINSBANK AG)

Swap Bank

UNICREDIT BANK AG

(formerly known as BAYERISCHE HYPO- UND VEREINSBANK AG)

Contents

Clause		Page
1	Definitions	2
2	Consent of the Creditor Parties	3
3	Amendments to Principal Agreement and process agent’s address	3
4	Representations and warranties	4
5	Conditions	5
6	Relevant Parties' confirmations	6
7	Expenses	6
8	Miscellaneous and notices	7
9	Applicable law	7
Schedule 1 Names and lending offices of the Lenders		8
Schedule 2 The Owners		9
Schedule 3 The Relevant Ship and its details		10
Schedule 4 Documents and evidence required as conditions precedent		11

THIS SIXTH SUPPLEMENTAL AGREEMENT is dated 30 September 2014 and made BETWEEN:

(1) PARAGON SHIPPING INC., a corporation incorporated in the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 (the "Borrower");

(2) THE BANKS AND FINANCIAL INSTITUTIONS listed in Schedule 1 as Lenders (together the "Lenders");

(3) UNICREDIT BANK AG (formerly known as BAYERISCHE HYPO- UND VEREINSBANK AG) as Agent (the "Agent");

(4) UNICREDIT BANK AG (formerly known as BAYERISCHE HYPO- UND VEREINSBANK AG) as Arranger (the "Arranger");

(5) UNICREDIT BANK AG (formerly known as BAYERISCHE HYPO- UND VEREINSBANK AG) as Security Trustee (the "Security Trustee");

(6) UNICREDIT BANK AG (formerly known as BAYERISCHE HYPO- UND VEREINSBANK AG) as Swap Bank (the "Swap Bank");

(7) THE COMPANIES listed in Schedule 2 as Owners (together the "Owners" and each an "Owner"); and

(8) ALLSEAS MARINE S.A., a corporation organised and existing under the laws of the Republic of Liberia, having its registered office at 80 Broad Street, Monrovia, Liberia and maintaining a ship management office at 15, Karamanli Avenue, 166 73 Voula, Greece (the "Approved Manager").

WHEREAS:

(A) this Agreement is supplemental to a loan agreement dated 19 November 2007 (the "Original Agreement") made between (1) the Borrower as borrower, (2) the Lenders, (3) the Agent, (4) the Arranger, (5) the Security Trustee and (6) the Swap Bank as amended and restated by a first supplemental agreement dated 25 February 2009 (the "First Supplemental Agreement"), as amended and restated by a second supplemental agreement dated 24 March 2010 (the "Second Supplemental Agreement"), as amended and supplemented by a third supplemental agreement dated 29 December 2010 (the "Third Supplemental Agreement"), as amended and supplemented by a fourth supplemental agreement dated 27 October 2011 (the "Fourth Supplemental Agreement"), as further amended and supplemented by a fifth supplemental agreement dated 30 November 2012 (the "Fifth Supplemental Agreement"), a supplemental letter dated 18 January 2013 (the "First Letter"), a second supplemental letter dated 13 September 2013 (the "Second Letter") and a third supplemental letter dated 20 January 2014 (the "Third Letter" and, together with the First Supplemental Agreement, the Second Supplemental Agreement, the Third Supplemental Agreement, the Fourth Supplemental Agreement, the Fifth Supplemental Agreement, the First Letter and the Second Letter, the "Principal Agreement"), made between (inter alios) the Borrower and the Creditor Parties, relating to a secured credit facility of up to Ninety million Dollars ($90,000,000), of which the principal amount outstanding at the date hereof is Twenty two million eighty seven thousand Dollars ($22,087,000), made available by the Lenders to the Borrower upon the terms and conditions set out therein; and

(B) this Agreement sets out the terms and conditions upon which the Creditor Parties agree, at the request of the Borrower:

(a) to amend the Relevant Percentage on the terms set out in this Agreement;

(b) to waive the application of paragraphs (a), (b) and (d) of Clause 12.4 of the Principal Agreement from 3 October 2014 until 27 August 2016; and

(c) to certain consequential changes to the Principal Agreement required in connection with the above and agreed to by the Borrower and the Creditor Parties.

NOW IT IS HEREBY AGREED as follows:

1 Definitions

1.1 Defined expressions

Words and expressions defined in the Principal Agreement shall unless the context otherwise requires or unless otherwise defined herein, have the same meanings when used in this Agreement.

1.2 Definitions

In this Agreement, unless the context otherwise requires:

"Creditor Parties" means the Agent, the Arranger, the Security Trustee, any Lender and the Swap Bank and "Creditor Party" means any of them;

"Effective Date" means the date, no later than 3 October 2014, on which the Agent notifies the Borrower in writing that the Agent has received the documents and evidence specified in Clause 5 and Schedule 4 in a form and substance satisfactory to it;

"Loan Agreement" means the Principal Agreement as amended and supplemented by this Agreement;

"Outgoing Owner" means Opera Navigation Co. listed in Schedule 2 as one of the Owners;

"Relevant Documents" means this Agreement, the Sixth Mortgage Addendum and any other document executed by any Relevant Party in connection with this Agreement;

"Relevant Parties" means the Borrower, the Owners and the Approved Manager or, where the context so requires or permits, means any or all of them;

"Relevant Ship" means the motor vessel listed in Schedule 3 (being one (1) of the Ships referred to in the Principal Agreement); and

"Sixth Mortgage Addendum" means, in relation to the Relevant Ship, the addendum executed or (as the context may require) to be executed by its Owner in favour of the Security Trustee in the form required by the Agent in its sole discretion and supplemental to the Mortgage dated 20 November 2007 executed by such Owner in favour of the Security Trustee.

1.3 Principal Agreement

References in the Principal Agreement to "this Agreement" shall, with effect from the Effective Date and unless the context otherwise requires, be references to the Principal Agreement as amended by this Agreement and words such as "herein", "hereof", "hereunder", "hereafter", "hereby" and "hereto", where they appear in the Principal Agreement, shall be construed accordingly.

1.4 Headings

Clause headings and the table of contents are inserted for convenience of reference only and shall be ignored in the interpretation of this Agreement.

2

1.5 Construction of certain terms

Clauses 1.2 to 1.5 (inclusive) of the Principal Agreement shall apply to this agreement (mutatis mutandis) as if set out herein and as if references therein to "this Agreement" were references to this Agreement.

2 Consent of the Creditor Parties

2.1 Consent

The Creditor Parties, relying upon the representations and warranties made by each of the Relevant Parties in Clause 4, agree with the Borrower that, subject to the terms and conditions of this Agreement and in particular, but without prejudice to the generality of the foregoing, fulfilment on or before 3 October 2014 of the conditions contained in Clause 5 and Schedule 4 , the Creditor Parties agree with effect from the Effective Date:

2.1.1 to amend the Relevant Percentage on the terms set out in clause 3;

2.1.2 to waive the application of paragraphs (a), (b) and (d) of Clause 12.4 of the Principal Agreement from the Effective Date and throughout the remainder of the Security Period; and

2.1.3 to the amendment of the Principal Agreement on the terms set out in Clause 3;

2.2 Release of Outgoing Owner

The Creditor Parties hereby agree that, with effect on and from the Effective Date, the Outgoing Owner be (and it is hereby) released from its obligations arising under the Finance Documents (other than any indemnities given by the Outgoing Owner in any such document) to which it is a party (insofar as any such Finance Document has not been discharged already).

3 Amendments to Principal Agreement and process agent's address

3.1 Amendments to Principal Agreement

The Principal Agreement shall, with effect on and from the Effective Date, be (and it is hereby) amended in accordance with the following provisions and the Principal Agreement (as so amended) will continue to be binding upon the Creditor Parties and the Borrower in accordance with its terms as so amended:

3.1.1 by inserting in Clause 1.1 of the Principal Agreement the following new definitions of "Approved Broker", "Sixth Mortgage Addendum" and "Sixth Supplemental Agreement" in the correct alphabetical order:

""Approved Broker"" means each of H. Clarkson & Company Limited of London, England, Barry Rogliano Salles S.A. of Paris, France, R.S. Platou Shipbrokers S.A. of Oslo, Norway, Arrow Sale & Purchase (UK) Ltd. of London, England, Simpson Spence & Young of London, England, Fearnley AS of Oslo, Norway, Galbraith's Limited of London, England, Gibson Shipbrokers Ltd of London, England, Braemar ACM of London, England and Maersk Brokers of Copenhagen, Denmark;";

""Sixth Mortgage Addendum" means, in relation to m.v. "CALM SEAS", the addendum to the Mortgage over such Ship made or (as the case may be) to be made between the relevant Owner and the Security Trustee;"; and

""Sixth Supplemental Agreement" means the agreement dated 30 September 2014 made between (inter alios) the Borrower and the Creditor Parties supplemental to this Agreement;".

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3.1.2 by deleting the definition of "Relevant Percentage" in Clause 15.1 of the Principal Agreement and by inserting in its place the following new definition of "Relevant Percentage":

"In this clause 15.1, "Relevant Percentage" means 130 per cent.".

3.2 Continued force and effect

Save as amended by this Agreement, the provisions of the Principal Agreement shall continue in full force and effect and the Principal Agreement and this Agreement shall be read and construed as one instrument.

3.3 Change of process agent's address under the Finance Documents

With effect on and from the date of this Agreement, each of the Finance Documents shall be amended so that references to the address of Hill Dickinson Services (London) Limited stated therein as each Relevant Party's agent for receipt of service of process under each of the Finance Documents in which such Relevant Party is a party, shall be amended to "The Broadgate Tower, 20 Primrose Street, London EC2A 2EW, England."

4 Representations and warranties

4.1 Primary representations and warranties

Each of the Relevant Parties represents and warrants to the Creditor Parties that:

4.1.1 Existing representations and warranties

the representations and warranties set out in Clause 10 of the Principal Agreement and Clause 4 of each Guarantee were true and correct on the date of the Principal Agreement and are true and correct, including to the extent that they may have been or shall be amended by this Agreement, as if made on the date of this Agreement with reference to the facts and circumstances existing on such date;

4.1.2 Corporate power

each of the Relevant Parties has power to execute, deliver and perform its obligations under the Relevant Documents to which it is or is to be a party; all necessary corporate, shareholder and other action has been taken by each of the Relevant Parties to authorise the execution, delivery and performance of the Relevant Documents to which it is or is to be a party;

4.1.3 Binding obligations

the Relevant Documents to which it is or is to be a party constitute valid and legally binding obligations of each of the Relevant Parties enforceable in accordance with their terms;

4.1.4 No conflict with other obligations

the execution, delivery and performance of the Relevant Documents to which it is or is to be a party by each of the Relevant Parties will not (i) contravene any existing law, statute, rule or regulation or any judgment, decree or permit to which any of the Relevant Parties is subject, (ii) conflict with, or result in any breach of any of the terms of, or constitute a default under, any agreement or other instrument to which any of the Relevant Parties is a party or is subject or by which it or any of its property is bound or (iii) contravene or conflict with any provision of the constitutional documents of any of the Relevant Parties or (iv) result in the creation or imposition of or oblige any of the Relevant Parties to create any Security Interest (other than a Permitted Security Interest) on any of the undertaking, assets, rights or revenues of any of the Relevant Parties;

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4.1.5 No filings required

save for the registration of the Sixth Mortgage Addendum with the relevant ship registry, it is not necessary to ensure the legality, validity, enforceability or admissibility in evidence of any of the Relevant Documents that they or any other instrument be notarised, filed, recorded, registered or enrolled in any court, public office or elsewhere in any Pertinent Jurisdiction or that any stamp, registration or similar tax or charge be paid in any Pertinent Jurisdiction on or in relation to the Relevant Documents and each of the Relevant Documents is in proper form for its enforcement in the courts of each Pertinent Jurisdiction;

4.1.6 Choice of law

the choice of English law to govern the Relevant Documents (other than the Sixth Mortgage Addendum), the choice of the Marshall Islands law to govern the Sixth Mortgage Addendum, and the submissions by the Relevant Parties to the non‑exclusive jurisdiction of the English courts are valid and binding; and

4.1.7 Consents obtained

every consent, authorisation, licence or approval of, or registration or declaration to, governmental or public bodies or authorities or courts required by any of the Relevant Parties in connection with the execution, delivery, validity, enforceability or admissibility in evidence of the Relevant Documents to which it is or will become a party or the performance by any of the Relevant Parties of their respective obligations under such documents has been obtained or made and is in full force and effect and there has been no default in the observance of any conditions or restrictions (if any) imposed in, or in connection with, any of the same.

4.2 Repetition of representations and warranties

Each of the representations and warranties contained in Clause 4.1 of this Agreement and Clause 10 of the Principal Agreement (as amended by this Agreement) shall be deemed to be repeated by the Relevant Parties on the Effective Date as if made with reference to the facts and circumstances existing on such day.

5 Conditions

5.1 Documents and evidence

The consent of the Creditor Parties referred to in Clause 2 shall be subject to the receipt by the Agent or its duly authorised representative of the documents and evidence specified in Schedule 4 in form and substance satisfactory to the Agent.

5.2 General conditions precedent

The consent of the Creditor Parties referred to in Clause 2 shall be further subject to:

5.2.1 the representations and warranties in Clause 4 being true and correct on the Effective Date as if each was made with respect to the facts and circumstances existing at such time; and

5.2.2 no Event of Default (save for any Event of Default which may exist under Clause 19(f) of the Principal Agreement with regard however only to any Financial Indebtedness of a Relevant Person to any person other than the Creditor Parties pursuant to the Finance Documents) having occurred and continuing at the time of the Effective Date.

5.3 Waiver of conditions precedent

The conditions specified in this Clause 5 are inserted solely for the benefit of the Lenders and the Agent and may be waived by the Agent (acting on the instructions of the Majority Lenders) in whole or in part with or without conditions.

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6 Relevant Parties' confirmations

Each of the Relevant Parties hereby confirms its consent to the amendments to the Principal Agreement and the other arrangements contained in this Agreement (including the release of the Outgoing Owner under clause 2.2) and agrees that:

6.1 each of the Finance Documents (including any Guarantee) to which it is a party, and its obligations thereunder, shall remain in full force and effect notwithstanding the amendments made to the Principal Agreement by this Agreement and the other arrangements contained in this Agreement (including the release of the Outgoing Owner under clause 2.2);

6.2 its obligations under the relevant Finance Documents (including any Guarantee) to which it is a party includes any and all amounts owing by the Borrower under the Principal Agreement as amended by this Agreement; and

6.3 with effect from the Effective Date, references to "the Agreement" or the "the Loan Agreement" in any of the Finance Documents (including any Guarantee) to which it is a party shall henceforth be references to the Principal Agreement as amended by this Agreement and as from time to time hereafter amended.

7 Expenses

7.1 Expenses

The Borrower agrees to pay to the Agent on a full indemnity basis on demand all expenses (including legal and out-of-pocket expenses) incurred by the Creditor Parties or any of them:

7.1.1 in connection with the negotiation, preparation, execution and, where relevant, registration of the Relevant Documents and of any amendment or extension of, or the granting of any waiver or consent under, the Relevant Documents; and

7.1.2 in contemplation of, or otherwise in connection with, the enforcement of, or preservation of any rights under the Relevant Documents or otherwise in respect of the monies owing and obligations incurred under the Relevant Documents,

together with interest at the rate and in the manner referred to in Clause 7 of the Principal Agreement from the date on which such expenses were incurred to the date of payment (as well after as before judgment).

7.2 Value Added Tax

All expenses payable pursuant to this Clause 7 shall be paid together with value added tax or any similar tax (if any) properly chargeable thereon. Any value added tax chargeable in respect of any services supplied by the Creditor Parties or any of them under this Agreement shall, on delivery of the value added tax invoice, be paid in addition to any sum agreed to be paid hereunder.

7.3 Stamp and other duties

The Borrower agrees to pay to the Agent on demand all stamp, documentary, registration or other like duties or taxes (including any duties or taxes payable by the Creditor Parties or any of them) imposed on or in connection with the Relevant Documents and shall indemnify the Creditor Parties against any liability arising by reason of any delay or omission by the Borrower to pay such duties or taxes.

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8 Miscellaneous and notices

8.1 Notices

The provisions of Clause 28 of the Principal Agreement shall extend and apply to the giving or making of notices or demands hereunder as if the same were expressly stated herein and for this purpose any notices to be sent to the Relevant Parties or any of them hereunder shall be sent to the same address as the address indicated for the "Borrower" in the said Clause 28.

8.2 Counterparts

This Agreement may be executed in any number of counterparts and by the different parties on separate counterparts, each of which when so executed and delivered shall be an original but all counterparts shall together constitute one and the same instrument.

9 Applicable law

9.1 Law

This Agreement and any non-contractual obligations in connection with this Agreement are governed by, and shall be construed in accordance with, English law.

9.2 Submission to jurisdiction

Each of the Relevant Parties agrees, for the benefit of the Creditor Parties, that any legal action or proceedings arising out of or in connection with this Agreement (including any non-contractual obligations connected with this Agreement) against any of the Relevant Parties or any of its assets may be brought in the English courts. Each of the Relevant Parties irrevocably and unconditionally submits to the jurisdiction of such courts and irrevocably designates, appoints and empowers Hill Dickinson Services (London) Limited at present of The Broadgate Tower, 20 Primrose Street, London EC2A 2EW, England to receive for it and on its behalf, service of process issued out of the English courts in any such legal action or proceedings. The submission to such jurisdiction shall not (and shall not be construed so as to) limit the right of the Creditor Parties or any of them to take proceedings against any of the Relevant Parties in the courts of any other competent jurisdiction nor shall the taking of proceedings in any one or more jurisdictions preclude the taking of proceedings in any other jurisdiction, whether concurrently or not. The parties further agree that only the Courts of England and not those of any other State shall have jurisdiction to determine any claim which any of the Relevant Parties may have against the Creditor Parties or any of them arising out of or in connection with this Agreement (including any non-contractual obligations connected with this Agreement).

9.3 Contracts (Rights of Third Parties) Act 1999

No term of this Agreement is enforceable under the Contracts (Rights of Third Parties) Act 1999 by a person who is not a party to this Agreement.

IN WITNESS whereof the parties to this Agreement have caused this Agreement to be duly executed on the date first above written.

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Schedule 1 Names and lending offices of the Lenders

Lender	Lending Office
UniCredit Bank AG (formerly known as Bayerische Hypo- Und Vereinsbank AG)	62 Notara Street 185 35 Piraeus Greece

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Schedule 2 The Owners

Frontline Marine Company

Trade Force Shipping S.A.

Opera Navigation Co.

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Schedule 3 The Relevant Ship and its details

(1) Name	(2) IMO No.	(3) Owner
"CALM SEAS"	9184835	Frontline Marine Company

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Schedule 4 Documents and evidence required as conditions precedent

(referred to in Clause 5.1)

1 Corporate authorisation

In relation to each of the Relevant Parties:

(a) Constitutional documents

copies certified by an officer of each of the Relevant Parties, as a true, complete and up to date copies, of all documents which contain or establish or relate to the constitution of that party or a secretary's certificate confirming that there have been no changes or amendments to the constitutional documents certified copies of which were previously delivered to the Agent pursuant to the Principal Agreement;

(b) Resolutions

copies of resolutions of each of its board of directors and, if required, its shareholders/stockholders approving such of the Relevant Documents to which it is or is to be a party and the terms and conditions hereof and thereof and authorising the signature, delivery and performance of each such party's obligations thereunder, certified (in a certificate dated no earlier than five (5) Banking Days prior to the date of this Agreement) by an officer of the Relevant Parties as:

(i) being true and correct;

(ii) being duly passed at meetings of the directors of such Relevant Party and of the shareholders/stockholders of such Relevant Party, each duly convened and held;

(iii) not having been amended, modified or revoked; and

(iv) being in full force and effect,

together with originals or certified copies of any powers of attorney issued by such Relevant Party pursuant to such resolutions; and

(c) Certificate of incumbency

a list of directors and officers of each Relevant Party specifying the names and positions of such persons, certified (in a certificate dated no earlier than five (5) Banking Days prior to the date of this Agreement) by an officer of such Relevant Party to be true, complete and up to date;

2 Relevant Documents

the Sixth Mortgage Addendum, duly executed by the relevant Relevant Party and (in the case of the Sixth Mortgage Addendum only) registered at the relevant ship registry;

3 Consents

a certificate (dated no earlier than five (5) Banking Days prior to the date of this Agreement) from an officer of each of the Relevant Parties stating that no consents, authorisations, licences or approvals are necessary for such Relevant Party to authorise, or are required by each of the Relevant Parties or any other party (other than the Creditor Parties) in connection with, the execution, delivery, and performance of the Relevant Documents to which they are or will be a party;

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4 Prepayment

the Agent has received from the Borrower a prepayment of the Loan in the amount of $7,000,000 together with irrevocable instructions by the Borrower that notwithstanding the provisions of clause 8.12 of the Principal Agreement such amount should be applied upon receipt in prepayment of the Loan and in reduction of the repayment instalments referred to in Clause 8.1 (excluding the balloon payment referred to therein) proportionately, and the Agent and the Lenders have made such application;

5 Legal opinions

such legal opinions in relation to the laws of the Marshall Islands and the Republic of Liberia and any other legal opinions as the Agent shall in its reasonable discretion deem appropriate; and

6 Process agent

an original or certified true copy of a letter from each Relevant Party's agent for receipt of service of proceedings accepting its appointment under this Agreement in which it is or is to be appointed as such Relevant Party's agent.

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BORROWERS
EXECUTED as a Deed by		)	/s/ Katerina
for and on behalf of		)	Attorney-in-fact
PARAGON SHIPPING INC.		)
as Borrower		)	/s/
in the presence of:		)	Attorney-in-fact
/s/ Emmanouil Chamilothoris
Witness
Name:	Emmanouil Chamilothoris
Address:	Norton Rose Fulbright Greece
Occupation:	Attorney
Lenders
Signed by Anastasia Kerpinioti		)	/s/ Nikolaos Tzoumakas
and by Nikolaos Tzoumakas		)	Authorised Signatory
for and on behalf of		)
UNICREDIT BANK AG (formerly known as		)	/s/ Nikolaos Tzoumakas
BAYERISCHE HYPO- UND VEREINSBANK AG)		)	Authorised Signatory
as Lender		)
Agent
Signed by Anastasia Kerpinioti		)	/s/ Nikolaos Tzoumakas
and by Nikolaos Tzoumakas		)	Authorised Signatory
for and on behalf of		)
UNICREDIT BANK AG (formerly known as		)	/s/ Nikolaos Tzoumakas
BAYERISCHE HYPO- UND VEREINSBANK AG)		)	Authorised Signatory
as Agent		)
Arranger
Signed by Anastasia Kerpinioti		)	/s/ Nikolaos Tzoumakas
and by Nikolaos Tzoumakas		)	Authorised Signatory
for and on behalf of		)
UNICREDIT BANK AG (formerly known as		)	/s/ Nikolaos Tzoumakas
BAYERISCHE HYPO- UND VEREINSBANK AG)		)	Authorised Signatory
as Arranger		)
Swap Bank
Signed by Anastasia Kerpinioti		)	/s/ Nikolaos Tzoumakas
and by Nikolaos Tzoumakas		)	Authorised Signatory
for and on behalf of		)
UNICREDIT BANK AG (formerly known as		)	/s/ Nikolaos Tzoumakas
BAYERISCHE HYPO- UND VEREINSBANK AG)		)	Authorised Signatory
as Swap Bank		)

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Security Trustee
Signed by Anastasia Kerpinioti		)	/s/ Nikolaos Tzoumakas
and by Nikolaos Tzoumakas		)	Authorised Signatory
for and on behalf of		)
UNICREDIT BANK AG (formerly known as		)	/s/ Nikolaos Tzoumakas
BAYERISCHE HYPO- UND VEREINSBANK AG)		)	Authorised Signatory
as Security Trustee		)
OWNERS
EXECUTED as a Deed by		)	/s/ Katerina Stoupa
for and on behalf of		)	Attorney-in-fact
FRONTLINE MARINE COMPANY		)
as Owner		)
in the presence of:		)
/s/ Emmanouil Chamilothoris
Witness
Name:	Emmanouil Chamilothoris
Address:	Norton Rose Fulbright Greece
Occupation:	Attorney
EXECUTED as a Deed by		)	/s/ Katerina Stoupa
for and on behalf of		)	Attorney-in-fact
TRADE FORCE SHIPPING S.A.		)
as Owner		)
in the presence of:		)
/s/ Emmanouil Chamilothoris
Witness
Name:	Emmanouil Chamilothoris
Address:	Norton Rose Fulbright Greece
Occupation:	Attorney
EXECUTED as a Deed by		)	/s/ Katerina Stoupa
for and on behalf of		)	Attorney-in-fact
OPERA NAVIGATION CO.		)
as Owner		)
in the presence of:		)
/s/ Emmanouil Chamilothoris
Witness
Name:	Emmanouil Chamilothoris
Address:	Norton Rose Fulbright Greece
Occupation:	Attorney

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Approved Manager
EXECUTED as a Deed by		)	/s/ Katerina Stoupa
for and on behalf of		)	Attorney-in-fact
ALLSEAS MARINE S.A.		)
as Approved Manager		)
in the presence of:		)
/s/ Emmanouil Chamilothoris
Witness
Name:	Emmanouil Chamilothoris
Address:	Norton Rose Fulbright Greece
Occupation:	Attorney

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EX-4.72

Exhibit 4.72

Private & Confidential

Dated 27 March 2015

SEVENTH SUPPLEMENTAL AGREEMENT

relating to a secured credit facility of

up to US$90,000,000

to

PARAGON SHIPPING INC.

as Borrower

provided by

THE BANKS AND FINANCIAL INSTITUTIONS

listed in schedule 1

as Lenders

Arranger, Agent and Security Trustee

UNICREDIT BANK AG

(formerly known as BAYERISCHE HYPO- UND VEREINSBANK AG)

Swap Bank

UNICREDIT BANK AG

(formerly known as BAYERISCHE HYPO- UND VEREINSBANK AG)

CONTENTS

Clause		Page
1	Definitions	2
2	Consent of the Creditor Parties	3
3	Amendments to Principal Agreement	3
4	Representations and warranties	5
5	Conditions	6
6	Relevant Parties' confirmations	6
7	Fees and Expenses	7
8	Miscellaneous and notices	8
9	Applicable law	8
Schedule 1 Names and lending offices of the Lenders		9
Schedule 2 The Owners		10
Schedule 3 The Relevant Ship and its details		11
Schedule 4 Documents and evidence required as conditions precedent		12

THIS SEVENTH SUPPLEMENTAL AGREEMENT is dated          March 2015 and made BETWEEN:

(1) PARAGON SHIPPING INC., a corporation incorporated in the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 (the "Borrower");

(2) THE BANKS AND FINANCIAL INSTITUTIONS listed in Schedule 1 as Lenders (together the "Lenders");

(3) UNICREDIT BANK AG (formerly known as BAYERISCHE HYPO- UND VEREINSBANK AG) as Agent (the "Agent");

(4) UNICREDIT BANK AG (formerly known as BAYERISCHE HYPO- UND VEREINSBANK AG) as Arranger (the "Arranger");

(5) UNICREDIT BANK AG (formerly known as BAYERISCHE HYPO- UND VEREINSBANK AG) as Security Trustee (the "Security Trustee");

(6) UNICREDIT BANK AG (formerly known as BAYERISCHE HYPO- UND VEREINSBANK AG) as Swap Bank (the "Swap Bank");

(7) THE COMPANIES listed in Schedule 2 as Owners (together the "Owners" and each an "Owner"); and

(8) ALLSEAS MARINE S.A., a corporation organised and existing under the laws of the Republic of Liberia, having its registered office at 80 Broad Street, Monrovia, Liberia and maintaining a ship management office at 15, Karamanli Avenue, 166 73 Voula, Greece (the "Approved Manager").

WHEREAS:

(A) this Agreement is supplemental to a loan agreement dated 19 November 2007 (the "Original Agreement") made between (1) the Borrower as borrower, (2) the Lenders, (3) the Agent, (4) the Arranger, (5) the Security Trustee and (6) the Swap Bank as amended and restated by a first supplemental agreement dated 25 February 2009 (the "First Supplemental Agreement"), as amended and restated by a second supplemental agreement dated 24 March 2010 (the "Second Supplemental Agreement"), as amended and supplemented by a third supplemental agreement dated 29 December 2010 (the "Third Supplemental Agreement"), as amended and supplemented by a fourth supplemental agreement dated 27 October 2011 (the "Fourth Supplemental Agreement"), as further amended and supplemented by a fifth supplemental agreement dated 30 November 2012 (the "Fifth Supplemental Agreement"), a supplemental letter dated 18 January 2013 (the "First Letter"), a second supplemental letter dated 13 September 2013 (the "Second Letter"), a third supplemental letter dated 20 January 2014 (the "Third Letter") and as further amended and supplemented by a sixth supplemental agreement dated 30 September 2014 (the "Sixth Supplemental Agreement" and, together with the First Supplemental Agreement, the Second Supplemental Agreement, the Third Supplemental Agreement, the Fourth Supplemental Agreement, the Fifth Supplemental Agreement, the First Letter, the Second Letter and the Third Letter, the "Principal Agreement"), made between (inter alios) the Borrower and the Creditor Parties, relating to a secured credit facility of up to Ninety million Dollars ($90,000,000), of which the principal amount outstanding at the date hereof is Fourteen million one hundred and twenty six thousand Dollars ($14,126,000), made available by the Lenders to the Borrower upon the terms and conditions set out therein; and

(B) this Agreement sets out the terms and conditions upon which the Creditor Parties agree, at the request of the Borrower:

(a) to waive the application of paragraph (c) of clause 12.4 of the Principal Agreement from the Effective Date and throughout the remainder of the Security Period;

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(b) to waive the application of clause 15.1 of the Principal Agreement from the Effective Date and throughout the remainder of the Security Period;

(c) to grant the Borrower a deferral option for certain repayment instalments as specified herein;

(d) to amend clause 12.10 of the Principal Agreement as specified herein; and

(e) to certain other changes to the Principal Agreement agreed to by the Borrower and the Creditor Parties.

NOW IT IS HEREBY AGREED as follows:

1 Definitions

1.1 Defined expressions

Words and expressions defined in the Principal Agreement shall unless the context otherwise requires or unless otherwise defined herein, have the same meanings when used in this Agreement.

1.2 Definitions

In this Agreement, unless the context otherwise requires:

"Creditor Parties" means the Agent, the Arranger, the Security Trustee, any Lender and the Swap Bank and "Creditor Party" means any of them;

"Effective Date" means the date, no later than 27 March 2015, on which the Agent notifies the Borrower in writing that the Agent has received the documents and evidence specified in clause 5 and Schedule 4 in a form and substance satisfactory to it;

"Loan Agreement" means the Principal Agreement as amended and supplemented by this Agreement;

"Relevant Documents" means this Agreement, the Seventh Mortgage Addendum and any other document executed by any Relevant Party in connection with this Agreement;

"Relevant Parties" means the Borrower, the Owners and the Approved Manager or, where the context so requires or permits, means any or all of them;

"Relevant Ship" means the motor vessel listed in Schedule 3 (being one (1) of the Ships referred to in the Principal Agreement); and

"Seventh Mortgage Addendum" means, in relation to the Relevant Ship, the addendum executed or (as the context may require) to be executed by its Owner in favour of the Security Trustee in the form required by the Agent in its sole discretion and supplemental to the Mortgage dated 20 November 2007, as amended and supplemented from time to time, executed by such Owner in favour of the Security Trustee.

1.3 Principal Agreement

References in the Principal Agreement to "this Agreement" shall, with effect from the Effective Date and unless the context otherwise requires, be references to the Principal Agreement as amended by this Agreement and words such as "herein", "hereof", "hereunder", "hereafter", "hereby" and "hereto", where they appear in the Principal Agreement, shall be construed accordingly.

1.4 Headings

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Clause headings and the table of contents are inserted for convenience of reference only and shall be ignored in the interpretation of this Agreement.

1.5 Construction of certain terms

Clauses 1.2 to 1.5 (inclusive) of the Principal Agreement shall apply to this agreement (mutatis mutandis) as if set out herein and as if references therein to "this Agreement" were references to this Agreement.

2 Consent of the Creditor Parties

2.1 Consent

The Creditor Parties, relying upon the representations and warranties made by each of the Relevant Parties in clause 4, agree with the Borrower that, subject to the terms and conditions of this Agreement and in particular, but without prejudice to the generality of the foregoing, fulfilment on or before 27 March  2015 of the conditions contained in clause 5 and Schedule 4 , the Creditor Parties agree with effect from the Effective Date:

2.1.1 to waive the application of paragraph (c) of clause 12.4 of the Principal Agreement from the Effective Date and throughout the remainder of the Security Period;

2.1.2 to waive the application of clause 15.1 of the Principal Agreement from the Effective Date and throughout the remainder of the Security Period; and

2.1.3 to the amendment of the Principal Agreement on the terms set out in clause 3.

3 Amendments to Principal Agreement

3.1 Amendments to Principal Agreement

The Principal Agreement shall, with effect on and from the Effective Date, be (and it is hereby) amended in accordance with the following provisions and the Principal Agreement (as so amended) will continue to be binding upon the Creditor Parties and the Borrower in accordance with its terms as so amended:

3.1.1 by inserting in clause 1.1 of the Principal Agreement the following new definitions of "Seventh Mortgage Addendum" and "Seventh Supplemental Agreement" in the correct alphabetical order:

""Seventh Mortgage Addendum" means, in relation to m.v. "CALM SEAS", the addendum to the Mortgage over such Ship made or (as the case may be) to be made between the relevant Owner and the Security Trustee;"; and

""Seventh Supplemental Agreement" means the agreement dated 27 March 2015 made between (inter alios) the Borrower and the Creditor Parties supplemental to this Agreement;";

3.1.2 by deleting clause 8.16 of the Principal Agreement in its entirety and by inserting in its place the following new clause 8.16:

"8.16 Deferral option

8.16.1 Subject to the other provisions of this Clause 8.16, the Borrower may, at any time during the Security Period, elect to defer the repayment of any one or all of each of the fifteenth to the twentieth (inclusive) repayment instalments (referred to in Clause 8.1), as follows:

(a) an amount of up to $480,500 in respect of the fifteenth repayment instalment only; and

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(b) an amount of up to $240,250 in respect of each one of the sixteenth to the twentieth (inclusive) repayment instalments.

8.16.2 A repayment instalment which has been deferred pursuant to this Clause 8.16, shall be repaid together with the balloon payment (referred to in Clause 8.1).

8.16.3 The deferral option for each repayment instalment shall be exercisable by a written irrevocable notice from the Borrower to the Agent (a "Deferral Notice"), specifying the relevant repayment instalment which is to be deferred, and the Borrower shall send such Deferral Notice to the Agent not later than ten (10) days prior to the Repayment Date on which the repayment instalment to be deferred would, but for such proposed deferral, have been due.

