Paragon Shipping (PRGN) Updates on Newbuilding Contracts, Debt Obligations; Files Suit Against Tradewinds

Paragon Shipping Inc. (Nasdaq: PRGN) announced the following updates on its debt agreements, newbuilding contracts and other corporate actions:

Newbuilding Contracts

The Company has entered into an agreement with Jiangsu Yangzijiang Shipbuilding Co., or Yangzijiang, to extend the deliveries of its three Kamsarmax newbuilding drybulk carriers (Hull numbers YZJ1144, YZJ1145 and YZJ1142), to September 30, 2016, October 31, 2016 and November 30, 2016, respectively, subject to certain conditions.

Bank of Ireland - Unsecured Paid-in-Kind Note ("PIK Note")

In January 2016, the Company agreed with Bank of Ireland to apply the total net proceeds from the sale of M/V Kind Seas towards an immediate prepayment of the loan facility. An amount of $2.2 million was written-off and the remaining amount of $2.2 million, plus accrued interest, was converted into a PIK Note. The PIK Note was non-amortizing and had a maturity date of December 31, 2020, at which time it would be repaid at par. Interest on the PIK Note would accrue on a quarterly basis at an interest rate equal to the aggregate of 2.5% and the applicable LIBOR, and would be treated as payment-in-kind. On April 11, 2016, the Company received a notice of cancellation, pursuant to which it was discharged from all of its obligations under the PIK Note.

Other Corporate Actions

On April 26, 2016, the Company and Mr. Michael Bodouroglou, the Company's Chairman, President, Chief Executive Officer and Interim Chief Financial Officer, filed a law suit against Tradewinds and their financial reporter, Mr. Joe Brady Stamford for defamation damages. In particular on February 18, 2016, Tradewinds reported that the Company had obtained its Board of Directors approval for filing bankruptcy under Chapter 11. The Company and its Board of Directors declared that the above statement was totally untrue. The Company believes that such false statements had a negative impact on the Company, its reputation and stock price. The lawsuit was submitted before the Prosecutor of the Criminal Court of Athens.

Senior Unsecured Notes due 2021

In relation to the issued and outstanding senior unsecured notes due 2021 that bear interest at a rate of 8.375% per year ("Unsecured Notes"), the Company will not proceed with the interest payment, which is due on May 15, 2016, due to lack of liquidity.

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