8.16.4 The Borrower may not exercise its option referred to in Clause 8.16.1 or send a Deferral Notice if the Borrower has failed to provide the evidence and documents set out in Clause 5.3.2 of the Seventh Supplemental Agreement within the time limits specified therein. If notwithstanding the above, the Borrower has exercised its option referred to in Clause 8.16.1 or sent a Deferral Notice prior to the deadlines specified in Clause 5.3.2 of the Seventh Supplemental Agreement and it subsequently fails to provide the evidence and documents required under such clause within the time limits specified therein (which, for the avoidance of doubt, shall constitute an Event of Default), then any repayment instalments so deferred at that time:

(a) if their original Repayment Date has already passed, shall be due and payable in full by the Borrower on demand by the Agent; or

(b) if their original Repayment Date had not yet passed, shall be payable on their original Repayment Dates as if no deferral option had  been exercised or no Deferral Notice has been sent by the Borrower to the Agent under this Clause 8.16.";

3.1.3 by inserting the following new sub-paragraph (g) before the existing sub-paragraph (g) of clause 12.9 of the Principal Agreement and by renumbering existing sub-paragraph (g) of the Principal Agreement accordingly as new sub-paragraph (h):

"(g) all amounts of all repayment instalments which have been deferred pursuant to Clause 8.16 have been repaid or prepaid in full under Clause 8.3; and";

3.1.4 by deleting clause 12.10 of the Principal Agreement in its entirety and by replacing it with the following new clause 12.10:

"12.10 Minimum blocked balances. The Borrower shall maintain at all times in the Cash Collateral Account, cash balances which are no less than $750,000 per Ship which is subject to a Mortgage Provided however that the Borrower may withdraw moneys from the Cash Collateral Account only for the following purposes and subject to the following conditions (and up to the entire amount of the available balance of such account from time to time):

(a) to repay any part of any or all the sixteenth to the twentieth instalments (inclusive) of the Loan in accordance with Clause 8.1 Provided however that the evidence set out in Clause 5.3.2 of the Seventh Supplemental Agreement has been delivered to the Agent within the time-limit specified therein; and/or

(b) as to an amount of no more than $480,500, solely to finance working capital needs of the Ships which are subject to a Mortgage."; and

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3.1.5 by inserting after the words "or 5.3.5 of the Fifth Supplemental Agreement" in the second line of sub-paragraph (b) of clause 19.1 of the Principal Agreement the words "or Clause 5.3.2 of the Seventh Supplemental Agreement".

3.2 Continued force and effect

Save as amended by this Agreement, the provisions of the Principal Agreement shall continue in full force and effect and the Principal Agreement and this Agreement shall be read and construed as one instrument.

4 Representations and warranties

4.1 Primary representations and warranties

Each of the Relevant Parties represents and warrants to the Creditor Parties that:

4.1.1 Existing representations and warranties

the representations and warranties set out in clause 10 of the Principal Agreement and clause 4 of each Guarantee were true and correct on the date of the Principal Agreement and are true and correct, including to the extent that they may have been or shall be amended by this Agreement, as if made on the date of this Agreement with reference to the facts and circumstances existing on such date;

4.1.2 Corporate power

each of the Relevant Parties has power to execute, deliver and perform its obligations under the Relevant Documents to which it is or is to be a party; all necessary corporate, shareholder and other action has been taken by each of the Relevant Parties to authorise the execution, delivery and performance of the Relevant Documents to which it is or is to be a party;

4.1.3 Binding obligations

the Relevant Documents to which it is or is to be a party constitute valid and legally binding obligations of each of the Relevant Parties enforceable in accordance with their terms;

4.1.4 No conflict with other obligations

the execution, delivery and performance of the Relevant Documents to which it is or is to be a party by each of the Relevant Parties will not (i) contravene any existing law, statute, rule or regulation or any judgment, decree or permit to which any of the Relevant Parties is subject, (ii) conflict with, or result in any breach of any of the terms of, or constitute a default under, any agreement or other instrument to which any of the Relevant Parties is a party or is subject or by which it or any of its property is bound or (iii) contravene or conflict with any provision of the constitutional documents of any of the Relevant Parties or (iv) result in the creation or imposition of or oblige any of the Relevant Parties to create any Security Interest (other than a Permitted Security Interest) on any of the undertaking, assets, rights or revenues of any of the Relevant Parties;

5

4.1.5 No filings required

save for the registration of the Seventh Mortgage Addendum with the relevant ship registry, it is not necessary to ensure the legality, validity, enforceability or admissibility in evidence of any of the Relevant Documents that they or any other instrument be notarised, filed, recorded, registered or enrolled in any court, public office or elsewhere in any Pertinent Jurisdiction or that any stamp, registration or similar tax or charge be paid in any Pertinent Jurisdiction on or in relation to the Relevant Documents and each of the Relevant Documents is in proper form for its enforcement in the courts of each Pertinent Jurisdiction;

4.1.6 Choice of law

the choice of English law to govern the Relevant Documents (other than the Seventh Mortgage Addendum), the choice of the Marshall Islands law to govern the Seventh Mortgage Addendum, and the submissions by the Relevant Parties to the non‑exclusive jurisdiction of the English courts are valid and binding; and

4.1.7 Consents obtained

every consent, authorisation, licence or approval of, or registration or declaration to, governmental or public bodies or authorities or courts required by any of the Relevant Parties in connection with the execution, delivery, validity, enforceability or admissibility in evidence of the Relevant Documents to which it is or will become a party or the performance by any of the Relevant Parties of their respective obligations under such documents has been obtained or made and is in full force and effect and there has been no default in the observance of any conditions or restrictions (if any) imposed in, or in connection with, any of the same.

4.2 Repetition of representations and warranties

Each of the representations and warranties contained in clause  4.1 of this Agreement and clause 10 of the Principal Agreement (as amended by this Agreement) shall be deemed to be repeated by the Relevant Parties on the Effective Date as if made with reference to the facts and circumstances existing on such day.

5 Conditions

5.1 Documents and evidence

The consent of the Creditor Parties referred to in clause 2 shall be subject to the receipt by the Agent or its duly authorised representative of the documents and evidence specified in Schedule 4 in form and substance satisfactory to the Agent.

5.2 General conditions precedent

The consent of the Creditor Parties referred to in clause 2 shall be further subject to:

5.2.1 the representations and warranties in clause 4 being true and correct on the Effective Date as if each was made with respect to the facts and circumstances existing at such time; and

5.2.2 no Event of Default (save for any Event of Default which may exist under clause 19.1(f) of the Principal Agreement with regard however only to any Financial Indebtedness of a Relevant Person to any person other than the Creditor Parties pursuant to the Finance Documents) having occurred and continuing at the time of the Effective Date.

5.3 Waiver of conditions precedent

5.3.1 The conditions specified in this clause 5 are inserted solely for the benefit of the Lenders and the Agent and may be waived by the Agent (acting on the instructions of the Majority Lenders) in whole or in part with or without conditions.

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5.3.2 If the Borrower has not provided (as required by paragraph 6 of Schedule 4) by the Effective Date evidence in form and substance satisfactory to the Agent in its sole discretion that the Borrower and other members of the Group have entered into binding agreements with all other lenders and creditors of any Financial Indebtedness of the Group (except for the 8.375% senior notes issued by the Borrower in 2014 and due in 2021 (the "Notes")), granting such waivers, relaxation and extension arrangements to the Group, with an analogous effect of those agreed in this Agreement, as are satisfactory to the Agent in its absolute discretion (and that in any event are not more favourable to such other lenders or Creditors than the amendments and waivers agreed in this Agreement are to the Creditor Parties), the Borrower hereby undertakes with the Agent to provide such evidence within 90 days after the Effective Date.  Failure by the Borrower to do so by such time will be an Event of Default under the Principal Agreement.

6 Relevant Parties' confirmations

Each of the Relevant Parties hereby confirms its consent to the amendments to the Principal Agreement and the other arrangements contained in this Agreement and agrees that:

6.1 each of the Finance Documents (including any Guarantee) to which it is a party, and its obligations thereunder, shall remain in full force and effect notwithstanding the amendments made to the Principal Agreement by this Agreement and the other arrangements contained in this Agreement;

6.2 its obligations under the relevant Finance Documents (including any Guarantee) to which it is a party includes any and all amounts owing by the Borrower under the Principal Agreement as amended by this Agreement; and

6.3 with effect from the Effective Date, references to "the Agreement" or the "the Loan Agreement" in any of the Finance Documents (including any Guarantee) to which it is a party shall henceforth be references to the Principal Agreement as amended by this Agreement and as from time to time hereafter amended.

7 Fees and Expenses

7.1 Fees

The Borrower shall pay to the Agent a fee of $25,000 on the date of this Agreement.  The fee referred to in this clause 7.1 is non-refundable.

7.2 Expenses

The Borrower agrees to pay to the Agent on a full indemnity basis on demand all expenses (including legal and out-of-pocket expenses) incurred by the Creditor Parties or any of them:

7.2.1 in connection with the negotiation, preparation, execution and, where relevant, registration of the Relevant Documents and of any amendment or extension of, or the granting of any waiver or consent under, the Relevant Documents; and

7.2.2 in contemplation of, or otherwise in connection with, the enforcement of, or preservation of any rights under the Relevant Documents or otherwise in respect of the monies owing and obligations incurred under the Relevant Documents,

together with interest at the rate and in the manner referred to in clause 7 of the Principal Agreement from the date on which such expenses were incurred to the date of payment (as well after as before judgment).

7.3 Value Added Tax

All expenses payable pursuant to this clause 7 shall be paid together with value added tax or any similar tax (if any) properly chargeable thereon. Any value added tax chargeable in respect

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of any services supplied by the Creditor Parties or any of them under this Agreement shall, on delivery of the value added tax invoice, be paid in addition to any sum agreed to be paid hereunder.

7.4 Stamp and other duties

The Borrower agrees to pay to the Agent on demand all stamp, documentary, registration or other like duties or taxes (including any duties or taxes payable by the Creditor Parties or any of them) imposed on or in connection with the Relevant Documents and shall indemnify the Creditor Parties against any liability arising by reason of any delay or omission by the Borrower to pay such duties or taxes.

8 Miscellaneous and notices

8.1 Notices

The provisions of clause 28 of the Principal Agreement shall extend and apply to the giving or making of notices or demands hereunder as if the same were expressly stated herein and for this purpose any notices to be sent to the Relevant Parties or any of them hereunder shall be sent to the same address as the address indicated for the "Borrower" in the said clause 28.

8.2 Counterparts

This Agreement may be executed in any number of counterparts and by the different parties on separate counterparts, each of which when so executed and delivered shall be an original but all counterparts shall together constitute one and the same instrument.

9 Applicable law

9.1 Law

This Agreement and any non-contractual obligations in connection with this Agreement are governed by, and shall be construed in accordance with, English law.

9.2 Submission to jurisdiction

Each of the Relevant Parties agrees, for the benefit of the Creditor Parties, that any legal action or proceedings arising out of or in connection with this Agreement (including any non-contractual obligations connected with this Agreement) against any of the Relevant Parties or any of its assets may be brought in the English courts. Each of the Relevant Parties irrevocably and unconditionally submits to the jurisdiction of such courts and irrevocably designates, appoints and empowers Hill Dickinson Services (London) Limited at present of The Broadgate Tower, 20 Primrose Street, London EC2A 2EW, England to receive for it and on its behalf, service of process issued out of the English courts in any such legal action or proceedings. The submission to such jurisdiction shall not (and shall not be construed so as to) limit the right of the Creditor Parties or any of them to take proceedings against any of the Relevant Parties in the courts of any other competent jurisdiction nor shall the taking of proceedings in any one or more jurisdictions preclude the taking of proceedings in any other jurisdiction, whether concurrently or not. The parties further agree that only the Courts of England and not those of any other State shall have jurisdiction to determine any claim which any of the Relevant Parties may have against the Creditor Parties or any of them arising out of or in connection with this Agreement (including any non-contractual obligations connected with this Agreement).

9.3 Contracts (Rights of Third Parties) Act 1999

No term of this Agreement is enforceable under the Contracts (Rights of Third Parties) Act 1999 by a person who is not a party to this Agreement.

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IN WITNESS whereof the parties to this Agreement have caused this Agreement to be duly executed on the date first above written.

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Schedule 1 Names and lending offices of the Lenders

Lender	Lending Office
UniCredit Bank AG (formerly known as Bayerische Hypo- Und Vereinsbank AG)	7 Heraklitou Street 106 73 Athens Greece

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Schedule 2 The Owners

Frontline Marine Company

Trade Force Shipping S.A.

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Schedule 3 The Relevant Ship and its details

(1) Name	(2) IMO No.	(3) Owner
"CALM SEAS"	9184835	Frontline Marine Company

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Schedule 4 Documents and evidence required as conditions precedent

(referred to in clause 5.1)

1 Corporate authorisation

In relation to each of the Relevant Parties:

(a) Constitutional documents

copies certified by an officer of each of the Relevant Parties, as a true, complete and up to date copies, of all documents which contain or establish or relate to the constitution of that party or a secretary's certificate confirming that there have been no changes or amendments to the constitutional documents certified copies of which were previously delivered to the Agent pursuant to the Principal Agreement;

(b) Resolutions

copies of resolutions of each of its board of directors and, if required, its shareholders/stockholders approving such of the Relevant Documents to which it is or is to be a party and the terms and conditions hereof and thereof and authorising the signature, delivery and performance of each such party's obligations thereunder, certified (in a certificate dated no earlier than five (5) Banking Days prior to the date of this Agreement) by an officer of the Relevant Parties as:

(i) being true and correct;

(ii) being duly passed at meetings of the directors of such Relevant Party and of the shareholders/stockholders of such Relevant Party, each duly convened and held;

(iii) not having been amended, modified or revoked; and

(iv) being in full force and effect,

together with originals or certified copies of any powers of attorney issued by such Relevant Party pursuant to such resolutions; and

(c) Certificate of incumbency

a list of directors and officers of each Relevant Party specifying the names and positions of such persons, certified (in a certificate dated no earlier than five (5) Banking Days prior to the date of this Agreement) by an officer of such Relevant Party to be true, complete and up to date;

2 Relevant Documents

the Seventh Mortgage Addendum, duly executed by the relevant Relevant Party and (in the case of the Seventh Mortgage Addendum only) registered at the relevant ship registry;

3 Consents

a certificate (dated no earlier than five (5) Banking Days prior to the date of this Agreement) from an officer of each of the Relevant Parties stating that no consents, authorisations, licences or approvals are necessary for such Relevant Party to authorise, or are required by each of the Relevant Parties or any other party (other than the Creditor Parties) in connection with, the execution, delivery, and performance of the Relevant Documents to which they are or will be a party;

4 Agreements with other lenders

evidence in form and substance satisfactory to the Agent in its sole discretion that the Borrower and other members of the Group have entered into binding agreements with all other lenders and creditors of any Financial Indebtedness of the Group (except the Notes), granting such waivers, relaxation and extension arrangements to the Group as are satisfactory to the Agent in its absolute discretion (and that in any event are not more favourable to such other lenders or creditors than the amendments and waivers agreed in this Agreement are to the Creditor Parties);

5 Legal opinions

such legal opinions in relation to the laws of the Republic of the Marshall Islands and the Republic of Liberia and any other legal opinions as the Agent shall in its reasonable discretion deem appropriate; and

6 Process agent

an original or certified true copy of a letter from each Relevant Party's agent for receipt of service of proceedings accepting its appointment under this Agreement in which it is or is to be appointed as such Relevant Party's agent.

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Borrower
EXECUTED as a Deed by		)	/s/
for and on behalf of		)	Attorney-in-fact
PARAGON SHIPPING INC.		)
as Borrower		)	/s/ Nikolaos
in the presence of:		)
/s/ Pinelopi-anna Miliou
Witness
Name:	Pinelopi-anna Miliou
Address:	Norton Rose Fulbright Greece
Occupation:	Solicitor
Lenders
Signed by Nikolaos Tzoumakas		)	/s/ Nikolaos Tzoumakas
and by Anastasia Kerpinioti		)	Authorised Signatory
for and on behalf of		)
UNICREDIT BANK AG (formerly known as		)	/s/ Nikolaos Tzoumakas
BAYERISCHE HYPO- UND VEREINSBANK AG)		)	Authorised Signatory
as Lender		)
Agent
Signed by Nikolaos Tzoumakas		)	/s/ Nikolaos Tzoumakas
and by Anastasia Kerpinioti		)	Authorised Signatory
for and on behalf of		)
UNICREDIT BANK AG (formerly known as		)	/s/ Nikolaos Tzoumakas
BAYERISCHE HYPO- UND VEREINSBANK AG)		)	Authorised Signatory
as Agent		)
Arranger
Signed by Nikolaos Tzoumakas		)	/s/ Nikolaos Tzoumakas
and by Anastasia Kerpinioti		)	Authorised Signatory
for and on behalf of		)
UNICREDIT BANK AG (formerly known as		)	/s/ Nikolaos Tzoumakas
BAYERISCHE HYPO- UND VEREINSBANK AG)		)	Authorised Signatory
as Arranger		)
Swap Bank
Signed by Nikolaos Tzoumakas		)	/s/ Nikolaos Tzoumakas
and by Anastasia Kerpinioti		)	Authorised Signatory
for and on behalf of		)
UNICREDIT BANK AG (formerly known as		)	/s/ Nikolaos Tzoumakas
BAYERISCHE HYPO- UND VEREINSBANK AG)		)	Authorised Signatory
as Swap Bank		)

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Security Trustee
Signed by Nikolaos Tzoumakas		)	/s/ Nikolaos Tzoumakas
and by Anastasia Kerpinioti		)	Authorised Signatory
for and on behalf of		)
UNICREDIT BANK AG (formerly known as		)	/s/ Nikolaos Tzoumakas
BAYERISCHE HYPO- UND VEREINSBANK AG)		)	Authorised Signatory
as Security Trustee		)
Owners
EXECUTED as a Deed by		)	/s/
for and on behalf of		)	Attorney-in-fact
FRONTLINE MARINE COMPANY		)
as Owner		)
in the presence of:		)
/s/ Pinelopi-anna Miliou
Witness
Name:	Pinelopi-anna Miliou
Address:	Norton Rose Fulbright Greece
Occupation:	Solicitor
EXECUTED as a Deed by		)	/s/
for and on behalf of		)	Attorney-in-fact
TRADE FORCE SHIPPING S.A.		)
as Owner		)
in the presence of:		)
/s/ Pinelopi-anna Miliou
Witness
Name:	Pinelopi-anna Miliou
Address:	Norton Rose Fulbright Greece
Occupation:	Solicitor
Approved Manager
EXECUTED as a Deed by		)	/s/
for and on behalf of		)	Attorney-in-fact
ALLSEAS MARINE S.A.		)
as Approved Manager		)
in the presence of:		)
/s/ Pinelopi-anna Miliou
Witness
Name:	Pinelopi-anna Miliou
Address:	Norton Rose Fulbright Greece
Occupation:	Solicitor

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EX-4.73

Exhibit 4.73

Dated 30 September 2014

PARAGON SHIPPING INC.

as Borrower

-and-

THE BANKS AND FINANCIAL INSTITUTIONS

listed in Schedule 1

as Lenders

-and-

THE BANKS AND FINANCIAL INSTITUTIONS

listed in Schedule 2

as Swap Banks

-and-

THE GOVERNOR AND COMPANY OF THE BANK OF IRELAND

as Arranger, Agent and Security Trustee

THIRD SUPPLEMENTAL AGREEMENT

in relation to a Loan Agreement dated 30 March 2009 (as amended)

for a term loan facility of up to US$30,000,000

secured against m.v. "KIND SEAS"

CONSTANT & CONSTANT

2, Defteras Merarchias

185 35 Piraeus

Greece

INDEX

Clause		Page
1	DEFINITIONS	1
2	REPRESENTATIONS AND WARRANTIES	1
3	AGREEMENT OF THE CREDITOR PARTIES	2
4	CONDITIONS	2
5	VARIATIONS TO LOAN AGREEMENT	4
6	CONTINUANCE OF LOAN AGREEMENT AND FINANCE DOCUMENTS	4
7	FEES AND EXPENSES	4
8	NOTICES	5
9	APPLICABLE LAW	5
10	THIRD PARTY RIGHTS	5
EXECUTION PAGES		6
SCHEDULE 1  LENDERS AND COMMITMENTS		8
SCHEDULE 2  SWAP BANKS		9
SCHEDULE 3  FORM OF CONFIRMATION		10

THIS THIRD SUPPLEMENTAL AGREEMENT dated         September 2014 and made

BETWEEN:

(1) PARAGON SHIPPING INC. as Borrower;

(2) THE BANKS AND FINANCIAL INSTITUTIONS listed in Schedule 1 as Lenders;

(3) THE BANKS AND FINANCIAL INSTITUTIONS listed in Schedule 2 as Swap Banks; and

(4) THE GOVERNOR AND COMPANY OF THE BANK OF IRELAND as Arranger, Agent and Security Trustee,

IS SUPPLEMENTAL to a Loan Agreement dated 30 March 2009 as amended by a first supplemental agreement dated 23 March 2010, three side letters dated 23 December 2011, 27 September 2012 and 25 July 2014 respectively, and a second supplemental agreement dated 28 November 2012 (together, the "Loan Agreement") made between (i) the Borrower, (ii) the Lenders, (iii) the Swap Banks, (iv) the Arranger, (v) the Agent and (vi) the Security Trustee pursuant to which the Lenders made available to the Borrower a term loan facility of up to Thirty Million United States Dollars ($30,000,000) upon the terms and for the purposes therein specified.  The current amount of the Loan outstanding is $12,700,000.

WHEREAS the Lenders, the Swap Banks, the Arranger, the Agent and the Security Trustee have agreed to give their consent, subject to the terms and conditions herein contained, to amongst other things, the rescheduling of the remaining repayment instalments of the Loan.

NOW THEREFORE IT IS HEREBY AGREED

1 DEFINITIONS

1.1 Words and expressions defined in the Loan Agreement (as hereby amended) and the recitals hereto and not otherwise defined herein shall have the same meanings when used in this Third Supplemental Agreement.

1.2 In this Third Supplemental Agreement, unless the context otherwise requires:

"Third Mortgage Addendum" means the addendum to the first preferred Marshall Islands mortgage over m.v. "KIND SEAS" dated 31 March 2009, as amended by the first mortgage addendum dated 23 March 2010 and the second mortgage addendum dated 28 November 2012, executed by the Corporate Guarantor as owner, in favour of the Security Trustee.

1.3 Where the context so admits words importing the singular number only shall include the plural and vice versa and words importing persons shall include firms and corporations.  Clause headings are inserted for convenience of reference only and shall be ignored in construing this Third Supplemental Agreement.  References to Clauses are to clauses of this Third Supplemental Agreement save as may be otherwise expressly provided in this Third Supplemental Agreement.

2 REPRESENTATIONS AND WARRANTIES

2.1 The Borrower hereby represents and warrants to the Creditor Parties that, as at the date of this Third Supplemental Agreement, the representations and warranties set forth in clause 10 of the Loan Agreement (updated mutatis mutandis to the date of this Third Supplemental Agreement) are true and correct as if all references therein to "this Agreement" were references to the Loan Agreement as further amended by this Third Supplemental Agreement.

2.2 The Borrower hereby further represents and warrants to the Creditor Parties that as at the date of this Third Supplemental Agreement:

(a) it is duly formed and validly existing and in goodstanding under the laws of the country of its incorporation and has full power to enter into and perform its obligations under this Third Supplemental Agreement to which it is a party and has complied with all statutory and other requirements relative to its business;

(b) all necessary governmental or other official consents, authorisations, approvals, licences, consents or waivers for the execution, delivery, performance, validity and/or enforceability of this Third Supplemental Agreement, the Third Mortgage Addendum and all other documents to be executed in connection with the amendments to the Loan Agreement as contemplated hereby have been obtained and will be maintained in full force and effect throughout the Security Period;

(c) it has taken all necessary corporate and other action to authorise the execution, delivery and performance of its obligations under this Third Supplemental Agreement and this Third Supplemental Agreement constitutes the valid and binding obligations of the Borrower enforceable in accordance with its terms;

(d) the execution, delivery and performance of this Third Supplemental Agreement, the Third Mortgage Addendum and all such other documents as contemplated hereby does not and will not during the Security Period constitute a breach of any contractual restriction or any existing applicable law, regulation, consent or authorisation binding on the Borrower or on any of its respective property or assets and will not result in the creation or imposition of any security interest, lien, charge or encumbrance (other than under the Finance Documents) on any of such property or assets;

(e) it has fully disclosed in writing to the Creditor Parties all facts which it knows or which it should reasonably know and which are material for disclosure to the Creditor Parties in the context of this Third Supplemental Agreement and all information furnished by the Borrower or on its behalf relating to its business and affairs in connection with this Third Supplemental Agreement was and remains true, correct and complete in all material respects and there are no other material facts or considerations the omission of which would render any such information misleading; and

(f) no Event of Default (save for any Event of Default which may exist under Clause 19.1(f) of the Loan Agreement with regard however only to any Financial Indebtedness of a Relevant Person to any person other than the Creditor Parties pursuant to the Finance Documents) has occurred and continues as at date of this Third Supplemental Agreement.

3 AGREEMENT OF THE CREDITOR PARTIES

3.1 The Creditor Parties, relying upon each of the representations and warranties set out in Clauses 2.1 and 2.2 of this Third Supplemental Agreement, hereby agree with the Borrower subject to and upon the terms and conditions of this Third Supplemental Agreement and in particular, but without limitation, subject to and with effect from the fulfillment of the conditions precedent set out in Clause 4, to the rescheduling of the remaining instalments of the Loan in accordance with Clause 5.

3.2 The Borrower confirms that it will continue to remain liable to perform its obligations under the Loan Agreement (as hereby amended) and the Finance Documents to which it is a party.

4 CONDITIONS

4.1 The agreement of the Creditor Parties contained in Clause 3.1 of this Third Supplemental Agreement shall be subject to the following condition that the Creditor Parties shall have

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received in form and substance satisfactory to the Security Trustee on behalf of the Lenders and their legal advisers on or before the signature hereof:

(a) a certificate of a Director of the Borrower confirming the names and offices of all the Directors and/or Officers of the Borrower, and confirming that the Borrower's incorporation and constitutional documents have not been altered or amended since 23 March 2009;

(b) true and complete copies of the resolutions passed at a meeting of the Board of Directors of the Borrower, authorising and approving the execution of this Third Supplemental Agreement and any other document or action to which the Borrower is a party, and authorising its appropriate officer or officers or other representatives to execute the same on its behalf;

(c) the original of any power of attorney issued by the Borrower pursuant to such resolutions aforesaid;

(d) true and complete copies of the resolutions passed at a meeting of the Board of Directors of the Corporate Guarantor, authorising and approving the execution of the Third Mortgage Addendum and any other document or action to which the Corporate Guarantor is a party, and authorising its appropriate officer or officers or other representatives to execute the same on its behalf;

(e) the original of any power of attorney issued by the Corporate Guarantor pursuant to such resolutions aforesaid;

(f) certified copies of all documents (with a certified translation if an original is not in English) evidencing any other necessary action, approvals or consents with respect to this Third Supplemental Agreement and the Third Mortgage Addendum (including without limitation) all necessary governmental and other official approvals and consents in such pertinent jurisdictions as the Security Trustee deems appropriate;

(g) a duly executed original of this Third Supplemental Agreement and the Third Mortgage Addendum, together with evidence that the Third Mortgage Addendum has been duly registered against the Ship in accordance with the laws of the Republic of The Marshall Islands;

(h) such legal opinions as the Security Trustee may require in respect of the matters contained in this Third Supplemental Agreement and the Third Mortgage Addendum;

(i) a duly executed confirmation from each Security Party in the form of Schedule 3 hereto, confirming that (notwithstanding the amendments made to the Loan Agreement pursuant to this Agreement) the Finance Documents to which it is a party and its obligations thereunder remain valid and binding;

(j) receipt by the Lenders of the sum of $4,000,000 by way of prepayment of the Loan, to be applied in accordance with Clause 8 of the Loan Agreement; and

(k) receipt by the Lenders of the expenses referred to in Clause 7.1.

4.2 The agreement of the Creditor Parties contained in Clause 3.1 of this Third Supplemental Agreement shall be further subject to the condition that the Creditor Parties shall receive evidence satisfactory to the Agent of the agreement of the relevant banks and financial institutions to similar amendments (as set out in Clause 5 hereof) to the other loan facilities currently in place with Paragon Shipping Inc. as borrower within 90 days from the date of this Third Supplemental Agreement.

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5 VARIATIONS TO LOAN AGREEMENT

5.1 In consideration of the agreement of the Creditor Parties contained in Clause 3.1 of this Third Supplemental Agreement, the Borrower hereby agrees with the Creditor Parties that the provisions of the Loan Agreement shall as of the date on which the conditions precedent set out in Clause 4 have been complied with to the satisfaction of the Creditor Parties be varied and/or amended and/or supplemented as follows:

(a) by construing all references therein to "this Agreement" where the context admits as being references to "this Agreementas the same is amended and supplemented by the Third Supplemental Agreement dated       September 2014 and as the same may from time to time be further supplemented and/or amended";

(b) by inserting in clause 1.1 thereof the definition set out in Clause 1.2 hereof; and

(c) by construing the definition of "Finance Documents" set out in clause 1.1 of the Loan Agreement to include the Third Mortgage Addendum defined in Clause 1.2 hereof.

5.2 The Borrower undertakes to prepay the sum of $4,000,000 to the Lenders prior to 30 September 2014, to be applied in reduction of the outstanding amount of the Loan, such prepayment to be funded by (a) the release of the sum of $1,000,000 from the cash collateral held by the Borrower with the Agent and (b) a cash injection of $3,000,000 by the Borrower (the "Rescheduled Instalment"). Following the Rescheduled Instalment the outstanding amount shall be $8,700,000 (the "Remaining Amount").

5.3 The Lender agrees that, following receipt of the prepayment of $4,000,000 referred to in Clause 5.2 above, with effect from and including the repayment instalment due on 30 September 2014, the Remaining Amount of the Loan shall be repaid by eleven (11) consecutive quarterly instalments, the first four (4) of which shall be in the amount of $350,000 each, the next four (4) of which shall be in the amount of $400,000 each and the final three (3) of which shall be in the amount of $1,000,000 each and by a balloon payment in the amount of $2,700,000 payable together with the final quarterly instalment. Clause 8.1 of the Loan Agreement shall be construed accordingly.

5.4 For the avoidance of doubt, the amendments referred to in Clauses 5.1 and 5.3 shall only become effective upon receipt by the Lenders of the prepayment of $4,000,000 referred to in Clause 5.2.

6 CONTINUANCE OF LOAN AGREEMENT ANDFINANCE DOCUMENTS

6.1 Save for the alterations to the Loan Agreement made or to be made pursuant to this Third Supplemental Agreement and such further modifications (if any) thereto as may be necessary to make the same consistent with the terms of this Third Supplemental Agreement, the Loan Agreement shall remain in full force and effect and the security constituted by the Finance Documents shall continue and remain valid and enforceable in all respects.

7 FEES AND EXPENSES

7.1 The Borrower agrees to pay to the Creditor Parties upon demand and from time to time all costs, charges and expenses (including legal fees and VAT, if applicable) incurred by the Creditor Parties in connection with the preparation, negotiation, execution and (if required) registration of, or preservation of rights under or the enforcement or attempted enforcement of, the Loan Agreement, the Finance Documents, this Third Supplemental Agreement or otherwise in connection with the Loan or any part thereof.

4

8 NOTICES

8.1 The provisions of clause 28 (Notices) of the Loan Agreement shall apply to this Third Supplemental Agreement as if the same were set out herein in full.

9 APPLICABLE LAW

9.1 This Third Supplemental Agreement (and any non contractual obligations connected with it) shall be governed by and construed in accordance with English law.

9.2 Subject to Clause 9.3, the courts of England shall have exclusive jurisdiction to settle any disputes which may arise out of or in connection with this Third Supplemental Agreement.

9.3 Clause 9.2 is for the exclusive benefit of the Creditor Parties which reserve the right:

(a) to commence proceedings in relation to any matter which arises out of or in connection with this Third Supplemental Agreement in the courts of any country other than England and which have or claim jurisdiction to that matter; and

(b) to commence such proceedings in the courts of any such country or countries concurrently with or in addition to proceedings in England or without commencing proceedings in England.

The Borrower shall not commence any proceedings in any country other than England in relation to a matter which arises out of or in connection with this Third Supplemental Agreement.

9.4 The Borrower irrevocably appoints Hill Dickinson Services (London) Limited at its office for the time being, presently at The Broadgate Tower 20, Primrose Street, London EC2A 2EW, England to act as its agent to receive and accept on its behalf any process or other document relating to any proceedings in the English courts which are connected with this Third Supplemental Agreement.

9.5 Nothing in this Clause 9 shall exclude or limit any right which the Creditor Parties may have (whether under the law of any country, an international convention or otherwise) with regard to the bringing of proceedings, the service of process, the recognition or enforcement of a judgment or any similar or related matter in any jurisdiction.

9.6 In this Clause 9, "proceedings" means proceedings of any kind, including an application for a provisional or protective measure.

10 THIRD PARTY RIGHTS

10.1 A person who is not a party to this Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Third Supplemental Agreement.

IN WITNESS WHEREOF   the parties hereto have caused this Third Supplemental Agreement to be duly executed the day and year first above written.

5

EXECUTION PAGES

BORROWER
SIGNED by	Robert Perri	)	/s/ Robert Perri
	Katerina Stoupa	)	/s/ Katerina Stoupa

for and on behalf of	)
PARAGON SHIPPING INC.	)

in the presence of:	Maria Stefanou
	/s/Maria Stefanou
LENDERS
SIGNED by Jeremy Watson		)	/s/ Jeremy Watson
for and on behalf of		)
THE GOVERNOR AND		)
COMPANY OF THE BANK OF		)
IRELAND		)

in the presence of:	Maria Stefanou
	/s/Maria Stefanou

ARRANGER
SIGNED by Jeremy Watson	)	/s/ Jeremy Watson
for and on behalf of	)
THE GOVERNOR AND	)
COMPANY OF THE BANK OF	)
IRELAND	)

in the presence of:	Maria Stefanou
	/s/Maria Stefanou

AGENT
SIGNED by Jeremy Watson	)	/s/ Jeremy Watson
for and on behalf of	)
THE GOVERNOR AND	)
COMPANY OF THE BANK OF	)
IRELAND	)

in the presence of:	Maria Stefanou
	/s/Maria Stefanou

6

SECURITY TRUSTEE
SIGNED by Jeremy Watson	)	/s/ Jeremy Watson
for and on behalf of	)
THE GOVERNOR AND	)
COMPANY OF THE BANK OF	)
IRELAND	)

in the presence of:	Maria Stefanou
	/s/Maria Stefanou

7

SCHEDULE 1
LENDERS AND COMMITMENTS

Lender	Lending Office	Commitment
The Governor and Company of the Bank of Ireland	Head Office 40 Mespil Road Dublin 4 Ireland	$30,000,000 (originally)

8

SCHEDULE 2
SWAP BANKS

Swap Bank	Booking Office
The Governor and Company	Colvill House
of the Bank of Ireland	Talbot Street
	Dublin 1
	Ireland

9

SCHEDULE 3
FORM OF CONFIRMATION

[                            ] 2014

We hereby confirm and acknowledge we have read and understood the terms and conditions of the Third Supplemental Agreement dated [                               ] 2014 (the "Third Supplemental Agreement") to the Loan Agreement dated 30 March 2009 as amended by a first supplemental agreement dated 23 March 2010, three side letters dated 23 December 2011, 27 September 2012 and 25 July 2014 respectively, and a second supplemental agreement dated 28 November 2012 (together, the "Loan Agreement") made between (i) Paragon Shipping Inc. as borrower (the "Borrower"), (ii) the banks and financial institutions listed in schedule 1 therein as lenders, (iii) the banks and financial institutions listed in schedule 2 therein as swap banks and (iv) The Governor and Company of the Bank of Ireland as arranger, agent and security trustee, and agree in all respects to the same and confirm that the Finance Documents (as defined in the Loan Agreement) to which we are a party shall remain in full force and effect and shall continue to stand as security for the obligations of the Borrower under the Loan Agreement (as amended by the Third Supplemental Agreement).

____________________

[                                       ]

10

EX-8.1

Exhibit 8.1

Subsidiaries	Country of Incorporation
Trade Force Shipping S.A.	Marshall Islands
Camelia Navigation S.A.	Marshall Islands
Front Line Marine Company	Marshall Islands
Explorer Shipholding Limited	Marshall Islands
Fairplay Maritime Ltd.	Marshall Islands
Epic Investments Inc.	Marshall Islands
Donna Marine Co.	Marshall Islands
Protea International Inc.	Liberia
Reading Navigation Co.	Liberia
Canyon I Navigation Corp.	Marshall Islands
Imperator I Maritime Company	Marshall Islands
Paloma Marine S.A.	Liberia
Coral Ventures Inc	Liberia
Winselet  Shipping And Trading Co. Ltd.	Liberia
Eris Shipping S.A.	Liberia
Adonia Enterprises S.A.	Liberia
Aminta International S.A.	Liberia
Alcyone International Marine Inc.	Liberia
Neptune International Shipping & Trading S.A.	Liberia
Amphitrite Shipping Inc.	Liberia
Mirabel International Maritime Co.	Liberia
Dolphin Sunrise Limited	Marshall Islands
Nautilus Investment Limited	Marshall Islands
Oceanus Investments Limited	Marshall Islands

EX-12.1

Exhibit 12.1

CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER

I, Michael Bodouroglou, certify that:

1.  I have reviewed this annual report on Form 20-F of Paragon Shipping 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 statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4.  The company's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the company's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company's internal control over financial reporting; and

5.  The company's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company's auditors and the audit committee of the company's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the company's internal control over financial reporting.

Date: April 17, 2015

/s/ Michael Bodouroglou

Michael Bodouroglou

Chief Executive Officer

EX-12.2

Exhibit 12.2

CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICER

I, Michael Bodouroglou, certify that:

1. I have reviewed this annual report on Form 20-F of Paragon Shipping 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 statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4. The company's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the company's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company's internal control over financial reporting; and

5. The company's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company's auditors and the audit committee of the company's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the company's internal control over financial reporting.

Date: April 17, 2015

/s/ Michael Bodouroglou

Michael Bodouroglou

Interim Chief Financial Officer

EX-13.1

Exhibit 13.1

PRINCIPAL EXECUTIVE OFFICER CERTIFICATION

PURSUANT TO 18 U.S.C. SECTION 1350

In connection with this Annual Report of Paragon Shipping Inc. (the "Company") on Form 20-F for the year ended December 31, 2014 as filed with the Securities and Exchange Commission (the "SEC") on or about the date hereof (the "Report"), I, Michael Bodouroglou, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the SEC or its staff upon request.

Date: April 17, 2015

/s/ Michael Bodouroglou

Michael Bodouroglou

Chief Executive Officer

EX-13.2

Exhibit 13.2

PRINCIPAL FINANCIAL OFFICER CERTIFICATION

PURSUANT TO 18 U.S.C. SECTION 1350

In connection with this Annual Report of Paragon Shipping Inc. (the "Company") on Form 20-F for the year ended December 31, 2014 as filed with the Securities and Exchange Commission (the "SEC") on or about the date hereof (the "Report"), I, Michael Bodouroglou, Interim Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the SEC or its staff upon request.

Date: April 17, 2015

/s/ Michael Bodouroglou

Michael Bodouroglou

Interim Chief Financial Officer

EX-15.1

EXHIBIT 15.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the Registration Statement (Form F-3 No. 333-192517, as amended) of Paragon Shipping Inc. and in the related Prospectus of our reports dated April 17, 2015, with respect to the consolidated financial statements of Paragon Shipping Inc. and the effectiveness of internal control over financial reporting of Paragon Shipping Inc., included in this Annual Report (Form 20-F) for the year ended December 31, 2014.

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

Athens, Greece

April 17, 2015

XML

Basis of Presentation and General Information - Non Vessel Owning Subsidiaries (Table) (Details)	12 Months Ended
	Dec. 31, 2014
Camelia Navigation S.A.
Non-Vessel Owning Subsidiaries [Line Items]
Date of Incorporation	Nov. 15, 2006
Explorer Shipholding Limited
Non-Vessel Owning Subsidiaries [Line Items]
Date of Incorporation	Nov. 15, 2006
Epic Investments Inc.
Non-Vessel Owning Subsidiaries [Line Items]
Date of Incorporation	Dec. 21, 2006
Opera Navigation Co.
Non-Vessel Owning Subsidiaries [Line Items]
Date of Incorporation	Dec. 21, 2006
Ovation Services Inc.
Non-Vessel Owning Subsidiaries [Line Items]
Date of Incorporation	Sep. 16, 2009
Irises Shipping Ltd.
Non-Vessel Owning Subsidiaries [Line Items]
Date of Incorporation	Oct. 06, 2009
Letitia Shipping Limited
Non-Vessel Owning Subsidiaries [Line Items]
Date of Incorporation	May 04, 2010
Nereus Navigation Ltd.
Non-Vessel Owning Subsidiaries [Line Items]
Date of Incorporation	May 04, 2010
Ardelia Navigation Limited
Non-Vessel Owning Subsidiaries [Line Items]
Date of Incorporation	Jun. 15, 2010
Eridanus Trading Co.
Non-Vessel Owning Subsidiaries [Line Items]
Date of Incorporation	Jul. 01, 2010
Delfis Shipping Company S.A.
Non-Vessel Owning Subsidiaries [Line Items]
Date of Incorporation	Feb. 07, 2011

XML

Investment in Affiliate - Income Statement Data (Table) (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Income Statement Data [Line Items]
Net revenue	$ 54,763,678	$ 56,256,756	$ 50,300,679
Operating income	(33,831,017)	(2,954,345)	2,293,932
Net income	(51,796,181)	(16,953,032)	(17,557,125)
Box Ships Inc.
Income Statement Data [Line Items]
Net revenue	49,864,674	69,836,201
Operating income	1,966,947	23,631,192
Net income	$ 2,623,515	$ 15,307,658

XML

Transactions with Related Parties - Box Ships Inc. (Details) (USD $)	1 Months Ended					3 Months Ended	12 Months Ended			16 Months Ended
	Oct. 18, 2013	Aug. 05, 2013	Jul. 19, 2013	Apr. 19, 2013	Feb. 28, 2013	Apr. 19, 2013	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Apr. 19, 2014	May 27, 2011
Box Ships Inc.
Related Party Transaction [Line Items]
Percentage of ownership in Box Ships							11.00%	13.60%
Loan to affiliate - balance		$ 6,000,000			$ 13,000,000				$ 14,000,000		$ 30,000,000
Loan to affiliate interest rate basis								LIBOR
Loan pre-payment from affiliate	6,000,000	5,000,000	1,000,000	1,000,000	1,000,000
Quarterly loan repayment from affiliate						1,000,000
Balloon payment - loan to affiliate										9,000,000
Amendment fee								65,000
Interest income related party							$ 0	$ 439,326	$ 675,856
Margin Before Amendment
Related Party Transaction [Line Items]
Margin								4.00%
Margin After Amendment
Related Party Transaction [Line Items]
Margin								5.00%

XML

Financial Instruments and Fair Value Disclosures - Location of Recognized Gain / (Loss) from Marketable Securities (Table) (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Marketable securities - Realized Loss	$ 25,529	$ 1,911,212	$ 980,430
Net gain / (loss) from marketable securities	(25,529)	1,202,094	414,235
Gain / (loss) from marketable securities, net
Marketable securities - Initial measurement	0	3,113,306
Marketable securities - Realized Loss	$ (25,529)	$ (1,911,212)

XML

Investment in Affiliate - Balance Sheet Data (Table) (Details) (USD $)	Dec. 31, 2014	Dec. 31, 2013
Balance Sheet Data [Line Items]
Total current assets	$ 26,688,017	$ 44,220,084
Total assets	460,965,117	419,545,980
Total current liabilities	28,482,791	23,655,911
Total long-term liabilities	210,081,783	163,239,292
Box Ships Inc.
Balance Sheet Data [Line Items]
Total current assets	22,011,255	31,691,262
Total non-current assets	375,837,950	397,915,376
Total assets	397,849,205	429,606,638
Total current liabilities	140,886,944	184,434,021
Total long-term liabilities	$ 282,375	$ 453,248

XML

Share Based Payments - Equity Incentive Plan - Non-vested Share Awards (Table) (Details) (USD $)	12 Months Ended
	Dec. 31, 2014
Number of Shares
Non-vested, December 31, 2013	339,000
Granted	252,000
Cancelled	(3,000)
Vested	(239,500)
Non-vested, December 31, 2014	348,500
Weighted Average Fair Value
Non-vested, December 31, 2013	$ 4.75
Granted	$ 3.64
Cancelled	$ 6.67
Vested	$ 4.63
Non-vested, December 31, 2014	$ 4.15

XML

Transactions with Related Parties - Granitis (Details) (Granitis Glyfada Real Estate Ltd.)	3 Months Ended		12 Months Ended
	Dec. 31, 2012 EUR (€)	Dec. 31, 2007 EUR (€)	Dec. 31, 2014 USD ($)	Dec. 31, 2013 USD ($)	Dec. 31, 2012 USD ($)
Related Party Transaction [Line Items]
Initial rental agreement duration	5yrs	5yrs
Initial monthly rental fee	€ 3,000	€ 2,000
Rental fee additional tax	3.60%	3.60%
Rent expense			$ 49,001	$ 49,324	$ 39,593

XML

Interest Rate Swaps (Tables)

12 Months Ended

Dec. 31, 2014

Interest Rate Swaps [Abstract]

Interest rate swaps that did not qualify for hedge accounting

Counterparty	Effective date	Termination date	Notional amount As of December 31, 2013	Notional amount As of December 31, 2014	Fixed rate	Floating rate
Unicredit Bank AG (1)	August 27, 2010	August 27, 2015	$35,700,000	$25,500,000	2.465%	3-month LIBOR
HSBC Bank Plc (2)	April 10, 2012	April 10, 2017	-	$4,560,000	1.485%	3-month LIBOR
HSH Nordbank AG (3)	May 8, 2012	May 5, 2017	-	$9,562,500	1.220%	3-month LIBOR
Nordea Bank Finland Plc (4)	May 4, 2012	March 31, 2017	-	$5,918,792	1.140%	3-month LIBOR
Nordea Bank Finland Plc (5)	June 18, 2012	May 4, 2017	-	$5,885,615	1.010%	3-month LIBOR
HSH Nordbank AG (6)	August 6, 2012	May 5, 2017	-	$4,781,250	0.980%	3-month LIBOR
TOTAL			$35,700,000	$56,208,157

Interest rate swaps that qualified for hedge accounting

Counterparty	Effective date	Termination date	Notional amount As of December 31, 2013	Notional amount As of December 31, 2014	Fixed rate	Floating rate
HSBC Bank Plc (2)	April 10, 2012	April 10, 2017	$5,040,000	-	1.485%	3-month LIBOR
HSH Nordbank AG (3)	May 8, 2012	May 5, 2017	$10,312,500	-	1.220%	3-month LIBOR
Nordea Bank Finland Plc (4)	May 4, 2012	March 31, 2017	$6,401,958	-	1.140%	3-month LIBOR
Nordea Bank Finland Plc (5)	June 18, 2012	May 4, 2017	$6,366,073	-	1.010%	3-month LIBOR
HSH Nordbank AG (6)	August 6, 2012	May 5, 2017	$5,156,250	-	0.980%	3-month LIBOR
TOTAL			$33,276,781	-

(1) The notional amount reduces by $2,550,000 on a quarterly basis up until the expiration of the interest rate swap.

(2) The notional amount reduces by $120,000 on a quarterly basis up until the expiration of the interest rate swap.

(3) The notional amount reduces by $187,500 on a quarterly basis up until the expiration of the interest rate swap.

(4) The notional amount reduces by $120,792 on a quarterly basis up until the expiration of the interest rate swap.

(5) The notional amount reduces by $120,115 on a quarterly basis up until the expiration of the interest rate swap.

(6) The notional amount reduces by $93,750 on a quarterly basis up until the expiration of the interest rate swap.

XML

Share Based Payments - Equity Incentive Plan - Non-vested Share Awards (Details) (USD $)	12 Months Ended			0 Months Ended	12 Months Ended	0 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Feb. 26, 2015	Dec. 31, 2015	Mar. 17, 2015	Mar. 26, 2014
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of shares reserved for issuance under the plan							2,000,000
Number of outstanding and exercisable options	2,800	2,800
Options exercise price	$ 120	$ 120
Weighted average remaining contractual life of the options	1 year 10 months 21 days
Unrecognized cost of unvested share-based compensation awards	$ 1,189,936
Remaining weighted average period of recognition for unrecognized cost of share-based compensation awards	1 year 3 months 26 days
Shares granted	252,000
Grant date fair value	$ 3.64
Share based compensation	$ 986,416	$ 805,469	$ 2,536,702
Employees
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares granted				70,000
Grant date fair value				$ 1.865
Vesting period					2 years
Executive officers
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares granted						30,000
Grant date fair value						$ 1.310
Vesting period					2 years

XML

Financial Instruments and Fair Value Disclosures - Summary of Valuation in Box Ships (Table) (Details) (USD $)	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Derivatives Fair Value [Line Items]
Investment in equity affiliate - Box Ships Inc.	$ 2,956,250	$ 11,309,375	$ 19,987,743
Quoted Prices in Active Markets (Level 1)
Derivatives Fair Value [Line Items]
Investment in equity affiliate - Box Ships Inc.	$ 2,956,250	$ 11,309,375

XML

Long-Term Debt - Debt Agreements (Table) (Details) (USD $)	Dec. 31, 2014	Dec. 31, 2013
Debt Instrument [Line Items]
Total long-term debt	$ 230,778,738	$ 180,114,926
(a) Commerzbank AG (August 12, 2011)
Debt Instrument [Line Items]
Total long-term debt	43,375,000	47,550,000
(b) Unicredit Bank AG (November 19, 2007)
Debt Instrument [Line Items]
Total long-term debt	14,606,500	22,587,000
(c) Bank of Scotland Plc (December 4, 2007)
Debt Instrument [Line Items]
Total long-term debt	0	33,616,864
(d) Bank of Ireland (March 30, 2009)
Debt Instrument [Line Items]
Total long-term debt	8,350,000	13,400,000
(e-1) HSH Nordbank AG (July 31, 2008)
Debt Instrument [Line Items]
Total long-term debt	0	20,625,000
(e-2) HSH Nordbank AG (April 4, 2014)
Debt Instrument [Line Items]
Total long-term debt	46,713,600	0
(f) HSBC Bank Plc (July 2, 2010)
Debt Instrument [Line Items]
Total long-term debt	14,460,000	16,800,000
(g-1) Nordea Bank Finland Plc (May 5, 2011)
Debt Instrument [Line Items]
Total long-term debt	0	25,536,062
(g-2) Nordea Bank Finland Plc (May 6, 2014)
Debt Instrument [Line Items]
Total long-term debt	78,273,638	0
(h) Senior unsecured notes due 2021
Debt Instrument [Line Items]
Total long-term debt	$ 25,000,000	$ 0

XML

Share Based Payments - Equity Incentive Plan - October 11, 2006 - Details of Non-vested Share Awards (Table) (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total shares granted	252,000
Grant date fair value	$ 3.64
Shares cancelled	(3,000)
Non-vested share awards	348,500	339,000
November 26, 2013
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Final vesting date	Dec. 31, 2015
Total shares granted	200,000
Grant date fair value	$ 5.165
Shares vested	100,000
Non-vested share awards	100,000
November 26, 2013
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Final vesting date	Dec. 31, 2015
Total shares granted	12,000
Grant date fair value	$ 5.165
Shares vested	6,000
Non-vested share awards	6,000
December 19, 2013
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Final vesting date	Dec. 31, 2015
Total shares granted	16,000
Grant date fair value	$ 6.38
Shares vested	8,000
Non-vested share awards	8,000
January 31, 2014
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Final vesting date	Dec. 31, 2015
Total shares granted	32,000
Grant date fair value	$ 6.67
Shares cancelled	3,000
Shares vested	14,500
Non-vested share awards	14,500
Total
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total shares granted	260,000
Shares cancelled	3,000
Shares vested	128,500
Non-vested share awards	128,500

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Commitments and Contingencies (Details)	12 Months Ended
	Dec. 31, 2014
Commitments and Contingencies [Abstract]
Euro / U.S. dollar exchange rate	1.214
Estimated off-hire time	18 days

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Earnings per Share ("EPS") (Table) (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Earnings per Share ("EPS") [Abstract]
Net loss	$ (51,796,181)	$ (16,953,032)	$ (17,557,125)
Less: Net loss attributable to non-vested share awards	832,333	351,877	444,326
Net loss attributable to common shareholders	$ (50,963,848)	$ (16,601,155)	$ (17,112,799)
Denominators
Weighted average common shares outstanding, basic and diluted	23,326,062	12,639,128	6,035,910
Net loss per common share:
Net loss per common share, basic and diluted	$ (2.18)	$ (1.31)	$ (2.84)

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Subsequent Events (Details) (KLC Shares, USD $)	0 Months Ended	12 Months Ended
	Apr. 15, 2015	Dec. 31, 2014
KLC Shares
Subsequent Event [Line Items]
Number of KLC shares sold	18,133	21,346
Average price per share (KLC shares sold)	$ 22.62	$ 23.52

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Share Based Payments - Equity Incentive Plan - March 26, 2014 - Details of Non-vested Share Awards (Table) (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total shares granted	252,000
Grant date fair value	$ 3.64
Shares cancelled	(3,000)
Non-vested share awards	348,500	339,000
December 10, 2014
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Final vesting date	Dec. 31, 2016
Total shares granted	200,000
Grant date fair value	$ 2.44
Non-vested share awards	200,000
December 10, 2014
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Final vesting date	Dec. 31, 2016
Total shares granted	20,000
Grant date fair value	$ 2.44
Non-vested share awards	20,000
Total
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total shares granted	220,000
Non-vested share awards	220,000

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Financial Instruments and Fair Value Disclosures - Summary of Valuation of KLC Shares (Table) (Details) (USD $)	Dec. 31, 2014	Dec. 31, 2013
Derivatives Fair Value [Line Items]
KLC Shares - Marketable Securities	$ 955,535	$ 1,616,329
Quoted Prices in Active Markets (Level 1)
Derivatives Fair Value [Line Items]
KLC Shares - Marketable Securities	$ 955,535	$ 1,616,329

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Subsequent Events

12 Months Ended

Dec. 31, 2014

Subsequent Events [Abstract]

Subsequent Events

18.Subsequent Events

Related Party Agreements

In January 2015, the Company’s vessel owning subsidiaries signed amended and restated management agreements with Allseas, and brokerage services agreements with Seacommercial, as discussed in Note 4.

Inactive Non-Vessel Owning Subsidiaries

In March and April 2015, the Company proceeded with the dissolution of certain inactive non-vessel owning subsidiaries, as discussed in Note 1.

Loan and Credit Facilities

In March and April 2015, the Company agreed with Unicredit and Commerzbank to amend certain terms of the facilities, including the deferral or the partial deferral of certain scheduled quarterly installments, and the waiver of certain financial and security cover ratio covenants, as discussed in Note 9.

In addition, on March 27, 2015, the Company agreed with Bank of Ireland to waive 50% of the installment due in the first quarter of 2015, until April 30, 2015, as discussed in Note 9.

Sale of KLC Shares 

In April 2015, the Company sold a total of 18,133 KLC shares at an average sale price of $22.62 per share, as discussed in Note 11 .

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Vessels, Net (Table) (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Property Plant And Equipment [Line Items]
Balance beginning of period	$ 306,135,916
Depreciation for the period	(18,357,377)	(16,986,584)	(16,386,426)
Balance end of period	369,032,973	306,135,916
Vessel Cost
Property Plant And Equipment [Line Items]
Balance beginning of period	376,193,456	351,611,923
Newbuilding deliveries	81,051,077	24,581,533
Balance end of period	457,244,533	376,193,456
Accumulated Depreciation
Property Plant And Equipment [Line Items]
Balance beginning of period	(70,057,540)	(53,235,483)
Depreciation for the period	(18,154,020)	(16,822,057)
Balance end of period	(88,211,560)	(70,057,540)
Net Book Value
Property Plant And Equipment [Line Items]
Balance beginning of period	306,135,916	298,376,440
Newbuilding deliveries	81,051,077	24,581,533
Depreciation for the period	(18,154,020)	(16,822,057)
Balance end of period	$ 369,032,973	$ 306,135,916

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Significant Accounting Policies (Details) (USD $)	3 Months Ended	9 Months Ended	12 Months Ended
	Dec. 31, 2012	Sep. 30, 2012	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Property Plant And Equipment [Line Items]
Provision for Doubtful Accounts			$ 409,226	$ 265,751
Vessels Salvage Value Per Lightweight Ton	$300	$150
Depreciation			18,357,377	16,986,584	16,386,426
Computer Systems Software
Property Plant And Equipment [Line Items]
Useful life			5 years
Company Cars
Property Plant And Equipment [Line Items]
Useful life			6 years
Other Fixed Assets
Property Plant And Equipment [Line Items]
Depreciation			$ 203,357	$ 164,527	$ 135,095
Vessels
Property Plant And Equipment [Line Items]
Useful life			25 years

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Capital Structure (Details) (USD $)	2 Months Ended	9 Months Ended	12 Months Ended			10 Months Ended	8 Months Ended
	Feb. 18, 2014	Sep. 27, 2013	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013	Dec. 31, 2014	Dec. 24, 2012	Feb. 15, 2013	May 12, 2014
Class of Stock
Common stock - shares authorized			755,000,000				755,000,000
Proceeds from issuance of common stock, net of commissions	$ 39,741,152	$ 31,881,984	$ 42,235,790	$ 34,500,000	$ 10,000,000
Underwriting discounts and commissions		2,070,000
Other offering costs		548,016
Preferred stock shares authorized			25,000,000	25,000,000		25,000,000	25,000,000
Preferred stock par value			$ 0.001	$ 0.001		$ 0.001	$ 0.001
Preferred stock shares issued			0	0		0	0
Preferred stock shares outstanding			0	0		0	0
Common Shares - Class A
Class of Stock
Common stock - shares authorized			750,000,000	750,000,000		750,000,000	750,000,000
Common stock - par value			$ 0.001	$ 0.001		$ 0.001	$ 0.001
Common stock - shares issued			24,809,142	17,669,442		17,669,442	24,809,142
Share buyback program - shares repurchased and retired			30,000
Common stock - shares outstanding			24,809,142	17,669,442		17,669,442	24,809,142
Common Shares - Class B
Class of Stock
Common stock - shares authorized			5,000,000	5,000,000		5,000,000	5,000,000
Common stock - par value			$ 0.001	$ 0.001		$ 0.001	$ 0.001
Common stock - shares issued			0	0		0	0
Common stock - shares outstanding			0	0		0	0
Innovation Holdings S.A.
Class of Stock
Common stock - shares issued								4,901,961
Loretto Finance Inc.
Class of Stock
Common stock - shares issued	135,700	120,000	469,958				469,958		98,039
Share based compensation	880,015	714,000				335,784
Over-Allotment Option
Class of Stock
Common stock - shares issued	885,000	782,609
Share Buyback Program
Class of Stock
Share buyback program - authorized amount										$ 10,000,000
Share buyback program - shares repurchased and retired							30,000
Average price per share (common shares purchased and cancelled)							$ 5.682
Public offerings
Class of Stock
Common stock - shares issued	6,785,000	6,000,000
Issue price per share	$ 6.25	$ 5.75

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Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2014

Commitments and Contingencies [Abstract]

Rental Expense

For the year ending	Amount
December 31, 2015	$44,508
December 31, 2016	44,508
December 31, 2017	33,381
Total	$122,397

Charter Hire

For the year ending	Amount
December 31, 2015	$4,308,843
Total	$4,308,843

Newbuilding Commitments

For the year ending	Amount
December 31, 2015	$101,700,617
Total	$101,700,617

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Other Assets (Details) (USD $)	Dec. 31, 2014	Dec. 31, 2013
Other Assets [Abstract]
Other assets (non current)	$ 4,367,134	$ 2,303,304
Utility deposits	$ 6,183	$ 6,183

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Financial Instruments and Fair Value Disclosures - Derivatives designated as hedging instruments (Table 2) (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Interest rate swaps - Realized Loss	$ (98,656)	$ (312,069)	$ (174,869)
Interest and finance costs (Location of Loss Transferred from Accumulated Other Comprehensive Loss in Statements of Comprehensive Loss - Effective Portion)
Interest rate swaps - Realized Loss	$ (98,656)	$ (312,069)

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Long-Term Debt - Terms and Covenants (Details)

12 Months Ended

Dec. 31, 2014

Debt Instrument [Line Items]

Covenant Compliance

As of December 31, 2014, the Company was in compliance with all debt covenants with respect to its debt agreements, with the exception of the security cover ratio covenant contained in the facility with Commerzbank. The respective breach was subsequently cured as in April 2015, the Company agreed with Commerzbank to waive the application of the security cover ratio covenant contained in the facility effective from December 31, 2014 until December 31, 2015 as discussed above.
Given the current drybulk charter rates, it is probable that the Company will not be in compliance with the minimum working capital requirement and the minimum liquidity requirement contained in certain of its loan and credit facilities on the applicable measurement dates in 2015. Furthermore, based on the Company’s cash flow projections for 2015, cash on hand and cash provided by operating activities will not be sufficient to cover scheduled debt repayments due in 2015. The Company is currently in negotiations with such lenders to obtain waivers for the affected covenants. The Company is also exploring several alternatives aiming to manage its working capital requirements and other commitments if current drybulk charter rates remain at today’s low levels including negotiations for the restructuring of its loans.

(a) Commerzbank AG (August 12, 2011)

Debt Instrument [Line Items]

Covenants (as defined in the respective debt agreement)

• The ratio of EBITDA to net interest expenses is waived until December 31, 2015, and thereafter shall not be less than 3.00:1.00.
• The market value adjusted net worth of the Company is waived until December 31, 2015, and thereafter shall not be less than $100,000,000.
• Maintain liquid assets requirement is waived until December 31, 2015, and thereafter shall equal an amount of no less than $650,000 per vessel at all times.
• The ratio of maximum net debt to total assets expressed as a percentage is waived until December 31, 2015, and thereafter shall not exceed 80%.
• The aggregate fair market value of the mortgaged vessels to outstanding loan ratio is waived until December 31, 2015, and thereafter shall exceed 120%.

(b) Unicredit Bank AG (November 19, 2007)

Debt Instrument [Line Items]

Covenants (as defined in the respective debt agreement)

The financial and security cover ratio covenants contained in the facility have been permanently waived until the maturity of the loan, pursuant to the supplemental agreement dated March 27, 2015.

(d) Bank of Ireland (March 30, 2009)

Debt Instrument [Line Items]

Covenants (as defined in the respective debt agreement)

• The minimum requirement of market value adjusted net worth of the Company is waived until December 31, 2014 and thereafter, shall not be less than $50,000,000.
• The leverage ratio is waived until December 31, 2014 and thereafter, shall not be greater than 0.80:1.00.
• Minimum liquid assets requirement is waived until December 31, 2014 and thereafter, the Company shall maintain liquid assets in an amount of no less than $500,000 per vessel at all times.
• The fair market value of the mortgaged vessel to outstanding loan ratio is waived until December 31, 2014 and thereafter, shall exceed 110%.

(e-2) HSH Nordbank AG (April 4, 2014)

Debt Instrument [Line Items]

Covenants (as defined in the respective debt agreement)

• The aggregate fair market value of the mortgaged vessels to outstanding loan ratio shall exceed 125%.

(f) HSBC Bank Plc (July 2, 2010)

Debt Instrument [Line Items]

Covenants (as defined in the respective debt agreement)

• The ratio of total net debt to EBITDA shall be applicable and not exceed 9.00:1.00 from January 1, 2016 until December 31, 2016 and 8.00:1.00 thereafter.
• The ratio of EBITDA to interest expense shall be applicable and not be less than 2.50:1.00 from January 1, 2016 until the final maturity of the facility.
• The market value adjusted net worth of the Company shall be at least $50,000,000 until December 31, 2013 and $100,000,000 thereafter.
• The ratio of total net debt to value adjusted total assets shall be applicable and not greater than 0.80:1.00 from January 1, 2014 until the final maturity of the facility.
• The fair market value of the mortgaged vessel to outstanding loan ratio shall exceed 105% until December 31, 2013, 110% until December 31, 2014 and 120% thereafter.

(g-2) Nordea Bank Finland Plc (May 6, 2014)

Debt Instrument [Line Items]

Covenants (as defined in the respective debt agreement)

• The Company shall maintain a positive working capital at all times, excluding any balloon repayments of long-term loan facilities.
• There is available to the Company cash and cash equivalents (including restricted but unpledged cash representing minimum liquidity required to be maintained under any financial indebtedness) which are not subject to any security interest, in an amount of not less than the greater of (i) 6% of total financial indebtedness and (ii) $750,000 per vessel owned on the last day of the relevant test period. In the event that the Company pays any dividend or makes any other form of distribution, after the payment of such dividend or the making of such distribution there is available to the Company cash and cash equivalents in an amount of not less than the greater of (i) 8% of total financial indebtedness and (ii) $1,000,000 per vessel owned on the last day of the relevant test period.
• The ratio of market value adjusted shareholders’ equity to the market value adjusted total assets shall be equal to or greater than 30%.
• The aggregate fair market value of the mortgaged vessels to outstanding loan ratio shall exceed 135%.

(h) Senior unsecured notes due 2021

Debt Instrument [Line Items]

Covenants (as defined in the respective debt agreement)

The indenture governing the Notes contains certain restrictive covenants, including limitations on asset sales and:
• Limitation on Borrowings: Net borrowings not to exceed 70% of total assets.
• Limitation on Minimum Net Worth: Net worth to always exceed $100,000,000.

Additional Covenants

Debt Instrument [Line Items]

Covenants (as defined in the respective debt agreement)

Additional Covenants: Each of the above loan and credit facilities are secured by first priority mortgages on all vessels described in Note 1, first assignments of all freights, earnings and insurances. They also contain covenants that require the Company to maintain adequate insurance coverage and to obtain the lender’s consent before it changes the flag, class or management of the vessels, or enter into a new line of business. The facilities include customary events of default, including those relating to a failure to pay principal or interest, a breach of covenant, representation and warranty, a cross-default to other indebtedness and non-compliance with security documents, and prohibits the Company from paying dividends if the Company is in default on its facilities and if, after giving effect to the payment of the dividend, the Company is in breach of a covenant.
In addition, each of the above loan and credit facilities require a minimum balance of cash and cash equivalents to be maintained at all times with the respective lender, ranging from $400,000 to $750,000 per mortgaged vessel, in excess of any additional cash collateral to be maintained, as defined by the respective loan agreements.
Certain of the above loan and credit facilities restrict the amount of dividends the Company may pay to $0.50 per share per annum and limit the amount of quarterly dividends the Company may pay to 100% of its net income for the immediately preceding financial quarter. In addition, under the existing loan and credit facilities, the Company is required to maintain minimum liquidity after payment of dividends equal to the greater of the next six months’ debt service, 8% of total financial indebtedness or $1,000,000 per vessel. Furthermore, according to the supplemental agreement the Company entered into with Unicredit on March 27, 2015 as discussed above, the Company is not permitted to declare or pay any dividends until all the deferred amounts of the facility’s repayment installments have been repaid in full.

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Transactions with Related Parties - Crewcare Inc. (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Related Party Transaction [Line Items]
Due to related parties	$ 166,354	$ 82,074
Crewcare Inc. Manning Agency Agreements
Related Party Transaction [Line Items]
Monthly manning service fee per seaman	95
One-off recruitment fees per seaman	120
In-house training fee per seaman	30
Extra in-house training fee per seaman	50
Manning expenses	441,499	382,517	321,648
Crewcare Inc. Cadetship Program Agreement
Related Party Transaction [Line Items]
Lump sum fee per cadet employed	5,000
Cadetship program expenses	360,000	15,000
Crewcare Inc.
Related Party Transaction [Line Items]
Due to related parties	$ 166,354	$ 82,074

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Significant Accounting Policies

12 Months Ended

Dec. 31, 2014

Significant Accounting Policies [Abstract]

Significant Accounting Policies

2.Significant Accounting Policies

(a) Principles of Consolidation: The consolidated financial statements incorporate the financial statements of the Company. Income and expenses of subsidiaries acquired or disposed of during the period are included in the consolidated statements of comprehensive income / (loss) from the effective date of acquisition and up to the effective date of disposal, as appropriate. All intercompany balances and transactions have been eliminated. Paragon, as the holding company, determines whether it has a controlling financial interest in an entity by first evaluating whether the entity is a voting interest entity or a variable interest entity. Under ASC 810 “Consolidation” a voting interest entity is an entity in which the total equity investment at risk is sufficient to enable the entity to finance itself independently and provides the equity holders with the obligation to absorb losses, the right to receive residual returns and the right to make financial and operating decisions. The holding company consolidates voting interest entities in which it owns all, or at least a majority (generally, greater than 50%) of the voting interest. Variable interest entities (“VIE”) are entities as defined under ASC 810 that in general either do not have equity investors with voting rights or that have equity investors that do not provide sufficient financial resources for the entity to support its activities. The determination of whether a reporting entity is required to consolidate another entity is based on, among other things, the other entity’s design and purpose and the reporting entity’s power, through voting or similar rights, to direct the activities of the other entity that most significantly impact the other entity’s economic performance. A controlling financial interest in a VIE is present when a company has the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE, or both. Only one reporting entity, known as the primary beneficiary, is expected to be identified as having a controlling financial interest and thus is required to consolidate the VIE. The Company evaluates all arrangements that may include a variable interest in an entity to determine if it may be the primary beneficiary, and would be required to include assets, liabilities and operations of a VIE in its consolidated financial statements. As of December 31, 2013 and 2014, no such interest existed.

(b) Use of Estimates: The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

(c) Other Comprehensive Income / (Loss): The Company follows the accounting guidance relating to “Comprehensive Income,” which requires separate presentation of certain transactions that are recorded directly as components of stockholders’ equity. The Company has elected to present net income / (loss) and other comprehensive income / (loss) in a single continuous statement of comprehensive income / (loss) in its consolidated financial statements.

(d) Foreign Currency Translation: The functional currency of the Company is the U.S. Dollar. For other than derivative instruments, each asset, liability, revenue, expense, gain or loss arising from a foreign currency transaction is measured and recorded in the functional currency using the exchange rate in effect at the date of the transaction. As of balance sheet date, monetary assets and liabilities that are denominated in a currency other than the functional currency are adjusted to reflect the exchange rate prevailing at the balance sheet date and any gains or losses are included in the statements of comprehensive income / (loss). As of December 31, 2013 and 2014, the Company had no foreign currency derivative instruments.

(e) Cash and Cash Equivalents: The Company considers highly liquid investments such as time deposits and certificates of deposit with an original maturity of three months or less to be cash equivalents.

(f) Restricted Cash: Restricted cash represents pledged cash deposits or minimum liquidity required to be maintained under the Company’s borrowing arrangements or in relation to bank guarantees issued on behalf of the Company. In the event that the obligation to maintain such deposits is expected to be terminated within the next twelve months, or relates to general minimum liquidity requirements with no obligation to retain such funds in retention accounts, these deposits are classified as current assets. Otherwise they are classified as non-current assets.

(g) Trade Receivables (net): Trade receivables (net), reflect the receivables from charters, net of an allowance for doubtful accounts. At each balance sheet date, all potentially uncollectible accounts are assessed individually for purposes of determining the appropriate provision for doubtful accounts. Allowance for doubtful accounts as of December 31, 2013 and 2014 was $265,751 and $409,226, respectively.

(h) Insurance Claims: The Company records insurance claim recoveries for insured losses incurred on damages to fixed assets and for insured crew medical expenses under Other receivables. Insurance claims are recorded, net of any deductible amounts, at the time the Company’s fixed assets suffer insured damages or when crew medical expenses are incurred, recovery is probable under the related insurance policies and the Company can make an estimate of the amount to be reimbursed following submission of the insurance claim.

(i) Inventories: Inventories consist of lubricants and stores on board the vessels. When vessels are unemployed or are operating under voyage charters, bunkers on board are also recorded in inventories. Inventories are stated at the lower of cost or market. Cost is determined by the first in, first out method.

(j) Vessel Cost: Vessels are stated at cost, which consists of the contract price, less discounts, plus any direct expenses incurred upon acquisition, including improvements, commission paid, delivery expenses and other expenditures to prepare the vessel for her initial voyage. Financing costs incurred during the construction period of the vessels are also capitalized and included in the vessels’ cost. Subsequent expenditures for conversions and major improvements are also capitalized when they appreciably extend the life, increase the earning capacity or improve the efficiency or safety of the vessels. Repairs and maintenance are expensed as incurred.

(k) Impairment of Long-Lived Assets: The Company reviews its long-lived assets “held and used” for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. When the estimate of future undiscounted cash flows, excluding interest charges, 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. The Company measures an impairment loss as the difference between the carrying value of the asset and its fair value. In this respect, management regularly reviews the carrying amount of the vessels in connection with the estimated recoverable amount for each of the Company’s vessels.

The undiscounted projected net operating cash flows for each vessel are determined by considering the contracted charter revenues from existing charters for the fixed vessel days and an estimated daily time charter equivalent for the unfixed days (based on the most recent ten year historical average of similar size vessels) over the remaining estimated life of the vessel, assumed to be 25 years from the date of initial delivery from the shipyard, net of brokerage commissions, the salvage value of each vessel, which is estimated to be $300 per lightweight ton, expected outflows for vessels’ future dry-docking expenses and estimated vessel operating expenses, assuming an average annual inflation rate where applicable. The Company uses the historical ten-year average as it is considered a reasonable estimation of expected future charter rates over the remaining useful life of the Company’s vessels since it represents a full shipping cycle that captures the highs and lows of the market. The Company utilizes the standard deviation in order to eliminate the outliers of the sample before computing the historic ten-year average of the one-year time charter rate.

(l) Vessel Depreciation: Depreciation is computed using the straight-line method over the estimated useful life of the vessels, after considering the estimated salvage value. Each vessel's salvage value is equal to the product of its lightweight tonnage and estimated scrap rate, which up until September 30, 2012, was estimated to be $150 per lightweight ton. In order to align the scrap rate estimates with the historical average scrap rate, effective from October 1, 2012, the Company adjusted the estimated scrap rate used to calculate the vessels’ salvage value from $150 to $300 per lightweight ton. The impact of the increase in the estimated scrap rate is a decrease in depreciation expense going forward.

Management estimates the useful life of the Company’s vessels to be 25 years from the date of initial delivery from the shipyard, including secondhand vessels. Secondhand vessels are depreciated from the date of their acquisition through their remaining estimated useful life.

(m) Other Fixed Assets: Other fixed assets consist of computer systems installed on board the vessels to improve their efficiency, software and a vehicle. Other fixed assets are stated at cost, less accumulated depreciation. Depreciation is calculated using the straight-line method over the useful life of the assets, which is estimated to be 5 years for the computer systems software, and 6 years for the Company’s vehicle. Depreciation charged in the years ended December 31, 2012, 2013 and 2014 amounted to $135,095, $164,527 and $203,357, respectively.

(n) Investments in Affiliate: Investments in the common stock of entities, in which the Company has significant influence over operating and financial policies, are accounted for using the equity method. Under this method, the investment in the affiliate is initially recorded at cost and is adjusted to recognize the Company’s share of the earnings or losses of the investee after the acquisition date and is adjusted for impairment whenever facts and circumstances indicate that a decline in fair value below the cost basis is other than temporary. The amount of the adjustment is included in the determination of net income / (loss). Differences between the carrying amount of the investment in affiliate and the amount of the Company’s underlying equity in the net assets of the affiliate is amortized over the remaining life of the affiliate’s tangible and intangible assets, and is included in Equity in net income / (loss) of affiliate in the consolidated statements of comprehensive income / (loss). Dividends received from an affiliate reduce the carrying amount of the investment. When the Company’s share of losses in an affiliate equals or exceeds its interest in the affiliate, the Company does not recognize further losses, unless the Company has incurred obligations or made payments on behalf of the affiliate.

(o) Dry-docking and Special Survey Costs: Dry-docking and special survey costs are expensed in the period incurred.

(p) Financing Costs: Financing fees incurred for obtaining new loans and credit facilities are deferred and amortized to interest expense over the respective loan or credit facility using the effective interest rate method. Any unamortized balance of costs relating to loans repaid or refinanced is expensed in the period the repayment or refinancing is made, subject to the accounting guidance regarding debt extinguishment. Any unamortized balance of costs related to credit facilities repaid is expensed in the period. Any unamortized balance of costs relating to credit facilities refinanced are deferred and amortized over the term of the respective credit facility in the period the refinancing occurs, subject to the provisions of the accounting guidance relating to Debt – Modifications and Extinguishments. The unamortized financing costs are reflected in Other assets in the accompanying balance sheets.

(q) Debt restructurings: The Company accounts for debt modifications or restructuring as troubled debt restructuring when a lender for economic or legal reasons related to the Company’s financial situation grants a concession that it would not otherwise consider. These concessions may include a reduction in the interest rate, principal or accrued interest, extension of the maturity date or other actions intended to minimize potential losses. The Company considers a lender to have granted a concession if the Company’s effective interest rate on the restructured debt is less than the effective interest rate of the old debt immediately before the restructuring. The Company considers the total future cash flows (defined as principal plus interest) of the restructured debt in comparison with the carrying value of the original debt. If a debt modification or restructuring is determined to be a troubled debt restructuring, the Company reduces the carrying amount of the debt when the debt balance is greater than the total future cash flows under the new terms, in which case a gain is recognized. When the total future cash flows of the restructured debt are greater than the carrying value at the date of amendment, the carrying value of the original debt is not adjusted. In a troubled debt restructuring in which the Company agrees to transfer assets to fully settle the debt, the Company recognizes a gain on restructuring for the difference between the carrying amount of the debt and the more clearly evident of: (a) the fair value of the transferred assets or (b) the fair value of the settled debt.

(r) Pension and Retirement Benefit Obligations—Crew: The vessel owning companies employ the crew on board under short-term contracts (usually up to nine months) and, accordingly, they are not liable for any pension or post-retirement benefits.

(s) Revenue and Expenses:

Revenue is recognized when a charter agreement exists, the vessel is made available to the charterer and collection of the related revenue is reasonably assured.

Time Charter Revenue: Time charter revenues are recorded ratably over the term of the charter as service is provided, including the amortization / accretion of the above / below market acquired time charters, where applicable. When two or more time charter rates are involved during the life term of a charter agreement, the Company recognizes revenue on a straight-line basis, and income accrued or deferred as a result is included in Other receivables or Deferred income, respectively. Time charter revenues received in advance of the provision of charter service are recorded as deferred income, and recognized when the charter service is rendered.

Revenue / Voyage charters: Voyage charter is a charter where a contract is made in the spot market for the use of a vessel for a specific voyage for a specified freight rate per ton. If a charter agreement exists and collection of the related revenue is reasonably assured, revenue is recognized as it is earned ratably during the duration of the period of each voyage. A voyage is deemed to commence upon the latest 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 the completion of discharge of the current cargo. Demurrage income represents payments by a charterer to a vessel owner when loading or discharging time exceeds the stipulated time in the voyage charter and is recognized as it is earned.

Commissions: Charter hire commissions are deferred and amortized over the related charter period and are presented separately in the accompanying consolidated statements of comprehensive loss.

Voyage Expenses: Voyage expenses exclude commissions and consist of all costs that are unique to a particular voyage, primarily including port expenses, canal dues, war risk insurances and fuel costs. Voyage expenses also include losses from the sale of bunkers to charterers and bunkers consumed during off-hire periods and while traveling to and from dry-docking.

Vessel Operating Expenses: Vessel operating expenses are accounted for as incurred on the accrual basis. Vessel operating expenses include crew wages and related costs, the cost of insurance, expenses relating to repairs and maintenance, the cost of spares and consumable stores, and other miscellaneous expenses.

(t) Share based Compensation: Share based payments to employees and directors, including grants of employee and directors stock options, are recognized in the statements of comprehensive income / (loss) based on their grant date fair values and amortized over the required service period.

(u) Segment Reporting: The Company reports financial information and evaluates its operations by charter revenues and not by the length of ship employment for its customers (i.e., spot vs. time charters) or by geographical region as the charterer is free to trade the vessel worldwide and, as a result, the disclosure of geographical information is impracticable. The Company does not have discrete financial information to evaluate the operating results for each type of charter. Although revenue can be identified for these types of charters, management cannot and does not identify expenses, profitability or other financial information for these charters. As a result, management, including the Chief Executive Officer being the chief operating decision maker, reviews operating results solely by revenue per day and operating results of the fleet, and thus the Company has determined that it operates under one reportable segment.

(v) Derivatives: The Company enters into interest rate swap agreements to manage its exposure to fluctuations of interest rate risk associated with its borrowings. All derivatives are recognized in the consolidated financial statements at their fair value. The fair value of the interest rate derivatives is based on a discounted cash flow analysis. When such derivatives do not qualify for hedge accounting, the Company recognizes their fair value changes in current period earnings. When the derivatives qualify for hedge accounting, the Company recognizes the effective portion of the gain or loss on the hedging instrument directly in other comprehensive income / (loss), while the ineffective portion, if any, is recognized immediately in current period earnings. The Company, at the inception of the transaction, documents the relationship between the hedged item and the hedging instrument, as well as its risk management objective and the strategy of undertaking various hedging transactions. The Company also assesses at hedge inception of whether the hedging instruments are highly effective in offsetting changes in the cash flows of the hedged items.

The Company discontinues cash flow hedge accounting if the hedging instrument expires and it no longer meets the criteria for hedge accounting or designation is revoked by the Company. At that time, any cumulative gain or loss on the hedging instrument recognized in equity is kept in equity until the forecasted transaction occurs. When the forecasted transaction occurs, any cumulative gain or loss on the hedging instrument is recognized in current period earnings. If a hedged transaction is no longer expected to occur, the net cumulative gain or loss recognized in equity is transferred to current period earnings as financial income or expense.

(w) Fair value of financial instruments: The fair value of the interest rate derivatives is based on a discounted cash flow analysis.

In accordance with the requirements of accounting guidance relating to Fair Value Measurements, the Company classifies and discloses its assets and liabilities carried at fair value 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.

(x) Earnings per Share (EPS): The computation of basic earnings per share is based on the weighted average number of common shares outstanding during the period determined using the two-class method of computing earnings per share. Non-vested share awards issued are included in the two-class method and income attributable to non-vested share awards is deducted from the net income reported for purposes of calculating net income available to common shareholders used in the computation of basic earnings per share. The computation of diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised. Such securities include non-vested share awards for which the assumed proceeds upon grant are deemed to be the amount of compensation cost attributable to future services and are not yet recognized and common shares issuable upon exercise of the Company’s outstanding warrants, to the extent that they are dilutive, using the treasury method.

(y) Subsequent Events: The Company evaluates subsequent events or transactions up to the date in which the financial statements are issued according to the requirements of ASC 855.

(z) Recent Accounting Pronouncements:

The Financial Accounting Standards Board (“FASB”) and the International Accounting Standards Board (“IASB”) jointly issued a standard that will supersede virtually all of the existing revenue recognition guidance in U.S. GAAP and is effective for annual periods beginning on or after December 15, 2016. The standard establishes a five-step model that will apply to revenue earned from a contract with a customer (with limited exceptions), regardless of the type of revenue transaction or the industry. The standard’s requirements will also apply to the recognition and measurement of gains and losses on the sale of some non-financial assets that are not an output of the entity’s ordinary activities (e.g., sales of property, plant and equipment or intangibles). Extensive disclosures will be required, including disaggregation of total revenue; information about performance obligations; changes in contract asset and liability account balances between periods and key judgments and estimates. Management is in the process of accessing the impact of the new standard on Company’s financial position and performance.

In August 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-15 – Presentation of Financial Statements - Going Concern. ASU 2014-15 provides guidance about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. ASU 2014-15 requires an entity’s management to evaluate at each reporting period based on the relevant conditions and events that are known at the date of financial statements are issued, whether there are conditions or events, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued and to disclose the necessary information. ASU 2014-15 is effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted.

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Long-Term Debt (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
(g-2) Nordea Bank Finland Plc (May 6, 2014)
Debt Instrument [Line Items]
Credit facility undrawn portion	$ 78,000,000
Long-Term Debt - Additional Information
Debt Instrument [Line Items]
Interest and finance costs	7,451,854	6,129,911	5,673,906
Capitalized interest	$ 1,618,836	$ 786,263	$ 611,655
Weighted average interest rate	3.53%	3.21%	2.76%

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Transactions with Related Parties (Table) (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Management fees - related party
Total Management fees	$ 6,266,270	$ 5,874,416	$ 4,094,744
Allseas Marine SA
Included in Commissions
(1(i)) Charter hire commissions	708,153	750,533	646,987
Netted against Gain from sale of assets
(1(ii)) Vessel sale & purchase commissions	745,000	0	0
Included in Vessel operating expenses
(1(v)) Superintendent fees	481,200	399,626	338,826
Included in Dry-docking expenses
(1(v)) Superintendent fees	123,840	109,248	0
Management fees - related party
(1(iii)) Management fees	4,628,813	4,104,271	3,428,548
(2) Financial accounting and reporting services	757,442	720,361	666,196
(3) Loretto agreement	880,015	1,049,784	0
Total Management fees	6,266,270	5,874,416	4,094,744
Included in General and administrative expenses
(4) Administrative fees	37,746	38,598	36,085
(7) Executive services agreement	$ 5,689,152	$ 7,582,634	$ 3,228,438

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Vessels, Net (Tables)

12 Months Ended

Dec. 31, 2014

Vessels Net [Abstract]

Vessels, Net

	Vessel	Accumulated	Net Book
	Cost	Depreciation	Value
Balance January 1, 2013	$351,611,923	$(53,235,483)	$298,376,440
Newbuilding deliveries	24,581,533	-	24,581,533
Depreciation for the period	-	(16,822,057)	(16,822,057)
Balance December 31, 2013	$376,193,456	$(70,057,540)	$306,135,916
Newbuilding deliveries	81,051,077	-	81,051,077
Depreciation for the period	-	(18,154,020)	(18,154,020)
Balance December 31, 2014	$457,244,533	$(88,211,560)	$369,032,973

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Transactions with Related Parties (Tables)

12 Months Ended

Dec. 31, 2014

Transactions with Related Parties [Abstract]

Related Party Transactions

	2012	2013	2014
Included in Commissions
(1(i)) Charter hire commissions	$646,987	$750,533	$708,153
Netted against Gain from sale of assets
(1(ii)) Vessel sale & purchase commissions	$-	$-	$745,000
Included in Vessel operating expenses
(1(v)) Superintendent fees	$338,826	$399,626	$481,200
Included in Dry-docking expenses
(1(v)) Superintendent fees	$-	$109,248	$123,840
Management fees - related party
(1(iii)) Management fees	$3,428,548	$4,104,271	$4,628,813
(2) Financial accounting and reporting services	666,196	720,361	$757,442
(3) Loretto agreement	-	1,049,784	$880,015
Total Management fees	$4,094,744	$5,874,416	$6,266,270
Included in General and administrative expenses
(4) Administrative fees	$36,085	$38,598	$37,746
(7) Executive services agreement	$3,228,438	$7,582,634	$5,689,152

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Investment in Affiliate (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Investments In And Advances To Affiliates [Line Items]
Number of shares in affiliate held by the Company	3,437,500	3,437,500
Loss on investment in affiliate	$ 8,840,343	$ 8,620,372	$ 16,985,066
Box Ships Inc.
Investments In And Advances To Affiliates [Line Items]
Percentage of ownership in Box Ships	11.00%	13.60%
Loss on investment in affiliate	$ 8,840,343	$ 8,620,372

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Transactions with Related Parties - Allseas (Details)	12 Months Ended			5 Months Ended	7 Months Ended	12 Months Ended					12 Months Ended											22 Months Ended	12 Months Ended			2 Months Ended	9 Months Ended	10 Months Ended
	Dec. 31, 2014 USD ($)	Dec. 31, 2013 USD ($)	Dec. 31, 2012 USD ($)	May 31, 2012 Allseas Marine SA EUR (€)	Dec. 31, 2014 Allseas Marine SA EUR (€)	Dec. 31, 2014 Allseas Marine SA USD ($)	Dec. 31, 2014 Allseas Marine SA EUR (€)	May 31, 2014 Allseas Marine SA EUR (€)	May 31, 2013 Allseas Marine SA EUR (€)	Dec. 31, 2013 Allseas Marine SA USD ($)	Dec. 31, 2014 Superintedent services EUR (€)	Dec. 31, 2014 Financial Accounting Services EUR (€)	Dec. 31, 2014 Financial Reporting Services USD ($)	Dec. 31, 2014 Newbuildings Supervision USD ($)	Dec. 31, 2014 Newbuildings Supervision EUR (€)	Dec. 31, 2014 Executive Services USD ($)	Dec. 31, 2014 Executive Services EUR (€)	Dec. 31, 2013 Executive Services USD ($)	Dec. 31, 2013 Executive Services EUR (€)	Dec. 31, 2012 Executive Services USD ($)	Dec. 31, 2012 Executive Services EUR (€)	Dec. 31, 2014 Executive Services	Dec. 31, 2014 Related Party USD ($)	Dec. 31, 2013 Related Party USD ($)	Dec. 31, 2012 Related Party USD ($)	Feb. 18, 2014 Loretto Finance Inc. USD ($)	Sep. 27, 2013 Loretto Finance Inc. USD ($)	Dec. 31, 2013 Loretto Finance Inc. USD ($)	Dec. 31, 2014 Loretto Finance Inc.	Feb. 15, 2013 Loretto Finance Inc.	Feb. 18, 2014 Public offerings	Sep. 27, 2013 Public offerings
Related Party Transaction [Line Items]
Capitalized expenses						$ 3,804,918				$ 1,588,512
Loss from contract cancellation	0	568,658	0
Loss from contract cancellation related party																							0	444,421	0
Charter hire commission payable to the management company						1.25%	1.25%
Commission rate payable to the management company for the purchase, sale and construction of vessels						1.00%	1.00%
Daily management fee				636.74	664.46			661.15	652.02
Pre-delivery services amount payable						15,000
Superintendents management fee payable											500				500
Annual fee payable for financial accounting services												250,000
Annual fee per vessel payable financial reporting services cost													30,000
Common stock - shares issued																										135,700	120,000		469,958	98,039	6,785,000	6,000,000
Share based compensation																										880,015	714,000	335,784
Flat fee for newbuilding supervision services														375,000
Daily fee for newbuilding vessels' supervision															115
Compensation for involuntary termination of contract						3,642,000	3,000,000
Euro / U.S. dollar exchange rate	1.214					1.2140	1.2140
Annual executive services fee payable																	2,900,000		2,700,000		2,500,000
Executive services agreement duration						5yrs	5yrs
Annual executive services fee paid																5,689,152		7,582,634		3,228,438
Incentive compensation paid to executives																1,848,900		3,993,000		0
Percentage of the issued and oustanding shares of the company, issuable to the management company																						5.00%
Due from related parties	$ 843,510	$ 146,051				$ 843,510				$ 146,051

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Other Assets (Tables)

12 Months Ended

Dec. 31, 2014

Other Assets [Abstract]

Deferred Financing Costs

Balance January 1, 2013	$2,596,029
Additions	642,825
Amortization	(941,733)
Balance December 31, 2013	$2,297,121
Additions	4,172,546
Amortization	(2,108,716)
Balance December 31, 2014	$4,360,951

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Investment in Affiliate (Tables)

12 Months Ended

Dec. 31, 2014

Investment in Affiliate [Abstract]

Investment in Affiliate

Balance January 1, 2013	$19,987,743
Equity in net income of affiliate	1,652,339
Equity in other comprehensive income of affiliate	77,165
Dividends received	(1,787,500)
Dilution effect	(390,821)
Impairment in investment in affiliate	(8,229,551)
Balance December 31, 2013	$11,309,375
Equity in net income of affiliate	471,079
Equity in other comprehensive income of affiliate	16,139
Dilution effect	(221,679)
Impairment in investment in affiliate	(8,618,664)
Balance December 31, 2014	$2,956,250

Summarized Income Statement Data in respect of Box Ships

	Year ended December 31,
INCOME STATEMENT DATA	2013	2014
Net revenue	$69,836,201	$49,864,674
Operating income	23,631,192	1,966,947
Net income	$15,307,658	$2,623,515

Summarized Balance Sheet Data in respect of Box Ships

	As of December 31,
BALANCE SHEET DATA	2013	2014
Total current assets	$31,691,262	$22,011,255
Total non-current assets	397,915,376	375,837,950
Total assets	429,606,638	397,849,205
Total current liabilities	184,434,021	140,886,944
Total long-term liabilities	$453,248	$282,375

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Basis of Presentation and General Information

12 Months Ended

Dec. 31, 2014

Basis of Presentation and General Information [Abstract]

Basis of Presentation and General Information

1.Basis of Presentation and General Information

Basis of Presentation: Paragon Shipping Inc. (“Paragon”) is a public company incorporated in the Republic of the Marshall Islands on April 26, 2006 and is engaged in the ocean transportation of drybulk cargoes worldwide through the ownership and operation of drybulk carriers. In December 2006, Paragon established a branch in Greece under the provision of Law 89 of 1967, as amended.

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include the accounts of Paragon Shipping Inc. and its wholly-owned subsidiaries (collectively the “Company”) as discussed below, as of December 31, 2013 and 2014 and for the years ended December 31, 2012, 2013 and 2014.

Drybulk Vessel Owning Subsidiaries:

Vessel Owning Company	Date of Incorporation	Country of Incorporation	Vessel’s Name	Delivery Date	Built	DWT
Trade Force Shipping S.A.	November 15, 2006	Marshall Islands	Deep Seas	December 2006	1999	72,891
Frontline Marine Company	November 15, 2006	Marshall Islands	Calm Seas	December 2006	1999	74,047
Fairplay Maritime Ltd.	November 15, 2006	Marshall Islands	Kind Seas	December 2006	1999	72,493
Donna Marine Co.	July 4, 2007	Marshall Islands	Pearl Seas	August 2007	2006	74,483
Protea International Inc.	July 17, 2007	Liberia	Sapphire Seas	August 2007	2005	53,702
Reading Navigation Co.	July 17, 2007	Liberia	Diamond Seas	September 2007	2001	74,274
Imperator I Maritime Company	September 27, 2007	Marshall Islands	Coral Seas	November 2007	2006	74,477
Canyon I Navigation Corp.	September 27, 2007	Marshall Islands	Golden Seas	December 2007	2006	74,475
Paloma Marine S.A.	June 19, 2008	Liberia	Friendly Seas	August 2008	2008	58,779
Eris Shipping S.A.	April 8, 2010	Liberia	Dream Seas	July 2010	2009	75,151
Coral Ventures Inc.	August 5, 2009	Liberia	Prosperous Seas	May 2012	2012	37,293
Winselet Shipping And Trading Co. Ltd.	April 6, 2010	Liberia	Precious Seas	June 2012	2012	37,205
Aminta International S.A.	May 5, 2010	Liberia	Priceless Seas	January 2013	2013	37,202
Adonia Enterprises S.A.	May 5, 2010	Liberia	Proud Seas (1)	January 2014	2014	37,227
Alcyone International Marine Inc.	June 17, 2013	Liberia	Gentle Seas (1)	October 2014	2014	63,350
Neptune International Shipping & Trading S.A.	June 17, 2013	Liberia	Peaceful Seas (1)	October 2014	2014	63,331

(1) Refer to Notes 5 and 9

Vessel Under Construction Owning Subsidiaries:

Vessel Owning Company	Date of Incorporation	Country of Incorporation	Hull Number	Type	Expected Delivery	DWT
Amphitrite Shipping Inc.	June 17, 2013	Liberia	DY4050 (1)	Drybulk Carrier	2015	63,500
Mirabel International Maritime Co.	June 17, 2013	Liberia	DY4052 (1)	Drybulk Carrier	2015	63,500
Dolphin Sunrise Limited	February 25, 2014	Marshall Islands	YZJ1144 (1)	Drybulk Carrier	2015	81,800
Nautilus Investment Limited	February 25, 2014	Marshall Islands	YZJ1145 (1)	Drybulk Carrier	2015	81,800
Oceanus Investments Limited	February 25, 2014	Marshall Islands	YZJ1142 (1)	Drybulk Carrier	2015	81,800

(1) Refer to Note 5

Non-Vessel Owning Subsidiaries:

Non-Vessel Owning Company	Date of Incorporation	Country of Incorporation
Camelia Navigation S.A.	November 15, 2006	Marshall Islands
Explorer Shipholding Limited	November 15, 2006	Marshall Islands
Epic Investments Inc.	December 21, 2006	Marshall Islands
Opera Navigation Co. (1)	December 21, 2006	Marshall Islands
Ovation Services Inc. (1)	September 16, 2009	Marshall Islands
Irises Shipping Ltd. (1)	October 6, 2009	Marshall Islands
Letitia Shipping Limited (1)	May 4, 2010	Marshall Islands
Nereus Navigation Ltd. (1)	May 4, 2010	Marshall Islands
Ardelia Navigation Limited (1)	June 15, 2010	Liberia
Eridanus Trading Co. (1)	July 1, 2010	Liberia
Delfis Shipping Company S.A. (1)	February 7, 2011	Liberia

(1) In March and April 2015, the Company proceeded with the dissolution of the respective subsidiaries since they were no longer active

The Company outsources the technical and commercial management of its vessels to Allseas Marine S.A. (“Allseas”) and Seacommercial Shipping Services S.A. (“Seacommercial”), both related parties wholly owned by Mr. Michael Bodouroglou, the Company’s Chairman, President,  Chief Executive Officer and Interim Chief Financial Officer (refer to Note 4).

As of December 31, 2014, Mr. Michael Bodouroglou beneficially owned 28.4% of the Company’s common stock.

Major Charterers: The following charterers individually accounted for more than 10% of the Company’s charter revenue for the years ended December 31, 2012, 2013 and 2014:

Charterer	Percentage of charter revenue
	2012	2013	2014
Intermare Transport GmbH	24.1%	13.4%	-
Morgan Stanley Capital Group Inc.	15.7%	-	-
Mansel Ltd.	16.6%	-	-
Cargill International S.A.	19.2%	33.6%	11.6%
Total	75.6%	47.0%	11.6%

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Long-Term Debt (Tables)

12 Months Ended

Dec. 31, 2014

Long-Term Debt [Abstract]

Debt Agreements Amounts Outstanding

	2013	2014
(a)Commerzbank AG (August 12, 2011)	$47,550,000	$43,375,000
(b)Unicredit Bank AG (November 19, 2007)	22,587,000	14,606,500
(c)Bank of Scotland Plc (December 4, 2007)	33,616,864	-
(d)Bank of Ireland (March 30, 2009)	13,400,000	8,350,000
(e-1)HSH Nordbank AG (July 31, 2008)	20,625,000	-
(e-2)HSH Nordbank AG (April 4, 2014)	-	46,713,600
(f)HSBC Bank Plc (July 2, 2010)	16,800,000	14,460,000
(g-1)Nordea Bank Finland Plc (May 5, 2011)	25,536,062	-
(g-2)Nordea Bank Finland Plc (May 6, 2014)	-	78,273,638
(h)Senior unsecured notes due 2021	-	25,000,000
Total	$180,114,926	$230,778,738

Schedule of Debt

Disclosed as follows in the Consolidated Balance Sheets
Current portion of long-term debt	$17,257,750	$20,714,324
Long-term debt	162,857,176	210,064,414
Total	$180,114,926	$230,778,738

Minimum Annual Principal Payments

To December 31,
2015	$20,714,324
2016	32,226,824
2017	48,317,324
2018	11,642,324
2019	11,642,324
Thereafter	106,235,618
Total	$230,778,738

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Commitments and Contingencies - Rental Expense (Table) (Details) (USD $)	Dec. 31, 2014
Rental Expense for the year ending
December 31, 2015	$ 44,508
December 31, 2016	44,508
December 31, 2017	33,381
Total	$ 122,397

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Basis of Presentation and General Information - Major Charterers (Table) (Details)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Entity Wide Revenue Major Customer [Line Items]
Percentage of charter revenue	11.60%	47.00%	75.60%
Intermare Transport GmbH
Entity Wide Revenue Major Customer [Line Items]
Percentage of charter revenue	0.00%	13.40%	24.10%
Morgan Stanley Capital Group Inc.
Entity Wide Revenue Major Customer [Line Items]
Percentage of charter revenue	0.00%	0.00%	15.70%
Mansel Ltd.
Entity Wide Revenue Major Customer [Line Items]
Percentage of charter revenue	0.00%	0.00%	16.60%
Cargill International S.A.
Entity Wide Revenue Major Customer [Line Items]
Percentage of charter revenue	11.60%	33.60%	19.20%

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Investment in Affiliate (Table) (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Investment in Affiliate [Abstract]
Balance beginning of period	$ 11,309,375	$ 19,987,743
Equity in net income of affiliate	471,079	1,652,339	1,986,590
Equity in other comprehensive income of affiliate	16,139	77,165	(107,083)
Dividends received		(1,787,500)
Dilution effect	(221,679)	(390,821)
Impairment in investment in affiliate	(8,618,664)	(8,229,551)
Balance end of period	$ 2,956,250	$ 11,309,375	$ 19,987,743

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Financial Instruments and Fair Value Disclosures - Location of Impairment Loss on Investment in Affiliate (Table) (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Dilution effect	$ (221,679)	$ (390,821)
Impairment loss	(8,618,664)	(8,229,551)
Loss on investment in affiliate	(8,840,343)	(8,620,372)	(16,985,066)
Loss on investment in affiliate
Dilution effect	(221,679)	(390,821)
Impairment loss	$ (8,618,664)	$ (8,229,551)

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Consolidated Balance Sheets (USD $)	Dec. 31, 2014	Dec. 31, 2013
Current assets
Cash and cash equivalents	$ 7,030,507	$ 31,301,957
Restricted cash	6,929,172	325,000
Trade receivables, net	7,021,588	8,536,240
Other receivables	1,273,132	599,988
Prepaid expenses	503,109	549,276
Due from related parties	843,510	146,051
Inventories	2,131,464	1,145,243
Marketable securities	955,535	1,616,329
Total current assets	26,688,017	44,220,084
Fixed assets
Vessels, net	369,032,973	306,135,916
Advances for vessels under construction	49,971,703	45,209,166
Other fixed assets, net	922,565	595,840
Total fixed assets, net	419,927,241	351,940,922
Investment in affiliate	2,956,250	11,309,375
Interest rate swaps	66,475	87,295
Other assets	4,367,134	2,303,304
Restricted cash	6,960,000	9,685,000
Total Assets	460,965,117	419,545,980
Current liabilities
Trade accounts payable	2,766,734	2,543,468
Accrued expenses	4,012,238	2,054,903
Due to related parties	166,354	82,074
Interest rate swaps	589,896	980,465
Deferred income	233,245	737,251
Current portion of long-term debt	20,714,324	17,257,750
Total current liabilities	28,482,791	23,655,911
Long-term liabilities
Long-term debt	210,064,414	162,857,176
Interest rate swaps	17,369	382,116
Total long-term liabilities	210,081,783	163,239,292
Total Liabilities	238,564,574	186,895,203
Commitments and Contingencies	0	0
Shareholders' Equity
Preferred shares, $0.001 par value; 25,000,000 authorized; none issued and outstanding	0	0
Class A common shares, $0.001 par value; 750,000,000 authorized; 17,669,442 and 24,809,142 issued and outstanding at December 31, 2013 and 2014, respectively	24,809	17,669
Class B common shares, $0.001 par value; 5,000,000 authorized; none issued and outstanding	0	0
Additional paid-in capital	535,233,573	493,803,591
Accumulated other comprehensive loss	(150,986)	(259,811)
Accumulated deficit	(312,706,853)	(260,910,672)
Total Shareholders' Equity	222,400,543	232,650,777
Total Liabilities and Shareholders' Equity	$ 460,965,117	$ 419,545,980

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Transactions with Related Parties - Seacommercial (Details) (Seacommercial Shipping Services S.A.)	0 Months Ended
	Jan. 02, 2015
Seacommercial Shipping Services S.A.
Related Party Transaction [Line Items]
Charter hire commission payable to the management company	1.25%
Commission rate payable to the management company for the purchase, sale and construction of vessels	1.00%

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Consolidated Statements of Shareholders' Equity (USD $)	Total	Class A Shares	Additional Paid-in Capital	Accumulated Other Comprehensive Loss	Accumulated Deficit
Balance at Dec. 31, 2011	$ 221,224,147	$ 6,090	$ 447,618,572	$ 0	$ (226,400,515)
Shares issued, beginning balance at Dec. 31, 2011		6,089,826
Issuance of Class A common shares	9,943,893	4,902	9,938,991
Issuance of Class A common shares (number of shares)		4,901,961
Issuance of non-vested Class A common share awards		10	(10)
Issuance of non-vested Class A common share awards (number of shares)		9,800
Cancellation of non-vested Class A common share awards		(1)	1
Cancellation of non-vested Class A common share awards (number of shares)		(184)
Share based compensation	2,536,702		2,536,702
Net Loss	(17,557,125)				(17,557,125)
Other comprehensive (loss) / income	(627,104)			(627,104)
Balance at Dec. 31, 2012	215,520,513	11,001	460,094,256	(627,104)	(243,957,640)
Shares issued, ending balance at Dec. 31, 2012		11,001,403
Issuance of Class A common shares	31,860,750	6,218	31,854,532
Issuance of Class A common shares (number of shares)		6,218,039
Issuance of non-vested Class A common share awards		450	(450)
Issuance of non-vested Class A common share awards (number of shares)		450,000
Share based compensation	1,855,253		1,855,253
Net Loss	(16,953,032)				(16,953,032)
Other comprehensive (loss) / income	367,293			367,293
Balance at Dec. 31, 2013	232,650,777	17,669	493,803,591	(259,811)	(260,910,672)
Shares issued, ending balance at Dec. 31, 2013		17,669,442
Issuance of Class A common shares	39,741,152	6,921	39,734,231
Issuance of Class A common shares (number of shares)		6,920,700
Cancellation of Class A common shares	(170,461)	(30)	(170,431)
Cancellation of Class A common shares (number of shares)		(30,000)
Issuance of non-vested Class A common share awards		252	(252)
Issuance of non-vested Class A common share awards (number of shares)		252,000
Cancellation of non-vested Class A common share awards		(3)	3
Cancellation of non-vested Class A common share awards (number of shares)		(3,000)
Share based compensation	1,866,431		1,866,431
Net Loss	(51,796,181)				(51,796,181)
Other comprehensive (loss) / income	108,825			108,825
Balance at Dec. 31, 2014	$ 222,400,543	$ 24,809	$ 535,233,573	$ (150,986)	$ (312,706,853)
Shares issued, ending balance at Dec. 31, 2014		24,809,142

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Long-Term Debt - Principal Payments (Table) (Details) (USD $)	Dec. 31, 2014	Dec. 31, 2013
Long-Term Debt [Abstract]
2015	$ 20,714,324
2016	32,226,824
2017	48,317,324
2018	11,642,324
2019	11,642,324
Thereafter	106,235,618
Total	$ 230,778,738	$ 180,114,926

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Share Based Payments - Equity Incentive Plan - Non-vested Share Awards (Tables)

12 Months Ended

Dec. 31, 2014

Share Based Compensation Arrangement By Share Based Payment Award [Line Items]

Non-vested Share Awards Activity

	Number of Shares	Weighted Average Fair Value
Non-vested, December 31, 2013	339,000	$4.75
Granted	252,000	3.64
Cancelled	(3,000)	6.67
Vested	(239,500)	4.63
Non-vested, December 31, 2014	348,500	$4.15

Equity incentive plan - October 11, 2006

Share Based Compensation Arrangement By Share Based Payment Award [Line Items]

Non-vested Share Awards Details

Grant date	Final Vesting date	Total shares granted	Grant date fair value	Shares cancelled	Shares vested	Non-vested share awards
November 26, 2013	December 31, 2015	200,000	$5.165	-	100,000	100,000
November 26, 2013	December 31, 2015	12,000	$5.165	-	6,000	6,000
December 19, 2013	December 31, 2015	16,000	$6.380	-	8,000	8,000
January 31, 2014	December 31, 2015	32,000	$6.670	3,000	14,500	14,500
TOTAL		260,000		3,000	128,500	128,500

Equity incentive plan - March 26, 2014

Share Based Compensation Arrangement By Share Based Payment Award [Line Items]

Non-vested Share Awards Details

Grant date	Final Vesting date	Total shares granted	Grant date fair value	Shares cancelled	Shares vested	Non-vested share awards
December 10, 2014	December 31, 2016	200,000	$2.440	-	-	200,000
December 10, 2014	December 31, 2016	20,000	$2.440	-	-	20,000
TOTAL		220,000		-	-	220,000

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Financial Instruments and Fair Value Disclosures - Balance Sheet Location (Table) (Details) (USD $)	Dec. 31, 2014	Dec. 31, 2013
Derivatives designated as hedging instruments
Subtotal	$ 0	$ 229,893
Derivatives not designated as hedging instruments
Subtotal	540,790	1,045,393
Total derivatives	540,790	1,275,286
Non-Current Assets - Interest rate swaps
Derivatives designated as hedging instruments
Interest rate swaps	0	(87,295)
Derivatives not designated as hedging instruments
Interest rate swaps	(66,475)	0
Current liabilities - Interest rate swaps
Derivatives designated as hedging instruments
Interest rate swaps	0	294,505
Derivatives not designated as hedging instruments
Interest rate swaps	589,896	685,960
Long-Term Liabilities - Interest rate swaps
Derivatives designated as hedging instruments
Interest rate swaps	0	22,683
Derivatives not designated as hedging instruments
Interest rate swaps	$ 17,369	$ 359,433

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Income Taxes

12 Months Ended

Dec. 31, 2014

Income Taxes [Abstract]

Income Taxes

15.Income Taxes 

The Company and its subsidiaries are incorporated either in the Marshall Islands or Liberia and under the laws of the Marshall Islands and Liberia, are not subject to income taxes.

The Company is also subject to United States federal income taxation in respect of income that is derived from the international operation of ships and the performance of services directly related thereto ("Shipping Income"), unless exempt from United States federal income taxation.

If the Company does not qualify for the exemption from tax under Section 883, it will be subject to a 4% tax on its “U.S. source shipping income,” imposed without the allowance for any deductions. For these purposes, "U.S. source shipping income" means 50% of the shipping income that will be derived by the Company that is attributable to transportation that begins or ends, but that does not both begin and end, in the United States. For 2012, 2013 and 2014, the Company qualified for the benefits of Section 883.

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Earnings per Share ("EPS") (Tables)

12 Months Ended

Dec. 31, 2014

Earnings per Share ("EPS") [Abstract]

Basic and diluted EPS Class A Common Shares

	Years Ended December 31,
Numerators	2012	2013	2014
Net loss	($17,557,125)	($16,953,032)	($51,796,181)
Less: Net loss attributable to non-vested share awards	444,326	351,877	832,333
Net loss attributable to common shareholders	($17,112,799)	($16,601,155)	($50,963,848)
Denominators
Weighted average common shares outstanding, basic and diluted	6,035,910	12,639,128	23,326,062
Net loss per common share, basic and diluted:	($2.84)	($1.31)	($2.18)

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2014

Commitments and Contingencies [Abstract]

Commitments and Contingencies

17.Commitments and Contingencies

From time to time the Company expects to be subject to legal proceedings and claims in the ordinary course of business, principally personal injury and property casualty claims. Such claims, even if lacking in merit, could result in the expenditure of significant financial and managerial resources. The Company is not aware of any claim or contingent liability, which is reasonably possible and should be disclosed, or probable and for which a provision should be established in the accompanying financial statements.

Rental Expense

In relation to the rental agreement with Granitis as discussed in Note 4, fixed future minimum non-cancelable rent commitments as of December 31, 2014, based on the Euro/U.S. dollar exchange rate of €1.0000:$1.2140 as of December 31, 2014, amount to:

For the year ending	Amount
December 31, 2015	$44,508
December 31, 2016	44,508
December 31, 2017	33,381
Total	$122,397

Charter Hire

Future minimum charter hire receipts, based on vessels committed to non-cancelable time charter contracts (including fixture recaps) as of December 31, 2014, net of commissions are:

For the year ending	Amount
December 31, 2015	$4,308,843
Total	$4,308,843

Charter hires are not generally received when a vessel is off-hire, including time required for normal periodic maintenance of the vessel. In arriving at the minimum future charter revenues, an estimated off-hire time of 18 days to perform any scheduled dry-docking on each vessel has been deducted, and it has been assumed that no additional off-hire time is incurred, although there is no assurance that such estimate will be reflective of the actual off-hire in the future.

Newbuildings

Future newbuilding installments based on the non-cancelable newbuilding contracts as of December 31, 2014 are:

For the year ending	Amount
December 31, 2015	$101,700,617
Total	$101,700,617

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Financial Instruments and Fair Value Disclosures - Effect of Derivative Instruments not designated as hedging instruments (Table) (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Net loss on derivatives	$ (387,740)	$ (95,288)	$ (714,074)
Loss on derivatives, net
Interest rate swaps - Fair value	504,602	834,829
Interest rate swaps - Realized Loss	$ (892,342)	$ (930,117)

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Consolidated Statements of Cash Flows (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Cash flows from operating activities
Net Loss	$ (51,796,181)	$ (16,953,032)	$ (17,557,125)
Adjustments to reconcile net loss to net cash provided by operating activities
Depreciation	18,357,377	16,986,584	16,386,426
Impairment loss	15,695,282	0	0
Loss on investment in affiliate	8,840,343	8,620,372	16,985,066
Gain from sale of assets	(402,805)	0	0
Amortization and write off of financing costs	2,108,716	941,733	447,573
Bad debt provisions	130,720	0	124,717
Share based compensation	1,866,431	1,855,253	2,536,702
Write off of capitalized expenses from contract cancellation	0	232,495	0
(Gain) / loss from marketable securities, net	25,529	(1,202,094)	(414,235)
Gain from debt extinguishment	0	0	(1,893,254)
Unrealized gain on interest rate swaps	(504,602)	(834,829)	(2,017,297)
Equity in net income of affiliate, net of dividends received	(471,079)	0	1,202,991
Changes in assets and liabilities:
Trade receivables, net	1,383,932	(6,475,787)	(1,334,013)
Other receivables	(673,144)	129,779	97,564
Prepaid expenses	46,167	(103,672)	157,502
Inventories	(868,623)	(221,313)	(9,444)
Due from related parties	(861,314)	2,336,607	(1,587,798)
Trade accounts payable	75,994	(64,969)	148,323
Accrued expenses	1,285,140	148,956	(467,604)
Due to related parties	84,280	(2,631)	84,705
Deferred income	(504,006)	(829,756)	486,010
Net cash from / (used in) operating activities	(6,181,843)	4,563,696	13,376,809
Cash flow from investing activities
Net proceeds from sale of assets	9,995,000	0	0
Acquisition of vessels and capital expenditures	(110,664,356)	(20,368,088)	(32,042,752)
Proceeds from the sale of marketable securities	498,056	0	0
Repayment from affiliate	0	14,000,000	1,000,000
Return of investment in affiliate	0	135,160	522,918
Other fixed assets	(496,093)	(208,567)	(172,410)
Release of / (increase in) restricted cash	(3,879,172)	0	14,990,000
Net cash used in investing activities	(104,546,565)	(6,441,495)	(15,702,244)
Cash flows from financing activities
Proceeds from long-term debt	179,144,427	0	28,908,750
Repayment of long-term debt	(128,480,615)	(15,427,250)	(32,758,319)
Purchase of treasury stock	(170,460)	0	0
Payment of financing costs	(3,777,546)	(912,441)	(673,709)
Proceeds from the issuance of Class A common shares	42,235,790	34,500,000	10,000,000
Class A common shares offering costs	(2,494,638)	(2,657,438)	(37,919)
Net cash from financing activities	86,456,958	15,502,871	5,438,803
Net increase / (decrease) in cash and cash equivalents	(24,271,450)	13,625,072	3,113,368
Cash and cash equivalents at the beginning of the period	31,301,957	17,676,885	14,563,517
Cash and cash equivalents at the end of the period	7,030,507	31,301,957	17,676,885
Supplemental disclosure of cash flow information
Cash paid during the period for interest (excluding capitalized interest)	5,000,188	5,201,707	5,122,625
Non-cash investing activities - unpaid capital expenditures for acquisition of vessels	572,561	0	0
Non-cash financing activities - unpaid financing costs	$ 395,000	$ 0	$ 269,616

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Consolidated Balance Sheets (Parentheticals) (USD $)	Dec. 31, 2014	Dec. 31, 2013
Class of Stock
Preferred stock par value	$ 0.001	$ 0.001
Preferred stock shares authorized	25,000,000	25,000,000
Preferred stock shares issued	0	0
Preferred stock shares outstanding	0	0
Common stock - shares authorized	755,000,000
Common Shares - Class A
Class of Stock
Common stock - par value	$ 0.001	$ 0.001
Common stock - shares authorized	750,000,000	750,000,000
Common stock - shares issued	24,809,142	17,669,442
Common stock - shares outstanding	24,809,142	17,669,442
Common Shares - Class B
Class of Stock
Common stock - par value	$ 0.001	$ 0.001
Common stock - shares authorized	5,000,000	5,000,000
Common stock - shares issued	0	0
Common stock - shares outstanding	0	0

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Interest Rate Swaps

12 Months Ended

Dec. 31, 2014

Interest Rate Swaps [Abstract]

Interest Rate Swaps

10.Interest Rate Swaps

The Company enters into interest rate swap transactions to manage interest costs and the risk associated with changing interest rates with respect to its variable interest rate loans and credit facilities. These interest rate swap transactions fix the interest rates as described below.

As of December 31, 2013 and 2014, the Company's outstanding interest rate swaps had a combined notional amount of $68,976,781 and $56,208,156, respectively. Details of the interest rate swap agreements which were effective during 2013 and 2014 are outlined below:

Interest rate swaps that did not qualify for hedge accounting:

Counterparty	Effective date	Termination date	Notional amount As of December 31, 2013	Notional amount As of December 31, 2014	Fixed rate	Floating rate
Unicredit Bank AG (1)	August 27, 2010	August 27, 2015	$35,700,000	$25,500,000	2.465%	3-month LIBOR
HSBC Bank Plc (2)	April 10, 2012	April 10, 2017	-	$4,560,000	1.485%	3-month LIBOR
HSH Nordbank AG (3)	May 8, 2012	May 5, 2017	-	$9,562,500	1.220%	3-month LIBOR
Nordea Bank Finland Plc (4)	May 4, 2012	March 31, 2017	-	$5,918,792	1.140%	3-month LIBOR
Nordea Bank Finland Plc (5)	June 18, 2012	May 4, 2017	-	$5,885,615	1.010%	3-month LIBOR
HSH Nordbank AG (6)	August 6, 2012	May 5, 2017	-	$4,781,250	0.980%	3-month LIBOR
TOTAL			$35,700,000	$56,208,157

Interest rate swaps that qualified for hedge accounting:

Counterparty	Effective date	Termination date	Notional amount As of December 31, 2013	Notional amount As of December 31, 2014	Fixed rate	Floating rate
HSBC Bank Plc (2)	April 10, 2012	April 10, 2017	$5,040,000	-	1.485%	3-month LIBOR
HSH Nordbank AG (3)	May 8, 2012	May 5, 2017	$10,312,500	-	1.220%	3-month LIBOR
Nordea Bank Finland Plc (4)	May 4, 2012	March 31, 2017	$6,401,958	-	1.140%	3-month LIBOR
Nordea Bank Finland Plc (5)	June 18, 2012	May 4, 2017	$6,366,073	-	1.010%	3-month LIBOR
HSH Nordbank AG (6)	August 6, 2012	May 5, 2017	$5,156,250	-	0.980%	3-month LIBOR
TOTAL			$33,276,781	-

(1) The notional amount reduces by $2,550,000 on a quarterly basis up until the expiration of the interest rate swap.

(2) The notional amount reduces by $120,000 on a quarterly basis up until the expiration of the interest rate swap.

(3) The notional amount reduces by $187,500 on a quarterly basis up until the expiration of the interest rate swap.

(4) The notional amount reduces by $120,792 on a quarterly basis up until the expiration of the interest rate swap.

(5) The notional amount reduces by $120,115 on a quarterly basis up until the expiration of the interest rate swap.

(6) The notional amount reduces by $93,750 on a quarterly basis up until the expiration of the interest rate swap.

Following the $800,000 prepayment to HSBC and the refinancing of the loan agreements with HSH dated July 31, 2008 and Nordea dated May 5, 2011 as discussed in Note 9, the Company reassessed the criteria for hedge accounting with respect to the corresponding interest rate swaps and concluded that same were no longer met. Accordingly, all the above interest rate swaps did not qualify for hedge accounting as of December 31, 2014.

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Document and Entity Information	12 Months Ended
	Dec. 31, 2014
Document And Entity Information
Document Type	20-F
Document Period End Date	Dec. 31, 2014
Amendment Flag	false
Entity Registrant Name	Paragon Shipping Inc.
Entity Central Index Key	0001401112
Trading Symbol	PRGN
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Well Known Seasoned Issuer	No
Entity Common Stock Shares Outstanding	24,809,142
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	FY

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Financial Instruments and Fair Value Disclosures

12 Months Ended

Dec. 31, 2014

Financial Instruments and Fair Value Disclosures [Abstract]

Financial Instruments and Fair Value Disclosures

11.Financial Instruments and Fair Value Disclosures

The principal financial assets of the Company consist of cash and cash equivalents, restricted cash, trade receivables, amounts due from related parties, an investment in affiliate and marketable securities available for sale. The principal financial liabilities of the Company consist of long-term bank loans, senior unsecured notes due 2021, interest rate swaps, trade accounts payable, amounts due to related parties and accrued liabilities.

(a) Interest rate risk: The Company’s long-term bank loans are based on LIBOR and hence the Company is exposed to movements in LIBOR. The Company entered into interest rate swap agreements, discussed in Note 10, in order to hedge its variable interest rate exposure.

(b) Concentration of credit risk: Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist principally of trade receivables, amounts due from related parties and cash and cash equivalents. The Company limits its credit risk with trade receivables by performing ongoing credit evaluations of its customers’ financial condition and generally does not require collateral for its trade receivables. In addition, the Company also limits its exposure by diversifying among customers. The amounts due from related parties mainly relate to advance payments to Allseas to cover working capital equal to one month’s worth of estimated operating expenses. The Company places its cash and cash equivalents with high credit quality financial institutions. The Company performs periodic evaluations of the relative credit standing of those financial institutions. The Company is exposed to credit risk in the event of non-performance by counterparties to derivative instruments. However, the Company limits its exposure by diversifying among counterparties considering their credit ratings.

(c) Fair value: The carrying values of cash and cash equivalents, restricted cash, trade receivables, amounts due from related parties, trade accounts payable, amounts due to related parties and accrued liabilities are reasonable estimates of their fair value due to the short-term nature of these financial instruments. The fair value of long-term bank loans approximate their carrying value, predominantly due to the variable interest rate nature thereof. Derivative financial instruments are stated at fair values.

The Company’s Notes trade on NASDAQ under the symbol “PRGNL” and therefore are considered Level 1 items in accordance with the fair value hierarchy. As of December 31, 2014, the fair value of the Company’s Notes based on their quoted close price of $17.00 per Note was $17,000,000 in the aggregate.

When the interest rate swap contracts qualify for hedge accounting, the Company recognizes the effective portion of the gain / (loss) on the hedging instruments directly in other comprehensive income / (loss) in the statement of shareholders’ equity, while any ineffective portion, if any, is recognized immediately in current period statement of comprehensive income / (loss). When the interest rate swap contracts do not qualify for hedge accounting, the Company recognizes their fair value changes in current period statement of comprehensive income / (loss).

Information on the location and amounts of derivative fair values in the consolidated balance sheets and derivative gains / (losses) in the consolidated statements of comprehensive income / (loss) and shareholders’ equity are shown below:

Derivative Instruments – Balance Sheet Location

		December 31, 2013	December 31, 2014
	Balance Sheet Location	Fair Value	Fair Value
Derivatives designated as hedging instruments
Interest rate swaps	Non-Current Assets – Interest rate swaps	$(87,295)	$-
Interest rate swaps	Current liabilities – Interest rate swaps	294,505	-
Interest rate swaps	Long-Term Liabilities – Interest rate swaps	22,683	-
	Subtotal	$229,893	$-
Derivatives not designated as hedging instruments
Interest rate swaps	Non-Current Assets – Interest rate swaps	$-	$(66,475)
Interest rate swaps	Current liabilities – Interest rate swaps	685,960	589,896
Interest rate swaps	Long-Term Liabilities – Interest rate swaps	359,433	17,369
	Subtotal	$1,045,393	$540,790
Total derivatives		$1,275,286	$540,790

Effect of Derivative Instruments designated as hedging instruments

Gain Recognized in Accumulated Other Comprehensive Loss – Effective Portion

	Year Ended December 31,
	2013	2014
Interest rate swaps	$131,112	$131,238
Total	$131,112	$131,238

Location of Loss Transferred from Accumulated Other Comprehensive Loss in Statements of Comprehensive Loss – Effective Portion

		Year Ended December 31,
		2013	2014
Interest rate swaps – Realized Loss	Interest and finance costs	$(312,069)	$(98,656)
Total		$(312,069)	$(98,656)

There was no ineffective portion of the gain / (loss) on the hedging instruments for the years ended December 31, 2013 and 2014.

Effect of Derivative Instruments not designated as hedging instruments

		Year Ended December 31,
	Location of Gain / (Loss) Recognized	2013	2014
Interest rate swaps – Fair value	Loss on derivatives, net	$834,829	$504,602
Interest rate swaps – Realized Loss	Loss on derivatives, net	(930,117)	(892,342)
Net loss on derivatives		$(95,288)	$(387,740)

Financial Instruments and Assets that are measured at fair value on a recurring basis

Interest rate swaps

The fair value of the Company’s interest rate swap agreements (refer to Note 10) is determined using a discounted cash flow approach based on market-based LIBOR swap yield rates. LIBOR swap rates are observable at commonly quoted intervals for the full terms of the swaps and therefore are considered Level 2 items in accordance with the fair value hierarchy.

The following table summarizes the valuation of the Company’s interest rate swaps as of December 31, 2013 and 2014.

Financial Instruments	Significant Other Observable Inputs (Level 2)
	December 31, 2013	December 31, 2014
Interest rate swaps – asset	$(87,295)	$(66,475)
Interest rate swaps – liability	1,362,581	607,265
Total	$1,275,286	$540,790

Marketable securities – shares of Korea Line Corporation (“KLC”):

The number of KLC shares held by the Company was 65,896 and 44,550 as of December 31, 2013 and 2014, respectively. These marketable securities have readily determinable fair values and are classified as available for sale. Such marketable securities are measured subsequently at fair value in the accompanying consolidated balance sheets. Unrealized gains / (losses) from available for sale securities are excluded from the statement of comprehensive income / (loss) and are recognized in accumulated other comprehensive income / (loss) until realized.

Pursuant to the amended KLC rehabilitation plan, on May 9, 2013, 58,483 additional shares of KLC were issued to the Company, increasing the total number of KLC shares held by the Company to 65,896. Based on the closing price of KLC shares as of May 9, 2013, the fair value of the 58,483 additional KLC shares was $3,113,306, which was recognized as gain from marketable securities, net and is included in the accompanying consolidated statement of comprehensive loss for the year ended December 31, 2013. The decline of the fair value of the total 65,896 KLC shares as of September 30, 2013 and December 31, 2013, based on the respective latest publicly available information, was considered as other than temporary and therefore an aggregate loss of $1,911,212 was recognized. The respective loss is included in gain from marketable securities, net in the accompanying consolidated statement of comprehensive loss for the year ended December 31, 2013, after reclassifying this amount from the Company’s other comprehensive income / (loss).

In 2014, the Company sold a total of 21,346 KLC shares at an average sale price of $23.52 per share. Following the sale of such shares, the number of KLC shares held by the Company was 44,550. The total cash received from the sale of these shares amounted to $498,056, net of commissions. A loss from marketable securities, net, of $25,529 was recorded for the year ended December 31, 2014, after reclassifying same from the Company’s other comprehensive income / (loss).

The fair value of the 44,550 KLC shares as of December 31, 2014, based on the respective latest publicly available information, was $955,535. The corresponding loss on change in the fair value of $137,208 was recognized in other comprehensive income / (loss).

Furthermore, in April 2015, the Company sold an additional 18,133 KLC shares at an average sale price of $22.62 per share. Following the sale of such shares, the number of KLC shares held by the Company was 26,417. The total cash expected to be received from the sale of these shares amounts to $406,808, net of commissions (based on U.S. dollar/KRW exchange rate of $1.000:KRW1,096.92 as of April 15, 2015).

Location of Recognized Gain / (Loss) from Marketable Securities

		Year Ended December 31,
	Location of Gain / (Loss) Recognized	2013 Gain / (Loss)	2014 Gain / (Loss)
Marketable securities – Initial measurement	(Gain) / loss from marketable securities, net	$3,113,306	$-
Marketable securities – Realized Loss	(Gain) / loss from marketable securities, net	(1,911,212)	(25,529)
Net gain / (loss) from marketable securities		$1,202,094	$(25,529)

The fair value of the KLC shares is based on quoted prices of KLC share of stock (Korea SE: KS) and is considered to be determined through Level 1 inputs of the fair value hierarchy.

The following table summarizes the valuation of the KLC shares as of December 31, 2013 and 2014.

Financial Assets	Quoted Prices in Active Markets (Level 1)
	December 31, 2013	December 31, 2014
KLC Shares – Marketable Securities	$1,616,329	$955,535

Financial Assets that are measured at fair value on a non-recurring basis

Investment in Box Ships Inc.:

For the years ended December 31, 2013 and 2014, in accordance with the accounting guidance relating to loss in value of an investment that is other than a temporary decline, the Company recognized an impairment loss on its investment in Box Ships’ common shares.

The decline in the fair value of the investment in Box Ships based on the closing price of Box Ships’ common share as of September 30, 2013 and December 31, 2013, was considered as other than temporary and therefore an aggregate loss of $8,229,551 was recognized. The respective loss is included in loss on investment in affiliate in the accompanying consolidated statement of comprehensive loss for the year ended December 31, 2013.

The decline in the fair value of the investment in Box Ships based on the closing price of Box Ships’ common share as of March 31, 2014, June 30, 2014 and December 31, 2014, was considered as other than temporary and therefore an aggregate loss of $8,618,664 was recognized. The respective loss is included in loss on investment in affiliate in the accompanying consolidated statement of comprehensive loss for the year ended December 31, 2014.

Location of Impairment Loss on Investment in Affiliate

		Year Ended December 31,
	Location of Loss Recognized	2013	2014
Dilution effect	Loss on investment in affiliate	$(390,821)	$(221,679)
Impairment loss	Loss on investment in affiliate	(8,229,551)	(8,618,664)
Loss on investment in affiliate		$(8,620,372)	$(8,840,343)

The fair value of the investment in Box Ships is based on quoted prices of Box Ships share of stock (NYSE: TEU) and is considered to be determined through Level 1 inputs of the fair value hierarchy.

The following table summarizes the valuation of the Company’s investment in Box Ships as of December 31, 2013 and 2014.

Financial Assets	Quoted Prices in Active Markets (Level 1)
	December 31, 2013	December 31, 2014
Investment in equity affiliate – Box Ships Inc.	$11,309,375	$2,956,250

The fair value of the investment in Box Ships, based on the closing price of Box Ships’ common share on the NYSE on April 15, 2015, of $1.06, was $3,643,750.

As of December 31, 2013 and 2014, the Company did not have any assets or liabilities measured at fair value on a recurring or non-recurring basis, other than the ones discussed above.

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Gain from Vessel Early Redelivery and Other (Income) / Expenses (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Gain from Vessel Early Redelivery and Other (Income) / Expenses [Abstract]
Gain from vessel early redelivery	$ 0	$ 2,267,818	$ 0
Insurance claim recoveries		218,634	703,422
Cash compensation received by KLC		402,596	29,137
Voluntary special contribution	$ 250,283

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Consolidated Statements of Comprehensive Loss (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Revenue
Charter revenue	$ 58,138,104	$ 59,530,645	$ 53,218,975
Commissions (including related party of $646,987, $750,533 and $708,153 in 2012, 2013 and 2014, respectively)	(3,374,426)	(3,273,889)	(2,918,296)
Net Revenue	54,763,678	56,256,756	50,300,679
Expenses / (Income)
Voyage expenses, net	14,744,648	6,668,998	1,855,964
Vessels operating expenses (including related party of $660,474, $797,143 and $1,282,699 in 2012, 2013 and 2014, respectively)	22,666,036	20,758,513	18,808,084
Dry-docking expenses (including related party of $0, $109,248 and $123,840 in 2012, 2013 and 2014, respectively)	2,193,110	1,698,217	0
Management fees - related party	6,266,270	5,874,416	4,094,744
Depreciation	18,357,377	16,986,584	16,386,426
General and administrative expenses (including related party of $3,304,116, $7,670,556 and $5,775,899 in 2012, 2013 and 2014, respectively)	8,707,819	10,764,001	7,901,762
Impairment loss	15,695,282	0	0
Bad debt provisions	130,720	0	124,717
Gain from sale of assets (net of vessel sale & purchase commissions to related party of $0, $0, and $745,000 in 2012, 2013 and 2014, respectively)	(402,805)	0	0
Gain from vessel early redelivery	0	(2,267,818)	0
Loss from contract cancellation (including related party of $0, $444,421 and $0 in 2012, 2013 and 2014, respectively)	0	568,658	0
(Gain) / loss from marketable securities, net	25,529	(1,202,094)	(414,235)
Other (income) / loss	210,709	(638,374)	(750,715)
Operating Income / (Loss)	(33,831,017)	(2,954,345)	2,293,932
Other Income / (Expenses)
Interest and finance costs	(9,324,395)	(7,440,190)	(6,744,917)
Loss on derivatives, net	(387,740)	(95,288)	(714,074)
Interest income (including related party of $675,856, $504,326 and $0 in 2012, 2013 and 2014, respectively)	20,940	531,028	728,503
Equity in net income of affiliate	471,079	1,652,339	1,986,590
Gain from debt extinguishment	0	0	1,893,254
Loss on investment in affiliate	(8,840,343)	(8,620,372)	(16,985,066)
Foreign currency (loss) / gain	95,295	(26,204)	(15,347)
Total Other Expenses, net	(17,965,164)	(13,998,687)	(19,851,057)
Net Loss	(51,796,181)	(16,953,032)	(17,557,125)
Other Comprehensive Income / (Loss)
Unrealized (loss) / gain on cash flow hedges	131,238	131,112	(847,943)
Transfer of realized loss on cash flow hedges to "Interest and finance costs"	98,656	312,069	174,869
Equity in other comprehensive (loss) / income of affiliate	16,139	77,165	(107,083)
Unrealized loss on change in fair value of marketable securities	(162,737)	(2,064,265)	(827,377)
Transfer of loss on change in fair value of marketable securities to "(Gain) / loss from marketable securities, net"	25,529	1,911,212	980,430
Total Other Comprehensive (Loss) / Income	108,825	367,293	(627,104)
Comprehensive Loss	$ (51,687,356)	$ (16,585,739)	$ (18,184,229)
Loss per Class A common share, basic and diluted	$ (2.18)	$ (1.31)	$ (2.84)
Weighted average number of Class A common shares, basic and diluted	23,326,062	12,639,128	6,035,910

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Advances for Vessels Under Construction

12 Months Ended

Dec. 31, 2014

Advances for Vessels Under Construction [Abstract]

Advances for Vessels Under Construction

5.Advances for Vessels Under Construction

Advances for vessels under construction relate to the installments paid that were due to the respective shipyard including capitalized expenses.

In December 2013, the Company agreed to acquire, subject to certain closing conditions that were lifted in the first quarter of 2014, shipbuilding contracts for two additional Ultramax newbuilding drybulk carriers from Allseas (Hull numbers DY4050 and DY4052). The Ultramax newbuildings have a carrying capacity of 63,500 dwt each and are currently under construction at Yangzhou Dayang Shipbuilding Co. Ltd., with scheduled delivery in the third quarter of 2015. The acquisition cost of these two newbuildings is $28,250,000 per vessel, or $56,500,000 in the aggregate. In February 2014, the Company paid a first installment of $5,592,661 per vessel. In addition, in February 2014, an amount of $282,500 per vessel was paid to Allseas, representing vessel purchase commissions equal to 1% of the acquisition cost, pursuant to the newbuilding supervision agreements between the respective ship-owning companies and Allseas. Upon commencement of the steel cutting of each vessel in the second quarter of 2014, the Company paid a second installment of $3,884,530 per vessel. The balance of the contract price, or $18,772,809 per vessel, will be payable upon the delivery of each vessel.

In December 2013, the Company also entered into an agreement with Zhejiang Ouhua Shipbuilding, to cancel one of its two 4,800 TEU containership newbuilding contracts (Hull no. 656) at no cost to the Company, to transfer the deposit to the remaining containership (C/V Box King) and to reduce its contract price from the original $57,500,000 to $55,000,000.

As of December 31, 2013, the Company’s newbuilding program consisted of one Handysize drybulk carrier (Hull no. 625), two Ultramax drybulk carriers (Hull numbers DY152 and DY153) and one 4,800 TEU containership (C/V Box King) with expected deliveries in 2014, as well as two Ultramax drybulk carriers (Hull numbers DY4050 and DY4052) with expected deliveries in 2015.

On January 7, 2014, the Company took delivery of its fourth Handysize drybulk carrier; the M/V Proud Seas (Hull no. 625). In January 2014, an amount of $21,637,078 was paid to the shipyard representing the final installment of the respective vessel, which was financed from the syndicated secured loan facility led by Nordea Bank Finland Plc dated May 5, 2011 (refer to Note 9).

In March 2014, the Company entered into contracts with Jiangsu Yangzijiang Shipbuilding Co. for the construction of three Kamsarmax newbuilding drybulk carriers (Hull numbers YZJ1144, YZJ1145 and YZJ1142). The Kamsarmax newbuildings have a carrying capacity of 81,800 dwt each, with scheduled delivery between the second and fourth quarter of 2015. The acquisition cost of these three newbuildings is $30,550,000 per vessel, or $91,650,000 in the aggregate. In March 2014, the Company paid a first installment of $9,165,000 per vessel. In addition, in March 2014, an amount of $305,500 per vessel was paid to Allseas, representing vessel purchase commission equal to 1% of the acquisition cost, pursuant to the newbuilding supervision agreements between the respective ship-owning companies and Allseas. The balance of the contract price, or $21,385,000 per vessel, will be payable upon the delivery of each vessel.

As of March 31, 2014, the Company assessed as probable the potential sale of the remaining containership under construction, the C/V Box King. As a result of the Company’s intention to sell such vessel, an impairment loss of $15,695,282 was recorded in the first quarter of 2014 and is included in the accompanying consolidated statement of comprehensive loss for the year ended December 31, 2014. The impairment loss was based on the Company’s best estimate of the fair value of the vessel on a time charter free basis, and is in line with the sale price of the memorandum of agreement that the Company entered into on April 25, 2014, for the sale of the vessel to an unrelated third party, as discussed below.

On April 25, 2014, the Company entered into a memorandum of agreement for the sale of its 4,800 TEU containership newbuilding to an unrelated third party for $42,500,000, less 3% commission. In May 2014, the Company also agreed with the shipyard to reduce the contract price of the respective vessel by $770,000. In addition, the Company mutually agreed with China Development Bank to cancel the corresponding credit facility for the vessel, as discussed in Note 9.

The sale of the C/V Box King and its transfer to the new owners was concluded on May 23, 2014, and a gain of $402,805 was incurred. The net proceeds from the sale of the vessel amounted to $9,995,000 and represent the difference between the net sale price of the vessel and the outstanding contractual obligation due to the shipyard upon delivery that was resumed by the vessel’s new owners.

In October 2014, the Company took delivery of the two Ultramax drybulk carriers; the M/V Gentle Seas and the M/V Peaceful Seas (Hull numbers DY152 and DY153). In October 2014, an aggregate amount of $35,672,940 was paid to the shipyard representing the final installment of the two vessels, which was mainly financed from the loan facility with HSH Nordbank AG dated April 4, 2014, following a total drawdown of $34,400,000 (refer to Note 9).

As of December 31, 2014, the Company’s newbuilding program consisted of two Ultramax drybulk carriers (Hull numbers DY4050 and DY4052) and three Kamsarmax drybulk carriers (Hull numbers YZJ1144, YZJ1145 and YZJ1142) with scheduled delivery between the second and fourth quarter of 2015.

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Transactions with Related Parties

12 Months Ended

Dec. 31, 2014

Transactions with Related Parties [Abstract]

Transactions with Related Parties

4.Transactions with Related Parties

(a)Allseas: The following amounts charged by Allseas are included in the accompanying consolidated statements of comprehensive loss:

	2012	2013	2014
Included in Commissions
(1(i)) Charter hire commissions	$646,987	$750,533	$708,153
Netted against Gain from sale of assets
(1(ii)) Vessel sale & purchase commissions	$-	$-	$745,000
Included in Vessel operating expenses
(1(v)) Superintendent fees	$338,826	$399,626	$481,200
Included in Dry-docking expenses
(1(v)) Superintendent fees	$-	$109,248	$123,840
Management fees - related party
(1(iii)) Management fees	$3,428,548	$4,104,271	$4,628,813
(2) Financial accounting and reporting services	666,196	720,361	$757,442
(3) Loretto agreement	-	1,049,784	$880,015
Total Management fees	$4,094,744	$5,874,416	$6,266,270
Included in General and administrative expenses
(4) Administrative fees	$36,085	$38,598	$37,746
(7) Executive services agreement	$3,228,438	$7,582,634	$5,689,152

The following amounts charged by Allseas are capitalized and are included in vessels cost and advances for vessels under construction in the accompanying consolidated balance sheets: technical management and superintendent fees relating to newbuilding vessels (refer to 5–Newbuilding Supervision Agreement), and vessel purchase commissions (refer to 1(ii)–Vessel Commissions), which in the aggregate amounted to $1,588,512 and $3,804,918 for the years ended December 31, 2013 and 2014, respectively.

Following the cancellation of the newbuilding contract relating to Hull no. 656 as discussed in Note 5, for the year ended December 31, 2013, the Company recorded a loss from contract cancellation of $568,658 relating to capitalized expenses for Hull no. 656, which includes technical management and superintendent fees (refer to 5–Newbuilding Supervision Agreement) charged by Allseas that in the aggregate amounted to $444,421.

(1) Ship-Owning Company Management Agreements

(i) Charter Hire Commissions - The Company paid Allseas 1.25% of the gross freight, demurrage and charter hire collected from the employment of the vessels (“Charter Hire Commission”), which are presented separately in the accompanying consolidated statements of comprehensive loss.

(ii) Vessel Commissions - The Company also paid Allseas a fee equal to 1.00% of the purchase price of any vessel bought, constructed or sold on behalf of the Company, calculated in accordance with the relevant memorandum of agreement, (“Vessel Commission”). Vessel commissions relating to vessel sale is included in the determination of the gain / loss on sale of assets presented in the accompanying consolidated statements of comprehensive loss. Vessel commissions relating to vessels bought or constructed are capitalized and included in vessels cost and advances for vessels under construction in the accompanying consolidated balance sheets.

(iii) Management Services - Each of the ship-owning companies has a management agreement with Allseas, under which management services are provided in exchange for a fixed daily fee per vessel. This fee is subject to adjustment on June 1 of each year based on the official Eurozone inflation rate. For the period from January 1, 2012 to May 31, 2012, the Company paid Allseas a management fee of €636.74 per vessel per day, while effective June 1, 2012, Allseas management fee was adjusted to €652.02 per vessel per day. Effective June 1, 2013, Allseas management fee was adjusted to €661.15 per vessel per day, while effective June 1, 2014, Allseas management fee was adjusted to €664.46 per vessel per day.

(iv) Pre-Delivery Services – A lump sum fee of $15,000 is payable to Allseas for pre-delivery services provided during the period from the date of the Memorandum of Agreement for the purchase of the vessel, until the date of delivery.

(v) Superintendent Services – Allseas is entitled to a superintendent fee of €500per day for each day in excess of 5 days per calendar year for which a Superintendent performed on site inspection.

In January 2015, the Company’s vessel owning subsidiaries signed amended and restated management agreements with Allseas, according to which a portion of the services that were previously provided by Allseas have been ceased. Pursuant to the terms of the amended and restated management agreements, effective January 2, 2015, Allseas is no longer providing chartering and sale and purchase services, and as such the fees related to these services have been terminated.

(2) Accounting Agreement – Allseas is entitled to a fee of €250,000 per annum, payable quarterly, for the provision of financial accounting services, and a fee of $30,000 per vessel per annum, payable quarterly, for the provision of financial reporting services. These fees are included in Management fees - related party in the accompanying consolidated statements of comprehensive loss. For the years ended December 31, 2012, 2013 and 2014, an amount of $666,196, $720,361 and $757,442 respectively, was paid to Allseas for financial accounting and reporting services. In February 2015, the Company agreed to renew the term of the agreement for one additional year, effective January 1, 2015.

(3) Tripartite Agreement between the Company, Allseas and Loretto Finance Inc. - On November 10, 2009, the Company, Allseas, and Loretto Finance Inc. (“Loretto”), a wholly owned subsidiary of Allseas, signed a tripartite agreement, as clarified and amended by a supplemental agreement, effective from December 1, 2012, whereby in the event of a capital increase, an equity offering or the issuance of common shares to a third party or third parties in the future, other than common shares issued pursuant to the Company’s equity incentive plan as discussed in Note 13 (as the same may be further amended, amended and restated, supplemented or otherwise modified) or any future equity incentive plans may be adopted, the Company will issue, at no cost to Loretto, additional common shares in an amount equal to 2% of the total number of common shares issued pursuant to such capital increase, equity offering or third party issuance, as applicable. In accordance with the terms of the agreement, any common shares to be issued to Loretto under the agreement may only be issued once the capital increase, equity offering or third party issuance giving rise to the obligation to issue shares to Loretto under the agreement has closed and any applicable contingencies, forfeiture rights or conditions precedent relating to such capital increase, equity offering or third party issuance have lapsed or expired or have been cancelled or terminated, unless otherwise agreed by the mutual agreement of the parties. The fair value of the shares issued for no consideration are accounted as share based payment and presented as Management fees - related party in the year granted in the statement of comprehensive income / (loss). Accordingly, as of December 31, 2014, the Company has granted and issued to Loretto a total of 469,958 Class A common shares, of which 135,700 were issued in 2014.

In connection with the public offering that was completed in February 2014 (refer to Note 12), effective February 18, 2014, 135,700 Class A common shares, representing the 2% of the 6,785,000 Class A common shares sold in the public offering, were granted to Loretto. The fair value of such shares based on the average of the high-low trading price of the shares on February 18, 2014, was $880,015, which was recorded as share based compensation and is included in Management fees – related party in the accompanying consolidated statement of comprehensive loss for the year ended December 31, 2014.

(4) Administrative Service Agreement - The Company entered into an administrative service agreement with Allseas on November 12, 2008. Under the agreement, Allseas provides telecommunication services, secretarial and reception personnel and equipment, security facilities, office cleaning services and information technology services. The agreement provides that all costs and expenses incurred in connection with the provision of the above services by Allseas to be reimbursed on a quarterly basis.

(5) Newbuildings Supervision Agreement - The Company has entered into management agreements with Allseas relating to the supervision of each of the contracted newbuilding vessels, pursuant to which Allseas is entitled to: (1) a flat fee of $375,000 per vessel for the first 12 month period commencing from the respective steel cutting date of each vessel, and thereafter the flat fee will be paid on a pro rata basis until the vessel’s delivery to the Company, (2) a daily fee of €115 per vessel commencing from the date of the vessel's shipbuilding contract until the Company accepts delivery of the respective vessel, and (3) €500 per day for each day in excess of 5 days per calendar year for which a superintendent performed on site inspection.

(6) Compensation Agreement – The Company has entered into a compensation agreement with Allseas whereby in the event that Allseas is involuntarily terminated as the manager of its fleet, it shall compensate Allseas with an amount equal to the sum of (i) three years of the most recent management fees and commissions, based on the fleet at the time of termination, and (ii) €3,000,000 (or $3,642,000 based on the Euro/U.S. dollar exchange rate of €1.0000:$1.2140 as of December 31, 2014).

(7) Executive Services Agreement – Effective January 1, 2011, the Company entered into an executive services agreement with Allseas, pursuant to which Allseas provides the services of the executive officers, which include strategy, business development, marketing, finance and other services, who report directly to the Company’s Board of Directors. Under the agreement, prior to January 1, 2013, Allseas was entitled to an executive services fee of €2,500,000 per annum, payable in equal monthly installments, plus incentive compensation. Effective January 1, 2013, the executive services fee was adjusted to €2,700,000 per annum, while effective January 1, 2014, the executive services fee was adjusted to €2,900,000 per annum. The agreement has an initial term of five years and automatically renews for a successive five-year term unless sooner terminated. On March 6, 2013, the Company amended the terms of the termination clause of the executive services agreement, whereby, if the respective agreement is terminated by Allseas either for “good reason” or as a result of “change of control”, as such terms are defined in the agreement, or terminated by the Company without “cause”, as defined in the agreement, Allseas will be entitled to receive (i) the amount of the executive services fee payable through the “termination date,” as defined in the agreement; (ii) compensation equal to three years’ annual executive services fee then applicable; and (iii) an amount of the Company’s common shares equal to 5% of the then issued and outstanding shares of the Company. For the year ended December 31, 2012, an amount of $3,228,438 was paid to Allseas for the services of the executive officers, while no incentive compensation was remitted. For the year ended December 31, 2013, an amount of $7,582,634 was paid to Allseas for the services of the executive officers, which includes incentive compensation of $3,993,000. For the year ended December 31, 2014, an amount of $5,689,152 was paid to Allseas for the services of the executive officers, which includes incentive compensation of $1,848,900.

Each month, the Company funds a payment to Allseas to cover working capital equal to one month’s worth of estimated operating expenses. At each balance sheet date, the excess of the amount funded to Allseas over payments made by Allseas for operating expenses is reflected as Due from related parties. As of December 31, 2013 and 2014, the amount due from Allseas was $146,051 and $843,510, respectively.

 (b)Seacommercial: In January 2015, the Company’s vessel owning subsidiaries signed brokerage services agreements with Seacommercial. Pursuant to the agreements, effective January 2, 2015, Seacommercial provides full brokerage services in exchange for fees representing the 1.25% Charter Hire Commission and the 1.00% Vessel Commission.

(c)Granitis Glyfada Real Estate Ltd. ("Granitis") - Leasing: On September 13, 2007 and effective as of October 1, 2007, the Company entered into a rental agreement to lease office space in Athens, Greece, with Granitis, a company beneficially owned by the Company’s Chairman, President, Chief Executive Officer and Interim Chief Financial Officer. The term of the lease was for 5 years beginning October 1, 2007 and expired on September 30, 2012. The monthly rental for the first year was €2,000, plus 3.6% tax, and thereafter would be adjusted annually for inflation increases in accordance with the official Greek inflation rate. On October 1, 2012, the rental agreement was renewed for an additional term of 5 years, beginning October 1, 2012 and expiring September 30, 2017, pursuant to which the monthly rental for the first year is €3,000, plus 3.6% tax, and thereafter will be adjusted annually for inflation increases in accordance with the official Greek inflation rate. Rent expense under this lease amounted to $39,593, $49,324 and $49,001 for the years ended December 31, 2012, 2013 and 2014, respectively, and is included in General and administrative expenses in the accompanying consolidated statements of comprehensive loss.

 (d)Crewcare Inc. (“Crewcare”):

(1) Manning Agency Agreements – Each of the Company’s ship-owning subsidiaries has a manning agency agreement with Crewcare, a company beneficially owned by the Company’s Chief Executive Officer, based in Manila, Philippines. Under the agreements, manning services are provided in exchange for a fixed monthly fee of $95 per seaman for all officers and crew who serve on board each vessel, plus a recruitment fee of $120 per seaman, payable on a one-off basis. In addition, the agreements also provide for a fee of $30 per seaman for in-house training, and a fee of $50 per seaman for extra in-house training. The expenses incurred amounted to $321,648, $382,517 and $441,499 for the years ended December 31, 2012, 2013 and 2014, respectively, and are included in Vessels operating expenses. Administrative services are also being provided which represent payment of crew wages and related costs on behalf of the Company.

(2) Cadetship Program Agreements – On October 5, 2013, each of the Company’s ship-owning subsidiaries entered into a cadetship program agreement with Crewcare, pursuant to which Crewcare, at its own cost, is responsible for recruiting and training cadets to be assigned to the vessels. These services are being provided in exchange for a lump sum fee of $5,000 per cadet employed on board the vessel for one-year on board training. The agreement has an initial term of one year with the option to renew for one more year by mutual agreement. The agreement was renewed for one additional year, effective October 5, 2014. The expenses incurred for the years ended December 31, 2013 and 2014, amounted to $15,000 and $360,000, respectively, and are included in Vessels operating expenses.

The balances due to Crewcare amounted to $82,074 and $166,354 as of December 31, 2013 and 2014, respectively.

(e)Box Ships Inc.: As of December 31, 2013 and 2014, the Company held 13.6% and 11.0% of Box Ships’ common stock, respectively. The decrease in the percentage of Box Ships’ common stock held by the Company is mainly due to the Company’s non-participation in the public offering of 5,500,000 common shares of Box Ships, which was completed on April 15, 2014 (refer to Note 8).

On May 27, 2011, the Company granted Box Ships an unsecured loan of $30,000,000. The loan was initially payable in one installment on the second anniversary of the Box Ships IPO on April 19, 2013. The loan bore interest at LIBOR plus a margin of 4.00%. As of December 31, 2012, the outstanding loan balance due from Box Ships was $14,000,000. On February 28, 2013, Box Ships prepaid an amount of $1,000,000 and reduced the outstanding balance of the respective loan to $13,000,000. In addition, on March 11, 2013, the Company agreed to amend certain terms of the loan agreement. Pursuant to the amended agreement, the Company agreed to extend the maturity of the loan for one year, from April 19, 2013 to April 19, 2014. During the remaining term of the loan, Box Ships was required to make quarterly principal installments in the amount of $1,000,000 each, with a final balloon payment of $9,000,000 due on the maturity date. In consideration for the amendment of the loan agreement, Box Ships agreed to pay an amendment fee of $65,000, which is included in Interest income in the accompanying consolidated statement of comprehensive loss for the year ended December 31, 2013, and to increase the margin from 4.00% to 5.00%. In April 2013, Box Ships paid the amendment fee of $65,000. Pursuant to the amended loan agreement, on April 19, 2013 and on July 19, 2013, Box Ships proceeded with the first two quarterly principal installment payments of $1,000,000 each. In addition, on August 5, 2013, Box Ships prepaid an amount of $5,000,000 and reduced the outstanding balance of the respective loan to $6,000,000, which was fully repaid on October 18, 2013. For the years ended December 31, 2012, 2013 and 2014, interest charged on the respective loan amounted to $675,856, $439,326 and $0, respectively.

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Earnings per Share ("EPS")

12 Months Ended

Dec. 31, 2014

Earnings per Share ("EPS") [Abstract]

Earnings per Share ("EPS")

16.Earnings per Share (“EPS”)

The following table sets forth the computation of basic and diluted net loss per share for the years ended December 31, 2012, 2013 and 2014:

Basic EPS – Class A Common Shares

The two class method EPS is calculated as follows:

	Years Ended December 31,
Numerators	2012	2013	2014
Net loss	($17,557,125)	($16,953,032)	($51,796,181)
Less: Net loss attributable to non-vested share awards	444,326	351,877	832,333
Net loss attributable to common shareholders	($17,112,799)	($16,601,155)	($50,963,848)
Denominators
Weighted average common shares outstanding, basic and diluted	6,035,910	12,639,128	23,326,062
Net loss per common share, basic and diluted:	($2.84)	($1.31)	($2.18)

Weighted Average Shares – Basic - In calculating basic EPS, the Company includes the effect of vested share awards and Class A common shares issued for exercised stock option awards from the date they are issued or vested.

Weighted Average Shares – Diluted - In calculating diluted EPS, the Company includes the potential dilution that could occur if securities or other contracts to issue common stock were exercised. In calculating diluted EPS, the following dilutive securities are included in the shares outstanding unless their effect is anti-dilutive:

Unvested share awards outstanding under the Company’s Stock Incentive Plan

Class A common shares issuable upon exercise of the Company’s outstanding options

The Company excluded the dilutive effect of 2,800 (2012 and 2013: 2,800) stock option awards, and 348,500 (2012: 58,335 and 2013: 339,000) non-vested share awards in calculating dilutive EPS for its Class A common shares as their effect was anti-dilutive.

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Capital Structure

12 Months Ended

Dec. 31, 2014

Capital Structure [Abstract]

Capital Structure

12.Capital Structure

(a)Common Stock:

Under the amended and restated articles of incorporation, the Company's authorized common stock consists of 755,000,000 shares of common stock, par value $0.001 per share, divided into 750,000,000 Class A common shares and 5,000,000 Class B common shares.

Each holder of Class A common shares is entitled to one vote on all matters submitted to a vote of shareholders. Subject to preferences that may be applicable to any outstanding shares of preferred stock, holders of Class A common shares are entitled to receive ratably all dividends, if any, declared by the Company's Board of Directors out of funds legally available for dividends. Upon dissolution, liquidation or sale of all or substantially all of the Company's assets, after payment in full of all amounts required to be paid to creditors and to the holders of preferred stock having liquidation preferences, if any, Class A common shareholders are entitled to receive pro rata the Company's remaining assets available for distribution. Holders of Class A common shares do not have conversion, redemption or pre-emptive rights.

On December 24, 2012, the Company entered into an agreement to sell 4,901,961 newly-issued Class A common shares to Innovation Holdings, an entity beneficially owned by Mr. Michael Bodouroglou, the Company’s Chairman, President, Chief Executive Officer and Interim Chief Financial Officer, for a total consideration of $10,000,000. The transaction closed on December 24, 2012. In addition, Innovation Holding also received customary registration rights in respect of the common shares it received in the private placement. The documentation entered into in connection with the private placement was approved by the independent member of the Company’s Board of Directors.

Effective February 15, 2013, 98,039 Class A common shares, representing the 2.0% of the 4,901,961 newly-issued Class A common shares sold to Innovation Holdings discussed above, were granted to Loretto. The fair value of such shares based on the average of the high-low trading price of the shares on February 15, 2013, was $335,784, which was recorded as share based compensation and is included in Management fees – related party in the accompanying consolidated statement of comprehensive loss for the year ended December 31, 2013.

On September 27, 2013, the Company completed a public offering of 6,000,000 of its Class A common shares at $5.75 per share, including the full exercise of the over-allotment option granted to the underwriters to purchase up to 782,609 additional common shares. The net proceeds from the offering, which amounted to $31,881,984, net of underwriting discounts and commissions of $2,070,000 and other offering expenses of $548,016, would be used to fund the initial deposits and other costs associated with the purchase of two Ultramax newbuilding drybulk carriers, the Hull numbers DY152 and DY153, as discussed in Note 5, and general corporate purposes. In connection with the offering, effective September 27, 2013, 120,000 Class A common shares, representing the 2.0% of the 6,000,000 Class A common shares sold in the public offering, were granted to Loretto. The fair value of such shares based on the average of the high-low trading price of the shares on September 27, 2013, was $714,000, which was recorded as share based compensation and is included in Management fees – related party in the accompanying consolidated statement of comprehensive loss for the year ended December 31, 2013.

On February 18, 2014, the Company completed a public offering of 6,785,000 of its Class A common shares at $6.25 per share, including the full exercise of the over-allotment option granted to the underwriters to purchase up to 885,000 additional common shares. The net proceeds from the offering amounted to $39,741,152, net of underwriting discounts and commissions and other offering expenses payable by the Company. In connection with the offering, effective February 18, 2014, 135,700 Class A common shares, representing the 2.0% of the 6,785,000 Class A common shares sold in the public offering, were granted to Loretto. The fair value of such shares based on the average of the high-low trading price of the shares on February 18, 2014, was $880,015, which was recorded as share based compensation and is included in Management fees – related party in the accompanying consolidated statement of comprehensive loss for the year ended December 31, 2014.

On May 12, 2014, the Company’s Board of Directors authorized a share buyback program of up to $10,000,000 for a period of twelve months. The Company expects to repurchase these shares in the open market, at times and prices that are considered to be appropriate by the Company, but is not obligated under the terms of the program to repurchase any shares. Pursuant to the share buyback program, as of December 31, 2014, the Company had purchased and cancelled 30,000 of its common shares at an average price of $5.6820 per share.

As of December 31, 2013 and 2014, the Company had a total of 17,669,442 and 24,809,142 Class A common shares outstanding, respectively, and no other class of shares outstanding.

(b)Preferred Stock:

Under the amended and restated articles of incorporation, the Company's authorized preferred stock consists of 25,000,000 shares of preferred stock, par value $0.001 per share, and there was none issued and outstanding at December 31, 2013 and 2014.

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Commitments and Contingencies - Charter Hire (Table) (Details) (USD $)	Dec. 31, 2014
Charter Hire for the year ending
December 31, 2015	$ 4,308,843
Total	$ 4,308,843

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Investment in Affiliate

12 Months Ended

Dec. 31, 2014

Investment in Affiliate [Abstract]

Investment in Affiliate

8.Investment in Affiliate

The following table is a reconciliation of the Company’s investment in affiliate as presented on the accompanying consolidated balance sheets:

Balance January 1, 2013	$19,987,743
Equity in net income of affiliate	1,652,339
Equity in other comprehensive income of affiliate	77,165
Dividends received	(1,787,500)
Dilution effect	(390,821)
Impairment in investment in affiliate	(8,229,551)
Balance December 31, 2013	$11,309,375
Equity in net income of affiliate	471,079
Equity in other comprehensive income of affiliate	16,139
Dilution effect	(221,679)
Impairment in investment in affiliate	(8,618,664)
Balance December 31, 2014	$2,956,250

As of December 31, 2013 and 2014, the Company held 3,437,500 shares or 13.6% and 11.0% of Box Ships’ common stock, respectively. The decrease in the percentage of Box Ships’ common stock held by the Company is mainly due to the Company’s non-participation in the public offering of 5,500,000 common shares of Box Ships, which was completed on April 15, 2014. The Company, on the basis of significant influence exercised over Box Ships through its shareholdings and shared executive management, accounted for its investment in Box Ships under the equity method and is separately reflected on Company’s consolidated balance sheets.

The loss on investment in affiliate of $8,620,372 for the year ended December 31, 2013, consists of $390,821, relating to the dilution effect from the Company’s non-participation in the public offering of 4,000,000 common shares of Box Ships, which was completed on March 18, 2013, as well as the aggregate impairment in investment in affiliate of $8,229,551, relating to the difference between the fair value and the book value of the Company’s investment in Box Ships, which the Company considered as other than temporary (refer to Note 11).

The loss on investment in affiliate of $8,840,343, for the year ended December 31, 2014, consists of $221,679, relating to the dilution effect from the Company’s non-participation in the public offering of 5,500,000 common shares of Box Ships, which was completed on April 15, 2014, as well as the aggregate impairment in investment in affiliate of $8,618,664, relating to the difference between the fair value and the book value of the Company’s investment in Box Ships, which the Company considered as other than temporary (refer to Note 11).

Summarized financial information in respect of Box Ships Inc. is set out below:

	Year ended December 31,
INCOME STATEMENT DATA	2013	2014
Net revenue	$69,836,201	$49,864,674
Operating income	23,631,192	1,966,947
Net income	$15,307,658	$2,623,515
	As of December 31,
BALANCE SHEET DATA	2013	2014
Total current assets	$31,691,262	$22,011,255
Total non-current assets	397,915,376	375,837,950
Total assets	429,606,638	397,849,205
Total current liabilities	184,434,021	140,886,944
Total long-term liabilities	$453,248	$282,375

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Long-Term Debt - Description (Details) (USD $)

9 Months Ended

12 Months Ended

0 Months Ended

9 Months Ended

3 Months Ended

9 Months Ended

0 Months Ended

7 Months Ended

Sep. 27, 2013

Dec. 31, 2014

Dec. 31, 2013

Dec. 31, 2012

Jul. 07, 2014

Oct. 15, 2014

Apr. 09, 2014

Dec. 31, 2014

Jan. 07, 2014

Jun. 10, 2014

Aug. 08, 2014

Sep. 30, 2014

Apr. 04, 2014

Apr. 10, 2014

May 06, 2014

Debt Instrument [Line Items]

Debt variable rate basis

LIBOR

Outstanding balance

$ 230,778,738

$ 180,114,926

$ 230,778,738

Proceeds from long-term debt

179,144,427

0

28,908,750

Debt underwriting discounts and commissions

2,070,000

Trading symbol

PRGN

(a) Commerzbank AG (August 12, 2011)

Debt Instrument [Line Items]

Introductory loan and credit facility information

On April 1, 2015, the Company agreed with Commerzbank AG (“Commerzbank”) to amend certain terms of the facility, including the deferral of a portion of its four scheduled quarterly installments due in 2015, and the waiver of the application of the financial and security cover ratio covenants contained in the facility, effective from December 31, 2014 until December 31, 2015. The Company also agreed to a $3,000,000 partial prepayment, a portion of which was prepaid in the first quarter of 2015, while the balance is payable upon signing the final documentation.

Debt variable rate basis

LIBOR

Margin

3.00%

Outstanding balance

43,375,000

47,550,000

43,375,000

Debt instrument payment terms

Excluding the agreement dated April 1, 2015 discussed above, the outstanding loan amount as of December 31, 2014 of $43,375,000 was required to be repaid in 11 consecutive quarterly installments of $1,425,000, plus a balloon repayment of $27,700,000 payable simultaneously with the final installment in the third quarter of 2017.
Following the agreement dated April 1, 2015, and after giving effect to the $3,000,000 partial prepayment discussed above, the outstanding loan amount of $40,375,000 is required to be repaid in 4 consecutive quarterly installments of $712,500, followed by 7 consecutive quarterly installments of $1,425,000, plus a balloon repayment of $27,550,000 payable simultaneously with the final installment in the third quarter of 2017.

(b) Unicredit Bank AG (November 19, 2007)

Debt Instrument [Line Items]

Introductory loan and credit facility information

On September 13, 2013, the Company agreed with Unicredit Bank AG (“Unicredit”) to extend the expiration date of the existing waiver relating to the financial covenant of total liabilities to EBITDA ratio for two quarters, from January 1, 2014 to July 1, 2014, for a nominal fee and an advance payment of $1,500,000 to partially prepay the upcoming three quarterly loan installments, starting with the installment due in the fourth quarter of 2013. The advance payment of $1,500,000 was paid on September 13, 2013. On January 20, 2014, the Company agreed with Unicredit to extend the existing waiver relating to the financial covenant of total liabilities to EBITDA ratio until January 1, 2015. On July 30, 2014, the Company agreed with Unicredit, subject to certain closing conditions including a $7,000,000 prepayment, to eliminate the financial covenants relating to the minimum debt service coverage ratio, the minimum market value adjusted net worth and the maximum leverage ratio until the maturity of the loan. In addition, the Company also agreed to increase the required ratio of the fair market value of mortgaged vessels to outstanding loan from 110% to 130% at all times. The Company prepaid the amount of $7,000,000 on September 30, 2014, which was applied against a pro-rate reduction of the remaining installments, excluding the balloon repayment. Furthermore, on March 27, 2015, the Company entered into a loan supplemental agreement and agreed to amended terms with Unicredit, including the deferral of one and a portion of five of its scheduled quarterly installments due in the second quarter of 2015 through the third quarter of 2016, and the waiver of the minimum liquid assets requirement and the security ratio covenant until the maturity of the loan.

Debt variable rate basis

LIBOR

Margin

2.75%

Outstanding balance

14,606,500

22,587,000

14,606,500

Debt instrument payment terms

Excluding the supplemental agreement dated March 27, 2015 discussed above, the outstanding loan amount as of December 31, 2014 of $14,606,500 is required to be repaid in 7 consecutive quarterly installments of $480,500, plus a balloon repayment of $11,243,000 payable simultaneously with the final installment in the third quarter of 2016.
Following the supplemental agreement dated March 27, 2015 discussed above, the outstanding loan amount as of December 31, 2014 of $14,606,500 is required to be repaid in 1 quarterly installment of $480,500 in the first quarter of 2015, while no installment is due in the second quarter of 2015, followed by 5 consecutive quarterly installments of $240,250, plus a balloon repayment of $12,924,750 payable simultaneously with the final installment in the third quarter of 2016.

Prepayment amount

7,000,000

(c) Bank of Scotland Plc (December 4, 2007)

Debt Instrument [Line Items]

Introductory loan and credit facility information

On June 10, 2014, the Company completed the refinancing of the M/V Coral Seas and the M/V Golden Seas as discussed below, and repaid in full the then outstanding indebtedness under its existing loan agreement with Bank of Scotland Plc dated December 4, 2007.

Outstanding balance

0

33,616,864

0

(d) Bank of Ireland (March 30, 2009)

Debt Instrument [Line Items]

Introductory loan and credit facility information

On July 25, 2014, the Company agreed with Bank of Ireland to eliminate the financial covenant relating to the minimum debt service coverage ratio until the maturity of the loan. In addition, on September 30, 2014, the Company proceeded with a prepayment of $4,000,000 with respect to its loan agreement with Bank of Ireland in return for a reduction in the next eight quarterly installments and an increase in the balloon at maturity. In addition, on March 27, 2015, the Company agreed with Bank of Ireland to waive 50% of the installment due in the first quarter of 2015, until April 30, 2015.

Debt variable rate basis

LIBOR

Margin

2.50%

Outstanding balance

8,350,000

13,400,000

8,350,000

Debt instrument payment terms

The outstanding loan amount as of December 31, 2014, of $8,350,000 is required to be repaid in 3 consecutive quarterly installments of $350,000, followed by 4 consecutive quarterly installments of $400,000, followed by 3 consecutive quarterly installments of $1,000,000, plus a balloon repayment of $2,700,000 payable simultaneously with the final installment in the second quarter of 2017.

Prepayment amount

4,000,000

(e-1) HSH Nordbank AG (July 31, 2008)

Debt Instrument [Line Items]

Introductory loan and credit facility information

On July 7, 2014, the Company completed the refinancing of the M/V Friendly Seas as discussed below, and repaid in full the then outstanding indebtedness under its existing loan agreement with HSH Nordbank AG (“HSH”) dated July 31, 2008.

Outstanding balance

0

20,625,000

0

(e-2) HSH Nordbank AG (April 4, 2014)

Debt Instrument [Line Items]

Introductory loan and credit facility information

On April 4, 2014, the Company completed the documentation for a new loan agreement with HSH for a $47,000,000 secured loan facility for the refinancing of the M/V Friendly Seas and the partial financing of the first two Ultramax newbuilding drybulk carriers, the Hull numbers DY152 and DY153. For M/V Friendly Seas, HSH agreed to finance the lower of $12,600,000 or 60% of the vessel’s market value upon the respective drawdown date. For each of the two Ultramax vessels, HSH agreed to finance the lower of $17,200,000 or 65% of the vessels’ market value upon their delivery. On July 7, 2014, the Company completed the refinancing of the M/V Friendly Seas. The Company drew a total amount of $12,600,000 and repaid in full the then outstanding indebtedness under its existing loan agreement with HSH (dated July 31, 2008). In addition, in October 2014, the Company took delivery of its first two Ultramax drybulk carriers; the M/V Gentle Seas and the M/V Peaceful Seas (Hull numbers DY152 and DY153). The Company drew a total amount of $34,400,000, which was used for the payment of the final installment of the two vessels to the shipyard (refer to Note 5).

Debt variable rate basis

LIBOR

Margin

3.25%

Outstanding balance

46,713,600

0

46,713,600

Debt instrument payment terms

The outstanding loan amount as of December 31, 2014, of $46,713,600 consists of the following: (i) $12,313,600 relating to the M/V Friendly Seas, which is required to be repaid in 26 consecutive quarterly installments of $286,400, plus a balloon repayment of $4,867,200 payable simultaneously with the final installment in the second quarter of 2021, and (ii) $34,400,000 relating to the M/V Gentle Seas and the M/V Peaceful Seas, which is required to be repaid in 28 consecutive quarterly installments of $506,000, plus a balloon repayment of $20,232,000 payable simultaneously with the final installment in the fourth quarter of 2021.

Amount available for drawdown

47,000,000

Proceeds from long-term debt

12,600,000

34,400,000

(f) HSBC Bank Plc (July 2, 2010)

Debt Instrument [Line Items]

Introductory loan and credit facility information

On April 8, 2014, the Company signed a supplemental agreement with HSBC Bank Plc (“HSBC”) and agreed to amend the definitions of certain financial covenants, to prepay an amount of $800,000 that was prepaid on April 10, 2014, and to reduce the outstanding scheduled quarterly installments from $400,000 to $380,000, commencing from the second quarter of 2014. In addition, on August 1, 2014, the Company agreed with HSBC to extend the existing waivers for the financial covenants relating to the minimum interest and debt service coverage ratios, from June 30, 2014 to December 31, 2015.

Debt variable rate basis

LIBOR

Margin

3.00%

Outstanding balance

14,460,000

16,800,000

14,460,000

Debt instrument payment terms

The outstanding loan amount as of December 31, 2014, of $14,460,000 is required to be repaid in 23 consecutive quarterly installments of $380,000, plus a balloon repayment of $5,720,000 payable simultaneously with the final installment in the third quarter of 2020.

Prepayment amount

800,000

Quarterly periodic payments

400,000

380,000

(g-1) Nordea Bank Finland Plc (May 5, 2011)

Debt Instrument [Line Items]

Introductory loan and credit facility information

On January 7, 2014, we took delivery of our fourth Handysize drybulk vessel; the M/V Proud Seas (refer to Notes 5 and 6). Upon the delivery of the vessel, we drew the total amount of the then undrawn portion of the facility of $25,394,427, by mortgaging both the M/V Priceless Seas and the M/V Proud Seas. On June 10, 2014, the Company completed the refinancing of the M/V Prosperous Seas, the M/V Precious Seas, the M/V Priceless Seas and the M/V Proud Seas as discussed below, and repaid in full the then outstanding indebtedness under its existing syndicated loan facility led by Nordea Bank Finland Plc ("Nordea") dated May 5, 2011.

Outstanding balance

0

25,536,062

0

Proceeds from long-term debt

25,394,427

(g-2) Nordea Bank Finland Plc (May 6, 2014)

Debt Instrument [Line Items]

Introductory loan and credit facility information

On May 6, 2014, the Company completed the documentation for a senior secured loan facility with a syndicate of major European banks led by Nordea in an amount of $160,000,000. This facility will be used for the refinancing of six vessels of its operating fleet (the four Handysize vessels M/V Prosperous Seas, M/V Precious Seas, M/V Priceless Seas and the M/V Proud Seas, and the Panamax vessels M/V Coral Seas and M/V Golden Seas), along with the financing of up to 60% of the market value of the remaining two Ultramax newbuilding drybulk carriers, the Hull numbers DY4050 and DY4052, and two of its Kamsarmax newbuilding drybulk carriers, the Hull numbers YZJ1144 and YZJ1145, that are expected to be delivered between the second and fourth quarter of 2015. On June 10, 2014, the Company completed the refinancing of the six vessels of its operating fleet discussed above. The Company drew a total amount of $81,750,000 and repaid in full the then outstanding indebtedness under its existing loan agreements with Bank of Scotland Plc (dated December 4, 2007) and Nordea (dated May 5, 2011). Such refinancing resulted in the write off of the unamortized financing costs of the respective facilities of $1,027,694, which is included in Interest and finance costs in the accompanying consolidated statement of comprehensive loss for the year ended December 31, 2014.

Debt variable rate basis

LIBOR

Margin

3.20%

Outstanding balance

78,273,638

0

78,273,638

Debt instrument payment terms

The outstanding loan amount as of December 31, 2014, of $78,273,638 is required to be repaid in 22 consecutive quarterly installments of $1,738,181, plus a balloon repayment of $40,033,656 payable simultaneously with the final installment in the second quarter of 2020.

Amount available for drawdown

160,000,000

Proceeds from long-term debt

81,750,000

Bank of Scotland (December 4, 2007) and Nordea (May 5, 2011)

Debt Instrument [Line Items]

Write off of unamortized financing costs

1,027,694

(h) Senior unsecured notes due 2021

Debt Instrument [Line Items]

Outstanding balance

25,000,000

0

25,000,000

Terms and conditions of debt

On August 8, 2014, the Company completed the offering of 1,000,000 senior unsecured notes due 2021 (“Notes”), pursuant to its effective shelf registration statement. The Notes were issued in minimum denominations of $25.00 and integral multiples of $25.00 in excess thereof, and bear interest at a rate of 8.375% per year, payable quarterly on each February 15, May 15, August 15 and November 15, commencing on November 15, 2014. The Notes will mature on August 15, 2021, and may be redeemed in whole or in part at any time or from time to time after August 15, 2017. The net proceeds from the offering amounted to $23,856,583, net of underwriting discounts and commissions of $812,500, and offering expenses payable by the Company of $330,917. The Notes trade on NASDAQ under the symbol “PRGNL”.

Interest rate per year

8.375%

8.375%

Debt maturity date

Aug. 15, 2021

Net proceeds from issuance of debt

23,856,583

Debt underwriting discounts and commissions

812,500

Other offering costs

330,917

Trading symbol

PRGNL

China Development Bank (May 17, 2013)

Debt Instrument [Line Items]

Write off of unamortized financing costs

$ 483,054

Spread 2 | (a) Commerzbank AG (August 12, 2011)

Debt Instrument [Line Items]

Margin

4.50%

Spread 2 | (b) Unicredit Bank AG (November 19, 2007)

Debt Instrument [Line Items]

Margin

5.00%

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Vessels, Net

12 Months Ended

Dec. 31, 2014

Vessels Net [Abstract]

Vessels, Net

6.Vessels, Net

	Vessel	Accumulated	Net Book
	Cost	Depreciation	Value
Balance January 1, 2013	$351,611,923	$(53,235,483)	$298,376,440
Newbuilding deliveries	24,581,533	-	24,581,533
Depreciation for the period	-	(16,822,057)	(16,822,057)
Balance December 31, 2013	$376,193,456	$(70,057,540)	$306,135,916
Newbuilding deliveries	81,051,077	-	81,051,077
Depreciation for the period	-	(18,154,020)	(18,154,020)
Balance December 31, 2014	$457,244,533	$(88,211,560)	$369,032,973

All Company’s vessels were first-priority mortgaged as collateral to the loans and credit facilities and related interest rate swaps outstanding as of December 31, 2014.

On January 29, 2013, the Company took delivery of the Handysize drybulk carrier; the M/V Priceless Seas.

During 2014, the Company took delivery of the Handysize drybulk carrier; the M/V Proud Seas, and the two Ultramax drybulk carriers; the M/V Gentle Seas and the M/V Peaceful Seas (refer to Notes 5 and 9).

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Other Assets

12 Months Ended

Dec. 31, 2014

Other Assets [Abstract]

Other Assets

7. Other Assets

Other assets of $2,303,304 and $4,367,134 as of December 31, 2013 and 2014, respectively, include deferred financing costs of $2,297,121 and $4,360,951, respectively, and utility deposits related to the leased office space of $6,183 at December 31, 2013 and 2014.

The deferred financing costs comprise:

Balance January 1, 2013	$2,596,029
Additions	642,825
Amortization	(941,733)
Balance December 31, 2013	$2,297,121
Additions	4,172,546
Amortization	(2,108,716)
Balance December 31, 2014	$4,360,951

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Long-Term Debt

12 Months Ended

Dec. 31, 2014

Long-Term Debt [Abstract]

Long-Term Debt

9.Long-Term Debt

The table below presents a breakdown of the Company’s long-term debt as of December 31, 2013 and 2014:

	2013	2014
(a)Commerzbank AG (August 12, 2011)	$47,550,000	$43,375,000
(b)Unicredit Bank AG (November 19, 2007)	22,587,000	14,606,500
(c)Bank of Scotland Plc (December 4, 2007)	33,616,864	-
(d)Bank of Ireland (March 30, 2009)	13,400,000	8,350,000
(e-1)HSH Nordbank AG (July 31, 2008)	20,625,000	-
(e-2)HSH Nordbank AG (April 4, 2014)	-	46,713,600
(f)HSBC Bank Plc (July 2, 2010)	16,800,000	14,460,000
(g-1)Nordea Bank Finland Plc (May 5, 2011)	25,536,062	-
(g-2)Nordea Bank Finland Plc (May 6, 2014)	-	78,273,638
(h)Senior unsecured notes due 2021	-	25,000,000
Total	$180,114,926	$230,778,738

Disclosed as follows in the Consolidated Balance Sheets
Current portion of long-term debt	$17,257,750	$20,714,324
Long-term debt	162,857,176	210,064,414
Total	$180,114,926	$230,778,738

As of December 31, 2014, the minimum annual principal payments for the outstanding debt required to be made after the balance sheet date, excluding the subsequent agreements with Commerzbank AG, Unicredit Bank AG and Bank of Ireland discussed below, are as follows:

To December 31,
2015	$20,714,324
2016	32,226,824
2017	48,317,324
2018	11,642,324
2019	11,642,324
Thereafter	106,235,618
Total	$230,778,738

(a)Commerzbank AG (August 12, 2011): On April 1, 2015, the Company agreed with Commerzbank AG (“Commerzbank”) to amend certain terms of the facility, including the deferral of a portion of its four scheduled quarterly installments due in 2015, and the waiver of the application of the financial and security cover ratio covenants contained in the facility, effective from December 31, 2014 until December 31, 2015. The Company also agreed to a $3,000,000 partial prepayment, a portion of which was prepaid in the first quarter of 2015, while the balance is payable upon signing the final documentation.

The main terms and conditions of the loan agreement dated August 12, 2011, as subsequently amended, are as follows:

The loan agreement is secured by a first priority mortgage on the vessels: M/V Sapphire Seas, M/V Pearl Seas and M/V Diamond Seas.

The loan bears interest at LIBOR, plus any mandatory costs, plus a margin of (i) 3.00% on the outstanding amount of the loan, less any amounts that are deferred, and (ii) 4.50% on the amounts of the loan that have been deferred.

Excluding the agreement dated April 1, 2015 discussed above, the outstanding loan amount as of December 31, 2014 of $43,375,000 was required to be repaid in 11 consecutive quarterly installments of $1,425,000, plus a balloon repayment of $27,700,000 payable simultaneously with the final installment in the third quarter of 2017.

Following the agreement dated April 1, 2015, and after giving effect to the $3,000,000 partial prepayment discussed above, the outstanding loan amount of $40,375,000 is required to be repaid in 4 consecutive quarterly installments of $712,500, followed by 7 consecutive quarterly installments of $1,425,000, plus a balloon repayment of $27,550,000 payable simultaneously with the final installment in the third quarter of 2017.

Covenants (as defined in the respective loan agreement):

The ratio of EBITDA to net interest expenses is waived until December 31, 2015, and thereafter shall not be less than 3.00:1.00.

The market value adjusted net worth of the Company is waived until December 31, 2015, and thereafter shall not be less than $100,000,000.

Maintain liquid assets requirement is waived until December 31, 2015, and thereafter shall equal an amount of no less than $650,000 per vessel at all times.

The ratio of maximum net debt to total assets expressed as a percentage is waived until December 31, 2015, and thereafter shall not exceed 80%.

The aggregate fair market value of the mortgaged vessels to outstanding loan ratio is waived until December 31, 2015, and thereafter shall exceed 120%.

(b) Unicredit Bank AG (November 19, 2007): On September 13, 2013, the Company agreed with Unicredit Bank AG (“Unicredit”) to extend the expiration date of the existing waiver relating to the financial covenant of total liabilities to EBITDA ratio for two quarters, from January 1, 2014 to July 1, 2014, for a nominal fee and an advance payment of $1,500,000 to partially prepay the upcoming three quarterly loan installments, starting with the installment due in the fourth quarter of 2013. The advance payment of $1,500,000 was paid on September 13, 2013. On January 20, 2014, the Company agreed with Unicredit to extend the existing waiver relating to the financial covenant of total liabilities to EBITDA ratio until January 1, 2015. On July 30, 2014, the Company agreed with Unicredit, subject to certain closing conditions including a $7,000,000 prepayment, to eliminate the financial covenants relating to the minimum debt service coverage ratio, the minimum market value adjusted net worth and the maximum leverage ratio until the maturity of the loan. In addition, the Company also agreed to increase the required ratio of the fair market value of mortgaged vessels to outstanding loan from 110% to 130% at all times. The Company prepaid the amount of $7,000,000 on September 30, 2014, which was applied against a pro-rate reduction of the remaining installments, excluding the balloon repayment. Furthermore, on March 27, 2015, the Company entered into a loan supplemental agreement and agreed to amended terms with Unicredit, including the deferral of one and a portion of five of its scheduled quarterly installments due in the second quarter of 2015 through the third quarter of 2016, and the waiver of the minimum liquid assets requirement and the security ratio covenant until the maturity of the loan.

The main terms and conditions of the loan agreement dated November 19, 2007, as subsequently amended, are as follows:

The loan agreement is secured by a first priority mortgage on the vessels: M/V Calm Seas and M/V Deep Seas.

The loan bears interest at LIBOR, plus a margin of (i) 2.75% on the outstanding amount of the loan, less any amounts that are deferred, and (ii) 5.00% on the amounts of the loan that have been deferred, excluding any amounts deferred pursuant to the supplemental agreement dated March 27, 2015.

Excluding the supplemental agreement dated March 27, 2015 discussed above, the outstanding loan amount as of December 31, 2014 of $14,606,500 is required to be repaid in 7 consecutive quarterly installments of $480,500, plus a balloon repayment of $11,243,000 payable simultaneously with the final installment in the third quarter of 2016.

Following the supplemental agreement dated March 27, 2015 discussed above, the outstanding loan amount as of December 31, 2014 of $14,606,500 is required to be repaid in 1 quarterly installment of $480,500 in the first quarter of 2015, while no installment is due in the second quarter of 2015, followed by 5 consecutive quarterly installments of $240,250, plus a balloon repayment of $12,924,750 payable simultaneously with the final installment in the third quarter of 2016.

Covenants: The financial and security cover ratio covenants contained in the facility have been permanently waived until the maturity of the loan, pursuant to the supplemental agreement dated March 27, 2015.

(c)Bank of Scotland Plc (December 4, 2007): On June 10, 2014, the Company completed the refinancing of the M/V Coral Seas and the M/V Golden Seas as discussed below, and repaid in full the then outstanding indebtedness under its existing loan agreement with Bank of Scotland Plc dated December 4, 2007.

(d)Bank of Ireland (March 30, 2009): On July 25, 2014, the Company agreed with Bank of Ireland to eliminate the financial covenant relating to the minimum debt service coverage ratio until the maturity of the loan. In addition, on September 30, 2014, the Company proceeded with a prepayment of $4,000,000 with respect to its loan agreement with Bank of Ireland in return for a reduction in the next eight quarterly installments and an increase in the balloon at maturity. In addition, on March 27, 2015, the Company agreed with Bank of Ireland to waive 50% of the installment due in the first quarter of 2015, until April 30, 2015.

The main terms and conditions of the loan agreement dated March 30, 2009, as subsequently amended, are as follows:

The loan agreement is secured by a first priority mortgage on the vessel M/V Kind Seas.

The loan bears interest at LIBOR, plus a margin of 2.50%.

The outstanding loan amount as of December 31, 2014, of $8,350,000 is required to be repaid in 3 consecutive quarterly installments of $350,000, followed by 4 consecutive quarterly installments of $400,000, followed by 3 consecutive quarterly installments of $1,000,000, plus a balloon repayment of $2,700,000 payable simultaneously with the final installment in the second quarter of 2017.

Covenants (as defined in the respective loan agreement):

The minimum requirement of market value adjusted net worth of the Company is waived until December 31, 2014 and thereafter, shall not be less than $50,000,000.

The leverage ratio is waived until December 31, 2014 and thereafter, shall not be greater than 0.80:1.00.

Minimum liquid assets requirement is waived until December 31, 2014 and thereafter, the Company shall maintain liquid assets in an amount of no less than $500,000 per vessel at all times.

The fair market value of the mortgaged vessel to outstanding loan ratio is waived until December 31, 2014 and thereafter, shall exceed 110%.

(e-1)HSH Nordbank AG (July 31, 2008): On July 7, 2014, the Company completed the refinancing of the M/V Friendly Seas as discussed below, and repaid in full the then outstanding indebtedness under its existing loan agreement with HSH Nordbank AG (“HSH”) dated July 31, 2008.

(e-2)HSH Nordbank AG (April 4, 2014): On April 4, 2014, the Company completed the documentation for a new loan agreement with HSH for a $47,000,000 secured loan facility for the refinancing of the M/V Friendly Seas and the partial financing of the first two Ultramax newbuilding drybulk carriers, the Hull numbers DY152 and DY153. For M/V Friendly Seas, HSH agreed to finance the lower of $12,600,000 or 60% of the vessel’s market value upon the respective drawdown date. For each of the two Ultramax vessels, HSH agreed to finance the lower of $17,200,000 or 65% of the vessels’ market value upon their delivery. On July 7, 2014, the Company completed the refinancing of the M/V Friendly Seas. The Company drew a total amount of $12,600,000 and repaid in full the then outstanding indebtedness under its existing loan agreement with HSH (dated July 31, 2008). In addition, in October 2014, the Company took delivery of its first two Ultramax drybulk carriers; the M/V Gentle Seas and the M/V Peaceful Seas (Hull numbers DY152 and DY153). The Company drew a total amount of $34,400,000, which was used for the payment of the final installment of the two vessels to the shipyard (refer to Note 5).

The main terms and conditions of the loan agreement dated April 4, 2014 are as follows:

The loan agreement is secured by a first priority mortgage on the vessels: M/V Friendly Seas, M/V Gentle Seas and M/V Peaceful Seas.

The loan bears interest at LIBOR, plus a margin of 3.25%.

The outstanding loan amount as of December 31, 2014, of $46,713,600 consists of the following: (i) $12,313,600 relating to the M/V Friendly Seas, which is required to be repaid in 26 consecutive quarterly installments of $286,400, plus a balloon repayment of $4,867,200 payable simultaneously with the final installment in the second quarter of 2021, and (ii) $34,400,000 relating to the M/V Gentle Seas and the M/V Peaceful Seas, which is required to be repaid in 28 consecutive quarterly installments of $506,000, plus a balloon repayment of $20,232,000 payable simultaneously with the final installment in the fourth quarter of 2021.

Covenants (as defined in the respective loan agreement):

The aggregate fair market value of the mortgaged vessels to outstanding loan ratio shall exceed 125%.

 (f)HSBC Bank Plc (July 2, 2010): On April 8, 2014, the Company signed a supplemental agreement with HSBC Bank Plc (“HSBC”) and agreed to amend the definitions of certain financial covenants, to prepay an amount of $800,000 that was prepaid on April 10, 2014, and to reduce the outstanding scheduled quarterly installments from $400,000 to $380,000, commencing from the second quarter of 2014. In addition, on August 1, 2014, the Company agreed with HSBC to extend the existing waivers for the financial covenants relating to the minimum interest and debt service coverage ratios, from June 30, 2014 to December 31, 2015.

The main terms and conditions of the loan agreement dated July 2, 2010, as subsequently amended, are as follows:

The loan is secured by a first priority mortgage on the vessel M/V Dream Seas.

The loan bears interest at LIBOR, plus a margin of 3.00%.

The outstanding loan amount as of December 31, 2014, of $14,460,000 is required to be repaid in 23 consecutive quarterly installments of $380,000, plus a balloon repayment of $5,720,000 payable simultaneously with the final installment in the third quarter of 2020.

Covenants (as defined in the respective loan agreement):

The ratio of total net debt to EBITDA shall be applicable and not exceed 9.00:1.00 from January 1, 2016 until December 31, 2016 and 8.00:1.00 thereafter.

The ratio of EBITDA to interest expense shall be applicable and not be less than 2.50:1.00 from January 1, 2016 until the final maturity of the facility.

The market value adjusted net worth of the Company shall be at least $50,000,000 until December 31, 2013 and $100,000,000 thereafter.

The ratio of total net debt to value adjusted total assets shall be applicable and not greater than 0.80:1.00 from January 1, 2014 until the final maturity of the facility.

The fair market value of the mortgaged vessel to outstanding loan ratio shall exceed 105% until December 31, 2013, 110% until December 31, 2014 and 120% thereafter.

(g-1)Nordea Bank Finland Plc (May 5, 2011): On January 7, 2014, we took delivery of our fourth Handysize drybulk vessel; the M/V Proud Seas (refer to Notes 5 and 6). Upon the delivery of the vessel, we drew the total amount of the then undrawn portion of the facility of $25,394,427, by mortgaging both the M/V Priceless Seas and the M/V Proud Seas. On June 10, 2014, the Company completed the refinancing of the M/V Prosperous Seas, the M/V Precious Seas, the M/V Priceless Seas and the M/V Proud Seas as discussed below, and repaid in full the then outstanding indebtedness under its existing syndicated loan facility led by Nordea Bank Finland Plc (“Nordea”) dated May 5, 2011.

(g-2)Nordea Bank Finland Plc (May 6, 2014): On May 6, 2014, the Company completed the documentation for a senior secured loan facility with a syndicate of major European banks led by Nordea in an amount of $160,000,000. This facility will be used for the refinancing of six vessels of its operating fleet (the four Handysize vessels M/V Prosperous Seas, M/V Precious Seas, M/V Priceless Seas and the M/V Proud Seas, and the Panamax vessels M/V Coral Seas and M/V Golden Seas), along with the financing of up to 60% of the market value of the remaining two Ultramax newbuilding drybulk carriers, the Hull numbers DY4050 and DY4052, and two of its Kamsarmax newbuilding drybulk carriers, the Hull numbers YZJ1144 and YZJ1145, that are expected to be delivered between the second and fourth quarter of 2015. On June 10, 2014, the Company completed the refinancing of the six vessels of its operating fleet discussed above. The Company drew a total amount of $81,750,000 and repaid in full the then outstanding indebtedness under its existing loan agreements with Bank of Scotland Plc (dated December 4, 2007) and Nordea (dated May 5, 2011). Such refinancing resulted in the write off of the unamortized financing costs of the respective facilities of $1,027,694, which is included in Interest and finance costs in the accompanying consolidated statement of comprehensive loss for the year ended December 31, 2014.

The main terms and conditions of the loan agreement dated May 6, 2014 are as follows:

The loan is secured by a first priority mortgage on the vessels: M/V Coral Seas, M/V Golden Seas, M/V Prosperous Seas, M/V Precious Seas, M/V Priceless Seas and M/V Proud Seas.

The loan bears interest at LIBOR, plus any mandatory costs, plus a margin of 3.20%.

The outstanding loan amount as of December 31, 2014, of $78,273,638 is required to be repaid in 22 consecutive quarterly installments of $1,738,181, plus a balloon repayment of $40,033,656 payable simultaneously with the final installment in the second quarter of 2020.

Covenants (as defined in the respective loan agreement):

The Company shall maintain a positive working capital at all times, excluding any balloon repayments of long-term loan facilities.

There is available to the Company cash and cash equivalents (including restricted but unpledged cash representing minimum liquidity required to be maintained under any financial indebtedness) which are not subject to any security interest, in an amount of not less than the greater of (i) 6% of total financial indebtedness and (ii) $750,000 per vessel owned on the last day of the relevant test period. In the event that the Company pays any dividend or makes any other form of distribution, after the payment of such dividend or the making of such distribution there is available to the Company cash and cash equivalents in an amount of not less than the greater of (i) 8% of total financial indebtedness and (ii) $1,000,000 per vessel owned on the last day of the relevant test period.

The ratio of market value adjusted shareholders’ equity to the market value adjusted total assets shall be equal to or greater than 30%.

The aggregate fair market value of the mortgaged vessels to outstanding loan ratio shall exceed 135%.

(h)Senior unsecured notes due 2021: On August 8, 2014, the Company completed the offering of 1,000,000 senior unsecured notes due 2021 (“Notes”), pursuant to its effective shelf registration statement. The Notes were issued in minimum denominations of $25.00 and integral multiples of $25.00 in excess thereof, and bear interest at a rate of 8.375% per year, payable quarterly on each February 15, May 15, August 15 and November 15, commencing on November 15, 2014. The Notes will mature on August 15, 2021, and may be redeemed in whole or in part at any time or from time to time after August 15, 2017. The net proceeds from the offering amounted to $23,856,583, net of underwriting discounts and commissions of $812,500, and offering expenses payable by the Company of $330,917. The Notes trade on NASDAQ under the symbol “PRGNL”.

The indenture governing the Notes contains certain restrictive covenants, including limitations on asset sales and:

Limitation on Borrowings: Net borrowings not to exceed 70% of total assets.

Limitation on Minimum Net Worth: Net worth to always exceed $100,000,000.

China Development Bank (May 17, 2013): Following the sale of the 4,800 TEU containership newbuilding as discussed in Note 5, in the first quarter of 2014 the Company mutually agreed with China Development Bank to cancel the corresponding credit facility for the vessel. Such cancelation resulted in the write off of the unamortized financing costs of the respective facility of $483,054, which is included in Interest and finance costs in the accompanying consolidated statement of comprehensive loss for the year ended December 31, 2014.

Additional Covenants: Each of the above loan and credit facilities are secured by first priority mortgages on all vessels described in Note 1, first assignments of all freights, earnings and insurances. They also contain covenants that require the Company to maintain adequate insurance coverage and to obtain the lender’s consent before it changes the flag, class or management of the vessels, or enter into a new line of business. The facilities include customary events of default, including those relating to a failure to pay principal or interest, a breach of covenant, representation and warranty, a cross-default to other indebtedness and non-compliance with security documents, and prohibits the Company from paying dividends if the Company is in default on its facilities and if, after giving effect to the payment of the dividend, the Company is in breach of a covenant.

In addition, each of the above loan and credit facilities require a minimum balance of cash and cash equivalents to be maintained at all times with the respective lender, ranging from $400,000 to $750,000 per mortgaged vessel, in excess of any additional cash collateral to be maintained, as defined by the respective loan agreements.

Certain of the above loan and credit facilities restrict the amount of dividends the Company may pay to $0.50 per share per annum and limit the amount of quarterly dividends the Company may pay to 100% of its net income for the immediately preceding financial quarter. In addition, under the existing loan and credit facilities, the Company is required to maintain minimum liquidity after payment of dividends equal to the greater of the next six months’ debt service, 8% of total financial indebtedness or $1,000,000 per vessel. Furthermore, according to the supplemental agreement the Company entered into with Unicredit on March 27, 2015 as discussed above, the Company is not permitted to declare or pay any dividends until all the deferred amounts of the facility’s repayment installments have been repaid in full.

Covenants Compliance: As of December 31, 2014, the Company was in compliance with all debt covenants with respect to its debt agreements, with the exception of the security cover ratio covenant contained in the facility with Commerzbank. The respective breach was subsequently cured as in April 2015, the Company agreed with Commerzbank to waive the application of the security cover ratio covenant contained in the facility effective from December 31, 2014 until December 31, 2015 as discussed above.

Given the current drybulk charter rates, it is probable that the Company will not be in compliance with the minimum working capital requirement and the minimum liquidity requirement contained in certain of its loan and credit facilities on the applicable measurement dates in 2015. Furthermore, based on the Company’s cash flow projections for 2015, cash on hand and cash provided by operating activities will not be sufficient to cover scheduled debt repayments due in 2015. The Company is currently in negotiations with such lenders to obtain waivers for the affected covenants. The Company is also exploring several alternatives aiming to manage its working capital requirements and other commitments if current drybulk charter rates remain at today’s low levels including negotiations for the restructuring of its loans.

Other Information: As of December 31, 2014, the Company had an aggregate borrowing capacity of up to $78,000,000 with respect to the undrawn portion of the syndicated loan facility led by Nordea (dated May 6, 2014), for the partial financing of the outstanding newbuilding program as discussed above.

The interest cost charged for the years ended December 31, 2012, 2013 and 2014 amounted to $5,673,906, $6,129,911 and $7,451,854, respectively.

The capitalized interest for the years ended December 31, 2012, 2013 and 2014 amounted to $611,655, $786,263 and $1,618,836, respectively.

The weighted average interest rate for the years ended December 31, 2012, 2013 and 2014 was 2.76%, 3.21% and 3.53%, respectively.

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Interest Rate Swaps (Details)	12 Months Ended
	Dec. 31, 2014
Interest Rate Swaps [Abstract]
Assessment of criteria for hedge accounting	Following the $800,000 prepayment to HSBC and the refinancing of the loan agreements with HSH dated July 31, 2008 and Nordea dated May 5, 2011 as discussed in Note 9, the Company reassessed the criteria for hedge accounting with respect to the corresponding interest rate swaps and concluded that same were no longer met. Accordingly, all the above interest rate swaps did not qualify for hedge accounting as of December 31, 2014.

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Commitments and Contingencies - Newbuildings (Table) (Details) (USD $)	Dec. 31, 2014
Newbuildings for the year ending
December 31, 2015	$ 101,700,617
Total	$ 101,700,617

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Financial Instruments and Fair Value Disclosures - Effect of Derivative Instruments designated as hedging instruments (Table) (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Interest rate swaps	$ 131,238	$ 131,112	$ (847,943)
Gain Recognized in Accumulated Other Comprehensive Loss - Effective Portion
Interest rate swaps	$ 131,238	$ 131,112

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Interest Rate Swaps (Table) (Details) (USD $)	12 Months Ended
	Dec. 31, 2014		Dec. 31, 2013
Derivative [Line Items]
Notional amount	$ 56,208,156		$ 68,976,781
Floating rate	LIBOR
Not Qualifying for Hedge Accounting | Unicredit Bank AG
Derivative [Line Items]
Effective date	Aug. 27, 2010
Termination Date	Aug. 27, 2015
Notional amount	25,500,000	[1]	35,700,000	[1]
Fixed rate	2.465%
Floating rate	3-month LIBOR
Not Qualifying for Hedge Accounting | HSBC Bank Plc
Derivative [Line Items]
Effective date	Apr. 10, 2012
Termination Date	Apr. 10, 2017
Notional amount	4,560,000	[2]	0	[2]
Fixed rate	1.485%
Floating rate	3-month LIBOR
Not Qualifying for Hedge Accounting | HSH Nordbank AG
Derivative [Line Items]
Effective date	May 08, 2012
Termination Date	May 05, 2017
Notional amount	9,562,500	[3]	0	[3]
Fixed rate	1.22%
Floating rate	3-month LIBOR
Not Qualifying for Hedge Accounting | Nordea Bank Finland Plc
Derivative [Line Items]
Effective date	May 04, 2012
Termination Date	Mar. 31, 2017
Notional amount	5,918,792	[4]	0	[4]
Fixed rate	1.14%
Floating rate	3-month LIBOR
Not Qualifying for Hedge Accounting | Nordea Bank Finland Plc
Derivative [Line Items]
Effective date	Jun. 18, 2012
Termination Date	May 04, 2017
Notional amount	5,885,615	[5]	0	[5]
Fixed rate	1.01%
Floating rate	3-month LIBOR
Not Qualifying for Hedge Accounting | HSH Nordbank AG
Derivative [Line Items]
Effective date	Aug. 06, 2012
Termination Date	May 05, 2017
Notional amount	4,781,250	[6]	0	[6]
Fixed rate	0.98%
Floating rate	3-month LIBOR
Not Qualifying for Hedge Accounting | Total
Derivative [Line Items]
Notional amount	56,208,157		35,700,000
Qualifiying for Hedge Accounting | HSBC Bank Plc
Derivative [Line Items]
Effective date	Apr. 10, 2012
Termination Date	Apr. 10, 2017
Notional amount	0	[2]	5,040,000	[2]
Fixed rate	1.485%
Floating rate	3-month LIBOR
Qualifiying for Hedge Accounting | HSH Nordbank AG
Derivative [Line Items]
Effective date	May 08, 2012
Termination Date	May 05, 2017
Notional amount	0	[3]	10,312,500	[3]
Fixed rate	1.22%
Floating rate	3-month LIBOR
Qualifiying for Hedge Accounting | Nordea Bank Finland Plc
Derivative [Line Items]
Effective date	May 04, 2012
Termination Date	Mar. 31, 2017
Notional amount	0	[4]	6,401,958	[4]
Fixed rate	1.14%
Floating rate	3-month LIBOR
Qualifiying for Hedge Accounting | Nordea Bank Finland Plc
Derivative [Line Items]
Effective date	Jun. 18, 2012
Termination Date	May 04, 2017
Notional amount	0	[5]	6,366,073	[5]
Fixed rate	1.01%
Floating rate	3-month LIBOR
Qualifiying for Hedge Accounting | HSH Nordbank AG
Derivative [Line Items]
Effective date	Aug. 06, 2012
Termination Date	May 05, 2017
Notional amount	0	[6]	5,156,250	[6]
Fixed rate	0.98%
Floating rate	3-month LIBOR
Qualifiying for Hedge Accounting | Total
Derivative [Line Items]
Notional amount	$ 0		$ 33,276,781

[1] The notional amount reduces by $2,550,000 on a quarterly basis up until the expiration of the interest rate swap.

[2] The notional amount reduces by $120,000 on a quarterly basis up until the expiration of the interest rate swap.

[3] The notional amount reduces by $187,500 on a quarterly basis up until the expiration of the interest rate swap.

[4] The notional amount reduces by $120,792 on a quarterly basis up until the expiration of the interest rate swap.

[5] The notional amount reduces by $120,115 on a quarterly basis up until the expiration of the interest rate swap.

[6] The notional amount reduces by $93,750 on a quarterly basis up until the expiration of the interest rate swap.

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Financial Instruments and Fair Value Disclosures (Tables)

12 Months Ended

Dec. 31, 2014

Financial Instruments and Fair Value Disclosures [Abstract]

Derivative Instruments - Balance Sheet Location

		December 31, 2013	December 31, 2014
	Balance Sheet Location	Fair Value	Fair Value
Derivatives designated as hedging instruments
Interest rate swaps	Non-Current Assets – Interest rate swaps	$(87,295)	$-
Interest rate swaps	Current liabilities – Interest rate swaps	294,505	-
Interest rate swaps	Long-Term Liabilities – Interest rate swaps	22,683	-
	Subtotal	$229,893	$-
Derivatives not designated as hedging instruments
Interest rate swaps	Non-Current Assets – Interest rate swaps	$-	$(66,475)
Interest rate swaps	Current liabilities – Interest rate swaps	685,960	589,896
Interest rate swaps	Long-Term Liabilities – Interest rate swaps	359,433	17,369
	Subtotal	$1,045,393	$540,790
Total derivatives		$1,275,286	$540,790

Effect of Derivative Instruments designated as hedging instruments (Gain Recognized in Accumulated Other Comprehensive Loss - Effective Portion)

	Year Ended December 31,
	2013	2014
Interest rate swaps	$131,112	$131,238
Total	$131,112	$131,238

Effect of Derivative Instruments designated as hedging instruments (Location of Loss Transferred from Accumulated Other Comprehensive Loss in Statements of Comprehensive Loss - Effective Portion)

		Year Ended December 31,
		2013	2014
Interest rate swaps – Realized Loss	Interest and finance costs	$(312,069)	$(98,656)
Total		$(312,069)	$(98,656)

Effect of Derivative Instruments not designated as hedging instruments

		Year Ended December 31,
	Location of Gain / (Loss) Recognized	2013	2014
Interest rate swaps – Fair value	Loss on derivatives, net	$834,829	$504,602
Interest rate swaps – Realized Loss	Loss on derivatives, net	(930,117)	(892,342)
Net loss on derivatives		$(95,288)	$(387,740)

Summary of Valuation of Interest Rate Swaps

Financial Instruments	Significant Other Observable Inputs (Level 2)
	December 31, 2013	December 31, 2014
Interest rate swaps – asset	$(87,295)	$(66,475)
Interest rate swaps – liability	1,362,581	607,265
Total	$1,275,286	$540,790

Location of Recognized Gain / (Loss) from Marketable Securities

		Year Ended December 31,
	Location of Gain / (Loss) Recognized	2013 Gain / (Loss)	2014 Gain / (Loss)
Marketable securities – Initial measurement	(Gain) / loss from marketable securities, net	$3,113,306	$-
Marketable securities – Realized Loss	(Gain) / loss from marketable securities, net	(1,911,212)	(25,529)
Net gain / (loss) from marketable securities		$1,202,094	$(25,529)

Summary of Valuation of Available For Sale Securites

Financial Assets	Quoted Prices in Active Markets (Level 1)
	December 31, 2013	December 31, 2014
KLC Shares – Marketable Securities	$1,616,329	$955,535

Location of Impairment Loss on Investment in Affiliate

		Year Ended December 31,
	Location of Loss Recognized	2013	2014
Dilution effect	Loss on investment in affiliate	$(390,821)	$(221,679)
Impairment loss	Loss on investment in affiliate	(8,229,551)	(8,618,664)
Loss on investment in affiliate		$(8,620,372)	$(8,840,343)

Summary of Valuation of Investment In Affiliate

Financial Assets	Quoted Prices in Active Markets (Level 1)
	December 31, 2013	December 31, 2014
Investment in equity affiliate – Box Ships Inc.	$11,309,375	$2,956,250

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Other Assets (Table) (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Other Assets [Abstract]
Balance at beginning of period	$ 2,297,121	$ 2,596,029
Additions	4,172,546	642,825
Amortization	(2,108,716)	(941,733)	(447,573)
Balance at end of period	$ 4,360,951	$ 2,297,121	$ 2,596,029

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Gain from Vessel Early Redelivery and Other (Income) / Expenses

12 Months Ended

Dec. 31, 2014

Gain from Vessel Early Redelivery and Other (Income) / Expenses [Abstract]

Gain from Vessel Early Redelivery and Other (Income) / Expenses

14.Gain from Vessel Early Redelivery and Other (Income) / Expenses

Gain from vessel early redelivery represents income recognized in connection with the early termination of period time charters resulting from a request of the respective vessel charterers for which the Company received cash compensation of $0, $2,267,818 and $0 in 2012, 2013 and 2014, respectively.

Other income for the year ended December 31, 2012, relates mainly to claim recoveries for damages that had been incurred in one of the Company’s vessels of $703,422, and to a cash compensation of $29,137 received from KLC as the first annual installment in connection with the settlement agreement dated September 15, 2011.

Other income for the year ended December 31, 2013, relates mainly to a cash compensation of $402,596 received from KLC representing the present value of the total outstanding cash payments the Company was entitled to receive in connection with the settlement agreement dated September 15, 2011 and pursuant to the amended KLC rehabilitation plan that was approved by the Seoul Central District Court in March 2013, and to claim recoveries of $218,634 relating to a dispute regarding one of the Company’s vessels.

During the third quarter of 2014, the Company recognized a charge of $250,283, in relation to a special contribution, which was paid in October 2014. According to the Greek Law 4301/2014, the charge is a voluntary contribution calculated based on the carrying capacity of the Company’s fleet, and is payable annually for four fiscal years, until 2017. The special contribution is included in Other expenses in the accompanying consolidated statement of comprehensive loss for the year ended December 31, 2014.

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Significant Accounting Policies (Policy)

12 Months Ended

Dec. 31, 2014

Significant Accounting Policies [Abstract]

Principles of Consolidation

(a) Principles of Consolidation: The consolidated financial statements incorporate the financial statements of the Company. Income and expenses of subsidiaries acquired or disposed of during the period are included in the consolidated statements of comprehensive income / (loss) from the effective date of acquisition and up to the effective date of disposal, as appropriate. All intercompany balances and transactions have been eliminated. Paragon, as the holding company, determines whether it has a controlling financial interest in an entity by first evaluating whether the entity is a voting interest entity or a variable interest entity. Under ASC 810 “Consolidation” a voting interest entity is an entity in which the total equity investment at risk is sufficient to enable the entity to finance itself independently and provides the equity holders with the obligation to absorb losses, the right to receive residual returns and the right to make financial and operating decisions. The holding company consolidates voting interest entities in which it owns all, or at least a majority (generally, greater than 50%) of the voting interest. Variable interest entities (“VIE”) are entities as defined under ASC 810 that in general either do not have equity investors with voting rights or that have equity investors that do not provide sufficient financial resources for the entity to support its activities. The determination of whether a reporting entity is required to consolidate another entity is based on, among other things, the other entity’s design and purpose and the reporting entity’s power, through voting or similar rights, to direct the activities of the other entity that most significantly impact the other entity’s economic performance. A controlling financial interest in a VIE is present when a company has the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE, or both. Only one reporting entity, known as the primary beneficiary, is expected to be identified as having a controlling financial interest and thus is required to consolidate the VIE. The Company evaluates all arrangements that may include a variable interest in an entity to determine if it may be the primary beneficiary, and would be required to include assets, liabilities and operations of a VIE in its consolidated financial statements. As of December 31, 2013 and 2014, no such interest existed.

Use of Estimates

(b) Use of Estimates: The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Other Comprehensive Income / (Loss)

(c) Other Comprehensive Income / (Loss): The Company follows the accounting guidance relating to “Comprehensive Income,” which requires separate presentation of certain transactions that are recorded directly as components of stockholders’ equity. The Company has elected to present net income / (loss) and other comprehensive income / (loss) in a single continuous statement of comprehensive income / (loss) in its consolidated financial statements.

Foreign Currency Translation

(d) Foreign Currency Translation: The functional currency of the Company is the U.S. Dollar. For other than derivative instruments, each asset, liability, revenue, expense, gain or loss arising from a foreign currency transaction is measured and recorded in the functional currency using the exchange rate in effect at the date of the transaction. As of balance sheet date, monetary assets and liabilities that are denominated in a currency other than the functional currency are adjusted to reflect the exchange rate prevailing at the balance sheet date and any gains or losses are included in the statements of comprehensive income / (loss). As of December 31, 2013 and 2014, the Company had no foreign currency derivative instruments.

Cash and Cash Equivalents

(e) Cash and Cash Equivalents: The Company considers highly liquid investments such as time deposits and certificates of deposit with an original maturity of three months or less to be cash equivalents.

Restricted Cash

(f) Restricted Cash: Restricted cash represents pledged cash deposits or minimum liquidity required to be maintained under the Company’s borrowing arrangements or in relation to bank guarantees issued on behalf of the Company. In the event that the obligation to maintain such deposits is expected to be terminated within the next twelve months, or relates to general minimum liquidity requirements with no obligation to retain such funds in retention accounts, these deposits are classified as current assets. Otherwise they are classified as non-current assets.

Trade Receivables (net)

(g) Trade Receivables (net): Trade receivables (net), reflect the receivables from charters, net of an allowance for doubtful accounts. At each balance sheet date, all potentially uncollectible accounts are assessed individually for purposes of determining the appropriate provision for doubtful accounts. Allowance for doubtful accounts as of December 31, 2013 and 2014 was $265,751 and $409,226, respectively.

Insurance Claims

(h) Insurance Claims: The Company records insurance claim recoveries for insured losses incurred on damages to fixed assets and for insured crew medical expenses under Other receivables. Insurance claims are recorded, net of any deductible amounts, at the time the Company’s fixed assets suffer insured damages or when crew medical expenses are incurred, recovery is probable under the related insurance policies and the Company can make an estimate of the amount to be reimbursed following submission of the insurance claim.

Inventories

(i) Inventories: Inventories consist of lubricants and stores on board the vessels. When vessels are unemployed or are operating under voyage charters, bunkers on board are also recorded in inventories. Inventories are stated at the lower of cost or market. Cost is determined by the first in, first out method.

Vessel Cost

(j) Vessel Cost: Vessels are stated at cost, which consists of the contract price, less discounts, plus any direct expenses incurred upon acquisition, including improvements, commission paid, delivery expenses and other expenditures to prepare the vessel for her initial voyage. Financing costs incurred during the construction period of the vessels are also capitalized and included in the vessels’ cost. Subsequent expenditures for conversions and major improvements are also capitalized when they appreciably extend the life, increase the earning capacity or improve the efficiency or safety of the vessels. Repairs and maintenance are expensed as incurred.

Impairment of Long-Lived Assets

(k) Impairment of Long-Lived Assets: The Company reviews its long-lived assets “held and used” for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. When the estimate of future undiscounted cash flows, excluding interest charges, 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. The Company measures an impairment loss as the difference between the carrying value of the asset and its fair value. In this respect, management regularly reviews the carrying amount of the vessels in connection with the estimated recoverable amount for each of the Company’s vessels.

The undiscounted projected net operating cash flows for each vessel are determined by considering the contracted charter revenues from existing charters for the fixed vessel days and an estimated daily time charter equivalent for the unfixed days (based on the most recent ten year historical average of similar size vessels) over the remaining estimated life of the vessel, assumed to be 25 years from the date of initial delivery from the shipyard, net of brokerage commissions, the salvage value of each vessel, which is estimated to be $300 per lightweight ton, expected outflows for vessels’ future dry-docking expenses and estimated vessel operating expenses, assuming an average annual inflation rate where applicable. The Company uses the historical ten-year average as it is considered a reasonable estimation of expected future charter rates over the remaining useful life of the Company’s vessels since it represents a full shipping cycle that captures the highs and lows of the market. The Company utilizes the standard deviation in order to eliminate the outliers of the sample before computing the historic ten-year average of the one-year time charter rate.

Vessel Depreciation

(l) Vessel Depreciation: Depreciation is computed using the straight-line method over the estimated useful life of the vessels, after considering the estimated salvage value. Each vessel's salvage value is equal to the product of its lightweight tonnage and estimated scrap rate, which up until September 30, 2012, was estimated to be $150 per lightweight ton. In order to align the scrap rate estimates with the historical average scrap rate, effective from October 1, 2012, the Company adjusted the estimated scrap rate used to calculate the vessels’ salvage value from $150 to $300 per lightweight ton. The impact of the increase in the estimated scrap rate is a decrease in depreciation expense going forward.

Management estimates the useful life of the Company’s vessels to be 25 years from the date of initial delivery from the shipyard, including secondhand vessels. Secondhand vessels are depreciated from the date of their acquisition through their remaining estimated useful life.

Other Fixed Assets

(m) Other Fixed Assets: Other fixed assets consist of computer systems installed on board the vessels to improve their efficiency, software and a vehicle. Other fixed assets are stated at cost, less accumulated depreciation. Depreciation is calculated using the straight-line method over the useful life of the assets, which is estimated to be 5 years for the computer systems software, and 6 years for the Company’s vehicle. Depreciation charged in the years ended December 31, 2012, 2013 and 2014 amounted to $135,095, $164,527 and $203,357, respectively.

Investments in Affiliate

(n) Investments in Affiliate: Investments in the common stock of entities, in which the Company has significant influence over operating and financial policies, are accounted for using the equity method. Under this method, the investment in the affiliate is initially recorded at cost and is adjusted to recognize the Company’s share of the earnings or losses of the investee after the acquisition date and is adjusted for impairment whenever facts and circumstances indicate that a decline in fair value below the cost basis is other than temporary. The amount of the adjustment is included in the determination of net income / (loss). Differences between the carrying amount of the investment in affiliate and the amount of the Company’s underlying equity in the net assets of the affiliate is amortized over the remaining life of the affiliate’s tangible and intangible assets, and is included in Equity in net income / (loss) of affiliate in the consolidated statements of comprehensive income / (loss). Dividends received from an affiliate reduce the carrying amount of the investment. When the Company’s share of losses in an affiliate equals or exceeds its interest in the affiliate, the Company does not recognize further losses, unless the Company has incurred obligations or made payments on behalf of the affiliate.

Dry-docking and Special Survey Costs

(o) Dry-docking and Special Survey Costs: Dry-docking and special survey costs are expensed in the period incurred.

Financing Costs

(p) Financing Costs: Financing fees incurred for obtaining new loans and credit facilities are deferred and amortized to interest expense over the respective loan or credit facility using the effective interest rate method. Any unamortized balance of costs relating to loans repaid or refinanced is expensed in the period the repayment or refinancing is made, subject to the accounting guidance regarding debt extinguishment. Any unamortized balance of costs related to credit facilities repaid is expensed in the period. Any unamortized balance of costs relating to credit facilities refinanced are deferred and amortized over the term of the respective credit facility in the period the refinancing occurs, subject to the provisions of the accounting guidance relating to Debt – Modifications and Extinguishments. The unamortized financing costs are reflected in Other assets in the accompanying balance sheets.

Debt restructurings

(q) Debt restructurings: The Company accounts for debt modifications or restructuring as troubled debt restructuring when a lender for economic or legal reasons related to the Company’s financial situation grants a concession that it would not otherwise consider. These concessions may include a reduction in the interest rate, principal or accrued interest, extension of the maturity date or other actions intended to minimize potential losses. The Company considers a lender to have granted a concession if the Company’s effective interest rate on the restructured debt is less than the effective interest rate of the old debt immediately before the restructuring. The Company considers the total future cash flows (defined as principal plus interest) of the restructured debt in comparison with the carrying value of the original debt. If a debt modification or restructuring is determined to be a troubled debt restructuring, the Company reduces the carrying amount of the debt when the debt balance is greater than the total future cash flows under the new terms, in which case a gain is recognized. When the total future cash flows of the restructured debt are greater than the carrying value at the date of amendment, the carrying value of the original debt is not adjusted. In a troubled debt restructuring in which the Company agrees to transfer assets to fully settle the debt, the Company recognizes a gain on restructuring for the difference between the carrying amount of the debt and the more clearly evident of: (a) the fair value of the transferred assets or (b) the fair value of the settled debt.

Pension and Retirement Benefit Obligations - Crew

(r) Pension and Retirement Benefit Obligations—Crew: The vessel owning companies employ the crew on board under short-term contracts (usually up to nine months) and, accordingly, they are not liable for any pension or post-retirement benefits.

Revenue and Expenses

(s) Revenue and Expenses:

Revenue is recognized when a charter agreement exists, the vessel is made available to the charterer and collection of the related revenue is reasonably assured.

Time Charter Revenue: Time charter revenues are recorded ratably over the term of the charter as service is provided, including the amortization / accretion of the above / below market acquired time charters, where applicable. When two or more time charter rates are involved during the life term of a charter agreement, the Company recognizes revenue on a straight-line basis, and income accrued or deferred as a result is included in Other receivables or Deferred income, respectively. Time charter revenues received in advance of the provision of charter service are recorded as deferred income, and recognized when the charter service is rendered.

Revenue / Voyage charters: Voyage charter is a charter where a contract is made in the spot market for the use of a vessel for a specific voyage for a specified freight rate per ton. If a charter agreement exists and collection of the related revenue is reasonably assured, revenue is recognized as it is earned ratably during the duration of the period of each voyage. A voyage is deemed to commence upon the latest 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 the completion of discharge of the current cargo. Demurrage income represents payments by a charterer to a vessel owner when loading or discharging time exceeds the stipulated time in the voyage charter and is recognized as it is earned.

Commissions: Charter hire commissions are deferred and amortized over the related charter period and are presented separately in the accompanying consolidated statements of comprehensive loss.

Voyage Expenses: Voyage expenses exclude commissions and consist of all costs that are unique to a particular voyage, primarily including port expenses, canal dues, war risk insurances and fuel costs. Voyage expenses also include losses from the sale of bunkers to charterers and bunkers consumed during off-hire periods and while traveling to and from dry-docking.

Vessel Operating Expenses: Vessel operating expenses are accounted for as incurred on the accrual basis. Vessel operating expenses include crew wages and related costs, the cost of insurance, expenses relating to repairs and maintenance, the cost of spares and consumable stores, and other miscellaneous expenses.

Share based Compensation

(t) Share based Compensation: Share based payments to employees and directors, including grants of employee and directors stock options, are recognized in the statements of comprehensive income / (loss) based on their grant date fair values and amortized over the required service period.

Segment Reporting

(u) Segment Reporting: The Company reports financial information and evaluates its operations by charter revenues and not by the length of ship employment for its customers (i.e., spot vs. time charters) or by geographical region as the charterer is free to trade the vessel worldwide and, as a result, the disclosure of geographical information is impracticable. The Company does not have discrete financial information to evaluate the operating results for each type of charter. Although revenue can be identified for these types of charters, management cannot and does not identify expenses, profitability or other financial information for these charters. As a result, management, including the Chief Executive Officer being the chief operating decision maker, reviews operating results solely by revenue per day and operating results of the fleet, and thus the Company has determined that it operates under one reportable segment.

Derivatives

(v) Derivatives: The Company enters into interest rate swap agreements to manage its exposure to fluctuations of interest rate risk associated with its borrowings. All derivatives are recognized in the consolidated financial statements at their fair value. The fair value of the interest rate derivatives is based on a discounted cash flow analysis. When such derivatives do not qualify for hedge accounting, the Company recognizes their fair value changes in current period earnings. When the derivatives qualify for hedge accounting, the Company recognizes the effective portion of the gain or loss on the hedging instrument directly in other comprehensive income / (loss), while the ineffective portion, if any, is recognized immediately in current period earnings. The Company, at the inception of the transaction, documents the relationship between the hedged item and the hedging instrument, as well as its risk management objective and the strategy of undertaking various hedging transactions. The Company also assesses at hedge inception of whether the hedging instruments are highly effective in offsetting changes in the cash flows of the hedged items.

The Company discontinues cash flow hedge accounting if the hedging instrument expires and it no longer meets the criteria for hedge accounting or designation is revoked by the Company. At that time, any cumulative gain or loss on the hedging instrument recognized in equity is kept in equity until the forecasted transaction occurs. When the forecasted transaction occurs, any cumulative gain or loss on the hedging instrument is recognized in current period earnings. If a hedged transaction is no longer expected to occur, the net cumulative gain or loss recognized in equity is transferred to current period earnings as financial income or expense.

Fair value of financial instruments

(w) Fair value of financial instruments: The fair value of the interest rate derivatives is based on a discounted cash flow analysis.

In accordance with the requirements of accounting guidance relating to Fair Value Measurements, the Company classifies and discloses its assets and liabilities carried at fair value 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.

Earnings per Share (EPS)

(x) Earnings per Share (EPS): The computation of basic earnings per share is based on the weighted average number of common shares outstanding during the period determined using the two-class method of computing earnings per share. Non-vested share awards issued are included in the two-class method and income attributable to non-vested share awards is deducted from the net income reported for purposes of calculating net income available to common shareholders used in the computation of basic earnings per share. The computation of diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised. Such securities include non-vested share awards for which the assumed proceeds upon grant are deemed to be the amount of compensation cost attributable to future services and are not yet recognized and common shares issuable upon exercise of the Company’s outstanding warrants, to the extent that they are dilutive, using the treasury method.

Subsequent Events

(y) Subsequent Events: The Company evaluates subsequent events or transactions up to the date in which the financial statements are issued according to the requirements of ASC 855.

Recent Accounting Pronouncements

(z) Recent Accounting Pronouncements:

The Financial Accounting Standards Board (“FASB”) and the International Accounting Standards Board (“IASB”) jointly issued a standard that will supersede virtually all of the existing revenue recognition guidance in U.S. GAAP and is effective for annual periods beginning on or after December 15, 2016. The standard establishes a five-step model that will apply to revenue earned from a contract with a customer (with limited exceptions), regardless of the type of revenue transaction or the industry. The standard’s requirements will also apply to the recognition and measurement of gains and losses on the sale of some non-financial assets that are not an output of the entity’s ordinary activities (e.g., sales of property, plant and equipment or intangibles). Extensive disclosures will be required, including disaggregation of total revenue; information about performance obligations; changes in contract asset and liability account balances between periods and key judgments and estimates. Management is in the process of accessing the impact of the new standard on Company’s financial position and performance.

In August 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-15 – Presentation of Financial Statements - Going Concern. ASU 2014-15 provides guidance about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. ASU 2014-15 requires an entity’s management to evaluate at each reporting period based on the relevant conditions and events that are known at the date of financial statements are issued, whether there are conditions or events, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued and to disclose the necessary information. ASU 2014-15 is effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted.

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Advances for Vessels Under Construction (Details) (USD $)

12 Months Ended

0 Months Ended

9 Months Ended

1 Months Ended

6 Months Ended

4 Months Ended

5 Months Ended

1 Months Ended

3 Months Ended

Dec. 31, 2014

Dec. 31, 2013

Dec. 31, 2012

Jul. 07, 2014

Oct. 15, 2014

Feb. 11, 2014

Jun. 30, 2014

Apr. 25, 2014

May 23, 2012

Jan. 29, 2014

Mar. 25, 2014

Mar. 28, 2014

Dec. 09, 2013

Dec. 08, 2013

Mar. 05, 2014

Property Plant And Equipment [Line Items]

Impairment loss

$ 15,695,282

$ 0

$ 0

Gain from sale of assets

402,805

0

0

Net proceeds from sale of assets

9,995,000

0

0

Proceeds from long-term debt

179,144,427

0

28,908,750

Newbuilding program

As of December 31, 2014, the Company’s newbuilding program consisted of two Ultramax drybulk carriers (Hull numbers DY4050 and DY4052) and three Kamsarmax drybulk carriers (Hull numbers YZJ1144, YZJ1145 and YZJ1142) with scheduled delivery between the second and fourth quarter of 2015.

As of December 31, 2013, the Company’s newbuilding program consisted of one Handysize drybulk carrier (Hull no. 625), two Ultramax drybulk carriers (Hull numbers DY152 and DY153) and one 4,800 TEU containership (C/V Box King) with expected deliveries in 2014, as well as two Ultramax drybulk carriers (Hull numbers DY4050 and DY4052) with expected deliveries in 2015.

HSH Nordbank AG (April 4, 2014)

Property Plant And Equipment [Line Items]

Proceeds from long-term debt

12,600,000

34,400,000

Hull no. DY4050

Property Plant And Equipment [Line Items]

Drybulk carrier capacity

63,500

Acquisition cost of vessels

28,250,000

Newbuilding contract price installment

5,592,661

3,884,530

Remaining contracted newbuilding installments

18,772,809

Vessel purchase commission amount paid to the management company

282,500

Hull no. DY4052

Property Plant And Equipment [Line Items]

Drybulk carrier capacity

63,500

Acquisition cost of vessels

28,250,000

Newbuilding contract price installment

5,592,661

3,884,530

Remaining contracted newbuilding installments

18,772,809

Vessel purchase commission amount paid to the management company

282,500

Hull no. DY4050 and Hull no. DY4052

Property Plant And Equipment [Line Items]

Acquisition cost of vessels

56,500,000

C/V Box King

Property Plant And Equipment [Line Items]

Acquisition cost of vessels

55,000,000

57,500,000

Vessel purchase commission rate

3.00%

Impairment loss

15,695,282

Containership capacity

4,800

Sale price of vessel

42,500,000

Reduction in contract price of vessel

770,000

Gain from sale of assets

402,805

Net proceeds from sale of assets

9,995,000

M/V Gentle Seas (Hull no. DY152) and M/V Peaceful Seas (Hull no. DY153)

Property Plant And Equipment [Line Items]

Newbuilding contract price installment

35,672,940

M/V Gentle Seas (Hull no. DY152) and M/V Peaceful Seas (Hull no. DY153) | HSH Nordbank AG (April 4, 2014)

Property Plant And Equipment [Line Items]

Proceeds from long-term debt

34,400,000

M/V Proud Seas (Hull no. 625)

Property Plant And Equipment [Line Items]

Drybulk carrier capacity

37,227

Newbuilding contract price installment

21,637,078

Hull no. YZJ1144

Property Plant And Equipment [Line Items]

Drybulk carrier capacity

81,800

Acquisition cost of vessels

30,550,000

Newbuilding contract price installment

9,165,000

Remaining contracted newbuilding installments

21,385,000

Vessel purchase commission amount paid to the management company

305,500

Hull no. YZJ1145

Property Plant And Equipment [Line Items]

Drybulk carrier capacity

81,800

Acquisition cost of vessels

30,550,000

Newbuilding contract price installment

9,165,000

Remaining contracted newbuilding installments

21,385,000

Vessel purchase commission amount paid to the management company

305,500

Hull no. YZJ1142

Property Plant And Equipment [Line Items]

Drybulk carrier capacity

81,800

Acquisition cost of vessels

30,550,000

Newbuilding contract price installment

9,165,000

Remaining contracted newbuilding installments

21,385,000

Vessel purchase commission amount paid to the management company

305,500

Allseas Marine SA

Property Plant And Equipment [Line Items]

Vessel purchase commission rate

1.00%

1.00%

Containerships | Hull no. 656

Property Plant And Equipment [Line Items]

Number of newbuildings cancelled

1

Containerships | C/V Box King

Property Plant And Equipment [Line Items]

Number of newbuildings

1

Handysize Vessels | M/V Proud Seas (Hull no. 625)

Property Plant And Equipment [Line Items]

Number of newbuildings

1

Ultramax Vessels | Hull no. DY4050 and Hull no. DY4052

Property Plant And Equipment [Line Items]

Number of newbuildings

2

2

Ultramax Vessels | M/V Gentle Seas (Hull no. DY152) and M/V Peaceful Seas (Hull no. DY153)

Property Plant And Equipment [Line Items]

Number of newbuildings

2

Kamsarmax Vessels | Hull no. YZJ1144, Hull no. YZJ1145 and Hull no. YZJ1142

Property Plant And Equipment [Line Items]

Acquisition cost of vessels

$ 91,650,000

Number of newbuildings

3

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Basis of Presentation and General Information (Details)	Dec. 31, 2014
Basis of Presentation and General Information [Abstract]
Ownership percentage by CEO	28.40%

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Consolidated Statements of Comprehensive Loss (Parentheticals) (Related Party, USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Related Party
Commissions related party	$ 708,153	$ 750,533	$ 646,987
Vessels operating expenses related party	1,282,699	797,143	660,474
Dry-docking expenses related party	123,840	109,248	0
General and administrative expenses related party	5,775,899	7,670,556	3,304,116
Vessel sale & purchase commissions related party	745,000	0	0
Loss from contract cancellation related party	0	444,421	0
Interest income related party	$ 0	$ 504,326	$ 675,856

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Going Concern

12 Months Ended

Dec. 31, 2014

Going Concern [Abstract]

Going Concern

3. Going Concern

As of December 31, 2014, the Company was in compliance with the financial and security ratio covenants contained in its debt agreements, with the exception of the security cover ratio covenant contained in the facility with Commerzbank AG. The respective breach was subsequently cured as in April 2015, the Company agreed with Commerzbank AG to waive the application of the security cover ratio covenant contained in the facility effective from December 31, 2014 until December 31, 2015 as discussed in Note 9.

Given the current drybulk charter rates, it is probable that the Company will not be in compliance with the minimum working capital requirement and the minimum liquidity requirement contained in certain of its loan and credit facilities on the applicable measurement dates in 2015. Furthermore, based on the Company’s cash flow projections for 2015, cash on hand and cash provided by operating activities will not be sufficient to cover scheduled debt repayments due in 2015.

The Company is currently in negotiations with such lenders to obtain waivers for the affected covenants. The Company is also exploring several alternatives aiming to manage its working capital requirements and other commitments if current drybulk charter rates remain at today’s low levels including negotiations for the restructuring of its loans. As management believes that the negotiations will be successful, the accompanying consolidated financial statements were prepared assuming that the Company will continue as a going concern. Therefore, the accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets and liabilities, or any other adjustments that might result in the event the Company is unable to continue as a going concern.

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Long-Term Debt - Disclosed in the Consolidated Balance Sheets (Table) (Details) (USD $)	Dec. 31, 2014	Dec. 31, 2013
Long-Term Debt [Abstract]
Current portion of long-term debt	$ 20,714,324	$ 17,257,750
Long-term debt	210,064,414	162,857,176
Total	$ 230,778,738	$ 180,114,926

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Earnings per Share ("EPS") (Details)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Stock Option
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Anti-dilutive securities	2,800	2,800	2,800
Non Vested Share Awards
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Anti-dilutive securities	348,500	339,000	58,335

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Financial Instruments and Fair Value Disclosures - Measured on a Recurring Basis (Table) (Details) (USD $)	Dec. 31, 2014	Dec. 31, 2013
Derivatives Fair Value [Line Items]
Total	$ 540,790	$ 1,275,286
Significant Other Observable Inputs (Level 2)
Derivatives Fair Value [Line Items]
Interest rate swaps - asset	(66,475)	(87,295)
Interest rate swaps - liability	$ 607,265	$ 1,362,581

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Basis of Presentation and General Information (Tables)

12 Months Ended

Dec. 31, 2014

Basis of Presentation and General Information [Abstract]

Drybulk Vessel Owning Subsidiaries

Vessel Owning Company	Date of Incorporation	Country of Incorporation	Vessel’s Name	Delivery Date	Built	DWT
Trade Force Shipping S.A.	November 15, 2006	Marshall Islands	Deep Seas	December 2006	1999	72,891
Frontline Marine Company	November 15, 2006	Marshall Islands	Calm Seas	December 2006	1999	74,047
Fairplay Maritime Ltd.	November 15, 2006	Marshall Islands	Kind Seas	December 2006	1999	72,493
Donna Marine Co.	July 4, 2007	Marshall Islands	Pearl Seas	August 2007	2006	74,483
Protea International Inc.	July 17, 2007	Liberia	Sapphire Seas	August 2007	2005	53,702
Reading Navigation Co.	July 17, 2007	Liberia	Diamond Seas	September 2007	2001	74,274
Imperator I Maritime Company	September 27, 2007	Marshall Islands	Coral Seas	November 2007	2006	74,477
Canyon I Navigation Corp.	September 27, 2007	Marshall Islands	Golden Seas	December 2007	2006	74,475
Paloma Marine S.A.	June 19, 2008	Liberia	Friendly Seas	August 2008	2008	58,779
Eris Shipping S.A.	April 8, 2010	Liberia	Dream Seas	July 2010	2009	75,151
Coral Ventures Inc.	August 5, 2009	Liberia	Prosperous Seas	May 2012	2012	37,293
Winselet Shipping And Trading Co. Ltd.	April 6, 2010	Liberia	Precious Seas	June 2012	2012	37,205
Aminta International S.A.	May 5, 2010	Liberia	Priceless Seas	January 2013	2013	37,202
Adonia Enterprises S.A.	May 5, 2010	Liberia	Proud Seas (1)	January 2014	2014	37,227
Alcyone International Marine Inc.	June 17, 2013	Liberia	Gentle Seas (1)	October 2014	2014	63,350
Neptune International Shipping & Trading S.A.	June 17, 2013	Liberia	Peaceful Seas (1)	October 2014	2014	63,331

(1) Refer to Notes 5 and 9

Vessel Under Construction Owning Subsidiaries

Vessel Owning Company	Date of Incorporation	Country of Incorporation	Hull Number	Type	Expected Delivery	DWT
Amphitrite Shipping Inc.	June 17, 2013	Liberia	DY4050 (1)	Drybulk Carrier	2015	63,500
Mirabel International Maritime Co.	June 17, 2013	Liberia	DY4052 (1)	Drybulk Carrier	2015	63,500
Dolphin Sunrise Limited	February 25, 2014	Marshall Islands	YZJ1144 (1)	Drybulk Carrier	2015	81,800
Nautilus Investment Limited	February 25, 2014	Marshall Islands	YZJ1145 (1)	Drybulk Carrier	2015	81,800
Oceanus Investments Limited	February 25, 2014	Marshall Islands	YZJ1142 (1)	Drybulk Carrier	2015	81,800

(1) Refer to Note 5

Non-Vessel Owning Subsidiaries

Non-Vessel Owning Company	Date of Incorporation	Country of Incorporation
Camelia Navigation S.A.	November 15, 2006	Marshall Islands
Explorer Shipholding Limited	November 15, 2006	Marshall Islands
Epic Investments Inc.	December 21, 2006	Marshall Islands
Opera Navigation Co. (1)	December 21, 2006	Marshall Islands
Ovation Services Inc. (1)	September 16, 2009	Marshall Islands
Irises Shipping Ltd. (1)	October 6, 2009	Marshall Islands
Letitia Shipping Limited (1)	May 4, 2010	Marshall Islands
Nereus Navigation Ltd. (1)	May 4, 2010	Marshall Islands
Ardelia Navigation Limited (1)	June 15, 2010	Liberia
Eridanus Trading Co. (1)	July 1, 2010	Liberia
Delfis Shipping Company S.A. (1)	February 7, 2011	Liberia

(1) In March and April 2015, the Company proceeded with the dissolution of the respective subsidiaries since they were no longer active

Major Charterers

Charterer	Percentage of charter revenue
	2012	2013	2014
Intermare Transport GmbH	24.1%	13.4%	-
Morgan Stanley Capital Group Inc.	15.7%	-	-
Mansel Ltd.	16.6%	-	-
Cargill International S.A.	19.2%	33.6%	11.6%
Total	75.6%	47.0%	11.6%

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Financial Instruments and Fair Value Disclosures (Details) (USD $)	12 Months Ended			0 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Apr. 15, 2015	May 09, 2013
Derivative [Line Items]
Long term bank loans and loan due from related party interest rate basis	LIBOR
Trading symbol	PRGN
Fair value of KLC shares	$ 955,535	$ 1,616,329
Cash received from the sale of KLC shares, net of commissions	498,056	0	0
Unrealized loss on change in fair value of marketable securities	(162,737)	(2,064,265)	(827,377)
Price of Box Ships common share				$ 1.06
Fair value of the investment in Box Ships				3,643,750
Senior unsecured notes due 2021
Derivative [Line Items]
Trading symbol	PRGNL
Quoted close price of the Company's Notes	$ 17
Debt instrument fair value	17,000,000
KLC Shares
Derivative [Line Items]
Total number of KLC shares held by the Company	44,550	65,896		26,417
Number of additional KLC shares received from amended Settlement Agreement with KLC					58,483
Fair value of KLC shares	955,535
Number of KLC shares sold	21,346			18,133
Average price per share (KLC shares sold)	$ 23.52			$ 22.62
Cash received from the sale of KLC shares, net of commissions	498,056			406,808
U.S. dollar / KRW exchange rate				1,096.92
Unrealized loss on change in fair value of marketable securities	$ 137,208

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Basis of Presentation and General Information (Table) (Details)	12 Months Ended
	Dec. 31, 2014
Deep Seas
Property Plant And Equipment [Line Items]
DWT	72,891
Vessel Year Built	1999
Delivery Date	December 2006
Date of Incorporation	Nov. 15, 2006
Calm Seas
Property Plant And Equipment [Line Items]
DWT	74,047
Vessel Year Built	1999
Delivery Date	December 2006
Date of Incorporation	Nov. 15, 2006
Kind Seas
Property Plant And Equipment [Line Items]
DWT	72,493
Vessel Year Built	1999
Delivery Date	December 2006
Date of Incorporation	Nov. 15, 2006
Pearl Seas
Property Plant And Equipment [Line Items]
DWT	74,483
Vessel Year Built	2006
Delivery Date	August 2007
Date of Incorporation	Jul. 04, 2007
Sapphire Seas
Property Plant And Equipment [Line Items]
DWT	53,702
Vessel Year Built	2005
Delivery Date	August 2007
Date of Incorporation	Jul. 17, 2007
Diamond Seas
Property Plant And Equipment [Line Items]
DWT	74,274
Vessel Year Built	2001
Delivery Date	September 2007
Date of Incorporation	Jul. 17, 2007
Coral Seas
Property Plant And Equipment [Line Items]
DWT	74,477
Vessel Year Built	2006
Delivery Date	November 2007
Date of Incorporation	Sep. 27, 2007
Golden Seas
Property Plant And Equipment [Line Items]
DWT	74,475
Vessel Year Built	2006
Delivery Date	December 2007
Date of Incorporation	Sep. 27, 2007
Friendly Seas
Property Plant And Equipment [Line Items]
DWT	58,779
Vessel Year Built	2008
Delivery Date	August 2008
Date of Incorporation	Jun. 19, 2008
Dream Seas
Property Plant And Equipment [Line Items]
DWT	75,151
Vessel Year Built	2009
Delivery Date	July 2010
Date of Incorporation	Apr. 08, 2010
Prosperous Seas
Property Plant And Equipment [Line Items]
DWT	37,293
Vessel Year Built	2012
Delivery Date	May 2012
Date of Incorporation	Aug. 05, 2009
Precious Seas
Property Plant And Equipment [Line Items]
DWT	37,205
Vessel Year Built	2012
Delivery Date	June 2012
Date of Incorporation	Apr. 06, 2010
Priceless Seas
Property Plant And Equipment [Line Items]
DWT	37,202
Vessel Year Built	2013
Delivery Date	January 2013
Date of Incorporation	May 05, 2010
Proud Seas
Property Plant And Equipment [Line Items]
DWT	37,227
Vessel Year Built	2014
Delivery Date	January 2014
Date of Incorporation	May 05, 2010
Gentle Seas
Property Plant And Equipment [Line Items]
DWT	63,350
Vessel Year Built	2014
Delivery Date	October 2014
Date of Incorporation	Jun. 17, 2013
Peaceful Seas
Property Plant And Equipment [Line Items]
DWT	63,331
Vessel Year Built	2014
Delivery Date	October 2014
Date of Incorporation	Jun. 17, 2013
Hull DY4050
Property Plant And Equipment [Line Items]
DWT	63,500
Expected Delivery	2015
Date of Incorporation	Jun. 17, 2013
Hull DY4052
Property Plant And Equipment [Line Items]
DWT	63,500
Expected Delivery	2015
Date of Incorporation	Jun. 17, 2013
Hull YZJ1144
Property Plant And Equipment [Line Items]
DWT	81,800
Expected Delivery	2015
Date of Incorporation	Feb. 25, 2014
Hull YZJ1145
Property Plant And Equipment [Line Items]
DWT	81,800
Expected Delivery	2015
Date of Incorporation	Feb. 25, 2014
Hull YZJ1142
Property Plant And Equipment [Line Items]
DWT	81,800
Expected Delivery	2015
Date of Incorporation	Feb. 25, 2014

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Share Based Payments - Equity Incentive Plan - Non-vested Share Awards

12 Months Ended

Dec. 31, 2014

Share Based Payments - Equity Incentive Plan - Non-vested Share Awards [Abstract]

Share Based Payments - Equity Incentive Plan - Non-vested Share Awards

13.Share Based Payments

Equity incentive plan – October 11, 2006

On October 11, 2006, the Company adopted an equity incentive plan, under which the officers, key employees and directors of the Company will be eligible to receive options to acquire shares of Class A common shares. The Board of Directors administers the plan. Under the terms of the plan, the Board of Directors are able to grant new options exercisable at a price per Class A common share to be determined by the Board of Directors but in no event less than fair market value as of the date of grant. The plan also permits the Board of Directors to award non-vested share units, non-qualified options, stock appreciation rights and non-vested shares.

On March 26, 2014, the Company’s Board of Directors approved to cancel the remaining Class A common shares reserved for issuance under the equity incentive plan.

Equity incentive plan – March 26, 2014

On March 26, 2014, the Company adopted an equity incentive plan, under which the officers, key employees and directors of the Company will be eligible to receive options to acquire shares of Class A common shares. A total of 2,000,000 Class A common shares were reserved for issuance under the plan. The Board of Directors administers the plan. Under the terms of the plan, the Board of Directors are able to grant new options exercisable at a price per Class A common share to be determined by the Board of Directors but in no event less than fair market value as of the date of grant. The plan also permits the Board of Directors to award non-vested share units, non-qualified options, stock appreciation rights and non-vested shares.

(a)Options

As of December 31, 2013 and 2014, there were 2,800 options with an exercise price of $120.00 outstanding and exercisable, which vested in 2010. Their weighted average remaining contractual life was 1.89 years as of December 31, 2014.

There were no unvested share options as of December 31, 2013 and 2014.

(b)Non-vested share awards

Until the forfeiture of any non-vested share award, all non-vested share awards regardless of whether vested, the grantee has the right to vote such non-vested share awards, to receive and retain all regular cash dividends paid on such non-vested share awards with no obligation to return the dividend if employment ceases and to exercise all other rights provided that the Company will retain custody of all distributions other than regular cash dividends made or declared with respect to the non-vested share awards. All share awards are conditioned upon the option holder's continued service as an employee of the Company, or a director through the applicable vesting date. The Company estimates the forfeitures of non-vested share awards to be immaterial. The Company will, however, re-evaluate the reasonableness of its assumption at each reporting period.

The accounting guidance relating to the Share based payments describes two generally accepted methods of accounting for non-vested share awards with a graded vesting schedule for financial reporting purposes: 1) the "accelerated method", which treats an award with multiple vesting dates as multiple awards and results in a front-loading of the costs of the award and 2) the "straight-line method" which treats such awards as a single award. Management has selected the straight-line method with respect to the non-vested share awards because it considers each non-vested share award to be a single award and not multiple awards, regardless of the vesting schedule. Additionally, the "front-loaded" recognition of compensation cost that results from the accelerated method implies that the related employee services become less valuable as time passes, which management does not believe to be the case. The grant date fair value is considered to be the average between the relevant highest and lowest price recorded on the grant date.

The details of the non-vested share awards as of December 31, 2014, are outlined as follows:

Equity incentive plan – October 11, 2006

Grant date	Final Vesting date	Total shares granted	Grant date fair value	Shares cancelled	Shares vested	Non-vested share awards
November 26, 2013	December 31, 2015	200,000	$5.165	-	100,000	100,000
November 26, 2013	December 31, 2015	12,000	$5.165	-	6,000	6,000
December 19, 2013	December 31, 2015	16,000	$6.380	-	8,000	8,000
January 31, 2014	December 31, 2015	32,000	$6.670	3,000	14,500	14,500
TOTAL		260,000		3,000	128,500	128,500

Equity incentive plan – March 26, 2014

Grant date	Final Vesting date	Total shares granted	Grant date fair value	Shares cancelled	Shares vested	Non-vested share awards
December 10, 2014	December 31, 2016	200,000	$2.440	-	-	200,000
December 10, 2014	December 31, 2016	20,000	$2.440	-	-	20,000
TOTAL		220,000		-	-	220,000

A summary of the activity for non-vested share awards for the year ended December 31, 2014 is as follows:

	Number of Shares	Weighted Average Fair Value
Non-vested, December 31, 2013	339,000	$4.75
Granted	252,000	3.64
Cancelled	(3,000)	6.67
Vested	(239,500)	4.63
Non-vested, December 31, 2014	348,500	$4.15

The remaining unrecognized compensation cost amounting to $1,189,936 as of December 31, 2014, is expected to be recognized over the remaining weighted average period of 1.3 year, according to the contractual terms of those non-vested share awards.

On February 26, 2015, 70,000 non-vested Class A common shares were granted to employees of Allseas, with a grant date fair value of $1.865 per share, which will vest ratably over a two-year period commencing on December 31, 2015.

On March 17, 2015, 30,000 non-vested Class A common shares were granted to executive officers of Allseas, with a grant date fair value of $1.310 per share, which will vest ratably over a two-year period commencing on December 31, 2015.

Share based compensation amounted to $2,536,702, $805,469 and $986,416 for the years ended December 31, 2012, 2013 and 2014, respectively and is included in general and administrative expenses.